North Dakota's Economic “Miracle”—It's Not Oil

Published on Thursday, September 1, 2011 by YES! Magazine

North Dakota's Economic “Miracle”—It's Not Oil

North Dakota has had the nation's lowest unemployment ever since the economy tanked. What's its secret?

by Ellen Brown

In an article in The New York Times on August 19th titled “The North Dakota Miracle,” Catherine Rampell writes:If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank. (Photo by Reto Fetz)

Forget the Texas Miracle. Let’s instead take a look at North Dakota, which has the lowest unemployment rate and the fastest job growth rate in the country.

According to new data released by the Bureau of Labor Statistics today, North Dakota had an unemployment rate of just 3.3 percent in July—that’s just over a third of the national rate (9.1 percent), and about a quarter of the rate of the state with the highest joblessness (Nevada, at 12.9 percent).

North Dakota has had the lowest unemployment in the country (or was tied for the lowest unemployment rate in the country) every single month since July 2008.

Its healthy job market is also reflected in its payroll growth numbers. . . . [Y]ear over year, its payrolls grew by 5.2 percent. Texas came in second, with an increase of 2.6 percent.

Why is North Dakota doing so well? For one of the same reasons that Texas has been doing well: oil.

North Dakota is the only state to be in continuous budget surplus since the banking crisis of 2008.

Oil is certainly a factor, but it is not what has put North Dakota over the top. Alaska has roughly thesame population as North Dakota and produces nearly twice as much oil, yet unemployment in Alaska is running at 7.7 percent. Montana, South Dakota, and Wyoming have all benefited from a boom in energy prices, with Montana and Wyoming extracting much more gas than North Dakota has. The Bakken oil field stretches across Montana as well as North Dakota, with the greatest Bakken oil production coming from Elm Coulee Oil Field in Montana. Yet Montana’s unemployment rate, like Alaska’s, is 7.7 percent. 

A number of other mineral-rich states were initially not affected by the economic downturn, but they lost revenues with the later decline in oil prices. North Dakota is the only state to be in continuous budget surplus since the banking crisis of 2008. Its balance sheet is so strong that it recently reduced individual income taxes and property taxes by a combined $400 million, and is debating further cuts. It also has the lowest foreclosure rate and lowest credit card default rate in the country, and it has had NO bank failures in at least the last decade. 

If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank.

Access to credit is the enabling factor that has fostered both a boom in oil and record profits from agriculture in North Dakota. The Bank of North Dakota (BND) does not compete with local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state. In 2010, according to the BND’s annual report:

The Bank provided Secured and Unsecured Federal Fund Lines to 95 financial institutions with combined lines of over $318 million for 2010. Federal Fund sales averaged over $13 million per day, peaking at $36 million in June. 

Over a 15-year period the BND has contributed more to the state budget than oil taxes have.

The BND also has a loan program called Flex PACE, which allows a local community to provide assistance to borrowers in areas of jobs retention, technology creation, retail, small business, and essential community services. In 2010, according to the BND annual report:

The need for Flex PACE funding was substantial, growing by 62 percent to help finance essential community services as energy development spiked in western North Dakota. Commercial bank participation loans grew to 64 percent of the entire $1.022 billion portfolio.

The BND’s revenues have also been a major boost to the state budget. It has contributed over $300 million in revenues over the last decade to state coffers, a substantial sum for a state with a population less than one-tenth the size of Los Angeles County. According to a study by the Center for State Innovation, from 2007 to 2009 the BND added nearly as much money to the state’s general fund as oil and gas tax revenues did (oil and gas revenues added $71 million while the Bank of North Dakota returned $60 million). Over a 15-year period, according to other data, the BND has contributed more to the state budget than oil taxes have.

The state-owned bank allows North Dakota to capitalize on its resources to full advantage.

North Dakota’s money and banking reserves are being kept within the state and invested there. The BND’s loan portfolio shows a steady uninterrupted increase in North Dakota lending programs since 2006.

According to the annual BND report:

Financially, 2010 was our strongest year ever. Profits increased by nearly $4 million to $61.9 million during our seventh consecutive year of record profits. Earnings were fueled by a strong and growing deposit base, brought about by a surging energy and agricultural economy. We ended the year with the highest capital level in our history at just over $325 million. The Bank returned a healthy 19 percent ROE, which represents the state’s return on its investment.

A 19 percent return on equity! How many states are getting that sort of return on their Wall Street investments?

Timothy Canova is Professor of International Economic Law at Chapman University School of Law in Orange, California. In a June 2011 paper called “The Public Option: The Case for Parallel Public Banking Institutions,” he compares North Dakota’s financial situation to California’s. He writes of North Dakota and its state-owned bank:

The state deposits its tax revenues in the Bank, which in turn ensures that a high portion of state funds are invested in the state economy. In addition, the Bank is able to remit a portion of its earnings back to the state treasury . . . . Thanks in part to these institutional arrangements, North Dakota is the only state that has been in continuous budget surplus since before the financial crisis and it has the lowest unemployment rate in the country.

He then compares the dire situation in California:

In contrast, California is the largest state economy in the nation, yet without a state-owned bank, is unable to steer hundreds of billions of dollars in state revenues into productive investment within the state. Instead, California deposits its many billions in tax revenues in large private banks which often lend the funds out-of-state, invest them in speculative trading strategies (including derivative bets against the state’s own bonds), and do not remit any of their earnings back to the state treasury. Meanwhile, California suffers from constrained private credit conditions, high unemployment levels well above the national average, and the stagnation of state and local tax receipts. The state’s only response has been to stumble from one budget crisis to another for the past three years, with each round of spending cuts further weakening its economy, tax base, and credit rating. 

Not all states have oil, of course (and it’s hardly a sustainable basis for an economy), but all could learn from the state-owned bank that allows North Dakota to capitalize on its resources to full advantage. States that deposit their revenues and invest their capital in large Wall Street banks are giving this economic opportunity away.

This work is licensed under a Creative Commons License

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. She is president of the Public Banking Institute,http://PublicBankingInstitute.org, and has websites at http://WebofDebt.com and http://EllenBrown.com. 

Define Rich, Part III. What the tax tables of yore say.

http://www.angrybearblog.com/2011/09/define-rich-part-iii-what-tax-tables-of.html

Posted by Divorced one like Bush | 9/01/2011 02:03:00 PM

12 comments

By Daniel Becker

Randolph Duke: Money isn't everything, Mortimer.

Mortimer Duke: Oh, grow up.

Randolph Duke: Mother always said you were greedy.

Mortimer Duke: She meant it as a compliment.

Trading Places 1983

A while ago (an understatement) I posted on the question of what is rich. The first dealt with what issues to consider in defining rich. The second was looking at the issue of getting rich if that is even what one wants to do. The “rat race”. I don't believe most people really want to be rich. I believe most people when thinking about being rich are thinking about what it would take to remove the fears of events that would make one's life either very difficult in a world that requires money to remove risk or drastically different from what one's life was. I'm thinking things like losing a job, debilitating injury or illness possibly resulting in physical disability or Louis Winthorpe III.

This all ties into “The American Dream”. The “Dream” is not just an ideology of governance and social philosophy. It is also a life style and thus requires a specific level of income. I have posted on this issue also and noted just how high in income we have driven this “Dream” such that two people with bachelor’s degrees just starting life together may not be able to have it.

Now that we have entered a period where taxes are on everyone's minds such that there is serious consensus to raising taxes, maybe we need to see what we had in the past to know what we need now. I am sure most readers are aware of Mike's work defining what rates appear to effect economic growth the best. If I recall correctly the number for the top 1% was around 65%. I have also suggested that there is a range as to how large a share of the income the top 1% should have. That number for the top 1% is not to be above 15% and not to much below 10%.

I should also mention my postings on taxation’s purpose. Specifically I looked at taxing from the perspective of the legal profession as oppose to the economic profession. The conclusion was that there was one main reason for taxing. It is to fulfill the directive of our constitution: equality of power. It is to assure the concept of one voice one vote. If there was ever a time in our history to raise taxes in order to assure this directive it is now in the age of the Citizens United ruling. President FDR referred to the issue and those with the one voice multiple votes do to their monied power as “economic royalty”. I like that phrase and I wonder why it is not used as are retort to those who use “class warfare” as a guilt trip.

Let's get started.

I have constructed 4 sets of data using the tax rates of 1936/37, 1945/46, 1965/67 and 2010. I chose 1936 because it is a tax rate increase after the economy had turned north based on Mikes posting. I chose 1945/46 because it is another adjustment that happens right after after WWII. I chose 1965/67 because it is the decrease often spoken of fondly. Of course 2010 is because that is where we are at.

This posting would be hugely long if I post on all 4 periods at once, so I have broken it up. Let me first and I think most importantly note that we people today have no idea just how much we were willing to tax ourselves to have the society that we now refer to as “the good old days”. Not only did we have the tax tables of 1936, that table eventually had a 10% surcharge added to pay for the war. Yes, another reason to consider the generation that fought the 1^st and 2^nd world wars the greatest generation. There was a 7% surcharge for the Vietnam war, though that number became less as time passed. Still, we knew that if we wanted to do exceptional things, we had to tax ourselves exceptionally. Also, the early taxation made no distinction for single or married, never mind filing joint or separate. Everyone paid the same rate. Most interestingly, with the current table, the people who comparatively get screwed are those who are married and file separately. All the rates kick in at a lower income than even those who are single. The other thing we don't seem to understand is that all the tax rhetoric we have been hearing since Reagan we've heard before virtually to the word.

Andrew Mellon, Treasury Secretary 1921 to 1932 :

Generally speaking, Mellon argued that tax burdens were too high. Steep rates, he insisted, served only to stifle incentive and foster tax evasion. “Any man of energy and initiative in this country can get what he wants out of life,” he wrote. “But when initiative is crippled by legislation or by a tax system which denies him the right to receive a reasonable share of his earnings, then he will no longer exert himself and the country will be deprived of the energy on which its continued greatness depends.”

Worse yet, Mellon argued, high rates didn’t even raise money. By encouraging both legal tax avoidance and illegal tax evasion, they eroded the tax base and reduced overall revenue. Lower rates, he said, would actually raise money by spurring economic growth and reducing the incentive for tax avoidance. “It seems difficult for some to understand,” he complained, “that high rates of taxation do not necessarily mean large revenue to the government, and that more revenue may actually be obtained by lower rates.” In particular, Mellon insisted that high rates distorted investment decisions, boosting the popularity of tax-free state and local government bonds. Indeed, Mellon made these tax-free bonds a regular target of his reform attempts, but Congress resisted his plans to eliminate them.

Atlas Shrugged wasn't even written then!  What we don't hear much of are the original concerns and reasoning for progressive taxation. Teddy Roosevelt:

1906...We should discriminate in the sharpest way between fortunes well-won and fortunes ill-won; between those gained as an incident to performing great services to the community as a whole, and those gained in evil fashion by keeping just within the limits of mere law-honesty.

1907 regarding an income tax:...while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man.

No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. We have not the slightest sympathy with that socialistic idea which would try to put laziness, thriftlessness and inefficiency on a par with industry, thrift and efficiency; which would strive to break up not merely private property, but what is far more important, the home, the chief prop upon which our whole civilization stands. Such a theory, if ever adopted, would mean the ruin of the entire country--a ruin  which would bear heaviest upon the weakest, upon those least able to shift for themselves.

At this moment, I want to mention corporate taxes. There are lessons to be learned from it's history. I think it is a factor in understand more completely the issue Mike is focusing on: taxation and GDP growth. Wrap your minds around the fact that from 1936 to 1943 there were 6 years that corporate tax collections were greater than personal income tax collections. 1943 was the best year for this as personal income tax collections were 68.1% of the corporate tax collections. Just one year later it flips to corporate tax collections being 75.3% of personal income tax collections. In 1944 $34,543 million in total for the two taxes was collected vs 1943 $16,062 million in total.  In fact, personal income taxes remain in the mid to high 40 percent of total revenue collections from 1944 to present. The corporate share of total revenue peaks in 1943 at 39.8% and declines to hover around the 10% level with a few ventures into the single digits. Most notably 1983 the corporate share was 6.2% and 2009 it was 6.6%.

First up is our current tax table. I used the “married filling jointly” as that would be consistent with the other tables. One big rule of this series of postings: DO NOT concern yourself or me about the deductions that exist. They do not matter for this presentation and for all intent and purposes we can consider the income to have already gone through the deduction calculator and is now ready to have the tax table applied. This is because, these tables only apply to adjusted gross income.

You will notice that the table is calculated out to $,1,000,000 of income. I did this in order to keep all the tables going to the same income level. The 1936 table actually has rates for incomes up to $8 million. That is $8 million in 1936. (Using my favorite money converter that would be $301,000,000 in unskilled labor or $573,000,000 in GDP/capita.) Going to $1,000,000 in income also allows one to see what happens at the top when the rate no longer rises.

A very important concept to understand is that not every dollar is taxed at the single percentage rate as you go up the income ladder. Thus, there are two columns in my charts. The “Marginal Tax” is the additional money paid at the top of the bracket for the corresponding rate. The “Total tax” is the actual money paid up to that level. It is the “effective rate”. In simple terms, if you are at the 35% level, you 

are not paying 35% on all that you earn. Instead you are paying the amount based on your income being divided up into the number of brackets that exist. For 2010, there are 6 brackets, thus you have six different incomes so to speak.

This is what it looks like as a graph.

When the rate maxed out, I divided the range to $1 million into even parts so that the tax paid for each additional income level is the same. For the 1945/46 and 1965/67 data sets I converted the net income to 2010 dollars. I used the “unskilled labor” and GDP/cap as those are the 2 factors suggested as being the best for knowing what income equivalents are over time. The 1936 data set is converted to 1967 dollar because the numbers just get crazy. For example, a net income of $3840 is $145,000 in unskilled labor and $275,000 in GDP/cap. Though it is only $60,400 via the CPI. Which doesn't say much for today's median family income. It also gives us a clue as to just how much money is considered “rich”.

Next posting, I will start presenting the historical data sets. I'm still thinking about the best way to do it as what is important is the comparison among the data sets.  Maybe post just the data charts and later the graphs or maybe one data set and it's graphs at a time. 

Capitalism Is The Crisis with Chris Hedges, Derrick Jensen (2011; must-see)

http://dandelionsalad.wordpress.com/2011/08/15/capitalism-is-the-crisis-with-chris-hedges-derrick-jensen-2011/

2011; must-see)

Posted on August 15, 2011 by dandelionsalad

with Chris Hedges
Featured Writer
Dandelion Salad
August 10, 2011

Image by arimoore via Flickr

CapitalismCrisis on Aug 9, 2011

Capitalism Is The Crisis: Radical Politics in the Age of Austerity examines the ideological roots of the “austerity” agenda and proposes revolutionary paths out of the current crisis. The film features original interviews with Chris Hedges, Derrick Jensen, Michael Hardt, Peter Gelderloos, Leo Panitch, David McNally, Richard J.F. Day, Imre Szeman, Wayne Price, and many more!

The 2008 “financial crisis” in the United States was a systemic fraud in which the wealthy finance capitalists stole trillions of public dollars. No one was jailed for this crime, the largest theft of public money in history.

Instead, the rich forced working people across the globe to pay for their “crisis” through punitive “austerity” programs that gutted public services and repealed workers’ rights.

Austerity was named “Word of the Year” for 2010.

This documentary explains the nature of capitalist crisis, visits the protests against austerity measures, and recommends revolutionary paths for the future.

Special attention is devoted to the crisis in Greece, the 2010 G20 Summit protest in Toronto, Canada, and the remarkable surge of solidarity in Madison, Wisconsin.

It may be their crisis, but it’s our problem.

http://www.capitalismisthecrisis.net/

Capitalism Is The Crisis (Full Movie)

see

This Time We’re Taking the Whole Planet With Us by Chris Hedges

Farewell Content: Class Wars and Ass Wars By Gary Corseri

Whistle While You Work with Michael Parenti and Greg Boozel (2007; must-see)

When the Revolution Comes by Gaither Stewart

Mystery: How Wealth Creates Poverty in the World by Michael Parenti (2007)

Richard Wolff: Capitalism: Is It Working For Us?

Socialism on Dandelion Salad

Capitalism on Dandelion Salad

http://www.catholicworker.org/

Shame on ALEC Corporatocracy Racket is out!

Shame on ALEC Corporatocracy Racket is out! 


      bit.ly/phdjrb

JURIST - Paper Chase: New Mexico judge blocks immigrant residency verification program

JURIST - Paper Chase: New Mexico judge blocks immigrant residency verification program

Another unConstitutional piece of garbage legislation. Here's a New Mexico link about Gov. Susan Martinez:

http://www.clearlynewmexico.com/journalwatch/?p=3462

New Mexico judge blocks immigrant residency verification program
Michael Haggerson at 2:46 PM ET

[JURIST] A New Mexico judge on Wednesday temporarily blocked [opinion, PDF] the"Residency Verification Program" [press release], announced last month by Governor Susana Martinez [official website]. Judge Sarah Singleton stated that "irreparable injury will occur in the form of constitutional deprivations" if the "Residency Verification Program" is not halted. The Mexican American Legal Defense and Education Fund (MALDEF) [advocacy website] filed the restraining order [text, PDF] and an accompanying writ of mandamus [text, PDF], arguing that the program is unconstitutional [press release] "because it unfairly targets certain Latinos in New Mexico and places a higher burden on them beyond what the law requires of other residents" and it "constitutes a gross usurpation of power from the Legislature." The governor argues that the program is necessary because New Mexico is one of the few states that does not require proof of residency for a driver's license and therefore it has become a haven for "license rings" which obtain driver's licenses for individuals who have no intention of staying within the state. The program, if allowed to continue, would require a random sample of 10,000 immigrants who have obtained New Mexico driver's licenses to verify their residency via an in-person appointment.

Driver's licenses and immigration reform have been a contentious issue throughout the country. In August, the state of Arizona appealed the ruling [JURIST report] upholding the injunction against a controversial immigration law to the US Supreme Court. The act would require, in part, any individual with a license from a state which does not require proof of citizenship to obtain a license, such as New Mexico, to carry additional documentation [JURIST report] to prove their citizenship. In June, a group including theAmerican Civil Liberties Union and the National Immigration Law Center [advocacy websites]succeeded in blocking [JURIST report] a controversial Georgia immigration law which would allow law enforcement officers to not accept driver licenses [JURIST report] from states that do not require a proof of citizenship to obtain a driver's license and detain individuals with these licenses for failure to prove citizenship. Georgia Attorney General Sam Olens [official website] announced in August that he wouldappeal the ruling [JURIST report].

Drazkowski proposes outsourcing own job to corporate bill factory in bold redesign move

http://www.bluestemprairie.com/bluestemprairie/2011/08/drazkowski-proposes-outsourcing-own-job-to-corporate-bill-factory.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BluestemPrairie+%28Bluestem+Prairie%29

Last week in The Draz Traveling ALEC Reform 2.0 Medicine Show hits Kenyon, Goodview and beyond, Bluestem looked at the source of the supermajority amendment that's at the core of House Republican so-called reform.

Yesterday,  MPR's Tim Pugmire reported in Dayton blasts proposed amendment for supermajority vote:

. . .House Republicans said the amendment will be a key piece of their agenda for the 2012 session. During an appearance Monday at the [state] fair, Dayton called the proposal the "millionaires tax protection amendment." The DFL governor said it would be impossible to ever pass his proposed income tax increase on top earners. . . .

The threshold would force the Legislature to focus on redesigning government rather than on raising taxes, said Rep. Steve Drazkowski, R-Mazeppa, the chief sponsor of the proposed amendment.

Bluestem modestly suggests that, given Drazkowski's deep involvement with throwing "jackets" on ALEC model legislation (witness his "authorship" of  Minnesota's SB1070copycat anti-immigrant and anti-brown bill [HF3830]), Draz is really talking about outsourcing government redesign to ALEC's corporate bill factory, which will supply the heavy lifting in crafting the redesign.

Because of the state's lobby gift ban, Draz and others cannot accept "scholarships" from ALEC to travel to its meetings, nor does state law allow Minnesota public funds to be used for this travel. And it can't hold meetings on its own in Minnesota without registering as a lobby (not that the law stopped it from doing so).

Bluestem thinks that the selfless creation of model bills on the part of America's finest corporate citizens should be acknowledged in Minnesota by cutting legislative pay by two thirds and doing away with the per diem system. Since the Republicans believe that there's nothing wrong with having the American Legislative Exchange Council write our laws, perhaps Minnesotans should simply concede our out-dated and expensive conceit that legislators work for us. We can save a lot of money by not paying them for plagiarizing model bills written elsewhere.

Surely $10,000 should be a generous stipend for each lawmaker to act as ALEC's file clerks, and the parsimonious pay should prove incentive for them to get their work done in a day or two, then go home to run their pizza places, sell insurance products or do whatever it is they do for their livings.

Image: Zombie Draz, animated by ALEC and depicted by Tild.

Expect Obama Speech to Yield Lots of Talk, No Action: Ezra Klein - Bloomberg

Expect Obama Speech to Yield Lots of Talk, No Action: Ezra Klein - Bloomberg

By Ezra Klein Aug 31, 2011 7:00 PM CT

I’ve stopped pretending that the president’s jobs speech scheduled for next week is going to matter. I’m tired of speculating about what it will contain and whether its proposals will be big or small, bold or timid.

Here is what will actually happen: President Barack Obama will give a speech. It will include a mixture of ideas the administration has pushed for some time (extending the payroll tax cut, investing in infrastructure, passing trade agreements) and some modest new additions (a tax cut for companies that hire new workers, for example). Relatively few people will tune in to the speech; of those who do, most will be either committed Obama supporters or equally committed detractors.

Congressional Republicans will be among those paying attention. The fantasy version of their role can be found in Aaron Sorkin dramas and liberal op-ed columns, in which Obama’s rhetoric stirs the hearts of some while his rallying of the people inspires fear in the others. Republicans then agree to meet with Obama and work out a compromise plan. In some versions of the fantasy, the result is a big compromise that includes deficit reduction and revenue-raising tax reform. At some point in the drama, a weaselly political adviser warns his boss that voting for the deal could cost him his job. “So what?” the boss snarls. “It’s better to be an ex-congressman than an irresponsible congressman.”

Boehner’s Rebuttal

A more realistic script, however, has already been written. It takes the form of a news release issued by House Speaker John Boehner’s office on Aug. 17. All you really need to know is the title: “Statement on Announcement of President Obama’s Upcoming Speech on Jobs.”

Consider that for a moment: Where else but Washington would you see a news release responding to an event that hasn’t occurred and statements that haven’t been uttered?

“In the third year of his term,” the news release states, “Americans are still asking President Obama, ‘Where are the Jobs?’ That’s why Republicans, in contrast to the Democrats who run the White House and Senate, have made creating a better environment for job creation our number one focus.” Etc. and so on.

After Boehner actually hears the speech, he’ll be able to use some of its details to hammer it further into the ground. Then he’ll probably point to the House Republicans’ initiative of the week, an assault on “job-killing” regulations, as an alternative to anything Obama proposes. For the record, I’m not much of a fan of job-killing regulations either. But we have 9 percent unemployment because the global financial system collapsed, not because federal inspectors are overly concerned about coal particulates in the air.

Going Nowhere

Obama’s speech will achieve nothing. It will go nowhere because it has nowhere to go. A speech can rally the base, and maybe even temporarily change the topic in the news. But it can’t change the fundamental fact of politics right now, which is that the two parties disagree on the most profound question in Washington. It’s not: How do we fix the economy? It is: Who should win the next election?

So long as Republicans and Democrats disagree on that, there will be no significant cooperation on substantive issues. Boehner simply will not cut off his party’s candidates at the knees, especially its presidential contenders, by handing Obama a major economic accomplishment. Because he controls the House of Representatives, that means Obama -- and, by extension, the U.S. -- is not going to get a major economic accomplishment.

Almost everyone in Washington understands this. The interest in the president’s speech is just a function of the fact that people who discuss politics and policy for a living need to seem like we’re doing something through the long summer months. The administration needs to look like it’s acting to create jobs, the media need to appear to be reporting news, the pundits need to generate opinions about it all.

This is the part of the column where, as a pundit, I lay out my three-point, politically implausible plan to turn the situation around. This is where I tell the president to fight harder, or take his message directly to the people, or fire up the lethargic Obama for America organization. This is where I remind the Republicans that they supported tax cuts as stimulus all through the last decade and even into 2009; where I beg them to put country before party; where I warn them that everything they are doing unto the Democrats today will be done unto them tomorrow. This is where I summon history to show how FDR or Reagan or Truman broke a similar logjam.

But such exhortations -- and I am guilty of writing variations on these many times over -- are pointless today. The facts are what they are. And what they are is depressing and unlikely to change.

(Ezra Klein is a Bloomberg View columnist. The opinions expressed are his own.)