Category: Equitablog

Larry Mishel, and 80+ Others: Economist Statement on the Federal Minimum Wage:

Dear Mr. President, Speaker Boehner, Majority Leader Reid, Congressman Cantor, Senator McConnell, and Congresswoman Pelosi:

July will mark five years since the federal minimum wage was last raised. We urge you to act now and enact a three-step raise of 95 cents a year for three years—which would mean a minimum wage of $10.10 by 2016—and then index it to protect against inflation. Senator Tom Harkin and Representative George Miller have introduced legislation to accomplish this. The increase to $10.10 would mean that minimum-wage workers who work full time, full year would see a raise from their current salary of roughly $15,000 to roughly $21,000. These proposals also usefully raise the tipped minimum wage to 70% of the regular minimum.

Continue reading “Afternoon Must-Read: Economist Statement on the Federal Minimum Wage” →

Bob Solow:

Must-Reads:

1. Megan McArdle: You Can’t Have a Conversation About Sexism at Gunpoint: “The real problem is not the sexualized remarks and threats of violence… [but] that women attract an undue amount of nonsexual rage and denigration…. People are ruder, angrier, more condescending and more dismissive with women who make arguments they don’t like…. This is not just something men do. It is not just something conservatives, or liberals, or nonfeminists do. It is a general rule….

   “If you’re trying to change people’s behavior… lighter punishment is often better…. In our society, accusing a specific person of sexism is now a very, very powerful weapon. And there is no such thing as a “conversation” at gunpoint…. I think that we need to have a conversation about subtle structural sexism. But it actually needs to be a conversation, because the best hope of changing behavior is for well-meaning people to do a little gut check before they go on a tear against an opinionated woman. And the only way to do that is to actually convince them that this is real. So really, guys: It’s not you, it’s me. It’s us. It’s everyone. But like Smokey Bear says, only you, and me, and everyone else can prevent flame wars…”

2. Ezra Klein: What liberals get wrong about single payer: “It’s health-care providers — not insurers — who have too much power in the U.S. system. As a result, they have the most to lose if health-care prices fall. But, as is often the case, political power flows in part from popularity. So politicians who routinely rail against for-profit insurers are scared to criticize — much less legislate against — for-profit hospitals, doctors or device manufacturers (though drug companies come in for a drubbing now and then). These are the people who work every day to save our lives, even if they make us pay dearly for the privilege. No one cheers when you take them on.”

3. Matthew Yglesias: Welfare works for kids: Children whose parents get money grow up healthier and live longer: “AMothers’ Pension[s]…. The program is old enough that almost all the kids whose moms received money are dead now, allowing the researchers to conclude definitively that it increased life expectancy. What’s more, World War II draft records show… sons of the accepted had early adult incomes that were 20 percent higher than those of rejected mothers; these sons were also 35 percent less likely to be underweight as adults, lived a year longer, and had about a third of a year of additional schooling. Since the rejected sons’ families were, on average, somewhat better off, these figures should somewhat understate the real impact of the pensions. The benefits weren’t gigantic—but the sums of money involved were pretty modest as well. Benefit levels varied from state to state, but averaged out to about $260 a month (adjusted for inflation), or around half of a modern-day TANF check.”

4. Adair Turner: Is rapid credit growth really necessary to boost GDP growth?: “Is there something about modern economies that makes adequate demand growth impossible without damaging credit growth? Rising inequality is one driver…. As the rich get richer, consumption growth may decline, unless the financial system uses their savings to lend to the relatively poor. But much of this debt may prove unsustainable. As Raghuram Rajan pointed out in his book Fault Lines, the US subprime-mortgage boom and bust owed much to pitiably slow growth in lower-income Americans’ real earnings over the last three decades…. A more stable growth model requires less… debt that finances purchases of existing assets, supports consumption without addressing the drivers of inequality, or results from unsustainable global imbalances.”

5. Larry Summers: “The extent to which differential productivity growth characterizes our economy is, I think, sometimes underappreciated. The Bureau of Labor Statistics normalizes the consumer price indices at 100 in the period 1982 to 1984…. Television sets at five stand out. That is obviously a reflection of a rather energetic hedonic effort by the Bureau of Labor Statistics. One suspects that equally energetic hedonic efforts are not applied to every consumer price. But nonetheless, the simple fact is that the relative price of toys and a college education has changed by a factor of ten in a generation. The relative price of durable goods or clothing as a category and all goods has changed by a factor of almost two in a generation. This table provides a somewhat different perspective on the common and valid observation that real wages have stagnated in the United States. The observation that real wages are stagnant reflects wages measured in terms of the overall consumer price index. But this obscures the truth that real wages measured in terms of different goods have behaved very differently…”

Continue reading “Things to Read on the Afternoon of January 14, 2014” →

Tim Taylor sends us to:

Larry Summers: “Until a few years ago, I didn’t think this was a very complicated subject: The Luddites were wrong and the believers in technology and technological progress were right.

I’m not so completely certain now…. In the United States today a higher fraction of the workforce receives disability insurance than does production work in manufacturing…. The extent to which differential productivity growth characterizes our economy is, I think, sometimes underappreciated. The Bureau of Labor Statistics normalizes the consumer price indices at 100 in the period 1982 to 1984…. Television sets at five stand out. That is obviously a reflection of a rather energetic hedonic effort by the Bureau of Labor Statistics. One suspects that equally energetic hedonic efforts are not applied to every consumer price. But nonetheless, the simple fact is that the relative price of toys and a college education has changed by a factor of ten in a generation. The relative price of durable goods or clothing as a category and all goods has changed by a factor of almost two in a generation. This table provides a somewhat different perspective on the common and valid observation that real wages have stagnated in the United States. The observation that real wages are stagnant reflects wages measured in terms of the overall consumer price index. But this obscures the truth that real wages measured in terms of different goods have behaved very differently…

Adair Turner: Is rapid credit growth really necessary to boost GDP growth?:

The fundamental question therefore remains: Is there something about modern economies that makes adequate demand growth impossible without damaging credit growth? Rising inequality is one driver of this apparent “need for credit.” Wealthier people have a higher marginal propensity to save than poorer people. As the rich get richer, consumption growth may decline, unless the financial system uses their savings to lend to the relatively poor. But much of this debt may prove unsustainable. As Raghuram Rajan pointed out in his book Fault Lines, the US subprime-mortgage boom and bust owed much to pitiably slow growth in lower-income Americans’ real earnings over the last three decades…. A more stable growth model requires less of the “wrong type of debt” – that is, debt that finances purchases of existing assets, supports consumption without addressing the drivers of inequality, or results from unsustainable global imbalances. Without targeted policies aimed at limiting such debt, the world economy risks secular stagnation or further cycles of instability and crisis.

I think the very smart young invincible Brian Buetler gets one wrong here…

The problem is that for Bill Keller–and for so many of the other “centrists” whose first, last, and only policy recipe for dealing with every economic problem is long-term entitlement cuts–ascribing value judgments to different treatment regimes in general, and convincing the world that old, sick people have too free a ride and are exploiting the rest of us–is their core policy goal.

The health-policy and health-finance technocrats who designed the Affordable Care Act may have all been focused on improving access, improving efficiency, and educating people about what their end-of-life treatment choices and outcomes are likely to be. But that’s not what Bill Keller is focused on: He’s focused on graphs like this:

without understanding what such graphs mean, and concluding from them that granny needs to be set on the ice flow will-she nil-she.

Sarah Palin’s claim that “death panels” were in the ACA was a misleading smear. But the popular fear that there are influential people who think healthcare reform is not about giving people choices but rather keeping people from having the resources to make the choice to try to use medical care to extend their life–that fear is not crazy.

Brian Buetler: How Times columnist Bill Keller aids Sarah Palin’s “death panel” smear: “I bring this all up in response to a bizarre and thoughtless pair of opinion columns, written by Emma Keller… and her husband, Bill…Both articles implicitly and explicitly criticize Lisa Adams, a 44-year-old mother with metastatic cancer….

Continue reading “Health Care Reform Is About Education, Choice, and Efficiency. Isn’t It?” →

Matthew Yglesias: Welfare works for kids: Children whose parents get money grow up healthier and live longer:

Anna Aizer, Shari Eli, Joseph Ferrie, Adriana Lleras-Muney, and a team of research assistants took a detailed look at kids who grew up in Mothers’ Pension households and drew some conclusions about the long-term benefits of modest cash transfers. The program is old enough that almost all the kids whose moms received money are dead now, allowing the researchers to conclude definitively that it increased life expectancy.

What’s more, World War II draft records show… sons of the accepted had early adult incomes that were 20 percent higher than those of rejected mothers; these sons were also 35 percent less likely to be underweight as adults, lived a year longer, and had about a third of a year of additional schooling. Since the rejected sons’ families were, on average, somewhat better off, these figures should somewhat understate the real impact of the pensions. The benefits weren’t gigantic—but the sums of money involved were pretty modest as well. Benefit levels varied from state to state, but averaged out to about $260 a month (adjusted for inflation), or around half of a modern-day TANF check.”

Megan McArdle: You Can’t Have a Conversation About Sexism at Gunpoint: “Last week, I wrote an essay on women on the Internet in which I argued that the real problem is not the sexualized remarks and threats of violence….

No, the real problem, to me, is that women attract an undue amount of nonsexual rage and denigration from people who don’t like the opinions they hold. People are ruder, angrier, more condescending and more dismissive with women who make arguments they don’t like…. This is not just something men do. It is not just something conservatives, or liberals, or nonfeminists do. It is a general rule….

Continue reading “Evening Must-Read: Megan McArdle: You Can’t Have a Conversation About Sexism at Gunpoint” →

Must-Reads:

1. Jared Bernstein: Will the Real Unemployment Rate Please Stand Up?: “Let’s be conservative and say that 2/3 of the decline in the labor force [participation] rate is “fixable”…. Then the unemployment gap is: 6.7 + (2/3 x 3.4) – 5.5 or about 3.5 ppts (that 3.4 is the drop in the labor force rate using quarterly data since its pre-recession peak)…. I wouldn’t be so quick to plug 5.5 [as the natural rate of unemployment] into all those equations above…. If you use, say, 4.5 instead that’s another percentage point of slack. Fed chair Janet Yellen (still getting used to writing that!) knows this stuff but it’s still worth making a lot of noise about…. We’re not going 60… we’re going 40.  So keep that foot off the brake…”

2. Steve M.: Paul Krugman has responded to an article by National Review’s Kevin Williamson about poverty in Appalachia “‘Williamson’s piece… has a moral: the big problem… is… government aid creates dependency…. But the underlying story of Appalachia is in fact one of declining opportunity…’ Williamson thinks the proper response… is self-righteous smugness… class warfare…. ‘Professor Krugman and those who share his orientation see the bottom half… as passive participants… not people who do things but people to whom things are done, the direct object in Lenin’s summary of politics: ‘Who? Whom?’ And from the point of view of the policymaking class… something like dogs exhibiting various degrees of ruliness while waiting for table scraps…’

   “Or what, Kevin? What are people in coal country supposed to do if their job searches don’t result in… jobs?… Plenty are voting with their feet by getting the hell out…. As for the rest, many of whom might not be able to afford to leave (no cash, underwater homes) — what are they supposed to do? Become new-media entrepreneurs? Load up the truck and head to Silicon Valley for some venture capital? This… right-wing arrogance… Michelle Malkin…. ‘Romney types, of course, are the ones who sign the front of the paycheck, and the Obama types are the one who have spent their entire lives signing the back of them’: the right simply believes that it’s disgraceful to be an ordinary worker…. If you’re not a capitalist, you’re scum…. If you’re arguing, that is, that benefits are the only reason people don’t have jobs–then that should have been just as true in 2006, say, as it is now, becuse just as many lazer takers should have been getting all those horrible benefits, just ’cause they like living that way. Is the decrease in labor-force participation since Wall Street crashed the economy really just a coincidence? Scummy liberal elitist minds want to know.”

3. Mike Konczal: No, we don’t spend $1 trillion on welfare each year: “If you’ve read any conservative commentary on the war on poverty in the past week, you’ve likely seen this talking point: ‘We spend $1 trillion each year on welfare and there’s been no reduction in poverty.’ That’s crazy! Then, a sentence later, you’ll probably see a line like this: ‘It’s true. According to a recent report, we spend a trillion dollars on means-test programs each year, yet the official census numbers show no reduction in poverty.’… If you are reading that second line quickly, you probably think it bolsters the credibility of the first line…. The second sentence is… an escape hatch…. We don’t spend anywhere near a trillion dollars on welfare… and we do reduce poverty…. Dylan Matthews has already dissected the claim that poverty hasn’t declined…. It’s just that the ‘official’ poverty rate doesn’t factor in the earned-income tax credit or food stamps in its calculations…. The claim about $1 trillion on ‘welfare’ is more interesting and complicated. It shows up in this recent report from the Cato Institute…. The federal government spends just $212 billion per year on what we could reasonably call ‘welfare’…. We can’t have a productive conversation unless we make it clear what the government is, and is not, doing. And it is spending a lot less on welfare than conservatives claim, and getting fantastic results for what it does spend.”

4. Paul Krugman: You’re All Losers: “The other day someone… asked an interesting question: when did it become so common to disparage anyone who hasn’t made it big, hasn’t gotten rich, as a ‘loser’? Well, that’s actually a question we can answer, using Google Ngrams… I think this word usage reflects something real — a growing contempt for the little people… not limited to Republican politicians. Still, it’s striking how unable they are to show any empathy…. The most famous example, of course, is Mitt Romney, who didn’t just disparage 47 percent of the nation; he urged everyone to borrow money from their parents and start a business. I still think the most revealing example to date was Eric Cantor, who marked Labor Day by tweeting: ‘Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.’ But Marco Rubio’s latest speech deserves at least honorable mention, for the airy way he dismissed the idea of raising the minimum wage: ‘Raising the minimum wage may poll well, but having a job that pays $10 an hour is not the American dream.’…

   “OK, I know what the answer will be: conservative policies will lead to economic growth, and that will raise all boats, the way it did in the days of Saint Ronald. Except, you know, it didn’t…. So what is the GOP agenda to help people who aren’t going to build businesses and get rich? There isn’t one — partly because they really can’t reconcile any real agenda with their overall ideology, but also because, deep in their hearts, they consider ordinary people trying hard to get by a bunch of losers.”

Continue reading “Things to Read on the Afternoon on January 13, 2014” →

Paul Krugman: You’re All Losers:

The other day someone… asked an interesting question: when did it become so common to disparage anyone who hasn’t made it big, hasn’t gotten rich, as a “loser”? Well, that’s actually a question we can answer, using Google Ngrams… the term “losers” has become much more common since the 1960s. And I think this word usage reflects something real — a growing contempt for the little people… not limited to Republican politicians. Still, it’s striking how unable they are to show any empathy…. The most famous example, of course, is Mitt Romney, who didn’t just disparage 47 percent of the nation; he urged everyone to borrow money from their parents and start a business. I still think the most revealing example to date was Eric Cantor, who marked Labor Day by tweeting:

Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.

But Marco Rubio’s latest speech deserves at least honorable mention, for the airy way he dismissed the idea of raising the minimum wage: “Raising the minimum wage may poll well, but having a job that pays $10 an hour is not the American dream.”…

Continue reading “Afternoon Must-Read: Paul Krugman: The Rhetoric of: “You’re a Loser!”” →