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Fri Aug 04, 2006 at 10:28 AM PDT

The Day The System Worked

by Jared Bernstein

As the heat wave over Washington, D.C., finally lifts, it appears cooler heads have prevailed. I'd even go as far as to say our political system worked yesterday.

Last night, on August 3, the Senate defeated that devious bit of legislation that linked passage of a minimum-wage increase to a major reduction in the estate tax.

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Today's Employment Cost Index from the Bureau of Labor Statistics showed a pickup in the growth of compensation, to 0.9% in the second quarter of the year, compared to 0.6% in the first quarter.  However, consumer inflation was 1.3% in the second quarter, meaning compensation fell in real terms.
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Thu Jul 20, 2006 at 10:23 AM PDT

The Real Cut And Runners

by Jared Bernstein

Democrats have heard from a choir full of soloists about the challenge of regaining their lost dominance. For the most part, the tunes are pretty dissonant.

Democrats should spout big ideas. No, that would give their opponents a big target. They need a national electoral strategy. No, they should just focus on just a few key battles. They should take their opposition of the Iraq war to the public. No, that's "cut and run." They should get behind Senator Clinton, their frontrunner. No, she's too divisive.

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So, you want to be a conservative policy maker?  Repeat after me: Government bad. Markets good.

Say it again. Louder.

Government bad. Markets good!

I CAN'T HEAR YOU!

GOVERNMENT BAD. MARKETS GOOD!

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[Reposted from yesterday, but beefed up a bit.]

As a couples' therapist with a fledgling practice, imagine my surprise when I got a call from a high-profile couple claiming to desperately need my help.  They tearfully acknowledged that their relationship was in trouble as they continue to talk past each other, with ever-escalating bouts of miscommunication.

I recognized the man's voice--it was our president.  His partner, the American people, told me that like most couples, their problems came down to money.  They said they needed a therapist who was sensitive, empathic, knowledgeable about recent economic trends, and had a really huge couch.

As usual, I kept careful case notes.  As a public service, I present them below.

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As a couples' therapist with a fledgling practice, imagine my surprise when I got a call from a high-profile couple claiming to desperately need my help.  They tearfully acknowledged that their relationship was in trouble as they continue to talk past each other, with ever-escalating bouts of miscommunication.  
I recognized the man's voice--it was our president.
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Wed Jun 21, 2006 at 10:40 AM PDT

Shameless (Minimum Wage)

by Jared Bernstein

The House of Representatives was busy yesterday engaging in vicious class warfare against working families.
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Breaking: Republicans have blocked the vote on the minimum wage. This diary reflects earlier optimism about the debate.

*****

An increase in the minimum wage is once again hovering around the Congressional docket, as Democrats try to wedge it into various bills while Republicans try to sink it.

And once again, as reliable as clockwork, defenders and opponents are snapping into action, dusting off briefs and arguments, updating the analysis for inflation and generally doing the same dance we always do (I'm a defender).

There's got to be a better way.

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This past week, much to everyone's surprise, Democrats in the House of Representatives managed to slip a proposal to increase the minimum wage into a bill funding the Departments of Labor and Health and Human Services.

Faced with the specter of having to vote against increasing the wage floor from its current embarrassing level of $5.15 to $7.25 by Jan. 1, 2009, Congressional Republicans snapped into action and pulled the bill.

This is what these brave souls do in election season when they don't want to have to go back to their districts and answer questions as to why it's ok to cut hundreds of billions in rich people's taxes but deny the working poor a boost.

Well, I say: "Not so fast, guys.  Let's chat about this for a few minutes."

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The recent failure in the Senate to repeal the estate tax stands as a rare victory for sane fiscal policy.  The NYT editorialized about the event under the heading "What Passes for Good News."

In fact, the Senate vote came alarming close to ending a tax on inheritances of the richest half-a-percent of households, with a majority of Senators (57--but they needed 60 for a repeal) supporting a measure which would have cost the treasury $800 billion over 10 years at a time of ballooning budget deficits and war.

Of course, the politics of the repeal were the focus of most analyses--would the White House be adhered to or get rebuffed on an issue dear to them--but the economics of the tax cut are deeply revealing of the fundamental flaw of economic policy today.

And that flaw is this: we have, over the past three decades, shifted from we're-in-this-together (WITT) economics to you're-on-your-own (YOYO) economics.

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With their focus solidly on the gay marriage amendment and estate tax repeal, the conservative movement is busy rearranging deck chairs on...well, not quite the Titanic, but on a rotting ship of state.
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Tue Jun 06, 2006 at 05:30 PM PDT

The YOYO Handcuffs

by Jared Bernstein

Here's a test: name one economic policy, other than tax cuts, associated with outgoing Treasury Secretary John Snow.

Give up?

Now think about this: what is the economic policy of the Bush administration? What about the Congress? What about the Democrats?

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