Bill Black — Is Politico or Third Way More Divorced from Reality?

Bill deftly trashes the Third Way New Democrats. Bill Clinton and Tony Blair were as toxic as Ronald Reagan and Margaret Thatcher through their "triangulation," which amounted to moving right to capture the center.

New Economic Perspectives
Is Politico or Third Way More Divorced from Reality?
William K. Black | Associate Professor of Economics and Law, UMKC

See also

The title below should read, "Why The Democrats Are Unable to Defend the u.s. From the 'Most Vicious' Republican Party in History."

Ralph Nader deconstructs the present by reviewing the history. This began decades ago, arguably under conservative Jimmy Carter.

The Intercept
Ralph Nader: The Democrats Are Unable to Defend the u.s. From the “Most Vicious” Republican Party in History
Jon Schwarz interviews Ralph Nader

David Ruccio — Dual economies and the vanishing middle-class

Both Peter Temin and I are concerned about the vanishing middle-class and the desperate plight of most American workers. We even use similar statistics, such as the growing gap between productivity and workers’ wages and the share of income captured by the top 1 percent.

And, as it turns out, both of us have invoked Arthur Lewis’s “dual economy” model to make sense of that growing gap. However, we present very different interpretations of the Lewis model and how it might help to shed light on what is wrong in the U.S. economy—with, of course, radically different policy implications.

It is ironic that both Temin and I have turned to the Lewis model, which was originally intended to make sense of “dual economies” in the Third World, in which peasant workers trapped by “disguised unemployment” and receiving a “subsistence” wage (equal to the average product of labor) in the “backward,” noncapitalist rural/agricultural sector could be induced via a higher “industrial” wage rate (equal to the marginal product of labor) to move to the “modern,” capitalist urban/manufacturing sector, which would absorb them as long as capital accumulation increased the demand for labor.

That’s clearly not what we’re talking about today, certainly not in the United States and other advanced economies where agriculture employs a tiny fraction of the work force—and where much of agriculture, like the manufacturing and service sectors, is organized along capitalist lines. But Lewis, like Adam Smith before him, did worry about the parasitical role of the landlord class and the way it might serve, via increasing rents, to drag down the rest of the economy—much as today we refer to finance and the above-normal profits captured by oligopolies....

So, our returning to Lewis may not be so far-fetched. But there the similarity ends. 

Occasional Links & Commentary
Dual economies and the vanishing middle-class
David F. Ruccio | Professor of Economics, University of Notre Dame

Gallup Chairman and CEO — What recovery?

I've been reading a lot about a "recovering" economy. It was even trumpeted on Page 1 of The New York Times and Financial Times last week. 

I don't think it's true.

Gallup

The Invisible American

Jim Clifton | Chairman and CEO at Gallup

ht Zero Hedge

Mark Thoma — Why the Working Class Is Choosing Trump and Sanders

Donald Trump recently defended Social Security, Medicare, and Medicaid:

“Every Republican wants to do a big number on Social Security, they want to do it on Medicare, they want to do it on Medicaid. And we can’t do that. And it’s not fair to the people that have been paying in for years and now all of the sudden they want to be cut.”

An opinion piece in the Wall Street Journal reflects the negative reaction to Trump’s remarks from many Republicans:

“Mr. Trump is a political harbinger here of a new strand of populist Republicanism, largely empowered by Obamacare, in which the ‘conservative’ position is to defend the existing entitlement programs from a perceived threat posed by a new-style Obama coalition of handout seekers that includes the chronically unemployed, students, immigrants, minorities and women … who typically vote Democrat.”…

The dialectic between advocates of the market state and those of the welfare state is coming to a head politically. Is the tide beginning to turn? It seems so. Will this be a wave election that turns it? Maybe not. But momentum is now gathering.

The Fiscal Times
Why the Working Class Is Choosing Trump and Sanders
Mark Thoma | Professor of Economics, University of Oregon

Diane Coyle — Inequality and the seeds of destruction

The alliance of capitalism and democracy is breaking down owing to inequality as the middle abandons the elites's agendas. The traditional political theory of republicanism that elites know best how to manage both business and the country is on shaky ground.

The Enlightened Economist
Inequality and the seeds of destruction
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Maybe more creative destruction or creative disruption than just destruction. Or maybe disruptive innovation. This is being reflected in the rise of populism in the US.

Scott Adams

The Second American Revolution - What Then?

Trump, FOX News, and Megyn Kelly Explained (Master Persuader Series)

The Gazette (Cedar Rapids, Iowa)
Iowa Youth Straw Poll: Iowa students say it's Trump and Sanders —More than 280 schools in 80 counties participate in Iowa  Straw Poll

Rob Boshart and Vanessa Miller

In 1964 Bob dylan and Mario Savio were announcing an impending revolution. Now it is populist presidential candidates. The time scertainly are a-chanin'.

Pew Research Center — The American Middle Class Is Losing Ground

No longer the majority and falling behind financially

Pew Research Center

The American Middle Class Is Losing Ground

Trump just said something really, really, stupid

I've been really liking Trump, but now he comes out and says something really stupid. (In my view.)

He says he would fight to not raise the debt ceiling. Fight to NOT RAISE THE DEBT CEILING.

Not raising the debt ceiling is the same as fixing the quantity of money (dollars). We might as well go back on the gold standard.

Trump says he would do this by "cutting lots of fat" in the budget. He says there's lots of fat.

He's wrong. About 60% of the $4 trillion the gov't spends annually comes from five items: Social Security, Medicare, Medicaid, defense and interest on the debt.

He said he not going to cut Social Security. He said that everyone will get health care. He said that he is going to really "beef up" our military. So where does he see all this "fat?" Education? Highways? Fire all gov't employees?

Trump needs to realize that there is no fat. Whatever he cuts will only kill the middle class even more and he says he's all about helping middle class.

Philip Pullella — Pope offers rare 'mea culpa' about neglect of middle class

Pope Francis acknowledged on Monday he had neglected problems of the middle class and said he was willing to have a dialogue with Americans who disagree with his criticism of capitalism.

Francis, speaking to reporters on the papal plane returning from a grueling 8-day trip to Ecuador, Bolivia and Paraguay, also said he hoped the Greek crisis could lead to more oversight so other countries would not experience the same problems.

During the hour-long conversation with the Francis, who has made defense of the poor a major plank of his papacy, a reporter asked why he had hardly ever spoken about the problems of the "working, tax-paying" middle class.

He offered a rare papal mea culpa, thanking the reporter for his "good correction."
"You're right. It's an error of mine not to think about this," he said.

"The world is polarized. The middle class becomes smaller. The polarization between the rich and poor is big. This is true. And, perhaps this has led me to not take account of this (the problems of the middle class)," he said.

Francis said he spoke about the poor often because they were so numerous but that ordinary working people had "great value."

"I think you’re telling me about something I need to do. I need to do delve further into this ....," he said.

I would not be surprised to see an eventual papal encyclical on political economy that updates Catholic social teaching with respect to inequality. Evangelii Gaudium was a beginning and Laudato Si' elaborated some on it, but I doubt that we have heard the last word from the pope on it.

The Vatican needs better economists though.

Reuters
Pope offers rare 'mea culpa' about neglect of middle class
Philip Pullella

Kenneth Thomas — What is Noah thinking?

Noah Smith put up a post Sunday purporting to show that things aren't so bad for the middle class. Then he immediately shows us a chart of median household income. Stop right there. As I have argued before, this is always going to give you a rosier picture than reality. We need to look at individual data, aggregated weekly (because average hours per week have fallen for non-supervisory workers), to know what's going on. 

Because the individual real weekly wage is still below 1972 levels, households have had to compensate by having more incomes and going into debt. They have traded time and debt for current consumption. This is not an improvement in the middle class lifestyle. Commenter Richard Serlin points out that we also need to consider risk as well as average incomes, and he is right. The middle class is less secure than it was in 1972. 

Noah has lots of interesting things to say, and you should check out his blog if you haven't already. But this is an error on his part, and I don't understand what he's thinking.

Middle Class Political Economist
What is Noah thinking?
Kenneth Thomas | Professor and Research Fellow, Center for International Studies, University of Missouri at St. Louis

Cyber Warriors Wanted. Diabetes Not An Impediment.

   (Commentary posted by Roger Erickson)

General says US army could waive combat training [to get more of "our" hackers fighting "their" hackers].

Just what we need?

Another generation of humans divided & conquered.

Mere gladiators fighting one another for ...... for whom?

What if connected teens worldwide turn on those who suppose they are the masters?

Revenge of the ex Middle Class?

Forget Skynet, and think Small-Fry Net.

How ya gonna keep 'em down on the penal colony, if ever they see democracy?

Why Won't Our Senate Hold Hearings on Stealth-Finance Attacks Against The MiddleClass?

   (Commentary posted by Roger Erickson)

J&J Sixpack don't even know that they're being gutted, and are actually voting for MORE protection of their parasites? Sheesh! Teddy Roosevelt had it right, 100 years ago. Our job is not to be for or against banks, but to put them back in their adaptive place, SERVING the US Middle Class.

Senate to Hold Hearing on Cyberattacks Against Finance

Who do you suppose is behind the cyber "attacks" on our public servants? Another convenient StrawMan? I expect more of the following message, continuously.

"Clear the streets & empty your pockets. We must temporarily suspend all civil rights because of our need to defeat the Straw Men."

[translated from NeoLiberalese]

Corporatists Divide & Conquer ... By Getting The Plebes Arguing Over Crumbs

   (Commentary posted by Roger Erickson)

Reich & Hanauer Waste Political Capital Arguing Over Crumbs

They want to restore guaranteed overtime to more salaried workers - often middle "management."

Sadly, Reich & Hanauer are missing the point. Arguing details while missing the pink elephant in the room. Worse, their message is addictive for the Middle Class they say they want to save.

Overtime is profitable for corporations. It's how they nudge current staff back towards 80 hour workweeks instead of 2x as many people working 40 hours per work. That's bad for the Middle Class, however, since it reduces the number of people working, and also promotes private savings while reducing net consumption.

Instead, why not just lower all taxes on labor, so that the working class can consume more of what they're able to produce?

If citizens don't consume what they produce, someone just uselessly hoards that production .. which doesn't do anyone any good in the long run. 

In a social species, the best form of SAVINGS is full investment in co-citizen capabilities ... since they're the ones who look out for one another.

Increasing an Output Gap benefits even parasites only short term, by making their host transiently vulnerable ... so that the parasites can insert themselves into protected positions. Yet that protection only persists if the host's vulnerability is only transient. A sustained Output Gap guarantees that some other culture will have a higher Adaptive Rate, some culture with immunity to the current form of NeoLiberals.

There's a simple principle at work.

The pricing structure's connected to the monopoly supplier, and the monopoly supplier's behavior is connected to the Cultural Adaptive Rate.

If either connection is broken, the CAR stalls ... and we start to roll backwards.

Instead of more overtime, why not see all the way through, and raise wages, cut FICA/Medicare/labor taxes, mandate a 32 hour work week, and guarantee everyone 1 month of paid vacation per year? We'd have fewer McScrooge billionaires sitting on their hoarded "piles" lobbying for preparation H-bomb subsidies (corporate welfare) ... but we'd have a virtuous cycle of consuming more, thereby providing the incentive to produce ever more.

Reich's getting senile. I'd quit listening to him. And tell Hanauer to raise his aim about 10x higher, or not bother.

There are times when arguing over crumbs makes you miss the train. Then it's too late.

That's what Upper Looting Class parasites think they want, along with their mindlessly narrow NeoLiberal lapdogs. Divide & conquer, by getting the plebes arguing over crumbs. And, hopefully, keep 'em arguing long enough for the gravy train to slip out of the next station. Is it our goal to hunker down at some fixed station in life, or to be onboard the moving train of cultural evolution?

We used to know these things. Why do grandchildren have to re-learn ... the hard way ... things their grandparents knew, yet their parents either forgot, or weren't taught?

Nevertheless, as you can see below, whole citizen armies can be mobilized to argue over crumbs, and the Upper Looting Class never hesitates to spend whatever it takes to mobilize competing Plebe armies to divide and keep busy conquering one another ... FOR the ULC. Yes, division & recombination works, but through coordination ... not factional strife.

And yes, those plebe armies - staging social civil war for the profit of parasites - include occasional VCs, planted or not.

Riddle me this, propaganda man.

If a VC speaks out of paradigm in a plebe army (or sets his sights too low) ... does it matter, in the long term, what he says?

...

From: Robert Reich <info@democracyforamerica.com> 

Dear [Plebe] -- 

In November, President Obama issued an executive order on immigration, protecting millions of families from deportation. There's another action the President can take to help working Americans, without waiting for Congress:
He can direct the Department of Labor to expand the number of workers who can receive overtime pay, putting more money in the pockets of as many as 10 million Americans. 

Seattle-based venture capitalist Nick Hanauer wrote an important piece in Politico calling on President Obama and the Department of Labor to make more workers eligible for overtime. Nick and I have joined forces with Democracy for America to launch a petition to the president asking him to raise wages and create jobs by expanding overtime. Below is the email Nick sent to DFA members. 

I hope you'll sign Nick's petition. President Obama is listening. Let's give him the support he needs to expand eligibility for overtime pay in America. 

- Robert
Robert Reich
Former Secretary of Labor 

---------- Forwarded message ----------
From: Nick Hanauer via Democracy for America
Date: Fri, Nov 21, 2014 at 10:40 AM
Subject: SIGN MY PETITION: Tell President Obama to restore overtime pay! 

I'm getting rich and you're getting screwed. Sorry. But with a stroke of the pen, President Obama can make sure you get what you earned, without any congressional action at all. 

If it feels like you're struggling harder than your parents did, working longer hours for less money, it's because you are. Meanwhile, a handful of capitalists like me are growing wealthy beyond our parents' wildest dreams.
What's changed? Overtime pay. 

Your parents got a lot of it, and you don't. In 1975, more than 65 percent of salaried workers earned overtime pay -- today, just 11 percent do. That's because the federal government has allowed the overtime threshold to erode to less than the poverty line for a family four. Earn more than $23,660 a year, and business owners like me can make you work unlimited overtime hours for no additional pay at all. 

But to get the country back to the same equitable standards we had in 1975, the Department of Labor would simply have to raise the overtime threshold to $69,000. In other words, if you earn $69,000 or less, the law would require that you be paid time-and-a-half for every hour worked over 40 hours a week.
That would mean 10.4 million middle-class Americans with more money in your pockets or more time to spend with friends and family. And if corporate America didn't want to pay you time and a half, it would need to hire hundreds of thousands of additional workers to pick up the slack -- slashing the unemployment rate and forcing up wages. 

President Obama could also expand the ranks of workers eligible for overtime pay by ending the exemption that denies overtime to teachers, doctors, computer professionals, and many others. And he can do all this simply by instructing the Department of Labor to change the rules -- immediately putting money into the pockets of millions of American workers. 

That's why I'm joining Democracy for America and Robert Reich in calling on President Obama to do exactly that. Sign our petition to the president: Raise the overtime threshold to give more Americans the overtime pay they've earned! 

Many of my fellow capitalists will warn you that a higher overtime threshold would be a job killer, but the truth is, we already have more capital than we know what to do with. Corporate profits have doubled over the past 40 years to more than 12 percent of GDP; that’s about a $1 trillion a year in extra profits.
But rather than invest in creating jobs or raising wages, executives like me are mostly spending our windfall profits manipulating the price of our own shares through stock buybacks. In fact, over the past decade, public U.S. corporations have spent an astounding $6.9 trillion buying back shares, reducing the total outstanding, and increasing the value of the remaining shares owned by capitalists like me. 

We get richer. You get nothing. Again, sorry. But we're only playing by the rules -- rules that President Obama has the power to change. 

President Obama is showing that he isn't shy about using his executive powers to do good things for the American people. But the White House needs a strong public push -- the president needs to hear from as many of you as possible that overtime pay is to the middle class what the minimum wage is to the working poor, and that a stronger middle class is good for business and good for America. 

Join me, Robert Reich and Democracy for America in telling President Obama to instruct the Labor Department to expand overtime eligibility. Let's raise the wage and put more Americans back to work. 

Thank you for standing up for the middle class. 

- Nick

[Roger: Nick's heart may be in the right place, and he may be trying to do what he thinks is right, yet to me he's no Saint Nick. We have a class war to win, not just a Pyrrhic Victory to get sidetracked to. You don't win wars by orienting strategy to local tactics. Keep the end prize in mind ... or don't bother.]

Dr. Housing Bubble — The middle class migration out of California

People look at population growth in California and see nothing that stands out. Digging into the numbers you find some interesting figures. First, the main reason California is actually growing is because of international migration. California for well over a decade is losing domestic residents. That is, “domestic” Californians on a net basis are heading out of the state. On a more micro level, you are seeing the middle class either being phased out of the state or being pushed into lower priced inland regions. It is an interesting trend that is also happening in the tech hungry Bay Area. Housing continues to be an important topic because the vast majority of income is spent on housing. California has one of the highest percentage of families spending half or more of their monthly income on either rent or housing payments. In places like Los Angeles the main international migration is coming from Asia. You also see this driving up real estate values in certain areas and this contributes to domestic out migration. The migration numbers are interesting and shed light on this global trend.

Dr. Housing Bubble
The middle class migration out of California: While domestic migration is up, foreign migration is filling the gap.

Graft & Corruption, Here We Come

   (Commentary posted by Roger Erickson)

Courtesy of Middle Class Citizen's Ignited

FEC just ruled that parties can now raise twice as much cash by earmarking contributions for national conventions

But we'll finally balance our fiat!!! (sob!)

What Aspect Of SCALE & Aggregate Degrees of Freedom Don't We Teach To Enough Kids, In All Schools, Everywhere?

   (Commentary posted by Roger Erickson)



(Photo: walking towards, instead of away from, an impending tsunami of context changes.)

Why is it that group intelligence always seems to recede just before devastating changes in group context? Ordinary humans are clearly talented enough to devise many practical applications for exploring perceived options. There are countless examples, from sublime to mundane, such as this one.

Most Pet Lovers Don't Perceive Equal, Parallel Need To Help A Handicapped Middle Class

Do we have to practice austerity, or can we achieve everything we can imagine, and more?

Application of our talents is clearly gated by the process of recognizing and orienting to local, regional or systemic context. Perceptions & practice then drive us to optimize an increasingly complex combination of actions, so that we can all sail through that thicket of micro-to-macro contexts. Social species work exactly BECAUSE recombinant member interactions provide compounding group resiliency.

Please ask every talented person you know, to design some Automatic Stabilizer policies, for a struggling and starving Middle Class.

We are what we practice, even at a cultural scale. So what triggers do we need, to get more of ourselves to perceive our own, constrained, self-handicapped electorate?

Too few seem to see a MiddleClass limping down the road to oblivion, right into the path of another set of predatory sociopaths, whether "Brits" in India, or an Upper Looting Class that eventually self organizes everywhere.

To avoid these self-inflicted constraints, we need an electorate that practices simultaneously perceiving the full spectrum individual needs, AND team dynamics, AND social interdependencies. To maintain Adaptive Rate, a working culture has to juggle all available input, and keep all it's increasing options available.

What aspect of SCALE don't we teach enough kids, in all schools, everywhere?

Instead of hoarding static assets as rent, why aren't we seeing the value of employing everyone to explore our full range of cultural options, so that we can practice achieving even more than what any individual can currently imagine?

Join a citizen's army? Be all that, together, "we" can be?

Support cultural intelligence? A group mind is a terrible thing to waste?

Why don't more emerging students grasp the scale of the group options to be explored? What methods do we need, in order to change our re-emerging electorate back towards a more adaptive path?

Methods drive results?

  Milestone goals drive methods?

    And Desired Group Outcomes drive milestone goals?

      And interacting imaginations drive Desired Outcomes - aka, Group Imagination?

We can't get there by having everyone wishing to hoard above average amounts of static assets. The reality of the boring outcome actually achieved from that dream has repeatedly been trivial compared to increasing our dynamic assets, an alternate outcome which is available to any organized aggregate - but only if they first recognize it.

Robert Reich — How America’s Real Business Leaders Want to Save Capitalism

It's the demand, stupid. We demand demand.

How America’s Real Business Leaders Want to Save Capitalism
Robert Reich

Rob Wile — Parents Across The Developed World Say Their Kids Are Screwed

Parents in developed markets overwhelmingly believe their children will be worse off financially than they were, according to a recent chart from Citi.  

France is the gloomiest by a wide margin, with 90% of adults saying their children will face greater hardships than they did. Israel and Australia were the least pessimistic. In the U.S., 62% said their children's fortunes will have deteriorated.

Business Insider
Parents Across The Developed World Say Their Kids Are Screwed
Rob Wile

Political flashpoint.

Peter Van Buren — 9 reasons the American middle class is dying

At what appears to be a critical juncture in our history and the history of inequality in this country, here are nine questions we need to ask about who we are and what will become of us. Let’s start with a French economist who has emerged as an important voice on what’s happening in America today.

Salon
9 reasons the American middle class is dying
Peter Van Buren, Tomdispatch.Com

Bill Dudley — What Kind of Jobs Have Been Created During the Recovery?

As we’ll show, these same trends have played out in our region. While there’s been a good number of both higher-skill and lower-skill jobs created in the region during the recovery, opportunities for middle-skilled workers have continued to shrink.

I believe it is important for us to highlight these job trends and to understand their implications for our region. There have been significant and long-lasting changes to the nature of work. As a result, many middle-skilled workers displaced during the recession are likely to find that their old jobs will never come back. Furthermore, workers are increasingly facing higher skill requirements in order to land a good job. These dynamics in the labor market present a host of challenges for the region to address. However one thing is clear: workers will need more education, training and skills to take full advantage of the types of job opportunities being created in our region, as well as across the nation. So, it’s important that we work together to find ways to help people in our region adapt to these changes.

FRBNY
What Kind of Jobs Have Been Created During the Recovery?
May 21, 2014
William C. Dudley, President and Chief Executive Officer

Mayor DeBlasio goes gutless and heralds deal that will ask nothing of the rich for his universal pre-k

Politicians never get tired of putting their cowardice, their lack of balls, on display when it comes to asking anything from the rich. New York Mayor, Bill DeBlasio, was elected in a landslide, in part due to his pledge to raise taxes on the wealthy in order to pay for universal pre-K. However, he is now heradling a great victory because the state legislature decided it will give him the money, but it won't come from higher taxes on the rich, it will  come from "state money."

WTF is state money? There is no such thing as state money. The state is not the Federal government. The state has no money. State money is literally our money: it's the money the state gets through taxation or the money it holds on to when it chooses not to recycle it back to us in the form of spending.

This was a sneaky and clever little plan and DeBlasio fell for it. He apparently doesn't see that funding universal pre-k with state money means once again, of course, that this plan will be paid for by the middle class and poor because it will ultimately come from budget money that was or would have been allocated to programs for the middle class and the poor.

I have to admit I have gone back and forth on DeBlasio. I supported him, then I thought he quickly sold out, but recently I thought he was getting better. Now I'm back to thinking he's a weak, poorly advised, gutless sellout.