The top line numbers in today's Employment Situation news release from the BLS showed net job losses in the establishment survey (-62,000), making for a total of 438,000 net jobs (0.32%) lost since the December peak, and the unemployment rate holding steady at 5.5 percent.

With more bad news, we are likely to hear news reports about the unequal burden of the labor market contraction.  I was curious in particular to see how female heads of household were faring.  The BLS reports their unemployment rate on a seasonally unadjusted basis, so the following chart shows 40 years of annual data, measured in June of each year, for all persons (in the civilian noninstitutionalized population) 16 and over, all women 16 and over, and all female heads of household:

A few features of the chart stand out: 

The New York Times and other media outlets reported today that Rush Limbaugh has signed a contract extension through 2016 worth about $400 million.  Perhaps with an eye toward higher marginal tax rates in the years to come, about $100 million is in the form of a signing bonus.

I think Rush Limbaugh could lay claim to being the original blogger.  The core of his 3-hour weekday show is Limbaugh's commentary on and parody of what newsmakers have said.  Roll an audio clip.  Criticize or find an inconsistency in the speaker's argument.  Lampoon the speaker in the process.  Reaffirm ideological views.  Roll another clip.  He makes no apologies for his conservative ideology and his partisan edge.  You find a lot of this in the blogosphere, except that Limbaugh constructs and distributes his work as audio rather than as text. 

Consider this quote from this Sunday's New York Times Magazine cover story by Zev Chafets.

Stan asks an interesting question:

If consumers are willing to pay higher prices for gasoline, why should we think that energy companies are going to do anything but charge those higher prices?

We should not think anything but that, except that we should acknowledge that producers of any good might be willing to trade off some short term profits for greater profits over the longer term.  With gasoline, we are certainly not in that environment, whether or not we ever were.  (Were low energy prices of past decades "teaser" rates?  Did we get discounts on our first "hits" of petroleum?)

He then asks two other questions that come up in various guises when dealing with economic policy:

In other words, in what's supposed to be a market-driven economy, aren't we complaining about the market working?

[...]

Finally, are we starting to think of gasoline as a public good that the government should provide?

I was wondering over the past few days, particularly with the recent media attention devoted to General Wesley Clark's appearance on Face the Nation and its several day aftermath in the news media, how long it should take people to make up their minds about how to cast their ballots in an election like this year's primaries or general election.  The relevance Clark's interview is that I think it is a good example of a political celebrity saying something that is not well considered (to put it charitably), easy to sensationalize in an excerpt, and of almost no consequence in helping voters decide which candidate to support.

The Washington Post ran an op-ed yesterday with the title, "5 Myths About the Death Of the American Factory," by Gilbert Kaplan, an international trade lawyer.  He opens with a bad premise:

Sure, U.S. banking is in trouble, but the longer-term and possibly more damaging threat to the nation's prosperity is the decline of the manufacturing sector.

As noted by a commenter on Stan's post, the SAFE Commission struck out as an amendment in committee to a financial services appropriations bill.  Here's how CongressDaily reported it.  Stan was certainly on the money, when he anticipated a reaction that the Congress would not want to outsource its duties (presumably to contine the status quo in which they are simply not being done by anyone):

House Appropriations Chairman David Obey blasted the idea because the commission would be able to force appropriators to implement a solution that they would have no hand in creating and might not be workable.

Between now and the November elections, we will likely hear Senator McCain describe his preferences for Supreme Court nominees who will not "legislate from the bench."  I think the liberal wing of the court--including Justice Kennedy writing for the 5-4 majority--gave him a clear example of legislating from the bench in today's Kennedy v. Louisiana decision.  From The New York Times:

WASHINGTON — The death penalty is unconstitutional as a punishment for the rape of a child, a sharply divided Supreme Court ruled Wednesday.

Pete is right to say that deficit hawks should unite, but I don't know if the SAFE Act is enough.  It calls for a commission to address:

1. the unsustainable imbalance between long-term federal spending commitments and projected revenues;
2. increases in net national savings to provide for domestic investment and economic growth;
3. the implications of foreign ownership of federally issued debt instruments; and
4. revision of the budget process to place greater emphasis on long-term fiscal issues.

I agree that within a generation, the cost of our long-term entitlement programs will push our fiscal situation into very dire straits.  Our long-term problems will have become short-term problems because we let our current window of opportunity to resolve them close.  But the language in the bill does not mention, and the SAFE Commission would only tangentially have anything to say about, the fact that we cannot bring ourselves to balance the on-budget (or non-OASDHI) deficit to zero.  And until we do that, or unless the SAFE Commission is explicitly empowered to address that in addition to the long-term entitlements, I think that meaningful reform of long-term entitlements is dead in the water politically.

Gene Steuerle holds forth on the very undemocratic impact of our generation's promises to ourselves on the tax burden of the next:

At its core, democracy is about equal rights to vote—and have your representatives vote—on the nation's current priorities. But many recent laws attempt to deny us—and, even more so, our children—the opportunity to determine those priorities.

The reason is simple, but its effects are profound. Never before in U.S. history have so many promises been made to so many people for so many years into the future. Every additional promise, no matter what its merit, only attempts to tie that fiscal straightjacket tighter around future voters.

If our tax laws merely stay the same from 2006 to 2010, for instance, government revenues would rise by several hundred billion dollars. But guess what? Most of those revenue increases are already committed, mainly to the growing costs of our current health and retirement programs.

It seems like I'm not the only one talking about carbon emissions from air travel.  The New York Times reports today on the challenges of reducing emissions from low-cost airlines even as fuel prices rise.

The growth in emissions from air travel had “far exceeded growth by any other mode,” a European Environment Agency report issued this year said. Between 1990 and 2005, the last full year from which data were available, total carbon dioxide emissions from aviation in the European Union grew by 73 percent.

“This could threaten the ability of the E.U. to meet increasingly ambitious emission reduction targets,” the report’s authors said.

This week, the Rockefeller Center at Dartmouth (where my day job is to be the director) has been hosting a conference, "Going to Extremes: The Fate of the Political Center in American Politics." The papers can be found here. The discussion has been excellent--lots of interesting ideas for an economist to pick up from a group of thoughtful political scientists.

Toward the end of the conference, a discussant brought out a contrast between a centrist's identification with his party and with his constituency.  What does the centrist do if the party's position disagrees with his constituents' preferences?  The answer, spoken from the party leadership to the representative, used to be, "Vote with your constituency, because we want you back."  Now, I'm not so sure.

Roger Lowenstein had a good op-ed in Sunday's Washington Post, "Read My Lips: We Need These Taxes."  I liked the way he started it:

Let's imagine an alternate universe. The U.S. government is running a large and growing deficit. Not far down the road it faces huge increases in Social Security and Medicare costs. Naturally, the candidates for president want to remedy this by raising revenue. They don't want us to bequeath bigger deficits to our children or stake our future on foreigners' willingness to keep lending us money.

But have you heard this speech? "My fellow Americans, I have a plan to raise taxes so that the budget will be closer to balance and future Americans won't have to worry about their retirement security." Neither have I.

That's the speech that should appeal to those on the Left.  He lists five key tax changes he would make to help close the deficit and increase equity:

When it announced its new $15 fee for the first checked bag, I declared American Airlines to be a "Microeconomics Free Zone."  Its transgression, I thought, was not considering the external, but in my view largely non-pecuniary, costs of doing this. Joe Brancatelli's indispensable "Seat 2B" column at Portfolio.com does me one better.  He runs the numbers and wonders if American will net any revenue from this at all. 

Senator Obama's announcement last week that Jason Furman would join his economic team as economic policy director set off the unfortunate spate of criticism from the Left that he's not Left enough on labor issues.  I figured the last thing Jason needed was a defense from an occasional right-of-center policy opponent.  (The most thoughtful one is here, with links to others from those with left-of-center credentials.)

The most hysterical commentary I've read comes, surprise, from Naomi Klein in The Nation, where Furman's appointment is taken as further evidence that Obama is "thoroughly embedded in the mind-set known as the Chicago School."

A colleague of mine put it best when he said, "Now how will we ever get either of these candidates to answer a question?"  The only time I met Tim Russert was last September when he was the moderator of the Democratic Presidential candidates debate.  This debate was one of the first to occur after the first YouTube debate.  Here's what I posted:

My biggest lesson of the day was that Tim Russert is an extremely talented moderator. With him at the podium, there was no need for gimmicks.

So this is how I'll remember him:

I have been working my way through a fascinating book by Professor Geoffrey Hodgson, Economics in the Shadows of Darwin and Marx.  They were the two great theorists of structural change in complex systems in the nineteenth century, and I've been looking for new ideas on how their theories have been applied and adapted in modern economic scholarship.  This sentence, in a chapter comparing their worldviews, was too interesting and amusing to keep to myself:

Marx and Engels characterized Darwin's doctrine as an inappropriate extension of the norms of capitalist competition to the natural world.

Enjoy!

When I speak to non-economists about economics, I often tell them that norms are often more powerful than incentives.  David Brooks has a must-read column in The New York Times today that strikes this note very well with regard to saving:

Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.

Do the data back him up? Let's look at the data on the personal saving rate out of disposable income:

I was doing my usual reading of blogs this morning and came across, "Two Thank Yous for Hillary" at Angry Bear, in which Now President Kim Gandy's column is quoted:

Hillary, you have made a mark on history for eternity, giving little girls and little boys the full knowledge that women can compete, take risks, take the heat, make hard decisions, and be strong leaders.

I thank Kim Gandy for writing something so blindingly naive that it reveals what is so insufferable about the commentary on Senator Clinton's run for the Presidency by some of her supporters.  I don't dispute that Senator Clinton has competed, taken risks, and taken the heat.  It's not clear to me that she's made hard decisions and been a strong leader on issues of consequence to the point where she would be the one I'd hold up as exemplary to little boys and little girls.

But that's not what's blindingly naive about what Gandy has written.

Stan, so sorry for your travel woes.  It is tempting to describe your flight delays as a tragedy of the commons, but Austan Goolsbee set the record straight on this one three years ago with this great column, "Tragedy of the Airport," in Slate.  Here is the key excerpt:

At first glance, this seems crazy. The common explanation given for flight delays is that too many people are flying: The more air traffic, the more delays. That's what most economists say, too. This view of airport congestion makes it seem just like highway congestion. Each time an airline schedules a flight, it doesn't take into account the backups it causes by crowding the airspace. The dynamic generates a tragedy of the commons, in which each of the companies vying for runway slots has an incentive to overschedule.

The May employment report is another disappointment.  Nonfarm employment fell another 49,000, marking a 324,000 decline (0.23%) since the peak in December.  That headline will likely be overshadowed by the large increase in the unemployment rate, from 5.0% in April to 5.5% in May.  Note that these two statistics come from different surveys--nonfarm employement is from a survey of establishments and the unemployment rate is from a survey of households.

What's behind the unemployment rate increase?  The unemployment rate is the ratio of those unemployed to the civilian labor force (the sum of those employed plus those unemployed).  Recall that you can be out of work but not counted as unemployed--to be unemployed, you have to be looking for work.  When interpreting the numbers, we also have to be careful to acknowledge that these are net flows from the survey.  For example, in May, according to the household survey: