Last week I highlighted the half-truths and misleading arguments that underpin Iowa Senate minority leader Paul McKinley’s case against Democratic governance in Iowa. I wasn’t planning to revisit the Republican leader’s fantasy world until I read the July 16 edition of his weekly e-mail blast. McKinley claims to offer five “big ideas” to “make Iowa again a state where jobs and prosperity can flourish.”

His premise is absurd when you consider that CNBC just ranked Iowa in the top 10 states for doing business (again), and number one in terms of the cost of doing business. Many of McKinley’s specific claims don’t stand up to scrutiny either, so follow me after the jump. There’s also a poll at the end of this post.

The Senate version of a bill designed to create jobs, support state budgets and extend various tax credits and benefit programs failed to overcome a Republican filibuster yesterday. Tom Harkin was among 56 members of the Democratic caucus who voted for the cloture motion (which would end debate on the bill), but Ben Nelson of Nebraska and Joe Lieberman of Connecticut voted with all the Republicans present, including Chuck Grassley, to kill the bill (roll call here). Joan McCarter observed that Senate Majority Leader Harry Reid

voted yes, without changing his vote, signaling that this iteration of the bill is indeed dead.

Reid followed the vote by attempting to pass the emergency provisions of the bill, the “doc fix,” unemployment benefits extension, and FMAP as well as the homebuyer tax credit, as separate bills under unanimous consent. McConnell objected to each, so we’re stuck in further limbo.

Extending unemployment benefits should be a no-brainer when the percentage of unemployed Americans who have been out of work for more than six months is higher “than at any time since the government began keeping track in 1948.” Without the “doc fix,” medical providers’ reimbursements for Medicare patients stand to drop about 20 percent. FMAP stands for Federal Medical Assistance Percentage funding, relating to federal government reimbursements for part of each state’s Medicaid spending. The 2009 stimulus bill temporarily raised FMAP payments for states during the recession, with larger increases going to states with higher unemployment rates. Failing to extend this provision will put state budgets under further strain for the 2011 and 2012 fiscal years.

Republicans who blocked this bill claim we should not be adding to the federal deficit. A spokesman for GOP enabler Ben Nelson laid out his views here. Ezra Klein pointed out a few glaring problems with the analysis: the federal budget can’t start approaching balance with unemployment at 9 percent, polls show Americans are much more concerned about jobs than the deficit, and the current rate of economic recovery is “far, far too slow to really dent unemployment.” Meanwhile, the same senators who claim to oppose adding to the deficit also oppose rolling back tax cuts or tax loopholes for the wealthy in order to pay for extending unemployed benefits, state fiscal aid and tax credits.

I share John Aravosis’ view that it was a terrible mistake for President Barack Obama to talk tough about reducing the deficit earlier this year. As Aravosis writes,

[T]he President didn’t want to blame Bush and the GOP for the deficit, and he didn’t want to sufficiently defend the stimulus and explain to people that they had a choice between a Great Depression and a bigger deficit. […] If the public understood that the deficit was a) mostly caused by Bush, and b) not nearly as important as staving off a Depression and creating jobs, the GOP would be facing far more pressure not to launch these filibusters at all.

Perhaps no jobs bill passed this week would alter the economy enough to affect the November elections, but if we accept current unemployment levels and don’t pass additional fiscal aid to the states, the economy may still be very weak leading up to the 2012 election.

Share any relevant thoughts in this thread. From where I’m sitting, the case for Harkin’s filibuster reform proposal has never looked stronger.

When the filing deadline for Iowa candidates passed in March, many Democrats were shocked that no Republican tried to qualify for the ballot in House district 16. The district in Iowa’s northeast corner covers all of Allamakee County and most of Winnishiek County, including Decorah, site of Luther College. Click here to download a district map (pdf file). Republican Chuck Gipp represented this district for 18 years before retiring in 2008. Although the area has been trending toward Democrats for some time, Republicans still have a slight voter registration advantage. As of the beginning of June 2010, there were 6127 registered Democrats in House district 16, 6819 Republicans and 7737 no-party voters.

This week, someone finally stepped up to challenge freshman State Representative John Beard. More details about that Republican and an early look at the House district 16 race are after the jump.

Between 1984 and 2007, “The gap between the wealth possessed by white and black families grew more than four times larger,” in part because of tax cuts and policies that favored high-income groups. Researchers from the Institute on Assets and Social Policy at Brandeis University also found in a new report that the average middle-income white family was able to accumulate more wealth (assets minus debts) than the average high-income African-American family: “Consumers of color face a gauntlet of barriers – in credit, housing and taxes – that dramatically reduce the chances of economic mobility.”

The growing wealth gap between the races in the U.S. is the focus of the new report, which you can download here. Other researchers have found equally damning evidence of the widening gap between the very rich and everyone else. This graph shows how “the top 10 per cent of income earners in the US took home an ever more outsized share of the total national income starting at the end of the 1970s.” From the World War II era to the early 1980s, the “top 10 percent took 30-35 per cent of total national income,” but by 2007 that figure had grown to about 50 percent–a level not seen since just before the Great Depression.

Ronald Reagan’s fiscal policies started this trend, but George W. Bush accelerated it with his enormous tax cuts for the highest earners. During Bush’s presidency, “The share of the nation’s income flowing to the top 1 percent of households increased sharply, from 16.9 percent in 2002 to 23.5 percent in 2007 – a larger share than at any point since 1928.” In addition, approximately “Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households […].”  

This enormous wealth gap is invisible to the Reagan-worshippers who now dominate the Republican Party. For them, any attempt to increase working-class wages is a “job-killer,” and tax cuts that disproportionately benefit the well-off are the solution to every problem. Look at how the Republican candidates for Iowa governor balk at spending $42 million to send more than 12,000 kids to pre-school but brag about plans to cut corporate taxes by $80 million to $160 million. Their priorities would be laughable if the real-world consequences were not so tragic.

Share any relevant thoughts in this thread.

The U.S. Senate defeated a Republican attempt to filibuster another month-long extension of unemployment benefits yesterday by a vote of 60 to 34. Four Republicans voted with all of the Democrats present on the cloture motion, but Iowa’s Senator Chuck Grassley supported the filibuster, as did most of his fellow Republicans (roll call here). Senator Tom Harkin was absent but would have voted to overcome the filibuster.

Republicans claim they simply want the unemployment benefits to be “paid for” (though they never objected when supplemental spending for the war in Iraq, or tax cuts for the wealthy, added to the deficit). Senator Chuck Schumer of New York countered,

“Unemployment extensions have always been considered emergency spending, and there’s a reason for that. […] Unemployment insurance is a form of stimulus, but offsetting the extension of this program would negate the stimulative impact. It would be robbing Peter to pay Paul.”

Governor Chet Culver had written to the entire Iowa delegation in Congress urging them to pass the benefits extension. Unlike Grassley, our governor understands how important these benefits are as economic stimulus:

The nonpartisan Iowa Fiscal Partnership released a study earlier this year showing the economic impacts of stimulus spending for unemployment benefits. Analysts found that direct spending for unemployment insurance included in the federal stimulus, along with ripple effects from that spending, produced $501.7 million increased economic activity and $112.1 million in income in 2009, creating or saving 3,727 jobs.

For the current year, the researchers also found direct and indirect benefits but in lower amounts, $314.6 million activity, $68.6 million income and 2,258 jobs.

So extending unemployment benefits doesn’t just help the jobless and their families, it helps businesses in virtually every community. The bad news is that the bill the Senate is poised to pass this week is not retroactive, meaning that unemployed Americans whose benefits expired on April 5 won’t get back the money they would have received this month had the Senate passed this bill before the Easter recess. It was a big mistake for Democrats to go home without taking care of this business in March.

The Atlantic’s Joshua Green thinks so:

I think Summers is going to leave sooner rather than later, possibly before the mid-term elections, and if not then, soon afterward.

Why? Because Summers is frustrated by his role, and his colleagues are clearly frustrated with him. Alexis Simendinger had a devastating item in last week’s National Journal suggesting that Summers’s “legendary self-regard” and “ego the size of the national debt” had gotten out of control. Some of Summers’s frustration no doubt stems from his wanting to be Treasury secretary. When that plum went to Geithner, Summers cast his eye on the Fed chairmanship and agreed to bide his time until Ben Bernanke’s term ended at the NEC–a staff position well below his old job as Clinton’s Treasury secretary. Most administration officials tactfully avoid pointing this out, because Summers has a fragile ego. But that’s why Joe Biden is so great. “How many former Secretaries of the Treasury would come in not as Secretary of the Treasury?” Biden blurted out to the New Yorker’s Ryan Lizza last fall.

But Summers didn’t get the Fed job either. Apparently that didn’t sit well. Administration insiders told Simendinger that Summers demanded a series of perks as compensation, including cabinet status, golf dates with the president, and a personal car and driver. In the “No Drama” Obama administration, such behavior stands out.  […]

Summers always seemed a bad fit for NEC director because the job entails dispassionately presenting the president with the counsel of his competing economic advisers. Summers doesn’t do “dispassionate” and he didn’t want to limit himself to fielding others’ advice–he had plenty of his own to offer. In other words, he was supposed to be the referee, but he also wanted to play power forward.

Summers was one of President Obama’s worst appointments, in my opinion, but I wouldn’t expect the president to reshuffle his economic team unless a mostly-jobless recovery continues, or the worst-case scenario of a douple-dip recession develops. Anyway, Summers’ departure wouldn’t herald a real change in economic policy if Green is right about Timothy Geithner being “ever more secure at Treasury.”

What do you think, Bleeding Heartland readers?

Although the March jobs report was encouraging, the unemployment rate and the number of long-term unemployed are still at historically high levels. Unfortunately, unemployment benefits for about 200,000 Americans will run out soon because Congress adjourned for its Easter recess before resolving an dispute over extending those and other benefits. The Hill reports:

The interruption in benefits will last two weeks at a minimum, according to Judy Conti of the National Employment Law Project (NELP), since lawmakers return from spring break on April 12.

As the two-week recess began, Congress was at an impasse over how to extend the emergency unemployment insurance program and other expiring provisions, including increased COBRA health insurance subsidies for the unemployed, the Medicare doctor payment rate and federal flood insurance.

Senate Republicans said the $9.3 billion, 30-day extension preferred by Democrats should be paid for, while Democrats said the bill’s cost didn’t need to be offset because the program was “emergency spending.”

Under the jobless benefits program that ends Monday, Americans out of work are eligible for up to 99 weeks of unemployment benefits. The program, aimed at helping jobless Americans stay afloat when new jobs aren’t readily available, gives an unemployed worker more than the 26 weeks of unemployment insurance normally available. But with the program ending, those out of work for as few as six months will see an interruption in their benefit checks.

I love how Republicans who approved every blank check for war in Iraq and every tax cut for the top 1 percent now demand that unemployment benefits be “paid for.” I don’t expect them to hold up action on unemployment benefits forever, but even if Democrats are able to apply extensions retroactively later this month, a lot of families will experience real hardship in the meantime. Democrats should not have adjourned for Easter before dealing with this issue. I hope they pass a bill to extend the benefits until the end of the year, so these battles won’t recur every month.

In an April 2 statement regarding the latest jobs report, Senator Tom Harkin outlined additional steps needed to help people looking for work:

“First, Congress must overcome the obstructionism that is holding up an extension of unemployment insurance.  This critical safety net expires Monday and will leave nearly 38,000 Americans and 1,200 Iowans without benefits they need while they look for work.  In addition, we must take immediate action to prevent job losses among our nation’s teachers – to protect the quality of education – and we need to pass job creating legislation.  When Congress returns, I intend to move immediately on those efforts.”

UPDATE: Mike Lillis has more on benefits expiring and next steps in the Senate.

The U.S. Senate gave final approval to a small jobs bill today by a vote of 68-29. Eleven Republicans and the Senate’s two independents joined 55 Democrats (including Iowa’s Tom Harkin) to pass the bill. The only Democrat to vote no was Ben Nelson of Nebraska (roll call here). The motion to invoke cloture on this jobs bill passed the Senate on Monday by a 60-31 vote, with six Republicans voting with all Democrats but Ben Nelson (roll call here). Senator Chuck Grassley voted with the Republicans who tried to filibuster the bill on Monday and with those who opposed the bill today. From the Washington Post:

The centerpiece of the bill is a new program giving companies a break from paying Social Security taxes for the remainder of 2010 on any new workers they hire who had been unemployed for at least 60 days. Employers would also get a $1,000 tax credit for each of those workers who stays on the payroll for at least one year.

Aside from that program, the measure includes a one-year extension of the law governing federal transportation funding, and would transfer $20 billion into the highway trust fund. The bill also extends a tax break allowing companies to write off equipment purchases, and expands the Build America Bonds program, which helps state and local governments secure financing for infrastructure projects.

Last month the Senate approved a similar jobs measure; Grassley voted no at that time as well. After the House made minor changes to the legislation, the bill had to clear the Senate again before going to the president’s desk.

Most House Democrats support a larger job-creation bill with more money for infrastructure projects, but there may not be 60 votes in the Senate for such a measure.

The House of Representatives approved a jobs bill today containing about $15 billion in tax incentives and a $20 billion allocation from the Highway Trust Fund to support infrastructure projects. (The Senate had approved the legislation on February 24.) Iowa Democrats Bruce Braley (IA-01), Dave Loebsack (IA-02) and Leonard Boswell (IA-03) voted for the bill, while Iowa Republicans Tom Latham (IA-04) and Steve King (IA-05) voted against it (roll call here). Six Republicans joined 211 Democrats in supporting the bill, while 35 Democrats opposed it along with most of the GOP caucus. The Democratic opponents were mostly members of either the Progressive Caucus or the Congressional Black Caucus:

Congressman [Raul] Grijalva, one of the leaders of the Congressional Progressive Caucus, had dismissed the tax-credit focused bill as not “dealing with job creation.” […] The CBC’s position during the month long debate on the $15 billion jobs tax credit package was fairly straightforward – CBC members don’t want to back a bill that was composed of tax breaks for business which they don’t believe will necessarily create jobs when other job-creating programs the CBC supports, such a summer youth jobs program, face an uncertain future in the Senate.

Braley had introduced a separate bill last month containing language similar to part of the jobs bill approved today:

Braley’s language in the HIRE Act provides small business owners with greater incentives to hire workers for long-term positions, providing $1,000 in additional tax incentives for businesses that retain employees for 52 consecutive weeks. The payroll tax cut provides greater incentive for employers to move quickly to hire new workers because the credit expires at the end of the year.  The sooner employees are hired, the more time small business owners have to benefit from the credit.

The [Hiring Incentives to Restore Employment] Act also includes the following provisions:

o       Tax cuts to spur new investment by small businesses to help them expand and hire more workers

o       Extension of the Highway Trust Fund allowing for tens of billions of dollars in infrastructure investment

o       Provisions — modeled after the Build America Bonds program – to make it easier for states to borrow for infrastructure projects, such as school construction and energy projects

Earlier this week, Republican Senator Jim Bunning ended his filibuster of a bill including a temporary extension of unemployment benefits and other measures. The Senate then approved the bill by a 78 to 19 vote. Both Democrat Tom Harkin and Republican Chuck Grassley voted for the bill. However, Grassley defended Bunning’s efforts to demand that the bill be paid for, while Harkin said Bunning had abused Senate procedures in blocking the bill for several days. I do agree with one point Grassley raised: the unemployment benefits should have been included in the jobs bill the Senate approved on February 24.

Obama signed the bill right away on March 3. Not only did that extend unemployment and COBRA benefits, it also allowed furloughed Department of Transportation workers to come back to work and prevented a big cut in Medicare payments to physicians from going into effect.

Speaking of jobs-related legislation, Roxanne Conlin’s campaign blasted Grassley this week for announcing that some Dubuque workers are eligible for a retraining program that he voted against. After the jump you can read the press release, which includes background information on the program and Grassley’s voting record.  

I thought that the appliance rebate was going to make some good headlines for Gov. Culver.  But it looks like it is going down as a fiasco.  The program was supposed to start at 8:00AM today, but by 8:10, the website was already down.  

It only had the message: "The service is unavailable."  

 The phone lines are also jammed.  Most of the time I don't even get a busy signal, it just leaves me hanging, listening to static.  Has anyone else tried to get a rebate yet?

UPDATE from desmoinesdem: The $2.8 million in stimulus money for these rebates in Iowa was exhausted in one day. Representative Bruce Braley has urged House Speaker Nancy Pelosi “to include funding for clean energy appliance rebate programs in any jobs legislation considered by the House.”

As long-term unemployment continues to rise, unemployment benefits for many Americans will run out tonight because the U.S. Senate failed to pass a bill extending the benefits late last week. An estimated 1.2 million Americans, including about 75,000 Iowans, stand to lose unemployment benefits during the month of March if Congress does not act. For reasons I don’t understand, Senate Majority Leader Harry Reid left the benefits extension out of the jobs bill approved by the Senate on February 24.

The following day, the House of Representatives approved a separate bill containing a one-month extension of unemployment benefits, federal subsidies for people on COBRA health insurance plans, current Medicare reimbursement rates for doctors, and a few other programs. Democrats tried to bring this bill up for a Senate vote right away, but retiring Republican Senator Jim Bunning of Kentucky repeatedly objected to motions for unanimous consent. Democrats promised to keep filing motions until Bunning broke down, but instead they adjourned near midnight on Thursday night.

Democrats have been slamming Bunning in public statements and e-mail blasts. Here’s an example from Senator Tom Harkin’s office on Friday:

“We need to act quickly to extend the safety net and make sure laid-off workers have access to unemployment benefits through the end of the year, at least,” said Harkin.  “It is heartbreaking to see political games being played with the lives of hardworking people who are struggling to find a job, particularly when there has been strong bipartisan support in the past to extend unemployment benefits and other vital safety net programs.  

“Unfortunately this is emblematic of the larger issue plaguing the Senate today: abuse of Senate procedure.  We saw it in November as well.  While Senate Republicans play games, families are sitting around their kitchen tables wondering how they will make ends meet.  

“I intend to do everything in my power to fight this and hope other Senators will join me in this effort.”

[…] In November, Senate Republicans used a similar delay tactic to filibuster a motion to proceed to a bill to extend unemployment compensation.  After delaying and grinding Senate business to a halt for nearly a month, the bill passed 97-1.

Bunning’s behavior is inexcusable, and he even had the gall to complain about missing a college basketball game while staying on the Senate floor to block this bill.

At the same time, it is pathetic that Democrats adjourned instead of standing and fighting Senate Republicans all weekend long. Apparently one or two other Republicans showed up Thursday night to back up Bunning, but so what? Democrats should have refused to leave until the unemployment benefits bill passed. At the Congress Matters blog, David Waldman explained other ways Democrats could have handled Bunning’s procedural roadblock. Chris Bowers looked at the big picture here:

Democrats are in charge, and they are going to get blamed for this.  Democratic attempts to blame this on Senate procedure will ring utterly hollow.  Not only do people not understand, or care about, those rules, but it simply sounds wimpy and pathetic for the people running the United States Government to throw their hands up in the air and say “our procedural rules prevented us from doing anything to solve this huge problem. Sorry.”

Democrats did not have to adjourn.  They could have kept fighting Bunning.  Further, they all agreed to the rules under which the Senate operates, and most of them are still defending those rules.  Blaming Senate procedure is not going to extend anyone’s unemployment or COBRA benefits, and its not going to win many hearts around the country.

Sure, Jim Bunning is currently the biggest asshole in the country right now.  However, if you think that procedure is a problem, then start working to change the procedure.  If you think that unemployment benefits need to be extended, then don’t adjourn for the weekend when those benefits are slated to run out.  

Sometime this week, or perhaps later in March, Senate Democrats will break the Republican obstruction. But when that happens, “state governments will still have to deal with the extra administrative costs of shutting down and restarting the extended benefits programs.”

Some Republicans, like Representative Steve King, are philosophically opposed to extending unemployment benefits, but they fail to acknowledge that extending unemployment benefits has tremendous “bang for the buck.” The Iowa Fiscal Partnership recently calculated that that the unemployment benefits extension contained in last year’s federal stimulus bill “produced $501.7 million increased economic activity and $112.1 million in income in 2009, while creating or saving 3,727 jobs” in Iowa alone.

The U.S. Senate passed a scaled-back jobs bill today by a 70-28 vote (roll call here). 57 of the 59 Senate Democrats voted for the bill; Ben Nelson of Nebraska voted no and Frank Lautenberg of New Jersey was absent. 13 Republicans voted for the bill. Five of them helped Democrats break a Republican filibuster on Monday: Olympia Snowe and Susan Collins of Maine, Scott Brown of Massachusetts, and the retiring Kit Bond of Missouri and George Voinovich of Ohio. Two Republicans who were absent for Monday’s cloture vote also voted yes today: Orrin Hatch of Utah and Richard Burr of North Carolina. Six other Republicans tried to block this vote from going forward on Monday but turned around and voted for the bill today: Lamar Alexander of Tennessee, Thad Cochran and Roger Wicker of Mississippi, James Inhofe of Oklahoma, George LeMieux of Florida, and Lisa Murkowski of Alaska.

Senate Democrats and the media are calling this a $15 billion jobs bill, but David Dayen notes, it’s really a $35 billion measure: “the extension of the Highway Trust Fund would add $20 billion for infrastructure projects, but because of the way it’s financed, through a fund shift, it doesn’t count as an expense.”

In addition to the highway fund money, the main features of the jobs bill are a tax credit for small businesses that hire new workers, “Build America Bonds” that help state and local governments to borrow money, and a provision to allow small businesses to write off more expenses.

Senator Chuck Grassley voted against today’s bill and against the cloture motion on Monday. He and Senate Finance Committee Chairman Max Baucus had agreed on a different jobs bill, which Senate Majority Leader Reid abandoned. In a statement submitted to the Senate record on Monday, Grassley slammed Reid’s “disregard for bipartisanship” and noted that tax-extending provisions in the Baucus-Grassley bill had enjoyed broad support from both parties in the past.

The House passed a larger jobs bill in December that included many of the tax-extending provisions Reid omitted from the Senate bill.

Mark Zandi, chief economist at Moodys.com, said last week that Reid’s jobs bill was “a good first step” but not nearly large enough to address the unemployment problem:

A failure to provide additional funding to struggling states, for example, would lead to job losses that would “overwhelm” all the other job-creating efforts being tried, he said. And while the Schumer-Hatch tax credit would create between 200,000 and 300,000 new jobs, Zandi estimated, that number is a drop in the bucket relative to the roughly 11 million new jobs needed to get the country back to pre-recession jobless levels.

Reid has promised to introduce more jobs-creating legislation soon. Meanwhile, House Speaker Nancy Pelosi will try to move quickly on the bill the Senate just approved, Roll Call reported.

It’s been a year since President Barack Obama signed the American Recovery and Reinvestment Act (better known as the stimulus bill) into law. I didn’t like the early concessions Obama made to Republicans in a fruitless effort to win their support for the stimulus. I was even more upset with later compromises made to appease Senate conservadems and Republican moderates. They reduced spending in several areas that had real stimulative value (school construction funds, extra money for the Low Income Home Energy Assistance Program, aid to state governments) in order to include tax cuts that have much less stimulus “bang for the buck.” Senator Tom Harkin was right to question why 9 percent of the stimulus bill’s cost went toward fixing the alternative minimum tax, for instance.

Still, I supported passage of the stimulus bill. In late 2008 and early 2009 the U.S. economy was losing 600,000 to 700,000 jobs per month. Something had to be done. On balance, the stimulus did much more good than bad. Economists agree it has saved or created a lot of jobs:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Two and a half million jobs isn’t enough to compensate for the 8 million jobs lost since this recession began, but it’s a start.

Not only did the stimulus create jobs, it greatly increased spending on programs that will have collateral benefits. Incentives to make homes more energy efficient will reduce greenhouse gas emissions and save consumers money that they can spend elsewhere. Money for sewer improvements will provide lasting gains in water quality (inadequate sewers and septic systems are a huge problem in Iowa). The stimulus included $8 billion for high-speed rail. It wasn’t nearly enough, of course; we could have spent ten or twenty times that amount on improving our rail networks. But that $8 billion pot drew $102 billion in grant applications from 40 states and Washington, DC. The massive demand for high-speed rail stimulus funding increases the chance that Congress will allocate more funds for rail transportation in the future.

Unfortunately, most Americans don’t believe the stimulus bill created jobs. That’s largely because unemployment remains at a historically high level of 10 percent nationwide. Also, inflation-adjusted average weekly earnings have gone down during the past year. In addition, Republicans have stayed on message about the worthlessness of the stimulus bill, even though scores of them have hailed stimulus spending in their own states and districts.

Democrats on the House Labor and Education Committee released an ad that lists various popular stimulus bill provisions, such as increasing Pell Grants and teacher pay. The ad uses the tag line, “There’s an act for that,” naming the American Recovery and Reinvestment Act at the end. I don’t think it’s effective, because the ad doesn’t include the word “stimulus.” Few people will realize that the ARRA refers to the stimulus bill.

Bleeding Heartland readers, how do you view the stimulus one year later?

These unbelievable comments from Representative Steve King come to you courtesy of KTIV in Sioux City, who asked the congressman about the upcoming closure of the John Morrell plant in April:

King doesn’t support a suggestion, by Iowa governor Chet Culver, to extend federal unemployment benefits to 39-weeks after a worker loses his, or her, job.

The republican worries some Morrell workers won’t start looking for a new job until that 39th week when benefits are about to run out.

King says the 26-weeks workers get, right now, is enough. Rep. Steve King, (R) Iowa says “We shouldn’t turn the ‘safety net’ into a hammock. It should actually be a ‘safety net’.”

The John Morrell plant currently employs about 1,450 workers. The unemployment rate in Woodbury County is above 6 percent, so it won’t be easy for all of the displaced workers to find new jobs quickly. The Iowa Democratic Party slammed King’s “absurd” comments:

“Calling the extension to unemployment benefits a ‘hammock’ is insulting. Sioux City is suffering with the blow of the Morrell plant closing. This is the worst recession in 80 years. But, Congressman King believes that we should be worried about these workers being too lazy,” said Iowa Democratic Party Chairman Michael Kiernan. […]

“Iowans believe in working hard and playing by the rules, and I know that many affected by the Morrell plant closing are already looking for work to provide for their families after the plant closes. Steve King should stop insulting his constituents and get to work helping them get through this difficult time.”

Not only is King insensitive, he appears to be ignorant about how unemployment benefits relate to the broader economy. Last year Mark Zandi, chief economist of Moodys.com, calculated the stimulus “bang for the buck” of various forms of tax cuts and government spending. The table he created is on page 9 of this pdf document, or you can view it here. Of everything Zandi examined, extending unemployment benefits had the second-highest bang for the buck, generating $1.63 in economic activity for every $1 spent by the federal government. That was more than three times the bang for the buck of any permanent tax cut. Even the best tax cut for economic stimulus (a temporary payroll tax holiday) generates only an estimated $1.28 in economic activity for every $1 in revenue the federal government doesn’t collect.

In other words, extending unemployment benefits to former John Morrell workers wouldn’t just give them a safety net, it would produce more revenue for businesses in the Sioux City area. Last year’s stimulus bill extended federal unemployment benefits, but that provision may expire at the end of this month. Meanwhile, long-term unemployment has reached its highest level in decades. According to KTIV, King has talked with Smithfield Foods about giving Sioux City workers jobs at plants Smithfield owns in other communities, but I question how realistic that is when 44 other states have higher unemployment rates than Iowa. Nor would it help Sioux City businesses and property values to have hundreds of families leave the area.

Share any relevant thoughts in this thread.

Senate Finance Committee Chairman Max Baucus and ranking Republican Chuck Grassley released a draft jobs bill yesterday that would cost about $85 billion. It “would give employers a payroll tax exemption for hiring those who have been unemployed for at least 60 days. The bill would also provide a $1,000 income tax credit for new workers retained for 52 weeks.” Click here to read a copy of the draft bill.

A bipartisan jobs bill would be great if that bill would create a significant number of new jobs. Unfortunately, analysts agree that many of the measures in the Baucus-Grassley bill would do little on that front. More details are after the jump.

The Senate voted to confirm Ben Bernanke as chairman of the Federal Reserve today, but it was hardly a ringing endorsement:

The 70 to 30 vote was the thinnest approval ever extended to a chairman in the central bank’s 96-year history.

The confirmation was a victory for President Obama, who had called Mr. Bernanke an architect of the recovery, but also signaled the extent to which the Fed, once little known to the public, has become the object of populist outrage over high unemployment and Wall Street bailouts.

In several hours of debate, senators said the Fed had abetted, then ignored, the housing and credit bubbles and allowed banks to keep dangerously low capital reserves and to make reckless lending decisions that ruined consumers. Some even blamed Mr. Bernanke for the falling dollar and questioned his commitment to free enterprise.

In contrast, Mr. Bernanke’s supporters were muted. Like a mantra, they said that the Fed had made mistakes but that Mr. Bernanke had helped save the economy from a far worse recession.

Eleven Democrats, 18 Republicans and independent Bernie Sanders voted against confirming Bernanke (roll call here).

Senators of both parties who opposed Bernanke said his monetary policy and poor oversight contributed to the financial meltdown of 2008. Various Democrats who voted against Bernanke said he had been too beholden to Wall Street interests.

I still think it was a mistake for Obama to nominate Bernanke for another term, but let’s hope the Fed chairman our mild-mannered economic overlord improves on the job.

UPDATE: MIT economist Simon Johnson argues that Bernanke’s reappointment was “a colossal failure of governance.” Worth a read.

SECOND UPDATE: Bleeding Heartland user ragbrai08 notes that seven senators voted for cloture (allowing the Senate to proceed to consider Bernanke’s nomination) before voting against confirming him. Here is the roll call on the cloture vote. The senators who voted for cloture but against Bernanke are Democrats Tom Harkin, Barbara Boxer (CA), Byron Dorgan (ND), Al Franken (MN), Ted Kaufman (DE), and Sheldon Whitehouse (RI), along with Republican George LeMieux (FL).

Senator Tom Harkin told the Des Moines Register and Radio Iowa today that he will vote against confirming Ben Bernanke to another term as chairman of the Federal Reserve. Radio Iowa quoted him as saying he’s “tired of being held hostage by Wall Street”:

“I just think Mr. Bernanke is going to continue the policy of The Fed of taking care of the big financial institutions and to heck with Main Street,” Harkin says.

Harkin faults Bernanke for the handling of the Wall Street bailout. “Mr. Bernanke gave away trillions of dollars of taxpayers’ money to AIG at almost zero percent interest rate, and then they turned around and they held their counterparties – French, Germans, Swiss and many others – harmless. They didn’t have to take a hair cut at all,” Harkin says, “They got paid off in full and yet we (taxpayers) lost trillions.” […]

“I’ve had it with being told that some bank is too big to fail and I’ve had it with being told that someone, some person is so important that we have to have that person in this position.  That’s nonsense,” Harkin says.

Looks like someone didn’t get the memo about “our mild-mannered economic overlord” saving the country. Good for Harkin.

Meanwhile, Senator Chuck Grassley told the Des Moines Register, “I think I made a decision [on Bernanke] […] But I don’t think I’ll announce it.” Grassley went on to criticize the Fed for doing too little to fight inflation, suggesting we could be on a path to hyper-inflation like we had in 1979.

With unemployment at a 26-year high, I’m surprised Grassley is so concerned about hyper-inflation. Economists, correct me if I’m wrong, but isn’t deflation a greater risk right now?

Please tell me our president is smarter than this:

President Obama will propose freezing non-security discretionary government spending for the next three years, a sweeping plan to attempt deficit reduction that will save taxpayers $250 billion over 10 years.

When the administration releases its budget next week, the discretionary spending for government agencies from Health and Human Services to the Department of Treasury will be frozen at its 2010 level in fiscal years 2011, 2012 and 2013. […]

Exempted from the freeze would be Pentagon funding, and the budgets for Veterans Affairs and Homeland Security.

Instead of delivering his State of the Union address this week, Barack Obama may as well hold up a big sign that says, “I want Democrats to lose Congress.” Over at Daily Kos, eugene explains why:

That will be the equivalent of FDR’s boneheaded move in 1937 to pull back on government spending. The result was a major recession that caused conservatives to win a lot of seats in the 1938 election and brought the New Deal to an end.

Yet FDR had already won his second term. Obama, on the other hand, is embracing a policy that has been proven to fail even before the midterm elections.

If he thinks this is even a realistic or economically feasible policy, he is out of his mind. If he thinks this will save his and Democrats’ political bacon, he is very badly mistaken. Only greater government spending – MUCH greater spending – will pull us out of recession, create jobs, and produce lasting recovery.

Without greater spending, Obama is implying he is willing to live with high unemployment for the remainder of his first term. If one wanted to deal with the deficit, he could follow Bill Clinton’s model of producing economic growth that would close the deficit in future years.

Economically, this course would be a disaster, but politically it’s even a worse move. During the presidential campaign, Obama promised hundreds of times that we would be able to spend more on various domestic priorities because we wouldn’t be spending $200 billion a year in Iraq. With the escalation in Afghanistan, the combined cost of our commitments there and in Iraq will now exceed Bush administration levels, and Obama isn’t cutting fat from other areas in the Pentagon budget to make up for it.

It’s as if Obama wants Democrats to stay home this November.

A month ago, I would have said Republicans had a 10 to 20 percent chance of retaking the House and zero chance of retaking the Senate. The Massachusetts election has already prompted several Democratic incumbents to retire and prospective challengers not to run. If Obama puts deficit reduction ahead of job creation this year, I give the GOP a good chance of winning the House and an outside shot at taking the Senate (which would require a nine-seat gain, assuming Joe Lieberman would switch parties).

Obama told Diane Sawyer today, “I’d rather be a really good one-term president than a mediocre two-term president.” At this rate, he’ll be neither.

UPDATE: So some people are claiming this is no big deal because the spending freeze isn’t an across-the-board freeze, “would apply to a relatively small portion of the federal budget” and locks in a bunch of spending increases from last year. I am not interested in endlessly increasing the defense budget while holding the line on the EPA, Energy, Transportation, HUD and other areas. That’s not the agenda Obama campaigned on, and it’s not smart from any perspective.

Chris Bowers raises a better point, which is that “the people who actually write spending bills–members of the House Appropriation and Budget committees–say they won’t be freezing or cutting social spending.” So this is just window dressing for the State of the Union to show the wise men of the beltway that Obama is very, very concerned about the deficit. Still not the kind of leadership we need from our president.

SECOND UPDATE: Brad DeLong has a must-read post up on this proposal (“Dingbat Kabuki”).

THIRD UPDATE: Turkana helpfully compiled excerpts from seven liberal economists’ comments on Obama’s new proposal. Spoiler alert: they’re not impressed.

I expected 2009 to be a relatively quiet year in Iowa politics, but was I ever wrong.

The governor’s race heated up, state revenues melted down, key bills lived and died during the legislative session, and the Iowa Supreme Court’s unanimous ruling in Varnum v Brien became one of this state’s major events of the decade.

After the jump I’ve posted links to Bleeding Heartland’s coverage of Iowa politics from January through June 2009. Any comments about the year that passed are welcome in this thread.

Although I wrote a lot of posts last year, there were many important stories I didn’t manage to cover. I recommend reading Iowa Independent’s compilation of “Iowa’s most overlooked and under reported stories of 2009,” as well as that blog’s review of “stories that will continue to impact Iowa in 2010.”

President Barack Obama announced more details today about provisions he wants in the jobs bill Congress will take up soon:

Obama proposed new spending for highway and bridge construction, for small business tax cuts and for retrofitting millions of homes to make them more energy-efficient. He said he wanted to extend economic stimulus programs to keep unemployment insurance from expiring for millions of out-of-work Americans and to help laid-off workers keep their health insurance. He proposed an additional $250 apiece in stimulus spending for seniors and veterans and aid to state and local governments to discourage them from laying off teachers, police officers and firefighters.

Making homes more energy efficient would not only create jobs, but would produce huge collateral benefits, as A Siegel explains at the Get Energy Smart Now blog. Money that homeowners and business owners save on utility bills is money they can spend on other goods and services.

Populist Caucus Chairman Bruce Braley (IA-01) and House Trade Working Group Chairman Mike Michaud (ME-02) wrote to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer today, urging them to make sure the jobs bill contains a strong “Buy American” provision. From a press release Braley’s office issued:

“Recently, as America has suffered the worst economic recession since the Great Depression, unemployment has risen and is now around 10 percent,” the letter reads. “We believe that the shipment of American jobs overseas is a factor in this rising unemployment.  If we are going to pass a strong job creation bill then it only makes sense to include strong Buy American provisions, to further ensure that the jobs created as a result of this legislation are created within the United States.

“We have an obligation to create jobs in America. While some would argue that Buy American is nothing more than a trade protectionist label, it is clear that these provisions would equate to greater investment, and greater job-creation, within the U.S.  In addition, Buy American provisions are perfectly legal under current trade agreements and many other nations use similar mechanisms to protect their domestic manufacturers.  Therefore, we feel that it is entirely appropriate that this language be included in any upcoming job-creation measure, and we believe that this provision is essential to creating and retaining American jobs.

The stimulus bill Congress approved in February contained “Buy American” language despite a massive corporate lobbying effort.

If the upcoming jobs bill contains aid to state and local governments, as the stimulus bill did, that could help Iowa legislators close the gap in the fiscal year 2011 budget. Republicans keep complaining about Iowa Democrats using federal transfers to balance the state budget, but they ignore the reality that deep cuts in state budgets are themselves a drag on the economy. State employee layoffs have a ripple effect in the private sector. The Center on Budget and Policy Priorities has estimated that without additional federal fiscal relief, “states will have to take steps to eliminate deficits for state fiscal year 2011 that will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year.”

UPDATE: Meteor Blades has a good post up at Daily Kos on the jobs bill.

Barack Obama’s job approval in Iowa fell to 49 percent according to the latest statewide poll by Selzer and Co. for the Des Moines Register. His lowest marks were for his handling of the budget deficit (30 percent approve, 61 percent disapprove), leading Kathie Obradovich to suggest that “Cut spending and balance the budget” should be at the top of Obama’s to-do list.

No matter what today’s polls say about the deficit, it would be poor economic policy and foolish politics to make deficit reduction a priority now.

Americans won’t be happy to learn that Wall Street salaries may be higher this year than they were before the current recession began:

Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street’s pay culture.

Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal.

Ian Welsh wrote a depressing post at Open Left yesterday:

All they did was throw cash at the problem, without dealing with the underlying issues, which is why they didn’t manage (as Jerome points out) to kickstart ANY net private spending.  They didn’t break up major banks.  They didn’t allow bankruptcy judges to rewrite mortgages.  Their mortgage program kept hardly anyone in the house.  And their money for financial firms did not increase lending by one cent. […]

This is going to be the worst “recovery” of your lifetime, unless you’re in the financial sector at a relatively high level.  Bank profits have recovered but ordinary people are not, in a generation, going to see a full recovery from this clusterfuck – employment will not recover to pre-recession levels before the next recession, and I don’t expect it to recover after that recession either.

At this point, in fact, I am expecting this to turn into a double dip recession-this “recovery” will not have any significant legs.

Continuing George Bush’s Wall Street bailout policy will prove to be a costly mistake for President Obama. Watch the Huffington Post Investigative Fund’s interview with Neil Barofsky, who “monitors a dozen separate bailout-related programs that now account for nearly $3 trillion in financial commitments.” Among other things, his research has confirmed that the bailout did not increase lending to the business sector.

Republicans pretend that Iowa Democrats are to blame for all our economic troubles, but the factors impeding employment growth are nationwide problems, like falling wages and major banks cutting back on loans to small businesses.

Iowa Senate Majority Leader Mike Gronstal discussed the film tax credit fiasco on this weekend’s Iowa Press program, and it sounds like defenders of the tax credit will be fighting an uphill battle during next year’s legislative session:

“I think we’re going to get this investigation from the Attorney General and from the State Auditor. I think we’re going to do a good evaluation of the program and if we can’t show a real benefit to the state of Iowa – and not just a few part-time jobs, but a real long-term benefit to the state of Iowa – I think it’s 50-50 as to whether this program continues.”

According to Gronstal, he and other legislators right now “see very little in terms of potential benefits” to the state from the film tax credits which have been awarded already.  […]

Gronstal says he may regret having voted to create the program and he expects some political fall-out from this episode.

“People will be disappointed in that, but I think it’s the responsibility of the legislature – we try things in economic development. Everything we try doesn’t work and it’s perfectly o.k. to occasionally decide, ‘You know, we’ve (gone) down a road and that road doesn’t make as much as sense as we thought it made,’” Gronstal says. “And so we’re going to go back and change that.”

Gronstal also defended Governor Chet Culver, saying “once he found out about [problems with the film tax credit] he acted quickly and put the program on hold and got people to investigate.”

Gronstal expressed surprise that a flood of applications for film tax credits this spring allowed producers to get around the $50 million annual cap the legislature approved for the program. (Note to legislators: next time you cap a tax credit, make the law go into effect immediately on being signed by the governor.)

Culver has ordered a comprehensive review of all Iowa tax credits, and Gronstal made clear that legislators will subject these programs to additional scrutiny in the coming year:

“If you can show that a tax credit creates a climate, for instance, the research activities tax credit – if you can show that that keeps an industry here in the state of Iowa and builds long-term jobs and high-wage, high-skills jobs in this state where there’s a net benefit to the state by having that set of jobs come along with it, yeah, that makes sense,” Gronstal says.  But Gronstal says if you can’t show that, then the tax credit should be repealed.

A critical analysis of Iowa’s tax credits is overdue, but better late than never. State revenues continue to lag behind projections because of the recession. Repealing wasteful tax credits could reduce the size of state spending cuts during the 2010 fiscal year. Iowa Republicans would like to plug the budget gap entirely through spending cuts, but they forget that deep spending reductions by state and local governments can also be a drag on the economy.  

The U.S. House Transportation and Infrastructure Committee has been keeping track of how states are spending the stimulus funds allocated for roads. On September 2 the committee released a report ranking the states according to how much of the American Recovery and Reinvestment Act funding for highways and bridges had been put to work as of July 31. This pdf file contains the state rankings.

Iowa ranked second overall, having put 75 percent of its stimulus road funds to work by the end of July. Join me after the jump for more details from the report and analysis.  

With the economic recession continuing to drag down tax revenues, the 2010 budget that the Iowa Legislature approved in April is likely to require significant adjustments.

In June the Legislative Council agreed to cut more than 10 percent from the Legislature’s budget in 2010. The cost-saving measures “include a pay freeze for all legislative employees, reducing travel budgets, and cutting back next year’s legislative session by 10 days.”

A State Government Reorganization Commission will look for other ways to cut spending next year. It will be interesting to compare that commission’s proposals with the kind of cuts Iowa Republicans have been advocating. During the last legislative session, Republicans called for $300 million in spending cuts, but I have been unable to find a link to a document with details about that proposal. (Note: I’ll have more to say in a future post about the state budget reforms Iowa Republicans proposed yesterday.)

After the jump I’ve posted some links and analysis related to the budget constraints facing Iowa and just about every other state right now.

For a guy who wrote a short book’s worth of blog posts as “The Armchair Economist,” Republican gubernatorial candidate Christian Fong has been saying some boneheaded things about the state budget lately.

Huge consumer demand quickly exhausted the $1 billion in federal funds allocated to the “Cash for Clunkers” program that provides $3,500 or $4,500 vouchers to some consumers who trade in old vehicles for newer models. An estimated 250,000 Americans have taken advantage of the program already, prompting the U.S. House to vote on Friday for an additional $2 billion to extend it. All five Iowans in the House voted to fund “Cash for Clunkers” in June, but Representative Steve King (IA-05) voted no on the extra $2 billion.

Although the White House would like to extend this program, Reuters reported that the bill may run into trouble in the Senate:

One member can block a bill in the Senate and there are different interests that could pose a challenge. For instance, Energy Committee Chairman Jeff Bingaman said he opposes the House proposal because it calls for spending unused Energy Department loan guarantees on the program.

Environmental champions in the Senate have urged members to strengthen requirements in the bill for fuel efficiency and pollution control.

Energy analysts played down the impact the program would have on reducing gasoline consumption.

Conservative budget hawks could also draw the line on more help for an industry that has already received tens of billions in federal assistance.

In an ideal world, I would have liked to see “Cash for Clunkers” structured somewhat differently, but there is no question that this program has helped many people and given a slight boost to the economy. Even if the Senate does not approve the additional $2 billion, car dealers’ incentives that copy the “Cash for Clunkers” approach may continue to stimulate new car purchases.

Congressman Bruce Braley (IA-01) was one of the key House sponsors of this bill, and its popularity will probably help him if he ever runs for statewide office. People who bought new cars they otherwise could not have afforded are going to remember that for a long time.

I noticed that Congressman Leonard Boswell (IA-03) is holding a public event to discuss “Cash for Clunkers” on August 4 (Stew Hansen Dodge City Jeep on Hickman in Urbandale, 9 am).

Share any thoughts about this program or stories about people who have benefited from it in this thread.

Iowa Senate minority leader Paul McKinley has been on a Twitter tear this week complaining about Democrats “obstructing” his “state sovereignty resolution.” According to the Omaha World-Herald, McKinley

offered a resolution this year calling on the federal government to “cease and desist” in issuing mandates that go beyond what the 10th Amendment allows. The [Iowa Senate]’s Democratic majority has kept the resolution alive but bottled up in committee.

The article goes on to quote two constitutional scholars saying such resolutions carry a political message but no legal weight.

Not only is McKinley’s resolution an empty political gesture, it contradicts volumes of case law supporting the federal government’s authority to put strings on money it appropriates. Mr. desmoinesdem reminded me that conservatives love this case law when it suits their purposes–for instance, when federal courts have said universities accepting federal grants must allow military recruiters and the Reserve Officers’ Training Corps (ROTC) on campus.

I’m glad Senate Democrats are not spending the public’s time and money to advance McKinley’s “state sovereignty” campaign. It isn’t the first time McKinley has wasted the Senate’s time on matters settled by courts. During the closing weeks of the session, McKinley pleaded with Senate Majority Leader Mike Gronstal to co-sponsor a leadership bill to ban same-sex marriage. Gronstal refused.

McKinley seems to be using the “state sovereignty” resolution to set himself apart from other Republicans as he “aggressively” explores a run for governor. I’m guessing that will be a waste of his own time. He has few relationships with heavy-hitting Republican donors, and social conservatives blame him for not making sure a marriage bill was filed in time to reach the floor during this year’s legislative session (see also here). He doesn’t have a lot of legislative achievements to run on, unless you count holding his caucus together to vote down three of Governor Chet Culver’s nominees on specious grounds.

McKinley’s campaign website and recent media interviews have highlighted his experience as a business owner. I give full credit to McKinley for managing and growing a company during the 1980s. But his ideology on economic policy looks like it’s stuck in the 1920s. Central Iowa business Republicans don’t seem sold on him yet, though it’s possible that McKinley is among the potential candidates the Iowa First Foundation is focus-grouping.

Share any relevant thoughts in this thread. Are McKinley’s gubernatorial ambitions for real, or is Bleeding Heartland user ragbrai08 right to suspect that he is a stalking horse for Christian Fong?

The business network CNBC threw a wrench in the Republican sound bite machine yesterday by ranking Iowa the fourth best state in the country for doing business. Click the link to read Iowa’s scores for 2008 and 2009 in the ten different categories CNBC considered in compiling these rankings. (Iowa ranked ninth overall in 2008.) You can also watch the CNBC segment here.

Iowa improved in almost all of CNBC’s categories from 2008 to 2009. The biggest improvement was in the “economy” category, where Iowa went from 29th in 2008 to 4th in 2009, even as the national recession deepened. While the recession is hurting Iowa along with every other state, we are doing reasonably well under the circumstances. CNBC also moved Iowa up quite a few notches under “technology and innovation” and “transportation and infrastructure.” We have a ways to go to reach the top-ranked states in those areas, which is why the Culver administration is smart to be investing heavily in our infrastructure with the I-JOBS bonding program.

Speaking of I-JOBS, now that most of the bonds have been sold, money is starting to be awarded:

Every city and county in Iowa will receive a portion of $45 million in additional funding under I-JOBS for local street and road projects. These funds will begin being distributed to cities and counties starting next Tuesday.

In addition, $50 million in I-JOBS funds will improve 55 state highway system bridges in 29 counties across the state. Projects in the metro Des Moines area include two I-35 bridges over the Iowa Interstate Railroad, the Iowa 17 bridge over the Des Moines River, and U.S. 69 bridge over Scott Avenue.

Scroll to the bottom of this page to find links to pdf files containing a “list of I-JOBS road funding amounts for all Iowa cities and counties, as well as bridge projects.”

Meanwhile, Iowa Republicans continue to proudly oppose the I-JOBS program. Today Senate minority leader Paul McKinley and others are triumphantly Twittering about an article in the Des Moines Register: Economists question impact of I-JOBS plan. My response is after the jump.

The Republican Party opposed President Obama’s economic stimulus bill earlier this year, instead advocating a federal spending freeze in response to the recession. The misguided Republican proposal would have repeated Herbert Hoover’s big mistake, ignoring consensus among economists that deficits help end recessions.

The stimulus bill wasn’t perfect, but it contained some valuable provisions, notably aid to state governments, which can’t run deficits. While Governor Chet Culver imposed two rounds of cuts to fiscal year 2009 spending, federal stimulus funds helped lessen the severity of those cuts and avoid drastic reductions in the 2010 budget.

That’s good, because state budget cuts can further weaken an already weak economy, as the Center on Budget and Policy Priorities explained in this review of state fiscal stress across the country:

When states cut spending, they lay off employees, cancel contracts with vendors, eliminate or lower payments to businesses and nonprofit organizations that provide direct services, and cut benefit payments to individuals. In all of these circumstances, the companies and organizations that would have received government payments have less money to spend on salaries and supplies, and individuals who would have received salaries or benefits have less money for consumption. This directly removes demand from the economy. […]

Federal assistance can lessen the extent to which states take pro-cyclical actions that can further harm the economy. The American Recovery and Reinvestment Act recognizes this fact and includes substantial assistance for states. The amount of funding that will go to states to help them maintain current activities is approximately $135 billion to $140 billion – or about 40 percent of projected state deficits. Most of this money is in the form of increased Medicaid funding and a “Fiscal Stabilization Fund.” This funding will reduce the depth of state budget cuts and moderate state tax and fee increases.

Leave it to the Republicans to miss the point of stimulus aid to state governments, as I’ll discuss after the jump.

A bill to encourage consumers to purchase new and more fuel-efficient vehicles, co-sponsored by Congressman Bruce Braley (IA-01), passed the U.S. House of Representatives on Tuesday by a wide margin of 298 to 119, with two members voting “present.”

The roll call shows 59 yes votes from Republicans, including Iowa’s Tom Latham (IA-04) and Steve King (IA-05). Leonard Boswell (IA-03) also voted for the bill. Braley and Dave Loebsack (IA-02) were not present for the roll call, but it’s safe to assume that Loebsack would have voted for it, since only a handful of the most conservative House Democrats voted no.

Braley said in a statement,

“The passage of Cash for Clunkers legislation will help boost our economy, save families money, and reduce our dependence on foreign oil,” Braley said.  “Cash for Clunkers is a common-sense idea that can have a big impact on the economy, reducing emissions and saving American jobs by jumpstarting the auto industry.  I hope the passage of this bill today is a sign that this program will start benefiting families and American workers as soon as possible.”

In my opinion, this bill has much more potential to spur new car purchases and save jobs than it does to reduce emissions or our dependence on foreign oil. The increased fuel-efficiency requirements are quite modest (presumably because American car manufacturers have done a poor job of increasing fuel efficiency).

The original draft of the bill set more ambitious mileage requirements, but that changed during negotiations over the Waxman-Markey climate-change bill, to which this measure was attached:

The compromise also waters down the so-called cash-for-clunkers program*, which ostensibly encourages drivers to turn in their gas guzzlers in exchange for a federal subsidy on more fuel efficient models. Yet under the compromise proposal, the new fuel efficiencies are hardly dramatic. For example, drivers trading in trucks between 6,000 and 8,500 pounds would be eligible for a $3,500 voucher for purchasing the same-sized vehicle that’s more efficient by just 1 mile per gallon.

Daniel Becker, director of the Safe Climate Campaign, said the program does much more to help struggling automakers sell large, unpopular models than it does to reduce greenhouse emissions.

“It’s a $4 billion giveaway to move gas guzzling vehicles that nobody wants off the lots,” Becker said.

After the jump I’ve posted the press release from Braley’s office and the information from an accompanying fact sheet on how this bill would work.

The Des Moines Register profiled Dave Murphy of Food Democracy Now in Monday’s edition. The article mentioned the incredible success of the petition signed by more than 94,000 Americans. Two of the “sustainable dozen” candidates whom Food Democracy Now recommended for U.S. Department of Agriculture posts now work for the department. Drake Law Professor Neil Hamilton, also on the sustainable dozen list, is an “informal adviser” to Secretary of Agriculture Tom Vilsack.

You should read the whole Des Moines Register article. The most important passage is about how Murphy makes the case for changing agriculture policies:

[Murphy] pointed to a survey from the Organic Trade Association that showed that the U.S. sales of organic food grew nearly 16 percent between 2007 and 2008 to reach $22.9 billion. Organic foods now account for about 3.5 percent of all U.S. food sales.

For Murphy, sustainable farming is about more than the food.

He sees it as returning to a model of production that is better for the environment and one in which farmers can start without taking on deep debt to finance heavy equipment.

He said the agricultural policies today are stacked against farmers of small- to mid-sized farms in favor of larger operations. […]

Murphy stressed that he isn’t against large farm operations. He said sustainable practices can help farms of all sizes.

But Murphy does believe that the playing field ought to be leveled, for the benefit not just for smaller farms but for rural areas in general.

“That’s the best way to improve rural economies,” he said. “The more farmers there are on the land, the better it is for rural economies.”

Health and environmental concerns sparked my interest in buying local food produced sustainably, but Murphy is wise to connect the dots between agriculture policies and the economic future of rural areas. For more along those lines, read the feature on Murphy and Food Democracy Now from the Washington Post in March.

Speaking of Iowans who are incredibly committed to helping small and medium-sized farms thrive, Woodbury County’s rural economic development director Rob Marqusee has pledged to “eat only food grown within 100 miles of the Woodbury County Courthouse for the entire month of June 09 (and no meat will be allowed in the diet).” Keep an eye on Marqusee’s Woodbury Organics site next month, because he’ll be blogging about his food challenge.

Those interested in Murphy’s work should go read more on the Food Democracy Now site. Click here for past Bleeding Heartland posts that referenced Food Democracy Now’s work. Jill Richardson wrote more here about Murphy’s activist roots and the role he played during the Iowa caucus campaign.

If organic farmer Francis Thicke decides to run for Iowa secretary of agriculture in 2010, expanding local food networks will be a major theme of his campaign.

Yesterday I posted here that Representative Tom Latham (IA-04) has been taking credit for earmarks in the 2009 omnibus spending bill that he voted against.

Alert Bleeding Heartland user frogmanjim informed me that Representative Steve King (IA-05) has been playing the same game. King’s office issued an upbeat statement about $570,000 included in the economic stimulus bill that will go toward widening U.S. Highway 20 in a rural area of northwest Iowa. Of course, the statement did not mention that King voted against the stimulus. Nor did the brief news item in the Sioux City Journal.

I had a feeling that King would take credit for stimulus spending. During last year’s campaign he repeatedly misled voters about his role in securing money to widen Highway 20 (see here and here).

Time for the Democratic Congressional Campaign Committee to add Steve King’s name to the Republican Hypocrisy Hall of Fame. More than 30 House Republicans have already been inducted.

As you can see from this graph, job losses in the current recession are worse than in other recent recessions and are continuing to accelerate at a time when the U.S. economy has already started adding jobs during the past two recessions.

Paul Krugman, who has been arguing for a much larger stimulus package, is very worried:

To see how bad the numbers are, consider this: The administration’s budget proposals, released less than two weeks ago, assumed an average unemployment rate of 8.1 percent for the whole of this year. In reality, unemployment hit that level in February – and it’s rising fast.

Employment has already fallen more in this recession than in the 1981-82 slump, considered the worst since the Great Depression. As a result, Mr. Obama’s promise that his plan will create or save 3.5 million jobs by the end of 2010 looks underwhelming, to say the least. It’s a credible promise – his economists used solidly mainstream estimates of the impacts of tax and spending policies. But 3.5 million jobs almost two years from now isn’t enough in the face of an economy that has already lost 4.4 million jobs, and is losing 600,000 more each month. […]

So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.

At MyDD Charles Lemos wonders whether current job losses may become permanent because of the manufacturing sector’s continuing decline.

Only the biggest layoffs make headlines, as when John Deere cut 325 jobs in Dubuque and Davenport last week. But almost all of us have friends or relatives who have lost their jobs in the past six months. Thankfully, none of my recently-unemployed friends are likely to lose their homes, but lots of people aren’t so lucky. Tent cities are booming across the country.

If you are looking for work, read this piece by Teddifish on How to get a job when no one is hiring.

Daily Kos diarist plf515 just found a new job and shared some advice in this diary:

How did I get this job?

I told everyone I was looking for work!  

This particular lead came from an announcement I made on SAS-L a mailing list about software that I use.  I am a frequent contributor there, someone who has read my work saw my mention, and then forwarded me a link to a job offer. […]

But I didn’t just mention it there.  I told everyone. I wrote a diary here; and I joined dkos networking; I announced it on mailing lists; I told my friends; I told former employers; I told the guy who does our dry cleaning; I told EVERYONE.  I also left cards advertising my consulting business all over.  

Can you find a job in this economy? Well, there are no guarantees.  But, if people don’t know you’re looking, they’ll never tell you about any openings.  

MyDD user ragekage has specific advice for people pursuing a career in nursing because they think it is a “recession-proof” occupation.

This thread is for any comments about unemployment or helpful advice about finding jobs.

The Democratic Congressional Campaign Committee announced that 40 Democrats in the U.S. House of Representatives will be in the “Frontline Program,” which seeks to protect incumbents in potentially vulnerable districts. Once again, Leonard Boswell of Iowa’s third district will be a Frontline Democrat. Here’s what the designation means:

The Frontline Program is a partnership between the DCCC and Members which lays the ground work for the 2010 cycle by supporting and expanding their fundraising and outreach operations. Frontline Members must sign a memorandum of understanding, strengthened this cycle to reflect the challenging political environment, that requires Members to meet aggressive fundraising goals, accelerate volunteer and recruitment efforts, and increase their online networking.

The DCCC’s Frontline Program is a proven success. Frontline Members and the DCCC did its work effectively and early in the 2008 cycle.  As a result, the DCCC’s independent expenditure campaign made a significant investment in only 10 of 34 Frontline districts – approximately 15 percent of the IE’s budget.

I’ve put the DCCC’s press release after the jump. Most of the others named to the Frontline list appear to be in more vulnerable districts than Boswell. Republicans targeted Boswell during his first five re-election campaigns but did not make a serious challenge in IA-03 in 2008. Boswell defeated Kim Schmett by 56 percent to 42 percent in November.

Here’s an interesting fact from the DCCC’s statement, which underscores how the Republican Party has become increasingly uncompetitive in large parts of the country:

There are 83 Democrats in districts that President [George] Bush won in 2004, while there are only six (6) Republicans in seats that Senator [John] Kerry won.

Presumably a significant number of those 83 districts swung to Barack Obama in the 2008 election, as Iowa’s third district did. But the final presidential election results by Congressional district have not been calculated everywhere in the country.

I would be very surprised if the DCCC had to spend resources defending Boswell in the next election. Many House Democrats are in a more precarious position. Unfortunately, the irony is that re-electing Boswell in 2010 could make IA-03 a very tough hold for Democrats in 2012.

The DCCC is staying on offense as well, launching robocalls this week in the districts of 12 potentially vulnerable House Republicans. A few weeks ago the DCCC ran radio ads in 28 Republican-held House districts, including Iowa’s fourth district. Tom Latham is not being targeted in the current robocall effort, however. It’s just as well, since IA-04 does not appear to be among the top Democratic pickup opportunities for the next cycle.

Chris Bowers wrote a good post on where Representative Bruce Braley’s new Populist Caucus fits in among House Democrats. The whole piece is worth reading, but here’s an excerpt:

Clearly, there is a strong tendency toward the Progressive caucus among the Populists, even though they were organized by a New Democrat. Further, Progressive punch puts the median lifetime score on “crucial votes” for this group at 55.5 of 256 (between [Joe] Courtney at 54 and [Dave] Loebsack at 57) in the Democratic caucus, placing it decidedly in the left-wing of the party.

[…]

Notably, the Populists are also heavy on the class of 2006, as 14 of the 20 members listed by the Huffington Post were first elected to Congress that year (and Massa came within an inch of being a 15th that year). Only Boswell, DeFazio, Filner Sanchez and Schakowsky were first elected to Congress before 2006. As such, while it displayed the same fractured tendencies of all ideological caucuses across the three bailout votes, the Populist Caucus appears to be primarily a caucus of progressive sophomore Representatives. This is particularly interesting since the class of 2006 was supposed to be a conservative dominated class ushered in by then -DCCC chair Rahm Emanuel. Now, the progressive members of that class appear to have organized a new caucus for themselves.

I didn’t realize until I read this page on Braley’s website that Tom Harkin chaired a House Populist Caucus during the 1980s:

In February of 1983, a group of 14 Midwest Democratic members of Congress founded the first known “Populist Caucus” with the goal to “fight for such economic goals as fairer taxes, lower interest rates and cheaper energy.”

The original Populist Caucus was chaired by then-Rep. Tom Harkin (D-IA).  The other members in the caucus were Berkley Bedell (D-IA); Lane Evans (D-IL); Tom Daschle (D-SD); Al Gore (D-TN); Timothy Penny (D-MN); Jim Weaver (D-OR); Byron Dorgan (D-ND); Harold Volkmer (D-MO); James Oberstar (D-MN); Bob Wise (D-WV); Frank McCloskey (D-IN); Bill Richardson (D-NM); Gerry Sikorski (D-MN); and Mike Synar (D-OK).

The first Populist Caucus dissolved by the mid-1990’s.

Several members of that original Populist Caucus had been elected to the U.S. Senate or had left the House for other reasons by the early 1990s.

Side note: Bill Richardson once identified himself as a populist? Wow.

The new Populist Caucus platform is on Braley’s website:

  1. Fighting for working families and the middle class by creating and retaining good-paying jobs in America, providing fair wages, proper benefits, a level playing field at the negotiating table, and ensuring American workers have secure, solvent retirement plans.

  2. Cutting taxes for the middle class and establishing an equitable tax structure.

  3. Providing affordable, accessible, quality health care for all Americans.

  4. Ensuring quality primary education for all American children, and affordable college education for all who want it.

  5. Defending American competiveness by fighting for fair trade principles.

  6. Protecting consumers, so that Americans can have faith in the safety and effectiveness of the products they purchase

I will be interested to see how the Populist Caucus weighs in on the coming debates over health care, workers’ rights and tax policy.

A full list of the 23 founding Populist Caucus members is after the jump.  

Remember how urgent it was for Congress to approve the Wall Street bailout last fall to free up credit? Not surprisingly, things didn’t work out that way:

A new report out of the Treasury Department Tuesday confirmed what many lawmakers, housing advocates, small businesses and individual consumers have known all along: That despite hundreds of billions of dollars flowing from Washington to the finance industry, bank lending among recipients of the Troubled Asset Relief Program fell in the last three months of 2008.

Among the 20 largest TARP recipients, median mortgage and business lending both fell by 1 percent over that span, Treasury found, while median credit card lending rose 2 percent, “reflecting greater reliance on existing credit lines by consumers.”

The findings were based on a survey of the 20 banks receiving the most federal help under the TARP, and marks the first in what will be a series of monthly reports analyzing the lending trends among bailed-out banks.

It would be nice to know what the banks are doing with the bailout money, but they don’t want to tell anyone.

How disappointing that Barack Obama’s Treasury Secretary Timothy Geithner wants to continue the misguided effort begun by George Bush’s Treasury Secretary, Henry Paulson.

Here are some more links on why Geithner’s plan “fails on almost every level.” Excerpt:

Robert Kuttner offers a strong analysis of Geithner’s strategy to salvage the banking industry in The American Prospect, noting that Geithner is explicitly avoiding the simplest and cheapest solution in favor of propping up the current Wall Street regime. The current plan is designed to support a financial architecture that has proven completely ineffective in maintaining the nation’s basic economic functions.

Someone who works for a non-profit organization told me last week that he has filled out a detailed six-page application for a $1,000 federal grant, while Geithner wants to get $350 billion on the basis of a vague two-page proposal.

Josh Marshall notes that “a lot of key political appointments at the Treasury haven’t been made yet, let alone been confirmed.” He takes a stab at explaining why:

one of the big issues is that it’s actually hard to find people with the requisite knowledge of banks and the capital markets who aren’t also compromised — either in policy or business terms — by the housing bubble and the rest of the financial collapse. And that raises again as a question: why have none of the people who were financial orthodoxy dissidents and saw what was coming been brought in to the administration. I know I’m hardly the first one to bring this up. And we know that the big appointees — Summers and Geithner — were part of the mix. But there aren’t even any of them further down into the appointment structure. They’re all still on the outside.

Disturbing.

Although GOP leaders are boasting that zero House Republicans voted for the stimulus bill, I have a sneaking suspicion that once this so-called “wasteful spending” starts working its way through the economy, Republican members of Congress will find a way to take credit for it.

We saw last fall that Steve “10 worst” King used his first television commercial to take credit for progress toward widening Iowa Highway 20. The TIME-21 plan approved by the state legislature last spring–not King’s work in Congress–made that project possible. Nevertheless, King continued to mislead voters about his role in moving the Highway 20 project forward.

At least two House Republicans are already playing this game with respect to the stimulus. David Waldman/Kagro X predicts,

Standard operating procedure, of course. Oppose the bill viciously, vote against it, then show up at every ribbon cutting in the district paid for by federal funds, and cry “Politicization!” if they’re not invited.

Paul Rosenberg’s take on this story is also worth a read.

Democrats need to be on the lookout for this kind of weaselry over the next couple of years. Help from Iowans living in the fourth and fifth Congressional districts would be most appreciated.

If you see Steve King or Tom Latham taking credit for stimulus spending they voted against, either in an official press release or in a local newspaper, radio or television news story, please post a diary about it at Bleeding Heartland, or e-mail me with the details (desmoinesdem AT yahoo.com).

UPDATE: More Republicans are touting wonderful provisions in the stimulus bill they voted against.

President Barack Obama will have a very large bill to sign on Monday. Yesterday the U.S. House of Representatives passed the $787 billion economic stimulus bill by 246 to 183. As expected, no Republicans voted for the bill. Iowa’s three Democrats in the House voted for it. Looking at the roll call, I was surprised to see that only seven House Democrats voted against this bill (one voted “present” and one did not vote). I did not expect that much support from the 50-odd Blue Dog Democrats. Good for them!

In the Senate, supporters of the stimulus managed exactly 60 votes after Senator Sherrod Brown flew back from Ohio, where he was attending his mother’s wake. All Democrats, two independents, and three Republicans (Olympia Snowe, Susan Collins and Arlen Specter) voted for it. According to Specter, at least a few other Senate Republicans supported the bill but were afraid to vote for it (fearing a challenge from the right in the next GOP primary). I’m no fan of Specter, but I give him credit for casting a tough vote today. As brownsox explains, conservative Republicans in Pennsylvania are eager to take Specter out in the 2010 primary, having apparently forgotten how badly right-wing Senator Rick Santorum got beaten in 2006.

Daily Kos diarist thereisnospoon, a self-described “hack” who conducts focus groups for a living, is giddy about the potential to make Republicans pay in 2010 for voting against “the biggest middle-class tax cut in history.”

On the whole, this bill is more good than bad, but I agree 100 percent with Tom Harkin’s comments to the New York Times:

Even before the last touches were put to the bill, some angry Democrats said that Mr. Obama and Congressional leaders had been too quick to give up on Democratic priorities. “I am not happy with it,” said Senator Tom Harkin, Democrat of Iowa. “You are not looking at a happy camper. I mean they took a lot of stuff out of education. They took it out of health, school construction and they put it more into tax issues.”

Mr. Harkin said he was particularly frustrated by the money being spent on fixing the alternative minimum tax. “It’s about 9 percent of the whole bill,” he said, “Why is it in there? It has nothing to do with stimulus. It has nothing to do with recovery.”

The $70 billion spent on fixing the alternative minimum tax will produce little “stimulus bang for the buck” compared to most forms of spending. The upper middle class and upper class earners who will benefit are likely to save rather than spend the money they get back.

As exciting as it is to see increased funding for high-speed rail, I fear that the bulk of the much larger sum appropriated for roads will go toward new highway construction rather than maintaining our existing infrastructure.

But I’ve buried the lede: what will the stimulus bill do for Iowa?

Iowa Politics linked to two White House documents about the impact in terms of spending and jobs created. This pdf file estimates the number of jobs created in each state and in each Congressional district within that state. It estimates 37,000 jobs created in Iowa: 6,600 in the first district, 7,000 in each of the second and third districts, 6,700 in the fourth district and 6,200 in the fifth district.

Prediction: Tom Latham and Steve King will take credit for infrastructure projects in their districts during the next election campaign, even though both voted against the stimulus bill.

This pdf file shows how much money Iowa will receive under different line items in the stimulus bill. Even more helpful, it also shows the figures for the original House and Senate bills, so you can get a sense of which cuts were made. The bill that first passed the House would have directed $2.27 billion to Iowa. The first Senate version reduced that number to $1.8 billion. The final bill that came out of conference directs about $1.9 billion to Iowa.

If you delve into the details of this document you’ll understand why Harkin isn’t thrilled with the bill he voted for. They took out school construction funds and extra money for the Low Income Home Energy Assistance Program (LIHEAP), for crying out loud.

“Bizarro Stimulus” indeed.

Iowa Independent reports that Harkin and Chuck Grassley “agree that the newly conceived formula used to distribute the $87 billion Medicaid portion of the bill shortchanges Iowa.”

After the jump I’ve posted statements from Representatives Dave Loebsack and Bruce Braley on the stimulus bill. Both talk about the jobs that will be created in Iowa. Loebsack emphasizes the tax cuts that 95 percent of American families will receive as a result of this bill. However, he also expresses his concern about what he views as inadequate funding for modernizing schools in the final bill.

Braley’s statement highlights an amendment he wrote providing low-interest loans for biofuels producers.

I would have been happy to post a statement from Leonard Boswell too, but his office has repeatedly refused my requests to be added to its distribution list for press releases. Hillary Clinton may have a prestigious job in Barack Obama’s cabinet and Joe Lieberman may be welcome in the Democratic Senate caucus, but Boswell’s press secretary seems ready to hold a grudge forever against the blogger who supported Ed Fallon.  

Representative Steve King bragged about his 11th-grade research project in the Thursday edition of the Des Moines Register:

As a junior at Denison High School, I wrote a term paper on President Franklin D. Roosevelt and the New Deal. I began working on the paper with the intention of confirming what I had been taught in school – that FDR’s government recovery programs brought America out of the Great Depression.

I started my research believing in the success of Roosevelt’s economic-recovery programs. To support this claim, I spent hours at the Carnegie Library in Denison reading past editions of the local, biweekly newspaper.

My reading began with the 1929 stock-market crash, and I examined every issue through the attack on Pearl Harbor in December 1941. Those stacks of old papers turned upside down everything I had been taught in history and government class about the New Deal. As I searched for information proving the New Deal stabilized the American economy, I instead found the exact opposite: high unemployment, a struggling stock market and continued hard times.

Later statistical findings confirm my 11th-grade research. Throughout the 1930s, the unemployment rate never dipped below 14 percent. FDR’s tinkering with the free market frustrated investors, and the 1929 high point for the Dow Jones industrial average was not reached again until 1954.

Roosevelt possessed tremendous leadership skills and inspired many Americans, including my hard-hit family. Charisma aside, historians often inflate the true economic record of the New Deal. Roosevelt tried one big government program after another, with poor results. Many of Roosevelt’s programs and initiatives led the government to compete directly with the private sector for capital and workers, with Washington making the rules.

Massive government spending did not lift the United States out of recession. Instead, FDR’s big-government programs prolonged the Great Depression. The best we can say about the New Deal is that it may have blunted the depths of the Depression, but the trade-off was it delayed economic recovery until World War II and our post-war industrial advantage brought America out of the Depression.

Ah yes, the “poor results” of big-government programs introduced by FDR. Programs like Social Security, which dramatically reduced poverty among the elderly, and the Fair Labor Standards Act, which “set maximum hours and minimum wages for most categories of workers.”

But never mind the safety net for seniors and regulations that improved the quality of life for workers. What about King’s central claim, that the New Deal prolonged the Great Depression? This is now a key right-wing talking point against government spending in Barack Obama’s stimulus package.

It is wrong to say that no economic recovery occurred during the New Deal. On the contrary,

The economy had hit rock bottom in March 1933 and then started to expand. As historian Broadus Mitchell notes, “Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically.”[18] Economic indicators show the economy reached nadir in the first days of March, then began a steady, sharp upward recovery. Thus the Federal Reserve Index of Industrial Production hit its lowest point of 52.8 in July 1930 (with 1935-39 = 100) and was practically unchanged at 54.3 in March 1933; however by July 1933, it reached 85.5, a dramatic rebound of 57% in four months. Recovery was steady and strong until 1937. Except for unemployment, the economy by 1937 surpassed the levels of the late 1920s. The Recession of 1937 was a temporary downturn. Private sector employment, especially in manufacturing, recovered to the level of the 1920s but failed to advance further until the war.

Unemployment continued to be high by today’s standards throughout the 1930s, but King ignores the sharp reduction in unemployment following the introduction of New Deal policies.

The bottom line is this: the unemployment rate dropped by 9 percent during the pre-World War II FDR era, and the absolute number of unemployed people dropped by 36.7 percent (from 12.8 million unemployed in 1932 to 8.1 million unemployed in 1940).

World War II significantly reduced the number of unemployed Americans, but again, it is false to claim that the New Deal programs accomplished little on the employment front.

By way of comparison, under King’s hero Ronald Reagan, the unemployment rate only dropped by 2.1 percent, and the absolute number of unemployed people dropped by 19.0 percent (from 8.2 million in 1981 to 6.7 million in 1988).

The U.S. population was a lot bigger during Reagan’s presidency than it was in FDR’s day. If Reagan’s policies were so much better for putting people to work, why did we not see a larger decrease in the total number of unemployed Americans during the 1980s? Why did we see such marginal improvement in the unemployment rate during Reagan’s presidency?

If we look at employment figures under every president since FDR, King’s nemesis Bill Clinton comes out ahead. During his presidency, the unemployment rate declined by 2.9 percent, and the total number of unemployed dropped by 36.3 percent (from 8.9 million in 1993 to 5.6 million in 2000).

Note: Chase Martyn had a go at King at Iowa Independent, but he was too kind in my opinion. The facts do not support King’s assertion that the New Deal delayed economic recovery and failed to address high unemployment.

Someone please talk King into running for governor in 2010 so we can get a less odious Republican representing Iowa’s fifth district.