Softpanorama

May the source be with you, but remember the KISS principle ;-)
Home Switchboard Unix Administration Red Hat TCP/IP Networks Neoliberalism Toxic Managers
(slightly skeptical) Educational society promoting "Back to basics" movement against IT overcomplexity and  bastardization of classic Unix

Chronic Unemployment Bulletin, 2016

Home 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009

For the list of top articles see Recommended Links section


Top Visited
Switchboard
Latest
Past week
Past month

NEWS CONTENTS

Old News ;-)

[Dec 27, 2016] Facing Layoff, An IT Employee Makes A Bold Counteroffer

Carnival Corp. told about 200 IT employees that the company was transferring their work to Capgemini, a large IT outsourcing firm
Notable quotes:
"... 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 . ..."
"... 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. ..."
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 )

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 ShanghaiBill ( 739463 ) writes: on Sunday December 25, 2016 @06:13PM ( #53553247 )
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

So 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: 2 ) by PolygamousRanchKid ( 1290638 ) writes: on Sunday December 25, 2016 @06:33PM ( #53553303 )
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: 3 ) by fibonacci8 ( 260615 ) writes: on Sunday December 25, 2016 @08:43PM ( #53553777 )

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 Rob Y. ( 110975 ) writes: on Sunday December 25, 2016 @06:37PM ( #53553317 )

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:Dear Matthew ( Score: 5 , Insightful) by geoskd ( 321194 ) writes: on Sunday December 25, 2016 @07:35PM ( #53553547 )
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: ( Score: 2 ) by ShanghaiBill ( 739463 ) 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.

Re: Dear Matthew ( Score: 2 , Insightful) by Anonymous Coward writes:

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:

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.

Re:Dear Matthew ( Score: 4 , Insightful) by msauve ( 701917 ) writes: on Sunday December 25, 2016 @07:45PM ( #53553601 )

"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?

[Dec 27, 2016] Class Struggle In The USA

Notable quotes:
"... 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. ..."
"... 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." ..."
"... 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. ..."
"... 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. ..."
"... if you are proposing raising taxes on the rich SO THAT you can cut taxes on the non rich you are simply proposing theft. ..."
"... 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. ..."
"... 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.) ..."
"... made by the ayn rand faithful. it is wearisome. ..."
"... The only cure for organized greed is organized labor. ..."
"... A typical voice of American politics is the avoidance of saying anything real on real issues" ..."
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! "

Last one.

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.

[Dec 27, 2016] Income inequality has increased in many developed countries over the last several decades.

Dec 27, 2016 | economistsview.typepad.com
anne :

http://gabriel-zucman.eu/files/PSZ2016.pdf

December, 2016

Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel Zucman

Abstract

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.

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 PM
http://gabriel-zucman.eu/files/PSZ2016.pdf

December, 2016

Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel Zucman

Introduction 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....

[Dec 27, 2016] Suicide rates rise after jobs move overseas, study finds

Notable quotes:
"... In 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." ..."
"... 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 ..."
Dec 27, 2016 | economistsview.typepad.com
Fred C. Dobbs : December 27, 2016 at 03:37 AM

Suicide 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, 2016

FALL 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.

In 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.

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."

Fred C. Dobbs -> Fred C. Dobbs... , December 27, 2016 at 03:55 AM
'The research doesn't prove a definitive
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 System

https://www.federalreserve.gov/econresdata/feds/2016/files/2016094pap.pdf

http://faculty.som.yale.edu/peterschott/files/research/papers/pierce_schott_pntr_20150301.pdf

Fred C. Dobbs -> Fred C. Dobbs... , December 27, 2016 at 04:00 AM
(Note: The 2nd link is to a
different paper, same authors.)

'The Surprisingly Swift Decline
of US Manufacturing Employment'

Fred C. Dobbs -> Fred C. Dobbs... , December 27, 2016 at 04:27 AM
Understanding vulnerability to self-
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 al

Journal of Affective Disorders
Volume 183, 1 - September 2015

http://www.sciencedirect.com/science/article/pii/S0165032715002694/pdfft?md5=bebc4ce035acbeeee6cb0b9bd586a5e3&pid=1-s2.0-S0165032715002694-main.pdf

Chris G -> Fred C. Dobbs... , -1
Suicide rates rise after jobs move overseas, study finds

That's consistent with the GOP's notion of how to most effectively cover health problems: shoveled dirt.

[Dec 27, 2016] Trump should say, Thanks, Obama!

Notable quotes:
"... 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 ..."
Dec 27, 2016 | www.nakedcapitalism.com
John k, December 26, 2016 at 2:33 pm

Dems 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!

Synoia , December 26, 2016 at 2:40 pm

8mm official unemployment. 16mm reduced participation since 2005 in 25-54 age group.
24mm total, not counting part timers that want full time

Obama's legacy. Read it and weep.

John k , December 26, 2016 at 3:23 pm

I 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!'

WheresOurTeddy , December 26, 2016 at 3:29 pm

Bernie would not be president only if they Bobby Kennedy'd him.

It didn't come to that. They just fixed the primary.

Vatch , December 26, 2016 at 7:12 pm

If 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.

Yves Smith , December 26, 2016 at 10:22 pm

The one unambiguously positive feature of Obamacare was Medicaid expansion, which does help the poor.

marym , December 26, 2016 at 10:47 pm

It does help people, but increased privatization and estate recovery make it not unambiguous.

ambrit , December 27, 2016 at 4:42 am

True. 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?

Cry Shop , December 27, 2016 at 5:36 am

Not 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.

ambrit , December 27, 2016 at 5:46 am

I'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 8:44 am

Once 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 .

marym , December 27, 2016 at 8:50 am

Nor is Medicare Medicare, in the sense of being a fully public program. Medicare Advantage, Medicare supplemental insurance, and prescription drug insurance are all privatized.

Tully , December 27, 2016 at 11:41 am

the funds supplied by the central government. No.
they are supplied by the taxpayers.
That is the system – taxpayers subsidize private sector profits.

steelhead , December 26, 2016 at 2:59 pm

43 years. The decline started in 1973, the year I graduated from high school.

Nittacci , December 26, 2016 at 3:00 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?

grayslady , December 26, 2016 at 5:48 pm

Yes, 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.

ambrit , December 27, 2016 at 4:46 am

" sensible universal health care program."
Sensible for whom? For the presently entrenched oligarchs, the system in use now is perfectly sensible.

Baldacci , December 26, 2016 at 9:31 pm

Only 30-35% of the total US population votes in any one election. 90% would be possible.

funemployed , December 27, 2016 at 9:34 am

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)

[Dec 27, 2016] The government's 20th century growth as a factory underestimates service sector growth and our continued share shrink in 20th century

Dec 27, 2016 | economistsview.typepad.com
AngloSaxon : December 26, 2016 at 10:24 PM , 2016 at 10:24 PM
In 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.

To 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.

likbez -> AngloSaxon... , -1
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 ?

[Dec 27, 2016] On Krugman And The Working Class - Tim Duys Fed Watch

Notable quotes:
"... Excellent 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. ..."
"... That's the effect of incessant Dem propaganda pitting races and sexes against each other. ..."
"... 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. ..."
"... 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. ..."
"... Bernie Sanders was that standard bearer, but Krugman and the Neoliberal establishment Democrats (ie. Super Delegates) decided that they wanted to coronate Clinton. ..."
"... 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). ..."
"... 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. ..."
"... The central fact of the election is that Hillary has always been extraordinarily unlikable, and it turned out that she was Nixonianly corrupt ..."
"... I'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 Establishment and their acolytes are caught in a credibility trap. ..."
"... 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. ..."
"... 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. ..."
"... 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? ..."
"... Clinton 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. ..."
"... I 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 Duy ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... Pretty sad commentary by neoliberal left screaming at neoliberal right and vice versa. ..."
"... 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. ..."
Dec 27, 2016 | economistsview.typepad.com
Jason Nordsell : , November 27, 2016 at 08:02 AM
Excellent 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.

The 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.

bob -> Jason Nordsell... , November 28, 2016 at 03:02 PM
"There is a concerted effort to hire only women and minorities, especially for executive/managerial positions."

Goooooolllllllllllllly, 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?

Jason Nordsell -> bob... , November 29, 2016 at 10:17 AM
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.

Displacement of white men by lesser-qualified women and minorities is NOT equality.

Paid Minion -> bob... , December 26, 2016 at 01:29 PM
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.

God forbid somebody have to "pay some dues" before setting them loose as suit trash.

This will not end well.

Richard -> Jason Nordsell... , November 30, 2016 at 03:45 PM
You had me nodding until the last part.

Back 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.

Todd : , November 27, 2016 at 08:46 AM
"...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."

Easy to say. What would that standard bearer or that strategy look like?

Bill -> Todd... , November 27, 2016 at 08:59 AM
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 PM
Basic political math - Sanders would have been eaten alive with his tax proposals by the GOP anti-tax propaganda machine on Trump steroids.

His 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.

dwb : , November 27, 2016 at 10:47 AM
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).

Old 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.


swampwiz -> dwb... , November 28, 2016 at 12:59 AM
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 PM
You know what will win Texas? Demographic change. Economic growth. And it is looking pretty inevitable on both counts.

I'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,

dwb -> bob... , November 28, 2016 at 06:27 PM
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.

Clinton 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.

Jason Nordsell -> bob... , November 29, 2016 at 10:27 AM
The notion that hispanic=democrat that liberals like bob have is hopelessly ignorrant.

I'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.

RJ -> bob... , December 06, 2016 at 11:20 PM
You might be tired of it, but clearly you are elitist, smug, and condescending.

Own it. Fly your freak flag proudly,

Tom : , November 27, 2016 at 11:42 AM
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."

Now 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.

dwb -> Tom... , November 27, 2016 at 12:07 PM
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.

Even 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.

Nick : , November 27, 2016 at 01:16 PM
Where can you move to for a job when wages are so low compared to rents?
The young generations are not happy with house prices or rents as well.
Giant_galveston -> Tim C.... , December 05, 2016 at 08:43 PM
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 PM
This is an outstanding takedown on what has been a never-ending series of garbage from Krugman.

I 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...

dazed and confused : , November 27, 2016 at 02:58 PM
"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."

All 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.

Jesse : , November 27, 2016 at 04:29 PM

The Democratic Establishment and their acolytes are caught in a credibility trap.

dimknight : , November 27, 2016 at 11:48 PM
"I don't know that the white working class voted against their economic interest".

I 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.

Doug Rife : , November 28, 2016 at 07:17 AM
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 AM
I 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.

I 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.

Giant_galveston -> Nate F... , December 05, 2016 at 08:38 PM
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 AM
One should note that the "The racist, sexist, homophobic, xenophobic, Islamaphobic - you name it ... " voted for Obama last time around.

When 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.html

Labor 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.

Gary Anderson : , November 28, 2016 at 09:47 AM
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.

Now he has to act instead of just talk out of both sides of his mouth. That should not be as easy to do.

C Jones : , November 28, 2016 at 10:31 AM
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).
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.
Bob Salsa : , November 28, 2016 at 12:48 PM
Sure they're angry, and their plight makes that anger valid.

However, 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.

Lars : , November 28, 2016 at 05:58 PM
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 AM
Tim'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?

Somewhat 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.

JohnR : , November 29, 2016 at 12:07 PM
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 PM
Clinton 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.

Now, 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.

Rick McGahey : , November 30, 2016 at 02:44 PM
"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-employment

That 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.

Sandra Williams : , December 01, 2016 at 12:20 AM
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 AM
I 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 Duy
Giant_galveston -> Robert Hurley... , December 05, 2016 at 08:32 PM
Couldn't agree more.
RJ -> Robert Hurley... , December 06, 2016 at 11:26 PM
No one should advocate illegal immigration. If you care about being a nation of laws.
olga.shaumyan@gmail.com : , December 01, 2016 at 06:13 PM
I 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 AM
Just 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.

Still, 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.

Procopius : , December 05, 2016 at 08:40 PM
"The tough reality of economic development is that it will always be easier to move people to jobs than the jobs to people."

This 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.

Kim Kaufman : , December 07, 2016 at 10:03 PM
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."

I 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.

IHiddenDragon : , December 10, 2016 at 09:01 AM
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.

Lincoln 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

IHiddenDragon : , December 10, 2016 at 09:05 AM
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.

Besides, 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.

Jesse : , December 26, 2016 at 11:08 AM
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.

But 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.

c1ue : , December 26, 2016 at 12:11 PM
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.

[Dec 26, 2016] Someone 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.

Notable quotes:
"... Someone 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. ..."
"... 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. ..."
Dec 26, 2016 | economistsview.typepad.com
Lincoln / McKinley tariffs...
Economists are still oblivious to the devastation created by 40 years of free trade.

Someone 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.

pgl -> Lincoln / McKinley tariffs ... , December 26, 2016 at 11:25 AM
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, -1
I 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.

[Dec 26, 2016] Wolf Richter: New Census Data Shows Why the Job Market is Still "Terrible" (as Trump said)

Notable quotes:
"... By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street ..."
"... should head down ..."
"... not ..."
"... A 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. ..."
"... 'Merika is the third most populous nation in the world followed by Indonesia, Brazil, Pakistan and Nigeria. ..."
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 Strether

Lambert 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

A 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.

Arizona Slim , December 26, 2016 at 6:53 am

True.

But the pro-natalists don't want to hear any discussion of overpopulation. Because of all those inconvenient facts.

MtnLife , December 26, 2016 at 8:41 am

A 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.

TG , December 26, 2016 at 9:54 am

Good 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!

jefemt , December 26, 2016 at 10:26 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 .

Ed , December 26, 2016 at 11:10 am

Alot 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.

sd , December 26, 2016 at 6:29 am

Interesting about excluding domestic employees when it would appear there's been a huge surge in nannies as well as home aides since the 1990s.

Larry , December 26, 2016 at 7:35 am

Very true, though most of these positions are by definition crappy jobs.

McWatt , December 26, 2016 at 8:44 am

The key to saving the planet is dealing with population growth.

diptherio , December 26, 2016 at 10:02 am

The 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.

George Phillies , December 26, 2016 at 8:46 am

That 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.

Jack , December 26, 2016 at 9:10 am

This 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.

diptherio , December 26, 2016 at 10:13 am

Did 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.

Pat , December 26, 2016 at 10:30 am

Call 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.

Art Eclectic , December 26, 2016 at 10:46 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.

cocomaan , December 26, 2016 at 10:58 am

You 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.

Ed , December 26, 2016 at 11:16 am

I 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.

Enquiring Mind , December 26, 2016 at 11:13 am

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.

[Dec 26, 2016] IBM Promises To Hire 25,000 Americans As Tech Executives Set To Meet Trump

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.

[Dec 26, 2016] Economist's View Charles Dickens on Seeing the Poor

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 AM
Things ($) before people. Wrong!
likbez : , -1
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 ..."

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.

[Dec 23, 2016] The Case for Protecting Infant Industries

Notable quotes:
"... The 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. ..."
"... Nobody 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. ..."
"... This 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. ..."
"... 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. ..."
"... "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. ..."
"... 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." ..."
"... 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. ..."
"... Making 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. ..."
"... "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." ..."
"... 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. ..."
"... 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. ..."
"... 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 ). ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
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...

The 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.

DrDick -> sanjait... , December 22, 2016 at 04:52 PM
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... , -1
Japan 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.

Nobody 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.

JohnH -> anne... , December 22, 2016 at 05:06 PM
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."
https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollar

This 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.

John San Vant -> JohnH... , -1
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 PM
"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.

anne -> DrDick... , -1
There really is no "post-industrialization era", no matter what fantasies the Finance, Insurance, and Real Estate sectors want to sell....

[ Interesting assertion. Do develop this further. ]

Greg : , -1
The Long-Term Jobs Killer Is Not China. It's Automation.
( 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

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

December 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....

Greg -> Greg... , December 22, 2016 at 01:08 PM
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.

Making 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.

anne -> Greg... , December 22, 2016 at 01:09 PM
http://cepr.net/blogs/beat-the-press/what-s-different-about-stagnating-wages-for-workers-without-college-degrees

December 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

Peter K. : , -1
http://jaredbernsteinblog.com/inequality-technology-globalization-and-the-false-assumptions-that-sustain-current-inequities/

Inequality, 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

Peter K. : , -1
market monetarist Scott Sumner makes a good point about the post-war years.

http://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.

If Economists hadn't ignored US and World Economic History they would have had a clue : , December 22, 2016 at 07:53 PM
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.

Economists better abandon silly free trade if they want to have any credibility and not be seen as quacks.

Peter K. : , -1
http://www.cnn.com/2016/12/21/politics/donald-trump-tariffs/

Trump 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.

likbez : , December 23, 2016 at 08:25 AM
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.

[Dec 23, 2016] Top Ex-White House Economist Admits 94% Of All New Jobs Under Obama Were Part-Time

Growing inequality. We are already at Gini coefficients normally only found in banana republics.
Notable quotes:
"... 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. ..."
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.

[Dec 21, 2016] The reason Trump won the GOP nomination was exactly because he claimed to reject traditional GOP policies and approaches

Notable quotes:
"... At 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. ..."
"... 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. ..."
"... I 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." ..."
"... But they still tried to push through Social Security privatization even though everyone is against it. ..."
"... 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. ..."
"... 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. ..."
"... trump 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. ..."
"... 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. ..."
"... And 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. ..."
"... 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. ..."
"... 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). ..."
"... Second 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. ..."
"... The 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. ..."
Dec 21, 2016 | economistsview.typepad.com
DeDude -> jonny bakho... December 20, 2016 at 07:40 AM
At 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!

I 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.

JohnH -> DeDude... , December 20, 2016 at 08:04 AM
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.

About the only thing that can derail Trump is a big recession in 2019.

DrDick -> DeDude... , December 20, 2016 at 08:18 AM
"The reason Trump won the GOP nomination was exactly because he claimed to reject traditional GOP policies and approaches."

While 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.

DeDude -> DrDick... , December 20, 2016 at 08:35 AM
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 AM
trump 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 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.

yuan -> DeDude... , December 20, 2016 at 11:36 AM
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 AM
And that is the least of the damage they will inflict.
New Deal democrat said in reply to pgl... , December 20, 2016 at 05:10 AM
Following 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%.

If 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?

pgl -> New Deal democrat... , December 20, 2016 at 06:04 AM
"is a debt-deflationary wage-price spiral inevitable?"

Good 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.

New Deal democrat said in reply to pgl... , December 20, 2016 at 06:28 AM
We're doomed.
DrDick -> New Deal democrat... , December 20, 2016 at 08:19 AM
I knew that immediately after the election.
JF -> DrDick... , December 20, 2016 at 01:07 PM
And 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."

If 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.

JF -> Peter K.... , December 20, 2016 at 01:10 PM
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 PM
EMike said it about Bernie..... no soup for you!

For 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.

DeDude -> pgl... , December 20, 2016 at 07:49 AM
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).

Second 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.

pgl -> DeDude... , December 20, 2016 at 07:55 AM
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 AM
like 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.

https://www.brookings.edu/blog/ben-bernanke/2016/05/13/ending-too-big-to-fail-whats-the-right-approach/

JF -> yuan... , -1
The 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

[Dec 21, 2016] Bad News for America's Workers

Dec 21, 2016 | economistsview.typepad.com
anne : , December 20, 2016 at 05:34 AM
https://www.project-syndicate.org/commentary/trump-economy-hurts-workers-by-joseph-e--stiglitz-2016-12

December 19, 2016

Bad News for America's Workers
By JOSEPH E. STIGLITZ

NEW 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....

anne -> anne... , December 20, 2016 at 05:36 AM
https://www.theguardian.com/business/2016/dec/19/what-the-us-economy-doesnt-need-from-donald-trump

December 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 - Guardian

As 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....

Fred C. Dobbs : , December 20, 2016 at 05:37 AM
Millennials aren't lazy, they're workaholics
http://www.bostonglobe.com/business/2016/12/19/millennials-aren-lazy-they-workaholics/3ZD86pLBYg954qUEYa3SUJ/story.html?event=event25
via @BostonGlobe - Katie Johnston - December 20, 2016

As 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.


Get Talking Points in your inbox:

An afternoon recap of the day's most important business news, delivered weekdays.

Sign Up

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." ...

reason -> Fred C. Dobbs ... , December 20, 2016 at 05:44 AM
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 AM
It never concerned me (much) whether I
was 'doing better' than my parents, but
as a parent, my children's success does
concern me. Go figure.
point -> reason ... , December 20, 2016 at 06:17 AM
There does seem to be a fruitful direction to take in "generational" analysis, though.

It 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.

Pinkybum -> reason ... , December 20, 2016 at 09:59 AM
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 PM
Or Clinton supporters like pgl Krugman talking about Bernie Bros.
Pinkybum -> Peter K.... , December 20, 2016 at 06:39 PM
I know you love Krugman really.
Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 06:03 AM
Today's children face tough prospects
of being better off than their parents
http://stanford.io/2ghwtmj
via @Stanford - Dec 8

Parents 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.

http://www.equality-of-opportunity.org/

Fred C. Dobbs : , December 20, 2016 at 06:20 AM
Which Trump Will the World See?
http://nyti.ms/2i4v5UT
NYT - DESMOND LACHMAN - Dec 20

One 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/2i4tuye

Much 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.)

Peter K. -> Fred C. Dobbs ... , December 20, 2016 at 08:05 AM
"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."

Centrist 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.)

https://www.project-syndicate.org/commentary/international-cooperation-for-trumps-economic-plan-by-mohamed-a--el-erian-2016-12

DeDude -> Fred C. Dobbs ... , December 20, 2016 at 08:21 AM
"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,"

Exactly, 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.

RGC -> Fred C. Dobbs ... , December 20, 2016 at 10:02 AM
This is a very misleading presentation.

"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.

https://en.wikipedia.org/wiki/Sectoral_balances

DeDude -> RGC... , December 20, 2016 at 11:34 AM
"a federal deficit increase that exceeds a trade deficit increase means greater public savings."

Or "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.

RGC -> DeDude... , December 20, 2016 at 11:42 AM
The equation includes all exchanges.
anne : , December 20, 2016 at 06:36 AM
http://cepr.net/blogs/beat-the-press/how-to-get-new-drugs-at-generic-prices

December 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.nytimes.com/2016/12/19/health/harnessing-the-us-taxpayer-to-fight-cancer-and-make-profits.html

** http://www.thebodypro.com/content/78658/1000-fold-mark-up-for-drug-prices-in-high-income-c.html

-- Dean Baker

anne -> anne... , December 20, 2016 at 06:43 AM
http://www.nytimes.com/2016/12/19/health/harnessing-the-us-taxpayer-to-fight-cancer-and-make-profits.html

December 18, 2016

Harnessing the U.S. Taxpayer to Fight Cancer and Make Profits
By MATT RICHTEL and ANDREW POLLACK

Enthusiasm 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....

Fred C. Dobbs : , December 20, 2016 at 06:46 AM
Paul Krugman ‏✔ @paulkrugman · 8 minutes ago

Are 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/

Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 06:47 AM
https://twitter.com/paulkrugman/status/811219022695890948
Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 07:15 AM
(Is there also a place for Jim Cramer?)

Kudlow 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 18

President-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. ...

Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 04:05 PM
Kudlow & Cramer (was) a CNBC American business
and politics television program hosted by
conservatives Lawrence Kudlow and Jim Cramer, which aired weekdays from 2002 to 2005. (Wikipedia)
Peter K. -> Fred C. Dobbs ... , December 20, 2016 at 07:32 AM
"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/"

Maybe pgl will insult Krugman like he insulted Bernstein who pgl said was soft on Kudlow.

pgl -> Peter K.... , December 20, 2016 at 07:58 AM
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 AM
It's funny how you refuse to stand up for your own arguments.

Your inconsistency reminds me of Kudlow in a way.

DeDude : , December 20, 2016 at 07:16 AM
What is the appropriate response when an adversary throws the election to ensure their favorite candidate becomes our president?

http://www.vox.com/world/2016/12/20/14001118/putin-russia-hack-dnc-clinton-trump-election-podesta-emails

Peter K. -> DeDude... , December 20, 2016 at 07:34 AM
Whip 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 AM
Oh buh-hu-hu. Get over it and stop the whining.

You 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.

anne : , December 20, 2016 at 07:32 AM
http://cepr.net/blogs/beat-the-press/someone-has-to-tell-john-williams-inflation-is-not-accelerating

December 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.

* http://cepr.net/blogs/beat-the-press/men-who-don-t-work-when-did-economists-stop-being-wrong-about-the-economy

** http://cepr.net/blogs/cepr-blog/the-rise-of-involuntary-part-time-employment-by-race-gender-age-industry-and-occupation

*** http://www.nytimes.com/2016/12/20/upshot/feds-john-williams-feels-uncertainty-among-business-leaders.html

-- Dean Baker

anne -> anne... , December 20, 2016 at 07:34 AM
https://fred.stlouisfed.org/graph/?g=cbCB

January 15, 2016

Consumer Price Index Less Food and Energy & Consumer Price Rent Index, 2000-2016

(Percent change)


https://fred.stlouisfed.org/graph/?g=cbCD

January 15, 2016

Consumer Price Index Less Food and Energy & Consumer Price Rent Index, 2000-2016

(Indexed to 2000)

Fred C. Dobbs : , December 20, 2016 at 07:36 AM
(Only 4 billionaires though,
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, 2016

President-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. ...

Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 08:31 AM
The 5 richest Cabinet members of all time http://on.mktw.net/2h8iBvr

(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.

Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 09:34 AM
'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.'

So, 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.

Peter K. : , December 20, 2016 at 08:08 AM
Mohamed A. El-Erian on Trump's macro and international economics.

https://www.project-syndicate.org/commentary/international-cooperation-for-trumps-economic-plan-by-mohamed-a--el-erian-2016-12

This 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?

Peter K. -> Peter K.... , December 20, 2016 at 08:11 AM
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.

Her infrastructure spending, such as it was, would have provided more automatic stabilizers and helped give the Fed room to lower rates later on.

Peter K. -> Peter K.... , December 20, 2016 at 08:14 AM
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.

They 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.

im1dc : , December 20, 2016 at 08:21 AM
Good News For Guys and the Gals that love them and outstandingly clever science

"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..."

Fred C. Dobbs -> im1dc... , December 20, 2016 at 01:40 PM
Light therapy effectively treats early prostate
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.htm

Padeliporfin 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/abstract

Peter K. : , December 20, 2016 at 08:22 AM
Krugman:

http://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

http://www.bradford-delong.com/2016/12/is-the-problem-one-of-insufficient-market-wages-inadequate-social-insurance-polanyian-disruption-of-patterns-of-life-.html

Peter K. -> Peter K.... , December 20, 2016 at 08:24 AM
From a New York Times article on the growing popularity of the universal basic income idea.

http://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.

Peter K. -> Peter K.... , December 20, 2016 at 08:27 AM
Krugman discusses the 1930s but fails to recall how the Great Depression helped lead to the rise of National Socialism and Hitler.

He forgets Keynes's The Economic Consequences of The Peace.

https://en.wikipedia.org/wiki/The_Economic_Consequences_of_the_Peace

Peter K. -> Peter K.... , December 20, 2016 at 08:32 AM
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.

"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.

im1dc : , December 20, 2016 at 08:29 AM
Not expecting this, but here it is anyway

The 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..."

im1dc : , December 20, 2016 at 08:59 AM
Item #1 of 3 in your Briefing that explains THE WAY BACK

http://www.nbcnews.com/politics/first-read/single-greatest-force-american-politics-partisanship-n698186

"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..."

im1dc -> im1dc... , December 20, 2016 at 09:01 AM
Item #2 of 3 of THE WAY BACK briefing

same 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."

im1dc -> im1dc... , December 20, 2016 at 09:02 AM
Item #3 of 3 of THE WAY BACK briefing

same 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

im1dc : , December 20, 2016 at 09:12 AM
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.

There you have it, your assignment for the next next Presidential Election.

im1dc -> im1dc... , December 20, 2016 at 09:23 AM
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.

IOW, 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.

im1dc : , December 20, 2016 at 09:40 AM
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 Inequality

http://www.nbcnews.com/business/business-news/why-donald-trump-could-spell-doom-ceo-pay-transparency-n698156

"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..."

Observer : , December 20, 2016 at 09:48 AM
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.


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

Fred C. Dobbs -> Observer... , December 20, 2016 at 11:56 AM
Submarines deal: Why is
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/6f85752a58e5a7afa5472c0ac5453065

A 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)

Fred C. Dobbs -> Fred C. Dobbs ... , December 20, 2016 at 12:30 PM
Fun facts: (Wikipedia)

Shortfin 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

ilsm -> Fred C. Dobbs ... , December 20, 2016 at 04:12 PM
Super batteries, high efficiency motor generators, materials......

going 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'............

im1dc : , December 20, 2016 at 10:05 AM
From the GOPsters Playbook 'First move on the poor to deny necessities of life'

Wisconsin, 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

im1dc : , December 20, 2016 at 10:10 AM
Gee, what a surprise...more lying disingenuousness from Republicans in D.C.

2016 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

im1dc -> im1dc... , December 20, 2016 at 10:13 AM
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 AM
Embracing xenophobia is not the way for Americans

US immigration reform debate - 2h ago

"Wisconsin Gov. Scott Walker asks Donald Trump for more control over refugees - AP"

Read more on madison.com

ilsm -> im1dc... , December 20, 2016 at 04:16 PM
let's have the committees read the wikileaks' stuff into the congressional record!
anne : , December 20, 2016 at 10:30 AM
http://www.nytimes.com/2016/12/19/opinion/how-republics-end.html

December 18, 2016

How Republics End
By Paul Krugman

Roman 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

anne -> anne... , December 20, 2016 at 10:31 AM
http://erenow.com/ancient/in-the-name-of-rome-the-men-who-won-the-roman-empire/7.html

2003

In the Name of Rome: The Men Who Won the Roman Empire
By Adrian Goldsworthy

General 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....

ilsm -> anne... , December 20, 2016 at 04:18 PM
Anne, the analogy to the Roman republic is so far fetched.

I am deeply dismayed with pk.

anne -> anne... , December 20, 2016 at 10:36 AM
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.

Though Krugman has mentioned Goldsworthy before, I only began to read "In the Name of Rome" yesterday.

im1dc : , December 20, 2016 at 10:43 AM
Update re F-35

The Pentagon's fight for the F-35 with Trump has broken into the open

http://www.upi.com/Business_News/Security-Industry/2016/12/20/F-35-program-is-not-out-of-control-JSF-chief-fires-back-at-Trump/9951482251830/

"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..."

ilsm -> im1dc... , December 20, 2016 at 04:22 PM
Before Bogdan came to F-35 he sold the KC 46 (Boeing*) tanker which is going to be a $47B boondoggle.

Development 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.

im1dc : , December 20, 2016 at 10:46 AM
The only problem with Trump and the GOP today is what they think and what they do

THOUGHT OF THE DAY:

"There is always an easy solution for every human problem - neat, plausible, and wrong."

H.L. Mencken

RGC : , December 20, 2016 at 11:02 AM
Stuck

A 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.
......................

http://reason.com/archives/2016/12/10/stuck

anne -> RGC... , December 20, 2016 at 11:10 AM
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.

[ 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. ]

anne : , December 20, 2016 at 11:14 AM
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.html

December 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

anne -> anne... , December 20, 2016 at 11:15 AM
"Mainly Macro" must be divided to post a reference link.
anne -> anne... , December 20, 2016 at 11:33 AM
Having 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.

I 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.

im1dc : , December 20, 2016 at 11:19 AM
The Trump Two-Step

Carlos 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?

https://www.washingtonpost.com/politics/trump-dines-with-carlos-slim-as-relations-warm-with-mexican-leaders/2016/12/19/652ccf7c-c60f-11e6-bf4b-2c064d32a4bf_story.html

"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..."

Fred C. Dobbs -> im1dc... , December 20, 2016 at 11:33 AM
"Do not worry. We are going to build the wall,"
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.
im1dc -> im1dc... , December 20, 2016 at 01:27 PM
Clarification

Carlos 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,"

im1dc : , December 20, 2016 at 01:36 PM
Trump running the country is a train wreck waiting to happen, imo, of course

POLITICS

"China Crisis Was Over Before Trump Even Tweeted About It
President-Elect Would Have Known If He Took Daily Intel Briefing"

ilsm -> im1dc... , December 20, 2016 at 04:26 PM
A crisis is when a CVN goes under.

Losing 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?

Fred C. Dobbs : , December 20, 2016 at 01:50 PM
Obama Races to Empty Guantánamo Before Term's End

Obama Administration Intends to Transfer 17 or 18
Guantánamo Detainees http://nyti.ms/2i9aL0z
NYT - CHARLIE SAVAGE - December 19, 2016

WASHINGTON - 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." ...

ilsm -> Fred C. Dobbs ... , December 20, 2016 at 04:27 PM
7.5 years too slow!

Of course we are growing his Iraq ending!

Good thing we dumped the crook!

anne : , December 20, 2016 at 01:56 PM
December 20, 2016

Valuation

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

anne : , December 20, 2016 at 01:56 PM
http://www.multpl.com/shiller-pe/

Ten 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

anne -> anne... , December 20, 2016 at 01:57 PM
http://www.multpl.com/s-p-500-dividend-yield/

Dividend 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

im1dc : , December 20, 2016 at 01:56 PM
"The Subpoena That Rocked The Election Is Legal Garbage, Experts Say"

http://www.huffingtonpost.com/entry/the-subpoena-that-rocked-the-election-is-legal-garbage-attorney-say_us_58597cd9e4b03904470b0633

"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."

ilsm -> im1dc... , December 20, 2016 at 04:29 PM
Find an expert who actually read the Federal Records Act.

Then find another expert who has held a security clearance and stayed awake for the annual refreshed.

Appeal to unproved authority......

anne : , December 20, 2016 at 01:56 PM
http://www.multpl.com/s-p-500-dividend-yield/

Dividend 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

anne -> anne... , December 20, 2016 at 02:08 PM
Accidentally posted here, should have been and was subsequently posted above.
im1dc : , December 20, 2016 at 03:11 PM
Bogle on factoring in Total Return on stocks vs Speculative Return

http://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."

Mr. Bill : , December 20, 2016 at 03:14 PM
"So many opinions, yet, only one truth".

Mr. Bill (maybe)

Mr. Bill -> Mr. Bill... , December 20, 2016 at 03:18 PM
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 PM
Come to Massachusetts weed is legal!
im1dc -> Mr. Bill... , December 20, 2016 at 04:32 PM
Relax, the Republic will survive, but stay vigilant and active.
Mr. Bill : , December 20, 2016 at 03:22 PM
I 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.

As he slashes his way, destroying Social Security and Medicare.

Mr. Bill -> Mr. Bill... , December 20, 2016 at 03:35 PM
Oh my God, who is a female, doesn't like me much and is totally disgusted with humans, in general.

Mike Pence as president of the new nighted state of merica.

Double, or triple, the security around Trump.

im1dc : , December 20, 2016 at 03:55 PM
About the US Weekly Rig Count - DETAILS

http://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."

im1dc : , December 20, 2016 at 04:19 PM
U.S. Tests Autonomous Swarmboats

aka 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..."

ilsm -> im1dc... , December 20, 2016 at 04:32 PM
If they work as good as a littoral combat ship......

What could go wrong?

ilsm : , -1
Results of the coup:

Unfaithful Electors:

Clinton -5

Trump -2

Cuckoo beats crook! Again.

[Dec 21, 2016] Michigan Lame Duck Legislature

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 pm

What? 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?

run75441 , December 18, 2016 10:24 pm

Actually, 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.

beene , December 19, 2016 7:26 am

Run, 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%.

Beverly Mann , December 19, 2016 9:13 am

The 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.

Warren , December 19, 2016 9:44 am

You 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.

Bill White , December 19, 2016 1:44 pm

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.

[Dec 19, 2016] Michigan unemployment agency made 20,000 false fraud accusations – report

Notable quotes:
"... 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. ..."
"... 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. ..."
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 10:02
It'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 9:09
What 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 9:23
Hell, 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.

And 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?!?

Bailey Wilkins stuinmichigan 12 Feb 2016 21:56
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 12:48
Leering, 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 13:29
With 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?

And 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.

Jim Uicker 12 Feb 2016 13:51
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.

Before 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.

Jefferson78759 12 Feb 2016 13:55
This is the GOP "governing"; treat the average person like a criminal, "save" money on essential infrastructure like water treatment, regardless of the consequences.

I 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.

MaryLee Sutton Henry 12 Feb 2016 22:30
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 13:27
My 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 right
Outragously Flawless 14 Feb 2016 9:42
I 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

[Dec 11, 2016] Comic Book Hayek The Planners Promise Utopia

Notable quotes:
"... I 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 ..."
"... 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. ..."
"... A Rovian strategy - conceal your weakness by attacking others on precisely that issue. ..."
"... 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. ..."
"... 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. ..."
"... I agree that "accuse the other side of doing what you are doing" is a familiar ploy of the right. ..."
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 .

continued .

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 am

I 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.

Sandwichman , December 10, 2016 12:40 pm

I 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.

Barkley Rosser , December 10, 2016 1:21 pm

One 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.

psychohistorian , December 10, 2016 3:08 pm

To 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.

coberly , December 10, 2016 6:41 pm

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.

[Dec 07, 2016] Economic Growth in the United States: A Tale of Two Countries

Notable quotes:
"... Our first finding-a surge in income inequality ..."
"... Our second finding-policies to ameliorate income inequality fall woefully short ..."
"... Our third finding-comparing income inequality among countries is enlightening ..."
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:

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)

View blog reactions

--> -->
Comments Feed You 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"

The 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.

Denis Drew -> pgl... , December 06, 2016 at 02:44 PM
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.

http://ontodayspage.blogspot.com/2016/11/first-100-days-progressive-states-agenda.html

sanjait -> pgl... , December 06, 2016 at 02:54 PM
"Alas, I do not trust Trump to push for this agenda. I hope my distrust is misplaced."

I 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.

Paul Mathis -> pgl... , December 06, 2016 at 03:35 PM
Fox Noise Viewers and Trump Voters

Are 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.

The Rage : , December 06, 2016 at 12:43 PM
This is just capitalism.
DrDick -> The Rage... , December 06, 2016 at 12:46 PM
No, it is unjust capitalism (redundant, I know).
The Rage -> DrDick... , December 06, 2016 at 01:00 PM
All capitalism is "unjust".
pgl -> The Rage... , December 06, 2016 at 01:43 PM
You 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 PM
Then why were you for Hillary over Sanders? Doesn't make sense.

Did PGL get woke???

LOL

Or is it just that a Republican is in the White House?

pgl -> Peter K... , December 06, 2016 at 02:34 PM
Snore!
DrDick -> The Rage... , December 06, 2016 at 02:40 PM
As I said, redundant.
anne : , December 06, 2016 at 12:45 PM
http://www.nytimes.com/2016/12/06/business/economy/a-bigger-economic-pie-but-a-smaller-slice-for-half-of-the-us.html

December 6, 2016

Economic Pie Grows, but Half of U.S. Gets Smaller Slice
By PATRICIA COHEN

In 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.

Fred C. Dobbs -> anne... , December 06, 2016 at 12:50 PM
A Bigger Economic Pie, but a Smaller Slice
for Half of the U.S. http://nyti.ms/2hdlnuU
NYT - PATRICIA COHEN - December 6

Even 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." ...

DrDick : , December 06, 2016 at 12:46 PM
Damn, it is even worse than I thought, and I thought I was a pessimist.
sanjait -> DrDick... , December 06, 2016 at 02:55 PM
Yup, hard not to get discouraged in these times...
anne : , December 06, 2016 at 12:49 PM
http://www.nytimes.com/2016/12/06/business/economy/a-dilemma-for-humanity-stark-inequality-or-total-war.html

December 6, 2016

A Dilemma for Humanity: Stark Inequality or Total War
By EDUARDO PORTER

Drawing on history, Walter Scheidel of Stanford argues in a coming book that only all-out war might fundamentally alter how resources are distributed.

Fred C. Dobbs -> anne... , December 06, 2016 at 01:05 PM
(Thinking the unthinkable.)

NYT: 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. ...

Fred C. Dobbs -> Fred C. Dobbs... , December 06, 2016 at 01:40 PM
Hmmm. At some point, the powers that
be may want to organize a gigantic
apocalyptical world-wide conflict
that does NOT go nuclear because
that would be Really Excessive.
mrrunangun -> Fred C. Dobbs... , December 06, 2016 at 02:10 PM
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 PM
http://gabriel-zucman.eu/files/PSZ2016.pdf

December 2, 2016

Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel Zucman

Abstract

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.

anne -> anne... , December 06, 2016 at 03:34 PM
http://gabriel-zucman.eu/files/PSZ2016.pdf

December 2, 2016

Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel Zucman

Conclusion

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.

Peter K : , December 06, 2016 at 01:18 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."

Krugman:

"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."

sanjait -> Peter K... , December 06, 2016 at 02:59 PM
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.

Not 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.

pgl -> sanjait... , December 06, 2016 at 03:07 PM
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."

Gotta 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.

sanjait -> Peter K... , December 06, 2016 at 03:00 PM
ACA and Hillary's family support policies were huge.

Calling 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.

pgl -> sanjait... , December 06, 2016 at 03:08 PM
"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."

People 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.

Peter K -> Peter K... , December 06, 2016 at 01:50 PM
http://www.cc.com/full-episodes/np0e6l/the-daily-show-with-trevor-noah-december-5--2016---van-jones-season-22-ep-22032

Last night's Daily Show.

Van Jones is 15 minutes in.

sanjait -> Peter K... , December 06, 2016 at 03:02 PM
Peter K ... light on policy, but heavy on grudges. Epitomizing the more-progressive-than-thou crowd.
pgl -> sanjait... , December 06, 2016 at 03:09 PM
Wow - 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 "

"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%
10-11-12-13-14-15-16

If 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?

sanjait : , December 06, 2016 at 03:06 PM
Good and important stuff.

Decomposed 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.

pgl -> sanjait... , December 06, 2016 at 03:12 PM
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 PM
How 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 : , -1
One 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!

[Dec 05, 2016] The Democratic Party Presidential Platform of 1996 – On Immigration

Blast from the past. Bill Clinton position on illegal immegtation.
Notable quotes:
"... 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. ..."
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.

[Dec 02, 2016] Since 2014 The US Has Added 571,000 Waiters And Bartenders And Lost 34,000 Manufacturing Workers Zero Hedge

Notable quotes:
"... 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. ..."
"... 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. ..."
"... 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. ..."
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.

[Nov 27, 2016] A New Movement in Liberal Economics That Could Shape Hillary Clinton's Agenda by NEIL IRWIN

Notable quotes:
"... 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. ..."
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.

[Nov 21, 2016] Michael Hudson Donald Trump Wants to Make the 1% Even Richer

Notable quotes:
"... J is for Junk Economics: A Survivor's Guide to Economic Vocabulary in an Age of Deception. ..."
"... 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 ..."
"... 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. ..."
"... 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 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. ..."
"... 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. ..."
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.

goedelite fjwhite link

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."

Who 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.

fjwhite goedelite 38 minutes ago
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. ;=)

The 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.

Capitalism's Finest link
REAL ECONOMICS DICTIONARY
lobdillj link
I think Hudson misspoke when at about 11:53 he says, "and the wages are going to go up".

Matt lobdillj link

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.

What 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.

Ellis lobdillj link
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 link
The 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).

Trillions 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.

Rob M link
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.

The 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.

Kiers Rob M link
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 link
That'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.

[Nov 19, 2016] The global revolt against elites is not just driven by revulsion and loss of jobs. The era of neoliberalism is over. The era of neonationalism has just begun.

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.
Notable quotes:
"... 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 ..."
"... 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. ..."
"... two factors (or three, I guess) have contributed to this state of despair: offshoring and outsourcing, and technology. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... Regional inequality and globalization are the principal drivers in Japanese politics, too, along with a number of social drivers. ..."
"... 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 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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.' ..."
"... 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. ..."
"... 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. ..."
"... 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). ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... . 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. ..."
"... 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. ..."
"... 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? ..."
"... "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." ..."
"... "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." ..."
"... Foreign Affairs ..."
"... "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. ..."
"... "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." ..."
"... 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. ..."
"... 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.html ..."
"... 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. "" ..."
Nov 19, 2016 | crookedtimber.org

dbk 11.18.16 at 6:41 pm 130

Bruce Wilder @102

The 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.

.

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."

https://www.theguardian.com/commentisfree/2016/nov/17/american-neoliberalism-cornel-west-2016-election

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."

https://theintercept.com/2016/11/18/the-stark-contrast-between-the-gops-self-criticism-in-2012-and-the-democrats-blame-everyone-else-posture-now/

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 @147

You 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.html

So 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/

[Nov 19, 2016] How Inequality Found a Political Voice

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

[Nov 19, 2016] Men arent interested in working at McDonalds for $15 per hour instead of $9.50. What they want is... steady, stable, full-time jobs that deliver a solid middle-class life

Notable quotes:
"... 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. ..."
"... And 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"? ..."
"... 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 19, 2016 | profile.theguardian.com
goodtable, 3d ago

A 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

EnglishMike -> goodtable 3d ago
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... Reply
garrylee 3d ago
"Are we turning our backs on the age of enlightenment?".

And 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"?

Bazz Leaveblank -> garrylee 3d ago
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.

I 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 :)

aronDi 3d ago
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

In 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 )

Benedict@Large November 17, 2016 at 9:29 am

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.html

PGL 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 30

Great 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."

http://www.nytimes.com/2014/04/28/business/economy/recovery-has-created-far-more-low-wage-jobs-than-better-paid-ones.html

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."

https://thinkprogress.org/the-1-percent-have-gotten-all-the-income-gains-from-the-recovery-6bee14aab1#.1frn3lu8y

http://www.nytimes.com/2015/03/14/upshot/wall-street-bonuses-vs-total-earnings-of-full-time-minimum-wage-workers.html

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 am

Not sure if Trump realizes this but there is already a blueprint for creating infrastructure jobs. (hat tip SK)

http://www.nytimes.com/roomfordebate/2016/07/11/are-we-ready-for-the-next-recession/a-guaranteed-federal-jobs-program-is-needed

""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

"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.

lyle November 13, 2016 at 8:25 am

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

I'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.

Distrubed Voter November 5, 2016 at 6:21 am

Joseph 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.

craazyboy November 5, 2016 at 8:43 am

The 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.

sgt_doom November 5, 2016 at 1:31 pm

In 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!)

a different chris November 5, 2016 at 8:40 am

Ah 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.

EndOfTheWorld November 5, 2016 at 11:11 am

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.

Randy November 5, 2016 at 8:53 am

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.

Moneta November 5, 2016 at 8:59 am

If 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.

Steve H. November 5, 2016 at 10:47 am

Thank Warren Mosler, wouldn't be there without his direct support.

EndOfTheWorld November 5, 2016 at 7:32 am

Well, little UMKC can claim to be pretty much "cutting edge" in economics with these two stalwarts on their faculty.

Benedict@Large November 5, 2016 at 9:32 am

The 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.

Amateur Socialist November 5, 2016 at 9:14 am

Thanks 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.

susan the other November 5, 2016 at 11:04 am

fun to learn how Hudson fired Greenspan way back when

EndOfTheWorld November 5, 2016 at 11:08 am

lol "Free trade" is Orwellian word usage.

King Arthur November 5, 2016 at 11:49 am

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.

BecauseTradition November 5, 2016 at 12:29 pm

The 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?

Steve in Dallas November 5, 2016 at 12:46 pm

I 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…

Ivy November 5, 2016 at 1:35 pm

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-earners

October 27, 2016

Inequality As Policy: Selective Trade Protectionism Favors Higher Earners
By Dean Baker

Globalization 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...

JohnH -> anne... -1
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.html

Now 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-laggard

Kocherlakota 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-men

October 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://www.nytimes.com/2016/10/23/opinion/campaign-stops/men-need-help-is-hillary-clinton-the-answer.html

** http://jaredbernsteinblog.com/more-on-the-non-mystery-of-non-work-germany-v-us/

*** http://cepr.net/blogs/beat-the-press/men-who-don-t-work-when-did-economists-stop-being-wrong-about-the-economy

-- Dean Baker

Reply Tuesday, anne -> anne... , October 25, 2016 at 05:10 AM
http://cepr.net/blogs/beat-the-press/men-who-don-t-work-when-did-economists-stop-being-wrong-about-the-economy

September 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.

JohnH -> anne... , -1
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

Social 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.

PhilU October 21, 2016 at 3:34 pm

I 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/

Nekto October 21, 2016 at 6:45 pm

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.

2016 1020chart1

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.

2016 1020chart2

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.

2016 1020chart3

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

[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

Crooked Timber

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 pm
Aren'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 pm
It 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 am
Horrible.

Iowa State's president has been under fire:
http://www.iowastatedaily.com/news/politics_and_administration/campus/article_09652364-8b0a-11e6-ac12-5741764bf660.html

William Timberman 10.11.16 at 3:05 am
From 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."

Excellent 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.

kidneystones 10.11.16 at 3:42 am
Part of class? Yes, why not that too.

William Timberman puts his finger right into the wound.

Sebastian H 10.11.16 at 5:01 am
The whole thing is crazy, but I can't get past the $20,000 security deposit for a rental home.

What kind of a house is that?

Louis Proyect 10.11.16 at 11:19 am
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 pm
As 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?

Sorry if this is not the most productive contribution, but I am wondering.

steve 10.11.16 at 7:12 pm
Corruption is a general term for premeditated unethical actions. Embezzlement would be a specific criminal change.
J-D 10.11.16 at 8:58 pm
I 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 am
What 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 am
A 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 am
Thanks.
LaRoi Lawton 10.12.16 at 2:12 pm
This 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 pm
This 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

"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.

cnchal October 7, 2016 at 6:20 pm

When 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.

NY Union Guy October 7, 2016 at 4:16 pm

RE: 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.

jypsi October 7, 2016 at 4:49 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.

Katniss Everdeen October 7, 2016 at 6:04 pm

Absolutely–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.

polecat October 7, 2016 at 6:30 pm

…the tell is there's nary a scratch on the bed liner !

Kurt Sperry October 7, 2016 at 7:27 pm

Yes, 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.

cnchal October 7, 2016 at 6:58 pm

Lots of times it's because they have motorized entertainment that only a truck can haul.

polecat October 7, 2016 at 8:56 pm

well ..it's 'entertainment' until they break something …. like their body !!

MUST GO FASTER ……

cnchal October 7, 2016 at 9:51 pm

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

The "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?)

RZwarich 10/03/16 07:21 AM
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

RZ, 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.

RZwarich 10/03/16 07:41 AM
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 am

David 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.

BecauseTradition October 1, 2016 at 12:52 pm

The 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!

Jomo October 1, 2016 at 2:28 pm

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

The 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.
The guardian is all for this in its own workplace,however

Reply
Clive September 29, 2016 at 7:43 am

The 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
paul September 29, 2016 at 7:52 am

The 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
DJG September 29, 2016 at 9:22 am

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

http://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
Jim Haygood September 29, 2016 at 8:14 am

The 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.

http://www.nytimes.com/2016/09/29/upshot/an-online-education-breakthrough-a-masters-degree-for-a-mere-7000.html

Creative destruction, comrades: Who is Joe Schumpeter?

Reply
Portia September 29, 2016 at 8:24 am

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

Here 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.

Damian September 28, 2016 at 7:35 am

The 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.

Jim A. September 28, 2016 at 7:37 am

Hmm…Because wages are "sticky downwards" it would be helpful to see the inflation rate on that first chart.

Reply
Ignim Brites September 28, 2016 at 8:35 am

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.

Steve H. September 28, 2016 at 8:05 am

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 mobility

Saturday, 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

anne -> RGC... , Sunday, September 25, 2016 at 09:40 AM
Really important essay.

[Sep 26, 2016] Another way of eliminating employees and forcing the customer to do the work

Nota