Yup, it’s my Austan Goolsbee Post

You knew this was coming and here it is.

The question of the day is “Who is Austan Goolsbee?” . That’s followed by what will he do in his position of head of the CEA to the president besides tripping the tango with Larry Summers? That’s a link to the WSJ and there are others too. Like most people out there in the business world, the discussion at WSJ is mainly about Goolsbee’s Yale and MIT pedigrees and jobs held. I’m going to do something a little different. I’ve chased down his vitae and his research. You can tell a lot about an academic by their research agenda. It basically tells you what pushes their buttons although when you’re in the heat of the tenure battle, you’ll frequently publish a topic that’s a hot button for the research community. Still, your frames will out.

The professors that taught me theoretical Investments could always tell that I wasn’t interested in markets as income makers but more in finding ways that markets were gamed by the kinds of papers I wrote for them. They also knew I didn’t buy the Fama viewpoint of efficient markets. I was much more interested in the ‘frictions’ or the way the markets became dysfunctional.

This alone made me realize that I wasn’t going to have a future in publishing anything related to derivatives or micromarket structure because I’d never be able to comfortably play to the editorial boards. So, you have to keep this in mind. Especially, when I bring up his publications in the top tier journals. A lot of it is what interests you. Some of it is what interests the editorial boards of the journals where you seek publication. You don’t go to a finance journal with Fama on the editorial board if you intend to rip apart the efficient markets hypothesis. Keep that in mind when you read about Goolsbee who obviously had access to top journals via his pedigrees as well as work.

So, hang on or grab a coffee, I’m about to do an Austan Goolsbee literature review. I’m going to concentrate on some of his publications in the tax arena because I believe you’re seeing his stamp on this latest ‘stimulus’ package. I’m not going to cover the models, only the results. He went to MIT so he certainly knows his math and econometrics. No reason to venture there.

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Gender Bias comes in all flavors

The one thing that really irks me about a lot of progressives is they seem to think that they don’t suffer from the same kinds of biases as the ‘ordinary’ folk. I’m not sure if it’s the blue ribbon universities degrees or just the institutional stuffiness that comes with even the most forward-looking tribal packs, people bring their frames to their jobs and all social interactions. Let’s just send out blessings to the people that unmask them with empirical studies.

TNR senior editor Ruth Franklin has been watching a literati shoot out at at the NYT and covers a Salon analysis of their bias towards women writers. Surprise, surprise–not– the Gray Lady treats women authors differently. Women write romance novels, men write serious fiction. Doesn’t the rest of the world know that?

Franzenfreude, Franzen feud, Franzen frenzy: This literary squabble, one of the most fraught in recent years, isn’t over. It started two weeks ago when Jodi Picoult, peeved that the Times had given Freedom two glowing reviews in one week, gently tweaked (should that be tweeked?) the paper via Twitter: “Is anyone shocked? Would love to see the NYT rave about authors who aren’t white male literary darlings.” Jennifer Weiner, the author of best-sellers (apparently we aren’t supposed to call these books chick lit anymore) like Good in Bed and In Her Shoes, soon weighed in on Picoult’s side: “I think it’s a very old and deep-seated double standard that holds that when a man writes about family and feelings, it’s literature with a capital L, but when a woman considers the same topics, it’s romance, or a beach book—in short, it’s something unworthy of a serious critic’s attention.” Names were called (Lorin Stein accused both women of “fake populism”), Franzen was defended (sometimes in bizarre ways, as in this piece on the Forward blog), and the fracas continued.

Here’s some of the information gleaned by DoubleXStaff who analyzed the NYT’s books section.

The bookish blogosphere continues to debate whether the New York Times—and, by extension, other cultural gatekeepers—really does give white male fiction writers preferential coverage over authors of the distaff and ethnic variety.

Other groups have looked into the Times’ record on reviewing political books (95 percent male) and crime novels (66 percent male). And there’s a slightly older study from Brown that concluded that 72 percent of all books reviewed in the Times Book Review were written by men. (You can see the full Brown paper at this cached link here). But so far, no one’s taken an extended look at the paper of record’s general fiction coverage. So we decided to gather some statistics in order to determine whether the Times‘ book pages really are a boys’ club.

Here’s summary of their spreadsheet.

Of the 545 books reviewed between June 29, 2008 and Aug. 27, 2010:
—338 were written by men (62 percent of the total)
—207 were written by women (38 percent of the total)

Of the 101 books that received two reviews in that period:
—72 were written by men (71 percent)
—29 were written by women (29 percent)

What does this tell us? These overall numbers pretty well line up with what other studies have found: Men are reviewed in the Times far more often than women. One crucial bit of information missing, of course, is the percentage of all published adult fiction that has been written by men vs. women. As for the double reviews, men seem to get them twice as often as women.

Yup, I’d say that rates as another example of a boy’s club. Whenever there’s a few men in the room, eventually everything becomes about them. They still hate playing with girls if there’s a chance they’re going to get shown up. Eventually, alpha males will muscle it out in every pack of animals; wild or civilized.

Another Last for America

(This YouTube is for Beata with love.)

I live about 1/2 mile from an old Levi Strauss factory. One part of it is now combination art studios/apartments for New Orleans Artists. The other–across the street–is a church that houses a food pantry and second hand store. I wasn’t around the neighborhood when it closed, but I distinctly remember when Levi jeans quit making their all-American product in the U.S.A. Nothing says the US west, working class, and hippies like Levi Jeans. The only thing that made it sad news, bad news, but not mad news is that Levi Strauss doesn’t have a lot of government contracts but that doesn’t mean that the U.S. taxpayer doesn’t lose something.

The same cannot be said for GE which closed its US last light bulb factory this month.

The last major GE factory making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison’s innovations in the 1870s.

The remaining 200 workers at the plant here will lose their jobs.

“Now what’re we going to do?” said Toby Savolainen, 49, who like many others worked for decades at the factory, making bulbs now deemed wasteful.

During the recession, political and business leaders have held out the promise that American advances, particularly in green technology, might stem the decades-long decline in U.S. manufacturing jobs. But as the lighting industry shows, even when the government pushes companies toward environmental innovations and Americans come up with them, the manufacture of the next generation technology can still end up overseas.

You’ll notice that this is even more troubling because the push to go greener actually expedited the outsourcing process in this case. I personally like my incandescent light bulbs in the winter. They stop my heating system from coming on full blast. I use them in the winter months. But, I suppose that wasn’t factored in to the equation. Just like the loss of more American manufacturing jobs didn’t appear to be a consideration either.

This is another story that tells a cautionary tell. Lots of workers in their 50s are now obsolete and lost in a never never land of a bit too early for social security/medicare and a bit too late for gigantic student loans and retraining. It’s no wonder that every single community college in the country is popping at the seams and has waiting lists for basic classes. Unfortunately, state budgets are so bad that tuition is up and class and teacher availability are down. All at the time when most universities/colleges have teachers that are also close to retirement.

But officials are working against a daunting trend. Under the pressures of globalization, the number of manufacturing jobs in the United States has been shrinking for decades, from 19.5 million in 1979 to 11.6 million this year, a decline of 40 percent.

At textile mills in North Carolina, at auto parts plants in Ohio, at other assorted manufacturing plants around the country, the closures have pushed workers out, often leaving them to face an onslaught of personal defeats: lower wages, community college retraining and unemployment checks.

Globalization is a two-edge sword and always has been. The first thing that you teach is that it creates winners and losers. Every one who buys the products wins because they will be very very cheap in comparison. The losers are the employees and the municipalities that rely on the company for jobs, incomes, and tax revenues. I don’t think the theoreticians every really looked at how incredibly disruptive the adjustments of wages and prices would be to all this ‘factor mobility’. Most of the time capital wins too.

When NAFTA was signed, Bill Clinton ensured that there would be job training funds for folks that could prove they were displaced due to NAFTA. It was used quite a bit in Mississippi by the women that belonged to the Ladies Garment Workers. Again, like the factory in my neighborhood, women in the south are no longer required to sew Levi Jeans and sheets and blankets like they used to do. What are they retrained to do in Mississippi? Basically, home health care work, practical nursing, and resthome work. Not exactly good paying union jobs to replace the ones that they had. They could become RNs, but many have not followed that path. Here’s a pretty good synopsis of the literature at the time from 2002 that showed how folks laid off from airline jobs in the 1990s were retrained into other lines of work. I guess I went back to that time period because the unemployment rate–even the structural one–was falling at the time which is quite different from right now. As you can see, a lot of these workers who were successful in manufacturing have a different skill set than is needed for service-type jobs.

We just celebrated labor day. It’s become more of day for the last day of picnics than the celebration of American Labor and the progress brought to the American worker by Labor Unions. Forty hour work weeks have been replaced by being paid by the piecework. Everything related to cloth is put together some place else. I can speak to the joyful busting up of teacher’s unions down here in Louisiana as tenure no longer means anything at any level down here. For some reason, it’s okay to hold a teacher accountable for some student’s test score, but not that student’s drug addicted or never-at-home-helping-with-homework parent. You gotta blame some one for all this fail and it’s the role of senior management to pass on the blame but never the profits of their bad decision making.

Sooner or later, this game will end because it is a zero sum game. There’s a new phenomenon in China. It seems that some workers would rather commit suicide than “bend” to the oppressive work environments that they now endure.

Yesterday, the company Foxconn, a leader in technology, which has seen 11 suicides this year in its Longhua factory (Shenzhen), announced 30% wage increase for assembly line workers. But experts point out the need to review the whole organization of work that has made China “the world’s factory” for the price of inhumane working conditions, for the exclusive benefit of Western capitalist multinationals and the Chinese Communist Party (CCP).

Foxconn official sources have expressed their hope “that the wage increase will help improve the living standards of workers and allow them to have more free time.”

Analysts note, however, no one in China seems to want to address the issue of working conditions or the absence of unions to protect workers’ rights.

Faced with suicides motivated by work stress, Foxconn defends itself by saying that it does not violate the law and applies working conditions similar to those in other Chinese factories. According to the workers in the company, the “normal” working conditions include 12-hour shifts, with a ban on speaking with to colleagues, sitting or unnecessary absences. Workers are subject to a military discipline both at work and in company canteens and dormitories and are fined for the slightest offense, even washing their clothes in the dormitory. They are not allowed to contradict their superiors direct orders.

And this is country rooted in Marxist thought?

Oh, any of you members of the IBorg might want to look really seriously into this story. This folks are hard at work producing your Iphones, Ipads, and Ipods along with Dell computers and Nokia phones.

How long will the Chinese put up with these kinds of working conditions? How long will our purchasing behaviors let them?

The factory workers are typically very young women from the countryside, sent by their parents into the factories, to supplement their family income. They live in cramped cement-block barracks, eight or twenty to a room. They often work 12- or 18-hour days, under abysmal conditions, with no day of rest for months at a time.

Managers of major U.S. multinational corporations who produce their goods in Chinese factories, told ILO investigators-on condition of anonymity-that 80 percent of their contractors keep double or triple books, to hide the fact that they’re not paying minimum wages, not paying overtime, and breaking China’s maximum hour laws.

The factory conditions are appalling. Chinese workers suffer the highest rates of industrial deaths and lost limbs from industrial accidents in the world.

Chinese factory workers have little recourse against these abuses. If they complain, they’ll be fired, lose the deposit they had to pay their employer, the wages withheld and risk being thrown in jail by the Public Security Forces (China’s political police).

These abusive conditions are so widespread they have spawned new terms like “goulaosi”-death by over working. Another one, “tiaolou xiu,” which means jump-protestors, comes from the growing practice of China’s factory workers to threaten and at times commit suicide over working conditions or simply to get the pay they’ve earned.

One manager from Reebok, who is in charge of labor conditions throughout Asia, spoke openly about labor conditions in China. She said: “Who enforces Chinese labor law? Nobody. If it were enforced, China would be a much better place for millions of people to work in. But it is ignored more than in any other country I work in.”

Each time you turn on a light bulb this year, just think about this.

I’m not sure who I should ask you to send your prayers out to these days. The U.S. workers that will no longer be able to support their families and will be trapped in that never never land of unemployment we have these days or the Chinese workers who get to replace them.

Either way, workers lose, investors win, and you get your cheap electronic products and athletic shoes.

Switching from Koolaid to Caffeine

Two high profile economists finally seem to have come to the realization our President pushes Republican Policy and caves into Republicans to make it even more Republican than necessary. He’s enabled by what has to be the most stupid bunch of Democrats in congress in U.S. history. This has been a Republican wet dream and an American nightmare! They get to push right wing legislation through and label it as socialism and get street cred for it! I’m glad some people with the ability to grab headlines are finally speaking truth to power, but it’s too damned late to help the unemployed. My only hope is that it saves Social Security from Obama’s Wall Street cronies.

First there’s this from Robert Reich’s blog: “Why Obama is Proposing Whopping Corporate Tax Cuts, and Why He’s wrong”. You’ll probably recognize this topic from something I wrote about last week. Reich is taking the proposed corporate tax cuts head on. Look at this description.

The economy needs two whopping corporate tax cuts right now as much as someone with a serious heart condition needs Botox.

He proceeds to list all the reasons we’ve talked about before. They don’t need to expand capacity. They don’t have any customers. They can borrow cheaply now.

The reason businesses aren’t investing in new plant and equipment has nothing to do with the cost of capital. It’s because they don’t need the additional capacity. There isn’t enough demand for their goods and services to justify it. Consumers aren’t buying because they’re trying to come out from under a huge debt load, including mortgage debt; they have to start saving because their nest eggs are worth substantially less; and they’ve lost or are worried about losing jobs and pay.

In any event, small businesses don’t have enough profits against which to use these tax credits and deductions, and large corporations are sitting on over a trillion dollars of profits and don’t need them.

Republicans and corporate lobbyists have been demanding tax cuts on corporate investments for one reason: Big corporations are investing in automated equipment, robotics, numerically-controlled machine tools, and software. These investments are designed to boost profits by permanently replacing workers and cutting payrolls. The tax breaks Obama is proposing would make such investments all the more profitable.

Dig that last reason. It’s something to add to our list. If they invest in robots, it makes the unemployment situation worse. It’s like giving them more incentives to build a plant in Vietnam too. It doesn’t say WHERE they have to do the improvements either. This is a tax cut made to enhance unemployment, not solve it.

So, what about the two-years-too late proposed infrastructure plan? Oops, I already gave you a clue. Let me give you a second one. The tiny tiny proposed funding for infrastructure. Yup, too late and too little, just like the first stimulus. But, you don’t have to take my word for it. You can take Paul Krugman’s words instead. He’s depressed by the proposed corporate tax cuts also. I’m just glad he posted this on a plane back from Japan where he was too tired to censor himself. POTUS is suggesting $50 billion to do something. That’s a drop in the bucket compared to what’s required for both the economy and the infrastructure repair.

1. It’s a good idea
2. It’s much too small
3. It won’t pass anyway — which makes you wonder why the administration didn’t propose a bigger plan, so as to at least make the point that the other party is standing in the way of much needed repair to our roads, ports, sewers, and more– not to mention creating jobs. Once again, they’re striking right at the capillaries.

Beyond all that, the new initiative is a chance for me to air one of my pet peeves: the stupidity of the claim, which you hear all the time — and you’ll hear again now — that it’s always better to provide stimulus in the form of tax cuts, because individuals know better than the government what to do with their money.

Why is this claim stupid? Because Econ 101 tells us that there are some things the government must provide, namely public goods whose benefits can’t be internalized by the market

Okay, Krugman called the claim “stupid”. What’s Reich calling them? Troubling.

More troubling, Obama’s whopping proposed corporate tax cuts help legitimize the supply-side dogma that the economy’s biggest obstacle to growth is the cost of capital, rather than the plight of ordinary working people.

Plus notice the description. This is Reaganomics. Trickle-down economics. Voodoo Economics. Choose your label.

This POTUS is a DINO. What is taking people so long to figure it out? This is the stuff Republicans suggest, not the Democratic Party. Just like the so-called Health Care Reform was Romney Care/Heritage Foundation’s response to the Clinton Health Care Act.

I just put on a fresh pot of Community Coffee! Whose next? C’mon! Give up the Koolaid before it’s too late!

White House Panic

I’m actually getting a bit of a kick out of this. It’s one of those two handed things. You know, on one hand we’re seeing brutal punishment of people who did us wrong. On the other hand, the only people this truly benefits are bat shit crazies. Anyway, here’s the CBS version of Karma with the fun title of “ Analysts: White House Panicking Over Elections:Say Dems Are Distancing Themselves From Obama, Angry Over Economy, Health Care Fallout”. Excuse me while I laugh for a very long time.

With many polls indicating the Republicans may win back control of the House of Representatives (and possibly the Senate as well) in the upcoming mid-term elections, Jim VandeHei, the executive editor of Politico, told CBS’ “Face the Nation” that the Obama administration is in a horrible position.

“Does the White House understand this?” asked guest host Harry Smith. “Do you feel any sense of panic or concern” on the part of the administration?

“They get it. There’s panic. There’s concern,” VandeHei said. “The reality for this administration stinks, politically and practically, when it comes to the economy. You’re not going to be able to change that 9.6-percent unemployment figure. You can’t get anything from Congress in the next couple of months.”

CBS Congressional correspondent Nancy Cordes said the Democrats are distancing themselves from President Obama.

“Not only are they running away from President Obama, they’re running away from being Democrats in some cases. In some races you actually see the Democratic candidates not really mentioning that they’re a Democrat in their campaign ads,” Cordes said.

Smith asked his guests to try to identify the source of the discontent: “From your experience on the Hill, have you heard any Democrats in private conversations say, ‘You know what? We went down the wrong road. We went after health care. We went after so many other things on the Obama agenda as opposed to, in the end of the day, it’s all about creating jobs?'”

I think we can all agree that nearly all of us at TC can say: WE TOLD YOU SO!!!

(Consider this an open thread.)