Weekend Economists Could Have Danced All Night! October 16-18, 2015

[Demeter]

My Fair Lady is our theme this Weekend. The film, an instant classic, was released November 9th, 1964, just 3 weeks and 3 days short of 50 years ago. (So, I'm ahead for once!) This film adaptation of the Lerner and Loewe eponymous stage musical was based on the 1938 film adaptation of the original 1913 stage play Pygmalion by George Bernard Shaw. (That's 102 years ago!)



The film won eight Academy Awards, including Best Picture, Best Actor, and Best Director. The film was re-released in 1971 and earned North American rentals of $2 million. It was re-released again in 1994 after a thorough restoration. (There will be an anniversary showing at a theater near you! Look for it!) http://www.myfairlady50.com/

The original Broadway, London and film versions all starred Rex Harrison. Julie Andrews, who did the Broadway and London shows, was replaced by Audrey Hepburn in the film. Her singing was so atrocious, it had to be dubbed over by Marnie Nixon, who sang all songs except "Just You Wait", where Hepburn's voice was left undubbed during the harsh-toned chorus of the song and Nixon sang the melodic bridge section. Some of Hepburn's original vocal performances for the film were released in the 1990s, affording audiences an opportunity to judge whether the dubbing was necessary. (I heard those, and believe me, it was!) Less well known is the dubbing of Jeremy Brett's songs (as Freddy) by Bill Shirley.



Harrison declined to pre-record his musical numbers for the film, explaining that he had never talked his way through the songs the same way twice and thus could not convincingly lip-sync to a playback during filming (as musical stars had, according to Jack L. Warner, been doing for years. "We even dubbed Rin-Tin-Tin&quot . George Groves decided to use a wireless microphone, the first such use during filming of a motion picture. The sound department earned an Academy Award for its efforts.



My Fair Lady currently holds a 95% approval rating on Rotten Tomatoes; the general consensus states: "Fans of the play may miss Julie Andrews in the starring role—particularly when Marni Nixon's singing comes out of Audrey Hepburn's mouth—but the film's charm is undeniable." Chicago Sun-Times critic Roger Ebert gave the film four stars out of four, and, in 2006, he put it on his "Great Movies" list, praising Hepburn's performance, and calling the film "the best and most unlikely of musicals."



There were rumors in 2011 of a remake of the film, starring Colin Firth and Carey Mulligan, but those plans have been reportedly shelved as of April, 2014. I cannot imagine what could be added to the original, now that it's been digitally remastered.



My Fair Lady the musical, book and lyrics by Alan Jay Lerner and music by Frederick Loewe opened on Broadway in 1956. The Broadway production was a momentous hit, setting a record for the longest run of any major musical theatre production in history. It was followed by a hit London production, a popular film version, and numerous revivals. It has been called "the perfect musical".

And there's so much more! Plus some of the usual....economics, finance, etc., for those who have no interest in Shaw.

[randys1]

1. Saw the original cast in San Francisco around 1980, I think both were in it, maybe just Rex

I was completely blown away by the whole thing.

Having been involved in theater in high school and elsewhere, i was stunned by the sets and the quality of the music and performances.

[Demeter]

2. Quantitative Easing Was a Bust; Let’s Try Higher Wages Instead By Mike Whitney

http://www.counterpunch.org/2015/10/16/quantitative-easing-was-a-bust-lets-try-higher-wages-instead/

Why is the economy still in the doldrums after 6 years of zero rates and three rounds of Quantitative Easing? It’s because consumers aren’t consuming and there’s too much debt. You see, despite the Fed’s wacko theories about pumping liquidity into the financial system to make investors feel wealthier, people actually have to buy things to generate growth. And the truth is, consumers have reduced their spending because wages are flat, incomes are falling and many of them are still hanging on by the skin of their teeth. So consumption has been unusually weak.

Economist Stephen Roach made a good point in an article at Project Syndicate. He said,

“In the 22 quarters since early 2008, real personal-consumption expenditure, which accounts for about 70% of US GDP, has grown at an average annual rate of just 1.1%, easily the weakest period of consumer demand in the post-World War II era.” (It’s also a) “massive slowdown from the pre-crisis pace of 3.6% annual real consumption growth from 1996 to 2007.” (“Occupy QE“, Stephen S. Roach, Project Syndicate)

So how is the economy supposed to grow if people aren’t buying things? It can’t.

Now according to the Fed, the best way to fix the problem is to make money cheaper (so more people borrow and spend) and to pump $4 trillion in liquidity into the financial system so stock prices soar. The point of this crazy experiment is to further enrich big time speculators so they spend more money and, thus, rev up the economy. It’s called the “wealth effect” and the Fed actually believes this trickle down nonsense will work if given enough time. But, the fact is, QE hasn’t worked, doesn’t work, and won’t work. Because it doesn’t address the fundamental problem: How to get more money to the people who will spend it and grow the economy. That’s the issue. Zero rates can help because they lower the cost of borrowing. But lower rates don’t work if there’s no demand for funds, that is, if no one is borrowing. And what economists have found out is that, after a major financial crash, where households have seen much of their wealth vanish overnight, people are not as eager to borrow as they were before. This is easy to understand. If you’re in a hole, you stop digging. The average Joe can’t operate like a Wall Street banker who thinks, “I’ll just keep borrowing until I get out of debt.” No. Ordinary working people can’t do that. They have to reduce their spending until they get their heads above water again.

This is why the credit expansion has been so weak since the recession ended in 2009. Yes, there have been exceptions, like subprime auto loans and student loans which have skyrocketed in the last few years, (and many of which are headed for default) but as a whole the demand for credit has remained weak. Once again, this is entirely predictable. When people find themselves deep in the red, (like after a financial meltdown) they don’t borrow as much. It’s that simple. So it doesn’t matter if rates are low or not, the demand for credit is going to remain weak until household balance sheets are repaired and consumers feel comfortable borrowing again.

So if low rates don’t lead to a credit expansion, then what good are they? Not much good at all, in fact, they’re extremely damaging. Time and time again we’ve seen how low rates encourage all kinds of risky behavior, because when money is cheap and easily available, it fuels massive speculation that creates asset bubbles. For example, the stock buyback craze is entirely attributable to the Fed’s zero rates, and it’s precipitated a huge bubble in stock prices. Get a load of this from Zero Hedge:

“In 2014, the constituents of the S&P 500 on a net basis bought back ~$430Bn worth of common stock and spent a further ~$375Bn on dividend payouts. The total capital returned to shareholders was only slightly less than the annual earnings reported. On the fixed income front, the investment grade corporate bond market saw a record $577Bn of net issuance in 2014. While the equity and bond universes don’t overlap 100%, we think these numbers convey a simple yet important story. US corporations have essentially been issuing record levels of debt and using a significant chunk of their earnings and cash reserves to buy back record levels of common stock.” (“Buyback Bonanza, Margin Madness Behind US Equity Rally”, Zero Hedge)

What does this mean in English? It means the giant corporations aren’t even thinking about the future of their companies any more. They’re not building more capacity or hiring more workers or expanding R&D. They’re taking every dime they can get their greasy mitts on and goosing stock prices so they can stuff their pockets full of cabbage and walk away like King Charlie. This is the effect of low rates. This is what happens when speculators get hold of cheap money. It throws the whole system out-of-whack.

Consider this: If the Fed sets rates at zero, and the rate of inflation is 1.5 percent; then for every dollar the Fed lends out, they get $.98 cents back in return. Does that sound like a good deal to you, dear reader? Zero rates mean that the Fed is subsiding bubblemaking and inducing speculators to take risks that are inherently destructive to the system. This isn’t a reasonable way to spur growth or stimulate the economy. It’s the well-worn path to financial crisis. Keep in mind, the Fed’s policies come at a high price too. As we said earlier, the Fed’s balance sheet has ballooned to over $4 trillion dollars. So ask yourself this: How do the service payments on that $4 trillion debt impact economic growth? Obviously, the service payments drain resources away from the real economy. Let’s use an example: Joe Blow decides he doesn’t want to live in his ramshackle $500 per month basement hovel on Capital Hill anymore, so he moves to a beautiful two bedroom apartment in Madison Park overlooking Lake Washington for a whopping $2,200 per month. So, now Mr. Blow has $1,700 less per month to spend on nights-on-the-town or exotic LARPing adventures in Port Orchard with his computer-geek friends. What impact will Joe’s new arrangement have on the economy?

It will hurt the economy because less spending means less growth. And that same rule applies to the corporations that borrowed money to repurchase their own shares. The billions in debt servicing will be diverted away from the real economy where it would have done some good. This is why the big Wall Street banks should have been euthanized following the Crash of ’08, so their debts could have been wiped out instead of transferred to the Fed’s balance sheet where they are a constant drag on growth.

The global economy faces so many headwinds at present that it’s hard to know where to begin. China’s real estate bubble has popped, capital flight has put emerging markets into a nosedive, commodities prices have plunged triggering fears of deflation, the economic data is increasingly bleak, and the Fed’s plan to “normalize” rates has sent stocks gyrating like never before. Even so, economic policy should focus on the things that increase growth, boost demand and lead to a more evenly-shared prosperity. Full employment and solid wages gains should be on top of the list. Those are the foundation blocks for a strong economy that can withstand the ups-and-downs of an erratic business cycle or the periodic battering of financial crises.

We tried QE, now let’s try higher wages.

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at [e-mail].

[Demeter]

3. China has a bigger middle class than America

CHINA HAS 4X THE POPULATION OF THE USA...

http://money.cnn.com/2015/10/14/news/economy/china-middle-class-growing/index.html

The Chinese Dream is coming true for millions. China's middle class is now the biggest in the world, and growing much faster than America's, according to research by Credit Suisse.

There are 109 million Chinese with wealth of between $50,000 and $500,000. Since 2000, twice as many Chinese as Americans have joined the middle class. Credit Suisse measured wealth rather than income to avoid temporary changes caused by unemployment, for example. Chinese are getting richer at an astonishing rate. Wealth per adult has quadrupled to about $22,500 since 2000. The country now accounts for a fifth of the world's population, while holding about 10% of global wealth.

"The wealth of the country's households could well continue to leapfrog the growth rates of developed economies," Credit Suisse said. China should also see the number of millionaires soar 74% to 2.3 million by 2020, according to the report. A report by UBS and PricewaterhouseCoopers found that a new billionaire was created almost every week in China in the first quarter of the year.

Related: China has more than 1 million millionaires
Related: China gets a new billionaire every week

SEE OP FOR LINKS

[Demeter]

4. Junker Throws in the Towel: "We Can't Go On" Fighting Russia

http://russia-insider.com/en/politics/junker-throws-towel-we-cant-go-fighting-russia/ri10463

The EU chief says Europe can no longer afford to have a policy dictated by the United States


This article originally appeared at German Economic News. Translated from the German by Boris Jaruselski

Huge reversal: the EU seeks a normal relationship with Russia. It seems that the EU is being greatly affected by the actions of Vladimir Putin in Syria: suddenly the EU President Jean-Claude Junker is saying that the EU must not let the US dictate their relationship with Russia. He has demanded a normalization of relations – and indirectly, the end of sanctions.

The EU Commission President advocated a relaxation in the conflict with Russia. “We have to achieve a sustainable relationship with Russia. It's not sexy, but has to be done. We can't go on like this anymore”, he said on Thursday in Passau. It isn't necessary to achieve overall understanding, but a sensible conversational basis. “The Russians are a proud people”, the country has “a role to play”, said Junker: “One must not remove them from the bigger picture, otherwise they'll call again, very quickly, as we seen already.” He criticized US President Barack Obama, for having downgraded Russia as “regional power”. “Russia needs to be treated correctly”, the Luxemburgian explained. “We can not have our relationship towards Russia dictated by Washington. It's simply not on.”

This statement is particularly noteworthy. Until now, the EU always placed emphasis on having complete accord with the Americans, with the placement of the Russian sanctions. Some time ago, the US Vice President Joe Biden made it clear that the US had urged the EU to impose the sanctions. Junkers' big back flip is confirming the statement made by Biden. It's hard to discern what's really going on Junker's mind: as late as March, Junker was demanding the establishment of a EU army, which was expressly directed against Russia: such a European army would “give Russia the impression, that we are seriously intending to defend European Union's values”, Junker said word for word, back then.

[Demeter]

5. EU offers Turkey $3.4bn and visas to stop refugee flow

http://www.aljazeera.com/news/2015/10/eu-seeks-turkey-stem-flow-refugees-151015172702068.html


European leaders say that Turkey's help is crucial for slowing down the stream of refugees onto the continent...The European Union has offered Turkey a possible three billion euros ($3.41bn) in aid and the prospect of easier travel visas and "re-energised" talks on joining the bloc in return for its help stemming the flow of refugees to Europe. EU leaders at a summit in Brussels said early on Friday that they agreed on an "action plan" with Turkish President Tayyip Erdogan to cooperate on improving the lives of two million Syrian refugees in Turkey and encouraging them to stay put. They also agreed to coordinate border controls to slow the influx of refugees crossing Turkey from Asia.

Pressure grows on Merkel to limit refugee numbers

Already hosting more than two million Syrians, Turkey has become a launching point for refugees - among them Syrians, Iraqis, Afghans and others - who set out to make it to Europe, often by way of dinghy boats in the Mediterranean Sea. Though the plan put no figure on "substantial and concrete new funds" the EU would offer, German Chancellor Angela Merkel said the figure of 3 billion euros, which EU officials said Ankara had requested, had been discussed and seem reasonable.

"Our intensified meetings with Turkish leaders ... in the last couple of weeks were devoted to one goal: stemming the migratory flows that go via Turkey to the EU. The action plan is a major step in this direction," said summit chairman Donald Tusk, expressing "cautious optimism".

In formal conclusions agreed by the 28 national leaders at a meeting that ended after midnight, Turkey was offered an accelerated path to giving its citizens visa-free travel to the EU, provided it met previously agreed conditions. Merkel, who will visit Istanbul for talks with Erdogan on Sunday in a political gesture two weeks before a Turkish general election, said it was clear that Europe's efforts to filter and process refugees would not work without Turkey's cooperation. French President Francois Hollande stressed that Turks were not getting visas on easier terms. One condition is that Ankara must first stop granting such easy entry to Pakistanis, Afghans and others who end up heading to Europe. It must also first sign and implement a previously agreed deal to take back from Europe migrants who fail to win refugee status. "There must be no misunderstandings," Hollande said.

European governments are wary of granting full visa-free access to 78 million Turks. Any liberalisation is likely to be limited at first to business travellers and students.


Meanwhile, the Hungarian government announced Thursday it had completed construction of a wall along its southern border with Croatia, to stem the influx of refugees. Croatia said more than 4,800 people had entered on Wednesday, bringing the overall number of arrivals in the EU member state to nearly 175,000. There are growing fears that Europe's passport-free Schengen zone could collapse as countries try to curb the huge numbers of refugees criss-crossing the continent.

Refugees drown

Leaders will also discuss a possible safe zone that Turkey wants to establish on its border with war-torn Syria. As leaders gathered, seven refugees, including four children, drowned Thursday after their boat collided with a Greek rescue vessel near the Greek island of Lesbos - the current point of entry for 20 percent of refugees arriving in the EU. More than 3,000 refugees have drowned while crossing the Mediterranean this year.

[Demeter]

6. The banking crash seven years on: it's not yet business as usual UK BY Jill Treanor

http://www.theguardian.com/business/2015/oct/12/banking-crash-seven-years-on-no-time-to-water-down-rules?CMP=ema_565a

Senior bankers are moaning about overregulation, but with the government still owning major stakes in banks this is no time to water down the rules...

Seven years ago this week, Gordon Brown – the then prime minister – was in full combat mode. Royal Bank of Scotland (RBS) and HBOS were on the brink of collapse and risked bringing down the rest of the financial system with them. Brown was left with little option but to step in with billions of pounds of taxpayers’ money to act as a “rock of stability” to prevent the financial sector collapsing.

The intervening years have led to soul-searching through inquiries and changes in the rules about the amount – and type – of capital banks must hold to protect against collapse. Rules about the way bonuses are paid to top bankers have changed: deferral and payment in shares are now the norm for the most senior bankers. Changes are also being made to the way banks are structured following the recommendations by the Independent Commission on Banking, chaired by Sir John Vickers.

The government still owns 73% of RBS, down from 79%, and is yet to get rid of all its shares in Lloyds Banking Group, formed when HBOS was rescued by Lloyds TSB during the crisis. This is not a normal state for the UK banking industry. Yet senior bankers are moaning about the difficulties their businesses face because of regulation. John McFarlane, the chair of Barclays, is again talking about national champions in investment banking. He raised it in July and again this week by suggesting that a merger of European investment banks (£) might allow a regional champion to be created to compete with US rivals. Such remarks may help explain why, just a few weeks ago, Paul Fisher, a senior Bank of England official, issued a warning against watering down the post-crisis rules. “We probably won’t know for sure just how effective the new regime is until we reach another crisis. Meanwhile, we need to guard against the reforms being rolled back as a result of a period without crisis,” Fisher told an audience in London.

[antigop]

7. Marni Nixon: Hollywood's Invisible Voice

http://www.npr.org/templates/story/story.php?storyId=5751867

You might not know Marni Nixon's name, or recognize her face. But it's very likely that you have heard her sing.

Nixon dubbed the voices for Deborah Kerr in The King and I, Natalie Wood in West Side Story and Audrey Hepburn in My Fair Lady — three of Hollywood's biggest movie musicals. Her new memoir, I Could Have Sung All Night, is being published this week.

Nixon, 76, has had a career that defies categorization. She has performed on Broadway and in opera houses, hosted an Emmy Award-winning children's television show and is a well-regarded singing teacher in New York.

Born in Southern California, Nixon had become a sought-after singer by the time she was a teenager. She had perfect pitch, and an ability to read any piece of music handed to her, no matter how difficult. She even premiered works by composers such as Igor Stravinsky.

[Demeter]

8. The Night New York Saved Itself from Bankruptcy By Jeff Nussbaum

http://www.newyorker.com/news/news-desk/the-night-new-york-saved-itself-from-bankruptcy?mbid=nl_101615_Daily_PM&CNDID=26139401&spMailingID=8163721&spUserID=MzkxMjA1MjAwODQS1&spJobID=782195080&spReportId=NzgyMTk1MDgwS0

On October 16, 1975, New York City was deep in crisis. At 4 P.M. the next day, four hundred and fifty-three million dollars of the city’s debts would come due, but there were only thirty-four million dollars on hand. If New York couldn’t pay those debts, the city would officially be bankrupt... Federal help was repeatedly refused by President Gerald Ford and his advisers. The only hope left was pension funds. And the only one that had committed to buying the city’s bonds—the Teachers’ Retirement System—was now pulling back. The mood was grim as New York’s financial and political élite settled in at the hotel to hear the evening’s featured speakers, Robert Moses and Connecticut’s first female governor, Ella Grasso, try their hands at political comedy.

Abraham Beame, who was in his second year as the mayor of New York, was no stranger to the city’s budget and its challenges. During two stints as comptroller, he had seen the drop in manufacturing jobs, the wave of middle-class families moving to the suburbs, and the massive growth of the city’s labor force. He was aware of, and at times condoned, the gimmicks that were used to mask widening budget gaps, such as borrowing against city pension funds to run operating deficits for the city’s buses and subways. Yet while Beame was described by allies and adversaries alike as kind and honorable, he also seemed paralyzed by the intensifying challenges of his office. Ed Koch, who was serving in Congress at the time and would go on to succeed Beame as mayor, later said, “Abe Beame is an accountant, you know, but it’s hard to understand that he has that title.” A few months before, in mid-April, the city had run out of money for the first time. Governor Hugh Carey was willing to advance state funds to allow the city to pay its bills under the condition that the city turn over its financial management to the state. This led to the creation of the Municipal Assistance Corporation, which was authorized to sell bonds to meet the city’s borrowing needs. (Its detractors referred to it as “Big MAC,” because of its authority to overrule city spending decisions.)

The MAC, which was chaired by the financier Felix Rohatyn, insisted on significant reforms, including a wage freeze, a subway fare hike, the closing of several public hospitals, charging tuition at the previously free City University, and tens of thousands of layoffs. But the financial picture continued to deteriorate. Koch remembers hearing testimony before Congress about the city’s fiscal situation and thinking that “it was like somebody escaping from the Warsaw ghetto and saying they’re killing people there. Nobody believed it.”

...By ten o’clock, Rohatyn and others had learned that the Teachers’ Retirement System wouldn’t invest in more MAC bonds. The Teachers’ trustee, Reuben Mitchell, said, “We must watch that investments are properly diversified, that all our eggs aren’t put in one basket.” Governor Carey left the dinner and phoned state and federal leaders with a simple message: Default was imminent. The governor placed another call that night, summoning to his office a developer named Richard Ravitch, who had been serving as a minister without portfolio for the governor. When Ravitch arrived at the governor’s office, Carey was still in white tie. He told Ravitch to find Al Shanker, the powerful head of the teachers’ union, and convince him to buy the bonds that would save the city. A car and driver were waiting outside. In his memoir, Ravitch would later write that when he got to Shanker’s apartment, Shanker “was genuinely distressed by his decision not to buy MAC bonds. He knew the risks to the city, but he believed his primary obligation was his fiduciary responsibility to his teachers. As city employees, they had already been put at risk by the city’s fiscal crisis. It was no small thing to make their pension money subject to the same risk.” They talked until five o’clock that morning, but reached no consensus.

At the same time, Mayor Beame, convinced that there would be no stay of financial execution, had assembled a small team in the basement of Gracie Mansion. Ira Millstein, then a young lawyer at Weil, Gotshal, & Manges, prepared the legal filing. Sid Frigand, the mayor’s press secretary, recalled the point at which the conversation turned not from if the city would go under but how. “We needed to figure out which services were essential, and which weren’t,” he said. “It was an interesting exercise because when you think of what is essential and what is not essential that there are functions of public service that we don’t know about that are very essential. Bridge tenders who raise and lower bridges were essential. Teachers weren’t life-or-death. Hospital services and keeping the highways open were essential.” ...As October 16th became October 17th, the mayor’s team was in constant contact with the mayor’s Contingency Planning Committee as they sought to determine how, exactly, a bankruptcy would play out. Police, fire, sanitation—those were essential. Hospital and emergency care were, too. But what would the mayor say? Rubenstein was working on the mayor’s statement. Even in the moment of crisis, there was some score settling. Beame had no love for the comptroller and wanted him implicated in the bankruptcy. The first words of the statement read, “I have been advised by the Comptroller that the City of New York has insufficient cash on hand to meet debt obligations due today.…”

Rubenstein handed Beame the statement after many hours of work. The mayor looked at it, said nothing, and nodded. Rubenstein had it typed up. At 12:25 A.M., Beame attempted to call President Ford to advise him that default was imminent. Ford was asleep. On the morning of October 17th, New Yorkers woke to a series of grim headlines. (“Balk by UFT pushing city to default,” in the Staten Island Advance; “Teachers Reject 150-Million Loan City Needs Today,” in the New York Times.) The city ordered the sanitation department to stop issuing payroll checks, and one bank said it would not cash city payroll checks unless they were drawn on an account held by the bank itself. New York City’s bonds, issued by the MAC, plunged to between twenty dollars and forty dollars per thousand-dollar face value, and city note-holders began to line up at the Municipal Building in an attempt to redeem whatever they could. That morning, Rohatyn told the press that everything hinged on the teachers’ union: “The future of the city is in their hands.”

It was more than just the future of one city. New York’s bonds were held by banks throughout the United States and around the world. By some estimates, New York’s default would bring down at least a hundred banks, and expose others to liability for selling suspect or fraudulent products. Economists warned that New York’s default would hurt the dollar abroad. The Dow dropped ten points at the opening bell, the price of gold began to rise, and, as reported by the United Press International wire service, “trading of bonds of other cities and states slowed to a near standstill, and even the prices of most credit-worthy bonds fell.” One newspaper in North Carolina ran a cartoon of a bum lying on trash, under the Brooklyn Bridge, with the caption, “We’re going down, America, and we’re taking you with us.” President Ford began hearing from leaders around the world about the dangers of a New York default. His press secretary, Ron Nessen, said that Ford would continue to monitor the situation throughout the day, but wouldn’t change his mind about granting assistance to the city. In Nessen’s words, “This is not a natural disaster or an act of God. It is a self-inflicted act by the people who have been running New York City.”

****************************
The teachers’ union was in a bind. Shanker later called it blackmail. If the city went bankrupt, a judge could order thousands of teacher dismissals, undo the raises the teachers had recently negotiated, and override any pension laws, stripping retirees of their pension checks. Three hours into the meeting, Shanker left to meet with the Teachers’ Retirement System. Ravitch remembers that the only evidence of the momentous decision that had just taken place in his apartment was a trail of matzo crumbs. At 2:07 P.M., the teachers’ union announced that it would reverse course and would make up the city’s hundred-and-fifty-million-dollar shortfall with their pension funds. “No one else was coming forward to save the city,” Shanker said...The immediate crisis averted, New York’s leaders continued to petition for federal help. Twelve days later, President Ford stepped to the podium at the National Press Club and delivered a stinging rebuke.

“What I cannot understand—and what nobody should condone—is the blatant attempt in some quarters to frighten the American people and their representatives in Congress into panicky support of patently bad policy. The people of this country will not be stampeded; they will not panic when a few desperate New York City officials and bankers try to scare New York’s mortgage payments out of them.”

Later in the speech, he added, “I can tell you, and tell you now, that I am prepared to veto any bill that has as its purpose a federal bailout of New York City to prevent a default.”’

The harshness of the speech that Ford ultimately delivered led to a headline that ran in the following morning’s New York Daily News and will forever be associated with Ford, although he never said it. “Ford to City: Drop Dead.”

Ironically, Ford’s tough words, and the even tougher headline they engendered, may have served to save New York and sink Ford. For New York, Ford’s statement convinced the key players that no federal help would be forthcoming. It galvanized the city to make tough choices and significant changes. Rubenstein, Koch, and others would later say that by refusing to save the city, Ford did the city a service. (For better or worse, it may also have enshrined brinkmanship as a bankruptcy negotiating tactic.) And although Ford would later approve federal support for New York, New Yorkers remembered the headline. The following year, Jimmy Carter received the third-highest vote share a Democratic presidential candidate ever received in New York City, narrowly won New York State, and with it, the forty-one electoral votes that give him the Presidency—revealing the impact from one speech that wasn’t given, and one that was.

[antigop]

9. Audra MacDonald:"I Could Have Danced All Night" Kennedy Center honors Julie Andrews

Audra begins at 17:41. I enjoyed the whole clip.

I love, love, love Audra!

[Demeter]

10. The world economic order is collapsing and this time there seems no way out Will Hutton

http://www.theguardian.com/commentisfree/2015/oct/11/world-order-collapse-refugees-emerging-economies-china-slowdown-recession?CMP=ema_565a


Europe has seen nothing like this for 70 years – the visible expression of a world where order is collapsing. The millions of refugees fleeing from ceaseless Middle Eastern war and barbarism are voting with their feet, despairing of their futures. The catalyst for their despair – the shredding of state structures and grip of Islamic fundamentalism on young Muslim minds – shows no sign of disappearing...Yet there is a parallel collapse in the economic order that is less conspicuous: the hundreds of billions of dollars fleeing emerging economies, from Brazil to China, don’t come with images of women and children on capsizing boats. Nor do banks that have lent trillions that will never be repaid post gruesome videos. However, this collapse threatens our liberal universe as much as certain responses to the refugees. Capital flight and bank fragility are profound dysfunctions in the way the global economy is now organised that will surface as real-world economic dislocation. The IMF is profoundly concerned, warning at last week’s annual meeting in Peru of $3tn (£1.95tn) of excess credit globally and weakening global economic growth. But while it knows there needs to be an international co-ordinated response, no progress is likely. The grip of libertarian, anti-state philosophies on the dominant Anglo-Saxon political right in the US and UK makes such intervention as probable as a Middle East settlement. Order is crumbling all around and the forces that might save it are politically weak and intellectually ineffective.

The heart of the economic disorder is a world financial system that has gone rogue. Global banks now make profits to a extraordinary degree from doing business with each other. As a result, banking’s power to create money out of nothing has been taken to a whole new level... The emergence of a global banking system means central banks are much less able to monitor and control what is going on. And because few countries now limit capital flows, in part because they want access to potential credit, cash generated out of nothing can be lent in countries where the economic prospects look superficially good. This provokes floods of credit, rather like the movements of refugees. The false boom that follows seems to justify the lending. Property prices rise. Companies and households grow overconfident about their prospects and borrow freely. Economies surge well above their trend growth rates and all seems well until something – a collapse in property or commodity prices – unravels the whole process. The money floods out as quickly as it flooded in, leaving bust banks and governments desperately picking up the pieces.

Andy Haldane, Bank of England chief economist, describes the unfolding pattern of events as a three-part crisis.

Act one was in 2007-08 in Britain and the US. Buoyed for the previous decade by absurdly high inflows of globally generated credit that created false booms, they suddenly found their overconfident banks had wildly lent too much. Collateral behind newfangled derivatives was worthless. Money flooded out, leaving Britain’s banking system bust, to be bailed out by more than £1tn of liquidity and special injections of public capital.

Act two was in Europe in 2011-12, when it became obvious that the lending had been made on the incorrect assumption that all eurozone countries were equal. Again, money flooded out and Europe only just held the line with extraordinary printing of money by the European Central Bank and tough belt-tightening measures in overborrowed countries such as Portugal, Greece and Ireland. It might have been unfair, but it worked.

Now act three is beginning, but in countries much less able to devise measures to stop financial contagion and whose banks are more precarious. For global finance next flooded the so-called emerging market economies (EMEs), countries such as Turkey, Brazil, Malaysia, China, all riding high on sky-high commodity prices as the China boom, itself fuelled by wild lending, seemed never-ending. China manufactured more cement from 2010-13 than the US had produced over the entire 20th century. It could not last and so it is proving.

China’s banks are, in effect, bust: few of the vast loans they have made can ever be repaid, so they cannot now lend at the rate needed to sustain China’s once super-high but illusory growth rates. China’s real growth is now below that of the Mao years: the economic crisis will spawn a crisis of legitimacy for the deeply corrupt communist party. Commodity prices have crashed. Money is flooding out of the EMEs, leaving overborrowed companies, indebted households and stricken banks, but EMEs do not have institutions such as the Federal Reserve or European Central Bank to knock up rescue packages. Yet these nations now account for more than half of global GDP. Small wonder the IMF is worried.

The world needs inventive responses. It needs a bigger, reinvigorated IMF whose constitution should reflect the global balance of economic power and that can rescue the EMEs. It needs proper surveillance of global finance. It needs western governments to launch massive economic stimuli, centred on infrastructure spending. It needs new smart monetary policies that allow negative interest rates. None of that is in prospect, vetoed by an ideological right and not properly championed by the left. If there is no will to deal, collectively, with the refugee crisis, there is even less to reorder the global economy. We may muddle through, but don’t bet on it.

[DemReadingDU]

11. For the planet watchers

In the southwest sky, at 7:45pm one can faintly see Saturn to the lower right of the moon, and the star Antares to the lower left of the moon.

In the morning, 75 minutes before sunrise in the eastern sky, one should be able to see Venus, Mars and Jupiter, with Mercury to the lower left of those 3 planets.

[Demeter]

12. Two more Obamacare health insurance plans collapse

Shamelssly stolen from PoliticAverse

Source: Washington Post

Nearly a third of the innovative health insurance plans created under the Affordable Care Act will be out of business at the end of 2015, following announcements Friday that plans in Oregon and Colorado are folding.

In just the past week, four co-ops, as the nonprofit plans are known, have decided or been ordered to shut down. Their demise means that eight of the 23 co-ops in existence a year ago will be unavailable to consumers shopping for 2016 coverage through insurance marketplaces created under the ACA.

Federal health officials have been cracking down recently on many of the plans, warning them that their finances, enrollment or business model needed to shape up. Some state regulators have applied pressure of their own.

But it was a move by the Department of Health and Human Services that the four closing co-ops say was critically destabilizing. HHS announced Oct. 1 that it could afford to pay insurers participating in the federal and state-run exchanges just 12.6 percent of nearly $3 billion they were owed under a temporary provision of the health-care law. Known as risk corridors, it is intended to help cushion insurers that end up with sicker customers and bigger medical claims than they had anticipated.

Read more: https://www.washingtonpost.com/national/health-science/two-more-obamacare-health-insurance-plans-collapse/2015/10/16/cc324fd0-7449-11e5-8d93-0af317ed58c9_story.html


Oct 1 announcement from The Centers for Medicare & Medicaid Services on the risk corridor underpayment:
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-10-1.html

2014 Washington Post article noting that the PPACA neglected to provide a source of funding for the risk corridors:
https://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/05/02/can-hhs-legally-fund-the-acas-risk-corridors/

[kickysnana]

14. Life in these United States

Auntie has been on the same HMO for the last 9 years. It has been awesome. This year the TV news announced that Minnesota did not pick up their contract for 2016 but the HMO was still negotiating with the State. I wait a couple of months, call this week into the MN State Health Information Office to see if the contract had been picked up yet. The gal says "yes that is a go for next year."

That very evening there was another piece on the TV news that repeated a story from the HMO that they were not under contract by the State and were filing a suit. When asked, the State said they had not been served so they had no comment. An interview from the Somali Community said that that HMO was head and shoulders over the others in working within immigrant groups and it was going to be a hardship on them to have to change HMO's and Doctors and they hoped it could be worked out.

This was one of four that offered insurance for people who had both Medicare and MN Medicaid, usually very low income. Two of the other three had satisfaction ratings of just over 50%.

Once again having insurance does not mean you have health care.

[Demeter]

13. Richard Wolff and October Update

[Demeter]

15. Ireland, Accused of Giving Tax Breaks to Multinationals, Plans an Even Lower Rate

http://www.nytimes.com/2015/10/14/business/international/ireland-tax-rate-breaks.html?_r=0

DUBLIN — The Irish government, long criticized by other European countries and the United States for its friendly tax treatment of multinational giants like Apple and Google, on Tuesday announced a move that seemed likely to further incense its critics. Ireland, whose corporate tax rate of 12.5 percent is already one of the lowest in the developed world, said it would cut that rate in half for a new tax category — one covering revenue pegged to companies’ patents and other intellectual property. Companies that could be poised to benefit include Apple, Google, Facebook and Microsoft — all of which have significant operations in Ireland and have troves of intellectual property that might be eligible for the new tax treatment...The new 6.25 percent rate would apply to a tax category that Ireland announced last year, which it calls a “knowledge development box,” and would be put into effect early next year. The category is meant to provide tax breaks for revenue and royalties derived from intellectual property held in a specific country. Other countries, including Britain, Luxembourg and the Netherlands, have created similar tax categories for intellectual property, often in the hope of enticing overseas companies to set up shop in their territories. But critics contend that the royalties paid on intellectual property under such arrangements often do not adequately reflect where the inventions were made or where the innovations generate the most revenue...James Stewart, an associate professor of finance at Trinity College, Dublin, said Ireland’s new approach would probably change the tax strategies of multinational companies — though not for the better. “This is complex, and multinationals love complexity,” he said, “because it allows them to develop tax avoidance strategies. The last thing they want is simplicity.”

Over the last two decades, many American companies — tech giants like Facebook and Google, as well as nontech companies like the drugmaker Pfizer — have established sizable operations in Ireland, primarily to take advantage of the country’s low-tax tradition. Ireland’s corporate tax rates compare with a rate of 35 percent, before deductions, in the United States. But critics say the bigger issue lies in the special tax deals that Ireland made to entice multinational companies to set up operations there. Such deals have led to criticism from some global policy makers, who argue that companies are not paying enough tax...Ireland is by no means the only European country whose corporate tax strategies have come under scrutiny. The European Union has been investigating the tax arrangements between big multinational companies in Luxembourg and the Netherlands, among other places. For many lawmakers and regulators in the 28-nation European Union, particularly in the countries severely affected by the financial crisis, the ability of some companies to move a large share of their European revenue to low-tax member states like Ireland has been viewed as unfair competition and as an encouragement of tax-shopping by multinational corporations. As part of the region’s efforts to increase transparency over where companies pay tax, European officials agreed last week to force individual countries to provide information on preferential tax deals granted to international companies. Ireland’s new rules are meant to comply with that agreement while going even further, Mr. Noonan indicated. He said Ireland was becoming one of the first countries to adopt tax-disclosure and compliance guidelines detailed by the Organization for Economic Cooperation and Development, which represents 34 industrialized democracies. The idea, the Irish government said, is to let its tax officials have a fuller picture of companies that use Ireland as a tax base, to determine whether they are paying their share of corporate taxes in other jurisdictions. Ireland said it would share this confidential information with other countries where the companies operate. In adopting the new knowledge-box category, Ireland says it is trying to eliminate complicated tax structures that have included the so-called “Double Irish” tax provision. That provision, now being phased out, allowed companies with operations in Ireland to make royalty payments for intellectual property to a separate Irish-registered subsidiary. That unit, though incorporated in Ireland, typically had its home in a country that had no corporate income tax, reducing the amount each company had to pay on its Irish-based profits. Eamonn Walsh, an accounting professor at University College, Dublin, said the new approach by Ireland “should end some of the more egregious attempts to channel funds to zero-rate jurisdictions...Companies might decide to cut their losses,” he said, “and opt for the certainty of a 6.5 percent rate in Ireland.”

Tax officials in the United States have criticized Ireland’s arrangements. But the issue is particularly sensitive in Europe, where many countries are still struggling. Tax experts say national governments are eager to tap into new sources of income, especially as many of the large American tech companies have continued to post record profits despite the recent global economic uncertainty. In countries including France, which is perceived by some industry executives as taking a harsh line against American tech companies, politicians have called on companies like Google to pay taxes on their local operations, instead of only in Ireland, where the company has its European headquarters. In response, tech companies typically say that they conform with the tax laws in every country where they operate. Yet, in a sign that some national lawmakers are starting to clamp down on companies’ often-complicated tax structures, countries are changing their local regulations to force companies to pay more tax. In Britain, for example, politicians recently passed a so-called Google Tax that requires companies to pay a certain level of tax on their operations there, even though their headquarters are elsewhere for tax purposes. And in May, Amazon, the e-commerce giant, announced that it would pay taxes in a number of European countries where it has large operations, instead of funneling nearly all of its sales through Luxembourg, which has comparatively low taxes.

United States congressional investigators said in 2013 that Apple had created a web of international subsidiaries, some in Ireland, to move at least $74 billion from 2009 to 2012 beyond the reach of the Internal Revenue Service. Apple has denied wrongdoing and says that it pays appropriate levels of tax in the countries where it operates. The European Commission, the executive arm of the European Union, has been investigating whether the Irish government gave Apple illegal subsidies through a preferential tax settlement. The investigators, who are still conducting their inquiries, criticized Irish officials for giving Apple unlawful so-called state aid in the form of tax breaks. Such special deals, according to a 21-page report published last year, created unfair advantages for Ireland over other European countries. The Irish government may eventually be forced to collect back taxes from Apple. A separate investigation is looking at whether Luxembourg broke Europe’s tough state-aid rules by offering similar preferential treatment to Amazon, whose European headquarters are there. Yet while European Union officials have applauded these efforts, lawmakers in some countries, particularly those that have used low corporate taxes to entice global companies to their shores, have complained that they will not be able to compete against bigger countries if they cannot use tax incentives to attract new investment from international businesses. Ireland’s corporate tax rates may be low by international standards, but the revenue they generate is a major contributor to the country’s Treasury. In 2014, Ireland’s total tax take was 41 billion euros, or $46.6 billion, and corporate tax accounted for 11 percent of the total.

[Demeter]

16. An "Average" Cyber Crime Costs a U.S. Company $15.4 Million

http://www.forbes.com/sites/moneybuilder/2015/10/17/an-average-cyber-crime-costs-a-u-s-company-15-4-million/

The cost of cyber crime is skyrocketing. A new study shows a cyber crime incident in the United States costs a company an average of $15.4 million, an increase of 19%. Cyber crimes in the United States are much costlier on an average basis than any other country surveyed. In fact, the average cost of a cyber crime incident throughout the world is $7.7 million. Germany had the second highest average, with Japan third. Not only are the costs rising, the number of successful attacks have also increased 46% in the past four years. In 2012, companies faced 68 security breaches. In 2015, that number has climbed to 99 breaches.

For consumers, one of the most troubling statistics is that it can take up to 46 days for companies to resolve security incidents. This is up from 14 days in 2010 and represents a 229% increase. This is concerning, especially if the crime involves your personal, financial or credit card information. The study was conducted by the Ponemon Institute and Hewlett Packard Enterprise Security. It examined 252 companies in seven countries. The study found the most expensive types of attacks include:

Malicious insiders: $145,000
Denial of service: $127,000
Web-based attacks: $96,000
Phishing: $86,000
Malicious code: $82,000

The study offered advice on how companies can reduce losses and save money. They include:

Data encryption and protection that will reduce vulnerabilities.
Security Information and Event Management (SIEM), which can shorten the amount of time it takes to detect and resolve attacks.
Security governance that includes more executive commitment, more expertise, and better processes.
An intrusion prevention system and next-generaton firewalls.

Combined, these changes can save companies up to $1.9 million annually.

[Demeter]

17. Wall St. closes up, registers third week of gains

http://www.reuters.com/article/2015/10/16/us-markets-stocks-idUSKCN0SA1BJ20151016?feedType=RSS&feedName=businessNews

...The Dow Jones industrial average .DJI rose 74.22 points, or 0.43 percent, to 17,215.97, the S&P 500 .SPX gained 9.25 points, or 0.46 percent, to 2,033.11 and the Nasdaq Composite .IXIC added 16.59 points, or 0.34 percent, to 4,886.69.

For the week, the Dow rose 0.8 percent and the Nasdaq gained 1.2 percent, both also registering a third week of gains, while the S&P 500 was up 0.9 percent.

Forecasts for S&P 500 earnings improved slightly as more companies reported results. Third-quarter earnings are now expected to have fallen 3.9 percent, compared with Monday's forecast for a decline of 4.8 percent, according to Thomson Reuters data...

[Demeter]

18. Coal Baron’s Trial May Hinge on His Secretly Recorded Conversations

http://www.nytimes.com/2015/10/17/us/coal-barons-trial-may-turn-on-his-secretly-recorded-conversations.html

Back when he was one of the most powerful and feared men in West Virginia, before a coal mine explosion killed 29 of his employees and exposed his company’s shoddy safety record, Donald L. Blankenship was seen as an arrogant, micromanaging bully. Even his lawyer says he was “rude and insulting.”

But in the end, another of his qualities — his penchant for secretly recording his own conversations — may help bring Mr. Blankenship down.

Mr. Blankenship is the former chairman and chief executive of Massey Energy, whose Upper Big Branch mine became, in April 2010, the site of the nation’s deadliest coal mining disaster in nearly 40 years. Now on trial in federal court here, he is the first coal baron ever to face criminal charges — the central character, prosecutors say, in a historic case of conspiracy to flout health and safety laws in pursuit of profits.

Defense lawyers say they will prove that Mr. Blankenship was deeply concerned with mine safety, and that he had committed no “willful violations” of safety laws, as the government asserts...

[Demeter]

19. What Could Raising Taxes on the 1% Do? Surprising Amounts

Last edited Sat Oct 17, 2015, 10:18 AM - Edit history (1)

http://www.nytimes.com/2015/10/17/business/putting-numbers-to-a-tax-increase-for-the-rich.html


...All the Republican tax proposals, in fact, cut taxes for the wealthiest Americans. Democrats, on the other hand, are prepared to raise taxes at the top, though they have not been very specific about how they would do so...Given the gains that have flowed to those at the tip of the income pyramid in recent decades, several economists have been making the case that the government could raise large amounts of revenue exclusively from this small group, while still allowing them to take home a majority of their income...It is “absurd” to argue that most wealth at the top is already highly taxed or that there isn’t much more revenue to be had by raising taxes on the 1 percent, says the economist Joseph E. Stiglitz, winner of the Nobel in economic science, who has written extensively about inequality. “The only upside of the concentration of the wealth at the top is that they have more money to pay in taxes,” he said.

The top 1 percent on average already pay roughly a third of their incomes to the federal government, according to a Treasury Department analysis that takes into account the entire menu of taxes — including income tax, payroll taxes that fund Medicare and Social Security, estate and gift taxes, excise and custom duties as well as investors’ share of corporate taxes. The tax bite on the top 0.1 percent is a bit higher. Most of those taxpayers insist they are already paying more than enough.

By comparison, the band of taxpayers right below them, in the 95th to 99th percentile, pay on average about $1 out of every $4. Those in the bottom half pay less than $1 out of every $10.

SEE TABLE AT LINK

Sidestepping for the moment the messy question of just which taxes would be increased, how much more revenue could be generated by asking the rich to pay a larger share of their income in taxes? To get the most accurate picture possible, throw in all the scraps of income, from the most obvious (like wages, interest and dividends) to the least (like employer contributions to health plans, overseas earnings and growth in retirement accounts). According to that measure — used by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution — the top 1 percent includes about 1.13 million households earning an average income of $2.1 million.

Raising their total tax burden to, say, 40 percent would generate about $157 billion in revenue the first year. Increasing it to 45 percent brings in a whopping $276 billion. Even taking account of state and local taxes, the average household in this group would still take home at least $1 million a year. If the tax increase were limited to just the 115,000 households in the top 0.1 percent, with an average income of $9.4 million, a 40 percent tax rate would produce $55 billion in extra revenue in its first year...

GO BERNIE! LET THEM FEEL THE BERN!

[Demeter]

20. Sorry to be so AWOL this Weekend

Things are going badly chez Demeter what with the Kid being sick and the winter closing in so suddenly. It looks like it's going to be a bad winter, too.

Autumn has been dry (hence, the leaves are not being pounded down and the colors are glorious). But if winter is started, and it seems that way (it visibly snowed, twice, on Saturday: once at 11:30, and once during the third quarter--a few bits of what might more properly be called sleet, but still, it's 2 weeks before Halloween! It's not supposed to do that!)

Ah, yes, the game...the game was...peculiar. The referees seemed to be operating with two sets of rules, one for UofM and the other for MichState. The crowd, already inflamed by rivalry, was in near mutiny by the flash finish. I'm not expert on football, and have only a bare-bones understanding of the game, and it sure looked odd to me. Among other things, the referees' constant turmoil meant the game lasted another hour and it was quite dark by the time we got to the car to go home...

It's very odd for a person like me, who avoids crowds on principle, to go to a mass event. And this time in particular, nobody would sit down. The man next to me stood in front of me practically the whole game blocking my view both of field and Jumbotron, or whatever the big screen is called...at least we didn't freeze. I have a bit of sunburn from when the sun shone, on what little was exposed to the wind.

The helicopters kept circling the stadium...and there was a huge police presence. I guess, when the opposing team lives within driving distance and has a rowdy reputation, one can't be too careful. My client enjoyed it, regardless. Since she has a foot in both schools, she won either way. Since I have a foot in neither, I didn't much care. I would have liked to be able to see more of it, though.

Over 111,000 people all crammed into the stadium. Both bands were huge, but the sound didn't carry well and the shapes were rather abstract. All in all, it was a bit shifted off-normal.

[DemReadingDU]

21. Really Big game is Nov 28, Ohio State vs Michigan in Ann Arbor

So you had a preview what is coming.

I can't imagine going to a football game, too cold. Seems winter is here now, only 27 this morning. Brrrr.



Stay well, you just were sick.

[Demeter]

22. I only go to one game a year (mercifully!)

I am escorting a client whose family has season tickets, and she gets one game out of it.

I wouldn't want to go to Ohio State game, for sure. aside from the fact that it's the end of November, the rivalry is dangerously high all the time.

I'd stay healthy if the Kid did. She's sneezing her head off again.

[Demeter]

23. Capitalism and Its Regulation Delusion: Lessons From the Volkswagen Debacle By Richard D. Wolff

http://www.truth-out.org/news/item/33250-capitalism-and-its-regulation-delusion-lessons-from-the-volkswagen-debacle

Volkswagen (VW), we now know, systematically evaded pollution control regulations. Over the last decade it defrauded 11 million buyers of its diesel-engine vehicles, fouled the planet's environment and thereby damaged the health and lives of countless living organisms. Regulation-defeating deception gave VW diesel autos competitive advantages over other companies' diesel products and thereby enhanced its profits, the driving purpose of capitalist corporations. VW's massive evasion was hardly the only socially destructive mockery of regulation. Ford and other auto companies had earlier done the same as Volkswagen, gotten caught and paid fines. Other auto companies have not yet been caught, but similar evidence has surfaced about diesel vehicles produced by Mercedes-Benz, Honda, Mazda and Mitsubishi. Exposures and punishments, if and when they occur, clearly fall far short of dissuading major capitalists from evading regulations. Thus, we now know that General Motors and Toyota did not follow regulations recently requiring notification of government agencies after crashes, injuries and deaths associated with ignitions and airbags, respectively.

As products using computer devices increase, they spread opportunities for similar evasions of regulations. New mechanisms have enabled electrical appliance makers to falsify regulated energy-use tests. Capitalist competition and profit were motivators in these and many other regulation evasions too. The problem is endemic, for example, in the food and drink industry. Since 2008's global capitalist crash, the world has learned of parallel failures of financial regulation with horrific social consequences. Nor is the failed relationship of capitalism and regulation only a US problem; it is global.

The histories of countries where capitalism prevails illustrate an endless cycle of industrial misdeeds provoking the usual struggles over regulation, the profitable delays in achieving regulations followed by profitable evasions of those regulations. Often - as with smoking, genetically modified organisms, lead additives to fuel, etc. - the cycle in one country functions as prelude and provocation to the cycle's nearly identical repetition in another.

...Regulation thus represents an enduring delusion (much like taxes on profits that show parallel histories of corporate opposition and evasion)...

I'M NOT SURE ANY OTHER SYSTEM WOULD PRODUCE BETTER RESULTS, UNFORTUNATELY. IT IS A HUMAN PROBLEM, NOT FIXABLE.

The fundamental contradiction between capitalism and regulation can only be overcome if profit and competition stop functioning as the drivers and standards of enterprise success. They must be demoted to become no more than two among many dimensions of enterprise to be considered in reaching the key decisions about what, how and where to produce and what to do with enterprises' net revenues. Likewise, the decision-makers need to be changed from the capitalist norm. Instead of the tiny minority (major shareholders and the boards of directors they choose) making all the key enterprise decisions, decision-making needs to be democratized. Enterprise decisions need to be made conjointly by all enterprise participants and by residents of communities that interact with the enterprises (much as political decisions in those communities must likewise be made conjointly). The resulting decisions will reflect and serve the working and residential communities. No longer will they serve and reflect primarily the tiny minority that now governs the economy so undemocratically. Then the conditions will be in place to support production and regulation operated by and for the same communities. The notion of government by, of and for the people will finally have acquired its necessary economic basis, as capitalism joins its predecessor economic systems (slavery, feudalism, and so on) as part of the past.

IT'S WORTH TRYING

[Demeter]

24. AS LONG AS IT'S OTHER POEPLES' DEATHS

[Demeter]

27. TRUMP U!

https://s.yimg.com/uu/api/res/1.2/OWefuV6N6fDz1XSi1BlfKw--/YXBwaWQ9eXRhY2h5b24-/

[Demeter]

25. US Electricity Generation Fell for the Fourth Straight Week

WHAT GIVES?

http://finance.yahoo.com/news/us-electricity-generation-fell-fourth-130518477.html

Electricity generation

The EEI (Edison Electric Institute) publishes electricity generation data weekly. The current report is for the week ending October 2. US electricity generation fell to 73.7 million mWh (megawatt-hours) for the week ending October 2—a 2.9% fall from the previous week’s 75.9 million mWh.

However, the week’s electricity generation was marginally higher than the 73.2 million MWh reported during the same week in 2014.

http://l3.yimg.com/bt/api/res/1.2/PvneEN71KKXqNvTP76P18g--/YXBwaWQ9eW5ld3NfbGVnbztxPTg1O3c9MzAw/?w=300&h=220&fit=max&auto=format

Why is this indicator important?

More than 90% of the coal produced in the US is used for electricity generation. The power utility segment is coal’s largest end user. As a result, coal and utility investors should watch electricity generation trends.

Electricity storage is expensive, so most produced electricity is consumed right away. As a result, electricity generation mirrors consumption.

What does this mean for coal producers?

Thermal coal is used mainly for electricity generation. Everything else being equal, a fall in electricity generation is negative for coal producers (KOL) like Peabody Energy (BTU) and Cloud Peak Energy (CLD). In addition, coal is losing market share to natural gas in the current low natural gas price environment. Weekly generation levels are subject to seasonal deviations. The impact on utilities (XLU) like NextEra Energy (NEE) and Southern Company (SO) depends on the regional breakdown of electricity generation. We’ll take a look at this in the next part of this series...

[Demeter]

28. Why 75% of electric-car buyers don't buy electric cars

http://www.cnbc.com/2015/10/17/why-75-of-electric-car-buyers-dont-buy-electric-cars.html



A smartphone on four wheels is the market mentality of electric-vehicle (EV) buyers, who overwhelmingly continue to lease rather than buy EVs.

Excluding Tesla, lease penetration in the EV market is 75 percent in 2015 (it was above 80 percent in 2013 and 2014). In 2011, leasing represented just 27 percent of the market. (Because Tesla does not use a traditional dealership model, its leasing data is not shared with auto industry trackers like Edmunds.com.) Leasing penetration in the EV market is far higher than in the car market overall. Leasing penetration across all cars is at 28 percent. In the luxury-car market, where leasing is much more common, leasing penetration is at 49.5 percent, according to Edmunds.com.

The range on most EV models is so low — less than 85 miles per charge, excluding Tesla's Model S — and the technology accelerating so quickly, that it does not make sense to make a long-term commitment, creating a scenario much like wanting to upgrade your smartphone every two years. Battery technology continues to improve for year-to-year model editions. The range of EV batteries has improved by about 5 to 10 miles per year, according to ChargePoint, an EV charging station infrastructure company. Within the next couple of years, it expects to see mid-priced EVs with a 200-mile range.

Manufacturers know this and offer attractive leases....DETAIL AT LINK

[Demeter]

26. What Happened to Working Women? GAIL COLLINS

http://www.nytimes.com/2015/10/17/opinion/what-happened-to-working-women.html

Japan now has a higher proportion of working women than we do. I’m trying to get my head around this fact.

“Everyone else is continuing to rise and we’ve declined, and now we’re basically tied with Japan. And Japan’s on the upswing and we’re still going down,” said Jason Furman, chairman of President Obama’s Council of Economic Advisers. He was pointing to a chart that shows women in the labor force in 24 countries. These are the usual suspects when we’re comparing ourselves to other societies — Australia, Belgium, Canada, etc.

“When it came to women in the workplace, the United States used to be seventh. “And now we’re 20th,” said Furman in a phone interview. You’ll be happy to know that while Ireland also seems to be closing in on us, it’ll be a hell of a long time before we fall below Turkey.

Stick with me for a minute on this. We spend half of our national debate time talking about how economically fragile Americans feel. Why do you think that is? Well, there’s the whopping disproportion of national wealth flowing into the pockets of the already-wealthy. And the plummeting power of labor unions....And why do you think this is happening? One of the reasons is clearly, positively, absolutely the cost of child care. It’s incredible that we’ve built a society that relies on women in the labor force yet makes no discernible effort to deal with this problem...You may be stunned to hear that while the Republicans talk endlessly about ginning up the American economy, the idea of helping working mothers stay in the labor force does not come up all that often. Although Ben Carson has described preschool as “indoctrination.”


YEAH, WELL, THIS IS AMERICA....WE DO EVERYTHING THE WORST, MOST EXPENSIVE, HARDEST WAY POSSIBLE

[Demeter]

29. If you sensed something off about the story of the woman who sued her nephew, you were right

http://qz.com/526941/if-you-sensed-something-off-about-the-story-of-the-woman-who-sued-her-nephew-you-were-right/?utm_source=YPL

Earlier this week, Jennifer Connell was called the “Aunti Christ” for bringing a $127,000 lawsuit against her 12-year-old nephew for breaking her wrist with his enthusiastic hug. #Auntfromhell started trending on Twitter, and Connell was publicly vilified for blaming an innocent child.

But her lawsuit makes perfect sense from a legal standpoint, and it seems those who rushed to judge have more to feel guilty about than Connell herself. Tom Baker, law professor at Pennsylvania University, tells Quartz that the lawsuit is “entirely routine” and “unremarkable.” He explains that, although Connell was suing her nephew, any compensation would have been paid by liability insurance–as is the case with most tort lawsuits in the United States. Connell has said that she needs the compensation to pay for medical bills, and that the insurance company only offered $1 compensation before the lawsuit. Her law firm, Jainchill & Beckert, said in a statement, “Our client was never looking for money from her nephew or his family. It was about the insurance industry and being forced to sue to get medical bills paid.”

Baker says that, though he doesn’t know the details of Connell’s situation, it seems likely that she needed to bring a lawsuit because her health insurance didn’t cover the cost of her medical care. He adds:

One of the main things that predicts whether someone brings a lawsuit is whether they have medical needs that are not met by their health insurance. When I hear about it, I don’t think ‘That terrible greedy aunt’. I think, ‘She probably didn’t get all her health expenses paid’. You might say that’s the real problem.

Connell has said it was “heartbreaking” to be publicly attacked by so many strangers. “It was a complete shock to me. It was amazing how I walked into court that morning and walked out all over social media,” she said in an appearance on the TODAY show. Though Connell’s lawsuit may seem odd to those outside the legal profession, Baker says that she does not deserve such aggressive criticism. “It does seem unfair to me. I think it reflects the rush to judgment and vilify people on Twitter,” he says....

I REST MY CASE ABOUT HARDEST AND MOST EXPENSIVE...

[Demeter]

30. BERNIE SANDERS ASKS FOR YOUR HELP ON SOCIAL SECURITY!

[Demeter]

31. This Congressman Thinks We Can Fix The Economy By Drinking Beer

WARNING: BEER IS ONLY A TEMPORARY FIX--NO MATTER WHICH PROBLEM YOU APPLY IT TO...
AND IT IS SELF-LIMITING, TOO, AS OPPOSED TO BEING AN ORGANIC GROWING SOLUTION...

http://www.huffingtonpost.com/entry/peter-defazio-craft-beer_56215319e4b0bce34700aa00?ir=Business&section=business&utm_hp_ref=business



If you want to help the American economy, you should drink more fancy-pants beer, according to Rep. Peter DeFazio (D-Ore.).

"One of the great things about drinking craft beer is you're helping deal with our trade deficit," DeFazio told HuffPost. "American-made American product, homegrown, as opposed to all these other beers, which are foreign-owned and you're contributing to our trade deficit every time you drink one."

DeFazio was drawing a contrast between local breweries and the cheap, crappy swill of big-name brands such as Miller and Budweiser. (Cheap, crappy beer is objectively superior to fancy-pants craft beer, your host contends.) DeFazio -- a founding member of the House Small Brewers Conference -- is, of course, just having some fun. He isn't quite right on the technical merits of his economic case, but he seems to be correct in spirit (pun intended). Even though Miller and Anheuser-Busch are owned by foreign conglomerates, High Lifes and Buds are still brewed and bottled stateside. Those bottles aren't imports, and thus don't affect the trade deficit at all. But drinking foreign-owned beer does have an effect on the current account deficit -- another measure of international trade flows. The share of the profits from Miller and Anheuser-Busch that leave the country have a small negative effect on that metric, while domestically owned craft breweries that keep all of their profits in the U.S. do not.

Theoretically, running big current account deficits can harm the economy. Many economists believe doing so can lead to long-term drags on growth and financial dysfunction. If other countries hoard the dollars they receive, it can drive up the relative value of U.S. currency, which sends domestic manufacturing jobs abroad.The U.S. has been running a relatively large current account deficit for decades. But this is mostly an issue with countries that do huge amounts of trade with the United States, such as Japan and China. Anheuser-Busch InBev, which owns Budweiser, is a Belgian-Brazilian conglomerate, while SABMiller is a South African company.

To sum up: If you are partial to cheap, crappy beer, then you don't have to feel bad about the trade deficit any more than your snooty craft beer friends. They can, however, troll you on the current account deficit. You're kind of hurting America, even though I toast your taste in beer.

It may or may not help, but we're going to give it our all.

THAT'S THE SPIRIT!

[Demeter]

32. i'M GOING TO TRY TO MAKE USE OF THE SUNSHINE

It's cold again, but no frost last night. Snow was predicted for 50 miles west of here...more little sleet sprinkles, no doubt. it's too dry to snow properly.

Have a safe week, and Go Blue!