Skip to main content


Showing posts from October 16, 2011

insurance for the wealthy, bandaids for the rest

Over at Crooked Timber, there is a short but clarifying post about the cause of the 2008 crash, put in the form of a reply to Brad Delong, who has maintained that what I will call the inequality view of the crash is not true - that is, it isn't true that “we are in a recession basically because of the disppearance of a huge amount of household sector wealth”. The Crooked Timber post arms itself with an arresting statistic from, I suppose, the Census, recycled through Nate Silver's column in the NYT: "The median American’s non-household wealth declined by 14% between 2001 and 2007. So when household wealth evaporated, guess what happened?" Although Brian doesn't go into it in depth, he does use this statistic to point out that the 'boom' in the 2000s covered a bust - the bust in income. Which should lead us to some reflection about the policies that were and are being pursued that contributed to that bust. I have urged the view that it is wron

Are the clerks on the barricades this time?

One day Tolstoy, who was at that time an officer in the army, confronted a fellow officer who he had seen whipping a peasant and asked him: Have you never read the New Testament? The officer replied with a question of his own: ‘have you never read the army’s rules and regulations? Julien Benda put this story as an emblem at the beginning of La Trahison des Clercs, a pamphlet that became famous in the late twenties, because to Benda, Tolstoy’s question was central to what it used to mean to be a clerk – that is, an educated person who defends humanistic values. And the nameless officer’s reply, Benda thought, was what it meant to be a clerk, as the intellectuals abandoned the side of the eternal for the side of pure doxa. The clerk now serves a political passion, and speaks for the interests of a temporal and limited group, whether economic, national, or party. The clerk now sides with the army’s rules and regulations. I, too, am interested in the clerk as a figure, although I betray

Don't let the Fed enact another quiet bailout!

Suggestion for a Occupy Wall Street Sign: Stop Bank of America from Getting FREE US INSURANCE on ITS DERIVATIVES! And here's today's story: Ben Bernanke apparently used a rear entrance in Boston, yesterday, to avoid the Occupy Boston protestors. That's par for the course, as Bernanke and his Fed are masters of the rear entrance. For example, take the Bank of America announcement of its 6 + billion dollars in profits for this quarter. Doesn't that mean that bailing out the banks worked? Our 16 trillion in loans for the behemoths can be criticized on many levels, but surely we can't criticize the techno genius that resulted in a solvent bank system, eh? Well, apparently not. This is what is happening before our eyes, from the Economic populist site: "It appears Bank of America moved Merrill Lynch derivatives to a FDIC insured subsidiary. Bloomberg: Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merril

destruction is the ultimate luxury

I'm dredging this up from a post I wrote in 2002, because I think it is relevant to the psychology of the Occupy Wall Street movement. And to the psychology of the academic and policy elite who criticize the movement. In 2002, two British professors, Andrew Oswald and Daniel Zizzo, reported on an experiment in which various subjects were gathered together and given cash, distributed – by arbitrary gift and betting – in such a way that some got more and some got less. Then, subjects were allowed to anonymously burn other people’s money – only, however, if they were willing to reduce their own. 62% of those tested chose to destroy part of other test subjects' cash, and half of all the cash was destroyed by other subjects. A story about this experiment on the site Mindpixel contains this summing up of the burners: "The researchers found that those who gained the most additional money at the betting stage burned poor and rich alike, while disadvantaged laboratory sub

my own humble attempt at tax simplification

Simplifying the tax system on the 9-9-9 system (which, fans of the Book will notice, is 6-6-6 upside down) is all the rage right now. I have an even simpler plan. It is based on a phrase used over and over by the anti-tax (the rich) crowd. The phrase is simple – taxes take dollars from your pocketbook. Or your wallet. My plan takes this phrase very seriously, because it gives us a nice way to visualize money. The anthropologist, George Marcus, has theorized, from his ethnographic research among the rich, that one of the salient characteristics of fortune is its invisibility. That invisibility has many semiotic effects: one of them is obviously to reverse the marginal disutility thesis, which would make it seem like the millionaire of the billionaire would discount the added dollar. Invisibility melds together all money as one thing – which means that the 4.9 billion dollars made by hedgefund manager John Paulson (the man who, in conjunction with Goldman Sachs, shorted mortgage ba