Monday Morning Reads

Good Morning!

and Happy Native Americans’ Day!

The second Monday of October annually marks Columbus Day in many parts the United States but not all states or region follow this observance. Instead, they celebrate other events on the day. For example, South Dakota’s official holiday on this date is Native Americans’ Day (also known as Native American Day), while people in Berkeley, California, celebrate Indigenous People’s Day.

I think it’s a great idea to switch the current federal holiday out to a celebration of indigenous cultures or maybe find a better thing to celebrate!

BTW, National Coming Out Day is Tomorrow.   That’s something to remember as you read that Speaker Boehner is threatening to withold funds from the Justice Department if that don’t vigorously enforce DOMA.  There he goes again!!!  The Republican Jobs Agenda is just always topmost on the priority list.

“We’re going to take the money away from the Justice Department, who’s supposed to enforce it, and we’ll use it to enforce the law,” Boehner told the conservative Value Voters Summit.

Boehner is engaged in an ongoing dispute with Attorney General Eric Holder over his refusal to defend in court the Defense of Marriage Act. President Obama has taken the stance that the law is unconstitutional. While the Justice Department usually defends laws passed by Congress against legal challenges, the Obama administration has stopped defending DOMA while Democrats work to repeal the law.

In March, Boehner announced that if Obama wouldn’t defend DOMA, he would, hiring a private law firm to defend it on behalf of the House.

“As the Speaker of the House, I have a constitutional responsibility. I’ve raised my hand to uphold and defend the Constitution of the United States and the laws of our country,” Boehner said Friday.

You know, he’s all about saving those taxpayer dollars too.  True Story.

Here’s a movement I want to join if this California Republican Nutter would only give me the location where they’re taking on volunteers.  And yes, it’s a REAL tweet.

@RepJackKimble After Value Voters I am more convinced than ever about the radical atheist agenda to secularize Columbus Day

Okay, I’d like to use the next bit of space to clear up a few right wing memes with actual research.  I know, you’re shocked, it’s so unlike me to do so.   First, while Fannie and Freddie exacerbated the meltdown and behaved as irresponsibly as any Wall Streeter, there is absolutely no connection between the meltdown and the Community Reinvestment Act.  I have never been able to figure out how folks jumped the shark to make this connection, but it happened.  I’ll give you the bottom line from the abstract but if you want to chase after the econometrics, feel free to follow the link.

In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality.

We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRA’s effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest.

We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.

Okay, one more meme to shoot down.  You know how all those Republican presidential wannabes are trotting around saying about half of Americans don’t pay taxes and the rich are still burdened?  I’ve shot down some of that argument before, but here’s some further details.  I’m quoting from the executive summary and not the study itself.  Again, you can go into the methodology if you want here.

A recent finding by Congress’ Joint Committee on Taxation that 51 percent of households owed no federal income tax in 2009 [1] is being used to advance the argument that low- and moderate-income families do not pay sufficient taxes. Apart from the fact that most of those who make this argument also call for maintaining or increasing all of the tax cuts of recent years for people at the top of the income scale, the 51 percent figure, its significance, and its policy implications are widely misunderstood.

  • The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.
    In a more typical year, 35 percent to 40 percent of households owe no federal income tax. In 2007, the figure was 37.9 percent. [2]
  • The 51 percent figure covers only the federal income tax and ignores the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay . As a result, it greatly overstates the share of households that do not pay any federal taxes. Data from the Urban Institute-Brookings Tax Policy Center show only about 14 percent of households paid neither federal income tax nor payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year.[3]
  • This percentage would be even lower if federal excise taxes on gasoline and other items were taken into account.
  • Most of the people who pay neither federal income tax nor payroll taxes are low-income people who are elderly, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. (In a year like 2009, this group also includes a significant number of people who have been unemployed the entire year and cannot find work.)
  • Moreover, low-income households as a whole do, in fact, pay federal taxes. Congressional Budget Office data show that the poorest fifth of households as a group paid an average of 4 percent of their incomes in federal taxes in 2007 (the latest year for which these data are available), not an insignificant amount given how modest these households’ incomes are — the poorest fifth of households had average income of $18,400 in 2007. [4] The next-to-the bottom fifth — those with incomes between $20,500 and $34,300 in 2007 — paid an average of 10 percent of their incomes in federal taxes.
  • Even these figures understate low-income households’ total tax burden, because these households also pay substantial state and local taxes. Data from the Institute on Taxation and Economic Policy show that the poorest fifth of households paid a stunning 12.3 percent of their incomes in state and local taxes in 2010.[5]
  • When all federal, state, and local taxes are taken into account,the bottom fifth of households paid 16.3 percent of their incomes in taxes, on average, in 2010. The second-poorest fifth paid 20.7 percent. [6]

I know it’s statistics heavy, but some times that’s the best way to see what is actually going on.  Right wing memes seem to thrive on taking things completely out of context and this one about tax dodging poor people is a doozy.  See exactly how many taxes that get paid that weren’t counted in that famous figure which is an anomaly as it is.

Here’s an interesting article at NYT by David Leonhardt  on how today’s economy makes the Great Depression look like the halcyon days.

Still, the reasons for concern today are serious. Even before the financial crisis began, the American economy was not healthy. Job growth was so weak during the economic expansion from 2001 to 2007 that employment failed to keep pace with the growing population, and the share of working adults declined. For the average person with a job, income growth barely exceeded inflation.

The closest thing to a unified explanation for these problems is a mirror image of what made the 1930s so important. Then, the United States was vastly increasing its productive capacity, as Mr. Field argued in his recent book, “A Great Leap Forward.” Partly because the Depression was eliminating inefficiencies but mostly because of the emergence of new technologies, the economy was adding muscle and shedding fat. Those changes, combined with the vast industrialization for World War II, made possible the postwar boom.

In recent years, on the other hand, the economy has not done an especially good job of building its productive capacity. Yes, innovations like the iPad and Twitter have altered daily life. And, yes, companies have figured out how to produce just as many goods and services with fewer workers. But the country has not developed any major new industries that employ large and growing numbers of workers.

There is no contemporary version of the 1870s railroads, the 1920s auto industry or even the 1990s Internet sector. Total economic output over the last decade, as measured by the gross domestic product, has grown more slowly than in any 10-year period during the 1950s, ’60s, ’70s, ’80s or ’90s.

Perhaps the most important reason, beyond the financial crisis, is the overall skill level of the work force. The United States is the only rich country in the world that has not substantially increased the share of young adults with the equivalent of a bachelor’s degree over the past three decades. Some less technical measures of human capital, like the percentage of children living with two parents, have deteriorated. The country has also chosen not to welcome many scientists and entrepreneurs who would like to move here.

I’m still of the opinion that we should hand out citizenship to any of our highly skill foreign students and do everything we can to keep them here.  I have a feeling I’m in the minority on that opinion, however.

If you want to do some time tripping to a really upsetting period of history for women, here’s The Nation on The Legacy of Anita Hill.  We’re now stuck with this total  jerk on SCOTUS because of people like Joe Biden.  I’ll never forget one of those senators  that let Clarence Thomas get away with it.  They hid the women that could verify her stories and put her squarely in the worst position possible. She handled it with dignity and we all lost.

Anita Hill remains an icon to whom subsequent generations are rightfully indebted. At the same time, she has not remained trapped by her own symbolism or frozen in time. It is sometimes forgotten that she is a respected scholar of contract jurisprudence, commercial law and education policy. She is a prolific author, publishing numerous law review articles, essays, editorials and books. Today, Hill is a professor of social policy, law and women’s studies at Brandeis University. Much of her most recent research has been on the housing market, and her most recent book, published this month, is Reimagining Equality: Stories of Gender, Race, and Finding Home.

It is ironic that the full substance of Hill’s remarkable intellectual presence remains so overshadowed by those fleeting, if powerful, moments of her Senate testimony. If the larger accomplishments of her life aren’t quite as iconic as that confrontation with Clarence Thomas, they nonetheless merit attention by feminists and scholars alike. To begin with, Hill is a remarkably elegant and accessible writer. For those who wish to apprehend the gravitas of her intelligence and dignity, Reimagining Equality would be a good place to start.

Krugman gets the Occupy protestors and has some delightful comments up on the Panic of the Plutocrats.   He eloquently lays out the hype coming from the Cantors and the Bloombergs as well as CNBC and Fox that paints every one upset with their behavior as Leninist.  The descriptions are a hoot but here’s the meat.

The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.

Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.

And then there’s the campaign of character assassination against Elizabeth Warren, the financial reformer now running for the Senate in Massachusetts. Not long ago a YouTube video of Ms. Warren making an eloquent, down-to-earth case for taxes on the rich went viral. Nothing about what she said was radical — it was no more than a modern riff on Oliver Wendell Holmes’s famous dictum that “Taxes are what we pay for civilized society.”

I have one more offering that is just for pure delight. It’s a short bit from the daughter of George Harrison’s Business Manager on what it was like to run the halls of crackerbox palace as a child.

Harrison’s wife, Olivia, always took good care of us and, like her husband, had a gentle, calming disposition. I loved going up the great gothic staircase in the living room to the recording studio on the first floor. I was fascinated by the recording console and the selection of instruments. Sometimes, Harrison would play new music for us and ask for our feedback.

Adjacent to the recording studio was a room with gold records and awards and an Oscar statuette. I remember the exhilarating sensation I got picking up the Oscar earned for “Let It Be” and feeling it weigh down my hand.

When it got late, and Dad was still in meetings, we would go to bed in one of the guest rooms down the hall from the studio with sounds of Harrison’s sitar lulling us to sleep.

You can see I’m full throttle academic today.  What’s on your reading and blogging list today?