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Jared Bernstein

Jared Bernstein

Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, Executive Director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute, and between 1995 and 1996, he held the post of Deputy Chief Economist at the U.S. Department of Labor.

Articles by Jared Bernstein

Wages, productivity, progressive policies, and serial correlation: I weigh in on an important, interesting debate.

4 days ago

There’s an interesting sort of argument going on between Stansbury/Summers (SS) and Mishel/Bivens (MB). My name has been invoked as well, so I’ll weigh in. It’s a “sort-of” argument because there’s less disagreement than first appears.
It all revolves around this chart, which plots to the real compensation of mid-wage workers against the growth in productivity. For years they grew together, then they grow apart. The levels of both variables almost double, 1948-73, but since then, productivity has outpaced the real comp of blue-collar, non-managerial workers (mid-wage workers) by a factor of 6.

That wedge between productivity and middle-class wage growth has become one of the more important developments in political economy, representing the rise of inequality and the disconnect of

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No, progressive policies don’t hurt growth

10 days ago

Neat new study out of CA, where they’ve created a virtual conservative, anti-interventionist’s nightmare of progressive policies. According to theory, the state should be tanking re growth and jobs, and yet…well, see for yourself.
Ben S and I did some of this sort of analysis awhile back re the ACA and jobs in the states.
We’ve got the facts; they’ve got the power. This must change, OTE’ers!!

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The case for direct job creation

15 days ago

Over at WaPo, and notice the support for the idea from all kinds of different bedfellows, from progressives like myself, Darity et al, to centrists like former Clinton Treas sec’y Rubin, to Trump’s chief economist!

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The unknowable motives of mass murderers

17 days ago

As you see from the title, I’m once again veering out of my econolane, but only briefly, and only to see if others share this sentiment.
My morning paper blares the banner headline “Texas Shooter Was In Domestic Dispute.” I understand that after these horrific events people want to understand what could motivate the killer. But here’s the thing: these motivations never come anywhere close to explaining the outcome.
And what possible could? What reported motivation would ever make you say, “Oh, I get it?” That’s partly because what the killer did was unimaginable to most people, and because there are always lots of people going through the same thing the killer was going through who didn’t do what he did.
We’re particularly interested in terrorist motivations, but here again, the above

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The big, bad tax cut plan: Stuff you might have missed

17 days ago

[Two great, new updates.]
There is and will continue to be much digital ink spilled in analysis of the House Republican tax plan, and while OTE readers are, by definition, invariably well-informed, here are some links to worthy pieces you might have missed.
–Catherine Rampell at WaPo and Ben Casselman/Jim Tankersley at the NYT both dig in the weeds this AM. Rampell highlights the fact that the new pass-through loophole introduced by the bill is particular generous to what she calls the “lazy/idle” rich, as it lavishes its goodies especially on passive investors (those who do less actual work for the S corp, partnership, etc.). The Times piece reveals that the R talking point on how no middle-class families taxes will go up under the plan to be false. In fact, millions of such households

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October jobs report: Nice bounce back on payrolls, but labor force down and wage growth stalled.

21 days ago

Payrolls bounced back strongly from last month, up 261,000, while the unemployment rate ticked down to 4.1%, its lowest rate since 2000. However, the jobless rate fell for the “wrong” reason: a sharp decline in labor force participation. Other labor market indicators suggest a mixed report, with a tightening job market, a solid trend in payroll gains, but stagnant wage growth. Though convention wisdom is that the US labor market is at full employment, I’d say that’s wrong (see last figure). We’re getting there, for sure, but based on wage and inflation trends, we’re not there yet.
Revisions to the prior two months added 90,000 to the payroll count; September’s hurricane-induced loss of 33,000 was revised up to an 18,000 gain. Still, October’s spike is partially a rebound from the low

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This GDP report is whispering some really important messages to us

28 days ago

A bunch of notable points from this morning’s advanced GDP report for 2017Q3. The economy’s growing a good clip (though not at the 3% headline number), with no price pressures in sight. Consumer spending is solid, boosted by job and earnings growth as well as, I suspect, a wealth effect from the stock market (stock market gains are not in GDP, but if people feel wealthier, they spend a little bit more). The hurricanes didn’t faze the data flow (note: Puerto Rico is not counted in national GDP), and a few noisy factors, especially an inventory bump, helped boost the number (I smooth out the noise below).
Yes, the White House is going to brag on this report, as pretty much any White House would. But what they should see here is yet another great reason to not screw around with the Fed chair.

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More lynx

29 days ago

First, here’s Hannah Katch and me over at WaPo, warning about the Trump admin’s attack on family planning/birth control/women’s rights, and the linkages between such rights and women’s economic mobility.  Leaked docs suggest Trump wants to defund effective programs in this space and go back to “fertility awareness” (“having women track their ovulation to identify and practice abstinence on their most fertile days”). Trump argued that this apparently worked for Wilma Flintstone, so why not now? OK, I made that up, but you must admit it sounds plausible.
Next, there’s this tweet storm, featuring highlights from a new paper by economist Josh Bivens showing the many dimensions on which the corporate-tax-cut-will-give-wages-a-huge-boost argument fails. If you want a quick read backing up my

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When econ models potentially mislead, econ profs should say so

October 23, 2017

Last week saw an interesting and revealing dustup in the tax debate. President Trump’s economic council, headed by Kevin Hassett, released a piece claiming that the proposed corporate tax cut would immediately boost average household income by at least $4,000, a claim that was widely pilloried in the economics community. One of the authors of a paper CEA cited to defend their results claimed that the CEA misinterpreted their paper.
A particularly salient objection was the CEA’s claim that the incidence of the corporate tax cut fell not just wholly on workers, but that their aggregate wage gains from the cut would be multiples of the revenue lost. Their paychecks would grow more—a lot more, as much as 500% more!—than the revenues lost to the cut.
That sounds wrong, but as Greg Mankiw points

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A must listen-to podcast from steel country

October 20, 2017

I’ve previously endorsed the New York Times podcast “The Daily,” to which I’m happily addicted. I found Wednesday’s episode particularly well done and important. It tells the story of Shannon Mulcahy, a steel worker from an Indiana plant (Rexnord) that recently moved much of its production to Mexico. If you’ve followed the issue of manufacturing job losses, which has of course been going on for decades, nothing in the podcast or article will surprise you. But, along with putting a human face in the story, it underscores many key points in the political economy. (Plus, you can listen to it while you’re exercising!)
First, many economists label anyone who isn’t college educated as “unskilled.” Decades ago, when I was a baby number cruncher, economist Larry Mishel taught me not to do this. I

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A verse for Trump as he meets w/ Yellen on Thursday

October 19, 2017

Trump’s meeting with Fed Chair Janet Yellen tomorrow. Here’s some free advice, in verse!
When it comes to Cohn, Leave him alone.
I worry that Powell Might throw in the towel.
Sorry to be harsh But do not go with Marsh.
We’ve all seen the trailer Don’t be ruled by Taylor.
By now you’re probably smellen’ The idea that I’m sellen’ Steady as she goes, Trump: Stick with Yellen.
For a bit more substance, here’s a piece from a few weeks ago about why reappointing Chair Yellen is the right move, not just for the economy, but for Trump himself. That said, I recognize that rational choice ain’t exactly ruling the day.

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October 17, 2017

Over at WaPo, thoughts on strengthening a weak link in our tax system: that between asset appreciation and tax revs.
Also, re NAFTA, mend end but don’t end it. And less fear mongering over tariffs. I don’t want to see them either, but the extent to which the reporting has largely featured advocates of the status quo got under my skin a bit.
Muscular Larry Summers takedown of those implausible results out of Trump’s CEA yesterday.

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I got issues with the new CEA report

October 16, 2017

First, full disclosure: Kevin Hassett, the chair of Trump’s CEA, is an old friend, a good dude, and a guy I’m happy to see in this prominent post. But even as I endorsed him for the job, I publically worried about one area of his research where his claims go way beyond the evidence and ignore the counter-evidence. That area is the impact of tax cuts on growth, jobs, and particularly wages and incomes.
Thus, CEA’s new report on the wage-boosting effects of the proposed cut in the corporate rate from 35 to 20 percent looks fatally flawed to me. It is a literature review that picks only the ripest of cherries, ignoring the large body of literature that goes hard in the other direction.
A particularly notable example of this problem is a citation of one study by tax analyst Jane Gravelle (et

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Trump’s two-step: Health care and fiscal sabotage

October 13, 2017

[unable to retrieve full-text content]I wanted to bang out a quick note tying a few points together regarding health care and tax policy. When President Trump said yesterday that his new health care executive order directing agencies to allow people to buy health coverage that doesn’t have to meet ACA standards “will be costless to the government,” he was… Read more

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Tax versus fax

October 13, 2017

[unable to retrieve full-text content]Of course, we must inject factual analysis into a tax debate that is dominated by fantasies about how tax cuts pay for themselves as their benefits trickle down from zillionaires to the middle class. But the salesforce behind these cuts have not been moved one iota by these facts, and I thus conclude it will… Read more

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Data note re WaPo wage story

October 9, 2017

Here are my thoughts on why wages aren’t growing more quickly, in WaPo.
The model I used is sort of like that of the Fed’s in the Yellen speech cited in the piece. Using quarterly data for the hourly wage of production, non-supervisory workers from 1989q1-2017q2, it regresses year-over-year nominal growth on “slack” (the unemployment rate – CBOs NAIRU), lagged inflation expectations (as in the Fed model), smoothed productivity growth (HP filter; two lags), and 2 lags of the DV.

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Two must read opeds on the Trump tax plan

October 9, 2017

There are a few must-read opeds out there today on the administration’s tax plan.
I found this first one to be extremely resonant as it’s just a bucketful of common sense from an entrepreneur who lives in the real world, as opposed to the world of the DC tax cut debate, where, as former Treasury Secretary Larry Summers strongly argues, falsehoods flourish.
Marcus Ryu, co-founder of a successful software company (Guidewire Software), writes:
As an entrepreneur myself and a friend to many others, I know that lower tax rates will not motivate more people to start companies. People start companies for many reasons: a compelling idea, ambition for fame and fortune, a desire to be one’s own boss, frustration with one’s employer. I have never heard someone say, “I would have started a company,

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Thanks to Harvey and Irma, payrolls fell last month, but underlying job market remains strong

October 6, 2017

Payrolls contracted by 33,000 last month due to the impacts of hurricanes Harvey and Irma. The unemployment rate, which BLS tells us was not affected by the storms, fell to 4.2 percent, its lowest rate in over 16 years, and it fell for “good reasons” last month, i.e., not because discouraged workers left the labor force. In fact, the closely watched labor force participation rate rose to 63.1 percent, its highest level since March of 2014.
Thus, to evaluate the strength of the current US job market, look at the unemployment rate, not the negative payroll number. The former is on trend; the latter is a weather-induced outlier. Another important and strong indicator from September, also one that was unlikely to be influenced by the storms, was the healthy bump to employment rates of

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Increasing wealth inequality, the ill-begotten tax plan, and some potentially good news!

October 5, 2017

Over at WaPo, including this section on the need to, as no less than Warren Buffett puts it, stop coddling the super-rich!
“Stop coddling the super-rich!” That was the name of a Warren Buffett op-ed from a few years ago, and while I know this is a heavier lift for Rs — “coddling the rich” is analogous to assuaging the donors — it makes no sense to waste revenue loss on the one group that’s consistently been crushing it for decades. New data from the Federal Reserve reveals that over the past few decades, the share of wealth going to the bottom 90 percent is down about 10 percentage points while that going to the top 1 percent is up by almost that same amount.
Given that reality, why kill the estate tax? It hits only the richest top 0.2 percent of estates and squanders $240 billion over 10

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Once again, rather than write a decent plan, the administration attacks the scorekeepers. And this time their attack is particularly hypocritical.

October 5, 2017

There’s an argument increasingly being made by supporters of the Trump tax plan regarding the preliminary score of the plan by the nonpartisan Tax Policy Center. Critics of the TPC analysis maintain that the analysts should have waited until the full details of the plan had been made public before trying to determine its distributional and deficit impacts.
Kevin Brady called the TPC analysis “a work of fiction that Stephen King would’ve been proud of.” Paul Ryan chimed in that TPC, a group of analysts with bipartisan backgrounds and impeccable analytic credentials,  is a “propaganda group” that’s “anti-tax reform.” Trump economic adviser Kevin Hassett accused TPC of “behav[ing] irresponsibly” and said the report used “imagined numbers.” He claimed not to “understand the purpose of the

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Trump’s single, best economic move: reappoint Yellen.

October 3, 2017

Over at WaPo.
I left one extra-wonky point out of the piece, which deserves mention here. There’s an interesting way in which a more hawkish Fed chair–and most of the top candidates other than Yellen fit that bill–would be a double whammy for Trump.
First, raising rates would slow growth, which president’s never like. Second, higher rates strengthen the dollar, making our exports less price competitive, which this particular president really wouldn’t like.
Yes, Trump is never rational, so no, I don’t believe these sensible (at least, to me) arguments will win the day. But she remains a front-runner, and the huge difference between having someone with her sensibility chairing the Fed versus a much more hawkish chair cannot be overestimated. Thus, this is an important, worthy fight.


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Real GDP’s still growing at ~2% on trend

September 30, 2017

Here are the facts behind my tweet from earlier, on a point to which Dean Baker and I both objected. In an NYT oped from this AM, columnist Bret Stephens stated, “…the economy is finally growing above the 3 percent mark.”
Nope (though, otherwise, I thought Stephens made a good point about contemporary R’s prowess in ginning up anger and winning elections, only to reveal deep incompetence and non-representativeness re governance). 
Stephens was misled by the 3.1% real GDP growth rate in the last quarter (2017q2). But that’s an annualized, quarterly growth rate. Such measures are noisy and volatile. In q1 by that metric, GDP went up only 1.2%, but if conservative pundits raised an eyebrow over that number, I missed it.
For a clearer signal of the underlying trend, it’s better to use the

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Tax roundup: Lies, lies, and more lies

September 29, 2017

First, here’s a rough typology of the lies upon which the sales job for the Republicans’ wasteful, regressive tax cut is based.
The tax cut won’t help the rich. 1a. It won’t help Trump.
The tax cut will generate enough growth to pay for itself. 2a. Sec’y Mnuchin’s now going beyond this, claiming that it will raise more revenue than it loses. (Here’s what I think’s going on there.)
Most of the benefits of the tax cut will go to the middle class.
Lies, lies, lies. And while it’s early days, and much could change, My impression is that a lot of people outside of DC Republicans aren’t buying them. The media and the Twitterverse is especially lit up with lies #1 and #2. In fact, here’s the NYT doing some calculations on lie 1b (“Trump could save more than $1 billion under his new tax plan”;

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Links: Be ready, Ds. What happened to OT? Do R’s care about deficits?

September 26, 2017

–First, from yesterday’s WaPo, when the pendulum swings back, assuming the nation’s still standing, D’s need to “be ready to launch thoughtful, vetted, well-understood and well-articulated plans in key policy areas.” I offer nudges in the areas of taxes, health care, poverty/inequality, and jobs.
–The salary threshold for overtime pay should have been raised long ago, but team Trump isn’t going there. They’ve said they’ll consider raising the salary threshold but to a lower level than Obama proposed. The DoL asked for comments on the threshold, and here’s a link to mine.  See also EPI’s Heidi Shierholz’s comment; she fought really hard for this as DoL’s chief economist back in the day and she takes a really trenchant dive into the issue.
–Do Republicans really give even half-a-crap about

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This unique, terrible, phony, fraught-with-lies moment in American politics

September 21, 2017

This will be brief, because a note about how the political debate is misleading isn’t exactly breaking news or even, admittedly, that interesting. So, I’d consider it a personal favor if you’ll allow me to vent for a moment.
It’s just that the extent to which we’re being lied to right now seems, to me at least, uniquely over the top. The transparency of the BS is just so obvious, especially on Cassidy-Graham, the just-as-bad-as-all-the-others repeal and replace bill that may get a vote in the Senate next week.
Same with the tax “plan.” Even though there is no real plan yet, what we’ve seen so far is mostly tax cuts for wealthy businesses and corporations, the cost of which will get loaded onto the deficit. Yet its proponents are selling it as a pro-growth package that lifts the working

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A few links: Cassidy-Graham just-as-bad-as-the-rest health care bill, and more re last week’s Census data

September 19, 2017

My CBPP colleagues have been churning out scads of analysis of the Cassidy-Graham last-ditch attempt to repeal and replace the ACA. Here’s CBPP’s main bullet points with color commentary from yours truly.
Second, while I justly touted last week’s good news from the Census of median incomes, poverty, and health coverage, it’s very important to put the last few years within their historical context. I do so here.

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A typology of responses to Bernie’s single payer proposal

September 15, 2017

It’s Friday, I’m on the Amtrak with coffee and bagel at hand, so let’s get metaphysical!
I’ve received many responses to my piece praising Sen. Sanders newly unveiled Medicare for All plan, and read many different takes. Here’s a rough grouping of where they fall:
Go, Bernie, Go!
This group shares my enthusiasm of the aspiration goal of the plan, is less worried about the extent to which, at this early juncture, the numbers add up, and is especially impressed to see the evolution of the political support among Democrats.
Politically, some of these supporters are motivated by the belief, one that appears to be shared by some politicians with national aspirations, that Democrats need a strong, simple progressive message like this. It is a signal, one that’s heretofore been missing from the

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Today’s Census data on poverty, income, and heath insurance.

September 12, 2017

A solid report, showing gains across the spectrum. But inequality’s up too, and median earnings, not so much…
My data dive in the WaPo underscores the clearly favorable results in the report, but here are a few other factoids to consider:
–While this isn’t the best data for inequality analysis, for reasons I note in the WaPo, my piece points out the relative difference between gains at the 10th and 95th percentile. That observation is correct, but the 10th %’ile is a bit of a negative outlier. Better to look at a more stable statistic, the average real income gain for the bottom fifth, up 2.6% last year, compared to a 5.6% gain among the richest 5% of households. The bottom half gained last year, but not as much as the top.
–It’s also true that incomes shares going to the middle and low

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The 411 on that meeting with Donnie, Chuck, and Nancy

September 11, 2017

Based on various reports, Nancy Pelosi said that the surprise debt ceiling deal she and Senate minority leader Schumer cut with President Trump was partly a function of Schumer being able to “speak New York” to Trump.
Here’s how it came down:
Scene: White House, Oval Office
Dramatis personae: Trump, Mnuchin, Pelosi, Schumer, a couple of Republicans
Mnuchin: (droning on…): And so, based on market expectations, and the recent rise in the risk premiums of bonds with short-term maturities, we estimate the prudent path forward…
Trump: Stifle for a New York minute, will ya, Stevie. Lemme ax you one, simple question. What the %&(* you talkin’ about?!!?
Schumer: Word to that. Donnie, fuggetaboutit, right? I mean, these mooks got nothin.’ Whaddya say we cut a deal–boom!–right here, right now?

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Harvey, Irma and the TBTF implicit subsidy problem

September 8, 2017

On my way in this AM, I heard an interesting interview by the great Bloomberg Surveillance team of Tom Keene and David Gura (and I’m not just saying that because they occasionally invite me on; those guys get good guests and give them the time to answer good questions). They were talking to an insightful guy from the re-insurance industry about the costs to the industry of Harvey and Irma. To be clear, what follows abstracts from the human costs of these disasters, which I take extremely seriously. In fact, both the implicit subsidy point I stress below and the more elaborate argument I make here are intended to link the economics to the too-often tragic human outcomes.
Their discussion emphasized the large share of residential and commercial real estate vulnerable to flooding but without

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