Why Washington Accepts Mass Unemployment by Jonathan Chait

Gore Vidal by Gay Talese

To Ease or Not to Ease By Rana Foroohar

political economy

Obama turns 51. His favorite Wire character is Omar Little. During the first campaign he said in an interview with BusinessWeek that labor hasn't shared in productivy gains since the late 1990s and that it isn't fair. During one of his State of the Union addresses with the Supreme Court judges sitting front row, he blasted their Citizens United decision. He gave the order at Zero Dark Thirty to capture or kill Bin Laden. He hasn't made any big gaffes besides listening to Geithner and Orszag's advice to turn to deficit cutting. Reappointing Bernanke was an understandable yet costly error given the fragility of the financial system at the time.

The Monetary Base is Irrelevant by Yglesias

Unemployment Insurance Claims Do Provide Information by Dean Baker

Hiring Picks Up in July, but Data Gives No Clear Signal by Catherine Rampell

America added more jobs than expected last month, offering a pleasant surprise after many months of disappointing economic news. Even so, hiring was not strong enough to shrink the army of the unemployed in the slightest.

...

“Nearly the entire reduction in unemployment since October 2009 has been accomplished through a significant drop in the percentage of adults participating in the labor force,” said Peter Morici, a professor in the business school at the University of Maryland.

Emphasis added. Looks like the economy has stagnated at a depressed equilibrium.

 The Job Market is Stuck in Place - NYTimes editorial

July’s job-growth figure brings the monthly average tally for 2012 to 151,000, compared with a monthly average in 2011 of 153,000. At that tepid pace, it would take roughly 10 more years to regain the jobs that were lost — or never created — as a result of the Great Recession.
...
Responding to the latest employment report, the White House noted correctly that major areas of job weakness — including positions in construction and teaching — are precisely those that would have been the subject of the jobs bill proposed in 2011 by President Obama. That legislation was blocked by Congressional Republicans.

2008-2012 is worse than the 1970s.

DeLong is shrill.

JONATHAN CHAIT HITS ONE OUT OF THE PARK: WASHINGTON D.C. MASQUE OF THE UNEMPLOYED EDITION by DeLong

Makes me think of the compelling idea - new to me - put forward by Steve Randy Waldman in his latest post: that World War II was sort of a "reset button" on the inequality of the preceding decades.

Why did World War II, one of the most destructive events in the history of world, engender an era of near-full employment and broad-based prosperity, both in the US where capital and infrastructure were mostly preserved, and in Europe where resources were obliterated? People have lots of explanations, and I’m sure there’s truth in many of them. But I think an underrated factor is the degree to which the war “reset” the inequalities that had developed over prior decades. Suddenly nearly everyone was poor in much of Europe. In the US, income inequality declined during the war. Military pay and the GI Bill and rationing and war bonds helped shore up the broad public’s balance sheet, reducing indebtedness and overall wealth dispersion. World War II was so large an event, organized and motivated by concerns so far from economic calculation, that squabbles between rich and poor, creditor and debtor, were put aside. The financial effect of the war, in terms of the distribution of claims in the US, was not very different from what would occur under Keen’s jubilee.

NO, MITT ROMNEY DOES NOT BELIEVE IN THIS "ARITHMETIC". WHY DO YOU ASK? KEVIN HASSETT-AND-SCRAPING-THE-BOTTOM-OF-THE-BARREL EDITION by DeLong

The Human Disaster in Unemployment by Dean Baker and Kevin Hassett

Bane (or Selina Kyle's choice)*

"There's a storm coming, Mr. Wayne. You and your friends better batten down the hatches, because when it hits, you're all gonna wonder how you ever thought you could live so large and leave so little for the rest of us." 

―Selina Kyle 

Mercenary: We've started a fire?  

Bane: Yes! The flame grows higher!

Anne Hathaway's Selina Kyle is in my opinion the center of The Dark Knight Rises. She recognizes the corruption of the Gotham elite, is not of that elite and does not want to be part of it. She tells Bruce Wayne she doesn't care what they think of her. She has nothing but contempt  for them.

(Spoilers...)

The League of Shadows  (Ra's al Ghul, Talia al Ghul, Bane) sees this corruption (hedge fund manager Daggart, the mob, Wall Street) and wants to wipe Gotham clean and "restore balance." Batman/Bruce Wayne, commissioner Gordon, and Joseph Gordon-Levitt's Blake want to reform it. Obviously the League of Shadows' program would cost many innocent lives.

It's interesting to consider director/writer Christopher Nolan's take on what is corrupt about contemporary America. He includes Democratic Senator Leahy cameos in the last two films. Leahy is a big fan of Batman, but it's possible Nolan shares his politics. The opening of the film has the CIA engaging in its ruthless War on Terror and threatening terrorists with being dropped out of a plane (reminiscent of the Argentinian military junta's police state methods and Vietnam).  (The CIA officer is played by Aidan Gillen of The Wire and Game of Thrones. The black army officer on the bridge who negotiates with Bane's men is another actor from The Wire. He played the police chief who made a drug legalization haven.)

The last film with the Joker was more about 9-11, the war on terror, Binladenism, police-state/surveillance state, wiretapping and torture. This one brings in elements of the housing bust, financial crisis, nuclear proliferation, rising inequality and the Occupy movement. There are images of class warfare as the lower class has a revolution against the upper class thanks to Bane taking out the police force. In the assault on the stock market, Bane and his men disguise themselves as cheap labor: food deliveryman, a courier, a shoe-shine man, a construction worker, a janitor. (Selina Kyle sneaks into Wayne Manor disguised as a servant.) Nolan depicts the trader-banksters - and hedge fund manager Daggart - as stereotypical entitled douchebags. It's hard not to share in Bane's obvious disdain for them. One of the hostages they take looks like a young Mitt Romney.

Though not all of the rich are corrupt in Nolan's Gotham. Bruce Wayne and the Penny Pritzker-philanthropist Miranda Tate invest heavily in research into clean, sustainable energy, something "wise stewards" would do. And Bruce's wealthy parents invested in public transportation and other infrastructure projects that a non-corrupt elite would do, unlike, say, today's Republican Party and its financial backers. At Tate's charity event, reformer Bruce Wayne expresses his contempt for the elite to Miranda Tate. Tate in turn expresses her disdain for bankster Daggart when he comments on how she's losing money investing in clean, sustainable energy.

Where does Bane get his zealous recruits? At the orphanage, officer Blake interviews an orphan who says that boys who "age out" and are put on the streets - like his older brother whose body Blake found - have no job prospects, but there's work available in the sewers. Bane has a jobs program while the nation's central bank fails to fulfill its mandate by targeting a 2 percent inflation-ceiling-cross-of-gold. Another instance of the priorities of Gotham's elite.

Anne Hathaway's Catwoman must decide whether its worth it to risk her life to try to help Batman save Gotham and its corrupt elite, ground-down poor, and "silent majority." Nolan vaguely makes references to the French Revolution, Robespierre, and the storming of the Bastille. Things are so crappy for the lower orders and the corruption of the elite is so obvious, that many of Gotham's citizens do riot and rise up against the one percent. (Think of Selina Kyle's young friend or the "aged out" orphans.) They are able to do so because of Bane. He neutralizes the police force and the possibility of any intervention from the Federal government.


So it looks like the League of Shadows will succeed in wiping the slate clean, but Batman foils their plans with assists from Gordon, Blake, Matthew Modine's police chief and Catwoman. Levitt's Robin quits the police force to become a vigilante maybe because the police wouldn't let him cross the bridge, following orders. But it was Commissioner Gordon whose kindness towards a young Bruce Wayne helped Wayne become the do-gooder he became (also thanks to Alfred and Fox). Bruce Wayne/Batman also helped inspire the young orphan Blake and helped give Catwoman the chance to do the right thing and earn a clean slate.


Police officer Gordon's humanity towards the young Wayne helped create Batman.  Thanks to Catwoman decision to involve herself and save Batman from Bane, Batman is able save Gotham from a nuclear holocaust.

On a side note, the film had a number of exciting action sequences: the opening scene with the kidnapping of  a Russian nuclear scientist; the assault on the stock exchange and motorcycle chase; Catwoman and Batman versus Daggart's henchmen and the brief appearance of Bane at the end; the pièce de résistance  with massive streetfighting on the steps of City Hall with snow falling all around.

Conservatives have argued that the film is a conservative film in that it makes the left look bad. Rather I think it makes some accurate diagnoses of the current political scene. In his speech at the football stadium, Bane mentions the "myth of opportunity." That's an accurate description of contemporary America. Moviegoers are often said to pay to watch dreams and The Dark Knight Rises is a lefty dream with many details displaying a lefty take on things, including another series cameo by Senator Leahy. The outcomes aren't ideal, but this is a comic book movie. The Orwellian talk of the hanging judge at the people's court reminds me very much of the constant "2 + 2 = 5" up-is-down rhetoric of Republicans and their paid-for pundits. The class conflict portrayed on screen is a reversal of what's really happening currently with the upper classes mauling the lower class. It's a fantasy where entitled, douchebag banksters get roughed-up by avenging everyday people and where a classy jewel thief articulates our revulsion at an elite as corrupt as Marie Antoinette's 18th Century French aristocracy.

----------------
* revision from July 26th version

Trade-offs between inequality, productivity, and employment by Steve Randy Waldman

currency exchange rates

The Value of the Yen, the Dollar, and Generational Issues by Dean Baker

Remarkably, while the value of the currency is apparently a hotly debated issue in Japan (at least according to the NYT), it is rarely mentioned in the United States. This could be due to the fact that more powerful interests than retired workers support an over-valued dollar in the United States.

The financial sector typically supports an over-valued currency since it reduces the risk of inflation and it makes them bigger actors overseas. Also, major retailers like Wal-Mart have established extensive supply networks overseas that rely on being able to buy goods cheaply. Most major manufacturers have also established subsidiaries in China and other countries with low wages.

These powerful interest groups would strongly resist any effort to lower the value of the dollar and thereby make U.S. goods more competitive in world markets. This could explain why the value of the currency is debated in Japan, while the NYT tells us that is only a matter of historical concern (the 1980s) in the United States.

Mitt Romney's Big Polish Idea: Let's Debase the Dollar! by Matt O'Brian

Pole's Apart by Krugman

Monetary Expansion Works: Poland Edition by Yglesias

Gore Vidal died

Gore Vidal Dead at 86

Fire Ed DeMarco by Krugman

Easing as Insurance

Some at Fed Are Urging Pre-emptive Stimulus by Binyamin Appelbaum

The Goldman Sachs economist is quoted as saying that Greenspan eased in response to Russia's 1998 default even though many on the board wanted to tighten. Unemployment dropped to 4 percent and labor shared in productivity gains something that hadn't happened in a while and hasn't happened since.

This led to the stock bubble (and jobless recovery and housing bubble.) Say the easing was correct. What could have been done to prevent the stock bubble? 

(my view on the direction of the economy also.)

True Blood’s blood orgy has given us a vampire hangover by Meredith Woerner