The “skills gap” was a lie
Five or six years ago, everyone from the US Chamber of Commerce to the Obama White House was talking about a “skills gap.”

The theory here was that high unemployment reflected a structural shift in the labor market such that jobs were available, but workers simply didn’t have the right education or training for them. Harvard Business Review ran articles about this — including articles rebutting people who said the “skills gap” didn't exist — and big companies like Siemens ran paid sponsor content in the Atlantic explaining how to fix the skills gap.

But nothing was really done to transform the American education system, and no enormous investment was made in retraining unemployed workers. And yet the unemployment rate kept steadily falling in 2013, 2014, 2015, and 2016 as continued low interest rates from the Federal Reserve let a demand-side recovery continue. Donald Trump became president, injected a bunch of new fiscal stimulus on both the spending and tax sides, and in 2017 and 2018 the unemployment rate kept falling and the labor force participation rate kept rising.

Now along comes a new paper from Alicia Sasser Modestino, Daniel Shoag, and Joshua Ballance presented this week at the American Economics Association’s annual conference that shows the skeptics were right all along — employers responded to high unemployment by making their job descriptions more stringent. When unemployment went down thanks to the demand-side recovery, suddenly employers got more relaxed again.

In other words, the skills gap was the consequence of high unemployment rather than its cause. With workers plentiful, employers got choosier. Rather than investing in training workers, they demanded lots of experience and educational credentials.

And while job skills are obviously important, when the labor market is healthy employers have incentives to try to impart skills to workers rather than posting advertorial content about how the government should fix this problem for them.
9 days ago
Efforts to make buildings greener are not working
Second, the standards are not as exacting as they sound. They exclude items plugged into sockets, such as laptops and dishwashers. Astute architects can make buildings appear greener by replacing ceiling lights with free-standing lamps. And “zero carbon” buildings exclude the carbon emissions required to build them (which explains the “nearly” in the eu’s new standard). Sometimes these emissions are larger than for conventional buildings. Research at the University of Hong Kong has found that green walls covered in plants to turn carbon dioxide into oxygen required three to six times as much energy to build as a bare wall.

Third, as Mr Burrell notes, many “zero carbon” buildings are neither as efficient as they are supposed to be, nor do they generate as much renewable energy as expected. Britain’s Building Research Establishment, a research laboratory, was designed to be an exemplar of a zero-carbon building. It ended up consuming 90% more energy than planned. Wind turbines and solar panels on buildings produce far less power than larger ones in wind and solar farms. Installing wood-burning boilers in new buildings is especially daft because they discharge dangerous particles and gases into crowded parts of cities.

If zero-carbon standards were changed to include the emissions from building and demolishing structures, many of the perverse incentives in the building regulations would disappear. It would probably lead to more building with wood. Many mature forests do little to take extra carbon out of the atmosphere. Chopping some of them down, storing the carbon in wooden buildings, and planting new trees in their place could well increase forestry’s contribution towards actually removing carbon from the air. (Sawmills can be green, too: the electricity that powers Moelvn’s sawmills comes from burning sawdust.) And because wood is so light compared with steel, brick or concrete, it lends itself to the mass production of buildings in factories. That should cut emissions from moving materials to building sites.

British Columbia is moving particularly quickly. A decade ago the spread of mountain pine beetles left 18m hectares of dead trees in the province. If those trees were left to rot or to burn in forest fires, Canada’s total carbon emissions would increase by 2% in 2000-20. So it passed a law in 2009 that required wood to be used in all new buildings erected with public money.

In the light of the Grenfell Tower fire in London that killed 72 people, Benjamin Sporton of the Global Cement and Concrete Association, a trade body, questions whether there will be much demand for wooden skyscrapers. But, as Mr Abrahamsen points out, wood does not melt in a fire. And once it has charred it does not continue burning, like a flamed-out log fire. Mjostarnet’s fire-exit staircase is clad in cross-laminated timber, a material widely regarded as safer than steel in a blaze.

A few other wooden skyscrapers are rising. Amsterdam and Vienna are already building wooden towers the height of Mjostarnet. More ambitious projects have been proposed, such as a 40-floor tower nicknamed “Treetop” in Stockholm and 300 metre-high towers in London and the Netherlands. Mjostarnet may be the world’s tallest wooden tower, “but we hope not to hold the record for long,” says Mr Liven. They do little more than demonstrate a possibility. But even that is useful.
9 days ago
The partisan brain
5 weeks ago
The Angry White Male Caucus
There have been many studies of the forces driving Trump support, and in particular the rage that is so pervasive a feature of the MAGA movement. What Thursday’s hearing drove home, however, was that white male rage isn’t restricted to blue-collar guys in diners. It’s also present among people who’ve done very well in life’s lottery, whom you would normally consider very much part of the elite.

In other words, hatred can go along with high income, and all too often does.

At this point there’s overwhelming evidence against the “economic anxiety” hypothesis — the notion that people voted for Donald Trump because they had been hurt by globalization. In fact, people who were doing well financially were just as likely to support Trump as people who were doing badly.

What distinguished Trump voters was, instead, racial resentment. Furthermore, this resentment was and is driven not by actual economic losses at the hands of minority groups, but by fear of losing status in a changing country, one in which the privilege of being a white man isn’t what it used to be.

And here’s the thing: It’s perfectly possible for a man to lead a comfortable, indeed enviable life by any objective standard, yet be consumed with bitterness driven by status anxiety.

You might think that this is impossible, that having a good job and a comfortable life would inoculate someone against envy and hatred. That is, you might think that if you knew nothing of human nature and the world.

I’ve spent my whole adult life in rarefied academic circles, where everyone has a good income and excellent working conditions. Yet I know many people in that world who are seething with resentment because they aren’t at Harvard or Yale, or who actually are at Harvard or Yale but are seething all the same because they haven’t received a Nobel Prize.

And this sort of high-end resentment, the anger of highly privileged people who nonetheless feel that they aren’t privileged enough or that their privileges might be eroded by social change, suffuses the modern conservative movement.

It starts, of course, at the top, with that walking, talking, golfing bundle of resentment that is Donald Trump. You might imagine that a man who lives in the White House would no longer feel the need to, for example, make false claims about his college record. But Trump still doesn’t get the respect he obviously craves.

Indeed, it seems apparent that his jihad against Barack Obama was fueled by envy: Obama was a black man who was also a class act, with all the grace and poise Trump lacks. And Trump couldn’t stand it.

Kavanaugh is clearly cut from the same cloth, and not just because he rivals Trump in his propensity for lying about matters great and small.

As a lot of reporting shows, the angry face Kavanaugh presented to the world last week wasn’t something new, brought on by the charges of past abuse. Classmates from his Yale days describe him as a belligerent heavy drinker even then. His memo to Ken Starr as he helped harass Bill Clinton — in which he declared that “it is our job to make his pattern of revolting behavior clear” — shows rage as well as cynicism.

And Kavanaugh, like Trump, is still in the habit of embellishing his academic record after all these years, declaring that he got into Yale despite having “no connections.” In fact, he was a legacy student whose grandfather went there.

Indeed, my guess is that his privileged roots are precisely why he’s so angry.

I very much ran with the nerds during my own time at Yale, but I did encounter people like Kavanaugh — hard-partying sons of privilege who counted on their connections to insulate them from any consequences from their actions, up to and including abusive behavior toward women. And that kind of elite privilege still exists.

And nothing makes a man accustomed to privilege angrier than the prospect of losing some of that privilege, especially if it comes with the suggestion that people like him are subject to the same rules as the rest of us.
october 2018
How We Know Kavanaugh Is Lying
Alright, so Kavanaugh is a proven serial liar whose shocked, innocent presentation was obviously an act. What of Ford’s testimony? If we care about getting to the actual truth, we have to apply equal scrutiny to both sides. Ford cannot be believed merely because accepting her allegations as true would be politically advantageous. If she isn’t believable, the left needs to acknowledge that. But, well, read her testimony for yourself. Watch her answers to questions. See if you see the same tendencies that I’ve shown Kavanaugh demonstrated. See if you see tactics like changing the subject, answering a question with a question, playing dumb, bursting into tears and accusing critics of waging a conspiracy to destroy you, fabricating nonexistent corroboration, deleting inconvenient facts, and issuing an angry how-dare-you-sir every time things look dicey for you. All of this, as we have seen at exhaustive (and exhausting) length, is present throughout Kavanaugh’s testimony. Go and find similar reasons to doubt Ford.

What does it say about this country that this is the state of our discourse? That Kavanaugh even stands any chance of being made one of the most powerful figures in the American government, with control over life and liberty? That a man like this is even a judge? He went before the United States Senate and showed total contempt for his vow to tell the truth. He attempted to portray a highly esteemed doctor as a crazy person, by consistently misrepresenting the evidence. He treated the public like we were idiots, like we wouldn’t notice as he pretended he was ralphing during Beach Week from too many jalapeños, as he feigned ignorance about sex slang, as he misread his own meticulously-kept 1982 summer calendar, as he replied to questions about his drinking habits by talking about church, as he suggested there are no alcoholics at Yale, as he denied knowing who “Bart O’Kavanaugh” could possibly be based on, as he declared things refuted that weren’t actually refuted, as he claimed witnesses said things they didn’t say, as he failed to explain why nearly a dozen Yale classmates said he drank heavily, as he invented an imaginary drinking game to avoid admitting he had the mind of a sports jock in high school, as he said Ford had only accused him last week, as he responded to his roommate’s eyewitness statement with an incoherent story about furniture, as he pretended Bethesda wasn’t five miles wide, as he insisted Renate should be flattered by the ditty about how easy she was, as he declared that distinguished federal judges don’t commit sexual misconduct even though he had clerked for exactly such a judge.

And what does it say about us, and our political system, that he might well get away with it?
october 2018
Matt Taibbi on the 10-Year Anniversary of the Crash – Rolling Stone
One of the head-scratchers was bailout architect Ben Bernanke, who in 2015 had the stones to publish a memoir called The Courage to Act (his protégé Geithner’s self-congratulatory tome was called Stress Test).

Despairing at what the Times described as the “messy maw of democracy,” Bernanke asked: Why did the public keep embracing the bombast of politicians like audit-the-Fed advocates Bernie Sanders and Ron Paul (who only wanted to know where all those trillions went), when it could just be trusting the “orderly, thoughtful decision-making” of the bailout architects?

After being similarly confused by a lack of public enthusiasm for his renomination, Bernanke decided to accept the advice of an unnamed senator, who essentially told him that sometimes, you just have to “throw some red meat to the knuckle-draggers.”

It was only after the public elected Donald Trump that Bernanke had an insight. He realized suddenly that “growth is not enough” (translation: the rich getting richer for eight straight years did not please voters).

Economists, he now said, may actually have a “responsibility” to address inequities in the economy, which he conceded might have been caused by a “proclivity toward top-down, rather than bottom-up, policies.”

Imagine how dense you’d have to be to need 10 years, and the election of Donald Trump, to realize this.

These are the people who got Trump elected. Popular media myths may insist otherwise, but people in charge have to be this clueless and arrogant in order for “Anyone but…” to have real ballot appeal.

“Anyone but” is what we got, and will get again, until someone gets serious about undoing the damage caused by that awful deal made 10 years ago this weekend.
september 2018
Capitalism, Socialism, and Unfreedom
Now, there are no perfect answers to the inevitable sacrifice of some freedom that comes with living in a complex society; utopia is not on the menu. But the advocates of unrestricted corporate power and minimal worker protection have been getting away for far too long with pretending that they’re the defenders of freedom – which is not, in fact, just another word for nothing left to lose.
september 2018
Progressives in Britain can still triumph if they look to Spain’s success
In which Will Hutton decides austerity policies are fine and dandy when they can be used to praise the EU in order to knock the Corbynite left. He's lost it.
july 2018
The Brexit con
Brexiters told us that leaving the EU would be quick and easy and would save us £350m a week. With a chaotic no-deal looking a real possibility, however, Jacob Rees Mogg now tells us it could take 50 years to reap the benefits.

What he’s doing here is something con-men have always had to do – stopping their victim going to the police when the goods they have charged him for fail to arrive. This job is called cooling the mark out, as described (pdf) back in 1952 by Erving Goffman*:

An attempt is made to define the situation for the mark in a way that makes it easy for him to accept the inevitable and quietly go home. The mark is given instruction in the philosophy of taking a loss.

Rees Mogg is employing the method Goffman called “stalling.” He’s saying that the goods will turn up, but just a bit later than promised and at a higher price.

The thing is, this tactic could work. It plays upon several psychological mechanisms.
july 2018
No, the Mythical ‘Center’ Isn’t Sexy
Repeatedly, when asked to make policy changes favored by sizable majorities of Democratic voters (and often by majorities of all voters), party leaders said: We can’t do that: we need to win!

Remember when a majority of Democrats were against the Iraq war, but 29 Democratic Senators still ended up voting to give Bush the power to invade? Remember when, five years later, a war-weary 82 percent of Democrats wanted out of Iraq, but Nancy Pelosi said it was necessary to keep authorizing funds for the war to “support the troops” and “not leave them in harm’s way”?

Votes like this were always explained in terms of expediency, i.e., what was necessary to conquer the middle and win elections. On war issues especially, it was like Bill Clinton said: Scared people would “rather have someone strong and wrong than weak and right.” If Dems wanted to get back in power, they had to shelve conscience, at least temporarily, and embrace pragmatism.

But Iraq turned out to be a disaster, morally and politically. The party would have been better off listening to its voters. Party support of the invasion was based on fictitious pragmatic concerns, as were many positions it would take in defiance of constituents.

What actual people are against importing cheap Canadian generic pharmaceuticals? Where’s the group of people intent on protecting our thousand-headed hydra of insurers, so that doctors and hospitals can waste time and money on paperwork? What individual human being is out there who just can’t stand the thought of allowing Medicare to negotiate lower bulk prices?

For that matter, where’s that sexy vote-rich crowd of people who are hell-bent on making sure banks have easier stress tests, and don’t have to increase their capital reserves? Where’s the mob that really wants to preserve the payroll-tax cutoff for high-income earners? That wants desperately to remove Malaysia from a list of human traffickers so it can join a free-trade pact?

There are no such people. These are not human positions. These are the positions of health insurers, pharmaceutical companies, job-exporting manufacturers, defense contractors and other high-dollar donors.

Nobody sits around the dinner table demanding that we keep derivative exchanges opaque, or retain the carried-interest tax break. You’re not winning independents with those positions. You’re just stroking a few lobbyists and their clients.

This is what we’re really talking about, when we talk about the “center” in America. The interests behind these positions are only the “center” in the sense that they’re a numerically tiny group of fat cats sitting between two increasingly enormous populations of pissed-off human voters.
july 2018
What really went wrong in the 2008 financial crisis?
Perhaps most startlingly, conservative politicians in the US, the UK and Germany successfully reframed the crisis as the result of out-of-control fiscal policy rather than the product of an out-of-control financial sector. Thus, George Osborne, chancellor of the exchequer in the UK’s coalition government, shifted the blame for austerity on to alleged Labour profligacy. German politicians shifted the blame for the Greek mess from their banks on to Greek politicians. Transforming a financial crisis into a fiscal crisis confused cause with effect. Yet this political prestidigitation proved a brilliant coup. It diverted attention from the failure of the free-market finance they believed in to the costs of welfare states they disliked.

Yet another of these big results is that power and politics are back. US power dealt with the crisis. German power shaped the eurozone’s response. Rightwing politics reimagined a financial crisis as a fiscal one. A similar politics also shifted the emphasis from the dangers of economic insecurity and inequality to the threat from immigration. The crisis has, alas, awoken the sleeping ogres of fear and hatred.
july 2018
Ten Years After The Crash
I mentioned earlier that assets and liabilities always balance – that’s the way they are designed, as accounting equalities. But when we come to global wealth, this isn’t true. Studies of the global balance sheet consistently show more liabilities than assets. The only way that would make sense is if the world were in debt to some external agency, such as Venusians or the Emperor Palpatine. Since it isn’t, a simple question arises: where’s all the fucking money? Piketty’s student Gabriel Zucman wrote a powerful book, The Hidden Wealth of Nations (2015), which supplies the answer: it’s hidden by rich people in tax havens. According to calculations that Zucman himself says are conservative, the missing money amounts to $8.7 trillion, a significant fraction of all planetary wealth. It is as if, when it comes to the question of paying their taxes, the rich have seceded from the rest of humanity.
july 2018
Trump is creating his American caliphate
To those of us who grew up in the Arab world, where Islam is often invoked by “secular” regimes in order to stem political opposition, and who are accustomed to this charade of piety, there is something chilling yet comforting in observing the authoritarian evolution of the Trump administration. There is a reason why some of those regimes will not do away with blasphemy laws, so handy are they in purging political opponents. It is chilling to see religion used this way in a supposedly sophisticated, liberal democracy, and in particular this element of it, which reduces politics to mere compliance. But it is comforting, in a macabre way, to have it proved that nowhere in the world have humans evolved beyond instrumentalising religion to justify tyranny. The most bewildering thing about US dictator creep isn’t that it’s happening: it’s that it is happening with such predictability.
june 2018
Stumbling and Mumbling: Syria: the knowledge problem
The debate we should have – not just in the Syria context but more generally – is: how much can we know? But because many politicians and columnists have built careers upon being overconfident, this is a question they don’t want asked. As Upton Sinclair said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it".
april 2018
Stumbling and Mumbling: Enlightenment & the capitalist crisis
 We must remember that capitalism was a force for progress in the 20th century in large part because it embraced anti-capitalist elements – a welfare state, mixed economy and progressive taxation – and began to stagnate as these elements were whittled away by neoliberalism.
march 2018
Genes & the left
My point here is a simple one. Maybe it is the case that some people, by virtue of their genes, have more chance than others of being at the bottom of the social heap**. How unpleasant life is at the bottom of that heap is, however, a political choice.
january 2018
The Psychology of Inequality
If this emotional response is experienced by toddlers, it suggests that it may be hardwired—a product of evolution rather than of culture. Scientists at the Yerkes National Primate Research Center, outside Atlanta, work with brown capuchin monkeys, which are native to South America. The scientists trained the monkeys to exchange a token for a slice of cucumber. Then they paired the monkeys up, and offered one a better reward—a grape. The monkeys that continued to get cucumbers, which earlier they’d munched on cheerfully, were incensed. Some stopped handing over their tokens. Others refused to take the cucumbers or, in a few cases, threw the slices back at the researchers. Like humans, capuchin monkeys, the researchers wrote, “seem to measure reward in relative terms.”
january 2018
Jackson Lears · What We Don’t Talk about When We Talk about Russian Hacking
This approach animates Autopsy: The Democratic Party in Crisis, a 33-page document whose authors include Norman Solomon, founder of the web-based insurgent lobby ‘The Democratic Party’s claims of fighting for “working families” have been undermined by its refusal to directly challenge corporate power, enabling Trump to masquerade as a champion of the people,’ Autopsy announces. But what sets this apart from most progressive critiques is the cogent connection it makes between domestic class politics and foreign policy. For those in the Rust Belt, military service has often seemed the only escape from the shambles created by neoliberal policies; yet the price of escape has been high. As Autopsy notes, ‘the wisdom of continual war’ – what Clinton calls ‘global leadership’ –

was far clearer to the party’s standard bearer [in 2016] than it was to people in the US communities bearing the brunt of combat deaths, injuries and psychological traumas. After a decade and a half of non-stop warfare, research data from voting patterns suggest that the Clinton campaign’s hawkish stance was a political detriment in working-class communities hard-hit by American casualties from deployments in Iraq and Afghanistan.

Francis Shen of the University of Minnesota and Douglas Kriner of Boston University analysed election results in three key states – Pennsylvania, Wisconsin and Michigan – and found that ‘even controlling in a statistical model for many other alternative explanations, we find that there is a significant and meaningful relationship between a community’s rate of military sacrifice and its support for Trump.’ Clinton’s record of uncritical commitment to military intervention allowed Trump to have it both ways, playing to jingoist resentment while posing as an opponent of protracted and pointless war.
january 2018
Why Facts Don’t Change Our Minds | The New Yorker
Where it gets us into trouble, according to Sloman and Fernbach, is in the political domain. It’s one thing for me to flush a toilet without knowing how it operates, and another for me to favor (or oppose) an immigration ban without knowing what I’m talking about. Sloman and Fernbach cite a survey conducted in 2014, not long after Russia annexed the Ukrainian territory of Crimea. Respondents were asked how they thought the U.S. should react, and also whether they could identify Ukraine on a map. The farther off base they were about the geography, the more likely they were to favor military intervention. (Respondents were so unsure of Ukraine’s location that the median guess was wrong by eighteen hundred miles, roughly the distance from Kiev to Madrid.)
november 2017
They’re back, as wrong as ever. Enough of Nigel Lawson and his band of 80s ultras | Will Hutton
In any league table of national figures who have been consistently wrong on almost every major judgment Nigel Lawson must rank close to number one. As Britain and his party reel from the impact of intolerable intergenerational and geographical inequality, stagnating productivity, a vast personal debt burden, and now the poison of Brexit, Lawson is the man most closely associated with the ideas and policies that have brought us to our current pass.

With a wholly unjustified reputation for being an economic superman that buoys up his no less unjustified self-confidence, Lawson remains an insidious, if wizened, scorpion, as indiscriminately dangerous to his own side as to his ideological opponents.
november 2017
Stephen Bush: If you sneer at Wetherspoons, you've never feared splitting the bill
There’s a bigger point here than appreciating the joy of a sit-down meal you can afford in the company of people you like. Slating Wetherspoons in the pages of The Sunday Times shows how easy it is to forget what not having very much money is actually like, and how little sympathy we have for people who fall on hard times.

That’s why punitive policies which punish the poor – like the cap on child benefit after the second child, or sanctions for missing appointments at the Job Centre even if it is due to sickness or bad transport – are so popular: because increasingly large parts of society can’t comprehend what it’s like to be frightened of splitting the bill.
november 2017
The poppy has lost its original meaning – time to ditch it
With each year, the run up to Remembrance Sunday seems to become less about paying tribute to the fallen and more a litmus test for a particular sort of nauseating pub bore nationalism, that has nothing whatsoever to do with the great sacrifice of war.
november 2017
Krugman: The Schlock Of The New
True, nobody saw the crisis coming. But that wasn’t because orthodoxy had no room for such a thing – on the contrary, panics and bank runs are an old topic, discussed in every principles book. The reason nobody saw this coming was an empirical failure – few realized that the rise of shadow banking had done an end run around Depression-era bank safeguards.

The point was that only the dimmest of free-market ideologues reacted with utter bewilderment. The rest of us slapped our foreheads and said, “Diamond-Dybvig! How stupid of me! Diamond-Dybvig!”

So new economic thinking since the crisis has proved, for the most part, to consist of bad ideas that serve a conservative political agenda. Not exactly the script we were promised, is it?

And while there are such people on both left and right, there’s a huge asymmetry in wealth and influence between the two sides. Confused views on the left get some followers, provoke a back-and-forth on a few blogs, and generate some nasty tweets. Confused views on the right get mainlined straight into policy pronouncements by the European Commission and the leadership of the Republican Party.
november 2017
Stumbling and Mumbling: Yes, the BBC is biased
This corroborates Tom Mills’ point, that “the BBC will aim to fairly and accurately reflect the balance of opinion amongst elites.” Or as Cardiff University researchers put it (pdf):

"The paradigm of impartiality-as-balance means that only a narrow range of views and voices are heard on the most contentious and important issues."

This, though, is not just unbalanced, but also a way of excluding and alienating outsiders – not just women (that rape “gag”) but also the working class, minorities and, we might add, the economically literate.
october 2017
Stumbling and Mumbling: The impact bias against Labour
This week’s prize for an epic lack of self-awareness goes to Philip Hammond, who told us that a Labour government would lead to “a collapse in business investment and a crash in the value of the pound, causing a shockwave of inflation”

How will we tell the difference from a Tory government?

The Tories have given us not one, not two but three of the worst economic policy errors of modern times: austerity; the vote to leave the EU (which was due in part to austerity); and then the pursuit of a hard Brexit. They have set the bar for economic competence lower than a snake’s belly. Even if you think Labour’s policies leave much to be desired*, they clear this low hurdle.

How, then, can anyone believe otherwise?

One answer, of course, is motivated reasoning: it’s easy to believe what you want to believe.

Another is ambiguity aversion. To people accustomed to 30 years of neoliberalism, Labour looks like an uncertain prospect even if it is offering what is really only mildish social democracy – and people hate uncertainty.

A third answer is that Tory policies favour the 1% whereas Labour’s don’t, and these have massively disproportionate political influence. They also – unlike the poor – have an over-inflated sense of entitlement and take umbrage at Labour’s challenge to those entitlements.

But there’s a fourth thing I’d like to emphasize. It’s adaptation.
october 2017
Colin Kidd | Gove or Galtieri
There is an air of wistful regret to Ziblatt’s conclusion that ‘a viable and robust conservative political party’ with a ‘chance of winning elections at least some of the time’ is the price we pay for democratic stability. The alternatives, he contends, come at a much heavier price. Churchill once joked that ‘democracy was the worst form of government, apart from all the others’; but in Ziblatt’s bleak refinement of that insight, we wouldn’t have a functioning democracy at all without a viable Conservative option at the ballot box.
october 2017
How the Elderly Lose Their Rights | The New Yorker
Guardians can sell the assets and control the lives of senior citizens without their consent—and reap a profit from it.

By Rachel Aviv
october 2017
How house flippers, not poor subprime borrowers, triggered the US housing market crash — Quartz
Analyzing a huge dataset of anonymous credit scores from Equifax, a credit reporting bureau, the economists—Stefania Albanesi of the University of Pittsburgh, the University of Geneva’s Giacomo De Giorgi, and Jaromir Nosal of Boston College—found that the biggest growth of mortgage debt during the housing boom came from those with credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults.

As for those with low credit scores—the “subprime” borrowers who supposedly caused the crisis—their borrowing stayed virtually constant throughout the boom. And while it’s true that these types of borrowers usually default at relatively higher rates, they didn’t after the 2007 housing collapse. The lowest quartile in the credit score distribution accounted for 70% of foreclosures during the boom years, falling to just 35% during the crisis.
october 2017
Stumbling and Mumbling: The crisis of positive-sum capitalism
From the mid-40s to the mid-70s, high wage growth and full employment were in capitalists’ interests. Rising wages sustained aggregate demand not only via consumer spending growth, but also because higher wages gave firms incentives to invest in labour-saving technology.

In the 70s, though, this ceased to be the case. Wage growth then began to squeeze capitalists’ profits. The positive-sum game became a zero-sum one, as Marglin and Bhaduri have described.

The solution to this was Thatcherism, or if you prefer neoliberalism. Policies aimed at restoring profit margins by weakening trades unions and the welfare state and creating job insecurity helped to raise productivity, profit rates and growth.

But we might now be back in a phase of a positive-sum game.
october 2017

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