GOP Realizes Impeaching Obama Is Impossible, Votes to Sue Him Instead -Meanwhile US Econ At 4% Growth.

Mississippi had the highest unemployment rate in July at 8%. Photograph: Robyn Beck/AFP/Getty Images

The United States economy rebounded strongly in the second quarter of the year, shaking off the negative effects of an unusually harsh winter and stirring hopes that it might finally be establishing a solid enough footing to put the lingering effects of the recession squarely in the past.

The Commerce Department, in its initial estimate for April, May and June, reported on Wednesday that the economy grew at a seasonally adjusted annual rate of 4 percent, surpassing expectations.



Win McNamee/Getty

 DAILY BEAST

 

On Wednesday, House Republicans gave Speaker John Boehner the approval to go ahead with a lawsuit against President Obama, alleging he overreached his powers in executing the Affordable Care Act. In an almost exact party-line vote, 225 Republicans voted in support and 201 Democrats voted against authorizing the federal suit. Democrats have accused Republicans of using the suit as a first step towards impeaching Obama, though Republicans have refuted this. Earlier Wednesday, Obama denounced the prospective suit as a “political stunt” and told Republicans to “stop just hating all the time.”

 

The lawsuit, which is likely to be thrown out of federal court on procedural grounds, focuses particularly on Obama’s decision to delay the employer mandate in the Affordable Care Act.The lawsuit comes as many conservatives have urged House Republicans to begin impeachment proceedings against Obama. Indeed, all five Republicans who voted against the lawsuit, including Paul Broun of Georgia and Steve Stockman of Texas, did so because they believe impeachment is more appropriate. While these calls have been limited mainly to marginal figures on the right such as former reality television star Sarah Palin, House Majority Whip Steve Scalise refused to rule it out in a television appearance Sunday.House Speaker John Boehner and many other leading members of the GOP, however, have opposed the possibility of impeachment, calling it a political misstep.

 

The lawsuit is viewed as an alternative that would appease the GOP’s base without alienating more moderate voters. In 1998, the failed Republican attempt to remove President Clinton from office redounded to the political benefit of Democrats. Impeachment proceedings likely would have the same effect this time, especially with the success that Democratic campaigns have had fundraising off of the specter of impeachment in recent weeks. And with 67 votes required in the Democratic-controlled Senate to convict Obama and remove him from office, successful impeachment proceedings may be impossible. (Even if Obama were somehow removed from office, conservatives probably wouldn’t be thrilled at the prospect of a President Biden). -

EUROPE'S SECRET SUCCESS: JOB CREATION



About 1,500 job seekers wait in line to enter a job fair on March 28, 2014, in Washington, D.C.

Chip Somodevilla / Getty Images

PAUL KRUGMAN, N.Y. TIMES

I’ll be spending the next couple of days at a forum sponsored by the European Central Bank whose de facto topic — whatever it may say on the program — will be the destructive monetary muddle caused by the Continent’s premature adoption of a single currency. What makes the story even sadder is that Europe’s financial and macroeconomic woes have overshadowed its remarkable, unheralded longer-term success in an area in which it used to lag: job creation.

What? You haven’t heard about that? Well, that’s not too surprising. European economies, France in particular, get very bad press in America. Our political discourse is dominated by reverse Robin-Hoodism — the belief that economic success depends on being nice to the rich, who won’t create jobs if they are heavily taxed, and nasty to ordinary workers, who won’t accept jobs unless they have no alternative. And according to this ideology, Europe — with its high taxes and generous welfare states — does everything wrong. So Europe’s economic system must be collapsing, and a lot of reporting simply states the postulated collapse as a fact.

 

The reality, however, is very different. Yes, Southern Europe is experiencing an economic crisis thanks to that money muddle. But Northern European nations, France included, have done far better than most Americans realize. In particular, here’s a startling, little-known fact: French adults in their prime working years (25 to 54) are substantially more likely to have jobs than their U.S. counterparts.

 

It wasn’t always that way. Back in the 1990s Europe really did have big problems with job creation; the phenomenon even received a catchy name, “Eurosclerosis.” And it seemed obvious what the problem was: Europe’s social safety net had, as Representative Paul Ryan likes to warn, become a “hammock” that undermined initiative and encouraged dependency.

But then a funny thing happened: Europe started doing much better, while America started doing much worse. France’s prime-age employment rate overtook America’s early in the Bush administration; at this point the gap in employment rates is bigger than it was in the late 1990s, this time in France’s favor. Other European nations with big welfare states, like Sweden and the Netherlands, do even better.

Now, young French citizens are still a lot less likely to have jobs than their American counterparts — but a large part of that difference reflects the fact that France provides much more aid to students, so that they don’t have to work their way through school. Is that a bad thing? Also, the French take more vacations and retire earlier than we do, and you can argue that the incentives for early retirement in particular are too generous. But on the core issue of providing jobs for people who really should be working, at this point old Europe is beating us hands down despite social benefits and regulations that, according to free-market ideologues, should be hugely job-destroying.

I’m sure that many people will simply refuse to believe what I’m saying about European strengths. After all, ever since the euro crisis broke out there has been a relentless campaign by American conservatives (and quite a few Europeans too) to portray it as a story of collapsing welfare states, brought low by misguided concerns about social justice. And they keep saying that even though some of the strongest economies in Europe, like Germany, have welfare states whose generosity exceeds the wildest dreams of U.S. liberals.

But macroeconomics, as I keep trying to tell people, isn’t a morality play, where virtue is always rewarded and vice always punished. On the contrary, severe financial crises and depressions can happen to economies that are fundamentally very strong, like the United States in 1929. The policy mistakes that created the euro crisis — mainly creating a unified currency without the kind of banking and fiscal union that a single currency demands — basically had nothing to do with the welfare state, one way or another.

The truth is that European-style welfare states have proved more resilient, more successful at job creation, than is allowed for in America’s prevailing economic philosophy.

 

Oh, and for those who believe that out-of-work Americans, coddled by government benefits, just aren’t trying to find jobs, we’ve just performed a cruel experiment using the worst victims of our job crisis as subjects. At the end of last year Congress refused to renew extended jobless benefits, cutting off millions of unemployed Americans. Did the long-term unemployed who were thereby placed in dire straits start finding jobs more rapidly than before? No — not at all. Somehow, it seems, the only thing we achieved by making the unemployed more desperate was deepening their desperation.

 

I’m sure that many people will simply refuse to believe what I’m saying about European strengths. After all, ever since the euro crisis broke out there has been a relentless campaign by American conservatives (and quite a few Europeans too) to portray it as a story of collapsing welfare states, brought low by misguided concerns about social justice. And they keep saying that even though some of the strongest economies in Europe, like Germany, have welfare states whose generosity exceeds the wildest dreams of U.S. liberals.

But macroeconomics, as I keep trying to tell people, isn’t a morality play, where virtue is always rewarded and vice always punished. On the contrary, severe financial crises and depressions can happen to economies that are fundamentally very strong, like the United States in 1929. The policy mistakes that created the euro crisis — mainly creating a unified currency without the kind of banking and fiscal union that a single currency demands — basically had nothing to do with the welfare state, one way or another.

The truth is that European-style welfare states have proved more resilient, more successful at job creation, than is allowed for in America’s prevailing economic philosophy.

HIGH SPEED WALL ST TRADING: FLASH COWBOYS

JANET MASLIN, N.Y. TIMES

Michael Lewis writes that before he began working on “Flash Boys,” he had little interest in the stock market, “though, like most people, I enjoy watching it go boom and crash.” And like most people, he had an antiquated notion of what the stock market was. At the start of “Flash Boys,” his dazzling, troublemaking new work of reportorial storytelling, Mr. Lewis summons that sweet old image of a trading floor full of screaming brokers, slamming telephones and hysteria-inducing ticker tape. Picture that, he suggests. And then forget it, because it’s gone.

Flash Boys” describes the surreal-seeming technology that replaced it. And it also explores the breakup of big, central stock exchanges into many small ones; the impossibility of investors’ knowing exactly what is being done with their money; and the immense new opportunities for skimming, kickbacks, secret fees and opacity that the new system has spawned.

Because Mr. Lewis is at the helm finding clear, simple metaphors for even the most impenetrable financial minutiae, this tawdry tale should make sense to anyone. And so should its shock value. “Flash Boys” is guaranteed to make blood boil.

And because this is Mr. Lewis, it’s a book about white-hatted heroes who set out to rectify the system. The principal figures in “Flash Boys” were not widely known outside the business world, or even within it, though they will be now. You could find some on LinkedIn, but Wikipedia had never heard of them or their accomplishments. That only adds to the excitement surrounding a book that has been kept carefully under wraps. It went on sale Monday.

 

Mr. Lewis’s first illustration of high-frequency trading depicts the kind that can transmit stock market information from New York to Chicago and back in one-tenth of the blink of an eye and has divided the world of stock traders into the haves and have-nots, depending on what speeds they can afford. It involves the stealthy building of an absolutely straight tunnel to run fiber-optic cable through the mountains of Pennsylvania. The firm building the tunnel calls itself Spread Network, and the job is monstrous. Huge mountains need to be drilled through. Every small town needs to grant permission. No one can know what the tunnel is for, and the cost of the digging is beyond astronomical.

 

But this was 2010, when the stock market was obsessed with speed, and Wall Street traders considered no proposition too unreasonable, no cost too steep. Sure, they asked questions. “Where is the backup if your line goes down?” (“Sorry, there isn’t one.”) “When can you supply us with the five years of audited financial statements that we require before we do business with any firm?” (“Um, in five years.”) But they also paid $14 million each just for initial access to the thing because milliseconds could be worth huge fortunes if properly and secretly manipulated. With the story of the cable, “Flash Boys” inspires both awe and horror at the same time.

 

That wound up being the response of staid, mild-mannered Bradley Katsuyama to United States business practices. Mr. Katsuyama was happily ensconced at the Royal Bank of Canada in Toronto when, in 2002, he was transferred to New York. The bank wanted more of a Wall Street presence, but Mr. Katsuyama turned out to be a lot more than that. Mr. Lewis, who clearly got to know his subjects very well, is full of colorful stories about Mr. Katsuyama’s New York stint (one colleague swung a baseball bat in the office) and the effect it had on him.

 Like this book’s other heroes, Mr. Katsuyama has an inquisitive, scientific mind; the more clearly he saw that the markets were rigged, the better he wanted to understand what was wrong with them. He began experimenting on his own and developed a better understanding of how the hoodwinking worked. Federal investigators and New York State’s attorney general have begun looking into whether such trading practices ought to be monitored and regulated.

 

One of his first colleagues, in what would eventually become a gutsy, game-changing new venture, was Rob Park, an algorithm guy. “All Brad needs is a translator from computer language to human language,” Mr. Park told Mr. Lewis. “Once he has a translator, he completely understands it.” With the funding of the Royal Bank of Canada, the two conducted a series of experiments that provided invaluable information about how high-frequency traders could predict imminent stock movements and exploit them. They even created a weapon, called Thor, that was meant to level the playing field for the ordinary investor. “It would have been very easy to make money off this,” Mr. Park says of Mr. Katsuyama. “He just chose not to.”

From left: Rob Park, Brad Katsuyama and Ronan Ryan. Credit Stefan Ruiz for The New York Times

 

The rest of the book tells the riveting story of how this detective work exposed more and more dangerous flaws in the present market system. Mr. Katsuyama consistently sounds like a force for decency and good, even if Mr. Lewis gives him a “Batman” moment or two. To his future wife he declared (really?): “It feels like I’m an expert in something that badly needs to be changed. I think there’s only a few people in the world who can do anything about this. If I don’t do something right now — me, Brad Katsuyama — there’s no one to call.”

 

So he did something, in this book’s one true movie moment. “Let’s just create our own stock exchange,” he proposed to Mr. Park. That was in 2011, and it occurs less than halfway through the book, because Mr. Lewis needs room to talk about why changing the world wasn’t as easy they expected it to be. Many a dirty trick awaits anyone trying to push back against common Wall Street practice with a firm dedicated to fairness and transparency. But the firm, which was called the Investors Exchange until someone realized that the Internet address could be read as Investor Sex Change, and then became IEX, opened in October 2013. It has had support from Goldman Sachs, because, according to Mr. Lewis, events like the “Flash Crash” of May 6, 2010, are ever more apt to occur in a fast, computerized system and scare American investors out of the market. One of the book’s most controversial points is that affiliation with a fair and square IEX will be good for larger firms’ reputations.

 

But Mr. Lewis hardly means to suggest we’re out of the woods. He ends this book with a trip through the forest, up a mountain and right to the base of a sinister microwave tower with an F.C.C. license number that he provides. Got a computer and a free day? He claims you can track down that license to find another Wall Street nightmare in the making.

Democrats enter the economic doghouse ahead of Obama’s State of the Union

Beginning with his State of the Union speech Tuesday night, President Obama will lean hard this week into the issue voters have identified as the most important in their midterm election vote: The economy.
The challenge for the president and his party: Win back the political high ground, which Republicans have seized on the economy for the first time in nearly 12 years. That should come as troubling news for president and his party 9 1/2 months before election day.
Americans trust Republicans more than Democrats to do a better job handling the economy 44 percent to 37 percent, according to a new Washington Post-ABC News poll. It's the first time since 2002 that Republicans have sported a meaningful advantage, and larger than any edge congressional Republicans have held over Obama during his administration.

Perhaps even more striking: The numbers mark a mirror image reversal from the eve of the 2010 midterms, when Republican picked up a historic 63 House seats. In October of 2010, Democrats held an identical 44-37 advantage.
The findings come as Obama and Democrats are looking to shift attention away from the the troubled rollout of the health-care law and toward the emerging debate over economic inequality, which Obama will highlight in his speech Tuesday night. He will hit the road to visit four states beginning Wednesday to tout his administration's economic efforts.

The question of which party is a better economic steward is increasingly important as the election draws near. Eighty-six percent of Americans say the economy will be important in their vote for Congress this year, outpacing all other issues tested in the survey.

With economic voters splitting 47 to 43 percent between Republicans and Democrats in the generic congressional ballot, the economic trust edge has yet to convert to a clear vote advantage. But it may also help the GOP mitigate trust deficits on social issues, the minimum wage and economic empathy.
Part of Democrats' challenge lies in recapturing enthusiasm on the economy among core supporters. Shifts among non-whites and young people have driven the GOP's momentum.
The percentage of non-whites who say they trust the GOP more on the economy has doubled from 15 percent in 2010 to 32 percent now. Among Americans under age 40, it's climbed from 33 percent to 48 percent.

There have been broad if unsteady signs of economic improvement in recent months. The unemployment rate fell to is lowest point since October 2008 last month. But hundreds of thousands dropped out of the work force.
Overall the news hasn't been extremely positive or extremely negative.
So how to explain Democrats' plight? One possibility is the that their economic message and policies have been overshadowed in recent months by damaging news related to the rollout of health-care law. Another is that the natural fatigue Americans experience with an administration in its second term is finding its way into various issues and the economy is no exception.
No matter what the cause, it's clear that Democrats and Republicans have arrived at a pivotal moment when it comes to talking about the economy. And it's equally clear the GOP should feel better about its standing.

AMERICAN UNEMPLOYMENT HOLDS STEADY. AND THAT'S THE GOOD NEWS.

The U.S. economy added just 165,000 jobs in April, which caused the unemployment rate to fall to a 4-year low of 7.5 percent. March's numbers were readjusted, with 50,000 more jobs added than previously reported, meaning that 138,000 jobs were added that month. Economists warned, though, that that doesn’t help improve the sluggish track the economy has been on. The first two months of the year saw an average of 200,000 jobs added, although growth cooled in March.

The American economy continues to add jobs in proportion to population growth. Nothing less, nothing more.
The share of American adults with jobs has barely changed since 2010, hovering between 58.2 percent and 58.7 percent. This employment-to-population ratio stood at 58.6 percent in April. That is about four percentage points lower than the employment rate before the recession, a difference of roughly 10 million jobs. In other words, the United States economy is not getting any closer to recreating the jobs lost during the recession.

Housing Starts Surge, Construction Jobs Don't

While the number of housing starts has surged – nearly doubling in the last two years – employment in residential construction has barely budged. And construction employment tracked down ever so slightly to 5.79 million workers in April, according to the preliminary data.
What gives? Where are the missing construction workers?
Those are questions that economists have been puzzling over for the last year or so, as the housing market has started to normalize, with low inventory and new demand causing prices to rise in markets across the country and builders eagerly breaking ground on new developments from Florida to California.
Over time that should lead to rising employment in the sector, especially given pent-up demand for projects. But not yet. Construction employment is starting to turn up, but from a very low level: There are about as many construction workers now as there were in 1997. And construction employment in the residential sector remains essentially flat, gaining about 2.5 percent in the last year.
There seem to be a few components to the answer. The first is that housing starts tend to tell us where the market for construction workers is going, not where it is right now. So even as starts have surged as builders have begun new projects, the overall number of units under construction remains relatively low – meaning relatively few available jobs




Second, it seems that builders in some markets may be having trouble recruiting skilled workers, as [NYT reporter] Catherine Rampell recently reported. That has not yet led to much of a surge in compensation in the sector, as you might expect. But perhaps the businesses are paying workers under the table, or making do with fewer of them, in part by increasing their hours.
Moreover, builders will eventually need to hire employees to work on new projects. (As far as I know, there have not been any great productivity advances in home building in the past few years, and nobody’s outsourcing the work to robots.)

The Young Suffer The Most...

NY TIMES

THE idle young European, stranded without work by the Continent’s dysfunction, is one of the global economy’s stock characters. Yet it might be time to add another, even more common protagonist: the idle young American.

For all of Europe’s troubles — a left-right combination of sclerotic labor markets and austerity — the United States has quietly surpassed much of Europe in the percentage of young adults without jobs. It’s not just Europe, either. Over the last 12 years, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest.

 

 

 

The grim shift — “a historic turnaround,” says Robert A. Moffitt, a Johns Hopkins University economist — stems from two underappreciated aspects of our long economic slump. First, it has exacted the harshest toll on the young — even harsher than on people in their 50s and 60s, who have also suffered. And while the American economy has come back more robustly than some of its global rivals in terms of overall production, the recovery has been strangely light on new jobs, even after Friday’s better-than-expected unemployment report. American companies are doing more with less.

 

Employers are particularly reluctant to add new workers — and have been for much of the last 12 years. Layoffs have been subdued, with the exception of the worst months of the financial crisis, but so has the creation of jobs, and no one depends on new jobs as much as younger workers do. For them, the Great Recession grinds on.

For many people with jobs and nest eggs, the economy is finally moving in the right direction, albeit a long way from booming. Average wages are no longer trailing inflation. Stocks have soared since their 2009 nadir, and home prices are increasing again. But little of that helps younger adults trying to get a foothold in the economy. Many of them are on the outside of the recovery looking in.

 

....Except for College Grads

 

 

The official unemployment rate for 25- to 34-year-old college graduates remains just 3.3 percent.

 

Among all segments of workers sorted by educational attainment, college graduates are the only group that has more people employed today than when the recession started.

The number of college-educated workers with jobs has risen by 9.1 percent since the beginning of the recession. Those with a high school diploma and no further education are practically a mirror image, with employment down 9 percent on net. For workers without even a high school diploma, employment levels have fallen 14.1 percent.

But just because college graduates have jobs does not mean they all have “good” jobs.

There is ample evidence that employers are hiring college-educated workers for jobs that do not actually require college-level skills — positions like receptionists, file clerks, waitresses, car rental agents and so on.

 

Megan Parker, right, a law firm receptionist, and Laura Burnett, a paralegal, are college graduates, as are all their co-workers

 

 

In other words, workers with four-year degrees have gobbled up all of the net job gains. In fact, there are more employed college graduates today than employed high school graduates and high school dropouts put together.

It is worth noting, too, that even young college graduates are finding jobs, based on the most recent data on this subgroup. In 2011, the unemployment rate for people in their 20s with at least a bachelor’s degree was 5.7 percent. For those with only a high school diploma or a G.E.D., it was nearly three times as high, at 16.2 percent.

Americans have gotten the message that college pays off in the job market. College degrees are much more common today than they were in the past. In April, about 32 percent of the civilian, noninstitutional population over 25...had a college degree.

Twenty years ago, the share was 22 percent.

 

These forces might help explain why there is so much growth in employment among college graduates despite the fact that the bulk of the jobs created in the last few years have been low-wage and low-skilled, according to a report last August from the National Employment Law Project, a liberal research and advocacy group. Today nearly one in 13 jobs is in food services, for example, a record share.

 

      

Clearly, positions in retail and food services are not the best use of the hard-earned skills of college-educated workers, who have gone to great expense to obtain their sheepskins. Student loan borrowers graduate with an average debt of $27,000, a total that is likely to grow in the future.

 

The median weekly earnings of college-educated, full-time workers — like those for their counterparts with less education — have dipped in recent years. In 2012, the weekly median was $1,141, compared with $1,163 in 2007, after adjusting for inflation. The premium they earn for having that college degree is still high, though.

 

In 2012, the typical full-time worker with a bachelor’s degree earned 79 percent more than a similar full-time worker with no more than a high school diploma. For comparison, 20 years earlier the premium was 73 percent, and 30 years earlier it was 48 percent.

 

So, despite the painful upfront cost, the return on investment on a college degree remains high. An analysis from the Hamilton Project at the Brookings Institution in Washington estimated that the benefits of a four-year college degree were equivalent to an investment that returns 15.2 percent a year, even after factoring in the earnings students forgo while in school.

“This is more than double the average return to stock market investments since 1950,” the report said, “and more than five times the returns to corporate bonds, gold, long-term government bonds, or homeownership.”