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US financial profits

From Felix Salmon

Kathleen Madigan had an important post on Friday, showing financial profits roaring back to more than 30% of all domestic US profits. As she says, “that’s an amazing share given that the sector accounts for less than 10% of the value added in the economy” — and makes it “hard for banks to cry poverty” when it comes to things like debit-card interchange legislation.

Madigan gave us the percentage chart, which shows the finance industry taking an even greater share of total corporate profits than it did during most of the boom year of 2006.

But I wondered: how much of this is a function of generally lower profitability overall — a question more of a low denominator than a high numerator? So I went along to the BEA website and put together this chart:

The blue line is total domestic profits. The green bars are the massive profits made by the Federal Reserve — an incredible $233 billion in 2010 alone. But as you can see, those Fed profits are dwarfed by the red bars, which are private-sector financial profits. Those dipped into negative territory just once, in the fourth quarter of 2008, and in the fourth quarter of 2010 reached $379 billion — bringing the total for the year to more than $1.3 trillion.

What this chart says to me is that nothing has changed, and nothing is going to change. Banks are still extracting enormous rents from the economy, and profits which should be flowing to productive industries are instead being captured by financial intermediaries. We’re back near boom-era levels of profitability now, and no one seems to worry that the flipside of higher returns is higher risk. Any dreams of seeing a smaller financial sector have now officially been dashed. And the big rebound in corporate profits since the crisis turns out to be largely a function of the one sector which we didn’t want to recover to its former size.

Chrome misses some images. Not.

This image shows the web page of the College of Engineering, Computer Scienc, and Technology of Cal State, LA as displayed in four browsers. From left to right: IE, Firefox, Safari, and Chrome. Note that in all but Chrome there are 7 icons (which are also links) at the left of the page. In Chrome two of them are missing.

The images are all JPGs:

Even in this list, the second and ninth don't show up in Chrome, but they do show up in the other browsers.

I just figured out what it is. It isn't Chrome; it's my AdBlock software. The two missing images are in "ads" directories. The others aren't. The only differences in the paths are that the missing images are in the

http://www.calstatela.edu/academic/ecst/ads/images/

directory. The others are in the

http://www.calstatela.edu/academic/ecst/images/

directory. When I turn off the AdBlock filter, the two missing images show up in Chrome.

How to cut the deficit in half by 2021: do nothing

According to Ezra Klein, letting the Bush tax cuts expire as they are scheduled to do will cut the deficit in half by 2021.

Gingrich really is going crazy.

From Politico.com.

SAN ANTONIO — Newt Gingrich stood before thousands of evangelical churchgoers Sunday night to deliver a dire warning that nation's Christian roots are under attack.

"I have two grandchildren — Maggie is 11, Robert is 9," Gingrich said at Cornerstone Church here. "I am convinced that if we do not decisively win the struggle over the nature of America, by the time they're my age they will be in a secular atheist country, potentially one dominated by radical Islamists and with no understanding of what it once meant to be an American."

More frightening than his craziness is the fact that saying these sorts of things will make him more appealing to a significant number of people. He's right that if we don't change the nature of American we will be in trouble. We already are in trouble, and if we don't change it will get much worse.

The employment-to-population ratio and the unemployment rate

Brad DeLong zooms in on the last year and a half and quotes Greg Ip asking where the recovery is.

Defending Obama's 'Dithering'

Timothy Egan in the NYTimes

The real problem for Republicans is that they are perplexed over what position to take on an issue that defies partisanship. So, Obama’s least-thoughtful critics attack him for thinking.

Ponderous deliberation, which doesn’t sit well in an age when we all move information with our thumbs, has been a hallmark of the Obama presidency from the beginning. His 90 percent of circumstances [that Presidents don't control] started on Inauguration Day, when Bush handed him the worst recession since the Great Depression, and continued through an oil spill that nearly poisoned an entire ecosystem.

During the spill, it was liberal cable pundits who wanted a president who could shout, emote and point fingers. Instead, he quickly negotiated a $20 billion escrow fund from BP that attempts to make whole those hurt by the spill. Similar success followed with the auto bailout, which saved General Motors, but cost Obama much of his early political capital.

Fareed Zakaria makes a similar point in Time.

In the Libyan crisis, the Obama Administration made clear from the start that it was not enthusiastic about military action and would support it only if it were requested by the Libyan opposition and the Arab League — and with Europe doing much of the heavy lifting. This led to a remarkable turn of events in which on March 12 the Arab League officially requested that the U.N. impose a no-fly zone over Libya. This shift has not gotten the attention it deserves. In the 66 years since its founding, the Arab League has served as a shield for dictators and rarely produced anything but windy rhetoric about Arab solidarity and Palestine. The idea that it would act against one of its members — and because of human-rights violations! — was unimaginable one month ago. Five days later, the U.N. Security Council passed resolutions authorizing action against Gaddafi's forces. France and Britain were positively itching for military action.

It is highly unlikely that any other countries would have pressed forward in the way they did had they felt Washington was going to plunge in anyway. The Obama Administration made clear that other countries had to be invested in the Libyan operation, which meant they had to offer public support and military or economic assistance, before the U.S. would get involved. So we now have the prospect of a Libyan undertaking that will be operated and financed in significant measure by countries like Britain, France, Qatar and the United Arab Emirates, all of whom are far more affected by instability in the region than the U.S. is. Yes, France and Britain have squabbled over who will lead, but in this new kind of multilateralism, coalition management will be a constant challenge.

Answering that challenge depends in part on how one defines leadership. Harvard's Joseph Nye once observed that press accounts of the first Gulf war invariably described it as a great weakness that America had to ask its allies to pay for the war. But, Nye suggested, isn't it an even greater sign of power that you can get your friends to foot your bills? More important, if we want a world in which the U.S. is not the only country fighting every battle, we will have to allow other countries to have lead roles and real responsibilities. The U.S. cannot always do the cooking and tell its allies to do the dishes.

US Census

Interesting map of population changes over the past decade. The middle strip of the country—North and South Dakota, Nebraska, and Kansas along with eastern Montana and western Minnesota and Iowa—is being hollowed out.

That area east to West Virginia, Kentucky, and Pennsylvania, and (except for New York and New Jersey) north through New England, and west to Nevada, Oregon, and Washington is overwhelmingly white.

California has almost as many Hispanics (38%) as whites (40%) and New Mexico has a Hispanic plurality—46% to 40% white.

Hawaii (Asian: 38%, White: 23%, Multiracial: 19%, Others: 10%, Hispanic: 9%) has the lowest White percentage and seems to be the most diverse.

It's too easy to criticize Gingrich

From Jonathan Bernstein.

Sure, it's fish in a barrel, but I'll award a CotD to CAP's George Zornick, for noting that Newt Gingrich executed a complete partisan reversal on Libya, going from beating on the president for not establishing a no-fly-zone to attacking him for doing so without so much as a phony explanation. And for noting Newt's historical amnesia (Newt is certain, also without any actual argument or explanation, that this is as "badly run as any foreign operation we’ve seen in our lifetime," apparently managing to exceed Vietnam, Iraq, and the Iran hostage rescue, among other things, despite not producing even anything anecdotal that's gone wrong). And for noting that Today Show host Matt Lauer didn't challenge any of that. See Dave Weigel for transcripts.

Of course, the thing to remember about Newt is that he's a total fraud. So calling him out is not that hard to do. Still, kudos to Zornick for doing so, and a nice job, too. Great catch!

Wisconsin recall

Last year, Wisconsin Republican state Senator Randy Hopper left his wife to live with a young Republican political operative. Last month, as Governor Scott Walker unveiled legislation calling for deep cuts in state workers' salaries and collective bargaining rights, Hopper's mistress was hired by the state on the advice of Scott Walker's cabinet as a "communications liaison." Further, her salary is 35% higher than her predecessor's.

Randy Hopper is now facing recall. At Daily Kos, by using something called Google Surge, we can make sure that when anyone in Hopper's district goes online for almost an entire week they will see an ad about the scandal.

It will cost us $12,128 for us to do this. Can you contribute $12 to Daily Kos help make it happen?

Commodity prices track industrial production

From Mark Thoma.

Work-around for the New York Times 20 article limit

The Euri.ca blog claims that this book-marklet will provide a work-around to the New York Times paywall.

<a href=
"javascript:(
function() {
       var s=document.createElement('script');
       s.setAttribute('src','http://toys.euri.ca/nyt.js');
       document.getElementsByTagName('head')[0].appendChild(s);
}
)();"
>
NYTClean
</a>

Presumably this works because the NYT allows access to anyone when they come to an article by following an external link.

I gather this code sets 'http://toys.euri.ca/nyt.js' as the external link for the user's current browser page, i.e., the one the user is looking at when clicking the book-marklet. Nieman Journalism Lab—which the original article linked to—explains how this gets around the paywall.

Apparently when you access the NYT after reaching your limit, the page you want is sent but with an overlay blocking your view of it. Here's the image from Nieman Journalism Lab that illustrates what it says is going on.




The overlay must have code that checks the head of the page to see if the page had been sourced, and if so, it apparently lets you through. So clicking the book-marklet after getting the blocked page sets the page as sourced. Apparently the page is then re-displayed, causing the code that blocks access to allow access.

I'm surprised that the NYT uses such an easily fooled scheme.

H/T to Felix Salmon for the link to the Euri.ca blog.

Money for Libya but not for us

No politician—especially those worried about the deficit—has said anything about the cost of the attack on Libya. According to the Navy and Wikipedia each Cruise missile costs about $600,000. According to Aviation Week, the US and the UK together have so far fired 120 missiles. That's a total of $72 million in missiles alone.

NASA's Astronomy Picture of the Day (APoD)

Cal State faculty vs the administration

The California State University (CSU) faculty, represented by the California Faculty Association (CFA), are now negotiating a new contract with the CSU administration. The following was written by Henry Reichman Professor Emeritus of History, East Bay, a member of the CFA Bargaining Team.

CSU administrators have claimed that with benefits and payroll making up 85 percent of the CSU’s expenditures, “we have to reduce the amount we’re spending on salaries and benefits.”

According to the CSU’s own audited financial statements posted on the Web, however, only about “35% of the University’s total operating expenses in fiscal year 2010 directly support the primary function of the University, which is instruction.

These direct expenses include only faculty and instructional support staff salaries, benefits, and their direct expenses.” Indeed, Instruction as a whole accounts for just 38 percent of the CSU’s total spending!

Clearly there must be other areas, including bloated administrative salaries, to which the CSU could look for savings before contemplating reductions in faculty and instructional support staff.

This is why it is heartening that the Governor’s budget proposal contains the following language: “The [governor’s] Administration will work with the Office of the Chancellor and the Trustees, as well as stakeholders (including representatives of students and employees), to determine the specific mix of measures that can best accomplish these objectives.”

This means that the CSU administration will not be able to cut the budget as they please, using the excuse of fiscal constraint to implement rash program cuts, ill-conceived “efficiency” schemes, and vague “restructuring proposals” that have little to do with working within the budget and everything to do with an administrative power grab.

Chancellor Reed [head of the CSU] has promised to “work with the administration and the legislature” and “to look at every option and develop a comprehensive plan” to address the budget. In doing so, let me suggest, the Chancellor might consider explaining:

• Why he has spent $400,000 on an outside lobbyist when the University has its own Government Relations Office in Sacramento with a full-time staff.


• Why he has has spent about $1 million a year since 2006 on a no-bid contract for an outside consultant to “improve labor relations” (which the consultant has demonstrably not accomplished) when the Chancellor’s Office and all 23 CSU campuses already have a small army of full-time labor relations staff, including a Vice Chancellor paid more than $300,000/year.


• Why he and other executive approved some $7 million in promotions and “equity” to managerial personnel in 2010, during a crisis, when in the same year he told an independent fact-finder the system could not afford to pay that exact sum to implement the final stage of an equity pay program for faculty that was part of the 2007 CFA/CSU contract.


• Why highly-paid CSU Presidents receive expensive “car allowances” of more than $12,000 annually when nearly all other Californians maintain, purchase, or lease automobiles at their own expense.


• And, most importantly, why between 2000 and 2008, as the number of students in the CSU grew by 27 percent, the number of administrators increased by 23 percent while the number of instructional faculty rose by just 11 percent. And why in just one year, between2007 and 2008, as the economic crisis set in, the CSU increased the number of full-time equivalent administrators by 3 percent, but slashed the number of fulltime equivalent faculty by 1 percent, as student enrollment grew by 2 percent.

Perhaps answers to questions like these might better help address the challenge posed to the CSU budget than public threats to reduce student enrollment and cut employee salaries and benefits.

Asians in the library at UCLA

Support public broadcasting

Brad DeLong's market-based argument for more government debt

See this post.

If people thought that government debt was risky, its price would be falling … The fact that people are willing to pay more for government debt indicates that it is increasingly valuable--and so we should make more of it.

How far we've come

By Bob Lawless, University of Illinois, College of Law.

Today, I am visiting my parents' home and went for a walk that included a stroll down the commercial strip on the busy street near their house. Along this commercial strip in a solid middle-class neighborhood in Peoria, Illinois, is a small red brick building that thirty years ago I remember housing an insurance agency. What is there today? A payday lender.

My stroll turned into my own personal metaphor for the change in the middle class over the past generation. In place of an institution that cushioned against risk, the neighborhood now has an institution that creates it.The local bowling alley is shuttered as well -- everyone now just can "bowl alone."

The payday lender that inspired this post does not even really stand out. In that one-quarter mile stretch of that commercial strip, there are are now five payday or auto title lenders.

Before and after satellite photos of Japan by the NYT

Besides the devastation they show, these photos are a neat HTML 5 application. The are back-to-back photos of areas of Japan damaged by the tsunami. The two pictures have a draggable divider down the middle. Pull it left, you see the image as it was April 4, 2010. Pull it right, you see the image as it was March 12, 2011.

"until it doesn't"

Been around for a while, but I'm seeing it more and more. It's probably peaking about now.

Recall the Wisconsin Republicans

at https://secure.actblue.com/contribute/entity/16403

So many creative people

Immaterials: Light painting WiFi from Timo on Vimeo.

If Mauritius can do it …

Joe Stiglitz writes:

Suppose someone were to describe a small country that provided free education through university for all of its citizens, transportation for school children, and free health care – including heart surgery – for all. You might suspect that such a country is either phenomenally rich or on the fast track to fiscal crisis.

After all, rich countries in Europe have increasingly found that they cannot pay for university education, and are asking young people and their families to bear the costs. For its part, the United States has never attempted to give free college for all, and it took a bitter battle just to ensure that America’s poor get access to health care – a guarantee that the Republican Party is now working hard to repeal, claiming that the country cannot afford it.

But Mauritius, a small island nation off the east coast of Africa, is neither particularly rich nor on its way to budgetary ruin. Nonetheless, it has spent the last decades successfully building a diverse economy, a democratic political system, and a strong social safety net. Many countries, not least the US, could learn from its experience.

In a recent visit to this tropical archipelago of 1.3 million people, I had a chance to see some of the leaps Mauritius has taken – accomplishments that can seem bewildering in light of the debate in the US and elsewhere. Consider home ownership: while American conservatives say that the government’s attempt to extend home ownership to 70% of the US population was responsible for the financial meltdown, 87% of Mauritians own their own homes – without fueling a housing bubble.

See the rest here.

Wealth distribution in the US

From Outside the Beltway. [Sometimes it's necessary to click Outside the Beltway (where the image comes from) and then return see this image. I have no idea why that happens.]
Unbelievable. It looks like the top 20% own more than 90% of the country's wealth, with the top 1% owning more than 40% all by themselves! And that was in 2007. It must be significantly more skewed by now.



Then there is this, which has been making the rounds. According to these figures, the top 20% own more than 80% Of the wealth. It doesn't show what the top 1% own. It shows (a) the actual distribution of wealth (b) what we, on average think it is, and (c) what we, on average, think would be ideal. How naive we are!

Don't let Republicans defund the EPA

Sign the CREDO action petition here.

Magnatune

I ran across this website while listening to "Architecture is Policy: The Legal and Social Impact of Technical Design Decisions"  


Daydream by Robin Stine
I especially like the first cut, a slow blues.

The business model is similar to NetFlix. A $15/month membership gives you access to everything on the site. There are no license restrictions, but members are asked not to share downloads too often.

The site was developed by John Buckman, the same person who developed BookMooch, a website for book exchanges.

From Mark Kleiman.

David Koch is sitting at a table with a schoolteacher and a Tea Party activist. On the table is a plate with a dozen cookies. The billionaire promptly scoops up 11 of the cookies. He then turns to the tea partier and says, “Watch out for that schoolteacher. He’s in a union, and he wants a piece of your cookie.”