Morning Reads for Tuesday, September the 4th

Nationally:

  • On inheritance and your digital self, (SmartMoney)
  • political cartoonists being put on the shelf? (NewStatesman)
  • Here’s the left out stimulus data (WaPo-Klein)
  • Nicki Minaj is a laziness hater (Buzzfeed),
  • Juvenile justice takes to the stage (CNN)
  • Conservatives’ comedy takes a backseat to rage (WashingtonMonthly)
  • A revolution is coming for social science, (Edge)
  • The Economist stands alone as the choice of the giants. (NationalInterest)
  • Your views on China need a novation, (ForeignPolicy)
  • A shot across the bow of the Fed’s focus on inflation. (WaPo)

More Locally:

And in Sports:

  • Braves prove their baseball superiority over the Rockies, (TalkingChop)
  • But Georgia Tech loses in a place that hasn’t seen economic development since the age of the talkies. (FromtheRumbleSeat)

61 comments

  1. saltycracker says:

    Sen. Rogers in the Daily Kos link: “One study showed that the state of Georgia spent $260 million to educate illegal immigrants last year.”

    There is a lot of outrage on denying illegals public education, taxpayer medical care and rampant fraud on our system but little on revising the Federal immigration laws. If a job is available, why not log them in, card them, tax them, account for them ?
    Answer: There too much to gain for their apologists, left & right, by exploiting illegals.

    • Stefan says:

      If you look at why we as a society educate children, I think you will find that those goals and ideals are still met even if the children are “illegal” (many of whom are here legally but whose parents are undocumented). Fast forward ten years and imagine large numbers of totally uneducated teenagers who may or may not even speak English and who lack basic job skills wandering around. Probably not great for society, right?

      As far as unpaid medical care, that’s a much larger problem.

      I don’t know what you mean by “rampant fraud”, but I assume you mean in the employment arena. Sure, we could heavily police work permits but then new home prices would go up 15%, which wouldn’t be that great for our region.

      Also, agriculture in this state depends on immigrant labor, much of it “illegal”. After the harsh anti-immigrant bill was passed last year, many farmers in Georgia couldn’t harvest their crops because of lack of labor. That doesn’t benefit anybody.

      So if we were somehow able to “fix” our immigration laws and policy, which I take your meaning to be deport and detain those in this country, and preventing any additional illegal immigration, the result would be higher prices, less food, and more crime.

      Frankly, I am fine with the marginal cost of educating a few illegal immigrants, providing some emergency healthcare, and allowing them to work very difficult jobs for low pay if it means I get ready access to Georgia’s blueberries.

      I do love those blueberries.

      • John Konop says:

        ……….Frankly, I am fine with the marginal cost of educating a few illegal immigrants, providing some emergency healthcare, and allowing them to work very difficult jobs for low pay if it means I get ready access to Georgia’s blueberries.

        I do love those blueberries……..

        The father of the free market system was very clear workers must have the same legal rights as their employer. As Henry Ford pointed years ago, workers need to make enough to buy the products they produce if not it will hurt consumption ie jobs. The above attitude is very short sided and has led to the slow down to the world economy. The biggest issue we face worldwide is lack of consumption ie destruction of middle class. The spread between rich and poor is growing worldwide, which is leading to the lack of consumption. The people who make our cars, paint our houses……wages are flat to down since the 70’s. We hid this was debt, and now the money is running out. Unless we fix the race to the bottom attitude from people like you that support abusive labor for cheap goods the economy will slowly decline.

        • Stefan says:

          That was tongue in cheek to a large degree, but I was pointing out that the economic argument that illegal immigrants are costing us money is flawed.

          • Noway says:

            Stefan, are you saying that the illegals are not costing us money? Or are you saying they cost us money but the benefits from having them here make the equation more or less equal?

            • Stefan says:

              Well, I would divide it up. On education, does it cost money to educate the children of undocumented immigrants? Yes, it does. However, if the alternative is to have a generation of uneducated, barely literate youth who aren’t gainfully employed I’d rather educate them. Marginal cost of educating one more child is pretty inexpensive anyway.

              I grant you, that’s a cynical argument. Want a more idealistic one? Among those immigrants might be the next Bill Gates or Steve Jobs or Mitt Romney*. But if we deprived any of the above of even the most basic education, would they have become great? Whenever we deprive a group of people of education we are limiting the entire economy of their higher level services and we are lowering the potential growth of our economy.

              So, it is cheaper by pennies in the short run to deny educational opportunities, but in even the middle distance it is more costly, and in the long term its costs are inestimable.

              * Is he second generation? I’m not sure.
              * Note: I am reserving the argument that many undocumented workers actually pay taxes and into the social security system that they will never collect on.

          • John Konop says:

            It is costing the economy money. Illegal immigration drives wages down for working class people, as well as poorly designed trade deals. The best example is the meat packing workers, which was once a middle class job. As people fall out of the middle class via wages, it takes money from the economy and concentrates into fewer hands. This is referred to as a distribution problem in economics. This is why China is slowing down, they lack internal consumption via wages being too low for working class people. And the west is consuming less via wages in the middle class falling.

            West:

            ……The poor are finding it even tougher to escape from the lowest income ranks these days.

            Most of those in the poorest income quintile spent all or nearly all of the period between 1996 and 2006 stuck in place, according to a new report issued by the Federal Reserve Bank of Boston. Those who did advance didn’t move far.

            The research, conducted by senior economist Katharine Bradbury, shows that economic mobility has also slowed in recent decades. Those in the poorest fifth of the income pie were more likely to stay there between 1996 and 2006 than they were in the previous two 10-year periods.

            “Most of the long-term poor are stuck at the bottom, most of the long-term rich have a strong grip on the top, and each of these two groups is somewhat more entrenched than the corresponding groups 20 years earlier,” she wrote.
            The spread between the rich and poor has also widened, as income inequality increases. The difference in median income between the highest and lowest quintiles was $80,500 during the 1996-2006 period. That’s nearly $30,000 more than it was two decades earlier……….

            http://economy.money.cnn.com/2012/04/26/the-poor-stay-poor/

            China:

            ….At this year’s annual legislative session, some 3,000 delegates discussed China’s economy, ethnic unrest and reform of the country’s legal system.

            But for many, the growing gap between rich and poor is the most pressing issue, especially in Beijing’s slums, where the country’s most affluent and the least can live in close proximity…..

            http://www.voatibetanenglish.com/content/china-struggles-to-bridge-gap-between-rich-poor-142612776/1267245.html

            • Stefan says:

              Ok, let’s talk about meat processing. Would you advocate a minimum wage increase to say, $10/hour?

              I agree with you about living wages – in a down economy the workers have less bargaining power and as individuals have almost none.

            • Noway says:

              John, let me ask a question. Is this something we could have prevented from happening? What I mean is this, back in the day when American labor was making big strides with their wages and benefits, could it have been seen that in the future, they’d be pricing themselves out of the market by ever increasing hourly wages, generous benefit packages and big pensions. Sooner or later management was going to figure out that the Mexicans or Vietnamese would work for much less. In the last generation we’ve truly become a global labor pool/marketplace with folks willing to to do quality work for a fair wage…in their country.

              • John Konop says:

                Norway and Stefan

                ….Sooner or later management was going to figure out that the Mexicans or Vietnamese would work for much less. In the last generation we’ve truly become a global labor pool/marketplace with folks willing to do quality work for a fair wage…in their country….

                ….Would you advocate a minimum wage increase to say, $10/hour?…

                Adam Smith would say that competition is great and creates efficiency if all sides have the same legal rights. He was very clear that if not you are just advocating system that will create distribution problems via wages. Supply and demand works as long the parties all are under a real justice system. The concepts of the Bill of Rights were taking from Adam Smith. He was a leading abolitionist as well as the father of the free market system. You do understand that places like China, Vietnam, India……..workers do have very limited legal rights? My point is I am not for fixing wages……I am for a system that everyone has the same legal rights. If that is the case, than I do believe that wages will sort itself out. But pitting one worker against another worker with limited rights will only lead to a race to the bottom with wages, and a destruction of the middle class.

                The “Invisible Hand” theory only works with a real justice system via Adam Smith. Since it was his theory, my bet is on him.

                • Stefan says:

                  Yes, but the assumptions that are required for a free market: free movement of goods, capital, services and persons, are not in evidence here. At best you can say capital movement is free-ish, but certainly it is encumbered.

                  Without that, the idea of wages reaching equilibrium is pure fiction.

                  • John Konop says:

                    ….but the assumptions that are required for a free market: free movement of goods, capital, services and persons, are not in evidence here….

                    In all due respect, that is not what Adam Smith wrote. He was very clear that countries that are violators of the agreement should be punished with retaliatory tariffs. I am all for free trade and movement of goods through the world like Adam Smith. But to do this blindly with no justice system ie stealing of intellectual property rights, currency manipulation, slave like labor conditions…..is not capitalism according to the guy came up with the idea.

                    • Stefan says:

                      I agree with all of that, but all of that requires a regulatory system. I would love to talk about statute of Anne up in here though. I might even get to cite my law review article. Well, no, I guess not. But still.

                      We can talk about Adam Smith, but most economic thought has moved past him, at least up to Keynes and Hayek.

                      And are you suggesting that Adam Smith wasn’t concerned about free movement of labor?

                    • John Konop says:

                      …….We can talk about Adam Smith, but most economic thought has moved past him, at least up to Keynes and Hayek….

                      In all due respect that is ridicules. Adam Smith book “Wealth of Nations” is still taught and considered the bible of economics by most colleges. I do not think you can name any well respected economist who would agree with you.

                      ……And are you suggesting that Adam Smith wasn’t concerned about free movement of labor?……

                      No, I am only stating the facts. Adam Smith was clear capitalism will not function properly unless the country is guided by a justice system for all. What part of that do you disagree with?

            • caroline says:

              But this is really nothing new. Companies have been moving for cheaper wages forever. The textile mills left the northeast to come south during the 20th century. It’s the economic model we’ve been using forever. Now that the people who justified that economic model are suffering the consequences of it.

      • saltycracker says:

        Stephan,

        Detaining and deporting 12 million or so is not realistic. What I said was, fix the law, “if a job is available, why not log them in, card them, tax them, account for them ?”

        I don’t have the statistics to challenge your position that exploitation saves enough for the consumer that we can afford the marginal costs for taxpayer services. But it is wrong.

        As for the illegal pickers we had a plan for years paying low wages or piece work for harvesting but it required some accountability on the part of the employer, like workmans comp and fair treatment. Third world illegals we can exploit does make the farmer more our blueberries cheaper.

        Education and communicating in a common language is important for society. Georgia doesn’t even do that for their legal citizens. But they will sure saddle them with student loans. It is ironic that the state provides so much info in more than a dozen languages to insure these folks get handouts and stay in their place.

        • Stefan says:

          Farm workers do not get workers compensation. In fact, they are exempt from many federal and state laws that protect workers. That’s part of the reason that’s where so many undocumented workers work. And yes, we can absolutely do all of that. It will result in higher prices and less efficiency, but I suppose those are costs we can bear. The entire realm of agribusiness needs reform, from the top down, ideally.

            • saltycracker says:

              And if you are right and legal farm workers are exempt, then your second sentence makes no sense as the cost is not there.

              • Stefan says:

                I thought we were talking about Georgia. These states exempt farm workers from workers compensation coverage: Alabama, Arkansas, Delaware, Georgia, Indiana, Kansas, Kentucky, Mississippi, Missouri, Nebraska, Nevada, New Mexico, North Dakota, South Carolina, Tennessee and Texas

              • Stefan says:

                this is my second sentence: ” In fact, they are exempt from many federal and state laws that protect workers. ” That’s true, for instance the Fair Labor Standards Act does not fully apply.

                Not sure how that doesn’t make sense. Farm workers are exploited and most Americans will not work under those conditions, but undocumented immigrants often accept those positions (though often based on promises not kept).

                • saltycracker says:

                  Apologies again – my eyes tricked me – it was the third sentence: “That’s part of the reason that’s where so many undocumented workers work.” Assumed your response would be Americans won’t do those jobs.

                  Our safety nets are higher. This leads to a lot more comments on the exploitation plus more on citizens that are unwilling or incapable of meeting the job market needs. But let’s not wear it out.

  2. View from Brookhaven says:

    I like Blacksburg. Lovely little college town. Beautiful campus.

    The rest of SW VA is beyond awful, though. Makes Dalton look like a prime vacation spot…almost.

      • Harry says:

        No, but banks are being pressured to make subprime loans even now and penalized if they don’t follow the rules. Wells Fargo just had to pay a huge penalty for not being politically correct – $160 million as I recall.

        • Stefan says:

          Eh, not sure that forcing minorities into sub prime loans when whites with similar lending profiles got prime rates is just politically incorrect when there are laws that cover such behavior.

          • Harry says:

            There should be only one criterion, creditworthiness. But in fact, the feds are pressuring the credit reporting agencies and would like to make your credit score meaningless.

            • Stefan says:

              That was the issue in the Wells Fargo litigation. Black and Hispanics that had equal credit worthiness as white borrowers as defined by the objective indices were given vastly different (and worse) terms in their loans. Mortgage origination is not the most transparent market for the consumer so problems like that are not easy to spot for the borrower.

              So I take it you were on the side of the plaintiffs in that suit as they made the same argument you just did.

              • Harry says:

                I’m on the side of whoever is asserting that one’s credit score and employment history should be the main criteria for making a mortgage.

                  • Harry says:

                    The American Spectator doesn’t agree with your source, The Boston Globe:

                    Just two weeks ago Wells Fargo caved to a Justice Department offensive and paid $175 million for alleged past discriminating against minority borrowers. All this occurred even though the bank received an “outstanding” grade in its most recent Community Reinvestment Act exam. The government did not even bother to prove discrimination in a single instance but relied instead on statistics showing lower rates of homeownership in minority neighborhoods. Thomas Perez, the Justice Department honcho who is spearheading this campaign, says banks discriminate “with a smile” and “fine print” and are “every bit as destructive as the cross burned in a neighborhood.” Nice objective evaluation there.
                    As in most such cases, Wells Fargo chickened out about going to court and refused to admit any wrongdoing but agreed to all kinds of diversity training and sensitivity counseling. The bank will have to “prominently display” a notice informing minority customers that they cannot be turned down for loans just because they are receiving public assistance such as unemployment benefits, welfare payments or food stamps. (Maybe they can even use food stamps for the down payment.) Wells Fargo must provide minority customers $50 million for down-payment and closing-cost assistance, including “Borrower Assistance Grants” of up to $15,000 per individual. It was also ordered to pay $125 million to as yet unnamed victims of previous discrimination. But get this! If those past victims don’t show up, the money must be handed over to community organizing groups. President Obama, you have a job waiting for you if you lose office this fall.

                    http://spectator.org/archives/2012/07/27/and-you-thought-the-housing-cr

                    • Stefan says:

                      The 15k was payment to 2k people who the gov’t could prove were shifted into a sub-prime loan when they qualified for a normal priced loan. The other payments, which were limited to 2k, were for those who had to pay higher fees than were paid by similarly situated white buyers.

                    • Harry says:

                      If that was really the case, then I have no problem with the settlement. But I’d like to see that real, specific facts were presented as evidence, and not just a statistical sampling of subprime vs normal mortgages made in certain low income neighborhoods.

                    • Stefan says:

                      Also, I think that American Spectator article may be conflating several of the lawsuits against banks, specifically the Pic-a-Pay suit against Wachovia which Wells defended after it purchased Wachovia.

                      Second, whether Wells got an A on Community Reinvestment has no relevance. It isn’t even from the same period as the actions that caused the lawsuit.

                      Additionally, this suit isn’t about neighborhood statistics – which seems to be the thrust of the excerpt above.

                  • Harry says:

                    If I understand you correctly, the court was presented with evidence of actual minority applications that were denied, while non-minority applications having similar credit scores and work histories were accepted? The articles I presented seem to indicate that the evidence was flimsy, based on neighborhood statistical data rather than specific cases. I find it hard to believe that such discrimination is really happening in the 21st century, but if so, then Wells Fargo deserves to pay.

    • Charlie says:

      The subprime business is very lucrative for both dealers, manufacturers, and lenders. As such, this sign means “return to normal”, not that we haven’t learned anything.

      The subprime housing debacle was different, manily because home mortgage lending had little variance for risk based pricing as well as the time it takes to foreclose on a house when someone who shouldn’t be a homeowner quits paying the mortgage.

      With subprime auto lending, the risk based loan pricing is severe (think the difference between 0.9% loans and 30% loans, i.e, 30 times higher interest – or more.).

      The subprime lenders are also able to repo a car in a matter of days if needed.

      Having been a banker and quite familiar with these operations, they tend to adjust their business models between a 1% and 2% loss ratio. That’s loss, not repo/late pay, which is much higher.

      Subprime lenders with a loss ratio of less than 1% are generally told they’re not being aggressive enough. These guys make money off risk. You don’t take enough risk, you’re not getting enough customers paying 30 times the cost of funds. You can afford to lose 1-2% of your investment when you’re making that kind of return.

      • Harry says:

        Correct, there’s a big difference between subprime mortgages and car loans. However, as the article points out, the government is a major stakeholder of Ally Financial, Inc. They are undoubtedly using subprime car loans to juice before the election the moribund GM, upon whose bailout taxpayers are going to lose $50 billion.

        “Ally, which was originally the auto lender owned by General Motors Co,is facing the expiration next year of preferred lending arrangements with GM and Chrysler Group LLCin which the carmakers subsidize zero-interest loans.”

        Next year – after the election – the Obamanation will pay much more for their car loans.

  3. Technocrat says:

    Simple apt -house rental school surtax based on number of children. It really pains me to see 5-8 children living with 4-5 adults in a 2 bedroom house in Cobb with 4-5 overnight vehicles.
    Totally absolutely against so many zoning laws yet COBB Zoning writes $220 tickets [not warnings] to 86 year old widows for having a ladder against their house.

  4. Tom Crawford’s Georgia Report is subscriber only btw… may want to see if any papers have run his story yet. 🙂

    “Stories are only available to paying Georgia Report members for the first 30 days after publication, then are available to everyone after 30 days.”

  5. Ken says:

    Read the Washington Monthly piece on conservative humor. It’s almost a book review that devolves into adolescent snarkiness with multisyllabic words. This is the highlight:

    There’s something karmically fitting about the fact that Miller, whose act requires an audience with deep cultural fluency and a finely honed sense of irony, has wound up performing for the boobs who watch The O’Reilly Factor. His fall has been long and precipitous, from the comedy flagship of Saturday Night Live to the graveyard of Fox News. Miller is too sharp not to recognize this himself.

    And despite the link verbage, the word “rage” is never used. Neither is “anger”. I didn’t bother to look for “peeved”.

    PS – I dispute that “karmically” is a word used by actual people.

    • Stefan says:

      Thanks for clicking through.

      1) It is a book review, but that’s just the platform for the larger essay.

      2) “Rage” is not used, but the overriding point of the article was that conservative shows can be funny, but they put politics ahead of comedy, and so their comedy became unfunny rants. Here is the opening description of Dennis Miller: “The change was striking not only because Miller was supporting a Republican, but because he lost his sense of irony and adopted the full complement of Fox News- Republican vices: the chest-thumping America-first bravado, the angry paranoia, the presumption of treasonous bad faith in anyone who didn’t share his views.”

      That last bit sounds like “rage” to me and I think overall that is a fair characterization of at least that part of the piece.

      Obviously the book is attempting to make a larger point about satire and the role of the Daily Show and The Colbert Report, but the reviewer/essayist doesn’t seem to go along with those points and the point about the conservatives’ priorities in their radio and tv shows was preeminent.

      However, I would be glad to change the language in that line provided the meter isn’t upset too much and it rhymes with “stage”. Suggestions?

      • Ken says:

        Nah, keep the language.

        Most good, important humor is driven by pain and anger. Lenny Bruce. Richard Pryor. George Carlin. Even Alan King. These were not happy men. At the very least they refused to accept the status quo without a fuss.

        As for the book, an analysis of “bits” would likely end in the results of, “We reviewed your comedic commentary on gay penguins. Here is a list of the eight words we deemed ‘funny’ based on decibel readings from the audience. They all exceed the standard deviation for noise level. In addition, despite repeated and heavy use, some words received no audience response. We suggest you drop the words ‘the’, ‘of’, ‘and’ and ‘but’ from all future comedy monologues.”

        • Calypso says:

          “We suggest you drop the words ‘the’, ‘of’, ‘and’ and ‘but’ from all future comedy monologues.”

          I always get a laugh from ‘but’, however my audience is usually third-graders.

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