News and Old

Economics: Poll on Where to Cut Federal Spending

2012-03-05T11:10:00.002-08:00

For more, see Obama's 2013 Budget: Bad Deficit Reduction, Good Politics by Derek Thompson, February 14, 2012 at The Atlantic.

Society: Foxconn "Sweatshops"

2012-03-05T11:09:00.003-08:00

By a man who grew up in China ...

My aunt worked several years in what Americans call sweat shops. It was hard work. Long hours, small wage, poor working conditions. Do you know what my aunt did before she worked in one of these factories? She was a prostitute.

The idea of working in a sweat shop compared to that old lifestyle is an improvement, in my opinion. I know that my aunt would rather be exploited by an evil capitalist boss for a couple of dollars than have her body be exploited by several men for pennies.

If Americans truly care about Asian welfare, they would know that shutting down sweat shops would force many of us to return to rural regions and return to truly despicable jobs. And I fear that forcing factories to pay higher wages would mean they hire FEWER workers, not more.

For more, see What Cameras Inside Foxconn Found by David Pogue, February 23, 2012 at Pogue's Posts.

Mind: Rich People More Likely to Lie and Cheat

2012-03-03T17:43:00.000-08:00

... researchers now find that people in the upper crust may be more likely to engage in lying, cheating and other kinds of unethical activity than those in lower classes.

In two tests conducted in a natural setting, scientists examined a simple example of unethical behavior on the road — how likely it would be for drivers in the San Francisco Bay Area to cut in front of other vehicles at a busy four-way intersection and cut off pedestrians at a crosswalk. They estimated the social class of drivers based on vehicle make, age and appearance, and discovered that drivers of upper-class cars cut off other cars and pedestrians more often.
Four lab tests that included undergraduates at Berkeley and national online samples of adults revealed those who considered themselves upper class had greater tendencies to make unethical decisions. This included unrightfully stealing something, lying in a negotiation, cheating at a game of chance to boost their chances of winning cash or endorsing unethical behavior at work, such as stealing cash, receiving bribes and overcharging customers.

Another lab experiment revealed that unethical behavior was not necessarily inherent to individuals. The researchers had volunteers compare themselves with people with the most or least money, education and respected jobs, thereby subtly putting them into the mindset of someone with a relatively low or high socioeconomic status. When then presented with a jar of candy ostensibly for kids in a nearby lab, those made to feel as if they were upper class took more candy that would otherwise go to children, findings that suggest the experience of higher social class might nudge one to act unethically.
"If you take lower socioeconomic status people and just change their social values very subtly, they'll act just as unethically as upper-class individuals," Piff said. "The patterns of behavior naturally arise from increased wealth and status compared to others."

[Emphasis added].

For more, see Rich People More Likely to Lie, Cheat, Study Suggests by Charles Choi, February 27, 2012 at LiveScience.

Economics: Housing Price History

2012-03-03T17:42:00.002-08:00

For more, see The End of Ownership: Why Aren't Young People Buying More Houses? by Derek Thompson, February 29, 2012 at The Atlantic.

Economics: Historical GDP Change by Area

2012-03-02T18:11:00.000-08:00

For more, see 3% Growth: The Economy Just Had Its Best Quarter in 2 Years by Derek Thompson, February 29, 2012 at The Atlantic.

Health: Knee Replacement May Be a Lifesaver for Some

2012-03-02T18:09:00.002-08:00

In a sweeping study of Medicare records, researchers from Philadelphia and Menlo Park, Calif., examined the effects of joint replacement among nearly 135,000 patients with new diagnoses of osteoarthritis of the knee from 1997 to 2009. About 54,000 opted for knee replacement; 81,000 did not.
Three years after diagnosis, the knee replacement patients had an 11% lower risk of heart failure. And after seven years, their risk of dying for any reason was 50% lower.

For the motivated patient, it allows them to walk through that portal and become better conditioned and lose weight, he said. It's not a weight-reduction program. It's a potential avenue to improve your level of fitness, weight, cardiovascular health and mental health.

For more, see Knee Replacement May Be a Lifesaver for Some by Tara Parker-Pope, February 27, 2012 at NYTimes.com.

Government: I Work for Uncle Sam, and I'm Proud of It

2012-02-29T08:53:00.002-08:00

It seems that all I hear these days are the once and future leaders of our country tripping over themselves to denigrate the work we do. I'm tired of it, and I'm fed up. I don't claim to represent anyone other than myself, but I would bet that a fair number of federal employees feel as I do. We are lawyers, doctors, PhD students, economists, writers, electricians, construction workers, security officers and technology specialists. We are not a drain on the national economy; rather, we are a primary reason why the United States remains as great as it is.
Like many federal workers, I have sacrificed: a high-paying job in the private sector; a year of my life (and the first six months of my daughter's life) spent in Iraq; long hours; high stress; pay freezes. I'm not complaining; in fact, I quite enjoy my career and my life in the Foreign Service. Yet when I hear our politicians talking about fixing Washington, I often wonder to myself: whom would they like to fix? Is it the guy I see on the Metro every day, heading to work at the Food and Drug Administration to ensure that our food is safe? Is it the woman going into Commerce Department headquarters to support U.S. companies abroad? Or do they mean the thousands of people who support our troops overseas? How about my fellow Foreign Service officers, who put themselves in harm's way in Baghdad, Kabul, Damascus and hundreds of other places around the world?

For more, see I Work for Uncle Sam, and I'm Proud of It by Jason Ullner, February 26, 2012 at The Washington Post.

Economics: What Ails Europe?

2012-02-28T13:18:00.002-08:00

So what does ail Europe? The truth is that the story is mostly monetary. By introducing a single currency without the institutions needed to make that currency work, Europe effectively reinvented the defects of the gold standard — defects that played a major role in causing and perpetuating the Great Depression.
More specifically, the creation of the euro fostered a false sense of security among private investors, unleashing huge, unsustainable flows of capital into nations all around Europe's periphery. As a consequence of these inflows, costs and prices rose, manufacturing became uncompetitive, and nations that had roughly balanced trade in 1999 began running large trade deficits instead. Then the music stopped.
If the peripheral nations still had their own currencies, they could and would use devaluation to quickly restore competitiveness. But they don't, which means that they are in for a long period of mass unemployment and slow, grinding deflation. Their debt crises are mainly a byproduct of this sad prospect, because depressed economies lead to budget deficits and deflation magnifies the burden of debt

For more, see What Ails Europe? by Paul Krugman, February 26, 2012 at NYTimes.com.

Economics: America Is Europe

2012-02-25T07:06:00.002-08:00

The U.S. does not have a significantly smaller welfare state than the European nations. We're just better at hiding it. The Europeans provide welfare provisions through direct government payments. We do it through the back door via tax breaks.

The Organization for Economic Cooperation and Development recently calculated how much each affluent country spends on social programs. When you include both direct spending and tax expenditures, the U.S. has one of the biggest welfare states in the world. We rank behind Sweden and ahead of Italy, Austria, the Netherlands, Denmark, Finland and Canada. Social spending in the U.S. is far above the organization's average.
You might say that a tax break isn't the same as a spending program. You would be wrong.
David Bradford, a Princeton economist, has the best illustration of how the system works. Suppose the Pentagon wanted to buy a new fighter plane. But instead of writing a $10 billion check to the manufacturer, the government just issued a $10 billion weapons supply tax credit. The plane would still get made. The company would get its money through the tax credit. And politicians would get to brag that they had cut taxes and reduced the size of government!
This is essentially what's been happening in sphere after sphere.

For more, see America Is Europe by David Brooks, February 23, 2012 at NYTimes.com.

Education: Improving Higher Education

2012-02-23T06:56:00.000-08:00

More regulations ...

Access to college has been the driving force in federal higher education policy for decades. But the Obama administration is pushing a fundamental agenda shift that aggressively brings a new question into the debate: What are people getting for their money?

He wants to slightly reduce federal aid for schools that don't control tuition costs and shift it to those that do. He also has proposed an $8 billion program to train community college students for high-growth industries that would provide financial incentives to programs that ensured their trainees find work. Both proposals need congressional approval.
At the same time, the administration is developing both a "scorecard" for use in comparing school statistics such as graduation rates as well as a "shopping sheet" students would receive from schools they applied to with estimates of how much debt they might graduate with and estimated future payments on student loans.

Historically, policy conversations have centered on getting students into college. [Education Secretary Arne] Duncan said graduating is just as important.
"To be real clear, I think that's been the problem with federal policy in the past is 100% has been focused on the front end on inputs, that's clearly important, but that's the starting point. That gets you in the game. The goal isn't to get to the game, the goal is to get to the finish line," Duncan said.

For more, see Obama Takes Tougher Stance on Higher Education by The Associated Press, February 20, 2012 at NYTimes.com.

Economics: Pain Without Gain

2012-02-22T10:24:00.001-08:00

Greece would have been in deep trouble no matter what policy decisions were taken, and the same is true, to a lesser extent, of other nations around Europe's periphery. But matters were made far worse than necessary by the way Europe's leaders, and more broadly its policy elite, substituted moralizing for analysis, fantasies for the lessons of history.

Now the results are in — and they're exactly what three generations' worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.
Furthermore, bond markets keep refusing to cooperate. Even austerity's star pupils, countries that, like Portugal and Ireland, have done everything that was demanded of them, still face sky-high borrowing costs. Why? Because spending cuts have deeply depressed their economies, undermining their tax bases to such an extent that the ratio of debt to G.D.P., the standard indicator of fiscal progress, is getting worse rather than better.
Meanwhile, countries that didn't jump on the austerity train — most notably, Japan and the United States — continue to have very low borrowing costs, defying the dire predictions of fiscal hawks.
Now, not everything has gone wrong. Late last year Spanish and Italian borrowing costs shot up, threatening a general financial meltdown. Those costs have now subsided, amid general sighs of relief. But this good news was actually a triumph of anti-austerity: Mario Draghi, the new president of the European Central Bank, brushed aside the inflation-worriers and engineered a large expansion of credit, which was just what the doctor ordered.

For more, see Pain Without Gain by Paul Krugman, February 19, 2012 at NYTimes.com.

Gender: Women Find Their Work More Meaningful

2012-02-20T08:20:00.001-08:00

For more, see Women May Earn Less, but They Find Their Work More Meaningful by Catherine Rampell, February 16, 2012 at Economix.

Healthcare: Texas Has Death Panels

2012-02-20T08:19:00.001-08:00

When families demand treatments that have an exceedingly low likelihood of success or that sustain life of such low quality that one might reasonably say it is of no benefit to the patient, Texas law allows physicians to refuse to provide such treatments.
Under the Texas legislation, demands by families for treatments that appear to meet these criteria are adjudicated by a hospital-based committee, and if the committee agrees with the clinicians, and if other providers cannot be located who are willing to provide such care, then treatment may be withdrawn without the permission of the patient's surrogate.

From The Texas Advance Directives Act by Ezra Klein, February 19, 2012 at Ezra Klein.

Economics: The Stimulus Bill, Three Years Later

2012-02-19T11:20:00.001-08:00

For more, see The Stimulus Bill, Three Years Later by Brad Plumer, February 17, 2012 at Ezra Klein.

Politics: Moochers Against Welfare

2012-02-19T11:19:00.001-08:00

Political scientists who use Congressional votes to measure such things find that the current G.O.P. majority is the most conservative since 1879, which is as far back as their estimates go.

... why do regions that rely on the safety net elect politicians who want to tear it down?

Cornell University's Suzanne Mettler points out that many beneficiaries of government programs seem confused about their own place in the system. She tells us that 44% of Social Security recipients, 43% of those receiving unemployment benefits, and 40% of those on Medicare say that they have not used a government program.

The truth, of course, is that the vast bulk of entitlement spending goes to the elderly, the disabled, and working families, so any significant cuts would have to fall largely on people who believe that they don't use any government program.

For more, see Moochers Against Welfare by Paul Krugman, February 16, 2012 at NYTimes.com.

Climate: The Heartland Institute's Climate Denial Machine

2012-02-17T10:10:00.001-08:00

Internal Heartland Institute strategy and funding documents obtained by DeSmogBlog expose the heart of the climate denial machine — its current plans, many of its funders, and details that confirm what DeSmogBlog and others have reported for years. The heart of the climate denial machine relies on huge corporate and foundation funding from U.S. businesses including Microsoft, Koch Industries, Altria (parent company of Philip Morris) RJR Tobacco and more.

For example ...

funding for high-profile individuals who regularly and publicly counter the alarmist AGW message. At the moment, this funding goes primarily to Craig Idso ($11,600 per month), Fred Singer ($5,000 per month, plus expenses), Robert Carter ($1,667 per month), and a number of other individuals, but we will consider expanding it, if funding can be found.

And ...

Efforts at places such as Forbes are especially important now that they have begun to allow high-profile climate scientists (such as Gleick) to post warmist science essays that counter our own. This influential audience has usually been reliably anti-climate and it is important to keep opposing voices out.

For more, see Heartland Institute Exposed: Internal Documents Unmask Heart of Climate Denial Machine by Brendan Demelle, February 14, 2012 at DeSmogBlog.com.

Politics: Even Critics of Safety Net Increasingly Depend on It

2012-02-16T10:51:00.001-08:00

The share of benefits flowing to the least affluent households, the bottom fifth, has declined from 54% in 1979 to 36% in 2007, according to a Congressional Budget Office analysis published last year.

In 2000, federal and state governments spent about 37 cents on the safety net from every dollar they collected in revenue, according to a New York Times analysis. A decade later, after one Medicare expansion, two recessions and three rounds of tax cuts, spending on the safety net consumed nearly 66 cents of every dollar of revenue.

One of the oldest criticisms of democracy is that the people will inevitably drain the treasury by demanding more spending than taxes. The theory is that citizens who get more than they pay for will vote for politicians who promise to increase spending.
But Dean P. Lacy, a professor of political science at Dartmouth College, has identified a twist on that theme in American politics over the last generation. Support for Republican candidates, who generally promise to cut government spending, has increased since 1980 in states where the federal government spends more than it collects. The greater the dependence, the greater the support for Republican candidates.
Conversely, states that pay more in taxes than they receive in benefits tend to support Democratic candidates. And Professor Lacy found that the pattern could not be explained by demographics or social issues.

For much more, see Even Critics of Safety Net Increasingly Depend on It by Binyamin Appelbaum and Robert Gebeloff, February 11, 2012 at NYTimes.com.

Mind: Speaking up Is Hard to Do: Researchers Explain Why

2012-02-14T07:42:00.001-08:00

Research from scientists at the Virginia Tech Carilion Research Institute offers an explanation of why many people become, in effect, less intelligent in small group settings.

The researchers administered a standard intelligence test to 70 individuals and divided them into 14 groups of five. Then the groups repeated 92 test questions dealing with sequences and spatial problems.
Two subjects from each group answered the questions while having fMRI scans. After each question, the subjects saw how they ranked within the group and whether their ranking went up, down or stayed the same relative to the group.
Initially, all the brain scans showed spikes in activity in the amygdala, the part of the brain that registers fear and processes emotion. But after answering 10 or so questions, 13 subjects recovered and ended up with scores that were closer to their initial performance. Meanwhile, 14 didn't recover.

"Some people stayed stressed and freaked out the whole time, and some people habituated relatively quickly and started solving small problems," Dr. Montague said.
The researchers reported that 11 of the 14 "low performers" were female; 10 of the 13 "high performers" were men.
The low-performers were more attuned to group social dynamics, subconsciously worrying about their performance and evaluating themselves in relation to others, the researchers speculate.
Women often are more attentive to what others may be feeling or thinking, a sensitivity that likely has an evolutionary origin, Dr. Montague says.

If you are quiet in a group setting, it doesn't necessarily mean you are shy, but it does mean you might be an introvert.
Introverts prefer to collect their thoughts before speaking and can be overwhelmed in a group, especially of extraverts, who tend to "think out loud" and process information by speaking.

For more, see Speaking up Is Hard to Do: Researchers Explain Why by Elizabeth Bernstein, February 7, 2012 at WSJ.com.

Politics: Obama Takes Aim at GOP Policies in 2013 Budget

2012-02-13T10:52:00.003-08:00

Obama's budget proposal ...

From Obama Takes Aim at GOP Policies in 2013 Budget, February 13, 2012 at WSJ.com.

Classes: Money and Morals

2012-02-13T10:52:00.001-08:00

Adjusted for inflation, entry-level wages of male high school graduates have fallen 23% since 1973. Meanwhile, employment benefits have collapsed. In 1980, 65% of recent high-school graduates working in the private sector had health benefits, but, by 2009, that was down to 29%.

For more, see Money and Morals by Paul Krugman, February 9, 2012 at NYTimes.com.

Classes: Education Gap Grows Between Rich and Poor

2012-02-11T09:37:00.001-08:00

It is a well-known fact that children from affluent families tend to do better in school. Yet the income divide has received far less attention from policy makers and government officials than gaps in student accomplishment by race.
Now, in analyses of long-term data published in recent months, researchers are finding that while the achievement gap between white and black students has narrowed significantly over the past few decades, the gap between rich and poor students has grown substantially during the same period.

For much more, see Education Gap Grows Between Rich and Poor, Studies Say by Sabrina Tavernise, February 9, 2012 at NYTimes.com.

Politics: The Crowd Pleaser

2012-02-11T09:36:00.001-08:00

If Rick Santorum weren't running for president, he would still be saying the same things he is saying today. Very few people believe that about Mitt Romney.

For more, see The Crowd Pleaser by David Brooks, February 9, 2012 at NYTimes.com.

Health: Trans-Fat Blood Levels Plummet After FDA Regulation

2012-02-10T11:02:00.003-08:00

More regulations ...

The amount of trans fat in the American bloodstream fell by more than half after the Food and Drug Administration required food manufacturers to label how much of the unhealthful ingredient is in their products, according to a new study.
Blood levels of trans fat declined 58% from 2000 to 2008. FDA began requiring trans-fat labeling in 2003. During the same period several parts of the country — New York most famously — passed laws limiting trans fats in restaurant food and cooking. The makers of processed food also voluntarily replaced trans fats with less harmful oils.

For more, see Trans-Fat Blood Levels Plummet After FDA Food-Labeling Regulation by David Brown, February 8, 2012 at The Washington Post.

Politics: Saul Alinsky, Who?

2012-02-10T11:02:00.001-08:00

... just who was Alinsky, really? Born in 1909, in the ghetto of Chicago's South Side, he saw the worst of poverty and felt the ethnic prejudices that fester, then blast into violence when people are crowded into tenements and have too little to eat. He came to believe that working people, poor people, put down and stepped upon, had to organize if they were going to clean up the slums, fight the corruption that exploited them, and get a handhold on the first rung of the ladder up and out.
He became a protégé of labor leader John L. Lewis and took the principles of organizing into the streets, first in his hometown of Chicago, then across the country, showing citizens how to band together and non-violently fight for their rights, then training others to follow in his shoes. Along the way, Alinsky faced down the hatred of establishment politicians, attacks both verbal and physical, and jail time.

One thing Newt has right -- Saul Alinsky was a proud, self-professed radical. Just look at the titles of two of his books - Reveille for Radicals and Rules for Radicals. But a communist or socialist he was not. He worked with them on behalf of social justice, just as he worked alongside the Catholic archdiocese in Chicago. When he went to Rochester, NY, to help organize the African American community there after a fatal race riot, he was first invited by the local Council of Churches. It was conscience they all had in common, not ideology.

... according to the Wall Street Journal, ... the one-time Republican majority leader in the House of Representatives, Dick Armey, whose FreedomWorks organization helps bankroll the Tea Party, gives copies of Alinsky's "Rules for Radicals" to Tea Party leaders.

For more, see Saul Alinsky, Who? by Bill Moyers and Michael Winship, February 6, 2012 at The Huffington Post.

Lib/Con: Across the Aisle

2012-02-08T06:42:00.003-08:00

In the month leading up to the 2008 election, researchers led by the University of California, Los Angeles psychologist Emily Falk performed brain scans on self-identified Republicans and Democrats as they considered statements from each Presidential candidate.
As the election neared, brain areas linked to emotion and social cognition were intensely active. Areas linked to logic and rational thought, however, were relatively inactive.

For more, see Human Nature and the Neurobiology of Conflict by Brandon Keim, January 26, 2012 at Wired.com.

Society: Adolescent Birthrates

2012-02-08T06:42:00.001-08:00

The U.S. adolescent birthrate is by far the highest among industrialized nations. The birthrate among girls ages 15 to 19 was 39.1 per 1,000 teens in this age group in 2009, the most recent year for which statistics are available. The rate in Western Europe ranges from about 24 per 1,000 teens in the U.K. (slightly lower than the U.S. white non-Hispanic rate) to four in the Netherlands.

From Sex-Ed Less Effective in Red States, Study Says by Christopher Wanjek, February 7, 2012 at Vitals on msnbc.com.

Economics: In Many Countries, G.D.P. Growth May Continue to Slow

2012-02-07T09:07:00.003-08:00

For more, see In Many Countries, G.D.P. Growth May Continue to Slow by Floyd Norris, February 3, 2012 at NYTimes.com.

Politics: Newt Nixon

2012-02-07T09:07:00.001-08:00

Dismissing conventional wisdom that portrays the increasingly entertaining Mitt vs. Newt spectacle in standard political language — moderate vs. right-winger, pragmatist vs. ideologue, establishment vs. Tea Party — essayist Kevin Williamson analyzed the conflict in far more basic terms:
It is between those Republicans who disagree with Barack Obama, believing his policies to be mistaken, he writes, and those who hate Barack Obama, believing him to be wicked.

As a political matter ... the parallels between Nixon and Gingrich are ... focused on three streams of conservative resentment:
• Media: Nixon brilliantly used the liberal media as a political foil, casting major news organizations as tools of left-wing Democrats; Gingrich built his breakthrough South Carolina win on two bombastic debate performances in which he tongue-lashed talking heads Juan Williams and John King as elites, winning standing ovations, along with widespread voter support, for his attacks.
• Race: Nixon's Southern Strategy, which exploited the anger and resentment of whites about federal civil-rights legislation, made him the first Republican to dominate presidential voting in the South after the Civil War; Gingrich's statements in South Carolina featured thinly veiled, dog-whistle appeals on race, as when he trashed Obama as the food-stamp president or thundered that Williams, an African American, was unfamiliar with the concept of work.
• Culture: Nixon defined as anti-American bums Vietnam and civil-rights protesters, contrasting them with ordinary Americans yearning for law and order. Gingrich cast Obama not as a partisan rival with whom he disagrees but as an existential threat to America, a dangerous left-wing radical who appeases Islamic terrorists and empowers grotesquely dictatorial judges; his pitch was widely applauded by right-wing Republicans who say they want to take back our country from the foreign Obama, whom they have viewed from the start as an illegitimate leader.

For more, see Newt Nixon by Jerry Roberts, January 26, 2012 at Santa Barbara Independent.

Diversion: Calvin and Hobbes

2012-02-05T08:59:00.005-08:00

From Calvin and Hobbes by Bill Watterson, January 27, 2012 at GoComics.

Economics: The Role of Austerity

2012-02-05T08:59:00.003-08:00

The chart here offers one of the better recent snapshots of the American economy that you will find.
The blue line shows the rate at which the government — federal, state and local — has been growing or shrinking. The red line shows the same for the private sector.

For more, see The Role of Austerity by David Leonhardt, January 27, 2012 at Economix.

Classes: The Great Divorce

2012-02-05T08:59:00.001-08:00

... there are vast behavioral gaps between the educated upper tribe (20% of the country) and the lower tribe (30% of the country). This is where Murray is at his best, and he's mostly using data on white Americans, so the effects of race and other complicating factors don't come into play.
Roughly 7% of the white kids in the upper tribe are born out of wedlock, compared with roughly 45% of the kids in the lower tribe. In the upper tribe, nearly every man aged 30 to 49 is in the labor force. In the lower tribe, men in their prime working ages have been steadily dropping out of the labor force, in good times and bad.
People in the lower tribe are much less likely to get married, less likely to go to church, less likely to be active in their communities, more likely to watch TV excessively, more likely to be obese.
Murray's story contradicts the ideologies of both parties. Republicans claim that America is threatened by a decadent cultural elite that corrupts regular Americans, who love God, country and traditional values. That story is false. The cultural elites live more conservative, traditionalist lives than the cultural masses.
Democrats claim America is threatened by the financial elite, who hog society's resources. But that's a distraction. The real social gap is between the top 20% and the lower 30%. The liberal members of the upper tribe latch onto this top 1% narrative because it excuses them from the central role they themselves are playing in driving inequality and unfairness.

For more, see The Great Divorce by David Brooks, January 30, 2012 at NYTimes.com.

Lib/Con: Left versus Right, in the Brain

2012-02-04T11:07:00.001-08:00

Research has already shown that, compared to liberals, conservatives display heightened responses to threatening images.
Michael Dodd of the University of Nebraska wanted to explore this in finer detail: He showed 46 left- or right-leaning Nebraskans a series of images alternately disgusting (spiders on faces, open wounds) and appealing (smiling children, cute rabbits.) Dodd's team found that conservatives reacted most strongly to negative images, and liberals most strongly to positive photographs.
Then he showed them pictures of well-known politicians. The same patterns held: Conservatives displayed more distaste than liberals for politicians they disliked, while liberals felt more positive than conservatives about politicians they liked.
Given these and other findings, wrote Dodd's team, "those on the political right and those on the political left may simply experience the world differently."

For more, see Human Nature and the Neurobiology of Conflict by Brandon Keim, January 26, 2012 at Wired.com.

Government: Federal Pay vs. Private Sector Compensation

2012-02-04T11:06:00.002-08:00

Less-educated federal workers make a bit more than their private-sector counterparts and receive more generous benefits. Workers with a complete or incomplete college education or a master's degree tend to make about the same amount, again with more generous benefits. But highly educated federal workers earn less than their peers in the private sector.
The Congressional Budget Office went further than some other studies in ensuring a comparison of apples to apples — controlling for a worker's education, years of experience, occupation, neighborhood, age, sex, ethnicity and immigration status, among other characteristics.

For more, see Federal Pay vs. Private Sector Compensation by Annie Lowrey, January 30, 2012 at Economix.

Economics: January Jobs Report

2012-02-04T11:06:00.000-08:00

For more, see January Jobs Report, First Impressions by Jared Bernstein, February 3, 2012 at The Huffington Post.

Mind: Group Intelligence

2012-02-02T07:43:00.002-08:00

When cognitive scientist P. Read Montague of Virginia Tech's Carilion Research Institute administered intelligence tests to people individually and in groups of five, they found that IQ actually dropped in the social setting.
"Individuals express diminished cognitive capacity in small groups," wrote Montague's team, and they're not sure why, though they suspect that social pressure plays a role. Groups have hierarchies and pecking orders; stress and intimidation could translate into compromised cognition.

From Human Nature and the Neurobiology of Conflict by Brandon Keim, January 26, 2012 at Wired.com.

Taxes: Capital Gains Tax Scheduled to Rise Sharply in 2013

2012-02-02T07:43:00.000-08:00

Donald Marron at the Tax Policy Center reminds us that taxes on capital gains are scheduled to increase in 2013, whether the Bush tax cuts are extended or not.

For more, see Capital Gains Tax Scheduled to Rise Sharply in 2013 by Suzy Khimm, January 25, 2012 at Ezra Klein.

Politics: With Audiences Encouraged to React, Primary Debates Seem More Made for TV

2012-02-02T07:42:00.001-08:00

... the protocol for the general election debates, which are overseen by the Commission on Presidential Debates, is that audiences sit in virtual silence or risk being escorted out.
But the primary debates play by different rules. They are often co-sponsored by state parties or other political organizations, like the Tea Party Express, which teamed up with CNN for a debate in September. These groups are given discretion over most of the tickets, meaning that the audiences are usually a politically charged bunch.

Network executives from Fox and CNN argue that regardless of the occasionally unruly crowds, their presidential debates are civic exercises intended to help educate and inform voters. But they also see the debates' value as television productions. Active, engaged crowds are fun to watch. People who sit on their hands are not.
A debate with a mute audience, said Michael Clemente, senior vice president for news at Fox News, is like a movie without a soundtrack. Fox's productions tend to be some of the slickest in the business, complete with a boom camera that sweeps over the roaring crowd, sometimes thousands strong.

For its part, CNN is proceeding with Thursday's debate as it would for any other. Their stage director will be in Jacksonville, Fla., to loosen up the crowd of 1,200, most invited by the state Republican Party. Reaction will be encouraged, as long as it is respectful.

For more, see With Audiences Encouraged to React, Primary Debates Seem More Made for TV by Jeremy W. Peters, January 25, 2012 at NYTimes.com.

Government: New Rules on Airline Fees Take Effect Thursday

2012-02-01T09:16:00.003-08:00

More regulations ...

The ticket price touted in airline advertising should be the price you pay under new federal airline regulations intended to save passengers from hidden taxes and fees.

The rules require that airlines include all mandatory taxes and fees in published airfares and that they disclose baggage fees to consumers buying tickets.
Under another rule, passengers now will be able to hold a reservation without payment for 24 hours or cancel a reservation during that period without penalty. Airlines also will be required to notify passengers of delays of more than 30 minutes, as well as flight cancellations and diversions. In most cases, they will be prohibited from increasing the price of passengers' tickets after purchase.

In addition, airlines must disclose baggage fees when passengers book a flight online. Information on baggage fees is required on all e-ticket confirmations.

For more, see New Rules on Airline Fees Take Effect Thursday by Ashley Halsey III, January 23, 2012 at The Washington Post.

Economics: The Hangover

2012-02-01T09:16:00.001-08:00

But for a truly grim picture, read a new report on deleveraging by the McKinsey Global Institute. It points out that in many rich countries the process of debt reduction hasn't even started. America has begun to pare its debt burden, although the drop is small compared with the build-up in 2000-08 (see chart). But many European countries are more, not less, in hock than they were in 2008. There the hangover could last another decade or more.

The McKinsey report pores over two episodes that it considers most relevant for today: the experiences of Sweden and Finland following their banking busts in the early 1990s. Debt reduction took place in two stages. In stage one, the private sector reduces its debts; the economy is weak and public debt soars. In stage two, growth recovers and the longer-term process of reducing government debt begins. In both these cases growth was buoyed by booming exports, a boon that seems unlikely this time. But it is telling that Sweden did not begin its budget-cutting until the economy had recovered; and that when Finland tried an early bout of austerity, this worsened its recession.
The McKinsey analysts carefully avoid suggesting this means Europe's austerity is misguided. Circumstances today are different, they argue: European governments began with higher debt and deficits, leaving them with less room for manoeuvre. But the message is clear: America is closer to Sweden's successful template than Europe is. Debt reduction is very difficult without economic growth, and the scale of Europe's austerity makes it hard to see where that growth will come from.
That's all the more true because Europe's governments have been remarkably timid, compared with the Nordics, in exploiting another avenue to growth—structural reform. The report underscores just how dramatically Sweden and Finland overhauled their economies in the wake of their debt crises. Banks were nationalised and restructured; whole sectors, such as retailing, were deregulated. Thanks to a slew of efficiency-enhancing reforms, productivity soared and investment boomed.

For more, see The Hangover, January 21, 2012 at The Economist.

Classes: The New American Divide

2012-02-01T09:15:00.001-08:00

From a good, long article ...

America is coming apart. For most of our nation's history, whatever the inequality in wealth between the richest and poorest citizens, we maintained a cultural equality known nowhere else in the world—for whites, anyway.

Americans love to see themselves this way. But there's a problem: It's not true anymore, and it has been progressively less true since the 1960s.

When Americans used to brag about "the American way of life"—a phrase still in common use in 1960—they were talking about a civic culture that swept an extremely large proportion of Americans of all classes into its embrace. It was a culture encompassing shared experiences of daily life and shared assumptions about central American values involving marriage, honesty, hard work and religiosity.
Over the past 50 years, that common civic culture has unraveled. We have developed a new upper class with advanced educations, often obtained at elite schools, sharing tastes and preferences that set them apart from mainstream America. At the same time, we have developed a new lower class, characterized not by poverty but by withdrawal from America's core cultural institutions.

I'm not sure his solution will work, but for more, see The New American Divide by Charles Murray, January 21, 2012 at WSJ.com.

Mind: Competitiveness Peaks in Middle Age

2012-01-30T09:11:00.001-08:00

New research finds middle-aged men are most willing to engage in competitive risk-taking.

Their study, described in the journal Psychology and Aging, was conducted at a shopping mall in Eugene, Oregon. Passersby were recruited to participate by the promise of earning anywhere from $2 to $15, depending on their decisions and performance. In the end, 543 people between the ages of 25 and 75 took part.
After a couple of practice rounds, each was instructed to perform a simple mental arithmetic task. They could either receive a fixed-rate payment of 25 cents per correct item, or opt for a competitive payment plan. If they chose the latter, they would be paid 50 cents per correct item, but only if they outscored a randomly chosen earlier participant.
So who was most willing to take a chance and double their money? The answer, by a wide margin, was men between the ages of 45 and 54. Both younger and older men were less willing to take the bet, with the percentage dropping off dramatically for those 65 and older.
This same pattern was found in women, although they were less eager than men to engage in competitive behavior at each stage of life. This confirms previous research that found a large gender gap regarding the willingness to compete — even in a task where women performed just as well as men.

For more, see Look Out, Kids: Competitiveness Peaks in Middle Age by Tom Jacobs, November 29, 2011 at Miller-McCune.

Taxes: Taxes at the Top

2012-01-30T09:10:00.001-08:00

Defenders of low taxes on the rich mainly make two arguments: that low taxes on capital gains are a time-honored principle, and that they are needed to promote economic growth and job creation. Both claims are false.
When you hear about the low, low taxes of people like Mr. Romney, what you need to know is that it wasn't always thus — and the days when the superrich paid much higher taxes weren't that long ago. Back in 1986, Ronald Reagan — yes, Ronald Reagan — signed a tax reform equalizing top rates on earned income and capital gains at 28%. The rate rose further, to more than 29%, during Bill Clinton's first term.
Low capital gains taxes date only from 1997, when Mr. Clinton struck a deal with Republicans in Congress in which he cut taxes on the rich in return for creation of the Children's Health Insurance Program. And today's ultralow rates — the lowest since the days of Herbert Hoover — date only from 2003, when former President George W. Bush rammed both a tax cut on capital gains and a tax cut on dividends through Congress, something he achieved by exploiting the illusion of triumph in Iraq.

For more, see Taxes at the Top by Paul Krugman, January 19, 2012 at NYTimes.com.

Miscellaneous: South African Weather Forecasters Who Get It Wrong Face Imprisonment

2012-01-27T11:39:00.001-08:00

South African weather forecasters who predict severe storms or gales without permission from the authorities could be punished by up to ten years imprisonment or a hefty fine under new legislation.

The bill, officials say, is aimed at "protecting the general public against the distribution of inaccurate or hoax warnings or weather predictions that could cause public panic and lead to evacuations and/or the unwarranted waste of resources — money, people and technology".
It would mean that independent forecasters wanting to issue a severe weather warning would first need to get written permission from the state-run South African Weather Service.
Members of the public who ring in to radio stations or newspapers to warn of an impending storm without asking SAWS first could also find themselves criminalised under the bill.
First-time offenders face a penalty of up to five years imprisonment or a fine of five million rand (£400,000), while repeat offenders could be jailed for up to ten years or be made to pay a ten million rand (£800,000) fine

For more, see South African Weather Forecasters Who Get It Wrong Face Imprisonment by Aislinn Laing, January 14, 2012 at The Telegraph.

Society: Measuring the Top 1% by Wealth, Not Income

2012-01-27T11:38:00.001-08:00

... an analysis of the [2009] Fed data is still revealing in that it shows the wealth gap, as measured by net worth, is much more extreme than the chasm as measured by income.
The Times had estimated the threshold for being in the top 1% in household income at about $380,000, 7.5 times median household income, using census data from 2008 through 2010. But for net worth, the 1% threshold for net worth in the Fed data was nearly $8.4 million, or 69 times the median household's net holdings of $121,000.

They controlled nearly a third of the nation's financial assets (investment holdings) and about 28% of nonfinancial assets (the value of property, cars, jewelry, etc.).

When asked if they feel lucky in their financial affairs, nearly 80% of the super-rich strongly agreed. The rest of us? Fewer than one-third feel that financial good fortune is shining upon us.

For more, see Measuring the Top 1% by Wealth, Not Income by Robert Gebeloff and Shaila Dewan, January 17, 2012 at Economix.

Politics: Time for Liberals to Give up Hope on Barack Obama?

2012-01-24T09:33:00.005-08:00

The specific charge sheet against Obama could run for several pages and then several more. On the economy, the president is blamed for a lack of ambition, for passing a stimulus package of $787bn that, say the critics, should have been nearly twice the size. Obama erred, too, by allowing Democrats in Congress to write the stimulus bill, packing it with pet schemes and pork that would do little to get the economy moving. In an attempt to win Republican support — which never came — he also weighed down the bill with too many tax cuts. The result was action that was simply incomplete, leaving unemployment hovering around the 9% mark for most of Obama's presidency.
Former admirers say he was too weak on the banks, failing to declare war on those who had caused the 2008 crash. The clues were there in his senior appointments. While some liberals had fantasised about a dream ticket of Nobel laureate Paul Krugman and former labour secretary Robert Reich, Obama filled his two key economic posts with Larry Summers and Timothy Geithner, both schooled by Robert Rubin, former co-chair of Goldman Sachs. Obama did legislate on financial reform, but the bill did not go far enough, with no restoration of the Depression-era Glass-Steagall act, which had previously separated casino and retail banking. Nor was there any action to cap the pay of top executives, even in companies majority-owned by the US government. It's not that Obama fought and lost on these issues. In most cases, he did not even fight.
His signature achievement, the passage of healthcare reform, also dismayed as many liberals as it delighted, chiefly because Obama surrendered on the so-called public option which, while not exactly establishing an American [British] NHS, would have at least offered a government-run insurance programme as an alternative to the private sector. That made Obama's bill no more radical than one proposed decades earlier by Richard Nixon, or the one passed by a certain Mitt Romney when he was governor of Massachusetts.
In his inaugural address Obama spoke often and poetically on climate change. He vowed to "harness the sun and the winds and the soil to fuel our cars and run our factories". But there has been no action and not even any serious advocacy. Aware that Republicans do not even believe there is an energy problem, he has shied away from offering a solution.

For much more, see Barack Obama's Presidency, Three Years on — Is It Time to Give up Hope? by Jonathan Freedland, January 19, 2012 at guardian.co.uk.

Gender: Sex on the Brain Proves Costly for Men

2012-01-24T09:33:00.003-08:00

New research suggests the mere idea of an encounter with a woman can impair men's cognitive performance.

In one experiment, Casually mentioning a female instead of a male name was sufficient to impair men's cognitive performance, the team from the Radboud University Nijmegen Behavioral Sciences Institute writes in the Archives of Sexual Behavior. In another, a brief instant-messaging exchange was enough to do the trick.
Moreover, these effects occur even if men do not get information about the woman's attractiveness, adds the researchers, led by Sanne Nauts.
The research builds on a much-discussed 2009 study by Johan Karremans (one of the authors of the new paper). It found men's, but not women's, cognitive performance declined following five to seven minutes of socializing with an attractive stranger. That study concluded that heterosexual males are, in such situations, expending their cognitive resources ... on making a good impression.

Men's cognitive performance might be affected if they are talking to a woman on the phone (or already before that, while they were waiting for her phone call), if they are chatting with a woman online, or if they are sitting in the waiting room of their new, female, doctor, Nauts and her colleagues write.
The study took place in a university environment; the participants were mostly young (their mean age was 21). It's not certain the results would be duplicated among the general population.

For more, see Sex on the Brain Proves Costly for Men by Tom Jacobs, January 16, 2012 at Miller-McCune.

Taxes: Why Americans Think the Tax Rate Is High, and Why They're Wrong

2012-01-24T09:33:00.001-08:00

Together, all federal taxes equaled 14.4% of the nation's economic output last year, the lowest level since 1950. Add state and local taxes, and the share nearly doubles, to about 27%, according to the Tax Policy Center in Washington — still lower than at almost any other point in the last 40 years.

For more, see Why Americans Think the Tax Rate Is High, and Why They're Wrong by David Leonhardt, January 19, 2012 at NYTimes.com.

Miscellaneous: My 1,000th Post

2012-01-23T12:23:00.000-08:00

This is my 1,000th post. I hope some of them have been useful or at least interesting.

My main interest has been about how bad we are at absorbing new information, correcting old beliefs, and making decisions (see the posts which have been labeled mind). We are far from the rational creatures which might like to think we are. Our brains naturally take shortcuts to make thinking quicker and easier, which is understandable for less important things, but our biases make it difficult for us to absorb information which challenges the biases unless we consciously work to overcome them, as evidenced by the state of our political system where the two sides talk past one another often without much interest in understanding the other side's point of view.

My growing interest is in how we mistake economic progress with human progress (see well-being). The average American now is no more satisfied with his life than he was many decades ago, yet we are far richer. Are we focusing on the right things?

-- DougL

Government: Number of Federal Employees

2012-01-21T13:48:00.001-08:00

One measure of government size is the federal work force, measured by the White House budget office as civilian full-time equivalent employees, excluding the military and Post Office. The executive branch had about 1.875 million workers in 2008 when the financial crisis hit, a number that held relatively constant throughout the post-9/11 Bush Administration. That number climbed to 2.128 million two years later under the 111th Congress—or growth of 13.5%. That's the largest government since 1992, when the Clinton Administration began to slash defense spending.

From The Reorganization Man, January 14, 2012 at WSJ.com.

Climate: Climate Proposal Puts Practicality Ahead of Sacrifice

2012-01-20T09:21:00.001-08:00

The current issue of the journal Science contains a proposal to slow global warming that is extraordinary for a couple of reasons:
1. In theory, it would help people living in poor countries now, instead of mainly benefiting their descendants.
2. In practice, it might actually work.
This proposal comes from an international team of researchers — in climate modeling, atmospheric chemistry, economics, agriculture and public health — who started off with a question that borders on heresy in some green circles: Could something be done about global warming besides forcing everyone around the world to use less fossil fuel?
Ever since the Kyoto Protocol imposed restrictions in industrial countries, the first priority of environmentalists has been to further limit the emission of carbon dioxide. Burning fewer fossil fuels is the most obvious way to counteract the greenhouse effect, and the notion has always had a wonderfully virtuous political appeal — as long as it's being done by someone else.
But as soon as people are asked to do it themselves, they follow a principle identified by Roger Pielke Jr. in his book The Climate Fix. Dr. Pielke, a political scientist at the University of Colorado, calls it iron law of climate policy: When there's a conflict between policies promoting economic growth and policies restricting carbon dioxide, economic growth wins every time.

After looking at hundreds of ways to control these pollutants, the researchers determined the 14 most effective measures for reducing climate change, like encouraging a switch to cleaner diesel engines and cookstoves, building more efficient kilns and coke ovens, capturing methane at landfills and oil wells, and reducing methane emissions from rice paddies by draining them more often.
If these strategies became widespread, the researchers calculate, the amount of global warming in 2050 would be reduced by about one degree Fahrenheit, roughly a third of the warming projected if nothing is done. This impact on temperatures in 2050 would be significantly larger than the projected impact of the commonly proposed measures for reducing carbon dioxide emissions.
Not incidentally, the researchers calculate, these reductions in low-level ozone and black carbon would yield lots of benefits long before 2050. Because people would be breathing cleaner air, 700,000 to 4.7 million premature deaths would be avoided each year. Thanks to improved crop yields, farmers would produce at least 30 million more metric tons of food annually.
The beauty of these pollution-control measures is that over five to 10 years they pay for themselves in the developing world, says Drew Shindell, the lead author of the proposal, who is a climate scientist at the NASA Goddard Institute for Space Studies and at Columbia University. They slow global warming, but there are local benefits, too. If you make black carbon reductions in China or India, you get most of the benefits in China or India.

For more, see Climate Proposal Puts Practicality Ahead of Sacrifice by John Tierney, January 16, 2012 at NYTimes.com.

Diversion: Somali Pirates Arrested After Attempting to Hijack Spanish Warship

2012-01-20T09:19:00.003-08:00

The gang sped up to the Spanish warship Patino and opened fire with assault rifles before trying to climb up the side of the 17,000-tonne vessel.
Its crew immediately returned fire, forcing the pirates off the hull and back into their skiff, where they dumped their weapons overboard and attempted to escape.
They were tracked by the Patino's helicopter and eventually surrendered.

It was unclear why the small group of pirates felt that they could overpower the Patino and its 150-plus crew.

For more, see Somali Pirates Arrested After Attempting to Hijack Spanish Warship by Mike Pflanz, January 13, 2012 at The Telegraph.

Politics: Mitt Romney and the Wealth Issue

2012-01-20T09:19:00.001-08:00

Mitt Romney is a rich man, but is Mitt Romney's character formed by his wealth? Is Romney a spoiled, cosseted character? Has he been corrupted by ease and luxury?
The notion is preposterous. All his life, Romney has been a worker and a grinder. He earned two degrees at Harvard simultaneously (in law and business). He built a business. He's persevered year after year, amid defeat after defeat, to build a political career.
Romney's salient quality is not wealth. It is, for better and worse, his tenacious drive — the sort of relentlessness that we associate with striving immigrants, not rich scions.

For more, see The Wealth Issue by David Brooks, January 19, 2012 at NYTimes.com.

Mind: Republicans like Candidates Who Look Republican

2012-01-18T11:00:00.004-08:00

Although they can't put their finger on what a Republican looks like, when GOP voters think someone looks Republican, that candidate gets more votes.

The more Republican politicians seemed to look to people, the more votes they gained in red states at the actual polls. The facial stereotypes, in other words, predicted the outcomes of real elections. But that wasn't the strangest finding. Idea Lobby

Strangely ...

To our even greater surprise, Olivola said, we found no relationship whatsoever for left-leaning states. We certainly hadn't predicted that. That was a big surprise.

They also experimented on individuals (not just surveys of states) and found ...

... conservatives are more likely to be influenced by how Republican they think a candidate looks, whether they live in Massachusetts or Alabama. (It also means, oddly, that a Democratic candidate who looks sort of Republican may actually pick up a couple of Republican voters this way in a right-leaning district.)

And this is all the more mystifying given that voters don't have to size up a politician's cheekbones to figure out who the real Republican is. That information is readily available — right there on the ballot.
Why would a Republican vote for the more Republican-looking candidate if the ballot is telling them, ‘No, the other guys is actually a Republican'? Why would they be swayed to do that? We don't know. It is kind of worrying.

For more, see Republicans like Candidates Who Look Republican by Emily Badger, January 10, 2012 at Miller-McCune.

Healthcare: U.S. To Force Drug Firms to Report Money Paid to Doctors

2012-01-18T11:00:00.002-08:00

To head off medical conflicts of interest, the Obama administration is poised to require drug companies to disclose the payments they make to doctors for research, consulting, speaking, travel and entertainment.

The Times has found that doctors who take money from drug makers often practice medicine differently from those who do not and that they are more willing to prescribe drugs in risky and unapproved ways, such as prescribing powerful antipsychotic medicines for children.
Under the new standards, if a company has just one product covered by Medicare or Medicaid, it will have to disclose all its payments to doctors other than its own employees. The federal government will post the payment data on a Web site where it will be available to the public.

For more, see U.S. To Force Drug Firms to Report Money Paid to Doctors by Robert Pear, January 16, 2012 at NYTimes.com.

Society: Among the Wealthiest One Percent, Many Variations

2012-01-18T11:00:00.000-08:00

The top 1% of earners in a given year receives just under a fifth of the country's pretax income, about double their share 30 years ago. They pay just over a fourth of all federal taxes, according to the Tax Policy Center. In 2007, they accounted for about 30% of philanthropic giving, according to Federal Reserve data.

Of the 1 percenters interviewed for this article, almost all — conservatives and liberals alike — said the wealthy could and should shoulder more of the country's financial burden, and almost all said they viewed the current system as unfair. But they may prefer facing cuts to their own benefits like Social Security than paying more taxes. In one survey of wealthy Chicago families, almost twice as many respondents said they would cut government spending as those who said they would cut spending and raise revenue.

A higher proportion of 1 percenters (two in five) than 99 percenters (one in five) has inherited money, according to the Federal Reserve survey. The top earners got 10% of the inherited wealth in the country. Still, a majority of those earners reported no inheritance.

Many wealthy people have decried what they call class warfare. But that does not mean they think the system is not unjustly rigged in their favor. The investor who declined to be identified because he feared for his family said it was not fair that he paid a lower rate on his investment income than he would on a salary and asked why he should receive Social Security or Medicare.

For more, see Among the Wealthiest One Percent, Many Variations by Shaila Dewan and Robert Gebeloff, January 14, 2012 at NYTimes.com.

Diversion: Dominique Strauss-Kahn & Prostitutes

2012-01-17T09:41:00.003-08:00

Dominique Strauss-Kahn had no way of knowing he was sleeping with prostitutes during swinger sessions because "the women were all naked at the time", his lawyer has claimed.

For more, see Dominique Strauss-Kahn Did Not Know He Was Sleeping with Prostitutes 'Because They Were All Naked', January 12, 2012 at The Telegraph.

Gender: Does It Matter What Sex Your Boss Is?

2012-01-17T09:41:00.001-08:00

A recent study found that fewer Americans have a preference for a male or female manager. The research, which surveyed some 60,470 women and men, found that a small majority—54%— said they had no preference as to the gender of their boss.

When asked to rate their current bosses, respondents tended to favor bosses of the opposite sex. Female bosses were rated more favorably by men and male bosses garnered higher praise from women.

For more, see Does It Matter What Sex Your Boss Is? by Rachel Emma Silverman, January 12, 2012 at The Wall Street Journal.

Economics: Inside the Fed in 2006: A Coming Crisis

2012-01-17T09:40:00.001-08:00

As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The transcripts of the 2006 meetings, released after a standard five-year delay, clearly show some of the nation's pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with supervising. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.

The results are unlikely to burnish any of their reputations, inasmuch as they could not see the widening cracks beneath their feet. But the Fed's chairman, Ben S. Bernanke, appears as the most consistent voice of warning that problems in the housing market could have broader consequences.

One fundamental reason for this blindness was that Fed officials did not understand how deeply intertwined the housing sector and financial markets had become. They also were convinced that financial innovations, by distributing the risk of losses more broadly, had increased the strength and resilience of the system as a whole.

For more, see Inside the Fed in 2006: A Coming Crisis, and Banter by Binyamin Appelbaum, January 12, 2012 at NYTimes.com.

Politics: Where Are the Liberals?

2012-01-15T09:11:00.000-08:00

Why aren't there more liberals in America?

There are now two conservatives in this country for every liberal. Over the past 40 years, liberalism has been astonishingly incapable at expanding its market share.
The most important explanation is what you might call the Instrument Problem. Americans may agree with liberal diagnoses, but they don't trust the instrument the Democrats use to solve problems. They don't trust the federal government.

Why don't Americans trust their government? It's not because they dislike individual programs like Medicare. It's more likely because they think the whole system is rigged. Or to put it in the economists' language, they believe the government has been captured by rent-seekers.

For more, see Where Are the Liberals? by David Brooks, January 9, 2012 at NYTimes.com.

Society: Israelis Facing a Seismic Rift over Role of Women

2012-01-15T09:10:00.001-08:00

In the three months since the Israeli Health Ministry awarded a prize to a pediatrics professor for her book on hereditary diseases common to Jews, her experience at the awards ceremony has become a rallying cry. Multimedia Slide Show In Israel, a Clash Between the Secular and Ultra-Orthodox Metro Twitter Logo. Connect With Us on Twitter
The professor, Channa Maayan, knew that the acting health minister, who is ultra-Orthodox, and other religious people would be in attendance. So she wore a long-sleeve top and a long skirt. But that was hardly enough.
Not only did Dr. Maayan and her husband have to sit separately, as men and women were segregated at the event, but she was instructed that a male colleague would have to accept the award for her because women were not permitted on stage.

The list of controversies grows weekly: Organizers of a conference last week on women's health and Jewish law barred women from speaking from the podium, leading at least eight speakers to cancel; ultra-Orthodox men spit on an 8-year-old girl whom they deemed immodestly dressed; the chief rabbi of the air force resigned his post because the army declined to excuse ultra-Orthodox soldiers from attending events where female singers perform; protesters depicted the Jerusalem police commander as Hitler on posters because he instructed public bus lines with mixed-sex seating to drive through ultra-Orthodox neighborhoods; vandals blacked out women's faces on Jerusalem billboards.

As a group, the ultra-Orthodox are, at best, ambivalent about the Israeli state, which they consider insufficiently religious and premature in its founding because the Messiah has not yet arrived.

But while the community has gained increased economic might — there is a growing market catering to its needs — what is lacking is economic productivity. The community places Torah study above all other values and has worked assiduously to make it possible for its men to do that rather than work. While the women often work, there is a 60% unemployment rate among the men, who also generally do not serve in the army.
It is this combination — accepting government subsidies, refusing military service and declining to work, all while having six to eight children per family — that is unsettling for many Israelis, especially when citizens feel economically insecure and mistreated by the government.

... what children learn in the ultra-Orthodox school system — largely unregulated by the state as a result of political deals — is unsuited for the 21st century, so even those who wish to work are finding it hard to find jobs.
Their schools do not give them the skills to work in a modern economy and no training in civil or human rights or democracy, Mr. Ben-David said. They don't even know what we are talking about — what we want from them — when we talk about discrimination against women.

For more, see Israelis Facing a Seismic Rift over Role of Women by Ethan Bronner and Isabel Kershner, January 14, 2012 at NYTimes.com.

Economics: Economic Turmoil and Social Upheaval Warning

2012-01-14T08:46:00.001-08:00

The threat of fresh economic turmoil and social upheaval threaten to put at risk the gains produced by globalisation, the World Economic Forum said.

The survey of 469 global experts identified chronic problems with government finances and severe income inequality as the most prevalent risks over the next decade.
"These risks in tandem threaten global growth as they are drivers of nationalism, populism and protectionism at a time when the world remains vulnerable to systemic financial shocks, as well as possible food and water crises", the report said.
The study said early hopes that closer global integration would inevitably lead to higher living standards for all were at risk of being dashed by trends that left large numbers of people fearful about the future.

For more, see World Economic Forum Warns of Economic Turmoil and Social Upheaval by Larry Elliott, January 11, 2012 at guardian.co.uk.

International: Bill of Rights in Egypt

2012-01-14T08:45:00.001-08:00

The leader of Al-Azhar, the pre-eminent institute of Islamic learning in the Sunni Muslim world, has put forward a Bill of Rights to uphold freedom of expression and belief ahead of the drafting of Egypt's new constitution.

El-Tayeb wants the bill to be part of the new constitution.

For more, see Leader of Al-Azhar Proposes Bill of Rights by The Associated Press, January 10, 2012 at NYTimes.com.

Education: Education Pays

2012-01-12T10:27:00.003-08:00

For more, see Don't Let the Economy Pick Your Major for You by Derek Thompson, January 6, 2012 at The Atlantic.

Environment: Taking Fears of Acid Oceans with a Grain of Salt

2012-01-12T10:27:00.001-08:00

Coral reefs around the world are suffering badly from overfishing and various forms of pollution. Yet many experts argue that the greatest threat to them is the acidification of the oceans from the dissolving of man-made carbon dioxide emissions.

The central concern is that lower pH will make it harder for corals, clams and other "calcifier" creatures to make calcium carbonate skeletons and shells. Yet this concern also may be overstated. Off Papua New Guinea and the Italian island of Ischia, where natural carbon-dioxide bubbles from volcanic vents make the sea less alkaline, and off the Yucatan, where underwater springs make seawater actually acidic, studies have shown that at least some kinds of calcifiers still thrive—at least as far down as pH 7.8.
In a recent experiment in the Mediterranean, reported in Nature Climate Change, corals and mollusks were transplanted to lower pH sites, where they proved "able to calcify and grow at even faster than normal rates when exposed to the high [carbon-dioxide] levels projected for the next 300 years." In any case, freshwater mussels thrive in Scottish rivers, where the pH is as low as five.
Laboratory experiments find that more marine creatures thrive than suffer when carbon dioxide lowers the pH level to 7.8. This is because the carbon dioxide dissolves mainly as bicarbonate, which many calcifiers use as raw material for carbonate.
Human beings have indeed placed marine ecosystems under terrible pressure, but the chief culprits are overfishing and pollution. By comparison, a very slow reduction in the alkalinity of the oceans, well within the range of natural variation, is a modest threat, and it certainly does not merit apocalyptic headlines.

For more, see Taking Fears of Acid Oceans with a Grain of Salt, January 7, 2012 at WSJ.com.

Education: Does Money Matter in Education?

2012-01-09T05:55:00.001-08:00

Bruce Baker, a professor in the Graduate School of Education at Rutgers University in New Jersey, reviewed research on the subject. In this report released Friday by the nonprofit Albert Shankar Institute in Washington, concluded that money matters in improving the quality of schools in several important ways.
Of course, money by itself is not the answer (there is no single answer to improving schools). And it's not just how much money is spent but how it is spent. But the argument that money doesn't matter and that across-the-board budget cuts won't hurt student outcomes are not based in any evidence, Baker found.
Baker looked at evidence through the prism of these questions:
*Are differences in aggregate school funding associated with differences in short- and long-term measured outcomes?
*Are differences in access to specific schooling programs or resources — such as smaller classes, high salaries and instructional materials --associated with differences in measured outcomes?
*Do substantive and sustained reforms to state school finance systems, including raising the level of funding or redistributing money more equitably, lead to improvements in the level or distribution of student outcomes?
The answer to each is yes, he said.

For more, see Report: Does Money Matter in Education? by Valerie Strauss, January 6, 2012 at The Answer Sheet.

Politics: $480: The Price Rick Perry Paid for Each Iowa Caucus Vote

2012-01-08T09:21:00.000-08:00

The blue bands are superpacs.

For more, see $480: The Price Rick Perry Paid for Each Iowa Caucus Vote by Derek Thompson, January 4, 2012 at The Atlantic.

Economics: Budget Cuts Hit Domestic Programs Harder than Defense

2012-01-06T10:15:00.000-08:00

There's been plenty of chatter about the cuts to military spending that the Pentagon will have to make in the years ahead, thanks to last August's debt-ceiling deal.

But ...

In 2001, domestic discretionary programs were somewhat larger, as a percentage of GDP, than defense. By 2021, under the current deals, domestic spending will be slightly smaller than defense.

For more, see Budget Cuts Hit Domestic Programs Harder than Defense by Brad Plumer, January 4, 2012 at Ezra Klein.

Healthcare: Wyden-Ryan's Unrealistic Assumptions

2012-01-05T09:33:00.001-08:00

... the Congressional Budget Office has consistently refused to recognize large potential savings in health care costs from reforms to increase competition among private insurance plans. Indeed, the C.B.O. has concluded that replacing traditional Medicare with competition among such plans would drive up total health care spending per Medicare beneficiary.

For more, see Wyden-Ryan's Unrealistic Assumptions by Laura D'andrea Tyson, December 30, 2011 at Economix.

Economics: Nobody Understands Debt

2012-01-03T17:08:00.001-08:00

It's true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar's worth of foreign claims on America is matched by 89 cents' worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that's already deep in hock to the Chinese, you've been misinformed. Nor are we heading rapidly in that direction.
Now, the fact that federal debt isn't at all like a mortgage on America's future doesn't mean that the debt is harmless. Taxes must be levied to pay the interest, and you don't have to be a right-wing ideologue to concede that taxes impose some cost on the economy, if nothing else by causing a diversion of resources away from productive activities into tax avoidance and evasion. But these costs are a lot less dramatic than the analogy with an overindebted family might suggest.
And that's why nations with stable, responsible governments — that is, governments that are willing to impose modestly higher taxes when the situation warrants it — have historically been able to live with much higher levels of debt than today's conventional wisdom would lead you to believe. Britain, in particular, has had debt exceeding 100% of G.D.P. for 81 of the last 170 years. When Keynes was writing about the need to spend your way out of a depression, Britain was deeper in debt than any advanced nation today, with the exception of Japan.

For more, see Nobody Understands Debt by Paul Krugman, January 1, 2012 at NYTimes.com.

Well-being: Why Grow?

2012-01-02T16:57:00.001-08:00

Growth commonly refers to an increase in gross domestic product, or GDP, the value of a country's goods and services in a given period. Because overall GDP can correlate with higher quality of life, officials in the U.S. and around the world often target GDP growth as an overriding policy objective in itself. But the correlation is strongest when countries are poor. After a point, studies show, the size of the economy has little bearing on living standards.
James Gustave Speth, a professor at Vermont Law School and author of The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability, notes that the U.S. has the largest economy in the world, yet among wealthy nations it ranks last or near the bottom in 30 indicators of well-being, such as childhood poverty, income disparity, obesity, infant mortality, school performance, and prison population.

In 1950, ... per capita GDP in the U.S. was a fraction of what it is today (about one-fourth in adjusted dollars), yet surveys of happiness and life satisfaction — not to mention other indicators of well-being — have declined steadily.

For more, see The Growth of Degrowth Economics by David Villano, December 15, 2011 at Miller-McCune.

Healthcare: Medicare Spending Growth Slowing

2011-12-29T14:54:00.001-08:00

Medicare spending per person is rising more slowly than spending in the private health sector. And, because of the cuts that were part of last year's Affordable Care Act, it is expected to mirror overall growth in the economy for much of the next decade, staying well below targets set by Congress.
Medicare is not out of control, said Robert Berenson, vice chairman of the congressionally appointed Medicare Payment Advisory Commission, which studies the program's finances. This bloated and inefficient program is not bloated and inefficient.
Instead, the immediate and inescapable problem is a demographic one: the enormous wave of baby boomers who started enrolling this year. That concern suggests different solutions, experts say, from those needed to cope with runaway costs.

For more, see Medicare Spending Growth Rising Slower but Enrollment Will Rise by Lori Montgomery, December 22, 2011 at The Washington Post.

Economics: Rehypothecation Heightens Systemic Financial Risk

2011-12-28T09:17:00.001-08:00

The swift implosion of MF Global highlights a common practice used by aggressive speculators, one that experts say makes the broader financial system vulnerable to another crisis. It's called rehypothecation, and it allows a firm to essentially pledge the same limited collateral to arrange fresh loans.
MF Global is believed to have used client funds as collateral to borrow money to make bets on the risky sovereign debt of Portugal, Spain and Italy, leading to a daisy chain of securitization, Thomson Reuters Business Law Currents reported. It's akin to using a single home as collateral for several loans and then investing that money to earn dividends before payments are due on the loans.

Over the last decade, the practice has become riskier due to looser regulations. In 1934, U.S. lawmakers limited rehypothecated funds to investments in U.S. Treasury, state and municipal instruments, but those rules were relaxed from 2000 to 2005, allowing brokers to use client funds to make riskier bets on foreign bonds and sovereign debt.

Rehypothecation has been practiced for decades, but the systemic risks grow as the leverage increases. At the height of the financial crisis, the credit multiplier was 4, according to the IMF, and $1 trillion in hedge fund assets had been transformed into $4 trillion of pledgeable collateral at banks. The problem comes when everyone wants the money back.
Many of Wall Street's most prominent players "have been piling into re-hypothecation activity with startling abandon," reported Thomson Reuters Business Law Currents, essentially creating "what may be the world's largest ever credit bubble." Among them are Goldman Sachs ($28.17 billion rehypothecated in 2011), Wells Fargo ($19.6 billion), JPMorgan ($546.2 billion) and Morgan Stanley ($410 billion).
More alarming is the lack of transparency about such rehypothecations, which are off-balance-sheet transactions. Because they don't appear on a firm's ledger of revenues and expenses, a significant amount of liability may be hidden. Thus, it is not clear how much in rehypothecations is tangled up with risky sovereign debt. U.S. banks hold $181 billion in the sovereign debt of Greece, Ireland, Italy, Portugal and Spain, according to the Bank of International Settlements, but that total does not include off-balance-sheet transactions.

For more, see MF Global Collapse Spotlights Practice That Heightens Systemic Financial Risk by Marcus Baram and Catherine New, December 22, 2011 at The Huffington Post.

Law: Michigan Judge Jails Lawyer for Doing His Job

2011-12-26T12:57:00.002-08:00

Wow.

In early December, Attorney Scott G. Millard was held in contempt and jailed by 58th District Court Judge Kenneth Post for insisting that his client not answer questions about any prior drug use for fear of self-incrimination.
Millard's client, who was charged with a minor in possession of alcohol, was asked repeatedly by the judge if he would pass a drug test. Millard politely asserted his client's right to remain silent; however, Judge Post continued to press the issue and instructed Millard to sit down and be quiet. When Millard asserted his client's constitutional rights again in response to further questions, the judge held him in contempt and sent him to jail.

For more, see Michigan Judge Jails Lawyer for Doing His Job by Ed Brayton, December 23, 2011 at Dispatches from the Culture Wars.

Politics: Modernizing Conservatism

2011-12-26T12:57:00.000-08:00

By allowing their well-reasoned and often well-founded critiques of government action to metastasize into a categorical rejection of all prospective government action, while continuing to deny the basic political economy of the welfare state, conservatives increasingly find themselves in an ideological and practical straightjacket. Where conservatives have succeeded in cutting government, they have done so by taking an indiscriminate fire ax to non-defense discretionary spending. Meanwhile, they have had virtually no success at all in cutting middle-class entitlements, which represent the lion's share of federal spending and continue their unrestrained growth. This kind of conservatism would be unrecognizable to, for example, Calvin Coolidge, a current sentimental conservative favorite who favored minimum wage laws and child labor regulations, or even to Reagan, who favored large-scale government science research beyond just missile defense.

Consent does not require surrender. Liberals and conservatives do not agree about the principle of equality in American life and probably never will. Conservatives emphasize equal opportunity while accepting or even celebrating unequal outcomes. Conservatives see nothing inherently unjust about large disparities in the distribution of income or wealth, and also offer practical reasons why unequal rewards make for a more dynamic, creative, and ultimately wealthier society. Liberals strongly prefer more equal results, with many viewing disparities in income or wealth as random (Richard Gephardt once referred to the structure of America's wealth and income distribution as a "lottery"), and, as a result, favor egalitarian policies and entitlement programs.
Even so, most liberals are not pure redistributionists, and generally support policies that broaden opportunity for individual advancement, while few conservatives are entirely indifferent to the importance of income mobility and social opportunity. Liberal policies to advance individual opportunity tend to emphasize education, along with some job training efforts, to mixed effect. Meanwhile conservatives have tended to favor using the tax code to bring about rising incomes indirectly through higher rewards for capital investment in work effort. This much derided "trickle-down" approach has some evidence in its favor (for example, research showing the effect high corporate tax rates have on wage levels and wage growth). But even without settling that argument it can be noted that the supply-side string has been fully played out. Honest observers on the Right acknowledge the stagnation of middle-class incomes (though disagreeing on the causes).

I have written this paper in the hopes that my fellow conservatives will recognize the need for a conservative reformation, and I believe that liberals must follow suit.

For much more, see Modernizing Conservatism by Steven F. Hayward, Fall, 2011 at Breakthrough Journal.

Economics: The 10 Worst Economic Ideas of 2011

2011-12-23T09:32:00.003-08:00

2. Austerity works.
Is it conceivable that we have learned nothing from history -- or from economic theory, for that matter? It is hard to believe that after a year or so of the momentary return of Keynesianism in the wake of the deep recession of 2007-2009, it has been utterly renounced in practice in most rich nations around the world. The U.S. refuses to adopt a new fiscal stimulus as fears of a long-term deficit now determine short-term policy.
The eurozone's decision makers are even more obtuse and dangerous. Germany is leading the pack by imposing harsh limits on deficits as a percent of GDP on member states, which is sure to lead to slow growth and probably growing deficits. In the near term, the refusal to restructure the debt of the southern periphery along with demands for harsh austerity there could lead to a break-up of the eurozone and general catastrophe.
...
IMF economists have recently produced solid research putting the lie to claims that austerity has led to rapid growth in some countries in the past. It almost never has, and in the couple of cases it has, it was because the countries devalued their currencies sharply to promote exports. Of course, there will be no devaluations in the eurozone.

7. The Medicare eligibility age should be raised.
Reports had it that President Obama had momentarily agreed to raise the Medicare eligibility age from 65 to 67. Indeed, a New York Times editorial recently seemed (a little less than wholeheartedly) to endorse the idea. Yes, this might reduce Medicare expenditures, but it would raise the total amount Americans spend on health care. In fact, the Kaiser Family Foundation figures it would increase private health care costs for most of the seniors leaving Medicare by more than $2,000 a year on average. There would be other cost-raising effects, as, for example, healthier seniors left Medicare. Kaiser figures the increase in total health spending by Americans would be twice the amount of savings to Medicare. And of course some seniors would simply give up coverage. Call it triage.

For more, see The 10 Worst Economic Ideas of 2011 by Jeff Madrick, December 22, 2011 at The Huffington Post.

Education: Law Schools

2011-12-23T09:32:00.001-08:00

The debate about legal education has focused on tuition costs in the stratospheric layers of the law-school world. But what of the ground floor? Duncan hopes to draw students from economically distressed parts of the country, including the Appalachian Mountains of Tennessee, and sincere efforts have been made to keep overhead to a minimum.
But tuition here is still $28,664 a year. With living expenses and various fees, the student handbook warns, the total price tag for a year runs $50,000.
The reason, according to Pete DeBusk, a retired businessman and the school's main benefactor, is the A.B.A. standards. Without them, he says, Duncan could have cut its tuition in half, maybe by two-thirds.

... the United States churns out roughly 45,000 lawyers a year, but survey after survey finds enormous unmet need for legal services, particularly in low- and middle-income communities. This year, the World Justice Project put the United States dead last among 11 high-income countries in providing access to civil justice.

Nashville School of Law [is] a night school that started as the Nashville Y.M.C.A. Night Law School in 1911. Nashville's graduates are not recruited by large corporate firms. Most will remain in Tennessee, because only a few states deem a diploma from a school that lacks A.B.A. accreditation as a ticket to practice.
But tuition costs $21,000 — in total, for all four years it takes to complete the degree. The reasons? Nobody has tenure. There are no full-time professors. The library costs $65,000 a year.
Our mission from Day 1, says Virginia M. Townzen, associate dean, was to provide a quality, affordable education to those who might not otherwise be able to attend law school.
The graduates get high marks from local judges, including Lawrence H. Puckett of the 10th Judicial District of Tennessee. Some of our more outstanding practitioners have come through the Nashville School, he said. Many of the teachers are judges that I know, and I'm sure they are excellent instructors. But I think it's also the quality of students. They persevere while also holding down a job. That speaks highly of their character.

For more, see The Price to Play Its Way by David Segal, December 17, 2011 at NYTimes.com.

Mind: I Was Wrong, and So Are You

2011-12-21T18:10:00.000-08:00

Back in June 2010, I published a Wall Street Journal op-ed arguing that the American left was unenlightened, by and large, as to economic matters. Responding to a set of survey questions that tested people's real-world understanding of basic economic principles, self-identified progressives and liberals did much worse than conservatives and libertarians, I reported. To sharpen the ax, The Journal titled the piece Are You Smarter Than a Fifth Grader?—the implication being that people on the left were not.

I'm a libertarian, and I found it easy to believe that people on the left had an especially bad grasp of economics.

But one year later, in May 2011, Buturovic and I published a new scholarly article reporting on a new survey. It turned out that I needed to retract the conclusions I'd trumpeted in The Wall Street Journal. The new results invalidated our original result: under the right circumstances, conservatives and libertarians were as likely as anyone on the left to give wrong answers to economic questions. The proper inference from our work is not that one group is more enlightened, or less. It's that myside bias—the tendency to judge a statement according to how conveniently it fits with one's settled position—is pervasive among all of America's political groups. The bias is seen in the data, and in my actions.

Buturovic and I largely refrained from replying to the criticism (much of which focused on myside bias) that followed publication of the article. Instead, we planned a second survey that would balance the first one by including questions that would challenge conservative and/or libertarian positions.

Buturovic began putting all 17 questions to a new group of respondents last December. I eagerly awaited the results, hoping that the conservatives and especially the libertarians (my side!) would exhibit less myside bias. Buturovic was more detached. She e-mailed me the results, and commented that conservatives and libertarians did not do well on the new questions. After a hard look, I realized that they had bombed on the questions that challenged their position. A full tabulation of all 17 questions showed that no group clearly out-stupids the others. They appear about equally stupid when faced with proper challenges to their position.

For more, see I Was Wrong, and So Are You by Daniel B. Klein, December, 2011 at The Atlantic.

Security: Iran Hijacked Us Drone, Says Iranian Engineer

2011-12-21T18:08:00.001-08:00

Iran guided the CIA's "lost" stealth drone to an intact landing inside hostile territory by exploiting a navigational weakness long-known to the US military, according to an Iranian engineer now working on the captured drone's systems inside Iran.
Iranian electronic warfare specialists were able to cut off communications links of the American bat-wing RQ-170 Sentinel, says the engineer, who works for one of many Iranian military and civilian teams currently trying to unravel the drone's stealth and intelligence secrets, and who could not be named for his safety.
Using knowledge gleaned from previous downed American drones and a technique proudly claimed by Iranian commanders in September, the Iranian specialists then reconfigured the drone's GPS coordinates to make it land in Iran at what the drone thought was its actual home base in Afghanistan.

For more, see Exclusive: Iran Hijacked Us Drone, Says Iranian Engineer by Scott Peterson and Payam Faramarzi, December 15, 2011 at CSMonitor.com.

International: Israel's Culture War

2011-12-19T11:07:00.000-08:00

Gideon Levy, a powerful liberal voice, writing in Haaretz, the Israeli daily, this week [said] that anyone who says this is a matter of a few inconsequential laws is leading others astray. ... What we are witnessing is w-a-r. This fall a culture war, no less, broke out in Israel, and it is being waged on many more, and deeper, fronts than are apparent. It is not only the government, as important as that is, that hangs in the balance, but also the very character of the state.

For more, see Newt, Mitt, Bibi and Vladimir by Thomas L. Friedman, December 13, 2011 at NYTimes.com.

Economics: Analysis: China's $300 Billion Fund a Wake-up Call to U.S.

2011-12-19T11:06:00.000-08:00

China's plan for a new $300 billion sovereign wealth fund is as much a warning to Washington as it is a body blow to Brussels.
It's the clearest sign yet of Beijing's waning faith in bonds issued by Europe and the United States. Europe's festering debt debacle, record low yields on U.S. Treasuries and a depreciating dollar all add weight to the view in China that the time is ripe to change investment tack.
"China has decided that real assets are better than broken debt fix promises and low interest rates," says Paul Markowski, president of MES Advisers and a long-time external adviser to China's monetary policymakers on global financial markets.

"They want underlying assets. Equities, corporate bonds, real estate ...."

For more, see Analysis: China's $300 Billion Fund a Wake-up Call to U.S. by Reuters, December 14, 2011 at NYTimes.com.

Taxes: Taxing Wages Instead of Wealth

2011-12-12T08:27:00.000-08:00

Wow!

I compared the taxes of two hypothetical married couples for tax year 2011. Mr. and Mrs. Owner received $90,000 in taxable, qualified dividends, and Mr. and Mrs. Worker received $90,000 in wages. Neither couple had any other income, and both took the standard deduction and had no dependents, adjustments, nor credits, and live in Nevada, which has no state income tax. Each had a taxable income of $71,000 after a $11,600 standard deduction and $7,400 in exemptions.

The Owners owed $300 in federal income tax according to my tax software.

The Workers owed $10,006 in federal income tax + $5,085 in payroll taxes for a total of $15,091.

But if there weren't a temporary Social Security tax cut for 2011, the Workers would have paid $1,800 more, for a total of $16,891 out of their pocket.

And that does not include another $6,885 in payroll taxes their employer would have paid, for a grand total of $23,776 in taxes due to $90,000 in wages.

The calculations for Mr. and Mrs. Worker:

 10,006  federal income tax
+ 1,305  Medicare tax  (1.45% of 90,000)
+ 3,780  Social Security tax  (4.2% of 90,000)
--------
 15,091  tax paid out of their pocket for 2011
+ 1,800  Social Security if wasn't a tax break  (2.0% of 90,000)
--------
 16,891  tax out of their pocket if 2011 were a "normal" year
+ 6,885  employer payroll tax  (1.45% + 4.2% + 2.0% of 90,000)
--------
 23,776  total for the Workers and employer in a normal year

International: Democracy in Hungary

2011-12-12T08:26:00.001-08:00

One of Hungary's major parties, Jobbik, is a nightmare out of the 1930s: it's anti-Roma (Gypsy), it's anti-Semitic, and it even had a paramilitary arm. But the immediate threat comes from Fidesz, the governing center-right party.
Fidesz won an overwhelming Parliamentary majority last year, at least partly for economic reasons; Hungary isn't on the euro, but it suffered severely because of large-scale borrowing in foreign currencies and also, to be frank, thanks to mismanagement and corruption on the part of the then-governing left-liberal parties. Now Fidesz, which rammed through a new Constitution last spring on a party-line vote, seems bent on establishing a permanent hold on power.
The details are complex. Kim Lane Scheppele, who is the director of Princeton's Law and Public Affairs program — and has been following the Hungarian situation closely — tells me that Fidesz is relying on overlapping measures to suppress opposition. A proposed election law creates gerrymandered districts designed to make it almost impossible for other parties to form a government; judicial independence has been compromised, and the courts packed with party loyalists; state-run media have been converted into party organs, and there's a crackdown on independent media; and a proposed constitutional addendum would effectively criminalize the leading leftist party.
Taken together, all this amounts to the re-establishment of authoritarian rule, under a paper-thin veneer of democracy, in the heart of Europe. And it's a sample of what may happen much more widely if this depression continues.

For more, see Depression and Democracy by Paul Krugman, December 11, 2011 at NYTimes.com.

Politics: For and Against Newt

2011-12-10T16:23:00.001-08:00

From a very good analysis you might want to read ...

Of all the major Republicans, the one who comes closest to my worldview is Newt Gingrich. Despite his erratically shifting views and odd phases, he continually returns to this core political refrain: He talks about using government in energetic but limited ways to increase growth, dynamism and social mobility.

But how you believe something is as important as what you believe. It doesn't matter if a person shares your overall philosophy. If that person doesn't have the right temperament and character, stay away.

From The Gingrich Tragedy by David Brooks, December 8, 2011 at NYTimes.com.

International: China Sovereign Fund Has About 60% of Assets in U.S.

2011-12-10T16:22:00.001-08:00

China Investment Corp., the nation's sovereign wealth fund, has about 60% of its assets in the U.S., which has many investment opportunities and a good legal system, Jin Liqun told CNBC in an interview yesterday.
Jin, chairman of CIC's supervisory board, said that much of the rest of the fund's assets are in Europe, other nations in Asia and Canada, with investments in resources, real estate and open market transactions.

For more, see China Sovereign Fund Has About 60% of Assets in U.S., JIN Says by Joshua Fellman and Sylvia Wier, December 9, 2011 at Washington Post Business Page.

Great Recession: Separating Fact from Fiction on the Fed's Loans

2011-12-08T08:24:00.001-08:00

It sounds like a great story: The Federal Reserve lent the banks $7.7 trillion during the financial crisis. And Congress wasn't told.
But it isn't true. Even if Jon Stewart says otherwise.
The Fed and the taxpayers did bail out the banks, including some that occasionally pretend otherwise today. The Fed lent enormous sums: $1.6 trillion in emergency loans and individual bailouts at the December 2008 peak. The Fed has been too secretive in the past. The Fed deserves some blame for not preventing the crisis. The Fed executed some aggressive plays during the crisis that demand post-game scrutiny.
But lending against collateral to solvent, but cash-short, banks during a panic isn't among the Fed's more controversial moves. That's what central banks have done since 19th-century England. And the Fed didn't lend anywhere near $7.7 trillion. Nor did it keep the size of its lending secret, though it did unsuccessfully try to keep the borrowers' identities secret.

For more, see Separating Fact from Fiction on the Fed's Loans by David Wessel, December 7, 2011 at WSJ.com.

Diversion: The Beauty of Pollination

2011-12-06T08:33:00.003-08:00

A beautiful video of the birds and the bees (and the bats and the butterflies) ...

Contributed by Pat W. from The Beauty of Pollination by mdemirst, at YouTube.

Government: The Wonky Liberal

2011-12-06T08:33:00.001-08:00

Republicans have many strong arguments to make against the Obama administration, but one major criticism doesn't square with the evidence. This is the charge that President Obama is running a virulently antibusiness administration that spews out a steady flow of job- and economy-crushing regulations.

Over all, the Obama administration has significantly increased the regulatory costs imposed on the economy. But this is a difference of degree, not of kind.
During the final year of their administrations, presidents generally issue tons of new rules. Nineteen-eighty-eight, under Ronald Reagan, 1992, under George H.W. Bush and 2008, under George W. Bush, were monster years for new regulations. In his first years, Obama has not increased regulatory costs more than Reagan and the Bushes did in their final years.
Data collected by Bloomberg News suggest that the Obama White House has actually reviewed 5% fewer rules than George W. Bush's did at a similar point in his presidency. What has increased is the cost of those rules.
George W. Bush issued regulations over eight years that cost about $60 billion. During its first two years, the Obama regulations cost between $8 billion and $16.5 billion, according to estimates by the administration itself, and $40 billion, according to data collected, more broadly, by the Heritage Foundation.
That's a significant step up, as you'd expect when comparing Republican to Democratic administrations, but it is not a socialist onslaught.
Nor is it clear that these additional regulations have had a huge effect on the economy. Over the past 40 years, small business leaders have eloquently complained about the regulatory burden. And they are right to. But it's not clear that regulations are a major contributor to the current period of slow growth.
The Bureau of Labor Statistics asks companies why they have laid off workers. Only 13% said regulations were a major factor. That number has not increased in the past few years. According to the bureau, roughly 0.18% of the mass layoffs in the first half of 2011 were attributable to regulations.

For more, see The Wonky Liberal by David Brooks, December 5, 2011 at NYTimes.com.

Economics: Why Germans Fear Inflation

2011-12-03T06:22:00.001-08:00

By robbing a currency of its value, inflation wipes the slate clean for debtors and savers alike. Germans say they like the slate the way it is because they are on the plus side of the ledger.
Consumer debt, whether credit cards or in many cases even home mortgages, is frowned upon here. According to figures of the Organization for Economic Cooperation and Development, the German savings rate was more than 10% every year between 2003 and 2009, while during the same period it bottomed out at 1.5% in the United States, and never rose above 6.2%. As a result German households had net savings of $4.3 trillion, according to the Bundesbank, in a country of fewer than 82 million people.
Germans own homes at a lower rate, 41.6%, than the 66.3% of Americans who do. And most people do not invest in the stock market here.
For the average American, inflation means the home price is increasing and the value of debt is going down, said Peter Bofinger, a prominent economist on Mrs. Merkel's independent council of economic advisers, whereas the German invested in life insurance and sitting in an apartment he rented is much more vulnerable to inflation.

For more, see German Fears About Inflation Stall Bold Steps in Debt Crisis by Nicholas Kulish, December 1, 2011 at NYTimes.com.

Government: Gingrich and the Destruction of Congressional Expertise

2011-12-03T06:21:00.001-08:00

On Nov. 21, Newt Gingrich, who is leading the race for the Republican presidential nomination in some polls, attacked the Congressional Budget Office. In a speech in New Hampshire, Mr. Gingrich said the C.B.O. is a reactionary socialist institution which does not believe in economic growth, does not believe in innovation and does not believe in data that it has not internally generated.
Mr. Gingrich's charge is complete nonsense. The former C.B.O. director Douglas Holtz-Eakin, now a Republican policy adviser, labeled the description ludicrous. Most policy analysts from both sides of the aisle would say the C.B.O. is one of the very few analytical institutions left in government that one can trust implicitly.
It's precisely its deep reservoir of respect that makes Mr. Gingrich hate the C.B.O., because it has long stood in the way of allowing Republicans to make up numbers to justify whatever they feel like doing.
For example, Republicans frequently assert that tax cuts, especially for the rich, generate so much economic growth that they lose no revenue. This theory has been thoroughly debunked, most recently by the tax cuts of the George W. Bush administration, which, according to C.B.O., reduced revenues by $3 trillion. Nevertheless, conservative groups like the Heritage Foundation (where I worked in the 1980s) still peddle the snake oil that the Bush tax cuts paid for themselves.

Mr. Gingrich's unprovoked attack on the C.B.O. is part of a pattern. He disdains the expertise of anyone other than himself and is willing to undercut any institution that stands in his way. Unfortunately, we are still living with the consequences of his foolish actions as speaker.

For much more, see Gingrich and the Destruction of Congressional Expertise by Bruce Bartlett, November 29, 2011 at Economix.

Diversion: Pearls Before Swine

2011-12-01T07:50:00.001-08:00

From Pearls Before Swine by Stephan Pastis, November 22, 2011 at GoComics.

Mind: The Certainty of Memory Has Its Day in Court

2011-12-01T07:49:00.001-08:00

For scientists, memory has been on trial for decades, and courts and public opinion are only now catching up with the verdict. It has come as little surprise to researchers that about 75% of DNA-based exonerations have come in cases where witnesses got it wrong.

While most of us tend to think memory works like a video recorder, it is actually more like a grainy slide show. Lost details, including imaginary ones, often are added later. One of the earliest and more famous experiments to demonstrate that memories are malleable was conducted by Elizabeth Loftus, a psychology professor at the University of California, Irvine, and an early pioneer of witness memory research.
In a 1974 study published in The Journal of Verbal Learning and Verbal Behavior, she asked participants to view films of fender-benders in which no car windows or headlights were broken. Later, the subjects who were asked how fast the cars were going when they smashed into each other — as opposed to hit — were more likely to report speeding and describe shattered glass they never actually saw.
In another experiment, conducted in Scotland, participants were four times as likely to report a memory of a nonexistent event — in this case, a nurse removing a skin sample from their little finger — if they had been asked to imagine it just one week before. Others in the experiment read a description, but were not asked to picture it happening.
Even the process of police questioning and prepping for trial can crystallize a person's own faulty reconstruction. In 2000, Dr. Tversky published a series of experiments conducted at Stanford University in the journal Cognitive Psychology. In one, volunteers read profiles of fictitious roommates with both charming and annoying habits; they were then asked to write either a letter of recommendation or letter making a case for a replacement.
When later asked to repeat the original description, the volunteers' recollections were skewed by the type of letter they had written. Their minds had shed qualities that didn't match the first draft of their own recall and had embellished those that did.
When we don't remember, we make inferences, Dr. Tversky said.
Sometimes we miss details because we weren't paying attention, but sometimes we are concentrating too hard on something else. Nothing is as obvious as it seems.

All this makes sense, he said, when you consider the purpose of memory. He and his colleagues believe that memory is designed not just to keep track of what has happened, but to offer a script for something that might.
Evidence for this also comes from brain scans. Just as the recall of a bogus event lights up the brain's memory centers, so does thinking about something that might occur.
Because the brain uses memories for mental dress rehearsal, we are not wired to retain every facet of an event, scientists say. We don't have to. A general framework is all that's necessary to keep from getting lost, or find food, or know what to do when a storm is coming.

For more, see The Certainty of Memory Has Its Day in Court by Laura Beil, November 28, 2011 at NYTimes.com.

Tax: Tax Financial Transactions?

2011-11-29T11:34:00.001-08:00

... then there's the idea of taxing financial transactions, which have exploded in recent decades. The economic value of all this trading is dubious at best. In fact, there's considerable evidence suggesting that too much trading is going on. Still, nobody is proposing a punitive tax. On the table, instead, are proposals like the one recently made by Senator Tom Harkin and Representative Peter DeFazio for a tiny fee on financial transactions.

... some countries already have financial transactions taxes — and that among those who do are Hong Kong and Singapore.

For more, see Things to Tax by Paul Krugman, November 27, 2011 at NYTimes.com.

Health: Over Time, Even a Little Too Much Tylenol Can Kill

2011-11-29T11:33:00.002-08:00

When it comes to acetaminophen (aka Tylenol or paracetamol), taking slightly too much for a few days may be more deadly than taking way too much all at once.

A staggered overdose was defined as an average of 4 grams per day (8 extra strength pills). Although such an overdose can even occur after one day, the average staggered overdose patient consumed a total of 24 grams.
The chemical used to treated acetaminophen poisoning, N-acetyl cysteine, is meant to protect the liver from the damage of a single overdose, and is unlikely to help patients with staggered overdoses, the researchers write. By the time these patients reach the hospital, much of the damage may already be done.

For more, see Study: Over Time, Even a Little Too Much Tylenol Can Kill by Douglas Main, November 24, 2011 at 80beats.

California: Pension Tension

2011-11-29T11:33:00.000-08:00

Jerry Brown has rolled out his long-awaited proposal to reform publicly financed pensions for government workers, drawing protests from Republicans and Democrats alike.

As a policy matter, paying for pensions, at least in the short term, is a relatively modest problem given the massive scale of the state's fiscal woes; retirement costs account for just 3% of Sacramento's overall budget, and the average public pension is only about $26,000 a year, despite news stories highlighting a relatively small number of outrageous abuses. As a long-term issue, however, it is far more dire; one study estimates that state and local governments face an unfunded future pension liability of as much as $500 billion in California, and retirement costs for cities, counties, and special districts, which administer thousands of plans linked to the state's, are proportionately of much greater magnitude.

... the governor proposed major reforms to restructure the system, which he said would save taxpayers more than $10 billion over the next 30 years. Key elements include:
• Raising the retirement age for most new employees to 67; public workers between 50 and 62 currently can retire with full benefits, depending on the type of work they do.
• Splitting contributions to the system 50-50 between workers and government employers; employees typically now pay a smaller share, and some pay nothing.
• Adopting a hybrid system that would require taxpayers to fund a smaller portion of pensions for new employees, with more financed by private-sector—style 401(k) investment programs.

For more, see Pension Tension by Jerry Roberts, November 3, 2011 at Santa Barbara Independent.

Taxes: Would Doubling Taxes on the Rich Create More Jobs?

2011-11-25T09:12:00.000-08:00

... the top tax rate has been above 70% before, and the economy averaged better than 4% growth.

There are two ways you can interpret this graph. One is that high marginal tax rates seem to create growth! That's probably wrong. Two is that high marginal tax rates coincided with, and did not constrain, years of high growth in the 1950s and 1960s. That sounds more like it.

For more, see Would Doubling Taxes on the Rich Create More Jobs? by Derek-Thompson, November 23, 2011 at The Atlantic.

International: World Bank Issues Alert on Afghanistan Economy

2011-11-25T09:11:00.001-08:00

Afghanistan will suffer a recession in 2014 and beyond after foreign troops leave and aid dwindles, and if the security situation gets worse, the country could face complete economic collapse, according to an ominous report released in Kabul on Tuesday by the World Bank.

Afghanistan faces a difficult decision over whether to go ahead with plans to expand its security forces to 352,000 soldiers, or to scale back to leave more room in the budget for education, health care and infrastructure. There will not be enough money for both, the World Bank report indicates.

For more, see World Bank Issues Alert on Afghanistan Economy by Alissa J. Rubin, November 22, 2011 at NYTimes.com.

Society: Fatalism and the American Dream

2011-11-24T10:45:00.002-08:00

Of the five nationalities polled, Americans were least likely to believe that success in life was determined by forces outside our control.

Put another way, Americans are (not surprisingly) more likely to believe in the American dream.

These findings are particularly interesting when juxtaposed with a separate report from the Pew Economic Mobility project. That report, which examined economic and social mobility in 10 Western countries, found that Americans actually appear to have less control over their success in life than their counterparts do.
In particular, the educational attainment of a person's parents — a factor usually determined before that person's birth — seems to matter more for mobility in the United States.
“There is a stronger link between parental education and children's economic, educational and socio-emotional outcomes than in any other country investigated,” the report says.
As Richard Wilkinson suggested in a recent TED Talk, if you want to live the American dream — and have greater control over your own likelihood of success — you should probably move to Denmark, where the poor have a better chance of moving up in the world.

For more, see Fatalism and the American Dream by Catherine Rampell, November 23, 2011 at Economix.

Education: The Wrong Inequality

2011-11-24T10:45:00.000-08:00

in Scranton, Des Moines, Naperville, Macon, Fresno, and almost everywhere else. In these places, the crucial inequality is not between the top 1% and the bottom 99%. It's between those with a college degree and those without. Over the past several decades, the economic benefits of education have steadily risen. In 1979, the average college graduate made 38% more than the average high school graduate, according to the Fed chairman, Ben Bernanke. Now the average college graduate makes more than 75% more.
Moreover, college graduates have become good at passing down advantages to their children. If you are born with parents who are college graduates, your odds of getting through college are excellent. If you are born to high school grads, your odds are terrible.
In fact, the income differentials understate the chasm between college and high school grads. In the 1970s, high school and college grads had very similar family structures. Today, college grads are much more likely to get married, they are much less likely to get divorced and they are much, much less likely to have a child out of wedlock.
Today, college grads are much less likely to smoke than high school grads, they are less likely to be obese, they are more likely to be active in their communities, they have much more social trust, they speak many more words to their children at home.
Some research suggests that college grads have much bigger friendship networks than high school grads. The social divide is even starker than the income divide.

For more, see The Wrong Inequality by David Brooks, October 31, 2011 at NYTimes.com.

Diversion: Mystical India Vacation

2011-11-22T07:54:00.000-08:00

We just returned from this very interesting tour of northern India: Mystical India, 2011 at odysseys-unlimited.com -- with an extension to include the Pushkar Camel Fair.

Politics: How Should I Vote in the Republican Primaries 2012?

2011-11-22T07:53:00.003-08:00

To see which Republican candidate best matches your positions on issues, see How Should I Vote in the Republican Primaries 2012?, November 22, 2011 at The Telegraph.