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.
Emma Perrier was deceived by an older man on the internet—a hoax that turned into an unbelievable love story.
Emma Perrier spent the summer of 2015 mending a broken heart, after a recent breakup. By September, the restaurant manager had grown tired of watching The Notebook alone in her apartment in Twickenham, a leafy suburb southwest of London, and decided it was time to get back out there. Despite the horror stories she’d heard about online dating, Emma, 33, downloaded a matchmaking app called Zoosk. The second “o” in the Zoosk logo looks like a diamond engagement ring, which suggested that its 38 million members were seeking more than the one-night stands offered by apps like Tinder.
She snapped the three selfies the app required to “verify her identity.” Emma, who is from a volcanic city near the French Alps, not far from the source of Perrier mineral water, is petite, and brunette. She found it difficult to meet men, especially as she avoided pubs and nightclubs, and worked such long hours at a coffee shop in the city’s financial district that she met only stockbrokers, who were mostly looking for cappuccinos, not love.
In most big cities, cabbies aren’t allowed to turn away passengers because of their race or destination—but it still happens all the time.
At close to midnight, I had just gotten off of the plane at LAX after a long journey from my home in Hartford. Two hours before departure I had picked up my kids from school and then kissed my family goodbye. Travel is an inextricable part of my job as a baseball analyst with ESPN. This particular week was Los Angeles; the week before was Pittsburgh. So go my Wednesdays.
On my way to Los Angeles, I connected in Minneapolis where I was joined by Joe Vanderford, an ESPN cameraman who hailed from North Carolina. We had a great chat en route to L.A. Joe, who is white, told me how his father had been responsible for integrating the softball league in his hometown to which I responded that his father had been brave. He agreed, but added that his father had also loved the game and wanted to win; before integration, there had been some great players barred from playing because of race.
Old French Canadian genealogy records reveal how a harmful mutation can hide from natural selection in a mother's DNA.
The first King’s Daughters—or filles du roi—arrived in New France in 1663, and 800 more would follow over the next decade. Given their numbers, they were not literally the king’s daughters of course.
They were poor and usually of common birth, but their passage and dowry were indeed paid by King Louis XIV for the purpose of empire building: These women were to marry male colonists and have many children, thus strengthening France’s hold on North America.
And so they did. The filles du roi became the founding mothers of French Canadians, for whom these women are a source of historical pride. A grand old restaurant in Montreal was named after the filles du roi. So is a roller-derby team. French Canadians can usually trace their ancestry back to one or more of these women. “French Canadian genealogy is so well documented, it’s just a piece of cake to trace any line you have,” says Susan Colby, a retired archaeologist who comes from a French Canadian family and has done some of that tracing herself.
On Monday, Trump set out to emphasize honor and integrity—and then he made a series of unsubstantiated claims.
The week of October 15 was supposed to be set aside to reflect on character.
“We celebrate National Character Counts Week because few things are more important than cultivating strong character in all our citizens, especially our young people,” President Trump said in declaring it. “The grit and integrity of our people, visible throughout our history, defines the soul of our Nation. This week, we reflect on the character of determination, resolve, and honor that makes us proud to be American.”
There hasn’t been much time to talk about character. Instead, politics this week has been dominated by a peculiar scandal, beginning with one off-base remark from the president on Monday, that has managed to somehow leave everyone it touches worse off than they were at the start of the week—including the president, his chief of staff and spokeswoman, a member of Congress, and the family of a Special Forces soldier killed in Niger earlier this month.
Rumors are swirling over what took place in the final hours before four U.S. servicemen died—but a clear picture of what actually took place is only beginning to emerge.
On October 4, a small group of U.S. troops were preparing to leave a meeting with community leaders near the small town of Tongo Tongo in Niger. They were close to the Malian border, traveling in unarmored pick-up trucks with limited weaponry and a few dozen of their Nigerien counterparts. Then they were ambushed.
By the time the more than 30-minute assault was over, three U.S. troops were confirmed dead and two more were gravely injured. Another, Sergeant La David Johnson, was missing and his body would not be recovered for another two days. French aircraft, called in for back-up, circled overhead as fire was exchanged below. They later helped to evacuate survivors.
This account, based on public statements from the Trump administration, interviews with U.S. Africa Command officials; former State Department and intelligence officials; and the man who almost served as the senior director for Africa on the National Security Council, along with additional reporting from other news outlets like CNN and The Washington Post, suggests a direct link between the fatal ambush and the absence of a clear strategy or perhaps even a cursory understanding of U.S. operations in Africa by the Trump administration.
DeepMind’s new self-taught Go-playing program is making moves that other players describe as “alien” and “from an alternate dimension.”
It was a tense summer day in 1835 Japan. The country’s reigning Go player, Honinbo Jowa, took his seat across a board from a 25-year-old prodigy by the name of Akaboshi Intetsu. Both men had spent their lives mastering the two-player strategy game that’s long been popular in East Asia. Their face-off, that day, was high-stakes: Honinbo and Akaboshi represented two Go houses fighting for power, and the rivalry between the two camps had lately exploded into accusations of foul play.
Little did they know that the match—now remembered by Go historians as the “blood-vomiting game”—would last for several grueling days. Or that it would lead to a grisly end.
Early on, the young Akaboshi took a lead. But then, according to lore, “ghosts” appeared and showed Honinbo three crucial moves. His comeback was so overwhelming that, as the story goes, his junior opponent keeled over and began coughing up blood. Weeks later, Akaboshi was found dead. Historians have speculated that he might have had an undiagnosed respiratory disease.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
The Harvey Weinstein scandal rocking Hollywood has now spread throughout the American business world, with a growing list of firings and suspensions among high-profile men.
The allegations started in Hollywood, then spread to Silicon Valley, and after that engulfed New York City media circles. Harvey Weinstein’s downfall was just the beginning. The accusations, then firings, of many other powerful men have sparked a public conversation about an uncomfortable issue that rarely surfaces. And, at least for now, that’s created a very different kind of dialogue about sexual assault.
It’s difficult to keep track of the number of prominent men who’ve been accused of sexual misconduct in recent months. Bill O’Reilly. Roger Ailes. Harvey Weinstein. The wave of allegations has led to terminations, suspensions, and other consequences. But these recent actions do little to address the underlying issues that enabled men in power to get away with so much for so long, nor does public attention today guarantee meaningful change.
A trove of recently released documents confirms that Washington’s role in the country’s 1965 massacre was part of a bigger Cold War strategy.
In Indonesia in October 1965, General Suharto responded to the kidnapping and murder of six high-ranking military officers by accusing the Indonesian Communist Party (PKI) of organizing a brutal coup attempt. Over the months that followed, he oversaw the systematic extermination of up to a million Indonesians for affiliation with the party, or simply for being accused of harboring leftist sympathies. He then took power and ruled as dictator, with U.S. support, until 1998.
This week, the non-profit National Security Archive, along with the National Declassification Center, published a batch of U.S. diplomatic cables covering that dark period. While the newly declassified documents further illustrated the horror of Indonesia’s 1965 mass murder, they also confirmed that U.S. authorities backed Suharto’s purge. Perhaps even more striking: As the documents show, U.S. officials knew most of his victims were entirely innocent. U.S. embassy officials even received updates on the executions and offered help to suppress media coverage. While crucial documents that could provide insight into U.S. and Indonesian activities at the time are still lacking, the broad outlines of the atrocity and America’s role are there for anyone who cares to look them up.
Michelle Kuo’s Reading with Patrick avoids the educator-as-savior cliché and opts for a subtler portrait of her relationship with a troubled student.
In books and films about failing schools attended by poor students of color, a suspiciously upbeat plotline has become all too familiar. A novice teacher (usually white) parachutes in, overcomes her students’ distrust and apathy, and sets them on the path to college and worldly success. Such narratives are every kind of awful. They make the heroic teacher the center of attention, relegating the students to secondary roles. They pretend that good intentions and determination have the magical power to transform young people’s lives, even in the most adverse circumstances. And they treat schools as isolated sites of injustice, never connecting educational disadvantage to other forms of inequality.