Monday, February 28, 2011

Ronald Reagan, Union Supporter

"'To organize skilled and unskilled
Is a right that the law has fulfilled - '
A view I adopted
While on the red carpet
As head of the Screen Actors' Guild."   

The world's most glamorous celebration of organized labor - the Oscars - coincides this year with the effort by Wisconsin Governor Scott Walker to strip state workers of their right to organize. It is therefore worth recalling the words of an earlier Republican governor, president of SAG and President of the USA, who said that to organize labor is  "one of the most elemental human rights."

Friday, February 18, 2011

Forbidden Words

Said Christie, politic'ly gifted:
"The retirement age should be lifted."
In the subsequent pause,
You could hear oohs and aahs,
As political ground subtly shifted.    

New Jersey Governor Chris Christie, speaking in Washington to the conservative American Enterprise Institute, seemingly surprised even himself with his characteristically blunt statement that the age of eligibility for Social Security benefits should be raised.  Listen to his own reaction at 1:54 in the audio link below.

Thursday, February 17, 2011

Please Turn to Chapter 11

What with Kindles and iPads and Nooks,
It's now the rare reader who brooks
The paper and ink,
So the outlook will shrink
For a bookseller selling just books.    

The Chapter 11 bankruptcy filing of the Borders bookstore chain points to the upheaval in the publishing industry, caused in part by the advent of online retailers and e-readers, of which Borders has none to offer.

Wednesday, February 16, 2011

Down with Capital

One regards with an eye that is jaundiced
Those lobbyists doing their darndest
To convince you and me
That risk should be free,
A view of which Wall Street is fondest.    

Andrew Ross Sorkin, writing the The New York Times' Dealbook, reports on an "independent" study, sponsored by the Business Roundtable and other lobbying groups, that purports to show the "job-killing" dangers of requiring users of derivatives to reserve more capital against the risks of those trades. Within hours, some of the economists whose names were misleadingly attached to the study had disavowed it. One, Joseph Stiglitz, derided the "particularly foolish" argument that US corporations, sitting on $2 trillion of cash, would have to forego hiring in order to afford more robust margin requirements.
  (Hat tip to Simon Johnson's Baseline Scenario blog.)

Monday, February 14, 2011

Attention: Deficit

In the budget debate there's a tension
That Washington shudders to mention:
We can't get on track
Without cutting back  

On the social security pension.    

The Obama Administration released its budget proposal for 2012 this week, with a target deficit reduction of $1.1 trillion over the next 10 years. However, the projected 2012 deficit would be a record $1.6 trillion. Moreover, neither the President nor his Republican opposition have so far looked for budget-balancing opportunities in the defense, security and entitlement programs that comprise 60% of the federal budget. 

Thursday, February 10, 2011

Pyramiding Wealth

The perennial President Hosni
Built an eye-popping nest egg because he,
From the kickbacks he clawed,
Invested abroad;
Say - there's a right clever chap, was'n' 'e?  

Christopher Davidson, a professor of Middle East politics interviewed by Kai Ryssdal of public radio's Marketplace, theorized that the reputedly great wealth of Egypt's President Hosni Mubarak stems from kickbacks from foreign trading partners - a common practice there -  and their adroit reinvestment in foreign real estate. 

Wednesday, February 9, 2011

Quitting Time

Economists, seeking a sign
Of the end of employment decline,
Infer a renewed
And more confident mood
If more workers decide to resign.  

America needs more quitters!  That's the message from the Wall Street Journal's Kelly Evans in her Ahead of the Tape column.  The quit rate (= numbers of quitters per month / total work force) has not moved up very much from its 2009 low of 1.3%, but a higher rate would signal more confidence in the job market.  Yesterday's announcement of the Labor Dept's Job Openings and Labor Turnover Survey, however, shows that quitters have not yet given the economy the needed "JOLTS"; rates of hiring and quitting remained unchanged in December. 

Tuesday, February 8, 2011

How Stimulating

Said a team from the N.B.E.R.,
On how rousing our stimuli are:
"You should give to the poor
If you want to insure
That your stimulus dollars go far."

The National Bureau of Economic Research looked into the effectiveness of federal stimulus spending.  This is an inherently ambiguous line of inquiry, given that one asks how the results have differed from a hypothetical case in which the government did nothing.  According to Real Time Economics, the NBER compared states that did or did not request stimulus dollars and determined that, while aid to states to retain public employees made no improvement on overall employment, aid to low-income families had a significantly stimulative effect.

Sunday, February 6, 2011

Super Bowl XLV

When the Steelers fans, cheering in Pittburghese, 
Meet the Packers fans' cheese-headed infantries, 
They'll hope, for the game's sake, 

Their team's the best namesake 
Of twentieth century industries.   

This year's Super Bowl contest between the Pittsburgh Steelers and the Green Bay Packers recalls the industrial, working class roots of American pro football, as the namesakes of the Indian Packing Company and US Steel Corporation step onto the fields of friendly strife.

Friday, February 4, 2011

Fed Foments Revolution?

Said conspiracy theorists: "Debatably,  
That the cost of food acted inflatably  
Brought Egyptians to crisis,  
But started when prices  
Were eased by the Fed quantitatively."    

The Wall Street Journal's Real Time Economics reports on a speech yesterday by Fed Chairman Ben Bernanke, in which he said that it's unfair to blame global food inflation (and by extension, political unrest) on US monetary policy.  Recent spikes in the prices of such commodities as wheat, soy and sugar are due to supply constraints such as bad weather, and increased demand from increasingly prosperous emerging markets, says Bernanke.

Thursday, February 3, 2011

Food Fight

When bread was too pricey to eat,
Egyptians rebelled in the street;
Now others may hoard,
As they cannot afford
The true cost of the high price of wheat.    

The Wall Street Journal's Heard on the Street column, citing the 13% rise in the cost of wheat since December, notes the role that the rising cost of staple foods has played in unrest in Cairo, Tunis and elsewhere. The natural impulse of governments to increase supply by hoarding may ironically drive the price higher, since such actions remove some of the marginal supply from the world market.

Wednesday, February 2, 2011

Pyramid Scheme

Elites that have money and cling to it,
While the unemployed life has a sting to it:
The Egyptians' malaise,
Like the US of A's,
Has a most recognizable ring to it.    

Writing in the Harvard Business Review, Umair Haque points out the disturbing similarities between the economic circumstances of the Egyptian uprising, and those of the United States today.  Beneath apparent growth and prosperity - as observed from the top of the economic ladder - lies a broader stagnation marked especially by a high rate of youth unemployment.

Tuesday, February 1, 2011

Société Anonyme

Many bloggers prefer to go nameless,  
So as not to be fired if blameless,
But a public display,
While constraining their say,  
Might cause them to curse and defame less.    

A recent incident in the "twitterverse", in which a financial journalist revealed the name of a vexatious financial blogger, has renewed the debate about the merits of anonymous or pseudonymous online posting.  Dr. Goose, who is pseudonymous but not anonymous, is posting here in response to a pseudonymous and anonymous post in the financial market blog Zero Hedge.

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