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

Black Mirror Big Data Becomes Big Brother In China

Black Mirror Big Data Becomes Big Brother In China

And maybe coming soon to the US as well, enough to make Orwell sit up and take notice.

The first show of the 2016 season of the sci fi TV show, “Black Mirror,” called “Nosedive,” showed a future society where people have overall social scores (1-5) that are constantly being changed based on what they do and who they interact with and how.  Access to many things is based on one’s rating.  The female lead has a middling score and wants to raise it by attending wedding of friend with higher rating,  Her efforts to do so lead her to do things that make her rating fall, which then leads it to nosedive as others downrate her and dump her,with her ending up in prison.  While not quite that far gone, a system like this seems to be emerging in China, including the phenomenon of people dumping others whose social rating is falling, thus putting them into such a nosedive.  However, the scores are 350-950, resembling FICO financial ratings used initially by mortgage lenders in the US.

The emerging system is described in a recent Wired article by Mara Hvistendahl (probably Norwegian or Danish) who is currently living in China and has a low rating she has been trying to raise as she is shut out of buying various things due to it,  I suspect part of her low rating is because she is a foreigner, which she never mentions as a possible reason, but her description of how the system works and is being developed jointly by the Chinese government in conjunction with Alibaba through its Alipay system, particularly its Zhima “credit scoring system.”  It was initially a commercial system based on what people buy, but using big data goes much further to rate more broadly how people behave and with whom.  Thus a journalist who reported on corruption now has a low rating and cannot do many things.  Tyler Cowen has a link to this in his assorted links for Tuesday the 19th on Marginal Revolution, but I am having trouble linking either to either. (Dan here…fixed link)

Curiously in yesterday’s “China Watch,” a pro-Chinese government monthly newspaper that comes with the Washington Post, bragged about parts of this system in two articles.  One entitled “Alibaba credit scorer looks past deposits” reports on how its advanced “risk control” system is bringing in insurance companies  to help businesses avoid not getting paid.  The other, “Recruiters Switch On To Social Media,” reports how businesses search for possible employees by looking at their social networks on social media..  The benefits to those who might gain are stressed, but no possible downsides or criticism are mentioned.

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The 2021 Omnibus Repealer and Clawback Act

The 2021 Omnibus Repealer and Clawback Act

A saving grace of 2017 — up until now — is that Trump and the GOP have been the Keystone Kops of Kleptocracy, consistently faceplanting in attempts at regressive domestic legislation.

With the passage of the GOP tax bill, that all changes. Not only is it a massive giveaway to the corporations and the wealthy who least need assistance, it actually raises taxes over time over many if not most lower and middle class households. It also sends Obamacare into a death spiral by kicking out the individual mandate, ensuring that the pool of insureds gets sicker and sicker. Meanwhile, the hostage-taking of innocent children via the termination of SCHIP and DACA continues.

To top it off, already I am already reading bits from erstwhile young liberals like Matt Yglesias (with whom I generally agree) and Ezra “the only thing separating him from David Broder is six feet of dirt” Klein to the effect that the Democrats will only be able nibble around the edges of the corporate tax cuts when they next return to power.

Nonsense.

I want to give you one little ray of sunshine: all of this can be undone, and it can be undone in one fell swoop. The very fist thing I expect, indeed demand, from the next Democratic Congress and President, is The 2021 Omnibus Repealer and Clawback Act, to en masse repeal all Acts and regulations which will have taken effect since January 20, 2017. It should be passed via discharge petition in the House (to prevent it from getting tied up in committees) and via nuking what is left of the filibuster in the Senate if necessary — although the parts that reverse what the GOP is passing via reconciliation should presumably be possible with 51 votes anyway.

Further, there is nothing preventing a complete clawback of all of the tax revenue lost via this bill. The prohibition against Ex Post Facto laws only applies to criminal acts. Taxes can be and have been made retroactive.

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Do GOP House and Senate reps even know what they voted for?

Do GOP House and Senate reps even know what they voted for?

The House passed the awful “tax complication bill of 2017” on Tuesday.  The Senate had to make a few changes because it didn’t comply with the Byrd rules, and then will presumably pass it today. It’ll go back to the House where the HOuse will then take the final vote on the Senate changes and send it to Mr. Trump for signature.

The GOP will claim that they have singlehandedly put together a marvelous tax cut package for the middle class.  That is a pack of lies.

The tax cut package redistributes upwards–it is a marvelous cut for the wealthy (the estate tax reductions costing about $200 billion over ten years, the corporate tax reductions (including increased incentives for offshoring while lowering the top corporate tax statutory rate (higher than most corporations ever paid) to 21% from 35%, the lowering of the top individual rate from 39.6% to 37%, and a 20% “deduction” from taxable income for “qualified business income” for owners of businesses (whereas workers with the same earned income don’t get that nice little subsidy, based, it appears, on Mitt Romney’s keen disregard for the large group of American workers and working poor that he labelled “takers” compared to the regard he had for the wealthy capitalists, who he labelled “makers”, etc.).  It is a piddling cut for most non-wealthy individual Americans, especially those who live in “blue” states and already contribute more tax money to the federal government that is transferred to “red” states.  And the corporate tax cuts are permanent while the individual tax cuts go away at various times over the next decade.

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The Missing Piece in Plans for an All-Electric Vehicle Fleet: Electricity

The Missing Piece in Plans for an All-Electric Vehicle Fleet: Electricity

The New York Times has a piece today on barriers to the replacement of internal combustion-powered vehicles to an all-electric fleet in the United States.  It talks about production costs, the availability of key minerals and the need for a charging station infrastructure, but it oddly passes over the most obvious impediment, at least from the perspective of climate change, the large increase it would require in electrical generating capacity.

If the goal is, at it should be, rapid decarbonization of the economy, conversion to electric powertrains is worth doing only if it results in the replacement of petroleum by renewable energy sources, so lets look at the arithmetic.

According to the latest version of Lawrence Livermore’s invaluable energy spaghetti diagram, 25.7 quads of energy, in the form of petroleum, were used as inputs to the transportation sector.  (A quad is a quadrillion BTUs, approximately the amount of energy in eight billions gallons of gasoline.)  Electric vehicles vary in their efficiency, and there might be improvements on this front in the future, but lets use the common assumption that EV’s are four times as energy efficient as ICV’s; that means we are looking at about 6.4 quads of added electrical demand.

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From Employer Coverage to Single Payer Health Insurance

From Employer Coverage to Single Payer Health Insurance

This holiday season I’ve heard several tales of woe from working class acquaintances, mostly self-employed, about Obamacare: how they are just above the subsidy cutoff and would rather pay the fine than buy expensive individual policies, or how they are just below and can’t afford to put in more hours per week. I can understand why there is a lot of disappointment with the Democrats.

So what about single payer? Along with free public higher ed, it’s supposed to be the leitmotif of the resurgence of the left, with even moderate politicians signing on, or claiming to, to save their skins. And I’m all for it too.

But a big political obstacle is widespread employer-based health coverage, a benefit that would disappear under a universal system. As a public employee, I have coverage of this sort myself, and it’s a big part of my overall compensation. How do we fold the millions with adequate-to-good health plans into a new system financed through taxes?

I have an idea. As single payer goes into effect, require every employer to publicly report how much it pays in the form of contributions to employee health insurance, documented by its payment record over the past twelve months. The health care law would then mandate that this sum be returned as added wage payments to employees for some transitional period (such as six months) or the term of the employment contract, whichever is greater. Ideally the law would specify a reasonably progressive apportionment of this payment across the workforce, such as equal lump sums. At the end of the transition, wages increases and decreases would fall under the same employment law rules, such as they are, as before.

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Corporatizatizing The All-Administrative University

Corporatizatizing The All-Administrative University

One of the few good things that appears to have happened in the conference committee on the generally awful impending GOP tax bill is that the hits students were going to take have been eliminated.  However, even without that additional burden, college students face costs that are far higher than any other nation and have been rising above inflation rates for decades.  While` students in Denmark actually get paid, costs are closing on $70,000 per year at the most expensive US institutions, with public schools having costs rising more rapidly than in the privates over the last decade, as states have cut public support in the wake of the revenue shortfalls that came with the Great Recession.  This is not likely to be reversed in many states as favorable views of universities among Republicans have fallen from nearly 60% to about 30% (with little change among Dems, still between 55 and 60%).

I would like to focus on a long-running trend that has been known for some time but somehow keeps disappearing from view.  This trend was best presented in the ever more relevant 2011 book by Johns Hopkins poli sci prof, Benjamin Ginsberg, The Fall of the Faculty: The Rise of the All-Administrative University and Why it Matters.  This rise of an all-powerful professional administration is tied to a corporatization of American academia.  From 1975 to 2005 while student populations rose 56%, faculty increased by 51%, administrators rose 85%, and their professional staffs rose 240%.  Around 2005 the total numbers of admins and staff surpassed that of faculty, with that trend simply continuing.  Admin salaries have risen faster than the other categories. On top of that, even as faculty numbers and salaries have not kept pace, there has also  been the weakening of status and pay arising  from the ongoing steady shift from tenure track faculty to temporary adjuncts who have risen   from 22% of faculty in 1970 to about 50% in 2017.

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Tipping Point

Via the Economic Policy Intstitute:

The Department of Labor (DOL) released a proposed rule that would allow restaurants to take the tips that servers earn and share them with untipped employees such as cooks and dishwashers.1 But, crucially, the rule doesn’t actually require that employers distribute “pooled” tips to workers. Under the administration’s proposed rule, as long as tipped workers earn minimum wage, employers could legally pocket those tips.

Evidence shows that even now, when employers are prohibited from pocketing tips, many still do. Research on workers in three large U.S. cities (Chicago, Los Angeles, and New York) finds that 12 percent of tipped workers had tips stolen by their employer or supervisor.2 Further, recent research shows that workers in restaurants and bars are much more likely to suffer minimum wage violations—meaning that they receive less than the applicable minimum wage—than workers in other industries. For tipped workers, some of these minimum wage violations occur when an employer confiscates tips.3

“The proposed rule rescinds those portions of the 2011 regulations that restrict employer use of customer tips when the employer pays at least the full Federal minimum wage.”5 It is thus deeply unusual that DOL did not provide a quantitative estimate of the amount of tips that will be transferred from workers to employers under the proposed rule, given that they are required to do so by law.

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Fake news

This chart caught my fancy after reading the interview with Rep. Tom Cole from the previous post. There is still the tendency to see the stock market (or GDP) as a proxy for the economy. And it is a time honored tradition for politicians to claim credit for economic gain in convoluted story telling:


(I could not find the attribution for this graph but will add when I find it)

Trump bump versus Obama effect on the stock market for the first nine months in office of each president. See also Tax cut plan economics

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