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Judging by the polls, many voters seem to think it's a coin-toss when it comes to jobs and the economy. As Stevenson and Wolfers write:

Watching Democrats and Republicans hash out their differences in the public arena, it’s easy to get the impression that there’s a deep disagreement among reasonable people about how to manage the U.S. economy.

Nothing could be further from the truth.

In reality, there’s remarkable consensus among mainstream economists, including those from the left and right, on most major macroeconomic issues.

They're right. They cite a survey by the University of Chicago, showing 92 percent of top-ranked economists say the 'stimulus' lowered unemployment.

That's where this article starts. As you'll see, the success of the stimulus is just one of many 'consensus views' among economists. When you put them together, they make a clear, compelling case for sticking with the President's policies.

I focus here on 6 areas where economists agree:
The Recovery Act ('Stimulus') was a success, part of a historic turnaround.
The American Jobs Act should be passed at once.
The economy needs MORE federal spending, not LESS
Repairing and upgrading our infrastructure is job 1
Lower tax rates on top incomes make things worse, not better, as in:
The income gap, which fueled this crisis, is a big drag on growth.

Economists Agree: Obama Is Right On the Economy

1) The Stimulus Was a Success

The Univ. Of Chicago asked a panel of leading economists, Republican and Democrat, if the Recovery Act lowered unemployment. Nearly all of them, 92 percent, said that it had.
That's right, 92 percent of the most lauded, frequently consulted economists in America said the stimulus succeeded in reducing unemployment!

Job growth went from -800,000 per month under Bush to an average net gain of 160,000. That's a turnaround of nearly 1 million jobs per month! A historic achievement that gives tangible meaning to change we can believe in.

2) Building on Success: Economists Support the American Jobs Act

Moody’s Analytics estimated the American Jobs Act would create 1.9 million jobs and add 2% to gross domestic product.
The Economic Policy Institute estimated it would create 2.6 million jobs and protect an addition 1.6 million existing jobs.
Macroeconomic Advisers predicted it would create 2.1 million jobs and boost GDP by 1.5 percent.
Goldman Sachs also predicted it would add 1.5% to GDP.

3) Economists say Don't Stop Now: More government spending is needed, not less.

Policy advisers to Presidents Reagan, Bush and Clinton, Nobel prize winners, IMF and World Bank analysts, private forecasters, Goldman Sachs, Forbes...The Consensus is clear: our economy needs MORE Federal spending, not LESS. The UN's top economists warn austerity policies are pushing the world economy toward disaster. “Unemployment depends very much on demand. If you have no demand, you need government to step in with a huge program to stimulate the economy.”

4) Economists and Obama: US job 1 is repairing and upgrading America's crumbling infrastructure.

Bold, far-sighted government spending built the America we know today. Highways and airports, roads, bridges and waterways, levees and dams, waterways and seaports, phone lines and power lines, new sources of energy and a new power grid to deliver it. Our standard of living and decades of prosperity were built on that foundation. Today that foundation is crumbling.

The American Society of Civil Engineers Report Card:

Aviation: D
Public Parks: C-
Bridges: C
Rail: C-
Dams: D
Roads: D-
Drinking Water: D
Schools: D
Energy: D+
Solid Waste: C+
Hazardous Waste: D
Transit: D
Inland Waterways: D-
Wastewater D-
Levees: D-

 America's Infrastructure GPA: D

The ASCE is calling for a 5 year, $2.2 trillion dollar program to repair, rebuild and update our infrastructure, beginning immediately. That's $400 billion a year, every $1 billion dollars of which will create 23,000 jobs. That translates into 9.2 million jobs a year.

Enough to bring the unemployment rate down to the 5.4% President Obama predicted was achievable.

That's before you count the job growth created indirectly, by the multiplier effect and sharp reductions in the cost of living and doing business in America. No other investment would do more to boost America's competitiveness.
The dollar cost of our failing infrastructure is so high, the return on that $400 annual investment will dwarf its cost. No wonder business economists around the world are urging America to make it. Investments with that rate of return make buying our debt very attractive.

Those costs include:  transportation delays, energy waste, pollution, auto accidents, negative health impacts and rising health care costs, vast amounts of time lost to longer commute, increased costs of living and doing business, declines in tourism, declining competitiveness, needless loss of lives, homes and businesses to disasters like Katrina and Sandy.

$400 billion dollars a year is nothing.

Then there's the cost of a construction industry that has been losing 7 workers for every 1 who finds a job. Two million or more unemployed is probably conservative.

A good share of the funds in President Obama's Recovery Act went to 'shovel ready' infrastructure projects, which contributed to its postive impact on job growth as well as putting infrastructure on the nation's agenda at the start of his term. Again, not a single Republican vote. Every subsequent infrastructure spending bill was blocked by united Republican opposition.

When it comes to government spending, Republican enthusiasm is limited to spending on the military – Romney wants $2.2 trillion more. We already spend more than the rest of the world combined.  Countries like China that are growing their middle class and positioning themselves to thrive in the 21st century economy are making their largest investments in – you guessed it – infrastructure.

Infrastructure spending creates more than twice as many jobs as defense spending.. There are a number of studies on this.
Infrastructure versus military spending. The contrast couldn't be more dramatic, or the choice more obvious to any real businesman. The trillions of dollars the Bush administration spent – off the books – on two wars have no return. The money's spent, you're left with nothing.

5) Lower Tax Rates on Top Incomes – The Problem, Not the Solution
Tax cuts on top incomes likewise produce no return. A study by the Congressional Research Service reviewed tax, investment and growth data beginning in 1945, the first year for which they're available. Their analysis showed tax reductions on top incomes do not increase investment or growth.

In fact, growth has consistently been more robust during periods when top tax rates were higher.

Instead of making the economic pie larger, the CRS found, reductions on top tax rates change how the pie is sliced, concentrating income at the top.

6) Obama Is Right:  Our Economy Grows More When We're Growing Together.

The effect of income inequality on economic growth is negative. That's the conclusion of a number of studies that have closely examined this issue, including studies by the International Monetary Fund, the OECD (a body representing the world's wealthiest countries), and leading academic economists.

The world's greatest authority on the subject is  Nobel prize winner and former Clinton adviser Joseph Stiglitz, who writes:

“Inequality is now far higher than just 30 years ago. The top 1 percent today gets around 20 percent of the nation’s income — twice what it did two decades ago. The top 0.1 percent’s share has almost tripled. Disparities in wealth are even greater.
 “But inequality, especially of the U.S. variety, is bad for growth. The country grew faster in the decades after World War II — when it was also growing together, with all groups seeing increases in income. But those at the bottom were growing the most.
“By comparison, growth since 1980 has been slower, as the share of the bottom and middle has diminished. That means that those in the middle, ordinary Americans who work for a living, let alone those at the bottom, are getting a smaller slice of a pie that is smaller than if we had continued growing as we did postwar. The net result is disheartening: Most Americans are worse off today than they were 15 years ago.”
Professor Robert Reich, Secretary of Labor under Bill Clinton, points out that income inequality in America peaked in 1929 and in 2007 – just before massive economic contractions.He has a lot of company. In fact, you'd have to stop reading the newspapers not to see this connection being made, again and again and again.

The International Monetary Fundwarns that income inequality makes the economy more fragile, periods of growth shorter, and recessions more frequent. Conversely, reducing inequality increases the span of economic recovery, stabilizing the economy. The IMF estimates that a 10% reduction in income inequality extends periods of sustained growth by 50%.
This is where we came in.
President Obama's policies are as needed in our time as President Roosevelt's were in his.
Roosevelt struggled for a time, too.
America didn't toss him out and send Hoover back to Washington.

We can rev up this recovery and bring unemployment down quickly, by:
1) Giving Obama a 2nd term, and
2) Putting pressure on Congress to follow his lead.

Fri Nov 02, 2012 at 12:33 AM PT: I just read in today's NYT: Senate Republicans have suppressed a report by their own Congressional Research Service, because the findings show that tax cuts for the rich don't boost the economy.

I reference that report in this piece.

Here's the NYT article about it being suppressed, if anyone's interested.

http://www.nytimes.com/...

Fri Nov 02, 2012 at  9:11 AM PT: The best article on the stimulus - by far - is at:

http://www.time.com/...

This easy to read article unpacks the stimulus revealing it to be the most ambitious and timely investment in America since the New Deal.

A great one to share.


Originally posted to Paul Schaafsma on Thu Nov 01, 2012 at 07:29 PM PDT.

Also republished by Community Spotlight.

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Comment Preferences

  •  They Hadda Wait For a Historic Hurricane and (2+ / 0-)
    Recommended by:
    MJB, fumie

    their client party finally revealing what they stand for, to at long last, speak up?

    Where the hell have these assholes been for 45 years?

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Nov 01, 2012 at 07:37:03 PM PDT

  •  Would you mind linking to your primary sources? (2+ / 0-)
    Recommended by:
    RandomNonviolence, Odysseus

    Nice post – would love to see attribution.

    'Fie upon the Congress' - Sen Bob Byrd

    by Maxwell on Thu Nov 01, 2012 at 07:38:16 PM PDT

  •  I don't see the link yet... (3+ / 0-)

    but I believe this is it from Bloomberg News:

    Betsey Stevenson & Justin Wolfers

  •  Nice information, but needs links to any (1+ / 0-)
    Recommended by:
    Odysseus

    facts or cited material.  This is good information.

    Small acts, when multiplied by millions of people, can transform the world.~ Howard Zinn

    by ParkRanger on Thu Nov 01, 2012 at 08:29:09 PM PDT

  •  Excellent summary. And a public works program ... (5+ / 0-)

    An ambitious public works program should be a centerpiece of the President's second term, because ...
    -Our infrastructure cries out for repair and upgrading;
    -It will create lots of jobs, all of them here in the US;
    -It might almost pay for itself with the increased tax revenues from a reviving economy;
    -Although Republicans opposed it last session out of electoral calculations, GOPers have supported such efforts often in the past, and wouldn't have to make radical alterations in their ideology to support it now. Indeed, all but a few very doctrinaire Tea Partiers would see the benefit of bringing gravy to their home districts - public works as incumbent protection. (That's not altogether a good thing, but would make the program easier to sell once the "1-term Obama" plan has been thwarted.)
    -By promoting infrastructural improvements which are "disaster-resistant", we could promote response to climate change without calling it that. (We will still need to address climate change directly in order to combat its human causes.)

    "If a nation expects to be ignorant and free, it expects what never was and never will be." - Thomas Jefferson

    by Blue Boomer on Fri Nov 02, 2012 at 07:30:56 AM PDT

  •  Bush and Greenspan created a housing boom (5+ / 0-)

    by creating a housing bubble.  It created false jobs.  Just think of it, if Bush has not cut taxes and not taken us into Iraq and instead used the money to create jobs through the wholesale rebuilding of our infrastructure, where would we be today.  I cannot believe the American people are even considering reinstalling another Republican, Wall Street criminal.  It just makes me despair for my country.

  •  $400 billion a year? Rounding error at Pentagon (1+ / 0-)
    Recommended by:
    Paul Schaafsma
  •  C+I+G=GDP (2+ / 0-)
    Recommended by:
    Paul Schaafsma, Karl Rover

    The Consumer (C), Investor (I) and the Government (G) must work in a balanced harmony to grow the Gross Domestic Product (GDP).

    When one or more of the factors are idle, GDP contracts.

    The control valve in the equation is Government.

    Since we currently have a Congress that wants to remain idle, Consumers and Investors are only marginally capable to move the GDP positively, without significant help from the Government.

    *Austerity is the opposite of Prosperity*

    by josmndsn on Fri Nov 02, 2012 at 09:33:42 AM PDT

  •  They've been agreeing on it since 2009 (2+ / 0-)
    Recommended by:
    Paul Schaafsma, Thornrose

    Hasn't stopped the Republican narrative from winning over the low-information voter.  Just say the word "debt" and it may as well be raining frogs while sandwich-boarded prophets of doom stand on street corners ardently foretelling the end times.

    Until someone can come up with a 30-60 second primer in macroeconomics at an 8th grade level and get it aired during the evening news 15 times per broadcast for 18 months, this is going to be an ongoing fight.  Because apparently that's the only way any message is ever absorbed by the public.

    I'll believe corporations are people when one comes home from Afghanistan in a body bag.

    by mojo11 on Fri Nov 02, 2012 at 09:41:11 AM PDT

    •  How to make the case so public can understand (1+ / 0-)
      Recommended by:
      RandomNonviolence

      I think its very doable.

      When people have no money, they cannot spend.

      Everybody says this is the problem, in a nutshell, and its very intuitive.

      Romney's 'job creators,' small business people, say what's stopping them from hiring is low demand.

      So do business economists.

       We can raise demand right now by following 2 simple steps:

      Passing the Jobs Act, for 2-3 million more jobs.

      Helping state and local governments get back and hire new teachers, firefighters, first responders, police, to keep public spending growing at the same rate as it did under Bush, and make America a more secure and prosperous place.

      People would get that.

      Unemployment would be at or below 5.4% with these investments, even before adding in the big infrastructure program America needs.

      A very effective way to communicate is storytelling. We should be telling the story of America after WWII, with deficits 3 times the size of today's (as a percent of the economy).

      Robert Kutner's a good storyteller.

      Postwar leaders, unlike today’s deficit hawks, were wise enough not to panic about the large war debt (twice today’s size relative to the economy) but continued such public investments as the GI bill, low-interest home loans, and the interstate highway system. Rather than suffering an austerity scheme that would have made debt loom larger, the postwar boom enabled the economy to grow its way out of debt.
      Here's another story to tell: more than once, Repubs have used filibuster or other tricks to block a mere $1 billion to help veterans get jobs, training, etc.

      Americans know that's despicable. We don't reward our veterans with joblessness and indifference.

      So I think, myself, that its possible to communicate these things in a way that even busy, stressed, overworked parents can hear and understand.

      My two cents.

  •  Thanks and a well written summary, but (0+ / 0-)

    while the article you cite gives me some hope, I am not ready to let the economists off the hook yet for their contribution to this mess.  See this admittedly unscientific survey of economists by The Economist.  About 50% of the respondents were independents.  Of those independents, more than 60% thought that Romney had a better grasp of economics than Obama or there was no difference between the two and again more than 60 % thought that Romney would grow the economy faster or there was no difference between the two.  Maybe  the difference is that the Chicago survey was of a leading panel of economists.

    A Roosevelt Republican: Honest government, walk softly and carry a big stick, national health care, protect the environment, physical fitness, and kick a** on Wall Street. Simple truths that 100 years later we are still struggling to get right.

    by Paradigm Change on Fri Nov 02, 2012 at 10:23:22 AM PDT

    •  Economist Article and Romney Economists (1+ / 0-)
      Recommended by:
      RandomNonviolence

      Yep, only the forecasters if I read it right.

      There's always a dissenting view. But the consensus amonog those who actually study these things is close to unanimous.

      Wolfers is right - the Romney argument is counter-factual. It doesn't surprise me that the contrarians are forecasters.

      In the infamous 47% of Americans are moochers video, Romney tells his wealthy donors that the economy will rebound when he's elected without him doing a thing.

      That's the old business confidence argument, and its bullshit. Production won't increase, small businesses won't hire, if there's no demand.

      I can't be sure, but these forecasters may well be focused not on the real economy, but on speculation - the kind of speculation that brought on the financial crisis.

      Romney's tax policies speficially favor that over actual investments that create jobs, which do not create the bizarro returns that financial weapons of mass destruction do.

      Notice the focus on deficit cutting, which is horrible economic policy in an economy where demand is depressed (unless its done with tax increases and defense cuts - consumer spending creates more jobs than defense spending).

      Who is still focused on deficits when austerity policies are pushing the world economy toward disaster?

      Reading this article in its entirety helps clarify it - the austerity pushers pay little or no attention to real demand, and their assessments, as a consequence, as worthless.

  •  For an excellent book on the Recovery Act (2+ / 0-)

    I recommend "The New New Deal" by Grunwald.
    You'll be impressed with how much was done, the speed, & over-sight. And reminded of just how crippling the Senate's filibuster rules were.

    Warren is neither a Clintonesque triangulator nor an Obamaesque conciliator. She is a throwback to a more combative progressive tradition, and her candidacy is a test of whether that approach can still appeal to voters.-J. Toobin "New Yorker"

    by chuck utzman on Fri Nov 02, 2012 at 11:01:32 AM PDT

  •  Your analysis is spot on! (0+ / 0-)

    What would you think of a massive infrastructure program paid for by a temporary (10 year) surtax on the top 10% geared to raising $1 trillion / year?

    The surtax would be on all income, not just wages, and would admit of no deductions or tax breaks of any kind.

    Granted, this would represent a very large tax increase for the wealthy. OTOH, it would give them the opportunity to become genuine (albeit unwilling) job creators.

    It would be rational to be suspicious of sudden radical changes in the economy. Perhaps such a program could be implemented in gradual steps in order to gauge its effect on the economy.

    Job creators?? Imagine what George Carlin would do with that. -7.25 -6.21

    by Tim DeLaney on Sat Nov 03, 2012 at 06:57:28 AM PDT

    •  Just a "response to climate change" fund which (0+ / 0-)

      would be aimed at repairing damage from Sandy etc. and at fixing problems exposed by these disasters would be a pretty significant stimulus.

      You can't make this stuff up.

      by David54 on Sat Nov 03, 2012 at 09:13:10 AM PDT

      [ Parent ]

  •  I think the gop and Romney camp have made our (0+ / 0-)

    case:
    David Walker, David Brooks and others have started saying that a Romney victory is necessary because it looks like the Dems aren't going to take back the House, so if Obama is re-elected, there's still no chance the gop House is going to co-operate with him.

    In other words, reward the gop for their obstructionism.
    Give in to their extortion.

    I think the Dems should have been making a stronger case nationwide that the House must change hands. However, I think, in these last few moments before the election, Dems can use the gop argument against them and make that case. The situation has been made very fluid, in a Dem direction, by Sandy and by Romney's last-ditch flailing and lying on Jeep, etc.

    I think there's a chance it can happen, here at the last minute.

    You can't make this stuff up.

    by David54 on Sat Nov 03, 2012 at 09:09:41 AM PDT

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