Janet Yellen, President Obama’s superb pick to be the next chair of the Federal Reserve, should have been a shoo-in all along. In fact, it was widely thought this past spring that, as vice chair of the Federal Reserve, she was the most likely candidate to replace Ben Bernanke when his term as chair was scheduled to end early in 2014. But in the months before October 9, when she stood beaming next to President Obama in the White House as he finally announced her as his pick to succeed Bernanke, a curious campaign had emerged to nominate Larry Summers, a close economic advisor to the president, for the position. The Summers push received copious media coverage, reportedly fueled by senior White House advisors.
How much damage have the Republicans done to themselves going into the elections of 2014 and 2016? And has President Obama resolved to hang tough, not just in this round, but in the one that follows and the one after that?
Sometimes, Tom Friedman writes a column that is such complete baloney it makes you want to retch. Rather than risking soiling my shoes, here is a point-by-point rebuttal to Friedman’s opus du jour, titled: “Sorry, Kids. We Ate It All.”
Friedman’s column swallows whole the budgetary malarkey of the corporate Fix-the-Debt lobby and its Wall Street sponsors. Namely, the reduced horizons of the next generation are the result of the gluttony of old folks—and of unions.
If you want a sense of where the nation’s job market is headed, a good place to stand is inside the half-mile-long Skechers warehouse in Moreno Valley, California, where box after box of shoes is stacked upon row after row of shelving, which soars some 40 feet in the air. Physically, the place is a wonder—quiet, sleek, and environmentally friendly (at 1.8 million square feet, it’s the largest officially certified “LEED Gold” building in the country). But what’s most remarkable about the $250 million structure, which opened in 2011, is how few people work there.
It didn’t happen because nobody wanted it, and everybody grasped the horrific risks. In the event, the common European civilization was destroyed, three empires fell, 16 million people died, and 20 million were wounded. So World War I couldn’t happen because everyone knew how awful it would be.
In August 1914, virtually all leaders anticipated a short set of skirmishes, a readjustment of borders as in other recent wars, and everyone would be home for Christmas. But, you know, stuff happens.
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.