U.S. Economy Expanded in Second Quarter

Washington Post: “The U.S. on Thursday will release growth figures for the months between April and June, providing a read on the direction of the economy following a contracting in the first quarter.”

“Economists expect that the nation’s gross domestic product grew at an annual rate of 2.5 percent in the second quarter.”

“The Federal Reserve had signaled on Wednesday that it could soon raise interest rates for the first time in nearly seven years, and Thursday’s data will likely influence the decision.”

 

The Widening Wealth Gap Between Young and Old

Washington Post:  A new paper by economists at the St. Louis Fed’s Center for Household Financial Stability shows “evidence of a growing wealth gap that few people are talking about — the gap between the young and the old.”

“Everyone’s income and wealth tend to follow a kind of natural pattern during their life … You can see these trends in this incredible graph below, from their paper. People born in different years (1901, 1904, 1907 and so on) were surveyed at various times between 1989 and 2013 about their median family income. The chart below shows their age on the horizontal axis, and the median family income they reported making at the time on the vertical axis.”

“The period of time in which someone is born can also have a dramatic effect on their wealth compared with other generations. The winners of this historical jackpot appear to be those who were born between 1930 and 1945 and came of age after World War II, who are sometimes called The Silent Generation.”

“In just 25 years, the wealth gap between young and old people has yawned wider. In 1989, old families had 7.6 times as much median wealth as young families. By 2013, it had grown to 14.7 times.”

Employment Growth is Up, But Productivity Down. Why?

Ryan Cooper in The Week: “After a huge spike following the Great Recession, productivity growth has fallen to historically low levels. For the first quarter of 2015, the Bureau of Labor Statistics reported that productivity actually fell at a 3.1 percent annual rate.”

“Employment growth has been relatively strong, but output weak — and thus output per hour worked is down.”

Cooper attributes the problem to “weak aggregate demand. In 2015, we are seven years out from the worst economic crisis in 80 years. And though things have improved greatly since 2010, the problem is still not even close to being fixed.”

“Whatever one’s pet theory about how to increase productivity, it almost has to be the case that a tight labor market plays a role. Full employment — in which good employees are scarce and must be paid well — provides a powerful impetus towards increased productivity.”

“Weak aggregate demand … is both one of the most plausible explanations for the drop in productivity and a complete no-brainer to fix. You just dump money into the economy (literally) until inflation starts to kick up, and then back off. It’s really that simple.”

Trump and Delusional Punditry

Paul Krugman explains how Trump’s popularity defies conventional wisdom.

“I am, of course, talking about pundits who prize themselves for their centrism.”

“Pundit centrism in modern America is a strange thing. It’s not about policy … What defines the cult is, instead, the insistence that the parties are symmetric, that they are equally extreme, and that the responsible, virtuous position is always somewhere in between.”

“The trouble is that this isn’t remotely true. Democrats constitute a normal political party, with some spread between its left and right wings, but in general espousing moderate positions. The GOP, on the other hand, is a deeply radical faction; even its supposed moderates are moderate only in tone, not in policy positions, and its base is motivated by anger against Others.”

“On one side, they can’t admit the moderation of the Democrats … On the other side, they have had to invent an imaginary GOP that bears little resemblance to the real thing. This means being continually surprised by the radicalism of the base. It also means a determination to see various Republicans as Serious, Honest Conservatives — SHCs? — whom the centrists know, just know, have to exist.”

Clinton Refuses to Take a Position on Keystone XL

National Journal: “Hillary Clinton wants to wait until she wins the White House before taking a stand on the controversial Keystone XL pipeline.”

“At a town hall in New Hampshire on Tuesday, Clinton responded to a question from the audience asking if she would sign a bill approving the pipeline by saying that she would not ‘second guess’ President Obama’s decision. Should the issue still be alive in January 2017, however, then Clinton will say what her position is.”

“That answer is sure to rile environmentalists, who have made opposition to the controversial pipeline that would ship oil from Canada to the Gulf Coast a political litmus test.”

Chris Cillizza: “Look. When you are running for president — whether or not you served in the current administration — you are going to be asked to take positions on issues that the current president is dealing with. As long as we hold elections that begin two years (or more) before the current president is set to leave office, that’s going to be a thing candidates need to contend with. If Clinton’s position is that she can’t take a public stance on any issue that has some sort of pending business before this White House, then she’s not going to be able to take a position on, well, anything.”

Health Costs Projected to Increase

Wall Street Journal: “Growth in national health spending, which had dropped to historic lows in recent years, has snapped back and is set to continue at a faster pace over the next decade, federal actuaries said Tuesday.”

“The return to bigger growth is a result of expanded insurance coverage under the 2010 health law, a revived economy and crunchtime as Medicare’s baby-boom beneficiaries enter their 70s.”

“American spending on all health care grew 5.5% in 2014 from the previous year and will grow 5.3% this year, according to a report from actuaries at the Centers for Medicare and Medicaid Services published in the journal Health Affairs. In the years through 2024, spending growth is expected to average 5.8%, peaking at 6.3% in 2020.”

Sarah Kliff in Vox: “More health spending is, in one way, a good thing: It reflects more Americans gaining health insurance and seeking out needed medical care as the economy recovers.”

Which is More Lethal: Alcohol or Pot?

Christopher Ingraham: “As marijuana becomes legalized and more inexperienced users try it, some of them will inevitably do stupid things. Some of these stupid things will end in tragedy. But the overwhelming consensus among public health researchers is that marijuana is far less dangerous than alcohol. If you want to get the most bang from your public health buck, the evidence suggests you should work to reduce alcohol consumption.”

Obamacare Has Improved Access to Health Care

Jonathan Cohn points to new research suggesting that since Obamacare’s implementation, Americans have better access to health care.

“It’s one more reason to think Obamacare is not the fiasco that critics claim it to be.”

“In a new paper for the Journal of the American Medical Association, a group of scholars attempt to produce a before-and-after picture of the health care law’s implementation. To do so, they draw on three years of data from Gallup’s ongoing ‘well-being index’ survey.”

The researchers “adjusted the responses for variables like unemployment, in an attempt to isolate the effects of the health care law from other factors, such as the recovering economy. The researchers also looked specifically at the trends — in other words, whether access to care was getting worse before the health care law’s implementation, and, if so, whether that deterioration stopped.”

“Every trend had been getting worse — and then, with the health law’s full implementation, either stopped getting worse or started getting better. Lead author Benjamin Sommers … said the difference amounted to 11 million more adults saying they can afford their health care and 6.8 million reporting they were in good health.”

“The ACA’s first 2 open enrollment periods were associated with significantly improved trends in self-reported coverage, access to primary care and medications, affordability, and health.”

Economic Confidence Slides to New Low

Gallup: “Gallup’s Economic Confidence Index continued its gradual, downward slide, reaching -14 for the week ending July 26. This represents a 10-month low for the index.”

Gallup's U.S. Economic Confidence Index -- Weekly Averages Since July 2014

“Though Americans’ confidence in the national economy has skewed negative for six months now, the recent drop of the current conditions component comes on the heels of a new path for solving the Greek debt crisis and amid a tumultuous period for Chinese stocks. The instability abroad could be fueling Americans’ doubts about the health of the U.S. economy, not to mention that the Dow closed lower several days in a row last week.”

Mass Shootings Mapped

Philip Bump: “The ShootingTracker data catalogs news reports of incidents in which four or more people were shot. That’s happened 207 times in 2015, as of Monday afternoon. (An important qualification, since the figure changes frequently.) In these incidents, 267 people have been killed and 761 wounded. About 400 of those in the latter category were hit by bullets at incidents where no one was killed.”

A Modest Increase for Obamacare Rates in California

L.A. Times: “California’s Obamacare exchange negotiated a 4% average rate increase for the second year in a row, defying dire predictions about health insurance sticker shock across the country.”

“The modest price increases for 2016 may be welcome news for many of the 1.3 million Californians who buy individual policies through the state marketplace, known as Covered California.”

“California’s rates are a key barometer of how the Affordable Care Act is working nationwide, and the results indicate that industry giants Anthem and Kaiser Permanente are eager to compete for customers in the nation’s biggest Obamacare market.”

“’California wasn’t the doomsday scenario we had been hearing about,’ said Christine Eibner, a healthcare economist at the Rand Corp., a Santa Monica think tank.”

A Closer Examination of Clinton’s Climate Change Proposal

Think Progress: Hillary Clinton “released a fact sheet detailing her plan to fight climate change, and it focuses heavily on promoting clean energy generation across the country. Among other things, the plan includes a promise to install half a billion solar panels by 2021, or the end of Clinton’s first term. That would represent a 700 percent increase from current installations, she said. Clinton also promised that, if elected, enough renewable energy would be produced to power every home in the country within 10 years.”

“The aggressive transition to renewables proposed by Clinton would be achieved partially through extending and strengthening tax breaks those industries, Clinton said.”

A chart provided by the Clinton campaign shows how Clinton's renewable energy goals compare to renewable generation today, and what would be achieved under Obama's Clean Power Plan.

Brad Plumer asks: “Is that plausible? US solar capacity grew 418 percent between 2010 and 2014 (it was starting from a small base). So a 700 percent rise between 2014 and 2020 is at least within the realm of possibility. But it’s undeniably a difficult task. The United States installed about 6.2 gigawatts of solar in 2014. Clinton is essentially vowing to up that rate to around 30 gigawatts per year during her tenure in office.”

Philip Bump adds that “solar has the benefit of being scalable on an individual level, which means that some organizing can help. And studies have found that solar power adoption is contagious. But despite the recent growth … solar is still a tiny part of the overall energy mix. In recent years, far larger growth in renewable power generation has been in wind.”

Ben Feman and Clare Foran in the National Journal point out that “the announcement does not address a suite of controversial topics, including whether Clinton supports the Keystone XL pipeline and whether she would allow oil drilling in Arctic waters.”

While Congress Resists EPA Power Plan, States Find Solutions

Washington Post: As the EPA prepares to roll out the Clean Power Plan, “states will have to find ways to achieve dramatic cuts in carbon pollution over the next 15 years, with reduction quotas topping 50 percent over 2012 levels for some states. But despite dire warnings and harsh political rhetoric, many states are already on track to meet their targets, even before the EPA formally announces them, interviews and independent studies show.”

“Iowa is expected to meet half of its carbon-reduction goal by next year, just with the wind-power projects already planned or in construction. Nevada is on track to meet 100 percent of its goal without additional effort, thanks to several huge ­solar-energy farms the state’s electricity utilities were already planning to build. From the Great Lakes to the Southwest, electric utilities were projecting huge drops in greenhouse-gas emissions as they switch from burning coal to natural gas — not because of politics or climate change, but because gas is now cheaper.”

“States’ interest in the EPA’s Clean Power Plan has soared in recent weeks as the agency prepares to reveal the final contours of a proposal that was first announced more than a year ago. Administration officials have been meeting privately for weeks to craft a final version that will withstand legal and legislative challenges. One senior administration official said the revised plan will include provisions that will make it easier for most states to comply.”