Wednesday, July 30, 2008

A Shortage of Lawyers

Here is a situation that Shakespeare might appreciate. A shortage of lawyers is plaguing Japan. Really? A New York Times article seems to suggest that.

One regression estimates that the optimum number of lawyers is 23 per 1000 workers. The U.S. has 38; Japan, 20; Germany, 27; France, 7; Hong Kong, 7; U.K., 12; Spain, 33; India, 34; Chile, 47.

Stephen P. Magee and William A. Brock. 1984. "The Invisible Foot and the Waste of Nations: Redistribution and Economic Growth." in David C. Colander, ed. Neoclassical Political Economy: The Analysis of Rent-seeking and DUP Activities (Cambridge, MA: Ballinger): pp. 177-85.

According to an estimate during the 1980s, lawyers constitute 42% of the House; 61% of the Senate.

Here is the article:

Onishi, Norimitsu. 2008. "Lawyers in Rural Japan: Low Supply, Iffy Demand." New York Times (29 July).

The article describes the arrival of a lawyer, Katsumune Hirai, to Yakumo, a northern Japanese town, population 19,743, had never had a lawyer before. Few people seem interested in his services.
Japan, in contrast to the United States, has long suffered from a shortage of lawyers, especially in the countryside. If it was not unusual for towns with five times Yakumo's population to have no lawyer, how could Yakumo hope to secure one just for itself? And yet, thanks to a national campaign to raise the number of lawyers, and to dispatch them to lawyerless corners of Japan, Yakumo welcomed its first one in April. The Yakumo Legal Office opened shop, behind gray blinds and under blue awnings, in the square facing the train station.

... half of Japan's lawyers are concentrated in Tokyo, leaving only one lawyer for every 30,000 Japanese outside the capital, according to the federation. The Japanese government is trying to increase the number of lawyers as part of broader judicial reforms that have included establishing 74 law schools since 2004. Under the system that will be abolished in 2011, anyone could take the national bar exam, though it was so difficult that the annual pass rate was about 3 percent.


by the Sandwichman

I intend to write more about Ira Steward's eight-hours theory when my move to the house on the hill is complete. Meanwhile, I had suggested some readings by and on Steward in response to a comment by YouNotSneaky and I'm moving those up to this blog post. YNS pointed out a good overview of Hours of Work in U.S. History by Robert Whaples in the EH.Net Encylopedia.

Ira Steward poses a challenge of isolating and reconstructing the usable kernel of his argument. He wrote propaganda. George Gunton, his 'disciple', also wrote propaganda. That was fair enough considering that most of the reputable political economists of the day essentially wrote propaganda from the employers' side.

I would recommend reading Steward with some context. A good place to start is Dorothy W. Douglas's "Ira Steward on consumption and unemployment" in the Journal of Political Economy, August 1932. Henry Mussey's 1927 essay, "Eight-hour theory in the American Federation of Labor" (in Economic Essays, edited by Jacob Hollander) is sympathetic but critical. Reading Mussey's essay in juxtaposition to Douglas's is instructive because they fall on opposite sides of the stock market crash and start of the depression. Different "consensuses" are evidently in play.

Steward's tract, "A reduction of hours an increase of wages" is available through Google Books and also through the Internet Archive in John R. Commons' Documentary History of American Industrial Society. George Gunton produced a more systematic exposition of Steward's theory in his 1889 pamphlet, "The economic and social importance of the eight-hour movement", which can be found in the anthology, Wages, hours and strikes: L
labor panaceas in the 20th century, (edted by Leon Stein and Phillip Taft).

A couple of more contemporary discussions of Steward are Lawrence Glickman's "Workers of the world, consume" in International labor and working class history Fall, 1997, and David Roediger's "Ira Steward and the anti-slavery origins of the American eight-hour theory, Labour History, 1986.

A couple of points I would like to make about Steward, Gunton and their interpretors. First, Steward's theory appeared without a frame or, more accurately, outside of and in opposition to the frame of classical political economy and its wages-fund theory. There are loose ends in it that I suggest could be resolved within a Keynesian frame. Keynes himself alluded to the possibility of such a reconciliation in his war time remarks on the reduction of working time as the "ultimate solution" to unemployment. Second, no one has ever re-evaluated Steward's theory in the light of Chapman's theory of the hours of labor. I strongly believe that a reconciliation of Steward, Chapman and Keynes (throwing in Luigi Pasinetti for good measure) is feasible and would be extremely invigorating for heterodox economic thought.

Neoliberal “freedom” = Government coercion, violence. The non-market.

In the last few decades many individuals and politicians, with rather privileged access to global mass media outlets[1], have spread an ideology of political persuasion known as ‘neoliberalism’ or ‘neoconservatism’. It has been confused by many – and it seems that this confusion may be deliberate[2 ] - as the simple reiteration of ‘liberalism’ [3 ]. However, critiques of neoliberalism indicate that this doctrine focuses on only one aspect of the traditional liberal doctrine – that of ‘economic liberalism’ which is the belief that “states ought to abstain from intervening in the economy, and instead leave as much as possible up to individuals participating in free and self-regulating markets.” [4 ]

How strange! This doctrine has emerged at the very time when the evidence for the effectiveness of ‘self-regulation was virtually non-existent and after governments gave birth to the giant corporation with heavy-handed protectionist approaches. It was promulgated when a large body of economic literature showed that industry in developed nations had become extraordinarily concentrated and was exerting undue political influence over and within governments. Environmental scientists, independent journalists and even the Secretary General of the United Nations were warning that nations had a very limited amount of time “to improve the human environment, to defuse the population explosion and to supply the required momentum to development efforts” before planetary problems would reach “such staggering proportions that they will be beyond out capacity to control.”[5 ] If there was ever a time for governments around the world to reign in the excesses of industrial pollution, wasteful production methods and excessive and unnecessary consumption it must surely have been the last 30-40 years.

For all the incessant talk of freedom and markets the reality on the ground is that governments are fully in league with large transnational corporations and both have moved not to foster market relations but to actually prevent ordinary citizens from engaging as producers and sellers in markets.

This has been done through forced evictions [6] , a mountain of new regulation, tax privileges and resource agreements that allocate almost an entire region’s forests, water, land etc to only a select few enterprises. In Australia, for instance, the Federal Liberal and Labor governments have encouraged investors to put their money into a small number of selected corporations that are engaged in the clearfelling and woodchipping of huge stands of government-granted native forest. Forests that have been taken out of the hands of the public through the passing of ‘resource guarantee’ legislation where citizens and every other unselected enterprise (almost every one) are banned from the purchase and access to forest resources. ‘Managed Investment Schemes’ (MIS) are the tool used by government to redirect economic resources away from viable and sustainable forms of business. Those investors with capital gains that need to be offset are “generally driven into MIS by their tax deductibility - you put in $100,000 and you get $100,000 of deductions against other income” [7 ]

The biggest native forest woodchipper in Tasmania is Gunns Ltd. Two of its major investors are the AMP (Australian Mutual Provident) Society and Perpetual Investments. Both companies have links with the Fairfax [8 ] and Murdoch [9 ] media empires. Rupert Murdoch’s ‘News Corporation’ is one of the three largest international media groups, operating in most sectors and most continents. Are these media organisations using their investments to access a very cheap source of newsprint for their publications? The question has to be asked.

I believe that a careful unraveling of the corporate networks involved in Tasmania’s contemporary environmental holocaust[10 ] [11] need to be performed. Will such research reveal a host of transnational corporations co-owned by each other? Will we find that these entities are, in effect, exchanging goods between their own enterprise both within Australia and, by way of intra-corporate transactions, across national boundaries? If so, we cannot view this as even a form of trade [12] ; it is all ‘in-house’. They will be seen simply to be using cheaply or freely acquired public resources, with government granted exclusion of competitors from the market place to take advantage of the most extraordinary profit-making opportunities in history. How convenient it appears to be, to use these inaptly entitled ‘free trade’ agreements that allow for avoidance of tariffs along with the employment of a host of other questionable mercantile mechanisms.

‘Market’? ‘Freedom’? ‘liberalism’? Will we find any of those? I doubt it.

[1] Money and power are now sustaining global media concentration. This poses serious questions about the state of democracy in nations.

[2] One of the innumerable examples is Ronald Reagan stating in his speech at Moscow State University on May 31, 1988: “Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States. They are the prime movers of the technological revolution.”

This was said at a time when a vast literature was well established warning of the dangerous levels of economic concentration in the US and the implications for political influence/policy setting priorities in Government. Further most of the most successful companies and countries of the 20th century did not develop according to free-market principles; successful countries protected and nurtured their industries.

[3] Liberalism.

[4] What is Neoliberalism? By Dag Einar Thorsen and Amund Lie, Department of Political Science University of Oslo

[5] UN Secretary General U Thant in 1969.

Social and Economic Rights Action Center (SERAC). Late 2007

[7] Investors wield the axe as Futuris blames forest scheme for downgrade
Ian McIlwraith, June 26, 2008.

[8] Sir James Reading Fairfax was a founder and director of the Perpetual Trustee Co. and a director of the Australian Mutual Provident Society the Bank of New South Wales, the Commercial Banking Co. of Sydney and Burns, Philp & Co. Ltd. Other members of the Fairfax family past and present have been directors of AMP.

[9] Australia's AMP lets Murdoch off the hook over News Corp. relocation.

[10] Paradise lost - with napalm,,1197159,00.html

Australian Broadcasting Corporation

[12] It’s NOT International Trade. Don’t be Fooled. By Brenda Rosser on 24th July 2008.

Tuesday, July 29, 2008

The Military Basketball Complex

Because of the Tim Donaghy gambling scandal, the NBA hired Army Maj. Gen. Ronald L. Johnson as senior vice president of refereeing operations. He is uniquely suited to the job because he was responsible for overseeing $18 billion of reconstruction in Iraq.

Monday, July 28, 2008

Another Nice Review of The Confiscation of American Prosperity

The Crime of the Century

Michael Perelman, The Confiscation of American Prosperity: From Right-Wing Extremism and Economic Ideology to the Next Great Depression. Palgrave Macmillan. 239 pp.

Economist Michael Perelman has written a whodunit about a heist, but not just any heist. His new book dissects the grandest bit of thievery in modern human history, the robbery that snatched away the economic security of the great American middle class and made America’s rich the richest rich the world has ever seen.

How did all this happen? Perelman takes us back to the initial crime scene, the United States of the early 1970s, a society then completing a quarter-century of unparalleled prosperity. Most Americans had shared in those good times. Most expected them to continue.

But not everyone felt that way. Corporate America’s movers and shakers, back in the early '70s, sensed a world spinning out of — their — control. They feared marketplace challenges from abroad. Western Europe and Japan had rebuilt their war-torn economies. They also feared challenges at home, from social activists and angry workers. Even consumers were organizing.

Corporate leaders, amid these challenges, panicked. They rejected the basic assumption behind America's good times, that balance in economic life — and prosperity for all — requires an active role for trade unions and government regulators. Corporate leaders would instead link up with radical conservatives and help speed what Michael Perelman calls a “right-wing revolution.”

That revolution would rewrite the nation’s economic rules and leave in its wake a deeply and ferociously unequal United States.

Michael Perelman names names as he fills in the outline of this broad sweeping story with intriguing detail on who did what when. He introduces us, for instance, to Lewis Powell, the corporate lawyer — and future Supreme Court justice — whose 1971 memo for the U.S. Chamber of Commerce rallied the nation’s power-suits to rise up and “save” free enterprise.

“Each time the United States has increased income inequality,” author Perelman reminds us along his story-telling way, “disaster has followed.”

And disaster, Perelman notes, will surely follow our contemporary right-wing revolution. Perelman explains why, patiently laying out how top-heavy distributions of wealth deflate broad-based consumer demand, pump up speculative asset bubbles, and invariably invite a “culture of corruption.”

Perelman ends his whodunit with a look at “the presumptive cops” on the beat, his fellow economists, the academics who could have and should have blown the whistle on the right-wing’s frontal assault on American prosperity. They did not. Michael Perelman has. More power to him.

Tom Coburn

The New York Times has an article today about Tom Coburn, a right-wing, antiabortionist, ultraconservative, probably wingnut.

Coburn makes a practice of putting folds on legislation techniques that needs with this disapproval. Where was the Democratic senator who hold the spying bill or war funding?

I do not know if he has strong principles or if he is just playing to his conservative constituency, but I wish that the Democrats have somebody with a tenacity to do something other than to cower before the right-wing.

The vital gore

I spent the better part of the weekend with the wonderful Gore Vidal - reading the new selection of his essays by Jay Parini. I had forgotten how brilliant his take-down of the Kennedys, "The Holy Family," was. The comparison of JFK and BO has often been made - let's hope it is wrong. In Vidal's account, JFK's charisma masked as ambitious a politician as ever walked the earth, whose only principle was to to get to the top and who, once there, had no idea what to do.

Did you know - as I learned in his essay on William Dean Howells - that Howells was alone among the literary intelligentsia of the day in condemning the trial and execution of the Haymarket Martyrs? Conspicuously silent was Samuel Clemens, sad to say - who knew better.

Saturday, July 26, 2008

Looking Ahead Toward the Housing Crisis.

After decades of relative stability, the rate of U.S. homeownership began to surge in the mid-1990s, rising from 64% in 1994 to a peak of 69% in 2004, near which it has hovered ever since . . . [S]ome of the explanation likely stems from innovations in the mortgage market that resulted in greater access to credit, lower down payment requirements, and easy and low-cost access to the equity in a house, which makes homeownership more attractive.

Doms, Mark and Meryl Motika. 2006. "The Rise of Homeownership." Federal Reserve Bank of San Francisco Economic Letter (3 November).

Thanks to an old Timothy Taylor column in the Journal of Economic Perspectives

Obama Sweeps the World, but McCain Moves Ahead of him Colorado Polls: What Gives?

So, Obama has had a nearly flawless foreign trip, which he clearly needed to make given the drumbeat of criticism about his "inexperience" from the McCain camp. It went better than anybody could have expected, with such bonuses as Iraqi PM al-Maliki coming out for his withdrawal timetable, that huge and favorable crowd in Berlin waving US flags for his thoughtful and charismatic speech, and even that shot through the hoop from behind the three-point line on the first try before cheering troops in Kuwait. Meanwhile, McCain was making gaffe after gaffe while visiting such outstanding places as the Fudge Haus in the German Village in Columbus, OH (yes, I know, swing city in a swing state), with almost nobody in attendance. But here we get it: McCain is now two points ahead of Obama in the latest polls out of Colorado after Obama being ahead of McCain for months, and reports have McCain making gains in Minnesota, Wisconsin, and Michigan as well, enough so that he might be ahead in MN if he picks Pawlenty for VP and ahead in MI if he picks Romney for it. So, what gives?

Probably the best explanation is that this trip has put foreign policy at the top of the debate and voters' consciousnesses, and for all the favorable photo ops and publicity, the hard fact is that McCain continues to hold a substantial lead on this issue over Obama. So, focusing on it has helped McCain, despite his constant references to Czechoslovakia (heck, confusing Slovakia with Slovenia did not hurt Bush in 2000). Of course, Obama needed to make this trip, and hopefully it will help in the longer run, weakening all those presumptions of foreign policy inexperience and incompetence (he looked plenty presidential and commander-in-chiefish, even if many more progressively oriented types may have found his hawkish rhetoric on some issues uncomfortable). But, now that he is back home, he should hope that the attention and the discourse shift back to such issues as the economy, where he clearly has a big lead over McCain.

Two great sentences from yesterday's Times

From Elizabeth Bumiller's article about McCain:
'I am again deeply disappointed that Senator Obama would not recognize the fact that the surge has succeeded', Mr McCain said in typical, now-daily comments before the refrigerated case of shredded cheese in Bethlehem, Pa.

I know she means the "now-daily" to apply to the comments alone, but the image of McCain returning daily to the shredded cheese case in Bethlehem to whine about Obama is priceless.

Then, from an article about the oil spill in the Mississippi near New Orleans, a LtCmdr in the Coast Guard is quoted on the oil:
this is a heavy, nasty product, problematic in the cleanup.

It won't be difficult to clean up, it will be "problematic in the cleanup!" I love it: The Bureaucratic Sublime.

Come to think of it, McC seems to me lately a nasty product, problematic in the sense-making.

Friday, July 25, 2008

Could Afghanistan become Obama's Vietnam?

Over on economists view, "anne" has been vigorously denouncing Obama's speeches about Afghanistan and Pakistan, and indeed it was a centerpiece of his dramatic speech in Berlin yesterday. Of course he has been able to effectively beat Bush and McCain over the head with how going into Iraq let the US not catch bin Laden and mess things up in Afghanistan, and clearly it is good electoral politics in the US now to take a hawkish position on Afghanistan/Pakistan. The question is whether it will prove to be such a good idea to follow through on all this hawkish talk if he does get elected (which is far from obvious, given that polls have actually been moving towards McCain in this week when Obama has had it about as good as it gets, while McCain has bungling around all over the Sausage Haus of Columbus, Ohio).

After all, as "anne" points out, it was Democratic presidents, Kennedy and then Johnson, who really got us deep into Vietnam, pushed by a pressure not to appear "weak on Communism." If he gets in Obama will certainly be feeling such pressure about being the "War on Terror," which most of us know is a bad misnomer, especially if he does follow through on seriously removing troops from Iraq. Maybe things will go well in Afghanistan/Pakistan, but there are plenty of reasons to be worried, especially about the Pakistan part, where the central government does not want us going in unilaterally, but clearly where the guys we most want to get are hanging out. While Karzai wants us in Afghanistan, the situation there seems to have been gradually deteriorating, and it is far from clear that increasing US (or European) troop presence there will help more than it will hurt by alienating the local population, as happened in Iraq before (and Vietnam longer ago). Overly ambitious promises and an unresolvable situation on the ground could indeed sour an Obama presidency, making those countries his Vietnam. Let us hope not.

California Budget Crisis

California has a deficit estimated at $15 billion. The state is legally bound to balance its budget, but it never does so by resorting to various gimmicks.

California requires a supermajority to approve any budget. Republicans have said they will not accept any budget that involves tax increases and they have enough votes to block any budget. Arnold has suggested raising money by selling the rights to future lottery money, but that is far from sufficient.

His latest ploy is to demand that the state pay workers the minimum wage so long until a budget is passed. As a student of supply-side economics, I know that the best way to get out of a recession is to ruthlessly cut government spending. Business will be so impressed that it will invest even though he cannot afford to buy anything.

If that does not work, Arnold probably have some friends in special effects who could do the trick.

Thursday, July 24, 2008

It's NOT international trade. Don't be fooled.

Many people around the world understand that our modern era of globalisation is one in which international trade is between countries. We also tend to believe that such trade involves the indisputable benefit of greater freedom to engage in the act of purchasing and of selling goods and services between peoples of different nations. For example, Tom Palmer from the Cato Institute questions the understanding of people who are unhappy with this vast expanse of trade by asking “Should American wheat farmers be allowed to buy cell phones from people in Finland? Should Ghanian weavers be allowed to sell the shirts and pants they make to German autoworkers?”.[1]

The reality of international commerce paints a vastly different picture, however. Giant multinational corporations dominate the area of international exchange and a very large share of world ‘trade’ is actually between branches of these same corporations. In North America trade associated with U.S. parent multinationals or their foreign affiliates accounted for 54 percent of U.S. exports of goods and 36 percent of imports.[2] Forty percent of trade between the US and Canada in 1998 was intra-corporate.[3]. “Forty percent of the US-Europe trade is between parent firms and their affiliates, and in respect of Japan and Europe, it is 55 per cent; with regard to US-Japan trade, it is 80 %.”[4]

This intra-corporate form of trade appears to be increasing at a rapid rate. In 2005 “U.S. imports between U.S. MNCs and others increased 13.5 percent, and imports between U.S. parents and foreign affiliates increased 8.6 percent.”[5]

John Ralston Saul highlights this new phenomenon in his book ‘The Collapse of Globalism’. He asks why such an “astonishing and continuous expansion in trade [does] not produce broad economic growth, spread wealth and reduce unemployment”[6] There is good reason for alarm. The form of economic growth experienced today is associated with rising productivity rather than increased employment. Real wages have dropped for workers and sources of taxation revenue for one government after another have declined to a point where regressive taxations regimes have now been imposed on domestic populations and public services have been cut back significantly.

Saul also asks whether the trade between subsidiaries of the same transnational corporations should be counted as trade at all. Then he goes on and adds a few other important queries. Does intra-corporate trade actually have the effect of trade? Why are profits rarely made at each stage of movement? Saul then asserts that these large firms actually intend to create losses in order to avoid taxation; this form of international commerce – unrelated to market competition - makes it possible.

Giant corporations produce goods in countries where governments provide cheap labour and lax (or non-existent) environmental regulations. That’s how they make goods where their constituent parts are put together at the lowest possible cost and then sold as a final product at the highest possible price somewhere else. If we add ‘transfer pricing’ to that strategy[7] and throw in escalating concentration of industry through mergers and acquisitions; well, what have we? I think we have a recipe for global economic meltdown!

1 'Globalization is Grrrreat!' by Tom G Palmer, Senior Fellow, Cato Institute. Cato's Letter - a quarterly message on liberty
Fall 2002, Volume 1 - Number 2

2 United States Bureau of Economic Analysis (USBEA) . As quoted from the ‘Monthly Trade Bulletin’ Volume 3 Number 10

3 United States Bureau of Economic Analysis (USBEA) . As quoted from the Trade Bulletin’ Volume 3 Number 10‘Monthly

4 General Concept of Transfer Pricing
By: Khurram Khan. [t-price.pdf]

5 United States Bureau of Economic Analysis (USBEA) . As quoted from the Trade Bulletin’ Volume 3 Number 10‘Monthly

6 ‘The Collapse of Globalism – and the reinvention of the word’ by John Ralston Saul. Viking Press, published 2005. Page 142.

7 where multinational corporations arbitrarily set unrealistic prices in transactions between parent and affiliates in order to reduce taxes and tariffs, avoid exchange controls and optimize profits.

Al Gore for Vice President of the United States!

I think I have posted this sentiment before, but what the heck. If you don't keep repeating something you are for, people forget it. Anyway, occasionally one reads of mentions that Gore is under consideration, but mostly a bunch of others like Hillary or Edwards or Kathleen Sebelius (and Webb and Strickland before they withdrew themselves) get debated. Whenever I mention Gore to people they seem to frown and view it as somehow unacceptable, getting responses like "what does he bring?" Last I checked the only other candidate who may actually help Obama anywhere (Ohio and Michigan maybe, and the Carolinas) is Edwards, who might be my second pick (heck I was for him for president before he dropped out). But Gore is supported by everybody in the party and might help bring in Florida. There is no question he is experienced and his appearance at the Netroots convention was a big hit by most accounts.

The really big fly in the ointment is that he probably does not want to do it. But, I have not heard any absolute denials out of him. Sure, he did not run for president. But that would have entailed going up against the Clinton machine, which we have seen is a pretty unpleasant thing to do. Running as VP with Obama looks a lot easier. And, it would show serious leadership ability if Obama could talk him into it. Heck, who is there out there that is better than Gore? I cannot name one, not even Edwards. Al Gore for Vice President!!!


by the Sandwichman

Evidence of the insane prejudice against shorter work time in the Anglo-American media, headlines proclaim, (triumphantly, it appears):

"France ends 35-hour work week"
"France Scraps 35 Hour Week"
"35-hour week scrapped"

Only when one reads the articles, one learns that the law has been "eased" not repealed, President Sarkozy "has been careful not to do away with the popular 35-hour working week completely" and in big companies, "no-one wants to renegotiate the 35 hours and reopen Pandora's Box."

Tuesday, July 22, 2008


by the Sandwichman

It was a dark and stormy night... The Sandwichman has dug up the following charming vignette from a novel by Edward Bulwer-Lytton, author of the infamously cliched (and unfairly maligned?) first line, "It was a dark and stormy night...,"

On entering the Piazza, in which, as I am writing for the next century,
it may be necessary to say that Punch held his court, we saw a tall,
thin fellow, loitering under the columns, and exhibiting a countenance
of the most ludicrous discontent. There was an insolent arrogance about
Tarleton's good-nature, which always led him to consult the whim of the
moment at the expense of every other consideration, especially if the
whim referred to a member of the canaille whom my aristocratic friend
esteemed as a base part of the exclusive and despotic property of

"Egad, Devereux," said he, "do you see that fellow? he has the audacity
to affect spleen. Faith, I thought melancholy was the distinguishing
patent of nobility: we will smoke him." And advancing towards the man
of gloom, Tarleton touched him with the end of his cane. The man
started and turned round. "Pray, sirrah," said Tarleton, coldly, "pray
who the devil are you that you presume to look discontented?"

"Why, Sir," said the man, good-humouredly enough, "I have some right to
be angry."

"I doubt it, my friend," said Tarleton. "What is your complaint? a rise
in the price of tripe, or a drinking wife? Those, I take it, are the
sole misfortunes incidental to your condition."

"If that be the case," said I, observing a cloud on our new friend's
brow, "shall we heal thy sufferings? Tell us thy complaints, and we
will prescribe thee a silver specific; there is a sample of our skill."

"Thank you humbly, gentlemen," said the man, pocketing the money, and
clearing his countenance; "and seriously, mine is an uncommonly hard
case. I was, till within the last few weeks, the under-sexton of St.
Paul's, Covent Garden, and my duty was that of ringing the bells for
daily prayers but a man of Belial came hitherwards, set up a
puppet-show, and, timing the hours of his exhibition with a wicked
sagacity, made the bell I rang for church serve as a summons to
Punch,--so, gentlemen, that whenever your humble servant began to pull
for the Lord, his perverted congregation began to flock to the devil;
and, instead of being an instrument for saving souls, I was made the
innocent means of destroying them. Oh, gentlemen, it was a shocking
thing to tug away at the rope till the sweat ran down one, for four
shillings a week; and to see all the time that one was thinning one's
own congregation and emptying one's own pockets!"

"It was indeed a lamentable dilemma; and what did you, Mr. Sexton?"

"Do, Sir? why, I could not stifle my conscience, and I left my place.
Ever since then, Sir, I have stationed myself in the Piazza, to warn my
poor, deluded fellow-creatures of their error, and to assure them that
when the bell of St. Paul's rings, it rings for prayers, and not for
puppet-shows, and--Lord help us, there it goes at this very moment; and
look, look, gentlemen, how the wigs and hoods are crowding to the
motion* instead of the minister."

* An antiquated word in use for puppet-shows.

"Ha! ha! ha!" cried Tarleton, "Mr. Powell is not the first man who has
wrested things holy to serve a carnal purpose, and made use of church
bells in order to ring money to the wide pouch of the church's enemies.
Hark ye, my friend, follow my advice, and turn preacher yourself; mount
a cart opposite to the motion, and I'll wager a trifle that the crowd
forsake the theatrical mountebank in favour of the religious one; for
the more sacred the thing played upon, the more certain is the game."

"Body of me, gentlemen," cried the ex-sexton, "I'll follow your advice."

"Do so, man, and never presume to look doleful again; leave dulness to
your superiors."

And with this advice, and an additional compensation for his confidence,
we left the innocent assistant of Mr. Powell, and marched into the
puppet-show, by the sound of the very bells the perversion of which the
good sexton had so pathetically lamented.


by the Sandwichman,

"This crime called blasphemy was invented by priests for the purpose of defending doctrines not able to take care of themselves." - Robert Green Ingersoll.

"To compel an employer to hire men for only eight hours and to compel the employe [sic] to work no longer than eight hours is certainly un-American." - David McLean Parry.

Consider a single individual with a utility function U (y, ℓ ) where y is income and ℓ is leisure. Both y and ℓ are 'goods', i.e. the consumer prefers more of each.

Suppose this person has non-labor income of G, and can work as many hours, h, as she wishes at a wage of w per hour. Total time available for the only two possible activities, work (h) and leisure (ℓ) is T.

If she allocates her time between work and leisure to maximize her utility, what can we say about her decisions, and about how these decisions will respond to changes in the exogenous parameters, w and G?

Three questions:

1. In what sense can w and G be said to be "exogenous"?

2. Defend the proposition that an individual "can work as many hours as she wishes at a wage of w per hour."

3. In what way does the supposition of the static labor supply model that individuals are free to work as many (or few) hours as they wish differ from the Parry doctrine that regulation of the hours of work by law is "un-American"?

To assume that wages are "exogenous" to the number of hours worked is to assume either that there is no effect on productivity from variation in hours or that there is no effect on wages from variation in productivity. Those assumption are not mere convenient simplifications but rather egregiously violate core principles of marginalist analysis.

"Suppose that supply has no effect on price and that price has no effect on demand." What kind of "economic model" could one construct based on that statement? That is the level of incoherence exhibited by the static labor supply model.

The blasphemy committed by advocates of shorter working time is not -- as claimed by economists -- an assumption that there is a fixed amount of work to be done regardless of the cost of labor. The blasphemous assumption of shorter work time advocates is that individuals are not free to work as many or as few hours as they wish at a given wage. Their crime is thus not committing a fallacy but refusing to be conned by one.

Monday, July 21, 2008

Here is the second chapter of my new book

Second Chapter of "The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers" (doc)

New Interview with Bob McChesney on The Confiscation of American Prosperity

We're going to sit at the Welcome Horizon one of these days, Hallelujah!

Bush can't seem to get the SOFA he wants from Maliki. Heck, there's an IKEA right down 95 in Virginia - maybe he ought to go there. Maliki offers to throw in a Table, but Bush wants an Horizon instead. How many people does he imagine want to have dinner with him? Sheesh!

The End of the Axis of Evil?

President Bush has now sent the Undersecretary of State to meet with Iranian nuclear in multi-party negotiations without Iran meeting the demanded conditions. A deal has been cut with North Korea regarding its nuclear program, in effect returning more or less to something similar to the deal Clinton cut that Bush abjured a few months after he got into office (except that now the North Koreans have actually tested nuclear weapons). And he has been reported to have acceded, sort of, to the demand of Iraqi PM al-Maliki to some sort of "time horizon" for the withdrawal of US troops from Iraq as part of Status of Forces Agreement. Many consider this to be a triumph of Condoleeza Rice over Dick Cheney in the waning days of the Bush administration as Bush becomes desperate to have some kind of historical legacy in the face of his continuing decline in the polls. It looks like the end of the Axis of Evil as the major focus of his foreign policy, as various hardliners complain.

It was always my view that Bush's invocation of the "Axis of Evil" was his bid to be the next Ronald Reagan, who had his "Empire of Evil" speech, rather than being a "wimp" like his dad, as Cheney kept whispering in his ear while pushing the invasion of Iraq and the dumping of the Clinton Korea policy. The change in the Korea policy was predicated on a similar outcome that Reagan was advertised as having gotten, a collapse of the North Korean regime like how the Soviet regime collapsed (although that happened during the presidency of Bush, Sr., and Reagan spent his whole second term being friendly with the perestroika leader, Gorbachev, who would make the moves that would lead to that outcome). But, the North Korean regime tested a bomb rather than collapsing, the Iranian regime (which had helped us against the Taliban in Afghanistan prior to Bush's speech) was strengthened by our overthrow of Saddam Hussein and got a much more anti-US leadership in reaction to our casting them as part of the "Axis of Evil," and the disasters in Iraq have been too numerous to bother listing, even though we are now at a point where Bush could declare "victory" (Saddam gone and a semi-stable, semi-democratic regime in place) and bring our troops home. Maybe Bush is finally almost growing up now that his presidency is nearly finished?

Public corporations disguised as private enterprise

The premise put to global citizens is that corporations are purely private entities serving private ends and that the Western economies operate on the principle of the ‘free market’ which is an ideology that supports the economic system of capitalism. ‘The market’ is sacred in a society that operates under such a paradigm, therefore government and citizens have been prohibited from intervening in the workings of it.

We are told, on the other hand, that the ‘public’ realms of our society consist of such things as ‘government’ and ‘democracy’. (Albeit I am concentrating on the very limited ‘public’ areas that get the major media focus today).

‘Government is put forward as an essential evil; as a bureaucracy that must function in order to acquire the taxes necessary to perform its various functions such as to regulate industry (only when it is absolutely essential), to build public roads and bridges and to provide crucial social infrastructure and services such as ‘defense’ and basic education services.

The other public realm I mention, ‘democracy’, has several critical elements, the most essential being IMHO ‘the active participation of the people, as citizens, in politics and civic life.” [1]

But what happens when these two critical ‘public’ realms – government and democracy - are taken over by a relative handful of ‘private’ corporations operating in the ‘free market’?

This is a big subject and again for the benefit of practicalities I limit this discussion to a tiny area of exploration.

How can Governments collect sufficient taxes, for example, to fund essential services and infrastructure? Large corporations now control the majority of the nation’s economic output [2] and can evade taxes very easily? “In 2002 half of the world's 500 billionaires and a third of the 27 million millionaires call[ed] the USA their home. They own controlling interests in most of the large corporations that dominate the economy.” [ 3] Today, the trans-national nature of big business mean that these organisations can engage in tactics such as ‘transfer pricing’ [4] “Transfer pricing is probably the single most important reason that so many major corporations pay little or no federal income tax.” [5]

How can the public asset of democracy work in a society where citizens can no longer participate in the mass media? In 2004 the major American broadcast networks - ABC, CBS, NBC, and Fox - owned fully or partially nearly 80 percent of the new series they aired. This created a ‘market’ environment where most of the independent media businesses were either swallowed up by one of the big media companies “or driven out of business altogether.” [6] The creation and dissemination of news follows a propaganda model according to Noam Chomsky in his book entitled ‘Manufacturing Consent’. Information is filtered in a way that serves the information to the needs of the powerful. [7]

In the last decade the emergence of the Internet has resulted in the only opportunity ordinary citizens have had to be published and thus sidetrack the filters imposed by ‘private’ media corporations. Fortunately, ‘net neutrality’ has reigned up till now. ‘Net neutrality’ “is the principle that you should be able to access whatever web content or services you choose, without any interference from your Internet service provider. However, no law or rule protects citizens facing obstacles to getting access to the information on the Internet.” [8] The Communications Opportunity, Promotion, and Enhancement Act of 2006 (COPE bill) “would make it impossible for those protections to be written into law or rule, making all of us vulnerable to big companies who would like to "own" the Internet and mine it for profit. Some companies like Verizon and Comcast have already announced plans to create a two-tiered Internet, where some websites and services would travel in the "fast lane" - for a fee, of course - and the rest would be relegated to a "slow lane."” [9]. This is likely to be the beginning of a host of changes aimed at limiting the free flow of information and discussion on the Internet.

Clearly, if people around the globe are to benefit from areas of public good then those arenas must be specifically defined and separated once and for all from an unfettered market. If we fail to do this we will end up with a ‘private’ rather than a ‘public’ government and live in a society that is completely organized on the basis of private profit for a tiny few; with devastating consequences. That’s if we don’t already.

I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country…
corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.

Abraham Lincoln. November 21, 1864 in a letter to Colonel William F. Elkins

[1] Lecture at Hilla University for Humanistic Studies
January 21, 2004

[2] Charles Derber wrote in his book ‘Corporation Nation – How corporations are taking over our lives and what we can do about it’ (ISBN 0–312-25461-X, 1998 page 90,) that “the myth of small business as the backbone of the American economy has not been true for fifty years.”

[3] Facts on the US Economic Empire
by etra Jaimers. Eat the State. Volume 7, #3 October 9, 2002

[4] Transfer pricing is the understatement of a corporation’s income through the overstatement of its costs by way of that corporation charging itself inflated prices for goods from one of its own international subsidiaries to another.

[5] Global Shell Games - tax evasion by multinational corporations - Statistical Data Included
Byron L. Dorgan. July 2000. Washington Monthly.

[6] My Beef With Big Media
How government protects big media--and shuts out upstarts like me
By Ted Turner. July/August 2004

[7] Manufacturing Consent - A Propaganda Model - excerpted from the book
Manufacturing Consent by Edward S. Herman and Noam Chomsky
. Pantheon Books, 1988

[8] Communications Opportunity, Promotion, and Enhancement Act of 2006

[9] Communications Opportunity, Promotion, and Enhancement Act of 2006

Means Testing Medicare

Tyler Cowen is my favorite conservative. Sometimes I actually agree with -- not very much, but sometimes I do. Today in his New York Times article he advocates means testing for Medicare. He acknowledges the possibility that means testing will make Medicare a welfare program, causing it to lose support -- but he suggests that things are so dire we do not have another choice he does not seem to take seriously Mark Thoma's suggestion that single-payer could create substantial cost savings.

I am not sure how big a threat Medicare really is. Any sane political system would find massive savings in the defense budget, but sanity is a scarce commodity. Taxes on the very rich and taxes on purely speculative activities could go a long way to supplement Medicare. Unfortunately, such policies will not be discussed outside of third-party politics.

Sunday, July 20, 2008

A Different Kind of College?

The New York Times has a fascinating article about Berea College, a school that has no tuition, but expects students to work 10 hours a week. The school has a healthy endowment of $1 billion, but seems to use it for supporting education rather than fancy buildings.

I never heard of the college before last year when I saw a flyer on the Internet for small summer program to study imperialism and then spent time with families in Mexico. One of my students got accepted and was enthusiastic about the program, but I have never thought to inquire about the college.

I assume that without tuition at the college lacks the bloated bureaucracy that characterizes most higher education today. The article might just be excessive hype, I hope that is not the case.

Saturday, July 19, 2008

How the Left Wing Created the Credit Crisis. Yes, Indeed!

James Grant is a knowledgeable student of the credit system, but today he goes off the rails, blaming the left wing for the credit crisis. Here is the most striking passage:
By and by, the lefties carried the day. They got their government-controlled money (the Federal Reserve opened for business in 1914), and their government-directed credit (Fannie Mae and the Federal Home Loan Banks were creatures of Great Depression No. 2; Freddie Mac came along in 1970). In 1971, they got their pure paper dollar. So today, the Fed can print all the dollars it deems expedient and the unwell federal mortgage giants, Fannie Mae and Freddie Mac, combine for $1.5 trillion in on-balance sheet mortgage assets and dominate the business of mortgage origination (in the fourth quarter of last year, private lenders garnered all of a 19% market share).

Grant, James. 2008. "Why No Outrage?" Wall Street Journal (19 July): p. W 1.

Would a publically owned agency have behaved the same way, lowering standards to increase share costs?

Friday, July 18, 2008

Harrisonburg, Virginia to Host an Obama Office

The front page of the July, 17 Washington Post has a story, "Obama Adds 20 Va. Offices in a Big Push To Win State," with the following later in the story: "Many offices will be in traditional Republican strongholds, such as Harrisonburg in the Shenandoah Valley and Lynchburg in southern Virginia." Many observers, both Republican and Democrat, say that this is an effort to "show momentum" and how much more money Obama is raising than McCain, with Virginia not having gone for a Democrat for president since LBJ in 1964. They say Obama will need to show up in person for these extra offices to really have an effect, although he is currently somewhat ahead of McCain in the polls statewide.

Anyway, the office here in Harrisonburg, just a couple of blocks from my house, opens up this Saturday afternoon. This evening people were working there painting and putting up all kinds of signs and stuff. I think I shall drop in for the Open House at 2 PM. Heck, maybe we will even get a visit from him at some point.

Thursday, July 17, 2008

Science today - an easy way to lie to the public

“…We submit evidence on the hazards of GM to the government's scientific advisory committees again and again over the years, only to be met with bland denial and dismissal[1]. Fortunately, some good governments all over the world are taking heed, and are rejecting GM on account of uncertainty over safety…”

“…Two right-wing chemical industry supporters--Dennis Avery and Steven Milloy--have used the Public Health Service's announcement to claim that this invalidates all research on endocrine disruption. As ludicrous as that assertion is scientifically, their claims are a potential source of confusion for people who do not follow this issue closely. I have therefore posted below a detailed analysis of what they are claiming. Dennis Avery's commentary (see below) is a classic example of PR spinning that seizes upon an element of truth and then distorts it in ways to serve a larger purpose, in this case arguing to weaken standards that protect public health from pesticide exposures. Milloy is a fellow-traveler who has written similarly false assertions[2]…..”

Animal tests false reassurance[3]
“Animal tests on the kind of drug given to the six men ill in a London hospital may not be the best way of evaluating the effects in people, an expert warns. The drug they took stimulates a protein only found in humans…..”

“..No pesticide label signal word is present to guide users on toxicity, protective clothing and equipment. False and misleading statements[4] now occur on pesticide labels that confuse consumers. Labels providing the impression that the product is non-toxic are a grave concern as by default they encourage unnecessary human and environmental exposure…”

“..Also tolerated are biased viewpoints, including those linked to powerful vested interests[5]. Many scientists are employed by or receive research funds from companies or government bodies, and both expect and are expected to come up only with results useful to those bodies. Scientists receiving money from chemical companies to study pesticides seldom draw attention to the limitations or dangers of pesticides: they simply do studies within a framework which assumes that using pesticides is the appropriate thing to do. Physicists working on nuclear weapons design do not stray outside their narrow task. Engineers employed by automobile companies do not propose studies looking for safety problems or alternatives to the car [15].

[1]Puncturing the GM Myths. ISIS Press Release 08/04/04

[2] Analysing Dennis Avery's Misrepresentations. Our Stolen Future


[4] Submission, American Association of Pesticide Safety Educators

[5] 'Scientific fraud and the power structure of science', Brian Martin
Published in Prometheus, Vol. 10, No. 1, June 1992, pp. 83-98.

Wednesday, July 16, 2008


There are 88 keys on a piano, as many as there are years in Justice Stevens' life so far. I would ask self-styled progressives upset with Obama to reflect on this number - and, having done so, shut up and get to work!

Tuesday, July 15, 2008


by the Sandwichman

"LIVING WELL IN THE 21ST CENTURY WILL REQUIRE THAT we soon begin the transition away from a capitalism driven by the quest for profit and growth," wrote James Gustave Speth in an "Other Voices" op-ed in the June 30 issue of Barron's, Changing the Object of Capitalism. Leading off Speth's prescription for transforming economic activity is a shorter work week. "The economy might even evolve to a steady state, where a declining labor force and shorter work hours are offset by rising productivity."

Gus Speth, meet Sydney J. Chapman and Ira Steward.

Mass Media’s Global Monopoly and the Legal Freedom to Lie

After the Second World War the mass media in Europe, America and Australia developed into monopolies. Generally speaking radio and television in Europe became state services and subject to heavy censorship. In the United States a few giant news services and networks emerged. The Hachette and Havas organisation in France took control of many of the small to medium sized newspapers and the conservative Axel Springer clique in West Germany gained control of nineteen newspapers with a total circulation of eighteen million. In 1970 five newspapers reached more than two hundred thousand readers each in Italy. “Many of the major British newspapers were almalgamated during the sixties by the Lord Rothermere, Lord Thomson and Cecil King groups. In the Soviet Union and Eastern Europe, all the media were state controlled. Whether privately or state controlled, however, the mass media represented a revolution in communications that enabled them to exert unprecedented influence over public opinion.” [1]

Since Robert Anchor described this process of media concentration in 1978 the mass media have meanwhile become even more monopolized. In 1983 the number of major mass media companies in the US shrank from several hundred in the 1950s to about 50. “These fifty corporations in 1984 became twenty-six in 1987, twenty-three in l990, and then less than twenty in 1993. In 1996 the number of media corporations with dominant power in society was closer to ten. Today it is at most eight…” [2]

QUESTION: In an age that witnesses (i) the proliferation of nuclear weapons and other dangerous technologies; and now (ii) the legal freedom of political candidates to lie [3]


[1] ‘The Modern Western Experience’ by Robert Anchor, University of Southern California. 1978. Prentice Hall Inc, Englewood Cliffs, New Jersey 07632. ISBN 0-13-599357-1. Pages 272-273.

[2] A thesis submitted by GRAEME CHEADLE to the European University Center for Peace Studies Stadtschlaining/Burg, Austria in partial fulfillment of the requirements for an MA degree in Peace and Conflict Studies 24,806 WORDS (91 PAGES). MAY 2005

[3] ‘Split court says candidates can lie’ by Ralph Thomas.Seattle Times Olympia bureau, Friday, October 5, 2007.

Monday, July 14, 2008


by the Sandwichman,

I tracked a backlink back to Mark Thoma's blog and there the preceding item, "I am Not Paid Enough to Deal with This Lying Bullshit," quoting Brad DeLong, caught my attention. In the quoted post, Professor DeLong stated:

I trot over to the J-School TV studio as part of the sober, sensible, bipartisan consensus, intending to carry water for Ben Bernanke and Hank Paulson.

Can someone explain to the Sandwichman how "carrying water" as part of the "sober, sensible bipartisan consensus" differs from "dealing with this lying bullshit"?

In thinking about medical care for my debate, I have been thinking about the shenanigans of the insurance companies.

The Marginal Revolution blog points to an insurance policy to cover businesses whose insurance providers refuse to pay. How long will it be before people with people will need to buy comparable policies for their medical care.

"New Product Covers Legal Costs If Buyers Decide to Challenge Claim Denial." Sclafane, Susanne. 2008. National Underwriters Property and Casualty.
The risk that a claim won’t be paid -- a potential downside that every buyer of insurance faces -- was an uninsured exposure until recently, according to the developers of a new policy to provide coverage so that risk managers can contest such rejections.

The new coverage, available to businesses of all sizes, will pay up to $250,000 in legal expenses associated with contesting the denial of an insurance claim under a commercial policy.

We know that wrongful coverage denials occur in our industry. There’s a reason coverage attorneys exist today,” Mr. White [Jason White, a managing director for Professional Services Group of Swett & Crawford, in the Los Angeles office of the Atlanta-based wholesale brokerage] said, explaining the impetus for the product launch. In fact, he noted, the idea came from a coverage law firm—Surdyk & Baker in Chicago.

Obama and GOP Energy Arguments

I am going to probably annoy all my co-bloggers and most readers as well by saying that I think that Obama should just flip flop and agree to let states allow oil drilling offshore beyond a 50 mile limit, if they want to, granting this GOP policy line. While in 1969 near inshore spills ended up on beaches in Santa Barbara (triggering the nationwide ban), and there were oil spills in the Gulf of Mexico during Hurricane Katrina, most such drilling would be relatively harmless, like that in the North Sea. Now, I am not claiming that such drilling would lower oil or gasoline prices or is any long or short term solution for US energy problems. It most definitely is not, and Obama clearly should continue to put the emphasis on conservation and better technologies as he is. However, as a strictly political matter it seems that a majority of Americans believe the GOP line on this that such drilling will help, and I fear that McCain will be able to sway some voters in certain crucial states by pushing this line, which has been picked up big time by the usual claque of commentators on Fox News and elsewhere, being endlessly and repeatedly pushed like a Big Lie.

Another line that is being pushed by these folks is that the "US has more oil than Saudi Arabia (!)" which suggests that "energy independence " might be viable, if we were only willing to go for it. The basis for such claims are the likely large amounts of shale oil the US has in western Colorado, Wyoming, and Utah. However, such oil is most likely not producible at less than $95 per barrel, and I do not see the companies viewing it as sufficiently likely the price will stay above that to do it. There is also the very serious problem of enormous water requirements (and pollution resulting of multiple sorts), which are serious problems out there. Estonia is producing shale oil to get out from under reliance on the Russians, but I saw a report that they are using 91% of their water to do so. I find that number hard to believe, especially given that they have a lot of water, but even if that number is exaggerated quite a bit, it is a sign of how water-hungry shale oil production is. So, no, I see no reason for Obama to go along with that one at all.

Spencer Ackerman is a national treasure!

Andrei Shleifer, Billionaire?

David Warsh has done some interesting investigative pieces about Shleifer. The link in the article below gives an update of Shleifer, but he may underestimate Shleifer's wealth by quite a bit.

The article linked here suggests the wealth of Shleifer may be immense. To his credit, Shleifer still does active economics work, but still ....

Fiscal Shamity

Due to the advertising you see on the left, EconoSpeak has a karmic debt to repay concerning the Peterson Institute. In that light, please deplore with me the free pass given to Peterson’s fear mongering in today’s NY Times. All the usual obfuscations were served up: bogus projections of Social Security, the lumping together of Social Security and Medicare, the specter of a supposedly-unprecedented increase in the percentage of retirees in the population. The headline reflects the tone of the article: swallow the gunk without asking any questions.

As for the present, a fiscal deficit of 4% of GDP (first quarter 2008) is entirely reasonable for an economy sinking into a recession. (Spending priorities are bonkers, but that’s another matter.) Long term, Social Security doesn’t need to be fixed; health care does, but this is not primarily a fiscal issue. And the real monster in the closet is the current account deficit, which goes completely unmentioned by either Peterson or his interviewer.

A billion dollar PR budget can’t turn this sludge into syrup.

Sunday, July 13, 2008

A Brief History of Privatization: Fannie Mae and Ginny Mae as Exemplars?

I am writing this to provoke a conversation rather than as a demonstration of my expertise. Here was one of the first New Deal agencies go under. What was the interest in privatizing Fannie Mae during the Johnson administration? Was it the Democrats close ties with the savings and loan industry?

Because these two agencies had apparent (but nonexistent) government guarantees, they apparently had an advantage over banking interests. For a long time, well before anyone fretted about housing crises, there was a great deal of antagonism toward these agencies. During that period, I was wondering what the elimination of these two agencies would mean for housing. Now that they are in trouble, the government stands ready to rescue the investors -- another instance of the Bear Stearns syndrome. But barely anything to help the poor souls who were victimized.

On a personal note, my daughter was wanting to buy a home about a couple years ago. Her friends sent her to stay broker to explain how she could fudge her nonexistent income and get a home. She was told she could create a good credit score, even as she had no credit.

Okay, here is my central question: has there ever been a privatization that has worked to the benefit of society?

Can Tax Cuts Lower Economic Growth?

Free Exchange claims tax cuts raise income growth:

Mr Drum also appears to easily reject supply-side economics. There seems to be a temptation lately to label anyone who even dares mention supply-side economics, without immediately deeming it the silliest idea born to a napkin, an economic heretic. That's unfortunate. True, with the exception of very high marginal tax rates, a tax cut will generally not pay for itself. But there exists ample empirical evidence that cutting income taxes does increase growth. Thus, the long-run impact of a permanent tax cut is still up for debate. The effect of lower-income tax rates on labour supply is mixed. But it does seem, at the very least, lower tax rates decrease the amount of tax evasion. Writing off supply-side economics as a blatant fallacy is as much of a 1990s relic as wearing a goatee.

Exuberant Rationality has one objection:

it seems wrong-headed to keep taxes this low when government debt is ridiculously high and growing faster than ever, our infrastructure is in dire need of maintenance, and fee-based services (such as publicly-provided higher education) are becoming more expensive.

Let me suggest another. The claim that tax cuts lead to more output via incentive effects presumes that we are talking about fiscally neutral reductions in taxes and government spending. What we got from the Reagan and Bush 43 administrations – and what is proposed by McCain – is a reduction in taxes that is much larger than any proposed reduction in government spending (government spending as a share of GDP actually rose under Bush43). The impact of this fiscal stimulus was a reduction in the national savings rate, which lowers long-term growth.

As Exuberant Rationality notes, fiscal restraint might entails less public investment in infrastructure and education. As a pro-growth liberal, I’m in favor of more public investment in infrastructure and education as less investment likely would hurt long-term growth.

Saturday, July 12, 2008

A Little Insight into the May Trade Report

The headline in the NY Times says the improvement is the result of a weak dollar, but, as usual, we learn more from folks like Brad Setser and Menzie Chinn, along with a quick perusal of weekly petroleum delivery data from our hardworking friends at the US Energy Information Agency.

For once, oil imports are down, even on a value basis. A 10% physical decline in imports is consistent with a 6% decline in total physical consumption. A rough cut at the EIA delivery data, however, shows a decline of only about 1% from April to May. The interesting information is not the total, though, but the composition. Motor vehicle and aircraft fuel were up, but were more than offset by large declines in heating fuels. There is no evidence of seasonality in these series, so we can’t jump to conclusions, but it may not be unreasonable to suppose that this boost to the US trade position is less sustainable than a similar reduction in travel might be. Those who follow these fuel data more closely than I do should feel free to chime in.

Meanwhile, if Chinn is right and contemporaneous measures may be overstating GDP, some to all (or even more than all) of the trade improvement could be attributable to a US slowdown. This is entirely in line with economic theory, but it is not such good news: if the US has to bring down its trade deficit substantially on the back of its economic growth, we are in for one long, miserable ride.

Actually, it’s worse than that, since, in the context of existing financial fragility, a slump in the real economy portends disorder in financial markets. One reason among many: the longer and deeper the incipient recession, the further and faster housing prices will fall, and the greater will be the default risk so liberally distributed across a range of credit instruments. And to return to my repeating nightmare, it is near certain that any serious implosion of US financial markets will morph almost immediately into a dollar crisis. If I were Ben Bernanke I’d be laying in a supply of my favorite hard stuff.

Falling from the Period of Financial Distress into the Panic and Crash

In 1972, Hyman Minsky described the "period of financial distress," in a paper in a journal that no longer exists (Reappraisal of the Federal Reserve Discount Mechanism, vol. 3, pp. 97-136), "Financial Instability: The Economics of Disaster." Charles P. Kindleberger picked up on this and followed Minsky's analysis in his famous book, _Manias, Panics, and Crashes: A History of Financial Crises_, the 4th edn of which appeared in 2000 (the last one by him; he is now dead, but the pubbers have others hacking away at it for more editions, gag). The period of financial distress is a gradual decline after the peak of a speculative bubble that precedes the final and massive panic and crash, driven by the insiders having exited but the sucker outsiders hanging on hoping for a revivial, but finally giving up in the final collapse. According to Appendix B of Kindleberger's 2000 edition, 37 of the 47great historical speculative bubbles exhibited such a period before the final crash, even though all the theoretical models predict a crash immediately following the peak with no such period.

In 1991 I published the first mathematical model of such a phenomenon in my book _From Catastrophe to Chaos: A General Theory of Economic Discontinuities_ (Kluwer, Chap. 5), still my most cited work at over 150 according to Google Scholar, although nobody seems to have noticed this particular contribution in the book. In 1997, I published a paper describing this model (and related matters) in a paper that reproduced a plenary lecture given in 1996 in Berkeley, "Speculations on Nonlinear Speculative Bubbles," Nonlinear Dynamics, Psychology, and Life Sciences, Oct. 1997, vo. 1, no. 4, pp. 275-300. This paper has never been cited. More recently I have coauthored a paper that has been under long review by a journal (now under a long revise and resubmit, still waiting for an answer) with Mauro Gallegati and Antonio Palestrini, "The Period of Financial Distress in Speculative Markets: Interacting Heterogeneous Agents and Financial Constraints" (available at my website:, that lays all this out in much more up-to-date mathematical modeling.

So, why am I boring all of you with this self-citation? Well, Dean Baker is constantly claiming credit for his forecasts of doom and gloom. It looks like we might be finally reaching the big crash in the US mortgage market after a period of distress that started last August (if not earlier). I and my coauthors are the only people to have provided actually formal models of this phenomenon, beyond the verbal and historical discussions provided by the brilliant Minsky and Kindleberger (both of whom I knew, but both of whom are now dead). I have been forecasting this in unpublished lectures all over the globe for years, but never have put it up into the blogosphere. So, I am claiming credit, to the extent it is due, although the basic ideas were clearly laid out earlier by Minsky and Kindleberger.

I will add one more story. Three years ago I presented an earlier version of the still-unpublished paper with Gallegati and Palestrini in Tokyo at Chuo University. In the middle of the presentation the biggest earthquake in 13 years hit Tokyo, in fact right at the moment I said the word, "crash." Some of the Japanese in the audience blamed me, not entirely humorously, for having caused it.

Friday, July 11, 2008

Blackwater the Main Reason Iraq Wants US Out

Juan Cole reports that the main reason Prime Minister al-Maliki is holding up a Status of Forces Agreement with the US has been the refusal of the US to rein in its private mercenaries, especially the wildly overpaid and out-of-control folks at Blackwater. In September, 2007 Blackwater personnel gunned down 17 innocent Iraqis in Nisour Square, an incident that triggered outrage among the Iraqis and demands that the perpetrators be brought to justice. But they have not been as they have immunity under current agreements, something that now appalls the Iraqis of all factions. To add insult to injury, less than a month after this incident, the US State Department granted Blackwater a $92 million contract to guard US personnel in Iraq. Why are we hiring mercenaries at many times the salaries of US military to carry out functions that until very recently were always carried out by US military personnel?

Unfortunately most in the US are unaware of how outrageous Blackwater is, or the deep links of its founder and CEO, Eric Prince, to the current administration. So, in October 2007 a drunken Blackwater employee killed a bodyguard of the Iraqi Vice President, doing so by firing from a balcony in the Iraqi Ministry of Justice. Even more striking is that Blackwater personnel view themselves as superior to US military personnel. In 2007 there was an incident in the Green Zone where a Blackwater employee crashed an SUV into an army vehicle. The army seized the SUV, but the Blackwater employee disarmed the US army soldiers and forced them to lie on the ground until he recovered the Blackwater vehicle. All of this is simply outrageous and out of control (and Barack Obama has yet to speak against it). I fully sympathize with the demand by Ayatollah Ali Sistani of PM al-Mailiki that under these circumstances Iraq should not grant the US a Status of Forces Agreement that allows Blackwater personnel immunity from prosecution for this sort of conduct.

Life in an Alternative Universe

The panel last night was very interesting. The hall was very, very big and quite full. I am guessing 600 people or more, which two large screens with projections of the speaker's image (or his power points). During my talk, I mostly focused on a couple people in the front row who were squirming and scowling with everything that David Himmelstein and I said.

We must've done quite well because the number of people sympathetic to single-payer rose by 400% after the talk -- from two to eight. Many people came up to congratulate David (who did an extraordinary job) and me. What I think they meant was that we did not sound like the caricatures that they would expect after having been immersed in Fox TV.

Seemingly thoughtful libertarians would come up and tell me horrendous things that the government is doing. My favorite was that California is imprisoning families for homeschooling because they refuse to submit to state indoctrination. These people seem quite intelligent, but live in an alternative universe in which there ideas go unchallenged.

The next debate will be a bit different since my "partner" will not be someone like David Himmelstein, but someone selected because is a black woman who works in the ghetto in New Orleans. She is also a Republican Party operative in a state.

Thursday, July 10, 2008

The Quiet Revolution

‘The Quiet Revolution’ was the title of a book written by former Australian Deputy Prime Minister and Treasurer Jim Cairns under the Whitlam Government (1972-1975). He was a prominent leader of the Australian anti-Vietnam war movement and a deep skeptic of conventional politics and economics.

The revolution Jim Cairn’s advocated in this book so many decades ago would be a timely, essential and peaceful one. Either we engage in one like this, he urged, or face unavoidable annihilation. On page 7 Cairns describes what he terms “four cataclysmic equations” of our time. These, he says, are:

1. Limited or finite material resources and unlimited human demands upon them;
2. Nuclear power – not just bombs – can destroy the human race;
3. Technological industrialism creates huge industrial structures which become more and more centrally controlled and democracy disintegrates; and
4. Technological industrialism creates human problems and needs faster than it solves them or can provide for them.

“There can be no solution at all to any of these problems until the mass of the people who have no, or little power, decide to get power in some way and exercise it. There can be no solution even if they get power and exercise it unless they do it with responsibility and humane values.” Cairns says.

It may not be clear to many people but Jim Cairn’s revolution did not cease when undemocratic right-wing forces ousted Cairns and his government from power. (See my previous post on Econospeak ‘A Coup in Australia and the CIA). He warned that the changes to the economic structure would occur regardless of who was in power and probably only when people were forced to change their values and way of life by the very circumstances we create.

I note that Wikipedia has an article also called“The Quiet Revolution” that refers to “the 1960s period of intense change in Quebec, Canada, characterized by the rapid and effective secularization of society, the creation of a welfare state (État-providence) and a re-alignment of Quebec's politics into federalist and separatist factions…”

Wikipedia also has a somewhat inaccurate article on Cairns. (The Khemlani loan affair paragraph does not mention the forged documents employed by the CIA and fed to the hostile mainstream press as a scheme to get rid of Cairns).

'The Quiet Revolution' by Jim Cairns. First published 1972. Revised edition 1975. Widescope International Publishers Pty Ltd. PO Box 339 Camberwell, Victoria, Australia, 3124. National Library of Australia card number and ISBN 086932 007 6

A Stranger an a Nearby Land

We just returned from Mexico, but Las Vegas seems much more foreign to me. The airport with a casino with loud and glaring videos advertising the main casinos in town. The lobby of the hotel is a casino. I see people sitting on top of their slot machines putting money in, but nobody looks very happy. Many of the other casinos look like a larger version of something that parents would set up for a children's birthday party -- gaudy and patently phony. I have a hard time imagining what the attraction would be.

There are two other large conventions in the hotel. The National Strength and Conditioning Association and a national pawnbrokers association. I was talking to a fireman from the first convention, or just got back from Chico. Incidentally, the awful picture that was on the main page of the Washington Post was from Paradise, about 12 miles from Chico. Much of the town is under evacuation orders. Driving to the Sacramento Airport, when we got a little closer to the fire, the visibility was not much more than 100 yards.

Last I heard, Freedomfest had 1300 paid participants at almost $500 apiece. The meeting has 120 booths. Some are people making investment pitches, but most are very conservative organizations, such as Cato and Heritage Foundation. Both Ron Paul and Bob Barr have booths as well.

I know almost nobody here. I did spend a couple of afternoons with Milton Friedman's son, David, when he was younger and less famous. In later years, he showed no sign of recognition when I encountered him.

A number of sessions are devoted to debunking environmentalism. I do not know if the people are offended by the idea of environmental disruption or government programs to supposedly mitigate the problem. Gold and the dollar seem to be of major concern. People like Steve Forbes and Richard Viguerie will be talking about politics.

There is a strange feeling in being immersed in an alternative universe -- stranger still in an environment like Las Vegas.

An Advisory to Intro Macro Teachers

Tuck away this latest post by Menzie Chinn, who has illuminating things to say about the reliability of GDP and CPI estimates.

Wednesday, July 9, 2008


Tyler Cowen on his blog links to a statement of 300 economists for McCain and wonders if there is an allusion to the movie intended. I would just point out that Thermopylae was a defeat for the Greeks. I'm forming an Economists for Xerxes group. Any takers?

So who do we find among the doomed Spartans? Becker, Lucas, Mundell - no surprises really.....Bring It On!

No Limit to the Supply of Dumb Oil Ideas

I could blog every day on the harebrained schemes being cooked up to deal with rising oil prices, but in the interest of efficiency I’ll focus only on the worst. Certainly holding its own among the goop at the bottom of the $136 barrel is this suggestion from Harry Reid, according to today’s New York Times:

He [Reid] also hinted at a potential element of compromise legislation: that any oil produced from wider access to federal lands off shore be reserved for domestic use and barred from export.

How patriotic this sounds, until you realize that the US exports virtually no oil, consuming all it produces and then another 150%. But even if we did export some of the off shore supply, so what? Suppose we export 100,000 barrels we would have consumed and then import an extra 100,000 barrels to make up for it, how would this affect energy prices, the current account, global warming or Reid’s majority in the 111th congress?

Tuesday, July 8, 2008

Neoliberal Priorities

The air continues to be horrible, filled with ash as well as smoke. Today the fire crew lost control of one of the nearby fires. I assume it will get worse today since the temperatures between 108 and 110.

People are being evacuated. Dormitories are being opened for the evacuees.

I had to go to the dentist about 5 miles away. Even though I wore a mask and peddled slowly, I still felt tired when I came home.

Close to 20,000 people are fighting fires in the state, and the fire season is not yet begun.

A few National Guard people have been assigned to the fires, but we know where many of the rest are.

The state faces a $15 billion deficit. No stimulus package here. The Republicans have enough votes to block any tax increases and vowed to do so.

The whole tragedy seems to be an experiment in neoliberalism: inadequate public resources to meet unexpected problems, fires here, flooding in the Midwest, inadequate regulation of everything from food to finance. We are in an election year and I have not heard one politician saying anything reasonable.

Obama versus McCain on Social Security

This morning's Washington Post has a front page, above the fold story by Perry Bacon, Jr. on "Candidates Diverge on How to Save Social Security." The story does briefly quote Dean Baker to the effect that it does not need "saving" now, a view I hold along with Bruce Webb and others on the basis that reality has more closely tracked the low cost projection under which there are never even any deficits, in comparison to the MSM blared intermediate cost projection under which they appear in 2017, with "bankruptcy" in 2041. The storyline hews to this, quoting unnamed "experts" to criticize Obama for "only covering half the cost of the 75 year shortfall." As it is, Obama is sticking with his primary season proposal, to charge social security taxes on those making more than $250,000 per year, otherwise no changes, no benefit cuts, no privatization. McCain is for some muddled version of Bush's muddled plan: raise the retirement age, cut future benefits, "allow" young people to transfer their taxes into private accounts, but no tax increases.

While I support no change, Obama's plan is the least damaging of any put forth by any of the candidates during the primary season. McCain's plan is a route to destroying social security as his allowing of private accounts with no tax increases will certainly bring on a fiscal crisis for the system, which will probably not happen at all if it is just left alone. We already have the voluntary tax-incentivized IRAs and so forth, but the privatizers want a mandatory private accounts system for their Wall Street buddies to manage. I say, if we insist on having mandatory private accounts, then do it as the Swedes do, a separate add-on system to social security, supported by its own set of new taxes, which is certainly not what McCain is proposing.

Monday, July 7, 2008

My idea of freedom

Here is my contribution for the panel on freedom, which got hammered out today after I cleared my head with an hour and a half of basketball, mostly unsuccessfully trying to keep up with a 20-year-old Vietnamese kid. My goal here was to speak against the idea of individual responsibility.

Mark Skousen, the organizer, told me he thought the panel might be on C-SPAN, but he told me that about the medical panel earlier. In any case, I was overwhelmed by the valuable suggestions that people offered for the health care session.

Here is the link:

Saturday, July 5, 2008

Healthcare follies

I am getting ready to leave for my final summer trip to Las Vegas, where it will be appearing with a host of conservative luminaries, such as Ron Paul, Bob Barr, Steve Forbes, Christopher Hitchens, and Dinesh D'Souza. I will be in two debates beginning next Thursday. David Himmelstein and I will be debating single-payer with John Mackey, the head of Whole Foods and John Goodman, the man who invented health savings accounts. Here is what I whipped up today. I would very much appreciate any comments.

The second debate will concern the nature of freedom. There, I will be debating John Mackey again and two others whom I do not know. I will call for help again on that one is in his I get something prepared. Here is my paper.

Here is the website for the conference.

A Coup in Australia and the CIA

Many Australians, predominantly of the baby boomer generation, believe that a US-backed coup occurred in Australia on the 11th of November 1975. Thirty years after the downfall of the Whitlam Government, archival work established "the ready complicity of the Australian press and a role for the US National Security Council in Whitlam's demise" according to Associate Professor Stephen Stockwell from Griffith University in Queensland.
The Whitlam Government was the first Labor (and Social Democratic) government to be in power in Australia for 23 long years. There has not been a Social Democratic government here since. It was elected by the Australian people on 2nd December 1972 and again on 18th May 1974. But it was dismissed by the Governor General, Sir John Kerr, on 11th November 1975; one day after ASIO (Australian Security and Intelligence Organisation) received a a cable from the CIA's Theodore Shackley "which was a virtual ultimatum to the head of ASIO to do something about the Whitlam Government."
This document reached its target a month or so after George Bush Senior became Director of the CIA.

Thursday, July 3, 2008

Kurds and Central Government Sign Secret Deal on Oil

Azzam in English reports that Jaber Khaleefa of the Iraqi parliament's Oil and Gas Committee has said that a secret deal has been signed between the Kurdish Regional Government (KRG) and the Iraqi central government, presumably the Oil Ministry, on oil deals. This deal allows the Kurds "to extend their political autonomy over their oil riches." This deal reflects on the one side an inability to get an oil bill passed in the central parliament, while on the other hand there is not enough support in the parliament to block any deals being signed by the executive authorities of either government. So far the KRG has 17 such deals and the central government now has 35. Generally, the central government tends to sign with big major firms like Exxon Mobil, while the Kurds tend to sign with smaller minors, with the biggest fuss having been about their deal last year with Hunt Oil, owned by strong Bush backer, Ray Hunt, also a member of his Foreign Intelligence Oversight Board.

Regarding the central government deals, much of the focus in recent days has been on no-bid short term contracts that have been signed with five big majors, including Total of France, as well as such old Seven Sisters as Royal Dutch Shell and BP, in addition to Exxon Mobil and Chevron (the latter having swallowed up the other two, Gulf and Texaco). However, officially rules for longer term contracts are supposed to be set by an official law, but none has been passed, and for now it looks like none will be passed. What seems to be operative is this secret deal.


I had the pleasure of meeting fellow blogger Michael Perelman at the History of Economics Society meeting in Toronto this past week-end. Michael gave a fascinating paper, "The Economics of Guano," which made the case for a 19th Century proto-environmentalism in the work of the American economist Matthew Carey. Marx made an appearance (in the paper, not at the conference). At one point, Michael suggested that economists, having spent so much time on the analysis of marginal increments, may want to focus for a change on marginal excrement. I guess you had to be there.

Meanwhile: Breakfast in Wimbledon this Saturday with Venus and Serena in the Women's Finals! I'm there.

Tuesday, July 1, 2008

Observations on the 15th World Congress of the IEA

The International Economic Association was formed in 1956 from a UNESCO mandate, with an initial idea being to increase East-West communication, and with a key person pushing its establishment being the late Austen E.G. Robinson of Cambridge University, the husband of Joan Robinson. Every several years the IEA has a world congress, and the 15th was held this past week in Istanbul, Turkey. About 1,000 participants attended representing 53 countries, with the president of Turkey speaking in the opening session. This is the fifth of these I have attended and make some observations here.

1) About half the participants were from the host country, a good deal higher than I have seen in the past. Also, quite a few people I have always seen at these things were not there.

2) Many sessions were on international debt crises and balance of payments issues, with the current president, Guillermo Calvo, giving an address on recent crises. He mostly focused on Mexico, Russia, Argentina, and Turkey, arguing that all these countries bounced back well after their crises and massive devaluations, although he said that we do not really understand why as many things that should have been happening to bring this about did not happen. He seemed not very able to link all this to the current crises.

3) Chinese attendance was low. Some speculated that this was due to Calvo having apparently criticized them for not revaluing their currency more. As in the past there was substantial Russian participation, with several of their top people there, such as Victor Polterovich.

4) There were several major sessions and addresses on India.

5) Joseph Stiglitz spoke twice, once in an invited session on international financial crises and in the final plenary on global warming and social justice. In the former he went further than Calvo and called for a clear lender of last resort at the global level and the establishment of a new global currency along the lines of the "bancor" proposed by Keynes at Bretton Woods. He said the dollar is doomed, but the euro is not up to the task, and a combo of the two would be an unstable disaster.

Regarding global warming he advocates an important push on deforestation, which I support. He also is hot for a "carbon added tax" and strongly criticizes cap and trade solutions. I find him analyzing a CAT based on its theoretical virtues while ignoring its practical problems while doing just the opposite with cap and trade. Given that at Kyoto the US shoved cap and trade down the rest of the world's throat, there is no way the rest of the world is now going to follow the US to get rid of cap and trade in favor of a carbon tax (which would have serious problems passing the US Congress anyway).

7) Dani Rodrik of Harvard, but of Turkish origin, gave a plenary on his "One Economics, Many Recipes" paper. For those who have not seen it, he defends orthodoxy in economic theory, but says that a single approach to theory is compatible with a variety of policy approaches, including very unorthodox ones. I have sympathy with him, but think he overdoes his defense of standard economic theory.

The US Supreme Court and Suicides in Washington

In light of the recent ruling by the US Supreme Court overturning Washington, D.C.'s law against handguns, I wish to remind people of an earlier post of mine here. The gist is that while the evidence on violence and gun control is murky (the Supreme Court cited certain studies that claim that greater gun availability may be correlated with lower violent crime, at most a weak relationship), they did not note nor mention the very strong relationship that appears to hold in the US data for suicides and gun availability. In particular, Washington D.C. has both the lowest rate of gun ownership and the lowest suicide rate of any "state," with most of the other states at the bottom of the suicide rate list also being at the bottom of the gun ownership rate list.

So, correlation may not prove causation, but I predict an increase in the suicide rate in Washington, D.C. as a result of this ruling. Let the blood of the coming dead rest on the consciences of Justices Scalia, Roberts, Alito, Thomas, and swing voter Kennedy, although somehow I doubt they will have very many people telling them about this.

The EU's Catch-22 for Turkey

Have just spent most of this past week in Istanbul, Turkey where I picked up on various socio-political-economic currents from reading local papers (in English only, the Turkish Daily Press), and just observing the street scenes. I am struck by the sharpness of the divide between the established secular system and the rising Islamist movement. This has most recently come to a head in the move by the secularist ("Kemalist") Supreme Court to consider a case to close down the current ruling AKP party, which is viewed as "moderately Islamist" and was democratically elected, along with the president, Abdullah Gul (who spoke to the opening session of the 15th World Congress of the International Economic Association [IEA], which conference I was attending in Istanbul). This is analyzed well in an invited essay by Andrew Arato on June 30 on Juan Cole's site at, entitled, "The Turkish Constitutional Crisis and Board Beyond." I note that this case poses a Catch-22 for Turkey in its generally internally popular efforts to join the European Union, which keep getting pushed back by various European countries, with the latest setback a new move to put Ukraine ahead of it on the list. The Catch-22 is that many in Europe do not want Turkey in the EU because it is "too Islamic," but the opponents to the Islamic movement are "undemocratic," (the military and the Supreme Court). Thus, either way, the opponents of Turkish entry into the EU get their way: no entry because either too Islamic or too undemocratic.

Unsurprisingly another issue that is inolved in this is clothing, in particular, headscarves for women. The parliament voted to allow women to wear headscarves to universities, but the Supreme Court also just overturned that as against the constitutionally mandated "secular" nature of Turkey. This secular nature was imposed in the mid-1920s by Mustafa Kemal "Ataturk," a title meaning "Father of the Turks," who ended the Ottoman sultanate, empire, and caliphate, changed the calendar and Latinized the alphabet, along with banning anything but western clothing in public places (men are not allowed to wear beards to work, although mustaches are OK). I heard him praised as a "revolutionary" more than once while there, with the model being Napoleon Bonaparte, I believe, who also did such things. The feudal titles of the Ottomans were also abolished by him to form "The Republic of Turkey." An irony on the headgear issue is that he banned the fez, which was the general headgear of the late Ottomans, who triggered the Arab nationalist revolt when they tried to impose the fez on their Arab subjects in the early 20the century. The fez in turn was imposed in 1826 after the putting down of a revolt by the powerful Jannissary Christian slave militias, with headgear prior to then being very ornate and specific to precise positions in society. Thus, the fez itself was a move towards western egalitarianism. As it is in the street, I would say that women were about half and half wearing or not wearing headscarves. The older ones with headscarves looked poor and rural, but many younger ones looked quite stylish and chic and well educated.