Category Archives: American Society

Annals of the Great Recession II.

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The Great Recession that began in 2007 ended in 2009.[1] Five years afterward, New York Times reporters asked how the recession had altered the American economy.[2] How was the economy different from before the recession began?

There were 1.5 million fewer construction jobs. Construction isn’t likely to fully revive. Even now, almost 20 percent of homeowners with mortgages owe more on their houses than the current market value of those homes. On average, these jobs had paid $55K a year.

There were 1.7 million fewer manufacturing jobs. Before the recession there were about 14 million Americans employed in manufacturing. That means that manufacturing employment fell by about 12 percent.

However, pre-recession manufacturing amounted to only about 10 percent of the labor force. Manufacturing jobs have been deserting America for decades. The loss of manufacturing jobs has been much more pronounced than the loss of manufacturing production. Manufacturers have used technology to increase production while cutting their work force. Overall, the loss of these high-wage jobs is probably permanent. On average, these jobs had paid $51K a year.

There were 1.5 million more health services jobs than before the recession.

The recession didn’t even dent technology companies. Technology companies both generated wealth for owners and created well-paying jobs. For example, the number of smartphones shipped rose from 20.1 million in 2007 to 136.6 million in 2013.

“Fracking” has boosted employment and income in states where it has been developed. It also has lowered energy costs. Chemicals and plastics consume a lot of energy, so cheap natural gas has given these industries a leg up. It also has improved the trade balance by reducing energy imports.

Health-related fields, energy, and technology appear to be the central pillars of the American economic future.

What did unemployment show? Population growth since the recession meant that the economy needed to add at least seven million more jobs than it did to absorb the growth. In Summer 2014, four million people were still counted as long-term unemployed and six million weren’t counted because they had just given up looking for work after many rebuffs. The slack labor market held down real wages as a low level of inflation continued. Hence, unemployment could stay high even as the economy grew. That, in turn, kept wages from rising in the way that they would in a tight labor market.

To get work, many people took lower-paying jobs than they had held before the recession. Eighty percent of Americans earn less than they did before the recession. Indeed, the median income fell from $55,627 in 2007 to $51,017 in June 2014. Many people also supplemented their income with government benefits like food stamps. In 2007 26.3 million people received food stamps; in 2009 47.6 million people received food stamps.

Continuing high unemployment and stagnant wages meant that it felt to any normal person that the recession remained in force. It’s hard to see the dawn when it is still so dark.

[1] The National Bureau of Economic Research has technical definitions for “recession” and “depression.” These have nothing to do with the popular perception of economic conditions. Therefore they become the butt of out-of-office politicians, late-night comedy-show hosts, and other people of that ilk.

[2] Shaila Dewan, Nelson D. Schwartz, and Alicia Parlapiano, “How the Recession Reshaped the Economy,” NYT, 15 June 2014, pp. 6-7.

Annals of the Great Recession I.

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In a column in the New York Times, Neil Irwin takes up an important, under-analyzed topic.[1] He doesn’t take it very far, but it’s better than a poke in the eye with a sharp stick.

He begins by reporting on a new book on the “Great Recession” by the University of California-Berkeley economic historian Barry Eichengreen.[2] The book is 500 pages long and came out in early January 2015, so I don’t think that Irwin has fully digested what Professor Eichengreen has to say. (I sure haven’t.) All the same, he brings out several important points.

First, the Great Depression of the 1930s and—more importantly—the Second World War legitimized Keynesian counter-cyclical spending to moderate the economy. Thus, when the American economy began to plummet in early 2008, both Republican President George W. Bush and the Democrat-led Congress agreed on a $150 billion to cover the credit markets (the TARP). Within a year, however, Republicans had turned against big deficits. When the newly-elected President Barack Obama called for a $787 billion stimulus bill, scarcely any Republicans could be found to vote for it. For the next several years the Republicans kept up their assault on deficit spending. By 2011 Democrats also were running away from deficits.

Second, in the absence of spending action by Congress, responsibility for countering the recession fell to the Federal Reserve Bank (the Fed). Here again, Eichengreen finds too little effort made too late. The Fed’s stimulation mostly came a day late and a dollar short. “Quantitative Easing” through bond-buying pumped money into the economy. It just never pumped in enough money until the ambitious program that began in September 2012 (and which has now come to an end).

The result of these lamed policies came in an excessively-long recession that has just ground the spirit out of many Americans. Irwin is good on pointing out the events. He’s less good at explaining them. Why did Republicans turn against Keynesianism?[3] Why did Democrats, of all people, turn against the legacy of Franklin D. Roosevelt?

What is missing in Irwin’s explanation is any analysis of the rise of the “Tea Party.”[4] Not everyone responded well to the stimulus bill. A Seattle-area blogger named Keli Carender organized a protest against the bill in February 2009, then talked it up on-line. Soon, protests took place in other cities. Then Rick Santelli’s on-air rant against bail-outs went viral. Then Fox News pushed the cause. April 15, 2009 provided a forum for lots of protest rallies. ObamaCare added fuel to the fire.

This “Tea Party” movement was largely made up of previously apolitical ordinary citizens who had been energized by their economic concerns. Underneath this concern is a feeling that they have “lost” their country to “elites.” At the same time, many Tea Party people had “social conservative” views on gay marriage, the Second Amendment, hostility to the expansion of government authority by the courts). Illegal immigration formed another concern. Finally, some of the Tea Party supporters were just nuts: “birthers” and “Obama = Hitler” types. The specific targets of the “Tea Party” were the rapidly expanding federal deficit, the growth of “big government,” and taxes. The agenda of the movement appeared to be unrealistic and impossible to achieve: lower taxes combined with a balanced budget.

The “Tea Party” pressured Republicans. The Democratic abdication is harder to figure. Nobel Prize economist Paul Krugman argued that the Obama Administration’s stimulus program was half the size it needed to be, was spread over two years instead of front-loaded into one year, and contained a lot of tax cuts that were a waste. However, Irwin (and apparently Eichengreen) still trot out the tired excuse that the administration under-estimated the scope of the problem. More importantly, perhaps, President Obama felt no commitment to stimulus. Bob Woodward has quoted him as saying “Look, I get the Keynesian argument, but the American people just aren’t there.” But why didn’t he use the “bully pulpit” to get them there? And why didn’t Democratic leaders tell him—as Al Gore once told Bill Clinton, to “get with the program”? There is a lot of blood on the floor from this unnecessary disaster and a lot of blame to go around.

[1] Neil Irwin, “The Depression’s Unheeded Lessons,” NYT, 11 January 2015.

[2] Barry Eichengreen, Hall of Mirrors: The Great Depression, the Great Recession, and the Uses and Mis-Uses of History (New York: Oxford University Press, 2015).

[3] Richard Nixon once remarked that “We are all Keynesians now.” Republicans may yet come to rue the day they tossed over the ideas of Nixon for those of Ronald Reagan. Nixon also had proposed national health care, only to have it sunk by the petty personal jealousy of Teddy Kennedy.

[4] “The Rise of the Tea Party,” The Week, 19 February 2010, p. 13.

 

Thoughts for the New Year.

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I don’t know anything. So, here are my thoughts on a couple of issues.

Climate change is a grave reality. However, I doubt that people can entirely hold back (let alone turn back) global warming. Carbon-burning is central to the industrialization of developing-economies. There aren’t a lot of cheap and ready-to-use alternatives. Instead, there is going to be a long period of adaptation to worsened conditions. It is going to make environmentalists, intellectuals, and other “progressive” people very angry that there will turn out to be market-driven profit opportunities when statist restrictions might have provided more desirable outcomes.

In terms of foreign policy, Vladimir Putin is considerably more of an adult than are American leaders. Balance-of-power politics and spheres of influence are realities in world politics. Power and influence are not the single and permanent prerogative of the United States. For one thing, Ukraine is to Russia as Mexico is to the United States. (“Pity poor Mexico. So far from God, so near the United States.”) For another thing, Putin has tried to help the US out of a couple of ditches into which American leaders have driven it. Syrian chemical weapons and a possible solution to the Iranian nuclear problem are the key examples. All the while he has been vilified because he isn’t a democrat at home and he’s resisting the onward march of Western power around the borders of Russia.

In the Middle East we are witnessing a re-writing the Sykes-Picot Agreement. Iraq is fragmenting into Shi’ite, Sunni, and Kurdish enclaves. This fragmentation is being papered-over during the current emergency. The Shi’ites will never be able to repair their behavior during the Maliki period. Syria is going to fragment into Alawite, Sunni, and Kurdish enclaves. A Kurdish state will emerge. This new country will have trouble with both Turkey and Iran. Will Jordan or Saudi Arabia absorb the unstable and impoverished new Sunni micro-state in western Iraq?

The “two-state solution” to the Israel-Palestine conflict isn’t. Israel cannot afford to have a Palestinian state created. That state would be implacably revanchist, regardless of whatever professions its spokesmen might make in order to obtain sovereignty. Over the centuries, many people have felt that the problems of the world could be resolved if only the Jews would die and stop bothering people. Well, the Israelis aren’t buying this line.

The United States gets much less from the US-Israel alliance than does Israel.

ISIS isn’t a serious problem. The enthusiasm for “jihad” among many Muslims is a serious problem. It is likely to be around for a long time. I’m not sure that it can be de-legitimized by Western propaganda. I’m not sure that playing military whack-a-mole with every new outbreak will solve the problem.

Much as I agree with the objectives being pursued by President Obama on some key issues, I don’t believe that he has the authority for some of his actions. The Supreme Court is likely to overturn the authority-grab carried out by the EPA. The immigration problem wasn’t/isn’t a crisis. It’s just a stick with which to beat the Republicans and an effort to keep Hispanic-American voters on the side of the Democrats. American liberals are going to rue the day that they celebrated his unilateral actions on coal-burning energy generation and immigration. One day, a Republican president will invoke the Obama example.

Decline of the Death Penalty.

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In 1972 the United States Supreme Court imposed a moratorium on capital punishment on the grounds that “the arbitrary and capricious application of capital punishment in America represented cruel and unusual punishment.” In 1976 it permitted executions to start up again after states introduced reforms to address the concerns expressed by the Court. Since 1976 American courts sentenced over 4,600 people to death. Of these, 820 were executed and 102 were exonerated. This put the US in the same lethal category as China, Iran, and Saudi Arabia.

However, these figures are very deceptive. First of all, twelve states (Alaska, Hawaii, Maine, Vermont, Massachusetts, Rhode Island, West Virginia, Michigan, Iowa, Minnesota, and North Dakota) did not have a death penalty. Second, of the 38 states with a death penalty, six (New Hampshire, Connecticut, New York, New Jersey, Kansas, South Dakota) have had no executions since 1973. Third, of the 32 states that employed the death penalty after 1973, seventeen states used it fewer than ten times for a total of 59 executions in thirty years. Fourth, the fifteen states that used the death penalty ten or more times, account for over seventy percent of the executions. These states fall into several groups, but share a certain identity. There are those states with ten to 49 executions (North Carolina, South Carolina, Georgia, Alabama, Louisiana, Arkansas, Illinois, Arizona, California). There are those with fifty to one hundred executions (Virginia, Florida, Missouri, Oklahoma). And there are two states where you absolutely, positively did not want to get convicted of murder. Of the 820 executed, 289 (35 percent) were executed by Texas and thirteen by Delaware.  The common feature of most of these states is that they are Southern states.

Even these figures disguise important differences. In Texas, county prosecutors have the freedom to seek and courts can impose the death penalty. The vast majority of counties in Texas imposed no death penalties after 1973. So whence come the high totals for Texas (and hence for the United States as a whole)? Five urban counties accounted for 143 of the 289 death penalty cases: Nueces County (Corpus Christi) 10 executions; Bexar County (San Antonio) 18 executions; Tarrant County (Fort Worth) 22 executions; Dallas County (Dallas) 26 executions; and Harris County (Houston) 67 executions). Why are some small areas so bloody-minded?

Another distinction is temporal. While executions became legal once more in 1976, virtually none took place until 1987. [This probably reflected the delays introduced by extensive appeals.] Between 1994 and 1999, the number of executions accelerated.

What has happened since 2003? Actually, since 1999 the tide has been falling. DNA evidence began to become available. Deference to DNA evidence now sets a high bar for a death sentence. “Life-without-parole” emerged as an acceptable alternative, in the US if not in Scandinavia. Pharmaceutical companies have fled the lethal injection market. Six states have abolished the death penalty and the governors of two other states have imposed moratoriums. The number of death sentences issued each year has fallen from 300 in 1996 to 72 in 2014; the number of executions has fallen from 98 in 1999 to 35 in 2014. The geographical distribution of death sentences and executions remains pretty much as before.

Similarly, the number of death sentences in China also has fallen—from 24,000 (1983) to 12,000 (2002) to a mere 2,400 (2014).

Jen Joynt and Carrie Shuchart, “The Nation in Numbers: Mortal Justice,” Atlantic, March 2003, pp. 40-41.

Ashby Jones, “Executions, Death Penalties Hit Multiyear Lows in U.S.,” WSJ, 18 December 2014.

The Affordable Courts Act (ACA).

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The Affordable Care Act offered the states the opportunity to create health insurance exchanges, but then set up barriers to states actually creating such exchanges insurance. To create its’ own exchange, a state had to create a new state-paid staff to set up and operate the exchange: run a call center to explain the plans, regulate the plans offered by the private insurance companies, and set up the web-site through which people select their insurance. All this would cost money[1] and require some horse-trading in the legislature that could mess up other deals. Recognizing this, the federal government created a pool of money to subsidize the creation of state exchanges. The continuing costs would fall on the states. Moreover, many state legislatures were in the hands of Republicans who were opposed to the whole thing to begin with. It should surprise no one that thirty-four–about two thirds–of state legislatures opted to let the federal government carry the weight. Thus, most people buy their insurance through federal exchanges, rather than through state exchanges.[2]

Recently, the Supreme Court has agreed to hear a challenge to one provision of the ACA. The case of King v. Burwell turns on the meaning of the language in the ACA regarding subsidies for people who purchase insurance through the exchanges. Do subsidies go only to people who purchase insurance on state-created exchanges or do they go to all exchanges, state and federal alike?[3] The Supreme Court will issue an opinion on the case in June 2015.

In a subtle bit of propagandizing the court, Margot Sanger-Katz recently penned a story in the New York Times that explains the likely consequences of a Court decision restricting the subsidies to state-created exchanges.[4] First, subsidies would end in the thirty-four federal government-created exchanges. This would drive up the cost for many insurance consumers beyond what they could afford. The individual mandate to purchase health insurance, a corner-stone of the ACA, could not be maintained if insurance costs rose dramatically. Second, any effort to replace the federal exchanges with state exchanges would involve an immense amount of work in a restricted period of time.

The Court will probably issue its opinion in June 2015. October is the enrollment month, so states would have from June to October (about four months) to create exchanges. Only eight states will have legislatures in session in June. This may cut down the time for legislative action to the extent that is necessary. It took three years to create the original exchanges. They turned out to be plagued with what the Obama Administration is pleased to call “glitches.” Doubtless people have learned a lot from the first round of experiences. The trouble is that one of those lessons is that it isn’t possible to create an exchange over-night. States will have to hire teams of people to create and manage the exchanges. They will have to find the additional money (see fn. 1 below) somewhere in the middle of a fiscal year. They will have to find the people somewhere. (I foresee a big money harvest for Massachusetts health insurance professionals.) Then computer programs will have to be purchased and adapted to suit the needs of each new state exchange. There is a good chance that chaos will reign for a time if the Court overturns subsidies for federal exchanges.

This leads me to believe that Chief Justice John Roberts will side with the Democratic appointees on the Court and against the four Justices who have always opposed the ACA.

Or, already existing state exchanges could start enrolling residents of other states as well. You can go to another state’s public colleges and universities if you pay out-of-state tuition. Why can’t insurance customers pay out-of-state premiums? Not a lot higher. Just enough to create a positive revenue stream.

[1] One current estimate of the cost to establish a single state exchange is about $40 to $60 million. Then the annual operating cost would be added on that. Obviously not the end of the world, but a hard sell to state legislatures in the middle of a recession.

[2] President Obama’s unilateral abandonment of the “public option” looks worse and worse all the time—in retrospect. Lots of human decisions look worse in retrospect.

[3] To an ignorant—Republican—layman like myself, the answer is clear. Congress did not pass an enormous and complicated piece of legislation with the intent that it should fail. Congress did not intend that subsidies be restricted to the state-created exchanges when it was creating the federal exchanges as a back-up system. Congress intended both forms of exchanges to receive subsidies. End of story.

[4] Margot Sanger-Katz, “Many States Unprepared to Set Up Health Exchanges,” NYT, 11 December 2014.

 

Ferguson.

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First, it is worth pointing out that Michael Brown robbed a store shortly before the encounter with Darren Wilson. Brown shoved the much smaller store employee who tried to get in his way. Soon afterward, he shoved the door of the police car shut when Officer Darren Wilson tried to exit. Then he struggled with Wilson. Was Brown, in fact, a “gentle giant”? Or did he have a history—written or unwritten—of violent encounters? If Brown was the “gentle giant” alleged by friends and family, what brought on this fit of physical aggression on the day he died? What put him over the edge into serious anger on his last day?   I haven’t seen any reporting that addresses these questions. Based on the little I have read about Michael Brown, he appears to have been an unpleasant person. This is not a capital crime.[1]

Second, I think that Darren Wilson succumbed to rage during his encounter with Michael Brown. I myself succumbed to rage one time. During a prolonged argument, someone did something that put me over the edge psychologically. During this episode, I was “outside myself” in some sense. Unthinking. Acting—I guess—on some deep impulse. Not feeling pain, and with time slowing down. That’s evidence for a huge adrenalin dump. At the last moment, God saved me from beating the other person to death.[2] So, that’s the basis for my thinking about this particular aspect of the case. The whole thing took place in a very compressed span of time” 90 seconds. What critical things happened? Brown shoved the door closed on Wilson when he was trying to exit the vehicle. Wilson grabbed Brown around the neck through the window. They struggled. Wilson at least believed that Brown had reached for his weapon, so he drew and fired within the car. Brown broke off and moved away. Wilson exited the vehicle, fired at Brown, and ordered Brown to stop. Brown turned to face him, then approached Wilson. It isn’t clear to me what happened after that. In any case, Wilson then shot Brown a bunch of times. The last one went into the top of Brown’s head while he was lying on the ground. A fatal wound, even if the other ones were not, fired after Brown posed absolutely no threat. To me, this is evidence that Wilson had lost control of himself. He revved through most of his mag, firing a total of twelve rounds. Racism and Rage aren’t the same thing.

Third, I think that District Attorney Robert McCulloch chose an unusual path for the grand jury, one that was unlikely to result in an indictment of Darren Wilson. In Anglo-American law, a trial is a confrontational procedure in which both the prosecution and the defense seek to structure the evidence to generate conflicting interpretations of that evidence. A decision emerges from the confrontation of the interpretations.   The jury must find for guilt or for innocence unanimously. Otherwise, you get a mistrial and a go-around. However, District Attorney Robert McCulloch short-circuited that procedure. Dumping all the information available in the case in an unstructured mass into the lap of the grand jury, with no one to provide an alternative explanation, and then letting them sort it out for themselves is a ludicrous procedure. If he had wanted to find out what happened, then he would have actively sought an indictment. New York judge Sol Wachtler once said that if a prosecutor wants to, he can get a grand jury to indict a ham sandwich. Apparently, Darren Wilson isn’t a ham sandwich.

[1] At least, I hope that it isn’t for my own sake.

[2] Afterward, I felt dirty, and empty, and afraid—not of the Law, but of my newly-revealed, previously-unknown self. If I had killed the other person, then I would have been guilty under the law of some form of homicide. I imagine—and I hope with all my heart—that I would have been racked with guilt and felt deep remorse. Perhaps Darren Wilson feels these things. The circumstances for feeling remorse or expressing regret are not favorable.

 

Scottsboro Boys

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The Civil War ended slavery in the South. White Southerners then created a system called “Jim Crow.” In politics, blacks weren’t allowed to vote or to serve on juries. In economics, blacks got pushed down into “debt peonage” (a new kind of slavery), but so did many poor whites; their schools were lousy[1]; and most professions were closed to them. In 1896 the US Supreme Court upheld the doctrine of “separate, but equal” in the case “Plessy v. Ferguson.” If you were black, your only hope was to get north to New York City or Chicago.

The Great Depression hit at the end of 1929, not that you could tell in the rural South—cotton prices had been dropping for a decade.[2] As unemployment rose, lots of people went “on the bum,” living in “hobo jungles” and “hopping freights” [catching free rides on freight trains] in search of work.[3] This was a dangerous life. Hopping freights amounted to stealing and the railroad police (“bulls”) would throw you off a moving train. There were a lot of creepy people on the bum. Most “bums” or “hobos” carried knives for fighting and the few women dressed like men and sometimes traded sex for protection or money.[4]

In late March 1931, some white kids jumped off a freight train bound from Chattanooga, to Memphis, Tennessee, to report a fight with blacks on the train. A local sheriff in Alabama stopped the train. Two white girls on board said that they had been raped by the nine black males[5] on the train. A doctor examined the girls and didn’t say that they had not been raped. A lynch mob gathered, but the sheriff backed them down by himself and sent for the National Guard.[6] All were tried in Scottsboro, Alabama; all convicted; and eight sentenced to death.

This was 1931: the Depression just kept getting worse; Franklin D. Roosevelt didn’t get elected until November 1932; and the “New Deal” was a way’s off. The American Communist Party offered an alternative to the mainstream political parties. They said that only social class mattered; race didn’t matter. Southerners—all of whom were Democrats—said that only race mattered; social class didn’t matter.

Both the Communist Party and the white chief justice of the Alabama Supreme Court said the trial was a travesty. The United States Supreme Court agreed. So, new trials were held. One of the white women on the train recanted and said that neither woman had been raped.[7] Nevertheless, the jury convicted the blacks. The judge set the verdict aside because he didn’t believe any of the prosecution witnesses.[8] So, new trials followed. Same result: guilty.[9] Again, the US Supreme Court overturned the verdicts.

In 1937 the prosecutor dropped the charges against four of the accused—after they had spent six years in prison. The rest got long prison sentences instead of the death penalty. Three of them escaped, two to be recaptured and one who only came out thirty years later. They have all received pardons from the Alabama Parole Board. So, the South before the Civil Rights era.

[1] See Maya Angelou’s description of her middle school in Arkansas in I Know Why the Caged Bird Sings.

[2] Alabama, “Song of the South”: http://www.youtube.com/watch?v=lHdXQAQHjd8

[3] You should always jump for the front end of the car. If you miss, you bounce off and don’t fall under the wheels.

[4] See the movies “The Emperor of the North Poles” (1973) and “The Journey of Natty Gann” (1985) for examples.

[5] The oldest was 19, the youngest was 13, so males, but not men. By my standards.

[6] His name was Matt Wann. He was killed serving a warrant on 3 May 1932. “Let us now praise famous men.”

[7] Which isn’t the same as saying that they hadn’t shtupped some of the black guys in return for a cheese sandwich.

[8] In the next election he was voted out of office and the prosecutor was elected Lieutenant Governor.

[9] Guilty of what? First, guilty of being a black male in the presence of white women. Second, guilty of having tried to make a bunch of redneck morons look like redneck morons by insisting on a trial. Not in the law books, but both were real crimes at the time in Alabama. “What’s got four eyes and can’t see? Mississippi.”

Bob Marley meets Adolf Hitler: Reggae.

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When the Germans over-ran western Europe in summer 1940, the Americans took over the defense of a bunch of British possessions in the Americas: in the Bahamas, Guyana, the Leeward Islands, and southern Jamaica. Lonely American kids far from home brought American music with them. Later on, radio stations of the Armed Forces Network played American music all over the world. People with radios listened to that music. It wasn’t Lawrence Welk. In the Caribbean, people could hear both jazz and rhythm and blues.

Traditionally, Jamaicans had listened to live music, usually in dance-halls. After the Second World War, radio DJs and music promoters began running what were called “sound systems.” These were flat-bed trucks with generators, big speakers, and turntables. The idea was to roll into some poor neighborhood, begin blasting music, draw a crowd, and sell goat-jerky and white lightning to the audience. This innovative approach to marketing soon won large audiences. The trouble was that it threatened to put the owners of dance-halls out of business. How to regain market share? They started hiring “rude boys” to go cause a ruckus at “sound system” street dances.  Cut somebody’s face with a straight-razor, stuff like that.  This made the dance halls seem somehow…safer.  How were the “sound system” promoters going to regain market share? They hired their own “rude boys.” Rinse and repeat.  So, Jamaican music started to acquire a certain association in some minds—those of the venue-owners, the performers, the audience, the “rude boys” themselves–with violence.

Then the Americans moved on to rock and roll, leaving R and B behind.  Jamaicans didn’t like rock and roll as much as they liked R and B, so the “sound systems” started paying for original local music to record and play.  “Duke” Reid opened the first Jamaican studio in 1959.

There is an interesting progression in Jamaican music.  Mento is a kind of Jamaican folk music that developed in the 1940s and became very popular in the 1950s.  It sounds like calypso to my ignorant ear, but purists insist there is a difference.   Mento emerged as dance-hall music that was popular with poor people.  Hence, Marcus Brewer’s analysis of rap music applies to mento.[1]  Ska then added influences from American jazz and rhythm and blues in the late 1950s. It replaced mento (without destroying it).  It also spread to Britain, where it became popular with “mods” and later with “skinheads.”  Rocksteady then emerged about 1966 as a slowed-down version of ska.  By mid-1968 music had moved on yet again to reggae.  Part of the explanation for this is the growing influence of Memphis and Detroit “soul” music. (See: Motown, Stax, and Atlantic Records.)  Reggae emerged from this line of succession in the late 1960s.

What’s distinctive about reggae? It’s the mood as much as anything else (I would argue).  Partly, this comes from the emphasis on suffering and hardship in the wake of the failed hopes of the early Sixties. Partly, the simple chord progressions or—according to my technical advisor–smoking a lot of ganja encourage a meditative mood.  Partly, many of its musicians and followers were Rastafaris whose faith explained past suffering and promised future redemption.

How did reggae get to the United States?  The character “Pussy Galore” in Ian Fleming’s James Bond novel was modeled on Blanche Lindo.  Her son, Chris Blackwell (1959- ) founded Island Records in Jamaica in 1958, then moved it to Britain in 1962. Here he promoted Jamaican music for a British audience.  He produced the movie “The Harder They Come” (1972) and the first Bob Marley and the Wailers album outside Jamaica “Catch a Fire” (1973).  Eric Clapton covered “I Shot the Sheriff” (1974), introducing Marley to a huge American audience. The Wailers toured the US with Johnny Nash (1974), but got fired for being much more popular.

[1] “They’re pretty angry most of the time, but sometimes they just want to have sex.”–“About A Boy” (2002).

The economic mess and policy.

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Median income, adjusted for inflation, is about $3,600 less than when President George W. Bush entered the White House and about $2,100 less than when President Obama entered the White House. America has not recovered from the “Great Recession.” We are rolling up on fifteen years of falling incomes after a long period of rising incomes. In contrast, upper income groups are seeing their wealth and incomes rise. Something is wrong.

What do economists suggest about reviving economic growth? They suggest improving education because America has lost its one-time enormous lead over other nations in terms of human capital. They suggest improving our crumbling infrastructure because roads, bridges, airports, and telecommunications are all falling behind needs. They suggest sorting out the messy tax code to reduce distortions in economic activity. They suggest cutting the cost of health care, which drags on the economy and cuts down money wages.[1]

The problem with these sorts of policies is that they will take a long time to play out, have an uncertain effect, and are complicated to understand. Hence, both side look for nostrums that look good on a bumper sticker. For Republicans, the solution tends to be cuts in taxes on high income-earners and corporations. These are the “job creators.”

What do the Democrats want to do to raise stagnant incomes among middle-class “workers”?[2] Well, they haven’t done much for quite a stretch so far as voters can tell. It should surprise no one if lots of them sit out an election. To counteract this trend, Democrats have adopted the cause of a higher minimum wage. In the near future they may turn to a “middle-class tax cut.” It seems most likely that this “cut” would actually take the form of “tax-credits.” These could be presented as tax incentives to save for retirement or for college education. Democrats favor paying for these cuts through higher taxes on upper-incomes. This would be popular with most Americans, who want more money for themselves and resent wealthy people.

How likely is this to happen? On one sense, very likely. The anti-tax frenzy that has gripped America for several decades has led to all Americans paying lower taxes than the historical trend since the Second World War. President Obama was happy to make most of the Bush-era tax cuts permanent.

In another sense, very unlikely. Such policies would have to pass through the House of Representatives. According to one analysis, the House is almost certain to remain in the hands of Republicans for the next decade. Only 28 of the Republicans’ 244 House seats are in districts that voted for President Obama in 2012. The Democrats now hold 188 seats. If all of those seats were moved from Republican to Democrat candidates, then the two parties would tie in the House. Such a shift is very unlikely, given the advantages of incumbents and the unreliable turn-out among Democratic voters. For the last decade American politics has see-sawed between Republicans and Democrats, but what Americans seem to like is a divided government that can’t accomplish anything.

David Leonhardt, “The Great Wage Slowdown, Looming Over Politics,” NYT, 11 November 20014.

Nate Cohn, “The Enduring Republican Grip on the House,” NYT, 11 November 2014.

[1] In fact, health care costs have stopped rising and in some cases have fallen. The reasons for this are subject to debate. It seems unlikely that the Affordable Care Act has anything to do with this—yet.

[2] OK, I’ll leave aside the whole issue of how “workers” used to mean “blue-collar.” Don’t want to suggest that America is really confused about the whole issue of social class.

 

Spiderman on Net Neutrality.

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There are three parties to the “net neutrality” debate. There are Internet Content Consumers (ICCs, individuals and businesses); Internet Content Providers (IPCs); and Internet Service Providers (ISPs). Since the ISPs connect the ICCs with the ICPs, they’re the subject of proposed regulations.

Unlike the public highways, the Internet is private property. To what degree is it legitimate for government to regulate private property? Should the Internet be treated like a utility or like normal company selling goods or services? A utility bills a customer for how much of the service or good that s/he consumes. It does not distinguish between customers, nor is it involved in competition with other providers, nor does it inquire into what purpose s/he uses the service or good.[1] A normal company competes with other companies for customers by offering new and attractive products at as low a price as possible. Which of these business forms does the Internet most closely resemble?

The Obama Administration argues that the Internet is like electricity, a utility. The President professes to fear (or serves as the mouthpiece for ICPs who fear) that ISPs will be able to “restrict the best access or pick winners and losers in the online marketplace.”

Internet Content Providers are not all equal in that some of them (Netflix, Hulu) require a lot more bandwidth than do many others. Internet Service Providers want to be able to charge these customers a different price than they charge other users. They analogize on-line content to cable television content. Being able to charge differential rates has led to an explosion of widely desired content in cable television (HBO for example). The same will happen with on-line content.

Internet Content Consumers and Internet Content Providers both hate this idea. Customers see the ISPs as positioning themselves to gouge money out of consumers by forcing them to pay for “packages” that include content that they don’t want or to pay premium prices for content that they do want. ICPs see the ISPs forging alliances with whoever has the deepest pockets, while squeezing anyone who doesn’t have great wealth yet out of the “fast lane” and into a “slow lane.”

On the other hand, differential pricing and “congestion” pricing are both well-established practices in business, government, and education. The toll on the bridge over the Delaware-Chesapeake Canal goes up on the week-end; colleges discount their price to students by providing different amounts of financial aid to different students; stores have sales.

The Internet is one of the engines of the future growth of the American economy. The Internet is not a “mature” industry or technology. Therefore the single most important issue is to decide what policy best encourages productive investment in and maximum expansion of the Internet. ISPs picking and choosing between customers sounds like a prescription for favoring established interests over new interests in a segment of the economy that is undergoing rapid development, innovation, and change. Ponderous—and perhaps politicized or paralyzed—government regulation sounds like a prescription for driving away badly-needed investment.

“One gives you cancer and the other stunts your growth.” You choose.

Neil Irwin, “A Super-Simple Way to Understand Net Neutrality,” NYT, 11 November 2014.

Eduardo Porter, “The Pitfalls of Net Neutrality,” NYT, 12 November 2014.

[1] I wonder if this is actually true in some place like Humboldt Country, CA, where there are a ton of grow houses?