Wednesday, April 28, 2010

Financial reform in our time

The latest bit of obstructionism from the Party of No seems to be drawing to a close.
Senate Republicans ended three days of resistance on Wednesday and said they were ready to allow debate of legislation to overhaul regulation of the nation’s financial system.
The same grandstanders that had moaned about "back room deals" and Congress not heeding the will of the people with respect to insurance reform, had been holding up open debate on financial reforms that a substantial majority of Americans favor, all in the service of their own "private negotiations" (i.e., back room deals).

This latest temper tantrum doesn't seem to have gained the Republicans much. Weirdly, the reason they're stating for dropping their filibuster is that that the Democrats hadn't conceded anything to Sen. Shelby, the Republican's chief negotiator.

That's not to say that there hasn't been any affect from the delay. Republicans aligned themselves with the bankers who helped to crash the economy and reinforced their reputations as partisan obstructionists. By caving on the filibuster, they've shown a remarkable lack of backbone. And we may yet be treated to the spectacle of several Republicans having to explain their initial support of the filibuster while explaining their positive vote for the legislation.

Tuesday, April 13, 2010

Turning the corner on the deficit?

A return to economic growth and possibly to employment growth is causing the deficit to improve sooner than government officials had thought. The Washington Post reports
The federal deficit is running significantly lower than it did last year, with the budget gap for the first half of fiscal 2010 down 8 percent over the same period a year ago, senior Obama administration officials said Monday.

The officials attributed the results to higher tax revenue and to lower spending than projected on bailing out the financial system. If the trend continues for the rest of the year, it would mean the annual deficit would be $1.3 trillion -- about $300 billion less than the administration's projection two months ago for 2010.
Even with the improvements, the projected deficit remains jawdroppingly large and only slightly below last year's figure. Also, the better figures only apply to a few months. The trends would need to continue for the FY 2010 deficit to actually fall.

In addition, the improvements don't much affect the long-term picture, which shows deficits starting to climb again after 2014 when shortfalls in Medicare and Social Security begin to add significant pressure to the budget.

Still, the improvements are, well, improvements. They give the government some breathing space as it moves from a strongly stimulative fiscal position to a more neutral position.

Friday, April 2, 2010

Unambiguously good job news

The March job figures were just released by the Department of Labor, and the news is unambiguously good. The payroll figures show that 162,000 jobs were added on a seasonally adjusted basis in March. The gains were broad-based, with every major industrial sector adding jobs except information and financial services. The increases also come on top of upwardly revised employment figures for January and February.

There was some expectation that hiring for the Census might be a major jobs driver this month, but this does not appear to be the case. Of the 162,000 jobs that were added, 123,000 were private sector jobs. Government employment was up, but gains in federal government jobs were partly offset by losses in state and local government jobs.

The unemployment rate held steady at 9.7 percent; however, this mainly reflected an increase in the number of people who were in the labor force. On a seasonally adjusted basis, the proportion of people who were employed rose as did the proportion of people in the labor force (those who identify themselves as working or looking for work).

Overall, the employment figures appear to be on the right track. However, it will take many years of these types of gains to recover all the jobs that were lost during the Great Recession.