The photos in today’s post are from a project by photographer Mark Makela to take pictures of children “learning to read by reading to homeless cats.”
Last February, photographer Mark Makela traveled to Birdsboro, Pennsylvania, to photograph a reading group where the participants were grade-school students and a group of cats. The idea for the group, known as Book Buddies, was hatched at the Animal Rescue League of Berks County when the program coordinator Kristi Rodriguez’s 10-year-old son was struggling with reading. Rodriguez decided to bring him into the shelter, where he could be in what she called a “nonevaluative” environment in order to feel more comfortable practicing his reading skills. It worked.
According to ARL’s website, studies at Tufts University found that the more relaxed, nonjudgmental audience of cats helps students to sustain their focus, maintain a higher state of awareness, and develop an improved attitude toward school. In August of last year, ARL officially started the Book Buddies program, inviting students in first through eighth grades to read to the cats. As an incentive to continue, once the students complete five books, they receive prizes. “It’s one of those opportunities that is unique and humorous and so endearing,” Makela said about the assignment to document the Book Buddies program.
See more marvelous photos at the Slate Magazine link above. Even more at Buzzfeed–including more girls.
Now to the news:
I’ve long suspected that Edward Snowden interacted with Wikileaks’ Julian Assange and others in the hacker community before he made his final decision to steal a massive trove of data from NSA computers and then abscond to Hong Kong at the end of May last year.
We know that Snowden was in touch with Jacob Applebaum and Laura Poitras early on, because they published an interview with him in Der Spiegel that they had conducted by e-mail in Mid-May, before Snowden fled Hawaii. But Snowden could have actually met Applebaum in Hawaii in April 2013 when Applebaum vacationed there by his own admission. Did Snowden and Applebaum discuss Snowden’s plans to steal NSA files? Did Applebaum suggest which items Snowden should take? Note that Applebaum is deeply involved with Wikileaks and has been a long-time, passionate defender of Julian Assange.
Glenn Greenwald revealed in his new book “No Place to Hide” that Snowden had used the code name “Cincinnatus” in early communications between the two. Interestingly enough, a “cyber-party” had been held in Hawaii in December 2012, and the host was someone who called himself “Cincinnatus.” Once this news came out, people began speculating on Twitter that perhaps this wasn’t a coincidence. Suddenly, on May 17, the cyber-party announcement was deleted by someone with the Twitter handle @jskuda. Fortunately Twitter user @ShrillBrigade located it on the Wayback Machine. And check out the title of Cincinnatus’ talk: “Painlessly setting up your own fast exit.” (h/t @catfitz)
Then yesterday, former criminal hacker and technical adviser to Greenwald and Poitras’ Freedom of the Press Foundation Kevin Poulsen published a limited hangout at Wired: Snowden’s First Move Against the NSA Was a Party in Hawaii.
It was December 11, 2012, and in a small art space behind a furniture store in Honolulu, NSA contractor Edward Snowden was working to subvert the machinery of global surveillance.
Snowden was not yet famous. His blockbuster leaks were still six months away, but the man destined to confront world leaders on a global stage was addressing a much smaller audience that Sunday evening. He was leading a local “Crypto Party,” teaching less than two dozen Hawaii residents how to encrypt their hard drives and use the internet anonymously.
“He introduced himself as Ed,” says technologist and writer Runa Sandvik, who co-presented with Snowden at the event, and spoke about the experience for the first time with WIRED. “We talked for a bit before everything started. And I remember asking where he worked or what he did, and he didn’t really want to tell.”
Runa Sandvik is a hacker who works at the TOR project along with Jacob Applebaum. TOR is a site (ironically funded by the U.S. Department of Defense) that provides free encryption software to people who want to hide their on-line activities (including drug dealers and child porn purveyors).
The roots of Snowden’s crypto party were put down on November 18, 2012, when he sent an e-mail to Sandvik, a rising star in privacy circles, who was then a key developer on the anonymous web surfing software Tor.
Tor is free software that lets you go online anonymously. The software is used by a wide swath of people in need of extreme anonymity, including human rights groups, criminals, government agencies, and journalists. It works by accepting connections from the public internet, encrypting the traffic and bouncing it through a winding series of relays before dumping it back on the web through any of more than 1,000 exit nodes.
Most of those relays are run by volunteers, and the pre-leak Edward Snowden, it turns out, was one of them.
How about that? Snowden was already deeply involved with TOR in December 2012–and Jacob Applebaum of TOR just happened to travel to Hawaii a few months later in April! Coincidence? I don’t think so.
In his e-mail, Snowden wrote that he personally ran one of the “major tor exits”–a 2 gbps server named “TheSignal”–and was trying to persuade some unnamed coworkers at his office to set up additional servers. He didn’t say where he worked. But he wanted to know if Sandvik could send him a stack of official Tor stickers. (In some post-leak photos of Snowden you can see the Tor sticker on the back of his laptop, next to the EFF sticker).
Well, well, well. Now we know how Snowden got his TOR sticker. Did Runa give him the EFF sticker too? Read the rest of the Wired piece for more details.
Phew! I hope that made sense. This stuff is difficult to write about.
Also yesterday, well-known and respected journalist and New Yorker writer George Packer published a no-holds-barred review of Glenn Greenwald’s new book in the UK Prospect: The errors of Edward Snowden and Glenn Greenwald. Among other things, Packer accuses Greenwald of “a pervasive absence of intellectual integrity,” and provides numerous examples. He characterizes Snowden as someone who lives on the internet, detached from the realities of the real world. Here are a few excerpts, but please read the whole thing.
Snowden’s leaks can be seen, in part, as a determined effort to restore the web to its original purity—a project of technology rather than law. “Let us speak no more of faith in man, but bind him down from mischief by the chains of cryptography,” wrote Snowden, in an early message to his collaborators. In March of this year, appearing remotely from Russia on a robotised screen onstage at a TED talk in Vancouver, Snowden said that the single best solution to the NSA’s abuses is stronger encryption: “The internet that we’ve enjoyed in the past has been exactly what we, as not just a nation but as a people around the world, need.” In taking nearly two million highly classified documents from the US, he was grabbing back the key to heaven.
As I’ve written previously, Snowden’s solution to the problem of government interference with its citizens is impenetrable universal encryption–never mind the fact that this would allow vast numbers of vicious criminals to hide their actions from law enforcement.
As I suspected, Packer writes that Greenwald’s book “contains no major scoops.” He does, however, praise Greenwald’s argument for the primacy of privacy as central to a “free society.”
Greenwald also makes a powerful case—all the more so for being uncompromising and absolute—for the central role of privacy in a free society, and against the utilitarian argument that, since the phone companies’ metadata on Americans hasn’t been seriously abused by government officials (not yet, anyway), none of us should be too worried. In a chapter called “The Harm of Surveillance,” he cites Justice Louis Brandeis’s famous opinion on the basic “right to be let alone,” and writes: “The desire for privacy is shared by us all as an essential, not ancillary, part of what it means to be human. We all instinctively understand that the private realm is where we can act, think, speak, write, experiment, and choose how to be, away from the judgemental eyes of others. Privacy is a core condition of being a free person.”
I would argue that these considerations are of vital importance to people like Greenwald who are financially secure. Those Americans who must deal with racial and gender discrimination, long-term unemployment, and especially grinding poverty have other, more urgent concerns. Can one be a “free person” under those conditions?
Along similar lines, Packer writes:
If Greenwald and others were actually being persecuted for their political beliefs, they would instinctively understand that the rule of law has to protect people regardless of politics. The NSA disclosures are disturbing and even shocking; so is the Obama administration’s hyper-aggressive pursuit of leaks; so is the fact that, for several years, Poitras couldn’t leave or re-enter the US without being questioned at airports. These are abuses, but they don’t quite reach the level of the Stasi. They don’t portend a totalitarian state “beyond the dreams of even the greatest tyrants of the past,” as Greenwald believes is possible. A friend from Iran who was jailed and tortured for having the wrong political beliefs, and who is now an American citizen, observed drily, “I prefer to be spied on by NSA.” The sense of oppression among Greenwald, Poitras, and other American dissenters is only possible to those who have lived their entire lives under the rule of law and have come to take it for granted.
In the year since the first NSA disclosures, Snowden has drifted a long way from the Thoreauvian ideal of the majority of one. He has become an international celebrity, far more championed than reviled. He has praised Russia and Venezuela’s devotion to human rights. His more recent disclosures have nothing to do with the constitutional rights of US citizens. Many of them deal with surveillance of foreign governments, including Germany and Brazil, but also Iran, Russia, and China. These are activities that, wise or unwise, fall well within the NSA’s mandate and the normal ways of espionage. Snowden has attached himself to Wikileaks and to Assange, who has become a tool of Russian foreign policy and has no interest in reforming American democracy—his goal is to embarrass it. Assange and Snowden are not the first radical individualists to end up in thrall to strongmen.
Snowden looked to the internet for liberation, but it turns out that there is no such thing as an entirely free individual. Cryptography can never offer the absolute privacy and liberty that Snowden seeks online. The internet will always be a space controlled by corporations and governments, and the freedom it provides is of a limited, even stunting, kind. No one lives outside the fact of coercion—there is always a state to protect or pursue you, whether it’s Obama’s America or Putin’s Russia.
I’ve barely touched the surface of Packer’s scathing critique of Greenwald’s “journalism”; I enourage you to go to Prospect link to read more.
I have a few more stories for you that I’ll list link-dump style:
It appears that the prosecution in the Boston Bombing case decided to leak some previously secret information–most likely to counter the defense’s argument that Dzhohar Tsarnaev was illegally questioned by the FBI when he was in the hospital with terrible injuries.
Boston Globe: Christmas Lights Used in Boston Marathon Bombs.
This is encouraging from the Boston Globe: Oakland Examining Pension of FBI Agent who Shot Todashev
The Economic Times of India: Google wants to show ads through your thermostat and car. (You though the NSA was bad?)
Information Week: Google Outlines Advertising Vision. (How would you like targeted Google ads appearing on your refrigerator or watch?)
The Atlantic: It Wasn’t Household Debt That Caused the Great Recession; It was how that debt was disproportionately distributed to America’s most economically fragile communities.
Science Recorder: ‘Aliens of the sea’ could lead to breakthroughs in regenerative medicine.
What stories are you following today? Please post your links on any topic in the comment thread.
I use to watch PBS a lot. It’s been rather overrun by nutso libertarians and republicans the same way Europe was over run with Bubonic Plague-carrying fleas during the middle ages. Back in the middle ages, the “enlightened” religious and kingdom policy makers decided cats were the problem–since they obviously represent all things witchy–when they were really part of the solution. Cats ate rats and mice and a lot of the worst of the flea-bearing vermin. The guilty fleas escaped blame. Nowdays, pundits, policy preachers, and the political class believe that economists are part of the problem and have created a serious amount of snake oil-based explanations that simply do not hold up to analysis or data.
So, PBS Newshour gets David Brooks–dilettante extraordinaire–and Ruth Marcus–professional effete intellectual snob for hire–to explain the recent employment numbers. Yup, why get economists to talk about the consensus in our community when you can have inside-the-beltway surrealism ? Why is David Brooks given a platform to spew lies, nonsense, and propaganda? Dr. Baker, I am excerpting you completely. Forgive me the lapse in fair use.
The PBS Newshour won the gold medal for journalistic malpractice on Friday by having David Brooks and Ruth Marcus tell the countrywhat the Friday jobs report means. Brooks and Marcus got just about everything they said completely wrong.
Starting at the beginning, Brooks noted the slower than projected job growth and told listeners:
“Yes, I think there’s a consensus growing both on left and right that we — the structural problems are becoming super obvious.
“So when the — this recession started a number of years ago, you had 63, something like that, out of 100 Americans in the labor force. Now we’re down, fewer than in [the employment to population ratio is now 58.7 percent] — than when the recession started. And so that suggests we have got some deep structural problems. It probably has a lot to do with technological change. People are not hiring — companies are not hiring human beings. They’re hire machines.”
It’s hard to know what on earth Brooks thinks he is talking about. There is nothing close to a consensus on either the left or right that the economy’s problems are structural, as opposed to a simple lack of demand (i.e. people spending money). This is shown clearly by the overwhelming support on the Federal Reserve Board for its policy of quantitative easing. This policy is about trying to boost demand. A policy that the Republican Chairman, Ben Bernanke, has repeatedly advocated to Congress as well. This policy would not make sense if they viewed the weak demand for labor in the economy as being the result of structural problems. So clearly Brooks’ consensus excludes the Fed.
It also is worth noting the other part of Brooks’ story, that instead of hiring workers firms “hire machines,” is completely contradicted by the data. Investment has actually slowed in the last couples of years. (Non-residential investment is up by just 2.4 percent from its year ago level.) This means that firms are not hiring machines, or at least not as rapidly as they had in prior years. Also the rate of productivity growth has slowed sharply from the pre-recession period. In the last three years productivity growth has averaged less than 1.0 percent a year. This compares to more than 2.5 percent a year from 1995 until the recession in 2007. This means that machines are displacing workers much less rapidly than in a decade when we had much lower unemployment.
How does one get a job speculating on national TV on things one knows nothing about? I think I would like a job like that. It has to be easier than actually going to school and become a research specialist in a field. I think I’d be great at astrophysics commentary. Maybe I can replace Dr. Neil DeGrassi who gets all the kewl special effects-based astronomy gigs on PBS. Hell, there’s a doctor in front of my name too. Who cares if it’s not in anything germane or relevant to astrophysics? Certainly not PBS. But,here’s the shrill one with the facile, data-based debunk.
Indeed: one strong indicator that the problem isn’t structural is that as the economy has (partially) recovered, the recovery has tended to be fastest in precisely the same regions and occupations that were initially hit hardest. Goldman Sachs (no link) looks at unemployment in the “sand states” that had the biggest housing bubbles versus the rest of the country; it looks like this:
So the states that took the biggest hit have recovered faster than the rest of the country, which is what you’d expect if it was all cycle, not structural change.
I’ve done a quick and dirty take on unemployment by occupation, looking at changes in unemployment rates from the 2007 business cycle peak to the unemployment peak in 2009-10, and then the subsequent decline; it looks like this:
It’s the same as the geographical story: the occupations that took the biggest hit have had the strongest recoveries.
In short, the data strongly point toward a cyclical, not a structural story — and there is broad agreement, for once, among economists on this point. Yet somehow, it’s clear, Beltway groupthink has arrived at the opposite conclusion — so much so that the actual economic consensus on this issue wasn’t even represented on the Newshour.
Robert Reich thinks that its basically in Republican best interests to keep people unemployed and suffering. Believe me, people are unemployed and suffering. I can really offer us some anecdotal evidence on that as well as the numbers.
Job-growth is sputtering. So why, exactly, do regressive Republicans continue to say “no” to every idea for boosting it — even last week’s almost absurdly modest proposal by President Obama to combine corporate tax cuts with increased spending on roads and other public works?
It can’t be because Republicans don’t know what’s happening. The data are indisputable. July’s job growth of 162,000 jobs was the weakest in four months. The average workweek was the shortest in six months. The Bureau of Labor Statistics has also lowered its estimates of hiring during May and June.
It can’t be Republicans really believe further spending cuts will help. They’ve seen the effects of austerity economics on Europe. They know the study they relied on by Carmen Reinhart and Kenneth Rogoff has been debunked. They’re no longer even trying to make the case for austerity.
It could be they just want to continue opposing anything Obama proposes, but that’s beginning to seem like a stretch. Republican leaders and aspiring 2016 presidential candidates are warning against being the “party of ‘no.’” Public support for the GOP continues to plummet.
The real answer, I think, is they and their patrons want unemployment to remain high and job-growth to sputter. Why? Three reasons:
First, high unemployment keeps wages down. Workers who are worried about losing their jobs settle for whatever they can get — which is why hourly earnings keep dropping. The median wage is now 4 percent lower than it was at the start of the recovery. Low wages help boost corporate profits, thereby keeping the regressives’ corporate sponsors happy.
Second, high unemployment fuels the bull market on Wall Street. That’s because the Fed is committed to buying long-term bonds as long as unemployment remains high. This keeps bond yields low and pushes investors into equities — which helps boosts executive pay and Wall Street commissions, thereby keeping regressives’ financial sponsors happy.
Third, high unemployment keeps most Americans economically fearful and financially insecure. This sets them up to believe regressive lies — that their biggest worry should be that “big government” will tax away the little they have and give it to “undeserving” minorities; that they should support low taxes on corporations and wealthy “job creators;” and that new immigrants threaten their jobs.
It appalls me that some one classified as a “liberal”–like Ruth Marcus supposedly is–can be a mouthpiece for lies that support a decidedly illiberal agenda. I believe Economist Mark Thoma has the correct take on this one.
The arguments serve an ideological goal. Perhaps we shouldn’t assume that the main motivation of many pundits and policymakers is economic rather than political?
I think I’ve mentioned that I’m not a labor economist. I’m a financial economist. However, it’s hard to get through any econ program with out learning something about the labor markets given that it’s one of the most basic of all markets. I wanted to talk about the increased minimum wage proposal in the President’s SOTU address.
You’ll probably hear quite a bit about how minimum wages create unemployment. This is true under specific conditions. The minimum wage must be below the going wage or what we call the equilibrium or clearing wage so that it is ‘binding’ or actually creating an excess supply of job seekers for that wage and less jobs than would be available at the clearing wage. You can look at the graph of the US below and see that in many states, the proposed Obama increase to the minimum wage is lower than the going wage in many states. The poorest states–mostly in the south and middle of the country–are the ones with the lower wages.
However, the basic 101 econ labor market conditions, assumptions and model are very simplistic. All of these things impact the outcome and can determine if the minimum wage increase creates any excess workers. Labor economists that look at the real world have found some additional things about minimum wages that suggest that minimum wage can benefit the economy at large and unemployment at large. They can also help create efficiencies in unexpected places, which is always good for markets.
I’m going to try to give you some background from the popular press, scholarly articles, and a conservative magazine where economists explain why increasing the minimum wage can be good for the economy. Actually, there’s so much good rationale that even Walmart lobbies congress for increases. That probably will surprise you, but it’s pretty simple. Minimum wage workers are Walmart shoppers. Giving them more income turns them into customers. They don’t have any leftover money so they basically spend all they get. This is good for Walmart. This isn’t true for richer folks. They tend to sit on their money and it goes to places that can take time to work through our economy if it actually goes to our economy and not some place else entirely.
So, let me first start with a New Yorker article called “The Case for a Higher Minimum Wage”. This is, of course, not the scholarly arguments. However, there’s some good background information in the article to get us situated with the stylized facts. Unlike House Republicans and Joe Scarborough, people that actually want to know abut things rather than opine through their bungholes love them some stylized facts.
While the labor economists and econometricians are still arguing about which of their many studies can be relied upon, there are quite a few things about minimum wages, and their impact on the economy, that we know for sure. Taken together, these things amply justify raising the minimum wage, as President Obama called for in his State of the Union address.
The first statement we can make without fear of contradiction is that, at $7.25 an hour, the current minimum wage is pretty low. In nominal dollars, it’s gone up quite a bit over the past twenty-five years. In 1978, it was $2.65; in 1991, it was $4.25. But these figures don’t take into account rising prices, which eat away at purchasing power. After adjusting for inflation, the minimum wage is about $3.30 less than it was in 1968. Back then—forty-five years ago—the minimum wage was $10.56 an hour, according to a very useful chart from CNNMoney.
We also know that the U.S. minimum wage is low compared to its counterparts in other advanced countries. In France and Ireland, for example, the minimum remuneration level is more than eleven dollars an hour. Even in Great Britain, which is usually regarded as a country with a flexible, U.S.-style labor market, it is close to ten dollars an hour. Another informative chart, this one from Business Insider, shows that the U.S. minimum wage is comparable to ones in places like Greece, Spain, and Slovenia—countries where G.D.P. per capita and labor productivity are markedly lower than here in the United States. We have an advanced economy but a middle-level minimum wage.
A second important and (largely) undisputed finding is that there is no obvious link between the minimum wage and the unemployment rate. During the nineteen sixties, when the minimum wage was raised sharply, unemployment rates were sharply lower than they were in the nineteen eighties, when the real value of the minimum wage fell dramatically. If you look across the states, some of which set a minimum wage above the federal minimum, you can’t see any sign of higher rates leading to higher unemployment. In Nevada, where the national minimum of $7.25 an hour applies, the jobless rate is 10.2 per cent. In Vermont, where the minimum wage is $8.60 an hour, the unemployment rate is 5.1 per cent. What these figures tell us is that other factors, such as the overall state of the economy and how local industries are doing, matter a lot more for employment than the level of the minimum wage does.
There are, in fact, many things that impact how the level of the minimum wage will impact an economy. Some economists have found that a “properly functioning minimum wage” can actually improve labor flows in a market. Lee & Saez (2010) show under which conditions this can happen. This link goes to a theoretical paper so if calculus is not you’re thing, you may want to take my word for it. I’m going to show you the technical result as well as the authors’ story that is much more intuitive so you get an idea of how economists look at these things. This is from the paper’s introduction and conclusion which are the parts without the calculus!!
We show that a binding minimum wage is desirable as long as the government values redistribution from high-to low-wage workers, the demand elasticity of low-skilled labor is finite, the supply elasticity of low-skilled labor is positive, and most importantly, that the unemployment induced by the minimum wage is efficient, i.e. unemployment hits workers with the lowest surplus first. The intuition is extremely simple: starting from the competitive equilibrium, a small binding minimum wage has a first order effect on distribution but only a second order effect on efficiency as only marginal workers initially lose their job.
This is from the employer’s view point. It basically says they let go of their worst employees first so they really don’t lose much. Also, it implies it’s probably not a large number that are released. The problem is that this doesn’t really look at the increased number of people that might enter the work force to get at the higher wage. This is part of the excess worker phenomenon as people that wouldn’t be in the market for the lower wage will enter the market if the wage is higher. Therefore, more people will be looking for jobs than there will be jobs available. However, this isn’t as big of a problem as job losers for society as a general rule. It just makes the numbers appear worse.
The second part of the paper considers the more realistic case where the government also uses taxes and transfers for redistribution. In our model, we abstract from the hours of work decision and focus only on the job choice and work participation decisions. Such a model can capture both participation decisions (the extensive margin) as well as decisions whereby individuals can choose higher paying occupations by exerting more effort (the intensive margin). In that context, the government observes only earnings, but not the utility work costs incurred by individuals.1
In such a model, we show that a minimum wage is desirable if unemployment induced by the minimum wage is efficient and the government values redistribution toward low-skilled workers. The intuition for this result is the following. A binding minimum wage enhances the effectiveness of transfers to low-skilled workers as it prevents low-skilled wages from falling through incidence effects. Theoretically, the minimum wage under efficient rationing sorts individuals into employment and unemployment based on their unobservable cost of work. Thus, the minimum wage partially reveals costs of work in a way that the tax system cannot.
This is an interesting result since it basically says that it’s a more efficient way of giving poorer folks incomes by keeping the most efficient ones in the labor force instead of being unemployed and relying on government programs. Their model argues that a minimum wage efficiently rations ‘out of work’ benefits. So, in this case, yes it creates some unemployment, but generally this means the workers who are the most ‘deserving’ of the job stay in the job and those that aren’t can fall into the safety net and be retrained or schooled to improve their prospects.
One of the primary results of a paper by Dube et al (2o12) is estimating the decrease of what we call “churning” or what you probably know as job-hopping. This behavior costs employers a lot of money since the initial employment and training periods can be expensive for even the lowest wager earners. Reducing churning means less of these expenses overall and basically coverage of the increased wage. So, in this case, the minimum wage makes the employer think about the total wage bill and not just the portion related to hourly work.
Here’s one of the more interesting set of arguments from the conservative point of view. This is the idea that by providing a good working wage at the bottom wage earners, you stop the problem of a potential ‘college graduate’ bubble. Since the majority of jobs in this country still don’t require a college degree, people will be more likely to work jobs and not over-educate themselves. The author also argues that the kinds of jobs that tend to be minimum wage jobs are not out-sourceable so improving the lot of these folks improves a lot more than just the people in the jobs. Minimum wage jobs tend to be service jobs and the benefits of the incomes and the jobs themselves will stay in the country regardless of the higher wage. We again see the argument that most economists make about ‘trickle-up’ economics. Giving more income to the lowest wage earners actually creates a stimulus because they spend their money and there are a lot of them.
Although the direct financial benefits to working-class Americans and our economy as a whole are the primary justifications for the proposal, there are a number of subsidiary benefits as well, ranging across both economic and non-economic areas.
First, the net dollar transfers through the labor market in this proposal would generally be from higher to lower income strata, and lower-income individuals tend to pay a much larger fraction of their income in payroll and sales taxes. Thus, a large boost in working-class wages would obviously have a very positive impact on the financial health of Social Security, Medicare and other government programs funded directly from the paycheck. Meanwhile, increased sales tax collections would improve the dismal fiscal picture for state and local governments, and the public school systems they finance.
A final argument for using a minimum wage is that even though it tends to be less efficient and more costly than just supplementing the incomes of low income earners, it tends to be politically easier to get an increase through congress than a subsidy.
Does raising it improve the plight of the worst off, at a reasonable price?
A lot depends on your definitions, but economist Adam Ozimek makes a smart point. According to a 2007 study by the CBO, an increase in the minimum wage to $7.25, like that eventually passed that year, would increase wages by $11 billion, of which $1.6 billion went to poor families.
By contrast, increasing the Earned Income Tax Credit for large families (as happened in the stimulus bill) and for single people would cost $2.4 billion, of which $1.4 billion would go to poor families. The EITC option costs one fifth as much to society but does about as much good for poor families. That suggests that if you want to help families escape poverty, wage subsidies are a more cost-effective option than the minimum wage.
Oddly enough, the conservatives are less interested in the net savings, than the process of doing this, so they prefer minimum wage increases to the EITC option. This means Boehner should be happier than he is with this proposal.
Furthermore, as large portions of the working-poor became much less poor, the payout of the existing Federal Earned Income Tax Credit (EITC) would be sharply reduced. Although popular among politicians, the EITC is a classic example of economic special interests privatizing profits while socializing costs: employers receive the full benefits of their low-wage workforce while a substantial fraction of the wage expense is pushed onto the taxpayers. Private companies should fund their own payrolls rather than rely upon substantial government subsidies, which produce major distortions in market signals.
So, I hopefully didn’t overwhelm you with too much stuff over coffee, but I would like to remind you that this is basically the mornings read post. So, since I’ve run out of space, it’s now your turn to share the other things. Oh, and it’s okay to ask questions or tell me that something confuses you. I’m assuming you’re not a labor economist either. Again, there’s a lot of controversy and a lot of different circumstances and assumptions around all these models. But, it should let you know that increasing the minimum wage can be good policy for a variety of reasons even though it might impact the number of people looking for or working at those jobs.
What’s on your reading and blogging list today?
The New York Times has added more fodder for the Republicans’ Benghazi attacks. James Risen Mark Mazzetti and Michael S. Schmidt report that: U.S.-Approved Arms for Libya Rebels Fell Into Jihadis’ Hands.
The Obama administration secretly gave its blessing to arms shipments to Libyan rebels from Qatar last year, but American officials later grew alarmed as evidence grew that Qatar was turning some of the weapons over to Islamic militants, according to United States officials and foreign diplomats.
Of course there’s no evidence that this had anything to do with the Benghazi attacks, but I’m sure that won’t stop Senators McNasty, Huckleberry Closetcase, and their new pal Senator Kelley Ayotte from pretending otherwise.
No evidence has emerged linking the weapons provided by the Qataris during the uprising against Col. Muammar el-Qaddafi to the attack that killed four Americans at the United States diplomatic compound in Benghazi, Libya, in September.
But in the months before, the Obama administration clearly was worried about the consequences of its hidden hand in helping arm Libyan militants, concerns that have not previously been reported. The weapons and money from Qatar strengthened militant groups in Libya, allowing them to become a destabilizing force since the fall of the Qaddafi government.
Also at the NYT, Jared Bernstein once again explains why politicians (and the media) in the Village need to stop obsessing on taxes and start focusing in increasing employment and, along with it, consumer demand.
WITH the budget-and-tax showdown dominating headlines, most Americans probably missed an even more ominous story: according to a report by the Congressional Budget Office, America’s underlying growth rate — that is, the best the economy could do, under optimal conditions, without driving up inflation — has slowed from just under 4 percent a year in 2000 to just under 2 percent today.
Why does this matter? For one thing, the combination of a lower underlying growth rate, which you could think of as the economy’s speed limit, and a less equitable distribution of that growth was a reason middle-income households did so badly and poverty went up in the 2000s.
During the 1990s, in contrast, stronger demand for goods and services led to much faster job growth and the last real gains experienced by middle- and lower-income households. Faster growth in those years also spun off a lot more government revenues, which interacted with slightly higher tax rates to take the budget from deficit to surplus.
Read the whole thing and fantasize what we could be doing if we had smarter leadership in DC.
Back in Republican la-la land, Joel Kotkin at Forbes claims that blue states are committing suicide by supporting raising tax rates on the rich.
With their enthusiastic backing of President Obama and the Democratic Party on Election Day, the bluest parts of America may have embraced a program utterly at odds with their economic self-interest. The almost uniform support of blue states’ congressional representatives for the administration’s campaign for tax “fairness” represents a kind of bizarre economic suicide pact.
Any move to raise taxes on the rich — defined as households making over $250,000 annually — strikes directly at the economies of these states, which depend heavily on the earnings of high-income professionals, entrepreneurs and technical workers. In fact, when you examine which states, and metropolitan areas, have the highest concentrations of such people, it turns out they are overwhelmingly located in the bluest states and regions.
Really? Then how come we did so much better under the Clinton tax rates in the ’90s? After all, that’s all that is happening–except that the first $250,000 of these poor rich people’s money will still be taxed at the Bush rates. But that’s not how Kotkin sees it.
The people whose wallets will be drained in the new war on “the rich” are high-earning, but hardly plutocratic professionals like engineers, doctors, lawyers, small business owners and the like. Once seen as the bastion of the middle class, and exemplars of upward mobility, these people are emerging as the modern day “kulaks,” the affluent peasants ruthlessly targeted by Stalin in the early 1930s.
OMB!! “Wallets…drained!” “Stalin!” Let’s all freak out!
The ironic geography of the Democratic drive can be seen most clearly by examining the distribution of the classes now targeted by the coming purge. The top 10 states with the largest percentage of “rich” households under the Obama formula include true blue bastions Washington, D.C., which has the highest concentration of big earners, Connecticut, New Jersey, Maryland, Massachusetts, New York, California and Hawaii. The only historic “swing state” in the top six is Virginia, due largely to the presence of the affluent suburbs of the capital. These same states, according to the Tax Foundation, would benefit the most from an extension of the much-lambasted Bush tax cuts.
Hey Joel, maybe it’s not all about taxes, even though that’s all that seems to matter to you. Maybe some blue state folks think the whole economy would benefit if more people got back to work, earned some money and spent it–as suggested by Jared Bernstein in yesterday’s NYT (see above).
As Zandar notes, Kotkin then goes on to show how Republicans can use the home mortgage deduction and other methods to punish the blue state richies for voting for Obama.
– Keep the tax rate on capital gains the same.
– Raise income taxes on the top income bracket for 2013, those making $398,350 and up (single filers, married joint filers, or head of household).
– Means-test, or eliminate entirely, the mortgage interest deduction (which benefits taxpayers in areas with the highest real estate values and mortgages – i.e., Hawaii, D.C., New York, California and Connecticut).
– Means-test or eliminate entirely the federal deduction of state and local taxes, which is disproportionately utilized by those in high-tax blue states: “In 2005, taxpayers in California and New York together made up 20 percent of those claiming the deduction and accounted for 30 percent of its value. Itemizers in New York, New Jersey, Connecticut, and California claimed on average over $12,000 per household.”
Talk about a sore loser! Kotkin must be really bitter about Romney’s failure to get those blue state dopes to vote for him.
Meanwhile all those Romney voters in the red states are dreaming about seceding from the union. But if they did, asks The Nation, “Who’d Pay for Their Massive Government Handouts?”
In the wake of Obama’s victory, citizens in several states submitted petitions to secede from the United States. It is something of an irony that the very states seeking secession from “big government”—like Louisiana and Alabama—have been among the top beneficiaries of that selfsame government. Put bluntly, the government would be far smaller without them, and they would seriously struggle far more without it. Indeed, were they to become independent, most would be failed states in need of a bailout. Only this time their benefactor would be not the federal government but the International Monetary Fund, of which the United States is the principal donor. Louisiana and Alabama would go the way of Greece and Spain.
Oh, the irony of it all! And here’s another irony for Republicans to chew on. From TPM: Why Insurers Are Wary Of Raising The Medicare Age
House Republican leaders want to avoid the fiscal cliff with a proposal that would gradually raise the Medicare eligibility age to 67. Democrats are broadly reluctant to cut benefits, but President Obama was willing to accept the policy last year in failed deficit reduction talks with House Speaker John Boehner, and top Democrats have left the door open to including that measure in a grand budget bargain.
It may seem counter-intuitive: why would an industry threatened by government insurance not want it to shrink?
The reason: hiking the Medicare eligibility age would throw seniors aged 65 and 66 off Medicare and into the private market, forcing insurers, who will soon be required to cover all consumers regardless of health status, to care for a sicker, more expensive crop of patients.
“The risk pool issue is important,” the insurance industry source said. “[I]f you add more older and sicker people to the pool, that’s definitely going to have any impact on premiums.”
The policy would save the federal government $113 billion over a decade, according to the Congressional Budget Office. But it achieves that by raising the cost of private insurance: the Kaiser Family Foundation projected that a Medicare age of 67 would raise costs for under-65 patients by an average of $141 in 2014. (In practice it would be phased in.)
And even more Republican stupidity: Right wing nutcases are all bent out of shape because their favorite crazy propaganda movie didn’t get any Oscar nominations.
Gerald Molan, the director of the extremely anti-Obama movie, 2016: Obama’s America , is mad that his and Dinesh D’Souza’s film [“2016”] wasn’t on the shortlist of documentaries nominated for an Academy Award.
“The action confirms my opinion that the bias against anything from a conservative point of view is dead on arrival in Hollywood circles,” he complained to the Hollywood Reporter.
It couldn’t possibly have anything to do with the fact that the movie is based on a pack of lies and right wing conspiracy theories, could it?
To cleanse your palate of right wing and DC craziness, try watching this video from NASA that show views of the Earth from space. Here’s a still shot:
So what are you reading and blogging about today? I’ve been a little out of the loop for the past couple of days, so I look forward to clicking on your links!
I lived in the Quarter for five years. I now live about 1 mile from it. I gigged there even after I moved so I know a lot of the clubs, a lot of the people, and a lot of the characters. I could tell you about the Chicken Man, Ruthie the Duck Girl, and a number of French Quarter eccentrics. I’ve lent a lot of gowns and girlie stuff to guys in my day. I love the Quarter. However, whenever we do a celebration there’s always a presence of religious folks dragging crosses, shouting hateful things through megaphones, and carrying really nasty placards. You get to know them too even though you’re glad when they go home and crawl under their rocks. I used to live in a back house but many of my friends had big ol’ wrought iron-laced balconies. My friend Georgia and I used to like to water her plants on the days they drug their ugly in front of our homes on Royal. So, I just loved reading this. Here’s one of them–Rev. Grant Storms– who has been a big damper our big celebration of the Gay community of the South; Southern Decadence. Try to just let the irony and the hypocrisy flow all over you.
The Rev. Grant Storms, the former “Christian patriot” pastor whose marches against homosexuality at New Orleans’ Southern Decadence festival briefly put him in the national spotlight, was convicted of obscenity Wednesday, for exposing himself while masturbating at Lafreniere Park last year. In his confession, he described public masturbation as “a thrill,” but authorities debunked suspicions that he was a pedophile.
Storms, 55, who lives in Metairie, declined to comment after the conviction. Judge Ross LaDart of the 24th Judicial District Court, who presided over the daylong trial because Storms waived a jury, did not even break to deliberate. He promptly found Storms guilty of the single count of obscenity. He sentenced Storms to three years of probation, citing no evidence of a criminal history.
LaDart also ordered Storms to be evaluated, apparently psychologically. The judge noted that in Storms’ confession, he admitted that Feb. 25, 2011, the day he was arrested, was the third time that week that he masturbated in Lafreniere Park.
“Lafreniere Park is a public place,” LaDart said in announcing the verdict. “Lafreniere Park is a place that was chosen by this defendant to engage in a history of masturbation.”
Storms declined to testify. His attorneys, Brett Emmanuel and Donald Cashio, did not overtly deny their client masturbated in the park but argued he never exposed his penis. The exposure was a necessary element of the obscenity charge.
In his confession, Storms told Jefferson Parish Sheriff’s Office Sgt. Kevin Balser he had taken a break from his grass cutting business to sip a beer in the park, where he said he became “horny.” He said he put his hands into his underwear, but he never exposed himself.
So, one of the big questions that came out of watching the republican primary debate was how can people be so cruel? Why would they clap at the thought of some one dying or boo a gay soldier. Here’s an explanation from Josh Holland at Alternet. He explains the conservative psyche and how ordinary people can embrace Paul Ryan.
Earlier this year, Democratic operatives looking for the best way to define Mitt Romney discovered something interesting about Paul Ryan’s budget. The New York Times reported that when the details of his proposals were run past focus groups, they found that the plan is so cruel that voters “ simply refused to believe any politician would do such a thing.”
In addition to phasing out the Earned Income Tax Credit that keeps millions of American families above the poverty line and cutting funding for children’s healthcare in half, Jonathan Cohn described the “America that Paul Ryan envisions” like this:
Many millions of working-age Americans would lose health insurance. Senior citizens would anguish over whether to pay their rent or their medical bills, in a way they haven’t since the 1960s. Government would be so starved of resources that, by 2050, it wouldn’t have enough money for core functions like food inspections and highway maintenance.
Ryan’s “roadmap” may be the least serious budget plan ever to emerge in Washington, but it is reflective of how far to the right the GOP has moved in recent years. According to a recent study of public attitudes conducted by the Pew Research Center, in 1987, 62 percent of Republicans said “the government should take care of people who cannot take care of themselves,” but that number has now dropped to just 40 percent ( PDF). That attitude was on display during a GOP primary debate last fall when moderator Wolf Blitzer asked Ron Paul what fate should befall a healthy person without health insurance who finds himself suddenly facing a catastrophic illness. “Congressman,” Blitzer pressed after Paul sidestepped the question, “are you saying that society should just let him die?” Before Paul had a chance to respond, the audience erupted in cheers , with some shouting, “yeah!”
Well, stimulus has worn off and the Republican war on jobs and the economy–to blame on Obama–is showing as jobs and consumer confidence start heading down.
Applications for U.S. unemployment benefits climbed last week to a one-month high, showing scant progress in the labor market that’s left Americans more pessimistic about the economy.
Jobless claims rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18, Labor Department figures showed today in Washington. Consumer confidence dropped last week to the lowest level since January, according to the Bloomberg Consumer Comfort Index.
Companies are keeping payrolls lean as a weaker global economy and lack of clarity on U.S. tax policy next year cloud the demand outlook, one reason the Federal Reserve may be closer to further monetary stimulus. Residential real estate is a source of strength for the expansion, according to a report that showed new-home sales matched a two-year high in July.
“The economy is growing, but it’s still moderate growth, and the labor market is still weak,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “We’re also getting better numbers in terms of building activity. That’s certainly adding to growth and offsetting some of the weakness we’re seeing from the consumer.”
The Party of No and Stupidity is basically playing political games with American lives and with the American economy. There’s a huge story about it at Time Magazine this week based on the Michael Grunwald book.
TIME just published “The Party of No,” an article adapted from my new book, The New New Deal: The Hidden Story of Change in the Obama Era. It reveals some of my reporting on the Republican plot to obstruct President Obama before he even took office, including secret meetings led by House GOP Whip Eric Cantor (in December 2008) and Senate Minority Leader Mitch McConnell (in early January 2009) where they laid out their daring (though cynical and political) no-honeymoon strategy of all-out resistance to a popular president-elect during an economic emergency. “If he was for it,” former Ohio senator George Voinovich explained, “we had to be against it.” The excerpt includes a special bonus nugget of Mitt Romney dissing the Tea Party.
But as we say in the sales world: There’s more! I’m going to be blogging some of the news and larger themes from the book here at time.com, and I’ll kick it off with more scenes from the early days of the Republican Strategy of No. Read on to hear what Joe Biden’s sources in the Senate GOP were telling him, some candid pillow talk between a Republican staffer and an Obama aide, and a top Republican admitting his party didn’t want to “play.” I’ll start with a scene I consider a turning point in the Obama era, when the new president came to the Hill to extend his hand and the GOP spurned it.
Every one here should know that I was an avid Hillary supporter once I decided she was far superior to any one running for president in 2008. I was pretty flabbergasted when a lot of people suggested that racism played a role in the primary process. The Republican Party has been race-baiting since Richard Nixon adopted “the Southern Strategy”. From the Bush Willy Horton ads, to the Reagan myth ofwelfare queens driving cadillacs, to the latest Romney strategy of suggesting Obama will gut the welfare program of work incentives, the Republicans have been courting the racist southern vote. I’ve since decided that race was a bigger factor than my “give’em them benefit of the doubt” philosophy embraced. I think we have to frame this election in terms of race because of the obvious framing of the President as “not American”, “foreign”, “dog-eating”, Muslim, Kenyan, etc. I can’t even believe how I see white men complaining about how racist every one is treating them. The deal is that you cannot complain about being down and out when you’re the group in power of all the major institutions in the country. Please read this article ‘The Fear of a Black President”by Ta-Nehisi Coates. We’ve been talking a lot about how Republicans could care less about the plight of women. They could care even less about the plight of racial minorities in this country. Coates juxtaposes Obama against the Trayvon Martin killing and all the other thing that remind us that we still have a long way to go with the vision that all of us are created equal.
By virtue of his background—the son of a black man and a white woman, someone who grew up in multiethnic communities around the world—Obama has enjoyed a distinctive vantage point on race relations in America. Beyond that, he has displayed enviable dexterity at navigating between black and white America, and at finding a language that speaks to a critical mass in both communities. He emerged into national view at the Democratic National Convention in 2004, with a speech heralding a nation uncolored by old prejudices and shameful history. There was no talk of the effects of racism. Instead Obama stressed the power of parenting, and condemned those who would say that a black child carrying a book was “acting white.” He cast himself as the child of a father from Kenya and a mother from Kansas and asserted, “In no other country on Earth is my story even possible.” When, as a senator, he was asked if the response to Hurricane Katrina evidenced racism, Obama responded by calling the “ineptitude” of the response “color-blind.”
Racism is not merely a simplistic hatred. It is, more often, broad sympathy toward some and broader skepticism toward others. Black America ever lives under that skeptical eye. Hence the old admonishments to be “twice as good.” Hence the need for a special “talk” administered to black boys about how to be extra careful when relating to the police. And hence Barack Obama’s insisting that there was no racial component to Katrina’s effects; that name-calling among children somehow has the same import as one of the oldest guiding principles of American policy—white supremacy. The election of an African American to our highest political office was alleged to demonstrate a triumph of integration. But when President Obama addressed the tragedy of Trayvon Martin, he demonstrated integration’s great limitation—that acceptance depends not just on being twice as good but on being half as black. And even then, full acceptance is still withheld. The larger effects of this withholding constrict Obama’s presidential potential in areas affected tangentially—or seemingly not at all—by race. Meanwhile, across the country, the community in which Obama is rooted sees this fraudulent equality, and quietly seethes.
Obama’s first term has coincided with a strategy of massive resistance on the part of his Republican opposition in the House, and a record number of filibuster threats in the Senate. It would be nice if this were merely a reaction to Obama’s politics or his policies—if this resistance truly were, as it is generally described, merely one more sign of our growing “polarization” as a nation. But the greatest abiding challenge to Obama’s national political standing has always rested on the existential fact that if he had a son, he’d look like Trayvon Martin. As a candidate, Barack Obama understood this.
“The thing is, a black man can’t be president in America, given the racial aversion and history that’s still out there,” Cornell Belcher, a pollster for Obama, told the journalist Gwen Ifill after the 2008 election. “However, an extraordinary, gifted, and talented young man who happens to be black can be president.”
Another outstanding essay in The Nation was written by Melissa Harris-Perry who still can’t believe that Romney chose Ryan. She can’t believe what this says about Romney’s complete embrace of the right wing and its view and treatment of women.
Nowhere is this more apparent, or more important, than in Ryan’s record on reproductive rights. Romney may have flippantly suggested that he would eliminate Planned Parenthood, but Ryan has worked consistently to restrict women’s access to healthcare. It’s not just his fifty-nine votes to block or limit reproductive rights that are of concern; it’s the absolutist nature of his positions. He rejects rape and incest as mitigating circumstances for abortion. He won’t even consider the possibility that women’s moral autonomy or constitutional rights are sufficient reasons for access.
Ryan is one of sixty-four Congressional co-sponsors of HR 212, a “personhood” bill that gives legal rights to fertilized eggs. Last November a similar measure was soundly defeated by 57 percent of voters in that liberal bastion, Mississippi. (Mississippi!) Ryan co-sponsored a bill too extreme for a state that has only one abortion clinic, a state whose policies have effectively made it impossible for most doctors to perform—or for most women to access—an abortion. It may be time to update the title of Nina Simone’s iconic song from “Mississippi Goddam” to “Paul Ryan Goddam.” Ryan’s role in HR 212 isn’t just the symbolic co-sponsorship of a bill with little likelihood of passage. He explicitly articulated his case for personhood in a 2010 Heritage Foundation article, in which he parrots the familiar conservative case that America’s failure to recognize fetuses as persons is the same as our nation’s historical failure to recognize the humanity of enslaved black people. Therefore, Roe v. Wade is the twentieth-century equivalent of the 1857 Dred Scott decision.
With Ryan and women’s health, there is no middle ground; there is only his moral judgment. And despite his avowed libertarianism on economic issues, on women’s health and rights Ryan is willing to use the full force of government to limit the freedom of dissenting citizens to exercise their opposing judgments.
The Republican Party’s vision of the future is to move the country back to where we would practically have to fight the civil war all over again. We also would have to fight for rights for women and recognition of the humanity of the GLBT community. Oh, wait, since the Tea Party took over Congress, we’re having to do that every day.
What’s on your reading and blogging list today?