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July 31, 2010

Macroeconomic update on Great Recession

The recession would have been worse if not for the Fed's monetary policy and quantitative easing. Also important were the unmentioned automatic stabilizers--taxes falling more than income, cushioning declines in after-tax incomes and consumption--which were far larger than the spending and tax rebates in the stimulus bill. Arguing that all these policies (including injecting capital into banks, which was necessary but done poorly) may have prevented a depression is perhaps still an exaggeration but at least is within hailing distance of plausibility. On that scale, the effect of the stimulus was puny.

Obama's Economic Fish Stories
On unemployment, the president claims that the stimulus bill was several times more potent than his chief economic adviser estimates. Such statements hurt his credibility.

July 30, 2010

BP concerns dominated by perception, publicity, reputation, not actual damage

BP's board is expected on Monday to name an American, Robert Dudley, as its chief executive, replacing Tony Hayward, whose repeated stumbles during the company's three-month oil spill in the Gulf of Mexico alienated federal and state officials as well as residents of the Gulf Coast.

keep in mind that this isn't exactly a model example of accountability. Hayward isn't being canned because of BP's poor safety record, which had been established long before the disaster in the Gulf.

Instead, Hayward is being canned because BP thinks he wasn't a good spokesman. In other words, BP thinks their problems have more to do with the nationality of their CEO than the consequences of their corporate policies. And with their new pick, selecting a long-time BP insider to replace Hayward, BP is signaling that they have no real intention of changing anything about how they do business. The only thing they want to change is the accent. But even if this move does end up helping BP's shareholders in the short-term, it won't make anybody safer or more secure, and it won't help stop their next disaster. It's an image move, having nothing to do with substance.

-- Jed Lewison

July 29, 2010

Need supertrains or at least trolleys and buses when on the meds

Another reason to ride the trolley (or bus, if need be):

In one such case in Wisconsin, a former physician slammed his S.U.V. into a Honda Accord in April 2008, killing the pregnant driver and her 10-year-old daughter. Prosecutors said the physician, Mark Benson, had high levels of the sleep aid Ambien in his system, as well as Xanax, an anti-anxiety drug, and oxycodone, an opiate painkiller. Mr. Benson was sentenced to 30 years in prison.

Defendants can try to prove that they did not realize their medication would affect their driving, prosecutors said, but that argument may not hold up if the bottle had a warning label.

"Would you go home and start a chain saw and cut down a tree?" said Lt. Col. Thomas C. Hejl, the assistant sheriff in Calvert County, Md. "Why should you get behind the wheel of a vehicle when the same medication has the same side effects?"

Drivers on Prescription Drugs Are Hard to Convict
Published: July 24, 2010
The issue is vexing police because there is no agreement on what level of drugs in the blood impairs driving

July 28, 2010

NYU: $52,000 a year plus $12 per drink

The high cost of living is an obstacle for N.Y.U. students as well, who tend to spend their evenings in Manhattan rather than Brooklyn. The price of eating and drinking ($12 is a fairly typical price for a cocktail) can be a deterrent to socializing.

At the end of her freshman year, after a pained period of calculating her savings, Taylor Horak decided that she could no longer afford to go to school in New York, despite having grown increasingly fond of the university. In March, when she received her financial aid package for sophomore year, it covered much less of the approximate $52,000 for tuition, books, and room and board than she had expected. After computing that she would be more than $100,000 in debt by graduation, she withdrew from N.Y.U.

This fall she is going to a state school in Virginia where tuition will be less than $10,000. But she worries that she's been tainted by her year in the city.

"I'm stuck in this strange in-between space," she said. "You come up here and you're the Southerner, and you go back home and you're suddenly the snotty, cultured girl from New York."

Backpacks Among the Briefcases
Published: July 15, 2010
Over 64,000 freshmen are about to descend on New York City campuses, where a frat abuts a homeless shelter, and dorms are an island away.

July 27, 2010

Supporters of Arizona's immigration law say the Obama administration should be going after local jurisdictions that have proclaimed themselves relatively safe places for illegal immigrants.

Critics of the Obama administration's decision to sue Arizona over its new law to control illegal immigration accuse the government of overlooking a more obvious target: the dozens of cities that called themselves a "sanctuary" for immigrants.

"Everyone has noticed the hypocrisy of the government going after Arizona and ignoring the sanctuary cities," said Bob Dane, a spokesman for the Federation for American Immigration Reform. "They have it exactly backwards. Arizona is applying federal law, and sanctuary cities are violating it."

Kris Kobach, the Kansas law professor who drafted the Arizona law, said he particularly objected to cities that have a policy of freeing criminals who are illegal immigrants without notifying federal immigration officials. "It's pretty clear they are breaking the law. And they are doing it with impunity," he said.

He pointed to a provision Congress added to the immigration laws in 1996. It says state and local agencies and their officials "may not prohibit or in any way restrict" their employees from "sending" information about a person's immigration status to the agency then known as the Immigration and Naturalization Service.

But Congress did not set a penalty for violations. And since then, neither Republican or Democratic administrations have taken legal action to enforce it, according to government officials and immigration lawyers.

-- David G. Savage, Tribune Washington Bureau
July 25, 2010

See also She sells sanctuary.

July 26, 2010

Geithner, Obama: top begins at $250k (Coruscation Middle Class series continues)

In appearances on several Sunday talk shows, Geithner said only 2 to 3 percent of Americans -- those making $250,000 or more a year -- will be affected when tax cuts enacted under former President George W. Bush end on schedule this year.

The Obama administration has said it wants to keep tax cuts in place for Americans earning less than $250,000 a year. Some Republicans say letting any of the tax cuts expire is effectively a tax hike that may hurt recovery.

"Just letting those tax cuts that only go to 2 percent to 3 percent of Americans, the highest-earning Americans in the country, expire I do not believe it will have a negative effect on growth," he said on ABC.

No New Recession, Let Tax Cuts Die: Geithner
Published: July 25, 2010

July 25, 2010

Justice Elena Kagan: a reasonable person pursuing reasonable purposes reasonably ?

The most interesting question about the Kagan nomination remains this: Why did Barack Obama nominate someone with largely unknown legal and political views to a lifetime appointment on the Supreme Court? Under the circumstances we can do little more than guess, but I would venture that three inter-related factors were crucial. First, Obama himself, as a former president of the Harvard Law Review and University of Chicago law professor, has been immersed in cultural context -- elite legal academia -- which puts a great deal of stock in the belief that being a good Supreme Court justice is largely a matter of technical competence. Legal academia is (quite literally) invested in the idea that being a "good" judge means accepting "good" legal arguments and rejecting "bad" ones, with good and bad defined as the correct and incorrect application of legal rules. This belief is absurd - any case that reaches the Supreme Court can't be resolved merely through the application of legal rules - but its persistence signals how important it still is to American law schools, which remain committed, against all intellectual odds, to maintaining a sharp distinction between "law" and "politics."

Although most legal academics greatly exaggerate the extent to which controversial legal questions can be reduced to technical exercises in formal rule application, most such people, especially at elite institutions, also recognize that technical competence by itself cannot determine the outcome of Supreme Court cases. Yet they have another escape route that allows them to avoid acknowledging that, at the level of Supreme Court decision making, the distinction between law and politics is largely meaningless. That escape route appears whenever such people invoke the need for "good judgment," "common sense," "reasonableness," "sound public policy," and other such phrases that are all shorthand for "the (narrow) range of political beliefs considered acceptable among people such as ourselves." This tendency is captured well in a passage from The Legal Process, the written version of the enormously influential course taught at Harvard Law School by Henry Hart and Albert Sacks in the 1950s and 1960s, which argues that judges should interpret legislation as if it were the product of "reasonable persons pursuing reasonable purposes reasonably." An institution must maintain a high degree of ideological consensus to mask the fundamental emptiness of that sort of advice -- and for the most part elite legal academia has been up to the task.

-- Paul Campos

See also: Now there's the smoking gun! Kagan uses the Socratic method. Surely, this revelation will torpedo the nomination!

July 24, 2010

Bernanke's macro conundrum

If the Fed were to suddenly announce a big new program of asset purchases, it could cause inflation expectations to jump. That could raise nominal interest rates and lead to a rise in the price of oil as investors use commodities to hedge against inflation. In such a worst-case situation, the recession could become even worse.

Fed in Hot Seat Again on Economic Stimulus
Published: July 20, 2010
The Federal Reserve's chairman, Ben S. Bernanke, may be willing to pursue additional stimulus measures, but not quite yet.

July 23, 2010

Fannie Mae and Freddie Mac, the two mortgage always require enough income to pay for the loan on closing day

Fannie Mae and Freddie Mac, the two mortgage financing giants, have always required that borrowers have enough income to pay for the loan on closing day and that lenders document that the income is likely to continue for at least three years.

But since disability payments typically do not continue for that long, some lenders will not count it as qualifying income, several mortgage brokers have said. Some lenders may require new mothers, or others on short-term disability, to reapply for the mortgage once they return to work.

HUD to Investigate Mortgage Loan Denials
Published: July 21, 2010
The agency will look into refusals by some lenders to make home loans to people who were pregnant or on short-term disability.

July 22, 2010

Ludlow Street can be good

This New York street is narrow, for the most part, and the sidewalk is pocked by open cellar doors, some leading to private storage, others to subterranean boutiques run by impossibly chic Japanese women. Rent-regulated apartments in tenement buildings are juxtaposed with high-design conversions.

-- Ludlow Street, NYC

Real Estate
Ludlow Street, Light and Dark
Published: July 15, 2010
Home to chic boutiques and cafes as well as clubs and bars, Ludlow Street bustles both day and night.

July 21, 2010

Beijing edition of Queens' Crap.

Instead, they seize property in parts of the city they deem "unhygienic and unsafe," rezone much of it as commercial property and sell it for huge profits. The concession to history often consists of a few new buildings with upturned eaves and garishly painted timber slapped on concrete facades.

Aarguments have had limited impact on this redevelopment-crazed city. In recent years, two-thirds of Beijing's 3,000 narrow lanes, known as hutongs, have been subsumed by mega-developments, many of them in neighborhoods that were officially designated preservation zones.

Bulldozers Meet Historic Chinese Neighborhood
Published: July 20, 2010
An area that has towers dating back hundreds of years will become an attraction called Beijing Time Cultural City.

July 20, 2010

Top households earn $210,000 or more: Middle Class

But the Top 5 percent in income earners -- those households earning $210,000 or more -- account for about one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts, according to an analysis of Federal Reserve data by Moody's Analytics. That means the purchasing decisions of the rich have an outsize effect on economic data. According to Gallup, spending by upper-income consumers -- defined as those earning $90,000 or more -- surged to an average of $145 a day in May, up 33 percent from a year earlier.

Then in June, that daily average slid to $119. "I think a lot of that feeling that the worst was over has sort of abated," said Dennis J. Jacobe, Gallup's chief economist.

Although real estate brokers in Manhattan and the Hamptons report that buyers at the high end have returned, and Mercedes sales in the United States are up 26 percent this year, other indicators suggest a slowdown.

Wealthy Reduce Buying in a Blow to the Recovery
Published: July 16, 2010
The cautious attitude stems from concerns about global instability and the recent volatility of stocks.

See also The NYT Still Has Not Heard About the Housing Bubble

July 19, 2010

The lower a family's socioeconomic position, the more likely the student was to be admitted ?

Last year, two Princeton sociologists, Thomas Espenshade and Alexandria Walton Radford, published a book-length study of admissions and affirmative action at eight highly selective colleges and universities. Unsurprisingly, they found that the admissions process seemed to favor black and Hispanic applicants, while whites and Asians needed higher grades and SAT scores to get in. But what was striking, as Russell K. Nieli pointed out last week on the conservative Web site Minding the Campus, was which whites were most disadvantaged by the process: the downscale, the rural and the working-class.

This was particularly pronounced among the private colleges in the study. For minority applicants, the lower a family's socioeconomic position, the more likely the student was to be admitted. For whites, though, it was the reverse. An upper-middle-class white applicant was three times more likely to be admitted than a lower-class white with similar qualifications.

This may be a money-saving tactic. In a footnote, Espenshade and Radford suggest that these institutions, conscious of their mandate to be multiethnic, may reserve their financial aid dollars "for students who will help them look good on their numbers of minority students," leaving little room to admit financially strapped whites.

But cultural biases seem to be at work as well. Nieli highlights one of the study's more remarkable findings: while most extracurricular activities increase your odds of admission to an elite school, holding a leadership role or winning awards in organizations like high school R.O.T.C., 4-H clubs and Future Farmers of America actually works against your chances. Consciously or unconsciously, the gatekeepers of elite education seem to incline against candidates who seem too stereotypically rural or right-wing or "Red America."

This provides statistical confirmation for what alumni of highly selective universities already know. The most underrepresented groups on elite campuses often aren't racial minorities; they're working-class whites (and white Christians in particular) from conservative states and regions. Inevitably, the same underrepresentation persists in the elite professional ranks these campuses feed into: in law and philanthropy, finance and academia, the media and the arts.

The Roots of White Anxiety
Published: July 18, 2010
To understand the country's polarization, take a look at the admissions process at elite private colleges.

July 18, 2010

Dodd-Frank FinReg: 533 new rules

The result of Financial Regulsation, according to the Chamber of Commerce, calls for 533 rules, 60 studies and 94 reports. Regulators will be in charge of all of them. (Finance and Law)

-- EzraK

July 17, 2010

The Big Shirk's reading list

Like Vernon Jordan, Clay Shirky can read.

July 16, 2010

BMW Classic

BMW-classic.com supports classic older BMW autos with parts, service, restoration, information (brochures, press kits, service manuals), and museums and rentals.
Rent a restored 1960s BMW rebuilt by the factory !

Example: 1968-1975 e3, prelude to the 5 series.


July 14, 2010

Skin-whitening Facebook India app

Vaseline launches skin-whitening Facebook India app
(AFP) - 15 hours ago

NEW DELHI -- Skincare group Vaseline has introduced a skin-lightening application for Facebook in India, enabling users to make their skin whiter in their profile pictures.
The download is designed to promote Vaseline's range of skin-lightening creams for men, a huge and fast-growing market driven by fashion and a cultural preference for fairer skin.


The widget promises to "transform your face on Facebook with Vaseline Men" in a campaign fronted by Bollywood actor Shahid Kapur, who is depicted with his face divided into dark and fair halves.
"We started campaign advertising (for the application) from the second week of June and the response has been pretty phenomenal," Pankaj Parihar from global advertising firm Omnicom, which designed the campaign, told AFP.

In 2005, Indian cosmetics giant Emani launched the first skin-whitening cream for men, called "Fair and Handsome", 27 years after the first cream for women.
Since then a half dozen foreign brands have piled into the market for men, including Garnier, L'Oreal and Nivea, which promote the seemingly magical lightening qualities of their products in ubiquitous advertising.

In 2009, a poll of nearly 12,000 people by online dating site Shaadi.com, revealed that skin tone was considered the most important criteria when choosing a partner in three northern Indian states.

( See also )

If Samuel L Jackson used it ?


July 13, 2010

Perpetual trusts: The Rising Power of the American Dead

Tax breaks are not the only special advantages that American dynasty trusts provide. Even more troubling, they commonly include a "spendthrift clause," which provides that trust assets cannot be reached by a beneficiary's creditors. If a beneficiary causes a car accident, for example, the victim cannot be compensated with assets from the trust, even if they are the driver's only resources. So beneficiaries are free to behave as recklessly as they like, knowing that their money is forever protected for themselves and their heirs.

Surprisingly, dynasty trusts can also be bad for the beneficiaries themselves. Many wealthy people agree with Andrew Carnegie and Warren Buffett that it is not in their children's best interest for them to be given so much wealth that they don't need to work. Dynasty trusts rob future parents of the ability to decide this for their children, because the ancestor creating the trust is the one who determines how much wealth each generation of his descendants will receive.

What can be done to eliminate these trusts? A state-level solution is unlikely, since all 50 states would need to act in unison. But Congress could fix the problem by limiting the generation-skipping-transfer exemption to trusts that last no longer than two generations. After that, beneficiaries of a trust should be subject to tax, like everyone else. Then America would not have to face the uncontrollable growth of a new aristocracy.

Ray D. Madoff, a professor at Boston College Law School, is the author of "Immortality and the Law: The Rising Power of the American Dead."

America Builds an Aristocracy
Published: July 9, 2010
Congress should put an end to dynasty trusts, which give wealthy families unfair protection against taxes and the claims of creditors.

July 12, 2010

Return on internet sales tax

the 1998 Internet Tax Freedom Act forbids such internet sales taxes ? No.

On the other side are the big Internet retailers, such as Amazon.com and eBay, which have fought hard to maintain a status quo that gives them a marked advantage over local brick-and-mortar merchants. Amazon.com, the largest and best-known Web retailer, has fought efforts to collect sales tax from customers. The company argues that the crazy quilt of taxing jurisdictions -- there are approximately 8,500 in the United States -- makes doing so impractical.

Nonsense -- an industry that can deliver tailored ads to buyers in a fraction of a second could surely solve whatever technical problems exist. And it already has: Reed Hastings, the chief executive of Netflix, told the New York Times, "We collect and provide to each of the states the correct sales tax. There are vendors that specialize in this (we use Vertex). It's not very hard." Plus,

The Tax Freedom Act isn't an obstacle
Although many people believe that the Internet Tax Freedom Act stands in the way of collecting sales taxes on Web-purchased items, it doesn't. The major thrust of the law is to forbid states from imposing a sales tax on Internet connection fees. It also stops states from imposing a sales tax on items sold via the Internet that aren't taxed in brick-and-mortar stores, an unlikely form of discrimination. And it forbids collecting higher taxes for e-commerce purchases than for brick-and-mortar and mail-order purchases.

What does stop states from collecting sales taxes on e-commerce goods is a 1992 ruling by the U.S. Supreme Court that the states could not order retailers that don't have a physical presence in the state to collect sales tax. Back in 1992, that really meant mail-order catalog merchants, but by extension, it applies to Web retailers as well. However, there's nothing in the decision (Quill v. North Dakota) that forbids states from ordering buyers to pay the sales tax, says Michael Mazerov, a senior fellow at the nonpartisan Center on Budget and Policy Priorities in Washington, D.C., who has written extensively about the sales tax issue.

And it doesn't stop states from taxing a company like Amazon.com that has a brick-and-mortar affiliate within their borders. Amazon.com affiliates aren't those third-party sellers on its website; they are typically companies that have an Amazon.com ad on their own website. When a consumer clicks on the ad and goes to Amazon.com to make a purchase, the affiliate gets a cut of the revenue.

Is the free ride fair?

via Why it's time to tax Internet sales," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line.

July 11, 2010

Why American healthcare costs are high

A member of the Chukchansi tribe in California, Andrews is 6-foot-4 and about 250 pounds, with tattoos of his spirit animals ringing his thick biceps. He doesn't joust because he's attracted to romantic notions of honor and chivalry or because he has an affinity for the medieval period. ("I don't know jack about history, nor do I care," he says.) He does it because he considers jousting one of the most extreme sports ever invented, and he likes doing things that most other people can't or won't do.

"I like violent sports," says Andrews, who also participates in mixed martial arts. "I like hitting you. I like getting hit. I like competing man to man to see who the better man is that day."

The problem is that Andrews and Adams joust in a style they call "full contact," which, while popular in North America, is considered by the rest of the world to be unnecessarily dangerous. It's a reputation that isn't helped by the video on YouTube showing the two men describing their many injuries, including the time a lance bruised Andrews's heart and he nearly died from a pulmonary embolism. (He was back jousting five days after his release from the hospital.)


Over time, modern jousters have learned the lessons of their medieval predecessors -- plate armor protects better than chain mail, and more armor protects better than less. Even so, there are still plenty of injuries: concussions and dislocated shoulders, broken hands, assorted fractures and gashes. In one much-talked-about incident a few years ago, the Australian jouster Rod Walker suffered a partly severed penis when a lance veered south during a match at a Renaissance fair in Michigan -- a targeting failure that might not have happened if both he and his opponent hadn't been competing with broken hands.

It is these incidents that keep European jousters from coming to the U.S. to compete, and has those who have swearing they won't return. European jousters typically use lances with balsa-wood tips, which produce fewer dangerous splinters and deliver a less powerful hit. "Come do our sport and break your bones -- that's not the ideal recruitment poster," says Petter Ellingsen, a Norwegian jouster who has competed in nine countries and been injured badly only twice -- both times when competing in what he calls "the American style." "I don't think it's cool completing a tournament with four broken bones in my hand," he says. "I think it's bad for the sport."

Is Jousting the Next Extreme Sport?
Published: July 5, 2010
Can a band of American knights turn "full contact" jousting into an action sport?

July 6, 2010

Fannie Mae to punish people who walk away from a mortgage that they could still pay (Strategic defaults)

One of the sanctions is that Fannie Mae will refuse to buy a mortgage by anyone who had strategically defaulted for 7 years. This could have a big impact on a person's ability to get a loan if Freddie Mac adopts the same policy and the two companies still dominate the secondary market 7 years from now. However, if the companies are shut down, as many people advocate (perhaps more will now), then this sanction will be meaningless.

Fannie's secondary-market ban is not part of that contract. It may be (almost certainly is) aimed at stopping people from strategically defaulting on mortgages that Fannie already owns.

Read more:

Analysts Question a Threat by Fannie
Published: June 24, 2010
Experts wondered what Fannie Mae, the mortgage finance giant, hoped to achieve by announcing it would punish owners who strategically defaulted.

See also (Dean Baker), WSJ NICK TIMIRAOS, Felix Salmon, Ezra, Clusterstock / Atlantic / McMegan.

July 5, 2010

Avertisseur radar "radar warning": Vive le Navx, a la trapster

Navx is a €1m a year French company whose business is speed radar location databases. In France, it is illegal to sell or use selling radar detectors, devices that pick the microwave or laser radiation emitted by speed guns and automated cameras. But providing speed trap location data is lawful. In fact, the French Interior Ministry maintains a public database for fixed radars. And companies such as Navx, or various GPS makers supply location information for mobile radars.

-- Frédéric Filloux

July 4, 2010

Middle class includes $175k in Brooklyn or South Orange, NJ

While our analysis was by no means scientific, our goal was to recreate the type of decision a hypothetical family of four earning $175,000 a year might encounter. We chose an upper-middle-class income because that's generally what our family needs to earn, conservatively, to afford a median-price home in Park Slope, a section of Brooklyn that is family-friendly, has good schools and is generally more affordable than Manhattan.

The two-bedroom, one-bathroom co-operative apartment that we're using as a model in Park Slope is listed at $675,000, close to the median price for the neighborhood, as calculated by Zillow.com.

We stacked that against a four-bedroom, two-and-a-half bathroom home in South Orange, N.J., just a 30-minute train ride from Manhattan, where the two parents work. The house is selling for $595,000.


YOUR MONEY High-Rise, or House With Yard? By TARA SIEGEL BERNARD Published: July 2, 2010 An assessment meant to mirror a decision a family of four in the New York metropolitan area might face found that suburban living cost 18 percent more than urban living.