Capital Gains and Games

The BLS released information on real earnings in April this morning, and the news is not encouraging:

Real average weekly earnings fell by 0.5 percent from March to April after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor.  A 0.1 percent increase in average hourly earnings was offset by a 0.3 percent decrease in average weekly hours and a 0.2 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The last three decades have not been kind to real earnings.  Take a look at the full history of the real earnings series:

 

Here's my "Fiscal Fitness" column for this week from Roll Call.

Bush Budget Legacy:
Much More Debt,
Far Fewer Options

May 13, 2008

At the same time that the three main reality shows — “American Idol,” “Dancing With the Stars” and the 2008 election — are dominating much of the water cooler talk these days, I’m increasingly haunted by something George W. Bush promised as he was entering the White House: He said he would eliminate the national debt by the end of this decade.

That pledge was made for two reasons. First, federal budget surpluses were recorded from fiscal 1998 to 2001. Even though the surpluses were unexpected and no one was really sure why they happened, the president and almost everyone else assumed that, after four years in a row, they would continue.

Pete's post today about two very possible veto overrides that could happen in the next few weeks is very significant.

Overrides would have been an important development under any circumstances. But they take on even more significance in light of the win by the Democratic candidate in the Mississippi special election last night.

The fact that it's the third special election the Democratic candidate has won this year is noteworthy. The fact that the wins have all come in districts that were considered absolutely safe Republican up to that point makes you to sit up and take notice. The additional fact that all of these seats were expected to stay Republican had the incumbent chosen to run for reelection virtually forces you to wonder what's really going on.

As I said last week, the 2008 election is starting to have all the signs of not just a Democratic win, but also realignment.

Election years find Congress and candidates climbing over each other to convince voters that they have their best interests at heart.  When gas prices skyrocket, Congress votes overwhelmingly, as it did yesterday, to suspend additions to the Strategic Petroleum Reserve, even though this will not lower gas prices.  Record high food prices are no reason to cut farm subsidies.  The farm bill funds nutrition programs, but it would also create a permanent disaster relief program and reward catfish farmers and racehorse owners.  President Bush has vowed to veto both bills, but Congress is about to override those vetoes with strong support from both parties.  This is fantasy budgeting at its best. 

For the record, I don't believe Senator Clinton is under any obligation to leave the race because she is behind by a margin that would be difficult to overcome.  I think our presidential nominating process would be well served by a system in which every state and territory had an actively contested primary or caucus.

But what are we to make of the conclusion to Ellen Malcolm's Saturday op-ed in The Washington Post?

Andrew, Pete, and I were bantering last week here at CG&G about what the increase in same store sales at Wal-Mart meant. Pete and I thought that, contrary to what others were saying, the increase was not a sign that consumer spending was on the rise, that the worst was not over, and that the increase was actually an indication that consumers were substituting less expensive goods for what they might have bought in the past. Andrew said the increase was not as impressive as some said it was and shouldn't be over-interpreted.

Not to be too self-congratulatory but...not only were were right, but we were right days before the rest of the market got wind to what was actually happening.

From our friends at Marginal Revolution:

There's a reason why they didn't set Sex in the City in Paramus and most of the women there will be working even when the traffic gets worse.

Read the whole post for more about why married women work more in some cities than in others.  The subject reminded me of an earlier discussion at Vox Baby in summer 2006 about "Men Not Working."

My Beautiful and Talented Wife (The BTW), who is one of the least politically interested people I know, was screaming at the the television yesterday as Wolf Blitzer interviewed House Minority Whip Roy Blunt on CNN.  She was flipping channels but heard Blunt say that John McCain's economic and tax policies would be, in Wolf's words, "a third Bush term."

Because she's not part of the policy world, when The BTW reacts very positively or negatively to something political or economic I generally find that she's a great indication that something is happening.  It was her positive initial reaction to Ross Perot, for example, that made me realize he had to be taken more seriously than I had been doing up to that point.

So when The nonpolitical BTW was literally screaming at Roy Blunt that the last thing she wanted was another four years of George Bush, I realized just how angry some people may be.

Noam Neusner, one of President Bush's former economic speechwriters with whom I worked while at the CEA, has a nice piece in the Forward this week taking passionate but casual environmentalists to task for not living up to their own policy prescriptions. 

His editorial reminded me of an observation I made about conservation (this time while on the ground) during my trip to San Francisco last month.  There is no carpool lane on U.S. 101 south of the city until you get to San Mateo county and, in particular, south of the airport.  Ever the economist, I made sure to check that this was not because Bay Area commuters seemed to carpool extensively without need of those pesky incentives.  Plenty of driver-only vehicles, maybe a bit fewer driver-only SUVs than other places I've been.  I've decided that I'll defer to the Google folks on conservation and alternative energy.  The rest of you Hippie-Crites in SF can call me when you get a carpool lane on the major North/South artery.  Reach me on my cell phone as I'm walking to work.