The rumored grand bargain would cost the economy about half a million jobs in 2013
Are you ready for a grand bargain? A deficit hawk party! Yes? No? Maybe? (Is this John Boehner?).
With the deadline for the fiscal cliff -- which is really more of a slope -- looming, President Obama and House Republicans have reportedly come close on an agreement that would kick most of the fiscal can. Well, they did for a few hours at least. It didn't take long for Boehner to walk back his support for the plan, but that hardly means it's dead. If there is a grand-ish bargain to be had, it will probably look something like this latest iteration of a deal.
As Ezra Klein reported, the deal comes in three parts: revenue, cuts, and stimulus. Let's break it down, and then break down what it means for jobs in the coming year.
REVENUE. Let the Bush tax cuts expire for households with adjusted gross incomes of $400,000 or more, and limit the value of itemized deductions to 28 percent. In other words, set tax rates for the top 1 percent back to where they were under President Clinton, and stop richer households from taking bigger deductions than middle-class households. All told, it raises a little more than $1 trillion in revenue over the next decade relative to a world where all of the Bush tax cuts continue. As Paul Krugman points out, it's unclear whether this includes the higher taxes on capital gains and dividends scheduled to kick in on January 1, 2013 -- on top of the 3.8 percent Obamacare surtax on capital gains.
Taxes would also go up from switching to chained CPI. As my colleague Derek Thompson explained, chained CPI is an alternative (and perhaps more accurate) measure of inflation that assumes consumers substitute to similar, lower-priced goods when other prices rise. In other words, it says inflation is lower. Tax brackets are indexed to inflation, so a lower measure of inflation means they will rise less -- and more people will creep into these higher brackets. It adds up to about $60-90 billion over ten years.
CUTS. Say hello to chained CPI again. It's not just a tax hike. It's a Social Security cut too. Remember, Social Security benefits are indexed to inflation as well, so the logic of a lower measure of inflation kicks in here too -- benefits will rise slower than they otherwise would have, with the compounded effect hitting older retirees the worst. It's about a $100-200 billion cut over a ten-year window. Congress is supposed to negotiate on another $1 trillion or so of cuts, and if they cannot agree on them there will be -- wait for it! -- a new sequester in the future. Because the last one worked so well.
STIMULUS. Extend unemployment insurance and the refundable tax credits from the stimulus, but not the payroll tax cut. There's also some new, albeit unspecified, infrastructure spending thrown in.
There are a lot of moving parts here, but only three of these moving parts will matter in 2013: the end of the Bush tax cuts for the rich, the end of the payroll tax cut, and new infrastructure spending. In other words, it's unlikely any of the cuts will hit the economy next year. The can known as the sequester would get kicked for another year or so -- unless, haha, Congress can agree to other, immediate cuts -- and chained CPI will be the same as CPI-W in 2013. That leaves the three aforementioned changes -- changes that add up to about a half million less jobs in 2013 than if there was no fiscal cliff at all, as you can see in the chart below. The payroll tax cut is a political orphan in need of a champion.
The Cliff Notes version of why this deal would cost us 500,000 jobs next year is it sucks more money out of the economy than it puts back in. Let's look at it piece-by-piece.
Bush tax cuts for the rich expire. Less money for the rich means less money for the rich to spend. But the rich are different from you and me -- they tend to have money left over after they buy the things they want. In other words, they spend less of their incomes, so a tax hike on them doesn't hurt demand as much as a tax hike on the middle-class would (as we shall see). The Congressional Budget Office (CBO) figures higher taxes on higher earners would subtract about 200,000 jobs next year.
Payroll tax cut ends. Less money for everybody means less money for everybody to spend. That's what the payroll tax, which, remember, hits the middle-class harder than it does the rich, does. But it gets worse. A higher payroll tax means a higher cost of hiring and that means less hiring. A lot less hiring. Working backwards from thesetwo CBO reports shows it means about half a million less jobs in 2013. As the left-leaning Center on Budget and Policy Priorities (CBPP) points out, it's almost twice as stimulative as the Bush tax cuts for the rich, at similar costs. Spending the $115 billion to extend it another year would be money well spent.
Infrastructure. This is where things get admittedly speculative. We don't even know how much infrastructure spending both sides have talked about, let alone what kind of projects, but we can make some informed guesses. President Obama has asked for $50 billion of new infrastructure spending before, which he probably wouldn't get, but we'll use here as a best-case. If we take former Vice Presidential economic adviser and current CBPP fellow Jared Bernstein's rule of thumb that every $1 billion of construction or repair spending adds roughly 9,000-10,000 jobs, and then assume that this new spending would come in over two years, that gives us about 250,000 new jobs in 2013. Again, this is a pretty generous estimate.
As far as can-kicking goes, this ain't too shabby. The CBO figures that the fiscal cliff will cost us 3.4 million jobs next year if Congress does nothing; suddenly, half a million less sounds okay. But Washington can do better. It just needs to go over the fiscal cliff first.
Right now, Obama is offering lower revenues than he originally asked for and entitlement cuts for more stimulus -- and he's not even getting all of the stimulus! It's all because of the baseline illusion. As long as the Bush tax cuts are around, Boehner can claim he's the one offering concessions on revenues by saying he'll raise them at all. It's a silly argument, but it's a silly argument that goes away after January 1, when tax rates automatically go up. Then, Democrats can push a bill that cuts middle-class taxes and cuts deductions for the rich -- the $1.6 trillion from Obama's first offer -- and tell Republicans they have a choice. They can either get less revenue or less entitlement spending, but not both, and in return they have to sign off on all of the stimulus -- extended unemployment insurance, the payroll tax cut, and infrastructure spending. They could even set up a commission -- or a supercommittee, if they're feeling bold -- to cut spending in a year's time, with a new sequester to incentivize them to find cuts.
It's a deal that would bring our medium-term budget closer to balance, without costing the economy in the short-term. Now that would be grand.
In the name of emotional well-being, college students are increasingly demanding protection from words and ideas they don’t like. Here’s why that’s disastrous for education—and mental health.
Something strange is happening at America’s colleges and universities. A movement is arising, undirected and driven largely by students, to scrub campuses clean of words, ideas, and subjects that might cause discomfort or give offense. Last December, Jeannie Suk wrote in an online article for The New Yorker about law students asking her fellow professors at Harvard not to teach rape law—or, in one case, even use the word violate (as in “that violates the law”) lest it cause students distress. In February, Laura Kipnis, a professor at Northwestern University, wrote an essay in The Chronicle of Higher Education describing a new campus politics of sexual paranoia—and was then subjected to a long investigation after students who were offended by the article and by a tweet she’d sent filed Title IX complaints against her. In June, a professor protecting himself with a pseudonym wrote an essay for Vox describing how gingerly he now has to teach. “I’m a Liberal Professor, and My Liberal Students Terrify Me,” the headline said. A number of popular comedians, including Chris Rock, have stopped performing on college campuses (see Caitlin Flanagan’s article in this month’s issue). Jerry Seinfeld and Bill Maher have publicly condemned the oversensitivity of college students, saying too many of them can’t take a joke.
A new anatomical understanding of how movement controls the body’s stress response system
Elite tennis players have an uncanny ability to clear their heads after making errors. They constantly move on and start fresh for the next point. They can’t afford to dwell on mistakes.
Peter Strick is not a professional tennis player. He’s a distinguished professor and chair of the department of neurobiology at the University of Pittsburgh Brain Institute. He’s the sort of person to dwell on mistakes, however small.
“My kids would tell me, dad, you ought to take up pilates. Do some yoga,” he said. “But I’d say, as far as I’m concerned, there's no scientific evidence that this is going to help me.”
Still, the meticulous skeptic espoused more of a tennis approach to dealing with stressful situations: Just teach yourself to move on. Of course there is evidence that ties practicing yoga to good health, but not the sort that convinced Strick. Studies show correlations between the two, but he needed a physiological mechanism to explain the relationship. Vague conjecture that yoga “decreases stress” wasn’t sufficient. How? Simply by distracting the mind?
The political commentator may be more committed to the Republican nominee’s platform than he is.
Donald Trump has just betrayed Ann Coulter. Which is a dangerous thing to do.
This week, Coulter released her new book, In Trump We Trust. As the title suggests, it’s a defense of Trump. But more than that, it’s a defense of Trumpism. Most Trump surrogates contort themselves to defend whatever The Donald says, no matter its ideological content. They’re like communist party functionaries. They get word from the ideologists on high, and regurgitate it as best they can.
Coulter is different. She’s an ideologist herself. She realized the potency of the immigration issue among conservatives before Trump did. On June 1 of last year, she released Adios America, which devotes six chapters to the subject of immigrants and rape. Two weeks later, Trump—having received an advanced copy—famously picked up the thread in his announcement speech.
How men and women digest differently, diet changes our skin, and gluten remains mysterious: A forward-thinking gastroenterologist on eating one's way to "gutbliss"
Robynne Chutkan, MD, is an integrative gastroenterologist and founder of the Digestive Center for Women, just outside of Washington, D.C. She trained at Columbia University and is on faculty at Georgetown, but her approach to practicing medicine and understanding disease is more holistic than many specialists with academic backgrounds. She has also appeared on The Dr. Oz Show (of which I’ve been openly skeptical in the past, because of Oz’s tendency to divorce his recommendations from evidence).
Officials say they face a public-health emergency, and believe a batch of the opioid may be tainted with an elephant tranquilizer.
NEWS BRIEF Cincinnati is facing a public-health emergency, as an estimated 174 people overdosed on heroin in the last six days.
Police in the Ohio city are trying to find the source of the heroin batch. Tim Ingram, the Hamilton County health commissioner, told reporters Friday the number of hospital visits this week have been “unprecedented.”
Officials are pointing to a potential cause of the overdoses, as the Associated Press reports:
Cincinnati City Manager Harry Black said authorities suspect carfentanil, a drug used to sedate elephants and other large animals, may be mixed in with heroin and causing the overdoses. The drug is 100 times more potent than fentanyl, which is suspected in spates of overdoses in several states.
Last month, carfentanil was discovered in the Cincinnati area's heroin stream, but many hospitals don't have the equipment to test blood for the previously uncommon animal opioid.
An increasing number of respondents are checking “Some Other Race” on U.S. Census forms, forcing officials to rethink current racial categories.
Something unusual has been taking place with the United States Census: A minor category that has existed for more than 100 years is elbowing its way forward. “Some Other Race,” a category that first entered the form as simply “Other” in 1910, was the third-largest category after “White” and “Black” in 2010, alarming officials, who are concerned that if nothing is done ahead of the 2020 census, this non-categorizable category of people could become the second-largest racial group in the United States.
Among those officials is Roberto Ramirez, the assistant division chief of the Census Bureau’s special population statistics branch. Ramirez is familiar with the complexities of filling out the census form: He checks “White” and “Some Other Race” to reflect his Hispanic ethnicity. Ramirez joins a growing share of respondents who are selecting “Some Other Race.” “People are increasingly not answering the race question. They are not identifying with the current categories, so we are trying to come up with a (better) question,” Ramirez told me. Ramirez and his colleague, Nicholas Jones, the director of race and ethnic research and outreach at the Census Bureau, have been working on fine-tuning the form to extract detailed race and ethnic reporting, and subsequently drive down the number of people selecting “Some Other Race.”
The professor who teaches Classical Chinese Ethical and Political Theory claims, "This course will change your life."
Picture a world where human relationships are challenging, narcissism and self-centeredness are on the rise, and there is disagreement on the best way for people to live harmoniously together.
It sounds like 21st-century America. But the society that Michael Puett, a tall, 48-year-old bespectacled professor of Chinese history at Harvard University, is describing to more than 700 rapt undergraduates is China, 2,500 years ago.
Puett's course Classical Chinese Ethical and Political Theory has become the third most popular course at the university. The only classes with higher enrollment are Intro to Economics and Intro to Computer Science. The second time Puett offered it, in 2007, so many students crowded into the assigned room that they were sitting on the stairs and stage and spilling out into the hallway. Harvard moved the class to Sanders Theater, the biggest venue on campus.
The health benefits are clear. The political benefits are newly relevant.
Next time you enter an elevator, walk in and keep facing the back wall. If you stay that way, in my experience, people will laugh or ask if you’re okay. (That’s an opportunity, if you want, to say you would love for someone to define “okay.”)
Standing this way breaks unstated rules of how we’re supposed to behave in elevators. Detaching from expectations gives people an excuse to talk, to acknowledge one another’s humanity. Absent a break in the order, the expectation is silence.
(Of course, you can make a quick joke—my favorite is, if the elevator is stopping frequently, “What is this, the local train?”—and expect a modicum of laughter. But even if the joke goes over well, the rule seems to be that you can’t say it more than once in the same ride.)
The global education pioneer eases students into the classroom.
Heading into my first year of teaching in Helsinki I felt pretty nervous. One of my graduate-school professors—a former Massachusetts Teacher of the Year—had warned me that Finnish students were academically advanced, especially in math. Indeed, Finland’s students had excelled on international standardized tests like the PISA for more than a decade. But it wasn’t just those high-performing Finnish students that intimidated me. Their teachers did, too.
If I had chosen to pursue master’s-level training as an elementary-school teacher in Finland (instead of the United States), I would have applied to the small handful of teacher-training universities, where annual acceptance rates hover around 10 percent. These programs are so selective, claimed The Atlantic journalist Amanda Ripley in her book, The Smartest Kids in the World, they’re “on the order of MIT.” Furthermore, Finland’s classroom teacher-training programs require five years of coursework, practicum, and thesis writing. The Finnish version made my two-year master’s degree in elementary education, through a non-selective college in the Boston area, look quite humble.
City dwellers spend nearly every moment of every day awash in Wi-Fi signals. Homes, streets, businesses, and office buildings are constantly blasting wireless signals every which way for the benefit of nearby phones, tablets, laptops, wearables, and other connected paraphernalia.
When those devices connect to a router, they send requests for information—a weather forecast, the latest sports scores, a news article—and, in turn, receive that data, all over the air. As it communicates with the devices, the router is also gathering information about how its signals are traveling through the air, and whether they’re being disrupted by obstacles or interference. With that data, the router can make small adjustments to communicate more reliably with the devices it’s connected to.