Some longer form weekend reads:

• Copula culture (Alphaville)
• The Curse of Knowledge (The New Republic) see also The Smart Are MORE Biased To Think They Are LESS Biased (Overcoming Bias)
• More Student Debt, Please: Why College Students Don’t Borrow Enough (The Atlantic)
• Why Google Isn’t Making Us Stupid…or Smart (Hedgehog Review)
• The Evolution of Religion (American Interest)
Happyism: Happiness is more complicated than previously believed (The New Republic)
• When Crowd Sourcing Reveals Its Limits (WSJ)
Stiglitz: It’s no accident that Americans widely underestimate inequality.  We’ve been brainwashed (Salon) see also War or Revolution Every 75 Years. It’s Time Again. (Brave New World)
• Does All Wine Taste the Same? (New Yorker)
James Brown: Did He Feel Good? (City Journal)

What are you reading?

 

When Slow Growth Looks Good

Source: NYT

Category: Financial Press, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

25 Responses to “10 Weekend Reads”

  1. swag says:

    David Rosenberg amuses Bill McBride. He makes him laugh.

    http://www.calculatedriskblog.com/2012/06/david-rosenberg-cracks-me-up.html

  2. Arequipa01 says:

    Weissman’s article on student debt makes no mention of the fact that student loan debt underwritten by the federal government is not dischargeable in bankruptcy. FAIL

    Also on the comments under the article, someone compiled a list of the organizations that funded the studies Weissmann cites:

    “”Cui bono?”

    - The board of directors of the National Center for Public Policy and Higher Education (behind the 2005 paper) is almost entirely comprised of college administrators and professors http://www.highereducation.org

    - Ditto for the board of directors of Education Sector (the follow-up analysis) http://www.educationsector.org

    - One of Education Sector’s funders is the Lumina Foundation, which was spun off from erstwhile student loan guarantor USA Group when it sold its assets to Sallie Mae: http://www.educationsector.org…, http://www.luminafoundation.or

    - The Lumina Foundation’s main goal is to have 60% of the US population have a degree of some sort by 2025: http://www.luminafoundation.or

    - The 2008 DOE study was partially funded both by TG – an administrator of the FFELP (Federal Family Education Loan Program) and USA Funds – the leading student-loan guarantor. http://www.ihep.org/assets/fil

    In other words, nearly every study in this article was at least partially funded by parties that want only to have more and more student loans either in their vaults or on their accounts receivable ledgers. No wonder the focus is never on how to reform student loans – to make them dischargeable in bankruptcy, for example, or to do away with the awful consequences of default (seeing as only 39% of student loans are in active repayment at the moment), or to get rid of capitalizing interest for students on forbearance/hardship/IBR, so the balance doesn’t keep spiralling out of control. Or any of dozens of constructive solutions. No, the conversation is “Students who borrow money and drop out are in trouble, so let’s postulate that if they were even further in the hole, they could afford to graduate.”

    “Cui bono?”"

  3. on..
    • More Student Debt, Please: Why College Students Don’t Borrow Enough (The Atlantic)

    “A. Friend” sent..

    “…Weissman’s article on student debt makes no mention of the fact that student loan debt underwritten by the federal government is not dischargeable in bankruptcy. FAIL

    Also on the comments under the article, someone compiled a list of the organizations that funded the studies Weissmann cites:

    “”Cui bono?”

    - The board of directors of the National Center for Public Policy and Higher Education (behind the 2005 paper) is almost entirely comprised of college administrators and professors http://www.highereducation.org

    - Ditto for the board of directors of Education Sector (the follow-up analysis) http://www.educationsector.org

    - One of Education Sector’s funders is the Lumina Foundation, which was spun off from erstwhile student loan guarantor USA Group when it sold its assets to Sallie Mae: http://www.educationsector.org…, http://www.luminafoundation.or

    - The Lumina Foundation’s main goal is to have 60% of the US population have a degree of some sort by 2025: http://www.luminafoundation.or

    - The 2008 DOE study was partially funded both by TG – an administrator of the FFELP (Federal Family Education Loan Program) and USA Funds – the leading student-loan guarantor. http://www.ihep.org/assets/fil

    In other words, nearly every study in this article was at least partially funded by parties that want only to have more and more student loans either in their vaults or on their accounts receivable ledgers. No wonder the focus is never on how to reform student loans – to make them dischargeable in bankruptcy, for example, or to do away with the awful consequences of default (seeing as only 39% of student loans are in active repayment at the moment), or to get rid of capitalizing interest for students on forbearance/hardship/IBR, so the balance doesn’t keep spiralling out of control. Or any of dozens of constructive solutions. No, the conversation is “Students who borrow money and drop out are in trouble, so let’s postulate that if they were even further in the hole, they could afford to graduate.”…”

    as ‘We’ have learned..”More Debt” is, always ‘the Answer’..

  4. Arequipa01 says:

    Weissman’s article on student debt makes no mention of the fact that student loan debt underwritten by the federal government is not dischargeable in bankruptcy. FAIL

    Also on the comments under the article, someone compiled a list of the organizations that funded the studies Weissmann cites.

    How about this?

  5. Orange14 says:

    Here’s an interesting article from yesterday’s NY Times with some provocative questions for the brilliant minds of The Big Picture! $14.5 billion was spent on improving flood control in New Orleans (http://www.nytimes.com/2012/06/15/us/vast-defenses-now-shielding-new-orleans.html?hp ). This came from an explicit Congressional appropriation and apparently no state funds were involved in this very large construction project. This raises some interesting political/economic questions:
    1. Was this a good expenditure of Federal money?
    2. Under future budget plans proposed by the Republicans, should Federal funds be used for such projects?
    3. Shouldn’t the state have been required to fund some portion of this project since it benefited residents within the state? If so, what percentage?
    4. The metropolitan New Orleans area has a population of 1.16 million. Assume that ¾ of those were already protected by the existing levee system and this adds incremental protection to ¼ of the remaining populace. This upgrade now protects an additional 290,000 people. Would a better result be achieved by a direct cash payout of $30,000 for each person to permit them to relocate to a safer area? (note: There will be ongoing unknown maintenance costs to this system and the per person payout needs to be looked at in terms of what a family would receive – family of 4 would get $130,000)

  6. formerlawyer says:

    On the chart.
    In the Eurozone – not having a functioning governent leads to the best economic recovery?

  7. Mike in Nola says:

    Bias is a big problem with juries. Jurors always think they are unbiased, no matter how biased they are, even if they aren’t smart. Many judges are not better. One of the functions of jury selection is ferreting out the ones who are hopelessly biased against your client and trying to get rid of them, of course, while leaving alone ones that might be hopelessly biased against the other side :)

    I don’t know if it is the custom in all Federal Courts, but in the New Orleans area, the lawyers don’t get to ask questions directly to the jurors during jury selection. You have to submit questions to the judge who asks them, often with no followup or probing to find out what the potential juror really thinks. Stopping lawyers from directly questioning prospective jurors is good in one way, as there are many seminars and articles on how to use the jury selection process to indoctrinate jurors to be sympathetic to your side. OTOH, not being able to ask follow up questions prevents you from finding out what they really think. And this is important, as biased jurors often try to hide it so they can get on the jury and “do what’s right” no matter what the judge tells them the law is.

  8. constantnormal says:

    I (briefly) tried to figure out how to do this in FRED, but didn’t spend enough of my Saturday morning to figger it out … if you download the FRED working age population data (USAWFPNA) and crank out a chart of the annual percentage changes in it, you arrive at a peculiar downward slope that I am reluctant to ascribe to demographic (boomer bubble) effects. Here’s a link to my cobbled-together chart: http://db.tt/mJDmB9do

    I was looking to make the point that “slow growth” needs to be faster than the growth of the working age population to make it into the “good” category, but ended up raising more questions in my own mind … anyone able to explain this decline for me?

  9. ilsm says:

    Weekend reading:

    GAO 12 437: http://www.gao.gov/products/GAO-12-437

    DoD will spend around $1510B through 2037 trying to fly the paper weight called the Lightning II. The P-38 Lightning is the twin engine prop driven fighter which got Yamamoto in the Solomons during WW II. The US is preparing a stealthy single engine boondoggle to get a future author of a fictional war.

    4% of testing done with scores of production airplanes ordered. No idea what it will cost to fix the untested unknowns, or the known problems for that matter.

    This a not good expenditure of Federal money.

    Should $4600 per US citizen be wasted on an airplane model which does not work?

    Under future budget plans proposed by the Republicans, federal funds will be used for trillions in such boondoggles.

    The US should not spend money to keep inept engineers working!

  10. Bam_Man says:

    I found the New Yorker article on wine tasting to be ridiculous.
    The supposed “junk” wine from New Jersey that held its own in a blind tasting with the likes of Mouton-Rothschild was a $35 bottle. The fact that status-crazy Chinese (among others) have driven the price of “prestige label” Bordeaux to $1000 a bottle does not mean that those wines are worth it.
    Anyone with a decent wine cellar and tasting experience will tell you that once you are spending more than $30 on a bottle of wine, you are probably wasting your money. And that is especially true today when there is more high-quality, reasonably priced wine than ever being made virtually everywhere.

  11. mathman says:

    This is a bit scary (via cryptogon):

    http://www.forbes.com/sites/andygreenberg/2012/06/15/new-grad-looking-for-a-job-pentagon-contractors-post-openings-for-black-hat-hackers-2/

    (from the article)
    “Defense contractor giant Raytheon is looking for a “Unix Attack developer.” TeleCommunications Systems wants a “Windows Attack/Exploit Developer.” NSA contractor SAIC seeks a “Red Team Developer.” All three of those companies’ job descriptions include the phrase: “analyzing software for vulnerabilities as well as development of exploit code.”

    Hypponen says the job searches he began out of curiosity show a marked uptick in these self-described offensive hacker jobs for U.S. government contractors. “I think this is new,” he says. “The arms race has started, and this proves it. It’s a clear sign of the demand to stockpile cyber weapons and expand the operations underway.”

    and this (same source)

    http://www.pcpro.co.uk/news/security/375169/could-us-cyberspies-have-moles-inside-microsoft

    http://www.forbes.com/sites/andygreenberg/2012/06/12/to-spy-on-offline-computers-flame-malware-was-designed-to-turn-humans-into-data-mules/

  12. Mike in Nola says:

    Orange14:
    This question has been discussed by residents. Some areas of New Orleans and the parishes below New Orleans are really impossible to protect at reasonable cost.
    The worst example was New Orleans East, as it is known, was developed starting in the late 1950′s on swampland that is apt to flood. There were some expensive areas when Saints and Hornets players lived. Of course it did flood from tidal surges ccoming up the Intracoastal Waterway. The then-Mayor, Ray Nagin, encouraged people to move back, my guess is because they were mostly black and he wanted the votes. There were plenty of houses and lots inside the more easily protected areas to which those people could have moved, but the spent a great deal of insurance and grant money rebuilding houses that will likely flood again in a powerful storm regardless of the money spent. Additionally, the area was pretty sparsely populated and dangerous with many abandoned houses the last time I saw it a year or two ago. The low population density also makes provision of municipal services out there much more expensive on a per capita basis.

    Of course, this is all from someone who fortunately lived uptown near the River on some of the highest ground and that has never flooded, so I may be a bit biased. It was instructive when the once good Time Picayune published a map of New Orleans from the 1890′s. About the only places in New Orleans that didn’t flood in Katrina were those inhabited back then because it was land that wasn’t swampy and didn’t flood. Bienville and the early settlers didn’t have the marvels of modern technology to lull them into a false sense of security.

  13. Bob is still unemployed   says:

    I liked the article on wine tasting.

    I’ve done something along those lines myself. My friend likes shiraz wines and he says the price point he likes is around $20 per (0.75 liter) bottle. I tend towards Black Box wines, and their shiraz is, I think, pretty good. The Black Box shiraz runs around $22 for a 3 liter box.

    One evening I conducted a double blind taste test. A third friend poured the two sample wines (the $20 0.75 liter bottle and the $23 three liter box) into two glasses on a tray in the kitchen. The friend left the kitchen and I went in to retrieve the tray and glasses of wine. I placed the tray in front of my friend (not the one who did the pouring), and he tasted them. We repeated this five times.

    Four out of the five times, he picked the Black Box shiraz. When informed of this, he protested that we didn’t allow the bottled wine to breathe. So the two wines were decanted, and we did the test once again.

    This time, five out of five times he picked the Black Box shiraz. Wine from the very same box that he refused to drink two days earlier.

  14. Bob is still unemployed   says:

    Aside from BR’s recommended weekend reading list, I have also read Matt Taibbi’s excellent blog post on Mr. Dimon’s testimony before the Senate Banking Committee.

    “…But I wasn’t prepared for just how bad it was. If not for Oregon’s Jeff Merkley, who was the only senator who understood the importance of taking the right tone with Dimon, the hearing would have been a total fiasco. Most of the rest of the senators not only supplicated before the blowdried banker like love-struck schoolgirls or hotel bellhops, they also almost all revealed themselves to be total ignoramuses with no grasp of the material they were supposed to be investigating.

    That most of them had absolutely no conception of even the basics of the derivatives market was obvious. But what was even more amazing was that several of them had serious trouble even reading aloud the questions their more learned staffers prepared for them. Many seemed to be reading their own questions for the first time….”

  15. Orange14 says:

    @Mike in Nola – thanks for the comments. I wonder if Governor Jindal would support this huge spending of Federal $$s for what is essentially a state matter if he were president? :-)

  16. mad97123 says:

    Weissman’s article on student debt and the massive increase to over a trillion since 2003 does not mention how this is another form of back-door stimulus. Those unemployed students have been out spending that cash. Another apparent free ride the tax payers will ultimately have to pick-up.

  17. Joe Friday says:

    Stiglitz: It’s no accident that Americans widely underestimate inequality. We’ve been brainwashed.

    From his interview on Thursday’s NBR:

    STIGLITZ: If you look at the people who are at the top, they’re not the people who really transformed our economy. They’re not the inventors of the transistor, inventor of the laser, the computer, the discovery of DNA. The people who manipulated the system, the people, monopolists who actually use their monopoly power to contract output to increase their profits.

    The top 1 percent pays an average tax rate of 15 percent, less than those who work for a living. And that again distorts our economy because the way they got those lower taxes is because capital gains is taxed at a low rate, speculation is taxed at a low rate. So one of the easy things to do is to create a fair tax system where speculators are taxed just like workers.

    MORE….

  18. Iamthe50percent says:

    There is an easy fix for capital gains. Tax capital gains like all other income but adjust basis for inflation so the taxpayer is not unfairly taxed on illusory gains. Easy, algorithmically, that is. Probably impossible politically.

    And interest, why should interest be taxed lower than wages? Because we want to subsidize more savings and less spending?

  19. Jojo says:

    War or Revolution Every 75 Years. It’s Time Again.
    =========
    So when is the damm revolution going to start? Talk is cheap. Let’s get it on. Heads must roll!

  20. Jojo says:

    This is great and ties into the education spending story. I think today’s world has the best educated un/underemployed people in history.

    This is what happens when there are too many people and not enough jobs.
    ———–
    Not Where They Hoped They’d Be
    Jun 15, 2012

    Reuters recently assigned a number of photographers to capture images of a struggling generation. The result is this series of portraits of graduates from around the world who have been unable to find work in their degree fields and have ended up in poorly paid service industry jobs. Although their current positions may be disappointing, the subjects in these photos may count themselves lucky to have any job at all — the International Labor Organization estimates the number of people aged 15 to 24 without a job at almost 75 million. From a cook in Athens with a degree in civil engineering to a waiter in Algiers with a masters in corporate finance, these young people have spent years studying hard to compete in the 21st century, only to discover that even the most desirable qualifications mean little in a distressed global economy. [17 photos]

    http://www.theatlantic.com/infocus/2012/06/not-where-they-hoped-theyd-be/100320/

  21. machinehead says:

    @Arequipa01 — ‘Weissmann’s article … no mention that student debt is not dischargeable in bankruptcy … FAIL.’

    What a pinheaded wanker is Weissmann. I’ll bet some Ivy League diploma mill paid the frayed-collar journo-ho 500 dollars to flog more student loans.

    No wonder I don’t subscribe to The Atlantic no more. Next time you see an intellectual, shove him off the sidewalk!

  22. machinehead,

    if, ever, a “Truth in Masthead”-Bill were to be Passed..(read: “Truth in Advertising”)

    The Atlantic would, subsequently, be known as “The ATLantic”–though, they, then, would run the *risk of being confused with a Georgia-based ‘toon-sheet..(if they don’t, already..)

  23. Molesworth says:

    I think it’s time to start parsing candidate sentences, attempting to determine their underlying assumptions and verbal propositions.
    “I think, by and large, you can just look at the things the President has done and do the opposite,” Romney said when asked about Israel.
    http://www.bostonherald.com/news/us_politics/view.bg?articleid=1061139419&format=&page=2&listingType=politics#articleFull
    Propositions:
    You can look at things the President has done.
    You can do the opposite.
    Blanks you must fill in yourself:
    Things the President has done.
    Things that are the opposite of what the President has done.

    That leaves a lot of assumptions for the listener to figure out for themselves.
    I try BHO tomorrow.

  24. Frwip says:

    @Iamthe50percent

    Yes, that’s an obvious one. Tax capital gains like ordinary incomes, corrected for inflation. End of the story. No more BS like the carried interest loophole and so on. Ideally, the taxes would be be spread on the years over which the asset was held and filed as amended returns for each of these years to avoid timing tax games. It’s probably easily workable, thanks to electronic filing. All returns for the past 30 years are on tape somewhere at the IRS.

    But that’s only a small part of the story. Aside of a few tens of thousands of slime pukes like Romney, tax avoidance is mostly a cross-borders corporate game. That’s where it really hurts.

    Another problem is that the obscenity the US tax code has become over the past 30 or 40 years has disproportionally benefited a small group of profoundly malign individuals and entities, Kochs and assorted Romneys, and they are now deeply entrenched in their economic power. No change in the present tax code is going to lance that boil. That past must be undone in some way to extirpate that cancer on our society.

  25. farmera1 says:

    Gold Traders Bullish As Hedge Funds Increase Wagers

    http://www.bloomberg.com/news/2012-06-14/gold-traders-bullish-as-hedge-funds-increase-wagers.html

    Russia and China buying gold. India not so much. What will Bernanke do? Is QE 3, 4, and 5 coming????
    What happens to Europe???