Solving the jobs crisis through despair

Some goodish news from the Fed...

The unemployment rate, it predicted, would still be at least 8.5 percent at the end of 2012, at least 7.8 percent at the end of 2013 and at least 6.8 percent at the end of 2014.

But at least that's a drop in unemployment, right?

Such reductions probably would come in part from people abandoning the search for work, rather than those finding new jobs.

 (Sigh.) Expect government officials to tout the falling unemployment rate even as other indicators—median wages, number of households in poverty—continue to stagnate or get worse.

The unseen casualties of a decade of war

Adolescent boys with at least one parent in the military are at elevated risk of engaging in school-based physical fighting, carrying a weapon and joining a gang, according to research presented today at the American Public Health Association’s 139^th Annual Meeting in Washington, D.C.

 

The study by researchers at the University of Washington’s School of Public Health looked at the strain of military deployment on U.S. families, particularly its toll on adolescent boys and girls whose parents are on active duty. The research is based on data from the 2008 Washington State Healthy Youth Survey of more than 10,000 adolescents in the 8^th, 10^th and 12^th grades of public schools.

The study finds that military deployment is associated with a 1.77 higher odds of physical fighting and 2.14 higher odds of gang membership among adolescent boys in 8^th grade. Girls in 8^th grade with at least one parent in the military were at twice the risk of carrying a weapon.

via apha.org

Media Research Center on the Herman Cain scandal: Clinton! Clinton! Clinton!

The Media Research Center seems to think the media is proving its liberal bias by covering the Herman Cain scandal so closely, whereas it strained to ignore the Clinton sex scandals of the 1990s. Which is weird, because my memory of the late 1990s is that political coverage was dominated, for a time, by news of Clinton's sex scandals. There was even an impeachment or something.

Nonetheless, MRC concludes:

When one contrasts the sexual harassment scandals of Democrat Bill Clinton, which included on the record accusers, with the hazy allegations against Republican Herman Cain, it becomes clear that the networks have enthusiasm for one and ignored the other.

That's interesting framing, because the "hazy allegations" against Cain are actually confirmed cases that were settled with monetary payouts a decade ago. That makes them somewhat more tangible than the MRC suggests, it seems to me.

Thomas Sowell defends usury

At NRO today, Thomas Sowell gets cranky about a California newspaper's investigation into "payday loan" companies and their practices. He particularly objects to a line suggesting that customers of such institutions are charged what amounts to an annual interest rate of more than 400 percent:

The 460 percent figure comes from imagining that the borrower is not just going to borrow the money for a couple of weeks, but is going to keep on borrowing every couple of weeks all year long.

Using this kind of reasoning — or lack of reasoning — you could quote the price of salmon as $15,000 a ton or say a hotel room rents for $36,000 a year, when no consumer buys a ton of salmon and few people stay in a hotel room all year. It is clever propaganda, but do people buy newspapers to be propagandized?

Sowell, having raised such questions, might've attempted to answer them.

That might've detracted from his screed, though, because the evidence is that quite a few customers actually do get caught in a debt spiral with these companies. In 2007, Michael Stegman did an overview of the industry for the Journal of Economic Perspectives:

Sowell, in the end, decries the story as part of a lefty plot to keep payday lenders from defending themselves:

Instead, we get the story of how the payday-loan industry, like most other industries, has lobbyists contributing money to politicians to try to be spared more regulations. This the investigative reporter calls “protecting” the payday-loan industry.

Protecting it from what? From the politicians. Some would call their campaign donations “protection money,” in the same sense in which the mafia collects protection money.

Not exactly. In California, the payday loan industry has put its muscle behind a bill that would boost their profits by letting them lend greater amounts of money at higher rates of interest. That's not defensive, it's aggressive. If Sowell's mafia analogy is correct ... well, let's just say the payday industry would be the guy in the leather chair, stroking a cat.

I suspect the broader argument is that payday companies provide a valuable service, which workers are free to use or not use. But it certainly appears that the systemic incentive is to put the working poor on the hook and encourage them to stay there for as long as is profitable. Sowell's fellow conservatives like to talk a lot about liberty from government, but payday loan lenders offer plenty of evidence there are other institutions that offer oppression, which is no less pernicious.

Rand Paul is really angry about the Herman Cain scandal story

Paul adds that fear of sexual harassment suits damages workplace relations.

“There are people now who hesitate to tell a joke to a woman in the workplace, any kind of joke, because it could be interpreted incorrectly,” he says. “I don’t. I’m very cautious.” 

via nationalreview.com

You know what else damages workplace relations? *Sexual harassment.* It's ok, I think, to be cautious about telling that dirty joke.

We know how to help the economy: Aid distressed homeowners

I found this recent magazine article very interesting. Here are a couple of key paragraphs from it:

Underwater homeowners can’t refinance at today’s rock-bottom interest rates, because they’re considered bad credit risks. They can’t move to where jobs are more plentiful or the pay is better, because if they sell their home, they end up owing the banks a bundle. But if they lose their job, their wages drop. If they have a medical emergency, they may fall behind on their mortgage payments and be foreclosed upon. If that happens, they and their family can lose both their home and their credit rating.

We don’t need another stimulus to fix what ails the economy. We need to fix the housing market. And the way to do that is to allow a mortgage cramdown in the context of a personal bankruptcy. Put simply, someone who owes $450,000 on a house worth $300,000 isn’t going to be helped that much by a lower interest rate. He would be helped​—​as would the housing market and the larger economy​—​if the lender could be compelled in a bankruptcy proceeding to write down the loan amount to $300,000, which is all the lender would recover in any case were it to foreclose on and then auction off the property.

Oops! That's actually two different magazine articles—the first paragraph comes from Robert Reich's piece in November's American Prospect, a liberal magazine. The second—and this is kind of shocking—is from Ike Brannon, writing in the conservative Weekly Standard.

Reich and Brannon have slightly different approaches to the issue, but their bottom line is roughly the same: Distressed homeowners should have their mortgages written down to reflect the post-bubble value of their homes—so that those owners don't owe more than what the house is worth. Banks make no less money than they would if they were forced to foreclose, but owners gain back some of their money and freedom to move to a new job.

Free those underwater homeowners, and they might start buying stuff again. When people start buying stuff again, demand will rise and the people who make and sell stuff will likely start hiring more people to make and sell that stuff. The economy would get new life.

Smart people on the left and right can see this. Yet a serious effort to help these homeowners doesn't seem to be in the offing, either from the president, his GOP rivals for the office, or Congress. Why not?

Blog news

First of all, a thank you to everybody who reads this blog regularly: October was the best traffic month I've had since returning to this Blogspot site after leaving Philadelphia Weekly. It's more gratifying to write this stuff when people are actually reading it.

Second of all: I'm certain I won't break that record in November. I have my (knock on wood) final diverticulitis surgery on Nov. 8, and preparations are already consuming my time and mental energy. I won't be here quite as much this month. I'm sorry about that. My hope is that being restored to full health allows me to write and opine more vigorously than before.

I had thought, for a little while after the first of my three surgeries, that I might abandon political blogging entirely. What I've discovered in recent months is that I have a passion for understanding and making sense of how the country is run, and how it might be run better. I want the blog to reflect my other interests, too: Parenting, cooking, reading, movies. But the core of it will continue to be learning and thinking about policy and politics. My hope is not to hew to orthodoxy, but to be an independent thinker. Maybe even "original thinker" on occasion, but I'll settle for independent at the least.

So I hope you're still here when I come back. Thanks again for reading.