Monday, May 30, 2011

Breaking the vicious cycle of "There's nothing more we can do."

Against Learned Helplessness

Unemployment is a terrible scourge across much of the Western world. Almost 14 million Americans are jobless, and millions more are stuck with part-time work or jobs that fail to use their skills. This is a continuing tragedy, and in a rational world bringing an end to this tragedy would be our top economic priority.
Instead of a determination to do something about the ongoing suffering and economic waste, one sees a proliferation of excuses for inaction, garbed in the language of wisdom and responsibility.
So someone needs to say the obvious: inventing reasons not to put the unemployed back to work is neither wise nor responsible. It is, instead, a grotesque abdication of responsibility.
The fact that nobody in power is talking about jobs does not mean, however, that nothing could be done.
Bear in mind that the unemployed aren’t jobless because they don’t want to work, or because they lack the necessary skills. There’s nothing wrong with our workers — remember, just four years ago the unemployment rate was below 5 percent.
The core of our economic problem is, instead, the debt — mainly mortgage debt — that households ran up during the bubble years of the last decade. Now that the bubble has burst, that debt is acting as a persistent drag on the economy, preventing any real recovery in employment. And once you realize that the overhang of private debt is the problem, you realize that there are a number of things that could be done about it.
For example, we could have W.P.A.-type programs putting the unemployed to work doing useful things like repairing roads — which would also, by raising incomes, make it easier for households to pay down debt. We could have a serious program of mortgage modification, reducing the debts of troubled homeowners. We could try to get inflation back up to the 4 percent rate that prevailed during Ronald Reagan’s second term, which would help to reduce the real burden of debt.
So there are policies we could be pursuing to bring unemployment down. These policies would be unorthodox — but so are the economic problems we face. And those who warn about the risks of action must explain why these risks should worry us more than the certainty of continued mass suffering if we do nothing.
As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do. And those of us who know better should be doing all we can to break that vicious circle.

"I will never let my schooling interfere with my education." --Mark Twain

Awards challenge higher education
Fellows get $100G to stay out of school
By Donna Goodison
May 29, 2011

A billionaire venture capitalist, on a crusade about the value of the expensive college educations that draw thousands of students to the Hub each year, is raising concerns with a new fellowship program that requires students to ditch school for two years.
PayPal co-founder, Facebook investor and hedge fund manager Peter Thiel has offered $100,000 cash to 24 of the best and brightest entrepreneurial young people in the United States with a big stipulation — they must stay out of college for two years to further their scientific and technical ideas. In return, they’ll be able to tap Thiel’s California network of tech entrepreneurs and philanthropists for mentoring, job opportunities, support and training.
When Thiel first announced the 20 Under 20 Thiel fellowship program in September, he noted some of the world’s “most transformative technologies” — from Facebook to SpaceX to Halcyon Molecular — were created by people who’ve “stopped out of school because they had ideas that couldn’t wait until graduation.”
His offer garnered more than 400 applicants. Local students Sujay Tyle and Nick Cammarata were among the 24 inaugural fellowship winners and are planning their moves to California.
One of Harvard’s youngest students at 17, Tyle just finished his second year and has been doing business development for Cambridge start-up InsightSquared.
Tyle started working in a University of Rochester biochemistry lab at age 11 and, over the next six years, developed a cheaper way to make bio-ethanol.
Boston venture capitalist Michael Greeley, general partner at Flybridge Capital Partners, values the education he received while earning an undergraduate degree from Williams College and an MBA from Harvard Business School.
“I don’t really appreciate why he’s making it either/or — you can’t go to college if you want to get this $100,000 grant,” Greeley said. “But the truth is, you don’t need to go to a great university to be a great entrepreneur. The best experience is being street-smart and out there doing it.”

Wednesday, May 25, 2011

A political earthquake in upstate NY: Voters want pols to end tax cuts for rich before messing with Medicare.

Democrat Wins G.O.P. Seat
May 24, 2011

Democrats scored an upset in one of New York’s most conservative Congressional districts on Tuesday, dealing a blow to the national Republican Party in a race that largely turned on that party’s plan to overhaul Medicare.

Two months ago, the Democrat, Kathy Hochul, was considered an all-but-certain loser in the race against the Republican, Jane Corwin. But Ms. Hochul seized on the Republican’s embrace of the proposal from Representative Paul D. Ryan of Wisconsin, to overhaul Medicare, and she never let up.
Voters, who turned out in strikingly large numbers for a special election, said they trusted Ms. Hochul, the county clerk of Erie County, to protect Medicare.
Pat Gillick, a Republican from East Amherst, who also cast a ballot for Ms. Hochul, said, “The privatization of Medicare scares me.”
The district, which stretches from Buffalo to Rochester, has been in Republican hands for four decades.
On Tuesday, Republicans were examining the results and debating how the party lost the seat, despite outspending the Democrats.
 “It’s a Republican district with a solid Republican candidate,” said Representative Peter T. King, a Republican from Long Island. “What went wrong? We definitely have to determine the extent to which the Medicare issue hurt us.”

Friday, May 13, 2011

The truth about tax cuts for the rich:

Since the federal income tax was established in 1913, the US economy grew faster and created more jobs when top tax rates were the highest.

"In those years where the top tax rate was 70% or above (48 out of the last 97 years), GDP growth averaged 9.0% and job growth averaged 2.6%. In those years where the top tax rate was 40% or below (37 out of the last 97 years), GDP growth was 4.4% and there was no job growth.  Surprisingly, when the top tax rates were the lowest, job growth averaged zero!"   ---Bryan Ganz
Bryan Ganz is the CEO and Managing Partner of Scudder Bay Capital. Mr. Ganz has served on the Board of Governors of Citizens Against Government Waste, a watchdog organization dedicated to promoting fiscal responsibility within Congress. Mr. Ganz graduated with honors from Georgetown University’s Business School with a BSBA in accounting in 1980. He received his JD from Columbia Law School in 1983, where he was a Harlan Fiske Stone Scholar. 

If I get it, it can't be that complicated:


According to the Center on Budget and Policy Priorities and the Congressional Budget Office, just about half of the tidal wave of debt we are facing over the next decade can be directly attributed to the “temporary” reduction of the top tax rate in 2001 (from 39% to 35%) plus the cost of two middle east wars.

Put another way, if we did nothing more than simply let the so-called Bush tax cuts expire and--now that Bin Laden is dead--brought our troops home from Irag & Afghanistan, we could cut the deficit in half over the next ten years.

There is no easier path to big-time deficit reduction, and we can’t even do that. How in the world do we expect to tackle the tougher long term challenges of Medicare and Social Security?

For the simplest 2 minute explanation (even though its a year old) of why leaving tax cuts for the rich on the books only makes the deficit bigger and the problem even worse, watch this:

Monday, May 2, 2011

The happy young college student in the top hat (my son Joey) was 9 years old when he watched the twin towers fall.


May the rejoicing go on

May 3, 2011

THOUSANDS OF young people took to the streets to cheer the death of Osama bin Laden on Sunday night and yesterday. They were expressing pride in their country, but also the lifting of a burden that weighed more heavily on their generation than on Americans of other ages.

Celebrating the end of a man’s life with chants more suitable for a sporting event can feel unseemly — more like the angry passions aroused in bin Laden’s followers than his victims. But it was no accident that the revelry was especially great in New York, Washington, and Boston — the cities most directly affected by the 9/11 attacks. And the outpouring can only be understood in the context of what bin Laden represented to today’s young adults.

On the morning of Sept. 11, 2001, they were getting ready for school, or already sitting in classrooms, when the unthinkable occurred. Their country was attacked with a cunning and cold-blooded viciousness that was difficult even for adults to comprehend. But for children the questions had a special poignancy: Would their neighborhoods be attacked? Would their parents be killed? Would they live their lives in a country shadowed by fear?

For everyone, remembering where they were when the World Trade Center towers tumbled is a searing memory. The world seemed to stop. Horrific images played on television screens, again and again.

What followed was equally traumatic. A terrifying series of anthrax attacks. Tightening of security at airports, where the most insidious threats were made visible in ever-changing precautions: Shoes removed, liquids confiscated, pat-downs reaching into uncomfortable places.

There was also 10 years of war, during which the children of 9/11 grew into the soldiers on the ground in Afghanistan or Iraq. Close to 6,000 US service members died, and tens of thousands were injured. The cost was visible to almost every high-school class that graduated after 2001.

Bin Laden’s death was, for many, the first event to diminish the sense of horror that arrived in their childhood and followed them ever since. Will it ever go away completely? If revelry is a sign of purging, an almost physical shedding of weight, then let them revel.