Great benefits to America from having MORE immigrants – 5 key points from the Dallas Fed

April 19, 2014

Did you know?

Interesting fact sheet from the Dallas Branch of the Federal Reserve Bank system.

All material below this point is directly quoted from the .pdf fact sheet; it is here in text format to aid in indexing, and quoting.

Immigration Get the Facts header

An Economic Overview

As U.S. immigration reform moves forward in 2013, a variety of facts and figures continue to be presented around immigrants and their current and potential contributions to the U.S. economy. This fact sheet—the first in our series on immigrants and the economy—provides key data points on why immigrants are vital to the U.S. economy and why comprehensive immigration reform is necessary for future U.S. competitiveness.

Five Reasons
Why the U.S. Economy Needs Immigrants
FACTS

1.  Immigrants are more likely to be entrepreneurial and to start new businesses, which, in turn, create jobs for U.S.-born workers.

  • Immigrants started 28 percent of all new U.S. businesses in 2011, employing 1 in 10 U.S. workers. 1
  • Immigrants represent 18 percent of small business owners in the U.S.—exceeding their share of the overall population (13 percent)—and are more likely than those born in the U.S. to start a small business. Immigrant-owned small businesses employed an estimated 4.7 million people and generated an estimated $776 billion in receipts in 2007. More small business owners are from Mexico than any other country.2
  • Over the past two decades, immigrants made up 30 percent of the growth in small business creation.3
  • Immigrants founded 18 percent of 2010 Fortune 500 companies, creating jobs for 3.6 million people. When including immigrants and their children, the number of Fortune 500 companies with immigrant roots jumps to 40 percent, employing more than 10 million people.4

2.  Both high-skilled and low-skilled immigrant labor creates additional jobs across the U.S. economy.  Immigration FRSB Population box

  • With immigration reform, newly authorized immigrant workers would produce enough new consumer spending to support 750,000 to 900,000 jobs.5
  • Every additional foreign-born student who graduates in science, technology, engineering, or mathematics (STEM) and remains in the U.S. creates an estimated 2.62 American jobs.
  • Every low-skilled, non-agricultural, temporary worker who comes to the U.S. to fill a job that may otherwise be left open creates an average of 4.64 U.S. jobs. 6  These low-skilled jobs are the necessary backbone to support higher-skilled positions.
  • Passage of the DREAM Act would add $329 billion to the U.S. economy and create 1.4 million new jobs by 2030.7

3.  Immigrants boost tax revenue, enlarge the taxpayer base and help to keep down the price of goods.  Immigration FRSB DYK box1

  • On average, immigrants, including the undocumented, pay nearly $1,800 more in taxes than they receive in benefits.8
  • Households headed by undocumented immigrants paid $11.2 billion in state and local taxes in 2010. That included $1.2 billion in personal income taxes, $1.6 billion in property taxes and $8.4 billion in sales taxes.9
  • Immigrants lower the price of products used by highly educated consumers by 0.4 percent of GDP and for less-educated consumers by 0.3 percent.10

4.  As baby boomers retire, immigrants will increasingly be critical for continued economic growth and for ensuring a steady flow of new workers.  Immigration FRSB DYK box2

  • Without immigrants, the U.S. will not have enough new workers to support retirees. Seventy years ago, there were 150 workers for every 20 seniors; 10 years ago, there were 100 workers per 20 seniors.  By 2050, there will be only 56 workers for every 20 seniors. The U.S. needs new taxpayers to help fund Social Security and Medicare and new workers to fill retirees’ positions and provide health care services.11
  • Current levels of immigration will temper the aging of the U.S. population over the next two decades, slowing the increase in the old-age dependency ratio by more than one-quarter.12
  • Nearly 65 percent of Latino immigrants in California who stayed more than 30 years are homeowners, making them a critical pool to buy homes as baby boomers downsize.13

5.  The majority of immigrants in the U.S. today are from Latin America, representing a huge potential economic opportunity due to the region’s burgeoning economic standing.

  • Immigrants are a vital link with their home countries and offer new prospects for the U.S. to capitalize on Latin America’s economic expansion, which saw 3 percent growth in 2012—double the 1.5 percent growth in the United States. In addition, 11 of the 20 U.S. free-trade agreements in force are with Latin American countries. Immigrant-owned small businesses have a unique opportunity to connect to the global marketplace.
  • Over 7 percent of immigrant firms export their goods and services, whereas just over 4 percent of non-immigrant firms export.14
  • Mexico boasts the second largest economy in Latin America and grew at a rate of 4.0 percent in 2012, with a projected 3.5 percent growth in 2013.15  With 29 percent of all immigrants and 58 percent of undocumented immigrants coming from Mexico,16 this demographic represents a human gateway to one of Latin America’s fastest-growing economies.

This fact sheet is a product of the AS/COA Hispanic Integration and Immigration Initiative, which advances the integration of immigrants and promotes positive dialogue around the economic contributions of immigrants and Latinos overall across the United States. It was produced by Jason Marczak, AS/COA Director of Policy, in collaboration with Leani García. For more information, visit AS/COA Online at:  http://www.as-coa.org.  For media inquiries or to speak with an expert on this topic, please contact Adriana LaRotta in our communications office at:   alarotta@as-coa.org

Population:  The 40 million immigrants in the U.S. today—of which 29 percent are from Mexico— represent 13 percent of the U.S. population.

In addition, the 53 million Latinos in the U.S. account for about 17 percent of the population and 10 percent of voters in the 2012 election.

However, the demographics of new immigrants have changed in recent years, with Asians having overtaken Latinos as the largest group of new immigrants.

Did you know?
Google, Procter & Gamble, Kraft, Colgate Palmolive, Pfizer, and eBay are among companies with immigrant founders.

Did you know?
Hispanic immigrants help revitalize communities across the U.S., including Ottumwa, Iowa, a 30,000-person city southeast of Des Moines, which, according to The Wall Street Journal, saw its taxable property value double in the last 10 years after making a concerted push to bring in new immigrants who opened up shops to replace shuttered storefronts.

Endnotes

1.  Robert H. Fairlie, “Open for Business: How Immigrants are Driving Small Business Creation in the United States,” Partnership for a New American Economy, August 2011. http://www.renewoureconomy.org/sites/all/themes/pnae/openforbusiness.pdf

2.  Fiscal Policy Institute, “Immigrant Small Business Owners: A Significant and Growing Part of the Economy,” June 2012. http://fiscalpolicy.org/immigrant-small-business-owners-FPI-20120614.pdf

3.  Ibid.

4.  Partnership for a New American Economy, “The ‘New American’ Fortune 500,” June 2011.  http://www.renewoureconomy.org/sites/all/themes/pnae/img/new-american-fortune-500-june-2011.pdf

5.  Raúl Hinojosa-Ojeda, “Raising the Floor for American Workers: The Economic Benefits of Comprehensive Immigration Reform,” Center for American Progress, January 2010.

6.  Madeline Zavodny, “Immigration and American Jobs,” American Enterprise Institute for Public Policy Research and the Partnership for a New American Economy, December 2011. http://www.renewoureconomy.org/sites/all/themes/pnae/img/NAE_Im-AmerJobs.pdf

7.  Juan Carlos Guzmán and Raúl C. Jara, “The Economic Benefits of Passing the Dream Act,” Center for American Progress and Partnership for a New American Economy, October 2012.  http://www.americanprogress.org/issues/immigration/report/2012/09/30/39567/the-economic-benefits-of-passing-the-dream-act/

8.  James P. Smith & Barry Edmonston, eds., The New Americans: Economic, Demographic, and Fiscal Effects of Immigration (Washington, DC: National Research Council, National Academy of Sciences Press, 1997), 220, 353.

9.  Immigration Policy Center, “Unauthorized Immigrants Pay Taxes, Too,” April 2011.  http://www.immigrationpolicy.org/just-facts/unauthorized-immigrants-pay-taxes-too

10.  Patricia Cortes, “The Effect of Low-Skilled Immigration on US Prices: Evidence from CPI Data,” 381-422.

11.  Immigration Policy Center, “The Future of a Generation: How New Americans Will Help Suppport Retiring Baby Boomers,” February 2012. http://www.immigrationpolicy.org/just-facts/future-generation-how-new-americans-will-help-support-retiring-baby-boomers

12.  Ibid.

13.  Dowell Myers, Immigrants and Boomers: Forging a New Social Contract for America (New York: Russell Sage Foundation, 2007).

14.  Robert H. Fairlie, “Immigrant Entrepreneurs and Small Business Owners, and their Access to Financial Capital,” Small Business Administration, May 2012.

15.  The World Bank, “Mexico Overview,” 2013. http://www.worldbank.org/en/country/mexico/overview

16.  Pew Hispanic Center, “A Nation of Immigrants: A Portrait of the 40 Million, Including 11 Million Unauthorized,” January 2013. http://www.pewhispanic.org/files/2013/01/statistical_portrait_final_jan_29.pdf

More: 


Historian David McCullough: What is the value of education?

April 17, 2014

Branch banks of the Federal Reserve work hard to provide economic education; alas, in the era of state standards requiring “teach to the test,” a lot of this stuff goes unused.

What is the value of education?  The Dallas Branch of the Fed had historian David McCullough in for consultations; they asked him on video, and here’s his response.

“We must be an educated people. We cannot be a productive, original, innovative society if we aren’t educated.”

For more information, visit the Dallas Fed’s website.

6,645


Dramatic, graphic difference between Labor and Capital

March 28, 2014

How do Labor and Capital differ?  They differ in two key ways:  First, in the burden they carry; and second, in the way they carry that burden.

Illustrations from a book I would definitely like:  Monash University Publishing, Drawing the Line, Chapter 6. ‘All the World Over’ The Transnational World of Australian Radical and Labour Cartoonists:

Figure 6.5: Anon, ‘The Difference between Labor and Capital’, Life, c. 1887.  Courtesy Huntingdon Library, California.  From Monash University Publishing, Drawing the Line, Chapter 6. ‘All the World Over’ The Transnational World of Australian Radical and Labour Cartoonists

Figure 6.5: Anon, ‘The Difference between Labor and Capital’, Life, c. 1887. Courtesy Huntingdon Library, California. From Monash University Publishing, Drawing the Line, Chapter 6. ‘All the World Over’ The Transnational World of Australian Radical and Labour Cartoonists

 

This view of Capital and Labor was not unique to the anonymous source; from the same year:

Figure 6.4: Phil May, ‘Poverty and Wealth; It all depends on the position of the bundle’, Bulletin, c. 1887.  Courtesy State Library of New South Wales.

Figure 6.4: Phil May, ‘Poverty and Wealth; It all depends on the position of the bundle’, Bulletin, c. 1887. Courtesy State Library of New South Wales.

Capitalists appear to have all eaten well, well enough in the eye of the public that a fat man with a vest was quick, cartoonist shorthand for “capitalist.”  If it did not apply in every case — see John D. Rockefeller, Andrew Carnegie, and the younger Cornelius Vanderbilt, for example — it applied often enough that “the fat guy” was instantly recognized as the capitalist, the factory owner, the boss.

Click over to that Monash University site; there are a score of great cartoons in that one chapter.


Can dog whistle politics keep the GOP in power, or is America too smart to stay enthralled?

March 2, 2014

Especially if, by some grotesque misunderstanding, you don’t think you’re in the 47% Mitt Romney wrote off as undeserving of a vote and a life, you ought to listen to Ian Haney López describe what’s going on in GOP and conservative politics.

From Bill Moyers.

Transcript here.

Cover of Ian Haney Lopez's Dog Whistle Politics, How coded racial appeals reinvented racism and wrecked the middle class; Oxford Books

Cover of Ian Haney Lopez’s Dog Whistle Politics, How coded racial appeals reinvented racism and wrecked the middle class; Oxford Books

Moyers’s website describes this interview:

Ian Haney López on the Dog Whistle Politics of Race

February 28, 2014

What do Cadillac-driving “welfare queens,” a “food stamp president” and the “lazy, dependent and entitled” 47 percent tell us about post-racial America? They’re all examples of a type of coded racism that this week’s guest, Ian Haney López, writes about in his new book, Dog Whistle Politics.

Haney López is an expert in how racism has evolved in America since the civil rights era. Over the past 50 years, politicians have mastered the use of dog whistles – code words that turn Americans against each other while turning the country over to plutocrats. This political tactic, says Haney López, is “the dark magic” by which middle-class voters have been seduced to vote against their own economic interests.

“It comes out of a desire to win votes. And in that sense… It’s racism as a strategy. It’s cold, it’s calculating, it’s considered,” Haney López tells Bill, “it’s the decision to achieve one’s own ends, here winning votes, by stirring racial animosity.”

Ian Haney López, a professor of law at the University of California, Berkeley, is a senior fellow at the policy analysis and advocacy group, Demos.

Producer: Candace White. Segment Producer: Robert Booth. Editor: Sikay Tang.

Does revealing the existence of dog whistles help kill the cheap trick?  My fear is that those who hear the whistle clearly understand that they are responding to a racist call, and that is why they respond.  Exposing the racism, or exposing the subtle use of racism, only makes the politicians who use the whistle more appealing to those voter segments, and those policies more appealing to those voters (though they would not admit it).

If you think dog whistles don’t exist, consider the hot controversies surrounding education spending, vouchers to kill public schools, immigration reform needed to boost our economy, or health care reform.  Consider also the birther movement.

After hearing Mr. Haney López’s interview, what do you think?

More: 


No, the Fed has NOT discouraged saving

February 19, 2014

Fed can’t explain it, but, no, low interest rates appear not to have discouraged savings.  Tea Party catastrophe mongers won’t change their claims, though, I’ll bet.

Do they even look at the facts?

Also:  No, the Fed is not “flooding the nation with increased money supply.”

According to Rex Nutting at MarketWatch:

According to Rex Nutting at MarketWatch: “The Fed is not flooding the economy with money. The growth of the money supply has actually slowed since the adoption of QE3. Yes, the Fed has conjured about $1 trillion in the past year to buy super-safe Treasury and mortgage-backed bonds from the private sector in a bid to force investors to put their money into riskier investments that will help the economy grow a bit faster.

Nutting’s column at MarketWatch is worth the read just for the links he provides to documents that explain what the Fed does and how the economy works — documents that appear beyond the reading and perhaps beyond the ken of far too many critics of the Fed and actions we need to take to get to robust economy.

(Why, yes, Nutting is a veteran of the Daily Utah Chronicle and Utah’s journalism program.  Why do you ask?)


January 5 is Fair Deal Day; thanks to Harry Truman

January 5, 2014

Front page of the New York Times on January 6, 1949, with news of President Truman's State of the Union message.  Oddly, via Conservapedia

Front page of the New York Times on January 6, 1949, with news of President Truman’s State of the Union message. Oddly, via Conservapedia

President Harry Truman delivered his State of the Union address to Congress on January 5, 1949, the first after he’d won election to the presidency in his own right (he succeeded to the presidency on the death of Franklin Roosevelt on April 12, 1945, remember).

Campaign button from the 1948 presidential campaign; on January 5, 1949, Truman presented a more detailed program backing the slogan, in his State of the Union Address

Campaign button from the 1948 presidential campaign; on January 5, 1949, Truman presented a more detailed program backing the slogan, in his State of the Union Address

Not a barn-burner of a speech, but an important one.  He appealed to history and the Square Deal of Teddy Roosevelt and the New Deal of Franklin Roosevelt; he appealed to Americans’ innate patriotism, and he appealed to a nation grateful to the soldiers who had defended freedom and democracy in World War II.  Truman called for a Fair Deal for all Americans, because they’d earned it, and it was the American thing to do.

This was barely eight weeks since Truman pulled out a stunning re-election win against the “do-nothing Congress.”  In many, many ways, the problems of 1949 look stunningly familiar to us today.  He spoke of the successes of the country in World War II, and the successes in business and finance since the war, and he said:

Reinforced by these policies, our private enterprise system has reached new heights of production. Since the boom year of 1929, while our population has increased by only 20 percent, our agricultural production has increased by 45 percent, and our industrial production has increased by 75 percent. We are turning out far more goods and more wealth per worker than we have ever done before.

This progress has confounded the gloomy prophets–at home and abroad who predicted the downfall of American capitalism. The people of the United States, going their own way, confident in their own powers, have achieved the greatest prosperity the world has even seen.

But, great as our progress has been, we still have a long way to go.

As we look around the country, many of our shortcomings stand out in bold relief.

We are suffering from excessively high prices.

Our production is still not large enough to satisfy our demands.

Our minimum wages are far too low.

Small business is losing ground to growing monopoly.

Our farmers still face an uncertain future. And too many of them lack the benefits of our modern civilization.

Some of our natural resources are still being wasted.

We are acutely short of electric power, although the means for developing such power are abundant.

Five million families are still living in slums and firetraps. Three million families share their homes with others.

Our health is far behind the progress of medical science. Proper medical care is so expensive that it is out of the reach of the great majority of our citizens.

Our schools, in many localities, are utterly inadequate.

Our democratic ideals are often thwarted by prejudice and intolerance.

Each of these shortcomings is also an opportunity-an opportunity for the Congress and the President to work for the good of the people.

Hello, boy howdy!  Prices aren’t so stifling as they were considered to be, then, and inflation is far from the plate of problems we face.

But the rest?

Perhaps we should look back to see what Congress, and the nation, did in 1949, as instructive to us in 2014.  Did Americans get a Fair Deal then?  Do they deserve one now?

From “Today in History” at American Memory, the Library of Congress:

On January 5, 1949, President Harry Truman used his State of the Union address to recommend measures including national health insurance, raising the minimum wage, strengthening the position of organized labor, and guaranteeing the civil rights of all Americans. Referencing the popular “New Deal” programs of his predecessor, Franklin Delano Roosevelt, Truman styled his reform package the “Fair Deal.”

A few months earlier the president’s career seemed over.  Political pundits of the time agreed that Truman needed a miracle to win his 1948 bid for reelection against the popular Republican governor from New York, Thomas E. Dewey. Adding to the incumbent’s troubles, a revived Progressive Party attempted to attract left-leaning Democrats, while segregationist “Dixiecrats” broke with the Democrats to run South Carolina Governor Strom Thurmond for president. Responding to the competition, Truman embarked on a campaign tour by train, delivering “whistle-stop” speeches to thousands of voters in small communities throughout the United States. This tactic proved effective, and President Truman was reelected by a slim margin. Still, the Chicago Daily Tribune was so confident of the president’s defeat it went to press with the November 3, 1948 headline “DEWEY DEFEATS TRUMAN.”

Truman had begun to push for Fair Deal-type legislation following the end of World War II in 1945. However, Congress resisted his plans for the extension of federal social and economic programs. Concerned about the transition from a wartime to a peacetime economy, lawmakers ultimately accepted the role of government in maintaining full employment and stabilizing the economy, but rejected Truman’s proposals for national health insurance, educational aid, and federally-supported housing programs. Even after Truman’s successful 1948 campaign, the mandate for expanded social programs remained weak. The minimum wage rose and social security coverage broadened, but few Fair Deal programs were enacted.

On July 26, 1948, President Harry Truman issued two executive orders. One instituted fair employment practices in the civilian agencies of the federal government; the other provided for “equality of treatment and opportunity in the armed services without regard to race, color, religion, or national origin.”

Gib Crockett cartoon on Truman's Fair Deal, 1949.  May still be under copyright

Gib Crockett cartoon on Truman’s Fair Deal, 1949. May still be under copyright

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Insta-Millard: Unemployment benefits boost would cost $6 billion — hella bargain

December 31, 2013

Throw a device to keep people afloat in the economy, and life?

Throw a device to keep people afloat in the economy, and life?

Congressional Budget Office released its analysis of the bill proposed to extend long-term unemployment compensation for another three months.  Bottom line, CBO says it will increase deficits by about $6.4 billion.

S. 1845, The Emergency Unemployment Compensation Extension Act

S. 1845 would extend the Emergency Unemployment Compensation (EUC) program for three months—through March 31, 2014. The EUC program allows qualified states to provide up to 47 additional weeks of federally funded unemployment compensation to people who have exhausted their regular unemployment benefits.

Heckuva bargain.  Let’s do it.  Call your Member of the House of Representatives, tell her or him to pass this law.

Payments to people who need money tend to put them to work, boost the economy, and make later aid unnecessary.  But who listens to economists or historians any more?

More:


December 31, 2013: Bright Idea Day, anniversary of Edison’s light bulb

December 30, 2013

Between Christmas and New Year’s Day, here at Millard Fillmore’s Bathtub we celebrate a variety of historically holy days.  December 31, by tradition, is Bright Idea Day, the anniversary of the day Thomas Edison demonstrated for the public a working light bulb in 1879.

100,000 people gather in Times Square, New York City, tonight, and millions more around the world, in festivities for the new year made possible by the work of Thomas Alva Edison.

Here it is, the invention that stole sleep from our grasp, made clubbing possible, and launched 50,000 cartoons about ideas:

The light bulb Thomas Edison demonstrated on December 31, 1879, at Menlo Park, New Jersey - Wikimedia image

The light bulb Thomas Edison demonstrated on December 31, 1879, at Menlo Park, New Jersey – Wikimedia image (GFDL)

The light bulb. It’s an incandescent bulb.

It wasn’t the first bulb. Edison a few months earlier devised a bulb that worked with a platinum filament. Platinum was too expensive for mass production, though — and Edison wanted mass production. So, with the cadre of great assistants at his Menlo Park laboratories, he struggled to find a good, inexpensive filament that would provide adequate life for the bulb. By late December 1879 they had settled on carbon filament.

Edison invited investors and the public to see the bulb demonstrated, on December 31, 1879.

Thomas Edison in 1878, the year before he demonstrated a workable electric light bulb.  Library of Congress image

Thomas Edison in 1878, the year before he demonstrated a workable electric light bulb. CREDIT: Thomas Edison, head-and-shoulders portrait, facing left, 1880. Prints and Photographs Division, Library of Congress. Reproduction number LC-USZ62-98067

Edison’s successful bulb indicated changes in science, technology, invention, intellectual property and finance well beyond its use of electricity. For example:

  • Edison’s Menlo Park, New Jersey, offices and laboratory were financed with earlier successful inventions. It was a hive of inventive activity aimed to make practical inventions from advances in science. Edison was all about selling inventions and rights to manufacture devices. He always had an eye on the profit potential. His improvements on the telegraph would found his laboratory he thought, and he expected to sell the device to Western Union for $5,000 to $7,000. Instead of offering it to them at a price, however, he asked Western Union to bid on it. They bid $10,000, which Edison gratefully accepted, along with the lesson that he might do better letting the marketplace establish the price for his inventions. Other inventive labs followed Edison’s example, such as the famous Bell Labs, but few equalled his success, or had as much fun doing it.  (Economics teachers:  Need an example of the marketplace in action?)
  • While Edison had some financial weight to invest in the quest for a workable electric light, he also got financial support, $30,000 worth, from some of the finance giants of the day, including J. P. Morgan and the Vanderbilts who established the Edison Light Company.
  • Edison didn’t invent the light bulb — but his improvements on it made it commercial. “In addressing the question ‘Who invented the incandescent lamp?’ historians Robert Friedel and Paul Israel list 22 inventors of incandescent lamps prior to Joseph Wilson Swan and Thomas Edison. They conclude that Edison’s version was able to outstrip the others because of a combination of three factors: an effective incandescent material, a higher vacuum than others were able to achieve (by use of the Sprengel pump) and a high resistance lamp that made power distribution from a centralized source economically viable.”
  • Edison’s financial and business leadership acumen is partly attested to by the continuance of his organizations, today — General Electric, one of the world’s most successful companies over the past 40 years, traces its origins to Edison.

Look around yourself this evening, and you can find a score of ways that Edison’s invention and its descendants affect your life. One of the more musing effects is in cartooning, however. Today a glowing lightbulb is universally accepted as a nonverbal symbol for ideas and inventions. (See Mark Parisi’s series of lightbulb cartoons, “Off the Mark.”)

Even with modern, electricity-saving bulbs, the cartoon shorthand hangs on, as in this Mitra Farmand cartoon.

Fusilli has an idea, Mitra Farmand, Fuffernutter

Brilliant cartoon from Mitra Farmand, Fuffernutter

Or see this wonderful animation, a video advertisement for United Airlines, by Joanna Quinn for Fallon — almost every frame has the symbolic lightbulb in it.

Other resources:

Patent drawing for Thomas Edison's successful electric lamp.  Library of Congress

Thomas Edison’s electric lamp patent drawing and claim for the incandescent light bulb CREDIT: “New Jersey–The Wizard of Electricity–Thomas A. Edison’s System of Electric Illumination,” 1880. Prints and Photographs Division, Library of Congress. Reproduction Number LC-USZ62-97960.

Yeah, this is mostly an encore post.

Even More, in 2012 and 2013:


Insta-Millard Pundit, economics edition: Adam Smith was a bleeding heart liberal

December 21, 2013

In a new book, author Jack Russell Weinstein argues that we should pay more attention to Adam Smith’s first book, The Theory of Moral Sentiments,  and not allow Smith’s humanitarian pleas for good community be hijacked by libertarians, conservatives or liberals.

Adam Smith’s Pluralism, Jack Russell Weinstein, Yale University Press, 360 pages

Adam Smith, updated. Illustration by Michal Hogue.

Adam Smith, updated. Illustration by Michal Hogue.

A review of the book explains further, at American Conservative, “Adam Smith, Communitarian:

Weinstein builds upon Smithian harmony, explaining that while life is not always commercial, it is always communal. Community, in turn, derives its lifeblood from “imagination,” because imagination creates the capacity for sympathy. Unlike Kant and other Enlightenment thinkers, Smith “presumes human difference” as a necessary and inherent aspect of civilization, rejecting the Kantian ideal of “noncontextual normativity.” Smith recognized that cultural, temporal, and social differences shaped norms and values, making it impossible to create a single, all-inclusive norm of human behavior. This is why sympathy is so important. It offers a means that is natural to the human condition—our desire to commiserate with our fellow man—to bridge the gap between our differences.

Smith believed that “political society is not derived from a social contract,” according to Weinstein. Instead, society is a natural expression of what it means to be human. The state of nature for Smith is one of community, and the ultimate questions related to human society are questions of morality and virtue, not economics and politics. Thus, a broad, morally robust education rooted in a particular community is essential to forming sympathetic individuals. While Smith did not idealize the role of education—it could not completely eliminate human selfishness and vanity—he believed it had the power to “direct vanity to proper objects” and to “convert competing passions into a harmonious character.”

[The blog post's headline should be read with more than a hint of sarcasm; hate to have to explain that.]

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Milton Friedman really said higher wages make a nation prosperous?

December 18, 2013

Chicago University and Nobel-winning economist Milton Friedman, inspecting fruits of free markets.

Chicago University and Nobel-winning economist Milton Friedman, inspecting fruits of free markets. (Photo found at Crooks and Liars, with quote of Friedman’s explaining the benefits of things like that Earned Income Tax Credit)

In Free to Choose, Milton Friedman wrote:

But when workers get higher wages and better working conditions through the free market, when they get raises by firm competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. They can only come from higher productivity, greater capital investment, more widely diffused skills. The whole pie is bigger – there’s more for the worker, but there’s also more for the employer, the investor, the consumer, and even the tax collector.

That’s the way the free market system distributes the fruits of economic progress among all people. That’s the secret of the enormous improvements in the conditions of the working person over the past two centuries.

What would Friedman say about higher productivity and greater capital investment, an increasing pie, when the increases are denied to the worker, and the employer, and the consumer, and the tax collector?  Somehow, I think even Mr. No-government-regulation would cry, “Foul!”

Heck, that’s a good argument for raising the minimum wage, and for fixing income inequality.

More:


Big health care news story you probably missed (because your local media didn’t cover it)

December 10, 2013

Just sayin’, you know?

This is news economists and budget watchers and policy makers have been hoping to hear for 60 years.

Here it is — did you see it in your local paper? On TV? On Facebook?

Chart showing news coverage of record low health care cost rises.  From ThinkProgress

Chart showing news coverage of record low health care cost rises. From ThinkProgress

http://twitter.com/didikins4life/status/404112438519668736/photo/1

One criticism aimed at the Affordable Care Act that had some legs was that it did not go far enough to control actual costs. Cost controls would have been impossible to add to the bill, politically. So the hope was that this first step would have some impact.

In 2009, health care cost inflation ran about 20% per year, despite the recession. For the previous two decades, health care costs inflated at a greater-than 10% clip every year.

By 2012, with a push from the reforms in the ACA, Bill Clinton reported that health care cost inflation had dropped to 4% per year.

Now?  1.3%.  This is huge news.

Who covered it?  Not many, according to ThinkProgress.

Bad news gets 24-hour coverage and bulletins during the ads.  Good news is an orphan.  How wrong is that?

Bookmark the chart and ThinkProgress; you’ll need facts in your discussions.

More:


Dead economists you ought to know: John Maynard Keynes

December 9, 2013

“Portrait of John Maynard Keynes 1883-1946″ oil on Canvas. Roger Eliot Fry, via Wikigallery – image for non-commercial use only

NPR’s Morning Edition ran a three part series on the some of the people most influential in modern economics. Well, three people — Ayn Rand, Friedrich von Hayek, and John Maynard Keynes.

The series is a good one, and each piece is pretty good at explaining what the economists and Rand were about and why you should know them and their work.

There’s not much that survives of Keynes’ own spoken words, but he can be heard in an old British newsreel, in which he delivered a stern admonition.

“We must free ourselves from the bondage of old ideas,” he said.

One of the “old ideas” Keynes sought most to debunk was the notion that economies in trouble would naturally fix themselves, thanks to the magic of the marketplace. Princeton economist Alan Blinder says Keynes put his finger on a key economic problem — namely, that insufficient demand leads to growing unemployment.

“It’s very simple, that if there aren’t enough buyers, the sellers won’t produce,” Blinder says. “And if they don’t produce, they don’t hire workers. And if they don’t hire workers, the workers don’t have income — and if the workers don’t have income, they can’t buy stuff.”

Keynes was, after all, an economist of crises. The economic stimulus he prescribed for an ailing economy, he made clear, was merely a short-term remedy. In the long term, he wrote, we’re all dead.

In Keynes’ seminal 1936 book, The General Theory of Employment, Interest and Money, he argued that markets do indeed fail, and that if individuals or private enterprise cannot or will not spend in the short term, then the government must, to boost employment.

Here’s the Keynes v. Hayek rap mentioned in the story:

I gave economics students extra credit for reading chapters of Keynes’s book, The General Theory of Employment, Interest and Money, or otherwise studying this material. It’s something far too few people do.

[Much of this post appeared earlier at Mr. Darrell's Pin Factory; used here with express permission.]

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Texas Education Agency looking for social studies books reviewers (and math and fine arts)

December 2, 2013

Last time the SBOE approved social studies books in 2010, the process was contentious.  This photo, from The Christian Science Monitor, shows protests on the books; photo by Larry Kolvoord/Austin American-Statesman

Last time the SBOE approved social studies books in 2010, the process was contentious. This photo, from The Christian Science Monitor, shows protests on the books; photo by Larry Kolvoord, Austin American-Statesman

Good news a few days ago was that the Texas State Board of Education approved science books that teach real science, for use in Texas schools.

But the Road Goes On Forever, and the Tea Party Never Ends:  Social studies books are up for review, now.

TEA is looking for nominations for reviewers for books in social studies, math and fine arts.  Here’s the notice I got in e-mail:

The Texas Education Agency is now accepting nominations to the state review panels that will evaluate instructional materials submitted for adoption under Proclamation 2015.

To nominate yourself or someone else to serve on a state review panel, please complete the form posted at http://www.tea.state.tx.us/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=25769808256&libID=25769808258 and submit it to the TEA on or before Friday, January 24, 2014.

Proclamation 2015 calls for instructional materials in the following areas:

♦   Social Studies, grades K-12

♦   Social Studies (Spanish), grades K-5

♦   Mathematics, grades 9-12

♦   Fine Arts, grades K-12

State review panels are scheduled to convene in Austin for one week during the summer of 2014 to review materials submitted under Proclamation 2015. The TEA will reserve hotel lodging and reimburse panel members for all travel expenses, as allowable by law.

  • Panel members should plan to remain on-site for five days to conduct the evaluation.
  • Panel members will be asked to complete an initial review of instructional materials prior to the in-person review.
  • Panel members will receive orientation and training both prior to the initial review and at the beginning of the in-person review.
  • Panel members might be asked to review additional content following the in-person review.
  • Because many of the samples will be delivered electronically, panel members should be comfortable reviewing materials on-screen rather than in print.
  • Panel members should also have a working knowledge of Microsoft Excel.

Upon initial contact by a representative of the TEA, state review panel nominees begin a “no-contact” period in which they may not have either direct or indirect contact with any publisher or other person having an interest in the content of instructional materials under evaluation by the panel. The “no contact” period begins with the initial communication from the Texas Education Agency and ends after the State Board of Education (SBOE) adopts the instructional materials. The SBOE is scheduled to adopt Proclamation 2015 materials at its November 2014 meeting.

Nominations are due on or before Friday, January 24, 2014.  The nomination form is posted on the TEA website at http://www.tea.state.tx.us/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=25769808256&libID=25769808258.

If you have any questions, please contact review.adoption@tea.state.tx.us.

***********************************************************

Thank you for your commitment to serving Texas students.

Social Studies Staff, Division of Curriculum, (512) 463-9581

Social Studies in Texas include history, geography, economics, government (civics), and (oddly) psychology and sociology, and “special topics.”

Please pass word along to the teachers you know in social studies, fine arts and math.

We recall that old Bette Davis line, playing Margot Channing in “All About Eve”:  “Fasten your seatbelts.  It’s going to be a bumpy night.”

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Quote of the moment, encore: President asks the Senate Majority Leader for help on the debt ceiling issue, November 16, 1983

November 16, 2013

Ronald Reagan addressing the nation from the Oval Office. Image via USGovInfo.About.com

Ronald Reagan addressing the nation from the Oval Office. Image via USGovInfo.About.com

In a letter to the Majority Leader of the U.S. Senate, the President wrote:

This letter is to ask for your help and support, and that of your colleagues, in the passage of an increase in the limit on the public debt.

As [the Treasury Secretary] has told you, the Treasury’s cash balances have reached a dangerously low point.  Henceforth the Treasury Department cannot guarantee that the Federal Government will have sufficient cash on any one day to meet all of its mandated expenses, and thus the United States could be forced to default on its obligations for the first time in history.

This country now possesses the strongest credit in the world.  The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate.  Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets.  The Nation can ill afford to allow such a result.  The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion:  the Senate must pass this legislation before the Congress adjourns.

I want to thank you for your immediate attention to this urgent problem, and for your assistance in passing an extenstion of the debt ceiling.

Sincerely,

         Ronald Reagan

True then.  Still true now.

Letter from President Ronald Reagan to Senate Majority Leader Sen. Howard Baker, R-Tennessee, November 16, 1983.  The Treasury Secretary at the time was Donald Regan.

Tip of the old scrub brush to mainstream media pillar, The Washington Post, where a .pdf of the letter is available.

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Jonathan Gruber explaining ObamaCare a year ago: The Comic Book

November 1, 2013

THERE MUST BE A BETTER WAY: Some 2,700 people lined up in July for free medical treatment at the Virginia-Kentucky Fairgrouds, in 2009. Inc. Magazine photo

THERE MUST BE A BETTER WAY: Some 2,700 people lined up in July for free medical treatment at the Virginia-Kentucky Fairgrouds, in 2009. Inc. Magazine photo

Description from PBS NewsHour:

Published on Jun 8, 2012

Health correspondent Betty Ann Bowser talks with Jonathan Gruber, the author of “Health Care Reform,” the comic book. The MIT economist and professor of economics hopes the graphic layout of his book will help more Americans understand the complex law and its implications.

Read more about Gruber’s book and the health care reform law on the NewsHour’s Health Page: http://www.pbs.org/newshour/topic/hea….

Be sure to see what’s going on more than a year later, in the immediately previous post, “Winners and losers.”


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