The financial elites behind the 2008 financial crisis and housing market meltdown, predictably, have their hands in the housing "recovery":
Monday, March 10, 2014
Saturday, March 8, 2014
Harvard Business Review executive editor & author of "The Myth of the Rational Market," Justin Fox @ HBR:
Six days before the election, the Republican nominee for president attended a fund-raising dinner at a posh New York restaurant. Two-hundred of the country’s richest and most powerful men were on hand. The next day, they were confronted with this atop the front page of one of the city’s leading newspapers:
This particular scan is from the historical-cartoon site HarpWeek, but the drawing has long been in the public domain — it ran in the now-defunct New York World on Oct. 30, 1884. The candidate was James G. Blaine (the droopy-eyed fellow in the center of the picture who is about to dig in to some Lobby Pudding), and the man who subjected him to this harsh treatment was Joseph Pulitzer, who had bought the World the previous year and was rapidly building it into the most popular and powerful newspaper the nation had ever seen.
Friday, March 7, 2014
The comedian's version:
The economist's version:
The economist's version:
Suddenly, or so it seems, inequality has surged into public consciousness — and neither the one percent nor its reliable defenders seems to know how to cope.
Some of the reactions are crazy — it’s Kristallnacht, they’re coming to kill us — with the craziness quite widespread; notice how many billionaires, plus of course the Wall Street Journal, rallied around Tom Perkins. But even the saner-sounding voices evidently have a hard time wrapping their minds around the notion that anyone might find 21st-century finance capitalism a bit, well, unfair.
Saturday, March 1, 2014
Oxford economic historian Kevin O'Rourke dissects the economic mess driven by the Euro, which was clearly a terrible idea from the outset:
The euro area economy is in a terrible mess.
In December 2013 euro area GDP was still 3 percent lower than in the first quarter of 2008, in stark contrast with the United States, where GDP was 6 percent higher. GDP was 8 percent below its precrisis level in Ireland, 9 percent below in Italy, and 12 percent below in Greece. Euro area unemployment exceeds 12 percent—and is about 16 percent in Portugal, 17 percent in Cyprus, and 27 percent in Spain and Greece.
Europeans are so used to these numbers that they no longer find them shocking, which is profoundly disturbing. These are not minor details, blemishing an otherwise impeccable record, but evidence of a dismal policy failure.
The euro is a bad idea, which was pointed out two decades ago when the currency was being devised. The currency area is too large and diverse—and given the need for periodic real exchange rate adjustments, the anti-inflation mandate of the European Central Bank (ECB) is too restrictive. Labor mobility between member countries is too limited to make migration from bust to boom regions a viable adjustment option. And there are virtually no fiscal mechanisms to transfer resources across regions in the event of shocks that hit parts of the currency area harder than others.
Sunday, February 9, 2014
Wednesday, January 29, 2014
Monday, January 20, 2014
A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies. On the one hand we are called to play
the good Samaritan on life's roadside; but that will be only an initial act. One day we must come to see that the whole Jericho road must be transformed so that men and women will not be constantly beaten and robbed as they make their journey on life's highway. True compassion is more than flinging a coin to a beggar; it is not haphazard and superficial. It comes to see that an edifice which produces beggars needs restructuring. A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth.
Martin Luther King
The International Monetary Fund has highlighted the threat posed to the global economy by growing income inequality as the world’s business and political leaders prepare to head off to the World Economic Forum in Davos this week.
Friday, January 17, 2014
Robert Kuttner, piling on @ American Prospect, lowers the bar in considering today's Brooks offering a milestone of sorts:
Well, this is getting to be a habit. Alert readers may recall that a few weeks ago, I wrote a piece about Tom Friedman’s worst column ever, plugging efforts by a billionaire hedge fund friend to persuade college students that their enemy was Social Security.
Now, Friedman’s colleague David Brooks has written an even worse column. It’s really hard to determine Brooks’ worst column ever, since he seems to turn out one every week.
Brooks’ latest piece, in Friday’s Times, begins inauspiciously, “Suddenly, the whole world is talking about income inequality.” (Where has Brooks been, Jupiter?)
Paul Krugman, the "Liberal Conscience" animated by fairly conventional Keynsianism, further diminishes Our Mr. Brooks:
Many people in Washington, even those willing to concede that inequality has been rising rapidly, are uncomfortable talking about the famous 1 percent — perhaps because it sounds too populist, too much like an invitation to crowds with pitchforks. For a long time respectable discussion focused on the top 20 percent; today I see my colleague David Brooks talking about the top 5 percent.But framing the discussion in terms of some broader group is in this case deeply misleading. Here’s what the Piketty-Saez numbers tell us about the top 5 percent (incomes in 2012 dollars):
If you look at the bottom 4 percent of the top 5, you see good but not spectacular income gains. These are the kinds of gains that you might be able to explain in terms of skills, assortative mating, and so on. But the top 1 percent is in a different universe altogether. And in fact the gains within the top 1 percent are concentrated in an even smaller group: this is a Pareto distribution thing, in which the higher the income the greater the percentage gains.The point is that using wider definitions than the one percent is, in effect, diluting the wolves of Wall Street by lumping them in with the upper middle class. Not the same story at all.
Dean Baker @ CEPR Beat the Press challenges the ignorant ramblings of one David Brooks, Big City Newspaper Columnist and Pop Sociologist:
David Brooks is sweating hard trying to defend the one percent against the rest of the country and reality. His column today desperately warns readers:
"Some on the left have always tried to introduce a more class-conscious style of politics. These efforts never pan out. America has always done better, liberals have always done better, when we are all focused on opportunity and mobility, not inequality, on individual and family aspiration, not class-consciousness."
Funny, I thought Social Security, the Fair Labor Standards Act (i.e. the 40-hour workweek), the National Labor Relations Board, and other products of the New Deal were pretty big accomplishments. Much of this was done quite explicitly with a sense of class consciousness. These were all measures that were backed by mass movements that sought to ensure that working people got their share of the economic pie. Good thing we have David Brooks to tell us the opposite.
This is far from the only place where Brooks seems to be at odds with reality. Brooks condemns focusing on inequality because it leads to ineffective policies like raising the minimum wage. He then cites a study by Joseph J. Sabia and Richard V. Burkhauser telling readers:
"Consistent with some other studies, they find no evidence that such raises had any effect on the poverty rates.
"That’s because raises in the minimum wage are not targeted at the right people."
Actually the Sabia and Burkhauser study goes against the overwhelming majority of other studies on the topic as summarized in this analysis by University of Massachusetts professor Arin Dube.
Wednesday, January 1, 2014
A record-low 25 percent of unemployed Americans will receive benefits now that Congress has allowed the federal program to expire, according to data from the Department of Labor compiled by House Democrats on the Ways and Means Committee.
The number is the lowest since the Department of Labor began keeping records in 1946. Before Congress let the federal unemployment benefit-assistance plan expire on Dec. 28, 38 percent of unemployed Americans who paid unemployment taxes were receiving unemployment insurance either through their state or the federal government...
Rand Paul - well-known foe of economic illiteracy - arguing that "extending unemployment benefits to two years does a disservice to the unemployed.":
Rand Ghayad, the economist Paul cites, @The Atlantic, countering that based on his research "there's no reason to cut unemployment benefits:
Economic illiteracy condemns us to well-intentioned, big-hearted, but small-brained
Millions of people are out of work. We all have sympathy for those who are unemployed and I believe it is our moral obligation as a society to take care of those who cannot take care of themselves. Liberal pundits try to argue that Democrats are the only ones who care about the poor and unemployed, but the truth is, caring doesn't help unless it is linked to good policy...
According to a study by Rand Ghayad and William Dickens for the Federal Reserve Bank of Boston, employers will choose a less-skilled worker who has been unemployed for two months over a worker with more skills who has been unemployed for two years. So yes, extending unemployment benefits to two years does a disservice to the unemployed...conservatives who argue for shorter unemployment benefits actually have more concern for the worker than liberals who believe in no limits... (Bold added)
Rand Ghayad, the economist Paul cites, @The Atlantic, countering that based on his research "there's no reason to cut unemployment benefits:
Rand Paul says he cares about the unemployed."...
So why does he want to end unemployment benefits for people who have been out of work for 6 months or longer? Well, Paul cites my work on long-term unemployment as a justification—which surprised me, because it implies the opposite of what he says it does.
Monday, December 30, 2013
Friday, December 27, 2013
Professor Krugman @ NYTs:
More than a million unemployed Americans are about to get the cruelest of Christmas “gifts.” They’re about to have their unemployment benefits cut off. You see, Republicans in Congress insist that if you haven’t found a job after months of searching, it must be because you aren’t trying hard enough. So you need an extra incentive in the form of sheer desperation.
Tuesday, December 24, 2013
Ryan Cooper at WaPo "Plum Line":
Paul Ryan has set everyone’s socks ablaze with a new comment suggesting he wants to shake down the country again over the debt limit. This inevitably inspired a lot of amateur psychoanalysis attempting to figure out whether he was serious or just pandering to the base. Whether that is true is an important thing to figure out, but the deeper subtext here is that the Republican Party continues to organize itself around the kind of austerity agenda that, should they obtain enough power to implement it, would cause another recession immediately, possibly a very bad one.
One of the last handful of honest conservatives, Bruce Bartlett @ NYTs, looks back at the Bush-induced "Obama" deficits:
On Dec. 20, the Brookings Institution economist Justin Wolfers sent out this provocative post on Twitter: “The decline in the budget deficit since 2009 is the largest four-year improvement since the demobilization from WWII.”
I was aware that the deficit was declining sharply, both in nominal terms and as a share of the gross domestic product, but hadn’t thought much about the magnitude. Mr. Wolfers, whose partner Betsey Stevenson is a member of President Obama’s Council of Economic Advisers, is correct, as the data show. Fiscal year 2014 began on Oct. 1.
Congressional Budget OfficeThe Congressional Budget Office further projects that the deficit will fall to just 2.1 percent of G.D.P. in fiscal year 2015, less than it was in fiscal year 2008, when it was 3.1 percent of G.D.P. Thus we will have seen a decline in the deficit of 7.7 percent of G.D.P. over seven years.
There is indeed no comparable period in which the deficit fell as much since the aftermath of World War II for the simple reason that the deficit never grew large enough to drop so much. The largest deficit recorded in the postwar era before 2009 was in 1983, when it reached 6 percent of G.D.P.
After the war, the deficit fell to 7.7 percent in 1946 from 22 percent of G.D.P. in 1945. A surplus of 1.2 percent of G.D.P. was achieved in 1947.
This got me thinking about President Obama’s budgetary record when viewed from 2009. I turned first to the last C.B.O. projection of the George W. Bush administration, which was made on Jan. 7, 2009, and thus includes no Obama policies. The decline in the deficit after 2010 is largely attributable to the assumed expiration of the Bush tax cuts, because the C.B.O. must assume current law and they were set to expire at the end of 2010.
Congressional Budget OfficeWhat’s important to see is that the federal government was going to run the largest deficit since World War II in fiscal year 2009, which began on Oct. 1, 2008, regardless of who became president on Jan. 20, 2009. It was baked in the cake by policies put in place by the Bush administration and the natural rise in spending and fall in revenues resulting from a sharp drop in economic growth and rise in unemployment, which economists call “automatic stabilizers.”
This point was always known by anyone who bothered to look carefully at the data, regardless of how many hand-wringers on both sides of the aisle acted as if the deficit was solely a result of President Obama’s policies. Both because of myopia and because everyone tends to invest the president with far more power than he actually has, there is a tendency to assume that whatever happens on his watch is attributable solely to him.
Sunday, December 22, 2013
Barkley Rosser @ Econospeak:
I know, I know. That every GOP hack who wants to stay on Fox News and so on must relentlessly spout idiotic drivel about the old Heritage Foundation plan cooked up by Stuart Butler back in 1989 and supported by many Republicans, even being adopted successfully in MA by one Mitt Romney as governor, although all shifting into massive opposition when Obama came out for it in an effort to gain GOP support (hah!). So, I should not waste my or anybody else's time pointing out the specific lies and stupidities emitted by any such "pundit."
However, I cannot resist in the case of Charles Krauthammer in the Washington
Friday, December 6, 2013
Jon Stewart supports fast-food workers' strikes, invokes the populist compassion of the new Pope and takes on the wretched, dim-witted, morally obtuse cretins of cable "business" chatter:
Wednesday, November 27, 2013
The new Pope appears to be taking the church back to basics. Reuters via NYTs:
VATICAN CITY — Pope Francis attacked unfettered capitalism as "a new tyranny" and beseeched global leaders to fight poverty and growing inequality, in a document on Tuesday setting out a platform for his papacy and calling for a renewal of the Catholic Church.
The 84-page document, known as an apostolic exhortation, was the first majorwork he has authored alone as pope and makes official many views he has aired in sermons and remarks since he became the first non-European pontiff in 1,300 years in March.
In it, Francis went further than previous comments criticizing the global economic system, attacking the "idolatry of money", and urged politicians to "attack the structural causes of inequality" and strive to provide work, healthcare and education to all citizens.
He also called on rich people to share their wealth. "Just as the commandment
"How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses 2 points?"The pope said renewal of the Church could not be put off and said the Vatican and its entrenched hierarchy "also need to hear the call to pastoral conversion"."I prefer a Church which is bruised, hurting and dirty because it has been out on the streets, rather than a Church which is unhealthy from being confined and from clinging to its own security," he wrote.Italian theologian Massimo Faggioli greeted the work as "the manifesto of Francis" while veteran Vatican analyst John Thavis called it a "Magna Carta for church reform"."The message on poverty sets Pope Francis on a collision course with neo-liberal Catholic thought, especially in the United States," said Faggioli, an expert on the Second Vatican Council and reform in the Catholic Church.
Breadlines are making a comeback. At the NYT's Editorial Page Editor's blog, Teresa Tritch:
The Great Recession was the worst downturn since the Great Depression. And yet, throughout the recent decline and today’s sluggish recovery, conditions have never seemed as bad as they were in the 1930s. Breadlines, for example, have not been commonplace.
That may be about to change.
In an article published on Monday, The Times’s Patrick McGeehan described a line snaking down Fulton Street in Brooklyn last week, with people waiting to enter a food pantry run by the Bed-Stuy Campaign Against Hunger. The line was not an anomaly. Demand at all of New York City’s food pantries and soup kitchens has spiked since federal food stamps were cut on Nov. 1. The cut — which affects nearly all of the nation’s 48 million food stamp recipients — amounts to a loss of $29 a month for a New York City family of three. On the shoestring meal budgets of food stamp recipients, that’s enough for some 20 individual meals, according to the New York City Coalition Against Hunger.
The food stamp cuts are occurring even though need is still high and opportunity low. In a report released today, the Coalition estimates that one-sixth of the city’s residents and one-fifth of its children live in homes without enough to eat. Those numbers have not improved over the past three years. The lack of economic recovery for low income New Yorkers is at odds with gains at the top of the income ladder, reflected in soaring real estate prices, rising stock prices and big Wall Street bonuses.