NoApparentMotive

Yesterday, CEPR released a new report [pdf] I wrote on the positive effects of unions on the wages and health and pension benefits of women workers.

Women now make up 45 percent of all union workers, and if the trend of the last 25 years continues, women will be a majority of the unionized workforce by 2020. By CEPR's estimate, unionization raises the average woman's wages by about 11 percent, the probabilty that she has health insurance by 19 percentage points, and the probability of having a pension by 25 percentage points.

These benefits of unionization compare well even to the payoff from going to college. Joining a union, for example, has roughly the same effect on a woman's wages as attending a single year of college. And a union job actually has a bigger impact on a woman's likelihood of having health insurance or a pension than if she gets a four-year college degree.

The report has already received some nice attention: a great op-ed by Jill Esbenshade and Doreen Mattingly in the San Diego Union-Tribune; a nice post on feministing by Jessica Valenti; and posts at Feminist Majority, Ms. Magazine, pushback, Labor is Not a Commodity, and elsewhere.

UPDATE 12/04/08: Girl With Pen now has a post on the piece, including a short interview with me.

I've been following the debate around the proposed auto bailout and have ended up commenting a bit in the media. Today I appeared on "Tell Me More," the NPR program hosted by journalist Michel Martin.

You can listen to the whole segment (about 20 minutes) here. The other two guests on to talk about the auto bailout were Washington Post columnist Warren Brown and Detroit-based journalist Mary Chapman.

UPDATE 12/03/08: On November 18, I participated in an hour-long public affairs program on the auto and financial bailouts on PressTV.com (video here); and, on November 25, I appeared with Jonathan Tasini on the Angie Coiro Show in San Francisco to discuss the auto bailout (podcast here).

Today's Guardian has an editorial entitled "In Praise Of ... the Center for Economic and Policy Research." It is hard to imagine higher praise for my employer. Here is the editorial in its entirety:

One of the best things about the internet is its ability to hold people accountable for what they've said in the past. Back before the internet, people such as Ben Stein and Arthur Laffer could make predictions that were horribly wrong with little or no consequences to their reputations. The internets, particularly YouTube, though, has changed all that. The video below contrasts the almost criminally incorrect economic analysis of Stein, Laffer, and a host of other economic talking heads and business-news hosts, with the completely prescient views of Peter Schiff.

I find the consistently mean-spirited dismissiveness aimed at Schiff particularly appalling. The apologists openly laugh at Schiff as he's speaking and the hosts subtely and at least one time openly mock him --providing some of the most compelling examples I've seen of exactly how social forces work to resist rational, evidence-based attempts to denounce financial bubbles.

Hat tip to Andrew Sullivan, via JB.

Is there a greater American than Bruce Springsteen?

I doubt it.

If you're an economist, and you think the economy needs a two-to-three percent of GDP shot in the arm, you have until November 14 to sign the economists letter that CEPR is helping to circulate. Joseph Stiglitz and Robert Solow (both Nobel Prize winners) and Eileen Appelbaum are the lead signers.

My sister called this the "greatest moment ever on Channel 6" (the ABC affiliate in Philadelphia). Hang in there for the first 22 seconds, even if you're not a Phillies fan.

Over at Business Week's Debate Room, I'm arguing the Pro side of the resolution: "U.S. Economy: Years of Hardship Ahead."

The Con-man is Ethan S. Harris, author of Ben Bernanke's Fed: The Federal Reserve After Greenspan.

Krugman wins the Nobel prize in economics. I think Krugman himself got it exactly right when he said: "To be absolutely, totally honest I thought this day might come someday, but I was absolutely convinced it wasn't going to be this day."

The best thing about giving the prize to Krugman was that they didn't double up, pairing him, for example, with the very unpleasant right-wing trade economist Jagdish Bhagwati "for balance."

I'm posting from the patio of Caffè Strada in Berkeley. In a few hours, I'll be giving a talk on low-wage work in Europe at the Institute for Research on Labor and Employement.

The Onion reprints a colonial recipe for "Salt Cake," which I reprint for the benefit of my sisters.

Two Large Buckets Sea-Brine
Four Pounds Jew's Salt
One and One Half Pounds Butter (Salted)
One Blueberry

Any lacking Ingredients May be substituted with 
double Parts Coal Cinders, excepting the Blueberry, 
for which Two Pinches Salt are recommended if the 
Fruit cannot be obtained.

The October 2 edition of The Economist has results from their poll of economists' views on the two main presidential candidates' economic plans.

Apparently, economists don't read The Economist much because they seem to love Obama.

This gets it about right.

(Via Adbusters. Thanks, Kris!)

My CEPR colleague, Mark Weisbrot, went all David Letterman on the International Monetary Fund today with: "Top Ten Reasons Why the IMF Should not Lead the Reform in Global Finance."

More details, including a video link and a slide presentation here.

As a public service to my friends who are confused about the bailout, I reproduce here almost all of Dean Baker's posts on the bailout, in chronological order from September 19 through this morning.

September 19, 2008

10:39PM

"Questions on the Bush Bailout Package"

September 20, 2008

9:24AM

"The Budget and the Bailout"

12:43PM

"Progressive Conditions for a Bailout"

2:52PM

"Paulson Proposal: A Blank Check for Proven Incompetents"

September 21, 2008

9:22AM

"Paulson Missed the Bubble and Understated the Financial Crisis at Every Point"

11:26PM

"Senator Shelby Doesn't Understand the Bailout"

September 22, 2008

10:24PM

"Stocks Fall Because Congress May Not Give Banks Windfall"

September 23, 2008

5:34AM

"Extending the Bailout: It's Simple, Sell Us the Company and You're In"

September 24, 2008

5:38AM

"Leonhardt is Wrong, Limiting CEO Pay is Not a Sideshow to This Bailout"

11:05PM

"Paulson Says Bailout Is Not Urgent"

September 25, 2008

5:05AM

"No Bailout: Stop Rewarding Incompetence"

5:54AM

"MarketPlace Radio Misleads the Public on the Crisis"

8:25AM

"The Washington Post and Peter Peterson: Two More Reasons to Oppose This Bailout"

11:15PM

"NYT Gets It Wrong: Credit Has Not Frozen"

September 26, 2008

6:33AM

"The NYT Wants to Prop Up Pets.com Stock Price"

2:45PM

"Bailing on the Bailout, or Is It Too Big to Bail?"

September 27, 2008

12:51PM

"Bailout Conditions: Ending Welfare as We Know it Now"

10:21PM

"Wall Street's Infinite Sleaze: Goldman and AIG"

September 28, 2008

12:31PM

"Financial Meltdown: The Day After"

September 29, 2008

5:21AM

"NPR Misrepresents Bailout"

6:09AM

"Why Bail? The Banks Have a Gun Pointed at Their Head and Are Threatening to Pull the Trigger"

8:57PM

"The Bailout Round II: Adult Version? "

10:28PM

"NYT Promotes Hysteria on Bailout Bill"

September 30, 2008

6:18AM

"The Stock Market Is Not the Economy"

10:19PM

"When Wall Street Needs Money, Rules of Journalism No Longer Apply"

11:09PM

"How Do You Make a DC Intellectual Look Less Articulate Than Sarah Palin Being Interveiwed by Katie Couric?"

October 1, 2008

5:27AM

"Thomas Friedman: Another Example of Bailout Support Due to Unthinking Fear and Anger"

5:46AM

"Economics Lesson for Reporters: Other Things Equal, a High Stock Market is a Transfer of Wealth from People Who Don't Own Stock to People Who Do"

2:40PM

"The Credit Squeeze Scare"

October 2, 2008

5:58AM

"Responsibility and the Bailout: Will They Resign If It Fails?"

10:20AM

"The Plunge in Commercial Paper"

12:16PM

"Washington Post Gets Its Argument for the Bailout Wrong"

October 3, 2008

5:27AM

"NYT Reports On Paulson's Role in the Great Heist"

5:38AM

"Letting the Bank Robber Fix the Bank's Books"

6:25AM

"The Problem Is House Prices, NOT Interest Rates"

Seems to be some problem with embedding this particular clip. Just in case, here is the direct link.

I've got three new papers out this month. The first, with CEPR's Rebecca Ray and Janet Gornick of the Graduate Center at CUNY, is on "Parental Leave Policies in 21 Countries: Assessing Generosity and Gender Equality."

The second looks at "Unions and Upward Mobility for Latino Workers" and is also available in Spanish.

The most recent paper, released today, asks: "The Reagan Question: Are You Better Off Now Than You Were Eight Years Ago?" Short answer: 23 of 25 selected indicators of economic well-being and economic performance are worse in 2008 than they were in 2000. The CEPR page where you can download the report also includes a section for comments. Let me know if you think I missed anything or got anything wrong.

Today is World Day Against Software Patents. Here is the press release from the Foundation for a Free Information Infrastructure.

While I was hiking out in Idaho last week, I had the chance to listen to "Evil Urges," the latest album from Louisville, Kentucky's My Morning Jacket. The New York Times called the album "superb," and compared the band to Lynyrd Skynyrd, Devo, the Clash, Pink Floyd and U2 (somehow leaving out Prince and Led Zeppelin).

Now that I'm back, I thought I'd check out their web page and find out about how to track down some of their music. While tooling around www.mymorningjacket.com, I found an incredible video constructed entirely from footage shot by hundreds of fans using their cell phones and digital cameras at the 2007 Lollapalooza.

Unfortunately, I can't embed the video here. The best place to watch it, though, seems to be at the current tv site.

Brad DeLong recently called attention to a fabulous graphic produced by Paul Kedrosky. Kedrosky took copies of Fed Chair Ben Bernanke's speeches at the Fed's 2007 and 2008 summer retreat at Jackson Hole and ran the text through Wordle. Wordle reads text and converts it into "wordclouds," which depict the most frequently used words in any selection of text --with each word's font proportional to its frequency in the selection.

Here is the wordcloud for Bernanke's 2007 speech:

Here is the wordcloud for Bernanke's 2008 speech:

As Kedrosky comments: "Anyone else get the feeling that Ben's more worried about the entire financial system than about mere mortgages?"

Wordle is very easy to use. For example, I copied all the text from NAM's front page and pasted it into Wordle. In a few seconds, Wordle spit out the following wordcloud:

Anyone else get the feeling that I've got a problem with President Bush?

So, my friend who voted for Bush in 2000 and 2004, but who says he will vote for Obama in 2008, emailed me a short while ago to say that Ted Kennedy's speech at the Democratic National Convention was outstanding.

I'd missed it because I was working, but was sure I could take a break and see it on the Democratic National Convention website. So, I headed on over to www.demconvention.com, found the link to video, and quickly learned that:

Thank god for YouTube:

"We are all called to a better country."

I haven't been posting much lately, but wanted to mention three recent papers I've written.

The first is a paper on how unions disproportionately raise the wages of lower wage workers.

The second, with Vicenç Navarro, criticizes the odd affection that important sectors inside the Spanish Socialist Party (PSOE) have for a "flat tax".

The final paper, with Eileen Appelbaum and Dean Baker, makes a series of recommendations for short- and medium-term economic policy with an eye toward stimulating the economy, alleviating the economic hardship caused by the downturn, and laying the ground work for promoting rapid, economically and environmentally sustainable growth.

Bill Clinton, on the campaign trail for his wife, in West Virginia last week: "The great divide in this country is not by race or even income, it's by those who think they are better than everyone else and think they should play by a different set of rules. In West Virginia and Arkansas, we know that when we see it."

I don't think that Rush Limbaugh could have said it better.

Hillary Clinton got it exactly right when she told George Stephanopoulos earlier this week that: "...for the last seven years [we've been] seeing a tremendous amount of government power and elite opinion basically behind policies that haven't worked well for the middle class and hard-working Americans."

Unfortunately, she chose to take her stand on an issue where she is dead wrong, so wrong that she certainly understands that she is dead wrong, which makes her stand an entirely cynical act. What economists on the left, right, and center all agree on is that a gas-tax holiday will not lower the price of gas by any significant amount, and therefore will provide little or, most likely, no relief to people struggling with higher gas prices.

The reason the tax cut won't make any difference is that the supply of gas for the summer is basically already fixed, a function of the lag time involved in turning oil in gasoline. Consumers have a maximum amount of money that they will pay for the volume of gasoline that will be available this summer. They will pay that price whether all of it goes to the oil companies or that same amount of money gets split between the oil companies and the government in the form of a tax.

The situation would be entirely different if the supply of gasoline could respond rapidly to the change in taxation. If that were the case, then the reduction in tax would encourage the refineries to increase supply helping to lower the price at the pump. Since that can't happen, lowering the tax basically amounts to a direct transfer from the federal government to the oil companies, with little, likely no, benefit for consumers.

But Clinton's position on this is even more cynical than that. She has chosen to take a stand against the economics profession on an issue that undermines the cause of progressives. It is not just that progressives --economists, environmentalists, opponents of sprawl, etc.-- rightly argue that energy should cost substantially more than it does now. It is that she could have chosen to take a stand against economists on any number of issues where economists as a block do, exactly as she said, push for policies that have not worked well for middle- and working-class Americans: welfare reform (which her husband signed in 1996); the recent bankruptcy bill (which she supported); trade policy (where her recent skepticism has been broad but shallow, and not nearly as well articulated as her position on the gas tax); a security transactions tax; and many others.

By choosing to fight her ground on the gas-tax, Clinton sends a not-too-subtle message that she isn't really serious about taking on the economics profession. Remember, just a few weeks ago, she suggested that she would deal with the housing-bubble collapse --an economic fiasco that almost the entire economics profession ignored (when they weren't positively applauding it)-- by appointing a blue-ribbon committee of Paul Volcker, Alan Greenspan, and Robert Rubin.

I thought I'd start a new series: great graphs I've known. The first set is from a story about Tiger Woods in the sports section of today's New York Times.

The first graph is actually a table, but the NYT graphics people have tweaked the table in a way that gives the whole thing the visual impact of a graph.

The point of the table is to show that Tiger Woods, different from the next top-five rated golfers, excels at the very aspects of golf that a statistical analysis determined are the key to success --getting on the green, putting, and "scrambling" (making par or better after missing the green in regulation); and, meanwhile, he actually doesn't do particularly well at aspects of the game that are less important, including driving distance, driving accuracy, and "going for it" (trying for the green in two on a par five or in one on a par four)-- things that are often the obsession of casual golfers.

So, why does this table work so well? First of all, the first three columns, which show the three most important aspects of the game, are set off using darker shading from the three (far) less important aspects in the last three columns. The first row, which includes a nice label "Percent Predictor of Score" with an arrow, determines the order of the columns, from the most important to the least important factor. The contrast in shading suggests the contrast in importance between the first three factors (28, 27, and 23 percent each of the overall predictive power) and the last three factors (3, 1, and 1 percent each of the overall predictive power).

Second, the three red circles draw attention to the three most important numbers in the table. Of the 200 golfers on the PGA Tour, Woods ranks 1st, 1st, and 2nd, in the three key components of the game. Going across the same row, it turns out that Woods is not particularly good at things that don't actually matter very much, including driving distance (ranked 38th) and driving accuracy (167th!). Moving down from the same red circles, the rest of the top-ranked golfers are all over the map when it comes to these three key skills.

The use of thumbnail photos of the golfers as part of the row labels is also a nice feature. The photographs add a Tuftean level of complexity to the table --and as much as any of the other features, help to turn the simple table into a graph. The photos instantly communicate information about age, race, and gender; and, for people who follow golf closely, the pictures may also trigger a wealth of associations concerning the golfers' playing styles and personalities.

Finally, the table includes a complete set of labels, definitions, and notes. Together, this explanatory text allows the table to tell almost the entire story detailed in the accompanying text. (Another of Tufte's principles.)

The same article also includes a series of graphs that show Woods's PGA rank (from 1 to 200) for several of the skills analyzed in the table above, in each year from 1996 through 2008. The first of these graphs shows Woods's driving accuracy over the past 12 years (right-hand portion of the figure):

The y-axis shows the years from 1996 through 2008. The x-axis shows Woods's corresponding "driving accuracy" rank on the PGA tour, from 1 ("BEST") to 200 (worst on the tour). (As the note hints, "driving accuracy" is based on the percentage of drives that end up on the fairway; according to the note, over the last five years, Woods has only hit the fairway 57 percent of the time.)

The graph has some nice features. First, the two-tone shading divides the figure and the PGA tour into two equal groups, one above and one below the median. The shading makes it easy to grasp that Woods was at or below the median for driving accuracy in all but two of the last 12 years. Second, the placement of the diamonds on the continuum from 1 to 200 allows us to see the distance from the top (or bottom) in a way that would be less apparent if the data were presented as a simple connected line graph with rank on the y-axis and the year on the x-axis. (And note that a simple bar chart, another typical choice in this kind of situation, would be a bit confusing here because low ranks are "good" and high ranks are "bad".) Finally, the display makes it easy to see Woods's drift over time toward less (relative) accuracy.

Another great feature of this kind of graph is that it is easy to use to compare a golfer's relative performance across different aspects of the game. A subsequent figure in the same article summarizes Woods's putting performance (the second most important predictor of a golfer's score). The graphic in the lower right-hand corner below is constructed exactly as in the preceding graphic:

When it comes to putting, it is immediately obvious that Woods has been in the top half of the PGA for almost his entire career. It is also obvious that he has been at or near the very top in five of the last six years. The graph also allows for a quick and meaningful comparison of driving accuracy and putting performance, something that is not an obviously easy thing to do. Driving accuracy is measured as the percentage of tee-offs that land on the fairway, while putting performance is measured as the percentage of putts sunk. There is no reason that a golfer's percentage score in one category is in any way comparable to the golfer's percentage score in the other (think of trying to compare a baseball player's batting average to his or her fielding percentage). By ranking golfers within each category, however, the data become much easier to compare.

Woods is a much better putter, relative to his competitors, than he is a driver, again, relative to his competitors. And, we already know from the table above, that being relatively good at driving doesn't count for much when it comes to winning, while being relatively good at putting counts for a lot.

Five years after the invasion of Iraq and just shy of five years after it became evident to anyone with a television set (let alone an internet connection) that the war has been an utter fiasco with a death toll in the hundreds of thousands, I am close to sick to my stomach every time I hear another early and active war promoter tell me that this is no time to assign blame, that there will be plenty of time for that later, but that this is now the time to figure out how to move forward.

John McCain is the most prominent person making the argument, but Princeton University's Anne-Marie Slaughter has just made the point at the Huffington Post. And Glen Greenwald has responded so comprehensively that I don't know how Anne-Marie Slaughter will be able to show up for work on Monday morning.

Dean Baker called my attention to a new web page: http://www.youwalkaway.com/, operated by You Walk Away, LLC. The site offers to help you "use our proven method to Walk Away" from your mortgage in order to "[u]nshackle yourself today from a losing investment" in your house.

The spread of this kind of thinking has got to be the biggest nightmare facing mortgage lenders (and the rest of the financial markets). The thing is that the economic logic is pretty impeccable. As You Walk Away points out, mortgages are generally "no recourse" loans, which means that if the home owner defaults, the lender can only recover the house --mortgage lenders can't legally go after other assets, even money in the bank. (And mortgage defaulters don't have to file for bankruptcy in order to protect themselves.)

Of course, following this path will have a big, negative impact on the defaulter's credit rating. But, for many home owners standing to lose 20 or 30 percent, even more, of the value of their house, the bad credit rating might well be worth the price.

Dean reports hearing about cases where homeowners walking away from their current house arrange to buy a new house while their credit is still intact. Once they've moved into the new place, then they default on the old one. Lenders can not be happy.

In case you missed it, yesterday President Bush endorsed John McCain. Dan Froomkin points out today that the endorsement doesn't even rate a mention on the Republican National Committee web page (www.gop.com). Meanwhile, the Democratic National Committee is running the Bush endorsement as a splash page on its own web page (www.democrats.org).

Ahh, Karl Rove --a political genius who has built a permanent Republican majority around the figure of George W. Bush.

Ben Zipperer and I have just finished our third annual review of trends in overall unionization, and employment in manufacturing and auto-manufacturing, among African Americans.

In 1983 (the earliest year for which consistent data are available), 31.7 percent of black workers were in unions. By 2007, only 15.7 percent of black workers were unionized. The 2007 rate for blacks is still above the level for whites (13.5 percent) and Latinos (10.8 percent), but in 1983, African-American workers were about 50 percent more likely than the average worker to be in a union and today they are only about 25 percent more likely.

In 1979, almost one in four African-American workers was in manufacturing. In 2007, the figure was fewer than one in ten. Amazingly, in 1979, more than 1 in 50 of all black workers in the country worked in the auto industry. Today, it is 1 in 100.

Shawn Fremstad, Rebecca Ray, Liz Chimienti and I have a new paper out with suggestions on how to reform the country's social contract in order to provide a bridge to the middle class for the working poor and those currently caught somewhere between poverty and the middle class.

Among other things, the paper serves as a nice summary of the work that my former CEPR colleague, Heather Boushey (now at the Joint Economic Committee), our colleagues at Inclusion, especially, co-author Shawn, and I have been developing at CEPR in various combinations over the last several years.

The part of the paper that has so far generated the most feedback is a text box where we call for a reform of "America's Regressive Welfare State":

It is hard to keep up with the amount of music being generated by --well, more accurately, for-- the Obama campaign. This corrido is maybe my favorite so far.

Some of my Obamaniac friends with ties to Latin America, though, prefer this reggaeton:

If you've seen the Barack Obama "Yes We Can" YouTube video with will.i.am from the Black Eyed Peas, you've got to see this new YouTube video "for" John McCain.

Really, is there anything better than the internet?

Well, it sure looks like we're in a recession. The data are discouraging, and the latest poll shows that the American people are already convinced.

While recessions mean forced leisure for many, they create plenty of work for labor economists. Early in January, Eileen Appelbaum, Dean Baker and I wrote a proposal for a stimulus package. By the middle of the month, the economy had deteriorated so much --more accurately, the conventional vision of the economy had deteriorated so much-- that President Bush and the Congress ended up negotiating and approving an even bigger stimulus than we had dared consider just a couple of weeks earlier.

By the end of the month, Dean and I had written another paper on the recession, this one arguing that the economic and social impact of the recession will be large and long-lasting. (The New York Times quoted the report and Dean yesterday.)

In advance of President Bush's final "State of the Union" address, Americans United for Change's Bush Legacy Project has distributed buttons that say "I'm a Bush Republican" to every Republican member of the House and Senate. The BLP is going to keep track of how many Republicans show up to the speech wearing the button.

Here's the video from American's United for Change:

The video's OK, but the underlying idea is genius.

The President's economic stimulus plan didn't arrive in time for the AMC Dupont 5 movie theater. When I walked past it today (just south of Dupont Circle), I saw a small sign in every one of the windows announcing that the diminutive movie house, which used to show the best of first-run movies and a decent assortment of independent films, closed on January 14th.

I've lived in Washington for 15 of the last 23 years and have seen a lot of cinemas close: the KB Foundry, the Cerberus 1-2-3, and the Key, all in Georgetown;, the Circle, the Inner Circle, the West End 1-2-3-4, and the West End 5-6-7, in Foggy Bottom and the West End; the Janus 3 (the most disgusting place to see a movie in the whole city, but well-loved nonetheless) and Visions in Dupont Circle; the MacArthur, the Odeon Wisconsin Avenue, the Outer Circle and the Jennifer I & II, in upper Northwest.

The biggest loss, though, was the Biograph, the brilliant repetory movie house in Georgetown. They used to sell a book of 10 or 20 tickets (I can't remember) at a reduced rate and I think while it was open I always had one. In the mid-1980s, my brother worked there while he was an undergraduate at GW. They closed it down in 1996 and turned it into a g-d damned CVS, because that is something that Washington needed more of. (Jef. Hyde has a posted a nice tribute to the place.)

It isn't all bad news. The Regal Gallery Place 14 (yes, 14!), which opened in Georgetown in 2004, is a decent place to see first-run movies. The Landmark E Street Cinema also opened in the same year and goes part of the way toward repairing the damage done by the departure of The Key and the Biograph.

Of course, Bush and Bernanke probably couldn't have saved the Dupont Circle 5, even if they had acted in time to save the rest of the economy. Obviously, the real reason for the death of DC movie theaters is some combination of rising rents in prime locations and the arrival of cable TV, VHS, DVDs, pay-per-view, the internet, and Netflix --all welcome developments on their own, but bad news for DC movie houses, for sure.

I was home sick earlier in the week and managed to watch four episodes of "Friday Night Lights," NBC's drama about high school football in small-town Texas. My friend, DH, a Texan and a born-again football fan, had recommended the series, and NBC has posted the entire first two seasons online.

"Friday Night Lights" isn't the "Sopranos," but the executive producer is Jason Katims, one of the forces behind "My So-Called Life" and "Roswell," and the show is well written and well acted. I particularly like the indirect, but compelling depiction of economic life in contemporary America. When the star quarterback is paralyzed after a tackle in the first episode, the town holds a "pancake supper" to raise funds to pay for his long-term rehabilitation --because we don't have a national health insurance system that would, in any comparable world economy, cover those costs. The backup quarterback lives alone with his elderly and disoriented grandmother while his father is on duty in Iraq --because we provide little in the way of elder care in this country. The white fullback lives with his older brother and without his parents in a run-down house. The black halfback lives with his mother and siblings and without his father in a run-down house on the wrong side of town. The fullback's girlfriend and the replacement quarterback both work in dreary food service jobs, because they have to. The head coach struggles to pay for the air conditioner that dies, and lives in a house and drives a car that match his public-school-teacher income; his wife gets a job, also working at the local high school, to help them make ends meet. Only the head cheerleader's family, whose father owns the local car dealership, is obviously well-to-do.

The show also deals in a convincing way with a lot of themes surrounding our national character and identity. Chief among these is competition. Masculinity is also a core issue. A third, more subtle, theme is the role of religion in community life in much of the country. Teachers and students regularly pray as part of school-team functions. Students spontaneously pray and unselfconsciously organize prayer meetings for the injured quarterback. And everyone, it seems, goes to church on Sunday --it's about god, but it is also about community and identity.

Anyway, worth checking out online.

Eileen Appelbaum, Dean Baker, and I have put out a proposal for providing stimulus to the failing economy. Like several other proposals under discussion, we've organized our stimulus package around a one-time tax cut, in our case, a one-time $600 tax cut for all workers.

Our proposal, however, differs in two ways from several others out there already. First, we call for a substantially higher level of fiscal stimulus --$140 billion or about one percent of GDP-- than many are promoting.

Second, we emphasize trying to make some of the stimulus do double-duty addressing environmental problems. With this in mind, we propose a 30 to 40 percent tax credit for households and businesses that make quick investments in reducing greenhouse gases, including insulation, solar energy, and windmills. (An additional feature of this proposal is that it would throw a life-line to out-of-work contractors and construction workers hit hard by the housing bust.) We also suggest that the federal government give local governments $7 billion to finance temporary reductions in the cost of local public transportation fares. (We'd love for these to be permanent, but the issue at hand is to take rapid action to help turn the faltering economy around.)

My friend and colleague, Andrew Glyn, died on December 22. In addition to being one of the world's leading thinkers on postwar capitalism, Andrew was one of the finest people I've ever met.

There are two easy ways to honor Andrew. The first is to read his books, which include Capitalism Unleashed: Finance, Globalization, and Welfare (Oxford University Press, 2006), British Capitalism, Workers, and the Profit Squeeze (Penguin, 1972, with Robert Sutcliffe), Capitalism in Crisis (Pantheon, 1972, also with Robert Sutcliffe), and Capitalism Since 1945 (Basil Blackwell, 1991, with Philip Armstrong and John Harrison).

The second way to honor Andrew is to sponsor his daughter, Tessa, who will be running the London Marathon on April 13 to raise funds for Sobell House Hospice, where Andrew spent his last days.

The Guardian ran a nice obituary by Andrew's long-time collaborator, Bob Sutcliffe.

Paul Krugman's new blog at the New York Times has a favorable post on my piece with Dean Baker on the recent sharp slowdown in US productivity growth.

Mark Thoma's Economist's View also has a post with a lively discussion.

Dean Baker and I have a piece in today's online "Comment is free" section in The Guardian. The piece calls attention to the worrisome decline in labor productivity growth in the United States since mid-2004. (Productivity growth boomed 1995 through the first half of 2004.) Our basic argument is that the US economic model not only fails to produce equitable economic and social outcomes, but is now not even delivering strong productivity growth --the single most important determinant of long-term economic well-being (at least as economists typically measure it).

An important strain of the comments posted on the "comment is free..." site so far questions the social usefulness of growth. This is a legitamite point. In the rich countries, we already have plenty --it is just unequally distributed. In poor countries, however, economic growth still has a lot to contribute to improving economic and social conditions of billions of poor people.

The argument against economic growth, however, doesn't apply in the same way to productivity growth, which is the focus of my piece with Dean. Productivity growth means that we can produce more now in an hour of work than we could in an hour of work in the past. Higher labor productivity therefore implies that, in principle, we can work less and still obtain the same material standard of living. In fact, much of Europe has chosen this route, taking the benefits of higher productivity growth in the form of more vacation days and a shorter working life. The shorter work hours have a tremendous positive effect on the environment, as my colleagues David Rosnick and Mark Weisbrot have argued in a comparison of the US and European economies. In one calculation, Rosnick and Weisbrot estimate that if the US workers worked on average only as many hours per year as European workers do, the United States could have come within just a few percentage points of the cuts in carbon dioxide consumption that would have been necessary to meet our obligations under the Kyoto protocol.

[Via Josh Marshall's Talking Points Memo] The Spanish daily El País has obtained the transcript of a private conversation between President Bush and then-president of Spain, Jose Maria Aznar, on February 22, 2003, during the final run-up to invasion of Iraq.

For me the most striking impression is how lucid, relaxed, and confident President Bush sounds. The transcript may have been tidied up, but he speaks in full sentences and full paragraphs, something he rarely does in public, unless he is reading from a prepared text.

I may write more later, but for now I want to highlight one point. Early on in the conversation President Bush tells President Aznar that, according to Egyptian sources (and apparently with some independent corroboration from Gaddafi in Lybia), Saddam Hussein would be prepared to go into exile if he were allowed to take $1 billion with him, as well as, as Bush put it "...all the information he [Hussein] would like on the weapons of mass destruction." (Presumably, the documents Saddam Hussein would need to cover his tracks and his ass.)

So, for $1 billion, we could have averted the Iraq War? Why wasn't that a serious, publicly debated, option on the table? Since we didn't have the imagination to envision this option or to take it seriously, hundreds of thousands of people have died, we're on our way to spending a half a trillion dollars, probably a trillion before all is said and done, Iraq is in a civil war, and now we're staring at another possible war with Iran. Who thinks that those would not have been $1 billion well spent?

Yesterday, Dani Rodrik ran an online straw poll of which economist his readers would most like to see take up blogging. Well, the results are in. In first: Nobel Prize winner Joseph Stiglitz. A close second: John Bates Clark medal winner Daron Acemoglu.

According to a story in yesterday's Washington Post, in his forthcoming autobiography, former Mexican president Vicente Fox calls President Bush: "...'the cockiest guy I have ever met in my life' and a 'windshield cowboy' afraid to ride a powerful horse."

Meeeeoow, pardner.

I had lunch yesterday with an economist friend who is writing a book on globalization. We spent some time talking about the politics and economics of "outsourcing" and "offshoring" and I mentioned to him an almost certainly apocryphal story I heard back in 2004.

As the story is told, a US-based computer programmer wrote a post on geek-site Slashdot announcing: "About a year ago I hired a developer in India to do my job. I pay him $12,000 out of the $67,000 I get. He's happy to have the work. I'm happy that I have to work only 90 minutes a day just supervising the code. My employer thinks I'm telecommuting. Now I'm considering getting a second job and doing the same thing."

I've searched Slashdot's archives and haven't found the original post. The source, rather, seems to be a story in the India Times in July 2004. (Let me know if you have any evidence that a Slashdot post does exist.)

Whether this act of outsourcing ever really happened or not is irrelevant. The story illustrates an essential aspect of globalization (and technological change, too). Our relationship to the process, not nearly so much the process itself, is what overwhelmingly determines our attitudes.

If US workers "owned" their jobs, and could do what this programmer claims to have done (albeit, surreptiously), I think most of the US work force would be vocal supporters of outsourcing.

In the economy we live in, however, firms "own" the jobs and pocket all the benefits of outsourcing (except any resulting price declines for consumer products --which are a fairly small compensation for your lost job, health insurance, and pension).

In standard trade theory, the gains to the owners of the firm are sufficient to compensate the losses to the firm's workers. In practice --in the United States, at least-- the winners in globalization (or technological progress) actively resist sharing any benefits of globalization with the losers. I take this as evidence that the benefits of globalization are probably substantially smaller than proponents claim. If the benefits were large, there would be plenty of money to make a deal with the losers.

One last point. In the example here, the US programmer comes across as pretty clever. At the same time, I find myself judging the guy (I'm guessing that the likely fictitious programmer is a guy) for exploiting his Indian counterpart, especially, when the US programmer announces the idea of getting another job and hiring another Indian programmer. (Until that point, I saw the US programmer as, fundamentally, a peace-loving slacker. When he wants to sign up for another job, he suddenly sounds greedy.) Sure, the Indian programmer is happy to be earning $12,000, but it is purely an accident of birth that lets the US programmer net $55,000 a year from the deal for working 90 minutes a day, while the Indian programmer makes $12,000 a year for working what is presumably something like a full-time job. (I'm leaving aside that it is much cheaper to live in India than it is to live in the United States, let alone Northern California.) The arrangement essentially personalizes the exploitation of the Indian programmer, and I find it interesting that I react viscerally to that in a way that I don't when it is a US software company doing the same thing --and screwing a US programmer, to boot.

The current issue of The Nation has an excellent piece on the bursting of the housing bubble by my friend (and boss), Dean Baker. Dean spells out how we got in the mess we're in and suggests a few things we can do to ease the pain a bit.

For those of you trying to figure out what to do with your retirement savings, Dean makes an interesting aside. "When it comes to recessions, the professionals seem to be the last to find out: On the eve of the last downturn, in the fall of 2000, all the Blue Chip 50 forecasters predicted solid growth for the following year."

General Petraeus and President Bush both made a lot last week of military and political progress in Anbar province.

Meanwhile, Gary Langer, director of polling at ABC News, had an excellent op-ed in the New York Times on Sunday describing what that success looks like:

No residents of Anbar who participated in the survey --no one-- supported the US presence in Iraq. One hundred percent of Anbar residents --every single one-- said it was "acceptable" to attack US forces. Does that ever happen in surveys? Unanimous opposition to the US presence. Unanimous agreement that it is acceptable to attack US forces. And this is the place the President Bush and General Petraeus say we are making progress.

Can someone in the press ask President Bush for a reaction?

(Best news of the week so far is that the New York Times has abandoned Times Select, so I can now link to stories in the NYT.)

The Dow Jones Industrial Average jumped 335 points --about 2.5 percent-- today after the Fed announced its decision to cut the federal funds rate a half point (from 5.25 percent to 4.75 percent).

The Fed did the right thing. If Fed Chair Ben Bernanke wanted to bolster his anti-inflation credentials --at the expense of the economy-- he could have cut the rate only a quarter point, or even kept the benchmark rate unchanged.

Unfortunately, even the Fed's fairly forceful action hardly leaves us out of the woods. The other big story today was that home foreclosures more than doubled in August relative to their number a year earlier. Total foreclosures were up 36 percent just between July and August.

The number of foreclosures is actually pretty staggering. If we can believe the numbers produced by Realty Trac Inc., the source of today's foreclosure stories, we've had about 1.35 million foreclosures between January and August of this year. By comparison, over the same period the US economy has only generated about 708,000 jobs. So far in 2007, we've had almost twice as many home foreclosures as new jobs.

Ben Zipperer has a great page on running Ubuntu 7.04 on a Thinkpad X60s (exactly my configuration).

My friend, DH, called my attention to a useful new blog: Backyard Briefing ("News from the rest of America"), run by British journalist Ben Whitford.

The site provides a nice daily (weekdays) review of the US (and sometimes, UK) papers' coverage of Latin America.

For years I've been looking for a site that does a similar review of Latin American newspapers or the papers in a particular Latin American country. If you know of any, please let me know at without [dot] motive at g m a i l [dot] com.

The Associated Press reports today that women in US-ally Saudi Arabia are organizing to demand the right to drive.

One of the leaders of the newly formed Committee of Demanders of Women's Right to Drive Cars declared: "We would like to remind officials that this is, as many have said, a social and not religious or political issue. And since it's a social issue, we have the right to lobby for it." You know, because women in Saudi Arabia don't have the right to lobby on religious or political issues.

The AP concluded, however, that: "The government is not likely to respond to the plea because the issue is so sensitive and divisive."

I thought one of the reasons we invaded Afghanistan --in addition to capturing OBL dead or alive-- was to free women from the oppressive rule of the Taliban. I know that Mrs. Bush was very worked up about the issue at the time. Maybe Mrs. Bush just doesn't know that women are not allowed to drive in Saudi Arabia?

If you didn't read Bob Woodward's piece in Friday's Washington Post all the way through to the fifth-from-the-bottom paragraph, you would have missed this astonishing quote from Alan Greenspan's new tell-all book: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

Wow. Will someone please ask President Bush to comment on The Maestro's take on the war?

A friend's email today reminded me that Michael Lewis is writing some of the best commentary out there on the state of the US financial markets. Lewis's last two columns for Bloomberg are worthy of the Daily Show: A Wall Street Trader Draws Some Subprime Lessons (September 5) and A Wall Street Trader Learns Some Taxing Lessons (September 12).

The first piece is so dry that some overworked and underpaid anti-poverty advocates in Washington initially thought the piece was for real. Maybe kinda the way that some far rightwingers' first impression might be that Stephen Colbert should be on Fox, instead of languishing away on some obscure cable TV station.

After really letting me down yesterday, General David Petraeus today almost made me think that there is a chance that we might get out of Iraq in my lifetime.

Under questioning from Senator John Warner (Republican, Virginia), in a moment of remarkable candor, General Petraeus --the commander of the Multinational Forces in Iraq, President Bush's man in Baghdad-- told the American people that he doesn't know whether the more than 3,000 troops and going on a half-a-trillion dollars we've dedicated so far to Iraq is actually making America safer.

Warner's question sets a remarkably low bar: is what we are doing "making America safer"? Not: "Do you believe that this is the best way to spend 3,000 lives and a half-a-trillion dollars?" Just: is what you are doing "making America safer?" And the guy in charge doesn't know whether that is the case.

Here's the transcript:

And here's the video, courtesy of YouTube:

The Economic Policy Institute's Josh Bivens has an interesting and pessimistic new paper on "Globalization, American Wages, and Inequality" [pdf].

Among other things, the paper updates a simple model developed by Paul Krugman back in 1995 to look at the effects of trade on wages. Back when Krugman published the model and his related empirical findings, the goal was to demonstrate that the small share of trade with low-wage countries meant that globalization couldn't possibly be having much impact on US workers' wages. Josh, who notes that trade with low-wage countries has expanded considerably since 1995, now finds that the same model suggests that the inflation-adjusted wages of roughly the bottom three-fourths of the US workforce have fallen about four percent as a result of import competition from low-wage countries.

A key point here is that these effects are not confined to manufacturing or other workers in direct competition with low-wage workers (call-center workers, for example). The magic of the market ensures that the effects of job losses spread throughout the economy. Workers that lose their jobs in manufacturing look for work in services. The extra supply of workers looking for service-sector jobs then drives down the wages there, too.

The paper also includes a nice table summarizing a wide range of estimates of the current and future number of jobs vulnerable to outsourcing. (See his Table 2.)

I really hope I'm wrong, but my first take is that the Bush Administration got a lot of aid and comfort today from General Petraeus. He certainly conveyed the idea that the United States is making military progress on the ground in Iraq, and offered at least one metric to support his view: Iraqi civilian deaths are down since the surge started.

The funny thing is that the evidence and the methodolgy that General Petraeus uses to support his claim all appear to be classified. Meanwhile, Spencer Ackerman of Talking Points Memo, has assembled data from two independent sources --the Associated Press, and Iraqi Body Count-- and finds almost the exact opposite.

The graph below, from TPM, compares the independent AP and IBC counts, to the data General Petraeus presented today. (Click the graph for a larger version.)

A few observations about the chart. First, according to AP (green bars), Iraqi civilian deaths have been higher in every month in 2007 than they were in the same month in 2006. Second, the same is true for the IBC data (yellow bars --the IBC reports a minimum and a maximum range, the data here are the IBC minimum), except for June, which experienced a decline in 2007 relative to 2006. (IBC data for July and August are not yet available.) Finally, the general's numbers (purple bars) show no distinct downward trend after a sharp drop between December 2006 and January 2007 --before the surge got under way.

(Thanks to Dean Baker for suggesting the title of this post!)

Economist Frederic Pryor of Swarthmore College, has a new "Note on Gambling in Industrialized Nations," which includes some estimates of total gambling expenditures per adult, expressed as share of each countries' net disposable income (basically, after-tax income).

Apparently, speaking English and gambling go hand-in-hand. Five of the top six gamblingest countries are English-speaking (Australia, Ireland, New Zealand, Canada, and the United Kingdom --of course, they speak French in Canada, too). The United States, though, was way down the list at 13th.

The underlying data, from Global Betting and Gaming Consultants, have their problems, which Pryor discusses, but they show Australians spending an astonishing 5.9 percent of their net disposable income on gambling. In the United States, we keep it to just 1.8 percent, which still strikes me as pretty high: basically, by Pryor's calculations, Americans, on average, gamble away just under one work-week of their earnings per year.

Via Dan Froomkin's White House Briefing:

Here's the link to Conway's story.

Anil Hira of the Political Science Department at Simon Frasier University in Canada has written a paper called "Should Economists Rule the World? Trends and Implications of Leadership Patterns in the Developing World, 1960-2005." I haven't read the piece, which appears in the current issue of the International Political Science Review, but here are a few lines from the abstract:

In honor of Labor Day in the United States, CEPR released a paper that Margy Waller, Shawn Fremstad, Ben Zipperer and I have written on "Unions and Wage Mobility for Low-Wage Workers".

The paper argues that our efforts to improve the standard of living of low-wage workers focus too much on "improving" low-wage workers and not nearly enough on improving low-wage jobs themselves. A large share of low-wage workers are adults who have already completed their formal education and remain in low-wage jobs for extended periods of time. While moving low-wage workers up and out of what are currently low-wage jobs is an admirable goal, a lot of what are currently low-wage jobs will be with the economy in large numbers for a long time to come (cashiers, child-care workers, teachers assistants, restaurant workers, etc.) A strategy based solely on educating and training people for better jobs ignores the reality that even if we were able to give everyone a college degree, we'd still have a lot of jobs that currently offer poor wages, benefits, and working conditions.

One solution we promote in this paper is to facilitate unionization of low-wage work. We show that even in the lowest-paying jobs in the country, when workers are unionized, wages and benefits are substantially better than when they are non-union. Among the 15 low-wage occupations we examined, the average wage for unionized workers was about $1.75 per hour higher than it was for non-union workers. We also found that unionized workers were about 25 percentage-points more likely than otherwise identical non-union workers were to have employer-provided health insurance and a pension.

Today is the last day of MaxSpeak, You Listen!, one of my favorite blogs covering economics and politics. Max Sawicky of EPI started the blog a few years back and, with help from a small roster of like-minded people, built it into one of the most important economics blogs on the web.

Rumor has it that Max will be starting a new job in Washington for an employer that frowns upon its employees' running blogs with political commentary. The MaxSpeak crew, minus Max, will continue to blog at a new location: Econospeak ("Annals of the Economically Incorrect").

So, how to make up for the loss of MaxSpeak? First, I remind you of some fine left-of-center economics blogs that I've been reading every day for quite some time, including Dean Baker's Beat the Press and Brad DeLong's Grasping Reality with Both Hands. Second, I've added two new economics-focused blogs to my links page: Angry Bear ("Slightly left of center economic commentary on news, politics, and the economy") and Dani Rodrik ("Unconventional thoughts on economic development and globalization"). And two new politics pages: Ezra Klein ("Tomorrow's media conspiracy today") and Matthew Yglesias ("A Reality-Based Weblog"). Finally, you can check out the content at: CEPR (where I work), EPI (where Max and I both used to work), and Inclusion ("Independent Progressive New").

If you have any other suggestions, please email me at without [dot] motive [at] g m a i l [dot] com.

Today's papers are full of coverage of President Bush's announcement yesterday of measures to ease the growing problems in the "subprime" lending market. Among other things, Bush proposed to use "jawboning" to encourage lenders to allow homeowners at risk of defaulting on their mortgages to renegotiate better terms. Probably the most important measure Bush proposed would give homeowners that manage to negotiate partial loan forgiveness special tax treatment. (Under current law, the portion of the loan that is forgiven counts as income and can be taxed.)

My CEPR colleague Dean Baker has come up with a much better idea, and, to the amazement of some, his proposal has already received endorsements from at least two prominent conservative economists. Dean's idea, spelled out in a recent op-ed in The Providence Journal co-authored with conservative economist Andrew Samwick, proposes legislation to grant:

Harvard economist and former chair of President Bush's Council of Economic Advisors, Greg Mankiw, yesterday endorsed the "Baker-Samwick" plan.

President Bush's comments yesterday, however, seemed to distance himself from anything along these lines: "It's not the government's job to bail out speculators or those who made the decision to buy a home they knew they could never afford." Probably only President Bush thinks that the victims of subprime lending "knew" that they could not afford the houses they were buying.

Readers commenting on Mankiw's blog page, most of whom definitely seem to be right of center, were also surprisingly critical of the "Baker-Samwick" plan. Their arguments ranged from the purely ideological ("markets must be left to adjust" independent of the human cost) to the self-interested (now these houses won't go on the market at fire-sale prices for me to scoop up). What seems to be missing from the analysis made by the more ideological commenters I read is any understanding that what will likely happen is a bailout of the lending institutions with the former homeowners left out on the street.