Frankly Curious http://franklycurious.com/ Everything interesting to everyone interesting en-us Nucleus CMS v3.64 © Weblog http://backend.userland.com/rss http://franklycurious.com//nucleus/nucleus2.gif Frankly Curious http://franklycurious.com/ From the Middle Out xml-rss2.php?itemid=5360 Everybody's been writing about Alan Krueger's talk at the Rock and Roll Hall of Fame. Who is Krueger? The original drummer of the Jimi Hendrix Experience? The guy who wrote "Wild Thing"? A rock historian? No, no, and no. He is the chairman of the White House Council of Economic Advisers—the kind of person who often gives talks at the Rock and Roll Hall of Fame.

The talk was titled "The Land of Hope and Dreams: Rock and Roll, Economics, and Rebuilding the Middle Class." Neil Irwin was the first person I saw report on this and he focused on the most shocking bits of data about income inequality in the music industry. In 1982, the top 1% of musicians earned 26% of all concert revenue. In 2003, it had increased to 56%—more than double! So as bad as our economic inequality is generally, it is even worse in the music business. That probably doesn't come as a big surprise, but why it is so is hardly obvious.

Based upon work by a couple of sociologists, it turns out that our tribal instincts make music much more of a winner-take-all market than would be indicated by artists' actual appeal. Put bluntly: people are much more interested in music that they know is popular. I know this from my own experiences. Whenever I spend time with people who listen to what is more or less "Top 40" radio, I am struck by how generic and uninteresting the music is. It seems that it is popular because it is popular. I don't say this as a snob. There is plenty of music I don't personally enjoy that I still think is great. I think I am in a position to distinguish between music I don't like and music that has all the creativity of a GM assembly line.

Dean Baker added to this discussion by noting how the ever increasing copyright length adds to inequality. Marketing new artists is an expensive endeavor. It is much cheaper to just re-release yet another version of an old band. As a result, the money just keeps flowing to Paul McCartney and Peter Frampton—both of whom are already wealthy. Baker also noted the extra profits that certain artists made as people switched from vinyl to CDs to MP3s and then, of course, back to vinyl. No one need buy "The Man from San Sebastian" more than once.

E.J. Dionne focused his attention on Krueger's point about the luck that is involved in being successful in the music business. And of course, it is as about as true of the economy generally. Dionne wrote:

I confess: I love any economist willing to say straight out that luck plays a large part in how well we do. The prosperous are especially disinclined to acknowledge that however hard they worked or ingenious they were, they were also lucky. The role of good fortune in determining success provides a powerful moral underpinning for more egalitarian policies.

And that gets to Krueger's main point that we need to grow the economy from the middle out. We've spent the last 35 years growing the economy from the top down. Unfortunately, what has happened is that the economy has grown and those at the top are the only ones who have benefited. The real problem is that the rich can take care of themselves. Even if the government enacts laws designed to take money away from the rich, they have the ability to protect themselves. But when the government enacts laws designed to give money to the rich, there is no counter balance. The middle class are in no position to protect themselves. And that leaves us where we are today.

It is good to know that Obama has people like Alan Krueger around him. I still don't expect much. Recent history indicates that under Republican administrations, income inequality gets much worse. Then, under Democrats, it gets slightly better or at least only marginally worse. Countering the last 35 years of dysfunction is going to take a lot more than incremental improvements. I suspect Krueger knows that. But whether he has the strength of conviction is hard to say. Regardless, I know that Obama doesn't.]]> Politics xml-rss2.php?itemid=5360 Mon, 17 Jun 2013 20:40:17 -0700 Birth of a Chocolate Chip xml-rss2.php?itemid=5358 On this day in 1691, the Italian painter Giovanni Paolo Panini was born. He is known for his view painting: very large scale painting of cities. In his case, it was Rome. It's interesting stuff, but I would prefer more people. He clearly had a gift for historical or mythical material, but he did very little of it.

Igor Stravinsky was born on this day in 1882. He is arguably the most important composer of the 20th century. Most of the last century was a muddle with the majority of the best composers really coming from the 19th century. But Stravinsky seemed to understand the opportunities that the liberalizing environment provided in the context of where music was going. It is hard to listen to his music without thinking that in a strange way it was defining the course of music. As interesting and important as Arnold Schoenberg was, almost no one writes like him anymore and few want to hear his work. He was probably as brilliant as Stravinsky but he used his gifts in a far less edifying way. And I say that as a fan of Schoenberg. It is just that Stravinsky was the 20th century.

Here is Stravinsky at age 82 conducting the New Philharmonia Orchestra in the "Lullaby and Final Hymm" from The Firebird:


GravitationOn this day in 1898, M. C. Escher was born. Everyone knows Escher and his prints of impossible reality. He worked mostly with lithographs and woodcuts, which alone makes him pretty interesting. But it is his ideas that made him world famous. I think it is a mistake to think of him in that way, however. He was much more. For example, Gravitation on the right has all of those elements but is also extremely compelling with the turtles using the polyhedron as a shared cell. If Escher hadn't been so against politics, I would claim it was a socialist statement.

Actor Ralph Bellamy was born in 1904. And two-time World Chess Champion Tigran Petrosian was born in 1929. He was known for his amazing defensive play. He was kind of the yin to Bobby Fischer's hyper-aggressive offensive yang.

Japan's "eternal virgin" Setsuko Hara is 92 today. Social realist director Ken Loach is 77. Newt Gingrich and Barry Manilow are both 70 today. Jello Biafra is 55. Here he is with Dead Kennedys doing one of my favorite songs, "California Uber Alles." You've got to love a guy who (rightly) thinks that Jerry Brown is too conservative. Calling him a fascist is a bit hyperbolic, but that's why it's so fun:


The younger Farrelly Brother, Bobby is 55. And Greg Kinnear is 50.

The day, however, belongs to Ruth Graves Wakefield who was born on this day in 1905. Who could beat out Stravinsky and Escher and Biafra? Who is more important than all of these remarkable men? Why, only the inventor of the chocolate chip cookie! Wakefield worked as a dietitian and a food lecturer when she was young before starting a tourist lodge, Toll House Inn. She invented the cookies when she used chunks from a semi-sweet chocolate bar for her chocolate cookies, because she was out of baker's chocolate. She sold the recipe to Nestle's in exchange for a lifetime's supply of chocolate.

Happy birthday Ruth Graves Wakefield!]]> Socializing xml-rss2.php?itemid=5358 Mon, 17 Jun 2013 17:27:07 -0700 Good News on Filibuster Reform? xml-rss2.php?itemid=5356 Greg Sargent wrote an article this afternoon that really has me scratching my head, Do Senate Dems Have the Votes for the 'Nuclear Option'? The word on Capital Hill is that the Democrats may not have enough votes to enact the "nuclear option"—the move to abolish the filibuster on judicial nominations. Apparently, there are four Senators who are not keen on this filibuster reform: Carl Levin (MI), Patrick Leahy (VT), Jack Reed (RI), and Mark Pryor (AR). As a result of Frank Lautenberg's death, this puts the number of Democratic votes for the "nuclear option" down to just 50—not enough to pass.

These four Senators are an odd collection. The first three are somewhat liberal from liberal states. I can understand someone being very much in favor of minority rights and really wanting to keep the filibuster. But when the Republicans last controlled the White House and the Senate, they effectively eliminated the filibuster. This was at a time when the Democrats were using the filibuster half as much as the Republicans are now. Plus, the rate was decreasing. Can these guys really think that they are preserving the filibuster and not just, you know, preserving the filibuster for as long as it advantages the Republicans? Really: I don't get it.

The fourth Senator, Mark Pryor leans somewhat conservative, and given that he's from Arkansas, I can hardly blame him. But even he's an odd one to be against this. During the Bush years, he was part of the Gang of 14, who effectively ended the Democrats' ability to filibuster. I know, I know: the Gang of 14 compromise was supposedly a way to maintain the filibuster. But in practice it just meant that the filibuster remained as long as the minority didn't use it. And when the Republicans were once again in the minority—Quelle surprise!—the Gang of 14 broke up. So it would seem that Pryor is very concerned about protecting the minority, but only when his own party is in the majority. Of course, Pryor is known to be kind of an idiot:


What I find perplexing in Sargent's article is his concern that the Democrats don't have the votes for the "nuclear option." First, it is not at all clear that none of these four will vote for it. He wrote that Leahy and Pryor are "question marks" and Reed is "a Maybe." (I'm not sure why he capitalized it.) And then there is the Joe Biden factor. Sargent showed that Biden is virtually guaranteed to be on board, so there are the 51 votes that the Senate needs.

I would add one more thing: the Democrats could wait until October when Cory Booker (or regardless, some Democrat) wins the special election and puts a Democrat back in the Lautenberg seat. So I think that Sargent is just being overly gloomy. I usually share that gloom, but it looks pretty sunny this time. And I'm especially happy that my two Senators Boxer and Feinstein are on board. Let's reform that filibuster!
]]> Politics xml-rss2.php?itemid=5356 Mon, 17 Jun 2013 14:14:03 -0700 Global Warming and Budget Analogy xml-rss2.php?itemid=5354 In his column today, Paul Krugman argues that we need to stop worrying about the long term budget. Basically, he thinks the opportunity costs are too high. We are in no position to judge what policy ought to be 20 or 30 years from now. What's more, legislators today can't constrain what legislators in the future will do. But by focusing on the basically mythical "long term" we are wasting the opportunity to do something about the current jobs crisis. I am, of course, completely in agreement with him. However, he counters an analogy between the long term budget and global warming in a way that is incorrect.

Conservatives are keen to point out the supposed hypocrisy of caring about the uncertain long term effects of global warming but not caring about the uncertain long term effects of budget deficits. Krugman counters the charge of hypocrisy by noting that if we are right, global warming will be a catastrophe. That's not really true. For one thing, the deficit scolds claim that if we don't balance the budget right away it will be a catastrophe. The government will collapse in debt and old people will live and then quickly die on the streets. It will be Mad Max in our own lifetimes.

The issue (which I'm sure Krugman knows) is response timing. If it had to, the federal government could balance its budget this year. It could even buy back all of its bonds so it didn't even have any debt. All of these things would be terrible, but the fact remains: we can fix any budget problem at any time. That is not true of global warming. The lifetime of a molecule of carbon-dioxide is very roughly 75 years. That means if we stopped removing the gas from the ground and putting it in the air, we would still have elevated concentrations for hundreds of years in the future. Unlike with the budget, we cannot "stop on a dime."

Krugman brings up what I call the Social Security Paradox: in order to stop future benefit cuts, we must cut benefits now. That is the heart of why global warming is not like the federal budget. Doing something now about Social Security doesn't do much for us in the future given that it is not at all clear there will be a future problem. (Also: if a real problem shows up, maybe we could address it with more tools than the usual conservative obsession of cutting benefits.) Doing something now about global warming will help us in 75 years. Once we release carbon-dioxide into the atmosphere, it is extremely difficult to remove it quickly.

The budget deficit is more like local air pollution. Once cars were prevented from releasing large amounts of carbon-monoxide into the atmosphere, carbon-monoxide pollution ended almost immediately. It helps that CO only lives in the atmosphere for half a year, but the bigger point is that the effect of the gas is local and they quickly move out of urban areas. For the purpose of the greenhouse gases, there is nowhere for them to go other than to be taken up into the soil or oceans. And that's why global warming is so frightening: once it is clear there is a problem, mitigation is really hard. That isn't the case with the federal budget.

Afterword

For more on this, see a short article I wrote last year, A Really Big Problem.]]> Politics xml-rss2.php?itemid=5354 Mon, 17 Jun 2013 11:05:28 -0700 Beyond Patent Protection xml-rss2.php?itemid=5351 One of the big arguments against libertarianism is the threat of monopolies. If there is no government, what will stop all markets from becoming noncompetitive? What stops a big company from using its resources to sell below cost for long enough to drive the competition out of business? The answer to these questions is hardcore. If one company gains a monopoly and doesn't keep prices down, another company will see an opportunity and enter the market. This is a perfect libertarian answer because it is (1) perfect in theory and (2) hopeless in practice.

The way this situation would work in the real world is that most businesses would not enter the market because they would know that the current monopoly would simply force them out of the market by selling below cost. The only business that would enter the market would be another behemoth that was only entering the market to destroy the current monopoly and take over the place themselves. Doing anything else would have too high an opportunity cost.

One particularly interesting aspect of this situation is that it would cause prices to be highly variable. Today, the price of sugar might be 50 cents per pound but next week it might be $5.00 per pound. Libertarians are generally very concerned about price stability. As you can see here, government bonds are not the only thing that affects price stability. What's more, libertarians are fond of pointing out that inflation is a kind of tax. And that's true—a tax with many advantages. But monopolies are their own kind of a tax—but a tax that does no good.

I bring this up, because the Supreme Court just found in favor of free markets in FTC v. Actavis. In a 5-3 decision, the Court found that the FTC could sue drug companies for paying other companies to not produce generics. This brings up our entire broken patent system, but this particular case has to do with the time after the patent is over. Suppose Company A just lost its patent on a drug. Company B is going to start producing the drug at a much cheaper price. So Company A pays Company B to not produce it. According to libertarian thinking, there is nothing wrong with that. And three justices agreed: John Roberts, Clarence Thomas, and Antonin Scalia. Samuel Alito recused himself, but he certainly would have voted with them.

This is all funny when you look at it the right way. The libertarian argument here is that two companies ought to be able to enter into their own contracts and it has nothing to do with the rest of us. In fact, there are other companies that could start to make the drug, right? As I've indicated, this is nonsense. But what's funny is that the very same libertarians who would argue that the government shouldn't get involved in the market in this way think that the government should get into the market in a very big way by allowing patent monopolies.[1]

The idea for allowing patent monopolies was always to encourage innovation. But at least when it comes to new drugs, the government spends as much as the drug companies do on research. What the drug companies spend a lot of money on is advertising. They spend almost 20 times as much on marketing as they do on research. Clearly, we would be doing better if we got rid of patent protection and provided more public funding of research. It would also have the advantage of providing better drugs and not just the newest boner pill that's only advantage is that it is still covered by a patent.

The problem with libertarians or communists or anyone who is dedicated to an ideology is that they limit their options in solving real world problems. To libertarians, patents aren't about creating a dynamic marketplace; they are about some theoretical notion of freedom. But the truth is that freedom is not an absolute concept. There is the freedom of companies to subvert market forces so they can keep drug price margins high; and there is the freedom of individuals to buy drugs at a free market price. The fact that we have patents at all indicates that we understand this freedom trade off. But libertarians and like minded conservatives seem to think that the only freedom that is in need of expansion is the freedom for businesses to increase their profits. Thankfully, in this case, five members of the Court came down on the side of individual freedom—the kind that is increasingly fragile in this country.


[1] There are some libertarians who don't believe in patents. They are rare, however.]]> Politics xml-rss2.php?itemid=5351 Mon, 17 Jun 2013 09:25:46 -0700 Why Conservatives Hate the Government xml-rss2.php?itemid=5349 I've got a great way to make a group of people think that the government is complete corrupt and without any accountability. It's really easy. Have the people on TV tell them every day about some terrible scandal. Of course, there is no actual scandal. The news readers just report things that indicate that there is a scandal and don't report the vast majority of the evidence that indicates there is nothing going on. And then, when all the possible scandal confirming information has been reported, the TV drops the subject altogether.

This is brilliant because the news source never actually lied. It provided true, if highly misleading information. But the biggest part of this is not information at all; it is the sudden lack of reporting. Why would they do that?! It must be yet another example of the government clamping down on the news media. We really do have a fascist government! It won't even let them talk about these scandals on TV!

Yesterday, The Hill reported, House Republicans See Long Slog Ahead for Probes of IRS Targeting. It got me thinking about the effects that all of these non-scandals are having on conservative television viewers. For almost a year, they've been told that Benghazi is a big scandal: Obama killed those four people! And now? Nothing other than occasional comments to the effect that Benghazi is a bad scandal that shows how terrible the administration is, even if there is no evidence to support that.

What's interesting about the article in The Hill is that the Republicans themselves seem to be aware that they are doing this. Actually, it's been pretty clear for a while. Why else would Darrell Issa be selectively and deceptively releasing information from the House hearings? But it goes further than that:

"We knew that there was going to be a time when we would not put any new information out there," said Rep. Charles Boustany (R-LA), who heads the Ways and Means investigations subcommittee. "I wouldn't even describe it as a lull in the process. I would just say that without new information to reveal out to the media, it seems quiet."

In other words, "We are only going to put out information that furthers our goals of embarrassing the White House." It also makes it sound as if the Republicans on the committee want to slow the process down so that they can use this non-scandal (You do know it is a non-scandal, right?) throughout next year's election cycle to impugn the Democratic Party.

As much as any group, conservatives bemoan the fact that the people have no respect or confidence in the major institutions of American life (except shockingly, the military). Yet they are willing to hurt our country on this score in the name of short term political gain. There is no doubt that Charles Boustany and Darrell Issa know there is no scandal behind the IRS targeting of Tea Party groups. But they will use their plausible narrative and willing accomplices in the conservative media to imply that it is true. It's shameful. It's traitorous.]]> Politics xml-rss2.php?itemid=5349 Sun, 16 Jun 2013 19:15:09 -0700 The Wealth of Adam Smith xml-rss2.php?itemid=5347 On this day back in 1792, the British naturalist and painter John Linnell was born. He is best known today for not being the guy in the band They Might Be Giants who has the same name. What I find remarkable about painters like Linnell and John Constable is that their art has been so thoroughly integrated into the popular painting repertoire that it seems generic. What once had meaning and beauty has been so beaten by a bourgeoisie aversion to modernist art that the whole movement feels more non-offensive banality than anything else.

Of course, the problem is not just history. To me, Romantic art always seems rather fake. Jane Austen lampooned what she clearly saw as the affected nature of the Romantic movement in Sense and Sensibility. I've never felt that Marianne's proclamations were anything by artifice, even if she was her own biggest mark. So what I'm getting at is that even though I don't doubt the talent of the great Romantic landscape painters, there is always something that hinders me in appreciating them the way that I can most other forms of art. And I'm not entirely sure that I'm wrong. I feel a lot more confident in my musical tastes and I'm not that fond of Romantic composers either.

Stan Laurel—the skinny half of Laurel and Hardy—was born in 1890. They were a brilliant team, although I generally find the films uneven. Still, they always make me laugh quite a lot. Here is an interview with the two of them from 1947 when they visited England. It is sweet and the film clips all look so bad:


Jack Albertson of Chico and the Man was born in 1907. I'll probably have more to say about that this next week because Freddie Prinze's birthday is coming up.

Katharine Graham was born in 1917. She was the publisher of the Washington Post during its glory days of Watergate. But she is perhaps best remembered for the fact that when her father retired, he gave the newspaper over to her husband. After her husband died, she took over the paper. It's a great reminder of just how people thought in the 40s and 50s. It seems we have made some progress and Graham is part of that.

And Love Story author Erich Segal was born in 1937. Just for the record, it was not based upon Al and Tipper Gore. But Al Gore never said that. Al Gore Support Center explains:

The Boston Globe's Walter Robinson and Ann Scales attacked Gore's veracity: "He has also said that he and his wife, Tipper, were the models for the movie Love Story, only to be contradicted by the author, Erich Segal." Their source was Time magazine. Trouble is, Gore never made that claim and Segal never contradicted him. Chatting on the press plane about movies for a couple of hours, Gore had simply remarked to two Time magazine writers on a newspaper interview in which Segal had described Al and Tipper as his models for the movie. True. The Tennessean did so report, but it misquoted Segal, who had told the reporter he based only the male in the movie on Gore. So Segal's "contradiction" was a correction for a newspaper, not Gore. Segal noted: "Al attributed it to a newspaper. Time thought it was more piquant to leave that out." End of story? Not a bit. Heavyweight commentators seized on Love Story to lash Gore for "inflating his past," "bragging" and "prevaricating."

I don't bring this up because I'm a huge Al Gore fan. But it really bugs me that our "objective" journalists start with a narrative: Al Gore is a liar. And then they shoehorn every bit of information into that narrative. Of course, it didn't really hurt Gore; he did, after all, win the presidency; it was just that we don't live in a democracy. But it does hurt the media. I think the reason so many people still voted for Gore was that they figured, "I'm sure Gore is a liar, but I doubt he's any more of a liar than Bush." Note also: the media wasn't particularly interested in Bush's real lies about his time in the Air National Guard, but they were very interested in complaining that Gore said he was the real Oliver Barrett.

The great cinematographer Vilmos Zsigmond is 83 today. Joyce Carol Oates is 75. Laurie Metcalf is 58. I spent half my life thinking she was Madeleine Stowe. Go figure. Anyway, Metcalf was in the original production of Balm In Gilead where she played Darlene. Here is Metcalf doing a very funny speech from the play:


The first half of the screenwriting team Scott Alexander and Larry Karaszewski is 50. And Harold of Harold and Kumar, John Cho is 41.

The day, however, belongs to Adam Smith who was born on or about this day in 1723. He was fundamentally a moral philosopher and that's actually a very good reason to not take him all that seriously as an economist. There were a number of philosophers thinking about economics at that time along the same lines; in particular: David Ricardo and John Locke. The real problem is not that they were overly concerned about government debt but rather that people today continue to trust them as though we haven't learned anything over the last 250 years. In fact, it only took about 50 years for John Stuart Mill it reveal most of the problems with their thinking. But as you may have noticed, the power elites decide what they want to do first and then look for a way to justify it second.

The funny thing is that even with Smith's failings as an economist, he never said the main thing that modern people associate with him. He is now associated with perfect markets. If you just leave markets to themselves, they will adjust into a kind of libertarian utopia. What Smith actually said is that markets left to themselves work a lot better than one would think. This is more or less the same as saying that markets kind of work. That's a far cry from the modern mythology of perfect markets.

Regardless, he was a great and important thinker. Unfortunately, if Marx is the opium of the socialist, Smith is the opium of the capitalist. Or at least the myth of Smith is. If he were alive today to see how we've created such an unequal society where wealth is mandated to flow from the poor on up, I'm sure that 18th century moral philosopher would be appalled.

Happy birthday Adam Smith!]]> Politics xml-rss2.php?itemid=5347 Sun, 16 Jun 2013 17:34:42 -0700 Edvard Grieg xml-rss2.php?itemid=5345 The great French painter Nicolas Poussin was born on this day in 1594. His work is both Classical and Baroque. He paints mostly historical or mythical scenes. It's all very crowded and intense and beautiful. The great German musical theorist Georg Joseph Vogler was born in 1749. Arranger and "difficult" composer Robert Russell Bennett was born in 1894. What do I mean by "difficult"? I mean that even I have trouble appreciating his work. Psychologist Erik "Identity Crisis" Erikson was born in 1902. Thomas the Tank Engine creator Reverend W. Awdry was born in 1911. Virologist Thomas Huckle Weller was born in 1915. And Waylon Jennings was born in 1937.

Harry Nilsson was born in 1941. He was one of the greatest popular singers and songwriters of all time. Everyone knows his music but most people haven't heard of him. Two of his better known songs are "Without You" and the novelty single "Coconut." But he didn't write his best known song, Fred Neil's "Everybody's Talkin'." There's no doubt, however, that Nilsson's performance is what makes the song. He manages to make the song simultaneously perky and dark. "Skipping over the ocean like a stone," for example, does not come off as carefree. Here is his version:


The great actor Simon Callow is 64 today. As much as I love him as an actor, I now think of him more as an Orson Welles biographer. Many people take offense at his biographies, but all he's done is to remove the many layers from myth of Welles' life. Welles was a gifted actor with one of the greatest voices ever. He was also a director of unsurpassed skill and unparalleled creativity. I disagree with Callow in his belief that Welles was fundamentally an experimentalist who didn't really care about finishing films. I also think he is a tad critical of Welles' life. But I do think he cuts to the core of Welles' genius and appreciates him in ways that many of his fans do not.

James Belushi is 59. Julie Hagerty is 58. And the second Saavik, Robin Curtis is 57.

The day, however, belongs to the great Norwegian composer Edvard Grieg who was born on this day in 1843. Although he was a Romantic composer and I'm not all that fond of the period, he transcends it. Here is his very playful piece, "In the Hall of the Mountain King" from Peer Gynt, which I'm sure you know:


Happy birthday Edvard Grieg!]]> Music xml-rss2.php?itemid=5345 Sat, 15 Jun 2013 07:24:27 -0700 Supply Side Dogma xml-rss2.php?itemid=5342 I came upon two excellent articles yesterday that attack supply side economic dogma. But before I get to that, I want to run through a small thought experiment using my friend Will. He has built a company from the ground up, Dirt Cheap Computers. Basically, it is him (along with me at times) and he builds and repairs computers and networks. Will's tax rate really doesn't affect how much he works. He would certainly like to keep more of the money he earns but if the government lowered his tax rate, Will wouldn't start working more because he was suddenly making more per hour. A primary reason for this is that like most small business owners, Will is already working as much as he can. He is constrained by the number of people around who want to do business with him. He can just announce that he's going to work 10 more hours per week, but they won't be paid hours. He needs customers.

What this shows is that business profits depend upon demand and not supply. Will has tried supplying a cheaper and cheaper service and what he's learned is that it doesn't really bring in many more customers. But conservatives in the economic policy debate don't seem to understand this basic fact that all small business owners understand. It is like they got their economic education from Field of Dreams, "If you build it, they will come." Well, that just isn't true. If people have no expendable income, they will not go to Disney Land. After 30 years of supply side economics—the idea that giving the rich more money will cause economic expansion—I am amazed that we continue to discuss it. Supply side economics is a lie. It doesn't work.

Neera Tanden wrote a great article over at Democracy Journal, Burying Supply-Side Once and for All. In it she explained exactly how and why supply side economics is supposed to work and why it does not. Basically, it all comes down to Will's demand problem. If the government wants to make small business owners like Will more successful, it should provide poor people with more money so they can buy things like computers or at least computer repairs. If all my discussions of economics confuse you, I highly recommend reading her article. It is a great primer on the subject.

The second article is by Dylan Matthews of Wonk Blog, Do Low Taxes on the Rich Leave the Middle-Class With Lower Wages? As usual with Ezra Klein's bunch, Matthews took forever in answering the question. But the result was quite interesting. It was based upon a paper by Saez, Piketty and Stantcheva. The answer is yes, of course, but the question is why. Their theory is that supply side policies make it so.

As Tanden noted, cutting the taxes of the rich does not cause them to go out and work more. But Saez et al claim that lower taxes do cause the rich to make more. Think about it. You are the Vice President of Sales for some corporation. Your taxes are cut in half. You have a big incentive not to work more but to negotiate a better salary. Since productivity doesn't go up because of reduced taxes, the higher salaries have to come from the other workers. The pie is no bigger, so everyone at the bottom just gets less. In practice, they don't actually get less; historically we've just seen wages of those in the poorer classes stagnate while all the productivity gains go to those at the top.

When supply side economics first came into bloom almost 35 years ago, proponents called it "trickle down" economics. The idea was that if you gave the rich a lot of money, much of it would trickle down to the poorer classes. You don't hear people talking about that anymore because that absolutely has not happened. But the whole of supply side economics has been shown to be a scam. And yet it continues. Tanden has an explanation for that:

It's probably not a coincidence that the biggest beneficiaries of supply-side policies happen to be the same wealthy Americans who bankroll the Republican Party, along with the conservative media and think-tank infrastructure. But I don't think this is simply a story of bad-faith arguments driven by cynical self-interest. The fact is that there's something quite seductive about the idea that the best way to stimulate growth is to give yourself a tax cut. And if you happen to be an affluent conservative, there's also something very appealing about a theory that says that your work and your savings are principally responsible for driving the economy forward. In other words, policy arguments in favor of tax cuts for the rich to induce more wealth generation neatly coincide with and reinforce a world view that holds that individuals become rich only through their own prowess, not because of the investments of others, or heaven forbid, the luck of the draw.

And it only gets worse. The greater the income inequality gets, the more political power the rich get. As I note almost daily on this blog, the Democratic Party is almost as beholden to the rich as the Republican Party. But it is the Republican Party alone that holds onto the long discredited supply side dogma. And they will continue to do so. That's why we all need to understand it and counter it wherever it shows up.]]> Politics xml-rss2.php?itemid=5342 Sat, 15 Jun 2013 00:40:30 -0700 It Takes Junior Walker xml-rss2.php?itemid=5340 On this day in 1726, the father of modern geology, James Hutton was born. He proposed the idea that the surface of the earth was slowed formed by processes such as erosion and sedimentation. I never think of geology as an especially theoretical subject. This undoubtedly is based not on any great understanding of the subject but the fact that when I was in school, the geology students were all so fit and tanned and always going on geology camping trips. I extrapolated based upon that. But Hutton figure out how the earth works primarily based upon theory. In addition to his many accomplishments, he is the first person to propose what came to be known as the Gaia Hypothosis.

Opera composer Antonio Sacchini was born in 1730. Here is a bit from his opera L'isola d'amore. Have you noticed how opera singers (female and male) have gotten, well, very attractive? Or more simply: sexy. This woman could use a couple of pounds, but she has really great legs. And she can sing. I'm not too fond of the choreography, but the rest is impressive:


Uncle Tom creator Harriet Beecher Stowe was born in 1811. Publisher and original author of Bartlett's Familiar Quotations, John Bartlett was born in 1820. I have a 1944 edition of the book always close by. It is extremely well organized. But I have to say: it doesn't usually have the quotations that I'm looking for. It really is necessary to have a more up to date copy since sayings go in and out of vogue.

Burl Ives, who I know as the snowman in Rudolph The Red-Nosed Reindeer was born in 1909. Gene Barry of The War of the Worlds fame was born in 1919. And novelist Jerzy Kosinski was born in 1933.

Two real fucktards are having birthdays today: Donald Trump is 67 and Pamela Geller is 55. And Boy George is 52. I don't have many thoughts either way about Boy George, but for some reason, I read his autobiography.

The day however, belongs to the great musician Junior Walker who was born on this day back in 1931. I've really loved his music over the years. I'm sure you've heard this classic:


Happy birthday Junior Walker! You are sorely missed.]]> Music xml-rss2.php?itemid=5340 Fri, 14 Jun 2013 20:38:41 -0700