Relevant and even prescient commentary on news, politics and the economy.

Sense on Stilts: Eight Graphs Showing a Quarter-Century of Wealth Inequality and Age Inequality

Scott Sumner made a very important point a while back (and repeatedly since) in a post wherein he makes a bunch of other (IMO) not very good points:

Income and wealth inequality data: Nonsense on stilts

His crucial (and I think true) point, in my words: you can’t think coherently about inequality — especially wealth inequality — if you don’t think about age. Older households have more wealth, because they’ve had more time to accrue wealth. There’s always gonna be wealth inequality based on that alone. It’s inevitable, and to a greater or lesser extent (warning: normative claim here), that’s as it should be.

I’ve been pondering this dynamic ever since, trying to figure out how to portray it in ways that let us think clearly about it. I’ve searched for presentations and studies, but — perhaps my Google skills need work — I’ve come up with almost nothing. Matt Bruenig’s recent post is a notable exception. Suggestions are very welcome. In any case, kudos and thanks to Scott for planting that seed.

But the anecdotes, surmises, arguments, and thought-experiments in Scott’s post don’t give us much in the way of systematic data and facts. He gives us “data” from his own personal Social Security history, and suggests that to evaluate the inequality dynamic we should drive around the country, “Go into poor people’s houses,” and eyeball their consumption bundles.

Right.

Where’s the beef? I find it hard to think about such things without facts, so I’m hoping I can provide some.

The September 4 release of the Fed’s  latest (2013) Survey of Consumer Finance data finally prompted me to dig into it. We now have nine triennial SCF samples starting in 1989, encompassing 24 years — most of the period following the Reagan Revolution. What kind of changes and trends have we seen over that quarter century? How did the wealth/age dynamic look in 1989? What does it look like today? How has it changed?

I’m going to concentrate on real (inflation-adjusted) household net worth — assets minus liabilities, things households own minus what they owe others — because:

1. It’s a good measure of prosperity.

2. There are many ways to to think about income (e.g., Does it include capital gains? Unrealized or realized only? What about undistributed corporate earnings? They belong to the shareholder households, right, so should they be imputed to household income? And etc.) Net worth is much more straightforward: assets at market value (with corporate firms’ value imputed to their ultimate household shareholders), minus debt.

I’ll say again some more: every economic assertion should be preceded with the words “by this measure” — different measures tell us different things, explain things differently — so I’ll give you a bunch of different household net worth measures in hopes that together, they tell some kind of coherent (perhaps even causal) story.

I’ll start with simple measures that are hopefully easy to grasp, and then move into more complex measures that my gentle readers may find illuminative.

First: how wealthy is the typical (median) American household, and the typical household in each age group, compared to 1989?

Screen shot 2014-09-21 at 9.30.02 AM

Key to understanding this graph: it’s not showing how individual households have changed — the age groups aren’t moving cohorts — it’s showing how the wealth of age groups has changed. People who are 65 today and have circa $232K (pink line, 2013) were in the 35-44 age group in 1989 and had circa $100K (dark red line, 1989).

The most obvious point: the typical American household is less wealthy today than the typical household in 1989 — down 4% from $85K to $81K. (So much for “the shining city on the hill” and the vaunted promises of trickle-down, supply-side, baby-drowning government, etc. etc. Would this measure look better if the Reagan Revolution had never happened, or never reached the fever pitch it has attained? That is the question, isn’t it? My answer: Yes. Profoundly better.)

Next: The typical elderly household (65+) is richer today than the typical elderly household was in 1989. The typical younger household (under 65, but especially under 55, and especially under 45) is poorer than it would have been in 1989.

(If you’re 65 or 66, please excuse me calling you “elderly.” It’s just a convenient shorthand.)

Another significant feature to note: the lines are more spread out on the right than they are the left. So elderly households are more richer relative to the youngest households than they were in ’89.

You may wish I’d zoom in so you can better see change in the youngest age group, but I’ll do you one better. Here’s a graph that shows changes in median wealth for different age groups:

Screen shot 2014-09-21 at 9.53.53 AM

The typical elderly household is circa 60% richer than they would have been in 1989. All other age groups are poorer than their 1989 equivalents. 35-to-44-year-olds in 2013 are almost 60% poorer than that age group was in 1989 — exactly the inverse of older households. (The dotted line shows the aforementioned 4% decline for all households.)

“We’ve been transferring money to the elderly!” Right? That’s certainly or probably true, but it ignores a key demographic trend: people are living longer. So: 1. They have more time to accumulate wealth, and 2. Their children inherit later in life. And the proportion of people in the higher age groups is larger than it was in the past. How should we think about that, analytically and normatively? Further research needed.

Also worth noting in this graph: before the recent…debacle of 2007–2009, the median wealth of older households grew a lot, while younger households held generally steady. No age group got (much) worse off, while older groups got much better off. Sounds okay, though not stellar. The Great Whatever greatly accentuated that old-young distinction, eviscerating the median wealth of all but the aged while leaving the typical elderly household mostly untouched. (See: Recessions Are Nature’s Way of Keeping the Little Guy Down.)

Next, average (mean) net worth by age group:

Screen shot 2014-09-22 at 10.16.28 AM

Similar, but quite different.

Older households are a lot richer today, by this measure, as they were by the median measure. (Much less true for the 75+ group.) Younger groups didn’t dive post-2007; they’re closer to the same.  The 45–54s fall somewhere in between, and All Households are up a reasonable amount.

This is mostly explained by increased (and varying) wealth concentrations at the top — across all households and within each age group — which I’ll look at below. The shape of the wealth distribution has changed. Just to help visualize that, here’s how income distribution has changed.

Screen shot 2014-09-22 at 11.31.27 AM

(The right side of this graph is cut off because the CPS doesn’t break out income levels at the upper end of the spectrum. )

Like the median graph, the mean graph shows a big increased spread going from left to right — older households are generally more richer today relative to younger households. Here’s a look at that change:

Screen shot 2014-09-22 at 10.50.42 AM

There are too many possible interactions going on in this for me to say much. But it seems to be influenced by the rising importance of big incomes at the top of certain groups when it comes to wealth building. Means get pulled around by big concentrations at the top, and that may be what’s happening, for instance, with the 65-74 group — a relatively small number of households in that group (company-owner and CEO-headed?) building extraordinary wealth in recent years. Those over 75 and 55-64, not so much.

All this shows us differences between age groups, now versus then. But what about inequality? Here’s a shot at that:

Screen shot 2014-09-22 at 11.17.32 AM

This is a fairly standard measure of inequality, wealth concentration at the top, here showing that measure within age groups over the years. (You could also compare the top 10% to 50%ers or to the bottom 90%, pull a GINI index, etc. This one’s handy.)

The most pronounced change is in younger groups. In 1989, the average (mean) 35-44 household was 2.6x richer than the typical (median) 35-44 household. In 2013, the ratio is 7.4x. The ratio has grown for every age group except 75+, though not nearly as much as for households under 35. For all households, the ratio has gone up from 3.9x to 6.6x.

And finally, just so you can collect the whole set, here’s the change in Mean:Median ratio over the years:

Screen shot 2014-09-22 at 11.48.48 AM

If you were in the 35-44 age group in 2010, or are in it now, you were, are, in a very competitive winner-take-all group compared even to similar households in 2007 — much less 1989.

All of these measures tell us that wealth inequality/concentration, growing wealth inequality, is a very real thing, even when you take age into account. Matt Bruenig came to a similar conclusion about the current state of age and wealth, presenting it in a graph that you may find more useful if less detailed than mine:

If you’ve read this far, you should read Matt’s whole post. It’s short and sweet.

Wealth inequality is extreme within all age groups. And as I’ve shown, it’s been getting more extreme. This especially for young households — both competing with their peers, and competing with older households.

Those are important conclusions. Wealth inequality data, pace Sumner, is not “nonsense on stilts.” It just requires some plodding, diligent legwork. Isn’t that what professional economists are supposed to do for a living?

Here’s the Excel source file I used (22mb). See Table 4:

http://www.federalreserve.gov/econresdata/scf/files/scf2013_tables_internal_real.xls

Here’s my spreadsheet, with the mean/median net worth data in more tractable form:

 http://www.asymptosis.com/wp-content/uploads/2014/09/Mean-median-wealth-age-scf.xls

I’d be delighted to hear suggestions about other ways to look at this, and conclusions that might be drawn. And of course, please point out any errors.

Cross-posted at Asymptosis.

 

Comments (3) | |

Dear Greg Sargent: “Re your Morning Plum reference to Krugman’s column today”

Update appended below.

—-

After a two-and-a-half-month hiatus from regular blogging here—most of my few posts this summer related to my passion about animal rescue and animal welfare—I’m once again feeling like posting about politics, at least more regularly than I posted this summer. (And maybe soon I’ll once again feel like posting about legal issues, but I don’t yet, so y’all who’ve been waiting for that with bated breath, well ….)

I wanted a break from all-politics-and-law-all-the-time, and (mostly) took one.  My active reentry here at AB began with two posts within the last few days—one that I thought would get some attention, but did, not; the other that I thought would get little attention, but got more than a little.

After reading emailed Greg Sargent this afternoon an embarrassingly long… eeeek … rant about that post of mine that got little attention—and, while I was at it, about two of my current political obsessions: the silly Hillary Clinton presidential-nomination anointment, by the press and (unwittingly, I think, courtesy of the press) the Democratic Party; and the silly six-year failure of our current White House standard bearer to ever trouble himself to … y’know … like … engage in any refutation of misinformation by … y’know … stating facts, coherently and specifically—I jumped all-in (to use an “in” cliché that really annoys me, but fits here) today.

But since emails from no-names are treated, I’m sure, as emails from no-names, and because, well, I’m just really in the mood right now, I’ll share my rant with all you AB readers, should any of you actually be interested:

Greg, you write this morning in the Morning Plum:

“REPUBLICANS AND THE ‘LAZY JOBLESS’:  Paul Krugman’s column today marvels at the ways GOP lawmakers continue to suggest the unemployed are choosing their plight, even as benefits have been slashed and we’re treating them with “unprecedented harshness.” But why?”

The answer to your question is, of course, that most people have no idea that unemployment compensation benefits have been dramatically slashed and are, as Krugman highlights, far lower than they have been in relation to the level of involuntary short-term and long-term unemployment in many decades.

Just as most people have no idea about one after another after another other facts concerning public policy—in Florida, for example, there is a TV ad asking people to vote for Rick Scott against Charlie Crist because “Obamacare has raised healthcare costs” and is “taking money from your pocket,” or words to that effect.

And of course most people think government employment—federal, state, local—has increased during Obama’s presidency; of course, actually, it has decreased, dramatically.

And on and on.  Which has been the case throughout Obama’s presidency.  Neither of our two current Democratic national standard bearers, Obama and Hillary Clinton, would be caught dead actually educating the public about, y’know, actual facts; neither one will speak in anything other than banal generalities.  Clinton, who probably could actually educate the public about such things as facts, instead talks incessantly about how excited she is about her daughter’s pregnancy—because, y’know, we’re all so deeply interested in this–and makes childish jokes about her failure to declare an intention to run for the presidency, deigning to add a few banalities about such things as income inequality so that we all know that her heart is in the right place.

And because the punditry insists that Dem presidential candidates are fungible, Clinton’s home free.  Clinton, Warren, and male longtime progressives such as Sherrod Brown, who can’t run because, well, Hillary Clinton probably will run, are all the same; one’s as good as the other.  After all, didn’t Clinton say in some speech back in November 2007 that, yeah, maybe income inequality has become a problem? I mean, who needs any more evidence that she’s an economics progressive than that?!

Giving speeches is, of course, what Clinton does.  In November 2007 she had been a senator for nearly seven years.  During which she voted for a really bad bankruptcy bill, and did nothing at all, at least to my knowledge (or, I think, to anyone else’s), that could matter to, say, people who aren’t upscale women trying to break corporate-hierarchy glass ceilings and such.

I’m a contributor to the blog Angry Bear, and last Friday, after learning about Boehner’s comments from Krugman’s mention of it on his blog, I posted an item about it titled “John Boehner Says the Obama Economy Has Eliminated Involuntary Unemployment!  Seriously; that’s what he said. The Dems should use this in campaign ads.”  The title was not facetious; I pointed out that Boehner’s representation of fact necessarily presumes a thriving economy in which jobs are available for anyone who wants one; in other words, we really have full employment now.  My post gained no attention, best as I can tell, so I’d like to see someone whose blog posts do get attention make the point—because it is an important one. Isn’t it?  My post is [here].

Apologies for this lengthy rant.

Beverly Mann

As for Obama, coherency and specificity, which require actual explanation rather than sound-bite-speak, are just not his thing; I understand that.  By which I mean that I understand that that is so—and by which I don’t mean that I understand why it is so, although I suspect that the culprit is a stunning lack of mental agility coupled with an apparently overriding belief that he need not do anything by way of outreach, education and persuasion, that he doesn’t really feel like doing.

As for Clinton … well … speaking in specifics is not her thing, either.  It doesn’t pay well, and policy specifics would entail her actually learning specifics (better late than never, but, whatever) and maybe even proposing specifics of her own.  Okay, specifics that someone in her quarter-century “orbit” (the media’s euphemism for closed circle of decades-long Clinton operatives) learning specifics.  Sorta like what Warren and Sherrod Brown have done by themselves!

We’re all, of course, tremendously happy for Clinton and her husband that they’re about to become grandparents.  It’s just that we’re interested in other things, as well.  And just that other thing that she’s interested in: ridiculous, cutesy, will-she-or-won’t-she games.

I’m a progressive who cares about more than 1980s-and ‘90s-era women’s issues. (And not just because I’m aware that it is no longer the 1980s or ‘90s; some of those issues remain potent and important, but they are not the end-all-and-be-all of progressive economic concerns, some of which actually have to do with men as well as women.)  I don’t want any more generic, look-at-who-I-am-rather-than-what-I’ve-actually-done theater-of-the-ridiculous. Been there, done that. (Okay, I was never a big fan of Obama, but supported him against Clinton because I feared another triangulator president—one who would be hemmed in by her husband’s 1990s policy choices, no less. One who still is hemmed in by her husband’s 1990s policy choices.)

I’ll end this rant by asking this question: Why have the progressives who want so badly to see a Warren draft not trying to encourage, say, a Sherrod Brown draft?  Wrong gender? Really?? Warren’s popularity comes not from her gender but instead from her economic population and deep knowledge of, emersion in, and passion for actual specific policy issues.  Brown has that, too.  And he, unlike Warren, may simply be waiting for someone to ask him to run.

Take a look, progressives. I’m serious.  It’s time now to support an economic progressive who’s the real deal, not someone’s who really just a political celebrity.  My dream ticket is Brown and Jeff Merkley.  Both have been in the economic-progressive trenches for decades. Neither is the spouse of a former president, even a popular and still-popular one who actually knows how to make a point without using a denegrating, condescending manner to do it.

That said, if what Dems are looking for, and if Dem presidential candidates really are fungible, then, how about Kim Kardashian?  Who knows?  She may even be a genuine economic progressive.

We economic progressives finally have the ear of a large segment of the population.  And we’re going to squander it by nominating for president someone who’s little more than just a professional political celebrity?  Why?  Seriously; why?

—-

UPDATE: Turns out that I’m a few days late to this party, at least as it’s host.  Molly Ball posted a piece on Sept. 19 on The Atlantic’s website titled “Does Hillary Clinton Have Anything to Say?” Ball reaches the same conclusion that I do: The anwer is, no.

But there are, as I noted above, national politicians in addition to Elizabeth Warren, who do.

I mean, look: Just because your husband was a popular president in the 1990s doesn’t mean that you get to be the Democractic presidential nominee yourself.  Your prsumption to the contrary notwithstanding.

Although Molly Ball, Bernie Sanders and I are, thus far, the only partiers. Want to join us?

Updated 9/22 at 4:10 p.m.

Tags: , , , , , , , , , , Comments (10) | |

What are people — and the Post Office — for?

Picture

Guest Post by Mark Jamison retired Postmaster Webster, N.C.

It’s likely that I will be the last postmaster to serve the town of Webster, North Carolina. The first postmaster, Allen Fisher, began his term in 1857, shortly after Jackson County was founded and Webster became the county seat. The names of the postmasters that follow read like a county census. In a rural mountain county that was fairly isolated well into the 20TH Century, the same family names filled many a civic obligation.

Miss Eugenia Allison was the longest serving postmaster, from 1914 until 1948. Mildred Cowan served from 1950 through 1976. When I became postmaster, I found letters Ms. Cowan had written to the old Post Office Department begging for a new building or at least better heat in the shack that served as a post office.

Tags: Comments (2) | |

Guest post: “It’ll be okay: Trust me”, redux

Dan here….The Largest climate march in history is happening today.  Jan Galkowski responds to a Wall Street Journal editorial.   He requested that comments be written at his website in order to consolidate questions and answers.

by Jan Galkowski

“It’ll be okay: Trust me”, redux

Professor Steven Koonin offers up another dollop of vague, specious criticism of climate science in his editorial in The Wall Street Journal. He is credentialed, no doubt authoritative. But compelling arguments for a position should be judged as if the speaker’s identity were unknown and, so, for the most part, I’ll leave it to the reader to find out who Koonin is, or was, by consulting the Wall Street Journal article itself. (Hey, they published it. They deserve a few extra clicks to appease their profit-demanding owners. And, while I respect his career, the editorial he writes is in many ways thoroughly disappointing, not reflecting the deep knowledge no doubt Koonin has. Did the Wall Street Journal get nervous about an earlier, more honest version?) No doubt it is entirely coincidental this op-ed appeared on the weekend the largest climate march to erupt on the planet yet. (Professor Koonin could have published it at any time. But nay.) The actual argument is the latest of a long series of reasons for why climate science should not convert to climate policy.

Let’s see what’s been admitted in this rendition of Tom Petty’s “Yer So Bad” (in reference to climate science).

Early on Koonin admits key points, often opposed by so-called “climate deniers” of the past (*):

  • Climates can change, and they can change very rapidly, sometimes as quickly as a decade.
  • Climates change because there are causes. Koonin glosses “causes” by using the term “influence”. That might reveal his prejudice, but it grants the case. Koonin grants that the “impact today” is comparable to natural climate variability. Koonin leaves completely open what the impact might be in future years. (See the discussion of “lags”below.)
  • The “influence” of carbon dioxide emissions will continue “for several centuries”. I fault Koonin seriously here, because there is plenty of evidence that some of the human generated carbon dioxide will remain in atmosphere for millenia, and that science isvery basic.

Comments (14) | |

Irish austerity exodus lingers on

August brings us the annual Irish immigration data, so it’s time to look at what has happened in their statistical reporting “year” that ended in April 2014. While better than last year, it’s still not pretty.

According to the Central Statistics Office, net emigration continued in 2013-14, with net emigration of 21,400. a decline of just over 1/3 compared to net emigration of 33,100 in 2012-13. Of the new total, once again, the Irish themselves accounted for over 100% of the net departures, with 29,200 more Irish nationals leaving the country than returning.

This continued out-migration continues to diminish any published improvements in Irish employment numbers and unemployment rate. In the year to the second quarter of 2014 (the closest quarter to April 2014 immigration figures), employment  increased to 1,901,600, a rise of 31,600 over a year previous. Unemployment fell by even more, 46,200, in the year to Q2 2014. So, while there is definite improvement even accounting for emigration, Ireland is nowhere near back to its peak 2007 employment figure of about 2.15 million. So employment is still 11.6% below its peak.

In Iceland (create a custom table here), by contrast, despite (but also in part because of of) the almost 50% decline in the value of the kronor, the sharp dip in unemployment has been almost completely erased, with July 2014′s value of 179,000 employed being a mere 1.7% below May 2008′s maximum of 182,100. Indeed, Iceland’s unemployment rate has fallen to a mere 4.4% in July 2014, compared with 6.2% in the United States — and 11.5% in Ireland.

So the lesson, if I have haven’t pounded it into your head enough already, is that Ireland’s austerity measures are not paying off, as it has failed to regain its pre-crisis employment level  and has seen its unemployment rate fall only by reverting to its historical solution of exporting people, as in the 1980s.

Cross-posted from Middle Class Political Economist.

Tags: , , Comments (8) | |

Freedom! Liberty! And Being For the Little Guy. As Brought to You By the Conservative Movement.

Update appended below. (Second indented quote format also corrected.)

—-

In the Comments thread to Dan Crawford’s post below titled “Kalamazoo County Michigan…People and Offices to Write to Protest the Stealing of a Home,” I wrote:

Dan, you don’t understand. This is freedom, see. I mean, it’s not like it’s the FEDERAL government that’s doing this. It’s a local government that is doing it, so how could this be anything other than freedom! liberty!??

A huge part of the Conservative Movement has been to simply shift the funding of government from progressive taxation to exorbitant fines and fees for traffic violations, parking tickets, misdemeanors of other sorts, property forfeitures of large amounts of money or homes or cars, home foreclosures and forfeiture of the entire proceeds from the sale of the home for failure to pay a small property tax bill (including if you didn’t know that it was due or was not paid).

This is all part of freedom! Liberty! The private contractors for government services and operations, and the police and judges whose conflict of interest ensures the more-than-adequacy of this method of government funding, have to be paid, y’know.

In the last two weeks, the Washington Post has run a slew of articles on all this. Links to some of the articles are:

http://www.washingtonpost.com/news/the-watch/wp/2014/09/03/how-st-louis-county-missouri-profits-from-poverty/

http://www.washingtonpost.com/posteverything/wp/2014/09/10/all-i-wanted-was-to-visit-my-dying-father-now-i-owe-massachusetts-10000/

http://www.washingtonpost.com/local/trafficandcommuting/withering-inspector-general-report-criticizes-dc-parking-and-traffic-ticketing/2014/09/08/da6ae324-3781-11e4-8601-97ba88884ffd_story.html

http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/

http://www.washingtonpost.com/sf/investigative/2014/09/08/they-fought-the-law-who-won/

http://www.washingtonpost.com/sf/investigative/2014/09/08/they-fought-the-law-who-won/

In that thread, Dan linked to an Alternet article by David Morris about two Kentucky officeholders, a town mayor and a state senator, cousins both with the last name Girder, who are on opposing sides of the “Government is the problem, not the solution” slogan = policy thing.  The article explains:

On July 19, after years of complaints about local gasoline prices being higher than those in surrounding communities, the city of Somerset decided to take matters into its own hands and began selling gasoline directly to the public. Two-term state senator Chris Girdler immediately declared, “socialism is alive and well in Somerset.” Two-term mayor Eddie Girdler, a distant cousin, responded, “If government doesn’t do it to protect the public, then who does it?”

In an interview, Girdler, paraphrasing Ronald Reagan’s famous dictum insisted, “the government is not the answer—government’s the problem.” Regrettably the interviewer did not remind the readers that government laid the very foundation of Somerset’s economy. In 1950 the Army Corps of Engineers completed construction of one of the largest man-made lakes in the world. A little over 100 miles in length with an average depth of 85 feet, Lake Cumberland “transformed Somerset from a sleepy rural community into one of the largest recreation centers in Kentucky, drawing more than 1.7 million visitors annually.” It would have been instructive to discover whether Sen. Girdler would describe Lake Cumberland as a “socialist enterprise.”

Girdler wants to protect us from big government. Senator Girdler approvingly cites Ronald Reagan’s famous dictum, “You can’t be for big government, big taxes and big bureaucracy and still be for the little guy.” Mayor Girdler wants to protect us from the predations of big giant corporation and he views government as a proper vehicle for doing so. “It’s the role of government to protect us from big business,” he maintains.

So there you have it: You can’t be for big government, big taxes and big bureaucracy and still be for the little guy. Uh-uh. No, Sir.  No way.  The way to be for the little guy is to remove all government protections vis-à-vis private corporations and state and local police forces and courts.  It means privatizing traditional government operations and services, and funding government operations and services (whether already privatized, or instead still directly operated by state, local, or the federal government) entirely by huge, spiraling fines and fees for trivia, and by confiscating cash and homes and cars to resell.

Being for the little guy also means allowing banks to do whatever they please, including making billions of dollars a year in fees for tiny overdrafts—something that the Democratic-controlled House and Senate, and Obama, banned via statute in 2010—and including allowing mortgage companies to misrepresent mortgage terms.  And it means allowing monopolistic credit card companies to charge small businesses outrageous rates for small credit card purchases by their customers.  So in order to be for the little guy, we damn well better repeal the several laws that prohibit these things, enacted by Congress and signed into law by Obama in the two years before the Dems lost control of the House and lost their filibuster-proof majority in the Senate.

Yes, Sir. We’re talkin’ being for the little guy, here!

Being for the little guy also means, of course, removing Big Government—or any government—from direct involvement in, or regulation of, college-student loan programs.  Access to higher education is not an appropriate function of government. I know this for a fact, because this was an official policy of the Reagan administration, expressly stated by a member of Reagan’s cabinet.  Which explains not just the dramatic reduction of reasonable-interest-rate student loans since, y’know, 1981, but also the extreme reduction in direct state and indirect federal funding for state public universities and colleges—since, y’know, 1981.

Uh-huh. The Conservative Movement, and certainly the Conservative Legal Movement, are all about sleight-of-hand redefinitions of common terms, and rely in the extreme on the idea of government-by-slogan, government-by-cliché.

The Koch brothers are little guys.  Who knew?

This continues to work well for them so often, politically, because the Democrats have allowed it to, by failing—refusing—to address it, in particulars, head-on.

To wit: The witless campaign that Alison Lundergan Grimes, the Kentucky Dem nominee for Senate, is running in her effort to dethrone Mitch McConnell. Hey, Ms. Grimes: How’s that I’m-a-tough-Kentucky-woman-so-Kentucky-women-will-vote-for-me campaign goin’ for ya?  Might it now be time to try somethin’ different?  Like, addressing specifics of Dem public policy and recent Dem legislative achievements—and Repub votes on such things?  Nah.  You’re a tough Kentucky woman! So policy won’t matter in the outcome of the election.

Which it won’t, you can be absolutely sure, as long as you don’t deign to mention any of it. Are you really gonna allow election day to come without, like, informing the electorate that, uh, Kynect is—OMG!—Obamacare, and that McConnell has promised to defund it if the Repubs gain control of the Senate?  I mean … really?

This woman’s campaign, more than any other this year, just dismays me.  Then again, I myelf don’t give a damn that she’s a tough Kentucky woman.  (Or, for that matter, that she’s a woman.)  And apparently, either do all that many Kentucky women.  She may well be tough. But tough, it turns out, is not the same thing as gutsy.

I’m so, so, so, so, so, so tired of watching this kind of campaign—this flaccid, craven, I’m-embarrassed-that-I’m-a-Democrat genre—from Democrats.

Especially since IT DOESN’T WORK.  Really; it doesn’t work.

—-

UPDATE:  Well, well. Our newest wingy troller, Jack, wasted only 16 minutes after I posted this post before commenting:

The standard false dichotomy fallacy — if you’re against Big Government, you must be against ALL government.

The Powers of the U.S. government is clearly spelled out in its Constitution, and the States and the people retain the rest. If you say that those who want the U.S. government to not exceed the Powers given to it by the States in the Constitution, want no U.S. government at all, then you must believe that the States, in that Constitution, ceded no Powers at all to the central government.

I, in turn, wasted only 18 minutes—I’m just not as quick as he is; I’m a liberal, after all—before replying:

Ah. That’s right, Jack. The issue isn’t what powers the Constitution–the original document, the Bill of Rights, the succeeding amendments (including the reconstruction amendments) give to the federal government vis-a-vis the states. No, the issue is cliches referencing the enumerated powers, but of course only generically.

I do understand that your brand of constitutional interpretation holds that Freedom! Liberty! means he freedom of state and local governments to violate even the most fundamental of constitutional and human rights of individuals–as long as those rights don’t involve, y’know, gun-ownership rights or one of the other select few rights that you folk hold dear.

I also understand that you and your ilk conflate laisse faire economic and fiscal policy with “the enumerated powers”. You’re Rorschach interpretation of the Constitution is tiresome and ridiculous, albeit widely recited, mantra-like, by the far right.

Ideology is not the same as fact. Nor is it the same as the enumerated powers. Except, that is, when, as now, there is an aggressive hijacking of constitutional law by five members of the Supreme Court and Federalist Society lower-level federal appellate judges.

Enough said?  No. But that’ll have to do, for now.

Tags: , , , , , , , Comments (68) | |

In Praise of Net Social Benefits

 

http://www.organicgardening.com/sites/default/files/Common-Weeds-Large-Crabgrass.jpg

A weed, Crabgrass, taking root.

When someone says, “if we raise the minimum wage, there will be more unemployment.” That may be true, but their fear of unemployment is not wise. It is better to say, “if we raise the minimum wage, will net social benefits be increased?”

When someone says, “if the Fed had gradually raised the Fed rate over the last two years, there would have been more unemployment.” That may be true, but their fear of unemployment is not wise. It is better to say, “if the Fed had gradually raised the Fed rate, would net social benefits have increased?”

Raising the minimum wage will increase net social benefits in the current environment. I refer to this paragraph from Bruce Kaufman, Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate, page 444.

“Minimum wage laws may enhance (social) efficiency in another way as well, by protecting not only workers but also “high road” employers who make long-term investments in human capital, physical capital, and R&D. Research shows that productivity is higher at firms using a high performance work system (HPWS) with self-managed work teams, job security provisions, extensive training, employee involvement methods, and formal dispute resolution programs (Appelbaum, Berg, Kalleberg, Bailey 2000). These kinds of organizational investments are crucial for long-run growth but may be seriously impeded by the instability and hyper short-term competition found in competitive markets. A minimum wage law can protect and encourage new forms of work organization, such as HPWS, by putting a floor under competition so “low road” firms are not able to undercut and drive out high road firms.”

The low Fed rate increases the existence of low road firms, as Bruce Kaufman calls them. The result is that they impede healthy organizational investments for long-run growth. Thus, net social benefits are reduced.

If the Fed had gradually raised the Fed rate over the past two years… very gradually… Firms would have been made more socially accountable and efficient. Some low road firms, would have been weeded out. Even though the banks do not want that to protect their own capital ratios, it would have been better for society.

Moreover, financial repression would not have set down such strong roots into the economy. As it is now, we will probably see the Fed rate sit at the ZLB for years. …

Net social benefits from the economy have fallen due to the low standards of excellence and quality reflected in the low minimum wage and the persistently low Fed rate.

Comments (18) | |

John Boehner Says the Obama Economy Has Eliminated Involuntary Unemployment! Seriously; that’s what he said. The Dems should use this in campaign ads.

John Boehner says that unemployed Americans are pretty clearly malingerers, bums on welfare who have decided that they don’t feel like working:

“This idea that has been born, maybe out of the economy over the last couple years, that you know, I really don’t have to work. I don’t really want to do this. I think I’d rather just sit around. This is a very sick idea for our country,” he said.

“If you wanted something you worked for it,” Boehner said, adding, “Trust me, I did it all.”

John Boehner’s Theory of the Leisure Class, Paul Krugman, NYTimes.com, today

Okay, Krugman goes on to point out that overwhelming economic evidence refutes Boehner’s believe that the actual unemployment rate among people who want a job is zero. And he adds:

[W]hat really gets me here is the fact that people like Boehner are so obviously disconnected from the lived experience of ordinary workers. I mean, I live a pretty rarefied existence, with job security and a nice income and a generally upscale social set — but even so I know a fair number of people who have spent months or years in desperate search of jobs that still aren’t there. How cut off (or oblivious) can someone be who thinks that it’s just because they don’t want to work?

When I see stuff like this, I always think of the opening of The Treasure of the Sierra Madre:

“Anyone who is willing to work and is serious about it will certainly find a job. Only you must not go to the man who tells you this, for he has no job to offer and doesn’t know anyone who knows of a vacancy. This is exactly the reason why he gives you such generous advice, out of brotherly love, and to demonstrate how little he knows the world.”

It certainly is true that this idea that you know, I really don’t have to work–I don’t really want to do this; I think I’d rather just sit around–is a very sick idea for our country.

Which is why Boehner should have used a contraceptive rather than conceiving and giving birth to it.

But now that he has, the Dems should take this baby, remove it from the bath water, dry it off, and feature it in ads letting people know that John Boehner attests to the wild success of Obama economic policy.

The baby, by the way, has been christened Son of the 47%.  His birth father, who wants to work and therefore has a job, loves him very much, can afford to support him, and will fight the Dems for custody.

Tags: , , Comments (20) | |

Agriculture and water in CA

Via the Guardian comes a few words on the drought and markets for, in this case, almonds.  But similar things could be said of other crops.  The ‘subsidized’ cost of getting water to these producers is not reflected in prices, nor is the ‘ownership’ of the water  looked at in a comprehensive manner for sustainability, as basic as re-charging aquifers.

Californian farmers, estimated to grow around 80% of the world’s almonds, have been accused of siphoning off groundwater at the expense of the state’s future water reserves.

As rivers and lakes have dried up, with more than 80% of the state in the grip of “extreme” or “exceptional” drought, the state’s farmers have resorted to pumping groundwater – underground reserves – to nourish almond trees, vineyards and orchards. David Zetland, economics professor at Leiden University College in the Netherlands, says farmers are pumping water at a rate four to five times greater than can be replenished: “The people of the state of California are more or less destroying themselves in order to give cheap almonds to the world.”

Although California produces even more milk and grapes than almonds, the spotlight has turned on the $4.3bn (£2.65bn) almond crop, following a rapid expansion in planting. Almost a million acres of California’s central valleys have been planted with almond trees – a twofold increase since 1996.

Comments (4) | |