NDN Blog

False Choices in Polling on the Economy: Unemployment Benefits vs. Deficits

A few weeks ago, I took a look at an Economist/YouGov poll and pointed out that, contrary to conventional wisdom, the American people generally see budget deficits as a less important issue than the economy as a whole. Now the Arthur Delaney at the Huffington Post rounds up some of the latest polling data, which says something similar on the specific issue of unemployment benefits:

Two national polls released Tuesday revealed that registered voters think it's more important to help the unemployed than to reduce the deficit.

Voters are generally wary of government spending to boost the economy, but they nevertheless told ABC News and CBS News that the deficit is no reason not to help the unemployed.

Fifty-two percent of voters told CBS that Congress should extend unemployment benefits "even if it means increasing the budget deficit," including 35 percent of Republicans. Sixty-two percent of registered voters told ABC Congress should extend benefits despite concerns that doing so "adds too much to the federal budget deficit."

In a Bloomberg survey, 70 percent of voters said reducing unemployment is more important than reducing the deficit. But only 47 percent said Congress should reauthorize extended benefits, which in some states provided the unemployed with up to 99 weeks of checks.

A poll commissioned by the National Employment Law Project in June found that 74 percent of voters think helping the unemployed is more important than reducing the deficit.

Of course, what these polls fail to note is that the choice laid out in the questions is a false one. Extending unemployment benefits will have virtually no long-term impact on the deficit. For example: the ABC News question raises the concern that extending unemployment insurance "adds too much to the federal budget deficit." 

Here’s how the questions in the ABC News poll was written:

Because of the economic downturn, Congress has extended the period in which people can receive unemployment benefits, and is considering doing so again. Supporters say this will help those who can’t find work. Opponents say this adds too much to the federal budget deficit. Do you think Congress should or should not approve another extension of unemployment benefits?

I wonder what would happen if, you know, facts were included in the question:

Because of the economic downturn, during which there is currently one job opening for every five unemployed workers, Congress has extended the period in which people can receive unemployment benefits, and is considering doing so again. Supporters say this will help those who can’t find work, is one of the most efficient ways to spur the economy, and that not doing so could imperil economic recovery. Opponents say this adds too much to the federal budget deficit. Virtually all economists believe that these benefits should be extended and that doing so will not add too much to the federal budget deficit. Do you think Congress should or should not approve another extension of unemployment benefits?

Actually, I don’t wonder at all.

Obama Administration Moves Forward on International Economic Policy


NDN applauds last week’s announcement by the Obama Administration on its intent to renegotiate and push for Congressional approval of the Colombia and Panama Free Trade Agreements (FTAs). This announcement follows a similar one from June regarding an FTA with South Korea.

Taken together, these FTAs represent both a legacy of failure on the part of the Bush Administration to create a robust conversation and political consensus around America’s place in a changing global economy and the need for the Obama Administration to clear the decks on the trade agenda in order to move forward. 

Each agreement would expand American access to foreign markets in economically dynamic and geopolitically crucial regions. South Korea, the world’s 14th largest economy, has recently undergone a rapid and impressive economic transformation and is a market the U.S. has good reason to be strongly interested in gaining better access to. Panama and Colombia are both important allies in a region that remains economically significant but politically troubled. While individual, realistic concerns about each agreement exist, the Administration has declared its intention to address them, and, in virtually every case, the partner nation has taken steps to do so as well. 

Over the past two decades, the global economy has gone through a rapid transformation. New nations, businesses, and people are playing increasingly important roles, and American and global economic policy must adapt to these changes. A 21st century strategy for global economic engagement must be a cornerstone of America’s overall economic strategy – alongside healthcare, financial services, immigration, and energy reforms. We applaud the administration for its leadership in this area, as exemplified by both the National Export Initiative and the renewed emphasis on these agreements.


June Jobs Report Indicates that US Economy Has Long Way to Go

Today's lackluster jobs numbers from June contribute the picture of a weak American economy, no longer falling off a cliff, but having a tremendously difficult time creating jobs and pulling itself out of the high unemployment that is sticking around after the recession has technically ended. The numbers do not really indicate a double-dip recession, (that's less likely, but could come as an aftermath of the European austerity push and stagnating growth in emerging markets) but they do indicate continued weakness in the largest economy in the world.

The meat of the jobs report is that we gained 100,000 non-census jobs, including 83,000 private sector jobs. That's an increase from last month, and jobs numbers tend to jump around from month to month, but it's clear that these numbers are not moving in the right direction at a sufficient rate. The unemployment rate went down, but mainly as a result of 652,000 workers leaving the labor force. 

The unfortunate thing about these reports is that they become part of the Washington horse-race. One monthly report cannot paint a clear picture of the direction of the economy. From the last few months and other data, however, it has become increasingly clear that bickering in the Senate over unemployment insurance and teachers' jobs looks silly in the face of this data. This is the worst recession since the Great Depression, and the simple truth is that more action must be taken to repair the economy and create jobs. 

From The New York Times:


Update: An excerpt from President Obama delivered remarks this morning on the jobs report:

This morning, we received the June employment report.  It reflected the planned phase out of 225,000 temporary Census jobs.  But it also showed the sixth straight month of job growth in the private sector.  All told, our economy has created nearly 600,000 private sector jobs this year.  That’s a stark turnaround from the first six months of last year, when we lost 3.7 million jobs at the height of the recession.  

Now, make no mistake:  We are headed in the right direction.  But as I was reminded on a trip to Racine, Wisconsin, earlier this week, we’re not headed there fast enough for a lot of Americans.  We’re not headed there fast enough for me, either.  The recession dug us a hole of about 8 million jobs deep.  And we continue to fight headwinds from volatile global markets.  So we still have a great deal of work to do to repair the economy and get the American people back to work. 

That’s why we’re continuing a relentless effort across multiple fronts to keep this recovery moving.  And today, I’d like to make a quick announcement regarding new infrastructure investments under the Recovery Act -– investments that will create private sector jobs and make America more competitive.

Secretary Locke and Secretary Vilsack have joined me here today to announce that the Departments of Commerce and Agriculture will invest in 66 new projects across America that will finally bring reliable broadband Internet service to communities that currently have little or no access.

In the short term, we expect these projects to create about 5,000 construction and installation jobs around the country.  And once we emerge from the immediate crisis, the long-term economic gains to communities that have been left behind in the digital age will be immeasurable.

In sum: We're not falling off a cliff anymore, in large part because of Administration's actions; the stimulus continues to work - both right now and by investing in long-term prosperity; and there's much more to be done.

Doing the Same Thing Over and Over Again and Expecting Different Results

Insanity: Doing the same thing over and over again and expecting different results.

-Albert Einstein

In what is supposed to be well-understood history, policymakers in the late 1930's made an epic mistake. Before the world exited the Great Depression, they launched the Great Austerity, trying to balance budgets in the midst of a downturn. David Leonhardt in The New York Times yesterday writes about this mistake, and its parallels to the present day:

The world’s rich countries are now conducting a dangerous experiment. They are repeating an economic policy out of the 1930s — starting to cut spending and raise taxes before a recovery is assured — and hoping today’s situation is different enough to assure a different outcome.

In effect, policy makers are betting that the private sector can make up for the withdrawal of stimulus over the next couple of years. If they’re right, they will have made a head start on closing their enormous budget deficits. If they’re wrong, they may set off a vicious new cycle, in which public spending cuts weaken the world economy and beget new private spending cuts.

On Tuesday, pessimism seemed the better bet. Stocks fell around the world, over worries about economic growth.


The policy mistakes of the 1930s stemmed mostly from ignorance. John Maynard Keynes was still a practicing economist in those days, and his central insight about depressions — that governments need to spend when the private sector isn’t — was not widely understood. In the 1932 presidential campaign, Franklin D. Roosevelt vowed to outdo Herbert Hoover by balancing the budget. Much of Europe was also tightening at the time.

If anything, the initial stages of our own recent crisis were more severe than the Great Depression. Global trade, industrial production and stocks all dropped more in 2008-9 than in 1929-30, as a study by Barry Eichengreen and Kevin H. O’Rourke found.

Short version...we're supposed to know better than this. Indeed, here's what the President had to say yesterday about repeating economic mistakes yesterday:

Now, let’s be fair though.  The other party’s opposition is also rooted in some sincere beliefs about how they think the economy works.  They think that our economy will do better if we just let the banks or the oil companies or the insurance industry make their own rules.  They still believe that, even after the Wall Street crash, even after the BP oil well blew, that we should just keep a hands-off attitude.  They think we should keep doing what we did for most of the last decade leading up to the recession. 

So their prescription for every challenge is pretty much the same -- and I don’t think I’m exaggerating here -- basically cut taxes for the wealthy, cut rules for corporations, and cut working folks loose to fend for themselves.  Basically their attitude is, you’re on your own.

Now, here’s the problem.  And again, I don’t question that a lot of them sincerely subscribe to this view.  Here’s the problem:  We’ve already tried these ideas.  Remember, we tried them for eight years.  We tried them for a good part of the last decade.  We know where they led us. 

We do know where these ideas led us. We know what happened in 1937, when the Great Depression had a second dip; we know what happened over the last decade, as Americans saw their household incomes decline and wages stagnate; and we know what's happening right now - growth and job creation are weak. We can live in a fantasy land that makes economic policy of off perverse theology about deficits, or we can live in reality, in which it would be absolutely insane to repeat the mistakes of the past and shift to austerity while the global economy remains fragile.

NDN Backgrounder: A 21st Century Economic Strategy for America

With the economy at the center of national attention, we'd like to present some key analysis and narrative on creating jobs and growth and understanding America’s place in the 21st century global economy. These pieces represent components of NDN’s thinking on and advocacy for a new economic strategy for America.

Busting Washington Myth #1: Americans, Especially Moderates, Really Care About Budget Deficits by Jake Berliner, 6/18/10
Despite what one may hear from pundits, pushing for near-term austerity is neither good policy nor good politics.

The Fall Economic Narratives Begin To Take Shape by Simon Rosenberg, 6/15/10
The battle this fall will center on contrasting economic narratives, and the conservatives are making their argument about austerity clearly. The center-left must respond with an argument about a plan to create prosperity.

Memo to the President: Resist a Simpleminded Push to Cut Budget Deficits Now by Dr. Robert Shapiro, 6/10/10
While tightening budgets to control deficits may be politically opportune - the economics behind the decisions do not add up.

The Economics of Immigration Are Not What You Think by Dr. Robert Shapiro, 5/26/2010
Drawing on a major report on immigration and reform proposals, Shapiro corrects much of the misinformation about the economics of immigration.

Rediscovering the Obama Narrative by Dan Carol, 4/21/10
Carol lays out an Obama-esque vision for public-private, bottom-up economic development and innovation.

Keeping the Focus on the Struggle of Everyday People: 2010 Edition by Simon Rosenberg 1/26/2010
More than ever, we need to recognize that the lack of income growth for average families is the greatest domestic challenge facing America today, and lead a national conversation about how we can create a plan that addresses the struggle of everyday people.

Crafting An American Response to the Rise of the Rest by Simon Rosenberg, 1/21/2010
In this new essay written for Salon, Simon lays out three strategies for the Obama Administration to craft a comprehensive response to the new politics of the 21st Century.

A Lost Decade for Everyday Americans by Jake Berliner, 12/17/2009
In this white paper, we argue that everyday Americans are at the end of a “lost decade” and explain the still misunderstood causes of the virulence of the recession.

The New Landscape of Globalization: The Real Foundations of American Prosperity in the 21st Century by Dr. Robert Shapiro, 6/20/2007
Shapiro offers this forward-looking paper on the state of globalization, the structural problems facing the American economy, and a road map to prosperity in this new economic era.

Shapiro Debates Austerity Push on CNBC

NDN Globalization Initiative Chair Dr. Robert Shapiro appeared on CNBC yesterday to talk about the growing move toward fiscal austerity. Rob demolishes both the notion of austerity and the arguments of CATO's Tad Dehaven. Take a look.

My favorite line "You cannot conduct macroeconomic policy by anecdote." Listeners will also hear Tad say he's against any sort of tax increases. I'm still waiting to actually hear a viable austerity plan from conservatives.

June 29 - Accelerating the Clean Energy Economy: Key Pathways, Policies, and Pitfalls

In the shadow of the Gulf oil spill, the U.S. Senate will soon debate energy and climate legislation that will seek to claim American leadership in the global clean energy race. The question at hand: How can we build the best policy and financing platform to deliver the right outcomes – from short-term job creation, carbon reduction, and clean energy megawatts on the grid to long-term economic competitiveness and energy security?   

On Tuesday, June 29 at 12:00 pm, the NDN Green Project will host a group of NDN fellows, partners, and experts in a real-time review of the status of the energy and climate debate and a discussion of the ideas that can help create a clean energy economy.

To attend this event at NDN or to watch via our live webcast, please RSVP.  The live webcast will begin promptly at 12:15 pm.

Panelists to include:

Professor Dan Kammen, Director of the University of California, Berkeley's Renewable and Appropriate Energy Laboratory and Obama campaign energy adviser, discusses the current state of the debate in the Senate and best case policy outcomes.

Aimee Christensen, Co-Founder, Clean Economy Network and Founder and CEO of Christensen Global Strategies, reviews what key U.S. competitors are doing to capture the clean energy opportunity.

Dr. Robert Shapiro, Chair of the NDN Globalization Initiative and the U.S. Climate Task Force, outlines the need for the right economic incentives in pricing carbon. 

Michael Moynihan, NDN Green Project Director, discusses the need to upgrade to Electricity 2.0 to unleash innovation in the $400 billion electricity sector.

Dan Carol, NDN Senior Fellow for Innovation and Clean Economy, moderates and discusses the politics of climate legislation and key changes to accelerate clean energy deployment from the ground up. 


Accelerating the Clean Energy Economy: Key Pathways, Policies, and Pitfalls
June 29, 12:00 PM
729 15th Street, NW. 
NDN Event Space, First Floor
Lunch Will Be Served  
Live webcast begins at 12:15 PM


Busting Washington Myth #1: Americans, Especially Moderates, Really Care About Budget Deficits

If you spend enough time here in Washington, watching cable news, or reading the opinion (and sometimes the news) pages of major newspapers, you’re likely to be told that budget deficits are a top tier or even number one concern to the American people. Furthermore, moderates (the people, who, according to conventional mythology, decide all elections – more on that here) REALLY care about these budget deficits. Therefore, it’s good politics to be a deficit hawk.

Unfortunately for those who ascribe to this way of thinking, this way of thinking is nothing but a myth. Let’s take a look at the results of an Economist/YouGov Poll that came out of the field ten days ago. Responses to “Which of these is the most important issue for you?” - 

Economist Poll

The economy is by far the most important issue, double in importance the next closest (healthcare!), and is incredibly important to moderates. Americans also view the budget deficit as less important than social security, (which, incidentally, is an entitlement we’re going to have to look at to deal with deficits down the line) and moderates rank immigration and education above the budget deficit in importance.

This poll does not exist in a vacuum. The New York Times/CBS News Polls for the last year have put economy/jobs well over 50 percent and the budget deficit down at or below 4.

So who does care about budget deficits? From both polling and anecdotal evidence, it’s clear that it is conservatives who see deficits as a core issue, with nearly 20 percent ranking it as their most important issue. It’s fairly obvious that tea partiers have identified the budget deficit as their number one issue, and they are anything but moderate.

Over the next few months, an argument will be waged about how to best pull America out of the worst economic downturn since the Great Depression and create path to a truly 21st century economy. As in all things Washington, the arguments will be based a bit in policy and a lot of politics. In this case, economists tell us that pursuing austerity in the near term ranges from silly to having the potential to cause a double dip recession. What politicians need to understand is that, in addition to being bad policy right now, austerity isn’t good politics either. 

Of course, a cursory examination of those pushing the austerity meme should be a signal to the center-left (and many in the media, who’ve bought the deficit argument). Just because Joe Scarborough, David Brooks, Peggy Noonan, etc sound reasonable does not mean we should take their advice. (Would you let an opposing team’s coach tell you what plays to call?) And even though it sounds like they’re giving advice, they’re not. They’re making an argument about the way the economy and our politics work. The worst thing the center-left can do is buy the right’s talking points about budget deficits. Instead, we have to have and sell our own about creating broad-based prosperity. 

Fortunately for the center-left, the correct policy is also the correct politics. The opposite side of that coin is that buying the conservative meme about deficits, and therefore cutting when we need to be growing, is both bad politics and bad policy. And it’s bad policy that will make the economy worse, which is the worst politics of all. The center-left would do well to not suffer that ironic fate.

For more, read:

The Fall Economic Narratives Begin To Take Shape by Simon Rosenberg, June 15

Memo to the President: Resist the Simpleminded Push to Cut Budget Deficits Now by Dr. Rob Shapiro, June 10

Wednesday: Innovation and Entrepreneurship in the American Economy with Rep. Ron Kind

The American economy has long been touted as the most innovative in the world, and American innovations have contributed broadly to domestic and global prosperity. The Great Recession and an increasingly competitive global economy make it imperative that the United States does more than ever to foster innovation and the creation and growth of new companies. Investing in innovation and the success of the American people must be a cornerstone of our strategy to create prosperity in the 21st century, idea-based economy.

In its recently released Innovation and Entrepreneurship Agenda, the New Democrat Coalition discusses innovation's central role in creating American prosperity. The agenda lays out a set of principles, mated with specific policies, for fostering innovation. 

On Wednesday, June 16, NDN will host a speech by Congressman Ron Kind (WI-3), Vice-Chair of the New Democrat Coalition and Co-Chair of the NDC Task Force on Innovation and Competitiveness. Kind will speak about the value of innovation to the American economy and the recently released New Dem Agenda for Innovation and Entrepreneurship. Kind will be joined by NDN President Simon Rosenberg.

June 16 @ 12pm
NDN - 729 15th St NW, First Floor
Washington, DC 
Click here to RSVP 
A live webcast will begin at 12:15

Tomorrow: Export-Import Bank Chairman Fred Hochberg Continues NDN Economic Series

Over the past few months, NDN and the New Policy Institute have held a series of discussions on the changes occurring in the American and global economies and the necessary work ahead to ensure broad-based prosperity in the 21st century. These past events have included Senator Mark Warner on Competitiveness and Innovation, FCIC Chairman Phil Angelides, and Professor Jagdish Bhagwati on the changing global economy. On June 16, the series will continue with Rep. Ron Kind speaking on the New Dem Innovation Agenda.

The most immediate event in this series is tomorrow with Export Import Bank Chairman and President Fred Hochberg. We hope you will join us.

June 10 @ 12pm - Export-Import Bank Chairman and President Fred Hochberg

Fred Hochberg

The Great Recession precipitated the sharpest decline in world trade since the end of World War II and saw the threat of the complete stall of global commerce. Out of that decline has come the great challenge and opportunity of putting the global trade system back on track in a manner that benefits both America and our trading partners. At the core of this effort is the Export-Import Bank of the United States, which, along with many others, has undertaken the work of meeting the ambitious goals of President Obama's National Export Initiative (NEI). 

NDN is pleased to invite you to an address on June 10 from the Chairman and President of the Export-Import Bank, Fred Hochberg, who will speak about the National Export Initiative and the work of the Export-Import Bank. NDN Globalization Initiative Chair Dr. Robert Shapiro will moderate a discussion and Q&A following the Chairman's remarks.

June 10 @ 12pm
NDN - 729 15th St NW, First Floor
Washington, DC 
Click here to RSVP 
A live webcast will begin at 12:15

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