1. Inequality-- currently reading Piketty book on Capital in the 21st Century ; his solutions aren't realistic, even if he's right.
Also I'm not completely sold- I don't want to kill the "golden goose" to achieve greater equality.
At least Piketty seems to recognize that Communism which had to be totalitarian in its implementation wasn't a good idea.
However, other than taxation, he doesn't seemed to have another solution.
Still have the issue of human nature. I just returned from China. Capitalist drive is apparent everywhere; even at the cost of social welfare and political freedom. Has real Communism worked anywhere?
I understand how taxation reduces the high end after tax income and helps the bottom , but how does it raise middle class incomes?
Also Piketty admits that inequality on a global basis has actually been reduced. It's just a current problem in rich western economies.
He seems to be less concerned about raising income taxes (although he would, but says it doesn't raises much money) . Rather he feels the way to go is a global wealth tax.
Interesting letter to editor of NYT that under our current system everyone is living a better standard of living and the criticisms are essentially about complaining that some are making too much.Those who are doing the most complaining are to sort of rich about the very very rich.
2. I've been concerned about this issue for quite some time but believe it's more about the widening gap between the "haves" and "have nots", as opposed to the 1% v. the 99%. Many people have prospered beyond the 1%, while many others have fallen farther behind.
My solutions are to strengthen private sector unions and rein in executive compensation through shareholder action. However this leave the pure capitalist alone, which I believe is the best that can be done in a free society.
Taxation of capital would reduce wealth, but the concern is whether it will reduce growth and hurt everyone. Inheritance taxes with generous exemptions for the less than ultra rich is also a way to reduce inequality on a generational basis.
3. Guaranteed Minimum Income. Helps the bottom, but does nothing for the middle. Still in a very wealthy nation like ours it sounds like a good idea. By eliminating the vast bureaucracy ( Q loss of jobs) and most current welfare programs, it might even be an economic wash.
Should be appealing to the Left and the Right.
4. Global, but national corporation versus national governments. Latest example of France objecting to GE buying French high tech company. Also US drug company trying to buy UK company and change domicile to UK or Ireland to reduce corporate taxes. Nationalism, local jobs, taxation-- complex mix for global corporations and governments.
Friday, May 30, 2014
Friday, April 11, 2014
Afghanistan
Maybe you can help me with the following questions:
1. After 12years of fighting , and our multi- billion dollars of infrastructure building and military training etc etc, can the Taliban really be " poised "to take over the country when we leave this year?
2. Where does the Taliban get its money, weapons and military training?
How can it possibly match what we have done and what we have provided " our" Afghans?
3. In addition we are told that polls show that more than 85% of Afghans hate the Taliban ( not to mention how they would treat women), so where is the large scale public support for a Taliban takeover of the country?
4. Finally I've always wondered why our Afghans are so much worse fighters than the Taliban Afghans?
I never understood why our fighters even needed much training since my reading of Afghan history is that Afghans are literally " born with a rifle in their hands". I assume the Taliban has not received sophisticated military training like we have provided. Who would have done the training ?
Suffice it to say that I just don't get what's going on there , and can't believe the Taliban will really take over the country and undo whatever progress , especially for women, has occurred there for over the last decade.
It just makes no sense to me , so maybe you can enlighten me.
Eric
Wednesday, January 29, 2014
Income Mobility in the United States
A new comprehensive, and apparently highly credible, study came out that contrary to conventional belief (another words what we've been told by our politicians and the media) income mobility in the United State has remained the same for the last 40 years.
While this was barely covered in media reports for some reason,and has been generally absent from the political talk show conversations,I noticed that the President in his State of the Union address did modulate his words and referred to economic mobility having "stalled" rather than "declined" which is what I'm sure he would have said before the release of this study.
The conclusion of this study did not fit the narrative of the Left, and indeed some on the Right, who take the position that economic mobility in the US has gotten worse over the years,and was much better in the past.
However, the study did mention that income mobility in the U.S. was behind most developed countries. The study I read didn't go into detail about this issue and I'd like to see if the comparisons are really apples to apples.
I've done a little digging myself and here's an example of how statistics often don't tell the whole story and can be used to distort political points of view.
As mentioned, we hear that income mobility is so much better in other countries, such as Denmark, than in the United States. Put aside the lack of diversity of this small country, and other factors, compared to the US, we are told that income mobility is much better there than here.
However what does that mean? Consider the following information I came across from a reliable source:
A Danish family can move from the 10th percentile to the 90th percentile with $45,000 of additional earnings, while an American family would need an additional $93,000 to move from the bottom to the top.
As best as I can tell both countries have similar costs of living.
If so, who is better off; a Dane who's income has gone up $45,000, thus moving her into the top from the bottom percentile; or an American whose income went up twice as much as the Dane's ($90,000), but went up from the bottom to only the second highest percentile?
Those who deprecate US economic mobility would say the Dane is better off. I don't think that Dane would agree; she'd rather have the increased income the American got, I assume.
However, as I've often said statistics can be misleading , so where did I go wrong here?
Friday, January 17, 2014
Too Big to Jail?
This is an excerpt from a January 9,2014 New York Review of Books article by Judge Jed S. Rakoff of the Federal District Court in New York on why no high level executives have been prosecuted . It mirrors the points I made in my blog post The Root Causes of the Great Recession- An American Tragedy- Part 1 (posted two years ago). Judge Rakoff is a highly respected liberal jurist.
Among other points, Judge Ratoff concluded as follows ( emphasis added) :
" But a second, and less salutary, reason for not bringing such cases is the government’s own involvement in the underlying circumstances that led to the financial crisis. On the one hand, the government, writ large, had a part in creating the conditions that encouraged the approval of dubious mortgages.
Even before the start of the housing boom, it was the government, in the form of Congress, that repealed the Glass-Steagall Act, thus allowing certain banks that had previously viewed mortgages as a source of interest income to become instead deeply involved in securitizing pools of mortgages in order to obtain the much greater profits available from trading. It was the government, in the form of both the executive and the legislature, that encouraged deregulation, thus weakening the power and oversight not only of the SEC but also of such diverse banking overseers as the Office of Thrift Supervision and the Office of the Comptroller of the Currency, both in the Treasury Department. It was the government, in the form of the Federal Reserve, that kept interest rates low, in part to encourage mortgages.
It was the government, in the form of the executive, that strongly encouraged banks to make loans to individuals with low incomes who might have previously been regarded as too risky to warrant a mortgage. Thus, in the year 2000, HUD Secretary Andrew Cuomo increased to 50 percent the percentage of low-income mortgages that the government-sponsored entities known as Fannie Mae and Freddie Mac were required to purchase, helping to create the conditions that resulted in over half of all mortgages being subprime at the time the housing market began to collapse in 2007.
It was the government, pretty much across the board, that acquiesced in the ever-greater tendency not to require meaningful documentation as a condition of obtaining a mortgage, often preempting in this regard state regulations designed to assure greater mortgage quality and a borrower’s ability to repay. Indeed, in the year 2000, the Office of Thrift Supervision, having just finished a successful campaign to preempt state regulation of thrift underwriting, terminated its own underwriting regulations entirely. The result of all this was the mortgages that later became known as “liars’ loans.” They were increasingly risky; but what did the banks care, since they were making their money from the securitizations. And what did the government care, since it was helping to create a boom in the economy and helping voters to realize their dream of owning a home?
Moreover, the government was also deeply enmeshed in the aftermath of the financial crisis. It was the government that proposed the shotgun marriages of, among others, Bank of America with Merrill Lynch, and of J.P. Morgan with Bear Stearns. If, in the process, mistakes were made and liabilities not disclosed, was it not partly the government’s fault? One does not necessarily have to adopt the view of Neil Barofsky, former special inspector general in charge of oversight of TARP, that regulators made almost no effort to hold accountable the financial institutions they were bailing out, to wonder whether the government, having helped create the conditions that led to the seeming widespread fraud in the mortgage-backed securities market, was all too ready to forgive its alleged perpetrators.
Please do not misunderstand me. I am not suggesting that the government knowingly participated in any of the fraudulent practices alleged by the Financial Inquiry Crisis Commission and others. But what I am suggesting is that the government was deeply involved, from beginning to end, in helping create the conditions that could lead to such fraud, and that this would give a prudent prosecutor pause in deciding whether to indict a CEO who might, with some justice, claim that he was only doing what he fairly believed the government wanted him to do."
Eric
Among other points, Judge Ratoff concluded as follows ( emphasis added) :
" But a second, and less salutary, reason for not bringing such cases is the government’s own involvement in the underlying circumstances that led to the financial crisis. On the one hand, the government, writ large, had a part in creating the conditions that encouraged the approval of dubious mortgages.
Even before the start of the housing boom, it was the government, in the form of Congress, that repealed the Glass-Steagall Act, thus allowing certain banks that had previously viewed mortgages as a source of interest income to become instead deeply involved in securitizing pools of mortgages in order to obtain the much greater profits available from trading. It was the government, in the form of both the executive and the legislature, that encouraged deregulation, thus weakening the power and oversight not only of the SEC but also of such diverse banking overseers as the Office of Thrift Supervision and the Office of the Comptroller of the Currency, both in the Treasury Department. It was the government, in the form of the Federal Reserve, that kept interest rates low, in part to encourage mortgages.
It was the government, in the form of the executive, that strongly encouraged banks to make loans to individuals with low incomes who might have previously been regarded as too risky to warrant a mortgage. Thus, in the year 2000, HUD Secretary Andrew Cuomo increased to 50 percent the percentage of low-income mortgages that the government-sponsored entities known as Fannie Mae and Freddie Mac were required to purchase, helping to create the conditions that resulted in over half of all mortgages being subprime at the time the housing market began to collapse in 2007.
It was the government, pretty much across the board, that acquiesced in the ever-greater tendency not to require meaningful documentation as a condition of obtaining a mortgage, often preempting in this regard state regulations designed to assure greater mortgage quality and a borrower’s ability to repay. Indeed, in the year 2000, the Office of Thrift Supervision, having just finished a successful campaign to preempt state regulation of thrift underwriting, terminated its own underwriting regulations entirely. The result of all this was the mortgages that later became known as “liars’ loans.” They were increasingly risky; but what did the banks care, since they were making their money from the securitizations. And what did the government care, since it was helping to create a boom in the economy and helping voters to realize their dream of owning a home?
Moreover, the government was also deeply enmeshed in the aftermath of the financial crisis. It was the government that proposed the shotgun marriages of, among others, Bank of America with Merrill Lynch, and of J.P. Morgan with Bear Stearns. If, in the process, mistakes were made and liabilities not disclosed, was it not partly the government’s fault? One does not necessarily have to adopt the view of Neil Barofsky, former special inspector general in charge of oversight of TARP, that regulators made almost no effort to hold accountable the financial institutions they were bailing out, to wonder whether the government, having helped create the conditions that led to the seeming widespread fraud in the mortgage-backed securities market, was all too ready to forgive its alleged perpetrators.
Please do not misunderstand me. I am not suggesting that the government knowingly participated in any of the fraudulent practices alleged by the Financial Inquiry Crisis Commission and others. But what I am suggesting is that the government was deeply involved, from beginning to end, in helping create the conditions that could lead to such fraud, and that this would give a prudent prosecutor pause in deciding whether to indict a CEO who might, with some justice, claim that he was only doing what he fairly believed the government wanted him to do."
Eric
Wednesday, December 11, 2013
The Ed Show ?
I just watched the Ed Show show yesterday on the day the government sold its last block of stock in GM. He was praising the auto industry "loan" from the government and how successful that turned out and never referred to it as a bailout .
While I agreed with what the government did with the auto industry , why did Ed keep referring to that action as a "loan" rather than a bailout. Ed always refers to what was done for the banks as a "bailout ".
Both actions were the same. However characterizing one as a loan, is benign; the other, as a bailout, is evil.
The banks repaid all their loans/bailouts with a $40 Billion Dollar plus profit to the taxpayers. The auto industry loans/bailouts resulted in an acceptable $10 Billion Dollar loss.
By the way, the banks employ many more workers than the auto industry.
Why the disparate treatment by Ed ?
Just saying.
Eric
While I agreed with what the government did with the auto industry , why did Ed keep referring to that action as a "loan" rather than a bailout. Ed always refers to what was done for the banks as a "bailout ".
Both actions were the same. However characterizing one as a loan, is benign; the other, as a bailout, is evil.
The banks repaid all their loans/bailouts with a $40 Billion Dollar plus profit to the taxpayers. The auto industry loans/bailouts resulted in an acceptable $10 Billion Dollar loss.
By the way, the banks employ many more workers than the auto industry.
Just saying.
Eric
Tuesday, May 14, 2013
NRA & SDS
Based on what I heard as a young man of the 60s from the SDS and other left wing radicals , it appears to me that the leadership and extreme supporters of the NRA also hate America. The anti -US and anti- military rhetoric of the NRA borders on the kind of thing that was called treasonous as applied to radicals by conservatives and others back then.
The term "love it or leave it" was popular then , and easily applies as a response to the kind of stuff we hear from the NRA leaders and their extreme followers today about America.
While they clearly hate Obama and the democrats, they aren't so happy with Bush and the republicans either. These zealots apparently do not trust the police or the military to protect us . In truth , they seem to view the government as more of a threat to their safety than criminals !
I know they would differentiate between the country and the government , but what is a country if not it's elected government ?
They are no less revolutionaries than the SDS or other radical groups of the 60s and 70s that I witnessed. Those radicals also "loved" the country but "hated" the government. They were attacked as being disloyal by the media and the politicians . Why aren't these right wing radicals treated the same way?
Eric
The term "love it or leave it" was popular then , and easily applies as a response to the kind of stuff we hear from the NRA leaders and their extreme followers today about America.
While they clearly hate Obama and the democrats, they aren't so happy with Bush and the republicans either. These zealots apparently do not trust the police or the military to protect us . In truth , they seem to view the government as more of a threat to their safety than criminals !
I know they would differentiate between the country and the government , but what is a country if not it's elected government ?
They are no less revolutionaries than the SDS or other radical groups of the 60s and 70s that I witnessed. Those radicals also "loved" the country but "hated" the government. They were attacked as being disloyal by the media and the politicians . Why aren't these right wing radicals treated the same way?
Eric
Monday, May 6, 2013
Higher Education Opportunity Myth
There is a pervasive myth, mostly in progressive media, but also accepted in the mainstream, that higher education opportunities in America are getting worse for minorities, and lower and middle classes students, than what they used to be .
The mantra is that the "level playing field" in higher education was better in the past then now.
I think not. Memories appear to have faded, but not mine.
When I went to college in the 60s and 70s, the "unlevel playing field" was much worse then it is today.
First of all, there was no such thing as diversity or affirmative action, and, outright discrimination still existed. At elite schools, the "greased skids", "old boys network" still predominated.
There were few African Americans, Hispanics, Asians, or even Women, at elite schools. In fact there were still thought to be quotas for Jews, at least unofficially, at many such schools, including Northwestern. Even good, but not elite schools, had few minorities.
Women did have their own restricted "separate, but equal" elite schools - with few, if any, African Americans, Hispanics, Asians and a limited number of Jews.
Here's an example from personal experience how the traditional elites were more advantaged then than now. My Dad was a high school math teacher, so while we didn't have a lot of money, education was always a priority for my sister and me. We went to Proviso East High School in Maywood , Illinois, a racially mixed , working class suburb of Chicago.
It's long story, but I began dating a girl from New Trier High School, a highly regarded pubic high school in one of Chicago's wealthiest old line North Shore suburbs. It was our senior year in high school and she told me that 33 boys in her class were going to Harvard, with a proportionate number going to the other Ivies and girls to the Seven Sisters.
I now live in that school district , and I know that if 3 or 4 ( boys and girls) go to Harvard a year from New Trier , that's a lot. While it's true family connections and support are a critical advantage, at least today's well connected kids have to be very smart and accomplished to get into the best schools.
No one from my very racially and economically diverse high school class went to the Ivy League when I was there. Frankly, you never even thought about it. If you wanted to go to college , you went to "The Pier" ( today UIC) or Northern Illinois ; if you were good in math, maybe you thought about IIT; and if you were really smart, you went to the University of Illinois in Champaign.
That was it. I know this because I asked a college guidance counselor at Proviso East about going to an Ivy League school and he just about thought I was out of my mind ( yes, my grades and test scores were good enough). Few students from Proviso East went out of state , let alone to the Ivy League. Of course there was no financial aid to speak of , but it's true costs where a whole lot less. My parents valued education, and my sister and I went out of state to Big Ten schools, but that was rare at Proviso.
Today, top students at Proviso East, and similarly racially diverse schools in low income neighborhoods, are very much in demand by elite colleges across the country, with great financial aid available.
Turning to my own law school experience at Northwestern University School of Law, 1968-71. Out of a class of 150, there were 10 women ( only 1 woman in the class ahead of me), 3 African Americans, 2 Hispanics, no Asians and, in fact, only 3 or 4 Poles and Italians. A group of us liberal law students actually did that analysis.
It's clear that there are many more women, minorities and lower income students in elite schools today than in the not so distant past when I went to school. Nevertheless the myth of the worsening of the level playing field persists and is getting stronger than ever.
Have we gone through a complete collective loss of memory in this country?
Of course things need to improve for minorities and poor and middle class kids, and the cost of higher education is the biggest problem; but that doesn't mean we have to harken to a past that didn't really exist.
Why can't we acknowledge that advances have been made, even if more needs to be done?
Instead we have another example of people talking about the "good old days" that doesn't square with what really went on.
Eric
The mantra is that the "level playing field" in higher education was better in the past then now.
I think not. Memories appear to have faded, but not mine.
When I went to college in the 60s and 70s, the "unlevel playing field" was much worse then it is today.
First of all, there was no such thing as diversity or affirmative action, and, outright discrimination still existed. At elite schools, the "greased skids", "old boys network" still predominated.
There were few African Americans, Hispanics, Asians, or even Women, at elite schools. In fact there were still thought to be quotas for Jews, at least unofficially, at many such schools, including Northwestern. Even good, but not elite schools, had few minorities.
Women did have their own restricted "separate, but equal" elite schools - with few, if any, African Americans, Hispanics, Asians and a limited number of Jews.
Here's an example from personal experience how the traditional elites were more advantaged then than now. My Dad was a high school math teacher, so while we didn't have a lot of money, education was always a priority for my sister and me. We went to Proviso East High School in Maywood , Illinois, a racially mixed , working class suburb of Chicago.
It's long story, but I began dating a girl from New Trier High School, a highly regarded pubic high school in one of Chicago's wealthiest old line North Shore suburbs. It was our senior year in high school and she told me that 33 boys in her class were going to Harvard, with a proportionate number going to the other Ivies and girls to the Seven Sisters.
I now live in that school district , and I know that if 3 or 4 ( boys and girls) go to Harvard a year from New Trier , that's a lot. While it's true family connections and support are a critical advantage, at least today's well connected kids have to be very smart and accomplished to get into the best schools.
No one from my very racially and economically diverse high school class went to the Ivy League when I was there. Frankly, you never even thought about it. If you wanted to go to college , you went to "The Pier" ( today UIC) or Northern Illinois ; if you were good in math, maybe you thought about IIT; and if you were really smart, you went to the University of Illinois in Champaign.
That was it. I know this because I asked a college guidance counselor at Proviso East about going to an Ivy League school and he just about thought I was out of my mind ( yes, my grades and test scores were good enough). Few students from Proviso East went out of state , let alone to the Ivy League. Of course there was no financial aid to speak of , but it's true costs where a whole lot less. My parents valued education, and my sister and I went out of state to Big Ten schools, but that was rare at Proviso.
Today, top students at Proviso East, and similarly racially diverse schools in low income neighborhoods, are very much in demand by elite colleges across the country, with great financial aid available.
Turning to my own law school experience at Northwestern University School of Law, 1968-71. Out of a class of 150, there were 10 women ( only 1 woman in the class ahead of me), 3 African Americans, 2 Hispanics, no Asians and, in fact, only 3 or 4 Poles and Italians. A group of us liberal law students actually did that analysis.
It's clear that there are many more women, minorities and lower income students in elite schools today than in the not so distant past when I went to school. Nevertheless the myth of the worsening of the level playing field persists and is getting stronger than ever.
Have we gone through a complete collective loss of memory in this country?
Of course things need to improve for minorities and poor and middle class kids, and the cost of higher education is the biggest problem; but that doesn't mean we have to harken to a past that didn't really exist.
Why can't we acknowledge that advances have been made, even if more needs to be done?
Instead we have another example of people talking about the "good old days" that doesn't square with what really went on.
Eric
Subscribe to:
Posts (Atom)