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

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 (72) | |

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 (19) | |

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) | |

Kalamazoo County Michigan…People and Offices to Write to Protest the Stealing of a Home

Via Alternet comes this disturbing story.

Deborah Calley told WITI that she paid cash for her dream home in 2010. She had thought that it would make raising two children easier while she was recovering from the traumatic car accident.

But that dream was shattered when she was notified that the county was foreclosing on her home over a missed property tax payment.

Court documents obtained by WITI showed that notices went out about the missed payment, but Calley said that did not see a single one of them. WITI discovered that all but one of those notices were addressed to banks, instead of the homeowner.

Someone at the banks had to know she did not have a mortgage and informed Richland Township Treasurer Marsha Drouinof. The only reason they notify banks is so the county does not do what it just did and leave the bank high and dry.

People and Offices to Write to Protest the Stealing of a Home:

http://www.kalcounty.com/Treasurer/index.htm

http://www.kalcounty.com/contact.php

David Buskirk – Vice Chairman Board of Commissioners
Kalamazoo County Administration Building
201 W. Kalamazoo Ave.
Kalamazoo, MI 49007

David Maturen – Chair (R) Board of Commissioners
Kalamazoo County Administration Building
201 W. Kalamazoo Ave.
Kalamazoo, MI 49007

Timothy A. Snow, CMC (R)
www.kalcounty.com/clerk
CLERK/REGISTER OF DEEDS
Clerk Division
201 W. Kalamazoo Ave.
Kalamazoo, MI 49007

Mary Balkema (R)
mibalk@kalcounty.com
Treasurer
201 W. Kalamazoo Ave., Rm. 104,
Kalamazoo, MI 49007

The County Treasurer would “probably” be the person who boasted of keeping the balance of the $80,000 after back taxes were paid.

Comments (8) | |

Zombie Firms smirk with Fed’s rate decision

Now that the Fed has sent the message that nominal rates will stay at the ZLB for a considerable time after October, let’s revisit the concept of the Zombie firm. The ZLB Fed rate makes it more likely that zombie firms will continue to limp on…

Zombie firms are not good for society. The main reason is that they are very resistant to raising wages, since they must control costs in order to cover their interest expense. They also lack the strength to grow well. They should either die off or be re-structured.

Moreover from (Time to end life support for zombie firms)…

“… they depress economic activity by making it difficult for healthy firms to grow rapidly, increase profits and investment, and create jobs. They also block start-ups with new technologies from entering the market. In a word, they impede the process of creative destruction.”

“As a result, the presence of zombie firms harms the productivity of an industry. If there is a large presence of zombie companies across industrial sectors, the economy as a whole will suffer. So weeding out zombies is essential to make the economy run efficiently.”

“However, this is easier said than done. In the first place, banks have little incentive to kill zombies off. Banks are required to keep their capital ratios high. If they stop providing support to hopeless companies and let them go belly up, they have to set aside more reserves to cover the loans extended to them. This weighs on their balance sheets and lowers their capital ratios.”

When demand is weak in an economy, zombie firms struggle more. But banks are in somewhat of a self-interest trap to maintain accommodative monetary policy to keep zombies alive.

Why do I say that zombies smirk with the Fed’s accommodative policy? Sydney Finkelstein gives us a clue into the attitude of these companies in his article, How to Spot a Zombie Company?

“Many of the executives of failed companies were not only arrogant—they were proud of it.”

Their arrogance is bad for society.

Bottom line: Even if you do not think there are lots of zombie firms in the US, there are zombie firms in Europe and other continents. Raising the Fed rate would have a global impact and go a long way to cleaning out the zombie firms so that the global economy could heal itself properly. However, that process gives worry to the balance sheets of banks and of triggering a recession. So there must be pressure within the banking system to keep the central bank rates low for a “considerable” time in order for society and banks to avoid suffering the hardships of killing zombies off.  Yet we will eventually have to kill them off in order to improve productivity and real wages. Sooner but for sure later the world will have to take its medicine by central banks tightening their rates…

Comments (1) | |

Wisconsin’s Utilities War on Energy Efficient Customers

Having raised a family in Mad City, Wisconsin (a place former governor Dreyfuss called “77 square miles surrounded by reality” and others calling it the Left Coast of Wisconsin, I found the state to be open to new ideas and more so than what is found in other states. Of course things have changed with Governor Walker coming to power which reflects a state and nation regressing back to ideals and practices less tolerant.

We Energies is attempting to piggyback its fossil fuel driven energy generation costs on the back of more efficient and environmentally friendly renewable energy sources. While MG&E (the same as We Energies) has withdrawn its request to increase rates from the Public Service Commission (PSC), WPS remains with WE Energies in the quest to increase rates on energy efficient users and wind/solar power generators to subsidize a flawed 10 year old plan of the utilities and heavy users of fossil fuels. This comes at a time when solar power is finally becoming an affordable technology for many homeowners and businesses and making up 1% of We Energies 2.2 million customers in Wisconsin.

“If granted by the PSC, residential customers would see a 5% increase in their electricity rates next year,” the Journal Sentinel reported. Wisconsin would have the highest electrical utility costs in the Midwest as reported by Midwest Energy News. The impact of this decision could influence other utilities to raise rates on energy efficient users and solar/wind generators in other states.

In a billing message sent to many of its customers across the state, We Energies explained the rationale for the increases; “claiming it is making use of the power grid ‘fair’ for all of its customers even though those customers with renewable energy use less of the grid than those without solar or wind power.” We Energies claims more efficient customers not using the grid is leaving more cost to be borne by those who are not as efficient. Hmmmm? Saving energy by being more efficient or generating renewable energy should cost more? Why? The plan:

• We Energies wants to impose an additional monthly charge on distributed energy installations going from $9/month to $16/month for an average homeowner and with customers having renewable energy sources paying more.

• We Energies wishes to change the net metering terms making it less beneficial to the homeowner solar power provider to We Energies during peak power times.

• While third party ownership is illegal in Wisconsin, We Energies also seeks to prohibit third party leasing of solar installations to homeowners.

The reasoning: “The cost due to being more efficient and using the grid less should not be shifted to others for the use of the grid,” We Energies Brian Manthey said.

Huh? As pointed out in the Express Milwaukee article We Energies’ War on Its Solar Customers the result is a substantial increase for those users who use the grid rarely or less than major users due to energy efficiencies or their own renewable energy sources. In the end, the more efficient users are subsidizing the heavy users of fossil fuels due to We Energies poor strategy developed 10 years previous. It is a bill increase for smaller and more efficient users. So, we have made the big circle and are back at the beginning. If you are efficient, can sustain yourself with renewable energy most of the time, and can kick-in to WE Energies needs during Peak Energy Need Times; it does not matter and in fact you are going to pay more than if you are 100% dependent on WE Energies for power.

Sounds a little bit like Peabody Coal . . .

Notes and References:

We Energies’ War on Its Solar Customers

Advocates: Wisconsin solar fight could spill into other states

Tags: Comments (11) | |