South By North Strategies, Ltd.

A Good Question

At Grasping Reality with Both Hands, economist Brad DeLong poses an interesting question:

… the Obama administration’s fiscal boost program has also significantly helped the economy: aid to impacted states has been a big win, the jury is still out on the effect of the tax cuts in the stimulus, and the flow of government spending on a whole variety of relatively useful causes is in train and is boosting production and employment in the same way that everyone’s boost to spending boosts production and employment. And the cost of carrying the extra debt incurred is extraordinarily low: $12 billion a year of extra taxes would be enough to finance the fiscal boost program at current interest rates, and for that cost American taxpayers will get an extra $1 trillion of produced goods and services and employment will be higher by about ten million job-years.
…
Thus the big valid complaints about policy over the past fourteen months are not that it has run up the national debt and not that it has rewarded the princes of Wall Street, but rather that it has, if anything, been on too small a scale–that we ought to have done more.
…
Yet these policies appear, somehow, to be political losers in Washington right now: nobody is proposing to do more along the same lines. This is strange: usually when something works the natural impulse is to do it again.
…
So what is going on?

Around the Dial – Nov. 23

Economic policy reports, blog postings, and media stories of interest:

• The New York Times analyzes the competitive landscape facing SAS.
• Calculated Risk charts the rough road ahead for the housing market.
• Paul Krugman discusses the “phantom menace” of rising interest rates.
• At Fed Watch, Tim Duy asks if the Federal Reserve has backed itself into a corner.
• The Winston-Salem Journal looks at unemployment in North Carolina.

Extended Unemployment Insurance Benefits

A new report from the Congressional Research Service summarizes the issues related to the various extensions of unemployment insurance benefits authorized by Congress. With the most recent extension, workers receiving insurance benefits can qualify potentially for four tiers of Extended Unemployment Compensation (EUC).

A key problem is that while Congress has extended benefits, it has not yet reauthorized the larger EUC program, which is set to expire at the end of the year. Explains the report:

There has been some confusion on what the Worker, Homeownership, and Business Assistance Act of 2009, P.L. 111 92, accomplished. P.L. 111-92 expanded benefits available in the EUC08 program. That is, it substantially increased the number of weeks of EUC08 benefits available to individuals; it did not extend the authorization of the program, which currently expires on December 26, 2009. Tier I benefits continue to be up to 20 weeks in duration and tier II benefits are now 14 weeks in duration (compared with 13 previously) and no longer are dependent on a state’s unemployment rate. The new tier III benefit provides up to 13 weeks of EUC08 benefits to those workers in states with an average unemployment rate of 6% or higher. The new tier IV benefit may provide up to an additional 6 weeks of benefits if the state unemployment rate is at least 8.5%; however, at this time tier IV benefits are largely symbolic as few workers will qualify for tier IV before the EUC08 program authorization expires.

Measuring Poverty

In recent months, analysts and policy leaders in Washington have been looking at ways of updating the outmoded federal poverty measurement. In a commentary in the publication Spotlight on Poverty and Opportunity, analyst Annette Case explains why the debate matters and why policymakers must take a broad view of economic hardship. Writes Case:

The purpose for measuring economic deprivation and developing and enacting policies that reduce economic deprivation is to assure opportunities to sustain and grow the middle class and to reduce poverty. The current outdated official measure of poverty, as well as one proposed replacement, provides only half of the information we are looking fo – how poorly people are faring, No official and reliably reported measure exists that tells us how many people are making ends meet or the extent to which they have become economically secure. This part of the story falls off the radad when we engage om debate about the measure of poverty. A strong middle class is essential to a vibrant economy and well-functioning democracy. Adopting a measure of economic security will better support policies that encourage economic mobility and a fair shot at the middle class.

Case’s commentary is part of an ongoing series exploring the question of poverty measurement.

Firm Analysis Informs Economic Reporting

South by North Strategies’ analysis of North Carolina employment data for October informed a variety of media stories, including the following:

• The News & Observer: “State Jobless Rate Inches Up”
• The Winston-Salem Journal: “Unemployment in NC Hits 11 Percent in October”
• WCHL-1360: “State Unemployment Numbers Show Progress”

Additionally, WTVD-ABC 11 in Raleigh-Durham featured John Quinterno of South by North Strategies in a story about the recent extension of unemployment insurance benefits.