02/18/2013 archive

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

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Paul Krugman: Raise That Wage

President Obama laid out a number of good ideas in his State of the Union address. Unfortunately, almost all of them would require spending money – and given Republican control of the House of Representatives, it’s hard to imagine that happening.

One major proposal, however, wouldn’t involve budget outlays: the president’s call for a rise in the minimum wage from $7.25 an hour to $9, with subsequent increases in line with inflation. The question we need to ask is: Would this be good policy? And the answer, perhaps surprisingly, is a clear yes. [..]

So Mr. Obama’s wage proposal is good economics. It’s also good politics: a wage increase is supported by an overwhelming majority of voters, including a strong majority of self-identified Republican women (but not men). Yet G.O.P. leaders in Congress are opposed to any rise. Why? They say that they’re concerned about the people who might lose their jobs, never mind the evidence that this won’t actually happen. But this isn’t credible.

New York Times Editorial: About Those Black Sites

The details of American antiterrorism policies, put in place after 9/11, are still largely hidden, but more pieces of this sordid history are dribbling out.

A valuable new report issued this month by the Open Society Justice Initiative documents the extent of the Central Intelligence Agency’s use of extraordinary rendition – the practice of abducting suspected terrorists and transferring them to countries with reputations for torturing prisoners during interrogations.

Economist, author and co-director of the Center for Economic and Policy Research, Dean Baker took New York Times columnist Thomas L. Friedman back to economics class (he may not have ever went) for his Sunday column that was “once again mass marketing misinformation on economics” and getting it “180 degrees wrong: the Friedman standard.”

Dr. Baker start off citing Mr. Friedman’s first paragraph:

It begins by telling us that Tim Cook and Apple are sitting on $137 billion that they could be investing:

“Apple is currently sitting on $137 billion of cash in the bank. There are many reasons Apple has not spent its cash horde, but I’ll bet anything that one of them is the uncertain economic and tax environment in this country. Think about how much better we’d all be if Apple, and the many other companies sitting on cash, felt confident enough in the future to spend it. These are the most dynamic companies in the world. They don’t need any government help to innovate.”

He goes on to explain how, at this time, investment in equipment and software is near pre-recession levels. He then moves on to Mr. Friedman’s wrongheadedness about consumption and the trade deficit.

Then Dr. Dean get to the real nitty gritty of how really wrong Friedman is on getting the American economy moving is this theory on investment in infrastructure and early childhood education:

Friedman just keeps getting better:

“Our choice today is not ‘austerity’ versus ‘no austerity.’ That is a straw man argument offered by both extremes. It’s about whether we phase in – in the least painful way possible – a long-term plan that balances our need to protect the most vulnerable in this generation while funding the most opportunities for the next generation, and still creating growth. We can’t protect both generations in full anymore, but we must not sacrifice one for the other – favoring nursing homes over nursery schools – and that’s what we’re on track to do.”

You have to love the line:

“We can’t protect both generations in full anymore.”

Somehow Friedman missed the fact that the problem we are facing is a lack of demand. We need people to spend more not less. How does austerity reduce unemployment and get the economy back to full employment? It hasn’t worked in Ireland, Greece, Spain, the United Kingdom or anywhere else that can be identified. How on earth does the fact that we now face a huge gap in demand mean that we are less well-situated to “protect both generations.” (Of course he doesn’t say anything about income distribution.)

Again, if Friedman could be taught some intro economics it would be hugely helpful here. Suppose Friedman gets his wish for a grand bargain and everyone working today knew that they would be seeing sharply lower Social Security and Medicare benefits in the future. All of those consumers who Friedman thinks are paralyzed by uncertainty will suddenly realize that they can be certain that they will need more money to support themselves in retirement because the Thomas Friedmans of the world have taken away their Social Security and Medicare.

As Mr. Friedman has written, he mostly travel’s by taxi. So Dr. Baker has an idea on how you can help with Mr. Friedman’s economic education if you live in New York City:

Print copies of the two graph’s the investment share of GDP and consumption as a share of disposable income;

Give then to NYC cab driver’s to give to Mr. Friedman if, and when, they pick him up.

The theory is that if enough people do this eventually Mr. Friedman will learn something about economics and we will “no longer have to see painfully wrongheaded columns on the economy in the Sunday NYT.”

I stopped reading Mr. Friedman’s columns sometime after 2006, three years into the Iraq War that was only suppose to last six months. Mr. Friedman started predicting the outcome of the war would take six months in 2003. He did it often enough that Atrios started calling the prediction a “Friedman Unit” in 2006 and it became a running joke thereafter.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 18 is the 49th day of the year in the Gregorian calendar. There are 316 days remaining until the end of the year (317 in leap years).

On this day in 1885, Mark Twain publishes his famous, and famously controversial, novel The Adventures of Huckleberry Finn.

Considered as one of the Great American Novels, the Adventures of Huckleberry Finn is among the first in major American literature to be written in the vernacular, characterized by local color regionalism. It is told in the first person by Huckleberry “Huck” Finn, a friend of Tom Sawyer and narrator of two other Twain novels (Tom Sawyer Abroad and Tom Sawyer, Detective).

The book is noted for its colorful description of people and places along the Mississippi River. Satirizing a Southern antebellum society that had ceased to exist about twenty years before the work was published, Adventures of Huckleberry Finn is an often scathing look at entrenched attitudes, particularly racism.

The work has been popular with readers since its publication and is taken as a sequel to The Adventures of Tom Sawyer. It has also been the continued object of study by serious literary critics. It was criticized upon release because of its coarse language and became even more controversial in the 20th century because of its perceived use of racial stereotypes and because of its frequent use of the racial slur “nigger”, despite that the main protagonist, and the tenor of the book, is anti-racist. According to the January 20, 2011 Chase Cook/The Daily article, The Adventures of Huckleberry Finn novel will be released in a new edition. Two words will be changed throughout the whole book, “injun” and “nigger” to “indian” and “slave”. The book is being changed as quoted in the article, “only to make it viable to the 21st century”.

Writing for his New York Times blog, Conscience of a Liberal, Nobel Prize winning economics professor Paul Krugman makes two salient observation about President Barack Obama’s proposal to raise the minimum wage from the current $7.25 per hour to $9.00 per hour indexed to inflation. His first observation is the political “trap” for Republicans leaders who are opposed, even though a vast majority of voters support a wage increase (pdf) and that includes a string majority of Republican women but not men. Prof Krugman notes that while Republicans want you to believe that they are concerned workers might lose their jobs, he gives two examples of why this faux sincerity “won’t wash”:

1. The truth is that top Republicans have so little regard for ordinary workers that they can’t even manage to pretend otherwise. Case in point: on the last Labor Day, Eric Cantor declared,

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

Yep: even on Labor Day, Cantor had nothing positive to say about workers, just praise for their bosses.

2. Consider a working couple with two children, earning the current minimum wage. How much federal income tax do they pay? If I’m doing the math right, the answer is, none – they get a refund. (They pay plenty of payroll taxes, sales taxes, etc., but that isn’t supposed to count). In the minds of Republicans, this makes them lucky duckies, members of the 47 percent, part of what’s wrong with America. The GOP just can’t credibly claim to suddenly be deeply concerned about their job prospects.

Prof. Krugman’s second observation is about the economics of raising the minimum wage:

First, as John Schmitt (pdf) documents at length, there just isn’t any evidence that raising the minimum wage near current levels would reduce employment. And this is a really solid result, because there have been a lot of studies. We can argue about exactly why the simple Econ 101 story doesn’t seem to work, but it clearly doesn’t – which means that the supposed cost in terms of employment from seeking to raise low-wage workers’ earnings is a myth.

Second – and this is news to me – the usual notion that minimum wages and the Earned Income Tax Credit are competing ways to help low-wage workers is wrong. On the contrary, raising the minimum wage is a way to make the EITC work better, ensuring that its benefits go to workers rather than getting shared with employers. This actually is Econ 101, but done right: given a second-best world in which you use imperfect tools to help deserving workers, two tools together can produce a better outcome than either one on its own.

As usual, if you want comprehensive, in depth discussion without the political talking points and invective, at the same time presenting both sides, Chris Hayes and his guests on Up with Chris Hayes this past Saturday provided just that. Joining Chris to discuss the president’s proposal to raise the minimum wage were by Arindrajit Dube, assistant professor of economics at University of Massachusetts-Amherst; Lew Prince, owner of Vintage Vinyl, Inc. a small business in St. Louis, Missouri; Jennifer Sevilla Korn, executive director of the Hispanic Leadership Network; and Tsedeye Geeresslasse, staff attorney of the National Employment Law Project.

Republicans and business groups have lined up in opposition to a minimum wage increase, and in doing so, they’ve repeated a talking point that has been common in Washington for decades: that an increase in the minimum wage would lead to reductions in employment. As it turns out, there’s a growing body of empirical evidence that indicates that minimum wage increases, within a certain range, have no negative impact on employment, and may actually boost worker productivity and consumer demand, providing a much-needed stimulus to the economy.

So I happen to have a very old, very fast car that I rarely use.  It’s unreliable and can leave you inconveniently stranded at your destination, unable to return home.  It’s hard to drive because of the performance suspension and to get in and out of because of the configuration (it’s nickname is ‘The Flying Penis’).  While the mileage doesn’t suck it’s nothing to brag about and there is no cargo space at all.

On the other hand it still goes like stink and provided you’ve assured yourself a suitable stretch of road is enforcement free it’s a blast at high speeds.

These are not uncommon traits in a vehicle like this, mine is in fact relatively civilized.

What’s surprising about a piece like John Broder’s is that someone who should know better about the inherent unruliness of this type of automobile complains with particular pettiness and spite about the Tesla Model S.

Now I happen to think the computer logs prove Broder a pants on fire prevaricating liar and his apologists credulous fools grasping at straws (to say nothing of his own feeble attempts to avoid Judith Millerdom), but this is not the first time.

So what motivates this vitriol against electric cars?

Well, range is a problem.  Until I read up on this I had no idea it was so limited- around 40 miles for the Volt in pure electric mode, 73 for the Leaf.  Perfectly fine for errands, not so much for trips.

But I think that more fundamentally it’s God, Guns, and Gays.

Gasoline is a dinosaur in more ways than one.  Either it disappears or we do.  Turn Left Racing is the most popular spectator sport in the U.S. (Throwball has better TV ratings).  It feeds the populist fantasy that with a little more practice or firepower you too can be a hero for people so down and out their solace is the fact that at least they’re not a ____ and there will be pie in the sky by and by, by and by, on the big rock candy mountain.  Were your life that miserable and you a little less cynical you’d cling to it too.

But it’s all an illusion, magical thinking and distractions.  The big stories today are Danica Patrick’s love life and Daytona Pole.

More measured accounts-

• The Guardian
• Washington Post
• Time Magazine