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Dean BakerEarlier this week, we cross-posted a brief essay by one of the nation’s best economists, Dr. Dean Baker of the Center for Economic and Policy Research, in which he thoughtfully and professionally dissected and demolished the claims made by a Raleigh conservative think tanker in a Wall Street Journal piece. The think tanker’s central claim was that the state’s harshest-in-the-nation cuts to unemployment insurance had spurred all kinds of wonderful economic results in North Carolina.

Apparently not content to be put in his place just once, the think tanker posted a fairly snarky attempt at a response yesterday and today, with an almost audible virtual sigh, Baker took to his keypad (and the CEPR blog) to provide a few more lessons in basic economics. We’ve cross-posted his addendum below:

Addendum:

I see John Hood has replied to my post. Apparently he thinks that if we play games with the start and end dates we can say cutting benefits worked.

Okay, I don’t know what games they play in North Carolina, but let’s just remember what is at issue. The argument for cutting benefits was that if the state pushed people off unemployment insurance (UI) they would be motivated to get a job. We know that North Carolina pushed lots of people off UI. The question is whether there is any evidence this led more people to get jobs.

That gives us two numbers to focus on, Read More

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Dean BakerIn case you missed it, be sure to check out the latest from one of the nation’s sharpest economists, Dr. Dean Baker on the one-year anniversary of North Carolina’s harshest-in-the-nation cuts to unemployment insurance. In a post that originally appeared on the website of Baker’s Center for Economic and Policy Research, Baker specifically takes one of North Carolina’s right-wing think tank denizens to task for his recent column in the Wall Street Journal celebrating the cuts.

As Baker notes, the local pundit is simply and plainly wrong in his contention that the cuts are responsible for a job boom in the state — or that such a boom is even occurring: Read More

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As Dean Baker notes this morning, the national economic news is encouraging. In addition to the record high Dow Jones average, Baker points out:

“The economy added 288,000 jobs in June, making it the fifth consecutive month in which the economy added over 200,000 jobs. This is the longest stretch of 200,000 plus job growth since before the recession. The job gains were broadly based. Retail was the biggest gainer, adding 40,200 jobs, with professional and technical services adding 30,100 jobs. Manufacturing added 17,000 jobs for the second month in a row.

The news was also positive in the household survey with the unemployment rate falling to 6.1 percent, a new low for the recovery. This was due to people entering the labor force and finding jobs; the employment-to-population ratio rose to 59.0 percent. This is a new high for the recovery, but still 4.0 percentage points below its pre-recession level. Another piece of positive news is that the percentage of people who are unemployed because they voluntarily quit their jobs rose to 9.0 percent, the highest since the collapse of Lehman. This is a sign of growing confidence in the labor market.”

Unfortunately, the economic news is not so encouraging in North Carolina. As Allan Freyer of the Budget and Tax Center pointed out in a news release on Tuesday: Read More

NC Budget and Tax Center

We keep hearing that North Carolina’s economy is turning around. But while it’s true that we’re slowly making progress in replacing the jobs lost during the Great Recession, the bad news is that the overwhelming majority of these new jobs just don’t pay enough to make ends meet. In fact, many don’t pay enough to keep workers out of poverty, despite working full time. Check out the latest Prosperity Watch for details.

NC Budget and Tax Center

Sharon DeckerThe unfortunate quest to privatize the state’s business recruitment and job creation efforts took a big step forward yesterday, when the Senate agreed to a House proposal creating a new nonprofit partnership to oversee much of the state’s economic development efforts.

This misguided proposal is a bad deal for North Carolina taxpayers, businesses, and workers—schemes for privatizing economic development have repeatedly proven to be ineffective at job creation, wasteful of taxpayer dollars, and prone to financial mismanagement, conflicts of interest and pay-to-play incentive granting, and the inability to raise private funds in many of the states where they’ve been tried.

The only good news is that the General Assembly finally ended up supporting the House-passed measure, which includes somewhat better taxpayer protections than the original Senate measure.

Perhaps most importantly, the House bill did not include a new incentive program for the film industry, an extra policy tacked onto the Senate version two weeks ago. Given ongoing controversy over the effectiveness of film incentives, the Commerce privatization bill was just not the appropriate place for creating an entirely new incentive program.

A second important improvement over the original Senate measure involves the inclusion of new ethics rules. While the Senate suggested allowing the new nonprofit to develop and implement its own code of ethics—potentially creating legal loopholes for problematic ethical behavior—the final House bill requires that all board members, officers, and staff members remain subject to the existing state ethics act, just like all other state appointees and employees. This will protect taxpayers from the kinds of ethics scandals that have plagued other states’ privatization efforts, as in Wisconsin, Florida, and Texas.

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