"I have a foreboding of an America in my children's or grandchildren's time -- when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what's true, we slide, almost without noticing, back into superstition and darkness...
The dumbing down of American is most evident in the slow decay of substantive content in the enormously influential media, the 30 second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance."
Over at Forbes, Steven Salzberg notes a troubling development:
"The University of Florida announced this past week that it was dropping its computer science department, which will allow it to save about $1.7 million. The school is eliminating all funding for teaching assistants in computer science, cutting the graduate and research programs entirely, and moving the tattered remnants into other departments.
Let’s get this straight: in the midst of a technology revolution, with a shortage of engineers and computer scientists, UF decides to cut computer science completely?"
The short-sightedness of this decision would be bad enough on its own merits. But, as Salzberg notes, it gets worse:
"Meanwhile, the athletic budget for the current year is $99 million, an increase of more than $2 million from last year. The increase alone would more than offset the savings supposedly gained by cutting computer science."
If you're asking yourself how this could possibly make sense, you need look no further than the big media contracts such as this one between FU and such corporations as Fox Sports.
This is the current culture in microcosm. Investments with vast yet non-immediate returns are abandoned in favor of the quick buck.
If we truly find ourselves in a losing economic position opposite China or the EU a generation from now, we will need to look back no further than decisions like this one for explanation.
"The U.S. Supreme Court denied a last-minute stay of execution for Troy Davis after a delay to weigh arguments."
There was no physical evidence in his case. He was convicted on the basis of eyewitness testimony only for the killing of an off-duty police officer. 7 of the 9 witnesses against him have recanted. There are multiple allegations of police intimidation in the investigative phase. What's more, there is another suspect. It is more likely that this other suspect committed the crime.
The fight to prevent this miscarriage of justice has not merely been the latest cause celebre of committed opponents of capital punishment. For example, here is former F.B.I. direstor William Sessions:
"What quickly will become apparent is that serious questions about Davis’ guilt, highlighted by witness recantations, allegations of police coercion and a lack of relevant physical evidence, continue to plague his conviction. Last summer, an extraordinary hearing ordered by the U.S. Supreme Court to answer these questions instead left us with more doubt.
At Davis’ evidentiary hearing, witnesses called by Davis recanted trial testimony and made allegations of police pressure. Others testified that an alternative suspect had confessed to them that he committed the crime. One eyewitness testified, for the first time, that he saw this other suspect, a relative of his, commit the crime. Police witnesses for the state of Georgia alternatively asserted that the original trial testimony was the true version of events and that it was elicited without coercion."
For more background, here is last week's (very belated) CNN report:
More than a million informed Americans have acted on Mr. Davis' behalf. To no avail. Yesterday, the Georgia Board on Pardons and Paroles basically said "who cares."
"Obama's "Buffett rule" is a response to a number of U.S. economic issues (as well as some relevant political openings) related to the recession. One of the most severe is income inequality -- the gaps between wealthy, super-wealthy, and everyone else -- a serious, long-worsening problem that makes the recession more painful and recovery more difficult. To get a sense of just how bad our income inequality has become, it's worth taking a look at how we stack up to the rest of the world.
Viewed comparatively, U.S. income inequality is even worse than you might expect. Perfect comparisons across the world's hundred-plus economies would be impossible -- standards of living, the price of staples, social services, and other variables all mean that relative poverty feels very different from one country to another. But, in absolute terms, the gulf between rich and poor is still telling. Income inequality can be measured and compared using something called the Gini coefficient, a century-old formula that measures national economies on a scale from 0.00 to 0.50, with 0.50 being the most unequal. The Gini coefficient is reliable enough that the CIA world factbook uses it."
For those of you who have not heard of the Gini coefficient before, here is an explanation of how it works based on its metric, the Lorenz curve:
"The Lorenz curve maps the cumulative income share on the vertical axis against the distribution of the population on the horizontal axis. In this example, 40 percent of the population obtains around 20 percent of total income. If each individual had the same income, or total equality, the income distribution curve would be the straight line in the graph – the line of total equality. The Gini coefficient is calculated as the area A divided by the sum of areas A and B. If income is distributed completely equally, then the Lorenz curve and the line of total equality are merged and the Gini coefficient is zero. If one individual receives all the income, the Lorenz curve would pass through the points (0,0), (100,0) and (100,100), and the surfaces A and B would be similar, leading to a value of one for the Gini-coefficient."
Fine, you might say. What does all that mean? Fisher shows us with this stark presentation:
As he explains, the map below illustrates the range of income inequality with "the most unequal countries in red and the most equal in green."
"Their optimism has been crushed by reality: They are still not working, or if they are working they're making a lot less money. You're either devastated or you're hurting, that's the range."
-- Carl E. Van Horn on the continued hardships faced by the millions who lost their jobs during the Great Recession. Van Horn teaches at Rutgers and is also a co-author of the just released study, Out Of Work and Losing Hope: The Misery and Bleak Expectations of American Workers
"In the past, you could make excuses on the grounds of ignorance. In the 1930s they didn’t have basic macroeconomics. Even in Japan in the 1990s you could argue that it took a long time to realize that the liquidity trap was a real possibility in the modern world.
But we came into this crisis with a pretty good understanding of what was at stake and pretty good analysis of the policy options — yet policy makers and, I’m sorry to say, many economists just chose to ignore all that and go with their prejudices instead. And the worst of it is that the people who got this so wrong have not and probably won’t admit to their awesome wrongness; on the contrary, they’ll dig in. And the Lesser Depression will go on and on and on."
Enjoy. We have one more whole day of market exchange volatility ahead of us before the American broadcast media begins their round-table "discussions" with an entirely balanced consortium of pandering rightists.
Many people find Nouriel Roubini's work dry and dispassionate. You generally don't see him on television. After all, his style is more academic than political. He is certainly no hyper-partisan of the Krugman or Stiglitz mode. All that said, Roubini got a lot more attention last week than usual. In an interview with the WSJ's Simon Constable, he told it like it is in the same measured tones that have made him a less than household name.
You don't cut taxes when you go to war. The stimulus was too small. The deficit is "Bush's fault." You don't "front load" austerity in a crisis. Rather, you apply that pressure when an exit from recession is secure. Rising income inequality naturally leads to civil unrest.
However, this observation at the 5min 10sec mark sent out a shock wave:
"Karl Marx had it right. At some point, Capitalism can destroy itself. You cannot keep on shifting income from labor to Capital without having an excess capacity and a lack of aggregate demand. That's what has happened. We thought that markets worked. They're not working. The individual can be rational. The firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else's income and consumption. That's why it's a self-destructive process."
God help us. He is usually right. No one more accurately predicted the collapse of 2008.
The fact that we now have an ascendant movement in American politics which greets proven centralized monetary policy with charges of "Communism" only makes the disaster more likely.
It's all common sense... unless you are a devoted Fox viewer.
Frontline profiled the predatory nature of the American consumer credit industry a few years ago. As the speed of middle class decline increases, it is worth revisiting. Here is the the full episode.
"Despite years and years of study by economic historians that we shouldn't repeat the mistakes of 1937, we seem to be doing it again."
-- Economist Lawrence Katz condemning the "debt deal" and our misplaced obsession with "austerity measures."
The other day my daughter came in from the back porch to tell me there were two ladies outside and she had no idea what they wanted. Having some idea, I wiped my hands on my apron and came out onto the porch. Two sixty-ish women in flowered dresses approached my back steps. One greeted me, and said they were on a "Christian Mission" in my area. I reserved judgment and let her go through her intro spiel.
When she got to the part about how she understood that most people had their own church, but since I had children, wasn't I worried about what was going to happen in the world, and with Obama and everything, what did I think was going to happen, I gently told her I'd prefer not to discuss religion with her and wished her a blessed day. The flowered Christians made a civil retreat. But I am indeed worried about what is going to happen to my world. Especially since I have children though not necessarily because of "Obama and everything."
The abysmal GDP numbers for the the first half of this year are out. One more time, here's why. From the AP:
"High gas prices and scant income gains have forced Americans to pull back sharply on spending. Consumer spending only increased 0.1 percent in the April-June quarter, the smallest gain in two years. Government spending fell for the third straight quarter."
We need solutions that address demand. Of course, the reductions in government spending are placing a terrible drag on this. In the current cup of tea, however, there is no room for more. But make no mistake, pulling hundreds of millions of dollars out of a fragile recovery is something which only makes sense to the senseless.
What might we do? We could extend the payroll tax holiday to everyone on the first $20 thousand in earnings, for a start. Or, as every economist with a clear view of our continued motion towards a full depression is arguing, we could bring back something like the WPA.
But we won't. There will be no solution to any of our economy's difficulties while the modern GOP holds the House and more than 40 seats in the Senate.
