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Paul Craig Roberts
VDARE
I admire Joseph E. Stiglitz, because he has a social conscience and a sense of justice, the absence of which turns economists into monsters. Despite his virtues and Nobel Prize, Stiglitz sometimes falls down as an economist. Readers of my new book, How The Economy Was Lost, will be aware that I take him to task for the Solow-Stiglitz production function, which seriously misleads economics about the scarcity of nature’s capital.
Another of Stiglitz’s shortcomings, one that he shares with most economists, is his habit of reifying the market economy. The market is a social organization. The results of market activity reflect the behavior of the human participants in the market. When economists reify the market, they attribute the behavior, ethics, and morality—or lack thereof—of humans to the market itself. Thus, Stiglitz describes human failures as “market failures,” and he asks in his new book, Freefall, “why didn’t the market exercise discipline on bad corporate governance and bad incentive structures?”
Social institutions are inanimate. They do not possess life and cannot impose good outcomes on human action.
Libertarians also reify markets, but instead of blaming markets for human failures, they imbue the market with human virtues and even with the super-human virtue of producing results that human intelligence cannot improve upon. Economists’ “risk models” for which Nobel Prizes have been awarded and Federal Reserve chairman Alan Greenspan attributed the social institution with economic wisdom beyond man’s.
It is likely that the practice of reifying the market economy developed as a form of shorthand. It was convenient to say that the market did this and that rather than to have to describe the human interactions that produced the results. The market was transformed from an abstraction into a life form and became the actor instead of the humans operating within the institution.
If the outcomes are good, libertarians attribute the good results to the market’s virtues; if bad, libertarians blame human interference—government regulation. Economists of Stiglitz’s persuasion see it in the opposite way. Good results are produced by regulation; bad results are the result of allowing the market to make decisions on its own. Continue reading Economics in Freefall
Don Lee and Alejandro Lazo
Los Angeles Times
FOR THE RECORD:
This article incorrectly says the government will report on the May job market Friday. It will report on the June job market.
Reporting from Washington and Los Angeles —
A fresh batch of weak economic news Thursday heightened concerns about the staying power of the fledgling recovery, with more uninspiring news expected Friday when the government reports on the May job market.
The number of pending home sales plunged 30% in May from April, to the lowest level since at least 2001, an industry group reported Thursday, reflecting a larger-than-expected fallout from the expiration of the federal tax credit for home buyers.
Also released Thursday, a closely watched index of factory activity suggested that manufacturing, which has been leading the economic recovery, may be losing momentum. In other reports that were more downbeat than expected, U.S. car sales dropped in June from May’s level, and first-time jobless claims increased last week from the week before. Continue reading Economic rebound may be losing ground, data show
George F. Will
Washington Post
Concerning the job numbers from May, one can almost echo Henry James’s exclamation after examining letters pertaining to Lord Byron’s incest: “Nauseating perhaps, but how quite inexpressibly significant.” Except that the May numbers’ significance can be expressed: A theory is being nibbled to death by facts.
Private-sector job [...]
This is a long, but interesting bit of research. Sadly unless we the citizens of this country don’t stop the direction that this country is moving towards, the rest of the country will follow California’s path.
Steven A. Camarota, Karen Jensenius
CIS
Between 1970 and 2008 the share of California’s population comprised of immigrants (legal and illegal) tripled, growing from 9 percent to 27 percent.1 This Memorandum examines some of the ways California has changed over the last four decades. Historically, California has not been a state with a disproportionately large unskilled population, like Appalachia or parts of the South. As a result of immigration, however, by 2008 California had the least-educated labor force in the nation in terms of the share its workers without a high school education. This change has important implications for the state.
Among the changes in California:
- In 1970, California had the 7th most educated work force of the 50 states in terms of the share of its workers who had completed high school. By 2008 it ranked 50th, making it the least educated state. (Table 1a)
- Education in California has declined relative to other states. The percentage of Californians who have completed high school has increased since 1970; however, all other states made much more progress in improving their education levels; as a result, California has fallen behind the rest of the country. (Table 1b)
- The large relative decline in education in California is a direct result of immigration. Without immigrants, the share of California’s labor force that has completed high school would be above the national average.
- There is no indication that California will soon close the educational gap. California ranks 35th in terms of the share of its 19-year-olds who have completed high school. Moreover, one-third (91,000) of the adult immigrants who arrived in the state in 2007 and 2008 had not completed high school.2
- In 1970 California was right at the national average in terms of income inequality, ranking 25th in the nation. By 2008, it was the 6th most unequal state in the country based on the commonly used Gini coefficient, which measures how evenly income is distributed. (Tables 2a and 2b)
- California’s income distribution in 2008 was more unequal than was Mississippi’s in 1970. (Tables 2a and 2b)
- While historical data are not available, we can say that in 2008 California ranked 11th highest in terms of the share of its households accessing at least one major welfare program and 8th highest in terms of the share of the state’s population without health insurance. (Tables 3 and 4)
- The large share of California adults who have very little education is likely to strain social services and make it challenging for the state to generate sufficient tax revenue to cover the demands for services made by its large unskilled population. Continue reading Immigration and the New California
Here is a brief letter to the Denver Post. Pretty much describes the situation that both Heartwood and I have experienced as contractors, business owners and professional tradesmen. Heartwood is in the south east and I am in California.Very few parts of the country have not experienced it.
My neighbor is a lather. Last year he traveled [...]
Virgil Goode
Front Page Mag
With 10% unemployment, one would think that the government would consider lowering the number of green cards issued to foreign workers until Americans were back on their feet. Amazingly, recently released data from the Department of Homeland Security shows that we have actually increased immigration. Far from reflecting supply and demand, our legal immigration numbers continue to climb no matter the state of the national economy.
The latest figures come from fiscal year 2009. The fiscal year began on October 1, 2008, which is when our economic collapse began and continued through September of 2009. Over five million Americans lost their jobs over that period.
America issued 1,130,818 permanent green cards, 808,478 of which were given to immigrants of working age. This is an increase over 2008 and 2007. Excluding the extra green cards given after the 1986 amnesty, this was the second highest number of green cards issued since 1914. From 2000 though 2009, we issued 10,299,430—the highest decade in American history. Continue reading Unemployment and the Immigration Glut
RTTNews
First-time claims for unemployment benefits saw a modest decrease in the week ended May 22nd, according to a report released by the Labor Department on Thursday, although economists had expected a somewhat steeper decline.
The report showed that initial jobless claims fell to 460,000 from the previous week’s revised figure of 474,000. Economists had been expecting jobless claims to fall to 455,000 from the 471,000 originally reported for the previous week.
With the decrease, jobless claims partly offset the notable increase seen in the previous week, although they remain well above recent lows.
The Labor Department also said that the less volatile four-week moving average edged up to 456,500 from the previous week’s revised average of 454,250. Continue reading Weekly Jobless Claims Show Modest Drop To 460,000
Dave Gibson
The Examiner
On Wednesday, Maricopa County Sheriff’s deputies raided Ameri-Fab Inc., located on North 21st Avenue in Phoenix. The operation was the result of a six-month investigation, after receiving a tip from a former employee that the company was hiring illegal aliens with false identification.
One illegal alien was found by deputies, hiding inside [...]
Dave Gibson
The Examiner
Last week, after a six month investigation, Maricopa County Sheriff’s deputies raided Lasermasters in Phoenix, and arrested 24 illegal aliens suspected of felony identity theft.
The investigation began after the sheriff’s office received a tip on their illegal immigration hotline. Deputies seized employment records, and believe that Lasermasters was actually harboring [...]
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