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JHB

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Member since: 2001
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Lysenko Economics (naming the mess Krugman describes)

In a blog post today Paul Krugman (knowingly or not) describes part of the "Sovietization" of the right:


Portes quotes a three-year-old piece from Niall Ferguson I mercifully missed, ridiculing me as the “man from Econ 101” who believed, foolishly, that huge government deficits could fail to raise interest rates in a depressed economy. Indeed, that is what Econ 101 said – and it has been completely right. Basic IS-LM macro also said that under these conditions printing lots of money would not be inflationary, and that cutting government spending sharply would cause the economy to shrink. All of this has come true.

So Econ 101 has done just fine – and perhaps more to the point, it has made successful predictions “out of sample”, that is, about what would happen under conditions very different from normal experience. This is the sort of thing that produces paradigm shifts in the hard sciences: light bends! Einstein is right!

So why the sense that macroeconomics is a mess? I’d say that it’s essentially political. The type of macroeconomics Portes and I do offends conservative notions of how things are supposed to work in a capitalist society, so they reject the theory no matter how well it performs, and throw their support behind other views and other people no matter how badly they get it wrong. As a result, all the public hears are arguments between dueling economists (some of them not knowing much about economics). That’s a big problem – but it’s not a problem with the economics, which has, once again, been spectacularly successful.
http://krugman.blogs.nytimes.com/2012/06/26/economics-good-and-bad/

In the hard sciences there's a name for that sort of thing: Lysenkoism:
The word is derived from the centralized political control exercised over the fields of genetics and agriculture by the director of the Soviet Lenin All-Union Academy of Agricultural Sciences, Trofim Denisovich Lysenko and his followers, which began in the late 1920s and formally ended in 1964.

Lysenkoism is used colloquially to describe the manipulation or distortion of the scientific process as a way to reach a predetermined conclusion as dictated by an ideological bias, often related to social or political objectives.
http://en.wikipedia.org/wiki/Lysenkoism

Lysenko's ideas didn't pan out in practice, but he had the right message (from the Soviet's ideological viewpoint) from the right source (from a good peasant family, the equivalent of the Clark Kent "wholesome boy from the cornfields of The Heartland" image here in the US) at the right timeso the Soviets adopted it wholesale...and like so many things under the Soviets, dissent was "counterrevolutionary": treason, defilement of all that was good and pure, etc.
In 1948, genetics was officially declared "a bourgeois pseudoscience"; all geneticists were fired from their jobs (some were also arrested), and all genetic research was discontinued. Nikita Khrushchev, who claimed to be an expert in agricultural science, also valued Lysenko as a great scientist, and the taboo on genetics continued (but all geneticists were released or rehabilitated posthumously). The ban was only waived in the mid-1960s.

Thus, Lysenkoism caused serious, long-term harm to Soviet knowledge of biology. It represented a serious failure of the early Soviet leadership to find real solutions to agricultural problems, throwing their support behind a charlatan at the expense of many human lives.



Perhaps we should start encouraging use of the term: Chicago Soviet of Economics



Romney "Sick at Heart" Over Bain Job Losses

From Crooks and Liars:
http://crooksandliars.com/jon-perr/romney-sick-at-heart-over-bain-job-losses
Emphasis is mine.
Mods: this is 4 paragraphs from the C&L article. The indented parts are portions where the quoted article is quoting other sources, and are part of the paragraph of the non-indented lines above it.


But as the New York Times documented Friday, large sums of that money were going to Mitt Romney and his Bain colleagues whether their portfolio companies were profitable or not. Put another way, Bain won either way:

Bain structured deals so that it was difficult for the firm and its executives to ever really lose, even if practically everyone else involved with the company that Bain owned did, including its employees, creditors and even, at times, investors in Bain's funds.


Cambridge Industries, which filed for bankruptcy in 2000 after amassing $300 million in debt, is hardly unique when it came to Bain's "win even when they lose" business model:

Yet Bain Capital, the private equity firm that controlled the Michigan-based company, continued to religiously collect its $950,000-a-year "advisory fee" in quarterly installments, even to the very end, according to court documents.

In all, Bain garnered more than $10 million in fees from Cambridge over five years, including a $2.25 million payment just for buying the company, according to bankruptcy records and filings with the Securities and Exchange Commission. Meanwhile, Bain's investors saw their $16 million investment in Cambridge wiped out.


"Traditionally," Josh Kosman wrote in his 2009 book The Buyout of America, "cash-rich public companies have paid dividends to lure and reward investors." But private equity firms, he explained, stand this process on its head:

Fourteen of the largest American private equity firms had more than 40 percent of the North American companies they bought from 2002 until September 2006 pay them dividends. In thirty-two of the eighty-three case, 38 percent, they took money out in the first year.

Mitt Romney was a pioneer of this strategy. His private equity firm, Bain Capital, was the first large PE firm to make a serious portion of its money not from selling its companies or listing them on the stock exchange, but rather by collecting distributions and dividends, which in this context is the exact opposite of reinvesting in a company. Bain Capital is notorious for failing to plow profits back into its businesses.


Just how notorious was first detailed by the Times five years ago during Mitt Romney's first presidential bid:

One transaction, involving the medical diagnostics company Dade Behring, took place in 1999 as Mr. Romney was leaving the firm, and the other, involving KB Toys, occurred about two years later. Bain and its co-investors extracted special payments of over $100 million from each company, enabling Bain to make a healthy profit even before re-selling the businesses -- a practice known as "getting back your bait." Lenders say Bain is one of the firms that has taken the most in such payments, which companies usually make by taking on additional debt.

Both Dade Behring and KB Toys soon suffered dips in their business. Unable to meet the burden of their debts, each filed for bankruptcy and laid off thousands of workers. Bain Capital spokesmen have said the company did nothing improper.

Mr. Romney, who remains an investor in Bain Capital, said he had not been involved in those decisions but acknowledged that such payments became part of the buyout business "very early on."

Breaking: Boortz retiring, to be replaced by Herman Cain

AP is reporting that Radio Ranter Neil Boortz is retiring, and that Herman Cain will be the one to fill his rather stinky shoes.

http://www.google.com/hostednews/ap/article/ALeqM5gg_uPcHPMutrfaDdMpwAu84TLYUA?docId=a5e46707d4424d95b7ba024eaaff43f7
ATLANTA (AP) — Conservative talk radio host Neal Boortz announced his retirement Monday after four decades at the microphone, saying he will be replaced by former GOP presidential hopeful Herman Cain.

Boortz said during his morning talk show that his last day will be Jan. 21, 2013, the day of the presidential inauguration. The 67-year-old Boortz said he is in good health and plans to enjoy retirement by traveling with his wife.

"This has been a stress-free job for me. It's just been a total and absolutely joy," he said. "I'm going to miss everything associated with doing a talk radio show."

Boortz's show is syndicated across the country through Atlanta's WSB radio, drawing about 6 million listeners on 230 radio stations.


Radio host Boortz retiring, with Cain to step in

Source: Associated Press

ATLANTA (AP) — Conservative talk radio host Neal Boortz announced his retirement Monday after four decades at the microphone, saying he will be replaced by former GOP presidential hopeful Herman Cain.

Boortz said during his morning talk show that his last day will be Jan. 21, 2013, the day of the presidential inauguration. The 67-year-old Boortz said he is in good health and plans to enjoy retirement by traveling with his wife.

"This has been a stress-free job for me. It's just been a total and absolutely joy," he said. "I'm going to miss everything associated with doing a talk radio show."

Boortz's show is syndicated across the country through Atlanta's WSB radio, drawing about 6 million listeners on 230 radio stations.



Read more: http://www.google.com/hostednews/ap/article/ALeqM5gg_uPcHPMutrfaDdMpwAu84TLYUA?docId=a5e46707d4424d95b7ba024eaaff43f7



Absolutely Fabulist!

The president offers his sympathy (2007 edition)

On Wednesday, December 5, 2007, nineteen-year-old Robert Hawkins killed eight people and himself at the Westroads Mall in Omaha, Nebraska.
President Bush offered sympathy Thursday to the families of the victims.

“I was in Omaha just before the shooting took place, and I know what a difficult day it is for that fine community,” said Bush, who had traveled to the area to attend a Republican fundraiser and was on his way back to Washington when the shootings took place.

“The victims and their loved ones are in the prayers of Americans,” Bush said. “The federal government stands ready to help in any way we can, and the whole nation grieves for the people of Omaha.”
http://www.msnbc.msn.com/id/22131295/ns/us_news-crime_and_courts/t/mourners-light-candles-omaha-mall-victims/


Number of liberal pundits or Democratic presidential hopefuls who took umbrage, suggesting Bush would have been less sympathetic if his itinerary had been different: zero


A lot of times, people just add in a little personal note when expressing sympathy. That's all.

Anybody have any "most likely to be believed" April Fools' stories?

I don't but the thought occurred to me so I'm asking:

Every now and then someone winds up looking dumb because they quote a prank April Fools story. And it happens all year 'round with stories from The Onion.

Any such stories from today that look ripe for leaving someone's ass hanging in the wind?

TPL Podcast Ep 120: The JOBS Bill? 10 Conservative Lies about Jobs

The Professional Left podcast, with Driftglass and Blue Gal
(contributors to Crooks and Liars)

Ep 120 The JOBS Bill? 10 Conservative Lies about Jobs (67:16)
Description: Why Blue Gal isn't going to knit a uterus for her congresscritter; and the top ten conservative lies about jobs and the economy.


Also, some discussion on why the manufacturing sector is important so we can't just send it all to China.

Links:

Carol Marin on Toni Preckwinkle and loyalty.
Driftglass and the Original, 2010 Etch-a-Sketch post NASDAQ on the Republican (HAND) JOBS Act.
Sara Robinson and the 40 hour work week.
Wonkette on Ron Paul's Libertarian Nepotism. Nepotarianism?

summary from http://driftglass.blogspot.com/2012/03/professional-left-podcast-120.html


TYT: Larry Pratt says Shooter Should Get Off on a Technicality

On The Young Turks show on Current TV:
Cenk interviews Larry Pratt, executive director of the Gun Owners of America, about the shooting of Trayvon Martin by George Zimmerman. Pratt contends that Zimmerman was attacked by Martin and acted in self-defense.
http://current.com/shows/the-young-turks/videos/gun-advocate-to-cenk-if-you-jump-on-top-of-me-count-on-it-im-gonna-shoot-you-part-1

http://current.com/shows/the-young-turks/videos/gun-advocate-to-cenk-martin-should-have-run-away-part-2

ON EDIT: Crooks & Liars has a version without the ads and in one piece:
http://videocafe.crooksandliars.com/heather/cenk-uygur-blasts-gun-owners-americas-larr


Cenk is a little over the top here for my taste, which lets Pratt almost look like the reasonable one (almost. He's so far gone that nothing can help).

The real zingers that Cenk never hones in on here is pointing out that Pratt is arguing for the very thing his entire movement has used to condemn liberals as "soft on crime": letting the accused go free "on a technicality", and that Pratt's argument also goes against everything ever said about not "second guessing" police in brutality/excessive force cases.

Pratt argues (based on one account. Others differ, but for the sake of argument we'll just go with Pratt's version for now) that once the encounter became physical (a fight), Treyvon should have run once he gained an advantage over Zimmerman instead of punching him. with Zimmerman now on the defensive, he was justified in pulling his gun and shooting Martin. Pratt underscores this point with his "count on it, I'm gonna shoot you" line in Cenk's hypothietical recreation of the incident between him and Pratt.

Now, the entire "liberals are soft on crime" meme comes from efforts to force police to actually follow the rules about due process, collection of evidence, etc. so that people didn't go to jail for crimes they didn't commit. This occasionally resulted in cases being thrown out because improperly-collected evidence could not be admitted, improper interrogations, etc., which outraged a lot of people for "violent criminals getting off on a technicality". It's what gave birth to the entire vigilante-movie genre of the 70's -- Dirty Harry, Death Wish, etc. -- and the RW in general and gun-promotion lobby in particular relies heavily on it.

Further, we're supposed to be very lenient about excessive force cases because we are "not there, making the call in the heat of the moment" where there just isn't time to rationally evaluate things and make sure all boxes on the proper procedure checklist are followed completely. This is for peace officers trained in the use of force in potentially violent confrontations.

So here is Pratt, who has spent his career humping the leg of the "got off on a technicality" meme, arguing for exactly the thing he's supposed to be against. And to do it, his justification is that an untrained teenager going about his normal business and suddenly finding himself in a physical confrontation should dot every "i" and cross every "t" about when he should break off, in an even more extreme version of what gets called "micromanagment" and "Monday morning quarterbacking" when applied to holding trained police officers accountable.

A Century of Tax Bracket Thresholds

In many of the recent debates (and outright propagandizing) about taxes, one of the biggest obstacles to rational discussions on the topic -- other than pure anti-tax ideology – is simple ignorance of how taxation used to work in this country, especially progressive taxation. For instance, the whole debate as to whether a couple with a $250K income was “rich” was just nuts: why act like there was one simple dividing line?

The big reason for that is the “simplification” of the income tax system since the 1980s that has reduced the number of tax brackets drastically: from as few as two (1987-1990) to the current six (2002-present). Through most of the 20th Century, including all but the last few years of the Cold War, many more brackets were in place, making more gradations between income levels and making finer distinctions between who was trying to get ahead and who already was.

It’s fairly easy to find charts showing the history of the top marginal tax rate. It’s harder to find ones that illustrate the rest of the story clearly: what the taxes were for people well away from the top margin, what the people at the top actually paid once they’d made use of the vaunted loopholes, etc. The information is available, but hard to boil down to a bumper sticker.

These two charts are part of my effort to fill in some of those gaps in the bigger picture. They don’t deal with rates at all, just the breakpoints between different rates. Using the CPI inflation adjusted numbers from the Federal Individual Income Tax Rates History of The Tax Foundation (http://www.taxfoundation.org/taxdata/show/151.html). I’ve graphed the thresholds between one tax bracket and the next in 2011 dollars. The first is for the entire history of the income tax (1913-2011), and the second is the past 60 years (1951-2011). To keep it simple, these are for single-filers, but it is representative over the broader theme.



Remember, we’re just talking about bracket thresholds, so “series” just represents the number of brackets in a given year, not that they are the same rate or otherwise related. In 1932 and 1933 there were over 50 brackets, and only 4 of them dealt with incomes below the equivalent of $200K.

Gee, look at those brackets reaching way, way up into the 0.01%: incomes over the equivalent of $10 million, $30 million, even $80 million. Still want to quibble whether $250 thousand is “rich” (or rather, $200K since we’re talking single-filers in this chart)? Without even addressing levels that many more will agree fit that description?




The 1951-2011 chart is clearer, both because the period lacks those tens-of-millions brackets and because this is the period most familiar to most people. Changes in the tax code in the 60s, 80s, 90s and 2000s can be seen clearly.

Note how many brackets affected incomes above $200K before the Reagan era. Also note how there were more at lower levels below that level too.

Also note how it collapsed after Reagan: both at the high end (though inflation took its toll earlier) and by hollowing out gradations at the low end. From 1988-1990 there were only two rates: 15% up to ~$34,000, and 28% on everything above that. Very nearly a flat tax, and the one for which George H. W. Bush paid when it proved unsustainable and he had to go back on his “read my lips, no new taxes” line to add a higher bracket. Even when higher brackets were implemented under Clinton, you can still see the fruits of the conservative’s assault on the very idea of progressive taxation.

****
On edit (26 March 2012): Welcome to those following the link from Avedon Carol's blog The Sideshow.

Following one of the comments, I've added versions on a log scale. However, in ordinary, everyday terms it is only used in this context when referring to an "x-figure income". The median household income is in the ballpark of $50,000, and the vast majority of working Americans are somewhere in that 5-figure range. While useful for some forms of analysis, I think the way a log scale flattens the distribution visually was not appropriate to the point I was making. With a linear scale, a reader can pick out there their own income lies, see the way it was treated differently in the past, and most importantly can easily pick out how incomes that were double, 5 times, 30 times, etc. their own were treated in the past.


Note: on this graph the "series" legend on the right stops at 23 due to space. Also present but not displayed in the legend are more brackets for years which had more, up to 55 in the early 1930s.

"Why China’s Political Model Is Superior" sez Shanghai "venture capitalist"

This from the NY Times
http://www.nytimes.com/2012/02/16/opinion/why-chinas-political-model-is-superior.html

A related version is at Huffington Post:
http://www.huffingtonpost.com/eric-x-li/globalization-20-democrac_b_1278784.html

The West’s current competition with China is therefore not a face-off between democracy and authoritarianism, but rather the clash of two fundamentally different political outlooks. The modern West sees democracy and human rights as the pinnacle of human development. It is a belief premised on an absolute faith. China is on a different path. Its leaders are prepared to allow greater popular participation in political decisions if and when it is conducive to economic development and favorable to the country’s national interests, as they have done in the past 10 years.

However, China’s leaders would not hesitate to curtail those freedoms if the conditions and the needs of the nation changed. The 1980s were a time of expanding popular participation in the country’s politics that helped loosen the ideological shackles of the destructive Cultural Revolution. But it went too far and led to a vast rebellion at Tiananmen Square. That uprising was decisively put down on June 4, 1989. The Chinese nation paid a heavy price for that violent event, but the alternatives would have been far worse. The resulting stability ushered in a generation of growth and prosperity that propelled China’s economy to its position as the second largest in the world.

The fundamental difference between Washington’s view and Beijing’s is whether political rights are considered God-given and therefore absolute or whether they should be seen as privileges to be negotiated based on the needs and conditions of the nation.

The West seems incapable of becoming less democratic even when its survival may depend on such a shift. In this sense, America today is similar to the old Soviet Union, which also viewed its political system as the ultimate end. History does not bode well for the American way. Indeed, faith-based ideological hubris may soon drive democracy over the cliff.


A couple of thoughts:
1) you are a "crony capitalist" pal. If you didn't have friends in high places in the Party, you couldn't do jack. Out of curiosity, what sort of kickback arrangements do you have?

2) The only thing heartening about such blind arrogance is the way it will walk right into its doom. The problem is they are going to cause a lot of misery and take a lot of people with them before they find out they were wrong.

3) Before you get too comfortable, just remember how many of Mao's little books are out there. Wasn't it required reading? China's been riding the post-Tiannanmen "stability" for a while now. All it takes is a bump or a downturn, and you can wind up with an unpleasant reminder that the "vast rebellion at Tiananmen Square" was just a mass protest, not a rebellion. Rebels shoot back. Just ask Mao. If you're a "venture capitalist", maybe it's in your interest to NOT make that route look like a good thing.
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