Derek Thompson

One hundred years ago, the typical American family spent half its income on food and clothes. Today, thanks to massive gains in productivity in agriculture and manufacturing, we spend hardly a fifth of our budget clothing and feeding ourselves. But there is one group of Americans that still insists on spending about half its hard-earned cash on eating and buying nice clothes. It's teenagers.

Here's the graph breaking down the typical teen's spending, from a report by Piper Jaffray:

Compare that to the typical budget of a middle-class family (which kindly provides teenagers with much of their cash):

The president's budget doesn't cut entitlements enough. That's been the unison response from Republicans since Obama released his plan yesterday. A brief sampling:

• Here's Sen. Mitch McConnell: "If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes."
  
• Here's Sen. Mike Johanns. "I don't believe the budget proposal went far enough."
  
• Here's Sen. Saxby Chambliss: "It is nowhere near what we need to do." 
• And here's Paul Ryan to ABC News: "I don't know if I would say that he cracked the door on entitlement reform. He has proposed to change a statistic, which saves money. That is really not entitlement reform."

From these quotes, it's easy to get the impression that the president hasn't met Republicans half-way with his cuts to Medicare and Social Security, the two biggest entitlement programs. In fact, he's exceeded them. The president's budget would spend less on both Medicare and Social Security than Ryan's GOP plan over the next ten years.

On Social Security: Ryan didn't cut Social Security by a penny. The president has proposed cutting the program's spending by $130 billion, by adopting a slower-growing measure of inflation.

On Medicare: Ryan's budget kept Obamacare's Medicare cuts and added another $127 billion. His budget projects $6.74 trillion in Medicare spending between 2014 and 2023. Obama cuts even deeper with $380 billion in cuts below his baseline, and his budget projects $6.67 trillion in Medicare spending over the same period. Upshot: Obama's ten-year Medicare budget is $70 billion below the GOP, and his announced cuts are about $250 billion deeper than the GOP. (See below for brief explainer on differences.*)

In fact, as Michael Linden at the Center for American Progress (who helped me with many of these numbers), pointed out, Obama's new proposal would mean about $1 trillion in lower Medicare spending in this decade compared to projections from before he took office. That includes the effects of slowing health-care inflation after the Great Recession. That's a 13 percent reduction!

Two questions I can anticipate.

(1) If the GOP isn't cutting Social Security and Medicare (and they're certainly not cutting defense), what are they cutting? Everything else, really. Obamacare gets demolished, and Medicaid (which, to be fair, is considered an entitlement), income-support for the poor, and non-defense discretionary all get the guillotine.

(2) Have I forgotten about Ryan's Medicare reforms after 2023? Nope. But I don't understand why, in 2013, it's considered reasonable, brave, or admirable to propose a dramatic and radical Medicare change that won't take effect for another ten years. That's seven years after Obama has left office. It's not for another two presidential election cycles plus another midterm. I'd rather talk about what these budget plans for this year, and this decade.

And here's the bottom line: Obama preserves federal Medicaid spending, he doesn't unwind Obamacare, and he spends much more on mandatory and non-defense discretionary programs than Ryan proposed. But his cuts to Social Security and Medicare combined are somewhere between $200 billion and $380 billion deeper than the GOP budget. On these programs there is no room to "compromise." The president is already to the right of the right.

_____

* It's hard to compare these numbers perfectly because they're operating off different baselines. The GOP budget uses the CBO baseline. The White House budget uses the OMB baseline. The baselines are close, but there are subtle differences, because not every budget analyst in Washington agrees on the exact same inflation and wage growth projection (which affects Social Security) or health-care cost growth projection, which affects Medicare.

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If the Paul Ryan budget, in nine words, was:

"Save the rich; Forget the poor; Spare the old"

President Obama's budget, in nine words, is:

"Tax the rich; Spare the poor; Remember the young"

The contours of the president's plan will be familiar to budget nerds, because he's been cooking up different styles of the same dish for months now. And there are two sticking points, which will also be familiar to budget nerds, because they're the same old sticking points: Taxes and entitlements. Obama's plan raises taxes on the richest households by $600 billion -- not by raising rates, but instead reducing the deductions these families can take. Second, his plan adopts a new measure for inflation, which would slowly cut Social Security benefits, and it proposes additional cuts to Medicare.

Most Republicans hate the first part. Most Democrats hate the second part. Will this new budget compel both sides to reconsider? Honestly, who knows. 

The Debate About Right-Now: Obama v. Ryan
Rather than predict the future, let's focus on the present cavernous gap between the Obama and Ryan plans. Over the next ten years, Obama is proposing about $46.5 trillion in spending. Ryan is proposing about $41.5 trillion in spending in that span. That $5 trillion gap, as Ezra Klein points out, is the true Colosseum of these budget fights.

The spending gap comes down to the uninsured, the poor, and the young. The Ryan budget accepts the sequester, repeals Obamacare, cuts federal spending to Medicaid, and cuts deep into "other mandatory spending," a catch-all category comprised of mostly (a) cash assistance to veterans, the jobless, and the poor and (b) retirement programs for vets and federal employees.

But there's something else that's gone mostly unreported: It's Ryan's cuts to "non-defense discretionary" spending. That sounds like an awfully unpalatable term. In fact, it's exactly what you probably think of as "government." It's scientific research, housing, international relations, education, public safety, public health, environmental protection, job training. It's the spending that could be conceivably be called investments, because it's spending that could pay off -- in new drugs, smarter kids, better roads, and cleaner skies. Ryan cuts non-defense discretionary's share of the government to a third below its modern low. It's a unambiguous divestment in productive government spending.

Obama sets aside some cuts for for non-defense discretionary, as well. But he also leads with $50 billion for infrastructure projects right away and increases federal spending on pre-K education. "This budget begins the difficult process of reallocating funds from more affluent seniors to lower-income families and their children," said Isabel Sawhill from the Brookings Institution. By cutting Social Security and Medicare, even subtly, while increasing spending on education, even more subtly, Obama's proposal is a small but important shift in spending from the old to the young.

Like the budget or hate the budget, you must acknowledge it represents (another) non-radical attempt from the White House to reduce our deficits -- which are already falling rather swiftly. As the president noted today, we've already signed off on $2.5 trillion in deficit cuts: $1.4 trillion in cuts under the Budget Control Act + $600 billion in new taxes in the fiscal cliff deal + interest savings. (That doesn't include the $1 trillion sequester.) The president is proposing another $1.8 trillion in savings, one-third from higher taxes and the rest from spending cuts.

The Ryan budget was a magical document that reflected a house-of-mirrors version of uber-conservatism. In order to balance the budget -- a dubious goal, since we can (and have) run deficits practically every year since the early 1800s -- Ryan concentrated spending cuts on the uninsured, the unemployed, and the poor. It was like a double-sequester, aimed at the heart of the America's most vulnerable households, paired with a tax plan so outlandish and unspecific, it left $5.7 trillion in tax spending cuts to be made later.

Obama's budget, for all its messy compromises, is at least a document that reflects certain realities of the time, among them: (1) Global capitalism, left to its own devices, is unlikely to help low-income families keep up with rising costs that come from overall productivity growth; (2) our access to medical care is an international embarrassment, and deserves a solution; (3) the deficit is shrinking too fast, not too slow; (4) we really, really, really don't have to balance the budget, ever; (5) it's better to reduce the deficit with spending cuts and tax increases. These are real problems. The president offers acceptable and defensible solutions.

***

It's a truth universally acknowledged in Washington that we don't think enough about the future. Maybe we think too much about it. We debate ten-year budget plans while unemployment lingers. We plan for future balanced budgets when the deficit is already falling, and probably too quickly. We prepare for the problems we think we might have in the future (inflation) while ignoring many of the problems we know we have today (underemployment).

In a city wrapped up in debating the future, Obama's budget does something quietly radical. It lives in reality. And it speaks in the present tense.

The share of adult Americans who have a job (or are looking for a job) has fallen to its lowest point since 1979, hovering around 63 percent.

That means 37 percent of working-age Americans aren't working. What are they doing, instead? Bloomberg Businessweek gives us a snapshot of 2013 with this amazing infographic:

That's the snapshot. But what's the story of how it's changed over time? Why is the participation rate declining? Let's investigate.

First, the very, very big picture. The prime-age participation rate (in GREEN below) has increased since the 1950s, where this graph begins on the left. Overall, Americans are more likely to be working than they were in the early 1970s. That's because more women between the age of 25 and 54 are working (seen in PINK), even though fewer men of that age are working than at any time in the last 60 years (in BLUE).

The big shifts of the last 20 years have been among the youngest and oldest adults. The group with the largest decline in participation has been teenage men. The group with the largest gains in participation have been 60-something women. Here's a look at the big movers between 1990 and 2010.

Why are young people, and especially young men, dropping out of the labor force? As Conor Sen explained for The Atlantic, there are good reasons (e.g.: more of them are going to college) and there are bad reasons (e.g.: more of them are hanging out at home playing video games, waiting for the job market to thaw).

Older people are working more because they can (it's not a factory-and-farm economy any more) and because they must (families don't save much on their own, so many hope to work longer into what used to be retirement). But don't be confused by rates and levels: Older people might be more likely to work than they used to be, but they're still unlikely to be working.

That sounds like an obvious point. But it's a big deal. It explains why an aging country will inevitably work less. Below is a picture of participation rates by age. Imagine a large generation, like the Boomers, moving through this picture, like an elephant through a snake. Their participation will naturally fall off. Each year after their mid-50s, the cohort will be less likely to work.

Indeed, that's precisely what demographers have long predicted: The slow decline of the participation rate from this decade through the 2030s, as the Boomers moved into retirement. Those predictions are represented by the dotted lines below. The red line represents what's actually happened.

This very important picture tells us two things. First, the participation rate was expected to drop, with or without a recession. Second, the drop is happening much faster than we expected. The economy is behaving as though it's 2025 rather than 2013. What pushed the participation rate down prematurely?

The obvious answer is that the recession happened. The recession effect on participation rates is pretty clear when you zoom in on the data. The participation rate for both black men and white men over 20 years old has dropped 4 to 5 percent since the recession struck; for women, the drop has been about 2.5 percent.

But the recession's effect is more complicated than you might think. According to a new paper by Kerwin Kofi Charles, Erik Hurst, and  Matthew J. Notowidigdo, what we're really seeing is the decline of manufacturing, which is only being felt now because the band-aid provided by a temporary construction bubble was ripped clean off the labor market. Nearly 40 percent of the increase in non-working Americans between 2000 and 2011 "can be attributed to manufacturing decline," they wrote. The housing boom shifted some of these jobs to construction. But after the bust, the crutch was gone -- and so were the workers.

***

It's about time for an upshot. So, where did all the workers go? Four answers, in order of importance.

(1) They retired. The country is getting older, and older countries have a smaller share of workers. 

(2) They went to school. More young people are going to college, and young people in college are less likely to look for work.

(3) They just stayed home -- they stopped looking for work and decided instead to raise their kids; they sat on the couch waiting for the market to thaw; they filed for disability insurance. The recession discouraged them from seeking a job.

(4) And the factories closed. Behind all of these stories lurks the long decline of manufacturing, which has very little to do with the Great Recession, or college attendance, or demographics, but nonetheless explains a significant portion of falling participation rates among prime-age workers.

So there you have it, the answer to the 37 percent mystery in five words: Retirement, college, recession, and manufacturing.

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In the wrinkled edifices of the French Quarter and the worn-out storefront walls along Canal Street, a legacy of decay in New Orleans intrudes on the mossy city. It is a sense of things that have nearly fallen apart and stayed nearly-fallen-apart for decades.

For much of the last 20 years, the city was wilting in plain sight. In the 1990s, a period during which the U.S. added 21 million jobs, New Orleans didn't just lose jobs; it also lost people. With tourism filling the void left by manufacturing, wages fell way behind the national average. It was place to bring a bachelor party, but not a bachelor's degree, and certainly not a business.

And then, in 2005, Hurricane Katrina hit.

Days later, 80 percent of New Orleans was underwater. More than 1,200 people were dead. In a year, the city lost more than 90,000 jobs -- more than the number employed by the local education, transportation, and manufacturing sectors, combined -- and $3 billion in wages disappeared. A city already in decline had suffered perhaps the worst natural disaster in American history.

***

There are three ways things could have gone.

In the first story, New Orleans slides into its own wet grave, another urban tragedy of geography and economics. In the second story, New Orleans rebuilds itself as it was before -- a sleepy southern belle of a town serving up wet weekends of intemperance. In the third story, Hurricane Katrina somehow kickstarts an age of innovation and an economic renaissance in a city written off for dead.

The Big Easy has chosen the third path -- the hard path, and their struggle has revealed both the tantalizing allure, and the deep challenges, of reinventing a city.

'To Hell With It, We're Going Home'

Kenneth Purcell is evangelical about New Orleans. This makes him more or less like every other person you meet in New Orleans.

When Hurricane Katrina struck, the tech entrepreneur with shoulder-length hair watched from a high rise on Lafayette Square as the water overcame the streets. "Like every other good redneck, I said 'I'm not leaving,'" he told me.

Ten days later, he left.

Purcell moved his budding start-up to New York, where he stayed for the next two years building iSeatz,com, a service that lets shoppers book multiple travel arrangements on one website. But in the undertow of national fatalism about the city's future, Purcell found himself pulled back home. He wanted to prove a point, to make a stand.

"I got so pissed off at the headlines about the city, with company after company leaving, that I said, 'To hell with it, we're going home,'" he told me just blocks from Lafayette Square, at New Orleans Entrepreneur Week (I attended and spoke at the conference last month). "And it was the best decision I ever made."

iSeatz has grown its platform from $8 million in gross bookings in 2005 to $2 billion in 2013. It's clearly one of the city's biggest homegrown tech breakthroughs. Then again, it is also one of the city's only homegrown tech breakthroughs.

Purcell is a member of New Orleans' boomerang generation -- a group of proud, young- to middle-aged reformers who came back to New Orleans in the wake of Katrina to find the city flattened. The city didn't have the jobs they wanted. So they built their own. After 2005, the start-up rate in New Orleans doubled in just three years (this graph, and others, comes from data provided Greater New Orleans Community Data Center).

New Orleans needs more than start-up enthusiasm. It needs start-up success stories. Breakout success stories.

"How do we get from this nascent state of having a lot of bubbling petri dishes to seeing some things really culture out, and having a sustainable ecosystem to support them?" Purcell said. In other words, how does New Orleans, a great city to get away from business, become a great place to start one?

How to Build a City

Jean-Baptiste Le Moyne de Bienville was drawn to the crescent city in the crook of the Mississippi River in 1718. He mistakenly believed the land, most of which is under sea level, to be properly shielded from the stormy Gulf tides. "Paris on a swamp." It was a good elevator pitch.

Nature's feedback was harsh. Four years after La Nouvelle-Orleans was founded, an inauspicious hurricane destroyed every home, shop, and makeshift chapel. A reasonable person might have relocated. Instead, Bienville rebuilt. One hundred years later, New Orleans was the largest city in the south.

The history of New Orleans is that of a city always rebuilding itself. But unlike past efforts, the current makeover isn't funded by on an economy of sugar or oil, but rather an economy of people and ideas.

When you cast your eye across the country's leading high-tech cities -- the San Francisco area, Seattle, Boston, Washington, D.C., and New York -- a rough blueprint emerges. These are large, dense, mixing-pots of people and businesses.

All five regions have a long history of government investment, especially in science and technology. All five have built clusters of commercial activity, ranging from apps and airplanes to government and software. All five have national universities that provide a steady stream of talent and research that can be injected into companies. All five are home to companies and organizations--Google, McKinsey, Congress--that serve as national talent magnets for young people with degrees from prestigious universities.

New Orleans has some of this. There is Tulane University. There are the energy companies. There are the studio outposts that lend it the name "Hollywood South." And, unlike the country's richest cities, New Orleans has cheap living costs to attract graduates with debt. But on the high-tech radar for young graduates, New Orleans registers faintly. When the Martin Prosperity Institute, led by Atlantic senior editor Richard Florida, ranked the 20 leading high-tech metros, New Orleans didn't place. Huntsville, Alabama -- home to NASA's Marshall Space Flight Center and the United States Army Aviation and Missile Command -- finished 15th.

New Orleans is one of the great cultural brands in American cities with a rich history of art, music, and food. But it is not one of the country's great business brands. It doesn't have a rich history of Fortune 500 companies or national media-darling start-ups. The term "Silicon Bayou" exists, but the term is more hopeful than descriptive. Currently, the city's economy would be better suited to mining silicon than manipulating microprocessors. When you compare New Orleans and, say, San Jose the cities could not be more different by industry specialization. San Jose has 96 percent fewer mining jobs than the average city. New Orleans has 240 percent more. San Jose's share of information workers is three-times the national average; New Orleans is still below average.

So why are some investors so optimistic about New Orleans?

First, the price is right. "It is massively cheaper to do a start-up in New Orleans," said Jim Coulter, the co-founder of the private equity firm TPG Capital. "The cost of living, of labor, and of office space, is much lower." And then there are the tax incentives. One particular tax credit, which covers 25 percent of companies' production costs and 35 percent of payroll expenses for local employees, has been credited with growing the city's tech jobs by 19% between Katrina and 2012, six-times the national rate.

The flip-side of cheap labor is a dearth of tech talent. "There is a definitive hiring challenge here," Purcell said. "[Hiring] quickly is hard. Looking for developers is hard all over the country, but we have a steeper climb here."

But there's something else New Orleans has. Katrina has been a surprising force for renewal. The storm demolished the city's storefronts, infrastructure, and tax revenue. But it also shuffled some of the old order in New Orleans in ways that give it a unique advantage.

'The Perfect Proving Ground for Education Start-Ups'
It would be wrong to say the hurricane destroyed New Orleans public schools, because there was so little worth saving even before the storm hit. Orleans Parish was the second-worst-performing school district in the state, plagued by an abysmal drop-out rate.

Demolishing the city's schools, the storm inspired an start-up mindset in the parish that has created perhaps the most-watched petri dish of education reform in the country. Today, there is no major city where a majority of public school students are in charter schools -- except New Orleans.

Before the hurricane, fewer than 30 percent of New Orleans students were in passing schools, according to Alison Plyer of the Greater New Orleans Community Data Center. Now it's 68 percent. "There's been a concentrated effort by the entire community to improve the schools," she said, "led by charters and Teach for America."

One of the city's new experiments is Kickboard, an analytics program that visually tracks student progress. CEO and founder Jennifer Medbery was a Columbia graduate with a degree in computer science, teaching math in public schools for years, grumbling that there was no way to crunch the data she was gathering from students. "Each week we spent hours trying to organize it all with a homegrown maze of Excel spreadsheets and Google Docs," she said to me in an email. In February, the company raised $2 million in funding.

The recovery in New Orleans has let ed-tech start-ups partner directly with schools in a way that would be impossible if the calcified public school bureaucracies hadn't been knocked down by the hurricane. "Because of the charter schools, you have fast adopters of new ed-tech tools in the area. This is important because [as an entrepreneur] you want to be close to a market of adopters."

It'd be easy to assume the explosion of entrepreneurial activity was merely born of necessity. But it was about "more than just rebuilding the city," Medbery said. "It was about re-imaging it as a place for big ideas."

Gary Solomon, Jr., had a big idea, too, he just didn't know where to take it. Born in New Orleans, he studied lighting design at NYU in order to work on Broadway. But after Katrina, "there was a calling to come back home," he said.

"There was no industry here [in New Orleans] for what I do," he told me. "Our opportunity was to create it." So he teamed up with two unlikely partners: Steve Fink, the longtime production manager at the Superdome, and Jonathan Foucheaux, an entertainment tech wiz from Six Flags Theme Parks.

In 2009, the company, called Solomon Group, had three employees. Today, they have a staff of more than 100, with eight figures of revenue. They've designed complex installations for museums and arena-sized events. The exterior lights of the Superdome? They designed that. When CBS hosted the Super Bowl here this year, the network shot from ten "broadcast environments" throughout the city. Solomon Group built eight of the ten.

"While New Orleans has an awesome foundation and history and way of doing things, this feels like the first time the old guard has been willing to listen to new ideas," Solomon said. "Pre-Katrina there was no changing anything that had been done for 100-plus years. I don't feel like we're fighting anymore. There is a desire to change and do new things."

More Than 'Most-Improved'
Twelve years ago, a group of New Orleans-born tech guys met at Loa Bar, just off Canal Street, to share war stories and gripe about the decline of the city. They wanted New Orleans to be a place where entrepreneurs would flock. That boozy meeting led to the creation of a non-profit, the Idea Village, which has tirelessly lobbied the city to support start-ups. It has fought through bureaucracies and hurricanes and a Gulf oil spill to build Entrepreneur Season, a nine-month annual program to support new start-ups. The capstone Entrepreneur Week conference last month ended with 1,700-person vote for start-up of the year, the largest crowd-sourced investor pitch in the country. It was literally a street party. Kind of like a Start-Up Mardi Gras.

If New Orleans has a competitive advantage, this is it: A reputation for fun, along with a culture of engagement and a civic awareness sharpened by recent tragedy. Organizations like the Idea Village will be pivotal to building a city culture that celebrates and encourage entrepreneurs, who are, by their nature, ambition yet alone, independent-minded and dependent on the support of others.

In the last five years, the city has won an astounding number of city awards, but many of them are a variation on the "most improved player" theme. In 2011, the Wall Street Journal named it the most improved metro. Forbes has dubbed it the Number-1 metro for IT job growth. CareerBuilding said it had the third-fastest wage growth in the country. Just last week, the Brookings Metropolitan Policy program named it the number one recovery city in the country. But since Brookings measured growth compared with the aftermath of Katrina, this is as much recognition of how far New Orleans has come as it is recognition of how far New Orleans had fallen.

After losing up to 10 percent of its population, New Orleans is growing again. The parish ranks behind only Austin and suburban Washington, D.C., as the fastest-growing large counties in the U.S. As the people have returned, the number of blighted homes has fallen by more than half since 2008. Crime is falling, and the share of bachelor's degrees is rising. 

But there is no getting around this central fact: The city isn't merely miles behind San Jose and Austin in attracting the nation's top talent. It's behind the national average. The share of New Orleans young adults with a bachelor's degree has increased from 23 to 26 percent since 2000. That's not just below the average city, but also it's growing slower than the average city.

New Orleans' most critical challenge in the next five years will be to win the mind-share of young entrepreneurs -- whether by building a city-wide wifi network, hosting a major corporation's bureau, or launching a nationally celebrated consumer-tech company. "For all their individualism, entrepreneurs tend to flock," Jim Coulter said. "There's a network effect. Flocking drives more entrepreneurs. The coffee shops become the discovery points. That's what happened in San Francisco, it's happening in Austin and it's beginning to happen in New Orleans."

Just beginning. Still beginning. Sometimes a start-up city is just a city getting started, again.

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Baseball would appear to be in crisis. Viewership is falling fast, down 30 percent across ESPN, TBS, and Fox since 2007. But those same networks are signing new contracts to pay more than ever for the rights to broadcast baseball games. Why?

As David Bank explained in an RBC note from February, it's "the bulk provided by MLB content" that makes it really valuable.

The bulk?

Here's what he's talking about.

There are more sports channels and hours of sports programming than ever before. More ESPNs, more regional sports networks, and more channels like Fox Sports on the horizon. That is so many hours of sports television, it's mind-blowing. TV programming is expensive. Time is money. How do you fill it?

Enter baseball. There are more than 2,400 games each MLB season, which is more than 7,200 hours of potential live sports, or about 300 full days of baseball. That's a lot of bulk. The kind of bulk that cable companies, who need relatively cheap, but relatively popular, content to fill out their days while they collect the slivers of your monthly cable bill known as affiliate fees. "While baseball may not be the highest-rated sport on average, its content provides ways to justify affiliate fees and to build viewership," Bank writes.

The sheer endlessness of baseball games and the baseball season has been offered as a reason for the sport's decline in the last decade. Its languid pace collides with information inflation, Internet attention disorder, tweeting Millennials, that whole shebang. But the economic paradox of baseball is that the breathtaking volume of the sport is also the foundational source of its value to networks.

The share of American adults who are either working or actively looking for work -- i.e.: the labor force participation rate -- fell to its lowest point since 1979, according to today's jobs report.

If 37 percent of American adults aren't in the labor force, what are they doing?

Bloomberg Businessweek has a beautiful graphical explanation. Click it.

The president has a new budget coming out. The New York Times calls it "a significant shift in fiscal strategy." The Washington Post calls it a "stark shift in strategy." National Journal calls it "a gutsy change in strategy."

Theoretically, one would expect this document to demonstrate some sort of change in strategy.

But does it, really? The full details of the plan have been shared with some congressional leaders, and they don't become public until Wednesday next week. But the blueprint looks remarkably similar to the plans Obama has proposed -- and which subsequently failed to move through Congress.

Here was Obama's last plan. It called for significant health care cuts over the next decade, particularly by reducing payments to drug companies and hospitals. It called for changing the way we measure inflation, which would raise taxes and cut Social Security benefits slowly for some recipients. It called for replacing the sequester. And it called for immediate additional spending, focused on infrastructure.

Here's what we know about the new plan. It calls for health care cuts over the next decade, particularly by reducing payments to hospitals and other "providers." (Check.) It calls for changing the way we measure inflation, which would raise taxes and cut Social Security benefits slowly for some recipients. (Check.) It calls for replacing the sequester. (Check.) And it calls for immediate additional spending, focused on infrastructure and education aid (Check.).

So much for that gutsy changey stuff.

It sounds to me like the new plan will incorporate some of Obama's policies from the State of the Union speech -- like universal pre-K and gun control -- and try to ameliorate some Republicans by asking for slightly less revenue and framing his health care cuts as entitlement reform. But that's not hardly a "significant shift" or "gutsy change" in strategy. It's a subtle shift with a successful re-branding effort.

For months now, Washington moderates have accused the president of failing to LEAD, even as he offers compromise upon compromise to Republicans who steadfastly say they that more revenue increases are off the table (while Democrats say entitlement reform is off the table without significantly more revenue). If public perception is the better part of leadership, then perhaps today's messaging war from the White House will have its intended effect, and Republicans will move to the left on taxes. Or else, we might even hold out hope that Washington reporters might suddenly decide that Obama, having given them the budget they want with the messaging they prefer, is no longer the goat of these budget negotiations. I wouldn't bet on it. For journalists to break free of the Washington tradition of blame-both-sides false equivalence would be a truly gutsy change in strategy.

___

Update: I see Jon Chait made many of these points well earlier today.

On Tuesday, the S&P 500 and the Dow closed at nominal all-time highs. Three days later, the Bureau of Labor Statistics reported that the economy added a shockingly low 88,000 jobs in March. How bad is 88K? Well, put it this way, we're theoretically in the midst of an accelerating recovery, and 88K new jobs per month won't get us back to full employment for another 20 years, or more.

I suspect that this will be one of the defining national stories of 2013, and beyond: The big, sustained, and accelerating gap between the working opportunities of most Americans and the profits produced at the top.

You could argue that this is a new, and transitory, story. You could say I picked two headlines from the past four days (I did). You could say that firms rushed to technology and efficiency to replace workers in an exceptional, and slowly normalizing, crisis (they did). You could say that the balance between labor and capital might naturally come back to normal as rising Asian wages send more work back into the U.S. (they might).

But when you draw back the lens, you see that this week's stock market/labor market schism isn't a new story, at all. Here's the 40-year look at the growth of corporate profits vs. GDP vs. income that goes to workers, rich and poor. I mean, holy wow.

Why are corporations on such a tear? The first clue is that a significant share of these profits have always come from two sectors, as Jordan Weissmann has reported: Manufacturing and Finance. Together, they account for more than 50 percent of domestic corporate profits. But they employ just 13 percent of the workforce. 

Manufacturing and finance are both global industries, and global industries have advantages on both sides of the profit equation. First, they have access to demand in countries that are growing quickly, especially in Asia and Latin America. Second, they have access to workers in countries with cheaper wages.

Meanwhile, the fastest-growing jobs in the U.S. over the last few decades have been in industries insulated from globalization, precisely because so many jobs in worldwide industries like manufacturing have escaped overseas. Between 1990 and 2008, virtually all (97.7 percent) of the net new jobs came from what economists call the "nontradable" sector, which is a funky way of saying the work must be done locally (e.g.: government, education, health care). Even in the recovery, health care, food service, and other local and low-paying industries have led the jobs recovery.

Workers in local industries might have access to the global capital boom if they saved and invested in a markets whose growth represented the success of global companies and the flow of global capital. But they don't, really. Many families hardly have any savings outside of their 401(k) at all. Eighty percent of stock market wealth goes to the top 10 percent (graph below).

This isn't shocking. People with more money have more money to save and invest, which typically makes wealth inequality wider than plain-old wage inequality. But it exacerbates the trends we're seeing from the top: Small local jobs falling behind the runaway train of global capital.

No matter how you want to break down the schism -- 99% vs. 1%; wages vs. wealth; labor vs. capital; local vs. global -- this thing is real and there aren't many good reasons to expect it to go away, whether we have a great jobs report (last month) or a bad jobs report, like this week. This is the economy, now.

Let's talk about marriage. Today, young people get married later. There are more unwed mothers. And gay marriage is winning broad support.

These are three true things about marriage. But three true things about marriage don't necessarily have anything to do with one another.

The connection between the rise of gay marriage and the fall of straight marriage has been made, most notably, by Times columnist Ross Douthat, who has asked liberals to acknowledge that the mainstreaming of gay marriage just might have led the an increase in unwed moms and the decline of the institution, in general. This is dubious, for two big reasons. First, support for gay marriage is highest among higher-educated, and higher-earning people, who are less likely to have children out of wedlock. Second, if gay marriage were *behind* the rise of unwed mothers and delayed marriage, it would theoretically have to come first. But it didn't. As we'll see, out-of-wedlock births and delayed marriage were already underway before the 1990s, when gay acceptance suddenly exploded.

So let's ask three natural follow-up questions: When did support for gay marriage increase? Why are Millennials getting married later? And what's behind the rise of unwed mothers?

Where did gay tolerance come from?
(Starts with: Late Gen-Xers and Millennials growing up in an era of increasingly gay-friendly media)
As defenders of all strains of equality like to say, the arc of history is long, and it bends toward justice. But for gay marriage, it bent particularly quickly and shortly.

We're going to tell this story in charts. First, between the 1970s and early 1990s, there was practically no change in public attitudes towards gays. In the 20 years after 1990, the gap closed by an astounding 60 points.

Practically NOBODY strongly supported gay marriage in the late 1980s. It was unheard of. Today, it's mainstream, and about half the gap closed before 2004. Remember: It wasn't until 2003 that the Supreme Court ruled that gay people shouldn't be thrown into prison for consensual sex -- in the same year, the British government officially allowed the teaching of "the acceptability of homosexuality." This was an incredibly rapid change.

The public today is roughly evenly split over gay marriage, but when you break this down by age, you see the vast majority of resistance comes from older Americans, and support comes from the youngest.

Big picture: Gay acceptance, which took off in the 1990s, led to gay marriage acceptance, which advanced in the last 20 years. By the time that late Gen-Xers and Gen-Yers reached young adulthood, the vast majority of them simply didn't care about homosexuality. It just wasn't a thing.

Mark McCormack, the author of The Declining Significance of Homophobia, attributed it to two factors that are essentially one factor, which is media exposure: (1) The rise in openly gay performers and characters normalized homosexuality for young kids listening to music and watching TV and movies; and (2) the Internet revealed to young people outside of liberal urban bastions that being gay simply wasn't that weird.

Why are people getting married later?
(Starts with: More educated women and the Great Recession.)
Well, this is complicated. I mean, every question in this article is complicated, but this question is complicated. For a longer explanation, I'll direct you here.

For our purposes, let's boil it down to the short-term explanation and the long-term explanation. The short-term explanation is very clear. It's the recession, which has delayed every hallmark of young adulthood -- getting a job, moving out, getting married, having kids, and so on.

But this delay is part of a longer delay of marriage that stretches back about half a century. As more women attended college and worked through their 20s, they built enough financial independence to wait for marriage. Meanwhile, the cost of being single fell dramatically, as birth control technology extended courtships, home tech (e.g. washing/drying machines, video games) made it easier to live alone, happily and cleanly. As you can see in this study by Betsey Stevenson and Justin Wolfers, marriages per capita have been declining since the 1940 (except for a little boomer-fueled uptick in the late-1960s):

***

Out-of-wedlock births and delayed marriage were already underway before the 1990s, when gay acceptance took off. This suggests that gay marriage isn't leading to the decline of marriage. Rather, the "decline" of marriage happened to pique media interest at the same time that homophobia got smoked -- in entertainment, in federal law, and in wedding chapels.

The old conservative argument against gay marriage was that it would ruin the institution for straights. But Douthat's argument -- that gay marriage reinforces the idea that marriage and childbirth don't have to be connected -- acknowledges the exact opposite. It accepts that straight marriage "ruined" itself in a way that gay marriage won't fix. That's not a reason to oppose gay marriage. It's just an acknowledgement that gay marriage won't change anything for straight couples.

And wasn't that the point, all along?

If you're furious about the cost of cable TV, and you don't watch sports, just close this window and walk away. Seriously, don't even read another paragraph. It'll just make you too angry.

Still there? Okay, so here's where we left things last time we discussed the economics of sports and television.

In a sentence: Television economics are sports economics, and sports economics are television economics. Sports accounts for half of the programming costs of TV, and TV accounts for more than half the revenue of many professional sports leagues. Without television, professional sports could scarcely exist. Without sports, the TV cable bundle -- and the golden age of television that it's ushered into existence -- might unravel entirely.

Your cable bill -- $80 or $90, or whatever it is -- is best understood as two prices. The programming (i.e. the channels you watch) and the distribution (i.e. the infrastructure and profits for the cable companies). Every time you pay a cable bill, the channels collect a small fee. It's called an "affiliate fee." The most in-demand channels tend to negotiate the highest fees. And those tend to be sports channels. Take a look.

There's no great mystery here. Sports are expensive because they are valuable. And sports are valuable because they attract a larger live audience than average prime-time shows. That's the big picture. A 2013 report from RBC, "Moneyball: The Current State Of The Sports Media Landscape," sharpens the image.

Here's a great picture of the sports premium, drawn from data in the report. The gap between NFL viewership and primetime viewership is large and growing. In 2002, NFL games averaged about 15 million viewers and broadcast primetime shows averaged about 10 million. In 2012, that 50 percent gap exploded to a 150 percent chasm between the NFL and non-sports programming.

I used the NFL, because just as sports economics dominate the price of TV, NFL costs dominate the price of sports. The NFL accounted for 30 percent of sports advertising and 36 percent of sports rights in 2012.

By my rough calculation, if you pay $90 a month for cable, you are paying about $76 a year (about 7 percent of the total cost of cable TV) just for the NFL.

If you don't watch sports, you are literally paying an annual subsidy to support your sports-fan friends. But wait. Before you get more upset, consider this. You're *also* paying the media companies that produce some of the great shows you like on other channels. Roughly 28 percent of Disney earnings -- and 23 percent of News Corps' cable earnings -- come from sports channels.  These sports channels are profitable. And those profits can cover the cost of content on ABC (owned by Disney) and FX (owned by News Corp).

Sports keeps the cable bundle together. And the cable bundle is powering the media companies through a remarkable surge in quality TV entertainment.

There are 4.3 million retail salespeople in the United States, equivalent to the state population of Kentucky. And there are 310 prosthodontists -- that is, dentists specializing in prosthetic teeth -- which is enough to fill, well, a medium-sized lecture hall.

Those are the most- and least-common occupations in the United States, according to a new survey from the Bureau of Labor Statistics. Here are the full top- (and bottom-) ten lists:

Three more interesting nuggets from the report.

(1) The most "urban" job in America -- that is, with the highest concentration in metro areas -- isn't technically a job in U.S. cities, but above U.S. cities. It's flight attendants. 

(2) What's the most common government job? Depends on the level of government. At the federal level, it's postal service workers. In state governments, it's correctional officers and jailers. And at the local level, teachers aren't just the largest job category. At various levels of education, they're the five largest job categories.

(3) Shampooers are more likely to live in cities than software developers. Now you know. If you're interested in learning more about shampooers, this page is your new heaven.

Technical note: There are surely scarcer jobs than prosthodontists, it's just that the BLS doesn't count them. Take, for example, I don't know, rodeo clowns. How many rodeo clowns are there in America? I haven't the faintest idea. Neither does the BLS. Last year, it published a report on rodeo clowns, in which the author bravely admitted: "The U.S. Bureau of Labor Statistics does not collect employment or wage data on rodeo clowns." So to be precise, these are the least-populated job categories in the BLS Occupational Employment Statistics.

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Like Western democracy, Socratic philosophy, written histories, epic poetry, and every other foundational pillar of high culture, spring break began in ancient Greece.

Called "Anthestreria" by the local teens, and their parents, it was a festival dedicated to Dionysus, the god of wine and whoopee and just about every excuse to party. For three days, people would dance, singers would perform, women would deck themselves with flowers, and Greek men would compete to see who could be the fastest to drain a cup of red wine.

Two thousand years later, practically nothing has changed except our taste in chugging alcohol. While Anthestreria is immortalized in terracotta wine vessels in world-class museums (below), you might think today's spring break rituals are as easily forgotten by history as they are by memory-blighted college students. But for the American cities that host students, the impact is not so brief, as John Laurie explained in his fascinating economic study Spring Break: The Economic, Socio-Cultural and Public Governance Impacts of College Students on Spring Break Host Locations.

The paper begins, as spring break did, in Greece, before the rise of Christianity put an end to kylix head-stands and other childish things for two thousand years. It wasn't until the mid-twentieth century that modern spring break emerged. In 1934, Sam Ingram, a Colgate College swim coach, was looking for a warm place to keep his swimmers in shape. He chose the small, quiet town of Ft. Lauderdale, Florida. More swimming instructors followed. During World War II, rich Ivy League students, who occasionally visited Bermuda during their spring breaks, were suddenly spooked by rumors of German U-Boats roaming the Caribbean. The best intracontinental alternative was to meet up with the swimmer co-eds in Florida. And so, Ft. Lauderdale became the first official home of the American Anthestreria tradition.

The Spring Break Effect
Fast-forward six decades and, by the early 2000s, nearly 40 percent of college students travel en masse for spring break, spending "nearly $1 billion" in Florida and Texas alone, according to Laurie. In addition to the peculiar joy of reading a paper with these sort of topic sentences -- "Spring Break has a temporal as well as descriptive definition" -- it makes a substantive point about the economic benefits of spring break to the cities receiving hoards of boozing college students.

The spring break effect is, in a word, meh.

But how exactly do you measure "the spring break effect"? Laurie graphs sales taxes and hotel development taxes for various undergrad hotspots in Florida, Texas, and Arizona. His overall conclusions are:

(1) Spring break can be great for some small businesses and bars that make their money selling cheap rooms and liquor on volume; BUT ...

(2) It's not a dependable revenue generator for the counties at large, which suggests the economic benefits of the event are overrated, even for the most popular destinations; AND ...

(3) The only local industry that is clearly and consistently stimulated by spring break is law enforcement.

What Hath Spring Break Wrought? The Panama City Story
Just inside the armpit of Florida's panhandle, looking into the Gulf of Mexico, sits Panama City Beach, the "spring break capital of the world." Every year, the area draws up to 500,000 college students -- that's 42 co-eds for every city resident counted in the 2010 Census. For many years, Panama City has been MTV's home base for spring break coverage, and partiers spend $170 million during six-week period, according to a 2004 study.

Sounds like quite the stimulus. But Laurie's research in Bay County (home to Panama City) found that "the sales tax collected in Bay County during the month of March is actually the lowest of any month" before ticking up in April. Here's the chart:

What about hotel taxes (i.e.: tourist development receipts)? It's a similar story. July is the year's clear winner. March and April, while a huge improvement over February, are hardly better than May or September.

How is spring break so economically tame? Here are two conclusions, besides the possibility that Laurie's data simply does not properly reflect the benefits of spring break. First, college students are cheap and poor. They buy bad booze in bulk, they sleep five to a room, they lie out under the sun with nothing but alcohol and tanning lotion, and they hunt around for the best deals for dinner and accommodation, even if it means staying in a different city and driving to the beach every morning.

Second, although the spring break effect is weak, it's still there. March and April are considerably more lucrative for Bay County than January and February. In defense of college students, maybe they don't spend as much money as the four-person families who fill out Florida over summer vacation, but they might pull forward the spring vacation season by a few weeks.

If you're wondering how half a million people leave so little a mark, however, the proper response is that they do leave an unmistakable mark on local crime and non-criminal citations. March is by far the year's worst month for public safety in Panama City Beach.

The Spring Break Legacy
"More crime than tax receipts" would be the five-word summary of the Panama City experience, as painted by Laurie's research. America's most famous spring break city is hardly an outlier. "The overall trend between cities regarding both average business sales tax and average hotel tax is that during Spring Break, [Florida, Arizona, and Texas] counties show low levels of sales tax collected," Laurie concluded. "In fact, the month of March is very poor for all three counties."

It is notable that almost all of the cities in the paper saw extraordinary business and income growth in the mid-2000s. But since these years coincided with the heyday of the housing boom rolling through the sunbelt, it's reasonable to suggest that spring breakers might not have been the first (or 100th) most important factor in Florida's economic development.

Perhaps the only conclusion to draw from the paper is one you could have guessed even if you knew nothing about Anthestreria, Bay County, or MTV. Spring break might be a boon to certain hotels and bars looking for late-winter pick-up. But it's hardly a metropolitan stimulus. It's hot, cheap, mid-semester jaunt for poor indebted college students living off bad beer, cheap grain alcohol, and hormones. These things are timeless. But upon them, great cities are not built.

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Murkiness makes for lovely impressionistic ambiance, but it's less attractive in price marketing [Met/Wikimedia Commons]

Many of the Met's 6 million annual visitors pay $25 to see the country's largest collection of art. Some pay out of a sense of obligation. Many pay because they don't know they have a choice. It's easy to read the board listing prices for adults and children without seeing the small font saying "Recommended." Ask for a ticket, and you will be told "$25."

It's pretty clever nudging. But maybe too clever. Like, illegal-clever.

A new lawsuit accuses the Met of violating the spirit of a 1893 New York state law "that mandates the public should be admitted for free at least five days and two evenings per week," according to the AP.

If you still feel guilty about not paying the full price, consider that the museum receives annual grants from the city without paying taxes or rent, has a $2.5 billion investment portfolio, and uses admissions to cover only 11 percent of its operating costs. Six in ten Met tourists don't pay the full $25, but as the AP reporting reveals, many of the people who don't pay are locals who know they don't have to, while it's the unwitting out-of-towners who get yoked into chucking up the full price. Third-party websites don't say the fee is recommended.

Still, the suit goes way too far, "seeking compensation for museum members and visitors who paid by credit card over the past few years." Clearly, the museum can't be expected to find and interview 20+ million people to discover who would have paid what amount between $0.01 and $25 had the font size for "Recommended" been slightly bigger. Let's just hope the suit encourages the Met's signage to be clear enough to out-of-town groups who don't realize they have to pay $100 to see public art.

(via Max Read)

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We speak of The Federal Budget as a monolith. But there's nothing monolithic about the federal government. What we call "Washington" is a million little and big programs doing a million little and big things, but we add them all up to One Number, because they all fall under the umbrella of federal spending.

So, let's be a little more specific (but only a little). Let's talk about two federal budgets. The part that's growing. And the part that's shrinking.

What's growing, as a share of the economy over the next 20 years is Medicare, Medicaid, and Social Security. What's shrinking is, well, everything else. At a glance:

You would think that a serious deficit hawk would want to cut the part that's growing. Instead, what Paul Ryan's plan does over the next ten years is to concentrate 97 percent of his $5.6 trillion cuts in the part that's already projected to shrink. He hardly cuts Medicare or Social Security, at all ...

... to which you might say, "Great!" Say you're in your 50s, you love Social Security, you don't want Medicare to change, and you happen to hate infrastructure, education, R&D, and income-support programs for the poor. This is the plan for you!

But let's say you're worried the federal government is pulling away from productive spending on young people and infrastructure. Let's say you know the U.S. government already spends 2.4 times as much on the elderly as on children, more than practically any economy except Japan and Greece (some company, there). Let's say you don't think we should slash our already-shrinking investments in the future to spare our already-growing insurance payments to retired folks. Then this is not the plan for you at all. It's the opposite of the plan for you. It's an excuse to drown productive federal spending in a bathtub to protect spending on today's older voters at all costs and, just as importantly, spare the rich from paying more taxes.

The deficit debate isn't just about the deficit figures we want. It's about the kind of government we want. Demographically speaking, government of the old, by the old, and exclusively for the old is probably going to perish sooner or later, don't you think?

This is a seriously cool graphic from Wired showing how NBC, CBS, and ABC lost their stranglehold on Emmy nominations in the 1990s. First HBO came along with "The Sopranos", "Sex and the City", and "Six Feet Under." Then Showtime, AMC, and FX gobbled up the nods in the last few years.

"More Competition = Better TV," Wired concludes. That's right. It is awesome to love TV at a time when half a dozen premium cable channels will throw tens of millions of dollars at auteurs and showrunners. But the *real* reason that great television is (a) in its golden age and (b) mostly on cable is all about the business model.

Broadcast channels (like CBS) and cable channels (like TNT) are both in the television business. But they're not in the same television business.

Broadcast gets more of its money from advertisers. Cable networks get more of their money from being on cable. Out of every $80 you pay to Comcast, each channel gets a little cut. That cut is the lifeblood of cable earnings.

If you own a broadcast channel, your job is to develop as many shows as possible that attract a wide audience. The formal term for most of these shows is "produced for a mass audience" but the common term is "relentless crap." Then again, it's an advertising game. So broadcast aims broad.

But if you own a cable channel, your first goal is to develop a handful of "hits" that get you on that bundle to get guaranteed monthly income from tens of millions of subscribers. The rest of your lineup can be cheap "Law & Order" and "House" reruns, for all you care. Ratings don't matter as much if advertising doesn't matter as much. America's "best" shows -- like "Breaking Bad" and "Mad Men" -- are all ratings dogs, each struggling to get a Nielsen rating higher than 3. But it doesn't matter, because AMC's cost structure allows for a few elite shows, one huge show ("Walking Dead"), and a lot of reruns.

Television audiences hate the cable bundle, because they think they're paying for television they don't want to watch. But they don't often appreciate that (a) the bundle is created by media companies, not cable companies, and (b) it's at least partially responsible for the golden age of television that we're living through. It's created a motivation for no-name cable companies to make great entertainment.

Here it is: In 2012, newspapers lost $16 in print ads for every $1 earned in digital ads. And it's getting worse, according to a new report by Pew. In 2011, the ratio was just 10-to-1.

The digital ad revolution, always "just around the corner", remains tantalizingly out of reach for most newspapers, which explains why some stalwarts like the New York Times and Wall Street Journal have moved to subscription models for their websites to bolster digital ad growth. Just today, the Washington Post announced a paywall.

Here's the ten year picture of print vs. digital ads for newspapers:

Since 2003, print ads have fallen from $45 billion to $19 billion. Online ads have only grown from $1.2 to $3.3 billion. Stop and think about that gap. The total ten-year increase in digital advertising isn't even enough to overcome the average single-year decline in print ads since 2003. Ugh.

Who killed newspapers? The classic response is the classifieds, and it's true that websites offering direct information about housing, rentals, cars, and other goods and services that once found a unique home in newspapers have gutted the old revenue model. "More than three-quarters of print classified revenue has been lost since 2000," Pew reports.

But as you can see, the majority of print's ad decline since 2003 has come from retail ads (the most common slice of most newspapers' revenue pie) and national ads. Here's the breakdown of that $25 billion lost over ten years. It's about $11 billion each from classifieds and retail ads, with the remainder coming from national ad spots.

As revenue falls, reporting is falling with it. Newsroom employment fell below 40,000 full-time workers for the first time since 1978 -- and 30 percent below its peak in 2000.

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This was the most shocking statistic I read this weekend: 58 percent of first births in lower-middle-class households are now to unmarried women. Meanwhile, two in five of all births are to unwed mothers, an all-time high, according to the Centers for Disease Control and Prevention.

Why?

The thesis of this fascinating article in the Wall Street Journal says the real mystery here isn't "Why so many babies?" but rather "Why so few marriages?" -- particularly among less-educated men and women.

This is a complex economic mystery that we've explored often at The Atlantic, but we can take a big bite out of it by focusing on three factors: (1) The changing meaning of marriage in America; (2) declining wages for low-skill men; and (3) the declining costs of being a single person.

A New Union
Marriage has changed. Once upon a time, the typical marriage, as Justin Wolfers has explained, involved special roles for the husband and wife. He would work. She would stay home. It was an efficient arrangement where opposites attracted. Men who wanted to be executives would marry women who wanted to be housewives. And, since almost half of women had no independent earnings 40 years ago, there were a lot of women who just wanted to work at home and raise a family.

Several factors mussed up this traditional union. Today women expect to work much, much more than they used to -- and they do. They make up the majority of new college graduates and their labor participation rate has soared over 60 percent. Since 1950, hours of work by married women have increased by roughly a factor of three, according to the Minneapolis Fed.

Now that women are better educated, with greater control over both their fertility and their earnings, modern marriage has changed from an arrangement where men marry for a housewife to a "hedonic" model where both partners can be the breadwinner. As marriage has shifted from opposites-attract to like-attracts-like, researchers have found that sorting has increased all along the educational scale. College graduates are more likely than ever to marry college graduates, as Charles Murray has written. High school dropouts are more likely to marry high school dropouts.

Think of marriage like any other contract or investment. It's most likely to happen when the gains are big. So we should expect marriages among low-income Americans to decline if women perceive declining gains from hitching themselves to the men around them.

That's precisely what we've seen...

Cheap Wages, Cheap Technologies
Low-skill men have had a rough two generations. The evaporation of manufacturing work has gutted their main source of employment, while globalization has held down their wages. Marriage has declined the most among men whose wages have declined the most. Here's a remarkable graph from the Hamilton Project comparing change in earnings (the RED LINE) and change in likelihood to be married (the BLUE BARS).

In a dating pool where poor women are more likely to be surrounded by men with low and falling fortunes, more women have ditched a union for good economic reasons: It could be a financial drain. In The Truly Disadvantaged,  William Julius Wilson, argued that "high rates of unemployment and incarceration meant that the local dating pool was populated by unmarriageable men--and the result was that women chose to live independently."

It is hardly easy to do anything with earnings near the poverty level. But it is relatively easier to raise a child and keep up a home with modern household innovations. The connection between Lunchables, detergent and marriage rates is not often made. But perhaps it should be. The development of time-saving technologies -- cheap prepared foods, cheap clothes, machines to wash, dry, and vacuum -- has not only encouraged more women to seek work, but also made it relatively easier for single parents to raise a child. Put starkly, technology makes it cheaper and easier than ever to be single. It makes marrying a financially unstable man even more risky.

That women find themselves drifting "unintentionally" into parenthood with men they have no intent of marrying creates another generation of problems. Children raised in two-parent households are more likely to go to college, more likely to be employed, and more likely to earn a high wage. The rise of unwed mothers might be logical for many of these women. But there is too much evidence that it deepens the divide between the haves and have-nots in America.

Magical (adj): "delightful in such a way as to be removed from everyday life." [Synonyms: fake, absurd, couldn't-hardly-happen-even-if-Republicans-controlled-both-houses-and-the-presidency]

2.1% and $6.7 trillion

Without context, these are inconsequential numbers. With context, they're magical numbers. So here's the context.

Paul Ryan and his budget have taken lots of flack for giving Medicare an unrecognizable facelift and gutting federal spending on the poor and sick to reach his balanced budget goals next decade. Both of those goals are radical and/or visionary, depending on your opinion of Ryan, but neither are quite magical.

What is magical, however, is thinking you can cut non-defense discretionary spending -- what most people think of as Government -- to 2.1 percent, one-third below its modern low. That's what Ryan's budget does. Here's how he does it.

He keeps the sequester -- a $1 trillion guillotine to non-defense and defense spending. But his breakdown of spending pushes virtually all of those cuts into non-defense categories. In other words, everything in our discretionary budget -- scientific research, housing, international relations, education, public safety, public health, environmental protection, job training -- doesn't just get a sequester. It gets a double-sequester! Plus another $250 billion in cuts, under the Ryan budget. Win the future.

Here's the long view of non-defense discretionary spending, with data from Loren Adler and the Bipartisan Policy Center (plus an assist from Michael Linden at the Center for American Progress). The green line is today's law, including the sequester (a law passed specifically because it was so bad that it would force us to change it). The blue line is the Ryan plan (even worse).

"It's just fake," Linden said. "It's just total fake. Ryan's projection is about a third lower, as a share of the government, than any year since [we have records]. No future Congress would ever approve this."

The second most magical number comes from the other side of the budget. We talk a lot about Ryan's spending cuts. But it's his tax spending cuts that are perhaps the most ludicrous.

Ryan wants to change projected tax revenue by $0.0. But his plan to cut and consolidate rates creates a $6.7 trillion hole in federal revenues, as Matthew O'Brien pointed out. That can only be made up by eliminating the biggest (and most popular) tax breaks. He would almost certainly have to tax employer-paid health care, mortgage interest, charitable donations ... the list goes on and on. Ryan doesn't say what he could cut because it would be despicably unpopular, even more so than his proposed cuts. In fact, his $6.7 trillion in mystery tax-spending are 46 percent more than his spending cuts. (Good luck, Ways and Means Committee!)

If I appear to be disproportionately picking on Paul Ryan, it is only because I am. There is widespread understanding that unemployment is a real crisis, right now. There is thorough economic evidence that our most immediate crisis is long-term unemployment and the permanent structural deficiencies it will create. There is widespread belief that we need to reduce future deficits through a combination of higher revenues and lower spending. Ryan's budget neither protects the unemployed, nor fixes their hysteresis, nor proposes a balanced solution to a future budget problem that it also overemphasizes. Make-believe numbers in the pursuit of misguided goals is dark magic, indeed.

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