- Doug Milhous: There’ll be time enough for counting when the dealing’s done: "The Sean Trende theory that Republicans can safely ignore immigration reform is gaining a lot of traction…. Trende believes (1) that the Latino vote is not in any way monolithic and is therefore recoverable for Republicans (at least in terms of getting 35 or 40 percent) regardless of what happens over the next few years, (2) that Obama benefitted from a huge African-American turn-out because of being black without suffering much of a hit among white voters because of being black, and (3) that the Democratic share of the white vote could go much lower. These things are almost impossible to predict or quantify…. [A] strategy that relies on increasing the Republican share of the white vote while not losing its share of the non-white vote just seems too hopeful to me. If the share of the population that hates you is increasing, it makes sense to do something about it, not pray that the rest of the population will magically start to like you more. I might add that this is my beef with contarianism in general. Any sane betting person would bet with Rove on this one, the same way any betting person would bet that the planet will get a lot hotter over the next 100 years unless something is done about carbon emission. Making provocative, speculative points is a fun parlor game, and perhaps an interesting one, but that’s all it is. There are no Slatesters in political fox holes. Anyway, as a liberal, I sure hope House Republicans are listening to Trende."
Ben Walsh: Being a CEO has never been more valuable: "There are a number of reasons no one is particularly worried about wage stagnation among CEOs…. The average ratio of S&P 500 CEO pay to employee pay is 204 to 1, according to Bloomberg (the ratio rises to 273 to 1 when companies outside the S&P are included). Bloomberg found that Ron Johnson, the former, and disgraced, JC Penney CEO, clocked in at an astounding 1,795 to 1…. These figures aren’t just the status quo, they’re the result of a decades-long trend. Bloomberg estimates that the CEO to worker pay ratio was 120 to 1 in 2000, and just 42 to 1 in 1980. In the 1950s, it estimates, the ratio was an absurdly quaint of 20 to 1…. As long as boards and shareholders believe that an executive might have an idea worth much more than the combined labor of thousands of employees, CEOs will have the leverage in pay discussions. Competent management is not ineffable fairy dust, but if you think it is, it will be priced accordingly."
Kevin Drum:** It's Pretty Unlikely That American Companies Pay Their CEOs on Expected Performance: "What would we see if American companies were really paying their CEOs gigantic salaries based on a belief that a great CEO has a huge impact on earnings1 compared to the 2nd best CEO? Answer: we'd see genuine pay-for-performance packages. That is, Les Moonves's compensation would be set at a fairly modest level unless CBS performed objectively better than its peers, at which point his compensation would go up quickly. Now ask yourself another question: how many Fortune 5000 CEOs are actually paid this way? Answer: not many. This suggests pretty strongly that neither companies nor CEOs are truly confident in their ability to do better than the 2nd best guy out there. And that in turn suggests that fat CEO pay packages are based on something else entirely."
Felix Salmon: Financial innovation of the day, Winklevii edition: "As I explained back in April, bitcoin is a combination of two things: it’s a very interesting payment mechanism, and it’s also a highly stupid and speculative store of value. With their new product, the Winklevii are basically separating the two, and selling — for an extra fee — the stupid-investment part of bitcoin without any of the benefits of the much more interesting and useful payments-mechanism aspect. As Peter Thal Larsen points out, you might as well buy an ETF which holds dollars. Still, if you want to own bitcoins, and you never want to spend your bitcoins, and if you want to pay the Winklevii for the privilege of looking after your bitcoins on your behalf, and if you trust that the Winklevii, after putting out a huge shingle saying 'millions of dollars worth of bitcoins stored here', won’t get hacked and lose all their coins, — then, well, then I’m afraid I have bad news for you. Which is that the SEC will never, ever, approve this product. After all, this is an asset that senators want to ban, an asset which is probably illegal under US law, and an asset that is mainly known for its ease of facilitating money laundering, tax evasion, and the purchase of contraband material. It’s hard to see why the SEC would do anything whatsoever to legitimize that asset as an investible asset class."
Kevin Drum: Open Season on Black Voting Has Officially Started: "It is—and always has been—unclear to me how much of this is driven by straight-up anti-black animus and how much is purely partisan, with blacks as collateral damage. Probably some of both. But really, how much does it matter? Is outright racism really any worse than simply not giving a damn if your only route to harming Democratic Party interests happens to require making it more burdensome for blacks to vote? I suppose, yes, it is worse. But not by all that much."
Viral Acharya, Richard Portes, and Richard Reid: The impact on the financial sector of long-term low nominal-interest rates: "Keeping interest rates at near-zero levels for an extended period of time… [and] quantitative easing interventions… keep sovereign and mortgage borrowing costs low… generating wealth transfers to borrowers, notably banks and households with negative home equities. But they may also be stoking asset-price inflation, often in unexpected fashion, by inducing a ‘search for yield’ among savers and intermediaries who manage their savings…. The weight of evidence confirms that low interest rates do indeed lead to greater risk taking and unintended responses from both the financial and the non-financial sector, but the magnitudes of these effects are both little understood and hard to measure…. One solution to the low-growth, low-interest environment might be for central banks to target higher inflation more deliberately and aggressively (e.g. Japan). But such a stance would require a huge step up in extraordinary monetary-policy measures, and this in itself could prove destabilising…. The recent indication of a possible slow-down or unwinding by the Federal Reserve of its unconventional monetary policy has induced a bout of market corrections and volatility. Many observers have attributed this to stoking of asset-price inflation in the period before this indication. The financial sector may now be seeking an exit from its own search-for-yield strategies while the central banks are possibly seeking an exit from their own unconventional policies."
David Glasner: Who Sets the Real Rate of Interest? | Uneasy Money: "If you believe that the Fed cannot reduce the rate of unemployment below the 'natural rate of unemployment' by printing money, why would you believe that the Fed can reduce the real rate of interest below the 'natural rate of interest' by printing money? Martin Feldstein and the Wall Street Journal believe that the Fed is unable to do one, but perfectly able to do the other. Sorry, but I just don’t get it."
Paul Rosenberg: Intro to the Structure of Lies in Conservative Jurisprudence | Joan Walsh: Red-state women will transform America | Alyssa Rosenberg: Novelist John Scalzi Says He Won't Attend Conventions Without Strong Sexual Harassment Policies | Brad DeLong (2010): DeLong Smackdown Watch: Yes, I Have Been Making This Same Mistake Since I Was 18 Edition |