Eugene Fama, one of the winners of this year’s Nobel in economics, is the fellow who proposed that all markets are efficient all of the time—more precisely that market pricing accurately captures all available information and thus creates “correct” prices. Fama also insisted that there is no such thing as a price bubble.
Somehow, the man missed one of history’s great bubbles and the collapse that followed—an epic case of markets getting prices wrong. He also missed the fact that markets have incorrectly priced carbon, leading to global climate disaster, which Lord Nicholas Stern correctly termed “history’s greatest case of market failure.”
If President Barack Obama and congressional Democrats wanted to maximize the political advantage they're getting from the shutdown/default crisis, they'd agree to at least one part of the short-term deals Republicans have offered, raising the debt ceiling for only six weeks at a time. Then we'd have one default crisis after another, and the standing of the GOP would keep on its downward trajectory until—let's just pick a date at random here—November 2014. But Republicans won't do that; they're now insisting (and good for them) that the deal has to extend at least a year into the future so we don't have to keep going through this. If they get that deal, though, the issue will fade and voters could start to forget how reckless Republicans have been.
They could forget, but I'm guessing Republicans won't let them.
Floating City: A Rogue Sociologist Lost and Found in New York’s Underground Economy is a new book by Sudhir Venkatesh that explores the struggles and aspirations of disparate New Yorkers and shows how the city’s underground economy connects its inhabitants from all walks of life. In the book, Venkatesh introduces us to a range of characters: Shine, a crack dealer breaking into the high end cocaine market centered around the art galleries, bars, and clubs of the rich; Manjun, a porn store clerk who allows prostitutes to rent his back room; and Venkatesh’s friend, Analise—the beautiful daughter of a wealthy family—who confesses to him that she manages a group of high-end prostitutes that cater to the rich.
Ten days into the shutdown, it’s easy to wonder just how much the federal government helps people day-to-day. We’ve heard about delays in highways maintenance and about federal workers who have to wait until the government opens to get paid. What about those programs conservatives are always complaining about? You might have expected stories about people suffering without help from various federal services—from food stamps to welfare checks. Instead, there’s been little to indicate needy people are going without.
That’s because the worst potential effects of the shutdown have been delayed—for now.
TskRabbit.com markets itself as a Web service that matches clients seeking someone to do odd jobs with “college students, recent retirees, stay-at-home moms, [and] young professionals” looking for extra income. The company website calls it “a marketplace dedicated to empowering people to do what they love.” The name Task Rabbit doesn’t exactly suggest the dignity of work, and the love often takes humble forms. Customers hire Task Rabbits to clean garages, haul clothes to the laundry, paint apartments, assemble Ikea products, buy groceries, or do almost anything else that’s legal.
With President Obama’s belated decision to name Janet Yellen to chair the Fed, several questions arise.
First, is Yellen likely to be confirmed? Almost certainly. The Republicans have lost a lot of public support by shutting down the government and playing chicken with the debt ceiling. They are not likely to trifle with the one functioning branch of government. Despite the Republicans’ intermittent uses of the filibuster, I’d be surprised if they went to the barricades to block Yellen.
When the government shutdown ends and September’s jobs report is released (it was supposed to appear last Friday), careful readers will notice that women are holding a number of jobs either almost or just above their all-time high (which came in early 2008), while men are still millions short of their own pre-crash milestone. Hailing a successful she-covery, however, obscures the fact that women still face an elevated unemployment rate and that the barriers that kept that them from earning as much as men before the recession are still in place. Women are millions of jobs short of where they would be if the economy was at its full potential. Many of the new jobs they have are low-paying. The main causes of the pay gap, like gender segregation in the labor market, have not gone away. That women are gaining jobs is a good thing, but policymakers should not be convinced their work is over.
Spin is overrated. Alas, it’s never going away. If there’s one thing that political scientists try, repeatedly, to convince the reporters and correspondents who cover politics of, it’s that fundamentals tend to matter a lot more than they think, and opinion manipulation matters less. Not none—but in many cases, not very much.
It's a morning in early August when Detroiters awaken to find a piece of Hong Kong rising in their midst. Beneath the shuttered skyscrapers of Grand Circus Park, the multi-story setpiece for Michael Bay's Transformers 4 buzzes with work crews painting balustrades and roofing life-sized tong lau. It has been little more than a week since Detroit became the largest city in the United States to declare bankruptcy.
You could say that Dave Bing is a celebrity politician. But Detroit’s mayor is so mild-mannered, it’s easy to forget that he’s a Hall of Fame basketball star who was drafted second overall in 1966, earned Rookie of the Year honors, and played in the NBA for 12 seasons—most of them, naturally, with the Detroit Pistons. The league chose him as one of its 50 greatest players in 1996, and the Pistons retired his number.
But that’s all history. When Detroiters elected Dave Bing to the city’s top office four years ago, it wasn’t because of his fame. It was because he was boring.
This budget crisis, weirdly, has nothing to do with the budget. It is the expression of the Tea Party Republicans’ animus against Obamacare, their general loathing of government, and their willingness to resort to wildly destructive tactics. As Senate Majority Leader Harry Reid, one of the few heroes in this mess, put it so aptly, “They’ve lost their minds.”
On a clear day this past May, Cody Wilson stood at a firing range just south of Austin, Texas. The BBC crew he’d invited stood a few feet away as the 25-year-old University of Texas law student adjusted his earplugs and sized up his target—a mound of dirt off in the distance. He raised a small handgun, pulled the trigger, and a .380 caliber shot rang out, kicking up a cloud of dust. The pistol Wilson held was made of black-and-white plastic and looked like a cheap children’s toy. What had drawn the BBC was that the gun, which Wilson dubbed the “Liberator,” had been created with an $8,000 3-D printer bought used on eBay. A self-described “techno-anarchist,” Wilson is on a quest to prove that new technology is rapidly changing what we can hope to regulate—from information and ideas to physical objects. The proof is that anyone with an Internet connection, a computer, and a 3-D printer can now manufacture a gun.
Don’t worry about John Boehner. Yes, there seem to be near-constant rumors and suspicions of a revolt against him, and Republican members of the House have been conspiring with Texas Senator Ted Cruz. It’s very unlikely to actually cost him his job. He’s probably going to survive and remain as speaker of the House just as long as he wants to. At least, as long as divided government and the Republican House majority last.
Last week, House Republicans passed a bill that would cut the food stamp program by about $40 million over the next ten years. They’re drawing on headline numbers—the program serves about 47 million people each year and has the biggest price tag of any program in the farm bill, $80 billion for the next five years —to drum up support. (The aid, technically known as the Supplemental Nutrition Assistance Program, or SNAP, is still known as food stamps to nearly everyone who gets it.) There’s very little chance that the bill will be enacted, given the more moderate makeup of the Senate, although it’s likely that some cuts are will end up on the president’s desk. (The Senate is cutting $4.4 billion from the program.) Still, food stamps are one of the most robust federal entitlements for the poor we have left, so it’s always going to be a target for cuts. It’s worth looking beyond those numbers in the news to see how the program is performing—and why it’s still essential.