Category Archives: Social policy

La Niña as Black Swan – Energy, Food Prices, and Chinese Economy Among Likely Casualites

Reader Crocodile Chuck highlighted an important post at Houses and Holes, an economics-oriented Australian blog. While Australia is reeling from the immediate impact, the broader impact of 2010-11 weather patterns may have much bigger ramifications for food and energy prices in Australia and abroad.

The post focuses on the possibility, increasingly endorsed by top meteorologists, that the heavy Australian rains are the result of a super La Niña, the last of which was seen in 1973-4,the time of the last severe flooding in Queensland. Super La Niñas are hugely disruptive to agricultural production and can have other nasty knock-on effects (some contend the 1917 La Niña helped spawn the 1918 influenza pandemic).

In this case, the damage of a super La Niña will not only increase food costs at a time when price rises and food scarcity are already a major concern, but will likely extend to energy prices as well. That one-two punch would be particularly devastating to China.

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Outsized Pay on Wall Street Persists

A piece at Bloomberg today confirms that the financial crisis did nothing to shift the gap between what someone can earn on Wall Street versus more worthwhile lines of work:

Wall Street traders discouraged by declining bonuses this month can take solace: They still earn much more than brain surgeons and top U.S. generals.

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Matt Stoller: Understanding the Strategy of the Democratic Power Class

Yves here. I took the liberty of lifting this comment by Matt Stoller from a recent post, since it is informative in its own right and relevant to the piece today dissecting a mortgage proposal advanced by a think tank with close ties to the Administration.

By Matt Stoller, the former Senior Policy Advisor for Rep. Alan Grayson. His Twitter feed is @matthewstoller

Since the 1970s, Democratic elites have focused on breaking public sector unions and financializing the economy. Carter, not Reagan, started the defense build-up. Carter, not Reagan, lifted usury caps. Carter, not Reagan, first cut capital gains taxes. Clinton, not Bush, passed NAFTA. It isn’t the base of the Democratic party that did this, but then, voters in America have never had a lot of power because they are too disorganized.

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US Follows Japan: The Rise of Freeters, aka Temps

One of the post-bubble era trends in Japan that has caused consternation within the island nation is the rise of an employed underclass. The old economic model was lifetime employment, even though that was a reality observed more at large companies than in the economy overall. Nevertheless, college graduates could expect to find a job without much difficulty and look forward to a stable career if they performed reasonably well.

In the new economic paradigm, wages are compressed among full-time salaried workers (meaning seniority/managerial based pay differentials, which were not all that great in Japan to begin with, have narrowed). And even worse from a societal standpoint is the rise of “freeters” or workers hired into temporary jobs.

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Are Banks Afraid to Foreclose on the Rich?

I got this report from an attorney who is doing work in one of the top five foreclosure states. I’m relying this account in a somewhat sanitized form; he provided far more in the way of specifics.

One of his colleagues has a monthly mortgage payment considerably above $20,000 a month. He has not made a single payment in over 18 months. He has also not received a foreclosure notice or even as much as a call from his servicer.

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Banana Republic Watch: New York City More Unequal Than Chile

A newly released report, “Grow Together or Pull Further Apart? Income Concentration Trends in New York,” by the Fiscal Policy Institute (hat tip reader Thomas R) gives a picture of how New York City is now at Latin American levels of income disparity.

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Auerback/Wray: Liberals need not fear Obama’s tax deal: Why a payroll tax holiday actually helps support tomorrow’s retirees

Yves here. As much as Auerback’s and Wray’s argument does describe the reality of government fiscal operations accurately, I see their political reading as wildly optimistic. Given that disproven ideas like “trickle down economics” still hold considerable sway, I think the concerns about how a payroll tax holiday will serve as a wedge to cut Social Security benefit are valid.

By Marshall Auerback, a portfolio strategist and hedge fund manager, and L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

The commentary in the aftermath of President Obama’s announced tax deal with the GOP has been both predictable and, for the most part, misconceived….

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Doug Smith: Words, Words, Words

By Douglas K. Smith, Executive Director of The Punch Sulberger Program at Columbia School of Journalism Words matter. Or, more to the point, the meaning of words matter. Take ‘unemployment’. Notwithstanding years of persistently pointing out that which is the Bureau of Labor Statistics U3 series, severely understates real unemployment, nearly all accounts, whether in […]

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“Protest works. Just look at the proof”

It’s astonishing to see how Americans have been conditioned to think that political action and engagement is futile. I’m old enough to have witnessed the reverse, how activism in the 1960s produced significant advances in civil rights blacks and women, and eventually led the US to exit the Vietnam War. I’m reminded of this sense […]

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Foreclosure Fraud: We Need to Fix the Banks Again

By Marshall Auerback, a Senior Fellow at the Roosevelt Institute, and a market analyst and commentator. Crossposted from New Deal 2.0. It’s time to put the perps of this scandal in jail. Yves Smith, Bill Black, and Mike Konczal have already done yeoman’s work in seeking to explain the lender fraud scandal in the securitized […]

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UN Agency Warns of Unemployment-Related Unrest through 2015

The specter of demonstrations in Europe are not only likely to become a regular news item, but other economies have high odds of similar social stresses, a UN agency forecasts. The International Labour Organisation has pushed back its estimate of when global employment will return to pre-crisis levels back to 2015. Given the widespread signs […]

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Auerback: Where is Huey Long When You Need Him?

By Marshall Auerback, a portfolio strategist .hedge fund manager, and Roosevelt Institute Senior Fellow My friend, Yves Smith, has posed the question as to why there is no political outlet for the anger on the left. In other words, where are today’s Huey Longs when you need them? It’s become patently obvious to anybody with […]

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On Polling Bias and “The Manufacture of Consent”

The birth of modern propaganda took place in World War I, where an extraordinarily well orchestrated campaign turned America from pacifist to ferociously anti-German in a mere eighteen months. When after the war, the public learned that its beliefs had been turned without their realizing it, some of the key actors. such as Eddie Bernays […]

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