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One Poverty Roll Please, Hold the Mayo! Print
Written by Shawn Fremstad   
Tuesday, 25 October 2011 11:15

Today's New York Times has a story on the disproportionate increase in income poverty among people living in the suburbs. Over the last 10 years, the number of people with incomes below the austere U.S. poverty line ($22,350 for a family of four) has increased by 53 percent in the suburbs, compared with a 26 percent increase in cities.

While the story was good, I was struck by a puzzling reference to "the poverty roll", which the story says has increased by 5 million in the suburbs. Searching for "poverty roll(s)" in NYT stories since 1851, I found about a dozen more stories and references that use the term, just about all of them from the 1990s and 2000s. This strange use of "roll" seems to be limited to poverty; there are no NYT stories referencing the growth in the "billionaire rolls" or the "Latino rolls" or noting the decline in the "middle-class rolls." 

What is a "poverty roll" exactly? The NYT uses it to mean "people with incomes below the poverty line." But this is very different from the actual definition of "roll" that seems most relevant here: "an official list or register of names." Thankfully, the United States doesn't keep any such list or register of the names of people living below the poverty line. A kind of poverty roll, known as a "Parochial List" — a list of "paupers" receiving relief from their local parish and of workhouse inmates — was kept under the English poor laws in the 18th and 19th century, so perhaps the NYT wants to evoke those happy times of progress for the working class.

So, the NYT is abusing the English langauge. Should we care? In this case, I think we should. One of the important progressive achievements of the 20th century was the "depauperization of poverty." This effort, as historian Alice O'Connor explains in Poverty Knowledge (p. 18): "recast public understanding of poverty by emphasizing its roots in unemployment, low wages, labor exploitation, political disenfranchisement, and more generally in the social disruptions association with large-scale urbanization and industrial capitalism." Modern statistical approaches to measuring poverty — which do away with the sorts of moral categorization that prevailed in earlier times — are a product of this movement. 

Terms like "poverty rolls" effectively repauperize poverty in a way that isn't helpful to progressive efforts to reduce it.  When people read a reference like "on the poverty roll," what most of them actually hear is something like "on the dole." Referring to the one-in-seven Americans who have extremely low incomes as being on some sort of imaginary "roll" dehumanizes them, and implies that they are a kind of passive and inert mass.  The Times would never use the term for other groups, they shouldn't use it to describe people with low incomes.

 
#OccupyThePress: Where is #OWS Headed? Print
Written by Alexandra Mitukiewicz   
Thursday, 20 October 2011 10:00

With all the recent attention and coverage of the Occupy Wall Street (#OWS) protest, there is great interest in what exactly is being protested and the movement’s future plans. Here is a roundup of recent articles and blog posts discussing the issues and agenda of #OWS.

#OWS issues:

Mike Konczal uses posts from the #OWS-related “We are the 99%” Tumblr to gather data and identify the common concerns of blog’s posters. His quantitative approach presents the concerns in a simple manner with informative, easy-to-follow charts.

While Henry Blodget does not touch upon all the popular #OWS issues, he does paint a great story through charts about unemployment, corporate profits, income inequality and the financial sector.

Mary Pilon highlights another major #OWS issue, student-loan debt, in the WSJ blog Real Time Economics.

Catherine Rampell’s NYT Economix blog post uses annual income statistics for the top 1%, providing more information about who makes up the 99% and 1% in the United States.

Read more...

 

 
Ending Loser Liberalism and Restructuring the Market Economy Print
Written by Dean Baker   
Wednesday, 19 October 2011 15:00

The growing nationwide response to the Occupy Wall Street movement displays a widespread discontent with the direction the country is taking. The economy is experiencing the worst downturn since the Great Depression, after a decade of bubble-driven growth. The banks who were the main culprits in driving the bubble are largely back on their feet, with top executives again enjoying the same sort of pay and bonuses as they had before the crash. Meanwhile the bulk of the working population continues to suffer the fallout from the crash in the form of unemployment, underemployment, and underwater mortgages. It’s not surprising that people are unhappy with this situation.

What is most important to understand is that this outcome is not just an accident of the market. The banks - who took great risk in extending the credit that fueled the bubble - are back on their feet because of extensive support from the government. This includes not only the $700 billion that Congress appropriated through the TARP, but the trillions more that were lent by the Fed through its special facilities at the peak of the crisis. In addition, an even larger amount of guarantees provided by both the Fed and the FDIC ensured that the banks could survive the crisis that they had helped to bring on.

The extensive government intervention that has allowed the financial industry to survive largely intact is not an exception. In other areas of the economy the interventions may be less transparent, but it is easy to identify ways in which the government has structured the market to redistribute income upward.

Read more...

 

 
Research for the 99% Print
Tuesday, 18 October 2011 09:30

The #occupywallstreet protests in New York City - and those around the country - have sparked a much-needed dialogue about inequality in the United States. The level of inequality in our economy has been growing for decades, and has reached a level not seen since prior to the Great Depression:

Share of Total Income, Top 1% of U.S. Income Earners

In a research paper from 2009, CEPR Senior Economist John Schmitt took a careful look at this sorry state of affairs and concluded that it "is not due to chance circumstances but is the direct result of a set of policies designed first and foremost to increase inequality." CEPR Co-Director Dean Baker's most recent book, The End of Loser Liberalism: Making Markets Progressive, examined the role of the government in "structuring the market in ways that ensure that income will flow upwards" and argues that progressives need to focus on preventing this, rather than acting after the fact on ways to re-redistribute income.

Going hand in hand with inequality is poverty, and CEPR Senior Research Associate Shawn Fremstad has written extensively on both of these subjects. In his most recent CEPR paper, he talked about how to frame the discussion on poverty. Previously, he examined how poverty is measured in the U.S. and concluded that the current poverty measure "is outdated and has failed to keep up with public consensus on the minimum amount of income needed to 'get along' in the United States in the 21st Century." He also looked at competing measures and presented one that was inclusive and more aligned with current views on poverty. 

In related work, CEPR recently co-sponsored an event on "Jobs, Inequality, and the Public Sector: Improving the Economic Competitiveness and Innovative Capacity of the U.S.", Schmitt summarized two reports on economic insecurity by the Institute for Women's Policy Research, and Fremstad reminded National Review Editor Rich Lowry of what "a more substantive conservative intellectual" had to say on the topic of the social contract and taxes.

For more of our work on inequality and poverty, please go here.

 
Clearing the Air on "Too Big To Fail" Print
Monday, 17 October 2011 16:23

With Occupy Wall Street continuing to build steam, Cato's Mark Calabria chose to engage in a little friendly fire. I like to believe that libertarians and progressives could come together to rewrite the rules of a rigged system, but Calabria seems interested in thickening the fog of war rather than clearing the air.

Cato's Mark Calabria leveled a strange charge at Joseph Stiglitz, suggesting that in 2002 Stiglitz and his coauthors (Jonathan and Peter Orszag) "sold their work to the highest bidder defending the system" of socialized losses and privatized gains. The paper analyzed the taxpayer risk of guaranteeing the debt of Government-Sponsored Enterprises (GSEs—primarily Fannie Mae and Freddie Mac) and found that under one of the two capital standards, the expected costs to taxpayers would be very low.

Of course, in 2011 this appears laughably naïve, given the many billions of dollars of support to Fannie and Freddie in the wake of the housing bust. However, Calabria's charge is utterly bizarre for several reasons. First, Stiglitz, Orszag, and Orszag specifically address the importance of "too big to fail" in taxpayer risk. Second, Calabria ignores the fact that risks grew considerably since the publication of the paper. Third, Calabria abuses some math in order to make it appear that the authors downplayed the potential costs.

Far from avoiding the question of "socialized losses and privatized gains," Stiglitz, Orszag, and Orszag rightly point out that the risk to taxpayers is far from limited to GSEs. They write,

"In the absence of Fannie Mae and Freddie Mac, mortgage risk would likely be held by large banks and other types of financial institutions, which themselves benefit from the perception that they are 'too big to fail.' Fannie Mae and Freddie Mac are among the largest financial institutions in the country. Even in the absence of a GSE charter it is likely that they would continue to benefit from their size, since the government has intervened on behalf of other large institutions in the past."
Read more...

 

 
How's That Hopey Changey Work Share Thing Doing? Print
Written by Dean Baker   
Monday, 17 October 2011 14:08

Just in case you were wondering, work share looks like it's doing pretty damn good in Germany, the country that has embraced it most aggressively. Since the downturn began in the fourth quarter of 2007 Germany's GDP growth has been only slightly better than in the U.S. However, while our unemployment rate rose from 4.8 percent in the 4th quarter of 2007 to 9.1 percent in the most recent quarter, Germany's unemployment rate fell from 8.3 percent to 6.0 percent for the same period. (The German unemployment data for the third quarter of 2011 does not include September.) 

Click to Enlarge

GermanyU.S._Unemployment_2904_image001

Source: OECD.

In fairness, work sharing is not the whole story. Germany has other programs that encourage employers to keep workers on the payroll. Germany also has a slower growing workforce, so it takes less GDP growth to keep pace with its underlying population growth. Still the contrast between Germany's 2.3 percentage point decline in unemployment and the 4.3 percentage point rise in the U.S. is rather striking.

 
#OccupythePress! Print
Written by Dean Baker   
Friday, 14 October 2011 15:51

The sun came up this morning and George Will doesn’t like the Occupy Wall Street (OWS) crew. He found some protestors there who said things that he found silly. For example, someone on Wall Street thought the minimum wage should be $20 an hour. That might seem a bit high, but if the real value of the minimum wage had kept pace with productivity growth since 1969 it would be almost $20 an hour today.

Will also seems to think that the bankruptcy of Solyndra is some incredibly damning piece of evidence against those who think the government can play a constructive role in the economy. I suppose that would be a compelling argument to people who have never heard of the Internet, Dos, penicillin or any of the thousands of other innovations that have benefited from government support. Also, the Solyndra failure may not seem that impressive to people who have seen the fraud and bankruptcies at companies like Enron, WorldCom, Lehman Brothers, and Bear Stearn. Maybe Will’s point is clearer to those who travel in his circles.

The idea of spending $1 trillion for infrastructure (much less than we are actually projected to spend in the next decade) also comes in for ridicule by Will. I guess he is blaming the OWS folks for thinking small.

He then warns progressives:

“From 1965 through 1968, the left found its voice and style in consciousness-raising demonstrations and disruptions. In November 1968, the nation, its consciousness raised, elected Richard Nixon president and gave 56.9 percent of the popular vote to Nixon or George Wallace. Republicans won four of the next five presidential elections.

Perhaps things will go better for progressives this time.”

Yes, Republican presidents did win those elections although it’s not clear how many people voted for George H.W. Bush in 1988 because of the Vietnam protests in 1968. More importantly, people should remember that Republicans in the White House created the Environmental Protection Agency, the Occupational Health and Safety Administration, proposed a more radical national health care plan than Obamacare, proposed a guaranteed annual income (like the one advocated by an OWS protestor that Will mocks) appointed Harry Blackman and John Paul Stevens to the Supreme Court and allowed us to have a 3.5 percent unemployment rate in 1969.

If President Obama supported measures that were as progressive as the ones pushed by Presidents Nixon and Ford, the Tea Party would be turning to nuclear weapons. It wasn’t that these Republican presidents were born radicals (I’m quite sure that neither were Moslem), they were responding to the pressures of their time.

If the #OWS protestors and their supporters around the country can sustain the momentum, then it can change the atmosphere in which the folks in Washington conduct their business. I suspect that few of them care whether Democrats or Republicans occupy the White House and Congress, they care about the policies pursued. If they can create an environment that results in presidents who push along a progressive agenda to the same extent as did Nixon and Ford, but it is Republicans who do the job, I doubt that many will be disappointed.  

 
Labor Market Policy Research Reports, Oct. 10 – 14, 2011 Print
Written by Alexandra Mitukiewicz   
Friday, 14 October 2011 15:35

A roundup of the labor market research reports released this week.

Demos

Worth Working For: Strategies For Turning Bad Jobs Into Quality Employment
Ben Peck and Amy Traub


Economic Policy Institute

Assessing the job impact of guidelines for marketing food and beverage products to children
John Irons


Institute for Women’s Policy Research

Valuing Good Health in Denver: The Costs and Benefits of Paid Sick Days
Kevin Miller, Ph.D. and Claudia Williams


National Employment Law Project

Filling the Good Jobs Deficit: An Economic Recovery Agenda for Our States and Cities
Anastasia Christman and Christine Riordan

Hanging On By a Thread: Renew Federal Unemployment Insurance to Aid Families, Boost Stalled Economy; Nearly Two Million Jobless Workers Face Premature Cut-Off in January 2012


Political Economy Research Institute

What Does the Literature Tell Us About the Possible Effect of Changing Retirement Benefits on Public Employee Effectiveness?
Christian E. Weller

 
The 'Regulation Impedes Job Growth' Story Has No Evidence Print
Written by Dean Baker   
Wednesday, 12 October 2011 11:45

Suppose the Republican presidential candidates blamed an invasion by space aliens for the failure of the economy to generate jobs. Would the media dutifully repeat it without comment? Given the media's response to Republican complaints about regulation preventing job growth, we should assume that they would view the space alien invasion explanation as perfectly reasonable.

If the story that regulation was impeding job growth were true, then there should be evidence to support it. For example, we should see firms increasing average hours as a way to avoid hiring workers. We don't: Average weekly hours are still below their pre-recession level. We should be seeing firms hiring temps as a way to avoid hiring more permanent workers. We don't see this, either. Temp employment is still down by almost 20 percent from its pre-recession level.

We should also see some differences in hiring patterns across industry: Industries in which jobs tend to be longer-lasting should be doing less hiring than industries in which the length of employment tends to be very short. We don't see this, either. Job growth has been relatively good in sectors such as engineering and law offices; it has been comparatively weak in sectors such as retail and restaurants, which tend to have high turnover.

We might also expect that businesses would blame regulation for limited growth when they are asked. They don't. The National Federation of Independent Businesses' survey of its members show little change in the percent of businesses that list regulation as a major obstacle from the Bush or Reagan years.

In short, the "regulation is impeding job growth" story has no evidence to support it. This story is a pure invention of the right wing. Presidential candidates who repeat it should be ridiculed by the media – just as if they were talking about space aliens.

This post originally appeared in The Guardian.

 
Stan Greenberg Appears to be Confused About the Effects of Conservative Block Grant Schemes Print
Written by Shawn Fremstad   
Tuesday, 11 October 2011 10:00

After writing about Elaine Kamarck's wrongheaded defense of the conservative 1996 Personal Responsibility Act, I remembered pollster Stan Greenberg's similarly odd claim, made in a widely read New York Times commentary published last July, that "Mr. Clinton's welfare reform in 1996 required efforts to make work pay and expand child care ...." 

No. It. Didn't.

Here, however, are some of the things that the 1996 measure signed by President Clinton actually did do: 1) block granted the Social Security Act's Aid to Families with Dependent Children program; 2) froze federal funding for the block grant—as a result, real federal funding today for the program is more than 25 percent below its 1997 level; 3) made many immigrants who are lawfully in the U.S. ineligible for various health and public benefits that citizens are eligible for; and 4) cut Food Stamp eligiblity and benefits for millions of families.

Among the things the 1996 law didn't do: 1) increase funding for any program; 2) require states who receive block grant funding to do anything to "make work pay"; 3) require states to do something as minimal as report on how many families they are helping with the vast majority of their block grant funds.

Read more...

 

 
Labor Market Policy Research Reports, Sept. 26 – Oct. 7, 2011 Print
Written by Alexandra Mitukiewicz   
Friday, 07 October 2011 15:30

A roundup of the labor market research reports released this week and last week.


Center for American Progress

Redefining Teacher Pensions: Strategically Defined Benefits for New Teachers and Fiscal Sustainability for All
Raegen Miller


CLASP-CEPR

How Much Does Employee Turnover Really Cost Your Business?


Demos

The State Of Massachusetts' Middle Class
Tamara Draut

Read more...

 

 
Health Care Job Growth Notable in Otherwise Dismal Report Print
Written by Dean Baker   
Friday, 07 October 2011 12:30

According to the latest Bureau of Labor Statistics' employment report, the economy added 103,000 jobs in September. While this increase — together with upward revisions to the prior two months’ data, which brought average job growth over the last three months to 99,000 per month — brings job growth almost exactly to the number needed to keep pace with the growth of the labor force, the jobs numbers are still really pathetic.

Nonsense talk of a double-dip has created an environment where even this dismal rate of job growth looks good. The truth is that the economy is continuing to grow at a very slow rate and we are making no progress in bringing the economy back to full employment. One notable bright spot in the latest jobs report is the health care sector, which added 43,800 jobs in September. This number is striking because this seems to be part of an ongoing trend. Health care employment has grown at a rate of 31,400 per month since June, accounting for almost one-third of employment growth over this period. In a very weak labor market, health care jobs are becoming ever more important.

For more, read the latest Jobs Byte.

 
Inflation: How Do You Spell Debt Relief? Print
Written by Dean Baker   
Friday, 07 October 2011 05:25

In his column today, Paul Krugman picks up the suggestion from Richard Yeselson, that debt relief for working people would be a good demand for the Wall Street occupiers to pursue. While there is a good logic to this demand -- many people find themselves facing crushing mortgage, credit card or student loan debt -- there are also problems with going this route.

For example, suppose we go the route of making every underwater mortgage above water by writing off the extent to which the debt exceeds the value of the home. As of what date do we wipe out underwater debt, today, six months ago, six months from now? That it isn't a joke, home prices are still falling in many areas. So do we say that people who were smart enough to be underwater as of some prior debt benefit, but folks who waited to get underwater are screwed?

Do we have a limit on debt write-offs? There are a lot of people who were speculating in homes who took out zero-down mortgages on expensive properties in places like Las Vegas and Miami at the peak of the bubble. Say they borrowed $450k on a home that is worth $200k today. Is it important to ensure that these people have their mortgages brought above water.

There is also the question of the other side of these loans. Close to half would of the underwater mortgages would now be held by Fannie Mae or Freddie Mac, so the write off would be a loss of government money. We can argue over whether this is the best use of it. Some of the rest of the mortgages are held by banks, but most are in pools. The owners of these pools include some rich investors, but it also includes institutional investors like pension funds and individuals with 401(k) holdings.

This raises both a question of fairness and also dampens the economic impact -- which has been hugely overstated in any case. If we eliminate $900 billion in underwater mortgage debt (certainly a high estimate, since it implies that almost 10 cents of every mortgage dollar outstanding represents underwater debt), we should expect the additional wealth to generate around $54 billion of additional consumption a year (this assumes a 6 percent wealth effect)

Read more...

 

 
Supplemental Security Income for Disabled Kids: A Success Story Conservatives Don't Want to Tell Print
Written by Shawn Fremstad   
Wednesday, 05 October 2011 09:45

Signed into law by President Nixon, Supplemental Security Income provides basic income supplements to adults and children who have severe disabilities and limited resources. The number of children with disabilities who are SSI beneficiaries is quite modest: about 1.2 million nationally in 2009, compared with 31.5 million children total in low-income households. But for these children the help SSI provides is extremely important.

Research has shown that families caring for children with disabilities are more likely to experience various economic hardships than families caring for non-disabled children, even controlling for income. This is no surprise since caring for children with disabilities is expensive, health insurance doesn't cover many added expenses, and raising a child with a disability can take a considerable physical, emotional and financial toll on parents. Research conducted by Mark Duggan and Melissa Schettini Kearney has shown that increases in the receipt of SSI by disabled, low-income children are "associated with a significant and persistent reduction in the probability that a child lives in poverty of roughly eleven percentage points" without reducing parental employment. In short, the hard evidence shows that SSI is a small program that works well. 

Read more...

 

 
Ken Rogoff Misses the Boat on Financial Speculation Taxes Print
Written by Dean Baker   
Tuesday, 04 October 2011 15:34

In a profession that is controlled almost exclusively by people who completely overlooked the largest asset bubbles in the history of the world, Ken Rogoff earns at least a “B” for his early warnings of dangerous economic imbalances. However, his column criticizing financial speculation taxes (FST) is more on a par with the work of his hopelessly lost colleagues.

The column argues that an FST of the size being considered by the European Union (EU) would reduce the information content of prices, reduce liquidity, and have no appreciable impact on volatility. In the long-run they will raise the cost of capital and therefore slow growth, and not end up raising much revenue.

This is a serious list of charges against a tax of 0.1 percent on a stock trade (0.05 percent on each side) and 0.01 percent on derivative trades (0.005 percent on each side). The most obvious reason for skepticism about Rogoff’s attack is that the increase in transactions costs implied by the tax would just raise them back to the levels of early or even mid-90s.

Computerization and deregulation has led to a sharp decline in transactions costs over the last three decades. A tax of 0.1 percent on stock trades would just remove part of this decline. Trading costs would still be lower than they were in the 80s and much lower than they were in 50s or 60s when they were typically 1 percent of the share price or more.

Read more...

 

 
Living on the Edge: Economic Insecurity Print
Written by John Schmitt   
Monday, 03 October 2011 14:00

The Institute for Women's Policy Research (IWPR) has released not one, but two, major research reports today. Both analyze rising economic insecurity and draw on the findings from a large survey commissioned by IWPR and the Rockefeller Foundation in the fall of 2010.

The first report, "Women and Men Living on the Edge: Economic Insecurity After the Great Recession" (pdf) is a comprehensive overview of widespread economic hardship, a situation that has continued almost unabated despite the official end of the recession in the summer of 2009. The official statistics tell us that the unemployment rate hovered around 9 percent in the fall of 2010. The IWPR/Rockefeller survey reveals this figure to be only the tip of the iceberg: more than one-third of respondents "reported that they or someone else in their household had been unemployed and looking for work for at least one month during the previous two years."

The survey provides many other extensions of the existing official statistical record of the downturn: whether families have savings for emergencies, their children's education, or their own retirement (a large share do not); whether families have had difficulty paying food, health care, housing, utilities, or credit-card bills (a large share do); whether adults were willing to learn new skills, increase the length of their commute, or take a pay cut to escape unemployment (a large share would).

Read more...

 

 
CEPR News September 2011 Print
Written by Dawn Lobell   
Monday, 03 October 2011 08:45

The following highlights CEPR's latest research, publications, events and much more.

CEPR on Social Security

While Social Security was spared during the latest round of budget negotiations, those who want to cut Social Security continue to assert their fallacious claims about the program’s solvency. CEPR provided Social Security allies with additional ammunition in September, releasing three papers on Social Security.

The Impact of Cutting Social Security Cost of Living Adjustments on the Living Standards of the Elderly,” by CEPR Co-director Dean Baker and Economist David Rosnick, looks at similar changes in the past and finds that workers would likely not be able to raise their savings in response to lowering the measure of inflation used to calculate cost of living adjustments for Social Security benefits (a change that was proposed by President Obama during the debt ceiling negotiations), leading to significantly reduced living standards of retirees.

Who's Above the Social Security Payroll Tax Cut?” by CEPR Director of Domestic Policy Nicole Woo, Research Assistant Janelle Jones, and Senior Economist John Schmitt examines the most recent Census Bureau data available from the American Community Survey to determine how raising the cap would affect workers based on gender, race or ethnicity, age, and state of residence. Raising the cap from its current level of $106,800 to a new level of $250,000 would affect only a small share of workers, but would strengthen the program and avoid increases in contributions from the middle-class and the poor.

In "The Social Security Benefits of Sitting Senators Revisited," CEPR Program Assistant Kris Warner, Domestic Communications Coordinator Alan Barber and Dean Baker updated CEPR'sprevious paper (incorporating the newest CBO projections) to show the scheduled Social Security benefit for each current member of the Senate. As CEPR’s Congressional Social Security Accuracy Campaign has shown, many members of Congress (and some presidential candidates) need a refresher course on Social Security. In the month of September, Dean Baker sent letters to Senator Saxby Chambliss and Representatives Paul Ryan and Mike Coffman, correcting misstatements they made about the program.

Dean’s August letter to Republican presidential candidate Rick Perry was mentioned in the New York Times’ “The Caucus” blog. His letter to Representative Ryan was reprinted in the Madison Capital Times, and an earlier letter to Senator Marco Rubio was reprinted in the Palm Beach Post. Since February 2011, 31 members of Congress and two Republican presidential candidates have received similar letters.

Read more...

 

 
Rich Lowry and the Heritage Foundation Need to Get their Stories Straight Print
Written by Shawn Fremstad   
Friday, 30 September 2011 10:45

Via Harold Pollack, here's the National Review's Rich Lowry on the economic struggles of workers who make "only" $250,000 a year:

[Warren Buffett] should give all his wealth away .... come move to Westchester County. Move to McLean, Virginia. Move to the suburbs of San Francisco with his wife. Adopt a couple of young kids, so he has a young family again. Make arrangements so that he only makes $250,000 every year. ... And see how he feels about seeing his taxes increased, when he actually has to worry about expenses, again.

McLean, Virgina and Westchester County are very wealthy places, with median incomes more than triple national median income. But Lowry need not worry about Buffet's ability to make ends meet in either place on $250,000 a year, at least as long as Buffet continues to avoid the intemperateness and profligacy that plague too many of America's elite today. Even in these places, $250,000 is a decent income—in fact, it's higher than the income of at least 90 percent of families living in Westchester, and $100,000 more than the median family in McLean County. 

Lowry would feel even better if he perused some of the Heritage Foundation's reports on the opulent living standards that prevail in today's America, even among families with much lower incomes. According to Heritage's Robert Rector, most American families living on less than $25,000 a year, one-tenth of les pauvres riches of Westchester and McLean, are able to meet what he calls "all essential expenses" and even have many luxuries like color TVs, VCRs, and coffee makers. Unfortunately, Rector doesn't provide similar statistics for families making over $250,000 a year. But given that they have incomes more than 10 times the amount of the families Rector focuses on, Lowry shouldn't waste too much time fretting about their ability to make ends meet.

 
Power/Knowledge/Framing Print
Written by Shawn Fremstad   
Thursday, 29 September 2011 09:45

In a recent post, Jared Bernstein notes that he doesn't "put a whole lot of weight on the importance of how issues are framed" arguing instead that "underlying power dynamics are what matters most, and history is littered with carefully, compellingly framed arguments that lost because one side had deeper pockets and greater access than the other." Relying in part on a NYT op-ed by Stan Greenberg from earlier this year, he concludes that progressives must "re-establish faith in the institution of government ... and that has to come from explanation, evidence, and effective implementation of government programs." 

A fair amount of what goes under the heading of "framing" these days is facile and I'm not really a fan of the word (a better description might be "constructing compelling narratives that are based on progressive values and don't just throw a lot of numbers at people" but that's a lot to say). I imagine Jared has some of the more facile stuff in mind when he critiques framing, but I can't say that I'm persuaded that "explanation, evidence, and effective implementation" are any more effective. Don't get me wrong, I love doing careful policy analysis and hope it makes a difference, but I also think doing it without paying as much (or more) attention to framing is folly for progressives. 

Read more...

 

 
Strong Increase for the Case-Shiller Index in July, But How Long Will it Last? Print
Written by Dean Baker   
Tuesday, 27 September 2011 11:30

The Case-Shiller 20-City Index saw another strong increase in July, this time rising 0.9 percent. The index rose 1.1 percent in June and has now increased at a 13.1 percent annual rate over the last three months; although it is still down by 4.1 percent over the last year. But unlike in June, when all 20 cities showed house price increases, 18 of the 20 cities had price increases in July, with only Phoenix and Las Vegas showing modest price declines (0.1 percent and 0.2 percent, respectively).

The strongest factor pushing up prices is the reversal of the sharp price declines in bottom-tier home prices in the period immediately following the end of the first-time buyers tax credit. Recent extraordinarily low interest rates will provide a boost to the market — though the scaling back of Fannie and Freddie’s higher mortgage limits will be a factor going in the other direction — but this upward bounce is surely coming to an end. The inventories of new and existing homes for sale remain above normal levels. In addition, there is a large amount of inventory not showing up on the market, which is best demonstrated by the near-record vacancy rate nationwide.

For more, read the newest Housing Market Monitor.

 
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