Economics: Prizing Plain Talk on Inequality

Angus Deaton, variously described as a Scotsman, a Briton and a Princeton economist has just been awarded the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2015, often called the Nobel Prize for Economics. Leaving aside all the acid and vitriol about the the name, its sponsor and the wishes of the Nobel family (and there is plenty of it) this particular prize should be welcome in a world in which growing wealth inequality is seen as a problem by almost everyone.

For a quick look at what Deaton offers on the subject, I bring you a post, brought to my attention by Paul Krugman’s blog (not the NY Times opinion piece), from Cardiff de Alejo Garcia.

“I’m passing along the most memorable passage on the topic [of inequality] that I’ve come across lately. It’s from Angus Deaton’s excellent The Great Escape: Health, Wealth and the Origins of Inequality, which I just finished and warmly recommend (I’ve embedded links to the studies and books referenced in the excerpt and footnotes):

Books The Great Escape

“There is much to be said for equality of opportunity, and for not penalizing people for the success that comes from their own hard work. Yet, compared with other rich countries, and in spite of the popular belief in the American dream that anyone can succeed, the United States is in fact not particularly good at actually delivering equal opportunities.

One way of measuring equality of opportunity is to look at the correlation between earnings of fathers and sons. In a completely mobile society, with perfect equality of opportunity, your earnings should be unrelated to what your father earned; by contrast, in a hereditary caste society, in which jobs are handed from one generation to the next, the correlation would be 1.

In the United States, the correlation is 0.5, which is the highest of the OECD countries and is exceeded only by those of China and a handful of countries where there appears to be the least equality of opportunity.

[T]here is a danger that the rapid growth of top incomes can become self-reinforcing through the political access that money can bring. Rules are set not in the public interest but in the interest of the rich, who use those rules to become yet richer and more influential.

To worry about these consequences of extreme inequality has nothing to do with being envious of the rich and everything to do with the fear that rapidly growing top incomes are a threat to the wellbeing of everyone else.”

So, congratulations to Angus Deaton, regardless of what the prize should be called. More perceptive detail on the causes and results of inequality, not only on individuals, groups and classes but on democracy itself is a good thing, if understood and acted upon.

Go Green! California Strengthens The Promise

By the end of 2030, half of California’s electricity will come from the wind, the sun and other renewable sources under a new law that sets one of the country’s most ambitious clean-energy targets.

The law, signed Wednesday by Gov. Jerry Brown, accelerates California’s shift away from fossil fuels as its dominant source of energy and marks another milestone in the state’s fight against climate change.

climate renewable_energy

And despite the loud complaints, and successes of fossil fuel addicts, the changes have brought more jobs to the state.

“It’s not an accident that the clean-vehicle industry is headquartered in California,” said Ryan Popple, CEO of Proterra, a company that makes electric buses. Formerly based in South Carolina, the company this week celebrated the opening of its new headquarters — in Burlingame.

“California really invented the market, or forced the market, for hybrid technology and electric vehicles,” Popple said. “It’s attracted the kinds of companies that want to work on these technologies.”

SF Gate

Austria, Slipping Down the Slippery Rightward Slope

NY Times starts this way:

VIENNA — As befits the city of Sigmund Freud, Vienna has two faces — one sweet, one sinister.

Behind the schnitzel and strudel, Mozart and the opera, lurks the legacy of the Nazis who forced Jews to clean sidewalks with toothbrushes. In 1988, to much controversy, Vienna placed Alfred Hrdlicka’s “Memorial Against War and Fascism,” featuring a sculpture of a Jewish mancleaning the street, right behind the State Opera, lest Austria again forget.

Now, to the astonishment of many and the alarm of some, the burning question in Vienna’s elegant cafes is, Which face will prevail in the city’s bellwether elections on Oct. 11?

Roughly one in four of Austria’s 8.7 million residents lives in Vienna. For almost the last century — aside from the Nazi years, 1938-45 — the left has ruled “Red Vienna,” long prized for its pioneering public housing and welfare, and its cultural ferment.

But against the backdrop of Europe’s refugee drama, the far-right Freedom Party is threatening the Social Democrats’ hold in what may portend a more general rise in populist, anti-immigrant sentiment across the Continent.

The Telegraph from the UK shouts louder

Austria’s Right-wing populist party makes huge gains fuelled by migrant crisis fears

Austrian Freedom Party doubles its share of the vote in state of Upper Austria as Vienna expects nearly three times the number of asylum applications received last year

A Right-wing populist party in Austria has made huge gains in regional elections over growing concerns about Europe’s migrant crisis.

The Austrian Freedom Party (FPÖ) won 30.4 per cent of the vote in the state of Upper Austria, the country’s industrial heartland, a striking improvement on its performance in the state’s last election in 2009 when it took half as many votes with 15.3 per cent.

This isn’t to say all Austrians are implicated in this surge of anti-immigrant feeling.  Many, many greeted refugees at train stations and in the streets.  It does mean, as in the United States, that divisions are no longer ignored; fear is rising.  And if that’s the tide that will lift all boats, we’d better be thinking about better drainage and stronger barriers.

Coral Reef Bleaching Continues Apace

Corals are turning chalk white and dying on reefs stretching from the Florida Keys to Palm Beach County, in what experts call one of the worst episodes in two decades of coral bleaching.

Climate Change fl-coral-bleaching

Under stress from unusually warm water, the corals are expelling the tiny bits of algae that give them their fiery streaks of red, orange or green color and that provide the coral with nutrition.

That’s today’s news from the SunSentinel similar to that of December, 2011


Here are comparison photos from America Samoa taken two months apart.


And in Hawaii, everybody’s favorite paradise?

Water temperatures around Hawaii are currently about 3 to 6 degrees Fahrenheit warmer than normal, Chris Brenchley, meteorologist for the National Weather Service in Honolulu, told the Associated Press.

According to the AP, [coral] bleaching has been spotted in Kaneohe Bay and Waimanalo on Oahu and Olowalu on Maui. On the Big Island, bleaching is reported from Kawaihae to South Kona on the leeward side and Kapoho in the southeast.

Courtney Couch, a researcher at the Hawaii Institute of Marine Biology, told the AP that an entire mile and a half of reef on the eastern side of Lisianski Island was essentially dead.

Read more:

Scandal follows Scandal but Who Needs Regulation?

Oh my goodness! Volkswagen, which distanced itself from its Adolf Hitler aided beginnings and the taint of using slave labor to become the largest automobile manufacturer in the world has exploded in the biggest manufacturing scandal of the year – maybe in several years but who can keep track?

From Upton Sinclair’s exposure of corporate meat packing fraud and filth to today, the rolls are filled with dishonorable corporate activity. I know, I know, not all of theM, but how many bad apples in a barrel before you don’t want anything to do with the whole lot?  Here are a couple of lists just to jar loose the memories. The Biggest 25 Ever (probably not, but all recent.)  And here’s a Wiki list.  It’s pretty short on Gilded Age scandals but still, many.

So, the problem is not, nor has ever been, one bad apple.  The problem is the set up of corporations to spin the “virtuous circle” of profits and greed while resisting any kind of regulation or oversight for the common good.  Today’s James B Stewart article in the NY Times makes the point about VW with plenty of detail:  it was not just the CEO Winterkorn, nor a rogue engineer somewhere.  It starts at the top, with the Board.

Volkswagen’s recent history — a decades-long feud within the controlling Porsche family, a convoluted takeover battle and a boardroom coup — has dominated the German financial pages and tabloids alike. This week, the German newspaper Süddeutsche Zeitung compared Volkswagen’s governance to that of North Korea, adding that its “autocratic leadership style has long been out of date.” It said “a functioning corporate governance is missing.”

Image result for volkswagen pollution

… I spoke this week to a longtime former senior Volkswagen executive, who agreed that a scandal, especially one involving emissions, was all but inevitable at Volkswagen. He cited the company’s isolation, its clannish board and a deep-rooted hostility to environmental regulations among its engineers. …  engineers felt that the politicians were guilty of rank hypocrisy, especially in the United States, also grumbling that electric cars make no sense as long as power plants are burning fossil fuels.

“There’s an attitude of moral superiority there,” he said. “The engineers think they know best.”

And, of course, it’s not new. Cheating, cheating, everywhere.  Because, who does the testing? Why those who have products to be tested! Wahoo!  Let the students test themselves…

Paul Krugman weighs in with a quick summary of very recent corporate scandals and hammers the drum for a return to reasonable regulation.

There are, it turns out, people in the corporate world who will do whatever it takes, including fraud that kills people, in order to make a buck. And we need effective regulation to police that kind of bad behavior, not least so that ethical business people aren’t at a disadvantage when competing with less scrupulous types. But we knew that, right?

Well, we used to know it, thanks to the muckrakers and reformers of the Progressive Era. But Ronald Reagan insisted that government is always the problem, never the solution, and this has become dogma on the right.

As a result, an important part of America’s political class has declared war on even the most obviously necessary regulations.

And ALL PRAISE! to the folks who found out:

Peter Mock, European managing director of a International Council on Clean Transportation and his American counterpart, John German, were sure that tests would show VW diesel to be clean!  They hired West Virginia University’s  Center for Alternative Fuels, Engines and Emissions where Dan Carder was director and research assistant professor Arvind Thiruvengadam and his colleagues hoped to be able to publish a few scholarly articles from the test results.  No one had an idea that anything was wrong.  When the results started coming in they re-did and re-did the tests, doubting themselves.

The initial test results were ready a year ago to little noise except for the EPA which began testing of its own followed by European authorities.  Bam! The VW castle is barely standing. In fact, the whole diesel line of fossil fuels may die.  The silver lining? Perhaps, to reclaim the trust of the public, VW will lead the way in to renewable fuels. Perhaps.

And, by the way, were the code that was jiggered to falsely give superb emission reading “open code” instead of proprietary, some young nerds might have discovered the problem several years ago.

The Age of Incitement

Thomas Friedman wants to see a movie.  So do I.

Radio and movies made mass incitement possible and effective in the development of fascism (Italy) and nazism (Germany.)  Now, add the Internet to the tools available.

The movie is called “Rabin: The Last Day.” Agence France-Presse said the movie, by the renowned Israeli director Amos Gitai, is about “the incitement campaign before the 1995 assassination of Prime Minister Yitzhak Rabin” and “revisits a form of Jewish radicalism that still poses major risks.” This is the 20th anniversary of Rabin’s assassination by Yigal Amir, a right-wing Jewish radical.

A worker fixes a new memorial sign for the late Israeli prime minister Yitzhak Rabin in the centre of Tel Aviv November 3, 2005. Ten years after Prime Minister Yitzhak Rabin was shot at a peace rally by an ultranationalist opposed to his talks with the Palestinians, the Jewish state is seeing a resurgent swirl of rumour and speculation about his death.

A worker fixes a memorial for the late Israeli prime minister Yitzhak Rabin in the centre of Tel Aviv 

“My goal wasn’t to create a personality cult around Rabin,” Gitai told A.F.P. “My focus was on the incitement campaign that led to his murder.” Sure, the official investigating commission focused on the breakdowns in Rabin’s security detail, but, Gitai added, “They didn’t investigate what were the underlying forces that wanted to kill Rabin. His murder came at the end of a hate campaign led by hallucinating rabbis, settlers who were against the withdrawal from territories and the parliamentary right, led by the Likud (party), already then headed by Benjamin Netanyahu, who wanted to destabilize Rabin’s Labor government.”

I hope many many see the movie and interpret not only Israeli history, connected to its present, of course, but U.S. history.  The extreme right has an almost total monopoly on radio incitement and has had for decades.  It’s a backhanded tribute to the American people that only 34% think Donald Trump is the greatest leader of the free world.

Water, Food, Land and Genocide

Timothy Snyder, professor of history at Yale University and author, most recently of Bloodlands: Eastern Europe Between Hitler and Stalin contributed a very disturbing Op-Ed piece to the NY Times on Sunday.  This is just a part:

To expand Germany’s Lebensraum, Hitler aimed to seize Ukraine from the Soviet Union, starve 30 million Eastern Europeans and transfer the food to Germany. When Germany invaded the Soviet Union in 1941, the campaign had two major aims: the control of fertile Ukrainian soil and the destruction of Jews living there. It was this invasion that placed defenseless Jewish children at the mercy of the murderous Einsatzgruppen.

Climate change threatens to provoke a new ecological panic. So far, poor people in Africa and the Middle East have borne the brunt of the suffering.

The mass murder of at least 500,000 Rwandans in 1994 followed a decline in agricultural production for several years before. Hutus killed Tutsis not only out of ethnic hatred, but to take their land, as many genocidaires later admitted.

In Sudan, drought drove Arabs into the lands of African pastoralists in 2003. The Sudanese government sided with the Arabs and pursued a policy of eliminating the Zaghawa, Masalit and Fur peoples in Darfur and surrounding regions.

Climate change has also brought uncertainties about food supply back to the center of great power politics. China today, like Germany before the war, is an industrial power incapable of feeding its population from its own territory, and is thus dependent on unpredictable international markets.

Read all: The Next Genocide and plenty of comments from readers, as well.

For a NYRB article of his on the Holocaust and how it is often misapprehended see here. 

Public Immorality

Robert Reich is always worth listening to whether about economics or trade or work, usually all three at the same time.  In recent blog posts he’s gone after the disappearance of public morality in great corporations, an absolute necessity, he says:

An economy depends fundamentally on public morality; some shared standards about what sorts of activities are impermissible because they so fundamentally violate trust that they threaten to undermine the social fabric.

He’s written about it twice in recent weeks, following on earlier posts about The Outrageous Ascent of CEO Pay and Corporate Welfare in California



At a time many Republican presidential candidates and state legislators are furiously focusing on private morality – what people do in their bedrooms, contraception, abortion, gay marriage – America is experiencing a far more significant crisis in public morality.

CEOs of large corporations now earn 300 times the wages of average workers. Insider trading is endemic on Wall Street, where hedge-fund and private-equity moguls are taking home hundreds of millions.

A handful of extraordinarily wealthy people are investing unprecedented sums in the upcoming election, seeking to rig the economy for their benefit even more than it’s already rigged.

Yet the wages of average working people continue to languish as jobs are off-shored or off-loaded onto “independent contractors.”

All this is in sharp contrast to the first three decades after World War II.

Read All

And if you didn’t see him in Inequality for All, here is a trailer.  Available out there in internet land



500 Year Low in Sierra Snowpack

Multi-Century Evaluation of Sierra Nevada Snowpack

Comparison photos of Sierra Nevada snowpack in 2010 and 2015

These images captured by NASA’s Aqua satellite show the difference between snow cover in 2010—the last year with average winter snowfall in the region—and 2015 across the Sierra Nevada Mountains. Credit: NASA/MODIS

The 2015 record low snowpack level in California’s Sierra Nevada mountain range is unprecedented in comparison to the past 500 years, according to a new paper published in Nature Climate Change(link is external). In their examination of paleoclimate tree-ring based records dating back to 1500, scientists from the University of Arizona, University of Arkansas, and NCEI’s Paleoclimatology Program expect that the current snowpack low has a strong likelihood of occurring only once every 500 years and only once every 1,000 years below 7,000 feet. Such an exceptional low level poses significant challenges to California, which receives over 30% of its yearly water supply from Sierra Nevada snowpack.


Fires Rage in California

It’s wet and cool around San Francisco, but in the north in the Shasta and Mendocino forests, down to Clear Lake (again!) in the Sierras, east of Stockon and Fresno it’s a burning hell.

MIDDLETOWN, Calif. (AP) — An explosive wildfire burned largely unchecked Monday after incinerating hundreds of homes and devastating rural communities north of California’s Napa Valley, leaving at least one person dead and sending tens of thousands fleeing down flame-lined streets.

But it’s not the only one. A second massive blaze, less than 200 miles away, destroyed 135 homes as it spread through Amador and Calaveras counties in the Sierra Nevada. That fire was 30 percent contained.

Both fires have displaced 23,000 people…  MORE at AP


AND this word from Science Advances as reported by Andrew Revkin in the NY Times

New Study: Burn it All (Fossil Fuel), Lose it All (Antarctic Ice and Today’s Coasts)

A new study of Antarctic ice and warming finds humanity will have to write off today’s coastal cities centuries from now if it chooses to keep burning fossil fuels…

In interviews, scientists said that such long-term risks raise profound moral questions for people of today.

“What right do we have to do things that, even if they don’t affect us, are going to be someone else’s problem a thousand years from now?” asked Ian Joughin, an ice sheet expert at the University of Washington who was not involved in the new research. “Is it fair to do that so we can go on burning fuel as fast as we can?

Read all. Video chats included.