Jonathan Kantrowitz

The Working Families Party has endorsed Denise Merrill for Secretary of the State.

“Denise Merrill is someone who wants to empower voters and improve participation in our democracy,” said Urania Petit, who was elected as Working Families Party Registrar of Voters in Hartford and is a member of the Working Families State Committee. “She has always shown concern for ordinary working class and middle class voters and that’s what we need in the Secretary of State’s office.”

“As Secretary of the State, one of my jobs will be to ensure that our state has a healthy, vibrant democracy.” said Denise Merrill. “Working Families is an important part of that democracy because they provide a choice and a voice to people who are frustrated with politics as usual,” she said. “I’m proud to have this endorsement.”

Merrill faces Gerry Garcia (my choice) in an August 10th Democratic Primary.

Joe Dinkin, Communications Director, CT Working Families, told me in an e-mail:

On the Secretary of the State race, we met with both candidates, and both made a pretty favorable impression. We liked both candidates. In the end, I think the distinction came down to the fact that Denise really has an extensive track record as an effective advocate and champion for the issues and values that we care about.

If Merrill wins the primary she will be listed on the ballot as both the Democratic party candidate, and the Working Families candidate. Votes cast on the Working Families ballot line are combined with Democratic votes for the cross-endorsed candidates.

The Working Families Party more often endorses Democrats but has endorsed moderate Republicans and independent candidates as well.

Working Families Party is a fast growing minor political party that fights for a fair economy and stands up for working and middle class families. Founded by a coalition of labor unions and neighborhood activists, the Working Families Party was formed to inject issues like healthcare, quality education, and livable wages into the public debate, and to hold politicians accountable on those issues.

James Bullard, the president of the Federal Reserve Bank of St. Louis,
and a voting member of the Fed’s policy-setting
Federal Open Market Committee (FOMC) worries about deflation
in a research paper published today:

In this paper I discuss the possibility that the U.S. economy may
become enmeshed in a Japanese-style, deflationary outcome within
the next several years. To frame the discussion, I rely on an analysis
that emphasizes two possible long-run outcomes (steady states) for
the economy, one which is consistent with monetary policy as it has
typically been implemented in the U.S. in recent years, and one which
is consistent with the low nominal interest rate, deflationary regime
observed in Japan during the same period. The data I consider seem
to be quite consistent with the two steady state possibilities. I describe
and critique seven stories that are told in monetary policy circles re-
garding this analysis. I emphasize two main conclusions: (1) The
FOMC’s extended period language may be increasing the probabil-
ity of a Japanese-style outcome for the U.S., and (2) on balance, the
U.S. quantitative easing program offers the best tool to avoid such an
outcome.

Just 3 weeks ago, Bullard saw no reason to worry.

Elimination of First Mandatory Minimum Since Nixon Administration

Yesterday the U.S. House of Representatives passed landmark legislation to dramatically reduce the sentencing disparity between federal crack and powder cocaine sentences and to repeal the five-year mandatory minimum for simple possession of crack cocaine. The bill, S. 1789, already won unanimous approval from the Senate in March and now goes to the White House for President Obama’s certain signature. Its passage marks the first time that Congress has repealed a mandatory minimum drug sentence since the Nixon administration.

While S. 1789 will not eliminate the mandatory minimum for trafficking crack cocaine, it will substantially reduce racial disparity in cocaine sentencing. The infamous 100-to-1 sentencing ratio will be reduced to 18 to 1. Moving forward, 28 grams of crack cocaine will trigger a five-year prison sentence and 280 grams of crack will trigger a 10-year sentence. Once enacted, the law could affect an estimated 3,000 cases annually, reducing sentences by an average of about two years and saving an estimated $42 million over five years. The bill does not provide any relief for people in prison serving crack cocaine sentences because it does not provide for retroactivity. The bill also provides for enhanced sentences for drug offenses involving vulnerable victims, violence and other aggravating factors.

For more detailed information about the history of the federal crack disparity and the changes that will result for S. 1789, go to the Families Against Mandatory Minimums web site.

Families Against Mandatory Minimums is a national nonprofit, nonpartisan organization supporting fair and proportionate sentencing laws that allow judicial discretion while maintaining public safety.

Economists

Yesterday economists Mark Zandi and Alan Blinder released the first comprehensive study that estimates the total effect of fiscal and financial policies of the last few years. They write:

In this paper, we use the Moody’s Analytics model of the U.S. economy—adjusted to accommodate some recent financial-market policies—to simulate the macroeconomic effects of the government’s total policy response. We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0. For example, we estimate that, without the government’s response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8½ million jobs, and the nation would now be experiencing deflation.

When we divide these effects into two components—one attributable to the fiscal stimulus and the other attributable to financial-market policies such as the TARP, the bank stress tests and the Fed’s quantitative easing—we estimate that the latter was substantially more powerful than the former. Nonetheless, the effects of the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 3.4%, holding the unemployment rate about 1½ percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls. These estimates of the fiscal impact are broadly consistent with those made by the CBO and the Obama administration. To our knowledge, however, our comprehensive estimates of the effects of the financial-market policies are the first of their kind..

In a summary of the analysis, The New York Times wrote that the “sweeping interventions to prop up the economy since 2008 helped avert a second Depression.”

According to the report, without the government response:

· There would be about 8.5 million fewer jobs, on top of the more than 8 million already lost.
· The nation’s gross domestic product would be about 6.5 percent lower this year.
· The economy would be experiencing deflation.

All of which is well and good, but it ignores one lingering effect of the worst recession ever: unemployment. The fiscal stimulus was not enough to avert this crisis, nor will it be enough to bring full employment back for many, many years.

Paul Krugman illustrates just how bad the employment situation is and will be: