Monday Reads from my Ivory Tower in the 9th Ward

henri_matisse_woman_readingGood Morning!

I’m always looking for good books to read.  I have to admit that I’m terribly old school.  My favorite presents to myself are books, videos, and music cds.  I do not trust anything I have to get from the internet given I’ve been without electricity and connectivity for extended periods of time.

I am not a Luddite. I saw the original internet “turned on” in the 1970s in high school.  It was like some kind of print out on a huge printer from the closest university that had linked in to our Math Resource Center that said here we are … university (I remember it as Michigan U)  and US government to select schools.  I first had a personal connection to the internet in 1981 on my IBM peanut with a funky phone mouth/ear piece to modem connection.  So, I’m aptly nicknamed “wirehead”.  I’ve been connected for longer than Dr. Daughter has been alive.

However, I like the real thing.  Call me old fashioned.  I liked to write on my textbooks.  I like the feel of selecting a video and having a long term relationship with it.  I love the anime series Cowboy Bebop and have the complete episodes.  I also have the manga and I love the feel of raised ink.

My first experience trying to copy an entire series over years was Upstairs Downstairs.  I have the complete episodes on beta–yes that’s BETA–copied straight from my TV and my mom’s TV.  It’s no wonder that Downton Abbey is my latest edition. I also have Treme (although my Katrina PTSD keeps me a bit edgy about watching it) and one another series.  I passed my addiction to Criminal Minds to BB. The rest of my collection is an odd assortment of movies. My “cloud” is supplemented by a row of book shelves that line a hallway and my bedroom. They get dusty and old but then so do I.

I’ve discovered solar rechargers and hurricane lamps that run on lamp oil.  This is my black out technology. The first thing I will do if I’m ever lucky enough to come into a huge amount of cash is go off the grid for everything. I also continue to build my little garden of herbs, vegetables, and fruit trees here in the ninth Ward so very near the Mississippi.  Did I mention I can see oil tankers, cruise ships, and destroyers from my front porch?

I fully embrace my eccentricities but, I’ve lived without TV/cable for months and with sporadic electricity recently so I know I’m one storm away from the 18th century.

Reading has always been a safe haven for me.  That and playing my piano.  All of these things I do without electricity and with plenty of printed material. That’s another story but let me tell you, I still cling to music and a good book when I need to get through my life.

So, here’s a review of a book that sounds interesting.  It’s about Life Among the Plutocrats.  The exact title is  Plutocrats: The Rise of the New Super-Rich and the Fall of Everyone Else” by Chrystia Freeland (Doubleday, Canada 2012).

Today’s plutocrats are the latest variation on an old theme, and at the same time they’re strikingly new in many ways.

Societies have supported plutocratic classes at least since ancient Rome, and the Gilded Age of the US after the Civil War presaged our own: A rising class of self-made men, imaginative exploiters of new technology and wider trade. Then it was the telegraph and the railroad; now it’s the internet and the container ship.

Freeland’s plutocrats are mostly self-made also, and overwhelmingly male; one very rich man suggested to her that women lack the “killer instinct” needed for real success. But they are not the idle heirs of rich parents. The “working rich” are a distinct class: smart, ambitious and often outsiders.

What’s more, they represent a dramatic change from the 19th and early 20th century, Freeland argues. Then, the conflict was between capital and workers, with workers doomed to lose because they couldn’t own the means of production.

The communist revolutions were supposed to transfer those means to the workers, but instead transferred them to a new class of upstart intellectuals and technical experts. She cites Milovan Djilas, Tito’s second in command in communist Yugoslavia. In the 1960s Djilas wrote “The New Class” to describe this phenomenon as a corruption of communist orthodoxy; Tito threw him in jail.

They didn’t come entirely out of the blue. Freeland documents the gradual but decisive shift in fields like finance, which since the age of the superstar had been regulated to the point of boredom. This came along with a new struggle: Now it wasn’t capital versus labour, but capital versus talent.Even more ironically, the same new intellectual class now runs capitalism — with the exception of the princelings of the Chinese Communist Party, the billionaire sons and grandsons of Mao’s old proletarian comrades. But elsewhere, smart young men got possession of ex-Soviet resources, or an operating system for newfangled personal computers, and within months were rich beyond imagining.

Here’s an NPR interview with author Chrystia Freeland.

Those at the very top, Freeland says, have told her that American workers are the most overpaid in the world, and that they need to be more productive if they want to have better lives.

“It is a sense of, you know, ‘I deserve this,’ ” she says. “I do think that there is both a very powerful sense of entitlement and a kind of bubble of wealth which makes it hard for the people at the very top to understand the travails of the middle class.”

One standout moment Freeland recalls is a conversation with a billionaire who spoke with great sympathy about some friends who’d come to him for investment advice. “And he said to me, ‘You know what? They only had $10 million saved. How are they going to live on that?’ I kid you not, he was really worried about them.”

Today’s plutocrats come down across the political spectrum, Freeland says; there are definitely liberal billionaires. “It is, however, also the case that in the United States there has been a real shift away from Barack Obama, and a lot of these guys loved him in 2008 … They feel really angry at Obama, and it’s not just the question of taxes.” Freeland calls it “a profound emotional thing.”

“In America,” she says, “we have equated personal business success with public virtue. And to a certain extent, your moral and civic virtue could be measured by the size of your bank account.”

I also embrace my inner geek and outre scholar.  You know that I absolutely hate the way politicians and many popular cult figures in conservative media demonize science, facts, and education.  Here’s a bit on that worth reading in The New Statesmen:Brian Cox and Robin Ince: Politicians must not elevate mere opinion over science.

The story of the past hundred years is one of unparalleled human advances, medically, technologically and intellectually. The foundation for these changes is the scientific method. In every room in your house, there are innovations that in 1912 would have been considered on the cusp of magic. The problem with a hundred years of unabated progress, however, is that its continual nature has made us blasé. We expect immediate hot water, 200 channels of television 24 hours a day, and the ability to speak directly to anyone anywhere in the world any time via an orbiting network of spacecraft. Any less is tantamount to penury. Where once the arrival of a television in a street or the availability of international flight would have been greeted with excitement and awe, and the desire to understand how those innovations came into being, it is now expected that every three months you’ll be queuing outside the Apple store for a new wafer-thin slab of brushed metal, blithely unaware that watching a movie in the palm of your hand has been made possible only through improbable and hard-won leaps in the understanding of the quantum behaviour of electrons in silicon.

With each new generation, the memory of appallingly high child mortality rates, tuberculosis and vast slums grows fainter and fainter. As the past becomes hazy, we start to believe that there can be no other sort of world. We become nonchalant about vaccines, to the point of seeing them as a lifestyle choice akin to a decision to eat only organically farmed fruit, because we attend fewer and fewer funerals of those who died too young. The technology and advances in knowledge that cosset us have removed, to a large extent, the need to use our ingenuity and to think rationally. Believing complete drivel was once selected against; now it gets you an expert slot on daytime TV.

Against this rather depressing introductory backdrop, however, there are faint glimmers of hope, because science, rational think-ing and evidence-based policy-making are enjoying a revival. Part of the evidence for this statement can be found on the pages of a certain type of newspaper, where the idea that there may be an adjudicator above opinion is treated as an affront to the ideology of the columnist. The adjudicator in question is nature, the universe beyond the Notting Hill basement kitchen, and the wonderful thing about nature is that opinions can be tested against it. The key to science is in this simple statement from the Nobel Prize-winning scientist Richard Feynman, who once remarked: “It does not make any difference how beautiful your guess is. It does not make any difference how smart you are, who made the guess, or what his name is – if it disagrees with experiment it is wrong.”

This brings me to my own field of financial economics and a blog post on science, politics, mathematics and finance.  I do this as I play hookey–or procrastinate grading–while writing this blog post rather than spend time eyeballing the homework of my graduate students trying to figure out how to hedge FOREX exposure.  I have to agree that models are a human construct, but still, there’s a need to sort things out in a systemic and provable way.  So, the punchline to this blog post grabbed me.  Is science an adjudicator of opinions as the authors above (C&I) aver?

BTW, if you haven’t ever heard of their BBC radio show “The Infinite Monkey Cage” you must get on line and find it now.

I also learned the benefits of good old fashioned radio when everything else goes off with the cable and electricity.

C&I base their science on observation, data, and the predictive models constructed on the basis of the data.  However there appears to be an assumption that “science” will come up with the right models, modulo the approximation problem, given the data.  However this approach makes some omissions: what data is collected and why (science does not work by collecting reams of data in the hope something will drop out), data analysis is subjective (is climate data a hockey stick or a bath – see McIntyre&McKitrick, what does the data say?), models are human constructions.

Making these observations does not seem relevant to C&I, but they are crucial in  modern finance,  an arena of people competing to select and interpret data and develop the best models.  It is a microcosm of good science, and for this reason it should be taken more seriously by the scientific establishment.  Not least because modern finance is more relevant, and therefore more interesting, to the public than cosmology or theoretical physics.

Yes, modern economics and finance are relevant and scientific. The problem is that politicians seem to think that faith/dogma based lies are infinitely more useful.

It’s officially Carnival 2013 in New Orleans. Sunday was 12th night and we began with a parade to honor Jone of Arc and a street car ride of a 200px-Joan_of_arc_miniature_gradedlot of drunks.   The Joan of Arc parade is great visual feast since its participants wear medieval costumes. This week we feast on King Cakes.  Lately, the King Cake infused vodka beckons.

“Joan of Arc honors the patron saint of New Orleans which was St. Joan of Arc,” Mardi Gras expert Arthur Hardy said. “Twelfth night is her birthday, so it’s very appropriate. It’s a new small walking club with some horse riders and now some marching groups.”

 This parade is just one of the really wonderful things about my city.  The patron saint of my home town is a kick ass warrior woman.
We are a walking parade open to men, women, and children, dedicated to historical costumery, artistry, handmade throws, and the celebration of New Orleans and her ties to France. Joan of Arc embodies the best qualities of New Orleans and her citizens: loyalty, faith, courage, and determination. We honor Joan on her birthday each year by walking in medieval and Renaissance costumes with horses, live music, a variety of quirky and quaint parade throws, medieval carts and banners, and gifts of king cake and champagne through the French Quarter, from the Bienville statue (representing the founding of New Orleans) to the Joan of Arc statue at Decatur and St. Phillip Street. At this time we have approximately 35 krewe members and will welcome another 10-15 new members this year. We enjoy being a small, family-friendly krewe with a parade that at this time lasts a brief 30-40 minutes from start to finish. Our parade begins at 6:00 p.m. at Bienville Park on Decatur, goes up Conti Street to Chartres, across Jackson Square in front of St. Louis Cathedral, and continues on Chartres up to St. Phillip where we turn towards the River to reach Joan’s statue, a gift from France to the City of New Orleans.

Oh, dear, was this really a newsy thread or just one of my esoteric set of links?  JJ covered my archeology fetish yesterday so this will have to suffice for today.  It’s a sweet break before we slippery slope towards the inability of Congress to pay for those things for which they voted. Now, if I could just get a better pay check for life in the ivory tower I would be just fine!!

Meanwhile,  anything out there of newsy interest to you?  Today, I think I will stay in my ivory tower and wish away the likes of our idiot political class.  So, my point is that Joan of Arc makes for a great, romantic, showy parade and science makes for effective policy.  Vraiment, mes amis!!

What’s on your reading and blogging list today?


Swift Yachting Democracy

While Tea Bagging Republicans are trying to convince every one that elections are being stolen by imaginary illegal voters,  a finger bowl full of billionaires are buying up air time via Super Pacs to up the negative ad volume to 11. Here are some shocking facts from MoJo.

The 2012 elections are on track to be the nastiest in recent memory. By the tail end of primary season, in May, 70 percent of all presidential campaign ads were negative, up from a mere 9 percent at the same point in 2008. The culprits for this spike in attack ads were super-PACs and shadowy nonprofits, which together dominate the growing universe of outside political groups poised to spend billions of dollars this election season.

Now a new report from the liberal think tank Demos and the nonpartisan US Public Interest Research Group has revealed how what has been called a “tsunami of slime” is funded by a tiny cadre of wealthy donors.

Just 1,082 donors—a group small enough to fit inside a single high school gymnasium—accounted for 94 percent of all individual donations to super-PACs from January 1, 2011 to June 30, 2012. Those 1,082 donors amount to just 0.00035 percent of the US population.

I’ll just pause a second here while you  mull those last two sentences over …

So, Romney is looking more and more like the loser these days so you ask, what will all this money do when it’s basically betting on another Romney that can’t even deliver a bronze?  Well, how about this thought from Digby?

Romney may very well lose and everyone will say this shows that they failed, despite all their money. But these PACs and 501cs are not just about the presidential race. They are spreading this money around from the top of the ticket all the way to local races and their themes and talking points are all coordinated. I doubt they ever really believed this election was a shoo-in (or even really wanted to rock the boat — it’s not as if they haven’t been doing very, very well under Obama.) But they are setting up a system for the future:

During sessions of the “Weaver Terrace Group,” representatives of the embryonic Crossroads organization gathered with counterparts from groups such as the Chamber of Commerce, Americans for Tax Reform, and Americans for Prosperity, the funding vehicle affiliated with the billionaires David and Charles Koch. Crossroads served as referee, says CEO Law. “Conservative activists tend to act like six-year-olds on soccer teams,” he explains, “with everyone grouping around the ball and getting in each other’s way. Karl’s idea was that all of these organizations should share information, coordinate polling, reduce redundancy.”

Together with a follow-on ruling by the federal appeals court in Washington, Citizens United knocked several crucial holes in McCain-Feingold. Corporate and union money, for example, could now be used without restriction for “electioneering communications,” meaning radio and TV ads that mention a candidate’s name within 30 days of a primary or 60 days of a general election.

More important than the incremental increase in campaign-law porosity, though, was the passionately phrased celebration by Justice Anthony Kennedy of political spending in its manifold forms. Kennedy’s majority opinion declared that “the appearance of influence or access … will not cause the electorate to lose faith in our democracy.” Kennedy continued: “The fact that a corporation, or any other speaker, is willing to spend money to try to persuade voters presupposes that the people have the ultimate influence over elected officials.”

In Kennedy’s syllogism, democracy benefits from more speech. Political money is speech. Therefore democracy benefits from more political money.That’s so true. I certainly feel a new found faith in democracy knowing that this handful of billionaires are finally allowed to have the same influence over our government that I do.

Who is the 300 pound gorilla in this pen? Head back to the MoJo article for this tidbit.

The dominant presence among super-PAC donors is Las Vegas casino tycoon Sheldon Adelson and his wife, Miriam, who’ve given $36.3 million so far. That’s chump change for the Adelsons—in fact, $36.3 million is a mere 0.15 percent of their total wealth. It would take 321,000 American families giving up 0.15 percent of their wealth to match the Adelsons’ super-PAC giving.

So, is ANYONE doing ANYTHING about this?

Representative John Dingell (D-MI), the longest-sitting member of Congress, introduced a bill Thursday designed to force the Supreme Court to reconsider its Citizens United decision. Along with at least ten co-sponsors, Dingell’s Restoring Confidence in Our Democracy Act, would ban corporations and unions from making independent political expenditures. It would also subject Super PACs to the same contribution limits that exist with other PACs. Dingell intends the bill to provide “the factual record which details the negative effects of increased spending in our elections.” That factual record, he hopes, will get the Court to reverse itself, and restore Congress’ power to limit a form of spending that Dingell (rightly) believes has eroded even further America’s “confidence” in “our democracy.”

Dingell’s bill, however, is effectively two bills– one that would require the Court to reverse itself, if indeed the new law were upheld, and the other that would not require the Court to reverse itself but would instead give the Court a chance to address a kind of corruption that so far the Supreme Court has ignored. It is unlikely (in the extreme) that the Court is going to reverse itself. But if framed properly, Dingell’s bill could well map a way for Congress to staunch the corrupting influence of Super PAC spending without forcing the Court to eat its Citizens United words.

Let’s hope John and Bernie can get this thing on to the agenda of their respective bodies. Let’s also just say that I’m not holding my breath until it happens.


Athens Burning

From our vantage point in the US, Greece seems very far away.  That is an illusion of mere miles.  The disintegration of the Cradle of Democracy should send shivers down the spine of every American because this is what a plutocracy looks like. This is the dismantlement of a civil society for the sake of the 1%.

Yes, yes, we’ve heard all the stories of the profligate Greeks, lazy to the extreme, addicted to the welfare state, ridiculously high wages and cushy, early retirements.  The Greeks, we are told, are the millstone around the northern European neck, a weak sister draining the stamina and wealth from her industrious siblings, the Germans in particular.

Really?

Here are some factoids that don’t match the stereotypes we’ve been fed:

  • Greece has had one of the lowest per capita income levels in Europe.  Average Greek wage comes in at 21,100 euros [$27, 640] as compared to the Eurozone 12 average off $27,600 euros [$36,134].
  • According to Eurostats, the average retirement age for most Greek citizens is 61.
  • The average Greek schoolteacher makes 800 euros a month [$1041.04].
  • The Greek social welfare system is considerably lower than its European neighbors, averaging 3530.49 euros per capita [$4593.87] as compared to the Eurozone 12 average of 6251.78 euros [$8135.32]
  • Unemployment has spiked to nearly 22%, the number increasing with each round of austerity measures, which has deflated the Greek economy and exacerbated the problem. [In actuality, unemployment is higher since anyone working 16 hours is listed as fully employed.  However, even those workers working fulltime are often listed as part time, allowing employers to avoid paying minimum wage, insurance and other benefits.]
  • The top 20% in Greece pay virtually no taxes at all, a cushy deal reached during the days of the junta between the military and Greece’s wealthy plutocrats.
  • The cost of living [food, rent, energy] has spiraled out of control, leaving many Greek citizens unable to make ends meet.

As you might recall Greece’s elected leader George Papandreou resigned [with encouragement] and was replaced by Lucas Papademos, a former vice president of the European Central Bank [what a coincidence!].   Papademos assembled a temporary government then quickly pledged to approve the tough terms of a second European aid package of $150 billion.

The new, current round of austerity measures, which resulted in citizens taking to the streets and setting Athens afire, will purge another 150,000 public sector workers, mandate a 22% decrease in private sector salaries [the third decrease in less than a year] and substantial decreases in pensions and welfare services.

Mike Whitney at Counterpunch has said this about the new agreement, the Memorandum of Understanding [MOU]:

The Memorandum is as calculating and mercenary as anything ever written. And while most of the attention has been focused on the deep cuts to supplementary pensions, the minimum wage, and private sector wages; there’s much more to this onerous warrant than meets the eye. The 43-page paper should be read in its entirety to fully appreciate the moral vacuity of the people who dictate policy in the Eurozone.

Greece will have to prove that it’s reached various benchmarks before it receives any of the money allotted in the bailout. The Memorandum outlines, in great detail, what those benchmarks are— everything from reduced spending on life-saving drugs to “lift(ing) constraints for retailers to sell restricted product categories such as baby food.”

And,

It just shows what the MOU is really all about. It’s a corporate “wish list”; a mix of punitive belt tightening policies for working people and perks for big oil, big gas, electric, aviation, railroads, communications etc. “Fast track licensing” and “baby food” have nothing to do with helping Greece reach its budget targets. It’s a joke.

Oddly enough, much of this has the ring of the ‘Privatize the World,” theology, so popular with the Republican Party.  Ron Paul?  He finds the idea of all government owned lands very disagreeable.  It should be opened to private enterprise, he has said.  Think of that splendid idea of mining uranium in the Grand Canyon.  The evils of the public sector [that would be teachers and firemen and police] have been eloquently dissected by the likes of Scott Walker now facing a recall in November.  Paul Ryan has thrilled Tea Party aficionados by warbling vouchers = Medicare and offering schemes to privatize Social Security. Public schools?  Don’t fix them, critics say, replace them with private, for-profit Charter schools because for-profit universities have been such a treat for many low-income students, strapped with unsustainable debt and worthless, unaccredited degrees. Prisons?  Turn them private and watch costs escalate to the moon.  Taxes?  We all know the mantra: we cannot possibly tax the ‘job creators.’  Accountability in financial matters?  See the ‘deal’ the Administration’s Fraud Task Force crafted with the TBTFs. Respect for the environment?  Go no further than the proposed Keystone Pipeline, but never forget the Gulf of Mexico, the shameless behavior of BP and their political handmaidens.

The beat goes on.

These are self-serving reasons to sit up, listen and pay attention before it’s too late.  On a more human level is this:

Athens has always had a problem with homelessness, like any other major city. But the financial and debt crises have led poverty to slowly but surely grow out of control here. In 2011, there were 20 percent more registered homeless people than the year before. Depending on the season, that number can be as high as 25,000. The soup kitchens in Athens are complaining of record demand, with 15 percent more people in need of free meals.

It’s no longer just the “regulars” who are brought blankets and hot meals at night, says Effie Stamatogiannopoulou. She sits in the main offices of Klimaka, brooding over budgets and duty rosters. It was a long day, and like most of those in the over-heated room, the 46-year-old is keeping herself awake with coffee and cigarettes. She shows the day’s balance sheet: 102 homeless reported to Klimaka today.

Or this,

“Enough is enough!” said 89-year-old Manolis Glezos, one of Greece’s most famous leftists, who long ago tore down a Nazi flag under the noses of German occupiers. “They have no idea what an uprising by the Greek people means. And the Greek people, regardless of ideology, have risen.”

And this,

“I can still remember as a boy how it was during the great famine and great freeze of the winter of 1941,” said Panaghiotis Yerogaloyiannis, a former mariner now surviving on a pension of €500 [$650.55] a month.

“We have a different sort of war now, one that’s economic, that’s not fought on the field. But it’s still the same enemy, the Germans. And today you are not even allowed to protest. I carry this around,” he said producing a wooden baton from a plastic bag, “to protect myself from the police and thugs who hijack our demonstrations.”

Athens was burning on Sunday.  Beneath the rubble, it burns still. No, we are not Greece.  But Athens has sent a clear, unmistakable signal.  It should be a warning to us all.


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?


If a Rubio screams from Down a Rabbit Hole, does any one hear It?

Occasionally one of the villagers gets it right (h/t to Digby).  Today’s Awake Villager Award goes to Kevin Drum of MoJo who expresses utter contempt for the current Republican strategy of destroying the country at any cost to take down a Democratic President while mentioning that said Democratic President and his crony congress cadre have basically given said right wingers absolutely everything they’ve wanted for over a decade without a fight. I bestow this prize because the piece also recognizes the complicity of “journalists” in this charade.

People who are making policies and people giving air time to policy makers these days exist  in a state of complicity in lies. The continuation of more and more of the same damned policies are basically getting the same damned result yet real analysis of the results and the connection to the policy never occurs in the public forum.  The polices of the last 12 years induced a financial crisis and are inducing another one.  They created high unemployment and falling wages and they continue to perpetuate joblessness and income inequality. No one holds the policy makers or the narrators of the results accountable to hard, cold reality.   How is it that this game continues to grow exponentially without riots in the streets by the 99% of the country that’s been hurt and continues to be hurt by this insanity?  Are we so doped up with sports and “reality” shows that we don’t have time to take stock of what these people are doing to us?

But then, for about the thousandth time, my mind wanders over the past ten years. Republicans got the tax cuts they wanted. They got the financial deregulation they wanted. They got the wars they wanted. They got the unfunded spending increases they wanted. And the results were completely, unrelentingly disastrous. A decade of sluggish growth and near-zero wage increases. A massive housing bubble. Trillions of dollars in war spending and thousands of American lives lost. A financial collapse. A soaring long-term deficit. Sky-high unemployment. All on their watch and all due to policies they eagerly supported. And worse: ever since the predictable results of their recklessness came crashing down, they’ve rabidly and nearly unanimously opposed every single attempt to dig ourselves out of the hole they created for us.

But despite the fact that this is all recent history, it’s treated like some kind of dreamscape. No one talks about it. Republicans pretend it never happened. Fox News insists that what we need is an even bigger dose of the medicine we got in the aughts, and this is, inexplicably, treated seriously by the rest of the press corps instead of being laughed at. As a result, guys like Marco Rubio have a free hand to insist that Obama — Obama! The guy who rescued the banking system, bailed out GM, and whose worst crime against the rich is a desire to increase their income tax rate 4.6 percentage points! — is a “left-wing strong man” engaged in brutal class warfare against the wealthy. And Rubio does it without blinking. Hell, he probably even believes it.

We are well and truly down the rabbit hole. The party of class warfare for the past 30 years is fighting a war against an empty field and the result has been a rout. I wonder what would happen if the rest of us ever actually started fighting back?

There are so many little gems in this assessment it’s hard to point to them all.  The Republican denial of how their policies have and continue to trash the nation’s economy is the obvious one.  The next is the obvious enabling by the press that exists in some strange struggle to seem fair or be some Orwellian version of  “fair and balanced”  that ignores facts and data and experts in fields.  The press puts party operatives and politicians on TV to lie their frigging hearts out without fact checking their statements.  Some how, fair and balanced means repeatedly letting people put out “opinions” like the sky is green and dirt is blue.  An opinion isn’t misstating facts last time I checked my notes on the scientific method and the rules of public debate.

This is what drives me craziest. The press treats “seriously” people that get on TV to present alternate reality under the guise of looking at all sides.  Misstatement of facts are not opinions.  They are damned lies.

Most journalists these days peddle in access to lies and not much more.  There is lots and lots of irrefutable, scientific evidence on evolution, climate change, and the results of “voodoo” economic policy.  One does not get an “opinion” on appendicitis except on TV news shows.  In life, a certified and trained doctor  diagnoses the condition.  Fair and balanced reporting should not mean getting a panel of grade school educated yokels on TV who insist that people can’t get appendicitis because the appendix doesn’t exist.  It also doesn’t mean that some congressman that sits on a committee looking at health issues should be freed of the burden of proving his point that the appendix doesn’t exist because god and Ayn Rand wrote it down somewhere.  There are tons of freaks these days that are funded by rich idiots–many that own said corporate media outlets–that set up “think tanks” to put out false research that basically states that the sky is green.  These freaks show up on TV news constantly.   Study after study shows that people that view Fox news–as an example–don’t just hold opinions.  They hold completely false information. This is a huge problem because an effective democracy relies on an informed electorate.  We are getting systematically fed falsehoods that are killing our country and our livelihoods. This particulary bothers me because as an economics and finance professor, I have to confront the economic and finance fairy tales daily.  I hear the economic version of “the appendix doesn’t exist” from people who think they are just expressing an opinion instead of repeating a complete falsehood.

I guess what really struck me the most about Drum’s rant was that same sense of frustration and near-depression throughout that basically haunts me too.   I have absolutely no idea how to stop what he’s described. What brought about the huge changes during the Great Depression was the vision of  a leader and the people who surrounded him and the fear of the elite that US citizens might actually take to the streets.  They feared it was the New Deal or a Communist-style revolution in which they would lose everything.  The political and economically powerful no longer fear us and we no longer have leaders with vision beyond their own re-elections.  Something is going to give eventually and I’m just hoping its not the 200+ year experience that’s called the United States of America. Over the last thirty years, all three branches of government and the press have been successfully infiltrated to represent only the most rich and powerful.  What are we going to do about it?

Oh. The answer to the question at the top is that every one hears the Rubio Down the Rabbit Hole.  That’s because we’re not only victims of crony capitalism, we’re victims of crony journalism.