Monday Reads
Posted: April 1, 2013 Filed under: morning reads | Tags: David Stockman, gold bug hysterics, history of April Fool, inheritance taxes, Le Poisson d'Avril, Mike Konczal 34 Comments
Today is April Fool’s Day so watch out for those sadistic tricksters!! It’s known as April Fish Day in France. I found a vintage French postcard for you so you will know that I’m not April Foolin’ you!!
The origins of April Fools’ Day are obscure. The most commonly cited theory holds that it dates from 1582, the year France adopted the Gregorian Calendar, which shifted the observance of New Year’s Day from the end of March (around the time of the vernal equinox) to the first of January.
According to popular lore some folks, out of ignorance, stubbornness, or both, continued to ring in the New Year on April 1 and were made the butt of jokes and pranks on account of their foolishness. This became an annual tradition, according to this version of events, which ultimately spread throughout Europe.A major weakness of the calendar-change theory is that it fails to account for an historical record replete with traditions linking this time of year to merriment and tomfoolery dating all the way back to antiquity.The Romans, for example, celebrated a festival on March 25 called Hilaria, marking the occasion with masquerades and “general good cheer.”Holi, the Hindu “festival of colors” observed in early March with “general merrymaking” and the “loosening of social norms,” is at least as old.
It’s not unreasonable to suppose that the calendrical changes of the 16th and 17th centuries served more as an excuse to codify a general spirit of frivolity already associated with the advent of spring than as a direct inspiration for April Fools’ Day.
Here’s one of my favorite April Fool’s hoax of all times. It’s from the BBC an it’s broadcast of the Swiss Spaghetti Harvest of 1957.
Today in France, those who are fooled on April 1 are called the “Poisson d’Avril” (the April Fish). A common prank (especially among school-aged children) is to place a paper fish on the back of an unsuspecting person. When the paper fish is discovered, the victim is declared a “Poisson d’Avril.”
While it is not clear of the origins of fish being associated with April 1, many think the correlation is related to zodiac sign of Pisces (a fish), which falls near April.
If you are looking for an easy way to prank your friends or family, doodling or cutting out a paper fish and sticking it on the back of an unsuspecting victim is an easy (though admittedly juvenile) way of commemorating the origins of April Fools’ Day.
Of course as someone who enjoys France in large part because of all the amazing food, my personal favorite part about Poisson d’Avril are the plethora of bakeries and cholocatiers that make fish shaped French pastries and chocolates in honor of the holiday. Carol Gillot, who writes the blog Paris Breakfasts, has a great collection of such fish-shaped treats on her blog.
So, I do have few economics links today to share with you. BB sent me a link to this David Stockman op-ed. I frankly thought it an April Fool’s Day prank by the NYT but it seems Mr. Stockman has been bitten by the gold bug. He appears to be having public fits.
The future is bleak. The greatest construction boom in recorded history — China’s money dump on infrastructure over the last 15 years — is slowing. Brazil, India, Russia, Turkey, South Africa and all the other growing middle-income nations cannot make up for the shortfall in demand. The American machinery of monetary and fiscal stimulus has reached its limits. Japan is sinking into old-age bankruptcy and Europe into welfare-state senescence. The new rulers enthroned in Beijing last year know that after two decades of wild lending, speculation and building, even they will face a day of reckoning, too.
THE state-wreck ahead is a far cry from the “Great Moderation” proclaimed in 2004 by Mr. Bernanke, who predicted that prosperity would be everlasting because the Fed had tamed the business cycle and, as late as March 2007, testified that the impact of the subprime meltdown “seems likely to be contained.” Instead of moderation, what’s at hand is a Great Deformation, arising from a rogue central bank that has abetted the Wall Street casino, crucified savers on a cross of zero interest rates and fueled a global commodity bubble that erodes Main Street living standards through rising food and energy prices — a form of inflation that the Fed fecklessly disregards in calculating inflation.
These policies have brought America to an end-stage metastasis. The way out would be so radical it can’t happen. It would necessitate a sweeping divorce of the state and the market economy. It would require a renunciation of crony capitalism and its first cousin: Keynesian economics in all its forms. The state would need to get out of the business of imperial hubris, economic uplift and social insurance and shift its focus to managing and financing an effective, affordable, means-tested safety net.
So, what are economists saying about this full on meltdown? Business Insider calls the four page essay an “unhinged screed”.
Former Reagan budget director David Stockman has a new book coming out on Tuesday, and he’s warming up the public with a massive piece in today’s New York Times titled Sundown in America, which basically says the future of America bleak because of massive government debts, crony capitalism, bailouts, megabanks, the removal of the gold standard, and even green energy.
The piece can truly be characterized as Hard Money Buzzword Bingo, as Stockman tries to get in as many scare lines as possible.
Check out this one sentence where he talks about bubbles, Wall Street casinos, the Crucifixion of savers, commodities Main Street, a “Great Deformation”, and a rogue central bank:
Instead of moderation, what’s at hand is a Great Deformation, arising from a rogue central bank that has abetted the Wall Street casino, crucified savers on a cross of zero interest rates and fueled a global commodity bubble that erodes Main Street living standards through rising food and energy prices — a form of inflation that the Fed fecklessly disregards in calculating inflation.
It just goes on and on like this, but his final suggestion is to run for the hills:
The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is.
It’s hard to know where to begin poking holes in the whole thing, but probably the most telling and self-contradicting aspect, is the fact that he traces the original sin of the economy back to FDR taking the US off of the gold standard.
Paul Krugman calls him a “cranky old man” which I frankly think should be the new moniker for the republican party. Give up GOP. Take up COM.
Shorter David Stockman:
We’ve been doomed, yes doomed, ever since FDR took us off the gold standard and introduced unemployment insurance. What about those 80 years of non-doom? Just a series of lucky accidents. Now we’re really doomed. I mean it!
Actually, I was disappointed in Stockman’s piece. I thought there would be some kind of real argument, some presentation, however tendentious, of evidence. Instead it’s just a series of gee-whiz, context- and model-free numbers embedded in a rant — and not even an interesting rant. It’s cranky old man stuff, the kind of thing you get from people who read Investors Business Daily, listen to Rush Limbaugh, and maybe, if they’re unusually teched up, get investment advice from Zero Hedge.
Paul Thoma just gives him the wingnut of the day award. Kids Prefer Cheese actually provide some wonky responses and says he’s thrown a massive hissy fit. Stockman really does appear to have views totally disconnected from economic history and reality. I give up everything nice I’ve ever said about him. This one op-ed shows he’s really off his rocker. My favorite characteristic comes from the ever mild mannered Jared Bernstein. Now remember, I’ve been quoting economists only here.
He has a featured piece in today’s NYT which, while about 11.8% absolutely and totally on target, is mostly a horrific screed, an ahistorical, dystopic, Hunger-Games vision of America based on debt obsession and willful ignorance of macroeconomics and the impact of market failure.
The first sign of a problem here comes from a mash-up of statistics in the introduction that looked wrong. I’m not sure what he did, but business investment is up 1.4% per year since early 2000, not 0.8% as Stockman claims, and why start there anyway (he seems to do so because that’s when the stock market last peaked—whatever…)? Actually, business investment has been a pretty strong performer over this expansion, up 6.6% per year since 2009Q3. To measure payroll growth from the early 2000s also masks huge variation. Stockman claims almost no growth annually, but private payrolls are up over 2% per year since they started growing in early 2010.
But here’s the challenge with a piece like this: despite the better statistics you get when you chose different dates, there’s no question that the American economy is seriously underperforming and that bad policy is implicated. It’s just that the culprits aren’t the ones he thinks they are.
In fact, like most crazed rants, it’s hard to pick out the argument, but I think it’s this: for almost a century, economic policy makers have…um…made policy, and that’s led to cheap money, high indebtedness, crony capitalism, and econo-moral-turpitude.
Everyone’s implicated, left and right. Keynes didn’t understand macro, Nixon abandoned the discipline of the gold standard, Bush II spent recklessly, Greenspan and Bernanke’s were and are reckless monetary hippies, even Paul Ryan’s a big spender (!), Obama’s policies are “hopelessly glib” (whatever that means), and the central banks of China and Japan are “monetary roach motels.”
Eisenhower gets some love, presumably for running some budget surpluses, though Clinton’s larger surpluses (as a share of GDP) are not mentioned.
Like I said, I thought the NYT’s as playing April Fool’s Day one day early in not only printing this but giving it so much space!
So, here’s one another economist that I follow regularly on line. I like Mike Konczal from Rorty Bomb because he always sees the bigger context of economics. This ties back to something I wrote about last week that is also something that is a favorite of Cannonfire. There’s the idea that “rentier” capital is different from industrial capital and of course, the productivity provided by labor and natural resources. Here, he discusses the views of the right on its “death tax” vs. the views of the left on its “inheritance tax” proposals.
Beyond specific taxation of rents are the issues of capital and inheritance taxation. It is remarkable how little the taxation of capital income or inheritance came up in the debates over the “fiscal cliff,” even though there were major changes for both. Most of the debate was about how the “rich” should be defined as an income bracket ranging from $250,000 to $1 million, not what kind of system we want for the taxation of capital or inheritance. But given that, according to IRS data, the top 0.01 percent of income earners get more than 80 percent of their income from capital income, these issues have major importance to the distribution of income in this country.
It is unclear how much of the capital stock is inherited in the United States. Estimates from a survey of the literature in the late 1990s show an average of about 50 percent. There is good data from France, however, where the economist Thomas Piketty examined how much of the national income is from annual inheritance flow. Here’s the graph showing what he found:
Much as Piketty found a “U-shaped” curve to inequality of income, he finds one for inheritance in France and postulates this trend is likely to be occurring in the United States as well. Piketty argues that “[o]ur empirical and theoretical findings suggest that inherited wealth will most likely play as big a role in twenty-first-century capitalism as it did in nineteenth-century capitalism.” The best way to learn about the future of the economy will soon be to join the Jane Austen Society.
Here again the left and the right will likely break. Historically, the right views inheritance as the right of the bestower to give something, or for people to do whatever they want with their property. However liberal reformers have viewed inheritance as an issue related to the right of the recipient to receive something. What could be more of an “unearned increment,” or unearned and undeserved rent income, than someone just happening to be the child of a rich person?
So, I have certainly gone on for a very long time this morning on what is undoubtedly a topic that will put you right back to sleep! So, David Stockman’s fish tale is worthy of an April Fool !! Please check for paper fish to be pasted on his back all day! Have a good day! Please, let us know what’s on your reading and blogging list today?
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Mona (aka Wonk the Vote)
Sky Dancing 
This sounds like an April Fools’ joke, but I think it’s real.
Georgia Republican Party chair: Straight people will enter gay marriages to get ‘a free ride’
Begs the question of why health benefits are tied to employment in the first place!
As if two people of the same sex would get married for no reason except to get benefits. What is wrong with these Republicans?
Well, I happen to know several instances in which one heterosexual married another simply for the health benefits that the other one had. I guess those are “fake” marriages too. So, if heteros can fake it, why can’t teh gays? Isn’t that the very essence of equal protection?
First, these idiots don’t want anybody having gay sex at all. Now, they WANT them to have sex – to prove that their marriage isn’t fake.
This is what happens when rationality is not a part of one’s intellectual functioning. One day, teh gays must not have sex. The next day, teh gays must have sex. Different day, different argument. Completely reversing the previous day’s position. As they desperately flail about trying to find a way to make their prejudices seem like common sense.
Excellent point!
Well, we’ll just have to have arousal tests then, right? For everyone! What is straights are gaming the system? Huh? Huh?
These people are totally insane.
They should undergo a mental examination before they are considered qualified to run for public office to impose their mental rubbish on the rest of us.
Opening day of Major League Baseball! Yay!
My excitement may wear off in the next few weeks but I am looking forward to a new season of the Red Sox climbing out of the cellar and resuming a place in the standings.
Let the games begin! At least it provides a distraction to the crappy leadership coming out of DC for brief stretches at a time.
It’s also opening day for our National Parks!
I hope they’re better than last year. I haven’t heard much that gets me excited, but I’m glad it’s baseball season again.
Good news for patients: India’s Supreme Court blocks BigPharma company Novartis request for a drug patent.
http://www.bbc.co.uk/news/business-21992724
My experience with a Big PhRMA use of “evergreening” —
I had two epidurals in L4 and L5 of my lumbar spine on Friday. I haven’t been able to walk without severe pain in my right leg for quite awhile and pills weren’t helping.
The doc had written a script for a muscle relaxant and continued oxycodone to use after I had two shots. After I gimped into the drugstore, I was told after waiting awhile that they couldn’t fill the muscle relaxant because it was not available in generic.
But the doc called later to say he had changed the script to the generic; the drug was definitely available in generic. So I had to drag myself out of the house and back to the drugstore. Per the druggist, the drug company had released a lower mg version of the expired patent med, which made it not comparable to the original drug, so the automatic change to generic didn’t kick in as required by NJ law.
The generic was just a mite stronger (which I probably needed anyway), but it caused me to have to make two, for me, painful, trips.
But the doc was fooled as well. Great drug marketing plan, Big PhRMA.
Oh, for 30 pills? Generic, slightly stronger dose. $5.17; extended patented, lower dose, $140.00.
But, hey, Big PhRMA got special dispensation from Obama to make sure Medicare couldn’t bargain on drug prices. And this was not addressed at in Congress to bring some sense of order to the patenting of medicines.
The approach in the US is to let Big PhRMA set the ground rules. The approach in India is to have the government set the rules and to allow as much competition as possible to result in lower overall prescription drug costs.
I would imagine Big PhRMA will begin to try to lobby more effectively whichever government is in power in India, and, perhaps, try to change the government to one more to its liking and better for its bottom line.
We here just need legislators and executive branch politicians who give a damn about the well-being of us in the lower economic quintiles — or at least just don’t write us off and throw us under the bus as our current crop of both Dems and Repubs do.
This Indian supreme court decision is getting heavy coveage on US news. Interesting.
BBC had quite a long segment on its Newshour radio program this morning; now NPR is giving it pretty deep coverage. On the BBC, they let the Novartis Indian president make the argument that this would result in less research; here on NPR, the NPR reporter brought up that issue. Again, interesting.
Yeah, just 2 or 3 years before a drug goes off patent they’ll come out with something they’ve tweaked so it’s just a tad different. Usually not so egregiously minimal as a dose change, but still minor. I have never seen anything different in patients’ responses.
Last I read Big PhRMA spends twice as much on marketing as they do on research. They are not hurting. Indeed, they are buying other companies, merging or getting merged, and laying off researchers to churn a quick profit for investors or bonuses for the execs.
There’s a good argument to be made for putting all drug research into the hands of nonprofits and having countries pool money to do it. Then, we’d get helpful drugs and just not drugs for wrinkles and limp dicks. Plus, we’d actually get cheaper drugs. Also, wouldn’t have to worry about them killing people in 3rd world countries for drug tests.
Dak — That’s the way it should be done!
Seems like there’s something wrong going on here:
Salon.com @Salon 4m
CDC: Nearly 1 in 5 high school boys now diagnosed with ADHD, sale of Adderall doubled since 2007 http://slnm.us/sTvWXxL
Very wrong.
Need to amend that headline:
CDC: Nearly 1 in 5 high school boys now diagnosed with ADHD along with David Stockman…
David Stockman has never gotten enough lovin’ — he’s always been starved for attention — I’m betting he was formula fed as a baby. He’s made a life out of being a contrarian — something like this book will guarantee him being able to once again fold aluminium hats in the Faux News bullpen.
May the Ailes be with him.
Roflmao
Prosecutors to seek death penalty in Colorado theater shootings. http://t.co/VQxe8pn114
I wonder why they didn’t just accept Holmes’ guilty plea? Do they really need to spend millions of dollars to kill him?
Probably some republican DA with ambitions for higher office.
OH, how I agree with your response. There’s something wrong with this nation’s leaders’ inability to deal with science and scientific findings.
The guy has a deep and dangerous mental illness; he should be institutionalized with decent care.
But, some DA’s have no sense of reason.
The Baton Rouge Advocate skewers Jindal for what he’s done to universities here …
http://theadvocate.com/news/opinion/5563237-123/our-views-jindals-math-a
Our Views: Jindal’s math a shell game
and there’s more …Jindal is killing us all for his presidential ambitions.
Red Sox leading Yankees 5-2.
This diary by Tom Thumb at FDL notes that the Obama WH is out with new, even more leaden trial balloons, this time to bring down Medicare. And seniors’ health.
http://my.firedoglake.com/tomthumb/2013/04/01/white-house-trial-balloons-medicare-cost-increases/
Bookmark this. It’s a good concise list of just what Obama wants to do. Your Obama supporting friends won’t believe this is what BO has in mind for us. Send on to friends, relatives, and mostly to Congress Critters. Let them know Dems are beyond dead to you if they go ahead and implement Barry’s goals for SocSec and Medicare.
Tom Thumb quotes from admin leaks to the NYTimes about changes — make that cuts and out-of-pocket cost increases — bama has planned to offer the Republicans. They’re based on wet dreams he told us about in 2011, with more detail back then, but it’s the same damn nightmare for Medicare recipients. Back then the Repubs spurned his offers. How long can they resist such a tempting dish?
This is going to hurt and it is intended to be painful. Obama and his crew believe Medicare recipients are using too damn much health care and they want to force us to stop by making the deductibles and co-pays unaffordable for most of us.
Obama is not our friend, fer sure.
Thanks Jawbone. I posted about that on Friday.
It has to pass Congress first though. Obama can do it by himself. We’ll see who is stupid enough to vote for it and end their careers. The Senate already included an amendment in the budget telling Obama they won’t vote for cuts. It pass unanimously. Senators know they’re dead if they support it–even Republicans, unless they can blame Dems for it.
If Obama gets the R’s on board, he’ll need only a few ConservaDems — and then he’s got his “legacy,” outdoing St. Ronnie.
Just observing how hard Obama has worked to set up conditions allowing him to give the R’s things they’ve wanted for years, since both FDR and LBJ put these programs in place, shows how dedicated he is to actually accomplishing his goals.
No one is pushing SocSec and Medicare cuts more than Obama, altho’ he welcomes help from Pete Peterson and the Repubs.
And, alas, the vote to protect against Chained CPI was a voice vote, demanded by Reid instead of a roll call vote. We’ve seen this move before: there were voice votes for the public option (whatever that meant as it was never really defined by Barry and his crew).
Believe what you want. I’ll wait and see. before I freak out. Republicans don’t want revenue increases, so Obama would have to fold on that. I don’t see the Democrats going along. Republicans really don’t want entitlement cuts. Their base is old people.
As for Obama’s legacy, if he does this, he’ll go down in history as one of the worst presidents ever–worse than GW Bush.
The NYT also had a very strong editorial opposing these cuts yesterday–even saying that deficit reduction right now would be harmful.
alexis goldstein @alexisgoldstein 11s
No matter HOW CRIMINAL Wall St continues to prove itself, the @whitehouse continues to be their LOYAL supplicant. http://mobile.bloomberg.com/news/2013-04-01/obama-said-to-consider-mcguire-and-kramer-for-treasury.html …
Red Sox 7, Yankees 2
Two runs score on a Yankee error. LOL
8-2 final.
http://apod.nasa.gov/apod/astropix.html
I guessed correctly. But apparently some people never do dishes.