Sixty percent of Americans want “additional government spending to create jobs and stimulate the economy,” according to a new Gallup poll. This shouldn’t be surprising given that people consistently rate the economy and the jobs as the most important problem facing the country. Of course, Republicans and conservative Democrats are tone-deaf:

President Barack Obama’s plea for more stimulus spending as insurance against a double-dip recession hit a roadblock in the Senate on Wednesday, the victim of election-year anxiety over huge federal deficits.

A dozen Democrats joined Republicans on a key 52-45 test vote rejecting an Obama-endorsed, $140 billion package of unemployment benefits, aid to states, business and family tax breaks and Medicare payments for doctors because it would swell the federal debt by $80 billion.

The swing toward frugality runs counter to the advice of economists who support the bill’s funding for additional jobless benefits and help to states to avoid layoffs of public service jobs. They fear that the economy could slip back into recession just as it’s emerging from the biggest economic downturn since the Great Depression.

Federal Reserve Chairman Ben Bernanke warned last week that while lawmakers need to come up with a plan for tackling the nation’s long-term deficit crisis, the U.S. recovery is still fragile. It’s too early for large, immediate spending cuts, Bernanke said.

“We’ve got to do more to build on the existing jobs momentum and that’s what these targeted measures are about,” said White House economist Jared Bernstein.

Thanks to these so-called ”fiscal conservatives,” only a scaled-down version is likely to pass now. What’s most interesting is that the Senate had earlier passed a bigger bill, but that was before tea partiers started showing influence in the primaries. But, as the poll points out, the voters at large – many of whom are also very concerned about the federal debt - think that getting out of our current economic/unemployment situation should be the top priority (and it should be pointed out that a stronger economy and more jobs would lead to higher revenue, and thus, lower deficits). Yet politicians are allowing a small minority of angry, anti-government bozos to get in the way of recovery.

Of course, as more jobs are lost (or fail to be produced) and people’s unemployment benefits run out, Republicans will blame President Obama and pro-stimulus Democrats in Congress (even as they take credit for projects in their districts paid for by that money). And sadly, so will a lot of voters. And thus, their true agenda is clear.

The House of Representatives approved an aid bill to Chili and impeached a Lousiana judge. They also approved a bill to establish a federal research strategy for addressing harmful algal blooms. In perhaps the most interesting news, the House Budget Committee will finally consider a health care reconciliation bill Monday.

After Sen. Jim Bunning dropped his one-man hold, the Senate passed an extension of unemployment benefits.

One of those ideas that always comes out of hiding when conservatives need another (phony) reason to blame economic ills on those pesky liberals is that the very existence of the minimum wage puts the very people out of work who supposedly benefit from it. I’ve already addressed this on the blog before, so I’m not going to go into a great deal of detail debating the same points again. This latest attack comes via Charles Laneon the Washington Post. Here’s what he has to say:

Reduce the federal minimum wage. In 2007, Congress enacted a three-step increase in the minimum wage, which was then $5.15 per hour. The final installment took effect in July, raising the rate to $7.25 per hour. In the meantime, unemployment climbed from 4.7 percent to 9.5 percent.

I am not saying that the minimum wage increase caused this; far from it. But study after study has shown that this supposed benefit to the poor prices low-skilled workers out of entry-level jobs. It was unwise to keep raising the cost of hiring them in a recession.

Now Lane quotes an economist named David Neumark published in the WSJ in support of his assertion. I shall do so as well:

Despite a few exceptions that are tirelessly (and selectively) cited by advocates of a higher minimum wage, the bulk of the evidence — from scores of studies, using data mainly from the U.S. but also from many other countries — clearly shows that minimum wages reduce employment of young, low-skilled people. The best estimates from studies since the early 1990s suggest that the 11% minimum wage increase scheduled for this summer will lead to the loss of an additional 300,000 jobs among teens and young adults. This is on top of the continuing job losses the recession is likely to throw our way.

I’ll take his word for it that there are such studies, although in today’s online world I just don’t know why he can’t link to some of them. But there are plenty of studies that point the other way as well. Check out what the Economic Policy Institute says:

Instead, Figure B illustrates how teen employment is driven far more by larger labor market employment trends than by any effects of minimum wage changes. The black lines in Figure B mark times when Congress increased the minimum wage to keep up with inflation.  The two-step increase in 1990 and 1991 occurred during a period of deterioration in the labor market, and the teen employment share dropped.  The two-step increase in 1996 and 1997 occurred during a strong labor market, and the teen employment share increased. The three-step increase in 2007, 2008, and 2009 occurred during a weak labor market, and the teen employment share fell.

This observation is consistent with what careful empirical studies have found. While it is true that there is some disagreement among economists about whether increasing the minimum wage increases or decreases employment, there is a consensus on the essential point: the impact of a minimum wage raise on jobs, whether positive or negative, is small. The warnings of massive teen job loss due to minimum wage increases simply do not comport with the evidence.

I suggest reading all three articles in their entirety in order to fully comprehend the arguments for and against minimum wage. However, the EPI is right when it says that there is no link between minimum wage and employment. If that assertion were true, one would have to somehow reconcile the fact that as we have increased minimum wage over the course of decades, employment has fluctuated both up and down reflecting no absolute gain in unemployment over time which reflects the increases in minimum wage. In other words, they would have to show that before a minimum wage was ever instituted, employment was a certain percentage (low, since we’re blaming lots of unemployment on every increase). Let’s just say it was supposedly 10% (in U-6 terms). Supposedly, MW increases would have raised that percentage absolutely over time regardless of temporary fluctuations in employment related to economic cycles.  Is that what we see happening? Let’s check out this chart, which gets its figures from BLS numbers.

In 1920, the rate is 5.2%. In 2001, it’s 4.7%. So where’s the absolute increase in unemployment caused by minimum wage? If you look over the chart you can easily see that fluctuations are occurring constantly, but that overall unemployment has not risen in an absolute sense. In short, get over it, conservatives. Minimum wage isn’t hurting anybody.

As completely predicted:

Most Texas businesses next year will pay nearly triple the unemployment-benefits tax that they paid this year, the Texas Workforce Commission announced today.

The minimum tax rate owed per worker will be nearly $65 in 2010, up from about $23 this year.

Two-thirds of Texas employers, or about 255,000, will pay the minimum rate next year. This year, 278,000 – or 74 percent – paid the lowest rate.

“More of them will have an ‘experience rating’ because more of them have had layoffs over the past year” and no longer qualify to pay the minimum rate, commission spokeswoman Ann Hatchitt explained.

The rates are the highest this decade and appear to be the heaviest unemployment taxes assessed by the state since the oil and real estate bust of the late 1980s, according to commission records.

Because of the recession, the commission needs to raise or borrow $4.3 billion next year to pay for newly laid-off workers’ first 26 weeks of unemployment benefits and to replenish the state’s unemployment insurance trust fund.

[...]

critics have noted that Texas ranks near the bottom of states in the percentage of laid-off workers who receive help – about 34 percent last spring, according to federal statistics.

The critics also say the tax hit on employers is heavier because Gov. Rick Perry rejected federal stimulus money for unemployment benefits. The Republican governor said there were too many strings attached.

Texas could have avoided levying more than one-fifth of next year’s taxes if it had accepted $556 million of stimulus money. That’s true even if federally required liberalization of eligibility rules immediately were to add $90 million of new benefits costs, which some experts say wouldn’t have happened for many months.

Let’s lay out the sordid tale of Perry and the unemployment fund in Texas. Last year, when the unemployment trust fund had a surplus, he called for tax cuts even though the Comptroller was predicting a $9.1 billion drop in revenue for the state. When stimulus funds were being handed out earlier this year, Perry made a big noise about refusing government “bailout” money…until he relented and decided to accept it after all. But not all of it. He still refused to accept funds allocated for unemployed Texans. And as a result, unemployment taxes will triple to cover a projected $4.3 billion shortfall. Why go to all this trouble? It’s simple: Perry is counting on the stupidity of Texas Republican voters. He cuts taxes because he knows that Republican voters love a good tax cut, and won’t be bothered to pay attention to hard numbers about state deficits. He grandstands about the stimulus because he knows that Texas Republicans hate Obama and the “bailouts”, but after making noise he decides to go ahead and take most of the money after all because even Perry can see how desperate Texas is for the money. But to soften that blow he refuses extra funds for unemployment, citing “strings” that come attached to the money, because he knows that Texas Republicans can’t stand the idea of taking money from Obama, nor can they stand the idea of some bum getting a check because he doesn’t want to work. And now it’s revealed that Texas Workforce Commission will have to raise taxes and borrow money to cover what stingy unemployment Texas allows. And do you know who Texas employers blame when they see their unemployment taxes go up next year? Obama, and “tax and spend” liberals. How does he get away with this? Because Perry’s “defiance” of Obama gets NY Times attention, and the result gets a story in the Dallas Morning News.

Perry counts on Texas Republicans being too stupid and having too short of an attention span to notice the completely natural and predicted results of his policies, and they are more than happy to oblige.

It took about five minutes for State House and Senate Democrats to denounce Perry’s decision to reject stimulus funding for an expansion of unemployment benefits and vow to change the law so that Texas is eligible for the additional funding.

And BOR explains why dammit.

While Republicans and their useful fools in the media elite are busy complaining about “pork” that might possibly arise to single-digit percentage points of the total stimulus package, economists are worried that the stimulus package isn’t doing enough to boost the economy. Paul Krugman:

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.

There are now three big questions about economic policy. First, does the administration realize that it isn’t doing enough? Second, is it prepared to do more? Third, will Congress go along with stronger policies?

Krugman said the stimulus package wasn’t enough when it was first proposed, and he’s hardly changed his view now, with the economy worsening at a faster clip than predicted and job losses so vast that it appears an economic restructuring is taking place. But he’s not alone. Here are a few other opinions from this Washington Post article:

Analysts increasingly view the administration’s actions so far as insufficient given the scope of the problem. The stimulus package was designed to “save or create” 3.5 million jobs, according to the administration. But the nation has already lost 4.4 million jobs since the start of the recession. Many banks and other financial institutions, whose health is critical to the economy, are teetering, and the Treasury Department has yet to finalize the details of its plans to remove from their balance sheets the toxic assets dragging them down.

“It’s premature to say we need another stimulus, but the economy is performing much worse than when [the law] was signed, and the odds are increasing that we’ll need a bigger policy response,” said Mark Zandi of Moody’s Economy.com, who has advised Democratic lawmakers. “What we’ve learned is policy has been a step behind this whole downturn. It’s important to get a step ahead.”

The International Monetary Fund yesterday urged governments worldwide to consider additional fiscal stimulus, noting that the public sector must help prevent a collapse of confidence.

[...]

Regulators…are conducting “stress tests” of major banks so that the Treasury Department can better determine what kind of financial support they might need. Those tests assume that, in a particularly bleak scenario, the unemployment rate will average 8.9 percent this year and 10.3 percent next year. But if the government projections on unemployment turn out to be too rosy, officials could underestimate the trouble banks are in. A higher unemployment rate means greater losses for banks because more people default on their loans.

The worsening employment picture, meanwhile, could also create a hole too big for the stimulus package to fill.

As a result, government needs to step up and do more, said Heather Boushey, senior economist with the liberal Center for American Progress.

“It’s not going to be enough, folks. I hate to break it to you,” she said.

To be fair, not all economists believe that the stimulus package will actually achieve its intended purpose. And others are concerned about the massive debt we are incurring in our efforts to shore up the economy. No doubt I’ve lambasted the Bush administration on their complete lack of fiscal discipline (or more accurately, the politicization of budgetary policy) but it’s hard to argue against even more bold action when we appear not to have even hit bottom yet.

White collar workers have it rough too:

After closing plants and shrinking their blue-collar work force, Detroit’s troubled Big Three are cutting white-collar jobs in their hometown at an unprecedented pace — more than 15,000 in the last year, with more to come.

Unlike union workers laid off from idled factories, salaried workers have no safety net of health care or guaranteed income for a year. At best, it’s a small severance or buyout, and a voucher for a discount on one of the hundreds of thousands of unsold cars that G.M. or Chrysler has sitting in inventory.

White-collar workers who walk out of the headquarters of the auto companies face few prospects in the Michigan economy. And with G.M. and Chrysler surviving on federal loans, facing a deadline Tuesday to submit new and broader restructuring plans to the government, the outlook grows only more bleak.

The market for the skills of auto engineers or designers in the prime of their careers has evaporated, with no hope in sight for a turnaround. Moving to another city is hardly an option when there are so few buyers for the suburban homes that would have to be sold first.

“I know it’s not great everywhere, but this is probably the worst place to find a job,” said Doug Zupan, a designer who took a buyout in November after working at Chrysler for six years. He was one of 5,000 salaried workers who accepted a buyout the day before Thanksgiving from his job at the Chrysler Technical Center in Auburn Hills, Mich.

Mr. Zupan, a 35-year-old father of three preschool-age children, said he was stunned by the sudden and rapid decline in an industry suffering through its worst sales in more than 25 years. “I am going to do my best to get out of the auto industry,” he said.

It’s rough for everybody right now. But to go-in a matter of half a year or less-from what you think is a relatively stable and prosperous job with career potential, to facing the possibility of having to move so as to be able to scrape up any kind of job somewhere else, is a psychologically and economically devastating blow.

Well heck, if you lose your job, why not?

(My apologies for the absolute lack of my own content in this post, but seriously, what is there to say?)

That title reminds of the very bad horror movie, “Deep Rising”. Like that movie, this story sucks, but unlike the movie you can’t just get up and leave. As Xanthippas posted recently (like, this morning), the Treasury has decided to focus more on the consumer side of the economy. I’m not an expert, but I’m just really skeptical that this kind of plan will work. I know there are different theories of what part of the economy is the most important to keep it growing. Well, the American economy’s growth was definitely pushed by consumer spending, more than just about any European or Asian country’s. The reason for that, of course, was the ease of availability of credit. But that credit is exactly why we’re in the situation we’re in now. We know that in real terms, American wages have not been growing. People just don’t make as much as they used to compared to the cost of living. Credit came in to help fill the gap between how people could live and how they wanted to live. Unfortunately, that’s had a ruinous effect on the economy. I’m saying that perhaps the answer is not to try to lubricate the economy with credit, but rather that we find a way to free people’s income up from debt to begin with. This will take a bit of work, sure, but in reality people just need to be paid enough to live and buy plenty of goods with cash. We don’t need auto dealers selling cars again to people who can’t really afford them.

Besides which, consumer optimism is going down. How many people are going to walk into the car dealership right now and try to get a new car? It’s not just that the money’s not there, it’s that even people who have money are thinking twice about spending it on something they may not really need. Check out the latest jobless numbers:

The number of newly laid-off individuals seeking unemployment benefits has jumped to a level not seen since just after the Sept. 11, 2001, terrorist attacks, as companies cut more jobs in the face of a slowing economy.

The Labor Department on Thursday reported that jobless claims last week increased by 32,000 to a seasonally adjusted 516,000. That nearly matched the 517,000 claims reported seven years ago, and is only the second time since 1992 that claims have topped 500,000.

The total also was much higher than analysts expected. Wall Street economists surveyed by Thomson Reuters expected claims to increase only slightly to 484,000. Initial claims from two weeks ago were revised upward Thursday by 3,000 to 484,000.

The increase puts jobless claims at levels similar to the recession of the early 1990s. The four-week average of claims, which smooths out fluctuations, increased to 491,000, the highest in more than 17 years.The number of newly laid-off individuals seeking unemployment benefits has jumped to a level not seen since just after the Sept. 11, 2001, terrorist attacks, as companies cut more jobs in the face of a slowing economy.

The Labor Department on Thursday reported that jobless claims last week increased by 32,000 to a seasonally adjusted 516,000. That nearly matched the 517,000 claims reported seven years ago, and is only the second time since 1992 that claims have topped 500,000.

The total also was much higher than analysts expected. Wall Street economists surveyed by Thomson Reuters expected claims to increase only slightly to 484,000. Initial claims from two weeks ago were revised upward Thursday by 3,000 to 484,000.

The increase puts jobless claims at levels similar to the recession of the early 1990s. The four-week average of claims, which smooths out fluctuations, increased to 491,000, the highest in more than 17 years.The number of newly laid-off individuals seeking unemployment benefits has jumped to a level not seen since just after the Sept. 11, 2001, terrorist attacks, as companies cut more jobs in the face of a slowing economy.

The Labor Department on Thursday reported that jobless claims last week increased by 32,000 to a seasonally adjusted 516,000. That nearly matched the 517,000 claims reported seven years ago, and is only the second time since 1992 that claims have topped 500,000.

The total also was much higher than analysts expected. Wall Street economists surveyed by Thomson Reuters expected claims to increase only slightly to 484,000. Initial claims from two weeks ago were revised upward Thursday by 3,000 to 484,000.

The increase puts jobless claims at levels similar to the recession of the early 1990s. The four-week average of claims, which smooths out fluctuations, increased to 491,000, the highest in more than 17 years.The number of newly laid-off individuals seeking unemployment benefits has jumped to a level not seen since just after the Sept. 11, 2001, terrorist attacks, as companies cut more jobs in the face of a slowing economy.

The idea behind the new plan is that if people start buying stuff, the economy will at least halt the decline in actual growth. But I say let’s not be short-sighted here. It was not the freezing of the credit markets that popped the bubble that started all this. It was the fact that at some point, a critical mass of people erupted who couldn’t live up to all the debt they’d taken on. And now, what, we want to start lending mortgages again and selling cars? To whom, may I ask? I’ve kept my job but I’m certainly no better off now than I was 3 months ago. And my next pay raise ain’t gonna bring me up to that magical next socio-economic level. In short, at best, we’re right where we were when the bubble popped: people are still over-stretched and cash-short. Credit can’t help that. Not for must of us, anyway. Millions of people have been saying, “Hey, if we can bail out the giant companies who were so irresponsible, why not bail me out?” And why not indeed? If we’re going to waste that kind of money, just cut me a $2,000 check.

Or better yet, use it to begin an agency that helps people renegotiate their debts, with the power to mandate changes in principal to lenders and set interest rates, and also minimum payments. If you want people spending more on consumer goods, well, they need to have cold, hard cash. Cut their debt payments in half, make them unable to take on so much as a $100 store card at Kohl’s, and let them go. Deduct their debt payments straight from their pay. Make sure they’re getting groceries and other necessaries, and that they have enough cash to waste some on consumer goods. Also, create a federal job force (yes, just like the WPA) to put some actual cash in people’s pockets. It may sound like an enormous expenditure, but even many conservative economists say it’s ok to run up a deficit to get the economy going in a recession (or depression). As a side note, Congress shut down the WPA in 1943 because there was no need for it. With the onset of the war economy, employment ran at nearly 100%. So, why, in all these years since, has no one thought to reinstate a federal work program to keep employment high? It would exert a positive pressure on wages, as people in low-paying jobs could always defect to the federal workforce. Just my thoughts.

In a related story, Business Week tells us that in this recession, you are more likely to lose your job than take a pay cut. Take that as good or bad, whatever you will.

Pay hikes may fall below current expectations, and while employers are planning to raise pay, they are simultaneously cutting jobs. The jobless rate hit 6.5% in October, and many economists think it could reach 8% by late 2009. Employers are also looking for less conspicuous ways to save on benefits, such as reducing 401(k) matches or increasing deductibles and co-payments in health plans. A Watson Wyatt Worldwide survey in mid-October showed that 26% of employers were planning layoffs or other reductions in force in the coming 12 months, while 25% planned to raise employee contributions for health care. In contrast, only 4% were planning to cut salaries. “Firms are cutting workers instead of wages,” says Ethan S. Harris, co-head of U.S. economics at Barclays Capital in New York.

By raising pay while cutting jobs, companies can “thin the herd” while giving remaining workers “the big corporate hug they need,” says William C. Yoh, CEO and president of Yoh, a unit of Day & Zimmerman Group that supplies high-tech temps. Starbucks (SBUX) recently announced it was cutting jobs but isn’t cutting pay or benefits. “We have to take care of our partners [i.e., employees] and keep them engaged,” says spokeswoman Tara Darrow.

Uh, thanks, that’s mighty gracious of you. Well, at least they’re not saying they’re going to start paying people in coffee.

Anyway, now you know more than you did. What say you?

Update: Krugman repeats that drastic times call for drastic measures.