Category: Economy

Good Monthly Jobs Report

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The Scariest Jobs Chart Ever


Workforce Participation Rate

There were 916,000 added to non-farm payrolls in March, which is a very good performance, though not anywhere near close to what it was during the before time. (See graph pr0n)

Note that NFP is still down over 8 million from its peak, and the employment-population ratio is lower than it has been since the depths of the 1981 recession, and that the percentage of women in the workforce has risen steadily since that time, so an apples to apples comparison (correcting for women in the workforce and an aging population) might still have us back to somewhere in the great depression.

We’re still in a hole, but it is not as deep:

U.S. hiring surged in March as the economic recovery accelerated, the start of what economists say could be a sustained run of job growth to industries, regions and workers hardest hit during the pandemic.

U.S. employers added a seasonally adjusted 916,000 jobs in March, the best gain since August, the Labor Department said Friday, and the unemployment rate, determined by a separate survey, fell to 6.0%, a pandemic low. Still, as of March, there are 8.4 million fewer jobs than in February 2020 before the pandemic hit.

The jobs rebound is gaining renewed momentum as more people are vaccinated against Covid-19, states lift restrictions on business activity, and consumers grow more comfortable dining, shopping and traveling outside their homes.

Note also that Covid numbers are spiking again, so we may see a reversal. 

………

Friday’s report showed hiring rose in most industries, led by a gain of 280,000 in the category that includes restaurants and hotels. Employment also rose sharply in construction, most manufacturing sectors and public and private schools. Temporary help and auto manufacturing, where a semiconductor shortage has idled assembly plants, were weak spots.

So a lot of the growth was in lo wage jobs.

………

Some economists project job growth will top one million in April. Further out, economists surveyed by The Wall Street Journal project employers will add an average of 514,000 jobs each month over the next year, for a total of more than six million. That would mark the best 12-month stretch of job creation in decades but leave overall employment totals below where they stood before the pandemic.

I’ll always be a pessimist, which comes from the fact that the “experts” have consistently given an excessively rosy assessment of economic outcomes of recessions throughout my entire adult life. 

The levels of inequality in our society will weigh down any recovery.

This Can’t Be Good

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With all the signs pointing to explosive economic growth in 2020, economists are generally predicting a growth rate greater than 5%, the news that personal income fell by $1,516.6 billion (7.1%) from January to February is a pretty dire data point. 

Obviously, there were some freak conditions in February, the massive Texas blackouts come to mind, but this is pretty grim news:

Hence, when the opening line of the press release for this report tell us “Personal income decreased $1,516.6 billion (7.1 percent) in February“, that means that the annualized figure for US personal income in February, $19,945.6 billion, was $1,516.6 billion, or roughly 7.1% less than the annualized personal income figure of $21,462.2 billion for January; the actual change in personal income from January to February is not provided…similarly, annualized disposable personal income, which is income after taxes, fell by nearly 8.0%, from an annual rate of an annual rate of $19,210.5 billion in January to an annual rate of $17,678.2 billion in February…the components of the monthly decrease in personal income, which can be seen in the Full Release & Tables (PDF) for this release, are also annualized figures…in February, the reason for the $1,516.6 billion annualized decrease in personal income was a $1,584.1 billion annualized decrease in government social benefits to individuals, which was only slightly offset by a $37.7 billion annualized increase in business & farm proprietors’ income and a $15.6 billion annualized increase in interest and dividend income…wages and salaries, which fell by an annualized $0.2 billion, were barely a factor in February’s personal income change . . .

Not great economic news.

Jobless Claims Finally Fall Below Pre-Pandemic Record

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There were 684,000 initial claims, less than the pre-pandemic peak of 695,000.

Yes, this is unmitigated good news:

Jobless claims fell to their lowest level of the pandemic last week as stronger hiring and consumer spending drive a U.S. economic revival.

Worker filings for unemployment benefits, a proxy for layoffs, fell to 684,000 last week from 781,000 a week earlier. Claims are now at the lowest point since mid-March of last year, before lockdowns triggered millions of layoffs. They are also below the pre-pandemic high of 695,000, a threshold not crossed for 52 weeks.

“The recovery is really hitting full steam again, and all of the conditions will be in place for a real, explosive liftoff in the summer when hopefully we’ve reached a higher vaccination threshold,” said Julia Pollak, labor economist at jobs site ZipRecruiter.

………

Economists surveyed by The Wall Street Journal this month raised their average forecast for 2021 economic growth to 5.95%, measured from the fourth quarter of last year to the same period this year, from a 4.87% projection in February’s survey. The higher figure would mark the fastest such pace in nearly four decades, following a steep downturn last year.

If these predictions are accurate, this is a blistering pace of economic growth.

I Missed This on Friday

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The Return of the Scariest Job Chart Ever


Workforce participation is still at a 45 year low

Largely because we changed cell phone providers, and my attempts to BYOD have been ineffective. (Not having a cell phone right now is a major drag).

The February employment report came out on Friday, and it was generally positive from a month-to-month perspective, but the job numbers are still worse than they were at the depths of the 2007-2012 recession.

As Calculated Risk observes: (They are also responsible for the graph pr0n)

The current employment recession was by far the worst recession since WWII in percentage terms.

At the worst of the Great Recession, employment was down Down 6.29% from the previous peak.

Currently employment is down 6.21% – the current unemployment situation is about the same as the worst of the Great Recession (and there was no pandemic to contend with in 2009).

I think that saying that we, “Are not out of the woods yet,” is too week a metaphor.

I don’t think that we have even reached the halfway point in Mirkwood.

About F%$#ing Time

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It appears that at least some economists are willing to learn, and they have that the headline unemployment rate is artificially low because it does not take into account discouraged workers. 

This has been true basically forever, but economists, who favor low wages for everyone but economists, and people who sit on their tenure committees have only now begun to realize this:

When Brianna Kipnis was laid off from a fitness start-up last June, she thought it would be nice to take a month off before returning to the jobs market. She cancelled the lease on her New York City apartment and moved in with her parents in neighbouring New Jersey.

………

The hopelessness felt by Kipnis and many others is one of the reasons that US policymakers, from the Federal Reserve to the Biden administration, have lost faith in the unemployment rate as an indicator of the strength of the jobs market.

The rapid decline in the US jobless rate has so far exceeded the forecasts of private sector economists and Fed officials alike. The latest reading, for February, will be published on Friday.

But the headline figure has obscured far less encouraging trends in America’s labour market, and is now considered an incomplete and unreliable guide to the trajectory of the US recovery.

“Published unemployment rates during Covid have dramatically understated the deterioration in the labour market,” Jay Powell, the Federal Reserve chair, said during a speech last month, noting that a more realistic unemployment rate was closer to 10 per cent.

Powell is not an economist, which is the second time that this has happened since (I think) William McChesney Martin left the post in 1970, (G. William Miller was in for about a year in the late 1970s, and his time in office was ……… problematic) and I would argue that he has been the best Fed Chair since then. 

You know what you call 1000 economists at the bottom of the ocean?  “A good start”

Tweet of the Day

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The Texas blackouts perfectly illustrate how post-70s deregulation has simply been a project of destroying state capacity, infrastructure, and coordinating industrial institutions—and replacing them with absolutely nothing

— Isaac Wilks 🎤🐢 (@wilks_isaac) February 17, 2021

This is as succinct a description of Neoliberalism as I’ve seen in a long time.

Once Again, It’s Called Money

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Once again, we have someone writing about a skills shortage, and suggesting that the solution is to sex it up:

Because hiring manager Jim McKeown was talking to an audience, he wasn’t sitting at a desk, his head in hands, but he may as well have been.

 “I don’t know where we are heading with manufacturing,” he said, clearly discouraged. “The last 10 years have been difficult.”

 McKeown wasn’t talking about sales, or business, or the supply chain, or the cost of raw materials – all important to such companies as Kingsbury Inc., which manufactures bearings in Philadelphia and Hatboro.

 For him, and about 30 area manufacturers attending Tuesday’s meeting of the Manufacturing Alliance of Bucks and Montgomery Counties, the issue is manpower.
There’s not enough of it – and what there is is not young.

 ………

 But, he said, manufacturers need to romance them – to show them how their work on a product makes a difference, maybe keeping a jetliner aloft or a heart beating.

 ………

 When interviewing millennials, make sure there is someone close to their age on the interviewing panel, suggested audience member John Trainor, staffing manager at Javan Engineering Inc. in Fort Washington

 ………

 For a quick fix, update a stodgy website so its text and photos tell a compelling story about the company, its products and people, said audience member Clara Console, a human-resources consultant.

 ………

 “Millennials want to see their future,” which does not include working on tools “their grandfathers might have used.”

(emphasis mine)

The word for this self absorbed delusional cluelessness is “bullsh%$”.

One only need look at history:  Until auto workers pay was essentially doubled in 1914, they had trouble recruiting and keeping workers:

At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford’s turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.

Henry Ford had a 371% turn over rate.

He solved it with money.

If you cannot find skilled machinists, or tool makers, or bull semen collectors, Econ 101 gives you the answer: pay them more.

If the author of this article were a journalist, instead of a stenographer, they would have known that.

H/t Atrios.

From the Department of “Well, Duh”

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Over at the Washington Post, Catherine Rampell answers the burning question about millenials, “Why aren’t they getting married or buying houses, and why are they still living with their parents?”

Spoiler alert, it’s because they have crap jobs and they are up to their ears in debt, something which seems to escape all those sage analysts who have spilled barrels of ink over this:

Millennial homeownership rates are way, way down. And believe it or not, that’s probably a good thing.

 ………

 Homeownership rates among Americans under age 35 are barely more than half the national number, at just 34.1 percent. This too is a record low and about a fifth below its peak from the go-go years of the mid-2000s.

………

 Many colorful theories abound for millennials’ abandonment of homeownership. There are, for example, lots of think pieces about millennials’ purported love of the sharing economy and associated communitarian disavowal of all kinds of ownership — whether that be of houses, cars, bikes or even clothes.

But this explanation is wrong, at least when it comes to housing.

 So why are young people delaying getting that deed?

One, they’re putting off getting married, which many still see as a prerequisite to homeownership. (Though a large chunk of millennials, I should note, instead view homeownership as a prerequisite to marriage.)

Two — and this is part of the reason they’re delaying marriage, too — is that they’re poor.

 Relative to earlier generations, today’s cohort of young people is making less money, given their levels of education; more indebted with student loans; more likely to be underemployed; struggling harder to sock away savings; and facing shallower income-growth trajectories.

She’s right, and it’s blatantly obvious to anyone who isn’t busy yelling, “Hey, you kids get off my lawn!”

But for the average pundit, bemoaning the sad states of today’s youth is a an article that writes itself.

It’s catnip for hack writers.

Once Again, We See Cooperation Working Better than Capitalism

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A rural cooperative in Mexico has gotten a permanent license, andit has delivered a service an order of magnitude cheaper than the private politically connected crony capitalists running most of Mexico’s cell phone services:

Until this month, Celia Pérez could only afford a brief weekly call to her husband, Rubén Martínez, who left left their remote rural community in Mexico two years ago to find a job in the United States.

Pérez, 25, was pregnant with their third child when Martínez headed north; he made it to New Jersey and regularly wires home money from his construction job, but the long separation and infrequent calls have been tough on everyone.

Now, a legal triumph by indigenous activists has cracked the monopoly enjoyed by Mexico’s powerful telephone magnates – including the world’s richest man, Carlos Slim – and opened the door to new services which will slash the cost of communication.

Indigenous Communities Telecommunications (TIC) last month won a long battle with the government to become the world’s first not-for-profit group to be granted a mobile phone concession.

………

A handful of public phone booths are hosted in the village’s few shops. Until recently, Pérez paid 15 pesos ($0.80) a minute to call her husband. Once a month, she would travel two hours to Tlaxiaco – the nearest town with mobile phone signal and 3G internet – to send him photos of their young children.

………

An experimental concession was awarded in May 2014, allowing affordable, community-owned telephone services to be installed in 16 communities in Oaxaca over the next two years.

In July 2016, TIC – which works alongside Rhizomatica – was granted the first-ever permanent licence.

………

Nuyoó is the first community to benefit from the July victory.

In all, it cost 180,000 pesos ($10,000) for the equipment and installation – a third of what one multinational provider wanted to charge.

Subscription is free, but each registered user must pay 40 pesos a month – 15 goes to TIC to cover overheads and serious repairs – and the rest stays in the community to cover the upfront running costs.

Calls within the network – which includes 17 communities so far – are free. International and national calls are cheap: one peso will buy five minutes to US.

My bad. It’s not an order of magnitude. It’s a factor of 75, so it’s 7½ times more than an order of magnitude.

Carlos Slim is the richest man in the world because he can charge 75 times the actual cost, and he has the concession because he is politically connected.

When people talk about the virtues of capitalism, they ignore this sort of corrupt reality .

The General Case of Saroff’s Rule

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Let me remind you of what I call  Saroff’s Rule, “If a financial transaction is complex enough to require that a news organization use a cartoon to explain it, its purpose is to deceive.”

Well, a recent paper by economists from MIT, ASU, and UCSD shows that complexity more generally appears to have deception as its primary purpose:

Economist George Akerlof has spent much of his celebrated career thinking about how trickery and deceit affect markets. His most famous insight, which won him the 2001 Nobel Prize in economics, is that when buyers and sellers have different information, lack of trust can cause markets to break down. In those models, no one actually ends up getting tricked — everyone is perfectly rational, so even the possibility of getting cheated causes them to stay prudently out of the market. But in his book “Phishing for Phools,” written with fellow Nobelist Robert Shiller, Akerlof goes one step further. Much of the actual, real-world economy, he says, involves trickery and deception.

………

A recent paper by economists Andra Ghent, Walter Torous and Rossen Valkanov may shed some light on the question. Ghent and her co-authors look at mortgage-backed securities, which figured prominently in the crisis. They try to measure how complex various products were, using measures like the number of pages in the prospectus, the number of tranches in the security and the number of different types of collateral.

That allowed the researchers to see whether more complex products fared better or worse in the years before the crisis. Using Bloomberg data, they look at private-label, mortgage-backed securities issued between 1999 and 2007. They then look forward in time, to see which products defaulted and which ones experienced more foreclosures in the mortgage pools that they used as collateral.

It turns out that complexity was a bad sign. More complex deals experienced higher default rates and more foreclosures on their collateral. So if you were an MBS buyer from 1999 to 2007, the rational thing to do would have been to demand a higher interest rate on a more complex security.

Except that didn’t happen. Ghent et al. found that complexity had no correlation with the yields on MBS. That means that although more complex products were riskier on average, buyers didn’t recognize that fact. The authors also carefully exclude the possibility that complex deals commanded higher prices because they were specially tailored to individual buyers’ needs — in fact, most products contained the same types of collateral, but the complex ones were just of lower quality.

………

Interestingly, Ghent and her coauthors find that credit-ratings companies tended to give higher grades to more complex products. That implied the credit raters were willing to trust issuers when figuring out what was actually in the products got too hard. Maybe it’s human nature to trust our counterparties more when things get too complicated. Or maybe the ratings companies’ well-known bad incentives took over when complexity and opacity made their misbehavior harder to observe.

I will go a step further than the economists do (45 page PDF), the words “fraud” “corruption” and “crime do not occur in the paper, and suggest that this complexity is present because of a deliberate and specific intent to deceive investors, and that the credit rating agencies were willfully blind to this because it made the money.

To paraphrase Paul Volker, no useful innovations have come from banks since the introduction of the automatic teller machine.

Reinstate the principle you can only buy insurance on things when you have a direct interest in their continued existence.

It’s a principle that was made law by the Marine Insurance Act of 1746, and worked until people decided that things like naked credit default swaps were an essential innovation.

Reinstate that.

Put derivatives at the back of the bankruptcy queue, not the front.

Put a Tobin tax on financial transactions.

Shut it down.

Shut it all down.

Economy Grew at Less Than ½ of Forecasts in Q2

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Forecasts were generally at a 2.5% annual rate, and the actual rate was 1.2%:

The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand.

 Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter, Commerce Department figures showed Friday in Washington. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent second-quarter increase.

 The report raises the risk to the outlook at a time Federal Reserve policy makers are looking for sustained improvement. While consumers were resilient last quarter, businesses were cautious — cutting back on investment and aggressively reducing stockpiles amid weak global markets, heightened uncertainty and the lingering drag from a stronger dollar.

So it’s 3 months until the general election, and the economy is slowing down.

Lovely.

Good Jobs Stats this MOnth

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287,000 new jobs in June:

Quashing worries that job growth is flagging, the government on Friday reported that employers increased payrolls by 287,000 in June, an arresting surge that could reframe the economic debate just weeks before Republicans and Democrats gather for their conventions.

The official unemployment rate did rise to 4.9 percent, from 4.7 percent, but that was largely because more Americans rejoined the work force. And average hourly earnings ticked up again, continuing a pattern of rising wages that brought the yearly gain to 2.6 percent.

“Wow, this one takes my breath away,” said Diane Swonk, an independent economist in Chicago.

An unexpectedly grim employment report in May combined with Britain’s vote to leave the European Union had fanned wider concerns that the American economy was in danger of stalling. During its meeting last month, the Federal Reserve unanimously decided to postpone increasing the benchmark interest rate.

It’s just one month, and part of that number is Verizon strikers returning to work, and it follows a horrible May.

About all we can say is that the Fed almost certainly won’t do anything with rates before the election.

This is the Least Surprising News in ……… Ever

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One of the theories in modern economics is that people will engage in behavior that will provide them with a perceived benefit.

This is literally Economics 101. (Really. It’s in the text books.)

It’s called Rational Choice Theory, and it is a bedrock of Neoliberal (free market mousketeer) economics.

One of the blind spots amongst the followers of Rational Choice Theory is that whenever excessive executive compensation or control fraud is brought up, they suggest that managers operate in the best interests of the shareholders, and further argue that their bloated remuneration is what leads them to take this course.

Of course this has never happened in the history of ……… ever:

It won’t surprise any market-watcher to learn that in the run-up to earnings season, companies tend to lower the bar for top and bottom line performance, thereby giving themselves better odds of exceeding analysts’ expectations.

 However, a new working paper suggests that the sins of omission that occur during the corporate “cheating” season, as it was dubbed by Societe Generale Global Head of Quantitative Strategy Andrew Lapthorne, are far more insidious.

 Authors Kenneth Froot, Namho Kang, Gideon Ozik, and Ronnie Sadka conclude that managers mislead analysts and shareholders during earnings reports, and that their penchant for massaging expectations downwards may be employed in order to open up a window to buy their stock on the cheap in the near future.

It’s not just about buying stocks, its about manipulating the price of stock options.

The researchers developed two hypotheses: either managers make disclosures in a timely matter (and their forward-looking information is quickly reflected in stock prices) or members of the C-Suite actively “lean against the wind” to understate good or bad news — or even offer the completely wrong impression of what’s transpired since the last quarter ended.

 Their findings suggest that guidance (or “bundled forecasts”) provided by managers as well as the general tone of the conference call (analyzed using a “bag of words” approach) “point toward rejection of Timely Disclosure in favor of the Leaning Against the Wind alternative.”

“Leaning against the wind,” huh?

I would call it lying, and some would call it fraud, but I am an engineer, not a lawyer, dammit!*

*I love it when I get to go all Dr. McCoy!

Quote of the Day

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People ignore experts because the experts have been systematically misleading them about what the benefits of policies are likely to be.

—Sandwichman at Angry Bear

He is talking about how various “experts” are perplexed by the fact that a majority of the voters in the UK ignored them and voted for Brexit.

As he notes, the experts for years have been saying that structures can be established for the winners to support the losers, but the policies they support not only make 90% of the population worse off, but it diminishes the political, economic, and, social power of the bottom 90%, which means a withdrawal of support.

This leads to more policies that disadvantage a majority of the population, further increase the power and wealth of the elites.

Rinse, lather, repeat.

Good Point

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Over at Angry Bear, Sandwichman makes a good point: For all the claims that “workplace flexibility” increases employment, the societies with the fewest worker protections have the lowest workforce participation rates:

In its report on “The long-term decline in prime-age male labor force participation,” President Obama’s Council of Economic Advisers writes:

Conventional economic theory posits that more ‘flexible’ labor markets—where it is easier to hire and fire workers—facilitate matches between employers and individuals who want to work. Yet despite having among the most flexible labor markets in the OECD—with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage—the United States has one of the lowest prime-age male labor force participation rates of OECD member countries.

Although it has indeed become conventional, the ‘flexible’ labor markets mantra is not a theory. It is dogma. An article of faith. The theory behind the nostrum of flexible labor markets is Milton Friedman’s natural rate theory of unemployment, which, as Jamie Galbraith pointed out twenty years ago, was constructed by adding expectations to the empirical Philips Curve observation of a relationship between unemployment and inflation:

The Phillips curve had always been a purely empirical relation, patched into IS-LM Keynesianism to relieve that model’s lack of a theory of inflation. Friedman supplied no theory for a short-run Phillips curve, yet he affirmed that such a relation would “always” exist. And Friedman’s argument depends on it. If the Phillips relation fails empirically— that is, if levels of unemployment do not in fact predict the rate of inflation in the short run—then the construct of the natural rate of unemployment also loses meaning.

Obama and his evil minions® should not be surprised by this.

Endorsing general crappiness to the working man has never increased labor force participation rates, because, absent a hyper-Dickensian society, people then opt out of the workforce if they can.

Some Chart Pr0n that Explains Why So the Voters are Pissed Off

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This table shows it all. (click on the picture for a larger popup)

Basically, it shows that the wealthy and powerful have become even more wealthy and powerful by stealing from the rest of us.

Even if people don’t know the actual numbers, they know that our society has descended into a morass of, “Crony capitalism, pay-to-play politics, [and] special interests,” that have further enriched the rich and their pet politicians.

It’s why populism on both sides of the political has been so popular lately.

Mme. la Guillotine is looking increasingly attractive to a lot of people for this reason.

H/t naked capitalism.

What is Wrong with the Clinton Wing of the Democratic Party Succinctly Stated

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I am not at all surprised that it is a Brit who notes that aggressive identity politics has pushed economic justice out of the political spotlight.

I would argue that some political factions, most notably the Clinton political machine, have done so deliberately, because it allows them to check the “right” boxes while still aligning themselves with what Theodore Roosevelt called the “Malefactors of Wealth”.

People like Wal-Mart (Hillary was a member of its board for years) and Goldman Sachs (Hillary’s speeches, and they funded her son-in-law’s hedge fund) are Hillary’s peeps, because they all agree that focusing on identity politics, as opposed to the the increasingly ferocious war on the average American worker or the financialization of our economy, is a good thing:

The rise of identity politics means that the personal is commonly understood to be political. Being a radical today relates as much to who you are as to what you think. Class struggle, at one time the raison d’être of the socialist movement, has been usurped on the left by the personal grievances of women, gays and ethnic minorities.

 Identity politics was an understandable response to some of the injustices of the twentieth century. Despite the loftiness of much left-wing rhetoric, sexism, racism and homophobia have never successfully been eliminated from socialist politics for the simple reason that these movements reflect the societies in which they were conceived. It was often made apparent to women in particular that the priorities for leftists lay strictly within the class framework.

 It would be wrong to imply that today this dynamic has been turned on its head. One can still find sexism, racism and homophobia on the left as easily as one can find it in wider society. In an article for Slate about the US Democratic primaries, Michelle Goldberg wrote in late 2015 about a cultural phenomenon of so-called ‘Bernie Bros’ – male supporters of US presidential candidate Bernie Sanders who ‘seem to believe that their class politics exempt them from taking sexism seriously’.

 ………

 Ultimately, though, the left should seek to move beyond identity politics for the simple reason that it is compatible with neo-liberal economics. Identity politics can co-exist with the corporate boss who makes more money in a week than his cleaner takes home in a year – as long as the chances of being the boss are assigned proportionally among different ethnic groups, sexualities and genders. Individual winners and losers remain as remote from each other as ever; they are simply sorted in direct proportion to their numbers in society. The ultimate aim of identity politics is to ‘tune up’ the elite rather than to abolish it.

 ………

 Class politics must certainly evolve with the times – at the very least it should take account of the legitimate grievances of people who feel marginalised for reasons other than their class. However, liberal identity politics is increasingly a zero-sum game in which white men must invariably lose out so that women, ethnic minorities and LGBT individuals can prosper. With no account for the impact of class, this will simply give rise to another injustice, or at the very least, compound an existing one.

(emphasis mine)

I think that the author, James Bloodworth, undersells the deliberate nature of this transformation.

When one looks at the professional class, doctors, lawyers, and (most significantly) college professors, the top 2-5%, this focus on identity politics benefits them.

While they have not benefited to the degree of the top 1% of 1%, they have benefited, and now it’s easier to for them to find inexpensive domestic help.

Another Myth Busted

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It turns out that rich people do not relocate when a state raises taxes:

When it comes to taxes, millionaires have short fuses. Ratchet up their rates and they’ll blow you off and move to a low-tax, or no-tax, state.

 Or so goes one argument against taxing the rich: States that levy a “millionaires tax” risk chasing those millionaires away to Florida, Texas, and other places with no income tax. Hedge fund manager David Tepper’s recent decision to move from New Jersey to Florida, possibly creating a billionaire-size hole in Jersey’s budget, raised alarms. Golf great Phil Mickelson, shortly after his infamous Dean Foods stock trade, complained about his high tax rate in California and threatened to move to Florida.

Now, a study based on 13 years of tax data finds that most millionaires don’t move cross-country just to avoid a tax bill. It turns out that the rich, while perhaps different from us, aren’t all that mobile. When they do move, it’s often for reasons that have nothing to do with taxes. For one thing, they appear to like the beach.

The study, published in the June issue of the American Sociological Review, suggests that states—and countries—may have some leeway to raise taxes on the wealthy without scaring away their tax base. It has obvious political implications, possibly serving as ammunition for those who favor taxing the rich. It could help advance the arguments of presidential candidates Hillary Clinton and Bernie Sanders, for example, who have both proposed higher taxes on upper-income Americans.

And if they did leave, good riddance.

If they leave, they lose political influence where they formerly lived, and the less influence that the self-obsessed pampered assholes have, the better.

Why Not Both?

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Angry Bear wonders if, “Economists Idiots or Just Delusional?”

If reducing the value of the policies If held by those who are continuously employed, either by taxing them or forcing those people to move to a less comprehensive plan than their risk-aversion preferences, is going to “reduce costly distortions in U.S. health care,” the only possible conclusion is that total health care spending is going to get costlier on average.

Yes, you might argue this will reduce “distortion.” But you would have to be an idiot—or, apparently, Alan Auerbach (Strongly) or Austan Goolsbee—to believe that is a good thing.

It does explain many of the policy shortcomings of the Obama animation.
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