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Home Publications Blogs Beat the Press The Deficit Hawks Opposed to the Jobs Bill Were Too Dumb to See an $8 Trillion Housing Bubble

The Deficit Hawks Opposed to the Jobs Bill Were Too Dumb to See an $8 Trillion Housing Bubble

Tuesday, 01 June 2010 20:21

David Leonhardt devoted his column day to consider the dilemma of the deficit hawks who are trying to decide whether to support the jobs bill. It outlines several of the main arguments as to why it would make sense to support additional jobs measures, while also noting (and exaggerating) the basis for concerns about the deficit.

However, the article neglected one important factor in the debate. We are in this situation because the deficit hawks, like Representative Jim Cooper who is featured in the piece, were unable to see the $8 trillion housing bubble that eventually sank the economy. In other words, we have 9.9 percent of the workforce unemployed, with almost as many either involuntarily working part-time or having left the workforce altogether, because people like Jim Cooper could not see the largest financial bubble in the history of the world.

Mr. Cooper enjoys a hefty six-figure salary and can look forward to a comfortable pension. This makes him far better off than the tens of millions of workers who are now suffering because of the incompetence of Mr. Cooper and his colleagues.

In any debate over jobs measures it is worth noting the irony that the people who are suffering at present are suffering due to the incompetence of people who are very comfortable, in spite of having failed disastrously at their jobs. And, the incompetents are now torn deciding the fate of those who are suffering as a result of their incompetence.

Comments (3)Add Comment
written by izzatzo, June 02, 2010 12:50
There's a big difference between Katrina and the BP spill, one an act of nature, the other an act of man, with the caveat that man enabled Katrina with faulty flood levees.

Earlier differences between liberals and conservatives used to be more straightforward divisions between what the private versus public sector should provide via redistribution, where Katrina would easily qualify as an unavoidable risk that should be born by government, and the BP spill would have readily been condemned by conservatives and liberals alike as a matter of corruption and private liability.

Things have changed so much that now economists like Dean Baker are making arguments that conservatives used to make, and being branded as liberal for doing it. In the past, true conservatives, for example Milton Friedman, would never have supported capping BP's liability and shifting the rest onto government. Friedman, like Baker, knew that much of the nanny state was designed to make the rich richer, he just had a different solution to the problem.

Politicians like Jim Cooper, painting everything in sight with the broad brush of "who could have known", have likewise become proficient at turning conservatism on its head to look like traditional liberalism (19th, not 18th century), except the proceeds go to the coffers of corporations with government handouts and protections. This is where Ron Paul got it right, that Obama is not a socialist, he's a corporatist.

When Baker hammers people day in and day out like Cooper for "missing" the bubble, he's not a liberal hammering a conservative, he's a conservative hammering a liberal for not acknowledging what was going on right under his nose, the same way a conservative would attack the Army Corp of Engineers for "missing" the levees in Katrina and not one getting fired for doing it. They just keep getting promoted.
Hardly a "Jobs" bill
written by AndrewDover, June 02, 2010 4:55
How many people will become employed if the bill passes? Look at the significant money involved in the bill and the job growth is hard to find.


Spending in $ billions over 10 years
39.8 extension of unemployment insurance
22.9Defer 20% medicare physician rate reduction for 2 years.
6.65R&d tax credit
4.6Settle indian trust fund and USDA black farmer discrimination lawsuits

Tax Increases in $ billions
17.7 Treat 75% of "carried interest" without invested capital as income.
11.25Remove S Corporation loophole that avoids Social security/Medicare taxes
14.45Eliminate foreign tax credit loopholes.
10.7 Increase Oil spill liability per barrel tax from 8 to 34 cents
6.3 Prevent splitting foreign tax credits from income
written by Lord, June 03, 2010 7:30
Anyone concerned about the deficit should be worrying about what caused it, not the result, that is why concern about the deficit is as phony as it gets.

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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.