I-15 CORE project as reported by ksl.com notes lots of jobs and local spending.

By Becky Bruce

UTAH COUNTY -- The recession may not feel like it's really over yet, but the Utah Department of Transportation's I-15 CORE project is helping to the tune of more than a thousand jobs.

The I-15 CORE project has already created 1,000-plus jobs to date, and spokeswoman Heather Barnum says that number could double next summer.

Plus, Barnum says, it's helping the economy in other ways.

"When you're building a road you need aggregates, you need steel, you need trucks, even, on the project," she said. "So we always try to look, where do we have things locally?"

As a result, 95 percent of the supplies used for the CORE project come from inside the state.

That doesn't count boosts from other things, like workers stopping for lunch at a local café -- all of which contribute to the local economy.

by Tom aka Rusty Rustbelt

Health Care: Comparative Effectiveness Research, Gender and Emotion

A key cost bending feature of PPACA (Obamacare) is comparative effectiveness research (see http://www.hhs.gov/recovery/programs/cer/index.html).

This research is designed to apply statistical, economic and clinical analysis to care and treatment to encourage effective care and block ineffective treatments.

It is highly likely, based on current research, the statisticians will recommend less screening and much less treatment for prostate cancer. As my doc says, "almost all old men die with prostate cancer, almost none of them die from prostate cancer." Screening should likely be focused on younger men and more aggressive forms of the cancer.

With men being somewhat nonchalant about such matters, and prostate cancer being something less than a celebrity telethon issue, it is unlikely there will much of a fuss. Money can be saved and the resulting increased mortality will be slight.

At the same time, current recommendations about breast cancer are suggesting a lot less mammography, and there is an uproar.

(I must plead guilty to being protective and emotional, Mrs. R. will have annual mammography, despite a clean history and no risk factors, if I have to pay out of my own pocket.)

Breast cancer hits many women, hits many younger women, and the results are horrifying. The blowback from advocacy groups has been and will be fierce.

So can we get past gender and emotion to become more efficient and effective? I doubt it, and readily admit I am one of the culprits.

by Dan Crawford

Key players in the development of this story are judges in each state as they interpret state law defining proper ownership. Inquiry to two people who know courts predicted most judges would probably simply ignore technical discrepancies, but as the story develops these issues are gaining traction. Bypassing property laws is a big no-no perhaps.

Foreclosure mess ups in Florida as Yves Smith continues to follow the trail of difficulties with titles in 45 states.

GMACS letter to agents concerning foreclosures.

Fitch considering downgrading servicers as difficulties develop and homeowners contest foreclosures based on title problems.

JPMorgan Suspending Foreclosures as one of the big guys says oops.
By DAVID STREITFELD

In a sign that the entire foreclosure process is coming under pressure, a second major mortgage lender said that it was suspending court cases against defaulting homeowners so it could review its legal procedures

Update:
Seven banks asked to review procedures and docs by OCC under the heading Crocodile Grows

Best to keep in mind this image!!

by Stormy and Dan

Drug wars in Juarez…and the cause---NAFTA, really.

Mexico drug cartel in the Guardian:

Mexico's main crossing point to the US has always had a seedy border vibe, but two decades ago it was envisaged as a showcase for a new economy built on free trade, manufacturing and cheap labour.

Factories drew migrants from all over Mexico but low wages kept families poor and often forced both parents to work, leaving children unsupervised. Secondary schools barely functioned, leading to a 50% drop-out rate. Today cartels and gangs find easy recruits amid the 50,000 ni nis, teenagers who neither study nor work. (bolding is mine)

The poverty in Juarez, the slave wages were brought about by NAFTA. Juarez is not only a violent drug town, it is also NAFTA heaven... As this article Die off: explains the hellhole for those who work there; a money maker for all the companies that outsourced:

More below the fold...

Financial Times/alphaville's Cardiff Garcia uses Rebecca Wilder's post Evaluating the "excess" in the US corporate financial balance.

What to make of the excess savings (aka boatloads of cash) that remain on US corporate balance sheets?

In trying to answer this question, economist Rebecca Wilder has used data from the Fed’s latest flow of funds report to update the following graph, originally taken from JP Morgan research:

For the whole article follow the link.

by Bruce Webb

There is a great deal of chatter these days about how Obama lost 'Progressives', what Robert Gibbs derisively called the 'Professional Left' or the 'Left of the Left', and as an example you could read this from Peter Daou How a handful of liberal bloggers are bringing down the Obama presidency and the following key graph:

With each passing day, I’m beginning to realize that the crux of the problem for Obama is a handful of prominent progressive bloggers, among them Glenn Greenwald, John Aravosis, Digby, Marcy Wheeler and Jane Hamsher*.
Virtually all the liberal bloggers who have taken a critical stance toward the administration have one thing in common: they place principle above party. Their complaints are exactly the same complaints they lodged against the Bush administration. Contrary to the straw man posed by Obama supporters, they aren’t complaining about pie in the sky wishes but about tangible acts and omissions, from Gitmo to Afghanistan to the environment to gay rights to secrecy and executive power.

But a couple of things stand out here. First this is an awfully self-referential list, Digby aside it is pretty much the core of the Purity Party who were never on-board the Obama bandwagon to start with. Again Digby partially aside, these people are the modern descendants of the New Left which formed itself explicitly against the Old Liberals and organized itself around topics and principles pretty peripheral to the New Dealers and New Frontier types, anti-colonialism, the Green movement, gay rights all would have been acknowledged as important in principle, but not central. In particular you could be a straight down the line ADA Liberal without endorsing extreme environmentalism or Liberation Theology or marriage equality, there was nothing odd about a midwestern urban Catholic union worker liberal who rejected them all. That is the co-option of Progressive/New Left/Purity Party term of the term 'liberal' in the way Daou explicitly does here is to me off the mark, most of these people don't meet the classic definition of 'Liberal' to start with.

But there is I think no doubt that Obama came into office with both New Dealers and New Democrats in his corner even as the Progressives Hamsher et al were already leery, and that we can identify what I am calling the Spitting (sic) moment that split the former two groups and mostly left the first group on the outside. And while the realities of politics today may never have allowed Obama to satisfy the FirePups entirely, the choice to alienate the New Dealers was freely made in the summer of 2009, Obama had a chance to reform the New Deal Coalition and even to drag Progressives along with him (as FDR did in the thirties,) but frankly he blew it, and badly. And the decision point was----? To be discussed under the fold.

More below the fold...

by Dan Crawford

Institutional Investor reminds us of a vital area not in the news, but drawing enough committed money to attract even hedge funds.

Angry Bear has carried posts on the 1989 experiment with privatization of water utilities in Britain, the strange world of WTO rules regarding water supply, ownership, and provision of sewerage, and the big companies involved in development of water (European owned)resources. Ignored in the US media for a few years now that US drought (2007) doesn't demand attention, the issues will be coming back to domestic attention as money chases profits.

Since water is a central part of living, perhaps we will pay attention again.

The world is getting thirstier. The World Bank estimates that global water consumption will increase by 50 percent over the next 30 years. But the planet has no more water today than it did after the Big Bang, and as with any commodity that appears to be running out, this resource is attracting new interest from investors.

No fewer than eight exchange-traded funds now specialize in water-related investments. The endowments of Harvard University and Duke University have both begun to focus on water. And last year the California Public Employees’ Retirement System committed $260 million to the venture capital firm of one of Sun Microsystems’ co-founders, Vinod Khosla. The firm seeks out emerging water technologies, among other cutting-edge investments.

The market worldwide in stocks revolving around water infrastructure alone — everything from pipes, valves and filters to desalination systems — is thought to be between $550 billion and $700 billion (about $135 billion of that is in the U.S.). William Brennan, a portfolio manager for Summit Global Management, a $450 million-in-assets San Diego–based firm that has a water hedge fund as well as a water-rights fund — a private investment pool that invests in water rights — estimates that the public market could easily grow to $1 trillion.

More below the fold...

by: Daniel Becker

This is a simple little exercise that frankly I wonder why no one with a pulpit (that would be you congress critters, executive office and MSM) has done it. It is for those who think simplistically. Thinking like:  wealthy people create jobs with their extra money and not the non-wealthy people's demand for stuff that makes them feel wealthy.

Let's say that tax cuts create jobs.  770,000 jobs  for what is it, $4 trillion over 10 years? The obvious question is: How many jobs do we really need for that money to break even? Come on conservatives, you're suppose to be the "efficient minded" thinkers. How many jobs would it take to pay it back?

More below the fold...

CASSE (Center for the Advancement of the Steady State Economy) carries this piece:

Demand a Supply of Common Sense; Just Don’t Price It
by Brian Czech

Ah, the confusion of economics students when they encounter the subject of supply and demand in introductory “micro.” They learn that prices are determined by supply and demand. Then they’re taught that the quantities supplied and demanded are determined by… prices!

There happens to be no lurking inconsistency here, no magic trick to dazzle us; not even a ridiculous fallacy to accuse the professor of. It’s just a matter of semantics; supply is not the same as “quantity supplied” and demand is not the same as “quantity demanded.”
................................

So Americans know quite well how Big Money can pollute the truth. Can we expect the mother of all money-making theories, unlimited growth theory – along with its crazy correlates – to come to us on wings of truth? Sure, sure, higher prices stemming from lowered supplies actually “increase” supplies because they provide an incentive to “supply” even more. And more smoke makes the air “cleaner” by providing an incentive for smokers to increase the “supply” of clean air. More traffic increases the “supply” of open road. More noise actually leads to a greater “supply” of quietness. Less of a good thing leads to more of it! More of a bad thing leads to less of it! Or, if you prefer, less of a good thing leads to less of a bad thing, and more of a bad thing leads to more of a good thing!

So if the growthmen want to claim that oil supplies, for example, are actually increasing, not decreasing, as evidenced by a downturn in price, let them play with the word “supply” like the Seven Dwarves play with “addictive!” Let them use “supply” to mean more, less, an OK mess, anybody’s guess … whatever. But may the rest of us not sound, as one old hand used to say, “Dummer’n a doggone boot!” Supply is how much there is, after all, and as you use it, less remains.
...........................

and lifted from comments is the Sandwichman:

Amen. And let’s not forget unemployment. According to the growth orthodoxy, unemployment creates jobs. How does this happen? Easy! Unemployed workers are willing to work for less money, which drives down the cost of labor. The lower cost of labor creates an incentive for investors to hire people to produce more goods and services (at a lower price). All the newly employed unemployed people can then go out and buy the cheaper goods and services with their lower wages. That is unless there is unemployment insurance to keep people from supplying their labor at a lower cost. And if you don’t swallow that crock of bull, you’re committing the “fallacy” of assuming there is “only a fixed amount of work to be done.”

So remember, folks, unemployment creates jobs… and more smoke makes the air cleaner.

by Dale Coberly

HOW TO PAY FOR SOCIAL SECURITY
BALANCE THE BUDGET CUT THE DEFICIT
and REDUCE THE NATIONAL DEBT

Big Numbers and Mental Hygiene

We have been treated recently to a great deal of hysteria about "the deficit" and the huge horrible Burden of Social Security, including the mysterious Trust Fund: is it real? or only Phony Iou's? has it been Looted? or will it Cripple the Economy to pay it back? and why should I Pay Twice for my Social Security? And how did Social Security run up such a Huge Debt anyway? and when exactly is it Going Broke?

All of this is nonsense: Carefully constructed nonsense by the highly paid non partisan experts who dwell in Big Think Tanks dwelling on these things, thinking of better ways to fool the people into cutting off their heads to save the cost of tomorrow's dinner. They don't have to convince you, exactly; they just need to get you to stand quietly or cheer, while they "fix" Social Security. Of course, in their minds "fixing" it means ending it. They don't like the idea that the hired help can retire just because they saved enough of their own money to be able to afford to.

I have shown elsewhere how Social Security can pay for itself with a tax raise that amounts to 20 cents per week per year. In that paper I assumed that the Trust Fund would be used as it was intended... that is the money saved in the Trust Fund, when payroll taxes were higher than needed for current benefits, would be used to help pay for future benefits when payroll taxes might otherwise not be enough to pay for promised benefits. This money has been lent to the government at interest. The enemies of Social Security claim that the United States of America cannot afford to pay back the money it borrowed... cannot honor its debt to Social Security. In this paper I will show how the country can pay back the money it borrowed from Social Security without imposing an Intolerable Burden on anyone.

A good place to begin would be with a set of numbers a Regular Reader sent us last week showing "the Social Security deficit." Regular Reader thinks we need to Look Upon the Very Big Numbers and Be Afraid. Here they are:

More below the fold...

Let us first stipulate that houses themselves are unique entities, but similar enough that we can consider them comparable if not fungible. (In this, they are like any financial asset.) Let us further restrict them in acknowledging that there are significant transaction costs: one’s liquidity preference should not prefer housing to, say, cash-equivalents or marketable commodities, but they are arguably more liquid than a piece of sports memorabilia or antiquarian books or the like. (Given leisure and choice, one sells a copy of Action Comics #1 before one sells a residence; given a need for liquidity and reduced price uncertainty, this preference may change.  The implications of this are left as an exercise.)

Assume a standard lifecycle model with intergenerational wealth transfer; we should perhaps stipulate credit constraints in the first (accrual) period, but that assumption can be relaxed during the second (consumption/transfer) period.

As a complicating factor—or rather, to reflect reality—stipulate that in areas that lack significant emigration, transfer of housing assets commonly is done as a continuous flow (that is, the final stages of transfer are from “empty nest’ to Gen2 living with and supporting Gen1 to Gen2 possessing the domicile as the overlap ceases to be), while areas with notable emigration patterns tend to monetize the housing asset and transfer the cash-and-marketable-securities equivalent to the next Generation.

As a further complicating factor to the above, lands that tend to lack emigration may become areas from which people immigrate. Similarly, some areas may become loci of emigration as employment patterns shift and true Structural Change promulgates through a system.

In such a model, the housing component serves the dual purpose of providing housing and being a vehicle for savings.  Not a good vehicle for savings, under normal circumstances, but a piece of equity that can be passed to the next generation—either as a lump sum cash equivalent or as a domicile, depending on the externalities discussed in the Action Comics #1 parenthetic.)

This effectively transforms all housing purchases into rentals—rent for the generation, passing equity accrued to the next in whichever form is optimal.

From that point, it seems intuitive that if the incentive structure changes significantly—if, for instance, one can realize a substantially greater return from owning and selling than from renting—that a bubble might develop.  And as more people are incented to do what they ordinarily would not—to sell a house, to “trade up,” or to otherwise find ways to realize the gains that come from a relative mispricing in the market—that what might become a bubble either (1) will return toward its original trajectory, (2) will revert toward its original trajectory (though it may find a different [higher or lower] equilibrium point, or (3) grow until it is a clear bubble, that will burst.

Note that we can see graphically the difference between the non-bubble states ([1] and [2]) and the bubble state—the first two would show a sign of mean reversion (a decline), while the Bubble State continues to rise.  I wonder if there might be any evidence for one or the other of those hypotheses?

(via CR)

Maybe someone at the Federal Reserve Board of Boston should throw the above into some standard life-cycle equations and re-evaluate the presentations at this conference, including Glaeser, Gottleib, and Gyourko (PDF)?

by Linda Beale
crossposted with Ataxingmatter

Inequality as a critical cause of the financial crisis?

As readers know, Ataxingmatter is premised on a concept that I have called "democratic egalitarianism." that This is the idea that sustainable democracy requires forces that push economic and other resources towards a more equal distribution rather than permitting resources to accrue more and more to the already powerful and well-resourced amongst us. Redistribution, that is, occurs all the time in every economy. Much of redistribution is redistribution upwards--power accrues power; wealth accrues wealth; and accordingly opportunity accrues opportunity. Taxation is one of the mechanisms that society can use to counter the natural tendency towards redistribution upwards. In a democracy, that mechanism is necessarily and appropriately limited, but it can be servicable on a small scale. Thus, mechanisms such as income rather than consumption taxation, progressive tax rates, taxation of large estates passed to beneficiaires, exemptions and refundable credits sufficient to ensure a sustainable livelihood for those who have (and earn) least, and similar provisions can serve to switch the default direction of redistribution from 'redistribution to the have-mores' to 'redistribution to the have-nots' at least to some degree.

So how does that view of democracy and the need for "democratic egalitarianism" impact upon one's understanding of the causes and appropriate cures for the financial crisis that expanded into a deep recession bordering on depression?

In my own analysis of the financial crisis (to be published by the IMF, and currently available through SSRN here), I focused primarily on the deregulation/privatization/and tax cutting at the core of the reaganomics trickle-down ideology and the way that led to a predatory casino banking mentality that in turn was fed by the ease of speculation made possible by financial product innovations like naked credit default swaps. Similarly, the risk inherent in this type of banking was increased as institutions consolidated, increasing in resources and in interconnections with other financial institutions (including through the use of new-fangled derivatives).

More below the fold...

by Dan Crawford

I haven't the time to check it out, but here is a note and link to a Senate bill on offshoring:

The Senate is scheduled to vote TODAY on the Creating American Jobs and Ending Offshoring Act (S. 3816) to set a time limit for debate and cut off a filibuster.

The bill has three main components:

To encourage businesses to create jobs in the United States, it provides businesses with relief from the employer share of the Social Security payroll tax on wages paid to new U.S. employees performing services in the United States. To be eligible, businesses must certify that the U.S. employee is replacing an employee who had been performing similar duties overseas.

The bill eliminates subsidies U.S. taxpayers provide to firms that move facilities offshore by prohibiting a firm from taking any deduction, loss or credit for amounts paid in connection with reducing or ending the operation of a trade or business in the United States and starting or expanding a similar trade or business overseas.

It also ends the federal tax subsidy that rewards U.S. firms that move their production overseas. Under current law, U.S. companies can defer paying U.S. tax on income earned by their foreign subsidiaries until that income is brought back to the United States. This is known as “deferral.” Deferral has the effect of putting these firms at a competitive advantage over U.S. firms that hire U.S. workers to make products in the United States.

The Federal Reserve, the Bank of England, and the Bank of Japan are considering further quantitative easing. It's an explicit statement, as with the Federal Reserve and the Bank of England, or implied by the fact that the foreign exchange intervention will eventually be sterilized if the policy rule is not changed, as with the Bank of Japan. Why more easing?

In response to this question, BCA Research (article not available) presented a version of the quantity theory of money. They looked at the simple linear relationship between the average rate of money supply growth (M2) and nominal GDP growth (P*Y).

The chart is a reproduction of that in the BCA paper, but with a sample back to 1959 (they went back to the 1920's when M2 was not measured). The relationship illustrates the 5-yr compounded annual growth rate of money (M2) against that of nominal GDP, and has an R2 equal to 50% - okay, but not perfect.

More below the fold...

by Linda Beale
crossposted with Ataxingmatter

Extending the tax cuts for the wealthy--the discussion continues

The New York Times asked me for my views of Robert Samuelson's recent argument in the Washington Post that extending the tax cuts for the wealthy made sense because they would otherwise cut back their spending, tax cuts for them will create jobs (770,000, he claims) and not extending the tax cuts would raise taxes on "small" businesses and thus "discourage hiring and expansion."

The discussion appears in theNew York Times "Room for Debate" forum on the trickle down argument, at Hey Big Spenders: The Trickle-Down Argument, Sept. 27, 2010.

Here at ataxingmatter I'll add some introductory context, which is somewhat harsher on Samuelson and his claim to question "the ritual of sound-bite economics" than the short form posted at the New York Times.

Robert Samuelson claims to sound a voice of reason, but he is merely part of an increasing cacophony of ideological extremism.

He starts with a distorted sound-bite—that “the left sees salvation only in ever-larger government … [that] threatens long-term economic growth through higher taxes, regulations or budget deficits.” I'd say rather that the left questions the right’s theories behind expanding government intrusions on individual rights and bloating government warmongering rather than relying on the likely more successful and certainly less costly art of diplomacy. On the other hand, the right pushes for deregulation no matter the record of negligence and active harm caused by reliance on so-called industry self-regulation or the harm that ensues from inadequate prudential behavior, which we so amply witnessed in the financial meltdown and broader economic crisis of the Great Recession. Similarly, the right is schizophrenic on budget deficits—favoring them to provide tax cuts for mega-corporations and wealthy Americans who can amply manage without them, but bemoaning even uncertain future deficits from programs benefitting ordinary Americans, such as Social Security.

Samuelson then attacks Obama as “subvert[ing] confidence” because he “fights Wall Street bankers, oil companies, multinational firms, health insurers and others.” These titans of commerce began the fight when they retained all productivity growth for their owners and managers at the expense of ordinary Americans. Health insurers benefited by denying coverage, or delaying payment. Multinationals drained the federal fisc through transfer pricing games, tax credit manipulation and other tax shelters. Oil companies polluted waters and fisheries to save a few bucks on safer deep sea drilling and companies continue in their efforts to stymy legislative action to regulate questionable fracturing procedures to extract natural gas from shale. Wall Street bankers profited immensely from speculation in a casino financial system with interconnected and layered risks at the expense of the non-financial heart of the economy.

Then Samuelson spouts the worn arguments from Reaganomics for letting the rich avoid a fair share of the tax burden, even while they garner an ever increasing share of the nation’s wealth. (Continue to the New York piece, Better Ways to Use $700 Billion.)

Robert Waldmann

D. Keith Johnson, a former president of Clayton Holdings, a company that analyzed mortgage pools for the Wall Street firms that sold them, told the [financial crisis inquiry] commission on Thursday that almost half the mortgages Clayton sampled from the beginning of 2006 through June 2007 failed to meet crucial quality benchmarks that banks had promised to investors.

[skip]

“We went to the ratings agencies and said, ‘Wouldn’t this information be great for you to have as you assign tranche levels of risk?’ ” Mr. Johnson testified last week. But none of the agencies took him up on his offer, he said, indicating that it was against their business interests to be too critical of Wall Street.

“If any one of them would have adopted it,” he testified, “they would have lost market share.”


The investment banks who paid Clayton Holdings for the analysis used it to get the mortgages for a low price but didn't share the data with investors. Both the investment banks and the ratings agencies defend themselves noting vague statements about declining underwriting standards in prospectuses and "research and commentary" respectively.

Clearly the vagueness was deliberate "some loans in the pool don't meet the declared standards" is no briefer and less informative than "most loans in the pool don't meet the declared standards." It is almost as clear that no one will pay penalties proportional to the direct harm to investors (let alone the indirect costs of the crisis). Morgan Stanley executives settled out of court with the State of Massachusetts for $102 million -- and laughed all the way back to their bank.

I'm going long pitchforks.

by Mike Kimel

Unemployment Rates, an International Apples to Apples Comparison

Cross posted at the the Presimetrics blog.

One of the things we all know about America is that labor laws are more flexible here than in other developed countries, so we have lower unemployment rates than in other countries with relatively more rigid labor laws. Its one of those facts we are told over and over again, like cutting taxes spurs economic growth or that the folks benefiting the most from our largess in Iraq and Afghanistan, not to say an assortment of tin pot dictators throughout Central Asia, are pro-democracy and pro-America.

A lesser known fact is that unemployment rates are computed differently from country to country. (So is GDP, but that's a topic for another post.) The Bureau of Labor Statistics, the folks who compute the unemployment rates here in the land of the (relatively) free market went through the effort of adjusting the unemployment rates of the US and nine other countries (Canada, Australia, Japan, France, Germany, Italy, Netherlands, Sweden, and the UK) between to allow for an apples to apples comparison. I think the most interesting data - the comparison of overall unemployment rates from 1970 to 2009 - is in table 1-2, which I've imported into Excel and graphed below.


Figure 1.

The chart is a bit busy, but hopefully you could tell what's going on if you look closely. And what I see is this...

More below the fold...

From the LA Times op-ed page comes this piece by an entrepreneur:

I'm a venture capitalist and an entrepreneur. Over the past three decades, I've made both good and bad investments. I've created successful companies and ones that didn't do so well. Overall, I'm proud that my investments have created jobs and led to some interesting innovations. And I've done well financially; I'm one of the fortunate few who are in the top echelon of American earners.

For nearly the last decade, I've paid income taxes at the lowest rates of my professional career. Before that, I paid at higher rates. And if you want the simple, honest truth, from my perspective as an entrepreneur, the fluctuation didn't affect what I did with my money. None of my investments has ever been motivated by the rate at which I would have to pay personal income tax.

As history demonstrates, modest changes in the tax rate for wealthy taxpayers don't make much of a difference if the goal is to build new companies, drive technological development and stimulate new industries. Almost a decade ago, President George W. Bush and his Republican colleagues in Congress pushed through a massive reduction in marginal tax rates, a reduction that benefitted the wealthy far more than other taxpayers.

More below the fold...

Robert Waldmann

Majority Whip James E Clyburn proposed extending the Obama tax cuts. Some assert that he means the Bush tax cuts on income under $250,000. I sure hope he means that Obama tax cuts.

I have been arguing for some time that the Democrats should propose permenent extension of the Bush cuts on income under $250,000 (which implies tax cuts of around $6,000 next year for each rich family) and additional temporary tax cuts which equal for everyone (I like $500 per family). But now I think that it would be better politics to propose making Bush tax cuts on family income under $250,000 permanent and extending the Obama tax cuts one year (that is 400 per individual taxpayer or $800 per family for all but the richest few percent of working families).

Like the Bush tax cuts, the Obama tax cuts are scheduled to expire (the cuts apply to 2009 and 2010 income and were enacted as part of the stimulus bill).

A key advantage of such a debate for the Democrats is that it would force Republicans to admit and journalists to report that there are Obama tax cuts that might be extended. In the last poll only 8% of US adults knew that Obama and the Democrats have cut taxes for most US families.

I think the assumption that Clyburn must have been talking about the Bush tax cuts has something to do with the fact that even political junkies overlook the Obama tax cuts.

Finally, of course, temporary tax cuts for the non rich are a better stimulus than temporary tax cuts for the rich.

Now I wonder does House Majority Whip James E. Clyburn agree with me ? Did he mean what he said. His web page is no help.

The answer is (no surprise) on Talking Points Memo

"As the whip, I have been counting votes for President Barack Obama's tax cut," Clyburn said. "And I like the votes that are there for an extension of President Obama's tax cuts. You may recall that all the American people--95 percent of the American people got a tax cut--in our legislation, that we call the recovery package. And what we're trying to do is extend that."

He quite definitely means the Obama tax cuts when he says "the Obama tax cuts."

We do know from Mike Kimel's Presimetrics that the political message that tax cuts raise revenue is false. In particular, here are two looks at the topic from data from the last decade. It does appear that many want to continue what was done during this last decade...hold on to your wallet!!

David Cay Johnston at Tax.com notes (h/t Mark Thoma):

Just as they did in 2000, the Republicans are running this year on an economic platform of tax cuts, especially making the tax cuts permanent for the richest among us. So how did the tax cuts work out? My analysis of the new data, with all figures in 2008 dollars:

Total income was $2.74 trillion less during the eight Bush years than if incomes had stayed at 2000 levels. ...

Even if we limit the analysis by starting in 2003, when the dividend and capital gains tax cuts began, through the peak year of 2007, the result is still less income than at the 2000 level. Total income was down $951 billion during those four years.
Average incomes fell. Average taxpayer income was down $3,512, or 5.7 percent, in 2008 compared with 2000, President Bush's own benchmark year for his promises of prosperity through tax cuts. ...

Bruce Bartlett at Fiscal Times notes:

Republicans are heavily invested in permanently extending the tax cuts enacted during the George W. Bush administration, all of which expire at the end of this year exactly as the legislation was written in the first place. To hear Republicans, one would think that the Bush tax cuts were the most powerful stimulus to growth ever enacted and only a madman would even think of allowing any of them to expire.

The truth is that there is virtually no evidence in support of the Bush tax cuts as an economic elixir. To the extent that they had any positive effect on growth, it was very, very modest. Their main effect was simply to reduce the government’s revenue, thereby increasing the budget deficit, which all Republicans claim to abhor.
...
Contrary to Ronald Reagan’s 1981 tax cut, which was a simple across-the-board marginal tax rate reduction, the Bush plan was a hodge-podge of tax gimmicks designed more to win the support of various voting blocs than stimulate growth.

Moderator is John Holdren, Science and Technology Advisor to President Barack Obama and Director, White House Office of Science and Technology Policy. Participants are:

• Nadia K. Al Dossary, Chief Executive Officer and Partner, Al Sale Eastern Co. Ltd
• Gary Hattem, President, Deutsche Bank Americas Foundation, Deutsche Bank
• Tri Mumpuni, Executive Director, IBEKA
• Conrad van Oostrom, Chief Executive Officer, OVG Real Estate

Ms. Al Dossary is introduced as one of the few, if not the first, female business leader in Saudi Arabia. (See her comments later for a variant opinion,)

Mr. Holdren opens by speaking of the three levels of technology adoption:

1. Barrier Busting: “overcoming obstacles to the use and diffusion of technologies” that are available today.
2. Incentivizing: changing the economic or the regulatory landscape to make socially- and environmentally-attractive technologies more attractive.
3. Inventing and Improving: R&D demonstration that makes technologies with improved characteristics and lower costs.

Mr. Hattem, whose duty is “to direct capital to people and places that are currently outside of the economic mainstream,” means that his attention focuses on rural areas, and works with a data focus to ensure that the returns are realized.

Ms. Al Dossary, an English Literature major who is very fond of Disneyland, found herself moving the business into new directions, concentrating on “the carousel of progress,” and noting that she has often failed but ends up ahead.

Mr. van Oostrom moved primarily into green building technologies after meeting with Al Gore. Discovered that there was abundant information about how to build green buildings, and moved to that space.  Decided to make buildings “for half the money, in half the time, and completely carbon-neutral” after finding abundant support for the transition within his firm—middle and upper managers enthusiastic about being at the forefront.

Mr. Hattem notes that the emphasis on building development has to be on energy efficiency. (He points out that NYC is relatively energy efficient even now)  Concentrated on the transition in lending and investment practices in NYC and applied the information gained there to developing structures and investments in green technology.  Seeing even residential buildings being developed with expectation of cutting energy demand by 30% or more through technology such as using solar panels to provide hot water.

Ms. Al Dossary emphasizes that it is necessary to link green technology with people’s interests, not the glories of the technology. We are presenting it as reducing electricity and water bills and providing a better environment for your kids. Competition abides: the more competition in the marketplace, in the presentation of the products, improves results.

Mr. Holdren notes that Ms. Mumpuni has been working from the ground up, and her effort has often been more successful than the governments that have been pushing from the top.  Ms. Mumpuni takes a “community-based approach”; what has worked have been to utilize the local resources—especially water—with local people developing and maintaining (and therefore having a sense of ownership of) the microhydro technology.  One of the things she noted is that the microhydro technology leverages the existing environment—maintaining the local forests instead of cutting them down enabled leveraging the existing terrain without having to engage in destruction, creative or not—and therefore makes adaptation easier.  She has been expanding and adopting this practice into the rest of the Asia-Pacific area and Africa.

Ms. Mumpuni re-emphasizes that development and dissemination of Green Technology must be done on a community basis.  This is, she says, essential to the small (ca. 1,000 household) villages that are attempting to move to greener technologies.  She is later asked what effect those community developments have on the larger utility companies in Indonesia.  She noted that the initial reactions—once the communities became prominent enough—was that the large companies had government support to force the communities to buy power they did not need.

However, as a woman, she was able to outwait the system.  Over the next four years, she got the government to start buying power from the communities, and the result over time was that the government and the utility companies (which no longer needed to maintain so many long, “technologically inappropriate” power delivery lines) realized that the “creative destruction” (not her phrase) could be good for everyone. (AB readers note especially: the restriction in this case was first supported by the so-called “private enterprise.”)

Mr. Holdren notes that in many cases the pitch for alternative energy is “you will have to pay more, but the externalities are worth it.”  Conrad van Oostrom notes that “the real economics” (Mr. Holdren’s phrase) works well for new buildings, where you can (for instance) “bring forward” the energy savings over the next ten years. (Businesses understand Present Value.) We are seeing that many new cities in China and India are being built using green technology.

The difficult part is retrofitting buildings, where there have to be multiple negotiations with existing tenants. Even there, though, it is much less difficult to do that when you can give them “a real guarantee” that their future energy costs will be reduced by 30-50%.

Mr. Holdren then asks Gary Hattem to provide a macroeconomic perspective on what retrofitting and green technology development is and will be doing for the job market.  Mr. Hattem notes that they are doing detailed studies of how the ARRA dollars generally and are working to align policies to workforce training for where the jobs actually will be.

Mr. Holdren asks Ms. Al Dossary if she, as “a business leader and a woman,” is an inspiration to other women in Saudi Arabia and the Middle East. Ms. Al Dossary notes that women in Saudi Arabia and the Middle East are “not really interested in [being on the] media that much. There are so many successful stories for women.…I’m just in front of the TV; that’s the difference.”

António Guterres, the UN High Commissioner for Refugees, asks about the “Small is beautiful, big is necessary” conceit, especially the last part. He notes that they had a very successful experience installing solar energy in a refugee camp, but did not see any expansion of solar into other areas; no one overcame the institutional and cultural issues.

Ms.Mumpuni notes that they need to create trust be able to address the needs of the community.  She always tells them in advance that there must be continual community participation, from the planning to the maintenance, or her organization cannot risk its reputation on working with them.  Effect is that the community has customization and ownership, which goes a long way to overcome those issues.

Remy Chevalier of the Environmental Library Fund asks about the lighting of green technology buildings. Mr. van Oostrom notes that, in Western Europe, the issues of heating and cooling have been solved entirely for purposes of a “green building.”  The issue is lighting.  There has been some progress from the use of smart glass technology.  One thing that has helped in their buildings is to automatically have the lights go off at 6:30pm in the commercial buildings, while allowing people to press a button to relight the area. (I’ve worked in buildings that were set up that way in the U.S. as well.)  This simple move cut electricity costs by about 20%.  Mr. Hattem notes in that context that 1.6 billion people in the world do not have access to electricity, and that solar has become “an access point” for both the technology and distribution.

Ms. Mumpuni is asked about costs.  She notes that production via microhydro costs depend on geographic situation: from about $800 per Kw installed to as $4,000 per Kw installed.  But again there have been breakthroughs that are reducing that cost steadily: now producing a “community hydro” that produces ca. 500 Watts –enough energy to power to run five (5) to ten (10) houses—for about $1,500.

Ms. Al Dossary—asked to discuss possible obstacles to expansion into the “new clean energy” in Saudi Arabia—notes that, “Nothing is everlasting, not even water” and urges people to investigate all types of alternative energies, even as the Saudis are.

An audience member asks about the best retrofit idea.  Mr. Hattem notes that the best innovation is not going to come from the technology, but from the users and the culture.  “Technology is there now.”  Mr. van Oostrom says that it is “all about business models” now; the technology is there and ready; have to convince current residents to do things.

Ms. Mumpuni notes that in the developing world, the people need the technology: lights for children to read, to be able to cook (see the Cookstoves Initiative announced on Day 2; for a dissenting view of that initiative—though not the idea that people need energy to cook—see this guest blog at Bill Easterly’s Aid Watchers).  In that context, people use energy as they need it, not because it is accidentally left on.

Mr. Holdren notes that about one-third of what we need to do in the next twenty years is such “low-hanging fruit” that we should be able to realize it.  Putting a full price on carbon emissions would reach the next third.  It is the final third—new innovations,

by reader Ilsm

Consider GAO-100745R take on keeping 4 brigades home stationed in Germany and Italy:

In the Quadrennial Defense Review released in Feb 2010, the US Army decided to reverse the drawdown of Brigade Combat Teams and retain 2 brigades to retain the current order of battle of 4 brigades home stationed in Germany and Italy. This means that 30,000 soldiers will remain stationed in Germany, and that infrastructure improvements are required.

GAO recommends the Army delay infrastructure “investments” in Germany pending determining future forces stationed there in support of new NATO strategy plan due in Nov. 2010. The Warsaw Pact formally dissolved in July 1991. The Red Army began withdrawing in phases from forward deployments in the Warsaw Pact states in 1991. The phasing was required to accommodate Red Army forces returning to already stressed facilities in the Soviet Union. In many cases the Red Army demobilized forces as forward deployments ended.

GAO sees two issues to explore: the questionable “need” for the 4 Brigade Combat Teams and the Army’s determination of support requirements and consolidating stations and facilities to achieve costs savings.

The report includes the following:

“The Army estimates that, depending upon the assumptions used, it will potentially cost between $1 billion and $2 billion more from fiscal years 2012-2021 to keep the two brigades in Europe than it would cost to return them to the United States. DOD is reconsidering retaining the brigades in Europe in part because senior military officials in Europe have said that four brigade combat teams in Europe are needed to meet operational and mission requirements.”

What are these operational and mission requirements and why does the US Army keep 30,000 troops in Germany while the Bundeswehr is reducing its force structure from 250,000 to 163,000 by 2014? What of these missions require the 2 combat ready brigades and what is the need for 4? The Red Army, which is not in a high state of readiness, is on the other side of Poland and Hungary. NATO, includes the countries in between and these countries, should provide the bulk of forces for their independence.

More below the fold...

by Linda Beale
crossposted with Ataxingmatter

Naked Capitalism's Open Thread on Personal Stories of the Great Recession

Yves Smith opened a great comment thread on naked capitalism that anyone interested in the way this Great Recession has hit people across the US (and world) should read. It was triggered by the NBER analysis that the recession is over. Her question opens a thread for readers to comment on the recession from their own personal perspectives.

The comments address a range of perspectives, and consider whether the recession is over, what it has meant for them personnally or for their communities and what they see for the future. There are reports from Lansing (like Detroit, hit by white flight to the suburbs --I'll add that in Detroit, it does gall to see all the suburbanites driving into Detroit to earn their pay at their jobs, then driving out again to spend it in their comfortable, mostly white, middle-class or above suburban communities, so that the dollars created because of Detroit don't get spent to benefit Detroit at all), from Ohio with its loss of manufacturing, from upstate New York, where are more gradual and longer term slowdown meant that housing prices didn't inflate as much and the economy stayed more stable, and from all other the country and abroad.

More below the fold...

Dan here...Lifted with permission from an e-mail from Tim Worstall, an expert in rare earth issues and resources, in response to my sending him the NYT article suggesting China was using rare earth resources as both a trade issue (notice NYT suggestion the pass on processed product versus raw material export)) and political leverage with Japan using their detention of a Chinese fisherman.

by Tim Worstall

In brief, the Chinese have just f**ked themselves over if the NYT take on the issue is accurate.

By showing that they're willing to use RE supplies as a political lever they've just made them political for everyone else.

Thus there will be a political insistence that non-Chinese sources will be found.

It will make Mountain Pass' environmental problems easier to overcome, make funding Mount Lynas easier. It'll make it more likely that I'll get my grant to extract REs from the wastes of alumina production (yes, it does work, we just don't know whether it's economic as yet, thus the grant).

Most importantly perhaps, it'll make the politicians concentrate on what's actually important here. REs aren't rare but the ability to separate them is. There are any number of places around the world where I could scare up a few tens of thousands of tonnes of rare earth ores. Really, almost trivially simple.

However, separating them can take thousands (yes, really, thousands) of iterations of boiling them in hot acid. And when you're done you've still got the thorium almost always associated with them to dispose of. So, politicians will have to accept that if they want windmills and electric cars then they're going to have to allow people to play with boiling acids: and they're going to have to find a repository for all that thorium (for it is radioactive, if only mildly so).

There is, other than the boiling acids thing, a possibility that we'll go off and find another way of separating the rare earths. While there have been academic advances in this subject over the past 30 years there haven't been any practical ones, no attempts to apply them. Why bother when China is doing it all for us? I could even tell you what one of the likely and useful methods to investigate is: but then I'd have to kill you as that's the subject of my next grant application.

Finally, a political point. No, this doesn't show that we must at all times maintain a domestic industry to do this or that for the fear that someone will start to play politics with our supply of this or that. We do have a few years ahead of some fairly serious amounts of money to be spent on getting RE supplies. But we've saved 30 years' worth of subsidy, a far larger sum, by not maintaining a domestic industry until we needed to.

For almost all commodities, metals, foods and so on, there are so many alternative sources we could develop if we needed to that no one can actually, in anything other than the short term, control our access to them.

If Chile started to use tellurium supplies as a political weapon then I might get a little more worried: anything else I just don't see it being possible. And it's certainly not a serious medium or long term threat to anyone other than the Chinese RE producers themselves that China is playing politics with the supply. All they've done is increase the funding available through political channels for the creation of alternative sources of supply.

Sensible advice to China would have been that if you want to start behaving like a monopolist you'd better make sure that you actually are a monopolist first. And they aaren't, not over any reasonable timescale.

Tim

(Dan...slightly edited for readability)

Update: h/t MG for the following links:

Alexis Madrigal provides an update on restarting U.S. production. Of course, it will take $500 million and perhaps as long as 15 years to put all production back in place.
Worried About China's Monopoly on Rare Elements? Restart American Production
Sep 23 2010, 12:25 PM ET
http://www.theatlantic.com/technology/archive/2010/09/worried-about-chinas-monopoly-on-rare-elements-restart-american-production/63444/

In the U.S. House, there is the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2010 or RESTART Act which was introduced in March 2010. No major action...yet.

H.R.4866 - RESTART Act
http://www.opencongress.org/bill/111-h4866/show

Labor cost as a share of business output is now at a post WW - II low. and has fallen about eight percentage points since 2000. This would suggest that the weak demand for labor does not stem from high labor cost. Actually since the third quarter of 2000 while labor cost as a share of total business cost has plunged, private payroll employment has also fallen from 111.2 million to 107.6 million in the second quarter of 2010. Yes, this data contradicts the theory taught in introductory economics.


But, if as this data series implies that weak employment is not because of high labor cost why should further cuts in labor cost via a cut in the payroll tax lead firms to hire more employees? I strongly suspect that those advocating cutting the payroll tax simply remember the theory they learned in their introductory economics class and have never actually looked at the data. If they had they would know that changes in the demand for labor and changes in labor compensation have a strong positive correlation. Of course this directly contradicts the theory they learned in introductory economics that labor demand is a downward sloping function of labor compensation. But remember, that theory is simply a massive over-simplification used to explain basic economic concepts to some teenagers. The theory assumes that all other things are constant and in reality that never really happens. In reality, the demand for labor is a function of many things of which labor compensation is only one factor and generally a relatively minor factor at that. In the real world the demand curve for labor is not a downward sloping function of compensation. Remember, when Alfred Marshall the great economist who did more to develop graphical analysis than anyone else was asked why he developed this approach his answer was,"so the gentlemen in the back row can understand what I'm talking about".

Labor demand is a derived demand. Firms hire labor because they think they can profitably sell the goods and/or services the labor produces not because they derive some utility from hiring labor. Consequently, the dominant factor in the demand for labor is the firms perception of the demand for that firms output. Even if the cost of labor falls, firms still will not hire more labor to produce more output if the firms does not expect to sell the expanded output. Consequently, those claiming that cutting labor cost will induce firms to hire more labor are just spouting some ideological fantasy that has no basis in reality or even in advanced economic theory.

So what drives the demand for labor. If I want to forecast employment I make it a simple estimate of GDP less productivity. In this estimate labor cost does not play a enter the equation at all. In my experience labor costs is only important in the labor supply equation where higher labor payments induce individuals to enter the labor force.


In response to questions in the comments that if labor's share fell, what rose, I've added this chart.
PS. The last time I published this chart it was of an index number that was derived by dividing one index number by another. So anyone could download the data from the BLS and reproduce it. But this chart is of the actual raw data that shows labor cost as an actual share of business output. BLS does not publish this raw data. Haver Analytics made special arrangements to get the raw data from the BLS so they could generate this data series. Consequently you will not be able to reproduce this data series from publicly available data.

More below the fold...

The panel is preceded by this video.

Dr. Sanjay Gupta (Chief Medical Correspondent, CNN) leads the panel, featuring:

• Charles-Patrick Almazor, Director, Public Sector Partnership, Artibonite Department, Partners In Health
• Lance Armstrong, Founder and Chairman, LIVESTRONG
• Paul Farmer, Co-Founder, Partners In Health; Chair of the Department of Global Health and Social Medicine, Harvard Medical School; Chief of the Division of Global Health Equity, Brigham and Women’s Hospital; UN Deputy Special Envoy for Haiti
• Felicia Knaul, Director, Harvard Global Equity Initiative; Founder, Cáncer de mama: Tómatelo a Pecho
• HRH Princess Dina Mired, Director General, King Hussein Cancer Foundation

Lant Pritchett’s old point notwithstanding, the reality has become that the “developing world” now originates 56% of the cases of cancer in the world, up from ca. 14% a decade ago.  (Actually, this somewhat presents evidence for Mr. Pritchett’s point about trade-offs; the developing world is now able to live long enough and well enough that death from cancer has become important.)

Dr. Gupta starts by celebrating that some cancers that were not able to be treated anywhere in the world are now treatable everywhere in the world.  But the developing world cannot afford treatments for some types of cancer to the level needed. Dr. Gupta is a Board member of Livestrong, and speaks about the way the organization—especially through the discipleship of Lance Armstrong—has changed the way many people think about cancer.

HRH Princess Mired notes that much of the progress in Jordan occurred after King Hussein himself went very public with his battle with cancer, putting a public face on the disease.  HRH Mired notes that since then, the major cancer treatment center—the King Hussein Cancer Center—now includes the word “cancer” in its name and provides access to consultations, information, and treatment for people who live near the center and those who can communicate with it through a regional center.

She notes that there are areas in which they would like to make progress in Jordan, such as establishing Cord Blood Banks, and other things that people in the developed world “take for granted.”

Dr. Gupta asks Dr. Paul Farmer to speak specifically about Haiti.  Dr. Farmer notes that there is one (1) oncologist in Haiti, and none in Rwanda or Burundi.  It is difficult to use preventive measures once one already has leukemia—but need to make that much more of an effort in prevention and early detection.  Dr. Farmer notes that cervical cancer is a communicable disease;  there is a “cervical cancer belt” in the developing world.  There is a vaccine, there are preventive care activities, and there are many other possibilities for reducing the rate of death from cervical cancer—it is delivery mechanisms and education that need to be provided. (Dr. Farmer notes, for instance, that Partners in Health teamed with Gardasil to provide vaccinations for young girls and women in Haiti.)

Next up is Dr. Charles-Patrick Almazor, who reaffirms that there is significant progress that has been made, and notes some of the “on the ground” successes in post-earthquake Haiti.

Felicia Knaul and Lance Armstrong join the group.

Dr.Gupta notes that Lance Armstrong came to CGI and announced that he would be racing again, primarily to extend the reach and successes of Livestrong.  Armstrong notes that he wasn’t worried so much about the idea of winning another Tour de France or any “knock on [his] legacy” as he was in extending the work of the Livestrong Foundation.  And he believes that the effort has paid off well in those terms.

Ms. Knaul (who has a Ph.D., and therefore might be more properly referred to as Dr. Knaul), whose original commitment was “enhancing and empowering women health care workers,” notes that breast cancer is now the #2 killer of young (ca. 30-54) women in Mexico and the developing world. Ms. Knaul is a breast cancer survivor herself, and notes that what is worse than “having to take it in the vein is not being able to because you don’t have enough money to be able to pay for it.”  (Note: Ms. Knaul’s last round of treatment was last Wednesday; technically, she is not yet “a cancer survivor.”) She moves on to speak of “other kinds of failures,” such as the women who do not get mammograms because they expect that their husband will leave them if they are diagnosed with breast cancer. In that context, the Commitment made yesterday to teaching men is most encouraging for her.

Ms. Knaul also notes that she was in the audience when Lance Armstrong announced his Commitment in 2008, and that she herself was inspired by his actions to expand her own efforts.

Dr. Gupta highlights a few people in the audience who are also working to reduce cancer, including John Noseworthy of the Mayo Clinic, who “established the Healthcare Alliance for Tobacco Dependence Treatment” to work to support realization of the WHO Framework Convention on Tobacco Control; Dr. Lawrence Shulman of Dana-Farber and Harvard, which is working in several of the developing areas; HRH Princess Ghida Talal, who is leading an effort to establish a “personalized medical center” at the King Hussein Medical Center; and Letha Sanderson of Uganda, the founder of Wrap Up Africa.

Dr. Gupta asks Dr. John Seffrin of the ACS to talk about the American Cancer Society’s efforts to reduce tobacco use in developing countries. Dr. Seffrin notes that cancer is becoming the #1 cause of death in the world “for the first time in all of history.”  Livestrong and the ACS published a study about a month ago, noting that the cost to the world is about $895 Billion per year, “not including health-care costs associated with the treatment of cancer.”  The economic burden of the top fifteen diseases shows clearly that cancer is far and away the worst.  And the spread of smoking tobacco has clearly exacerbated this in the developing world.  Killed 100 million people in the last century; will kill 1,000,000,000 in this century if there is no intervention.

The first question from the floor is about possibility of using of local herbs and natural

Fran Drescher, a CGI regular whose own commitment in this area can be found at the link,  follows, asking how we educate and motivate women to go from “My husband will leave me if I have cancer” to “What will happen to my family if I die of cancer?”  Princess Mired notes that taboos don’t come from nowhere; they come from ignorance. People start from the expectation that cancer is contagious, that prevention and early detection are not possible.  Need to have the information disseminated, and especially to work on the men to change both the social behavior.  In four years, they have reduced the rate of people in Stage 3 and Stage 4 cancer from 70% to 35% through an”early detection” program that was started after people started to see survivors. Need to show survivors.

Ms. Knaul notes that the mortality rate in Mexico from cervical cancer has gone from 16% to 8% in the past ten years—primarily because of earlier detection and treatment, but also because of improvements in the treatment itself.  She notes that this especially can be applied in the Developed World, where opportunities for research and

Jonathan Quick of Management Sciences for Health noted the parallel between treating cancer and treating AIDS in the developing world. In the case of AIDS, they got through the four “barriers”: (1) the mental barrier (“it can’t be done”), (2) the cost barrier (treatment costs reduced from $12,000 to $3,200), (3) the money barrier (addressed by a global fund), and (4) the “practicality barrier.”  Where are we with cancer?  Dr. Farmer notes that those four barriers have been overcome in many cities, but that rural areas still need all four barriers to be overcome.  “People who say “there is no market” are trying to stop a conversation, not start one.”  When you don’t know any survivors in your neighborhood, it’s more difficult to accept that one can survive.  (The examples of King Hussein and, especially, Lance Armstrong seem especially relevant.)

Dr. Gupta asks Lance Armstrong about Livestrong’s decision to “go global.”  Armstrong notes that they were responding to demand: discovered that the idea of Livestrong resonated in places such as Mexico and India.  It is left to Mr. Armstrong to note that cancer is such a diverse disease—“we talk about cancer—boom, six letters—but it’s different than that.”  It’s correct to be honest about it:we’re going to have to knock of this disease on type at a time.  We know the diseases we can cure today (testicular cancer, some lymphomas, cervical cancer and breast cancer with early detection).  “It’s not a simple three-page document, but it is doable.”

With straightforward chemotherapy approaches, have been able to cure kids with various sarcomas.  We do have to scale up the program.

Former HHS Secretary Donna Shalala asks about geography: having to travel reduces ability to treat rural cancer patients..  She notes that more than fifteen years ago, Egypt set up regional cancer centers and flew oncologists to those areas once a month—a great political and popular success. (There were also pay incentives for the oncologists, to cover the travel requirement.)

Ms. Knaul notes that. when you add the technologies available, you don’t necessarily have to move the patient or the doctors so much; St. Jude’s is able to offer pediatric cancer care in Jordan while the oncologist remains in Memphis.  Princess Mired re-emphasizes this, nothing that the Jordanian doctors have weekly “training sessions” with the doctors in Memphis.

Have to understand that cancer has potentially become the most curable of all diseases; could be saving 10,000 lives a day if could apply the advances in the United States alone to the rest of the world.

Lance Armstrong again takes it down to a human level:  if we teach a kid never to pick up a cigarette, we just “cured” cancer.  Need to re-emphasize sharing: information, resources, programs.

Ms. Knaul notes that there are some countries, such as Mexico, that are considering financing reform so that people have access to cancer treatment—a move that will strengthen the health care system itself.

Dr. Farmer talks about competition, competing for scarce resources.  Only a partnership will work.  Resources are less limited than at any other time in human history.  Cannot make the same mistake—contrasting prevention with care—that was made in the past.  One of the main causes of death is that people become destitute providing care.  Need for that not to happen.

Dr. Almazor presents optimism; Princess Mired notes that we cannot change our future without change.  “Cancer does not even appear as a line item on any Global Health Agenda.” All of the successes and survivors—AIDS, TB, etc.—have the specter of having to face cancer and heart disease.  She closes by noting that we need to measure the cost of cancer not in human deaths, but prefer to see hospitals and treatment centers that remedy the problem.

Robert Waldmann

Republican candidate for Senator from Kentucky Rand Paul said
"In 1923, when they destroyed the currency, they elected Hitler. "

He's off by a decade. Hitler was elected in 1933 not 1923. This is not just a slip or a typo. The German hyper-inflation ended in 1923. At the time Hitler was in jail having taken over a beer hall.

Paul wouldn't have been twice as far off if he had written "In 1914 when they invaded a country that hadn't attacked them, they elected Hitler."

German democracy ended during the depression when sensible moderates decided that there was no fiscally sound way to fight unemployment.

This man could be a US Senator.

via Steve Benen

The original schedule for this program was Riz Khan of Al Jazeera English moderating

• Laura Bush, Former First Lady of the United States
• Jack Ma, Chairman and Chief Executive Officer, Alibaba Group
• Shakira Mebarak, Founder, The Barefoot Foundation
• Rajendra Pawar, Founder and Chairman, NIIT Group

but Shakira was unable to attend, and was replaced by

• Jenna Bush Hager, and
• Barbara Bush

Mr.Khan opens with a joke about a policeman who pulls a woman over who is driving very slowly, having confused the Route sign (10) with the speed limit.  “Why do your passengers look so scared?”  “Oh, we just came off Route 120.”

Mrs. Bush starts by talking about how great things are for women “since the fall of the Taliban.”  Mentions one who has opened about forty schools in Afghanistan in cooperation with the U.S.-Afghan Women’s Council.

Jenna Hager speaks of girls who “escaped early marriage.” She’s very enthusiastic, but appears to have problems dealing with being on-camera with a microphone.  (What she lacks in presence she tries to make up in enthusiasm.)  She speaks about the need for education to address the problem, referring to her experience as a teacher. (My impression from her presentation was that she is currently teaching; Wikipedia’s mileage appears to vary; anyone know?)

Barbara Bush—who does not have her younger sister’s problem—notes that she worked at a children’s hospital in South Africa, and that one of her jobs was basically “staying with the babies” so that the mothers—who otherwise would have lost their jobs—could go back to work.  The story in itself tells us about the impediments to harnessing human potential, but those who have attended for the past two days know these tales well enough, and probably would have preferred hearing from someone at the Barefoot Foundation who could get into more specifics.

Jack Ma of the Alibaba Group, a for-profit enabler of small businesses, declares that we are entering “the century of the small,” and that small businesses create not just jobs but hopes.  (Given the relative success of “small businesses,” he may have that backwards.)  Hope is his theme; sees good things occurring when now that the worldwide Solvency Crisis is over.

Rajendra Pawar starts with a discussion of how Bhutan (“the world’s youngest democracy”; two years) has for the past thirty-plus years concentrated on GNH (Gross National Happiness), not GDP. This includes constitutionally limiting the destruction of forest area in the country, educating the leadership in creating opportunities, and expanding connectivity and computing (leveraging solar energy) to make the society more horizontal.

A question comes in regarding the opportunities in alternative energy. (Also discussed yesterday by Governor Jennifer Granholm.)  Jack Ma notes that people recognize the issue and the benefits of alternate-energy: he has polled workers in coal-intensive China and never yet found a person who does not know someone who has or had cancer. “This has become a skills issue” in much of the world. (The U.S. currently exports slightly over $1 billion worth of solar panels each year;; China produced almost twice as much revenue from solar panels two years previously.)

Khan asks Laura Bush (“I’m asking you, not your daughters”) whether there is a generational complaint.  Ms. Bush notes that her daughters and their friends are all enthusiastic about working with and helping the world.

Khan ends, as he began, with a joke.  I will spare people it, since it wasn’t even as funny as the one with which he opened.

by Bruce Webb

Are the Special Treasuries that make up the Social Security Trust Funds real? Absolutely, quite apart from legal and historical arguments the DI Trust Fund will be cashing in some $23 billion of them in 2010 along with taking some $9 billion [edit] in interest, their reality is affirmed every time a SS Disability check gets credited to a beneficiaries account each month. QED.

But does that mean that all of those Special Treasuries in the combined Trust Funds will get paid back? Or need to be paid back? Well no, if we fix Social Security in precisely the right way, those Trust Funds get converted into a discounted interest only loan, and the principal simply rolls over forever. To understand why this should be we can start with the following from Steve Goss, the Chief Actuary of Social Security in his recent article for the Social Security Bulletin The Future Financial Status of the Social Security Program

However, the occurrence of a negative cash flow, when tax revenue alone is insufficient to pay full scheduled benefits, does not necessarily mean that the trust funds are moving toward exhaustion. In fact, in a perfectly pay-as-you-go (PAYGO) financing approach, with the assets in the trust fund maintained consistently at the level of a "contingency reserve" targeted at one year's cost for the program, the program might well be in a position of having negative cash flow on a permanent basis. This would occur when the interest rate on the trust fund assets is greater than the rate of growth in program cost. In this case, interest on the trust fund assets would be more than enough to grow the assets as fast as program cost, leaving some of the interest available to augment current tax revenue to meet current cost. Under the trustees' current intermediate assumptions, the long-term average real interest rate is assumed at 2.9 percent, and real growth of OASDI program cost (growth in excess of price inflation) is projected to average about 1.6 percent from 2030 to 2080. Thus, if program modifications are made to maintain a consistent level of trust fund assets in the future, interest on those assets would generally augment current tax income in the payment of scheduled benefits.

Emphasis mine. I'll unpack this a little under the fold.

More below the fold...

by Linda Beale
crossposted with Ataxingmatter

More on the Estate Tax Debate--Holtz-Eakin and the wealthy families fighting for no taxation on wealth transfers

So far, at least four of the wealthiest few Americans have died in 2010, when there is no estate tax under the "reduce, repeal and spring back" law enacted as part of the Bush series of tax cut bills with gimmicking sunset provisions. They are George Steinbrenner (worth $1.5 billion), Janet Morse Cargill (worth $1.6 billion), Dan Duncan (worth $9.8 billion), and Walter Shorenstein (worth $1.1 billion). The temporary elimination of the estate tax in 2010 cost the government roughly $6.5 billion in estate tax revenues in connection with just these four deaths. That a significant amount, especially when one considers that much of the value in these estates is likely to be financial assets on which the decedents paid very little in taxes during their lifetimes and on which any tax that was due was likely at a preferential capital gains rate. See TJ Wall, Steinbrenner Fourth Billionaire in 2010 to Escape Taxes, if Not Death, MichiganEstatePlanningLawBlog, July 21, 2010.

Bernie Sanders (independent senator from Vermont) introduced a bill this year --the Responsible Estate Tax Act (S. 3533) that would return the estate tax under Code section 2001 to the 2009 exemption level and add a progressive rate structure. Id. Accordingly, there would be an exclusion amount of $3.5 million and the tax would be determined by applying a 45 percent rate for values of estates from $3.5 million up to $10 million, 50% for amounts above that up to $50 million, and 55% for amounts over $50 billion, with a 10% surtax on estates of more than $500 million (i.e., amounts in excess of $500 million would be taxed at 65%). The bill would be retroactive to the beginning of 2010. That is probably a reasonable compromise, though I have argued elsewhere for a lower exemption level, since most estates would be excluded with a $2 million exemption amount.

More below the fold...

by Mike Kimel

Predicting the Start and End of the Great Recession, and Trying to Sell Books
Cross posted at the Presimetrics Blog.

No doubt you've heard that the NBER put the endpoint to the last recession in June of 2009. I wonder if anyone forecasted that. Oh yeah, back in December of 2008 I said I expected the recession to end in the first half of '09. (Yes, I know, the post was put up in early January, but I sent it in a few days before the end of the year, as is plainly evident if you read the comments to that post.) I think I made that call only a few weeks after Larry Kudlow stopped talking about the Goldilocks Economy and started acknowledging there was trouble. And incidentally, I also noted in a number of posts that the recovery would be unimpressive when it did arrive.

In the spirit of tooting my horn a bit (my wife tells me I don't do it nearly enough), I would also note that I noted that the economy was in recession as early as March of '08, and that the recession was a bit different from most earlier recessions. In fact, at about the same time, I also prebutted some of the arguments that conservatives and Austrians might make as they try to take credit for predicting the mess themselves.

Now, granted, I misunderestimated the inanity of the previous and the current administrations' responses to the mess, and thus the severity of the recession, but I also recognized that recession really was not going to be the end of the world and that it would take mismanagement for it to end up being considered truly awful. For instance, the 73 - 75 recession, could have been alleviated with decent leadership, but it was going to be a deep recession no matter what. By contrast, this latest downturn could have been like early 90s fall-out from the S&L crisis except for the stupendously poor decisions made by those running the show. Yeah, I know, plenty of people who didn't see it coming and then didn't see it ending don't agree with this last paragraph... so I'm going to avoid some grief by not telling you (right at this moment, anyhow) where the economy is going from here, and when.

Other recession-related predictions I got right... I think spotting the end game for the bail-out early on counts for something. And while its not recession-related, I did note something a few times that has some bearing now, which is that sooner or later even the conservatives who couldn't stop singing Karzai's praises would conclude he was a corrupt kleptocrat.

So... since I've got a book to sell, I have to ask - where's my media exposure? Why am I not on tv? Doesn't getting it righter than the average bear count for something? I can be loud and obnoxious if I have to. And the book is quite good if I say so myself,, and pretty original to boot.

The NYT reports that

Dr. Lawrence H. Summers, Director of the National Economic Council and Assistant to the President for Economic Policy, announced his plans to return to his position as University Professor at Harvard University at the end of the year.

Dr. Summers is the chief White House advisor to the President on the development and implementation of economic policy. He also leads the President’s daily economic briefing.

Tina Brown introduces:

• Gary Cohen, Executive Vice President, BD
• Geeta Rao Gupta, Senior Fellow, Bill & Melinda Gates Foundation
• Richard C. Holbrooke , Special Representative for Afghanistan and Pakistan, U.S. Department of State “and, of course”
• Ashley Judd, Board Member, Population Services International

Starts with Geeta Rao Gupta, who declares the primary issue to be that hundreds of thousands of women are dying because of entirely preventable causes, such as 350,000 worldwide due to complications from pregnancy.  (Fifty million [50,000,000] child—under 18—brides worldwide.)

Tina takes the microphone away to talk about Ashley Judd’s discoveries in the Congo. (If this organization wants to concentrate on policy, not celebrity, Tina Brown should not be moderating.)  Judd, though, rises to the bait, nothing that Secretary of State HRC’s visit was not productive, and the people on the ground in the Congo did not believe that they were heard.  Only 6% of DRC has family planning ability; those who want to use family planning solutions but do not have access to such will have hundreds of thousands.  “100% of the women Judd met had been gang-raped more than once.”  Tells story of woman whose husband said “you have been raped too much” and left.

The word “fistula” was used extensively during Ms. Judd’s presentation, including a couple of times about “fistula repair operations.”

Gary Cohen notes that he was pulled into the issue of sexual violence against girls because of his work in fighting HIV/AIDS.  Found that 1/3 of girls in Swaziland who had experienced sexual violence, and that 29% of those became pregnant—effect is that about 10% of the female population is effectively eliminated from being part of the productive workforce, even if they are not part of the ca. 2% of the total female population that will die in childbirth.

Now working through other organizations, including a partnership with PEPFAR (about which Mike Kimel is more enthusiastic than I am, but which abides in either case) to try to empower women to facilitate AIDS/HIV relief.

Richard Holbrooke notes that he has never seen a State Department initiative to educate the men in leadership positions about the dangers of sexual violence against women.  They are trying to change that, but facing political issues. (We need to work with the [corrupt, violent] police in Afghanistan, but they have until recently been the largest part of the problem.)

Discusses the flood in Pakistan; shows a map of the affected area superimposed over U.S. and Canada—very little not covered.  International community is not going to be able to raise enough;Pakistani government is going to have to increase its revenues just to be able to pay them out.

The biggest problems will be now: 4-5,000 schools, hundreds of hospitals, countless homes have been washed away.  People will go back and they—especially the kids—will start drinking the stagnant water, resulting in dysentery at best. We are in a massive new round of fundraising to address the flood.  “Not one child I talked to knew how old they were.”  Information must be disseminated by radio—need portable radios.  Water purification: working with P&G, but do not have 10-gallon cans that can be used with P&G’s PUR product.  Need to teach people to use part of a packet.

Ms. Judd notes that the water issue is key to PSI; do monitoring and real-time data analysis and “barefoot entrepreneurs” (people on the ground) to emphasize the issues, and deal with “the chlorine taste” (if the mix is not ideal) as “the taste of health.”  Work toward a positive result, not the “if you drink this water, you will die” so much as developing social capital. (Dysentery is the #2 killer of under-5 children in the developing world.)

Geeta Rao Gupta notes that programs have been developed on the social level—cites several projects that have emphasized male education activities.  If you can provide services where women get a return on their labor, the household income is increased.  Needs to be cast as initiatives to improve the welfare of the households.

Mr. Cohen notes that they categorize “sexual violence against girls” as a human rights issue. Notes that Swaziland is the most leading respondent to their initiative, which also has cooperation from UNICEF.  Transfer to community level, which directly deal with organizations that educate men and boys about the opportunities when women have the opportunity to earn as well.

There is more data, and it is getting more attention, so it is easier to talk about the problem. Mr. Cohen notes that the Soviet rape in Berlin in 1945 (“a drunken orgy of revenge”) while Bosnia was a “calculated use of rape as an instrument of war.”  (Maybe John Barnes’s painful phrase Serbing should be used more generally.) Clearly becoming more systematic.  Geeta Rao Gupta notes that she works with efforts such as GEMS to provide information and educational opportunity to people.

Tina Brown finally proves her value by noting that need to make these points through stories and narratives.  That gets the young people involved in an issue.

Ashley Judd lists several organizations with which to work, such as Women 4 Women, Girl Up, Girl Effect (which, as Tom Watson notes, released a marvelous PSA today), and The Enough Project (which is directly related because a substantial amount of the  most egregious sexual violence against women occurs in “conflict mineral” countries).

She also notes that there is a female condom available worldwide (though not so much in the U.S.), which they promote through dialog with hairdressers (who then speak with their clients).

Best route to a good result is to provide access to contraception, planning, and information.  Will not help to “wag the finger from the top”; need to enable control with the people who want to have control over—freedom for—their own bodies.

Mr. Cohen is optimistic, partially because we have seen much progress made on this issue over the past few years at CGI.  Tina Brown notes that we’re probably not at a “tipping point” yet, but certainly getting closer to achieving awareness.

As Nick Kristof twitted earlier today (again, via Tom Watson, translated from Twitter into English), “Clinton Global Initiative this year seems very focused on investing in girls as cost-effective strategy to fight poverty.”  As strategies go, this one is—or, more accurately would be, in a world where economic models worked well—Most Likely to Succeed.