University of California Hires India-Based IT Outsourcer, Lays Off Tech Workers (computerworld.com) 618
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Dec 26, 2016 | it.slashdot.org
(computerworld.com) 134
Posted by EditorDavid on Sunday December 25, 2016 @05:05PM from the Bob-Cratchit-vs-Scrooge dept.
ComputerWorld reports:
In early December, Carnival Corp. told about 200 IT employees that the company was transferring their work to Capgemini, a large IT outsourcing firm. The employees had a choice: Either agree to take a job with the contractor or leave without severance. The employees had until the week before Christmas to make a decision about their future with the cruise line.
By agreeing to a job with Paris-based Capgemini, employees are guaranteed employment for six months, said Roger Frizzell, a Carnival spokesman.
"Our expectation is that many will continue to work on our account or placed into other open positions within Capgemini" that go well beyond the six-month period, he said in an email.
Senior IT engineer Matthew Culver told CBS that the requested "knowledge transfer activities" just meant training their own replacements , and "he isn't buying any of it," writes Slashdot reader dcblogs . "After receiving his offer letter from Capgemini, he sent a counteroffer.
It asked for $500,000...and apology letters to all the affected families," signed by the company's CEO. In addition, the letter also demanded a $100,000 donation to any charity that provides services to unemployed American workers. "I appreciate your time and attention to this matter, and I sincerely hope that you can fulfill these terms."
And he's also working directly with a lawyer for an advocacy group that aims to "stop the abuse of H-1B and other foreign worker programs ."
Re:Dear Matthew ( Score: 5 , Insightful) by Anonymous Coward writes: on Sunday December 25, 2016 @06:00PM ( #53553189 )Re:Dear Matthew ( Score: 2 ) by ShanghaiBill ( 739463 ) writes: on Sunday December 25, 2016 @06:13PM ( #53553247 )Foreign workers are willing to do a job at a lower salary in most if not all cases b/c the cost of living in their respective countries is a fraction of ours.
I would be willing to do my job at a fraction of what I am paid currently should that (that being how expensive it is to live here) change. It is equally infuriating to me when American companies use loopholes in our ridiculously complicated tax code to shelter revenues in foreign tax shelters to avoid paying taxes while at the same time benefiting from our infrastructure, emergency services, military, etc..
Its assholes like you that always spout off about free market this or that, about some companies fiduciary responsibilities to it's shareholders blah blah blah... as justification for shitty behavior.
Re:Dear Matthew ( Score: 2 ) by PolygamousRanchKid ( 1290638 ) writes: on Sunday December 25, 2016 @06:33PM ( #53553303 )It is equally infuriating to me when American companies use loopholes in our ridiculously complicated tax code to shelter revenues in foreign tax shelters to avoid paying taxesSo who are you infuriated at? The companies that take advantage of those loopholes, or the politicians that put them there? Fury doesn't help unless it is properly directed. Does your fury influence who you vote for?
... while at the same time benefiting from our infrastructure, emergency services, military, etc.No. Taxes are only sheltered on income generated overseas, using overseas infrastructure, emergency services, etc. I am baffled why Americans believe they have a "right" to tax the sale of a product made in China and sold in France.
Re:Dear Matthew ( Score: 3 ) by fibonacci8 ( 260615 ) writes: on Sunday December 25, 2016 @08:43PM ( #53553777 )I am baffled why Americans believe they have a "right" to tax the sale of a product made in China and sold in France.In a seriously silly Monty Python sketch about taxes, someone mildly suggested:
"I think we should tax foreigners, living abroad."
Kinda sorta the same idea . . .
Re:Dear Matthew ( Score: 5 , Insightful) by Rob Y. ( 110975 ) writes: on Sunday December 25, 2016 @06:37PM ( #53553317 )I suppose it's related to the idea that intellectual property "rights" granted by a country of origin should still have the same benefits and drawbacks when transferred to another country. Or at the very least should be treated as an export at such time a base of operations moves out of country.
Re:Dear Matthew ( Score: 5 , Insightful) by geoskd ( 321194 ) writes: on Sunday December 25, 2016 @07:35PM ( #53553547 )Except that calling, say iOS sales 'generated overseas' when the software was written in the US, using US infrastructure, etc . And the company is making the bogus claim that their Irish subsidiary owns the rights to that software. It's a scam - not a loophole.
Re: ( Score: 2 ) by ShanghaiBill ( 739463 ) writes:It's a scam - not a loophole.They are the same thing. The only way to ensure that there are no tax dodges out there is to simplify the tax code, and eliminate the words: "except", "but", "excluding", "omitting", "minus", "exempt", "without", and any other words to those same effects.
Americans are too stupid to ever vote for a poltiician that states they will raise taxes. This means that either politicians lie, or they actively undermine the tax base. Both of those situations are bad for the majority of americans, but they vote for the same scumbags over and over, and will soundly reject any politician who openly advocates tax increases. The result is a race to the bottom. Welcome to reaping what you sow, brought to you by Democracy(tm).
Re: Dear Matthew ( Score: 2 , Insightful) by Anonymous Coward writes:Except that calling, say iOS sales 'generated overseas' when the software was written in the US, using US infrastructure, etc .
That makes no sense. Plenty of non-American companies develop software in America. Yet only if they are incorporated in America do they pay income tax on their overseas earnings, and it is irrelevant where their engineering and development was done.
It has nothing whatsoever to do with "using infrastructure". It is just an extraterritorial money grab that is almost certainly counterproductive since it incentivizes American companies to invest and create jobs overseas.
Yes, taxes are based on profits. So Google, for instance, makes a bunch of money in the US. Their Irish branch then charges about that much for "consulting" leaving the American part with little to no profits to tax.
Re: ( Score: 2 ) by SwashbucklingCowboy ( 727629 ) writes:
Re:Dear Matthew ( Score: 4 , Insightful) by msauve ( 701917 ) writes: on Sunday December 25, 2016 @07:45PM ( #53553601 )Oh get real. Companies make it appear that nearly all income is generated overseas in order to get around that. It's mostly a scam.
"I am baffled why Americans believe they have a "right" to tax the sale of a product made in China and sold in France."
Because the manufacturing and sales are controlled by a US based company, as is the profit benefit which results. If a US entity, which receives the benefits of US law, makes a profit by any means, why should it not be taxed by the US?
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Mar 29, 2015 | Angry Bear
Noam Scheiber has a hard hitting article on the front page of www.nytimes.com "2016 Candidates and Wealthy Are Aligned on Inequality"
The content should be familiar to AngryBear readers. A majority of Americans are alarmed by high and increasing inequality and support government action to reduce inequality. However, none of the important 2016 candidates has expressed any willingness to raise taxes on the rich. The Republicans want to cut them and Clinton (and a spokesperson) dodge the question.
Rich individuals (who are willing to be interviewed) also express concern about inequality but generally oppose using higher taxes on the rich to fight it. Scheiber is very willing to bluntly state his guess (and everyone's) that candidates are eager to please the rich, because they spend much of their time begging the rich for contributions.
No suprise to anyone who has been paying attention except for the fact that it is on the front page of www.nytimes.com and the article is printed in the business section not the opinion section. Do click the link - it is brief, to the point, solid, alarming and a must read.
I clicked one of the links and found weaker evidence than I expected for Scheiber's view (which of course I share
"By contrast, more than half of Americans and three-quarters of Democrats believe the "government should redistribute wealth by heavy taxes on the rich," according to a Gallup poll of about 1,000 adults in April 2013."
It is a small majority 52% favor and 47% oppose. This 52 % is noticeably smaller than the solid majorities who have been telling Gallup that high income individuals pay less than their fair share of taxes (click and search for Gallup on the page).
I guess this isn't really surprising - the word "heavy" is heavy maaaan and "redistribute" evokes the dreaded welfare (and conservatives have devoted gigantic effort to giving it pejorative connotations). The 52% majority is remarkable given the phrasing of the question. But it isn't enough to win elections, since it is 52% of adults which corresponds to well under 52% of actual voters.
My reading is that it is important for egalitarians to stress the tax cuts for the non rich and that higher taxes on the rich are, unfortunately, necessary if we are to have lower taxes on the non rich without huge budget deficits. This is exactly Obama's approach.
Comments (87)
Jerry Critter
March 29, 2015 10:40 pm
Get rid of tax breaks that only the wealthy can take advantage of and perhaps everyone will pay their fair share. The same goes for corporations.
amateur socialist
March 30, 2015 11:42 am
Of course another way to reduce inequality is to raise wages. Buried way down around paragraph 9 I found this gem: "Forty percent of the wealthy, versus 78 percent of the public, said the government should make the minimum wage "high enough so that no family with a full-time worker falls below the official poverty line."
I'm fine with raising people's taxes by increasing their wages. A story I heard on NPR recently indicated that a single person needs to make about $17-19 an hour to cover most basic necessities nowadays (the story went on to say that most people in that situation are working 2 or more jobs to get enough income, a "solution" that creates more problems with health/stress etc.). A full time worker supporting kids needs more than $20.
You double the minimum wage and strengthen people's rights to organize union representation. Tax revenues go up (including SS contributions btw) and we add significant growth to the economy with the increased purchasing power of workers. People can go back to working 40-50 hours a week and cut back on moonlighting which creates new job opportunities for the younger folks decimated by this so called recovery.
Win Win Win Win. And the poor overburdened millionaires don't have to have their poor tax fee fees hurt.
Mark Jamison, March 30, 2015 8:09 pm
How about if we get rid of the "re" and call it what it is "distribution". The current foundational rules embedded in tax law, intellectual property law, corporate construction law, and other elements of our legal and regulatory system result in distributions that favor those with capital or in a position to seek rents.
This isn't a situation that calls for a Robin Hood who takes from the rich and gives to the poor. It is more a question of how elites have rigged the system to work primarily for them. Democrats cede the rhetoric to the Right when they allow the discussion to be about redistribution. Even talk of inequality without reference to the basic legal constructs that are rigged to create slanted outcomes tend to accepted premises that are in and of themselves false.
The issue shouldn't be rejiggering things after the the initial distribution but creating a system with basic rules that level the opportunity playing field.
coberly, March 30, 2015 11:03 pm
Thank You Mark Jamison!
An elegant, informed writer who says it better than I can.
But here is how I would say it:
Addressing "inequality" by "tax the rich" is the wrong answer and a political loser.
Address inequality by re-criminalizing the criminal practices of the criminal rich. Address inequality by creating well paying jobs with government jobs if necessary (and there is necessary work to be done by the government), with government protection for unions, with government policies that make it less profitable to off shore
etc. the direction to take is to make the economy more fair . actually more "free" though you'll never get the free enterprise fundamentalists to admit that's what it is. You WILL get the honest rich on your side. They don't like being robbed any more than you do.
But you will not, in America, get even poor people to vote to "take from the rich to give to the poor." It has something to do with the "story" Americans have been telling themselves since 1776. A story heard round the world.
That said, there is nothing wrong with raising taxes on the rich to pay for the government THEY need as well as you. But don't raise taxes to give the money to the poor. They won't do it, and even the poor don't want it except as a last resort, which we hope we are not at yet.
urban legend, March 31, 2015 2:07 am
Coberly, you are dead-on. Right now, taxation is the least issue. Listen to Jared Bernstein and Dean Baker: the problem is incomes and demand, and the first and best answer for creating demand for workers and higher wages to compete for those workers is full employment. Minimum wage will help at the margins to push incomes up, and it's the easiest initial legislative sell, but the public will support policies - mainly big-big infrastructure modernization in a country that has neglected its infrastructure for a generation - that signal a firm commitment to full employment.
It's laying right there for the Democrats to pick it up. Will they? Having policies that are traditional Democratic policies will not do the job. For believability - for convincing voters they actually have a handle on what has been wrong and how to fix it - they need to have a story for why we have seem unable to generate enough jobs for over a decade. The neglect of infrastructure - the unfilled millions of jobs that should have gone to keeping it up to date and up to major-country standards - should be a big part of that story. Trade and manufacturing, to be sure, is the other big element that will connect with voters. Many Democrats (including you know who) are severely compromised on trade, but they need to find a way to come own on the right side with the voters.
coberly, March 31, 2015 10:52 am
Robert
i wish you'd give some thought to the other comments on this post.
if you are proposing raising taxes on the rich SO THAT you can cut taxes on the non rich you are simply proposing theft. if you were proposing raising taxes on the rich to provide reasonable welfare to those who need it you would be asking the rich to contribute to the strength of their own country and ultimately their own wealth.
i hope you can see the difference.
it is especially irritating to me because many of the "non rich" who want their taxes cut make more than twice as much as i do. what we are looking at here is simple old fashioned greed just as stupid and ugly among the "non rich" as it is among the rich.
"the poor" in this country do not pay a significant amount of taxes (Social Security and Medicare are not "taxes," merely an efficient way for us to pay for our own direct needs . as long as you call them taxes you play into the hands of the Petersons who want to "cut taxes" and leave the poor elderly to die on the streets, and the poor non-elderly to spend their lives in anxiety and fear-driven greed trying to provide against desperate poverty in old age absent any reliable security for their savings.)
Kai-HK, April 4, 2015 12:23 am
coberly,
Thanks for your well-reasoned response.
You state, 'i personally am not much interested in the "poor capitalist will flee the country if you tax him too much." in fact i'd say good riddance, and by the way watch out for that tarriff when you try to sell your stuff here.'
(a) What happens after thy leave? Sure you can get one-time 'exit tax' but you lose all the intellectual capital (think of Bill Gates, Warren Buffet, or Steve Jobs leaving and taking their intellectual property and human capital with them). These guys are great jobs creators it will not only be the 'bad capitalists' that leave but also many of the 'job creating' good ones.
(b) I am less worried about existing job creating capitalists in America; what about the future ones? The ones that either flee overseas and make their wealth there or are already overseas and then have a plethora of places they can invest but why bother investing in the US if all they are going to do is call me a predator and then seize my assets and or penalise me for investing there? Right? It is the future investment that gets impacted not current wealth per se.
You also make a great point, 'the poor are in the worst position with respect to shifting their tax burden on to others. the rich do it as a matter of course. it would be simpler just to tax the rich there are fewer of them, and they know what is at stake, and they can afford accountants. the rest of us would pay our "taxes" in the form of higher prices for what we buy.'
Investment capital will go where it is best treated and to attract investment capital a market must provide a competitive return (profit margin or return on investment). Those companies and investment that stay will do so because they are able to maintain that margin .and they will do so by either reducing wages or increasing prices. Where they can do neither, their will exit the market.
That is why, according to research, a bulk of the corporate taxation falls on workers and consumers as a pass-on effect. The optimum corporate tax is 0. This will be the case as taxation increases on the owners of businesses and capital .workers, the middle class, and the poor pay it. The margins stay competitive for the owners of capital since capital is highly mobile and fungible.Workers and the poor less so.
But thanks again for the tone and content of your response. I often get attacked personally for my views instead of people focusing on the issue. I appreciate the respite.
K
coberly, April 4, 2015 12:34 pm
kai
yes, but you missed the point.
i am sick of the whining about taxes. it takes so much money to run the country (including the kind of pernicious poverty that will turn the US into sub-saharan africa. and then who will buy their products.
i can't do much about the poor whining about taxes. they are just people with limited understanding, except for their own pressing needs. the rich know what the taxes are needed for, they are just stupid about paying them. of course they would pass the taxes through to their customers. the customers would still buy what they need/want at the new price. leaving everyone pretty much where they are today financially. but the rich would be forced to be grownup about "paying" the taxes, and maybe the politics of "don't tax me tax the other guy" would go away.
as for the sainted bill gates. there are plenty of other people in this country as smart as he is and would be happy to sell us computer operating systems and pay the taxes on their billion dollars a year profits.
nothing breaks my heart more than a whining millionaire.
Kai-HK
April 4, 2015 11:32 pm
Sure I got YOUR point, it just didn't address MY points as put forth in MY original post. And it still doesn't.
More importantly, you have failed to defend YOUR point against even a rudimentary challenge.
K
coberly, April 5, 2015 12:45 pm
kai,
rudimentary is right.
i have read your "points" about sixteen hundred times in the last year alone. made by the ayn rand faithful. it is wearisome.
and i have learned there is no point in trying to talk to true believers.
William Ryan, May 13, 2015 4:43 pm
Thanks again Coberly for your and K's very thoughtful insight. You guys really made me think hard today and I do see your points about perverted capitalism being a big problem in US. I still do like the progressive tax structure and balanced trade agenda better.
I realize as you say that we cannot compare US to Hong Kong just on size and scale alone. Without all the obfuscation going Lean by building cultures that makes people want to take ownership and sharing learning and growing together is a big part of the solution Ford once said "you cannot learn in school what the world is going to do next".
Also never argue with an idiot. They will bring you down to their level then beat you with experience. The only cure for organized greed is organized labor. It's because no matter what they do nothing get done about it. With all this manure around there must be a pony somewhere! "
- A typical voice of American politics is the avoidance of saying anything real on real issues". FDR.
- Rich people pay rich people to tell middle class people to blame poor people
- Earth doesn't matter, people don't matter, even economy doesn't matter . The only thing that matters is R.W. nut bar total ownership of everything.
- I'm sorry I put profits ahead of people, greed above need and the rule of gold above God's golden rules.
- I try to stay away from negative people who have a problem for every solution
- We need capitalism that is based on justice and greater corporate responsibility. I do not speak nor do I comprehend assholian.
- "If you don't change direction , you may end up where you are headed". Lao-Tzu.
- "The true strength of our nation comes not from our arm or wealth but from our ideas". Obama..
Last one.
- "If the soul is left to darkness, sins will be committed. The guilty one is not the one who commits the sins, but the one who caused the darkness". Victor Hugo.
coberly , May 16, 2015 9:57 pm
kai
as a matter of fact i disagree with the current "equality" fad at least insofar as it implies taking from the rich and giving to the poor directly.
i don't believe people are "equal" in terms of their economic potential. i do beleive they are equal in terms of being due the respect of human beings.
i also believe your simple view of "equality" is a closet way of guarantee that the rich can prey upon the poor without interruption.
humans made their first big step in evolution when they learned to cooperate with each other against the big predators.
Jerry Critter, May 17, 2015 12:10 am
it is mildly progressive up to about $75,000 per year where the rate hits 30%. But from there up to $1.542 million the rate only increases to 33.3%.
I call that very flat!
Jerry Critter, May 17, 2015 11:20 am
"i assume there are people in this country who are truly poor. as far as i know they don't pay taxes."
Read my reference and you will see that the "poor" indeed pay taxes, just not much income tax because they don't have much income. You are fixated on income when we should be considering all forms of taxation.
Jerry Critter, May 17, 2015 9:25 pm
Oh Kai, cut the crap. Paying taxes Is nothing like slavery. My oh my, how did we ever survive with a top tax rate of around 90%, nearly 3 times the current rate? Some people would even say that the economy then was pretty great and the middle class was doing terrific. So stop the deflection and redirection. I think you just like to see how many words you can write. Sorry, but history is not on your side.
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Dec 27, 2016 | economistsview.typepad.com
anne :http://gabriel-zucman.eu/files/PSZ2016.pdfDecember, 2016
Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel ZucmanAbstract
This paper combines tax, survey, and national accounts data to estimate the distribution of national income in the United States since 1913. Our distributional national accounts capture 100% of national income, allowing us to compute growth rates for each quantile of the income distribution consistent with macroeconomic growth. We estimate the distribution of both pre-tax and post-tax income, making it possible to provide a comprehensive view of how government redistribution affects inequality.
- Average pre-tax national income per adult has increased 60% since 1980, but we find that it has stagnated for the bottom 50% of the distribution at about $16,000 a year.
- The pre-tax income of the middle class-adults between the median and the 90th percentile-has grown 40% since 1980, faster than what tax and survey data suggest, due in particular to the rise of tax-exempt fringe benefits.
- Income has boomed at the top: in 1980, top 1% adults earned on average 27 times more than bottom 50% adults, while they earn 81 times more today.
- The upsurge of top incomes was first a labor income phenomenon but has mostly been a capital income phenomenon since 2000.
The government has offset only a small fraction of the increase in inequality. The reduction of the gender gap in earnings has mitigated the increase in inequality among adults. The share of women, however, falls steeply as one moves up the labor income distribution, and is only 11% in the top 0.1% today.
Reply Tuesday, December 27, 2016 at 01:09 PM anne -> anne... , December 27, 2016 at 01:13 PMhttp://gabriel-zucman.eu/files/PSZ2016.pdfDecember, 2016
Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel ZucmanIntroduction Income inequality has increased in many developed countries over the last several decades. This trend has attracted considerable interest among academics, policy-makers, and the general public. In recent years, following up on Kuznets' (1953) pioneering attempt, a number of authors have used administrative tax records to construct long-run series of top income shares (Alvaredo et al., 2011-2016). Yet despite this endeavor, we still face three important limitations when measuring income inequality. First and most important, there is a large gap between national accounts-which focus on macro totals and growth-and inequality studies-which focus on distributions using survey and tax data, usually without trying to be fully consistent with macro totals. This gap makes it hard to address questions such as: What fraction of economic growth accrues to the bottom 50%, the middle 40%, and the top 10% of the distribution? How much of the rise in income inequality owes to changes in the share of labor and capital in national income, and how much to changes in the dispersion of labor earnings, capital ownership, and returns to capital? Second, about a third of U.S. national income is redistributed through taxes, transfers, and public good spending. Yet we do not have a good measure of how the distribution of pre-tax income differs from the distribution of post-tax income, making it hard to assess how government redistribution affects inequality. Third, existing income inequality statistics use the tax unit or the household as unit of observation, adding up the income of men and women. As a result, we do not have a clear view of how long-run trends in income concentration are shaped by the major changes in women labor force participation-and gender inequality generally-that have occurred over the last century.
This paper attempts to compute inequality statistics for the United States that overcome the limits of existing series by creating distributional national accounts. We combine tax, survey, and national accounts data to build new series on the distribution of national income since 1913. In contrast to previous attempts that capture less than 60% of US national income- such as Census bureau estimates (US Census Bureau 2016) and top income shares (Piketty and Saez, 2003)-our estimates capture 100% of the national income recorded in the national accounts. This enables us to provide decompositions of growth by income groups consistent with macroeconomic growth. We compute the distribution of both pre-tax and post-tax income. Post-tax series deduct all taxes and add back all transfers and public spending, so that both pre-tax and post-tax incomes add up to national income. This allows us to provide the first comprehensive view of how government redistribution affects inequality. Our benchmark series uses the adult individual as the unit of observation and splits income equally among spouses. We also report series in which each spouse is assigned her or his own labor income, enabling us to study how long-run changes in gender inequality shape the distribution of income.
Distributional national accounts provide information on the dynamic of income across the entire spectrum-from the bottom decile to the top 0.001%-that, we believe, is more accurate than existing inequality data. Our estimates capture employee fringe benefits, a growing source of income for the middle-class that is overlooked by both Census bureau estimates and tax data. They capture all capital income, which is large-about 30% of total national income- and concentrated, yet is very imperfectly covered by surveys-due to small sample and top coding issues-and by tax data-as a large fraction of capital income goes to pension funds and is retained in corporations. They make it possible to produce long-run inequality statistics that control for socio-demographic changes-such as the rise in the fraction of retired individuals and the decline in household size-contrary to the currently available tax-based series.
Methodologically, our contribution is to construct micro-files of pre-tax and post-tax income consistent with macro aggregates. These micro-files contain all the variables of the national accounts and synthetic individual observations that we obtain by statistically matching tax and survey data and making explicit assumptions about the distribution of income categories for which there is no directly available source of information. By construction, the totals in these micro-files add up to the national accounts totals, while the distributions are consistent with those seen in tax and survey data. These files can be used to compute a wide array of distributional statistics-labor and capital income earned, taxes paid, transfers received, wealth owned, etc.-by age groups, gender, and marital status. Our objective, in the years ahead, is to construct similar micro-files in as many countries as possible in order to better compare inequality across countries. Just like we use GDP or national income to compare the macroeconomic performances of countries today, so could distributional national accounts be used to compare inequality across countries tomorrow.
We stress at the outset that there are numerous data issues involved in distributing national income, discussed in the text and the online appendix. First, we take the national accounts as a given starting point, although we are well aware that the national accounts themselves are imperfect (e.g., Zucman 2013). They are, however, the most reasonable starting point, because they aggregate all the available information from surveys, tax data, corporate income statements, and balance sheets, etc., in an standardized, internationally-agreed-upon and regularly improved upon accounting framework. Second, imputing all national income, taxes, transfers, and public goods spending requires making assumptions on a number of complex issues, such as the economic incidence of taxes and who benefits from government spending. Our goal is not to provide definitive answers to these questions, but rather to be comprehensive, consistent, and explicit about what assumptions we are making and why. We view our paper as attempting to construct prototype distributional national accounts, a prototype that could be improved upon as more data become available, new knowledge emerges on who pays taxes and benefits from government spending, and refined estimation techniques are developed-just as today's national accounts are regularly improved....
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Dec 27, 2016 | economistsview.typepad.com
Fred C. Dobbs : December 27, 2016 at 03:37 AMSuicide rates rise after jobs move overseas, study finds
http://www.bostonglobe.com/business/2016/12/26/suicide-rates-rise-after-jobs-move-overseas-new-study-funds/yVhFkZOslgnODKEjTfcDTK/story.html?event=event25
via @BostonGlobe - Deirdre Fernandes - December 27, 2016FALL RIVER - In this struggling industrial city, changes in trade policy are being measured not only in jobs lost, but also in lives lost - to suicide.
The jobs went first, the result of trade deals that sent them overseas. Once-humming factories that dressed office workers and soldiers, and made goods to furnish their homes, stand abandoned, overtaken by weeds and graffiti.
And now there is research on how the US job exodus parallels an increase in suicides. A one percentage point increase in unemployment correlated with an 11 percent increase in suicides, according to Peter Schott, a Yale University economist who coauthored the report with Justin Pierce, a researcher at the Federal Reserve Board.
The research doesn't prove a definitive link between lost jobs and suicide; it simply notes that as jobs left, suicides rose. Workers who lost their jobs may have been pushed over the edge and turned to suicide or drug addiction, lacking financial resources or community connections to get help, the authors suggest.
The research contributes to a growing body of work that shows the dark side of global trade: the dislocation, anger, and despair in some parts of the country that came with the United States' easing of trade with China in 2000. The impact of job losses was greatest in places such as Fall River and other cities in Bristol County, along with rural manufacturing counties in New Hampshire and Maine, vast stretches of the South, and portions of the Rust Belt.
"There are winners and losers in trade," Schott said. "If you go to these communities, you can see the disruptions."
The unemployment rate in Fall River remains persistently high and at 5.5 percent in September was a good two points above the Massachusetts average. Nearly one in three households gets some sort of public assistance.
Opposition to global trade policies became a rallying cry in Donald Trump's campaign, propelling him into the White House with strategic wins in the industrial Midwest and the South. Trump has threatened to impose tariffs on Chinese goods and has bashed recent US trade pacts. ...
Fred C. Dobbs -> Fred C. Dobbs... , December 27, 2016 at 03:41 AM
... Previous trade deals, including the 1994 North American Free Trade Agreement with Canada and Mexico, chipped away at US manufacturing towns. But economists say the decision to normalize relations with China was far more disruptive. Some economists have estimated the United States may have lost at least 1 million manufacturing jobs from 2000 to 2007 due to freer trade with China.Fred C. Dobbs -> Fred C. Dobbs... , December 27, 2016 at 03:55 AMIn Bristol County, which includes Fall River, New Bedford, and Taunton, manufacturing employed nearly a quarter of the workforce in 2000; now it provides jobs for only one in 10 workers.
Most of the manufacturing jobs lost since 2000 are unlikely to return, economists said. Automation has made manufacturing much more specialized, requiring more education and fewer workers, leaving parts of the country struggling to figure out how to reinvent their economies.
"We will probably never have as many manufacturing jobs as we had in 1960," Dunn said. "The question is how do we train workers and provide them opportunities to feel productive. What's clear from the election is an increasing number of people don't have those opportunities or don't feel that those opportunities will be available."
Officials in Fall River and Bristol County said they are trying to provide appropriate training, including computer programming, a prerequisite for many manufacturing jobs.
They also point out there have been recent victories.
- Amazon.com opened a distribution warehouse in Fall River and has been hiring in recent months to fill 500 jobs.
- Companies are eyeing Taunton for its cheaper land, access to highways, and state tax breaks.
- Norwood-based Martignetti Cos., among the state's largest wine and spirits distributors, last year agreed to move its headquarters to a Taunton industrial park.
Mayor Tom Hoye said Taunton has also been more active in recent years, holding community meetings and expanding social services for residents facing distress and drug addiction.
Despite the hits the city and its residents have taken, there is reason to be optimistic about the future, he said.
Jobs are returning, and the county's suicide rate dropped from 13 per 100,000 people in 2014 to 12 per 100,000 in 2015.
"We're reinventing ourselves," Hoye said on a recent morning as he sat in an old elementary school classroom that has served as the temporary mayor's office for several years.
"It's tough to lift yourself out of the hole sometimes. But we're much better off than we were 10 years ago."
'The research doesn't prove a definitiveFred C. Dobbs -> Fred C. Dobbs... , December 27, 2016 at 04:00 AM
link between lost jobs and suicide; it
simply notes that as jobs left,
suicides rose.'Pierce, Justin R., and Peter K. Schott (2016). "Trade Liberalization and Mortality:
Evidence from U.S. Counties," Finance and Economics Discussion Series
2016-094. Washington: Board of Governors of the Federal Reserve Systemhttps://www.federalreserve.gov/econresdata/feds/2016/files/2016094pap.pdf
http://faculty.som.yale.edu/peterschott/files/research/papers/pierce_schott_pntr_20150301.pdf
(Note: The 2nd link is to aFred C. Dobbs -> Fred C. Dobbs... , December 27, 2016 at 04:27 AM
different paper, same authors.)'The Surprisingly Swift Decline
of US Manufacturing Employment'Understanding vulnerability to self-Chris G -> Fred C. Dobbs... , -1
harm in times of economic hardship
and austerity: a qualitative study
M C Barnes, et al.'This is the first UK study of self-harm
among people experiencing economic or
austerity-related difficulties.'December 2015
http://bmjopen.bmj.com/content/6/2/e010131.full.pdf
---
Characteristics of people dying by suicide after job loss, financial difficulties and other economic stressors during a period of recession (2010–2011): A review of coroners׳ records
Caroline Coope, et alJournal of Affective Disorders
Volume 183, 1 - September 2015Suicide rates rise after jobs move overseas, study findsThat's consistent with the GOP's notion of how to most effectively cover health problems: shoveled dirt.
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Dec 27, 2016 | www.nakedcapitalism.com
John k, December 26, 2016 at 2:33 pmSynoia , December 26, 2016 at 2:40 pmDems are the party of the rich and poor.
Really? When did they do something that benefitted the poor?
I would say both parties are for the rich and both do their best to distract their respective base with talk of abortion or race, while neither would like these red meat distractions disappear by being in any solved.
Why do they like these particular distractions? Because the rich don't care about either.
Trump broke the mold by talking about jobs in a meaningful way immigration and exporting factories both boost unemployment, suppressing wages while boosting profits; these topics have been forbidden since Ross Perot spoke of millions of jobs going south on account of Nafta, exactly what happened.
8mm official unemployment. 16mm reduced participation since 2005 in 25-54 age group.
24mm total, not counting part timers that want full time and 10mm fewer voted for dems in 2016 than 2008.
Exactly the same number that voted for Romney voted for trump, so Hillary lost obamas third term not because of a wave of trump racists but because there was somehow dissatisfaction among former dem voters regarding the great jobs program, low cost healthcare, and prosecution of bankers and other elites that drove the economy off the cliff. Granted, nominating the second most unpopular person in America might not guarantee success
Anyway, Trump should say, Thanks, Obama!
John k , December 26, 2016 at 3:23 pm8mm official unemployment. 16mm reduced participation since 2005 in 25-54 age group.
24mm total, not counting part timers that want full timeObama's legacy. Read it and weep.
WheresOurTeddy , December 26, 2016 at 3:29 pmI mis spoke.
Nominating her had risks, but it assured Bernie would not be president, and Bernie was a far greater risk to bankers and the other dem paymasters than trump. Remember, for them it was existential, bernie would have jailed bankers. Trump is one of the oligarchs.
With her nom bankers let out a sigh of relief and could thankfully murmur, 'mission accomplished!'Vatch , December 26, 2016 at 7:12 pmBernie would not be president only if they Bobby Kennedy'd him.
It didn't come to that. They just fixed the primary.
Yves Smith , December 26, 2016 at 10:22 pmIf Sanders had won the Democratic nomination, and he had been "Bobby Kennedy'd", people besides the conspiracy enthusiasts would have started to notice a pattern. Instead, there are millions of people who actually believe that Sanders lost the primaries to Clinton fair and square. Some of us know better. . . .
As for patterns, Trump's nominations for cabinet level offices are showing a pattern: billionaires, hecto-millionaires, overt vassals of the ultra-rich, and at least one (alleged) criminal: Ryan Zinke.
marym , December 26, 2016 at 10:47 pmThe one unambiguously positive feature of Obamacare was Medicaid expansion, which does help the poor.
ambrit , December 27, 2016 at 4:42 amIt does help people, but increased privatization and estate recovery make it not unambiguous.
Cry Shop , December 27, 2016 at 5:36 amTrue. Because of estate recovery, I am doing without medical "insurance" of any kind. As I tell Phyllis, if I get anything serious, just put me in my ragged old canvas chair in the back yard and keep the beer coming until I stop complaining.
This entire Medicade story is curious. I had thought that any self respecting oligarchy would want reasonably powerful clients to buttress the oligarch's power and influence. Instead, the Medicade Oligarchy buys into a "power base" of the poor and disenfranchised. The funds for this complex relationship are supplied, as best as I can discern, by the central government. What will the Medicade Oligarchs do when the "X" Oligarchs cut off or even just restrict the flow of funds from the central government?
ambrit , December 27, 2016 at 5:46 amNot just estate recovery. Loading Medicaid with more claimants, particularly poor, ethnic minority claimants, was a great way to stress it's gonig to need a neo-liberal cure, if the neo-cons don't use the opportunity Obama gave them to out right kill it. Medicaid isn't Medicare, and the retired folks know it. They, the retires, would kill it in a second if they could get an extra $100 per annum in free drugs.
marym , December 27, 2016 at 8:44 amI'm not too sure about the "Retired" "Poor" divide anymore. The two groups are converging and merging. Any animus experienced here would be the result of restriction of total benefits available. In other words, an artificially engineered conflict.
Once the "old folks" realize that they, as a class, are the poor, all bets will be off.marym , December 27, 2016 at 8:50 amOnce the "old folks" actually are poor enough to qualify for Medicaid (dual eligible) they are at risk for being tossed off Medicare into Medicaid managed care .
Tully , December 27, 2016 at 11:41 amNor is Medicare Medicare, in the sense of being a fully public program. Medicare Advantage, Medicare supplemental insurance, and prescription drug insurance are all privatized.
steelhead , December 26, 2016 at 2:59 pmthe funds supplied by the central government. No.
they are supplied by the taxpayers.
That is the system – taxpayers subsidize private sector profits.Nittacci , December 26, 2016 at 3:00 pm43 years. The decline started in 1973, the year I graduated from high school.
grayslady , December 26, 2016 at 5:48 pm"I'm guessing that upwards of 90% of United States voters work for wages"
How is that possible with a 62% labor participation rate? Do you believe unemployed, retired, students and stay-at-home parents don't vote?
ambrit , December 27, 2016 at 4:46 amYes, I had a problem with that phrase, as well; especially as older people (read "retired") are known to have the highest percentage of actual voters. Assuming that the 90% is an overstatement, I don't believe it negates the point that all ages and all races can find common ground on certain issues–Medicare for All being one of those issues. Seniors would definitely get behind an improved Medicare, just as students, unemployed, working poor, and others would support such a sensible universal health care program.
Baldacci , December 26, 2016 at 9:31 pm" sensible universal health care program."
Sensible for whom? For the presently entrenched oligarchs, the system in use now is perfectly sensible.funemployed , December 27, 2016 at 9:34 amOnly 30-35% of the total US population votes in any one election. 90% would be possible.
They old though – retired folks love them some voting. Work or have worked for wages, or had vital domestic labor supported by a wage earning family member would surely get us over 90 IMO. (sorry for quibbling Lambert. I think we all get the point. Thanks for the lovely essay)
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Dec 27, 2016 | economistsview.typepad.com
AngloSaxon : December 26, 2016 at 10:24 PM , 2016 at 10:24 PMIn my opinion, probably not. The government's 20th century "growth as a factory" underestimates service sector growth and our continued share shrink in 20th century industrial production means our "potential" growth is by this factory methiod, in decline. If we grow 3% it is a gaudy number by the government's own statistical backwardness.likbez -> AngloSaxon... , -1To regenerate American factory growth is not possible right now under a market system. I mean, it simply isn't. If we tried, we would crater industrial growth as well with consumption cuts.
Growth of the service sector is also under attack due to increasing "robotization", replacing salaried workers with "perma-temps" and underpaid contractors (Uber) as well as offshoring of help desk and such.What's left? Military Keynesianism ?
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Dec 27, 2016 | economistsview.typepad.com
Jason Nordsell : , November 27, 2016 at 08:02 AMExcellent critique. Establishment Democrats are tone-deaf right now; the state of denial they live in is stunning. I'd like to think they can learn after the shock of defeat is over, but identity politics for non-white, non-male, non-heterosexual is what the Democratic party is about today and has been the last decade or so.bob -> Jason Nordsell... , November 28, 2016 at 03:02 PMThe only way Dems can make any headway by the midterms is if Trump really screws up, which is a tall order even for him. He will pick the low-hanging fruit (e.g., tax reform, Obamacare reform, etc), the economy will continue to recover (which will be attributed to Trump), and Dems will lose even more seats in Congress. And why? Because they refuse to recognize that whites from the middle-class and below are just as disadvantaged as minorities from the same social class.
If white privilege exists at all (its about as silly as the "Jews control the banks and media" conspiracy theories), it exists for the upper classes. Poor whites need help too. And young men in/out of college today are being displaced by women - not because the women have superior academic qualification, but because they are women. I've seen it multiple times firsthand in some of the country's largest companies and universities (as a lawyer, when an investigation or litigation takes place, I get to see everyone's emails, all the way to CEO/board). There is a concerted effort to hire only women and minorities, especially for executive/managerial positions. That's not equality.
That's the effect of incessant Dem propaganda pitting races and sexes against each other. This election exposed the media's role, but its not over. Fortunately, Krugman et al. are showing the Dems are too dumb to figure out why they lost. Hopefully they keep up their stupidity so identity politics can fade into history and we can get back to pursuing equality.
"There is a concerted effort to hire only women and minorities, especially for executive/managerial positions."Jason Nordsell -> bob... , November 29, 2016 at 10:17 AMGoooooolllllllllllllly, gee. Now why would that be? I hope you're not saying there shouldn't be such an effort. This is a good thing. It exactly and precisely IS equality. It may be a bit harsh, but if certain folks continually find ways to crap of women and minorities, then public policies would seem warranted.
Are you seriously telling us that pursuing public policies to curb racial and sexual discrimination are a waste of time?
How, exactly, does your vision of "pursuit of equality" ameliorate the historical fact of discrimination?
You don't make up for past discrimination with discrimination. You make up for it by equal application of the law. Today's young white men are not the cause of discrimination of the 20th century, or of slavery. If you discriminate against them because of the harm caused by other people, you're sowing the seeds of a REAL white nationalist movement. And Democrats' labeling of every Republican president/candidate as a Nazi - including Trump - is desensitizing the public to the real danger created by discriminatory policies that punish [white] children and young adults, particularly boys.Paid Minion -> bob... , December 26, 2016 at 01:29 PMDisplacement of white men by lesser-qualified women and minorities is NOT equality.
So, to make up for the alleged screw job that women and minorities have supposedly received, the plan will be screwing white/hetro/males for the forseeable future. My former employer is doing this very plan, as we speak. Passed over 100 plus males, who have been turning wrenches on airplanes for years, and installed a female shop manager who doesn't know jack-$##t about fixing airplanes. No experience, no certificate......but she has a management degree. But I guess you don't know how to do the job to manage it.Richard -> Jason Nordsell... , November 30, 2016 at 03:45 PMGod forbid somebody have to "pay some dues" before setting them loose as suit trash.
This will not end well.
You had me nodding until the last part.Todd : , November 27, 2016 at 08:46 AMBack when cultural conservatives ruled the roost (not that long ago), they didn't pursue equality either. Rather, they favored (hetero Christian) white men. So hoping for Dem stupidity isn't going to lead to equality. Most likely it would go back to favoring hetero Christian white men.
"...should they find a new standard bearer that can win the Sunbelt states and bridge the divide with the white working class? I tend to think the latter strategy has the higher likelihood of success."Bill -> Todd... , November 27, 2016 at 08:59 AMEasy to say. What would that standard bearer or that strategy look like?
Bernie Sanders was that standard bearer, but Krugman and the Neoliberal establishment Democrats (ie. Super Delegates) decided that they wanted to coronate Clinton. Big mistake that we are now paying for...Bob Salsa -> Bill... , November 28, 2016 at 12:56 PMBasic political math - Sanders would have been eaten alive with his tax proposals by the GOP anti-tax propaganda machine on Trump steroids.dwb : , November 27, 2016 at 10:47 AMHis call to raise the payroll tax to send more White working class hard-earn money to Washington would have made election night completely different - Trump would have still won, it just wouldn't have been a surprise but rather a known certainty weeks ahead.
Evolution of political parties happens organically, through evolution (punctuated equilibrium - like species and technology - parties have periods of stability with some sudden jumps in differentiation).swampwiz -> dwb... , November 28, 2016 at 12:59 AMOld politicians are defeated, new ones take over. The old guard, having been successful in the past in their own niche rarely change.
If Nancy Pelosi is re-elected (highly likely), it will be the best thing to happen to Republicans since Lincoln. They will lose even more seats.
The Coastal Pelosi/Schumer wing is still in power, and it will take decimation at the ballot box to change the party. The same way the "Tea Party" revolution decimated the Republicans and led to Trump. Natural selection at work.
In 1991, Republicans thought they would always win, Democrats thought the country was relegated to Republican Presidents forever. Then along came a new genotype- Clinton. In 2012, Democrats thought that they would always win, and Republicans were thought to be locked out of the electoral college. Then along came a new genotype, Trump.
A new genotype of Democrat will have to emerge, but it will start with someone who can win in flyover country and Texas. Hint: They will have to drop their hubris, disdain and lecturing, some of their anti-growth energy policies, hate for the 2nd amendment, and become more fiscally conservative. They have to realize that *no one* will vote for an increase in the labor supply (aka immigration) when wages are stagnant and growth is anemic. And they also have to appreciate people would rather be free to choose than have decisions made for them. Freedom means nothing unless you are free to make mistakes.
But it won't happen until coastal elites like Krugman and Pelosi have retired.
My vote for the Democratic Tiktaalik is the extraordinarily Honorable John Bel Edwards, governor of Louisiana. The central fact of the election is that Hillary has always been extraordinarily unlikable, and it turned out that she was Nixonianly corrupt (i.e., deleted E-mails on her illegal private server) as well - and she still only lost by 1% in the tipping point state (i.e., according to the current count, which could very well change).bob -> dwb... , November 28, 2016 at 03:09 PMYou know what will win Texas? Demographic change. Economic growth. And it is looking pretty inevitable on both counts.dwb -> bob... , November 28, 2016 at 06:27 PMI'm also pretty damned tired of being dismissed as "elitist", "smug" and condescending. I grew up in a red state. I know their hate. I know their condescension (they're going to heaven, libruls are not).
It cuts both ways. The Dems are going into a fetal crouch about this defeat. Did the GOP do that after 2008? Nope. They dug in deeper.
Could be a lesson there for us.
Smugly your,
Ahh yes, all Texas needs is demographic change, because all [Hispanics, Blacks, insert minority here] will always and forever vote Democrat. Even though the Democrats take their votes for granted and Chicago/Baltimore etc. are crappy places to live with no school choice, high taxes, fleeing jobs, and crime. Even though Trump outperformed Romney among minorities.Jason Nordsell -> bob... , November 29, 2016 at 10:27 AMClinton was supposed to be swept up in the winds of demographics and the Democrats were supposed to win the White House until 2083.
Funny things happen when you take votes for granted. Many urban areas are being crushed by structural deficits and need some Detroit type relief. I predict that some time in the next 30 years, poles reverse, and urban areas are run by Republicans.
If you are tired of being dismissed as "elitist", "smug" and condescending, don't be those things. Don't assume people will vote for your party because they have always voted that way, or they are a certain color. Respect the voters and work to earn it.
The notion that hispanic=democrat that liberals like bob have is hopelessly ignorrant.RJ -> bob... , December 06, 2016 at 11:20 PMI'm from Dallas. Three of my closest friends growing up (and to this day), as well as my brother in law, are hispanic. They, and their families, all vote Republican, even for Trump. Generally speaking, the longer hispanics are in the US, the more likely they tend to vote Republican.
The Democratic Party's plan to wait out the Republicans and let demographics take over is ignorant, racist and shortsighted, cooked up by coastal liberals that haven't got a clue, and will ultimately fail.
In addition to losing hispanics, Democrats will also start losing the African American vote they've been taking for granted the last several decades. Good riddance to the Democratic party, they are simply unwilling to listen to what the people want.
You might be tired of it, but clearly you are elitist, smug, and condescending.Tom : , November 27, 2016 at 11:42 AMOwn it. Fly your freak flag proudly,
This is a really shoddy piece that repeats the medias pulling of Clintons quote out of context. She also said "that other basket of people are people who feel that the government has let them down, the economy has let them down, nobody cares about them, nobody worries about what happens to their lives and their futures, and they're just desperate for change. It doesn't really even matter where it comes from. They don't buy everything he says, but he seems to hold out some hope that their lives will be different. They won't wake up and see their jobs disappear, lose a kid to heroin, feel like they're in a dead-end. Those are people we have to understand and empathize with as well."dwb -> Tom... , November 27, 2016 at 12:07 PMNow maybe it is okay to make gnore this part of the quote because you think calling racism "deplorable" is patently offensive. But when the ignored context makes the same points that Duy says she should have been making, that is shoddy.
There are zero electoral college votes in the State of Denial. Hopefully you understand a)the difference between calling people deplorable and calling *behavior* deplorable; b) Godwin's Law: when you resort to comparing people to Hitler you've lost the argument. Trump supporters were not racist, homophobic, xenophobic, or any other phobic. As a moderate, educated, female Trump supporter counseled: He was an a-hole, but I liked his policies.Nick : , November 27, 2016 at 01:16 PMEven my uber liberal friends cannot tell me what Clinton's economic plan was. Only that they are anti-Trump.
Trump flanked Clinton on the most popular policies (the left used to be the anti-trade party of union Democrats): Lower regulation, lower taxes, pro-2nd amendment, trade deals more weighted in favor of US workers, and lower foreign labor supply. Turn's out, those policies are sufficiently popular that people will vote for them, even when packaged into an a-hole. Trump's anti-trade platform was preached for decades by rust belt unions.
The coastal Democrats have become hostages to pro-big-government municipal unions crushing cities under structural deficits, high taxes, poorly run schools, and overbearing regulations. The best thing that can happen for the Democrats is for the Republicans to push for reforms of public pensions, school choice, and break municipal unions. Many areas see the disaster in Chicago and Baltimore, run by Democrats for decades, and say no thank you. Freed of the need to cater to urban municipal unions, Democrats may be able to appeal to people elsewhere.
Where can you move to for a job when wages are so low compared to rents?Giant_galveston -> Tim C.... , December 05, 2016 at 08:43 PM
The young generations are not happy with house prices or rents as well.
Tim, I believe you've missed the point: by straightforward measures, Democratic voters in USA are substantially under-represented. The problem is likely to get much worse, as the party whose policies abet minority rule now controls all three branches of the federal government and a substantial majority of state governments.Tim C. : , November 27, 2016 at 02:50 PMThis is an outstanding takedown on what has been a never-ending series of garbage from Krugman.dazed and confused : , November 27, 2016 at 02:58 PMI used to hang on every post he'd made for years after the 2008 crisis hit. But once the Clinton coronation arose this year, the arrogant, condescending screed hit 11 - and has not slowed down since. Threads of circular and illogical arguments have woven together pathetic - and often non-liberal - editorials that have driven me away permanently.
Since he's chosen to ride it all on political commentary, Krugman's credibility is right there with luminaries such as Nial Ferguson and Greg Mankiw.
Seems that everyone who chooses to hitch their wagon to the Clintons ends up covered in bilge..... funny thing about that persistent coincidence...
"And it is an especially difficult pill given that the decline was forced upon the white working class.... The tsunami of globalization washed over them....in many ways it was inevitable, just as was the march of technology that had been eating away at manufacturing jobs for decades. But the damage was intensified by trade deals.... Then came the housing crash and the ensuing humiliation of the foreclosure crisis."Jesse : , November 27, 2016 at 04:29 PMAll the more amazing then that Trump pulled out such a squeaker of an election beating Clinton by less than 2% in swing states and losing the popular vote overall. In the shine of Duy's lights above, I would have imagined a true landslide for Trump... Just amazing.
dimknight : , November 27, 2016 at 11:48 PMThe Democratic Establishment and their acolytes are caught in a credibility trap.
"I don't know that the white working class voted against their economic interest".Doug Rife : , November 28, 2016 at 07:17 AMI think you're pushing too hard here. Democrats have been for, and Republicans against many policies that benefit the white working class: expansionary monetary policy, Obamacare, housing refinance, higher minimum wage, tighter worker safety regulation, stricter tax collection, and a host of others.
I also think many Trump voters know they are voting against their own economic interest. The New York Times interviewed a number who acknowledge that they rely on insurance subsidies from Obamacare and that Trump has vowed to repeal it. I know one such person myself. She doesn't know what she will do if Obamacare is repealed but is quite happy with her vote.
There is zero evidence for this theory. It ignores the fact that Trump lied his way to the White House with the help of a media unwilling to confront and expose his mendacity. And there was the media's obsession with Clinton's Emails and the WikiLeaks daily release of stolen DNC documents. And finally the Comey letter which came in the middle of early voting keeping the nation in suspense for 11 days and which was probably a violation of the hatch act. Comey was advised against his unjustified action by higher up DOJ officials but did it anyway. All of these factors loomed much larger than the deplorables comment. Besides, the strong dollar fostered by the FOMC's obsession with "normalization" helped Trump win because the strong dollar hurts exporters like farmers who make up much of the rural vote as well as hurting US manufacturing located in the midwest states. The FOMC was objectively pro Trump.Nate F : , November 28, 2016 at 07:57 AMI was surrounded by Trump voters this past election. Trust me, an awful lot of them are deplorable. My father is extremely anti semetic and once warned me not to go to Minneapolis because of there being "too many Muslims." One of our neighbors thinks all Muslims are terrorists and want to do horrible things to all Christians.Giant_galveston -> Nate F... , December 05, 2016 at 08:38 PMI know, its not a scientific study. But I've had enough one on one conversations with Trump supporters (not just GOP voters, Trump supporters) to say that yes, as a group they have some pretty horrible views.
Yep. I've got plenty of stories myself. From the fact that there are snooty liberals it does NOT follow that the resentment fueling Trump's support is justified.Denis Drew : , November 28, 2016 at 08:41 AMOne should note that the "The racist, sexist, homophobic, xenophobic, Islamaphobic - you name it ... " voted for Obama last time around.Gary Anderson : , November 28, 2016 at 09:47 AMWhen the blue collar voter (for lack of a better class) figures out that the Republicans (Trump) are not going to help them anymore than the Dems did -- it will be time for them to understand they can only rely on themselves, namely: through rebuilding labor union density, which can be done AT THE STATE BY PROGRESSIVE STATE LEVEL.
To keep it simple states may add to federal protections like the minimum wage or safety regs -- just not subtract. At present the NLRB has zero (no) enforcement power to prevent union busting (see Trump in Vegas) -- so illegal labor market muscling, firing of organizers and union joiners go completely undeterred and unrecoursed.
Recourse, once we get Congress back might include mandating certification elections on finding of union busting. Nothing too alien: Wisconsin, for instance, mandates RE-certification of all public employee unions annually.
Progressive states first step should be making union busting a felony -- taking the power playing in our most important and politically impacting market as seriously as taking a movie in the movies (get you a couple of winters). For a more expansive look (including a look at the First Amendment and the fed cannot preempt something with nothing, click here):
http://ontodayspage.blogspot.com/2016/11/first-100-days-progressive-states-agenda.htmlLabor unions -- returned to high density -- can act as the economic cop on every corner -- our everywhere advocates squelching such a variety of unhealthy practices as financialization, big pharam gouging, for profit college fraud (Trump U. -- that's where we came into this movie). 6% private union density is like 20/10 bp; it starves every other healthy process (listening blue collar?).
Don't panic if today's Repub Congress passes national right-to-work legislation. Germany, which has the platinum standard labor institutions, does not have one majority union (mostly freeloaders!), but is almost universally union or covered by union contracts (centralized bargaining -- look it up) and that's what counts.
Trump took both sides of every issue. He wants high and low interest rates. He wants a depression first, (Bannonomics) and inflation first, (Trumponomics), he wants people to make more and make less. He is nasty and so he projected that his opponent was nasty.C Jones : , November 28, 2016 at 10:31 AMNow he has to act instead of just talk out of both sides of his mouth. That should not be as easy to do.
Hi Tim, nice post, and I particularly liked your last paragraph. The relevant question today if you have accepted where we are is effectively: 'What would you prefer - a Trump victory now? Or a Trump type election victory in a decade or so? (with todays corresponding social/economic/political trends continuing).Bob Salsa : , November 28, 2016 at 12:48 PM
I'm a Brit so I was just an observer to the US election but the same point is relevant here in the UK - Would I rather leave the EU now with a (half sensible) Tory government? Or would I rather leave later on with many more years of upheaval and a (probably by then quite nutty) UKIP government?
I know which one I prefer - recognise the protest vote sooner, rather than later.Sure they're angry, and their plight makes that anger valid.Lars : , November 28, 2016 at 05:58 PMHowever, not so much their belief as to who and what caused their plight, and more importantly, who can and how their plight would be successfully reversed.
Most people have had enough personal experiences to know that it is when we are most angry that we do the stupidest of things.
Krugman won his Nobel for arcane economic theory. So it isn't terribly surprising that he spectacularly fails whenever he applies his brain to anything remotely dealing with mainstream thought. He is the poster boy for condescending, smarter by half, elite liberals. In other words, he is an over educated, political hack who has yet to learn to keep his overtly bias opinions to himself.Douglas P Anthony : , November 29, 2016 at 08:16 AMTim's narrative felt like a cold shower. I was apprehensive that I found it too agreeable on one level but were the building blocks stable and accurate?JohnR : , November 29, 2016 at 12:07 PMSomewhat like finding a meal that is satisfying, but wondering later about the ingredients.
But, like Tim's posts on the Fed, they prompt that I move forward to ponder the presentation and offer it to others for their comment. At this time, five-stars on a 1-5 system for bringing a fresh approach to the discussion. Thanks, Professor Duy. This to me is Piketty-level pushing us onto new ground.
Funny how there's all this concern for the people whose jobs and security and money have vanished, leaving them at the mercy of faceless banks and turning to drugs and crime. Sad. Well, let's bash some more on those lazy, shiftless urban poors who lack moral strength and good, Protestant work ethic, shall we?Raven Onthill : , November 29, 2016 at 04:12 PMClinton slammed half the Trump supporters as deplorables, not half the public. She was correct; about half of them are various sorts of supremacists. The other half (she said this, too) made common cause with the deplorables for economic reasons even though it was a devil's bargain.Rick McGahey : , November 30, 2016 at 02:44 PMNow, there's a problem with maternalism here; it's embarrassing to find out that the leader of your political opponents knows you better than you know yourself, like your mother catching you out in a lie. It was impolitic for Clinton to have said this But above all remember that when push came to shove, the other basket made common cause with the Nazis, the Klan, and so on and voted for a rapey fascist.
"Economic development" isn't (and can't) be the same thing as bringing back lost manufacturing (or mining) jobs. We have had 30 years of shifting power between labor and capital. Restoring labor market institutions (both unions and government regulation) and raising the floor through higher minimum wages, single payer health care, fair wages for women and more support for child and elder care, trade policies that care about working families, better safe retirement plans and strengthened Social Security, etc. is key here, along with running a real full employment economy, with a significant green component. See Bob Polllin's excellent program in https://mitpress.mit.edu/books/back-full-employmentSandra Williams : , December 01, 2016 at 12:20 AMThat program runs up against racism, sexism, division, and fear of government and taxation, and those are powerful forces. But we don't need all Trump supporters. We do need a real, positive economic program that can attract those who care about the economics more than the cultural stuff.
How about people of color drop the democrats and their hand wringing about white people when they do nothing about voter suppression!! White fragility is nauseating and I'm planning to arm myself and tell all the people of color I know to do the same. I expect nothing from the democrats going forward.Robert Hurley : , December 01, 2016 at 11:04 AMI have never commented here but I will now because of the number of absurd statements. I happen to work with black and Hispanic youth and have also worked with undocumented immigrants. To pretend that trump and the Republican Party has their interest in mind is completely absurd. As for the white working class, please tell me what programs either trump or the republican have put forward to benefit them? I have lost a lot of respect for DuyGiant_galveston -> Robert Hurley... , December 05, 2016 at 08:32 PMCouldn't agree more.RJ -> Robert Hurley... , December 06, 2016 at 11:26 PMNo one should advocate illegal immigration. If you care about being a nation of laws.[email protected] : , December 01, 2016 at 06:13 PMI think much of appeal of DJT was in his political incorrectness. PC marginalises. Very. Of white working class specifically. it tells one, one cannot rely on one's ideas any more. In no uncertain terms. My brother, who voted for Trump, lost his job to PC without offending on purpose, but the woman in question felt free to accuse him of violating her, with no regard to his fate. He was never close enough to do that. Is that not some kind of McCarthyism?Eclectic Observer : , December 05, 2016 at 10:55 AMJust to be correct. Clinton was saying that half (and that was a terrible error-should have said "some") were people that were unreachable, but that they had to communicate effectively with the other part of his support. People who echo the media dumb-ing down of complex statements are part of the problem.Procopius : , December 05, 2016 at 08:40 PMStill, I believe that if enough younger people and african-americans had come out in the numbers they did for Obama in some of those states, Clinton would have won. Certainly, the media managed to paint her in more negative light than she objectively deserved-- even if she deserved some negatives.
I am in no way a fan of HRC. Still, the nature of the choice was blurred to an egregious degree.
"The tough reality of economic development is that it will always be easier to move people to jobs than the jobs to people."Kim Kaufman : , December 07, 2016 at 10:03 PMThis is indisputable, but I have never seen any discussion of the point that moving is not cost-free. Back in the '90s I had a discussion with a very smart person, a systems analyst, who insisted that poor people moved to wherever the welfare benefits were highest.
I tried to point out that moving from one town to another costs more than a bus ticket. You have to pay to have your possessions transported. You have to have enough cash to pay at least two months' rent and maybe an additional security deposit.
You have to have enough cash to pay for food for at least one month or however long it takes for your first paycheck or welfare check to come in. There may be other costs like relocating your kids to a new school system and maybe changing your health insurance provider.
There probably are other costs I'm not aware of, and the emotional cost of leaving your family and your roots. The fact that some people succeed in moving is a great achievement. I'm amazed it works at all in Europe where you also have the different languages to cope with.
I'm not sure the Hillary non-voters - which also include poor black neighborhoods - were voting against their economic interests. Under Obama, they didn't do well. Many of them were foreclosed on while Obama was giving the money to the banks. Jobs haven't improved, unless you want to work at an Amazon warehouse or for Uber and still be broke. Obama tried to cut social security. He made permanent Bush's tax cuts for the rich. Wars and more wars. Health premiums went up - right before the election. The most Obama could say in campaigning for Hillary was "if you care about my legacy, vote for Hillary." He's the only one that cares about his legacy. I don't know that it's about resentment but about just having some hope for economic improvement - which Trump offered (no matter how shallow and deceptive) and Hillary offered nothing but "Trump's an idiot and I'm not."IHiddenDragon : , December 10, 2016 at 09:01 AMI believe Bernie would have beat Trump's ass if 1) the DNC hadn't put their fingers on the scale for Hillary and 2) same with the media for Hillary and Trump. The Dems need more than some better campaign slogans. They really need a plan for serious economic equality. And the unions need to get their shit together and stop thinking that supporting corrupt corporate Dems is working. Or perhaps the rank and file need to get their shit together and get rid of union bosses.
The keys of the election were race, immigration and trade. Trump won on these points. What dems can do is to de-emphasize multiculturalism, racial equality, political correctness etc. Instead, emphasize economic equality and security, for all working class.IHiddenDragon : , December 10, 2016 at 09:05 AMLincoln billed the civil war as a war to preserve the union, to gain wide support, instead of war to free slaves. Of course, the slaves were freed when the union won the war. Dems can benefit from a similar strategy
Krugman more or less blames media, FBI, Russia entirely for Hillary's loss, which I think is wrong. As Tim said, Dems have long ceased to be the party of the working class, at least in public opinion, for legitimate reasons.Jesse : , December 26, 2016 at 11:08 AMBesides, a lot voters are tired of stale faces and stale ideas. They yearn something new, especially the voters in deep economic trouble.
Maybe it's time to try some old fashioned mercantilism, protectionism? America first is an appealing idea, in this age of mindless globalization.
All Mr. Krugman and the Democratic establishment need to do is to listen, with open ears and mind, to what Thomas Frank has been saying, and they will know where they went wrong and most likely what to do about it, if they can release themselves from their fatal embrace with Big Money covered up by identity politics.c1ue : , December 26, 2016 at 12:11 PMBut they cannot bring themselves to admit their error, and to give up their very personally profitable current arrangement. And so they are caught up in a credibility trap which is painfully obvious to the objective observer.
Pretty sad commentary by neoliberal left screaming at neoliberal right and vice versa.It seems quite clear that the vast majority of commenters live as much in the ivory tower/bubble as is claimed for their ideological opponent.
It is also quite interesting that most of these same commenters don't seem to get that the voting public gets what the majority of it wants - not what every single group within the overall population wants.
The neoliberals with their multi-culti/love them all front men have had it good for a while, now there's a reaction. Deal with it.
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Dec 26, 2016 | economistsview.typepad.com
Lincoln / McKinley tariffs...Economists are still oblivious to the devastation created by 40 years of free trade.pgl -> Lincoln / McKinley tariffs ... , December 26, 2016 at 11:25 AMSomeone needs to buy Paul Krugman a one way ticket to Camden and have him hang around the devastated post-industrial hell scape his policies helped create.
Krugman should be temporarily barred from public discourse until he apologizes for pushing NAFTA and all the rest. Hundreds of millions of people were thrust into dire poverty because of the horrible free trade policies he and 99.9% of US economists pushed.
They have learned nothing and they have forgotten much.
Oh yea - bring on the tariffs which will lead to a massive appreciation of the dollar. Which in turn will lead to massive reductions in US exports. I guess our new troll is short selling Boeing.likbez -> pgl, -1I tend to agree with you. Extremes meet: extreme protectionism is close to extreme neoliberal globalization in the level of devastation, that can occur.But please do not forget that Krugman is a neoliberal stooge and this is much worse then being protectionist. This is close to betrayal of the nation you live it, people you live with, if you ask me.
To me academic neoliberals after 2008 are real "deplorables". And should be treated as such, despite his intellect. There not much honor in being an intellectual prostitute of financial oligarchy that rules the country.
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Dec 26, 2016 | www.nakedcapitalism.com
Posted on December 26, 2016 by Lambert Strether Lambert here: I blame Putin.By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street
Hardly any improvement for individuals since the Great Recession.
When Donald Trump campaigned on how "terrible" the jobs situation was, while the Obama Administration touted the jobs growth since the employment bottom of the Great Recession in 2010, it sounded like they were talking about two entirely different economies at different ends of the world. But they weren't. Statistically speaking, they were both right.
Since 2011, the US economy created 14.6 million "nonfarm payrolls" as defined by the Bureau of Labor Statistics – whether or not they're low-wage or less than full-time jobs. But for individuals, this job market, statistically speaking, looks almost as tough as it was during the Great Recession.
Obviously, a lot of people have found jobs, and some of them have found good jobs since then, and there are a ton of "job openings." But the Census Bureau just told us why the job market is still, to use Trump's term, "terrible" when it released its population estimates for 2016, just before clocking out for the holidays.
According to this report: From the beginning of 2010 – in terms of jobs, the darkest days of the Great Recession – through December 2016, the US "resident population" (not counting overseas-stationed military personnel) grew by 16 million people.
But since the beginning of 2010 through November 2016, nonfarm payrolls grew by only 13.8 million.
Note that in 2010, nonfarm payrolls declined by 900,000, after having plunged by over 5 million in 2009. The first year with growth in nonfarm payrolls was 2011.
The chart below shows this peculiar relationship between the "resident population" of the US (top green line) and nonfarm payrolls (bottom blue line). Both rose. But the bottom line (nonfarm payrolls) didn't rise nearly enough.
The difference between the two is the number of people that are not on nonfarm payrolls. They might be students, unemployed, retirees, or working in a job that the "nonfarm payrolls" do not capture (more on that in a moment). This is reflected by the red line, whose slope should head down in an economy where jobs grow faster than the population:
For the first five years of this seven-year period, the number of people not occupying a job as captured by nonfarm payroll data, kept growing (red numbers), even as the touted jobs growth was kicking in. Why? Because population growth outpaced jobs growth over the five years from 2010 through 2014.
Only in 2015 and 2016 has growth in "nonfarm payrolls" edged past population growth. Those were the only two years since the Great Recession when people on an individual basis actually had improving chances of getting a job.
The nonfarm payrolls data is not a complete measure of the US jobs situation. According to the Bureau of Labor Statistics , it excludes "proprietors, the unincorporated self-employed, unpaid volunteer or family employees, farm employees, and domestic employees. It also excludes military personnel, and employees of a big part of the intelligence community, including the CIA, the NSA, the National Imagery and Mapping Agency, and the Defense Intelligence Agency.
There are many folks who'd contend that this population growth is mostly young people who are not yet in the work force and old people who refuse to die, and that for working age people (say, 18 to 65), the jobs growth has been phenomenal.
But that's not the case. According to the Census report, in 2016, the percentage of people 18 and over grew to 249.5 million, making up 77.2% of the total US population, up from 76.8% in 2015 (247.3 million), and up from 76.2% in 2010! The millennials have moved into adulthood, elbowing each other while scrambling for jobs.
And boomers are not retiring from the working life. Why should they. Many of them are fit and don't want to sit around bored, and many of them have to work because they can't afford to quit working, even if they would like to. So the number of workers 65+ has soared 45% since the end of 2009, from 6.2 million to 9.0 million. So now there are nearly 3 million more of them on nonfarm payrolls than there had been in 2010:
The natural growth rate of the population (births minus deaths) has been declining for years. In 2016, it dropped to 0.38%, a new low. The growth rate from immigration, which fluctuates somewhat with the economy, edged down to 0.31%. So total population growth dropped to a new low of 0.69%. Of note: the natural growth rate via births won't impact the labor force until the babies are young adults. But the vast majority of new immigrants are of working age, and they add to the labor force immediately.
So the number of jobs since 2010 has risen by 13.8 million – which the economists are endlessly touting, along with the even better sounding 14.8 million since 2011. But the population has increased by 16 million since 2010. Most of them are people of working age, jostling for position to grab one of these jobs that would put them on the nonfarm payrolls. And this is why the job market for many individuals is "terrible," as Trump said.
But those might have been the good times. Read Red Flag on Recession Crops up in NY Fed's Coincident Economic Index, first time since November 2009
0 0 0 0 1 1 This entry was posted in Dubious statistics , Guest Post , Politics , The destruction of the middle class on December 26, 2016 by Lambert Strether . About Lambert StretherLambert Strether has been blogging, managing online communities, and doing system administration 24/7 since 2003, in Drupal and WordPress. Besides political economy and the political scene, he blogs about rhetoric, software engineering, permaculture, history, literature, local politics, international travel, food, and fixing stuff around the house. The nom de plume "Lambert Strether" comes from Henry James's The Ambassadors: "Live all you can. It's a mistake not to." You can follow him on Twitter at @lambertstrether. http://www.correntewire.com KK , December 26, 2016 at 5:55 am
Arizona Slim , December 26, 2016 at 6:53 amA population of less than 100 million in 1945 became more than 200 million in 1976 and over 320 million in 2016! Tripling your population in 70 years is a really bad idea. At this rate over a billion US citizens will exist in 2086. There are resource limits to growth. And a car, house, vacation, pension, healthcare,and large family will cease to be possible for all or even the majority. Study how the average Indian or Chinese family live and that albeit with a few bits of technology is the future.
MtnLife , December 26, 2016 at 8:41 amTrue.
But the pro-natalists don't want to hear any discussion of overpopulation. Because of all those inconvenient facts.
TG , December 26, 2016 at 9:54 amA lot of "pro-natalists" are religious fundamentalists who do actually see the population/resource crunch coming for which they are trying to stack the numbers on their team.
jefemt , December 26, 2016 at 10:26 amGood points!
But I think most of the "pro-natalists" are rich people who, more than anything else, want cheap labor. And there is no better way to get cheap labor than to force population growth ever higher.
We are not importing foreign workers because the natives refuse to breed 'enough' children. The natives (of all races) are limiting their family sizes because they are worried about having more children than they can support, just like they did in the great depression. Left to themselves, that would start to tighten up the labor market and produce powerful forces raising wages. But not if we keep forcing ever more foreign workers into the labor pool. Which is of course the whole idea.
Cheap labor uber alles!
Ed , December 26, 2016 at 11:10 am'Merika is the third most populous nation in the world followed by Indonesia, Brazil, Pakistan and Nigeria. Seems to be a mind-jarring fat to most when I bring it up .
sd , December 26, 2016 at 6:29 amAlot of poorer countries in the "developing world" ensured they stayed poorer by letting their population growth get out of control. A big, if not the main, reason for China's economic success since 1975 was in getting its population growth under control, that is a big reason for the contrast between China and India.
Unlike, for example, Japan, the rulers of the United States decided to emulate the developing countries that let their populations expand too much, importing people from the developing world to get the job done.
Larry , December 26, 2016 at 7:35 amInteresting about excluding domestic employees when it would appear there's been a huge surge in nannies as well as home aides since the 1990s.
McWatt , December 26, 2016 at 8:44 amVery true, though most of these positions are by definition crappy jobs.
diptherio , December 26, 2016 at 10:02 amThe key to saving the planet is dealing with population growth.
George Phillies , December 26, 2016 at 8:46 amThe planet can take care of itself. I think you mean "the key to saving ourselves." Also I think consumption patterns of the "global North" are more of a problem than simply population.
Jack , December 26, 2016 at 9:10 amThat resident population number appears to include under-16-year-olds who are in most cases not looking for employment. I have no idea how that number has changed. Ditto, it includes the voluntarily retired.
diptherio , December 26, 2016 at 10:13 amThis article appears to be another argument for immigration. I am very much a progressive liberal, excepting the standard progressive immigration stance that more is better and that illegal immigration is o.k.
What would our job market look like without immigrants, even just legal immigrants?
Between 1970 and 2014, the percentage of foreign-born workers in the civilian labor force more than tripled, from 5 percent to 17 percent. In 2014 immigrants accounted for 17% of the work force; 27.6 million out of 159.5 million. What is that number was cut in half?
The number of US unemployed peaked in 2009 at 15,352,000. Today its 7,400,000 (if you believe the official numbers).
That means if we had cut immigration by just 30% there would be 0 unemployment. Of course this is a simplistic analysis but it is interesting to compare the two. And of course with near 0 unemployment wages would be pushed up.
No wonder the powers that be keep yammering about immigration but never do anything about it. More people in the country willing to work for less money means increased profits for the rich.
Pat , December 26, 2016 at 10:30 amDid you not read the article or simply fail to grasp it? Richter points out that the population has grown faster than the number of jobs and also that immigration is the largest part of that pop. growth (especially the adult population). He nowhere makes an argument for more illegal (or legal) immigration.
On immigration, how about we ask ourselves why it is that so many people are immigrating here and what we might do to discourage them? For instance, a kind of Marshall Plan for Central and South America would probably go a long way, as most people prefer to stay where they are from, if they can make a reasonable life there.
Art Eclectic , December 26, 2016 at 10:46 amCall me crazy, but considering that the Clinton campaign had access to a certain portion of this information, their inability to understand the appeal of Sanders and Trump is clearly delusional.
Certainly the latest data just came out, but some of this about the period until 2014 and even a little after had to be out there. They had to know that until recently there really were not enough jobs to go around, and that there was a good chance that any gains in the last year or so were not enough to remotely cover the deficit up to that point. I get they might not have had the information that beyond not being enough most of the jobs created were part time and benefit free. That doesn't explain not seeing and getting that most Americans have seen little or no recovery.
It appears the DLC Democratic Party must be similar to that narrative driven NY Times environment, you only survive if you embrace the narrative even as the success of the enterprise you are apart loses more and more.
cocomaan , December 26, 2016 at 10:58 am"It is difficult to get a man to understand something, when his salary depends on his not understanding it."
― Upton Sinclair
All career elected politicians on both sides of the aisle are paid to not understand the jobs problem by donors with very large wallets who do not want the jobs problem solved. Follow the money. Who wants cheap labor and what's the best way to get it if you can't offshore operations?
We cannot rebuild the DLC or any leftist party until we figure out how to fund campaigns without donor money that is interested in maintaining the status quo.
Ed , December 26, 2016 at 11:16 amYou can use data points ("14 million jobs created!!!!") to push whatever narrative you want.
Data driven decision making really is just excuse making by outsourcing your choices to endless computer-created pages of data.
Enquiring Mind , December 26, 2016 at 11:13 amI will comment elsewhere, but I keep on hearing arguments on the lines that if only Hillary Clinton had understood the problems of the white working class she would have won or something along these lines.
The Trump and Sanders campaigns were protest vehicles -- and there were precursors in previous elections -- over how the country has been run for the past several decades. Since 1981 either the Clintons or the Bushes have either lived in the White House or held really high ranking positions in the US government.
Members of neither family can credibly run against globalization (or "invade the world/ invite the world" as Steve Sailer puts it) or really other major policies pursued by the US government since the 1980s. They own it.
They have to run on a globalization platform. Hillary Clinton in fact did surprisingly well at the polls, considering this.
There can be types of verbal Marshall Plans, too. Some percentage of the US transient population has self-deported already, although likely not enough to upset the temporary Obama Rush of 1,500+ per day streaming in to claim amnesty prior to January 20th. Announce that undocumented entrants will be turned back, instead of throwing benefits at them, and that will help stem the human tide.
Supplement that with specific policies to aid and abet Mexico and Central American governments in their internal and border control efforts to stop the human tide further south. Publicize those efforts and stick to them.
Both policies would change the dynamic and would allow some degree of US control over its own population growth. Then put in place specific, actionable steps to identify and facilitate thoughtful population growth to meet US needs and to allow for legitimate humanitarian relief instead of bleeding heart efforts that externalized ill-considered policies.
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Dec 26, 2016 | politics.slashdot.org
(reuters.com) 241 Posted by BeauHD on Tuesday December 13, 2016 @10:30PM from the lick-and-a-promise dept. IBM Chief Executive Ginni Rometty has pledged to "hire about 25,000 professionals in the next four years in the United States " as she and other technology executives prepared to meet with President-elect Donald Trump on Wednesday. Reuters reports: IBM had nearly 378,000 employees at the end of 2015, according to the company's annual report. While the firm does not break out staff numbers by country, a review of government filings suggests IBM's U.S. workforce declined in each of the five years through 2015. When asked why IBM planned to increase its U.S. workforce after those job cuts, company spokesman Ian Colley said in an email that Rometty had laid out the reasons in her USA Today piece. Her article did not acknowledge that IBM had cut its U.S. workforce, although it called on Congress to quickly update the Perkins Career and Technical Education Act that governs federal support for vocational education. "We are hiring because the nature of work is evolving," she said. "As industries from manufacturing to agriculture are reshaped by data science and cloud computing, jobs are being created that demand new skills -- which in turn requires new approaches to education, training and recruiting." She said IBM intended to invest $1 billion in the training and development of U.S. employees over the next four years. Pratt declined to say if that represented an increase over spending in the prior four years.
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Dec 26, 2016 | economistsview.typepad.com
Economists might also wince just a bit... Dickens writes: "I know that the unreasonable disciples of a reasonable school, demented disciples who push arithmetic and political economy beyond all bounds of sense (not to speak of such a weakness as humanity), and hold them to be all-sufficient for every case, can easily prove that such things ought to be, and that no man has any business to mind them. Without disparaging those indispensable sciences in their sanity, I utterly renounce and abominate them in their insanity ..." Here's Dickens:
... ... ...
ilsm : , December 25, 2016 at 10:51 AMThings ($) before people. Wrong!likbez : , -1Economists might also wince just a bit... Dickens writes: "I know that the unreasonable disciples of a reasonable school, demented disciples who push arithmetic and political economy beyond all bounds of sense (not to speak of such a weakness as humanity), and hold them to be all-sufficient for every case, can easily prove that such things ought to be, and that no man has any business to mind them. Without disparaging those indispensable sciences in their sanity, I utterly renounce and abominate them in their insanity ..."This is not about insanity, this is about greed.
Reading this I am thinking that Hyman Minsky was a scientist, while Milton Friedman especially just before and after "Capitalism and Freedom" was a well-paid intellectual prostitute of financial oligarchy.
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Dec 23, 2016 | economistsview.typepad.com
Noah Smith:The Case for Protecting Infant Industries : I must say, it's been almost breathtaking to see how fast the acceptable terms of debate have shifted on the subject of trade. Thanks partly to President-elect Donald Trump's populism and partly to academic research showing that the costs of free trade could be higher than anyone predicted, economics commentators are now happy to lambast the entire idea of trade. I don't want to do that -- I think a nuanced middle ground is best. But I do think it's worth reevaluating one idea that the era of economic dogmatism had seemingly consigned to the junk pile -- the notion of infant-industry protectionism. ...DrDick -> pgl...DrDick -> sanjait... , December 22, 2016 at 04:52 PMThe fact remains, however, that every single developed country got there by using protectionist policies to nurture the develop local industries. Protectionism in developed countries does have strongly negative consequences, but it is beneficial for developing economies.
You are exactly right about Japan and I lived through that period. Please name one advanced economy which did not rely on protectionist laws to support domestic industries. All of the European industrial countries did it. The US did it. Japan and Korea did it. China is currently doing it and India has done it.JohnH -> pgl... , -1Japan and other developed countries took advantage of the strong dollar/reserve currency, which provided their industries de facto protection from US exports along with a price umbrella that allowed them export by undercutting prices on US domestic products. The strong dollar was viewed as a strategic benefit to the US, since it allowed former rivals to develop their economies while making them dependent on the US consumer market, the largest in the world. The strong dollar also allowed the US to establish bases and fight foreign wars on the cheap, while allowing Wall Street to buy foreign economies' crown jewels on the cheap.JohnH -> anne... , December 22, 2016 at 05:06 PMNobody cared about US labor or about hollowing out the US economy. Krugman frequently noted that the benefits to investors and 'strategic' considerations for free trade were more important that job losses.
Even pgl's guy, Milton Friedman, recognized that "overseas demand for dollars allows the United States to maintain persistent trade deficits without causing the value of the currency to depreciate or the flow of trade to re-adjust."John San Vant -> JohnH... , -1
https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollarThis extra demand for dollars as a commodity is what drives the price of the dollar higher, leading to the strategic benefits and economic hollowing out that I noted above.
That is because you get a persistent trade surplus in services, which offsets the "Goods" trade deficit. The currency depreciated in the 2000's because said surplus in services began to decline creating a real trade deficit.DrDick -> Mike Sparrow... , December 22, 2016 at 04:57 PManne -> DrDick... , -1"What about the post-industrialization era?"There really is no "post-industrialization era", no matter what fantasies the FIRE sector wants to sell. To the extent there is, the existing global trade agreements (including the WTO, World Bank, IMF, and related organization) accomplish that as well by privileging the position of first world capital.
There really is no "post-industrialization era", no matter what fantasies the Finance, Insurance, and Real Estate sectors want to sell....Greg : , -1[ Interesting assertion. Do develop this further. ]
The Long-Term Jobs Killer Is Not China. It's Automation.anne -> Greg... , December 22, 2016 at 01:08 PM
( http://www.nytimes.com/2016/12/21/upshot/the-long-term-jobs-killer-is-not-china-its-automation.html?ref=economy&_r=0 )1. I'm moderately surprised that this piece hasn't shown up in Links.
2. The Lump of Labor Fallacy is exposed as a fallacy - Sandwichman has been right all along.
3. Infant industry protection won't help in this environment
http://www.nytimes.com/2016/12/21/upshot/the-long-term-jobs-killer-is-not-china-its-automation.htmlGreg -> Greg... , December 22, 2016 at 01:08 PMDecember 21, 2016
The Long-Term Jobs Killer Is Not China. It's Automation.
By Claire Cain Miller
The first job that Sherry Johnson, 56, lost to automation was at the local newspaper in Marietta, Ga., where she fed paper into the printing machines and laid out pages. Later, she watched machines learn to do her jobs on a factory floor making breathing machines, and in inventory and filing.
"It actually kind of ticked me off because it's like, How are we supposed to make a living?" she said. She took a computer class at Goodwill, but it was too little too late. "The 20- and 30-year-olds are more up to date on that stuff than we are because we didn't have that when we were growing up," said Ms. Johnson, who is now on disability and lives in a housing project in Jefferson City, Tenn.
Donald J. Trump told workers like Ms. Johnson that he would bring back their jobs by clamping down on trade, offshoring and immigration. But economists say the bigger threat to their jobs has been something else: automation.
"Over the long haul, clearly automation's been much more important - it's not even close," said Lawrence Katz, an economics professor at Harvard who studies labor and technological change. No candidate talked much about automation on the campaign trail. Technology is not as convenient a villain as China or Mexico, there is no clear way to stop it, and many of the technology companies are in the United States and benefit the country in many ways.
Mr. Trump told a group of tech company leaders last Wednesday: "We want you to keep going with the incredible innovation. Anything we can do to help this go along, we're going to be there for you."
Andrew F. Puzder, Mr. Trump's pick for labor secretary and chief executive of CKE Restaurants, extolled the virtues of robot employees over the human kind in an interview with Business Insider in March. "They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex or race discrimination case," he said.
Globalization is clearly responsible for some of the job losses, particularly trade with China during the 2000s, which led to the rapid loss of 2 million to 2.4 million net jobs, according to research by economists including Daron Acemoglu and David Autor of M.I.T.
People who work in parts of the country most affected by imports generally have greater unemployment and reduced income for the rest of their lives, Mr. Autor found in a paper published in January. Still, over time, automation has had a far bigger effect than globalization, and would have eventually eliminated those jobs anyway, he said in an interview. "Some of it is globalization, but a lot of it is we require many fewer workers to do the same amount of work," he said. "Workers are basically supervisors of machines."
When Greg Hayes, the chief executive of United Technologies, agreed to invest $16 million in one of its Carrier factories as part of a Trump deal to keep some jobs in Indiana instead of moving them to Mexico, he said the money would go toward automation.
"What that ultimately means is there will be fewer jobs," he said on CNBC....
Clarification of 3: that is, infant industry protection as traditionally done, i.e. "picking winners", won't help. What would help is structural changes that make things relatively easier for small enterprises and relatively harder for large ones.anne -> Greg... , December 22, 2016 at 01:09 PMMaking direct lobbying of state and federal politicians by industry groups and companies a crime punishable by 110% taxation of net income on all the participants would be a start.
http://cepr.net/blogs/beat-the-press/what-s-different-about-stagnating-wages-for-workers-without-college-degreesPeter K. : , -1December 21, 2016
What's Different About Stagnating Wages for Workers Without College Degrees
There seems to be a great effort to convince people that the displacement due to the trade deficit over the last fifteen years didn't really happen. The New York Times contributed to this effort with a piece * telling readers that over the long-run job loss has been primarily due to automation not trade.
While the impact of automation over a long enough period of time certainly swamps the impact of trade, over the last 20 years there is little doubt that the impact of the exploding trade deficit has had more of an impact on employment. To make this one as simple as possible, we currently have a trade deficit of roughly $460 billion (@ 2.6 percent of GDP). Suppose we had balanced trade instead, making up this gap with increased manufacturing output.
Does the NYT want to tell us that we could increase our output of manufactured goods by $460 billion, or just under 30 percent, without employing more workers in manufacturing? That would be pretty impressive. We currently employ more than 12 million workers in manufacturing, if moving to balanced trade increase employment by just 15 percent we would be talking about 1.8 million jobs. That is not trivial.
But this is not the only part of the story that is strange. We are getting hyped up fears over automation even at a time when productivity growth (i.e. automation) has slowed to a crawl, averaging just 1.0 percent annually over the last decade. The NYT tells readers:
"Over time, automation has generally had a happy ending: As it has displaced jobs, it has created new ones. But some experts are beginning to worry that this time could be different. Even as the economy has improved, jobs and wages for a large segment of workers - particularly men without college degrees doing manual labor - have not recovered."
Hmmm, this time could be different? How so? The average hourly wage of men with just a high school degree was 13 percent less in 2000 than in 1973. ** For workers with some college it was down by more than 2.0 percent. In fact, stagnating wages for men without college degrees is not something new and different, it has been going on for more than forty years. Hasn't this news gotten to the NYT yet?
* http://www.nytimes.com/2016/12/21/upshot/the-long-term-jobs-killer-is-not-china-its-automation.html
** http://www.stateofworkingamerica.org/chart/swa-wages-table-4-15-hourly-wages-men-education/
-- Dean Baker
http://jaredbernsteinblog.com/inequality-technology-globalization-and-the-false-assumptions-that-sustain-current-inequities/Peter K. : , -1Inequality, technology, globalization, and the false assumptions that sustain current inequities
by Jared Bernstein
December 22nd, 2016 at 3:24 pm
Here's a great interview* with inequality scholar Branko Milanovic wherein he brings a much-needed historical and international perspective to the debate (h/t: C. Marr). Many of Branko's points are familiar to my readers: yes, increased trade has upsides, for both advanced and emerging economies. But it's not hard to find significant swaths hurt by globalization, particularly workers in rich economies who've been placed into competition with those in poorer countries. The fact that little has been done to help them is one reason for president-elect Trump.
As Milanovic puts it:
"The problems with globalization arise from the fact that gains from it are not (and can never be) evenly distributed. There would be always those who gain less than some others, or those who lose even in absolute terms. But to whom can they "appeal" for redress? Only to their national governments because this is how the world is politically organized. Thus national governments have to engage in "mop up" operations to fix the negative effects of globalization. And this they have not done well, led as they were by the belief that the trickle-down economics will take care of it. We know it did not."
But I'd like to focus on a related point from Branko's interview, one that gets less attention: the question of whether it was really exposure to global trade or to labor-saving technology that is most responsible for displacing workers. What's the real problem here: is it the trade deficit or the robots?
Branko cogently argues that "both technological change and economic polices responded to globalization. The nature of recent technological progress would have been different if you could not employ labor 10,000 miles away from your home base." Their interaction makes their relative contributions hard to pull apart.
I'd argue that the rise of trade with China, from the 1990s to the 2007 crash, played a significant role in moving US manufacturing employment from its steady average of around 17 million factory jobs from around 1970 to 2000, to an average today that's about 5 million less (see figure below; of course, manufacturing employment was falling as a share of total jobs over this entire period).
....
* https://newrepublic.com/article/139432/understand-2016s-politics-look-winners-losers-globalization
market monetarist Scott Sumner makes a good point about the post-war years.If Economists hadn't ignored US and World Economic History they would have had a clue : , December 22, 2016 at 07:53 PMhttp://www.themoneyillusion.com/?p=32214
Do current account deficits cost jobs
Over at Econlog I have a post that suggests the answer is no, CA deficits do not cost jobs.
But suppose I'm wrong, and suppose they do cost jobs. In that case, trade has been a major net contributor to American jobs during the 21st century, as our deficit was about 4% of GDP during the 2000 tech boom, and as large as 6% of GDP during the 2006 housing boom. Today it is only 2.6% of GDP. So if you really believe that rising trade deficits cost jobs, you'd be forced to believe that the shrinking deficits since 2000 have created jobs.
So why have manufacturing jobs plummeted since 2000? One answer is that the current account deficit is the wrong figure, since it also includes our surplus in trade in services. If you just look at goods, the deficit is closer to 4.2% of GDP.
But even that doesn't really explain very much, because it's slightly lower than the 4.35% of GDP trade deficit in goods back in 2000. So again, the big loss of manufacturing jobs is something of a mystery. Yes, we import more goods than we used to, but exports of goods have risen at about the same rate since 2000. So why does it seem like trade has devastated our manufacturing sector?
Perhaps because trade interacts with automation. Not only do we lose jobs in manufacturing to automation, but trade leads us to re-orient our production toward goods that use relatively less labor (tech, aircraft, chemicals, farm produces, etc.), while we import goods like clothing, furniture and autos.
So trade and automation are both parts of a bigger trend, Schumpeterian creative destruction, which is transforming big areas of our economy. It's especially painful as during the earlier period of automation (say 1950-2000) the physical output of goods was still rising fast. So the blow of automation was partly cushioned by a rise in output. (Although not in the coal and steel industries!) Since 2000, however, we've seen slower growth in physical output for a number of reasons, including slower workforce growth, a shift to a service economy, and a home building recession (which normally absorbs manufactured goods like home appliances, carpet, etc.) We are producing more goods than ever, but with dramatically fewer workers.
Update: Steve Cicala sent me a very interesting piece on coal that he had published in Forbes. Ironically, environmental regulations actually helped West Virginia miners, by forcing utilities to install scrubbers that cleaned up emissions from the dirtier West Virginia coal. (Wyoming coal has less sulfur.) He also discusses the issue of competition from natural gas.
The historical record is totally unambiguous. Protectionism always leads to wealth and industrial development. Free trade leads you to the third world. This was true four hundred years ago with mercantilist England and the navigation acts; it was true with Lincoln's tariffs in the 1860's, it was true of East Asia post 1945.Peter K. : , -1Economists better abandon silly free trade if they want to have any credibility and not be seen as quacks.
http://www.cnn.com/2016/12/21/politics/donald-trump-tariffs/likbez : , December 23, 2016 at 08:25 AMTrump team floats a 10% tariff on imports
By John King and Jeremy Diamond, CNN
Updated 3:57 PM ET, Thu December 22, 2016
Washington (CNN)President-elect Donald Trump's transition team is discussing a proposal to impose tariffs as high as 10% on imports, according to multiple sources.
A senior Trump transition official said Thursday the team is mulling up to a 10% tariff aimed at spurring US manufacturing, which could be implemented via executive action or as part of a sweeping tax reform package they would push through Congress.
Incoming White House Chief of Staff Reince Priebus floated a 5% tariff on imports in meetings with key Washington players last week, according to two sources who represent business interests in Washington. But the senior transition official who spoke to CNN Thursday on the condition of anonymity said the higher figure is now in play.
Such a move would deliver on Trump's "America First" campaign theme, but risks drawing the US into a trade war with other countries and driving up the cost of consumer goods in the US. And it's causing alarm among business interests and the pro-trade Republican establishment.
The senior transition official said the transition team is beginning to find "common ground" with House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady, pointing in particular to the border adjustment tax measure included in House Republicans' "Better Way" tax reform proposal, which would disincentivize imports through tax policy.
Aides to Ryan and Brady declined to say they had "common ground" with Trump, but acknowledged they are in deep discussions with transition staffers on the issue.
Curbing free trade was a central element of Trump's campaign. He promised to rip up the North American Free Trade Agreement with Mexico and Canada. He also vowed to take a tougher line against other international trading partners, almost always speaking harshly of China but often including traditional US allies such as Japan in his complaint that American workers get the short end of the stick under current trade practices.
Gulf with GOP establishment
It is an area where there is a huge gulf between Trump's stated positions and traditional GOP orthodoxy. Business groups and GOP establishment figures -- including Ryan and Senate Majority Leader Mitch McConnell -- have been hoping the transition from the campaign to governing would bring a different approach.
Ryan did signal in a CNBC interview earlier this month that Trump's goals of spurring US manufacturing could be accomplished through "comprehensive tax reform."
"I'll tell him what I've been saying all along, which is we can get at what he's trying to get at better through comprehensive tax reform," Ryan said.
The pro-business GOP establishment says the new Trump administration could make clear it would withdraw from NAFTA unless Canada and Mexico entered new talks to modernize the agreement to reflect today's economy. That would allow Trump to say he kept a promise to make the agreement fairer to American workers without starting a trade war and exacerbating tensions with America's neighbors and vital economic partners.
But there remain establishment jitters that Trump, who views his tough trade message as critical to his election victory, will look for ways to make an early statement that he is serious about reshaping the trade playing field.
And when Priebus told key Washington players that the transition is mulling a 5% tariff on imports, the reaction was one of fierce opposition, according to two sources who represent business interests in Washington and spoke on condition of anonymity because the conversations with the Trump team were confidential.
Priebus, the sources said, was warned such a move could start trade wars, anger allies, and also hurt the new administration's effort to boost the rate of economic growth right out of the gate.
Role of Wilbur Ross
One of the sources said he viewed the idea as a trial balloon when first raised, and considered it dead on arrival given the strong reaction in the business community -- and the known opposition to such protectionist ideas among the GOP congressional leadership.
But this source voiced new alarm Tuesday after being told by allies within the Trump transition that defending new tariffs was part of the confirmation "murder board" practice of Wilbur Ross, the President-elect's choice for commerce secretary.
At least one business community organization is worried enough about the prospect of the tariff it already has prepared talking points, obtained by CNN Wednesday night.
"This $100 billion tax on American consumers and industry would impose heavy costs on the US economy, particularly for the manufacturing sector and American workers, with highly negative political repercussions," according to the talking points. "Rather than using a trade policy sledgehammer that would inflict serious collateral damage, the Trump administration should use the scalpel of US trade remedy law to achieve its goals."
The talking points also claim the tariffs would lead to American job loss and result in a tax to consumers, both of which would harm the US economy.
Trump aides have signaled that Ross is likely to be a more influential player in trade negotiations than recent Commerce secretaries. Given that, the aides know his confirmation hearings are likely to include tough questioning -- from both Democrats and Republicans -- about Trump's trade-related campaign promises.
"The way it was cast to me was that (Trump) and Ross are all over it," said one source. "It is serious."
The second source was less certain about whether the tariff idea was serious or just part of a vigorous debate about policy options. But this source said the unpredictability of Trump and his team had the business interests nervous.
The business lobbying community is confident the GOP leadership would push back on any legislative effort to impose tariffs, which organizations like the Chamber of Commerce, the Business Roundtable, the National Association of Manufactures and others, including groups representing farmers, believe would lead to retaliation against US industries heavily dependent on exports.
But the sources aligned with those interests told CNN the conversation within the Trump transition includes using executive authority allowed under existing trade laws. Different trade laws enacted over the course of the past century allow the president to impose tariffs if he issues a determination the United States is being subjected to unfair trade practices or faces an economic or national security threat because of trade practices.
There are industries that are closely connected with the sovereignty of the country. That's what neoliberals tend to ignore as they, being closet Trotskyites ("Financial oligarchy of all countries unite!" instead of "Proletarian of all countries unite!" ;-) do not value sovereignty and are hell bent on the Permanent Neoliberal Revolution to bring other countries into neoliberal fold (in the form of color revolutions, or for smaller countries, direct invasions like in Iraq and Libya ).For example, if you depends of chips produced outside the country for your military or space exploration, then sabotage is possible (or just pure fraud -- selling regular ships instead of special tolerant to cosmic radiation or harsh conditions variant; actually can be done with the support of internal neoliberal fifth column).
The same is probably true for cars and auto engines. If you do not produce domestically a variety at least some domestic brans of cars and trucks, your military trucks and engines will be foreign and that will cost you tremendous amount of money and you might depend for spare parts on you future adversary. Also such goods are overprices to the heaven. KAS is a clear example of this as they burn their money in the war with Yemen as there is no tomorrow making the US MIC really happy.
So large countries with say over 100 million people probably need to think twice before jumping into neoliberal globalization bandwagon and relying in imports for strategically important industries.
Neoliberal commenters here demonstrate complete detachment from the fact that like war is an extension of politics, while politics is an extension of economics. For example, denying imports can and is often used for political pressure.
That was one of factors that doomed the USSR. Not that the system has any chance -- it was doomed after 1945 as did not provide for higher productivity then advanced capitalist economies.
But this just demonstrates the power of the US sanctions mechanism. Economic sanctions works and works really well. The target country is essentially put against the ropes and if you unprepared you can be knocked down.
For example now there are sanctions against Russia that deny them advanced oil exploration equipment. And oil is an important source of Russia export revenue. So the effect of those narrow prohibitions multiples by factor of ten by denying Russia export revenue.
That's how an alliance between Russia and China was forged by Obama administration. because China does produce some of this equipment now. And Russia paid dearly for that signing huge multi-year deals with China on favorable for China terms.
Now Trump want to play this game selectively designating China as "evil empire" and providing a carrot for Russia. Will it works, or Russia can be wiser then donkeys, I do not know.
And look what countries are on the USA economic sanctions list: many entries are countries that are somewhat less excited about the creation of the global neoliberal empire led by the USA. KAS and Gulf monarchies are not on the list. So much about "spreading democracy".
The US propagandists usually call counties on which they impose sanction authoritarian dictatorships to make such actions more politically correct, but the fact remains: The USA as a global hegemon enjoys using economic pressure to crush dissidents and put vassals in line.
The problem with tariffs on China is an interesting reversion of the trend: manufacturing is already in China and to reverse this process now is an expensive proposition. So alienating Chinese theoretically means that some of USA imports might became endangered, despite huge geopolitical weight of the USA. They denied export of rare metals to Japan in the past. They can do this for Apple and without batteries Apple can just fold.
Also it is very easy to prohibit Apple sales in China of national security grounds (any US manufacturer by definition needs to cooperate with NSA and other agencies). I think some countries already prohibit the use of the USA companies produced cell phones for government officials.
So if Trump administration does something really damaging, for Chinese there are multiple ways to skin the cat. Neoliberalism as a social system is past it pinnacle and that creates some problems for the USA as the central player in the neoliberal world. The triumphal march of neoliberalism over the globe ended almost a decade ago.
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Dec 23, 2016 | www.zerohedge.com
Just over six years ago, in December of 2010, we wrote " Charting America's Transformation To A Part-Time Worker Society ", in which we predicted - and showed - that in light of the underlying changes resulting from the second great depression, whose full impacts remain masked by trillions in monetary stimulus and soon, perhaps fiscal, America is shifting from a traditional work force, one where the majority of new employment is retained on a full-time basis, to a "gig" economy, where workers are severely disenfranchised, and enjoy far less employment leverage, job stability and perks than their pre-crash peers. It also explains why despite the 4.5% unemployment rate, which the Fed has erroneously assumed is indicative of job market at "capacity", wage growth not only refuses to materialize, but as we showed yesterday, the growth in real disposable personal income was the lowest since 2014 .When we first penned our article, it was dubbed "fringe" tinfoil hattery, or in the latest vernacular, "fake news."
Fast forward 6 years, when a report by Harvard and Princeton economists Lawrence Katz and Alan Krueger , confirms exactly what we warned. In their study, the duo show that from 2005 to 2015, the proportion of Americans workers engaged in what they refer to as "alternative work" soared during the Obama era, from 10.7% in 2005 to 15.8% in 2015. Alternative, or "gig" work is defined as "temporary help agency workers, on-call workers, contract company workers, independent contractors or freelancers", and is generally unsteady, without a fixed paycheck and with virtually no benefits.
The two economists also found that each of the common types of alternative work increased from 2005 to 2015-with the largest changes in the number of independent contractors and workers provided by contract firms, such as janitors that work full-time at a particular office, but are paid by a janitorial services firm.
Krueger, who until 2013 was also the top White House economist serving as chairman of the Council of Economic Advisers under Obama, was "surprised" by the finding.
Quoted by quartz , he said " We find that 94% of net job growth in the past decade was in the alternative work category ," said Krueger. "And over 60% was due to the [the rise] of independent contractors, freelancers and contract company workers." In other words, nearly all of the 10 million jobs created between 2005 and 2015 were not traditional nine-to-five employment.
While the finding is good news for some, such as graphic designers and lawyers who hate going to an office, for whom new technology and Obamacare has made it more appealing to become an independent contractor. But for those seeking a steady administrative assistant office job, the market is grim. It also explains why despite an apparent recovery in the labor market, wage growth has been non-existant, due to the lack of career advancement and salary increase options for this vast cohort which was hired over the past decade.
The decline of conventional full-time work has impacted every demographic. Whether this change is good or bad depends on what kinds of jobs people want. " Workers seeking full-time, steady work have lost," said Krueger. He then added, perhaps sarcastically, that "while many of those who value flexibility and have a spouse with a steady job have probably gained."
Yes, well, spousal support aside, it also confirms another troubling finding this website reported first earlier this month, namely that the number of multiple jobholders has recently hit the highest number this century.
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Dec 21, 2016 | economistsview.typepad.com
DeDude -> jonny bakho... December 20, 2016 at 07:40 AMAt some point the GOP has to decide how much of Trump's populist agenda they can stuff in the toilet without inducing an uncontrollable backlash.The reason Trump won the GOP nomination was exactly because he claimed to reject traditional GOP policies and approaches. It was the old tea-partiers insisting that their anti-rich/Anti-Wall street sentiments be inserted into the GOP.
If the GOP just go ahead with a traditional "rule for the rich" policy (because they won) there could be serious fireworks ahead - provided the Dems can pull out a populist alternative policy by the the next election.
Peter K. -> DeDude... , December 20, 2016 at 07:56 AM
hey, a good comment!JohnH -> DeDude... , December 20, 2016 at 08:04 AMI have no idea what's going to happen, but my guess is that Trump and the Republicans are going to completely sell out the "Trump voters."
George W. Bush wasn't completely horrible (besides Iraq, John Roberts, tax cuts for the rich, the Patriot act and the surveillance state, Katrina, etc. etc. etc.). He was good on immigration, world AIDS prevention, expensive Medicare drug expansion, etc.
But they still tried to push through Social Security privatization even though everyone is against it.
To some extent Bush demoralized the Republican base and they didn't turn out in 2008.
If recent history is any guide, incumbents get a second term regardless of how bad the economy is. Clinton, Bush, and Obama were all reelected despite a lousy economy. The only exception in recent memory was Bush 41.DrDick -> DeDude... , December 20, 2016 at 08:18 AMAbout the only thing that can derail Trump is a big recession in 2019.
"The reason Trump won the GOP nomination was exactly because he claimed to reject traditional GOP policies and approaches."DeDude -> DrDick... , December 20, 2016 at 08:35 AMWhile generally enthusiastically embracing them. Upper class tax cuts were central to his policies. Anybody who believed he was anything other than an standard issue Republican would buy shares in Arizona swampland.
He never came out directly saying or tweeting that he would give bigger tax cuts to the rich than anybody else - he said he would give bigger tax cuts. It is true that people with a college education had an easy time figuring him out even before the election. But the populist messages he campaigned on were anti-establishment including suggesting that the "hedge-fund guys" were making a killing by being taxed at a lower rate.yuan -> DeDude... , December 20, 2016 at 10:00 AMtrump did indeed state that he would give bigger tax cuts to the rich, repeatedly. the genius of trump's performance is that by never having a clear position his gullible followers were able to fill in the gaps using their own hopes and desires.DeDude -> yuan... , December 20, 2016 at 11:19 AMyuan -> DeDude... , December 20, 2016 at 11:36 AM"his gullible followers were able to fill in the gaps using their own hopes and desires"That is correct, but also the weakness in his support. They will almost certainly be disappointed as the exact interpretations and choices between incompatible promises turns out to be different from the individuals hopes and desires. The reason Trump was able to beat even a Tea party darling, was the backlash against big money having taken over the Tea party. The backlash against Trump_vs_deep_state being "taken over by big money" interest will be interesting to observe, especially if the Dems find the right way to play it.
i hope you are right! however, history shows that a political movement can remain irrational longer than your government can remain democratic.DrDick -> jonny bakho... , December 20, 2016 at 08:14 AMAnd that is the least of the damage they will inflict.New Deal democrat said in reply to pgl... , December 20, 2016 at 05:10 AMFollowing up on Johnny Bakho's comment below, let's assume that average wage growth YoY for nonsupervisory workers never reaches 3% before the next recession hits. Wage growth rates always decline in recessions, usually by over 2%.pgl -> New Deal democrat... , December 20, 2016 at 06:04 AMIf in the next recession, we see actual slight nominal wage decreases, is a debt-deflationary wage-price spiral inevitable? Or could there be a small decline of less than -1% without triggering such a spiral.
Got any opinion? Is there any research on this?
"is a debt-deflationary wage-price spiral inevitable?"New Deal democrat said in reply to pgl... , December 20, 2016 at 06:28 AMGood question. It all depends on the response of policy makers. If we continue with the stupid fiscal austerity that began in 2011, it may be inevitable. Which is why doing public infrastructure investment is a very good idea.
We're doomed.DrDick -> New Deal democrat... , December 20, 2016 at 08:19 AMI knew that immediately after the election.JF -> DrDick... , December 20, 2016 at 01:07 PMAnd consider how dysfunction from laissez faire healthcare policy readoption leads to rising prices/costs above current trend to limit disposable income even more, it will be amazing if we do not have stagnation and worse for the bulk of society.Peter K. -> pgl... , December 20, 2016 at 07:08 AM"Which is why doing public infrastructure investment is a very good idea."JF -> Peter K.... , December 20, 2016 at 01:10 PMIf Hillary Clinton was so progressive according to people like you and Krugman, then why was her infrastructure plan so meager?
Alan Blinder said it would be small small that it wouldn't effect the Fed's thinking on its rate hike schedule.
Bush implemented and expanded a community health clinic system, that reallnwoukd be a nice infrastructure play for the US, but this Congress is more likely to disinvest here. They certainly don't want these do-gooder nonprofits competing against the doctor establishment.ilsm -> Peter K.... , December 20, 2016 at 03:52 PMEMike said it about Bernie..... no soup for you!DeDude -> pgl... , December 20, 2016 at 07:49 AMFor Clinton dems, the ones the wiki revealed are con artists, doing for the peeps [like Bernie stood for] is too far ideologically for the faux centrists.
They are neoliberals market monetarists who keep the bankers green and everyone else takes the back seats.
At this point in time pretty much anything the policy makers do will be countered by the Fed. The question is first of all whether Trump can bully the Fed away from their current and traditional course (which would not allow much of a stimulus, before they cancelled it out with rate hikes).pgl -> DeDude... , December 20, 2016 at 07:55 AMSecond whether the Fed itself having been traditionally prone to support GOP presidents (see inconsistencies in Greenspan's policies during Clinton vs. Bush) will change its policies and allow higher inflation and wage growth than they have under any Dem president.
As long as the FED thinks the natural rate of the employment to population ratio is only 60% - you'd be right. But then the FED is not thinking clearly.yuan -> Peter K.... , December 20, 2016 at 10:59 AMlike many of my fellow socialists, i fulminated about bernanke's coddling of banks and asset holders. i was somewhat wrong. bernanke was a evidently a strong voice for banking regulation and an end to the moral hazard of TBTF. it is a pity that obama did not listen to him.JF -> yuan... , -1The little people go to the credit channels to help finance the purchase of durables and higher education too. The Fed's actions themselves will see these credit prices ratchet, so nit good fir basic demand. Veblen goods will see more price rises as the buyers will have lots of rentier/lobbying gathered money to burn.Will the Fed use rulemaking to control bubbling in the financial asset marketplaces as they wont want to rause rates too much. I hope they are paying attention
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Dec 21, 2016 | economistsview.typepad.com
anne : , December 20, 2016 at 05:34 AMhttps://www.project-syndicate.org/commentary/trump-economy-hurts-workers-by-joseph-e--stiglitz-2016-12anne -> anne... , December 20, 2016 at 05:36 AMDecember 19, 2016
Bad News for America's Workers
By JOSEPH E. STIGLITZNEW YORK – As US President-elect Donald Trump fills his cabinet, what have we learned about the likely direction and impact of his administration's economic policy?
To be sure, enormous uncertainties remain. As in many other areas, Trump's promises and statements on economic policy have been inconsistent. While he routinely accuses others of lying, many of his economic assertions and promises – indeed, his entire view of governance – seem worthy of Nazi Germany's "big lie" propagandists.
Trump will take charge of an economy on a strongly upward trend, with third-quarter GDP growing at an impressive annual rate of 3.2% and unemployment at 4.6% in November. By contrast, when President Barack Obama took over in 2009, he inherited from George W. Bush an economy sinking into a deep recession. And, like Bush, Trump is yet another Republican president who will assume office despite losing the popular vote, only to pretend that he has a mandate to undertake extremist policies.
The only way Trump will square his promises of higher infrastructure and defense spending with large tax cuts and deficit reduction is a heavy dose of what used to be called voodoo economics. Decades of "cutting the fat" in government has left little to cut: federal government employment as a percentage of the population is lower today than it was in the era of small government under President Ronald Reagan some 30 years ago.
With so many former military officers serving in Trump's cabinet or as advisers, even as Trump cozies up to Russian President Vladimir Putin and anchors an informal alliance of dictators and authoritarians around the world, it is likely that the US will spend more money on weapons that don't work to use against enemies that don't exist. If Trump's health secretary succeeds in undoing the careful balancing act that underlies Obamacare, either costs will rise or services will deteriorate – most likely both.
During the campaign, Trump promised to get tough on executives who outsource American jobs. He is now holding up the news that the home heating and air conditioning manufacturer Carrier will keep some 800 jobs in my home state of Indiana as proof that his approach works. Yet the deal will cost taxpayers $7 million, and still allow Carrier to outsource 1,300 jobs to Mexico. This is not a sound industrial or economic policy, and it will do nothing to help raise wages or create good jobs across the country. It is an open invitation for a shakedown of the government by corporate executives seeking handouts.
Similarly, the increase in infrastructure spending is likely to be accomplished through tax credits, which will help hedge funds, but not America's balance sheet: such programs' long track record shows that they deliver little value for money. The cost to the public will be especially high in an era when the government can borrow at near-zero interest rates. If these private-public partnerships are like those elsewhere, the government will assume the risks, and the hedge funds will assume the profits.
The debate just eight years ago about "shovel-ready" infrastructure seems to be a distant memory. If Trump chooses shovel-ready projects, the long-term impact on productivity will be minimal; if he chooses real infrastructure, the short-term impact on economic growth will be minimal. And back-loaded stimulus has its own problems, unless it is managed extremely carefully.
If Trump's pick for US Treasury Secretary, the Goldman Sachs and hedge-fund veteran Steven Mnuchin, is like others from his industry, the expertise he will bring to the job will be in tax avoidance, not constructing a well-designed tax system. The "good" news is that tax reform was inevitable, and was likely to be undertaken by Speaker of the House Paul Ryan and his staff – giving the rich the less progressive, more capital-friendly tax system that Republicans have long sought. With the abolition of the estate tax, the Republicans would finally realize their long-held ambition of creating a dynastic plutocracy – a far cry from the "equality of opportunity" maxim the party once trumpeted....
https://www.theguardian.com/business/2016/dec/19/what-the-us-economy-doesnt-need-from-donald-trumpFred C. Dobbs : , December 20, 2016 at 05:37 AMDecember 19, 2016
What the US economy doesn't need from Donald Trump
The only way he can square higher infrastructure and defence spending with tax cuts is voodoo economics
By Joseph Stiglitz - GuardianAs Donald Trump fills his cabinet, what have we learned about the likely direction and impact of his administration's economic policy?
To be sure, enormous uncertainties remain. As in many other areas, Trump's promises and statements on economic policy have been inconsistent. While he routinely accuses others of lying, many of his economic assertions and promises – indeed, his entire view of governance – seem worthy of Nazi Germany's "big lie" propagandists.
Trump will take charge of an economy on a strongly upward trend, with third-quarter GDP growing at an impressive annual rate of 3.2% and unemployment at 4.6% in November. By contrast, when Barack Obama took over in 2009, he inherited from George W Bush an economy sinking into a deep recession. And, like Bush, Trump is yet another Republican president who will assume office despite losing the popular vote, only to pretend that he has a mandate to undertake extremist policies.
The only way Trump will square his promises of higher infrastructure and defence spending with large tax cuts and deficit reduction is a heavy dose of what used to be called voodoo economics. Decades of "cutting the fat" in government has left little to cut: federal government employment as a percentage of the population is lower today than it was in the era of small government under Ronald Reagan about 30 years ago.
With so many former military officers serving in Trump's cabinet or as advisers, even as Trump cozies up to the Russian president, Vladimir Putin, and anchors an informal alliance of dictators and authoritarians around the world, it is likely that the US will spend more money on weapons that don't work to use against enemies that don't exist. If Trump's health secretary succeeds in undoing the careful balancing act that underlies Obamacare, either costs will rise or services will deteriorate – most likely both.
During the campaign, Trump promised to get tough on executives who outsource American jobs. He is now holding up the news that the home heating and air-conditioning manufacturer Carrier will keep around 800 jobs in my home state of Indiana as proof that his approach works. Yet the deal will cost taxpayers $7m, and still allow Carrier to outsource 1,300 jobs to Mexico. This is not a sound industrial or economic policy, and it will do nothing to help raise wages or create good jobs across the country. It is an open invitation for a shakedown of the government by corporate executives seeking handouts.
Similarly, the increase in infrastructure spending is likely to be accomplished through tax credits, which will help hedge funds, but not America's balance sheet: such programmes' long track record shows that they deliver little value for money. The cost to the public will be especially high in an era when the government can borrow at near-zero interest rates. If these private-public partnerships are like those elsewhere, the government will assume the risks, and the hedge funds will assume the profits....
Millennials aren't lazy, they're workaholicsreason -> Fred C. Dobbs ... , December 20, 2016 at 05:44 AM
http://www.bostonglobe.com/business/2016/12/19/millennials-aren-lazy-they-workaholics/3ZD86pLBYg954qUEYa3SUJ/story.html?event=event25
via @BostonGlobe - Katie Johnston - December 20, 2016As soon as he awakes, Brian Porrell checks his e-mail, sometimes firing off a message before he gets out of bed. He makes calls during his commute to the Waltham staffing firm WinterWyman, spends 10 to 12 hours at the office and out visiting clients, and keeps his phone by his side at night, checking work e-mails while he watches sports on TV.
Like many workers today, Porrell, 30, is on the job wherever he is - and he doesn't count out-of-office exchanges in his 50-plus hour week.
The millennial generation, the first to grow up with smartphones in their hands, is often stereotyped as lazy and entitled. But workplace experts say workaholics are common among 19-to-35-year-olds, perhaps more so than among older members of Generation X and baby boomers.
In one online study, more than 4 in 10 millennials consider themselves "work martyrs" - dedicated, indispensable, and racked with guilt if they take time off.
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What's more, nearly half of millennials want to be seen that way, according to the survey of 5,600 workers by Project: Time Off, a Washington, D.C., coalition that promotes vacation time.
So why are millennials bent on being workaholics? Even though the economy has improved markedly in recent years, young people in the workforce today have record levels of student loan debt. They are also less likely than previous generations to earn more than their parents, according to a Stanford University report. The percentage of children who are better off than their parents has dropped dramatically - 50 percent of those born in the 1980s have a higher standard of living than their parents, compared with 90 percent of those born in the 1940s.
(December 8, 2016 - Today's children face tough
prospects of being better off than their parents,
Stanford researchers find http://stanford.io/2ghwtmj
via @Stanford)The way millennials were raised may play into their always-on mindset, too, said Bob Kelleher, a Boston-based employee engagement consultant and author. Many of them were highly scheduled, he said, going to soccer camps, enrolling in SAT prep courses, and competing on the debate team in order to get into a good college.
And some have delayed several of the responsibilities of adulthood, he noted, living with their parents and putting off marriage and kids. That frees them up to work even more.
"This is a driven generation," he said.
Jane Alexander, 26, a staffing manager at WinterWyman, said she is often one of the first to arrive and the last to leave the office but acknowledged she will probably work less when she has kids. "That is part of why I want to crank it now while I do have time," she said.
The concept of 24/7 work has become so prevalent that workplace analysts are starting to talk about "work-life blending" instead of "work-life balance."
The ability to work anytime, anywhere, helps propel this blending of work and life, in part because answering a work text at a coffee shop doesn't feel as much like work as sitting in a cubicle. Indeed, nearly one in five people said they don't consider after-hours texts from clients or customers to be work, according to Workforce Institute at Kronos Inc., a think tank set up by the Chelmsford human resources software provider.
"If a friend texted me at the gym I would answer their text. Answering a work e-mail is just a natural extension of that," said Jessica Molson, a 24-year-old integration manager at Beacon Communities, the Boston real estate developer and property management firm. "I don't think of it as working; it's just communicating."
Molson finds herself answering e-mails and jumping on conference calls even when she's on vacation, once distracting other participants with the sound of seagulls in the background while she was in Florida with her family. But going on a real vacation is a rarity for Molson, who tends to take long weekends because she's afraid of missing something at work - and also because she loves what she does.
Like many millennials, Molson came of age when the economy was reeling, and the uncertain job market had a profound effect on her.
"I'm very anxious to rack up as much experience as possible," she said.
Millennials are also more likely to forfeit paid days off than older generations of workers, with a quarter of 18-to-25-year-olds reporting they weren't using any of their paid vacation days this year, according to the personal finance website Bankrate.com. The rise of companies offering unlimited vacation time may contribute to that, workplace consultants say, noting that when there is no set bank of "use it or lose it" vacation time, people are less likely to take days off than they otherwise would be.
But not being able to truly get away from work can have serious downsides. Employees who don't disconnect experience more stress and anxiety, which leads to reduced productivity and a higher rate of burnout, said Dan Schawbel, research director at Future Workplace, an executive development firm in New York.
"If all you're doing is trying to be the perfect employee, it's actually not going to work out in your favor because it's going to make you less happy," said Schawbel, who describes working too much as "a weakness disguised as a strength."
Seeing co-workers hunched over their desks late at night can cause others to feel they should be doing the same and increase guilt, or resentment, among employees who strive to keep their work and home lives separate.
It can also lead people working around the clock to hold it against their employer - "even if it's your own fault," Schawbel noted. Indeed, people who see being a "work martyr" as a good thing are more likely to be unhappy with their jobs, and less likely to receive bonuses, according to the Project: Time Off study.
That can lead to retention problems, particularly among millennials, who aren't afraid to quit. Two out of three young workers expect to leave their current job by 2020, according to a recent study by Deloitte.
Still, workaholics aren't necessarily unhappy - many are ambitious or simply enjoy their work. At Beacon Communities, several employees work 60 to 70 hours a week no matter what adjustments supervisors make. Adding more people to an overachiever's team doesn't help, said chief administrative officer Darlene Perrone: "They just find another project." ...
I have enormous problems with generationism. Anything that starts with {generation} is/are(n't) I know what is coming is mostly nonsense. It is exactly the same as if you replaced {generation} with {race} {gender} {nationality} it is sure to be wrong for a significant (perhaps even a majority) of the addressed category.Fred C. Dobbs -> reason ... , December 20, 2016 at 06:06 AMIt never concerned me (much) whether Ipoint -> reason ... , December 20, 2016 at 06:17 AM
was 'doing better' than my parents, but
as a parent, my children's success does
concern me. Go figure.There does seem to be a fruitful direction to take in "generational" analysis, though.Pinkybum -> reason ... , December 20, 2016 at 09:59 AMIt may be that the mechanism by which increasing inequality works is by reducing the prospects of new young workers while generally maintaining the income of older ones. Thus by age cohort, lifetime incomes follow a lower and lower track as the young age compared to older workers.
If that is what is happening, and someone with sufficiently fine data may be able to show it, then it would be trivial to forecast future inequality by re-composing forecasts of lifetime income profiles for the various cohorts and the inflow of new young cohorts.
The possibility is that there is a much more severe inequality on the way that is embedded in the current age cohorts, if we could display them.
I agree with this. I don't believe all the bullshit categories come up with like Generation X, Millenials etc. However, the ruling classes like to use age divisions to divide and conquer so we will keep on hearing about how unengaged, bored, lazy, vapid, greedy and irresponsible young people are. And we have heard it going back at least to Plato and Socrates!Peter K. -> Pinkybum... , December 20, 2016 at 01:36 PMOr Clinton supporters like pgl Krugman talking about Bernie Bros.Pinkybum -> Peter K.... , December 20, 2016 at 06:39 PMI know you love Krugman really.Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 06:03 AMToday's children face tough prospectsFred C. Dobbs : , December 20, 2016 at 06:20 AM
of being better off than their parents
http://stanford.io/2ghwtmj
via @Stanford - Dec 8Parents often expect that their kids will have a good shot at making more money than they ever did.
But young people entering the workforce today are far less likely to earn more than their parents when compared to children born two generations before them, according to a new study by Stanford researchers.
In a new study, Stanford economist Raj Chetty found that the link between income and life expectancy varies from one area to another within the United States.
The findings show that the fraction of kids earning more than their parents has fallen dramatically – from 90 percent for kids born in the 1940s to 50 percent for kids born in the 1980s.
"It's basically a coin flip as to whether you'll do better than your parents," said economics Professor Raj Chetty, a senior fellow at the Stanford Institute for Economic Policy Research and one of the study's authors.
One of the most comprehensive studies of intergenerational income mobility to date, the study used a combination of Census data and anonymized Internal Revenue Service records to measure the rate of "absolute income mobility" – or the percentage of children who earned more than their parents – for people born between 1940 and 1984.
What emerged from the empirical analysis was an economic portrait of the fading American Dream, and growing inequality appeared to be the main cause for the steady decline.
"One of the defining features of the American Dream is the ideal that children have a higher standard of living than their parents," Chetty said. "We assessed whether the U.S. is living up to this ideal, and found a steep decline in absolute mobility that likely has a lot to do with the anxiety and frustration many people are feeling, as reflected in the election." ...
The paper was co-authored by David Grusky, a SIEPR senior fellow, sociology professor and director of the Stanford Center on Poverty and Inequality; Maximilian Hell, a sociology doctoral student at Stanford; Professor Nathaniel Hendren and doctoral student Robert Manduca, both of Harvard; and Jimmy Narang, a former SIEPR predoctoral fellow who is currently a doctoral student at the University of California, Berkeley.
The study – and more information about the team's research – can be found on The Equality of Opportunity Project website run by Chetty and Hendren.
Which Trump Will the World See?Peter K. -> Fred C. Dobbs ... , December 20, 2016 at 08:05 AM
http://nyti.ms/2i4v5UT
NYT - DESMOND LACHMAN - Dec 20One of the basic themes of Donald J. Trump's election campaign was that the United States was being ripped off by foreign countries and that his administration would reduce our trade deficit.
Yet the budget policies he is now proposing would be sharply at odds with that goal. By advocating an expansive budget through tax cuts and infrastructure spending, Mr. Trump's plan would most likely lower national savings and propel the United States dollar ever higher, creating the very conditions to widen rather than to narrow the trade deficit.
Mr. Trump seems to be overlooking a matter of basic arithmetic. While a country's trade balance is the difference between a country's exports and imports, it is also the difference between the amount it saves and invests, as can be derived from rearranging the components of a country's aggregate demand equation. If a country saves more than it invests, it will run a trade surplus. Conversely, a country that saves less than it invests will run a trade deficit.
Seemingly oblivious to this basic math, Mr. Trump is proposing far-reaching and seemingly unfunded cuts in both corporate and household tax rates. Worse yet, he is simultaneously proposing large increases in both public infrastructure and military spending.
He is doing so in the unrealistic hope that these policies will cause the economy to accelerate from its present 2 percent growth rate to between 3 and 4 percent. And he is counting on such faster economic growth to generate additional tax revenue.
Should a significant pickup in economic growth not materialize, the net effect of these tax cuts and public spending policies will almost certainly lead to a significant widening of the budget deficit and to a corresponding decline in public savings. That, in turn, would in all probability lead to a significant widening of the trade deficit as the country's overall savings rate would decline.
A further basic weakness of Mr. Trump's budget proposal is that it would add stimulus to the economy at the very time that the economy is at or very close to full employment. That policy is bound to raise concerns about inflation and to push the Federal Reserve to raise interest rates more than it is currently contemplating in order to meet its inflation target.
One of the distinguishing characteristics of the global economy right now is the divergence of monetary policy stances among the world's major central banks. The United States Federal Reserve is now embarked on a path of raising interest rates at a time when the European Central Bank and the Bank of Japan are still engaged in aggressive rounds of quantitative easing in an effort to kick-start their moribund economies.
Forcing the Federal Reserve to raise interest rates at a faster pace than it is presently contemplating will only serve to widen the difference between it and the other major central banks. This would more than likely put further upward pressure on the dollar.
Since the November election, the United States dollar has already appreciated significantly, to its strongest level in the past 14 years. The last thing that the country needs if it is to reduce its trade deficit is a further dollar appreciation. Such an appreciation would make our exports across the board more expensive in foreign markets and make our imports cheaper in United States dollar terms. That would hardly seem to be the way to reduce the country's trade deficit. ...
Related:
Room for Debate: Can Trump's Infrastructure
Plan Work? http://nyti.ms/2i4tuyeMuch of President-elect Donald J. Trump's pledge to
be a job creator rests on his call for a $1 trillion in
infrastructure spending over 10 years. While few question
the need for such investment, many have questioned how he
would finance it and what it would fund. Can Trump's plan
effectively repair the nation's infrastructure?(Five pundits discuss.)
"A further basic weakness of Mr. Trump's budget proposal is that it would add stimulus to the economy at the very time that the economy is at or very close to full employment. That policy is bound to raise concerns about inflation and to push the Federal Reserve to raise interest rates more than it is currently contemplating in order to meet its inflation target."DeDude -> Fred C. Dobbs ... , December 20, 2016 at 08:21 AMCentrist fail.
Krugman might be right that Trump's policies don't add much actual stimulus.
(He's better on economics than on politics.)
And so Obama's Fed might actually raise rates too quickly.
Combined with a strong dollar and weakening exports this could bring on a recession.
(EMichael is horrified at the fact that Obama's Fed might be considered anti-worker.)
Mohammed El-Erian talks about the international aspect in today's links.
He says the same thing as Krugman and pgl (except adds the Republican BS about tax cuts and deregulation being pro-growth.)
"Mr. Trump seems to be overlooking a matter of basic arithmetic. While a country's trade balance is the difference between a country's exports and imports, it is also the difference between the amount it saves and invests,"RGC -> Fred C. Dobbs ... , December 20, 2016 at 10:02 AMExactly, his understanding of economics is at the 5'th grade level. Furthermore, just as he thinks he known "more than the generals", he also thinks he knows more than the economists. We have elected a narcissistic moron like Turkey's Ergodan and the Philippine's Duterte. We will se the same erratic and destructive policies they have seen, because he is equally incapable of leading a nation. The hope is that our institutions checks and balances will prevent us from slipping into the same type of semi-democracy.
This is a very misleading presentation.DeDude -> RGC... , December 20, 2016 at 11:34 AM"If a country saves more than it invests, it will run a trade surplus. Conversely, a country that saves less than it invests will run a trade deficit."
But:
GDP (Gross Domestic Product) is the value of all goods and services sold within a country during one year. GDP measures flows rather than stocks (example: the public deficit is a flow, the government debt is a stock). Flows are derived from the National Accounting relationship between aggregate spending and income. Ergo:
(1) Y = C + I + G + (X – M)
where Y is GDP (expenditure), C is consumption spending, I is private investment spending, G is government spending, X is exports and M is imports (so X – M = net exports).Another perspective on the national income accounting is to note that households can use total income (Y) for the following uses:
(2) Y = C + S + T
where S is total saving and T is total taxation (the other variables are as previously defined).You can then bring the two perspectives together (because they are both just "views" of Y) to write:
(3) C + S + T = Y = C + I + G + (X – M)
You can then drop the C (common on both sides) and you get:(4) S + T = I + G + (X – M)
Then you can convert this into the following sectoral balances accounting relations, which allow us to understand the influence of fiscal policy over private sector indebtedness. Hence, equation (4) can be rearranged to get the accounting identity for the three sectoral balances – private domestic, government budget and external:
(S – I) = (G – T) + (X – M)
The sectoral balances equation says that total private savings (S) minus private investment (I) has to equal the public deficit (spending, G minus taxes, T) plus net exports (exports (X) minus imports (M)), where net exports represent the net savings of non-residents.
Thus, (S-I) can be positive if (G-T) ( the federal deficit) is greater than (X-M) ( an assumed trade deficit).
Also:
"Should a significant pickup in economic growth not materialize, the net effect of these tax cuts and public spending policies will almost certainly lead to a significant widening of the budget deficit and to a corresponding decline in public savings."
But (S – I) = (G – T) + (X – M), i.e., a federal deficit increase that exceeds a trade deficit increase means greater public savings.
"a federal deficit increase that exceeds a trade deficit increase means greater public savings."RGC -> DeDude... , December 20, 2016 at 11:42 AMOr "export" of treasuries, dollars and other pieces of paper that allow the private sector and government to run deficits at the same time. Nobody in the US need to save as long as we either print more money or sell more paper assets to savers in the non-US part of the world.
The equation includes all exchanges.anne : , December 20, 2016 at 06:36 AMhttp://cepr.net/blogs/beat-the-press/how-to-get-new-drugs-at-generic-pricesanne -> anne... , December 20, 2016 at 06:43 AMDecember 20, 2016
How to Get New Drugs at Generic Prices
The New York Times had an interesting piece * discussing the National Institutes of Health collaboration with private companies in the development of new cancer drugs. As the piece points out, this collaboration has proven very profitable for the drug companies, but leads to drugs that are very expensive because the drug companies are allowed to have patent monopolies, with no restriction on the price they charge.
It also suggests an alternative path. It shows, contrary to conventional wisdom in right-wing circles, everything the government funds is not worthless garbage. If the tables were turned, and all the funding came from the government (rather than relying on government imposed patent monopolies), then the new drugs could be sold at generic prices since everyone already would have been paid for their research.
In many cases, the generic price would be less than one percent of the patent protected price. New cancer drugs that might sell for $100,000 for a year's treatment, might sell for hundreds of dollars. ** Policy types who don't work for the pharmaceutical industry should be looking into more efficient alternatives for financing drug research.
** http://www.thebodypro.com/content/78658/1000-fold-mark-up-for-drug-prices-in-high-income-c.html
-- Dean Baker
http://www.nytimes.com/2016/12/19/health/harnessing-the-us-taxpayer-to-fight-cancer-and-make-profits.htmlFred C. Dobbs : , December 20, 2016 at 06:46 AMDecember 18, 2016
Harnessing the U.S. Taxpayer to Fight Cancer and Make Profits
By MATT RICHTEL and ANDREW POLLACKEnthusiasm for cancer immunotherapy is soaring, and so is Arie Belldegrun's fortune.
Dr. Belldegrun, a physician, co-founded Kite Pharma, a company that could be the first to market next year with a highly anticipated new immunotherapy treatment. But even without a product, Dr. Belldegrun has struck gold.
His stock in Kite is worth about $170 million. Investors have profited along with him, as the company's share price has soared to about $50 from an initial price of $17 in 2014.
The results reflect widespread excitement over immunotherapy, which harnesses the body's immune system to attack cancer and has rescued some patients from near-certain death. But they also speak volumes about the value of Kite's main scientific partner: the United States government.
Kite's treatment, a form of immunotherapy called CAR-T, was initially developed by a team of researchers at the National Cancer Institute, led by a longtime friend and mentor of Dr. Belldegrun. Now Kite pays several million a year to the government to support continuing research dedicated to the company's efforts.
The relationship puts American taxpayers squarely in the middle of one of the hottest new drug markets. It also raises a question: Are taxpayers getting a good deal?
Defenders say that the partnership will likely bring a lifesaving treatment to patients, something the government cannot really do by itself, and that that is what matters most.
Critics say that taxpayers will end up paying twice for the same drug - once to support its development and a second time to buy it - while the company reaps the financial benefit.
"If this was not a government-funded cancer treatment - if it was for a new solar technology, for example - it would be scandalous to think that some private investors are reaping massive profits off a taxpayer-funded invention," said James Love, director of Knowledge Ecology International, an advocacy group concerned with access to medicines.
The debate goes squarely to one of the nation's most vexing challenges: rising health care and drug prices. Kite is one of a growing number of drug and biotech companies relying on federal laboratories. Analysts expect the company to charge at least $200,000 for the new treatment, which is intended as a one-time therapy for patients.
While the law allows the government to demand drug-price concessions from its private-sector partners, the government has declined to do so with Kite and generally disdains the practice.
Insisting on lower prices, federal researchers say, would drive away innovative partners that speed the drug-development process and benefit patients. But with the government doing so much pivotal research, others say that the private sector cannot afford to walk away.
"The market is so reliant on the knowledge and know-how that comes out of the government and academic labs," said Dr. Aaron Kesselheim, director of the Program on Regulation, Therapeutics and Law at Brigham & Women's Hospital in Boston....
Paul Krugman ✔ @paulkrugman · 8 minutes agoFred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 06:47 AMAre people noticing that the Trump economic team is shaping up as a gathering of gold bugs? 1/
Treasury goes to a guy with little public profile, but hangs out with John Paulson (who is also close to Trump) 2/
(Trump's Treasury Pick Moves in Secretive Hedge
Fund Circles http://nyti.ms/2i3aZu6
NYT - MATTHEW GOLDSTEIN and ALEXANDRA STEVENSON - Dec 19)And Paulson has been predicting inflation -- sometimes double-digit -- from Fed policy for years 3/
(John Paulson: Gold Will Rise In
Proportion To Bernanke's Dollar Printing http://www.forbes.com/sites/afontevecchia/2011/04/14/john-paulson-gold-will-rise-in-proportion-to-bernankes-dollar-printing/ Forbes - April 14, 2011)Budget director appears to be John Bircher and conspiracy theorist (but aren't they all? But note economic views 4/
(Trump's Budget Director Pick Rick
Mulvaney Spoke at a John Birch Society Event
http://www.motherjones.com/politics/2016/12/trump-mulvaney-john-birch-society via @motherjones)Birchers want return to gold and silver, Mulvaney seems to agree 5/
https://twitter.com/paulkrugman/status/811217899528429569
In this crew, Kudlow -- who thinks it's always the 1970s, but doesn't seem to see hyperinflation under his bed -- is the most reasonable 6/
Whoops -- forgot Mulvaney's Bitcoin derp: "He praised bitcoin as a currency that is "not manipulatable by any government."" 7/
https://twitter.com/paulkrugman/status/811219022695890948Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 07:15 AM(Is there also a place for Jim Cramer?)Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 04:05 PMKudlow Close to Being Named
Trump Chief Economist, Paper Says http://www.bloombergquint.com/global-economics/2016/12/15/kudlow-close-to-being-named-trump-chief-economist-adviser-says
via @Bloomberg - Dec 18President-elect Donald Trump's transition team is close to picking economic commentator Larry Kudlow to be chairman of the White House Council of Economic Advisers, according to a report in the Detroit News.
Kudlow, 69, has served as an informal adviser to the Trump campaign, primarily focused on tax policy and teaming primarily with Stephen Moore, a visiting fellow at the Heritage Foundation and fellow alumnus of President Ronald Reagan's economic team. Moore was cited by the newspaper as saying Thursday the selection of Kudlow would be announced in the next 48 hours.
Kudlow's appointment, which would require Senate confirmation, marks another non-traditional pick by the incoming administration. Kudlow doesn't hold a Ph.D. in economics, unlike former heads of the CEA. For five years, he hosted a show on CNBC on business and politics, and he's worked at the Federal Reserve Bank of New York. During Reagan's first term, Kudlow was associate director for economics and planning in the White House's Office of Management and Budget. ...
Kudlow & Cramer (was) a CNBC American businessPeter K. -> Fred C. Dobbs ... , December 20, 2016 at 07:32 AM
and politics television program hosted by
conservatives Lawrence Kudlow and Jim Cramer, which aired weekdays from 2002 to 2005. (Wikipedia)"In this crew, Kudlow -- who thinks it's always the 1970s, but doesn't seem to see hyperinflation under his bed -- is the most reasonable 6/"pgl -> Peter K.... , December 20, 2016 at 07:58 AMMaybe pgl will insult Krugman like he insulted Bernstein who pgl said was soft on Kudlow.
Misrepresenting 24/7 we see. No - Krugman got this right. And yes Jared was nicer to Kudlow than I could ever be. But soft? A day without a PeterK lie is like a day without sunshine.Peter K. -> pgl... , December 20, 2016 at 08:16 AMIt's funny how you refuse to stand up for your own arguments.DeDude : , December 20, 2016 at 07:16 AMYour inconsistency reminds me of Kudlow in a way.
What is the appropriate response when an adversary throws the election to ensure their favorite candidate becomes our president?Peter K. -> DeDude... , December 20, 2016 at 07:34 AMWhip up some xenophobic, anti-Russia hysteria to distract people from the fact that your lame centrist candidate lost to a laughable reality TV star?DeDude -> Peter K.... , December 20, 2016 at 09:09 AMOh buh-hu-hu. Get over it and stop the whining.anne : , December 20, 2016 at 07:32 AMYou candidate was to weak to win the semifinals, and he would have been crushed in the finals. He didn't have what it takes to win in little league, and he wouldn't have had what it takes to win in the big league either. Maybe the democrats could have found someone who would have won against Trump; but it sure as hell wasn't any of the losers of their primary contest.
http://cepr.net/blogs/beat-the-press/someone-has-to-tell-john-williams-inflation-is-not-acceleratinganne -> anne... , December 20, 2016 at 07:34 AMDecember 20, 2016
Someone Has to Tell John Williams Inflation Is Not Accelerating
The Federal Reserve Board raising interest rates last and seem poised to do so again in the not distant future. The rationale is that the economy is now near or at full employment and that if job growth continues at its recent pace it will lead to a harmful acceleration in the inflation rate.
We have numerous pieces raising serious questions about whether the labor market is really at full employment, noting for example the sharp drop * in employment rates (for all groups) from pre-recession levels and the high rate of involuntary part-time ** employment. But the story of accelerating inflation is also not right.
This is particularly important, since John Williams, the president of the San Francisco Federal Reserve Bank, cited accelerating inflation as a reason to support last week's rate hike, and possibly future rate hikes, in an interview in the New York Times this morning. Williams has been a moderate on inflation, so there are many members of the Fed's Open Market Committee who are more anxious to raise rates than him.
A close look at the data does not provide much evidence of accelerating inflation. The core personal consumption expenditure deflator, the Fed's main measure of inflation, has risen 1.7 percent over the last year, which is still under the 2.0 percent target. This target is an average, which means that the Fed should be prepared to allow the inflation rate to rise somewhat above 2.0 percent, with the idea that inflation will drop in the next recession.
Anyhow, the 1.7 percent rate is slightly higher than a low of 1.3 percent reached in the third quarter of 2015, but it is exactly the same as the rate we saw in the third quarter of 2014. In other words, there has been zero acceleration in the rate of inflation over the last two years.
Furthermore, even this modest acceleration has been entirely due to the more rapid increase in rent over the last two years. The inflation rate in the core consumer price index, stripped of its shelter component, actually has been falling slightly over the last year. It now stands at 1.1 percent over the last year.
[Consumer Price Index Minus Food, Energy and Shelter, 2006-2016]
It is reasonable to pull shelter out of the CPI because rents do not follow the same dynamic as most goods and services. In fact, higher interest rates, by reducing construction, are likely to increase the pace of increase in rents rather than reduce them.
This issue is hugely important, since if the Fed prevents the labor market from tightening further it will be preventing millions of people from getting jobs. These people are disproportionately African American and Hispanic and also less-educated workers. The decision to tighten will also lessen the bargaining power of a much larger group of workers, making it more difficult for them to get pay increases.
The weak labor market of the Great Recession resulted in a large redistribution from wages to profits. The tightening of the labor market in the last two years has reversed part of this shift. If the Fed raises interest rates enough to prevent further tightening, then it will be locking in place this redistribution to profits. That would be bad news for tens of millions of workers, especially if the decision was based on a misreading of inflation data.
-- Dean Baker
https://fred.stlouisfed.org/graph/?g=cbCBFred C. Dobbs : , December 20, 2016 at 07:36 AMJanuary 15, 2016
Consumer Price Index Less Food and Energy & Consumer Price Rent Index, 2000-2016
(Percent change)
https://fred.stlouisfed.org/graph/?g=cbCDJanuary 15, 2016
Consumer Price Index Less Food and Energy & Consumer Price Rent Index, 2000-2016
(Indexed to 2000)
(Only 4 billionaires though,Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 08:31 AM
counting Trump, totaling $12.65B.)Trump's Cabinet picks so far worth a combined $13b
http://www.bostonglobe.com/metro/2016/12/20/trump-cabinet-picks-far-are-worth-combined/XvAJmHCgkHhO3lSxgIKvRM/story.html?event=event25
via @BostonGlobe - Matt Rocheleau - December 20, 2016President-elect Donald Trump boasted about his wealth during his campaign. Now he's surrounding himself with people who have similarly unimaginable riches.
Collectively, the wealth of his Cabinet choices so far is about five times greater than President Obama's Cabinet and about 34 times greater than the one George W. Bush led at the end of his presidency.
And Trump still has four more key advisory spots left to fill.
The net worth of the Cabinet Trump had selected as of Monday was at least $13.1 billion, based on available estimates, or more than the annual gross domestic product of about 70 small countries.
That included the $3.7 billion Trump is estimated to be worth, according to Forbes. (Trump has claimed to be worth much more - around $10 billion.)
It also included the $5.1 billion in net worth that Forbes estimated belongs to the family of Betsy DeVos, the former Michigan Republican Party chair and education activist selected to be education secretary.
Investor Wilbur Ross, picked to become commerce secretary, is estimated to be worth $2.5 billion, according to Forbes.
Linda McMahon, a former WWE executive and U.S. Senate candidate, has been picked to serve as small business administrator. She and her husband Vincent McMahon are worth at least an estimated $1.35 billion, according to Bloomberg.
Exxon Mobile CEO Rex Tillerson, nominated to become secretary of state, is estimated to be worth $365 million, according to Bloomberg.
Steven Mnuchin, the former Goldman Sachs executive in line to become Treasury secretary, is worth at least $46 million, according to Politico.
Retired neurosurgeon and former presidential candidate Ben Carson, who is in line to become the housing and urban development secretary, was worth $26 million, according to a Forbes estimate from 2015.
The pick for transportation secretary, Elaine Chao, the former labor secretary, was worth an estimated $16.9 million as of 2008, when she last held public office, according to the Center for Responsive Politics, a Washington-based nonprofit that tracks campaign finance data.
Two other Cabinet picks - Alabama Senator Jeff Sessions for attorney general and Georgia Representative Tom Price for health and human services secretary - were estimated to be worth about $7.5 million and $13.6 million, respectively, as of 2014, according to the center.
Former Texas governor and presidential candidate Rick Perry, selected to be energy secretary, is estimated to be worth about $3 million, according to the Associated Press.
U.S. Representative from South Carolina Mick Mulvaney, picked to become director of the Office of Management and Budget, was worth an estimated $2.6 million as of 2014, according to the center.
Fast-food executive Andrew Puzder, picked to fill the role of labor secretary, is also a multi-millionaire, according to Politico.
U.S. Representative from Montana Ryan Zinke, picked to become interior secretary, was worth an estimated $675,000 as of 2014, according to the center. ...
The 5 richest Cabinet members of all time http://on.mktw.net/2h8iBvrFred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 09:34 AM(Andrew Mellon tops the list. Treasury
secretary under Harding, Coolidge and
Hoover, worth $50 billion in current
dollars. No one else is even close.)Mellon was the third-richest American of his time - behind only John D. Rockefeller and Henry Ford - and has been ranked the 14th richest American of all time, in inflation-adjusted dollars.
'Collectively, the wealth of his Cabinet choices so far is about five times greater than President Obama's Cabinet and about 34 times greater than the one George W. Bush led at the end of his presidency.'Peter K. : , December 20, 2016 at 08:08 AMSo, the Obama cabinet is worth $2.6B apparently.
That would largely be due to Penny Pritzker,
#3 on the MarketWatch list above,
who is said to be worth $1.85B.And, believe it or not, the Bush Jr
cabinet was apparently only worth
$382M, a pittance.Mohamed A. El-Erian on Trump's macro and international economics.Peter K. -> Peter K.... , December 20, 2016 at 08:11 AMThis sounds a lot like what pgl and Krugman are saying about a strong dollar providing headwinds to the economy.
My question though is consider a thought experiment where Comey didn't throw the election to Trump.
Hillary's fiscal policies were supposedly budget neutral and wouldn't really effect the rate of Fed hikes.
Would the strong dollar effect have been applicable to a strengthening Clinton economy as well to a Trump economy?
Much depends on the rate of Fed hikes?
Obviously without the tax cuts for the rich, Hillary's budget would have allowed more fiscal room for stimulus in the event of a downturn.Peter K. -> Peter K.... , December 20, 2016 at 08:14 AMHer infrastructure spending, such as it was, would have provided more automatic stabilizers and helped give the Fed room to lower rates later on.
When Yellen says there's no need for fiscal stimulus - which should be blasphemous to all "real" progressives* - what she's saying is that the Fed can just use uncoventional monetary policy again the next time there is a downturn.im1dc : , December 20, 2016 at 08:21 AMThey gave us the recovery they wanted this past time after all.
* of course pgl refuses to discuss this episode. His lies of omission are the biggest of all. Krugman too refuses to address Yellen's blasphemy. Only DeLong was brave enough and honest enough to disagree.
Good News For Guys and the Gals that love them and outstandingly clever scienceFred C. Dobbs -> im1dc... , December 20, 2016 at 01:40 PM"Surgeons have described a new treatment for early stage prostate cancer as "truly transformative"
http://www.bbc.com/news/health-38304076
"Prostate cancer laser treatment 'truly transformative'"
By James Gallagher, HEalth and science reporter...BBC News...12-20-2016...7 hours ago
"The approach, tested across Europe, uses lasers and a drug made from deep sea bacteria to eliminate tumours, but without causing severe side effects.
Trials on 413 men - published in The Lancet Oncology - showed nearly half of them had no remaining trace of cancer.
Lifelong impotence and incontinence are often the price of treating prostate cancer with surgery or radiotherapy.
Up to nine-in-10 patients develop erectile problems and up to a fifth struggle to control their bladders.
That is why many men with an early stage tumour choose to "wait and see" and have treatment only when it starts growing aggressively.
"This changes everything," said Prof Mark Emberton, who tested the technique at University College London.
Triggered to kill
The new treatment uses a drug, made from bacteria that live in the almost total darkness of the seafloor and which become toxic only when exposed to light.
Ten fibre optic lasers are inserted through the perineum - the gap between the anus and the testes - and into the cancerous prostate gland.
When the red laser is switched on, it activates the drug to kill the cancer and leaves the healthy prostate behind..."
Light therapy effectively treats early prostatePeter K. : , December 20, 2016 at 08:22 AM
cancer: New non-surgical treatment for low-risk
prostate cancer can effectively kill cancer cells
while preserving healthy tissue
https://www.sciencedaily.com/releases/2016/12/161219202008.htmPadeliporfin vascular-targeted photodynamic
therapy versus active surveillance in men with low-
risk prostate cancer (CLIN1001 PCM301): an open-
label, phase 3, randomised controlled trial
http://www.thelancet.com/journals/lanonc/article/PIIS1470-2045%2816%2930661-1/abstractKrugman:Peter K. -> Peter K.... , December 20, 2016 at 08:24 AMhttp://krugman.blogs.nytimes.com/2016/05/09/the-facts-have-a-well-known-center-left-bias/
The Facts Have A Well-Known Center-Left Bias
MAY 9, 2016 8:01 AM
"But I'm also hearing from Berniebros, insisting that anything I say must be wrong, because I criticized their hero. And this suggests to me that we may need a clarification of the doctrine that facts have a well-known liberal bias. More specifically, they seem to have a center-left bias: conservatives are big on empirical denial, but so is some of the U.S. left."
I'd say the center-left is big on empirical denial, especially when it comes to the rise of populism and globalization.
They'd rather focus on Putin's hackers.
But some are coming around or at least asking questions. See Tim Duy, DeLong, and Noah Smith.
http://economistsview.typepad.com/timduy/2016/12/responsibility.html
https://www.bloomberg.com/view/articles/2016-12-16/four-ways-to-help-the-midwest
From a New York Times article on the growing popularity of the universal basic income idea.Peter K. -> Peter K.... , December 20, 2016 at 08:27 AMhttp://www.nytimes.com/2016/12/17/business/economy/universal-basic-income-finland.html
"he search has gained an extraordinary sense of urgency as a wave of reactionary populism sweeps the globe, casting the elite establishment as the main beneficiary of economic forces that have hurt the working masses. Americans' election of Donald J. Trump, who has vowed to radically constrain trade, and the stunning vote in Britain to abandon the European Union, have resounded as emergency sirens for global leaders. They must either update capitalism to share the spoils more equitably, or risk watching angry mobs dismantle the institutions that have underpinned economic policy since the end of World War II."
The center-left, like Krugman, EMichael, pgl, Bakho, etc. argue that's just racism. That's it.
There's been an upsurge in racism and tribalism worldwide for some inexplicable reason. Fox News.
Or Obama.
Krugman discusses the 1930s but fails to recall how the Great Depression helped lead to the rise of National Socialism and Hitler.Peter K. -> Peter K.... , December 20, 2016 at 08:32 AMHe forgets Keynes's The Economic Consequences of The Peace.
https://en.wikipedia.org/wiki/The_Economic_Consequences_of_the_Peace
Even the U.S you had Father Coughlin, the populist Huey Long, and Charles Lindbergh's America First movement which was isolationist just like Trump.im1dc : , December 20, 2016 at 08:29 AM"Europe as a whole was badly hit, in both rural and industrial areas. Democracy was discredited and the left often tried a coalition arrangement between Communists and Socialists, who previously had been harsh enemies. Right wing movements sprang up, often following Italy's fascist mode."
Like Greece's fascist Golden Dawn.
Not expecting this, but here it is anywayim1dc : , December 20, 2016 at 08:59 AMThe shocking election of demagogic hate monger Trump has let Genie out of the Bottle, the Liberal Genie
"Why US liberals are now buying guns too"
http://www.bbc.com/news/magazine-38297345
"Why US liberals are now buying guns too"
By Brian Wheeler...BBC News, Washington DC...12-20-2016...6 hours ago
"Gun ownership has traditionally been associated with the right wing in America but the election of Donald Trump has prompted some left-wingers to join gun clubs - and even start preparing for the collapse of society.
"I really didn't expect to be thinking about purchasing a gun. It was something that my father did and I rolled my eyes at him."
Clara, a 28-year-old nursing student, grew up in the Mid-West, where "the folks that had guns were seen as hicks" or were just "culturally different", she says.
But since the election of Donald Trump in November she has started going to a gun range for the first time and is shopping around for a semi-automatic pistol.
"It's been seeing the way that Trump's election has mobilised a lot of the far right and given them hope," she says, citing a rise in reports of hate crimes and neo-Nazi activity.
As a transgender woman, she does not fear for her personal safety in the Californian city where she now lives but she says she knows people in rural areas "who woke up and found a bunch of swastikas and words like 'faggot' and 'trannie' scrawled all over their building".
She foresees a wide-ranging struggle between the Trump administration and the left over issues such as immigration and racial politics.
But won't buying a gun just increase tensions?
"Things are already escalating and they will continue to do so and me not engaging or being prepared to defend my friends by force... isn't going to stop people from being attacked or harassed," Clara says.
Gun sales in America hit record levels in October amid fears a Hillary Clinton election victory would lead to increased controls.
Many expected the election of Donald Trump, whose candidacy was backed by the National Rifle Association, to bring an end to the panic buying. Shares in gun manufacturers dropped by as much as 18% following his victory.
But instead FBI background checks for gun transactions soared to a new record for a single day - 185,713 - during the Black Friday sales on 25 November, according to gun control news site The Trace.
Some of this has been put down to gun retailers selling off stock at reduced prices, but there have also been reports of more "non-traditional" buyers, such as African Americans and other minorities, turning up at gun shops and shooting ranges..."
Item #1 of 3 in your Briefing that explains THE WAY BACKim1dc -> im1dc... , December 20, 2016 at 09:01 AM"The Single Greatest Force in American Politics? Partisanship"
by Chuck Todd, Mark Murray and Carrie Dann...Dec 20 2016...8:56 am ET
"Why partisanship is the single greatest force in American politics"
Want to know why partisanship -- or party identification -- is the single greatest force in American politics today? Just check out these shifting attitudes about the economy and nation's direction in the latest NBC/WSJ poll:
... 68% of Republicans believe the economy will get better in the next 12 months (versus just 14% of GOPers who said this a year ago in the Dec. 2015 NBC/WSJ poll).
... By contrast, only 19% of Democrats said the economy will improve next year (compared with 37% of them who said this last December).
... Right now, 52% of Republicans say the country is headed in the right direction (versus just 5% who said this in December 2015).
... Conversely, only 18% of Democrats say the country is headed in the right direction (compared with 37% of them who said this a year ago).
Folks, the underlying dynamics of the U.S. economy have remained pretty much the same over the past year. The only thing that has changed is the party that will be in the White House next year. It's all confirmation that so much public opinion is shaped through Americans' partisan lenses, and little else. Want another example of this from our NBC/WSJ poll? A combined 86% of Democrats say they are bothered a great deal/quite a bit by Russia's interference in the 2016 presidential election, versus just 29% of Republican respondents who say this..."
Item #2 of 3 of THE WAY BACK briefingim1dc -> im1dc... , December 20, 2016 at 09:02 AMsame NBC source
"Asymmetrical warfare: Democrats have knives, Republicans have guns"
"But if partisanship is the greatest force in American politics, there's maybe a more important dynamic at play -- the asymmetrical warfare between the two parties. As the New York Times' David Leonhardt writes in comparing how Barack Obama is leaving the White House versus how Republican Pat McCory is leaving power in North Carolina, Democrats are wielding knives while Republicans have guns. Think of the 2011 debt-ceiling standoff. Mitch McConnell denying Obama's Supreme Court pick to even get a hearing. And now what's playing out in North Carolina. Republicans are playing a different game than Democrats are playing."
Item #3 of 3 of THE WAY BACK briefingim1dc : , December 20, 2016 at 09:12 AMsame NBC source
"Trump's popularity improves -- but he's still the most unpopular president-elect in the history of our poll"
"Also from our NBC/WSJ poll: 40% of Americans now have a positive view of Donald Trump, versus 46% who have a negative view. That's up considerably from his 29%-62% rating in the October NBC/WSJ poll. Still, Trump's 40%-46% fav/unfav score is the WORST in the history of our poll for a president-elect and the first time it's a net-negative. Bill Clinton's was 60%-19% in Dec. 1992, George W. Bush's was 48%-35% in Dec. 2000, and Barack Obama's was 67%-16% in Dec. 2008.
For the rest on our poll, click here. http://www.nbcnews.com/politics/first-read/poll-majority-americans-pessimistic-or-uncertain-about-trump-presidency-n697971
My prescription and takeaway is for the next four years for the Democratic Party especially those in D.C. is for Hyper Partisanship, no holds barred bare knuckle deliberate faithless drug out deliberations and negotiations with the GOP, and the ceaseless cacaphonic BLAME, BLAME, BLAME media game of imagined, fake, and real failures of every Republican especially Donald Trump and his family.im1dc -> im1dc... , December 20, 2016 at 09:23 AMThere you have it, your assignment for the next next Presidential Election.
This is, of course, the opposite of the Democratic Party Obama-way and the Clinton-way that reasonably expected the American Electorate to see through and reject those same tactics used on President Obama and Hillary Clinton when they relied upon logic not lies, facts not falsehoods, and intellectual and scientific critical thinking instead of rants, ravings, and unhinged screeds to win the argument and sway the Electorate.im1dc : , December 20, 2016 at 09:40 AMIOW, time to stick it to Middle America Fly Over country and make them see how wrong they were to vote for Trump while aiding the BiCoastal States, and the majority of voters in the last Election, survive the next 4 years.
First and foremost start by insisting on cutting off or at least severely reducing any and all AG support welfare and corporate welfare for noncompetitive manufacturers before any support for cutting Obamacare, SS, and Medicare, which are the highest items on Ryan's and the GOP's agenda.
Trump and his assembled Cabinet picks and Team are a full month away from taking the Oath of Office and have loaded the DEMS up with issues at the heart of every American Worker, Blue and Middle Class: Class Warfare and Pay InequalityObserver : , December 20, 2016 at 09:48 AM"Why Donald Trump Could Spell Doom for CEO Pay Transparency"
by Martha C. White...Dec 20 2016...7:49 am ET
"Outsized CEO pay is an issue coming under increasing scrutiny, and Donald Trump has already promised to do away with legislation that would require companies to be more transparent.
However, compensation experts say an executive branch filled with corporate titans could benefit the relative few atop the corporate ladder at the expense of everyone else.
The implicit assumption is that these CEOs will look out for their own.
Furthermore, because Trump is one of those CEOs himself, it might very well "put a halo effect around the whole issue [of executive pay] for a while," said John Challenger, CEO of executive outplacement firm Challenger, Gray & Christmas.
Repeal of Dodd-Frank?
"I think the first year will be a true measure of who he is as a policy person," said Lawrence Mishel, president of the Economic Policy Institute, a left-leaning think tank...
...Starting next year, the Securities and Exchange Commission planned to require companies to disclose how much their CEO makes as a ratio of median employee pay, giving shareholders - and ordinary Americans - a window into how companies treat their CEO compared to the rank-and-file workers, but the future of that rule is in limbo.
Donald Trump, although he railed against fat CEO pay packages during his campaign, calling them "disgraceful," also vowed to "dismantle" the Dodd-Frank Act, which provided the mandate for the new SEC rule...
...For the future, many expect the SEC's push for increased transparency to be scuttled, in keeping with Donald Trump's promise to roll back regulations of all types...
..."they believe now that it's likely to be pulled out is when you look at the cabinet Trump is putting together, there are a lot of billionaires, a lot of CEOs," Kropp said.
"It seems to me that the pressure is going to abate. There's going to be less scrutiny," Challenger predicted..."
This doubling of the sub fleet was outlined in a defense White Paper earlier this year. Basically, its due to concerns about China. The article doesn't say, but I assume these are AIP powered.Fred C. Dobbs -> Observer... , December 20, 2016 at 11:56 AM
Australia, France sign submarine deal"Australia and France on Tuesday signed the final agreement for French naval contractor DCNS to build 12 submarines in what Prime Minister Malcolm Turnbull called a "critically important step in the development of our security."
The 34.9 billion euro ($36.3 billion) deal, including separate agreements with US and Australian contractors, is one of the world's largest defense contracts.
Turnbull described the deal as the "last foundation stone needed to ensure Australia is able to develop a cutting-edge sovereign submarine capability."
The submarines will be a conventionally-powered version of France's 4,700-tonne nuclear-fuelled Barracuda complete with stealth technology. France and Australia agreed in April to the deal, for which Germany and Japan were also contending.
Most of the submarine production will be in the southern city of Adelaide and create 2,800 high-skilled jobs, Turnbull said.
US defense giant Lockheed Martin will produce the combat systems for the Barracudas."
http://www.dw.com/en/australia-france-sign-submarine-deal/a-36839878
Submarines deal: Why isFred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 12:30 PM
Australia paying for old technology?Dick Smith (#) furious at $50 billion submarines 'fiasco' - September 14, 2016
http://www.news.com.au/finance/business/dick-smith-furious-at-50-billion-subs-fiasco/news-story/6f85752a58e5a7afa5472c0ac5453065A war of words has erupted between a group of prominent Australian businessmen and seemingly the entire southern state over the Federal Government's controversial French submarines deal.
(Adelaide, South Australia, is to be
a recipient of much employment related
to this deal.)The group, which includes entrepreneur Dick Smith, Gary Johnston of Jaycar Electronics and adman John Singleton, took out a full-page advertisement in
The Australian on Tuesday slamming the move to go with French producer DCNS, suggesting buying off-the-shelf nuclear subs would be a better option.They warned the current deal, announced on April 28 this year, will "condemn our sailors to their graves". The group says it can't understand the Federal Government's decision to award a multi-billion deal to French supplier DCNS, which will be required to deliver 12 diesel-powered submarines for which there are no drawings and no plans.
They said under the deal, the navy's next fleet of conventionally-powered subs would come into service at a time when the rest of the world would be operating nuclear fleets, which would be "like putting a propeller plane up against a modern jet".
"We will be condemning our sailors to their graves," the advertisement said. It also questioned the economics of the decision, saying it would be cheaper to subsidise car industry jobs, if creating jobs was the desired outcome. Mr Johnston said DCNS was being asked to build a diesel-powered version of what is essentially a nuclear-powered sub.
"It's a bit like trying to turn a cat into a dog. It's crazy. Why would you do it?" he told Sky News. "They haven't got a drawing, they haven't got a plan. Their current nuclear submarine, the Barracuda, is sitting on a slipway. It won't even be tested until next year."
DCNS declined to comment on the row, but the Federal Government said the decision to award the contract to the company came after a competitive evaluation process, which involved the best experts available. It said the new subs would be regionally superior and would allow Australia to pursue its national and international interests. ...
The government estimates building the submarines in Adelaide will create 2800 jobs.
That would be the equivalent of giving every single one of those 2800 workers a cheque for $5.4 million - or handing every single man, woman and child in South Australia a cheque for nearly $9000.
Speaking on 2GB, Mr Johnston said "if we were smart" we would simply buy the French or British nuclear sub, or even the "ultimate" US Virginia class nuclear submarine, which has 33 years of fuel.
"You don't have to have a nuclear industry in Australia - you just simply buy the thing and 33 years later you trade it in on a new one," he said.
"It's unbelievable how these things are just such an order of magnitude better than a diesel sub. Every one of the enemy we would hopefully not ever encounter, but if we do, would have nuclear submarines which will blow diesel submarines out of the water."
But the group was dismissed as "sad old men" by South Australian Premier Jay Weatherill, who rubbished their proposal to go nuclear. "[It] looked like it was scribbled on the back of a serviette after a long lunch," Mr Weatherill tweeted on Tuesday.
Defence Industry Minister Christopher Pyne, who holds the South Australian seat of Sturt, described the criticism as "misinformed, misguided" and "entirely wrong". "We don't have nuclear energy in Australia and therefore we can't have nuclear submarines," Mr Pyne told ABC radio on Wednesday.
"The advice from defence was entirely clear and that was that the French DCNS design was the best for what we needed.
"Quite clearly we are not getting a Short Fin Barracuda submarine, we are getting a unique design for Australian conditions. We've chosen DCNS because we believe that they have the best record and the best designs in terms of large submarines both nuclear and non nuclear." ...
#- Richard Harold "Dick" Smith, AC (*) is an Australian entrepreneur, businessman, aviator, philanthropist, and political activist. He is the founder of Dick Smith Electronics, Dick Smith Foods and Australian Geographic, and was selected as the 1986 Australian of the Year. In 2010 he founded the media production company Smith&Nasht with the intention of producing films about global issues. In 2015 he was awarded the Companion of the Order of Australia (*), and is a fellow of the Committee for Skeptical Inquiry. (Wikipedia)
Fun facts: (Wikipedia)ilsm -> Fred C. Dobbs ... , December 20, 2016 at 04:12 PMShortfin barracuda may refer to:
Australian barracuda, a fish found
mainly outside Australia & New Zealand(Australian barracuda, arrow barracuda,
Australian sea pike, sea pike, snook, or
shortfin barracuda, Sphyraena novaehollandiae)Shortfin Barracuda-class submarine, a submarine class proposed for Australia's Collins-class replacement
Super batteries, high efficiency motor generators, materials......im1dc : , December 20, 2016 at 10:05 AMgoing diesel is not old tech!
In fact there are cost suggestions that CVN's are too expensive to have to find oilers all the time for gas guzzling jets.
Where all that waste goes for two full reactors 'sets'............
From the GOPsters Playbook 'First move on the poor to deny necessities of life'im1dc : , December 20, 2016 at 10:10 AMWisconsin, US - 6m ago
"Wisconsin Gov. Scott Walker asks President-elect Trump for flexibility to implement drug screening, testing of some adults on SNAP - statement"
Read more on walker.wi.gov
Gee, what a surprise...more lying disingenuousness from Republicans in D.C.im1dc -> im1dc... , December 20, 2016 at 10:13 AM2016 US elections - 1h ago
"Senate Majority Leader Mitch McConnell says no select committee needed to investigate Russian meddling; says 'no question' on election interference - The Hill"
Read more on thehill.com
This should serve as a warning to those here that put their faith in some Republican senators such as S. Lindsey Graham and S. John McCain, they can not trusted, they are straw men, sent out to make their Party look less extreme than it is in fact.im1dc -> im1dc... , December 20, 2016 at 10:22 AMEmbracing xenophobia is not the way for Americansilsm -> im1dc... , December 20, 2016 at 04:16 PMUS immigration reform debate - 2h ago
"Wisconsin Gov. Scott Walker asks Donald Trump for more control over refugees - AP"
Read more on madison.com
let's have the committees read the wikileaks' stuff into the congressional record!anne : , December 20, 2016 at 10:30 AMhttp://www.nytimes.com/2016/12/19/opinion/how-republics-end.htmlanne -> anne... , December 20, 2016 at 10:31 AMDecember 18, 2016
How Republics End
By Paul KrugmanRoman politics involved fierce competition among ambitious men. But for centuries that competition was constrained by some seemingly unbreakable rules. Here's what Adrian Goldsworthy's "In the Name of Rome" says: *
"However important it was for an individual to win fame and add to his own and his family's reputation, this should always be subordinated to the good of the Republic. The same belief in the superiority of Rome that made senators by the second century BC hold themselves the equals of any king ensured that no disappointed Roman politician sought the aid of a foreign power."
* http://erenow.com/ancient/in-the-name-of-rome-the-men-who-won-the-roman-empire/7.html
http://erenow.com/ancient/in-the-name-of-rome-the-men-who-won-the-roman-empire/7.htmlilsm -> anne... , December 20, 2016 at 04:18 PM2003
In the Name of Rome: The Men Who Won the Roman Empire
By Adrian GoldsworthyGeneral in exile: Sertorius and the Civil War
Quintus Sertorius (c. 125–72 BC)
The Roman political élite was not unique in its competitiveness and desire to excel. The aristocracies of most Greek cities – and indeed of the overwhelming majority of other communities in the Mediterranean world – were just as eager to win personal dominance and often unscrupulous in their methods of achieving this. Roman senators were highly unusual in channelling their ambitions within fairly narrow, and universally recognized, boundaries. The internal disorder and revolution which plagued the public lives of most city states were absent from Rome until the last century of the Republic. Even then, during civil wars of extreme savagery when the severed heads of fellow citizens were displayed in the Forum, the Roman aristocracy continued to place some limits on what means were acceptable to overcome their rivals. A common figure in the history of the ancient world is the aristocratic exile – the deposed king or tyrant, or the general forced out when he was perceived to be becoming too powerful – at the court of a foreign power, usually a king. Such men readily accepted foreign troops to go back and seize power by force in their homeland – as the tyrant Pisistratus had done at Athens – or actively fought against their own city on their new protector's behalf, like Alcibiades.
Rome's entire history contains only a tiny handful of individuals whose careers in any way followed this pattern. The fifth-century BC, and semi-mythical, Caius Marcius Coriolanus probably comes closest, for when banished from Rome he took service with the hostile Volscians and led their army with great success. In the story he came close to capturing Rome itself, and was only stopped from completing his victory by the intervention of his mother. The moral of the tale was quintessentially Roman. However important it was for an individual to win fame and add to his own and his family's reputation, this should always be subordinated to the good of the Republic. The same belief in the superiority of Rome that made senators by the second century BC hold themselves the equals of any king ensured that no disappointed Roman politician sought the aid of a foreign power. Senators wanted success, but that success only counted if it was achieved at Rome. No senator defected to Pyrrhus or Hannibal even when their final victory seemed imminent, nor did Scipio Africanus' bitterness at the ingratitude of the State cause him to take service with a foreign king.
The outbreak of civil war did not significantly change this attitude, since both sides invariably claimed that they were fighting to restore the true Republic. Use was often made of non-Roman troops, but these were always presented as auxiliaries or allies serving from their obligations to Rome and never as independent powers intervening for their own benefit. Yet the circumstances of Roman fighting Roman did create many highly unorthodox careers, none more so than that of Quintus Sertorius, who demonstrated a talent for leading irregular forces and waging a type of guerrilla warfare against conventional Roman armies. Exiled from Sulla's Rome, he won his most famous victories and lived out the last years of his life in Spain, but never deviated from the attitudes of his class or thought of himself as anything other than a Roman senator and general....
Anne, the analogy to the Roman republic is so far fetched.anne -> anne... , December 20, 2016 at 10:36 AMI am deeply dismayed with pk.
Paul Krugman has drawn on the writing of Adrian Goldsworthy to make sense of and point out what he obviously considers to be a possible undermining of the American republic. The complete Goldsworthy passage strikes me as critical in understanding Krugman.im1dc : , December 20, 2016 at 10:43 AMThough Krugman has mentioned Goldsworthy before, I only began to read "In the Name of Rome" yesterday.
Update re F-35ilsm -> im1dc... , December 20, 2016 at 04:22 PMThe Pentagon's fight for the F-35 with Trump has broken into the open
"F-35 program is not 'out of control', JSF chief fires back at Trump"
By Ryan Maass ... Dec. 20, 2016 ... 1:01 PM
"WASHINGTON, Dec. 20 (UPI) -- The F-35 program is not "out of control" as President-elect Donald Trump suggests, the head of the F-35 program office asserted.
F-35 executive director Lt. Gen. Christopher Bogdan maintained the program was going as planned in response to the incoming president's controversial tweet, which appeared to threaten the plane's funding.
"The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th," Trump tweeted on Dec. 12.
The Lockheed Martin-led effort has been characterized by numerous delays since its inception. Despite the setbacks, however, Bogdan contends the program's leaders have reined in the finances for the production of the 5th-generation fighter.
"I have no doubt, that given the controversy on the F-35 program over the years, that there's a perception that this program is out of control," Bogdan told reporters. "That's in the past."
The program director went on to say industry partners have made necessary adjustments and cut excessive expenditures. However, he also conceded the development phase of the program could face additional delays..."
Before Bogdan came to F-35 he sold the KC 46 (Boeing*) tanker which is going to be a $47B boondoggle.im1dc : , December 20, 2016 at 10:46 AMDevelopment delays.......
there are 160 "production" aircraft on the line and how much development is undone and more untested.
Out of control is buy something that ain't yet designed.
Control is relative.... what is 'in control' in Bogdan's staff meeting is not the real world.
*losing money on a fixed price Boeing will get bailed out like F-35, neither know the extent of the bail out.
The only problem with Trump and the GOP today is what they think and what they doRGC : , December 20, 2016 at 11:02 AMTHOUGHT OF THE DAY:
"There is always an easy solution for every human problem - neat, plausible, and wrong."
H.L. Mencken
Stuckanne -> RGC... , December 20, 2016 at 11:10 AMA Reason writer returns to Appalachia to ask: Why don't people who live in places with no opportunity just leave?
...............
So why don't people just leave? That question is actually surprisingly easy to answer: They did. After all, 80 percent of McDowell's population, including my grandparents, cleared out of the county to seek opportunities elsewhere during the last half-century.
......................So why don't people just leave? That question is actually surprisingly easy to answer: They did. After all, 80 percent of McDowell's population, including my grandparents, cleared out of the county to seek opportunities elsewhere during the last half-century.anne : , December 20, 2016 at 11:14 AM[ This is critically important to understand. What has been and is necessary in economically depressed areas where development over several years time would be unlikely is to assist migration. This is precisely what was done in East Germany to pronounced benefit through Germany but is little recognized or accepted by American analysts. ]
http://www.bradford-delong.com/2016/12/must-read-simon-wren-lewis-_understanding-free-trade_-there-you-have-in-one-calm-and-measured-paragraph-the-con.htmlanne -> anne... , December 20, 2016 at 11:15 AMDecember 20, 2016
Simon Wren-Lewis: Understanding Free Trade: * "There you have, in one calm and measured paragraph, the contradiction at the heart of the argument...
...put forward by Liam Fox and others that leaving the European Union will allow the UK to become a 'champion of free trade'. You cannot be a champion of free trade, and have sovereignty in the form of taking back control. It is not a contradiction, of course, if you are happy to accept the regulatory standards of the US, China or India. That appears to be the position of Leave leaders like MP Jacob Rees Mogg. Ellie Mae O'Hagan spells out what this may mean in practice. Lead in toys--bring them in so we can sign a trade agreement with China. And you can be sure that this will be the nature of the discussion every time a trade deal is signed. In each case we will be told that we have to accept this drop in regulatory standards, because British export jobs are on the line.
This is the point of Dani Rodrik's famous impossible trilemma: ** you cannot have all three of the nation state, democratic politics and deep economic integration (aka free trade). His trilemma replaces sovereignty, by which is meant in this context the nation state being able to do what it likes, by democracy. In the past I have always found this problematic. Surely a democracy can decide to give away a bit of its sovereignty in return for the benefits of international cooperation (in the form of trade deals, or indeed any other kind of international cooperation). After all, every adult in a relationship knows that this relationship means certain restrictions on doing just what they would like...
* https://mainly macro.blogspot.com/2016/12/understanding-free-trade.html
** http://rodrik.typepad.com/dani_rodriks_weblog/2007/06/the-inescapable.html
-- Brad DeLong
"Mainly Macro" must be divided to post a reference link.anne -> anne... , December 20, 2016 at 11:33 AMHaving carefully read the essay by Simon Wren-Lewis, along with this passage from Brad DeLong, the argument here against leaving the European Union makes no sense. Though I think the UK would fare better in the EU, the bitter argument by Wren-Lewis leaves me indifferent. The idea that the UK apart from the EU would suddenly be exploited by the likes of India or China has no logic that I can find.im1dc : , December 20, 2016 at 11:19 AMI have not understood the bitterness of Wren-Lewis to the Labour Party of Jeremy Corbyn since the Brexit vote, especially so since Corbyn wanted the UK to remain part of the EU.
The Trump Two-StepFred C. Dobbs -> im1dc... , December 20, 2016 at 11:33 AMCarlos Slim travels to Trump at Mar-a-Lago yet tells the Lousiana victory rally ""Do not worry. We are going to build the wall,"
So who gets what they want Trump voters or Carlos Slim?
"Trump meets with Carlos Slim as Mexican leaders seek better relations"
By Philip Rucker, Robert Costa and Joshua Partlow...December 19 at 7:29 PM
"In the closing days of his campaign, Donald Trump vilified one of the world's richest men - Mexican billionaire Carlos Slim - as part of a globalist cabal conspiring to extinguish his populist candidacy.
Yet over the weekend, Slim journeyed to Mar-a-Lago, Trump's estate in Palm Beach, Fla., for what the president-elect described as "a lovely dinner with a wonderful man."
The peacemaking gesture - the culmination of weeks of back-channel negotiations that included a secret visit to Mexico City by a Trump envoy - signals a possible thawing between Trump and Mexico's business and political elite, which he had used relentlessly as a foil throughout his campaign.
The communications raised hopes in Mexico's business community that Trump might reconsider his vow to tear up the North American Free Trade Agreement and be persuaded to adopt less hard-line immigration and economic policies, which were cornerstones of his campaign..."
"Do not worry. We are going to build the wall,"im1dc -> im1dc... , December 20, 2016 at 01:27 PM
Trump said, reiterating his promise to erect a
wall along the U.S.-Mexico border to keep out
undocumented immigrants and to make Mexico pay for it.Clarificationim1dc : , December 20, 2016 at 01:36 PMCarlos Slim travels to Trump at Mar-a-Lago yet Trump tells the Lousiana victory rally ""Do not worry. We are going to build the wall,"
Trump running the country is a train wreck waiting to happen, imo, of courseilsm -> im1dc... , December 20, 2016 at 04:26 PMPOLITICS
"China Crisis Was Over Before Trump Even Tweeted About It
President-Elect Would Have Known If He Took Daily Intel Briefing"
A crisis is when a CVN goes under.Fred C. Dobbs : , December 20, 2016 at 01:50 PMLosing a less than useful drone on a mission of no consequence......
What did Trump say? Let them keep it.
Why not?
The better question is why waste your money and sailors time chasing a UUV?
To show a huge land power US is a maritime bully?
Obama Races to Empty Guantánamo Before Term's Endilsm -> Fred C. Dobbs ... , December 20, 2016 at 04:27 PMObama Administration Intends to Transfer 17 or 18
Guantánamo Detainees http://nyti.ms/2i9aL0z
NYT - CHARLIE SAVAGE - December 19, 2016WASHINGTON - When Prime Minister Matteo Renzi of Italy visited the White House in October for a state dinner, he made a commitment to President Obama: Italy, which resettled a Yemeni detainee from Guantánamo Bay last summer, would take one more person on the transfer list. But before the deal was completed, Mr. Renzi resigned.
So a day after his successor, Paolo Gentiloni, formed a government on Dec. 14, Secretary of State John Kerry called to congratulate Mr. Gentiloni - and to urge him to follow through on the commitment, according to an official familiar with the negotiations. Mr. Gentiloni agreed, leading a rush to finalize the details and paperwork.
The effort was part of a burst of urgent, high-level diplomatic talks aimed at moving as many as possible of Guantánamo's 22 prisoners who are recommended for transfer. By law, the Pentagon must notify Congress 30 days before a transfer, so the deadline to set in motion deals before the end of the Obama administration was Monday.
By late in the day, officials said, the administration had agreed to tell Congress that it intended to transfer 17 or 18 of the 59 remaining detainees at the prison; they would go to Italy, Oman, Saudi Arabia and the United Arab Emirates. If all goes as planned, that will leave 41 or 42 prisoners in Guantánamo for Donald J. Trump's administration. Mr. Trump has vowed to keep the prison operating and "load it up with some bad dudes." ...
7.5 years too slow!anne : , December 20, 2016 at 01:56 PMOf course we are growing his Iraq ending!
Good thing we dumped the crook!
December 20, 2016anne : , December 20, 2016 at 01:56 PMValuation
The Shiller 10-year price-earnings ratio is currently 28.08, so the inverse or the earnings rate is 3.56%. The dividend yield is 1.98%. So an expected yearly return over the coming 10 years would be 3.56 + 1.98 or 5.54% provided the price-earnings ratio stays the same and before investment costs.
Against the 5.54% yearly expected return on stock over the coming 10 years, the current 10-year Treasury bond yield is 2.56%.
The risk premium for stocks is 5.54 - 2.56 = 2.98
http://www.multpl.com/shiller-pe/anne -> anne... , December 20, 2016 at 01:57 PMTen Year Cyclically Adjusted Price Earnings Ratio, 1881-2016
(Standard and Poors Composite Stock Index)
December 20, 2016 PE Ratio ( 28.08)
Annual Mean ( 16.71)
Annual Median ( 16.05)-- Robert Shiller
http://www.multpl.com/s-p-500-dividend-yield/im1dc : , December 20, 2016 at 01:56 PMDividend Yield, 1881-2016
(Standard and Poors Composite Stock Index)
December 20, 2016 Div Yield ( 1.98)
Annual Mean ( 4.38)
Annual Median ( 4.33)-- Robert Shiller
"The Subpoena That Rocked The Election Is Legal Garbage, Experts Say"ilsm -> im1dc... , December 20, 2016 at 04:29 PM"The Subpoena That Rocked The Election Is Legal Garbage, Experts Say"
'The warrant assumes that the mere existence of emails from or to Hillary Clinton is probable cause that a crime occurred'
by Matt Ferner, National Reporter, Ryan Grim, Washington bureau chief & Nick Baumann, Senior Enterprise Editor all of The Huffington Post...12/20/2016... 02:25 pm ET...Updated 16 minutes ago
"The warrant connected to the FBI search that Hillary Clinton says cost her the election shouldn't have been granted, legal experts who reviewed the document released on Tuesday told The Huffington Post.
FBI Director James Comey shook up the presidential race 11 days before the election by telling Congress the agency had discovered new evidence in its previously closed investigation into the email habits of Clinton, who was significantly ahead in the polls at the time.
When Comey made the announcement, the bureau did not have a warrant to search a laptop that agents believed might contain evidence of criminal activity. The FBI set out to rectify that two days later, on Oct. 30, when agents applied for a warrant to search the laptop, which was already in the FBI's possession. The FBI had seized the computer as part of an investigation into former Rep. Anthony Weiner, the estranged husband of Clinton aide Huma Abedin.
The unsealed warrant "reveals Comey's intrusion on the election was as utterly unjustified as we suspected at time," Brian Fallon, a Clinton campaign spokesman, said on Twitter Tuesday.
Clinton's lead in the polls shrank in the wake of Comey's announcement. Then, just days ahead of election, the FBI announced its search was complete, and it had found no evidence of criminal activity. Clinton officials believe that second announcement damaged her as much as, or more than, the first, by enraging Trump supporters who believed the fix was in.
The legal experts' argument against the validity of the subpoena boils down to this: The FBI had already publicly announced that it could not prove Clinton intended to disclose classified information. Without that intent, and without evidence of gross negligence, there was no case. The warrant offers no suggestion that proving those elements of the crime would be made easier by searching new emails.
The essence of the warrant application is merely that the FBI has discovered new emails sent between Clinton and Abedin.
That's not enough. The idea that the mere existence of emails involving Clinton may be evidence of a crime is startling, said Ken Katkin, a professor at Salmon P. Chase College of Law.
"The warrant application seems to reflect a belief that any email sent by Hillary Clinton from a private email server is probably evidence of a crime," Katkin said. "If so, then it must be seen as a partisan political act, rather than a legitimate law enforcement action."
The warrant never should have been granted, attorney Randol Schoenberg argued. "I see nothing at all in the search warrant application that would give rise to probable cause, nothing that would make anyone suspect that there was anything on the laptop beyond what the FBI had already searched and determined not to be evidence of a crime, nothing to suggest that there would be anything other than routine correspondence between Secretary Clinton and her longtime aide Huma Abedin," Schoenberg wrote in an email.
"I am appalled," he added, noting that the name of the agent in charge had been redacted in the copy of the document publicly released.
Katkin agreed. "This search warrant application appears to have been meritless. The FBI should not have sought it, and the magistrate judge should not have granted it," he :
...Federal Magistrate Judge Kevin Fox, who approved the search warrant, didn't immediately respond to a request for comment.
"The Fourth Amendment requires you to pretty much know that what you're looking for is there ― not speculation. This is just speculation," Cunningham said."
Find an expert who actually read the Federal Records Act.anne : , December 20, 2016 at 01:56 PMThen find another expert who has held a security clearance and stayed awake for the annual refreshed.
Appeal to unproved authority......
http://www.multpl.com/s-p-500-dividend-yield/anne -> anne... , December 20, 2016 at 02:08 PMDividend Yield, 1881-2016
(Standard and Poors Composite Stock Index)
December 20, 2016 Div Yield ( 1.98)
Annual Mean ( 4.38)
Annual Median ( 4.33)-- Robert Shiller
Accidentally posted here, should have been and was subsequently posted above.im1dc : , December 20, 2016 at 03:11 PMBogle on factoring in Total Return on stocks vs Speculative ReturnMr. Bill : , December 20, 2016 at 03:14 PMhttp://www.marketwatch.com/story/jack-bogles-secrets-to-becoming-a-winning-investor-2016-12-20
"Jack Bogle tells you the secret to becoming a winning investor"
By Chuck Jaffe, Columnist...Dec 20, 2016...11:40 a.m. ET
..."On smart beta investing in general:
Bogle: Smart beta is stupid.
So not one of these new index products is intriguing?
Bogle: No, no, no, no, no. Academics can find anything with these masses of data they have on their computers. They can find something that works in the past, it's as easy as rolling off a log. But it almost never works in the future – and not for very long - because they all forget the most important single thing that happens in our markets reversion to the mean. As the Good Book says, 'And the first shall be last and the last shall be first.'...
On what to expect from the market:
Bogle: The key to stock market investment returns is today's dividend yield [around 2%] plus future earnings growth. Nobody knows what that earnings growth will be, but I am guessing it will be maybe in the range of 4% to 5%. That seems like an informed reasonable expectation.
You compare that with history and we are looking at something very different. An average dividend yield not of 2% but of maybe 4.5%, and earnings growth has averaged over 6% over the last 50 years.
So we have lower earnings forecast and a much lower dividend yield built in. No one is going to change that. It's like buying a bond, what is the interest rate when you buy in. So we're talking about lower returns from investment side, from what corporations do.
The other side of total return on stocks is what we call speculative return, and that's how bullish or bearish investors are, which is measured by the price/earnings multiple -- how many times earnings your companies sell at or the total stock market sells at. Over the long-term past, that number has been about 15 times earnings. Today, depending on who you are listening to, it could be as high as 25 times earnings. ...I look backward at reported earnings after all the bad stuff and I'm looking at a p/e of 25. So the market is at least fully valued and I think it is reasonable to expect possibly negative returns but certainly no positive speculative return.
So we're looking at future market returns, if we are lucky, of 4-5% before the costs of investing are deducted."
"So many opinions, yet, only one truth".Mr. Bill -> Mr. Bill... , December 20, 2016 at 03:18 PMMr. Bill (maybe)
I mean that I am suffering, physically, about the ramifications of Donald Trump being officially elected as the next President of the United States of America. I feel despondent, looking through gloomy glass, looking for a bright shiny object to deflect, even if only for a moment.ilsm -> Mr. Bill... , December 20, 2016 at 04:31 PMCome to Massachusetts weed is legal!im1dc -> Mr. Bill... , December 20, 2016 at 04:32 PMRelax, the Republic will survive, but stay vigilant and active.Mr. Bill : , December 20, 2016 at 03:22 PMI mean if we immediately try to impeach him, we would have Mike Pence (ak Tung) as president. Maybe we could embroil him in a four year impeachment process.Mr. Bill -> Mr. Bill... , December 20, 2016 at 03:35 PMAs he slashes his way, destroying Social Security and Medicare.
Oh my God, who is a female, doesn't like me much and is totally disgusted with humans, in general.im1dc : , December 20, 2016 at 03:55 PMMike Pence as president of the new nighted state of merica.
Double, or triple, the security around Trump.
About the US Weekly Rig Count - DETAILSim1dc : , December 20, 2016 at 04:19 PMhttp://maritime-executive.com/article/us-rig-count-up-on-land-flat-offshore
"U.S. Rig Count Up on Land, Flat Offshore
permian"By MarEx...2016-12-16
"For the seventh week in a row, the benchmark Baker Hughes Rig Count trended upwards, bringing the combined count of active oil and gas rigs in the U.S. to 637. However, only 22 of these were offshore rigs, essentially unchanged from the same period last year.
The largest part of the onshore increase was in Texas, where activity in the Permian Basin and Eagle Ford fields has brought the state's count by 14 rigs in one week. Taken together, the Permian and Eagle Ford accound for nearly half of U.S. drilling activity, with 302 rigs between them. Compared with offshore projects, onshore shale drilling campaigns like those in the Eagle Ford are remarkably inexpensive and brief; a shale well's breakeven price point is typically in the range of $30-40, depending on the field, and it is often a matter of weeks between setting up a rig and pumping first oil.
West Texas Intermediate crude prices were at $52 per barrel on Friday, well above the price point that would induce shale producers to begin new drilling, analysts say. In addition, Goldman Sachs raised its outlook for crude oil prices for mid-2017, predicting WTI prices at $57.50 by the second quarter. Goldman cited the recent OPEC and non-OPEC agreements to cut production by 1.6 million barrels per day, and said that it expects compliance with the cut agreement in excess of 80 percent.
However, assuming that the OPEC agreement holds and that competitors do not raise output to offset it, a price of $57.50 is still below the level at which many offshore projects become competitive, says Wood Mackenzie. In July, the firm found that only 20 percent of deep- and ultra-deepwater projects at the pre-FID stage are commercially viable at $60 per barrel – suggesting that offshore activity may remain quiet until prices rise further."
U.S. Tests Autonomous Swarmboatsilsm -> im1dc... , December 20, 2016 at 04:32 PMaka CARACaS
http://maritime-executive.com/article/us-tests-autonomous-swarmboats
"U.S. Tests Autonomous Swarmboats"
YouTube Video link:
https://www.youtube.com/watch?v=pGsdaqpq-5w"...The autonomy technology being developed by ONR is called Control Architecture for Robotic Agent Command and Sensing, or CARACaS. The components that make up CARACaS (some are commercial off-the-shelf) are inexpensive compared to the costs of maintaining manned vessels..."
If they work as good as a littoral combat ship......ilsm : , -1What could go wrong?
Results of the coup:Unfaithful Electors:
Clinton -5
Trump -2
Cuckoo beats crook! Again.
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Dec 21, 2016 | angrybearblog.com
The Republican controlled House and Senate has been largely busy passing bills in the few days left in 2016. This particular one caught my eye.
Michigan had put in place a new Unemployment System (Michigan Data Automated System or MiDAS) to help in detecting unemployment fraud. With the passage of Senate Bill 1008 by the Republican led House , $10 million is transferred from the Unemployment Contingent Fund to the General Fund to be done with in the General Fund as determined by the Republican held Legislature.
Just a little history; MiDAS was put in place (2013) by Governor Rick Snyder of Flint, Michigan fame to automate the system away from the manual process. The system sends out a series of questions, which the Unemployment Applicant has to answer picking from listed answers. There is no room for explanation. The claimants chosen answers from the list of answers are then loaded into the MiDAS data base and notification is sent to the former employer who then confirms the answers the claimant has listed in the system. If there is any discrepancy, MiDAS assumes the claimant has committed a potential fraud.
Another questionnaire is then sent to the claimant, which is also limited to listed responses. If you do not respond in 10 days, it is assumed a fraud has been committed as determined by MiDAS. A notice is "supposedly" sent out and the claimant has 30 days to answer. If no notice is sent out and the claimant does not answer, MiDAS assumes fraud and the issue goes to collections where just about anything can take place to collect the unemployment funds already given to the claimant. There is little or no human interaction throughout the process and little can be done to explain circumstance during the process.
" The Michigan Unemployment Insurance Agency , partly at the request of the federal government and partly on its own, reviewed 22,427 cases in which a computer determined a claimant had committed civil fraud between October 2013 and October 2015 and found that 20,965 of those cases did not involve fraud. Unemployment Insurance Agency spokesman Dave Murray said on Wednesday. That's an error rate of more than 93%."
The $10 million will be transferred from the Unemployment Contingent Fund which had already grown by 400% after the MiDAS caused spike in fraud cases of which nearly all of them unfounded. Senate Bill 1008 is balancing the state budget on the backs of innocent citizens wrongfully accused of false unemployment claims.
Governor Rick Snyder spent $47 million of taxpayer funds to install MiDAS which has been shown to be correct in determining fraud < 7% of the time. Rather than give the funds to those who were unjustly denied Unemployment Compensation by MiDAS, the Republican led Michigan legislature and Republican governor Rick Snyder are keeping much of it in the Unemployment Contingent (used to train workers and for rainy days) and will also transfer $10 million of it to the General Fund to help balance the budget. This is the same as using the additional Medicaid funding received from the expansion to balance the budget rather than set it aside for later years which would have kept Michigan from having to add to Medicaid funding till 2027. It too was used to balance the budget. By doing so in both cases, the Republicans do not have to raise taxes on the rich in income.
Longtooth , December 18, 2016 8:14 pmrun75441 , December 18, 2016 10:24 pmWhat? You mean to tell me that a conservative right wing republican controlled government is trying to eliminate or grossly reduce a valued safety net feature provided by government (public funds)?
What is the world coming to?
P.S. Did you perhaps think conservatives favor and support public funds use in safety nets for labor (as opposed to capital owner's safety nets)? Whatever gave you that idea? Reagan's "welfare queen" speech perhaps?
beene , December 19, 2016 7:26 amActually, it is the failure of Snyder and the Repubs to acknowledge the error of "MiDAS" in swindling all Michigan citizens in general and have chosen to keep the funds they have swindled rather than acknowledge the error publically and give the funds to those hurt by "MiDAS." Mistakes do happen and it would have been easy enough to fix by adding an area for explanation and in doing two mailings of the questionnaire to the Unemployment applicant. The state is attempting to eliminate people using a computer system which does not allow for applicant error and inturn is not 100% fool-proof in mailing out notification.
The state has already acknowledged that 93% of the time it has made an error and yet they have failed to reconcile it.
Beverly Mann , December 19, 2016 9:13 amRun, if you want to correct problems like this; where error is a feature. Make it a criminal fraud to sell the state or federal government a program that the error rate is more than 4%.
Warren , December 19, 2016 9:44 amThe problem with that suggestion, Beene, is that fraud-criminal or civil-requires knowledge of falsity, or intent to steal. The idea of declaring a particular error rate a criminal fraud is a non sequitur; it's absurd.
But selling a system that so clearly had no ability to accomplish its supposed purpose, and whose purpose seems to have actually been to simply kill the unemployment compensation program-and whose method was accusing virtually everyone of fraud who applied for unemployment compensation-does not appear to be mere incompetence. It does appear to be knowing-i.e., a fraud.
And I would think it is prosecutable. The Justice Dept. apparently hasn't pursued the matter, and of course under Sessions it won't. But two years from now, there will be a Democrat about to be inaugurated as governor and, hopefully also, a Dem as AG. Ingram County (Lansing, the state capitol) is always Dem, I believe, and even now it's prosecutors probably could launch a criminal-fraud inquiry-and it should. But the statute of limitations probably will not have run by, say, mid-2019, so it will still be prosecutable then by a Dem AG's office. And presumably, this will be a big campaign issue statewide in 2018.
Which brings me to this: In virtually every instance (the one exception is Romney during his first two years as governor after running as a moderate, before starting to run as far-right presidential primary candidate) of some rightwing successful businessperson winning a state governorship (and now, president), on the claim that he's been such a success at business, and, well, shouldn't the government be run like a business, that person has proved utterly incompetent. Snyder and Illinois governor Bruce Rauner are exhibits A and B; Florida governor Rick Scott is Exhibit C.
As for people who were falsely accused of fraud under what itself was a fraudulent system, they should file a class action lawsuit in state court against the folks who sold the state that snake oil.
Bill White , December 19, 2016 1:44 pmYou seem to be assuming the problem is with the computer system. If the computer system is simply implementing the law, then there is no fraud by the company that created it. Perhaps the problem is in the law itself, or with the people who do not return the forms when they are supposed to.
There is a very interesting book, written by the estimable Math Babe (www.mathbabe.org), Cathie O'Neill about this phenomenon called Weapons of Math Destruction. I can't recommend it enough. Combining the supposed lack of bias of statistics, conservative's ardent desire to treat the government as just another tool for personal monetary profit and the right's natural desire to kick people when they are down and steal their lunch money means these stories will just proliferate.
The headline in last Sunday's San Jose Mercury News was all about AI as the next wave of technological profit making. The future is not likely to be comforting. Instead of asking where our jetpacks are, we will be asking where all our stuff went.
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Dec 18, 2016 | www.theguardian.com
Michigan government agency wrongly accused individuals in at least 20,000 cases of fraudulently seeking unemployment payments, according to a review by the state.The review released this week found that an automated system had erroneously accused claimants in 93% of cases – a rate that stunned even lawyers suing the state over the computer system and faulty fraud claims.
"It's literally balancing the books on the backs of Michigan's poorest and jobless," attorney David Blanchard, who is pursuing a class action in federal court on behalf of several claimants, told the Guardian on Friday.
The Michigan unemployment insurance agency (UIA) reviewed 22,427 cases in which an automated computer system determined a claimant had committed insurance fraud, after federal officials, including the Michigan congressman Sander Levin, raised concerns with the system.
The review found that the overwhelming majority of claims over a two-year period between October 2013 and August 2015 were in error. In 2015, the state revised its policy and required fraud determinations to be reviewed and issued by employees. But the new data is the first indication of just how widespread the improper accusations were during that period .
The people accused lost access to unemployment payments, and reported facing fines as high as $100,000. Those who appealed against the fines fought the claims in lengthy administrative hearings. And some had their federal and state taxes garnished. Kevin Grifka, an electrician who lives in metro Detroit, had his entire federal income tax garnished by the UIA, after it accused him of fraudulently collecting $12,000 in unemployment benefits.
The notice came just weeks before Christmas in 2014.
"To be honest with you, it was really hard to see your wife in tears around Christmas time, when all of this went on for me," Grifka said.
The computer system claimed that he had failed to accurately represent his income over a 13-week period. But the system was wrong: Grifka, 39, had not committed insurance fraud.
In a statement issued on Friday, Levin called on state officials to review the remaining fraud cases that were generated by the system before the policy revision.
"While I'm pleased that a small subset of the cases has been reviewed, the state has a responsibility to look at the additional 30,000 fraud determinations made during this same time period," he said.
Figures released by the state show 2,571 individuals have been repaid a total of $5.4m. It's unclear if multiple cases were filed against the same claimants.
The findings come as Michigan's Republican-led legislature passed a bill this week to use $10m from the unemployment agency's contingent fund – which is composed mostly of fines generated by fraud claims – to balance the state's budget. Since 2011, the balance of the contingent fund has jumped from $3.1m to $155m, according to a report from a Michigan house agency.
The system, known as the Michigan Integrated Data Automated System (Midas), caused an immediate spike in claims of fraud when it was implemented in October 2013 under the state's Republican governor, Rick Snyder, at a cost of $47m.
In the run-up to a scathing report on the system issued last year by Michigan's auditor general, the UIA began requiring employees to review the fraud determinations before they were issued.
The fraud accusations can carry an emotional burden for claimants.
"These accusations [have] a pretty big burden on people," Grifka said. While he said the new findings were validating and his own case had been resolved, he called for state accountability.
"There's no recourse from the state on what they're doing to people's lives. That's my biggest problem with all of this."
Steve Gray, director of the University of Michigan law school's unemployment insurance clinic, told the Guardian earlier this year that he routinely came across claimants facing a significant emotional toll. As a result, he said, the clinic added the number for a suicide hotline to a referral resource page on the program's website.
"We had just a number of clients who were so desperate, saying that they were going to lose their house they've never been unemployed before, they didn't know," said Gray, who filed a complaint with the US labor department in 2015 about the Midas system.
The fines can be enormous. Residents interviewed by local news outlets have highlighted fraud penalties from the UIA upwards of $100,000 . Bankruptcy petitions filed as a result of unemployment insurance fraud also increased during the timeframe when Midas was in use.
One bankruptcy attorney told the Detroit Metro Times he had as many as 30 cases in 2015 tied to debt from the UIA; before the automated system was implemented, he said he would typically have at most one per year with such claims. The newspaper also found claimants who were charged with fraud despite never having received a single dollar in unemployment insurance benefits.
A pair of lawsuits were filed in 2015 against the UIA over Midas. According to a pending federal case, in which the state revealed it had discontinued using Midas for fraud determinations, the system "resulted in countless unemployment insurance claimants being accused of fraud even though they did nothing wrong".
Blanchard told the Guardian in February that many unemployment applicants may not have realized they were even eligible to appeal against the fraud charge, due to the setup of Midas. Attorneys representing claimants have said that many refuse to ever apply for unemployment benefits again.
A spokesman for the unemployment insurance agency, Dave Murray, said it appreciated Levin's work on the issue and said it was continuing "to study fraud determinations".
The agency had already made changes to the fraud determination process, he said, and "we appreciate that the state legislature this week approved a bill that codifies the reforms we've set in place".
Levin, who represents part of metropolitan Detroit, said in his statement that Michigan officials had to fully account for the money that has flowed into the unemployment agency's contingent fund.
"While I am pleased that $5m has been repaid, it strikes me as small compared to the amount of money that was collected at the time," he said. "Only a full audit will ensure the public that the problem has been fully rectified."
ManuSHeloma 12 Feb 2016 9:02
Another failure of Gov Snyder's administration: first Flint water, now this. What can the people of Michigan expect next? The recall of Snyder should be automated.stuinmichigan pepspotbib 12 Feb 2016 10:02It's not just Snyder and his lackies. You should see the radically gerrymanderd Michigan legislature, run by rightist extremists, directed by the Koch Brothers, the DeVos family and others, via the ALEC program that provides them with the radical right legislation they have passed and continue to pass. Snyder ran saying that sort of stuff was not really on his agenda, but continues to sign it. He's either a liar, an unprincipled idiot, or both. It's bad here. And it's getting worse.DarthPutinbot 12 Feb 2016 9:09What the f*ck is wrong in Michigan? Split it up among the surrounding states and call it good. Michigan destroyed Detroit and cutoff their water. Michigan deliberately poisoned the residents of Flint. Too many Michigan lawyers are crooks or basically inept. The court system screws over parents in divorce cases. And now, Michigan is wrongly trying to collect money from people on trumped up fraud charges. Stop it. The federal government needs to take over the state or bust it up.Non de Plume 12 Feb 2016 9:23Hell, when the system *works* it's ridiculous. Watching my Dad - who had worked continuously since 14 years old save a few months in the early 90s - sitting on hold for hours... At least once a week, to 'prove' he still deserved money from a system he paid into. Hours is not an exaggeration.Bailey Wilkins stuinmichigan 12 Feb 2016 21:56And now this. Goddammit Lansing! How many other ways can you try to save/take money from the poor and end up costing us so much more?!?
Nothing against The Guardian's reporting, but if you follow the links, you'll see FOX 17 has been covering the story locally since last May. It's their investigation that got the attention of all the other publications (including Detroit Metro Times.) Local papers could have done a better job though, agreed on that.talenttruth 12 Feb 2016 12:48Leering, Entitled Republican bastards like Governor Snyder simply HATE poor people. And THAT is because all such bullies are cowards, through-and-through, always selecting as their "victims" those who can't fight back. And, since such Puritan Cretins as Snyder "Believe" that they are rich because of their superior merit, it stands to reason (doesn't it) that "poor people" (actually, all us Little Folk) have NO merit, because we didn't inherit a Trust Fund, Daddy's Business or other anciently stolen wealth. These people deserve stunningly BAD Karma. Unfortunately, Karma has its own timeline and doesn't do what seems just, on a timely basis (usually).Jim Uicker 12 Feb 2016 13:29With today's sophisticated algorithms, computers are used to flag insurance claims all the time. The hit rate is usually much better than 8%. But how can they even consider automating the adjudication of fraud? Fraud is a crime; there should be a presumption of innocence and a right to due process. Without telling people they had a right to appeal, didn't this system violate the constitutional rights of Michigan's most vulnerable citizens: those with no job and therefore no money to defend themselves?Jim Uicker 12 Feb 2016 13:51And what about the employers who paid unemployment insurance premiums month after month, expecting the system to protect their employees from business conditions that would necessitate layoffs? Michigan has defrauded them as well, by collecting premiums and not paying claims.
Even if the problem with Midas can be entirely blamed on the tech workers who built and tested the software, there is no excuse for the behavior of the Snyder administration when they became aware of the problem. Just like the cases of legionnaires disease, where the state failed to alert the public about the outbreak and four more people died, the Snyder administration is again trying to sweep its mistakes under the rug.Jefferson78759 12 Feb 2016 13:55Before taking Midas offline, the UIA refused to comment on the Metro Times investigation, and Snyder himself artfully avoided reporters' questions after being made aware of the result of an investigation by a local television station. Now the state only revealed that it shut down Midas to a pending lawsuit.
The state spent $47 million dollars on a computer system and then took it offline because it didn't work. The flaws in the system are now costing the state many millions more. This level of secrecy is evidence of bad government. The state is supposed to be accountable to taxpayers for that money! Even if the Snyder administration isn't responsible for all of these tragedies, it is definitely responsible for covering them up.
This is the GOP "governing"; treat the average person like a criminal, "save" money on essential infrastructure like water treatment, regardless of the consequences.MaryLee Sutton Henry 12 Feb 2016 22:30I get why the 1% votes GOP but if you're an average person you're putting your financial and physical well being on the line if you do. Crazy.
I was forced to plead guilty by a public defender to the UIA fraud charge & thrown in jail for 4 days without my Diabetic meds or diet in Allegan county. As it stands right now the State of Michigan keeps sending me bills that are almost $1000 more then what the county says I own. I have done community service, and between witholding tax refunds and payments I have paid over $1200 on a $4300 total bill. I have literally spend hours on the phone with UIA and faxing judgements trying to straighten this out, yet still get bills for the higher amount from UIA. Its a nightmare, I have a misdominer, until its paid and refuse to pay no more then $50 per month until they straighten this out. Maybe joining the class action law suit would help. Does anyone have any better ideas??Teri Roy 13 Feb 2016 13:27My son and I both got hit, I was able to dispute mine but he has autism and they would not dismiss his, so at 24 yrs old he's paying back 20 grand in pentailies and interest. Just not rightOutragously Flawless 14 Feb 2016 9:42I also received a letter stating I owe and hadn't file taxes since 2007. I had to find all of my taxes from 2007 to 2013 my question is why did they wait over 5yrs to contact me, or is that the set up H&R block does my taxes and they didn't have records that far back.#sneakyass government
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Dec 11, 2016 | angrybearblog.com
Sandwichman | December 10, 2016 12:51 am
In his neo-Confederate "Mein Kampf," Whither Solid South , Charles Wallace Collins quoted a full paragraph from Hayek's The Road to Serfdom regarding the emptying out of the meaning of words. My instinct would be not to condemn Hayek for the politics of those who quote him. Even the Devil quotes Shakespeare.But after taking another look at the Look magazine comic book edition of Hayek's tome, I realized that Collins's depiction of full employment as a sinister Stalinist plot was, after all, remarkably faithful to the comic-book version of Hayek's argument. With only a little digging, one can readily infer that what the comic book refers to as "The Plan" is a policy also known as full employment (or, if you want to get specific, William Beveridge's Full Employment in a Free Society ). "Planners" translates as cartoon Hayek's alias for Keynesian economists and their political acolytes.
To be sure, Hayek's sole reference to full employment in the book is unobjectionable - even estimable almost:
That no single purpose must be allowed in peace to have absolute preference over all others applies even to the one aim which everybody now agrees comes in the front rank: the conquest of unemployment. There can be no doubt that this must be the goal of our greatest endeavour; even so, it does not mean that such an aim should be allowed to dominate us to the exclusion of everything else, that, as the glib phrase runs, it must be accomplished "at any price". It is, in fact, in this field that the fascination of vague but popular phrases like "full employment" may well lead to extremely short-sighted measures, and where the categorical and irresponsible "it must be done at all cost" of the single-minded idealist is likely to do the greatest harm.
Yes, single-minded pursuit at all costs of any nebulous objective will no doubt be short-sighted and possibly harmful. But is that really what "the planners" were advocating?
Hayek elaborated his views on full employment policy in a 1945 review of Beveridge's Full Employment in a Free Society, in which he glibly characterized Keynes's theory of employment as "all that was needed to maintain employment permanently at a maximum was to secure an adequate volume of spending of some kind."
Beveridge, Hayek confided, was "an out-and-out planner" who proposed to deal with the difficulty of fluctuating private investment "by abolishing private investment as we knew it." You see, single-minded pursuit of any nebulous objective will likely be short-sighted and even harmful unless that objective is the preservation of the accustomed liberties of the owners of private property, in which case it must be done at all cost!
Further insight into Hayek's objection to Keynesian full-employment policy can be found in The Constitution of Liberty . The problem with full employment is those damn unions. On this matter, he quoted Jacob Viner with approval:
The sixty-four dollar question with respect to the relations between unemployment and full employment policy is what to do if a policy to guarantee full employment leads to chronic upward pressure on money wages through the operation of collective bargaining .
and
it is a matter of serious concern whether under modern conditions, even in a socialist country if it adheres to democratic political procedures, employment can always be maintained at a high level without recourse to inflation, overt or disguised, or if maintained whether it will not itself induce an inflationary wage spiral through the operation of collective bargaining
Sharing Viner's anxiety about those damn unions inducing an inflationary wage spiral "through the operation of collective bargaining" was Professor W, H, Hutt, author of the Theory of Collective Bargaining, who "[s]hortly after the General Theory appeared argued that it was a specific for inflation."
Hutt, whose earlier book on collective bargaining "analysed [and heralded] the position of the Classical economists on the relation between unions and wage determination," had his own plan for full employment . It appeared in The South African Journal of Economics in September, 1945 under the title "Full Employment and the Future of Industry." I am posting a large excerpt from Hutt's eccentric full employment "plan" here because it makes explicit principles that are tacit in the neo-liberal pursuit of "non-inflationary growth":
Full employment and a prosperous industry might yet be achieved if what I propose to call the three "basic principles of employment" determine our planning .
The first basic principle is as follows. Productive resources of all kinds, including labour, can be fully employed when the prices of the services they render are sufficiently low to enable the people's existing purchasing power to absorb the full flow of the product.
To this must be added the second basic principle of employment. When the prices of productive service have been thus adjusted to permit full employment, the flow of purchasing power, in the form of wages and the return to property is maximised .
The assertion that unemployment is "voluntary" and can be cured by reducing wages is the classical assumption that Keynes challenged in the theory of unemployment. Hutt's second principle, that full employment, achieved by wage cuts, will maximize the total of wages, profit and rent thus would be not be likely to command "more or less universal assent," as Hutt claimed. But even if it did, Hutt's stress on maximizing a total , regardless of distribution of that total between wages and profits, is peculiar. Why would workers be eager to work more hours for less pay just to generate higher profits? Hutt's principles could only gain "more or less universal assent" if they were sufficiently opaque that no one could figure out what he was getting at, which Hutt's subsequent exposition makes highly unlikely.
Hutt's proposed full employment plan consisted of extending the hours of work, postponing retirement and encouraging married women to stay in the work force. He advertised his idea as a reverse lump-of-labor strategy. Instead of insisting - as contemporary economists do - that immigrants (older workers, automation or imports) don't take jobs, Hutt boasted they create jobs, specifically because they keep wages sufficiently low and thus maximize total returns to property and wages combined. He may have been wrong but he was consistent. Nor did he conceal his antagonism toward trade unions and collective bargaining behind hollow platitudes about inclusive growth .
The U.S. has been following Hutt-like policies for decades now and the results are in :
For the 117 million U.S. adults in the bottom half of the income distribution, growth has been non-existent for a generation while at the top of the ladder it has been extraordinarily strong.
Or perhaps Hutt was right and what has held back those at the bottom of the income distribution is that wages have not been sufficiently low to insure full employment and thus to maximize total returns to labor and capital. The incontestable thing about Hutt's theory is that no matter how low wages go, it will always be possible to claim that they didn't go sufficiently low enough to enable people's purchasing power to absorb the full flow of their services.
coberly , December 10, 2016 11:52 amSandwichman , December 10, 2016 12:40 pmI can't claim to know all of what Hayek meant. but I did read one of his books and it was clear he did not mean what the right has taken him to not only mean, but to have proved.
In any case it is dangerous (and a bit stupid) to base policy on what someone said or is alleged to have said. Especially economists who claim to have "proved" some "law" of economics.
That said, i wonder if some of what is said here is the result of over-reading what someone (else) as said: to be concerned with policies "to the exclusion of all else" is not the same as rejecting the policies while keeping other things in mind. and to recognize the potential of labor unions to force inflationary levels of wages is not the same as opposing labor unions.
neither the advocates in favor of or those opposed to the extreme understanding of these cautions –including the authors of them if that is the case - are contributing much to the development of sane and humane policy.
Barkley Rosser , December 10, 2016 1:21 pmI had always thought Hayek made some good critical points about the illusions of socialists/utopians and then chose to ignore the fact that his criticism also applied to his neo-liberal utopia. But I followed up the passage quoted by Collins and it turns out that Hayek was discussing a statement made by Karl Mannheim, which he quoted out of context and egregiously misrepresented -- a classic right-wing propaganda slander technique. So here is Hayek talking about emptying out the meaning from words and filling them with new content and he is doing just that to the words of another author.
So maybe Hayek didn't overlook the fact that his critique also applied to his utopia. Maybe he knew full well he was misrepresenting what he was selling, engaging in exactly the same propaganda techniques that he attributed to others. By accusing others first of doing what he was doing, it made it awkward for anyone to point out that he was doing it, too. A Rovian strategy - conceal your weakness by attacking others on precisely that issue.
psychohistorian , December 10, 2016 3:08 pmOne of the problems with Hayek is that there was always this conflict between the "comic book Hayek" and the more scholarly and careful Hayek. In fact, there really was a comic book version of The Road to Serfdom put out in the US after WWII, which was full of this inflammatory sort of thing that doing anything to ameliorate the harder edges of capitalism put one inexorably on the road to serfdom.
In the actual RtS one finds Hayek himself supporting quite a few such amiliorations, most notably social insurance, especially national health insurance well beyond what we even have in the US now with ACA.
The problem for lovers of Hayek, and arguably Hayek himself, is that he simply never repudiated this comic book version of his work, even as he and many of his followers got all worked up when people, such as Samuelson, would criticize Hayek for this comic book version of the RtS, pointing out his support for these ameliorations in the original non-comic book version.
However, Samuelson in his last remarks on Hayek, which I published in JEBO some years ago, effectively said that Hayek had only himself to blame for this confusion.
coberly , December 10, 2016 6:41 pmTo me it comes down to whether government is structured to serve all or some obfuscated minority of all. With that as the divider it is easy to decipher Hayek's work and others.
I have been thinking that maybe both "sides" in our mostly brainwashed America today could agree with the meme of "DRAIN-THE-SWAMP" and hope to see it carried proudly on protest signs by the non-zombies of both sides in the ongoing social upheaval.
Sammich
I agree that "accuse the other side of doing what you are doing" is a familiar ploy of the right.
I don't know what Hayek was really saying, or if he let the comic book version stand because he was so flattered to have his child receive such adulation, or just because he was in his dotage and didn't really understand how he was being misrepresented if he was.
but the fun thing to do with Hayek is to point out what he "really" said to those who have only heard the comic book version
if anyone is still talking about him at all. seems there was a big rush of talk about Hyak a few years ago and now it has faded.
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Dec 07, 2016 | economistsview.typepad.com
Thomas Piketty, Emmanuel Saez, Gabriel Zucman:Economic growth in the United States: A tale of two countries, by Thomas Piketty, Emmanuel Saez, Gabriel Zucman, Equitable Growth : Overview The rise of economic inequality is one of the most hotly debated issues today in the United States and indeed in the world. Yet economists and policymakers alike face important limitations when trying to measure and understand the rise of inequality.
One major problem is the disconnect between macroeconomics and the study of economic inequality. Macroeconomics relies on national accounts data to study the growth of national income while the study of inequality relies on individual or household income, survey and tax data. Ideally all three sets of data should be consistent, but they are not. The total flow of income reported by households in survey or tax data adds up to barely 60 percent of the national income recorded in the national accounts, with this gap increasing over the past several decades. 1
This disconnect between the different data sets makes it hard to address important economic and policy questions...
A second major issue is that economists and policymakers do not have a comprehensive view of how government programs designed to ameliorate the worst effects of economic inequality actually affect inequality. Americans share almost one-third of the fruits of economic output (via taxes that help pay for an array of social services) through their federal, state, and local governments. ... Yet we do not have a clear measure of how the distribution of pre-tax income differs from the distribution of income after taxes are levied and after government spending is taken into account. This makes it hard to assess the extent to which governments make income growth more equal. 2
In a recent paper , the three authors of this issue brief attempt to create inequality statistics for the United States that overcome the limitations of existing data by creating distributional national accounts. 3 We combine tax, survey, and national accounts data to build a new series on the distribution of national income. ... Our distributional national accounts enable us to provide decompositions of growth by income groups consistent with macroeconomic growth.
In our paper, we calculate the distribution of both pre-tax and post-tax income. The post-tax series deducts all taxes and then adds back all transfers and public spending so that both pre-tax and post-tax incomes add up to national income. This allows us to provide the first comprehensive view of how government redistribution in the United States affects inequality. Our benchmark series use the adult individual as the unit of observation and split income equally among spouses in married couples. But we also produce series where each spouse is assigned their own labor income, allowing us to study gender inequality and its impact on overall income inequality. In this short summary, we would like to highlight three striking findings.
Our first finding-a surge in income inequality
First, our data show that the bottom half of the income distribution in the United States has been completely shut off from economic growth since the 1970s. ...
It's a tale of two countries. For the 117 million U.S. adults in the bottom half of the income distribution, growth has been non-existent for a generation while at the top of the ladder it has been extraordinarily strong. And this stagnation of national income accruing at the bottom is not due to population aging. ...
Our second finding-policies to ameliorate income inequality fall woefully short
Our second main finding is that government redistribution has offset only a small fraction of the increase in pre-tax inequality. ...
Our third finding-comparing income inequality among countries is enlightening
Third, an advantage of our new series is that it allows us to directly compare income across countries. Our long-term goal is to create distributional national accounts for as many countries as possible; all the results will be made available online on the World Wealth and Income Database . One example of the value of these efforts is to compare the average bottom 50 percent pre-tax incomes in the United States and France. 8 In sharp contrast with the United States, in France the bottom 50 percent of real (inflation-adjusted) pre-tax incomes grew by 32 percent from 1980 to 2014, at approximately the same rate as national income per adult. While the bottom 50 percent of incomes were 11 percent lower in France than in the United States in 1980, they are now 16 percent higher. (See Figure 3.) ... Since the welfare state is more generous in France, the gap between the bottom 50 percent of income earners in France and the United States would be even greater after taxes and transfers.
The diverging trends in the distribution of pre-tax income across France and the United States-two advanced economies subject to the same forces of technological progress and globalization-show that working-class incomes are not bound to stagnate in Western countries. In the United States, the stagnation of bottom 50 percent of incomes and the upsurge in the top 1 percent coincided with drastically reduced progressive taxation, widespread deregulation of industries and services, particularly the financial services industry, weakened unions, and an eroding minimum wage.
Conclusion
Given the generation-long stagnation of the pre-tax incomes among the bottom 50 percent of wage earners in the United States, we feel that the policy discussion at the federal, state, and local levels should focus on how to equalize the distribution of human capital, financial capital, and bargaining power rather than merely the redistribution of national income after taxes. Policies that could raise the pre-tax incomes of the bottom 50 percent of income earners could include:
- Improved education and access to skills, which may require major changes in the system of education finance and admission
- Reforms of labor market institutions to boost workers' bargaining power and including a higher minimum wage
- Corporate governance reforms and worker co-determination of the distribution of profits
- Steeply progressive taxation that affects the determination of pay and salaries and the pre-tax distribution of income, particularly at the top end
The different levels of government in the United States today obviously have the power to make income distribution more unequal, but they also have the power to make economic growth in America more equitable again. Potentially pro-growth economic policies should always be discussed alongside their consequences for the distribution of national income and concrete ways to mitigate their unequalizing effects. We hope that the distributional national accounts we present today can prove to be useful for such policy evaluations. ...
Posted by Mark Thoma on Tuesday, December 6, 2016 at 12:30 PM in Economics , Income Distribution | Permalink Comments (37)
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CommentsYou can follow this conversation by subscribing to the comment feed for this post. pgl : , December 06, 2016 at 12:37 PM
Gabriel Zucman is doing excellent work on this issue as well as how the rich shift income offshore to tax havens.pgl : , December 06, 2016 at 12:39 PM"Reforms of labor market institutions to boost workers' bargaining power and including a higher minimum wage"Denis Drew -> pgl... , December 06, 2016 at 02:44 PMThe argument for this just gets stronger and stronger. Alas, I do not trust Trump to push for this agenda. I hope my distrust is misplaced.
Progressive states can push it on their own -- re-constituting union density locally. Just need to add some dimension of enforcement to what the NLRB helplessly considers illegal -- actually protect employees right to organize commercially.sanjait -> pgl... , December 06, 2016 at 02:54 PMhttp://ontodayspage.blogspot.com/2016/11/first-100-days-progressive-states-agenda.html
"Alas, I do not trust Trump to push for this agenda. I hope my distrust is misplaced."Paul Mathis -> pgl... , December 06, 2016 at 03:35 PMI would hold out no hope for this. Trumputin is not going to empower the people vs the oligarchs. You can with high confidence expect he will do the opposite.
Fox Noise Viewers and Trump VotersThe Rage : , December 06, 2016 at 12:43 PMAre the folks in the bottom half who are getting screwed over. They blame the Mexicans and Chinese for their fates. They made their choice, let them live with it.
This is just capitalism.DrDick -> The Rage... , December 06, 2016 at 12:46 PMNo, it is unjust capitalism (redundant, I know).The Rage -> DrDick... , December 06, 2016 at 01:00 PMAll capitalism is "unjust".pgl -> The Rage... , December 06, 2016 at 01:43 PMYou left out the key line "workers of the world unite". Yep - I'm on a unionization drive.Peter K -> pgl... , December 06, 2016 at 01:54 PMThen why were you for Hillary over Sanders? Doesn't make sense.pgl -> Peter K... , December 06, 2016 at 02:34 PMDid PGL get woke???
LOL
Or is it just that a Republican is in the White House?
Snore!DrDick -> The Rage... , December 06, 2016 at 02:40 PMAs I said, redundant.anne : , December 06, 2016 at 12:45 PMhttp://www.nytimes.com/2016/12/06/business/economy/a-bigger-economic-pie-but-a-smaller-slice-for-half-of-the-us.htmlFred C. Dobbs -> anne... , December 06, 2016 at 12:50 PMDecember 6, 2016
Economic Pie Grows, but Half of U.S. Gets Smaller Slice
By PATRICIA COHENIn 35 years, the U.S. economy has more than doubled, but new research shows close to zero growth for working-age adults in the bottom 50 percent of income.
A Bigger Economic Pie, but a Smaller SliceDrDick : , December 06, 2016 at 12:46 PM
for Half of the U.S. http://nyti.ms/2hdlnuU
NYT - PATRICIA COHEN - December 6Even with all the setbacks from recessions, burst bubbles and vanishing industries, the United States has still pumped out breathtaking riches over the last three and half decades.
The real economy more than doubled in size; the government now uses a substantial share of that bounty to hand over as much as $5 trillion to help working families, older people, disabled and unemployed people pay for a home, visit a doctor and put their children through school.
Yet for half of all Americans, their share of the total economic pie has shrunk significantly, new research has found.
This group - the approximately 117 million adults stuck on the lower half of the income ladder - "has been completely shut off from economic growth since the 1970s," the team of economists found. "Even after taxes and transfers, there has been close to zero growth for working-age adults in the bottom 50 percent."
The new findings, by the economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman, provide the most thoroughgoing analysis to date of how the income kitty - like paychecks, profit-sharing, fringe benefits and food stamps - is divided among the American population.
Inequality has been a defining national issue for nearly a decade, thanks in part to groundbreaking research done by Mr. Piketty at the Paris School of Economics and Mr. Saez at the University of California, Berkeley.
But now a new administration in Washington is promising to reshape the government's role in curbing the intense concentration of wealth at the top and improving the fortunes of those left behind.
During his tenure in the White House, President Obama pushed to address income stagnation by shifting more of the tax burden from the middle class to the rich and expanding public programs like universal health insurance.
Both strategies are now targeted by President-elect Donald J. Trump and Republicans in Congress, led by House Speaker Paul Ryan. Like many conservatives, Mr. Ryan argues that aid to the poor is ultimately counterproductive because it undermines the incentive to work. Proposals put forward by Republican leaders, though short on details, make clear that they want to roll back benefits like Medicaid and the Affordable Care Act, which primarily help the poor, and direct the largest tax cuts to the wealthiest Americans.
About 30 percent of the country's income is channeled to federal, state and local taxes. Apart from military spending and performing basic public services, much of that is distributed back to individuals through various programs and tax benefits in the form of Social Security checks, Medicare benefits and veterans' benefits. But until now, no one has truly measured the full impact that tax payments, government spending, noncash benefits and nontaxable income together have on inequality.
Abundant documentation of income inequality already exists, but it has been challenged as incomplete. Studies have excluded the impact of taxes and value of public benefits, skeptics complained, or failed to account for the smaller size of households over time.
This latest project tries to address those earlier criticisms. What the trio of economists found is that the spectacular growth in incomes at the peak has so outpaced the small increase at the bottom from public programs intended to ameliorate poverty and inequality that the gap between the wealthiest and everyone else has continued to widen.
Stagnant wages have sliced the share of income collected by the bottom half of the population to 12.5 percent in 2014, from 20 percent of the total in 1980. Where did that money go? Essentially, to the top 1 percent, whose share of the nation's income nearly doubled to more than 20 percent during that same 34-year period.
Average incomes grew by 61 percent. But nearly $7 out of every additional $10 went to those in the top tenth of the income scale.
Inequality has soared over that period. In 1980, the researchers found, someone in the top 1 percent earned on average $428,200 a year - about 27 times more than the typical person in the bottom half, whose annual income equaled $16,000.
Today, half of American adults are still pretty much earning that same $16,000 on average - in 1980 dollars, adjusted for inflation - while members of the top 1 percent now bring home $1,304,800 - 81 times as much.
That ratio, the authors point out, "is similar to the gap between the average income in the United States and the average income in the world's poorest countries, the war-torn Democratic Republic of Congo, Central African Republic and Burundi."
The growth of incomes has probably increased a bit since 2014, the latest year for which full data exists, said Mr. Zucman, who, like Mr. Saez, also teaches at the University of California, Berkeley. But it is "not enough to make any significant difference to our long-run finding, and in particular, to affect the long-run stagnation of bottom-50-percent incomes." ...
Damn, it is even worse than I thought, and I thought I was a pessimist.sanjait -> DrDick... , December 06, 2016 at 02:55 PMYup, hard not to get discouraged in these times...anne : , December 06, 2016 at 12:49 PMhttp://www.nytimes.com/2016/12/06/business/economy/a-dilemma-for-humanity-stark-inequality-or-total-war.htmlFred C. Dobbs -> anne... , December 06, 2016 at 01:05 PMDecember 6, 2016
A Dilemma for Humanity: Stark Inequality or Total War
By EDUARDO PORTERDrawing on history, Walter Scheidel of Stanford argues in a coming book that only all-out war might fundamentally alter how resources are distributed.
(Thinking the unthinkable.)Fred C. Dobbs -> Fred C. Dobbs... , December 06, 2016 at 01:40 PMNYT: Is there nothing to be done about galloping inequality?
Last year the typical American family experienced the fastest income gains since the government started measuring them in the 1960s. But the top 1 percent did even better, raising their share of income higher than it was when President Obama took office.
Mr. Obama has led the most progressive administration since Lyndon B. Johnson's half a century ago, raising taxes on the rich to expand the safety net for the less fortunate. Still, by the White House's own account, eight years of trench warfare in Washington trimmed the top 1-percenters' share, after taxes and transfers, to only 15.4 percent, from 16.6 percent of the nation's income. It increased the slice going to the poorest fifth of families by 0.6 percentage point, to a grand total of 4 percent.
The policies also helped push the Republican Party even further to the right, leading to the Tea Party - whose rabid opposition to government redistribution still shakes American politics. They did nothing to salve - and perhaps even added to - the stewing resentment of white working-class Americans who feel left out of the nation's advancements, producing the electoral victory for Donald J. Trump, who has proposed a tax plan that amounts to a lavish giveaway to the rich.
The point is not that President Obama should have done better. He probably did the best he could under the circumstances. The point is that delivering deep and lasting reductions in inequality may be impossible absent catastrophic events beyond anything any of us would wish for.
History - from Ancient Rome through the Gilded Age; from the Russian Revolution to the Great Compression of incomes across the West in the middle of the 20th century - suggests that reversing the trend toward greater concentrations of income, in the United States and across the world, might be, in fact, nearly impossible.
That's the bleak argument of Walter Scheidel, a professor of history at Stanford, whose new book, "The Great Leveler" (Princeton University Press), is due out next month. He goes so far as to state that "only all-out thermonuclear war might fundamentally reset the existing distribution of resources." If history is anything to go by, he writes, "peaceful policy reform may well prove unequal to the growing challenges ahead."
Professor Scheidel does not offer a grand unified theory of inequality. But scouring through the historical record, he detects a pattern: From the Stone Age to the present, ever since humankind produced a surplus to hoard, economic development has almost always led to greater inequality. There is one big thing with the power to stop this dynamic, but it's not pretty: violence. ...
Hmmm. At some point, the powers thatmrrunangun -> Fred C. Dobbs... , December 06, 2016 at 02:10 PM
be may want to organize a gigantic
apocalyptical world-wide conflict
that does NOT go nuclear because
that would be Really Excessive.After his success in the Red- White civil war, Lenin began the destruction of the hereditary rich and the educated professional classes in the Soviet Union. Executions were common as were slower deaths in work camps ridden with lice and typhus. He had to cut back on the pace of destruction after a few years because he found he could not run the country without technical experts and so some of the engineers, doctors, professors, etc were allowed to live out their days and care for some of their impoverished relatives. A book on the subject, "Former People" gives details of the methods used for selecting and liquidating the pre-revolutionary Elite. Not for the squeamish.anne : , December 06, 2016 at 12:51 PMhttp://gabriel-zucman.eu/files/PSZ2016.pdfanne -> anne... , December 06, 2016 at 03:34 PMDecember 2, 2016
Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel ZucmanAbstract
This paper combines tax, survey, and national accounts data to estimate the distribution of national income in the United States since 1913. Our distributional national accounts capture 100% of national income, allowing us to compute growth rates for each quantile of the income distribution consistent with macroeconomic growth. We estimate the distribution of both pre-tax and post-tax income, making it possible to provide a comprehensive view of how government redistribution affects inequality. Average pre-tax national income per adult has increased 60% since 1980, but we find that it has stagnated for the bottom 50% of the distribution at about $16,000 a year. The pre-tax income of the middle class- adults between the median and the 90th percentile-has grown 40% since 1980, faster than what tax and survey data suggest, due in particular to the rise of tax-exempt fringe benefits. Income has boomed at the top: in 1980, top 1% adults earned on average 27 times more than bottom 50% adults, while they earn 81 times more today. The upsurge of top incomes was first a labor income phenomenon but has mostly been a capital income phenomenon since 2000. The government has offset only a small fraction of the increase in inequality. The reduction of the gender gap in earnings has mitigated the increase in inequality among adults. The share of women, however, falls steeply as one moves up the labor income distribution, and is only 11% in the top 0.1% today.
http://gabriel-zucman.eu/files/PSZ2016.pdfPeter K : , December 06, 2016 at 01:18 PMDecember 2, 2016
Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel ZucmanConclusion
This paper has combined tax, survey, and national accounts data to build series on the distribution of total National Income in the United States since 1913. Our "Distributional National Accounts" estimates capture 100% of National Income and hence provide decompositions of growth by income groups consistent with macroeconomic economic growth. We compute both pre-tax and post-tax series. Post-tax series deduct all taxes and add back all transfers and public spending so that they also aggregate to total National Income. We find an overall U-shape for pre-tax and post-tax income concentration over the century. The surge in income concentration since the 1970s was first a labor income phenomenon but has been mostly a capital income phenomenon since 2000. Since 1980, growth in real incomes for the bottom 90% adults has been only about half of the national average on pre-tax basis and about two-thirds on a post-tax basis. Median pre-tax incomes have hardly grown since 1980. The reduction of the gender gap in earnings has played an important role in mitigating the increase in inequality among adults since the late 1960s but the gender gap is far from being closed especially at the upper earnings end. Tax progressivity at the top has declined since the 1960s but the generosity of transfers at the bottom has increased hereby mitigating the dramatic worsening in inequality.
Our objective is to extend the methods developed in this paper to as many countries as possible in the coming years. The ultimate goal is to be able to compare inequality across countries and over time rigorously. Just like we use GDP or national income to compare the macroeconomic performance of countries today, so could distributional national accounts be used to compare inequality tomorrow. We also hope that our work can contribute to foster international collaborations between academics and statistical institutes in order to produce more and more consistent and systematic "Distributional national accounts." The same methodology is currently being applied and extended to more countries.
"Given the generation-long stagnation of the pre-tax incomes among the bottom 50 percent of wage earners in the United States, we feel that the policy discussion at the federal, state, and local levels should focus on how to equalize the distribution of human capital, financial capital, and bargaining power rather than merely the redistribution of national income after taxes."sanjait -> Peter K... , December 06, 2016 at 02:59 PMKrugman:
"So what would a political manifesto aimed at winning over these voters look like? You could promise to make their lives better in ways that don't involve bringing back the old plants and mines - which, you know, Obama did with health reform and Hillary would have done with family policies and more. But that apparently isn't an acceptable answer."
Chris Dillow:
"I have a slightly different beef. It's that this form of centrism offers too etiolated a vision of equality. Inequality isn't simply a matter of pay packets but of power too. Centrism fails to tackle the latter. This is a big failing not least because policies to increase productivity might require greater equality of power in the workplace – something which technocratic centrism has long ignored."
It's really easy to say we should "equalize" before tax outcomes, but notably, the authors don't even attempt to say with specificity how to do that.pgl -> sanjait... , December 06, 2016 at 03:07 PMNot that it isn't a worthwhile endeavor, but when everyone saying we should do it fails to say how to do it, it shows there are neither obvious answers nor long hanging fruit.
It should be noted though that in addition to after tax stuff like Obamacare and family support policies, mainstream Dems like Obama and Clinton also support education at all levels and ages and working bargaining through a friendly NLRB, which fall right into the categories the paper authors specified.
Got better ideas? The world needs them.
One idea is to counter monopsony power in the labor market by increasing wage floors. But when I suggest this - baby poor PeterK gets confused (he has no idea what we are talking about as usual) so he gets all MAD.Peter K : , December 06, 2016 at 01:41 PM"You could promise to make their lives better in ways ... which, you know, Obama did with health reform and Hillary would have done with family policies and more."sanjait -> Peter K... , December 06, 2016 at 03:00 PMGotta love that "and more."
Boosting the safety net a tiny little bit does help with bargaining power but not much.
Democrats have to be much more bold and explicit - like Bernie Sanders was - or Trump is just going to win again in 2020.
It's not enough for Democrats to just be better than Republicans (even as Obama pushes the TPP). That's a very low bar.
ACA and Hillary's family support policies were huge.pgl -> sanjait... , December 06, 2016 at 03:08 PMCalling those "a little bit" shows you're one of those faux progressives who wants a "revolution" but really doesn't appreciate how actual government policies affect actual working peoples' lives.
"faux progressives". Bingo! But give PeterK a break - understanding how the real world works gets in the way of his day job - hurling insults.Peter K : , December 06, 2016 at 01:46 PM"Given the generation-long stagnation of the pre-tax incomes among the bottom 50 percent of wage earners in the United States, we feel that the policy discussion at the federal, state, and local levels should focus on how to equalize the distribution of human capital, financial capital, and bargaining power rather than merely the redistribution of national income after taxes."Peter K -> Peter K... , December 06, 2016 at 01:50 PMPeople have no right complain! They're just being racist and nostalgic for old days of white male hetero Christian privilege.
EMichael wants to purge all of the Bernie Sanders voters who voted for Hillary in the general.
He equates them with Susan Sarandon and Jill Stein, since they didn't like Hillary.
When EMichael would defend centrist Bill Clinton and Obama's etiolated record of progressivism, he'd argue that FDR and LBJ had large marjorities of Democrats.
Yeah but back then FDR and LBJ had to work with and compromise with racist Democrats from the South in Congress.
That's why they New Deal and War on Poverty was imperfect but it was a lot better than what Bill Clinton or Obama left behind.
http://www.cc.com/full-episodes/np0e6l/the-daily-show-with-trevor-noah-december-5--2016---van-jones-season-22-ep-22032sanjait -> Peter K... , December 06, 2016 at 03:02 PMLast night's Daily Show.
Van Jones is 15 minutes in.
Peter K ... light on policy, but heavy on grudges. Epitomizing the more-progressive-than-thou crowd.pgl -> sanjait... , December 06, 2016 at 03:09 PMWow - concise and to the point writing. I should take a writing class from you.Denis Drew : , December 06, 2016 at 02:40 PM" coincided with drastically reduced progressive taxation, widespread deregulation of industries and services, particularly the financial services industry, weakened unions, and an eroding minimum wage "sanjait : , December 06, 2016 at 03:06 PM"weakened unions?"
Read disappeared unions. 6% union density in private industry is analogous to 20/10 blood pressure -- it starves every other healthy economic and political process.
Re-constitute union density and unions will be your social cop on every corner -- goodbye "reduced progressive tax, dereged industries and services espec' financial and the eroded minimum wage."
****************************
Just happened to post this somewhere else today -- talk about eroded!!!!!!!!!!!!dbl-indexed is for inflation and per capita income growth -- 2013 dollars:
yr..per capita...real..(nominal)..dbl-index...%-of
68...15,473....10.74..(1.60)......10.74......100%
69-70-71-72-73
74...18,284.....9.43...(2.00)......12.61
75...18,313.....9.08...(2.10)......12.61
76...18,945.....9.40...(2.30)......13.04........72%
77
78...20,422.....9.45...(2.65)......14.11
79...20,696.....9.29...(2.90)......14.32
80...20,236.....8.75...(3.10)......14.00
81...20,112.....8.57...(3.35)......13.89........62%
82-83-84-85-86-87-88-89
90...24,000.....6.76...(3.80)......16.56
91...23,540.....7.26...(4.25)......16.24........44%
92-93-94-95
96...25,887.....7.04...(4.75)......17.85
97...26,884.....7.46...(5.15)......19.02........39%
98-99-00-01-02-03-04-05-06
07...29,075.....6.56...(5.85)......20.09
08...28,166.....7.07...(6.55)......19.45
09...27,819.....7.86...(7.25)......19.42........40%
10-11-12-13-14-15-16If we could have foretold to Americans of 1968 that by early 2007 the minimum wage would have dropped almost in half in real terms (instead of almost tripling in real terms to keep up with national productivity gains) -- what could they have possibly guessed: a comet strike, a limited nuclear exchange, multiple world plagues?
Good and important stuff.pgl -> sanjait... , December 06, 2016 at 03:12 PMDecomposed data is tremendously valuable, and making it publicly available for many countries is a huge service.
I will again note that this piece falls into the category of diagnosing-but-not-proposing-anything-specific-to-address-the-problem, from which we are seeing many pieces of commentary these days, but I think it's a useful part of the process to collectively go through this realization phase.
But these authors take a good half-step forward in proposing a useful framework for the *types* of policies that would be helpful. And it's a very good framework (I say with bias, because it's the same one i've long had). That's also worth something, in addition to the invaluable contribution of data.
Having real world data that would illuminate progressive issues is indeed a useful contribution. But those faux progressives would just call our praise for this hard yet important work centrist neoliberal elitism. Yes - they love their pointless labels as it makes actual analysis so obsolete.llisa2u2 : , December 06, 2016 at 03:45 PMHow about "CAPS" on all top federal positions- presidents, vice-presidents,cabinet members, senators, representatives. There needs to be Federal and STATE "CAPS" established across the US. "CAPS" on University president wages, University coaches wages, etc. etc. THEN, minimize all the pensions that the present 5 ex-Presidents are still getting, security guards, upkeep and expense on homes etc. etc. The US citizens are really being forced to support a closed ARISTOCRACY. Just start a list of all the extra-perks that the ARISTOCRACY are receiving. Some are receiving benefits to sons, daughter, cousins, close relatives etc. etc. Just how much $$$ is given to 20 year-olds that haven't worked except through patronage positions, because of "cronies" giving them a job because of immediate family connections. The mess of political patronage on the Federal and State levels need to be discussed and dissected. If Us taxpayers had to bail out private investors, insurance companies and hedge-funds because of the TBTF fiasco, then let these companies that were bailed out come to the focus on just how much churning, and bad investment advise occurred that enabled the rape WORKERS in civil-service jobs across the US. Come on MSM and MSE start revealing the behind-the-scenes patronage that has sucked the $$ from the general public. The $$$ was sucked into the DC swamp by the Left, the Right, and the In-Betweeners that hide beyond the snow-job propaganda messages to the GP.llisa2u2 : , -1One sentence should include the words:.... the rape of WORKERS PENSIONS.......
Just side note, the old European guilds, and unions KNEW what they were doing in their organizational structures and why. The majority of US workers today don't have a clue. Too many blue collar and white collar workers have been suckered by the New Boss, who's exactly the same as the Old Boss, if not worse!
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Nov 30, 2016 | angrybearblog.com
What follows is from Today's Democratic Party: Meeting America's Challenges, Protecting America's Values , a.k.a., the 1996 Democratic Party Platform. This is the section on immigration. I took the liberty of bolding pieces I found interesting.
Democrats remember that we are a nation of immigrants. We recognize the extraordinary contribution of immigrants to America throughout our history. We welcome legal immigrants to America. We support a legal immigration policy that is pro-family, pro-work, pro-responsibility, and pro-citizenship , and we deplore those who blame immigrants for economic and social problems.
We know that citizenship is the cornerstone of full participation in American life. We are proud that the President launched Citizenship USA to help eligible immigrants become United States citizens. The Immigration and Naturalization Service is streamlining procedures, cutting red tape, and using new technology to make it easier for legal immigrants to accept the responsibilities of citizenship and truly call America their home.
Today's Democratic Party also believes we must remain a nation of laws. We cannot tolerate illegal immigration and we must stop it. For years before Bill Clinton became President, Washington talked tough but failed to act. In 1992, our borders might as well not have existed. The border was under-patrolled, and what patrols there were, were under-equipped. Drugs flowed freely. Illegal immigration was rampant. Criminal immigrants, deported after committing crimes in America, returned the very next day to commit crimes again.
President Clinton is making our border a place where the law is respected and drugs and illegal immigrants are turned away. We have increased the Border Patrol by over 40 percent; in El Paso, our Border Patrol agents are so close together they can see each other. Last year alone, the Clinton Administration removed thousands of illegal workers from jobs across the country. Just since January of 1995, we have arrested more than 1,700 criminal aliens and prosecuted them on federal felony charges because they returned to America after having been deported.
However, as we work to stop illegal immigration, we call on all Americans to avoid the temptation to use this issue to divide people from each other. We deplore those who use the need to stop illegal immigration as a pretext for discrimination . And we applaud the wisdom of Republicans like Mayor Giuliani and Senator Domenici who oppose the mean-spirited and short-sighted effort of Republicans in Congress to bar the children of illegal immigrants from schools - it is wrong, and forcing children onto the streets is an invitation for them to join gangs and turn to crime.
Democrats want to protect American jobs by increasing criminal and civil sanctions against employers who hire illegal workers , but Republicans continue to favor inflammatory rhetoric over real action. We will continue to enforce labor standards to protect workers in vulnerable industries. We continue to firmly oppose welfare benefits for illegal immigrants. We believe family members who sponsor immigrants into this country should take financial responsibility for them, and be held legally responsible for supporting them.
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Dec 02, 2016 | www.zerohedge.com
As another month passes, the great schism inside the American labor force get wider. We are referring to the unprecedented divergence between the total number of high-paying manufacturing jobs, and minimum-wage food service and drinking places jobs, also known as waiters and bartenders. In October, according to the BLS, while the number of people employed by "food services and drinking places" rose by another 18,900, the US workforce lost another 4,000 manufacturing workers.
This is the fourth consecutive month of declining manufacturing workers, and the 7th decline in the past 10 months.
The chart below puts this in context: since 2014, the US had added 571,000 waiters and bartenders, and has lost 34,000 manufacturing workers.
While we would be the first to congratulate the new American waiter and bartender class, something does not smell quite right. On one hand, there has been a spike in recent restaurant bankruptcies or mass closures (Logan's, Fox and Hound, Bob Evans), which has failed to reflect in the government report. On the other hand, as the National Restaurant Association's Restaurant performance activity index showed in October, overall industry sentiment is the worst since the financial crisis, due to declines in both same-store sales and customer traffic, suggesting that restaurant workers should now be in the line of fire for mass layoffs.
However, what we find more suspect, is that according to the BLS' seasonally adjusted "data", starting in March of 2010 and continuing through September of 2016, there has been just one month in which restaurant workers lost jobs, and alternatively, jobs for waiters and bartenders have increased in 80 out of the past 81 months, with just one month of job losses, something unprecedented in this series history.
Putting this divergence in a long context, since the official start of the last recession in December 2007, the US has gained 1.8 million waiters and bartenders, and lost 1.5 million manufacturing workers. Worse, while the latter series had been growing, if at a slower pace than historically, it has now clearly rolled over, and in 2016, some 60,000 manufacturing jobs have been lost.
Like last month, we remain curious what this "data" series will look like after it is revised by the BLS shortly after the NBER declares the official start of the next recession.
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www.nytimes.com
... it's also worth examining a 21-page briefing paper issued on Oct. 25 by Obama White House economists about an important concept with a forbidding name: labor market monopsony. The paper is a prime example of the direction left-of-center economic policy is going, evident not just in the Obama administration's second-term priorities but in a range of work at liberal think tanks and in Mrs. Clinton's own economic proposals.
Labor market monopsony is the idea that when there isn't enough competition among businesses, it is bad news for workers. When an industry includes only a few big companies, they don't have to compete with one another as hard to attract employees - and so end up paying their workers less than they would if there were true competition. It's the flip side of how monopoly power lets companies charge higher prices to consumers.
It's an idea that has a long lineage in economic thought but has been barely discussed in mainstream policy-making circles until recently. Every year since 1947, White House economists have issued the "Economic Report of the President," describing in great detail the United States' strengths and challenges. The phrase "labor market monopsony" appears not once in tens of thousands of pages.
The talk of monopsony is part of a shift in the policy tools that many left-of-center economic thinkers see as most promising for addressing the economic challenges of poor and middle-class Americans. Rather than focusing on policies that amount to redistribution - tax rates, the social welfare system - they are looking at how the rules of the economic game shape people's outcomes.
Some use a term for this set of policies coined by the Yale political scientist Jacob Hacker: predistribution policy. This is policy that shapes how the market works in the first place, as opposed to redistribution policy, which assumes a free market will generate growth and then uses taxes and spending to give a lift to the economy's losers.
To understand the dueling approaches, think of a professional sports league that finds that richer, big-market teams are consistently at an advantage, making games less entertaining. One approach would be to tack on a few extra points to the small-market team's score when it plays a larger rival. That's the equivalent of redistribution.
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Nov 21, 2016 | therealnews.com
Economist Michael Hudson explains how economic terms like capital gains are deployed to mislead the public about who is benefiting from economic policy and where wealth is going Michael Hudson is a Distinguished Research Professor of Economics at the University of Missouri, Kansas City. He is the author of The Bubble and Beyond and Finance Capitalism and its Discontents . His most recent book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy .
SHARMINI PERIES, TRNN: Welcome back to the Real News Network. I'm Sharmini Peries coming to you from Baltimore.Today I'm being joined in our Baltimore studio by economist Michael Hudson. Michael has a new book out J is for Junk Economics: A Survivor's Guide to Economic Vocabulary in an Age of Deception. Michael is a distinguished Research Professor of Economics at the University of Missouri, Kansas City. Thanks so much for joining us Michael.
MICHAEL HUDSON: Good to be here in your Baltimore studio.
PERIES: Thank you. So Michael, in the first segment we spoke more generally in terms of how people are misled through our policy makers in Washington in particular. But give us some specific examples of some of the terms used to mislead us.
HUDSON: Well take the word capital gains. People originally think capital gaisn, you have the image of industry growing and innovation taking place. There's an indication as if somehow when real estate and housing prices go up, everybody's getting richer. When the stock prices go up, the economies got richer. So Hillary Clinton was able ot say, look at how the stock market soared in the last 8 years thanks to Mr. Obama.
Well the stock market has soared but now the employees working conditions for the stock market. Most of these capital gains don't simply reflect what the textbooks say. The textbooks say, well a company's worth whatever it's expected future earnings are. So the reason stocks are going up and bonds are going up and real estate is rents are going to go up and profits are going up and the economy is expanding and everybody's getting richer. But that's not why the stock market goes up at all.
The stock market has gone up since 2008 in America, in Europe, all over the world because the central banks have flooded the economy with creating new money. They didn't create the money to hire workers. They didn't create the money to build infrastructure, they didn't create the money to invest in the economy. They didn't create the money to pay off the mortgages of people who had junk mortgages and were exploitive. They didn't create the money to write of student loans. All the money that was created, every penny, was created to give to the banks. To the Wall Street banks at 0.1% interests to create reserves at the Federal Reserve so that the banks could then lend out money and what did they do to ' who did they lend it to?
Well they lent to corporate [raiders]. So, part of the reason the stock market has gone up is that corporate [raiders] have borrowed very inexpensively 1%, say from a bank, and bought companies whose dividend rates are 3% or 4 or 5% and they get what's called the arbitrage, the difference. So all of a sudden you have the take over a company with borrowed money. As a result of paying interest to the banks and this borrowed money, you don't have to pay income tax on it because this is counted as a cost of doing business, not as a cost of takeover.
The first thing they do is tighten working condition. They work the labor harder. They let the labor force go. When people retire, they don't hire new workers. They just work the remaining workers all the more. So, what's happened isn't a new investment. It's just the opposite. It's disinvestment. It's asset stripping. What creates the stock market going up is not capital formation. It's asset stripping. When Donald Trump calls that wealth creation, it means his wealth- meaning the money he's been able to make. But that money has been made by making the economy poorer.
So, when people talk about the economy, they have to realize that it's actually money layers. Not everybody is a millionaire working on Wall Street. Some people actually have to work for paychecks and out of their paychecks they have to pay rising healthcare costs, rising money to the banks, rising debt service. They have to borrow more money just to break even. Their rents are going way up to larger portions of their income.
So, what people are actually left with to spend is maybe 25 to 30% of their income on goods and services after paying taxes and after paying the FIRE sector (Finance, Insurance, Real Estate). Whether it's housing insurance or mortgage insurance. So there's an idea of distracting people. Don't think of your condition. Think of how the overall economy is doing. But don't think of the economy as an overall unit. Think of the stock market as the economy. Think of the rich people as the economy. Look at the yachts that are made. Somebody's living a lot better. Couldn't it be you?
Well they don't explain why it's not you. The reason they're living better is what used to be called a transfer payment. Something that is not really earned but it's just a transfer of income like from a rent when a landlord will raise the rent, all of a sudden, same house, nobody's invested more. Nobody's saying oh your rent's going up about $50 a month this month. No that's a transfer payment. You just have to pay more. The landlord didn't do anything to earn that more money. He just found that he's able to squeeze more money out of you.
So squeezing money out of you to make money for a [inaud.] class and that was a word that used to be used 100 years ago, the [inaud.] were people who lived on rents. They were coupon clippers, they were landlords, they were the idle rich who inherited money and somehow you have like even the words widows and orphans. People say you have to provide large capital gains, meaning debt financed asset price inflation so that the widows and orphans can survive. The widows and orphans are all living on trust funds. Or they're living on alimony. Or they're living on inherited wealth. People forget that before 1900, widows and orphans used to be poor people. We're talking Charles Dickens type novels. Widows and orphans were the people who needed welfare. They weren't the millionaires.
So today when people talk about widows and orphans, they mean millionaires [widows and orphans,]. When they talk about the low interest rates that capitalists aren't making to get rich enough, that's really hurting the pension funds. Our hearts bleed for the workers. Their hearts aren't bleeding for the workers. They're trotting out pension funds in front of their factotums to say, make the pension funds richer and behind them, the fact is that 75% of all the stocks and bonds are really owned by just a small percentage of the American population they're really talking about themselves.
So, you have the economic vocabulary turning into vocabulary of deception. So, I go over what this vocabulary is and what the concepts are and I also talk about what the original concepts were in classical economics. Everyone from Adam Smith, John Stewart Mill, they were all reforms. What they wanted to reform was getting rid of this parasitic landlord class that had conquered England in 1066 and it's the heirs of the military of the warlords ended up taking the land and just making everybody pay them and all of their descendants for not doing anything. Just for being conquered.
You could say that the carry over of this today. The rent that people have to pay, the money they have to pay the banks instead of having a public option. That's the price they still have to pay for being conquered. The group that I'm working with is trying to promote public options. We're trying to promote public banking that would provide credit cards, banking services, [vanilla] services at a fraction of the price that Chase Manhattan or Citi Bank or Bank of America charges.
Yea all these charges that people pay are economically unnecessary. There's no real cost behind them. There's no value behind them. So, they're what the classical economist called empty pricing. Prices with no real cost value. What they called fictitious capital. Capital that clings on junk mortgage borrowers that actually ' the pretense that all these debts can be paid but it's all fictitious because everybody knows at least on Wall Street everybody knows that debts can't be paid. That somebody has to default and Wall Street's plan is well make the government reimburse us like the bailouts that happened in 2008 so that we don't lose, let's pass all of the loss onto the tax payers without changing the banks, without throwing our guys in jail even though these were fraudulent mortgages.
PERIES: And the government itself doesn't pay its debt.
HUDSON: That's right. The whole idea is that it doesn't. At least if it does pay the debt, it only pays ' there are two kinds of debts that the governments have. They have a debt to the bond holders and they do pay that. They have a debt to the social security recipients. Hillary promised she was going to cut back social security. She was going to cut back social spending and social security and medical care so that the government would have enough money to pay her backers on Wall Street. So she was Obama's legacy. A standing for Wall Street.
A stand in is a politician who can deliver her constituency to her Wall Street backers and that's what a politician does in America. You get a constituency; you make them believe your promises and then you turn them over to your financial campaign backers. That's what politics has become and that's as much an art of deception as economics is.
PERIES: Now Donald Trump is proposing to spend trillions of dollars in terms of infrastructure development in this country. That sounds very good. Of course, in the immediate future that means jobs for people. But what is the problem with that kind of infrastructure development in the long term and what kind of plan is he thinking of when he's thinking infrastructure development?
HUDSON: There are many ways of building infrastructure. The way Donald Trump would like, he's like to spend like aa hundred million dollars building a new bridge in the highway. Then he would like to sell it, privatize it to a private buy like himself for 10 million dollars. So, the government would spend a huge amount of money that could've been used for a free bridge or a free road. He'll then sell it for 10 million dollars to a private owner and then the private owner will put a toll booth up and charge money for coming across and make a mint.
This is what happened in England under Margaret Thatcher. This is called Thatcherism and it's what destroyed the English economy. It's what's destroying the European economy and turning Europe into a dead zone. So, you could do infrastructure in the way of a giveaway. A real infrastructure would be the government would indeed pay for rebuilding this. But the whole idea of what mad America rich in the 19th century was the government will develop this infrastructure and it will provide these services freely to the population. Because if you begin to charge people for bridges and for roads and for parking meters as is in Chicago and for everything else that's being privatized, you're going to have even higher costs of living and the wages are going to go up and it will be even harder to compete with foreign countries and to make exports because nobody can afford to pay the prices that the American workers have to pay just to live and export in competition with Asia or even Europe or Germany.
Germany doesn't have all of these costs. Germany has very low rental charges. Maybe 10-15% of your income. Not 40% as here. Low priced public health, free autobahn to drive on. Not at all like this. So, Donald Trump wants essentially to double the cost of living for everybody and give the capital away to his republican backers and essentially leave the whole country unemployed but the 1% is going to be very, very rich.
PERIES: Right. Now let's go back to some specific examples in terms of the kind of infrastructure that Donald Trump wants to build. So, he wants to build new airports. He says our airports are outdated. He wants to build new roads and new bridges and build a wall over the US-Mexico border. All of these are considered infrastructure. In the past we've been told that public-private partnerships are actually a good thing. It even sounds good, public-private partnerships for the betterment of society. But it really isn't and in terms of myth making, where does this take us?
HUDSON: The word public partnership it's really a one way partnership. The private, tells the government what to do. All of the costs are born by the government. All of the risks and the profits go to the private sector. It really means we're creating an opportunity for banks to make a killing on making loans for all of this will be financed by bank credit. That banks or bond holders are going to be paid very high interest rates on.
The government could create all this money the same way banks do. The government has computer keyboards which is how a bank creates money. They could create their own money without having to pay interests to anyone. They could either charge the airlines for it or they could provide the airports more freely but public partnerships are designed to quadruple or quintuple the actual costs of doing business and pretend that this is in the public interests instead of just in the interests of the banks and the corporate insiders that the banks are willing to leave money to.
If you look at investigative journalists looked at just one horror story after another of private public partnerships. Look at London's railroads. Look at what England did with the railroads. Water. Public Private partnership for water. People now have to pay huge amounts just to get water in England, that used to be free. The transportation quality goes down. The price goes way up. So the partnership is a very exploited. We're not talking about equal partnership. We're talking about a dominate submissive sadomasochistic partnership.
PERIES: Then this point you were making about the government can print all the money they want if they want to invest it in infrastructure and own that infrastructure, they can make money to then pay back the treasury if they need to. But instead they're going to borrow the money from these banks and then be indebted. So is this kind of debt a bad thing?
HUDSON: Well the debt is bad when you have to repay it. All new money is a kind of debt. All money is created on a computer. You can look at it in terms of a balance sheet. When you create, when you go into a bank and you want a loan, the bank will give you a bank deposit and you'll sign a promissory note. The bank has an asset and you have a debt to the bank and you can spend your deposit anyway. But the bank charges money for all of this. The government can do the same thing. The Federal Reserve and the Treasury. The Treasury can just print, issue a 1 trillion dollar coin for instance. Give it to the Federal Reserve and the Fed can issue notes about it. You could call to claim whatever you want. It's all constitutional because you can assign any level price you want to a coin. All money is just created artificially.
So, it's a monopoly it's a legal privilege and for thousands of years from Mesopotamia through Greece and Rome, all the money was created by the temples to make sure that it was honest money. But it was all privatized after over thousands of years of history and now banks charge for something that the government can do for free.
PERIES: Michael, for Donald Trump and the Republicans, they are against creating debt aren't they?
HUDSON: No. They know that most people are afraid of going into debt. Because if you go into debt you actually have to repay it. Government debt doesn't have to be repaid. If you repaid government debt, there wouldn't be anymore money. What they're really looking for is - the way to cut debt is by cutting the deficit and what we want to cut is social security. We want to a sort of downsize it. Hillary wanted to put it into the stock market. We want to pay less social spending. We want less medical care. We want to spend less money on the 95% of the population so all the money gets spent on the top 5%.
So, they're really against what debt is spent for. They're against democratic debt. They're against democracy. What they really want is oligarchic debt which used to be state socialism. Government will only give money to the banks. They're all for the kind of debt that is the bank bailout in 2008. They're all for giving money to Wall Street. They're all for giving subsidies to Donald Trump for building his buildings in New York and enabling him to make a killing. They're just against giving debt to the workers or to the middle class or to the cities or to anyone who's not one of the 5%.
PERIES: Alright so this is the kind of austerity plan that Paul Ryan '
HUDSON: Austerity is the word.
PERIES: - is trying to promote that he wants Donald Trump to sign onto.
HUDSON: Right.
PERIES: Alright Michael I thank you so much for joining us today. And thank you for joining us on the Real News Network.
End
DISCLAIMER: Please note that transcripts for The Real News Network are typed from a
recording of the program. TRNN cannot guarantee their complete accuracy.
Take one sentence from your cited passage: "When they (Who are 'they'? The nearest plural noun is 'millionaires'. The next nearest is 'widows and orphans'. The next is 'people'. I think Prof Hudson means 'people' as the antecedent, because they are talking about widows and orphans at the start of the previous sentence. Let's go with that assumption.) talk about the low interest rates that capitalists arent (sic) making to get rich enough, thats (sic) really hurting the pension funds."fjwhite goedelite • 38 minutes agoWho are the "people" talking about the low interest rates? What is meant by "low interest rates that capitalists aren't making to get rich enough"? If the widows and orphans are now the millionaires for whom large capital gains are needed for their survival, my guess Hudson means that the millionaires cannot rely on interest income, because that has been suppressed in order to allow the banks to make low interest mortgage loans. That is for the debt financed housing industry's asset price inflation.
That sector is supposed to be the engine of recovery, a questionable recovery to be sure. The pension funds that used to be able to rely on interest income to finance its future obligations do not have that any longer. The funds have been investing in the equity market and some in the derivative market through hedge funds. The funds are an excuse for the asset price inflation of the stock market brought on by Fed policy.
The Fed is saying that in order for the pension funds to meet their obligations, asset prices must be inflated to make the equity positions profitable.
It's a Ponzi scheme, a house of cards. When the next card is put in place, it may topple the entire flimsy structure. Omitted from the discussion is the global position of the US dollar, whose value is inflated by the damage that neoliberal policies have done to Europe's economy and the euro.
I sympathize with the Professor's effort to explain a conspiratorial web of policies by the Fed, the banks, the real estate industry, and the MIC (mostly implied) to support an economic system based on the economic viability of an economy that is not productive of consumer goods and services, an economy based on the imports, an economy dedicated to global hegemony based on huge military expenditures.
This non-productive, US economy depletes the savings of those who still have them and places at great risk the economic security of what used to be called the middle-class.
Oh, well, goedelite, your contribution clears up whatever confusion I had about MH's passage. I'm being sarcastic, of course. But your valiant effort is much appreciated. ;=)Capitalism's Finest • linkThe good folks at TRNN should remind MH that the Real News is, I presume, for the general public -- real people not egghead economists. He must find a way to connect with us in a clear, concise, and coherent way. In listening to Michael, his spoken words don't seem able to keep pace with his racing, out-of-control brain.
Go easy on us mere mortals, Professor Hudson.REAL ECONOMICS DICTIONARYlobdillj • link
- "Capital gains" do not apply to people who work for a living. It applies to rich people.
- "Stock market increase" does not mean anything to you. It means better returns for rich corporations.
- "Arbitrage" is "borrowing money for zero interest", then buying a "3-4% return investment."
- "Asset stripping" is Trump's brand of capitalism.
- "Paycheck workers" are invisible to banks.
- "The economy" refers to "rich people" - not you.
- "A transfer payment" is when a landlord raises rent for no reason.
- "Squeezing money" out of you is how the "rentier class" and "coupon clippers" make their money.
- "Widow and orphans" is an old excuse for capital gains tax waivers.
- "Low interest rates" are irrelevant to "pension fund" growth. They are for "large investors."
- "The parasitic landlord class makes people pay" for "being poor;" which is really "the banks".
- "Public banking" eliminates "economically unnecessary empty pricing" that has "no real cost value."
- "Fiction capital" examples include "junk mortgages" because they "can't be paid" and bring " a default".
- "Public private partnerships" are a "myth" where "govt bears the cost" and "privateers bears the profit."
- "The govt can print all the money it wants" to "make infrastructure" but instead "borrows from banks."
- "Printing money is bad" by the government "only when you have to repay it."
- "Money used to be printed in the temples" but now its "printed by banks who charge" for it.
- "Republicans" are fine with "oligarchic debt." Yet social security and healthcare are "democratic debt."
- "Republicans" are only against debt if it involves, "workers" or anyone "outside of the top five percent."
- "Paul Ryan" wants "austerity debt" for workers because it does not favor "the top five percent."
I think Hudson misspoke when at about 11:53 he says, "and the wages are going to go up".As I understood him he spoke correctly: If the cost of living goes up, employers, in having to at least maintain a workforce, will have to pay their employers more. But this makes it harder for companies to export their goods, which leads to attrition of the workforce which he spoke of earlier.Ellis lobdillj • linkWhat I think you recognized is that 'real wages' go down.
Anyway, it's clear that this is unsustainable. Murray Rothbard called this economic system a Ponzi Scheme.
I'm pretty sure that he meant to say wages go down. So, I agree with you. One other thing is that countries like Brazil seemed not to understand that putting up toll booths (literally) on their roads was not the best most cost effective way to go about this. Here in California we do have toll bridges, but toll roads. We pay for our road maintenance through excise taxes on gas and tires. And it's a state function.elkhornsun • linkThe big lie from Trump and others is referring to a corporate tax rate of 35%. Corporations are now paying far less in income taxes than at any time in the past 80 years. Companies including Apple and GE and Chevron and Verizon are paying no income taxes. Income taxes and fees (which includes payroll taxes and social security payments) are a way to have the government extract income and wealth from workers and their families and pass it along to those in the unreal economy who derive their income and wealth as rentiers or in the finance industry that turns equity into debt for millions of Americans. 40% of what is counted as part of the GDP in the United States is debt servicing which provides no real goods or real services and is only a transfer of wealth from the working classes to the one percent. That is why when government economists talk about the economy growing they are not talking about the true economic situation of workers and their families who are in no better shape today than they were in 2008 when the economy collapsed thanks to the massive fraud perpetrated by people in the banking and finance and insurance and mortgage companies, none of who were tried for their criminal actions and none went to jail (unlike many of the participants in the Savings & Loan industry collapse under Reagan).Rob M • linkTrillions of dollars were stolen by the same people that are serving in the Treasury Department and in the Federal Reserve and the government (executive, supreme court, congress) is run by Wall Street for Wall Street. Millenials would be wise to emigrate to a country with a less corrupt government and people approaching retirement would do well to emigrate as well to a country where the cost of living is lower and the odds of a climate change disaster is less than in much of the Unites States.
This development of infrastructure as a public private partnership is the dark flip side of a new deal economy. What it means as Hudson points out is essentially public money used to fund the building programs, then passing the profit making over to a private company.Kiers Rob M • linkThe strong ties of Wall Street to the Democratic party seems to have reached the end of its credibility with the public. The money now has flipped to a more authoritarian control. This is a familiar shift throughout history when the strings of control begin to show, when the veil begins to be lifted and the liberal establishment loses its credibility, wham! their is a shift to fascism. Worryingly this shift is usually followed by war. Which forces a kind of 'reset' both economically and politically.
This whole sequence, the rise of a faux liberal elite,(who really just serve moneyed masters) then a slow discrediting of that elite as their real motives are slowly revealed, then an angered public backlash, which importantly (this is important to understand) is still controlled by the moneyed classes. Resulting in a rise of authoritarianism and an insular tribal outlook often characterized by racism...in other words fascism.
the US has REPEATEDLY killed off it's liberal / left side (literally: Joseph McCarthy) and now we have this strange right wing world.Matt William W Haywood • linkThat's certainly an integral part of it. Michael Hudson just focused his analysis on what one aspect* of what "capital gains" really means: it's the gains made by corporate raiders after money is printing for their sake, who then go on to essentially partake in asset stripping.The authoritarian part you bring up is the flip side of the coin: given the resulting damage to the general economy, for the corporate raiders to continue their raiding they'll have to keep the people in tight control.
* That aspect is what's "traditionally" called the "economic" side, as opposed the social side. That's the tradition, anyway, that the capitalist pigs have been trying so hard to indoctrinate us with. If I recall correctly, Amartya Sen is the first (only?) "Nobel Prize" winning economist who defined "economics" to include the impact on the people's quality of life.
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Nov 19, 2016 | crookedtimber.org
dbk 11.18.16 at 6:41 pm 130
Bruce Wilder @102The question is no longer her neoliberalism, but yours. Keep it or throw it away?
I wish this issue was being seriously discussed. Neoliberalism has been disastrous for the Rust Belt, and I think we need to envision a new future for what was once the country's industrial heartland, now little more than its wasteland (cf. "flyover zone" – a pejorative term which inhabitants of the zone are not too stupid to understand perfectly, btw).
The question of what the many millions of often-unionized factory workers, SMEs which supplied them, family farmers (now fully industrialized and owned by corporations), and all those in secondary production and services who once supported them are to actually do in future to earn a decent living is what I believe should really be the subject of debate.
As noted upthread, two factors (or three, I guess) have contributed to this state of despair: offshoring and outsourcing, and technology. The jobs that have been lost will not return, and indeed will be lost in ever greater numbers – just consider what will happen to the trucking sector when self-driving trucks hit the roads sometime in the next 10-20 years (3.5 million truckers; 8.7 in allied jobs).
Medicaid, the CHIP program, the SNAP program and others (including NGOs and private charitable giving) may alleviate some of the suffering, but there is currently no substitute for jobs that would enable men and women to live lives of dignity – a decent place to live, good educations for their children, and a reasonable, secure pension in old age. Near-, at-, and below-minimum wage jobs devoid of any benefits don't allow any of these – at most, they make possible a subsistence life, one which requires continued reliance on public assistance throughout one's lifetime.
In the U.S. (a neoliberal pioneer), poverty is closely linked with inequality and thus, a high GINI coefficient (near that of Turkey); where there is both poverty and a very unequal distribution of resources, this inevitably affects women (and children) and racial (and ethnic) minorities disproportionately. The economic system, racism, sexism, and xenophobia are not separate, stand-alone issues; they are profoundly intertwined.
I appreciate and espouse the goals of identity politics in all their multiplicity, and also understand that the institutions of slavery and sexism predated modern capitalist economies. But really, if you think about it, slavery was defined as ownership, ownership of human capital (which was convertible into cash), and women in many societies throughout history were acquired as part of a financial transaction (either through purchase or through sale), and control of their capital (land, property [farmland, herds], valuables and later, money) often entrusted to a spouse or male guardian. All of these practices were economically-driven, even if the driver wasn't 21st-century capitalism.
Also: Faustusnotes@100
For example Indiana took the ACA Medicaid expansion but did so with additional conditions that make it worse than in neighboring states run by democratic governors.And what states would those be? IL, IA, MI, OH, WI, KY, and TN have Republican governors. Were you thinking pre-2014? pre-2012?
To conclude and return to my original point: what's to become of the Rust Belt in future? Did the Democratic platform include a New New Deal for PA, OH, MI, WI, and IA (to name only the five Rust Belt states Trump flipped)?
kidneystones 11.18.16 at 11:32 pm ( 135 )
Thomas Pickety" Let it be said at once: Trump's victory is primarily due to the explosion in economic and geographic inequality in the United States over several decades and the inability of successive governments to deal with this.
Both the Clinton and the Obama administrations frequently went along with the market liberalization launched under Reagan and both Bush presidencies. At times they even outdid them: the financial and commercial deregulation carried out under Clinton is an example. What sealed the deal, though, was the suspicion that the Democrats were too close to Wall Street – and the inability of the Democratic media elite to learn the lessons from the Sanders vote. "
The Guardian
kidneystones 11.18.16 at 11:56 pm 137 ( 137 )
What should have been one comment came out as 4, so apologies on that front.I spent the last week explaining the US election to my students in Japan in pretty much the terms outlined by Lilla and PIketty, so I was delighted to discover these two articles.
Regional inequality and globalization are the principal drivers in Japanese politics, too, along with a number of social drivers. It was therefore very easy to call for a show of hands to identify students studying here in Tokyo who are trying to decide whether or not to return to areas such as Tohoku to build their lives; or remain in Kanto/Tokyo – the NY/Washington/LA of Japan put crudely.
I asked students from regions close to Tohoku how they might feel if the Japanese prime minister decided not to visit the region following Fukushima after the disaster, or preceding an election. The tsunami/nuclear meltdown combined with the Japanese government's uneven response is an apt metaphor for the impact of neo-liberalism/globalization on Japan; and on the US. I then explained that the income inequality in the US was far more severe than that of Japan and that many Americans did not support the export of jobs to China/Mexico.
I then asked the students, particularly those from outlying regions whether they believe Japan needed a leader who would 'bring back Japanese jobs' from Viet Nam and China, etc. Many/most agreed wholeheartedly. I then asked whether they believed Tokyo people treated those outside Kanto as 'inferiors.' Many do.
Piketty may be right regarding Trump's long-term effects on income inequality. He is wrong, I suggest, to argue that Democrats failed to respond to Sanders' support. I contend that in some hypothetical universe the DNC and corrupt Clinton machine could have been torn out, root and branch, within months. As I noted, however, the decision to run HRC effectively unopposed was made several years, at least, before the stark evidence of the consequences of such a decision appeared in sharp relief with Brexit.
Faustusnotes 11.19.16 at 12:14 am 138
Also worth noting is that the rust belts problems are as old as Reagan – even the term dates from the 80s, the issue is so uncool that there is a dire straits song about it. Some portion of the decline of manufacturing there is due to manufacturers shifting to the south, where the anti Union states have an advantage. Also there has been new investment – there were no Japanese car companies in the us in the 1980s, so they are new job creators, yet insufficient to make up the losses. Just as the decline of Virginia coal is due to global forces and corporate stupidity, so the decline of the rust belt is due to long (30 year plus) global forces and corporate decisions that predate the emergence of identity politics.
It's interesting that the clear headed thinkers of the Marxist left, who pride themselves on not being distracted by identity, don't want to talk about these factors when discussing the plight of their cherished white working class. Suddenly it's not the forces of capital and the objective facts of history, but a bunch of whiny black trannies demanding safe spaces and protesting police violence, that drove those towns to ruin.
And what solutions do they think the dems should have proposed? It can't be welfare, since we got the ACA (watered down by representatives of the rust belt states). Is it, seriously, tariffs? Short of going to an election promising w revolution, what should the dems have done? Give us a clear answer so we can see what the alternative to identity politics is.
basil 11.19.16 at 5:11 am
Did this go through?
Thinking with WLGR @15, Yan @81, engels variously above,The construction 'white working class' is a useful governing tool that splits poor people and possible coalitions against the violence of capital. Now, discussion focuses on how some of the least powerful, most vulnerable people in the United States are the perpetrators of a great injustice against racialised and minoritised groups. Such commentary colludes in the pathologisation of the working class, of poor people. Victims are inculpated as the vectors of noxious, atavistic vices while the perpetrators get off with impunity, showing off their multihued, cosmopolitan C-suites and even proposing that their free trade agreements are a form of anti-racist solidarity. Most crucially, such analysis ignores the continuities between a Trumpian dystopia and our satisfactory present.
I get that the tropes around race are easy, and super-available. Privilege confessing is very in vogue as a prophylactic against charges of racism. But does it threaten the structures that produce this abjection – either as embittered, immiserated 'white working class' or as threatened minority group? It is always *those* 'white' people, the South, the Working Class, and never the accusers some of whom are themselves happy to vote for a party that drowns out anti-war protesters with chants of USA! USA!
Race-thinking forecloses the possibility of the coalitions that you imagine, and reproduces ideas of difference in ways that always, always privilege 'whiteness'.
--
Historical examples of ethnic groups becoming 'white', how it was legal and political decision-making that defined the present racial taxonomy, suggest that groups can also lose or have their 'whiteness' threatened. CB has written here about how, in the UK at least, Eastern and Southern Europeans are racialised, and so refused 'whiteness'. JQ has written about southern white minoritisation. Many commentators have pointed that the 'white working class' vote this year looked a lot like a minority vote.
Given the subordination of groups presently defined as 'white working class', I wonder if we could think beyond ethnic and epidermal definition to consider that the impossibility of the American Dream refuses these groups whiteness; i.e the hoped for privileges of racial superiority, much in the same way that African Americans, Latin Americans and other racialised minorities are denied whiteness. Can a poor West Virginian living in a toxified drugged out impoverished landscape really be defined as a carrier of 'white privilege'?
I was first pointed at this by the juxtapositions of racialised working class and immigrants in Imogen Tyler's Revolting Subjects – Social Abjection and Resistance in Neoliberal Britain but this below is a useful short article that takes a historical perspective.
Why the Working Class was Never 'White'
The 'racialisation' of class in Britain has been a consequence of the weakening of 'class' as a political idea since the 1970s – it is a new construction, not an historic one.
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This is not to deny the existence of working-class racism, or to suggest that racism is somehow acceptable if rooted in perceived socio-economic grievances. But it is to suggest that the concept of a 'white working class' needs problematizing, as does the claim that the British working-class was strongly committed to a post-war vision of 'White Britain' analogous to the politics which sustained the idea of a 'White Australia' until the 1960s.
Yes, old, settled neighbourhoods could be profoundly distrustful of outsiders – all outsiders, including the researchers seeking to study them – but, when it came to race, they were internally divided. We certainly hear working-class racist voices – often echoing stock racist complaints about over-crowding, welfare dependency or exploitative landlords and small businessmen, but we don't hear the deep pathological racial fears laid bare in the letters sent to Enoch Powell after his so-called 'Rivers of Blood' speech in 1968 (Whipple, 2009).
But more importantly, we also hear strong anti-racist voices loudly and clearly. At Wallsend on Tyneside, where the researchers were gathering their data just as Powell shot to notoriety, we find workers expressing casual racism, but we also find eloquent expressions of an internationalist, solidaristic perspective in which, crucially, black and white are seen as sharing the same working-class interests.
Racism is denounced as a deliberate capitalist strategy to divide workers against themselves, weakening their ability to challenge those with power over their lives (shipbuilding had long been a very fractious industry and its workers had plenty of experience of the dangers of internal sectarian battles).
To be able to mobilize across across racialised divisions, to have race wither away entirely would, for me, be the beginning of a politics that allowed humanity to deal with the inescapable violence of climate change and corporate power.
*To add to the bibliography – David R. Roediger, Elizabeth D. Esch – The Production of Difference – Race and the Management of Labour, and Denise Ferreira da Silva – Toward a Global Idea of Race. And I have just been pointed at Ian Haney-López, White By Law – The Legal Construction of Race.
Hidari 11.19.16 at 8:16 am 152
FWIW 'merica's constitutional democracy is going to collapse.
Some day - not tomorrow, not next year, but probably sometime before runaway climate change forces us to seek a new life in outer-space colonies - there is going to be a collapse of the legal and political order and its replacement by something else. If we're lucky, it won't be violent. If we're very lucky, it will lead us to tackle the underlying problems and result in a better, more robust, political system. If we're less lucky, well, then, something worse will happen .
In a 1990 essay, the late Yale political scientist Juan Linz observed that "aside from the United States, only Chile has managed a century and a half of relatively undisturbed constitutional continuity under presidential government - but Chilean democracy broke down in the 1970s."
Linz offered several reasons why presidential systems are so prone to crisis. One particularly important one is the nature of the checks and balances system. Since both the president and the Congress are directly elected by the people, they can both claim to speak for the people. When they have a serious disagreement, according to Linz, "there is no democratic principle on the basis of which it can be resolved." The constitution offers no help in these cases, he wrote: "the mechanisms the constitution might provide are likely to prove too complicated and aridly legalistic to be of much force in the eyes of the electorate."
In a parliamentary system, deadlocks get resolved. A prime minister who lacks the backing of a parliamentary majority is replaced by a new one who has it. If no such majority can be found, a new election is held and the new parliament picks a leader. It can get a little messy for a period of weeks, but there's simply no possibility of a years-long spell in which the legislative and executive branches glare at each other unproductively.'
http://www.vox.com/2015/3/2/8120063/american-democracy-doomed
Given that the basic point is polarisation (i.e. that both the President and Congress have equally strong arguments to be the the 'voice of the people') and that under the US appalling constitutional set up, there is no way to decide between them, one can easily imagine the so to speak 'hyperpolarisation' of a Trump Presidency as being the straw (or anvil) that breaks the camel's back.
In any case, as I pointed out before, given that the US is increasingly an urbanised country, and the Electoral College was created to protect rural (slave) states, the grotesque electoral result we have just seen is likely to recur, which means more and more Presidents with dubious democratic legitimacy. Thanks to Bush (and Obama) these Presidents will have, at the same time, more and more power.
Eventually something is going to break.
dbk 11.19.16 at 10:39 am ( 153 )
nastywoman @ 150
Just study the program of the 'Sozialdemokratische Partei Deutschland' or the Program of 'Die Grünen' in Germany (take it through google translate) and you get all the answers you are looking for.No need to run it through google translate, it's available in English on their site. [Or one could refer to the Green Party of the U.S. site/platform, which is very similar in scope and overall philosophy. (www.gp.org).]
I looked at several of their topic areas (Agricultural, Global, Health, Rural) and yes, these are general theses I would support. But they're hardly policy/project proposals for specific regions or communities – the Greens espouse "think global, act local", so programs and projects must be tailored to individual communities and regions.
To return to my original question and answer it myself: I'm forced to conclude that the Democrats did not specifically address the revitalization – rebirth of the Rust Belt in their 2016 platform. Its failure to do so carried a heavy cost that (nearly) all of us will be forced to pay.
Soullite 11.19.16 at 12:46 pm 156
This sub seems to have largely fallen into the psychologically comfortable trap of declaring that everyone who voted against their preferred candidate is racist. It's a view pushed by the neoliberals, who want to maintain he stranglehold of identity politics over the DNC, and it makes upper-class 'intellectuals' feel better about themselves and their betrayal of the filthy, subhuman white underclass (or so they see it).
I expect at this point that Trump will be reelected comfortably. If not only the party itself, but also most of its activists, refuse to actually change, it's more or less inevitable.
You can scream 'those jobs are never coming back!' all you want, but people are never going to accept it. So either you come up with a genuine solution (instead of simply complaining that your opponents solutions won't work; you're partisan and biased, most voters won't believe you), you may as well resign yourself to fascism. Because whining that you don't know what to do won't stop people from lining up behind someone who says that they do have one, whether it'll work or not. Nobody trusts the elite enough to believe them when they say that jobs are never coming back. Nobody trusts the elite at all.
You sound just like the Wiemar elite. No will to solve the problem, but filled with terror at the inevitable result of failing to solve the problem.
mclaren 11.19.16 at 2:37 pm 160
One brutal fact tells us everything we need to know about the Democratic party in 2016: the American Nazi party is running on a platform of free health care to working class people. This means that the American Nazi Party is now running to the left of the Democratic party.
Folks, we have seen this before. Let's not descend in backbiting and recriminations, okay? We've got some commenters charging that other commenters are "mansplaining," meanwhile we've got other commenters claiming that it's economics and not racism/misogyny. It's all of the above.
Back in the 1930s, when the economy collapsed, fascists appeared and took power. Racists also came out of the woodwork, ditto misogynists. Fast forward 80 years, and the same thing has happened all over again. The global economy melted down in 2008 and fascists appeared promising to fix the problems that the pols in power wouldn't because they were too closely tied to the existing (failed) system. Along with the fascists, racists gained power because they were able to scapegoat minorities as the alleged cause of everyone's misery.
None of this is surprising. We have seen it before. Whenever you get a depression in a modern industrial economy, you get scapegoating, racism, and fascists. We know what to do. The problem is that the current Democratic party isn't doing it.
Instead, what we're seeing is a whirlwind of finger-pointing from the Democratic leadership that lost this election and probably let the entire New Deal get rolled back and wiped out. Putin is to blame! Julian Assange is to blame! The biased media are to blame! Voter suppression is to blame! Bernie Sanders is to blame! Jill Stein is to blame! Everyone and anyone except the current out-of-touch influence-peddling elites who currently have run the Democratic party into the ground.
We need the feminists and the black lives matter groups and we also need the green party people and the Bernie Sanders activists. But everyone has to understand that this is not an isolated event. Trump did not just happen by accident. First there was Greece, then there was Brexit, then there was Trump, next it'll be Renzi losing the referendum in Italy and a constitutional crisis there, and after that, Marine Le Pen in France is going to win the first round of elections. (Probably not the presidency, since all the other French parties will band together to stop her, but the National Front is currently polling at 40% of all registered French voters.) And Marine LePen is the real deal, a genuine full-on out-and-out fascist. Not a closet fascist like Steve Bannon, LePen is the full monty with everything but a Hugo Boss suit and the death's heads on the cap.
Does anyone notice a pattern here?
This is an international movement. It is sweeping the world . It is the end of neoliberalism and the start of the era of authoritarian nationalism, and we all need to come together to stamp out the authoritarian part.
Feminists, BLM, black bloc anarchiest anti-globalists, Sandernistas, and, yes, the former Hillary supporters. Because it not just a coincidence that all these things are happening in all these countries at the same time. The bottom 90% of the population in the developed world has been ripped off by a managerial and financial and political class for the last 30 years and they have all noticed that while the world GDP was skyrocketing and international trade agreements were getting signed with zero input from the average citizen, a few people were getting very very rich but nobody else was getting anything.
This hammered people on the bottom, disproportionately African Americans and especially single AA mothers in America. It crushed the blue collar workers. It is wiping out the savings and careers of college-educated white collar workers now, at least, the ones who didn't go to the Ivy League, which is 90% of them.
And the Democratic party is so helpless and so hopeless that it is letting the American Nazi Party run to the left of them on health care, fer cripes sake! We are now in a situation where the American Nazi Party is advocating single-payer nationalized health care, while the former Democratic presidential nominee who just got defeated assured everyone that single-payer "will never, ever happen."
C'mon! Is anyone surprised that Hillary lost? Let's cut the crap with the "Hillary was a flawed candidate" arguments. The plain fact of the matter is that Hillary was running mainly on getting rid of the problems she and her husband created 25 years ago. Hillary promised criminal justice reform and Black Lives Matter-friendly policing policies - and guess who started the mass incarceration trend and gave speeches calling black kids "superpredators" 20 years ago? Hillary promised to fix the problems with the wretched mandate law forcing everyone to buy unaffordable for-profit private insurance with no cost controls - and guess who originally ran for president in 2008 on a policy of health care mandates with no cost controls? Yes, Hillary (ironically, Obama's big surge in popularity as a candidate came when he ran against Hillary from the left, ridiculing helath care mandates). Hillary promises to reform an out-of-control deregulated financial system run amok - and guess who signed all those laws revoking Glass-Steagal and setting up the Securities Trading Modernization Act? Yes, Bill Clinton, and Hillary was right there with him cheering the whole process on.
So pardon me and lots of other folks for being less than impressed by Hillary's trustworthiness and honesty. Run for president by promising to undo the damage you did to the country 25 years ago is (let say) a suboptimal campaign strategy, and a distinctly suboptimal choice of presidential candidate for a party in the same sense that the Hiroshima air defense was suboptimal in 1945.
Calling Hillary an "imperfect candidate" is like calling what happened to the Titanic a "boating accident." Trump was an imperfect candidate. Why did he win?
Because we're back in the 1930s again, the economy has crashed hard and still hasn't recovered (maybe because we still haven't convened a Pecora Commission and jailed a bunch of the thieves, and we also haven't set up any alphabet government job programs like the CCC) so fascists and racists and all kinds of other bottom-feeders are crawling out of the political woodwork to promise to fix the problems that the Democratic party establishment won't.
Rule of thumb: any social or political or economic writer virulently hated by the current Democratic party establishment is someone we should listen to closely right now.Cornel West is at the top of the current Democratic establishment's hate list, and he has got a great article in The Guardian that I think is spot-on:
"The neoliberal era in the United States ended with a neofascist bang. The political triumph of Donald Trump shattered the establishments in the Democratic and Republican parties – both wedded to the rule of Big Money and to the reign of meretricious politicians."
Glenn Greenwald is another writer who has been showered with more hate by the Democratic establishment recently than even Trump or Steve Bannon, so you know Greenwald is saying something important. He has a great piece in The Intercept on the head-in-the-ground attitude of Democratic elites toward their recent loss:
"It is not an exaggeration to say that the Democratic Party is in shambles as a political force. Not only did it just lose the White House to a wildly unpopular farce of a candidate despite a virtually unified establishment behind it, and not only is it the minority party in both the Senate and the House, but it is getting crushed at historical record rates on the state and local levels as well. Surveying this wreckage last week, party stalwart Matthew Yglesias of Vox minced no words: `the Obama years have created a Democratic Party that's essentially a smoking pile of rubble.'
"One would assume that the operatives and loyalists of such a weak, defeated and wrecked political party would be eager to engage in some introspection and self-critique, and to produce a frank accounting of what they did wrong so as to alter their plight. In the case of 2016 Democrats, one would be quite mistaken."
Last but far from least, Scottish economist Mark Blyth has what looks to me like the single best analysis of the entire global Trump_vs_deep_state tidal wave in Foreign Affairs magazine:
"At the end of World War II, the United States and its allies decided that sustained mass unemployment was an existential threat to capitalism and had to be avoided at all costs. In response, governments everywhere targeted full employment as the master policy variable-trying to get to, and sustain, an unemployment rate of roughly four percent. The problem with doing so, over time, is that targeting any variable long enough undermines the value of the variable itself-a phenomenon known as Goodhart's law. (..)
" what we see [today] is a reversal of power between creditors and debtors as the anti-inflationary regime of the past 30 years undermines itself-what we might call "Goodhart's revenge." In this world, yields compress and creditors fret about their earnings, demanding repayment of debt at all costs. Macro-economically, this makes the situation worse: the debtors can't pay-but politically, and this is crucial-it empowers debtors since they can't pay, won't pay, and still have the right to vote.
"The traditional parties of the center-left and center-right, the builders of this anti-inflationary order, get clobbered in such a world, since they are correctly identified by these debtors as the political backers of those demanding repayment in an already unequal system, and all from those with the least assets. This produces anti-creditor, pro-debtor coalitions-in-waiting that are ripe for the picking by insurgents of the left and the right, which is exactly what has happened.
"In short, to understand the election of Donald Trump we need to listen to the trumpets blowing everywhere in the highly indebted developed countries and the people who vote for them.
"The global revolt against elites is not just driven by revulsion and loss and racism. It's also driven by the global economy itself. This is a global phenomenon that marks one thing above all. The era of neoliberalism is over. The era of neonationalism has just begun."
https://www.foreignaffairs.com/articles/2016-11-15/global-Trump_vs_deep_state
efcdons 11.19.16 at 3:07 pm 161 ( 161 )
Faustusnotes @147You don't live here, do you? I'm really asking a genuine question because the way you are framing the question ("SPECIFICS!!!!!!) suggests you don't. (Just to show my background, born and raised in Australia (In the electoral division of Kooyong, home of Menzies) but I've lived in the US since 2000 in the midwest (MO, OH) and currently in the south (GA))
If this election has taught us anything it's no one cared about "specifics". It was a mood, a feeling which brought trump over the top (and I'm not talking about the "average" trump voter because that is meaningless. The average trunp voter was a republican voter in the south who the Dems will never get so examining their motivations is immaterial to future strategy. I'm talking about the voters in the Upper Midwest from places which voted for Obama twice then switched to trump this year to give him his margin of victory).
trump voters have been pretty clear they don't actually care about the way trump does (or even doesn't) do what he said he would do during the campaign. It was important to them he showed he was "with" people like them. They way he did that was partially racialized (law and order, islamophobia) but also a particular emphasis on blue collar work that focused on the work. Unfortunately these voters, however much you tell them they should suck it up and accept their generations of familial experience as relatively highly paid industrial workers (even if it is something only their fathers and grandfathers experienced because the factories were closing when the voters came of age in the 80s and 90s) is never coming back and they should be happy to retrain as something else, don't want it. They want what their families have had which is secure, paid, benefits rich, blue collar work.
trump's campaign empathized with that feeling just by focusing on the factory jobs as jobs and not as anachronisms that are slowly fading away for whatever reason. Clinton might have been "correct", but these voters didn't want to hear "the truth". And as much as you can complain about how stupid they are for wanting to be lied to, that is the unfortunate reality you, and the Democratic party, have to accept.
The idea they don't want "government help" is ridiculous. They love the government. They just want the government to do things for them and not for other people (which unfortunately includes blah people but also "the coasts", "sillicon valley", etc.). Obama won in 2008 and 2012 in part due to the auto bailout.
trump was offering a "bailout" writ large. Clinton had no (good) counteroffer. It was like the tables were turned. Romney was the one talking about "change" and "restructuring" while Obama was defending keeping what was already there.
"Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course - the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check."
http://www.nytimes.com/2008/11/19/opinion/19romney.htmlSo yes. Clinton needed vague promises. She needed something more than retraining and "jobs of the future" and "restructuring". She needed to show she was committed to their way of life, however those voters saw it, and would do something, anything, to keep it alive. trump did that even though his plan won't work. And maybe he'll be punished for it. In 4 years. But in the interim the gop will destroy so many things we need and rely on as well as entrench their power for generations through the Supreme Court.
But really, it was hard for Clinton to be trusted to act like she cared about these peoples' way of life because she (through her husband fairly or unfairly) was associated with some of the larger actions and choices which helped usher in the decline.
Clinton toward the end offered tariffs. But the trump campaign hit back with what turned out to be a pretty strong counter attack – ""How's she going to get tough on China?" said Trump economic advisor Peter Navarro on CNN's Quest Means Business. He notes that some of Clinton's economic advisors have supported TPP or even worked on it. ""
http://money.cnn.com/2016/08/11/news/economy/hillary-clinton-trade/
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Nov 19, 2016 | www.project-syndicate.org
In the United States, rising inequality has been a fact of life at least since the 1970s, when the relatively equitable distribution of economic benefits from the early post-World War II era started to become skewed. In the late 1990s, when digital technologies began to automate and disintermediate more routine jobs, the shift toward higher wealth and income inequality became turbocharged.
Globalization played a role. In the 20 years before the 2008 financial crisis, manufacturing employment in the US rapidly declined in every sector except pharmaceuticals, even as added value in manufacturing rose. Net jobs loss was kept roughly at zero only because employment in services increased.
In fact, much of the added value in manufacturing actually comes from services such as product design, research and development, and marketing. So, if we account for this value-chain composition, the decline in manufacturing – the production of tangible goods – is even more pronounced.
Economists have been tracking these trends for some time. Massachusetts Institute of Technology economist David Autor and his colleagues have carefully documented the impact of globalization and labor-saving digital technologies on routine jobs. More recently, French economist Thomas Piketty 's international bestseller, Capital in the Twenty-First Century , dramatically widened our awareness of wealth inequality and described possible underlying forces driving it. The brilliant, award-winning young economists Raj Chetty and Emmanuel Saez have enriched the discussion with new research. And I have written about some of the structural economic shifts associated with these problems.
Eventually, journalists picked up on these trends, too, and it would now be hard to find anyone who has not heard of the "1%" – shorthand for those at the top of the global wealth and income scales. Many people now worry about a bifurcated society: a thriving global class of elites at the top and a stressed-out class comprising everyone else. Still, despite these long trends, the political and policy status quo remained largely unchallenged until 2008.
To understand why it took politics so long to catch up to economic realities, we should look at incentives and ideology. With respect to incentives, politicians have not been given a good enough reason to address unequal distribution patterns. The US has relatively weak campaign-finance limits, so corporations and wealthy individuals – neither of which generally prioritizes income redistribution – have contributed a disproportionate share to politicians' campaign war chests.
Ideologically, many people are simply suspicious of expansive government. They recognize inequality as a problem, and in principle they support government policies that provide high-quality education and health-care services, but they do not trust politicians or bureaucrats. In their eyes, governments are inefficient and self-interested at best, and dictatorial and oppressive at worst.
All of this began to change with the rise of digital technologies and the Internet, but especially with the advent of social media. As US President Barack Obama showed in the 2008 election cycle – followed by Bernie Sanders and Donald Trump in the current cycle – it is now possible to finance a very expensive campaign without "big money."
As a result, there is a growing disconnect between big money and political incentives; and while money is still a part of the political process, influence itself no longer belongs exclusively to corporations and wealthy individuals. Social-media platforms now enable large groups of people to mobilize in ways reminiscent of mass political movements in earlier eras. Such platforms may have reduced the cost of political organizing, and thus candidates' overall dependence on money, while providing an efficient alternative fund-raising channel.
This new reality is here to stay, and, regardless of who wins the US election this year, anyone who is unhappy with high inequality will have a voice, the ability to finance it, and the power to affect policymaking. So, too, will other groups that focus on similar issues, such as environmental sustainability, which has not been a major focus in the current US presidential campaign (the three debates between the candidates included no discussion of climate change, for example), but surely will be in the future.
All told, digital technology is shuffling economic structures and rebalancing power relationships in the world's democracies – even in institutions once thought to be dominated by money and wealth.
A large, newly influential constituency should be welcomed. But it cannot be a substitute for wise leadership, and its existence does not guarantee prudent policies. As political priorities continue to rebalance, we will need to devise creative solutions to solve our hardest problems, and to prevent populist misrule. One hopes that this is the course we are on now.
Michael Spence, a Nobel laureate in economics, is Professor of Economics at NYU's Stern School of Business, Distinguished Visiting Fellow at the Council on Foreign Relations, Senior Fellow at the Hoover Institution at Stanford University, Academic Board Chairman of the Asia Global Institute in Hong Kong, and Chair of the World Economic Forum Global Agenda Council on New Growth Models. He was the chairman of the independent Commission on Growth and Development, an international body that from 2006-2010 analyzed opportunities for global economic growth, and is the author of The Next Convergence – The Future of Economic Growth in a Multispeed World
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Nov 19, 2016 | profile.theguardian.com
goodtable, 3d agoEnglishMike -> goodtable 3d agoA crucial point "WWC men aren't interested in working at McDonald's for $15 per hour instead of $9.50. What they want is... steady, stable, full-time jobs that deliver a solid middle-class life."
The economic point is that globalisation has boosted trade and overall wealth, but it has also created a dog eat dog world where western workers compete with, and lose jobs to, people far away who will do the work for much less.
But neither Trump nor Farage have shown any evidence of how realistically they can recreate those jobs in the west. And realistically god knows how you keep the wealth free trade and globalisation brings but avoid losing the good jobs? At least the current mess has focused attention on the question and has said that patience has run out.
Compared to the real economic problems, the identity politics is minor, but it is still an irritant that explains why this revolution is coming from the right not from the left.
If you're white and male it's bad enough losing your hope of economic security, but then to be repeatedly told by the left that you're misogynist, racist, sexist, Islamophobic, transgenderphobic etc etc is just the icing on the cake. If the author wants to see just how crazy identity politics has become go to the Suzanne Moore piece from yesterday accusing American women of being misogynist for refusing to vote for Hillary. That kind of maniac 'agree with me on everything or you're a racist, sexist, homophobe' identity politics has to be ditched. Reply
Funny, I've been a white male my whole life and not once have I been accused of being a misogynist, racist, sexist, Islamophobic, or transgenderphobic. I didn't think being a white male was so difficult for some people... Replygarrylee 3d ago"Are we turning our backs on the age of enlightenment?".Bazz Leaveblank -> garrylee 3d agoAnd what "age" has that been Roy? The "age" of: climate change, gangster bankers, tax heavens, illegal wars, nuclear proliferation, grotesque inequality, the prison industrial complex to cite just a few. That "age"?
I agree hardly an age of enlightenment. My opinion... the so called Liberal Elite are responsible for many of the issues in the list. The poor and the old in this country are not being helped by the benefits system. Yet the rich get richer beyond the dreams of the ordinary man.aronDi 3d agoI would pay more tax if I thought it might be spent more wisely...but can you trust politicians who are happy to spend 50 billion on a railway line that 98% of the population will never use.
No solutions from me ...an old hippy from the 60s "Love and peace man " ...didn't work did it :)
I have come under the impression that the right wing press detest one kind of liberalism, social liberalism, they hate that, but they love economic liberalism, which has done much harm to the working class.Most of the right wing press support austerity measures, slashing of taxes and, smaller and smaller governments. Yet apparently, its being socially liberal that is the problem.
[Nov 18, 2016] Study Finds 1 in 3 Student Loan Holders With Payments Due Are Late With Payments and More Than Half Regret Their Borrowing
Notable quotes:
"... "Nearly half of young Americans start their working lives with student debt, and 43 million Americans carry student loans. A new study by the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business found that many borrowers are struggling to make student loan payments and regret their borrowing. ..."
"... GFLEC's newly published policy brief reports that most borrowers did not fully understand what they were taking on when they obtained student loans. Additionally, 54 percent of student loan holders did not try to figure out what their monthly payments would be before taking out loans. And 53 percent said that if they could go back and redo the process of taking out loans, they would do things differently. " ..."
Nov 18, 2016 | www.nakedcapitalism.com
FreeMarketApologist November 17, 2016 at 8:11 am
Benedict@Large November 17, 2016 at 9:29 amIn other news (but isn't everything political?):
Released earlier this week from George Washington University School of Business: "Study Finds 1 in 3 Student Loan Holders With Payments Due Are Late With Payments and More Than Half Regret Their Borrowing"
"Nearly half of young Americans start their working lives with student debt, and 43 million Americans carry student loans. A new study by the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business found that many borrowers are struggling to make student loan payments and regret their borrowing.
GFLEC's newly published policy brief reports that most borrowers did not fully understand what they were taking on when they obtained student loans. Additionally, 54 percent of student loan holders did not try to figure out what their monthly payments would be before taking out loans. And 53 percent said that if they could go back and redo the process of taking out loans, they would do things differently. "
(via the securities regulator, FINRA): http://www.finra.org/newsroom/2016/study-finds-1-3-student-loan-holders-payments-due-are-late-payments-and-more-half
Direct link to the paper: http://gflec.org/wp-content/uploads/2016/11/GFLEC-Brief-Student-loan-debt.pdf )
Odd. I was looking at the comment by Bannon about Spanish young adult unemployment (a serious problem, as he says) and thinking, well, at least we don't have anything like that here.
No, our young adults aren't unemployed, are they? They are simply working to hand over major parts of their future to their debt bosses.
And it really is so much better that way. After all, if ours were unemployed, they might take to the streets like the Spaniards are doing.
[Nov 18, 2016] Privatization of education, Chicago way
Notable quotes:
"... For over a decade now, Chicago has been the epicenter of the fashionable trend of "privatization"-the transfer of the ownership or operation of resources that belong to all of us, like schools, roads and government services, to companies that use them to turn a profit. Chicago's privatization mania began during Mayor Richard M. Daley's administration, which ran from 1989 to 2011. Under his successor, Rahm Emanuel, the trend has continued apace. For Rahm's investment banker buddies, the trend has been a boon. For citizens? Not so much. ..."
"... the English word "privatization" derives from a coinage, Reprivatisierung, formulated in the 1930s to describe the Third Reich's policy of winning businessmen's loyalty by handing over state property to them. ..."
"... As president, Bill Clinton greatly expanded a privatization program begun under the first President Bush's Department of Housing and Urban Development. "Hope VI" aimed to replace public-housing high-rises with mixed-income houses, duplexes and row houses built and managed by private firms. ..."
"... The fan was Barack Obama, then a young state senator. Four years later, he cosponsored a bipartisan bill to increase subsidies for private developers and financiers to build or revamp low-income housing. ..."
"... However, the rush to outsource responsibility for housing the poor became a textbook example of one peril of privatization: Companies frequently get paid whether they deliver the goods or not (one of the reasons investors like privatization deals). For example, in 2004, city inspectors found more than 1,800 code violations at Lawndale Restoration, the largest privately owned, publicly subsidized apartment project in Chicago. Guaranteed a steady revenue stream whether they did right by the tenants or not-from 1997 to 2003, the project generated $4.4 million in management fees and $14.6 million in salaries and wages-the developers were apparently satisfied to just let the place rot. ..."
Nov 18, 2016 | economistsview.typepad.com
Peter K. :
http://econospeak.blogspot.com/2016/11/privatization-of-public-infrastructure.htmlPGL on Chicago's parking meters. Yes Democratic Mayor Daley made a bad deal. If Trump does invest in infrastructure is this the kind of thing he'll be doing, selling off public assets and leasing them back again, aka privatization?
Seems like two different things. Here's an In These Time article from January 2015 by the smart Rick Perlstein.
http://inthesetimes.com/article/17533/how_to_sell_off_a_city
How To Sell Off a City
Welcome to Rahm Emanuel's Chicago, the privatized metropolis of the future.
BY RICK PERLSTEIN
In June of 2013, Chicago Mayor Rahm Emanuel made a new appointment to the city's seven-member school board to replace billionaire heiress Penny Pritzker, who'd decamped to run President Barack Obama's Department of Commerce. The appointee, Deborah H. Quazzo, is a founder of an investment firm called GSV Advisors, a business whose goal-her cofounder has been paraphrased by Reuters as saying-is to drum up venture capital for "an education revolution in which public schools outsource to private vendors such critical tasks as teaching math, educating disabled students, even writing report cards."
GSV Advisors has a sister firm, GSV Capital, that holds ownership stakes in education technology companies like "Knewton," which sells software that replaces the functions of flesh-and-blood teachers. Since joining the school board, Quazzo has invested her own money in companies that sell curricular materials to public schools in 11 states on a subscription basis.
In other words, a key decision-maker for Chicago's public schools makes money when school boards decide to sell off the functions of public schools.
She's not alone. For over a decade now, Chicago has been the epicenter of the fashionable trend of "privatization"-the transfer of the ownership or operation of resources that belong to all of us, like schools, roads and government services, to companies that use them to turn a profit. Chicago's privatization mania began during Mayor Richard M. Daley's administration, which ran from 1989 to 2011. Under his successor, Rahm Emanuel, the trend has continued apace. For Rahm's investment banker buddies, the trend has been a boon. For citizens? Not so much.
They say that the first person in any political argument who stoops to invoking Nazi Germany automatically loses. But you can look it up: According to a 2006 article in the Journal of Economic Perspectives, the English word "privatization" derives from a coinage, Reprivatisierung, formulated in the 1930s to describe the Third Reich's policy of winning businessmen's loyalty by handing over state property to them.
In the American context, the idea also began on the Right (to be fair, entirely independent of the Nazis)-and promptly went nowhere for decades. In 1963, when Republican presidential candidate Barry Goldwater mused "I think we ought to sell the TVA"-referring to the Tennessee Valley Authority, the giant complex of New Deal dams that delivered electricity for the first time to vast swaths of the rural Southeast-it helped seal his campaign's doom. Things only really took off after Prime Minister Margaret Thatcher's sale of U.K. state assets like British Petroleum and Rolls Royce in the 1980s made the idea fashionable among elites-including a rightward tending Democratic Party.
As president, Bill Clinton greatly expanded a privatization program begun under the first President Bush's Department of Housing and Urban Development. "Hope VI" aimed to replace public-housing high-rises with mixed-income houses, duplexes and row houses built and managed by private firms.
Chicago led the way. In 1999, Mayor Richard M. Daley, a Democrat, announced his intention to tear down the public-housing high-rises his father, Mayor Richard J. Daley, had built in the 1950s and 1960s. For this "Plan for Transformation," Chicago received the largest Hope VI grant of any city in the nation. There was a ration of idealism and intellectual energy behind it: Blighted neighborhoods would be renewed and their "culture of poverty" would be broken, all vouchsafed by the honorable desire of public-spirited entrepreneurs to make a profit. That is the promise of privatization in a nutshell: that the profit motive can serve not just those making the profits, but society as a whole, by bypassing inefficient government bureaucracies that thrive whether they deliver services effectively or not, and empower grubby, corrupt politicians and their pals to dip their hands in the pie of guaranteed government money.
As one of the movement's fans explained in 1997, his experience with nascent attempts to pay private real estate developers to replace public housing was an "example of smart policy."
"The developers were thinking in market terms and operating under the rules of the marketplace," he said. "But at the same time, we had government supporting and subsidizing those efforts."
The fan was Barack Obama, then a young state senator. Four years later, he cosponsored a bipartisan bill to increase subsidies for private developers and financiers to build or revamp low-income housing.
However, the rush to outsource responsibility for housing the poor became a textbook example of one peril of privatization: Companies frequently get paid whether they deliver the goods or not (one of the reasons investors like privatization deals). For example, in 2004, city inspectors found more than 1,800 code violations at Lawndale Restoration, the largest privately owned, publicly subsidized apartment project in Chicago. Guaranteed a steady revenue stream whether they did right by the tenants or not-from 1997 to 2003, the project generated $4.4 million in management fees and $14.6 million in salaries and wages-the developers were apparently satisfied to just let the place rot.
Meanwhile, the $1.6 billion Plan for Transformation drags on, six years past deadline and still 2,500 units from completion, while thousands of families languish on the Chicago Housing Authority's waitlist.
Be that as it may, the Chicago experience looks like a laboratory for a new White House pilot initiative, the Rental Assistance Demonstration Program (RAD), which is set to turn over some 60,000 units to private management next year. Lack of success never seems to be an impediment where privatization is concerned.
...
[Nov 18, 2016] The statecraft of neoliberalism: the elimination of political agency and responsibility for economic performance and outcomes by Bruce Wilder
Notable quotes:
"... The New Deal did not seek to overthrow the plutocracy, but it did seek to side-step and disable their dominance. ..."
"... It seems to me that while neoliberalism on the right was much the same old same old, the neoliberal turn on the left was marked by a measured abandonment of this struggle over the distribution of income between the classes. In the U.S., the Democrats gradually abandoned their populist commitments. In Europe, the labour and socialist parties gradually abandoned class struggle. ..."
"... When Obama came in, in 2008 amid the unfolding GFC, one of the most remarkable features of his economic team was the extent to which it conceded control of policy entirely to the leading money center banks. Geithner and Bernanke continued in power with Geithner moving from the New York Federal Reserve (where he served as I recall under a Chair from Goldman Sachs) to Treasury in the Obama Administration, but Geithner's Treasury was staffed from Goldman Sachs, JP Morgan Chase and Citibank. The crisis served to concentrate banking assets in the hands of the top five banks, but it seemed also to transfer political power entirely into their hands as well. Simon Johnson called it a coup. ..."
"... Here's the thing: the globalization and financialization of the economy from roughly 1980 drove both increasingly extreme distribution of income and de-industrialization. ..."
"... It was characteristic of neoliberalism that the policy, policy intention and policy consequences were hidden behind a rhetoric of markets and technological inevitability. Matt Stoller has identified this as the statecraft of neoliberalism: the elimination of political agency and responsibility for economic performance and outcomes. Globalization and financialization were just "forces" that just happened, in a meteorological economics. ..."
"... This was not your grandfather's Democratic Party and it was a Democratic Party that could aid the working class and the Rust Belt only within fairly severe and sometimes sharply conflicting constraints. ..."
"... No one in the Democratic Party had much institutional incentive to connect the dots, and draw attention to the acute conflicts over the distribution of income and wealth involved in financialization of the economy (including financialization as a driver of health care costs). And, that makes the political problem that much harder, because there are no resources for rhetorical and informational clarity or coherence. ..."
"... If Obama could not get a very big stimulus indeed thru a Democratic Congress long out of power, Obama wasn't really trying. And, well-chosen spending on pork barrel projects is popular and gets Congressional critters re-elected. So, again, if the stimulus is small and the Democratic Congress doesn't get re-elected, Obama isn't really trying. ..."
"... Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism, because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference. ..."
Nov 18, 2016 | crookedtimber.org
bruce wilder 11.16.16 at 10:07 pm 30
At the center of Great Depression politics was a political struggle over the distribution of income, a struggle that was only decisively resolved during the War, by the Great Compression. It was at center of farm policy where policymakers struggled to find ways to support farm incomes. It was at the center of industrial relations politics, where rapidly expanding unions were seeking higher industrial wages. It was at the center of banking policy, where predatory financial practices were under attack. It was at the center of efforts to regulate electric utility rates and establish public power projects. And, everywhere, the clear subtext was a struggle between rich and poor, the economic royalists as FDR once called them and everyone else.
FDR, an unmistakeable patrician in manner and pedigree, was leading a not-quite-revolutionary politics, which was nevertheless hostile to and suspicious of business elites, as a source of economic pathology. The New Deal did not seek to overthrow the plutocracy, but it did seek to side-step and disable their dominance.
It seems to me that while neoliberalism on the right was much the same old same old, the neoliberal turn on the left was marked by a measured abandonment of this struggle over the distribution of income between the classes. In the U.S., the Democrats gradually abandoned their populist commitments. In Europe, the labour and socialist parties gradually abandoned class struggle.
In retrospect, though the New Deal did use direct employment as a means of relief to good effect economically and politically, it never undertook anything like a Keynesian stimulus on a Keynesian scale - at least until the War.
Where the New Deal witnessed the institution of an elaborate system of financial repression, accomplished in large part by imposing on the financial sector an explicitly mandated structure, with types of firms and effective limits on firm size and scope, a series of regulatory reforms and financial crises beginning with Carter and Reagan served to wipe this structure away.
When Obama came in, in 2008 amid the unfolding GFC, one of the most remarkable features of his economic team was the extent to which it conceded control of policy entirely to the leading money center banks. Geithner and Bernanke continued in power with Geithner moving from the New York Federal Reserve (where he served as I recall under a Chair from Goldman Sachs) to Treasury in the Obama Administration, but Geithner's Treasury was staffed from Goldman Sachs, JP Morgan Chase and Citibank. The crisis served to concentrate banking assets in the hands of the top five banks, but it seemed also to transfer political power entirely into their hands as well. Simon Johnson called it a coup.
I don't know what considerations guided Obama in choosing the size of the stimulus or its composition (as spending and tax cuts). Larry Summers was identified at the time as a voice of caution, not "gambling", but not much is known about his detailed reasoning in severely trimming Christina Romer's entirely conventional calculations. (One consideration might well have been worldwide resource shortages, which had made themselves felt in 2007-8 as an inflationary spike in commodity prices.) I do not see a case for connecting stimulus size policy to the health care reform. At the time the stimulus was proposed, the Administration had also been considering whether various big banks and other financial institutions should be nationalized, forced to insolvency or otherwise restructured as part of a regulatory reform.
Here's the thing: the globalization and financialization of the economy from roughly 1980 drove both increasingly extreme distribution of income and de-industrialization. Accelerating the financialization of the economy from 1999 on made New York and Washington rich, but the same economic policies and process were devastating the Rust Belt as de-industrialization. They were two aspects of the same complex of economic trends and policies. The rise of China as a manufacturing center was, in critical respects, a financial operation within the context of globalized trade that made investment in new manufacturing plant in China, as part of globalized supply chains and global brand management, (arguably artificially) low-risk and high-profit, while reinvestment in manufacturing in the American mid-west became unattractive, except as a game of extracting tax subsidies or ripping off workers.
It was characteristic of neoliberalism that the policy, policy intention and policy consequences were hidden behind a rhetoric of markets and technological inevitability. Matt Stoller has identified this as the statecraft of neoliberalism: the elimination of political agency and responsibility for economic performance and outcomes. Globalization and financialization were just "forces" that just happened, in a meteorological economics.
It is conceding too many good intentions to the Obama Administration to tie an inadequate stimulus to a Rube Goldberg health care reform as the origin story for the final debacle of Democratic neoliberal politics. There was a delicate balancing act going on, but they were not balancing the recovery of the economy in general so much as they were balancing the recovery from insolvency of a highly inefficient and arguably predatory financial sector, which was also not incidentally financing the institutional core of the Democratic Party and staffing many key positions in the Administration and in the regulatory apparatus.
This was not your grandfather's Democratic Party and it was a Democratic Party that could aid the working class and the Rust Belt only within fairly severe and sometimes sharply conflicting constraints.
No one in the Democratic Party had much institutional incentive to connect the dots, and draw attention to the acute conflicts over the distribution of income and wealth involved in financialization of the economy (including financialization as a driver of health care costs). And, that makes the political problem that much harder, because there are no resources for rhetorical and informational clarity or coherence.
bruce wilder 11.16.16 at 10:33 pm ( 31 )
The short version of my thinking on the Obama stimulus is this: Keynesian stimulus spending is a free lunch; it doesn't really matter what you spend money on up to a very generous point, so it seems ready-made for legislative log-rolling. If Obama could not get a very big stimulus indeed thru a Democratic Congress long out of power, Obama wasn't really trying. And, well-chosen spending on pork barrel projects is popular and gets Congressional critters re-elected. So, again, if the stimulus is small and the Democratic Congress doesn't get re-elected, Obama isn't really trying.Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism, because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference.
likbez 11.18.16 at 4:48 pm 121
bruce wilder 11.16.16 at 10:07 pm 30Great comment. Simply great. Hat tip to the author !
Notable quotes:
"… The New Deal did not seek to overthrow the plutocracy, but it did seek to side-step and disable their dominance. …"
"… It seems to me that while neoliberalism on the right was much the same old same old, the neoliberal turn on the left was marked by a measured abandonment of this struggle over the distribution of income between the classes. In the U.S., the Democrats gradually abandoned their populist commitments. In Europe, the labour and socialist parties gradually abandoned class struggle. …"
"… When Obama came in, in 2008 amid the unfolding GFC, one of the most remarkable features of his economic team was the extent to which it conceded control of policy entirely to the leading money center banks. Geithner and Bernanke continued in power with Geithner moving from the New York Federal Reserve (where he served as I recall under a Chair from Goldman Sachs) to Treasury in the Obama Administration, but Geithner's Treasury was staffed from Goldman Sachs, JP Morgan Chase and Citibank. The crisis served to concentrate banking assets in the hands of the top five banks, but it seemed also to transfer political power entirely into their hands as well. Simon Johnson called it a coup. … "
"… Here's the thing: the globalization and financialization of the economy from roughly 1980 drove both increasingly extreme distribution of income and de-industrialization. …"
"… It was characteristic of neoliberalism that the policy, policy intention and policy consequences were hidden behind a rhetoric of markets and technological inevitability. Matt Stoller has identified this as the statecraft of neoliberalism: the elimination of political agency and responsibility for economic performance and outcomes. Globalization and financialization were just "forces" that just happened, in a meteorological economics. …"
"… This was not your grandfather's Democratic Party and it was a Democratic Party that could aid the working class and the Rust Belt only within fairly severe and sometimes sharply conflicting constraints. …"
"… No one in the Democratic Party had much institutional incentive to connect the dots, and draw attention to the acute conflicts over the distribution of income and wealth involved in financialization of the economy (including financialization as a driver of health care costs). And, that makes the political problem that much harder, because there are no resources for rhetorical and informational clarity or coherence. …"
"… If Obama could not get a very big stimulus indeed thru a Democratic Congress long out of power, Obama wasn't really trying. And, well-chosen spending on pork barrel projects is popular and gets Congressional critters re-elected. So, again, if the stimulus is small and the Democratic Congress doesn't get re-elected, Obama isn't really trying. …"
"… Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism, because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference. …"
[Nov 16, 2016] Being now a party of Wall street, neolibral democrats did not learn the lesson and do not want to: they attempt to double down on the identity politics, keep telling the pulverized middle class how great the economy is
Notable quotes:
"... I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. ..."
"... I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn't know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil ..."
"... Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll released Thursday, a signal that despite years after the Great Recession, Americans' finances remain precarious as ever. ..."
"... These difficulties span all incomes, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill. ..."
"... Even for the country's wealthiest 20 percent - households making more than $100,000 a year - 38 percent say they would have at least some difficulty coming up with $1,000 ..."
"... Chronicle for Higher Education: ..."
"... Meanwhile, 91% of all the profits generated by the U.S. economy from 2009 through 2012 went to the top 1%. As just one example, the annual bonuses (not salaries, just the bonuses) of all Wall Street financial traders last year amounted to 28 billion dollars while the total income of all minimum wage workers in America came to 14 billion dollars. ..."
"... "Between 2009 and 2012, according to updated data from Emmanuel Saez, overall income per family grew 6.9 percent. The gains weren't shared evenly, however. The top 1 percent saw their real income grow by 34.7 percent while the bottom 99 percent only saw a 0.8 percent gain, meaning that the 1 percent captured 91 percent of all real income. ..."
"... Adjusting for inflation and excluding anything made from capital gains investments like stocks, however, shows that even that small gains for all but the richest disappears. According to Justin Wolfers, adjusted average income for the 1 percent without capital gains rose from $871,100 to $968,000 in that time period. For everyone else, average income actually fell from $44,000 to $43,900. Calculated this way, the 1 percent has captured all of the income gains." ..."
"... There actually is a logic at work in the Rust Belt voters for voted for Trump. I don't think it's good logic, but it makes sense in its own warped way. The calculation the Trump voters seem to be making in the Rust Belt is that it's better to have a job and no health insurance and no medicare and no social security, than no job but the ACA (with $7,000 deductibles you can't afford to pay for anyway) plus medicare (since most of these voters are healthy, they figure they'll never get sick) plus social security (most of these voters are not 65 or older, and probably think they'll never age - or perhaps don't believe that social security will be solvent when they do need it). ..."
"... It's the same twisted logic that goes on with protectionism. Rust Belt workers figure that it's better to have a job and not be able to afford a Chinese-made laptop than not to have a job but plenty of cheap foreign-made widgets you could buy if you had any money (which you don't). That logic doesn't parse if you run through the economics (because protectionism will destroy the very jobs they think they're saving), but it can be sold as a tweet in a political campaign. ..."
"... The claim "Trump's coalition is composed of overt racists and people who are indifferent to overt racism" is incomplete. Trump's coalition actually consists of 3 parts and it's highly unstable: [1] racists, [2] plutocrats, [3] working class people slammed hard by globalization for whom Democrats have done little or nothing. ..."
"... The good news is that Trump's coalition is unstable. The plutocrats and Rust Belters are natural enemies. ..."
"... Listen to Steve Bannon, a classic stormfront type - he says he wants to blow up both the Democratic and the Republican party. He calls himself a "Leninist" in a recent interview and vows to wreck all elite U.S. institutions (universities, giant multinationals), not just the Democratic party. ..."
"... Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism, because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference. ..."
Nov 16, 2016 | crookedtimber.org
mclaren 11.16.16 at 9:52 am 7
Eric places the blame for this loss squarely on economics, which, it seems to me, gets the analysis exactly right. And the statistics back up his analysis, I believe.It's disturbing and saddening to watch other left-wing websites ignore those statistics and charge off the cliff into the abyss, screaming that this election was all about racism/misogyny/homophobia/[fill in the blank with identity politics demonology of your choice]. First, the "it's all racism" analysis conveniently lets the current Democratic leadership off the hook. They didn't do anything wrong, it was those "deplorables" (half the country!) who are to blame. Second, the identity politics blame-shifting completely overlooks and short-circuits any real action to fix the economy by Democratic policymakers or Democratic politicians or the Democratic party leadership. That's particularly convenient for the Democratic leadership because these top-four-percenter professionals "promise anything and change nothing" while jetting between Davos and Martha's Vineyard, ignoring the peons who don't make $100,000 or more a year because the peons all live in flyover country.
"Trump supporters were on average affluent, but they are always Republican and aren't numerous enough to deliver the presidency (538 has changed their view in the wake of the election result). Some point out that looking at support by income doesn't show much distinctive support for Trump among the "poor", but that's beside the point too, as it submerges a regional phenomenon in a national average, just as exit polls do. (..)
"When commentators like Michael Moore and Thomas Frank pointed out that there was possibility for Trump in the Rust Belt they were mostly ignored or, even more improbably, accused of being apologists for racism and misogyny. But that is what Trump did, and he won. Moreover, he won with an amateurish campaign against a well-funded and politically sophisticated opponent simply because he planted his flag where others wouldn't."Because of the obsession with exit polls, post-election analysis has not come to grips with the regional nature of the Trump phenomenon. Exit polls divide the general electorate based on individual attributes: race, gender, income, education, and so on, making regional distinctions invisible. Moreover, America doesn't decide the presidential election that way. It decides it based on the electoral college, which potentially makes the characteristics of individual states decisive. We should be looking at maps, not exit polls for the explanation. Low black turnout in California or high Latino turnout in Texas do not matter in the slightest in determining the election, but exit polls don't help us see that. Exit polls deliver a bunch of non-explanatory facts, in this election more than other recent ones."
http://blogs.lse.ac.uk/usappblog/2016/11/11/23174/"Donald Trump performed best on Tuesday in places where the economy is in worse shape, and especially in places where jobs are most at risk in the future.
"Trump, who in his campaign pledged to be a voice for `forgotten Americans,' beat Hillary Clinton in counties with slower job growth and lower wages. And he far outperformed her in counties where more jobs are threatened by automation or offshoring, a sign that he found support not just among workers who are struggling now but among those concerned for their economic future."
http://fivethirtyeight.com/features/trump-was-stronger-where-the-economy-is-weaker/
Meanwhile, the neoliberal Democrats made claims about the economy that at best wildly oversold the non-recovery from the 2009 global financial meltdown, and at worst flat-out misrepresented the state of the U.S. economy. For example, president Obama in his June 1 2016 speech in Elkhart Indiana, said:
"Now, one of the reasons we're told this has been an unusual election year is because people are anxious and uncertain about the economy. And our politics are a natural place to channel that frustration. So I wanted to come to the heartland, to the Midwest, back to close to my hometown to talk about that anxiety, that economic anxiety, and what I think it means. (..) America's economy is not just better than it was eight years ago - it is the strongest, most durable economy in the world. (..) Unemployment in Elkhart has fallen to around 4 percent. (Applause.) At the peak of the crisis, nearly one in 10 homeowners in the state of Indiana were either behind on their mortgages or in foreclosure; today, it's one in 30. Back then, only 75 percent of your kids graduated from high school; tomorrow, 90 percent of them will. (Applause.) The auto industry just had its best year ever. (..) So that's progress.(..) We decided to invest in job training so that folks who lost their jobs could retool. We decided to invest in things like high-tech manufacturing and clean energy and infrastructure, so that entrepreneurs wouldn't just bring back the jobs that we had lost, but create new and better jobs By almost every economic measure, America is better off than when I came here at the beginning of my presidency. That's the truth. That's true. (Applause.) It's true. (Applause.) Over the past six years, our businesses have created more than 14 million new jobs - that's the longest stretch of consecutive private sector job growth in our history. We've seen the first sustained manufacturing growth since the 1990s."
None of this is true. Not is a substantive sense, not in the sense of being accurate, not in the sense of reflecting the facts on the ground for real working people who don't fly their private jets to Davos.
The claim that "America's economy is the strongest and most durable economy in the world" is just plain false. China has a much higher growth rate, at 6.9% nearly triple the U.S.'s - and America's GDP growth is trending to historic long-term lows, and still falling. Take a look at this chart of the Federal Reserve board's projections of U.S. GDP growth since 2009 compared with the real GDP growth rate:
http://www.frbsf.org/economic-research/files/2015-03-2.png
"[In the survey] [t]he Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?
"Well, I knew. I knew because I am in that 47 percent.
" I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5-literally-while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs.
I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn't know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil ."
http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
" Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll released Thursday, a signal that despite years after the Great Recession, Americans' finances remain precarious as ever.
" These difficulties span all incomes, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.
" Even for the country's wealthiest 20 percent - households making more than $100,000 a year - 38 percent say they would have at least some difficulty coming up with $1,000 .
"`The more we learn about the balance sheets of Americans, it becomes quite alarming,' said Caroline Ratcliffe, a senior fellow at the Urban Institute focusing on poverty and emergency savings issues."
http://bigstory.ap.org/article/965e48ed609245539ed315f83e01b6a2
The rest of Obama's statistics are deceptive to the point of being dissimulations - unemployment has dropped to 4 percent because so many people have stopped looking for work and moved into their parents' basements that the Bureau of Labor Statistics no longer counts them as unemployed. Meanwhile, the fraction of working-age adults who are not in the workforce has skyrocketed to an all-time high. Few homeowners are now being foreclosed in 2016 compared to 2009 because the people in 2009 who were in financial trouble all lost their homes. Only rich people and well-off professionals were able to keep their homes through the 2009 financial collapse. Since 2009, businesses did indeed create 14 million new jobs - mostly low-wage junk jobs, part-time minimum-wage jobs that don't pay a living wage.
"The deep recession wiped out primarily high-wage and middle-wage jobs. Yet the strongest employment growth during the sluggish recovery has been in low-wage work, at places like strip malls and fast-food restaurants.
"In essence, the poor economy has replaced good jobs with bad ones."
And the jobs market isn't much better for highly-educated workers:
New research released Monday says nearly half of the nation's recent college graduates work jobs that don't require a degree.
The report, from the Center for College Affordability and Productivity, concludes that while college-educated Americans are less likely to collect unemployment, many of the jobs they do have aren't worth the price of their diplomas.
The data calls into question a national education platform that says higher education is better in an economy that favors college graduates.
http://www.huffingtonpost.com/2013/01/29/underemployed-overeducated_n_2568203.html
Don't believe it? Then try this article, from the Chronicle for Higher Education:
Approximately 60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the BLS considers relatively low skilled-occupations where many participants have only high school diplomas and often even less. Only a minority of the increment in our nation's stock of college graduates is filling jobs historically considered as requiring a bachelor's degree or more.
http://www.chronicle.com/blogs/innovations/the-great-college-degree-scam/28067
As for manufacturing, U.S. manufacturing lost 35,000 jobs in 2016, and manufacturing employment remains 2.2% below what it was when Obama took office.
Meanwhile, 91% of all the profits generated by the U.S. economy from 2009 through 2012 went to the top 1%. As just one example, the annual bonuses (not salaries, just the bonuses) of all Wall Street financial traders last year amounted to 28 billion dollars while the total income of all minimum wage workers in America came to 14 billion dollars.
"Between 2009 and 2012, according to updated data from Emmanuel Saez, overall income per family grew 6.9 percent. The gains weren't shared evenly, however. The top 1 percent saw their real income grow by 34.7 percent while the bottom 99 percent only saw a 0.8 percent gain, meaning that the 1 percent captured 91 percent of all real income.
Adjusting for inflation and excluding anything made from capital gains investments like stocks, however, shows that even that small gains for all but the richest disappears. According to Justin Wolfers, adjusted average income for the 1 percent without capital gains rose from $871,100 to $968,000 in that time period. For everyone else, average income actually fell from $44,000 to $43,900. Calculated this way, the 1 percent has captured all of the income gains."
Does any of this sound like "the strongest, most durable economy in the world"? Does any of this square with the claims by Hillary Clinton and Barack Obama that "By almost every economic measure, America is better off "? The U.S. economy is only better off in 2016 by disingenuous comparison with the stygian depths of the 2009 economic collapse.
Hillary Clinton tied herself to Barack Obama's economic legacy, and the brutal reality for working class people remains that the economy today has barely improved for most workers to what it was in 2009, and is in many ways worse. Since 2009, automation + outsourcing/offshoring has destroyed whole classes of jobs, from taxi drivers (wiped out by Uber and Lyft) to warehoues stock clerks (getting wiped out by robots) to paralegals and associates at law firms (replaced by databases and legal search algorithms) to high-end programmers (wiped out by an ever-increasing flood of H1B via workers from India and China).
Yet vox.com continues to run article after article proclaiming "the 2016 election was all about racism." And we have a non-stop stream of this stuff from people like Anne Laurie over at balloon-juice.com:
"While the more-Leftist-than-thou "progressives" - including their latest high-profile figurehead - are high-fiving each other in happy anticipation of potential public-outrage gigs over the next four years, at least some people are beginning to push back on the BUT WHITE WORKING CLASS HAS ALL THE SADS!!! meme so beloved of Very Serious Pundits."
That's the ticket, Democrats double down on the identity politics, keep telling the pulverized middle class how great the economy is. Because that worked so well for you this election.
Cranky Observer 11.16.16 at 12:34 pm ( 11 )
= = = mclaren@9:52 am: The rest of Obama's statistics are deceptive to the point of being dissimulations -[ ] Only rich people and well-off professionals were able to keep their homes through the 2009 financial collapse. = = =
Some food for thought in your post, but you don't help your argument with statements such as this one. Rich people and well-off professionals make up at most 10% of the population. US homeownership rate in 2005 was 68.8%, in 2015 is 63.7. That's a big drop and unquestionably represents a lot of people losing their houses involuntarily. Still, even assuming no "well-off professionals" lost their houses in the recession that still leaves the vast majority of the houses owned by the middle class. Which is consistent with foreclosure and sales stats in middle class areas from 2008-2014. Remember that even with 20% unemployment 80% of the population still has a job.
Similarly, I agree that the recession and job situation was qualitatively worse than the quantitative stats depicted. Once you start adding in hidden factors not captured by the official stats, though, where do you stop? How do you know the underground economy isn't doing far better than it was in the boom years of the oughts, thus reducing actual unemployment? Etc.
Finally, you need to address the fundamental question: assuming all you say is true (arguendo), how does destroying the Affordable Care Act, Social Security, and Medicare help those in the economically depressed areas? I got hit bad by the recession myself. Know what helped from 2010 forward? Knowing that I could change jobs, keep my college-age children on my spouse's heath plan, not get hit with pre-existing condition fraud, and that if worse came to worse in a couple years I would have the plan exchange to fall back on. Kansas has tried the Ryan/Walker approach, seen it fail, doubled down, and seen that fail 4x as badly. Now we're going to make it up on unit sales by trying the Ryan plan nationally? How do you expect that to "work out for you"?
WLGR 11.16.16 at 4:11 pm
mclaren @ 7: "high-end programmers (wiped out by an ever-increasing flood of H1B via workers from India and China)"I'm on board with the general thrust of what you're saying, but this is way, way over the line separating socialism from barbarism. The fact that it's not even true is beside the point, as is the (quite frankly) fascist metaphor of "flood" to describe human fucking beings traveling in search of economic security, at least as long as you show some self-awareness and contrition about your language. Some awareness about the insidious administrative structure of the H1-B program would also be nice - the way it works is, an individual's visa status more or less completely depends on remaining in the good graces of their employer, meaning that by design these employees have no conceivable leverage in any negotiation over pay or working conditions, and a program of unconditional residency without USCIS as a de facto strikebreaker would have much less downward pressure on wages - but anti-immigration rhetoric remaining oblivious to actual immigration law is par for the course.
No, the real point of departure here from what deserves to be called "socialism" is in the very act of blithely combining effects of automation (i.e. traditional capitalist competition for productive efficiency at the expense of workers' economic security) and effects of offshoring/outsourcing/immigration (i.e. racialized fragmentation of the global working class by accident of birth into those who "deserve" greater economic security and those who don't) into one and the same depiction of developed-world economic crisis. In so many words, you're walking right down neoliberal capitalism's ideological garden path: the idea that it's not possible to be anticapitalist without being an economic nationalist, and that every conceivable alternative to some form of Hillary Clinton is ultimately reducible to some form of Donald Trump. On the contrary, those of us on the socialism side of "socialism or barbarism" don't object to capitalism because it's exploiting American workers , we object because it's exploiting workers , and insisting on this crucial point against all chauvinist pressure ("workers of all lands , unite!") is what fundamentally separates our anticapitalism from the pseudo-anticapitalism of fascists.
marku52 11.16.16 at 5:01 pm 16
Maclaren: I'm with you. I well remember Obama and his "pivot to deficit reduction" and "green shoots" while I was screaming at the TV 'No!! Not Now!"
And then he tried for a "grand bargain" with the Reps over chained CPI adjustment for SS, and he became my active enemy. I was a Democrat. Where did my party go?
politicalfootball 11.16.16 at 5:27 pm ( 17 )
Just chiming in here: The implicit deal between the elites and the hoi polloi was that the economy would be run with minimal competence. Throughout the west, those elites have broken faith with the masses on that issue, and are being punished for it.I'm less inclined to attach responsibility to Obama, Clinton or the Democratic Party than some. If Democrats had their way, the economy would have been managed considerably more competently.
Always remember that the rejection of the elites wasn't just a rejection of Democrats. The Republican elite also took it in the neck.
I'll also dissent from the view that race wasn't decisive in this election. Under different circumstances, we might have had Bernie's revolution rather than Trump's, but Trump's coalition is composed of overt racists and people who are indifferent to overt racism.
engels 11.16.16 at 7:12 pm 18
I find the discussions over identity politics so intensely frustrating. A lot of people on the left have gone all-in on self-righteous anger
Identity politics (and to some extent probably the rhetorical style that goes with it) isn't a 'left' thing, it's a liberal thing. It's a bête noire for many on the left-see eg. Nancy Fraser's work.
The Anglo/online genus what you get when you subtract class, socialism and real-world organisation from politics and add in a lot of bored students and professionals with internet connections in the context of a political culture (America's) that already valorises individual aggression to a unique degree.
Omega Centauri 11.16.16 at 7:15 pm ( 19 )
As polticalfoorball @15 says. The Democrats just didn't have the political muscle to deliver on those things. There really is a dynamic thats been playing out: Democrats don't get enough governing capacity because they did poorly in the election, which means their projects to improve the economy are neutered or allowed through only in a very weakened form. Then the next election cycle the neuterers use that failure as a weapon to take even more governing capacity away. Its not a failure of will, its a failure to get on top of the political feedback loop.Manta 11.16.16 at 7:32 pm 20
@15 politicalfootball 11.16.16 at 5:27 pm
"Throughout the west, those elites have broken faith with the masses on that issue, and are being punished for it."Could you specify some "elite" that has been punished?
nastywoman 11.16.16 at 7:36 pm ( 21 )
@13
'I'm not sure what the thinking is here.'The definition of 'Keynesianism' is:
'the economic theories and programs ascribed to John M. Keynes and his followers; specifically : the advocacy of monetary and fiscal programs by government to increase employment and spending'
– and if it is done wisely – like in most European countries before 2000 it is one of the least 'braindead' things.
But with the introduction of the Euro – some governmental programs – lead (especially in Spain) to horrendous self-destructive housing and building bubbles – which lead to the conclusion that such programs – which allow 'gambling with houses' are pretty much 'braindead'.
Or shorter: The quality of Keynesianism depends on NOT doing it 'braindead'.
mclaren 11.16.16 at 8:28 pm ( 25 )
Cranky Observer in #11 makes some excellent points. Crucially, he asks: "Finally, you need to address the fundamental question: assuming all you say is true (arguendo), how does destroying the Affordable Care Act, Social Security, and Medicare help those in the economically depressed areas?"There actually is a logic at work in the Rust Belt voters for voted for Trump. I don't think it's good logic, but it makes sense in its own warped way. The calculation the Trump voters seem to be making in the Rust Belt is that it's better to have a job and no health insurance and no medicare and no social security, than no job but the ACA (with $7,000 deductibles you can't afford to pay for anyway) plus medicare (since most of these voters are healthy, they figure they'll never get sick) plus social security (most of these voters are not 65 or older, and probably think they'll never age - or perhaps don't believe that social security will be solvent when they do need it).
It's the same twisted logic that goes on with protectionism. Rust Belt workers figure that it's better to have a job and not be able to afford a Chinese-made laptop than not to have a job but plenty of cheap foreign-made widgets you could buy if you had any money (which you don't). That logic doesn't parse if you run through the economics (because protectionism will destroy the very jobs they think they're saving), but it can be sold as a tweet in a political campaign.
As for 63.7% home ownership stats in 2016, vast numbers of those "owned" homes were snapped up by giant banks and other financial entities like hedge funds which then rented those homes out. So the home ownership stats in 2016 are extremely deceptive. Much of the home-buying since the 2009 crash has been investment purchases. Foreclosure home purchases for rent is now a huge thriving business, and it's fueling a second housing bubble. Particularly because in many ways it repeats the financially frothy aspects of the early 2000s housing bubble - banks and investment firms are issuing junks bonds based on rosy estimates of ever-escalating rents and housing prices, they use those junk financial instruments (and others like CDOs) to buy houses which then get rented out at inflated prices, the rental income gets used to fund more tranches of investment which fuels more buy-to-rent home buying. Rents have already skyrocketed far beyond incomes on the East and West Coast, so this can't continue. But home prices and rents keep rising. There is no city in the United States today where a worker making minimum wage can afford to rent a one-bedroom apartment and have money left over to eat and pay for a car, health insurance, etc. If home ownership were really so robust, this couldn't possibly be the case. The fact that rents keep skyrocketing even as undocumented hispanics return to Mexico in record numbers while post-9/11 ICE restrictions have hammered legal immigration numbers way, way down suggests that home ownership is not nearly as robust as the deceptive numbers indicate.
Political football in #15 remarks: "I'll also dissent from the view that race wasn't decisive in this election. Under different circumstances, we might have had Bernie's revolution rather than Trump's, but Trump's coalition is composed of overt racists and people who are indifferent to overt racism."
Race was important, but not the root cause of the Trump victory. How do we know this? Tump himself is telling us. Look at Trump's first announced actions - deport 3 million undocumented immigrants who have committed crimes, ram through vast tax cuts for the rich, and end the inheritance tax.
If Trump's motivation (and his base's motivation) was pure racism, Trump's first announced action would be something like passing laws that made it illegal to marry undocumented workers. His first act would be to roll back the legalization of black/white marriage and re-instate segregation. Trump isn't promising any of that.
Instead Trump's (bad) policies are based around enriching billionaires and shutting down immigration. Bear in mind that 43% of all new jobs created since 2009 went to immigrants and you start to realize that Trump's base is reacting to economic pressure by scapegoating immigrants, not racism by itself. If it were pure racism we'd have Trump and Ryan proposing a bunch of new Nuremberg laws. Make it illegal to have sex with muslims, federally fund segregated black schools and pass laws to force black kids to get bussed to them, create apartheid-style zones where only blacks can live, that sort of thing. Trump's first announced actions involve enriching the fantastically wealthy and enacting dumb self-destructive protectionism via punitive immigration control. That's protectionism + class war of the rich against everyone else, not racism. The protectionist immigration-control + deportation part of Trump's program is sweet sweet music to the working class people in the Rust Belt. They think the 43% of jobs taken by immigrants will come back. They don't realize that those are mostly jobs no one wants to do anyway, and that most of those jobs are already in the process of getting automated out of existence.
The claim "Trump's coalition is composed of overt racists and people who are indifferent to overt racism" is incomplete. Trump's coalition actually consists of 3 parts and it's highly unstable: [1] racists, [2] plutocrats, [3] working class people slammed hard by globalization for whom Democrats have done little or nothing.
Here's an argument that may resonate: the first two groups in Trump's coalition are unreachable. Liberal Democrats can't sweet-talk racists out of being racist and we certainly have nothing to offer the plutocrats. So the only part of Trump's coalition that is really reachable by liberal Democrats is the third group. Shouldn't we be concentrating on that third group, then?
The good news is that Trump's coalition is unstable. The plutocrats and Rust Belters are natural enemies. Since the plutocrats are perceived as running giant corporations that import large numbers of non-white immigrants to lower wages, the racists are not big fans of that group either.
Listen to Steve Bannon, a classic stormfront type - he says he wants to blow up both the Democratic and the Republican party. He calls himself a "Leninist" in a recent interview and vows to wreck all elite U.S. institutions (universities, giant multinationals), not just the Democratic party.
Why? Because the stormfront types consider elite U.S. institutions like CitiBank as equally culpable with Democrats in supposedly destroying white people in the U.S. According to Bannon's twisted skinhead logic, Democrats are allegedly race traitors for cultural reasons, but big U.S. corporations and elite institutions are supposedly equally guilty of economic race treason by importing vast numbers of non-white immigrants via H1B visas, by offshoring jobs from mostly caucasian-populated red states to non-white countries like India, Africa, China, and by using elite U.S. universities to trawl the world for the best (often non-white) students, etc. Bannon's "great day of the rope" includes the plutocrats as well as people of color.
These natural fractures in the Trump coalition are real, and Democrats can exploit them to weaken and destroy Republicans. But we have to get away from condemning all Republicans as racists because if we go down that route, we won't realize how fractured and unstable the Trump coalition really is.
bruce wilder 11.16.16 at 10:33 pm 31 ( 31 )
The short version of my thinking on the Obama stimulus is this: Keynesian stimulus spending is a free lunch; it doesn't really matter what you spend money on up to a very generous point, so it seems ready-made for legislative log-rolling. If Obama could not get a very big stimulus indeed thru a Democratic Congress long out of power, Obama wasn't really trying. And, well-chosen spending on pork barrel projects is popular and gets Congressional critters re-elected. So, again, if the stimulus is small and the Democratic Congress doesn't get re-elected, Obama isn't really trying.Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism, because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference.
engels 11.16.16 at 10:33 pm 32
Ps. Should prob add that identity politics isn't the same thing as feminism, anti-racism, LGBT politics, etc. They're all needed now more than ever.
What we don't need more of imo is a particular liberal/middle-class form of those things with particular assumptions (meritocratic and individualist), epistemology (strongly subjectivist) and rhetorical style (which often aims humiliating opponents from a position of relative knowledge/status rather than verbal engagement).
Helen 11.16.16 at 10:35 pm ( 33 )
I don't know why I'm even having to say this, as it's so obvious. The "leftists" (for want of a better word) and feminists who I know are also against neoliberalism. They are against the selloff of public assets to enterprises for private profit. They want to see a solution to the rapidly shrinking job market as technology replaces jobs (no, it's not enough for the Heroic Workers to Seize the Means of Production – the means of production are different now and the solution is going to have to be more complex than just "bring back manufacturing" or "introduce tariffs".) They want to roll back the tax cuts for the rich which have whittled down our revenue base this century. They want corporations and the top 10% to pay their fair share, and concomitantly they want pensioners, the unemployed and people caring for children to have a proper living wage.They support a universal "single payer" health care system, which we social democratic squishy types managed to actually introduce in the 1970s, but now we have to fight against right wing governments trying to roll it back They support a better system of public education. They support a science-based approach to climate change where it is taken seriously for the threat it is and given priority in Government policy. They support spending less on the Military and getting out of international disputes which we (Western nations) only seem to exacerbate.
This is not an exhaustive list.
Yet just because the same people say that the dominant Western countries (and my own) still suffer from institutionalised racism and sexism, which is not some kind of cake icing but actually ruin lives and kill people, we are "all about identity politics" and cannot possibly have enough brain cells to think about the issues I described in para 1.
I don't find it instructive or useful.
Main Street Muse 11.16.16 at 10:54 pm 34
The slow recovery was only one factor. Wages have been stagnant since Reagan. And honestly, if a white Republican president had stabilized the economy, killed Osama Bin Laden and got rid of pre-existing condition issue with healthcare, the GOP would be BRAGGING all over it. Let's remember that we have ONE party that has been devoted to racist appeals, lying and putting party over country for decades.
Obama entered office as the economy crashed over a cliff. Instead of reforming the banks and punishing the bankers who engaged in fraudulent activities, he waded into healthcare reform. Banks are bigger today than they were in 2008. And tell me again, which bankers were punished for the fraud? Not a one All that Repo 105 maneuvering, stuffing the retirement funds with toxic assets – etc. and so on – all of that was perfectly legal? And if legal, all of that was totally bonusable? Yes! In America, such failure is gifted with huge bonuses, thanks to the American taxpayer.
Meanwhile, homeowners saw huge drops the value of their homes. Some are still underwater with the mortgage. It's a shame that politicians and reporters in DC don't get out much.
Concurrently, right before the election, ACA premiums skyrocketed. If you are self-insured, ACA is NOT affordable. It doesn't matter that prior to ACA, premiums increased astronomically. Obama promised AFFORDABLE healthcare. In my state, we have essentially a monopoly on health insurance, and the costs are absurd. But that's in part because the state Republicans refused to expand Medicaid.
Don't underestimate HRC's serious issues. HRC had one speech for the bankers and another for everyone else. Why didn't she release the GS transcripts? When did the Democrats become the party of Wall Street?
She also made the same idiotic mistake that Romney did – disparage a large swathe of American voters (basket of deplorables is this year's 47%.)
And then we had a nation of voters intent on the outsider. Bernie Sanders had an improbable run at it – the Wikileaks emails showed that the DNC did what they could to get rid of him as a threat.
Well America has done and gone elected themselves an outsider. Lucky us.
[Nov 16, 2016] We need the adoption of a federal job guarantee, a policy that would insure the option for anyone to work in a public sector program, similar to what the Works Progress Administration established in the 1930s.
Notable quotes:
"... Each job offered under a federal employment assurance would be at a wage rate above the poverty threshold, and would include benefits like health insurance. A public sector job guarantee would establish a quality of work and the level of compensation offered for all jobs. The program would be great for the country: It could meet a wide range of the nation's physical and human infrastructure needs, ranging from the building and maintenance of roads, bridges and highways, to school upkeep and the provision of quality child care services"" ..."
Nov 16, 2016 | www.nakedcapitalism.com
financial matters November 16, 2016 at 8:30 amNot sure if Trump realizes this but there is already a blueprint for creating infrastructure jobs. (hat tip SK)
""A lot of this has to do with the fact that Americans continue to be subjected to bad jobs or unstable employment - and those who are employed often face stagnant or even declining wages. The fragility of Americans' economic well-being is epitomized by the National Coalition for the Homeless' estimate that 44 percent of homeless persons actually have jobs, albeit poorly paid jobs.
The expansion of "flex work" arrangements, which make work hours uncertain, contribute significantly to income volatility for workers in low-pay sectors of the economy. Around 50 percent of Americans could not meet a $400 emergency expense by drawing upon their personal savings if they had to.
An alternative to these conditions is the adoption of a federal job guarantee, a policy that would insure the option for anyone to work in a public sector program, similar to what the Works Progress Administration established in the 1930s.
Each job offered under a federal employment assurance would be at a wage rate above the poverty threshold, and would include benefits like health insurance. A public sector job guarantee would establish a quality of work and the level of compensation offered for all jobs. The program would be great for the country: It could meet a wide range of the nation's physical and human infrastructure needs, ranging from the building and maintenance of roads, bridges and highways, to school upkeep and the provision of quality child care services""
[Nov 15, 2016] Trump in the White House by Noam Chomsky
Notable quotes:
"... The angry and disaffected are victims of the neoliberal policies of the past generation, the policies described in congressional testimony by Fed chair Alan Greenspan ..."
"... As Greenspan explained during his glory days, his successes in economic management were based substantially on "growing worker insecurity." Intimidated working people would not ask for higher wages, benefits, and security but would be satisfied with the stagnating wages and reduced benefits that signal a healthy economy by neoliberal standards. ..."
"... in 2007, at the peak of the neoliberal miracle, real wages for non-supervisory workers were lower than they had been years earlier, or that real wages for male workers are about at 1960s levels while spectacular gains have gone to the pockets of a very few at the top, disproportionately a fraction of 1%. Not the result of market forces, achievement, or merit, but rather of definite policy decisions, matters reviewed carefully by economist Dean Baker in recently published work. ..."
Nov 15, 2016 | www.defenddemocracy.press
According to current information, Trump broke all records in the support he received from white voters, working class and lower middle class, particularly in the $50,000 to $90,000 income range, rural and suburban, primarily those without college education. These groups share the anger throughout the West at the centrist establishment, revealed as well in the unanticipated Brexit vote and the collapse of centrist parties in continental Europe. The angry and disaffected are victims of the neoliberal policies of the past generation, the policies described in congressional testimony by Fed chair Alan Greenspan – St. Alan as he was called reverentially by the economics profession and other admirers until the miraculous economy he was supervising crashed in 2007-8, threatening to bring the whole world economy down with it. As Greenspan explained during his glory days, his successes in economic management were based substantially on "growing worker insecurity." Intimidated working people would not ask for higher wages, benefits, and security but would be satisfied with the stagnating wages and reduced benefits that signal a healthy economy by neoliberal standards.Working people who have been the subjects of these experiments in economic theory are, oddly, not particularly happy about the outcome. They are not, for example, overjoyed at the fact that in 2007, at the peak of the neoliberal miracle, real wages for non-supervisory workers were lower than they had been years earlier, or that real wages for male workers are about at 1960s levels while spectacular gains have gone to the pockets of a very few at the top, disproportionately a fraction of 1%. Not the result of market forces, achievement, or merit, but rather of definite policy decisions, matters reviewed carefully by economist Dean Baker in recently published work.
The fate of the minimum wage illustrates what has been happening. Through the periods of high and egalitarian growth in the '50s and '60s, the minimum wage – which sets a floor for other wages – tracked productivity. That ended with the onset of neoliberal doctrine. Since then the minimum wage has stagnated (in real value). Had it continued as before, it would probably be close to $20 per hour. Today it is considered a political revolution to raise it to $15.
With all the talk of near-full employment today, labor force participation remains below the earlier norm. And for a working man, there is a great difference between a steady job in manufacturing with union wages and benefits, as in earlier years, and a temporary job with little security in some service profession. Apart from wages, benefits, and security, there is a loss of dignity, of hope for the future, of a sense that this is a world in which I belong and play a worthwhile role.
The impact is captured well in Arlie Hochschild's sensitive and illuminating portrayal of a Trump stronghold in Louisiana, where she lived and worked for many years. She uses the image of a line in which these people are standing, expecting to move forward steadily as they work hard and keep to all the conventional values. But their position in the line has stalled. Ahead of them, they see people leaping forward, but that does not cause much distress, because it is "the American way" for (alleged) merit to be rewarded. What does cause real distress is what is happening behind them.
... ... ...
These are just samples of the real lives of Trump supporters, who are deluded to believe that Trump will do something to remedy their plight, though the merest look at his fiscal and other proposals demonstrates the opposite – posing a task for activists who hope to fend off the worst and to advance desperately needed changes.
Exit polls reveal that the passionate support for Trump was inspired primarily by the belief that he represented change, while Clinton was perceived as the candidate who would perpetuate their distress. The "change" that Trump is likely to bring will be harmful or worse, but it is understandable that the consequences are not clear to isolated people in an atomized society lacking the kinds of associations (like unions) that can educate and organize. That is a crucial difference between today's despair and the generally hopeful attitudes of many working people under much greater duress during the great depression of the 1930s.
[Nov 14, 2016] Clintons electoral defeat is bound up with the nature of the Democratic Party, an alliance of Wall Street and the military-intelligence apparatus with privileged sections of the upper-middle class based on the politics of race, gender and sexual orientation
Notable quotes:
"... The affluent and rich voted for Clinton by a much broader margin than they had voted for the Democratic candidate in 2012. Among those with incomes between $100,000 and $200,000, Clinton benefited from a 9-point Democratic swing. Voters with family incomes above $250,000 swung toward Clinton by 11 percentage points. The number of Democratic voters amongst the wealthiest voting block increased from 2.16 million in 2012 to 3.46 million in 2016-a jump of 60 percent. ..."
"... Clinton's electoral defeat is bound up with the nature of the Democratic Party, an alliance of Wall Street and the military-intelligence apparatus with privileged sections of the upper-middle class based on the politics of race, gender and sexual orientation ..."
"... Over the course of the last forty years, the Democratic Party has abandoned all pretenses of social reform, a process escalated under Obama. Working with the Republican Party and the trade unions, it is responsible for enacting social policies that have impoverished vast sections of the working class, regardless of race or gender. ..."
Nov 14, 2016 | www.wsws.org
The elections saw a massive shift in party support among the poorest and wealthiest voters. The share of votes for the Republicans amongst the most impoverished section of workers, those with family incomes under $30,000, increased by 10 percentage points from 2012. In several key Midwestern states, the swing of the poorest voters toward Trump was even larger: Wisconsin (17-point swing), Iowa (20 points), Indiana (19 points) and Pennsylvania (18 points).The swing to Republicans among the $30,000 to $50,000 family income range was 6 percentage points. Those with incomes between $50,000 and $100,000 swung away from the Republicans compared to 2012 by 2 points.
The affluent and rich voted for Clinton by a much broader margin than they had voted for the Democratic candidate in 2012. Among those with incomes between $100,000 and $200,000, Clinton benefited from a 9-point Democratic swing. Voters with family incomes above $250,000 swung toward Clinton by 11 percentage points. The number of Democratic voters amongst the wealthiest voting block increased from 2.16 million in 2012 to 3.46 million in 2016-a jump of 60 percent.
Clinton was unable to make up for the vote decline among women (2.1 million), African Americans (3.2 million), and youth (1.2 million), who came overwhelmingly from the poor and working class, with the increase among the rich (1.3 million).
Clinton's electoral defeat is bound up with the nature of the Democratic Party, an alliance of Wall Street and the military-intelligence apparatus with privileged sections of the upper-middle class based on the politics of race, gender and sexual orientation.
Over the course of the last forty years, the Democratic Party has abandoned all pretenses of social reform, a process escalated under Obama. Working with the Republican Party and the trade unions, it is responsible for enacting social policies that have impoverished vast sections of the working class, regardless of race or gender.
[Nov 14, 2016] In-Person Coaching at University versus Technology Proactive, Constant Contact Matters naked capitalism
Nov 13, 2016 | www.nakedcapitalism.com
by Lambert Strether Lambert here: Apparently, then, Neoliberal U plans to build "trust-based relations" and offer "personalised attention" by gutting tenured faculty, shifting the teaching load to contingent faculty, redistributing salaries to administrators, and socking money into fancy facilities. Let me know how that works out.By Philip Oreopoulos, Professor of Economics and Public Policy, University of Toronto, and Uros Petronijevic, Assistant Professor, Department of Economics, York University. Originally published at VoxEU .
Questions over the value of a university education are underscored by negative student experiences. Personalised coaching is a promising, but costly, tool to improve student experiences and performance. This column presents the results from an experiment comparing coaching with lower cost 'nudge' interventions. While coaching led to a significant increase in average course grades, online and text message interventions had no effect. The benefits of coaching appear to derive from the trust-based nature of relationships and personalised attention.
Policymakers and academics share growing concerns about stagnating college completion rates and negative student experiences. Recent figures suggest that only 56% of students who pursue a bachelors' degree complete it within six years (Symonds et al. 2011), and it is increasingly unclear whether students who attain degrees acquire meaningful new skills along the way (Arum and Roska 2011). Students enter college underprepared, with those who procrastinate, do not study enough, or have superficial attitudes about success performing particularly poorly (Beattie et al 2016).
Personalised Coaching to Improve Outcomes
A promising tool for improving students' college outcomes and experiences is personalised coaching. At both the high school and college levels, an emerging recent literature demonstrates the benefits of helping students foster motivation, effort, good study habits, and time-management skills through structured tutoring and coaching. Cook et al. (2014) find that cognitive behavioural therapy and tutoring generate large improvements in maths scores and high school graduation rates for troubled youth in Chicago, while Oreopoulos et al. (forthcoming) show that coaching, tutoring, and group activities lead to large increases in high school graduation and college enrolment among youth in a Toronto public housing project. At the college level, Scrivener and Weiss (2013) find that the Accelerated Study in Associates Program – a bundle of coaching, tutoring, and student success workshops – in CUNY community colleges nearly doubled graduation rates and Bettinger and Baker (2014) show that telephone coaching by Inside Track professionals boosts two-year college retention by 15% across several higher-education institutions.
While structured, one-on-one support can have large effects on student outcomes, it is often costly to implement and difficult to scale up to the student population at large (Bloom 1984). Noting this challenge, we set out to build on recent advances in social-psychology and behavioural economics, investigating whether technology – specifically, online exercises, and text and email messaging – can be used to generate comparable benefits to one-on-one coaching interventions but at lower costs among first-year university students (Oreopoulos and Petronijevic 2016).
Several recent studies in social-psychology find that short, appropriately timed interventions can have lasting effects on student outcomes (Yeager and Walton 2011, Cohen and Garcia 2014, Walton 2014). Relatively large improvements on academic performance have been documented from interventions that help students define their long-run goals or purpose for learning (Morisano et al. 2010, Yeager et al. 2014), teach the 'growth mindset' idea that intelligence is malleable (Yeager et al. 2016), and help students keep negative events in perspective by self-affirming their values (Cohen and Sherman 2014). In contrast to these one-time interventions, other studies in education and behavioural economics attempt to maintain constant, low-touch contact with students or their parents at a low cost by using technology to provide consistent reminders aimed at improving outcomes. Providing text, email, and phone call updates to parents about their students' progress in school has been shown to boost both parental engagement and student performance (Kraft and Dougherty 2013, Bergman 2016, Kraft and Rogers 2014, Mayer et al. 2015), while direct text-message communication with college and university students has been used in attempts to increase financial aid renewal (Castleman and Page 2014) and improve academic outcomes (Castleman and Meyer 2016).
Can Lower-Cost Alternatives to One-On-One Coaching Be Effective?
We examine whether benefits comparable to those obtained from one-on-one coaching can be achieved at lower cost by either of two specific interventions (Oreopoulos and Petronijevic 2016). We examine a one-time online intervention designed to affirm students' goals and purpose for attending university, and a full-year text and email messaging campaign that provides weekly reminders of academic advice and motivation to students. We work with a sample of more than 4,000 undergraduate students who are enrolled in introductory economics courses at a large representative college in Canada, randomly assigning students to one of three treatment groups or a control group. The treatment groups consist of:
A one-time, online exercise completed during the first two weeks of class in the autumn; The online intervention plus text and email messaging throughout the full academic year; and The online intervention plus one-on-one coaching in which students are assigned to upper-year undergraduate students who act as coaches.Students in the control group are given a personality test measuring the Big Five personality traits.
Figure 1 summarises our main results on course grades. Overall, we find large positive effects from the coaching programme, amounting to approximately a 4.92 percentage-point increase in average course grades; we also find that coached students experience a 0.35 standard-deviation increase in GPA. In contrast, we find no effects on academic outcomes from either the online exercise or the text messaging campaign, even after investigating potentially heterogeneous treatment effects across several student characteristics, including gender, age, incoming high school average, international-student status, and whether students live on residence.
Figure 1 . Main effects of interventions
Our results suggest that the benefits of personal coaching are not easily replicated by low-cost interventions using technology. Many successful coaching programmes involve regular student-coach interaction facilitated either by mandatory meetings between coaches and students or proactive coaches regularly initiating contact (Scrivener and Weiss 2013, Bettinger and Baker 2014, Cook et al. 2014, Oreopoulos et al. forthcoming). Our coaches initiated contact and built trust with students over time, in person and through text messaging. Through a series of gentle, open-ended questions, the coaches could understand the problems students were facing and provide clear advice, ending most conversations with students being able to take at least one specific action to help solve their current problems.
Our text messaging campaign offered weekly academic advice, resource information, and motivation, but did not initiate communication with individual students about specific issues (e.g. help with writing or an upcoming mid-term). The text-messaging team often invited students to reply to messages and share their concerns but was unable to do this with the same efficacy as a coach, nor were we able to establish the same rapport with students. Our inability to reach out to all students and softly guide the conversation likely prevented us from learning the important details of their specific problems. Although we provided answers and advice to the questions we received, we did not have as much information on the students' backgrounds as our coaches did, and thus could not tailor our responses to each student's specific circumstances.
Our coaches were also able to build trust with students by fulfilling a support role. Figure 2 provides an example of how the coaching service was more effective than the text messaging campaign in this respect. The text messages attempted to nudge students in the right direction, rather than provide tailored support. The left panel of Figure 2 shows three consecutive text messages, in which we provide a tip on stress management, an inspirational quote, and a time-management tip around the exam period. As in this example, it was often the case that students would not respond to such messages. In contrast, the student-coach interaction in the right panel shows our coaches offering more of a supportive role rather than trying to simply nudge the student in a specific direction. The coach starts by asking an open-ended question, to which the student responds, and the coach then guides the conversation forward. In this example, the coach assures the student that they will be available to help with a pending deadline and shows a genuine interest in the events in the student's life.
Figure 2 . Distinguishing the text-messaging campaign and the coaching programme
Coaches also kept records of their evolving conversations with students and could check in to ask how previously discussed issues were being resolved. Although we kept a record of all text message conversations, a lack of resources prevented us from conducting regular check-ups to see how previous events had unfolded, which likely kept us from helping students effectively with their problem and from establishing the trust required for students to share additional problems.
Concluding Remarks
In sum, the two key features that distinguish the coaching service from the texting campaign are that coaches proactively initiated discussion with students about their problems and could establish relationships based on trust in which students felt comfortable to openly discuss their issues. Future work attempting to improve academic outcomes in higher education by using technology to maintain constant contact with students may need to acknowledge that simply nudging students in the right direction is not enough. A more personalised approach is likely required, in which coaches or mentors initially guide students through a series of gentle conversations and subsequently show a proactive interest in students' lives. These conversations need not necessarily occur during face-to-face meetings, but the available evidence suggests that they should occur frequently and be initiated by the coaches. While such an intervention is likely to be costlier than the text messaging campaign in our study, it is also likely to be more effective but still less costly than the personalised coaching treatment.
References in the original post . allan November 13, 2016 at 7:00 am
lyle November 13, 2016 at 8:25 am"Personalised coaching is a promising, but costly, tool to improve student experiences …"
… that used to be called, in the long ago time before the App Store, office hours.
Back in the day when there were these non-administrative inefficiencies called tenure track faculty.
Surely Mechanical Turk can find a disruptive application in this space.However also way back when few students bothered to go to faculty office hours. (early 1970s) . In addition how many students go to the departmental seminars in their major field? Again undergraduate attendance at them is low.
Or join clubs in their major field that invite faculty to come talk about their research (which is easy to get a prof to do to talk about his research). (Today of course you could do seminars and the like via podcasts etc).
However of course the mentoring also takes student time which may also be scarce.
[Nov 06, 2016] Bernie Sanders Supporter Bashes Hillary Clinton from Her Own Stage 'Trapped in World of Elite,' 'Lost Grip of Average Person'
Notable quotes:
"... He opened his remarks by bashing Donald Trump on student loan debt, but then surprisingly turned to bashing Hillary Clinton from her own stage. "Unfortunately, Hillary doesn't really care about this issue either," Vanfosson said. "The only thing she cares about is pleasing her donors, the billionaires who fund her campaign. The only people that really trust Hillary are Goldman Sachs, CitiGroup can trust Hillary, the military industrial complex can trust Hillary. Her good friend Henry Kissinger can trust Hillary." ..."
"... "She is so trapped in the world of the elite that she has completely lost grip on what it's like to be an average person," Vanfosson continued. "She doesn't care. Voting for another lesser of two evils, there's no point." ..."
www.breitbart.com
Just a few days before the general election, Democratic presidential nominee Hillary Rodham Clinton and her running mate Sen. Tim Kaine (D-VA) still can't unite her party. Supporters of Sen. Bernie Sanders of Vermont, her Democratic primary rival, are disrupting her campaign's efforts to take on GOP nominee Donald J. Trump, and in Iowa on Saturday one prominent Sanders backer was actually escorted out of a Clinton campaign event for urging those present not to vote for Clinton-for which he was cheered by the crowd.
Kaleb Vanfosson, the president of Iowa State University's Students for Bernie chapter, bashed Hillary Clinton and told rally-goers at her own campaign event not to vote for her. He was cheered.
He opened his remarks by bashing Donald Trump on student loan debt, but then surprisingly turned to bashing Hillary Clinton from her own stage. "Unfortunately, Hillary doesn't really care about this issue either," Vanfosson said. "The only thing she cares about is pleasing her donors, the billionaires who fund her campaign. The only people that really trust Hillary are Goldman Sachs, CitiGroup can trust Hillary, the military industrial complex can trust Hillary. Her good friend Henry Kissinger can trust Hillary."
The crowd at the Clinton-Kaine event erupted in applause.
"She is so trapped in the world of the elite that she has completely lost grip on what it's like to be an average person," Vanfosson continued. "She doesn't care. Voting for another lesser of two evils, there's no point."
At that point, a Clinton staffer rushed on stage and grabbed the young man by the arm to escort him off the stage and out of the event.
[Nov 06, 2016] Michael Hudson on Meet the Renegades
Notable quotes:
"... In fact, I would posit that the Ivy League, especially Yale, Princeton, Harvard and MIT, are the principal crime factories in America today. ..."
"... Brownback is in Kansas; UMKC is in Missouri. There is a Kansas City in Kansas, and another Kansas City in Missouri. Missouri is not as red as KS, but it's still a red state. ..."
"... UMKC is part of the state system and most likely receives no funding from the city. It was home to New Letters, a respected literary magazine edited by poet John Ciardi. I hail from Kanasa City and always thought of UMKC as a decent commuter school, mostly catering to the educational needs of adult city dwellers. But the evolution of both the Econ and jazz studies departments lead me to suspect things have changed. Whether that's by design or through organic happenstance I don't know. ..."
"... Couldn't a Marxian analysis of capitalism as a whole also shed some light on this issue? I think Hudson is pretty much right but I think, like Sanders, he's offering a reformist option as opposed to a full on critique of the entire system. ..."
"... Not that a revolution is the option you necessarily want to go with, I just think that Marx's criticism of capitalism has useful information that could help with shaping the perspective here. ..."
Nov 05, 2016 | www.nakedcapitalism.com
Michael Hudson spends a half hour with Meet the Renegades explaining his views on money, finance, economic training, rentier capitalism, and how debt overhangs operate. Hudson fans will recognize his regular themes. This is a good segment for introducing people you know to Hudson and to heterodox economic ideas.EndOfTheWorld November 5, 2016 at 5:52 am
Distrubed Voter November 5, 2016 at 6:21 amI've always found it interesting that both Hudson and Bill Black are on the faculty of UMKC, which is a state university in a pretty conservative state. It's possible that some of the funding for UMKC comes from the municipality of Kansas City, MO, but that town has never been known as a hotbed of radical intellectuality either.
craazyboy November 5, 2016 at 8:43 amJoseph Campbell didn't teach at an Ivy League either. Conformity starts with the faculty in your own department … and the Ivy League is as status quo and status conscious as it gets.
sgt_doom November 5, 2016 at 1:31 pmThe Ivy League are not much different than privately held corporations when you consider who their alma materi are, how much money the alma materi have, and where Ivy League endowments come from.
a different chris November 5, 2016 at 8:40 amIn fact, I would posit that the Ivy League, especially Yale, Princeton, Harvard and MIT, are the principal crime factories in America today.
Please recall that the dood who financed Liberty Lobby and other white supremacist nonsense was Koch family patriarch, Fred Koch, who was a trustee at MIT. (Ever hear Noam Chomsky complain about that????? Of course not!)
EndOfTheWorld November 5, 2016 at 11:11 amAh but is it really an inherently conservative state fiscally, or just socially? That is, are the people like Brownback appealing to one sort of conservatism and using that to do a "trust me" on the other sort?
I would say it's not unreasonable for anybody to delegate something they are not so sure of to somebody they trust for other reasons.
Randy November 5, 2016 at 8:53 amBrownback is in Kansas; UMKC is in Missouri. There is a Kansas City in Kansas, and another Kansas City in Missouri. Missouri is not as red as KS, but it's still a red state.
Moneta November 5, 2016 at 8:59 amUMKC is part of the state system and most likely receives no funding from the city. It was home to New Letters, a respected literary magazine edited by poet John Ciardi. I hail from Kanasa City and always thought of UMKC as a decent commuter school, mostly catering to the educational needs of adult city dwellers. But the evolution of both the Econ and jazz studies departments lead me to suspect things have changed. Whether that's by design or through organic happenstance I don't know.
Steve H. November 5, 2016 at 10:47 amIf you are not on the money makers' distribution list, it would make sense to find other ways to get some of that loot if you can't the traditional way…
You can be conservative in your social values but want change, i.e. liberalism, in the way the monetary system distributes the money.
EndOfTheWorld November 5, 2016 at 7:32 amThank Warren Mosler, wouldn't be there without his direct support.
Benedict@Large November 5, 2016 at 9:32 amWell, little UMKC can claim to be pretty much "cutting edge" in economics with these two stalwarts on their faculty.
Amateur Socialist November 5, 2016 at 9:14 amThe UMKC is also the home of the Kansas City School of Economics, more commonly known as the MMT School. Neither Hudson nor Black are MMTers per se, but both have grown by their affiliation with the school.
susan the other November 5, 2016 at 11:04 amThanks for sharing this excellent interview. Watching it I realized the people I actually admire more than Hudson are his students. They must care more about learning the truth than securing wealth and job prospects on wall street.
EndOfTheWorld November 5, 2016 at 11:08 amfun to learn how Hudson fired Greenspan way back when
King Arthur November 5, 2016 at 11:49 amlol "Free trade" is Orwellian word usage.
BecauseTradition November 5, 2016 at 12:29 pmCouldn't a Marxian analysis of capitalism as a whole also shed some light on this issue? I think Hudson is pretty much right but I think, like Sanders, he's offering a reformist option as opposed to a full on critique of the entire system.
Not that a revolution is the option you necessarily want to go with, I just think that Marx's criticism of capitalism has useful information that could help with shaping the perspective here.
Steve in Dallas November 5, 2016 at 12:46 pmThe solution is write down the debt. Michael Hudson
Why not Steve Keen's "A Modern Jubilee" since non-debtors have been cheated by the system too?
Ivy November 5, 2016 at 1:35 pmI asked Yves Smith at the Dallas meetup last week (paraphrasing) "Do you meet with Michael Hudson and Bill Black… is the independent media community, or any community, organizing around Michael Hudson and Bill Black… to not only support and promote Hudson's and Black's perspectives but to help develop their concepts and 'fine tune' their messaging?" I said to Yves "Hudson and Black are clearly the leaders we desperately need to rally behind and push into Washington… they clearly know what needs to be done… a PR machine needs to be developed… to get their messages out to our families, friends, and acquaintances… unfortunately, the current messaging is not good enough… I can't get my family, friends, and others to engage and echo the messaging to their family, friends, etc."
Michael Hudson has been good at repeating his central message… 'by increasing land, monopoly, and finance rent costs… the 1% are a highly organized mafia methodically looting our economy… effectively raping, pillaging and consequently destroying every component of our social structures'.
Very unfortunately, Bill Blacks central message seems to have been lost for years now… he doesn't repeat his central message… 'the crimes must be stopped… there is no alternative… looting criminals MUST be publicly exposed, investigated, indicted, prosecuted, convicted, punished and their loot returned to society… by letting cheaters prosper, organized white-collar crime, perpetrated by the top-most leaders of our public and private institutions, has become an epidemic… the very fabric of civil society is being destroyed… we have no choice… the criminals must be stopped… and the only way to do that is to publicly expose, investigate, indict, prosecute, punish, and take back what is ours'.
In 2008, when I tuned out of the mainstream media and tuned into the independent media, I thought the messages from Michael Hudson ("they are organized criminals… this is what they're doing…") and Bill Black ("the criminals must be stopped… here's how we stopped the Savings & Loan criminals…) would resonate and become common knowledge. I quickly discovered that it didn't even resonate with close family and friends. Why???
I will send out this video… Michael Hudson at his best, speaking-wise. I don't expect to get any reaction… why?… very frustrated…
Amen. Once you start noticing, it becomes hard to stop. In looking hard for a silver lining to the current election storm clouds, public awareness of the MSM seems to have nudged a few toward slightly more objectivity, although I may just be wishing for that after media fatigue ;)
[Oct 29, 2016] Those economists who deny that unemployment can drive people into crime are idiot jerks.
Notable quotes:
"... In Huntsville Alabama, I was part of a group that visited prisoners in the county jail. I visited the women prisoners every Sat. There was a recession in Reagan's term, and Reagan didn't think the government should help the unemployed. Before the recession, there were usually only one or two women prisoners at a time. The most they had at one time was four. ..."
"... During the recession, the number of prisoners grew greatly. The number of women ballooned to at least a dozen. Because of the increase in the number of male prisoners, the women were all crowded into a single cell, with mattresses on the floor. Most of the women were in jail had children, and were in jail for passing bad checks. ..."
Oct 29, 2016 | economistsview.typepad.com
Patricia Shannon : October 29, 2016 at 12:47 PM
Those economists who deny that unemployment can drive people into crime are idiot jerks.
http://voxeu.org/article/relationship-between-job-displacement-and-crime
In Huntsville Alabama, I was part of a group that visited prisoners in the county jail. I visited the women prisoners every Sat. There was a recession in Reagan's term, and Reagan didn't think the government should help the unemployed. Before the recession, there were usually only one or two women prisoners at a time. The most they had at one time was four.
During the recession, the number of prisoners grew greatly. The number of women ballooned to at least a dozen. Because of the increase in the number of male prisoners, the women were all crowded into a single cell, with mattresses on the floor. Most of the women were in jail had children, and were in jail for passing bad checks.
When they were able to get jobs, they did not pass bad checks.
There was a national increase in crime at this time, and Reagan claimed that the high rate and long duration of unemployment did not cause an increase in crime.If you have ever been out of work so long that you were losing weight because you couldn't afford enough food, and were in danger of having to live in your car, you would know how wrong Reagan was. It would have to be much worse for parents. I guess if you are unemployed, you are expected to allow yourself and your children to starve to death, so as not to inconvenience those more fortunate.
This is one of the reasons that if I believed in such things, I would consider Reagan to be a manifestation of the anti-Christ.
[Oct 28, 2016] Inequality As Policy: Selective Trade Protectionism Favors Higher Earners
Oct 28, 2016 | economistsview.typepad.com
anne : October 28, 2016 at 08:44 AM , 2016 at 08:44 AM
http://cepr.net/publications/op-eds-columns/inequality-as-policy-selective-trade-protectionism-favors-higher-earnersJohnH -> anne... -1October 27, 2016
Inequality As Policy: Selective Trade Protectionism Favors Higher Earners
By Dean BakerGlobalization and technology are routinely cited as drivers of inequality over the last four decades. While the relative importance of these causes is disputed, both are often viewed as natural and inevitable products of the working of the economy, rather than as the outcomes of deliberate policy. In fact, both the course of globalization and the distribution of rewards from technological innovation are very much the result of policy. Insofar as they have led to greater inequality, this has been the result of conscious policy choices.
Starting with globalization, there was nothing pre-determined about a pattern of trade liberalization that put U.S. manufacturing workers in direct competition with their much lower paid counterparts in the developing world. Instead, that competition was the result of trade pacts written to make it as easy as possible for U.S. corporations to invest in the developing world to take advantage of lower labor costs, and then ship their products back to the United States. The predicted and actual result of this pattern of trade has been to lower wages for manufacturing workers and non-college educated workers more generally, as displaced manufacturing workers crowd into other sectors of the economy.
Instead of only putting manufacturing workers into competition with lower-paid workers in other countries, our trade deals could have been crafted to subject doctors, dentists, lawyers and other highly-paid professionals to international competition. As it stands, almost nothing has been done to remove the protectionist barriers that allow highly-educated professionals in the United States to earn far more than their counterparts in other wealthy countries.
This is clearest in the case of doctors. For the most part, it is impossible for foreign-trained physicians to practice in the United States unless they have completed a residency program in the United States. The number of residency slots, in turn, is strictly limited, as is the number of slots open for foreign medical students. While this is a quite blatantly protectionist restriction, it has persisted largely unquestioned through a long process of trade liberalization that has radically reduced or eliminated most of the barriers on trade in goods. The result is that doctors in the United States earn an average of more than $250,000 a year, more than twice as much as their counterparts in other wealthy countries. This costs the country roughly $100 billion a year in higher medical bills compared to a situation in which U.S. doctors received the same pay as doctors elsewhere. Economists, including trade economists, have largely chosen to ignore the barriers that sustain high professional pay at enormous economic cost.
In addition to the items subject to trade, the overall trade balance is also very much the result of policy choices. The textbook theory has capital flowing from rich countries to poor countries, which means that rich countries run trade surpluses with poor countries. While this accurately described the pattern of trade in the 1990s up until the East Asian financial crisis (a period in which the countries of the region enjoyed very rapid growth), in the last two decades developing countries taken as a whole have been running large trade surpluses with wealthy countries.
This implies large trade deficits in rich countries, especially the United States, which in turn has meant a further loss of manufacturing jobs with the resulting negative impact on wage inequality. However, there was nothing inevitable about the policy shifts associated with the bailout from the East Asian financial crisis that led the developing world to become a net exporter of capital.
The pattern of gains from technology has been even more directly determined by policy than is the case with gains from trade. There has been a considerable strengthening and lengthening of patent and copyright and related protections over the last four decades. The laws have been changed to extend patents to new areas such as life forms, business methods, and software. Copyright duration has been extended from 55 years to 95 years. Perhaps even more important, the laws have become much more friendly to holders of these property claims to tilt legal proceedings in their favor, with courts becoming more patent-friendly and penalties for violations becoming harsher. And, the United States has placed stronger intellectual property (IP) rules at center of every trade agreement negotiated in the last quarter century.
In this context, it would hardly be surprising if the development of "technology" was causing an upward redistribution of income. The people in a position to profit from stronger IP rules are almost exclusively the highly educated and those at the top end of the income distribution. It is almost definitional that stronger IP rules will result in an upward redistribution of income.
This upward redistribution could be justified if stronger IP rules led to more rapid productivity growth, thereby benefitting the economy as a whole. However, there is very little evidence to support that claim. Michele Boldrin and David Levine have done considerable research on this topic and generally found the opposite. My own work, using cross-country regressions with standard measures of patent strength, generally found a negative and often significant relationship between patent strength and productivity growth.
There is also a substantial amount of money at stake. In the case of prescription drugs alone, the United States is on path to spend more than $430 billion in 2016 for drugs that would likely cost one-tenth of this amount in the absence of patent and related protections. While we do need mechanisms for financing innovation and creative work, it is almost certainly the case that patent and copyright monopolies as currently structured are not the most efficient route...
Dean Baker has been on a roll!Money quote: "The structuring of trade and rules on IP are two important ways in which policy has been designed to redistribute income upward over the last four decades. There are many other ways in which the market has been structured to disadvantage those at the middle and bottom of the income distribution, perhaps most notably macroeconomic policies that result in high unemployment. While tax and transfer policies that reduce poverty and inequality may be desirable, we should also be aware of the ways in which policy has been designed to increase inequality. It is much easier to have an economic system that produces more equality rather than one that needlessly generates inequality, which we then try to address with redistributive policies."
http://www.nakedcapitalism.com/2016/10/inequality-as-policy-selective-trade-protectionism-favors-higher-earners.htmlNow if we could get economists to recognize that a monetary policy that prioritizes the 'wealth effect' for a decade is really trickle down, then perhaps we could get them to develop policies to mitigate trickle down aspects and direct monetary policy more towards the broader economy.
[Oct 27, 2016] In late 2007, before the recession started, the prime-age employment-to-population ratio in the U.S. was about the same as in other Group of Seven developed nations (which also include Canada, France, Germany, Italy, Japan and the U.K.). The U.S., however, experienced a much larger decline during the recession, and remains much farther from undoing the damage.
Oct 27, 2016 | economistsview.typepad.com
Peter K. : October 26, 2016 at 08:07 AM , In late 2007, before the recession started, the prime-age employment-to-population ratio in the U.S. was about the same as in other Group of Seven developed nations (which also include Canada, France, Germany, Italy, Japan and the U.K.). The U.S., however, experienced a much larger decline during the recession, and remains much farther from undoing the damage.
https://www.bloomberg.com/view/articles/2016-10-25/the-u-s-job-recovery-is-a-global-laggardKocherlakota on U.S. macro policy fail:
"In late 2007, before the recession started, the prime-age employment-to-population ratio in the U.S. was about the same as in other Group of Seven developed nations (which also include Canada, France, Germany, Italy, Japan and the U.K.). The U.S., however, experienced a much larger decline during the recession, and remains much farther from undoing the damage. As of June, the G-7 as a whole had recovered almost completely, while the U.S. was only 60 percent back from its lowest point:"
[Oct 25, 2016] The Problem with unemployed men in the USA
Oct 25, 2016 | economistsview.typepad.com
anne : October 25, 2016 at 05:09 AM
http://cepr.net/blogs/beat-the-press/the-problem-with-the-problem-with-menOctober 24, 2016
The Problem with the Problem with Men
We continue to see a steady drumbeat of news stories and opinion pieces about the problem of men, and especially less-educated men, in the modern economy. The pieces always start with the fact that large numbers of prime-age men (ages 25–54) have dropped out of the labor force. The latest entry is a New York Times column * by Susan Chira that highlighted recent research showing that a large percentage of men who are not in the labor force are in poor health and frequent users of pain medication.
... ... ...
Undoubtedly many are, although the extent to which these problems are the result of their unemployment or a cause will often not be clear. Nonetheless, steps that can improve public health will be a good thing, but the better place to look to solve the problem of unemployment is Washington.
** http://jaredbernsteinblog.com/more-on-the-non-mystery-of-non-work-germany-v-us/
-- Dean Baker
Reply Tuesday, anne -> anne... , October 25, 2016 at 05:10 AMhttp://cepr.net/blogs/beat-the-press/men-who-don-t-work-when-did-economists-stop-being-wrong-about-the-economyJohnH -> anne... , -1September 14, 2016
Men Who Don't Work: When Did Economists Stop Being Wrong About the Economy?
By Cherrie Bucknor and Dean Baker... ... ...
Since there is a drop in prime-age EPOPs for all groups, this would seem to suggest that the main problem is a lack of demand and not some new difficulty that some relatively narrow group of workers has in dealing with the labor market. Before going through these trends, it is worth making an additional point; this decline in EPOPs was not expected before it happened.
For example, the Congressional Budget Office (CBO) in 2001 projected that EPOPs would continue to rise from their 2000 peaks. It projected that the potential labor force would grow at an average annual rate of 1.1 percent over the next decade, implying that it would be 11.6 percent larger in 2010 than in 2000. This growth was driven in part by population growth, but also by the expectation that the trend of rising EPOPs for women would continue.
In fact, the labor force in 2010 was just 7.9 percent larger than in 2000. This 3.7 percentage point difference corresponds to a labor force that was 5 million smaller in 2010 than CBO had projected for that year in 2001. (It is worth noting that the CBO projections were not an outlier. CBO tries to ensure that its projections lie close to the middle of the pack for economic forecasters.)
If the argument that structural factors have led to a permanent lowering of prime-age EPOPs is right, as opposed to just weakness in demand reducing employment, then the 2001 projections for the growth of the potential labor force were clearly wrong. Of course official projections have often proven wrong, but this should give us caution about our ability to accurately assess the structural determinants of employment rates. After all, it's not obvious that our knowledge of the economy is very much better in 2016 than it was in 2001.
The figure below shows the employment to population ratios for prime-age workers by gender and education levels.
[Figure]
The ratios for 2000 are set at 100 to allow for a clear view of the drop off from this peak. As noted, all groups see some drop from this peak, with the smallest drop for college-educated women, followed by college-educated men. The drop for prime-age workers with some college is considerably sharper, with the drop for women being somewhat larger than the drop for men. The drop for workers with a high school degree or less is even greater, but here also the drop is larger for women than for men. The decline in EPOPs for prime-age men with a high school degree or less is 7.8 percent, while the drop for women is 14.0 percent. Given the much sharper drop in EPOPs for less-educated women, it is difficult to understand why the policy debate has focused on men leaving the labor force.
The more fundamental issue is that it is difficult to explain a drop in EPOPS for all workers, regardless of education levels, as being a problem of workers lacking skills or a desire to work. This looks pretty clearly like a story of weak demand. In other words, the problem is not them; it is us, where "us" is the people who make economic policy.
* https://www.bloomberg.com/view/articles/2016-09-12/debating-government-s-role-in-boosting-growth
________________________________
[1] This discussion focuses on EPOPs rather than labor force participation rates (LFPR) because the latter has likely been affected by the tightening of rules for getting unemployment insurance. It is widely recognized that many unemployed workers drop out of the labor force when they are no longer eligible for unemployment benefits. With many states having instituted stricter rules on benefits over this period, we would have expected a decline in LFPR even with no changes in the workforce or the economy.
Economist should also be looking at labor participation rates in other industrial growth which are experiencing the same economic stagnation as the US. In the UK and Japan EPOPs are near record highs, while US rates are near 40 year lows. Why such a disparity?My hunch is that economists are trying to find ways to explain away the low EPOP rates in the US, because the crux of the problem goes back to investor friendly/worker hostile policies that they have advocated for years--trade policy and trickle down monetary policy.
[Oct 22, 2016] Capitalism and any other form of social organization based on profit seeking, in principle, is unsustainable within a closed system, such as planet Earth, without periodic destruction of its material wealth and human population
Notable quotes:
"... Social mobility is the kind of equality professional and managerial elites support. ..."
"... High rates of social mobility are not inconsistent with systems of stratification that concentrate power and privilege in a ruling elite. Certainly the circulation of elites strengthens the idea of hierarchy furnishing it with fresh talent and legitimating their ascendancy as a function of merit rather than birth. ..."
"... Look at the root of the problem: capitalism is a profit seeking competition based social organization. This is not meant as a judgement, but it can be demonstrated that capitalism and any other form of social organization based on profit seeking, in principle, is unsustainable within a closed system, such as planet Earth, without periodic destruction of its material wealth and human population. ..."
Oct 22, 2016 | www.nakedcapitalism.com
Jim October 21, 2016 at 2:13 pm PhilU October 21, 2016 at 3:34 pmSocial mobility is the kind of equality professional and managerial elites support. Our present society seems quite mobile and highly stratified.
Historically social mobility became an interpretation of opportunity only after more hopeful interpretations of opportunity (yeoman idea– your own plot of land– rather than Horatio Alger) began to fade out of the American experience (sometime after 1890 when social stratification could no longer be ignored).
High rates of social mobility are not inconsistent with systems of stratification that concentrate power and privilege in a ruling elite. Certainly the circulation of elites strengthens the idea of hierarchy furnishing it with fresh talent and legitimating their ascendancy as a function of merit rather than birth.
Social policy that would support a wider distribution of land would give a significant support to a parents' ability to bequeth property to their children–as seen, for example, in the Homstead Act.
Think tradition of Jefferson, Lincoln and Orestes Brownson.
Nekto October 21, 2016 at 6:45 pmI just listened to this podcast yesterday. It's Glenn Loury not William Darity, Jr. unless they had practically the same life. But there are at least a dozen lines that are verbatim from the podcast. http://loveandradio.org/2016/10/the-enemy-within/
Look at the root of the problem: capitalism is a profit seeking competition based social organization. This is not meant as a judgement, but it can be demonstrated that capitalism and any other form of social organization based on profit seeking, in principle, is unsustainable within a closed system, such as planet Earth, without periodic destruction of its material wealth and human population. And this destruction becomes increasingly severe and threatening to the existence of the entire system as this social organization, such as capitalism, evolves.
As far as the fundamental premise 'that everyone can prosper in the individual race for wealth given equal starting opportunities are provided' is not questioned all these studies calling for creation of "truly equal opportunities" will only exacerbate the problem, which is being practically done (explicitly or implicitly, knowingly or unknowingly) by many famous liberal economists, including Joseph Stiglitz, Robert Reich, Bill Black, Michael Hudson, etc., who are trying to find the ways to fix and improve capitalism without touching the fundamentals.
This is not to say that social economic reforms that practically improve the lives of millions poor people are wrong or useless. Fighting cancer can be helpful, but only until and unless it kills the host. So, all these studies, policies, proposals, etc. can be helpful and productive only if clear awareness of the nature of the disease (capitalism) they are trying to treat exists.
[Oct 20, 2016] For-Profit Colleges Stay Quietly on Offense
Oct 20, 2016 | www.truth-out.org
For-profit colleges may be playing defense in the public perception, but they have not given up their offensive game, if their recent contributions to Congress are any indication.For-profit education colleges and trade groups donated more than $1.4 million to federal candidates, parties and elected officials during the first eight months of 2016, according to the most recent tally by the Center for Responsive Politics. Lobbyists for the sector spent an additional $2.6 million. (Nonprofit colleges are not permitted to donate to candidates.)
The top recipients in Congress are, or were, running for election, and all but one of the incumbents have a leadership position on or are members of one of the powerful committees that help determine the flow of federal money to for-profit colleges. The top three recipients can count for-profit sector groups among their top campaign contributors.
For-profit colleges and advocates gave $657,531 to 139 incumbents and candidates running for the House of Representatives. Click HERE for list of House members and candidates (by amount of contribution). There were 54 Senators and candidates for the Senate who received contributions, for a total of $378,758 between January and August of this year. Click HERE for list of Senators and candidates (by amount of contribution.)
More than a third of the money donated to sitting Senators has gone to members of the Armed Services committee and most of that went to its powerful chairman, John McCain (R-AZ). Last year the Pentagon banned the biggest for-profit college, the University of Phoenix, from recruiting on military bases and receiving federal tuition, citing deceptive practices. But McCain lobbied loud and hard and succeeded in reversing the ban in January.
Republicans running for Congress scooped up 72 percent of contributions from the for-profit education sector during the first eight months of this year. That's a change from 2010, when they only received 39 percent of contributions. The Presidential race this year, however, has favored the Democrat, Hillary Clinton.
Some of the biggest donors so far this year are for-profit institutions that have drawn scrutiny from federal agencies for high student debt levels and low graduation rates. Bridgepoint, at the top of the list, is under investigation by the Justice Department; it also must pay millions of dollars in fines to resolve the Consumer Financial Protection Bureau's accusation that its private student loan advertisements misled students. Corinthian Colleges filed for bankruptcy last year and this year was forced to pay massive fines for defrauding students.
Meredith Kolodner is a staff writer at The Hechinger Report. She previously covered schools for the New York Daily News and was an editor at InsideSchools.org and for The Investigative Fund at the Nation Institute. She's also covered housing, schools, and local government for the Press of Atlantic City and The Chief-Leader newspaper and her work has appeared in the New York Times and the American Prospect. Kolodner is a graduate of Brown University and Columbia University's Graduate School of Journalism and an active New York City public school parent. She is grateful to her 11th grade English teacher who persistently gave her Cs on essays until she finally stopped burying the lead.
Related Stories
- For Profit or For Students? By Anastasia Wilson, Mark Paul, The Baseline Scenario
- Op-Ed For-Profit Education: Milking Students and the Taxpayers for Corporate Profits By Charles M Smith, Truthout
- Solutions For-Profit College Reform: How Democratic Power Lobbyists Helped Water It Down By Dina Rasor, Charles M Smith, Truthout | Solutions
[Oct 20, 2016] The real driver of inequality, then, is not an individuals level of education and productivity, but the resources that parents and grandparents are able to transmit.
Notable quotes:
"... In ['William Darity, Jr.'s] his view, the capacity of parents and grandparents to invest in their children is contingent on their wealth position" [ iNet ]. ..."
"... "What drives white-collar criminals? Often, these are successful people who possess great wealth, have impeccable education, and hold much influence within their respective industries, yet they risk it all by breaking the law" [ ProMarket ]. "Incentives specifically play a big role in fostering white-collar crime, according to Soltes, especially when financial managers are pressured to succeed and have to make rapid decisions one after the other, their potential victims far from view. 'I was doing exactly what I was incentivized to do. We wouldn't have gone through all this trouble if we just wanted to cheat,' says Enron CFO Andrew Fastow in the book.'" ..."
Oct 20, 2016 | www.nakedcapitalism.com
"In ['William Darity, Jr.'s] his view, the capacity of parents and grandparents to invest in their children is contingent on their wealth position" [ iNet ].
"The real driver of inequality, then, is not an individual's level of education and productivity, but the resources that parents and grandparents are able to transmit." Hence: "[S]tratification economics." Might go down easier than "class warfare," I dunno.
"What drives white-collar criminals? Often, these are successful people who possess great wealth, have impeccable education, and hold much influence within their respective industries, yet they risk it all by breaking the law" [ ProMarket ]. "Incentives specifically play a big role in fostering white-collar crime, according to Soltes, especially when financial managers are pressured to succeed and have to make rapid decisions one after the other, their potential victims far from view. 'I was doing exactly what I was incentivized to do. We wouldn't have gone through all this trouble if we just wanted to cheat,' says Enron CFO Andrew Fastow in the book.'"
"Mike Konczal has an interesting piece on how the progressives are unlikely to win over Trump's base of white, male, working class voters – even if they take their concerns to heart and propose policies that will help them… Konczal might well be right, but I want to entertain the possibility that he is wrong" [ Dani Rodrik ]. I will say that Konczal knows how to generate buzz. More:
"Konczal might well be right, but I want to entertain the possibility that he is wrong…. If left-liberals take for granted that the white middle class is essentially racist, hate the federal government, oppose progressive taxation, don't think big banks and dark money are a problem … and so on, then indeed many of the remedies that progressives have to offer will fail to resonate and there is little that can be done. But why should we assume that these are the givens of political life?
A large literature in social psychology and political economy suggests that identities are malleable as are voters' perceptions of how the world works and therefore which policies serve their interests. A large part of the right's success derives from their having convinced lower and middle class voters that the government is corrupt and inept. Can't progressives alter that perception?
Note that Rodrik has exactly the same conflation of "progressive," "left," and "liberal" that Konczal does. Je repete : Liberals (and conservatives) want to divide the working class, and they use their distinctive flavors of identity politics to do so. The left wishes to unite them. And both liberals and conservatives will deny that identity is malleable (Clinton's "irredeemables") not only because to admit that would smash any number of rice bowls, but because it would smash their social functions as factions. What should give the left hope in Rodrik's rejoinder - hope that Konczal is, quite naturally, attempting to strangle in its cradle - is the notion that identity is malleable; Occupy, with the 99% concept, proved that. Thomas Frank, with his 10%, takes the same approach. Of course, 99 and 10 don't add to 100, so there's some analytical work to be done, but the way forward beyond identity politics is clear.
[Oct 13, 2016] CUNY, All Too CUNY Or, what happens when higher-ed hoodlums arent brought to heel
Notable quotes:
"... New York Times ..."
Oct 13, 2016 | crookedtimber.org
on October 10, 2016 In August, I blogged about a New York Times story on a corruption investigation of City College President Lisa Coico. On Friday, the Times reported that Coico abruptly resigned. Today, the Times has a long piece on the corruption and potential criminality that led to Coico's resignation (upon threat of firing).
On the one hand, the piece paints a portrait of a college president so fantastically corrupt, it's almost comical.
Ms. Coico, who had an annual salary of $400,000 at that point [2011], was using the college's main fund-raising vehicle, the 21st Century Foundation, to pay tens of thousands of dollars for housekeeping, furniture, seasonal fruits and organic maple-glazed nuts, among other items .By August 2011, according to an email between two school officials, the college had begun to itemize more than $155,000 of her spending in three categories - "college," "personal" and "iffy."On the other hand, it's just one blood-boiling outrage after another, where the criminality flows, like lava, from the mountain of largesse that Coico was legally allowed in the first place.
The Times also questioned whether Ms. Coico had repaid a $20,000 security deposit for a rental home , or kept the money for herself .Ms. Coico had a housing allowance of $5,000 per month when she was hired, which was increased to $7,500 per month in July 2010. We have adjuncts at CUNY who can't pay their rent. Mostly because the pay is so low, but sometimes, as occurred at Brooklyn College last month, because CUNY can't be bothered to get its act together so that people are paid on time. Yet a college president, who's already earning a $400,000 salary (and remember that was in 2011; God knows what she was raking in upon her resignation) plus a housing allowance of $7500, gets additional help to put down a $20,000 security deposit on a rental home in Westchester?On top of it all, the article makes plain that CUNY officials have been nervous about and watchful of Coico's spending since her first year at the college:
Behind the scenes, there were also questions about her personal spending going back to the middle of 2011, roughly a year after her appointment .Anxious about the amount she was spending, especially given the fact that many of City College's students come from low-income families and struggle to pay even its modest tuition, some began "questioning its appropriateness, since the president had a substantial housing allowance meant for such things," said one longtime official who spoke on the condition of anonymity to avoid being entangled in the investigation.
She was later ordered by Frederick P. Schaffer, CUNY 's general counsel, to repay the college $51,000, or roughly one-third of the expenses in question, because she had not received prior approval for moving and other expenses. She fulfilled that obligation by January 2016.
Ms. Coico was also informed that any furniture bought with foundation funds - including $50,000 worth for a rental home in Larchmont, N.Y. - belonged to City College. Moreover, she was asked to return a $20,000 security deposit at the end of her lease in Larchmont.
Ms. Coico and her husband bought another home in Westchester County in April 2013, property records show. When asked if she repaid the $20,000 deposit, the college declined to comment.
But this summer, The Times took a closer look at her expenses, and reported that CUNY 's Research Foundation , which manages research funds for the entire system, had ultimately covered Ms. Coico's personal expenses from her early years as president. Using Research Foundation funds that way raised concerns because they could include money from federal grants, which are typically earmarked for research-related expenses, such as staff and equipment, and have strict guidelines about how they are used.
Two weeks after the Times report was published, a subpoena was issued by the office of Robert L. Capers, the United States attorney for the Eastern District of New York.
The memo in question is just one paragraph long and is bureaucratic in nature.
Addressed to an employee at the provost's office named Luisa Hassan, and dated Sept. 15, 2011, it begins, "As we have discussed," and is attributed to Ron Woodford, a manager at the college's 21st Century Foundation. It goes on to say that some of Ms. Coico's expenses "were inadvertently paid" by that foundation, when they should have been paid by CUNY 's Research Foundation. The memo then asks Ms. Hassan to process an invoice for $155,176 to "rectify the funding source," for what it calls "start-up expenses associated with the appointment of the new president."
Were the memo proved to be backdated or manufactured, the responsible parties could be open to charges such as obstruction of justice, legal experts said.
Given all of this, why has it taken CUNY so long-to the point of a federal investigation being launched -to demand Coico's resignation?
The whole story, in my experience, is CUNY , all too CUNY . Not just the opéra bouffe of corruption but also the creaking machinery of self-correction.
Here you have a garden-variety miscreant, thieving one piece of the pie after another from an institution that has so little to begin with. Even the things Coico did that weren't criminal should have been enough to get her fired. On ethical grounds alone.
But what did CUNY do? Lots of whispering emails, lots of back and forth between cowed and ineffective administrators, culminating each time, it seems, with a polite-and sometimes unheeded-request to Coico that she correct the problem. As if it were all a simple misunderstanding or oversight.
Indeed, in the one instance when CUNY seemed more determined to take action, an extensive internal investigation of just one of Coico's questionable moves led to her being exonerated by the institution. Whether she was in that instance correct in her actions, surely her track record might have raised enough red flags to lead to a much wider investigation rather than a declaration, with much fanfare, of her innocence.
Not once, it seems, until the very last minute-the Times reported on Friday that it was a smoking-gun email from the newspaper that led to the abrupt resignation of Coico, leaving City College with no replacement, save the acting provost, who was herself replacing someone else; all suggesting that Coico's being pushed out was unplanned, unrehearsed, and unprepared for-did CUNY execute a plan to get rid of Coico. From what I can tell (and in my experience, as I said, this is how CUNY often operates), the institution allowed this higher-ed hoodlum to happily continue in her position, secure in the knowledge that if she ever did anything too egregious or got caught, that she'd get a mild entreaty to fix the error.
If there is one potential bit of good news in this story, it's this:
And over the weekend, speculation intensified among staff and faculty members as to whether people close to the president would also be implicated, and whether the federal investigation would spread to other parts of CUNY , the largest public urban university in the country.
One can only hope that that speculation turns out to be true.
Dr. Hilarius 10.10.16 at 9:05 pm
A good example of the failure of university president as CEO model of governance. Model comes complete with ineffectual trustees and administrators.Brett 10.10.16 at 9:34 pmAren't there people above her who are supposed to be watch-dogs on this as well? Did they just not care that she was stealing from the college, because they'd rather not go through the hassle of hiring another college president? Was it okay as long as she was compliant and enthusiastic in making budget cuts?Tabasco 10.10.16 at 10:54 pmIt seems to be a failure on so many levels: a hiring failure (CEOs who lie, cheat and steal almost always did so in previous jobs); a failure of auditing and accountability systems; a failure of governance; and most of all, a failure of culture. Unless these are fixed, it will happen again.PJW 10.11.16 at 1:24 amHorrible.William Timberman 10.11.16 at 3:05 amIowa State's president has been under fire:
http://www.iowastatedaily.com/news/politics_and_administration/campus/article_09652364-8b0a-11e6-ac12-5741764bf660.htmlFrom the other coast: Robert Huttenback. Thirty years ago, this was, but having witnessed the whole mess from far too close up for comfort, I suppose I'm not all that surprised at the detailed similarities with the Coico case you're reporting on here. The Wikipedia entry gives only the gist, but the details in all their sleaziness are still available elsewhere on the Web for anyone who has the stomach to wade through them. To quote from our swine of the hour, If you're a star, they let you do it. The depressing thing is that we don't seem to have any institutions left where this casual breach of trust isn't routine.kidneystones 10.11.16 at 3:39 am"That's what is done by tin-pot dictators spanning the globe from North Korea to Zimbabwe."kidneystones 10.11.16 at 3:42 amExcellent post, Corey. Yes, I'm aware that the quote is from Beauchamp, but I think it fits just as well, if not better here.
I'm an adjunct with bona fides and a publication history to receive research funding from universities, just not quite often enough. I reference the tin-pot dictators for two reasons.
Tabasco and Brett get to the nub. Ms. Coico and her husband are earning far more than almost all faculty and certainly far more than I. There's an enormous gulf separating Ms.Coico and the adjuncts who can't actually rely on being paid their pennies on time. Suffice to say that Ms. Coico is likely blissfully aware of that gulf and our problems, and much more painfully aware on the enormous gulf separating her and her husband from the world-class grifters she aspires to join, which I suggest is her principal preoccupation.
As the CEO, a large part of her job is groveling for cash before the truly rich. This has to wear on her. And as we've learned, only partisan imbeciles believe that candidate X is the only wealthy person paying well to ensure he/she pays the absolute minimum in taxes, and who (occasionally) moves into the 'grey' areas of compliance. See senior civil servants at both the state and national level.
There are, like it or not, two sets of rules in America, whether that makes America a tin-pot dictatorship or no. If one happens to be poor and a minority one can expect to face the full brunt of the law for even the smallest infraction. And that's if you're not beaten, or shot by 'accident' along the way. If you're wealthy and white, you can do whatever you like until and after, in many cases, you get caught.
The reason, I suggest, that those charged with supervising Ms. Coico did not act earlier is that they did not wish to attract any unwanted legal scrutiny into their own practices, those of their peers, and especially of the donor class who fork over part of the class.
It's their world, we just live in it.
Part of class? Yes, why not that too.Sebastian H 10.11.16 at 5:01 amWilliam Timberman puts his finger right into the wound.
The whole thing is crazy, but I can't get past the $20,000 security deposit for a rental home.Louis Proyect 10.11.16 at 11:19 amWhat kind of a house is that?
Interesting that she was hired to boost the science department based on her own scientific background. Remind you of another college president out in Illinois?Alex SL 10.11.16 at 5:35 pmAs a non-native speaker of English, I am wondering not for the first time about how the term corrupt is used in the English world. Is it not correct that corruption means taking money (or some other form of payment) in exchange for doing somebody an undeserved favour, e.g. a professor accepting money to pass a student who should really have been failed? I would have thought that what is described here was embezzlement instead?steve 10.11.16 at 7:12 pmSorry if this is not the most productive contribution, but I am wondering.
Corruption is a general term for premeditated unethical actions. Embezzlement would be a specific criminal change.J-D 10.11.16 at 8:58 pmI think it's common for 'corruption' to be used to refer to the misuse of official authority for private benefit; so if somebody has official authority to expend funds for stipulated purposes, and misuses that authority to expend some of those funds for a private benefit unconnected with those stipulated purposes, that could be described as corrupt conduct.CCNY Drudge 10.12.16 at 12:50 amWhat you don't mention but is how despicable it is that a high level administrator tried to set up two low level employees with no decision authority with a faked document. Yes, CUNY administrators should be held accountable for their non-action and sticking their heads in the sand, but don't exonerate the CCNY faculty who closed their eyes for the ethical problems and remained silent, just because of their comfortable teaching hours under this president or other perks, or just because they didn't want to rock the boat, just grumble at the water cooler. They had the academic freedom and union protection, and the majority of them did nothing. They were like the Republican Party facing Trump.Karl Kolchack 10.12.16 at 1:01 amA professional colleague of mine was prosecuted and fired for falsifying a relocation voucher for a grand total of around $2200. Of course, this was way back in 1991, when such garbage was far less tolerated that it seems to be these days.Alex SL 10.12.16 at 8:48 amThanks.LaRoi Lawton 10.12.16 at 2:12 pmThis demonstrates on so many levels how administrators within CUNY are so poorly managed to the point where they create their own "Game of Thrones." It is no wonder why the current Governor of New York has a negative opinion of CUNY and wants a deeper look at our administrative levels across CUNY. You can bet your last dollar that what the former CCNY President has done, has also infected many of the departments within CCNY and across CUNY. This was no anomaly. The seeds were planted ions ago and watered by the City and State at the expense of our students CUNY was meant to help.Library Love 10.12.16 at 4:37 pmThis sickens me to no end. I'm a librarian at CCNY and I have taken money out of my own pocket for office supplies etc. for my office and for students. This is just disgusting. I knew she was up to something but I had no idea it was this bad.
[Oct 13, 2016] "The Skills Delusion"
Oct 13, 2016 | www.project-syndicate.org
[Adair Turner, Project Syndicate ].
"Everybody agrees that better education and improved skills, for as many people as possible, is crucial to increasing productivity and living standards and to tackling rising inequality. But what if everybody is wrong?… As for inequality, we may need to offset it through overt redistribution, with higher minimum wages or income support unrelated to people's price in the job market, and through generous provision of high-quality public goods." Of course, Clinton has already foreclosed this possibility; after all, some of the redistribution would go to "irredeemables."
[Oct 08, 2016] Mankiw should be the lead negotiator for the administration, explaining to the dining hall workers why they're paid what they're worth, and no more.
Oct 08, 2016 | www.nakedcapitalism.com
allan October 7, 2016 at 3:17 pm cnchal October 7, 2016 at 6:20 pm"Harvard, In Theory and Practice"
Mankiw should be the lead negotiator for the administration, explaining to the dining hall workers why they're paid what they're worth, and no more.
Maybe he could throw in e-access codes to his textbook as a sweetener.NY Union Guy October 7, 2016 at 4:16 pmWhen the great crime of this millennium happened and Jabba the Hut was in charge of Harvaaaaard, Jabba was getting paid millions to lose billions. Too bad he wasn't paid tens of millions to increase productivty and lose tens of billions, wiping the fountainhead of corruption out.
jypsi October 7, 2016 at 4:49 pmRE: Harvard, In Theory and Practice
This is absolutely deplorable! These folks had to strike for 35K/yr at rich-ass Harvard? Unreal.
Why is it that White Collar types have such contempt for Blue Collar people?
I'm sick and tired of being looked down upon, made fun of, and laughed at because I'm not an office drone. I can't stand how these jokers refer to themselves as "professionals" all the damned time too, as if the rest of us are a bunch of amateurs, blathering all the goddamned time about free market this, free market that, this goodthink cause, that goodthink cause, union bad, gov't bad, private sector good, yada yada.
Katniss Everdeen October 7, 2016 at 6:04 pm> Why is it that White Collar types have such contempt for Blue Collar people?
It's an inferiority complex. At some level, every office drone knows that they are completely useless.
polecat October 7, 2016 at 6:30 pmAbsolutely–an inferiority complex. It's why so many white collar types drive pick-up trucks. Makes them look like they know how to do something useful.
Kurt Sperry October 7, 2016 at 7:27 pm…the tell is there's nary a scratch on the bed liner !
cnchal October 7, 2016 at 6:58 pmYes, the perfectly unscratched pick-up truck more than a year old. It's such an epic fail because it's "girly" and they were going instead for "manly". Either is, no doubt, a fine thing, but not when epically fail.
polecat October 7, 2016 at 8:56 pmLots of times it's because they have motorized entertainment that only a truck can haul.
cnchal October 7, 2016 at 9:51 pmwell ..it's 'entertainment' until they break something …. like their body !!
MUST GO FASTER ……
Soon the elite will have the race track option for their supercars, an AV version of track lapping where they strap themselves into the driver's seat and let the car scare the crap out of them.
[Oct 07, 2016] Facing up to income inequality by Jeffrey D. Sachs
Notable quotes:
"... yes rates were higher - but the deductions were huge - if you were wealthy - you could easily buy tax shelters that would offset your income. ..."
"... Pardon me, but this good citizen, Nossir, is shoveling a load of typical BS. We must suffer inequality in good cheer, he or she posits, and tens of millions of us must struggle to put food on our children's tables, or else the all powerful "Investors" will be angry with us and stop being so kind to us. ..."
"... The "Investors" who rule over us, are parasites who are sucking the blood out of our nation, but to their way of thinking, they are kind and magnanimous as they deign to exploit us. ..."
"... look it up nossir. Capital gains tax are not north of 50% even in Denmark Most gains there are taxed at 27%. It's earned income taxes combined with VAT that add up to around 55% in Denmark. ..."
"... For those tax rates they get free and/or subsidized education through university, free health care for all, an infrastructure that puts ours to shame, a vastly superior mass transit system throughout the nation, guaranteed maternity/paternity leave of up to 2 years with income provided by government; hugely subsidized childcare for those too young for kindergarten, etc. etc. ..."
"... Median household income is no indicator of prosperity. If adult children can't make enough money to live apart from their parents, even if they take a minimum wage job the median household income goes up. Per capita income is a much more truthful indicator of a country's prosperity. Obama's (and Clinton's) economic policies hurt the middle class; why do you think "income inequality" has gotten worse in the past eight years - and why Hillary won't release the texts of her Wall Street speeches? ..."
Oct 02, 2016 | The Boston Globe
The Census BurEAU recently announced a heartening 5 percent gain in the median household income between 2014 and 2015, the largest one-year gain on record. Yet a look at the longer-term trends offers a sobering perspective. The jump in household income merely helps to make up for lost ground; the median earnings in 2015 were actually lower than back in 1999 - 16 years ago.
While household median incomes have stagnated since the late 1990s, the inflation-adjusted earnings of poorer households have stagnated for even longer, roughly 40 years. Meanwhile, households at or near the top of the income distribution have enjoyed sizeable increases of living standards. The result is a stark widening of the gap between rich and poor households.
There is perhaps no issue in America more contentious than income inequality. Everybody has a theory as to why the gap between rich and poor has widened and what should be done - if anything - to close it. A full explanation should help us understand why the United States stands out for having an especially high and rising inequality of income.
There are three main factors at play: technology, trade, and politics. Technological innovations have raised the demand for highly trained workers, thereby pushing up the incomes of college-educated workers relative to high-school-educated workers. Global trade has exposed the wages of industrial workers to tough international competition from workers at much lower pay scales. And our federal politics has tended, during the past 35 years, to weaken the political role of the working class, diminish union bargaining power, and cap or cut the government benefits received by working-class families.
Consider technology. Throughout modern history, ingenious machines have been invented to replace heavy physical labor. This has been hugely beneficial: Most (though not all) American workers have been lucky to escape the hard toil, drudgery, dangers, and diseases of heavy farm work, mining, and heavy industry. Farm jobs have been lost, but with some exceptions, their backbreaking drudgery has been transformed into office jobs. Farm workers and miners combined now account for less than 1 percent of the labor force.
Yet the office jobs required more skills than the farm jobs that disappeared. The new office jobs needed a high school education, and, more recently, a college degree. So who benefited? Middle-class and upper-class kids fortunate enough to receive the education and skills for the new office jobs. And who lost? Mostly poorer kids who couldn't afford the education to meet the rising demands for skilled work.
Now the race between education and technology has again heated up. The machines are getting smarter and better faster than ever before - indeed, faster than countless households can help their kids to stay in the job market. Sure, there are still good jobs available, as long as you've graduated with a degree in computer science from MIT, or at least a nod in that direction.
Globalization is closely related to technology and, indeed, is made possible by it. It has a similar effect, of squeezing incomes of lower-skilled workers. Not only are the assembly-line robots competing for American jobs; so too are the lower-waged workers half a world away from the United States. American workers in so-called "traded-goods" sectors, meaning the sectors in direct competition with imports, have therefore faced an additional whammy of intense downward pressure on wages.
For a long time, economists resisted the public's concern about trade depressing wages of lower-skilled workers. Twenty-two years ago I coauthored a paper arguing that rising trade with China and other low-wage countries was squeezing the earnings of America's lower-skilled workers. The paper was met with skepticism. A generation later, the economics profession has mostly come around to recognize that globalization is a culprit in the rise of income inequality. This doesn't mean that global trade should be ended, since trade does indeed expand the overall economy. It does, however, suggest that open trade should be accompanied by policies to improve the lot of lower-wage, lower-skilled workers, especially those directly hit by global trade but also those indirectly affected.
MANY ANALYSES OF rising income inequality stop at this point, emphasizing the twin roles of technology and trade, and perhaps debating their relative importance. Yet the third part of the story - the role of politics - is perhaps the most vital of all. Politics shows up in two ways. First, politics helps to determine the bargaining power of workers versus corporations: how the overall pie is divided between capital and labor. Second, politics determines whether the federal budget is used to spread the benefits of a rising economy to the workers and households left behind.
Unfortunately, US politics has tended to put the government's muscle on behalf of big business and against the working class. Remember the Reagan revolution: tax cuts for the rich and the companies, and union-busting for the workers? Remember the Clinton program to "end welfare as we know it," a program that pushed poor and working-class moms into long-distance commuting for desperately low wages, while their kids were often left back in dangerous and squalid conditions? Remember the case of the federal minimum wage, which has been kept so low for so long by Congress that its inflation-adjusted value peaked in 1968?
There is no deep mystery as to why federal politics has turned its back on the poor and working class. The political system has become "pay to play," with federal election cycles now costing up to $10 billion, largely financed by the well-heeled class in the Hamptons and the C-suites of Wall Street and Big Oil, certainly not the little guy on unemployment benefits. As the insightful political scientist Martin Gilens has persuasively shown, when it comes to federal public policy, only the views of the rich actually have sway in Washington.
So in the end, the inequality of income in the United States is high and rising while in other countries facing the same technological and trade forces, the inequality remains lower, and the rise in inequality has tended to be less stark. What explains the difference in outcomes? In the other countries, democratic politics offers voice and representation to average voters rather than to the rich. Votes and voters matter more than dollars.
To delve more deeply into the comparison between the United States and other countries, it is useful to measure the inequality of income in each country in two different ways. The first way measures the inequality of "market incomes" of households, that is, the income of households measured before taxes and government benefits are taken into account. The second measures the inequality of "disposable income," taking into account the taxes paid and transfers received by the household.
The difference between the two measures shows the extent of income redistribution achieved through government taxation and spending. In all of the high-income countries, the inequality of market income is greater than the inequality of disposable income. The taxes paid by the relatively rich and the transfers made to the relatively poor help to offset some of the inequality of the marketplace.
THE ACCOMPANYING CHART offers just this comparison for the high-income countries. For each country, two measures of inequality based on the "Gini coefficient" are calculated. The Gini coefficient is a measure of income inequality that varies between 0 (full-income equality across households) and 1 (full-income inequality, in which one household has all of the income). Countries as a whole tend to have a Gini coefficient of disposable income somewhere between 0.25 (low inequality) and 0.60 (very high inequality).
In the figure, we see the two values of the Gini coefficient for each country: a higher value (more inequality) based on market income and a lower value (less inequality) based on disposable income (that is, after taxes and transfers). We can see that in every country, the tax-and-transfer system shifts at least some income from the rich to the poor, thereby pushing down the Gini coefficient. Yet the amount of net redistribution is very different in different countries, and is especially low in the United States.
Compare, for example, the United States and Denmark. In the United States, the Gini coefficient on market income is a very high 0.51, and on disposable income, 0.40, still quite high. In Denmark, by comparison, the Gini coefficient on market income is a bit lower than the United States, at 0.43. Yet Denmark's Gini coefficient on disposable income is far lower, only 0.25. America's tax-and-transfer system reduces the Gini coefficient by only 0.11. Denmark's tax-and-transfer system reduces the Gini coefficient by 0.18, half-again as high as in the United States.
How does Denmark end up with so much lower inequality of disposable income from its budget policies? Denmark taxes more heavily than the United States and uses the greater tax revenue to provide free health care, child care, sick leave, maternity and paternity leave, guaranteed vacations, free university tuition, early childhood programs, and much more. Denmark taxes a hefty 51 percent of national income and provides a robust range of high-quality public services. The United States taxes a far lower 31 percent and offers a rickety social safety net. In the United States, people are left to sink or swim. Many sink.
So, many Americans would suspect, Denmark is miserable and being crushed by taxes, right? Well, not so right. Denmark actually comes out number 1 in the world happiness rankings, while the United States comes in 13th. Denmark's life expectancy is also higher, its poverty lower, and its citizens' trust in government and in each other vastly higher than the equivalent trust in the United States.
SO HEREIN LIES a key lesson for the United States. America's inequality of disposable income is the highest among the rich countries. America is paying a heavy price in lost well-being for its high and rising inequality of income, and for its failure to shift more benefits to the poor and working class.
We have become a country of huge distrust of government and of each other; we have become a country with a huge underclass of people who can't afford their prescription drugs, tuition payments, or rents or mortgage payments. Despite a roughly threefold increase in national income per person over the past 50 years, Americans report to survey takers no higher level of happiness than they did back in 1960. The fraying of America's social ties, the increased loneliness and distrust, eats away at the American dream and the American spirit. It's even contributing to a rise in the death rates among middle-aged, white, non-Hispanic Americans, a shocking recent reversal of very long-term trends of rising longevity.
The current trends will tend to get even worse unless and until American politics changes direction. As I will describe in a later column, the coming generation of yet smarter machines and robots will claim additional jobs among the lower-skilled workers and those performing rote activities. Wages will be pushed lower except for those with higher training and skills. Capital owners (who will own the robots and the software systems to operate them) will reap large profits while many young people will be unable to find gainful employment. The advance in technology could thereby contribute to a further downward spiral in social cohesion.
That is, unless we decide to do things differently. Twenty-eight countries in the Organization for Economic Cooperation and Development have lower inequality of disposable income than the United States, even though these countries share the same technologies and compete in the same global marketplace as the United States. These income comparisons underscore that America's high inequality is a choice, not an irreversible law of the modern world economy.
Jeffrey D. Sachs is University Professor and Director of the Center for Sustainable Development at Columbia University, and author of "The Age of Sustainable Development."
RZwarich 10/03/16 07:08 AM
RZwarich 10/03/16 07:21 AMThe "Gini coefficient" is one of the worst, one of the least understandable, measures of inequality I've ever seen. I'm sure that it is a useful and scientifically accurate tool to economists who are trained in math and statistics, but to average people, these numbers are just so much 'mumbo jumbo'.
It's rather like the exponentially based Richter scale for measuring earthquakes, (or the decibel scale for sound, or any exponentially based scale). Very few people understand that a Richter 6.1 earthquake is TWICE as strong as a Richter 6.0 quake, and that a Richter 7 quake is ten times as strong as a 6.0 quake.
I would advise Dr. Sachs, and/or other economists trying to illustrate a measure of inequality in popular mass media, to find or devise some other 'measuring stick'.
As for our good citizen Harry's relevance, try to consider that he is a grown man, (with grandchildren), who thinks that the old I.P Freeley joke is hilarious. (Harry Arm Pitts. Get it?)
This good citizen posits the most basic precept of true democracy. True Democracy requires a moral agreement among citizens. "I will respect you, and your interests, if you will respect mine". Thus, following from this basic moral agreement, we each have an equal 'voice', and an equal vote, in support of our own interests.We are thus all connected, each to all, and all to each, in an agreement of mutually intertwined interests.
The system we have now is an "every person for himself or herself" system. It is not based upon that moral agreement.
Thus in our system, one person is not required, or even expected, to respect the interests of others. One person is allowed to have so much, that many do not have even enough to sustain a minimally dignified life.
In the US today, 22 people, 22 individual citizens, (not even enough to fill the first 6 rows of a city bus), have as much wealth, combined between them, as 160 MILLION of their fellow citizens.
It is surely no surprise that among those 160 MILLION are many millions (about 50-60) who suffer in the constant indignity of poverty, with tens of millions of children living in daily 'food insecurity'. (That means that though they may not be actually starving, they never know where their next meal is coming from, or when).
Nossir 10/02/16 08:10 PM
The fallacy of composition states that what works on a small scale - say in a country like Denmark - will not work everywhere, or more specifically, in a 17 trillion dollar economy like the United States. Investors will not invest the capital needed to maintain an economy of this size with tax rates north of 50%.
megmuck 10/03/16 06:25 AM
But they did for until the 1980's and the Reagan tax cuts. What happened to make Americans so much greedier 30 years ago?
tsynchronous 10/03/16 07:18 AM
I lived the economy of the late 1970's early 1980's - let's see - interest rates of 22% - being 1 of 25 individuals applying for a dishwasher job - running out of gasoline - sure - let's bring those days back.
and yes rates were higher - but the deductions were huge - if you were wealthy - you could easily buy tax shelters that would offset your income.
RZwarich 10/03/16 07:29 AM
Pardon me, but this good citizen, Nossir, is shoveling a load of typical BS. We must suffer inequality in good cheer, he or she posits, and tens of millions of us must struggle to put food on our children's tables, or else the all powerful "Investors" will be angry with us and stop being so kind to us.
This is the same line of "reasoning" that holds that when 'Investors" exploit the population of an underdeveloped country, paying slave level wages to people living in squalid poverty, they are being superbly magnanimous for "providing jobs".
The "Investors" who rule over us, are parasites who are sucking the blood out of our nation, but to their way of thinking, they are kind and magnanimous as they deign to exploit us.
Such is the sick psychology of the Ruling Classes. Such has it ever been, (and likely will ever be).
Global Initiative 10/03/16 07:43 AM
RZ.
if only you were in charge, right? You'd make sure it was fair for everyone (including, of course, yourself?)
bigfoot 201510/03/16 04:22 PM
one of the greatest periods of growth in the United States was the 1950's. Top marginal tax rate was 90 percent.
rwc2 10/03/16 07:46 PM
look it up nossir. Capital gains tax are not north of 50% even in Denmark Most gains there are taxed at 27%. It's earned income taxes combined with VAT that add up to around 55% in Denmark.
For those tax rates they get free and/or subsidized education through university, free health care for all, an infrastructure that puts ours to shame, a vastly superior mass transit system throughout the nation, guaranteed maternity/paternity leave of up to 2 years with income provided by government; hugely subsidized childcare for those too young for kindergarten, etc. etc.
Considering my approximate 30% total tax rate, I'm pretty sure I spend/spent more than another 20% of my income on all the services provided by the Danish government (and by most of the rest of Europe, Canada, Australia, New Zealand). As a not an all insubstantial side benefit, there would be the joy of living in a society not beset by poverty, alienation and hatred. In fact, that additional tax rate seems a small price to pay I belief.
And what's more, I don't even think the tax rate has to be that high here to provide those services if we stopped spending way, way too much on the military and our attempt to be world policeman.
RZwarich10/03/16 07:33 AM
This good citizen's heart seems to be in the right place, (generally speaking), but she or he is very confused.
Per capita income does not measure income distribution.
If 10 people have a per capita income of $1 million, we do not know if they each make $100k, or one makes $990,000, and the other nine split the other $10k.
Suares23 10/02/16 08:46 PM
Median household income is no indicator of prosperity. If adult children can't make enough money to live apart from their parents, even if they take a minimum wage job the median household income goes up. Per capita income is a much more truthful indicator of a country's prosperity. Obama's (and Clinton's) economic policies hurt the middle class; why do you think "income inequality" has gotten worse in the past eight years - and why Hillary won't release the texts of her Wall Street speeches?
Suares2310/04/16 08:17 AM
RZwarich 10/03/16 07:41 AMRZ, please note that my comment specified a country's prosperity, not individual prosperity. Plus, your example defines "average" prosperity, not "median" prosperity. As you note, "averages" explain very little; "median" incomes are a much more accurate indicator of individuals' prosperity.
This is the 'religious' dogma of the Elite. Let's produce 'economic growth' and the benefits will trickle down to all. This dogma has been thoroughly proven top be a 'fairy tale' that never comes true.When 'economic growth occurs, the newly created wealth is distributed the same as the old amount of wealth. Most goes to the top. It does NOT "trickle down".
Since the blood sucking pirates raped our nation, culminating in the economic collapse of 2008, the taxpayers 'bailed them out'. That's you and me, folks. We EACH paid to make these guys 'whole'.
Ever since, we've had a decent amount of 'economic growth', but almost all of it has gone to those SAME blood sucking pirates.
The good citizen is 100% correct that "Inequality of incomes is a necessary condition of a free market economy", but she or he is 100% wrong that in a free market economy "growing the economy raises more people up".
Growing an economy only "raises more people up" if the "free market is regulated to produce an equitable (fair, NOT equal), distribution of wealth.
[Oct 05, 2016] Stupefied after graduation
Notable quotes:
"... Smart young things joining the workforce soon discover that, although they have been selected for their intelligence, they are not expected to use it. They will be assigned routine tasks that they will consider stupid. If they happen to make the mistake of actually using their intelligence, they will be met with pained groans from colleagues and polite warnings from their bosses. After a few years of experience, they will find that the people who get ahead are the stellar practitioners of corporate mindlessness. ..."
"... The Stupidity Paradox ..."
"... they quickly found themselves working long hours on 'boring' and 'pointless' routine work. After a few years of dull tasks, they hoped that they'd move on to more interesting things. But this did not happen. As they rose through the ranks, these ambitious young consultants realised that what was most important was not coming up with a well-thought-through solution. It was keeping clients happy with impressive PowerPoint shows. Those who did insist on carefully thinking through their client's problems often found their ideas unwelcome. If they persisted in using their brains, they were often politely told that the office might not be the place for them. ..."
Oct 02, 2016 | aeon.co
Aeon (RS). " How organisations enshrine collective stupidity and employees are rewarded for checking their brains at the office door."You don't have to be stupid to work here, but it helps Aeon Essays
Each summer, thousands of the best and brightest graduates join the workforce. Their well-above-average raw intelligence will have been carefully crafted through years at the world's best universities. After emerging from their selective undergraduate programmes and competitive graduate schools, these new recruits hope that their jobs will give them ample opportunity to put their intellectual gifts to work. But they are in for an unpleasant surprise.Smart young things joining the workforce soon discover that, although they have been selected for their intelligence, they are not expected to use it. They will be assigned routine tasks that they will consider stupid. If they happen to make the mistake of actually using their intelligence, they will be met with pained groans from colleagues and polite warnings from their bosses. After a few years of experience, they will find that the people who get ahead are the stellar practitioners of corporate mindlessness.
One well-known firm that Mats Alvesson and I studied for our book The Stupidity Paradox (2016) said it employed only the best and the brightest. When these smart new recruits arrived in the office, they expected great intellectual challenges. However, they quickly found themselves working long hours on 'boring' and 'pointless' routine work. After a few years of dull tasks, they hoped that they'd move on to more interesting things. But this did not happen. As they rose through the ranks, these ambitious young consultants realised that what was most important was not coming up with a well-thought-through solution. It was keeping clients happy with impressive PowerPoint shows. Those who did insist on carefully thinking through their client's problems often found their ideas unwelcome. If they persisted in using their brains, they were often politely told that the office might not be the place for them.
... ... ...
Organisations hire smart people, but then positively encourage them not to use their intelligence. Asking difficult questions or thinking in greater depth is seen as a dangerous waste. Talented employees quickly learn to use their significant intellectual gifts only in the most narrow and myopic ways.
Those who learn how to switch off their brains are rewarded. By avoiding thinking too much, they are able to focus on getting things done. Escaping the kind of uncomfortable questions that thinking brings to light also allows employees to side-step conflict with co-workers. By toeing the corporate line, thoughtless employees get seen as 'leadership material' and promoted. Smart people quickly learn that getting ahead means switching off their brains as soon as they step into the office. ... ... ...
We found many ways that all kinds of organisations positively encouraged intelligent people not to fully use their intelligence. There were rules and routines that prompted them to focus energies on complying with bureaucracy instead of doing their jobs. There were doctors who spent more time 'playing the tick-box game' than actually caring for patients; teachers who spent more time negotiating new bureaucratic procedures than teaching children. We met Hans, a manager in a local government agency: after a visit from a regulator, his office received a list of 25 issues in need of improvement. So Hans's agency developed 25 new policies and procedures. The result: the regulator was happy, but there was no change in actual practice. Such stories showed us how mindless compliance with rules and regulations can detract people from actually doing their jobs. The doctors, teachers and government officials all knew that the rules and regulations they spent their days complying with were pointless diversions. However, they chose not to think about this too much. Instead, they just got on with ticking the boxes.
Another significant source of stupidity in firms we came across was a deep faith in leadership. In most organisations today, senior executives are not content with just being managers. They want to be leaders. They see their role as not just running their business but also transforming their followers. They talk about 'vision', 'belief' and 'authenticity' with great verve. All this sounds like our office buildings are brimming with would-be Nelson Mandelas. However, when you take a closer look at what these self-declared leaders spend their days doing, the story is quite different.
... ... ...
As Jan Wallander, the ex-chairman of Sweden's Handelsbanken, said: 'Business leaders are just as fashion-conscious as teenage girls choosing jeans.' Many companies adopt the latest management fads, no matter how unsuitable they are. If Google is doing it, then it's good enough reason to introduce nearly any practice, from mindfulness to big-data analytics.
,,, ,,, ,,,
One last source of corporate stupidity we came across was company culture. Often, these cultures imprison employees in narrow ways of viewing the world, such as the common obsession with constant change.
... ... ...
What's more, people in corporations have short attention spans. Perpetrators of blunders will likely have moved onwards (often upwards) before their mistakes becomes obvious. 'Always try to outrun your mistakes' was one middle-manager's key career advice.
... ... ...
In a world where stupidity dominates, looking good is more important than being right. Advanced practitioners of corporate stupidity often spend less time on the content of their work and more on its presentation. They know that a decision-maker sees only the PowerPoint show and reads just the executive summary (if they're lucky). They also realise that most stupid ideas are routinely accepted when they're presented well. Decision-makers will likely forget much of the content by the time they walk out the door. And when things go wrong, they can say: 'They didn't read the fine-print.'
Negotiating corporate stupidity also requires assuming that the boss knows best. This means doing what your boss wants, no matter how idiotic. What is even more important is that you should do what your boss's boss wants. You will look like you are loyal and it will save time arguing for your position. When things go wrong, you can blame your boss.Working in a stupefied firm often means blinding others with bullshit. A very effective way to get out of doing anything real is to rely on a flurry of management jargon. Develop strategies, generate business models, engage in thought leadership. This will get you off the hook of doing any actual work. It will also make you seem like you are at the cutting edge. When things go wrong, you can blame the fashionable management idea.
[Oct 05, 2016] the reason wealth concentration becomes inherently unstable is because of the exponential growth of capital, which is essentially rent the bottom 80% must pay to the top 20% net investment holders in one form or another
Oct 05, 2016 | economistsview.typepad.com
Ron Waller -> anne... October 04, 2016 at 06:39 PM
I think the reason wealth concentration becomes inherently unstable is because of the exponential growth of capital, which is essentially rent the bottom 80% must pay to the top 20% net investment holders in one form or another.Exponential growth of capital and no growth of incomes and wealth for the bottom 80% means that the glut of growing capital aggressively seeking returns will eventually leech so much wealth out of the real world economy it will cause it to collapse in a deflationary death spiral when people stop borrowing.
In short, the neoclassical Friedmanian era is coming to a close one way or another. One way is that some European nations reject capitalism for fascism. If that happens, Masters of the Universe can try shorting civilization. But they won't be taking it with them.
[Oct 01, 2016] The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger
Notable quotes:
"... Why all the bullshit jobs? And why are the most necessary and useful jobs, almost inevitably the lowest prestige and lowest paid? Capitalism. It's a nasty, nasty, nasty tangle of perverse incentives and evil. ..."
Oct 01, 2016 | www.nakedcapitalism.com
Kurt Sperry October 1, 2016 at 11:44 amBecauseTradition October 1, 2016 at 12:52 pmDavid Graeber I think hits one out of the park today: http://evonomics.com/why-capitalism-creates-pointless-jobs-david-graeber/
Why all the bullshit jobs? And why are the most necessary and useful jobs, almost inevitably the lowest prestige and lowest paid? Capitalism. It's a nasty, nasty, nasty tangle of perverse incentives and evil.
Jomo October 1, 2016 at 2:28 pmThe answer clearly isn't economic: it's moral and political. The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the '60s). And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for them. David Graeber from http://evonomics.com/why-capitalism-creates-pointless-jobs-david-graeber/
Also, as several here have noted, one can work without a job if they have such resources as land or a workshop and, dare I say it, an income.
Nice article!
Yes! Just read! Forwarding to friends and family! Love comments community on NC site.
[Sep 29, 2016] The academic precariat in the UK
Sep 29, 2016 | www.nakedcapitalism.com
paul September 29, 2016 at 7:24 am
Clive September 29, 2016 at 7:43 amThe precariat article is good, reflecting the depressing industrialisation of education in the UK. Think only low–paid workers get the Sports Direct treatment? You're wrong Guardian. The academic precariat in the UK.
Reply ↓
The guardian is all for this in its own workplace,howeverpaul September 29, 2016 at 7:52 amThe Guardian is, increasingly (if you'll pardon the phrase) getting on my tits at the moment. Is there anything worse in the mainstream media than a Progressive In Name Only newspaper?
Reply ↓DJG September 29, 2016 at 9:22 amThe BBC's fair and balanced news and current affairs departments ( driven by its sinister business unit ) are perhaps worse because of its greater reach, but it's a tight race.
Reply ↓Clive, intemperate: The agony of the Guardian is indeed interesting. A while back, I read that its site was the most used among English-language newspapers, particularly by U.S. readers looking for some balance.
With regard to the U.S. political coverage, and their rah-rah Clintonism, as evinced by the resurrection of the likes of Jill Abramson, I tend to cut them some slack. I find that many English (in particular, the English) are somewhat tone-deaf about U.S. culture and folkways. I imagine some Guardian Uxonian editors, who once spent a week in NYC with a side trip to LA, and who have actually eaten corn on the cob, thinking that they understand the U.S. Constitution and U.S. politics. But they still don't know how to pronounce Illinois and Arkansas.
The anti-Corbyn hysteria shows detachment from their roots. The Guardian editors should get in a car and head out for a field trip to Manchester (do they recall Manchester?) to find out more about Brexit and Corbyn. A trip to the English nether-regions would do them some good.
And yet I can't complain too much: How often do they present Douthat, Bruni, and Brooks as sages?
[Sep 29, 2016] Georgia Tech's master degree in computer science costs less than one-eighth as much as its most expensive rival - if you learn online.
Sep 29, 2016 | www.nakedcapitalism.com
Portia September 29, 2016 at 8:05 am
Jim Haygood September 29, 2016 at 8:14 amhttp://www.burlingtonfreepress.com/story/news/2016/09/28/st-michaels-facing-15m-deficit/91212534/
I thought the reasoning was interesting:To keep a little more of that tuition money, the college is considering slightly ratcheting down financial aid. They are also going to offer buyouts to a number of employees later this fall.
"When you have a reduction in your enrollment, you're going to need a proportionate reduction in faculty and staff," Robinson said. "We definitely need to get smaller."
Adding to the problem, there were fewer unrestricted donations - donations that are free to use for whatever the college might need - than expected last year, but more donations overall. Gifts that were received were earmarked for specific programs and buildings on campus, not necessarily for the general fund. (can't put your name on a general fund)
By next year the college won't be able to break even, but by 2018 Robinson and his team expects to present a balanced budget to the Board of Trustees.
Despite the budget issues, the college is still on strong footing and is looking ahead, said Alex Bertoni, spokesperson for the college.
"The college is doing well, and the students here are thriving," he said. "We're going to continue to invest in the long-term. " (that long-term does not look good for a lot of students, to me)
bolding and comments in () mine. I am an eye-roller for sure, and they got a workout here.
Reply ↓Portia September 29, 2016 at 8:24 amThe ghastly horror of competition roils the cozy academic cartel:
Georgia Tech's master's [sic] in computer science costs less than one-eighth as much as its most expensive rival - if you learn online.
With one of the top 10 computer science departments in the nation, according to U.S. News & World Report, Georgia Tech had a reputation to uphold. So it made the online program as much like the residential program as possible.
Tuition for a 30-credit master's in computer science from the University of Southern California runs $57,000. Syracuse, Johns Hopkins and Carnegie Mellon charge over $43,000 for the same degree.
Most prestigious colleges are currently sticking with the model that lets them offer degrees for $57,000 instead of the roughly $7,000 that it costs at Georgia Tech.
Creative destruction, comrades: Who is Joe Schumpeter?
Reply ↓To be fair, IMO computer science is an ideal online course, coding being something most people do alone. And only the self-disciplined will endure.
[Sep 28, 2016] Is Inequality Rising or Falling? by James Kwak
Sep 28, 2016 | baselinescenario.com
Last week, Council of Economic Advisers chair Jason Furman took to the Washington Post to announce that President Obama has "narrowed the inequality gap." Furman's argument, bolstered by charts and data from a recent CEA report, has won over some of the more perceptive commentators on the Internet, including Derek Thompson, who concludes that Obama "did more to combat [income inequality] than any president in at least 50 years." In 538, the headline on Ben Casselman's summary reads, "The Income Gap Began to Narrow Under Obama."
But is it true?
I already wrote about the key misdirection in Furman's argument: his measures of reduced inequality compare the current world not against the world of eight years ago, but against a parallel universe in which, essentially, the policies of George W. Bush remained in place. (This is not something either Thompson or Casselman fell for; they both realized what Furman was actually arguing.) Today I want to address the larger question of whether inequality is actually getting worse or better.
First, let's orient ourselves. At a high level, there are two sets of forces that affect income inequality. The first set is underlying economic factors that determine inequality of pre-tax income: skills gap, globalization, bargaining power of labor, and so on. The second set is government policies that affect the distribution of income, often referred to as taxes and transfers; these policies take pre-tax income inequality as an input and produce after-tax income inequality as an output. (This isn't a perfect distinction, since tax and transfer policies also affect the distribution of pre-tax income, but I think it's good enough for explanatory purposes.)
Furman's argument is that Obama has improved that second set of policies. That's what this chart really shows; remember, it's comparing the effect of taxes and transfers next year against the effect of taxes and transfers under George W. Bush policies.
skunk | September 27, 2016 at 6:01 pm
Either way, we still have an economy which is build on a foundation of debt, that in turn leads to price increases, and the separation of the haves, and the have nots.
[Sep 28, 2016] Wolf Richter Negative Growth of Real Wages is Normal for Much of the Workforce, and Getting Worse – New York Fed naked cap
Notable quotes:
"... If you're wondering why a large portion of American consumers are strung out and breathless and have trouble spending more and cranking up the economy, here's the New York Fed with an answer. And it's going to get worse. ..."
"... That the real median income of men has declined 4% since 1973 is an ugly tidbit that the Census Bureau hammered home in its Income and Poverty report two weeks ago, which I highlighted in this article – That 5.2% Jump in Household Income? Nope, People Aren't Suddenly Getting Big-Fat Paychecks – and it includes the interactive chart below that shows how the real median wage of women rose 36% from 1973 through 2015, while it fell 4% for men... ..."
"... Nominal wages are sticky downwards but not real wages. That is why the FED, the banks, the corporate sector and the economists support persistent inflation, i.e. it lowers real wages. The "study" correlating wage growth with aging is one of those empirical pieces by economists to obscure the role of inflation in lowering real wages. ..."
"... Real Wage Growth chart very interesting, crossing negative at about 55 for no college, and 43 for a Bachelor's degree. 43!! Not even halfway through a work-life, and none better since 2003 at best. ..."
Sep 28, 2016 | www.nakedcapitalism.com
By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street.The New York Fed published an eye-opener of an article on its blog, Liberty Street Economics , seemingly about the aging of the US labor force as one of the big economic trends of our times with "implications for the behavior of real wage growth." Then it explained why "negative growth" – the politically correct jargon for "decline" – in real wages is going to be the new normal for an ever larger part of the labor force.
If you're wondering why a large portion of American consumers are strung out and breathless and have trouble spending more and cranking up the economy, here's the New York Fed with an answer. And it's going to get worse.
The authors looked at the wages of all employed people aged 16 and older in the Current Population Survey (CPS), both monthly data from 1982 through May 2016 and annual data from 1969 through 1981. They then restricted the sample to employed individuals with wages, which boiled it down to 7.6 million statistical observations.
Then they adjusted the wages via the Consumer Price Index to 2014 dollars and divide the sample into 140 different "demographic cohorts" by decade of birth, sex, race, and education. As an illustration of the principles at work, they picked the cohort of white males born in the decade of the 1950s.
That the real median income of men has declined 4% since 1973 is an ugly tidbit that the Census Bureau hammered home in its Income and Poverty report two weeks ago, which I highlighted in this article – That 5.2% Jump in Household Income? Nope, People Aren't Suddenly Getting Big-Fat Paychecks – and it includes the interactive chart below that shows how the real median wage of women rose 36% from 1973 through 2015, while it fell 4% for men...
Sally Snyder September 28, 2016 at 7:22 am
Damian September 28, 2016 at 7:35 amHere is an interesting article that looks at which Americans have left the workforce in very high numbers:
http://viableopposition.blogspot.ca/2016/08/exiting-workforce-growing-pastime-for.html
The current real world employment experience of millions of Americans has shown little improvement since the end of the Great Recession.
Jim A. September 28, 2016 at 7:37 amThe number of public companies have been cut in half in the last 20 years. Just for one metric.
So for those born in the 50's, reaching middle or senior management by the time they were in their mid 40's (1999) was increasingly harder as the probability of getting squeezed out multiplied. In the last ten years, the birth / death rate of startups / small business has reversed as well.
There is probably ten other examples of why age is not the mitigating criteria for the decline in wages. It's not skill sets, not ambition, not flexibility. Pure number of chances for advancement and therefore associated higher wages has declined precipitously.
Anti Trust Enforcement went out the window as Neo-Liberal policies converted to political donations for promoting consolidation.
Now watch even those in their 20-30 age group will experience the same thing as H-1b unlimited takes hold with the Obama / Clinton TTP burning those at younger demographics. Are you going to say they are "too old" as well to write software?
Tell me where you want to go, and I will focus on selective facts and subjective interpretation of those selective facts to yield the desired conclusions.
Barack Peddling Fiction Obama – BS at the B.L.S. – has a multiplicity of these metrics.
Ignim Brites September 28, 2016 at 8:35 amHmm…Because wages are "sticky downwards" it would be helpful to see the inflation rate on that first chart.
Reply ↓Steve H. September 28, 2016 at 8:05 amNominal wages are sticky downwards but not real wages. That is why the FED, the banks, the corporate sector and the economists support persistent inflation, i.e. it lowers real wages. The "study" correlating wage growth with aging is one of those empirical pieces by economists to obscure the role of inflation in lowering real wages.
Real Wage Growth chart very interesting, crossing negative at about 55 for no college, and 43 for a Bachelor's degree. 43!! Not even halfway through a work-life, and none better since 2003 at best.
[Sep 28, 2016] The Consequences of Long Term Unemployment - NBER
Sep 28, 2016 | www.nber.org
[Sep 28, 2016] Globalization, Inequality and Welfare - NBER
Sep 28, 2016 | www.nber.org
[Sep 26, 2016] The Financialization of Education and the Student Loan Debt Bubble
Sep 26, 2016 | www.nakedcapitalism.com
DrBob September 25, 2016 at 11:58 am
The Financialization of Education and the Student Loan Debt Bubble
http://www.nybooks.com/articles/2016/10/13/how-the-financing-of-colleges-may-lead-to-disaster/
[Sep 26, 2016] The downside of upward mobility
Notable quotes:
"... I think that we are led to a very somber conclusion here. In societies with slow growth, upward mobility is limited by the lack of opportunities and the solid grip that those who are on the top keep over the chances of their children to remain on the top. It is either self-delusion or hypocrisy to believe that societies with such unevenness of chances will come close to resembling "meritocracies". But it is also the case that true upward mobility comes with an enormous price tag of lives lost and wealth destroyed. ..."
Sep 26, 2016 | economistsview.typepad.com
http://glineq.blogspot.com/2016/09/the-downside-of-upward-mobility.html
RGC : , The downside of upward mobility
The downside of upward mobilityanne -> RGC... , Sunday, September 25, 2016 at 09:40 AMSaturday, September 17, 2016
Branko Milanovic
...........................
I think that we are led to a very somber conclusion here. In societies with slow growth, upward mobility is limited by the lack of opportunities and the solid grip that those who are on the top keep over the chances of their children to remain on the top. It is either self-delusion or hypocrisy to believe that societies with such unevenness of chances will come close to resembling "meritocracies". But it is also the case that true upward mobility comes with an enormous price tag of lives lost and wealth destroyed.http://glineq.blogspot.com/2016/09/the-downside-of-upward-mobility.html
Really important essay.
[Sep 26, 2016] Another way of eliminating employees and forcing the customer to do the work
Notable quotes:
"... I refuse to use self-checkouts at grocery stores, as well. I see that, and this new Sam's app, as doing nothing more than 'outsourcing' the job onto the customers themselves (but even better, as they have to pay no one), eliminating jobs, while increasing their profits by cutting the overhead for the company we're patronizing. ..."
"... IMO I think we, as the public, should refuse to use such apps, forcing companies such as these to keep employees rather than allowing them to eliminate jobs to increase their profits. The words 'customer service' are rare enough in businesses these days, already. ..."
Sep 26, 2016 | www.nakedcapitalism.com
Walmart's Sam's Club Scan-and-Go App May Make Cash Registers Obsolete
KurtisMayfield September 25, 2016 at 7:39 amAs of 2014, nearly 30% of the US households no internet access. How do you think that maps onto WalMart customers? Plue get outside the big cities, you see a big drop in smart phone use. Even in wealthy Mountain Brook, Alabama (yes, believe it or not, it looks like the better parts of Westchester County), you see a fraction of the device use in NYC. These analysts need to get out and see more of the heartland.
crittermom September 25, 2016 at 11:13 amRe: the street article on the Walmart app.
#1 I am happy that the news industry has found new sources of revenue, because that story read like a Walmart advertisement. Don't they have to disclose if they are getting paid for it?
#2. They already have these prescan guns in supermarkets. I see a very small percentage of people us them. I doubt that it saves you any time shopping because the register person can probably scan the items faster than an amateur. If you wanted to save time at the store you would have ordered online.
I certainly agree with you on #1. It did read like a Walmart ad.
The part that jumped out at me was: "If the item doesn't have a barcode, it could be easily looked up."
Really? How is the barcode looked up? And by whom? The customer?
It didn't say how in that 'ad'. (poor reporting)It all sounds like another way of eliminating employees and forcing the customer to do the work. Obviously 'checking out' is one job that can't be outsourced, so now they've discovered a way to still eliminate the employees by forcing the customer to do the work instead.
As Yves mentioned, many of us living rural don't have dumbphones because we don't have service. I've never had a cell phone because there's never been coverage where I've lived out in the country, but even if I did, I'd resent having to 'check myself out' to increase the profits of the company. Oh, hell no!
I refuse to use self-checkouts at grocery stores, as well. I see that, and this new Sam's app, as doing nothing more than 'outsourcing' the job onto the customers themselves (but even better, as they have to pay no one), eliminating jobs, while increasing their profits by cutting the overhead for the company we're patronizing.
SS recently required a cell phone to access your account online. They quickly dialed that back when they realized that many of us don't have one. Duh? I agree with Yves that these analysts need to get out into the heartland more.
And I hope their vehicle breaks down while there, so reality smacks 'em hard. To quote a comedian, "Here's your sign!"
Regarding #2, I have no experience with those. My nearest Walmart is hours away so what little I do buy from them I order online and have it shipped to me.
IMO I think we, as the public, should refuse to use such apps, forcing companies such as these to keep employees rather than allowing them to eliminate jobs to increase their profits. The words 'customer service' are rare enough in businesses these days, already.
[Sep 26, 2016] EconoSpeak All Models are False The Internet-Computer Explanation of Major Recessions
Notable quotes:
"... Female labor force participation in the U.S. is well below its pre-crisis level. Maybe video games are now marketed equally toward men and women. ..."
"... Cowen is an idiot. I think the man needs to get some serious first hand experience on how much "fun" unemployment is. ..."
Sep 24, 2016 | econospeak.blogspot.com
Uneasy Money has a wonderful post on the "all models are false dodge". Nothing really to add but I especially enjoyed this:Romer's most effective rhetorical strategy is to point out that the RBC core of modern DSGE models posit unobservable taste and technology shocks to account for fluctuations in the economic time series, but that these taste and technology shocks are themselves simply inferred from the fluctuations in the times-series data, so that the entire structure of modern macroeconometrics is little more than an elaborate and sophisticated exercise in question-begging.I used to ask the New Classical crowd what the great negative real shock was during the early 1980's. The massive real appreciation of the dollar may have lowered net export demand but that was one of those Keynesian things. One would think the rise in the relative price of domestically supplied goods would have increased employment. Same with the alleged wonders of the Reagan tax cut. Oh but it was paid for by reducing transfer payments – another one of those Keynesian things. If poor people got less government assistance, then they should have gone all Jeb! and worked harder. And of course we were enjoying the start of the computer and technology revolution. But here is where the list gets hysterical – the line was that these new tools were being used to do less work in the office. But before you fall in the floor laughing at this excuse consider a recent excuse ala Tyler Cowen :There are a few reasons, but the internet may be the biggest. It is easier to have fun while unemployed. That's a social problem for some people.Tyler was debating Noah Smith. Noah had just argued for more infrastructure investment on the Keynesian notion that we were still below full employment. Tyler seems to think the low employment to population ratio is still somehow consistent with full employment. Noah disagreed noting that real wage growth is weak to which Tyler continues:Maybe employers just aren't that keen to hire those males who prefer to live at home, watch porn and not get married. Is that more of a personal failure on the part of the worker than a market failure?Oh my – boys will be boys! Noah had some good counters including:Female labor force participation in the U.S. is well below its pre-crisis level. Maybe video games are now marketed equally toward men and women.Thankfully Tyler did not respond by suggesting the ladies in the office were going crazy over hot dudes on Instragram. Posted by ProGrowthLiberal at 4:50 AM
DrDick said... September 25, 2016 at 10:45 AM
Sweet spreadable Jeebus on a matzoh, Cowen is an idiot. I think the man needs to get some serious first hand experience on how much "fun" unemployment is.Anonymous said... September 25, 2016 at 4:38 PMI take it you don't put much stock in articles like this in The Post, then?ProGrowthLiberal September 25, 2016 at 4:46 PMThe Washington Post article noted this presentation:Anonymous said... September 25, 2016 at 5:51 PM"Leisure Luxuries and the Labor Supply of Young Men"
Presenter: Mark Bils, University of Rochester
Coauthors: Mark Aguiar, Kerwin Charles, and Erik Hurst
Discussant: John Kennan, University of Wisconsinhttps://www.frbatlanta.org/news/conferences/2016/0922-unemployment-wages-productivity/agenda
did not provide a link so I have not read this "research".
Until I do - I am not taking stock into this thesis.
Fair enough.ProGrowthLiberal September 25, 2016 at 6:42 PMAs it happens, Dean Baker was the only person who noted that "the drop in employment rates among less-educated women over the last 15 years has been even sharper. Furthermore there has been a decline in employment rates among all groups of prime age workers (25-54), even those with college degrees."
This seems to put a pretty big whole in the idea from the get go, doesn't it?
Anon- Dean's point was pretty clear. We have seen a broad based drop in the employment to population ratio which is better described by weak aggregate demand than some strange tale that the kids stay home to watch video games. And the weakness in real wage growth is better explained by demand rather than supply factors. The rest is details.
[Sep 26, 2016] In 2015, the work rate (or employment-to-population ratio) for American males ages 25 to 54 was slightly lower than it had been in 1940, at the tail end of the Great Depression.
Notable quotes:
"... "In 2015, the work rate (or employment-to-population ratio) for American males ages 25 to 54 was slightly lower than it had been in 1940, at the tail end of the Great Depression. If we were back at 1965 levels today, nearly 10 million additional men would have paying jobs. The collapse of male work is due almost entirely to a flight out of the labor force-and that flight has on the whole been voluntary. The fact that only 1 in 7 prime-age men are not in the labor force points to a lack of jobs as the reason they are not working." ..."
"... "these unworking men are floated by other household members (wives, girlfriends, relatives) and by Uncle Sam. Government disability programs figure prominently in the calculus of support for unworking men-ever more prominently over time." ..."
Sep 26, 2016 | economistsview.typepad.com
A hat tip to PeterK for alerting us to the latest from Nicholas Eberstadt (AEI):pgl -> pgl... , Sunday, September 25, 2016 at 10:43 AMhttp://time.com/4504004/men-without-work/
"In 2015, the work rate (or employment-to-population ratio) for American males ages 25 to 54 was slightly lower than it had been in 1940, at the tail end of the Great Depression. If we were back at 1965 levels today, nearly 10 million additional men would have paying jobs. The collapse of male work is due almost entirely to a flight out of the labor force-and that flight has on the whole been voluntary. The fact that only 1 in 7 prime-age men are not in the labor force points to a lack of jobs as the reason they are not working."
Uh Nick – thanks for telling us what we already knew – labor force participation is down. But do you realize how you just contradicted yourself. Keynesians like myself would agree that is due to a lack of jobs (aka low aggregate demand). So is this a voluntary thing?
Let's read on:
"these unworking men are floated by other household members (wives, girlfriends, relatives) and by Uncle Sam. Government disability programs figure prominently in the calculus of support for unworking men-ever more prominently over time."
Since government provided benefits have not been scaled up by our policy makers – he must think the hard working ladies are cuddling young men for their good lucks or something. Uh Nick – come to NYC and you will see that the ladies here think this is so stupid. His next excuse is all those dudes in prison. Seriously? Does this AEI clown not realize crime is much lower than it was a generation ago? This piece was dumb even by AEI "standards". But at least he did not dwell on the Tyler Cowen porn thing.And at the risk of repeating myself (and Noah Smith) if their thesis that young men had suddenly decided to loaf, then the inward shift of the labor supply curve would mean higher real wages than we are seeing.
I decided to put these thoughts in the following Econospeak post which goes a little further debunking the misrepresentations from the AEI hack:RC AKA Darryl, Ron : , Sunday, September 25, 2016 at 10:10 AMhttp://econospeak.blogspot.com/2016/09/the-new-men-without-jobs-conservative.html
[A reply from Paine:RC AKA Darryl, Ron -> RC AKA Darryl, Ron... , Sunday, September 25, 2016 at 10:14 AM"paine -> RC AKA Darryl, Ron...
Joe playing hill
courtierWho knows what he thinks
Reply Friday, September 23, 2016 at 01:29 PM"
Reminded me of this entirely by accident or maybe incident:]
http://unionsong.com/u017.html
Joe HillA song by Alfred Hayes, Music by Earl Robinson©1938 by Bob Miller, Inc.
I dreamed I saw Joe Hill last night
Alive as you or me
Says I, But Joe, you're ten years dead
I never died, says he
I never died, says heIn Salt Lake, Joe, says I to him
Him standing by my bed
They framed you on a murder charge
Says Joe, But I ain't dead
Says Joe, But I ain't deadThe copper bosses killed you, Joe
They shot you, Joe, says I
Takes more than guns to kill a man
Says Joe, I didn't die
Says Joe, I didn't dieAnd standing there as big as life
And smiling with his eyes
Joe says, What they forgot to kill
Went on to organize
Went on to organizeJoe Hill ain't dead, he says to me
Joe Hill ain't never died
Where working men are out on strike
Joe Hill is at their side
Joe Hill is at their sideFrom San Diego up to Maine
In every mine and mill
Where workers strike and organize
Says he, You'll find Joe Hill
Says he, You'll find Joe HillI dreamed I saw Joe Hill last night
Alive as you or me
Says I, But Joe, you're ten years dead
I never died, says he
I never died, says he
[More about Joe Hill and Alfred Hayes at the link.]
Fortunately I will have very little spare time for idle or addle minded leisure now until well after the election and even well after the subsequent coronation save those days so rainy that outdoor activity is entirely impractical.pgl : , Sunday, September 25, 2016 at 11:55 AMI never liked Ross Douhart. The political right thinks he has written something very important:Peter K. -> pgl... , Sunday, September 25, 2016 at 01:38 PMhttp://www.nytimes.com/2016/09/21/opinion/campaign-stops/clintons-samantha-bee-problem.html?_r=0
"At the same time, outside the liberal tent, the feeling of being suffocated by the left's cultural dominance is turning voting Republican into an act of cultural rebellion - which may be one reason the Obama years, so good for liberalism in the culture, have seen sharp G.O.P. gains at every level of the country's government. This spirit of political-cultural rebellion is obviously crucial to Trump's act."
Vote for a racist like Trump because liberals are suffocating. Did I say I really do not like Ross Douhart?
Again we agree. (Signs of the apocalypse? I guess Trump is going to win.)anne -> Peter K.... , Sunday, September 25, 2016 at 02:44 PMDouchehat is the worst hypocrite. He wants readers to believe he's an expert in morality and morale rectitude and that's what conservative should be known for when in reality Republicans chose Trump as their candidate, one grand example of immorality and dishonesty.
And still Douthat turns on the liberals as behaving badly. Suffocating? Howabout the insanity of the Republican convention? That was suffocating.
He even quotes Internet Troll Steve Sailor!!!
*rubs eyes*
"(The alt-right-ish columnist Steve Sailer made the punk rock analogy as well.)"
It's like Douthat writing about JohnH or BINY. Every one of Sailor's Internet comments would be racist ones about immigration. He's mentally unhinged.
"But it remains an advantage for the G.O.P., and a liability for the Democratic Party, that the new cultural orthodoxy is sufficiently stifling to leave many Americans looking to the voting booth as a way to register dissent."
Clueless Douthat. The culture is getting better in certain ways because the TV executives just want to sell advertising and these performers are popular. It's capitalism at work.
Kudos to John Oliver for winning an Emmy.
"Among millennials, especially, there's a growing constituency for whom right-wing ideas are so alien or triggering, left-wing orthodoxy so pervasive and unquestioned, that supporting a candidate like Hillary Clinton looks like a needless form of compromise."
Note the disdain for millennials. "Triggering."
Conservative like Douthat and Bobo Brooks "trigger" the hate and anger centers of my brain.
The fact is that Samantha Bee is right and NBC facilitated the rise of Trump with the Apprentice and treating him well on other shows like Jimmy Fallon and SNL.
Here's the offending video.
--------- is the worst hypocrite....pgl : , Sunday, September 25, 2016 at 12:24 PM[ Do not use sickening language on this blog. Never ever use such language here. ]
I have provided this link to some of the papers by Michael Bruno – many co-authored by Jeffrey Sachs – for a couple of reasons:http://www.nber.org/authors/michael_bruno
The minor reason is they have a nice paper on the Dutch Disease – something JohnH thinks he understands but he needs to read up on this topic. But the main reason has to do with a stupid comment from Paine on my Econospeak post, which goes to show how very little Paine actually learned in graduate school.
I was try to paint a picture of some Real Business Cycle claim that Bruno and Sachs emphasized when I was in graduate school. I never truly bought their story as I was (and still am) a die hard Keynesian. But here is how it went as applied to the early 1980's (the period I was talking about). If a nation enjoys a massive real appreciation and if aggregate demand does not matter (the New Classical view which we Keynesians do not buy) then the real wages of its domestic workers rise. These workers supply more labor driving down wages relative to domestic prices. So domestic firms hire more workers.
That is their story. I do not buy it as I was clearly mocking it. Alas Paine never learned this. And so he mocks someone who did. Just another day at the EV comment section. Aals.
[Sep 26, 2016] Neoliberal prostitute Cowen about unemployment
Sep 26, 2016 | economistsview.typepad.com
anne -> djb... September 25, 2016 at 07:29 AM https://www.bloomberg.com/view/articles/2016-09-12/debating-government-s-role-in-boosting-growth
September 12, 2016
Debating Government's Role in Boosting Growth: Cowen and Smith
By Tyler Cowen & Noah SmithSmith: If that's true -- if we're seeing a greater preference for leisure -- why are we not seeing wages go up as a result? Is that market also broken?
Cowen: Maybe employers just aren't that keen to hire those males who prefer to live at home, watch porn and not get married. Is that more of a personal failure on the part of the worker than a market failure? Reply Sunday, DrDick -> djb... , Sunday, September 25, 2016 at 07:49 AM
This is a man who has never visited reality.Paine -> DrDick... , Sunday, September 25, 2016 at 12:03 PMAnd he's well compensated for his pipe dreamingDrDick -> Paine ... , -1Why seek truth from facts
When from scratch
story telling pays so much better;-)cm -> djb... , -1And I thought it was "video games".pgl -> djb... , -1There will always be water carriers "explaining" lack of success by lack of virtue. Likewise, before large scale automation and "globalization", we didn't need PISA studies to highlight the failures of the education systems and alleged lack of student/graduate preparedness.
Sandwichman had multiple expositions on the early lump of labor fallacy debates where the plight of laborers was ascribed to their carrying their money to the ale house.
He lacks basic logic. If his story was valid, real wages would have risen. Inward shift of the supply curve v. movement along a supply curve? Hello? What do they teach the kids at GMU?Peter K. -> pgl... , -1This month's Time magazine - with Kaepernick on the cover - has a column by an AEI hack, Eberstadt, who pushes the exact same line Cowen is pushing. The lazy/entertained male meme.Peter K. -> Peter K.... , Sunday, September 25, 2016 at 06:42 AMHis reasoning is that the decline in the labor force participation rate is consistent through boom times and recessions. (I'm not going to bother linking.)
"Consider: America's prime-male workforce participation has been declining at a virtually linear rate for half a century - a trajectory unaffected by good times or recessions."
Again I suspect the conservatives are just lying. The Age of Niallism.
Excellent Econospeak post by PGL. He can be quite good when not trolling or mud-wrestling with trolls.
Dean Baker also takes on the new conservative meme:Peter K. -> Peter K.... , Sunday, September 25, 2016 at 06:43 AMIf Men Don't Work Because of Video Games, What Explains Women Not Working?
by Dean Baker
Published: 24 September 2016
As is widely known the Washington Post never misses an opportunity to blame the victims of policy for bad outcomes, rather than rich and powerful folks who design policy. We are treated to yet another example of this charade with the Post running a major article that claims that video games are a major reason that fewer young men are working today than 15 years ago.
The basic story is that many young men, particularly those with less education, have dropped out of the labor force in the last 15 years. According to survey data, they appear to be spending much of their time playing video games. They also report to be relatively happy. See, all you people who thought it was a bad economy are mistaken, the problem is the video games are just too much fun.
Okay, that's a great Trumpian level of analysis, but let's get back to the real world. Less-educated young men are not the only group with declines in employment rates. In fact, the drop in employment rates among less-educated women over the last 15 years has been even sharper. Furthermore there has been a decline in employment rates among all groups of prime age workers (25-54), even those with college degrees.
This general drop in employment rates might suggest that the real problem is a lack of demand. In other words, young men are not working for the same reason young women are not working, the Washington Post and other advocates of austerity have been successful in reducing demand in the economy by reducing the government budget deficit. So the problem has little to do with video games, the problem is the policy, but hey, if the Post can use video games to distract attention from what its favored policies are doing to people -- why not?
Not just Time magazine, but the Washington Post as well. A large problem is MediaMacro or the corporate media.cm -> Peter K.... , Sunday, September 25, 2016 at 08:40 AMWhat, is there a presumption that young women don't play video games? (Or indulge in other online/"social media" entertainment formats?)Peter K. -> cm... , Sunday, September 25, 2016 at 09:16 AMOf course lack of employment is not the consequence but the cause of filling one's day with any available entertainment - and due to cheap offshore manufacturing the hardware is overall a minor expenditure, as well as due to the near zero marginal cost of software replication, the games are quite affordable. For online games there are data center expenses but they are distributed over many players which fits the budget of involuntary or semi-voluntary "Hotel Mama" residents.
Of course puritans cannot have it that the un(der)employeds are not suffering every inconvenience there is, particularly the soul crushing boredom of an absence of any engaging activity. Hence the mindset that the welfare state must provide exactly the measure of life support that keeps the beneficiaries from death but in this particular state of suffering. Being able to play games or having sexual relations (with others or oneself) defeats the whole purpose.
Well said.JF -> Peter K.... , Sunday, September 25, 2016 at 10:25 AMYou mean reducing Spending in the economy, and yes via political controls that stop the govt from spending at levels that might fill the gaps.pgl -> Peter K.... , Sunday, September 25, 2016 at 09:23 AMBut the point is, to me, that private spending is where it is and will not increase to fill the gaps. Only the public acting as society's agent vua its govt can increase spending to fill the gaps - uh, jusy as Keynes and many ithers have said for quite some time.
I'm pretty sure you agree, but the point is about spending, not about the fiscal math (a deficit is just 2nd grade math, not a policy). The other party does not want to fill gaps and does not want the public to understand its role in governance - political control for infirm reasons, and that is not a word containing a typo.
Spending to cause gaps to fill. How to get this.
I will have to take a peek at this Eberstadt piece. Maybe he will explain to us how a supposed inward shift of the labor supply curve is consistent with weak real wage growth. Oh wait - he writes for the AEI so maybe not.Peter K. -> pgl... , Sunday, September 25, 2016 at 10:15 AMThat's what I thought. When I saw he was from AEI I knew we were getting lies. Just like with Trump.pgl -> Peter K.... , Sunday, September 25, 2016 at 10:45 AMThat it was in a column in Time magazine depressed me.
Reading your blogpost shredding Cowen cheered me up!
Thanks.
I have a new Econospeak post going after this horrible AEI post. Thanks again for the alert.pgl -> Peter K.... , Sunday, September 25, 2016 at 09:39 AMJust posted a link to this really awful piece from this AEI goofball. Thanks for the tip. Along with the link, I rip its sheer stupidity. Tyler Cowen was really bad but this AEI guy is incredibly incoherent.Paine -> pgl... , Sunday, September 25, 2016 at 11:18 AMTry this on for incoherentpgl -> Paine ... , Sunday, September 25, 2016 at 11:45 AM" ...One would think the rise in the relative price of domestically supplied goods would have increased employment. "
Typo or
banana peel ?I see standard aka Econ 101 theory - which is what the New Classical crowd pushes - is lost on you. Do try to follow the discussion before your usual babbling. Jesus H. Christ - even JohnH is trying to grasp the economics of the Dutch disease. OK - he is doing his usual terrible job but you do not even try.Paine -> pgl... , Sunday, September 25, 2016 at 12:24 PMLook carefully my friendPaine -> Paine ... , -1It's your good fortune no ump stands over your shoulder to rub your face in this goof
Higher dollar leads to lower domestic employment in trade good industries
That or lower wage ratesOr some combo of both
RBC. Modelersanne -> pgl... , Sunday, September 25, 2016 at 07:00 AM
Largely Ignore the complications of open systems
U invoke the forex rateThen fumble the ball behind the line of scrimmage
You are actual more careless and over confident then most here realize
My adivice avoid actual economists
Stay in the boon docks
And at that very gentl hetero fox site econo speakWhere loons can flock with mavericks
Lions lie down with skunkshttps://en.wikipedia.org/wiki/Real_business-cycle_theoryDrDick -> pgl... , -1Real business-cycle theory (RBC theory) are a class of New classical macroeconomics models in which business-cycle fluctuations to a large extent can be accounted for by real (in contrast to nominal) shocks. Unlike other leading theories of the business cycle, RBC theory sees business cycle fluctuations as the efficient response to exogenous changes in the real economic environment. That is, the level of national output necessarily maximizes expected utility, and governments should therefore concentrate on long-run structural policy changes and not intervene through discretionary fiscal or monetary policy designed to actively smooth out economic short-term fluctuations.
According to RBC theory, business cycles are therefore "real" in that they do not represent a failure of markets to clear but rather reflect the most efficient possible operation of the economy, given the structure of the economy.
Conservative economics, like RBC, cannot survive exposure to reality. Your post in the list today quite nicely shreds that kind of nonsense.
[Sep 25, 2016] Popular Acceptance of Inequality Due to Brute Luck
Notable quotes:
"... By Matthew Weinzierl, Assistant Professor of Business Administration, Harvard Business School. Originally published at VoxEU ..."
"... The trick or con being played by the elite is to convince enough of us that the game of life is being played fair. And when that fails, the con or lie becomes that its the fault of (insert target minority group). ..."
"... From two complementary sociological points of view -- conflict theory and symbolic interactionism -- this article is naive -or a red herring- in the ways you suggest. ..."
"... Indeed, the issue is about people accepting a "definition of the situation" that is in fact detrimental to their material interests (Pierre Bourdieu terms this "misrecognition"). Erving Goffman, who was trained as an interactionist, studied con artists to describe how they successfully created a definition of situation -- which means a version of social reality -- that their marks would internalize as reality itself. A sociologist would not begin a discussion of socioeconomic inequality with tax policy. ..."
"... Control over arguments regarding political economy in the public sphere have to be wrested from economists, so that we can start to talk about what actually matters. Sanders' popularity, despite his numerous problems, lay in how he took control of the argument and laid bare the absurdities of those who benefit from the status quo. ..."
"... I say we boycott economists. Sure some of them are not terrible, but in the main the discipline needs to be torn down and rebuilt from the ground up. ..."
"... Many economists function as members of the courtier class, justifying what the rich and powerful want to occur. Most citizens already boycott economists in that they don't use their services except when required to attend an Econ class at school. ..."
"... But economists do influence average citizens lives via their justification of tax policy, land use policy, labor policy, trade policy and law implementation. ..."
"... Economic education has been a failure of the left. Everyone needs to know how money and finance works. Only then can that power be put to various uses. It is not that you don't need economists, you need economists working in your interest. ..."
"... I could get behind this. And I would have to agree that harping against the evils of capitalism, which are very real, often comes from those who don't really understand how it works. ..."
"... The post indicates this guy is Assistant Professor of Business Administration - at Harvard Business School - so I'm not sure I would give him even so much regard as I might give an economist. I wonder how he and his will regard the fairness of luck while they wait in line to be serviced at the guillotine they're building - much as Scrooge crafted his chain and weights for his afterlife. ..."
"... Interesting reference to Scrooge -- the power of art to enlighten the human condition cannot be underestimated. As I get older, it seems to me that the capitalism system debases everything it touches. Anything of real value will be found outside this system. It has become the box that confines us all. ..."
"... It's also worth noting how his examples are still a function of the neoliberal canard that privilege is simply a boost on the ladder of meritocracy. The game is still implicitly understood to be fair. ..."
"... Yet, it's not clear to me what Alice Walton, for instance, has done to justify being a multi-billionaire. People who are born not just with spoons but entire silver foundries in their mouths could redistribute 90% of the wealth they acquired by virtue of being someone's baby and still be absurdly rich. ..."
"... Learning must be for its own sake. Like you, I spent many hours in the library. BUT it was to scratch an itch I have not been able to quell - even in these many years since I was in that library. ..."
"... "The putative "father of the Euro", economist Robert Mundell is reported to have explained to one of his university of Chicago students, Greg Palast: "the Euro is the easy way in which Congresses and Parliaments can be stripped of all power over monetary and fiscal policy. Bothersome democracy is removed from the economic system" Michael Hudson "Killing the Host" ..."
"... The neoclassical economists didn't have a clue as the Minsky Moment was approaching. ..."
Sep 24, 2016 | www.nakedcapitalism.com
Yves here. This article argues that people don't mind inequality due to "brute luck"…but is one man's brute luck another man's rigged system?By Matthew Weinzierl, Assistant Professor of Business Administration, Harvard Business School. Originally published at VoxEU
Tax policy to correct inequality assumes that nobody is entitled to advantages due to luck alone. But the public largely rejects complete equalisation of 'brute luck' inequality. This column argues that there is near universal public support for an alternative, benefit-based theory of taxation. Treating optimal tax policy as an empirical matter may help us to close the gap between theory and reality.
... .... ...
In this case, the optimal tax policy aggressively offsets inequality. Only the need to retain incentives to work and the desire to reward extra effort justify allowing inequality to persist.
... ... ...
Brute Luck and Economic Inequality
What explains the gap between scholarly and popular views of the moral status of pre-tax income? A clue might be our attitude to luck.
The view that individuals have no moral claim to their pre-tax incomes relies on the ethical assumption that nobody is entitled to advantages due to factors outside his or her control. Philosophers such as Cohen (2011) call this 'brute luck'. Given the importance of brute luck (for example, natural ability, childhood home environment, and early schooling) to a person's economic status, this assumption directly leads to a rejection of moral claims to pre-tax income.
... ... ...
The 2016 US presidential campaign's attention to inequality fits these findings. Some candidates complain of a 'rigged system' and rich individuals and corporations who do not pay their 'fair' share. Critically, gains due to a rigged system or tax avoidance are due to unjust actions, not brute luck. They are due to the toss of a loaded coin, not a fair one.
... ... ...
These are early steps in developing a new approach to tax theory that I have called 'positive optimal taxation'. This approach modifies the standard optimal tax analysis by treating the objective for taxation as an empirical matter. It uses a variety of sources – including opinion surveys, political rhetoric, and analysis of robust policy features – to highlight gaps between the standard theory and prevailing reality of tax policy. It also identifies and incorporates into the theory alternative goals – and the philosophical principles behind them – that better describe the public's views on policy.
.... .... ...
Robert Hahl September 24, 2016 at 6:13 amAdam1 September 24, 2016 at 6:17 am"I stole it fair and square" is not a form of brute luck, but I saw no recognition of that fact while skimming the article. Sorry if I missed it.
DanB September 24, 2016 at 7:34 amOne piece of logic missing from the research analysis is accounting for the game itself. If I agree to play a game of chance that is fairly played I am by default also agreeing that I accept the possibility that the outcomes will not be equal, otherwise why would I play. It shouldn't be a surprise that in the end people are willing to maintain that inequality because they originally agreed to it by the fact that they agreed to play.
As Yves points out, if you change the scenario where one of the players was allowed to collude with the person executing the game and the other player was informed of this you might get a very different answer. You might even get a punishing answer.
The trick or con being played by the elite is to convince enough of us that the game of life is being played fair. And when that fails, the con or lie becomes that its the fault of (insert target minority group).
Uahsenaa September 24, 2016 at 9:21 amFrom two complementary sociological points of view -- conflict theory and symbolic interactionism -- this article is naive -or a red herring- in the ways you suggest.
Indeed, the issue is about people accepting a "definition of the situation" that is in fact detrimental to their material interests (Pierre Bourdieu terms this "misrecognition"). Erving Goffman, who was trained as an interactionist, studied con artists to describe how they successfully created a definition of situation -- which means a version of social reality -- that their marks would internalize as reality itself. A sociologist would not begin a discussion of socioeconomic inequality with tax policy.
John Wright September 24, 2016 at 10:06 amA sociologist would not begin a discussion of socioeconomic inequality with tax policy.
But an economist would, and therein lies the problem. Control over arguments regarding political economy in the public sphere have to be wrested from economists, so that we can start to talk about what actually matters. Sanders' popularity, despite his numerous problems, lay in how he took control of the argument and laid bare the absurdities of those who benefit from the status quo.
I say we boycott economists. Sure some of them are not terrible, but in the main the discipline needs to be torn down and rebuilt from the ground up.
Norb September 24, 2016 at 10:35 amMany economists function as members of the courtier class, justifying what the rich and powerful want to occur. Most citizens already boycott economists in that they don't use their services except when required to attend an Econ class at school.
But economists do influence average citizens lives via their justification of tax policy, land use policy, labor policy, trade policy and law implementation.
Even if we tore down the profession, it could likely regrow to provide the same functionality.
The profession provides a valuable service, as it is valued by the class with power and money throughout the world.
Uahsenaa September 24, 2016 at 11:02 amEconomic education has been a failure of the left. Everyone needs to know how money and finance works. Only then can that power be put to various uses. It is not that you don't need economists, you need economists working in your interest.
All knowledge and technology works this way. It is the purposeful use of information that matters, not the information itself. The left wastes time, effort, and resources trying to convince people to change their minds. Instead, they need to focus on building things in the real world, using all the economic tools at their disposal.
Norb September 24, 2016 at 11:50 amI could get behind this. And I would have to agree that harping against the evils of capitalism, which are very real, often comes from those who don't really understand how it works.
Maybe the solution is more co-ops and less rhetoric.
Jeremy Grimm September 24, 2016 at 11:42 amUsing the power of the boycott is another. The powerless need to rediscover what power they truly wield in this system. That was the other failure of the left. Yes, they were actively crushed by corporate power, but the ideas live on. They can only be exterminated through lack of use.
A new ideology needs to be born of the ashes. If the predictions of climate disruption are anywhere near accurate, a proactive, and positive direction can be undertaken. My experience is that caring, healthy people are driven to help others in times of adversity. Well, those times are coming. We are once again going to have to face the choice between choosing abject fear or rolling up our sleeves and getting back to work making everyones lives better.
You don't need corporate sponsorship to do that. They need us more than we need them. In the end, I have a feeling that the current system will come down very quickly. Being prepared for that outcome is what should be driving the actions of those not vested in keeping the status quo going.
Norb September 24, 2016 at 12:34 pmThe post indicates this guy is Assistant Professor of Business Administration - at Harvard Business School - so I'm not sure I would give him even so much regard as I might give an economist. I wonder how he and his will regard the fairness of luck while they wait in line to be serviced at the guillotine they're building - much as Scrooge crafted his chain and weights for his afterlife.
Jeremy Grimm September 24, 2016 at 1:07 pmFor a historian, making connections between past and present situations is the root of their insight. As in all walks of life, your efforts can gain value to your fellow citizens or they can be used as a tool for your own self interest- whatever that might be. How interesting are these repeating cycles in the human drama.
Interesting reference to Scrooge -- the power of art to enlighten the human condition cannot be underestimated. As I get older, it seems to me that the capitalism system debases everything it touches. Anything of real value will be found outside this system. It has become the box that confines us all.
When your viewpoint of the world and your relationship to it shrink to only seeking profits, the depravity of that situation is hidden from view unless shocked back to awareness.
As Peter Gabriel would say- Shock the Monkey
Shock the monkey to life
Shock the monkey to lifeCover me when I run
Cover me through the fire
Something knocked me out' the trees
Now I'm on my knees
Cover me darling please
Monkey, monkey, monkey
Don't you know you're going to shock the monkeyFox the fox
Rat on the rat
You can ape the ape
I know about that
There is one thing you must be sure of
I can't take any more
Darling, don't you monkey with the monkey
Monkey, monkey, monkey
Don't you know you're going to shock the monkeyWheels keep turning
Something's burning
Don't like it but I guess I'm learningShock! – watch the monkey get hurt, monkey
Cover me, when I sleep
Cover me, when I breathe
You throw your pearls before the swine
Make the monkey blind
Cover me, darling please
Monkey, monkey, monkey
Don't you know you're going to shock the monkeyToo much at stake
Ground beneath me shake
And the news is breakingShock! – watch the monkey get hurt, monkey
Shock the monkey
Shock the monkey
Shock the monkey to lifeSpencer September 24, 2016 at 7:12 amThis is tangential to topic of this thread:
I was particularly struck by your comment about art: "the power of art to enlighten the human condition cannot be underestimated." I recall a similar assertion made in one of Howard Zinn's speeches - sorry I can't recall the exact phrasing of his statement or its context.I'm retired and found a strange calling to make art - a calling I never listened to when I had to worry about supporting a household. I find it difficult to make art that isn't political, satirical or in some way didactic. Whether anyone else would regard my works as art I don't know and in a way I don't care. Art has become a way in which I must express something inside me I don't understand but whose direction I must follow. I suppose similar feeling drive many expressions of art. Perhaps that explains something of the power of art you refer to.
Moneta September 24, 2016 at 7:43 amFor the erosion in income inequality to be fixed, economic policies need fixed. The disparity between income quintiles will continue to widen. Social unrest will continue to proliferate. This situation will simply never get corrected until the commercial banks are driven out of the savings business (however bizarre one might think that solution is).
Vladimir Lenin, leader of the 1917 Russian Revolution said: "The best way to destroy the capitalist system is to debauch the currency." Not so. The best way to destroy capitalists is the deregulation of deposit caps for saver-holders' accounts in the commercial banking system. This policy error simply increased the bank's costs with no increase in their income. Bottling up savings, is first observed by the decline in money velocity, then by a decline in AD (secular stagnation), and when the Fed attempts to offset this decline, by an increase in stagflation.
Alejandro September 24, 2016 at 10:52 amThe beliefs come first, then the system reflects these. Creeping individualism and the belief in the self made man will do the trick.
Spencer September 24, 2016 at 9:44 pm""[V]elocity" is just a dummy variable to "balance" any given equation – a tautology, not an analytic tool."
http://michael-hudson.com/2012/05/paul-krugmans-economic-blinders/
How can the "code" be modified to restrain usurious AND sociopathic behaviour?
Alejandro September 24, 2016 at 10:28 pmVi is contrived. Vt is money actually exchanging counterparties. But since Ed Fry discontinued the G.6 debit and demand deposit turnover release in Sept. 1996, the Fed has no rudder or anchor.
Required reserves are a surrogate, though the underweight Vt. But RRs are based on payments (money turning over). And 95 percent of all demand drafts clear thru transaction based accounts.
The "code" you speak of relates to the volume of financial transactions consummated. Financial transactions are not random. Financial speculation is a function of money flows. The volume of bank debits during the housing crisis would have stood out like a sore thumb (as it captured both new and existing real-estate transactions).
Only price increases generated by demand, irrespective of changes in supply, provide evidence of inflation. There must be an increase in aggregate demand which can come about only as a consequence of an increase in the volume and/or transactions velocity of money. The volume of domestic money flows must expand sufficiently to push prices up, irrespective of the volume of financial transactions, the exchange value of the U.S. dollar, and the flow of goods and services into the market economy.
The "administered" prices would not be the "asked" prices, were they not "validated" by (M*Vt), i.e., "validated" by the world's Central Banks.
- Michel de Nostredame
Moneta September 24, 2016 at 7:40 amI'm not sure that what you just spewed even makes sense to you, or that you even bothered to read the link provided…but the "code" is about concurrent monetary AND fiscal policy to serve a purpose other than making the rich richer and the poor poorer…
HotFlash September 24, 2016 at 7:53 amIf someone gets the waterfront property just because he/she was born first so got there first, he better do something positive for the next generation… The next generation will understand the luck factor as not everyone can be standing in the same spot at the same time, but it will not accept the scrooge.
Eclair September 24, 2016 at 9:32 amProf Weinzieri says
If people are entitled, even in part, to their pre-tax incomes, the optimal tax policy would no longer offset inequality as aggressively. Taxes would, instead, be focused on raising funds for government activities in a way that tries to respect those entitlements.
which seems fair-ish, but also
Given the importance of brute luck (for example, natural ability, childhood home environment, and early schooling)
Oh my! Childhood home environment and (gasp!) early schooling are matters of luck? Oh those Haaahvaahd guys! No, professor, winning the lottery is a matter of luck, and can happen to anyone at any point in their life. Being born in poverty, into a class 15% of whose male population is incarcerated or having to go to a crappy school are *systemic* results of deliberate social structures, the elites just prefer to call it "bad luck". Thus we see how the Ivies serve the elites.
Uahsenaa September 24, 2016 at 9:32 amYes, HotFlash. And these 'deliberate social structures,' the 'red-lining' policies, the wildly unequal sentences for crack versus cocaine, the casual brutality of the prison system (over 200,000 male rapes per year), the laws preventing people who have served their sentence for a felony from voting, public housing, scholarship aid, welfare .. in other words, from living and improving their lives .. are structural violence. And then we are 'surprised' when people who have lived their lives under a regime of these subtle but unrelenting acts of economic, social and spiritual violence, finally hit back.
Banana Breakfast September 24, 2016 at 9:49 amIt's also worth noting how his examples are still a function of the neoliberal canard that privilege is simply a boost on the ladder of meritocracy. The game is still implicitly understood to be fair.
Yet, it's not clear to me what Alice Walton, for instance, has done to justify being a multi-billionaire. People who are born not just with spoons but entire silver foundries in their mouths could redistribute 90% of the wealth they acquired by virtue of being someone's baby and still be absurdly rich.
OpenThePodBayDoorsHAL September 24, 2016 at 5:28 pmThe paper seems totally oblivious to the fact that in the scenario presented, all the gains enjoyed by both players are due to luck. Player B is getting a windfall either way, so there's no sense of real unfairness. The perception would be quite different if it was only the difference between A and B that was assigned randomly, while each had to earn some baseline.
Jeremy Grimm September 24, 2016 at 11:45 pmAnd I think the "popular acceptance" part is given a huge boost when the young, black, nominally-Democrat president keeps insisting everything is awesome and anyone who says otherwise is "peddling fiction".
Rodger Malcolm Mitchell September 24, 2016 at 10:20 amI think this paper goes to great lengths to build a question around the ideas of the fairness behind progressive taxation. This post hardly seems to pose a question worthy of study. Our tax systems so much favor Corporations and the wealthy that considerations of "fairness" are at best comical - and I'm not laughing.
kgw September 24, 2016 at 10:35 amThe most important problem in economics is the widening Gap between the rich and the rest. A solution is: https://mythfighter.com/2014/11/09/a-brief-reference-what-you-need-to-know-when-discussing-economics/
From Cold Mountain September 24, 2016 at 11:14 amAs William Godwin says, if people actually knew who they were, all would be peaceable…
Jeremy Grimm September 24, 2016 at 11:48 pmYes, the outcome of self awareness will always be Anarchism. I came be an advocate, not through economics or politics, but thought Buddhism and Daoism. It is a story older than humanity that we are just starting to remember.
So here I am sitting, watching, waiting for the rest of the world to catch up.
Ivy September 24, 2016 at 10:56 amWhat kind of self-knowledge did Hitler find in his imprisonment? It didn't lead to anything I would call peaceable. Was there some inner Hitler he didn't reach in his prison contemplations?
Jeremy Grimm September 24, 2016 at 11:40 pmIf I had only known it was luck, I would not have spent so many late nights in the library during undergrad and grad schools. However, I enjoyed those nights and was enriched by them. Is that taxable?
Norb September 24, 2016 at 11:24 amLearning must be for its own sake. Like you, I spent many hours in the library. BUT it was to scratch an itch I have not been able to quell - even in these many years since I was in that library.
Jeremy Grimm September 24, 2016 at 11:36 pmWill future generations, if there are any, be able to look back and reflect," what were these people thinking?"
There is no justification for the levels of inequality and environmental destruction we are experiencing. Period. We can all consider ourselves fools, even for entertaining debating these issues much longer. We need to be discussing concrete actions, not theoretical justifications.
Everyone must face the randomness of the universe every day. The only certainty know is the one WE create as human beings- one and together. Why is it do you think that the elite never break ranks. They are creating their own certainty in an uncertain world. Heads I win, tails you loose. TBTF. Race to the bottom. The new normal. Political capture using the revolving door techniques.
Human evolution is racing toward a crisis point. Ending inequality and world conflict are at the focal point of this outcome. Leaders that continue to use the outdated modes of social control will either drive us over the cliff to destruction, or will loose the ability to control outcomes as their numbers dwindle. The day the revelation is made that the elite are full of crap, is the day change becomes possible.
It seems large social structures will always come crashing down. The weakness in human nature and flaws in our social structures lead to eventual failure. Greed and selfish action is seldom tolerated is smaller structures.
sd September 24, 2016 at 11:32 amI think there will always be inequality between people on many many dimensions. I am constantly humbled by how much I don't know that other people know, people less well educated and I suspect less intelligent - whatever that means - than I am. I celebrate this inequality and sincerely hope this larger knowledge shared with mine and the knowledge of many others will suffice to address the great challenges we face in the all too near future.
HOWEVER - inequality as a matter of power relations - that is different matter. If I were my great great grandson I could never forgive what I have allowed through my cowardice and intent to have a surviving great great grandson - or granddaughter.
Vatch September 24, 2016 at 5:43 pmI am not sure I really understand the intention of this paper. The example used, that 20% of $90,000 income must be paid in taxes, and then taking surveys of how that distribution should work seems to ignore whether or not the respondents actually understand basic math.
Why do I say this?
The "easy" answer is that Person A pays $15,000 and person B pays $3,000 which is the equivalent of a flat tax. And yet, that's not how most responded. Only 5% selected the easy answer. Which makes me wonder if the targets of the survey even understand basic math.
So I guess I am questioning the questioning….
Vatch September 24, 2016 at 9:52 pmActually the easiest answer is for person A to pay the whole $18,000. He's the one who is getting more money before taxes, and if he pays the $18,000, he's still getting $12,000 more than person B. The "flat tax" is probably the second easiest answer. However, since neither person is doing any tangible work to receive the money, the fairest result is for both to get the same after "taxes". If person A pays $24,000, $18,000 will go to the "state", and $6,000 will go to person B, and both A and B will each get $36,000. Person B can force person A to agree to this, because if they don't agree, then person A only gets $600 and person B gets $300.
If we want to get complicated, then the result should be such that the difference between person A's portion and person B's portion is $300, whether they agree or not. So if they agree, person A would pay $23,850 ($18,000 to the "state" and $5,850 to person B), and person A would get $36,150. In that case, person B would get $35,850. The difference between person A's income and person B's income is $300, just as it would have been if they had not agreed.
Jeremy Grimm September 24, 2016 at 11:13 pmThe "easy" answer is that Person A pays $15,000 and person B pays $3,000 which is the equivalent of a flat tax.
Wait a minute. 20% of $60,000 is $12,000, and 20% of $30,000 is $6,000. Not $15,000 and $3,000.
Anyhow, I still like my solution where person A pays $23,850.
Jeremy Grimm September 24, 2016 at 11:19 pmWhy not question the $90K - of income? - instead.
In terms of the money and wealth of the people who run our government and economy, and control and direct our lives and the lives of millions of others - $90K barely registers.
knowbuddhau September 24, 2016 at 12:47 pmI read this post as questioning the basis for progressive taxation - a rationale for taxation we sorely lack.
Jeremy Grimm September 24, 2016 at 11:23 pmI have little faith in studies like these. My first question is always, "What's a respondent?" Define Person, please.
Notice how they're treated as entirely substitutable standardized parts. That is, as if people were molecules or atoms. But try as it might, social science ain't physics. You can't just grab the nearest few people, sit them down at a keyboard to play your game (for credit? for fun? on assignment?) and then substitute their behavior for the behavior of all people everywhere.
Which people, where, under what conditions, and how many? Was the sample representative? Did the author go to prisons, ghettos, farm fields, etc. and ask them? Or was it proximity and ease of access that defined it?
It's the old "college sophomores in the lab" problem. As an undergrad psych student, I saw time and time again how people gamed the system, yet PhD candidates and professors took the data as gospel. It's only too often more a demonstration of ability to work the method, to play the academic game, than testing hypotheses.
Or I guess as coders say, GIGO.
Jeremy Grimm September 24, 2016 at 12:53 pmAlso you might ask what meaning to attribute to a questionable measure of human opinions about a concept like "what is fair" in an environment completely dominated by promotion of ideas of fairness which to my mind are quite unfair.
So I agree with you and wonder why you don't pres further.
Emma September 24, 2016 at 9:47 pmThis post frames inequality in terms of "fairness" and luck/pluck and treats money as some form of prize in an economic "game". I suppose this way of looking at things works up to a point as long as we look to those below us and congratulate our merit while accepting some greater luck of those above us which help rationalize our merit. But any concepts of fairness or the justice things rapidly fractures if we look past those in our own neighborhood. Riding a bubble through the slums here and elsewhere in the world it becomes very difficult to rationalize justice and merit. Looking in the other direction toward the high rises and gated estates and manifestations of wealth I can't even imagine and the fragments of the fairness or justice of things evaporates completely. The "findings" of this post do not scale - at all.
Aside from the living standard which money/wealth affords the notions of "fairness" "merit" and "luck" this post contemplates there is no discussion of other aspects of money/wealth conveniently passed over and ignored.
In our society our money-culture money/wealth is equated with merit. It packages demand for automatic respect and deference. This pecuniary one-size-fits all measure for character, intellect, excellence, creativity, leadership, even physical attractiveness undermines all these values reducing them to commodities of the marketplace.
But the ability of money/wealth to control and command the lives of others and the collective resources of society is far more pernicious. What concept of "fairness" or "justice" can justify this aspect of inequality?
Jeremy Grimm September 24, 2016 at 10:47 pmJG – Rogge covers this in his book: "World Poverty and Human Rights: Cosmopolitan Responsibilities and Reforms" ( https://en.wikipedia.org/wiki/World_Poverty_and_Human_Rights ) using the perfect example of the acquisition and management of natural resources.
Adar September 24, 2016 at 5:43 pmYour comment to mine leaves me quizzical. Though I value any comments to mine given my wondering how far I am from what is reasonable - global poverty is far beyond the complexity of anything I might address in my comments. I grant global poverty is not a problem beyond solution - but first we need to address the problems of economic philosophy used to justify and enable the gross inequalities of our world.
I have not read Rogge's book. There are far too many books I have not read and of the books i have read there are far too many I have not really understood. I am also concerned by how little this post seems to have stimulated our commentariat - an entity I have come to greatly respect.
Please elaborate on what you mean. I am concerned by this post's lack of consideration of the political power money/wealth confers - something beyond and to some degree outside considerations of poverty and the suffering inequality fosters - even celebrates.
Jeremy Grimm September 24, 2016 at 11:06 pmMy poor non-economist head reels at this article. OK, it's a mind exercise to determine attitudes toward taxation. But it's completely made up – Fig. 1 Tossing a fair coin, doesn't scan for me, it's like a crap game. At the random flip of a coin, A gets twice as much as B, but where did the $18k penalty come from? Is it arbitrary? Why "could" one have to pay more, and who decides? And where did the $24k figure come from? Seems obvious to me A got twice as much, and so should pay 2 out of 3 parts of the penalty. So, re brute luck and tax policy, if inherited wealth or investment income (i.e. rent) vs. wage income is really what's meant here, please say so.
Doug September 25, 2016 at 6:46 amI view this post - at least in part - as questioning the basis for a progressive tax rate based on attitudes toward what is "fair" in turn based on a - sorry - hokey experiment to test attitudes about what is fair. To me the problem is a problem of scale. If we're talking about my place opposed to that of the fellow in the house on the hill or the house down the street - I might - on a good day - buy-in to this post's notions about "fairness". Those notions do NOT scale and they don't give any consideration to the powers of control and command which great wealth confers.
What I can accept in the way of inequality between myself and the guy on the hill does NOT scale when the guy on the hill doesn't live on the hill and only owns the house on the hill as a reminder of his lowly beginnings. He lives in a multi-million dollar 10,000 sq. ft. condominium high in New York City and a similar flat in London, and in Tai Pei and Shanghai and Paris and … and lives in none of them really. And I cannot accept the poverty and oppression found in Camden, New Jersey, Southside Chicago, … in Brazilian favelas or the slums of Seoul.
Sound of the Suburbs September 25, 2016 at 3:47 amPerhaps the failure to scale arises from the compounded flaws that, first, this post is all about "I" and speaks not at all to "we"; and, second, as your comments point out, uses money in typical fashion as the lowest common denominator determining utility and fairness when, 'we' demands a focus on the highest not lowest common denominator (and that's not mathematically or logically convenient).
Further, 'we' must be something more meaningful than a mere agglomeration of "I's". Those are at best 'thin we's' easily seduced into theoretical constructs that, in fact, have nothing to do with the actual experience of 'we' in any meaningful way.Real, 'thick' we's comprised of actual people who persistently interact and truly know they share some to a lot of their shared fates respond to questions of brute luck, fairness and inequality together (whether democratically or otherwise or blends of ways). They don't determine their shared fates with an eye on abstract individualism grounded in lowest common denominators of 'utility'. They actually care about 'what makes most sense for us together' and balk at devices, questions - indeed swindles - aimed at tearing apart the fabric of 'we'.
Sound of the Suburbs September 25, 2016 at 5:20 amMilton Freidman, the man that wrecked the world with bad economics.
Milton Freidman's charm, energy and charisma seduced his students and global elites alike into believing he had come up with an economics that could transform the world. His students loved the idea of transforming the world through economics as it made them feel so important. Global elites loved his economics as it worked so well for them and gave a scientific backing for a world that was one that they had always wanted.
Unfortunately, there were a lot of problems with his economics that are making themselves felt today.
His economics was missing:
1) The work of the Classical Economists
2) The true nature of money and debt
3) The work of Irving Fischer in the 1930sThe Classical Economists were the first economists to look at and analyse the world around them, a world of small state, raw capitalism.
They noted how the moneyed classes were always rent seeking and looking to maintain themselves in luxury and leisure, through rent and interest. This sucked money out of the productive side of the economy, reducing the purchasing power within the nation.
They noted how the cost of living must be kept low, to keep the basic minimum wage low, so nations could be competitive in the international arena.
This knowledge is missing today.
The UK dream is to live like the idle, rich rentier, with a BTL portfolio extracting "unearned" rental income from the "earned" income of generation rent.
In the US they removed all the things that kept the cost of living down, not realising these costs would have to be covered by wages. The US now has a very high minimum wage due to soaring costs of housing, healthcare and student loans and US businesses are squealing.
The true nature of money and debt were understood in the 1930s when the Chicago Plan was put forward after a thorough investigation into the 1929 bust.
Money and debt are opposite sides of the same coin.
If there is no debt there is no money.
Money is created by loans and destroyed by repayments of those loans.This knowledge is missing today.
Today's ubiquitous housing boom is like a printing press creating more and more money as the new mortgage debt comes into existence.
The money supply expands and pours into the real economy making everything look really good.
The only thing that is really happening is the inflation of the price of things that exist already, houses. All the debt being created is not productive investment.
The cost of living goes up and more and more money gets sucked into mortgage and rent payments sucking purchasing power out of the economy. The increasing cost of living, raises the basic minimum wage pricing labour out of international labour markets.
Irving Fisher also looked into the 1929 bust and developed a theory of economic crises called debt-deflation, which attributed the crises to the bursting of a credit bubble.
Irving Fisher looked into debt inflated asset bubbles and realised the huge danger they pose to the whole economy. This knowledge is missing today. The ubiquitous housing boom is a debt inflated asset bubble, with huge amounts of debt spread through the whole economy, when it bursts there is hell to pay.
This was first seen in Japan in 1989, its economy has never recovered.
It was repeated in the US and leveraged up with derivatives leading to 2008.
Ireland and Spain have also wrecked their economies with housing bubbles.
There are housing bubbles around the world, ready to burst and pull that nation into debt deflation.
Milton Freidman, the man that wrecked the world with bad economics.
Skippy September 25, 2016 at 6:20 amMilton Freidman worked at the Chicago School of Economics and was the global ambassador for his dire economics. This dire economics and the University of Chicago were also behind the design of the Euro, no wonder it doesn't work.
"The putative "father of the Euro", economist Robert Mundell is reported to have explained to one of his university of Chicago students, Greg Palast: "the Euro is the easy way in which Congresses and Parliaments can be stripped of all power over monetary and fiscal policy. Bothersome democracy is removed from the economic system" Michael Hudson "Killing the Host"
Their dire economics predicts the Euro-zone economies will converge into a stable equilibrium.
The reality – the economies are diverging and the poorer nations are going under. It's bad. 2008 – How did that happen?
The neoclassical economists didn't have a clue as the Minsky Moment was approaching.
Two people who did see 2008 coming (there aren't many).
Steve Keen – A whole book "Debunking Economics" on this dire neoclassical economics and the problems of not using realistic assumptions on money and debt.
Michael Hudson – Calls it "junk" economics and has written a whole book on the problems of forgetting the world of Classical Economics – Killing the Host.
Naomi Klein "Shock Doctrine" goes into the brutality of the Chicago Boys and Berkeley Mafia in implementing their economic vision. A right wing "Khmer Rouge" that descended on developing nations to wipe away left wing thinking.
It's bad and Milton Freidman was behind it.
Goes a bit deeper than just the Chicago boys imo…
Marginalist economics tends to be characterised primarily by a couple of distinct axioms that operate 'under the surface' to produce its key results. these are simplistically characterise as: the axiom of methodological individualism; the axiom of methodological instrumentalism; and the axiom of methodological equilibration, where models derived from them have ex-ante predictive power.
This is historically Epicurean philosophy, example, Epicurus wrote,
"The magnitude of pleasure reaches its limit in the removal of all pain. When such pleasure is present, so long as it is uninterrupted, there is no pain either of body or of mind or of both together."
Which is a reflection of its materialistic atomism which is basically identical with the marginalist focus on atomistic individuals and makes it an atomistic doctrine. Thorstein Veblen where he wrote in his Why is Economics Not an Evolutionary Science?:
"The hedonistic conception of man is that of a lightning calculator of pleasure and pains, who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area, but leave him intact. He has neither antecedent nor consequent. He is an isolated definitive human datum."
Which in turn is just Epicurean ontology where everything becomes objects and not subjects where Epicurean ethics involves individuals maximising pleasure and minimising pain - or, as the marginalists would put it, maximising utility and minimising disutility - it simply follows from the basic ontological position that is put forward.
Just to put a more modern perspective on it – see: Note that the patient suffering from schizophrenia tends not to answer the questions directed at him but rather responds with complete non-sequiturs.
"In his book, King lays out how economists have tried to establish supposedly disaggregated "microfoundations" with which to rest their macroeconomics upon. The idea here is that Keynesian macroeconomics generally deals with large aggregates of individuals – usually entire national economies – and draws conclusions from these while largely ignoring the actions of individual agents. As King shows in the book, however, the idea that a macro-level analysis requires such microfoundations is itself entirely without foundation. Unfortunately though, since mainstream economists are committed to methodological individualism – that is, they try to explain the world with reference to what they think to be the rules of individual behaviour – they tend to pursue this quest across the board and those who proclaim scepticism about the need for microfoundations can rarely articulate this scepticism as they too are generally wedded to the notion that aggregative behaviour can only be explained with reference to supposedly disaggregated behaviour."
You might also like – Le Bon, Gustave. The Crowd: A Study of the Popular Mind, you can get it free online.
Additionally – The Myth of the Rational Market: Wall Street's Impossible Quest for Predictable Markets – by Justin Fox
Chronicling the rise and fall of the efficient market theory and the century-long making of the modern financial industry, Justin Fox's "The Myth of the Rational Market" is as much an intellectual whodunit as a cultural history of the perils and possibilities of risk. The book brings to life the people and ideas that forged modern finance and investing, from the formative days of Wall Street through the Great Depression and into the financial calamity of today. It's a tale that features professors who made and lost fortunes, battled fiercely over ideas, beat the house in blackjack, wrote bestselling books, and played major roles on the world stage. It's also a tale of Wall Street's evolution, the power of the market to generate wealth and wreak havoc, and free market capitalism's war with itself.
The efficient market hypothesis -- long part of academic folklore but codified in the 1960s at the University of Chicago -- has evolved into a powerful myth. It has been the maker and loser of fortunes, the driver of trillions of dollars, the inspiration for index funds and vast new derivatives markets, and the guidepost for thousands of careers. The theory holds that the market is always right, and that the decisions of millions of rational investors, all acting on information to outsmart one another, always provide the best judge of a stock's value. That myth is crumbling.
Disheveled Marsupial…. Main stream econnomics is an extenuation of much deeper metaphysical and resultant ideological beliefs….
[Sep 22, 2016] Academic Penury Adjunct Faculty as the New Precariat naked capitalism
Notable quotes:
"... the true rate of pay is often around the minimum wage. ..."
"... i was an adjunct professor of urban studies at new york university for 12 years. the entire academic department was staffed by adjuncts and part-time instructors except for the chairman, who was ironically a tenured professor of labor history. ..."
"... Having come up through the academic process and seeing the handwriting on the wall deciding to opt out of trying for an academic career, I think I can comment a bit. ..."
"... First, no one is forcing these folks to be adjuncts. It's their choice. ..."
"... The real issue is one of information and honesty or at least reality over hopeful expectations. When I was an undergrad my professors encouraged me to go to grad school and were pleased when I decided to pursue a Ph.D. They all implied, if not said, that I would be able to then get an academic job. I think they really believed this, but the reality was far different even at that time. By the time I graduated, unemployment in my field was at an all time high. The reality was that only 20-25% of graduates would get "potentially permanent" positions in either academia or research. So, when I finally graduated I posted a letter for the undergraduates informing them of the future in the field. Needless to say the faculty were taken aback, but when they checked they found that my data was correct. ..."
"... Yes, their choice. They can abandon the academic pursuit and choose another career. Most people with advanced degrees do just that. ..."
"... I agree that their are way too many grad students and they become the adjuncts that are desperate for full time jobs. But grad students serve an important purpose as cheap labor, particularly in research universities. ..."
"... What if the point of a review process was to improve teaching methods and get feedback from students about what works and what doesn't? ..."
"... We are looking at the decades long pursuit of making higher education "more like business". The mantra of privatization and that attitude that segments of our society which served the public: schools, universities, hospitals, departments of governments at all levels, etc., would all be better if they were run as businesses has been proven false a million times over. ..."
"... University Boards have, for decades, been stacked with advocates of market based systems which have been imposed on institutions which formerly served their students and the public. Students are no longer viewed as students but as revenue streams. Public funding for higher education has similarly declined as the cult of the marketplace including that institutions serving a public purpose needed to be more self funding. Because forcing them to have more skin in the game would force them to trim the fat and innovate. You know, like Walmart. ..."
"... This is a false hope–especially in higher education. The University, the large corporation, the particular governmental agency, are now beyond internal reform and we all know this in our bones. ..."
"... Somehow we must individually and collectively find the courage and creativity to move, maneuver and survive outside of these institutions–trading in the fear and anxiety of trying to succeed in dying institutions for the fear and anxiety which comes with creating new institutions. ..."
Sep 22, 2016 | www.nakedcapitalism.com
"The work is there," Wangerin tells me, "they just don't want to pay."
A one-time adjunct and contract lecturer myself, I decide to look into the matter more deeply. Are Wangerin's contentions particular to her own experience or are they more widely shared across the United States? And if they are, what does this mean for higher education?
Information, as it turns out, isn't hard to come by. I write one message to a long-time Twitter contact who also happens to be a contingent faculty member and my inbox explodes. As I sort through my e-mails a picture of higher education begins to emerge and, far removed from the conventional image of pipe-smoking professors in book-lined studies, it is largely one of exploitation and control.
"I am currently teaching one class, and in all honesty, unemployment benefits pay double that," a community college lecturer who wished to remain anonymous told me, "I would be better off not teaching at all."
An art professor from Ohio writes in to tell me that she's just thrown in the towel after more than a decade of work: "My class was canceled two weeks before classes start and I decided to get my Alternative Educator License and teach at the high school level."
I hear of a lecturer whose courses were allocated to someone else after he spoke out about a contract clause that demanded access to his DNA; about an adjunct who could not afford to pay property taxes on the family home after 20 years of teaching; and of someone who was fired after a student complaint that he was a "black racist." "Whatever that means," the adjunct reporting the incident grumbles.
... ... ...
"Education claims to ameliorate class stratification, but it actually reinforces it," says Alex Kudera, who has taught college writing and literature off the tenure track for over twenty years.
It's not hard to see what he means. The average adjunct lecturer receives only $2700 per course taught. While that amount is sometimes portrayed as easy money, in addition to time spent in class lecturers must also prepare course content, create exams and assignments, grade, advise students, and, of course, travel from campus to campus. When academics are employed on a casual basis, such activity is not compensated, meaning that the true rate of pay is often around the minimum wage.
Jim Haygood , September 21, 2016 at 6:36 amNorb , September 21, 2016 at 9:02 am'Academics may enjoy more intellectual freedom than many workers, but they also have a duty that does not generally fall on others: to research and to publish the results of that research regardless of how unpopular it may be.'
Proposal for a joint Econ/Law paper
Thesis : US academia is a Racketeer Influenced and Corrupt Organization
Synopsis : using de facto antitrust immunity garnered by its politically connected administrators, academia relentlessly hikes tuitions as well as its intake of governmental funding.
Via false and deceptive marketing, students are promised nonexistent benefits from earning a degree, then subjected to a loan sharking racket which indebts them for life, at inflated cartelized prices, without informing them of the non-dischargeability of those debts.
Systemic marketing fraud is further enabled by glossy alumni magazines touting the achievements of tenured faculty, without divulging that a majority of classes are taught by adjuncts.
Recommendations : RICO the entire industry; consolidate it; convict the managers; reopen it under new leadership (former politicians banned for life), under new legislation prohibiting marketing fraud and loan sharking.
ProNewerDeal , September 21, 2016 at 6:48 amSeems like the logical solution and the only way to avoid actual collapse of the institutions. This higher education scam can only continue until parental funds are tapped out, which is this current generation of collage age families. New entrants into the workforce, on whole, will not be able to save enough, or have job security to even consider college for their children.
The social contract that the elite are forging ahead with is the bond and willingness to be scammed. It is amazing to see their disbelieving expressions when any form of resistance is encountered. The rational response would be to ease up on the exploitation, but doesn't seem to be happening. Other forces will have to be brought to bear.
diptherio , September 21, 2016 at 11:42 am"non-tenure track teaching staff – commonly referred to as adjuncts and contingent faculty – now make up approximately 70% of all teaching staff in American higher education. This means that roughly three out of every four courses a student takes are taught by someone without job security who is working on minimal pay."
Is this actually true? If say some adjuncts are full-time other job & teach only 1 course, some adjuncts are perma-temp FT & teach ~4 courses, & tenure-track teach ~4 courses; then you could have a situation where say
1 portion of teachers that are adjuncts. The article mentioned 70% of ANY teachers teaching at least 1 course in a given semester at Universities are adjuncts2 portion of courses taught that are taught by adjuncts: A lower number, say 40% of the courses taught at Univs are taught by adjuncts, due to having tenure-track Profs teaching ~4 courses & adjuncts teaching ~1 course each.
The author seems to make a logic error assuming that metric #2 is the same as #1. It may happen to be, but doesn't necessarily need to be.
What actually is the metric #2 number?
I have empathy for the perma-temp FT adjuncts, IMHO it is no different than perma-temp FT workers in other occupations, despite the prestige of Unviersities perhaps somewhat masking its practice.
MooCows , September 21, 2016 at 1:18 pmYou're right that we don't have enough info to know #2 from the article, but I also don't know that you've got it quite right.
If full time instructors are half-and-half tenure/tenure-track and adjunct (for instance), that would mean that 30% of profs are tenure and 30% are full time adjuncts. That would leave another 40% of the total that are less-than-full time adjuncts. So you'd have a majority of classes being taught by adjuncts. But, of course, we need more info to figure it out for sure, but it seems more likely to me, based on my experience (~ half my classes were taught by adjuncts during my college days, which were in the late nineties-early aughties) that adjuncts represent a firm majority of both personnel and classroom hours.
upstater , September 21, 2016 at 8:02 amI'm not an adjunct but I'm a non-tenure track faculty member in the Electrical and Computer Engineering department at a very large university. I teach 8 technical courses a year (3/3/2) while the tenured faculty teach 3 or 4 (2/1/0). We also have adjuncts who typically teach one course a semester.
I bring this up because it could be that, from the author's perspective, I still fall into the adjunct category because my contract must be renewed yearly and the administration can choose not to renew without cause. I would say that non-tenure track faculty are responsible for about 50% of the courses in this department but, being in engineering, our department is small relative to something in the College of Liberal Arts.
PlutoniumKun , September 21, 2016 at 8:03 amThis fits in, sort of, to this posting the dean of the B-school, with a $500K salary, a supposed expert on "risk management" at Syracuse University, busted in a prostitution sting:
SU dean arrested in prostitution bust told students: 'Nothing is worth your integrity'
I guess he'll have to hire out at Goldman - aren't they the ones with the running tab at a NYC escort service?
Plenty of adjuncts at Syracuse University, where the tuition is $55K/year.
Anon , September 21, 2016 at 1:25 pmMore of a question here, as I see the author teaches in Ireland. If Dr. Fuller comes below the line I'd be interested to hear her thoughts on whether the same process is infecting Irish and other European universities. I know if at least one college administrator in Itelamd who loudly proclaims the superiority if the US system. One can only wonder why
tony , September 21, 2016 at 9:52 amSuperior in what way? Science? Technical research? Economic research?
For the US undergad, adjunct instructors is the norm. (My local community college has 70% adjunct instructors.). My local University has slightly less, but uses more experienced gad students to guide less experienced grad students. In any event, the product/experience has been cheapened.
Robert Dannin , September 21, 2016 at 10:10 amNearly half of the nation's undergraduates show almost no gains in learning in their first two years of college, in large part because colleges don't make academics a priority, a new report shows.
Report: First two years of college show small gains
Morris Berman has pointed out that US college has become a social rather than a learning experience. I suspect this cultural shift has made academics themselves replaceable. Does it really matter who babysits these four-year party retreats?
SpringTexan , September 21, 2016 at 10:46 ami was an adjunct professor of urban studies at new york university for 12 years. the entire academic department was staffed by adjuncts and part-time instructors except for the chairman, who was ironically a tenured professor of labor history.
my classes were always bursting to seams, we studied contemporary issues and were focusing on the sub-prime crisis back in 1995. one class toward the end of my lecture, i wrote the math for my salary on the blackboard. it came down to twenty-five cents per student per class, a tiny fraction of their per semester tuition. a student from the business school remarked that i could probably make more panhandling the same hours outside in washington square park. everyone laughed. by the time i got back to the department less than 20 minutes later, the chair invited me into his office. "don't talk about salary issues with your students. GOT IT!" someone had ratted me out. guess i spoiled their day. easier to discuss poor people in the outer boroughs than someone on your doorstep. in the following years i spent my spare time organizing the first adjunct faculty union. door-to-door, button-holing adjuncts on the sidewalk or in the hallways. the less experience they had, the more reluctant they were to get involved for fear of ruining their chances for a F/T tenure track position. they wouldn't listen, when i explained, once an adjunct, always an adjunct. after five more years, they began to see the light and wanted union. then the uaw swooped in, demanding my lists and fealty. they knew nothing about activism on an urban campus and didn't want to listen. when i tried to participate in meetings, i was accused of disrespecting the regional organizer who commuted to the union hqtrs. from her home in litchfield, ct. at one meeting they told us who our "friends" were on campus. yep, heading the list was my dept chair, the good-old red-diaper baby himself. finally, there was a vote, the union won a shitty package that deliberately excluded any new hires. end of the semester the dept chair sends me an email, you're fired! meet the new boss, same as the old boss.
Uahsenaa , September 21, 2016 at 11:07 amThanks. Wish every adjunct would teach this if this is appropriate to the class. (and mention it in passing if it's not)
ProNewerDeal , September 21, 2016 at 1:15 pmI do this with my students as well, noting that about 10% of their tuition goes to me, while the rest goes to the University.
I also like to point out that they pay six six times the tuition compared to what the people running the university did, and that's before you take into consideration that they didn't have to pay an extra 1K in "fees."
If they simply cut me a check for the percentage of their tuition that goes to the class, I'd make upwards of 300K a year.
flora , September 21, 2016 at 10:20 amRobert,
Thanks for sharing your story. I am sorry to hear that you were fired, apparently for exercising you human & Constitutional right to labor-organize.
The fact that your boss was "a labor history Prof" is worst-tier hypocrisy & irony. Reminds me of Constitutional Law Prof 0bama, who continually defecates on the Constitution with his assasination of US citizens overseas program, NSA bulk spying, etc.
I hope you found an alternative job that had better working conditions & a fairer boss.
NoBrick , September 21, 2016 at 10:26 amThis essay is spot-on in every respect. Thanks for posting.
Benedict@Large , September 21, 2016 at 10:32 am"Tin soldiers and Nixon coming, We're finally on our own. This summer I hear the drumming, Four dead in Ohio." CSNY
It seems the "social unrest" stemmed from the collective consciousness permitted by
unrestrained objectivity. The master-client relationship was overwhelmed by repeated
gestures that breached the ordained demeandor of prostrate obedience.The balance between confusion and illumination (consciousness) must be modified!
After all, successful marketing/propaganda begins where consciousness endsbeans , September 21, 2016 at 1:41 pmI was fortunate enough (a long time ago) to attend an Ivy League university, with my brother attending the same two class years ahead of me. I became frustrated at one point, finding my courses to always be a number of degrees more abstract in what they were teaching than I had anticipated, and sought my brother's advice. "Brown," he said, "doesn't make engineers; they make graduate students." As I would later come to say, we were not taught to be mathematicians or chemists or historian; we were taught to think like them. I can't tell you how valuable that approach to education has turn out to be for me, both professionally and personally, as I've made my way through life. These are things you don't unlearn.
I think about this whenever I read articles (like this one) about the direction of education today, especially but not limited to the college level. These experiences are being lost as we turn our schools into trade schools and our students into mere mechanics; OK at any situation for which they have been specifically trained, but kind of useless for those when that has not been the case. Our elites tell us that this is what the market wants, but I never see any of them actually asking the students, and when I check back at the Ivy, I find that the elites still teach their own the way I was taught. The answer is clear. we are deliberately being divided by education into a world where the children of the elites, whether they have earned it or not, will find no intellectual competition from the classes below them. The Poors really will be stupid, but it will be intentional, and built in to the Nature and Nurture the elites have allowed them to have.
Punxsutawney , September 21, 2016 at 10:33 amExcellent comment, Benedict. The art of teaching people how to think instead of what to think – the educator who can do this is invaluable, now more than ever.
Bitman , September 21, 2016 at 10:59 amI might add as well, that many of these adjuncts came out of industry, having lost well paying jobs as operations were moved overseas.
Now working part-time for less than 1/2 of what they were making, if they are lucky!
David , September 21, 2016 at 11:51 amFew points to add to this excellent article:
1. The shift needed to understand the modern University is to think of it not as an institution of higher learning, but as a processing plant – it produces "students" and "graduates, and adjuncts are the staff assigned the role of processors. The model is industrial. Elite institutions of all sorts have conspired with the University to require professional credentials for more and more of the occupations they staff, in order to assure large flows of people pass through. This also means that larger populations are drawn into the debt system and thereby depoliticized.
2. The most important role an adjunct can play is to bring the issues associated with the industrializing of the university into the classroom. Make students aware of the labor situation, and what they're buying. Explain to them that adjuncts, like nurses in hospitals, are expected to overperform, and that their overperformance is what props up a diseased, corrupt institution. It's very, very important for adjuncts not to get caught up in the official institutional morality that guilts them into overperformance (hospitals are probably the leader in this respect). How much overperformance you indulge in is a personal decision, in my view, but it should never be taken on uncritically.
My own individualized response to this system has been to take on as many classes as I humanly can, so that a) my wages actually compare to those of my tenured colleagues, and b) to demonstrate to students by so doing that the University does not give a shit about their education. No one pays attention to how many courses I teach or how prepared I am to teach them. I've taught hundreds of courses (no exaggeration) and no one ever supervises me or even checks in (It's happened twice in 25 years) .Fact is, I happen to be prepared, but I stress that that is not at all a concern of the University. I've been asked to teach courses in subjects where I have absolutely no expertise, but since I'm teaching undergrads, know how to read, construct a syllabus, and make compelling arguments, I get by, sometimes even comfortably. Many get by this way. But it shouldn't be confused with providing student a good education. And I'm getting too old to maintain the pace, as we all do.
According to the evaluation numbers I'm somehow still providing students with an above-average experience in their courses, but I do so full in the knowledge that I WILL NOT overperform without making the students aware that that is what unfairly is expected of me, even though I'm given none of the resources tenured faculty are given. I cancel classes sometimes, for the express purpose of the fact I need a break (I don;t get sabbaticals). They almost invariably understand. They also are sometimes infuriated that this state of affairs persists, though like adjuncts they fear making waves.
3. Tenured faculty are the enemy (unfortunately) or PT faculty. Eevn the labor activists among them have different class interests than PT faculty at most large universities. Full-time faculty are dominated by the administration and feel themselves to be under siege, but one response to this is that they dominate PT faculty as a means of freeing themselves as much as possible from the industrial-style teaching of large University life. As a rule, they are not willing to equitably share the burdens PT faculty face, and there's no getting around that.
reslez , September 21, 2016 at 2:08 pmHaving come up through the academic process and seeing the handwriting on the wall deciding to opt out of trying for an academic career, I think I can comment a bit.
First, no one is forcing these folks to be adjuncts. It's their choice.
The real issue is one of information and honesty or at least reality over hopeful expectations. When I was an undergrad my professors encouraged me to go to grad school and were pleased when I decided to pursue a Ph.D. They all implied, if not said, that I would be able to then get an academic job. I think they really believed this, but the reality was far different even at that time. By the time I graduated, unemployment in my field was at an all time high. The reality was that only 20-25% of graduates would get "potentially permanent" positions in either academia or research. So, when I finally graduated I posted a letter for the undergraduates informing them of the future in the field. Needless to say the faculty were taken aback, but when they checked they found that my data was correct.
Do these adjuncts believe that a "potentially permanent" position awaits them if they keep going on their present path? Are they being told that by the universities? If so, then they are being deceived. Or, is this just a case of blind optimism and not wanting to give up their dream? In this case, it goes back to being their choice. Or do they want a career as a serial adjunct, and just want the job to be better? The this is just typical employer/employee bargaining and back to their choice.
So, they can agitate for more money, security, authority, etc. which is what they appear to be doing, or they can leave the field for one that is more lucrative, which is what the vast majority of us have done.
David , September 21, 2016 at 2:44 pmIt's their "choice" to be an adjunct. Really? If there was a true choice wouldn't the vast majority "choose" to be full-time faculty with benefits and equivalent pay? Free marketeers keep using the word "choice", but the choice they offer is usually one where you get to "choose" between homelessness and and marginal survival at $11 an hour. A mighty impressive choice!
Do they "believe" they're going to get a full-time position, because realistic career expectations wouldn't help universities get cheap grad student labor?
Or maybe they end up in grad school like a lot of people I know - because the job market was so terrible that the idea of staying in school for another couple of years was their best "choice" at that point in time? Since the media constantly tells us education is always good, and those who don't have it will fall behind, the idea that more education isn't always better comes as a foreign idea to a lot of 22 year olds. An assembly line of cheap grad student labor then gets funneled into adjunct teaching.
diptherio , September 21, 2016 at 11:59 amYes, their choice. They can abandon the academic pursuit and choose another career. Most people with advanced degrees do just that.
I agree that their are way too many grad students and they become the adjuncts that are desperate for full time jobs. But grad students serve an important purpose as cheap labor, particularly in research universities. Why would they want to give that up? Again, this is an issue of information, which is why I posted my letter. If undergrads knew the actual prospects for grad students after they graduate perhaps they would choose a different path. But, grad school and academia are extremely attractive pursuits for many people so they readily put up with all the impediments in the hope of making it as a professor. The reality is that academia has become an avocation, a hobby, rather than a vocation for most people.
KYrocky , September 21, 2016 at 1:15 pmHere's a thought: maybe if our education system weren't built around fear, we'd be able to present a more united front.
Consider: instructors are tasked with judging students and, if they grade on the curve, punishing some of them regardless of their skill or effort and often enough this sorting is accomplished through BS methods like high-stakes, time-limited testing. So yeah, sometimes students get resentful of the instructors who get seen as the enemy. And so, they take it out be leaving a bad review.
The reviews, just like the tests and grading systems, are being used to sort and punish profs. Bad reviews from students can be devastating financially and career-wise, as detailed in the article. So profs get scared and therefore fail to ask much of the students, so as to come off as a "nice guy/gal." The students live in fear and don't learn, and the teachers live in fear and don't teach. But what if we did things differently?
What if the point of a review process was to improve teaching methods and get feedback from students about what works and what doesn't? What if reviews were done in a way aimed at supporting instructors, rather than censuring them? And what if students were treated the same way. What if, instead of a reprimand and a shaming, students were given support and encouragement (more like Evergreen and Sarah Lawrence)?
Maybe then we'd stop being afraid of each other and be able to support eachother as we demand an answer to the question of how it is that tuitions keep going up while faculty pay keeps going down. Demand in no uncertain terms that the top Admins take major pay cuts or step down so their secretary can take over for them (with a hefty pay raise, of course, but something reasonable ).
That's my two sense.
templar555510 , September 21, 2016 at 3:02 pmWe are looking at the decades long pursuit of making higher education "more like business". The mantra of privatization and that attitude that segments of our society which served the public: schools, universities, hospitals, departments of governments at all levels, etc., would all be better if they were run as businesses has been proven false a million times over.
University Boards have, for decades, been stacked with advocates of market based systems which have been imposed on institutions which formerly served their students and the public. Students are no longer viewed as students but as revenue streams. Public funding for higher education has similarly declined as the cult of the marketplace including that institutions serving a public purpose needed to be more self funding. Because forcing them to have more skin in the game would force them to trim the fat and innovate. You know, like Walmart.
For decades, political contributions bought politicians who in turn mandated that federal student loans had to be administered by banks, thereby siphoning off billions, if not tens of billions, of dollars that could have otherwise gone to students and universities. The politicians also permit these banks to gouge students on interest rates, to pass laws making it harder or impossible to discharge loan debt through bankruptcy, or to refinance their loans. None of these abuses of students served a public interest. All of these abuses exemplify our current model for how to apply business practices to higher education.
In the business sense, the only concern a University has for its product is its relationship to the revenue stream. A little like the charter school model. Universities have a need for instructors, and in applying the methods of successful business as it is defined today they will seek to fill that labor need at the absolute lowest cost achievable. Those who long for the past are out of luck; universities are never going back. Faculty pay will keep going down as long there are new warm bodies to take the place of those who don't like it, and adjuncts will be squeezed for all that can be wrung from them.
Adjuncts are nameless, faceless, and entirely forgettable as far the University administration is concerned. The administration will blow as much smoke up adjunct's asses as needed to keep their slots filled. Adjuncts are in an abusive relationship, whether they understand it or not. The abuse is never going to end, as the obstacles are not just the administration and the university Board, but the politicians, the big donors, and the attitudes of our society at large.
Jim , September 21, 2016 at 3:01 pmWhat you have so precisely described is yet another Ponzi scheme. Of course it is because that is what post capitalist Capitalism is .
Think of it like this : there is approximately 7 billion of us living on planet Earth and between us we can and do produce enough food, clothing and could produce enough housing ( that's another matter ) for all 7 billion.
So the problem for the capitalist is how do I create the illusion of scarcity upon which Capitalism works. Answer : grab by any and every means possible – legal and illegal , it's all the same thing – the lions share of what already exists ; in other words steal it . That's the 1 % .
And then con the 99% into believing resources are scarce etc, etc and bending to the will of the 1 %.
Most of us continue to hope that we will eventually find a secure/meaningful position somewhere in one of the major institutions that make-up our society.
This is a false hope–especially in higher education. The University, the large corporation, the particular governmental agency, are now beyond internal reform and we all know this in our bones.
Somehow we must individually and collectively find the courage and creativity to move, maneuver and survive outside of these institutions–trading in the fear and anxiety of trying to succeed in dying institutions for the fear and anxiety which comes with creating new institutions.
[Sep 18, 2016] Robert Nisbet's Conservatism
Notable quotes:
"... Centralization, egalitarianism, and coercive multiculturalism were not the right answers, Nisbet would reiterate throughout his career. ..."
"... Localism, kinship, and liberty make a society secure. Leviathan smothers the human spirit through sheer size, regulation, bureaucracy, and fiat. ..."
Sep 18, 2016 | www.theamericanconservative.com
In one of our first "adult" conversations, when I asked earnestly about equality, Nisbet insisted on making a bright-line distinction between what was possible, equal opportunity and equality before the law, and what was not, a coercive dream of managed, equal outcomes.
During the McGovern years, contesting equality's self-evident virtues was shocking coming from a senior professor and established social critic. But as I listened to Nisbet's faultless reasoning, that was the moment, I realized a good while later, I became a "conservative" in mind.
The growth of national government during the 1960s through massive military and administrative expansion, Nisbet feared, prefigured "the centralized state of the masses," empowered by the "crumbling of the pre-democratic strata of values and institutions" that "alone made political freedom possible." Worse, he thought, a growing number of clients might welcome its power and largess at the expense of family and freedom.
Centralization, egalitarianism, and coercive multiculturalism were not the right answers, Nisbet would reiterate throughout his career. What induced social harmony and individual fulfillment, he observed-long before Robert Putnam wrote Bowling Alone (2000)-were communities of churches and schools, volunteer groups, families, and tribes. Localism, kinship, and liberty make a society secure. Leviathan smothers the human spirit through sheer size, regulation, bureaucracy, and fiat.
If unobtainable forms of equality become cornerstones of national policy, he argued, the onslaught on institutions to try to achieve the impossible would be unlimited. Intrusive state power promising to cure inequality would let government take on powers formerly reserved to other authorities. Stripped of religion, the public was imbibing liberal elixirs that rendered individuals blameless, turning them into victims of a society that "glistens with corruption," he once said to me. Guilt and wishful thinking quickened the politics of equality.
... ... ...
The success of his 1975 book, Twilight of Authority , was rather a surprise. The writing, as with much of Nisbet, ranges from dense and stilted to lucid and aphoristic. It is not an easy book. But its discursive, prescient, panoramic indictment of shifting authorities found a distinguished audience, and it drew him further into debate over socio-cultural policies.
... ... ...
Nisbet had no patience for sloth. His youthful circumstances had been Depression rough, and he escaped a troubled household. With studied poise, he was unfailingly civil, with measured, formal manners, and considerable sangfroid.
He thought that boredom was civilization's number-one self-poisoner. Wealth and leisure could undermine the collective good sense of the masses, he felt, stimulating euphoria at a cost. Efforts to offset boredom-through video games, television, sports, pornography, or drugs-could be fatal to community. Facebook's artificial communities and the politics of Twitter, he might say, give the illusion of social cement while causing the real thing to crack.
Much of what Nisbet foresaw decades ago has come to be. Americans surf big-screen HDTV channels, seeking relief and distraction. Hoping politics will make things right, the nation follows the plot like a serial-some on Fox, others on CNN-accepting politics as a televised reality show.
Gilbert T. Sewall, director of the American Textbook Council, is co-author of The USA Since 1945: After Hiroshima and editor of The Eighties: A Reader .
[Sep 16, 2016] ITT Tech Is Officially Closing
Sep 16, 2016 | news.slashdot.org
(gizmodo.com) 419 Posted by manishs on Tuesday September 06, 2016 @12:40PM from the goodbye dept. Reader Joe_Dragon shares a Gizmodo report: ITT Technical Institute is officially closing all of its campuses following federal sanctions imposed against the company. The for-profit college announced the changes in a statement: "It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service . With what we believe is a complete disregard by the U.S. Department of Education for due process to the company, hundreds of thousands of current students and alumni and more than 8,000 employees will be negatively affected."
ITT Tech announced it was closing all of its campuses just one week after it stopped enrolling students following a federal crackdown on for-profit colleges. ITT Tech and other higher education companies like it have been widely criticized for accepting billions of dollars in government grants and loans while failing to provide adequate job training for its students. Last year, ITT Tech received an estimated $580 million in federal money (aka taxpayer dollars), according to the Department of Education.
[Sep 16, 2016] University of California's Outsourcing Is Wrong, Says US Lawmaker
Sep 16, 2016 | news.slashdot.org
(computerworld.com) 338 Posted by manishs on Friday September 09, 2016 @01:14PM from the big-questions dept. Earlier this week, University of California hired India-based IT company HCL to outsource some of its work offshore . As part of the announcement, it announced that it was laying off 17 percent of UCSF's total IT staff. The U.S. lawmaker, Rep. Zoe Lofgren (D-Calif) and the IEEE-USA find the outsourcing job "wrong." dcblogs writes: A decision by the University of California to lay off IT employees and send their jobs overseas is under fire from U.S. Rep. Zoe Lofgren (D-Calif) and the IEEE-USA. "How are they [the university] going to tell students to go into STEM fields when they are doing as much as they can to do a number on the engineers in their employment?" said U.S. Rep. Zoe Lofgren (D-Calif). Peter Eckstein, the president of the IEEE-USA, said what the university is doing "is just one more sad example of corporations, a major university system in this case, importing non-Americans to eliminate American IT jobs." The university recently informed about 80 IT workers at its San Francisco campus, including contract employees and vendor contractors, that it hired India-based HCL, under a $50 million contract, to manage infrastructure and networking-related services. The affected employees will leave their jobs in February, after they train their contractor replacements.dcblogs writes from a report via Computerworld: The University of California is laying off a group of IT workers at its San Francisco campus as part of a plan to move work offshore. Laying off IT workers as part of a shift to offshore is somewhere between rare and unheard-of in the public sector. The layoffs will happen at the end of February, but before the final day arrives the IT employees expect to train foreign replacements from India-based IT services firm HCL. The firm is working under a university contract valued at $50 million over five years. This layoff affects 17% of UCSF's total IT staff, broken down this way: 49 IT permanent employees will lose their jobs, along with 12 contract employees and 18 vendor contractors. This number also includes 18 vacant IT positions that won't be filled, according to the university. Governments and publicly supported institutions, such as UC, have contracted with offshore outsourcers, but usually it's for new IT work or to supplement an existing project. The HCL contract with UCSF can be used by other UC campuses, which means the layoffs may expand across its 10 campuses. HCL is a top user of H-1B visa workers. University of California Hires India-Based IT Outsourcer, Lays Off Tech Workers (computerworld.com) 618
Posted by BeauHD on Wednesday September 07, 2016 @11:30PM from the outsourced dept.
[Sep 15, 2016] 15 Facts About US Poverty the Government Doesn't Want You to Know
Notable quotes:
"... This first appeared in The Daily Signal here . ..."
Sep 15, 2016 | nationalinterest.org
by Robert Rector Rachel Sheffield
September 14, 2016 | The National Interest Blog
On Tuesday, the Census Bureau released its annual poverty report declaring that 43.1 million Americans lived in poverty in 2015.
We should be concerned about any American living in real material hardship, but much of what the Census reports about poverty is misleading.
Here are 15 facts about poverty in America that may surprise you. (All statistics are taken from U.S. government surveys.)
- Poor households routinely report spending $2.40 for every $1 of income the Census says they have. - The average poor American lives in a house or apartment that is in good repair and has more living space than the average nonpoor person in France, Germany, or England. - Eighty-five percent of poor households have air conditioning. - Nearly three-fourths of poor households have a car or truck, and 31 percent have two or more cars or trucks. - Nearly two-thirds of poor households have cable or satellite TV. - Half have a personal computer; 43 percent have internet access. - Two-thirds have at least one DVD player - More than half of poor families with children have a video game system, such as an Xbox or PlayStation. - One-third have a wide-screen plasma or LCD TV.(The above data on electronic appliances owned by poor households come from a 2009 government survey so the ownership rates among the poor today are most likely higher.)
Poverty and Hunger:
Activist groups spread alarming stories about widespread hunger in the nation, but in reality, most of the poor do not experience hunger or food shortages. The U.S. Department of Agriculture collects data on these topics in its household food security survey. For 2009, the survey showed:
- Only 4 percent of poor parents reported that their children were hungry even once during the prior year because they could not afford food. - Some 18 percent of poor adults reported they were hungry even once in the prior year due to lack of money for food.Poverty and Housing
The following are facts about the housing conditions of the poor.
- Poverty and homelessness are sometimes confused. Over the course of a year, only 4 percent of poor persons become homeless (usually a temporary condition). - Only 9.5 percent of the poor live in mobile homes or trailers; the rest live in apartments or houses. - Forty percent of the poor own their own homes, typically, a three-bedroom house with one-and-a-half baths that is in good repair.Facts About Extreme Poverty
- The left claims that one in 25 families with children live in " extreme poverty " on less than $2 per person per day. Government surveys of self-reported spending by families show the actual number is one in 4,469, not one in 25. The typical family allegedly in "extreme poverty" reports spending $25 for every $1 of income the left claims they have.
In Calculating Poverty, Census Ignores the Almost Entire Welfare State:
Why does the Census identify so many individuals as "poor" who do not appear to be poor in any normal sense of the term? The answer lies in the misleading way the Census measures "poverty." The Census defines a family as poor if its income falls below a specified income threshold. (For example, the poverty threshold for a family of four in 2015 was $24,036.) But in counting "income," the Census excludes nearly all welfare benefits.
In 2014, government spent over $1 trillion on means-tested welfare for poor and low income people. (This figure does not include Social Security or Medicare.) Welfare spending on cash, food, and housing was $342 billion.
The cash, food, and housing spending alone was 150 percent of the amount needed to eliminate all poverty in the U.S. But the Census ignored more than four-fifths of these benefits for purposes of measuring poverty. Effectively, the Census counts poverty in the U.S. by ignoring almost the entire welfare state.
Poverty and Self-Sufficiency
Do the higher living standards of families receiving welfare mean the welfare state is successful ? The answer is no. The real aim of welfare should be to make families self-sufficient: capable of supporting themselves above the poverty income threshold without reliance on government welfare aid.
Despite having spent over $25 trillion on means-tested welfare since the beginning of the War on Poverty under President Lyndon Johnson, many Americans are less capable of self-sufficiency today than when the War on Poverty began.
The pathways to self-sufficiency are work and marriage. We should reform the welfare state to promote these. Able-bodied recipients should be required to work or prepare for work as a condition of getting aid. Penalties against marriage in welfare programs should be removed.
Let's make welfare a hand-up, not a handout.
This first appeared in The Daily Signal here .
[Sep 14, 2016] Yes, Donald Trump is wrong about unemployment. But he's not the only one
Spirited defense of the establishment from one of financial oligarchy members. " The economy overall is doing just fine." Does this include QE? If the Fed is pouring billions of new money into the economy, how accurate is it to say that the economy is doing just fine?
Notable quotes:
"... "That was a number that was devised, statistically devised, to make politicians - and in particular, presidents - look good. And I wouldn't be getting the kind of massive crowds that I'm getting if the number was a real number." ..."
"... In the 1950s and 1960s, for instance, organized labor was fairly convinced that the government was purposely underestimating inflation and the cost of living to keep Social Security payments low and wages from rising. George Meany, the powerful head of the American Federation of Labor at the time, claimed that the Bureau of Labor Statistics, which compiled both employment and inflation numbers, had "become identified with an effort to freeze wages and is not longer a free agency of statistical research." ..."
"... Employment figures are sometimes seen as equally suspect. Jack Welch, the once-legendary former CEO of GE, blithely accused the Obama administration of manipulating the final employment report before the 2012 election to make the economic recovery look better than it was. "Unbelievable jobs numbers … these Chicago guys will do anything … can't debate so change numbers," he tweeted ..."
"... His arguments were later fleshed out by New York Post columnist John Crudele , who went on to charge the Census Bureau (which works with BLS to create the samples for the unemployment rate) with faking and fabricating the numbers to help Obama win reelection. ..."
"... The chairman of the Gallup organization, Jim Clifton, sees so many flaws with the way unemployment is measured that he has called the official rate a "Big Lie." In the Democratic presidential campaign, Bernie Sanders has also weighed in, saying the real unemployment rate is at best above 10 percent. ..."
"... What a useless article. The author explains precisely nothing about what the official statistics do and do not measure, what they miss and what they capture. ..."
"... I had the same impression as well. Notice he does not mention that the Gallop number is over 10% and is based on their polling data. ..."
"... But never mentioned that Reagan changed how Unemployment was figured in the early 80's. He included all people in the military service, as employed. Before that, they was counted neither way. He also intentionally left out that when Obama, had the unemployed numbers dropped one month before the election, from 8.1% to 7.8% --because it was believed that no one could be reelected if it was above 8%. ..."
"... U6 is 9.8% for March 2016. We still have 94 million unemployed and you want to say its 5 % what journalistic malpractice. ..."
"... Trump has emphasized that he is looking at the percent of the population that is participating in the workforce - and that this participation rate is currently at historical lows -- and Trump has been clear that his approach to paying down the national debt is based on getting the participation rates back to historical levels ..."
"... "The government can't lie about a hundred billion dollars of Social Security money stolen for the Clinton 'balanced budget', that would be a crime against the citizens, they would revolt. John, come one now. " ..."
"... I didn't say it first, Senator Ernest Hollings did, on the Senate floor. ..."
"... And here is how they did it: http://www.craigsteiner.us/articles/16 ..."
"... There is plenty of evidence the figures are cooked, folks, enough to fill a book: Atlas Shouts. Don't believe trash like this article claims. GDP, unemployment and inflation are all manipulated numbers, as Campbell's Law predicts. ..."
"... I can't believe the Washington Post prints propaganda like this. ..."
"... I do remember when the officially-announced unemployment rate stopped including those who were no longer looking for work. That *was* a significant shift, and there's no doubt it made politicians (Reagan, I think it was) look better; of course, no President since then has reversed it, as it would instantly make themselves look worse. ..."
"... Working one hour a week, at minimum wage, is 'employed', according to the government. No wonder unemployment is at 5%. ..."
"... Add in people who are working, but want and need full time jobs, add in people who have dropped out of the labor market and/or retired earlier than they wanted to, and unemployment is at least 10%. Ten seconds on Google will show you that. ..."
"... The writer should be sacked for taking a very serious issue and turning it into a piece of non-informative fluff. Bad mouthing Trump and Sanders is the same as endorsing Hilly. ..."
Apr 08, 2016 | The Washington Post
Yes, Donald Trump is wrong about unemployment. But he's not the only one. - The Washington PostListen to President Obama, and you'll hear that job growth is stronger than at any point in the past 20 years, and - as he said in his final State of the Union address - "anyone claiming that America's economy is in decline is peddling fiction."
Listen to Donald Trump and you'll hear something completely different. The billionaire Republican candidate for president told The Washington Post last week that the economy is one big Federal Reserve bubble waiting to burst, and that as for job growth, "we're not at 5 percent unemployment. We're at a number that's probably into the 20s if you look at the real number." Not only that, Trump said, but the numbers are juiced: "That was a number that was devised, statistically devised, to make politicians - and in particular, presidents - look good. And I wouldn't be getting the kind of massive crowds that I'm getting if the number was a real number."
It's easy enough to dismiss - as a phalanx of economists and analysts did - Trump's claims as yet another one of his all-too-frequent campaign lines that have little to do with reality. But with this one, at least, Trump is tapping into a deep and mostly overlooked well of popular suspicion of government numbers and a deeply held belief that what "we the people" are told about the economy by the government is lies, damn lies and statistics designed to benefit the elite at the expense of the working class. The stubborn persistence of these beliefs should be a reminder that just because the United States is doing well in general, that doesn't mean everyone in the country is. It's also a warning to experts and policymakers that in the real world, there is no "the economy," there are many, and generalizations have a way of glossing over some very rough patches.
Since the mid-20th century, when the U.S. government began keeping and compiling our modern suite of economic numbers, there has been constant skepticism of the reports, coming from different corners depending on economic trends and the broader political climate. In the 1950s and 1960s, for instance, organized labor was fairly convinced that the government was purposely underestimating inflation and the cost of living to keep Social Security payments low and wages from rising. George Meany, the powerful head of the American Federation of Labor at the time, claimed that the Bureau of Labor Statistics, which compiled both employment and inflation numbers, had "become identified with an effort to freeze wages and is not longer a free agency of statistical research."
Over the decades, those views hardened. Throughout the 1970s, as workers struggled with unemployment and stagflation, the government continually tweaked its formulas for measuring prices. By and large, these changes and new formulas were designed to make the figures more accurate in a fast-changing world. But for those who were already convinced the government was trying to paint a deliberately false picture, the tweaks and innovations were interpreted as a devious way to avoid spending money to help the ailing middle class, not trying to measure what was actually happening to design policies to help address it. The commissioner of BLS at the time, Janet Norwood, dismissed those concerns in testimony to Congress in the late 1970s, saying that when people don't get the number they want, "they feel there must be something wrong with the indicator itself."
Employment figures are sometimes seen as equally suspect. Jack Welch, the once-legendary former CEO of GE, blithely accused the Obama administration of manipulating the final employment report before the 2012 election to make the economic recovery look better than it was. "Unbelievable jobs numbers … these Chicago guys will do anything … can't debate so change numbers," he tweeted after that last October report showed better-than-expected job growth and lower-than-anticipated unemployment rate. His arguments were later fleshed out by New York Post columnist John Crudele, who went on to charge the Census Bureau (which works with BLS to create the samples for the unemployment rate) with faking and fabricating the numbers to help Obama win reelection.
These views are not fringe. Type the search terms "inflation is false" into Google, and you will get reams of articles and analysis from mainstream outlets and voices, including investment guru Bill Gross (who referred to inflation numbers as a "haute con job"). Similar results pop up with the terms "real unemployment rate," and given how many ways there are to count employment, there are legitimate issues with the headline number.
[The bizarre optimism in Donald Trump's theory of the economy]
The cohort that responds to Trump reads those numbers in a starkly different light from the cohort laughing at him for it. Whenever the unemployment rate comes out showing improvement and hiring, those who are experiencing dwindling wages and shrinking opportunities might see a meticulously constructed web of lies meant to paint a positive picture so that the plight of tens of millions who have dropped out of the workforce can be ignored. The chairman of the Gallup organization, Jim Clifton, sees so many flaws with the way unemployment is measured that he has called the official rate a "Big Lie." In the Democratic presidential campaign, Bernie Sanders has also weighed in, saying the real unemployment rate is at best above 10 percent.
Beneath the anger and the distrust - which extend to a booming stock market that helps the wealthy and banks flush with profit even after the financial crisis - there lies a very real problem with how economists, the media and policymakers discuss economics. No, the bureaucrats in the Labor and Commerce departments who compile these numbers aren't a cabal engaged in a cover-up. And no, the Fed is not an Illuminati conspiracy. But the idea that a few simple big numbers that are at best averages to describe a large system we call "the economy" can adequately capture the stories of 320 million people is a fiction, one that we tell ourselves regularly, and which millions of people know to be false to their own experience.
It may be true that there is a national unemployment rate measured at 5 percent. But it is also true that for white men without a college degree, or white men who had worked factory jobs until the mid-2000s with no more than a high school education, the unemployment reality is much worse (though it's even worse for black and Hispanic men, who don't seem to be responding by flocking to Trump in large numbers). Even when those with these skill sets can get a job, the pay is woefully below a living wage. Jobs that don't pay well still count, in the stats, as jobs. Telling people who are barely getting by that the economy is just fine must appear much more than insensitive. It is insulting, and it feels like a denial of what they are experiencing.
The chords Trump strikes when he makes these claims, therefore, should be taken more seriously than the claims themselves. We need to be much more diligent in understanding what our national numbers do and do not tell us, and how much they obscure. In trying to hang our sense of what's what on a few big numbers, we risk glossing over the tens of millions whose lives don't fit those numbers and don't fit the story. "The economy" may be doing just fine, but that doesn't mean that everyone is. Inflation might be low, but millions can be struggling to meet basic costs just the same.
So yes, Trump is wrong, and he's the culmination of decades of paranoia and distrust of government reports. The economy overall is doing just fine. But people are still struggling. We don't have to share the paranoia or buy into the conspiratorial narrative to acknowledge that. A great nation, the one Trump promises to restore, can embrace more than one story, and can afford to speak to those left out of our rosy national numbers along with those whose experience reflect them.
the3sattlers, 4/8/2016 1:05 PM EDT
" The economy overall is doing just fine." Does this include QE? If the Fed is pouring billions of new money into the economy, how accurate is it to say that the economy is doing just fine?
james_harrigan, 4/8/2016 10:14 AM EDT
What a useless article. The author explains precisely nothing about what the official statistics do and do not measure, what they miss and what they capture.
Derbigdog, 4/8/2016 11:40 AM EDT
I had the same impression as well. Notice he does not mention that the Gallop number is over 10% and is based on their polling data.
captdon1, 4/8/2016 5:51 AM EDT
Not reported by WP
The first two years of Obama's presidency Democrats controlled the house and Senate. The second two years, Republicans controlled the Senate. The last two years of Obama's term, the Republicans controlled house and Senate. During this six years the national debt increase $10 TRILLION and the Government collected $9 TRILLION in taxes and borrowed $10 TRILLION. ($19 Trillion In Six Years!!!) (Where did our lovely politicians spend this enormous amount of money??? (Republicans and Democrats!)reussere, 4/8/2016 1:43 AM EDT
Reading the comments below it strikes me again and again how far out of whack most people are with reality. It's absolutely true that using a single number for the employment rate reflects the overall average of the economy certainly doesn't measure how every person is doing, anymore than an average global temperature doesn't measure any local temperatures.
One thing not emphasized in the article is that there is a number of different statistics. The 5% figure refers to the U-3 statistic. Nearly all of the rest of the employment statistics are higher, some considerably so because they include different groups of people. But when you compare U-3 from different years, you are comparing apples and apples. The rest of the numbers very closely track with U-3. That is when U-3 goes up and down, U-6 go up and down pretty much in lockstep.
It is unfortunate that subpopulations of Americans are doing far worse (and some doing far better) than average. But that is the nature of averages after all. It is simply impossible for a single number (or even a group of a dozen different employment measurements) to accurately reflect a complex reality.
Smoothcountryside, 4/8/2016 12:04 PM EDT
The alternative measures of labor underutilization are defined as U-1 through U-6 with U-6 being the broadest measure and probably the closes to the "true" level of unemployment. Otherwise, all the rest of your commentary is correct.
southernbaked, 4/7/2016 11:02 PM EDT
Because this highly educated writer is totally bias, he left out some key parts, I personally lived though. He referred back to the late 70's twice. But never mentioned that Reagan changed how Unemployment was figured in the early 80's. He included all people in the military service, as employed. Before that, they was counted neither way. He also intentionally left out that when Obama, had the unemployed numbers dropped one month before the election, from 8.1% to 7.8% --because it was believed that no one could be reelected if it was above 8%.
Then after he was sworn in--- in January, they had to readjust the numbers back up. They blamed it on one employees mistakes-- PS. no one was fired or disciplined for fudging. Bottom line is, for every 1.8 manufacturing job, there are 2 government jobs, that is disaster. Because this writer is to young to have lived in America when it was great. When for every 1 government job, you had 3 manufacturing jobs.
I will enlighten him. I joined the workforce -- With no higher education -- when you merely walked down the road, and picked out a job. Because jobs hang on trees like apples. By 35 I COMPLETELY owned my first 3 bedroom brick house, and the 2 newer cars parked in the driveway. Anyone care to try that now ??
As for all this talk about education-- I have a bit of knowledge about that subject-- because I paid in full to send all under my roof through it. Without one dime of aide from anyone. The above writer is proof-- you can be heavily educated, and DEAD WRONG. There is nothing good about this economy. Signed, UN-affiliated to either corrupted party
Bluhorizons, 4/7/2016 9:43 PM EDT
"we're not at 5 percent unemployment. We're at a number that's probably into the 20s if you look at the real number." Trump is correct. The unemployment data is contrived from data about people receiving unemployment compensation but the people who's unemployment has ended and people who have just given up is invisible.
"It may be true that there is a national unemployment rate measured at 5 percent. But it is also true that for white men without a college degree, or white men who had worked factory jobs until the mid-2000s with no more than a high school education, the unemployment reality is much worse "
The author goes on and on about the legitimate distrust of government unemployment data and then tells us Trump is wrong. But the article convinces us Trump is right! So, this article its not really about the legitimate distrust of government data is is about the author's not liking Trump. Typical New Left bs
Aushax, 4/7/2016 8:24 PM EDT
Last jobs report before the 2012 election the number unusually dropped then was readjusted up after the election. Coincidentally?
George Mason, 4/7/2016 8:15 PM EDT
U6 is 9.8% for March 2016. We still have 94 million unemployed and you want to say its 5 % what journalistic malpractice.
F mackey, 4/7/2016 7:57 PM EDT
hey reporter,Todays WSJ, More than 40% of the student borrowers aren't making payments? WHY? easy,they owe big $ money$ & cant get a job or a well paying job to pay back the loans,hey reporter,i'd send you $10 bucks to buy a clue,but you'd probably get lost going to the store,what a %@%@%@,another reporter,who doesn't have a clue on whats going on,jmo
SimpleCountryActuary, 4/7/2016 7:57 PM EDT
This reporter is a Hillary tool. Even the Los Angeles Times on March 6th had to admit:
"Trump is partly right in saying that trade has cost the U.S. economy jobs and held down wages. He may also be correct - to a degree - in saying that low-skilled immigrants have depressed salaries for certain jobs or industries..."
If this is the quality of reporting the WaPo is going to provide, namely even worse than the Los Angeles Times, then Bezos had better fire the editorial staff and buy a new one.
Clyde4, 4/7/2016 7:34 PM EDT [Edited]
This article dismissing Trump is exactly what is wrong with journalism today - all about creating a false reality for people instead of investigating and reporting
Trump has emphasized that he is looking at the percent of the population that is participating in the workforce - and that this participation rate is currently at historical lows -- and Trump has been clear that his approach to paying down the national debt is based on getting the participation rates back to historical levels
The author completely ignored the big elephant in the room -- that is irresponsible journalism
The author may want to look into how the unemployment rate shot up in 2008 when the government extended benefits and then the unemployment rate plummeted again when unemployment benefits were decrease (around 2011, I believe) - if I were the author I would do a little research into whether the unemployment rate correlates with how much is paid out in benefits or with unemployment determined through some other approach (like surveys
dangerbird1225, 4/7/2016 7:25 PM EDT
Bunch of crap. If you stop counting those that stop looking for a job, your numbers are wrong. Period. Why didn't this apologist for statistics mention that?
watchkeptoverthewatcher, 4/7/2016 6:27 PM EDT
Ya with a labor participation rate of 63%
AtlasRocked, 4/7/2016 5:12 PM EDT
"The government can't lie about a hundred billion dollars of Social Security money stolen for the Clinton 'balanced budget', that would be a crime against the citizens, they would revolt. John, come one now. "
I didn't say it first, Senator Ernest Hollings did, on the Senate floor.
"Both Democrats and Republicans are all running this year and next and saying surplus, surplus. Look what we have done. It is false. The actual figures show that from the beginning of the fiscal year until now we had to borrow $127,800,000,000." - Senate speech, Democratic Senator Ernest Hollings, October 28, 1999
And here is how they did it: http://www.craigsteiner.us/articles/16
rgengel, 4/7/2016 5:03 PM EDT
Go to New Orleans Chicago Atlanta Los Angeles Detroit stop anybody on the street and ask if unemployment is 5% and that there is a 95% chance a guy can get a job.
Then you will have a statistic reference point. Its not a Democratic or republican issue because both of them have manipulated the system for so long its meaningless. Go Trump 2016 and get this crap sorted out with common sense plain English
AtlasRocked, 4/7/2016 4:37 PM EDT
There is plenty of evidence the figures are cooked, folks, enough to fill a book: Atlas Shouts. Don't believe trash like this article claims. GDP, unemployment and inflation are all manipulated numbers, as Campbell's Law predicts.
I can't believe the Washington Post prints propaganda like this.
TimberDave, 4/7/2016 2:23 PM EDT
I do remember when the officially-announced unemployment rate stopped including those who were no longer looking for work. That *was* a significant shift, and there's no doubt it made politicians (Reagan, I think it was) look better; of course, no President since then has reversed it, as it would instantly make themselves look worse.
astroboy_2000, 4/7/2016 1:28 PM EDT
This would be a much more intelligent article if the writer actually said what the government considers as 'employed'.
Working one hour a week, at minimum wage, is 'employed', according to the government. No wonder unemployment is at 5%.
Add in people who are working, but want and need full time jobs, add in people who have dropped out of the labor market and/or retired earlier than they wanted to, and unemployment is at least 10%. Ten seconds on Google will show you that.
The writer should be sacked for taking a very serious issue and turning it into a piece of non-informative fluff. Bad mouthing Trump and Sanders is the same as endorsing Hilly.
Manchester0913, 4/7/2016 2:12 PM EDT
The number you're referencing is captured under U6. However, U3 is the traditional measure.
Son House, 4/7/2016 2:24 PM EDT
The government doesn't claim that working one hour a week is employed. Google U 3 unemployment. Then google U 6 unemployment. You can be enlightened.
Liz in AL, 4/7/2016 7:21 PM EDT
I've found this compilation of all 6 of the "U-rates" very useful. It encompasses the most restrictive (and thus smallest) U-1 rate, though the most expansive U-6. It provides brief descriptions of what gets counted for each rate, and (at least for more recent years) provides the ability to compare at the monthly level of detail. U6 Unemployment Rate Portal Seven
[Sep 14, 2016] An effective subsidy of 54 thousand dollars per student at Princeton
profile.theguardian.com
apolitical_paddy 4 May 2016 16:26I decided to look up an answer to my question and found this http://www.bloombergview.com/articles/2012-03-18/princeton-reaps-tax-breaks-as-state-colleges-beg which suggests an effective subsidy of " $54,000 per student " at Princeton.
The author goes on to write which I find a bit odd " To me, income inequality is an overrated problem in American life, and has even propelled the American entrepreneurial spirit. "
He then seems to imply that maybe there is an emergent, de facto bad outcome: Yet it remains true that, considering all federal government policies, including tax exemptions, the rich schools have benefited more than the poor ones -- a regressive social policy that many would argue is inconsistent with using higher education as a tool in promoting the American Dream.
Anyway, direct funding of third-level education by federal and state subsidies seems like a great idea and something that I would be very happy for my tax dollars to be used towards and -- moreover -- I would be happy paying more taxes if they were put to such purposes.
[Sep 14, 2016] Bill Black We Send Teachers to Prison for Rigging the Numbers, Why Not Bankers
Notable quotes:
"... By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly published with New Economic Perspectives ..."
"... he's pursued abroad many also intuitively believe that there's no one who will hit back harder. There's some of that 'he may be a son-of-a-bitch but he's our son-of-a-bitch' quality to the president's support on national security issues. ..."
"... Hence teachers weren't divisive enough and therefore are/were seen as part of the "problem". ..."
Apr 02, 2015 | naked capitalism
Yves here. One has to wonder if the prosecutorial investment in bringing down a public school test-cheating ring has less to do with concern about the students and more to do with charter schools.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly published with New Economic Perspectives
The New York Times ran the story on April Fools' Day of a jury convicting educators of gaming the test numbers and lying about their actions to investigators.
ATLANTA - In a dramatic conclusion to what has been described as the largest cheating scandal in the nation's history, a jury here on Wednesday convicted 11 educators for their roles in a standardized test cheating scandal that tarnished a major school district's reputation and raised broader questions about the role of high-stakes testing in American schools.
On their eighth day of deliberations, the jurors convicted 11 of the 12 defendants of racketeering, a felony that carries up to 20 years in prison. Many of the defendants - a mixture of Atlanta public school teachers, testing coordinators and administrators - were also convicted of other charges, such as making false statements, that could add years to their sentences.
This was complicated trial that took six months to present and required eight days of jury deliberations. It was a major commitment of investigative and prosecutorial resources. But it was not investigated and prosecuted by the FBI and AUSAs, but by state and local officials. In addition to the trial success, the prosecutors secured 21 guilty pleas.
Atlanta's public schools, of course, did not engage in "the largest cheating scandal in the nation's history." The big banks' cheating scandals left the Atlanta educators in the dust.
The two obvious questions are why the educators cheated and how they got caught. "High-stakes testing" cannot explain the scandal because we have had such tests for over 50 years. The article explains the real drivers – compensation, promotions, fear, and ego (aka "reputation").
"Officials said the cheating allowed employees to collect bonuses and helped improve the reputations of both Dr. Hall and the perpetually troubled school district she had led since 1999.
Investigators wrote in the report that Dr. Hall and her aides had 'created a culture of fear, intimidation and retaliation' that had permitted "cheating - at all levels - to go unchecked for years."
Any reader familiar with my work should be running over in their mind Citigroup's vastly larger cheating frauds that senior managers produced by using exactly the same tactics to produce hundreds of billions of dollars in fraud.
How did people become suspicious and decide to conduct a real investigation? They realized that the reported results were too good to be true. That too is directly parallel to Citi, where massive purchases of "liar's" loans known to be 90% fraudulent supposedly led to massive profits.
The dozen educators who stood trial, including five teachers and a principal, were indicted in 2013 after years of questions about how Atlanta students had substantially improved their scores on the Criterion-Referenced Competency Test, a standardized examination given throughout Georgia.
In 2009, The Atlanta Journal-Constitution started publishing a series of articles that sowed suspicion about the veracity of the test scores, and Gov. Sonny Perdue ultimately ordered an investigation.
Wow, a newspaper did a series of articles, and documented a scandal built on deceit. Imagine if the New York Times and the Wall Street Journal were to do an "unsparing" investigation into banking fraud – and into Attorney General Eric Holder's refusal to prosecute. What if they actually looked at culpability in the C-suites?
The inquiry, which was completed in 2011, led to findings that were startling and unsparing: Investigators concluded that cheating had occurred in at least 44 schools and that the district had been troubled by "organized and systemic misconduct." Nearly 180 employees, including 38 principals, were accused of wrongdoing as part of an effort to inflate test scores and misrepresent the achievement of Atlanta's students and schools.
The investigators wrote that cheating was particularly ingrained in individual schools - at one, for instance, a principal wore gloves while she altered answer sheets - but they also said that the district's top officials, including Superintendent Beverly L. Hall, bore some responsibility.
Dr. Hall, who died on March 2, insisted that she had done nothing wrong and that her approach to education, which emphasized data, was not to blame. "I can't accept that there's a culture of cheating," Dr. Hall said in an interview in 2011. "What these 178 are accused of is horrific, but we have over 3,000 teachers."
But a Fulton County grand jury later accused her and 34 other district employees of being complicit in the cheating. Twenty-one of the educators reached plea agreements; two defendants, including Dr. Hall, died before they could stand trial.
Of course, Hall's "approach to education" did not "emphasize data" – it emphasized faux data – like Citi's accounting alchemists under Robert Rubin who transmuted fraudulent net liabilities (liar's loans) into supposedly wondrously valuable assets that had zero risk (Super Senior CDO tranches).
A more general point is in order. Atlanta is the culmination of destructive national trends and failing to mention Houston in the story was unfortunate. First, the "reinventing government" movement decided the public sector was bad and the private sector was magnificent and said that the public sector should adopt private sector approaches including quite specifically "performance pay" based on quantitative measures. This brought to the public sector the perverse incentives that were ruining the private sector and about to bring on Enron-era fraud epidemic and then the most recent three fraud epidemics. Second, we were assured by proponents of the change that a concern for "reputation" would trump any perverse incentives. What the proponents failed to see, of course, was that in both the private and public sectors the way to create a superb reputation was to report inflated data.
Reputation, instead of the "trump" ensuring good conduct, was a leading motive to engage in bad conduct. Third, we were told that giving public administrators far more power to squash teachers was the key to success in education. Lord Acton warned that absolute power leads to absolute corruption whether in Atlanta or Citi's C-suite.
Houston should have been mentioned because the modern movement toward educational fraud began in Houston under Rod Paige – who became Secretary of Education based on massive fraudulent misrepresentation of data. Paige kicked off the testing insanity, claiming it would produce objective, fact-based policies based on what educational measures actually worked. As a famous takedown of Paige's claims ends – the lesson is that it was too good to be true. President Bush, however, bought it hook, line, sinker, bobber, rod, and the boat Paige rowed out in.
In any event, if Fulton County, Georgia can jail educators who lie and gimmick the data, Holder can send the elite bankers to prison on the same grounds.
lakewoebegoner, April 2, 2015 at 10:41 am
*** One has to wonder if the prosecutorial investment in bringing down a public school test-cheating ring has less to do with concern about the students and more to do with charter schools. ***
I believe it's even simpler than that…..prosecuting teachers is perfect fodder for the local 11 o'clock news-you're prosecuting publiclly paid low-hanging fruit, the crime is understandable (versus explaining accounting fraud or intentional misvaluation of assets) and of course-my gosh, think of the children!
NotTimothyGeithner, April 2, 2015 at 11:07 am
Local DAs have incentive to prosecute large cases, and Holder made sure to make token plea deals with the banks. A successful state AG who brought down a major financial player would destroy the Obama Administration just by existing two years into the first term because there would be no excuse. Plenty of loyal Team Blue voters if pressed will explain the lack of prosecution as a GOP plot, but with a counter example in the papers they would be more demoralized than they are.
RUKidding, April 2, 2015 at 12:11 pm
Neither Team Blue or Team Red voters want to confront reality and truly see and acknowledge what's going on. The crooks in the District of Criminals have perfected their Kabuki Show of "hiding" behind each other's skirts and blaming the other side for all kinds of ills and perfidy. Tribalistic authoritarians can be lazy and not have to think for themselves and really DO something; just pass the clicker; lets all watch some "reality" tv show instead. Talk about the matrix….
An example is my rightwing family members just recently celebrating quite a bit that Harry Reid has announced his retirement – as IF that'll be this amazingly good thing. Like: what will happen then? HOW, exactly, will "things get better" just bc they can't kick Harry Reid around anymore.
Disclaimer: no love lost on my part vis Harry Reid. He's as much of a crook and worthless waste of space as all of the others, no matter which Team Jacket they wear. My take? What possible difference will it make if Reid retires or stays in the Senate indefinitely?
RUKidding, April 2, 2015 at 10:59 am
Teachers have no money. Bankers have a TON of money. Sucks to be in the 99s.
Good comments. Right now, too, teachers have been deliberately painted to be the evilest of the vile because unions! get paid too much! can't be fired! blah de blah…. it's something easy for the masses to grasp – all those dreadful overpaid teachers who can't be fired "robbing" us of our taxes, while allegedly doing a totally shitty job. Yeah right. Of course privatized school teachers would most definitely do a "better" jawb.
It's all "look over there!!!!!" while the bankers are the ones robbing us blind deaf dumb stupid etc.
And yes, Charter Schools! Another way for the crooks at the top to rip off the 99s! woot!
And the beat down goes on…..
djrichard, April 2, 2015 at 12:09 pm
I remember back when the Supreme Court was debating W vs Gore, I put it to my neighbors that W would be under the influence of big oil and other powers that be. One of my neighbors countered that Gore would be under the influence of teachers. I was the minority opinion in that conversation.
RUKidding, April 2, 2015 at 12:14 pm
No love lost on my part vis Gore, but seriously??? LIke Gore is "under the influence" of teachers??? Yeah, unions, but really? Like it's just so ridiculous. Teachers v Big Oil. Uh, er, that's pretty much like David v Goliath, but in this case Goliath/BigOil has totally crushed David/the 99s.
djrichard, April 2, 2015 at 12:37 pm
I'm surprised I found this, but I think this captures it.
Bush's bully-boy campaign tactics play to his strengths, albeit unstated and unlovely ones. Many of the polls of the president have shown that while people don't necessarily agree with the specific policies he's pursued abroad many also intuitively believe that there's no one who will hit back harder. There's some of that 'he may be a son-of-a-bitch but he's our son-of-a-bitch' quality to the president's support on national security issues.
This was from W v Kerry days. But I think the same principle was operating during W v Gore. During 2004, the idea was to continue to inflict W on the middle east. During 2000, I think the idea was to inflict W on the "deserving elements" inside the US (whatever those deserving elements are/were at the time).
Teachers if anything represent a "big tent" mind-set, one in which there are no losers, or vice-versa one in which everyone is deserving of winning. Hence teachers weren't divisive enough and therefore are/were seen as part of the "problem".
[Sep 12, 2016] 'It Pays to Work: Work Incentives and the Safety Net'
Sep 12, 2016 | economistsview.typepad.com
Via Brad DeLong:It Pays to Work: Work Incentives and the Safety Net: Isaac Shapiro, Robert Greenstein, Danilo Trisi, and Bryann DaSilva, CBPP : Some critics of various low-income assistance programs argue that the safety net discourages work. In particular, they contend that people receiving assistance from these programs can receive more, or nearly as much, from not working - and receiving government aid - than from working. Or they argue that low-paid workers have little incentive to work more hours or seek higher wages because losses in government aid will cancel out the earnings gains.Careful analysis of the data and research demonstrates, however, that such charges are largely incorrect and that it pays to work. In the overwhelming majority of cases, in fact, adults in poverty are significantly better off if they get a job, work more hours, or receive a wage hike.Various changes in the safety net over the past two decades have transformed it into more of what analysts call a "work-based safety net" and substantially increased incentives to work for people in poverty. ...
[Sep 12, 2016] Economist's View 'Why is U.S. Labor Market Fluidity Drying Up'
Sep 12, 2016 | economistsview.typepad.com
jonny bakho : , Wednesday, March 09, 2016 at 03:35 AM
'Why is U.S. Labor Market Fluidity Drying Up?'
Nick Bunker:Why is U.S. labor market fluidity drying up ?: The U.S. labor market is a far less dynamic place than it was 30 years ago. Workers today are less likely to get a job while unemployed, move into unemployment, switch jobs, or move across state lines. You'd think just the opposite would be true given some of the discussion about our rapidly changing digital economy, but the data show what the data show. Even still, the reason-or reasons-for the decline in fluidity aren't known.A new working paper -by economists Raven Molloy, Christopher L. Smith, and Riccardo Trezzi of the Federal Reserve and Abigail Wozniak of the University of Notre Dame-takes a closer look at the decline in labor market fluidity and tries to find the causes. While the authors find nothing close to a smoking gun, they point to interesting avenues of future research. ...
Would slack demand have anything to do with fluidity?DrDick -> jonny bakho... , Wednesday, March 09, 2016 at 07:27 AMThat seems like it would be a good possibility.jonny bakho : , Wednesday, March 09, 2016 at 04:13 AMDual careers make relocation more difficult.DrDick -> jonny bakho... , Wednesday, March 09, 2016 at 07:28 AMStagnant and declining wages also make it more expensive.tew -> DrDick... , Wednesday, March 09, 2016 at 08:10 AMNo, DrDick, a person's income does not change mobility unless it is extraordinarily low (in other words, they already can't pay rent and pay for a moving truck). If absolute income reduced mobility, then we would expect mobility to have been lower in the past.DrDick -> tew... , Wednesday, March 09, 2016 at 11:41 AMYou obviously have no idea what you are talking about. Your last statement is clearly false, if you control for inflation. Minimum wage in 1960 ($1.65), for instance translates into over $10/hour today. It is certainly true that even relatively poor people will move if there are no jobs available locally, as in the Dust Bowl migrations or the migrations from the Rust Belt to Texas, Oklahoma, and Louisiana in the late 70s. No such mobility exists for low to moderate income people unless they are truly desperate.Syaloch -> jonny bakho... , Wednesday, March 09, 2016 at 10:34 AMHome ownership also substantially reduces mobility, particularly if you're unlucky enough to live in a region suffering from long-term economic decline.A1 -> Syaloch... , Wednesday, March 09, 2016 at 11:07 AMClose but cost of housing in certain markets is also a hindrance for labor mobility. Hard to move to places like Seattle or New York where there are jobs and high wages but the cost of housing has outpaced the salary increases.lower middle class : , Wednesday, March 09, 2016 at 05:46 AMUrban specialization in the industries of Healthcare, Technology, Finance and Logistics. High cost of living acts as an economic filter to ensure "the best people" are local.anne : , Wednesday, March 09, 2016 at 06:56 AMAlan Greenspan recognized * early on that the nature of business cycles in the United States was changing from inventory adjustment to labor adjustment cycles. As business inventory was made learner and leaner, with a movement to the just-in-time inventory delivery practices followed through Japan, Greenspan suggested that as economic conditions changed businesses would react by adjusting employment.anne -> anne... , Wednesday, March 09, 2016 at 08:38 AMThe recession of the Bush presidency in the early 1990s unlike the Reagan recession of the early 1980s was for Greenspan an employment adjustment rather than inventory adjustment recession. Employment then has become accepted as less and less of a long term commitment by employers to workers and workers have have more poorly accordingly.
* I do not know where the Greenspan speech on the changing nature of businesses cycles can be found and would be grateful for a reference.
http://www.federalreserve.gov/boarddocs/hh/2001/february/testimony2.htmPaine -> anne... , Wednesday, March 09, 2016 at 09:35 AMFebruary 28, 2001
[ Here is Alan Greenspan speaking of the speed of inventory adjustments, but I think Greenspan had recognized this before he became Federal Reserve Chair in 1987. The problem he confronted at the Fed was employment adjustment.
Again, I will look for earlier discussion of the matter. ]
Swings in employment were always part of the cycleanne -> Paine... , Wednesday, March 09, 2016 at 12:21 PMI find green spans distinction to be......
PoliticsIt might be the case that a relatively closed economy with high employment share in industrial production
Would show cuts in production and inventory shrink
Where a open system would show a drop in importsWe have become more open since we dropped the dollar to gold peg
And industries job share has droppedThis is only part of an answer to the numbers
Which btw show lower lay off rates per drop in output
The quit rate shows both longer periods of low rates then in cycles from the 50'sThis is all out of my faulty memory banks
Yup
Toss the salt over your left shoulder
The nature of recessions in terms of employment indeed changed after the Reagan recession:anne -> Paine... , Wednesday, March 09, 2016 at 12:22 PMhttp://www.bls.gov/webapps/legacy/cesbtab1.htm
http://wwwdev.nber.org/cycles/cyclesmain.htmlJanuary 3, 2016
Recessions and Total Employment Cycles, 1943-2010: Decline
Employment declined for 24 months around the 18 month recession of 2007-2009, from January 2008 to February 2010.
Employment declined for 28 months around the 8 month recession of 2001, from February 2001 to June 2003.
Employment declined for 20 months around the 8 month recession of 1990-1991, from June 1990 to February 1992.
Employment declined for 17 months around the 16 month recession of 1981-1882, from July 1981 to December 1982.
http://www.bls.gov/webapps/legacy/cesbtab1.htmanne -> Paine... , Wednesday, March 09, 2016 at 12:30 PM
http://wwwdev.nber.org/cycles/cyclesmain.htmlJanuary 3, 2014
Recessions and Total Employment Cycles, 1943-2014: Recovery
Recovery in employment from the 18 month recession of 2007-2009, coming in May 2014 or 76 months.
Recovery in employment from the 8 month recession of 2001, coming in February 2005 or 48 months.
Recovery in employment from the 8 month recession of 1990-1991, coming in February 1993 or 32 months.
Recovery in employment from the 16 month recession of 1981-1982, coming in November 1983 or 28 months.
I have read the criticism several times, but do not quite understand what is being argued. Employment recovery has surely become increasingly lengthy in each recession since 1981-1982:anne -> Paine... , Thursday, March 10, 2016 at 07:08 AM28
32
48
76 months respectively.Clearer:anne -> Paine... , Thursday, March 10, 2016 at 07:09 AMhttp://www.bls.gov/webapps/legacy/cesbtab1.htm
http://wwwdev.nber.org/cycles/cyclesmain.htmlJanuary 4, 2016
Recessions and Private Employment Cycles, 1943-2010: Decline
Private employment declined for 24 months around the 18 month recession of 2007-2009, from January 2008 to February 2010.
Private employment declined for 31 months around the 8 month recession of 2001, from December 2000 to July 2003.
Private employment declined for 23 months around the 8 month recession of 1990-1991, from March 1990 to February 1992.
Private employment declined for 16 months around the 16 month recession of 1981-1882, from August 1981 to December 1982.
http://www.bls.gov/webapps/legacy/cesbtab1.htm
http://wwwdev.nber.org/cycles/cyclesmain.htmlJanuary 4, 2016
Recessions and Private Employment Cycles, 1943-2014: Recovery
Recovery in private employment from the 18 month recession of 2007-2009, coming in March 2014 or 74 months.
Recovery in private employment from the 8 month recession of 2001, coming in June 2005 or 54 months.
Recovery in private employment from the 8 month recession of 1990-1991, coming in May 1993 or 38 months.
Recovery in private employment from the 16 month recession of 1981-1982, coming in November 1983 or 27 months.
I have read the criticism several times, but do not quite understand what is being argued. Privater employment recovery has surely become increasingly lengthy in each recession since 1981-1982:Jurassic Carl : , Wednesday, March 09, 2016 at 07:23 AM27
38
54
74 months respectively.1. HR doesn't know what it's doing. That's why labor matching is so awful.reason : , Wednesday, March 09, 2016 at 08:03 AM
http://www.corcodilos.com/blog/6249/why-hr-should-get-out-of-the-hiring-businesshttp://www.inc.com/suzanne-lucas/theres-not-a-talent-shortage-you-just-stink-at-hiring.html
http://www.upenn.edu/gazette/0113/PennGaz0113_feature2.pdf
https://hbr.org/2015/07/why-we-love-to-hate-hr-and-what-hr-can-do-about-it
2. They are not trying to hire (fake ads, H1B b.s., testing the market)https://www.youtube.com/watch?v=TCbFEgFajGU
"running classified ads with the goal of NOT finding any qualified applicants, and the steps they go through to disqualify even the most qualified Americans in order to secure green cards for H-1b workers"3. Employers are overworking /stretching existing (overtime pay exempt) staff
4. Weak aggregate demand.
5. Increased use of informal and 1099/contractor positions
6. Social Stigma of unemployment
7. A bunch more reasons...
Johnny Backho beat me to it regarding dual careers. Single earner households are much more likely to be prepared to move. It also causes people to leave companies or turn down promotions, as well.tew -> reason... , Wednesday, March 09, 2016 at 08:15 AMThis is obvious and observable, but you will see a chunk of people vigorously deny it for two reasons:reason : , Wednesday, March 09, 2016 at 08:06 AM
1) They project an anti-feminist perspective onto it. In other words, they think that finding anything at all that could be perceived to be not positive about dual incomes is an assault on women working outside the home.
2) Even more twisted, they think that because many people are in dual income households for economic reasons (they need both incomes for "basic" needs), that declaring that the dual income reduces mobility is a negative comment about the dual income households.But I should also point out that the flow of government money has become less decentralised over time (if not regionally, then in terms of individuals) so that financial incentives to move have also fallen. Money flows up, not down and if there is no decentralising force (for instance government services and transfer payments) it tends to increasingly concentrate.tew : , Wednesday, March 09, 2016 at 08:08 AMIt's called hunkering down, holding onto your desk.Jurassic Carl said in reply to tew... , Wednesday, March 09, 2016 at 08:14 AMThis seems like an area of research as much for (social) psychologists as economists. Consider the behavior of people after they have suffered or witnessed a (series of) traumatic event(s). Everyone who lost a job and got another is holding onto it like a life raft. Those who didn't lose their jobs hold on as dearly, knowing that if they lose it, they could be out in the wilderness for a long time and never get back to where they were.
Oh, definitely. Fear.tew -> Jurassic Carl... , Wednesday, March 09, 2016 at 08:16 AMAnd movement from life raft to life raft is hardly tempting, in most cases. Little salary or no bump with uncertain stability. The devil you know is better than the devil you don't know.
And we have to wonder if there is hysteresis with productivity. In other words, fearful workers are less likely to embrace projects and systems that increase productivity and management is less likely to pursue them due to docile, affordable workers.Paine -> tew... , Wednesday, March 09, 2016 at 09:41 AMFrom the end of the Spainish war to Pearl HarborDrDick -> tew... , Wednesday, March 09, 2016 at 11:43 AMFarm economy explained lots of the doldrum times
As It contracted enormously with each down cycleNow it's industrial contraction
Since Nixon time
That explains the doldrums
As it has contracted
Each sector had very different emergent characteristicSo each eras doldrums had unique dynamics
And you denied this effect when I brought it up above.Dan Kervick -> tew... , Wednesday, March 09, 2016 at 02:15 PMYup. Makes companies less productive and innovative too. Common workplace cause in keeping things stable, since change is punished.BobZ -> tew... , Wednesday, March 09, 2016 at 02:47 PMI think fear, (actually, sheer terror) explains 99% of this. It's like the entire workforce is experiencing PTSD.Jurassic Carl said in reply to BobZ ... , Wednesday, March 09, 2016 at 04:42 PMThere is very little confidence that you'll be able to find a new job if you get laid off, and even less confidence that a new job will be any better than your current one.
I know that professional STEM recruiters are having a much tougher time getting people to leave an existing job. Oddly, the one thing that I find perplexing is that the bias against hiring someone who's unemployed is much stronger than ever.
This.SomeCallMeTim : , -1Recruiter and HR biases and inefficiencies are quite unhelpful.
Further, I would never, ever, ever leave a job without a raise and a legit, iron-clad, in-hand and legally enforceable signed offer.Nick Corcodilos, a recruiter in Silicon Valley, often talks about a rash of rescinded offers. The whole process of changing jobs is filled with a series of landmines that could land you into unemployment leprosy if things don't work out perfectly.
http://www.corcodilos.com/blog/8454/protect-yourself-from-exploding-job-offers
http://www.pbs.org/newshour/making-sense/ask-headhunter-job-offer-giving-notice-old-job/
http://www.corcodilos.com/blog/8498/protect-your-job-dont-give-notice-when-accepting-a-new-job
Related to fear: Declining job tenure length, and maybe the growth of corporate 'rightsizing' - an MBA finance VP I know had 3 sizable companies shot out from under him during his career, and was constantly upgrading software skills to stay within shouting distance of up to date.
[Sep 12, 2016] Volcker overcorrected and defanged labor to the delight of the wealthy elites.
September 02, 2015 economistsview.typepad.com
bakho said...
The late 70s 80s inflation was due to 2 components.
1. Wage inflation fueled by COLA.
2. Price inflation fueled by the oil shock and the response of fuel switching and conservation, both of which were expensive and subtracted from productivity. (Same amount of product made, more work if you count work dedicated to remediation).Volcker overcorrected and defanged labor to the delight of the wealthy elites.
That inflation did not return even when unemployment declined to low levels validates that other factors were driving inflation (oil) and that was corrected by Carter energy policy.
The wealthy elites give zero credit to regulatory and fiscal policy under Carter for fixing the problem. Reagan fiscal policy made inflation worse, but by then, Carter energy policy had taken full effect.
During the Great Moderation, we do see inflation start to appear during oil shocks (such as Gulf War 1).
We have rewritten history discounting policies that worked, thus preventing us from learning the truth about the value of fiscal and regulatory policy and limitations of monetary policy.
Monetary policy only worked by creating a bad recession with high unemployment.
Fiscal and regulatory policy tackled the energy issues without causing the social harm from high unemployment.
[Sep 10, 2016] Higher Education Faculty News As Free Textbooks Go Mainstream, Advocate Says Colleges Should Do More to Support Them
Notable quotes:
"... In June, 38 community colleges announced plans to make free online materials standard in every course in some degree programs as part of a new effort coordinated by Achieving the Dream. Just a few weeks later, Gov. Jerry Brown of California, a Democrat, signed a 2016-17 budget that includes $5 million for community colleges in the state to create their own ZTC degrees ..."
"... Hal Plotkin, a longtime advocate of open education resources, or OER, says the moves could eventually save students billions of dollars. As he argued in a recent commentary, California's new ZTC program is "easily the most ambitious state-level effort to promote the use of OER in public higher education to date." ..."
Jul 12, 2016 | higheredfaculty.blogspot.com
The Chronicle of Higher Education By Goldie Blumenstyk July 12, 2016
It's been a big few weeks for the movement to replace commercial textbooks with free online materials, thanks to the sudden rise of something called the Zero Textbook Cost degree.
In June, 38 community colleges announced plans to make free online materials standard in every course in some degree programs as part of a new effort coordinated by Achieving the Dream. Just a few weeks later, Gov. Jerry Brown of California, a Democrat, signed a 2016-17 budget that includes $5 million for community colleges in the state to create their own ZTC degrees.
Hal Plotkin, a longtime advocate of open education resources, or OER, says the moves could eventually save students billions of dollars. As he argued in a recent commentary, California's new ZTC program is "easily the most ambitious state-level effort to promote the use of OER in public higher education to date."
Yet while cheering both the California and Achieving the Dream initiatives, Mr. Plotkin, a senior open-policy fellow at Creative Commons USA, argues that college leaders could and should be doing far more to promote the use of free, openly licensed materials, to prevent publishers from treating students "like walking cash registers."
[Sep 10, 2016] The Pitchforks Are Coming For Us Plutocrats
Notable quotes:
"... At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country-the 99.99 percent-is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent. ..."
"... The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren't only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they'd be able to afford his Model Ts. ..."
Aug 25, 2016 | www.politico.com
Memo: From Nick Hanauer
To: My Fellow ZillionairesYou probably don't know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries-from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I'm no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can't even imagine. Multiple homes, my own plane, etc., etc. You know what I'm talking about. In 1992, I was selling pillows made by my family's business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough-and that time wasn't far off-people were going to shop online like crazy. Goodbye, Caldor. And Filene's. And Borders. And on and on.
Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you've probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff-Bezos-called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren't yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don't vary in quality-Bezos' great insight). Cybershop didn't make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.
But let's speak frankly to each other. I'm not the smartest guy you've ever met, or the hardest-working. I was a mediocre student. I'm not technical at all-I can't write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?
I see pitchforks.
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country-the 99.99 percent-is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn't that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
Memo: From Nick Hanauer
To: My Fellow ZillionairesYou probably don't know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries-from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I'm no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can't even imagine. Multiple homes, my own plane, etc., etc. You know what I'm talking about. In 1992, I was selling pillows made by my family's business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough-and that time wasn't far off-people were going to shop online like crazy. Goodbye, Caldor. And Filene's. And Borders. And on and on.
Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you've probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff-Bezos-called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren't yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don't vary in quality-Bezos' great insight). Cybershop didn't make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.
But let's speak frankly to each other. I'm not the smartest guy you've ever met, or the hardest-working. I was a mediocre student. I'm not technical at all-I can't write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?
I see pitchforks.
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country-the 99.99 percent-is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn't that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won't last.
If we don't do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn't eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It's not if, it's when.
Many of us think we're special because "this is America." We think we're immune to the same forces that started the Arab Spring-or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I've had many of you tell me to my face I'm completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.
Here's what I say to you: You're living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we're somehow going to know about that shift ahead of time. Any student of history knows that's not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there's no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That's the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible-for everybody. But especially for us.
***The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression-so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks-that will be the best thing possible for us rich folks, too. It's not just that we'll escape with our lives; it's that we'll most certainly get even richer.
The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren't only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they'd be able to afford his Model Ts.
What a great idea. My suggestion to you is: Let's do it all over again. We've got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.
It's when I realized this that I decided I had to leave my insulated world of the super-rich and get involved in politics. Not directly, by running for office or becoming one of the big-money billionaires who back candidates in an election. Instead, I wanted to try to change the conversation with ideas-by advancing what my co-author, Eric Liu, and I call "middle-out" economics. It's the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines-and has so screwed the American middle class and our economy generally. Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another.
Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.
On June 19, 2013, Bloomberg published an article I wrote called "The Capitalist's Case for a $15 Minimum Wage." Forbes labeled it "Nick Hanauer's near insane" proposal. And yet, just weeks after it was published, my friend David Rolf, a Service Employees International Union organizer, roused fast-food workers to go on strike around the country for a $15 living wage. Nearly a year later, the city of Seattle passed a $15 minimum wage. And just 350 days after my article was published, Seattle Mayor Ed Murray signed that ordinance into law. How could this happen, you ask?
It happened because we reminded the masses that they are the source of growth and prosperity, not us rich guys. We reminded them that when workers have more money, businesses have more customers-and need more employees. We reminded them that if businesses paid workers a living wage rather than poverty wages, taxpayers wouldn't have to make up the difference. And when we got done, 74 percent of likely Seattle voters in a recent poll agreed that a $15 minimum wage was a swell idea.
The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That's why you've got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?
The thing about us businesspeople is that we love our customers rich and our employees poor.
Because here's an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.
The thing about us businesspeople is that we love our customers rich and our employees poor. So for as long as there has been capitalism, capitalists have said the same thing about any effort to raise wages. We've had 75 years of complaints from big business-when the minimum wage was instituted, when women had to be paid equitable amounts, when child labor laws were created. Every time the capitalists said exactly the same thing in the same way: We're all going to go bankrupt. I'll have to close. I'll have to lay everyone off. It hasn't happened. In fact, the data show that when workers are better treated, business gets better. The naysayers are just wrong.
Most of you probably think that the $15 minimum wage in Seattle is an insane departure from rational policy that puts our economy at great risk. But in Seattle, our current minimum wage of $9.32 is already nearly 30 percent higher than the federal minimum wage. And has it ruined our economy yet? Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle. The fastest-growing big city in America? Seattle. Fifteen dollars isn't a risky untried policy for us. It's doubling down on the strategy that's already allowing our city to kick your city's ass.It makes perfect sense if you think about it: If a worker earns $7.25 an hour, which is now the national minimum wage, what proportion of that person's income do you think ends up in the cash registers of local small businesses? Hardly any. That person is paying rent, ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass. But she's not going out to eat at restaurants. Not browsing for new clothes. Not buying flowers on Mother's Day.
Is this issue more complicated than I'm making out? Of course. Are there many factors at play determining the dynamics of employment? Yup. But please, please stop insisting that if we pay low-wage workers more, unemployment will skyrocket and it will destroy the economy. It's utter nonsense. The most insidious thing about trickle-down economics isn't believing that if the rich get richer, it's good for the economy. It's believing that if the poor get richer, it's bad for the economy.
I know that virtually all of you feel that compelling our businesses to pay workers more is somehow unfair, or is too much government interference. Most of you think that we should just let good examples like Costco or Gap lead the way. Or let the market set the price. But here's the thing. When those who set bad examples, like the owners of Wal-Mart or McDonald's, pay their workers close to the minimum wage, what they're really saying is that they'd pay even less if it weren't illegal. (Thankfully both companies have recently said they would not oppose a hike in the minimum wage.) In any large group, some people absolutely will not do the right thing. That's why our economy can only be safe and effective if it is governed by the same kinds of rules as, say, the transportation system, with its speed limits and stop signs.
Wal-Mart is our nation's largest employer with some 1.4 million employees in the United States and more than $25 billion in pre-tax profit. So why are Wal-Mart employees the largest group of Medicaid recipients in many states? Wal-Mart could, say, pay each of its 1 million lowest-paid workers an extra $10,000 per year, raise them all out of poverty and enable them to, of all things, afford to shop at Wal-Mart. Not only would this also save us all the expense of the food stamps, Medicaid and rent assistance that they currently require, but Wal-Mart would still earn more than $15 billion pre-tax per year. Wal-Mart won't (and shouldn't) volunteer to pay its workers more than their competitors. In order for us to have an economy that works for everyone, we should compel all retailers to pay living wages-not just ask politely.
We rich people have been falsely persuaded by our schooling and the affirmation of society, and have convinced ourselves, that we are the main job creators. It's simply not true. There can never be enough super-rich Americans to power a great economy. I earn about 1,000 times the median American annually, but I don't buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my "manager pants." I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn't do the country much good.
So forget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won't admit it: If any of us had been born in Somalia or the Congo, all we'd be is some guy standing barefoot next to a dirt road selling fruit. It's not that Somalia and Congo don't have good entrepreneurs. It's just that the best ones are selling their wares off crates by the side of the road because that's all their customers can afford.
So why not talk about a different kind of New Deal for the American people, one that could appeal to the right as well as left-to libertarians as well as liberals? First, I'd ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways. But no way can you cut government substantially, not the way things are now. Ronald Reagan and George W. Bush each had eight years to do it, and they failed miserably.
Republicans and Democrats in Congress can't shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don't need food stamps. They don't need rent assistance. They don't need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won't need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.
This is, in other words, an economic approach that can unite left and right. Perhaps that's one reason the right is beginning, inexorably, to wake up to this reality as well. Even Republicans as diverse as Mitt Romney and Rick Santorum recently came out in favor of raising the minimum wage, in defiance of the Republicans in Congress.
***
One thing we can agree on-I'm sure of this-is that the change isn't going to start in Washington. Thinking is stale, arguments even more so. On both sides.
But the way I see it, that's all right. Most major social movements have seen their earliest victories at the state and municipal levels. The fight over the eight-hour workday, which ended in Washington, D.C., in 1938, began in places like Illinois and Massachusetts in the late 1800s. The movement for social security began in California in the 1930s. Even the Affordable Health Care Act-Obamacare-would have been hard to imagine without Mitt Romney's model in Massachusetts to lead the way.
Sadly, no Republicans and few Democrats get this. President Obama doesn't seem to either, though his heart is in the right place. In his State of the Union speech this year, he mentioned the need for a higher minimum wage but failed to make the case that less inequality and a renewed middle class would promote faster economic growth. Instead, the arguments we hear from most Democrats are the same old social-justice claims. The only reason to help workers is because we feel sorry for them. These fairness arguments feed right into every stereotype of Obama and the Democrats as bleeding hearts. Republicans say growth. Democrats say fairness-and lose every time.
But just because the two parties in Washington haven't figured it out yet doesn't mean we rich folks can just keep going. The conversation is already changing, even if the billionaires aren't onto it. I know what you think: You think that Occupy Wall Street and all the other capitalism-is-the-problem protesters disappeared without a trace. But that's not true. Of course, it's hard to get people to sleep in a park in the cause of social justice. But the protests we had in the wake of the 2008 financial crisis really did help to change the debate in this country from death panels and debt ceilings to inequality.
It's just that so many of you plutocrats didn't get the message.
Dear 1%ers, many of our fellow citizens are starting to believe that capitalism itself is the problem. I disagree, and I'm sure you do too. Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don't. Balancing the power of workers and billionaires by raising the minimum wage isn't bad for capitalism. It's an indispensable tool smart capitalists use to make capitalism stable and sustainable. And no one has a bigger stake in that than zillionaires like us.
The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics.
What nonsense this is. Am I really such a superior person? Do I belong at the center of the moral as well as economic universe? Do you?
My family, the Hanauers, started in Germany selling feathers and pillows. They got chased out of Germany by Hitler and ended up in Seattle owning another pillow company. Three generations later, I benefited from that. Then I got as lucky as a person could possibly get in the Internet age by having a buddy in Seattle named Bezos. I look at the average Joe on the street, and I say, "There but for the grace of Jeff go I." Even the best of us, in the worst of circumstances, are barefoot, standing by a dirt road, selling fruit. We should never forget that, or forget that the United States of America and its middle class made us, rather than the other way around.
Or we could sit back, do nothing, enjoy our yachts. And wait for the pitchforks.
[Sep 09, 2016] Brexit and Americas Growing Nationalism Movement
Looks like now line in 1920th the global pendulum moves toward nationalism. So in a way neoliberalism breeds nationalism and transnational elite paves the way for dictators like Mussolini, Hitler and Stalin in the past. Transnational elites start to recognize the danger, but they can do nothing about it as Trump has shown so vividly in the USA.
High unemployment logically lead to nationalism and all those neoliberal politicians understood that they are destroying the county but continue to plunder it anyway. Biden already cried uncle about the danger of far right nationalism on CNN. But reality in the USA is not then different from the reality in Britain.
Notable quotes:
"... No wonder Donald Trump's campaign has ignited a growing nationalism movement. We're creating jobs and giving them away. We've let globalization get away from us. It's abundantly clear that we don't have the right public policies in place to incentivize corporations to keep Americans gainfully employed. ..."
"... Grove's bold piece was embraced by some, panned by others and largely ignored. Whether he or Trump have exactly the right solution to the globalization and immigration problems plaguing free-market economies throughout the western world doesn't matter. What matters is that they've identified a problem that needs to be solved before it's too late. So did the British people when they voted to exit the EU. ..."
"... Economic prosperity and security must trump political correctness and ideology. The Brits got it right. Will we? ..."
Jul 04, 2016 | Fox Business
Just five weeks ago, polling indicated that Brits overwhelmingly favored remaining in the European Union by an 18-point margin, 57% to 39%. What changed? Maybe it was a startling report showing that 80% of new jobs over the past year had gone to foreign-born workers taking advantage of the EU's free movement policy.It's hard to say if that was the wakeup call that led to a sharp reversal and Thursday's historic vote to leave the EU, but it was nevertheless a stunning realization that Prime Minister David Cameron had failed to stem the tide of immigrant workers flooding the UK's job market, as he had promised to do.
Meanwhile, a laundry list of commentators from the Washington Post and Esquire to Vox and the New York Times chalked it all up to millions of racist xenophobes who are terrified of immigrants mucking up their pristine white privileged world. If that sounds at all similar to the anti-Trump rhetoric, you can sort of see where this is going.
The thing is, there's nothing even remotely irrational or bigoted about the alarming transformation of Britain's job market. Since 1997, the number of foreign-born workers has doubled to one in six. And since 2014, three EU migrants have found jobs for every Brit, according to official government figures. And, as we'll see in a minute, there are concerning parallels on this side of the pond, as well.
I hear from college grads and experienced professionals looking for jobs all the time, but a recent inquiry from a 27-year-old Edinburgh, Scotland woman with a BS in microbiology and excellent grades got my attention. She has applied for more than 400 jobs without managing to secure an interview. Not a single one.
... ... ...
While the situation in America isn't nearly as bad, there are clear parallels. In 1970, foreign-born workers accounted for just 5% of the U.S. civilian labor force, but that number has since more than tripled to one in six – identical to the UK figure.
More concerning is that the workforce itself has continued to shrink over the same period. Whether that reflects increasing competition, lack of in-demand skillsets or both doesn't really matter. The net result is that foreigners are getting more of our jobs, and that's as true of offshore jobs as it is of onshore jobs.
Think about it. Apple has created well over a million jobs, but 90% of them are outsourced to China. Google may not make phones and tablets, but the vast majority of Android-enabled mobile devices are manufactured in Asia. Of course, that's true of nearly every industry, old or new.
We may not face the identical migrant worker problem that the UK has, but the net result is the same: By giving up more and more jobs we create to foreign-born immigrants and offshore contractors, that leaves fewer and fewer jobs and increasing competition for American citizens.
No wonder Donald Trump's campaign has ignited a growing nationalism movement. We're creating jobs and giving them away. We've let globalization get away from us. It's abundantly clear that we don't have the right public policies in place to incentivize corporations to keep Americans gainfully employed.
Back in 2010, former Intel chairman Andy Grove penned How America Can Create Jobs. The front-page Bloomberg BusinessWeek feature clearly outlined the perils of losing our manufacturing muscle and declared the need for public policy that puts jobs first, even if it does means constraining free trade with tariffs, trade war be damned.
Grove's bold piece was embraced by some, panned by others and largely ignored. Whether he or Trump have exactly the right solution to the globalization and immigration problems plaguing free-market economies throughout the western world doesn't matter. What matters is that they've identified a problem that needs to be solved before it's too late. So did the British people when they voted to exit the EU.
Economic prosperity and security must trump political correctness and ideology. The Brits got it right. Will we?
[Sep 01, 2016] Demand-Driven University Delivers Pay Dirt for Vice-Chancellors
Notable quotes:
"... By Leith van Onselen is an economist and has previously worked at the Australian Treasury, Victorian Treasury, and Goldman Sachs. Originally published at MacroBusiness . ..."
"... The Australian ..."
Sep 01, 2016 | www.nakedcapitalism.com
Posted on September 1, 2016
Lambert here: It looks like the United States isn't the only country to have credentialism and corruption problems in its universities; or too few jobs chasing too much student debt.
By Leith van Onselen is an economist and has previously worked at the Australian Treasury, Victorian Treasury, and Goldman Sachs. Originally published at MacroBusiness .
I have complained previously that Australia's universities have turned into 'degree factories', whereby they teach as many students as possible to accumulate Commonwealth government funding through HELP/HECS debts. At the same time, quality of teaching, and students' ability to secure subsequent employment, remain distant priorities.
This view is evidenced by the escalation of total outstanding HELP loans, much of which will never be repaid, putting increasing pressures on the federal Budget:
... ... ...
There is, however, one segment of society that has benefited greatly from the uncapping of university places in 2009, which led to a $2.8 billion taxpayer-funded bonanza for universities: vice chancellors. As reported in The Australian earlier this week ( here and here ), vice chancellors have seen their salaries balloon since the demand-driven university system was implemented, with nine now earning more than $1 million per year:Jay , September 1, 2016 at 11:54 amNine vice-chancellors earned more than $1 million each last year, with University of Sydney chief Michael Spence topping the list with a salary package of $1,385,000. [Dr Spence's] salary package has increased by more than 60 per cent since 2010 when he earned $849,000
Fred , September 1, 2016 at 12:36 pmIn a classic university setting, the point of getting an education . . . is to become educated. Employment prospects are incidental, as it is assumed that someone who has the capability and perseverance to attain a degree has learned *how* to learn, how to negotiate the tricky choices of young adulthood, and how to survive the many perils of academia, would be a good employment prospect.
'degree factories' Hah. In Michigan we have "dropout" factories that accomplish the same objectives – full employment at high wages for executives and administrators of said universities. As you say "Nice work if you can get it!" Better have a phd and connections though .
[Sep 01, 2016] The scholarly publishing world has become quite a racket.
Notable quotes:
"... The scholarly publishing world has become quite a racket. I work at a small community college and our monograph budget has been eaten away over the years due to the high & continually increasing costs of subscriptions to academic journals, trade and general magazines. ..."
"... In 2015, Elsevier reported a profit margin of approximately 37% on revenues of £2.070 billion. ..."
"... I'm sensing a resurgence of the conversation, what with trade pacts and digital rights and whatnot. How can an abstraction have wants? Information may be very cheap to reproduce but takes energy to maintain. ..."
Sep 01, 2016 | www.nakedcapitalism.com
Cynthia , September 1, 2016 at 2:20 amJim Haygood , August 31, 2016 at 8:05 pmAs a librarian in Canada, I can tell you that my profession has long advocated for open access to scholarly research. There are many institutions with policies that ask or expect their faculty to publish in open access journal or institutional repositories. https://en.m.wikipedia.org/wiki/Open_access
The scholarly publishing world has become quite a racket. I work at a small community college and our monograph budget has been eaten away over the years due to the high & continually increasing costs of subscriptions to academic journals, trade and general magazines.
It is crazy that libraries in public institutions are paying so much money to access research funded wholy or in part by themselves or other public institutions. Advocating for open access and advising faculty about their options and advocating that they not give away copyright to big publishers like Wiley and Elsevier is part of what many academic librarians do these days.
Cynthia , September 1, 2016 at 2:26 amUpload a paper, starve an Elsevier:
In 2015, Elsevier reported a profit margin of approximately 37% on revenues of £2.070 billion.
"Knowledge wants to be free."
Steve H. , September 1, 2016 at 10:30 amThe phrase is "Information wants to be free". Here's an interesting origin story: https://backchannel.com/the-definitive-story-of-information-wants-to-be-free-a8d95427641c#.fbf9cq38l
That's a wonderful story, Cynthia, thank you.
I'm sensing a resurgence of the conversation, what with trade pacts and digital rights and whatnot. How can an abstraction have wants? Information may be very cheap to reproduce but takes energy to maintain.
Excellent back and forth between Woz and Brand.
[Aug 29, 2016] T he Charter Schools as a classic neoliberal and libertarian wet dream
Aug 29, 2016 | www.nakedcapitalism.com
steelhead , August 29, 2016 at 2:49 pm
Adam Eran , August 29, 2016 at 5:12 pmAs a individual who graduated from Nampa(Idaho) High School before 1980, I find the "Charter School" as a classic neoliberal and libertarian wet dream. No collective contract interference, the support of Bill Gates(educated exclusively in private schools) and another crony capitalism scheme. The public education system has been fu**ked.
jo6pac , August 29, 2016 at 6:33 pmWorth noting: The "reformers" (like Michelle Rhee) promote merit pay (because teachers are so financially motivated), (union-busting) charter schools and testing, testing, testing as the means to improve educational outcomes. No science validates this.
Yet with billionaire funding, "reformers" have even made a propaganda film: "Waiting for Superman" touting Michelle Rhee's "tough love" approach to school management (she fired lots of D.C. teachers), and holding up Finnish schools as the ones to emulate.
Don't get me wrong, the Finns have great schools. But Waiting for Superman neglects to mention that the Finnish teachers are well-paid, tenured and unionized. Curious omissions, no?
So while the "reformers'" tactics fail scientific validation when compared to educational outcomes, one thing does not fail: Educational outcomes correlate strongly with levels of childhood poverty.
Finland's childhood poverty rate: 2%. Meanwhile, in the U.S., it's 23% (and headed north).
Could this entire focus on schools out of their social context, without any reference to what science says, be a gigantic campaign of misdirection, distracting Joe Public from the plutocracy we live in?
and is that pope fellow still catholic? (for more, see http://www.notwaitingforsuperman.org/ )
Benedict@Large , August 29, 2016 at 6:56 pmThe other cool thing about schools in Finland is the teachers stay with their students as they move up in grades.
Years ago the gentleman who created the Finnish system was asked why he didn't come to Amerika and help our system. The answer was Amerika is head down and no one in power cares. Doomed
Chaster schools are about one thing, and one thing only. Wall street gets access to (and takes a cut of) the cash flow stream of our tax money before it gets to where we wanted it spent. All privatization efforts are about this same thing.
Secure steady cash flows (and tax levies are one of the largest) have a valur, and that value can be sold to private investors. That's what Wall Street does with privatization; sell off the value of our taxes as cash flow.
All of this means less of your tax money gets to where you want it to go.
[Aug 27, 2016] Economist's View Today's Inequality Could Easily Become Tomorrow's Catastrophe
Aug 27, 2016 | economistsview.typepad.com
Today's Inequality Could Easily Become Tomorrow's Catastrophe
Robert Shiller:Today's Inequality Could Easily Become Tomorrow's Catastrophe : Economic inequality is already a concern, but it could become a nightmare in the decades ahead, and I fear that we are not well equipped to deal with it. ...One way to judge the likely outcome is to look at what has happened in the past. ...Kenneth Scheve ... and David Stasavage ... looked at 20 countries over two centuries to see how societies have responded to the less fortunate. Their primary finding may seem disheartening: Taxes on the rich generally have not gone up when inequality and economic hardship has increased. ...Professor Scheve and Professor Stasavage found that democratic countries have not consistently embraced more redistributive tax policies, and most people do not vote strictly in their narrow self-interest. ...This is consistent with my own survey results, which focused on inheritance taxes. ... Taxing around a third of wealth, more or less, seemed fair to people. And perhaps it is reasonable, in the abstract, yet what will we do in the future if this degree of taxation won't produce enough revenue to meaningfully help the very poor as well as the sagging middle class? ...Angus Deaton..., commenting on what he called the "grotesque expansions in inequality of the past 30 years," gave a pessimistic prediction: "Those who are doing well will organize to protect what they have, including in ways that benefit them at the expense of the majority. " And Robert M. Solow ... said, "We are not good at large-scale redistribution of income." ...No one seems to have an effective plan to deal with the possibility of much more severe inequality, should it develop. ...Despite past failures, we should not lose hope in our ability to improve the world. ...vic twente : , Friday, August 26, 2016 at 10:17 AMWow, even Shiller's going heterodox.pgl -> vic twente ... , -1Shiller made his name challenging the Efficient Markets Hypothesis. I would call that heterodox even if it won him a Nobel Prize. BTW - many economists have noted that we have not done nearly enough to slow growing inequality. Good to see Shiller's emphasis on this.rayward : , -1Excessive inequality is self-correcting, absent intervention by the government and the central bank. History confirms it, recent history (2008) no less. Excessive inequality leads to excessive risk taking (as aggregate demand and returns falter) and ultimately financial crisis and collapsing asset prices. Collapsing asset prices, in turn, correct excessive inequality (since the wealthy own most of the assets). Of course, the correction can be painful; hence, intervention by the government and central bank to restore asset prices and, hence, inequality for the process to repeat. In his book, Piketty assumes that governments and central banks will always intervene in a financial crisis. Really?Death Cry O F A Rally -> rayward... , -1pgl : , -1
collapsing asset prices. Collapsing asset prices, in turn, correct excessive inequality (since the wealthy own most of the assets). Of course, the correction can be painful;
"painful to those who own the assets, the overlords! Painful until FG buy up enough MBS, mortgage backed securities to prop the price of both MBS and the underlying asset, the houses enough to reinforce the inequality, buy up securities and simultaneously expand the money stock to inflate prices. Hey! If we can just prop up the price of your home, them poor folks will never be able to move into your neighbourhood. Happiness is never having to say, "There goes the
neighbourhood
" --Never trust Mankiw without reading the source:djb : , Friday, August 26, 2016 at 11:48 AMhttp://gregmankiw.blogspot.com/2016/08/uwe-reinhardt-on-obamacare.html
Did Uwe Reinhardt claim a free market health care system is good while ObamaCare is doomed? Here is Uwe and this is not what he said:
http://www.vox.com/2016/8/25/12630214/obamacare-marketplaces-death-spiral
We should hammer Mankiw's comment box. Oh wait – he closed it.
"Despite past failures, we should not lose hope in our ability to improve the world. ..."Peter K. : , Friday, August 26, 2016 at 12:45 PMyea because the economic solution is simple, people need to keep shouting it
"Despite past failures, we should not lose hope in our ability to improve the world. In a recent column, I described ways in which society might change a deep-rooted sense of entitlement by radically broadening wage and job insurance. Such a program would be a start in getting us prepared to deal with some of the immense challenges that may lie ahead."pgl : , -1And what are Hillary's center-left proposals to tackle inequality? Minimal. Even center-left flack Krugman admits her infrastructure plans are substantially too small.
What are her plans for revenue sharing and aid to the states? Does she have any? I doubt it.
Just the typical "leverage" the private sector with inducements.
We need to become much more like the European welfare-states but center-leftists like Hillary say it's a bad idea.
ECB buying corporate bonds. An enhanced version of QE:pgl -> pgl... , -1https://www.ft.com/content/2e4c5b94-693f-11e6-a0b1-d87a9fea034f
The goal is to lower corporate bond spreads and it seems to be working. Of course this news will drive our gold bugs insane.
This measure of the credit spread for AAA rated US corporate bonds puts it at 0.77%:ken melvin : , -1https://fred.stlouisfed.org/series/BAMLC0A1CAAA
In Europe, it is only 0.35% right now. Maybe the FED should do something similar.
Information Subway : , Friday, August 26, 2016 at 06:02 PM
How to cope with our changing economics:Citizens of the United States and Europe now live in a very changed economic environment, an economic environment different from that of the middle twentieth century, different from any we have ever known, different from any that ever existed. Coming off a period of some forty years of the mid twentieth century during which jobs in industry provided the basis of the economy, and, through unions, the most significant means of wealth distribution, we are now well into the post industrial age, an age of technology, a time when we don't have good and sufficient mechanisms for insuring wealth distribution. Going forward, there will less and less demand for labor for fewer and fewer good jobs; labor will lose leverage, any claim to parity it might once have had.
What to do in the face of this great transition? In the past, with such periods of great transitions, we simply muddled through. It took about 175 years to go from agrarian based economic model to an industrial based economic model that worked well. During which, every draconian solution imaginable was applied at least once while good, well intentioned minds sought solutions to the problems presented by the transition.
The first step may be to recognize the change, the magnitude of the change. How long before the leaders of the eighteenth century grasp the scope, scale of the change? What prompted Smith to take his critical look? Was Smith without prejudice? Why the appearance of continuum from slavery, serfdom, and capitalism? How great the weight of the status quo when looking at a time of transition?
We are now some forty years into this great transition. Its coming was not a real surprise; but rather a common topic in every computer science class in every university by the late nineteen sixties. Was Rawls our Smith? Who will be the Marx and how long before he or she steps on stage? Fair to say any great insight will again come from philosophers? Why philosophers? Because such as laws and economics change when we change the way we think about such things. This mean that we will not break the bonds of the past until we take a critical look at the present. The answer to the problems created by this great transition do not lie in the past. No, presidential and congressional candidates, we do not need to go back to what we were doing in the past; we need to adapt to the reality of our new technology based age.
Most of the economic models in use today evolved to facilitate the economics of the industrial age. Our adaptation to this new technologically dominated, resource constrained, era will certainly require changes to these economic models. We might even be better off to start anew; to not carry forward the remnants of slavery, serfdom, … capitalism - to let the application dictate.
most people do not vote strictly in their narrow self-interest. ...Il carnevale di Venezia -> Information Subway... , -1This is consistent with
"
~~Robert Shiller~Most folks do vote strictly their own interest when there is a policy to vote. In USA most of what we vote is not policy but nominee. Sure!
There was proposition 13 in California, but most of our choices are between two nearly identical candidates equally capable of robbing the poor.
At the moment political solution to inequality is merely a dream. A more practical solution to inequality is frugality, hard work, and strict birth control that will shrink the labour force thus raise wages by the law of supply and demand
unemployed work force / wage level / job openings
supply / price / demand
Birth control will raise wages. Politicians will only rob the poor. Hey! They can't rob the wealthy. Wealthy are heavily armed,
armed and
dangerous --
David : , Friday, August 26, 2016 at 07:12 PM
Did a famous investor once quip, "I can pay half the workers to knock up the other half of the workers"?Imprecisely, yet left us with a
timely economic
principleThe problem of income inequality, which has been deepening these past thirty years, is profound and has potentially complex consequences.Peter K. -> David ... , -1First is economic. Advanced economies still depend largely on consumer spending. IF that money is sitting in equities accounts or tax havens it's sitting idle and demand is slack.
Second is ethical:the purpose our government is to "promote the general welfare". Human well being, because we are social and sentient, is relative; if we are poorer than our neighbor, we feel bad. If we are poorer than our parents, we feel a failure (some at least).
Third, most darkly, is political.If we continue down the current path of inequality, demagogues, racial acrimony and scapegoating, and all manner of instability could ensue.
The US is still a very rich country, and there is no need to risk divisions that would harm even the top 1 percent.
"Third, most darkly, is political.If we continue down the current path of inequality, demagogues, racial acrimony and scapegoating, and all manner of instability could ensue."The sellout totebaggers like PGL want to point the finger at Republicans but it's the center-left who are not doing enough to solve the problem.
All PGL's BS is a red herring.
[Aug 25, 2016] Trump University Was a Massive Scam
Aug 25, 2016 | www.nationalreview.com
Mitt RobmeyYes, Trump University Was a Massive Scam
Many people believe that higher education is a de facto scam. Trump University, Donald Trump's real-estate institution, was a de jure one.
First thing first, Trump University was never a university. When the "school" was established in 2005, the New York State Education Department warned that it was in violation of state law for operating without a NYSED license. Trump ignored the warnings. (The institution is now called, ahem, "Trump Entrepreneur Initiative.") Cue lawsuits.
Trump University is currently the defendant in three lawsuits - two class-action lawsuits filed in California, and one filed in New York by then-attorney general Eric Schneiderman, who told CNN's New Day in 2013: "We started looking at Trump University and discovered that it was a classic bait-and-switch scheme. It was a scam, starting with the fact that it was not a university."
Trump U "students" say the same. In his affidavit, Richard Hewson reported that he and his wife "concluded that we had paid over $20,000 for nothing, based on our belief in Donald Trump and the promises made at the [organization's] free seminar and three-day workshop." But "the whole thing was a scam."
In fact, $20,000 is only a mid-range loss. The lead plaintiff in one of the California suits, yoga instructor Tarla Makaeff, says she was "scammed" out of $60,000 over the course of her time in Trump U.
How could that have happened? The New York suit offers a suggestion:
'The free seminars were the first step in a bait and switch to induce prospective students to enroll in increasingly expensive seminars starting with the three-day $1495 seminar and ultimately one of respondents' advanced seminars such as the "Gold Elite" program costing $35,000. At the "free" 90-minute introductory seminars to which Trump University advertisements and solicitations invited prospective students, Trump University instructors engaged in a methodical, systematic series of misrepresentations designed to convince students to sign up for the Trump University three-day seminar at a cost of $1495.'
The Atlantic, which got hold of a 41-page "Private & Confidential" playbook from Trump U, has attested to the same:
'The playbook says almost nothing about the guest speaker presentations, the ostensible reason why people showed up to the seminar in the first place. Instead, the playbook focuses on the seminars' real purpose: to browbeat attendees into purchasing expensive Trump University course packages.'
To do that, instructors touted Trump's own promises: that students would be "mentored" by "handpicked" real-estate experts, who would use Trump's own real-estate strategies.
But according to the New York complaint, none of the instructors was "handpicked" by Trump, many of them came from fields having nothing to do with real estate, and Trump "'never' reviewed any of Trump University's curricula or programming materials." The materials were "in large part developed by a third-party company that creates and develops materials for an array of motivational speakers and seminar and timeshare rental companies."
Furthermore, Trump's promises that the three-day seminar ($1,495) would include "access to 'private' or 'hard money' lenders and financing," that it would include a "year-long 'apprenticeship support' program," and that it would "improve the credit scores" of students were empty.
Those empty promises are the subject of a new series of anti-Trump ads by superPAC American Future Fund. According to Bob, "I never heard from anybody about giving me a list of hard-money lenders". Kevin, another Trump U "student," says Trump University "ruined" his credit score. And according to Sherri, a single mother who participated in Trump U: "It was all supposedly supervised by Donald Trump, run by Donald Trump. All of it was just a fake."
In fact, Sherri isn't alone. No student ever met the Donald. Despite hints from Trump University instructors that Trump was "going to be in town," "often drops by," or "might show up," he never did. As Matt Labash recounted in The Weekly Standard: "At one seminar, attendees were told they'd get to have their picture taken with Trump. Instead, they ended up getting snapped with his cardboard cutout." Bob, above, had such an "opportunity".
There could be many more ads to come. The New York lawsuit alone represents some 5,000 victims.
Meanwhile, Trump - who maintains that Trump University was "a terrific school that did a fantastic job" - has tried to bully his opponents out of the suit. Lawyers for Tarla Makaeff have requested a protective order from the court "to protect her from further retaliation." According to court documents, Trump has threatened to sue Makaeff personally, as well as her attorneys. He's already brought a $100 million counterclaim against the New York attorney general's office.
But it's not working. Trump himself will have to take the witness stand in San Diego federal court sometime during the election season - and because of the timeline of the cases, a "President Trump" would be embroiled in these suits long after November.
Meanwhile, if there is any doubt that Trump U was designed to be a scam, The Atlantic puts that to rest with a few other choice tidbits from that "Private & Confidential" playbook used by Trump presenters:
'Every university has admission standards and Trump University was no exception. The playbook spells out the one essential qualification in caps: "ALL PAYMENTS MUST BE RECEIVED IN FULL." Basically, anyone with a valid credit card was "admitted" to Trump University. . . . If a member of the media happened to approach the registration table, Trump staffers were instructed not to talk to him or her under any circumstance. "Reporters are rarely on your side and they are not sympathetic," the playbook advises.'
And: At one point, the playbook advises Trump staffers: "If a district attorney arrives on the scene, contact the appropriate media spokesperson immediately." Sounds legit.
Read more at: http://www.nationalreview.com/corner/432010/trump-university-scam
[Aug 25, 2016] Credentialism and Corruption Vile College Presidents Edition
Welcome to Neoliberal U!
Notable quotes:
"... The corruption I'm going to describe seems more along the lines of converting a public institution to serve private purposes (assuming higher education to be a public institution, which I do, because education is a public good)[3]. ..."
"... Now, human nature being what it is, a certain amount of empire-building and concern for one's rice bowl has always been inevitable, but when greed for one's self, or one's class, becomes the institutional driver, it's time for a thorough cleansing. ..."
"... New York University students carry some of the highest debt loads in the nation, a fact they are bound to remember through gritted teeth when they read the New York Times report about the school's loans to top faculty for vacation homes in places like Fire Island and the Hamptons. ..."
"... The house, which is owned by John Sexton, the president of New York University, was bought with a $600,000 loan from an N.Y.U. foundation that eventually grew to be $1 million, according to Suffolk County land records. ..."
"... I think this perfectly describes what I've observed with public school superintendents also. They are like 'The Music Man.' Selling dreams that our children will be smarter, better looking, and above average if we just get with the program. While our school district has a local in charge who appears to be here for the long term, a neighboring district had a 'Music Man' or rather, woman, who got the city to float a $10 million bond issue so every fourth grader could have an I-Pad. She then left to do the same (for a higher salary) in another state. Another, much poorer, district nearby wanted to get rid of a super who had allegedly threatened subordinates with bodily harm: they bought out her contract for $300,000. In a county with a population of 20,000 and ten percent unemployment. ..."
"... It is not only at the college level that those in charge are engaging is questionable behavior. It is a society wide problem. ..."
"... To a naive student with no experience in institutional politics, their stories of resentment, gossip, backbiting, and the politics of personal reputational destruction were like a glimpse into an unimagined world. ..."
"... It used to be that there was a saying in academe: the competition is so great because the stakes are so low. But, if there is a path to six or seven figures, now I see that there is serious cash to be banked to justify working in the university racket. ..."
Aug 24, 2016 | www.nakedcapitalism.com
By Lambert Strether of Corrente .I haven't posted on higher education before, and a series of posts on credentialism really should focus on the institutions where those credentials are, in the main, granted. But rather than a serious analytical piece on the state of the university, this will be a light-hearted romp through some spectacular examples of executive malfeasance at NYU, Baylor, and Penn State.[1] (Tomorrow I'll look at the adjunct system, and potential effects of yesterday's NLRB decision . And there will be more posts to come on this topic, as I come to understand it better.)
Before I begin, though, let's recall Zephyr Teachout's definition of corruption. Not a quid pro quo - that's the Citizen's United doctrine, now supported by the Clinton campaign - but the use of public office for private ends. What does corruption look like in a university setting, given that some universities are private to begin with, and that "ends," in the ancient and tricky academe, may not always be immediately evident?
Here's a story from the University of Maine, Maine's "flagship" university. Our last President, Robert Kennedy, gave the contract for sports broadcasting to ClearChannel, thereby moving the profits out of state, because he took the contract away from Stephen King's radio station (yes, that Stephen King). Naturally, this ticked King off, and King - up to that point the university's largest donor, and the funder of many good works round the state, like dental clinics and libraries - decided he would no longer give to the university. (Kennedy then rotated out to the University of Connecticut, for a hefty salary increase, where he was shortly axed by the Regents for a cronyism scandal . Dodged a bullet, there, Maine!)
Dollying back to the larger picture, King came up through the much despised and derided English Department, in the humanities, which powerful institution forces in the administration and the Board of Trustees are shifting resources away from, in favor of more pragmatic, "business-friendly," corporate majors (graduates, that is, that they themselves can hire[2]. Even though King was the university's largest donor.)
Is there corruption here? I would argue yes, but I'm not sure that Teachout's definition quite meets the case. The corruption I'm going to describe seems more along the lines of converting a public institution to serve private purposes (assuming higher education to be a public institution, which I do, because education is a public good)[3]. This is evident from the King story in two ways. First, Kennedy is only one of many university administrators who stay a couple years at an institution, punch their ticket, and move on to a higher salaried position elsewhere. Second, optimizing university curricula, grounds, personnel decisions, etc. for corporate ends is about as corrupt as you can get (as are the concomitant rationalizations and cover-ups that occur when scandal breaks). Now, human nature being what it is, a certain amount of empire-building and concern for one's rice bowl has always been inevitable, but when greed for one's self, or one's class, becomes the institutional driver, it's time for a thorough cleansing.
With that, let's look at the case of John Sexton, once President of NYU. (NYU is an important nexus for the Democrat nomenklatura , so we'll have more to say about NYU in the future.)
John Sexton, NYU
John Sexton (salary: $1.5 million ) was President of New York University from 2002 to 2015, and for a portion of that time doubel-dipped as Chairman of the Board of the Federal Reserve Bank of New York. For the connoisseur of corruption, his long tenure provides an embarrassment of riches - the union busting , the faculty no-confidence votes , the Abu Dhabi debacle (among other issues, the campus was built using slave labor ), the lavish compensation packages , the tacos made from endangered shark meat - but I'm going to focus on just one. The apartments. No, I don't mean the faculty apartment NYU remodeled for Sexton's son :
NYU gave president's aspiring actor son apartment on campus
Jed Sexton, whose sole affiliation with NYU was his status as the president's son, for years enjoyed a spacious faculty apartment while the university experienced a "severe" housing shortage, The Post has learned.
In spring 2002, NYU ordered that a pair of one-bedroom apartments normally reserved for law school faculty be combined into a lavish, two-story spread in the heart of Greenwich Village, property records show.
The Harvard-educated Sexton, who was a 33-year-old aspiring actor at the time, shared the new duplex with his newlywed wife, Danielle Decrette, for the next five years, according to documents and people briefed on the situation.
That's despite the fact that NYU officials, just weeks earlier, had warned in a written report of a "severe housing shortage" for faculty, "especially of larger units."
How cozy! No, I mean the vacation properties, plural, that NYU under Sexton doled out as perks to insiders :
NYU Offers Top Talent a Path to Beachfront Property
New York University students carry some of the highest debt loads in the nation, a fact they are bound to remember through gritted teeth when they read the New York Times report about the school's loans to top faculty for vacation homes in places like Fire Island and the Hamptons. The loans, which have gone to at least five faculty members in the medical and law schools as well as university president John Sexton, sometimes get forgiven over time as their recipients continue to work at the university. Mortgage loans apparently aren't unheard of as compensation packages for professors and executives in tight real estate markets, but they're usually for homes, not vacation properties.
From the New York Times , which broke the story, it seems that Sexton gifted himself a house, an "an elegant modern beach house that extends across three lots":
The house, which is owned by John Sexton, the president of New York University, was bought with a $600,000 loan from an N.Y.U. foundation that eventually grew to be $1 million, according to Suffolk County land records.
Since the late 1990s, at least five medical or law school faculty members at N.Y.U. have received loans on properties in the Hamptons or Fire Island, in addition to Dr. Sexton.
While that feeling is understandable, it is important to note the economic truth that the markets for different positions often dictate different levels of compensation, whether that is embodied in salary payments, loans, or an overarching agreement about terms of employment. And, when we commit to provide such compensation, we do so only when we are sure
that the benefit to the University far exceeds the cost.
First, CEO compensation and shareholder returns are inversely correllated ; even if we grant Dorph's premise, and a corporate model for the university, it's just not clear that top compensation means top talent. Second, why doesn't NYU simply pay its talent more? Why complicate matters by bringing in vacation housing? Why not just write a fatter check? The answer can only be arbitrage of some sort: NYU giving access to property that otherwise isn't on the market, tax advantages of some kind, a better rate on the mortgage, or whatever; some way in which NYU uses its muscle on behalf of the compensated. But that is, precisely, converting a public institution to serve private purposes. Not to mention Sexton openly using NYU facilities to house his son and for his own vacation home on Fire Island. Come on. Why is that not self-dealing? And the rest of looks suspiciously like powerful faculty members feathering their own nests. "Why not? We deserve it."
Naturally, NYU has learned nothing, and is in fact doubling down: " N.Y.U. President's Penthouse Gets a Face-Lift Worth $1.1 Million (or More) ." For Sexton's successor, Andrew Hamilton (salary: not disclosed):
The 19th and topmost floor of the building will be turned into a master-bedroom suite, where Dr. Hamilton will have private exits - one from the bedroom and one from the bathroom - onto a terrace overlooking Washington Square and, to the south, the financial district skyline, according to documents filed with New York City.
"Private exits." Perhaps he'll need them.
Ken Starr, Baylor University
We now turn to the simpler case of Baylor President Ken Starr (salary: $1 million ), last seen unloading a dumpster-load of lascivious footnotes onto the steps of Capitol Hill during the Lewinsky matter (thank you, Monica, for helping to save Social Security from Bill Clinton ). Former Manhattan assistant DA Bennett L. Gershman has a good summation, in full "What did he know, and when did he know it?" mode:
Baylor University, the country's largest Baptist university and a bastion of Christian values, has just been denounced in a blistering report by the University's Board of Regents for "mishandling" - covering up might be a more apt description - credible allegations of horrific sexual violence against female students, especially alleged assaults by members of the football team. The Board of Regents said it was "shocked," "outraged" and "horrified" by the extent of the acts of sexual violence on the campus, which covered years 2012 through 2015, and the failure of the University to take appropriate action to punish violators and prevent future violations. The Board issued an "apology to Baylor Nation," fired the football coach, and "transitioned" (the Regents' term) Baylor's President, Kenneth Starr, to the role of Chancellor. Starr also was allowed to retain his lucrative Chair and Professorship of constitutional law at Baylor's law school .
As Baylor's president from 2010 to 2016, the vexing question is the level of Starr's culpability for the "shocking," "outrageous," and "horrendous" sex scandal. What exactly did Starr know? The allegations of sexual violence on the campus were rampant and notorious, especially by the football players. Starr had to know something about the extent of the University's response to the complaints, and most likely the failure to address these complaints properly. Indeed, there were several Title IX investigations by the Justice Department at the time that Starr must have known about. Moreover, there are plenty of egregious examples of sexual violence on the campus that had to have been reported. In one egregious case, an All-Big 12 football player was accused in 2013 of sexual violence against a student. Although Waco police contacted university officials, nobody in the university investigated the case until two years later, after a Title IX investigation was underway, and media reports highlighted the case. This was after several other Baylor football players were indicted and convicted of sexual assaults. It was only then that the University hired an outside investigator. Notably, the headlines also prompted a public outcry, and a candlelight vigil at Starr's residence.
The Board of Regents Report describes the breadth of the independent investigation into the university's failure to properly address the University's dereliction. The investigators interviewed numerous University officials, but there is no mention whether they interviewed Starr, and if so, what he may have said. Starr may have claimed to be unaware of the repeated failures of university officials to investigate these complaints, but is that contention credible? Starr presumably had to know that aggressively investigating these allegations - indeed, as aggressively as he investigated the sexual misdeeds of President Clinton - might have interfered with his intensive multi-million dollar fundraising efforts to build a new and lavish football stadium, which opened in 2014. And Starr may have believed that getting too deep into the mud of the roiling sexual scandal would undermine the public perception of Baylor's "Christian commitment within a caring community" - again the Board of Regents' description - as well as compromise the heroic efforts of the Baylor football team to win a national championship.
So Starr is no longer the university's president. To be sure, it's a demotion of sorts. He was allowed to keep his Chancellorship, which he just relinquished, but he still gets to keep his Chair and Professorship at the Law School. One might think this is not a very harsh result, certainly not if Starr knowingly violated federal law, or by his deliberate indifference allowed serious criminal conduct to take place at the university he led.
Alternet is, as one would expect, a bit more direct in connecting the dots :
Not to put too fine of a point on it, but Ken Starr is accused of ignoring sexual violence at Baylor University mostly because doing something about it would have jeopardized a cash cow.
(Note that the disgraced Baylor football coach's salay, $6 million , was six (6) times college President "Judge Starr." Starr will also retain his position on the faculty. Priorities!) The New York Times says what Alternet says , in its own more muffled language:
[Baylor] also fired the football coach, Art Briles, whose ascendant program brought in millions of dollars in revenue but was dogged by accusations of sexual assault committed by its players - an increasingly familiar combination in big-time college sports.
"Was dogged by." What we have here is a football team acting as a standalone, dominating entity , rather like a parasite controlling the behavior of the host univeristy:
Among the firm's findings was that football coaches and athletics administrators at the school in the central Texas city of Waco had run their own improper investigations into rape claims and that in some cases they chose not to report such allegations to an administrator outside of athletics.
By running their own "untrained" investigations and meeting directly with a complainant, football staff "improperly discredited" complainants' claims and "denied them a right to a fair, impartial and informed investigation."
Starr wanted the revenues. Briles wanted the revenues, the facilities, the salaries, the ticket to be punched, etc. Again, this is quite directly converting a public institution to serve private purposes. And like NYU, Baylor appears to have learned nothing. Starr still has a job, and was never censured. The full report was never released. And from an ad taken out by Baylor alumni : "Thank You Judge Ken Starr - For your integrity, leadership, character and humble nature."
Eric Barron, Penn State
Finally, we come to Eric Barron, President of Penn State (salary: $1.2 million with incentives ). I'm not going to focus on whether Penn State hiring Barron in the wake of his dubious handling of a festering rape scandal at Florida State was odd , or not. And I'm not going to focus on climatologist Barron's relationship with Koch Brothers funding . Or his conflation of "incredulous" with "incredible"; who among us, etc. No, I'm going to focus on this amazing piece of puffery. From an interview with Barron on "entrepreneurship" and "proactive leadership" :
ERIC J. BARRON: We actually have launched a whole program, which is titled " Invent Penn State ," and there are several different elements of this. One is to do more to incentivize people on campus to get their ideas out into the marketplace. We have many, many student events that are competitions and have scholarship funds at the end of it. The second part of it is to add more visibility to our intellectual property. A third part is to build an ecosystem around our campuses that promote startups and partnerships with communities.
A general view, in my opinion, is that many universities are focused on this topic as a source of revenue, not as educational experiences for students and opportunities for them to do startups. We have a lot of effort on the student side. The minors have expanded. I think we have six or seven entrepreneurship minors now that are embedded in curriculum for different colleges if you want. Last year, we started having any student with any major to be able to get all the credits equivalent to a minor in business. There's a lot on that side plus startup weeks and other activities with a scholarship side of it.
We have funded but have not yet cut the ribbon on a total of 20 incubators and accelerators around the state of Pennsylvania associated with our campuses. In March, we cut the ribbon on what's called Happy Valley Launch Box, which is here in State College, with the idea of having 30 startups in there at any one time. I think we had about 15 before even 30 days. All of these have gone through some sort of vetting process or competition for which they were winners. It's growing just left and right. Many of them, we've given them seed money and they've gotten many times more money from their community and other partners that want to enable the students.
Never mind converting an entire student population into "winners" and "losers." Never mind that 90% of start-ups fail . Never mind that when startups succeed, it's as much a matter of luck, and especially the luck of having been born into the right social network. Thomas Frank has already described Barron's program, and where it leads. This is the innovation cult ! Quoting Frank once more:
I just finished Thomas Frank's excellent Listen, Liberal , and he has a great rant about "innovation," of which I will show a great slab here, from p 186 et seq. Frank even helpfully quotes the more egregious bullshit tells, so I don't have to highlight them! Do read it in full. After visiting hollowed out mill town Fall River, Frank goes to Boston:
And:
Let's also leave aside the issue of whether "innovation" culture increases "income inequality." Suppose Penn State structures its curriculum to optimize for startups (and not for education as such; critical thinking skills, the construction of narratives, the sciences, research, even (relatively) humdrum majors like accounting). What happens to the students when 90% of their startups fail, as history tells us they will? What will they have to fall back on, if everything has been optimized for startups, and the rest of the university's assets have been stripped?
The future lies ahead on that question. For now, I'm uncertain whether "the innovation" cult is corrupt as such, or not. Certainly it provides almost limitles opportunities for backscratching, logrolling, bezzle creation, and so forth. And Barron seems to conceive of it as a big revenue generating opportunity for Penn State (rather like the football team, if it comes to that). If the program fails, and is seen to fail, will Penn State learn from the experience? It's hard to know, but Barron's handling of the fallout from the Sandusky matter does not inspire confidence .
Conclusion
So, what we've got here is an NYU President handing a New York apartment, meant for faculty, to his son, and what looks rather like powerful faculty members feathering their own nests with cheap housing; we've got a Baylor President not wanting to cross a powerful and wealthy football team, even to the extent of failing to handle a rape scandal; and at Penn State we've got a President who's a member of the "innovation cult," when it's not at all clear this will benefit the student body as a whole. Have any of these institutions learned from these experiences? No. Are these college Presidents personally responsible for corruption at their universities - for converting a public institution to serve private purposes? Sexton and Start, yes. For Barron, the jury is still out.
And these are the institutions of higher education that are granting credentials. Not a good look. More examples from readers welcome!
NOTES
pretzelattack, August 24, 2016 at 1:11 pm
- [1] I should disclose my priors and/or prejudices: I'm a university brat with a humanities background. Family tradition mandates that I instinctively distrust college administrators, Big Football, fraternities, and sororities (and, my parents would urge, for very good reasons). Only the first two will be at issue here.
- [2] That is, they're creating hires, as opposed to creating graduates some of whom might be creative enough to come up with businesses that compete with their own.
- [3] If you think that implies that neoliberalism is intrinsically corrupt, since it will put everything up for sale, including itself, you're not wrong.
Anonymous, August 24, 2016 at 1:12 pmiirc starr's work as independent counsel helped (was the biggest factor maybe) in getting the job at baylor.
trent, August 24, 2016 at 2:47 pmLambert:
'First, Kennedy is only one of many university administrators who stay a couple years at an institution, punch their ticket, and move on to a higher salaried position elsewhere.'
I think this perfectly describes what I've observed with public school superintendents also. They are like 'The Music Man.' Selling dreams that our children will be smarter, better looking, and above average if we just get with the program. While our school district has a local in charge who appears to be here for the long term, a neighboring district had a 'Music Man' or rather, woman, who got the city to float a $10 million bond issue so every fourth grader could have an I-Pad. She then left to do the same (for a higher salary) in another state. Another, much poorer, district nearby wanted to get rid of a super who had allegedly threatened subordinates with bodily harm: they bought out her contract for $300,000. In a county with a population of 20,000 and ten percent unemployment.
It is not only at the college level that those in charge are engaging is questionable behavior. It is a society wide problem.
Anonymous, August 24, 2016 at 3:06 pm'The Music Man.'
so fraud?
Jagger, August 24, 2016 at 8:51 pmFor willing dupes.
Arizona Slim, August 24, 2016 at 1:12 pmIt is not only at the college level that those in charge are engaging is questionable behavior. It is a society wide problem.
That is my impression as well-corruption is a society wide problem from top to bottom. The small town mayors, courts, police, newspapers, insiders, etc may be playing with small potatoes but corruption is corruption whether it is $1000 or a $1,000,000. I know it can't be everyone with a little power but way too many. Makes you doubt the whole system.
a different chris, August 24, 2016 at 1:43 pmGreetings from one of those coworking spaces that Mr. Frank took to task in Listen, Liberal .
Let me tell you a dirty little secret about this place. And, no, I'm not talking about who left a lunch in the fridge for too long. This is an even dirtier secret. Here it is:
Most of us are not innovators.
That's right. I said it.
The truth is, most of us are working on things that are, well, pretty run of the mill. Guy behind me is doing digital marketing work for his out-of-state employer, an ad agency. Lady over there is doing marketing for a resort in Mexico. Oh, and the guy who's my best friend here? We're both photographers. His other main hustle is graphic design and mine is writing for business.
We have a handful of what could be described as startups, but those businesses are definitely in the minority.
Wait, we pay you enrich yourself?, August 24, 2016 at 2:32 pmWell we don't need a sh&t pot full of "innovators" . we need people that can do what they do well. Does everybody have to create something "new"?? I don't think so.* Edison wasn't the greatest guy in the world overall, but as he said getting something up is 99% perspiration and only 1% inspiration – I think he would have spit at the word "innovation", btw.
In fact, he has another lesson for the "innovators" in that a lot of his perspiration was generated due to his efforts in stealing ideas from other people. Which is going to happen to almost all of the (if we take their optimistic slices) 10% that do come up with something anybody cares about.
*For a good example, I love the improvement of the American pub scene over the past few decades. But the best beer and grub isn't the best because it is "innovative" - sometimes it is a bit different, sometimes not - but because it is very, very well done.
Arizona Slim, August 24, 2016 at 4:00 pmSlim, in your home town town there is one of the perfumed princes that could have fit nicely into Lambert's post. Us AZ residents are paying neoliberal scumbag a premium price for their "talents" of enriching themselves.
Oh, and if you are referring to the same work space, I worked for a total pump and dump "startup", there.
Lambert Strether Post author , August 24, 2016 at 4:46 pmOh, brother. Ann Weaver Hart. Don't get me started.
Okay, I am started. So, here goes
A couple of summers ago, I was meeting with a longtime acquaintance and potential client on the University of Arizona campus. Madame Presidente was about to move her office into Old Main, which is the UA's oldest building. It's revered as this sacred space. Or something like that.
Any-hoo, I was in a pretty spacious office in a building near Old Main. But my meeting host told me that Ann Weaver Hart's Old Main *bathroom* was bigger than that office.
Yeesh.
Oh, as for the work space, were you involved in the one that had a pirate theme? Because that place was - and is - full of pump -n- dump startups.
Jim Haygood, August 24, 2016 at 1:23 pmI considered writing Anne Weaver Hart up, but the other ones were worse. There's only so much one can do to shovel back the tide
Lambert Strether Post author , August 24, 2016 at 2:50 pm'King came up through the much despised and derided English Department, in the humanities.'
Although not a product of the English department at my alma mater, Whatsamatta U., I knew some professors in the department.
To a naive student with no experience in institutional politics, their stories of resentment, gossip, backbiting, and the politics of personal reputational destruction were like a glimpse into an unimagined world.
Wait, we pay you to enrich yourself?, August 24, 2016 at 3:04 pmI know, I know. So totally unlike the corporate environment.
Lambert Strether Post author , August 24, 2016 at 3:41 pmIt used to be that there was a saying in academe: the competition is so great because the stakes are so low. But, if there is a path to six or seven figures, now I see that there is serious cash to be banked to justify working in the university racket.
Uahsenaa, August 24, 2016 at 5:12 pmAnd if you're an administrator, you can redistribute the budget to your own advantage by screwing the faculty, especially adjuncts.
DanB, August 24, 2016 at 2:05 pmNowadays I bristle when someone describes me as "faculty," even though it's technically correct, because it papers over the fact that some of the people doing the exact same job as me have full employment, a full salary, and fringe benefits, where the people in my position get paid per credit with no benefits. We are "permitted" to buy into university health insurance, at full cost, but that's the extent of our bennies.
If you're getting to the employment situation in a further post, I'll save my more extensive comments for that.
Lambert Strether Post author , August 24, 2016 at 2:51 pmUpdate: one of the articles cited in this essay says Ken Starr resigned from Baylor Law School and severed all ties with the university this past Friday.
As someone who has a university background, as a grad student in three different universities, and short stints as a faculty member and an administrator (I was shoved out/left in disgust from administration)- I attest that this kind of neoliberal thinking, which automatically generates converting public responsibility to private advantage, is commonplace. As readers here know, the university is a place where one must strive to present oneself - and simultaneously fool oneself - as creative and independent-minded within the confines of the matrix. This is most pronounced in the professional school because they are most beholden to corporate money. A final note: you will find the best to the worst of humanity in universities.Torsten, August 24, 2016 at 6:45 pmSo, karma works. Thanks for the update.
allan, August 24, 2016 at 2:35 pmDavid Riesman: "I would never advise anyone to go into teaching because the people are so nice."
Lambert Strether Post author , August 24, 2016 at 2:53 pmOne more for the honor roll: West Virginia University's former president Michael Garrison, who ordered the granting of an M.B.A. to
moral leperMylan CEO and Epi-Pen price optimizer Heather Bresch in 2007,trent, August 24, 2016 at 3:04 pmBlue Dog Joe Manchin's daughter . All things work together for good, don't they?
DrBob, August 24, 2016 at 4:17 pmseems like she's only where she is because of daddy
allan, August 24, 2016 at 4:37 pmThis particular CEO (and Senator's daughter) has a history of using Congress for favorable outcomes:
https://theintercept.com/2016/08/24/epipen-uproar-highlights-companys-family-ties-to-congress/
KurtisMayfield, August 24, 2016 at 3:21 pmTo paraphrase Harry Reid, Joe's with us on everything except
the warbasic human decency.Torsten, August 24, 2016 at 2:39 pmYou forgot to mention she was a Senator's daughter. That one is a combo of both government, corporate, and university corruption. Well done!
Ulysses, August 24, 2016 at 3:48 pmI have to repeat my favorite historical anecdote here (h/t the late, great Paul Goodman, from his Compulsory Miseducation, I believe).
It seems that in the summer of 1650, while the faculty was away helping in the fields, Henry Dunster sold Harvard to a group of Boston businessmen, creating the first Corporation in the New World, and making himself "President" thereof.
Now Wikipedia claims that Dunster "set up as well as taught Harvard's entire curriculum alone for many years, graduating the first college class in America, the Class of 1642". So perhaps Dunster was simply ahead of his time in creating the prototype for Trump University.
ekstase, August 24, 2016 at 4:11 pmAdministrators in academia hold themselves to the same high ethical standards as officials in government. In other words, they do whatever they can get away with, and then sputter about future "transparency," and "doing better," when their misdeeds come to light.
This blather from Austin, Texas, could just as well have come from Washington, D.C.:
"I've read the report a half-dozen times in totality, and I found no willful misconduct , no criminal activity on the part of any of the folks at the University of Texas at Austin, and have told the Board of Regents that I intend to take no disciplinary action," he said.
"Can we do things better? You bet," he continued. "Should we have been more transparent? Absolutely. Are we going to get this fixed? No doubt about it."
Mr. Powers pushed back against the report's suggestion that he had not been forthcoming, saying he had been "truthful and not evasive" in his dealings with investigators.
Investigators took a different view . "
http://chronicle.com/article/Admissions-Report-Chips-at/190021/
Lambert Strether Post author , August 24, 2016 at 4:48 pmJust a hypothetical question: what would one do if they felt they were losing some of their idealism?
Foppe, August 24, 2016 at 4:22 pmI very rarely laugh out loud; thanks, it's good for the health!
Foppe, August 24, 2016 at 4:44 pmMy $2c; apologies that they're a bit unpolished: One question you/we might ponder is how (a desire for) obvious nepotism engenders privatization, versus more "principled" demands for privatization of public goods/services. To give a very brief summary of the developments since WWII inspired by my reading of David Harvey's The Enigma of Capital : privatization became important once western economies 'matured', because of how this meant that there were ever fewer (obvious) opportunities for growth. And secondly because, once more and more people started getting degrees, there was an explosion in the number of people who were "trained" (only) for middle/upper management positions; for who there was fairly little demand in public institutions, probably because workers had decent unions/voice, so that the people who ran those places couldn't easily justify managerial metastasis and the taking away of job-related autonomy (to create demand for "decision-makers") by creating cultures of institutionalized distrust (via yammering about the importance of "accountability"). (Though the latter was/is still an issue, it gets worse the more neoliberalized the organizational mode gets, because of neoliberalisms implicit (rational-actor) misanthropic world view.) Those developments strike me as separate from the more narcissistic ( professional class/meritocratic-reasoning )-related forms of corruption/grift/etc. that you discuss above, though.
Lambert Strether Post author , August 24, 2016 at 4:50 pm(To clarify, Harvey doesn't talk about professionalization; that's just me combining observations made by Graeber with those made by Tom Frank in Listen, Liberal .)
Foppe, August 24, 2016 at 5:22 pmGraeber, or Harvey? The Harvey book looks interesting.
petal, August 24, 2016 at 4:28 pmHarvey's book is great; as for Frank & Graeber, I was thinking of Graeber's remarks about what he (in Debt) calls the crisis of inclusion (which he's also talked about elsewhere, e.g. in the Army of Altruists essay in Revolutions in Reverse ). Graeber there (as I assume you recall) only talks about the fact that those who don't belong to what Frank calls the professional class (and those who self-identify with them), only have the army and the church open to them if they wish to pursue goals other than accumulating money/power; yet the higher-ed explosion must've also had enormous consequences for the supply of people with managerial and similar training. But I only started pondering that question recently, after reading Frank woke me up to the obvious.
Lord Koos, August 24, 2016 at 4:37 pmUgh can we tack The World Bank's Jim Kim(former Dartmouth pres) on there, too?
Lambert Strether Post author , August 24, 2016 at 4:51 pmHow about Cooper Union president Jamshed Bharucha - who managed to screw up the school's endowment that had been in place since 1859. Check out the movie "Ivory Tower".
Fool, August 24, 2016 at 4:38 pmSee here .
Lambert Strether Post author , August 24, 2016 at 4:54 pmNYU is a school run by money, and it's so transparent that for a board populated by billionaires, run by a press-shy guy who helped a lot of them become billionaires, that they prop up the flamboyant Sexton's supposed fundraising abilities and "imperial" presidency. Fortunately for Sexton and NYU, he's paid enough money to take the press's lashings like a good boy.
But surely such a mediocre pedant isn't the mastermind behind the bloated, technocratic, real estate development company and vanity project (which also offers classes, which are taught by #publicintellectuals).
Michael Fiorillo, August 24, 2016 at 6:47 pmNew York real estate is a clean business, right? No story there .
relstprof, August 24, 2016 at 7:41 pmNYU: a real estate development company with a tax-exempt higher education subsidiary.
Carolinian, August 24, 2016 at 5:43 pmAnon, August 24, 2016 at 6:37 pmPam Martens has written several posts at Wallstreetonparade talking about NYU's corruption, connections to Wall St, and Jack Lew. Don't have links handy but easy to Google.
relstprof, August 24, 2016 at 6:44 pmI would like to point out that Chancellors Linda Katehi (UC Davis)and Nicholas Dirks (UC Berkeley) have both recently resigned under pressure from UC Top Honcho Janet Napolitano. It seems Administrator transgressions (impunity and self-dealing) are finding its way into the "sunlight".
Knute Rife, August 24, 2016 at 8:56 pmGood stuff. Really looking forward to future posts.
Some people starting up can get "small loans" of $1,000,000 from the old man and have those kinds of resources to fall back on if they flop. The other 99.99% of us? Not so much. How is this innovation dogma supposed to work for those of us who can't buy our way into the Creative Class?
[Aug 24, 2016] Good jobs disaappered and middle class had shruk dramatically in the USA
Notable quotes:
"... That said, what I believe is needed in the USA is a doubling down on Corporate Boards of Directors and CEOs to create a crisis, an American intervention, if you will, that demands companies bring back the idea that Profits alone are not all that matters. Serving the Nation you are born in, raised in, educated in, and then making a profitable income from certainly needs to be focused in on. ..."
"... An additional factor in the financial woes of the falling middle class is the changing demographics here in the US - the growing numbers of single mothers, who are far more likely to struggle financially than a two income household. I make no judgment regarding how people form their family units, but life is especially hard for single mothers. ..."
"... Its even more difficult for journalists in Guardian. They have to destroy chances of only candidate addressing inequality and climate change (Bernie), completely surrender their integrity to corporations, lament over those issues post factum, and yet be paid miserably only in hundreds of thousands for such colossal betrayal of humanity. Its worth at billions to actively participate in destroying future of your kids. Or is it? ..."
"... We need a new Federal Minimum Wage, and the wealthiest need to start paying up. Trump claims that business in the US pay the highest tax rate. That's just not true. I'm not talking about putting the burden on small business, but the multi-nationals and Wall Street. ..."
"... And we can blame Billary and Hussein for it. Their "free-trade" decisions, along with their shameful endorsement of open-borders, have lowered wages for everyone, except for financiers. Interestingly, it was those who've suffered the brunt of the elites' decisions who voted for Britain to leave the EU. Ironically, those who professed to stand for the middle and lower classes, revealed their hypocrisy when they joined the Mandarins in opposing for Britain to leave the totalitarian EU. ..."
"... Like the Trojans fearing present-giving presents, so should the working man loath the elites who promised to have their best interests at heart. That is the same promise communism gave the workers, only to turn on and enslave them. Today the workers don't stand a chance: the Marxists and bankers are on the same side sneering at the working classes who are demeaned as being racist, jingoistic xenophobes. ..."
"... An article in Forbes that explains why Obamacare is a scam. ObamaCare Enriches Only The Health Insurance Giants and Their Shareholders ..."
"... I agree with you that he never did. Obama is a corporatist and globalist. If you think Obamacare is bad wait until his trade deals are past. He sold Americans out for the profits of multinational corporations. Hillary will continue his work. I understand the true meaning of his words now. ..."
"... The US middle class has been disintegrating for decades as inequity grows ..."
"... Clinton is in hiding. I can't find her in the Guardian today. She is a habitual liar and the whole world has all the evidence it needs. All of her promises are bullshit. Bernie has been right the whole time and he is smart not to endorse. Bernie has always known what she is and Bernie's supporters have no reason to support her. ..."
"... It means she is corrupt, dishonest, and unqualified to be anything but an inmate. ..."
"... the middle class has been decimated.. This financial category is only about 35% of was it was in the early 70's.. additionally the definition of middle class has changed drastically as well.. believe it or not your middle class if your earn more than 50k a year!.. this is part of the reason we are as a nation borrowing a trillion dollars a year.. when will the silenced majority wake up and start voting and stop spending on products that are vastly over priced. ..."
"... My kid had a persistent tummy ache. Doc said intestinal blockage; take him to the ER immediately. Seven hours and one inconclusive CAT scan later, he's home again with symptoms unchanged. Two days later the pain went away. Cost: $12,000 with about $10,000 covered by union health insurance. So that's at least $2,000 out of pocket to me for seven hours in hospital, zero diagnosis and zero relief from symptoms. Medicine as a criminal enterprise? So what? Who's gonna stop it? The press? The law? ..."
"... I sympathize. I also agree with you. The US medical system is criminal. It is cruel, discriminatory, ruthless, often ineffective, and often incompetent. The only reason the administrators ("health" maintenance corporations) aren't in jail is because they use some of their obscene profits to buy Congress -- which passes laws like Obama's ACA or Bush's big Pharma swindle. I have no idea what to do about it though -- maybe if everyone refused to pay their premiums and medical bills, the money managers would notice. A sort of strike. ..."
"... SIngle-payer is the answer. Of course, the insurance companies and big pharma use scare tactics to stop that from happening. They talk about government waste, completely ignoring their own waste. They ignore the billions of dollars that they skim off of the top each year before applying any money for actual medical care. Wake up, people. Medical care should be run by the government or non-profit organizations, not by for-profit corporations. ..."
"... Despite the financial situation in middle-and lower income families that has been steadily declining under the past 8 years of the Obama administration, most in that group will support Hillary and propagate the Same problems for 4 more years. They stand no hope unless they break from the knee-jerk support of the "Democratic" Party. ..."
"... So they should support Donald Trump and the conservative party? Last time I checked raising taxes on the middle class while lowering taxes on the rich didn't really help anyone but the rich. The Republican party never gave two shits about middle and lower class, and there's no point believing they will start now. ..."
"... Isn't choosing to have three children very selfish if you cannot support them financially. People always find someone else to blame. ..."
"... "Race" card!!?? Where the hell did I mention anything about race or are you really as dumb as your reply suggests. Plus, you don't require a test to decide if you can afford children or not. It basic family planning. It's people like you in society that has the place in a mess with your "blame anyone but meself attitude" If I'm considered horrible, at least I'm not totally dumb and irrisponsible like you. ..."
"... Bill Maher recently (July 1, 2016; Overtime) editorialized about the state "laboratories" where new ideas are tested and evaluated. Maher compared the divergent fates of California and Kansas plus Louisiana. ..."
"... It's interesting. According to my household income I'm in the "upper" tier for the DC-metro region. But it really doesn't feel that way. Even those of us who make a good income are more and more stretched. In comparison to most of the country, I am well off. I own a car, just bought a house, I can afford to go out to eat a couple times a week. But, I even get to the end of the month with only $100 in the bank. That's because other downward pressures on pay aren't taken into account, such as student debt. My expensive undergraduate and graduate education didn't come cheap, and while that education affords people higher pay, if you end up taking less of it home. It kinda equals out. ..."
"... Sometimes my husband and I think about having kids, and then we realise that even with our good paying jobs, we can't afford day care in our area. I get paid the most, so I can't quit my job but if my husband quit to care for a child, we would really be strapped. Can I really be considered an upper tier household if I can't afford to have kids? If I can't afford to go on vacation once a year? If I haven't bought new clothes in two years? If I have no savings and a freak medical bill might just tip me over the edge? ..."
"... Suggest you give Andrew Tobias' book a read to think outside the box a good education often constructs for us: https://www.amazon.com/Only-Investment-Guide-Youll-Ever/dp/0544781937?ie=UTF8&ref_=asap_bc ..."
"... You can cut student debt in the U.S. by attending a good community college for two years and then transferring to a state university. Most kids are unwilling to do this--no frats or prestige in community colleges! ..."
"... Beginning in the 1970s, a majority of the middle class began to resent the taxation needed to continue support for these liberal policies, and they began to vote for conservative politicians who promised to remove them as they "only helped the undeserving poor." White racism played a role in this as the lower class was invariably portrayed in political speeches and advertising as group of lazy black people. ..."
"... No, it was created in response to the Bolshevik revolution, in particular, to that genius who said "Let's just shoot the royal family and be done with this." ..."
"... All of these things have come under attack since the USSR fell apart, probably on that exact day. And who overthrew the USSR? Overeducated middle class, not the poor or the rich. Who was Occupy Wall Street, Arab Spring... the recent protests against the French labor law tightenings, ALL the middle class. ..."
"... The greatest threat to governments has, and always will be, from within. And this threat is from the middle class, almost exclusively. Therefore, we are to be crushed and controlled tightly ..."
"... funny how this media outlet didn't publish these types of reports while the primary was hot. It was all "Hilary is inevitable and supporting Bernie is supporting Trump" type garbage. ..."
"... Probably he means to say Americans habitually ask new acquaintances, "What do you do for a living?" That's absolutely a query about income and personal worth, though slightly disguised, and it's a question I have never widely encountered anywhere else in the world, nor while living overseas the last ten years. ..."
"... This article is extremely dishonest. First, it claims that she has 'three other jobs'. Second, she has children, for whom she presumably gets child support. So what's her *real* income? ..."
"... When those in poverty or on the verge of it are single mothers, you tend to wonder if there are some other issues as well. I don't recall a time in American history where a single mother of several children could take care of herself when completely on her own. ..."
"... I teach in inner city schools. There are so many problems, money is one of them but all the money won't solve the problem of poor learning attitudes, disaffection, poor discipline and nonexistent work ethic . ..."
"... A lot of the students get no discipline at home and their parents don't expect them to learn anything. They are resistant to the whole process of focus on new knowledge , absorb, drill, recall , deploy newly learned thing. ..."
"... I don't know what solution there is to this. My nieces and nephews did well in school, studied hard, and went on to university. They didn't do drugs, rape or be raped, and stayed away from unsavory kids. BUT--they went home to two parents every night, a father and mother, which I think would have made them successful at school no matter what their income. ..."
"... The US economy isn't competitive anymore. It started with the labor cost being too high, so factories moved out. Then the entire supply chain moved out. Now the main consumer market is also moving out. Once that is gone, we will have no more leverage. ..."
"... The US education is good, but students are lazy, undisciplined, and incurious. In silicon valley, more than 75% of highly paid technical personnel are foreign born. Corporations making money with foreign workers here and abroad, on foreign markets. Taking these away and you will see the economy crash. ..."
"... Labor costs were too high. Have some more kool-aid. The elite didn't want labor to have any bargaining power whatsoever . They wanted to dictate the terms to labor believing that they were the only ones who should have any say in matters. The elite wanted to maximize their profits at the expense of their own citizens. They wanted slave labor . They wanted powerless people to dance to their tune. How could an advanced nation's labor possibly compete with slave labor . ..."
"... Sadly ..... thee isn't any hope for these people in the foreseeable future . Their economic decline has been happening for quite some time now and shows no sign of abating whatsoever . The economic foundations of their lives have been steadily pulled out from under them by the financial elite and their subservient political cultures , the Republican and Democratic Parties . The Republicans have never really given a damn about them and the Democrats have long abandoned them . These poor people of North Carolina are adrift on a sinking raft on easy ocean of indifference by the political cultures of America . To those in power , they don't exist . They don't count . They don't matter . ..."
"... The trend in the U.S, along with almost every other major nation in the world over the past 35 years has been to exclusively serve the interests of the financial elite and only their needs . All sense of fairness , justice and decency have been totally discarded . ..."
"... Tax breaks after tax breaks , tax shelters , free movement of capital , etc., etc. would sum up the experience of the financial elite over the past 35 years . They have become incredibly wealthy now and are still not satisfied . They want more . They want it all . They want what little you have and their political servants which help them get . ..."
"... Political discourse pertaining to the plight of those like these folks in North Carolina is all window dressing . In the end , you can be certain that it will amount to nothing . Just like it has for decades now . The financial elite are in control and they are not going to give any of that control up . As a matter of fact , they are going to tighten their grip . They will invent crisis to have their agendas imposed upon an increasingly powerless and bewildered public . They will take advantage of every naturally occurring crisis to advance their agenda . ..."
"... The problem is the job exporting American elite class. NAFTA was an economics, political, and social experiment with all the downside on the former, mostly lower middle class. Non-aligned examination of the available data shows how disastrous NAFTA has been to America's bubbas. Thanks to Bush 41 and Bill Clinton. WTO was all Bill. Of the mistakes Obama has made TPP would be the worst. The question is, really, do we favor global fairness (an even playing field for all earth's peoples) and a climate-killing consumerist world, or our own disadvantaged (courtesy of our financial and political elite) citizens. Not an easy choice. Death by poison or hanging. No treaty can benegotiated fairly in secret. ..."
"... The tragic irony is that the anger against rule by the 1% manifests in things like support for Trump, a typical example of the greed and excess of the 1%. Americans need to question outside their desperately constrained paradigms more. It will help focus their anger more strategically, and possibly lead to solutions. Don't hold your breath, the inequality gap is accelerating the wrong way. ..."
"... I think the US is heDing for trouble. It is the middle class that maintains civil society and gives a sense of hope. This is an interesting open letter by a zillionaire to his peers warning them what happens without a string middle class. A thought provoking read. http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014 ..."
"... The elite of the USA have done exactly what the Romans did and what the Pre-Revolutionary French did.... drain the lower classes while enriching themselves. "Taxes are for little people" is not just a pithy quote, it has become the reality as the elite rig the system so they benefit and the lower classes pay. They need to wake up or they will get exactly what the Romans Got (collapsed empire) or the French got (Violent Revolution). Wake up America! It is time to choose your side in the class war the elite continue to execute while telling us there is no "Class War" - you can't pull yourself up by your boot straps while they are pulling the rug out from under you! ..."
"... My wife used to employ recent graduates from Georgetown University with poli. sci., psychology, sociology degrees, to stack books for $10/hr. It took them on average 2-3 years, before finding work in their field. ..."
"... Education is NOT about finding a job! It's about learning ways to seek wisdom and rationality, and to assimilate (not deny) new knowledge throughout your life--and that's exactly what's lacking in the US! Our schools are factories to turn out standard robots to be used by the owners of this country, whether they practice law or flip burgers. ..."
Aug 24, 2016 | www.theguardian.com
HopeWFaith, 9 Jul 2016 16:04I was stumped by the very idea that someone has the $money, the time, the energy to go out and study for 3 bachelor degrees. This woman doesn't look old enough to have had time to get 3 degrees.
That said, what I believe is needed in the USA is a doubling down on Corporate Boards of Directors and CEOs to create a crisis, an American intervention, if you will, that demands companies bring back the idea that Profits alone are not all that matters. Serving the Nation you are born in, raised in, educated in, and then making a profitable income from certainly needs to be focused in on.
Why on earth isn't Main Stream Media doing this, along with all of CONGRESS and the President? What is their excuse? Even if you brought back all the robotic jobs to US soil, you would also end up bringing a large number of administrative jobs back here, too, just to keep up with the business at hand. It is critical that we rebuild our infrastructure, yet we see NO immediate or Long-term plans to do so. How can we, without the support of the Business Class to support the whole nation through Paying their Taxes to the US Tax System? There is no excuse that will do, in my book. Profits to the top tier need to be STOPPED so long as businesses are going outside of the United States Borders. Period.
SluethforTruth , 2016-07-07 12:39:08
Typical of what's happening around the world. The trillions of dollars lurking in tax havens is the reason why economies are stagnating. Money makes the world go round, however detouring to the Cayman Islands, the flow stops and the poverty begins. Spend locally and reject multi national corporations. Give your local communities a chance to prosper,Snaggletooth718 , 2016-07-07 12:40:07An additional factor in the financial woes of the falling middle class is the changing demographics here in the US - the growing numbers of single mothers, who are far more likely to struggle financially than a two income household. I make no judgment regarding how people form their family units, but life is especially hard for single mothers. http://rooseveltinstitute.org/changing-marriage-patterns-reflect-economics-and-class /saladbowl , 2016-07-07 12:46:52http://thinkprogress.org/economy/2014/02/19/3305931/income-single-mothers / "The 2016 presidential race has superficially been dominated by talk of this declining middle. First from Bernie Sanders, then Hillary Clinton and even Donald Trump's promise to Make America Great Again"peonyrose , 2016-07-07 12:47:08"And even"??? What a laugh. Even if you hate Trump its clear The Guardian has written every article possible to prevent his rise and they have failed miserably. Hillary amd Sanders are dominating conversatiin. Trump is by far.
One thing us for sure. 15 million illegals and thousands more every month is not making the middle class more secure.
They are shrinking, and you expect them to tolerate "Make America Mexico Again"? In these times?
Donor money is ruining the country. They hate Trump because he doesnt need these arrogant donors who have never heard "no" their whole lives.
If ordinary people have to work three jobs to make ends meet, then you need to say that wages in the US are too low.Slavenko Sucur -> peonyrose , 2016-07-07 14:29:52Its even more difficult for journalists in Guardian. They have to destroy chances of only candidate addressing inequality and climate change (Bernie), completely surrender their integrity to corporations, lament over those issues post factum, and yet be paid miserably only in hundreds of thousands for such colossal betrayal of humanity. Its worth at billions to actively participate in destroying future of your kids. Or is it?SusanPrice58 , 2016-07-07 12:53:59It isn't immigration that costing jobs - it's employers who know they can pay these people less for their work. We need a new Federal Minimum Wage, and the wealthiest need to start paying up. Trump claims that business in the US pay the highest tax rate. That's just not true. I'm not talking about putting the burden on small business, but the multi-nationals and Wall Street.RaceOfStalwarts -> SusanPrice58 , 2016-07-07 14:06:02You can see in western Europe at the moment that a minimum wage desn't work without a whole host of other protective legislation. A minimum wage doesn't reach to the self employed, and it doesn't prevent the use of flexible or non-guaranteed hours contracts making use of a larger than is required labour pool. Not to mention the black market / cash in hand trade.BritainFirst2016 , 2016-07-07 12:55:21And we can blame Billary and Hussein for it. Their "free-trade" decisions, along with their shameful endorsement of open-borders, have lowered wages for everyone, except for financiers. Interestingly, it was those who've suffered the brunt of the elites' decisions who voted for Britain to leave the EU. Ironically, those who professed to stand for the middle and lower classes, revealed their hypocrisy when they joined the Mandarins in opposing for Britain to leave the totalitarian EU.pawildcat -> BritainFirst2016 , 2016-07-07 13:51:28Like the Trojans fearing present-giving presents, so should the working man loath the elites who promised to have their best interests at heart. That is the same promise communism gave the workers, only to turn on and enslave them. Today the workers don't stand a chance: the Marxists and bankers are on the same side sneering at the working classes who are demeaned as being racist, jingoistic xenophobes.
You realize most of the votes in favor of NAFTA were Republican and most against were Democratic, right? You know that "free trade" has been an item in the Republican platform (and increasingly the Democratic one) for years before Clinton and Obama were ever in office, right? Know some elementary facts about U.S, politics before posting nonsense.daWOID -> Ed Thurmann , 2016-07-07 13:47:41Ed Thurmann: it's not teacher-bashing, it's just the old recycled "black family values" spiel that was introduced into the poverty debate in the '60s by Daniel Patrick Moynihan. Moynihan, not so BTW, is Hillary Clinton's intellectual hero. So you can expect a hell of a lot more of these cliches after January of next year.Juillette , 2016-07-07 13:26:03An article in Forbes that explains why Obamacare is a scam. ObamaCare Enriches Only The Health Insurance Giants and Their ShareholdersJuillette -> Andrew Kac , 2016-07-07 14:16:34Robert Lenzner , CONTRIBUTOR
I'm trying to wise up 300 million people about money & financeSo far in 2013 the value of the S& P health insurance index has gained 43%. Thats more than double the gains made in the broad stock market index, the S & P 500. The shares of CIGNA are up 63%, Wellpoint 47% and United Healthcare 28%. And if you go back to the early 2010 passage of ObamaCare, you will find that Obama's sellout of the public interest has allowed the public companies the ability to raise their premiums, especially on small business, dramatically multiply their profits and send the value of their common stocks up by 200%-300%. This is bloody scandalous and should be a cause for concern even as the Republican opponents of the bill threaten the close-down of the government.
We warned you back on December4, 2009 in my blog " The Horrendous Truth About Health Care Reform" that the Obama White House was handing a " free ride for the health insurance industry" that would allow premium hikes of 8%-10% a year by CIGNA, Humana HUM +1.56%, Aetna AET +0.45%, UnitedHealth Group UNH +0.58% and Wellpoint, and as well a $500 billion taxpayer subsidy, a half trillion dollars without any requirement that the health insurers had to spend the subsidy on medical care. Several US Senators including Jay Rockefeller of West Virginia spoke to me openly of the outrageous sellout being foisted on the nation's uninsured citizens.
At the time I wrote, Goldman Sachs research operation estimated that the 5 giants would increase profits by 10% a year from 2010 to 2019, sending their shares up an average of 59%. In truth, the shares of CIGNA and some others are up a multiple of several times since the contest was resolved by a very tight vote in early 2010. One startling reason for this amazing performance was that Obama took off the table "proposals to significantly reduce health care costs" as the giveaway in getting the bill through, according to Ron Susskind's best-selling book ,"Confidence Men," which I wrote about in a blog on September 24, 2011. ( "Obama's Incoherent Policy-Making") Some 3 years later, UnitedHealthCare Group(UNH) was rewarded by being added to the elite list of the Dow 30 industrials.
I understood belatedly that there would have been no Affordable Care Act of 2010 if the White House had not given into demands from the giant profit-making health insurance companies. Had he not done so, I am being assured that there would have been no bill passed, a priority goal that Obama promised in his 2008 Presidential campaign. How the profits have risen so impressively requires further investigation as the bill is meant to limit the profits earned to 20% of the revenues.
One of the other downsides to the supposed reform bill was the surprisingly unfair treatment of small business owners who faced even larger potential premiums for their employees. It has been the fear of these higher health costs that has resulted in the overwhelming trend toward hiring part-time employees whom the employers need not offer healthcare insurance.
So much for the reforms embedded in the mis-labeled Affordable Care Act of 2010. It may not die a bloody demise this month, but it is certain to be reformed itself, let's hope for the benefit of the 300 million, not just the millions of lucky shareholders who may have understood the ramification of ObamaCare, which was to multiply the profits of five giant insurance companies, just as the major bank oligopoly was rewarded by the federal bailouts and Fed monetary policy.
I agree with you that he never did. Obama is a corporatist and globalist. If you think Obamacare is bad wait until his trade deals are past. He sold Americans out for the profits of multinational corporations. Hillary will continue his work. I understand the true meaning of his words now.barbkay , 2016-07-07 13:49:42"We are a nation of immigrants" meaning he prefers cheap illegal labor when 46 million Americans live in poverty. Soon cheap foriegn will be unlimited and legal in the US with worker mobility. Even for professional jobs. Can you imagine competing with foreigners in the US who make 30 cents an hour? It's depressing really. Here are some of the highlights of the TPP that will throw Americans further into poverty.
Also research Tisa.
My heart goes out to these beleaguered families. In the late 1970s/80s I held down a full-time job in DC and freelanced feverishly to make ends meet. I lived below the official poverty line in an expensive, yet thoroughly crappy, flat. That recession-riddled era of energy chaos, leading into Reagan's 'voodoo' economics regime (the risible idea of 'trickle-down', the US becoming the world's largest debtor), was another hot mess.FugitiveColors , 2016-07-07 13:53:22The US middle class has been disintegrating for decades as inequity grows, thanks in large part to the poor governance of Republican presidents (Nixon's stagflation, the disastrous shifts under GW Bush).
Clinton is in hiding. I can't find her in the Guardian today. She is a habitual liar and the whole world has all the evidence it needs. All of her promises are bullshit. Bernie has been right the whole time and he is smart not to endorse. Bernie has always known what she is and Bernie's supporters have no reason to support her. Her disapproval ratings will top Trump now. The voters are now going to show her what the meaning of is, really is.MasonInNY -> FugitiveColors , 2016-07-07 16:08:57It means she is corrupt, dishonest, and unqualified to be anything but an inmate.
Her disapproval ratings are high, but not up with Trump's and they never will be. You can vote for Jill Stein, the Green Party candidate, in November. Or Gary Johnson, the Libertarian. But Bernie will not be a candidate, and he will eventually endorse Clinton -- after he is sure he's won certain concessions in the Democratic platform. That's your reality in July 2016, not in February.brianBT , 2016-07-07 14:16:48the middle class has been decimated.. This financial category is only about 35% of was it was in the early 70's.. additionally the definition of middle class has changed drastically as well.. believe it or not your middle class if your earn more than 50k a year!.. this is part of the reason we are as a nation borrowing a trillion dollars a year.. when will the silenced majority wake up and start voting and stop spending on products that are vastly over priced..Turn off your phone, stop buying all but essentials.. we need to force prices down until we complain and start voting with our dollars little will changeMtnClimber -> ojeemabalzitch , 2016-07-07 15:37:37What about the millions of married couples with kids..when the parents lose their jobs? That happens very frequently. Should we take the kids away? Are you suggesting that poor people not be allowed to have children?NYbill13 , 2016-07-07 14:34:59Then we have the religious nutcases that are against contraception and abortion, yet demonize poor women for having children.
My kid had a persistent tummy ache. Doc said intestinal blockage; take him to the ER immediately. Seven hours and one inconclusive CAT scan later, he's home again with symptoms unchanged. Two days later the pain went away. Cost: $12,000 with about $10,000 covered by union health insurance. So that's at least $2,000 out of pocket to me for seven hours in hospital, zero diagnosis and zero relief from symptoms. Medicine as a criminal enterprise? So what? Who's gonna stop it? The press? The law?ojeemabalzitch -> NYbill13 , 2016-07-07 14:58:00Hahahahahahahaha.
So? If your car breaks down it will cost a fortune to repair. Same if you have to replace the roof on your house. Life ain't fair, is it?MiltonWiltmellow -> NYbill13 , 2016-07-07 15:14:26MtnClimber -> MiltonWiltmellow , 2016-07-07 15:35:28Medicine as a criminal enterprise? So what? Who's gonna stop it? The press? The law?
I sympathize. I also agree with you. The US medical system is criminal. It is cruel, discriminatory, ruthless, often ineffective, and often incompetent. The only reason the administrators ("health" maintenance corporations) aren't in jail is because they use some of their obscene profits to buy Congress -- which passes laws like Obama's ACA or Bush's big Pharma swindle. I have no idea what to do about it though -- maybe if everyone refused to pay their premiums and medical bills, the money managers would notice. A sort of strike.
SIngle-payer is the answer. Of course, the insurance companies and big pharma use scare tactics to stop that from happening. They talk about government waste, completely ignoring their own waste. They ignore the billions of dollars that they skim off of the top each year before applying any money for actual medical care. Wake up, people. Medical care should be run by the government or non-profit organizations, not by for-profit corporations.Ykuos1 , 2016-07-07 14:37:56Corporations have only one goal...to make as much money as possible for themselves. Health care is just a necessary nuisance.
Despite the financial situation in middle-and lower income families that has been steadily declining under the past 8 years of the Obama administration, most in that group will support Hillary and propagate the Same problems for 4 more years. They stand no hope unless they break from the knee-jerk support of the "Democratic" Party.Sam Ahmed -> Ykuos1 , 2016-07-07 14:45:51So they should support Donald Trump and the conservative party? Last time I checked raising taxes on the middle class while lowering taxes on the rich didn't really help anyone but the rich. The Republican party never gave two shits about middle and lower class, and there's no point believing they will start now.KMdude , 2016-07-07 14:43:46This article mentions Latonia Best and her three children. Is there a Mr Best around? It has always been tough to raise a family on the salary of a single parent.Elephantmoth -> KMdude , 2016-07-07 14:56:57The breakdown of the American family is a probably the biggest reason for the supposed struggles of the middle class. People have to take responsibility for their lives.
Sure, because every misfortune can be blamed on the individual. You have no idea why Mr Best isn't around so please spare us your moralising.rebeccazg -> KMdude , 2016-07-07 14:57:51traditionally, the middle class had the guy going out to work, and his wife staying at home to look after the kids. Once children are in school and childcare is reduced, I don't see how a woman working and raising her kids alone, is any more expensive than a man supporting himself, his wife and their kids.Liverpooljack1 , 2016-07-07 15:02:53It used to be possible. It used to be doable. wealth disparity ind income inequality mean that is no longer the case, at least certainly not for the average middle class. In the UK anyway, it's now a sign of wealth. This has nothing top do with the family and everything to do with income disparity.
Isn't choosing to have three children very selfish if you cannot support them financially. People always find someone else to blame.MtnClimber -> Liverpooljack1 , 2016-07-07 15:27:08Ah. I was waiting for some "bubba" to pull the race card. Congratulations. Maybe we should make everyone take a test to prove that they can afford children. No children for poor people. Nice.Liverpooljack1 -> MtnClimber , 2016-07-07 16:05:10You are a horrible person.
"Race" card!!?? Where the hell did I mention anything about race or are you really as dumb as your reply suggests.Quesera -> Donald Inks , 2016-07-07 16:00:32
Plus, you don't require a test to decide if you can afford children or not. It basic family planning. It's people like you in society that has the place in a mess with your "blame anyone but meself attitude" If I'm considered horrible, at least I'm not totally dumb and irrisponsible like you.$3,333.33 is actually not a lot of money to raise a family of four on. Let's do some math, shall we?!MiltonWiltmellow , 2016-07-07 15:04:56Taxes: $800 (rough estimate)
Health Insurance: I'm going to estimate $300 because she probably has dependents on her coverage and that's what I paid one dependent a while back.
Car: I'm going to estimate $150. My car payment is $300, but let's say she got a cheaper, used car.
Rent: Let's say $1,000/month (I did a quick search and found that this seemed like a good price for a two bedroom)
Bills: Let's round up to $150/month for gas, electricity, water, sewage
Food: Let's say she spends $80/week, so roughly $320 a month (you know, she's a thrifty shopper)All of that leaves about $313 left for gas, phone, college tuition, maybe internet and cable at home. I don't know how she does it.
Profhambone -> MiltonWiltmellow , 2016-07-07 15:47:30Worst of all was the town of Goldsboro – one of three metropolitan areas in North Carolina at the bottom of the national league table.
North Carolina, Michigan, Kansas, Louisiana, Oklahoma ... more ...
Sad stories in states run by Republicans. Toxic rivers, shootings, poisoned tap water, bankruptcy, daily earthquakes ...
Bill Maher recently (July 1, 2016; Overtime) editorialized about the state "laboratories" where new ideas are tested and evaluated. Maher compared the divergent fates of California and Kansas plus Louisiana.
Kansas is going bankrupt under the Republican governor and legislature, the Louisiana economy is a basket case thanks to Republican Bobby Jindal while just a few years ago, under Republican Arnold Schwarzenegger, California was billions in debt.
In California they threw out the Republicans, put Democrats in charge, raised taxes on the rich and voila -- now with a surplus, California is ranked as the sixth largest economy in the world:
Only five countries produced more last year than California: the U.S., China, Japan, Germany and the United Kingdom.
So -- North Carolina with fouled rivers, a collapsing middle class, discriminatory laws -- or a thriving California?
Goldsboro remains far from the sort of economic catastrophe seen in parts of the rust belt, but these are signs of financial stress that are hard to ignore. The strain on the middle class across much of the country may not have gone unnoticed by politicians, but locals here fear there is little talk of the investment in skills, high-paying jobs and civic infrastructure needed to arrest the slide.
Republican shills will have to admit -- finally that Republican policies ruin lives, ruin the economy and ruin the environment. Truth appears more powerful than slogans and slanders. Who knows? They might even acknowledge climate change.
I believe it is the wars and needs of the military-industrial-banking complex that sap far too much from the economy. Both parties are guilty of supporting them.ehmaybe -> MiltonWiltmellow , 2016-07-07 15:52:52North Carolina with fouled rivers, a collapsing middle class, discriminatory laws -- or a thriving California?Voltaire21 , 2016-07-07 15:16:57Since 2013, North Carolina has the fastest GDP growth of any state. The NC economy is not in bad shape. This lady lives in one of the poorest areas in the state, she should move 45 minutes north to thriving Raleigh or Durham - the population in that area is booming, they need teachers.
The dumping of coal ash into the Dan river was a corporate crime, not a policy decision. Neither party is responsible for criminal actions by individuals or corporations, that's just silly. (The republicans have been too lax in holding Duke Energy to account but the damage done is not a political issue)
HB2 is a disgrace but the legislature is in the process of correcting it and the Governor is likely to lose the election in the fall which bodes well for anti-HB2 people. Don't forget that California voters voted to ban gay marriage not even 10 years ago. It's not a paradise of wealth and enlightenment, no place is.
Why should we feel sorry for the American middle class they have elected for all the misery that has befallen them!Quesera -> Voltaire21 , 2016-07-07 15:48:37If America was a fascist state I could sympathise but it's not. Americans have let their social rights being eroded by a mendacious and cunning establishment.
One good example of how Americans don't give a shit is the very expensive wars in Iraq and Afghanistan which have cost gazillions to the US taxpayer and not a whimper from the US population.
If one can compare that to the Vietnam war which created its own critical cinema genre, protest songs, large demonstrations etc...you know that todays average Americans responsibility for the mess they find themselves in is non existent. They just bend over and take it and have little whine about it from time to time.
What about the people that didn't vote for the "misery" as you call it?Bardolphe , 2016-07-07 15:20:20What about the fact that whichever way you vote in the US you're screwed?
And I don't know about you, but you must not know many Americans. The number of my friends who have been tear gassed during marches against the Iraq war flies in the face of your argument. Have you, yourself, even uttered a whimper against it?
I will support proper child-support and healthcare and everything that can be done to make this woman's life easier and secure her kids' futures BUTHappyduckling -> Bardolphe , 2016-07-07 15:36:41Three kids is a LOT for two people to handle, let alone one.
To paraphrase Lady Bracknell, to raise one child alone may be regarded as a misfortune; to attempt to raise three looks like carelessness. To try to raise three alone in the United States is MADNESS.
I live in the USA. I'm in a stable long-term relationship. I don't make much money. I can't afford kids.
2 + 2 = 4
Poor me. I don't say I have a right to kids because I need them or I have so much love to give or blah, blah, blah. I just can't. Not here. This is a cruelly individualistic country. It is built to serve those who serve themselves. Namely, the young, healthy, smart, motivated and single. There is no political foundation or tradition of altruism here. Maybe back in Ireland where there's a system to support me and some healthcare and family. Not here. Madness.
But she's got the kids now. What is she supposed to do? Hand them back to someone? If she and the childrens' father had them when life was looking more stable and she didn't have to work 4 jobs to make ends meet, she can hardly be blamed now for their existence.Bardolphe -> OinkImSammy , 2016-07-07 15:41:05You are living in the now and choose not to have children because you feel you can't afford them. However, in the future, you may find that you can afford them, and therefore choose to conceive. If your circumstances change after that and you are no longer able to afford to care for them without working excessive hours and living in poverty, there's not a lot you can do other than get on with it. No point blaming her for something that is irreversible.
That is not my point and you absolutely know it is not my point.Quesera , 2016-07-07 15:42:11Stop pretending that birth control doesn't exist. It exists.
It's interesting. According to my household income I'm in the "upper" tier for the DC-metro region. But it really doesn't feel that way. Even those of us who make a good income are more and more stretched. In comparison to most of the country, I am well off. I own a car, just bought a house, I can afford to go out to eat a couple times a week. But, I even get to the end of the month with only $100 in the bank. That's because other downward pressures on pay aren't taken into account, such as student debt. My expensive undergraduate and graduate education didn't come cheap, and while that education affords people higher pay, if you end up taking less of it home. It kinda equals out.Scott Plantier -> Quesera , 2016-07-07 15:55:19Sometimes my husband and I think about having kids, and then we realise that even with our good paying jobs, we can't afford day care in our area. I get paid the most, so I can't quit my job but if my husband quit to care for a child, we would really be strapped. Can I really be considered an upper tier household if I can't afford to have kids? If I can't afford to go on vacation once a year? If I haven't bought new clothes in two years? If I have no savings and a freak medical bill might just tip me over the edge?
There's something very, very wrong. How rich do you need to be before you don't feel like you're struggling?
Thanks for the great post, but whatever will be, will be, unless you get in front of it and plan.Spunky325 -> Quesera , 2016-07-07 20:31:21Suggest you give Andrew Tobias' book a read to think outside the box a good education often constructs for us: https://www.amazon.com/Only-Investment-Guide-Youll-Ever/dp/0544781937?ie=UTF8&ref_=asap_bc
You can cut student debt in the U.S. by attending a good community college for two years and then transferring to a state university. Most kids are unwilling to do this--no frats or prestige in community colleges!Nash25 , 2016-07-07 15:48:56The huge middle class in the USA was created by the liberal economic polices of the 1930s, which were designed to help the lower class.pbalrick -> DrSallyWinterton , 2016-07-07 17:21:27Beginning in the 1970s, a majority of the middle class began to resent the taxation needed to continue support for these liberal policies, and they began to vote for conservative politicians who promised to remove them as they "only helped the undeserving poor." White racism played a role in this as the lower class was invariably portrayed in political speeches and advertising as group of lazy black people.
What the middle class did not understand was that their continued existence depended on these liberal programs, as most of the benefits went to the middle class, not the lower class as they assumed. As the liberal programs began to disappear, so did the economic security of the middle class.
One would think they would have figured all of this out by now, but they have not, and they continue to vote for conservatives.
No, it was created in response to the Bolshevik revolution, in particular, to that genius who said "Let's just shoot the royal family and be done with this." When that happened, the ruling class got scared, and said "OK, minimum wage, vacation, sick pay, 40 hr work week, no child labor, great schooling, etc"Scott Plantier , 2016-07-07 15:49:55All of these things have come under attack since the USSR fell apart, probably on that exact day. And who overthrew the USSR? Overeducated middle class, not the poor or the rich. Who was Occupy Wall Street, Arab Spring... the recent protests against the French labor law tightenings, ALL the middle class.
The greatest threat to governments has, and always will be, from within. And this threat is from the middle class, almost exclusively. Therefore, we are to be crushed and controlled tightly.
" squeezed middle class tell tales of struggle " Too bad they voted for the big squeeze herself -- Bernie could have set them free from the path of exploitation she has planned for them immediately after her election by imposing the TPP upon the very fools who will elect her. Stop watching the Kartrashians and read about actual policy implications for your family and especially your children, if you had, none of you would have supported Clinton.pbalrick -> Scott Plantier , 2016-07-07 17:15:29funny how this media outlet didn't publish these types of reports while the primary was hot. It was all "Hilary is inevitable and supporting Bernie is supporting Trump" type garbage.biglio , 2016-07-07 15:58:38Education in the US...oh boy....biglio -> ehmaybe , 2016-07-07 16:24:09I lived in Pittsburgh for 8 years, being European I sent them to public school...well, after a year in which my six years old son was suspended twice for running around at lunchtime when he shouldn't (six years old tend to do that), numerous recesses where they were put in front of a TV (we cannot send them outside, insurance doesn't cover if they get hurt and we got sued before), and notes from teachers full of spelling mistakes......I had to send them to private school perpetuating a cycle of poor people in public system and rich people (or middle class as i was at the time) to private schools....
i don't know what needs to be done to fix the issue but it's the whole society that is really divided along money lines and race lines and inequality is getting worse. But money trumps everything, the US is the only place int he world where it's not considered unpolite to ask people :"what's your worth?" meaning how much you make, what are your assets, etc.....instilling in people a mentality of self worth based on money and consequentially a cutthroat environment where the more you have the more you are worth, so at the top they squeeze the lower end, to make more money but also because they think they are really not that worthy....its a perverse cycle that history taught us doesn't bring any good because at a certain point the poor reach a critical mass that will just revolt......I'm waiting for that, good luck...
I'm afraid my friend we disagree on that, excellent public schools are exceptions, there are some but they are a minority (International statistics on education quality validate that), I don't live in the US anymore but travel a lot there for business (at least 20 times a year). As for the worth question I had it asked to me quite a few times and kind of everywhere, maybe it's unpolite, I believe it's unpolite, but it happens regularly and only in the US (let me rephrase, in the rest of the world it wouldn't be considered unpolite, that's too mild of a term, it would be considered inconceivable). Said that I hope the US makes it and the "American Values" that you talk about prevail, but i am afraid those values have changed and being substituted by less noble ones...jsaralan -> ehmaybe , 2016-07-07 16:33:16Probably he means to say Americans habitually ask new acquaintances, "What do you do for a living?" That's absolutely a query about income and personal worth, though slightly disguised, and it's a question I have never widely encountered anywhere else in the world, nor while living overseas the last ten years. The question is so ingrained, though, that Americans who ask it don't think of it as a query about net worth. They do, however, react with overflowing respect toward those who answer in certain ways, and something akin to sympathy to those who answer in other ways. All my foreign friends have noticed it, and all think it's weird.DrSallyWinterton , 2016-07-07 16:45:46This article is extremely dishonest. First, it claims that she has 'three other jobs'. Second, she has children, for whom she presumably gets child support. So what's her *real* income?Michael Williams , 2016-07-07 17:50:39I do not know how things stand today, but I went to school in the UK and in the US in the 70s and 80s.biglio -> Michael Williams , 2016-07-07 18:22:25The schools in the UK were so superior to the US that I thought I had been placed in a remedial class when I returned to the States.
At the time, I would have bet that the average 16 year old in the UK was better educated than most American college graduates.
I would like to hear what you all think.
Agree, I did my last year of high school in the US, in North Carolina of all places, in a top private school, i was a middling student in Europe with flashes of brilliance in some subjects but definitely far from the top of the class. When I arrived (it was in the 80s) I didn't speak English. Well, I graduated with high honors int he top 5% and got my high school diploma, honestly without having to study that much, school was not totally comparable but definitely way less challenging.eastbayradical -> biglio , 2016-07-07 18:33:35Contrary to conventional wisdom, a lot of private schools in the United States are severely lacking in the rigor department. This is even true for many--not all--private schools that cater to well-to-do families.LelouchVIBrittania , 2016-07-07 18:13:10When those in poverty or on the verge of it are single mothers, you tend to wonder if there are some other issues as well. I don't recall a time in American history where a single mother of several children could take care of herself when completely on her own.PlatosNave , 2016-07-07 18:35:03I know of single mothers who are doing fine, but they employed and are also being helped by siblings and parents who already have some wealth and free time to take care of the child. Maybe the issue is the fact that these people are having kids at the wrong time or without enough thought. Divorce rates are incredibly high in the US, and the percentage of children who have non-birth parents is very high as well. What this all means is that the USA isn't teaching its citizens about having kids and the responsibility.
The USA is also not teaching men and women about birth control, or about being holding potential partners to higher standards (and I don't mean looks). A lot of people in the USA are too shallow and focus too much on aesthetics over reliability and now we have single mothers with fathers who refuse to pay child support at all costs. There are too many problems with the USA, but I feel that personal hygiene and responsibility with sexual partners should be on the top.
I teach in inner city schools. There are so many problems, money is one of them but all the money won't solve the problem of poor learning attitudes, disaffection, poor discipline and nonexistent work ethic .Spunky325 -> PlatosNave , 2016-07-07 20:18:08A lot of the students get no discipline at home and their parents don't expect them to learn anything. They are resistant to the whole process of focus on new knowledge , absorb, drill, recall , deploy newly learned thing.
Americans have a religious reverence for individualism and learning new things is a humbling experience and many people don't like it. Sure the adults bang on about education but they aren't serious about it. They think all you need is to spend more money , not do any actual work.
The problems in the inner city are so intransigent that I doubt anything can fix it. I have three friends, all dedicated teachers, who taught in inner city schools in New Jersey and the stories they have told me make my mind reel: a mother who punched a teacher (and gave her a concussion) who "disrespected" her kid (by failing him, deservedly, in algebra), 15-year-olds who had pagers so their pimps could call them, children who had five brothers and sisters--all with different fathers. You couldn't make this stuff up.thomasmccabe , 2016-07-07 18:49:47I don't know what solution there is to this. My nieces and nephews did well in school, studied hard, and went on to university. They didn't do drugs, rape or be raped, and stayed away from unsavory kids. BUT--they went home to two parents every night, a father and mother, which I think would have made them successful at school no matter what their income.
The Pew survey you cited noted that "...the share living in middle-income households fell from 55% in 2000 to 51% in 2014. Reflecting the accumulation of changes at the metropolitan level, the nationwide share of adults in lower-income households increased from 28% to 29% and the share in upper-income households rose from 17% to 20% during the period." In other words, most of the decline in the middle class was due to their moving into the upper class.NoSerf , 2016-07-07 19:24:28The article was mostly about a declining rural area. The Guardian grinding its usual axes and reaching the conclusion it intended to reach?
Middle class job death inflicted by cronie capitalism entertained by the political establishment (examples): Private equity is not scrutinized by anti-trust legislation, buys any company and sends jobs overseas. Cronie supporters of politicians get help in that some industry gets indicted (e.g. more or less entire coal industry) or regulated into oblivion, for fake reasons, so that cronie (solar panel) company gets subsidies. Of course, the latter goes under, no company on IV survives without IV. Banks get bailed out, others not. GM gets bailed out, to maintain jobs, then outsources.Curtis Gomez , 2016-07-07 19:49:24The old members of middle class are not tolerated by our government and the cronies. Who is tolerated as middle class is any kind of civil servant, and new immigrants. Revenge from 2 sides. Or call it cultural revolution Mao style: Take their habitat.
Growing up in the SF Bay Area during the 70's there was a large disparity in academics between schools even in the same district. At 11 years old the school district was rezoned and the new school that I attended had much lower standards. So much so, that I came home the very first day and complained to my mother that I had been assigned to a class for slow learners. Being so bored, my grades started to drop. At 13 years, I tested out of mathematics and eventually tested out of high school altogether and joined the military.jacknbox , 2016-07-07 19:54:54There my intelligence was appreciated (believe it or not). The military provided a valuable work ethic and training in technology that have provided a decent career and lifestyle since. It's too bad that America can't seem to provide adequate learning to the vast majority.
The US economy isn't competitive anymore. It started with the labor cost being too high, so factories moved out. Then the entire supply chain moved out. Now the main consumer market is also moving out. Once that is gone, we will have no more leverage.enodesign -> jacknbox , 2016-07-08 01:25:43The US education is good, but students are lazy, undisciplined, and incurious. In silicon valley, more than 75% of highly paid technical personnel are foreign born. Corporations making money with foreign workers here and abroad, on foreign markets. Taking these away and you will see the economy crash.
Then you have Hillary wanting to sub divide a rapidly diminishing pie, and Trump wanting to return to 1946. Good luck to them both.
Get real .enodesign , 2016-07-07 20:02:24Labor costs were too high. Have some more kool-aid. The elite didn't want labor to have any bargaining power whatsoever . They wanted to dictate the terms to labor believing that they were the only ones who should have any say in matters. The elite wanted to maximize their profits at the expense of their own citizens. They wanted slave labor . They wanted powerless people to dance to their tune. How could an advanced nation's labor possibly compete with slave labor .
This is the same argument that slave owning , southern plantation owners used to fight against the freeing of slaves . They to said that they would not longer be competitive and the overall economy would suffer .
Are you telling us that an economy needs slave labor to exist ?
Sadly ..... thee isn't any hope for these people in the foreseeable future . Their economic decline has been happening for quite some time now and shows no sign of abating whatsoever . The economic foundations of their lives have been steadily pulled out from under them by the financial elite and their subservient political cultures , the Republican and Democratic Parties . The Republicans have never really given a damn about them and the Democrats have long abandoned them . These poor people of North Carolina are adrift on a sinking raft on easy ocean of indifference by the political cultures of America . To those in power , they don't exist . They don't count . They don't matter .enodesign -> DrSallyWinterton , 2016-07-08 01:18:46The trend in the U.S, along with almost every other major nation in the world over the past 35 years has been to exclusively serve the interests of the financial elite and only their needs . All sense of fairness , justice and decency have been totally discarded .
Tax breaks after tax breaks , tax shelters , free movement of capital , etc., etc. would sum up the experience of the financial elite over the past 35 years . They have become incredibly wealthy now and are still not satisfied . They want more . They want it all . They want what little you have and their political servants which help them get .
Political discourse pertaining to the plight of those like these folks in North Carolina is all window dressing . In the end , you can be certain that it will amount to nothing . Just like it has for decades now . The financial elite are in control and they are not going to give any of that control up . As a matter of fact , they are going to tighten their grip . They will invent crisis to have their agendas imposed upon an increasingly powerless and bewildered public . They will take advantage of every naturally occurring crisis to advance their agenda .
There will be an end to their abuse , greed and domination until one day when everything changes . The day when people have had enough . When people can't take it any more . History has demonstrated this fact so often before . The mighty do fall . They always fall ..... but their fall is nowhere to be seen at this time .
There is going to a great deal more pain for average folk before things get better .
A Presidential election featuring Donald Trump and Hillary Clinton is clear evidence of this fact.
Hopefully , these two bottom feeding , utter human failures represent the bottom of the barrel but I doubt if they do .
Good luck to the good folks of North Carolina and countless others like them .... they / we / myself are going to need it .
On the contrary .... it's money that the elite have not paid out in wages .Matt C , 2016-07-07 20:32:07It's money that the elite have illegally hidden from the taxman . It's money the the elite need to pay for the infrastructure that makes it possible to do business in the first place . It's money that has been made from insider trading and backroom deals . It's money from the wealth that labour has basically created in the first place .
It's money that contributes to the social maintenance on a safe , civil society . It's money that the wealthy do not need .... they have all they could ever need now .
It is money that when distributed fairly keeps money in motion creating it's transfer into additional hands which further circulates that money creating even more spending by people and the consumption of goods and services which result in the creation of even more wealth .
Static capital kills economies .
I know that the elite like to think that they are the exclusive ones to create wealth but wealth creation is the marriage between capital and labour . You can have all of the capital in the world but without labour transforming it into greater wealth it can not possibly grow .
If anyone is guilty of stealing money it is the elite who steal from the economy causing the economy's ill health .
The last 35 years are more than testimony to this fact .
Economies are dying wherever the elite have gotten their way .
The elite are the real killers of wealth and economies . Just look at any economy in the world throughout history where the elite had all of the wealth to themselves . Their economies are highly dysfunctional and their societies are full of social problems and crime .
This is an indisputable fact .
Greed kills wealth development .
Wealth development is directly tied to the well being of labour which allows for mass consumption of goods and services .
You would have to be a complete idiot not to see this fact .
So my good doctor .... the money in any given economy really belongs to everyone , not just the greedy elite .
You need to get a real perspective instead of constantly eyeing you own pile of wealth .
so the woman chose to have 3 daughters, is now choosing to foot the bill for their college education, and wants me to feel sorry because she has to work her ass off to do all these things? how about this.... don't have children you can't afford. a little personal responsibility in one's life goes a long, long way.Bajanova -> Matt C , 2016-07-07 21:03:04She is taking personal responsibility! She is working!DrSallyWinterton , 2016-07-07 20:35:37Everybody here is debating the life of a person who probably doesn't even exist.JudeUSA -> DrSallyWinterton , 2016-07-07 23:20:41Go to the website of the school she works for. Her picture is on the website and the NC pay for a 3 year teacher is about 40K. I think she exists.jecoz , 2016-07-07 20:59:28We need to redefine middle class. I grew up middle class. We had one TV. Not a lot of clothes. Took short, cheap vacations. Had no credit cards. Our lives were perfectly enjoyable. Many people here in the US live way beyond their means.Turrialba -> jecoz , 2016-07-07 21:36:59We piled into the station wagon and headed out on short trips in the region. We visited historic sites and were enriched by the experience. None of this $1000s on the trip to Disneyland. We didn't feel deprived or entitled.jacknbox -> jecoz , 2016-07-07 23:26:14The key is not money but optimism. America is still richer, cleaner, and better run than most other places. But the gap is rapidly closing. Scaling back the spending would not help here. It would only further reduce the drive.skwawshbug , 2016-07-07 22:08:36As a North Carolinian, there are two major issues. One, the right to bear arms and also, teacher tenure and working conditions. Republicans have already taken away tenure from my younger colleagues, but as an older teacher, I still have mine. Secondly, democrats want to take away gun rights on the federal level, but state dems are usually more pro-gun in the conservative state.DrSallyWinterton -> skwawshbug , 2016-07-07 22:30:35SO for me, I will vote for a democratic state government and a republican federal government. I will be proudly putting a Roy Cooper bumper sticker on my car. But due to the peaceful liberals, I would be afraid to put a TRUMP sticker on my car because of recent violence against Trump supporters.
Teachers who can't be thrown out, no matter how incompetent they are, are a major reason why the US educational system is in such a mess.Shillingfarmer , 2016-07-07 22:15:18The problem is the job exporting American elite class. NAFTA was an economics, political, and social experiment with all the downside on the former, mostly lower middle class. Non-aligned examination of the available data shows how disastrous NAFTA has been to America's bubbas. Thanks to Bush 41 and Bill Clinton. WTO was all Bill. Of the mistakes Obama has made TPP would be the worst. The question is, really, do we favor global fairness (an even playing field for all earth's peoples) and a climate-killing consumerist world, or our own disadvantaged (courtesy of our financial and political elite) citizens. Not an easy choice. Death by poison or hanging. No treaty can benegotiated fairly in secret.SocratesP , 2016-07-07 22:30:13The tragic irony is that the anger against rule by the 1% manifests in things like support for Trump, a typical example of the greed and excess of the 1%. Americans need to question outside their desperately constrained paradigms more. It will help focus their anger more strategically, and possibly lead to solutions. Don't hold your breath, the inequality gap is accelerating the wrong way.DrSallyWinterton , 2016-07-07 22:40:20Fake, fake fake. A woman with $40k and three children would *not* be paying 1/3 of her income in tax. This woman does *not* live on $40k net or gross - she has three other jobs. And her name looks *very* made up.Bronwyn Holmberg , 2016-07-07 22:41:01I think the US is heDing for trouble. It is the middle class that maintains civil society and gives a sense of hope. This is an interesting open letter by a zillionaire to his peers warning them what happens without a string middle class. A thought provoking read. http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014Chris Westcott , 2016-07-07 22:41:01The elite of the USA have done exactly what the Romans did and what the Pre-Revolutionary French did.... drain the lower classes while enriching themselves. "Taxes are for little people" is not just a pithy quote, it has become the reality as the elite rig the system so they benefit and the lower classes pay. They need to wake up or they will get exactly what the Romans Got (collapsed empire) or the French got (Violent Revolution). Wake up America! It is time to choose your side in the class war the elite continue to execute while telling us there is no "Class War" - you can't pull yourself up by your boot straps while they are pulling the rug out from under you!veloboldie , 2016-07-07 22:41:01My wife used to employ recent graduates from Georgetown University with poli. sci., psychology, sociology degrees, to stack books for $10/hr. It took them on average 2-3 years, before finding work in their field. I keep telling my kids you need to earn a degree that has a skill for life and will always be in demand, i.e. doctor, dentist, vet, engineer, scientist. Additionally, include work oversees in your career.Ardnas1936 -> veloboldie , 2016-07-07 22:41:01Education is NOT about finding a job! It's about learning ways to seek wisdom and rationality, and to assimilate (not deny) new knowledge throughout your life--and that's exactly what's lacking in the US! Our schools are factories to turn out standard robots to be used by the owners of this country, whether they practice law or flip burgers.nataliesutler -> veloboldie , 2016-07-07 22:41:01I was lucky that my parents were born and raised before that happened. They went to what used to be called "country schools"--my dad to a 1-room schoolhouse. Some of the so-called "knowledge" was patriotic trash, serving only the rich elites, but they learned to be sturdy and to think for themselves, so I was lucky and learned a lot at home. Without parents who practice the empathetic, rational morality needed in a democracy, all the jobs in the world--especially if most are for flipping burgers--won't save this dreary country.
You make an excellent point. Thinking about your life rather than just going for a crip major in college would be an excellent way NOT to wind up stacking books for $10 an hour with a degree. I can't count the number of my kids friends who select communications majors, or sociology or women's studies and then are completely surprised when there are no jobs demanding their educational background. What is it that they think they will be qualified to do after college?mikegood , 2016-07-07 22:41:01From the article.... "Some lucky families saw themselves promoted to the upper income bracket." Here in a nutshell we see the author's underlying worldview. Getting to the upper income bracket has nothing to do with effort. Rather it's the result of luck. It's something that is done to you by an outside force.
[Aug 23, 2016] How Abusive Employers Combined With Job Insecurity Lead to Suicides
Notable quotes:
"... During the 15 months that I worked at Pitt, I felt the brunt of this lady's abuse. She'd call me into the office, launch into a blistering tirade, and I would sit there, stunned. And, to her, that was another cause for anger. Why was I just sitting there and not reacting? ..."
"... The authors fail to get to the real fundamentals of this phenomenon. The two ends of the spectrum that they delineate can be housed under a single umbrella, that of neoliberalism. And it is obvious that neoliberalism can kill. And Durkheim would have agreed readily that ideas can kill, and not just via suicide. ..."
"... Give yourself a break inode_buddha. Thirty years ago, you, and myself as well, made a rational decision as to what direction to take. At the time, construction and the associated trades were honourable and respectable. A decent living could be made, and a future was in sight. Neo-Liberalism has, since then, destroyed most things that benefited anyone other than the criminal management classes. Humanity has had to stand up and fight for decency and equality throughout history. ..."
"... I have to tell you, as a small business owner myself, this "regulations are burdensome" argument is a crock. Lobbyists in DC learned decades ago that the best way to put a sympathetic face on their efforts to get waivers for big businesses is to have small business owners act as their mouthpieces. And there are enough extreme libertarians everywhere that it's not hard to find someone to screech that the regulations he is subject to are horrible irrespective of how much a burden they really are. ..."
"... "Perhaps this world is another planet's hell." – Aldous Huxley. Yes, it is definitely. Perhaps pretty soon they will start strip search employees when they come to work. ..."
"... Increasing numbers of suicides are one outcome of these environments. But as the writers point out, there are a number of other symptoms associated with these toxic workplaces, none good. They range from physical and mental health issues, to various forms of addiction, burnout, and secondary effects on employees' personal lives and those of their family members or partners. ..."
"... I agree that neoliberal ideology, globalization, and the basic structures of our debt-based economy all play a key role in enabling the intentional development of these organizational environments. ..."
"... I believe the roots of the problem lie in a broader and deeper systemic failure. ..."
"... market failure ..."
"... This article highlights suicide, but drug and alcohol abuse are just as much a result of poor employment outcomes as suicide and for the same reasons. ..."
Aug 22, 2016 | naked capitalism
Yves here. It's hardly a secret that employers have become more abusive towards employees because they can get away with it. The difficulty of finding new employment, particularly for mid and senior level jobs, combined with the fact that most workers (even comparatively well paid ones) are only a paycheck or two away from financial desperation, means bosses have tremendous leverage over workers. And more and more firms embrace coerciveness as a virtue. In the past, it's more often taken the form of cultishness, which is a very effective business model, as Goldman and Bain attest, but more recently, outright mistreatment is becoming common. For instance, Amazon has so successfully cultivated a "culture of fear" that t he overwhelming majority of employees cry at work .
Note the claim in the article about elevated suicide rates at Apple supplier Foxconn is contested; some contend that statistically, its rate of suicides is no higher than for other employers. However, many of the dorms apparently had mesh canopies to prevent suicides, so one wonders if direct comparisons are apt.
By Sarah Waters, a Senior Lecturer in French Studies, University of Leeds and Jenny Chan, a Departmental Lecturer in Sociology and China Studies, University of Oxford. Originally published at The Conversation
A Paris prosecutor recently called for the former CEO and six senior managers of telecoms provider, France Télécom, to face criminal charges for workplace harassment. The recommendation followed a lengthy inquiry into the suicides of a number of employees at the company between 2005 and 2009. The prosecutor accused management of deliberately "destabilising" employees and creating a "stressful professional climate" through a company-wide strategy of "harcèlement moral" – psychological bullying.
All deny any wrongdoing and it is now up to a judge to decide whether to follow the prosecutor's advice or dismiss the case. If it goes ahead, it would be a landmark criminal trial, with implications far beyond just one company.
Workplace suicides are sharply on the rise internationally, with increasing numbers of employees choosing to take their own lives in the face of extreme pressures at work. Recent studies in the United States, Australia, Japan, South Korea, China, India and Taiwan all point to a steep rise in suicides in the context of a generalised deterioration in working conditions.
Rising suicides are part of the profound transformations in the workplace that have taken place over the past 30 years. These transformations are arguably rooted in the political and economic shift to globalisation that has radically altered the way we work.
In the post-war Fordist era of industry (pioneered by US car manufacturer Henry Ford), jobs generally provided stability and a clear career trajectory for many, allowing people to define their collective identity and their place in the world. Strong trade unions in major industrial sectors meant that employees could negotiate their working rights and conditions.
But today's globalised workplace is characterised by job insecurity, intense work, forced redeployments, flexible contracts, worker surveillance, and limited social protection and representation . Zero-hour contracts are the new norm for many in the hospitality and healthcare industries , for example.
Now, it is not enough simply to work hard. In the words of Marxist theorist Franco Berardi, "the soul is put to work" and workers must devote their whole selves to the needs of the company.
For the economist Guy Standing, the precariat is the new social class of the 21st century, characterised by the lack of job security and even basic stability. Workers move in and out of jobs which give little meaning to their lives. This shift has had deleterious effects on many people's experience of work, with rising cases of acute stress, anxiety, sleep disorders, burnout, hopelessness and, in some cases, suicide .
Holding Companies to Account
Yet, company bosses are rarely held to account for inflicting such misery on their employees. The suicides at France Télécom preceded another well-publicised case in a large multinational company – Foxconn Technology Group in China – where 18 young migrant workers aged between 17 and 25 attempted suicide at one of Foxconn's main factories in 2010 (14 of whom died ).
The victims all worked on the assembly line making electronic gadgets for some of the world's richest corporations, including Samsung, Sony and Dell. But it was Apple that received the most criticism, as Foxconn was its main supplier at the time.
... ... ...
upstater , August 22, 2016 at 10:36 am
Swendr , August 22, 2016 at 2:10 pmOne of our son's best friends from high school was a funny, bright kid that got a BS/MS in Computer Science from Rochester Institute of Technology (RIT) a few years ago. He did his first coop at a software firm in Boston that dealt with electricity demand management.
Then he went to work for Apple, first as a coop then as an employee.
Last April the poor kid killed himself in a conference room at Apple's HQ .
By the time his name was announced to the media, everything about him on Facebook, LinkedIn, etc had disappeared. They scrubbed him off the internet. We don't know if he posted anything before his death, but our son said his pages were pretty generic for a 25 year old.
Let it suffice to say something went terribly wrong in the libertarian paradise of Silicon Valley, really just a ritzier version of FoxConn. Having known him through high school and occasional visits thereafter, one never would have thought such an end would have been possible.
RIP, Ed.
nobody , August 22, 2016 at 11:40 amIt's happening on the job, at school, and damn near any other social institution where the stakes can be ratcheted up in intensity. Suicide is one end of the spectrum of dysfunction. Going postal is another. Our elites don't like wet work much, so they find other ways to get rid of the undesirables. I doubt they planned it this way, but isn't it sweet that all you have to do is stop being fake-nice as a boss and the problem takes care of itself?
nobody , August 22, 2016 at 12:06 pmIt's not only corporations, of course, that have problems with endemic abuse and need to be taking responsibility, nor is the issue restricted to institutions where profits take precedence über alles. Here is the link for the site "Academia Is Killing My Friends," which is described in the "About" section like this:
I am a final year PhD student in the Social Sciences. Last year a fellow PhD student committed suicide after being harassed by a lecturer. I got angry and made this site. This site is a response to the cultures of violence, fear and silence I have witnessed and experienced in my academic community. Sexual harassment, mental illness and unpaid labor are the accepted and expected norms. Abusive academics are well known and yet remain in the community. We are powerless and afraid of backlash, unemployment and failure. All of this gets worse as public spending is cut and universities become increasingly neoliberal institutions. This site is a 'fuck you' to the silence and fear. It is, I hope, a space where we can share our stories of abuse, exploitation and suffering in academia.There are now 104 stories and counting. An excerpt from a recent post (#103):
I started out an idealistic and hopeful student. Worked to pay for college, good grades, got into a good PhD program. Worked hard, had a good mentor, published, moved on to postdoc. I thought that I could keep working hard, publish and move into some reasonable career trajectory. Right?Well, we all know why we're here. I can't even go into the details. It's a familiar story – sexism, racism. Abuse by an advisor, with nowhere to turn. Rampant discrimination and harassment. When I looked for help (from the wrong people, apparently), I was told to suck it up, work harder. Constant financial worries. Every little setback used up my savings. I got sick and never really recovered… stress and overwork guaranteed that. I was good at living modestly, but that wasn't enough to sustain me. Now, I'm just trying to pick up the pieces. I feel floored by the lack of opportunities and support through most of my career. I had no idea how much a career in academia would rely on having money to begin with. I feel like this work has stolen my life away. And I'm not the only one – I know plenty of people who have had a similar experience. The best people leave early.
Worst of all, I don't even feel that I can tell my story. Nobody wants to hear it. Nobody would lift a finger to protect me from retribution. Nobody wants to address problems like this. I feel so much grief for the good I might have done in another profession, the life I could have lived. I don't know what to do with this grief.
Arizona Slim , August 22, 2016 at 12:47 pmWhere did the link go? Well, here it is:
Softie , August 22, 2016 at 2:55 pmSome of the worst abuse I ever experienced was in academia. Here's an example:
During the mid-1980s, I was on the staff of a journal at the University of Pittsburgh. My boss, the departmental librarian, must have come from the Attila the Hun School of Management, because that's how she treated people. Shortly after I started my job, I got on her bad side. I have no idea why this happened. Thirty years late, I still can't figure it out.
It may have had something to do with the introductory meeting we were supposed to have with the journal's publisher.
Well, being the good little employee that I thought I was, I had my office clock set to the correct time. I didn't know it at the time, but the library clock was 10 minutes fast. Yep, the same trick that bars pull on their customers. Getting them out the door before the official closing time.
So, I got to the library a few minutes before 9 a.m. Plenty of time to for the boss and me to walk over to the publisher's office. Bossola was SEETHING. I was LATE! Just look at that CLOCK! It was already after nine!
Over to the publisher's office we walked, and guess what. They weren't even ready for us. So we sat in the waiting area for a while.
The publisher and his staff couldn't have been nicer. The polar opposite of my boss.
During the 15 months that I worked at Pitt, I felt the brunt of this lady's abuse. She'd call me into the office, launch into a blistering tirade, and I would sit there, stunned. And, to her, that was another cause for anger. Why was I just sitting there and not reacting?
During her final tirade, when she told me to start looking for another job, I'd had enough. I told her that I was going to start looking for another city.
Well, guess who sat there, stunned.
She insisted that I didn't have to do anything THAT drastic. But my mind was made up. I was done with her, done with Pitt, and done with Pittsburgh.
Three and a half months and several wonderful bicycling miles later, I landed in Tucson, and I'm still here. Without that nasty boss, I probably wouldn't be in this wonderful city.
As for Ms. Nasty, she left Pitt and went on to become the head librarian at Chatham College, which was nearby. Small women's college. Known for its caring, friendly, and supportive environment. Ms. Nasty didn't last very long there.
And she didn't last very long at St. Michael's College in northern Vermont. I think that she was fired from that institution, but I'm not sure. Let's just say that I hope she was, because she deserved a taste of her own medicine.
Nelson Lowhim , August 22, 2016 at 4:11 pmHere is a story that scared shit of Academia's organized crime ring for a little while in the early 90s.
"The University of Iowa shooting took place at the University of Iowa in Iowa City, Iowa on November 1, 1991. The gunman was Gang Lu, a 28-year-old former graduate student at the university. He killed four members of the university faculty and one student, and seriously wounded another student, before taking his own life."
PlutoniumKun , August 22, 2016 at 5:15 pmDamn. Thing is I've heard this from Actuarials and docs. It's everywhere the "well, just work harder". But some of it is on the employees. None have the frame of mind to kick back, to unionize, and hard (when was unionizing ever easy?). None. All have the neoliberal view that: work hard and you'll be fine. And so when that button is pushed, they go for broke until burned out. It's that or be labeled lazy. Well, being unemployed is also an issue, but there's also the matter of having the language to fight back, to not feel guilty for working less than 100 hours a week etc.
FluffytheObeseCat , August 22, 2016 at 7:14 pmI think an important point about Unions which people forget is that they provide an opportunity for people to vent and let off frustration. I've been a Union rep at various places and many times I would have people come in to have a rant about a certain manager or policy. At the end I would say 'do you want to make a formal complaint?' and the answer would be no – the person just wanted to get it off their chest in a confidential manner.
And to know that if they needed it, there was back up. Non-union places I've worked in, even good ones, lack that safety valve.
inode_buddha , August 22, 2016 at 12:16 pmThe last post on this tumblr is from February of 2016. It's been inactive for half a year. The links may be valuable however.
thump , August 22, 2016 at 12:36 pmI'm in the process of paying a personal price for this BS as I type this, having walked off the job a few months ago. I'm not gonna drive 30 miles each way for 1/2 of what I should be making only to be treated like shit by management brown-nosers. Bad news is, I'm mid-career and not a spring chicken. Considering leaving the field altogether or doing my own startup. But if I had known then what I know now, I would have had the voice recorder app on my phone, recording everything….
larry , August 22, 2016 at 12:36 pmThanks for posting about the blog "Academia is Killing My Friends," but I couldn't find the link, so here it is:
PQS , August 22, 2016 at 1:01 pmThe authors fail to get to the real fundamentals of this phenomenon. The two ends of the spectrum that they delineate can be housed under a single umbrella, that of neoliberalism. And it is obvious that neoliberalism can kill. And Durkheim would have agreed readily that ideas can kill, and not just via suicide.
inode_buddha , August 22, 2016 at 1:59 pmUgh. After twenty years in commercial construction, I thought our industry was an outlier for abuse, psychotic management, and general HR mayhem. Apparently not. Arizona Slim, I could have profiled Mrs. Nasty at any number of firms I worked for…she's not unusual.
I stay at smaller companies with good people for less money because I just can't handle the high pressure and abusive environment of Big Time Construction Firms. I also have zero interest in big projects anymore – too many psycho Owners who appear to delight in torturing the contractor as a hobby. The men I work with think I'm nuts to turn down some work. I tell them, there's no reward for it. No pot of gold at the end of the rainbow, no big promotion – just health problems and more commuting for the same old, same old.
ambrit , August 22, 2016 at 2:11 pmYou too? Abuse, and psycho management is why I'm considering leaving the trade altogether, too bad I've invested 30 years and a few schools into it…. but of course, nobody *made* me invest in myself and believe in the american dream /sarc
redleg , August 22, 2016 at 8:20 pmGive yourself a break inode_buddha. Thirty years ago, you, and myself as well, made a rational decision as to what direction to take. At the time, construction and the associated trades were honourable and respectable. A decent living could be made, and a future was in sight. Neo-Liberalism has, since then, destroyed most things that benefited anyone other than the criminal management classes. Humanity has had to stand up and fight for decency and equality throughout history.
ambrit , August 22, 2016 at 2:01 pmThe decent living in the construction trades, for me anyways, has started and (so far) ended as a contract employee. I'm at the cusp of 50 and am looking at disaster if I can't find something permanent. My spouse has her dream job (that unfortunately comes with mediocre pay) so moving the fam for a job is our of the question. I'm one dropped contract away from my professional expiration date – too old for entry level, not experienced enough for management, unable to move to a better job market if such a thing existed.
But at least I paid off my student loans, so that's not hanging over my head like the sword of Damocles.
PQS , August 22, 2016 at 3:01 pmLiving on the road, out of town, at the jobsite, etc. etc. There's a reason why so many of the Superintendents and Foremen I've encountered on big jobs drink to excess.
I've had my share of Mz/Mr Nasty bosses. The worst thing one can do to one of these persons, as I learned one afternoon, is to laugh at them when they "put you in your place." The program is going south anyway. If the wherewithall is available for a drive home, go ahead and let 'them' know you're not going to put up with abuse anymore. (Easier said than done, I'll agree, but, as long as you and yours aren't starving, why not? You'll sleep better at night. Take my word for it.)
Smaller outfits are, from my experience, easier to get along with because the manager is often the owner or family and not divorced from the ground floor experience. Reason is used instead of formula.I used to hold the same belief about construction being the bilge of the work world. Then I worked for the USPS for almost three years. Then the dreaded Lowes Home Improvement set its avernal brand sizzling on my soul.
Ah my, what a picaresque novel all this would make.
Jim Haygood , August 22, 2016 at 8:42 pmPicaresque novel or hilarious TV show. I've written the scripts in my head a thousand times….clueless architects, raging Owners, ridiculous Inspectors, overfed upper management/sales staff, etc. etc.
I agree that laughter is truly the best medicine in this business. As a friend once told me, "Sometimes you gotta let the crazy people be crazy."
ambrit , August 22, 2016 at 10:09 pm'what a picaresque novel all this would make"
Charles Bukowski [lowbrow NC spell checker don't know him] has covered the USPS bit.
Over to ambrit for the Lowe's sequel. :-)
Arizona Slim , August 22, 2016 at 3:51 pmHmmm..
Some titles: "Faking, Inc.," "Department of Imaginary Tools," "Bargain Employee of the Month," and the annual winner, "Going Out of Business Sale: Season Three."
Since I'll need to go back to work for a few years, until my miniscule SS kicks in, I might do a Home Depot Equal Opportunity for Exploitation Edition.(When I grow up I want to be a Day Trader! Maybe I'll take a flutter in pork bellies on the Chicago Exchange.)
Synoia , August 22, 2016 at 1:18 pmIn her own strange way, Ms. Nasty had quite a positive effect on my life. As our relationship deteriorated, I started piling up the savings. I was planning my escape, even before that final tirade.
My last six weeks at Pitt were amazing. After I tended my resignation (on Friday, February 13, 1987), the whole department was impressed with how relaxed and happy I was. It was as if a different Slim had moved into my body.
Yes, there was that farewell luncheon where Ms. Nasty refused to raise her glass in a toast, but you know what? I was going to be out the door in a few hours, so I no longer cared. In fact, I found her refusal rather amusing.
What came next was even better. That pile of savings was deployed for something I really enjoyed. Long-distance bike touring! Rode thousands of miles in a little over three months! And then I settled here in Tucson!
Where I found a job similar to my Pitt job, but with a nice boss. That was my last FT job. I've been a freelancer since 1994.
So, Ms. Nasty, thanks for the motivation. And I do hope that you learned how to be nice to people who are, ahem, beneath you.
Roquentin , August 22, 2016 at 1:49 pmThat's what Labor (or socialist) political parties used to do, and Corbyn's trying to re-institute in the UK.
One cannot be pro-trade (as currently defined) and pro democratic not pro citizen, not pro-labor.
The US has never permitted socialism, and prefers crony capitalism, which is actually close to fascism.
The whole defense Military Industry Complex of Government and Industry is a definition of fascism in the US. I place no regard on Ike's warning about the MIC as he did noting until the end of his reign, and then made a speech.
DarkMatters , August 22, 2016 at 2:20 pmAt long last I've finally managed to get out of a job I couldn't stand after working there for nearly a decade. The pay was ridiculously low, even relative to the industry standard. Management routinely promoted narcissistic, ignorant cronies who never told them the word "no." I couldn't be happier it's finally over. They've had so much turnover in the past couple of years entire departments are composed of entirely new people. The CEO cares about nothing except looking good to the shareholders and owners, and that's pretty much the attitude from the top on down. Look good to the people with power and to hell with the rest.
I'd be surprised if the company still existed 5-10 years from now.
Nelson Lowhim , August 22, 2016 at 4:19 pmSoooo glad I'm retired. I was starting to see more and more of this over the last couple of decades, and it escalated as times worsened. I wish libertarians and free-marketers would contemplate the situations described here, and consider what kind of a world it would be if financial oligarchs held even more power. What hope would there be to counter this sort of abuse?
kareninca , August 22, 2016 at 7:56 pmThis works perfectly into their view of "weaker" elements being discarded. Pretty fascist at the end of the day.
Yves Smith Post author , August 23, 2016 at 5:41 amI wouldn't exactly call myself a libertarian (I'm not sure what I am), but I think that the libertarian response would be that if there were fewer pointless regulations people would be much more readily able to work for themselves, and not for an abusive boss. It is unbelievably hard to start a business now, even a solo one, due to regs. And I'm not talking about reasonable regs (don't dump toxins in waterways). I'm talking about regs that have been invented by big existing businesses to keep upstarts from starting.
A number of years ago there was an article about someone who tried to start a storage company in the CT/RI area and how they eventually gave up because the regs made the process insane; there's not much that's simpler than a storage company. Most small business owners I know tell me they could not start now because it has all gotten too complicated; they have been able to cobble together responses to the new regs as they go, but starting at this point would be impossible for them.
Picture what it would be like if you could look at your skill set, and go out and work for yourself without a huge amount of extremely complex taxes and paperwork. A strange thought, isn't it?
I'm not saying this would be an option for most people ( not at all ), but it does not now even exist as an escape valve. Now you have to have millions in start-up funds to start some BS company (e.g. one more stupid company that delivers food to patron's homes) that isn't actually meant to make money (it just exists to get money from investors), and you need that much to deal with the paperwork.
And, if someone wants to pop up and say "the paperwork is not so bad and complicated," please remember that you are a NC poster and are in the top ten percent of the population for ability to deal with paperwork.
cyclist , August 23, 2016 at 10:47 amI have to tell you, as a small business owner myself, this "regulations are burdensome" argument is a crock. Lobbyists in DC learned decades ago that the best way to put a sympathetic face on their efforts to get waivers for big businesses is to have small business owners act as their mouthpieces. And there are enough extreme libertarians everywhere that it's not hard to find someone to screech that the regulations he is subject to are horrible irrespective of how much a burden they really are.
Specifically, regarding a storage business, I can't fathom your view that storage companies should not be regulated. If I am putting my valuable stuff in the hands of someone else, I sure as hell want protection that they won't cut all the locks and run off with everything, or find more legitimate ways of stealing, like create excuses to jack up my storage costs by 10X and hold my goods hostage. And what about requiring them to have adequate fire protection and security? Even if they aren't crooks, cheap and reckless will also result in my property being stolen or damaged.
In general, entrepreneurship is way oversold in America to legitimate the bad treatment of workers: "If things are as bad as you say, why put up with it? Go start your own business!" That's ridiculous since staring your own business requires that you be both a good salesman and a good general manager, and good salesmen are almost without exception terrible managers, as anyone in Corporate America will tell you. And it's extremely hard to make partnerships work unless the principals worked together in the same company for years (ie, they grew up with the same training and rules, and so will default to the same assumptions as to how things are done). Even in consulting, I've seldom seen people who come of of different large firms work well together absent a strong organization around them.
The proof that pretty much no one should go into business for themselves is 9 out of every 10 businesses fail within three years. The percentabe is no doubt higher if you extend the time frame to five years. I've started two successful businesses in the US and one that didn't work out in Oz, but an overseas launch is much harder and it seemed too dodgy to go beyond the two years I'd invested (as in I might have made it a go had I kept on, but I decided it was more prudent to cut my losses).
And I don't know where you get your information about new business from. It's pretty clear you aren't in that world. You don't need millions in funds. The overwhelming majority of new ventures are funded from savings, credit cards, and loans from friends and family.
And if you aren't able to handle regulatory filings (or find a lawyer or accountant who can help) you aren't competent to be in business for yourself. Running a business means you run into obstacles all the time and need to find ways around them. Do you not think that private firms also require paperwork, like vendor approval processes and documenting your invoices? If you can't handle paperwork, you need to stay on a payroll.
jrs , August 22, 2016 at 8:39 pmWhile I agree with Yves that there is too much libertarian bitching about regulations, there are a lot of really stupid laws on the books that we could easily do without. As an example, I was recently looking at an RFP from a public agency in the state of MI. One of the requirements for bidders responding was to provide a notarized affidavit that the company was not controlled by the Republic of Iran! Apparently this is Michigan Public Act 517 of 2012. BTW, the winning bidder, a large US corporation, certified they are not secretly controlled by the evil Ayatollahs.
Softie , August 22, 2016 at 2:46 pmyes but most people won't be able to work until they are dead, because they aren't able to or because noone is going to hire them (it's why people collect social security at 62, it's not because this is the smartest financial plan, it's clearly not) and I hope most don't take the "therefore middle aged or senior aged suicide" route.
If you are able to work until you die a natural death good for you I guess (even better to be able to choose to retire of course), but it's not going to be an option for many people even if they want it to be, health or the job market WILL force them out.
ambrit , August 22, 2016 at 10:13 pm"Perhaps this world is another planet's hell." – Aldous Huxley. Yes, it is definitely. Perhaps pretty soon they will start strip search employees when they come to work.
Chauncey Gardiner , August 22, 2016 at 4:12 pm"Out of the Silent Planet" by C. S. Lewis.
nobody , August 22, 2016 at 6:13 pmExcellent and timely article. As the writers observe, the problem is global in nature. If you work in or have worked in corporate America, you likely have personally experienced or seen the results of the deliberate creation of a stressful professional climate and workplace environment, abusive psychological bullying, and intentional destabilization of employees.
Increasing numbers of suicides are one outcome of these environments. But as the writers point out, there are a number of other symptoms associated with these toxic workplaces, none good. They range from physical and mental health issues, to various forms of addiction, burnout, and secondary effects on employees' personal lives and those of their family members or partners.
Although it seems that individuals with psychopathic characteristics often rise in management in many of these organizations, I believe the roots of the problem lie in a broader and deeper systemic failure. I agree that neoliberal ideology, globalization, and the basic structures of our debt-based economy all play a key role in enabling the intentional development of these organizational environments.
Tony Baloney , August 22, 2016 at 7:02 pmIt may be a global problem, but it seems particularly acute in the US. Ian Welsh's observations ring true to me:
One of the most striking things about much of American culture is the simple meanness of it. The cruelty… There is also a culture of punching down… America has a high-violence, high-bullying society… [Y]ou can have a high-violence society in which it is considered unacceptable to attack the weak (doing so is viewed as cowardice), but that's not the case in America. In American culture, the weak are the preferred target. Failure is punishable by homelessness, suffering, and death… You'd better get down on your knees and do whatever your boss wants, because if you're fired or let go you may never work again, and if you do hang on at a bottom-wage job, well, your life will suck… Having learned that the right way to treat anyone who is weaker than them is with demands for acquiescence and dominance displays, to many Americans, to interpret any sign of weakness as requiring them, as a moral duty, to dominate and hurt the weak person. People become what is required of them. They learn from authority figures how to behave… The entire process makes America a far more unpleasant place to live or visit than is necessary. The structure of dominance, meanness and cruelty is palpable to the visitor, and distressing; even as it warps the best inhabitant.James Kroeger , August 22, 2016 at 10:01 pmYou nailed it "nobody".
so , August 22, 2016 at 7:05 pmI believe the roots of the problem lie in a broader and deeper systemic failure.
Yes, a systemic failure, but to be more precise, it is ultimately a particular kind of market failure that gives employers an incentive to abuse their employees.
The best way to understand what I mean is to imagine a labor market where there are always more jobs available than there are people to fill them. In an economy that is experiencing a chronic labor shortage, employers would have a market incentive to actually start treating their employees with respect.
In markets where labor surpluses are carefully maintained (virtually every market you've ever known), business owners/managers feel free to express anger at any employee shehe feels a 'power advantage' over. They sense they have this advantage when/if they believe the employee fears losing hiser job more than the employer fears losing the employee.
It really would force a profound change in employer-employee relations, generally. Employers would be compelled by the marketplace to not only find ways to motivate their employees to work hard, but also to find ways to make them feel content , psychologically.
In an economy that is experiencing a sustained labor shortage, the crudest and least sympathetic methods of motivating employees would be gradually phased out.
'Bottom feeders' in the competition for scarce labor would have a constant incentive to try to retain employees, and to 'go the extra mile' to work with people who are having problems. Individuals who are having personal problems would not be simply cast aside, as they are now.
The national government could do something to help those businesses that are struggling within very [price-] competitive markets, providing counseling services, etc., to help those employees who are struggling with various problems outside of the job environment.
In our current labor surplus economy, lawsuits may give some employers an incentive to treat their people with respect, but it won't get anywhere close to providing THE solution to the problem that we would experience if we were to create and indefinitely maintain a labor shortage in the economy.
Jim Haygood , August 22, 2016 at 8:53 pmhumans sure do have a long way to go.
perpetualWAR , August 22, 2016 at 10:06 pmLow end, dead end, godsend, pretend
it don't matter anywayPerfect chorus of a country song.
ambrit , August 22, 2016 at 10:17 pmQuiet desperation. Isn't that the life of most Americans?
redleg , August 23, 2016 at 12:08 amAnd to think that Pink Floyd recorded the verse; "Hanging on in quiet desperation is the English way." Back in 1968.
Quiet desperation is a characteristic of a declining society.veganjules , August 22, 2016 at 10:17 pmAs far as I can tell quiet desperation is the life of most people.
This article highlights suicide, but drug and alcohol abuse are just as much a result of poor employment outcomes as suicide and for the same reasons.
When people stop being quietly desperate is when change happens.
I refer to CCR's Effigy although as a Gen-X -er I Prefer the Uncle Tupelo versionGuys. You're also forgetting that if the U.S. took in the Nazi Scientists and Death Specialists and used them and their techniques to crush real democratic, fair, egalitarian societies in Latin America (Chomsky) and then learned to transmute overt war (+nazi techniques) and colonialism into Finance (Hudson)–then we are currently dealing with something 'worse than Nazi Germany' (my 90 year old neighbor).
[Aug 22, 2016] Twenty Years Since Welfare Reform How Has America Fared - The Atlantic by Kathryn Edin and H. Luke Shaefer
Notable quotes:
"... there has been a sharp rise in the number of households with children reporting incomes of less than $2 per person per day, a fact we documented in our book, $2 a Day ..."
"... What it did in reality was essentially kill the U.S. cash welfare system. (We use the term "cash welfare" to distinguish it from other forms of assistance, such as housing vouchers and food stamps, which have pre-designated uses.) ..."
"... Prior to August 22, 1996, families such as that one-families with little or no cash income-were entitled by law to a check from the government, thanks to AFDC. The program had many flaws. Yet it provided a cash floor that could have eased the hardships of folks at the end of their ropes. ..."
"... We've traveled to many different parts of the country getting to know people in need. While greedy, heartless landlords were sometimes a source of their troubles, their biggest problem-by far-has been the lack of access to a cash safety net-money-when failing to find or keep a job. In 21st-century America, a family needs at least some cash to have any chance at stability. Only money can pay the rent (though a minority of families get subsidies via a housing voucher). Only money buys socks, underwear, and school supplies. Money is what's needed to keep the utilities on. Each of the families we followed-technically eligible if our reading of the rules is right-weren't getting that money from TANF. ..."
"... Yet these desperately needy families either didn't know the program existed, felt the stigma and hassle weren't worth it, or had been rebuffed at the welfare office. ..."
"... Why has TANF left so many needy families behind? Its advocates argue that it reduces dependency and promotes work. Its critics contend that the time limits and work requirements it imposes are too punitive. Yet a careful look under the hood reveals that both of these claims fail to grasp the fundamental nature of what TANF has become. ..."
"... Built into the very core of TANF are perverse incentives for states to shed families from the welfare rolls. If they do so, they get to keep the money and use it for other things. And outside of what's spent on cash aid, there is virtually no meaningful oversight on how the rest of the money is spent. ..."
"... What are states doing with their TANF dollars if they aren't providing cash welfare to families? Some states, such as Ohio, spend a considerable portion on child care, no doubt a boon to the working poor, yet folks not in jobs or in work programs aren't eligible. Likewise other states, such as Wisconsin, use some of their block grant to fund state tax credits that benefit the working poor. ..."
"... When TANF is used to pay for giveaways for the non-poor or to plug budget holes, it becomes welfare for states and not for people. ..."
"... What states spend astonishingly little on-besides cash assistance-is helping the poor find employment. In 2014, Ohio-which is about at the national average here-allocated only 8 percent of combined federal and state TANF funding to vital "hand-up" activities linking recipients to jobs. ..."
"... Ronald Regan brought the image of the infamous-albeit mythical-welfare queen into the national consciousness. Bill Clinton probably owes his first term in office to his promise to "end welfare as we know it," and possibly his second to signing the reform into law. Both politicians railed against AFDC's so-called "perverse disincentives." TANF offered states a lot of flexibility to innovate, to allow a flowering of new ideas to help the poor. But that's not what the country got. Instead it got a new kind of welfare queens: states. States, not people, are using TANF to close the holes in their budgets. It is states, not people, who are falling prey to the "perverse disincentives" of welfare. ..."
Aug 20, 2016 | theatlantic.com
America's poorest are still dealing with the consequences of the legislation that Bill Clinton signed into law two decades ago today. As recently as April of this year, former president Bill Clinton defended the welfare reform bill he signed into law on August 22, 1996-twenty years ago today-as one of the great accomplishments of his presidency. The bill scrapped the welfare program known as Aid to Families With Dependent Children (AFDC) and created a new one that lasts to this day-Temporary Assistance for Needy Families (TANF). There was a grandiose idea behind the change: TANF was no simple safety net; it was also meant to be a springboard to self-sufficiency through employment, which it encouraged recipients to find work by imposing work requirements and limiting how long they could receive benefits.Today, across the country, welfare is-at best-a shadow of its former self. In much of the Deep South and parts of the West, it has all but disappeared. In the aftermath of welfare reform, there has been a sharp rise in the number of households with children reporting incomes of less than $2 per person per day, a fact we documented in our book, $2 a Day. As of 2012, according to the most reliable government data available on the subject, roughly 3 million American children spend at least three months in a calendar year living on virtually no money. Numerous other sources of data confirm these findings. According to the most recent data available (2014), TANF rolls are now down to about 850,000 adults with their 2.5 million children-a whopping decline of 75 percent from 1996. TANF was meant to "replace" AFDC. What it did in reality was essentially kill the U.S. cash welfare system. (We use the term "cash welfare" to distinguish it from other forms of assistance, such as housing vouchers and food stamps, which have pre-designated uses.)
Cleveland, where the Republicans hosted their convention this year, is one of the poorest cities in the country and a place where the effects of this reform can be seen most plainly. What has happened to welfare in Cuyahoga County, which includes Cleveland and its inner suburbs, is reflective of its fate elsewhere in the nation. Currently, the county's TANF-to-poverty ratio (the fraction of poor families with children who are actually receiving help from the program) sits at 22 percent-right about at Ohio's, and the nation's, average. (In some states, it is dramatically lower, such as Georgia, where it is just six, and Texas, where it is five.)
What's happened to poor people as a result? Since 2013, we've spent considerable time in the city trying to find out. Each year, we catch up with several families who, in 2013, had spent at least three months living without money income exceeding $2 per person per day. To deepen our perspective, we also spend time trying to understand what's going on for the city's poorest, more broadly speaking. Earlier this month, one of us-Kathryn-spent a day talking to supplicants at a west-side food pantry. She spent an afternoon walking the streets of one neighborhood, striking up casual conversations with residents as they took out the garbage or sat on their porches. Yet the toughest experience was when Kathryn went for a ride-along with bailiffs assigned to the Cleveland Housing Court as they went about their daily rounds, evicting a family from their west-side apartment mid-meal.
Prior to August 22, 1996, families such as that one-families with little or no cash income-were entitled by law to a check from the government, thanks to AFDC. The program had many flaws. Yet it provided a cash floor that could have eased the hardships of folks at the end of their ropes.
TANF ought to be able to help-albeit temporarily, as the name implies. Yet many of the people we have studied have never received it. One woman, a high-school graduate and a mother of two, told us she doesn't think it's worth it. She believes that in order to meet the program's requirements, she would have to work full time at a make-work job, leaving her no time to find legitimate employment.
Others have tried to get it and failed. When one mother we know lost her job at Walmart after her only means of transportation failed, she initially refused to apply for TANF out of pride, insisting that she was a worker, not a leach on the government. Finally, after months of fruitless job search, plus a list of health diagnoses a mile long, she broke down and applied. Since then, she has been sent away three times, all for no legitimate reason we, as TANF experts, can discern. Now, she, her daughter, and her fiancé are tripled-up with friends in a house that lacks heat and running water but offers a free roof over her head.
And many more aren't even aware TANF is available. During her visit to the west-side food pantry a few weeks ago, Kathryn met families camping in unfinished basements of friends, a couple who survived a Cleveland winter while sleeping in a tent (they advised finding a thick mattress to keep your body off the ground and to keep a candle burning), and a family in the process of breaking apart-the three children parceled off to relatives-until a laid-off Ford assembly line worker and his partner of 14 years, who cleaned suburban homes until her car was repossessed, can secure stable jobs and a place to live. When we asked why they didn't apply for TANF, we were met with blank stares. If our experiences across the city this summer are any guide, many poor Clevelanders-even those in desperate straits-don't even realize the program exists.
We've traveled to many different parts of the country getting to know people in need. While greedy, heartless landlords were sometimes a source of their troubles, their biggest problem-by far-has been the lack of access to a cash safety net-money-when failing to find or keep a job. In 21st-century America, a family needs at least some cash to have any chance at stability. Only money can pay the rent (though a minority of families get subsidies via a housing voucher). Only money buys socks, underwear, and school supplies. Money is what's needed to keep the utilities on. Each of the families we followed-technically eligible if our reading of the rules is right-weren't getting that money from TANF.
How did they survive? Nearly all had sold plasma from time to time, some regularly. In 2014, so-called "donations" hit an all-time high at 32.5 million, triple the rate recorded a decade prior. They collected tin cans for an average yield of about $1 an hour. They traded away their food stamps, usually at the going rate of 50 or 60 cents on the dollar. Some traded sex for cash or-more commonly-the payment of their cell phone bill, a room to stay in, a meal, or some other kind of help. One 15-year-old was lured into a sexual relationship with her teacher on the promise of food. Yet these desperately needy families either didn't know the program existed, felt the stigma and hassle weren't worth it, or had been rebuffed at the welfare office.
Some would argue that families are better off without cash welfare. Franklin Delano Roosevelt warned that welfare was "a narcotic, a subtle destroyer of the human spirit." Yet even Ron Haskins, one of the Republican architects of the program, recognizes that the problem of "disconnected mothers"-those neither working nor on welfare-is "a serious policy issue, that its magnitude is increasing, and that in two decades the nation has not figured out how to address the problem."
Why has TANF left so many needy families behind? Its advocates argue that it reduces dependency and promotes work. Its critics contend that the time limits and work requirements it imposes are too punitive. Yet a careful look under the hood reveals that both of these claims fail to grasp the fundamental nature of what TANF has become.
To put it plainly, TANF is not really a welfare program at all. Peter Germanis, a conservative expert on welfare policy and former Reagan White House aide, describes it best, as a "fixed and flexible funding stream"-think slush fund-for states, provided by what are known as "block grants." Yes, some block-grant dollars are used to provide cash aid to struggling families. But three of every four dollars allocated to TANF is directed toward other purposes.
How can this be? After the 1996 welfare reform bill was signed into law, states were no longer obligated to give out a dime to those in need. The rules governing TANF are so flexible that states can potentially eliminate cash handouts all together. What's more, TANF's rules threaten to penalize states that continue to provide cash assistance, such as California, Minnesota, Oregon, and Vermont. It is easier to comply with TANF regulations by simply pushing people off the rolls, as Cuyahoga County has done.
Built into the very core of TANF are perverse incentives for states to shed families from the welfare rolls. If they do so, they get to keep the money and use it for other things. And outside of what's spent on cash aid, there is virtually no meaningful oversight on how the rest of the money is spent.
If past is prologue, the dollars devoted to cash assistance will only continue to dwindle. Even in 2006, TANF had far greater reach than it does now. Meanwhile, counts of the number of families knocking on the doors of the nation's food pantries have reached the highest point ever recorded. "Donations" of blood plasma in exchange for cash have tripled in the last decade. School-aged children are increasingly likely to be homeless or doubled up. In sum, on many measures, child and family wellbeing has taken a nosedive.
Welfare reform is certainly not the only factor driving these trends. An increasingly perilous low-wage labor market and a growing affordable-housing crisis are critical drivers too. Yet a simple thought experiment brings the role of welfare reform in focus. Imagine a world in which states are prohibited by law from denying any family who meets eligibility criteria. Now envision a world in which denying a family in need is perfectly legal, and states who do so get to keep the cash. This is America before and after welfare reform. On the eve of welfare reform, roughly seven in 10 poor families claimed cash aid; only about two in 10 now do so. If the safeguards governing AFDC were in place today, this sort of extreme poverty would be a fraction of what it is now.
What are states doing with their TANF dollars if they aren't providing cash welfare to families? Some states, such as Ohio, spend a considerable portion on child care, no doubt a boon to the working poor, yet folks not in jobs or in work programs aren't eligible. Likewise other states, such as Wisconsin, use some of their block grant to fund state tax credits that benefit the working poor.
But the remainder goes to an assortment of other activities not necessarily benefitting the impoverished at all. Michigan funds college scholarships for young adults with no children, under the rationale that doing so may reduce teen pregnancy. Texas spends a large chunk of its block grant on its child welfare-system, an expense the state would have to assume responsibility for otherwise. When TANF is used to pay for giveaways for the non-poor or to plug budget holes, it becomes welfare for states and not for people.
What states spend astonishingly little on-besides cash assistance-is helping the poor find employment. In 2014, Ohio-which is about at the national average here-allocated only 8 percent of combined federal and state TANF funding to vital "hand-up" activities linking recipients to jobs.
Ronald Regan brought the image of the infamous-albeit mythical-welfare queen into the national consciousness. Bill Clinton probably owes his first term in office to his promise to "end welfare as we know it," and possibly his second to signing the reform into law. Both politicians railed against AFDC's so-called "perverse disincentives." TANF offered states a lot of flexibility to innovate, to allow a flowering of new ideas to help the poor. But that's not what the country got. Instead it got a new kind of welfare queens: states. States, not people, are using TANF to close the holes in their budgets. It is states, not people, who are falling prey to the "perverse disincentives" of welfare.
[Aug 21, 2016] Gaius Publius: You Broke It, You Bought It – A Sanders Activist Challenges Clinton Supporters
No progressives worth their name would vote for Hillary. Betrayal of Sanders made the choice more difficult, but still there no alternative. Clinton "No passaran!". Also "Clinton proved capable of coming to an agreement with Sanders. He received good money, bought a new house, published a book, and joined with Clinton, calling on his supporters to vote for her"...
Crappy slogans like "hold her feet to the fire" are lies. Has there ever been serious detail about that? I've seen this line over and over. Hillary is dyed-in-the-wool neoliberal and will behave as such as soon as she get into office. You can view her iether as (more jingoistic) Obama II or (equally reckless) Bush III. If she wins, the next opportunity to check her neoliberal leaning will be only during the next Persidential election.
Notable quotes:
"... ...was Clinton the better progressive choice against Sanders? Almost no Sanders-supporting Democratic voter would say yes to that. Not on trade, not on climate, not on breaking up too-big Wall Street banks, not on criminally prosecuting (finally) "too big to jail" members of the elite - not on any number of issues that touch core progressives values. ..."
"... It's time for progressives who helped Hillary Clinton beat Bernie Sanders in the primary to take the lead on holding her accountable. ..."
"... She's now appointed two pro-TPP politicians to key positions on her campaign - Tim Kaine as her Vice President and Ken Salazar to lead her presidential transition team. It's time for progressives who helped Clinton beat Bernie Sanders in the primary to take the lead on holding her accountable. ..."
"... The choice of Salazar is a pretty good sign that as expected we'll be seeing the 'revolving door' in full force in a Clinton administration. As head of the transition he'll have enormous influence on who fills thousands of jobs at the White House and federal agencies. ..."
"... It is really important to stop referring to "job-killing trade deals" and point out every single time they are mentioned that the TPP, TTIP and TISA are about GOVERNANCE, not about "trade" in any sense that a normal person understands it. ..."
"... TPP & its ilk, like NAFTA and CAFTA before them, are about world government by multinational corporations via their Investor State Dispute Settlement (ISDS) provisions. ..."
"... Regulatory arb, slice of corruption, and like shareholder value memes an equity burnishing tool… ..."
"... One thing I liked about Thom Hartmann was he relentlessly drove home the point that the US succeeded, grew, and became the dominant economic power in the world through the use of TARIFFS. Tariffs are necessary. ..."
"... The nafta-shafta deals relinquish the right to even think about tariffs. You don't have a sovereign nation any more. ..."
"... You can visit the prosperous Samsung-suburb of Suwon, Korea and see all the abandoned manufacturing space (where Korea was just a step on the path to Vietnam and Bangladesh). ..."
"... Information revolution automation is substituting machines for human intelligence. Here the race to the bottom is a single step, and these "trade" deals are all about rules of governance that will apply when people have been stripped of all economic power. ..."
"... merely infinite wealth and power for a thin oligarchy of robot/machine owners? ..."
"... Globalization and Technologization is a canard they use to explain the impoverishment and death of the working class. ..."
"... The fact that auto manufactures moved plants to low wage, nonunion, right to work states actually highlights the fact that labor costs drive the decision where to locate manufacturing plants. ..."
Aug 20, 2016 | nakedcapitalism.com
...was Clinton the better progressive choice against Sanders? Almost no Sanders-supporting Democratic voter would say yes to that. Not on trade, not on climate, not on breaking up too-big Wall Street banks, not on criminally prosecuting (finally) "too big to jail" members of the elite - not on any number of issues that touch core progressives values.
... ... ...
Becky Bond on the Challenge to Clinton Supporters
...Bond looks at what the primary has wrought, and issues this challenge to activists who helped defeat Sanders: You broke it, you bought it. Will you now take charge in the fight to hold Clinton accountable? Or will you hang back (enjoying the fruits) and let others take the lead? ("Enjoying the fruits" is my addition. As one attendee noted, the Democratic Convention this year seemed very much like "a jobs fair.")
Bond says this, writing in The Hill (my emphasis):
Progressive Clinton supporters: You broke it, you bought it
It's time for progressives who helped Hillary Clinton beat Bernie Sanders in the primary to take the lead on holding her accountable.
With Donald Trump tanking in the polls, there's room for progressives to simultaneously crush his bid for the presidency while holding Hillary Clinton's feet to the fire on the TPP .
And yet:
She's now appointed two pro-TPP politicians to key positions on her campaign - Tim Kaine as her Vice President and Ken Salazar to lead her presidential transition team. It's time for progressives who helped Clinton beat Bernie Sanders in the primary to take the lead on holding her accountable.
... ... ...
Bond has more on Salazar and why both he and Tim Kaine are a "tell," a signal of things to come from Hillary Clinton: "The choice of Salazar is a pretty good sign that as expected we'll be seeing the 'revolving door' in full force in a Clinton administration. As head of the transition he'll have enormous influence on who fills thousands of jobs at the White House and federal agencies."
... ... ...
Carla , August 20, 2016 at 5:40 amsd , August 20, 2016 at 5:55 amIt is really important to stop referring to "job-killing trade deals" and point out every single time they are mentioned that the TPP, TTIP and TISA are about GOVERNANCE, not about "trade" in any sense that a normal person understands it.
This is the evil behind the lie of calling these "trade" agreements and putting the focus on "jobs." TPP & its ilk, like NAFTA and CAFTA before them, are about world government by multinational corporations via their Investor State Dispute Settlement (ISDS) provisions.
That's what's at stake; not jobs. The jobs will be lost to automation anyway; they are never coming back. The TPP et al legal straight jackets do not sell out jobs, that's already been done. No, what these phony trade agreements do is foreclose any hope of achieving functioning democracies. Please start saying so!
Carla , August 20, 2016 at 6:25 amQuestion – If automation killed jobs, then why did manufacturing move to low wage states and countries?
different clue , August 21, 2016 at 2:00 amI miss-typed above. Of course I meant TPP and not ttp.
Yes, WTO, NAFTA, CAFTA, etc., certainly killed jobs. However, those jobs are not coming back to these shores. In the higher wage countries, "good" jobs - in manufacturing and in many "knowledge" and "service" sectors - as well as unskilled jobs, are being or have been replaced with automated means and methods.
Just a few examples: automobile assemblers; retail cashiers; secretaries; steelworkers; highway toll collectors; gas station attendants. ETC. Here's what's happened so far just in terms of Great Lakes freighters:
"The wheelman stood behind Captain Ross, clutching a surprisingly tiny, computerized steering wheel. He wore driving gloves and turned the Equinox every few seconds in whatever direction the captain told him to. The wheel, computer monitors and what looked like a server farm filling the wheelhouse are indicative of changes in the shipping industry. Twenty years ago, it took 35 crew members to run a laker. The Equinox operates with 16, only a handful of whom are on duty at once."
http://www.nytimes.com/2016/08/21/travel/great-lakes-montreal-minnesota.html
TPP, TTIP and TISA are about GOVERNANCE, not trade, and only very incidentally, jobs. The rulers of the universe vastly prefer paying no wages to paying low wages, and whatever can be automated, will be, eventually in low-wage countries as well as here and in Europe. A great deal of this has already happened and it will continue. Only 5 sections of the TPP even deal with trade–that's out of 29. Don't take this on my authority; Public Citizen is the gold standard of analysis regarding these so-called "trade" agreements.
Andrew , August 20, 2016 at 6:34 amIt took the OverClass several decades to send all those jobs away from our shores. It would take several decades to bring those jobs back to our shores. But it could be done within a context of militant belligerent protectionism.
Americans are smart enough to make spoons, knives and forks. We used to make them. We could make them again. The only obstacles are contrived and artificial political-economic and policy obstacles. Apply a different Market Forcefield to the American Market, and the actors within that market would act differently over the several decades to come.
Skippy , August 20, 2016 at 6:37 amAutomation hasn't eliminated those jobs yet. But it will. See Foxconns investment in automation to eliminate iPhone assemblers.
EndOfTheWorld , August 20, 2016 at 6:46 amRegulatory arb, slice of corruption, and like shareholder value memes an equity burnishing tool…
casino implosion , August 20, 2016 at 6:07 pmOne thing I liked about Thom Hartmann was he relentlessly drove home the point that the US succeeded, grew, and became the dominant economic power in the world through the use of TARIFFS. Tariffs are necessary. They protect your industries while at the same time bringing in a lot of revenue.
The nafta-shafta deals relinquish the right to even think about tariffs. You don't have a sovereign nation any more.
different clue , August 21, 2016 at 2:02 amSovereign nations are racist.
Tom , August 20, 2016 at 6:50 amReally? Even multi-ethnic ones like Russia? Or America on a good day? Or Canada?
You might want to be careful with Davos Man Free-Trade hasbara like that. You could end up giving racism a good name.
Tom , August 20, 2016 at 7:55 amOff-shoring was just a stop-gap measure until human capital could be completely removed from the equation.
John , August 20, 2016 at 10:07 amI meant to include a link to this particularly shocking example from a few months ago:
Foxconn, Apple's Chinese supplier, is replacing 60,000 workers with AI robots.Tom , August 20, 2016 at 2:55 pmWell then Apple can bring the all it's manufacturing back to the U.S. No need to be in China if they aren't using slave wage workers.
dk , August 20, 2016 at 8:20 amHumans are just one line item on the list of expenses..
Vastydeep , August 20, 2016 at 7:19 am^That.
PhilU , August 20, 2016 at 10:00 amThe first round of industrial revolution automation substituted machines for human/horse mechanical exertion. We reached "peak horse" around 1900, and the move to low-wage/low-regulation states was just a step on the global race to the bottom. You can visit the prosperous Samsung-suburb of Suwon, Korea and see all the abandoned manufacturing space (where Korea was just a step on the path to Vietnam and Bangladesh).
Information revolution automation is substituting machines for human intelligence. Here the race to the bottom is a single step, and these "trade" deals are all about rules of governance that will apply when people have been stripped of all economic power.
Will the rise of the machines lead to abundance for all, or merely infinite wealth and power for a thin oligarchy of robot/machine owners? TPP and it's ilk may be the last chance for we the people to have any say in it.
John Zelnicker , August 20, 2016 at 10:23 amManufacturing is in decline due to Reagan's tax cuts and low investment. Globalization and Technologization is a canard they use to explain the impoverishment and death of the working class.
TimmyB , August 20, 2016 at 12:31 pm@Squirrel – Labor costs, as you say, are a driving force; they are not the only one. Notice that the products you mentioned are all large heavy items. In these cases the transportation costs are high enough that the companies want their production to be close to their final market. The lower cost of labor elsewhere is not enough to compensate for the higher shipping costs from those locations. In addition, the wage gap between the US and other places has narrowed over the past 20 years, mostly due to the ongoing suppression of wage gains in the US. Your examples are exceptions that do not falsify the original premise that a huge amount of manufacturing has moved to lower wage locations. And those moves are still ongoing, e.g., Carrier moving to Mexico.
The cost of manufactured goods has not fallen because the labor savings is going to profit and executive compensation, not reduced prices.
The fact that auto manufactures moved plants to low wage, nonunion, right to work states actually highlights the fact that labor costs drive the decision where to locate manufacturing plants.
[Aug 12, 2016] More than a third of female students have mental health problems
Stress kill. Stress combined with mental overload is even more dangerous.
Notable quotes:
"... One in three female students in the UK has a mental health problem, a survey suggests. This compared with about a fifth of male undergraduates, the YouGov survey of 1,061 students found. Overall, some 27% of the students said they had a mental health problem. ..."
"... Of those surveyed, 30% of males and 27% of females said they would not feel comfortable in talking about their mental illness with friends or family. ..."
Aug 12, 2016 | bbc.com
One in three female students in the UK has a mental health problem, a survey suggests. This compared with about a fifth of male undergraduates, the YouGov survey of 1,061 students found. Overall, some 27% of the students said they had a mental health problem. This rose to 45% among lesbian, gay, bisexual and transgender students.
Universities UK said institutions were working hard to develop good services that linked in with the NHS.
Of those students who said they had a mental health problem:
- In May, statistics published by the ONS showed student suicides had risen to their highest level since numbers were first recorded in 2007.
- These figures - for 2014 - showed there were 130 suicides in England and Wales among full-time students aged 18 or above. Of those, 97 deaths were for male students and 33 were females.
There has been concern about the level of mental health support services provided by universities. But the survey showed students were broadly aware of the mental health services offered by their universities.
Seeking helpAnyone affected by mental health issues can contact a number of organisations, such as:
Some 18% of students had already made contact with university mental health services, and, of those who had, nearly nine out of 10 had seen a counsellor.
Of those surveyed, 30% of males and 27% of females said they would not feel comfortable in talking about their mental illness with friends or family.
Challenging stigmas
Chief executive of Universities UK Nicola Dandridge said universities took student mental health "very seriously". "For some students, an unfamiliar higher education environment can be stressful, particularly for those who already have an underlying illness. "Some students are reluctant to disclose their difficulties, which can also present a challenge for universities seeking to support them."
But she added that the development of policies and anti-stigma campaigns was beginning to address these issues. "The challenge for universities is to build on the support services and external links that exist already, enabling referral to the NHS where necessary," she said. "It is important to remember that university wellbeing services, however excellent, cannot replace the specialised care that the NHS provides for students with mental illnesses."
Universities UK also said it had issued guidance to all universities last year with advice on dealing with students with mental health issues.
See also
[Aug 07, 2016] Angry Bear " Taxes, government, and the good life
angrybearblog.com
- Jim Hannan August 6, 2016 10:47 am
It's surprising to me how little talk there is about the estate tax. When Bill Clinton was president, the estate tax rate was 55% on estates over $1.5 million. The Bush tax cuts eliminated the estate tax, but only in the last year of the ten years that the tax cuts were in effect. So, certain high asset taxpayers like George Steinbrenner of NY Yankees fame, paid no estate tax because they died that year.
When the Democratic congress was unable to pass a new tax law in the fall of 2010, with all of the Bush tax cuts expiring, Obama was left to negotiate with Republicans on the new tax rates. The estate tax rate is now 40% on estates over $5 million.
If Democrats ever regain control of Congress, I suggest that they consider a tiered estate tax, similar to the tiered income tax. Let the 40% rate stay for estates from $5 million to say $25 million. Then, move to a 50% rate for estates from $25 to $100 million. Finally, have a 60% rate for estates above $100 million.- Zachary Smith August 6, 2016 11:12 am
"We have starved the IRS while assigning it more and more functions, meaning it is much harder for the IRS to effectively enforce the laws, allowing wealthy people and big corporations with sophisticated lawyers a better chance to scam the system while ordinary people pay taxes due through withholding."
I'd quibble with the "we" part of this statement, but this was a really good read overall.
I don't see things getting any better. Both of the presidential candidates are quite wealthy. One was born with a silver spoon in his mouth, and has no idea at all what it's like to live in the "real world". The other is nouveau riche, and that mix of relative poverty and newly found wealth has warped her viewpoint of the world.
I'm a hardliner on the estate tax. Anything exceeding some arbitrary point – say $100 million – would be taxed at 95%. Can't see THAT happening, either. The propagandists for the rich would use extreme examples – What If You Won The Power Ball? And Joe Sixpack would buy it. Just as he has been against his own interests for generations.
- EMichael August 6, 2016 11:25 am
ZS,
Nice to see your consistency. Amazing how you can come to an opinion about different topics(like the estate tax) and what Clinton believes without making any effort to find out the truth.
Must be nice to know everything without reading anything.
- Joel August 6, 2016 1:42 pm
Why not tax estates like income? The person who inherits the windfall didn't earn it, I know, but like every taxable transaction, money has changed hands.
Tax inherited income as income. Tax dividend income as income. Why privilege some kinds of income over others?
[Jul 03, 2016] Men Exiting Workforce as Low-Wage Jobs Vanish by Yves Smith
Notable quotes:
"... The report dismisses the myths that access to Social Security disability or that men are not choosing to work as culprits. More than a third were in poverty. Fewer that 25% of the men not working have a spouse supporting them and that percentage has dropped in the last 50 years. The CEA's analysis find that Social Security disability explains at most 0.5% of the reduction. ..."
"... Similarly, the problem with European-style job training programs is that US employers do not want to hire people with general training, even in a particular skill area. Their strong preference is to hire someone who is doing the exact same job for a similar company, so as to minimize their effort (in theory; in practice, the extra time spent on the search probably offsets the theoretical savings). The cure for that is a much more robust job market, where employers realize they are not going to find the perfect candidate and take someone approximate and give them the training and other guidance they need to become productive. ..."
"... Friends of mine visited Germany last year, noticed that for curb, pothole repair where in the US you see 2-3 guys and a bunch of equipment, there he would see 8 guys with shovels and little to no equipment. ..."
"... Yes, when I was working at UT-Austin, they cut the janitorial staff so that offices were only vacuumed once a month. ..."
"... The reality of what is happening is on the economic/political level. It involves a small number of people, living in a rich, opulent high tower, who for years acted and enacted without the slightest bit of empathy or selflessness. These same people have literally no depth to their thought and are ruled by the very gluttony/ego so valued in todays consumerist society. This type used to live in Rome during Diocletian's rule, in Egypt during the Hyskos invasion, in the Mayan Empire during the Postclassic period, etc ad infinitum. The overall picture has repeated itself, as an empire is a microcosm of any living organism; it gets old and becomes very susceptible to change, that is, the ruling class become so removed from reality that their decision making begins to deviate further and further from the actuality of the current situation. The Housing Crisis is a prime example. The banks saw fit to literally scam their own customers with no government intervention! Twice! This type of thinking quickly affects the entire nation. People begin to see a futility in living morally and truthfully, and start to wonder if the entire system is a scam. ..."
"... I've visited enough towns in the Mid West where everyone is on some pharmaceutical, usually Percocet or valium, yet have no money for a proper house with heating and cooling. ..."
"... So entire industries now eschew people older than 30 in favor of being staffed entirely by 20 something's. This will surely end well. ..."
"... They are bring these workers from India where starting IT salaries are $10,000/year. Check early in the morning and late at night and you will see the buses delivering the workers who lived crammed in surrounding apartments. One told me his Indian outsourcers had eight of them living in a two-bedroom apartment with one bathroom - while working 80-100 hours per week. They are threatened with deportation if they complain, and in some cases, their families back home are physically threatened. ..."
"... granting automatic work authorization to all H-1B spouses. ..."
"... expanding Bush's "Optional Practical Training" now allowing stem graduates to work for three years ..."
"... lowered qualifying requirements for L-1B visas. L-1b visas allow corporations to import their foreign employee to work in the US at the home nation salaries. And has lead to widespread abuse such as foreign employees being paid $1.73/hour. ..."
"... modified the B-1 visa, used attended training and meetings, to incorporate the "B-1 in lieu of H-1B" which now allows some foreign workers to work in the US on the B-1 visa ..."
"... There are now well over a million foreign guest workers in the US and the numbers are growing. Curiously (ha ha!), DHS does not even keep count of the above admissions. ..."
"... Wow, didn't know they expanded the student work permission to three years. Used to be one year. Essentially if you go to college here you have bought yourself a ticket to live in America and take a job from an American. ..."
"... I was replaced by a 20-something. Actually, at my last job (3 years ago) both the older employees, myself and another employee, were replaced. One employee who had worked there for 15 years and was 60, so TWO years away from retirement, was let go. (I hope he sued the pants off that horrible firm!) ..."
"... Yes indeed, there's a reason big business doesn't want medicare for all – it would result in the ultimate 'flexible workforce'. Workers immediately bailing out of every shit show employment situation they manage to fall into at the drop of the hat with no COBRA or insurance dead zones. But on the other side of the coin, it would ramp up the Uber jitney economy of on-demand disposable workers lined up holding signs displaying their skill sets for a day's pay at the highway on-ramps at 6:30 AM (or, as the neo-liberal mindset would frame it – the entrepreneurs). ..."
"... Thats pretty much how the movie/tv industry operates in Hollywood. ..."
"... History of Work Comp as I remember it - speaking of how "the company" counts its beans: Johns Manville had a problem with people getting slowly sicker on the job (handling asbestos) starting late in the 1800s paid doctors to do studies that proved the asbestos-asbestosis-mesothelioma connection, and gave some rates of worsening of the diseases and hence points at which workers could no longer work. The researchers and doctors were paid for and threatened into silence on the findings, and required to ignore their Hippocratic obligations. Workers had to go to company doctors, who would nurse them along until they were fired for inability. ..."
"... All labor reform policies put forth by Republicans and their policy activation arm (Dems) have been to make life easier and richer for CEO's, not to help workers. So now economists are surprised by the results? What a useful profession they are. ..."
"... The 40 hour work week was established under Roosevelt. If you wish to reverse or stave off the declining Participation Rate, then decrease the required number of hours work to 32. We have agreed before that Labor is the lowest cost when compared to Overhead or Materials. In the end, the difference in cost would be made up by higher productivity. ..."
June 21, 2016 | nakedcapitalism.com
A new Council of Economic Advisers study released by the White House on the fall in labor force participation among men of prime working age (25 to 54) should be subtitled, "It's the Neoliberal Economy, Stupid."
The report does a useful job in documenting where the level and nature of the decline in male workforce participation, which peaked at 98% in 1954 and is now at 88%, the third lowest among OECD countries. The decline is concentrated among less educated:
Blacks have been hit harder than other groups:
And the general outlook for employment has been deteriorating over time. However, bear in mind that this decay somewhat overlaps with the story that less educated groups have been harder hit. US educational attainment has fallen over time.
The report dismisses the myths that access to Social Security disability or that men are not choosing to work as culprits. More than a third were in poverty. Fewer that 25% of the men not working have a spouse supporting them and that percentage has dropped in the last 50 years. The CEA's analysis find that Social Security disability explains at most 0.5% of the reduction.
The cause is the state of the job market:
• Participation has fallen particularly steeply for less-educated men at the same time as their wages have dropped relative to more-educated men, consistent with a decline in demand.
o In recent decades, less-educated Americans have suffered a reduction in their wages relative to other groups. From 1975 until 2014, relative wages for those with a high school degree fell from over 80 percent of the amount earned by workers with at least a college degree to less than 60 percent
While doing a fine job dimensioning profile of the groups that have been hit the worst, the authors, after invoking hoary neoliberal defenses, as in these workers are the losers in a globalized market, the paper gives a coded acknowledgment that policies that are hostile to workers have produced the expected result:
This reduction in demand, as reflected in lower wages, could reflect the broader evolution of technology, automation, and globalization in the U.S. economy.
Conventional economic theory posits that more "flexible" labor markets-where it is easier to hire and fire workers-facilitate matches between employers and individuals who want to work. Yet despite having among the most flexible labor markets in the OECD-with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage-the United States has one of the lowest prime-age male labor force participation rates of OECD member countries.
It is remarkably cheeky to see the authors attempt to depict "flexible" labor markets, where workers can be tossed on the trash heap, as beneficial to laborers.
The recommendations are tepid, and the authors assert "A number of policies proposed by the Administration would help to boost prime-age male labor force participation." In other words, we are to believe the problem is those Republican meanies in Congress, as opposed to Obama not pushing hard for these measures in his first term, when he had the opportunity to pass wide-ranging reforms.
One proposal is the new conventional wisdom of more infrastructure spending to create more jobs for unskilled workers directly, improving community colleges and other training so workers will have skills that line up with hot job markets. The problem with the latter idea is that demand can shift quickly (look at how the oil patch was robust a few years back and is now just starting to get back on its feet). Moreover, employers are extremely prejudiced against both older people and people who've been out of the workforce, and the age which is deemed to be "older" has collapsed. Per Wolf Richter (emphasis original):
Now I've come across a fascinating piece on MarketWatch, an article on what to do to get into the cross hairs of a recruiter whose algos are combing through millions of profiles on LinkedIn.
No recruiter in his right might is personally clicking through LinkedIn profiles. They're all scanned by algos by the millions in nanoseconds. And so the trick is structuring your profile to get the algos to pay attention. This isn't a human-to-human scenario, but a human-to-algo scenario. You're trying to second-guess an algo that's going to decide your future….
But apparently the lifespan of a degree has been shortened from 20 or 25 years to just 10 years! Then it rots, and it has to be swept under the rug. The article put it this way (emphasis added):
Older job-seekers….
I mean, I'm already seething.
Older job-seekers need to walk a fine line. Unless you made the cover of "Time" or discovered a solar galaxy, experience has a shelf life on LinkedIn, says Scott Dobroski, career trends analyst at Glassdoor. There's no need to wax lyrical about a job that's more than 10 years old, he says. And those who g raduated from college a decade ago may want to exclude the date they graduated. "Your college graduation date will age you," he says, "and although ageism is illegal, it's happening all the time." On the other hand, if you're applying for a job as CEO of a Fortune 500 company and you graduated in 1986, it's okay to leave the date, Dobroski says.
Note the word "older job seekers" in connection with a college degree from 10 years ago. Those older job seekers are early Millennials!
Yves here. Admittedly, candidates on LinkedIn are more educated than the group this study is most concerned about, but consider the message: even among the educated, the shelf life of a degree has diminished greatly due to ageism. Why would it be less bad among the less well educated?
Similarly, the problem with European-style job training programs is that US employers do not want to hire people with general training, even in a particular skill area. Their strong preference is to hire someone who is doing the exact same job for a similar company, so as to minimize their effort (in theory; in practice, the extra time spent on the search probably offsets the theoretical savings). The cure for that is a much more robust job market, where employers realize they are not going to find the perfect candidate and take someone approximate and give them the training and other guidance they need to become productive.
And finally, the report claims that Obama has been pumping for one of the most needed remedies:
Increasing wages for workers by raising the minimum wage, supporting collective bargaining, and ensuring that workers have a strong voice in the labor market.
Help me.
So I'm at a loss to understand the political purpose of this report. It's useless as a policy driver given that this is an election year when Obama is a lame duck. Perhaps it is a weak effort at legacy-bolstering by showing that even though the decline in labor force participation among men was marked in the Obama Administration, it started long before he took office. But it still ignores some elephants in the room, like the fact that employers stopped sharing the benefits of productivity gains with workers starting in the mid-1970s and lack of sufficient demand in the economy. What it does reveal is one of the many time-bombs that Obama has left for the next President.
Marco , June 21, 2016 at 7:27 amBenedict@Large , June 21, 2016 at 8:52 amTime to start blaming those darn "stay-at-home" dads!! (PEW via CalculatedRisk) How much more evidence will it take for orthodox economists to stop manufacturing silly excuses for a crappy job market.
Simon , June 22, 2016 at 9:08 amEconomists since the 1970s have been primarily involved with explaining away unemployment; that is, saying it doesn't exist. This is because their theory of inflation (printing money = inflation) breaks the rules of elementary algebra if unemployment does exist. To normal people (non-economists) confronted with such a situation, the theory would quickly be abandoned as nonsense, but to economists this is not an option, because this theory also says that big government is bad, a truism that in the economics profession needs no explanation.
So you see, Marco, there is no crappy jobs market because there's no such thing as unemployment. Ask any economist. They'll tell you.
ambrit , June 21, 2016 at 7:34 amHere are some nice nuggets from the CEA study on the stay-at-home dad myth:
"Participation rates have fallen for both parents and nonparents alike, but prime-age males without children saw a larger decline of 9.4 percentage points since 1968 compared to 4.9 percentage points among prime-age males with children. This suggests that men dropping out of the labor force to be stay-at-home fathers is likely not an important factor in the overall decline; moreover, only around a quarter of prime-age men who are not in the labor force are parents (down from around 40 percent in 1968)."
and
"Based on [American Time Use Survey] data, there is little evidence that men are staying home to care for children or to do house work. "
Of course, I am preaching to the choir here!
av av , June 21, 2016 at 10:20 am"Blame the victim."
Pat , June 21, 2016 at 11:50 amBlame technology. Low skilled workers are easiest to replace. Example, you used to have people sweeping and washing floors in shopping centers or subway stations.
Now you have one person on a sweeper or washer.jsn , June 21, 2016 at 3:06 pmAnd how well is that working out? I'm serious. Perhaps they need a couple of more people ALONG with the washers and sweepers. Sorry to use Disney, but part of the reason the parks are pristine is because they have a whole lot of people going along picking up the trash and sweeping up.
It is not just technology, it is a management that doesn't understand how much labor they really need and ignore the signs they do not have enough, because then their numbers might be down. And this is even when their numbers are already down.
collins , June 21, 2016 at 4:26 pmIt's really about how the priorities are set and by whom.
In a sane society, the issuer of the currency would pay people to do things people like to do or benefit from doing themselves and pay for equipment/robots to do things people don't like.
We live a long way from there.
SpringTexan , June 21, 2016 at 4:27 pmFriends of mine visited Germany last year, noticed that for curb, pothole repair where in the US you see 2-3 guys and a bunch of equipment, there he would see 8 guys with shovels and little to no equipment.
Steve Gunderson , June 21, 2016 at 5:08 pmYes, when I was working at UT-Austin, they cut the janitorial staff so that offices were only vacuumed once a month.
There is work to do. But not willingness to have people do it.
Michael , June 21, 2016 at 8:19 pmMaybe teaching people to pickup after themselves should be a Freshman level course?
inhibi , June 22, 2016 at 4:26 pmCarpets need to be vacuumed.
FedUpPleb , June 21, 2016 at 8:10 amIt is not as simple as "technology". I often find that those who say lines like "robots are going to take away all the jobs!" are those without actual degrees in those subjects. Technology simply moves the plane of thought, processing, manufacturing, etc to the next level. The invention of the computer spawned an entire multi-TRILLION dollar industry with millions of jobs. Robotics will be/is the same.
The reality of what is happening is on the economic/political level. It involves a small number of people, living in a rich, opulent high tower, who for years acted and enacted without the slightest bit of empathy or selflessness. These same people have literally no depth to their thought and are ruled by the very gluttony/ego so valued in todays consumerist society. This type used to live in Rome during Diocletian's rule, in Egypt during the Hyskos invasion, in the Mayan Empire during the Postclassic period, etc ad infinitum. The overall picture has repeated itself, as an empire is a microcosm of any living organism; it gets old and becomes very susceptible to change, that is, the ruling class become so removed from reality that their decision making begins to deviate further and further from the actuality of the current situation. The Housing Crisis is a prime example. The banks saw fit to literally scam their own customers with no government intervention! Twice! This type of thinking quickly affects the entire nation. People begin to see a futility in living morally and truthfully, and start to wonder if the entire system is a scam.
Now imagine the modern US economy as a sinking ship. The top level execs, elites, are busy pillaging as much as they can, because they all see that US supremacy isn't going to last. Manufacturing all moved to China, now Mexico, retail is dead in the water, the US consumer is getting weaker and weaker. Only healthcare is staying afloat, due more to political reasons than anything else.
The easiest and most common method to increase your salary as a corporate exec is to get rid of overhead: sell off portions of the business, layoffs, etc. They are all doing it regularly with no impunity. US manufacturing is all but GONE. Its all been sold to PE firms that install a puppet as the CEO, who then begins the extraction process of selling off parts of the business, instating capital controls, and layoffs. Now it moved to retail. Eventually, America will be a literal husk. Every place will just have the same options of a few fast food and retail chains. The entire Midwest is already there, hence "Rust Belt". The only places that will be spared in America will be the bubble of wealth concentrated on the coasts, but even these will begin to whither as wealth starts to move to other, happier countries.
So in this milieu, put yourself in the place of a average HS educated American. You have two options for your career: work your ass off and make next to nothing, or go to college and graduate a debt-slave, also making next to nothing. However, a third option presents itself, complements of the Welfare State: collect unemployment and have all the free time in the world. Then imagine what you see and hear everyday. Banks illegally foreclosing on homes, executives getting away with fraud in the hundreds of millions, a militarized police, potent pharmaceuticals given away like candy, a plant that causes mild decrease in heart pressure illegalized, politicians lying again and again, the wealthy talking on TV about how "easy" it is to open a business and selling books about it, etc. It all concentrates down to the worst of all emotions: depression, self-loathing, and envy.
The depression comes from the hopelessness of most American's situation: poorly educated with no future career, not even a path to take which will ensure a brighter future. The self-loathing comes from the media, as most people get an HOURLY reminder of how shitty they look, how poor they are. Even shows like Shameless don't touch on the reality of being poor in America. It isn't a day to day struggle to pay bills. Its a day to day struggle to even feel worth something. To feel part of society.
Then there's envy. You feel envious of the wealth, the attractiveness of others you see in the media, which you misplace as being the vast majority of people in America because you see them everyday and everywhere: online, on billboards, in movies, commercials, etc. You begin to feel like SOMETHING should be given to you. The Government, fearing rebellion, realized this during the last Great Depression when they began to expand the Welfare State. Welfare is a form of suppression. It keeps people on the lowest rung just happy enough to forget about rebelling. Big Pharma is a BIG factor in this as well. I've visited enough towns in the Mid West where everyone is on some pharmaceutical, usually Percocet or valium, yet have no money for a proper house with heating and cooling.
So in summary, the extraction of wealth by the upper class, (through "global" trade agreements, stock market manipulation, tax evasion, offshoring, etc) along with lax regulation & prosecution by the political body (they are very much one and the same these days) caused immense physical (monetary) and mental depression/suppression of the masses, which are steadily moving toward Welfare as it becomes the only of options with a glimmer of stability & free time.
Arizona Slim , June 21, 2016 at 8:55 amSo entire industries now eschew people older than 30 in favor of being staffed entirely by 20 something's. This will surely end well.
NoGig , June 21, 2016 at 11:06 amI would like to see where all of these highly skilled and motivated 20-somethings are coming from. Because I am not seeing them around here.
John , June 21, 2016 at 11:00 pmThey are bring these workers from India where starting IT salaries are $10,000/year. Check early in the morning and late at night and you will see the buses delivering the workers who lived crammed in surrounding apartments. One told me his Indian outsourcers had eight of them living in a two-bedroom apartment with one bathroom - while working 80-100 hours per week. They are threatened with deportation if they complain, and in some cases, their families back home are physically threatened.
With the defeat of H-1B expansion, Obama has now vastly increased foreign guest workers through executive actions that include:
- granting automatic work authorization to all H-1B spouses.
- expanding Bush's "Optional Practical Training" now allowing stem graduates to work for three years in the US on a student visa. The OPT has no caps, little labor protections, and no salary requirement.
- lowered qualifying requirements for L-1B visas. L-1b visas allow corporations to import their foreign employee to work in the US at the home nation salaries. And has lead to widespread abuse such as foreign employees being paid $1.73/hour.
- modified the B-1 visa, used attended training and meetings, to incorporate the "B-1 in lieu of H-1B" which now allows some foreign workers to work in the US on the B-1 visa
There are now well over a million foreign guest workers in the US and the numbers are growing. Curiously (ha ha!), DHS does not even keep count of the above admissions.
America, this is not YOUR government.
perpetualWAR , June 21, 2016 at 11:25 amWow, didn't know they expanded the student work permission to three years. Used to be one year. Essentially if you go to college here you have bought yourself a ticket
to live in America and take a job from an American.weinerdog43 , June 21, 2016 at 11:51 amI was replaced by a 20-something. Actually, at my last job (3 years ago) both the older employees, myself and another employee, were replaced. One employee who had worked there for 15 years and was 60, so TWO years away from retirement, was let go. (I hope he sued the pants off that horrible firm!)
inhibi , June 22, 2016 at 4:36 pmOh, they're all out beating down the door over in Philadelphia to work as substitute teachers for $75 per day. Just google 'substitute teacher shortage' and you'll see plenty of job opportunities.
snark
flora , June 21, 2016 at 8:14 amIts called "turnover" and companies use it nowadays to suppress wages. Why pay a 30 yr old 85K when you can pay a 20 yr old 50k?
Most of the work is simple anyways, unless you work in the STEM field. And unfortunately, in the STEM field, the largest industry (software) takes this approach to the next level.
mark , June 21, 2016 at 9:08 amGreat post. Thanks.
fresno dan , June 21, 2016 at 8:17 amYes it is.
"supporting collective bargaining"
Guffaw.
Linda , June 21, 2016 at 8:41 amIncentives matter – if the end all and be all is GDP, you get GDP. TPP is an "industrial" policy, or more accurately a re-distribution policy – yeah – re-distribution – the fact that it is re-distribution from the poorer to the richer is a novel use of the concept, but we should never under estimate the cleverness of Davos man.
The fact that it is espoused by those who incessantly yammer about how government policy should be "neutral" exposes that these people are just making the rules for their own benefit. The fact that so many laws ("reforms") must be instituted to advance this agenda just exposes the intellectual dishonesty. Or would they have us believe that the advent of neoliberalism and the increase in inequality is just a happy (sarc) coincidence? The idea that this is some unstoppable force of nature just wants to make me puke.
If you think that work matters, that participation in society is important, and that a nation is more than airbnb beds for Davos man conference attendees, you can have policies that punish outsourcing, decide that limiting H4B workers increases demand for workers here with commensurate increases in wages. There are a zillion ways the tax code as well as other laws are inimical to US workers. It STARTS with the idea that paying labor more does NOT harm society….
These policies are not a function of physics or of God's will – they are made by men at the behest of the few to reward the few. It can be changed if we choose to change it – although I fear we are rapidly reaching a point, and may have already reached it, where we are a defacto plutocracy and any "reform" is mere window dressing.
templar555510 , June 21, 2016 at 9:20 amI agree with you wholeheartedly. We are on a straight path to plutocracy and I too fear we have already passed the point of no return. I hear (read) daily the awful word, redistribution; always in the context of taking a small amount away from the rich and powerful to give to those not as fortunate; but never in the context of what is actually happening on a grand scale; the taking from the lower classes and giving it to the upper 1% and above. When will it stop? I don't know; I do know that unless we continue to try and make the masses actually understand what is happening to them and to get them off their apathetic arses and involved in the political process, thereby voting out of office the scrads of politicians devoted to and enamored of neoliberalism, we will continue down this prophetic road of self destruction. It is our choice. It will be hard. It may, in fact, already be too late. But, we have to try. We have to keep working; working to explain the awful policies of neoliberalism.
tegnost , June 21, 2016 at 9:52 amAgreed. So what MUST the demand be ? Let the capitalist go after FULL AUTOMATION and balance that with UNIVERSAL BASIC INCOME . Everything to do with money can be defined as a balance sheet so this should be the balance sheet for the 21st Century . The demand should come from all . And it's coming. I know the Swiss just rejected it , but the fact that they just called a referendum to decide it ( for now ) tells us it's there in the ether and the Swiss are not alone ; the Dutch, the Finns are all working on this . It's the genuine great leap forward.
TheCatSaid , June 21, 2016 at 11:59 amsorry but basic income guarantee is simply creating demand for the plutocrats, and is exactly why food stamps are in the agriculture budget. This is why the 13,000/yr BIG floated a week or two ago already, at it's inception, takes 3,000 and puts it towards medical care-oops, i mean insurance- you won't get care unless you pay extra, don't kid yourself. And this gravy train will have as many cars attached to it as it can carry, how much will your BIG be in the form of food stamps? rent subsidy? by the time it's implemented the person at the root of the issue won't get a thin dime, but the cronies will have a basic income guarantee, the true purpose of this terrible idea, I and others like me want things to do, not a snap card (more likely digital wallet brought generously to you by apple and jp morgan, which of course will charge a fee, and conveniently keep track of where you are at all times) that allows me to buy gmo food (yes, there will be foods that are for the poor and foods for the rich, want organic? what's your net worth?) The silicon valley parlors where these moronic ideas are hatched are filled with people who are trying to cement their presence in the upper class which is funny on the meritocrat side because many of my tech friends didn't go to college, they were good at video games and now it's robots robots robots because that's their gravy train and the BIG is their lame ass apology, while getting some demand into the economy to pay for their craptastic junk toys.
lightningclap , June 21, 2016 at 1:21 pmGreat observations about BIG. I never thought of it that way, and you make it very obvious. Thank you.
jrs , June 21, 2016 at 4:03 pm++ I have long been in favor of BIG but you point to the obvious strings that would be attached if formulated by our Valley "disruptors".
samhill , June 21, 2016 at 8:10 pmthen instead provide the basics of life to people, like healthcare and shelter, rather than money? That completely solves that problem doesn't it?
Norb , June 22, 2016 at 2:35 amExcellent, my vote post of the week. The best answer is to pay people to actually work, the work would be to pay them to undo the damage of the last 300 years of industrial revolution. We had created a large middle middle class and secure working class destroying the planet, we can create the same wealth cleaning it up. Instill hope on a dying planet, and for the first time in its history give humanity a reason to get up in the morning other than just exploiting each other in a rat race.
lin1 , June 22, 2016 at 1:47 pmOne way of looking at how a BIG can be manipulated by owners is considering slavery. It seems we are entering a new phase in the never ending capitalist struggle to secure cheep labor. Cheep labor and resources are the driving force of the current system. The logical end result is to have a self-sustaining labor force. One that makes just enough to survive and work- with little room for anything else. That is where we are headed.
Advancing technology and the desire to shed costs related to slave upkeep can be argued as important factors in slavery's demise in it's original social form as one individual owning another as property. Why bother taking on the responsibility for slave upkeep when you can rig the system in ways that require workers to enslave themselves to businesses and the system as a whole. You need the labor power, not the person.
A BIG will be sold for all the typical humanitarian half-truths, but in reality is a natural development to maintain the capitalist system. The powers that be have demonstrated no interest in maintaining a middle class workforce. Debt bondage and BIG coercion are on the horizon.
As Goethe observed: None are more hopelessly enslaved than those who falsely believe they are free.
Fred Rucker , June 21, 2016 at 10:52 amYour using an abstract moral excuse to argue against fulfilling a real actual need.Until the revolution comes, BIG is a solution I will support.
Bill Smith , June 21, 2016 at 8:34 amHow wonderfully well stated, thank you
a different chris , June 21, 2016 at 9:02 amWhy does there have to be a political purpose for the release of the report? I would guess that the end of a presidency works a little like late Friday afternoon when stuff get dumped to the public at their point of lowest interest.
Raising the minimum wage works at cross purposes. It helps in the short run but in the longer run – other things held constant – it makes automation more likely.
When the small company I worked for years ago was faced with replacing a piece of equipment, at some point after the minimum wage had been raised, the company replaced it with one that was more automated and took few people to operate. The cost of labor had moved up and cost of capital was lower due the interest rates. The numbers were close enough that it could have gone either way but the feeling was that the cost of labor would continue to go up. Going with the more automated equipment locked in more of our costs.
Cry Shop , June 21, 2016 at 9:32 amIt's weird how people can pretend to conflate technology assisting labor with replacing labor with cheaper labor, in order to derail the subject.
As far as your "point", they invented the nail and hammer and now we don't have to drill holes and put pegs in. Fine. Nobody is talking about going technologically backwards, in fact just the opposite. We are talking about the race to the bottom in labor itself. I suspect a bit of looking around can find a lot of places where 1 American + 1 machine is slightly more expensive than 4 third-worlders + shipping + no machine. Sometimes the machines have progressed so fast that work has moved back onshore (and funny that all the moaning about "helping people that live on 2cents/day" isn't heard when that happens), which is cool but it still is the exception.
But: how limited is the number of "capitalists" that are going to bother to invest in bringing down the cost of that machine when you can drive the cost of humans down in almost unlimited fashion? - there are actually limits, and we will eventually hit them but it will get a lot uglier if we do it that way.
Jay M , June 21, 2016 at 3:48 pmAnd the whole issue is treating fellow human beings as less deserving, less worthy of employment just because of their nationality.
There will always be that other half of the working class that can be used to kill the other half when pushed hard enough, any definition will do for separating the class in to us vs them, so that the war can start. Unions blew it when in the 1970s when their leadership sold out, refused to go international with trade agreements, and focused on protecting an indefensible position, indefensible from both an economics view and from an ethics view.
Bill Smith , June 21, 2016 at 11:41 amDuring the cold war the American Labor union movement was thoroughly anti-communist and in bed with the CIA as far coordinating with international labor. See wiki on Jay Lovestone for a bit of the flavor of the times.
Steve Gunderson , June 21, 2016 at 5:12 pmMy point was that we ended up with one less minimum wage job because the cost of labor made it better for the company to buy the more automated piece of equipment.
That example had nothing to do with off-shoring – though I now work in a company of about two dozen people who has off-shored some work. I am going to guess about the equivalent of two full time jobs.
I was quite surprised when that decision was made given our small size but it has worked as explained to us when it started.
cnchal , June 21, 2016 at 11:40 pmHow many things does the new machine buy?
Felix_47 , June 21, 2016 at 9:26 amLooked at that way, the machine buys it's consumables and raw material used in the process. It would have done that anyway, were Bill's company to decide to buy a simpler machine and employ one more person, but because of the automation, and as long as sales justify it, the more advanced machine will process more raw material and use more consumables because it has the potential to run 24 hours per day, whereas an employee would be seeing stars after an eight hour shift, due to repetitious boring work.
tegnost , June 21, 2016 at 9:58 amGood point. Also consider litigation costs which to most employers in Ca at least is a huge financial and management burder. A couple of worker's comp sore backs or knees combined with chiropractor, "pain management doctors," surgeons, secondary psychic stress etc. makes a lot of employers including me realize that every employee is a ticking liability time bomb just waiting to call that 1-800-hurt at work number. No business can hire Americans in this legal environment unless they are very well paid well beyond their value so they have no option but to do the job. In fact, in my business litigation/medical/disability costs are far more significant than hourly wages. We just can't take the risk and we outsource everything and hire as few as possible and I am not alone.. We do everything possible to avoid hiring low level workers and when we do we want young recent immigrants who are not "Americanized" and lawyer prone. Even then we get burned more often than not with claims for age related conditions. Then it is simply 1-800-Lastimado en Trabajo and you can see the ads all over the busses in TJ before they come over….ads for Ca worker's comp attorneys!!!! Lawyers, since they control the democratic party are a huge part of our unemployment problem. No employer can take the worker's comp risk of an older employee. If they feel back ache or knee ache or neck ache on the job…it is "aggravated" and the employer is often out hundreds of thousands….thanks to the lawyers who write the laws. Don't count on this lawyer in chief or the next one to do anything about it. Age discrimination and automation and outsourcing are survival tactics for most of the businesses I work with, including my own.
JohnnySacks , June 21, 2016 at 10:41 ammedicare for all
Steve Gunderson , June 21, 2016 at 5:13 pmYes indeed, there's a reason big business doesn't want medicare for all – it would result in the ultimate 'flexible workforce'. Workers immediately bailing out of every shit show employment situation they manage to fall into at the drop of the hat with no COBRA or insurance dead zones. But on the other side of the coin, it would ramp up the Uber jitney economy of on-demand disposable workers lined up holding signs displaying their skill sets for a day's pay at the highway on-ramps at 6:30 AM (or, as the neo-liberal mindset would frame it – the entrepreneurs).
armchair , June 21, 2016 at 10:17 amThats pretty much how the movie/tv industry operates in Hollywood.
JTMcPhee , June 21, 2016 at 12:41 pmDamn it, we could unleash potent forces if we just got rid of the lawyers. When a person's knee gets torn up on the job, give em' a couple grand, an aspirin and tell them to get over it. That's all you need to do.
Think about this. If the states weren't so desperate for money, they wouldn't have to run the system on the cheap. If health costs were lowered, then the system wouldn't be so expensive. A worker's comp agency has to balance its objectives between not bankrupting the state and not screwing over hurt people. A hurt worker without an advocate is a sitting duck. One way to make lawyers go away is to abolish worker's rights. Alternatively the worker's comp system would be cheaper if health costs were cheaper, and realistic settlements without the assistance of a lawyer might be possible if states had more revenue to pay bills.
animalogic , June 21, 2016 at 8:57 pmHistory of Work Comp as I remember it - speaking of how "the company" counts its beans: Johns Manville had a problem with people getting slowly sicker on the job (handling asbestos) starting late in the 1800s paid doctors to do studies that proved the asbestos-asbestosis-mesothelioma connection, and gave some rates of worsening of the diseases and hence points at which workers could no longer work. The researchers and doctors were paid for and threatened into silence on the findings, and required to ignore their Hippocratic obligations. Workers had to go to company doctors, who would nurse them along until they were fired for inability.
At first, the court system's tort law provided the persistent with some compensation and support commensurate with the harm. Many cases settled, but all contained non-disclosure mousetraps (tell anyone and you lose everything.) And of course the "experts" who testified for both sides were sworn to secrecy too, for money or from fear. But Manville and other corporate creatures got inspired, starting around the 1890s I think, to pitch and successfully write (lobby) into law that "workers comp" system that persists - places an administratively determined value on the "injury," percent of disability, and the rest, bars tort litigation for WC-"covered" injuries. Even with all that, a lawyer is often needed because the fokking corporate swine do everything in their considerable power and corrupting reach to avoid even paying out the pittance WC provides, especially long-term treatments and care for the many horrific injuries. Once again, the hope is that the injured worker will GO DIE. And yes, there are cheaters, but gee, how surprising that the profits from fokking over the workers so far outweigh the little bits that a few people scam from the other side. Many of the patients I tried to help when I worked as a nurse were WC, and the treatment they got from the insurers, and the "employee advocates" and "nurse case managers" and defense lawyers acting on screw-the-worker policies of long standing, was amazingly cruel.
"Bankrupting the state?" WC is paid, far as I know, at least in FL, out of an insurance pool that is funded by employers. Subject to the same kinds of actuarial calculations that any other large-pool insurance game undertakes in underwriting. And yes, universal health care (not Obamacare) would, if it could be managed without the full usual apparently inescapable corruption by neoliberal interests and thinking, reduce EVERYONE's costs. And states are "desperate for money" largely because the Chamber of Commerce and other neoliberal fokkers like the Kochs have strangled the public general-welfare income stream and diverted most of what is left to various kinds of "white man's welfare" and corporate gifts.
Here in FL, "worker's rights" are already largely abolished, and the mopping up continues. Just so's you know. There are still lawyers who will (for a cut of the limited amounts that WC will pay out if they finally prevail, to the worker's and family's detriment, "take cases." What I learned in law school, first week in Contracts and Torts and Constitutional Law, is that "There are no rights without effective remedies." What remedies do workers have?
And for those who want to shoot at the VA, on "inefficiency" grounds and the other neoliberal overt and covert assaults, VA disability is a Workers Comp program too. Max payout for a GI who is 100% permanently and totally disabled is around $30,000 a year. There is no component as with other kinds of insurance structures for enhanced damages for "bad faith" on the part of the government and the privatized functions that make up the disability administration. "Thank you for your service, Sucker!!" And that "award" usually only comes after a decade or more of fighting with a well documented opposition from the people who administer the "system" and requires persistence, luck, and occasionally benefits (not so much any more) from intervention by the injured GI's elected representative…
reslez , June 21, 2016 at 1:03 pmAll this talk of workplace injury, lawyers and workers comp misses the obvious point that some of these workplaces must be UNSAFE. (It's always the other workplace that's unsafe–"our" worker comp payouts are always rorts).
The answer to all worker comp issues is the same: universal mandatory insurance run by the state and work that minimises physical/psychological injury.
Naturally it won't occur as its a cost to business….allan , June 21, 2016 at 8:36 amHeaven forbid employers pay for the body parts they use up and destroy in their workers.
I agree with Anon, universal health care would resolve a lot of these issues. When the cost is spread out employers whine less when their workers are hurt.
Larry , June 21, 2016 at 9:56 amYet despite having among the most flexible labor markets in the OECD-with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage-the United States has one of the lowest prime-age male labor force participation rates of OECD member countries.
Francois Hollande to the white courtesy phone.
tony , June 21, 2016 at 3:36 pmThis song was made in 1983…and the same crap that Run-DMC mention in the lyrics still exists today:
Unemployment at a record highs
People coming, people going, people born to die
Don't ask me, because I don't know why
But it's like that, and that's the way it is
People in the world tryin to make ends meet
You try to ride car, train, bus, or feet
I said you got to work hard, you want to compete
It's like that, and that's the way it is
Huh!
Money is the key to end all your woes
Your ups, your downs, your highs and your lows
Won't you tell me the last time that love bought you clothes?
It's like that, and that's the way it is
Bills rise higher every day
We receive much lower pay
I'd rather stay young, go out and play
It's like that, and that's the way it is
Huh!
Wars going on across the sea
Street soldiers killing the elderly
Whatever happened to unity?
It's like that, and that's the way it isEnquiring Mind , June 21, 2016 at 9:56 amhttps://www.youtube.com/watch?v=yUoiFH6Aw7o
I like old Ice-T.
The thing about being a man near the bottom in a country with low social mobility means it is extremely hard to get girls. Jordan B Peterson said in The Age of Unequals discussion that the primary motivation for men to become criminals is because it is the only way to have a chance at attractive women. That has been my personal experience with crime too.
wobblie , June 21, 2016 at 10:08 amAgeism takes many forms, some more subtle than others. When your friendly local HR department makes a few tweaks to benefits, the newer employees don't notice, but the wizened veterans take notice. They see the handwriting earlier, and brace themselves for the next steps.
The HR folks are acting rationally in their supply-side worldview as they look out for shareholders first and consider employees well down the list, if not at the bottom. That treatment of personnel represents a policy of a very high effective discount rate on human capital in the aggregate. When parsed out, there are a few nuances that make the picture clearer. When the top handful get outsized payouts, they are incentivized to reinforce that high human capital discount rate, to the detriment of those down range.
The graphics showed an acceleration in the ominous trends in the early and mid 1990s. That coincided with the great outsourcing, re-engineeing, re-euphemising of jobs and the economy. In that era, Fortune magazine published a series of articles about the changing nature of the social contract at work.
One takeaway reflected the new bargain: companies needed to provide interesting work to retain employees, and the latter had to continue to make themselves employable. Those veteran employees referenced above discerned that there wasn't a bargain but a mandate to become more efficient, all presented with the window dressing of so-called interesting work.
A more honest presentation would have said work that meets the interest or discount rate, as part of the increasing financialization of the world. The decline in trust also accelerated during that period, whether in companies or the media. We continue to reap the results of that widespread mistrust and discontent during the current election cycle.
Winston , June 21, 2016 at 10:16 amA result of blind Liberal/Conservative policies.
https://therulingclassobserver.wordpress.com/2016/06/15/ruling-class-axioms/
Denis Drew , June 21, 2016 at 10:59 ama different Chris , please listen (see below) and read what Clayton Christensen has been saying. Big companies are mostly brands now. Have offshored main parts of company. Last stage in that development is decline of company, as in case of steel. IBM is presently also classic case as on road to failure as well for same reason. It started at IBM with Gerstner.
Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy
Christensen at Gartner Symposium:
http://gartner.mediasite.com/mediasite/play/9cfe6bba5c7941e09bee95eb63f769421d?t=1320659595Gartner Symposium ITExpo
Oh and state/local gopvts favor large companies over small companies!
http://www.forbes.com/sites/stevedenning/2014/05/30/why-ibm-is-in-decline/#5aaa6e284c53
Why IBM Is In Decline
http://finance.yahoo.com/news/no-end-in-sight-for-ibm-decline-as-shares-near-six-year-low-141729837.html
No end in sight for IBM decline as shares near six-year lowhttp://www.goodjobsfirst.org/shortchanging
Shortchanging Small Business: How Big Businesses Dominate State Economic Development IncentivesCharger01 , June 22, 2016 at 2:48 pmIn a labor market that contains for the sake of argument 50% rich country workers (e.g., American raised) and 50% poor country workers (anywhere else raised) - must be something like Chicago which is 40% white, 40% black, 20% Hispanic …
… where pay is set by what I call "subsistence-plus"; meaning set STARTING at the absolute minimum pay workers will tolerate (e.g., $800/wk for American born taxi drivers, me; $400 for foreign born) and then PLUS some more for each additional level of skill (bottom for McDonald's, more for better English in Starbucks, more for college English and more competent organizing in Whole foods?) …
instead of pay set by the highest price the consumer is willing to pay - by collective bargaining or a minimum wage …… a huge dropout of low skilled, rich country workers will occur as low skilled work pays much below what rich country workers look at as "minimum subsistence" (the labor market will not clear). E.g., American born taxi drivers (me again) and the Crips and the Bloods. How else explain that 100,000 out of my guesstimate 200,000 Chicago, gang-age males are in street gangs?
To make the psychological point about "minimum subsistence", today's rich county labor would gladly work for half of today's poor country minimum - if it were 100 years ago and that's the best a much less productive economy could pay. It's psychological, but a lot of psychological if DNA immutable.
Now here's the wind-up - that should implant permanently the unquestionable need for collective bargaining in all labor transactions: A what I call subsistence-plus labor market with 100% rich country workers will have lower pay levels than a collective bargaining labor market with 50% rich/50% poor country workers.
That's the whole law and the profits about the need to make union busting a felony (starting in progressive states) as far as I'm concerned.
PS. This is not an endorsement of Donald Trump's anti-immigration bender - that would kick down the pillars that our whole civilization is built on (sorry Native Americans) - that could mean 250 million Americans by 2050 instead of the anticipated 500 million. This IS an endorsement or rebuilding high labor union density - the missing balance-of-power pillars of our civilization. (Don't forget centralized bargaining - the "compleat" balance-of-power pillar of a unionized labor market.
nothing but the truth , June 21, 2016 at 11:33 amDavid Simon covered this in "The Wire" and "Show me a Hero", you have entire sections of the population that are forced to leave or participate in crime as a viable form of employment. We have a surplus population now- and going forward that are not supporter by their labor or any other resource other than transfer payments.
Please pause a moment and consider that concept. We have a paucity of credible jobs that people can cobble together a living, let alone increase their opportunities going forward.Sandwichman , June 21, 2016 at 11:44 amwhen everyone is trying to game the system no one has the right to cry morality.
i have some small businesses that i am selling off. Too many overhead, insurance and legal costs. The line of business is becoming a slave to govt mandated costs and regulations. Customers more interested in injury lawsuits. IQ and attitude of younger employees noticeably poor.
not looking good.
Jefe , June 21, 2016 at 12:01 pm"THE LONG-TERM DECLINE IN PRIME-AGE MALE LABOR FORCE PARTICIPATION" report states:
"Conventional economic theory posits that more 'flexible' labor markets-where it is easier to hire and fire workers-facilitate matches between employers and individuals who want to work. Yet despite having among the most flexible labor markets in the OECD-with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage-the United States has one of the lowest prime-age male labor force participation rates of OECD member countries."
I have been following this so-called "conventional economic theory" closely for nearly 20 years now and can attest that it is not a theory but a hollow assertion. Empirical "evidence" for this assertion is based on "strong priors": models containing assumptions that generate outcomes consistent with the assertions. GIGO!
At the core of the flexible labour markets dogma is obeisance to the great god NAIRU, which Jamie Galbraith exposed in all its Emperor's New Clothes nakedness 20 long years ago: "Time to Ditch the NAIRU"
https://www.aeaweb.org/articles?id=10.1257/jep.11.1.93
"The concept of a natural rate of unemployment, or non-accelerating inflation rate of unemployment (NAIRU), remains controversial after twenty-five years. This essay presents a brief for no-confidence, in four parts. First, the theoretical case for the natural rate is not compelling. Second, the evidence for a vertical Phillips curve and the associated accelerationist hypothesis that lowering unemployment past the NAIRU leads to unacceptable acceleration of inflation is weak. Third, economists have failed to reach professional consensus on estimating the NAIRU. Fourth, adherence to the concept as a guide to policy has major social costs but negligible benefits."
In "Unemployment: Macroeconomic Performance and the Labour Market" Richard Layard, Stephen Nickell and Richard Jackman grafted the dubious NAIRU concept onto the anachronistic lump-of-labor fallacy claim to create the hybrid chimera "LUMP-OF-OUTPUT FALLACY" in which central banks enforcing NAIRU anti-inflation policy would ensure that you couldn't redistribute working time. You can't make this stuff up. But Layard, Nickell and Jackman did. Nonsense on stilts.
"To many people, shorter working hours and early retirement appear to be common-sense solutions for unemployment. But they are not, because they are not based on any coherent theory of what determines unemployment. The only theory behind them is the lump-of-output theory: output is a given. In this section we have shown that output is unlikely to remain constant."
This is simply not true. Shorter working hours is based on the same theory as the theory of full employment fiscal policy. Keynes's theory. But don't take my word for it. In an April 1945 letter to T.S. Eliot, Keynes wrote:
"The full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result just as well by consuming more or working less. Personally I regard the investment policy as first aid. In U.S. it almost certainly will not do the trick. Less work is the ultimate solution."
Galbraith's "Time to Ditch NAIRU" has 293 citations on Google Scholar. Layard et al's "Unemployment" has 5824. Economists flock to dogma like flies to shit.
dc , June 21, 2016 at 12:30 pmOld and in the way….
Ishmael , June 21, 2016 at 2:00 pmThe Oxycontin Report
Ishmael , June 21, 2016 at 2:10 pmSome strong starting points without requiring additional govt interference:
Shut down both legal and illegal immigration. When you can not employ the ones who are here why let more in.
Inforce the borders and deport people who are here illegally.
Get rid of anchor babies
Put tariffs on imports and I mean substantial tariffs. Worrying about Smoot Hawley is a canard. At that time the US was the biggest exporter now we are the biggest importer. I would also have a sliding scale depending upon labor rights. Some would scream we need to worry about the poor in these countries. How about worrying about the poor in this country. It has reached the point that you need to look around at your family and friends and say what would you do so that these people prosper. If you are not willing to say practically anything legally then you will probably not prosper.
Cut back govt at all levels. This is a major misallocation of resources. This is especially true of the military industrial security area. Come up with new health care laws. Focus resources to generate more doctors in the US and less people with unproductive degrees.
Close down overseas bases. Stop wars.
tony , June 21, 2016 at 3:23 pmOne other thing, if you look at a lot of the jobs that men use to take and make a good living it was construction, plumbing, gardening, janitorial, cooks and etc. All of these jobs have been filled by illegal aliens who live 25 to a house, pay no taxes, get free health care and suppress wages.
I know, I am a racist!
hunkerdown , June 21, 2016 at 4:10 pmAssuming there are enough natural resources, it is quite possible to arrange an economy in a way that benefits the population of the recipient country. Think about it. The immigrants are healthy, hardworking adults. So you get their labour without investing in twenty years of raising them and then taking on the burden of those who are unhealthy or anti-social.
The US is an immigrant country with a weak safety net so an intelligent policy could easily benefit both parties.
Ishmael , June 21, 2016 at 4:52 pmWith respect, if your givens were in the least interesting or useful to the greater good, rather than articles of faith (which is just a polite term for self-delusion that benefits the power structure) designed to benefit your imaginary friends, satisfy your need to dominate and abuse others, and give your poor lonely misery some company, you might have something worth a detailed, thoughtful response. As it is, I think you need to explain yourself a bit better.
hunkerdown , June 21, 2016 at 5:52 pmSeems very clear to me. You must have a low IQ if you need someone to explain it to you.
Illegal aliens generally do not pay taxes because they get paid with cash! Sorry, if they have to pay such taxes like sales tax that everyone else needs to pay.
ProNewerDeal , June 21, 2016 at 4:25 pm"Stupid" is typical American conformist speak for "would offend my bosses".
You had two points that sounded reasonable: "Shut down both legal and illegal immigration. When you can not employ the ones who are here why let more in." Because markets. Those who own a government that was designed to be bought want to drive down the price and increase the availability ("flexibility") of all labor, of course. Plenty of Americans would be happy to work off the books for a less demeaning wage under less demeaning conditions and less demeaning people. (As if Social Security isn't going to be looted by the oligarchs by the time I'm of age to retire) They wouldn't risk death and torture to come here if EMPLOYERS weren't withdrawing the benefits of employment from those already here and offering those benefits to others. While stopping the influx would be a fine idea, until you get control over those who are paying them to come here - making EMPLOYERS into felons for any support of immigration violations would be a far, far more effective use of enforcement power than beating down brown people at arm's length to satisfy your cultural conceits - supply and demand works both ways.
And "Put tariffs on imports and I mean substantial tariffs" is in the right spirit, but fails to acknowledge, with the usual hostility to self-awareness and past actions that defines the USAmerican "mind", that other nations have just as much right to respond any way they feel like, and the "trade agreements" the USA has signed grant them contractual grounds (pacta sunt servandum, remember?) to respond disproportionately with their own tariffs, penalties against the USG, and other demerits in the international sphere which are not constrained by your triumphalism in any way. Those means would not be as effective as simply repudiating every multilateral "trade"-related agreement the USA has ever signed and not, quite literally, pawning the USA for a mess of bourgeois pottage.
It's ridiculous that you should be depending on the US government to evaluate human rights conditions, when human authorities are never bound by evidence unless they want to be. Malaysia's admission into the TPP, and the politically-driven mulligan they received on their human rights conditions, shows the utter folly of letting ambitious bourgeois careerists hide behind corporate veils of any sort.
If you only believe that people who pay taxes should have rights, you support the very definition of plutocracy, and that makes you a disease vector.
Ishmael , June 21, 2016 at 4:53 pm"illegal aliens…pay no taxes, get free health care"
You have it back-a*ward. Undocumented workers pay taxes (FICA, SS, etc deductions), that they will not receive when they reach old/SS age, even if they are in the US at that future time. There is no "free health care" for undocumented workers, not eligible for Medicaid or ACA. Emergency room service does not qualify as health care.
Even US citizens have to go through a bureaucratic nightmare to get & maintain Medicaid or ACA, which is CRAPPY INSURANCE, not ACTUAL HEALTH CARE. At the point of needing actual health care, USians are often denied the service or the insurance refuses to pay after the service is done & face another bureaucratic nightmare in fighting the payment refusal. Undocumented workers lack access to even this crapified level of "health coverage".
I do agree that increasing supply (H1-B for STEM pros, undocumented for HS-degreed workers) lowers wages. Also, restricting supply (AMA restricting physician graduates such that US physicians per capita lower than OECD levels) increases wages. Econ101 supply & demand, perhaps neoliberal economists need "retraining" & should enroll in Econ101 at the local community college.
If there was an actual desire to limit undocumented immigration, the solution is large fines on Illegal Employers. How about $100K per undocumented worker found. In addition, end the Drug War, which causes violence & refugees, especially in Mexico & Central America. Revoke or at least amend NAFTA to un-decimate the MEX agricultural industry.
marym , June 21, 2016 at 4:39 pmGenerally I have no problem with large fines for companies which employ illegal aliens.
DarkMatters , June 21, 2016 at 11:58 pmPeople who work "off the books" don't pay income taxes regardless of their immigration status. They do pay many other types of taxes, often regressive – sales tax, excise tax, property tax (or their landlord's property tax.
RD , June 21, 2016 at 4:33 pm1. "When you can not employ the ones who are here why let more in."
Cui bono? Because EMPLOYERS love it, from large corporations to my neighbors who hire low-paid gardeners. Maybe this class-ifies me, but that would have considered to be an extravagance when I was growing up. I wonder how many people who complain about illegal immigrants actually rely on their services?2. "Inforce the borders and deport people who are here illegally. Get rid of anchor babies"
Bit late for that. I do agree we really have made a mess that needs attention and an intelligent cleanup. Even so, do you think we could competently amend the Constitution at this point, which is what it would take? Practically, I do think that better border security coupled with (really) improved labor conditions, both here and in Mexico (Imagine! An international labor effort!) could improve things. But TTIP and TTP are pushing the other way.3. "Put tariffs on imports and I mean substantial tariffs."
I like the idea, but only sovereign nations can do this, and we're not. We're subject to international courts. In this case, specifically, expect corporate lawsuits against the USA, arguing that the US should compensate corporations for loss of profits caused by said tariffs. These will be arbitrated by Investor-State Dispute Resolution panels, courtesy of said TTIP and TTP, where the no-appeal panels are staffed by international trade lawyers, who otherwise work for international corporations. Yes, by all means, worry about the poor in this country, but don't leave out anyone else.4. "Cut back government at all levels."
Down with traffic lights! (This statement of yours hooked me into writing this entire reply). Strict libertarians strike me as being more than a little Pollyann-ish. The only historical example that comes close are now called the dark ages. In those idyllic times, a bunch of French Norman good-ol' boys could hie themselves over to Italy and wreak havoc, I mean make their fortune. Governments are necessary to contain dispute resolution, and so require power superior to all other factions, but, for the sake of equal justice, should be accountable in some way to all. I could go on, but "no government" advocacy in our times leaves a power vacuum just at a time when corporations and financiers are doing their best to take over. As the Federalists argued, we do need a strong government, to ensure that the will of the people can be vigorously asserted. Not to say that it's working out so great right now, but it would be nice if we could in some way place competent people at the helm to right the ship. Speaking of Pollyanna….run75441 , June 21, 2016 at 7:59 pmAll labor reform policies put forth by Republicans and their policy activation arm (Dems) have been to make life easier and richer for CEO's, not to help workers. So now economists are surprised by the results? What a useful profession they are.
Yves:
You already have him on your thread. The 40 hour work week was established under Roosevelt. If you wish to reverse or stave off the declining Participation Rate, then decrease the required number of hours work to 32. We have agreed before that Labor is the lowest cost when compared to Overhead or Materials. In the end, the difference in cost would be made up by higher productivity.
Sandwichman is a proponent of this and I agree with his analysis.
[Jun 18, 2016] Whats Really Happening to the Humanities Under Neoliberalism? by Dan Falcone
What's happening is the same what happed with them in the USSR. Only Party (in case of neoliberalism replace the Party with "financial oligarchy") sanctioned content can be taught and the stress is on neoclassical economics as this is one of the foundation of neoliberalism (along with liberalism, Ann Rand, and similar psudo theories).
Notable quotes:
"... Chipping away at the humanities in schools jeopardizes the issues of social justice in education. Arguably, it is safe to say that the humanities and any liberal arts program are undervalued specifically because they involve knowledges, practices and traditions that usually cannot adhere to immediate short-term use ..."
www.truth-out.org
The number of college students majoring in English, according to some contested reports, has plummeted. In general, the humanities are taking a back seat to more "pragmatic" majors in college. Students, apparently, are thinking more about jobs than about general learning. Given this trend, should schools be scaling back on the humanities?
... ... ...
Some might say that since top universities like MIT have decided to focus on management, business analytics, finance and mathematical economics (or trading), secondary schools should follow suit. It would be a mistake, however, for secondary schools to cave to this argument and scale back on the humanities.
... ... ...
The Chronicle of Higher Education has noted the reason for this prevailing wisdom about the myth regarding the humanities plummet: It's largely due to mainstream publications. For instance, in 2013, The New York Times featured an essay titled "The Decline and Fall of the English Major." In 2009, The American Scholar featured an essay, titled "The Decline of the English Department." Authors cited spirals in the humanities. Even The Chronicle's Mark Bauerlein wrote, "English has gone from a major unit in the university to a minor one."
The piece goes on to explain how, back in 2010, MSNBC anchor Tamron Hall said, "Students wanting to take up majors like art history and literature are now making the jump to more-specialized fields like business and economics, and it's getting worse." This comment was juxtaposed with a chart that indicated a spiral. Prominent New York Times journalist David Brooks also jumped on the bandwagon when he remarked, "The humanities [have] turned from an inward to an outward focus." The "sky is falling" myth then led to serious underfunding, becoming a self-fulfilling prophecy.
Bérubé argues that mainstream accounts of the decline of the humanities in undergraduate education are "factually, stubbornly, determinedly wrong." He says there was a plummet, but it was between 1970 and 1980.
In reality, English isn't dying; it's just that at one time, it was unprecedentedly popular. English majors rose from 17,000 to 64,000 over a span of 30 years, from 1940 to 1970, and then declined to 34,000 by the 1990s. This does not mark a death to the humanities.
Are fields like art history and literature really "elite, niche-market affairs that will render students unemployable," as Bérubé argues? Are students abandoning the humanities because they are "callow, market-driven careerists?" No, this is not true. Bérubé states that "undergraduate enrollment in the humanities have held steady since 1980 (in relation to all degree holders, and in relation to the larger age cohort), and undergraduate enrollments in the arts and humanities combined are almost precisely where they were in 1970."
... ... ...
Chipping away at the humanities in schools jeopardizes the issues of social justice in education. Arguably, it is safe to say that the humanities and any liberal arts program are undervalued specifically because they involve knowledges, practices and traditions that usually cannot adhere to immediate short-term use by preservation seeking administrations and teachers.
... .,. ...
Dan Falcone has a master's degree in modern US history from LaSalle University in Philadelphia and currently teaches secondary education. He has interviewed Noam Chomsky, Edward Herman, Richard Falk, William Blum, Medea Benjamin and Lawrence Davidson. He resides in Washington, DC.
[Jun 02, 2016] Trump University playbooks offer glimpse of ruthless business practices
Notable quotes:
"... In the USA, those at the bottom collaborate based on the 'promise' that the American Dream offers them a shot at the top, if they hold the party line. ..."
"... What they do not realize is that the "party" counts on the weight of their mass to hold that line for THEMSELVES ALONE. The people who back it all are thrown under the bus with great regularity. They never see it until the wheel roll over them and by that time they have sucked millions of others into the illusion that they are the "one" special one who will make it from the bottom and be welcomed as a peer into the 1%. ..."
"... It is not so surprising. Hope is a hard thing to kill and an easy thing to exploit. ..."
"... He is being sued for "deceptive business practices" which is to do with the content of his so-called University courses. You can be a snake oil salesman and pressure people into buying more expensive stuff, but you can't sell them lemons. There are consumer protection laws to prevent that, and that's what these lawsuits are doing. ..."
"... 'Just following orders', which is basically what you are trying to justify, in a business context, has been discredited as a modus operandi and is not a legal defence (hence the lawsuit, with which I wish them the very best of luck). ..."
"... Meanwhile, the more one learns about the judge and the more this judge is in conflict of interest (IMO). This judge is for open borders and illegal immigration, is a strong advocate for La Raza (yes, that anti-White and pro-illegal Mexican hate group), has links to the Clintons (Hillary) and appointed two prosecutors to the case who are extremely generous donators towards Hillary, including paying her significant $ for speeches. ..."
"... Though, I think, not everybody who attends boarding school becomes a sociopath. But sociopathy runs in families. And sociopathic parents tend to put kids into boarding school or reformatory for that matter. Just to get rid off them. ..."
"... In such a naked, dog-eat-dog society, there should also be no personal bankruptcy protection or ring-fencing for those who fail in business. All their assets siezed to pay off creditors. Not sure Trump would be so keen on that. ..."
"... Shamelessness is not a crime in the USA, but crime (fraud) is still a crime. ..."
"... Nothing will come out of this, that will effect the election. The practices documented in the papers released is a high pressure sales tactic which are used by many. The focus should be on what Trump stands for and bring the fight to him. Hillary Clinton is the wrong person in the wrong year to be able to take on Trump. She is flawed beyond repair, and is fighting not to lose, so careful with her words that they don't resonate. ..."
"... He's being sued, so it's a civil case. Documents can be made public if it's in the public interest to know about them. And when it looks very much like a con man is on his way to the Whitehouse, I'd call that a big yes for public interest. ..."
"... Killary attacks the MANY women who accuse her husband of rape, lies to the grand jury over White Water, to congress and the people about Benghazi, runs guns to ISIS, takes money from Saudi Arabia the worst women's rights violator, lies about being shot at landing in Bosnia, approves uranium mining deal to Russian concerns while SOS and receives millions to her foundation at the same time, starts an unregistered hedge find in Columbia of all places, takes millions from banks and you fault Trump for greed and making his own way without influence peddling while in public office. ..."
"... A snake oil salesman, a 'boiler room' operator, a phishing scammer, that's all Trump is. Honestly, is there any lie this sociopath could not tell? Is there any con game too crooked and despicable for even him? ..."
"... Sounds like a third world country with no social contract other than the "opportunity" to exploit one another. ..."
"... HRC was paid $385,000 for 3 speeches given to Goldman Sachs, nearly 10 times what the Trump 3 day course costs per person. Based on the speeches we hear from HRC, what could have been in these speeches that made them so valuable? Afterward there may have been the same buyer's remorse felt by Trump-course attendees. The comments that say that the U.S. is full of scams like this are on target, starting with the $1 lottery ticket. It is the dream that brought and brings people to the U.S., and if it turns out to be an expensive nightmare, the answer is "caveat emptor." ..."
www.theguardian.com
PostTrotskyite -> MartinMckay 1 Jun 2016 08:36More than 400 pages of released Trump University files describe how staff should target financial weaknesses to sell high-priced real estate courses
A federal judge has given the world an unprecedented glimpse into the ruthless business practices Donald Trump used to build his business empire.
US district court judge Gonzalo Curiel on Tuesday made public more than 400 pages of Trump University "playbooks" describing how Trump staff should target prospective students' weaknesses to encourage them to sign up for a $34,995 Gold Elite three-day package.Trump University staff were instructed to get people to pile on credit card debt and to target their financial weaknesses in an attempt to sell them the high-priced real estate courses.
The documents contained an undated "personal message" from Trump to new enrollees at the school: "Only doers get rich. I know that in these three packed days, you will learn everything to make a million dollars within the next 12 months."
The courses are now subject to legal proceedings from unhappy clients.
This shows someone who was absolutely shameless in his willingness to lie to people - Eric Schneiderman
Judge Curiel released the documents, which are central to a class-action lawsuit against Trump University in California, despite sustaining repeated public attacks from Trump, who had fought to keep the details secret.
Curiel ruled that the documents were in the public interest now that Trump is "the front-runner in the Republican nomination in the 2016 presidential race, and has placed the integrity of these court proceedings at issue".
... ... ...
The playbook contains long sections telling Trump U team members how to identify buyers and push them to sign up for the most expensive package, and to put the cost on their credit cards."If they can afford the gold elite don't allow them to think about doing anything besides the gold elite," the document states.
If potential students hesitate, teachers are told to read this script.
As one of your mentors for the last three days, it's time for me to push you out of your comfort zone. It's time for you to be 100% honest with yourself. You've had your entire adult life to accomplish your financial goals. I'm looking at your profile and you're not even close to where you need to be, much less where you want to be. It's time you fix your broken plan, bring in Mr. Trump's top instructors and certified millionaire mentors and allow us to put you and keep you on the right track. Your plan is BROKEN and WE WILL help you fix it. Remember you have to be 100% honest with yourself!Trump University staff are instructed in how to persuade students to put the cost of the course on their credit cards, even if they have just battled to pay off debts.
Do you like living paycheck to paycheck? ... Do you enjoy seeing everyone else but yourself in their dream houses and driving their dreams cars with huge checking accounts? Those people saw an opportunity, and didn't make excuses, like what you're doing now.Trump staff are told to spend lunch breaks in sign-up seminars "planting seeds" in potential students minds about how their lives won't improve unless they join the programme. They are also told to ask students personal questions to discover weaknesses that could be exploited to help seal the deal.
Collect personalized information that you can utilize during closing time. (For example: are they a single parent of three children that may need money for food? Or are they a middle-aged commuter that is tired of traveling for 2 hours to work each day?)New York attorney general Eric Schneiderman, who has also sued Trump University , renewed his attacks on Trump on Tuesday. "You are not allowed to protect the trade secrets of a three-card Monte game," Schneiderman said ahead of the document's release. "If you look at the facts of this case, this shows someone who was absolutely shameless in his willingness to lie to people, to say whatever it took to induce them into his phony seminars," Schneiderman said.
Urban2 -> Karlyn Isaak Lotney 1 Jun 2016 09:17
This is no more of a fraud then lotion for baldness or pills for losing weight. Or anything else being sold for that matter. And it's district attorney that is using terms like shamelessness and lying. Those are defamatory terms, not legal.Jonathan Shearer -> Susan Victoria 1 Jun 2016 09:14Could you please name the prosecutors, giving dates and amounts of these donations? Can I have verified quote from Curiel where he expresses his STRONG support for La Raza? Exactly what are these "links" to Hillary?Urban2 -> CaptainRogers 1 Jun 2016 09:13No judge is in favor of illegal immigration, though he may be in favor of changes to law to change the status of illegal immigrant and/or to make legal immigration easier. Judges are not in favor of illegal activity.
Let's make America honest and verifiable (again).
If it were a civil case, they wouldn't have been in possession of Trump's internal documents. Besides nothing would stop the plaintiffs from disclosing documents themselves. Public interest would therefor not even be an issue. Now of course I'm not aware of all the intricacies, but it does look sinister. At least to me.Sanibel -> Paul Freeman 1 Jun 2016 09:10"And I think that they want a president who is not afraid of making tough, ruthless decisions (in America's interests)." The US already does that with poor defenseless countries. Problem is if Trump tries that with powerful countries( with nukes like China) it may not end so well...SakkiSelznick Susan Victoria 1 Jun 2016 09:10"Collect personalized information that you can utilize during closing time. (For example: are they a single parent of three children that may need money for food?" The judge didn't write that. Mr. Trump's university did.Debra Smith -> J Nagarya 1 Jun 2016 09:10In the USA, those at the bottom collaborate based on the 'promise' that the American Dream offers them a shot at the top, if they hold the party line.SakkiSelznick -> RogerColin 1 Jun 2016 09:07What they do not realize is that the "party" counts on the weight of their mass to hold that line for THEMSELVES ALONE. The people who back it all are thrown under the bus with great regularity. They never see it until the wheel roll over them and by that time they have sucked millions of others into the illusion that they are the "one" special one who will make it from the bottom and be welcomed as a peer into the 1%.
It is not so surprising. Hope is a hard thing to kill and an easy thing to exploit.
A sales playbook that teaches seeking out "a single parent with three kids who struggles to buy food" and targeting them for credit card debt" is not only cruel but illegal. And it's far from buying low and selling high.tonichicago -> Wordblind 1 Jun 2016 09:07He appeals to those who hate "big government". Ironically, they don't seem to realise that his threats to curtail the "nasty and dishonest" press simply mean that we will end up with unfettered government. There will be no accounting to anyone.tonichicago -> Aaron Rosier 1 Jun 2016 09:04He is being sued for "deceptive business practices" which is to do with the content of his so-called University courses. You can be a snake oil salesman and pressure people into buying more expensive stuff, but you can't sell them lemons. There are consumer protection laws to prevent that, and that's what these lawsuits are doing. He sold them all a bill of goods.Debra Smith -> downhillracer117 1 Jun 2016 09:01You have hit at the crux of the matter.ID446302 1 Jun 2016 09:00This is TEAM BASED. Americans are indoctrinated to TEAM from very early in life. Every sport event, the high school team, the prom and everything in college life is TEAM BASED. You are "in" or you are "out" (meaning human or not human) by the colour of your jersey. Truth, justice, facts, are all dismissed based on what team you belong to.
An American success story? Exceptionalism to its core. Hidden in the shadows of our IRS and our exceptional judicial, until you threaten the political establishment by running for president.J Nagarya -> bobkolker 1 Jun 2016 09:00He is being sued NOW, and he is attacking the judge because he KNOWS he is being exposed for the crook he is.keepsmiling -> Echocell 1 Jun 2016 09:00Stop defending criminality: he is being sued for his tactics because they are NOT legal.
Pay attention to the news reports on his methods, as exposed in the Trump "University" materials he DIDN'T WANT released, but which now the court has released as result of his baseless slanders against the judge presiding over the case because HE KNOWS they expose his criminality.
Susan Victoria 1 Jun 2016 08:56Hate to tell you this, but what was written in the playbook is called "sales techniques." It's used by every company on the planet that has a product to sell. Don't hate the player, hate the game (capitalism).'Just following orders', which is basically what you are trying to justify, in a business context, has been discredited as a modus operandi and is not a legal defence (hence the lawsuit, with which I wish them the very best of luck).You have to fight the players - 'capitalism' is too nebulous a concept to 'fight', so you end up not seeing the wood for the trees. Exposing them one at a time is fine - it's all part of the big picture and is educational. There's a lot of educating to be done with regard to Trump's followers.
Here we go again... the public will be fed a series of quotes, almost all taken out of context, designed to bash Trump and spread even more hate.youssou -> Ortho 1 Jun 2016 08:53Meanwhile, the more one learns about the judge and the more this judge is in conflict of interest (IMO). This judge is for open borders and illegal immigration, is a strong advocate for La Raza (yes, that anti-White and pro-illegal Mexican hate group), has links to the Clintons (Hillary) and appointed two prosecutors to the case who are extremely generous donators towards Hillary, including paying her significant $ for speeches.
Very interesting testimony coming out of Clinton's deposed staff re her email server, including she didn't have a password... the mysterious fire... and more. But who cares? Trump-bashing is the order of the day.
Lol interesting theory ... ;-)Guthrum -> MartinMckay 1 Jun 2016 08:49I had to google it ... and yes: http://www.businessinsider.com/new-york-military-academy-closes-2015-9?IR=T
Though, I think, not everybody who attends boarding school becomes a sociopath. But sociopathy runs in families. And sociopathic parents tend to put kids into boarding school or reformatory for that matter. Just to get rid off them.
In such a naked, dog-eat-dog society, there should also be no personal bankruptcy protection or ring-fencing for those who fail in business. All their assets siezed to pay off creditors. Not sure Trump would be so keen on that.AntonZ1 -> BiggyZ 1 Jun 2016 08:49To do otherwise would be rewarding failure, using the state to prop up losers.
Donald Trump University is not a religion. Drumpf is more cult leader than religious scholar.Karlyn Isaak Lotney Urban2 1 Jun 2016 08:47Shamelessness is not a crime in the USA, but crime (fraud) is still a crime.ClearItUp 1 Jun 2016 08:45Nothing will come out of this, that will effect the election. The practices documented in the papers released is a high pressure sales tactic which are used by many. The focus should be on what Trump stands for and bring the fight to him. Hillary Clinton is the wrong person in the wrong year to be able to take on Trump. She is flawed beyond repair, and is fighting not to lose, so careful with her words that they don't resonate.CaptainRogers -> Urban2 1 Jun 2016 08:44He's being sued, so it's a civil case. Documents can be made public if it's in the public interest to know about them. And when it looks very much like a con man is on his way to the Whitehouse, I'd call that a big yes for public interest.Tom Voloshen 1 Jun 2016 08:42Killary attacks the MANY women who accuse her husband of rape, lies to the grand jury over White Water, to congress and the people about Benghazi, runs guns to ISIS, takes money from Saudi Arabia the worst women's rights violator, lies about being shot at landing in Bosnia, approves uranium mining deal to Russian concerns while SOS and receives millions to her foundation at the same time, starts an unregistered hedge find in Columbia of all places, takes millions from banks and you fault Trump for greed and making his own way without influence peddling while in public office.OpineOpiner 1 Jun 2016 08:40A snake oil salesman, a 'boiler room' operator, a phishing scammer, that's all Trump is. Honestly, is there any lie this sociopath could not tell? Is there any con game too crooked and despicable for even him?Sounds like a third world country with no social contract other than the "opportunity" to exploit one another.AntonZ1 -> Aaron Rosier 1 Jun 2016 08:34Btw, supplanting content with the cheer leading, rhetoric, hate, and cheap one liners is the creed of the Trumpeteers.
A 'predatory capitalist' is a thief, no matter how "biased" or "naive" you are.Aaron Rosier -> ElfenLied2 1 Jun 2016 08:28Clinton is already tirelessly working to drive voters away with her beams of blind arrogance, pretentiousness, divisiveness, unwillingness to accept/acknowledge consequence of her glaring failures of judgement, the naked pandering, the belligerent "campaign theme", and of course all of the old hits (Slick Billy and the Slimers, NAFTA, welfare reform, KXL, TPP, Fracking, Wall Street Transcripts, etc).karmarama -> elemenohpee 1 Jun 2016 08:21Donald Trump will feast on Clinton's garbage, while slowly moderating his platform positions, and steering his rhetoric slowly back to professional (from simpleton).
You seem to misunderstand me. Like several other posters on this thread, I am suggesting that Trump's practices are part of the wider world of business, and not so far from normal (not, in my view the same as 'acceptable') practices. The use of the name 'University' was certainly fraud, but why was it not caught right away by whoever is in charge of that in the US? His sales pitch, while pretty sleazy, is not far away from normal practice in brokerage, real-estate, holiday sales and many other areas of business, including the bottom of the education industry - indeed, doesn't every university 'oversell' itself to students, hence the need for independent surveys, and aren't there a host of 'degree for sale' schools in the US?ID673139 -> Carl123 1 Jun 2016 08:18As a socialist I consider it all to be 'unacceptable', and I hope you don't take me for a Trump supporter, which I suspect you do. He is even more unacceptable than the Bush clan was! However those who are using this to smear Trump are walking a tightrope between 'normal' and 'fraud' when I think that the distinction is not at all clear.
Clinton has a pretty shady past as well, like covering up potential rape allegations for Bill.bbqtv -> ConnecticutNutmeg 1 Jun 2016 08:18I'm not saying it is a defence at all, but as soon as Trump becomes a presidential candidate suddenly its front page news. He not done anything illegal, and if your so upset over these business practices why not look at the industry as a whole and people who do skin people with these practices. I said it before with Clinton or Trump either of them is a bad choice for president.
Student loans are encouraged even for courses & "degrees" that have no future earning potential. Colleges & universities increase non teaching & non research "staff" using these funds because they have money to spend for which there is NO accounting. [Why do you need to hire two assistants? So I don't have to teach!"ConnecticutNutmeg 1 Jun 2016 08:10Trump U. apparently targeted adults-not teenagers.Muz Murray -> c0n0r 1 Jun 2016 08:03If only all the millions of students who were coerced by high school guidance counselors and campus administrators to sign contracts for government student loans, and are now on the hook for hundreds of thousands of dollars of debt without any good job prospects in this Obama economy, could sue the government for failing them as these students are suing Trump. Many of these students had no business going on to college and many drop out without getting the degree-but they still owe the money.
By having the students sign these loan agreements (not their parents) , government considers college students adults . But when it comes time to repay these loans, all of a sudden all the Democrats whine about these poor kids and their debt. Make up your mind. Are they old enough to take on the responsibility of signing a contract or not? If not, perhaps they should not be given the ballot either.
Just about everything, if past presidents and their cronies are anything to go by. They are in it for the business of making money and feathering their own nests, while blithely blabbering about doing it 'for America.'Martin Cohen 1 Jun 2016 07:55I just don't understand how the US has wound up with a Clinton or Trump choice. Can the electorate be so politically disengaged as to allow one of these two into the most powerful job in the Western world? If Trump is simply the anti-establishment protest vote, that is all very well but someone as divisive and offensive as him can never unite a country. There are already protests on the streets that thankfully haven't turned too violent yet but it won't take much for heavily armed riot police to trigger something unthinkable. Being President always seemed to be a unifying job that commanded loyalty and respect even from staunch opponents. I always admired that about the Presidency. I don't see much evidence of it these days. Has respect for politics and politicians reached at an all time low in The States too? Trump isn't the answer, nor is a shady Clinton. We need politics and our politicians to once again embrace the concept of public service, morality and the precise rule of law. It would have been tremendous if more principled candidates had emerged victorious and given a much needed shot of public confidence in such a maligned vocation. I fear for the future. We may have stopped the cycle of European wars but globally it's more dangerous than ever. A competent steady hand on the tiller is what's needed now, especially in America.Paul Freeman 1 Jun 2016 07:47Unfortunately, american's tend to believe that businesses should be ruthless - except, of course, if it is them who has been the victim of a ruthless scam. And I think that they want a president who is not afraid of making tough, ruthless decisions (in America's interests). So it would not surprise me if these revelation actually boost Trump's popularity.Tommo68 -> HardboiledChicken 1 Jun 2016 07:39anyone who can stump up 35 grand for a three day course doesn't need the course in the first place...
HiramsMaxim -> garth25 1 Jun 2016 07:11I'm not going to analyse all 50 States. US elections come down to a very few swing States. Those three are the most important.
The "Latino" vote in Florida is primarily not Mexican. Assuming legal immigrants will automatically support illegals from a different country is probably not wise. The real power in Florida is the retirees, although as Florida's population continues to grow, that is diminishing.
I very much doubt bill Clinton can capture white rural voters from Trump.
Clinton has nowhere near the support that Obama had among black voters. And, it doesn't do any good to win California with a bigger margin, the electoral votes remain the same.
I have no idea what the outcome will be, but I can say that Mrs. Clinton's huge lead has evaporated in about a month.
Tom Voloshen -> Maharaja Brovinda Singh 1 Jun 2016 07:09We came we saw he died...the human Killary.....
Tom Voloshen 1 Jun 2016 07:09The US keeps the the piece around the world using 720 military bases in foreign countries under the direction of people like Killary and the result is 15 years of war, death, destruction, millions dead, countries dissolved, missile batteries ringing Russia, our economy debt/GDP equal to Greece with NO END INSIGHT.....and you speak about Trump's lack of success? Lets talk of Killary's, Obama's, Bush's, Billy's....vote for anyone but Killary.
RussZimm 1 Jun 2016 07:07HRC was paid $385,000 for 3 speeches given to Goldman Sachs, nearly 10 times what the Trump 3 day course costs per person. Based on the speeches we hear from HRC, what could have been in these speeches that made them so valuable? Afterward there may have been the same buyer's remorse felt by Trump-course attendees. The comments that say that the U.S. is full of scams like this are on target, starting with the $1 lottery ticket. It is the dream that brought and brings people to the U.S., and if it turns out to be an expensive nightmare, the answer is "caveat emptor."
Karen Poyser -> HardboiledChicken 1 Jun 2016 07:06What a horrible way to see the world! These are vulnerable people being prayed upon, desperation can make people do stupid things. Considering all the ''american dream'' capitalist propaganda thrust on people from the minute they are old enough to comprehend, its surprising more don't fall for this sort of thing.
tempestteacup 1 Jun 2016 07:27Am I alone in finding the steady drip of tidbits regarding Trump's business practices interminable? It is not news and it is not even particularly illuminating. This is all known grown that merely lends him greater exposure and entrenches his supporters in their view that he is the victim of an establishment conspiracy to smear, discredit and misunderstand.
Meanwhile, we have next to nothing on the devastating IG report on Clinton's e-mail server. We have almost no analysis on how the Republican Party is quietly, begrudgingly, rallying around Trump at exactly the moment that the Democrats are doing the opposite and degenerating into a fractious mess because they meretriciously anointing a terrible candidate 18 months ago.
Trump has received millions of votes. He has decimated a crowded Republican field, most of them smooth political operators with huge financial backing. This did not happen because there are millions of racists in America. It is because we are entering a potentially bloody phase in America's Culture Wars, with an increasingly mindless adherence to identity politics pitted against the historic grievances of a working class that now feels abandoned by the left (Bernie notwithstanding).
Anything about that, instead of fanning the flames of Trump's Plot Against America-style campaign?
*tumbleweed*
edithamy -> ljonesjr 1 Jun 2016 06:48Salesman uses corrupt and illegal sales techniques to generate sales would be even more of a shock headline.
Kris Penny 1 Jun 2016 06:41Not as ruthless as other ventures he's been involved in....
http://www.alternet.org/labor/donald-trumps-hiding-something-those-unreleased-tax-returns
Rita Hoeffner -> SEADADDY 1 Jun 2016 06:38The real problem here is that Obama got elected, who had such a checkered past yet the media have him a pass. The media is still giving Hillary a pass.
At least with Trump, by the time he gets in office, I have a feeling he will be thoroughly vetted. What a nice change from having no clue about the man in the White House for the last 8 years!
Was he born in Kenya as a book jacket reported? Was he born in Hawaii as a dubious birth certificate stated? Who was his mom? Who was is dad? Who were his mentors? Where did he go to school? What were his grades? Lots of questions that we were told several answers to, but he was NEVER really vetted by the press, only anointed.
I'd rather know for sure what I'm getting! I think I know how ruthless Trump is...even before this article....that's why I'm voting for him.
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Posted on June 2, 2016 by Yves Smith Yves here. The first comment came in on a post that had gone cold, and I thought it was so revealing that it needed to be seen widely. The second is a synchronistic complement.As much as I carry on about the isolation of the Acela-riding classes from the acute distress in much of the US, I only have a very distant feel for it. For instance, I grew up moving through many small towns where a paper mill was a major, and in some cases, the biggest local employer. Those mill jobs were well paid and the workers could buy houses, cars, and had pensions. One of my brothers works for a paper mill that should have been world competitive through his retirement, but it's been wrecked by a series of private equity owners, starting with Cerberus, and in now in bankruptcy. The town in which he lives, Escanaba, Michigan, has lost over 20% of its population since the mid 1980s. Similarly, my uncle lived below the poverty line in Maine, lobstering until his knees gave out. But he had a fully paid for house he had inherited, and access to VA hospitals and doctors, so it could have been a lot worse. But Maine is a poor state, so even visiting there as a tourist in the summers, it's not hard to see the signs of struggle even in those who are getting by.
The first comment gives a window into the hidden desperation in America that is showing up in statistics like increasing opioid addiction and suicides, rather than in accounts of how and why so many people are suffering. I hope readers will add their own observations in comments.
seanseamour, June 1, 2016 at 3:26 am
We recently took three months to travel the southern US from coast to coast. As an expat for the past twenty years, beyond the eye opening experience it left us in a state of shock. From a homeless man convulsing in the last throes of hypothermia (been there) behind a fuel station in Houston (the couldn't care less attendant's only preoccupation getting our RV off his premises), to the general squalor of near-homelessness such as the emergence of "American favelas" a block away from gated communities or affluent ran areas, to transformation of RV parks into permanent residencies for the foreclosed who have but their trailer or RV left, to social study one can engage while queuing at the cash registers of a Walmart before beneficiaries of SNAP.
Stopping to take the time to talk and attempt to understand their predicament and their beliefs as to the cause of their plight is a dizzying experience in and of itself. For a moment I felt transposed to the times of the Cold War, when the Iron Curtain dialectics fuzzed the perception of that other world to the west with a structured set of beliefs designed to blacken that horizon as well as establish a righteous belief in their own existential paradigm.
What does that have to do with education? Everything if one considers the elitist trend that is slowly setting the framework of tomorrow's society. For years I have felt there is a silent "un-avowed conspiracy", why the seeming redundancy, because it is empirically driven as a by-product of capitalism's surge and like a self-redeeming discount on a store shelf crystalizes a group identity of think-alike know-little or nothing frustrated citizens easily corralled by a Fox or Trump piper. We have re-rcreated the conditions or rather the reality of "Poverty In America" barely half a century after its first diagnostic with one major difference : we are now feeding the growth of the "underclass" by lifting ever higher and out of reach the upward mobility ladder, once the banner of opportunity now fallen behind the supposedly sclerotic welfare states of Europe.
Praedor, June 1, 2016 at 5:37 pm
So Richard Cohen now fears American voters because of Trump. Well, on Diane Reem today (NPR) was a discussion on why fascist parties are growing in Europe. Both Cohen and the clowns on NPR missed the forest for the trees. The reason Trump and Sanders are doing well in the US while fascists are doing well in Europe is the same reason: neoliberalism has gutted, or is in the process of gutting, societies. Workers and other formerly "safe" white collar workers are seeing their job security, income security, retirement security all go up in smoke. Neoliberals are trying to snip and cut labor protections, healthcare, environmental regulations all for corporate profit. In Europe this is all in addition to a massive refugee crisis itself brought on by neoliberalism (neocon foreign policy is required for neoliberal social policy, they go hand-in-hand). The US and NATO destabilize countries with the intent of stealing their resources and protecting their markets, cause massive refugee flows which strain social structures in Europe (which falls right into the hands of the gutters and cutters of neoliberalism). Of course the people will lean fascist.
In the US we don't have the refugees, but the neoliberalism is further along and more damaging. There's no mystery here or in Europe, just the natural effects of governments failing to represent real people in favor of useless eater rich.
Make the people into commodities, endanger their washes and job security, impose austerity, and tale in floods of refugees. Of COURSE Europeans stay leaning fascist.
Selected Skeptical Comments
Steve Sewall , June 2, 2016 at 12:07 pmWhat a comment from seanseamour. And the "hoisting" of it to high visibility at the site is a testament to the worth of Naked Capitalism.
seanseamour asks "What does that have to do with education?" and answers "Everything if one considers the elitist trend…" This question & answer all but brings tears to my eyes. It is so utterly on point. My own experience of it, if I may say so, comes from inside the belly of the beast. As a child and a product of America's elite universities (I have degrees from Harvard and Yale, and my dad, Richard B. Sewall, was a beloved English prof at Yale for 42 years), I could spend all morning detailing the shameful roles played by America's torchbearing universities – Harvard, Yale, Stanford etc – in utterly abandoning their historic responsibility as educators to maintaining the health of the nation's public school system.*
And as I suspect seanseymour would agree, when a nation loses public education, it loses everything.
But I don't want to spend all morning doing that because I'm convinced that it's not too late for America to rescue itself from maelstrom in which it finds itself today. (Poe's "Maelstrom" story, cherished by Marshall McLuhan, is supremely relevant today.)
To turn America around, I don't look to education – that system is too far gone to save itself, let alone the rest of the country – but rather to the nation's media: to the all-powerful public communication system that certainly has the interactive technical capabilities to put citizens and governments in touch with each other on the government decisions that shape the futures of communities large and small.
For this to happen, however, people like the us – readers of Naked Capitalism – need to stop moaning and groaning about the damage done by the neoliberals and start building an issue-centered, citizen-participatory, non-partisan, prime-time Civic Media strong enough to give all Americans an informed voice in the government decisions that affect their lives. This Civic media would exist to make citizens and governments responsive and accountable to each other in shaping futures of all three communities – local, state and national – of which every one of us is a member.
Pie in the sky? Not when you think hard about it. A huge majority of Americans would welcome this Civic Media. Many yearn for it. This means that a market exists for it: a Market of the Whole of all members of any community, local, state and national. This audience is large enough to rival those generated by media coverage of pro sports teams, and believe it or not much of the growth of this Civic media could be productively modeled on the growth of media coverage of pro sports teams. This Civic Media would attract the interest of major advertisers, especially those who see value in non-partisan programming dedicated to getting America moving forward again. Dynamic, issue-centered, problem-solving public forums, some modeled on voter-driven reality TV contests like The Voice or Dancing with the Stars, could be underwritten by a "rainbow" spectrum of funders, commercial, public, personal and even government sources.
So people take hope! Be positive! Love is all we need, etc. The need for for a saving alternative to the money-driven personality contests into which our politics has descended this election year is literally staring us all in the face from our TV, cellphone and computer screens. This is no time to sit back and complain, it's a time to start working to build a new way of connecting ourselves so we can reverse America's rapid decline.
OK, so I hear some of you saying, corporate America will never let this Civic Media get off the ground. My short answer to this is that corporations do what makes money for them, and in today's despairing political climate there's money to be made in sponsoring something truly positive, patriotic and constructive. And I hear a few others saying that Americans are too dumbed down, too busy, too polarized or too just plain stupid to make intelligent, constructive use of a non-partisan, problem-solving Civic Media. But I would not underestimate the intelligence of Americans when they can give their considered input – by vote, by comment or by active participation – in public forums that are as exciting and well managed as an NFL game or a Word Series final.
seanseymour, thanks for your insights and thanks, Yves, for putting them where we can see them.
* For any Yalies out there, I documented these roles in this 30-page historical memorial to my dad.
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allan , May 19, 2016 at 3:24 pminode_buddha , May 19, 2016 at 10:45 pmTwo-thirds of US would struggle to cover $1,000 crisis [AP]
Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll released Thursday, a signal that despite years after the Great Recession, Americans' finances remain precarious as ever.
These difficulties span all incomes, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.
Even for the country's wealthiest 20 percent - households making more than $100,000 a year - 38 percent say they would have at least some difficulty coming up with $1,000. …
Surely there must be a fintech solution.
Gretchen Outre , May 19, 2016 at 6:27 pmI think the real issue isn't so much about being able to come up with $1000 as it is the reasons why: the lower and working classes never had that much to begin with, any increase was swiped by the upper class. And the upper class is in a Death-race 2000 to out do each other, keeping up with the Joneses via corporate methods.
I have known personally some of those types; they tend to be all about winning at all costs, and then act all surprised when the game is ruined for everyone else. Generally they call it "sour grapes" instead of considering their own behavior.
Class Warfare – http://www.reuters.com/article/us-pope-slavery-idUSKCN0YA1GQ
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economistsview.typepad.com
Travel day -- will post more later if and when I can.This is a review of Branko Milanovic's "Global Inequality: A New Approach for the Age of Globalization" by Miles Corak:
Worlds of Inequality, The American Prospect : This book begins by posing a question: "Who has gained from globalization?" Many thoughtful Americans have the confidence to answer in a sentence. The gains have been captured by the top 1 percent. And the book ends with another question: "Will inequality disappear as globalization continues?" Many might be just as quick to answer: Of course not, the rich will get richer! But life is not so simple. Between these two questions Branko Milanovic offers us not just a plethora of facts about income inequality that will surely make his readers think twice. More importantly, he shows us the power of bringing the facts into focus by putting a new lens over these pressing issues-a global perspective. ...The most striking fact that motivates his book is a graph that the Twittersphere has already termed "the elephant curve." This is the one-sentence, or rather one-picture, answer to the first question: "The gains from globalization are not evenly distributed." ...Clearly evident are the rise of a global middle class, in some important measure reflecting the great march out of poverty in China, and the equally amazing rise in the incomes of the top 1 percent globally. The winners of globalization were many people who three decades ago were dirt-poor, and though a big percentage increase in a very low income still amounts to a rather low income by the standards of the average person in the rich countries, it is a major movement in the right direction. But the great winners of globalization were also a relatively few people in the already-rich countries, a global plutocracy who also experienced income gains of over 50 percent, but from a much higher starting point. Both of these changes are without precedent in the history of humanity.But the elephant curve also shows that even though some have gained, others have not seen their prospects improve at all-indeed, probably leading lives of more insecurity and more worry, not just about their prospects but also the prospects of their children. The big losers in these global income sweepstakes have been middle- and lower-income people of the rich countries...
DrDick : , Wednesday, May 18, 2016 at 06:27 AM
That book is on my shelf for my summer reading. I would add, as implied in the review, that most of the decline in global inequality (between countries) has come from the decrease in the number of people living on $2/day or less, though their incomes remain very low. In contrast, within country inequality has increased globally.Gibbon -> DrDick... , Wednesday, May 18, 2016 at 09:56 PMThat average poorness is decreasing while people in the first world lose ground reminds me of the Simpson's paradox.DrDick -> Gibbon ... , -1https://en.wikipedia.org/wiki/Simpson's_paradox
Also claims as such do a slight of hand and imply that the world economy is a zero sum. So for the people living on $2/day to improve their lot the people in the wealthy countries need to give up wealth. IE, the current system is working for everyone but you which means you're a loser who needs to STFU.
It really is a "zero sum game" to some extent, given that the economy, local or global, is finite at any point in time. However, the "winners" (can you really call bandits winners?) are the global plutocracy, who have sucked up almost all economic gains for more than 30 years.
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April 24, 2016
Yves here. Two things struck me about Jim Kidney's article below. One is that he still wants to think well of his former SEC colleagues. I know other whistleblowers and internal dissenters who wound up losing their jobs who initially blame themselves, than come to accept that the system in which they operated was fundamentally corrupt, that even if some people locally really were trying to do the right thing, it was bound to either 1. go nowhere, 2. be allowed to proceed to a more meaningful level if it was cosmetic or served some larger political purpose or 3. got elevated because the organization was suddenly in trouble and they needed to burnish their cred in a big way (a variant of 2, except with 3, you might have a something serious take place by happenstance of timing). Kidney does criticize corrosive practices, particularly the SEC stopping developing its own lawyers and becoming dependent on the revolving door, but his criticisms seem muted relative to the severity of the problems.
Number two, and related, are the class assumptions at work. The SEC does not want to see securities professionals at anything other than bucket shops as bad people. At SEC conferences, agency officials are virtually apologetic and regularly say, "We know you are honest people who want to do the right thing." Please tell me where else in law enforcement is that the underlying belief.
By James A. Kidney, former SEC attorney. Originally published at Watch the Circus
The New Yorker and Pro Publica websites today posted an article by Pro Publica's Jesse Eisinger about the de minimis investigation by the Securities and Exchange Commission into the conduct of Goldman Sachs in the sale of derivatives based on mortgage-backed securities during the run-up to the Great Recession of 2008. The details of the SEC's failure to aggressively pursue Goldman in the particular investigation, Abacus, and its refusal to investigate fully misconduct by Goldman and other "Too Big to Fail" banks, stands not only as a historic misstep by the SEC and its Division of Enforcement, but undermines the claim that the Obama Administration has been "tough on Wall Street." The Pro Publica version contains links to a few of the documents I provided.
No one in authority who was involved in the Goldman investigation ever gave me an explanation for why the effort was so slight. Mr. Eisinger's article doesn't offer any explanation from the one investigation participant brave enough to comment. The details of the investigation into Abacus at my level as trial counsel, which I provided to Pro Publica earlier this year, compels the conclusion that the SEC, its chairman at the time, Mary Schapiro, and the leadership of the Division of Enforcement were more interested in a quick public relations hit than in pursuing a thorough investigation of Goldman, Bank of America, Citibank, JP Morgan and other large Wall Street firms.
Although the emails and documents I produced to Pro Publica stemming from my role as the designated (later replaced) trial attorney for the Division of Enforcement are excruciatingly boring to all but the most dedicated securities lawyer, even a lay person can observe that the Division of Enforcement was more anxious to publicize a quick lawsuit than to follow the trail of clues as far up the chain-of-command at Goldman as the evidence warranted. Serious consideration also never was given to fraud theories in any of the Big Bank cases stemming from the Great Recession that would better tell the story of how investors were defrauded and who was responsible, due either to dereliction or design.
Instead, the SEC restricted its investigation to the narrowest theory of liability, had to be pressed (by me) to go even one short rung above the lowest level Goldman supervisor in its investigation (which took months to push through, though investigative subpoenas are frequently issued on far less in far smaller cases) and finally dropped other investigations of Goldman in return for a $550 million settlement announced July 15, 2010. To my knowledge (I retired in March 2014), the SEC never again pursued Goldman for its mortgage securities fraud or other major fraud. There is no evidence on the SEC website that it did so.
Nearly six years later, long after the statute of limitations for securities fraud expired and individuals, pension funds and corporate entities are no longer able to bring private actions against the Big Banks, the Department of Justice announced another settlement with Goldman for its deceptive conduct in the sale of mortgage-backed securities. In this one, Goldman agreed to pay more than $5 billion "in connection with its sale of residential mortgage-backed securities."
At a minimum, it can be said that the SEC left 90 percent of the money on the table at a time when a more aggressive investigation of the company, as well as others, could have counted for something by disclosing, in a detailed court complaint, Wall Street wrongs that might have helped policy makers better address the subject and allow damaged individuals and entities to bring their own lawsuits.
It is very important to emphasize emphatically several points. First, I have zero evidence, and would be very surprised, if any of the individuals at the Division of Enforcement, including senior supervisors or the SEC chairman or associate commissioners, acted unlawfully or were motivated principally to protect Goldman and other big banks. All of these people appeared well-intentioned from their point of view, even they never really explained, to me, or to many others at the Commission, their motives in limiting investigations. The most senior level supervisors left more lucrative jobs in the private sector to head the Division of Enforcement, taking plum jobs but at significant personal sacrifice. (They then returned to even more lucrative employment or even more high-profile public positions.) All of them were gentlemen. These factors make it all the more surprising that I never got a clear answer as to why the investigation was so constipated, as it obviously was. Its range was clearly limited from the outset: we will sue the bank and not look hard for evidence of individual participation beyond the lowest levels.
By the same token, it is unfair to assume as a fact that any of the individuals at Goldman not sued, or anyone at Paulson & Co., violated the securities laws, civilly or criminally. Like any citizen, they are entitled to a day in court. Absent such opportunity, they are innocent of any wrongdoing. Arguments in my internal correspondence that evidence was sufficient to sue should be viewed only as that - arguments.
So my point in releasing these documents to Pro Publica is not to chastise or hold up to public criticism those involved at the SEC, Paulson & Co. or Goldman, though criticism of the process and of the underlying financial conduct certainly is inevitable. All of these institutions have substantial influence in the investment industry. Rather, it is to bring to light the actual conduct of one of several SEC investigations into Big Bank fraud leading up to the 2008 financial crisis.
As I told Mr. Eisinger when I met him, I hoped he would go to the individuals in charge of the SEC investigation at the time and find out why the investigation was so limited. I have spent six years wondering what is the true answer to that question. Perhaps there were sound reasons, other than the urge to get out a quick press release, which led experienced criminal prosecutors with histories in Wall Street to smother a major investigation by limiting it to the lowest level employee possible, to express total resistance to even investigating further up the chain of command, and ignoring without serious explanation and analysis what I and others, including my own immediate supervisors, viewed as the more appropriate theory for civil prosecution. I hope there are such reasons. As a trial attorney at the SEC for over 20 years, I bled SEC blue. I believed that the agency usually tried to do the best it could, using analog era procedures and processes to combat fraud in a digital age. I am saddened to release this information. But the notion that "the Administration was tough on Wall Street" must be addressed by facts, not press releases and self-serving interviews, else the system's problems cannot be adequately addressed and repaired to deal with the next financial crisis.
Not only is the issue of how the financial sector enforcement agencies handled the wrongs of the Great Recession an important political issue, but it is important to history. It is important that the facts not be shielded from the public so that we can all learn for the future. And it is a melancholy thought that, presented with the opportunity for a rigorous investigation and airing of facts in civil or criminal proceedings gone, history will be denied a fairer story of both the financial crisis itself and how the government responded.
As many news organizations have noted , the taxpayer and Goldman shareholders will pay the combination of penalties and repayments in the DOJ settlement. No individual was named as liable in the civil settlement with Goldman nor in any of the other similar, and even larger, financial settlements entered into with the Department of Justice, all of which are vastly greater than what the SEC obtained in its "quick hit, one and done" enforcement actions. DOJ must be credited with what appears to have been a far more thorough investigation of wrongdoing than the SEC performed, but the public is properly mystified that no individuals were charged, criminally or civilly, although the DOJ press releases contains the usual caveat that "the investigation continues."
The settlements with Goldman and other Big Banks were resolved under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), which allows the Feds to ignore the normal five-year statute of limitations for fraud, but does not permit suit by private party victims. As has been the practice with DOJ when dealing with Wall Street, no criminal charge was brought. In fact, no complaint was filed in any of these cases. Instead, DOJ entered into contractual arrangements with the banks. Failing to fulfill their obligations under the contract would subject them to civil enforcement as a breach of contract matter, not a contempt charge in federal District Court.
Contrary to claims by politicians, it is clear that the Obama Administration has not been hard-hitting on Wall Street fraudsters. The large fines obtained by the Department of Justice, while a short-term pinch, are simply a cost of doing business. Relying on fines to penalize rich Wall Street banks, which, after all, specialize in making money and do it well, if not always honestly, is like fining Campbell Soup in chicken broth. It costs something, but doesn't change anything in the way of operations or personnel.
Despite billions in fines representing many more billions in fraud, the enforcement agencies of the United States have been unable to find anyone responsible criminally or civilly for this huge business misconduct other than a janitor or two at the lowest rung of the companies. Nor have they sought to impose systemic changes to these banks to prevent similar frauds from happening again.
Yessir, according to the Obama administration, Goldman Sachs, JP Morgan, Bank of America, Citibank and other institutions made their contributions to tearing down the economy, but no one was responsible. They are ghost companies. And nothing needs to be done to prevent such intent or dereliction in the future.
Law enforcement by contract? Clearly, the banks made it a condition of settlement that no complaint, civil or criminal, be filed. That might gum up the works by requiring state regulators to take action under their own rules, or cause other collateral consequences.
Ah, say the defenders of the status quo, don't forget about Dodd-Frank, the unwieldy legislation passed by feckless Democrats influenced by big money contributors and their own fear of appearing too aggressive (a particular Democratic Party contagion). Dodd-Frank was and is a virtual chum pool for Wall Street lawyers and lobbyists, leaving most of the substance to regulatory agencies such as the SEC and the Federal Reserve, who for years have been significantly captured by those they are supposed to regulate. The private sector lawyers and lobbyists have open doors to these places to "help" write the rules and add complexity, which they later complain about in court, challenging those same rules as too complex.
Dear citizen, just remember this: complexity favors fraud, and certainly favors Wall Street and corporate America. You can't understand the rules and neither can Congress or all but the most dedicated experts. That's a lot of room to disguise misdeeds. To take a current example, which came to my attention just before completing this post, Congress is trying to use sentencing reform, generally thought of as intending to remove inequities from the criminal justice system, to also make it even tougher to prosecute and punish white-collar crime. Is this why the Koch Brothers suddenly show such public attention to the poor and needy by favoring such legislation? See this discussion of adding the "mens rea" requirement to such legislation. Burying an important but legalistic issue in otherwise liberal leaning legislation is a current example of disguising lax enforcement of white-collar crime in a complicated package. As one Democratic congressman suggested, how can a liberal vote against sentencing reform? The explanation of the badger buried in the woodpile is too complicated for the average voter.
Not coincidentally, adding a requirement to the law that it is a defense to either the crime itself or to sentencing that "I didn't know my acts were against the law" is a get out of jail free card as the complexity of laws addressed to ever more sophisticated business misconduct grows. Wall Street clearly has shown no shame in using the defense that "no one knew". Can't blame them. It has worked so far. Maybe they don't even need new legislation.
I was told repeatedly when I entered the Goldman investigation that synthetic CDOs were just too complex for me to understand. Of course, it appeared to be plain vanilla fraud selling a product designed to fail but nicely packaged for chumps to buy. Claims of complexity hide many easily understood sins.
At least for the major sins, we don't need even more complex regulations. Instead, put leadership in place who will aggressively enforce the laws we have already. That would raise plenty of eyebrows and put some bums in prison, or at least make them pay civil and criminal penalties personally. As many have noted, prison or, at least, personal financial liability, beats corporate concessions every time and pays back in future reluctance to break the law. The country should try it sometime.
So back to little me, a small and ineffective cog in the larger system. Why is this release of documents so long after the investigation?
My friends know that I have been upset since 2010 about the way the SEC handled the Goldman case and, in my view (confirmed by other trial lawyers), that it became a template for other SEC civil suits against the Big Banks. In 2011 I wrote an anonymous letter to The New York Times complaining about the lack of investigative effort by the Division of Enforcement and the impact of the "revolving door" bringing Wall Street defense lawyers into the highest reaches of the SEC. This is a practice that Obama has continued at most departments and agencies having to do with the financial system, following in Bill Clinton's footsteps. The New York Times letter was based entirely on publicly available information.
I was dismayed to not find any follow-up to my letter in The New York Times . I gave up trying to bring attention to the investigative lassitude of the agency. Interest appeared to be over.
A year after I retired, I sent a copy of the letter to The Times , under a cover letter identifying myself. One of the addressees on the original letter called and told me the original letter never was received. The caller suggested that was because I misaddressed it to the old location of The New York Times . I felt foolish, of course, but I guess that in 2014, when the letter was finally received, The Times didn't see fit to follow-up the information even knowing its source. This was another indication to me that the time for debate over the law enforcement treatment of wrong doers on Wall Street had passed.
Once, years earlier and only for a brief time, the SEC was an agency that was at least sometimes fearless of Wall Street institutions. In those days, the directors of the Division of Enforcement were home-grown, not imported from Wall Street law firms. After 1996, that ended. Every director since has been nurtured as a Wall Street defense lawyer. The decline in performance has followed an expected arc. No one has seemed bothered by this. It seems the phrase "lawyers represent client interests" is sufficient explanation to insulate this practice from critics. In this view (pushed by lawyers), lawyers are the only people in America who are not influenced by their work experience, including friendships and defense of client practices. They are SO exceptional! So give it up, Jim, I finally told myself. It's the nature of Washington to put foxes in hen houses and claim they are protecting the fowl.
But in April 2015, Sen. Bernie Sanders announced his presidential candidacy, based principally on anger over how Wall Street has escaped being held seriously responsible for its misdeeds. If you credit Sanders with nothing else, praise him for not letting go of the notion of justice for those who suffered and those who caused pain and anger for millions. Yes, the banks are not solely responsible for the Great Recession, but they contributed more than their fair share and leveraged immensely the damage initially caused by others.
Sanders was not treated seriously. The publications I read made it clear that Sanders was, like Donald Trump, a flash in the pan. Jeb Bush and Hillary Clinton would be nominated. Anger against Wall Street and inequality were issues, but not worthy vehicles for a political campaign. Nothing here. Move on.
It turns out that the ravages caused by Wall Street are the gift that keeps on giving. As Sanders campaigned with far more success than predicted, and Secretary of State Clinton defended President Obama as "tough on Wall Street," it was evident that my small contribution to correcting the record might be timely.
So here it is.
Do I think Obama is responsible for the ineffective and embarrassing lay downs at the SEC and DOJ? Yes, I do. I have no idea if the President communicated to his law enforcement appointees that they should "go easy on Wall Street." Rarely is such overt instruction necessary in Washington. But it is not hard to believe that in some fashion he did send such signals, since he came into office with a mantra of letting bygones be bygones, including in the far more important arena of the false narratives for invading Iraq.
In any event, the chairman of the SEC and the attorney general are appointed by the President. At a minimum, we can say with certainty that Obama was satisfied with their performance. It is difficult to conceive that, as a Harvard educated lawyer who also taught law at the University of Chicago, it never crossed his mind how massive civil or criminal misconduct could go on without the supervision or knowledge of at least mid-level executives. Certainly, the public criticism was brought to his attention. His response was to create a joint task force on the subject of fraud in general. Its main visible public function is to collect all the press releases on fraud prosecutions, including small-time fraud, on one website . It also offers advice to "elders" on how to avoid fraudulent scams. The pro forma mention of the task force in DOJ's announcement of the Goldman settlement signals that the Task Force doesn't do much. Again, law enforcement by press release.
The alternative possibility, never mentioned because it is preposterous, is that big Wall Street firms so lack supervision of their lower level employees that fraud on a huge scale can be conducted without the knowledge of even mid-level executives. At the SEC, at least, such a conclusion should call for application of its "regulatory" function to impose supervisory conditions on the banks. No such action was ever undertaken. Instead, it was "pay up some money and nevermind."
Dodd-Frank at best imposes generalized rules about bank size and other generic issues, rather than addressing the kinds of fraudulent actions that actually occurred. It is appropriate for the SEC or Federal Reserve to impose narrower changes in corporate practice to address specific kinds of fraud. They are called "undertakings" and are often imposed by civil settlements with the SEC or in litigated relief. It did not happen with the Big Bank frauds.
I believe that the American public is entitled to accurate information about how their government works, including the important regulatory agencies. One way to do this is to fully disclose how the sausage is made, especially when the process is defective. Self-promoting press releases swallowed by a fawning business press is not sufficient. I knew I would not disclose any non-public information about the Goldman investigation while the lawsuit against Fabrice Tourre was pending. He was the one guy at Goldman the SEC sued personally. In fact, I think he was the only guy employed by any of the big banks sued personally. (Another fellow who worked with the banks - not for the banks - was sued in another case. He was found not liable, with the jury asking how come higher-ups were not in the dock and urging the investigation to continue. It wasn't.) The Tourre case concluded a few years ago with a verdict against the defendant. All appeals are exhausted. The statute of limitations has expired for private actions. Disclosure of the information I had can do no harm to the public or to pending litigation.
The only reason to keep the information secret is to prevent embarrassment to the SEC or to those people who made decisions for the agency. Most of them left the SEC years ago. For public consumption, I have tried to redact all names of the non-supervisory personnel in the Division of Enforcement who worked on Goldman. I also must add that, as the emails show, for a period of time those dedicated investigators were excited about the notion of bringing at least a slightly broader action than their supervisors wanted. As is the case with much of the Division of Enforcement, the worker bees try hard and usually are fearless. It is their bosses who frequently suppress their enthusiasm for policy, political, or personal reasons.
As final egotistical end note, I must say that, despite all of my personal reservations about his dedication to effective law enforcement in the financial sector, I voted for the President twice. I will vote for whoever is the Democratic nominee. But I ask myself: Is this the best that two political parties given de facto monopoly over selection of presidential candidates can do?
Whoever is nominated and elected, Republican or Democrat, I hope that he or she will recognize the need to end the practice of hiring Wall Street personnel to run our financial enforcement agencies. They should begin by looking to home-trained personnel to lead the major departments and agencies, such as Treasury, the SEC and the Department of Justice, including the chief of the Antitrust Division. These are the people who are responsible for these institutions on a daily basis and also understand the nature and importance of their mission. They have a career stake in doing an effective job. Outsiders are, in general, more interested in resume polishing for the next private job. Additionally, much great talent leaves these agencies for their own more lucrative private careers when they see their own chances for advancement blocked by outsiders or their energies trying to fairly but aggressively enforce the law sapped by timid leadership.
One party has chastised our government on every occasion for nearly 40 years and shows no intention of reining in Big Business or Wall Street. Directly or by implication, these attacks tarnish government employees in general, making a public service career less attractive to our most talented citizens. The other party has been indifferent or ineffective in its defense of civil service and has addressed financial sector wrongs by adding to the complexity of the system rather than cutting through it. As a result, some of our businesses are above the law.
Something has got to change. It will. The question is, will it be for the better?
Gaylord , April 24, 2016 at 4:40 amJames Levy , April 24, 2016 at 6:24 amThe author is trying very hard to be nice to the point of being delusional. This is criminality and corruption through and through, and it didn't end in '08. Don't be sad… get mad.
H. Alexander Ivey , April 24, 2016 at 6:58 amWhen it's your career, you get sad.
A little history: I was hired, first as an adjunct, then a tenure-track professor, by the interdisciplinary Freshman teaching unit at my old university. Two years before I would have come up for tenure (and gotten it) they axed the program and switched me, against its will, to the History Department. And they reset my tenure clock to zero. Long story short, they were never going to tenure me. So I slogged on and earned my pay and got my two kids through high school. By then, my wife wanted out of the suburbs and said she was leaving, preferably with me, but leaving. So we moved to the country. This cut me off from the academic life (and nice $72,000 a year paycheck) that I had struggled for years to enter and excel in.
So what? So, It's gone. I'm cut off. My intended life's work is ruined. At 51 I'm an unemployed naval historian with two books and seven refereed journal articles and I can't get an interview for a full-time job at a community college. How painful is this? It's murder. Hurts all the time. No more exciting lectures to give. No more university library at my beck and call. No more access to journals. No more conferences. It's an occasional one-off course and driving a delivery van.
This man has risked a lot to do what he did. He's lost more than many of you will realize. If he can't just crap on the old life and the old profession, please, cut the man a little slack. You don't want to be him.
ahimsa , April 24, 2016 at 7:48 amMr Levy, I am very sympathetic to your situation – long story short, I was in the forefront of the late 70s to the present, layoffs in various industries where I found myself game-fully employed. I too, no longer believe I will ever be employed full time at any job.
But I argue that it is not that the gods do not favour us; it is that we are the outcome of bad gov't policies and unregulated (regulated for the consumer) businesses practices. Hence, my lack of sympathy or willingness to tolerate breast beating (see my April 24, 2016 at 6:44 am posting) by those who put us here.
inode_buddha , April 24, 2016 at 7:57 am@James Leavy
Not sure I follow you?
James A. Kidney, former trial attorney with the Securities and Exchange Commission, retired from the SEC in 2014 at the age of 66 after 24 years working there. Looks like he had a full career, although had to put up with a lot of bullshit, and possibly soured some relationships on his way out.
From Bloomberg: SEC Goldman Lawyer Says Agency Too Timid on Wall Street Misdeeds
Norb , April 24, 2016 at 10:54 amVery similar situation here. Going on 50, unemployed in my chosen field, etc. And yes, its hard to just walk away sometimes… I have to keep my mind focused ahead instead of looking back.
Are there any yacht clubs nearby you? There is like 4 of them within 10 minutes of me (I'm on the Great Lakes) You could teach sailing and rigging no doubt. Bonus: Union crane operators are required to know their rigging – they may need teachers too.
local to oakland , April 24, 2016 at 11:43 amMore than ever, I am convinced the capitalist system needs to be rejected as the means determining how goods and services are delivered. The injustice and inequality generated are too great. Finding a positive expressive outlet for this dissatisfaction will require leadership- and a new vision for the future.
The amount of social damage being inflicted by the elite is almost beyond comprehension. Since they have successfully insulated themselves form the consequences of their actions, they remain aloof and uncaring for the plight of ordinary people, not to mention the health of the planet. This system will continue to cut more and more people off from the benefits of collective social action and effort. The work of the many, supporting the desires of the few cannot stand.
We all have to decide the level of inequality we are willing to live with. How people answer this question will naturally sort them into common communities. Leave the isolated gated communities to the elite. Careerism, like capitalism, is a dead end if your position cannot be guaranteed. The amount of talent and passion for work wasted under the current system is another undercounted fact. Sustainability and democracy are not compatible with capitalism.
Getting mad is only the beginning. The anger must be directed in some productive fashion. Any resistance to the current order must have broad social support and that support only has strength if self-reliant. Building these self-reliant structures is what the future will hold. If the plutocrats can build a world for themselves, why can't the common man. It only takes work,discipline, and control over the means of production.
Workers without power, influence, and the means to obtain life necessities are slaves. Is the best the human mind can conceive a life of benevolent serfdom?
By the way, I believe I would enjoy sitting in on one of your lectures. I'm sure I would learn much- and be a better man for it.
Ben , April 24, 2016 at 10:01 am@James Levy … sorry to hear. I know a few who have been chewed up by the academic meat grinder. I hope you can find a productive outlet for your scholarship. Exile is hard.
I have been helped by the stoics, and Dante.
H. Alexander Ivey , April 24, 2016 at 6:44 amAnd now GS is caught in the middle of 1MDB bond issue scandal using fraudulent and information.
JACK SKWAT , April 24, 2016 at 7:39 am"The explanation of the badger buried in the woodpile is too complicated for the average voter."
That's it! Stop right there! I will not let you (speaking to the author) BS your guilty conscience over my internet link. The average voter clearly knows they are getting screwed, that Wall Street and the voter's own bank is ripping the voter off, and most clearly, that the justice department, from state and local to federal, is enabling this injustice.
You sir, are swimming with sharks. Your morality is "is it legal?", your justification is "for the shareholder". Therefore, you refuse to see the mendacity and instead excuse it for ignorance.
readerOfTeaLeaves , April 24, 2016 at 3:18 pmI know other whistleblowers and internal dissenters who wound up losing their jobs who initially blame themselves, than come to accept that the system in which they operated was fundamentally corrupt, that even if some people locally really were trying to do the right thing, it was bound to either 1. go nowhere, 2. be allowed to proceed to a more meaningful level if it was cosmetic or served some larger political purpose or 3. got elevated because the organization was suddenly in trouble and they needed to burnish their cred in a big way (a variant of 2, except with 3, you might have a something serious take place by happenstance of timing).
Wow, that's a mouthful – and it's only one sentence. Whilst I love your pieces, I've noticed that many of the articles – at least the run up summation to the articles – tend to be written in a stream-of-consciousness style that, frankly, is hard to digest. This seems to be the case more now than in the past. I don't know if you're harried or on an impossible schedule, but could you please make your syntax easier to read? Thanks from a long-time reader and donator.
Yves Smith Post author , April 24, 2016 at 4:25 pmBecause it's a Sunday and I have time to goof off, one potential revision - b/c I believe what Mr Kidney has to say is important enough for me to spend a few minutes on one potential suggestion. I've amended and added what I hope are accurate meanings:
----
Focusing on these as the key subject /verb pairs:
I know (other whistleblowers)
(other whistleblowers) [lost their jobs]
(other whistleblowers) [blamed themselves – initially](other whistleblowers) [finally… accept]
the system in which they operated … [was corrupt]
… even if… (some employees) tried to [be competent](It - there's a problem with 'it' as the subject, because we are unclear what 'it' refers back to - I'll interpret 'it' as 'investigating fraud' ) was bound to…
-------------–I know other whistleblowers and internal dissenters. They wound up losing their jobs.
Initially, they blamed themselves, until they finally came to accept that the system in which they operated was so fundamentally corrupt that they could not retain a sense of their own integrity while working within the organization.Despite the fact that some people really were trying to do the right thing, for reasons that I will explain, investigating fraud was bound to go in one of only three directions:
1. fraud would not be investigated at all,
2. fraud investigation would serve the agency's need for better public relations - in other words, the appearance of fraud investigation would be allowed to proceed, but only if it was merely cosmetic (or served some larger political purpose), or else
3. fraud investigation became temporarily elevated, but only because the organization* was suddenly in trouble – and consequently, needed to burnish its credibility by actually investigating fraud.(Although 3 is a variant of 2, in the third option, credible fraud investigation could occur if, and only if, political necessity enabled competent SEC employees to actually investigate fraud in order to maintain the reputation of the SEC).
[NOTE: *It's not entirely clear here whether 'the organization' is the target business, or whether it is the SEC (which would need to burnish it's cred in the face of bad publicity)]
------------Not sure how close I came to the author's intended meanings, but I thought that I'd give it a shot.
fiscalliberal , April 24, 2016 at 8:13 amThe sentence parses correctly even though it is long. Stream of consciousness often does not parse correctly, plus another characteristic is the jumbling of ideas or observations. The point is to try to recreate the internal state of the character.
For instance, from David Lodge's novel "The British Museum Is Falling Down":
It partook, he thought, shifting his weight in the saddle, of metempsychosis, the way his humble life fell into moulds prepared by literature. Or was it, he wondered, picking his nose, the result of closely studying the sentence structure of the English novelists? One had resigned oneself to having no private language any more, but one had clung wistfully to the illusion of a personal property of events. A find and fruitless illusion, it seemed, for here, inevitably came the limousine, with its Very Important Personage, or Personages, dimly visible in the interior. The policeman saluted, and the crowd pressed forward, murmuring 'Philip', 'Tony', 'Margaret', 'Prince Andrew'.
More generally:
The Stream of Consciousness style of writing is marked by the sudden rise of thoughts and lack of punctuations.
The sentence may be longer than you like but this is not stream of consciousness. A clear logical structure ("first, second, third") is the antithesis of stream of consciousness.
Yves Smith Post author , April 24, 2016 at 4:30 pmI fail to see why fraud is not prosecuted. We can get cute with fancy words but fraud is clear and simple. Also – Enron results in SARBOX which seems to be clearly ignored. Yves – do we know of any SARBOX prosecutions? Clinton started deregulation, Bush implemented deregulation and Obama maintains it. No wonder the kids are mad. The financial industry makes the Koch brothers look like pikers.
afisher , April 24, 2016 at 9:22 amThere is actually a high legal bar to prosecuting fraud.
I have written at length re Sarbox and the answer is no. And under Sarbox, you don't need to prosecute, you can start with a civil case and flip it to criminal if you get strong enough evidence in discovery. There was only one case (IIRC, with Angelo Mozilo) where the SEC filed Sarbox claims, one in which it also filed securities law claims. The judge threw out the Sarbox claims with no explanation. I assume it was because the judge regarded that as doubling up: you can do Sarbox or securities law (the claims to have some similarity) but not both. But the SEC as it so often does seems to have lost its nerve after that one.
diptherio , April 24, 2016 at 9:48 amInterestingly, the SEC has been warned about more of the same type of fraud: https://www.sec.gov/comments/s7-16-15/s71615-60.pdf
I don't know if an election would have consequences and if a new administration headed by Sanders would make it the SEC more responsible to the taxpayers and not the investors / banks.
It only took a decade for Markopolos to have his ponzi scheme information read by SEC.
diptherio , April 24, 2016 at 9:59 amI want to like this guy, I really do. But then he goes and says stuff like this:
The most senior level supervisors left more lucrative jobs in the private sector to head the Division of Enforcement, taking plum jobs but at significant personal sacrifice. (They then returned to even more lucrative employment or even more high-profile public positions.) All of them were gentlemen. These factors make it all the more surprising that I never got a clear answer as to why the investigation was so constipated, as it obviously was.
So he doesn't understand how the revolving door works…or he does but he's being purposefully obtuse about it. Sacrifice my ass! Gentleman my heiny! And claiming that there's no proof of criminality when, as is pointed out above, Sarbanes-Oxley was obviously violated isn't helping things either.
Listen dude, pick a side. It's either the American people or Wall Street crooks and their abettors in government. You don't get to have it both ways. This kind of minimization and wishy-washyness is only helping the crooks. More disappointing than I exepected.
polecat , April 24, 2016 at 1:37 pmI mean, at least he lays blame at Obama's feet, and calls the fraud what it is: fraud. Good on him!
…But then he pulls out the "vote for Dems no matter what they do!" line and I just shake my head….
diptherio , April 24, 2016 at 5:18 pmdiptherio……. excuse me for a momen--BARFFFF!!!!!!-- Whew ……… that felt better !! ……….
yes …I agree….these kinds of articles are nothing more than defensive measures against a growing public rage !!!
bu…bu…but Just Us !!
polecat , April 24, 2016 at 6:07 pmthese kinds of articles are nothing more than defensive measures against a growing public rage !!!
I don't actually agree. I think the guy feels a little guilty for not doing more, now he's trying to salve his conscience. Still, he can't quite bring himself to admit that the people he was working for may well have been criminals. They were just so nice!
Self-reflection is not comfortable, and most people don't have much tolerance for it. I think this guy's legitimately trying to do the right thing (not cover up for criminality) it's just that it's really psychologically difficult to admit certain aspects of reality. It's not like he's the only one.
reslez , April 24, 2016 at 7:09 pmI find it telling that suddenly now (within the last year or so) that all these people ( people in high finance, their underlings, traders, hedge funders, and other assorted enablers of massive fraud upon the general public, are suddenly having a 'come to hayzeus' epiphany! I'm not buying whatever faux sincerity they're trying to project…….
They've screwed millions of trusting people with their fraudulent grifting!
perpetualWAR , April 24, 2016 at 11:32 am> I find it telling that suddenly now (within the last year or so) that all these people […], are suddenly having a 'come to hayzeus' epiphany!
Especially when it comes after a fat retirement and a lengthy career of going along. I have much more respect for people who really did put their daily bread on the line, and there are plenty of those people, a lot of whom Obama sent to jail. So, yeah, great, you finally told the truth… but where were you when the country needed you to speak out?
diptherio , April 24, 2016 at 12:59 pmHow about where the guy said "until proven guilty, they are innocent." Hahahahahahaha
Crooks, the lot of them.
polecat , April 24, 2016 at 1:42 pmCouldn't we use civil forfeiture to go after them regardless of whether we can prove any actual crime? What's good for the average citizen is surely good for the elite banker…
reslez , April 24, 2016 at 7:06 pm…but you just might need some of those 'Yehadis' to back you up ;-)
ChrisPacific , April 26, 2016 at 12:36 amIt's a good thing they're gentlemen. I don't know if I could handle all the looting and self-dealing if it came from common ruffians. Truly we are fortunate to be in such hands, my fellow countrymen!
Lars Jorgensen , April 24, 2016 at 10:00 amYes, I had trouble getting past that line as well. Either he is being ironic or he has a massive blind spot on that point.
polecat , April 24, 2016 at 1:45 pmAccording to Bill Black in a ted talk 2014. After the Savings and loans debacle, where the regulators went after the worst of the worst criminals, they made 30.000 criminal referrals and 1000 procecutions with a 90% succes rate.
Now after the 2008 crisis, which was 70 times bigger causing 10 million job losses and costing 11 trillion dolllars, the Obama administration has not made one single criminal referral. https://www.youtube.com/watch?v=-JBYPcgtnGE
Today I fell over some information about the IMF, that the organization is exempt from legal prosecutions and taxes. Can this be true?
From the article: "The employees who bare the IMF badge are pretty much exempt from all forms of government intervention. And, according to LisaHavenNews, the IMF "law book," the Articles of Agreement lists the reasons and requirements for exclusion from government mandate."
Steve in Dallas , April 24, 2016 at 2:35 pm…..criminals are, as criminals do, as criminals take…..
lightningclap , April 24, 2016 at 4:48 pmThank you, I was hoping someone would mention Bill Black.
I'm a software/hardware product/business development engineer. In 2008, after 20 years of reading the WSJ and stunned by the sellout to Murdoch, I went to the internet independent media (IM) to follow the 'economic crisis'. Within a few months it was clear to me 1) I had learned nothing of substance reading the WSJ, 2) the U.S. MSM, education system, and government are thoroughly captured/corrupt.
Being a 'reader' (note: I don't know anyone who reads non-fiction) for me this 'worldview transition' was quite natural, nothing really surprised me, and it was a big relief to discover such good information/analysis so easily available on the internet. However, eight years later, I have yet to meet a single person who has rejected the MSM or tuned in to what's happening, via the IM or otherwise. In fact, after leaving the university in 1990, I have yet to meet a single person with any basic understanding of (or the slightest interest in, or concern about) the extreme institutional criminality of the the Savings & Loan Crisis, Asian Economic Crisis, Technology Bubble, the 2008 crisis, or the many economic/military wars-of-aggression methodically destroying one government/economy/country after another.
To me, nothing made the global/economic/organized/mafia criminality more clear than the 2008/2009 articles by Bill Black. Back then I again foolishly assumed people would rally behind Dr. Black to reestablish basic law enforcement against yet another obvious largest-ever "epidemic" of organized crime. Looking back, the highly organized (and very successful) criminality of the Paulson/Obama/Geithner/Bernanke/etc. cabal was truly an amazing operation to behold. Perhaps the most shocking news came in 2010 when numerous studies confirmed that the top 7% of Americans had already "profited" from the economic crisis, that the criminally organized upper class had not only increased their net wealth but, more importantly, had increased their rate of wealth accumulation relative to the bottom 93%. Still, to me, infinitely more amazing, the bottom 93% didn't, and still don't, seem to care, or if they do, they've done absolutely nothing to even start to fight back.
Today, when reading these articles, I'm astounded how completely meek and 'unorganized' the bottom 93% are compared to the extremely vicious and organized top 7%. Year after year the wealthy elite, who's core organizing philosophy is "take or be taken, kill or be killed", increasingly wallow in dangerously high and unprecedented levels of wealth accumulated by blatant/purposeful/methodical/criminal/vicious looting while their victims, the bottom 93% 'working class', do absolutely nothing (what are they doing?…. other than playing with their phone-toys, facebook, video games, movies?). At this point, the main (only?) reason I continue to 'read' is to perhaps someday 'behold' the working class 93% attempting to educate themselves and consequently 'organize' to defend themselves.
diptherio , April 24, 2016 at 5:21 pm+1
lyman alpha blob , April 24, 2016 at 10:11 amDude, you need to move to Austin, stat!
Carolinian , April 24, 2016 at 10:25 amI sympathize with Mr. Kidney and applaud him for doing what he can to try to rectify this abhorrent situation. I also applaud him for placing the blame squarely on Obama and his reasons for doing so are solid.
What I find much harder to understand is why he would vote for Obama even in 2012 after it became apparent that Obama was ultimately responsible for stonewalling his investigation, and his complete willingness to vote for the corrupt Democrat party no matter what going forward.
As long as enough people continue to have that attitude things will never change until the whole system comes crashing down. I'd much rather see an FDR-type overhaul of the system rather than a complete collapse as I'm rather fond of civilization. But I've come to expect the latter rather than the former so I'll be reading my weekly Archdruid report for the foreseeable future.
Alex morfesis , April 24, 2016 at 12:31 pmThe most senior level supervisors left more lucrative jobs in the private sector to head the Division of Enforcement, taking plum jobs but at significant personal sacrifice. (They then returned to even more lucrative employment or even more high-profile public positions.) All of them were gentlemen. These factors make it all the more surprising that I never got a clear answer as to why the investigation was so constipated, as it obviously was.
Yes poor babies for that "significant personal sacrifice" that resulted in "even more lucrative" private employment. The author explains the problem then scratches his head over what it might be.
In a rational world there would be a strict separation between the regulated and the regulators. The government would hire professional experts at decent salaries and they never ever would be allowed to then move on to jobs with the regulated. Clearly the assumption underlying our current–irrational–system is that these high status technocrats are "gentlemen" with a code of honor. Welcome to the 19th century. Those long ago plutocrats in their stately English mansions were all gentlemen and therefore entitled to their privileges by their superior breeding. They were the better sort.
Meanwhile for lesser mortals it seems totally unsurprising when laws are ignored because you hire your police from the ranks of the criminal gangs. No head scratching needed.
susan the other , April 24, 2016 at 1:25 pmReid Muoio (boss of kidney @ $EC) has a brother at a major tall bldg law firm whose job is to help fortune 500 companies deal with D & O insurance issues…so when in the article Muoio says "He" did not go thru the revolving door…it was fraud by omission…his brother sits on the opposite side of these private settlement agreements…
so is Kidney unaware…leaving us to maybe accept he was never much of an investigator…or just forgot to point it out for us…
The world is full of govt types who tell us TINA…
The wealthy Elliott Spitzer told us he would have loved to help "the little people" but the OCC and then scotus with waters v wachovia…except scotus ruled only direct subsidiaries get protection and the OCC specifically said the trustee operations of OCC regulated entities are also not covered/protected…
A really big shoe
as Ed used to remind us….cnchal , April 24, 2016 at 2:03 pmDoes anyone else think this was insider demolition – not just the failure to prosecute, but the whole financial implosion in the first place? Who writes up nothing but "shitty deals" – all the while saying to each other: IBGYBG and survives to slink away? They must have had a heads up that the financial system as we had known it in the 20th c. was done. They had a heads up and then they got free passes. My only question is, Wasn't there a better way to bring down the system, an honest way that protected us all? By the end of the cold war money itself had become an inconvenience because of diminishing returns. And now the stuff is just plain dangerous because everyone who got screwed (99%) wants their fair share still. It is paralyzing our thinking. Obama maintains he personally "prevented another depression". I honestly think he might be insane. What we need is a recognition that the old system was completely irrational and it isn't coming back. And most of us are SOL. Somebody is going to figure out how to maintain both the value and usefulness of money very soon, because we've got work to do.
polecat , April 24, 2016 at 2:10 pmThe GFC was the first great financial crime of this millenium, and Goldman Sachs was at the epicenter. A heist of gargantuan proportions, they didn't even need a safecracker after Bernanke spun the dials and opened the door wide.
Imagine if the FBI and the Mafia exchanged their top leaders every few months. That's what we have here with the SEC and Wall Street.
Bernie Sanders: The business of Wall Street is fraud and greed.
We can add to that. The business of the SEC is to provide cover.KYrocky , April 24, 2016 at 2:17 pmIt's all about 'their protection'….not ours!
and Obama………..
He's a f#cking psychopathic peacock!
readerOfTeaLeaves , April 24, 2016 at 3:31 pmIn Yves intro she shares her views, first, that Kidney still wants to think well of his former SEC colleagues and his criticisms seem muted relative to the severity of the problems, and second, that there are class assumptions at work.
The first is obvious, as the SEC is an utter failure in its responsibility to investigate and prosecute financial criminals. While Mr. Kidney devotes a fair amount of his passages pondering how it can be that no individuals within these financial institutions bear personal responsibility, Mr. Kidney fails to see the SEC through that same lens. To say Kidney's criticism of his coworkers is muted is an understatement. The individuals at the SEC are corrupt. The individuals at the Justice Department are corrupt. Probably all nice people: husbands, wives, fathers, mothers, friends, etc. Just like those folks at the financial institutions. Mr. Kidney cuts them slack because of his personal relationships with them. Mr. Kidney chooses to give them the benefit of doubt when the totality of their professional performance at the SEC make clear this cannot be true.
With respect to class assumptions at work, Yves illustrates with the deference shown by SEC officials and investigators toward these financial criminals and their presumption that these individuals are honest. Mr. Kidney does share some of his disappointment in President Obama and Obama's administration but fails to properly connect the dots. In short, the lack of financial crime prosecutions is the result of a deliberate, planned and orchestrated effort.
Mr. Kindney's investigations were prevented in going forward by his superiors. He was never given an explanation for this despite his asking. But Kidney believes his superiors are all good people.
No, they are not. They are compromised people who have placed their career employment above their sworn duty. The fact that their bosses have done the same, as have those in the Justice Department as well as President Obama, should not diminish this fact. The phrase "class assumptions" is too euphemistic when describing a system where there is no justice for the victims of financial crimes, a system where the Justice Department and Administration coordinate to shield financial criminals based on where they work.
This is America. In today's America the fact is certain individuals are above the law because our elected officials at all levels accept that this is okay. Victims of these individuals will be prevented access to their legal recourse, and that these criminals are protected from the highest level of our government down. This goes way, way beyond class assumptions.
flora , April 24, 2016 at 2:37 pmYves has written extensively about how corporate interests have funded academic sinecures, as well as continuing legal education seminars attended by attorneys and judges. This is part of the fallout; if you want more, check out her section of ECONned where she explains how legal thinking was perverted by business interests.
dk , April 24, 2016 at 2:55 pmThanks for this post. Glad to see the SEC story is still alive. I'm sure the SEC and Obama would prefer it quietly go away.
Synoia , April 24, 2016 at 3:37 pmAs someone who has fallen on their sword more than once (and again recently), I just want to say that "placed their career employment above their sworn duty" is accurate but also oversimplifies the situation.
People with families tell themselves that they balance performance of most (some?) of those duties, while shirking the balance in order to protect their families (a "good" (as in, expensive) college for the kids)… this actually comes down to sustaining their social status, in a culture (political as well as corporate) where loyalty is valued equal to and above performance, and honorable action is diminished, trivialized, even ridiculed; and not just within the context of the financial industry.
This is not at all a defense of the choice, but the choice is made in a very class-stratified social context, and arises in that general context. People take out loans to buy cars and houses, they squirrel earnings away into investments (to avoid taxes) which they are reluctant to draw from… they feel less ready to abandon their addictive income streams for honor, and fudge their responsibilities. It's not isolated to regulators, or government, or even finance. It occurs so constantly and on so many fronts that addressing specific cases doesn't make a dent in the compromise of the entire culture. And that compromise is fueled and maintained by a very twisted set of ideas about money, and career, and social status (not to mention compromises in journalism, education, science, you name it).
polecat , April 24, 2016 at 6:12 pmI read Mr kidney as being very sarcastic. I could not write this with a serious sarcastic (Lawsuit Avoiding) view:
The most senior level supervisors left more lucrative jobs in the private sector to head the Division of Enforcement, taking plum jobs but at significant personal sacrifice. (They then returned to even more lucrative employment or even more high-profile public positions.)
taking plum jobs but at significant personal sacrifice
Oh really? Must have hurt. And from a legal point of view does not appear libelous.
Yeah…stubbed toes only…….
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March 14, 2011 | Health.com
With unemployment still high, job seekers who have been discouraged by a lack of work might be inclined to take the first opportunity they're offered. That will help pay the bills, but it could cause other problems: A new study suggests that some jobs are so demoralizing they're actually worse for mental health than no [...]
With unemployment still high, job seekers who have been discouraged by a lack of work might be inclined to take the first opportunity they're offered. That will help pay the bills, but it could cause other problems: A new study suggests that some jobs are so demoralizing they're actually worse for mental health than not working at all.
The findings add a new wrinkle to the large body of research showing that being out of work is associated with a greater risk of mental health problems. In the study, which followed more than 7,000 Australians over a seven-year period, unemployed people generally reported feeling calmer, happier, less depressed, and less anxious after finding work, but only if their new jobs were rewarding and manageable.
"Moving from unemployment to a poor-quality job offered no mental health benefit, and in fact was more detrimental to mental health than remaining unemployed," says the lead author of the study, Peter Butterworth, PhD, a senior research fellow at the Centre for Mental Health Research at the Australian National University, in Canberra.
The study was published in the journal Occupational and Environmental Medicine.
Butterworth and his colleagues analyzed data from an annual survey in which participants described their mental state, their employment status, and-for those with a job-details of the working conditions that they enjoyed (or didn't enjoy, as the case may be). The survey respondents were asked how strongly they agreed with statements such as "My job is complex and difficult" and "I worry about the future of my job."
The researchers focused on four job characteristics that are closely linked with mental health: the complexity and demands of the work, job security, compensation, and job control (i.e., the freedom to decide how best to do the job, rather than being ordered around).
Unemployed people who found a job that rated well in these areas reported a substantial improvement in their mental health. By contrast, newly employed people who felt overwhelmed, insecure about their employment, underpaid, and micromanaged reported a sharp decline in their mental health, including increased symptoms of depression and anxiety. Even those who couldn't find a job fared better.
This last finding was "striking," Butterworth says. "This runs counter to a common belief that any job offers psychological benefits for individuals over the demoralizing effects of unemployment."
Although certain types of jobs-such as working in a customer-service call center-are more likely to be downers, the working environment tends to have a greater impact on mental health than the job description itself, Butterworth adds.
Managers are especially important to employee well-being, says Robert Hogan, PhD, an expert on personality in the workplace and a former chair of the department of psychology at the University of Tulsa. "Bad bosses will make anybody unhappy," Hogan says. "Stress comes from bad managers."
Policymakers should address the impact that the workplace has on mental - and not just physical - health, Butterworth says. "In the same way that we no longer accept workplaces that are physically unsafe or in which employees are exposed to dangerous or toxic substances, there could be a greater focus on ensuring a more positive psychosocial environment at work."
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April 01, 2016 | Economist's View
Dean Baker:Unemployment Rate Edges Higher as Prime-Age Workers Re-enter Labor Market : Self-employment has risen substantially since the ACA took effect.The economy added 215,000 jobs in March, with the unemployment rate rounding up to 5.0 percent from February's 4.9 percent. However, the modest increase in unemployment was largely good news, since it was the result of another 396,000 people entering the labor force. There has been a large increase in the labor force over the last six months, especially among prime-age workers. Since September, the labor force participation rate for prime-age workers has increased by 0.8 percentage points. This seems to support the view that the people who left the labor market during the downturn will come back if they see jobs available. However, even with this recent rise, the employment-to-population ratio for prime-age workers is still down by more than two full percentage points from its pre-recession peak. Another positive item in the household survey was a large jump in the percentage of unemployment due to voluntary quits. This sign of confidence in the labor market rose to 10.5 percent, the highest level in the recovery to date, although it's still more than a percentage point below the pre-recession peaks and almost five percentage points below the peak reached in 2000.
Other items in the household survey were mixed. The number of people involuntarily working part-time rose by 135,000, reversing several months of declines. However, involuntary part-time work is still down by 550,000 from year-ago levels. The number of people voluntarily working part-time fell in March, but it is still 654,000 above its year-ago level.
One of the desired outcomes from the ACA was that it would free people from dependence on their employer for health care insurance, allowing them to work part-time or start a business if they so choose and get insurance through the exchanges. There has been a substantial rise in self-employment since the exchanges began operating in 2014. In the first quarter of 2016, incorporated self-employment was up by more than 400,000 (7.8 percent) from the same quarter of 2013. Unincorporated self-employment was also up by almost 360,000 (3.9 percent).
While the employment growth in the establishment survey was in line with expectations, average weekly hours remained at 34.4, down from 34.6 in January. This indicates that February's drop in hours was not just a result of bad weather. As a result, the index of aggregate hours worked is down by 0.2 percent from the January level. This could be a sign of slower job growth in future months. ...
The average hourly wage rose modestly in March after a reported decline in February. There is zero evidence of any acceleration in wage growth. The average for the last three months increased at an annualized rate of 2.3 percent compared with the average of the prior three months. This is virtually identical to the increase over the last year.
On the whole this is a positive report, both because the economy continues to create jobs at a healthy pace and even more importantly because it indicates that people are returning to the labor market. The continuing weakness in wage growth is discouraging, but also should signal to the Fed that there is little reason to raise interest rates.
PPaine :
The job markets are coming alivePPaine -> PPaine ...But is the punch bowl headed for the kitchen sink ?
We need to set much higher target ratios for E to PWe need 15 million more jobs in short order
To get near vickrey zone conditions on job markets
Obviously we won't go there
But just how far will we go
Before the bastards turkey wire the system ?We need the quit rate to go up another 30% at leastPPaine -> PPaine ...I mean on top of the 50% rise to match the high water mark of the Clinton miracleanne -> PPaine ...https://research.stlouisfed.org/fred2/graph/?g=3Ppzanne -> PPaine ...January 30, 2016
Total nonfarm quits, 2000-2016
[ The quits rate only needs to climb 15% to get back to the Clinton level. ]
Never ever explain what "Vickrey zone conditions" are, as long as there is no concern with being understood.RC AKA Darryl, Ron -> anne...[Google William Vickrey. Highlights of Wikipedia:]RC AKA Darryl, Ron -> RC AKA Darryl, Ron......Vickrey's economic philosophy was influenced by John Maynard Keynes and Henry George. He was sharply critical of the Chicago school of economics and was vocal in opposing the political focus on achieving balanced budgets and fighting inflation, especially in times of high unemployment...
Selected works[edit]"Counterspeculation, Auctions, and Competitive Sealed Tenders", Journal of Finance, 1961. The paper originated auction theory, a subfield of game theory.
"Fifteen Fatal Fallacies of Financial Fundamentalism: A Disquisition on Demand Side Economics". October 5, 1996.Arrow, Kenneth Joseph; Arnott, Richard J.; Atkinson, Anthony A.; Drèze, Jacques (editors) (1997). Public Economics: Selected Papers by William Vickrey. Cambridge, UK: Cambridge University Press. ISBN 0-521-59763-3.
Warner, Aaron W.; Forstater, Mathew; Rosen, Sumner M. (editors) (2000). Commitment to Full Employment: The Economics and Social Policy of William S. Vickrey. Armonk, N.Y: M.E. Sharpe. ISBN 0-7656-0633-X.
Pavlina R. Tcherneva; Forstater, Mathew (2004). Full Employment and Price Stability: The Macroeconomic Vision of William S. Vickrey. Edward Elgar Publishing. ISBN 1-84376-409-1.
[Paine repeatedly references William Vickrey because of his substantial commitment to full employment policy as sound economics (as if human well being for the masses actually mattered).]
And Anne repeatedly asks "What does this reference to Vickrey mean?" Maybe Anne's battery is almost dead and working memory gets reset each time the solar generator powers down. The programming still functions because it is stored in non-volatile memory on the hard drive, but volatile RAM is wiped each time that the sunsets after the battery storage is exhausted.anne -> PPaine ...We need 15 million more jobs in short order. To get near Vickrey zone conditions on job marketspgl :[ Where did the 15 million number come from, and I still have no idea what Vickrey zone conditions are? ]
Yes labor force participation has increased but it still is only 63%. Yes the employment to population ratio is now 59.9% but it should be 62%. Slow progress with a long way to go.pgl -> pgl...I may be setting the bar too low with my call for a 62% employment to population ratio. Brad DeLong puts it north of 62.5%:New Deal democrat :But the negatives, especially among the series that lead, are beginning to outweigh the positives. Revisions were mixed. The manufacturing workweek declined, and manufacturing jobs are now down YoY. Although temporary jobs rose this month, they have failed to top their December peak for the last 3 months. Short term unemployment has continued to rise slightly. A coincident indicator, aggregate hours, also failed to exceed its January high. So while we can cheer yet another month of jobs added to the economy, and the jump in participation, this report just adds to my concern about next year.pgl -> New Deal democrat...I won't cheer until the employment to population ratio reaches 62% and real wages actually rise on a consistent basis.sanjait -> New Deal democrat...Don't look at peaks in monthly data, look at rolling average trends.sanjait :Also, while manufacturing specific data can be meaningful ... these days the dynamics in those data are largely dominated by swings in O&G, which is in a historic funk.
In general, the trends look good. The working age E/P number is, to me, the most meaningful single indicator we have, and it appears to be continuing to rise and at an accelerating rate. That's a very good sign. It's very arguable that things could and should be improving at a faster rate, but when this stat is rising things are indeed improving.Ben Groves :Baker's note about ACA and self-employment is also an important one. One important aspect of ACA is that it is GREAT for entrepreneurship. People are more free to leave jobs and start companies when their ability to get health insurance isn't predicated on their working for a large company with a group plan.
The GOP makes a lot of noise about how ACA supposedly kills jobs and stifles industry, but the reality is that tomorrow's tech leaders, and major employers, are getting a boost today from ACA.
It is not sustainable and will reverse in April imo. Driving unemployment down.
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www.nakedcapitalism.com
Posted on April 1, 2016 by Yves Smith By C.P. Chandrasekhar, Professor of Economics, Jawaharlal Nehru University, New Delhi and Jayati Ghosh, Professor of Economics and Chairperson at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. Cross posted from Triple CrisisMuch has been made of how there has been a substantial shift in the balance of economic power between the advanced capitalist economies (or the "North") and some economies of the global South. It is true that very recently the hype surrounding "emerging markets" has died down, as international capital flows have swung away from them and many of them have shown decelerating growth or even declines in income as global exports fall. Nevertheless, the feeling persists that – in spite of a supposedly resurgent US economy – the advanced economies are generally in a process of relative decline, while the developing world in general and certain economies in particular have much better chances of future economic dynamism. And this process is generally seen to be the result of the forces of globalisation, which have enabled developing countries, especially some in Asia, to take advantage of newer and larger export markets and improved access to internationally mobile capital to increase their rates of economic expansion.
Chart 1
But how significant has this process actually been?
In fact, there has definitely been some change over the past three and a half decades, but it has been more limited in time than is generally presumed. Chart 1 plots the share of the advanced economies in global GDP in current US dollar prices, calculated at market exchange rates. (Data for all the charts have been taken from the IMF World Economic Outlook October 2015 database.) This shows that the share of advanced economies declined from around 83 per cent in the late 1980s to around 60 per cent now, which is really quite a substantial decline. However, the bulk of this change occurred in a relatively short period: the decade 2002 to 2012, when the share dropped from 80 per cent to 62 per cent. The periods before and after have shown much less variation, and indeed, the share seems to have stabilised at around 61 per cent thereafter.
Chart 2 looks at the obverse of this process – the change in the shares in global GDP of the major developing regions, with China treated as a separate category on its own. This shows a somewhat more surprising pattern, because it indicates that the dominant part of this shift is due to the increase in China's share, which rose from around 3 per cent to more than 15 per cent. Once again, this happened essentially during the decade after 2005, when the share of China in global GDP at market exchange rates jumped by more than ten percentage points. Indeed, the change in China's share alone explains 87 per cent of the entire decline in the share of the advanced economies in the period 1980 to 2015. Considering only the last decade, that is after 2005, the relative increase in China's GDP accounts for a slightly lower proportion of the change, at 67 per cent – which is still hugely significant.
Chart 2
The change in shares of other regions provides some interesting insights. The Latin American region experienced a medium term decline in relative income share over the 1980s (the "lost decade"), recovered somewhat in the 1990s before declining once again in the late 1990s and early 2000s. The global commodity boom of 2003 onwards was associated with a revival in the region's economic fortunes and the share of the region increased from 5 per cent in 2003 to more than 8 per cent in 2011, but thereafter it has stagnated and fallen with the unwinding of that boom.
The income share of the MENA region (Middle East and North Africa) appears to be very strongly driven by global oil prices, with sharp peaks in period of high oil prices and stagnation or decline otherwise, and over the entire period there has been a stagnation in income share rather than any increase. An even more depressing story emerges for Sub Saharan Africa, which showed decline in income share for a prolonged period between 1980 and 2002, and subsequently a slight recovery (from 1.1 per cent in 2002 to around 2 per cent in 2012 and thereafter) that was still well below the share of more than 3 per cent in 1980.
The only developing region that shows a clear increase is developing Asia, which in this chart excludes China to clarify the respective significance of both. But the increase in the income share of this region (minus China) has been much less marked than that for China, and most of it occurred after 2002, as the income share rose from 3.5 per cent in 2002 to 6.4 per cent in 2015.
Chart 3
Chart 3 indicates the changes in shares of the largest Asian developing countries other than China. It is evident that in terms of increasing share of global GDP, India has been the most impressive performer over the past decade in particular, with its share increasing from 1.8 per cent in 2005 to 3 per cent in 2015. Note, however, that this is still tiny in comparison to China, and indeed, just the increase in China's share over that decade has been more than three times of India's aggregate share. South Korea's share has also increased, mostly over the 1980s and early 1990s, while Indonesia's share increase occurred mostly during the commodity boom of the 2000s.
In terms of per capita GDP, however, the Indian performance looks much less impressive than those of the major Asian counterparts. Interestingly, even the Chinese experience appears not as sharply remarkable, although still hugely better than that of India. Chart 4 tracks the movements of per capita GDP, measured now in Purchasing Power Parity (PPP) exchange rates rather than market rates. There are numerous problems with the use of the PPP measure, but for current comparative purposes it does provide some kind of indicator. This shows that by far the most impressive performance in terms of increasing per capita GDP has been in South Korea, followed by Malaysia. India shows the least improvement among these five economies, despite its apparently more rapid increase in terms of share of world GDP in the last decade.
Chart 4
Overall, therefore, while the world economy has changed over the past three decades, this change should not be exaggerated for most developing regions, or even for most countries in what is apparently the most dynamic region of Asia.
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SKL , April 1, 2016 at 10:19 am That China accounts for almost all of the shift isn't so much new news, as repeatedly memory-holed news. It's not surprising that it keeps going down the memory hole, as it completely destroys the case for the neoliberal policy consensus that China flouted over that period.
Every talking head who extolls the Washington Consensus for "lifting the poor of the world out of poverty" is a stone cold liar. The real goal of "globalization" isn't general prosperity, it's the continued domination of "us" over the "lesser breeds".
paul , April 1, 2016 at 11:58 am It is the bringing the advantages of the third world to the others.
Why should we get paid more than them?
Look at all the billionaires that were lifted out of poverty in these countries.cnchal , April 1, 2016 at 2:11 pm Why should we get paid more than them?
Our useless eaters get much more than their useless eaters,
PPP is a scam. To someone displaced here, it matters zero that the worker in Mexico, for example, can get by on one tenth the wage that used to be payed to someone here.
Look at all the billionaires that were lifted out of poverty in these countries.
Look at the billions that did all the lifting. They still make as close to zero as you can get.
Imagine for a moment, Tim Cook does the underground boss thing and sneaks himself into the Foxconn factory for a spot on the assembly line for a month. If he could get by the first few days and not scrap too many phones, and become proficient and last the whole month at 60 hours a week, what do you think his pay for this work would be? Would you like your monthly pay to match it?
paul , April 1, 2016 at 3:04 pm I wasn't being entirely serious, but my point was.
Other people work for sweet FA and so why shouldn't you?
This is the question technocrats have been tearing other peoples hair out for the last 40 years
Because…free markets have been the historical engine of common wealth…who cares if all the evidence points to the contrary.
I recognise the inversion of the pyramid of life in my little comment.
I do not believe the overclass are struggling manfully to support the rest of us through their own, thankless philanthropy.
Ranger Rick , April 1, 2016 at 10:20 am Thanks to multinationals being effectively stateless due to tax arbitrage games, who actually has global economic power but the corporations themselves?
James Levy , April 1, 2016 at 3:45 pm In the end, the States do, because the corporations need the military and other coercive power of States to enforce contracts and extract their pounds of flesh. The USA has the world largest GNP (or GDP, I can never keep the two straight although when I was a kid in the 1970s, it was GNP) and the world's most destructively powerful military (it may not be able to "defeat" you, but it can make you wish you had never screwed with Uncle Sam). GNP backstops military power and other nasty forms of coercion. Poor countries simply can't throw their weight around effectively in what is still an international jungle. Rich ones can.
Dr. Roberts , April 1, 2016 at 12:50 pm It'd be interesting to see what Chart 2 looks like if measured in PPP rather than at market rates. It might demonstrate how much the structure of global markets effects the valuation of production, and how not-flat the globalized economy is. I'd like to see measures other than GDP as well, especially industrial commodities, capital goods, automobile, and shipping production. When it comes down to it where does the industrial capacity actually reside, and how has this shifted over the years?
Jim Haygood , April 1, 2016 at 1:47 pm Since April 2011 - nearly five years ago - commodity prices have fallen a harrowing 48%, measured by the CCI-TR index. Over the same period, the US dollar index (DXY) rose almost 30%.
These two trends contributed to the recent flattening out of developing economy gains in GDP share, measured in USD.
Commodities are sufficiently depressed that on a valuation basis, a turnaround might be expected, and indeed may already have commenced in the CCI's 5.7% rise from its 15 Jan 2016 low.
In a more favorable global macro environment, developing economies likely will gain more relative GDP share over the next five years than they did in the headwinds of the past five.
susan the other , April 1, 2016 at 4:19 pm That's a logical premise and it implies that developing countries, with a sparse and elitist infrastructure, will be the ones to do big new infra that promotes equality and stability, but do not waste their opportunity to balance their economies by using old ideas about investing in all the mistakes and boondoggles of neoliberalism… etc. This opportunity is part of a global power shift which demands environmental cooperation. Just personally hoping all the carpet baggers go directly to jail.
ke , April 2, 2016 at 12:09 am The obamacare mandate will go down as the straw that broke the camel's back, and Chinas printing will reverse, with scant more to show for itself than Japan's push behind the internet.
Pushing government religion is one thing; mandating participation is another.
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peakoilbarrel.com
Heinrich Leopold, 03/29/2016 at 3:09 am
Paulo,As the witch hunt on the rich still goes on feverishly, people forget that an economical successful society needs trailblazers like McClendon. A society must be open to extreme characters for good and bad as these people stir up the pond and keep the wheels running. The current process in society of reverting to the mean, when only incompetent bureaucrats can earn big money combined with a top down centralized decision making process will make society much poorer over time.
Society must allow concepts and new ideas through a bottom up process managed by exceptional individuals like McClendon. The European Union -which becomes more and more a top down society similar to the Sowjet Union – and especially France are already good examples how fast a society can vanish through a centralized approach holding down individual activity.
This has been even recognized by China when Deng Xiao Ping famously said: 'Unfortunately we have to allow some people to become millionaires.' Should centrists get its grip to power, millionaires will be poorer and the poor will not be richer. It is not that Cuba becomes the new USA, it will turn the US into the new Cuba.
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Alberta Oil Magazine
How to Lay Off An Employee - the Right WayCompanies that fought to attract and keep staff have been learning the hard way how to shed them in a hurry. But that doesn't mean it can't – and shouldn't – be done right
One day last October, when employees at Cenovus Energy showed up at the office, many discovered that they couldn't access their computer files on the company's internal system. That's how they found out they were being laid off. Two months earlier, employees at Hutchison Ports Australia in Sydney and Brisbane got a text message, then an email in the middle of the night inviting them to a beachside hotel. They, too, were being laid off.
Cenovus called its move a mistake. Hutchison Ports Australia said it had begun its consultations with staff and unions regarding redundancies in June. Whatever the explanation, companies need to start approaching layoffs more carefully. And though everyone in the energy business is hoping the bloodletting is over, if it isn't, there are ways to soften the blow of layoffs, and do them fairly and transparently.
Communication
A company should keep its employees informed of the economic forces acting on the business and their employment prospects, says Martin Birt, president of HRaskme.com and a human resources consultant with 30 years in the business. "Closures should never, in my view, be a surprise," he says. Neither should layoffs. You can communicate messages with your employees such as how decisions will be made in what Birt calls a "long-game communications plan," a set of HR principles that will be applied should anything be decided regarding the company's long-term employment potential. That way, employees have some context as to what to expect when market circumstances change.
If you choose not to share your long-game communications plan in your employee manual, when speaking to the people you're laying off, at least communicate how, why and when you made the decision, Birt says. Your actions will get back to suppliers, contractors and layoff survivors. And if you've communicated fairly and awarded appropriate compensation and benefits, the external environment will understand what kind of corporate citizen you are.
Listen to Your Experts
Involve the correct teams – operations, human resources and legal – and involve them as early in the decision-making process as possible, says Birt. These teams will protect you as a corporation from any liability associated with a layoff.
Soften the Blow
Henry Hornstein is an assistant professor at Sault Ste. Marie, Ontario's Algoma University, specializing in organizational change management. In the early 1990s, he was among the staff let go from Imperial Oil's Strathcona refinery. "It was not pleasant," says Hornstein, "but the way Imperial Oil handled that at the time cushioned the blow." They provided him with a year's worth of salary and benefits, and services with an outplacement firm. These included resumé writing, interview training and networking support. "Rather than treating people as commodities, people are treated compassionately," says Hornstein of the experience. You can provide your employees with psychological support in addition to proper severance, benefits and outplacement services, he says. Consider offering group meetings where people can talk to others about the negative psychological impacts of downsizing that they've experienced. "Downsizing is a significant assault on an individual's self-esteem Everybody has a story, and when somebody is downsized, the organization can [seem to] take an approach that they don't care what the background story is, they just want to get rid of the people." says Hornstein. Birt agrees, saying companies should be prepared to offer an employee assistance program (EAP), a short-term counseling service for employees in need of support. This can also add a buffer against the company's liability.
Confidentiality
Having said that, to maintain confidentiality, limit the planning group to only those whose participation is necessary, says Birt. Consider using specific project-related confidentiality agreements, as well, and clearly describe the consequences for breaching confidentiality. He also suggests reminding participants with pre-existing confidentiality agreements of the terms of those agreements. If you are a publicly traded company, you should know if you are required to first inform the markets of your actions. If that is the case, managers must be prepared to communicate with employees immediately after informing the markets.
Finalize the Details
Before you deliver the news of layoffs, finalize all the details with human resources and legal, including severance, benefits and pension entitlements, says Birt. You'll be prepared to immediately answer individual questions. Everything you say orally in a termination meeting should be captured in a termination letter as well, he says. However, give terminated employees a few days to review their termination package and ask any questions, says Fraser Johnson, a professor at the Ivey School of Business in London, Ontario. "As soon as you hear the words that you're being laid off, your mind might go blank," he says.
Share the Pain
Rather than targeting employees with layoffs, share the cuts across the corporation, just as Canadian Natural Resources did when all staff pay was cut by up to 10 percent. Or, introduce flexible work arrangements like part-time work, voluntary leaves of absence, or deferred compensation in which an employee can work full-time at 80 percent salary for several years before taking a paid sabbatical.
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economistsview.typepad.com
"Millions of children are living in families still struggling to make ends meet in our low-growth, low-wage economy":Nearly half of American children living near poverty line, Eurekalert! : Nearly half of children in the United States live dangerously close to the poverty line, according to new research from the National Center for Children in Poverty (NCCP) at Columbia University's Mailman School of Public Health. Basic Facts about Low-Income Children, the center's annual series of profiles on child poverty in America, illustrates the severity of economic instability and poverty conditions faced by more than 31 million children throughout the United States. Using the latest data from the American Community Survey, NCCP researchers found that while the total number of children in the U.S. has remained about the same since 2008, more children today are likely to live in families barely able to afford their most basic needs."These data challenge the prevailing beliefs that many still hold about what poverty looks like and which children in this country are most likely to be at risk," said Renée Wilson-Simmons, DrPH, NCCP director. "The fact is, despite the significant gains we've made in expanding nutrition and health insurance programs to reach the children most in need, millions of children are living in families still struggling to make ends meet in our low-growth, low-wage economy."According to NCCP researchers, the number of poor children in the U.S. grew by 18 percent from 2008 to 2014 (the latest available data), and the number of children living in low-income households grew by 10 percent. ...Posted by Mark Thoma on Wednesday, March 2, 2016 at 10:08 AM in Economics , Income Distribution , Social Insurance | Permalink Comments (54)
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finance.yahoo.com
Republican presidential front-runner Donald Trump is playing defense on at least one issue these days: his role in a now-defunct real estate seminar business called Trump University.
At a rally in Arkansas on Saturday, Trump took a break from his stump speech to downplay a class-action civil lawsuit pending against the business, which was founded by Trump and offered students instruction on real estate investments.
"It's a small deal, very small," Trump said of the suit, which could force him to take the stand this summer.
Trump specifically railed against the judge in the case, and at one point noted the judge's Hispanic ethnicity.
Trump claimed the case should have been thrown out years ago, "but because it was me and because there's a hostility toward me by the judge - tremendous hostility - beyond belief." He then noted, as an aside: "I believe he happens to be Spanish, which is fine. He's Hispanic - which is fine."
A message left for the judge, U.S. District Judge Gonzalo Curiel, was not immediately returned. Curiel is a judge in the Southern District of California and based in San Diego.
New York Attorney General Eric Schneiderman, whose office has filed a separate civil $40 million complaint against Trump University in state court, accused Trump of "racial demagoguery." Schneiderman sued Trump University in 2013 alleging it committed fraud and fleeced 5,000 people out of millions of dollars.
"I will not engage in a debate about ongoing litigation," Schneiderman said in a statement issued after Trump made his comments. "But there is no place in this process for racial demagoguery directed at respected members of the judiciary."
Schneiderman noted that New York's state Supreme Court ruled that Trump University operated illegally in New York as an unlicensed educational institution.
Trump University emerged as a campaign issue at Thursday's GOP debate, raised by Florida Sen. Marco Rubio.
"There are people who borrowed $36,000 to go to Trump University, and they're suing now - $36,000 to go to a university that's a fake school," Rubio said. "And you know what they got? They got to take a picture with a cardboard cutout of Donald Trump."
Texas Sen. Ted Cruz jumped in, adding: "It's a fraud case. ... I want you to think about, if this man is the nominee, having the Republican nominee on the stand in court, being cross-examined about whether he committed fraud."
Schneiderman's suit alleges that Trump University falsely promoted itself as an educational institution even after the state education department warned it to stop. The complaint accuses Trump of falsely promising that Trump University students would receive intense training from experts hand-picked by Trump himself.
During breaks in the seminars, Schneiderman's complaint alleges, participants were urged to call their credit card companies and ask to increase their credit limits. Once the credit lines were secured, Trump University staff tried to persuade students to pay for additional services.
Separate from Schneiderman's complaint, Trump University students have sued. According to the California class-action complaint in front of Curiel, a one-year apprenticeship that Trump University students were promised ended after students paid for a three-day seminar. Attendees who were promised a personal photo with Trump received only the chance to take a photo with a cardboard cutout. And many instructors were bankrupt real estate investors.
Trump, at the rally, dismissed the cases as the work of "a sleazebag law firm" and suggested that Schneiderman's intervention was politically motivated.
"I could've settled this suit numerous times. Could settle it now. But I don't like settling suits," Trump said.
Chris
I would think that Trump gave all of those students a lesson that they should never forget, a fool and his money are soon parted. Who pays 36 grand to go to an unacredited school, to learn what they could get for free at the local library?
Do you really need someone to say, For next week, read chapters 5-9" ? And now that you have your lesson in "real life" go forth and prosper. And you should quicky recoup your tuition because you will run into people that lack you knowledge.
Commenter
The broad masses of a population are more amenable to the appeal of rhetoric than to any other force.- Adolf Hitler
I'm a bit of a P. T. Barnum. I make stars out of everyone. - Trump
There's a sucker born every minute. - P.T. BarnumCommenter
"The receptivity of the masses is very limited, their intelligence is small, but their power of forgetting is enormous. In consequence of these facts, all effective propaganda must be limited to a very few points and must harp on these in slogans until the last member of the public understands what you want him to understand by your slogan." Adolf dead, enter the Trump. Make American great again!
Margy
"There is a cult of ignorance in the United States. and there always has been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured through the false notion that democracy means that 'my ignorance is just as good as your knowledge." - Isaac Asimov
J
Trump university proved there is a sucker born every minute.
Joe
Trump univ sounds like it was a school that taught real estate investing as an off shoot of trumps tv show. Nothing said it was an accredited degree college. No real estate license school is and they all have 3 day courses to learn real estate then you have to take a state test to get your license. You can go to a regular school that costs $100 or spend $36k at trump univ. it's the same class. It all sounds like a PR stunt .
factChecker
Cheating thousands of people, just trying to better themselves, out of millions of $ might be unimportant to Trump. That is the problem. He has no conscience.
Big Al
Ignorance is investing your money in a non certified educational institution because it is pitched by a so called "celebrity". If you do something foolish, dumb or stupid own up to it and use it as a learning experience. Don't expect others to pay for your mistakes.
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February 12, 2016 | The Chronicle of Higher Education
If there was a single event that galvanized conservative donors to try to wrest control of higher education in America, it might have been the uprising at Cornell University on April 20, 1969. That afternoon, during parents' weekend at the Ithaca...
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economistsview.typepad.com
Part of an interview of Larry Summers at Equitable Growth :
... When I went to graduate school in the 1970s, the prevailing view among economists, captured by Art Okun's book "Equality Versus Efficiency: The Big Tradeoff," was that equality and efficiency were both desirable, but they were likely to trade off-that more progressive taxation would achieve more equality but would inevitably in some way distort economic choices and, so, reduce efficiency, for example.I believe there are still many areas in which one does have to trade off equality versus efficiency. But I also believe there are many areas in which it's possible to reform policy to promote both economic efficiency and equality. One such area is policy to mitigate secular stagnation by promoting demand at times when there is slack in the use of resources.
Recall that I defined secular stagnation as having at its essence an excess of savings over investment, desired saving over desired investment. There are many reasons for that. Some of them have to do, for example, with reduced investment demand because so much more capital can be purchased with fewer dollars. I think of the fact that my iPad has more computing power than a Cray supercomputer did when Bill Clinton came into office in 1993.
One aspect of that excess in saving over investments is that rising inequality has operated to reduce spending. We are fairly confident that what economists call the "marginal propensity to consume" of those with high incomes is less than the marginal propensity to consume of those with middle incomes.
And so the combination of rising inequality in the distribution of income across income levels and a shift in inequality toward the higher profit share slows economic growth. In normal times, such a change might be offset by easier monetary policy. But in the current environment, where interest rates are very close to the zero lower bound, the capacity for that kind of offset is greatly attenuated.
There's another aspect of the connection between secular stagnation and inequality that bears emphasis. Experience suggests that in an economy where there are more workers seeking jobs than there are jobs seeking workers, the power is on the employer side, and workers do much less well. A tight economy, where employers are seeking workers, shifts the balance of power toward workers and leads to higher pay and better benefits. That, in turn, leads to more spending being injected into the economy, which supports further economic growth.
And so, as Keynes recognized when he wrote to FDR in the late 1930s urging the importance of wage increases, measures that strengthen workers' capacity to earn income by increasing spending power can promote both equality and strengthen the economic performance of the country. ...
pgl :
Excellent interview with this as a key sentence:mulp -> pgl..."But I also believe there are many areas in which it's possible to reform policy to promote both economic efficiency and equality. One such area is policy to mitigate secular stagnation by promoting demand at times when there is slack in the use of resources."
Summers makes two arguments with respect to promoting aggregate demand:
(1) his case for more infrastructure investment; and
(2) his defense of the expansionary monetary measures taken by the FED from 2008 until recently.He does note that Obama started talking about "belt tightening" after Summers left the White House and to Summers regret.
Right, in a democracy, the elected leaders must view the voters as idiots and execute to the total opposite of the expressed policies of the candidates who won.pgl said in reply to mulp ...Or do you think the voters were calling for massive explosions of debt and massive increases in jobs forced by government policies to force exploding labor costs which would necessarily result in exploding consumer prices when they voted Democrats out and Republicans in?
Perhaps you think Bernie Sanders got far more leftist laws passed by being a radical leftist socialist in Congress able to lead a revolution in Congress to redistribute wealth?
The Republican Party is divided by Obama highly divisive politeral tactics which played Republicans against Republicans, doing a far better job dealing with Republicans than Clinton's "triangulation" which implemented massive austerity tempered by government dictates that were highly profitable to crony capitalists in the computer industry. Bush-Cheney served a different set of crony capitalists leading to an implosion in the tech sector dragging down pretty much everything good for the American people. Obama has since created incentives with rewards to both sets of crony capitalists, that has now imploded for the Bush-Cheney crony capitalists (fossil fuels) but still reward the Elon Musk, Bezos, google, hollywood, Ellison, Apple sector.
Neither Clinton nor Obama were allowed to help the bottom 50% of workers because voters demanded austerity by voting for Republican control of Congress in 1994, 1996, 1998, 2000, 2002, 2004, 2010, 2012, 2014, and if Sanders is the Democratic nominee in 2016, then Republican control of Congress in 2016, 2018, and probably 2020 and 2022. And only a Republican president will end the austerity, but it will lead to slower growth, high unemployment, likely severe recession, but wars. Just like the end of austerity of Bush-Cheney.
WTF this has to do with what Summers wrote??? Never mind. So much babbling, so little time.JohnH :JohnH said in reply to JohnH..."One aspect of that excess in saving over investments is that rising inequality has operated to reduce spending. We are fairly confident that what economists call the "marginal propensity to consume" of those with high incomes is less than the marginal propensity to consume of those with middle incomes.And so the combination of rising inequality in the distribution of income across income levels and a shift in inequality toward the higher profit share slows economic growth."
Hate to say this, but Summers is making a lot of sense.
The way to address the problem of slow economic growth is to tax the wealthy, who have a low propensity to consume, and use the funds for government programs (infrastructure, education, healthcare) and redistribution to the poor...exactly as I have been arguing.
pgl should take up his fight with Larry Summers, not me.BenIsNotYoda -> JohnH...But Summers is fairly confident...as pgl just can't accept that a) increasing inequality reduces consumption and economic growth and that b) addressing inequality by taxing high incomes and wealth would lead to increased consumption and economic growth if it was spent on social programs and redistribution to those with a high propensity to consume (the poor).
It appears the we now have two pgls here--one that support high top tax brackets and another who opposes taxing the wealthy.
Or maybe we just have a single, very confused dude!
pgl's solution is - give them a rate cut. always. grandmother is ill - give her a rate cutpgl said in reply to JohnH...You do know BINY is cheating on you. Good luck getting back with granny.BenIsNotYoda -> JohnH...he is not happy because his cheap stocks are getting cheaper.JohnH said in reply to BenIsNotYoda...I already called him on demanding QE4, which he advocated as soon as stocks went into correction territory back in August.lower middle class -> pgl...It was the same lousy economy. But as soon as stocks started to correct, and pgl's portfolio was getting hurt, he jumped right into action!
I'm trying to avoid being confused.JohnH said in reply to lower middle class...We hold the folowing as true, correct?
MPC is less than one.
"Income" refers to "disposable income"
As wealth and income rise, consumption also rises.
Falls in income do not lead to reductions in consumption because people reduce savings to stabilize consumption. (the poor get poorer by consuming wealth; wealth inequality accelerates?)
Increases in income do not lead to increases in consumption because people add to savings to stabilize consumption.
(high income people increase wealth faster the low income people while consumption increases; wealth inequality decelerates?)General propensity to consume depends on income. Wealthy people tend to save a good chunk of their incomes...and become wealthier. Most people save a very small part of their incomes (middle class) or nothing at all (poor). Obviously there are exceptions to this generalization, as pgl is quick to point out with his tearful evocations of the plight of the 'hand to mouth' rich. But the general pattern is as I have described.Peter K. :Marginal propensity to spend is a little more complicated, and a lot depends on whether the additional money is seen as a windfall or not. For people who do not generally save much, windfalls may be saved for a while or go to pay off debt, or be spend on durable goods or just spent.
"In normal times, such a change might be offset by easier monetary policy. But in the current environment, where interest rates are very close to the zero lower bound, the capacity for that kind of offset is greatly attenuated."Paine said in reply to Peter K....Larry Summers agrees with the obnoxious trolls like JohnH and BINY. Monetary policy doesn't help.
I agree with Dean Baker and Bernie Sanders. (This is not to say fiscal policy doesn't work better. Funny how the trolls always toss out red herrings.)
http://cepr.net/blogs/beat-the-press/paul-krugman-larry-summers-and-the-fed-s-unused-ammunition
Paul Krugman, Larry Summers, and the Fed's Unused Ammunition by Dean Baker
Paul Krugman and Larry Summers both have very good columns this morning noting the economy's continuing weakness and warning against excessive rate hikes by the Fed. While I fully agree with their assessment of the state of the economy and the dangers of Fed rate hikes, I think they are overly pessimistic about the Fed's scope for action if the economy weakens.
While the Fed did adopt unorthodox monetary policy in this recession in the form of quantitative easing, the buying of long-term debt, it has another tool at its disposal that it chose not to use. Specifically, instead of just targeting the overnight interest rate (now zero), the Fed could have targeted a longer term interest rate.
For example, it could set a target of 1.0 percent as the interest rate for the 5-year Treasury note, committing itself to buy more notes to push up the price, and push down the interest rate to keep it at 1.0 percent. It could even do the same with 10-year Treasury notes.
This is an idea that Joe Gagnon at the Peterson Institute for International Economics put forward at the depth of the recession, but for some reason there was little interest in policy circles. The only obvious risk of going the interest rate targeting route is that it could be inflationary if it led to too rapid an expansion, but excessively high inflation will not be our problem if the economy were to again weaken. Furthermore, if it turned out that targeting was prompting too much growth, the Fed could quickly reverse course and let the interest rate rise back to the market level.
Of course, it would be best if we could count on fiscal policy to play a role in getting us back to full employment (lowering supply through reduced workweeks and work years should also be on the agenda), but the Fed does have more ammunition buried away in the basement and we should be pressing them to use it if the need arises.
ExcellentJohnH said in reply to Peter K....Despite a finessed genuflex to inflation
"Larry Summers agrees with the obnoxious trolls like JohnH and BINY. Monetary policy doesn't help."JohnH said in reply to Peter K....Amazing, isn't it?
Agreed: "Of course, it would be best if we could count on fiscal policy to play a role in getting us back to full employment." And the best course is higher taxes on the wealthy, who have more than what they know with to do with.
Taxes on the wealthy directly tackles inequality, increased debt doesn't.
Amazing how unconventional monetary is always the go-to option. Pessimism about the effectiveness of the Fed's policy options is well warranted. You only need to look at the results of the last seven years.pgl said in reply to JohnH...So why not advocate unconventional fiscal policy...which at this point would include taxing the wealthy to fund stimulus? Why constantly flog the debt option, which does nothing to directly tackle inequality?
You need to shut up and go read that Ando-Modigliani paper on consumption. Once again you got everything exactly backwards. But then you are the dumbest troll ever.JohnH said in reply to BenIsNotYoda...pgl was against tax increases on the wealthy... before he was for tax increases on the wealthy...before he was against tax increases on the wealthy...PPaine :but he has always been for lots more debt...
" one persons rent may be another persons incentive "That relies on a muddled use of the term rent
Which by construction
Means
non supply regulating revenue or incomeBut still a point lies under that mud dimness of articulation
Separating rents from incentives ain't easy
But in the last analysis
Very often it's very doableTake my specialty
Ground rent
There are clever ways to tease out the rent
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economistsview.typepad.com
I have a new column:Three Ways to Help the Working Class : ... In graduate school, I was once told that "people don't have marginal products, jobs do." What does this mean? ...I wish I would have connected the last part to the Supreme Court case on public unions.
RGC :
"If you took 100 dogs and you buried 95 bones in a field and you told the dogs their job was to go out and find a bone, what's the very best case scenario? The best you can possibly hope for is that 95 dogs come back with bones. Five dogs can't get bones. More likely, some dogs will get lucky; they'll stumble across a few extras. Some may have better skills; they'll find three or four. So, the number of dogs that come back without bones may be ten or fifteen.PPaine -> RGC...(c. 9:38) "The conventional economist would gather the dogs together, the ones that had no bones, and train them to sniff out bones more effectively. Then they would send those hundred dogs back out into the field and tell them to go come back with a bone. And, again, the best you can get is 95 dogs with bones. What's wrong is that there aren't enough bones. There's nothing wrong with the dogs. The bones are the jobs. There's nothing wrong with the unemployed. There simply aren't enough jobs.
- Stephanie Kelton at the Summit on Modern Money Theory in Rimini, Italy. She is Creator and Editor of New Economic Perspectives. Her research expertise is in Federal Reserve operations, fiscal policy, social security, healthcare, international finance, and employment policy.
Yes. The ratio of population to jobs needs to change dramatically. Bust out of the old cycle where the ratio thru out the cycle remains bad. Yes even at the peak of employment -- We need a far higher sustained rate of spending on domestically produced goods and servicessanjait -> RGC...The very conventional new Keynesian response to a shortfall in demand is expansionary demand management policies.RGC -> sanjait...One problem with MMTers is they talk about very common ideas, like deficit financed spending, and pretend like they just invented something radically new, while completely failing to acknowledge or address the rest of the conversation that others have been having for years.
It's cute the way you make obviously ignorant assertions with such apparent confidence.PPaine -> RGC...Don't be too harsh. He very often makes good points. Why he's so hard on MMTers escapes meanne -> PPaine ...Has he read kalecki Lerner and Vickrey ?
The young James Meade
The young Lawrence KleinThe Post war macro left
These are not MMTershttp://www.nytimes.com/2013/10/22/business/economy/lawrence-r-klein-economist-who-forecast-global-trends-dies-at-93.htmlanne -> PPaine ...October 21, 2013
Lawrence R. Klein, Economic Theorist
By GLENN RIFKINLawrence R. Klein, who predicted America's economic boom after World War II and was awarded the 1980 Nobel in economic science for developing statistical models that are used to analyze and predict global economic trends, died on Sunday at his home in Gladwyne, Pa. He was 93.
His daughter Hannah Klein confirmed the death.
As World War II was ending, Professor Klein, widely regarded as a brilliant theorist, disputed the conventional wisdom that the postwar period would drive the American economy back into a long depression.
Using his econometric models based on mathematical equations, he predicted correctly that the pent-up demand for consumer goods and housing after the war, coupled with the purchasing power of the returning soldiers, would result not in economic crisis but in a surge in spending and a flourishing economy.
Though he often testified before federal bodies and served as an economic adviser to Jimmy Carter during his 1976 presidential campaign, Professor Klein chose to remain in academia - he taught economics at the University of Pennsylvania for 33 years - and rejected an offer to join the Carter administration.
"I am just an academic giving advice," he told People magazine in 1976. "If you are a technician and are asked for help, it is a social obligation of citizenship to give it."
Professor Klein's use of vast survey data to build statistical economic models for the United States and several other countries has been adopted by economists around the world. "Few, if any, research workers in the empirical field of economic science have had so many successors and such a large impact as Lawrence Klein," the Nobel committee wrote in awarding him the Nobel Memorial Prize in Economic Science....
Where is a reference? Repeated name-dropping, with no references is widly inconsiderate. Since you use the names repeatedly, why not just have a set of references to put down?anne -> PPaine ...What should a person read of Lawrence Klein?
http://mrzine.monthlyreview.org/2010/kalecki220510.htmlanne -> PPaine ...1942
Political Aspects of Full Employment
By Michal Kaleckihttp://works.bepress.com/cgi/viewcontent.cgi?article=1027&context=timothy_canova
March, 1997
The Macroeconomics of William Vickrey
By Timothy A. Canovahttp://crookedtimber.org/2015/12/17/piketty-meade-and-predistribution/
December 17, 2015
Piketty, Meade and Predistribution
By MARTIN O'NEILLhttp://community.middlebury.edu/~colander/books/map.htmlSandwichman -> RGC...1980
MAP: A Market Anti-Inflation Plan
By David Colander and Abba LernerPreface
This is a small book about a big topic. This is not the usual book on inflation, simplified- or oversimplified- to make accepted doctrines intelligible to the layman. It presents a new plan- MAP (Market Anti-inflation Plan)- that makes it possible to succeed in curing our inflation. The ideas in it are not easily absorbed. They form a radical new framework- a new way of looking at inflation, and indeed at all macroeconomics, which is at the same time only a synthesis of many divergent old trains of thought. As Albert Einstein said, "Ideas should be expressed as simply as possible, but not more so." We think we have made the book intelligible to nonspecialists, even though its ideas are challenging for all readers, and perhaps even more so for advanced economists.
We approach inflation as an economic problem, but we make allowances for political realities in designing MAP. Although we believe MAP should be adopted in some form, the book is not written from an advocatory position. We try to consider all arguments, both pro and con, and do not attempt to minimize potential difficulties.
The methodology is realytic - an unusual word that indicates a contrast with analytic. This means that we are primarily concerned with solving real problems. We believe that the book also contributes importantly to extending theoretical understanding, but it does this only where necessary to solve the problem at hand. *
* http://www.britannica.com/EBchecked/topic/1085393/Abba-P-Lerner#ref849102
Ah-ha the lump of bones fallacy! Dogs looking for bones will create a supply of bones as a consequence of their demand for bones.anne :Dog gets no bone.
Dog starves.
Vultures (capitalists) eat meat off dead dog.
Bones!http://www.nytimes.com/2016/01/12/us/politics/at-supreme-court-public-unions-face-possible-major-setback.htmlanne -> anne...January 11, 2016
Supreme Court Seems Poised to Deal Unions a Major Setback
By ADAM LIPTAKWASHINGTON - The Supreme Court seemed poised on Monday to deliver a severe blow to organized labor.
In a closely watched case brought by 10 California teachers, the court's conservative majority seemed ready to say that forcing public workers to support unions they have declined to join violates the First Amendment.
A ruling in the teachers' favor would affect millions of government workers and culminate a political and legal campaign by a group of prominent conservative foundations aimed at weakening public-sector unions. Those unions stand to lose fees from both workers who object to the positions the unions take and those who simply choose not to join while benefiting from the unions' efforts on their behalf.
Under California law, public employees who choose not to join unions must pay a "fair share service fee," also known as an "agency fee," typically equivalent to members' dues. The fees, the law says, are meant to pay for collective bargaining activities, including "the cost of lobbying activities." More than 20 states have similar laws.
Government workers who are not members of unions have long been able to obtain refunds for the political activities of unions like campaign spending. Monday's case, Friedrichs v. California Teachers Association, No. 14-915, asks whether such workers must continue to pay for any union activities, including negotiating for better wages and benefits. A majority of the justices seemed inclined to say no.
Collective bargaining, Justice Anthony M. Kennedy said, is inherently political when the government is the employer. "Many critical points are matters of public concern," he said, mentioning issues like tenure, merit pay, promotions and classroom size.
The best hope for a victory for the unions had rested with Justice Antonin Scalia, who has written and said things sympathetic to their position. But he was consistently hostile on Monday.
"The problem is that everything that is collectively bargained with the government is within the political sphere, almost by definition," he said.
The court's four liberal members were on the defensive, asking whether there was good reason to overturn a 1977 decision by the court that allowed the fees....
http://www.nytimes.com/2016/01/09/us/politics/union-fees-friedrichs-v-california-teachers-association.htmlPPaine -> anne...January 8, 2016
Mandatory Union Fees Getting Hard Look by Supreme Court
By ADAM LIPTAKThe justices have already voiced skepticism about making people give money to public unions. They may now be ready to rule that it's unconstitutional.
The unins have no choice but to attack on all frontsPeter K. :Public sector insulation from savage attacks ended long ago
This is just a after dinner beltch by the union eatersOne way to increase worker bargaining power is to employ aggressive macro (fiscal, monetary, currency/trade) policy so that labor markets are tight and businesses are fighting over workers.Peter K. -> Peter K....In the late 90s, labor shared in productivity gains as unemployment fell below 4 percent. This ended with the tech stock bubble which morphed into the housing bubble.
As DeLong recently wrote:
"What we need now is 1) debt relief to unwind the overhang and 2) much tighter financial regulation to prevent the growth of new fragilities. And if those prove inconsistent with full recovery, then we need massive government spending on infrastructure and other investments financed by money printing until full employment is reattained."
It could be that achieving aggressive macro policy is as difficult politically as making the environment more favorable towards unions.
If we look at the post-war social democratic years, both helped raise living standards. Also the financial system was much smaller and much more regulated.
http://www.huffingtonpost.com/brad-delong/global-economic-depression_b_8924596.html?1452263364Peter K. -> Peter K....DeLong's quote
Other ideas include work-sharing during downturns, and shorter hours.Sandwichman -> Peter K...."Oh no! Whatever you do," cried Brer Rabbit, "Don't throw me into the briar patch!"pgl :Point #2: "We also need to do a better job of providing the educational resources people need to reach their full potential."mulp -> pgl...I can see conservative economists echoing this but what specifically do they want policy to do to make this happen? More Pell Grants No - they want to cut that kind of support. Now Greg Mankiw will tell you that you will get a great education if you manage to get into Harvard and pay $300 for his textbook!
If getting a Harvard PhD for every worker means that the California farm worker cutting broccoli and lettuce, or changing bed pans for the bedridden in nursing homes, gets paid $120,000 per year, then I'm all for eliminating poverty by education.RC AKA Darryl, Ron :My guess is education is not the path to eliminating poverty.
If you think education is the solution, explain why it takes a college degree to pay farm workers, home care workers, child care workers, cleaning people who scrub toilet, middle class wages, instead of simply paying them middle class wages right now.
Peter K. :"...So long as business interests dominate the political process, it will be hard to reverse the trend toward increasing inequality."[Actually it is the interest of management and the capital owning class that are dominating the political process. Businesses would do just fine if wages were higher, rent seeking - not so much.]
https://www.jacobinmag.com/2016/01/yanis-varoufakis-interview-jeremy-corbyn-greece-eurozone-tsipras/g :The Man Who Knew Too Much
An illustrated interview with former Greek finance minister Yanis Varoufakis.
Mark and most of his ilk support an open door for corporations to import smart, hard working and desperate workers from around the world...impact of that at the margins for wages(along with many other things) have been a disaster for the bottom 80% over the past 30 years.PPaine -> Paine...Even the great dani rodick and joe Stigilitz could push tis harderDenis Drew :
But they are one worldersAn honorable club but... Perhaps we need bordered areas to heal themselves first with national policies of true full employment and balance trade forex
That's right ... You cannot make the retail clerk any more productive. That's talking about the people I care about: bus drivers (taxi drivers -- me :-]), home carers, janitors, etc. But, you can make the economy they inhabit more productive -- and then the economy can pay them more (not less every year!): why barbers in France get paid more than barbers in Poland (classic example).PPaine -> PPaine ...US per capita income in 1968, $15,000. In 2016, $30,000.
Minimum wage nearly $4 an hour below what it was in 1968 (adjusted). Ditto for the price of US labor across the mid-to-lower board.
US mid-to-low labor price so extraordinarily low that half (HALF! -- 100,000!) of Chicago's gang age, minority males would rather join a street gang. Then there's my gang, Chicago's old (mostly retired) American born taxi drivers. Wouldn't get us into that job today for $500, if lucky, for 60 grueling hours.
http://www.cbsnews.com/news/gang-wars-at-the-root-of-chicagos-high-murder-rate/The core American trouble isn't wages not keeping up with productivity per se (though that parallels); the core labor sickness is wages not even remotely approaching what the consumer (not the boss) might be very willing to pay.
We do not need to attract businesses that provide good jobs -- the jobs cannot be good if the pay is miserly. High wage opportunities don't happen -- they are made (ask Jimmy Hoffa).
Educational resources are not needed to help retail clerks reach their full potential. Good pay for retail clerks is needed to help Detroit's schools reach their full potential. Nationwide: poverty area schools don't work because students (and teachers!) don't feel it worth making the effort -- given the job market doesn't promise anything remunerative enough to strive for when it's time for them to go to work.
http://www.amazon.com/gp/product/B00332EXDM/ref=dp-kindle-redirect?ie=UTF8&btkr=1"I believe this is mainly due to differences in bargaining power." Which is mainly due to absurdly unenforceable labor laws in this country which -- uniquely in all markets -- allows one side in the labor market to bully the other side out of being able to meaningfully bargain. Simple enough solution: make union busting a felony (like every other kind of market warping -- try to take a movie in the movies and telling them you were only kidding).
The labor laws enabling collective bargaining have long been in place; the need for collective barraging presumably settled. So when are progressive states going to begin -- one state at a time; forget Congress -- to make these laws enforceable? Federal preemption means individual states cannot subtract from national law, but states may add. In Maryland for one, Democrats have a 33-17 edge in the State Senate and a 91-50 edge in the House. WA, OR, CA, IL, NY, anybody listening?
IS ANYBODY, ANYWHERE LISTENING?! Retail clerks (and their hungry families) desperately want to know.
Criminalize anti union activitymulp -> Denis Drew ...Conservatives want lower gdp growth.Or else they believe in free lunch economics:
Step 1. Cut wages to increase profits
Step 2. Produce more and price it twice as high
Step 3. Demand government allow workers to borrow at high interest rates to buy twice as much as before their wages were cut in half
Step 4. Blame government, and especially Obama when the math does not work out.If you want faster gdp growth, you must pay workers, who are after all 99% of the consumers, more and increase their pay faster.
Economies are zero sum.
It is possible to time shift, say by exporting more than imported and taking the difference and saving it by buying debt, or stored labor, in other countries, but at some point, the process is reversed. For the US, savings has flowed into the US blocking exports and increasing imports. At some point, that will need to reverse. Someone will need to work more and consume less. That will need to be the 1% because for decades, most US workers have worked more and consumed less, unless they got to borrow and consume so they will need to work more and consume less.
Unless there is a massive redistribution of wealth, either war, or bankruptcy. Trying to tax wealth to redistribute will only destroy the wealth. After all, 99% of the wealth in the US was not built by labor, but inflated into existence by pump and dump asset churn or by high rents inflating decaying scarce assets in price.
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peakoilbarrel.com
aws. , 01/08/2016 at 10:50 pm
Back in early 2012, the Premier of Ontario suggested that the loonie (Canadian dollar) was becoming a petro-dollar. He was slapped down by the Cons, and walked back his comment.Paulo , 01/08/2016 at 11:40 pm"That has knocked the wind out of Ontario exporters and manufacturing in particular," explained McGuinty."The only reason the dollar is high - it's a petro dollar , right? It's been driven by the global demand for oil and gas to be sourced in Western Canada.
"So if I had my preferences, as to whether we have a rapidly growing oil-and-gas sector in the West or a lower dollar benefiting Ontario, I'll tell you where I'd stand - with the lower dollar."
Canadian Dollar's Worst Rout Ever Raises Petro-State Worries
Ari Altstedter, Bloomberg, January 4, 2016
By the middle of 2014, oil's share of Canada's total exports reached 19 percent from about 6 percent a decade earlier. Meanwhile, the Ontario-based auto industry was seeing its share of the export pie fall to to 14 percent from 22 percent. The heavier reliance on crude became an issue in last October's national election, as Harper and his Western-based Conservatives were accused by all their opponents of having favored oil to the detriment of other regions.
In the process, the Canadian dollar had effectively joined the ranks of petro-currencies. The correlation between movements in the price of oil and the loonie has increased five-fold since 2000, according to data compiled by Bloomberg. In 2015, while all commodity-exporting countries faced currency pressure, the Canadian dollar was more sensitive to oil price movements than such petro-states as Mexico, Norway and Russia.
I don't actually see low oil prices re-balanacing the Canadian economy. The cure for low oil prices is low oil prices. Would you invest in an export dependent industry in Canada? One can reasonably model a scenario where the price of oil goes up to $100/barrel, the loonie returns to parity with the greenback and an exporters competitiveness disappears with our petro-loonie's parity with the U.S. dollar.
Being a petro-state makes for a pretty ugly domestic economy.
AWS (and Ron)I believe the decline will bring us Canadians back to our roots and strengths. Personally, I have been disgusted with our past 30 year transformation into urban consumers, no matter what part of the country we live in.
I remember my Grandparents playing penny poker on winter evenings. I grew up with stories of the Depression. While I am 60, my good friend down the road is 75. He often tells me about living in our Valley from '46 onwards ..a time of bailing water from the river into a 45 for home supply, canned venison and salmon for winter, oil lamps because Hydro did not arrive until the latter '60s. His Dad built up a sawmill and his folks provided room and board for 'the crew'. His mom washed their clothing by hand on Saturdays and finally got a gas powered ringer washer to make it easier. Nowadays, he scrounges scrap steel (old bedframes and the like) from the recycling bins for our welding projects. He helps me make up power saw chains from scraps and pieces. His motto (which he shares with me every other day), is, "Never throw anything away". And damned if he can't find exactly what I need when I come over to scrounge at what I call, "Our Store".
I don't know what will happen to the Vancouverites or Torontonians when property values dive. I imagine that many will lose everything they think they have, (when their debt bomb blows). I guess then we will see what people are made of. Will they whine? Or will they pick themselves up and make the best of it?
As for Ron's post, it is similar to one last year. I could hardly read that one as well. Yes, there are deserts and sewers made by man, and that will be the best that many can hope for. But what is your sphere of influence and power to change things? I have replanted several thousand trees on our property and let most of it regen into a bramble-filled mixed forest. I have put in a pond that trout have found from the drainage ditches and flooded wetlands next door. I have cut trails for deer and elk crossing routes. We grow our gardens without pesticides and with as much compost as possible. We wear our clothes out and watch what we buy. We don't travel by air, and limit trips to local visits with family. In the future, perhaps this will be the norm for most instead of today's extravagent consumption which is thought of as normal for Canadians and a birthright.
Ron, the facts are glum. Your story is true. I accept that. What I don't accept is allowing it to bring me down and giving up .on myself, my loved ones, and my people. Perhaps as a group, as a species, it seems as if we never learn and make the same and even greater mistakes over and over. But as individuals we can try to do things better, live better; until we can't go on. That is my plan, and I am sticking with it until I can't go on.
I am teaching myself to play the banjo. (My blessed wife is so so patient). Today, the weather was cold and foggy, my lumber is frozen into ice lumps, and I was quite house bound being sick of crunching around my frozen yard trying to be productive. So, the banjo prevailed and damned if it isn't getting better. I am well on the way to mastering (to use that term loosely) an Iris Dement version of "Leaning on the Everlasting Arms", "I can See Clearly Now" by Johnny Nash, and "I Believe In You" by Don Williams. I think I have sub-conciously chosen these songs to combat my own confessions of doom and gloom. Sometimes, it is all we have. For you post readers, I will provide the Youtube links for a pick-me-up. A nice glass of whiskey makes for a good listening partner.
regards and thanks for your heartfelt honesty and efforts
https://www.youtube.com/watch?v=ZGbxrNqK4-4
https://www.youtube.com/watch?v=pSsqWHtg7Ig
https://www.youtube.com/watch?v=Biz5kBIAtic
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mobile.nytimes.com
Neretva'43 | Jan 9, 2016 10:33:05 AM | 77Re: dahoit | Jan 9, 2016 9:51:32 AM | 74
here is an important article for you. While the whole article is astonishing I'll post just one small passage. If someone can not figure out who the real (not perceived) enemy than s/he is lost cause.
"For the Wealthiest, a Private Tax System That Saves Them Billions"
http://mobile.nytimes.com/2015/12/30/business/economy/for-the-wealthiest-private-tax-system-saves-them-billions.html?_r=3"We do have two different tax systems, one for normal wage-earners and another for those who can afford sophisticated tax advice," said Victor Fleischer, a law professor at the University of San Diego who studies the intersection of tax policy and inequality. "At the very top of the income distribution, the effective rate of tax goes down, contrary to the principles of a progressive income tax system."
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Equitable Growth
The paper -by Dongya Koh of the University of Arkansas, Raul Santaeulalia-Llopis of the Washington University in St. Louis, and Yu Zheng of the City University of Hong Kong-takes advantage of newly updated GDP data from the U.S. Bureau of Economic Analysis. While the Bureau is constantly releasing new data on economic growth, it also revises previous data. Sometimes those revisions show an increase in total U.S. economic output, and sometimes the revisions show a change in the composition of that output. It's the latter kind of revision that's important in this case.
In 2013, the Bureau of Economic Analysis updated its treatment of a variety of issues, including how it treats research and development spending. The BEA previously treated R&D spending as a business expense but, as the BEA realized, it makes more sense to think of spending that could potentially boost a firm's output as a capital investment. As the authors of the paper show, counting investments in intellectual property as, well, investment significantly increases the amount of investment showing up in the data. According to their calculations, intellectual property products have increased from 8 percent of U.S. investment in 1947 to 26 percent in 2013.
Accounting for this kind of capital investment means that the decline in the U.S. labor share starts much earlier than previously thought. According to the paper, the decline starts in 1947, which would mean the labor share was declining throughout the period it was famously stated to be constant. But not only does the decline start earlier than previously thought-it's also much larger. It's actually twice as large. And the increase in intellectual property products explains the entirety of the decline.
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Jan 09, 2016 | Salon.com
Earlier this year, for example, Hillary Clinton made headlines when, in response to a question about her personal fortune, she claimed her family was "dead broke" when they left the White House. That statement followed New York Gov. Andrew Cuomo's top aide casting those making $500,000 a year as merely upper middle class.
According to IRS data, 99 percent of American households make less than $388,000 a year, and 95 percent make less than $167,000 a year. The true middle in terms of income - that is, the cutoff to be in the top 50 percent of earners - is roughly $35,000 a year.
While Lew claims his private-sector compensation was not "in the stratosphere," the data suggest otherwise.
According to New York University records, Lew was usually paid between $700,000 and $800,000 a year as the school's vice president, while also receiving a $440,000 mortgage subsidy. Lew also earned $300,000 a year from Citigroup, with a "guaranteed incentive and retention award of not less than $1 million," according to an employment agreement obtained by Businessweek.
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December 31, 2015 | nakedcapitalism.com
kings , December 31, 2015 at 6:19 am
jgordon , December 31, 2015 at 7:03 amtoday's Republicans and defending teachers(and firefighters and police) to the very last stand. Yes, public education is one of the foundations of our country, and should never be 'privatized'(um, stolen) to a political bidder. But also, teachers(and f's and p's) generally make outstanding salaries, paid for by property taxes, and have their retirement funded, and are allowed to strike to add more whenever they like. Oh, then they can retire after 20-30 years and still receive significant pension benefits.
The 'everyone pays' for the select few is a problem in this country, and is never discussed in any media that I see.
Teachers' personal money is the most common source of funding for classroom projects. On average, teachers spent a total of $398 on school supplies in 2009-2010 and an additional $538 on educational materials." The total expended that year by the nation's 3.7 million teachers? A whopping $3.5 billion.
And it's not just teachers. According to the Summer 2012 issue of NEA Today, the newsmagazine of the National Education Association, 66 percent of education support professionals – a category that includes bus drivers, custodians, lunchroom staff, secretaries, security guards and skilled trades people – dig into their pockets to help kids in need. Their expenditures? An average of $216 per employee per year."
http://www.truth-out.org/news/item/12504-public-school-teachers-spend-billions-of-their-own-money-on-student-needs(sigh) too often i hear people complain about property taxes & schools…now dayz i suggest we all stop paying the tax and enjoy the short life span the bored & uneducated kids will rein on us!
Uahsenaa , December 31, 2015 at 8:30 amI have a general antipathy towards teachers; no matter how well intentioned they are, ultimately they're still responsible for indoctrinating the world-view and cultural myths required for children to become good corporate state consumers/employees. No matter how progressive and enlightened the curriculum, nor how lavish the facilities and small the class sizes, Howard Zinn won't be taught.
I won't say that all education is bad–but compared to what passes for education now in America, I believe that our students and society would be better off if we had no education at all, since what we have now is leading society and humanity off a cliff. Therefore the only real problem I have with breaking up teachers unions and closing schools is that they'll probably be replaced with something even more corporate and soul-destroying.
jgordon , December 31, 2015 at 11:19 amI think you're blaming the wrong people for this. Sure the myth of meritocracy and American exceptionalism is all over public education, however, I'm not sure this is the fault of teachers themselves. Public curriculum is now mostly controlled from without, and teachers are largely constrained as to what they can teach, when they can teach it, and how. The constant battery of tests really limits the freedom teachers have in offering a variety of materials, because if those kids don't produce exactly what the test maker is looking for, it could be their job on the line. You can't teach bell hooks, if you don't have a teaching job to begin with.
Torsten , December 31, 2015 at 3:57 pmteachers are largely constrained as to what they can teach
Well that's exactly my point. Teachers are ultimately servants to the corporate state. They have little to no free will themselves. They will train their students to be model employees and insatiable consumers–who love America because patriotism, or they will be fired.
I'm not blaming them for their lot. Teaching is certainly a crappy, and unappreciated job in this society–and there is something admirable about someone who chooses to wear such a hair shirt, even if there is no point to it. I'm saying that the whole apparatus of public education in America should be radically redone, and until it's redone this whole institutional (public and private) education debacle should be suspended immediately. The cultural/social monoculture it's creating is a genuine danger to humanity.
Inverness , December 31, 2015 at 11:29 amToo true! I keep returning to Paul Goodman's classic screed, Compulsory Miseducation . 1964. Crapification has been with us a long time. We are now harvesting its rotten fruits.
All the Trump supporters (and let us not forget, e.g., Spiro Agnew, superhero vanquisher of the nattering nabobs, and his minions), all those B and C and D and F students who now can vote away the pensions of the teachers who gave the voters those grades. .
There's lots of revenge voting going on.
Jgordon, your comment begs a lot of questions. I'll try to address them. As a former New York City teacher, I'd like to share my views.
I only wish American teachers had anywhere near as much agency as you think they do! Are you aware who controls the curriculum, and how politicized this is? While I taught in the nation's largest public school system, it was under mayoral control. His education chancellors were mostly non-educators (a lawyer, and, most briefly and notoriously, a publisher), and hired private contractors and spent millions of public money on charters.
Since you mentioned it, what about what is taught, and who controls that? The curriculum has been hijacked by the Common Core, which dictates which materials can be covered, and how it can be covered. This was developed by many non-educators who don't have a clue about how children and adolescents learn, and this is reflected by the abysmally low test scores, even in regions where there were no problems before. Even before the Common Core, you have the New York States Regents exams, which trivializes history, making it impossible to teach properly, unless you want to risk your job (remember, low test scores, bad ratings).
Furthermore, you mention that teachers don't teach Howard Zinn. Well, I'm shocked at how many enlightened, left-leaning teachers I met in the States, considering the huge propaganda campaign waged against progressive thinking, that most certainly did not end with the McCarthy era in the 1950's! So you're working in a nation which has actively tried to target, and even destroy, the careers of people left-leaning or sympathetic to "enemies of the State." I always felt like I was one unpopular move away from becoming a New York Post headline, for daring to challenge the mainstream perception of Hugo Chavez and for discussing why many consider Bush a war criminal. I have had to deal with complaints from principals and parents. I soldiered on for years, but after awhile, your health suffers.
Also, keep in mind that history teachers in New York must somehow manage to teach a ridiculously overloaded curriculum. They cannot choose to stop everything and really teach in a more meaningful way, because they are judged by their students' test scores. They mustn't anger their administrators and superintendents, who are scared of politicians and parents. I would love to have had more freedom to teach the way I wanted to, most of the time. To cover a worthwhile secondary source like Zinn means having the time and resources to do that. Also, it means that you will be supported by your administrators and parents. This is extremely difficult, even in a state like New York, which is not nearly as open-minded as it claims to be.
Covering historians like Zinn would also be easier if we had some control over our classroom materials. Who do chooses and writes the textbooks? Many textbook authors must please Texas, the largest state. This does not exactly encourage, shall we say, the most progressive thinking. Teachers often have to fight to just get their photocopies done, and straight lecturing is forbidden. So they have to rely on the texts their buildings provide them. Teachers also get a bit paranoid, since anything - ANYTHING can get them smeared in papers like the New York Post and the The New York Daily News. So I agree that Zinn's views should be a part of the curriculum, but much of TPTB aren't exactly on my side.
You also need to understand that if the US doesn't produce mostly progressive economists, university presidents, politicians, lawyers and citizens…why would teachers be so different? The US, with a mainstream press that promotes Hillary Clinton as the ideal presidential candidate, is not exactly a hotbed of innovative thinking. Teachers aren't magical people, despite what Hollywood tells us, which features teachers that can somehow transform poor, hungry students into academic stars, fueled by charisma, sugary snacks, and iron will alone.
Thank you for bearing with me this far (if you that's the case). I know so many talented teachers in New York who seemed to work themselves so hard, so it kind of kills me to read these kinds of blanket statements. Forget Hollywood's hackneyed portrayal of teachers. For me, the real miracle is that after all of the hatred, union-busting, conservative propaganda, deprofessionalisation, …the real miracle is that there still are some fantastic teachers in the field.
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