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Two big stories today that together reveal a broader landscape. The first is that the Bureau of Labor Statistics today released another blockbuster jobs report. The country added 272,000 jobs in May, far higher than the 180,000 jobs economists predicted. A widespread range of sectors added new jobs, including health care, government, leisure and hospitality, and professional, scientific, and technical services. Wages are also up. Over the past year, average hourly earnings have grown 4.1%, higher than the rate of inflation, which was 3.4% over the same period. The unemployment rate ticked up from 3.9% to 4%. This is not a significant change, but it does break the 27-month streak of unemployment below that number. The second big story is that Justice Clarence Thomas amended a financial filing from 2019, acknowledging that he should have reported two free vacations he accepted from Texas billionaire Harlan Crow. While in the past he said he did not need to disclose such gifts, in today's filing he claimed he had "inadvertently omitted" the trips on earlier reports. ProPublica broke the story of these and other gifts from Crow, including several more trips than Thomas has so far acknowledged. Fix The Court, a nonprofit advocacy group that seeks to reform the federal courts, estimates that Thomas has accepted more than $4 million in gifts over the last 20 years. As economic analyst Steven Rattner pointed out, that's 5.6 times more than the other 16 justices on the court in those years combined. These two news items illustrate a larger story about the United States in this moment. The Biden administration has quite deliberately overturned the supply-side economics that came into ascendancy in 1981 when President Ronald Reagan took office and that remained dominant until 2021, when Biden entered the White House. Adherents of that ideology rejected the idea that the government should invest in the "demand side" of the economy—workers and other ordinary Americans—to develop the economy, as it had done since 1933. Instead, they maintained that the best way to nurture the economy was to support the "supply side": those at the top. Cutting business regulations and slashing taxes would create prosperity, they said, by concentrating wealth in the hands of individuals who would invest in the economy more efficiently than they could if the government interfered in their choices. That smart investment would dramatically expand the economy, supporters argued, and everyone would do better. But supply-side economics never produced the results its supporters promised. What it did do was move money out of the hands of ordinary Americans into the hands of the very wealthy. Economists estimate that between 1981 and 2021, more than $50 trillion dollars moved from the bottom 90% of Americans to the top 1%. In order to keep that system in place, Republicans worked to make it extraordinarily difficult for Congress to pass laws making the government do anything, even when the vast majority of Americans wanted it to. With the rise of Senator Mitch McConnell (R-KY) to the position of Senate majority leader in 2007, they weaponized the filibuster so any measure that went against their policies would need 60 votes in order to get through the Senate, and in 2010 they worked to take over state legislatures so that they could gerrymander state congressional districts so severely that Republicans would hold far more seats than they had earned from voters. With Congress increasingly neutered, the power to make law shifted to the courts, which Republicans since the Reagan administration had been packing with appointees who adhered to their small-government principles. Clarence Thomas was a key vote on the Supreme Court. But as ProPublica reported in December 2023, Thomas complained in 2000 to a Republican member of Congress about the low salaries of Supreme Court justices (equivalent to about $300,000 today) and suggested he might resign. The congressman and his friends were desperate to keep Thomas, with his staunchly Republican vote, on the court. In the years after 2000, friends and acquaintances provided Thomas with a steady stream of gifts that supplemented his income, and he stayed in his seat. But what amounts to bribes has compromised the court. After the news broke that Thomas has now disclosed some of the trips Crow gave him, conservative lawyer George Conway wrote: "It's long past time for there to be a comprehensive criminal investigation, and congressional investigation, of Justice Thomas and his finances and his taxes. What he has taken, and what he has failed to disclose, is beyond belief, and has been so for quite some time." A bit less formally, over a chart of the monetary value of the gifts Thomas has accepted, Conway added: "I mean. This. Is. Just. Nuts." As the Republican system comes under increasing scrutiny, Biden's renewal of traditional economic policies is showing those policies to be more successful than the Republicans' system ever was. If Americans turn against the Republican formula of slashing taxes and deregulating business, those at the top of the economy stand to lose both wealth and control of the nation's economic system. Trump has promised more tax cuts and deregulation if he is reelected, although the nonpartisan Congressional Budget Office recently projected that his plan to extend the 2017 tax cuts that are set to expire in 2025 will add more than $3 trillion to the deficit over the next decade. In April, at a meeting with 20 oil executives, Trump promised to cut regulations on the fossil fuel industry in exchange for $1 billion in donations, assuring them that the tax breaks he would give them once he was in office would pay for the donation many times over (indeed, an analysis quoted in The Guardian showed his proposed tax cuts would save them $110 billion). On May 23, he joined fossil fuel executives for a fundraiser in Houston. In the same weeks, Biden's policies have emphasized using the government to help ordinary people rather than to move wealth upward. On May 31 the Internal Revenue Service (IRS) announced that it will make its experimental free electronic filing system permanent. It asked all 50 states and the District of Columbia to sign on to the program and to help taxpayers use it. The program's pilot this year was wildly successful, with more than 140,000 people filing that way. Private tax preparers, whose industry makes billions of dollars a year, oppose the new system. The Inflation Reduction Act provided funding for this program and for beefing up the ability of the IRS to audit the wealthiest taxpayers. As Fatima Hussein wrote for the Associated Press, Republicans cut $1.4 billion from these funds last summer and will shift an additional $20 billion from the IRS to other programs over the next two years. Today the U.S. Department of Health and Human Services issued five new reports showing that thanks in part to the administration's outreach efforts about the Affordable Care Act, the rate of Black Americans without health insurance dropped from 20.9% in 2010 to 10.8% in 2022. The same rate among Latinos dropped from 32.7% to 18%. For Asian Americans, Native Hawaiians, and Pacific Islanders, the rate of uninsured dropped from 16.6% to 6.2%. And for American Indians and Alaska Natives, the rate dropped from 32.4% to 19.9%. More than 45 million people in total are enrolled in coverage under the Affordable Care Act. President Biden noted the strength of today's jobs report in a statement, adding: "I will keep fighting to lower costs for families like the ones I grew up with in Scranton." Republicans "have a different vision," he said, "one that puts billionaires and special interests first." He promised: "I will never stop fighting for Scranton—not Park Avenue." — Notes: https://www.washingtonpost.com/business/2024/06/07/may-jobs-unemployment/ https://www.cnn.com/business/live-news/jobs-report-may-06-07-24/index.html https://www.bls.gov/news.release/empsit.nr0.htm https://www.cnbc.com/2024/06/07/jobs-report-may-2024-us-job-gains-totaled-272000-in-may.html https://www.propublica.org/article/clarence-thomas-gift-disclosures-harlan-crow https://www.propublica.org/article/clarence-thomas-money-complaints-sparked-resignation-fears-scotus https://time.com/5888024/50-trillion-income-inequality-america/ https://www.theguardian.com/us-news/article/2024/may/22/trump-oil-industry-campaign https://www.nytimes.com/2024/04/11/us/politics/trump-biden-affordable-care-act.html X: SteveRattner/status/1799058177373381097 SteveRattner/status/1798749555002941930 gtconway3d/status/1799122270037713027 |
― The Lincoln Project
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