Category Archives: Economics

My son-in-law’s study mentioned by The Atlantic

This morning I happened to be searching for something unrelated and came up with an article that appeared last week in The Atlantic. I skimmed it, and it suddenly started looking very familiar, right at this point:

There are more variables at play than just pronunciation, though. In competitive fields that have classically been dominated by men, such as law and engineering, women with sexually ambiguous names tend to be more successful. This effect is known as the Portia Hypothesis (named for the heroine of Shakespeare’s The Merchant of Venice who disguises herself as a lawyer’s apprentice and takes on the name Balthazar to save the titular merchant, Antonio). A study found that female lawyers with more masculine names—such as Barney, Dale, Leslie, Jan, and Rudell—tend to have better chances of winning judgeships than their more effeminately named female peers. All else being equal, changing a candidate’s name from Sue to Cameron tripled a candidate’s likelihood of becoming a judge; a change from Sue to Bruce quintupled it….

And sure enough, I followed the link and found that the study was one co-authored by my son-in-law, an economist who teaches at USC.

If I recall correctly, the idea for the study grew out of a conversation several years ago between him and my daughter, an attorney, regarding such female federal court judges in South Carolina as Bruce Hendricks and Cameron Currie. The subject was particularly, personally interesting to them both because it was about the time their twins were born. The twins are named for their great-grandmothers. Twin A is called by my wife’s mother’s unmistakably feminine first name. Twin B is known by my mother’s neutral maiden surname.

The twins are six-and-a-half now, so it’s a bit early to see whether Twin B will be a federal judge, while Twin A follows a different path. We’ll see. They’re just precious little girls right now…

What's in a name? The twins last week, trying to get their cousin to smile with them for the camera.

What’s in a name? The twins last week, trying to get their cousin to smile with them for the camera.

How delusional can some liberals be? There’s no limit…

Did you shake your head when you read this, which appeared under the Bizarro-World headline, “Clyburn too conservative?”

WASHINGTON — U.S. Rep. Jim Clyburn is used to political foes calling him liberal. They’ve been doing it for years. Now, though, prominent liberals are coming after him for being too conservative.

The patron saint of delusional Democrats.

The patron saint of delusional Democrats.

Several left-wing groups are criticizing South Carolina’s Clyburn, the No. 3 Democratic leader in the House of Representatives, for his relationship with one of the party’s influential centrist policy organizations.

The founders of that think tank, Third Way, attacked U.S. Sen. Elizabeth Warren, D-Mass., last week for pushing tax hikes for the rich and increases in Social Security benefits, and for taking other stances that they said represented risky fiscal approaches and bad political strategies.

Allies of Warren, a freshman lawmaker who is a rising star in Washington, struck back quickly.

Four liberal groups asked Clyburn of Columbia and 11 other Democratic members of Congress who are “honorary co-chairs” of Third Way to repudiate the condemnation of Warren and sever their ties with the organization…

Do you recall, back during the Democratic Convention last year, when I highly praised a speech by Bill “Third Way” Clinton? Aside from the fact that it may have been, as I said, the most skilled and powerful political speech yet in this century (and as I noted at the time, that was coming from “the editor who presided over an editorial board that was tied as first in the country to call on him to resign after he admitted lying to us”) — certainly the best I ever heard from Clinton — my positive impression of it was heightened by the fact that it followed an atrocious rant from Elizabeth Warren, which I characterized as follows: “She gave one of those speeches full of resentments and blame, the kind that makes me dislike political parties so much.”

Which is, you know, pretty much par for the course for her. These allies of hers, if anything, tend toward even sillier rhetoric:

“We’re calling on James Clyburn to do the right thing and immediately drop his affiliation with the Wall Street-backed Third Way…”

“Wall Street-backed” being a very powerful epithet among these people. Because, apparently, business is evil by its very nature in their belief system.

Embracing the Third Way.

Embracing the Third Way.

It’s interesting to me that, just as John Boehner is finally reining in the loonies in his party — and they’ve been on quite a rampage for several years now — the left wing of the Democratic Party is going on a delusional tear of its own.

The only way this embrace of Sen. Warren as presidential timber for 2016 makes sense for Democrats is that it would provide Hillary Clinton with a way of looking sensible and mainstream by contrast (which she is, by contrast), putting her in a strong position for the general election.

But I don’t think these folks are thinking that way. I think they actually believe Sen. Warren represents a direction in which they can pull the country. Hence my use of the word, “delusional.”

Tweeting from ULI’s Midlands Reality Check

Here's what the Midlands look like now, translated into ULI's Lego language.

Here’s what the Midlands look like now, translated into ULI’s Lego language.

That’s where I am this morning, so excuse me if I’m not keeping up with y’all for a few hours.

It’s a worthwhile exercise, I believe — 300 community leaders from across eight counties gathering to talk about growing by choice, not by chance.

I’ll catch up with y’all when the exercise is over. If you’re interested in the meantime, follow @BradWarthen on Twitter…

Another rating service considers downgrading U.S. credit

Some people just can’t wait for the U.S. to actually default. From Forbes:

Is history about to repeat itself? As the government squabbles over the debt deal and raising the debt ceiling, the U.S. creditworthiness finds itself at risk of a credit downgrade.

Late Tuesday afternoon, Fitch credit rating service announced that it put the U.S. on credit rating watch negative because of government failure to raise the debt ceiling in a “timely” manner. The ratings service affirmed the U.S. credit rating at AAA — a rating that it retained in the face of the debt ceiling debate in 2011 — but the announcement puts the U.S. credit rating at risk for a downgrade….

The last time there was a debate over the debt ceiling, in July of 2011,  Standard & Poor’s downgraded the U.S. credit rating for the first time in its history, taking it from a AAA to an AA+ and throwing the markets in turmoil. At that time, Moody’s and Fitch retained a rating of AAA. Earlier in October, Moody’s said that the current debt ceiling debate is less dire than that of 2011 and said that the U.S. creditworthiness would not be at risk this time around. Fitch, however, clearly disagrees….

Following Fitch’s announcement, Dow futures plummeted triple digits. Futures of the S&P and Nasdaq were also in the red.

And here’s the WSJ version…

Profile in Courage, 2013 edition: Boehner promises to do the right thing to avoid default

First, I want to applaud Speaker John Boehner for promising to do the right thing, at least with regard to a default that could devastate the world economy:

With a deadline for raising the debt limit fast-approaching, House Speaker John A. Boehner (R-Ohio) has been telling colleagues in recent days that he will do whatever necessary to avoid defaulting on the federal debt, including relying on House Democrats to help pass an extension, according to GOP aides familiar with the conversations…

But after I’m done applauding the speaker for his courage, let’s have a moment of silence to mourn how low the “courage” bar is these days.

What that says is that the speaker of the House promises he will work with all of his willing colleagues, regardless of party, for the sake of the nation — to make sure that a terrible, needless thing does not happen to the country and the world.

That should be business as usual. Once upon a time, it would have been (in support of that statement, I submit the fact that the United States has never before defaulted in its 237-year history).

But today — and this just makes me sick — it’s extraordinary. In the U.S. House Republican caucus, it is seen as political suicide to work with Democrats, even on something of critical importance to the country.

So yay, Mr. Speaker. And here’s hoping and praying that we’ll live to see the day when this sort of behavior is once again sufficiently common that we have no reason to take note of it…

Consensus starts to emerge: House GOP is loony

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Even Paul Krugman — who is such a bitter, contemptuous partisan that I avoided running his columns at the newspaper — thought maybe he was going overboard a bit by calling the GOP’s maneuvers on funding Obamacare and the rest of government “crazy:”

In recent months, the G.O.P. seems to have transitioned from being the stupid party to being the crazy party.

I know, I’m being shrill. But as it grows increasingly hard to see how, in the face of Republican hysteria over health reform, we can avoid a government shutdown — and maybe the even more frightening prospect of a debt default — the time for euphemism is past…

But aside from the typically Krugmanesque assertion that the GOP was stupid before it was crazy (everyone who disagrees with Krugman is stupid — just ask him; he’ll tell you), the economist really wasn’t going out on much of a limb in this instance.

He was simply stating something that seems to be emerging as a consensus across the political spectrum. Among people who have clue, that is.

While his language is milder, Gerald Seib, writing in that wild-eyed liberal publication The Wall Street Journal, is similarly dismissive of the sanity of GOP House members’ actions:

The list of conservatives who didn’t want the House to do what it did late last week—that is, pass a bill trying to defund Obamacare, at the risk of shutting down the government—is long and distinguished: Karl Rove, Rep. Pete King, Sen. John McCain, the editorial page of this newspaper, even the House’s own Republican leadership.

But House Republicans went ahead anyway, passing a bill tying the financing of government operations starting Oct. 1 with the removal of money for implementing the new health law. The bill won’t pass the Senate, and it won’t be signed by the president, but it may lead to a partial closure of the government that many believe would be politically disastrous for the Republican Party.

Which raises again the question that animates much of the conversation in the capital: Why do House Republicans do the things they do?..

He goes on to answer himself with a primer on what most of us already understand about House Republicans. Basically, that these people’s experience of government doesn’t precede the existence of the Tea Party, and that they are elected from districts that are so safe for a Republican that a GOP member need only fear a primary challenge. Stuff, as I said, we knew already. Although he reminded me of a fact I had forgotten if I knew it: That these districts are SO grossly gerrymandered that Republican candidates in the aggregate “lost the popular vote for the House in 2012 by more than a million votes nationally, yet kept control of the House by 33 seats.” (Although I see this writer disagrees that redistricting was the culprit.)

Then there is Judd Gregg, a Republican and former senator from New Hampshire, who writes for The Hill:

Most Americans these days are simply ignoring Republicans. And they should.

The self-promotional babble of a few has become the mainstream of Republican political thought. It has marginalized the influence of the party to an appalling degree.

An approach to the debt ceiling that says one will not vote for its extension unless ObamaCare is defunded is the political equivalent of playing Russian roulette with all the chambers of the gun loaded. It is the ultimate no-win strategy….

… which almost makes Krugman sound temperate. Gregg continues:

You cannot in politics take a hostage you cannot shoot. That is what the debt ceiling is. At some point, the debt ceiling will have to be increased not because it is a good idea but because it is the only idea.

Defaulting on the nation’s obligations, which is the alternative to not increasing the debt ceiling, is not an option either substantively or politically…

He goes on to write about the destruction that defaulting on our debt would wreak on the world’s economy — something about which the babbling infants in the House (half of the GOP members have been there less than three years) and their fellow loony in the Senate, Ted Cruz, care not at all.

The people who elected them, and who will vote for someone crazier in a GOP primary if these individuals don’t act with gross irresponsibility, don’t know or care what sort of harm their actions could bring about, so they don’t know or care, either. This is apparently regarded, by at least one writer at RedState, as a good thing.

Here’s how James Taranto, whose standard tone in his Best of the Web Today column at the WSJ is every bit as dismissive of the left as Krugman is of the right, characterizes Ted Cruz’s effort to support the House GOP effort to defund Obamacare. After noting the commonsense fact that there is “no realistic prospect of enacting the House resolution,” he writes:

Instead of playing possum, a group of Senate Republicans led by Texas freshman Ted Cruz propose to play Otter: “I think we have to go all out. I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part!“…

Taranto then casts Sarah Palin in the role of Bluto, given her op-ed at Breitbart.com in which she essentially said, “We’re just the guys to do it.”

OK, so from the left and the right, we’re seeing such modifiers as “crazy,” “futile,” stupid,” and “appalling.”

To all of those qualities, let us add disingenuousness. Here is the entire text of a release that Joe Wilson, my congressman, sent out on Friday:

Wilson: Senate and President Must Act

 

(Washington, DC) – Congressman Joe Wilson (SC-02) released the following statement after the House passed the Continuing Resolution which funds the government through December 15, 2013.

“Today, House Republicans have acted responsibly by passing a solution to keep the government’s doors open.  Because of our efforts, American families are protected from the unworkable, unaffordable healthcare law and hardworking taxpayers can rest assured that our nation will stop spending beyond its means.

 

“It’s time for the Senate and the President to act.   Time is ticking. We have ten short days until the federal government’s funding will expire. Senate Democrats should follow our lead and join us in protecting the American people, rather than placing politics over policy and threatening a government shutdown,” Congressman Joe Wilson said.

Note that only a passing reference is made to the actual point of the resolution for House Republicans: “…American families are protected from the unworkable, unaffordable healthcare law…” What an odd choice of words: “protected from.” He avoids saying what the measure does, which is deny funding to a program that is set in place by law — a law which he and his allies have demonstrated, an amazing number of times, that they are utterly incapable of repealing.

Then there is the really, truly cheesy dodge of making like it’s all on the president and the Senate whether the government is funded or not. Who are the children that Joe and the other Republicans who voted for this think will be fooled by that? Who will think, if the government shuts down, that anything other than the GOP obsession with Obamacare is to blame?

These guys are far gone. And everyone, on left and right, except them, seems to know it.

How many people in the country do you suppose really, truly know whether Janet Yellen is best qualified?

Certainly not I. But you see, I strongly doubt that most of the people really stirred up about her candidacy for the Fed do, either.

This is stimulated by a couple of things. One of which is the withdrawal of Larry Summers — the candidate the president wanted — from consideration for Ben Bernanke’s job, for “reasons” that seem kinda sketchy.

Then, there was this email this morning:

Hi Brad,

Now that Larry Summers — the President’s Rock of Gibraltar — has withdrawn himself from consideration for the top Fed job, he should — in for a penny, in for a pound — do everything he can to make sure that Janet Yellen gets the job. Summers should privately tell the President that Yellen is the best choice (because she is), he should aggressively lobby Senators from both parties to support Yellen (because they still listen to him, even though they don’t want to), and he should publicly endorse her for the job.

Just think: if the President nominates Janet Yellen to the Fed, Republican Senators will have no choice but to vote to confirm her or to face the wrath of American women at the voting booth. And even the GOP isn’t that stupid. I mean seriously, hell hath no fury like women scorned by a bunch of old white male Republican Senators stopping the confirmation of the first female Fed Chair in American history.

So if Larry comes out and supports the best person for the job…a historic President gets to make a historic appointment…the country gets the most qualified person to run monetary policy…Republicans suffer apoplectic seizures while being forced to do the right thing or cost themselves the women’s vote for the next 20 years…and Larry Summers gets to redeem himself with 51% of the population (even those oh-so-hard-to-please Harvard feminists).

Everybody wins.

Come on Larry, be a real man, support Janet.

-Erica

No, I don’t know who this Erica is when she’s at home, either. Even after finding this page. Near as I can tell, she’s some sort of professional “progressive.”

Nor, as I say, do I know anything about this Janet Yellen, although at a glance her resume seems a good fit. But so did Summers’.

And following the link my new BF Erica sent me, I see that the reasons given for Democrats not liking Summers were pretty weak. I find myself focusing on this:

Some Democrats are not keen on Summers as a candidate for the job, arguing that he was too supportive of deregulation during the Clinton administration. Nineteen Democratic senators – joined by an independent – signed a letter last week urging the president to instead consider Fed Vice Chairman Janet Yellen. Other candidates may in the mix as well.

“He is really a non-starter for us,” one senior Democratic staffer said of Summers.

Really? I have to say that any Democrat who would not want to return to the policies of the Clinton era — a time of balancing budgets, a booming economy and triangulating the Republicans silly — is a few bricks shy of a load. I’ll never quite understand what motivates these Democrats who think the people they manage to get elected aren’t lefty enough. Something they’re all smoking, I suspect.

Of course, we have reason to suspect it’s not really about that. That isn’t the emotional center for these rather gut-led people, is it? Isn’t it about that all that hoo-hah at Harvard? Erica seems to refer to that with her appeal to Larry to “redeem himself with 51% of the population,” which is the kind of hyperbole we have come to expect with people who think Summers said something horrid. Frankly, when I go back and look at what he actually did say, it’s so dense that I find myself wanting someone to interpret it for me from the academese. And I suspect any set of people constituting “51% of the population” would have the same problem. And “interpreters” play a big role in this. Most of the people who are truly indignant toward Summers — which I sincerely doubt is anything close to a majority of the country, or even of women — are mad about what someone said he said, rather than what he said.

In any case, he’s out and some people who look at things in simplistic terms are going “Yay!” and thinking this means Janet Yellen is in, although that’s not necessarily the way the president is going to go.

Far as I know, she’s the best candidate. But I know that I don’t know enough to judge that. (I know that my gut feeling that she’d be good is just a prejudice on my part — I tend, other things being equal, to cheer for in-house candidates, and she already works there.)  And I marvel that so many other people seem to think they do…

What if I’d come back in 2013? Would I have been impressed? I think not…

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Some seemed to doubt the premise of the preceding post about how static and dull and lifeless popular culture has become (or at least, to discount the importance of it). But to someone who was young in the ’60s, there’s something very weird about living in a time when a photograph of people 20 years ago would look no different from a photo today (assuming you could get them to look up from their smartphones for a second during the “today” picture).

As I said in a comment on that post…

I’ve written in the past about how enormously exciting I found American pop culture when I returned here in 1965 after two-and-a-half years in South America without television. My words in describing it are probably inadequate. It was so amazingly stimulating, as though all my neurons were on fire. It was like mainlining some drug that is so far unknown to pharmacology, one that fully engages all of your brain.

If I had returned at that same age in 2013 rather than ’65 — meaning I had left the country in March 2011 — I doubt it would have been such a huge rush. It would be like, “Oh, look: The latest iPhone does some minor stuff that the old one didn’t. And now we have 4G instead of 3G. Whoopee.”

Most of the big movies would be sequels of the big movies when I left — or “reimaginings” of Superman or Spiderman. The best things on TV would still be “Mad Men” and “Breaking Bad.” “Firefly” would still be canceled. I’d be disappointed that “Rubicon” had only lasted one season. And I’d marvel at the fact that, with hundreds of channels out there, everything good was on one: AMC. (HBO hasn’t impressed me since “The Sopranos,” and that would have been over years before I left the country.) “The Walking Dead” would be new to me. Again, whoopee.

I just can’t imagine what I’d grab hold of and say, “Wow, THIS is different and exciting…”

But consider this list of things that I saw and heard for the first time in 1965, either immediately when I got back into the country, or over the next few months:

  • James Bond – who was enormously important to my friends and me, and who did a lot toward defining the decade (just ask Austin Powers), and who embodied much of what “Mad Men” recaptures about the decade. Yes, Bond had been around earlier, but I had never heard of him before the film “Dr. No,” which I actually saw on the ship on my way down to Ecuador. Which I did not enjoy. I didn’t really get Bond, as something that interested me, until “Goldfinger.”
  • Really exciting new cars that changed dramatically from model year to model year. I had seen ONE Mustang, parked outside the Tennis Club in Guayaquil, and I thought it was awesome. I’d never seen a Sting Ray, and the ’65 model was particularly cool…
  • Not just the Beatles, but the entire British Invasion – the Stones, Herman’s Hermits, The Dave Clark Five, Freddie and the Dreamers, the Animals, Tom Jones, Petula Clark. Just those few names illustrate the tremendous diversity of styles just within that one category we describe as the “Invasion.”
  • Folk rock – The Byrds, Chad & Jeremy, Simon and Garfunkel, and so on.
  • Beach music, West coast – The Beach Boys, Jan & Dean, the Surfaris
  • Gimmick bands – Paul Revere and the Raiders, Sam the Sham and the Pharoahs, etc.
  • One-hit wonders – Much of the vitality of the era was personified by such groups as ? and the Mysterians, the Standells and the Troggs (OK, all three of their hits were technically in ’66. But consider such one-time hits of 1964 and 65 as “The Girl from Ipanema,” “Eve of Destruction,” “Keep on Dancing,” “Land of 1,000 Dances”…)
  • Ordinary guys wearing (relatively) long hair. Yes, we’d heard of The Beatles by this time in South America, but the fashion had not caught on.
  • Beach music, East coast – Yeah, this music had been around, and white kids had been listening to this “black” music, but it didn’t have the kind of profile where I could hear it until this point. I think Wikipedia rightly cites the heyday as being “mid-1960s to early 1970s.”
  • Color TV – It had existed, but I hadn’t seen it.

OK, taking off on that last one, let’s just take a quick run-through of the TV shows, icons of the era, that were either new in 1965, or new to me because I’d been out of the country:

  • Gilligan’s Island
  • Green Acres
  • I Spy
  • Hogan’s Heroes
  • The Wild, Wild West
  • The Smothers Brothers Show
  • Lost in Space
  • Bewitched
  • Daniel Boone
  • The Man from U.N.C.L.E.
  • Get Smart
  • The Munsters/The Addams Family
  • Shindig!

I want you to especially note the variety in those shows — they weren’t all manifestations of the same cultural phenomenon, the way, say, “reality TV” shows are today. (A phenomenon that would not be new to me at all from a two-year absence.)

I’d like to include “The Beverly Hillbillies,” but it actually premiered shortly before I left the country, and I’d seen it once or twice. And I won’t cite the ground-breaking “Batman” because it premiered in January of 1966 – which was still within my first year back in the country. Also, I never saw “The Andy Griffith Show” before my return, but that was my fault — it had been out there for a year or so before I left.

This may all seem silly and superficial to y’all, but I think it’s actually significant that our popular culture is so static and unchanging today. Someone, trying to dismiss this, said on the previous post that I was ignoring the fact that the dynamism of popular culture in previous decades was just a First World, affluent-society phenomenon.

No, I wasn’t. In fact, that is sort of my point. I had come from an unchanging, static culture in the Third World into one of the most exciting cultural moments in the life of the most affluent country in human history. I would even go so far as to suggest that the dynamism of the popular culture is related somehow to economic dynamism.

And maybe the economic stagnation that is the New Normal today is related to cultural stagnation. We could feel our economic horizons expanding in past decades. No longer…


The Rolling Stones – Live in Shindig! (1965) by Vilosophe

Is ‘The Walking Dead’ about today’s economy?

Just another sunny day in the New Normal.

Late last night, in a fit of despond, I Tweeted the following:

Call me a pessimist if you will, but I must confess to a sinking feeling that things are not going to get better on “The Walking Dead”…

I mean, have you been watching this show lately? We thought things were as bad as they could get in the very first episode of the first season, but now? It’s almost like the makers of the show are daring us each week to keep watching. Recently on Netflix, I called up an episode from the first season — the one in which the survivors find temporary refuge at the CDC — and I was struck by how clean and relaxed and sane everyone was, even before they got access to the hot showers. Over the next two seasons, you can observe the decline of hope in the characters along with the layers of dirt and dried zombie blood encrusted on them.

Rick's just not inspiring a lot of confidence these days.

This show raises a lot of questions. For instance — if the only “life” in walkers (as demonstrated by the researcher at the CDC) was a trickle of activity at the very base of the brain, then how come a blow to anywhere on the head will put them down? Looked to me like the target area would be about the size of a walnut, and well shielded. And once you suspend your belief enough to ignore that, how are we to believe that humans with no firearms experience before the zombie apocalypse can hit a moving walker in the head at forty yards with a pistol, every time? That would be a toughie for the members of Seal Team 6, I  suspect.

But set all that aside, and let me get to my epiphany. Last night, as I looked on Deputy Rick covered in zombie mess, sitting there on the floor of the prison out of his mind with grief over the loss of someone dear to him, I got this sinking feeling that nothing was ever going to get better. Based, you know, sort of in the fact that this is the third season, and nothing ever DOES get better. Everybody was just going to keep scraping by, day to day, adjusting as well as they can to this new reality that seemed permanent…

And it hit me how much that felt like our economic situation since September 2008 (the show premiered in 2010, as we were realizing that our economic woes were the New Normal, and not a short-term thing). Only without everybody being covered in zombie  blood.

Is that what it’s about? Does that cause us to identify with these people enough to keep watching? Does it cheer us up, because unemployment and underemployment aren’t nearly that bad? Are the choices presented to the characters like our political choices? Is “the Governor” supposed to be Mitt Romney, presenting an idyllic suburban Republican sort of vision of what life could be? Deputy Rick seems to have the same pitch for holding on to leadership that President Obama used: No, I haven’t led you out of this, but without my leadership, things would have been worse.

Maybe not. But I’m trying to come up with a socially-redeeming excuse for why I keep watching. Because I do, and will. Right now, I can’t wait to find out who was on the other end of that ringing rotary-dial phone…

And I’m supposed to believe this kid can hit a moving walker in the head, at 50 feet, from a tower, with a pistol as big as he is?

It was too loose; now it’s too tight

This morning, we closed on a mortgage refinance, which we did partly because of the lower rates, but mainly to consolidate the initial mortgage and a credit line that we opened a number of years back to do some work on our house (hardwood floors, new HVAC, other stuff).

Anyway, the attorney helping us does this sort of thing all the time. (Over the years, we’ve been through this process with him — closing on a house or refinancing — at least three times.) My wife asked whether he’s keeping busy with these low rates.

Not really, he said. Oh, the demand is way up, all right. The thing is, though, about half of the loans aren’t getting approved.

Before, credit was too loose, which got us into trouble. Now, it’s too tight, which makes it harder to get out of the trouble. He said there are those who hoped real estate would lead us out of these hard times. But not at this rate, he suggested.

Just a little glimpse at the economy from a window other than my own, which I thought I’d pass on.

By the way, we had no trouble getting our refinance, through Palmetto Citizens Federal Credit Union. See the ad at right.

Product placement, baby.

Only Robinson Crusoe did it alone — and then only until Friday came along

And note that not even he made the musket, or the hatchet.

Since I’m not at the paper any more, it fell to Cindi Scoppe to write this column that ran today, basically addressing the orgy of indignation among the libertarians who call themselves conservatives over President Obama’s unfortunate choice of words in explaining the painfully obvious fact that practically no one in our crowded, interdependent world achieves anything worthwhile alone:

A LOT OF what the president says and does is ripe for criticism. But what he said the other day about no one being an island, about how our parents and our communities and our teachers and mentors and, yes, our government all contributed to our success is not one of those things.

If you’re wondering who in the world would criticize such obvious commentary, it’s because you don’t recognize the full context of that bizarre, ridiculous, one hopes bungled quote that came in the middle of it: “If you’ve got a business — you didn’t build that. Somebody else made that happen.”…

Of course business owners built their businesses — unless they inherited them or bought them from someone who did. Their initiative and hard work and luck set them apart.

As important as parents are to our success, one sibling can create a multi-billion-dollar business while another languishes on welfare. As much as we need good teachers, even the best have some students who drop out of school. Although government policy can give some businesses a leg up, others can go bankrupt even with too-generous government grants.

That’s because some people have initiative, and some do not. Some people are creative, and some are not. Some people are smart, and some are not. And while the schools can affect which group any individual is in, government does not eliminate those basic differences.

At the same time though, the vast majority of people who own businesses would not have been able to do that if we didn’t have a monetary system and a court system and roads and police and other functions of government. The vast majority of people who have any sort of success would not have it in a world without government. In fact, they wouldn’t have it if not for the peculiar kind of government that our country embraced from the start: self-government.

Can, and should, our government be more efficient? Of course so. Is there room to debate whether the government should bail out the banks or the auto industry or help pay for our medical care? By all means. Is there a legitimate question as to whether taxes are too high or too low? Certainly.

But the vast majority of Americans would not have the lives we take for granted — lives that are inconceivably luxurious compared to the lives lived by the overwhelming majority of people throughout human history — if it weren’t for our flawed but better-than-any-alternatives government.

Seems to me Cindi was being slightly over-cautious in saying that only “the vast majority of people” would have gotten nowhere without the basic conditions — civil order, rule of law, basic infrastructure — that are provided through the processes we call “government.” I suppose there are some to whom that doesn’t apply, but very few. It’s even harder to think of anyone who accomplished anything worthwhile completely and utterly alone — without anyone, whether you’re talking about government or not.

I suppose there’s Robinson Crusoe — that is, until Friday came along. This reminds me of an economics exercise we did in high school. We had to suppose we were stranded on a desert island, and we had to allocate our resources — which included time, and effort — so as to survive. This much time building a shelter out of available materials meant that much less time spent gathering food. X amount of time spent making a tool that would facilitate building that shelter cuts the construction time, leaving more time to weave a net to make fishing easier, etc.

A castaway who is completely alone can create something useful — to him, anyway — without anyone else’s involvement. But a business, in our crowded society? Well, to start with, you have to have customers. And then, depending on your business, there are suppliers, and vendors providing services that it would be inefficient to perform yourself. And as you grow, there are employees who become essential to your further growth, etc. Without the willing participation of those often vast networks of people, you can work and create all you want, but you’re not getting anywhere.

The extreme libertarians would put government in another category from just “people.” But in our system, the government and the people are the same thing. “Government” is just the word for the set of arrangements that we have among us, the people, for handling certain things that are best handled that way, such as building roads or deepening a port or passing and enforcing the laws without which the concept of private property is meaningless.

In fact, if I had a quibble with Cindi’s column, it would be that, in her litany of things for which government is essential, she kept referring to government as “it.” As in, “It creates and maintains a monetary system,” and “It provides a civil justice system…”

Given the screwy way so many of our neighbors these days think of government, that can be misunderstood as government being some separate entity that provides certain things to us, the people. But it’s not that at all. A better word than “it” would be “we,” because government is simply the process through which we create and maintain a monetary system, provide a civil justice system, and so forth.

Government does not give or take away. It’s just the arrangements through which we, the people, do certain things that we decide, through our system of representative democracy, are best done that way.

Playing the unemployment blame game

On the national level, it’s the Republicans touting high unemployment and blaming it on President Obama.

On the state level, it’s the Democrats who eagerly greet each piece of bad employment news, only they blame it on the local Republicans:

Representative Leon Stavrinakis Statement on Spike in SC Jobless Rate
Charleston, SC – South Carolina’s jobless rate rose to 9.4% in June from 9.1% in May, while Charleston County’s unemployment rate rose significantly from 7.9% last month to 8.5% in June. Charleston State Representative Leon Stavrinakis released a statement in response:
“These unemployment numbers are troubling and unacceptable for the Charleston area and the state of South Carolina as a whole. As the nation’s unemployment rate continues to drop or hold steady, South Carolina’s rate is going in the wrong direction and at an alarmingly fast rate. Perhaps Governor Haley should stop her international travels and simply attending every press opportunity she can find so she can actually put real time and work into creating jobs in South Carolina. The last place potential businesses want to relocate is a state led by a Governor who is only interested in being a celebrity, cutting education, and refusing to invest in infrastructure. We can also be sure that Governor Haley’s recent budget attacks on existing South Carolina industry are not helping our ability to attract and recruit jobs to our state. It is time for Governor Haley to quit stalling and present the legislature with a comprehensive jobs plan. If she refuses to give us a plan, I suggest she take a look at the plan I released months ago,  which to date she has not indicated she has even taken the time to read.”
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Funny how things can look so different from Columbia (or Charleston) than they do from Washington.

How do YOU define “middle class”?

Today, I went over to AARP’s local office to participate in a discussion about the future of the Social Security system. More about that later.

I just wanted to focus on one thing we didn’t really talk about.

Before our local group started interacting, we watched a video feed being broadcast to groups like ours at AARP affiliates across the country, which featured two experts who pretty much represented the expected “liberal” and “conservative” sides of the issue. They fielded questions from groups like our across the country.

At one point, they were asked to give their definition of “middle class.” Neither of them did, in simple terms, although both were eager to assert that their respective plans would benefit said class.

I don’t blame them. Middle class is a state of mind to a great extent, and as one of the experts noted, it’s hard to find any American who does not think he is middle class, however low or high his income. And of course, assets other than income play into any assessment of economic class.

But… in order to kick off a discussion, I’m just going to pick a couple of numbers and throw them out, and let y’all tell me how wrong I am and why.

I hereby proclaim that one is “middle class” if one’s household income is between:

$50,000

and

$150,000

I’m sure lots of people who make less than 50k will assert they are card-carrying members of the gray hordes of suburbia, but we have to make room for the underclass and working class somewhere, and I’m just going to say that working class ends and middle class starts at 50k. Perhaps higher. And with today’s prices, that pretty much means you are just hanging on to your bourgeois status by your fingernails.

Plenty of arguments could be offered for raising the upper limit as well. For instance, is a person who makes 100k still middle class? I’d say yes. So if a couple each make 100k, would they not be a middle-class couple making a household income of 200k? Sure, you could say that, but for the purposes of this discussion, you have to draw the line somewhere, and I’m drawing it at 150k.

Does that mean I think you’re “rich” if you make more than that? No. I think there’s a broad territory between middle class and “rich.” A place where people are comfortable, but they’d better not kick back, or they could still lose it all.

Of course, all of this is fuzzy. You could have $50 million in assets, but just be making $100k — or even $10k, or not a thin dime– in additional wealth per year, and you’d still be rich.

But given the obvious shortcomings of any definition of class based purely on income, what do you think?

Only 80,000 — low jobs figure depresses markets, casts pall on Obama’s re-election

No virtual front page today, because there’s not much I’d willingly put on a front page. The biggest story of the day by far is the softer-than-expected jobs numbers — which, combined with bad news out of Spain, has sent global markets plunging.

(The only thing competing for the front with that is Hillary Clinton talking tough to China and Russia about Syria. I might do a separate post about that.)

The BBC does the basic overview:

US shares have fallen after official data showed firms had created only 80,000 new jobs in June, leaving the jobless rate unchanged at 8.2%.

Job creation remains below the 100,000 judged necessary by the Federal Reserve for a stable job market, according to the US Labor Department.

Shares slipped after the news, with the opening Dow Jones index falling 1%.

President Barack Obama said the rise in employment was “a step in the right direction”.

Campaigning in the swing state of Ohio on Friday, President Obama acknowledged that “it’s still tough out there” for ordinary Americans…

Republican White House candidate Mitt Romney said from Wolfeboro, New Hampshire, that the jobs data underlined the need for a new president, adding “this kick in the gut has got to end”…

Other angles include:

  1. String of Weak Jobs Reports Likely to Set Tone for Voters (NYT)
  2. Obama Promotes a Long View on Jobs (NYT)
  3. Jobs Report And Politics: The Monthly Spin Cycle (NPR)
  4. Jobs report makes it tougher for Obama to tout progress (WashPost)

As you can see, the political angle is getting heavy play. Although the Post did manage to show some concern for the actual economy in its lede headline: Weak jobs report adds to worry of faltering recovery.

The European problems feeding into the drop in markets is at least briefly discussed in this WSJ story. Here’s some more, courtesy of The Guardian.

In SC, what could be a more legitimate public policy goal than economic development?

This just in from the SC Policy Council:

Policy Council: Economic Development ‘Machine’ Costs Taxpayers More Than $300 Million a Year with No Discernible Result

Tuesday, June 19, 2012 – Today the South Carolina Policy Council released a report revealing that the state appropriates well over $300 million a year in the name of “economic development.” In a single year, 2009, state lawmakers appropriated $311 million on various economic development agencies, programs, and initiatives.

∙   In one year, the Department of Parks, Recreation, and Tourism received over $23 million for tourism marketing – taxpayer dollars given to market one favored industry.

∙   The Department of Commerce maintains a “deal closing fund” ranging from $7 million to $25 million annually. The fund uses taxpayer dollars to entice private companies to expand or relocate.

∙   About half of the state’s spending on economic development consists of “workforce training”: that is, training workers for the benefit of private companies instead of allowing those companies to pay for their own worker training.

Despite spending vast and ever-increasing amounts on economic development, South Carolina is where it has been for more than a generation: ranked near the bottom of the nation in employment (6th worst) and median income (8th worst), and poverty (9th worst).

“We spend $311 million a year to ‘create jobs.’ Yet there’s no proof that money is creating long term private sector job growth,” says SCPC President Ashley Landess. “Taxpayers are spending nnmore and more on high-paid government jobs, but those exist primarily to promote government, not genuine private-sector growth.  If this economic development machine is delivering clearly measurable benefits to all taxpayers, then politicians need to prove it.  Otherwise, they have an obligation to dismantle the failing system and give the money back to the real job-creators: South Carolina business-owners, workers and consumers.”

The report, “Quantifying the Machine,” is available on the Policy Council’s website here. For other material on state-driven economic development, click here.

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A couple of points:

  1. I think it would be good if the state entities concerned with economic development, starting with the Commerce Department, would respond to this, and demonstrate how they do earn their keep (and if they don’t, they should do some ‘splainin’). But will they? The Commerce Department, after all, reports to Nikki Haley, who got into office by kowtowing to the “government is always bad” point of view that the Policy Council espouses. Tough position to be in, really: The one thing Nikki likes to brag about the most is bringing jobs to the state, yet she is allied to those who hold the view that that is the job of the private sector, not government. (Now, let’s all have a moment of silence over the terrible situation that poor Nikki finds herself in.)
  2. If you were starting a gummint from scratch in SC — an evil thing to do, in the Policy Council’s eyes, but let’s just suppose you don’t have a conscience and are moved to engage in such wickedness — what would be the single most critical need you would identify as you looked out upon our state? Would it not be economic development?

The Policy Council is sincere. They honestly do believe that our state, with its inadequate public infrastructure, would thrive economically in a Hobbesian state of nature. They actually do believe that if the taxpayers who are here already would simply have all their tax money returned to them, they would inevitably spend all that money in ways that would most benefit the state’s economy. I do believe they believe that — as unlikely as it seems that anyone would.

Then, suddenly, the economy got worse faster than you can say ‘Polish death camp’

This hasn’t been a good week for Mr. Obama. First there was the “Polish death camp” thing that wouldn’t go away. (Hey, I understood what he meant, didn’t you? But just try explaining it to the Poles…)

Today, there’s this:

Worst U.S. Job Data in a Year Signals Stalling Recovery

A dismal job market report Friday gave a resounding confirmation to fears that the United States recovery has markedly slowed, reflecting mounting evidence of a global slowdown.

The report, which showed the smallest net job growth in a year and an unemployment rate moving in the wrong direction, was a political game-changer that bodes ill for President Obama as he faces re-election.

It provided traction for his Republican rival, Mitt Romney, at a time when politicians have been deeply divided over the most effective way to strengthen the economy. And it put increased pressure on the Federal Reserve to take further action to stimulate growth.

The United States economy gained a net 69,000 jobs in May, according to the Labor Department. The unemployment rate rose to 8.2 percent from 8.1 in April, largely because more people began looking for work. And there was more unexpected bad news: job gains that had been reported in March and April were revised downward…

Yow. Now the president knows how John McCain felt when the economy got shot out from under him. OK, not that bad. But still not good.

What do y’all think? Is it a blip, or a negative trend? Because I remain convinced that the health of the economy depends in large part on what y’all — all 300 million or so of y’all — think about it. Yeah, there are some things we can’t help, like the Euro mess, but largely we have the ability to stimulate the economy by ourselves. Hey, that sounds kind of dirty, doesn’t it? Well, that’s not how I meant it. Or maybe I did. Talking about money stuff makes my mind wander…

Och! Wee bairns to be forced to work to 77

Admittedly, I’m mostly posting this for the opportunity to say “wee bairns” — which Walter Russell Mead beat me to, over on Twitter.

But I thought it interesting to put a bit more of a face on “austerity,” the concept that’s getting such a workout over across the pond:

Pension Crisis in Scotland?

U.S. states aren’t the only places facing pension crises at the moment: Underfunded and unsustainable pensions are wreaking havoc in Europe too. The Scotsman, in particular, is up in arms over new rules tying retirement to life expectancy; the paper describes the future under the rule changes as “a grim picture of aged toil.”

The gradual ratcheting up of life expectancy means that future retirees in the UK may be forced to continue working well into their seventies. And within the next decade, retirement age will rise from 65 today to 67. These changes will become more drastic as time goes on. Today’s toddlers may work until they turn 77, and their children are projected to work until they are 85.

The Scotsman (and others) shouldn’t forget the rather shiny silver lining to this supposedly ominous forecast: People may be forced to work longer, but that’s only because they are living longer too, and the new pension plan guarantees 20 years of coverage. Today’s youth may have to work until they are 77, but they can also expect to reach the ripe old age of 97 on average…

I’m with Mr. Mead. As austerity measures go, this one makes perfect sense. We should be be thinking more along those lines in this country.

Yeah, 77 is well up there. But it’s hardly the “grim picture” that the Scotsman would have it.

What if Malthus was actually right for once?

Not that I think for a moment he will be — no one in the history of ideas was ever more spectacularly wrong (the poor fellow argued that resources would never be able to keep up with population growth even as an agricultural revolution led to much faster growth in food supplies than in population).

But some still predict that he will be. Andrew Sullivan drew my attention to this:

Grain yields are beginning to hit a “glass ceiling” in many countries, Brown said, where farmers have already taken advantage of what science has to offer for improving yield. As more and more countries hit an upper limit on productivity, the world grain harvest will begin to plateau, even as demand for food continues to rise, causing a rise in prices. More worrisome, the global food market is vulnerableto external shocks such as prolonged drought. “We don’t have idle land, we’re flat out,” says Brown. “We don’t have [food] stocks. We’re living harvest to harvest. The question becomes, what if we have a major shortfall in the world?”

Of course, if Malthus were ever proven right, that would be an extraordinarily bad thing. So I continue to root against him, even as I occasionally worry: Have you bought a bad of “topsoil” lately? It’s like all chunks of bark and stuff…

Stiff upper lip, mate: Coping with austerity in Britain

On a previous post, Bud and Silence had an exchange about Britain’s austerity measures, with Bud painting a fairly dismal picture:

Check out the results of the austerity approach in Great Britain. It’s been a disaster with GDP declining a full 2 years after the US began to grow. They’re approach a full blown depression.

Well, I don’t know about all that, but I do know that when I was there at the start of last year, all the buzz was about the steep increase in the VAT, which took effect while I was there. Everywhere I went, businesses had signs out about sales and such that appealed to people’s worries about the tax increase. The newspapers were full of back-and-forth between Labour pols attacking the increase and Tories defending it.

Personally, I didn’t notice the difference — everything was a little more expensive over there than here before the increase, and I didn’t feel a few more few bob here and there. Besides, when you’re on vacation you don’t count pennies the same way — especially since pennies there are different from here to start with.

I did appreciate the sign in front of The Crown Inn in Woodstock (a short bus ride from Oxford). We went in and had lunch, and I enjoyed a couple of VAT-increase-free pints. But then, I would have anyway. It was (we were told) the oldest pub in town, and we got a nice table next to the fireplace. Cheers!