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Learning to Love (Tolerate?) Big Government

Justin Fox:

In December, Gallup asked 824 U.S. adults this question: “In your opinion, which of the following will be the biggest threat to the country in the future — big business, big labor or big government?”

Sixty-nine percent responded “big government.” That was down from 72 percent in 2013, but otherwise higher than at any other time Gallup has asked.

What exactly has big government done to these people?

The article includes some links like,

Hacker and Pierson’s new book is aimed directly at this fantasy, but I’m torn on whether it will do much to dispel it. Hacker is a professor at Yale who first came to national attention  with his 2006 book, “The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream,” which described how governments and businesses had shifted retirement and health-care risks onto the backs of families. In 2010 he collaborated with Pierson, a professor at the University of California at Berkeley, on “Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class,” a book that I liked a whole lot.

Justin Fox’s book, The Myth of the Rational Market, is a succinct history of the power, creation and destruction of ideas and some of the wreckage that goes with it and “describes with insight and wit the rise and fall of the world’s most influential investing idea: the efficient markets theory … Carries readers from the earliest days of Wall Street to the current financial crisis, debunking the long-held myth that the stock market [representative of markets in general] is always right in the process while intelligently exploring the replacement theory of behavioral economics.”

Mississippi River Project

Mississippi River Project | A Gathering of Stories

by Morgan Rogers and Emily du Houx

Click HERE for the video and to learn more!

We’re building a boat and traveling the length of the Mississippi to create a floating, multimedia portrait of the river. More…

On Multipliers, via Mark Thoma

Chris Dillow:

On multipliers: Richard Murphy writes:

[The government and OBR] believe that austerity generates growth and so cuts the deficit. The trouble for them is that all the evidence shows that the opposite is true: cuts shrink national income and government spending increases it.

This has attracted cheap abuse from some… Such abuse is wrong, and misses the point. It’s wrong, because – in the context he is writing about – Richard is right to claim that fiscal multipliers are big. There’s widespread agreement (pdf) that multipliers are bigger in recessions (pdf) than in normal times. For example, Lawrence Christiano, Martin Eichenbaum, and Sergio Rebelo say (pdf):

The government-spending multiplier can be much larger than one when the zero lower bound on the nominal interest rate binds.

The fact that Osborne’s austerity has failed to cut the deficit as much as expected is wholly consistent with this. Bigger multipliers than Osborne assumed meant that austerity depressed output by more than he expected thus making it harder to reduce borrowing.


The political point is that Labour supporters should not rely upon a big multiplier as a case for fiscal expansion. And … Lots of leftist policies … can be designed without reliance upon fragile claims about the macroeconomy.

Read more here.

And not all ethical considerations need short- or medium-term macroeconomic validation. But as proposed in my book, Unicycle, if nature has an ethical sense of direction, and markets are necessarily rooted in nature, then there is a right way to go in macro.


Why education doesn’t bring women equal pay

Study: Gender barriers in work and politics need policy action – EurekAlert

May the results go far!

“Five areas in which we can act.” —Obama’s message to all

Summary directly from Mark Thoma’s Economist’s View:

America’s Bold Voice Cannot Be the Only One

by Barack Obama, op-ed, FT (paywall)

… Today the G20 faces another challenge. While the global economy is growing, it is growing too slowly. … That is why, at next week’s summit, my message will be clear: we have to take action to strengthen growth in a way that benefits all our people.

Specifically, there are five areas in which we can act.

First, our countries have to implement fiscal policy that supports short-term demand and invests in our future. …

Second, our countries have to take action to boost demand by putting more money into the pockets of middle-class consumers who drive growth. …

Third, our countries can foster more inclusive growth by lowering barriers to entering the labor force. …

Fourth, we can support more inclusive growth with high-standard trade agreements that actually benefit the middle class. …

Fifth, the world agrees on the need for greater public investment, especially where interest rates are low. That is why I am pushing Congress to create jobs today and tomorrow by adopting a long-term infrastructure plan this year.

Furthermore, public investment often jump-starts private investment. …

And in the Financial Times, so heads up Austere Tories; take heart True Labour! Government should be an expression of community, not the “necessary evil” that many on both sides of many arguments historically believe. A healthy community needs us to be involved in cultivating good government globally and regionally. Good government does not waste money on those who are already doing well and who may well know who needs it most. ‘Nough said, again.

The Morality of a $15 Minimum

Government as an expression of community (Robert Reich stirs me to blog once more, with a list of historical precedents):

“Have you noticed how often conservatives who disagree with a policy proposal call it a ‘job killer?’ …

But the “moral case is that no one should be working full time and still remain in poverty.

“People who work full time are fulfilling their most basic social responsibility. As such, they should earn enough to live on …

“What about the risk of job loss? Historically, such a risk hasn’t deterred us from setting minimum work standards based on public morality.”

A list of progress over fear mongering includes child labor laws and their opponents:

“The original child labor laws that went into effect in many states at turn of last century were opposed by business groups that argued such standards would raise the costs of business and force employers to lay off large numbers of young workers.

“But America decided the employment of young children was morally wrong.

“The safety laws enacted in the wake of the tragic Triangle Shirtwaist Factory fire of 1911, which killed 145 workers, were also deemed ‘job killers.’ …

“It was the same with the 1938 legislation mandating a forty-hour workweek with time-and-a-half for overtime, along with the first national minimum wage …

“America enacted fair labor standards anyway because it was the right thing to do.” And for the community as a whole.

Who’s makin’ a list?

Robert Reich:

“Wall Street isn’t the only big winner from the new legislation. Health insurance companies get to keep their special tax breaks. Tourist destinations like Las Vegas get their travel promotion subsidies.

“In a victory for food companies, the legislation even makes federally subsidized school lunches less healthy by allowing companies that provide them to include fewer whole grains. This boosts their profits because junkier food is less expensive to make.

“Major defense contractors also win big. They get tens of billions of dollars for the new warplanes, missiles, and submarines…

“Conservatives like to portray government as a welfare machine doling out benefits to the poor, some of whom are too lazy to work.

“In reality, according to the Center for Budget and Policy Priorities, only about 12 percent of federal spending goes to individuals and families, most of whom are in dire need.

“An increasing portion goes to corporate welfare.”

Who’s a lazy bum in that corporate jet?

“In addition to the provisions in the recent spending bill that reward Wall Street, health insurers, the travel industry, food companies, and defense contractors, other corporate goodies have been long baked into the federal budget.

“Big agribusiness gets price supports. Hedge-fund and private-equity managers get their own special “carried-interest” tax loophole. The oil and gas industry gets its special tax subsidies.

“Big Pharma gets a particularly big benefit: a prohibition on government using its vast bargaining power under Medicare and Medicaid to negotiate low drug prices…

“Starting in 2015, [couples] can donate ten times [more than before]. In a two-year election cycle, a couple will be able to give $1,296,000 to a party’s various accounts…

“If government were responding to the public’s interest instead of the moneyed interests, it would be smaller and more efficient.”

We’re on to ’em! So kick back and take it easy, relax in the holidays, and restore the energy for real change.

The Choice of the Century

The Choice of the Century is clear.

Robert Reich shows what a few good stats and conclusions can do, if we repeat them enough and don’t run away.

14 facts about the Obama presidency that most people don’t know

(Some of which many of us wish weren’t true, plus some more cool facts and links for verification and discussion.)

14 Facts About The Obama Presidency That Most People Don’t Know

Via Robert Sezak of RE-BOOKS, quoted directly:

Source: President Obama visiting Iowa

People have many perceptions of how the US economy or the country as a
whole is doing in recent years. Depending on your political views, you
may think the country is doing exceptionally well or on the verge of

Listed below are 14 objective facts, without interjecting any opinion,
about the state of America under the leadership of President Obama.
Every statement is followed up with a link to a source where you can
verify these facts for yourself.

1. We’ve now had 63 straight months of economic expansion.

That’s right, for 63 consecutive months the US economy has gotten
progressively better. That includes 54 consecutive months of private
sector job growth. Forbes magazine, no fan of President Obama,
crunched the numbers and demonstrated how the economic recovery under
President Obama has been better in just about every measurable way
than the recovery under President Reagan.

2. We are currently enjoying the longest period of private sector
job creation in American history.

Again, this statistic comes from the Forbes Magazine article listed
above. In fact, we have now had 54 straight months of private sector
job creation. That is the longest period of job creation since the
Department of Labor has been keeping statistics. See the link below.

3. Unemployment has dropped from 10.1% in October of 2009 to 5.9%
and projected to reach 5.4% by summer of 2015.

Not only has the unemployment rate dropped significantly, but since
the recession ended, our economy as added over ten million new jobs.
You can refer to the Forbes article above or check this article on

4. The stock market continues to set new records since President
Obama has been in office.

Since early 2009 there has been a steady trend in stock market growth.
The Dow Jones Industrial averages reached an all-time high of 17,098
in August, 2014. Since most Americans have 401K retirement investments
in the stock market, this stock market growth benefits millions of
middle class Americans.

5. The Federal budget deficit is shrinking. It’s been reduced by
two-thirds since 2009.

The $1.4 trillion federal budget deficit that Obama inherited in 2009
was in a large part due to the high rate of unemployment. When
millions of people were put out of work in 2008 and 2009, it resulted
in far less income taxes and less economic activity to generate
federal revenue. As ten million people have been put back to work,
there have been billions more tax dollars generated. As a result, the
deficit has been shrinking each year. The 2014 deficit is projected to
be around $500 billion, the smallest deficit since 2007 and roughly
1/3 of what it was in 2009.

6. Under President Obama, spending has increased only 1.4% annually,
the lowest rate since Eisenhower was president.

You may have heard critics say that President Obama is spending money
wildly and running up our debt. According to this article from Forbes,
Obama has increased spending by 1.4% annually, far less than President
Reagan (8.7%) or George W. Bush (8.1%). In fact, Obama has increased
spending less than any president since Eisenhower.

7. For 95% of American taxpayers, income taxes are lower now than
just about any time in the previous 50 years.

After President Obama took office, thousands of Tea Party members all
over the country held rallies protesting Obama’s tax increases. At
that time, President Obama had actually passed several tax cuts to
stimulate the economy. Most of the Tea Partiers who were protesting
had only seen their taxes decrease under Obama. Yet polls indicated
that most Tea Party members wrongly believed their taxes had gone up.

In fact, the only people whose income taxes have gone up during
Obama’s presidency are those making $400,000 per year or more. That’s
less than 2% of the population. Today, for the vast majority of
people, tax rates are exactly where they were when Obama first took
office or lower. The article below from the Center on Budget and
Policy Priorities explains this in greater detail.

8. Our dependence on foreign oil has shrunk due to record domestic
oil production and improved fuel efficiency standards.

While some people claim that oil production has declined under
President Obama, the truth is just the opposite. Oil production has
reached record highs. The United States now produces so much oil that
we export more oil and gasoline than we import.

9. At least 7 million more Americans now have health insurance than

Depending on whose numbers you use, between 7 and 10 million Americans
acquired health insurance due to the Affordable Care Act. Now that
those 7 to 10 million Americans have insurance, the rest of us are no
longer on the hook to pay for their health care when they get sick.
This saves the American people billions of dollars in the long run.

10. The Affordable Care Act has added years to the life of

The Medicare trust fund had been on course to run out of money by the
end of 2016. But due to cost savings from the Affordable Care Act and
lower healthcare expenses, Medicare’s trust fund is now stable until
the year 2030 without cutting benefits.

11. Since passage of the Affordable Care Act, we are seeing the
slowest rate of increase in healthcare costs since 1960.

Contrary to the predictions from Republicans, health care costs have
increased at a much slower pace since the passage of the ACA.

12. We currently have fewer soldiers, sailors and airmen in war
zones than any time in over 10 years.

With the end of the Iraq war and the steady withdrawal of troops from
Afghanistan, we have fewer people in war zones now than any time since

13. There have been zero successful attacks by al Qaeda on US soil
since Obama became president.

Despite Dick Cheney’s claim that if voters elect a Democrat as
president, we’ll be “hit again and hit hard” by al Qaeda, we have
actually been far safer from terrorist attacks on US soil in recent
years than we were under the previous president. There have been
several unsuccessful attacks against the US under both presidents, but
under Obama, al Qaeda has been largely unsuccessful in striking the US
on our home soil.

14. We now successfully catch and deport more illegal immigrants
than ever before.

Despite the publicity from busloads of children who illegally entered
the country, the numbers prove that President Obama has deported more
illegal immigrants than any other president.

All of the facts stated above can be confirmed through multiple
sources, yet most Americans are not aware of all of this positive
news. I invite you to do your own research and check these facts for

The truth is, most other presidents would envy President Obama’s
record despite the fact that he inherited the worst economic crash
since the Great Depression.

Here’s a bonus. If you feel particularly ambitious, feel free to
research these additional facts.

1. Since Obama became president, our economy has gone from losing
800,000 jobs per month to adding 200,000 jobs per month. That’s a net
improvement under Obama of about 1 million jobs per month!

2. Before Obama became president, our financial system was in ruins
and millions of people were at risk of losing their life savings. Now,
the financial loopholes have been fixed and we are no longer at risk
of another financial collapse.

3. In 5 years under Obama the economy has created twice as many jobs
as were created in 8 years under George W. Bush.

4. President Obama passed credit card reforms that protects consumers
from excessive fees, rate hikes, deceptive marketing and unreasonable
due dates.

5. Thanks to “Obamacare”, senior citizens have saved billions of
dollars on prescription drugs.

6. The Affordable Care Act requires insurance companies to spend at
least 80% of your premiums on health care. As a result millions of
Americans have received refunds from their health insurance companies.

Despite the unprecedented obstructionism and record number of
filibusters used by Republicans to kill even the most routine
legislation, the fact remains, in almost every measurable way, the
American people are profoundly better off today than they were before
President Obama took office.

[Are the facts liberal? Happy Halloween, voters!]

The political right has always been uncomfortable with democracy

Paul Krugman: Plutocrats Against Democracy

Via Mark Thoma

Plutocrats Against Democracy, by Paul Krugman, Commentary, NY Times: The … political right has always been uncomfortable with democracy … there is always an undercurrent of fear that the great unwashed will vote in left-wingers who will tax the rich, hand out largess to the poor, and destroy the economy…

This is a fantasy. … All advanced nations have had substantial welfare states since the 1940s… But you don’t, in fact, see countries descending into tax-and-spend death spirals — and no, that’s not what ails Europe. …

Still, while the “kind of politics and policies” that responds to the bottom half of the income distribution won’t destroy the economy … the top 0.1 percent is paying quite a lot more in taxes right now than it would have if Mr. Romney had won. So what’s a plutocrat to do?

One answer is propaganda: tell voters, often and loudly, that taxing the rich and helping the poor will cause economic disaster, while cutting taxes on “job creators” will create prosperity for all. There’s a reason conservative faith in the magic of tax cuts persists no matter how many times such prophecies fail (as is happening right now in Kansas) …

Another answer, with a long tradition in the United States, is to make the most of racial and ethnic divisions — government aid just goes to Those People, don’t you know. And besides, liberals are snooty elitists who hate America.

A third answer is to make sure government programs fail, or never come into existence, so that voters never learn that things could be different.

But these strategies for protecting plutocrats from the mob are indirect and imperfect. The obvious answer is … Don’t let the bottom half, or maybe even the bottom 90 percent, vote.

And now you understand why there’s so much furor on the right over the alleged but actually almost nonexistent problem of voter fraud, and so much support for voter ID laws that make it hard for the poor and even the working class to cast ballots. American politicians don’t dare say outright that only the wealthy should have political rights — at least not yet. But if you follow the currents of thought now prevalent on the political right to their logical conclusion, that’s where you end up.

The truth is that a lot of what’s going on in American politics is, at root, a fight between democracy and plutocracy. And it’s by no means clear which side will win.

Paul Krugman’s article quotes Leung Chun-ying, the Beijing-backed leader of Hong Kong, who blurted out the real reason pro-democracy demonstrators can’t get what they want: those who are earning below a certain income defined by Leung Chun-ying would end up with, in his words “that kind of politics and policies.”

Krugman compares this attitude to Mitt Romney’s characterization of the “47 percent” of Americans as “irresponsible” (and who he feared would vote against him), and to the 60 percent that Representative Paul Ryan argued pose a danger because they are “takers,” whereas the rich are “makers” and  “job creators,” in the branding terms of the Right. Whatever happened to common expressions like “the idle rich”?

It would be an interesting study to discover how many people across the political spectrum really do not believe in democracy (unconsciously or not) and why and to what extent. It is understandable that one might not “believe” because historically societies are quite programmed hierarchically, and democracy has not been logically deduced, remaining essentially a belief system (unless, ahem, my book, Unicycle: The Ethic of Nature’s Balance Revisited with Asymmetric Math and Fiction, the eBook edition, soon!).
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