I’m taking a semi-day off from blogging. There are some good reads if you can spare the time.
The Austerity Agenda – by Paul Krugman
The bad metaphor — which you’ve surely heard many times — equates the debt problems of a national economy with the debt problems of an individual family. A family that has run up too much debt, the story goes, must tighten its belt. So if Britain, as a whole, has run up too much debt — which it has, although it’s mostly private rather than public debt — shouldn’t it do the same? What’s wrong with this comparison?
The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income.
So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.
Conservative Republicans and unfortunaetly a few Democrats think that running the U.S. government is like running a family budget, or goodness forbid, like running a business.
11 Ways Mitt Romney Shows He is a Clueless Elite. Not all wealthy Americans are as out of touch with the challenges of working class Americans, but Romney and his sycophants certainly are.
Whether he’s telling a group of unemployed workers that he feels their pain because he, too, is unemployed; explaining to the people of Nevada, a crucible of the foreclosure crisis, why foreclosures should be allowed to continue at their current pace; or telling recent college grads to just borrow money from Mom and Dad to start their own businesses, Mitt Romney, together with his wife, Ann, demonstrates the hubris of a certain kind of multimillionaire: the kind who think it is the job of the rabble to preserve the rich man’s wealth, even if it comes at the rabble’s own expense. After all, that’s just the ever-virtuous free market at work.
Romney has never competed in the free market. That is not hyperbole, it is simple fact. Joseph E. Stiglitz’ gets into what Romney and a large part of the U.S. economy has become – rent seekers, or corporate socialists if you will, The One Percent
The “Rent Seeking” Problem
Here I need to resort to a bit of economic jargon. The word “rent” was originally used, and still is, to describe what someone received for the use of a piece of his land—it’s the return obtained by virtue of ownership, and not because of anything one actually does or produces. This stands in contrast to “wages,” for example, which connotes compensation for the labor that workers provide. The term “rent” was eventually extended to include monopoly profits—the income that one receives simply from the control of a monopoly. In time, the meaning was expanded still further to include the returns on other kinds of ownership claims. If the government gave a company the exclusive right to import a certain amount of a certain good, such as sugar, then the extra return was called a “quota rent.” The acquisition of rights to mine or drill produces a form of rent. So does preferential tax treatment for special interests. In a broad sense, “rent seeking” defines many of the ways by which our current political process helps the rich at the expense of everyone else, including transfers and subsidies from the government, laws that make the marketplace less competitive, laws that allow C.E.O.’s to take a disproportionate share of corporate revenue (though Dodd-Frank has made matters better by requiring a non-binding shareholder vote on compensation at least once every three years), and laws that permit corporations to make profits as they degrade the environment.
The magnitude of “rent seeking” in our economy, while hard to quantify, is clearly enormous. Individuals and corporations that excel at rent seeking are handsomely rewarded. The financial industry, which now largely functions as a market in speculation rather than a tool for promoting true economic productivity, is the rent-seeking sector par excellence. Rent seeking goes beyond speculation. The financial sector also gets rents out of its domination of the means of payment—the exorbitant credit- and debit-card fees and also the less well-known fees charged to merchants and passed on, eventually, to consumers. The money it siphons from poor and middle-class Americans through predatory lending practices can be thought of as rents. In recent years, the financial sector has accounted for some 40 percent of all corporate profits. This does not mean that its social contribution sneaks into the plus column, or comes even close. The crisis showed how it could wreak havoc on the economy. In a rent-seeking economy such as ours has become, private returns and social returns are badly out of whack.
In their simplest form, rents are nothing more than re-distributions from one part of society to the rent seekers. Much of the inequality in our economy has been the result of rent seeking, because, to a significant degree, rent seeking re-distributes money from those at the bottom to those at the top.
But there is a broader economic consequence: the fight to acquire rents is at best a zero-sum activity. Rent seeking makes nothing grow. Efforts are directed toward getting a larger share of the pie rather than increasing the size of the pie. But it’s worse than that: rent seeking distorts resource allocations and makes the economy weaker. It is a centripetal force: the rewards of rent seeking become so outsize that more and more energy is directed toward it, at the expense of everything else. Countries rich in natural resources are infamous for rent-seeking activities. It’s far easier to get rich in these places by getting access to resources at favorable terms than by producing goods or services that benefit people and increase productivity. That’s why these economies have done so badly, in spite of their seeming wealth. It’s easy to scoff and say: We’re not Nigeria, we’re not Congo. But the rent-seeking dynamic is the same.
If you only have time to read one article to day make Stiglitz the one.
Scott Brown’s(R-MA) sexist slime against Elizabeth Warren. If your parents ever told you something in good faith and repeat it, that is the new hip reason that you can never run for public office. So hire a detective to double check everything your parents ever said so you can run for Senate against sleaze bags like Scott Chameleon Brown(R-MA).
Further, employers are currently bound by Title VII, which prohibits discrimination in pay or benefits on the basis of sex. The Equal Employment Opportunity Commission has determined that when a religious organization denies benefits to women, that constitutes sex discrimination. And it determined in a ruling in 2000 that it is discriminatory to exclude contraceptives when other prescription drugs and preventive services are provided as health benefits by an employer.
Politico’s managing editor is a conservative hatchet man. Why anyone sees that site a bipartisan is amazing. Five Points About Politico’s Hatchet Job On NYT and WaPo
Here’s the piece, published this morning. The upshot: The political coverage of The New York Times and The Washington Post is “blatantly biased” in their vetting of Romney versus Obama. (Guess which way they supposedly lean.) Sample paragraph: “Republicans cry ‘bias’ so often it feels like a campaign theme. It is, largely because it fires up conservatives and diminishes the punch of legitimate investigative or narrative journalism. But it also is because it often rings true…” The evidence: The Times wrote a mean story about Ann Romney’s equestrian hobby! And The Post wrote a mean story about Mitt Romney’s teenage bullying of a maybe-gay kid! And they both ignored all those juicy weed-smoking details from the new David Maraniss biography! (Never mind that Maraniss works for the Post, and the Times did cover it…) GOP operatives smell bias, and goshdarnit, they’re right!
Conservative Republicans are like some goofball golfer in a comic movie. They have bag of favorite clubs. When things are going terribly wrong they reach for the wood mallet, the leaf blower, the rubber duck wedge or their favorite club – the media bias club. It is the same tiresome drivel over and over again in a media world dominated by right-of-center Village mentality.