If you ever need to get your policy geek on but are having trouble finding the data to, say, smacked down some lying little pundit-weasel, a new project by Investigative Reporters and Editors and the Sunlight Foundation is just the ticket: Econocheck. It’s designed
to point reporters and the public to data sets that can help answer those questions and more. Econocheck provides quick links to statistics on employment, taxes, government spending, inflation, healthcare, housing, income and wealth, plus helpful advice on using and interpreting them.
Econocheck is not a fact checking site, but rather a resource for those who want to find out more about the statistics politicians rely on when seeking votes. But it has uses beyond that.… it can be used to provide statistical support for stories documenting the economic hardships Americans face.
It’s very nicely done, and I’m sure a lot of Econ policy geeks & reporters will get a lot of use out of it.
Do small businesses create most new jobs in the US? Jared Bernstein does a nice job of taking apart that myth. A long way, he tells us something I’ve never heard before: part of the answer depends on what you mean by “business.”
It turns out that there are 2 major ways to cut employment in businesses. When the Bureau of Labor Statistics is doing the counting, they count firms as businesses. But when ADP – the folks who handle payroll for a big chunk of the country – is doing the counting, they count establishments as businesses. What’s the difference?
establishments can be units of large firms, but a firm under 50 is truly a stand-alone small business. A Gap outlet with 40 employees is counted in the 1-49 size class in the ADP data — it’s a small establishment. But since Gap is a very large firm, in the BLS data, that 40-person outlet is assigned to the 500+ group.
So if someone tells you that small businesses create most of the jobs in the US, odds are that they are counting every Gap outlet as a “small business.”
How much is the insane obsession with deficits costing us? Krugman explains, using the latest projection from the Congressional Budget Office, which optimistically assumes that the economy will bounce back by 2015:
the projection says that we’ll have a cumulative output gap of $5.1 trillion, with $2.8 trillion of that having already happened.
Surely it would have been worth making an extraordinary effort to avoid this outcome. In particular, an $800 billion stimulus, a significant fraction of which was stuff that would have happened anyway (like extending the patch on the alternative minimum tax) looks ludicrously underpowered. Yet policy has been timid and conventional….
The CBO also projects unemployment staying above 8 percent until late 2014 — again, with no clear explanation of why it should fall sharply in 2015. This translates into a human catastrophe for the long-term unemployed.
Our side has got to get our ass in gear.
How’s the class war going for the right? Laura Clawson sums it up in four facts:
On Monday, Sen. Al Franken, Rep. Sander Levin, AFL-CIO President Richard Trumka, former New York Times columnist Bob Herbert and Center for American Progress economist Heather Boushey joined unemployed workers to discuss the jobs crisis.
What could they possibly have to discuss in a country where JP f’ing Morgan says wage reductions have driven corporate profit increases, the 400 richest Americans are paying just over half the taxes they were 12 years ago, two-parent families are working 26 percent more hours than in 1975 and only earning 23 percent more, and fading jobless benefits are about to deal another blow to struggling families and the American economy?
As Monday’s post noted, one critical piece of turning state pension funds into guardians of the middle class is to make sure that they are as accountable as possible, and that requires transparency. But even if they make tons of data publicly available, how do they make it easy to make sense of it?
The good news: there are a lot more tools out there for easily sliced and diced and public data. Back in November, when Google’s Public Data Explorer went public, Alex Howard at O’Reilly Radar summed up the state of the art:
Google Public Data Explorer isn’t the first big data visualization app to go online, as Mike Melanson pointed out over at ReadWriteWeb. Sites like Factual, CKAN, InfoChimps and Amazon’s Public Data Sets are also making it easier for people to work with big data
Of note to government agencies: Google is looking for partnerships with “official providers” of public data, which can request to have their datasets appear in the Public Data Explorer directory.
In a post on Google’s official blog, Omar Benjelloun, technical lead of Google’s public data team, wrote more about Public Data Explorer and the different ways that the search giant has been working with public data:
“Together with our data provider partners, we’ve curated 27 datasets including more than 300 data metrics. You can now use the Public Data Explorer to visualize everything from labor productivity (OECD) to Internet speed (Ookla) to gender balance in parliaments (UNECE) to government debt levels (IMF) to population density by municipality (Statistics Catalonia), with more data being added every week.”
Mind you, fancy tools only get you so far. You still need folks who understand the data and now how to turn it into a story that the rest of us will understand. But at least those intrepid souls now have tools at their disposal that make their job a little easier.
I finally got a chance today to take a look at the progressive plan for balancing the budget that EPI, Demos, and The Century Foundation put out on Monday. There are a lot of smart ideas in the proposal, and it shows that we can deal with long-term budget issues without beating the crap out of the middle class and the poor.
I’ve only got one issue with it: too many words.
Take the Executive Summary. It’s nine freakin’ pages long. Nine. That, my friends, is not an executive summary. By the time an executive is a third of the way down the first page of a summary, their mind is already beginning to float: can I get away with bonking my executive assistant? What do I want to have for lunch today? If you haven’t grabbed them by then and they’ve got more than the rest of the page to go, forget it. Even a policy geek like myself is probably going to stop reading after page two and jump to the actual report.
If their “executive summary” doesn’t give us a bottom line, how about the press release? It’s only a page and a half long, but here’s the first paragraph:
Our Fiscal Security, a collaborative effort of The Century Foundation, Demos and the Economic Policy Institute (EPI), today released Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility. This Blueprint is a comprehensive, detailed roadmap to immediate investments in job creation while addressing the nation’s long-run fiscal challenges. The Blueprint takes a very different approach from other prominent proposals, specifically prioritizing a strong economic recovery because widespread job creation and robust economic growth are essential to successful deficit reduction.
Let’s take the last sentence: “because widespread job creation and robust economic growth are essential to successful deficit reduction.” Really? I’m not saying it had to be as punchy as Demos’ “the middle-class is no accident.” But a sound bite to smack the Republicans upside the head this is not.
Why am I kvetching about the writing of this otherwise fine report (aside from the fact that I’m irritable this morning because I didn’t get enough sleep last night)? Because it’s a problem that an awful lot of progressive policy folks still have. If the media is convinced that you aren’t a Serious Person unless you want to inflict pain on the middle-class and poor folk, it’s going to be hard to punch through. When the odds are against you, you can’t just focus on having good ideas. You’ve also got to write short & sweet — and ideally with a little style.
Another smart, quick Dean Baker smackdown:
The NYT Doesn’t Know That We Have 15 Million People Unemployed
That is the only thing that readers can conclude from its heroic efforts to balance the budget in 2030. This exercise is utterly mind-boggling. We have more than 25 million people unemployed, underemployed, or who have given up work altogether.…
It is utterly loony to be focused on the projected deficit in 2030, when we have tens of millions of people who are seeing their lives ruined today by the downturn. This is like debating the colors to paint the classrooms when the school is on fire with the students still inside.
Via Bob Herbert, a Rockefeller Foundation study using a new index for measuring economic insecurity — the percent of Americans who had a net loss of 25% or more of their financial income — shows that for many Americans, life got less secure, not more over the last few decades:
In 1985, at a time when the unemployment rate was 7.2 percent, the portion of American families that would be counted as economically insecure by the terms of this new index was 12 percent. Professor Hacker explained that the percentage would naturally tend to rise or fall with improvements or a deterioration in the economy.
But what has happened over the past few decades is that the percentage of insecure Americans relative to any given level of the economy has tended to steadily rise. So in 2002, coming out of a mild recession, there was a 5.8 percent unemployment rate, but the percentage of economically insecure families had jumped to 17 percent.
All of the data for 2009 are not yet in, but the research team projects, conservatively, that more than 20 percent of Americans experienced a 25 percent or greater loss of household income (without a financial cushion) over the prior year — the highest in at least a quarter of a century.
A decrease of this magnitude in available income is a heavy blow. As the study points out, “The typical individual who experiences a decline of at least 25 percent in household income requires between six and eight years for income to return to its previous level.”
“What we’re seeing, basically, is what we’re calling ‘the new normal,’ ” said Mr. Hacker. “We’re slowly ratcheting up this level of economic insecurity.”
If you’ve been wondering what I mean when I say that we’re using the values of big corporations and the rich to shape the economy, this is Exhibit A.
A nice, short explanation by Krugman of why the latest freak out over Social Security’s future makes no sense:
Social Security is a government program funded by a dedicated tax. There are two ways to look at this. First, you can simply view the program as part of the general federal budget, with the the dedicated tax bit just a formality. And there’s a lot to be said for that point of view; if you take it, benefits are a federal cost, payroll taxes a source of revenue, and they don’t really have anything to do with each other.
Alternatively, you can look at Social Security on its own. And as a practical matter, this has considerable significance too; as long as Social Security still has funds in its trust fund, it doesn’t need new legislation to keep paying promised benefits.
OK, so two views, both of some use. But here’s what you can’t do: you can’t have it both ways. You can’t say that for the last 25 years, when Social Security ran surpluses, well, that didn’t mean anything, because it’s just part of the federal government — but when payroll taxes fall short of benefits, even though there’s lots of money in the trust fund, Social Security is broke.
This week’s New York Times Magazine also had fascinating article about efforts to come up with an alternative to the GDP — i.e., how to put a number on how our country is doing. For years, economists and activists have criticized the GDP as a bad way to measure how we’re doing. For example, Katrina was a terrible tragedy, but it showed up as an increase in the GDP because of all the building, emergency supplies, etc. that it generated. If the GDP is a wrong way to go, why is it worth spending the time to come up with an alternative? Economist Joseph Stiglitz explains,
“Too often, particularly I think in an American context, everybody says, ‘We want policies that reflect our values,’ but nobody says what those values are,” Stiglitz told me. The opportunity to choose a new set of indicators, he added, is tantamount to saying that we should not only have a conversation about recasting G.D.P. We should also, in the aftermath of an extraordinary economic collapse, talk about what the goals of a society really are.
Do we want government to help us increase our sense of satisfaction? Or do we want it to help us get through our days without feeling misery? The two questions lead toward two very different policy options. Is national progress a matter of making an increasing number of people very rich? Or is it about getting as many people as possible into the middle class?
A better way of measuring how we’re doing might also change how we think about the past.
In [Stiglitz's] view, Americans would have had a much clearer picture of our progress over the past decade if we had focused on median income rather than G.D.P. per capita, which is distorted by top earners and corporate profits. “When you have increasing inequality, median and average behave differently,” Stiglitz said. Real median household income has actually dipped since 2000. But G.D.P. per capita, he noted, has gone up. A president could go on the podium, Stiglitz said, and point to G.D.P. as proof that Americans are doing very well. But if you looked instead at median income, he said, “you could say, a) it’s not sustainable; and b) most people are actually worse off.” We need to focus on those median figures, he insisted.
The same is true for comparing us with the rest of the world.
It has long been the case, for example, that the G.D.P. of the United States outpaces that of European countries with higher taxes and greater government spending; it has thus seemed reasonable to view our economic growth as a vindication of a national emphasis on free markets and entrepreneurship. But things look different if you see the measure itself as flawed or inadequate. We take shorter vacations than Europeans, for instance, which is one reason their G.D.P. is lower than ours — but that could change if our indicators start putting a value on leisure time. Some of the disparity, meanwhile, between the U.S. and various European countries, Stiglitz argued, is a statistical bias resulting from the way G.D.P. formulas account for public-sector benefits. In other words, the services received from the government in a country like Sweden — in public education, health care and child care, among other things — are likely undervalued. Rejiggering the measures of prosperity would almost certainly challenge our self-perceptions, Stiglitz said, perhaps so much so that in the U.S. we might begin to ask, Is our system working as well for most people as we think it has been?
Where many folks who’ve been wrestling with an alternative to the GDP end up is arguing that a single stat just won’t do.
Suppose you’re driving, Stiglitz told me. You would like to know how the vehicle is functioning, but when you check the dashboard there is only one gauge. (It’s a peculiar car.) That single dial conveys one piece of important information: how fast you’re moving. It’s not a bad comparison to the current G.D.P., but it doesn’t tell you many other things: How much fuel do you have left? How far can you go? How many miles have you gone already? So what you want is a car, or a country, with a big dashboard — but not so big that you can’t take in all of its information.
Incorporating a broader range of indicators also gives you at least a little help with tackling difficult if not impossible issues such as trying to measure/incorporate happiness.
while our current economic measures can’t capture the larger effects of unemployment or chronic depression, providing policy makers with that information may influence their actions. “You might say, If we have unemployment, don’t worry, we’ll just compensate the person,” Stiglitz told me. “But that doesn’t fully compensate them.” Stiglitz pointed to the work of the Harvard professor Robert Putnam, who served on the Stiglitz-Sen-Fitoussi commission, which suggests that losing a job can have repercussions that affect a person’s social connections (one main driver of human happiness, regardless of country) for many years afterward.
As a result, some of the more promising efforts such as the State of the USA have ended up creating a very large list of indicators — up to 300 — that people can mix-and-match to suit a particular purpose.
The size of the indicators panel is not a stumbling block; if anything, he argued, it’s an asset for an information-based society. The G.D.P. and other indexes, Hoenig said, are “an artifact of a world before the Web.” For his part, Stiglitz sees the State of the USA as a complement to any future dashboard system. A small dashboard of indicators could be useful for some purposes, a large panel for others. “When you go to a good doctor today, they don’t just look at one or two vital signs,” he said. “They look at a hundred statistics.” State of the USA, he told me, could be a “rich diagnostic tool” for evaluating the health of the country.