Economic Creationism is the New Science

perry godIowa has joined the ranks of crazy, putting first in a straw poll someone out to destroy social security and medicare. This agenda would lead to the biggest increase in abject poverty the United States has ever seen. Meanwhile, Texas Governor Rick Perry is being touted as the new savior of the radical right, proof positive all economic theory comes from God.

This fundamentalist radical right is nothing new. The Tea party is simply the moral majority, wrapped in a new bow.

What is new is the bold faced economic fiction being spun right, left and center. It's like the idea that Creationism is equal to Evolution and the biological sciences has invaded the world of Economics, Mathematics and Statistics.

We are re-entering the dark ages. Down is up, left is right and if you float in water, you must be a witch. Most economists know in a severe recession increasing government spending to take up the slack in demand is a good thing to do. Yet, a group of crazies have kidnapped the national discourse and demanded public policy to cut government spending in a time of very weak economic demand. Once again, up is down and down is up.

Since when can one destroy an entire nation's retirement, income and health and claim this is good for America? That is the absolutely worst thing for America. From the NBER:

$1,000 increase in Social Security benefits is associated with a 2 to 3 percentage point reduction in poverty rates for elderly households. They also find no statistically significant effect of benefits on income inequality, suggesting that higher-income and lower-income elderly benefit similarly from increases in Social Security.

Applying this estimate to the change in Social Security benefits between 1967 and 2000 suggests that the increase in benefits can explain all of the 17 percentage point decline in poverty that occurred during this period. The authors also find that higher benefits lead some elderly to live independently rather than with family members, and conclude that the effect of Social Security on poverty would have been even more dramatic in the absence of these changes in living arrangements.

Under the guise of being lead by Jesus, Governor Perry as an example, let a Chinese corporation deemed a security risk operate in Texas.

Three times since 2008, a U.S. government security panel has blocked Huawei from acquiring or partnering with U.S. companies because of concerns that secrets could be leaked to China’s government or military.

Everyday, we see bold faced economic fiction being spun on cable news and some in the press, Fox and Forbes being the two most guilty.

Texas is being declared an economic miracle. Yet anyone can quickly calculate a few facts on Texas. Guess which the largest industry in Texas was in 2010? Government. I kid you not, from the BEA:

In 2010, the largest industry in Texas was government. This industry accounted for 11.8 percent of Texas GDP and had 1.7 percent real growth. The second largest industry was mining, which accounted for 9.5 percent of Texas GDP and had 0.8 percent real growth.

The largest contributor to real GDP growth in Texas was durable goods manufacturing. This industry accounted for 0.60 percentage point of the total growth in real GDP. The second largest contributor was wholesale trade. This industry accounted for 0.39 percentage point of the total growth in real GDP.

Since January 2010 to June 2011, Texas has gained 505,100 jobs. Nationally, jobs gained are 1,792,000. Texas has gained 28.19% of the total jobs created. Seems like a lot, yet in determining what type of jobs we get, they are mainly crappy jobs. Trade, transportation and Utilities includes Retail trade, which are as a whole, low paying service type of jobs.

The BLS gives a breakdown in Texas job growth for the last 12 months. Texas was 8% of the national civilian labor force in June. What one notices is a boom in mining and logging, a 17.2% increase in employment, yet bear in mind Texas has a large oil industry. Construction employment, which nationally is on death's door, saw a 4.6% increase over the last year in Texas. Below is a comparison of Texas June payrolls statistics versus national. You see they are about par with the national average, also matching their overall payrolls, with the exception of mining and construction.

 

texasvsus.jpg

 

The Texas resident population also grew by 442,794 in 2010. Nationally, the U.S. population grew by 2.612 million. Texas, was 16.95% of the total U.S. population growth. The Texas unemployment rate for June was 8.2%, nationally, 9.2%. Per capita personal income in 2010 was $39,493 for Texas, nationally it is $40,584. GDP growth for Texas was 2.8%, yet Texas was actually beaten by socialist comrade Oregon, which grew by 3.4%.

 

gsp_0611.jpg

 

Bottom line, the Texas miracle is another myth being presented to justify destroying further social safety nets. This seems to be a call to arms by the radical right like the middle ages crusades. Destroy America's social safety nets at all costs is the radical rights' slash and burn chant and mantra.

Lest we think economic fiction is unique to the radicals taking over the right, the left has it's own spinners, most often through corporate lobbyists. It's so bad, many of them are now in the White House.

Take, for example, the claim that more bad trade deals will create jobs and squeezing out the little guy on patents will too. That's pure, absolute hog wash. Yet, the claims go unchallenged by the major press and seemingly you can spin a tale completely and get away with it on most news outlets.

Returning to the age of enlightenment will be a a difficult road. The church of free trade is strong and anyone who dare speak against globalization are often shunned and academically excommunicated. Add to that some serious crazies claiming they are acting as the hand of God, with a belief job creation is delivered by divine intervention. Chant the mantra free markets are the new savoir, and what do you get?

Dark clouds shadowing America's future. For all reasoning people, keep those calculators and spreadsheets hidden, for just like eyeglasses were a justification for Cambodian genocide, these days, running statistics and numbers might just get you burned at the stake.

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Comments

What about Grassley? And Ron Paul?

It's strange. Chuck Grassley tends to be a populist and a pragmatist, not a dogmatic anything. The other U.S. senator from Iowa, Tom Harkin, is known more-or-less as a progressive Democrat.

So those are the guys Iowans actually have elected in one election after another for several decades now.

And, on 4 November 2008, Obama won Iowa with a 9.5% margin of victory.

What is this Ames Straw Poll anyway? Of what significance is it, if any?

Maybe it'd be a good idea to have these things at every county fair across the country, standard, like the hog show. There's a little money in it -- the TV crews have to eat and drink somewhere and maybe even stay at a motel. Yeah, let's have these things rotate around in each state! It's like an industry. Fifty of them every summer in all the off-election years.

From what little I have heard, the real news, if any, coming out of Iowa is that Ron Paul darn near won the straw poll. Effectively, it was a tie. But is that the news?

My impression is ... no, Ron Paul, NOT news.

Since I don't get any TV news, I googled around and found that the news on like CBS was that Bachman won, Romney was jeered by a bunch of hayseed Iowans, and MOST IMPORTANT OF ALL, the whole thing in Ames was "overshadowed" by a guy who did not bother to come to the party!

Ron Paul? Nah, not news.

I'm not about to break down and cry crocodile tears, but I can't help but laugh ... not at Rep. Paul ... but, I think, with him.

News? That's a good one!  laugh wink laugh laugh laugh

 

BTW: Thanks for analysis of the 'Texas Miracle' ,,, largest growth industry in 2010 ... government. Another good one!

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Chuck Grassley, Harkin, Ron Paul

Chuck Grassley has done many things out of the box and is one of the few who stands up for U.S. STEM workers routinely. Harkin seems to be nowhere in terms of addressing clearly, obvious, practical economic issues, like many Democrats.

I'm not a Ron Paul fan. It's great he confronts the Fed and he has a lot of outside the box perspectives, but the reality is he's another "oh free markets" yet when it comes to social issues, magically his libertarian philosophy flies out the window. The realty America really cannot afford to be the globe's military police is clear, but when those cuts come, they too, will throw hundreds of thousands, if not millions out of a job.

More what this post is about is letting absolutely inane, crazy, nonsensical economic agendas being presented as truth. These are not truths! I've literally heard the major news networks claim "Obama needs to introduce a deficit reduction plan to create jobs".

Deficits, budget cuts especially right now, and especially because they only focus on the poor, middle class, discretionary spending, (although cutting SS, Health will decimate most Americas if benefits are cut), will reduce GDP, reduce jobs, not create jobs. We are nowhere near the types of deficits that could tip and negatively impact a national economy.

Worse, if they paid attention to facts, the details, we could have so many jobs this entire discussion wouldn't be here. If this government did the things necessary, including passing tax increases, we wouldn't even be talking about deficits at all, because there wouldn't be any.

The entire political field claims to be worried about China trade deficit, yet they do nothing, nothing at all, about it.

Lest we not forget campaign promises are just to win, think Obama claiming to reform NAFTA and other trade deals. They had no intention and it was obvious at the time, to deal with this never ending tradable workforce, cheap labor, race to the bottom effects of these bad trade deals, or even the nonsensical tariffs of China against the U.S.

These people have somehow tried to claim that deficit reduction will create jobs. There is zero evidence to that, in fact the opposite. Instead of jobs, economic growth and all of the policy bonehead moves that are killing the U.S. economy, such as bad trade deals, offshore outsourcing, the entire discourse, that is pure fiction, is being parlayed everyday in the MSM and by these people.

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Facts Have No Place

Facts, we don't need no stinkin facts. Corporate controlled media and plutocrat controlled Evangelicals feed the sheeple all the $h!T they need to know. The Chamber of Commerce controls both political parties and the Supreme Court...it's checkmate.

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Odin

Hollowing of Texas Economy is Part of the Hollowing of America

Texas economy is much worse if you factor out the increases in oil prices from manufacturing in the last 4 years. Without a quadrupling of oil prices, Texas would be nearly flat. Next take a look at Information jobs - hardly any crated in a state with TI, IBM, Samsung and Dell. Possible only when you look at Huawei
and the offshoring of Tech manufacturing.

So much offshoring that in 1980, all consumer IT was made here, now all consumer IT is imported.

The jobs actually created in Texas are not mysterious when you understand where the population increase originates: the border. Texas increased its number of minimum wage jobs by 50% in the last five years. IT jobs
hardly budged.

Will Perry also brag about the second worse student performance on standarized tests? Or having the highest percentage of medically uninsured. If he wants to hold out his record, he will be proven the red-neck con-man
many have figured out already. But we are forced to pay attention to this bozo because there is big money behind him and because the handicappers give him good odds.

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Burton Leed

state economies vs. national

No doubt more articles on various state economies is in order for the housing collapse hurt some states much worse than others. But in doing the above quick calculations, it does appear the oil/gas industries are helping Texas.

Crappy jobs are nation wide, which I linked to one overview of a researcher's paper on that and can also look into one nation wide since the "end of the recession".

I don't want to discount tax codes and incentives for job creation, yet, at the same time, Florida has no income tax and extremely favorable business taxes, so why wouldn't companies do a mass exodus to Florida if it's just the tax code?

Bottom line, Texas is not this great miracle, for each regional economy is different, different industries, Texas is a border state, so lots of NAFTA traffic (as well as other ;0) coming up through Texas.

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Angry Bear on Perry, Texas

Looking over the EP side bar, I see two current Angry Bear links on Perry and Texas 'miracle' --

Challenging Perry on his numbers used in praise of Texas tort reform law

 

and

 

from Angry Bear on the Texas 'miracle' --

"Growth only slightly lower than Michigan's" should be a great campaign slogan.

-- [based on table ranking states, shown at Angry Bear]

And comment there by 'jazzbumpa' cites to a Texas Legislature PDF saying that

Among the 50 States, Texas is dead last in high school graduation.  
38th in payroll earnings  
50th in worker’s comp  
Second in birth rate  
Seventh in teen birth rate  
First in uninsured children  
Fourth in children living in poverty  
First in uninsured population  
49th in low income covered by Medicaid  
47th in both household net worth and retirement plan participation.  
First in CO2 emissions, VOC emissions, toxic chemicals in the water, and air-born carcinogens  
First in executions  
45th in voting rate 

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Texas Brought Us Bush

You're forgetting gas industry.  Fracking. 
 
Sure Texas sucks but people should pull up California, IL, NY and FL to be fair. 

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First in fracking?

Anon. says "You're forgetting gas industry. Fracking."

... but that was included by reference to toxic pollution of water table and also air pollution.

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The Stats

This is a good collection of the statistics in a single document. I think the notion of a 'war' is an appropriate one in the context of what is happening. The stats are scary and extrapolating them is even scarier I think. One observation in the paper is that the US spent more on prison construction than on homes for the poor - if you want a home go prison.

http://ampedstatus.org/download-free-pdf-kindle-word-doc-of-full-report-...

As for the right wing religious nutters they are scary.

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