"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister

"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."

- Daenerys Targaryen

"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"

- Tyrion Lannister

"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."

- Jorah Mormont

"These bad people are what I'm good at. Out talking them. Out thinking them."

- Tyrion Lannister

"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."

- Michael Barone

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker

Saturday, October 15, 2016

Baker on Furman

A Little Pre-Election BS From the White House on Income Inequality by Dean Baker
Anyhow, in spite of my respect, I feel the need to call him out on trying to pull the wool over folks' eyes in a recent column. The column touts many of the positive measures (in my view) to help people at the middle and the bottom under the Obama administration, such as expansion of the earned income tax credit, the child tax credit, and most importantly the Affordable Care Act which has extended health insurance coverage to 20 million people and allows people with serious health conditions to get insurance at the same price as every one else. These measures have been paid for by higher taxes on the wealthy. This is all very positive and the Obama administration deserves credit for these measures, even if I would have liked to see it go much further. 
However, the reason my BS detector went off is that Furman tried to claim we had turned the corner in some big way on the upward redistribution of income from the last four decades. He tells readers: 
"Partly as a result of these policy changes, the top 1 percent’s share of income after taxes was 12 percent in 2013 (the most recent year for which data are available), well below its 2007 peak and roughly equal to its share in 1997." 
The problem with this story is that the 2013 numbers for the top 1 percent are skewed downward in a big way as a result of the tax increase on the rich that the administration put in place in 2012. The wealthiest 1 percent often have considerable control over the timing of their income. They knew the top tax rate would rise from 35.0 percent for 2012 to 39.6 percent in 2013. This gave them a very strong incentive to declare income in 2012 that would have otherwise appeared in 2013. This makes 2012 look really good for the 1 percent and 2013 much worse. 
This shows up clearly in the data. According to the estimates from the Congressional Budget Office (Figure 7), the inflation-adjusted before-tax income of the top 1 percent rose by 37.9 percent in 2012. It then fell back by 22.0 percent in 2013. This is exactly what we would expect from this tax gaming. If we take the average of these two years, the before-tax income of the top 1 percent has risen by 73.3 percent from its 1997 level. On the plus side, it is down by 22.6 percent from the bubble peak of 2007. 
I should point out that this tax timing issue is hardly a secret. CBO mentioned it explicitly in the summary of its report: 
"In response to tax law changes that went into effect in 2013, some taxpayers—especially those at the top of the income distribution—shifted some income into 2012 to avoid the higher tax rates on that income in 2013." 
Anyhow, it is too early to claim any big victories in turning around the rise in before-tax income inequality. (This is also the view of CBO which projects that the bulk of the wage gains in the next decade will go to high-end earners, as has been the case for the last 35 years.) 
The Obama administration deserves credit for some big steps in the right direction, but we still have a very long way to go. This is why I wrote "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer," coming this week to a website near you.

Friday, October 14, 2016

centrist Hillary Clinton and Wikileaks

The Most Important WikiLeaks Revelation Isn’t About Hillary Clinton by David Dayen


Hillary Clinton’s Campaign Strained to Hone Her Message, Hacked Emails Show

Voters sour on traditional economic policy by Larry Summers
In the same way as with Brexit, the rise of Donald Trump and Bernie Sanders, the strength of rightwing nationalists in many European countries, Vladimir Putin’s strength in Russia and the return of Mao worship in China, it is hard to escape the conclusion that the world is seeing a renaissance of populist authoritarianism.

Sunday, October 09, 2016

Obama and Shalizi

The way ahead by Barack Obama (2016)

Liberty! What Fallacies Are Committed in Thy Name! by Cosma Shalizi (2004)