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Home Publications Blogs Beat the Press Robert Samuelson Is Worried About 12,000 Jobs in the Gulf Oil Industry?

Robert Samuelson Is Worried About 12,000 Jobs in the Gulf Oil Industry?

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Monday, 20 September 2010 04:37

Robert Samuelson is apparently very worried about the loss of "up to 12,000" jobs due to President Obama's temporary moratorium on oil drilling in the Gulf. For context, this job loss is less than 0.01 percent of total employment. It is a bit more than a typical day's job growth in the years 1996-2000.

Samuelson is also concerned about President Obama's plan to allow President Bush's tax cut for the wealthy to expire. He cites figures from Mark Zandi, that the wealthiest 2 percent of the population "represent almost a quarter of all consumer spending" (italics in original).

While it is true that the richest 2 percent impose a hugely disproportionate strain on the economy's resources, the relevant issue is their marginal propensity to consume. All studies, including those by Zandi, show that the marginal propensity of the rich to consume is very low. In other words, if we give Bill Gates another $20 million in tax breaks, it is unlikely to affect his consumption to any significant extent. 

Samuelson also points out that many small business owners will be affected by the end of the Bush tax cuts. The vast majority of the small business owners who are affected will see a trivial increase in their tax bill. The Joint Tax Committee of Congress projected that the average tax hit on tax filers with incomes between $200,000 and $500,000 (the vast majority of the affected small businesses) would see an increase in their taxes of just $500. This is unlikely to have much impact on their hiring and growth. It is also worth noting that the higher Clinton era tax rates were in place in the late 90s when the economy was generating more than 8,000 jobs a day.

Comments (4)Add Comment
...
written by izzatzo, September 20, 2010 6:39
... the wealthiest 2 percent of the popualtion "represent almost a quarter of all consumer spending" (italics in original).

While it is true that the richest 2 percent impose a hugely disproportionate strain on the economy's resources, the relevant issue is their marginal propensity to consume.


This has been empircally verified in airplanes with first class sections. While the average propensity to consume is high for the wealthy, the marginal propensity to consume is low due to sharply diminishing returns to utility for the next increment of luxury, while those in the peanut gallery are known to maintain a high MPC and scarf up the very last peanut with the same pleasure as eating the first one.
blackmailers are not patriots
written by frankenduf, September 20, 2010 8:12
if u try to raise my taxes, i will not open a small business, i mean move my assets to antigua, i mean move the team to another city, i mean pull out on funding ur election or ur yacht, i mean fire all us workers and hire all malaysian, i mean drill baby drill
...
written by fuller schmidt, September 20, 2010 8:19
What is it with Samuelson? I thought he was an Economist. There are only two choices: he's either stupid or a propagandist.
12,000 jobs have not been lost
written by Mike Stagg, September 21, 2010 2:06
As a Louisiana resident, I have been following the BP Gulf Gusher as well as the moratorium and the doom predicted by anti-moratorium forces. At some point during the summer, I noticed that the weekly report from the Louisiana Workforce Commission on new unemployment claims was down from the previous week and down from the previous year. I started tracking those numbers on my blog.

Here's a link to a post with a chart of new unemployment claims from April 1 through September 3:
http://democrat2democrat.blogspot.com/2010/09/exposing-hoax-new-unemployment-claims.html

If 12,000 people had lost their jobs due to the moratorium, surely some sign of these job losses would have shown up in these weekly unemployment reports — particularly since the leadership of the Workforce Commission had been such an active participant in the anti-moratorium scare campaign that culminated in the 'Rally for Economic Survival' held here in Lafayette in July.

No such losses registered.

Considering the massive propaganda effort that went into producing the anti-moratorium rally and the general hysteria about its predicted impact, it seems certain that had such job losses occurred, opponents of the moratorium would certainly have had the compliant local media herded to the site of the firings.

Did not happen. I don't believe the job losses happened, based on the numbers issued weekly by the Louisiana Workforce Commission. I have no idea where the Commerce Department got their numbers.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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