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Presidential Debate 3: Jobs & Growth

Though I was shocked to realize that neither education nor healthcare—two giant issues—were chosen as topics for any of the 3 debates, in the end, it’s still ‘the economy, stupid’. Through all the diversions, and outrageous, unseemly and sad degradation of this election, that is still the take away for me.

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Whatever you think of the candidates, too many people really are suffering as the American Dream drifts further and further away, and that’s not going to change until we deal with our chronic reality of stagnant wages and low growth. That is why, though the official topics are Debt & Entitlements, Immigration, Economy, Supreme Court, Foreign Hot Spots and Fitness to be President, I am focussing on the Economy and Jobs for my debate Questions in this blog.

For Secretary Clinton:

On your website under An Economy That Works For Everyone, you say you will fight to pass a plan in the first 100 days to invest in infrastructure, manufacturing, research and technology, clean energy, and small businesses.
ATQ: Could you give one specific example of how you would invest in each of those categories? Also, in which of those areas will the most jobs be created?

Under Jobs & Wages, you write that you will: Advance our commitment to research and technology in order to create the industries and jobs of the future.
ATQ: What are the jobs of the future? What percentage of the unemployed could realistically be retrained for those jobs? Please Cite The Basis for your answers.

You also claim you will ensure caregiving and services jobs of the future are good-paying jobs.
ATQ: How will you ensure this when healthcare costs are running out of control? Again, Cite The Basis for answers.

Under Manufacturing, you plan to: Strengthen American manufacturing through a $10 billion investment in “Make it in America” partnerships that bring together workers and labor, business, universities, community colleges, and government at every level to harness the strength of manufacturing communities across America.
ATQ: How exactly will this work?

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For Mr. Trump:

On the Economy page of your website, you list as the first item of your vision: Create a dynamic booming economy that will create 25 million new jobs over the next decade by sweeping reforms in tax, trade, energy and regulatory policies.
ATQ: Please apportion the 25 million jobs created to the four areas of reform you list, and Cite The Basis for each.

On your Fact Sheet link, you state: Every income group receives a tax cut under the Trump plan, with million more being removed from the income tax rolls and low-income Americans paying no income tax at all.
ATQ: How much will this grow the deficit? If you pay for these tax cuts, what government programs will you cut to do it, and by how much?

Under Regulation: Every year, over-regulation costs our economy $2 trillion dollars a year and reduces household wealth by almost $15,000 dollars.
ATQ: Please Cite The Basis of these figures, and identify the regulations with the worst impact and how you would reform them.

You have nothing on your website for small business, yet small businesses comprise 39% of GNP, 52% of all U.S. sales, and employ 54 million people (57.3% of private workforce).
ATQ: How would you foster small business growth, and please Cite The Basis to support your ideas?

They keep saying they want to talk about the issues. Let’s see if they do. What’s more, did they Cite The Basis?

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business carbon emissions economy education growth healthcare immigration income inequality poverty Presidential debates Rule: Ask The Question Rule: Cite The Basis terrorism

Town Hall Debate: Public Asks The Questions

For the second Presidential Debate, which will be in a Town Hall format, half the Questions will come from the public. You can still get yours in by submitting them to this site. I’ve included mine below. Some are from my previous blog since they were not asked in the first debate.

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Environment

Background: Renewable energies have become more cost effective than fossil fuels in price per mega-watt hour, with wind & solar thin film at $55 & $43/MWH, vs. gas & coal at $65 & $108/MWH, respectively.
Question: How much will you invest in renewables, and how many new jobs would that create?

Background: Many politicians, Democrat and Republican alike, publicly support taxing carbon as a way to incentivize fossil fuel industries to cut carbon emissions.
Question: Do you favor a tax on carbon, and if not, how would you fight climate change?

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Immigration

Background: Immigrants are twice as likely as US-born to become entrepreneurs, and half as likely to become incarcerated. They pay more into Medicare, Social Security and taxes than they receive in benefits.
Question: Do you support a path to citizenship for unauthorized immigrants and what is it?

*                                *                                *

Healthcare

Question: What is needed to stem the costs of healthcare, while still covering everyone?

*                                *                                *

Economy / Jobs / Inequality

Background: Historically, healthy GDP growth was at least 3%. In the last several years, it has been stalled at less than 2%. The projections for this year are 1.6% (IMF) and 1.8% (Federal Reserve).
Question: How would you increase GDP growth, and what data or studies support your ideas?

Background: Small businesses comprise 39% of GNP, 52% of all U.S. sales, and employ 54 million people (57.3% of private workforce).
Question: How would you foster small business growth, and what data supports your ideas?

Background: The Earned Income Credit supplements low income worker’s wages, but the Guaranteed Minimum Income covers the unemployed well as low income employed, and is actually backed by many Republicans.
Question: Do you favor the Earned Income Credit, or a Minimum Income to help the poor?

*                                *                                *

Education

Background:  The quality of education is critical to a nation’s economic health and standing in the world.
Question:  If investing in the future is important, what would you do to improve education?

*                                *                                *

Terrorism

Background: Terrorists have been known to use US aggression against them as a recruitment tool for other terrorists.
Question: How will you effectively fight terrorism without fueling further recruitment?

Background: Wars have proven too costly to fight, but we have other options to draw on for our security: partnering with allies, intelligence gathering, foreign weapons sales and foreign military training.
Question: How would you fight terrorism, while minimizing spending and lives lost?

What are your Questions?

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business economy education growth income inequality poverty Presidential debates Rule: Ask The Question Rule: Cite The Basis terrorism

First Presidential Debate: Ask The Questions (and Get The Answers)!

The topics chosen for tonight’s first Presidential Debate include: America’s Direction, Achieving Prosperity, and Securing America. Here are some of the Questions I want to see Asked.

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America’s Direction This is one of those non-specific categories tailored for generic, boiler plate answers. I’m not crazy about the topic, but here goes…

ATQ:  In order of priority, what are the 3 biggest problems negatively impacting the direction America is currently taking and, briefly, what would you do to change direction for each?

ATQ:  If “investing in the future” is key to setting and maintaining a positive direction for America, how important is education, and what would you do to improve it?

*                                *                                *

Achieving Prosperity
ATQ:  Historically, healthy GDP growth was at least 3%. In the last several years, it has been stalled at less than 2%, with projections for the future showing this continuing. What is the best way to increase GDP growth, and what economic data can you cite as the basis supporting your proposal?

ATQ:  Small businesses are responsible for 39% of GNP, comprise 52% of all U.S. sales, and employ 54 million, or 57% of the private workforce. Given these statistics, what is the best way to foster small business growth, and what data can you cite to back that up?

ATQ:  Do you favor the Earned Income Credit, which helps low income workers, or a Guaranteed Minimum Income that covers the unemployed as well as low income employed, and which Glen Hubbard and other Republicans support?

*                                *                                *

Securing America
ATQ:  Given that fighting wars has proven too costly, what strategy would you employ to effectively fight terrorism that would minimize deficit increases as well as lives lost?

ATQ:  What emphasis in importance do you give each of the following categories for fighting terrorism: military buildup, partnering with allies, intelligence, foreign weapons sales and foreign military training? How, and in what areas of the world, would you allocate resources to them? (Admin note: I know this is a mouthful, but I want a full breakdown.)

ATQ to Trump:  You have proposed reinstituting water boarding to deter terrorism. Since terrorists are willing to die for their cause, and use U.S. acts against them as a recruitment tool, would water boarding deter terrorism, or actually encourage more of it?

ATQ to Trump:  Given that terrorism has become globally fragmented, with most attacks being unsponsored, homegrown ones by individuals, how effective would banning all Muslims from countries with previous links to terrorism be, as you have proposed?

ATQ to Clinton:  You are in favor of arming the Syrian rebels. How would you avoid another ‘Libya’ of unintended consequences, with chaos ensuing, in the event Syrian President al-Assad is deposed?

*                                *                                *

What are some of your Ask The Questions?

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economy minimum wage Rule: Ask The Question Rule: Cite The Basis Rule: Correct Inaccuracies Rule: False Argument Rule: Focus Issues Not Politics Rule: Out of Context Rule: Sin of Omission

Minimum Wage Increase & Jobs

Over the past year, debate over raising the minimum wage has converged on 3 points:

    o its effect on employment  (particularly, on teens)
    o its effect on consumer prices
    o whether the Earned Income Credit (EIC) is a better solution for the poor

The non-partisan CBO’s February 2014 report, which analyzes the impact of raising the MW to $10.10 by 2016, paints a clear picture on the first point- employment, or jobs lost.

The CBO report states:

    . 16.5 million people (10% of total employment) will get a raise*
    . revenue will increase by $31 billion
    . 19% of the 16.5M, are from families below the poverty line
    . 2M of the 16.5M, are teens
    . 500,000 jobs could be lost** (0.3% total employment), the majority by teens

So… 10% with higher wages vs. 0.3% with lost jobs.

Not intending to be insensitive on the jobs number, but that is a difference of 33X of people who will gain vs. lose if the MW is raised.  Focussing on lost jobs without representing the larger number with pay gains, constitutes the biggest running Rule break on this issue- a giant Sin of Omission.

It is true that, in addition to the negative of lost jobs, the overall economic impact of raising the MW is murky.  The CBO says: the deficit will decrease in the short term (good), while the long term is unclear; and factoring in the negative effects of lost jobs, lower business profit, and higher prices, reduces the $31B economic infusion to $2B.  But heavily emphasizing the negative side, to the detriment of the positive (as well as any subtleties coloring either), obscures the full impact of raising the MW on the economy and peoples lives.

Other Rule breaks:

On Feb 18, Eamon Javers & Steve Liesman of CNBC, covered the just released CBO report, and though both, technically, represented the main points correctly, they placed emphasis on jobs lost. Mr. Javers glossed over the highly qualitative nuances of the number (see ** note below), and though Liesman didn’t, he characterized it as the second CBO “slap in the face” on jobs (the first being ACA‘s labor disincentive).  In addition, they each, seperately, broke the Focus on Issues, Not Politics Rule by predicting political controversy over the number.

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True, it was offered as a mere observation by both, but is there anyone left out there who needs reminding of how deadlocked our political process is?  Will giving more play to a self-serving strategy for inaction in Washington benefit us?  Or will we benefit by having as much light as possible shed on solutions to problems that are sinking our country- in this case, the continued destruction and decimation of the middle & lower classes?  This Rule is an important one! Stick to the facts you guys. I looked you both up online- you’re journalists, it’s your job.

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On CNBC, March 6, after guest Ron Unz made a compelling case for raising the MW, Michelle Caruso-Cabrera insisted that “the vast % of people on minimum wage are teenagers”.  Kelly Evans should have Corrected that Inaccuracy, coming a full 2 weeks after the report release (she left it to Mr. Unz to do that). A 2009 EPI Report also pegged the % of teenage MW earners low- 20%.  It is hard to know why so many (all on CNBC) have made the claim about teens.  They should all be called on to Cite the Basis!  Even if Caruso-Cabrera intended to say ‘the vast % who will lose their jobs are teens’, a true statement, it would still be Out of Context and misleading since teens comprise only 12% of MWers, and 1.2% of total employment.

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Further, Ms. Evans didn’t Ask the Question:  Why shouldn’t pay increases go predominantly to adults given the chronic wage stagnation that has helped to hollow out the middle class since the 1980‘s?  The CBO says: “employers facing an excess of workers or job applicants tend to favor adults over teenagers”.

To be fair, Mr. Unz did not Cite the Basis for his claim that a higher MW would save $250B in social welfare program spending. A 5 year (2007–2011) Berkeley study of fast-food workers found the cost of public assistance for those families to be $7B a year. Given that and the fact that only 19% of MWers are below the poverty line, it would be nice to learn where that $250B figure comes from.

Finally, consensus on devolving MW decisions to states, though not cited in the CNBC segment, has support from a study described in this NYT article. The case is made for setting MW’s based on regional cost of living standards, citing a 25-30% difference between bigger cities and smaller, more rural ones.

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In many news segments, advocates for the MW cited studies, such as the 1990’s neighboring towns study referenced in these Economist & NYT articles and a University of Chicago study mentioned on Charlie Rose (22 min. in), that showed job losses were minimal.  Critics, on the other hand almost never cited specific data to bolster their case, and resorted over and over again to tired, economic supply & demand theory, like guest Lindsey Piegza on CNBC.

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This CNBC seg, the NYT article and many others do refer to ‘mixed studies’. But by detailing one side of the argument while only passively acknowledging the other, we, the public, are implicitly asked to ‘trust the press’s judgement’ and assume the other side is insignificant.

On CNBC though, Kelly Evans is a bit more definitive, saying: “in studies that do show harm [to jobs], the harm doesn’t seem to be massive”.  To that, Ms. Piegza concedes, but then claims that studies are “tempermental, based on the assumptions” and, referring to the Feds recent Beige Book, adds ~“Calif. business owners are very concerned about the MW hike and having to lay workers off”.  Characterizations & anecdotal data like “mixed studies”, and ‘concerned business owners’, are somewhat informative (I don’t doubt the anguish of employers), but these news outlets really need to Cite the Basis for claims of big job losses.  Failure to do so perpetuates a False Argument if the data is not there (CNBC’s case?), or masks a biased press if it is (Sin of Omission by NYT?).  In any case, laying the data out, pro & con, lays the issue to rest.

Other examples of this pattern include a NYT, Great Divide series piece by Arindrajit Dube (an excellent, comprehensive article on MW), who cites his own collaborative study using 2 decades of data that showed ~”no detectable impact on employment”. Another by Gregory Mankiw, claims ~”many studies suggest a higher MW costs jobs” without citing the studies. Argh!

The one concrete exception came from David Neumark on the Feb. 19 News Hour, who cited his own 2007 survey showing negative impact on jobs.  He did not quote statistics from his study (& I did not read it), but he defended it as “empirical” when Thea Lee implicitly Mischaracterized it as “theoretical”, and not “real world”.  Even if the bulk of studies show raising the MW has minimal negative impact on jobs, it is still mandatory for them to be fairly represented & characterized. Cutting corners on some data, compromises the integrity of all.  It, further, erodes trust and promotes apathy, a scourge of our time.

*          *          *          *          *          *

The most overwhelming, real life data supporting a MW increase was reported by the San Jose Mercury News on San Jose, CA’s own year-old, $8 to $10, wage hike.  The numbers tell the story:

    . unemployment was reduced to 5.8% (from 7.6%) ***
    . 40,000 MW workers spent $100 million in local economy
    . 4,000 new MW jobs in the leisure and hospitality industry were created
    . average weekly hours remained stable at 36.5 (vs. 36.9 in 2012)
    . overall business growth was 3%
    . retail business growth rose to 19% (from 15% in 2012)
    . 84,000 new businesses were registered (vs. 75,000 in 2012)

San Jose is in the heart of Silicon Valley, which rebounded from the recession more quickly than many other parts of the country.  Such striking economic data more than piques my curiosity on what other factors contribute to this kind of success.

Notes:

* The CBO assumed a threshold wage of $11.50 for additional workers who would also be affected by a $10.10 MW increase in order to maintain employee pay differential.

** The margin of error for jobs lost is +-0.5M, giving a range:  negligible to 1M, with a “2/3’s chance” assigned to those estimates.

*** At end of 2013, unemployment rates in CA were: Statewide- 8.3%, East Bay- 6.5%, Santa Clara County- 6%, San Francisco-San Mateo-Marin- 4.8%

The second & third MW issues- the EIC & consumer prices- are continued in Part 2.

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economy Rule: Ask The Question Rule: False Argument Rule: Focus Issues Not Politics Rule: Mischaracterization Rule: Out of Context

Budget & Debt Limit Stalemate- The Media As Enabler?

“Insanity is repeating the same mistake over and over, and expecting a different result.” That saying is often used in reference to politics, but maybe in the current political climate, the converse is true.  Maybe Republicans are applying a proven strategy- repeating an untruth over and over- and, via a feckless press, expecting, …and getting, the same result: appearing to be in the right on ‘willingness to negotiate’, thereby prolonging the debate on debt reduction, their goal. In other words, ‘insanity’, as in, ‘crazy like a fox’.

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Tuesday, on CNBC’s Closing Bell , Maria Bartiromo, in an interview with Rep. John Yarmuth (D-KY), said: “The idea that the President continues to reiterate ‘I will not negotiate’, isn’t it the responsibility of the President to negotiate? At what point does it look like the obstacle to progress is the President, rather than congress?”

‘The President won’t negotiate’: that is the familiar refrain from the Republicans as channeled through the media these past days. The answer to the question of it being his responsibility to negotiate is, yes, of course it is. The point is, he has done that, as well as be specific and clear on his position, which is also his responsibility, as it is the other side’s.

Ms. Bartiromo’s first Rule break was in quoting the President Out of Context. His true position is: ‘I will not negotiate under threat of government shut down.’ Her second mistake relates to the first. By posing the question of the Presidents responsibility to negotiate as she did, she implies he is shirking that responsibility which he is not. He is simply holding firm on his position as the Republicans are on theirs; thus, she breaks the Mischaracterization Rule. In this, she also forgoes the opportunity to recap and educate the public on the true state of talks, and to keep the focus on the more important issues- the budget agreement and debt limit. Isn’t that the responsibility of the media? This breaks the Focus on Issues, Not Politics Rule.

As for the second Question, Ms. Bartiromo Asked the wrong one. Instead of: “At what point does it look like the obstacle … is the President?”, she should have Asked: “At what point is the obstacle the President, and at what point is it Congress?”

Failure to check this type of routine downfall in the media allows agenda seeking partisans to continually game the system, repeating the cycle over and over, as it has across too many news programs, for too many days.

Using opposing parties in debate format, as in this case, can, despite badly worded questions, still bring clarity if those parties know the facts, and present them honestly. In the case of Rep. Yarmuth, assuming he was factually correct, we got some: “The President’s had about 20 conversations with the Republican leadership in the House about the budget since March. The Republicans in the Senate have consistently blocked the conference there, Speaker Boehner has refused to appoint conferees on budget from the House side. There’s been every opportunity to have negotiations on budget levels for the last 6 months, and Republicans have refused to do that.”

Tuesday night on Charlie Rose, when asked if “there was anything new [in the Presidents speech]?”, Chuck Todd (NBC News) said: “The President will support anything Boehner sends him that is ‘clean’, without any of those extraneous, politically charged amendments on both a spending bill and a debt limit, and he will take it for any length of time, so 6 weeks, 8 weeks… The President essentially agreed that, in that period, they’d be locked in some form of negotiation. … Boehner took that offer and called agreeing to that, ‘unconditional surrender’.”

Also on that show, Al Hunt (Bloomberg News) said the effective positions of the two sides have not changed in two years- Republicans want entitlement change, Democrats say no.

So it would appear that both sides have been equally ‘negotiating’, or– more accurately, equally maintaining their respective positions– and for some time. Such prolonged back and forth highlights the need for recaps. Recapping would cut through the dissembling and make crystal clear the absence of progress and the amount of time that’s been wasted ‘reporting’ on it in an endless loop of recriminations and False Arguments. Recapping clarifies things: it leaves the Emperor with no clothes, neutralizes strategies that ‘play the media’, and forces the Dialog to Advance.

And Advancing the Dialog, advances solutions.

This is a tool people, use it. There is simply too much work to do to waste this kind of time, over, and over, and over, and…..