And what is the profession of economics (which is not really about economics but about asset management and things of that nature) like in advanced capitalist societies (ADS)? It has its equivalent in traffic engineering...

• The Greenest of Green Cars

The Pope for once sounds like the founder of his religion...

Rome: Pope Francis has attacked the ''dictatorship'' of the global financial system and warned that the ''cult of money'' is making life a misery for millions.
He said free market capitalism had created a ''tyranny'' and that people were being judged purely by their ability to consume goods.
Money should be made to ''serve'' people, not to ''rule'' them, he said on Thursday, calling for a more ethical banking system and curbs on financial speculation. Countries should impose more control over their economies and not allow ''absolute autonomy'', in order to provide ''for the common good''.

More real talk...

''The worship of the golden calf of old has found a new and heartless image in the cult of money and the dictatorship of an economy which is faceless and lacking any truly human goal,'' he told the ambassadors.

The tip for this post came from Lark.

Two dead; six injured:

Last month, a nine-storey factory complex outside Dhaka, the capital of Bangladesh, collapsed, killing 1,127 people, in one of the world's worst industrial disasters.

The collapse prompted pressure on Western retailers that rely on cheap labour in the region, where safety standards are often substandard.

The garment industry is Cambodia's biggest export earner, with more than $4bn worth of products shipped to the US and Europe in 2012.

About 500,000 people work in more than 500 garment and shoe factories throughout the country.

A series of strikes by workers has pointed to festering discontent over low wages and tough conditions.

In February 2012, three women, employees of Puma supplier Kaoway Sports, were wounded when a gunman opened fire on protesters demanding better working conditions at factories.

The shooting prompted Puma, Gap and H&M to express their "deep concern" and urge a thorough investigation.

This series celebrates the great industriousness of the American workforce. The inaugural image: A white dog (name unknown) proudly guarding construction equipment in Columbia City. The protection of property is something that's very important to the American way of life. Without property there would be communism and Hitler.

The question in this post: How do the rich in rich countries make such huge sums of money? The answer to this question can be found at this point (17:00), of a lecture delivered at LSE by Richard B. Freeman, a labor economist who teaches at Harvard...

The big way they make money is through options, and now that the share market is [doing well], actual stocks received. People are making large sums money through ownership of shares and option of shares.

Jack Lew is President Obama's new chief of staff — arguably the most powerful office in the White House that isn't shaped like an oval. He used to work for the giant banking conglomerate Citigroup. His predecessor as chief of staff is Bill Daley, who used to work at the giant banking conglomerate JPMorgan Chase, where he was maestro of the bank's global lobbying and chief liaison to the White House. Daley replaced Obama's first chief of staff, Rahm Emanuel, who once worked as a rainmaker for the investment bank now known as Wasserstein & Company, where in less than three years he was paid a reported eighteen and a half million dollars.

The Dow Jones Industrial Average closed above 15000 for the first time Tuesday as stocks continue a historic four-year run that investors are finding increasingly irresistible.

Dow closes above 15000 in another landmark on the market's record run. Matt Jarzemsky joins The News Hub with a look back at the day in the markets.

The Dow is off to its fastest start to any year since the dot-com-fueled bull market of 1999. But this time around the surge isn't driven by blind optimism—many investors simply see few alternatives to stocks

Freeman also makes this point:

The total pay going to security commodities brokers is nearly equal to total pay for everyone working for the federal government.

WASHINGTON (CNN) — Rampant fraud in the mortgage industry has increased so sharply that the FBI warned Friday of an "epidemic" of financial crimes which, if not curtailed, could become "the next S&L crisis."

Assistant FBI Director Chris Swecker said the booming mortgage market, fueled by low interest rates and soaring home values, has attracted unscrupulous professionals and criminal groups whose fraudulent activities could cause multibillion-dollar losses to financial institutions.

"It has the potential to be an epidemic," said Swecker, who heads the Criminal Division at FBI headquarters in Washington. "We think we can prevent a problem that could have as much impact as the S&L crisis," he said.

Evidence of the death of market ideology? Two weeks ago, there was this...

A paper by two economists (Carmen Reinhart, now a professor at Harvard Kennedy School, and Kenneth Rogoff, an economist at Harvard University) who came up with some number (90%) that showed such and such a thing was true (government debt at this point slows growth) has been debunked only two years after it was published.

And now there is this...

Harvard professor and famous historian Niall Ferguson reportedly made some bizarre and offensive remarks about economist John Maynard Keynes at an investment conference yesterday.
According to financial writer Tom Kostigen, the editor at large of Private Wealth and Financial Advisor magazines, Ferguson made two startling suggestions about Keynes at the Tenth Annual Altegris Conference in Carlsbad, California:
Keynes' economic philosophy, Ferguson reportedly suggested, was the result of Keynes not caring about future generations.

Keynes didn't care about future generations, Ferguson reportedly suggested, because Keynes was gay and did not have children.

But know that the only mainstream economist to seriously think about the future of Western society is Keynes. Indeed, if you live in the West, the only piece of economic writing you need to bother with is his short paper "Economic Possibilities for our Grandchildren." All other economic works are useless to you and your condition.

When you have a socialist in power, like Obama, the "job creators" are handcuffed. So today, the rich suffered to learn that the Dow Jones crossed into the unknown...

U.S. stocks rose after government data showed the economy added more jobs than expected last month, offsetting a report that nonmanufacturing growth slowed and offering some relief to investors who had grown concerned that employment growth was stalling.
The Dow Jones Industrial Average closed in on the 15000 level, up 150 points, or 1%, at 14982.

Before I go into how the rich really make their money in our post-economy society, and how this explains the amount of political energy that our society spends on maintaining the illusion of the stock market's economic centrality, and why this political expenditure results in the public's inability to recognize the difference between economics and financial management, between real scarcity and culturally imposed scarcity, I want to return to the subject of my first post in this series, working hours. The Star Tribune calls this progress:

Minnesota lawmakers are looking to make 40 hours of work standard for all Minnesota workers, give them more family leave and increase their wages.
The current Minnesota law sets all three measures below the federal standards, which results in a patchwork of rules for state employers.
Under current law, about 80,000 to 115,000 Minnesota employees get overtime only after working 48 hours and workers at about 8,500 small businesses only have a right to six weeks of family leave. If the measure, approved in committee on Monday becomes law, all of those workers would get overtime after 40 hours and would have a right to 12 weeks of unpaid leave.
The measure approved Monday would also raise the Minnesota minimum wage to $9.50 an hour by 2015 for employees at large businesses...

You are already calling me a dreamer. But think about this point, which I first read about in Richard Wrangham's excellent book Catching Fire: How Cooking Made Us Humans but is reported here on Livescience.

The researchers measured the tooth sizes and body masses of four extinct hominids, modern humans, chimpanzees and other modern apes, using this information from modern animals to estimate time spent chewing in the extinct species. Chimpanzees, they found, spend 10 times longer chewing and eating than humans do, 48 percent versus 4.7 percent of their days.

Humans are definite outliers in primate chew time, because we eat cooked and processed food.

But there are people who already have lots of time on their hands (the unemployed); why aren't they doing amazing things? And besides, what else can we really do with the free time? I will have answers to these questions in later posts, but know for now that the production of knowledge is to the human what the production of honey is to the bee.

The number of people who are actively disengaged with their job has dropped by two whole percent...

[T]he percent of workers who are “actively disengaged” has been dropping ever so slightly—from 20 percent in 2006 to 18 percent in 2012.

If the widespread emotional detachment isn’t enough to worry leaders, then perhaps it’s also worth noting that Gallup has found that an organization’s productivity and profitability are directly tied to employee engagement. So when only 30 percent of the U.S. workforce is motivated, that’s an economic problem as well as a morale problem.

Time:

Economic pundits are bemoaning the fact that first quarter GDP numbers released last Friday were weaker than expected – growth was 2.5% rather than the 3% that everyone had been expecting.

I actually took it as positive news. For starters, was it really possible that we’d suddenly gone back to our normal, historic 3% trend growth? The optimism in the economic forecasts always seemed to have more to do with the fact that we didn’t fall completely off the fiscal cliff a few months back.

In fact, the economists and investors letting out a collective exhale a few months back made us forget about the coming effects of the sequester. But there was no denying them in the first quarter numbers – the slower than expected growth was all about the public sector slamming on the brakes. “The decline in government expenditure over the past two quarters is the biggest six month contraction since the Korean War ended,” notes Capital Economics’ chief US economist Paul Ashworth.

How can we tell that Duvvuri Subbarao, the current Governor of the Reserve Bank of India, is an actual economist and, someone like Henry Paulson, "an American banker who served as... Secretary of the Treasury" under Bush, is not? Go to the question period of a lecture, "India - Macroeconomic Challenges, Some Reserve Bank Perspectives," Subbarao delivered at the London School of Economics and listen to the exchange that happens around the 65:00 mark. A member of the audience asks Subbarao to explain why macroeconomic indicators are not positive and yet the stock market is booming; Subbarao answers: "As the reserve bank governor, I'm expected not to take notice of the stock market. I have no comment on that... I have no informed or educated view on that."

Now, go to the middle of the lecture (47:00), and I do recommend you listen to the whole lecture, and you will hear Subbarao discussing the argument that advanced capitalist societies (ACS) make to justify what is essentially unjustifiable—their continued economic compound growth. ACSs say that their growth is good because it translates into growth for the developing world. In short, they are growing not to benefit the West but the rest. No one in the world really believes this nonsense. Rich countries are growing not even for their own economies but for their stock markets. This gets us to a very important point in this series. In my first post, I explained why those who run the US Treasury of Federal Reserve are not economists. In my next, but not final post, I will explain exactly why they cannot ignore the stock market in the way that Subbarao can.

From a post on Souciant:

• Charlie Bertsch.

If this car were merely festooned with the “Commander in Thief” sticker, then, it wouldn’t be worthy of commentary. In states like Arizona, so many cars bear this sort of message that it no longer makes much of an impression. What sets this vehicle apart is the dialogue it creates between that anti-Obama sentiment and the sticker featuring a smiling Ronald Reagan that reads “Avenge me.” The implication is that the President has managed to undo the so-called “Reagan Revolution”, which, like the one Margaret Thatcher presided over in Great Britain, is credited with ushering in an era of leaner and, yes, meaner national government.

Wealthy Americans took a hit when the global financial crisis sent the economy into a nosedive, yet new research shows they alone — specifically, the richest 7% — benefited as households rebuilt their wealth in the first two years of the recovery. From 2009 to 2011, the average wealth of America’s richest 7% — the 8 million households with a net worth north of about $800,000 — rose nearly 30% to $3.2 million from $2.5 million, according to a Pew Research Center report that analyzed recent Census data. By contrast, the average wealth of America’s remaining 93%, some 111 million households, actually dropped by 4% to $134,000 from $140,000. Wealth is the value of what a household owns minus what it owes.

First New York, now Chicago. Will Seattle be next?

Demanding a hefty raise and a fair chance to form a union, workers in Chicago’s growing fast food and retail sectors plan to walk off the job Wednesday morning. The one-day walkout begins at 5:30 a.m. Central Time, and organizers expect 500 workers from a dozen chains to participate. The work stoppage follows similar strikes by New York City fast food workers and by Wal-Mart retail employees across the country, and marks the latest escalation in the struggle between an embattled labor movement and two industries that increasingly dominate and define the new economy.

“At the end of the day,” Macy’s employee Krystal Maxie-Collins told Salon, “it feels like I’ve done all of this to help everyone else, to help the store, help the managers, help the customers, but it doesn’t feel like anyone is looking out for me.”

In this day and age, with the law and the media stacked against them, the idea that low-wage fast food and retail workers might actually organize a union is so ambitious it borders on the realm of science fiction. Given labor's trajectory this past half century, I'm just having trouble imagining this sort of alternative future. But it's uplifting to try.

This is sad indeed...

The NDP voted Sunday to take references to socialism out of the party's constitution, a controversial move to modernize that the party had to set aside two years ago.

Delegates voted 960 to 188 in favour of the change. The result was met with cheers of "NDP! NDP!"

The move was supported by popular former leader Jack Layton, who died shortly after leading the party to its best-ever federal election result in 2011. Layton felt the party needed to modernize the preamble in order to appeal to more Canadians.

Without socialism, Canadians would not be better off than us. Bloomberg: "Hardheaded Socialism Makes Canada Richer Than U.S."...

On July 1, Canada Day, Canadians awoke to a startling, if pleasant, piece of news: For the first time in recent history, the average Canadian is richer than the average American.
According to data from Environics Analytics WealthScapes published in the Globe and Mail, the net worth of the average Canadian household in 2011 was $363,202, while the average American household’s net worth was $319,970.
A few days later, Canada and the U.S. both released the latest job figures. Canada’s unemployment rate fell, again, to 7.2 percent, and America’s was a stagnant 8.2 percent. Canada continues to thrive while the U.S. struggles to find its way out of an intractable economic crisis and a political sine curve of hope and despair.
The difference grows starker by the month: The Canadian system is working; the American system is not.

The situation for American neoliberalism is so bad, that you can even find long and generally favorable pieces about Karl Marx in mainstream outlets like Time.

A growing dossier of evidence suggests that [Marx] may have been right. It is sadly all too easy to find statistics that show the rich are getting richer while the middle class and poor are not. A September study from the Economic Policy Institute (EPI) in Washington noted that the median annual earnings of a full-time, male worker in the U.S. in 2011, at $48,202, were smaller than in 1973. Between 1983 and 2010, 74% of the gains in wealth in the U.S. went to the richest 5%, while the bottom 60% suffered a decline, the EPI calculated. No wonder some have given the 19th century German philosopher a second look. In China, the Marxist country that turned its back on Marx, Yu Rongjun was inspired by world events to pen a musical based on Marx’s classic Das Kapital. “You can find reality matches what is described in the book,” says the playwright.

On March 21, 2013, the sociologist Andrew Abbott delivered a lecture at the London School of Economics called "Scarcity, Abundance, Excess: Towards a Social Theory of Too Much." The heart of that lecture:

It argues that since excess and overabundance are a central phenomena of modern life, we should refound social theory on the concept of "too much of" rather than "too little of." I trace the origin of the scarcity theories that dominate our reasoning, and sketch the outlines of a social theory based on excess.

Um, yech...

The Washington State Department of Labor and Industries (L&I) has fined Alaska Airlines-contractor Bags, Inc. for failing to protect workers from exposure to blood borne pathogens and body fluids including vomit, urine, feces and blood. In issuing more than $12,000 in fines, L&I cited the Alaska contractor for four serious violations of state health and safety laws, and two general violations. Under state law, “serious violations” are issued when “there is a substantial probability that death or serious physical harm could result” if the problem is not fixed.

You can find the full text of the L&I enforcement action here.

• itsourairport.org

Baggage handler, wheelchair agent, and cabin cleaner can be shitty jobs—sometimes quite literally—yet their wages at Sea-Tac Airport have declined 40 percent in real dollars since Alaska Airlines contracted these jobs out in 2005. Workers have repeatedly complained about both wages and working conditions, yet Alaska and its Sea-Tac contractors have consistently turned a deaf ear. That's why over a thousand Sea-Tac workers, most of them earning less than $10 an hour, recently voted to unionize.

There was a time when the models and mathematics of neoliberal economists (who are not really economists in the first place) could not be contested. When they said such and such a number or curve was telling us the truth, it was accepted as nothing but the truth. But because we are now stuck in the post-neoliberal world (a world we entered in 2008), we can finally challenge the findings of neoclassical economists without fear of losing our jobs. An example: A paper by two economists (Carmen Reinhart, now a professor at Harvard Kennedy School, and Kenneth Rogoff, an economist at Harvard University) who came up with some number (90%) that showed such and such a thing was true (government debt at this point slows growth) has been debunked only two years after it was published. The Economist:

The new paper, by Thomas Herndon, Michael Ash and Robert Pollin of the University of Massachusetts, Amherst, sought to replicate the Reinhart-Rogoff result for the post-war period. They reckon that mistakes in the analysis led Ms Reinhart and Mr Rogoff to understate average growth at high debt levels...Taken together, the authors of the new paper reckon that average post-war growth above the 90% threshold ought to have been reported at 2.2% rather than -0.1%.

The big scandal in economics this week (and yes, there are big scandals in economics) is the news that the most widely cited academic study driving austerity programs worldwide came to an erroneous conclusion due to... wait for it... an error in a Microsoft Excel spreadsheet! (Apparently a simple mistake that "all spreadsheet jockeys fear." Not Microsoft's error, a user error.)

The highly influential paper authored by economists Carmen Reinhart and Ken Rogoff warned that countries with debt-to-GDP ratios above 90 percent experience dramatically lower economic growth than countries with lower debt-to-GDP ratios. It is this alarming (but, now we know, nonexistent) 90-percent cutoff that has largely been cited as grounds for budget-slashing economic austerity in the US and abroad.

But... well... oops:

It turns out that the initial results were driven by simple computational and transcription errors. The most important of these errors was excluding four years of growth data from New Zealand in which it was above the 90 percent debt-to-GDP threshold. When these four years are added in, the average growth rate in New Zealand for its high debt years was 2.6 percent, compared to the -7.6 percent that R&R had entered in their calculation.

Since R&R country weight their data (each country's growth rate has the same weight), and there are only seven countries that cross into the high debt region, correcting this one mistake alone adds 1.5 percentage points to the average growth rate for the high debt countries. This eliminates most of the falloff in growth that R&R find from high debt levels. (HAP find several other important errors in the R&R paper, however the missing New Zealand years are the biggest part of the story.)

This is a big deal because politicians around the world have used this finding from R&R to justify austerity measures that have slowed growth and raised unemployment. In the United States many politicians have pointed to R&R's work as justification for deficit reduction even though the economy is far below full employment by any reasonable measure. In Europe, R&R's work and its derivatives have been used to justify austerity policies that have pushed the unemployment rate over 10 percent for the euro zone as a whole and above 20 percent in Greece and Spain. In other words, this is a mistake that has had enormous consequences.

... If facts mattered in economic policy debates, this should be the cause for a major reassessment of the deficit reduction policies being pursued in the United States and elsewhere.

But of course, facts don't matter.

This post has been updated since it was first published.