Dean Baker: Are Investors Less Confused About Real and Nominal Interest Rates Than They Were 40 Years Ago?: "Brad DeLong picks up on Paul Krugman's column...
...and questions whether the top one percent of the income distribution (or top 0.01 percent) really have much to fear from higher inflation. Brad concludes that they don't, but that they think they do. He says:
The top 0.01% were impoverished by the 1970s as a whole. But they have not been enriched by the post 2008 era. What they have gained via a higher capitalization via low safe interest rates has been offset by what they have lost as a result of depressed profits, depressed by a low level of economic activity, a depression which has not been completely offset by downward pressure on wages. The top 0.01% would not be poorer absolutely (although they would be poorer relatively) in a high-pressure higher-inflation economy. But they think they would be…"
I'm not sure about Brad's story here.
Over at the Washington Equitable Center for Growth: The Social and Moral Philosophy of the Minimum Wage: Monday Focus: April 14, 2014
Matthew Yglesias is surprised that most economists favor raising the minimum wage:
Matthew Yglesias: What do economists think about the minimum wage?: "A survey of economists by the Initiative on Global Markets...
...at the University of Chicago's Booth School of Business found they supported a minimum-wage increase. They weren't sure, however, whether increases would create unemployment. Most said that, on balance, the benefits exceeded the costs...
But why should he be surprised? READ MOAR
Over at the Washington Center for Equitable Growth: When I look at Thomas Piketty's big book, I see one thing that he failed to do that I think he really should have done. A large part of the book is about the contrast between "r", the rate of return on wealth, and "g" the growth rate of the economy. However, there are four different r's. And in his book he failed to distinguish between them.
The four different r's are:
The real interest rate at which metropolitan governments can borrow: call this r1.
The real interest rate that is the actual average return on wealthin the society and economy: call this r2.
The real interest rate that is the average risky net rate of accumulation--what capital receives, minus the risk of confiscation or destruction or taxation, plus appreciation in valuation multiples, minus what is spent in order to keep the world in the appropriate social position: call this r3.
A measure of the extent to which capital and wealth serve as an effective claim on income independent of how much capital there is--a standardized measure of what the society and economy's return on wealth would be at some standardized ratio of wealth to annual income: say, 4: call this ρ.
These four r's are very different animals. READ MOAR
Harold Pollack: Reports of ACA demise: greatly exaggerated: "For this edition...
...I Skyped with Dr. Jonathan Gruber, who is the Ford Professor of Economics at the Massachusetts Institute of Technology and director of the health care program at the National Bureau of Economic Research. He is also the most famous health economist in the United States. He has won numerous awards, and written countless papers and academic articles. He has even written a graphic novel about health reform.
I am very sorry that I am missing this:
But I am very glad I am attending this:
Jack Greenberg: "Pursuing the Dreams of Brown and the Civil Rights Act": Pierson Auditorium, UMKC
Joshua Holland: Obamacare Is Widening The Gap Between “Red” And “Blue” America: "When the Supreme Court ruled that states could decline Obamacare’s Medicaid expansion without facing a penalty...
...the justices set in motion a process that’s now pushing our two countries even further apart as about half of the states passed on the opportunity to insure their poorer residents.... Obamacare appears to have extended insurance coverage to about ten million people who didn’t have it before.... The rate of uninsured is now almost 50 percent higher in states that refused the Affordable Care Act’s (ACA) Medicaid expansion (18.1 percent) than in those that embraced the policy (12.4 percent)....
Over at the Washington Center for Equitable Growth: More and more these days, I find myself perturbed when I read Kenneth Rogoff. The models he uses are the models that he built and the models that seem to me to make the most sense. But I repeatedly find him making judgments about how the models apply to the real world that I cannot follow.
For today's example...
Kenneth Rogoff: More Facts and Less Populism: "When the US Treasury recently added its voice to the chorus of critics of Germany’s chronic current-account surplus...
...it underscored the deep disagreement over what, if anything, should be done about it. The critics want Germany to increase its contribution to global demand by importing more and exporting less. The Germans view the maintenance of strong balance sheets as essential to their country’s stabilizing role in Europe.... The debate has too often been informed more by ideology than facts.... READ MOAR
It is unclear whether Paul Ryan understands what he is doing or not. But if he does, he is laying it all out there--that the Republican health-care endgame is as follows:
If you are already sick, have the wrong genetic markers, or are poor, the plan is for you to beg at your church for money to pay your health care bills.
Health insurance is to be reserved only for those from the middle class who lack adverse genetic markers and who have no preexisting conditions.
Why? Because freedom!
I swing back and forth between thinking that Paul Ryan understands, thinking that he does not understand, and thinking that he just isn't thinking about it but, instead, simply taking whatever step looks most solid without raising his eyes... READ MOAR
...When they took my insurance card, they asked "Is this marketplace or employer insurance?" I answered that it was from my employer. The receptionist said, "Great. We don't take Obamacare." I had a perplexed look on my face, I guess, because she said, "The marketplace has so many kinks that we're just not participating." Is there any reason that this isn't totally kooky? I mean, why should the doctor's office have any idea if an individual plan was purchased on the marketplace, or if the individual just went to Blue Cross Blue Shield directly? Are they saying "no individual policies at all"? Sure enough, there was a sign hanging in the office, which I'll put below the jump. I assume this is just civilian Republican asshattery...
Economics 101 usually paints a highly stylized, unrealistic view of the world in which free markets always produce optimal outcomes.... Most people in the world who have taken any economics have only taken first-year economics, and so they never learned that, from a practical perspective, just about everything in Economics 101 is wrong. (Complete information? Rational actors? Perfectly competitive markets?) This produces a nation of people like Paul Ryan... journalists who repeat what Paul Ryan says, and ordinary people who nod their heads.... The problem is... the way it is taught to first-year students....
In Alfred Hitchcock's (1938) The Lady Vanishes], the moment when the train is stopped in the countryside by armed fascists is the moment of revelation and clarity: all becomes clear, the adversaries reveal themselves, and the proper action heroics can begin.
In Wes Anderson's (2014) The Grand Budapest Hotel, the first moment when the train is stopped in the countryside by armed authoritarians is one of suspense broken by comic-opera comedy. Just as the militia have determined that the young Zero Moustafa's papers are not in order are going to pull him off of the train and take him away to an unknown fate, it turns out that their leader--Captain Albert Henckels-Bergersdorfer--is the same Little Albert to whom Zero's patron M. Gustave was "very kind" when as a lonely little boy he stayed with his parents at the Grand Budapest Hotel in Nebelsbad, Zubrowka: READ MOAR
but referenced throughout–which makes the joke yet richer and more multi-layered by the book’s dense 349 page end. It goes like this: There are two people who actually understand the American health system, and both Victor Fuchs and Alain Enthoven are 90 and 83 years of age, respectively. I don’t care if Zeke Emanuel wrote the joke himself because what he did write is the book that should make all of us a little less fearful…. READ MOAR
At least three ex-Governors have assured me over the past three weeks that all or nearly all states will find some way to do Medicaid expansion before the 2016 presidential election--that current governors, even in the reddest of red states, are now more scared of their doctors and their hospital administrators than they are of the Tea Party. And they are beginning to fear that the Keynesians are right and that a failure to expand Medicaid could throw their states back into recession--for state governors and legislators do believe that their state prosperity depends on workers doing things that create exports and thus dollars flowing into the state, and in the flow-of-funds Medicaid expansion is an "export".
Ed Kilgore: Greasing the Skids for Medicaid Expansion: "Arkansas’ expand-but-privatize approach (which recently survived a near-death experience in the Arkansas legislature, at least for the next year),
and Iowa’s expand-with-“personal-responsibility” approach (allowing more copays and deductibles, and more coercive “healthy choice” programs, than are allowed in traditional Medicaid).... Utah is on the brink of cutting a deal.... Progressives could look at such developments as paving the way for more Republican-governed states to expand Medicaid, which is a good thing, or as concessions that threaten the safety-net features (and “single payer” structure) of Medicaid, which is a bad thing....
But I tell you what: if, God forbid, I were a Republican governor, I’d come up with a package of every conservative pet rock reform I could think of that was applicable for Medicaid, put it into a waiver package, and tell my conservative friends that I was going to try to get Barack Obama to pay for turning Medicaid inside out. However it turned out, I’d be a political winner with the Right.
But Kilgore is wrong: it won't be a political winner on the right--no matter how many bells and whistles are added to the waiver application. The deal-breaker for the right is cooperation--or apparent cooperation--in any way with President Obama...
My decade-old thoughts on Piketty issues...
Bequests: An Historical Perspective: Hoisted from the Archives from Eleven Years Ago: So I've finally put to bed a sketch of how the relative economic importance of bequests has changed over the past five centuries. The more I think about it, the more I think that the central points--the stunning decline in the relative importance of inherited wealth with the coming of modern economic growth, and the way in which America initially defined itself as hostile to inheritance for equality of opportunity's sake--are very important. Thus I find myself frustrated: I think I have important things to say, but I don't think I've said them as well as they deserve.
Practically every major aspect of our system of inheritance today is less than two hundred and fifty years old. Two hundred and fifty years ago, inheritance proceeded through primogeniture--as if those leaving bequests cared not for the well-being of their descendants but only for the wealth and power of the lineage head. Before the industrial revolution, inheritance played an overwhelming and crucial role in wealth accumulation and wealth distribution that it does not play today.
Migration to the New World was accompanied by a rapid shift in the perception of the purpose of inheritance as the old patterns failed to flourish in a land-rich, rapidly-growing frontier-settler economy. By the start of the twentieth century inherited wealth was regarded with suspicion in America, with even some of the richest calling for estate taxes to keep the rich from diverting the public trust of their fortunes into the pockets of their descendants. Thus the coming of social democracy to America brought with it high statutory rates of tax on large estates, which nevertheless did not raise a great deal of revenue.
Now we may be seeing another turn of the wheel, for if history teaches anything it is that even those elements of inheritance that we think of as most deeply embedded in fundamental human desires and economic laws are remarkably mutable over the centuries.
Michael Leachman and Chris Mai: Lessons for Other States from Kansas' Massive Tax Cuts: "Kansas is a cautionary tale, not a model.
As other states recover from the recent recession and turn toward the future, Kansas’ huge tax cuts have left that state’s schools and other public services stuck in the recession, and declining further — a serious threat to the state’s long-term economic vitality. Meanwhile, promises of immediate economic improvement have utterly failed to materialize.... Kansas’ tax cuts this year are costing the state about 8 percent of the revenue it uses to fund schools, health care, and other public services, a hit comparable to a mid-sized recession. State data show that the revenue loss will rise to 16 percent in five years if the tax cuts are not reversed.... Most states are restoring funding for schools after years of significant cuts, but in Kansas the cuts continue. Governor Sam Brownback recently proposed another reduction in per-pupil general school aid for next year, which would leave funding 17 percent below pre-recession levels. Funding for other services — colleges and universities, libraries, and local health departments, among others — also is way down, and declining.
Over at the New York Times Room for Debate:
I have long thought that Marx's fixation on the labor theory of value made his technical economic analyses of little worth. Marx was dead certain for ontological reasons that exchange-value was created by human socially-necessary labor time and by that alone, and that after its creation exchange-value could be transferred and redistributed but never enlarged or diminished. Thus he vanished into the swamp, the dark waters closed over his head, and was never seen again. READ MOAR at the Equitablog
Apropos of Little Libertarians on the Prairie, Colander and Landreth:
With the depression in the 1930s that view about the role of the market was changing, both in the academic and the political spheres. With the success of the Western governments in World War II, there was also a change in the view of the role of government. It was within this changing ideological structure that Lorie Tarshis wrote his book. Tarshis’s book conveyed a quite different policy perspective. Tarshis saw the government as an agency through which people acted collectively for the common good. That view of government was combined with a belief that the market needed government assistance to assure full employment. Thus, it was inevitable that a book presenting the new view that questioned the self-regulating nature of the economic system would provoke a reaction.
Over at the Washington Center for Equitable Growth: Dialogue: Eleven (so Far) Worthwhile Reviews of and Reflections on Thomas Piketty’s “Capital in the Twenty-First Century”: Wednesday Focus: March 26, 2014
Sokrates: Production is currently mired some 8% below the growth trend that back in 2008 we confidently thought of as normal and highly unlikely to be disturbed.
Glaukon: It is indeed.
Thrasymakhos: And employment is currently mired some 7% below the proportion of the population that back in 2008 we confidently thought of as normal and highly likely to be quickly reattained after macroeconomic shocks.
Khremistokles: What will you say next, Thrasymakhos? That the sky is blue?
Aristokles: Nobody now expects a return to the "old normal"...
Thrasymakhos: Actually, the sky is grey here in Berkeley, California where we exist, and the morning fog has not yet burned off...
Khremistokles: But why doesn't anyone expect a return to the "old normal"?
Sokrates: If you can say that we "exist" at all, being simply of figments of Brad DeLong's imagination, as he sits at Espresso Roma, drinking coffee, trying to wake up, writing this dialogue, intermittently watching lectures from the "Reason and Persuasion" MOOC of John Holbo, and waiting for Nicholas Lemann... READ MOAR
in so many respects, as... Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius.... Lower court opinions... as well as a majority of the more than eighty briefs filed in the Supreme Court, have been devoted to a question... whether corporations... can exercise religion in a way protected by the Religious Freedom Restoration Act... that is, at best, a distraction.... Those opinions and briefs also repeatedly mischaracterize the relevant statute and regulations... failed to critically examine the facts.... And, contrary to what the plaintiffs and many lower courts have argued, it is untrue that the government’s compelling interests are undermined by an alleged vast network of exemptions that will leave “millions” of women unprotected....
Nelson Polsby (1934-2007) was one of the more powerful reasons that Berkeley punched and still punches well above its financial weight among universities...
Dan Tompkins's notes on Polsby and McCarthy:
Dan Tompkins: Nelson Polsby's breakout essay: Getting McCarthy Wrong:
This may interest only a few of you. I threw it together for my own purposes and found enough to make it worth exposing to others.
Two Berkeley political scientists, Nelson Polsby and Michael Rogin, did very good analytic work on the question, "who supported McCarthy." Rogin and Polsby are now both, sadly, deceased. Both, each in his own way, took on the established political scientists who blamed McCarthyism on particular social groups. Rogin focused on elite notions that McCarthy had a "mass" or "populist movement." He's very worth reading, but what follows mainly concerns Polsby, who at age 26 published "Towards an Explanation of McCarthyism" in the journal Political Studies 8 (1960).
Ezekiel Emanuel is Vice Provost for Global Initiatives and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania. A breast oncologist with a doctorate in political philosophy, he served for many years as chair of the Department of Bioethics at The Clinical Center of the National Institutes of Health. From 2009 to 2011, he helped to craft the Affordable Care Act (ACA) as a special advisor for health policy to the director of the White House Office of Management and Budget. While serving in that role, Emanuel was the target of one of the most unfounded political attacks I have witnessed in health policy.
If you could only read one book about the American health system and ACA’s valuable (albeit imperfect) contribution to improving that system, his new book Reinventing American Health Care: How the Affordable Care Act will Improve our Terribly Complex, Blatantly Unjust, Outrageously Expensive, Grossly Inefficient, Error Prone System might be the best one.
Noam Levey: In northern Maine, collaboration brings better health - latimes.com: "Many of the nation's healthiest communities are wealthy and have large numbers of college-educated residents.
But northern Maine is among a handful of telling exceptions, making it an important guidepost as the country searches for ways to improve health.... The region now is among America's poorest.... Yet northern Maine ranks high on national measures of health.... Residents of the region receive recommended screenings and medical care more often than other Americans. They suffer fewer complications in nursing homes and are less frequently prescribed risky medications. And they are nearly half as likely to die from preventable diseases as residents of other low-income areas.... Maine's success owes much to the type of care that Patterson typifies — intensely personal, data-driven and highly coordinated. The approach grew out of a decades-long effort by local leaders that many experts consider a model for how to improve community health.
The goal here is to protect people against risk: of unemployment, of health emergency, of outliving one’s savings, and so on. For a risk-mitigation scheme to work, there are a few things that are necessary. One is that people actually be covered. This is something you can never have with a private system (unless it’s regulated to the point of being essentially public), since charities get to pick and choose whom they want to help. As Konczal says of private agencies before the Depression, “They were also concerned they’d lose their ability to stigmatize—or to protect—various populations; by playing a role in determining who wasn’t deserving of assistance, they could shield those they felt worthy of their support.”
Another thing you want is the assurance that the system has the financial capacity to actually protect you in the event of a crisis. That’s why you don’t depend on your neighbors to rebuild your house if it burns down. Besides the fact that they may not like you, they probably don’t have enough money—especially if you lose your house in a fire that burns down the entire neighborhood. As I’ve said many times before, there is no other entity in the country—and not really one in the world—with the financial capacity of the federal government. Even state governments scramble to cut benefits when push comes to shove, which is one reason why some states provide Medicaid coverage to almost no one.
For some reason David Weigel feels like he has to defend PauL Ryan and Bill Bennett:
David Weigel: Paul Ryan accused of racism for suggesting that there's endemic poverty in inner cities.: "ThinkProgress provides the clip, which is—shock—less definitive than the headline.
Ryan says there's a problem "in our inner cities in particular," of "generations of men not even thinking about working." "In particular" is a useful qualifier, isn't it?... Ryan's problem, it seems, is that he's talking about inner cities while being 1) a Republican who is 2) about to unleash poverty legislation heavy on work requirements. If you're a Democrat, you can talk about the inner city in the same way Ryan does.
And so he drives Steve M. into shrill ululating madness:
There is evidence of deep-seated cultural and ethical failures at many large financial institutions....
In 2008... people probably thought that our largest banks were just guilty of shoddy risk management, dubious sales practices, and excessive risk-taking... we’ve had to add price fixing, money laundering, bribery, and systematic fraud on the judicial system....
Framing the problem as a 'trust issue'—customers no longer see banks as trustworthy institutions—is beside the point. Wall Street’s main defense is that its clients already realize that investment banks do not have their buy-side clients’ best interests at heart, and clients who don’t realize that are chumps. And in the wake of the financial crisis, I suspect there are few individuals out there who believe that their banks are there to help them. The banking industry has discovered that it can thrive without trust, which is not surprising; retail depositors trust the FDIC, and bond investors know that trust isn’t part of the equation...
Timothy Noah: Inside Low-wage Workers’ Plan to Sue McDonald’s — and Win: "The wage theft lawsuits filed against McDonald’s last week in New York, Michigan and California threaten to breach a wall that for decades has protected fast-food corporations from the demands of minimum wage workers.
The lawsuits accuse McDonald’s restaurants of various illegal labor practices. Many fast food workers, it’s alleged, have been taken “off the clock” either while working or while waiting on site to start or complete a shift; either way, federal law requires that the workers be compensated for their time. Another allegation is that many of these low-wage workers have gotten the cost of their uniforms deducted from their paychecks, effectively reducing their pay to below the federally or state-mandated minimum wage. Yet another allegation is that many fast food workers have been denied legally-mandated overtime pay. What’s unusual here aren’t the claims of labor law violations, which are common enough, but rather, who’s being blamed. The wall that fast food workers hope to blast through with these class-action suits is the franchise system. All of the lawsuits name McDonald’s itself as a defendant, even though most of the targeted restaurants are owned not by McDonald’s but by McDonald’s franchisees.
And based on a report in the Washington Post, it will look a lot like their old health care proposals—the ones that would have done very little to improve access, reduce financial distress, and contain health care spending. But this new plan would be different in one key respect. Implementing this sort of Republican plan now would probably mean taking away coverage from quite a lot of people who just got it. That’s a pretty big deal.... The interesting question is how Republicans intend to present this plan.... If Republicans intend to repeal the Affordable Care Act and replace it with the framework that Costa's story describes—or even something with a bit more money behind it—a lot of those people are going to lose... insurance altogether. Until this year, taking away Obamacare meant taking away a hypothetical benefit. Now that benefit is real.... But really, the policy details are sort of irrelevant here. Notwithstanding the efforts of a few dedicated intellectuals and a tiny cadre of federal lawmakers, the vast majority of Republican officials have zero interest in health care reforms that significantly increase access to care. The new House Republican plan was supposed to show otherwise. If they actually manage to produce something—this isn’t the first time they’ve promised a proposal wasn’t imminent—and if it looks like the media reports suggest, the plan will merely confirm everybody’s suspicions: Significantly increasing access to health care just isn’t a priority for today’s Republican Party.
Kevin Drum reads Phillip Longman:
and relitigates the question of whether Rick Perry's so-called Texas Miracle is fact or fiction. He concludes that it's mostly fiction, and he makes a good case. Not a bulletproof case, but a good one. What's more, to the extent that Texas really does have a strong economy, he says, it's largely due to fracking, immigration from across the border, and a high birth rate. It's not due to low taxes—at least, not for most Texans:
Washington Center for Equitable Growth | Understanding the Wall Street View of the World–and Why It Doesn’t Change: Monday Focus: March 17, 2014: Let us start with Paul Krugman, commenting on a piece by Noah Smith:
Paul Krugman: Charge of the Right Brigade: “Noah Smith writes about what he calls the ‘finance macro canon’… that money-printing and deficits lead inexorably to runaway inflation, plus assorted other arguments about why easy money is a terrible thing even in a depressed economy… a view that is dominant on much of Wall Street. I’ve had several recent conversations with finance-industry people… who talk with some wonderment about the failure of high inflation and a plunging dollar to materialize, because “all the experts” told them to expect that outcome…. READ MOAR
Mike Konczal: Adolph Reed's Harpers Essay About Obama is Naive: "A Democratic president’s economic agenda is a failure, lost to business class acquiescence, the embrace of austerity, and an overall lack of vision.
This was the conclusion of The New Republic, summarizing Franklin Delano Roosevelt and the New Deal in May 1940.... Though the magazine believed the New Deal did more for the general welfare than any other administration, and even helped shift the ideological space against laissez-faire conservatism, they weren’t sure whether they could say they supported it. “If the New Deal is to deserve our support in the future, it must not rest on what it has already done, great as that is, but tell us how it is going to finish the task.” In other words, being disappointed in Democratic presidents is what opinion editors refer to as “evergreen” content....
a Nobel Prize-winning professor of economics and law at Chapman University in Orange, Calif., concluding that the minimum wage “is a poorly targeted antipoverty measure.”... But the statement itself and the news release heralding the effort made no mention of the fact that the statement had been initiated by staff at the restaurant association, who through an intermediary asked Mr. Smith if it could be distributed under his name, the association and Mr. Smith acknowledged in interviews Friday.
“If that was not made clear, I will apologize for that,” said Sue Hensley, the senior vice president for public affairs at the National Restaurant Association. She said the restaurant association had distributed the statement the way it had because it was technologically the easiest method, not because of any intentional effort to hide the organization’s role.
Ed Kilgore: The Central Flaw in Hobby Lobby’s Suit: "To hear many conservatives and even some liberals, the suit brought by the for-profit company Hobby Lobby seeking relief from the contraception coverage mandate of the Affordable Care Act represents a last line of defense by religious believers (of a certain type, to be sure) against the aggressive secularist agenda of the Obama administration.
Buying into that idea has always required some mental gymnastics. The coverage mandate does not require that employers supply employees with contraceptives. It simply requires that if they provide health insurance it must include coverage for certain preventive procedures, devices and medications, including contraceptives. The employee chooses whether or not to avail herself of this coverage, and no reasonable person would hold the employer morally responsible for that choice, any more than if the employee used her wages to purchase the very same contraceptives, which—lest we forget—are not only legal but are constitutionally protected as legal.
Over at the Washington Center for Equitable Growth: Carter Price: A response to another attack on the Great Gatsby curve—and can we call it the “line to serfdom” instead?: "Scott Winship and Donald Schneider attack the Great Gatsby curve, which illustrates the relationship between economic inequality and mobility....
I propose that we call this relationship the “line to serfdom”... a more accurate description of the high inequality/low mobility relationship.... Let’s first begin with the line to serfdom itself. Figure 1 has the full data set from University of Ottawa economist Miles Corak’s paper, which includes 22 countries instead of the 11 countries included in the Winship and Schneider analysis (it is unclear why they decided to cut half of the countries from their comparison). I used mobility data from Figure 1 of Corak’s paper and Gini data from the World Bank to create Figure 1:
This graph indicates an inverse relationship between inequality in a country and economic mobility between generations.... READ MOAR
Friday, March 14, 2014
4:00 - 5:30 PM
UC Berkeley Labor Center
2521 Channing Way #5555
Berkeley, CA 94720
- Lisa Aliferis - KQED, State of Health blog
- Larry Jacobs - University of Minnesota, Political Science and Public Policy
- Anthony Wright - Health Access California
- Ken Jacobs - UC Berkeley Labor Center
- Margaret Weir - UC Berkeley, Sociology and Political Science
- Charlie Eaton - UC Berkeley, Sociology
Over at the Washington Center for Equitable Growth: The Social Insurance State, Economic Problems of the North Atlantic, Redistribution, and the Lesser Depression: Monday Focus: March 10, 2014: Back in the 1970s and 1980s I was told over and over again–by pundits, right-of-center politicians, political scientists, and not a few economists–that the source of the North Atlantic’s economic problems play in its overly-democratic politics.
The argument went more-or-less like this:
Some voters want goodies; other voters want low taxes; politician satisfy them by expanding programs and cutting taxes, producing debt. The debt must either be amortized through high taxes that discourage investment and entrepreneurship or through printing money which produces inflation and also deranges the price system and slows growth.
Thus, I was told over and over again, the economic problems of the north Atlantic in the 1970s and 1980s–the productivity growth slowdown in the inflation of the 1970s–were the result of an overly-large welfare state produced by an overly-democratic government. Both of these, the argument went, needed to be fixed.
This never seemed to me to make quantitative sense… READ MORE
The caricature of Ryan and people like him is that… they talk big about dignity while ignoring the difficulty of getting essentials like food and health care. Well, it’s not a caricature: Ryan says never mind having enough to eat, it’s about spirituality:
The left is making a big mistake…. What they’re offering people is a full stomach and an empty soul. People don’t just want a life of comfort. They want a life of dignity, they want a life of self determination…
Um, yes, but how dignified can you be on an empty stomach? How much self-determination do you have? And who is supposed to value dignity over having enough to eat? Children…. Affluent politicians have no business lecturing people having trouble buying food or having trouble paying for health care about dignity, is just stunning. READ THE WHOLE THING
January 2, 2008: Did Bob Reich Assassinate Tony Judt's Cat?: I was surprised to read:
'Supercapitalism': An Exchange: Tony Judt: I am surprised that Robert Reich resents my "use" of his book for the expression of some general thoughts on its topic. Taken for itself, after all, Supercapitalism would have merited at best a short notice. However, Reich's letter is welcome all the same. It helpfully reasserts the book's argument; and by its resort to invective—"jeremiad," "screeds," "emotionally gratifying," "capitalist hobgoblins," etc.—-his letter offers an instructive insight into Reich's own thought processes... his critics (me, on this occasion) are dismissed as "denigrators" of economic growth, enemies of capitalist globalization who pave the way for nativism: in short, prole-worshipping nostalgics.... If the Professor of Public Policy at UC Berkeley really thinks that we can improve upon the "cacophony" that passes for public debate with talk of "citizen values" and "leaders who inspire us" and that anything else is "brainless neo-Ludditism," then he is himself a depressing illustration of the problem he purports to address.
This visual evidence of derangement surprised me, because I remembered Tony Judt's Postwar as being rather good--and his books on the post-WWII French intellectuals, Sartre and his circle, as being excellent. And I, at least, quite liked Supercapitalism. Clearly I am going to have to go back and read Judt's review of Reich...
Kevin Drum: Map of the Day: America's Cities Are the Real America | Mother Jones: "You've seen all those Election Day maps that show gigantic swaths of red, suggesting that the vast majority of real America votes conservative.
Well, for your entertainment, here's the flip side. David Atkins passes along the map below, which shows economic activity in the United States. The 25 or so largest urban centers in America account for half of all economic activity.
Not bad for a bunch of pinko elitists, is it?
Thomas Frank: Paul Krugman won’t save us: “When President Obama declared in December that gross inequality is the ‘defining challenge of our time’, he was right, and resoundingly so…. However, he quickly backed away… at the urging of pollsters and various Democratic grandees. I can understand the Democrats’ fears… a throwback to an incomprehensible time…. Unfortunately, they really have no choice. Watching… the bankers steered us into disaster in 2008 and then… harvested the fruits of our labored recovery–these spectacles have forced the nation to rediscover social class…
My thought here is to ask the Tonto question: “Who is this ‘us’, kemosabe?” The nation–with the exception of the top 1%, who understand social class very well–has not rediscovered social class. If the nation had rediscovered social class, “inequality” would poll better and “upward mobility” would poll worse–would be seen as the mess of overdone pottage that it is. I think we would have a healthier politics if the 99% had rediscovered social class. But pretending it has does not make it so. There is a big task of education and analysis ahead. And trashing Paul Krugman is a rather odd exercise to engage in, given that Paul Krugman has been raising the hue-and-cry about the disastrous consequences of rising inequality for America since Thomas Frank was in diapers. READ MORE
The New York Times > Washington > Social Security, Growth and Stock Returns: In barnstorming the country over Social Security, administration officials predict that American economic growth will slow to an anemic rate of 1.9 percent as baby boomers reach retirement. Yet as they extol the rewards of letting people invest some of their payroll taxes in personal retirement accounts, President Bush and his allies assume that stock returns will be almost as high as ever, about 6.5 percent a year after inflation.
George Gordon, Lord Byron: Debate on the 1812 Frame Breaking Act: "My Lords...
The subject now submitted to your Lordships, for the first time, though new to the House, is, by no means, new to the country. I believe it had occupied the serious thoughts of all descriptions of persons long before its introduction to the notice of that Legislature whose interference alone could be of real service. As a person in some degree connected with the suffering county, though a stranger, not only to this House in general, but to almost every individual whose attention I presume to solicit, I must claim some portion of your Lordships' indulgence, whilst I offer a few observations on a question in which I confess myself deeply interested.
Last night pieces by the thoughtful and knowledgeable Uwe Reinhardt, the smart and hard-working Marty Lederman, and that brilliant man of unsound methods Richard Epstein collided on my computer screen, and then held an all-night insomniac hoedown.
This is the result:
Jon Perr: Georgia Republicans are Killing Hospitals--and People: "By now, millions of Americans--most of them in red states-- are growing familiar with the 'coverage gap'.
Thanks to their rejection of the Affordable Care Act's expansion of Medicaid in states they control, GOP leaders are leaving at least five million people in an insurance "dead zone," earning too much to qualify for Medicaid but too little to obtain federal subsidies to purchase coverage... with as many as 17,000 people forecast to needlessly die each year for lack of health insurance. But GOP obstruction won't just kill people in places like Texas, Mississippi and many more. As the case of Georgia shows--where over 600,000 residents will fall into the coverage gap and as many as 1,175 will die this year--Republican policy is killing hospitals, too.... A fourth rural hospital in Georgia is shutting its doors due to a lack of patients who can pay for their medical expenses:
Over at the Washington Center for Equitable Growth: Carter Price: When Measuring Mobility, Location Still Matters: "When the Equality of Opportunity Project released new data on mobility at the end of January the initial headlines focused on the authors’ overarching finding that mobility at the national level had basically stayed the same while inequality had risen over the past half century.
Most... coverage... missed the nuances.... So we decided to... pull those nuances out... [with] five maps that examine changes in local and regional mobility measured by income mobility, college mobility, and a composite mobility measure.... Intergenerational mobility over this period of time in the United States has changed substantially by region.... By several measures... the South and West experienced the highest gains... much of New England, the Rust Belt and upper Midwest saw declines in mobility. But... the South has remained among the lowest... while most of the West started with fairly high mobility and has generally gotten better. READ MORE
C. Northcote Parkinson was the first to identify the phenomenon of "injelitance"--the jealousy that the less-than-competent feel for the capable.
Here we have a classic case from the anthropologists at Savage Mind, who are both positively green with envy at Jared Diamond's ability to make interesting arguments in a striking and comprehensible way, and also remarkably incompetent at critique.
Over at the Washington Center for Equitable Growth: I Am Sorry. What Was Tim Geithner Looking at in January 2008?: Saturday Focus: February 22, 2014: "Steven Perlberg:
Tim Geithner January 2008 FOMC Minutes: “The World Is Still Looking Pretty Good”: “In January 2008–right as the U.S. economy entered a recession–the former Federal Reserve Vice Chairman (and later Treasury Secretary) was still very optimistic….
You know, we have the implausible kind of Goldilocks view of the world, which is it’s going to be a little slower, taking some of the edge off inflation risk, without being so slow that it’s going to amplify downside risks to growth in the United States. That may be too optimistic, but the world still is looking pretty good. Central banks in a lot of places are starting to soften their link to the dollar so that they can get more freedom to direct monetary policy to respond to inflation pressure. That’s a good thing. U.S. external imbalances are adjusting at a pace well ahead of expectations. That’s all good, I think. As many people pointed out, the fact that we don’t have a lot of imbalances outside of housing coming into this slowdown is helpful. There’s a little sign of incipient optimism on the productivity outlook or maybe a little less pessimism that we’re in a much slower structural productivity growth outlook than before. The market is building an expectation for housing prices that is very, very steep. That could be a source of darkness or strength, but some people are starting to call the bottom ahead, and that’s the first time. It has been a long time since we’ve seen any sense that maybe the turn is ahead. It seems unlikely, but maybe they’re right. In the financial markets, I think it is true that there is some sign that the process of repair is starting. Having said that, though, I think it is quite dark still out there…. Like everyone else, we have revised down our growth forecast. We expect very little growth, if any, in the first half of the year before policy starts to bring growth back up to potential....
What was he looking at in January 2008 to say that? READ MORE
This has always struck me as a very bad translation of what Marx is trying to say--that in the German it is infinitely more powerful and effective than what we have here.
Does anybody know of--has anybody made--a better translation?
This sphere that we are deserting, within whose boundaries the sale and purchase of labour-power goes on, is in fact a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity, say of labour-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to, is but the form in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself. The only force that brings them together and puts them in relation with each other, is the selfishness, the gain and the private interests of each. Each looks to himself only, and no one troubles himself about the rest, and just because they do so, do they all, in accordance with the pre-established harmony of things, or under the auspices of an all-shrewd providence, work together to their mutual advantage, for the common weal and in the interest of all.
On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the “Free-trader Vulgaris” with his views and ideas, and with the standard by which he judges a society based on capital and wages, we think we can perceive a change in the physiognomy of our dramatis personae. He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but--a hiding.