Wednesday, July 31, 2013

AP: Poor white people

Uh-oh!  In America, "uppity" blacks feeling more confident + poor, dispirited whites =  trouble.

By Hope Yen
July 29, 2013 | AP

Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor and loss of good-paying manufacturing jobs as reasons for the trend.

The findings come as President Barack Obama tries to renew his administration's emphasis on the economy, saying in recent speeches that his highest priority is to "rebuild ladders of opportunity" and reverse income inequality.

Hardship is particularly on the rise among whites, based on several measures. Pessimism among that racial group about their families' economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy "poor."

"I think it's going to get worse," said Irene Salyers, 52, of Buchanan County, Va., a declining coal region in Appalachia. Married and divorced three times, Salyers now helps run a fruit and vegetable stand with her boyfriend, but it doesn't generate much income. They live mostly off government disability checks.

"If you do try to go apply for a job, they're not hiring people, and they're not paying that much to even go to work," she said. Children, she said, have "nothing better to do than to get on drugs."

While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in government data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.

The gauge defines "economic insecurity" as experiencing unemployment at some point in their working lives, or a year or more of reliance on government aid such as food stamps or income below 150 percent of the poverty line. Measured across all races, the risk of economic insecurity rises to 79 percent.

"It's time that America comes to understand that many of the nation's biggest disparities, from education and life expectancy to poverty, are increasingly due to economic class position," said William Julius Wilson, a Harvard professor who specializes in race and poverty.

He noted that despite continuing economic difficulties, minorities have more optimism about the future after Obama's election, while struggling whites do not.

"There is the real possibility that white alienation will increase if steps are not taken to highlight and address inequality on a broad front," Wilson said.

Sometimes termed "the invisible poor" by demographers, lower-income whites are generally dispersed in suburbs as well as small rural towns, where more than 60 percent of the poor are white. Concentrated in Appalachia in the East, they are also numerous in the industrial Midwest and spread across America's heartland, from Missouri, Arkansas and Oklahoma up through the Great Plains.

More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation's destitute, nearly double the number of poor blacks.

Still, while census figures provide an official measure of poverty, they're only a temporary snapshot. The numbers don't capture the makeup of those who cycle in and out of poverty at different points in their lives. They may be suburbanites, for example, or the working poor or the laid off.

In 2011 that snapshot showed 12.6 percent of adults in their prime working-age years of 25-60 lived in poverty. But measured in terms of a person's lifetime risk, a much higher number — 4 in 10 adults — falls into poverty for at least a year of their lives.

The risks of poverty also have been increasing in recent decades, particularly among people ages 35-55, coinciding with widening income inequality. For instance, people ages 35-45 had a 17 percent risk of encountering poverty during the 1969-1989 time period; that risk increased to 23 percent during the 1989-2009 period. For those ages 45-55, the risk of poverty jumped from 11.8 percent to 17.7 percent.

By race, nonwhites still have a higher risk of being economically insecure, at 90 percent. But compared with the official poverty rate, some of the biggest jumps under the newer measure are among whites, with more than 76 percent enduring periods of joblessness, life on welfare or near-poverty.

By 2030, based on the current trend of widening income inequality, close to 85 percent of all working-age adults in the U.S. will experience bouts of economic insecurity.

"Poverty is no longer an issue of 'them', it's an issue of 'us'," says Mark Rank, a professor at Washington University in St. Louis who calculated the numbers. "Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need."

Rank's analysis is supplemented with figures provided by Tom Hirschl, a professor at Cornell University; John Iceland, a sociology professor at Penn State University; the University of New Hampshire's Carsey Institute; the Census Bureau; and the Population Reference Bureau.

Among the findings:

— For the first time since 1975, the number of white single-mother households who were living in poverty with children surpassed or equaled black ones in the past decade, spurred by job losses and faster rates of out-of-wedlock births among whites. White single-mother families in poverty stood at nearly 1.5 million in 2011, comparable to the number for blacks. Hispanic single-mother families in poverty trailed at 1.2 million.

— The share of children living in high-poverty neighborhoods — those with poverty rates of 30 percent or more — has increased to 1 in 10, putting them at higher risk of teen pregnancy or dropping out of school. Non-Hispanic whites accounted for 17 percent of the child population in such neighborhoods, up from 13 percent in 2000, even though the overall proportion of white children in the U.S. has been declining.

The share of black children in high-poverty neighborhoods dropped sharply, from 43 percent to 37 percent, while the share of Latino children ticked higher, from 38 to 39 percent.

Going back to the 1980s, never have whites been so pessimistic about their futures, according to the General Social Survey, which is conducted by NORC at the University of Chicago. Just 45 percent say their family will have a good chance of improving their economic position based on the way things are in America.

The divide is especially evident among those whites who self-identify as working class: 49 percent say they think their children will do better than them, compared with 67 percent of non-whites who consider themselves working class.

In November, Obama won the votes of just 36 percent of those noncollege whites, the worst performance of any Democratic nominee among that group since 1984.

Some Democratic analysts have urged renewed efforts to bring working-class whites into the political fold, calling them a potential "decisive swing voter group" if minority and youth turnout level off in future elections.

"They don't trust big government, but it doesn't mean they want no government," says Republican pollster Ed Goeas, who agrees that working-class whites will remain an important electoral group. "They feel that politicians are giving attention to other people and not them."

Study: In U.S., geography is destiny

Yet more evidence that bootstrapping oneself from rags to riches is pretty darn unlikely, and depends a lot on luck and accident of birth:

“Where you grow up matters,” said Nathaniel Hendren, a Harvard economist and one of the study’s authors. “There is tremendous variation across the U.S. in the extent to which kids can rise out of poverty.”


Geography mattered much less for well-off children than for middle-class and poor children, according to the results. In an economic echo of Tolstoy’s line about happy families being alike, the chances that affluent children grow up to be affluent are broadly similar across metropolitan areas.

This directly contradicts the conservative belief in the power of rugged individualism to overcome all obstacles.  But we already knew that Ragged Dick was an old fairy tale, didn't we?... 

By David Leonhardt
July 22, 2013 | New York Times

Robinson: Love or hate him, we should thank Snowden

Great point by Robinson:

This month, the office of Director of National Intelligence James Clapper issued a public statement announcing that the secret Federal Intelligence Surveillance Court has renewed the government’s authority to collect “metadata” about our phone calls. This was being disclosed “in light of the significant and continuing public interest in the . . . collection program.”

Isn’t that rich? If the spooks had their way, there would be no “continuing public interest” in the program.  We wouldn’t know it exists.

Aren't we all glad we know about this program, even if some of us happen to support it?  Personally, I don't understand how Snowden's revealing the program compromised U.S. intelligence.  No names were leaked, no agents put in danger.  

Moreover, the DOD-NSA's domestic spying program continues unchanged and unabated... which kind of undermines the argument that Snowden's whistle-blowing damaged the program. Usually, unsavory clandestine operations are cancelled or revamped once they are exposed, since they rely on secrecy.  These domestic spying programs don't rely on secrecy, just brute force collection of all our electronic communications.

By Eugene Robinson
July 30, 2013 | Washington Post

Edward Snowden’s renegade decision to reveal the jaw-dropping scope of the National Security Agency’s electronic surveillance is being vindicated — even as Snowden himself is being vilified.

Intelligence officials in the Obama administration and their allies on Capitol Hill paint the fugitive analyst as nothing but a traitor who wants to harm the United States. Many of those same officials grudgingly acknowledge, however, that public debate about the NSA’s domestic snooping is now unavoidable.

This would be impossible if Snowden — or someone like him — hadn’t spilled the beans. We wouldn’t know that the NSA is keeping a database of all our phone calls. We wouldn’t know that the government gets the authority to keep track of our private communications — even if we are not suspected of terrorist activity or associations — from secret judicial orders issued by a secret court based on secret interpretations of the law.

Snowden, of course, is hardly receiving the thanks of a grateful nation. He has spent the last five weeks trapped in the transit zone of Sheremetyevo Airport outside Moscow. Russian officials, who won’t send him home for prosecution, wish he would move along. But Snowden fears that if he takes off for one of the South American countries that have offered asylum, he risks being intercepted en route and extradited. It’s a tough situation, and time is not on his side.

You can cheer Snowden’s predicament or you can bemoan it. But even some of the NSA’s fiercest defenders have admitted, if not in so many words, that Snowden performed a valuable public service.

This month, the office of Director of National Intelligence James Clapper issued a public statement announcing that the secret Federal Intelligence Surveillance Court has renewed the government’s authority to collect “metadata” about our phone calls. This was being disclosed “in light of the significant and continuing public interest in the . . . collection program.”

Isn’t that rich? If the spooks had their way, there would be no “continuing public interest” in the program. We wouldn’t know it exists.

The new position espoused by President Obama and those who kept the NSA’s domestic surveillance a deep, dark secret is that of course we should have a wide-ranging national debate about balancing the imperatives of privacy and security. But they don’t mean it.

I know this because when an actual debate erupted in Congress last week, the intelligence cognoscenti freaked out.

An attempt to cut off funding for the NSA’s collection of phone data, sponsored by an unlikely pair of allies in the House — Justin Amash, a conservative Republican, and John Conyers, a liberal Democrat, both from Michigan — suffered a surprisingly narrow defeat, 217 to 205. The measure was denounced by the White House and the congressional leadership of both parties, yet it received bipartisan support, from 94 Republicans and 111 Democrats.

The Amash-Conyers amendment was in no danger of becoming law — the Senate would have killed it and, if all else failed, President Obama would have vetoed it. But it put the intelligence establishment on notice: The spooks don’t decide how far is too far. We do.

A recent Washington Post-ABC News poll showed that three out of four Americans believe the vacuum-cleaner collection of phone call data by the NSA intrudes on our privacy rights.  At the same time, nearly three-fifths of those surveyed said it was “more important right now” to investigate possible terrorist threats than to respect privacy. A contradiction, perhaps? Not necessarily.

It is possible to endorse sweeping and intrusive measures in the course of a specific investigation but to reject those same measures as part of a fishing expedition. At the heart of the Fourth Amendment is the concept that a search must be justified by suspicion. Yet how many of those whose phone call information is being logged are suspected of being terrorists? One in a million?

Equally antithetical to the idea of a free society, in my view, is the government’s position that we are not permitted to know even how the secret intelligence court interprets our laws and the Constitution. The order that Snowden leaked — compelling a Verizon unit to cough up data on the phone calls it handled — was one of only a few to come to light in the court’s three decades of existence. Now there are voices calling for all the court’s rulings to be released.

We’re talking about these issues. You can wish Edward Snowden well or wish him a lifetime in prison. Either way, you should thank him.

Monday, July 29, 2013

Conservative ire at DC's 'fair wage' law

Since my post, 'Meyerson: Cities resist the 'Wal-Mart-ization of work,' on July 17, I've been eagerly awaiting the decision of DC Mayor Vincent Gray whether or not to veto the DC City Council's "fair wage" law ("Large Retailer Accountability Act of 2013") that would require all big-box retailers, such as Wal-Mart, that earn more than $1 billion in yearly revenue with floor space of over 75,000 square feet to pay all employees a minimum wage of $12.50 an hour, up from $8.25.

According to WSWS, other major national retailers such as Home Depot, AutoZone, Macy’s, Lowe’s, Target and Walgreen’s have written an open letter to Mayor Gray, declaring the bill "misguided."

For what it's worth, the "liberal" Washington Post has also come out against the bill.  Let me repeat that: arming al-Qaeda affiliates in Syria?  For.  Paying working Americans a living wage?  Against.  That's the lib'rul media for ya'.  

We're still waiting on Mayor Gray's decision.  The tension is so thick you could cut it with a knife!  ... And why not cut it with a premium electric knife with rubberized handle (made in China) from Walmart for only $18.00?  (Hey, it's my way of balancing the scales, since I rip on Wal-Mart so often).

If you think it's just me, or just liberals, that see this DC law as a bellwether, think again. Witness all the conservative ink spilled on the subject:

If all these right-wingers think that DC's living wage law is a terrible idea, then it must be good!  

Seriously though, anybody who knows, knows that where Wal-Mart goes, wages go down across the board. Is that what DC really needs?  A line has to be drawn somewhere, and only the DC City Council has the authority to draw it.  

In the absence of action by the states and federal government on raising the minimum wage, which should be at least $10.59 today, only cities can take action. That's what DC is doing. That's federalism in action. Funny that pro-fedreralist conservatives are so up in arms about it.

There's also this stupid debate about who needs who more: DC or Wal-Mart?  Of course Wal-Mart needs DC, why else would they be opening 3 stores and planning 3 more?  Wal-Mart is not in the charity business.  

I lived in SE DC for two years, so I know that Washington, DC does not need cheaper toasters; it needs more jobs that pay a living wage.  Wal-Mart will not only offer poverty wages, it will depress wages at its competitors and across the District, making Washington poorer. 

Let's hope Mayor Gray has a big brass sack!

UPDATE (01.08.2013): Mayor Gray says he hasn't made a decision yet, and hasn't even been presented formally with the bill by the City Council: "D.C. minimum wage bill: Vincent Gray still undecided on signing or veto."

How can black men escape profiling?

I'm re-posting this in full.  Whitlock's main point is compelling: we know what to do about black-on-black violence, but nobody -- including our black male President -- knows how to overcome racial profiling of black men.  Nobody.  Think about that.

Consider also that Whitlock is not some blame-everything-on-poverty black man: "Navigating the ghetto is difficult. But it's not remotely impossible." That comment somewhat eases upper-class white guilt without disempowering the poor.

Here's how Whitlock sums it up [emphasis mine]:

Without a shred of corroborating evidence, the police assumed and the prosecution team unwittingly conceded Trayvon Martin attacked George Zimmerman without reasonable provocation.

Imagine that. An agitated fair-skinned man with a gun followed an unarmed black boy and the assumptions drawn favor the gun-toting, non-black man.

If there's a blueprint for black men to follow that will reduce negative assumptions being made about us, reveal it.  Many of us will adhere to it religiously and focus all of our attention on the drug war, mass incarceration and the other policies that fuel black-on-black violence and the destruction of the black family.

Whitlock is a columnist for FOX Sports, by the way.  Good on FOX, I guess, for not firing him for making this commentary on HuffPo.

By Jason Whitlock
July 26, 2013 | Huffington Post

Here's what the race baiters on the right fail to comprehend: There's a clear-cut, easy-to-follow blueprint for avoiding the ravages of black-on-black violence and crime. America has yet to provide us a comparable blueprint for avoiding racial profiling.

That's why it's impossible for ordinary, rational black folks to let go of Trayvon Martin and the not-guilty verdict in the George Zimmerman trial.

We know all too well the horrors transpiring in Chicago and other urban areas where the neglected offsprings of America's prison-institutionalized and prison-values-corrupted engage in a predictable war of hopelessness and self-hatred. The consequences of our drug war and its companion, mass incarceration, do not stop at prison walls.

We know that. We do also, however, know how to escape their wrath.

When my mother caught a burglar climbing through our kitchen window in 1975, she promptly took a second job and moved me and my older brother to an Indianapolis suburb.

[Nowadays a black woman would be lucky to get first job. -- J]

Willie Clark, my best childhood friend, grew up in a home just a few blocks from my old neighborhood. You could walk out his family's backyard and reach a government housing project in less than a minute. The entire area was rough.

Willie's parents had little trouble keeping him out of trouble. They raised him and his two sisters in the church. They taught him to be respectful and careful of where he went and who he befriended. They supported his athletic endeavors, kept tabs on his academic progress, demanded that he avoid drugs and nurtured a belief he could achieve something in this country.

He was raised in the 'hood. He graduated from college, opened an American Family Insurance agency, married and built a home in the suburbs for his wife and three kids. He moved up and moved out.

My dad owned small taverns (think ghetto Cheers) in Indianapolis' inner-city for 35 years. I loved the places, visited them often as a kid and socialized at them as an adult. I never once had any problems.

Navigating the ghetto is difficult. But it's not remotely impossible. If you're intent on avoiding trouble, use common sense and choose to interact with all people respectfully, you can, short of bad luck, stay clear of the nonsense. And, if all else fails and you don't want to walk the tightrope, you can do what my mother did and take the necessary steps to leave the ghetto.

For a black man, there is no game plan for escaping racial profiling. You can't run from the police. No neighborhood is safe. There's no style of dress that protects you. Your level of education and wealth are irrelevant. Proper manners and a deferential tone do not matter.

Years ago, I worked for the Charlotte Observer. I lived in Rock Hill, S.C. My picture ran inside the newspaper alongside my occasional columns. One day I was driving home from work around 5 p.m. when a police officer decided I fit the description of a black man who had pulled a string of burglaries. He pulled me over. I was in slacks, dress shoes and a button-up shirt.

He demanded I step out of the car. When I did, I discovered there were six cops and three additional police cars surrounding me and my 1985 Honda Prelude. For the next hour, I stood alongside a busy street as the lead detective berated me and accused me of being a cat burglar. I told him I was a sports writer for the local paper. He didn't believe me. He didn't let me re-enter my car and drive home until a police dispatcher called the Observer and was assured by one of my co-workers that I worked there.

I was not cited for any traffic violation. I had broken no laws. I was guilty of being black when the police were looking for a black burglary suspect.

I drove to my apartment and cried for the next two hours. It was the most humiliating experience of my life.  It's difficult to adequately convey the mix of outrage, fear and vulnerability I felt throughout the encounter.  I've never forgotten it. Twenty years later, the scar is still there. It burns every time a well-intentioned employee follows me as I shop for clothes.

Maybe this is a price the race-baiters on the right think black men should pay without objection for the privilege of living in this country. If that's their logic, then what they're really arguing is that black men are not full citizens with inalienable rights in this republic.

Or maybe their position is racial profiling is a tax all black men should pay because our criminal justice system and popular culture have judged and portrayed black men as inherently criminal.  Interesting.  Do we then retain the right to judge all white men as inherently racist and the masterminds powering a system that has dehumanized and criminalized black men for 400 years in this country?

Surely there's some middle ground. Surely reasonable men -- regardless of political bent and color -- can comprehend black people's angst over racial profiling and subsequent fear the Zimmerman verdict symbolically deputized non-black civilians to treat all black men as criminals on sight.

I don't wear a hoodie. I was never suspended from school. I never posed as a wannabe thug. But I know exactly how Trayvon Martin felt at 7:09 p.m., on Feb. 26, 2012. He felt a mix of outrage, fear and vulnerability.

The system (police and prosecution) apparently never even considered the possibility that in the rain and the dark a cowardly, wannabe cop provoked a kid he deemed an "a--hole" and a "punk" by approaching him with his hand on his holstered weapon or with his weapon drawn.

Without a shred of corroborating evidence, the police assumed and the prosecution team unwittingly conceded Trayvon Martin attacked George Zimmerman without reasonable provocation.

Imagine that. An agitated fair-skinned man with a gun followed an unarmed black boy and the assumptions drawn favor the gun-toting, non-black man.

If there's a blueprint for black men to follow that will reduce negative assumptions being made about us, reveal it. Many of us will adhere to it religiously and focus all of our attention on the drug war, mass incarceration and the other policies that fuel black-on-black violence and the destruction of the black family.

Friday, July 26, 2013

Obama preaching to vanishing middle class

Cox's conclusion is quite alarming:

Referring to "the middle class" as a sympathetic totem, or even as an aspirational construct, now runs the risk of alienating voters as much as inspiring or comforting them. Offering "protections" to the middle class might even raise resentments: for a growing number of Americans, that means giving benefits to someone else.

I've been talking for years now about the disappearance of the middle class.  See here, here, here and here.  Economists tell us that things have been bad for years, just covered up by households borrowing and spending more than they could afford to.  The Great Recession removed that fig leaf of middle-class affluence and laid bare the truth.  

By Ana Marie Cox
July 24, 2013 | Guardian

Republicans seized upon Obama's speech on the economy as a chance to reiterate their contention that very little about the nation's situation has changed in the past five years – and, paradoxically, there's very little Obama could do about it, even if he wanted to.

"The president himself said [the speech] isn't going to change any minds," John Boehner said in a floor speech before Obama even started. "All right, well. So exactly what will change? What's the point? What's it going to accomplish? You probably got the answer: nothing."

Of course, inertia – in both the political and economic sense – was a major theme of the speech itself. Obama started off with some applause-worthy boosterism: the country leads in technological advances! We manufacture a lot of stuff!

But the crux of the speech was less optimistic: the existing trends in "a winner-take-all economy where a few do better and better, while everybody else just treads water – have been made worse by the recession."

Obama's complaints about the parallel stagnation in Washington were familiar as well. He called out Republican obstructionism repeatedly, and in at least one unscripted and pointed assertion:  "Repealing Obamacare and cutting spending is not an economic plan. It's not."

Your opinion as to whether the speech served its purpose depends on your party identification, and your opinion on what its purpose was probably does, too. For me, it's a split decision: I am sympathetic to the president's policies – using government spending as a lever to enable upward mobility – but I think he may not have succeeded in what most progressives probably thought was the purpose of the speech: to rally his base and frame a renewed economic policy debate over the coming months.

Maybe, I'm being too literal, but I keep getting stuck on the very title of the speech, "A Better Bargain for the Middle Class."

Here's the problem: the "middle class" – a once-reliable rallying point for both parties – is shrinking (not really news); and so are the numbers of Americans who think they are members of it.  What used to be the case – Americans defined themselves as "middle class" even if they weren't – is starting to adjust to sad reality: Americans don't think of themselves as "middle class", because they're not.

Pew study this spring found the number of Americans defining themselves as "middle class" has slipped from 53% to 49% since 2008, while those identifying themselves as "lower class" went from 25% to 32%.  Actual class slippage mirrors this finding almost exactly: the 2011 census found that since 2007, the share of working families with an income less than double the federal poverty line (the government's definition of "low income") rose from 28% to 32%.

Referring to "the middle class" as a sympathetic totem, or even as an aspirational construct, now runs the risk of alienating voters as much as inspiring or comforting them. Offering "protections" to the middle class might even raise resentments: for a growing number of Americans, that means giving benefits to someone else.

It may be sometime before political rhetoric adjusts to these harsh realities. I hope that the economy turns around before it has to.

Wednesday, July 24, 2013

Cornel West: Obama's racism speech hypocritical, too late

Brother West was having none of President Obama's bland and measured post-post-trial statement on the "not guilty" verdict of George Zimmerman, the killer of Trayvon Martin:  

I think we have to recognize that [President Obama] has been able to hide and conceal that criminalizing of the black poor as what I call the re-niggerizing of the black professional class. You’ve got these black leaders on the Obama plantation, won’t say a criminal word about the master in the big house, will only try to tame the field folk so that they’re not critical of the master in the big house. That’s why I think even Brother Sharpton is going to be in trouble. Why? Because he has unleashed—and I agree with him—the rage. And the rage is always on the road to self-determination. But the rage is going to hit up against a stone wall. Why? Because Obama and Holder, will they come through at the federal level for Trayvon Martin? We hope so. Don’t hold your breath. And when they don’t, they’re going to have to somehow contain that rage. And in containing that rage, there’s going to be many people who say, "No, we see, this president is not serious about the criminalizing of poor people." We’ve got a black leadership that is deferential to Obama, that is subservient to Obama, and that’s what niggerizing is. You keep folks so scared. You keep folks so intimidated. You can give them money, access, but they’re still scared. And as long as you’re scared, you’re on the plantation.

Most liberal and moderate pundits gave Obama high marks for his unprepared remarks last week about being a black man in America.  Nevertheless, it's kind of pathetic that we need our President to interpret the African-American experience for us.  If you're black, you already know about it. If you're white, and you don't acknowledge your own prejudices, then you're kidding yourself and lying to everybody else.  So who was Obama addressing, the history books?

Interview with Amy Goodman
July 22, 2013 | Democracy Now!

Black: Conservatives should back Glass-Steagall

My man Bill Black explains why real conservatives should support re-instituting Glass-Steagall.  Bottom line: if President Obama is against it, they ought to be for it!

By William K. Black
July 21, 2013 | New Economic Perspectives

Glass-Steagall prevented a classic conflict of interest that we know frequently arises in the real world.  Commercial banks are subsidized through federal deposit insurance.  Most economists support providing deposit insurance to commercial banks for relatively smaller depositors.  I am not aware of any economists who support federal “deposit” insurance for the customers of investment banks or the creditors of non-financial businesses.

It violates core principles of conservatism and libertarianism to extend the federal subsidy provided to commercial banks via deposit insurance to allow that subsidy to extend to non-banking operations.  Absent Glass-Steagall, banks could purchase anything from an aluminum company to a fast food franchise and (indirectly) fund its acquisitions and operations with federally-subsidized deposits.  If you run an independent aluminum company or fast food franchise do you want to have to compete with a federally-subsidized rival?

Deposit insurance is a material federal subsidy, but it pales in comparison to the implicit federal subsidy we provide to systemically dangerous institutions (SDIs) (so-called “too big to fail” banks).  The SDIs are precisely the banks most likely to purchase non-commercial banks. The general creditors of SDIs are protected against all loss so they funds to SDIs at a substantially lower interest rate than smaller competitors.  The largest SDIs are commercial banks that get both the explicit subsidy of federal deposit insurance and the larger subsidy unique to SDIs.

No conservative or libertarian should want the SDIs to maintain their political and economic dominance.  The SDIs’ dominance comes about not due to their efficiency but their size and the size of their lobbying wallet and force that allows them to extort greater federal subsidies than their rivals.  If conservatives and libertarians have any uncertainty about their position on Glass-Steagall they should consider these facts: (1) President Obama opposes ending the SDIs, (2) has done nothing effective to end the large federal subsidy provided to the SDIs, and (3) opposes bringing back Glass-Steagall and removing the explicit federal subsidy to banks that indirectly provides a competitive advantage to their commercial affiliates.

Monday, July 22, 2013

Stand your ground in Fla...unless you're black

Nope, no racial discrimination here, no sir:

An analysis conducted by the Tampa Bay Times last year showed that defendants in Florida who employ the “Stand Your Ground” defense are more successful when the victim is Black. In its examination of 200 applicable cases, the Times found that 73 percent of those who killed a Black person were acquitted, compared to 59 percent of those who killed a White.

By Zenitha Prince
July 21, 2013 | New American Media

JPMorgan Chase: The 'good' TBTF bank?

Remember when I pointed out that JP Morgan -- the "good" Wall Street bank -- was paying 20 percent of its annual net profits in fines and litigation?

Here we have Matt Taibbi pointing out that JP Morgan just recently paid another $1 billion to the FERC for manipulating energy prices in California and Michigan.

And let's keep in mind, this was the settlement price.  That means, whatever JP Morgan did, it was much worse than $1 billion.

Taibbi reminds us that, "In the three-year period between 2009-2012, Chase paid out over $16 billion in litigation costs," or 12 percent of Chase's net revenue over the same period.

What kind of bank, what kind of business, can allow itself to do that?  Only a corrupt and broken business, that's what.  Break up the TBTF banks!

By Matt Taibbi
July 18, 2013 | Rolling Stone

Anarchy reigns in GOP House

Nowadays when President Obama is negotiating with Speaker Boehner the process is a sham, because Boehner can't speak for his own caucus.  He is not a real leader.  There has been a complete breakdown in the GOP House.  Each Congressman thinks he's the leader and only he represents the conscience of the Republican Party.

Writes Chait [emphasis mine]:

The rational way to view these events is that Republicans have marginalized themselves. But the hard-liners see it differently. In their minds, every bill that passes is a betrayal by their leaders. They know that letting Democrats carry bills through the House has been the leadership’s desperate recourse to avoid total chaos, and since chaos is their leverage, they are now working feverishly to seal off that escape route. This year, an increasing proportion of conservative media is given over to conservative activists’ extracting pledges from Republican leaders not to negotiate with Democrats. In the wake of the tax-cut deal, Republican leaders in both houses had to pledge that they would not engage in any—to quote the ubiquitous buzzword—“backroom deals.” Since all deals get made in back rooms (there is no such thing as a front room, and leaders in Western cultures like the United States habitually transact their business in rooms), this means no negotiation at all.

As usual, we can thank talk radio and the Tea Parties for this sad turn of events: these are two most "active" and "vocal" conservative groups -- you might argue they are just two tin cans connected by the same string -- who also, unfortunately, take no responsibility for their words, and could care less if the country falls over a cliff, so long as their personal wealth is secured.  In the case of talk radio jocks, the closer our country comes to the abyss, the angrier people get, the higher their ratings and book sales.  Our elected representatives find themselves hostages to these zero-responsibility loudmouths and malcontents; or, they are newly-elected rep's born of the zero-responsibility Tea Parties.  These extremists would burn our government down to the ground if they got their way.

By Jonathan Chait
July 21, 2013 | New York Magazine

Gun nuts infringe on 1st Amend. to protect 2nd

Once again, gun nuts prove that they are willing to sacrifice the 1st Amendment and Americans' right to life, liberty and the pursuit of happiness... all to make it illegal to talk about the dangers of guns.

By Scott Hensley
July 19, 2013 | NPR

Study: 19th-cent. U.S. wealth vested in slaves

I've said it before: America was a country built by slaves; and that wealth persists. To ignore that, and yet to revere our Founding Fathers who got rich on the backs of slaves, is to deny reason and history.

To wit, let's recall this brief but fascinating Bloomberg analysis last year:

The U.S. won its independence from Britain just as it was becoming possible to imagine a liberal alternative to the mercantilist policies of the colonial era. Those best situated to take advantage of these new opportunities -- those who would soon be called "capitalists" -- rarely started from scratch, but instead drew on wealth generated earlier in the robust Atlantic economy of slaves, sugar and tobacco. [...]

This recognizably modern capitalist economy was no less reliant on slavery than the mercantilist economy of the preceding century. Rather, it offered a wider range of opportunities to profit from the remote labor of slaves, especially as cotton emerged as the indispensable commodity of the age of industry.

In the North, where slavery had been abolished and cotton failed to grow, the enterprising might transform slave-grown cotton into clothing; market other manufactured goods, such as hoes and hats, to plantation owners; or invest in securities tied to next year's crop prices in places such as Liverpool and Le Havre. This network linked Mississippi planters and Massachusetts manufacturers to the era's great financial firms: the Barings, Browns and Rothschilds.

But you know... maybe that is indeed what the Tea Parties and far-right conservatives really want: a return to late 18th and early 19th-century America, when a white elite got rich on the backs of dark-skinned slaves?  What else can we infer from the Republicans' recent "work or starve" political economy?

By Matthew Yglesias
July 18, 2013 | Slate

slave wealth

Thomas Piketty and Gabriel Zucman have a new paper out (PDF) about the historical evolution of wealth in a number of different prominent countries, and it features this chart for the United States that really drives home the amazing reality of America's antebellum slave economy. The "human capital" consisting of black men and women held as chattel in the states of the south was more valuable than all the industrial and transportation capital ("other domestic capital") of the country in the first half of the nineteenth century. When you consider that the institution of slavery was limited to specific subset of the country, you can see that in the region where it held sway slave wealth was wealth.

In their discussion, the point Piketty and Zucman make about this is that slave wealth was the functional equivalent of land wealth in a country where agricultural land was abundant. The typical European wealth-holding pattern was of an economic elite composed of wealthy landowners in a environment of scarce usable land. In America, land was plentiful since you could steal it from Native Americans. That should could have led to an egalitarian distribution of wealth, but instead an alternative agrarian elite emerged that did happen to own large stocks of land but whose wealthy was primarily composed of owning the human beings who worked the land rather than owning the land itself.

Wednesday, July 17, 2013

Meyerson: Cities resist the 'Wal-Mart-ization of work'

Meyerson's point about Southern regional wages being imposed on Northern workers is especially interesting: "Wal-Mart’s goal is to erase that North-South difference by making every place the South."

For what it's worth, I'm 110% behind the DC city council's decision to require big box stores to pay their workers a living wage!  Where Wal-Mart go, wages go down.  It's been proven.  Let's hope DC's mayor doesn't veto the council's profile in courage!

By Harold Meyerson
July 16, 2013 | Washington Post

For Republicans who want to cut the number of food stamp recipients, here’s a helpful suggestion: Support the ordinance passed last week by the D.C. Council, which required big-box stores like Wal-Mart to pay their employees at least $12.50 an hour.

On average, Wal-Mart pays its workers $12.67 an hour — which means that a huge number of its 1.4 million U.S. employees make a good deal less than that. By paying so little, the Bentonville behemoth compels thousands of its employees to use food stamps to feed their families and Medicaid to pay their doctor bills. It compels taxpayers to pick up a tab that wouldn’t even exist if the company paid its workers enough to get them out of poverty.

How many such workers go on the public rolls? Some states occasionally survey where those employees work, and Wal-Mart almost invariably tops their lists. An Ohio tally in 2009, for instance, found that 15,246 Wal-Mart workers were Medicaid recipients and 12,731 were on food stamps. (McDonald’s came in second in each category.)

Last week’s vote by the D.C. Council was just the latest round in the ongoing battle over whether Wal-Mart can open stores in the nation’s largest Northeastern and West Coast cities. The chain has encountered fierce resistance as it has sought to move into New York, Los Angeles, Chicago, Boston, San Francisco and now the nation’s capital. Elected officials in those cities have feared that America’s largest low-wage employer would compel long-established local retailers — most particularly, unionized supermarkets — to lower their wages.

study by the Center for Labor Research and Education at the Berkeley campus of the University of California found that the opening of just one Wal-Mart store in a county where there previously had been none lowered the wages of general merchandise employees in that county by 1 percent, and grocery employees by 1.5 percent. The counties surveyed did not include those that encompassed the largest East and West Coast cities, where the gap between Wal-Mart’s wages and those of other supermarkets is greatest. But just the possibility that Wal-Mart might receive the go-ahead to open stores in Los Angeles in 2004 compelled that city’s supermarket employee union to accept a management demand to establish a markedly lower pay scale for new hires. When subsequent public opposition to Wal-Mart’s entry kept the chain largely out of L.A., the lower pay scale was eliminated the next time the union’s contract was renegotiated.

With Wal-Mart repeatedly failing to gain entry into the nation’s largest and most lucrative consumer markets, its investors might wonder why the company insists on maintaining its one-size-fits-all pay scale. Sam Walton founded and built the business in the rural South, where both the cost of living and the average pay levels were the lowest in the nation. However, it has not significantly adjusted its pay levels to accommodate the higher costs of living that workers in the nation’s priciest cities must bear. Twelve bucks an hour goes a lot farther in Bentonville than it does in Brooklyn. The executives at Costco, Wal-Mart’s closest competitor, know how to run a profitable discount chain that pays workers well: Its average hourly wage is just over $19. That’s why there are Costco outlets in the cities where Wal-Mart is still on the outside looking in.

By one measure, Wal-Mart’s insistence on bringing Southern wages north contradicts the spirit of Southern regionalism on which many of America’s (and now, the world’s) largest companies have come to rely. Knowing that both the cost of living and wage scales are lower in the South, and that Southern states’ right-to-work laws effectively blocked workers’ efforts to form unions, Northern manufacturers began opening plants there decades ago.

Wal-Mart’s goal is to erase that North-South difference by making every place the South. It commands such a large share of the nation’s retail sector that it has compelled its suppliers to lower their own pay scales all along its supply chain to provide lower-cost products.

So, high-wage manufacturers say they have to go south, while low-wage retailers say they have to go north. In aggregate, the corporate message to Northern workers is: Heads, I win; tails, you lose.

That’s why last week’s vote by the D.C. Council has more than just local importance. Requiring the District’s big-box stores to pay a living wage ensures that incomes in this high-cost city won’t be dragged down to the level of those in the low-cost rural South. The council’s vote isn’t the final word: D.C. Mayor Vincent Gray still could veto the measure. But with working-class incomes everywhere spiraling downward, he might conclude that the Wal-Mart-ization of work — and income — must be stopped at the District line.

Americans incentivized not to work?

So this friend of mine, let's call him Rusty, shares the opinion of many on the right that at some point in time, starting around the time Obama became President, (hmmm....), Americans lost the incentive to work, or more accurately, were incentivized by Big Gubumint not to work, thanks to food stamps, Medicaid, unemployment benefits, and unquantified "welfare" of all kinds.  Nothing I say can convince Rusty otherwise.  It's an article of faith.

Rusty and his Rush Limbaugh-listening ilk don't believe stats such as those from the Bureau of Labor Statistics that there are currently 3.1 applicants for every job out there.  (While still daunting, this rate is far down from 6.9 applicants for every job at the end of the recession in June 2009.)  Nor do they stop to think what would happen if all those "welfare" recipients decided to enter the workforce -- even more applicants for every scarce job, and downward pressure on wages.

In fact, Republicans oppose raising the minimum wage, which would give more Americans the ability to support themselves without welfare.  A poverty-level minimum wage is certainly a disincentive to work.  

In his latest Rolling Stone blog post, Matt Taibbi takes the piss out of another right-wing theory, this time of David Brooks, about why Americna men especially don't want to take all those "humiliating" jobs out there just waiting to be filled: "David Brooks Wonders Why Men Can't Find Jobs: Comedy Ensues."

Regardless of why Brooks' particular theory is stupid and unsupported by facts, it's alarming that almost all U.S. conservatives are living in a speculative alternative America where able-bodied Americans prefer to "lounge around" on $200 a month for food stamps, rather than accept one of the many job offers dangling in front of them, because they consider such work beneath them.  According to conservatives, for whatever reason, before Obama, these Americans were incentivized to work, no matter how.  Post-Obama, these people have no incentive to work.  

So what changed besides the color of the guy in the White House, I wonder?  It couldn't be the fault of the GOP majority that came in with Obama.  So what is it??

Saturday, July 13, 2013

Black: Lenders & appraisers hyper-inflated housing bubble

Once again, two-fisted ex-regulator Bill Black takes a baseball bat to the kneecaps of the myth that "stupidity" and "greed" were to blame for the mortgage crisis.  And if that doesn't work, let's blame it all on the FMs.

Fraud.  We don't say it, you certainly won't hear it in the mainstream media, but it's there, and it remains unpunished and undeterred.

By William K. Black
July 9, 2013 | Huffington Post

Tuesday, July 9, 2013

Researcher: Suicide bombers motivated by...suicide

Gee, whaddya know?  Sometimes the simple answer is the correct answer.  According to Lankford's research:

Far from being psychologically normal, suicide terrorists are suicidal. They kill themselves to escape crises or unbearable pain. Until we recognise this, attempts to stop the attacks are doomed to fail.

But what about what failed suicide bombers say was their motivation?  They lie, according to Lankford, especially Muslims, and their families are eager to believe them:

Traumatised parents want to believe that their children were motivated by heroic impulses. And suicidal people commonly deny that they are suicidal and are often able to hide their true feelings from the world.

This is especially true of fundamentalist Muslims. Suicide is explicitly condemned in Islam and guarantees an eternity in hell. Martyrs, on the other hand, can go to heaven.

So let's put the myth of the sober-minded suicide terrorist in the "They hate us for our freedom," category of self-serving fairy tales that don't make us any safer.

By Adam Lankford
July 8, 2013 | New Scientist