Wednesday afternoon I took part in a media and blogger conference call with Jared Bernstein, the chief economist for Vice President Joe Biden. The subject for the briefing and questions which followed was the “impacts of the American Recovery and Reinvestment Plan”.
Our previous coverage of Jared Bernstein’s opening remarks:
And our previous coverage of the opening set of media questions on the call:
The final eighteen minutes of the conference call:
Jill Miller Zimon themoderatevoice.com: Thank you for taking my call. Um, I am in Ohio and I had a question regarding what remains in the package for home buyers. Um, I don’t know, I’m guessing, uh, you may be familiar with Congresswomen Kaptur’s, um, suggestion about individuals staying in their homes when they’re facing foreclosure and demanding that the mortgages be produced. Are you familiar with that?
Jared Bernstein: Uh, you know what I’m famil…, I’m, I’m not, I’m not sure and I’m sort of actually paging through some stuff [crosstalk] on the conference while we speak.
Jill Miller Zimon: It’s been making its rounds, she…[crosstalk]
Jared Bernstein: I mean the thing I’m familier with is the, uh, that was in the Senate version of the bill was a new home buyer’s tax credit. And I don’t know, uh, and I sh…, I sh…, I want to check whether that. I’ll, I’ll check and see if that, if that’s still, still made it, how that ended up in conference. Uh, [crosstalk] but oh, actually that’s gone I see. Uh, oh, oh wait, is that right? …Um. Actually, I’m not sure about that. [crosstalk] I take that back on the housing part. I have, I have to learn more about it. This, this thing was signed just a few minutes ago…
…Jill Miller Zimon: So my general question is, really kind of two parts, one is: What can you tell us that you believe has stayed in that works for the individual such as the home buyer situation? I know you’ve mentioned a little bit about tax cuts. And then the, the second is, although I guess you don’t have as much familiarity as I would have um, likes about Congresswoman Kaptur’s suggestion, basically her suggestion was advising individuals who aren’t paying their mortgage to still stay in the home until the mortgage is produced. Um, it basically, you know, using the law for, for their benefit until, uh, the, their situation is resolved. I’m just curious… [crosstalk]
Jared Bernstein: Until the mortgage is reduced you said?
Jill Miller Zimon: No, until the mortgage is produced, that the physical mortgage itself. Her point being that these mortgages get swapped around and purchased out[crosstalk]…
Jared Bernstein: I see. [cross talk] Uh huh. Yeah.
Jill Miller Zimon:…so much that they can’t even be accountable for it. You know, she is from northwestern Ohio and, um, Ohio is most likely gonna be one of the exceptions, even with the package, that we’ll end up going into double digit unemployment. So, uh, as much as we’re looking forward to whatever relief we’ll get from the package, um, it, the, this, the foreclosure rates here are, um, some of the worst in the country in addition to Florida. [crosstalk]
Jared Bernstein: So what’s your question?
Jill Miller Zimon: So my question was, uh, number one was: What was, what would still be in the package, uh, regarding home buyers? And I think you’ve answered that by saying you’re not sure.
Jared Bernstein: I’m not sure about about [crosstalk]…
Jill Miller Zimon: Right.
Jared Bernstein:…the, uh, uh, uh, the one I mentioned.
Jill Miller Zimon: And the second question, related to that would be, your opinion of the Congresswoman’s advice that individuals who are in foreclosure dem…, basically become squatters and demand that the mortgage holders produce the document. Her, her point being they swapped hand so many times that’s not gonna be able to happen.
Jared Bernstein: Yeah, no, I’m definitely not in a position to give an opinion on that, but, uh, I will, while we’re talking here, and don’t stay off.
Jill Miller Zimon:Okay. [crosstalk] I appreciate that.
Jared Bernstein: I will look for something. [crosstalk]
Jill Miller Zimon: I know it’s difficult and specific question, but for places like Ohio…[crosstalk]
Jared Bernstein: well, it’s a good question. [crosstalk]
Jill Miller Zimon: …which are big. [crosstalk]
Jared Bernstein: It’s a good question. And I have some, I’m getting information on this as we, as we go along, so let me, let me… [corsstalk]
Jill Miller Zimon: Thank you. [cross talk]
Jared Bernstein:… get back. You’re welcome…
…Casey Gane-McCalla newsone.blackplanet.com: Yeah. Thanks a lot for doing this, you know, for all us bloggers. Uh, we appreciate it. Um, Obama briefly spoke about, uh, the school system and more money going to schools, um. The urban education system has needed a bailout, you know, for twenty plus years in cities like Detroit, uh, drop out rate of eighty per cent, New York is fifty per cent, uh, Baltimore, seventy five. What measures in the stimulus package will not only, uh, prevent these schools from further failing, but actually maybe help them, because I know at least in New York state they’re talking about cutting, New York City, excuse me, they’re talking about cutting twenty three thousand jobs? And in the already struggling school systems. So what measures from the stimulus package will go to help out the urban educational system?
Jared Bernstein: Um, hm. Uh, there are a number of measures. Uh, I would say that, uh, help in that regard. Um, and again, I have to warn you that, uh, I’m doing my best to keep up with, uh, the new numbers that are coming in from the conference, but, uh, let me go through a few components of the bill that I, uh, I know, uh, would speak to the question you raised. Um, I’m just lining, um, there is, uh, there, there’s, uh, funding in this package for, uh, education and training, um, uh. And the education component of that is, uh, uh, well together it’s over a hundred billion dollars. There’s funding here for early childhood education, uh, Head Start, uh, for, um, uh, uh, school, school improvement, Title I, um, the uh, uh, significant funding for, uh, for Pell Grants, uh, there’s, uh, training dollars I think which are actually critically important for some of the populations who are under served in this regard. Um, training, there, there’s uh, uh, youth training, there’s employment service training, there’s, uh, a, uh, training for dislocated workers who lose their jobs. Um, the, uh, I think some of the key, uh, factors that will help to, um, uh, uh, promote, uh, the, uh, the, uh, that will help to, and will offset some of the pieces you’re talking about are, um, are Title I grants, school improvement grants, some of the IDEA grants, uh, some of the, uh, uh, uh, small grants for, uh, education for homeless folks. Um, I don’t know the magnitudes of those in the final deal, but I, I, I know that they were all under negotiation and, and I’m, uh, confident that some of those remain in the package.
Casey Gane-McCalla: Okay, thank you very much.
Jared Bernstein: Sure…
…John Morgan Pennsylvania Progressive: Thank you again [garbled] for, uh, involving the bloggers, uh, with policy and news and information. Uh, here in Pennsylvania, uh, I also serve as a board member for Planned Parenthood of Pennsylvania Advocates. And, one of the first things that was cut from the stimulus bill was, uh, family planning funding. Uh, we actually laid off our public affairs policy person, uh, due to declining revenue. So, this funding will act
ually save and create jobs. Uh, is there any intention of, of restoring this funding in a future bill, [garbled] omnibus preparations act?
Jared Bernstein: Uh, the, the, I’m sorry, could you b…, I didn’t hear everything you were saying, you, you wanted, just repeat your question again. Just the last part. [crosstalk]
John Morgan: Okay. All right. Um, the, uh, funding, the initial bill provided funding for family planning contraceptives.
Jared Bernstein: Um, hm.
John Morgan: It was one of the first things stripped in the…[crosstalk]
Jared Bernstein: Okay. Um, hm.
John Morgan: Uh, uh, is the administration gonna, uh, put that in an additional, uh, bill, maybe the omnibus appropriations bill?
Jared Bernstein: Yeah, I can’t [crosstalk], I, I, I’m sorry, I can’t speak, as I said earlier, to plans, to administration plans to, uh, get back to pa…, pieces of the package that were taken out specifically. Um, I can, once again, reiterate this point. Um, there were folks who made the argument that, uh, you know, that you shouldn’t fund family planning or whatever. That, that, uh, that, that’s kind of a political judgment that I’m, uh, I’m not gonna speak to. Um, I think the economics of this, of some folks objections were, “look that’s not really part of a job creating stimulus plan” and they, they, they had, they had a point. And so we, we listened and made, and made changes to certain aspects of the plan in that regard. Um, what we will absolutely come back to ideas that came out of here that we still think are good ideas. I’m not gonna, uh, uh, get ahead of, uh, a lot of other people here in terms of what, of what those ideas are. But, the fact that something didn’t get into this package by no means means that, uh, this, this shouldn’t be interpreted as, as meaning we are, uh, not going to come back to, um, uh, proposals that we think are worthy.
John Morgan: [garbled] That’s encouraging to hear. That you know [garbled] that’s worthy. [garbled] [crosstalk][garbled]
Jared Bernstein: I want to be very clear. [crosstalk] I want to be very, [crosstalk] I want to be very clear because I, I don’t want to be misquoted. I, I, I’m not specifying any particular element like the one you raised as being, uh, uh, you know, a worthy element, uh, uh, in, in terms of something we want to get back to. What I’m saying is that some the things came out of this plan because people had a decent argument that they weren’t, uh, reasonably placed in an economic recovery package. Uh, I am not in a position to a…, to say, you know, this idea was good, this idea was bad.
John Morgan: I, I understand. [crosstalk] Thank you.
Jared Bernstein: You understand. Thank you…
…Jonathan Singer mydd.com: Hi, um, there, there’s been a lot of debate in the last week, as I’m sure there has been even in the last decade, about the, um, there’s a lesson to be learned from Japan, um, there’s an article in, in the New York Times week in review, uh, that, that’s kind of ar…, you know, arguing whether construction, the things of that nature, were stimulative, if they were the right type of construction [garbled]. I was wondering what, in general, what the lessons were to be taken from, you know, the last ten, fifteen years in Japan and how not to get into this [garbled] growth for a couple decades?
Jared Bernstein: Sure. Um, the problem Japan, the problem, the mistake that Japan’s economic policy makers made is actually one, uh, that’s really very relevant today. I’m glad you raised the question. And, and that was the mistake of of forbearance. That is, that as these problems, uh, deepened in their economy, uh, problems of a recession generated, by the way, in ways that weren’t all that different from our own. They, they had a combination of bursting housing bubble and stock market bubble, big real estate bubble. But also, a stock market bubble, at around kind of the same time. And, uh, they, they made, uh, uh, first, kind of an error, which was not unlike the one we, we almost made in the great depression, uh, where, um, uh, uh, Hoover et al, uh, uh, kicked back and said, um, let’s let the market handle this. Uh, the idea was that, uh, um, there, there’s never a role for the public sector in a, in a, uh, free market economy. And so the worst thing you can do is, uh, intervene even when things are down on the mat. And that helped Japan, uh, uh, essentially go into a, uh, down turn that lasted by some measures almost a decade. Certainly, uh, uh, now one could look back at our own, uh, period of the 1930’s and, and recognize that Roosevelt, somewhat under the tutelage of the great economist Keynes himself, uh, rejected that philosophy and invested massively, uh, in, in economic activity. Uh, and, and we’re tr…, obviously we’re following that model. Um, following that model in terms of, uh, of the recovery package, we’re following that model in terms of the financial sector as well. And, and so I would argue we, we are, we are, um, acting, uh, very deliberately not to make the forbearance kinds of, uh, mistakes in judgment that Japan evidenced, uh, in their lost decade…
…John Aravosis americablog.com: …Hey guys, thanks for doing this. Um, I wanted to ask you a question about the income thresholds we’re using in the stimulus package and in, in other legislation. I’ve written about this a few times on my blog but. For example, the five hundred per person tax cut, whatever you want to call it. Um, the first time home buyer tax credit, which wasn’t you guys I know it was the House, but still, you know, making a real tax credit. In those legis…, [garbled] legislation we always set an income limit beyond which it, uh, starts to phase out and finally goes away, right. [crosstalk]
Jared Bernstein: Um, hm.
John Aravosis: If you make a hundred fifty, or whatever, thousand a year you don’t get it.
Jared Bernstein: Right.
John Aravosis: What, you may or may not have seen, there was a recent New York Daily News article, like in the last week, with a study showing that a hundred and twenty four thousand dollar a year salary in New York City is equivalent to a fifty thousand dollar a year salary in Houston because of the relative cost of living.
Jared Bernstein: Uh, huh.
John Aravosis: I know that we, this is the way we do tax policy anyway [Jared Bernstein: laughter] You know, we’ve said this is how much you make, this is how much you pay.
Jared Bernstein: Um, hm.
John Aravosis: But at some point is there something we can do? Or how do you guys even respond to that concern about basically if you cut people off at a hundred or a hundred fifty or whatever it is, if you live in New York or D.C. or perhaps San Francisco, you’re not rich.
Jared Bernstein: [crosstalk] Yeah, t’s a great, it’s a great, it’s a great point.
John Aravosis: [crosstalk] [garbled] …it’s your five per cent line that Obama always uses, he’s correct, but are you really in the upper five per cent if you live in an expensive city?
Jared Bernstein: Yeah, no, I think that, uh, I mean, not only are you not really in the top five per cent, you’re not literally in the top five per cent. In other words, if you took the, the top five per cent in New York City obviously you’re looking at a much different cut off if you took the top five per cent in, uh, a different part of the country.
John Aravosis: Well that’s true, too. [crosstalk]
Jared Bernstein: So, um, I, I, I think your point is, it’s interesting, it’s a point that I myself have, um, uh, spent a good deal of time on when I used to do research out there in the, uh, in the think tank world. Before I came here I worked at the Economic Policy Institute for years and one of the things we developed there were, um, family budgets for uh, families of different sizes and different number of kids and different kinds of profiles throughout ov… close to five hundred metropolitan areas. And we observed grea
t variation in prices. Um, one of the problems here, uh, uh, what’s your na..? What’s your name again?
John Aravosis: It’s John.
Jared Bernstein: John. One of the problems here John, and it’s not widely known, is that the Bureau of Labor Statistics, which does fantastic work, I, I’m a huge devotee of their, of their work, I’m not criticizing them, they would do whatever we asked them to. But the Bureau of Labor Statistics does not publish, uh, intra area price deflators, that is, it does not publish any price index that will allow you to tell, tell you what a dollar in, in New York is worth in Houston.
John Aravosis: But we do it for what, could we apply the system we use for the FAA, for example where if you work in Alaska and Hawaii you actually get twenty four to twenty five per cent increase in your salary?
Jared Bernstein: Yeah. Well there are systems out there [crosstalk] and, and but there’s no rigor…, there’s no, uh, [garbled] price index that would allow you to do that. Now, there is some work by this woman, who’s name is Bettina Aten, that’s a-t-e-n, who works for the government in various statistical agencies. You can find her stuff on the web. Who actually has been, um, um, generating precisely this kind of information. And at some point I could see, uh, where that might be, uh, um, useful to apply to government, uh, uh, programs. Whether it’s poverty lines, right? [cross talk] I mean, isn’t that the same thing? You know po…[crosstalk]
John Aravosis: It’s exactly the same thing, yeah.
Jared Bernstein: Poverty measurement, uh, is the same, uh, you know, the poverty threshold is the same in, in, in the deep South as it is in, in northern urban areas. And so, uh, there are lots of placs where you could apply that kind of a technology if you had it. Now, you know, again, I want to be very clear, [crosstalk] I’m not a think tanker anymore. I’m not saying [crosstalk] the U.S. government is about to do any of this. But I’m saying you raise a good point. Okay?
John Aravosis: Thank you. That’s fine…
Jared Bernstein: Well thank you very much everyone, it’s been great talking to you…