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Thu Jun 30, 2011 9:19 PM EDT
In honor of his last show, MSNBC's Lawrence O'Donnell presents highlights of the Fox host from the past 2.5 years.
Saturday, July 2, 2011
Bachmann Calls The Minimum Wage An ‘Expansion Of Government’ That Needs To Be Eliminated
Rep. Michele Bachmann (R-MN) formally kicked off her presidential campaign yesterday, painting herself as a Tea Party candidate who is ready to lead the country back to prosperity (even if her former chief of staff doesn’t think so).Today, in classic Tea Party form, Bachmann reiterated her long-held belief that a federally mandated minimum wage is a job-killing federal regulation that may need to be abolished.
In 2005, Bachmann told the Minnesota state Senate that abolishing the minimum wage could “wipe out unemployment completely.” When Good Morning America‘s George Stephanopoulos asked her for evidence to back up that claim today, Bachmann struggled to find an answer, initially dodging the question before finally referring to the minimum wage as a regulation that is “inhibiting job growth” and saying it needed to be examined:
STEPHANOPOULOS: Let me try this one more time. So you’re saying the minimum wage is one of those regulations you’d take a look at? You’d try to eliminate it?BACHMANN: Well, what I’m saying is I think we need to look at all regulations.Whatever ones are inhibiting job growth, that’s what we need to look at.STEPHANOPOULOS: And the minimum wage is one of them?BACHMANN: All regulations, George. I think every department, we have just too much expansion of government, and what we need to do is tamp that down so the American people can keep more of what they make.
Watch it:
Paul Krugman has rebutted conservative arguments about the minimum wage, saying, “In reality, reducing wages would at best do nothing for employment; more likely it would actually be contractionary.” As Pat Garofalo found in 2009, almost all of the economic research shows that the minimum wage has little or no effect on unemployment.
Recent statistics show that wages are stagnant and the majority of jobs that are being added arelow-wage jobs. But the workers in those jobs making the minimum wage would actually need an increase in the wage to match the buying power of the minimum wage in 1968.
Another recent study in Michigan showed that the current federal minimum wage — a paltry $7.25 per hour — would need to be doubled to cover basic expenses for a single adult worker and more than tripled to cover the same expenses for an adult worker with children.
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CHART: States That Cut The Most Spending Have Lost The Most Jobs
Our guest blogger is Adam Hersh, an economist at the Center for American Progress Action Fund.
Govs. John Kasich (R-OH), Rick Snyder (R-MI), and Scott Walker (R-WI)
There’s a new cult of economic thought sweeping the nation — or at least many Republican (and even some Democratic) political circles. Its adherents cling to the erroneous belief that sharp government spending cuts will revitalize economic growth and create much needed new jobs
Speaker of the House John Boehner (R-OH) is an ardent follower of this Cut-Grow cult, as are a number of high profile governors. For instance, Gov. John Kasich (R-OH) declared, “We’re going to have to reduce spending…to create a platform for economic growth.” When Gov. Chris Christie (R-NJ) delivered his budget to the state Legislature he argued, “We must continue to cut government spending” to create jobs and prosperity for New Jersey families. Gov. Scott Walker (R-WI) vowed his budget “lays [the] foundation to create jobs.”
Now these Republicans want the American public to drink a giant glass of their Cut-Grow Kool-Aid. But the data actually show the opposite of their claims to be true: steep spending cuts are hampering economic recovery in some states, while other states that resisted cuts or increased spending are now seeing declining unemployment rates, faster private-sector job creation, and stronger economic growth.
From the start of the Great Recession in December 2007 through the end of 2010, 24 states have cut government spending by an average of 7.5 percent after adjusting for inflation. Another 25 states have expanded government outlays by an average of 11 percent. (The analysis excludes Alabama due to data problems reported by the National Association of State Budget Offices). And the differences in these states’ economic performance could not be more self-evident. Relative to national economic trends, states that increased spending enjoyed on average:
- 0.2 percentage point decrease in the unemployment rate
- 1.4 percent increase in private employment
- 0.5 percent real economic growth since the start of the recession
In contrast, states that cut spending saw on average
- 1 percentage point increase in the unemployment rate
- 2.1 percent loss of private employment
- 2.9 percent real economic contraction relative to the national economic trend
Steep state spending cuts have gone hand-in-hand with rising unemployment rates, falling private-sector payroll employment, and lower growth in state’s gross domestic product, or GDP — the sum of all goods and services produced by labor and equipment in each state, less imports.
Take private sector jobs, for example. This graph shows that state spending is not just about jobs for public service workers, but also has far reaching consequences for private businesses and their workers. The downward sloping red line shows the relationship between cuts to state spending and changes in private sector employment relative to the national average since the start of the Great Recession. States that cut spending are seeing significantly more job losses in the private sector than states maintaining or increasing spending levels. For every 10 percent cut in state spending, state economies lost 1.6 percent of their private-sector jobs.
Certainly policymakers should seize every opportunity to eliminate waste and improve the efficiency of delivering government functions. But spending cuts achieved or championed by conservatives are aiming much deeper at public services and public investments critical to economic recovery now as well as the future of U.S. economic growth and competitiveness.
Friday, July 1, 2011
Morning Joe: Mark Halprin and his 'word' for the President
Time Magazine's Mark Halperin shares his impression of President Obama's performance at Wednesday's press conference.
Time's Mark Halperin apologizes to viewers for an earlier comment he made regarding President Obama and his Wednesday press conference on the debt debate.
The Thursday Outlook: The Debt Ceiling is Constitutional
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Thu Jun 30, 2011 11:56 AM EDT
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.Ezra Klein today writes that there's a plausible legal argument that this language supports a finding that the debt ceiling is unconstitutional. And Dave Weigel yesterday, also asked whether the debt ceiling is constitutional. Well, I don't think so.
Here's the tip-off: The article that Weigel links to doesn't question the constitutionality of the debt ceiling. It questions the constitutionality of defaulting. Two different things. The 14th Amendment doesn't prohibit Congress from capping how much money the US can borrow. All it does is prohibit Congress from failing to pay it back. Congress can cap its borrowing and still abide by the 14th Amendment in one of two ways: Stop borrowing, or raise the cap.
It's default that's not an option.
The Wednesday Outlook
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Wed Jun 29, 2011 2:18 PM EDT
All of this, of course, is coming to a head because Republicans are trying to use the Aug. 2nd deadline for raising the debt ceiling -- in order to make further economy-destroying cuts. And resisting efforts by Democrats to attach economy-boosting spending and/or revenue increases. And today there comes word that Democrats are considering whether they can raise the debt limit without Congress. Why? Because the Constitution prohibits default -- which means Congress shouldn't have the power to cap debt. And yes, I get that this solution -- if it is one -- has the appeal of preventing the Republicans from extorting further measures that damage the economy. But it would put Democrats on the hook all alone for raising the debt ceiling -- and you can bet the GOP will accuse them of doing so illegally, if not unconstitutionally. Republican leaders have already acknowledged that the debt ceiling has to be raised. All that Democrats have to do is say they won't raise it with any new spending cuts attached. Period. Which do Republican leaders fear more -- the fickle, manipulable pique of the Tea Party or the unholy wrath of Wall Street? It seems to me that's a question worth answering
It's China's turn to wrestle with a pile of bad debt
Massive infrastructure spending has created a mountain of bad loans
By John W. Schoen Senior producer
msnbc.com
The U.S. banking system was the first to get hit by the financial Panic of 2008. For the past year, European bankers have been scrambling to head off exploding debt bombs in Greece and other countries with high debt loads.
Now, it looks like it's China’s turn to face up to a giant pile of bad debt. This being China, though, the story isn’t playing out like an ordinary Western financial crisis. - More must-read stories
Many of those yuan didn't get where they were supposed to go. It's still not clear exactly where they all went. But this week the Chinese government announced the results of a nationwide audit of 31 provinces and hundreds of municipalities which found that those local governments are now carrying some $1.6 trillion worth of loans. And a large portion — as much as 20 percent — may have to be written off as bad debt.
Following the blueprint of economic transformation laid out in the early 1980s by Communist Party leader Deng Xiaoping, China has embarked in recent years on a massive spending spree. Beijing hopes the spending will expand the economic success of coastal cities to inland regions by stitching them together with vast networks of roads, railways and high-speed Internet. But many of those projects have become mired in debt, with modern high-speed rail lines carrying handfuls of passengers and four-lane rural highways all but empty of vehicles.
Special report: China 2.0
“Last year, 55 percent of GDP was contributed by infrastructure investment — in other words bank lending,” said Carl Waters, an American investment banker until recently based in China and co-author of "Red Capitalism." "If you keeping making bad loans that don't pay back, you’re going to run out of money sooner or later."
For now, Beijing has said it will simply shift some $463 billion of those bad debts off the books of local governments and allow them to sell bonds to raise fresh cash. China’s state-owned banks, which also need fresh cash, will likely recapitalize their books with the profits guaranteed by state-mandated interest rates that pay savers less than banks charge borrowers.
Chinese bankers are also allowed to roll over their bad debts indefinitely, writing them off a little bit at a time while they raise fresh cash by selling stock to investors. That’s how China dealt with its last debt crisis in the late 1990s.
“At face value it was successful,” said Mark Williams, senior China economist at Capital Economics. “The banks cleaned themselves up and official government debt stayed down. But it only worked because the government rigged the financial system to guarantee big bank profits.”
The problem, said Williams, is that under such a system, bankers make money even when they make bad loans. Now, with debt piling up on the books of local governments, the government and its state-owned banks have increasingly more bad debt to warehouse. Eventually, that bad debt will make it harder for China to lend more money to invest in new infrastructure projects.
“China is already rapidly becoming significantly leveraged,” said Waters. “If you look at what happened in Greece or Ireland or Portugal when a country is leveraged, it has to borrow more and more to meet its interest obligations. That makes it less and less possible to invest in projects that will grow your GDP.”
Story: Economic crisis in Greece could reach United States, IMF warns But, as politicians from Washington to Athens have discovered, cutting back on spending can be a tough sell with the voters. In China’s case, any slowdown in growth could further inflame an already restive population. Chinese leaders have recently sought to bolster popular support with higher wages. But those higher salaries have raised the cost of doing business in a country that catapulted itself to the world's second-largest economy based on its seemingly endless supply of cheap labor.
Demands for higher wages in factory towns have sent multinational manufacturers looking elsewhere for cheaper labor. Southern China, where the low-cost manufacturing revolution began two decades ago, is now suffering what the Chinese people call a “hollowing out,” according to John Rutledge, an investment manager and advisor to the Chinese government.
Story: Surging China costs forces some U.S. manufacturing companies back home “The assembly jobs in Guangdong that are now going to places like Vietnam are leaving empty buildings behind,” he said. “Those buildings were filled with the migrant workers from Sichuan and Hunan who were making money to send home to their families in the poor villages in western China. So there's a serious employment issue there.”
Infrastructure development was supposed to spread the wealth created in factory cities to rural inland areas to raise the living standards of those poor villages. Now, rising levels of bad debt will make it much harder for Beijing to continue to invest in those efforts to realize Deng's vision of spreading the wealth to all of China.
Beijing's massive spending spree poses another threat to China’s long term economic stability. Pumping more money into infrastructure projects may help prop up growth. But that cash infusion raises the risk of a sustained bout of higher inflation.
“The Chinese government is facing the difficult balancing act of maintaining high levels of economic growth while containing inflation,” said Jing Ulrich, JPMorgan’s head of global markets in China. “They need to keep job creation levels high and they need to maintain a decent level of income growth. They also need to dampen the inflation of wage increases and the impact on China's global competitiveness. It is a difficult juggling act.”
Rising levels of social unrest this spring and summer have made that juggling act even more difficult. So far, those riots and demonstrations have been relatively isolated. That situation could change if inflation continues to erode the economic gains brought by rising wages.
“There a lot of dry tinder on the ground,” said James Rickards, head of market intelligence at the research firm Omnis. “What's the match? The match is inflation. The inflation rate is 5.5 percent. But food inflation is 10 percent.”
Video: China debuts Beijing-Shanghai high-speed rail
Visit msnbc.com for breaking news, world news, and news about the economy
China launched a major new link on its high-speed rail system on Thursday, which traverses the 800-mile route from Beijing to Shanghai in less than five hours. NBC's Adrienne Mong reports.
Video: China builds world's longest cross-sea bridge
The Jiaozhou Bay bridge spans over 26 miles to link China's eastern port city of Qingdao to Huangdao making it the world's longest cross-sea bridge. TODAY.com's Dara Brown reports.
Senate to work next week on debt limit impasse
Change of schedule announced after president prodded lawmakers to 'get it done'
WASHINGTON — The Senate abandoned plans for a July 4 break as time dwindled for lawmakers to strike a compromise on avoiding a government default and reducing mammoth federal deficits. In a challenge to President Barack Obama, the chamber's top Republican invited him to the Capitol to discuss the impasse with GOP lawmakers.
Senate Majority Leader Harry Reid, D-Nev., announced the scheduling change Thursday, a day after President Barack Obama prodded lawmakers to act swiftly to extend the government's ability to borrow money. The Senate had been scheduled to take a week's break but instead will meet beginning Tuesday.No July 4th recess for the Senate
"We'll do that because we have work to do," Reid said.
The House had already been scheduled to work next week.
Minutes later, Senate Minority Leader Mitch McConnell, R-Ky., took to the Senate floor to invite Obama to meet with Senate Republicans "anytime this afternoon" at the Capitol. He belittled Obama's demands to include increased tax revenues as part of a deficit-cutting package, repeating what GOP leaders have long said: Congress lacks the votes to approve a measure containing tax hikes.
By meeting directly with Republicans, "that way he can hear directly from Senate Republicans why what he's proposing will not pass," he said, adding, "And we can finally start talking about what's actually possible."
The White House said Obama had no plans to accept McConnell's invitation
"What the senator invited the president to do was to hear Senate Republicans restate their maximalist position. We know what that position is," Obama spokesman Jay Carney said. "He also invited the president to hear what would not pass. That's not a conversation worth having."
At a Wednesday news conference, Obama insisted there is no more time to add. And he beseeched and badgered lawmakers to complete a deal to cut long-term deficits and lift the nation's debt ceiling before Aug. 2 to avoid what his administration says would be a calamitous government default.
- Other political news of note
- In deficit plan, Obama picks fight on taxesAPPresident Barack Obama is renewing an old fight with the business community by insisting that $400 billion in tax increases be part of a deficit-reduction package.
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But neither Obama nor the divided Congress is making it easier. The White House has identified at least $1.3 trillion in spending cuts over 10 years and is proposing up to $400 billion in new tax revenue. Republicans want more spending cuts and no tax increases.
Such brinkmanship relies on the clock; it is both a friend and an adversary. The problem with Aug. 2 is not that it's too soon, but that it's still four week away.
At a news conference, the president sought to upend the Republican argument that deficit-cutting negotiations had come to a standstill over the White House desire to increase taxes.
"The tax cuts I'm proposing we get rid of are tax breaks for millionaires and billionaires, tax breaks for oil companies and hedge fund managers, and corporate jet owners," Obama countered.
Ever since bipartisan debt negotiations led by Vice President Joe Biden broke down last week, the White House has gradually become more aggressive, culminating with Obama's spirited news conference.
He called on lawmakers to work through their July Fourth recess. He argued that his 12- and 10-year-old daughters show more discipline getting their work done. "They're not pulling all-nighters," he said.
"Call me naive," he said at another point, "but my expectation is that leaders are going to lead."
Obama is tilting at an institutional dysfunction — one that he himself once seemed to recognize: "If you don't set deadlines in this town, things don't happen. The default position is inertia," he said in 2009 during the health care debate. As it turned out, his deadline came and went, and it wasn't until 2010 that the health care overhaul legislation passed.
Some deadlines are too stark to avoid, but they get pushed to the brink. The government shutdown talks earlier this year came down to the final two hours. When asked what ultimately led to a deal to avoid halting government operations, one top Obama adviser said, "the clock."
Senior presidential adviser David Plouffe was asked in a nationally broadcast interview Thursday if the deadline was real.
"There's very little debate that that's going to change," he told NBC's "Today" show. Plouffe added, "We're in a danger zone now."
Plouffe, who was Obama's campaign manager when he ran for president in 2008, said he believes Democrats and Republicans alike are going to have to "get out of their comfort zone" to reach an agreement that would increase the government's borrowing authority and avert a default on the federal debt.
The Obama administration is warning that if the debt ceiling is not raised by Aug. 2, the U.S. would face its first default in history, potentially throwing world financial markets into turmoil. Many congressional Republicans aren't convinced, and some administration officials worry that it could take a financial plunge before Congress acts.
The pending debt ceiling vote would have to raise the current borrowing limit of $14.3 trillion by about $2.4 trillion to last until the end of 2012.
At his news conference, Obama took issue with criticism that he has not pushed for an agreement. He argued that he has spent an hour to an hour-and-a-half each with Republican senators, Democratic senators and House members from both parties.
"I've met with the leaders multiple times," he continued. "At a certain point, they need to do their job."
House Speaker John Boehner, R-Ohio, replied that an increase in the debt ceiling will pass only if the White House agrees to spending cuts in excess of the debt limit increase, holds down future spending and raises no taxes.
"The longer the president denies these realities," Boehner said, "the more difficult he makes this process."
Video: President's Press Conference
Senate to work next week on debt limit impasse
Change of schedule announced after president prodded lawmakers to 'get it done'
After being called out by President Obama for not striking a deal to avoid a government default and reduce federal deficits, the Senate has canceled its planned July Fourth recess. NBC’s Kelly O’Donnell reports.
The Morning Joe panel – including former DLC chairman Harold Ford Jr. and Time's Mark Halperin – discusses the president's Wednesday press conference on the debt. Obama stated that elimination of selected tax breaks for oil companies and the wealthy must be included in any deficit reduction plan.
The Morning Joe panel continues its discussion on the president's debt-related Wednesday press conference. The president considered keeping Congress in D.C. unless progress is made this week on the debt ceiling.
One day after the President Obama scolded Congress for the stalled debt ceiling talks, Republicans on Capitol Hill blasted back. NBC Chief White House Correspondent Chuck Todd reports.
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