Anti-americanism redux

Following the recent discussion here of critics of US foreign policy being labelled as anti-American, I saw a snippet in the Fin (subscription required) in which the Wall Street Journal (also subscription required) applied the same epithet to anyone critical of US labour market institutions and their outcomes, even extending this to former PM Bob Hawke, about as prominent a supporter of the US alliance as you could find, though, like many others, a critic of the Iraq war. The relevant quote

Even Labor leaders who have previously been strong supporters of the alliance have not hesitated to stir anti-US prejudices this time. Former Prime Minister Bob Hawke warned that making it easier for workers to negotiate wages directly either their employers would be “a move down the path to” horror of horrors “an Americanisation of labour relations

Unfortunately, my efforts to find the full piece have been unsuccessful – I assume it’s behind the paywall somewhere. I’d appreciate it it anyone could supply the full text.

I’d be interested to know, for example, whether the WSJ has extended its net to catch that notorious anti-American, John Howard, who has warned against taking the “American path” in relation to gun laws and tort litigation.

In the meantime, let me offer the hypothesis that lots of American workers share the “anti-American prejudice” that they would rather have a union on their side than enjoy the benefits of direct “negotiation” with employers. For example, this Gallup Poll reports that 38 per cent of Americans would like to see unions have more influence, as against 30 per cent who would prefer less. And I’ll guess that the WSJ itself would be happy enough to endorse Howard’s anti-Americanism, at least as far as tort law is concerned.

Update Thanks to several readers, the full column is over the fold

Australia’s Labor Reforms
November 22, 2005

From the death of that most cherished of Australian traditions — the weekend barbeque — to couples divorcing and a rise in the homicide rate, no scare story is too far-fetched for die-hard opponents of labor reform down under.

Trade unions brought hundreds of thousands onto the streets of major Australian cities last week in the biggest protests the country has seen in seven years. And their Labor Party backers were quick to warn of all manner of dire consequences if Prime Minister John Howard succeeds in reforming Australia’s outdated labor laws.

Never far below the surface, the anti-Americanism of Sydney’s left — still furious at Mr. Howard’s resolute support over Iraq — is back with a vengeance in this latest battle. Even Labor leaders who had previously been strong supporters of the alliance have not hesitated to stir anti-U.S. prejudices this time. Former Prime Minister Bob Hawke warned that making it easier for workers to negotiate wages directly with their employers would be a “move down the path to” — horror of horror — “an Americanization of labor relations.”

Such rhetoric belies the modest nature of the Howard government’s proposals. Even if its Work Choices Bill is enacted, all Australian workers will continue to enjoy generous labor protection — including an A$12.75 (US$9.30) minimum hourly wage, four weeks annual holiday, and a year’s unpaid leave for new parents.

What will change is a belated recognition that labor union protections, aside from infringing on human liberties, are obsolete in today’s Australia. Two decades of economic reform (much of it initiated under Mr. Hawke’s leadership) has produced a entrepreneurial economy where one in ten are self-employed and union membership has fallen to less than a quarter of the workforce.

You wouldn’t know that from Australia’s labor laws, which still ban employers from negotiating directly with their employees, unless they match the wages and conditions set by state-run arbitration bodies for workers in that industry across Australia as a whole. Remove that restriction, as the Howard government is finally proposing to do, and you remove one of the main reasons stopping union membership from plummeting even faster. Other reforms would further reduce union power by insisting that strike votes or other industrial action require secret ballots, and simplifying the maze of more than 100 laws currently governing industrial relations.

Hence the scare stories, and the ferocity of the counter-offensive by the union movement and its Labor allies. They represent an Australia of old battling for its political survival. Having already been dealt a blow by Mr. Howard’s reelection with an increased majority last year, and a swing in his favor among the blue-collar workers who were once Labor’s staunchest supporters, they know how much is at stake.

For all last week’s street protests, the chances are they will fail again. The Howard government’s parliamentary majority all but ensures the bill will be enacted. And modern Australia has shown through its voting habits, and changing employment patterns, an understanding of how true job security comes not through restrictive labor laws, but from a flexible labor market that helps fuel continued economic growth.

Devastating though it may prove to union membership, the bill is only a first step in this direction. As Mr. Howard said recently, “In a year’s time, people will look back and say why on earth did people try and exaggerate and scare us.”

228 thoughts on “Anti-americanism redux

  1. Those Gallup poll results are interesting. The 38% John quotes is up by 8 percentage points in 2005, having been fairly stable between 27% and 30% from 1999-2004. Also, the people who changed their minds were ones who previously thought that the degree of union influence is about right. My interpretation is that few people in the stable ‘too-much influence’ camp are employees, so their attitudes won’t be influenced by threats to job security.

    Only 19 percent of the sample actually had family members in unions, so it would be hard to argue that the pro-union camp were victims of brainwashing by their own unions. Evidently many people who aren’t members can still perceive the benefits.

  2. The belief that unions are holding the country to ransom or are centres of featherbedding is an ideological fashion that seems to have hung over from the seventies. But some people cling to it, like flares or beer home brewing kits.

    It is completely obsolete, as evinced by the largely worker-led improvements in labour productivity and the huge decline in industrial action. This is observed right accross the OECD board.

    Over the past 20 years it has been the bosses, not the workers, that have been the industrial militants. They have gotten away with murder both on pay and privileges. There is also the little matter of financial shenanigans.

    The industrial relations legislation will be to the New Right what liberal sentencing laws were for the New Left: classic over-reach.

    It took a couple of decades (1970s-90s) of the New Left going berserk in common rooms before there was a Decline of the Cultural Wets in politics.

    Likewise the past couple of decades (1980s-2000s), which saw the New Right gone berserk in boardrooms, will lead to a Decline of the Economic Dries in politics.

  3. Liberal sentencing laws? Come on, Jack, admit it: you wrote multiculturalism, didn’t you, but then, overcome by a sense of weariness, you deleted the word, scratched around, and came up with liberal sentencing.

  4. No, I was trying to think of an example of “cultural wet” overreach that pushed the public’s “hot button” in a way comparable to “economic dry” over reach on IR does.

    The first conservative reaction to become mainstream was the “backlash” against revolving prison door sentencing in the late seventies-early eighties. Cultural conservatives will never lose votes running on tough on crime/law and order platforms. It still has plenty of mileage, even in an age of declining crime.

    Public opposition to multiculturalism will never be as hot as opposition to liberal sentencing. This is because of the deceitful way the multi-cult was foisted on an unsuspecting public. The Wets have fraudulently identified multiculturalism (bad) with multiracialism (good).

    Most decent people are anti-racists and support multi-racialism. But these same people have trouble rising to the notion that importing Sharia law would be a form of diversity heralding cultural progress.

  5. Neo liberalism is always depserate to employ a kultur kampf against its foes. Now its ‘anti-americanism’ as they try and depict opposition to their plans for the planet as mere vulgar ethnic/racial discrimination. They employ the same tropes aganist their critics at home, as they try to depict anybody who critcises the massive transfer of wealth upwards and foreign policy adventurism as being ‘anti american’ . However they are running out of cultural ‘gas’. Their amazing success with populist revolts against eglaitarian social and economic policies has at last run up against a reality check, as people start to stop and count the costs to them personally.

    There is nothing like a little bit of social unrest to concentrate the minds of the powerful and insouciant, and we will increasingly see these pathetic slanders against their own populace being deployed, as the great ‘scheme’ starts to meet resistance, even in the home of the great scam itself.

  6. What is the big deal with anyone admitting to anti-Americanism? Is it somehow illegal in Australia to be anti-American? Or anti-anything? How is being pro-union the same thing as being anti-American? Anyone who knows anything at all about the US knows that unions have been part of our economic make-up for decades.

  7. Well I guess the point is that if you think Australia’s labour laws are better than America’s then you are obviously not thinking rationally and anti-Americanism is likely the culprit.

  8. Avaroo,

    What is the big deal with accusing people of anti-americanism at every opportunity?

    Australia has been America’s ally in ever war since World War I, we may be the only country to have sent troops to every major conflict in which the US has been involved in that period.

    The majority of Australians, across the political spectrum, support the American alliance – which is why we get sick of these cosntant accusations.

  9. Of course, most of those wars didn’t connect the USA and Australia directly but through common interests. As Terry Pratchett has one of his characters say in a novel,”we’re not on the same side, we’re on two different sides which happen to be side by side”.

  10. I don’t know Ian, what is the big deal with accusing people of anti-Americanism and why do you do it? What do you CARE if anyone is anti-American? Is it illegal to be anti-American in Australia?

  11. Avaroo

    Stories about US IR laws gives Australian workers chills and Australian business leaders thrills..

    The right-wing of Australian politics is determined to bring in every bad idea that the US has ever had (privatised medical system, school vouchers, ludicrously low minimum wages) while refusing to take any of the good ones (bill of rights, legislated freedom of speech). The politicians here will recycle the same rhetoric and the same wedge politics as used in the US (eg abortion rights and privatised medicine for which there is and never has been a mass public constituency in Australia)

    That’s why.

  12. Andrew, although I appreciate your post, I still have no idea why anyone in Australia would care what the US does when discussing Australia’s labor situation. Shouldn’t Australian politicians and businesspeople be discussing Australia, rather than the US? It wouldn’t occur to Americans to consider what Australians do about labor laws.

    Since you brought them up, the US has both public and private healthcare, school vouchers are rare and only in places where they have been voted in by the public (which I assume you think is an acceptable way of deciding these things) and minimum wage jobs in the US unlike other places, are not designed for lifetime employment, nor are they usually held for life. The minimum wage issue perfectly illustrates my point that Australian pols and public shouldn’t look at the US when deciding what to do in Australia.

  13. The belief that unions are holding the country to ransom or are centres of featherbedding is an ideological fashion that seems to have hung over from the seventies. But some people cling to it, like flares or beer home brewing kits.

    It is completely obsolete, as evinced by the largely worker-led improvements in labour productivity and the huge decline in industrial action. This is observed right accross the OECD board.

    Bravo Jack, I’m glad someone pointed that out.

    As for criticism of American labour laws et cetera being “anti-American”, well, I suppose all the lefty American bloggers are anti-American, then? Actually, a lot of traditional conservatives come into that mould, too.

    Avaroo, US minimum wage jobs weren’t “designed” for anything. And a sizeable proportion of the US workforce will not be able to lift themselves out of them in their lifetime, because the lowest wages don’t cover basic accommodation, food and health care, let alone education and interview clothes to climb the ladder of opportunity.

  14. US minimum wage jobs weren’t “designedâ€? for anything. Well, correction, it’s designed to ensure the highest profits.

  15. >I don’t know Ian, what is the big deal with accusing people of anti-Americanism and why do you do it?

    I don’t.

    > What do you CARE if anyone is anti-American? Is it illegal to be anti-American in Australia?

    Like most australians, I’m pro-American. I don’t like being misrepresented.

  16. Helen, of course minimum wage jobs are designed for specific purposes. Most people who hold them are not in them forever, they are entry level jobs. Let’s see your evidence that a “sizeable portion of the US workforce will not be able to life themselves out of them in their lifetimes”.

  17. Ian, who is it you think it would matter to if you were anti-American?

    Being anti-American isn’t illegal, anywhere that I know of, including in the US. Do you care if anyone is anti-Australian? Stop worrying about what other people think about you and do what’s best for you.

  18. Helen,

    If you look at really profitable US businesses they don’t on the face of it appear to be employing a high proportion of people on minimum wage. I’m thinking of companies like Microsoft etc.

    Do you have some data that correlates high levels of profitability with low levels of wages?

    Regards,
    Terje.

  19. >Stop worrying about what other people think about you and do what’s best for you.

    So, hypothetically, if I claimed that your support for the Iraq war was motivated by your virulent anti-arab racism that wouldn’t bother you?

  20. Of course it wouldn’t bother me. Anymore than if you claimed I was a three eyed, stuttering, Mongolian princess.

    Why would you give anyone the power to bother you by making any and all claims they want to make? People can say anything they want to about anyone (at least in Australia and the US). But what does what they say have to do with you?

  21. ” If you look at really profitable US businesses they don’t on the face of it appear to be employing a high proportion of people on minimum wage. I’m thinking of companies like Microsoft etc.

    Do you have some data that correlates high levels of profitability with low levels of wages?”

    Terje, you are introducing a red herring with your statement and your question, quoted above.

    I understood Helen’s point to mean that if the minimum wage would be raised then in the first instance (ie the immediate effect) would be that profitability, as measured by the accountants, would be lower than that reported, keeping everything else constant.

    One ‘thing’ which is being kept constant would be the income of the CEOs and other managers. Of course, profitability, as recorded by the accountants could remain unchanged (depending on the relationship of parameter values) if the CEOs and other managers ‘wages’ (claims?) would be reduced as the minimum wage is increased.

    As for general relationships, may I refer you to the extensive literature on multinational corporations – one of the factors (not the only one) which motivates MNCS to locate production facilities in countries other than the country in which they originally were incorporated, is that there are significant wage differentials. This is so well known that I believe the onus is on you to get the data, if you want to have it.

    Avaro, your statement that minimum wages in the US are designed as entry level wages and most people lift themselves out of this state (of ?). is interesting. Do you have evidence that this actually happens and if so, at what speed? Thanks in advance.

  22. Ernestine,

    I am aware that minimum wage laws might displace jobs to other countries. That’s a hardly a significant point.

    Regards,
    Terje.

  23. Terje,

    True. However, from the perspective of an individual, it probably doesn’t matter whether survival is not ensured because the minimum wage incomes

  24. Ernestine, nowhere did I say anything about “most people lift themselves out of this state”. I did quote someone else who used this language.

    Most Americans have at one time or another had a minimum wage job, usually as a student. But few Americans hold any job for a lifetime, at any wage level. We tend to move around quite a bit.

  25. Please replace comment addressed to Terje with:

    Terje,

    True. However, from the perspective of an individual, it probably doesn’t matter whether survival is not ensured because the minimum wage income

  26. Avaroo,

    Thanks for the reply.

    The information I have is:
    Helen, of course minimum wage jobs are designed for specific purposes. Most people who hold them are not in them forever, they are entry level jobs. Let’s see your evidence that a “sizeable portion of the US workforce will not be able to life themselves out of them in their lifetimes�.

    I’ll pass it back to you and Helen and wait to see what happens.

    Regards
    Ernestine

  27. Terje,

    I have no idea why the erroneous message got posted twice. This is my last attempt.

    True. But from the perspective of an individual it probably doesn’t matter whether survival is not ensured because the minimum wage is less than the survival amount or whether jobs arn’t available.

    I am using the survival costraint to simplify the argument. The notion of ‘a decent wage’ is preferred but it is difficult to argue the point in a few lines.

    Regards
    E.G.

  28. Ernestine, your information is correct. As I said, I was quoting another poster. That’s why the prase was in quotation marks.

  29. Ernestine,

    I agree. A choice between starving due to insufficient wages and starving due to no wages is pretty stark.

    Regards,
    Terje.

  30. Ernestine, from the perspective of an individual, let’s say a muslim individual living in the French banlieu, would you say a minimum wage job was preferable or no job? I don’t recall anyone rioting in France recently because jobs didn’t pay enough.

  31. Avaroo,

    1. My information now is that both, you and Helen, either do not have data to substantiate the hypotheses or both, you or Helen, do not wish to reveal the data.

    2. In the absence of definitions of terms such as ‘minimum wage job’ and ‘no job’, my answer is: There are plenty of minimum wage jobs in France.

    3. Do you recall any period in France’s history where riots took place because of income distribution issues?

    Regards

    Ernestine

  32. Ernestine,

    1) I haven’t a clue where you’re getting your information/

    2) If there are plenty of minimum wage jobs in France why were people rioting and claiming there weren’t any? Were they lying?

    3) uh, does the French revolution ring any bells?

  33. In Paris, the Reveillon riots of 1789 broke out when a rumour spread that Revillon, a manufacturer of wallpaper, was intending to cut his workers’ wages.

    In fact, Reveillon paid his workers over the going rate and intended to do nothingof the sort. But he was a well-known physiocrat (neo-liberal) smarty-pants who shot his mouth off about the desirability of deregulating the price of bread.

    “[S]ince bread was the foundation of our national economy” its distribution sould be deregulated, allowing lower prices, resulting in lower wage costs, lower manufacturing, and all the benefits that the Rodent is promising, as we speak, for Australia.

    “Death to the rich! Death to the aristocrats!” The mob sought to hang and burn Reveillon in the town square.

    Eventually, the regular army and the militia turned out and shot hundreds of the rioters.

  34. Barbara Ehrenreich’s Nickled and Dimed describes the world of the US underclass- cleaners, waiters/waitresses, WalMart employees and the like – who are mostly in no way middle class students on their way to a better paying job. On the contrary, as I mentioned above, their wages can’t even buy what we would define as basic living conditions, and would definitely not pay for the fees, books, travel, etc. to go to school and improve their lot.

    There is a lot written about the conditions of WalMart workers which American bloggers point to. WalMart has even used government social security payments as a stop-gap to pay lower wages and boost profits.

    And this is even before you get onto the topic of outsourcing overseas.

  35. Ernestine, please don’t say that because someone hasn’t re-posted then they are unwilling or unable to back up what they are saying. Not everyone has 24/7 access to this blog or indeed the internet.

  36. Avaroo,

    1. A form of Bayesian updating of the information I receive for storage in my head (I don’t know a better method of dealing with huge quantities of words)

    2. My answer to your original question is conditional on the information you had provided me in the original question. I have not received new information regarding the original question hence my answer to the original question remains unchanged.

    2′. You are giving me a new question. I can’t answer this one at all because it contains information which you seem to have but I don’t.

    3. Yes, it rings a bell with me too. So, we can take the muslim factor out of the original question. Can we?

    Regards

    Ernestine

  37. Helen, if waiters and waitresses in the US cannot provide basic living conditions for themselves, why don’t we see more of them living on the streets? Or starving on the streets?

    To my knowledge, no one is forced to work at WalMart and again, where are the homeless WalMart employees? Plenty of Americans finish high school and go to college. Some of them without paying a thing for it.

  38. Ernestine,

    1) Well, it’s not working very well for you.

    2) I’ll take that as surrender as you no doubt know very well why the French youths were rioting…..no jobs. They were pretty clear about it.

    3) If it rings a bell, why are you asking the question? The recent French unrest is not the first time income inequality brought France to violence.

  39. >If you look at really profitable US businesses they don’t on the face of it appear to be employing a high proportion of people on minimum wage. I’m thinking of companies like Microsoft etc.

    Walmart is a famous example of a very successful company which pays the low wages and provides the minimum benefits it legally can.

    Whether it is representative of any larger trend is another matter.

  40. Not too long ago, one of the unions was paying people to picket WalMart over the salaries it pays. The picketers were paid LESS than WalMart employees.

  41. “I’ll take that as surrender as you no doubt know very well why the French youths were rioting…..no jobs. They were pretty clear about it.”

    They told you that did they?

  42. Helen, Avaroo,

    My first response was: “I’ll pass it back to you and Helen and wait to see what happens.”

    My question now is: Do you have data on the time profiles of people on minumum wages in the US?

    Regards

    Ernestine

  43. Ironic that Walmart is lobbying Congress for an increase in the minimum wage.

    http://money.cnn.com/2005/10/25/news/fortune500/walmart_wage/

    EXTRACTS:-

    Wal-Mart maintains that it pays above the current $5.15 an hour minimum wage to its employees.

    NEW YORK (CNN/Money) – Wal-Mart CEO Lee Scott said he’s urging Congress to consider raising the minimum wage so that Wal-Mart customers don’t have to struggle paycheck to paycheck.

  44. Avaroo,

    1) Your opinion, which you are entitled to.

    2) Are you sure people in France were rioting recently because they could not get a job at zero price (wage) or was it because they could not get a job at a ‘decent wage’?

    3) Do you agree that the muslim factor can be taken out of your original question?

    Regards
    E.G.

  45. Ernestine,

    1) what are you babbling about?

    2) they said they couldn’t gt jobs, period. Do you not believe them?

    3) what muslim factor?

  46. Ernestine,

    my answer to your original question is conditional on the information you had provided me in the original question. I have not received new information regarding the original question hence my answer to the original question remains unchanged.

  47. (Quote) if waiters and waitresses in the US cannot provide basic living conditions for themselves, why don’t we see more of them living on the streets? Or starving on the streets? (End quote)

    Because they take substandard accommodation that is inconsistent with good health, a decent life expectancy and raising children. Such as “trailer parks”, “homeless shelters” and motel rooms. As you will note, motel rooms aren’t economical, but if you can’t raise the rent in advance you can’t rent a house or apartment.

    (Quote)To my knowledge, no one is forced to work at WalMart(end quote)
    This is meaningless – Walmart employees who lack the skills to work in better jobs and the money to acquire those skills would have the “choice” to work somewhere like KFC or a cleaning company – it’s buckley’s choice.

    (Quote)and again, where are the homeless WalMart employees? (Quote) And again, in substandard accommodation

    (Quote)As the nineties progressed, the lack of affordable housing emerged as a critical gap in service to the working poor. Families ready to leave the Shelter weren’t able to find low-income apartments; thus prolonging their stay and limiting access to other families needing shelter. In 1999, to address the lack of low-income housing, the Shelter expanded our mission to include the development of affordable housing for working poor families.
    (End quote) From: http://homelesssolutions.org/aboutus.html

    I can’t find any “hard” (non-anecdotal) data for how many actually freeze on the streets, which, given the US climate, is what they do before they starve, so we’ll just say no one does, ‘k.

  48. Terje,

    “I am aware that minimum wage laws might displace jobs to other countries”

    Not likely. At least not minimum wage laws in the US. Most minimum wage workers in the US are in service industries, things like cleaning services, retail, things that you cannot export.

  49. Helen,

    Can you show that most WalMart employees live in hotels, homeless shelters and trailer parks? I’m perfectly willing to acknowledge it if you can prove it. But I’ll need more than your word for it, ‘k?

    “This is meaningless – Wal-Mart employees who lack the skills to work in better jobs and the money to acquire those skills would have the “choice” to work somwhere like KFC”

    Do people who lack the skills to work in better jobs rountinely get such better jobs in other countries? Are European McDonald’s employees all pHD’s?

  50. Helen, if you can show that most waitresses and waiters live in hotels, homeless shelters and trailer parks, that would work to make your case too.

  51. avaroo,
    Perhaps this study should be thrown into the mix – http://www.news.com.au/story/0,10117,17365987-2,00.html?from=rss – this gem comes from it: “Less than a fifth of low-income earners are in the poorest 20per cent of households where weekly income is $226 or less”. This means that the minimum wage is a less than effective way of helping the working poor.
    It is always better to get over the rhetoric and actually look at what is happening.

  52. While Helen searches for documentation to prove her claim that US waiters and waitresses live in homeless shelters, hotels and trailer parks, here a case of Wal-Mart taking someone out of homelessness.

    http://www.realclearpolitics.com/Commentary/com-11_16_05_JS.html

    My point isn’t that Wal-Mart is a perfect company, no company is perfect. But every nation has low wage retail jobs. Let’s not lose our heads like Helen did above unfortunately and make wild claims about hotels and trailer parks.

  53. Avaroo: They told EVERYONE that, Ian.

    http://www.economist.com/agenda/displayStory.cfm?story_id=5138990&fsrc=RSS

    If even de Villepin can admit, why can’ you?

    As it happens I’d already read the article in question.

    I quote: “This rapid domino effect reflects two broader failings and two policy problems. First, the mass unemployment that persists in a welfare system supposedly glued together by “social solidarityâ€?. Second, the ethnic ghettos that have formed in a country that prides itself on colour-blind equality.”

    This after a paragraph in which they cite the two incidents which were the proximate cause of the ritos: two African teens killed while evading thep olice and a police tear-gas canister accidentally fired into a mosque.

    Later in the article two young man from a banliue (note necessarily a rioter) gives his view of the causes of the riot:

    “It’s Sarkozy’s fault,� says one. The police harass anybody “with the wrong skin colour,� adds another. Further down the road, at the mosque, a young man mopping the steps agrees: “The police don’t leave us alone,� he says. “They stop you for no reason.�

    Unemployment wascertainly part of the cause for the riots.

    If it were the only cause, we would be seeing similar riots in Madrid, Rome and Berlin. We aren’t.

    We did however see similar riots in Sydney on two separate occasiosn in the last year or so – in Redfern and in Macquarie Fields. The Australian unemployment rate is roughly half that of France.

  54. Thank you for the link, Andrew. I agree, a high minimum wage is a less than effective way of helping the working poor as it keeps them from being hired.

  55. Ian, yes unemployment was certainly a cause. It was the cause of the long simmering anger in the community, with the death of the teenagers being the spark. Unemployment is around 40% in the banlieu. The same conditions, basically ghettos run by non-national authorities, with 40% unemployment, do not exist in Madrid, Rome and Berlin.

  56. Source: avaroo Says:

    November 28th, 2005 at 8:15 am
    Quote: Helen, of course minimum wage jobs are designed for specific purposes. Most people who hold them are not in them forever, they are entry level jobs

    Response: Avaroo, I had asked you for data to support your statement, which I have copied above. Just to be clear, this is your statement, not someone else’s.

    Relevant data would be statistical data on the time profile of people on the minimum wage in the US.

    Do you have such data?

    Do you know any alternative answers beside

    a) Yes
    b) No
    c) Yes but I won’t tell you

    Helen, Thanks for your post.

  57. “Ian, yes unemployment was certainly a cause.”

    Please don’t make me go through the whole “a” versus “the” distinction again.

  58. Ernestine,

    d) As you put it above to another poster, “I believe the onus is on you to get the data, if you want to have it.”

  59. Avaroo – thank you for confirming my point which is that UNEMPLOYMENT IS NOT A NECESSARY PRECONDITION FOR RIOTS OF THIS SORT.

    Remember YOU were the one saying unemployment was the root cause. I was the one saying it was one of several contributing factors.

    Would you like me to go through the “you” “not you” distinction? How about “3 is more than 1”?

    The Redfern riots were sparked by the death of a young Aboriginal man who thought he was being pursued by the police. The riots in Macquarie Fields occurred aftertwo young men in a stolen car were killed in a crash while evading police.

    You might also want to look at the various reprots into scoccer hooliganism in England which foudn the majority of those involved were actually employed – with a signifcant number in well-paying skilled or semi-skilled trades.

  60. Ian, in the case of the French riots, unemployment was clearly a precondition for the riots. Why discount what the rioters themselves said?

    I posted information on the Macquarie Fields riots in which locals did blame unemployment for some of the anger.

    Soccer hooliganism is largely underwritten by alcohol abuse. Not something that was likely in the French case as most muslims eschew alcohol.

  61. >Why discount what the rioters themselves said?

    Because the only article you’ve linked to support your claims that they did say that has them saying the exact opposite?

  62. “I cannot find anywhere in here where anyone says that unemployment is not a cause. In fact, even de Villepin acknowledges that it is.”

    Work with me here – most three year-olds have grasped this.

    You said unemployment was THE cause and you claimed that RIOTERS had said so.

    Then you linked to an article in which people who were NOT rioters said it was ONE OF the causes.

    Further more, the people quoted in the article who come closest to the typical description of rioters mention other causes but DON’T mention unemployment.

    You then attempt to claim that because they didn’t say it WASN’T the cause, then this proves it was THE cause.

    I notice they also didn’t say anything about how the International Zionist Conspiracy and Venusain mind-control lasers weren’t the cause.

    Let’s recap:

    1. Riots similar to those in Paris occur in cities with much lower levels of unemployment.

    2. Cities with similar levels of unemployment to those in Paris don;t experience riots.

    Therefore high levels of unemployment are neither necessary nor sufficient as a cause for the riots.

    Which doesn’t preclude them from being A contributing cause.

  63. Avaroo,

    In the absence of getting information from you on your up-ward mobility claim regarding minimum wage earners, the following web-site shows there is a problem with income distribution in the US:

    http://www.cia.gov/cia/publications/factbook/geos/us.html#Econ

    I assume you trust the US CIA

    I assume the French act in a manner, which happens to coincide with your advice given to Australians, namely:

    Source: “avaroo Says:

    November 28th, 2005 at 6:58 am

    Quote: Andrew, although I appreciate your post, I still have no idea why anyone in Australia would care what the US does when discussing Australia’s labor situation. Shouldn’t Australian politicians and businesspeople be discussing Australia, rather than the US? It wouldn’t occur to Americans to consider what Australians do about labor laws.

    Since you brought them up, the US has both public and private healthcare, school vouchers are rare and only in places where they have been voted in by the public (which I assume you think is an acceptable way of deciding these things) and minimum wage jobs in the US unlike other places, are not designed for lifetime employment, nor are they usually held for life. The minimum wage issue perfectly illustrates my point that Australian pols and public shouldn’t look at the US when deciding what to do in Australia” End of Quote

    Have a good day

  64. “You said unemployment was THE cause”

    Where? I can find six places where I said it was a cause but not one instance where I used the word “THE”. Perhaps one of those three year olds can find it for you.

    Yes, let’s recap”.

    Riots happen in other cities. Sometimes they are underwritten by high unemployment and sometimes they are not. In France’s case, they were.

    Rioters in France cited unemployment as a cause of their distress.

    French authorities admit that unemployment was a cause of the French riots.

    Unemployment in the banlieu is 40%. What city with similar levels of unemployment did you have in mind?

  65. Strange remark from avaroo, in which Helen’s description of Barbara Ehrenlich’s detailed book about the working poor is turned into her claiming that “most” Walmart employees fit this category.

    She doesn’t say that at all. She points to a group of people who can’t survive on the wages. It is all a bit like the famous Harvester case in Australia, which has finally been dismantled after a century, which said that the basic wage should be such that a man should be able to support his wife and two children in (if I remember) “frugal comfort”.

    If a basic wage can’t allow a single human being to pay for themselves, then it is too low. Of course the apparent social effect is ameliorated by the fact that many people are sustained by their families, are topping up parental contributions to education costs, adding to their partner’s income or supported by food stamps or charities.

    When we talk about the working poor, perhaps we should remember that American marines with families are apparently issued with food stamps, or a substituting food allowance. (The program is described here).

  66. Ernestine,

    As I assume that you consider anything less than 100% equitable income distribution a “problem”, we’ll have to agree to disagree.

    I agree with you that the French don’t consider US labor laws when looking at their own. But the US does consider the American people when looking at our own labor laws and the French should too, something I believe they’ll be doing more of in the very near future. At least if de Villepin is to be believed.

    Enjoy

  67. Helen does say

    “Their wages can’t even buy what we would define as basic living conditions”

    Who do you think she was talking about?

  68. “If there are plenty of minimum wage jobs in France why were people rioting and claiming there weren’t any? Were they lying?”

    “you no doubt know very well why the French youths were rioting…..no jobs. They were pretty clear about it.”

    In both of the above quotes Avaroo you attempt to reduce the causes of the riots to uneployment.

    “Rioters in France cited unemployment as a cause of their distress.”

    Actually as I’ve repeatedly pointed out to you, you have failed completely to rprodcue any news articles which actually quotes rioters as saying anything of the sort.

  69. “American marines with familes are apparently issued with food stamps”

    How bout a little honesty, davidtilley?

    http://www.washingtonpost.com/wp-srv/local/daily/july99/military20.htm

    “Since 1982, military salaries have fallen nearly 14 percent behind civilian pay, according to federal figures. After pleas from military supporters, Congress has tentatively approved a 4.8 percent pay raise, scheduled to take effect Jan. 1, and many service members will receive a second raise six months later.”

    AFTER PLEAS FROM MILITARY SUPPORTERS. Can we assume you would be for increasing their pay as the US military would like to do?

    “Pentagon officials acknowledge that some service members face severe hardships, not only in the Washington area but also in other parts of the country. But they insist that such cases do not reflect conditions for the vast majority of troops, and they point to statistics showing that junior enlisted service members earn more than the general population of high school-educated 18- to 23-year-olds. ”

    “In addition, members of the armed forces receive some benefits, such as medical care, at a fraction of the cost for most civilians. Commissaries offer items that are 30 percent cheaper than at civilian stores, according to Pentagon figures. Service members also do not pay federal taxes on their food and housing allowances. ”

    “A recent Pentagon study found that, overall, only 450 of the 1.4 million members of the armed forces were living at or below the national poverty level, which is $13,332 for a family of three. “

  70. Ian, is that your admission that I did not use the term “THE” but did several times use the term “A”?

  71. Avaroo,

    You only started using “a” after I used the “a”/”the” analogy.

    Still waiting for those quotes from rioters.

  72. Avaroo says:

    1. “As I assume that you consider anything less than 100% equitable income distribution a “problemâ€?, we’ll have to agree to disagree.”

    Response: I appreciate that it is difficult for some people to handle anything between 0 and 1. There is nothing I can do about it. So, let me ask you:

    Question: Do you, Avaroo, consider it a problem that there are 12% of the population living under the proverty line in the US, as reported in the CIA statistics on the U.S. economy in the year 2005, which I posted?

    (It would be tempting to start a sweep stake on the likelihood of getting a straight answer from Avaroo but I won’t because it is too much work.)

    2. “I agree with you that the French don’t consider US labor laws when looking at their own. But the US does consider the American people when looking at our own labor laws and the French should too, something I believe they’ll be doing more of in the very near future. At least if de Villepin is to be believed.”

    Response: Quite right, most countries solve their own problems irrespective of your advice.

  73. Well done, Avaroo, you actually managed to find articles which support the view that unemployment is a cause of the riots.

    Had you bothered to do so in the first place rather than posting articles that said nothing of the sort and falsely claiming that they did, think of all the time you could have saved.

  74. Yes, but doing it this way, I was able to back you into a couple of corners. And that was certainly worth the effort.

  75. Ernestine, ernestine, you poor thing. How do you get around without assistance?

    1) What you claimed, dearest, was that there was an income distribution problem in the US. If there’s a country on earth in which all citizens enjoy the same income, why not just say so and make your case? Short of that, you’ll have to argue that there is, in your own view, an income distribution problem everywhere.

    2) Most countries consider their own populations when solving problems like unemployment. France will now be joining us. I’m sure that is very satisfying to you. Unless you have a problem with France listening to the advice of her own citizens?

  76. I was just wondering if anyone else would like to admit that they hadn’t seen reports of rioters in France blaming unemployment for some part of their misery, prior to my posting of some of them here? Or is Ian alone here?

  77. Avaroo,

    1. Source: avaroo Says:

    November 28th, 2005 at 8:15 am
    Quote: Helen, of course minimum wage jobs are designed for specific purposes. Most people who hold them are not in them forever, they are entry level jobs

    You haven’t provided any evidence in support of your upward-mobility dream hypothesis.

    2. “A recent Pentagon study found that, overall, only 450 of the 1.4 million members of the armed forces were living at or below the national poverty level, which is $13,332 for a family of three. ” Source: http://www.washingtonpost.com/wp-srv/local/daily/july99/military20.htm, posted by Avaroo today.

    3. According to the 2005 CIA report on the US economy, 12% of the population live under the poverty line as defined in the US.

    4. I conclude that the US government is aware of an income distribution problem in the US but you dont’ know about this.

  78. Helen,

    I am not sure whether the content of your post addressed to me is cleared up by now or not. In any case, I didn’t wish to offend you.

    Regards
    Ernestine

  79. Ernestine,

    1) “I believe the onus is on you to get the data, if you want to have it”

    2) yes, do you have a point?

    3) yes, do you have a point or have you found that place of no income inequality yet?

    4) Anyone even vaguely familiar with the US government or Americans for that matter, would know that “income distribution” is not a concept that keeps Americans up in arms. We’re an opportunity society, quite different from an income redistribution society. Americans would never see poverty issues in terms of what someone with more isn’t giving someone with less. Income redistribution doesn’t address poverty. France is the obvious recent example. Your unfamiliarity with the US is quite breathtaking. It would be quite difficult with all that’s written about the US to NOT know this about us.

  80. Fantastic pro-american article at http://online.wsj.com/article_email/SB113296592953507051-lMyQjAxMDE1MzIyNzkyNjc1Wj.html,

    Let me quote:

    “We are winning, and winning decisively, in Iraq and the Middle East. We defeated Saddam Hussein’s army in just a few weeks. None of the disasters that many feared would follow our invasion occurred. Our troops did not have to fight door to door to take Baghdad. The Iraqi oil fields were not set on fire. There was no civil war between the Sunnis and the Shiites. There was no grave humanitarian crisis.

    Saddam Hussein was captured and is awaiting trial. His two murderous sons are dead. Most of the leading members of Saddam’s regime have been captured or killed. After our easy military victory, we found ourselves inadequately prepared to defeat the terrorist insurgents, but now we are prevailing.

    Iraq has held free elections in which millions of people voted. A new, democratic constitution has been adopted that contains an extensive bill of rights. Discrimination on the basis of gender, religion, or politics is banned. Soon the Iraqis will be electing their first parliament.

    An independent judiciary exists, almost all public schools are open, every hospital is functioning, and oil sales have increased sharply. In most parts of the country, people move about freely and safely.”

    God bless America!

  81. Avaroo,

    1. I don’t need the data. I just discard your upwardly-mobile dream hypothesis.

    As for the rest, I rely on the intelligence of the readers of this thread.

  82. Ernestine

    1) then why ask for it? You can discard whatever you’d like. It’s not like it changes anything.

    Me too, except for poor Ian, who congratulated me for finding what it’s hard not to find. I really, really should’ve told him that it would be harder to find articles that DON’T list unemployment as a cause of the French riots than ones that do. Guess I’m just not that magnanimous!

  83. It really is a shame that like Ernestine outside the US, millions of people who arrive in the US have had to discard the “dream” of upward mobility. Wave after wave of immigrants remain where they started in the US, the Irish, the Italians, the Jews, the chinese, the blacks, all at the very bottom rungs of American society while white Americans of English extraction continue to reap alone all the bennies of American life. (Don’t tell Oprah please, I adore her, she’d be crushed!)

    Yes, it was all a cruel hoax, intended to lure millions of people from around he globe here with the promise of a better life. You can see these sad victims lining up to depart the US, dejected and broke, still searching for that land of opportunity. They’ll go back where they came from, poorer yet wiser, until the world awakens to this scam Americans have been perpetrating on people for generations.

  84. Avaroo,

    You are not America – in case it may not be obvious to you. People are not as silly as you may assume. In particular, the demonstration of how a ‘spin’ is being done might have been of interest 10 years ago. It is an old hat by now.

    It seems to me, the only people who believe spins are those who pay for them.

    I strongly object to you putting my name into your spin. I demand that you remove my name from your spin, step by step.

    .

  85. Oh Ernestine, I see another “dream” is about to be discarded for you – the dream that your objection to my parody of you somehow matters. You asked for it.

  86. ” Do you, Avaroo, consider it a problem that there are 12% of the population living under the proverty line in the US, as reported in the CIA statistics on the U.S. economy in the year 2005, which I posted?”

    How do they define the poverty line, then? In many countries, the poorest 10% is defined as the poverty line. Even if the Average wage is 10 billion dollars a year, there will still be 10% of people who are the poorest, even if they are all living in mansions of gold.

    This is the way it’s defined in Australia. It’s incredibly hard to stop people being poor when the definition keeps changing.

  87. avaroo Says:

    November 28th, 2005 at 8:05 pm
    It really is a shame that like Ernestine outside the US, millions of people who arrive in the US have had to discard the “dream� of upward mobility. Wave after wave of immigrants remain where they started in the US, the Irish, the Italians, the Jews, the chinese, the blacks, all at the very bottom rungs of American society while white Americans of English extraction continue to reap alone all the bennies of American life. (Don’t tell Oprah please, I adore her, she’d be crushed!)

    Yes, it was all a cruel hoax, intended to lure millions of people from around he globe here with the promise of a better life. You can see these sad victims lining up to depart the US, dejected and broke, still searching for that land of opportunity. They’ll go back where they came from, poorer yet wiser, until the world awakens to this scam Americans have been perpetrating on people for generations.

    In a lot of cases this is not parody, its reality. Ask any one of the thousands of Mexicans who cross the border, work at companies like Walmart for less than the minimum wage and then go back to Mexico. Their numbers have become so great that some politicians now want to grant these illegal immigrants the right to public schooling in the USA and to get a US drivers licence.

  88. Paul, have you somehow missed the millions of Mexicans living in the US?

    Wal-Mart pays Mexicans less that minimum wage? Can you prove that?

  89. avaroo Says:

    November 29th, 2005 at 8:19 am
    Paul, have you somehow missed the millions of Mexicans living in the US?

    Wal-Mart pays Mexicans less that minimum wage? Can you prove that?

    Avaroo, have you somehow missed the fact that a lot of them are illegal immigrants?

    Here are 2 links, 1 a union site and the other a government report, I refer you to the undocumented workers

    http://edworkforce.house.gov/democrats/releases/rel21604.html

    http://www.aflcio.org/corporatewatch/walmart/walmart_7.cfm

  90. Avaroo says that the US is an “opportunity society”. I am skeptical of the implied claim that social mobility upwards in the US exceeds the upwards mobility found elsewhere. Can Avaroo substantiate that claim? Evidence in Corak (2004) indicates that the adult income of children in the US, UK and France is more (not less) closely related to that of their fathers than in a number of other countries. Corak states: “The rich countries in fact differ significantly in the degree of earnings mobility between fathers and sons. The United Kingdom, the United States, and to a slightly lesser extent France, are the least mobile countries with 40 to 50% of the earnings advantage high income young adults have over their low income counterparts being associated with the fact that they were the children of higher earning parents. In none of the OECD countries under study is this relationship entirely eliminated, falling to as low as 15% in Denmark and about 20% in Canada, Finland, and Norway”.

    The paper is at http://www.iza.org/en/papers/Corak280904.pdf

    On straightforward inequality, Prof. Quiggin summed up the situation for the US poor in his post of June 1 2005 “IR Reform and Inequality”, in which he said: “Low-income families have experienced almost no income growth since 1970. Wages for workers with high-school education or less have actually fallen…”

  91. I think that social and cultural expectations have a very big effect on how socially mobile kids are with respect to parentals. At a guess I would say that most kids use their parents as primary reference sources and reflect their parents work ethic, self efficacy etc. As such government economic policy may not be the determinent factor.

    One area that I have observed considerable mirroring of values between parents and kids is in the persuit of an academic life versus a corporate/business life. To be sure many people span both however I have seen whole families where the kids gain multiple degrees but earn average income and other families where the kids get few qualifications but earn bucket loads. My other half has an undergraduate degree, a master degree and is now finalising a PHD in a third area. I feel supportive but I am personally unmotivated by such symbols. Both her parents have masters degrees while my dad was a self employed tradesman and my mother as an OT in mental health.

    The formative years matter lots but who wants governments brainwashing our kids?

  92. Degree or no degree, I agree that parental homes are important because how would children learn how to think straight when they are exposed to insincere ‘word smithery’, not necessarily from governments.

  93. I think that any liberal society is founded on the strengths of individuals. However individuals are nutured in families and communities so I think we agree. Families and the extent to which their behaviour is functional behaviour matter a great degree.

    I also agree that there are negative influences other than government that ideally kids should be sheltered from. Unfortunately some kids will have families that are of themselves a negative influence.

    Personally I think that kids should be exposed to the fact that there are multiple adult worldviews. And that their parents don’t have any monopoly on ideas. In the formative years it is parents that determine if kids get this exposure.

  94. Ernestine, from your own provided link: “The updated Poverty Lines take into account changes in the average income level of all Australians, reflecting the idea that poverty is relative.”

    So in other words I was completely accurate. As long as poverty is defined to mean “relative poverty”, it can never be eradicted, short of a North Korea – style solution.

  95. Lengthy selection of Republican talking points and quotations from former US Senator John Glenn deleted. If you want to promote this kind of chain letter material, do it with a link.

  96. >So in other words I was completely accurate. As long as poverty is defined to mean “relative poverty�, it can never be eradicted, short of a North Korea – style solution.

    If the poverty line were defined as, let’s say the average income of the poorest 10% of the population, you would be correct.

    In fact, the poverty line is defined as a percentage of average weekly earnings. If fewer people earn below that percentage the poverty rate will decline. this is why different countries have different poverty rates.

  97. Yobbo,

    Quote: “Ernestine, from your own provided link: “The updated Poverty Lines take into account changes in the average income level of all Australians, reflecting the idea that poverty is relative.â€?

    So in other words I was completely accurate. As long as poverty is defined to mean “relative povertyâ€?, it can never be eradicted, short of a North Korea – style solution.”

    Response:

    1. I don’t know what you mean by North Korean style so I ignore that.

    2. No, your earlier post is not accurate. The quote you are giving does not solve this problem.

    3. The quote you have given is not misleading to me but I can see that if you don’t read the rest of the article on the link I have provided then you reach the strange conclusions in your earlier post, which you are trying to substantiate by means of the selective quote.

    4. The link I have posted is : http://www.melbourneinstitute.com/miesi/poverty.html.

    5. If it is any consulation, newspapers sometimes contain similar none-sense as that contained in your earlier post and the current one.

    6. If you wish to gain clarity on the Australian poverty line, then there is only one way to do it. You work through the definitions and the algebra yourself and you read up on the calculation of statistics which enter the calculation.

    You can also look up a post by Dogz on this blog-site (I don’t remember the topic) to get a feel for what people who understand what they are talking about come up with as the income (wages and transfer payments) required for an Australian family in metropolitan areas to live a reasonably modest life. Compare Dogz’ estimate to the data on the site I have listed and you may get an idea that there is something not quite right with your method of reaching conclusions.

    Helen’s posts may be helpful too. If this is not enough you may wish to hire a consultant.

    Hope this helps.

  98. Ernestine,
    Yobbo was not ‘completely accurate’, but he was correct in a general sense – if all Australians were living in golden houses, but most had 20 bedrooms and some only 5, the ones with only 5 bedrooms would be counted, under that system, as being in poverty. The fact that they all had enough to eat and lead rich, fulfilling lives would be irrelevant. I am not saying this is the case, but as soon as you use a relative measure that is what you get.
    I would hazard a guess that there are not many Australians living in the sort of poverty that is common in sub-saharan Africa or in parts of South America – or, for that matter, North Korea.

  99. Andrew,

    Re your message of 29 November, 6:31 pm

    I’ve come across a similar confusion of relative wealth categories, as described in your post, versus the income (wages + transfer payments) required to purchase a predetermined modest bundle of goods and services in the market. I seem to recall the speech was given to a Think Tank. The amount of confusion that can be generated by words is, IMHO, mind-boggling.

    The concept of the Henderson Poverty Line is well defined and documented and so are the methods used to approximate changes in the Poverty Line at regular time intervals. The bundle of goods and services is assessed from time to time by one commission or another.

    It is not true that the bundle of goods and services would automatically be adjusted as is suggested in your artificial example.

    In market economies resources are allocated by relative prices. Thus, relativities cannot be avoided. People live in local economies. Hence the local goods and services and local relative prices enter the calculation of the local Poverty Line. Surely, it would be rather silly to determine a Poverty Line for Australia, using the relative prices in, say Outer Mongolia without including the cost of airfares and whatever is required to move the people (and the income) from Australia to Outer Mongolia.

  100. Paul,

    “Avaroo, have you somehow missed the fact that a lot of them are illegal immigrants?”

    but you claimed they were leaving the US. How can they be illegal immigrants if they have left the US?

    Can you document your claim that Wal-Mart is paying anyone less than minimum wage?

  101. gordon,

    Comparing the US to other countries is difficult, particularly certain aspects of it. (I know this is unpopular in some circles but it’s nevertheless true) For example, you compare the US to Finland on the issue of social mobility. But Finland doesn’t have the cultural diversity of the US, it doesn’t have immigration anywhere near the US in terms of either numbers or diversity.

    When I refer to an “opportunity society”, I’m talking about the relative ease with which the US absorbs people, and all different kinds of people, from around the world, many of whom come here with not a thing. Finland doesn’t have hundreds of thousands of people arriving every year with basically nothing. If you look at France, another of your examples, most of its immigration comes from one global area, North Africa and the Middle East. There’s no substantial Chinese or east asian immigration, hispanic and/or latino immigration, African immigration other than North Africa, south american immigration, caribbean immigration, eastern european immigration (with the possible exception of Poland), Indian immigration.
    Looking at how a father and son’s income match up, you’d have to take into consideration that millions of people in the US don’t have fathers living in the US, they are back in India, China, Pakistan, Honduras, etc. That doesn’t hold true for Finland.

  102. “As long as poverty is defined to mean “relative povertyâ€?, it can never be eradicted”

    point well taken yobbo. Comparing people who live in poverty in one nation where those people don’t have enough food or any shelter at all, to people living in poverty who own 2 cars, cell phones and eat MORE than enough for 2 people is silly

  103. avaroo Says:

    November 30th, 2005 at 2:30 am
    Paul,

    “Avaroo, have you somehow missed the fact that a lot of them are illegal immigrants?�

    but you claimed they were leaving the US. How can they be illegal immigrants if they have left the US?

    Can you document your claim that Wal-Mart is paying anyone less than minimum wage?

    Last time I checked, you needed a visa for legal entry to a country, they are only leaving the country to take the money back to their family, you obviously either dont live in the USa or you dont read the newspapers very much Avaroo.

  104. Paul, you are very confused. Mexicans don’t “take the money back to their family” physically. It would be much too difficult to continuously sneak into the US and sneak back out. Now, they do SEND money back to their families, perhaps that’s what you meant to say. Whole businesses are focused on funnelling money back to Mexico specifically. But going back and forth, carrying wads of cash? No. One of the suggestions to control immigration in the US is to slap a very high tax, like 50%, on such money being sent back (legally too) to prevent people from coming here and that’s BECAUSE they don’t physically take the money back home, they send it.

    It appears you cannot document your claim that Wal-Mart is paying illegal immigrants less than minimum wage. Perhaps it’s just another one of your odd ideas about the US.

  105. Avaroo (and others) may also be interested in the 2005 study “Intergenerational Mobility in Europe and North America” by Blanden, Gregg and Machin. They state: “Thus the picture that emerges is that Northern Europe and Canada are particularly mobile and that Britain and the US have the lowest intergenerational mobility across the European and North American countries studied here. The USA is seen by some as a place with particularly high social mobility. In part this is a consequence of using measures of class to estimate mobility (these will be affected by
    changes in the class structure over time). However, the idea of the US as ‘the land of opportunity’ persists; and clearly seems misplaced”.

    The paper is at: file://F:Environomicsinequalitycee.lse.ac.ukcee dpsCEEDP26.pdf

    Game, set and match?

  106. I’ve already responded to your post, gordon. Nothern Europe just isn’t comparable to the US, for the reasons I’ve listed.

  107. Avaroo, as it seems you have an aversion to clicking on the links I provided, here is an excert from one of them,

    Undocumented workers have been exploited at Wal-Mart. On Oct. 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states and arrested 245 nightshift janitors who were undocumented workers employed by cleaning contractors. In an Oct. 25, 2003, New York Times story, one undocumented janitor said he had worked every night except Christmas and New Year’s Eve for 16 months and made approximately $6.25 an hour with no benefits. Following the October raids, nine Mexican immigrants who worked as janitors in New Jersey sued Wal-Mart alleging that it, as well as the contractors, failed to pay overtime, withhold taxes and make required workers’ compensation contributions. No federal charges were filed against Wal-Mart, but the company agreed to pay $11 million to settle claims stemming from the federal investigation. The settlement, announced March 18, 2005, also calls for $4 million in criminal forfeitures by 12 firms the retail giant hired to provide janitorial services.

    I didn’t say all Mexicans take the money physically back, obviously the majority send it back. But it is also true that the ones who are caught, frequently may their way back accross the border to try again and it becomes an endless cycle.

    As far as the 50% tax on money going back, that is a new one to me, where did that originate? I have heard proposals for the illegal immigrants to get US drivers licences and public education among other things.

    I wonder where I get my “odd ideas” about the US from? I have only been living in the US for 6 years.

  108. When it is pointed out to Avaroo that the US “opportunity society” doesn’t actually provide as much opportunity as some other places, Avaroo observes that there are few Mexicans in Finland. Maybe if the US imported less cheap labour from south of the border its social mobility outcomes would look better, but causes and cures are another issue. The fact seem to be that the Gringos’ “opportunity society” is a bit of a myth.

  109. Paul, Nothing you’ve shown indicates that Wal-Mart has paid anyone less than minimum wage.

    You actually DID say they take it back and the vast majority do not. They send it.

    So far, not a thing you’ve said has been backed up by any proof at all.

  110. gordon,

    You posted a link to a report on the UK. I was talking about the US, not the UK.

    I understand that it irritates some people to hear the US described as an opportunity society.

  111. Clearly nothing short of having a Mexican knock on your door and show you his pay packet is going to convince you Avaroo, you have a bad case of tunnel vision. Yes, I did say “they” I did not say “all” if you read my lasy post and are able to comprehend it, you would have read this,

    I didn’t say all Mexicans take the money physically back, obviously the majority send it back. But it is also true that the ones who are caught, frequently may their way back accross the border to try again and it becomes an endless cycle.

    I have provided the proof, you just prefer to keep your head in the ground and not read it. Here is more, perhaps you will read this, 1 from the USA and 1 about Walmart in China

    Wal-Mart was recently ordered by courts to pay up to 120 workers in Gallup, New Mexico and 400 workers in 27 stores in Oregon for violating wage and hour laws.

    NLC interviewed workers in China’s Guangdong Province who toil in factories making popular action figures, dolls and other toys sold at Wal-Mart. In “Toys of Misery,” a shocking 58-page report that the establishment media ignored, NLC describes: 13- to 16-hour days molding, assembling, and spray-painting toys–8 a.m. to 9 p.m. or even midnight, seven days a week, with 20-hour shifts in peak season.

    Even though China’s minimum wage is 31 cents an hour–which doesn’t begin to cover a person’s basic subsistence-level needs–these production workers are paid 13 cents an hour.

  112. Paul, you made a claim and so far you can’t back up. Face it.

    If you can show that the Gallup NM and 27 stores in Oregon suits were for paying less than minimum wage, which was what you claimed, let’s see it. Violation of wage and hour laws are solely about paying less than minimum wage.

    You’re blowing a lot of smoke, probably to distance yourself from your original claim.

  113. Actually, “violation of wage and hour laws are NOT solely about paying less than minimum wage” is what the 2nd sentence in the 2nd paragraph above should have read.

  114. Now I cant make it any simpler than this, at least prove to me that you can actually read. Do correct me if I am wrong but unpaid overtime is less than the minimum wage by my calculation. Again I include a link previously provided which includes the following.

    Off-the-clock work. By December of 2002, 39 class action lawsuits, involving hundreds of thousands of plaintiffs, charged Wal-Mart with withholding earned wages, either by deleting hours from time sheets or forcing workers to work unpaid overtime hours.

    http://edworkforce.house.gov/democrats/releases/rel21604.html

  115. Paul, what you said is that Wal-Mart pays some people less than minimum wage. Do you have ANY proof that Wal-Mart has paid ANYONE less than minimum wage? You’ll need two numbers to prove this 1) the actual minimum wage figure, which I doubt you even know and 2) the wage Wal-Mart was caught paying.

  116. You’ve also never proven that my parody of Ernestine is false. Where was it you thought all the people are lined up to leave the US having failed to find any opportunity here?

  117. Avaroo,

    I have never agreed to you using my name on this blog site for your spin, which you, quite wrongly, call a parody. Another word for a spin is obfuscation.

    I object to your spin and I have told you this.

    I have asked you to unravell your game of obfuscation, step by step. When you do this, you provide the prove that counts.

    There arn’t many steps involved in the unravelling. I had hoped you can do it all on your own. But you can’t. Prove me wrong.

  118. Avaroo, I object to integrating my name into your spins, which you call parody.

    As for your spin:

    On 28/11/05, 8:05 Avaroo wrote: “It really is a shame that like Ernestine outside the US, millions of people who arrive in the US have had to discard the “dream” of upward mobility….”

    You write as if you have knowledge that I, Ernestine, have a “dream” of upward mobility in the US and that I had to discard it. You don’t have this information. You made it up.

  119. avaroo,
    There is no inconsistency in all these things being true-
    The US provides plenty of opportunities for immigrants from poor countries to obtain employment they would otherwise not have in their country of origin.

    US employers ‘enjoy’ large illegal as well as legal immigration (together numbering some two millions a year in some estimates) as a means of ensuring that labour market pressures at the bottom of the labour market are constantly ‘eased’ by new and essentially unorganisable immigrants

    Large sectors of the US economy, including in ‘domestic’ services (retail, cleaning and the like) have experienced virtual zero productivity growth over the last twenty years, together with stagnant wages due to factors outlined above.

    The US provides a huge array of ‘market’ options in goods and services, and at the high end, in education and health for example, are able to deliver the best in the world. It is also true that access to high quality education and health care in the US is skewed in ways not experienced by other advanced, prosperous and democratic countries.

    It is misleading, not to say mischievous, to claim that those who are critical of the recent growth in income inequality in the US, favour absolute income equality. It would be like claiming that those who favour growing the cake without caring about its distribution, favour economic and social arrangements akin to Brazil for example.

    The federal US minimum wage is currently $5.15 per hour. It has not changed for 9 years. It is lower in real terms now, than its equivalent in 1973. Care to comment?

  120. * The federal US minimum wage is currently $5.15 per hour. It has not changed for 9 years. It is lower in real terms now, than its equivalent in 1973. Care to comment?

    Clinton essentially moved responsibility for minimum wages to the juristicition of the individual states. The $5.15 rate is the federal minimum but many states set a higher minimum. Personally I think that no US government should ever increase the federal minimum and it should instead be determined by state parliaments.

    The individual states in the US are democracies. I am sure they can debate it adequately.

  121. In San Francisco the minimum wage is US$8.62 which is about the same as Australias minimum wage.

    I think that in parts of Australia with a high unemployment rate there is a good case for local reductions in the minimum wage to encourage job creation. I think that like Clinton did in the USA we should look to decentralise the setting of minimum wages.

  122. Terje Peterson writes:-
    “I think that in parts of Australia with a high unemployment rate there is a good case for local reductions in the minimum wage to encourage job creation. I think that like Clinton did in the USA we should look to decentralise the setting of minimum wages.”

    You have not replied to the rest of my post. The problem with relying on lower pay rates in order to create jobs, is that the jobs created are precisely the kinds of jobs that will compete endlessly on the basis of the price of labour. This is a self defeating and ultimately dead end way of raising general standards. I agree that in some cisrcumstances high real wages can be a bar to entry into the labour market, however there are other solutions to this than simply cutting wages. I repeat, we are in danger here and in the US and in the UK for that matter, of creating whole industries that are ‘addicted’ to low wage/low end low productivity wage labour. As a way of keeping the indigent off the streets they work (in a fashion)-as a way of building a high skill, high productivity economy that enables high growth together with high levels of well being, both social and economic, they leave a lot to be desired. It is all too easy to cut (somebody elses) wages. Any fool can do that. The trick is to build an economy that encourages high wages and high productivity that is able to be spread across the polity. That takes a little more thought and a little more work. That is why Costello and Howard find it too hard. And note-I am not arguing that every-ones wages should be the same, nor that there should not be entry level jobs. I and everyone else I suspect have perfromed those jobs. The point is, unless they do indeed lead to something better they are a trap, not a way up and out. And the trap exists for indsustries and nations, not just individuals.

  123. Oh, Avaroo, you old teaser, you’re just trying to get me angry, aren’t you? How could I ever be angry with a sweetheart like you? I know references from those nasty foreign websites are hard for you, but you’re a TRIER, aren’t you, and you’ll do fine in the Land of the Fatherless and the Home of the Desperate. Wal-Mart’s hirin’, baby; step right up!

  124. We would all prefer to see people employed in high skilled high wage jobs rather than low skilled low wage jobs. I find it unlikely that people could become addicted to low wages. The existance of low wage jobs does not preclude the creation of high wage jobs.

    It makes more sence to lower the minimum wage and create low wage jobs as well as pursue intiatives to create high wage jobs. The best minimum wage is not a legislated one but a practical one resulting from a vibrant labour market.

    It seems foolish to me to maintain a pool of unemployed people because you have good intentions about creating high wage jobs down the track. Having people unemployed does not assist the high wage vision.

  125. gordon, although I doubt it would take much to make you angry, I have little interest in your emotional state. References from foreign websites that have nothing to do with the subject under discussion are ignored. That’s why posting a link to a site with a report on the UK was ignored. I wasn’t talking about the UK.

  126. Terje, I agree with you, there’s no point in having only a choice between high paying jobs and no jobs. Most people don’t enter the labor market in high paying jobs, nor should they really. You work your way into a high paying job.

  127. The federal minimum wage in the USA has been $5.15 per hour but can be as low as $2.13 per hour for tipped employees. Some states have set their own minimum wage and this varies from state to state.

  128. Ernestine, you’re welcome to the reference. Like the Corak paper I quoted earlier, it compares intergenerational mobility across countries including the US and several in Europe. Unfortunately neither paper covers Australia. Maybe you or other commenters know of comparable work done here?

    Defence of comparatively high and/or increasing social inequality is often based on mobility, the argument going: “inequality doesn’t matter because social mobility allows talented people to rise”. The discovery that unequal societies don’t have the social mobility which would “compensate” for inequality should be fatal to this defence, but unfortunately it is not always accepted. Personally, I would be suspicious of this defence even if increasing inequality and increasing mobility were found together, as in fact (so far as I can gather) they are not. It implies a sort of unidimensional social Darwinism tolerant of very low living standards for those deemed “losers”. It also runs the risk of total circularity – if you are at the bottom of the heap you have no talent because if you had talent you wouldn’t be at the bottom. There is no need for an independent assessment of “talent” in such a circle.

  129. gordon,

    I’ve read the article by Blanden, Gregg and Machin, albeit only once. Thank you very much. It is the case that the study uses European data and US data. IMHO, the methods used are solid, hence the findings are worth taking note of.

    I think the points you make are important and should be discussed. Without wishing to precommit, what you say makes sense to me from the perspective of theoretical models of general equilibrium theory concerned with non-dictatorial resource allocation (those which make precise words such as ‘free markets’, ‘personal liberties’, and ‘freemdom of choice’ ) Unfortnately, it takes a little time to present the arguments concicely and I haven’t got the time to do it at present to boil it down to a few crucial sentences. If its enough, I can say that a monumental departure from the philosophical and theoretical framework of ‘market economies’ has taken place in the last 20 years. By making the central unit of analysis ‘an enterprise’ rather than people, the foundations for corporatism have been laid. Totally unnecessary second round confusions (?) are about to be made, namely to distingish employment laws by the number of employees rather than the legal form of enterprise (sole proprietor, partnership, corporation, multinational corporations or other forms of complex corporate structures). By demolising an independent institution, such as a central wage fixing authority (please substitute the exact name for Australia), rather than reforming it to make it work better, and replacing it with what I call ‘kinglets’, the conditions for the circularity you mention have been provided. I am afraid, given the time and space available, this is rather unsatisfactory because I am essentially asking you to believe me. This is not the intension. I am prepared to argue my point but I would need time and space.

  130. Gordan,

    A supplementary message. It seems after all these posts, the topic of this particular thread has been forgotten.

  131. Ernestine, I think it’s about cultural cringe to a large extent. The cringe factor faciltates the importation of foreign practices which are familiar to foreign investors. This makes them comfortable. It is a great pity that cringe seems to prevent Australians from being critical of foreign ideas, and I think this is particularly true of American ideas. Sadly, academics are no less subject to cringe than others. Peter Brain (National Institute of Economic and Industry Research, Melb.) said in his 1999 book “Beyond Meltdown”: “It was fateful for Australia that neo-liberalism arrived in its academic form. It was the neo-liberalism that the Americans preached, and not the one they practiced. …the policy elite had converted to the American export version of neo-liberalism by the early 1980s. It was a remarkable turnaround”.

    I apologise again for taking 3 tries to get that internet reference right. I’m not usually that bad!

  132. Gordon,

    I am afraid, notions of ‘cultural cringe’ are outside my area of expertise as are notions of ‘social Darwinism’. However, as I mentioned in brackets on one post (can’t remember the topic), I am aware of the separation of the ‘material welfare’ (as in physical and biological) from ‘spiritual welfare’ in theoretical models in economics and it is conceivable that this separation may not be acceptable to all people, either within a ‘cultural group’ or across cultural groups. Perhaps I should add here that I am using the term ‘culture’ in a commonsensical manner.

    Incidentally, the link you had posted related to a 2002 paper by Jo Blanden et al. . Having the name ‘Jo Blanden’ was sufficient to find the 2005 paper by Blanden, Gregg and Machin and many more. No need to apologise.

  133. This pretty well debunks Gordon’s link.
    It’s by Donald Luskin and addresises the Panel Study on Income cited in Gordon’s link.

    http://www.poorandstupid.com/2005_06_19_chronArchive.asp#111936529591024018

    “Starting on May 13, the Wall Street Journal ran a series of four front-page stories—totaling almost 10,000 words—about what it manifestly considered a major threat to the Republic. Two days later, the New York Times launched a series of a dozen stories about the same threat, most of the articles splashed on page one, above the fold: a total of nearly 50,000 words. BusinessWeek, the Christian Science Monitor, and the Los Angeles Times have taken up the story, too; Michael Kinsley, writing in the L.A. Times, even suggested that the Washington Post get into the act.

    Was the furor about al-Qaeda? Iran? North Korean nukes? Nope. The sword of Damocles hanging over our national future—and discovered, coincidentally, by all of these mainstream liberal media outlets at once—is . . . income inequality. But a concerned citizen who wades through these tens of thousands of words, and pores over the studies they solemnly cite as authoritative, will find a simple, but highly reassuring, truth: There’s no story here.

    The Journal and the Times are exercised by reports that, over the last three decades, a new class of what the Times calls the “hyper-rich� has arisen in the United States, resulting in a disparity in incomes between rich and poor not seen since the 1920s: the most severe income inequality in the developed world today. How did this happen? As the Times explains it, “The hyper-rich have emerged . . . as the biggest winners in a remarkable transformation of the American economy characterized by, among other things, the creation of a more global marketplace, new technology and investment spurred partly by tax cuts.�

    Fair enough. We have indeed seen a transformative era of economic growth. That era has indeed produced a whole new class of extremely wealthy individuals—or, more accurately, a whole new class of individuals became extremely wealthy as their reward for taking the risks that made that growth happen. And indeed tax cuts were at the root of it—supply-side tax cuts that increased the incentives for risk-taking in the first place.

    But none of this is exactly man-bites-dog material. What the Times reports as news is a pattern that should be familiar to economic historians: Times of great prosperity have been associated with greater income inequality (for example, the 1920s), and conversely times of economic decline have been associated with greater equality (the 1930s). The lines of causality here are complex, and no doubt run in both directions: Prosperity is both the cause and the effect of inequality, and decline is both the cause and the effect of equality. So ideological advocates of income equality for its own sake ought to be careful what they wish for.

    The great prosperity of the last three decades has been dominated by American technological and commercial prowess. So no one should be surprised that the emergence of the new hyper-rich has been preeminently an American phenomenon. Today 341 of the world’s 691 billionaires—including five of the top ten—are Americans. These aren’t old-money names, either. You have to get all the way down to number 86 before you find a Rockefeller. At the top of the chart are Gates, Buffett, Ellison, Allen, Walton—precisely the people whose innovations and risk-taking made our current prosperity possible. Much of the rise in American income inequality could probably be erased in one fell swoop just by getting these 341 people to move to another country.

    We need to focus, then, on the question: What harm has it done to have this new class of the hyper-rich on the American scene? The Times and the Journal both go on at length about how Americans who used to consider themselves very rich—one thinks inevitably of the Sulzbergers of the Times, and the Bancrofts of Dow Jones—are rather annoyed to have to compete socially with the new hyper-rich; old money has never liked new money. But in truth, the incomes of the hyper-rich have not come at the expense of anyone else. The poverty rate, for example, hasn’t risen over the last 30 years; it has actually fallen slightly. Average after-tax, inflation-adjusted income has risen for every income quintile in the population. Yes, it has risen the most for the highest quintile, and risen the least for the lowest—but this can be explained to some extent by the great wave of immigration over the same period. The fact remains that income has risen for all: The rising tide has lifted all boats.

    THREE CHEERS FOR DIVERSITY

    Before the present era of transformative growth and its concomitant income inequality, many economists had expected the mid-20th-century trend toward greater equality to persist forever. According to the influential hypothesis of Simon Kuznets, nearly a half-century of steadily rising equality of income following the technology revolution that peaked in the 1920s was explained by the fact that more and more workers were joining the high-productivity sectors of the economy. Now it appears that what Kuznets described may be, in fact, a cyclical phenomenon that restarted at some point about 25 years ago. Income-inequality guru Emanuel Saez, an economist at the University of California at Berkeley, has written that “a new industrial revolution has taken place, thereby leading to increasing inequality, and inequality will decline again at some point, as more and more workers benefit from the innovations.�

    In other words, at the beginning of each cycle a small band of risk-takers get extremely wealthy in the vanguard of economic transformation, but that’s only a one-time effect. For years afterward, everyone else in the economy adapts to the new, higher productivity potential that the new rich have made possible, and incomes gradually gravitate toward greater equality. Happily, then, those who hope for greater income equality need not wish for slower growth, or for the mass deportation of our billionaires. All that is required is patience—and hard work.

    But income inequality will never go away entirely—and it’s not at all clear that we should want it to. Even if a socialist-minded fairy godmother were to wave her magic wand and set all incomes to perfect equality, in a free economy they would immediately drift toward inequality owing entirely to voluntary choices made by each individual. Each of us would choose freely whether to work hard or take it easy; to marry a working spouse or a stay-at-home; to educate ourselves for a better job, or settle for less; to invest in income-producing securities, or just spend our money. All these things would determine our unequal incomes, just as they do today. To be sure, in the real world we don’t make those choices from an initial position of equality. Some of us are born rich, others poor, most in between. Nevertheless it’s choices like these that determine whether we will rise or fall within the class in which we are born, or move upward or downward to another class. So we shouldn’t fear income inequality: We should celebrate it as “income diversity.�

    Changing our incomes by making choices different from those of our parents is called “income mobility.� Both the Wall Street Journal and the New York Times correctly acknowledge this practice as fundamental to American life (and both happen to discuss Benjamin Franklin as its exemplar). Yet the papers argue that income mobility is on the decline just as income inequality is on the rise. You’d think that the emergence of a whole new class of the hyper-rich would prove that income mobility is alive and well (they had to come from somewhere, after all). But no.

    The Times and the Journal cite many authoritative-sounding studies on declining income mobility. But to get an accurate picture of income mobility, you’d have to track hundreds of millions of individuals through time, monitoring changes across generations in such factors as their income, tax rates, wealth, lifestyle, and education. Looking back further than a couple of decades, robust statistics are hard to find in standard databases; you can’t ask all the individuals concerned, because many of them are deceased. So researchers end up relying on surveys of small samples of people, containing what they can recollect about their parents’ and grandparents’ economic circumstances. As a result, hard facts about economic mobility are elusive, and studies about it are approximate and subjective at best.

    Yet for all that, the Times and Journal stories are peppered with definitive-sounding statements, like this one from the Times: “One study, by the Federal Reserve Bank of Boston, found that fewer families moved from one quintile, or fifth, of the income ladder to another during the 1980s than during the 1970s and that still fewer moved in the 90s than in the 80s.� If you follow the Times’s link to this study, it turns out actually to be about women in the workforce and what happens to families when a spouse dies; the more general findings cited by the Times are buried in an appendix. Yes, that appendix shows that about 4 percent more households stayed in their income quintile during the 1990s than in the 1970s. But it also shows—though the Times doesn’t mention this—that in the 1990s more households than ever jumped from the poorest quintile to the richest. But none of this is reliable anyway: A footnote reveals that the statistics are derived from the Panel Study of Income Dynamics database, an ongoing survey that tracks only 8,000 families out of a U.S. population of 295 million individuals.

    The other studies cited are based on evidence equally unreliable, and come to conclusions even less interesting. At most, these surveys suggest that—maybe—income mobility has stopped improving over the last 30 years.

    Perhaps the best research method for getting our arms around the slippery topic of income mobility is simply to take a poll, and ask people how they feel about it. The New York Times itself took such a poll, and its optimistic results are strikingly at odds with the paper’s gloomy conclusions. Eighty percent of respondents said “it’s still possible to start out poor in this country, work hard, and become rich�—up from 57 percent in 1983. Twenty-five percent said they believed their children’s standard of living would be “much better� than their own—up from 18 percent in 1994. Forty-six percent said hard work is “essential� for getting ahead in life—up from 36 percent in 1987.

    RESENTING PROSPERITY

    So where’s the beef? Everyone’s gotten richer—and a few have gotten hyper-rich. And there’s no real reason to think that income mobility isn’t alive and well. So why this full-court press by the liberal mainstream media to create the impression that America is becoming a feudal society? Maybe it’s a media thing; there’s no other industry more obsessed with pigeonholing people by class. Here, for example, is how the New York Times sees its readers: They’re “nearly three times as likely as the average U.S. adult to have a college or post-graduate degree, more than twice as likely to be a professional/managerial and more than twice as likely to have a household income exceeding $100,000.�

    Or maybe it’s a liberal thing. You’re more likely to vote Democratic if you’re convinced that “the rich� are keeping you from getting your fair share—you know, “Two Americas� and all that. And you’re more likely to support liberal initiatives like affirmative action if you think that the American dream based on income mobility is falling apart. So liberal media outlets like the Times go through periodic frenzies about income inequality, regardless of who’s in the White House. (Two typical Times headlines, from 1998: “In Booming Economy, Poor Still Struggle to Pay the Rent� and “Benefits Dwindle for the Unskilled Along with Wages.�)

    And, of course, the putative problem of income inequality is yet another opportunity for the liberal media to excoriate the Bush tax cuts. Whatever the problem—Social Security solvency, economic growth, outsourcing to China, budget deficits—repealing those tax cuts is always the liberal answer. In this case, the Times claims they “stand to widen the gap between the hyper-rich and the rest of America.â€? This year Congress will vote on the extension of President Bush’s tax cuts on income from dividends and capital gains, and on making permanent the repeal of the estate tax. For the liberal media, demonizing the rich is a powerful way to fight against those conservative initiatives. There’s good reason, though, to think it won’t work. That Times poll that showed how much faith Americans have in their income mobility also produced a striking result about taxes on “the richâ€?: Seventy-six percent of respondents said they opposed the estate tax.”

  134. What fun.

    I particularly like the way avaroo insists on backup docs and references etc and when presented with them by gordon and Paul, shoos them away because they’re not written by Americans or at least Europeans sensible enough to agree with him. Quite a sidestep.

    All that archness must be causing pain in some muscle or other avaroo.

    And re your befuddlement as to our bothering to compare and contrast your country and ours, you might have noticed our current government is buried somewhere in your national colon and our societal institutions and arrangements, always creeping your way, have in recent years begun galloping across the Pacific. Our deputy PM is a nuance free pro-American and should he ever ascend, some of us worry we’ll become a defacto 51st state but without the benefit of a vote (or even the illusion of a vote like the poor folks in Ohio). Many of us feel we have gone too far down that road already.

    Call us old fashioned.

  135. This pretty well debunks avaroos’s link.
    It’s by Brad Delong and addresses Donald Luskin’s nonsense:

    http://delong.typepad.com/sdj/2005/06/intellectual_ga.html

    Intellectual Garbage Pickup

    Yes, it’s time for our once-every-three months websurf over to Donald Luskin. Why? As a public service: somebody needs to lay down a marker that he simply does not know what he is talking about, and that anyone who believes anything he writes without very careful verification is asking for big trouble.

    And it is unbelievable. You don’t have to read a dozen paragraphs before you run across something so bats— ignorant that it should cause every National Review editor and writer to resign in shame, move to Rwanda, and take up a life of anonymous service to others.

    This time Luskin denies the existence of the entire discipline of statistics–the idea that a properly designed random sample can tell you important things about a much, much larger population:

    The Conspiracy to Keep You Poor and Stupid: The Times and the Journal cite many authoritative-sounding studies…. But to get an accurate picture… you’d have to track hundreds of millions of individuals…. [N]one of this is reliable… the Panel Study of Income Dynamics… tracks only 8,000 families out of a U.S. population of 295 million individuals.

    And then goes on to reveal that he has never eyeballed the time series on growth and inequality:

    Times of great prosperity have been associated with greater income inequality (for example, the 1920s), and conversely times of economic decline have been associated with greater equality (the 1930s). The lines of causality here are complex, and no doubt run in both directions: Prosperity is both the cause and the effect of inequality, and decline is both the cause and the effect of equality. So ideological advocates of income equality for its own sake ought to be careful what they wish for…

    The relationship between growth and inequality in the U.S. in the twentieth century? None–neither positive nor negative: inequality is high in the fast-growing 1920s and low in the faster-growing late 1950s and 1960s; inequality is not low but high in the depressed 1930s.

    Stupidest man alive.

  136. Glenn, had you read my link, you would know that the issues I raised are:

    1) the Panel Study of Income Dynamics database, an ongoing survey that tracks only 8,000 families out of a U.S. population of 295 million individuals.

    and

    2) to get an accurate picture of income mobility, you’d have to track hundreds of millions of individuals through time, monitoring changes across generations in such factors as their income, tax rates, wealth, lifestyle, and education. Looking back further than a couple of decades, robust statistics are hard to find in standard databases; you can’t ask all the individuals concerned, because many of them are deceased.

    If you are using statistics for the US that do not measure either in terms of time or numbers of people so that you can get a clear picture, then your reporting isn’t going to be very accurate.

    Comparing the US to other countries won’t work simply because a currect government of another country is politically aligned with the current US administration. It’s kind of a silly argument to even try to make.

  137. Glenn, as my link pointed out, there are basically 2 main problems with the link you referenced.

    1) the Panel Study of Income Dynamics database, an ongoing survey that tracks only 8,000 families out of a U.S. population of 295 million individuals. and

    2) to get an accurate picture of income mobility, you’d have to track hundreds of millions of individuals through time, monitoring changes across generations in such factors as their income, tax rates, wealth, lifestyle, and education. Looking back further than a couple of decades, robust statistics are hard to find in standard databases; you can’t ask all the individuals concerned, because many of them are deceased. So researchers end up relying on surveys of small samples of people, containing what they can recollect about their parents’ and grandparents’ economic circumstances. As a result, hard facts about economic mobility are elusive, and studies about it are approximate and subjective at best.

    If you have some reason that tracking 8,000 families out of a population of 295 million for basically only a 20 year period is sufficient to measure income mobility, then I would like to hear it.

    The fact that any government is politically aligned with any current US administration doesn’t mean that a comparison of vastly different populations makes sense. That’s kind of a silly argument to even attempt to make.

  138. “If you have some reason that tracking 8,000 families out of a population of 295 million for basically only a 20 year period is sufficient to measure income mobility, then I would like to hear it.”

    Fortunately, Brad DeLong has already done this

    http://delong.typepad.com/sdj/2005/12/donald_luskin_s.html

    Your point (taken from Luskin) really is a Stats 101 error. Basic sampling theory says a well-designed sample of 8000 is more than enough for reliable estimates. How do you think opinion polls work?

    There are more sophisticated arguments to be had, but anyone who makes an elementary error like this (and for Luskin, this is par for the course) can’t be regarded as a serious participant in the debate.

  139. Avaroo

    1 It was SJ, not me that provided the link.

    2 This thread appears to have narrowed focus to ‘income mobility’ when it began with a much broader concern about labour market conditions here changing to become more American in terms of the balance of power between employers and -ees. Many of us are worried about that and we are not suffering from mass dementia. Many of us also see it as only one component in a policy drift to US models, most of which are also of major concern (elective war for gain, antidemocratic terror laws, corporatisation and politicisation of media – including payola at home and abroad, loss of independence of bureaucracy, creation of expensive and unaccountable intel/security apparatus, decay of ethical behaviour in business, creeping influence of religion in public institutions, whitewashed national historical narratives, suppression of legitimate dissent, privatisation of public resources, greater implicit racism permitted in discourse, de-emphasis on provision of health and education to the needy, relentless use of ‘noble lies’ to sell policy or to evade the law… to name just a few)

    There are lots of things to admire about America, but we seem to be cherry picking the stuff that’s going to make life worse for most of us and better for just a few. You might see your country as something the rest of us should aspire to. As little as 6 years ago much of the world would have agreed with you. The sea change is due almost as much to Katrina as to Iraq. How are all those displaced people going by the way? Finding out is as hard as getting an accurate Iraqi body count.

    3 It’s a depressingly familiar tactic; when faced with a general argument which is hard to refute, demand minutiae and when it appears, zoom back to the general, claiming apples and oranges can’t be compared. They are both fruits, and the alternative is what… forget about it altogether?

    ‘doesn’t mean that a comparison of vastly different populations makes sense’

    So why demand the data, if it’s so useless?

    4 The march of our institutions and policy outcomes (and therefore the whole tenor of relations between Australians) toward US exemplars is the great unspoken issue of Australian political life right now; all the others tend to fall under it’s rubric. The deputy PM made an ‘all the way with the USA’ comment earlier this year. When Katrina struck about a week later he looked like a goose, but did our fearless media pursue the implications of his position? No they did not, which helped solidify my convictions about where our gatekeeper media is headed.

    5 Have a merry Xmas and a happy New Year!

  140. Glenn Condell Says: It was SJ, not me that provided the link.

    No, avaroo’s not making that mistake, he’s still referring back to gordon’s link.

    Apparently there aren’t any Republican Talking Points that can refute DeLong, so avaroo is forced to pretend my post isn’t there.

    The “ostrich” defence works sometimes, but it doesn’t work so well here.

  141. “Basic sampling theory says a well-designed sample of 8000 is more than enough for reliable estimates. How do you think opinion polls work?”

    Sorry but this isn’t a well-designed sample. That was my point.

  142. “This thread appears to have narrowed focus to ‘income mobility’ ”

    the current discussion is about income mobility.

    “Many of us are worried about that and we are not suffering from mass dementia.”

    Actually, I’d saying that worrying about the US when you’re considering your own situation does show a bit of dysfunctionality.

    “Many of us also see it as only one component in a policy drift to US models, most of which are also of major concern (elective war for gain, antidemocratic terror laws, corporatisation and politicisation of media including payola at home and abroad, loss of independence of bureaucracy, creation of expensive and unaccountable intel/security apparatus, decay of ethical behaviour in business, creeping influence of religion in public institutions, whitewashed national historical narratives, suppression of legitimate dissent, privatisation of public resources, greater implicit racism permitted in discourse, de-emphasis on provision of health and education to the needy, relentless use of ‘noble lies’ to sell policy or to evade the law… to name just a few)”

    Since you show so little understanding or even familiarity with the US, it’s doubly important that you just worry about your own situation. Fantasies about the US won’t help you.

    “You might see your country as something the rest of us should aspire to.”

    I don’t see the US in relation to your country in any way. Personally, I’d be horrified if all US pols could do was talk about Australia. Or any other country.

    “The sea change is due almost as much to Katrina as to Iraq. How are all those displaced people going by the way?”

    They’re leaving the country, haven’t you heard?

    “So why demand the data, if it’s so useless?”

    you seem confused again

    “Have a merry Xmas and a happy New Year!”

    you too.

  143. “Apparently there aren’t any Republican Talking Points that can refute DeLong, so avaroo is forced to pretend my post isn’t there.”

    democrats don’t generally use republican talking points, but I understand if you cannot refute my argument and just need to say something back

  144. “If you have some reason that tracking 8,000 families out of a population of 295 million for basically only a 20 year period is sufficient to measure income mobility, then I would like to hear it”

    this point still needs to be addressed, particularly the short time frame of the Panel study.

  145. “Sorry but this isn’t a well-designed sample. That was my point”

    Where did you make this point? And on what basis? Have you submitted your criticisms of the PSID sampling procedure for publication in a peer-reviewed journal? It is, after all, the basis of dozens of journal articles, and your criticisms,if valid, would be very important.

    Or would you prefer to withdraw this claim?

  146. Avaroo,

    QUOTE: Terje: Not likely. At least not minimum wage laws in the US. Most minimum wage workers in the US are in service industries, things like cleaning services, retail, things that you cannot export.

    RESPONSE: some of these services might simply not be done if the wage rate was too high. Home cleaning services can be readily insourced (ie done by the home owner) or done less often. So whilst some service jobs do not get exported with an increase in the minmum wage they may still disappear.

    In any case it was Ernestine point not mine. I was just indicating that his was not a revolutionary point.

    Regards,
    Terje.

  147. “Where did you make this point? And on what basis?”

    In my original post on the issue. Not only is the sample too small, but the study only looked at a very short time period, 20 years. That simply isn’t adequate.

  148. Terje, I think you missed my main point, which was that a huge number of minimum wage jobs are in the service sector and simply aren’t affected by outsourcing, because they cannot be done overseas. Home cleaning cannot be outsourced, it must be done by someone inside the country, it’s the same with retail jobs. Retail jobs won’t disappear, prices will simply go up for employers to cover the increased cost.

  149. avaroo, your point (from Luskin) about the sample size reveals Luskin’s complete ignorance of statistics, as has already been pointed out. I assume, therefore you are relying on your own knowledge of the subject.

    Perhaps you would care to calculate the standard error associated with income estimates from a sample of 8000 and explain why you think it is too large for useful analysis. Assume, for argument’s sake, that the population coefficient of variation is 1.5 (or substitute your own value, if you prefer). Or, if you have a different argument, spell it out.

    As regards the time-frame, a couple of responses
    (i) retrospective questions asked of new entrants to the panel extend the time-frame
    (ii) can you nominate an alternative dataset with a longer timeframe, or are you just saying that we can’t know anything for sure.

  150. I understand that you don’t agree that 8,000 out of 295 million is simply not adequate. I just disagree. Hopefully you can do that politely.

    “As regards the time-frame, a couple of responses
    (i) retrospective questions asked of new entrants to the panel extend the time-frame”

    I’ll reiterate the point:

    you’d have to track hundreds of millions of individuals through time, monitoring changes across generations in such factors as their income, tax rates, wealth, lifestyle, and education. Tracking through time does not mean a 20 year period with new entrants every year. The Panel Study does not do that.

    “(ii) can you nominate an alternative dataset with a longer timeframe, or are you just saying that we can’t know anything for sure.”

    and again:

    Looking back further than a couple of decades, robust statistics are hard to find in standard databases; you can’t ask all the individuals concerned, because many of them are deceased. So researchers end up relying on surveys of small samples of people, containing what they can recollect about their parents’ and grandparents’ economic circumstances. As a result, hard facts about economic mobility are elusive, and studies about it are approximate and subjective at best.

    As to a better method of determining income mobility:

    “Perhaps the best research method for getting our arms around the slippery topic of income mobility is simply to take a poll, and ask people how they feel about it. The New York Times itself took such a poll, and its optimistic results are strikingly at odds with the paper’s gloomy conclusions. Eighty percent of respondents said “it’s still possible to start out poor in this country, work hard, and become richâ€?—up from 57 percent in 1983. Twenty-five percent said they believed their children’s standard of living would be “much betterâ€? than their own—up from 18 percent in 1994. Forty-six percent said hard work is “essentialâ€? for getting ahead in life—up from 36 percent in 1987.”

  151. Avaroo,

    QUOTE: Terje, I think you missed my main point, which was that a huge number of minimum wage jobs are in the service sector and simply aren’t affected by outsourcing, because they cannot be done overseas.

    RESPONSE: Thats funny, I thought I actually acknowledged your point. If it was missed then let me acknowledge now that many jobs (eg retail) can not be done abroad.

    Regards,
    Terje.

  152. Avaroo,

    A higher minimum wage may still make some retail jobs disappear. For instance if the minimum wage is too high many restaurants may swap from table service to counter service.

    Regards,
    Terje.

  153. Terje,

    A lower minimum wage (and other wages which we call award wages Down-Under) may make customers disappear. Simple reason: no money to spend.

  154. “I understand that you don’t agree that 8,000 out of 295 million is simply not adequate. I just disagree. Hopefully you can do that politely.”

    Avaroo, sampling theory is not a matter of opinion or taste. You can’t “just disagree”. Luskin is wrong and that is all there is to it. If you have not studied statistics enough to understand the issues, you should accept the advice of those who have.

    If you can find a competent statistician who endorses Luskin’s criticims of the PSID, feel free to point this out. Otherwise, I think further discussion is pointless.

  155. Avaroo and John,

    When I learnt statistics we would do calculations along the following lines.

    Lets say that 80% of the sample of 8000 are more than 4 feet tall and 20% are less than 4 feet tall (or exactly 4 feet tall).

    We might then form a interval Hypothesis that in the real population the number of people taller than 4 foot will be between 79% and 81%.

    If we sampled the full population (say 295 million) then we would get x% of ths population are more than 4 feet tall (ie the real answer).

    We could calculate that our Hypothesis failed (ie x was not in the range 79% to 81%) due to pure statistical chance (ie unlucky sampling).

    When such calculations of Hypothesis error are done it is found (from my recollection) that as the sample size increases the probability of error declines. However it is also found that beyond a sample size of about 1000 the improvement in accuracy (decrease in probability of error) is very small.

    That is to say increasing the sample size will decreases the chance that your Hypothesis is wrong (due to bad luck sampling) but beyond a certain point it will only make a tiny difference.

    One might call this the diminishing returns of sampling size.

    Regards,
    Terje.

  156. Lukin attended one year of Yale before he dropped out. What ‘credentials’ (not those that come in cereal packets) are you referring to?

    Holy crap on a stick man! If every econometrician in the world had access to 8,000 observations for a population of 295million, then their prayers would have been answered! Even under the loose assumption of weak dependence, correcting for heteroskedasticity using covariance consistent estimators, this data and conclusions found from it are going to be statistical truth.

    Don’t know what I’m on about? Why don’t you take some time and find out a little about the study of statistics.

  157. You can easily look into Luskin’s background and employment record if you are interested, alpaca. I do understand that what some people disagree with Luskin on is his political views.

  158. “Sorry jquiggen, but I’d put Luskin’s credentials up against those of anyone here.”

    Presumably you’d also prefer medcial treatment from someone who dropped out after one year of medcial school rather than from a qualified doctor.

  159. avaroo says: “Sorry jquiggen, but I’d put Luskin’s credentials up against those of anyone here.”

    Look avaroo, when Brad DeLong (professor of economics at U.C. Berkeley, a research associate of the National Bureau of Economic Research, a former deputy assistant secretary at the U.S. Treasury) labels Luskin as the “stupidest man alive”, and goes on to demonstrate that Luskin is ignorant of high-school concepts such as statistics, and hasn’t even look at the data he’s using to prove a point, that’s a strong hint that there’s a serious problem with your source.

    avaroo says: “You can easily look into Luskin’s background and employment record if you are interested, alpaca.”

    Have you actually done this yourself, avaroo? If I do it the standard way, and google the words “Donald Luskin bio”, the top link is this one:

    http://en.wikipedia.org/wiki/Donald_Luskin

    Donald Luskin is the Chief Investment Officer for Trend Macrolytics LLC, an investment consulting firm.

    Luskin also writes a blog, The Conspiracy to Keep You Poor and Stupid, which is also the title of his forthcoming book. As his blog says, his endeavor is to explain how “Big government, big business, big media and big academia block your road to financial freedom — and tell you it’s for your own good.” He has written two other books, Index Options and Futures: The Complete Guide and Portfolio Insurance: A Guide to Dynamic Hedging. His self-written biography states, “Attended Yale in 1973-1974; dropped out to rejoin the real world as soon as possible.” Luskin also writes a column for National Review Online, discussing financial, economic and political matters.

    Much of the blog is spent detailing and explaining how economic facts, figures, and trends are distorted by politicians, pundits, and the media. He has a particular animosity towards the New York Times, especially columnist Paul Krugman, and former public editor Daniel Okrent. This animosity has been abated recently, after Okrent, in a ‘farewell’ to the New York Times, accused Paul Krugman of “shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.”

    In August, 1999, at the top of the tech bubble, Luskin and David Nadig started the MetaMarkets Open Fund, the first mutual fund, according to media reports in the breathless and hyperbolic style of the times, to publish trades and list its holdings on the web. This “transparency” and “openness,” according to Luskin, was a step forward in the financial world equivalent to the political revolutions and international democratic tranformations of the 90’s, leveling the playing field for the average investor and overthrowing financial elites everywhere.

    In particular, Luskin was dismissive of naysayers who talked of bubbles and P/E ratios, contending the world was entering an unprecedented era of innovation and prosperity, and that the market boom had only begun.

    At its peak, Metamarkets Open Fund received 16 million dollars in investments, and Luskins’ biggest bets included notorious companies like MCI WorldCom and Lucent Technologies. Unfortunately, Open Fund lost more than 75% of its value for Luskins’ level field playing average investors before being liquidated in the summer of 2001, freeing Luskin for full time freelance writing and blogging

    Luskin is the de facto leader of the “Krugman Truth Squad”, a group of National Review Online writers dedicated to detailing and rebutting what they consider the lies and distortions of Krugman. In 2003, Krugman accused Luskin of personally stalking him. Luskin defended himself against the charge here. The issue about whether Krugman had been stalked by Luskin became controversial: The New Yorker published interviews with both men on the issue.

    Critics, especially Berkeley economics professor Brad DeLong, argue that Luskin knows very little about economics and makes frequent errors. Many of Luskin’s supporters counter that academic economists have lost sight of the real world and/or are blinded by punditry. Angry Bear is a blog that is often critical of Luskin (and supply-siders like Larry Kudlow). DeLong publishes an “Intellectual Garbage Pickup” every quarter with errors he finds in Luskin’s work, and recently he has called Luskin “The Stupidest Man Alive.” [1] Some claim that Luskin’s response was to put a quote from DeLong on his blog’s homepage; actually, that quote had been there since January 2004. It comes from an interview with Delong, who named Luskin when asked who is his “worst blogging experience.”[2] Some contend that DeLong’s deep resentment also stems from when Luskin alerted the University of California Regents to many intellectual property violations on DeLong’s website.

  160. The wikipedia story can be accurately summarised thusly:

    Donald Luskin writes stuff about economics, but has no qualifications. He runs an investment company that loses money. Luskin is a Republican partisan.

  161. Given his hostility to academic economists and his decision to “rejoin the real world as soon as possible” you have to wonder what grades Luskin was getting in Economics.

  162. Hey, US conservatism is a religion, not a science. Gotta take it on faith, man, not grades.

    http://www.huffingtonpost.com/rick-perlstein/i-didnt-like-nixon-_b_11735.html

    I get the question all the time from smart liberal friends: what is conservatism, anyway? They’re baffled. “As far as I can tell, anything someone on the right does is, by definition, ethical. It’s not about the act, or even the motivation. It’s about who’s perpetrating it.” It has become the name for a movement that can scream from the rooftops that every Supreme Court nominee should have an expiditious up-or-down vote, then 15 seconds later demand tortuous proceduralism when that nominee is Harriet Miers. Flexibility is the first principle of politics.

    I’m trying to make here an argument not about instances, but about a structure of thought. It is the structure of thought betrayed, I think, by Ahmed Chalabi, explaining his deliberate deception of U.S. intelligence: “We were heroes in error.”

    Is Chalabi, or Jerry Falwell, a “principled conservative” or a “pragmatic conservative.” That’s a question I’d like to pose to you all. My head hurts just thinking about it.

    This part of my talk, I imagine, is long after the point a constitutive operation of conservative intellectual work has clicked on in your minds: the part where you argue that malefactor A or B or C, or transgression X or Y or Z, is not “really” conservative. In conservative intellectual discourse there is no such thing as a bad conservative. Conservatism never fails. It is only failed. One guy will get up, at a conference like this, and say conservatism, in its proper conception, is 33 1/3 percent this, 33 1/3 percent that, 33 1/3 percent the other thing. Another rises to declaim that the proper admixture is 50-25-25.

    It is, among other things, a strategy of psychological innocence. If the first guy turns out to be someone you would not care to be associated with, you have an easy, Platonic, out: with his crazy 33-33-33 formula–well, maybe he’s a Republican. Or a neocon, or a paleo. He’s certainly not a conservative. The structure holds whether it’s William Kristol calling out Pat Buchanan, or Pat Buchanan calling out William Kristol.

    As the Internet’s smartest liberal blogger, Digby, puts it, tongue only partially in cheek: “‘Conservative’ is a magic word that applies to those who are in other conservatives’ good graces. Until they aren’t. At which point they are liberals.”

  163. SJ, people who write articles with the phrase “Stupidest Man Alive” aren’t taken very seriously by most people. If you cannot make your case without such vitriol, then people wonder what’s wrong with you. Serious people don’t do that.

    I’ll just point out something in your own wikipedia link (which by the way, wikipedia isn’t really a definitive source for anything, did you catch the latest John Siegenthaler fracas?)

    “Many of Luskin’s supporters counter that academic economists have lost sight of the real world and/or are blinded by punditry.”

    I’d add blinded by political demagoguery as well as punditry. Partisans often twist numbers to mean what they’d like them to mean. Luskin points that out. Partisans don’t like it.

  164. “I get the question all the time from smart liberal friends: what is conservatism, anyway?”

    Huffington appears to confuse conservatism with republicanism. In fact, there are conservative democrats and liberal republicans. I find that many people outside the US confuse the two terms, and don’t recognize the enormous numbers of people who vote for both parties, but here we have Huffington doing it inside the US.

    I’ll give you an example: I am pro-choice but anti-Roe vs. Wade. I think the people should decide the abortion matter, not the USSC. I’m against issue specific vetting of USSC nominess of either party. I’m anti-gun and anti-school choice. I believe the founding fathers meant to prevent the federal government from establishing a national religion as you’d find in Great Britain. I do not believe they meant for people not to be able to openly practice their religion, whatever it is.

    I do not believe we should be talking about the Vietnam War. I didn’t care that Clinton didn’t serve and I don’t care that Bush didn’t either.

    But from an economic standpoint, I’m very libertarian, very much a free market supporter, pro-business. I am against social programs that keep people in poverty.

    My voting record is more democratic than republican, Reagan, Bush, Clinton, Clinton, Gore and Kerry.

    It’s not quite as black and white as some people think it is. There are many people with very mixed records, who vote the candidate, not the party.

  165. “Some contend that DeLong’s deep resentment also stems from when Luskin alerted the University of California Regents to many intellectual property violations on DeLong’s website.”

    I’d never heard this before but if it’s true then it might explain DeLong’s seemingly personal rather than professional disagreement with Luskin and it might explain DeLong’s inability to even mention Luskin’s name without some pretty heavy emotional baggage.

  166. Avaroo, I think it’s highly probable that “some contend”=”Donald Luskin contends”, and that Luskin himself added this sentence to the Wikipedia entry. Or maybe it was the UC Regents :-).

    In any case,
    (i) Luskin’s (self) reported behavior is pretty despicable
    (ii) Obviously the claim makes no sense – Luskin and DeLong must have been in dispute before Luskin made these allegations

    More importantly, the fact that Luskin is totally innumerate is true, whatever DeLong’s motives in pointing it out so regularly. This thread has illustrated it.

  167. Luskin has a good point about ivory tower types. It appears that there’s bad blood on both sides (DeLong and Luskin) which makes what both say suspect. In any case, Luskin’s point that a study that covers so few years really isn’t adequate is a good one.

  168. Avaroo,

    If you mean to say that you, Avaroo, believe Luskin has a good point about ivory tower types and it appears to you, Avaroo, that there’s bad blood on both sides (Delong and Luskin) which makes what both say suspect and you, Avaroo, believe Luskin’s point that a study that covers so few years really isn’t adequte is a good one, then just say so. Nobody would have to bother responding for there is no law which prevents anybody from believing whatever they like. If you were to believe, and I am not saying you do, that the moon is a piece of Swiss cheeze, then that’s fine. But writing as if it would be a fact would cause a major problem and endless posts.

    Incidentally, intellectual honesty seems to be getting so popular that even the advertising industry has taken note of. In Australia there is an add for beer which goes something like this: This is an add, this is an expensive add, it better sells a lot of beer. I like it.

  169. “Luskin has a good point about ivory tower types.”

    Yeah what would they know about real financial markets?

    “Keynes’ brilliant record as an investor is demonstrated by the publicly available data of a fund he managed on behalf of King’s College, Cambridge.

    From 1928 to 1945, despite taking a massive hit during the Stock Market Crash of 1929, Keynes’ fund produced a very strong average increase of 13.2% compared with the general market in the United Kingdom declining by an average 0.5% per annum.”

    http://en.wikipedia.org/wiki/Keynes#Investor

  170. I have somewhere heard that Keynes’s skills as an investor were learned through a hard apprenticeship, during which he lost a spectacular amount of money for Kings. Quite possibly his innate skills were quite typical, only few of his competitors had the opportunity to develop theirs.

  171. P.M.L: “I have somewhere heard that Keynes’s skills as an investor were learned through a hard apprenticeship, during which he lost a spectacular amount of money for Kings. Quite possibly his innate skills were quite typical, only few of his competitors had the opportunity to develop theirs.”

    Question 1: Should a similar inference be drawn about all financially successful people?

    Question 2: If the answer is Yes to Question 1, what would be the logical consequence for a ‘fair’ income distribution?

    Question 3: If the answer is No to Question 1, why pick on Keynes?

  172. Yes Ernestine that is what I not only meant to say, it’s also what I did say the first part of your post). Congratulations. The second part of your post is just drivel and we both know I don’t do drivel. Sorry.

  173. “I have somewhere heard that Keynes’s skills as an investor were learned through a hard apprenticeship, during which he lost a spectacular amount of money for Kings.”

    He started managing King’s funds just before the crash of 1929.

    Whil King’s is the only public record of Keynes’ investments, he died an extremely wealthy man.

  174. Avaroo says:

    1. “Luskin has a good point about ivory tower types.”

    2. “Luskin’s point that a study that covers so few years really isn’t adequate is a good one.”

    I disagree with statements 1 and 2. However, in a subsequent message Avaroo advised that these statements are his personal believes. Of course I accept his right to his personal opinions.

    3. “It appears that there’s bad blood on both sides (DeLong and Luskin) which makes what both say suspect.”

    I don’t understand the sentence in 3. However, I could understand a slight different sentence, namely: It appears that there’s bad blood on both sides (DeLong and Luskin) and if this were to be found to be the case then it might make what both say suspect.

    I don’t have any interest in having the uncertainties in the revised sentence in 3. resolved because DeLong is not essential to the crucial question on statistics.

  175. EG, on your questions to me:-

    (1) I wasn’t drawing an inference so much as framing a hypothesis. I know full well that there isn’t sufficient evidence to draw that inference. On the other hand, there doesn’t seem to be enough to support the idea that Keynes was an outright financial genius either.

    (2) You are venturing into areas of personal value judgments here. I do have personal values I could apply, but it seems quite counterproductive to do that in a forum like this.

    (3) The answer to this is easy – Keynes was the particular case that just came up on this thread.

  176. PML:

    True, I did state your initials and hence my questions appeared to be directed at you. Its done, so its my loss to have excluded the possibility of getting answers in general.

    The statement: “Quite possibly his innate skills were quite typical, only few of his competitors had the opportunity to develop theirs.” is a sentence which comes close to the proposition that: While skills and work are necessary conditions for wealth acquisition (excluding inheritance), they are not sufficient. Luck is involved too.

    Given this inference, which I believe is quite reasonable, my questions are directed at logical consistency rather than personal value judgements.

    I am not quite sure whether your intended meaning re Keynes being a genious or not is limited to his investment activities in financial markets. The important point in this forum seems to me to be that Keynes provides a good example which contradicts the apparent perception that academics (‘ivery tower’) are ignorant of what happens in the ‘real world’ (which on this occasion includes finacial markets).

  177. avaroo, given your earlier injunctions to politeness, I’m unimpressed by your recent contributions. I imagine they reflect a realisation that on all substantive points your claims have been demolished.

    Next time, I suggest you choose a source who has at least completed college – there are plenty of conservatives/free-marketeers more credible than Luskin (indeed there are few who are less so).

  178. You’re free, of course, to imagine anything you like. There’s never a reason for rudeness on the internet.

    And as impressed as I am with your “academic” credentials, I’m sure you won’t mind if I select my own sources.

  179. Am I missing something? Does having “completed college” somehow confer insight or perceptiveness onto someone? Is there a group in society who actually consider the opinion of one who has “completed college” to be of more weight than the rest?

  180. Steve, when someone (Luskin) holds himself out as an expert in a particular area (and Avaroo cites that person’s “credentials” in that specific area as a reason to believe their statements) then it is relevant to note that the only verifiable credential that person has is running a mutual fund that lost 75% of its investors money.

  181. Ah, thanks Ian. I see, this Luskin has very little to jerk his thumb at. Agree with you totally on his financial record, but I don’t see how Luskin’s “completing” or otherwise of college has any bearing on his natural abilities (or lack of them)?

  182. Steve, if we were discussing his opinion of say, plumbing, sports results or 19th Century Russian novels I’d agree that his Uni record is completely irrelevant.

  183. Hmmm, ten to fifteen year old reports which demonstrate that the more education someone has the higher their salary.

    Very interesting, but isn’t the issue related to an opinion somehow having more weight if the giver of the opinion has “completed college”?

  184. steve at the pub Says:

    Very interesting, but isn’t the issue related to an opinion somehow having more weight if the giver of the opinion has “completed college�?

    No, the issue is this:

    Sorry jquiggen, but I’d put Luskin’s credentials up against those of anyone here.

    Luskin has no credentials:

    1. That which entitles one to confidence, credit, or authority.
    2. Evidence or testimonials concerning one’s right to credit, confidence, or authority: The new ambassador presented her credentials to the president.

    Luskin doesn’t have a degree or anything else which could be interpreted as a credential.

    Luskin’s opinions have exactly as much weight as yours or avaroos, or mine. It’s pointless to appeal to Luskin as an authority, because he isn’t one. Understand?

  185. I agree that this Luskin appears to be lacking in the credentials department.

    Perhaps I grabbed the wrong end of the stick by assuming Luskin’s views were being granted less weight for the trite reason that he had not completed college.

  186. Luskin’s views are granted less weight by some people for the simple reason that he disagrees with just about everything Paul Krugman has to say. (and Luskin is hardly alone in this) Luskin actually backs up what he says though.

  187. Avaroo, lots of economists disagree with Krugman and are taken seriously by people like me and Brad DeLong. Luskin isn’t taken seriously by any economist I know, on either side of these debates, because he clearly doesn’t know what he is talking about.

  188. DeLong appears to have a personal issue with Luskin, but whomever uses the term “idiot” first in a debate is usually the loser, and it looks like De Long has that sewn up. It’s hard to take anyone using name-calling as a tactic in a debate very seriously.

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