so fellow blog types is the equality gripe over for now ?

Monkeys don't like inequality, either

"its all fair in the end gov "

"I answer that, Even as in bodies there is gravity or levity whereby they are borne to their own place which is the end of their movement, so in souls  there is merit  or demerit whereby they reach their reward or punishment, which are the ends of their deeds.


 Wherefore just as a body is conveyed at once to its place, by its gravity or levity, unless there be an obstacle, so too thesoul  the bonds of the flesh being broken, whereby it was detained in the state of the way, receives at once its reward or punishment, unless there be an obstacle

. Thus sometimes venial sin, though needing first of all to be cleansed, is an obstacle to the receiving of the reward; the result being that the reward is delayed. And since a place is assigned to souls  in keeping with their reward or punishment, as soon as the soul is set free from the body

 it is either plunged into hell  or soars to heaven
 unless
 it be held back by some debt,
 for which its flight must needs be delayed until the soul is first of all cleansed."



as i grow senile i note i mellow
  and am today as i write this
   not a very harsh judge of my fellow hu-creatures

wherefore
i take that tripartite system
hell heaven and purgatory
 to suggest very few soarings and plungings

yup i figure  most of us souls
   are headed for the mountain hike depicted below  :

brit sputter on growing inequality

http://www.resolutionfoundation.org/media/media/downloads/Gaining_from_growth_-_The_final_report_of_the_Commission_on_Living_Standards.pdf

this is the usual match stick study reort

its what is to be done adds up to plus zero

more highering up of  lower ed
more  at state expense day care
more programs to skill build
more ..

yup
supply side eye wash

pulling every one below the median...above the median

higher wages thru better skills
and more head and hands on the job for more but really flexible hours

---------------------

lets take it from another start line:


this brit report]s answers
 to the savage trends in household take home
 ---if you don't happen to have a professional degree---
are pea sized to say the least

The usual higher the lower Ed standards
Including more years of forced schooling!
the equally usual skill supply side voodoo yammering
"Make our skilled less ...skill filled "

ya ya ya
yet again
the same old same old
cries  of  Moses to the God of the burning trash bin


And of course the utterly bogus just so story
a chronic and growing
 mis match/ skill gap on the corporate demand side


one might ask here
What if The skills get built cheaper off shore ?

That needs an answer don't it mate ?

That has an answer
but its mostly about forex policy ultimately

Yes there's some profane  chatter about a broad front of transfer system policies
to raise incomes among the low waged
a few pence more for them  bottom jobsters

How about lifting
 the funding burden of all those social transfer payments
to our always with us
 low income households
       off ...yes off totally off
the low to middle   payroll class
And onto the high property class

A tax policy aimed at the scattering of economic rent sumps
so carefully nested among our institutional arrangements
 could easily replace a huge hunk of the present pay roll robbery

If the present system fails to provide good paying jobs
Them make the system's  beneficiaries pay for the the god damn
                                                                     social compensation to the losers

A close friend oft opines like this..

http://stopmebeforeivoteagain.org/2012/10/103/


"competing stories are the only things that distinguish the two contenders."


" In the fact-based world, they’re quite difficult to tell apart.
 So really, who can blame..."
(some poor low info soul )

"... for preferring a more congenial story?"

 ya there is a big slug of folks in the middle income range
that fits this portrait
                                                more or less


whats in it for ME ! what's not in it for YOU!




caught between the charybdis of  tax evading knavish  free riders
and the scylla of   hand out grabing  lazy free loaders



but there are differences on the ground
 as they say

and they are real and material even if largely unconsidered
by the paleface enrage

one straight forward example

the potus appointed  board of the NLRB

to scoff at these real material differences
to agree with the proposition
neither party has done a damn thing for the middle elements of the job class

to suggest  with scorn
the bastards  are enthralled by their misdirected fury
                           
                  as in
                          "spite makes em go  right "

to walk away mentally
to abandon the white wage class
by their  low info/ low ed  tens of millions
to getting "  what they want"
             and getting  it  " good and hard"

this fellow spirits
     is the dead wrong track to follow

 for progressive change artists caught here and choosing to stay here
                                                              inside
                                                                 the global titan's jelly belly

  let us hope
  the world of making  small differences
         reigns supreme
                              in the hearts  attached to most  thoughtful heads

me at a blog

Let's give up the ghost here and go to a progressive consumption tax
Wealth needs to be taxed directly which is unconstitutional
Unless we devise some sort of life time income mechanism
That includes gifts and inheritance
Playing tax man is fun
But realistically let's focus on triggering a wage boom thru tightening the job markets
and revamping social security
In exactly the opposite direct of tubbyTaylor's

ReplyWednesday, October 31, 2012 at 06:36 AM

Paine said in reply to Paine...

The key to both
Destroy the twin taboos of federal deficits and product price inflation
The big media could do this if it treated the task like it treats global warming even
Now the sacred fear of accumulating federal debt is universally worshiped
And us scoffers are treated like lunatics rather then enlightened heretics

Reply

report on willful walk aways and other victims of socialized usury

"Historically, the U.S. mortgage default rate has varied in the range of 0–2% over the economic cycle. However, default rates broke dramatically from this historical pattern in 2006. At the peak of the housing downturn, the aggregate default rate climbed to about 10% of mortgages. In certain geographical markets and for certain types of mortgages, such as loans to subprime borrowers, the rate exceeded 25%.
What happened to borrowers who defaulted? On the plus side, defaulting borrowers potentially got some financial breathing room. Housing expenditures are typically about 30–35% of total household income. For many overstretched borrowers, defaulting on a mortgage and becoming a renter reduced housing expenditures considerably, although the quality of their living quarters was lower. Furthermore, the extended period between mortgage default and foreclosure allowed many borrowers to remain in their homes for a while rent-free.
Of course, foreclosure is far from a positive for most borrowers. One need only look at the estimated home equity of U.S. households to realize that borrowers perceive default to be very costly. The share of homeowners with mortgage balances exceeding the value of their houses is estimated to be about 20%. Many of these underwater borrowers appear to have a financial incentive to default. The fact that most do not default suggests borrowers see other costs to walking away from their mortgages.
One of the main costs is that access to credit is restricted for borrowers who have defaulted. Relatively little research has examined how default affects borrowers. Cohen-Cole, Duygan-Bump, and Montriol (2009) find that certain provisions in the bankruptcy code allow borrowers who have defaulted on a mortgage to get credit cards again fairly rapidly. For mortgage borrowers, Brevoort and Cooper (2011) find that those who went through a foreclosure in the recent housing crisis experienced sharp drops in their credit scores, which appear to be long lasting. Moreover, these borrowers are more likely to default on other types of debt.

Borrower access to credit markets following a mortgage default

In this Economic Letter, we examine how long it takes individuals or a household to borrow again to buy a home after defaulting on a mortgage. To get a sense of how default affects access to mortgage markets, we look at consumer loan data from the first quarter of 1999 to the fourth quarter of 2011 collected by Equifax, a major credit reporting agency. Our analysis is based on Equifax data in the New York Federal Reserve Bank’s consumer loan file, a 5% nationally representative random sample designed to reproduce the movement of young and old consumers into and out of the credit pool (for a description, see Lee and Van der Klaauw 2010). We define default as a mortgage that terminates when, in the final quarter it is observed, it is either 120 days past due or severely derogatory, meaning it is past due and reported to have a charge-off or foreclosure.
We treat access to credit as a decision more or less made by lenders. In other words, at what point are they willing to lend again to a borrower with a tarnished history? In reality, borrowers may not want credit. The data only show the quantity of credit outstanding. They do not directly indicate credit demand or supply, although some inferences regarding credit supply can be made.
In addition, important institutional restrictions affect credit following mortgage default or foreclosure, especially mortgage borrowing. People with a major derogatory event on their credit history, such as foreclosure or bankruptcy, typically can’t qualify for a conventional loan securitized through government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac until four to seven years have elapsed, depending on circumstances surrounding the event. This restriction does not completely preclude lending to borrowers who have recently defaulted. A lender has the option of making the loan and keeping it on its own balance sheet instead of selling it to one of the GSEs. However, the GSEs own or guarantee the vast majority of new mortgages, which makes the restriction a powerful barrier keeping defaulters from returning to the market.

Figure 1
Cumulative rate of return to mortgage market

Source: FRBNY Consumer Credit Panel/Equifax and author's calculations.

The Equifax data confirm that a prior mortgage default has a large effect on future access to mortgage credit. Figure 1 shows the rate at which borrowers with different credit histories return to the mortgage market following a termination or exit. Termination is defined as having a zero mortgage balance after having a positive mortgage balance.
The blue line in Figure 1 plots the rate for returning to the mortgage market for borrowers with no prior defaults or foreclosures. We do not know why these borrowers terminated their mortgages. They could have moved, or adjusted their housing expenditures by trading up or downsizing. Or they could have paid down their mortgages and now own their houses outright. We might expect that most borrowers who have paid off their mortgages will never return to the market. Indeed, 12 years after a termination, just above 35% of borrowers with no prior defaults have taken out new mortgages. This number may seem low. But, as the red line in Figure 1 shows, it is much higher than the average rate at which borrowers with prior defaults return to the mortgage market over the same time horizon.

Figure 2
Return to mortgage market following defaults

Note: Cumulative rate, variation by default vintage.

Source: FRBNY Consumer Credit Panel/Equifax and author's calculations.

Figure 2 shows the rates at which borrowers who defaulted on mortgages in 2001, 2003, or 2008 returned to the market. The figure plots the cumulative percentage of defaulters who have a new mortgage within a given number of quarters after their last default. Even though a short amount of time has passed since the 2008 cohort defaulted, their return to the housing market appears to be significantly slower than for cohorts that defaulted in the two earlier years. The low rate of return for the 2008 cohort could be related to demand. In the 2001 and 2003 cohorts, there was very strong overall demand for housing, as evidenced by the strong run-up in the rate of homeownership during the 2000s. But the Great Recession that began in 2007 was much deeper than the 2001 recession, and uncertainty about jobs or future income prospects may have made people unwilling or unable to demand housing at the rate seen after previous recessions.
However, the 2008 cohort’s slow return to the mortgage market could also reflect tight credit supply. The mortgage finance system was severely disrupted during the financial crisis of 2007–08. The 2009 and 2010 mortgage default cohorts look very similar to the 2008 group, although they are not shown in Figure 2. By contrast, the credit environment for the 2001 and 2003 cohorts was very different in the years after their defaults. Loan terms were generally easy and subprime mortgage lending boomed.

Figure 3
Return to mortgage market by initial credit score

Source: FRBNY Consumer Credit Panel/Equifax and author's calculations.

Economic growth was solid and interest rates low in the decade following the 2001 recession. But Figure 2 shows that, even in these good times, it took a long time for defaulted borrowers to return to the housing market. About two-thirds of the borrowers in the 2001 cohort had still not come back within 10 years.
Figure 3 shows the rates of return to the mortgage market according to the borrower’s initial credit score. Borrowers who defaulted in any year within the sample are included and are divided into two groups: those with credit scores above 650, labeled prime, and those with scores of 650 and below, labeled subprime. The credit scores used are borrowers’ first scores after taking out mortgages on which they eventually defaulted.

Figure 4
Return to mortgage market by type of foreclosure

Source: FRBNY Consumer Credit Panel/Equifax and author's calculations.

Interestingly, the experiences of the subprime and prime groups in the two years following foreclosure are similar. This is probably because the borrowers we label as prime are no longer in that category after foreclosure. Indeed, Brevoort and Cooper (2010) show that, regardless of pre-foreclosure credit score, the typical borrower who goes through foreclosure ends up with a credit score below 600. Figure 3 also shows that, after about two years, borrowers who were in the prime group before foreclosure begin to return to the mortgage market at significantly faster rates than those in the subprime cohort. All the same, the majority of prime borrowers do not return to the mortgage market within our sample period.
Are there important differences in the rate of return to the mortgage market across different types of markets? Figure 4 shows that one distinction that does not appear to matter much is the type of foreclosure law, that is, whether the borrower lives in a judicial or nonjudicial foreclosure state. This is surprising. Judicial foreclosures, in which the foreclosure must be pursued through the courts, are much more time-consuming and costly than nonjudicial foreclosures, in which the lender can serve the borrower with a notice of foreclosure and proceed to reclaim the house. All else equal, borrowers in judicial foreclosure states would be expected to be denied credit for longer periods.

What explains the timing of the return to the mortgage market?

The rate at which borrowers get new mortgages after defaulting on a mortgage is low. Only 30% of borrowers who defaulted in 2001 had taken out another mortgage within 10 years. What explains the pace of return to the mortgage market? Overall economic conditions appear to play an important role in allowing borrowers who have defaulted to return to the market. When we control for factors such as local unemployment rates and past house price appreciation, we find that these variables influence the rate at which defaulters come back to the mortgage market. Overwhelmingly though, the best predictor of when a defaulting borrower returns to the market is the change in the borrower’s credit score. Our research finds that, after five years, borrowers who return to the mortgage market after a default have experienced a more-than-100 point increase in their score.

Conclusion

Evidence suggests that the process of regaining creditworthiness is lengthy. Borrowers who terminated their mortgages for reasons other than default returned to the market about two-and-a-half times faster than those who defaulted. This has important implications for the housing recovery. The improvement in the housing market is often assumed to reflect significant pent-up demand. But an estimated 4 million foreclosures have taken place since 2007. The consumers who went through those foreclosures will return to homeownership only gradually, suggesting that mortgage supply will also be a factor in the housing recovery."

securitization advanced during the great moderation ...and so did" derivatization"

"..from 1990-2005 the estimated sum of equity-market capitalization,
 outstanding total bond issues (sovereign and corporate) and global bank assets
 rose from 81% to 137% ...."of Global  GP  (gross product),

" ..over-the-counter derivatives markets tripled in the latter five years to $285 trillion,
 six times .." Global GP

a voice to conjure with

read this:


"We are rapidly evolving a fast-moving, increasingly cybernetically interlinked capital marketplace that, as Lord May observes in the Santa Fe Institute Journal, has become intertwined in ever-more complex interdependent patterns. He goes on to ask how much are we, societally, paying the financial sector to allocate capital? More importantly, is the sector allocating capital to further societal goals, or merely enriching itself and a narrow segment of the world’s population? Human nature is powerful. John Stuart Mills said, in Social Freedom: “Men do not merely desire to be rich, but richer than other men”.
Benjamin Friedman holds, in The Moral Consequences of Economic Growth, that “greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy” derive directly from economic growth. He shows that even during stagnation–let alone recession and depression–those values can vanish easily. Brad Delong observes, in reviewing Friedman, that if the majority of the people do not see an improving future, these values are at risk even in countries where absolute material prosperity remains high. Given rising political intransigence and loss of common social purpose in the U.S., and the rise of nationalistic political sentiments in Europe, the effects of increasing stagnation and inequality are becoming more evident, despite the financial sector’s phenomenal growth.
In a 2006 speech on the growing integration of the financial sector and the broader economy, Rodrigo deRato, Managing Director of the IMF, noted its supposed general stability and growth, and that from 1990-2005 the estimated sum of equity-market capitalization, outstanding total bond issues (sovereign and corporate) and global bank assets rose from 81% to 137% of GDP, while over-the-counter derivatives markets tripled in the latter five years to $285 trillion, six times global GDP, 50 times the U.S. public debt. So if the financial sector has worked, we should see proportional acceleration of growth plus improved consequences for all society.
This is not happening, as Cornia and Court report in Inequality, Growth and Poverty in the Era of Liberalization and Globalization.Global poverty reduction has stalled for 30-40 years, despite an approach to growth based on “…a neo-liberal policy package, [including] stringent focus on macroeconomic stability, liberalization of domestic markets, privatization, market solutions to the provision of public goods, and rapid external trade and financial liberalization.” They reveal that inequality has grown faster during the same period in the majority of countries for which data is available. The paper also shows that increased inequality greatly encumbers the climb from poverty and that excessively low or high levels of inequality impede growth, provoking various ills, including crime, social conflict and uncertain property rights. In the US, bank employees were found to be signing thousands of foreclosure documents without checking the information in them in so-called robo-signings that rendered the documents illegal.
All the data seem to affirm Friedman’s assertion that all societal strata should participate to maximize the moral benefits of economic growth. Further support can be found in Court’s conjecture about an optimum range of equality. This is confirmed by modeling work at Dominican University, discussed in a previous OECD Insights post, which shows that there is indeed an optimum level of equality for a given economic structure useable for policy planning, to insure capital allocation to economic growth for public purposes. Returning us to Lord May’s point that we must know how much economies are ‘paying’ the financial sector to allocate capital, including payments to banks, sovereign funds, hedge funds, private equity, and the managers, often in major international banks, of the estimated $21-32 trillion of largely secret “offshore” financial assets.
The financial crisis and subsequent Euro problems show that we are paying vast sums for a system that, as Joseph Stiglitz, former chief economist of the IMF, points out, doesn’t allocate capital where needed, causing capital flows that are pro-cyclic, exacerbating peaks and lows of business cycles. What efficient capital distributive function is served by the approximately $1.5 trillion of daily flows sloshing about in the casino of OTC foreign exchange activities, and the nearly 70% of all U.S. market trades conducted algorithmically, without human intervention?
Keynes may have lost the 1944 Bretton Woods battle for a solution that transcended national financial self-interest but his plans for an international clearing agency are prophetic, especially considering how the combined financial sector dominates national and international policy for its own ends “ As Keynes said, “… no country can . . . safely allow the flight of funds for political reasons or to evade domestic taxation or in anticipation of the owner turning refugee. Equally, there is no country that can safely receive fugitive funds, which constitute an unwanted import of capital, yet cannot safely be used for fixed investment.” Right again, Lord Maynard."


http://somewhatlogically.com/?p=730

when thinkng of

this
hydra headed  rent scooping
credit securitizing
 lbo ing  parasiting
private parts equitizing
flying sharkoid mega blob

this
      globe trotting
 speed of light 
                   hi fi  laputo

think
future means and  methods
of  a RED hot global governance

a fantasy launch

an uncle ize national  hi fi laputa  !

PREdistribution

A new word is being floated by the media: predistribution. It has landed on our shores from the other side of the Atlantic, where Ed Miliband, the U.K. Labour Party leader is apparently building a “new agenda” around it, as reported in The Nation, October 8, 2012 in its "Noted." column. 

Predistribution encapsulates the idea we have been espousing for months, which is that the overall distribution of income is not only unfair but economically unsound. In particular, noting how increasingly skewed the distribution of income has become in the U.S. (and around the world, for that matter), we have questioned the economic rationale underlying the pricing of labor in particular. We refuse to explain the stagnation of real wages since the mid-1970s -- while productivity (output per worker) has continued its upward trend -- by blaming it on objective economic laws. Rather, we see right-wing politics and power at work in all manner of well-documented ways, resulting in a concerted attack on labor and a corresponding increase in the power of the economic elites like the Bain Capital beneficiaries such as Mitt Romney. Finally, the dots are being connected. We can now see clearly that, as Warren Buffett puts it, there has been a class war and his side has won. (Actually, Buffet himself is one of the most constructive members of his class – he invests for the long term, unlike Bain Capital.)

For the country to get back on track as a functioning, full-employment social democracy, what we have to see after the election, more than redistribution by progressive taxation and government transfer payments – although there is room for those -- is recognition that the price system is not working and needs to be changed. This can best be seen as the need for a high wage policy, the other side of the coin being a reduced share of corporate profits in GDP and changes in the way top incomes are determined. The net result would be a society with a more sound distribution of income and more jobs, as we have argued at length on this blog. To the extent wages are more adequate – supported by higher minimum wage levels and a revitalized labor movement -- there will be less need for redistribution policies, which can be focused on specific subsidies where there is clear need, like health care, education and social security. 

Footnote: The moral and political appeal of this approach could be enormous:  a “populist” economics that puts well-earned higher wages into the hands of workers, rather than a “liberal” redistributive tax-and-spend, hand-out economics. 

if the GOP sweeps the board this november ...a recent exchange

 "Rights cannot be protected except by the exercise of power. How do
> you purpose that the people exercise power. A democracy means the
> people in arms, so the above groups will be able to protect
> themselves. In any case a democracy necessarily needs a democratic
> media. All current states have oligarchic media, who engage in hate
> campaigns. Thus the need for the left to agitate for democratic
> media,which necessarily cannot be capitalist."
>
> It would be unkind to parse that into shreds, because I think he means
> well, but I do know something about group protection and exercises of
> power. That's what it comes down, always. There comes a point in the
> process where everyone but the groups in direct conflict just wants
> the conflict to stop and they no longer care all that much about the
> rights and wrongs of the affair."

http://kasamaproject.org/2012/06/14/revolutionary-reporters-in-greece-their-first-article/#comment-57079


------------------------------
op responds :


in other words


"justice and fairness no longer motivate people to live with the disruptions.."

i think of any protracted struggle between union labor and corporate management

that spreads wildly  and widely in waves
 from industry to industry region to region

if there is stalemate
then
at some point
the moment  of  "popular turn off  "comes

and then ...yikes


examples ?

 1938
 and 1946 america

or late 70's britain


'the...poor ass hole ' phase
  turns into the ' everyone buts'  revulsion

   mass opinion
  " no longer care all that much about the
rights and wrongs of the affair."

they just want it over

and given the bourgeois hegemony
---hell its "their" state and their media--

when the bulk of the uninvolved "people "
hit the reset button
the deeply embedded class tilt of the system
  works against the unions

a deep  spontaneous popular reaction gets effectively translated into a  surface reaction...
against the side that can be stomped
within the confines of the existing institutional arrangement

ie dah unions

the media abets the reactionary route to stablizing the class system
by shifting the weight of the mittel stand against the unions

plutocrat-theocrat split ?

nope

mike lofgren :

"Some liberal writers have opined that the different socio-economic perspectives separating the "business" wing of the GOP and the religious right make it an unstable coalition that could crack. I am not so sure. There is no fundamental disagreement on which direction the two factions want to take the country, merely how far in that direction they want to take it. The plutocrats would drag us back to the Gilded Age, the theocrats to the Salem witch trials"
http://truth-out.org/index.php?option=com_k2&view=item&id=3079:goodbye-to-all-that-reflections-of-a-gop-operative-who-left-the-cult

why do the palefaced native yahoos vote for more inequality ?

down scaling white values voters "...poll more like Iranians or Nigerians than Europeans or Canadians on questions of evolution versus creationism, scriptural inerrancy, the existence of angels and demons, and so forth, that result is due to the rise of the religious right, its insertion into the public sphere by the Republican Party and the consequent normalizing of formerly reactionary or quaint beliefs. Also around us is a prevailing anti-intellectualism and hostility to science; it is this group that defines "low-information voter" - or, perhaps, "misinformation voter."
http://truth-out.org/opinion/item/10661-stone-cold-sober-an-interview-with-mike-lofgren-author-of-the-party-is-over


that is one of the great "products" of thirty five years of relentless " mass program-ing "

easily countered by FDR style politics
but the Dems since 76 have  prefered their own brand of values politics
it works better with  the public objectives of their donor base

once again on labors share

http://www.clevelandfed.org/research/commentary/2012/2012-13.cfm

this from the cleveland FED no less

income inequality between households grows two ways :

"if the concentration index of labor and/or capital rises "

or
"if there is a shift from the less concentrated labor income
 to the more concentrated capital income"

enter the share calculation....


According to the FED elves  model
"  the labor share trend has declined since 1980, with an accelerated drop in the 2000s,"

"In the BEA data, the trend declined from
 as high as
 69 percent before 1980
to
 66.9 percent in 2000,
to
 64.9 percent today

". In the BLS data, the trend declined from
approximately 64.5 percent before 1980
 to
 62.8 percent in 2000,
to
59.8 percent today.

" According to these measures, the trend in the labor share declined 1.5 to 2 percentage points between 1980 and 2000, and then dropped an additional 2 to 3 percentage points, for a total of 4 to 4.5 percentage points."








here's the code to the magic trend line build by these FED elves

" A Model of the Labor Share"


"  the labor share fluctuates cyclically around an underlying slow-moving trend"

"The labor share
peaks
 right after the beginning of a recession

declines
during the rest of the recession and the initial phase of the recovery

 picks up and returns to trend
during the later phase of the recovery. "
                       ie
"the labor share is related to the tightness of the labor market:

 declines
when unemployment is high

and increases
 when unemployment is low.

 a high level of unemployment
 tends to be followed by a decline in the labor share"



"The correlation between the unemployment gap
and the change in the labor share
 over the subsequent year is negative and large "

"in the long run
. The main factors:

"technology available to produce goods and services.


increased globalization and trade openness,


 changes in labor market institutions and policies."

------nice and laconic eh ?-----

the simple calculation:

". To compute the trend,
 begin with the labor share,
 subtract
 the cyclical component "

okay

" separate the long-run  trend
from  transitory components ."

sounds easy

how much income inequality is wage structure changes ?

not much eh ?

its that capital income thing isn't it
you know increases in capital income concentration

fed elves:
"has dominated the dynamics of income inequality during the past two business cycles"

The yoke of "uncertainty"

The Romney "plan" for the economy - I use quotes because it is a return to unalloyed laissez-faire economics, and therefore the antithesis of a plan - hinges on restoring "certainty" and "confidence" to the business class:

"Restoring clarity and predictability are essential for igniting hiring and investment. Yet in so many areas, from tax rates to energy policy to labor regulation to trade, the Obama administration has only added to the lack of clarity and the uncertainty. The most dramatic illustration came midsummer, when the absence of presidential leadership brought the country to the precipice of default. Uncertainty is the enemy of growth, investment, and hiring."

I think this calls for a revisiting of Kalecki's "Political Aspects of Full Employment." Every time I re-read this piece, I am re-inforced in my idea that it is a work of great profundity. What is more, it is written in an accessible, popular style, which even further increases its value.

In particular, I think this passage is of the utmost importance for interpreting the Romney "plan":

"Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence.  If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment).  This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis."

However:

"[O]nce the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness.  Hence budget deficits necessary to carry out government intervention must be regarded as perilous.  The social function of the doctrine of 'sound finance' is to make the level of employment dependent on the state of confidence."

That just about says it, don't it?

(This is only one of the brilliant passages in the piece. Really, I recommend reading it.)

Stiglitz on inequality and unemployment

From Stiglitz, The Price of Inequality (2012), pg. 85:

Moving money from the bottom to the top lowers consumption because higher-income individuals consume a smaller proportion of their income than do lower-income individuals (those at the top save 15 to 25 percent of their income, those at the bottom spend all their income). The result: until and unless something else happens, such as an increase in investment or exports, total demand in the economy will be less that what the economy is capable of supplying - and that means there will be unemployment. In the 1990s that "something else" was the tech bubble; in the first decade of the twentieth-first [sic] century, it was the housing bubble. Now the only recourse is government spending.

Unemployment can be blamed on a deficiency in aggregate demand (the total demand for goods and services in the economy, from consumers, from firms, by governemtn, and by exporters); in some sense, the entire shortfall in aggregate demand - and hence in the U.S. economy - today can be blamed on the extremes of inequality. As we've seen, the top 1 percent of the population earns some 20 percent of its income, a shift of just 5 percentage points to the poor or middle who do not save - so the top 1 percent would still get 15 percent of the nation's income - would increase aggregate demand directly by 1 percentage point. But as that money recirculates, output would actually increase by some 1 1/2 to 2 percentage points. In an economic downturn such as the current one, that would imply a decrease in the unemployment rate of a comparable amount. With unemployment in early 2012 standing at 8.3 percent [the same as today's figure! - Ed.], this kind of a shift in income could have brought the unemployment rate down close to 6.3 percent. A broader redistribution, say, from the top 20 percent to the rest, would have brought down the unemployment further [sic], to a more normal 5 to 6 percent.

The Wind-Down: Good jobs & bad jobs PT 2

In my previous post on "good" jobs and "bad" jobs, I reviewed the major strains of contemporary thinking seeking to explain why some jobs are pleasant and well-paid, while others are unpleasant and poorly paid. Worse than the glaring inequality of living conditions produced by this inequity, the dynamics of the labor market seem to exacerbate (rather than moderate) these tendencies.

This is directly counter to the predictions of mainstream economics. Most economists - who tend to fit observed realities to their models, rather than the other way around - simply explain away these trends, or devolve into thinly-veiled moralisms (along the lines I describe in the earlier post). Even the best of them do not seem to deal with the subject square-on, or come up with accessible explanations which can be politically deployed.

Thus, Joeseph Stiglitz, when describing the deplorable fate which has befallen the majority of wage-earners over the last 4 decades (!), resorts to either an overly general theory of "over-supply of unskilled labor" (as in his recent book), or the rarefied notion of "asymmetric information."

If we are to break out of the ideological shackles of "inequality of access" or the liberal/conservative debate around "equal opportunity" (see the previous post), we are going to need sturdier tools than this.

Simply put, the basic conclusion that we are led to by the real dynamics of work suggest that workers, rather than being denied access to the Elysian Fields that are made available to those with superior social value, are, in fact, imprisoned within their workplaces, locked-in to bad and worsening conditions. Or, to say it another way - they are trapped in work relations of increasing exploitation.

Does that put it bluntly enough? Read on, and I think I can sharpen this analysis...

Great opening to sweat head prosperity Rx

In a recent post here Venerable sage Neil talbot Hits a four bagger Trust wage earners to spend their wages themselves And raise the share of wages in national income How? Heat up job markets with Vickrey macro And lower the imperial dollar to half mast

Dani shows a nice comparison

Go here http://rodrik.typepad.com/dani_rodriks_weblog/2012/08/are-americans-better-off-than-the-dutch.html

Dagree premia

"Back in the 1970s, Americans who’d attended college but didn’t receive a degree earned about 15% more than those with just a high school diploma. For college graduates, the wage premium was about 40%. Three decades later, the premium for college graduates has shot up to more than 80%. For those with just “some college” (but no degree), the premium has stayed relatively stagnant, rising to just about 20%. That “college graduates” category is still pretty broad, though, so Mr. James takes the next step, splitting out those with advanced degrees. For workers with just a bachelor’s degree, the wage premium over high-school graduates has risen from a bit over 30% in 1977 to more than 60% in 2010. But interestingly, the premium hasn’t grown significantly over the past decade. These days, really getting ahead requires an advanced degree, which boosts earnings some 30% versus having a bachelor’s degree (and by a whopping 120% versus having just a high school diploma)."

“Prosperity Economics: Building an Economy for All?”

    "Prosperity Economics: Building an Economy for All," by Jacob Hacker and Nate Loewentheil, and supported by the Economic Policy Institute provides a useful manifesto to contrast with the prevailing Austerity Economics. But it is misnamed: it is focused more on improving the lot of the middle class than that of ordinary working Americans. (To contrast with the wealthy, the manifesto uses the term "middle class," not the more accurate "working class" or "working Americans.") And it relies too much on government spending; it does not seem to trust workers with the fruits of their own labor.
    A better approach to the current economic malaise is to identify the problem of low wages as being fundamental, affecting not only the living standards of poorer Americans, but also directly being the cause of the insufficiency of aggregate demand to achieve fuller employment – the crux of our current lingering recession. What we are suffering from in the current recession, like the Great Depression, is "under-consumption as a result of extremely unequal distribution of income."
    The problem should be faced directly: the political economy of wage-setting should be completely changed over time, reversing the trends of recent decades. Nothing short of this sweeping goal will fix the problems of unemployment and the working poor. The elements of a new labor policy would include setting and indexing a general living wage, shifting the collection of Social Security and Health costs from employers and employees, eliminating payroll taxes, strengthening and enforcing labor laws, and mortgage debt relief for struggling households. Note that this would put more money into the hands of ordinary working Americans, not into the hands of government.
    Admittedly, on page 41 of "Prosperity Economics" there is a policy recommendation to raise the minimum wage so that "Americans who work are able to support themselves and their families." But this is lost in the welter of recommendations, such as expanding support for housing (which would involve government money), expand job training (government money again), economic revitalization strategies (government money), create pathways out of low-wage work (government money), a national innovation foundation (government money), expand the Manufacturing Extension Program (government money), augment investments in clean energy (government money), and increase federal investments in R&D by 50% (government money again). Would measures like these truly be conducive to full employment in the short run -- or effective in the long run? Do they place enough trust in businesses large and small to figure out what to invest in and how?
    One area where we believe that government taxation is essential is to pay for universal, more cost-effective, single-payer health insurance. There are two reasons for this. One is to remove the cost of health care off employment. This single measure would dramatically increase the competitiveness of U.S. manufacturers and be an important component of a full-employment economy. The other reason is to provide a pathway to reducing health costs and making the health care industry more efficient. Health services would be provided by private providers, but with improved government regulation of the cost. Generally, however, we believe that ordinary working Americans are the best repositories of the income they have generated.
    The title "Prosperity Economics" is inspiring and sets the right tone for the many constructive policy proposals in this manifesto, but we believe it would be strengthened by a more fundamental focus on the workplace conditions being experienced by the vast majority of Americans.

total all levels government spending

once we got into kold war stride it was  fairly constant eh ?

till the post S= kamp collapse and the clinton frugal miracle
then gwot ..now another squeeze down  this one largely local

note : transfer payments are not included

speaking of tranfer payments

lookeee here

Source

PK drowns out the latest honks of the serious straw man brigade

who  among us  is so mind funked
   as to still not   knoweth
the   tax foundation
 is a  plutonic   US prime center cut
        reactionary kazoo ?

its sole offering
a brand  of k street casuistry
 doubled charged with horse feathers and fact twists
 and then honked away
day and night
             in the key of d flat

   a mischievous  blue ribbon noise box

in the latest issue
  these  well heeled counter revolutionary cads
 sally forth   yet again
   to  play ace water board team 
and  of course
 its the  hapless  "gold standard " CBO data base
that  confesses to  another
   in a very long  and very  crooked series
                          of fourth tier of hell  lies
                                               ie
                                                  damned  statistics

http://taxfoundation.org/blog/top-20-percent-households-pay-94-percent-income-taxes


the task  scotch  the  persistent rumors of growing income inequality



thank heaven  we can trust in  every industrious  truth  terrier PK
  to  rip out the rotten stuffings  of this nasty new business section chew toy

but first the brutalized  TF  facticular discovery  :

yup inequality is ...trendless

 since

'the grand dragon of  ship to shore liberty

ronald delano  reagan

 evacuated the  corporate exploitationary  forces

  from  the  late 70's   mindless  profiteers  spiral

into a "dunkirk "

----  caution:

             purple is the color of sugary pink

                                                  business historiography ---

---------------------

pk responds
"the whole post is kind of a classic of disinformation: pretense that income taxes are the only taxes? Check. Bemoaning the rising share paid by the rich, while ignoring their rising share of income? Check. Whining that the lucky duckies with low incomes don’t pay enough? Check."

and he hurth forth this clarion all of the real down town long haul  truth :

voila the terrible  ride of the  top .01-ers:

i see trends

do you see trends ?

to read  all :
http://krugman.blogs.nytimes.com/2012/07/25/zombie-straw-men/

chinn music chimes to project prometheus

lets just burn up the debt  slowly !

http://www.milkeninstitute.org/publications/review/2012_7/05-11MR55.pdf


"reducing the debt burden through

inflation would be simple and across

the board — and, unlike a formal

restructuring, would not create a

circus of interest-group politics

that alienated the public and opened

the door to bank runs."

read this and you will free your mind !!!!

Wikipedia on the Causes of the Great Depression

For those who are interested in comparing and contrasting the current Great Recession with the Great Depression, Wikipedia has several interesting articles on the Great Depression. They are fact-filled; for instance, we were surprised to learn that in 1933 a group of millionaires, led by the Du Pont and J.P. Morgan empires, and alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, plotted to overthrow the Roosevelt administration by means of a military coup "and install a fascist government modeled after Mussolini's regime in Italy." Fortunately, the general whom they recruited to lead the uprising ratted on them to Congress. Since then, I suppose the would-be fascist businessmen have consoled themselves with fomenting military dictatorships abroad, in Latin America and elsewhere.

Wikipedia has a long, fact-filled and quite theoretical discussion of "The Causes of the Great Depression." It notes that some economists at the time (and later John Kenneth Galbraith), "popularized a theory that had some influence on Franklin D. Roosevelt. It held that the economy produced more goods than consumers could purchase, because the consumers did not have enough income. According to this view, in the 1920s wages had increased at a lower rate than labor productivity. Most of the benefits of the increased productivity went into profits, which went into the stock market bubble rather than into consumer purchases. Thus the unequal distribution of wealth throughout the 1920s caused the Great Depression.

"According to this view, the root cause of the Great Depression was global overinvestment while the level of wages and earnings from independent businesses fell short of creating enough purchasing power. It was argued that government should intervene by an increased taxation of the rich to help make income more equal. With the increased revenue the government could create public works to increase employment and 'kick start' the economy.

"In the USA the economic policies had been quite the opposite until 1932. The Revenue Act of 1932 and public works programs introduced in Hoover's last year as president and taken up by Roosevelt, created some redistribution of purchasing power."

We couldn't have said it much better ourselves, except perhaps to point out that the solution we favor, or at least would put on a par with putting more money into the hands of government to fund public works programs – as well as infrastructure, education, etc. -- is a set of fair wage policies that would put more money into the hands of working Americans.

It’s the blow you don’t see coming that knocks you down

"The Coming Crisis" Last Time Around

In June 2005, Lewis Lapham of Harper's Magazine hosted a forum on "the coming crisis." The three discussants included Paul Krugman and Glenn Hubbard. Predictably, Krugman thought that "there is a 50 percent chance that the outcome is pretty calamitous"…while Hubbard said that "nothing in this story suggests to me any kind of imminent crisis."

Nothing remarkable here, right? Both pundits were just taking their standard positions, Hubbard the incrementalism of the Chicago style of economics, and Krugman a Keynesian approach. And one could then go on to attack Hubbard for being out of touch with reality and to laud Krugman for being prescient?

But economic ideology and economic reality are not so neat. The feared crisis they were talking about was NOT the bursting of the domestic U.S. housing-centered financial bubble and the ensuing Great Recession, but the much-anticipated crisis of the debt-burdened dollar. If we had disclosed that the third person in the forum was Peter G. Peterson, we would have given the game away, because he has of course been the most outspoken critic of the government deficit, and the most apocalyptic in his forecasts of the consequences of debt.

We now know what crisis these experts should have been focusing on at the time. In 2007, about two years after this forum was held, the U.S. housing market collapsed, taking mortgages and other risky assets with it, and by 2008 the whole U.S. financial system was in crisis.

By March 2009 U.S. stocks had lost half their value. But not the dollar! And not U.S. Treasury bonds! When risk spread from the U.S. to investments across the world it was, paradoxically, the dollar that was increasingly seen as a safe haven. And U.S. Treasury securities were seen as the least risky assets, not the worthless paper instruments of a state desperately trying to fund endless deficits, like some banana republic. Part of the reason is that, while Americans have been preoccupied with their own financial and economic problems, people abroad have placed more emphasis on the problems in other countries like the weaker members of the euro bloc, and seen the U.S. economy in a more favorable light as relatively stable , and Treasury bills and bonds as "risk-free" securities.

Consider the record of the last seven years. As regards U.S. Treasury debt, the interest rate on the 30-year Treasury bond has fallen, not risen. It has hovered around 4% for much of that period, and is currently below 3%. True, the U.S. dollar index, reflecting the average price of the dollar in other currencies, has fluctuated considerably, but as of today it is down by only 10% or so (from a level of about 90 in 2005 to about 80). Taking a somewhat longer perspective, the index had admittedly peaked at around 120 in 2002, and from that point it had already fallen by about one third (to about 90) by the time of the forum in 2005. But these declines were relatively gradual and orderly.

By no stretch of the imagination, then, has there been any kind of dollar crisis, and the debt crisis that occurred in 2007-2009 and caused the economic depression was not a crisis of government debt but one of household and private financial sector debt. From the perspective of mid-2012, Paul Krugman deserves lower marks than Glenn Hubbard in this debate, predicting a dollar crisis that didn't happen. And Pete Peterson comes across as Chicken Little; so far, the sky hasn't fallen, as far as debt and the dollar are concerned.

The Coming Crisis This Time Around?

But somehow one gets a feeling that the financial markets are hiding more than they are revealing, that all is not hunky-dory with debt and the dollar. It is not only a matter of the sluggish state of the U.S. (and world) economy. There is a growing sense of unreality in the current economic debates, which are mostly of a short-term Keynesian nature, focused on whether the amount of government stimulus is enough to get us out of the Great Recession, or whether the spreading call for "austerity" in Europe and the U.S. could soon take the world economy in the other direction, toward a second dip of the recession.

Meanwhile, while most economists have remained focused on the Great Recession, the federal government deficit has still been there, averaging over $2 trillion a year during the four years 2008 to 2011. And the international trade deficit (including other "current account" items) has still been there – averaging $500 billion a year in those four years. But the financial markets don't seem to care, with investors now willing to buy 10-year U.S. Treasury notes with a coupon of under 2%, and Treasury bonds with a coupon of under 3%. Since inflation is expected to run at 2 or 3 percent a year, it appears that investors have such confidence in the financial probity of the United States that they are willing to invest in its sovereign debt at rates that are not hardly expected to keep up with inflation.

In fact, the only people who seem to care about this situation are hypocritical Republican politicians who, after turning a blind eye to the profligacy of the Bush years, want to use debt as a stick to beat down liberal budget proposals and "starve the beast" of government.

Meanwhile, as in the early stages of a horror movie, we in the audience sense that the protagonists are in great danger, while they are going about their lives in blissful ignorance. Our friend Martin Kenner likes to say, "It's the blow you don't see coming that knocks you down."

Trying to anticipate the blow that we haven't seen coming, we ask the direct question: at some point, won't the world's creditors say enough is enough when it comes to lending to the U.S. government? The U.S. government deficit is extending as far as the eye can see, but as Herb Stein said, "If something cannot go on forever, it will stop." Won't it be more and more clear to lenders that this is a case of good money following bad? Won't they knock U.S. Treasury securities from their "Risk Free" pedestal and demand an increasing risk premium?

It seems that there are two issues that will determine the feasibility of U.S. fiscal policies in the medium term. One is whether there are or will be credible signs that the U.S. is shifting from debt-dependence to fiscal prudence, i.e., from cyclical deficit in the short run to structural surplus in the long run. And the answer to this question at the present time must be no. Right now, the federal government has a valid cyclical reason for continuing with deficit financing, namely of course the need to stimulate the economy and bring it out of the recession. But the magnitude of the recession is such that there seems to be no end to the need for fiscal stimulus. Accordingly, the need for deficit spending will remain.

But the calls for prudent fiscal management are bound to grow. The easy part is behind us. From here on, politicians will increasingly attack the government for running an endless deficit, and they will also, inconsistently, resist the need to increase taxes on the wealthy and on business to pay for it. It is always easier for Congress to spend money beyond the government's means than to raise taxes. If and when, finally, the time for raising taxes comes, will Congress – and the American people -- be up to the challenge? And will they try to put the burden on those who can afford it, rather than on the poor and the middle class, who are already struggling?

The other issue is the relative confidence that investors and governments have in the U.S. economy (and polity) compared with that of the other major currency blocs. Today, the euro is the dollar's chief potential rival, but Europe is in a state of deficit and disarray. However, it is only prudent to expect that if and when Europe begins to stabilize and the euro becomes a more respected reserve currency, there will be an increase in the cost of borrowing by the U.S. And what about the relatively stable Japanese yen? And the rising Chinese renminbi?

So, after all, it seems the U.S. must sooner or later experience a time of reckoning in which it becomes hard to find buyers for the dollar or for Treasury bonds. The dollar must fall and inflation and interest rates must rise. But it is hard to predict the timing and shape of these and other associated developments.

One thing is clear: it will become much more difficult to finance the U.S. debt, and fiscal responses to that problem could be crucial. Government debt could be a huge drag on the economy, just as private household debt is now. In other words, while exports should help to strengthen the economy, the debt load could severely depress it.

Footnote:

The kind of partial analysis presented here focuses on a few economic and financial variables, and there are many other variables that will affect the developments discussed here, and in turn will be affected by them. To the extent that we experience a large fall of the dollar, it is likely that U.S. import prices and inflation will rise. U.S. exports will be more competitive internationally and should do well. To the extent that interest rates payable on fixed-interest investments rise, the cost of borrowing by Main Street firms will rise, which must have a depressing effect, other things equal. And bond prices (which move in the opposite direction) must fall, and investors will lose a lot of money during the transition to a higher-rate environment. Stock prices may hold up, however, if exports and earnings are rising. Much will depend on the responses of other countries. If U.S. exports gain market share, and the U.S. fends off competitive imports, the U.S. will succeed in exporting recession, but the reverse will be the case if other countries competitively devalue their currencies and there is a trade war in which the U.S. loses market share. Clearly, there is a complex set of interactions here. Not least, the accumulated national debt could have a potentially crippling effect on the economy, despite the boost from exports. Hopefully, however, this brief analysis will provide an introduction to some of the issues.

states on "pension cola strip" rampage ?

take a look at the map...
posted by
human milk dud
timmy tinker :
pictured here after stepping on  the head of a  garden rake :

Three Cheers for Joe Stiglitz

Joseph Stiglitz's new book, The Price of Inequality: How Today's Divided Society Endangers our Future. (W.W. Norton, New York, 2012) is a very important contribution to the debate about the harmful economic and other effects of extreme inequality. The book is broad and deep, and our quick review here will hardly even touch the surface. We would encourage people to read this well-written book in its entirety.

Stiglitz has no illusions about the way in which the market economy is working in the United States. He has lengthy discussions about rent seeking and market imperfections as sources of income of the 1%, and little confidence in the labor market as a mechanism for setting fair wages in the policy framework that has prevailed in the country in the last three or four decades.

Stiglitz's discussion (at pages 85 et seq.) of the harmful macroeconomic effects of inequality is worth quoting at length, because it decisively breaks rank with today's timid market economists:

It is perhaps no accident that this crisis, like the Great Depression, was preceded by large increases in equality: when money is concentrated at the top of society, the average American's spending is limited, or at least that would be the case in the absence of some artificial prop, which, in the years before the crisis, came in the form of a housing bubble fueled by Fed policies. The housing bubble created a consumption boom that gave the appearance that everything was fine. But as we soon learned, it was only a temporary palliative.

Moving money from the bottom to the top lowers consumption because higher-income individuals consume a smaller proportion of their income than do lower-income individuals (those at the top save 15 to 25 percent of their income, those at the bottom spend all of their income). The result: until and unless something else happens, such as an increase in investment or exports, total demand in the economy will be less than what the economy is capable of supplying – and that means there will be unemployment. In the 1990s that "something else" was the tech bubble; in the first decade of the 21^st century, it was the housing bubble. Now the only recourse is government spending.

Unemployment can be blamed on a deficiency in aggregate demand (the total demand for goods and services in the economy, from consumers, from firms, by government, and by exporters); in some sense, the entire shortfall in aggregate demand – and hence in the U.S. economy – today can be blamed on the extremes of inequality. As we've seen, the top 1 percent of the population earns some 20 percent of U.S. national income. If that top 1 percent saves some 20 percent of its income, a shift of just 5 percentage points to the poor or middle who do not save – so the top 1 percent would still get 15 percent of the nation's income – would increase aggregate demand directly by 1 percentage point. But as that money recirculates, output would actually increase by some 1 ½ to 2 percentage points. In an economic downturn such as the current one, that would imply a decrease in the unemployment rate of a comparable amount. With unemployment in early 2012 standing at 8.3 percent, this kind of shift in income could have brought the unemployment rate down close to 6.3 percent. A broader redistribution, say, from the top 20 percent to the rest, would have brought down the unemployment further, to a more normal 5 to 6 percent.

Stiglitz explains how the government's response to weak demand – low interest rates – led to bubbles in tech investments and housing – how deregulation made things worse, and how what we now call "austerity" has reduced government spending, the reverse of what was required.

One should note, however, that Stiglitz's argument on the effects of inequality is more descriptive and less analytical than that of Michael Kumhof and Romain Ranciere, which was reviewed on this blog on May 15: Inequality, Leverage and Crisis, IMF Working Paper WP/10/268, November 2010. Their paper really nailed the issue by developing a model that traced the causation from inequality to leverage (excessive mortgage borrowing) and crisis when the mortgage bubble burst.

A footnote on the OECD Economic Survey of the U.S.

The OECD's June 2012 Economic Survey of the United State contains a much weaker discussion than that of Stiglitz or Kumhof and Ranciere. It is agnostic regarding the macroeconomic damage caused by inequality, concluding that "there is no consensus in the economic literature that reducing inequality would be harmful to economic growth." Which falls short of a finding that reducing inequality – at least, reducing extreme inequality -- would actually be beneficial to economic growth, as clearly shown by Stiglitz, and Kumhof and Ranciere, and argued in the founding paper of this blog (see Home Page, click on "Read the Paper").

Needless to say, waiting for consensus on inequality among wobbly-kneed economists would be like waiting for consensus on climate change or the theory of evolution among Kentucky Republicans. The closest the OECD gets to the nub of the recent problems is the half-hearted statement that "Some have identified income inequality as one of the causes of the financial crisis since it may have encouraged subprime borrowing by households who tried to make up for their lack of income." It does not mention the complementary problem that the excessive savings of corporations and the wealthy provided the supply side of the subprime bubble, and the way in which the Fed enabled the growth of unsustainable subprime mortgages by its policy of easy money and lax regulation.

we just don't wanna work so much anymore ..eh ?

index for all:
the  level in 1995 :

check out that orange line

that's the geeter with the heater:

                   "the employment to population ratio"

the rest is all corporate market capitalism
              doing its 'one damn thang after another' act

enlargement :

sieze all the corporate pension funds now

http://www.counterpunch.org/2012/07/13/pensions-under-attack/


some of us have called on  uncle for years  to take over
  all   our  existing corporate sponsored  ' defined benefit 'plans

take em over
 assume their obligations 
  and tax the bejesus out of their former "corporate managers "
like those hideous profit pots are a bunch of  18th century french peasants 

------------------

yup 
we citizen enrages
need to  rebuild the federal back stop system with fat hacked off the corporate haunch ;

  The Pension Benefit Guarantee Corporation (PBGC) is in trouble and headed for a lot more

right today  we need to stop the  board room clip joint operations
   that run their pension obligations thru a chapter 11 bankrupcy court
                                      and from there right out of existence

poof  gone !

 like  promises to the natives by  a settler community
that's where the PBGC comes in
to pick up the obligation ...but only in part of course
--operates much like fidc for despositors
theres's a limit to the coverage ---

----------------------------------------------------
the day of the corporate fringe massacres is at hand and has been at hand
 for over two decades now
   and  in a growing crescendo of court ordered slate wipe offs  rip outs and vanishments

this is obvious to all of us looking into the crater where once union contracts existed

 but uncle  stepping in now and taking over prior to court action
 ..ya i mean uncle  coming in pre emptively
putting  a stop to this ...like ending a hideously uneven bloody faced bout ...

        friends it 's certainly  well past due

the longer uncle lingers the  more fringe fucks.... the more ruined retirements

and yet  as with most
recent "ought versus is  " state  plays

uncle is heading in exactly the oposite direction:

"On Friday, July 6, President Obama signed into law a bill that would renew transportation programs and extend low interest rates on student loans for one year. ..
 tucked away within the bill’s pages was a little-noticed proposal to further erode the funding of workers’ pensions. ...This bill in a brilliant sleight of hand  ...
            REDUCED  the amount that corporations pay
                                        into their  grossly underfunded pension systems"


 read more at the  counter punch link above .....

http://www.cato-at-liberty.org/the-cbo-on-falling-incomes-and-rising-tax-shares-of-the-top-1/

behold biff reynolds !


looking like a parady of one of his patrons
much like a dog comes to mimic  its master i guess

i find it great fun to occasionally note
 this  notorious slippery eel of a rich man's hack at work

"love ya biff
hows the kidney stones?"


he of the now long since famous
reynolds numbers on the turbulence in the flow of truth
produced by water boarding  household  income data 

read it.. u can get a fine sense of the confessional  art
  of number racking


you know i read stuff like this about the great out there
  and i figure we must have a parallel earth

a  bizzaro gold plated  earth
with shiny  friendly plutonian features
okay its much  unlike here
where the face of a plutonian
 can pretty much everytime
  scares  the wits
  out of   charging  He- Bear

take this sardonic clincher from our sincere reporter mr biff
beaming an update to us
   from our  twin earth ....planet plutonia :

"Perhaps it is time for the CBO to issue a corrected report:"
 “The share of income received by the top 1%
                                fell from 11.8% in 1985 to 11.5% in 2009.”

gotta love that   for its understated  "right up yer  ass"  ism

-------------------------------------------------------------
for the anbitious fact moles among u
  here's the eclairlike  " back bone " to reynolds latest shimmy dancer :

http://www.aei.org/files/2011/10/25/Material-Well-Being-Poor-Middle-Class.pdf

prologue begins:


" The U.S. economy has grown considerably over the past three decades. However, there is a prevailing sentiment that the middle class and the poor have been left behind"

can you guess where this unvarnished enquiry into the hard facts
           is headed brothers and sisters ?


to refute all the stuff like this
churned out by our nation's donated tax exempt
           dollar mill stink tanks

    would indeed daunt the stoutest sewer  voyageurs
                                                                     among us pinkos


to  effectively
     tit for tat
battle  every   " issue paper  " produced
                           by  these  cork screw outfits ..yikes !
what with their non stop
    pay out of  seriously  good money
     to  literally hundreds and tens of hundreds
                  of  these  eager  scurrying  thousand legged
                                                        hack-cademy scholar-creepees  .....

why my lord
   that would require
               a full time staff of  prolly 100  furiously scribbling beta level red angels

not really worth the effort for us mortal slobs eh ?


better we just continue to  produce "our own  "    plain  fact sheets instead

sure we need to perpetrate an  occasional
  symbolic demolishment
u know  an atrocity of sorts
on  one or two of the leading figures
 among all these  plutonian singing insects and fact barbers

                                but no more then that

------------------------------

come to think of it

   our hero
mr peeevey reynolds here
    wouldn't be such a bad choice for a personal scrub down now would he

--a nice link to a review of his many  past efforts
  exposed in livid detailed colors
                 would be handy to have at one's unblushing  pink finger tips---

tax rates anyone ?

Why are there "good jobs" and "bad jobs"?

Don't answer too quickly...

PART 1

There are two "common sense" explanations which spring readily to mind, and which should therefore be dealt with first:

1. Inequality of tasks
2. Inequality of people

The first one is rooted in the individual experience of work. For any individual, there are some tasks that are pleasant and some that are unpleasant. Likewise, some jobs contain a high proportion of tasks that are unpleasant to most individuals: the so-called "dirty jobs" that "somebody has to do," such as garbage collection, work in slaughterhouses, janitorial work, etc. Jobs in this category also include those that are physically dangerous (police officer, soldier), morally unpleasant (prostitute, executioner), or require unpleasant sacrifices (working on an oil rig), etc.

But in a world where all else is equal, these unpleasant qualities should be "factored in" to the negotiation over terms of work and compensation. To some extent, this holds true in the world: some people voluntarily spend 4-6 months away from their families on an oil rig in exchange for higher pay, work as a cop for a while in anticipation of an early retirement, etc. But in many more cases, we see just the opposite prevail: "dirty" jobs with longer hours and worse pay than other jobs, which are often unnecessarily dangerous. Meatpacking, farm work, food processing, and warehouse work are examples of entire industries made up of primarily of "bad" jobs. The economy, it seems, tends to concentrate and aggravate, rather than disperse and alleviate, the odiousness of "dirty" jobs.

So the nature of the tasks is clearly not a sufficient explanation for why some jobs are bad...

marriage and the federal tax and transfer system

"Someone looking at our system from Mars would conclude that we don’t want moderate income families with children to marry, since we penalize them, but we do want older households (at ages when children are likely to be gone) to marry, since we subsidize them. "
http://www.urban.org/UploadedPDF/901508-Marginal-Tax-Rates-Work-and-the-Nations-Real-Tax-System.pdf

a simple way to set up the basic wage subsidy

living wage - minimum wage

phase out    profile ?
ahh there's the rub

better work incentives are for everyone ....not !

http://www.urban.org/UploadedPDF/901508-Marginal-Tax-Rates-Work-and-the-Nations-Real-Tax-System.pdf

forget about incentives to "invest"
contemporary advanced societies have  more then too much spontaneous
aggregate accumulation already hence the need for so much usury


but how about incentives to be more productive ?
can taxes reduce the supply of time and effort ?

read the link

couple money points:

"The nation’s real tax system includes not just the direct statutory rates explicit in such taxes as the income tax and the Social Security tax, but the implicit taxes that derive from phasing out of various benefits in both expenditure and tax programs "
"for the same amount of cost, a program that requires work will indeed lead to more work  than one that does not. "

"EITC and welfare reform have done better on the work front than did AFDC. "


need for reforms

" Combined effective marginal tax rates from dozens or hundreds of phase-outs can be very high and certainly lead to hidden and confusing government."

" The rates are especially high for low-to-moderate income households with children and include hundreds of billions of dollars of marriage penalties as well. "

"These high tax rates also extend into many middle-income programs as well. "

suggestions :

" (a) seeking broad-based social welfare reform rather than adopting programs one-by-one with multiple phase-outs,


(b) starting to emphasize opportunity and education over adequacy and consumption;

 (c) putting tax rates directly in the tax code to replace implicit tax rates,


 (d) making work an even stronger requirement for receipt of various benefits


 (e) adopting a maximum marginal tax rate for programs combined,


(f) letting child benefits go with the child and wage subsidies go with low-income workers rather than combining the two. "


a look at the total  tax and transfer  system's income profile
included:


--get an f ing mag-glass ---

--------------------------------------

some utterly off the cuff remarks unrelated to the paper:



why might a diabolic system
have two plans

example
 tax cuts at the margin like your high flyers get in reaganomics
but
for the  lower orders of wagelings higher taxes

yup
the jaw bone of an ass
              right across the back side

think of two forces inside one jobbler/producers head

 one force wants more market stuff
the other force wants more leisure


job hours offered are the outcome of this tussle of forces

now imagine the survival level is about your earning max potential

cut your take home wage and you either don't have enough
 or you work more hours...right ?
simple
nothing will stop  you from trying to get enough hours to survive

ya its like being under water
no matter how much harder it may get to keep  going higher and higher
   you'll do it till you surface

these critters can really be wacked to hell...and have been

however imagine you are easily surviving
and suddenly you get a raise per hour

you might reduce your life time job hour plans eh ?
take a bit more leisure
that second force has cut in here

so again taxing your ass off will induce more offered hours

so when do we get to the point where lowering hourly rates might
reduce hours offered ?

  when you got so much task related income
 every increase gets off set at least in part
  by offering less hours

my guess this never happens to our "high market achievers"
but according to reaganomics it does
reagan himslef claimed he'd of taken more roles
in his hay days past
if back then his marginal tax rate hadn't been  so  damn high

how his eagerness to work more
could produce more roles to play in aggreaget instead of simply seeing the availible roles more hogger by the lucky/gifted few
  is left undiscovered i might add

but that's another thread
 but hey we hit another poser
what if we change not the average tax but the tax on additional job or task income


now rethink all this two force tussle bull shit
using marginal changes

its this that gets reaganized:

 additional hours  or higher rates per hour
                  are compensated at reduced  income  ?

again look at your underwaters first
they'll still take more hours  at least till their  heads are above water
in fact they 'll take as many hours as they can get
even at a reduced marginal pay rate

which btw is exactly what happens to lots of souls
    now  in the income related  social transfer payment system

now look at middlers the bulk of the production force

all are likely still looking for more income not more leisure

reaganites at the top ?

well you decide

joe stglitiz contends we oughta have progressive  average income taxes
and flatly regressive  marginal taxes on job/ task income
more or less pro rated by hours worked

make sense to you ?

i prefer a human capital tax
 a tax on wealth in market evaluated
 out put potential