Tuesday, November 30, 2010

Krugman: Recognizes the Earth Has Shifted

Both validating and frightening at the same time when mainstream press finally realizes the earth has shifted.

"My sense is that most Americans still don’t understand this reality. They still imagine that when push comes to shove, our politicians will come together to do what’s necessary. But that was another country." - Paul Krugman, Novemeber 22 2010.


Friday, November 19, 2010

Top Tax Rates and Federal Debt 1950-2008

Patriotic Millionaires

From the Fiscal Strength project:

Only 375,000 Americans have incomes of over $1,000,000

Between 1979 and 2007, incomes for the wealthiest 1% of Americans rose by 281%

During the Great Depression, millionaires had a top marginal rate of 68%

In 1963, millionaires had a top marginal tax rate of 91%

In 1976, millionaires had a top marginal tax rate of 70%

Today, millionaires have a top marginal tax rate of 35%

Reducing the income tax on top earners is one of the most inefficient ways to grow the economy according to the non-partisan Congressional Budget Office

44% of Congress people are millionaires

The tax cuts were never meant to be permanent

Letting tax cuts for the top 2% expire as schedule would pay down the debt by $700 billion over the next 10 years

Also see http://www.salon.com/news/opinion/joe_conason/2010/11/18/millionaires

Friday, November 12, 2010

Why Party Matters

Just found this fantastic post by Kel Munger explaining what I feel very strongly about: despite idealistic dreams to the contrary, the political party matters way more than the individual candidate.

Her original post is:
Why the party matters in elections

Why the party matters in elections

I’ve got a lot of friends who are insistently independent. It’s one of the things I love about them–the way they demand the right to make up their own minds, first and foremost. But when that “independence,” including their identity as “independent voters,” is tied to an election, well, I kinda want to give a civics lesson.

So for all you dear friends who "vote for the person, not the party,” here’s why I think that’s a much more idealistic (and possibly harmful) position than you seem to realize.

First—and while they’re teaching about the three branches of government and the electoral college in civic class, they rarely mention this—we have a two-party system. These days, it’s the Democratic Party and the Republican Party. We’ve had Whigs, too, and we started with the Federalists and the Anti-Federalists. You can read all about it here.

But since much of the business of government is conducted by elected officials, and elected officials represent the parties on whose tickets they ran as much as they do the voters who elected them, we also have things like caucuses. The ones we need to be concerned with here are the “informal meetings” that all the members of a party, or a sub-group of that party, attend—at which they decide their strategy for legislation.

And that, my friends, is why it makes a difference which party you vote for: We have a winner-take-all two-party system, and the party in the majority is the one that sets the agenda and makes the rules. The minority party can only force compromise by blocking the agenda of the majority party, and this has been the rule in the last three decades, since the Reagan Revolution.

Yeah, we’ve always been a partisan nation, but the neo-conservative movement, especially the politics of people like Grover NorquistLee Atwater and Karl Rove, has been as bad as anything since the Civil War. The first thing you’ll notice about those guys is that none of them was a candidate or elected official. They have been, instead, the political operatives. And, while they have their counterparts on the Democratic side of the aisle—James CarvilleDavid Axelrod—the Dems have never been as successful at staying on-message and fighting hard and dirty. And yes, the Dems take a lot of money from the same people who fund the Republicans; it’s just that the Republicans take nine times more of it (and that’s from the Independent Voters Network).

So let’s say the two candidates in your Congressional district are, hypothetically speaking, a  jackass idiot of a Democrat who can’t tie his shoelaces by himself and never worked a day in his life and a very nice, small businessman, moderate Republican. Who are you going to vote for?

Well, if you’re one of my friends, you’ll vote for the man, not the party—and that man happens to be a Republican.

The trouble is, it might be the wrong choice. Because that moderate Republican is going to be a junior Congressman in a system that is run by the parties. No matter what he thinks or cares about, he will either bow to the party’s agenda or he will get no support for re-election and he’ll face a primary contest from the right.

And that asshat Democrat? He, too, will be in a Congress that is run by the parties. Because he’s a Democrat, he’ll have some friends—the Blue Dog Democrats—and while he’ll get a chance to speak his mind, he will also be fairly quickly brought into line with the party’s agenda.

That’s why they call ‘em whips, folks.

And that’s why party matters. The party that’s in control of Congress also controls the agenda.

So what agenda are you voting for? It pays to know. You can read the party’s official platforms, Democratic and Republican.

In my perfect world, we’d have public campaign financing and limits on campaign spending; a limited campaign season; a return to the Fairness Doctrine; Instant Runoff Voting; and a multi-party system that required coalition building to form governments.

Under those circumstances, I’d probably be a Green or a Democratic Socialist. But that’s not the world we live in.

In the world I actually live in, it makes a great deal of difference to me which party is in power. Do I want the party that has consistently at least given lip service to equality for LGBT people; that has defended women’s access to reproductive health care, including abortion when necessary; that at least tries to restrict corporate power and that supports some modicum of environmental legislation?

Or do I want the party that has expressed, as its main goal, to make sure that President Obama only gets one term?

Yeah, go ahead; start screaming about how liberal I am. No one is surprised. Just don’t pretend that you’re an independent if you always vote for the same party’s candidates, and don’t pretend that it makes no difference. There is a big difference between the two parties. One of them is organized, on-message, and out to roll the clock back to the McKinley Administration. (Curious about what that means? I’ve attached a  .pdf copy of William Greider’s article on this subject to the post.)

The other is the Democratic Party. I don’t always like ‘em. I think they’re too damn timid and they don’t know how to stand up for themselves and for cryin’ out loud, can’t they communicate? I criticize ‘em a lot. But in the races where party counts—state and federal offices and legislatures—that’s how I’m voting.

Attached document: William Greider's article "Rolling Back the 20th Centruy" from The Nation, May 2003:

::posted by Kel Munger @ 2010-11-01 5:10 PM

Social Security: Lies You Accepted As Fact

Usually used in reference of how great modern times are, what with new technology and medicine, enlightened concepts of nutrition and personal hygiene, the old adage about how life expectancy has increased so much in the past century really grates my nerves . The statistic is skewed because of child mortality. People hundreds of years ago were just as able to live to a ripe old age as nowadays. Yet you'll often hear how back in the 1700s you'd be dead by the time you turned 50, or in "cave man" times, the number was 30 (invoked when talking about dental health and podiatry). But lately I've at least seen one mainstream acknowledgement of this skewing (which I didn't even know was actually a lot more comparable to modern times before a huge dip it took during the Industrial Revolution).

Sometimes it is used in a Mathusian sense, to explain the oncoming crisis of society having to take care of elderly now living many more years. And this is precisely where it starts to become less a mere annoyance and more a deliberate lie. Paul Krugman points this out in today's piece on the Budget Deficit Commission, which recommends raising the retirement age:

...working until you’re 69, which may sound doable for people with desk jobs, is a lot harder for the many Americans who still do physical labor.

But beyond that, the proposal seemingly ignores a crucial point: while average life expectancy is indeed rising, it’s doing so mainly for high earners, precisely the people who need Social Security least. Life expectancy in the bottom half of the income distribution has barely inched up over the past three decades. So the Bowles-Simpson proposal is basically saying that janitors should be forced to work longer because these days corporate lawyers live to a ripe old age.

Paul Krugman's full Op-Ed is here: http://www.nytimes.com/2010/11/12/opinion/12krugman.html

Thursday, November 11, 2010

UN Report is Causing Reverberations

First, it refutes mainstream Economics, and without attribution, makes the same observations of one Karl Marx. This blogger does a good job of pointing that out:

Second, it states that humans produce more stuff than they can afford to buy (I always had the feeling a lot of my job was make-work and we only have to put in 40 hours to
differentiate the deserving from the undeserving), and until now, the US has
bought most of that stuff (Americans being the Consumer of Last Resort). But since the richest Americans started hoarding all the wealth in the US, Americans will no longer be able to buy up all those exports from the rest of the world. So, the report warns all those developing countries to start sharing the goods.

The UN Report is here:

Wednesday, November 10, 2010

Gold Standard

I hear some say "Return to the Gold Standard!"
Doesn't that make sense? Who ever let our government get away with moving off the Gold Standard (it was Nixon, btw) ? There are many issues involved, but I think I can offer up at least one kind of summary.

The bottom line is that a Gold Standard essentially limits how much a government can use monetary policy as an instrument of tweaking the economy. The tools a non-Tea Party government has at its disposal to "jump start a lagging economy" (that's the official technical term used on Econ exams...) are Fiscal and Monetary. Fiscal is having the government buy a few glasses of lemonade from the local kid to keep his spirits up and give him a little spending money himself with which to buy some sugar from Billy the sugar grower and Leona the lemon hoarder. Monetary policy is where the government can give freshly printed money to banks for just about free so that banks will have more with which to make loans to Billy so he can stock up on more sugar...though that is useless if no one is buying lemonade....

Of course, too much Easy Money via monetary policy can lead to high inflation if it backfires. And the worst thing for Rich People With Lots of Money Lent Out Everywhere is inflation ('cause by the time the borrowers pay back the loans, the money is worth significantly less). So some Rich People tend to be for a Gold Standard.

But some Rich People are for Easy Money, since its a win win deal for the Banks they might happen to own, and they'd rather Billy be forced to take out a loan from them than get a windfall in customers courtesy of Uncle Sam.

Nonetheless, having the Gold Standard ties Government hands to help the economy, so it accords well with Market Zealots.

For some discussion on this in the NY Times, see :

Friday, November 5, 2010

Excerpt from "A New Economics for the 21st Century"

Neva Goodwin writes:

The critical role for economic theory is no longer simply to explain how the existing system works, but also to explore how the economic system can be changed to become more adaptive and resilient in the face of the challenges of the 21st century, and how it can be more directly designed to support human well-being, in the present and the future.

The economic theory that was accepted as standard in the non-communist world during the second half of the twentieth century erects serious impediments to meeting the challenges of the twenty-first century. These impediments include:

1. Inappropriate goals: standard economic theory prizes wealth creation above all, and most often defines this goal in terms of steadily growing GDP – instead of focusing on what economies should really produce, which is human well-being, in the present and the future.

2. A bias toward monetary values: application of cost/benefit analysis or a focus on narrow measures of economic success often lead to an effort to apply monetary measures to human values, such as dignity, health, or fairness. The focus on what can be submitted to the measure of money leads to an overemphasis on formal markets, and pays insufficient attention to essential unpaid economic activities.

3. Difficulty in dealing with the future: the standard use of discounting often leads to conclusions that make future concerns appear less significant than they are.

4. A de-contextualized view of the economy: economic systems are viewed as operating in a vacuum, without regard for the critical ways in which the economy affects, and is affected by, its ecological and social contexts.

5. Bias toward the status quo: a number of tools and concepts used in economic analysis accept the existing distribution of resources as “given” – not really up for discussion. These include the concepts of Pareto optimality, aspects of the Coase theorem, and a focus on aggregate growth indices at the expense of disaggregated inequality indicators. The strong assumptions of rationality at the root of the theory often are used to assert that the existing system is the best possible; if it could have been made better, it would have. (This is the basis for the joke about the economist who walks past a ten dollar bill lying on the sidewalk. When asked why, he says “it couldn’t have been real; if it were, someone would have already picked it up.”)

6. Bias against the public sector and in favor of markets: economists, business people and politicians have joined in a chorus of disparagement against government, buttressed by an increasingly blind, but fervent, belief that markets can solve all problems. In fact, while markets can be a part of the solution to many human needs, they rarely can be the whole solution. Markets need boundaries, rules, and safeguards against their internal tendency toward concentration of power and their lack of internal motivation to work for the wider good. In many situations markets are, in fact, the problem. Some attention to environmental concerns has led to the idea that, if there are market failures, they can be corrected by internalizing externalities. It needs to be emphasized that market actors have no inherent incentive to do this: that incentive has to come from outside the market system.

7. Methods of analysis that exclude non-economists: Students, policy makers, and other citizens frequently complain about economists’ increasing reliance on highly mathematized modeling techniques. These require extreme simplifying assumptions – such as perfect competition, perfect information, and complete markets – and create a mindset reluctant to grapple with issues that are not amenable to such modeling. Meanwhile, the very sophistication of the mathematics used in these models means that fewer and fewer people can participate in an ever more obscure – and less relevant – discourse.

From The New Economics Institute

Wednesday, November 3, 2010

Wealth Condensation

The number one reason I'm a Democrat? Wealth condensates. It really is quite simple. Due to the "magic" of compound interest, wealth will continue to follow a power law distribution without bounds. I'm not sure how, but in America, the aversion to inequality gets quite easily subverted. I think I'll conduct a poll to see if Americans know what the per family wealth would be if you evenly divided the entire net wealth of the nation, just for kicks, among every family. Its quite easy to figure out, but we'll see how off and in what direction most respondents are.

Monday, November 1, 2010

Chandler, Arizona Elections: Vote for Rebecca Schneider and Get Rid of Flake

Chandler voters ! Vote for Rebecca Schneider for US Congress in AZ District 6!

 Do NOT vote for Jeff Flake.  His kind of narrow-minded view of economics is the reason Arizona and the country are in such desperate straits.