- I finished reading Sudhir Venkatesh’s Gang Leader for a Day: A Rogue Sociologist Takes to the Streets, an extraordinary ethnography of life and economy in Chicago’s Robert Taylor Home projects. Venkatesh is refreshingly candid about every aspect of his study, from how the crack economy works (for some but not for many others) and how life in the projects doesn’t (at least as the projects were created to “store” the poor population of Chicago) to the hustle of academic work (which brings researchers like Venkatesh much closer to J.T. and the other gang members he studied).
- I was reminded, once again, that mainstream economists have absolutely nothing to offer in terms of fixing the current economic mess. For them, government programs are the problem, not the solution.
“Growth doesn’t come from big federal programs,” says John H. Cochrane of the University of Chicago. “The government didn’t tell us” to create the vast variety of profitable businesses on the Internet, but “it did tell us to buy houses and look what that got us.” . . .
“The fundamentals are there. We have had a financial panic, but in the long run, growth is determined by businesses with great ideas, and we still have plenty of those. Now, it’s perfectly possible we’re in for a miserable decade but only if the government screws it all up, with high tax rates, chaotic tax rates, or if we suffer as a result of the overhang of government debt.”
And then there are the Andrew Caplin’s of the world who believe that the current losers should seek to cater to the rich and provide them “artisanal services.”
- Frank Rich demonstrates, once again, that the United States still has the “best Congress money can buy.”
The Great Depression ended the last comparable Gilded Age, of the 1920s, and brought about major reforms in American government and business. Not so the Great Recession. Last week, as the Fed’s new growth projections downsized hope for significant decline in the unemployment rate, the Commerce Department reported that corporate profits hit a record high. Those profits aren’t trickling down into new jobs or into higher salaries for those not in the executive suites. And the prospect of serious regulation of those at the top of the top — the financial sector — is even more of a fantasy in the new Congress than it was in its predecessor.
- The Irish have taken to the streets to protest against the current austerity plans to repay Europe’s bankers.
The protests centered on a milelong march along the banks of the River Liffey in central Dublin to the General Post Office building on O’Connell Street, the site of the battle between Irish republican rebels and British troops in the Easter Uprising in 1916 — an iconic event that many in Ireland regard as the tipping point in Ireland’s long struggle for independence.
The choice of venue for the protests by the Irish Congress of Trade Unions, coordinating the march through the city, reflected the mood of anger, dismay and recrimination in the wake of the economic shocks of the past 10 days. Those shocks have been the culmination of two years in which the economy has shrunk by about 15 percent, faster than any other European economy.
- Peruvian president Alan Garcia, whose unpopularity rating has risen to 62 percent, concludes that Peruvians are just plain melancholy.
“We are what we are: sad, distrustful. . .We have a natural lack of trust.”
- Mainstream economists, like Oliver Hart and Luigi Zingales, continue to believe that the magic of “the market” will prevent future financial crises.
how do we create an effective early-warning system? And who should determine the appropriate amount of long-term debt and capital? And how do we ensure that clever financial engineering doesn’t sabotage any such requirement? The answer is to delegate these tasks to the market.
In other words, we continue to live in a Mad Max world, and not just in Australia.