Budget Official Defends Minimum Wage Analysis

Douglas Elmendorf pushes back against Democratic critics

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Under fire from Democrats, the leader of the non-partisan Congressional Budget Office is defending his agency’s analysis of proposals to raise the federal minimum wage.

CBO Director Douglas Elmendorf said Wednesday that the independent budget office stands by its report released this week, which predicted that raising the minimum wage to $10.10 per hour, as proposed by President Barack Obama and congressional Democrats, would lead to a decrease in total employment.

“I want to be clear that our analysis on the effects of raising the minimum wage is completely consistent with the latest thinking in the economic profession,” Elmendorf said at a Christian Science Monitor breakfast for reporters.

At stake is a fierce debate about one of Obama’s top political priorities, one Democrats see as a winning issue in the coming midterm elections. White House officials took aim at the agency’s analysis, arguing it was out of step with the consensus of the nation’s leading economists.

“I suspect that they are not fully appreciating how much the literature has moved,” Betsey Stevenson, a member of the Council of Economic Advisers, said Tuesday on a conference call organized by the White House. Speaking Wednesday morning on MSNBC, Gene Sperling, the director of the National Economic Council, compared the CBO analysis to “Economics 101,” arguing the budget office ignored practical research showing raising the minimum wage does not hurt jobs.

“Zero is a perfectly reasonable estimate of the impact of the minimum wage on employment,” CEA Chairman Jason Furman said on the Tuesday conference call. House Minority Leader Nancy Pelosi piled on, saying that “in past years, the CBO itself has acknowledged the uncertainty of its own predictions and ignored new perspectives in the wide array of analysis on the minimum wage.”

Elmendorf refused to directly respond to his agency’s White House and Democratic critics, who are firing away just two weeks after another CBO report raised questions about the health care reform law’s impact on employment. But Elmendorf defended his agency’s methodology, saying it consulted a wide range of studies and researchers in the process of preparing its analysis.

“A balanced reading of the set of research studies in this area led us to conclude that an increase in the minimum wage would probably have a small negative effect on employment,” he said. Elmendorf added a mild critique of the analyses cited by the administration, saying, “most other economists don’t have to put numbers behind the words of their evaluations.”

The CBO report found a two-thirds chance that raising the minimum wage to $10.10 per hour would cut between a small number of jobs to as many as one million jobs. But CBO also predicted it would directly raise the incomes of 16.5 million Americans and lift almost one million out of poverty.

55 comments
gordo
gordo

Elmedorff is wrong. Higher minimum wage -- workers more contented and efficient -- have more money to spend -- that spending flows into the economy -- creates demand for products -- goes through the multiplier effect -- opens up more job opportunities. That folks is from Econ 1A.

roknsteve
roknsteve

The Republican Jobs Plan:  A 2 Dollar minimum wage because Republicans hate their fellow Americans.  

ReneDemonteverde
ReneDemonteverde

It is just common sense. You impose higher wages the owner will just cut working hours, lay off some workers or increase price of the product. Obama is just doing this in anticipation of the incoming elections and deflect people`s attention from Obama care.

The man is a scourge for this country.

reallife
reallife

This Elmendorf guy must be a racist.



reallife
reallife

@30dB  oh ok if twitter says we should do it... why dont you ask about a $30 minimum wage?



KeillRandor
KeillRandor

@ReneDemonteverde  

Nope - you don't understand economics, or the current situation your country is in, and therefore have nothing of value to offer except your opinion, which is wrong.


Your country is spiraling downwards precisely because nearly everyone's productive behaviour is not being rewarded enough to keep the overall economy afloat - (hence the increase in personal debt, not just government debt).  It is the governments job to ensure this does not happen at a scale which harms the overall standard of the country - which is why it's the governments job to fix it - which is what the minimum wage is there to do.  If a company cannot afford to supply the overall economy the amount which is required, then it does not DESERVE to exist, and SHOULD fail.  Since the problem your country has is one of not enough movement in the economy, rather than too much, it needs to be fixed in the most consistent manner possible, for the best overall long-term benefit - (TARP etc. trying to do the same was a short-term band-aid).


It is precisely BECAUSE too much is being taken from your economy, rather than being supplied, (by wages, on behalf of what is produced), that you have problems - and as such, forcing the companies to operate in their own best long-term interest is now something the government has to do - since all the emphasis has been on short-term interests instead.  The only way to truly replace what the economy is losing, is to raise wages - merely providing more work at the same wage will no longer be enough.  The trick is to raise wages to where they need to be, and no less, and hopefully not too much - just enough to keep the economy going at the required level, which isn't happening atm..


The problem your country has, is that too much of your basic local economy is now owned by corporations, rather than the state, which can no longer share the benefits for your country as a whole - which is why its your country that's losing, even as individual people and corporations are gaining.


Of course, since you have one party that only cares about such individuals and corporations, rather than the country as a whole, its in their interests to try and main the problems as much as possible - taking as much from your country as they can before it all crashes completely - which almost happened recently, and will again if people are not careful, which you arn't.

bobcn
bobcn

@ReneDemonteverde  

"It is just common sense"

Common sense tells us to use the history of minimum wage increases vs. employment  to learn what to expect from an increase.  We have years of empirical evidence that in the many minimum wage increases we've had employment didn't suffer.  And common sense tells us that the economic health of the working poor was improved.

Common sense would suggest that if raising the minimum wage reduces employment then lowering it will raise employment, right?  Recent history shows that that doesn't happen.  For example: the minimum wage fell about 29% in real terms between 1979 and 2003. For the median worker, real hourly earnings increased since 1979 but, for the lowest paid decile, there were significant decreases in the real wage without any significant decrease in the rate of unemployment. 


MrObvious
MrObvious

@ReneDemonteverde  

Except for where it's not happening. More money means more disposable income. More disposable income, more money to spend which increases demand. Right now corporations get away with it because government steps in so corps can socialize their cost.

yogi
yogi

@ReneDemonteverde  

It's true, the CEOs and executives of Walmart, McDonald's and the like are really hurting right now. I mean they're already struggling to cut workers hours to get around paying them healthcare. Just think of the brain-drain if a minimum wage was imposed to further cut profits.

WolfgangGoethe
WolfgangGoethe

@ReneDemonteverde  And yet history tells us that raising the minimum wage has not hurt employment in the past.  Common sense also says that corporations earning huge profits will hire more workers, and they are not doing so--they are pocketing the money.

ReneDemonteverde
ReneDemonteverde

@KeillRandor  So if you are such a hot shot in economics why are you down here with the rest of us trolls ? You should be a member of Obama economic panel.

bobcn
bobcn

@KeillRandor  

"The problem your country has, is that too much of your basic local economy is now owned by corporations, rather than the state"

I'd agree if you had said:  too much of the basic local economy is owned by corporations rather than people (not the state -- except for infrastructure) who have a (possibly compelled) interest in the health and well being of the communities they live in.  

My suggested change is pretty awkwardly stated, but I think you get the idea.  Otherwise, an excellent post.

justSaying.......
justSaying.......

@bobcn  nice blinders you're wearing with your tunnel visioned hatred for the people that actually create the jobs. I don't know what kind of government or union job you currently have but set that aside and look into what is involved in starting a business from scratch right now. The regulations, red tape, potential for litigation alone would be enough to scare the beejesus out of most folk. You have to hire accountants, attorneys and environmental consultants, spend months/years clearing red tape before you even break ground on anything. Then if your goal is to actually make money, you have be be careful to not make too much or you have to hire an entire accounting department to clear the ACA hurdles. Cool, you did all that and you are right on the verge of making a profit after ten years but wait.... now you have to pay your staff 30 to 50 percent more because Obama wants to buy idiot votes for his cronies in the senate for 2016. Great, you're in debt to you're eyeballs, you have your home backing your business venture and just when you were about to start paying some of it back and maybe making a buck for the 7 days a week 16 hours a day you've been putting in, some lib with a big heart when it comes to spending your money not his just set you back another ten years. Now, are YOU going to put 20 years of your life into creating something when some bonehead in DC can on a whim change the game to screw you at will?

ReneDemonteverde
ReneDemonteverde

@MrObvious @ReneDemonteverde  Reagan had it right. But you guys will always demonize him. So you voted for Obama who never managed anything in his entire life. Not even a lemon stand. So guess what happened ? Heck never even worked an honest days work in his entire life. It is all Dubya`s fault.

ReneDemonteverde
ReneDemonteverde

@WolfgangGoethe @ReneDemonteverde  In another time another place. When businesses feel more secure. Not in this kind of climate, with the advent of Obama Care, new regs covering work places and business conditions taxes among others. Look at the situation with the eyes of a small business owner. I look at the situation from that perspective. 

KeillRandor
KeillRandor

@manlyman @KeillRandor@ReneDemonteverde 

Plan?

LOL.

The only 'plan' that CAUSED both the problems, and their continuing presence, is that of the Republican party refusing to work with the Democrats for the benefit of the country as a whole...

 

Unlike you - I understand where the true power and influence of the US currently lies - and it's not with the president, especially since Republicans made that their goal right from the moment he was elected.


Nearly all of the problems the US has are to do with Congress failing to do its job on behalf of the country as a whole, and stopping the President from doing his.


I'm not going to say that there are some problems the President hasn't done a good job with - such as the those with the NSA, that pre-date ANYTHING to do with Obama, etc. - but again, it's Congress that has the true power to fix them, not the President, who can only operate within the rules Congress defines, which it has failed to do.


It's only because of the failure of Congress that you feel the President is alone and can therefore be attacked - which is, of course, exactly what you want, regardless of how damaging it may be for the country as a whole.


If you don't like what the President does, then get Congress to pass laws to make him accountable, or deal with the problems directly, when it has the power to do so - (which it does in regards to the NSA, and the FISA court).


Your problem, is that you don't want to admit that the only way things will improve is if your party cooperates with the democrats in Congress, which is the last thing you want to do, because you don't want this government to make ANYTHING better, because you want to make EVERYTHING about the President.


I, for one, do NOT fall for such tactics, but unfortunately, many people do, because they like to place blame, and cannot do it to themselves...

manlyman
manlyman

@KeillRandor @ReneDemonteverde We are 5 years into Obama's presidency, with the help of a democrat supermajority in the early years. A piece of garbage he is, but he's also the most powerful president to ever step foot in the white house. Everything is going exactly as he planned, trouble is, you're too dumb to know what that plan is. Just look at our country and tell me we're on the right path. Go ahead.

KeillRandor
KeillRandor

@ReneDemonteverde @KeillRandor 

But the problem with people like you is you only perceive things in a vacuum - purely about you - and from that perspective everything is extremely frightening because you have very little to no power or influence in the matter at all - that you have to trust other people to help the entire economy function as it should.


But this is exactly what human civilization is about - people's productive behaviour supporting and enabling others to grow and increase everyone's productivity and wealth - which isn't happening because, as I said, it's being taken away by people who only truly care about themselves, and can get away with it primarily due to the nature of the legal abstraction we call a 'corporation or company'.


at the end of the day, it's another abstracted argument about the benefits of collective society, on a large scale as a country, versus the selfish individuals and corporations who feel that just because they can make it on their own, so can, and should, everyone else - so why should they care?


There's a good reason why most bad guys in art tend to be selfish, because such collective behaviour and productivity, as I said, is the foundation of civilization itself, and possibly, if not almost certainly, our very survival as a race.


And it's the Republican party (GOP) that's running off the edge of the cliff in that direction as fast as it can...


That doesn't mean that the Democrats are perfect, but I'm afraid I have to believe in human civilization before the right of anyone to become rich enough to buy their own country - at which point, civilization no longer means very much...

ReneDemonteverde
ReneDemonteverde

@KeillRandor @ReneDemonteverde  Like I asked you why are you not facing an economic panel of your peers, your equals, instead of trolling here anonymously 

with the rest of us trolls ? I never claimed to be an expert in the economy unlike you moron { that is just for dramatic effect, not personal} and was just looking at the situation from the viewpoint of a small business owner unable to understand all those high falutin words you arrogant idiots like to spout.


KeillRandor
KeillRandor

@ReneDemonteverde @KeillRandor

Because a general understanding is all that is needed to know why your kind is wrong - when to manage the economy as a whole - (especially with all the regulations, rules and laws now in place) - the small details matter.

@bobcn 

The reason why I said state - is because the collective we live as part of, which matters for the economy itself, is called a nation/country.  If that was not the case, then of course it would be owned by a smaller collection. Of course - the whole idea behind a lot of the problems your country has, is that its possible to exist within a country without being part of it - it's all about *me*, not society itself.


The only way for an economy to be *not* about a nation, is if the nation did not exist, whether literally, or figuratively.

manlyman
manlyman

@justSaying....... Wrong, justSaying. If you own a business you are automatically filthy rich and need to pay your "fair share".

bobcn
bobcn

@justSaying.......  

Congratulations! You've just succeeded in replying with an immediate ad-hominem attack, followed by a long post that doesn't address (or even refer to) a single point in the post that you're replying to. 

You might as well just post 'I hate liberals...I hate liberals...I hate liberals"  It would be an equally effective (or, rather, ineffective) debating technique.


bobcn
bobcn

@manlyman @bobcn @MrObvious @ReneDemonteverde  

I really don't care what you believe.  I have no respect for people who trade in invective and insults.  

However, for the benefit of anyone who may be confused by your lie, here's a link (on congress.gov) to the actual bill I was referring to and the sections in question:

http://beta.congress.gov/111/bills/hr3962/BILLS-111hr3962ih.pdf

The sections of interest are:

  • Sec. 347. No Federal payment for undocumented aliens
  • Sec. 1786: Prohibitions on Federal Medicaid and CHIP payment for undocumented aliens

This proves that your claim is either based on ignorance or it's a lie. I have no doubt that this will result in no links or facts refuting it, but more childish insults.  I do appreciate the way you've proven my point about wingers inability to cope with reality when it conflicts with their ideology and prejudices.  As Colbert said:"He believes the same thing Wednesday that he believed on Mondayno matter what happened Tuesday"

manlyman
manlyman

@bobcn @MrObvious @ReneDemonteverde I hate to burst your bubble bobsy, but the bill clearly states that Illegals WILL be covered. I suggest you go find it and reread it. And I don't believe you ever had a political debate with anyone outside of swampland.

manlyman
manlyman

@bobcn @ReneDemonteverde If those statements are provably false bob, then go ahead and give us that proof. You worship a man who NOBODY knows anything about. That information would be worth a pile of money to the right people...

manlyman
manlyman

@jmac @ReneDemonteverde Wall street is not the economy' huh? But when the stock market goes up the first thing you do is kiss obama's feet. The working man is the economy, that's the first truth I've ever heard you speak, but you forgot to tell that to Obama.

justSaying.......
justSaying.......

@bobcn @ReneDemonteverde  So, you have a problem with the truth? He didn't ever manage anything in his life. He was barely a politician when swept into the white house on hatred for W. He hasn't fixed anything, the economy is in shambles, all the promises were never accomplished and most were never attempted. NSA is spying MORE, LESS people in the workforce, pulled out of Iraq on the Bush timeline but left nobody there so it too is a shambles, Afghanistan, Gitmo, you name it. You can lick his boots until the cows come home but that only makes you look stupid

bobcn
bobcn

@MrObvious @ReneDemonteverde @bobcn  

"You can't cure this"

I'm afraid you're right. 

I used to have regular political debates with a hard right wing coworker.  About  5 years ago the Dems (who still controlled the House at the time) released a health care bill.  Winger media immediately started attacking with the lie that the bill offered free health care to illegal aliens. Pelosi was going on talking head shows and arguing that the charge wasn't true.  The media, in it's usual lazy and spineless way, was treating the whole thing as 'he said, she said'.

In one debate with my winger coworker, he started repeating the 'free healthcare for illegal aliens' lie.  I suggested that, rather than just arguing back and forth, we should find out the truth for ourselves.

In my office we looked up the text of the actual bill on Thomas.gov (the Library of Congress's website that posts bills and legislation).  We found text in the bill that plainly stated that health care in the bill only applied to US citizens and legal residents.  It very explicitly stated in plain language that illegal aliens were not covered.

Rather than admitting that.he was wrong, my winger coworker insisted that he was right and that 'any good lawyer would be able to find a loophole somewhere in the bill' that would override what we had just read.  No amount of facts was going to convince him that what they'd told him on Fox was wrong.  He wasn't going to believe his lying eyes.

The debates in my office didn't continue, but occasionally I'd overhear him using the same kind of childish insults Rene and reallife have been using here when he was talking with other wingers.


ReneDemonteverde
ReneDemonteverde

@bobcn @ReneDemonteverde  And you believe that ? If Obama could look straight at the camera and lie more than twenty times you believe that ? Were you just born yesterday ? As he claimed to be a scholar but wont release his grades you believe that ? Sealed his records from public view, you believe that ? So if Obama comes to you selling you beach front properties facing the Atlantic ocean in Arizona, bet you would jump at the opportunity too. Show the references. Show the references And maybe, just maybe I might believe. The man is just a congenital liar abetted by the press. 

MrObvious
MrObvious

Look up fallacy

None of your hysterical yammering is remotely relevant to what I wrote

ODS

bobcn
bobcn

@ReneDemonteverde @bobcn  

OK, Rene.  Here you go.  Obama's entire work history summarized:

  • 1975 or 1976 — ice cream scooper, Baskin-Robbins — Honolulu — Obama claims to have lost his taste for ice cream during this, his first job, the duration of which is not publicly known.
  • Date unknown — deli counter clerk, business name unknown — Honolulu — Obama had a summer job at a deli counter in Hawaii, making sandwiches, his spokesman said during the presidential campaign.
  • 1980 — gift shop sales clerk, business name unknown — Honolulu — Obama worked at a gift shop in Hawaii selling island souvenirs the summer after his freshman year at Occidental College in California.
  • Sometime between 1981-1983 — construction worker, business name unknown — New York — Obama cleared a construction site for a summer on Manhattan's Upper West Side while attending Columbia University, the Associated Press reported. Obama referred to this job inDreams From My Father .
  • Sometime between 1981-1983 — position unknown, company unknown — New York — During his years at Columbia University, Obama worked one summer for a private company processing health records of either police or firefighters, his spokesman said during the presidential campaign.
  • Sometime between 1981-1983 — telemarketer, company unknown — New York — During one school year at Columbia, Obama was a telemarketer in midtown Manhattan selling New York Times subscriptions over the phone, his spokesman said during the presidential campaign.
  • 1983-84 — research assistant, Business International Corporation — New York — At this firm that helped American companies do business abroad, Obama was a researcher and writer for a reference service called Financing Foreign Operations; among his duties was writing a newsletter called Business International Money Report.
  • 1985 — project coordinator, New York Public Interest Research Group — New York — Obama mobilized student volunteers at City College in Harlem for NYPIRG, a nonprofit organization that promotes consumer, environmental and government reform. He promoted activism around issues such as mass transit, higher education, tuition, financial aid and recycling.
  • 1985-1988 — community organizer, Developing Communities Project — Chicago — Obama advocated for asbestos removal, job training and public-works services at this community organization on Chicago's South Side.
  • 1988 — research assistant, Lawrence Tribe — student assistant to this Harvard Law School professor and renowned constitutional scholar.
  • 1989 — summer associate, Hopkins & Sutter — Obama held this job the summer between his first and second years of law school.
  • 1990 — summer associate, Sidley & Austin — After his second year of law school Obama was a summer associate for one of the world's oldest and largest law firms, where he met Michelle Robinson, his future wife.
  • 1990-1991 — president, Harvard Law Review — Obama was the first African-American to hold this prestigious position.
  • 1991-1992 — executive director, Project Vote — Ran a campaign that registered nearly 150,000 black voters for the 1992 elections.
  • 1993-2004 — associate and partner (starting 1996), Davis, Miner, Barnhill & Galland — Chicago — defended clients ranging from landlords to a securities trader, and handled employment-discrimination and voting-rights cases at this Chicago law firm.
  • 1993-2004 — part-time lecturer, University of Chicago Law School — Chicago — lectured on constitutional law.
  • 1995 — author, Times Books — published memoir, Dreams From My Father.
  • 1997-2004 — state senator, Illinois — senator from Illinois' 13th District on Chicago's South Side.
  • 2005-2008 — U.S. Senator — represented Illinois in the U.S. Senate.
  • 2006 -- Author, Random House — published The Audacity of Hope: Thoughts on Reclaiming the American Dream.
  • 2009 — President, United States — Washington — In his current position, Obama is the head of state of the most powerful country in the world. He runs the executive branch and serves as commander in chief of the armed forces.
Pretty impressive resume, huh? 


BTW -- this list was compiled by PolitiFact in response to Scarborough claiming that "if you're going to run the most complex financial sectors in the world, I hope that you have at least received a paycheck for working at a burger stand." Scarborough chose to use 'burger stand'  in his rhetoric rather than your 'lemon stand'.


Link; http://www.politifact.com/truth-o-meter/statements/2009/apr/15/joe-scarborough/heres-scoop-obama-has-worked-ice-cream-business-am/

ReneDemonteverde
ReneDemonteverde

@bobcn @ReneDemonteverde  OK bobcn what did Obama do in his previous life that qualifies him as manager ? Even Dubya born with a silver spoon worked with men in his father`s busness in the fields sweating it up. If that is the only reason you can give, being offended because I criticize your role model that is a shallow response. The man is as fraudulent as a three dollar bill. 

ReneDemonteverde
ReneDemonteverde

@jmac @ReneDemonteverde  Jobs was plentiful Jmac. Jobs was plentiful. If you are going to look loopholes and defects in any administration you will find it. But most of all under most Americans were proud of America and being part of it. Reagan made them feel that way. Unlike this Fraud. {hope that does not qualify as racial slur}

reallife
reallife

@jmac @ReneDemonteverde  Reagan said the government was the problem, not the solution. He was so right that even your boy Clinton had to abide by it. Hence the economic boom that we had. Too bad the democrats won the congress back.

But no worries mate, we have 30 years of conservative rule coming up and all thanks to your messiah.

Enjoy!

bobcn
bobcn

@ReneDemonteverde  

"So you voted for Obama who never managed anything in his entire life. Not even a lemon stand."

You know, Rene, when you respond to reasonable discussion and  fair, respectful debating points with ad-hominem attacks and statements that are provably false it reflects much worse on you than on the person you're attacking.  Just sayin'

jmac
jmac

@ReneDemonteverde  Reagan tripled the National Debt.   He didn't have it right.  He helped start the fall of the Republican party  by trying to ignore the right wing and the Republican platform.   Wall Street IS NOT THE ECONOMY.   The working man is the economy.  It's not rocket science.  

manlyman
manlyman

@ReneDemonteverde @Irony Raising the minimum wage is merely taking from the poor and giving to the poorer. There should be no minimum wage. Pay should be according to what the worker is worth. Some people work their tails off, others do barely enough to keep from getting fired. They both do the same job but they are defintely different production wise.

manlyman
manlyman

@ReneDemonteverde @Irony Regan's policies, built on a 20 year model, came to fruition in the Clinton years, with the help of a repub majority. Clinton's attitude was if it failed he could say I told you so, and if it worked he could take the credit. He was never president for any other reason than for the perks, those are the indisputable facts.

ReneDemonteverde
ReneDemonteverde

@Irony @ReneDemonteverde  Tell that to people who were around when Reagan was President, the dollar was stronger and jobs were still plentiful and to a certain extent when Duby was President. Even Clinton in spite of his moral frailties was a good President regarding the economy. Though his mishandling of the Black Hawk situation in Somalia, the rise of al Qaeda and bin Laden which led to 9/11 will remain a blot on his legacy. But the economy was good.


Irony
Irony

@ReneDemonteverde Well, they were hardly the "good ol' days" in many senses, but business in the US was generally stronger in the 60's, back when taxes were much higher, especially on the wealthy and corporations, unions were strong, and the minimum wage was much higher than it is today in real dollars.

ReneDemonteverde
ReneDemonteverde

@barneydidit @ReneDemonteverde @WolfgangGoethe  Yes you have seen that movie before. It was called The Good Old Days. Jobs were plentiful, the dollar was stronger, this country was respected, racial and social division were minimal, and Democrats send competent and able men to the White House, based on merit. {Not on basis of the color of skin. Hope I dont get reprimanded for this}

barneydidit
barneydidit

@ReneDemonteverde @WolfgangGoethe  And they'll feel more secure.....when there's a Republican in the White House.....because.....they'll lower taxes? Seen that movie before Rene, I know how it ends. 

reallife
reallife

@ReneDemonteverde @reallife  ding! ding! ding! ding!


LOL



ReneDemonteverde
ReneDemonteverde

@reallife  Libturds never forget a slight. It is the one that hits them the most and hard that they always remember. They easily forget the McCains and the Romneys. It is the Palins and the Cruzes that stays on their minds.

reallife
reallife

@MrObvious @bobcn @reallife that rusty fellow must've been really good huh?  he's been gone for years now and he's still under your skin


LOL