Monday, December 2, 2013

The Pope Is Not Fooled

Apartments in a new luxury residential tower off Central Park in New York City sell for $53 million and UP.  Who buys these?  I suspect many buyers grabbed their income from gambling in financial markets.  Some of these are the people who contributed to the financial crisis, and they are doing it again.  Some say we can't tax them because they provide jobs.  Sure for the maids who clean their toilets.  The Pope is not fooled, he does not believe in trickle-down. Rather Francis asks
"How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?"

Train Wreck

A passenger train derailed coming into New York City.  Too fast around the curve, they say.  Why are we not building safe high-speed trans-national trains and road beds?  Can't afford it say the putative wise.  But, we have labor and machines unused, say I.

Youth Unemployment

6.7 million young people who are between the ages of 18 and 24 are out of school and unemployed.  After WW II, the US graduated a higher proportion of teenagers than any other nation. "As of 2011, it ranked eighteenth out of twenty-four wealthy nations." (Harpers, Dec 2013)  This is a tragedy, a waste, and a source of crime and unhappy, unstructured lives.   The lost wealth is in the trillions.
       What could be done?  In 1993, AmeriCorps put youth to work in community service.  YouthBuild provided construction jobs in building affordable housing while the young people completed a GED.  But these programs are being cut back in the name of austerity!
       They should be expanded. Finance them with zero-interest public debt--the Treasury could borrow from the Federal Reserve Bank who now thinks they are stimulating the economy by buying bonds, etc. at the rate of $85 billion per month. No austerity for the rich!

Thursday, November 28, 2013

There is Another Way

Forty percent of domestic lending in Brazil is by three Federal government banks, including the Federal Government Savings Bank.  The Banco National de Desenvolvimento Economica loans for roads transport, and mining. Brazil has been growing rapidly.
The US should be building things like transnational high-speed trains and electric grids to put people to work, especially our youths.
Let's replace TINA with TIAW.

Monday, November 18, 2013

Cash for Clunkers

" Economist Alan Blinder helped popularize the idea of a scrappage program, and the moniker "cash for clunkers", with his July 2008 op-ed piece in the New York Times. Blinder argued that a cash-for-clunkers program would have a tripartite purpose of helping the environment, stimulating the economy, and reducing economic inequality." (From Wikipedia)

This was a good idea, but there was inadequate appropriation in 2009.  Put money into the economy by buying something that lots of people have.  Even better would be to buy labor from the unemployed to build infrastructure.  How about a high-speed rail line across the country? Instead now the FED buys bonds to help the banks, and the no-nothings want to reduce government spending in favor of austerity.

Friday, November 15, 2013

The End of Normal

James Galbraith in a lecture at Michigan State University this week argues that after the recent financial crisis, the economy cannot return to the old normal.  The economy will not recover on its own and public policies seem inadequate.  He calls the period 1940-70 a Golden Age.  The recovery lasted until another crisis in 1980 in Russia and Asia.  The rich gained at the expense of the poor.  A pseudo-golden age unfolded after 2001 until the disaster of 2007.
     What is different now that makes return to normal doubtful?  Changing geo-physics.  While fracking and natural gas offer some respite, energy costs are multiples higher than before.  Our military power seems unlikely to insure stability as witnessed by Iraq and Afghanistan. The picture is clouded by climate change and rising coastal flooding already in train. Technological change is making people redundant--we simply do not need as many.
      Much of our apparent growth was in the financial sector as almost everything of value over time was turned into an immediate source of great profits for traders and banks--accounts receivable was a historic transformation now dwarfed by life insurance premuims, mortgage payments, derivatives, etc.  Of course, the growth of the financial sector has led to grossly unequal wealth.
     Galbraith argues that a change in thinking and expectations is is order to avoid the violence exhibited by Greece as people protest austerity.  How will we learn to live with slow growth?
More in future posts. I would like to hear ideas from my readers.

Student Loans

The banking lobby obtained a provision of the law that makes repudiation of a student loan impossible no matter what.  The student may go blind and unable to work, but they still owe the bank.

What Hapened to Democracy

Obama's nominee for the Appeals Court blocked by Republican filibuster, the third in two weeks.  Why do we allow this anti-democratic rule by a long-winded minority?

A poll shows that a majority of Americans believe that global warming is  happening and that humans are the problem.  Will that prevent a minority of no-nothings represented by a majority of House members from blocking action?  NO.  Jerry-rigged House districts rule.

Sunday, November 10, 2013

Minimum Wage again

The following from Robert Reich, with whom I agree completely"
"The President agrees that the minimum wage should be raised to $10.40 an hour but, unsurprisingly, Republicans oppose any increase. In this as in many other dimensions, the conservative mind is remarkably flexible. The minimum wage must not be increased, they say, lest employers lay off millions of low-wage workers. But record levels of CEO pay must not be tampered with because corporations need to attract top talent. The poor must have less if they are to be adequately motivated, but the rich must have more in order to ensure their maximum effort. Food stamps and unemployment insurance must be curtailed to prevent laziness among the needy, yet special tax loopholes that subsidize the wealthy (such as "carried interest" for private-equity and hedge-fund partners) must be retained. The 22 percent of American children now in poverty don't merit free school lunches or health care, but it is necessary and just that the richest 1 percent of children receive $10 million free of estate taxes."

The Nanny State?

The FDA is considering phasing out trans fats as already banned by New York City, Philadelphia, and the state of California.  Rush Limbaugh groused that bureaucrats shouldn't regulate what people eat because it's none of their business. The no-nothings are crying about the "nanny state" that takes away freedom.  Whenever I hear the word "freedom" I ask whose freedom are we talking about.  I know that freedom for the pike is often death for the minnow.  The nanny state argument claims that if people want to eat unhealthily, it only harms consumers of hydrogenated oils.  NOT TRUE.  If peoples' diets make them unhealthy it raises the health insurance rates for everyone.  Further, if the people are on Medicare, it raises taxes to support their care. 
     Finally, some people know their weaknesses and call on the state to help them out in moments of weakness.  If they doubt their own resolve, they may favor prohibiting some foods that promise to taste good, but are unhealthy.  Of course, their freedom to be free of temptation is at the expense of those with dietary fortitude.  Alas, not everyone can be free if interests conflict.

Tuesday, November 5, 2013

Global Warming

After reviewing the evidence, Paul Krugman despairs of meaningful policy--
"there's  a strong streak in modern American conservatism that rejects not just climate science, but the scientific method in general.  Polling suggests, for example, that a large majority of Republicans reject the theory of evolution.  For people with this mind-set, laying out the extent of scientific consensus on an issue isn't persuasive --if anything, it just gets their backs up, and feeds fantasies about vast egghead conspiricies." New York Review of Books, Nov. 17, 2013
     Is this the way our world ends?

Tuesday, October 22, 2013

Bird Brains

Chickens and geese have more brains that we have given them credit for and more than some members of Congress who care little for the less fortunate.  This from Nicholas Kristof--
"The nobility of geese was most on display at execution time.  My job as an 11-year-old when we beheaded the geese was to capture a bird and take it to the chopping block as my dad wielded the ax. So I would rush at the terrified flock and randomly grab an unlucky goose.  The bird in my arms would honk in terror and try to escape, and the other geese would cower in the corner of the barn.
       Then one goose would emerge from the flock and walk tremulously toward me, terrified but unwilling to abandon its mate.  It would waddle after me toward the chopping block, trying to honk comfort to its mate."  NYT Oct. 20, 2013

Wednesday, October 16, 2013

Drug Prices

My sense of moral outrage is being sorely tested.  While Congress is obsessed with the size of the Federal budget, the drug companies are stealing us blind.  Drug company lobbyists spend more than the defense industry. And what do they get for their money? Plenty!  Lawmakers have forbidden Medicare from negotiating drug prices.  The ”US Patient Centered  Outcomes Research Institute is not allowed to consider cost-effectiveness comparisons in its recommendations.” NYT October 13, 2013.  Importing drugs from other countries is prohibited even though they are much, much cheaper.

Tuesday, October 1, 2013

Democracy Shutdown

So you think you live in a democracy of majority rule.  Wrong!  You are ruled by a radical minority of ideologues who not interested in consequences.  The NYT and NPR estimate that if the Senate bill were brought to the floor of the House, it would pass with a combination of Republican and Democratic votes.  But the leadership fears for their jobs and will not bring it to a vote.

Monday, September 23, 2013

Osama bin Laden

May 2, 2011, the US killed Osama bin Laden, President Obama's top priority. The US has a tendency to believe that one leader is responsible and if he can be killed, the terrorist threats would be eliminated.  Instead bin Laden's assassination created  even more hatred and zeal in terrorists groups and now there are dozens all around the world.  

Thursday, September 19, 2013

Minimum Wage

Your hamburgers are too cheap.  Workers in fast-food restaurants are not paid a living wage.  The minimum wage should be increased to at least $10.  Opponents say that a higher minimum wage will result in higher priced burgers, etc.  Well, isn't that the point? 

Wednesday, September 18, 2013

Repo Man

Money market mutual funds, which many regard as safe investments, lend cash to banks, brokerage firms and asset managers for one day at a time.  The next day by mutual consent, the loans are turned over.  The "repo market" is a huge $4.6 trillion.  Everything is cool until it's not.  Using short term borrowing to cover long term investments such as mortgages is inherently vulnerable to changes in expectations.  If one party becomes nervous and does not renew, the market collapses as it did for Lehman and Bear Sterns five years ago.
Sorry, but markets are not automatic and wonderful.

(For background see NYT, Sept. 13, 2013.


I think Thomas Freidman has it right.
"Many Americans also understood that when it came to our record in the Arab/Muslim world since 9/11, we were 0 for 3. Afghanistan seems headed for failure; whatever happens in Iraq, it was overpaid for; and Libya saw a tyrant replaced by tribal wars. I also think a lot of people look at the rebels in Syria and hear too few people who sound like Nelson Mandela — that is, people fighting for the right to be equal citizens, not just for the triumph of their sect or Shariah."

Saturday, September 14, 2013

Accountants must act in public interest in Britain.

A British court ruled that accountants must act in the public interest rather than helping merger raiders from pocketing a large part of the assets of firms going bankrupt. NYT Sept. 12, 2013
Sometimes good sense rules.

Monday, September 9, 2013


Johnny Cash sings a song in which he says “St. Peter don’t you call me, ‘cause I can’t go, I owe my soul to the company store.”  This thought now dominates popular thinking .  But why is it that jobs depend on capitalists any more than returns to capital depend on labor?  Did you ever try to build something with only dollar bills?  Confusion on this point leads to local governments subsidizing companies to locate in their jurisdictions to the extent that taxpayers give back much of their wages in taxes. And then they bitch about taxes.
It leads to Congressional representatives objecting to reduced military spending and base closing because it reduces local employment.  But the money would be spent for other goods providing equal employment.  Instead of subsidizing military production, we should help employers and employees by sharing the costs of transition.  Contrary to much economic thinking, reallocation of labor and capital is not costless and if it is not shared, political action freezes assets in old lines of production.

Sunday, September 1, 2013


Congressional Gridlock is not so bad.  There would be none if Romney were President with a Republican Congress.  But can you imagine the havoc that would create?

Saturday, August 31, 2013

To understand

"To understand the world, is to understand what in it is capable of being transformed." 
Bertold Brecht

I wonder what can be transformed today.

Thursday, August 29, 2013

Serves 'em right

A Texas mega-church is linked to 21 cases of measles.  Eleven of 16 people with measles were not vaccinated. Anti-science practice has consequences.

Sunday, August 25, 2013

Omnipotent Secret Medelsome America

On the 60th anniversary of the 1953 military coup in Iran that overthrew the democratically elected government of radical nationalist Mohammad Mossadegh, the US has declassified documents detailing how the CIA’s secret operation brought the country’s Shah back to power.  Mossadegh had the temerity to nationalize Iranian oil.
This episode is relevant to today's clamor over individuals spilling of government secret documents.

Saturday, August 24, 2013

It's All About Money

"Bill Clinton earned $17 million last year giving speeches, including one to a Lagos (Nigeria) company for $700,000.  Hillary gets $200,000 a speech."
This is a contrast in moral values with previous presidents.
"Until Harry Truman wrote his memoirs, the ex-president struggled on an Army pension of $112.50 a month."  He said, "I could never lend myself to any transaction, however, respectable that would commercialize on the prestige and dignity of the office of the presidency."
NYT August 18, 2013.
I long for the old school values.

Wednesday, August 21, 2013

American Universities Future

I want to share this important essay:
The Future of American Universities by Larry Busch, MSU Dept of Sociology,
21 August 2013
It is my conviction that universities as we have known them for centuries are undergoing a radical transformation. Gradually, but surely, the very notion that faculty are intellectuals who follow their consciences in educating students and in the search for new knowledge is being undermined. To my mind, although the reviewers are certainly right on some details, they have completely capitulated to this transformation of the university. Let me explain:
1. New Public Management has become the norm at public universities. (If you are not familiar with the term, I suggest that you read up on it.) Instead of allowing disciplinary units to determine what counts as scholarship, we are being forced to accept 'objective' measures such as number of publications, number of citations, journal impact factors, number of grant dollars received, and other criteria. Ironically, these measures are so badly constructed that a student proposing to use them to study research quality would be the laughing stock of any statistics deparment. Moreover, NPM is based on the assumptions of Public Choice Theory which assumes that we are all social isolates and that anyone working in a setting in which markets and competitions are not central is likely goofing off. Imposing these measures shifts the kinds of research that gets done and quietly supresses most critical research. It is aided by the growing acceptance of grant activity as a measure of quality, forgetting that many topics neither require nor need grant money. Those topics are being gradually moved off the agenda. (Please remember that I say this as a faculty member who, with my colleagues, has obtained ~$30 million in extramural grants over my career.)
2. There is more and more pressure to standardize undergraduate and graduate education. (Much to my amazement, the College of Arts and Letters is standardizing its introductory courses so that all faculty will use the same textbook. This will allow comparison of 'effectiveness' across faculty members!) Both grads and undergrads are to be moved as rapidly as possible through the assembly line of education so as to improve efficiency. Remember that our department has long had an international focus. Many of our best students have taken quite a bit of time to complete their degrees because they spent a year or more in the field gathering data. Of course, it should be obvious that pressure to move students quickly through the system is also tantamount to encouraging a decline in quality (although those pushing for it would not admit that).
3. On the grounds of greater efficiency and cost cutting, the proportion of faculty in tenure track positions is declining.Those who are not in tenure track positions are faced with living vulnerable lives at the whim of the university. They are also miserably paid for what they do. Some politicians have already called for doing away with tenure; others will follow. In Britain, they have already done that.
4. A consequence of growing marketization and competition is growing bureaucracy. Despite endless propaganda about the efficiency of markets and competitions, each time one establishes a market or competition, one must also establish a bureaucracy to monitor, develop measures, check on those who will undoubtedly attempt to game the system, etc. Hence, the volume of forms, memos, requirements, measures, and consequently the number of administrators is rising. The US education department has collected numbers that are astonishing.(Think of this as a new version of the Wizard of Oz, in which we are all told not to pay any attention to that fellow behind the curtain.)
5. Students are becoming 'individualized' by virtue of huge loans that MUST be repaid regardless of circumstances, requiring them to work during the semester -- when they should be studying and learning -- to minimize the size of those loans. They are also being forced by the loans into believing that college is all about maximizing future earnings, one's human capital. The idea that college education is also about citizenship and knowing onesself  is receding.
What to do about all this is not entirely clear. But there are certainly some things that can be done. Each of us can get up to date on how higher education is changing. (To put that in sociological terms, we can each learn how certain powerful groups are changing social structures to meet their desires, while screwing the rest of us.) We can also begin to consider how to develop new forms of social solidarity with colleagues in other disciplines (we are sociologists! Remember?) and, when appropriate resist. And, we can help students to understand how these changes affect them and what they might do about it.

Tuesday, August 13, 2013

Class Warfare

Whenever anyone calls attention to extremely unequal income distribution, the radical right screams "class warfare" as if the label should stop all further discussion. But in fact, there is class warfare by some of the rich on the poor and middle class.  The attack on unions and the call for much less government spending and austerity is a cover for getting rid of anything that helps the less fortunate.  These  rich simply want the poor to disappear--certainly not vote.  The rich can provide for their own good life.  It reminds me of the aphorism, "One for all and one for all" said the elephant as he danced among the chickens!

Wednesday, August 7, 2013

Austerity Superstition

“Small and medium-sized enterprises in many countries, which are the engines of employment, are starved of credit. The prospects in the countries on the periphery of a reduction in today’s record-level unemployment are bleak. These countries face a lost decade of economic progress that will trap tens of millions of people in misery.”

“the E.C.B. will discover that just pumping in liquidity will not suffice to prevent economic conditions from getting worse.”
says William R. Rhodes, former senior vice chairman of Citigroup
Rhodes is correct.  This bleak picture does not need to be. The European Central Bank (and the Federal Reserve) could make loans to the treasuries of sovereign nations that they could use to employ the unemployed to construct much needed infrastructure.  This would increase consumer demand for products of the economy.  It is only myth and superstition that prevent governments from seeing the obvious.  Austerity is absurd.

Monday, August 5, 2013

Quest for Land & Fortune

The Quest for Land & Fortune, a work of narrative nonfiction, by Alfred Allan Schmid, traces the great themes of the American experience through five generations of actual interconnected families whose patriarchs and their intrepid wives could never be satisfied with the status quo. Whether led by their ideals or propelled by the yearning for more land or greater fortunes, these immigrants and plantation owners, Unionists and Rebels, agrarians and industrialists shaped their emerging nation even as they were shaped by seemingly greater forces.

Available on line at

Tuesday, July 23, 2013

Vain Glory in South Africa

The disease of vain glory is in all countries.  In 1999, the South African ruling party the African national Congress, wanted to be a player in African politics.  To do that they needed a military--an army air force and navy.  It involved US$ 4.8 billion for purchase of weaponry Included was 28 fighter jets from Sweden at a cost of US$65 million per plane.  The manufacturer donated money to an industrial school, but it was alleged that the money went to politicians and to the ANC to finance election campaigns.  (see Wikipedia South African Arms Deal)
    This military expenditure would have financed a lot of housing for the poor.  The poor rioted and drove President Mbeki out of office for not delivering promised aid. The irony of it is that their anger focused on Mbeki and not on the folly of huge military expenditures.  Zuma exploited their anger and  became President where he is in office today.    Zuma excited voters with a song that featured arms to get a redistribution of wealth.  Mostly it was redistritbution to a different set of polititions.

Goldman Exploits

Goldman Sachs exploits pricing regulations set up by an overseas commodities exchange to make billions.  There are 27 industrial warehouses in Detroit and each day trucks shuffled aluminum between warehouses to fulfill the letter of the regulations.  This increases storage costs and consumers thus pay higher prices.  (NYT July 21 2013)
    Never have such brilliant people put their smarts to work for evil.  It is complex thievery, but thievery nevertheless.

Thursday, July 18, 2013


 Civilization depends on self-restraint, an idea forgotten by CEOs who give themselves obscene salaries and Republican Congressmen who use the filibuster frequently.

Saturday, June 15, 2013

Hypocrisy again

The Republican majority says they want smaller government, but they are ready to pass a huge military budget that prohibits any closing of unnecessary military bases.  Every Congressman wants to protect spending in their district.  They understand that government spending is good for employment, but they don't get it as they sequester spending for everything else.  I do not understand how Guantanamo prison is necessary for national defense--pure symbolism.


Why does the Republian majority vote huge subsidies for rich farmers and cut food aid to the poor?

Sunday, May 12, 2013

Spy who came in from the cold

John LeCarre comparing today's undercover operations with those when he wrote his famous spy novel:
"Today, the same man, with better teeth and hair and a much smarter suit, can be heard explaining away the catastrophic  illegal war in Iraq , or justifying medieval torture techniques as the preferred means of interrogation in the twenty-first century, or defending the inalienable right of closet psychopaths to bear semiautomatic weapons, and the use of unmanned drones as-a risk-free method of assassinating one's perceived enemies and anybody who has the bad luck to be standing near them. Or, as a loyal servant of his corporation, assuring us that smoking is harmless to the health of the Third World, and great banks are there to serve the public."
      We have not learned a thing!  LeCarre asks, "How far can we go in the rightful defense of our Western values without abandoning them along the way?