Meet the real-life Lucille Bluth: Dorothy Rabinowitz of the Wall Street Journal’s editorial board

A Publication’s Spirit, Captured – The Atlantic:

I’ve always wondered how exactly to describe the temperament, the broadmindedness, the analytical subtlety, the Id that through the decades have shaped the Wall Street Journal’s editorial page. Conveniently, the Journal has filled that need, via this video interview with one of its editorial board members. Henceforth when you read the Journal’s editorials, I invite you to hear this voice, expression, and tone.

She’s arguing against letting people use bikes at a low cost. No pedestrians have been hit by a bike in New York in the last four years – while 597 have been hit by cars and trucks. She is told this and responds with a monologue that could easily pass for the words of the Bluth matriarch:

“Before this, it was dangerous. Before this, every citizen knew – who’s in any way sentient – that the most important danger in the city is not the yellow cabs, it is the bicyclists who veer in and out of the sidewalk – empowered by the city administration with the idea that they are privileged, because they are helping, they are part of all of the good forward-looking things.

The fact that the city is helpless before the driven, personal ideological passions of its leader – in the interests, ‘allegedly,’ of the good of the city – this can take many forms, but we have seen the most dramatic exposition of this in our city…

This woman is on the editorial board of the largest newspaper in the United States. Good lord.

Why you shouldn’t listen to Glenn Beck for investment advice: gold prices down 30% since 2011

After the Gold Rush – Nouriel Roubini:

Sixth, some extreme political conservatives, especially in the United States, hyped gold in ways that ended up being counterproductive. For this far-right fringe, gold is the only hedge against the risk posed by the government’s conspiracy to expropriate private wealth. These fanatics also believe that a return to the gold standard is inevitable as hyperinflation ensues from central banks’ “debasement” of paper money. But, given the absence of any conspiracy, falling inflation, and the inability to use gold as a currency, such arguments cannot be sustained.

A currency serves three functions, providing a means of payment, a unit of account, and a store of value. Gold may be a store of value for wealth, but it is not a means of payment; you cannot pay for your groceries with it. Nor is it a unit of account; prices of goods and services, and of financial assets, are not denominated in gold terms.

So gold remains John Maynard Keynes’s “barbarous relic,” with no intrinsic value and used mainly as a hedge against mostly irrational fear and panic. Yes, all investors should have a very modest share of gold in their portfolios as a hedge against extreme tail risks. But other real assets can provide a similar hedge, and those tail risks – while not eliminated – are certainly lower today than at the peak of the global financial crisis.

It’s simple: as the market gains confidence that we aren’t headed towards economic oblivion, the price of gold falls. Since the economy is actually doing alright this year, the drop over the last few months has been rather dramatic. It’s not a pretty sight:

Youth unemployment in Greece and Spain above 50 percent

Europe’s Record Youth Unemployment: The Scariest Graph in the World Just Got Scarier – Derek Thompson – The Atlantic:

My God, look at Greece’s trajectory. That thing isn’t slowing down. Since April 2012, Greek youth unemployment has grown by about one percentage point a month. At that rate, it would pass 70 percent in early 2014.

It is suddenly not insane to imagine a youth unemployment rate of 70 percent in the developed world. And that is insane.

Mind-boggling. I’d be rioting too.

The economy is doing alright despite government cutbacks

The economy is holding up surprisingly well in a year of austerity:

It adds up to this reality: In a year when tax increases and spending cuts by the federal government were expected to bleed life out of the economy, the strengthening housing and financial markets are proving to be more powerful than acts of Congress.

Americans with higher incomes are wealthier thanks to the stock market’s 16 percent rise so far in 2013. Middle-income earners, whose assets are disproportionately tied up in their homes, are becoming wealthier thanks to higher housing prices — up 10.2 percent in 20 major cities in the year that ended in March, according to the S&P/Case-Shiller home price index released Tuesday.

The tax increases and spending cuts as a result of the fiscal cliff this winter haven’t crushed the economy – but they have kept it from doing much, much better.

What will we do when all the jobs are gone?

After Your Job Is Gone:

Do you have a job? Do you like having a job? Then I have some bad news for you. The Guardian is worried “today’s technologies are going to remove people from economic activity completely.” Techonomy says “America’s real worker crisis is not immigration, it is jobs.” Om Malik asks: “People talk about robot-helpers and an army of drones, but…what is going to happen to millions of people who will be replaced by those drones and robots?”

Wrong tense: the right question is what is happening.

An excellent article by Jon Evans for TechCrunch.

Machines and the software that runs them are going to make most workers completely unnecessary over the next few decades. So what will we do?

It’s not like everyone can be a programmer or an engineer – hell, even those can be automated to a degree. Are we going to have a moderately-taxed classed of super-rich that finances a “basic income” (or in libertarian terms, “negative income tax”) for everyone else?

Or are we going to let millions struggle for the few jobs that are left until we go through some kind of global revolution that sends us back to the Dark Ages?

Tesla’s Elon Musk leaves Zuckerberg’s lobbying group FWD.us

Exclusive: Elon Musk quits Zuckerberg’s immigration advocacy group | Reuters:

Billionaire environmentalist Elon Musk has quit a Silicon Valley advocacy group formed by Facebook founder Mark Zuckerberg after the group funded ads for senators touting their support for an oil pipeline and oil drilling in Alaska.

Musk leads one of the world’s best known “green” companies, electric carmaker Tesla. A Tesla spokeswoman told Reuters on Friday that the South African-born entrepreneur preferred not to elaborate on his reasons for leaving FWD.us.

I was initially excited when I heard that Mark Zuckerberg and other Silicon Valley leaders were founding a lobbying group to push for immigration reform. If anyone could cause real change in Washington, it had to be a bunch of liberal millionaires and billionaires with money to spend, right? Then the group started supporting Senators in favor of Arctic drilling and the Keystone XL pipeline. Not cool, Zuckmeister.

The reason behind government bloat: crony capitalism

John Daly, “Big versus small government is not a real issue”:

The underlying problem of government bloat is crony capitalism.  Special interests – like AARP and the military industrial complex — rule.

The smartest thing that the special interests and the military-industrial complex ever did was associating people who talk about special interests and the military-industrial with left-wing loonies. They are the biggest single problem within our political system, yet they are essentially impossible to get rid of because of their money and influence.

Richard Stallman – The Right to Read

The Right to Read – GNU Project – Free Software Foundation (FSF):

This put Dan in a dilemma. He had to help her—but if he lent her his computer, she might read his books. Aside from the fact that you could go to prison for many years for letting someone else read your books, the very idea shocked him at first. Like everyone, he had been taught since elementary school that sharing books was nasty and wrong—something that only pirates would do.

And there wasn’t much chance that the SPA—the Software Protection Authority—would fail to catch him. In his software class, Dan had learned that each book had a copyright monitor that reported when and where it was read, and by whom, to Central Licensing. (They used this information to catch reading pirates, but also to sell personal interest profiles to retailers.) The next time his computer was networked, Central Licensing would find out. He, as computer owner, would receive the harshest punishment—for not taking pains to prevent the crime.

This short tale of dystopian fantasy from early 1997 looks more realistic with each passing day – though Stallman might have been a little optimistic with how long it would take for these change to happen.

Why is Robert Reich calling for tighter monetary policy?

Robert Reich (A Story for May Day: The Fed, Apple, and Trickle-Down Economics):

The Fed’s policy of keeping interest rates near zero is another form of trickle-down economics.

For evidence, look no further than Apple’s decision to borrow a whopping $17 billion and turn it over to its investors in the form of dividends and stock buy-backs.

[…]

It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that’s not what’s going on. Apple, remember, is still sitting on $145 billion.

[…]

It’s a sump pump with the Fed on one end buying up bonds to keep interest rates low, and shareholders on the other end raking in the returns. 

Get it? Easy money from the Fed can’t get the economy out of first gear when the rest of government is in reverse. 

The reason that Apple is borrowing is that they can pay ~2-3% interest on the bonds they issue or they could pay a ~35% corporate income tax on the money they bring in from overseas. Apple is so absurdly profitable and has such an ungodly huge cash pile that it can afford to go with the first option.

Apple has become a company where the best option for its shareholders is to rack up billions in debt. 

Reich implies that Apple is somehow in the wrong for doing this for its shareholders rather than to “expand operations and create new jobs.” I fault his logic:

1. It’s not like Tim Cook and Co. are doing this because “greed is good.” In case you haven’t notice, Apple’s stockholders have taken a beating since September of 2012. Falling from over $700/share to below $400/share makes the average investor (and most “analysts” or as I like to call them, idiots) worry about the competency of the leadership of a company. Even as CEO, you can be fired. Apple’s executives have a fiduciary duty to bring value to shareholders, and this is a very mathematically sound and entirely legal way to do it.

2. Apple is a consumer electronics company that makes what are considered the best devices year-in and year-out. I get that Reich is trying to use this to talk up creating jobs, but there are only so many people qualified to work at Apple. With unemployment for software engineers at 2.2%, how many people does Reich think are out there that have the experience needed to work on the hardware and software from which Apple derives its reputation for quality? If anything, this seems like it would only cause a bidding war in an industry that already has amazing salaries and benefits at top companies – which would concentrate wealth upwards, which is exactly what Reich is arguing against.

Besides the whole Apple nonsense in the article, the underlying issue that Reich fails to address is the corporate income tax in this country. Companies like Apple would rather borrow than pay the 35% rate. Reich implies that the Fed holding down interest rates is what makes this feasible, but again, I find faults in his logic:

1. Apple borrows so damn cheaply because it’s basically the best borrower and lender could ask for – it’s predictably profitable and has $145 billion in cash. I’d trust my money with Apple over the US government any day. Tighter monetary policy wouldn’t do much to change that. If anything, it would cause lenders to move from “risky” things like small businesses that create jobs to “safe” bets like Apple. Still kind of arguing against yourself there, Bob.

2. Econ 101 (well, Econ 1 at Berkeley) tells us that tighter monetary policy (raising interest rates) means slowing down the economy. Are the “mere” billions in tax revenues this would bring in from companies with cash held abroad be worth the havoc this would unleash on the economy? The corporate income tax is 35% – interest rates would have to be pretty high for borrowing to look less appealing than that. Higher interest rates hurt everyone that Reich claims to be fighting for – from those struggling to afford homes of their own to small businesses trying to hire and expand. 

I think the real issue that Robert is trying to hide behind the trickle-down straw-man is that the corporate income tax is pretty high. Personally, I’d like it to be lowered to the point where it brings in actual revenue and the smart move for companies isn’t to throw away money by taking on debt.

“Sonia Sotomayor knows how many joints you can roll with 1.3 grams of weed”

Good News! You Can’t Be Automatically Deported for Sharing Three Joints | VICE United States:

What’s most surprising about the decision is that noted straight-edger John Roberts and his colleague Antonin Scalia, who’s still pissed about the 1960s, joined the four liberals and moderate Anthony Kennedy in reversing the mandatory deportation of Adrian Moncrieffe. Adrian is a Jamaican citizen who came to the US when he was three and was caught with 1.3 grams of marijuana during a traffic stop in Georgia in 2007. For his crime, the Department of Justice sought to deport him. How much pot is 1.3 grams? According to Sonia Sotomayor, the author of the Court’s opinion, it’s “the equivalent of about two or three marijuana cigarettes.” The more you know!