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

Another day, another indication that the Clinton campaign remains dangerously clueless about what will matter most in the general election. Ho-hum.

Clinton’s aides say they have settled on the big story they want to tell about Trump: He is a business fraud who has cheated working people for his own gain, and his ideas, temperament and moves to marginalize people by race, gender and creed make him simply unacceptable as commander in chief.

Clinton thinks she knows how to take on Trump. Will it work?, Philip Rucker, Washington Post, today

I’m assuming that Clinton’s aides have considered also pointing out that, on policy proposal after policy proposal after policy proposal, Trump has now adopted an extreme version of the Paul Ryan supply-side fiscal-policy as stated in the Ryan budget plans, including the current one that passed the House.  I’m assuming they’ve considered illustrating that Trump, rather than having coopted the Republican Party and its elite-dictated establishment policies, has been cooped by the elite, the establishment as their puppet.

Romney promised to reduce upper-income taxes only by 20% initially, with a promise to cut further later and then cut some more after that.  (See, e.g., Romney’s speech to the Detroit Economic Club shortly before the 2012 Michigan primary.)  Trump ups Romney’s ante.

But, I assume, since the above quote implies it, that Clinton’s aides have rejected mentioning any of this.  And—just an educated guess here—that that is because they will be saying instead that Trump’s ideas, temperament and moves to marginalize people by race, gender and creed make him simply unacceptable as commander in chief.

This should suffice, because, I mean, don’t identity politics always suffice?  And because these messages are mutually exclusive.  You can’t argue identity politics and fiscal policy; you have to choose one or the other—and the power of identity politics trumps elite-establishment-dictated fiscal policy whose very purpose is to dramatically increase wealth and income inequality and of course consequently political power that will be used to further increase wealth and income inequality.

Always.  Even when the driving themes of the election cycle are anti-elitism, anti-establishment, anti-wealth inequality and anti-donor-and lobbyist-dictated government policy.

Which I guess explains why the very first thing Clinton did after winning all those northeastern primaries earlier this month and virtually ensuring her the nomination—literally, the very first thing she did, beginning the very next day—was to phone some of Jeb Bush’s donors and ask them for donations.

Just sayin’.

Clinton continues to run a really awful campaign.  And I’m betting that that’s not entirely her top campaign staff’s fault.  They do play a role in this, obviously; not the sole role, though.

Not the sole role, though.

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I Confess, Graunt Didn’t Invent Economics…

Aristotle did. As Philip Kreager reminded me:

Historians of economics have for some time treated his [Aristotle’s] writings as formative, even though relevant passages in the Politics and Ethics amount to only a few pages.

Wait. There’s more:

In the Politics, however, population is a recurring topic, extensively discussed and integral to the overall argument. “The first part of a state’s equipment,” Aristotle says, “is a body of men, and we must consider both how many they ought to be and with what natural qualities,”

The almost obsessive focus on proportionality I noted in Graunt and Locke is no proof of Graunt’s influence on Locke. The proportional view was central to Aristotle’s Politics and everybody in early modern humanism “up to and including Adam Smith” was doing Aristotle. You didn’t have to read Aristotle. The commentaries on Aristotle were ubiquitous. For Aristotle,

The logic of proportional versus numerical relationships also describes the economy of the household in relation to its size, and this in turn shapes the wider demography of constituent groups. Oikos, the household, is the root of oikonomia, the art of household management, from which we derive the modern term “economics.”

What Graunt did contribute was a brilliant synthesis of humanist Aristotelianism with the techniques of merchant bookkeeping.

Graunt’s work brilliantly synthesized humanist methods of natural history and rhetorical communication that were basic to Aristotelianism with techniques of merchant bookkeeping in which population totals are treated as open or relative accounting balances, rather than closed aggregates; his method arose as a direct response to the need to calculate balances in the body politic.

So no, Graunt didn’t invent economics. He did invent the science of population statistics, though, and thus laid the foundation for modern social sciences. As for Graunt’s contribution relative to Petty’s, Walter Wilcox aptly summed up my own impression, “To the trained reader Graunt writes statistical music; Petty is like a child playing with a new musical toy which occasionally yields a bit of harmony.”

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Liberal GMO phobia

It is sometimes argued that Conservatives and Republicans are anti science. There is often a quest for Ballance (or a so’s your mother reply from conservatives). I recall reading about liberal anti vaxxers (sorry I don’t recall actual URLs). Chris Mooney noted that there is no detectable association of vaccine phobia with partizanship or ideology.

I thought there might be an association with GMO phobia. This is my second google search. The second hit is this Razib Khan post at discovermagazine.com

which includes this figure based on data from the General Social Survey which I fairuse

gmo

That’s 2 minutes of googling (plus some more minutes to post here).

I conclude that both defensive conservatives and knee jerk ballanced centrists don’t care enough about evidence to spend 5 minutes checking a claim before writing it. But I would conclude that wouldn’t I ?

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Irritating text messages I get on my cell phone

No wait don’t go bear with me. The irritating messages have headers such as

3399949424
@EricTrump: Really p

3399940424
@realDonaldTrump

and

3399940424
@realDonaldTrump

So how do Eric and Donald Trump (who appear to be so poor that they are sharing a cell phone) know that an Italian resident TIM customer is a US citizen who could vote for @realDonalTrump (in a run off against Abu Bakr Al Baghdadi or when hell freezes over whichever comes first)?

I don’t recall telling either mr Trump my phone number. I did have to show ID to get it (Italy doesn’t want untraceable burner phones). All my IDs indicate my place of birth. TIM isn’t supposed to share this information (for example by selling it to Trump2016).

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SEC capture…

Yves Smith at NC:

The SEC showed its true colors yet again at a panel at Stanford Law School at the end of March, although not as dramatically as last year. In last spring’s SEC panel at Stanford, the then head of examinations, Andrew Bowden, made such fawning remarks about private equity, including repeatedly saying he’d really like his son to work in the industry, that he resigned three weeks after we publicized the segment. Nevertheless, this conference was another demonstration of depth of regulatory capture at the agency.

As before, the real action came in when the audience members asked questions. They were all fielded by Andrew Ceresney, a former Debevoise & Plympton partner, now head of enforcement. We’re going to look at two questions in succession.

____

ADDENDUM: Beverly Mann here: This New Yorker article from last month is an absolute must-read.  After I read this post and Yves’ full post yesterday, I tried to find this article and link to it but couldn’t remember where it was published or any of the specific names in it.  But, by chance, I just came across it.

It’s just breathtaking.

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“A certain proportion of work to be done”: How John Graunt invented economics

John Graunt’s Natural and Political Observations on the Bills of Mortality (1662) is acknowledged as the inaugural text of “political arithmetick.” Graunt is ranked along with William Petty, Charles Davenant and Gregory King as a major pioneer of “the art of reasoning by figures, upon things relating to government.”

In their Outline of the History of Economic Thought, Screpanti and Zamagni, however, describe Graunt as a “follower” of Petty. In books and articles on history of economic thought, Petty is mentioned ten times as often as Graunt (JSTOR, Google Scholar). Graunt is more frequently thought of as a pioneer of population studies and vital statistics. Regarding that latter capacity, Philip Kreager has written extensively and wonderfully on Graunt’s truly innovative methodology.

It is convenient at this point to recall that to produce, to consume and to trade are actions first, as are supply, demand, value and price – before they can be treated as things and aggregated. People perform those actions and they do them in proportion to their numbers, abilities and appetites.

Proportion, by the way, is central to Graunt’s methodology. Did I mention the word appears no fewer than 68 times in Graunt’s Observations? Kreager’s article, “New Light on Graunt” contains 48 occurrences of the word. The methodological significance of this word for Graunt cannot be overstated. I am therefore quoting in full Kreager’s explanation of the analytical role of proportional checks in bookkeeping and Graunt’s Observations:

A population, like a commercial enterprise, must achieve at least an equilibrium of income and expenditure over time, if it is to survive. Graunt noticed that the bills, like a merchant’s day-book, provided a continuous record of additions and subtractions in a constantly changing numerical whole. The diversity of transactions in people and trade, however, make such a simple running account difficult to interpret. The ‘method of double-entry’ bookkeeping, widely promoted in Graunt’s time, claimed to provide a solution to this problem by revealing the inherent order and regularity of trade. The procedure may be summarized as follows. On the basis of his daily journal of transactions, a merchant was supposed to classify and tabulate every entry according to a few major types of account. Successive transactions pertaining to an account were then entered twice in a ledger, in parallel columns, one entry showing the changing balance of debt, and the other of credit. The comparison or proportion of the two columns relative to starting and subsequent balances provided the merchant with an immediate evaluation of the current and past status of the account, relative to others. This made it possible to spot accounting errors, to isolate losses, and to distinguish real profits from diverse fluctuations in income.

Therefore, when Graunt wrote, “…if there be but a certain proportion of work to be done; and that the same be already done by the not-Beggars; then to employ the Beggars about it, will but transfer the want from one hand to another…” it is virtually certain that he was not referring to a “fixed amount” of work. Instead he was referring to a regularity. Change happens but disproportionate change may be cause for concern.

It is difficult to think of a economically-significant fact that doesn’t involve “a certain proportion” of something to something else. GDP per capita gauges a certain proportion between economic output and population. Productivity measures a certain proportion between economic output and hours of work. Economic growth reflects a certain proportion between one year’s output and the next’s. The unemployment rate considers a certain proportion between the labor force and the number of people who are looking for work. It is certain proportions all the way down.

Compare, though, Dorning Rasbotham’s lament, 118 years after Graunt, about people who say there is a “certain quantity” of labor to be performed:

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Cash for Criminals

by  Mike Kimel

Here’s a CNN story on “Cash for Criminals”:

And so Operation Peacemaker was born. Loosely based on an academic fellowship, the ONS program invites some of the most hardened youth into the fold: often teenage boys suspected of violent crimes but whom authorities don’t have enough evidence to charge criminally.

These fellows must pledge to put their guns away for a more peaceful life. They are hooked up with mentors — the reformed criminals-turned-city workers — who offer advice, guidance and support to get jobs. If the fellows show good behavior after six months, they can earn a stipend of up to $1,000 a month.
Since the fellowship started, the city has seen dramatic results, including a low of 11 gun homicides in 2014 — the fewest number of people killed in Richmond in four decades.

The program has caught the attention of cities hoping to model programs with similar success, from Sacramento, California, to Toledo, Ohio, to Washington.

Later in the article:

Boggan believes the vast majority of youth in rough inner-city neighborhoods are inherently good and need to be exposed to new opportunities. With ex-felons as his change agents, he says, the teens are more likely to respond.

“That translates into trust on the street,” Boggan says. “And trust is a major commodity with what we do.”

At one point, he employed seven full-time mentors, but cutbacks reduced his staff to four full-time and two part-time mentors.

2015 saw gun homicides nearly double to 21, from the low of 11 in 2014. Boggan says staffing cuts may have played a role. “Less people touched, and the people touched are not being touched as often,” he says. “That’s certainly an impact.”

If I was designing programs to convert as many Democrats as possible into Republicans, I imagine something like this would come in near the top of my list. About the only changes I would recommend would be to run this program more broadly, and to increase the size of the stipends.

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Child Labor Defended by the Left

by Peter Dorman (from Econospeak)

Child Labor Defended by the Left

Well, some of the left, but they probably represent the main currents of progressive thought among intellectuals.  Those who not part of the charmed circle of researchers, activists and policy-makers in the realm of child labor may not know that a storm has been whipped up over regulation of children’s work.  A number of academics and heads of NGOs have stepped forward to say that lots of child labor is OK, and the blanket condemnation of it is oppressive.  They want to scrap international agreements that set restrictions on the employment of children, and they support efforts at the national level to repeal child labor regulations.

The flashpoint is Bolivia, where the laws were rewritten to allow children as young as 10 to work alongside their parents and to enter formal employment at 12.  “To eliminate work for boys and girls would be like eliminating people’s social conscience,” says Bolivia’s president, Evo Morales.  This was the culmination of a campaign led by UNATsBO, an organization representing Bolivian working children, led by children with advice from adults.  One of their adult advisors is Manfred Liebel, a German political scientist.  His writings combine familiar radical tropes with passionate belief in the virtue of child labor.

Here are a couple of representative snippets from one of his articles dating from 2003, the year that UNATSBO was founded:

[Working children’s organizations are] questioning traditional age hierarchies and establishing new, more egalitarian relationships between the generations.  But they also personify a massive criticism of different aspects of the western bourgeois way of thinking and behaviour and pave the way for an understanding of the subject until now unknown or unaccepted in the western world.

In accordance with other social movements of repressed and excluded population groups in the South, the working children’s organizations reclaim and practise a subject-understanding and a subject-existence based on human dignity and the respect for human life.  (p. 273)

The subject-understanding and the subject-praxis of the working children’s organizations also go beyond the modern western understanding ofchildhood. According to this understanding, the children are indeed granted a certain autonomy and given protection from risks, but these concessions happen at the cost of an active and responsible role for the children in society. The children are practically excluded from adult life and assigned to special reservations in which they are ‘raised’, ‘educated’ and prepared for the future. Their possible influence on this future is confined to the individual ‘qualification’ of each person, yet not to decisions about the arrangement of social relationships. These remain reserved for the adults or the power elite. (p. 274)

Well, you get the idea.  The attempt to eliminate child labor denies the essential humanity of children.  It wants to impose a capitalist conception of their role in society which prioritizes their future productivity at the expense of what they can do in the present.  It is hierarchical and expresses a colonial, eurocentric mindset.

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You Grow the Pie?

by Sandwichman

The New York Times recycles boilerplate nonsense:

YOUR MONEY: Disproving Beliefs About the Economy and Aging.

The notion that the job market is a zero sum game — more jobs for one group translates into fewer jobs for another group — is deeply ingrained. Economists call the belief that there are only so many jobs in an economy the “lump of labor fallacy.”

But the truth is that growth in the number of jobs for older people tends to run in parallel with gains for younger workers. “There isn’t a fixed number of jobs,” Ms. Carstensen said. “You grow the pie.”

When I see a pie growing, I toss it in the compost.

Where to begin? “The notion… is deeply ingrained.” Deeply ingrained in WHAT? WHOthinks this notion, aside from Ms. Carstensen, Christopher Farrell and other disciples of unidentified “economists” who call this believerless belief the “lump of labor fallacy”?

The old zero sum game gambit AGAIN? Oh come on. Haven’t the boilerplate recyclers heard of prisoner’s dilemma yet?

Commenter Thornton Hall adds: People talk about the “corporate” media, but that’s not the problem. The problem is objectivity and professionalism. Bullshit about lump of labor seems related to “the production of innocence” discussed here; “Political Coverage is Broken.”

crossposted with econospeak

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