What’s Wrong Today:

Last Friday, The Center on Budget and Policy Priorities
(CBPP) released a series of charts that
document the course of the economy since the 2008 recession. It is well worth
your time. Here is the chart that shows the number of unemployed people per job
opening in the US in September 2013:

From the CBPP:
(emphasis by the Wrongologist)

So, it should be no surprise that we
have 4 million long term unemployed in America today, a number not seen since
we started keeping records in the late 1940’s. The number was only 1 million in
2007. From the St. Louis Federal Reserve:

Today, Paul
Krugman is concerned about the loss of unemployment benefits for 1.3
million Americans just before Christmas, which he says is based on bad Republican
ideology, buttressed by bad economics. He writes:

He goes on
to say that Republicans think that unemployment insurance reduces the incentive
to search for a new job. As a result, the story goes, workers stay unemployed
longer. Republicans claim that the Emergency Unemployment Compensation program,
which lets workers collect benefits beyond the usual limit of 26 weeks,
explains why there are so many long-term unemployed workers in America today. So
the GOP answer is to increase their pain by cutting their benefits: If we eliminate
their incentive to sit at home, they will get jobs.

But, with
3 times as many long-term unemployed as there are jobs, Republicans must be
expecting another Christmas miracle.

Krugman
continues:

Your Republican grandfather probably
told you that the PROVEN model for personal success is:

#1. Stay in school

#2. Start at the bottom and continue to
learn, starting over when bad things happen, as they often do

#3. Save a piece of every pay check…etc,
etc.

Of course, grandpa didn’t tell
you what to do when #2 becomes:  “what you do if you can’t get a job”, or when it becomes: “what you do if you DO get a job
but the pay doesn’t cover your expenses”…etc, etc.

He should have added the rule: “Be
lucky enough not to start at the bottom”.

David Simon, creator of The Wire and Treme, has a longish article up at The
Guardian where he describes what he calls our “Two Americas” and the challenge presented
by what Krugman called “the perfect marriage of callousness”, the complete lack
of empathy combined with bad economics:

Shorter: Unchecked capitalism has created a fractured society. Here
are a few things that the “marriage of callousness” has delivered:

• From
  1947 to 1979, the middle class received 54% of the nation’s total income, and the
  economy grew at 3.7% per year

• From
  1980 to 2010, when the middle class’s share of the nation’s total income fell
  to 46%, and annual GDP growth fell to 2.7%

• If
  the minimum wage had kept up with inflation, it would be $10.74 today

• The top 1% of Americans own 40% of the country’s wealth while the
  bottom 80% owns less than 5%

• In
  the past 50 years, the tax rates of the 400 richest families in America have fallen
  by 60%

• The
  wealthiest among us have taken control of election finance: 28%
  of all campaign donations came from the wealthiest 0.01%

David
Simon’s article closes with: (emphasis by the Wrongologist

The enemy
that created the two Americas and the marriage of callousness is the corruption of
the political system and the corruption of individuals who work within that system.

We need to
take the money out of politics. We need total transparency about donations from
lobbyists and corporations. We need to limit the amount that can be spent on
elections. The next presidential race will certainly set another spending
record; many Senate races will set spending records in 2014.

If you
want your democracy back, then it’s time to have a re-think regarding what a
political system that works for everyone should look like. We need to come up
with a system that limits the ability of the rich and powerful to buy the
political process and system of government.

John F.
Kennedy, in a 1962 speech
to the Alliance For Progress, said:

If our
political process continues without dealing with unchecked capitalism, this is surely
what we will face.

What’s
Wrong Today:

Last Sunday, two Congressional
leaders who chair their respective branch’s intelligence committees spoke to
the news bunnies about terrorism and our need to spend more on the NSA to fight
terrorism, even while they voted to send more weapons and aid to terrorists in Syria.

We are talking about Mike
Rogers, (R-MI) who heads the House Permanent
Select Committee on Intelligence, and Dianne Feinstein, (D-CA) who heads
the Senate Select Committee on
Intelligence. Let’s review the hypocrisy: Rogers & Feinstein were
scaremongering the American people with the Syrian jihadis, yet both had voted
to give the Syrian rebels $ millions in arms. These two have to know what
we all know, that some Syrian
rebels are calling for terrorist attacks on America.  And we’ve known
for a while that much
of the weapons we’re shipping to Syria are ending up in the hands of Al Qaeda.
From Juan Cole:

It appears that Feinstein
and Rogers were trying to demonstrate a
“need” for the country-wide NSA dragnets that sweep up digital information
about most Americans. The Guardian
quotes Rogers as saying that al-Qaeda
groups had changed their means of communication as a result of the Snowden/Wikileaks disclosures about US surveillance programs, making it harder to detect potential plots
in the early planning stages: (emphasis by the Wrongologist)

Marcy Wheeler at Empty
Wheel explains the hypocrisy: (bracketed comment below by the Wrongologist)

They are saying that
we are less safe than we were  two years
ago. In fact, Rogers
said that “thousands” of Westerners”
have gone to fight in Syria. But the FBI estimates
the number to be fighting in Syria at 24. That’s just two dozen.

And is
there any real reason to think that Americans are less safe than a couple of
years back? Not according to CNN’s Peter Bergen, who looked at
the actual numbers. Bergen relies on a New
America Foundation study of Americans and residents indicted or killed over
the last decade, showing that those numbers show terrorist incidents to be
going down. From Bergen:

The total number of
indicted extremists has declined substantially from 33 in 2010 to nine in 2013.
And the number of individuals indicted for plotting attacks within the United
States, as opposed to being indicted for traveling to join a terrorist group
overseas or for sending money to a foreign terrorist group, also declined from 12 in 2011 to only three in 2013.

Further, according to WaPo,
the types of organized groups that carry out terrorist attacks are extremely
diverse:

(GTD in the
caption above stands for Global Terrorism Database). If you are interested, the
University of Maryland’s Global
Terrorism Database is a useful tool for tracking these events.

Al-Qaeda
dominates the above list, and the two Eco-terrorism groups have been
particularly active, though they are both declining.
But aside from that, terrorist groups seem to come in all types. The report
notes:

Recent plots
in the United States also do not show signs of direction from foreign terrorist
organizations such as al Qaeda, but instead are conducted by individuals who
are influenced by the ideology of violent jihad, usually because of what they
read or watch on the Internet. Indeed,
of the 45 homegrown extremists who were indicted, convicted or killed between
2011 and 2013, 18 are known to have communicated with other extremists over the
Internet or posted materials related to their radicalization online.

Finally, your odds
of dying in a terrorist attack are still far lower than dying from just
about anything else. In the past five years, the odds of an
American being killed in a terrorist attack have been about 1
in 20 million (that’s including both domestic attacks and overseas
attacks). As the chart
below from the Economist shows, that’s considerably smaller than the
risk of dying from many other things, from post-surgery complications to ordinary
gun violence to lightning: (Chart was cropped by the Wrongologist. Approximately 3400 Americans have died in terror-related attacks since 1970)

Rogers
& Feinstein: Not as catchy as Rogers & Hammerstein. Hate to quote
George Michael, but “guilty feet have got no rhythm”…

Rogers
& Feinstein have nerve: They support the Syrian jihadis and then point to Syrian
jihadis as the reason why the NSA must stay deeply in the shorts of the
American people.

The
threat maybe increasing, but that is not proven by the data.

If
your government is fighting wars in the name of freedom, the entire rationale
is flawed if your government denies basic, Constitutionally-mandated liberties to
its citizens.

Then,
the terrorists win by default.

What’s
Wrong Today:

Didn’t
President Eisenhower have a better economic record than President Carter? Saint
Ronnie surely was better for the economy than President Johnson.

Wrong
on both counts.

An
interesting new research paper by Princeton Professors Alan
Blinder and Mark Watson examines differences in performance of the economy
under Democratic versus Republican presidents. The paper begins:

James
Hamilton of the Econobrowser
Blog took the data from the paper and helpfully provides this graph: (numbers
on the vertical axis are % annual GDP growth)

Leaving
aside the headline and taking away the political labels, the most scary thing
that the graph shows is a strong
downward trend in our GDP growth rate throughout the period, from greater than
4% to less than 2% since Clinton’s 2nd term.

The
data developed by Blinder and Watson show that Mr. Obama has the worst economic
performance by a Democratic President since Truman, and possibly, since Wilson,
but he has about the same results as Bush II’s 2nd administration, Bush
I’s 1st, and the Nixon-Ford administration.  

Mr. Carter
is unfairly maligned. His economic performance was better than his reputation.
He took on the 2nd oil shock and the Iranian hostage episode. Carter
may have been unloved by business, but his performance was not as bad as portrayed
by Mr. Reagan or his other critics. In fact, GDP growth even under Carter is better than the average growth under
Republican presidents.

Mr. Reagan’s
performance, by contrast, was not as good as our Republican friends would like
us to believe.

Mr. Clinton
may have been the best Republican since Eisenhower, except for that impeachment
thingy by Republicans. His polices (reducing the size of government and
achieving a balanced budget) were far more conservative than any Republican’s in
our collective memory. He is the only President in recent memory that we can consider
as having a clear success with economic policy. And he is the only one who left
the country in a better position than he found it.

Messrs. Bush
I and II did not perform well on the economic growth yardstick, while LBJ had
great GDP growth, but it wasn’t enough to allow him to run for a second term. Mr.
Nixon’s economic policies were really from the left, rather than right. He
implemented both wage and price controls and took us off the Gold Standard in 1971. The Recession of
1973-1975 occurred under Nixon. He also had the task of running the US
during the Vietnam war and struggled with the first oil shock.

Mr.
Eisenhower’s lackluster economic performance may surprise most of us. His
relatively weak performance seems out of context from what we remember about
the 1950’s.

Since
Clinton, we have had a series of bubbles in real estate, securitized real estate,
student loans, corporate high yield debt, trophy art, and a bubble in the
number of economists and politicians who said that we have no bubbles.

So,
what explains the difference in economic performance between Republican and
Democratic Presidents?

Blinder
and Watson are not sure. They find little statistical explanation of the  differences in monetary or fiscal policy under
Democrats compared with Republicans. One of the variables that they think did
play a role is oil price shocks.

The Suez
Crisis of 1956-57, OPEC oil embargo of 1973-74, Iran-Iraq War beginning in
November 1980, and Iraq’s invasion of Kuwait in 1990 all occurred during
Republican terms, and all seemed to contribute to weak performance of the US
economy. Jimmy Carter was the one Democratic president who also experienced an
oil shock, during the Iranian revolution in 1978-79, and he had a fairly weak
economic record, if only by comparison to other Democratic presidents.

Another factor
that the researchers identify as potentially important is consumer confidence.
For whatever reason, consumers on average have had a more positive outlook on the
economy when a Democrat was in the White House. In Blinder and Watson’s
statistical analysis, this seems to account for about 25% of the difference
between the performance of Democrats vs. Republicans. They conclude:

So
the economists can’t figure out why one party is better than the other when it
comes to the economy. We all know that  “correlation
is not causality”, even if we think it just might be in this case.

Since
economists haven’t found the answer, perhaps we should simply take it on faith
that GDP growth is something that the Democrats just do better.

Republicans
take things on faith all the time.

Maybe
it’s time for the rest of us to subscribe to a faith-based view of which party
will do a better job on the economy.

A week of family and friends, wrapped around a turkey dinner for most of us. But for some, inequality still rears its ugly head, particularly on the holidays:

Now let’s return to the words of Pope Francis, who last week, pushed back hard against our political classes:

Pope Francis derides the connivance of political leaders in the growth and consolidation of a malevolent socioeconomic global order that brought about these statistics:

• No growth in median real income since the 1970’s
• 15% of our people needing food stamps in order to avoid hunger
• 18 million Americans either out of work, or wanting more work hours
• 50 million without health insurance

Rush Limbaugh called the Pope a “Marxist” for his statements this week about economics and inequality. Here is what Numerian at the Agonist had to say about King Rushbag of Oxycontin:

It is not
surprising that Rush Limbaugh, spiritual leader of the Republican Party – the
man who determines Republican ideology and who enforces obedience to orthodoxy
within the party – now finds Pope Francis a “Marxist”.  Pope Francis,
spiritual leader to over one billion Catholics, has issued a direct assault on
the Rush Limbaugh’s of this world, their paymasters in the business and financial
community, and their political lackeys

If they are listening to Francis, Catholic members of the Supreme Court, Roberts, Scalia and Alito should feel less certitude about their readings of our Constitution. In less than a year as Pope, Francis has undermined several precepts of conservatism as it is practiced today. 

This week also saw big push back against Mr. Obama’s 6 month deal with Iran. Israel’s Prime Minister has a different view of the new plan:

Old men and their geopolitical theories send young Americans to war:

The six-month nuclear deal with Iran caused much snark among the chicken hawk intellectuals who cannot abide President Obama’s willingness to talk with his adversaries. It is entirely possible the deal may fail, but giving diplomacy a try is certainly preferable to another march to war.

If the Iran deal pays off, maybe the President will justify the Nobel Peace Prize he won prematurely in 2009, and the neo-cons may find themselves bereft of any new battlefields.

Except for China.

In November, the Wrongologist Blog passed 58,000 page views in
the past year, up from 25k views a year ago. We now have a run rate of 8,300
views per month, that’s on track for 100,000 reads in the next 12 months!

Many thanks to all of you who read and especially to those of you who
comment, or suggest that others check out the Wrongologist Blog.


The Wrongologist doesn’t publish this blog to make money,
but because he wants to get people to make better decisions in our political process. We poke holes in the positions of doctrinaire politicians
who keep pushing talking points rather than looking at the facts. He has
an often stated antipathy for dissembling,
mendacious politicians.

We all know what is wrong in America, but we
are paralyzed by ideology, and can’t (won’t) do anything to solve our problems.
This blog hopes education and argument will help end our paralysis.

Some say that the Wrongologist blog is not an easy read
and that some posts may be too long for today’s attention spans. The
Wrongologist tries to distill complex issues to as near to their essence as possible,
but we live in a complicated world where the details of policy and politics
really matter.

Hopefully more readers will leave comments. They help other readers understand
the issues at hand. Anyway, 58,000 reads is a good time to take a moment and
post thanks to those who follow the Wrongologist blog. If you enjoy the
Wrongologist, please tell a friend about it.

I’d like to recognize Terry,
Monty, Fred and David for their continuing support of the blog, and Ms.
Oh So Right who acts as its editor.

Please give to your local food bank. Given
Congress’s cutting of the food stamp program, it has never been more important
to help the hungry, and there are so many more of them.

Happy Thanksgiving to all!

What’s
Wrong Today:

Yesterday,
the Wrongologist wrote about Freeports,
those tax-free locations where the ultra-wealthy hide their spectacularly
expensive stuff. He concluded with:

He said: “We
gave them a break, thinking they were job creators, but they preferred to buy
art and classic cars.”

Well, yesterday,
Pope Francis showed that he
understands economics better than many of our politicians and their right-wing
economists. In an 84-page document, called an apostolic
exhortation, he attacked unfettered capitalism as “a new
tyranny”, urging global leaders to fight poverty and growing inequality in
the first major work he has authored alone as pontiff.

The WaPo reported
that Francis decried an “idolatry of money” in secular culture: (emphasis by the
Wrongologist)

He also
called on rich people to share their wealth:

The WaPo
quoted Michael Sean Winters, a fellow at Catholic University’s Institute for
Policy Research and Catholic Studies about Pope Francis’s exhortation:

Meanwhile,
professional Catholic, Rep. Paul Ryan (R-WI), who has said before that he tries
to uphold Catholic teaching “as best I can” and believes his policies match
Catholic teaching, declined
comment on the Pope’s take-down of Trickle Down.

Pope Francis
gives a voice to the post-financial-crisis outrage that we have not seen since
Occupy Wall Street disbanded. Pope Francis bolstered his argument with two emotions
familiar to any Catholic-school graduate: shame and guilt. He wants to make improving
the economy a matter of personal responsibility.

It’s time
for a change in how we approach capitalism. That doesn’t mean we must discard
capitalism, or hate profit; it’s about pursuing profits ethically, and
rejecting the premise that exploitation must be at the center of profit. When
53% of financial executives say they can’t
get ahead without some cheating, even though they want to work for ethical
organizations, there’s a real problem.

Inequality
has been growing in the US. Economist Emmanuel Saez found that the incomes of
the top 1% grew
by 31.4% in the three years after the financial crisis, while the majority
of people struggled with a disappointing economy. The incomes of the other 99%
of the population grew 0.4% during the same period.

As a
result, federal and state spending on social welfare programs has
grown to nearly $1 Trillion just to handle the volume of US households in
trouble.

Yet income
inequality is rarely part of the mainstream economic conversation. When
economists and politicians discuss why the US is not recovering, they often
mention metrics like GDP growth, unemployment and housing. They rarely mention the metrics that directly tell us we are
failing at our economic goals, like reducing poverty. Remember:

• 15%
  of Americans, or 47 million people, are on food stamps

• 50%
  of children born to single mothers live in poverty

• Over
  13 million people are out of work

• Children
  are now not
  likely to do as well as their parents did as downward mobility takes hold
  for the first time in generations

Pope Francis correctly identifies that inequality is the greatest
economic issue of our time – for everyone, not just for the poor. Nearly any
major economic metric – unemployment, GDP growth, consumer confidence – prove that the vast majority of Americans are struggling in some
way.

You don’t
have to begrudge the rich their money, or champion income redistribution. The rich
need to pay more in taxes, particularly on assets they hide offshore.

On
Thanksgiving, it’s hard to justify ignoring the financial problems of 47
million people who don’t have enough to eat. Until they have enough money to
fill their pantries, we won’t have a widespread economic recovery.

We won’t have
a recovery if one-sixth of the US population is trying to eat on $1.50 a day.

Happy
Thanksgiving to all, except to the turkeys in Washington. Off with their heads!

What’s
Wrong Today:

Here
is more news about the world of the ultra rich, those shameless wealthy who treasure their stuff more than life itself — at least more than other
peoples’ lives. The Economist has
an extremely telling report
about Freeports.

Freeports are tax havens located at airports around the world. The super wealthy are
using free ports to hold very high end assets, like art collections. The
advantage is that if the assets are housed at a Freeport, it is not subject to
taxes, and the goods held in them are, well, anonymous, no government knows
what is held there, and thus they provide a fine new loophole for the
uber-rich.

From
The Economist:

Today in 1968, one of
the bigger influences on the Wrongologist’s writing, Upton Sinclair, died. Sinclair wrote eighty
books. His most important books made a real difference in America: He wrote the
classic muckraking novel, The Jungle (1906), that exposed conditions in the US
meat packing industry. The Jungle
contributed to the passage of Pure Food and Drug Act and the Meat Inspection Act later in 1906.

In 1916,
he wrote King
Coal, about Wall Street and the coal-mining industry.

In 1919, he published The Brass Check, an exposé of American
journalism that publicized the issue of yellow
journalism and the limitations of the “free press” in the United States.
Four years after the initial publication of The Brass Check, the
first code of ethics for journalists was created.

He won the
Pulitzer Prize for fiction for Dragon’s
Teeth, about Hitler’s rise to power, in 1943.

Many of
his novels are about life in the domain of Wall Street. Although the
industrial processes described in his books are outmoded today, the financial
chicanery and greed of today’s financial giants are simply more refined. His
work takes on a new relevance in our current time of market manipulation and
destruction of the commons under the guise of a free market.

Some thoughts about Sinclair by others:

Wikipedia quotes Time
magazine, who called him “a man with every gift except humor and silence.”

Howard Zinn said: “…at
the end of the novel The Jungle, Sinclair has one of his characters
present a picture of what a good society would be like:

• It
  would be a society in which the fruits of the Earth were shared in a kind of
  rough equality

• In
  which corporate profit would not be the driving motive of the economic system…

• In
  which democracy would exist

• In
  which people would have a voice not just in voting and choosing political
  leaders but a voice in how the economic system operates.”

Edmund Wilson: “Practically alone among the American writers of
his generation, [Sinclair] put to the American public the fundamental questions
raised by capitalism in such a way that they could not escape them.”

A few quotes from
Sinclair for your contemplation:

• “One
  of the necessary accompaniments of capitalism in a democracy is political
  corruption.”

• “They
  were trying to save their souls – and who but a fool could fail to see that all
  that was the matter with their souls was that they had not been able to get a
  decent existence for their bodies?” – The
  Jungle Ch. 23

• “You
  don’t have to be satisfied with America as you find it. You can change it. I
  didn’t like the way I found America some sixty years ago, and I’ve been trying
  to change it ever since.”

• “They
  were beaten; they had lost the game, they were swept aside. It was not less
  tragic because it was so sordid, because it had to do with wages and
  grocery bills and rents. They had dreamed of freedom; of a chance to look about
  them and learn something; to be decent and clean, to see their child grow up to
  be strong. And now it was all gone-it would never be!” The Jungle, Ch. 14

Upton
Sinclair documented and disrupted his era. The Jungle and The
Brass Check both changed American history. His best works deal with the
unbridled profit motive and human exploitation, and they remain relevant. They stand with the best of US political literature,
even today.

What
Sinclair did was, at the same time, simple and profound: His life was about helping people of
his era understand how society was run, by whom and for whom.

We
need the new media Sinclair’s to come forward and teach us today.

The
Wrongologist and Ms. Oh So Right are on a quick trip to a warmer climate. That
seems appropriate, since it was 19°F here last night.

There
will be a post on JFK tomorrow, and Sunday Cartoon Blogging will appear on
Monday.

Stay warm,
my friends.

Today is the 150th
Anniversary of Abraham Lincoln’s Gettysburg Address. His speech was 271
words long and took just two minutes to deliver. For younger readers, that’s slightly less than 2 tweets.
Lincoln gave his short speech during the middle of the Civil War, on November
19, 1863.

Back then, the New York Times reported:

You can read the Gettysburg
Address here.
Today’s anniversary brings to mind that we will remember John F. Kennedy’s assassination
on Friday. Many have written about the unlikely connections between Lincoln and
Kennedy, most of which offer no insight into either individual, but their
speeches tell us a lot about each person, and there are similarities in the power
of rhetoric used by both Presidents.

One interesting fact is that Abraham
Lincoln gave his 1st inaugural speech in 1861 and John F. Kennedy
gave his 100 years later, in 1961.

Their inaugural speeches, unlike
many, are also memorable. Lincoln, as the nation was beginning to split apart,
ended his speech by affirming that the Union would endure once Americans were again
guided by the “better angels of our nature.” Succession had already happened by
Lincoln’s first Inaugural. Jefferson Davis had been inaugurated as President of
the Confederacy two weeks earlier. Lincoln had arrived in Washington in secret
to avoid danger. He spoke
almost exclusively about succession and slavery:

He
did clearly say that no one had the right to secede from the union, and that he
would oppose succession, but not slavery. He ended with:

He had no speechwriter, yet: “the
mystic chords of memory…will yet swell the chorus of the Union when
touched…by the better angels of our nature” is as near to capturing the
essence of what it means to be part of one’s country. He speaks to the nation in
words that all can hear.

At his 2nd Inaugural, the Civil War
had ended, and Lincoln sought to take the nation on a journey of healing:

Lincoln would die a little more than a month later.

And a century later, John F. Kennedy took office on a cold day, during a
cold war that threatened to end the world through the use of nuclear weapons.
There were domestic issues that again threatened the Union in the form of civil
rights and school desegregation. JFK gave what was the 4th shortest
and arguably the most
memorable inaugural address. We all know these words:

Kennedy optimistically called for cooperation among nations in challenging
“tyranny, poverty, disease and war itself.” He concluded by asking Americans
and our “fellow citizens of the world” to consider “what together we can do for
the freedom of man.”

Unlike
Lincoln, Kennedy had a speechwriter, the gifted Ted Sorensen, who died in 2000.
In his memoir, “Counselor” he wrote:

This
speech was the template for the great JFK speeches that followed. It had energy
and determination; it contained a real agenda for the future; and it energized
a quiescent generation that previously had not been asked to do anything.
Like Lincoln’s Gettysburg Address and his Inaugurals, Kennedy’s Inaugural contained
both power and poetry, including, “Let every nation know…that we shall oppose
any foe”.

Lincoln
said he would not interfere with slavery, but the Civil War that he prosecuted did ultimately end slavery. Kennedy, like Lincoln, would revise his views
about the federal government’s role in securing civil rights for all in
America.

Our leaders often can’t determine
or even anticipate the course of events. Much of their individual greatness has
come from their ability to adapt and change, and then communicate to us in ways that help us understand
the ideals that define us.

As Lincoln said, we are sometimes
guided by the better angels of our nature.

The speeches of both men are
worth remembering for reasons beyond the eloquent phrases or the coincidence
of their being 100 years apart. Lincoln
and Kennedy, perhaps unlike other American presidents, except perhaps FDR, had
a unique ability to stir the soul and define our purpose as a people.