Previous Post: Part 1 — Evaluating EPI’s “Stagnant Wage” Claims

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The first sentence of CNN/Money’s Labor Day report entitled “GDP Growth Not Reaching Paychecks” certainly had entertainment value (bold is mine):

The economic expansion that began six years ago has failed to benefit most workers, according to a report from the nonpartisan Economic Policy Institute, released Monday.

Clearly, CNN/Money blindly accepted at face value this description found at EPI’s “About” page:

The Economic Policy Institute is a nonprofit, nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy.

Interesting. I can call myself “the world’s fastest human,” but that doesn’t make me that person.

From the EPI’s own description of itself, you would surely have no clue that one of EPI’s founders is the editor of a far-left staple, The American Prospect, who not only frequently called for the impeachment of Alberto Gonzalez before the Attorney General announced his departure last week, and but has also called for President Bush’s impeachment.

But in fact, EPI Founder Robert Kuttner, who is still on the organization’s board, “tripled down” in mid-August, advocating the impeachment of Gonzalez, and Bush, and Dick Cheney all in the same column, and mixing in some of the far left’s most tiresome nostrums about the administration:

First Gonzales, then Bush
Impeachment should be a serious option — with an intermediary step.
Robert Kuttner | August 13, 2007

In American politics, brave actions are politically unthinkable until someone thinks to act on them. Then public opinion can turn, sometimes with surprising speed.

For several months, I have been arguing with friends and colleagues that impeachment of President Bush and Vice President Cheney should be a serious political option. Just two of their crimes and misdemeanors — willfully lying America into war and firing federal prosecutors for purely political reasons, then further obstructing justice by stonewalling about the dynamics of the firings — are more than adequate constitutionally to impeach. There are several other offenses, ranging from defying the lawful mandates of Congress and the courts, to gross invasions of civil liberty, to denying democracy itself by systematically undermining the right to vote. And, in the seventh year of this eerie administration, in which the president is a puppet of the vice president (rendering the usual mechanisms of accountability opaque), the curtain has only just begun to be pulled back on Cheney.

….. If the Democratic leadership in Congress works up the nerve to impeach Gonzales, the process would make it less unthinkable to imagine impeaching Bush — and could well elicit more evidence of impeachable conduct. Even if Bush retained office, public attention would be focused on his misdeeds and those of Cheney. Republicans would be forced either to abandon Bush as they ultimately abandoned Nixon, or to defend odious actions. Either way, they would pay dearly in 2008. At worst, Bush would toss Gonzales overboard before the waters rise around his own neck.

Kuttner has been playing the Gonzalez impeachment tune for quite some time, going back at least as far as this March column in the Boston Globe. He also has been hysterically promoting the “Cheney really runs things” line for longer than that.

A further look at EPI’s board is enough to make one think that its claim of non-partisanship is an April Fool’s joke that was mistakenly never withdrawn — unless “nonpartisanship” is achieved by assembling a collection of socialists, public- and private-sector union bosses, and genuine career Democrats. Here are most of the remaining names:

Chairman of the Board Gerald W. McEntee
President, American Federation of State, County and Municipal Employees

The World Socialist Web Site can’t even abide by McEntee, noting that:

“In April 1998 a federal grand jury in New York indicted William Hamilton, Carey’s top political lobbyist, on six counts of fraud, perjury, embezzlement and conspiracy. The indictment also cited top AFL-CIO leaders–including Secretary-Treasurer Richard Trumka, McEntee, another high-ranking AFSCME officer, Paul Booth, and SEIU President Andrew Stern–for their involvement in Carey’s money-swapping scheme.”

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Secretary-Treasurer Julianne Malveaux
Economist, writer, syndicated columnist; owner, Last Word Productions

This woman’s outrageous rants could fill a book — a very, very long book. Here’s part of her reaction to the September 11 terror attacks:

“As outraged as I am, I am also reconciled to the fact that this attack, despicable as it is, was also provoked. The United States has insisted on playing 700-pound gorilla with the rest of the world, failing to cooperate with international treaties, to participate in international conference. Our message has been ‘our way or the highway,’ and it seems that such a message begs someone to humble us. Our grandmas used to tell us that the bigger you are the harder you fall. No one hoped that the World Trade Center would come toppling down, but many wondered how the hubris the US has showed the world would play itself out. You can’t be the biggest, the baddest, the strongest, the mightiest, without having a corner of compassion, cooperation or humility. Or, your opponents look for cracks in your armor. Sadly, startling, it looks like they found ours.”

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Other heads of major unions: AFT, IAM, CWA, SEIU, UAW, USW, UNITE

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Richard Trumka, Secretary-Treasurer of the AFL-CIO

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Former Secretaries of Labor Robert Reich (Clinton Administration) and Ray Marshall (Johnson Administration)

EPI’s Wikipedia page describes the organization as “progressive,” while the page on current president Lawrence Mishel calls it “liberal.” Neither entry has the gall to claim that EPI is “nonpartisan.”

EPI even provides gullible journalists further guidance on how it should be described:

Describing EPI
The Economic Policy Institute is an independent, non-profit, non-partisan research institute — or “think tank” — based in Washington, D.C. EPI researches the impact of economic trends and policies on working people in the United States and around the world.

……

EPI should be described in the same manner as other major research institutions, such as the Heritage Foundation, the Brookings Institution, the CATO Institute, and the American Enterprise Institute, which are generally not labeled according to their funding sources.

Where does EPI fit on the political spectrum?
EPI is nonpartisan, and our economic research, which is based on government data and other neutral sources, should require no label.

I find it quite appropriate that the President of UNITE (Union of Needletrades, Industrial and Textile Employees) is on EPI’s Board, because the organization’s claims of nonpartisanship leave me in stitches.

Cross-posted at NewsBusters.org.

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UPDATE: Since EPI mentions the Heritage Foundation, which has the intellectual honesty to call itself conservative at its “About Us” page, it’s worth noting that in a search of CNN/Money.com for “Heritage Foundation” (in quotes), four of the site’s most recent six articles called the organization “conservative” (Feb. 22, last paragraph; March 27, 7th paragraph; June 5, 7th paragraph; July 25, 7th paragraph from the end), while the other two (August 24, Page 4, 1st paragraph; May 25, 3rd paragraph) did not apply a label to it.

In its Labor Day report entitled “GDP Growth Not Reaching Paychecks,” CNN/Money began with this multi-faceted howler (bolds are mine):

The economic expansion that began six years ago has failed to benefit most workers, according to a report from the nonpartisan Economic Policy Institute, released Monday.

Productivity growth, although slower of late, has been strong since 2000. After a sluggish start in the period, employment has picked up, although at a slower pace than in past recoveries. Yet, that growth hasn’t transferred to workers’ paychecks, particularly for workers at the lower and middle end of the pay scale, the report found.

After rising quickly in the second half of the 1990s, most workers’ (sic) real wages have been stagnant in the 2000s, especially since 2003.

This post will deal with EPI’s claims; Part 2 deals with its absurd assertion, swallowed whole by CNN/Money, that it is “nonpartisan.”

As to the claims — How convenient of EPI to begin by using “six years,” when meaningful post-dotcom bubble expansion in the economy didn’t begin until the second quarter of 2003, when GDP growth was an annualized 3.5% (go to this Bureau of Economic Analysis page and select the appropriate time period to confirm this). Of course, after a year of languishing because of the jolt of of the 9/11 terror attacks, and the relatively ineffectual impact of 2001’s piecemeal rate cuts, the kick-start to GDP finally took place once the Bush 2003 investment-related tax cuts and steeper rate cuts took hold.

Any attempt to debunk specific numbers in CNN/Money’s report is hampered by its lack of citations to specific sources. The EPI report itself, with its frequent references to “Author’s analysis of data,” makes verifying its representations difficult without what I believe would be many hours of reverse engineering.

Fortunately, that’s not necessary. If you go to recently released comprehensive Census Bureau data on households, you’ll find that the EPI’s “especially since 2003″ claim of wage stagnation — the benchmark for whether the 2003 tax cuts have had their intended effect — isn’t even in the neighborhood of the truth (information is from page 46 of the Census Bureau report, “Income, Poverty and Health Insurance in the United States: 2006,” released last week; it is a huge PDF that can be downloaded by going to at this regular web page):

I’m not claiming these results are where I would want them to be, but they are all positive. In fact, the household results show more real improvement at the lower income levels than is found in the middle and upper-middle.

As to whether incomes have continued to grow in the first half of 2007, go here — There are very few income-increase numbers that are less than inflation plus population growth during the first and second quarters of this year.

For things to be “stagnant” in the economic sense, meaning “characterized by lack of development, advancement, or progressive movement,” the numbers above would have to almost all be near zero. They clearly aren’t, and EPI is clearly wrong.

So the EPI is hyperventilating about “especially since 2003″ because its fervent desire is to discredit the 2003 Bush tax cuts.

CNN/Money’s “help” to EPI in this case goes beyond its usual role as liberal think-tank stenographer, as this picture of a portion of the report clearly shows:

That’s right — In case you dumb readers don’t get the point, CNN/Money is reminding us, with a prior-story link dropped smack dab into the midst of the article’s text, that this is really all about “us-vs.-them.”

Back to EPI — Its hyperventilation is occurring because it is anything but “nonpartisan.” Part 2 addresses that, as well as CNN/Money’s very different treatment of a competing think tank.

Cross-posted at NewsBusters.org.

Wayne Witt of Loveland pithily puts it out there at the Cincinnati Enquirer (link to original Enquirer story in Witt’s letter added by me):

Let me get this straight. The people charged with running the institute of higher learning in this city (University of Cincinnati) have decided that an 8 percent raise with a $30,000 bonus for the president is a good idea? (”8% raise advised for Zimpher,” Aug. 30).

Even though the budget had a shortfall of $27 million and the interest each year to pay off the various building projects is 8 percent of the total budget each year. Have I missed anything? Oh, yeah! Tuition never fails to rise! Funny thing is that I am a 45-year-old part-time student at UC working on a business degree, and I can figure out the numbers just don’t add up. Someone with fiscal restraint on UC’s board please stand up and take charge?

Witt is just scratching the surface. From all appearances, Nancy Zimpher is virtually untouchable by the trustees supposedly responsible for watching her. Zimpher also appears to have managed to get what used to be an at least occasionally skeptical Cincinnati Enquirer press corps firmly into her back pocket, turning it into a press release copy machine (more on that later).

Previously, yours truly noted in March how a Clint Peale puff piece on UC’s building projects (link no longer available) failed to even mention the eminent domain setback the University had suffered in the proposed McMillan Park project area between McMillan and Calhoun Streets. Peale called the local development consortium in which the school is the principal player “a development powerhouse.”

Uh, not exactly.

The McMillan Park project, aka “The Grassy Knoll,” as reported by the Cincinnati Business Courier in July, may not be just merely dead, it may be most sincerely dead. And there are probably more McMillan Park-like fiascoes to come (bold is mine):

Rising costs and skeptical lenders might deal a death blow to McMillan Park, a $100 million condominium development planned for the Calhoun Avenue corridor, south of the University of Cincinnati.

The nonprofit development group that has been planning the project for more than five years claims its lending partners — which include the University of Cincinnati and the Uptown Consortium — are changing elements of the project’s financing plan, a move that could force them to scuttle the project altogether.

“We’ve basically destroyed a business district only to have the rug pulled out from under us,” said Dan Deering, a trustee for the Clifton Heights Community Urban Redevelopment Corp (CHCURC).

….. Since it starting using endowment funds to finance off-campus development projects about six years ago, UC has loaned out more than $127 million to various nonprofit development corporations. Roughly $27 million has been paid back. CHCURC owes UC more than any other off-campus development group — roughly $32 million as of May 31.

On campus, it may be even worse, as a July 20 Cincinnati Business Courier article detailed (bold is mine):

University of Cincinnati trustees resolved this week to keep closer tabs on the school’s construction programs after they were surprised to learn of an $89 million increase in the cost of a long-planned renovation project.

….. UC revamped its cost estimates for the project in January but didn’t brief board members on the changes until July 17 - when trustees were asked to approve a new two-year capital budget at a special meeting.

….. Trustee Thomas Humes said the board had been expecting an increase but not the 77 percent jump detailed in the July 17 report to the trustees’ administration and finance committee. The report accompanied a resolution to increase UC’s borrowing authority for the project by 140 percent to $410 million.

The $240 million increase is the largest commitment of new debt authority in the school’s history. And it comes at a time when UC already is struggling under the weight of a $1.2 billion debt load.

Humes, a local land developer, said he voted for the increase hesitantly because he was concerned about the cost increase. (Ya think? — Ed.)

….. Humes said trustees believe UC’s administration is “doing the best job that it can in dealing with the situation,” but trustees were disappointed to learn the scope of new overruns in the medical sciences building renovation.

“That’s always bothersome when that happens…..”

You can’t make up quotes like that final gem from Humes.

The Business Courier deserves credit for at least running substantive stories on UC. But amazingly, the Courier’s reports, as well as the Enquirer puff piece noted above, all have one notable omission — Nancy Zimpher’s name is nowhere to be found. How does that happen? Is she not in charge? How can she possibly have no accountability for the mushrooming overruns and the 6-month delay in reporting problems to the trustees?

Oh, Nancy DID get mentioned in the Courier, in connection with yet another proposed construction project (bold is mine):

University of Cincinnati President Nancy Zimpher recently endorsed Cincinnati’s new streetcar initiative, in a speech to the Over-the-Rhine Chamber of Commerce.

“We want the trolley all the way up the hill,” Zimpher recently told a crowd of several hundred civic and business leaders at the Chamber’s annual meeting. Zimpher wants UC’s 35,000 students and 14,000 employees to be able to take a short trip down Vine Street to visit Findlay Market, Fountain Square and Over-the-Rhine’s Brewery District.

Zimpher’s endorsement of Cincinnati’s latest rail initiative “gives it a great deal of additional credibility,” said Cincinnati Councilman Chris Bortz, who said a rail link to Uptown should be a top priority for rail planners. He estimates it would cost about $80 million to extend the streetcar line up Vine Street.

Don’t get me wrong. The trolley could make sense, but Nancy’s endorsement is the last place I’d be looking to if I wanted to bolster its “credibility.”

Why should we not think that the free pass bonus- and pay raise-laden pass that Nancy Zimpher is getting from the Cincinnati Enquirer, aka the Invisibler, is totally related to the fact that Enquirer Publisher Maggie Buchanan is on UC’s Board of Trustees? For cryin’ out loud, the Enquirer couldn’t even squeeze the word “bonus” into its headline (or Witt’s letter), even though the story was about Zimpher’s raise AND bonus.

In Cleveland there’s at least some debate over the propriety of the Plain Dealer’s publisher sitting on the Cleveland Clinic’s board (the link to the original PD news item is, ahem, bare). In Cincinnati, it’s “Conflict? What conflict?”

Steigerwald and Kotkin, the gentleman whose anecdotal subscription-only Wall Street Journal column in early August spurred me to verify that “deindustrialization” is indeed a myth a couple of weeks ago, rip into politicians and the journalists who cover them with a vengeance, using Pittsburgh as his backdrop, at the conclusion of this interview:

Q (Steigerwald): You mentioned earlier you were a Pat Brown-Harry Truman Democrat. What’s that?

A (Kotkin): In other words, meat and potatoes; get the job done; that you understand that a Democrat is first and foremost a representative of a middle-class party that has middle class values and is the party of upward mobility and is willing to use the public sector where necessary to lead that charge — that’s why I’m not a Republican. But I find that Republicans at least are willing to be occasionally skeptical about some of these boondoggles, where most Democrats are in some sort of “dogmatic slumber,” as Kant talked about. You can’t say a bad word about light rail – or that maybe a bus rapid transit can get the job done for a third the price, which means the inner-city Pittsburgh person can actually get to a job in the outer areas. Instead we want to build a cute little light-rail line, so that maybe we can convince a couple yuppies to take the train to work for a couple weeks. It’s demented. Meanwhile, then they wonder why people keep moving farther out into the suburbs or other cities. They’ve expended so much money. Take the $1.5 billion they’ve spent in Pittsburgh (for stadiums, etc.) — include your stupid ($450 million) light-rail tunnel under the river. What if you had had a tax reduction for businesses? Or if you had built the best bus and toll way system, so that Pittsburgh became a great place to ship goods in and out of? Or if you built a wonderful park system, so that people would say, “I want to come live in Pittsburgh because they have the best park system”? There are a lot of ways that you could have spent or not spent that money.

Q: Instead what we have are two stadiums, a gigantic convention center that’s empty half of the time or giving away its space and a $450 million light-rail tunnel.

A: I’ll tell you the truth, a lot of the blame comes to the journalists. The journalists never ask the tough questions. They basically follow the scripts that they are given. And also part of the problem, and we’ve talked about this in general about journalism these days, you have got a bunch of young kids who are there for two or three years. They don’t understand what crap this is. To them it’s all, “Well, there’s an art museum downtown. That’ll be good for me.” If there is some “starkitect” -designed building, they say, “Wow, that’s sort of fun for me.” They don’t care.

Q: I’ve always said the newspapers of America should be indicted en masse for having countenanced 50 or 60 years of the destruction of cities. I bet 95 percent of newspapers have applauded and cheered every boondoggle, every urban-renewal project back in(to) the 1950s, every new light-rail project — no matter what it was, newspapers cheered them on.

A: And what happens if you have the temerity to suggest that this may not be the way to go? You’re “anti-city,” you’re “pro-suburbs,” you’re a “neoconservative” — like I’m Dick Cheney or something. You get name-called. And all you’re saying is, “Look, are we sure that what we are putting our money into is really what matters, given the tremendous pressing needs that every city has?”

Cincinnati echoes abound. Perhaps Cleveland too.

Many good points about the nature of and challenges in 21st century manufacturing precede the excerpted rant, so read the whole thing.

Don’t get me started. We’re up. It should last, and if it doesn’t, things will not be pretty between me and Mr. Host.

I indicated my disinterest in following the daily ins and outs of a 23-month presidential campaign way back in December (last two paragraphs). Since then, the maneuvering by states wanting to be first, or nearly first, in the presidential primary process has spun out of control. Michigan wants its voters to brave possibly blizzard-like elements in mid-January — maybe, at least based on early results, to more quickly forget a certain football team’s potentially very ugly season.

If the Wolverine State’s move stands, it means that New Hampshire voters, whose state has a law that its primary must come first, will barely have time to put away the New Year’s champagne glasses before they vote. In turn, Iowa’s citizens may be taking Christmas wrappings out to the trash on the way to voting in their caucuses.

All of this will chronologically take place not just weeks, but months before the following took place in previous election cycles:

• An incumbent president deciding not to run for reelection (LBJ, March 31, 1968)
• The “I paid for this microphone” vs. “we were sandbagged” incident (Reagan and Bush, early March 1980)
• Even as late as 1988, the “Super Tuesday” primaries following New Hampshire were on March 9.

There are three words to describe the current reverse leapfrogging: Stark, Raving, Mad. The whole enterprise is in need of a comprehensive top-to-bottom rethink.

Smoke-filled rooms (or perhaps latte-laced lounges, to accommodate 21st century preferences) have never looked so good.
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Texas recently became the 34th state to pass a law giving consumers the ability to freeze their credit. A credit freeze prevents anyone, including you, from accessing your credit information. It is a powerful tool for preventing identity theft (however, it does NOT keep ID thieves from using existing accounts you might have unless you close them all and get new account numbers). If you want or need to buy a house or car, or otherwise have your credit file accessed by a lender or other party, you have to “unfreeze” or “thaw” your credit file, then “refreeze” it when you’re done. More info on credit freezes, and why they are needed, are at this previous BizzyBlog post.

The Wiki entry for “Credit freeze” only lists 25 states with freeze laws. Ohio is not one of them, and I don’t think the legislature slipped in a freeze law in while I wasn’t looking. The Buckeye State should have passed freeze legislation long ago. Better yet, Congress should pass a credit freeze law allowing anyone to freeze their credit (many state laws only allow those who have been victims of ID theft to put freezes on). Ohio Congressman Paul Gillmor has sponsored one such bill (HT Weapons of Mass Discussion), which, among other things, allows for free thaws and freeze restorations (most state laws allow the credit bureaus to charge up to $10 for each thaw and restoration; since there are three major bureaus, it may cost up to $60 during any kind of multiple-lender search for credit). The principal benefit of a national law would be uniform rules for all, just as the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACTA) apply uniformly nationwide. Legislation of this nature is consistent with the federal government’s constitutional role in interstate commerce.

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From the “Why are you surprised? Department — Cypress Semiconductor CEO T.J. Rodgers and several Dartmouth alums, including Volokh Conspirator and erstwhile sparring partner Todd Zywicki (his latest Dartmouth-related post is here), have used their elected positions as trustees at the school to advocate “controversial” things like halting the deterioration, objectively measured, in the school’s quality of education. Y’know, like having real professors instead of grad assistants teach classes, keeping overhead low so that as much money as possible goes to instruction, etc.

The Empire appears to be on the verge of striking back by taking all meaningful oversight away from the trustees and giving it to an unelected star chamber modeled on Harvard.

If they succeed, the obvious warning to prospective Big Green students is that $48 grand doesn’t buy what it used to.

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A big mistake — a very, very big mistake, noted in a sensible Toledo Blade editorial:

THE reported cash-for-hostages agreement reached by South Korea with the Taliban in Afghanistan is a textbook mistake, with potentially unfortunate consequences for the United States.

….. Although the South Koreans deny it, the understanding in Afghanistan is that they paid cash to the Taliban for release of the hostages, perhaps millions of dollars. That is very bad practice in hostage negotiations because it, in effect, sets a price for future hostages and makes similar kidnappings more likely.

Of course it does.

From the outskirts of Beijing:

27 Aug 2007, 1005 hrs IST,AFP

Two brothers in China who were given up for dead after a cave-in at a coal mine emerged from the pit over five days later, in what the press hailed on Monday as a ‘miracle’ survival story.

The brothers, who drank each others’ urine in the absence of food or water, crawled out of the mine on the outskirts of Beijing on Friday, more than three days after rescue efforts were called off, the China Daily reported.

As the two men dug and crawled their way up towards the surface, their families burnt “ghost money” outside the mine in a traditional Chinese ceremony so that the pair would have some cash in the afterlife.

“It is a miracle,” Zhao Jie, the doctor who treated the pair was quoted as saying.

However the brothers, Meng Xianchen and Meng Xianyou, both aged in their 40s, lost a lot of weight and suffered damage to their kidneys, the China Daily said.

The illegal mine, in Beijing’s Fangshang district, collapsed on August 20, and efforts to find them were cancelled less than two days later because rescue work was supposedly too dangerous.

Go here for the rest of the story.