A Political Movement? …

Cheap Shots Aimed at Scientists A Political Movement? – In a prior post I described a politically motivated cheap shot aimed at a computer scientist at Northwestern. I looked closely at the circumstances that fed the situation. I concluded that the charges lacked merit. Was that an isolated example? No, it was not. In this short post, I point towards another recent example with many similar features.Look, people differ in their priorities, and that is why governments have policy issues to debate. What we observe here, however, is not a rational policy debate about the governance of science. Rather, we are observing a debate characterized by cheap shots, misleading headlines, and juvenile argumentation.This is bad news for anyone who values the contributions of science to the US economy.
Impact of the Great Recession on Metropolitan Immigration – Brookings – During 2009, the U.S. economy was in the throes of the Great Recession, and immigration had become a highly polarized topic of debate, reflected by a rise in anti-immigrant sentiment. Immigration was high prior to the Great Recession which offi cially commenced in December 2007. While immigration seemed to come to a standstill in 2008, an increase between 2008 and 2009 may be reflective of the first signs of the comeback of the national economy. At the very least, the demand for immigrant workers seems to have reappeared, though immigrant earnings are diminished in the post-recessionary period.Despite the national trend, metropolitan markets have experienced the recession in different ways, causing shifts in immigrant settlement patterns, at least for the time being.
Global Banks Far Short of Capital Rules, Basel Report Shows… The largest global banks, especially those in Europe, may be hundreds of billions of dollars short of the capital reserves needed to comply with new regulations and may face pressure to shed risky assets as a result, according to figures released Thursday by two influential regulatory panels.  One of the panels, the Basel Committee on Banking Supervision, also provided a more detailed description of the rules it was developing for global banks, prompting some critics to complain that the definition of banks that are too big to fail seemed to be narrowing.  Based on their 2009 financial results, the 94 largest banks would have been 577 billion euros, or $769 billion, short of the risk-free capital they will need to hold under new rules endorsed by the Group of 20 countries, the committee said.  The banks have until Jan. 1, 2019, to fully comply with the new rules, and many have already started bolstering their reserves.
QOTD: "Sets the System Up for Cuts Down the Road" –  Economics professor Mark Thoma of the University of Oregon, who noticed the problem as soon as the details of the deal became known:  The estate tax and the extension of high end tax cuts are causing the most heated reactions, and the payroll tax cut is generally being applauded. But I see the payroll tax reduction as potentially troublesome as well. Though the revenue the Social Security system loses due to the tax cut will be backfilled from general revenues, the worry is that the tax cut will not expire as scheduled — temporary tax cuts have a way of turning permanent. That’s especially true in this case since labor markets are very unlikely to recover within the next year and it will be easy to argue against the scheduled "tax increase" for workers. In fact, it will never be a good time to increase taxes on workers and if the tax cut is extended once, as it’s likely to be, it will be hard to ever increase it back to where it was. That endangers Social Security funding — relying on general revenue transfers sets the system up for cuts down the road
The New Tax Deal: Reaganomics Redux – Robert Reich – More than thirty years ago, Ronald Reagan came to Washington intent on reducing taxes on the wealthy and shrinking every aspect of government except defense. The new tax deal embodies the essence of Reaganomics. It will not stimulate the economy. A disproportionate share of the $858 billion deal will go to people in the top 1 percent who spend only a fraction of what they earn and save the rest. Their savings are sent around the world to wherever they will earn the highest return.  The only practical effect of adding $858 billion to the deficit will be to put more pressure on Democrats to reduce non-defense spending of all sorts, including Social Security and Medicare, as well as education and infrastructure. It is nothing short of Ronald Reagan’s notorious “starve the beast” strategy. In 2012, an election year, when congressional Democrats have less power than they do now, the pressure to extend the Bush tax cuts further will be overwhelming

Federal Welfare Reform Funding Declines Despite Rising Need – In recent weeks, the already weak safety net for some of our most vulnerable citizens became substantially weaker.  For the first time since 1996 when President Clinton and Congress created the Temporary Assistance for Needy Families (TANF) block grant as part of welfare reform, no additional TANF funds are available from the federal government to help states respond to the large increases in the number of impoverished families as a result of a recession.  We’ve just issued an analysis on the topic. The federal cut-off in recession-related help to states is due to two factors:

  • Congress recently enacted legislation that will essentially end funding for fiscal year 2011 for the TANF Contingency Fund, which was specifically created in welfare reform to help states respond to increased need during hard economic times.
  • Congress failed to extend the TANF Emergency Fund, which was created in the 2009 Recovery Act to create jobs and help families weather the current downturn, but which expired on September 30.

Aggravating these problems, the 17 states that have received Supplemental Grants every year since TANF was created (most of them relatively poor states) will see those grants cut by 33 percent this year, unless Congress provides additional funding to restore them to their original level.

Florida judge considers 20-state challenge of health-care law Three days after a federal judge in Virginia voided a key provision of the U.S. health-care overhaul, attorneys for 20 other states will ask a federal judge in this Florida city to do the same.  As in the Richmond case, Thursday’s hearing before Judge Roger Vinson of the U.S. District Court for the Northern District of Florida largely centered on whether Congress has the constitutional authority to require virtually all Americans to obtain health insurance or pay a fine.  However, the multistate case being heard in Florida is one of the few among the two dozen pending challenges to the law that also contests its expansion of eligibility requirements for Medicaid, the joint federal-state health insurance program for the poor.

A Survival Strategy for the Eurozone – Nouriel Roubini – Short of full fiscal unification – or a variant of it in the form of eurozone bonds – this increase in official resources would occur through a much-enlarged European Financial Stability Facility and a much greater commitment by the European Central Bank to long-term bond purchases and liquidity operations to support banks. Since quasi-fiscal union implies that the eurozone’s core economies could end up systematically bailing out those on the periphery, only a formal loss of fiscal sovereignty – a credible commitment by the peripheral countries to medium- and long-term fiscal discipline – could overcome the current political resistance of Germany and others. But even a larger envelope of official resources is not sufficient to stem the insolvency problems of Greece, Ireland, and, possibly, Portugal and Spain. Thus, a second set of policies and institutional reforms requires that all unsecured creditors of banks and other financial institutions need to be “treated” – that is, they must accept losses (or “haircuts”) on their claims. This is needed to prevent even more private debt being put on government balance sheets, causing a fiscal blowout. If orderly treatment of unsecured senior creditors requires a new cross-border regime to close down insolvent European banks, such a regime should be implemented without delay.

 I come to bury Larry Summers, not to praise him – To say certain people in the media weren’t sorry to see Big Larry go is understating matters. The Washington Post’s Dana Milbank described him as a man who “rose to national prominence because of his intellect but is now leaving government known more for his dyspepsia.” In Summers’s final public appearance in Washington, Reuters blogger Felix Salmon noted, he failed to thank President Obama for hiring him as head of the National Economic Council. Why would he do this? “I don’t think Summers thinks that way,” Salmon wrote. “In his mind, the thanks should all flow the other way.” At the National Interest, Jacob Heilbrunn dismissed Summers thus: “He exemplifies the Ivy League syndrome: He is a high-IQ moron.” Still, reporters need to get over it. After all, we aren’t the only folks Larry considers intellectually beneath him. Such a category would include most members of President Obama’s cabinet and their top policy advisers; many of his colleagues in the White House; virtually all foreign officials; ninety per cent of the Harvard faculty; and a similar proportion, or possibly higher, of his fellow academic economists.

Banana Republic Watch: New York City More Unequal Than Chile Yves Smith – A newly released report, “Grow Together or Pull Further Apart? Income Concentration Trends in New York,” by the Fiscal Policy Institute gives a picture of how New York City is now at Latin American levels of income disparity. New York’s top one percent has an income share that one and a half times as high as the 23.5 percent historically-high national level….The city used to have a broad middle class, rooted in a vast manufacturing sector and mid-level positions in corporate headquarters as well as in education, government, construction and other good-paying blue-collar jobs… the city’s labor market has seen the disappearance of thousands of middle-paying jobs and the growth in their place of moderate- to low-paying jobs, mainly in services. Given its degree of inequality, if New York City were a nation, it would rank 15th worst among 134 countries with respect to income concentration, in between Chile and Honduras. Wall Street, with its stratospheric profits and bonuses, sits within 15 miles of the Bronx—the nation’s poorest county.And if you think that the rising tide of burgeoning financial services profits has improved the living standards of those at the bottom, think again: over the period from 1980 to 2007 in New York, when total inflation-adjusted income in the state grew an average of 2.1 percent a year after adjusting for population increase, incomes for those in the bottom half of the income spectrum generally declined while those in the middle income range rose but at only a fraction of the pace of total income growth.


Will National Health Care Improve Our Economic Health? – During the latter half of the debate over the health care bill, you started to hear an intriguing argument about the effects of the bill.  Where conservatives claimed that it would stifle the economy, liberals countered that in fact, it would unleash the entrepreneurial power of people "locked into" their jobs by fear of losing their health coverage.  David Leonhardt rehearses this argument in his most recent column: Guaranteeing people a decent retirement and decent health care does more than smooth out the rough edges of capitalism. Those guarantees give people the freedom to take risks. If you know that professional failure won’t leave you penniless and won’t prevent your child from receiving needed medical care, you can leave the comfort of a large corporation and take a chance on your own idea. You can take a shot at becoming the next great American entrepreneur. But while I think that Leonhardt’s narrative about freedom from fear is certainly one possible outcome of passing health care reform, there are also quite a few reasons to think that it might not be true.  I worked through a bunch of them earlier in the year, and still believe, as I noted then, that "the number of people who wish to start businesses, but are held back by the health insurance problem, cannot be zero."
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