Father’s Day WEEKEND Open Thread

That’s right, we celebrate the whole weekend at our house.  But then we celebrate our birthdays for at least a week (sometimes longer) and Christmas for at least two.  And since this place is heavily populated by men I would be remiss if I didn’t wish all of you Dad’s a Happy Father’s Day.

I lost my dad when I was 56 and I miss him every day.  I think I’ve mentioned before that we had a pretty rocky relationship while I was in my 20’s but we found our way back to each other  and a big part of the reason we were able to do so is because he was my best friend when I was a child.  He worked really hard and very long hours but nearly every free moment he had was spent with his girls and we loved it.  He always knew I was a little sponge and so he filled me up with values and lessons that are still a huge part of me to this day.

And luckily for me I’m also blessed with a terrific husband who could easily win a “Best Father of the Year” award.  So I appreciate fatherhood and hope y’all have a great weekend with your kids if they’re around or at least that you are acknowledged gratefully by them if you’re separated by some miles.

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And a few links for those of you who check in……………….feel free to add your own.

Income inequality in the United States—already well above that experienced in other advanced economies—has surpassed Gilded Age levels, and the Great Recession and ongoing jobs crisis will exacerbate this trend until full employment is restored. While market forces are the primary driver of rising inequality, recent economic research suggests that tax policy has contributed as well, both by exacerbating after-tax income inequality since the late 1970s and by spurring a shift of pretax income toward high-income households.

Facebook became the first to release aggregate numbers of requests, saying in a blog post that it received between 9,000 and 10,000 requests for user data in the second half of 2012, covering 18,000 to 19,000 of its users’ accounts.

Warningdon’t read this if you’re eating, prone to sudden bouts of queasiness or unable to even think about Un Chien Andalou without simultaneously bursting into tears and dry-heaving. Believe me, I’m speaking from experience here.

And last but not least:

Comic

Things Republican Politicians Do That Drive Me Crazy

Steve Benen wrote this up today and I am at a total loss as to what the Senate Republicans think this is going to accomplish. Hiding reports doesn’t make the facts go away, and while I understand that you can probably find as many economists to disagree with the report as ones that agree with it, it seems to me that a better solution would be to publish a rebuttal.

In mid-September, the non-partisan Congressional Research Service published a detailed report, documenting the fact that reducing taxes on the wealthy does not, in fact, generate economic growth. Instead, the CRS found, the trickle-down model appears to be “associated with the increasing concentration of income at the top.”

[snip]

But in this case, the CRS presented Republicans with inconvenient truths. A spokesperson for Mitch McConnell said the officials at the research service “decided, on their own, to pull the study pending further review.” While that may be true, the question then becomes how much pressure the CRS officials were under to make this decision “on their own.”

And what is it that Republicans didn’t like about the CRS analysis? McConnell aides offered a series of complaints, including the report’s use of the phrase “Bush tax cuts.”

Apparently, in Republicans’ minds, to say “Bush tax cuts” is to use an inappropriate “tone.”

But putting all of that aside, we simply cannot have a functioning federal system in which neutral, independent offices are ignored, pressured, and/or censored when Republicans don’t like what they have to say. We’ve now seen this recently with the Bureau of Labor Statistics and Congressional Budget Office, and democratic norms dictate that GOP officials cut this out.

Here is the original report, republished by Senate Democrats on their web site.

Income Gaps and OWS Gets Chilly

Why am I a registered Republican? Because when I registered as a
Republican, I was at the height of my new-found conservatism, having been a liberal in my youth (as so many are). Also, because my disillusionment with liberalism (my own liberalism having been naïve) was so profound, I was taking the full pendulum trip to the other side.

I’m going to remain a registered Republican, although I become less enamored with the sorts of politicians the GOP puts forward (and are currently in office) every day. Income gap polling as an issue? Let’s try to own it!

Speaking of income gaps, Bridgeport, Connecticut is the city in the US with the biggest gap between rich and poor. It’s a blue city in a blue state, if we’re talking political affiliations.

In fact, it’s interesting that the same folks who repeatedly cited how blue states paid more in federal taxes, while red states received more in federal taxes, haven’t been interested in blue state/red state comparisons when it comes to the income gap. Perhaps it’s because states like New York—which is a fairly blue state—rank highest in wealth disparity.

Atlanta, Georgia has the highest income gap between 2005 and 2009. Aha, you say! Georgia is about as red as a state gets! Alas, Atlanta is a decidedly blue pocket in that red, red state.

Washington, DC is also a city with some of the greatest income disparity, according to latest census data.

Interesting, most of the cities with the highest income gaps are blue cities (in terms of both local government and who they tend to vote for in national elections) swimming in seas of red. Atlanta, Dallas, Gainesville, Baton Rouge.

Among the states with the most unequal income, we find California, Connecticut, New York, Louisiana, as well as Texas, Mississippi, and Alabama and D.C., if you want to count them as a state. What does that tell us? That even liberals and Democrats have a very hard time doing anything to effect the income gap, and that even fair progressive policies (such as those employed in California, New York, and Connecticut) don’t necessarily do much in regards to controlling income disparity. Also, that legalized gambling made a lot of people very rich in Mississippi.

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I have noted that I expect most protests to have a partying, here-for-the-babes-and-drugs type element. Well, those folks are going to be going home. When the weather starts freezing, the partying is over for the party-people.

Unemployment is higher for veterans. We apparently don’t do much for placement. Clearly, we can and should do better. We spend a great deal on defense, we can’t afford some time spent on placing folks exiting the service?

The gap between rich and poor foods is narrowing. Supposedly. I still think anybody can eat inexpensively with judicious shopping, and perhaps a little gardening. Fast food and restaurant eating (Chipotle? Really) is still, in my experience, a lot more expensive than smart shopping, clipping coupons, and owning a freezer.

Are more taxes and regulation the path to prosperity? Well, Maryland is going to find out, starting (but not stopping) with higher taxes on toilets.

Less regulations under Obama than Bush? But the problem is, Obama’s regulation are more onerous or expensive. Jeeze, you people are never happy.

Manufacturing Inequality

I’ve been arguing for a long time that the dire claims of vastly increased income inequality, and particularly the claim that only the super-rich have made any gains since 1980, are wildly exaggerated at best and complete bunk at worst. James Pethokoukis has a post at Enterprise Blog making this case and citing academic papers supporting it.

On the claim that only the rich have gained, he links to a 2006 column on Brad DeLong’s cite by Jason Furman, now deputy director of Obama’s National Economic Council, making among others the point that all we have to do is use our eyes and our common sense to realize that, yes, we are all better off, with better standard of living than we had thirty years ago. Economic analyses purporting to show that the middle class has made no gains in thirty years plainly are at odds with reality. Believe what your eyes tell you, not the statistical magic tricks of (consistently) committed liberals invested in “rising inequality.” To pat myself on the back, I made this argument many times in the comments at PL, to the great outrage of “fact-based” liberals–great outrage but never any effective answer.

Similar statistical hanky panky underlies most of the claims of wildly increased disparities in wealth, like the now ubiquitous alarm that “400 people own more wealth than the bottom 150,000,000!” These measures almost invariably arrive at a predetermined conclusion by counting only the kinds of “wealth” that are most concentrated among the wealthy. But I’ll revisit that one later.

H/T Glenn Reynolds

It’s Demand & Income Inequality (Wed. Open Thread)

One of my favorite conservatives, Bruce Bartlett, confirms what I’ve been saying for the last year. We’ve seen the economy worsen, from the small business perspective, and slow to a crawl. We talk to between 30 and 40 business owners a day, and don’t forget 78% of small businesses have less than 20 employees, and they all tell us they don’t really give a diddly squat about regulations or taxes right now. They care about the lack of customers. I understand my evidence is anecdotal, and there’s not necessarily a reason to believe me, but now the Bureau of Labor Statistics has verification. I also get it that Republicans and some large businesses care about regulations, especially the energy and health care industries, but could we stop pretending it’s true for small businesses or all large businesses?

On Aug. 29, the House majority leader, Eric Cantor of Virginia, sent a memorandum to members of the House Republican Conference, telling them to make the repeal of job-destroying regulations the key point in the Republican jobs agenda.
“By pursuing a steady repeal of job-destroying regulations, we can help lift the cloud of uncertainty hanging over small and large employers alike, empowering them to hire more workers,” Mr. Cantor said.
Evidence supporting Mr. Cantor’s contention that deregulation would increase unemployment is very weak. For some years, the Bureau of Labor Statistics has had a program that tracks mass layoffs. In 2007, the program was expanded, and businesses were asked their reasons for laying off workers. Among the reasons offered was “government regulations/intervention.” There is only partial data for 2007, but we have data since then through the second quarter of this year.
The table below presents the bureau’s data. As one can see, the number of layoffs nationwide caused by government regulation is minuscule and shows no evidence of getting worse during the Obama administration. Lack of demand for business products and services is vastly more important.

(lmsinca)


I also came across this interesting study yesterday. We’ve looked at so many statistics on income inequality, but I’m not sure anyone really understands why it’s important. I think this study gets to part of it at least. I also believe the “Occupy Wall Street” protests reflect the helplessness people, especially young people, feel in being able to combat it. Oh I know, they’re just a bunch of kids and unemployed people who don’t understand the global economy, but they know what’s happened to them over the last three years and it feels wrong. They’re calling themselves the 99% and that’s for both being unemployed and without benefits and also in the bottom 99%.

For example, the bailouts and stimulus pulled the US economy out of recession but haven’t been enough to fuel a steady recovery. Berg’s research suggests that sky-high income inequality in the United States could be partly to blame. So how important is equality? According to the study, making an economy’s income distribution 10 percent more equitable prolongs its typical growth spell by 50 percent.

Berg and Ostry aren’t the first economists to suggest that income inequality can torpedo the economy. Marriner Eccles, the Depression-era chairman of the Federal Reserve (and an architect of the New Deal), blamed the Great Crash on the nation’s wealth gap. “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth,” Eccles recalled in his memoirs. “In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped.”

Many economists believe a similar process has unfolded over the past decade. Median wages grew too little over the past 30 years to drive the kind of spending necessary to sustain the consumer economy. Instead, increasingly exotic forms of credit filled the gap, as the wealthy offered the middle class alluring credit card deals and variable-interest subprime loans. This allowed rich investors to keep making money and everyone else to feel like they were keeping up—until the whole system imploded.
There is a link to the study here which is in the current issue of Finance & Development, the quarterly magazine of the International Monetary Fund.

(lmsinca)


And last, but not least, it’s the trade deficit stupid. This piece in The Nation is an important one I think. Essentially, we need to get the wealthy investors to quit investing in financial instruments and steer them into long term “making stuff for export and consumption” stuff. There are ways to do that but they probably won’t like it too much because it’s much easier to do what they’re doing now.

But what’s behind it all is the fact that the United States cannot pay its way in the world. And while a smaller country would have expired long ago, we keep stumbling along, getting sicker, losing industrial weight, because the rest of the world has an interest in continuing to hold us upright. 

For Keynes that would be the challenge—not just to bring down but to eliminate it: the whole thing. The failure to do so has real implications for other parts of Keynes’s theory. The answer to our crisis is not to “hire and rewire,” or to have a lot of public works. Let me add, by the way: I’m a labor lawyer; I want the government to spend. I love public works. I’d love a new O’Hare Airport. I’d love a repaving of Lake Shore Drive. And certainly Keynes loved public works. He saw people starving; he had a heart. We have to do something. We can’t wait for the trade deficit to come down. But that’s not the answer—it’s urgent, to be sure, but it’s just a first step. The answer is to get rich people to put their money into real “investments” and not “loans.” It’s to induce the rich in this country to invest “by employing labor on the construction of durable assets.” Call them widgets; call them iPads. Call them anything we can wrap, ship and sell to somebody abroad.“Oh, but he wouldn’t put that ahead of the stimulus.” 

No—but he’d put them together.



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