Minimum Wage Impacts on Employment: A Look at Indiana, Illinois, and Surrounding Midwestern States:
“These patterns in job growth between 2003 and 2005 indicate that Illinois’ increasing minimum wage rates did not reduce overall employment growth for private employers and preliminary statistical analyses confirm this lack of an impact”
(Via Indiana University.)
Once again we see how ideology is soft-think. This is has been proven over and over, yet we see no public discussion on this at the pragmatic level. Just ideological back and forth. “Fairness” vs. “Jobs.” Whatever. Try “reality.”
The Price of Disgust – Freakonomics – Opinion – New York Times Blog:
“But most people do not think like economists. When offered 10 percent or 20 percent or even 30 percent of the total, they are disgusted by the inequity — and willing to pay the price for that disgust by rejecting the offer.”
(Via Freakonomics – Opinion – New York Times Blog.)
Talk about “bounded rationality!”
Economists on the Bailout – Freakonomics – Opinion – New York Times Blog:
“The only thing that seems to be moving faster than the financial crisis is the policy debate. The latest development is a statement that summarizes what I think of as the emerging consensus from academic economists; it expresses concern about various aspects of both the Paulson plan in particular, and the policy process in general.”
(Via Freakonomics – Opinion – New York Times Blog.)
Slow down. Take a breath everybody.
FactCheck.org: Who Caused the Economic Crisis?:
“So who is to blame? There’s plenty of blame to go around, and it doesn’t fasten only on one party or even mainly on what Washington did or didn’t do. As The Economist magazine noted recently, the problem is one of ‘layered irresponsibility … with hard-working homeowners and billionaire villains each playing a role.’ Here’s a partial list of those alleged to be at fault:
- The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
- Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
- Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
- Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
- The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
- Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
- Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
- Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
- The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
- An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
- Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.”
Obama has come of the points I would include, equity stakes, tax cuts to middle class spenders. But I would also:
- Punish CEO’s and other executives. They failed. They get the boot. That’s how the market does it. We should do that here. Take a flat payout of say $2M and not a penny more and walk out the door scott free. Or they can take door #2: a shareholder lawsuit and/or a criminal investigation from the SEC and/or FBI on gross negligence of their fiduciary duty.
- Push board reform. These people were asleep at the wheel to get us in this position. Take the bailout and all board members associated with the CEO are out the door pending the work of a Search Committee’s efforts to replace them. Put a time clock on that. Demand that the CEO is never Chairman of the Board nor does he/she have connections to the Chairman.
- Push for pension and insurance reform. These speculative assets have no place in people retirement portfolios or backing insurance policies. They require prudence not greed. Period.
- Get rid of social engineering around mortgages. To increase home ownership of the indigent, the government should subsidize mortgage payments for the indigent, but that has to be in conjunction with other initiatives like job training to earn a better wage, etc. No more tax entitlements–I mean deductions. People should pay what they can afford. Period. Let the debt markets work as normal.
- Focus on how to properly price MBS’s/CDO’s/CMO’s. The government should use all the academic horsepower available in our higher ed institutions to solve this problem. Modern portfolio theory revolutionized the pension industry by redefining the “prudent man.” Theory around these financial instruments, which aren’t inherently bad, can solve this problem as well. If the theory is sound enough, we might consider them for conservative portfolios e.g. pension endowments
What would you do?
McCain Suspends Campaign | Views | TheRoot.com:
“In the after-swirl of John McCain’s campaign-suspension gambit Wednesday, one analyst offered this assessment: ‘It’s the longest Hail Mary pass in the history of either football or Marys.’
Okay, it was just a Facebook status update from a declared liberal in Pennsylvania, but in a very real way it captures the desperation that seemed to envolope Camp McCain yesterday. Now that we know the chronology of the day’s events, it seems that a more apt football analogy for McCain’s move would have been ‘intentional grounding,’ a deliberate attempt to look like you’re making a play when in fact you’re just getting rid of the ball to avoid an imminent and costly loss of yards, known in the parlance as getting sacked.”
(Via The Root.)
More McCoward? Looks so.
Obama rebuffs McCain’s call to delay debate – Yahoo! News:
“‘This is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess,’ Obama said in Clearwater, Fla. ‘It’s going to be part of the president’s job to deal with more than one thing at once.'”
(Via Yahoo! News.)
Priceless. A friend called McCain “McCoward” for this. Harsh, but true.
Obama does have quite the plan. It is a mixed bag to be sure, as anything political would be, but it is both a sound and refreshingly moral plan to help this economy work for all Americans.
Presidential candidate Barack Obama once spoke to CNBC anchor Maria Bartiromo about the economy. Bartiromo made the usual comments an ideologically minded supply-sider might make, and Obama true to form, struck his usual centrist tone:
The one thing you can be assured of is I’m not going to be making these [economic] decisions based on ideology. I’m not a dogmatist…I believe in the market. I believe in entrepreneurship. I believe in opportunity. I believe in capitalism. And I want to do what works, but what I want to make sure of is it works for all America and not just a small sliver of America.
Obama does have quite the plan. It is a mixed bag to be sure, as anything political would be, but it is both a sound and refreshingly moral plan to help this economy work for all Americans. Instead of government spending per se, it consists of government investment, a key distinction from leftist ideological choices. It provides for targeted tax relief to the engines of our economy: the consumer and the more importantly small business. As a progressive he includes union protection, but departs from political pandering and opts for sensible regulation. See a pattern? I’ve said to my progressive/liberal friends that if they don’t get a pro-business, pro-growth policy that expresses their ideals and values, they might was well pack it in to conservatives whose policies smack of trickle down, faith based “economics.” No government in a free economy creates jobs. Businesses do and they don’t do so out of charity or good will. They do so out of necessity or incentive. So there has to be a system of carrots and sticks, that forces them to, as Taylor put it, “share in the surplus.” So to create jobs, you have to be pro-business in some way, and refreshingly Obama does not disappoint. More on this later.
Continue reading “Sharing Prosperity: Obama’s Economic Plan for Small Business”
msnbc.com video: Obama on the economy:
Wages and incomes for middle class America have been flat for far longer than Obama intimated. In real dollar terms, they’ve been stagnant for decades where the top earners’
incomes shares of national income have quintupled. So in terms of basic fairness and even sound long term economics, you’ve got to pay the piper. Rich folk: do you want to be pigs who get fat or hogs who get slaughtered?