Jason Furman, Social Security, and Wal-Mart

If you haven't heard, Barack Obama named Jason Furman as his economic policy director. Because of his centrist leanings and his identification with Rubinomics, some have questioned Furman's dedication to progressive causes, and there has been quite a bit written about this, not all of it accurate.

For example, take an article in the LA times on Furman's position on Social Security privatization. This response to the article is from the Economists for Obama web site:

Jason Furman and Social Security, Economists for Obama: As Brad Delong points out, this article in the LA Times completely misrepresents Obama Economic Policy Director Jason Furman's position on Social Security privatization. In fact, Jason is the economist who did the most to supply the intellectual ammunition to gun down Bush's proposal during the great Social Security battle of 2005. Jason, with help from Dean Baker and Brad Delong, was key to victory in that struggle. It's not hyperbole to say that without their efforts (especially Jason's), Bush might have succeeded in his efforts to gut the most important social safety net we have. See this paper for one of Jason's contributions in that battle.

Regarding the broader concerns raised in the article, I think Jared Bernstein has it right:

One economist from the left-leaning Economic Policy Institute, Jared Bernstein, offered praise for Furman, saying he understood why some critics were unhappy, though he thought their fears were misplaced.

"I understand the concerns, given positions he has taken" on some issues, Bernstein said. "But I am 110% certain that it will be Barack Obama -- not Jason Furman or Robert Rubin -- who will be setting the policies for the Obama administration." ...

Brad DeLong emailed the author of the article to ask how the inaccurate representation in the article could have happened given how well-known (and easy to find online) Jason's position on Social Security privatization is:

We Get an Email from Tom Hamburger..., by Brad DeLong: Apropos of the astonishing and false claim in this morning's LA Times that Jason Furman is some sort of a crypto-Bushie with views on Social Security matters "similar" to those Bush proposed in 2005, I write to the reporter involved, Tom Hamburger. And he writes back:

Mr. Hamburger's bottom line appears to be that his leaving a lot of readers with a false view of Jason Furman's position on Social Security is OK because that was "not the point of this story..."

So I write back:

On Wed, Jun 11, 2008 at 12:22 PM, Hamburger, Tom wrote:

Dear Mr. DeLong: Thanks for writing. I'll respond briefly and welcome the chance to chat with you further, if you wish. 1/I not only googled "Furman and social security"...

Then how did you miss the first two substantive results in your search?

The Impact of The President’s Proposal On Social Security Solvency ... by Jason Furman, http://www.cbpp.org/5-10-05socsec.htm

Contrary To Claims By Its Supporters, The Congressional Budget ... by Jason Furman ... http://www.cbpp.org/4-29-05socsec.htm...

I don't understand how anyone can write in good faith that Jason Furman's views on Social Security were "similar in some ways to that proposed at the time by President Bush," or could in good faith write that "labor activists... successfully challenged the president's initiative" without also feeling under a moral obligation to note that it was Jason Furman's quantitative analyses of the Bush plan for CBPP that provided a lot of the most effective ammunition against the Bush Social Security plan.

What you wrote simply isn't fair. It also isn't true--unless you rely want to rely very, very heavily on ... weasel words...

You've left a lot of readers with a false impression of Furman's views on Social Security. You owe them a correction. And you owe yourself a correction as well.

Instead, you say:

I wish our anemic news business had more space to include more info. In the future I plan to include some of Furman's social security views. But that was not the point of this story...

To which the rest of us can only respond that a story that says that labor activists are worried that Jason Furman is a crypto-Bushie on Social Security but they are wrong because he was actually a harsh critic of Bush Social Security proposals back in 2005 informs the LA Times's readers, while a story that says that labor activists are worried that Jason Furman is a crypto-Bushie on Social Security and his views are indeed "similar" to Bush's proposals misinforms the LA Times's readers. And there is an important distinction here somewhere. ...

Brad adds a bit from Greg Anrig:

Greg Anrig on Tom Hamburger on Jason Furman, by BradDeLong: Apropos of LA Times reporter Tom Hamburger's gross mispresentation of Jason Furman:... Greg Anrig comments:

...What was special about Jason's work was his relentlessness in turning around pointed analysis with fresh numbers every time new details came out about various plans, and all in nice user-friendly formats that the media could understand. Those kinds of skills are really huge assets for a campaign, as well as an administration. ... No sign of any climbdown on the part of the LA Times...

Why oh why can't we have a better press corps?

Paul Krugman also comes to Jason's defense:

Jason and the Obamanauts, by Paul Krugman: OK, this furor over Jason Furman’s appointment is silly, on two levels.

1. Furman is a very good guy, with a solid track record as a progressive. You can disagree with him about Walmart — and I do — but his heart is clearly with those who want more social justice and a stronger safety net.

2. He’s not, despite what the story says, Obama’s chief economic policy advisor — he’s the economic policy director, which is a process job: basically, he organizes other people to provide advice. Obviously there could be a real problem if the policy director steered the candidate away from progressive advice, but Furman is, as I said, a solid progressive, and well suited to the job of honest broker.

Maybe I’m wrong, but my sense is that Jason Furman has become a proxy target for some Obama supporters who, now that the Great Satanness has been defeated, are suddenly starting to have the queasy feeling that their hero might be a bit of a …. centrist. I’m tempted to say I told you so; in fact, I guess I just did. But that’s all in the past now.

Anyway, lay off Jason Furman, a good guy who will do his best to defeat a candidate who gets his economic advice from Phil Gramm.

As noted, Jason Furman's view on Wal-Mart have also been questioned.

For those who want to go beyond the very stylized characterizations of his position in the media, here's some material from a debate held by the Center for American Progress in November, 2005 on how Wal-Mart impacts wages, prices, etc., and the net effect on the welfare of low income households:

Video: [links don't work]
• Full transcript

Writings from panelists:
• Wal-Mart's Giant Sucking Sound, by Leo J. Hindery Jr.
• Wal-Mart and Job Quality – What Do We Know, and Should We Care?, Arindrajit Dube, PhD and Steve Wertheim
• Wal-Mart: A Progressive Success Story, by Jason Furman

At the risk of oversimplifying his views myself, here's a brief passage from the full transcript above:

JASON FURMAN: Thank you... There’s only a handful of decent studies that would pass anything resembling academic muster about Wal-Mart, and the author of one of those studies [Arin Dube] is sitting to my left and will talk to you next. I tried to take a look at a lot of the evidence and sort through it, and some of these are factual differences that I have, in terms of whether we really think that Wal-Mart pays more or less, but a lot of them are profound ones or interpretive differences, and I’ll talk about both of those. ...

The lower prices at Wal-Mart are staggering. They are eight to 40 percent lower than what people would pay elsewhere. The total annual savings in one recent study, and I’ll talk more about it in a moment, for consumers are $263 billion. That’s $2,300 for every household in America. They’re very few public policies that I’ve advocated in my life that would make as big a difference as that.

Compare that to estimates of wage suppression by Wal-Mart, and I’m going to talk about these estimates also in a little bit more detail in a moment. Arin’s written a previous paper finding that that was $5 billion a year in lower wages due to Wal-Mart. $5 billion, $263 billion – it’s just an enormous differential. Because of that I called my paper, and also to be a little bit provocative maybe, "Wal-Mart: A Progressive Success Story," and part of it is the progressive benefits that Wal-Mart has delivered. ...

Wal-Mart, even if we didn’t do anything, would be a force where the good vastly outweighs the bad. But the good isn’t good enough and we need to do a lot more, and Wal-Mart should act in what it claims it’s interested in doing on behalf of its stakeholders and work with all of us to do things like expand Medicaid, food stamps, EITC, raise the minimum wage, which Wal-Mart has finally come around to supporting. ...

Here's a bit more from his paper:

There is little dispute that Wal-Mart’s price reductions have benefited the 120 million American workers employed outside of the retail sector. Plausible estimates of the magnitude of the savings from Wal-Mart are enormous – a total of $263 billion in 2004, or $2,329 per household. Even if you grant that Wal-Mart hurts workers in the retail sector – and the evidence for this is far from clear – the magnitude of any potential harm is small in comparison. ... But Wal-Mart, like other retailers and employers of less-skilled workers, does not pay enough for a family to live the dignified life Americans have come to expect and demand.

That is where a ... progressive success story comes in: the transformation of our social safety net from a support for the indigent to a system to that makes work pay. In the 1990s, President Clinton fought for expansions in support for low-income workers, including a more generous Earned Income Tax Credit (EITC) and efforts to ensure that children did not lose their Medicaid if their parents took a low-paid job. The bulk of the benefits of these expansions go to the workers that receive them, not to the corporations that employ them. Attempts to limit the spread of Wal-Mart and similar “big box” stores do not just limit the benefits of lower prices to moderate-income consumers, they also limit the job opportunities that Wal-Mart and other retailers provide. More puzzling is that some progressives have described Medicaid, food stamps, the EITC, and public housing assistance as “corporate welfare.” The right response to Wal-Mart is not to scale back these programs but to expand them in order to fulfill the goal of making work pay.

If Wal-Mart were committed to the welfare of its more than 1.3 million “associates,” as it calls its workers, then it would push to expand these public programs. Instead, Wal-Mart and the Walton family have generally worked against the progressive issues that would benefit its employees, including funding campaigns advocating the repeal of the estate tax. Recently, Wal-Mart has come around to endorsing a higher minimum wage, but this limited step is outweighed by its consistent funding for attempts to roll back progressive priorities that would benefit its workers. ...

Thus, how you see Jason's views depends, in part, on how you view changes in the Clinton era such as welfare reform and expansion of the EITC. He sees Wal-Mart, in conjunction with these programs, as providing entry level jobs and a way to lift workers out of poverty and off the welfare roles, and he would like to see Wal-Mart recognize its role in this area and provide more support for programs that aid the typical Wal-Mart worker. But others see the jobs and associated low wages (with few benefits) at Wal-Mart from different perspectives, e.g. as the outcome of an unfair labor negotiation rather than an opportunity for workers to enter the labor force.

[Also: Link to Arin Dube's latest paper on this topic.]

Comments

[Winslow R.]

Krugman and Delong jocking for position in a new administration?

James Galbraith already has a headstart, sorry fellows....

"It’s not often that I get my hopes up about a potential volte-face in the way we talk and think about economics at the policy and political level but this is by far the best news I’ve heard in a long long time. It seems that our very own Jamie Galbraith, scion of John Kenneth Galbraith and keynote speaker for the PEF at last year’s Canadian Economics Association (and participant at this year’s inaugural PEF-Galbraith prize) has been named as one of Barack Obama’s economic advisors.

What does this mean? It means, as Warren Mosler points out, that we may end up with a president who is at least exposed to some unconventional economic ideas, including the following (cribbed, pared and adapted from Mosler’s list — see link above):

the criticism of Bush leaving the debt to our children is absurd (just as it was in the early 1990s debate in Canada);

there is no operational risk of social security ‘running out of money’ (not directly relevant to the Canadian context but still worth knowing when reading about the impending “social security crisis.”)

the Fed (and the Bank of Canada) is about price, and not quantity;

that loans create deposits and reserves (key heterodox proposition, i.e., endogenous money);

that savings is not needed to have funding for investment (see above);

that advantage pension and retirement systems and programs reduce demand and cause the need for the government to run deficits to add that demand back (key Keynesian proposition);

the Saudis (and maybe Russians) are setting the price of crude. This is causing a cost push ‘inflation’ that is punishing working people disproportionately (Mosler has written about this, and the influence of speculators on commodity prices, extensively);

that inequality is a serious societal ill (my addition — see Galbraith’s work hosted at the University of Texas at Austin);

biofuel policy is converting the world’s food supply to fuel and starving millions to death (a small exaggeration to my thinking but very important point nonetheless);

the others on the Obama economic adviser list either don’t know, pretend to not know, or have long forgotten all the above (too true…see below); and

Obama’s vision can only accidentally be achieved with his current economic rhetoric (this follows from the above). "

http://www.progressive-economics.ca/2008/06/11/obama-galbraith-hope/

[hari]

From a policy perspective, the q's is whether the *glass is half-full* or *half-empty* when discussions render advisers to role of decison-makers?

I've argued elsewhere (today) BO says he's a *practical man* when it comes to making decisions on policy. Does it mean, he's a *centrist* from a policy perspective, as Paul claims?

I guess that's the way I read him (right now) before we can get some track record on him and his basic decision-making approach on social policy, for example.

[hari]

Greq Manqiw has claimed on his blog...his former student has been designated as director of economic policy by BO.

[Bruce Wilder]

PK: "Maybe I’m wrong, but my sense is that Jason Furman has become a proxy target for some Obama supporters who, now that the Great Satanness has been defeated, are suddenly starting to have the queasy feeling that their hero might be a bit of a …. centrist. I’m tempted to say I told you so; in fact, I guess I just did. But that’s all in the past now."

Some habits die hard, I guess.

Does this passage imply the Krugman thought the Queen of the DLC and former Wal-Mart board member is not also a "centrist" on economic policy? Because I don't know anyone, who thinks Obama is the reincarnation of Henry Wallace. Nor can I think of any good reason to think Clinton is generally to Obama's left on economic policy issues. So, I really don't see what superior insight Krugman thinks he has, or had.

Per usual, Krugman passes on a chance to make the case that the news Media is broken and in need of radical reform and restructuring, to make some pointless and wrong-headed remark about Obama.

[anne]

http://www.cbpp.org/5-10-05socsec.htm

July 22, 2005

In contrast, a traditional Social Security solvency plan that includes a balanced mix of benefit reductions and new revenues, as the 1983 Social Security legislation did, and that does not feature private accounts would begin to reduce the debt in its first decade and would continue to do so thereafter. The plan designed by [Peter] Diamond and [Peter] Orszag would have that effect. Under such a course, the amount of debt reduction by 2050 would be substantial.

-- Jason Furman

[anne]

http://www.americanprogress.org/kf/walmart_progressive.pdf

November 28, 2005

Wal-Mart, even if we didn’t do anything, would be a force where the good vastly outweighs the bad. But the good isn’t good enough and we need to do a lot more, and Wal-Mart should act in what it claims it’s interested in doing on behalf of its stakeholders and work with all of us to do things like expand Medicaid, food stamps, EITC, raise the minimum wage, which Wal-Mart has finally come around to supporting.

-- Jason Furman

[ken melvin]

All that cheap crap sold at Wal-Mart is made in China by Chinese labor and that amounts to much more than a mere $5billion in lost wages to merican workers; more than $260billion.

[jamzo]

when obamma announces a person has joined his campaign or his administration the GOP and its surrogates will attack by trying to define that person in ways that undermine obamma's persona

get used to it

[robertdfeinman]

The Walmart Watch web site has their own take on the topic. (It is sponsored by SEIU which has it's own problems over the coziness of Andy Stern and Walmart's CEO Lee Scott.)

I'll only comment on one myth that floats around: Walmart provides a stepping stone for people entering the workforce. The studies (yes there are some) show this just isn't true. Many Walmart workers are there for a long time and don't even get wage increases now that Walmart has permanently capped all their wage brackets (except for executives).

The problem with Furman is his connection to the Hamilton Project. You either think this is a good thing and see it as "progressive" or you see it has a type of realpolitik designed to preserve the status quo and keep capitalism humming (stumbling?) along.

The wide-eyed see more progressivity in Obama than his record or statements have shown so far. This is always true, each generation finds its "savior" and then finds out, later, that he is actually a practical politician.

I doubt that any president could make fundamental changes to the current economic system, the forces opposing change are just too strong. This doesn't mean that there can't be some changes - marginal tax rates, EITC or similar, corporate governance and oversight, etc.

A "liberal" (not progressive) president may also be able to do things in domestic policy areas which affect the disadvantaged more than presently. No Child Left Behind is up for renewal, the faith-based sex education program is as well, SCHIP is stuck and the Medicare drug plan is a failure. There are lots of other similar areas.

People like Furman are sand in the gears of progress, not oil. Their hearts may be in the right place (who can tell?), but they have bought into the present system and lack imagination.

Change in the US only comes as a response to disaster. Even FDR had a hard slog getting legislation through at the depths of the depression. His frustration with the Supreme Court is legendary. Why should it be any easier now when most people think they are doing well enough?

[Bruce Webb]

Winslow R.

Jamie Galbraith came relatively late to the Obama campaign. He was actively organizing 'Economists for Edwards' when Edwards pulled the plug whereupon he and the group of economists he was organizing all pivoted and went for Obama. As far as I can tell Austan Goolsbee is still the number one guy on the team. Whether Galbraith ends up in a top position of just ends up as an outside advisor is a good question, but Obama's core team of Goolsbee, Liebman and Cutler seem firmly centrist.

Wilder

There is indeed some question about where Obama's core position lies ideologically relative to Hillary. There is no question at all that on the social/economic issues of Social Security and universal health coverage that he made a determined and deliberate attempt to outflank her to the right, if perhaps not going entirely to a centrist position. Apologists for Obama 'explain' that he is clearly and openly against Social Security 'privatization' without defining the term. Because you can make a perfectly plausible claim that plans like Posen and Obama advisor Liebman's LMS Plan are not privatization at all even as they gut the social democratic underpinnings of Social Security in their drive to substitute PRAs (Personal Retirement Accounts) for the group insurance model of today.

As for Furman the quote given by Anne shows a guy hell bent on reducing societies obligations to the elderly in the name of I don't know what. The implicit notion that retirees are a dead weight drag on society and the economy is so wrong headed that you don't know what to do. What the hell happened to 'Honor thy father and thy mother'? Talk of reducing 'cost' and 'debt' in retirement security starts edging over towards 'throw Momma from the train' territory.

[anne]

There is a simple but pernicious problem, a little of which is shown here. A reporter for the Los Angeles Times records a memo being circulated criticizing stances of a particular presidential adviser. The reporting seems fair, though possibly the memo is overly critical. No matter, immediately there is a call for the reporter to be dismissed. Now dismissing a person is a serious matter, a fearsome matter. I should not like to be fired, I should hesitate dozens of times before asking a dismissal especially so because I am in no possible danger of dismissal.

We have though an atmosphere that supposed progressives are methodically creating of a McCarthy-like attacks and fear of retribution.

[anne]

Supposed progressives have been writing and speaking as McCarthy-like thugs for the purpose becoming politically dominant. I find this especially worrisome, for the tactics will trap the attackers even if successful in policies that are that are "regressive." Then, too, these are not the sort of activists who were for peace when being for war seemed all the rage. These are not rights advocates, when rights are not the rage. These are not Roosevelt progressives; progressives as either Roosevelt. These are power wranglers, and principle is a mere mask to be worn when necessary. Why else the continual bullying?

Well, I have learned to recognize the masks though that took some doing.

[anne]

Jason Furman:

"Wal-Mart, even if we didn’t do anything, would be a force where the good vastly outweighs the bad. But the good isn’t good enough and we need to do a lot more, and Wal-Mart should act in what it claims it’s interested in doing on behalf of its stakeholders and work with all of us to do things like expand Medicaid, food stamps, EITC, raise the minimum wage, which Wal-Mart has finally come around to supporting."

Possibly more needs to be written, possibly I fail to understand, but I find a thinker who is telling us that fierce treatment of workers in the workplace is fine as long as the fierceness is covered by Medicaid and food stamps. Huh???

Should working hard for Wal-Mart mean the government should support a worker for not properly treated by Wal-Mart? What am I missing?

[anne]

Bruce Webb:

"As for Furman the quote given by Anne shows a guy hell bent on reducing societies obligations to the elderly in the name of I don't know what."

Whether Social Security is made partially private, as in Sweden, does not worry me here. What worries me is an adviser who finds cutting benefits and raising Social Security taxes acceptable. I think benefits should be increased, actually. But, beyond what I think, what precisely does the adviser think and the candidate? Being concerned is fair.

[Barkley Rosser]

Hmmm, a lot of issues here.

I am not going to defend Furman on Wal-Mart. Clearly he is mostly a "centrist," like some other Obama advisers, as, of course were virtually all of Hillary's economic advisers. Indeed, he had a lot of experience in the former Clinton administration.

On social security he has been quoted as describing the likely outcome of the Diamond-Orszag proposal. That is an accurate description. It is not the same as saying he approves of it. I do not know what his bottom line position is or will be.

I do not approve of firing Hamburger for his bad reporting, but it was definitely bad reporting. Furman has strongly opposed privatization and did play a very important role in blocking the Bush proposals on social security. One place he did that was on the now-defunct blog, Maxspeak, run by Max Sawicky, where Dean Baker was co-blogging in 2005 (and people like Bruce Webb and I were hanging out making a lot of noise). I think it is accurate that Brad Delong picked up a lot of the discussion from there that he reproduced and that then got transmitted to Krugman, the New York Times, and more broadly.

The only issue I see Hillary as clearly more progressive than Obama on is health care. On social security she supported a bipartisan commission, like the one in 1983 that proposed legislation that is now being denounced by some here when it was described by Jason Furman.

Regarding Obama and his advisers, it will be interesting to see how things go, especially on social security. He has so far supported only a "doughnut" raising of the income cap for taxation, no future benefit cuts, despite having Jeff Liebman listed as an adviser. If Liebman, and maybe Furman, support future benefit cuts, there are clearly some around who will resist this, notably Galbraith and Jared Bernstein.

I will also note that the description of everybody in the Economists for Edwards group "pivoting" to support Obama following Galbraith is not accurate. Some, such as Robert Pollin, leader of the Living Wage Movement, chose to stay on the sidelines and not endorse anybody. Many did follow Galbraith to support Obama (me among them). However, none moved to endorse Hillary, none.

[anne]

http://delong.typepad.com/sdj/2008/06/why-oh-why-cant.html

June 11, 2008

Why Oh Why Can't We Have a Better Press Corps? (Tom Hamburger of the Los Angeles Times Edition)

To: Tom Hamburger
From: Brad DeLong
About: Your Needed Change of Career...

[daveNYC]

Whether Social Security is made partially private, as in Sweden, does not worry me here.

Camel, nose, tent. Cutting benefits and raising taxes might not be an ideal solution, but it is a solution. Allowing private accounts doesn't solve a thing.

[anne]

http://newsweek.washingtonpost.com/onfaith/sally_quinn/2008/06/retreat_hillary.html

June 10, 2008

Retreat, Hillary
By Sally Quinn - Washington Post

Now would be the perfect time for her to find herself, to decide what she really wants. Give up the roar of the crowds, the banners and the balloons, the marching bands, the begging for autographs. Give up the naked ambition, the lust for power. Is it possible that she wants those things because she thinks she should?

The only way for her to gather this kind of insight would be for her to go away for awhile. Be alone. Be silent. Be with yourself. There is a wonderful retreat called Bhavana Society in West Virginia that would be the perfect place. Its founder, Bhante Gunaratana, talks in his book "Mindfulness" about the power of concentration or tranquility when one's mind is brought to rest and "a deep calm pervades the body". "The meditator focuses his or her mind on a certain item, such as a prayer, a chant, a candle flame, or a religious image, and excludes all other thoughts and perceptions from his or her consciousness." Self awareness is the goal. Hillary talks quite openly about her faith and how it comforts her. This would be a perfect time for her to explore her faith, to delve more deeply into it.

[There is no stopping....]

[anne]

Ah, Sweden guaranteed benefits and added private accounts. I am making no suggestion, only the point that private accounts can be set up in a way that can only increase benefits. Cutting benefits and raising payroll taxes, would be a further and dramatic middle class burden at a time when income and wealth inequality are growing, let alone the burden to the poorer, and would almost surely undermine support for Social Security.

[Icarus]

I find it refreshing that someone like Obama, who is the current persona con grata in the 'hero' category, can as well display balance.

His advisors are 'centrist' because he knows the positions of the uber-progressives would be his downfall, as they would be for Edwards.

Just giving money to people for every act of basic life would be idiotic. Luckily, in our slowly neo-liberalizing world, the positions of the 2nd international grow more and more unpalatable to the masses.

We should as well reframe our picture of Walmart. It is seen as a model of capitalism running rampant, uber-globalization, a race to the bottom.

But, perhaps something else is going on. Walmart creates an alternative economy, not unlike the alternative economy in manhattan, where people make 2x salary, have 3x costs, and work 2x.
It still thrives.

Walmart is close to the reverse. It may pay only $50-$100/day, for most people...but, it provides a model where you can buy dinner for a few dollars.
A whole chicken, a can of green beans, etc...it simply costs very little.
An alternative economy.

This almost resembles a co-op to me. The profits are pennies on the dollar, and product cost is kept as low as possible by squeezing the testicles of all suppliers. Nice.

And, the profits extracted to create this co-op is quite fair. $300 billion a year leads to $10 billion profit. I don't think that alarms too many.
As well, the Waltons probably extracted $100 billion or so.

For most of us, this is incredibly efficient. If we asked a central govt to set up a work-fare program, which offered skills to the unskilled, and provided them for food/shelter in exchange for some labor...could they be so efficient?

I think not. The govt couldn't manage suppliers as well, costs would soar, and people would work lazily.

Capitalism changes that...the pressure to perform maintains this model, and thousands of people who don't really blow away the job market with their skills, get an opportunity for labour.
Not too shabby.

People will complain that Walmart doesn't pay a wage sufficient to raise a family. But, I say that's not their problem. You don't have an inherent right to raise a family. If you choose to have children, you better be prepared. Walmart is not usually skilled work, and pays just enough for 1 person to live. That's the offering...you need not take it.

More importantly, it is not an employer's responsibility to manage your life.

[daveNYC]

Ah, Sweden guaranteed benefits and added private accounts. I am making no suggestion, only the point that private accounts can be set up in a way that can only increase benefits.

I don't particularly like using countries like Sweden as examples. Their social safety net and the taxes necessary to pay for them are so different from the US that they might as well be on Mars. Increasing benefits is probably much easier if you've got a population that is OK with 70% (or whatever) tax rates, and is supportive of government programs. Unfortunately, a lot of Americans have bought into the idea that government is the problem and taxes are the same as theft.

[Bruce Webb]

Barkley, thanks for the clarification of Economists for Obama, the last I heard was in those final stages when Galbraith reported back that almost everyone had signed the letter, given Obama's centrist advisors I am not surprised that some of the more progressive economists held back.
__________________

But I want to address a point of substance raised by daveNYC. Due to the rather peculiar nature of Social Security finance simply raising taxes or cutting benefits absent other changes is not in fact a solution to anything. In fact either may make the long term outlook even worse. I discussed this rather odd result the other day at AB under The Paradox of Benefits most substantively in comments.

The problem is one of cash flow vs account balances. Currently Social Security is running strong surpluses and on a day to day basis doesn't need more money and more importantly has no place to stash it. The Social Security Trust Funds are not investment vehicles, they are instead Reserve Accounts. And just like a bank's reserves those assets are parked in an essentially unproductive instrument. Special Treasuries have the virtues of being safe and predictable but they do not in themselves actually contribute to future productivity. Whether the actual Social Security cash surplus is managed in a way that makes future redemption of those instruments easier or not necessary is something totally out of control of the Social Security Administration, because once those extra cash dollars hit the General Fund they are gone.

Now it would be nice to think that increasing cash flow through Social Security to the General Fund would have the result of lowering other borrowing or perhaps be invested in ways that added to future productivity and hence future wage revenues for Social Security. The historical record has not been kind here, the immediate response of the Gingrich camp when large Social Security surpluses rolled in starting in the mid to late nineties was to demand tax cuts on capital, cuts that were subsequently pushed through under Bush.

Absent an actual lock box in the form of a fund invested in outside assets all a tax increase does is increase future debt in the form of extra accrued interest. For this strategy to be effective you would need to have some sort of control on Congress, and for that matter the Presidency, that does not exist under our current system.

[Winslow R.]

Icarus wrote: "...but, it provides a model where you can buy dinner for a few dollars.
A whole chicken, a can of green beans, etc...it simply costs very little.
An alternative economy."

Not an original thought.

"In today's Two Americas,"....
http://www.johnedwards.com/issues/

I go back to choices and how government provided access determines people's quantity and quality of choices,.....

...like to raise children. Do the people that work at Walmart have a sufficient quantity and quality of choices to match to their abilities and thereby optimize their contribution to society?

Why not find out if Wal Mart is really the optimal way to employ these people?

Why wait for global wage parity, to shut WalMart down, to find out?

Yes WalMart with
$92 billion gross profit and 2.1 million employees

seems small compared to

Goldman's Sachs
$87 billion gross profit created by 36 thousand employees.

http://finance.yahoo.com/q/ks?s=GS
http://finance.yahoo.com/q/pr?s=GS

but both of these companies enjoy a carve out in the fiscal/monetary control system that regulates our economy. Ever wonder why we carve it up this way?

[David in NY]

"One place he did that was on the now-defunct blog, Maxspeak, run by Max Sawicky, where Dean Baker was co-blogging in 2005 (and people like Bruce Webb and I were hanging out making a lot of noise)."

I must say, I miss Max's voice very much.

I'd like to hear from Obama (and Furman, et al.) what was often said back in 2005: there may be nothing wrong at all with Social Security, the projections are based on unduly pessimistic premises, so let's wait and see for a while. I think I saw a quote from Furman saying that there's a problem and the sooner we do something, the better. That's not how I was seeing it, so I am skeptical.

[James Killus]

While I quite agree with Icarus' comment that it is not an employer's responsibility to manage its employees' lives, I wonder if he would also agree that it is not our responsibility to argue that employers should not be regulated, to say nothing of the fact that I really don't give a damn about protecting the Waltons from estate taxes. Quite the opposite, in fact. I think a 95% tax on every Walton heir is entirely reasonable-- from my point of view, of course.

[robertdfeinman]

James Killus:

You have adopted the libertarian framing whether you meant to or not: "it is not an employer's responsibility to manage its employees' lives..."

Seeing business and labor as two separate things (along with "consumers") is only one way to look at the world. There are other models, including co-ops, labor participation in management, and government-mandated employer responsibilities. Taking your statement literally one could say:
"It is not an employer's responsibility to provide a safe working environment" or "it is not an employer's responsibility to provide tools".

Other countries try to create a commonality of goals between business, labor and the "public". After all each of us generally falls into all three categories. With the spread of 401K and other personal investments we are all "capitalists" now.

I think we can do better than a Marxist analysis - we have 100+ years of experience that he didn't know about in managing capitalism.

[Ken Houghton]

Obama's not a liberal. Etonne-moi! (I'll join Krugman in saying "I told you so," though also noting that it doesn't really matter much to the single-issue single-speech Obama supporters.)

Attacking Furman for WMT would be like attacking Krugman for MSFT: it's a fair shot, but not significant in the overall scope of their work.

[Denis Drew]

WalMart skins workers for $5 billion in wages -- but benefits consumers to tune of $263 billion? Mmm; doesn't take a Ph.D. to figure out that means WalMart could pay out those $5 billion in wages AND $258 BILLION WOULD STILL BE LEFT TO BENEFIT CONSUMERS. :-)

I wonder if Furman even thought of that (cab driver cynic me).

In supposedly socialist Europe they don't have an EITC (as far as I know) -- because in Europe the PAY people enough to live (or should I say: in Europe, wide awake labor makes sure it gets paid enough to live). I don't know why economists here -- well meaning progressives -- always act as if we were in the middle of the Great Depression or something and see things like the EITC as a permanent -- even normal -- way for Americans in the lower wage levels to get by. Add 50% to LBJ's 10/hr minimum wage level -- 40 years and double the average income later -- and we would have a normal lower wage way to live.

[anne]

Denis Drew:

"In supposedly socialist Europe they don't have an EITC (as far as I know) -- because in Europe the PAY people enough to live (or should I say: in Europe, wide awake labor makes sure it gets paid enough to live). I don't know why economists here -- well meaning progressives -- always act as if we were in the middle of the Great Depression or something and see things like the EITC as a permanent -- even normal -- way for Americans in the lower wage levels to get by."

Perfect.

[anne]

Ken Houghton:

"Obama's not a liberal. Etonne-moi!"

Soyez muette pour moi, Idole contemplative.

[anne]

http://www.brookings.edu/papers/2005/04saving_diamond.aspx

April, 2005

Saving Social Security: Retirement, U.S. Politics, Saving, U.S. Economy, Politics
By Peter A. Diamond and Peter R. Orszag

Since Painful Choices Must Be Made, a Key Question Is, Which Ones?

The Social Security deficit can be eliminated only through different combinations of politically painful choices: tax increases and benefit reductions. Unfortunately, too many analysts and politicians have ignored this reality, responding to the painful alternatives by embracing "free lunch" approaches.

http://www.cbpp.org/5-10-05socsec.htm

July 22, 2005

In contrast, a traditional Social Security solvency plan that includes a balanced mix of benefit reductions and new revenues, as the 1983 Social Security legislation did, and that does not feature private accounts would begin to reduce the debt in its first decade and would continue to do so thereafter. The plan designed by [Peter] Diamond and [Peter] Orszag would have that effect. Under such a course, the amount of debt reduction by 2050 would be substantial.

-- Jason Furman

[My hero....]

[anne]

Brookings, the home of our non-liberal liberals....

[anne]

http://www.cbpp.org/5-10-05socsec.htm

By contrast, under traditional reform plans * like that proposed by economists Peter Diamond and Peter Orszag, the debt would be reduced immediately, and by 2050, the amount of debt reduction would be substantial.

-- Jason Furman

* Traditional reform plans = tax increases and benefit reductions or killing Social Security

[Icarus]

Killus/robertfeinman...

Of course it's reasonable to expect an employer to provide a safe workplace environment. The tasks required of 'work' should be reasonably safe, no doubt.

But, the tasks you choose to engage in after work is your private time, your personal decisions, and don't involve your employer.

The question is, how does Walmart expect its employees to afford a life with children? It doesnt. Simple. It just doesn't care. Walmart does not instruct people on how to live...it simply offers entry level wages for relatively low skilled work, and passes those cost savings onto the community it serves.
This is a service, in many people's eyes. And, they pay enough for that person to live...if they didn't, they wouldnt attract so many employees.

Someone mistakingly wrote that Walmart made $92 billion in profits...no. They make around 3% in reported profits...amounts to a number closer to $10 billion.

As for regulation, of course. All industry requires regulation. The regulatory and legal environment we set up allows for industries to flourish, and for our collective standard of living to be good.
But, that does not mean market wages don't apply. You can't just ask Walmart to add $5 billion in wages...their employees don't deserve it.

[Paul G. Brown]

The problem with Wal*Mart is not contained by the cost/benefit analysis Furman performs. Seen by his lights, $265 Billion of benefit is a LOT more than $5 Billion in lost wages. (And don't confuse the trade issue with the Wal*Mart question; those billions of dollars in Manufacturing job wages could have gone to China whether or not it was Ma & Pa retail outfits selling them.)

The problem with Wal*Mart is it's anti-worker, anti-competitive business practices, and the way these 'barely legal' means gave them even more of a competitive edge than their supply and inventory management innovations would have.

[anne]

Paul G. Brown:

"The problem with Wal*Mart is it's anti-worker, anti-competitive business practices, and the way these 'barely legal' means gave them even more of a competitive edge than their supply and inventory management innovations would have."

Right.

[Winslow R.]

Icarus wrote: "Someone mistakingly wrote that Walmart made $92 billion in profits...no. They make around 3% in reported profits...amounts to a number closer to $10 billion."

That would be me...yes. You're talking 'net income' which is about 13.3 billion.

I linked to GS and thought people could figure out how to get WMT numbers. Here's the link that shows
Walmart's numbers.

Employees 2.1 million
http://finance.yahoo.com/q/pr?s=WMT
Gross Profit $92.28 billion
http://finance.yahoo.com/q/ks?s=WMT

[Icarus]

But Winslow,

We should not just look at Gross Profit...there are other costs of doing business.

[Winslow R.]

Right, Goldman Sachs has to pay all those Christmas bonuses.

[Icarus]

Paul...

Let's explore your statement of Walmart being an "anti-worker" and "anti-competitive" busines.

Yes, it is anti-worker in that it harshly punishes any unionizing activities. No doubt. But, it is 'pro-worker' in a way too...it employs people with little in terms of skill.

And, 'anti-competitive'...I'm not sure. They force suppliers to compete at levels they were never used to. Walmart competes on product costs in ways we've rarely seen at this scale. Walmart showed how Information Systems is a competitive asset (to the dismay of Sears and Kmart).

Walmart may be the pinnacle of competitiveness.

[Winslow R.]

'Walmart may be the pinnacle of competitiveness'

NEW YORK (CNN/Money) - Over $1 billion in government subsidies have gone into transforming discounter Wal-Mart Stores from a regional discount store operator into the world's largest retailer, according to a report Monday from Good Jobs First, a Washington-based subsidy watchdog group.

http://money.cnn.com/2004/05/24/news/fortune500/walmart_subsidies/

[Icarus]

$1 billion is nothing...they employ 2 million people, and pay countless millions in taxes each month.

We waste $1 billion daily in an illegal war which should get our executive branch tried at Nuremburg.

[Winslow R.]

"$1 billion is nothing..."

Really? I'll let my wife know :)

You probably see Walmart is some sort of animal operating on its own in the jungle of the 'free' market. In reality, Walmart is operating in a regulated market where they are able to make the rules that help themselves compete.

When an entity gets as big as Walmart has grown, I start asking not how did they reach the pinnacle of competitiveness but rather should they retain the near monopoly on their carve out? What sort of imbalances have been created in order for Walmart to thrive? Is Walmart's organization truly optimal or just very competitive?

[Barkley Rosser]

Bruce W.

My preference regarding social security remains the same as yours: do nothing, wait and see.

If somebody insists on doing something, raising fica is the least bad thing, which is currently Obama's official position. Cutting benefits is not good, and privatization is a ruse, although as anne accurately notes it is not a problem if it is done the Swedish way, as a complete add-on. But, politically that will never fly in the US, unfortunately.

I dislike repeating obvious points, but that Furman accurately describes Diamond-Orszag does not mean he supports it, and the most recent leading rival in the Dems to Obama had advisers of the same ilk as Furman et al. Nobody as progressive as Galbraith or Bernstein, none not even close. I would challenge anybody (we know who) to come up with economic advisers to the last challenger to Obama who could be called progressive at all.

OTOH, Icarus, in fact Obama has a range of advisers, some more orthodox neoclassical centrist, like Furman, some into behavioral economics, like Goolsbee, and some more distinctly progressive and heterodox in their views, such as the Post Keynesian Galbraith, and Jared Bernstein of the progressive EPI, where both Max Sawicky and Dean Baker used to work. The former rivals advisers were all neoclassical centrists of the most orthodox and boring type.

I also note that Obama has been rated the "most liberal" member of the US Senate, which the McCain camp is going to make us hear a lot about. But, what I see with him is a very intelligent guy interested in a range of views. So getting all wanked over this adviser or that is just silly.

[Icarus]

Winslow,

The "free market" is a myth. It may not even make sense. What there is, is competition, within regulated markets.

The state has thrown $1 billion on many worthless pork projects. And, I'd like to see how this money is even counted...are they tax credits? Incentives for capital investment? State reimbursements for some activity?

Either way, $1 billion doesn't amount to much more than 1 days revenue for this entity. This isn't really all that important.

What is more important is the politics of paying low wages. I can understand how some find this oppressive. People making almost minimum wage, and seemingly trapped in that state, can appear problematic.

I just think that's what they deserve, given their skills.

[Icarus]

Barkley,

So, the question kind of is...given that Obama has developed such a reputation for being leftist...is he including more centrist thought in his campaign to appear balanced? Or, has he modified his thought?

[Andrew]

"Mattera and his team found proof of subsidies at just 91 of the more than 4000 WalMart stores in the US, most of those built recently...The subsidies Mattera could pin down totaled $1 billion dollars and change.

That $1 billion figure is surely far less than the actual amount of money WalMart took...WalMart spokesman John Bisio let it slip that 'it is common' for WalMart to seek subsidies for its new stores and that ti doe so 'in about one-third of all projects'. That suggests that 14 times more WalMarts received subsidies than the Good Jobs First study uncovered."

- Free Lunch, David Johnson

Icarus says- [they] $1 billion is nothing...they employ 2 million people, and pay countless millions in taxes each month.

Which would have been payed regardless. Indeed, were WalMart not there offering lower prices, it is very possible more taxes would have been paid because WalMart generally offers staple goods.
And ask a former Independent Grocers of America employee if the wages and benefits they receive at WalMart are better than their previous employment.

[Winslow R.]

Icarus wrote: "People making almost minimum wage, and seemingly trapped in that state, can appear problematic.

I just think that's what they deserve, given their skills."

So if I could find a highly trained employee (high school educated - 12 years worth) who works for minimum wage at Walmart, you'd change your mind? Or perhaps I need to find college educated Walmart employees making minimum wage?

Would there then be a problem with lack of opportunity in America?

What skill level do people, in your book, need before they deserve the opportunity to make a sufficient living to support a family?

[Icarus]

Winslow,

I wouldn't call 'high school educated' high skilled.

And, regarding the lack of opportunity in the US, I would counter with the countless thousands who emmigrate here, and find jobs in technology, small businesses, motels/hotels, construction, and countless other fields.

What the US doesn't provide is a guarantee for the perpetually lazy, or remedial. If you can't compete, you may get tossed out like yesterday's lettuce. It is harsh, no doubt...but so is the violent imperialism which constructed the nation state we call the US.

Winslow...find me a competent, college educated, non-drug infested, somehwhat rational individual, and I doubt she'd be working for minimum wage at walmart.

If they are, it's not a sign of a lack of opportunity, it's a sign of poor strategy and execution.

[mik]

don't confuse the trade issue with the Wal*Mart question; those billions of dollars in Manufacturing job wages could have gone to China whether or not it was Ma & Pa retail outfits selling them.

Only partially correct.
Unless your Ma&Pa business sells commodity-like widely known and available products, you find that it is extremely difficult for a small guy to hook with Chinese manufacturers and make them produce a product you have designed/specified.

On another hand Wal*Mart will design/specify product, will find Chinese manufacturers, will teach them how to produce their products, will help them with manufacturing problems, will fully take care for marketing research, advertising and logistics. All the while providing huge market and allowing Chinese to scale up their manfaturing.

In other words, Wal*Mart in effect is a partner in Chinese manufacturing development. Without Wal*Mart Chinese manufacturing will be noticably weaker and there would have been no huge distribution pipe into US markets.

So, yes, Wal*Mart by its mere presence and operations caused losses of tens or hundreds thousands US jobs.

[BJ Feng]

"Unless your Ma&Pa business sells commodity-like widely known and available products, you find that it is extremely difficult for a small guy to hook with Chinese manufacturers and make them produce a product you have designed/specified."

That's incorrect, my parents were footwear importers before they retired. There are numerous shoe factories in China willing to make whatever shoe you can think of. The lowest quantity you can order and still be cost competitive is around 2400 pairs. Men's sneakers cost around $3.50 a pair, women's pumps $4.50 to the importer. The more you buy, the cheaper of course, but they'll be happy to make even just one pair, though the price would be so high it's just not done. They do make samples and will send a free sample of your design for regular customers. The same goes for clothing and the fashion industry. The biggest problem for mom and pop importers is that they don't have any brand name recognition and competition is tough. Nike can sell their shoes for $40 wholesale, but without that Swoosh, most Americans won't even buy the same shoe for $10 retail. Wholesale, the shoe is sold for $5.50, a $2 per pair profit margin.

I've visited one of these factories personally. A lot are in the countryside where wages are cheaper. You might think $4 a day is slave labor, but when you can get a good meal at a restaurant for $1, workers are able to build their own homes from scratch with their combined household wages.

So companies like Walmart also help poverty stricken rural workers in China in addition to all the savings it provides to Americans. You'll be hard pressed to find a single UN program that has done as much good for the world as Walmart.

[BJ Feng]

If I remember correctly, when Walmart opened up a Supercenter in Oakland(?), they received something like 5x the number of applications as jobs available. Clearly some people felt that Walmart was their best option, providing the highest wages and benefits they could find. Maybe you would never work at Walmart, but without WalMart, how many people would be in even greater poverty?

As for subsidies, they should be eliminated, but clearly many governments feel that WalMart creates so many positives for the community that the subsidies are worth it. I mean we are supposed to trust the decisions of these government workers to enhance and guide market forces, right? This is precisely the kind of intervention that you want governments to do isn't it? Stepping in and molding the outcome to benefit the "disadvantaged" who would otherwise be left with either no job, or a much worse one. You can't have it both ways.

[reason]

You'll be hard pressed to find a single UN program that has done as much good for the world as Walmart.
Who made the shoes before the chinese did? And who sold them before Walmart did. Yes there is some net benefit to some people, but the whole story is more complicated.

[The Ghost of Eugene Debs]

It’s kind of aggravating reading comments from so many very intelligent people criticizing Walmart’s behavior toward labor. If Walmart is so bad to their employees, why aren’t these smart people out in the streets organizing labor?

One thing you can say about the Asians and Europeans, when they feel slighted by those in power, they hit the streets. This sort of response takes organization. It just doesn’t bubble up from the bottom free-market style.

America’s unions were built on hard work and violent confrontation by smart, savvy and dedicated union organizers who actually gave a damn about workers and proved it daily in the streets and meeting halls. This is what brought us America’s golden age of labor. Now, with the utter destruction of American socialism and communism, all we hear are platitudes from highly-educated free marketers about how terrible Walmart has become and oh how sad it is that American unions are in decline and how tough it is to live on minimum wage. Instead of action in the streets, we have complaining on blogs. It seems as if the energy, commitment and dynamism necessary to reverse the worker’s plight died off with the last generation of true believers.

(Where are you Paine?)

All this talk of more regulation is just baloney. It’s nothing more than collegiate mind-games. You can’t regulate the sort of wealth that has been allowed to build up in this country. This wealth will always win the regulation game in the end. They will always own the politicians.

This kind of wealth has only one fear -- direct confrontation.

[Real Person from the Real World]

Icarus says:
"The question is, how does Walmart expect its employees to afford a life with children? It doesnt. Simple. It just doesn't care. Walmart does not instruct people on how to live...it simply offers entry level wages for relatively low skilled work, and passes those cost savings onto the community it serves."

There is a problem with this. If Walmart doesn't care about workers having families, who is it selling to? The well-to-do can buy anywhere, but the wal-mart sales niche is actually lower income families. If you don't pay your employees, how can they buy? How can they buy anything? Your thinking is too simplistic. We buy and sell to each other in a chain of relationships. If workers don't make money they cannot buy.

A while back, when people complained of wages here being leveled by globalization which raise wages over there, you made a comment to the effect that the poor overseas applaud that. The poor in the US are less deserving, I guess. Basically you hate the US.

There is a lot of talk about Walmart employing "low skilled" people, but there are plenty of high skilled people getting hit economically. I know a CPA who is losing her home, as she was a BA and QA in IT, and hasn't had enough contract employment in a year. So, say she goes to walmart, and lies about being over qualified to get a job. Think it doesn't happen? With the hatred you have in you, it may happen to you some day.

[robertdfeinman]

I'm getting discouraged. Every time Walmart comes up the pro-Walmart trolls appear with the same tired arguments. Then they hijack the discussion as people try to refute the inaccuracies again. It's not like the studies aren't available. Perhaps some kind soul should create a Walmart bookshelf.

Those who understand monopsony power over suppliers and local labor, monopoly power at the retail level in small towns, and how big companies can flout the law and just pay fines on the rare occasions when they are convicted could go to to this bibliography for the supporting data.

The trolls, of course, will never read anything. They know what they know and have no need for facts. If you are interested in the topic, try a visit to Walmart Watch or our group blog at The Writing on the Wal.

There is also Charles Fishman's book "The Walmart Effect".

I think this thread was supposed to be about Jason Furman and what he believes based upon some casual remarks about Walmart. I have no idea what he believes, but it is possible that he is as uninformed on the issue as most people and based his opinions on the relentless PR campaign that Walmart wages. Isn't that the point of PR to influence public opinion?

Just for the record 68 communities blocked new Walmart stores last year. If they are so great, why do you think this is?
(Trolls: Please don't bother to answer, it was a rhetorical question.)

[Winslow R.]

Icarus wrote: "Winslow...find me a competent, college educated, non-drug infested, somehwhat rational individual, and I doubt she'd be working for minimum wage at walmart. "

This is your 'minimum skill' level for those qualifying for the American Dream? I'd suppose you'd be in favor of government support in providing the opportunity to achieve this minimum skill level.

You are entitled to your view.

With less than 28% of the population, I'd think you'd have a difficult time coming up with informed political majority in favor of your minimum standard, but maybe not.

" According to new tables released on the Internet titled Educational Attainment in the United States: 2004, 85 percent of those age 25 or older reported they had completed at least high school and 28 percent had attained at least a bachelor’s degree — both record highs."

http://www.census.gov/Press-Release/www/releases/archives/education/004214.html

[BJ Feng]

Robertdfeinman, maybe YOU should do some reading, starting with this blog.

http://economistsview.typepad.com/economistsview/2008/01/
the-wal-mart-ef.html

"Given the terror that Wal-Mart is purported to inflict on communities, the fedgazette’s findings of the firm’s economic influence are almost mundane. Despite its kill-them-all reputation, Wal-Mart is not the threat that many fear, at least in terms of economic benchmarks commonly associated with healthy, growing communities.

For example, Wal-Mart is widely believed to destroy local firms and jobs and to have a dampening effect on wages. But fedgazette findings suggest the opposite: Firm growth, employment and total earnings were somewhat stronger in Wal-Mart counties and, in some cases, even in the retail sector. The research does suggest that retail earnings per job fell in virtually all counties studied. But they actually fell by less in Wal-Mart counties."

"In sum, fedgazette findings suggest that Wal-Mart has a slightly positive effect on counties where the retailer decides to set up shop. But the effects are small; one could call the results mostly a wash. As a result, maybe the most concrete—and surprising—conclusion is that Wal-Mart’s presence (or lack thereof) has little or no predictive power regarding the economic success or failure of a county."

Your studies are hardly the only ones on Walmsrt. Of course, you choose to ignore the ones that show positive effects, as evident by your comments on the study above. Now why would politicians refuse access to WalMart? Are they running for something? It's hard to see the effects of what would have been. That is politicians know that they'll never have to answer for the jobs that were never created when they deny access, it's too hard to see lost potential. And they can get an immediate benefit from people like you who dislike Walmart. Meanwhile, people will just pay higher prices and remain jobless as before, those are unlikely to vote against the politician because the status-quo is maintained. That's why so many counties have screwed their own residents.

[Bruce Wilder]

Ignoring the Wal-Mart melee, I thought David Brooks, of all people, had a good column today, that addresses how Obama rides his coalition.

Instead of clucking over an array of economic advisers, though, Brooks discusses how Obama has managed a two-horse team on education policy. The two, often-opposing camps in education policy is a division between those who emphasize the need for additional resources to do what we are already doing (what Brooks calls the "status quo camp") and those reformers, who want to change the structure of what we do and how we do it, emphasizing measurement and accountability.

Though Brooks doesn't intend to, he highlights the key to Obama's campaign: Obama affirms both positions, without resolving the contradictions between them. He doesn't resolve the contradictions, because he doesn't have to: McCain does not offer anything to either camp.

I think much the same is true among the economists. The Republicans, under Bush, have painted themselves into a corner, where they are just evil and empty and pointless. No progressive would support the Republicans, of course, but no principled conservative would, either. McCain's economic proposals for more insane tax cuts and larger deficits and more magical thinking has no appeal for any knowledgeable or rational person. (Greg Mankiw, former adviser to Bush, of course, supports McCain. Go figure.)

If America had a fully functional, rational politics, Jason Furman and Austan Goolsbee would be advising the Republican candidate, and Galbraith and Bernstein (and Max Sawicky!) would be advising the Democrat. And, natural moderates like myself would be scratching our heads, and mumbling, "Choices, choices . . . ???"

We don't have a fully functional, rational politics, in case you folks haven't noticed. We have Bush and McCain and the Republicans in Congress. The Republican Party is dominated by political and economic nutcases, who advocate, in essence, national bankruptcy as the path to prosperity.

So, all the sensible people are crowding into the Democratic Party, the conservative wing of which is being transformed fairly radically by the infusion of new people and activism.

The old Democratic conservatives -- the DLC, the Blue Dogs, and, yes, the Clintons -- could be a fairly noxious bunch, not least because they reached for power by allying themselves with Republicans, while dissing their fellow Democrats.

So, I can understand the anxiety surrounding the Obama campaign's big tent. It is not that I don't find the prominence of some of these conservatives in the Obama campaign somewhat troublesome and suspicious. Because I do.

But, for the moment, I prefer to hope that this electoral coalition can become a governing coalition, that conservative Democrats can learn to reach for power by allying themselves with progressive Democrats.

I look forward with guarded hope to an Obama administration and an overwhelmingly Democratic Congress, where Democrats compromise productively with each other in order to govern and legislate, reasonably, rationally and productively.

The right question to ask about Obama is not, which adviser is he "really with"? The question to ask, can he manage the coalition?

I wish there were enough, pure-of-heart progressives in this country to win an election, and too few plutocrats to stop them, but such is not the case. What we have, instead is a Democratic Party, whose support is swelled by conservative refugees from the corrupt and crazy Republican Party. I'll take what I can get, and be glad of it.

[Bruce Wilder]

I wish there were enough, pure-of-heart progressives in this country to win an election, and too few plutocrats to stop them, but such is not the case. What we have, instead is a Democratic Party, whose support is swelled by conservative refugees from the corrupt and crazy Republican Party.

A critical difference between Obama and Clinton -- maybe the critical difference, for those of us who like the Inside Baseball of politics -- is how the candidates manage the support from the Republican Wing of the Democratic Party.

Better Jason Furman doing a honest job as a coordinator than Mark Penn doing a Karl Rove impression.

Maybe, if the U.S. had a sane and rational politics, Jason Furman and Austan Goolsbee would be in the Republican Party, and Galbraith and Bernstein would be advising a Democratic candidate from the Democratic Wing of the Democratic Party. But, that's not the case. The Republican Party is the greedy fools leading the crazy fools, and the Democrats need the support of a lot of conservative independents.

I just hope Obama can manage his coalition in government. If we could get principled conservatives to ally with progressives, within the Democratic Party, and to govern the country cooperatively, rationally and sensibly, we could move forward quite a bit in a short time.

[anne]

Ah, I understand, while the trashing of Hillary Clinton and all who supported Clinton continues, the need, the real need is to make sure that Barack Obama becomes conservative enough for Republicans. Conservatives will save us all. Hooray.

[Bruce Webb]

The general problem with the Furman position on Social Security is one shared by much of the Center Left, they consider the problem to be one of debt rather than financing a service.

If you start from the position that holds that our biggest problem vis a vis Social Security is servicing the debt you end up with solutions that focus on benefit cuts and tax increases. Instead if you start from the position that identifies the ideal societal outcome for Social Security as balanced against such things as uninsured children then you end up with solutions that target the policy goal.

Nothing is sacred about the current schedule of future benefits but it is a good starting point. But instead we have fallen into a frame that assumes that reducing debt service is a goal in itself without actually examining what that means in dollar terms. Frankly most of the thinking on this is not data based, but instead is driven by a deliberately crafted narrative written by an ideological camp that has no particular concern for social welfare in general to say nothing of retirement security in particular.

It is amusing to see some of the leading lights of privatization explain earnestly why they are concerned about retirement security over the Infinite Future Horizon but don't object to cutting subsidies for heating oil for seniors today. The whole thing is crocodile tears special pleading to cover up their now 72 year crusade to destroy Social Security and by extension undermine the societal consensus that once existed and fueled the New Deal and the Great Society.

If you want to reduce the debt owed to Social Security in the future the somewhat paradoxical answer is to cut revenues in the present, that is to cut FICA rates and not increase them. That the long term answer to Social Security is less income in the short term sounds like the height of insanity, but that is the conclusion that the data of the last decade drives you to. Now for people who won't go so far as to support an actual cut in the rate there is another route, you could simply start investing current surpluses in something other than Special Treasuries and then reinvest any earnings. If you supplemented that by starting General Fund transfers into those outside assets to the total of accrued Interest you would freeze the Trust Fund in place. From there you just let inflation carry the ball, in real terms the cost of servicing the remaining debt drops every year. It would mean biting the bullet in the short run while lowering the obligation for all future generations.

Of course this plan would make it more difficult to push tax cuts.

The amounts of money we are talking about are not that huge in context, for example the combination of the War and the Stimulus package cost quite a bit more and it may be that there will never be the 'right' time to tackle this problem. But the way you pay down debt is to make a payment plan that reduces principal, and rather ironically the only way to make this happen is to divert resources away from the Trust Fund as it is currently configured.

Another session of counter-intuitive answers to simple questions.

[anne]

Obama foreign affairs advisers * are busily arguing about whether we should stay in Iraq indefinitely, not to mention Afghanistan. No problem though, there's a policy there somewhere and we will find what it is after it is.

* http://www.juancole.com/2008/06/enemy-combatant-law-bogus-obama.html

[anne]

No; the problem is needing to know what Obama thinks about Social Security and whether benefits are to be maintained or even increased, and what is planned for Social Security taxes which evidently are going to raised by raising the cap on payroll taxes.

[ken melvin]

30 years ago, across rural America, Brown Bros payed $8/hr and the shoes sold for $50/pr. Today, those shoes are made in China w/ $4/day $3/pr (see above) and sold for $70/pr.

[Barkley Rosser]

Icarus,

My perception is that Obama is neither as left nor as right as either of those alternatives. To me on economics he looks to the right of Edwards and Kucinich but to the left of Hillary and some of the other Dem candidates, although Hillary has been to the left of him on health care. He certainly is not as left as this "most liberal" rating puts him, but I do not see him being totally in the clutches of Wall Street, with having people like Galbraith and Bernstein around the sign of this.

I am hoping that what was said in the private conversation between Hillary and Obama was an agreement that he would put her in the leading position on the health care issue, which would give us something more like her progressive position in that area. Anyway, I hope so. I do not know whether or not the most recent commentator hopes for that also, or just wants to defend John McCain as someone as put upon as Hillary has been claimed to have been ("ageism" this time rather than "sexism," with Obama, of course facing no problems whatsoever from "racism").

Again, regarding Hillary's economic advisers, they have been a retread of the very orthodox, centrist, neoclassical, mainstream types that one saw in the Clinton administration. No behavioralists like Goolsbee, and certainly no Post Keynesians like Galbraith or EPI folks like Bernstein. The closest to a heterodox economist there ever was in the Clinton administration was Joe Stiglitz, although that was after he left and was at the World Bank. Needless to say this time he around he has been supporting... Barack Obama.

And, again, for the umpteenth time, Hillary's position on social security was to turn it over to a bipartisan commission, and their track record has been uniform and well known, and, no, not nearly as willing to defend social security benefits as Barack Obama's official position is. What his position will be in the future? Well, again, he has a range of views in his advisers, and although Furman is pretty centrist on some things he has not clearly supported cutting benefits for social security and certainly did battle successfully against the Bush plan.

[BJ Feng]

Anne, how dare you attack Obama by demanding a straight answer? There can be nothing more vicious and underhanded than asking for clarity from Obama. You are clearly a racist like the Clintons.

[BJ Feng]

What Obama thinks is not important, nor are are the people he keeps company with. What is important is hope, and our belief in Obama. In Obama we trust! Through Him, all things are possible.

[BJ Feng]

To use a liberal line of thinking, the richest Americans are the elderly. Is it right that they receive even more money in the form of Social Security payments when they already hold the majority of America's wealth? And who are the ones who have to pay this tribute to the rich? The young workers who are also the poorest segment. So the poorest amongst us are forced to pay a tribute to the very richest. This unfair and immoral system can only be maintained by an unequal share of political power and money. The AARP spends an untold amount of money buying politicians and deceptive ads to maintain the power of the rich. How many poor people can be fed with the money used to buy just one of those AARP ads on TV? How many scholarships could have been funded? Americans must rise up and revolt against the unfair and unequal distribution of power and resources that forces the poor to give their hard-earned wages to the very richest Americans, who also happen to be retired and don't face the costs of raising a family. Workers unite!

[Barkley Rosser]

BTW, since I brought up the matter of what happened to the Economists for Edwards, let me add a bit more. A majority did follow Galbraith in backing Obama, while some did not. As the list of who did and who did not has not been publicly released, I do not feel I should do so. I mentioned Bob Pollin as one prominent individual who did not follow. Among the more prominent ones to follow included Paul Davidson, editor of the Journal of Post Keynesian Economics, and Deirdre (formerly Donald) McCloskey, author of The Rhetoric of Economics, and well known for supporting somewhat libertarian positions.

[anne]

"I do not know whether or not the most recent commentator hopes for that also, or just wants to defend John McCain as someone as put upon as Hillary has been claimed to have been ('ageism' this time rather than 'sexism,' with Obama, of course facing no problems whatsoever from 'racism')."

"someone as put upon as Hillary has been claimed to have been"

"someone as put upon as Hillary has been claimed to have been"

"someone as put upon as Hillary has been claimed to have been"

"someone as put upon as Hillary has been claimed to have been"

"someone as put upon as Hillary has been claimed to have been"

Notice the insinuating rottenness.

[Icarus]

BJ Feng,

This type of racism is quite common from Anne. I'm not sure why. She doesn't seem to be able to get beyond the tantrum as technique, and somehow dismisses the pain and suffering of people she doesn't care about. That is...if it's not her grandma, or israel, it doesn't matter.

A shame.

[Icarus]

Winslow,

Yes, only 28% of american have acquired a bachelors degree, so, the stats may seem bleak.

But, out of the other population segment, we have many careers which don't require book-learning.

Our craftspeople, construction industry, entrepreneurs, and other skilled labour, etc, etc...all of them can earn much more than minimum wage.

The Walmart crowd is another substratum...they can't even offer a skill of much value to the market. They are usually the bottom of the labour pool, and yes, they deserve the market minimum wage.
If they didn't, someone would offer them more.

[Icarus]

Real Person,

I think you're off.

First, your QA/IT friend would never need a Walmart job (unless it was in their IT dept, which would then pay her well).
There's a great market for her skills...but, she may have to move. That's not unreasonable.

What you have to understand is that globalization provides higher skilled people at the same wage rate, or, equally skilled people at a lower wage rate. This benefits most of us.

Yes, some of the US poor lose. But, so what? They were living off an era of imperial viciousness, when the nation they patriotically adhere to was/is/will causing havoc around the globe.
And, more importantly, the masses benefit.

Your comment about Walmart selling to families is interesting. Yes, they provide low cost goods for low wage families.

But, by implication, if that model didn't work, they'd shut down.
Apparently, they pay enough to sustain their business model.

Real Person...my real opinion is that no one making minimum wage (or close to it) should be having children in the US. It's just too risky, and is irresponsible. The child will only suffer.

And, since we can't ask people to curb their procreative activities, what we can do is not reward such irresponsibility with financial rewards. That incentivizes bad behavior.

These workers are free to apply elsewhere, and shop their skills on the market. Walmart isn't their only choice...people can move, people should save, people should manage their own skill set. That's the "real world".

If they don't, and end up trapped at Walmart, having children they can't afford, and a job they don't like...it's really their fault.

[anne]

This type of racism is quite common from ----.
This type of racism is quite common from ----.
This type of racism is quite common from ----.
This type of racism is quite common from ----.
This type of racism is quite common from ----.

Lie on monster, lie on.

[anne]

"That is...if it's not her grandma, or Israel, it doesn't matter."

Israel??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Lie on vile monster, lie on.

[anne]

Israel??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Notice the vile lying.

[Icarus]

More tantrums.

So predictable.

[anne]

"This type of racism is quite common from ----.
This type of racism is quite common from ----.
This type of racism is quite common from ----.
This type of racism is quite common from ----.
This type of racism is quite common from ----.

"Israel? Israel? Israel? Israel? Israel?"

[BJ Feng]

Unabashed support for Israel. Now I understand why so many Obama supporters see both Anne and Hillary as right wing Neocon nuts bent on continuing the Bush Doctrine in the Middle East. Of course, Obama's position on Israel is irrelevant. Anything not related to hope is character assassination and clearly racist. No, disregard Obama's comments indicating that he would pretty much do to Iran what Clinton would, that is completely destroy Iran under certain circumstances. Of course, Obama never makes his stance as clear, preferring to hedge his answer with a torrent of often contradictory words and statements. But that is not important. We must all continue to hope beyond hope.

[robertdfeinman]

Anne:
You are caught in the famous troll wedge. They ping pong misstatements back and forth thus making for a moving target.

Ignore them. If they don't go away at least their remarks won't be highlighted by responses and they won't get the rise out of people that they crave. When their mistakes about the issues are pointed out they revert to ad hominem attacks. It's all in the "How to recognized trolls for dummys" book that I'm writing (wink!).

Now watch their bluster.

[James Killus]

Ah, everyone seems to have missed my point, so I shall say it in a different way, in the form of a reply to Icarus.

Icarus, you say that Walmart's workers do not deserve a (collective) $5 billion dollar wage. But if you can make that judgement, others are perfectly within their rights to say that the Waltons do not deserve their billions of inheritance.

There is no magical "deserving tree" that drops fruit upon the virtuous. Even the dollar is an invention, and whether you like it or not, "property" (as contrasted with possession) is a creature of government and the law (if you are lucky). Laws have been created that made some men very wealthy. It is entirely within the bounds of both reason and fair play that other laws be created that make many more men and women prosperous and middle class.

Such laws would more than likely benefit you personally, yet you argue against them. And thereby hangs a tale. Somehow you have been convinced that your interests are more congruent with the extreme rich than with those who are in your own socio-economic class. I find this quite puzzling, and I wonder how you rationalize it. I have a few glimmerings, but I, of course, prefer to keep them to myself at this time.

[2slugbaits]

Barkley Rosser,

" Among the more prominent ones to follow included Paul Davidson, editor of the Journal of Post Keynesian Economics, and Deirdre (formerly Donald) McCloskey, author of The Rhetoric of Economics, and well known for supporting somewhat libertarian positions."

McCloskey (then Donald) has always been kind of an eclectic thinker. That was true when I studied under him and it's even more true today. Of the four major candidates (McCain, Clinton, Obama and Edwards), Edwards' economic policies were the most antithetical to McCloskey qua Hyde Park economist. He once told me that all you ever needed to know about economics was already said by Alfred Marshall. But McCloskey also lectured in the history department and now lives a few miles north of Hyde Park, and that is the McCloskey who talks about the primacy of social obligations.

[Winslow R.]

Icarus wrote: "Yes, only 28% of american have acquired a bachelors degree, so, the stats may seem bleak.

But, out of the other population segment, we have many careers which don't require book-learning.

Our craftspeople, construction industry, entrepreneurs, and other skilled labour, etc, etc...all of them can earn much more than minimum wage."

I think we can safely say, that in your book, if someone earns the minimum wage or are in poverty they don't deserve to live the American Dream whether they have skills (scholastic or otherwise). It looks like you have increased your potential voting block up to 85% to 88%. Congratulations.

"The official poverty threshold is adjusted for inflation using the consumer price index. Poverty in the United States is cyclical in nature with roughly 12% to 15% living below the federal poverty line at any given point in time, and roughly 40% falling below the poverty line at some time within a 10 year time span."

With 40% falling below the poverty line, at some time, you might wonder if it is a temporary loss of skills that causes this fluctuation or perhaps political/economic disturbances in the carve-outs created by the fiscal/monetary control structure. Sufficient carve-outs could be created so that everyone has the opportunity to live the American Dream but that is a political choice that requires at least 50% of voters.

I have to ask whether you think all children, who don't pick their parents, deserve to live the American Dream?

"In 2006, poverty rate for minors in the United States was 21.9% - highest child poverty rate in the developed world.[6]"

http://en.wikipedia.org/wiki/Poverty_in_the_United_States

[Barkley Rosser]

2slugbaits,

I have not been given permission to report this, but since I have raised the issue, and she has been public about her support for Economists for Edwards, I shall report it.

I had a conversation with Deirdre at the ASSA/AEA meetings in January in New Orleans at a point in time when the group was public and Edwards was still in play. I asked her the obvious question of did this not contradict her previous public positions. Her reply was that she found the Bush administration to have pushed rent seeking to an extreme and that she saw Edwards as the most effective opponent of the US-destroying rent seeking. Presumably she views Obama as the next best to do that with Edwards out of the picture.

To anne: please, it is clear the vile liar here is you. Admit it and apologize. This entire list is by now totally nauseated by you, except for your occasional sock puppet.

[Barkley Rosser]

Oh, to link this to another thread, it could be argued that Deirdre McCloskey might be an example of an "Obamacon," altough I think that Deirdre has never considered herself (or himself) as a "conservative," much like Friedrich Hayek who famously declared himself to be "not a conservative" ("classical liberal" was his preferred label).

[Barkley Rosser]

anne, L.H., oh yes, the "monster" label you like to throw around also fits you fully by now, along with your other faves, "vile" "bully," and so forth. I will not accuse you of sexism, but by now you have others accusing you of other not very nice "isms," and I must say, the evidence is piling up.......

[anne]

"This entire list is by now totally nauseated by you, except for your occasional sock puppet."

Puppet? Puppet? Puppet? Puppet? Puppet? Pup, pup, puppet?

[anne]

http://www.pagebypagebooks.com/C_Collodi/The_Adventures_of_Pinocchio/CHAPTER_2_p1.html

1881

The Adventures of Pinocchio
By Carlo Collodi

Mastro Cherry gives the piece of wood to his friend Geppetto, who takes it to make himself a Marionette that will dance, fence, and turn somersaults

In that very instant, a loud knock sounded on the door. "Come in," said the carpenter, not having an atom of strength left with which to stand up.

At the words, the door opened and a dapper little old man came in. His name was Geppetto, but to the boys of the neighborhood he was Polendina,[1] on account of the wig he always wore which was just the color of yellow corn. Geppetto had a very bad temper. Woe to the one who called him Polendina! He became as wild as a beast and no one could soothe him.

"Good day, Mastro Antonio," said Geppetto. "What are you doing on the floor?"

"I am teaching the ants their A B C's."

"Good luck to you!"

"What brought you here, friend Geppetto?"

"My legs. And it may flatter you to know, Mastro Antonio, that I have come to you to beg for a favor."

"Here I am, at your service," answered the carpenter, raising himself on to his knees.

"This morning a fine idea came to me."

"Let's hear it."

"I thought of making myself a beautiful wooden Marionette. It must be wonderful, one that will be able to dance, fence, and turn somersaults. With it I intend to go around the world, to earn my crust of bread and cup of wine. What do you think of it?"

"Bravo, Polendina!" cried the same tiny voice which came from no one knew where.

On hearing himself called Polendina, Mastro Geppetto turned the color of a red pepper and, facing the carpenter, said to him angrily:


We have hundreds more books for your enjoyment. Read them all!

"Why do you insult me?"

"Who is insulting you?"

"You called me Polendina."

"I did not."

"I suppose you think _I_ did! Yet I KNOW it was you."

"No!"

"Yes!"

"No!"

"Yes!"

And growing angrier each moment, they went from words to blows, and finally began to scratch and bite and slap each other.

When the fight was over, Mastro Antonio had Geppetto's yellow wig in his hands and Geppetto found the carpenter's curly wig in his mouth.

"Give me back my wig!" shouted Mastro Antonio in a surly voice.

"You return mine and we'll be friends."

The two little old men, each with his own wig back on his own head, shook hands and swore to be good friends for the rest of their lives.

"Well then, Mastro Geppetto," said the carpenter, to show he bore him no ill will, "what is it you want?"

"I want a piece of wood to make a Marionette. Will you give it to me?"

Mastro Antonio, very glad indeed, went immediately to his bench to get the piece of wood which had frightened him so much. But as he was about to give it to his friend, with a violent jerk it slipped out of his hands and hit against poor Geppetto's thin legs.

"Ah! Is this the gentle way, Mastro Antonio, in which you make your gifts? You have made me almost lame!"

"I swear to you I did not do it!"

"It was _I_, of course!"

"It's the fault of this piece of wood."

"You're right; but remember you were the one to throw it at my legs."

"I did not throw it!"

"Liar!"

"Geppetto, do not insult me or I shall call you Polendina."

"Idiot."

"Polendina!"

"Donkey!"

"Polendina!"

"Ugly monkey!"

"Polendina!"

On hearing himself called Polendina for the third time, Geppetto lost his head with rage and threw himself upon the carpenter. Then and there they gave each other a sound thrashing.

After this fight, Mastro Antonio had two more scratches on his nose, and Geppetto had two buttons missing from his coat. Thus having settled their accounts, they shook hands and swore to be good friends for the rest of their lives.

Then Geppetto took the fine piece of wood, thanked Mastro Antonio, and limped away toward home.

[anne]

Robertd Feinman:

"You are caught in the famous troll wedge. They ping pong misstatements back and forth thus making for a moving target."

Thank you, much.

[Icarus]

Anne,

It's more like your juvenille ideas are exposed. Keep throwing your silly tantrums.

[Icarus]

Killus,

At any given point, we do accept measures of civilization which curb certain behavior, to enable others.

At some point, we moved (shifted, evolved, devolved...I'm not sure) from gathering/hunting, to settled agriculture (and herding).
This move lead to a significant increase in social hierarchy., and social power. Most anthropologists agree that gatherer/hunter society was much more 'equal'.

Does this mean we abandon agriculture? Does this mean we abandon stratification? No cities? No division of labour?

No.

We as well have (d)evolved into relations of private property, and that has lead to significant incentives and changes. The wealthy you despise, from the Waltons and Gates, to the Tatas and Birlas, also enable growth, technology adoption, and wealth.
Perhaps we vote with our dollars? If so, most of us vote for a consumer economy, which can spread the juissance of technological modernity.

It is a strange conundrum...we've grown from 2 billion to 6 billion in less than a century...the vast majority of those people live in utter squalor, and live outside capitalist social property relations.
What do we do? Does every new entrant deserve 1/6 billionth of our overall wealth? Is that the logic?

No, as it would only incentivize the increased production of poverty.

Capitalism is in its infancy. We haven't universalized the commodity, private property, or market relations. It's slowly happening...

That said, doesn't it seem like those nations, those communities, those enclaves which embrace, and manipulate this capitalist economy, are able to lift their populations out of utter squalor?
The argument is that the impoverished world is undercapitalized, not over. (I'm probably misquoting bhagwati here)

People need to understand, and live the logic of their times. Having babies before acquiring skills or wealth is a recipe of cyclical poverty.

So Killus...yes, you can make laws which say we redistribute all precious gems to indigenous peoples. You can make laws which state the desire to disband cartels.
The point is, that won't happen, and even if it did, would it really help? Developing societies have nationalized industries in the past...it doesn't work as well as the populists imagine. Ultimately, you need a capitalist vanguard, don't you?

[Icarus]

Winslow,

I'm saying that it's the poor choices which the lower quintile engage in, which exacerbates the already difficult path they've been born into.

Capitalism rewards those who refrain from current consumption, and invest rationally to better manage future outcomes.

So, that kid who doesn't hang out at the street corner chasing women, and stays home to do algebra, is making such a rational decision. She will be rewarded (by and large).

The firm who doesn't spend 1/5 of its profits on the Xmas party, and instead invests that in more projects, or better infrastructure...will tend to be rewarded.

Every professional elite went through such a refraining period.

We must teach, and inculcate that into the mentalities of the lower quintiles. This their only hope.

Teaching them that they can (or should) have children when they make almost no money (and have negative savings), and have the skill sets of a quasi-retarted person, is abominable.
Nothing we collectively do can protect the child they conceive. Pretending otherwise is dangerous. No matter how much we finance the welfare state, nothing will compensate for piss-poor parenting, and non-existant financial planning.

Nothing.

[Icarus]

And Winslow,

It is quite possible that this very "American Dream" is dead. If, by this 'dream' we mean that a remedial student, barely able to comprehend high school level knowledge, deserves a life where they can earn 1 salary, and pay for the costs of raising a nulcear family.

Those days are over. That dream is dead.

So, yes, I am willing to say that the "American Dream" is unavailable for many. You need to show up with more than a hand on your chest and a tear in your eye while staring at the damn american flag.

There are people on the planet willing to work harder and smarter, to confiscate that 'dream'. I applaud them.

[Barkley Rosser]

I apologize to all readers for aggravating anne into continuing her unacceptable conduct by my unacceptable conduct.

[ken melvin]

Capitalism is dependent on labor. Without labor, no capitalists.

[Michael Pugliese]

>... "Because I don't know anyone, who thinks Obama is the reincarnation of Henry Wallace." From the comments at http://economistsview.typepad.com/economistsview/2008/06/jason-furman-so.html . Portside/CCDS/CPUSA does. Three cheers for the reincarnation of "People's Capitalism, " http://www.time.com/time/magazine/article/0,9171,779766,00.html (Time reviews Dwight Macdonald on Wallace) eh? >... The two Wallaces he has drawn (and quartered) "would find it difficult to live inside the same house together, let alone inside the same skin. . . . Henry Wallace No. 1 is a mystic, an amateur of esoteric doctrines. . . . Henry Wallace No. 2 is an opportunist, adapting himself to the pressures of the moment, ready to forswear his deepest convictions for immediate gain. . . . Wallace can only alternately express the two sides of his nature, thinking one moment like a Tibetan seer and the next like a cost accountant, acting one moment like St. Francis of Assisi and the next like Boss Hague."

Boxing the Compass. "Wallace," says Macdonald, "never analyzes a problem: he barges around inside it, throwing out vague exhortations." The reason, he thinks, is that "Wallace wants to be loved, and followed by everybody, just as he wants to believe every doctrine all at once." For much the same reason "Wallace's words don't spring, they don't leap, they don't even stumble; they just ooze ... his writing is that of a sick and troubled man, a man not at peace with himself. . . ." Macdonald thinks that Wallace's behavior in the 1932 campaign was typical of the man "boxing the political compass in true Wallacian style: a registered Republican, he gave money to the Socialists and voted with the Democrats."

Why has Wallace become an apologist for Stalinism? Macdonald concludes that "a large power-mass like the Soviet Union exercises a tremendous gravitational pull on an erratic comet like Henry Wallace. ... It is not true that Henry Wallace is an agent of Moscow. But it is true that he behaves like one. . . . Wallace has made a career by supplying to the liberals a commodity they crave: rhetoric which accomplishes in fantasy what cannot be accomplished in reality."

Perpetual Fogs. Macdonald has a few pages of fun with "Wallese," the language spoken in "Wallaceland . . . the mental habitat of Henry Wallace plus a few hundred thousand regular readers of the New Republic, the Nation and PM. It is a region of perpetual fogs, caused by the warm winds of the liberal Gulf Stream coming in contact with the Soviet glacier." Wallace is loaded with "ritualistic adjectives" like "forward-looking," "freedom-loving," "clear-thinking." Such lingo, delivered with the "expansiveness of a Messiah," is just what it takes to make his followers accept Wallace "on his own valuation as a lover of peace who is trying to find a way to avoid World War III."

[Michael Pugliese]

>... "Because I don't know anyone, who thinks Obama is the reincarnation of Henry Wallace." From the comments at http://economistsview.typepad.com/economistsview/2008/06/jason-furman-so.html . Portside/CCDS/CPUSA does. Three cheers for the reincarnation of "People's Capitalism, " http://www.time.com/time/magazine/article/0,9171,779766,00.html (Time reviews Dwight Macdonald on Wallace) eh? >... The two Wallaces he has drawn (and quartered) "would find it difficult to live inside the same house together, let alone inside the same skin. . . . Henry Wallace No. 1 is a mystic, an amateur of esoteric doctrines. . . . Henry Wallace No. 2 is an opportunist, adapting himself to the pressures of the moment, ready to forswear his deepest convictions for immediate gain. . . . Wallace can only alternately express the two sides of his nature, thinking one moment like a Tibetan seer and the next like a cost accountant, acting one moment like St. Francis of Assisi and the next like Boss Hague."

Boxing the Compass. "Wallace," says Macdonald, "never analyzes a problem: he barges around inside it, throwing out vague exhortations." The reason, he thinks, is that "Wallace wants to be loved, and followed by everybody, just as he wants to believe every doctrine all at once." For much the same reason "Wallace's words don't spring, they don't leap, they don't even stumble; they just ooze ... his writing is that of a sick and troubled man, a man not at peace with himself. . . ." Macdonald thinks that Wallace's behavior in the 1932 campaign was typical of the man "boxing the political compass in true Wallacian style: a registered Republican, he gave money to the Socialists and voted with the Democrats."

Why has Wallace become an apologist for Stalinism? Macdonald concludes that "a large power-mass like the Soviet Union exercises a tremendous gravitational pull on an erratic comet like Henry Wallace. ... It is not true that Henry Wallace is an agent of Moscow. But it is true that he behaves like one. . . . Wallace has made a career by supplying to the liberals a commodity they crave: rhetoric which accomplishes in fantasy what cannot be accomplished in reality."

Perpetual Fogs. Macdonald has a few pages of fun with "Wallese," the language spoken in "Wallaceland . . . the mental habitat of Henry Wallace plus a few hundred thousand regular readers of the New Republic, the Nation and PM. It is a region of perpetual fogs, caused by the warm winds of the liberal Gulf Stream coming in contact with the Soviet glacier." Wallace is loaded with "ritualistic adjectives" like "forward-looking," "freedom-loving," "clear-thinking." Such lingo, delivered with the "expansiveness of a Messiah," is just what it takes to make his followers accept Wallace "on his own valuation as a lover of peace who is trying to find a way to avoid World War III."

[anne]

"Three cheers for the reincarnation of...."

Professional hate mongering.

[Real Person from the Real World]

A degree does NOT guarantee good income. Lack of a degree does not mean the person cannot make a good income. We have a local suburb filled with contractors, and other businessmen (most with little or no college), who seem to live a precarious, but generally comfortable lifestyle. I live in a more traditional suburb, I have post grad degrees, and do quite poorly, but live within my means, meaning I live very uncomfortably. I am also getting older, and it is dam hard to put money aside on my wage, despite the fact I get no benefits.

At my age do I want to move somewhere else where I can take advantage of my education? Mobility is fine for the young but not for the older. Many people, including legal immigrants who are doing so well here, are also in the same boat. They came over, put up with shit to get that green card, and now they have a comfortable life at regular US wages. How many US citizens could go overseas young, work themselves into the economy and retire comfortably? It really works well only in one direction, to the US. The difference is, that I have no foreign country with a network of relatives, to go back to, if things fall thru here for me. Many foreign people do.