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

You Can Fool Most of the People Most of the Time

At least on certain issues.

I’m not inherently a great pessimist, but with few exceptions each passing month for over a decade now has seen my optimism whither, at least a little.  So I can’t help but see the manure-colored lining in this otherwise rosy, fluffy cloud.

Steve Benen reports that according to the new NBC/WSJ poll, Americans trust Democrats more than Republicans on domestic issues, sometimes by large margins.  Here is a graph.  (As always, click to embiggen.)

Graph 1   Who Do You Trust?

But the causes of my pessimism are four-fold.  First, as Benen goes on to note, the same polling reveals that in the popular mind “Republicans have an advantage on the (sic) reducing the deficit, ‘controlling’ government spending, and national defense.”  Well, there’s three reasons for pessimism right there.  A) Reducing the deficit is an issue of exactly zero urgency, and attacking it now will certainly cause economic hardship, especially for those at the bottom. Further, Republicans have been huge debt increasers for decades, while Dems have not.  B) We absolutely do not have a spending problem.  We absolutely do have a revenue problem, as graph 2 plainly indicates.  I think the Republicans have become convinced of their own lies.

Graph 2   Federal Gov Current Recpts by GDP

C) From FDR through LBJ to BHO, Dems have been every bit as war-mongerish as their Rep counterparts; BHO has continued his predecessors war initiatives almost seamlessly;  and 9/11 happened on W’s watch.  This just makes me want to cry.

But I have a bigger list.  Second, a look a graph 1 reveals some disturbing details.  A)  Joe BeerCan must not connect “Looking out for the middle class,” Medicare,” “Health Care,” “Medicare,’ or “Social Security” with “Economy” or the results for those categories would line up better.  B) Considering Paul Ryan and the never-ending series of Republican contrived cliffs, scoring Dems only marginally better than Repubs on the economy is, all by itself, cause for despair.  C) As is the close call on taxes.

Third, and I’ve already alluded to this, there is almost no daylight between the two parties on foreign policy issues.  Still I have to give a slight nod to the Dems, based on practicality, because: John Bolton.

And last, though I firmly believe to the bottom of my heart that the Dems are superior on absolutely every issue, problem and question that might rise, they still aren’t that damned good.  Case in point: the new head of the Michigan Democratic party is a venture capitalist.  As Bill Maher sagely put it, while the Democrats have moved to the right, the Republicans have moved to the insane asylum.  They demonstrate this anew, almost every single day

The lessons of history and even a casual observation of the current failures of European austerity show that progressive policies are the clear and present necessity.  But even if we had strong Dem majorities, we still have Reaganite B. Hoover Obama in the White House, and a genuine progressive movement in congress the exact size and shape of Bernie Sanders. 

As one of my college professors put it long ago:  Booze is the only answer.

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The rest of the dinner table deficit/debt discussion: Equity

I promise, there are numbers here, but lets have some fun first and write a screen play to set up the point. It is long, but…

 
“Dear, I’m getting nervous. We seem to keep adding to how much money we owe and our income hasn’t changed for the better. What can we do?”
 
At this point of the conversation, the conservative ideology (Republican and Democratic Parties) suggests and encourages you to believe that the answer is something like: “Well Honey, as I look over the horizon I see no possibility for improving our current position. The only thing we can do is cut back on our spending. We have to stop spending on anything we don’t need to live. If we are willing to sacrifice then eventually we’ll have savings that we can then use to invest such that we have more income.”
 
Now, for most Americans at this moment in the euphemistically labeled “business cycle” Honey’s response would be: “But I don’t know where else we can cut!” Of course to the conservative there is always something that money is being spent on that is in actuality an indulgence for which one should repent and thus cut from their spending if said spending is greater than one’s income. This is true because no righteous individual would ever let the devil of consumption tempt them from the path to wealth heaven. Redeem one’s self through the power of restraint of consumption urges.

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Politics and specific policies

by Robert Waldmann

At Frum forum Justin Green extensively quotes Jeb Golonkin on how conservatism could be much better if conservatives made specific policy proposals.  Sad but true, almost all of the proposals that have been signed into law are by Barack Obama.  This is not a rare event.  While many conservatives stick to slogans, some try to come up with constructive alternatives to the stimulus (ARRA) and Obamacare (PPACA).  I don’t remember where to link but the phenomenon of “Obamacare is horrible and we should replace it with Obamacare” is quite common.

Golonkin’s proposals are in bold, and then another of my comments follows. Recall that the PPACA is Obamacare and the ARRA is the stimulus bill.

Golonkin’s problem is that Obama has been there and done that.  Golonkin’s innovative conservative proposals are mostly existing liberal policies.

Golonkin:  Somewhere along the way, we conservatives stopped innovating and stopped explaining, preferring instead to fall back to “small government is better.” Well, maybe it is and maybe it is not. But the notion that government is always useless simply does not ring true in a world where people look to the government to provide Medicare, a national defense, FEMA relief, and public education. This being the case, we would do well to start probing for specific policy solutions that affect people in concrete ways. What is the government doing that is hurting small businesses today? What is the government not doing that it could be that could help small businesses?


It is not now organizing health insurance exchanges to remove big businesses advantage in insuring employees, because big business work forces are automatically large pools of policy holders helping big but not small businesses interacting with health insurers avoid the adverse selection death spiral.  It would also be nice, above and beyond the call of eliminating a market failure, to offer them subsidies.  See ‘healthcare fiasco’.

Golonkin: What about student debt? 

How about ceasing to pay banks huge amounts of money to handle simple paper work and divide the savings between reducing the federal deficit and reducing the amount students have to pay on their debt.  See ‘healthcare fiasco’

Golonkin: Can we use student loan forgiveness as a way to incentivize bright young people to enter particular fields? We need more primary care physicians if we are going to make this healthcare fiasco work. No one wants to be a primary care physician because primary care physicians get paid less than specialists, which makes it harder for them to pay off their medical school debts. But could we change the way the government reimburses primary care? And couldn’t we partially forgive student loans if borrowers agree to enter into primary care in particular markets for a certain number of years?

See ‘healthcare fiasco’ and click http://bit.ly/Y6ObIP (warning a *.doc will download)
So far all of the bright innovating conservative ideas are provisions of the ‘healthcare fiasco’.  Some are not current policy because they are scheduled to start in January 2014, but mr ‘specifics specifics specifics’ didn’t let that little detail prevent him from arguing that a bill which is largely not yet being applied and of which he demonstrates astonishing ignorance is a ‘fiasco’. 

Golonkin:  What about tax policy: why are we not on the cutting edge of hyper-targeted tax cuts that we can show, with numbers, turbocharge the economy? A wish is not a plan.  Wishing that conservatives can show, with numbers, that there are tax cuts that turbocharge the economy doesn’t make it possible.  There are many conservative academic economists who have looked very hard for proof that some sort of tax cuts turbocharge the economy.  They haven’t shown this, because it is not true.  yes many conservatives consider numbers foreign alien and un-American (especially arabic numbers).  However there are also conservatives who love numbers and are statistical and mathematical geniuses.  The reason they haven’t shown with numbers how wonderful tax cuts can be is that it is impossible to show something false with numbers.  The high respect of ‘numbers’ is for their power as tools for convincing people. 

Golonkin doesn’t need to look at any numbers to be sure it is possible to show with numbers that some tax cuts are great.  This is not the way anyone who knows what data are talks about it.  Conservatives, including Golonkin, have the very serious problem of thinking they know the answer before looking at the evidence.
Also I fear that Golonkin believes his hyper targeted tax cut proposal is pro market.  It is, in fact, based on his conviction that policy makers (provided they are conservative) can guess better than the market and wisely subsidize particular activities. The pro market position is that tax rates should not be targeted but rather that the playing field should be level.

Golonkin:  Why are we not demanding that the government rebuild our cratering infrastructure rather than using taxpayer dollars to invest in projects it hopes will succeed (Solyndra)?

Yes how about spending more on infrastructure ?  Nothing like the ARRA but spending on infrastructure.  How did Golonkin manage to avoid the phrase ‘shovel ready’ ?  He is now calling for the ARRA.  Also he doesn’t recognize that hyper targeted tax cuts are using taxpayer dollars to invest in etc.  It doesn’t matter if the money is called a tax cut or a subsidy or even the market value of a CDS (loan guarantee) as in the case of Solyndra.  The policy he advocates and the policy he mocks are implementations of the exact same reasoning.

Golonkin:  Why are we not pushing pay for performance in the healthcare system AND in our education system?

Pay for performance in the healthcare system.  See ‘healthcare fiasco’ and click
http://www.lifehealthpro.com/2011/04/29/ppaca-hhs-starts-medicare-performance-payment-syst
pay for performance in education recall the ARRA and google ‘race to the top’

Golonkin: Workfare?
 
Workfare was introduced under Reagan and tightened later.  This is the system before the welfare reform of 1996.  It was learned that it costs more to give welfare recipients money and make them work than to just give them money so states backslid and it never amounted to much.  It is an experiment that all agree failed.

Golonkin: Some of these ideas are useless, some of them might have legs, but the point is: specifics, specifics, specifics.

So we see what happens when a conservative tries to think of constructive policy proposals.  There is the wish that conservative claims be ‘shown with numbers’ plus Obama policy after Obama policy after Obama policy. 

I think Golonkin should spend more time and effort on understanding the enemy. He might discover that the enemy is not the enemy but rather what he dreams conservatism might one day become.

The shocking thing is that this pathetic display of ignorance is described as “particularly fine work” by non movement conservative Mark Adomanis in Forbes in a post entitled “Epistemic Closure in Action …”
Golonkin is not the example of epistemic closure.  He is considered a “particularly fine” example of how some conservatives are working to overcome epistemic closure.  The detail that the conservative in question has new conservatives ideas which are almost all either in the PPACA or the ARRA and that he doesn’t know this, does not make the Galonkin essay an example of epistemic closure. 
Rather it is an example of how some conservatives are trying to overcome it and understand liberals before denouncing us. 

I am tempted to type “pathetic” but I don’t pity them, I fear them. They are very numerous and their blind ideological arrogance makes them dangerous.

Note, the two conservatives in question are Green and Golonkin.

cross posted with Robert’s Stochastic thoughts

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What is the Economic Middle Class?

My lovely wife shared this link with me on Facebook.  I got into a discussion in comments there with a right winger who suggested that $250,000 was a very reasonable estimate for median income in Boston.

As it turns out, median household income in Boston is $51,914, close to the national average, and way below the Mass. State average of $67,950.  But right wingers live in a data-free world, so this is no surprise.

Another contention in comments at that site is that the middle class is undefined and undefinable. Not so.  I define middle class household income as the middle quintile.  This range includes the median and a band around it wide enough to hold 20 percent of the population.  You might wish to concoct your own definition with a wider spread, but you’d better not be asymmetric around the median.  Feel free to use the middle three quintiles, if that is your preference.  But if your of concept of middle class gets very far beyond 50% of the population, you really ought to give more thought to what the word “middle” actually means.

Thinking about all this prompted a look at the various income quintiles.  The data, through 2009, is available at the Census Bureau web site, table 694.  This table provides historical data from 1967 through 2009 on the top income limit for the bottom 4 quintiles, and the bottom income limit for the top 5%, expressed in constant 2009 dollars.

Graph 1 presents this data.  The 3rd quintile – my definition of the middle class – is between the orange line and the yellow line.

In 1967, the threshold for the middle quintile was $32, 848.  By 2009, it had increased by 17% to $38,550.  This is a compounded annual growth rate of 0.38%

In 1967, the top limit for the middle (and threshold to the 4th) quintile was $46, 621.  By 2009, it had increased by 33% to $61,801. This is a compounded annual growth rate of 0.68%.

The threshold value for the fifth quintile increased from $66,481 in 1967 by 80% to exactly $100,000 in 2009.  This is a compounded annual growth rate of 0.98%.

To reach the top 5% required an income of 106,684 in 1967.  By 2009, this had increased by 69% to $180, 001.   This is a compounded annual growth rate of 1.25%.

So my comment sparring partner and the current presidential challenger he seems to support are a bit off base.  $250,000 in household income puts a family well above the 95th percentile.  In fact, that is just enough household income to crack the top 2%.

My ongoing hobby of debunking right wing nonsense aside, the point of this post is mainly to inform.
There are two main observations:
1) While the bottom two quintiles haven’t changed much over the decades, entry to the third quintile has crept up a bit; and into higher categories it’s moved up a lot.  We recognize this as stagnation in the bottom half and growing inequality in the top half, skewed powerfully to the top.
2) This data set stops in ’09, so Obama is outside the discussion.  But we can see that all the way up to the 95th percentile, income growth was dead flat during the Bush administration.  No wonder the 95% percentile feels so poor.

But — surely, some wealth was generated during those 8 years.  GDP growth was positive at least some of the time.  I wonder where it all went?

Cross posted at Retirement Blues.

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Yes, The Right Wing Lies When They Say Obama is a Profligate Spender

Part III – How to think about time series data.

For reference:
Part II  Federal Spending as a Fraction of GDP

Part I  Federal Spending Growth

Some commentors to the previous posts have rightly concluded that I consider spending under Obama in the context of historical trends.  In fact, if you don’t consider historical trends, you are ignoring the most important element of context that is available.  I only mentioned trends briefly in Part II, but the directional changes in the graphs of Parts I and II implicitly suggest them.

Time series data that relate to the size of the population, the government, or the economy generally follow a quasi-exponential growth pattern.  I say quasi- because a perfect exponential growth pattern  results from a continuous constant rate of growth, while real world growth rates vary from year.  Graph 3 of Part II shows how these variations have occurred over several decades.  Usually this does not result in a large or permanent deformation in the shape of a quasi-exponential curve, since the growth rate typically oscillates irregularly around a mean value that only changes slowly over time.

Graph 2 in Part II shows that the spending and GDP growth curves stay close to exponential tracks over long time spans.  It also illustrates that the recent recession was one of those rare times when growth rates deviated substantially.

Human eye-brain coordination doesn’t deal well with exponential curve shapes.  Straight lines are much easier to comprehend and extrapolate.  Graphing quasi-exponential data on a log scale reduces the curve to a quasi-straight line that is much easier to use and understand.

Graph 1 shows Federal Spending and GDP, since 1995, plotted on a log scale.  Constant growth results in a straight line segment, and a higher growth rate causes a steeper slope.  Zero growth shows up as a horizontal line.   I’ve again included a line for 5 times spending, to get a close overlay with the GDP line.

 Graph 1.  Spending and GDP since 1995 (log scale)

There is an upward bend in the spending line in 2000.  This is most easily seen in the blue line.  During the 90’s, we can see that GDP grew faster than spending.  In 2001-2, GDP growth flat-lined, as expected during a recession. Then, from 20002 to 2008, the growth rates for GDP and spending were close to identical.  Both lines twist during the most recent recession.  Curiously, spending growth was flat for a large portion of 2008.

Since the recession, the spending lines are very close to flat, and GDP growth has been anemic.  Here is a close up.

Graph 2.  Spending and GDP since 2007 (log scale)

Graph 3 provides context, all the way back to 1947.  Ponder the inflection points and slope changes at your leisure.

Graph 2.  Spending and GDP since 1947 (log scale)

Note that there are only two flat-ish spots in the spending lines: now, and during the Eisenhower administration. The current administration has, at least temporarily, broken the decades-long trend in continuous spending increases. 

To emphasize the obvious, spending growth is now very close to zero.  In context, this is remarkable.  Saying Obama is a profligate spender is a lie. 

In this post, I am not suggesting that the rate of spending growth under any president is good, bad, appropriate or inappropriate.  I am only pointing out what was and is. 

So, this is how you think about time series data.
0) Forget your preconceived notions.    (Frex:I had no idea that spending growth has essentially stopped until I looked at the data.)
1) Identify trends. The history of time series data provides meaningful context.
2) Identify break points and trend changes.  These are key data points.
3) Note the directions of these changes.
4) Think hard about what these observations are actually telling you, not what you want them to say.
5) Double down on 4) if you are looking at a ratio.  Ponder that denominator.
6) Don’t cherry pick.  It’s dishonest.

There are a lot of ways to look at a data set: linear and log scales, rate of change, etc.  Chose the one that gives the clearest picture of the data you want to analyze, or simplifies the analysis, or makes it easier to understand.  Studying different views can be informative, as can a comparison of different data sets. 

Here is the working page at FRED for the graphs in this post.  I encourage the interested reader to spend some time working with the capabilities of this very powerful tool.

Editorial Comment:
In case it’s not obvious, I’ll tell you that I write these posts because they interest me and I think they generate some knowledge, or at least information, that is worth sharing.  I have virtually no interest in the fool’s errand of convincing anybody that I am right – either the data analysis convinces you or it doesn’t.  So unless you have better data, or can point out some specific flaw in my reasoning [and then tell me specifically and in detail how to get it right] don’t bother arguing with me.

I appreciate rational discourse, and am always willing to engage thoughtful readers. I’m also willing to be proven wrong by a cogent argument.  That said, though, I don’t really care if anyone comments.  At this point, I’d almost rather nobody did.  But if you chose to, please do me the courtesy of having your comment be somewhere in the general vicinity of on-topic.  And – fair warning: naked assertions and unsubstantiated ideologically approved talking points will be scoffed at, so please check that nonsense at the door.

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Why Spending/GDP is a Terrible, Horrible, No Good, Very Bad Metric For Judging Obama’s Performance

A post like this really shouldn’t be necessary, but part of the right wing canard that Obama has been a profligate spender is based on spending as a percentage of GDP.

It looks like this – Graph 1.

Graph 1.  Fed Expenditures/GDP

Sure enough, by the end of Clinton’s term the ratio had fallen from Reagan’s high of 24% to a modern low of 19%.  But note that the 19% value wasn’t typical.  It was the end point of a decade-long decline.  And, yep, there’s Obama with an all-time-high approaching 26%.

What otherwise intelligent, and sometimes even famous people seem to ignore though, is that every ratio has not only a numerator but also that ol’ devil denominator.   Let’s have a look at both of them.  Graph 2 shows GDP and Expenditures since 1980, expressed in $ Billions.  I’ve also added a line representing 5* Expenditures, since 20% of GDP is a reasonable rough estimate for the post WW II era.

Graph 2.  Expenditures and GDP Compared

Actually, the 5x Expenditures line runs pretty consistently above the GDP line, telling us two things that we should have already known from looking at Graph 1.  First, Expenditures greater than 20% of GDP have been the norm since before 1980, and 2) Clinton’s final number is not representative of anything other than a single year.  Using it as a comparator is cherry-picking and fundamentally dishonest.

The 5x line also emphasizes that the majority of the spending increase under Obama unavoidably occurred during the officially designated recession.  The GDP line shows that, post recession, GDP growth has not recovered to the pre-recession trend line.  In fact, growth has established a new trend line with a lower slope.  This is unprecedented in the scope of FRED historical data.  My guess is that insufficient Federal spending has been a big drag on this recovery.  But it’s also true that GDP growth has been in secular decline since the Reagan administration.  Note that skewing the denominator down will automatically skew the ratio up.  This is what Bill Clinton calls “arithmetic.”

Slicing across this a different way, Graph 3 gives us year-over-year percentage growth in Expenditures and GDP, dating back to the Eisenhower administration.

Graph 3.  YoY % Change in Expenditures and GDP

A few simple observations:
– The spending increase during the recent recession was modest by any standard, and dwarfed by earlier surges.
– That increase, coupled with the most severe GDP decline since the other Great Depression gave our beloved ratio a terrible, horrible, no good, very bad double whammy.
– GDP growth during this recovery is only marginally better than it was during the 2001-2 low, and far below Clinton era levels.
– Clinton was the most consistently frugal president of the post WW II era – until now.
– Since the recession was declared over, B. Hoover Obama has been miserly.

One can legitimately argue that Obama’s approach to the economy has been excessively conservative.  Krugman has made this point repeatedly.  I often say that Clinton governed to the right of Eisenhower – who was a genuine deficit hawk – and that Obama is to the right of Clinton. That is intended to be slightly hyperbolic, but using this data as the benchmark, it’s dead on.

Any questions?

Cross posted at Retirement Blues

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If They’re All Young Hooligans, Why Are Four of Eleven Over 35?

With a hat tip to Tim Harford, The General Manchester Police are reporting their already-public-record convictions via Twitter (@gmpolice).

On a quick check, four of the eleven so far convicted (including the one woman), are over 35. So far:




It appears that legendary “moral decay” began under Margaret Thatcher. Whodathunkit? Well, maybe David Cameron in 2007:

Sometimes a piece of research is published which goes straight to the heart of the national debate – it holds up a mirror to the whole of society and makes us see ourselves as we really are.

That happened this week. On Wednesday, Unicef published a report entitled “An overview of child well-being in rich countries.” It brings together comparative research on the material, educational and emotional state of childhood in 21 developed nations.

Britain comes bottom of the list….

Ten years after the current [Blair] Government was elected on the promise to end child poverty and make education its number one priority, Britain comes 18th out of 21 rich countries on material wellbeing, and 19th out of 21 on educational wellbeing. According to the report, British children are among the poorest and least educated in the developed world….

On the radio yesterday morning two local residents were interviewed about the spate of killings in their area….One said, “the children don’t seem to have anything to do. They just roam the street.” When she was asked who she blamed for that, she said “the Government, really. They’re closing down all the community centres.”

Now I like to agree when people blame the Government for things that go wrong. And, more seriously, I also agree that there is a problem with the lack of community facilities in our big cities….

Ultimately, we didn’t need the Unicef report – pages of statistical analysis – to tell us there is a problem with the emotional wellbeing of Britain’s children….

We need common sense in schools. It is madness for the authority of teachers and heads to be second-guessed by outside evaluators when they want to impose simple discipline in their own classrooms. It is madness for a teacher to fear that if he restrains a child who is violently bullying another child, he will end up in court on charges of abuse. It is madness for schools to have to cancel outdoor trips because their insurance policies won’t cover them in case of mishap.

Indeed, it is grimly instructive that the only measure in the Unicef report where Britain does not come at or near the bottom – where we come a respectable 12th out of 21 – is (you guessed it) health and safety. Our children might be the loneliest, worst behaved, unhappiest children in the developed world– but at least they are protected from sprains and bruises….

And I hope they illustrate something of what the Conservative Party under my leadership stands for. When we were last in government, in another political era, we stood for economic revival. We now stand for social revival. We used to stand for the individual. Now we stand for the family, for the neighbourhood – in a word, for society.

How’s that working out?

(cross-posted from a personal blog)

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Two Reductionist Arguments: On Conservatism. On Classical Economics.

by Bruce Webb

On Conservatism.
Modern Conservatism = Protection of Property Rights.

The historical process in Northern Europe and Britain from the mid 17th through the 19th century was marked by a sometimes gradual, sometimes violent collapse in belief in the Divine Right of Kings, and for that matter Popes. Conservatism replaced its traditional appeal to Authority with a claim to absolute right to Property. Discuss.

On Classical Economics.
Economics (which as a discipline developed in parallel in time and place with Modern Conservatism) foundationally assumes that Homo Oeconomicus is psychologically motivated by Accumulation and not Consumption/Display. Discuss.
____________________________________________________________________

I maintain that a lot of what is baffling in Conservatism to those of us whose thinking derives from Liberal Enlightenment’s elevation of The People to primacy, can be explained by a combination of these two arguments. How do you logically combine Liberty and Patriarchy? Why is debt as a result of war acceptable, while debt as a result of social spending not? Why assume that tax cuts will in all cases increase reinvestment? These questions which seem to come from all over the field all can be answered and made inter-consistent by appeal to the two stated arguments.

The results are almost by definition unacceptable to the liberal imagination, and those of a moral bent might use harsher terms than ‘unacceptable’, but that doesn’t mean they are irrational.

I’ll advance some specific arguments and conclusions in comments. For now consider this an open thread on the historical and psychological foundations of conservatism, or if you like of liberalism.

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Is this the return to older values?

Savvy consumer of the St. Louis Today on line edition points us in the direction Pete Peterson might be suggesting from this post:

Debtors prisons might have gone the way of medical leeching and boneshaker bikes, but that doesn’t mean consumers in some states can’t end up in the clink if they fall behind on their bills.

Today, the Minneapolis Star Tribune reports on what appears to be the rising number of arrests of debtors who have been thrown behind bars for missing court-ordered debt payments or for not appearing in court after being sued by debt collectors.

The startling story reveals how debt-related arrest warrants in Minnesota have jumped 60 percent in the last four years, with 845 cases last year. That’s not a large segment of the state’s total arrests, but that doesn’t offer much comfort to those consumers who have been hauled into jail for court offenses stemming from debts as small as $250.

Some responsible, on-time bill payers might not be overly sympathetic to the jailed debtors’ plights, but they should keep this in mind: Often, the expense of arresting and jailing the consumers exceeds the amount owed. And that price tag, of course, is picked up by the taxpayers.

The laws allowing for the arrest of someone for an unpaid debt are not new.

What is new is the rise of well-funded, aggressive and centralized collection firms, in many cases run by attorneys, that buy up unpaid debt and use the courts to collect.

Update: Rdan here…Yves Smith takes the high road on ‘ruthless’ in PR push against strategic defaulters underway…is there a debtor’s prison in your future?. This is Peterson’s choice of words.

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Ross Douthat and the cocoon

Robert Waldmann

Douthat is worried about the Republican information cocoon. He thinks that conservatives should not rely so much on Fox News and should be open to media which they consider unfriendly (such as his employer the New York Times). He argues that Republicans achieved more back before Fox
In the age Before Fox News, on the other hand (B.F.N., to historians), the American Right managed to lower taxes, slow government’s growth to a crawl , whip inflation, and deregulate important swathes of the American economy, among other Reagan-era accomplishments.

After the jump, I click Douthat’s link and consult an obscure source called the Wikipedia.

Douthat shows how people who live in cocoons make fools of themselves. First click *his* link. You will find that the graph does not show a slowdown in the growth of government spending under Reagan. I assumed that he had defined government as not including the military and so had a misleading graph which supported his claim, but, in fact, he just showed a graph which shows slow growth of spending after the end of the cold war and during the Clinton Presidency including the 6 years of Republican control of congress. I think he is counting the Reagan years as starting at the trough of the Volker recession and he definitely doesn’t count Bush Sr as a pre-Fox Republican. He’s really definitely measuring trough to peak and timing presidencies by looking at recessions. And this is the conservative warning about living in a cacoon.

Oddly, I mean to post about another gross historical error in that brief quotation. It is the claim that under Reagan “important swathes of the American economy” were deregulated. I don’t know what Douthat has in mind. I certainly don’t recall any such important deregulation under Reagan (well there was deregulation of S&Ls and you know how that turned out). I think he is thinking of Airline Deregulation Act of 1978. I’m sure that all Republicans agree that Reagan deregulated the airlines and that Carter didn’t deregulate anything, but they are wrong. Note there was an even huger Democratic majority in the Senate in 1978 than there is now. Or maybe it was the deregulation of interstate trucking via the motor carrier act of 1980 . Or maybe it was the phased deregulation of oil prices which began on April 5 1979 . Sure seems like the deregulating conservative hero Ronald Reagan had a Southern accent and grew peanuts.

But Reagan must have deregulated. Everyone knows Reagan deregulated. What exactly ? I have used “refuted by 5 minutes of googling” as my standard for rejection of reality for years now. This time, I stuck to Wikipedia. Recall this is from a post arguing that Republicans ought to be reality based.

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