As the old saying goes, the main problem with capitalism is capitalists. In this spirit Robert J. Samuelson looks at how pay-practices and risk-taking in the financial sector have led to the mismatch of huge salaries and financial failure.
Once you've read Mr. Samuelson's column, I recommend that you read this article by James Surowiecki. In that piece you'll see that Mr. Surowiecki discusses how Wall Street pay-practices actively encouraged the irresponsibility that led to the subprime mortgage crisis.
Mr. Kuhn's book explains why white men abandoned the Democratic party for the Republican party. It's hard to dispute Mr. Kuhn's claim that the Democrats cannot hope to build a lasting majority unless they rebuild their support among white men.
For an introduction to the contents of the book, I suggest going to this page and downloading the interview (MP3, 15.2 MB) with Mr. Kuhn.
E. J. Dionne, Jr. admonishes Democrats not to forget the white working class in the coming election.
Here's a telling excerpt:
"Working class" seems an antique term, but the people it describes still exist, more now in the service industries than in manufacturing. Demographers often use education levels as a surrogate for class position, and the past three decades have not been kind to Americans who are not college graduates.
For white male high school grads, average wages stood at $18.44 an hour (in constant 2006 dollars) in 1979. They dropped to $16.06 an hour in 1995. There was then a brief upturn -- wages for such men hit $17.49 in 2002 -- but by 2006, their hourly earnings had fallen to $17.31. White female high school graduates have gained ground, but their wages have recently stagnated too. In 1979, such women earned $11.75 an hour. Their wages peaked at $13.42 in 2003, but dropped to $13.08 in 2006. Similar patterns, at somewhat higher wage levels, are visible over the years for men and women who attended college but didn't graduate.
Mr. Dionne is hardly the first person to advise the Democrats to shore up their support within some segment of white voters. Take a look at look at my next post for information about a book on Democrats and white male voters.
This recent column by Jacob Sullum of Reason is worth reading in conjunction with Robert J. Samuelson's latest effort to prod us into a serious discussion of entitlement spending. (I blogged Mr. Samuelson's column in my previous post.)
Mr. Sullum's column brought to my attention a recent speech by David M. Walker, the Comptroller General of the United States. In that capacity Mr. Walker is the head of the U.S. Government Accountability Office, and thus he can be expected to know a thing or two about entitlement spending. You can use this link to download the text of Mr. Walker's speech (PDF, 124 KB).
Here's a mind-boggling excerpt to keep you awake at night:
Believe it or not, the federal government's total liabilities and unfunded commitments for future benefits payments promised under the current Social Security and Medicare programs are now estimated at $53 trillion, in current dollar terms, up from about $20 trillion in 2000. This translates into a defacto mortgage of about $455,000 for every American household and there's no house to back this mortgage! In other words, our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases.
The Medicare program alone represents about $34 trillion of our current $53 trillion fiscal gap. If there is one thing in particular that could bankrupt America, it's runaway health care costs. And don't forget, the first "baby boomers" will begin to draw their early retirement benefits under Social Security in a couple of weeks! And, just three years later, they will be eligible for Medicare. When "baby boomers" begin to retire in big numbers, it will bring a tsunami of spending that, unlike most tsunamis, will never recede.
The prescription drug benefit alone represents about $8 trillion of Medicare's $34 trillion gap. Incredibly, this number was not disclosed or discussed until after the Congress had voted on the bill and the President had signed it into law. Generations of Americans will be paying the price with compound interest for this new entitlement benefit. In many ways, the 2003 Medicare prescription drug episode arguably represents government "truth" and "transparency" at its worst. Unfortunately, based on adding the prescription drug benefit and other spending and tax actions, the federal government seems to be ignoring the first rule of holes in connection with its fiscal affairs. Namely, when you're in a hole, stop digging!
If trillions of dollars aren't big enough to get your attention, believe it or not, in fiscal 2007 over 62 percent of the federal budget was on "auto-pilot" and this percentage is on the rise! Shockingly, the major functions expressly envisioned by our Founding Fathers as a proper role for the federal government things like national defense, homeland security, foreign policy, the treasury function, the federal judiciary, the Congress and the Executive Office of the President are in the remaining 38 percent of the federal budget! And this portion of the budget is set to get squeezed.
Mr. Walker's speech was supposed to roll out a new report intended to instruct the American people about the fiscal challenges in our future. An abstract is available here, and that page contains a link to a PDF of the full report.
Here's an amusing, though not entirely improbable, bit of political reasoning from Jonathan Chait:
Hillary Clinton is toast. Before Iowa, Clinton's drawbacks were that some voters didn't like or trust her. Obama's drawbacks, in addition to a lack of experience, were that some voters didn't take him seriously, didn't think he was for real, didn't know much about him, didn't think he could attract white voters. Clinton's drawbacks cannot be assuaged. Obama's could if he wins a state, especially a disproportionately white state.
Well, Obama has won a state. Now he goes to New Hampshire, which is an open primary far better suited than Iowa to a movement-based campaign with strong independent appeal. Then he goes to South Carolina which has a large black vote that, I'm confident, will now see him as a bona fide contender. So, my prediction is that Obama wins New Hampshire by double-digits, then crushes Clinton in South Carolina, at which point the race will be over.
Update - January 9, 2008: So much for predictions! Hillary Clinton won the New Hampshire primary.