In Case You Missed It: Third and State Blog This Week

This week, we blogged about job growth in Pennsylvania, what message President Obama should send to the U.S. Chamber of Commerce, lessons to learn from other state's fiscal woes and a whole lot more.

In case you missed it:

  • On the economy, Steve Herzenberg explained how Pennsylvania was a big winner in job performance for 2010, while New Jersey was the "biggest loser." Steve also blogged on what message President Obama should be sending to the U.S. Chamber of Commerce and weighed in on the nation's "Swiss Cheese" tax system.
  • On the state budget, Chris Lilienthal highlighted another edition of the Pennsylvania Budget and Policy Center's Fiscal Facts, and talked about lessons to learn from other states' budget challenges.
  • On jobs and unemployment, Mark Price wrote that for the long-term unemployed, the jobs just aren't there. Mark also blogged this week on strengthening the middle class and debunking bogus research on upward mobility and income 

More blog posts next week. Keep us bookmarked and join the conversation!

Lessons to Learn from Other States’ Revenue Woes

Just how difficult will it be to balance Pennsylvania’s state budget without any additional revenue? A WHOLE LOT, according to two state budget experts speaking on WITF’s Radio Smart Talk this week.

For the Long-term Unemployed, the Jobs Just Aren't There

The Bureau of Labor Statistics has released new data on the duration of unemployment by state.  In 2010, 26% of the people in Pennsylvania who lost a job, through no fault of their own, had been unemployed for a year or more.

The following figure plots the data by state against the average unemployment rate by state in 2010.  As I argued last week using older data, these new data clearly demonstrate that the most important factor shaping the length of time that people in Pennsylvania remain unemployed is the number of unemployed people competing for job openings.

Pa. Is Not Alone! The U.S. Has a Swiss Cheese Corporate Tax System Too

I'm shocked! The U.S. corporate tax system has enormous numbers of loopholes, according to The New York Times.

One hundred and fifteen of the biggest 500 companies paid a total corporate tax rate — federal, state, and local — of less than 20%  over the last five years, even though the federal corporate tax rate alone is 35% for most companies. There are also wide variations in the tax rates that companies pay within the same industry.

Pennsylvania Big Winner in 2010 Job Growth, New Jersey “The Biggest Loser”

There is some good news to be found for Pennsylvania in new data sizing up job performance in 2010.

While far too many Pennsylvania families are struggling in the aftermath of the worst recession in decades, the state’s economy is rebounding better – and faster – than most states.

In 2010, the Commonwealth added more than 65,000 jobs, ranking third among the 50 states in the number of jobs created. On a percentage basis (adjusting for the size of each state’s economy), Pennsylvania’s job growth was 1.2% — exceeding three-fourths of all states.

Switching Places ... or Not: Intragenerational Mobility

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Over the last several decades, income inequality in the United States has increased dramatically. Back in the early 90s, conservatives were looking for ways to demonstrate that inequality had not gotten worse. Glenn Hubbard (who later was one of the architects of the 2003 Bush tax cuts), while on leave from an academic post, released a study from the U.S. Treasury's Office of Tax Analysis which purported to show that:

86 percent of households in the bottom fifth in 1979 had climbed out of poverty by 1988.

Here is Paul Krugman from 1992 explaining the "strange procedure" that produced this result:

Here's what Hubbard's report did: it tracked a group of individuals who paid income taxes in all ten years from 1979 to 1988, and compared their incomes not with each other but with those of the population at large. The restriction to individuals who paid taxes in all years immediately introduced a strong bias toward including only the economically successful; only about half of families paid income taxes in all ten years.

What Obama Should Say to the U.S. Chamber

President Obama addresses the U.S. Chamber of Commerce today as part of his post-election effort to improve relations with U.S. business.

What part of U.S. business does the Chamber represent? Mostly big business and corporate CEOs — people who make many millions, often without risking any of their own money. That’s the only way to explain that the extension of the Bush tax cuts for the very rich was the top Chamber priority last year — even though this won’t benefit the vast majority of businesses.

It's the Recession!

So just what has been the primary cause of Pennsylvania’s fiscal challenges? Some would have you believe it is overspending, but the facts tell a different story.

In the Pennsylvania Budget and Policy Center's latest February Fiscal Facts, we find that every state (except North Dakota) has faced budget deficits in the past few years. The primary culprit: loss of state tax revenue.

Strengthening the middle class

On Thursday, Derek Thompson, an associate editor at the Atlantic, wrote a guest post at Ezra Klein’s blog discussing how to rebuild the middle class.  Below is his list of possible interventions to cure what ails the middle class:

The Pinto leaves you with that warm feeling

Tom Ridge is in the Pittsburgh Tribune-Review this morning talking about economic policy:

The shale gas industry is like the auto business — it might hurt some people, but the jobs it brings to a struggling economy make it worthwhile, gas industry pitchman and former Gov. Tom Ridge said Thursday.

'You don't quit building automobiles because some people are going to crash and kill themselves,' said Ridge, who spoke at Carnegie Mellon University. 'You have to manage the risk. Capitalism and entrepreneurialism is risk management.'

Anybody remember the Ford Pinto?

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