The New Credit Rules

Here is the summary of the new credit regulations from the Fed.

The main changes include: interest rates cannot be changed within the first year (with a couple of exceptions), new rates can only apply to future purchases, an end to two-cycle billing, and the annual fee is capped at 25% of the initial limit. Consumers must also have the option of over limit "protection." Another change coming in August is that consumers will have to opt-in to overdraft "protection" on their bank accounts.

One of the more blatant policies banks have been using was to enforce new interest rates to past purchases. This would be a blatant breach in any other contract. I don't expect the lender of my car loan change my interest rate in the middle of my four year repayment schedule. Banks cannot alter a fixed mortgage interest rate in the middle of the term either. Yet, credit cards were subject to this insane practice.

Most of the other regulations seem like common sense and are aimed at making sure consumers have the necessary information. In reality, I don't think this is going to be as big of a hit to banks as many are predicting. American's have gotten used to the idea of spending more money than have, regardless of the interest rate or other fees attached. Most people are going to continue to not read their credit card policies anyway.

One of the consequences of this is that banks are going to have to resort to a more standard business model: price discrimination, meaning that they are going to charge high fess to people who they believe can afford to pay more. This is standard practice in many industries. The interesting part is that before these new regulations,  banks had found a way to reverse-discriminate. By not providing or hiding information, and making retro-active rate changes, banks found a way to charge the highest price to those who could least afford to pay it.

I pay all my bills online. I review my interest charges and make sure there have been no unauthorized purchases, but I rarely review my paper bill unless there is a discrepancy. Banks push online banking and email statements almost as hard as they push overdraft protection. I wonder if banks will decide not to make the new information available in an easy to find manner on their websites. That could be a big loop hole.

A Day of Healthcare Reading

1. Why Americans have no idea about what healthcare legislation actually says:
                Obama Details Plan to Expand Health Care to Uninsured

                From: NY Times

                Obama Health Plan Costs $950 Billion Over 10 Years

                From: WSJ

                Finally, ObamaCare Arrives

               From: The Atlantic

               The President’s Proposal puts American families and small business owners in control of their own  

               health care.

               From: Whitehouse.gov

Now, if you put it all together, Obamacare is going to spend $950 billion to extend care to the uninsured, but in a way that helps people take control of their own healthcare. Still, after reading the three articles I have no clue how this proposal is going to affect me, or how it will provide healthcare to the uninsured--the only two aspects I care about. So I started a search. 

I found how it is going to affect me pretty easily:

Currently, UCB mandates that I have health insurance. They sold it to me for $1500 (and then paid for it in a back-handed way; but for the sake of argument, let's say I paid for it). That would put the cost around the $40,000 income range, which is above what most students earn. So I would get a tax credit. 

The chart makes it pretty easy to predict changes for most people who already have insurance, at least in the short term. Many of the long-term cost saving measures like the health insurance exchange and technology developments are going to be negotiated and implemented by corporations and labor unions. Oddly though, the chart stops at $88,000. And since the actual bill is not posted (that I could find anyway), I don't know what happens to people with incomes above that amount. 

The solution to my other concern, how to provide healthcare to the thirty millionish uninsured people, is a bit more convoluted and was harder to find. This is from the Whitehouse.gov:

Beginning in April of this year, States will be allowed to expand Medicaid eligibility to more individuals. Starting on January 1, 2014, all low-income, non-elderly and non-disabled individuals will be eligible for Medicaid. This includes unemployed adults and working famlies – all people with income below $29,000 for a family of four (133% of poverty). 

The Federal Government will support States by providing 100% of the cost of newly eligible people between 2014 and 2017, 95% of the costs between 2018 and 2019, and 90 percent matching for subsequent years.

So... he is going to give them Medicaid. Again, I am a bit upset that the actual bill does not seem to be posted anywhere. It seems that the President is counting on his other cost saving measures and some tax hikes to pay for this. I am also not sure what the term "cost" means in this context. Is it premium costs, out of pocket costs, or is up to the state?

How is he going to pay for this? He is going to tax insurance companies at a higher rate because their profits are going to soar as more Americans are forced to sign up for some form of insurance. He is going tax pharmaceutical companies. He is going to raise taxes by .9% on high income individuals; and he is going to tax health insurance plans that cost over $27,000.

There are definitely some elements lacking in the proposal, none of which are cleared up by reading the newspaper. I would like to think that these missing elements would be hashed out in the Summit, but I have no reason to believe that either the Summit itself or the coverage of it will focus on explaining to Americans how this bill is going to affect them or help the uninsured. If anyone has answers to these questions or has found the actual legislation, please share. 

Good Reads: 2/19/2010

1. A Sight All Too Familiar in Poor Neighborhoods

From: NY Times

All too often, efforts to speed up a jobs bill or stimulus package are labelled as "rushing frantically," but the truth is that stimulus programs would help real people who are struggling. They needed help last month, not six months from now. 

2. The Case for a Consumer Financial Protection Agency

From:  Time

"When you buy a dishwasher, you know it probably won't explode. When you buy aspirin, you can figure out the side effects without an advanced degree. When you buy zucchini, you can feel confident it won't be toxic. And when you buy movie tickets, you can presume the terms of your purchase won't change after you leave the window."

Yet, the banking industry has found a way to avoid presenting such clearly labelled products. More than that, financial instruments have become more complex and the explanations more convoluted. Sure, banks will suffer a bit as consumers begin to make more educated decisions about their money based on clear options; but how this is bad for the economy escapes me. 


3. Tax Rates for Top 400 Earners Fall as Income Soars, IRS Data

From: Tax.com

The  most idiotic aspect of this is that the effective tax rate for someone making $60,000 is only 1%-2% less than someone making $400 million. And only 8% of the top 400 earners payed the top tax bracket. Some even managed not to pay taxes at all.

4. Stupidest Thing: Obama’s Faith-Based Economics

From: The National Review

I don't wan't to get into a debate about how the exact number of jobs the stimulus bill created, but certain parts of this author's logic are flawed. Mainly: 

"The idea that government spending creates jobs makes sense only if you never ask where the government got the money. It didn’t fall from the sky. The only way Congress can inject spending into the economy is by first taxing or borrowing it out of the economy. No new demand is created; it’s a zero-sum transfer of existing demand."

I'm out of time, though. A smarter person that me would probably explain it better anyway...

4. Interesting Graph:

Good Reads: 2/18/2010

1.  Thomas B. Fordham Institute Report

A new report on Public-Private schools. 

2.  What Is Finance, Really?

From: The Baseline Scenario

3. Move Your Money: A New Year's Resolution

From: The Huffington Post. 

Its a bit old and a bit dramatic, but I like the idea. 

4.  Meg Whitman's Campaign Spots

From: The Atlantic

Her campaign advertisements that are played dozens of times per day on dozens of radio stations reiterate the same tired poor logic that Arnie's did. This is probably the first of many times I will say this, but no Meg, California does not need to be run more like a business, and No, cutting social welfare during a recession is not what we need either. 

5. Funniest Thing: 

U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

From: The Onion

Daily Good Reads: 2/16/2010

1. Coming Soon: 5 Million More Foreclosures
From: The Big Picture

2. Why Tuition Always Goes Up at American Universities

From: Huffington Post

3. Banks step up spending on lobbying to fight proposed stiffer regulations

From: LA Times

4. Dollars for Death, Pennies for Life

From: Truthout.org

Daily Reads: 2/15/2010

1. College Students, the New Cash Cows

From: NY Time's Economix Blog

Privatizing education is one of those issues that is constantly in my face as a student, but which mostly gets lumped in with every other budgetary concern. Every year, state funding for public university education is slashed, and public institutions are forced to look for funding elsewhere. This burden is most often pushed onto students through higher tuition. To combat this, universities have begun cutting costs across the board and admitting more out-of-state students that generally pay higher fees. 

There is a fundamental problem with this. It is the same problem that arises in healthcare, food, water, and any other good that is a necessity or a public "good" (meaning it is better for a society if their citizens have college degrees). For example, I benefit from other people being educated because their unemployment rate is 1/3 that of those with only a high school education. I also benefit because those with college educations tend to be able to afford their own healthcare, food, clothes, and water. The list goes on. But these positive aspects of education do not factor into firms' goals to maximize their own profit. In most every case, this means setting the price above what some people can afford to pay. In a sense, what happens is that while firms maximize their own profit, they push this unaccounted cost onto you and me. And every funding decrease to public universities forces them to act more like a firm and less like a public institution. 

2. Should Economists Be Sued for Malpractice?

From: Maxine Udall-Girl Economist

As an economics student, this is another one of those issues that I face on a daily basis.  The UCB economics department is renowned for its mathematical approach. But applying mathematics to a social science requires you to forget any sense of rationality with assumptions like "non-satiation," meaning that people always want to consume more of a good, and its seemingly contradictory counterpart on a macro-scale, "desired consumption=actual consumption," meaning people always consume exactly what they want. The problem is that these models are used to draw conclusions like "optimal social welfare." In my first economics course, I was lucky enough to have a great graduate student instructor who explained to me after several weeks of complaining that these models are only useful to describe trivial markets. He gave me a more advanced economics book that explained such crazy scenarios like how these models work when people have different income levels (answer: they don't work), or what if a society values other things (like the lives of other people) more than buying more goods. These models are often rejected because they require supposed economic scientists to make additional value judgments. 

But in my opinion, the consequences of ignoring these factors is much more dangerous. As Maxine argues, it leads to easy to understand, but ill-conceived rhetoric, like the mainstream argument that big government inhibits economic growth. Another example is all the talk of the deficit, as if tomorrow the world is going to explode. 

Another consequence is the emphasis on efficiency. This concept is probably the most dangerous concept in economics, yet it is thrown about as the always desired goal. The reality is that the only reason economists love efficiency is because they can measure it. But because of the assumptions necessary to find efficient or optimal outcomes, these results will always tend to favor: 1. Those start with the most wealth, 2. Those with the least regard for the livelihood of others. The consequences of this are readily apparent:

"We as a profession benefited from it with higher salaries and consulting fees. Meanwhile, the “tragic consequences” of our failure include a country that inefficiently spends twice as much as any other developed country on health while leaving roughly 20% of the population with no cover, a 10% unemployment rate, and a growing home mortgage foreclosure rate, all while providing single-payer credit default insurance, financed by low and middle income taxpayers, to the richest portion of the population, the guys who ran us into the ditch; the guys who cannot be taxed for fear they will cease to provide us with the dubious benefits of their financial expertise and acumen."

Also for what it's worth, the worst offender so far that I have seen is the Fed Chair himself, Ben Bernanke. His textbook doesn't even bother to state the assumptions, nor explain the consequences of his conclusions. I also have a less-interested graduate student whose answer to everything is that "these assumptions are necessary for the model." And these are the people who are guiding economic policy now and in the future. And the beat goes on...

Daily Reads: 2/13/2010

1. Citi Plans Crisis Derivative

Citibank has created a derivative that pays out when there is a financial crisis. It appears as though the banking industry math nerds have taken their bonuses, bought a great deal of pot and decided to go back to cooking up insane ways to make SHORT TERM profit. This new derivative is essentially an insurance policy against a financial collapse. There are several problems with this, most of which the article points out. Mainly, if you purchase this derivative, you have to bet that the bank issuing it will have the money to pay you off in the event of a collapse. And the only way banks survived during the last collapse was with TARP. 

This is nothing new. It is eerily resemblant of the infamous credit default swaps, which investors used to insure mortgage securities. The main insurer was AIG. Then when the housing market collapsed, investors began calling in their "insurance policies," but AIG had no reserves to back it up. The steady stream of income that the swaps provided was gone and taxpayers became the default insurer.

This is partly why banks should be taxed at high rates now...while they still have money. So at least next time the government decides to fund their idiocy, it can at least pay banks with their own money.

2. Some Survey Results

From: The Baseline Scenario

The most interesting response: 

4. When you ask if “homosexuals” should be allowed to serve in the military (page 24), people are in favor 59-29. When you ask about “gay men and lesbians,” you get 70-19. (If you follow up by asking about serving “openly,” the margin falls to 44-41 and 58-28, respectively.) Words matter.

Could it be that 10-11% percent of individuals don't know the definition of homosexual? 

3. Vanilla Options for Stakeholders

From: Mike Konczal's blog: RortyBomb

A member of the Board of Governors of the Federal Reserve System has proposed that information for investors about financial institutions should be "understandable and readily comparable among peers." What Konzcal points out is that this is an idea that was abruptly removed from the financial reform bill... except the idea was to provide consumers with "vanilla options" for credit cards, insurance policies, and bank accounts.

The idea is that without understandable and comparable information, people make irrational choices. For example, "overdraft protection" is thrown into most checking accounts these days even though many people would be better off without it. I had a personal example of this with Chase, which was charging me $12 a month to monitor a $400 credit line for my "security." It took me an hour on the phone to explain to a representative why I didn't need this over-priced insurance policy. He didn't seem to understand exactly what it was he was selling. It is comparable to paying $750/month for the legal minimum of $25,000 in auto insurance.

A strategy that focused on promoting vanilla options would force banks to provide a basic checking, savings, or credit accounts. Then let consumers choose which of the add-ons they need. 

4. Second Stupidest Thing I have Read Today: The academic quality of the Council of Economic Advisors

From: Super Economy Blog

Ok... I know its a bit odd that this is coming from a blog which provides a Kurdish-Sweedish perspective on the American economy, but that is not why this is one of the stupidest things I have read today. I ended up here because Greg Mankiw (the former CEA Chair under George W. Bush, and current professor at Harvard) was offended that the Obama Administration's current CEA Chair said that she has the best staff since the 1960s. This then began a data collection spree to determine whose staff had more citations in economic journals. And the winner is... neither of you. The lesson is that economics pissing contests between two of the smartest economists in the world is almost as useless as a Sean Hanity in-depth report. 

How UCB consistently churns out hippies

Combined readings for Theories of Late Capitalism, Political Economy of Colonialism, Classical Theories of Political Economy, and an Area Studies history course.

Daily Afternoon Reads: 2/12/2009

1. So That’s What ‘Too Big to Fail’ Means

From: NY Times Economix Blog

I hope this graph is readable, but the gist is that since the financial industry began a wave of deregulation in the 1980s, the industry has exploded to grow almost six times the size of US GDP. There is also a large jump around 2000, which coincides with the Gramm-Leach-Baily act, which further deregulated the industry. 

It should also be noted that none of the industries on the graph actually produce anything that is counted in GDP other than the service itself. For example: if you meet with your financial representative, the market value of that service is counted in GDP--generally, his hourly wage. But, if you were to decide to sell $1,000 worth of stocks, that $1000 would not be counted. 

The distribution of these financial assets is also no secret. 

2. Citizens United: The Democrats Strike Back

From: The Atlantic

Despite the name, the article gives some details about the campaign finance reform being debated in the senate. I thought it was interesting that the meat of the bill is in restricting any government contractors from supporting or opposing a candidate. This article in the Washington Post claimed that 75% of the largest firms are government contractors, which would seem to put a big dent supreme court's decision. 

I still think the only long-run option is publicly financed campaigns. Considering money as free speech and corporations as people is a slippery slope. I also can't help but also see this as a further infusion of neo-liberal economic theory (Milton Friedman's free market approach) into America's political system. Friedman always argued that taxation, regulations, and government redistribution were thefts, or violations of individual liberty. The decision is simply an extension of that argument applied to corporations. It is also a dangerous compromise: the government will continue to impede corporations with taxes, but what the corporations do after that with the remaining funds is unrestricted. The decision reeks of corporate entitlement.  

3. Student Detained at Airport Over Possession of Arabic Flashcards

From: Truthout.org. 

The government can't fill the nation with fear about constantly impending terrorist attacks, and then expect some citizens (possibly airport security personnel) not to turn into racist idiots. 

4. Americans overwhelmingly reject all types of government spending cuts

 From: Veterans Today

Spending Type	Federal Budget	Support for cuts
Social Security	19.6%	2%
Military	18.7%	18%
Unemployment	16.1%	15%
Medicare	12.8%	6%
Other health care*	10.4%	10%
Interest on Debt	4.6%	10%
State Department	1.5%	28%
Veterans	1.5%	2%
Anti-terrorism	1.2%	17%
Agriculture	0.7%	12%
Energy	0.7%	14%
Crime / Justice	0.7%	10%
Environment	0.3%	16%
Science	0.2%	14%

This chart points out the abstract nature of the federal budget. I am sure if you asked people if we need to trim the budget deficit, most would say, yes. I can't go a day without reading some fear-mongering op-ed about the danger of the deficit. The funny thing is that it hasn't worked. Something has changed in the last fifteen years. This same type of fear-mongering nonsense was used by Reagan in the eighties and Clinton in 1995 to cut social welfare programs. Although, I can't see Obama attempting to cut agricultural spending by showing a Mexican immigrant farm hand in a "luxury tractor" rolling around the California valley picking up government subsidies. 

Daily Good Reads: 2/11/2010

1. Strikes and Lockouts: 

For some reason, I do not believe that this is because workers are happier at their jobs. US labor productivity has increased about 85% since 1960. Meanwhile, real wages have declined about 11%.

2.  Slumburbia

From: NY Times. Timothy Egan

It's an interesting question: what to do with all these empty foreclosed homes? Since banks are still refusing to adjust most people loans, the problem is only going to worsen. I am thinking about a federally backed lease-to-own program that values assets at their current market price designed for laid-off workers who have been forced to move to find employment. Any ideas?

3. The New Public Diplomacy

From: Project Syndicate. Joseph Nye. 

This piece describes the recent movement in politics from who has the best policy, to who has the best story. It reminds of the divide that began in the eighties between a firm's stock price and what they actually produce.  The consequence of this was readily apparent in the technology bubble.  Firms' stock prices came to be valued at two to three hundred percent of their assets, revenue, profit, or any other measure people have historically used a to value stocks. The problem in both the financial and the political realms becomes an emphasis on the short run. That leaves the dead weight of the long run on the rest of us. 

4. The Nordics in the global crisis

From: Vox

These economists have found that the Nordic countries have weathered the recession better than the US.I don't want to read to much into this due to the tremendous differences in the economies of the countries. But it should be noted that the Nordic countries have stronger labor unions, a larger safety net for unemployed workers, and a much stronger emphasis on education. In a recession, this leads to less unemployment and shorter durations of unemployment. Also, these policies should not sound so far fetched, seeing as how they were all part of US policy from 1950-1970. 

Daily Reads Express: 2/10/2010

1. Sick at Work

From: Economix blog on NY Times

   Paid sick leave: a smaller piece of reform that could make a big difference. 

2. Rich people still have jobs, poor people don't

From: Time: The Curious Capitalist

The distribution of the unemployment rate across income levels: 

Range of incomes (by decile)Unemployment rate$12,160 or less--30.8%
$12,160-$20,725--19.1%
$20,725-$29,680--19.7%
$29,680-$39,000--12.2%
$39,000-$50,000--9.0%
$50,000-$63,000--7.8%
$63,000-$79,100--6.4%
$79,100-$100,500--5.0%
$100,150-$138,700--8.0%
$138,700+--3.2%


3.  How a New Jobless Era Will Transform America

From: The Atlantic: Don Peck

     The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it  ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.

4. Message: Focused On Jobs

It's the actual jobs that matter, not the trying to look like you're doing something on jobs.

Realities of Congress, blah blah blah, but occasionally it'd be nice if that charismatic guy in the White House would try to move public opinion.

 Enough Said.

5.  Funniest Thing: Wal-Mart Cuts Over 13,000 Of What It Calls Jobs

From: The Onion

     This is quickly becoming one of my favorite sites. 

Charter Cities?-- in place of daily reads

1. For richer, for poorer

This article advocates a sort of neocolonialism in which poorer nations give some of their land to developed nations to start charter cities. I am going to write a blog detailing why I think this is an awful idea; but in the meantime, this piece offers a thought-provoking idea. 

Interesting Reads: 2/8/2010

1. What to do about those danged bank lobbyists

Barry Ritholtz has a good summing-up of a new paper (pdf) by three IMF economists on the link between lobbying and risk-taking by lenders. The gist: Firms that made the riskiest loans spend the most on lobbying Congress. And what were their lobbying aims?

• prevent  any tightening of lending laws that reduce the benefits of short-termist strategies over long-term profits;

• allow systematic underestimation of default probabilities by overoptimistic bankers;

• not just to originate loans that carry more risk, but to convince legislators that such lending is prudent;

• to thwart bills aimed at lax lending standards and riskier loans;

• to tighten regulations that restrict entry by others preventing competition;

• to have a higher probability of receiving preferential treatment in a crisis.

The general takeaway here is that Congress is a bit, ahem, compromised when it comes to dealing with the financial sector. It's compromised in dealing with lots of other industries too, of course, but the finance-insurance-real-estate crowd is bigger and richer than any other industry, plus it just caused the worst economic downturn since the Depression. Those who would address the financial problems of the past few years with better laws and regulations (a group of which I am a member) have a big problem when the rulemakers are captured not just by the industry they regulate but the dodgiest parts of that industry. So what do we do about this?

1. Get out of the regulating business. This is the libertarian solution, and while it reeks a bit of libertopianism, there is a basic truth behind it: The less affected by regulation and/or government spending an industry is, the less it spends on campaign contributions and lobbying, as a general rule.

2. Shine a light on what's going on so the public interest can trump private interests. This does work sometimes. And the increased attention paid to the House Financial Services and Senate Banking committees over the past couple of years has made life more difficult for financial industry lobbyists (at least, that's what people in the financial industry say).

3. Do something about all that lobbying and campaign giving. The problem here is that past efforts at campaign finance reform seem to have only made things worse.

2. Lobbyists and Students


As usual, the senate is where progressive legislation goes to die.

The private lending companies that earn billions of dollars in undeserved profits from the federal student loan program are working overtime to kill a bill that would stop their gravy train once and for all — and should have been enacted long ago. The House stood up to the powerful lending lobby last fall and passed a student loan reform bill. The White House has been pushing the Senate, but it is having trouble finding its spine and has yet to introduce a bill.

The House version phases out the wasteful part of the federal college lending program that pays private lenders a rich subsidy to make risk-free loans that are guaranteed by the government. The bill also expands another, more reliable and less expensive federal loan program that permits students to borrow directly from the government through their colleges.

The arguments for moving in this direction are irrefutable. The subsidized program, for example, was supposed to keep loans flowing during recessions. But the loans dried up in the last credit crunch, forcing the government to rescue the program. The direct program, by contrast, suffered no such disruption. In addition to being more reliable, the direct program costs less. The Congressional Budget Office estimated last year that the country could save about $80 billion over the next decade by ending the private system and moving to the direct one.

Some lenders say the new system would lead to more student defaults, but contracts between the government and loan-servicing companies clearly state that the companies will be evaluated partly on how successful they are at preventing defaults.

The new system would, of course, cut into lenders’ profits. But by redirecting the savings into a variety of federal programs aimed at needy students — including the Pell grant scholarship program — Congress would be putting the money to good use.

3.Hedging America

Why, in the marketplace (sic!) of ideas, have the evangelists for the unrestricted market attracted so much attention and the “realists” so little? He argues, fairly convincingly, that the truth does not lie predominantly on that side of the issue. So is it that believers always make more effective advocates than skeptics do? Are we for some reason more receptive to simple answers than to complex ones? Is it that, in the nature of the case, there is more money backing one side than the other?

The argument against regulating hedge funds, private equity firms, and the like was that the participants in those markets were expert, knowledgeable managers of wealth. Since they had a lot at stake, they would be motivated and able to estimate risks fairly, foresee pitfalls, price accordingly, and keep each other honest. In fact, as Cassidy shows, incentives were often perverse, short-run greed overcame long-run caution, information was hidden or badly processed, and the complexity of financial engineering outran the capacity for rational calculation. “Rational irrationality” and herd behavior led to disaster. In the case of financial markets, the “realists” have by now perhaps won out over the “utopians.”

How much do all those exotic securities, and the institutions that create them, buy them, and sell them, actually contribute to the “real” economy that provides us with goods and services, now and for the future? The main social purpose of the financial system--banks, securities markets, lending institutions, and the rest--is to allocate society’s pool of accumulated savings, its capital, to the most productive available uses. It does a lot of this, beyond doubt.

We would be much poorer without a functioning financial system, and the flow of credit and equity purchases that it permits. If anyone who wanted to start a business--a software company, a biotechnology laboratory, a retail store--had to do so with his or her already saved-up wealth and the help of relatives, many good ideas would go unrealized, and some wealth would lie idle or be wasted. 

But those needs were being taken care of a quarter-century ago, and well before that. The securitization of mortgages and college loans is not intrinsically a foolish or useless idea--it enlarges the pool of capital available to finance home purchases and college educations; but the opportunity for you and me to bet a large sum of money on the outcome of somebody else’s bond issue is not nearly the same sort of thing.

Take an extreme example. I have read that a firm such as Goldman Sachs has made very large profits from having devised ways to spot and carry out favorable transactions minutes or even seconds before the next most clever competitor can make a move. Deep pockets in a large market can make a lot of money out of tiny advantages. (Of course, if you have any such advantage the temptation is irresistible to borrow a lot of money to enlarge your bets and your profits. Leverage is good for you, until it isn’t. It is not so good for the system.) A lot of high-class intellectual effort naturally goes into trying to invent ways to find those tiny advantages a few seconds before anyone else.

Now ask yourself: can it make any serious difference to the real economy whether one of those profitable anomalies is discovered now or a half-minute from now? It can be enormously profitable to the financial services industry, but that may represent just a transfer of wealth from one person or group to another. It remains hard to believe that it all adds anything much to the efficiency with which the real economy generates and improves our standard of living.

If that suspicion is valid--I emphasize that the necessary calculations have not been made and will be hard to make--the conclusion would be that our poorly regulated financial system is not only dangerously unstable, but also too big and too complex, absorbing talent and resources that could be better used doing something else. What is inadmissible is the assumption that, if the market creates a large and convoluted financial system, the market must be right. John Cassidy’s book should confer on a thoughtful reader a lasting immunity to erroneous free-market sloganeering, whether simpleminded or devious, while still conveying some feeling for what a well-functioning market system can actually do. Both ideas are important.

4. To Heal Haiti, Look to History, Not Nature

HAITI is everybody’s cherished tragedy. Long before the great earthquake struck the country like a vengeful god, the outside world, and Americans especially, described, defined, marked Haiti most of all by its suffering. Epithets of misery clatter after its name like a ball and chain: Poorest country in the Western Hemisphere. One of the poorest on earth. For decades Haiti’s formidable immiseration has made it among outsiders an object of fascination, wonder and awe. Sometimes the pity that is attached to the land — and we see this increasingly in the news coverage this past week — attains a tone almost sacred, as if Haiti has taken its place as a kind of sacrificial victim among nations, nailed in its bloody suffering to the cross of unending destitution.

And yet there is nothing mystical in Haiti’s pain, no inescapable curse that haunts the land. From independence and before, Haiti’s harms have been caused by men, not demons. Act of nature that it was, the earthquake last week was able to kill so many because of the corruption and weakness of the Haitian state, a state built for predation and plunder. Recovery can come only with vital, even heroic, outside help; butsuch help, no matter how inspiring the generosity it embodies, will do little to restore Haiti unless it addresses, as countless prior interventions built on transports of sympathy have not, the manmade causes that lie beneath the Haitian malady.

         Much more...
5. The Tea Partiers: Fraudulent Fiscal Conservatives

I think the MSM is missing the real focus of this movement. We keep describing the tea-partiers as fiscal conservatives. But this is patently untrue on its face.

They have no plans to cut serious spending whatsoever. They love their Medicare, as they screamed at us last August. Do you remember them revolting against Bush's unfunded, Medicare prescription drug bill, the worst act of fiscal vandalism since the Iraq war? They want much more defense spending. And does anyone think they would ever touch social security? Tell me of one speech this weekend in which any serious spending cuts were actually proposed.

On healthcare costs, any attempt to restrain the massive fiscal burden of the care of people in their last days and hours of their lives - by entirely voluntary attempts to get them to prepare powers of attorney in advance - will be described as death-panels. This new form of Christianity - unlike the vast tradition stretching back to the Middle Ages - believes that even those in a vegetative state should be kept on feeding tubes for ever.

Everything they stand for is about more spending, not less. Remember that none of these people were up in arms when an evangelical president was adding trillions of debt, with not even a gesture at funding any of it. And they want to cut taxes as well.

So why are they really there?

They want their country back. That's what they tell us. I watched a CNN segment where one woman explicitly described Obama as Satan's agent. And the biggest applause of the Palin speech was her reference to children with special needs, her brilliant way of telling the base that she is a real pro-lifer and not a fake one. That's why she hauls little Trig everywhere she goes. He's a pro-life prop. A special needs child would be kept at home, cared for intently, and out of the limelight. 

This is about Christianism, permanent war against Islam, rounding up illegals (did you hear Tancredo?) and a culture war against the cities and "unreal Americans". Unreal means not Christianist.

Know fear.

Daily Good Reads: 2/6/2010

1. In a First, Women Surpass Men on U.S. Payrolls
           For the first time, women have outnumbered men on the nation’s payrolls.

The Labor Department revised on Friday its previous estimates of nonfarm payroll employees, the monthly aggregate employment series that gets the most media attention.

The most recent jobs estimates by gender are for January. Before adjusting for seasonal changes, 64.2 million payroll employees last month were women, and only 63.4 million were men.

The chart below, taking revisions reported on Friday into account, shows payroll employees by gender for each month of 2009. In four of the 12 months — February, March, November and December — there were more female payroll employees than male employees.

The different types of jobs held by men and women not only explain the seasonal pattern of women’s relative employment, but they also explain why it was a recession that pushed women past this milestone. Construction and manufacturing are male-intensive industries and were industries with particularly large percentage employment losses during this recession. Over the past 24 months, the number of female payroll employees fell 2.6 million, while the number of men fell 5.8 million.

2. The New Math on Campus

When Stereotypes replace analysis:

ANOTHER ladies’ night, not by choice.

After midnight on a rainy night last week in Chapel Hill, N.C., a large group of sorority women at theUniversity of North Carolina squeezed into the corner booth of a gritty basement bar. Bathed in a neon glow, they splashed beer from pitchers, traded jokes and belted out lyrics to a Taylor Swiftheartache anthem thundering overhead. As a night out, it had everything — except guys.

“This is so typical, like all nights, 10 out of 10,” said Kate Andrew, a senior from Albemarle, N.C. The experience has grown tiresome: they slip on tight-fitting tops, hair sculpted, makeup just so, all for the benefit of one another, Ms. Andrew said, “because there are no guys.”

In terms of academic advancement, this is hardly the worst news for women — hoist a mug for female achievement. And certainly, women are primarily in college not because they are looking for men, but because they want to earn a degree.

But surrounded by so many other successful women, they often find it harder than expected to find a date on a Friday night.

“My parents think there is something wrong with me because I don’t have a boyfriend, and I don’t hang out with a lot of guys,” said Ms. Andrew, who had a large circle of male friends in high school.

Jayne Dallas, a senior studying advertising who was seated across the table, grumbled that the population of male undergraduates was even smaller when you looked at it as a dating pool. “Out of that 40 percent, there are maybe 20 percent that we would consider, and out of those 20, 10 have girlfriends, so all the girls are fighting over that other 10 percent,” she said.

Needless to say, this puts guys in a position to play the field, and tends to mean that even the ones willing to make a commitment come with storied romantic histories. Rachel Sasser, a senior history major at the table, said that before she and her boyfriend started dating, he had “hooked up with a least five of my friends in my sorority — that I know of.”...

Even worse, “Girls feel pressured to do more than they’re comfortable with, to lock it down,” Ms. Lynch said.

As for a man’s cheating, “that’s a thing that girls let slide, because you have to,” said Emily Kennard, a junior at North Carolina. “If you don’t let it slide, you don’t have a boyfriend.”

“Women do not want to get left out in the cold, so they are competing for men on men’s terms,” she wrote. “This results in more casual hook-up encounters that do not end up leading to more serious romantic relationships. Since college women say they generally want ‘something more’ than just a casual hook-up, women end up losing out.”

W. Keith Campbell, a psychology professor at the University of Georgia, which is 57 percent female, put it this way: “When men have the social power, they create a man’s ideal of relationships,” he said. Translation: more partners, more sex. Commitment? A good first step would be his returning a woman’s Facebook message.

“If a guy is not getting what he wants, he can quickly and abruptly go to the next one, because there are so many of us,” said Katie Deray, a senior at the University of Georgia, who said that it is common to see six provocatively clad women hovering around one or two guys at a party or a bar.

3. Down With the People 

I almost put this under stupidest thing I've read. It's borderline.

In trying to explain why our political paralysis seems to have gotten so much worse over the past year, analysts have rounded up a plausible collection of reasons including: President Obama's tactical missteps, the obstinacy of congressional Republicans, rising partisanship in Washington, the blustering idiocracy of the cable-news stations, and the Senate filibuster, which has devolved into a super-majority threshold for any important legislation. These are all large factors, to be sure, but that list neglects what may be the biggest culprit in our current predicament: the childishness, ignorance, and growing incoherence of the public at large.

Anybody who says you can't have it both ways clearly hasn't been spending much time reading opinion polls lately. One year ago, 59 percent of the American public liked the stimulus plan, according to Gallup. A few months later, with the economy still deeply mired in recession, a majority of the same size said Obama was spending too much money on it. There's nothing wrong with changing your mind, of course, but opinion polls over the last year reflect something altogether more troubling: a country that simultaneously demands and rejects action on unemployment, deficits, health care, climate change, and a whole host of other major problems. Sixty percent of Americans want stricter regulations of financial institutions. But nearly the same proportion says we're suffering from too much regulation on business. That kind of illogic—or, if you prefer, susceptibility to rhetorical manipulation—is what locks the status quo in place.

The politicians thriving at the moment are the ones who embody this live-for-the-today mentality, those best able to call for the impossible with a straight face. Take Scott Brown, the newly elected Senator from Massachusetts. Brown wants government to take in less revenue: He has signed a no-new-taxes pledge and called for an across-the-board tax cut on families and businesses. But Brown doesn't want government to spend any less money: He opposes reductions in Medicare payments and all other spending cuts of any significance. He says we can lower deficits above 10 percent of GDP—the largest deficits since World War II, deficits so large that they threaten our future as the world's leading military and economic power—simply by cutting government waste. No sensible person who has spent five minutes looking at the budget thinks that's remotely possible. The charitable interpretation is that Brown embodies naive optimism, an approach to politics that Ronald Reagan left as one of his more dubious legacies to Republican Party. A better explanation is that Brown is consciously pandering to the public's ignorance and illusions the same way the rest of his Republican colleagues are.

Our inability to address long-term challenges makes a strong case that the United States now faces an era of historical decline. Our reluctance to recognize economic choices also portends negative effects for the rest of the world. To change this story line, we need to stop blaming the rascals we elect to office and start looking to ourselves.

4. Funniest Thing I've seen today: Academic Sentence Generator.

I am currently reading a book with a chapter entitled: postmodernISM or POSTMODERNism. I believe the author must have been a frequent flier of this website. 

5 Pieces worth a Moment of Your Time 2/5/2010

1. Fiscal Scare Tactics

These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

Yet they aren’t facts. Many economists take a much calmer view of budget deficits than anything you’ll see on TV. Nor do investors seem unduly concerned: U.S. government bonds continue to find ready buyers, even at historically low interest rates. The long-run budget outlook is problematic, but short-term deficits aren’t — and even the long-term outlook is much less frightening than the public is being led to believe.

So why the sudden ubiquity of deficit scare stories? It isn’t being driven by any actual news. It has been obvious for at least a year that the U.S. government would face an extended period of large deficits, and projections of those deficits haven’t changed much since last summer. Yet the drumbeat of dire fiscal warnings has grown vastly louder.

To me — and I’m not alone in this — the sudden outbreak of deficit hysteria brings back memories of the groupthink that took hold during the run-up to the Iraq war. Now, as then, dubious allegations, not backed by hard evidence, are being reported as if they have been established beyond a shadow of a doubt. Now, as then, much of the political and media establishments have bought into the notion that we must take drastic action quickly, even though there hasn’t been any new information to justify this sudden urgency. Now, as then, those who challenge the prevailing narrative, no matter how strong their case and no matter how solid their background, are being marginalized...

2. If Colleges Worked Like Health Care

Correctly viewed, a modern university is a prepaid, staff-model, pedagogic group practice – the educational analogue of a staff-model health maintenance organization, or H.M.O., like the Kaiser Permanente Health Plan. Like H.M.O.’s, which are prepaid an annual capitation for all of an insured person’s medically needed services, universities are prepaid one annual tuition fee for all the pedagogic services going into the education of the student.

But suppose universities operated instead on a piece-rate compensation basis, like the current health system. They would then be merely a pastiche of different pedagogic profit centers, each with its own fee schedules and ownership patterns.

Professors would rent office space from the university and then each function as their own profit centers. They would equip their offices with computers to present graphic illustrations to students during office hours or surf the internet with them, charging not only a professional office-visit fee, but also a PC usage fee.

A “comprehensive initial consultation on a senior thesis,” for example, might cost anywhere from $150 to $300, depending on the student. Drafts and redrafts of the thesis would be read by the professors multiple times. Ditto for assigned papers.

The faculty in the natural sciences and engineering would own the laboratories used by their students and charge a facilities fee for each use, along with a professional fee for faculty supervision and set-up costs.

The English department would operate the for-profit University Rehab Inc. for remedial English, to purge students of their untoward use of words such as “like,” “you know” and “Oh my God!” – albeit it not of the equally untoward “as it were.”

Students would be charged a professional lecture fee for every class they attended along, of course, with another facilities fee, like an operating-room charge in a hospital. Every time a student sought out a teaching assistant during office hours a charge would be incurred. Thus, muddled lectures by the professor actually might yield additional revenue.

If universities conducted their business in this fashion they, too, might provoke endless rancor and suspicion, endless lawsuits and, sooner or later, much government regulation on how they conduct their business. It may be the reason universities prefer to function like staff-model H.M.O.’s.

And has this approach produced poor quality, as physicians devoted to the hallowed fee-for-service system have so often alleged of H.M.O.’s? It does not appear so, as universities do compete fiercely for students and faculty on their overall reputation.

In any event, parents all over America and, indeed, all over the world dream of sending their offspring to these prepaid, staff-model pedagogic group practices. These parents can’t all be wrong.

3.Muddling Out of Freefall

NEW YORK – Defeat in the Massachusetts senatorial election has deprived America’s Democrats of the 60 votes needed to pass health-care reform and other legislation, and it has changed American politics – at least for the moment. But what does that vote say about American voters and the economy?

It does not herald a shift to the right, as some pundits suggest. Rather, the message it sends is the same as that sent by voters to President Bill Clinton 17 years ago: “It’s the economy, stupid!” and “Jobs, jobs, jobs.” Indeed, on the other side of the United States from Massachusetts, voters in Oregon passed a referendum supporting a tax increase.

The US economy is in a mess – even if growth has resumed, and bankers are once again receiving huge bonuses. More than one out of six Americans who would like a full-time job cannot get one; and 40% of the unemployed have been out of a job for more than six months.

As Europe learned long ago, hardship increases with the length of unemployment, as job skills and prospects deteriorate and savings gets wiped out. The 2.5-3.5 million foreclosures expected this year will exceed those of 2009, and the year began with what is expected to be the first of many large commercial real-estate bankruptcies. Even the Congressional Budget Office is predicting that it will be the middle of the decade before unemployment returns to more normal levels, as America experiences its own version of “Japanese malaise.”

When America reformed its welfare programs for the poor under Clinton, it put conditions on recipients: they had to look for a job or enroll in training programs. But when the banks received welfare benefits, no conditions were imposed on them. Had Obama’s attempt at muddling through worked, it would have avoided some big philosophical battles. But it didn’t work, and it has been a long time since popular antipathy to banks has been so great.

Obama wanted to bridge the divides among Americans that George W. Bush had opened. But now those divides are wider. His attempts to please everyone, so evident in the last few weeks, are likely to mollify no one.

Deficit hawks – especially among the bankers who laid low during the government bailout of their institutions, but who have now come back with a vengeance – use worries about the growing deficit to justify cutbacks in spending. But these views on how to run the economy are no better than the bankers’ approach to running their own institutions.

Cutting spending now will weaken the economy. So long as spending goes to investments yielding a modest return of 6%, the long-term debt will be reduced, even as the short-term deficit increases, owing to the higher tax revenues generated by the larger output in the short run and the more rapid growth in the long run.

Three things can make a difference: a second stimulus, stemming the tide of housing foreclosures by addressing the roughly 25% of mortgages that are worth more than the value the house, and reshaping our financial system to rein in the banks.

Most Americans, however, are focused on today’s downturn, not tomorrow’s. Growth over the next two years is expected to be so anemic that it will barely be able to create enough jobs for new entrants to the labor force, let alone to return unemployment to an acceptable level.

Unfettered markets may have caused this calamity, and markets by themselves won’t get us out, at least any time soon. Government action is needed, and that will require effective and forceful political leadership.

4. Why Workplace Equality Initiatives Aren't Helping Women

Companies say they treat men and women equally — but in reality, they don't. Our recent gender-parity survey of more than 1,800 business people worldwide, conducted in association with HBR.org, shows that in fact, employees are disappointed with the way their company handles the issue of gender parity — the attempt to treat men and women equally in the workforce. Nearly 80 percent of women and men say they are convinced of the benefits of gender parity at all levels. But only about 20 percent believe their companies actually put meaningful resources behind it.

Most companies simply fall down in the follow-through. Almost three-quarters of respondents say their companies launched initiatives like flex work programs and mentorships, but fewer than 25 percent feel they are effective: employees just don't see enough women in leadership positions at their company. Fully 60 percent of survey respondents say they are not solicited for their opinions on gender parity by their companies. The dismal metrics get worse: Less than 20 percent report that their companies effectively utilize gender parity metrics to track progress. Only 14 percent say they had effective gender parity training or workshops. Just 8 percent believe their firms effectively tied incentives and compensation to gender parity.

Both men and women agree that women are still seen as better caregivers in their personal lives and tend to make more compromises in their career. The survey clearly shows that the time taken out for motherhood — and the resulting lost experience — is still a root cause of inequality in promotions, especially in "up-or-out" firms. Over time, working mothers disappear from higher management ranks in almost every industry. Result: Women constitute 50 percent of America's workforce, but in 2009 represented only 3 percent of Fortune 500 CEOs.

The survey sends a strong message: if companies want to help more women climb the corporate ladder, they have to go beyond flex jobs or flex hours. Instead, they need to develop less rigid promotion processes and career paths — and actively promote and "de-stigmatize" flexible career arcs within the organization. For companies, the pay-off can be huge: not only will they double their talent pool of leaders as more women return to the workforce in senior positions; they will also retain more male and female employees in the long-run and slash retraining costs. That will require bringing down barriers — and breaking through the glass ceiling.

2 reads and something very funny 2/3/2010

1. The Job-Subsidy Plan

The President is asking Congress to enact a one-year $33 billion job-subsidy plan. An employer would receive a $5,000 tax credit in 2010 credit for increasing his labor force by one person and an additional subsidy for giving an employee a wage increase greater than the inflation rate. The total subsidy would be limited to $500,000 per employer, in the hope that the principal recipients would be small businesses. I do not know why the ceiling should be expected to have that effect. Even big businesses like $500,000 windfalls. If a big business happens to be increasing its hiring or its wages, why wouldn’t it claim the subsidy?

That point to one side, and disregarding also the abundant possibilities of gaming the program, stressed by Becker, the proposal is unlikely to be effective because it violates the economic principles that ought to guide stimulus programs.

The theory of stimulus is Keynes’s, is (in my opinion) sound, and is as follows. If, because a high rate of unemployment creates pessimism about the economic situation, people increase their savings at the same time that business is reducing its investing—and that is our situation today—the government can by financing projects through borrowing put the inert savings to work (inert because businesses aren’t borrowing people’s savings). The projects require workers, so unemployment falls, and with it pessimism and the cash hoarding, by consumers and businesses alike, that pessimism induces.

With Keynes’s theory understood, it becomes possible to list the principles of effective stimulus:

The stimulus must be large in order to make a substantial dent in unemployment. The $787 billion stimulus enacted last February may have been too small; a $33 billion jobs subsidy is a drop in the bucket.

The stimulus must be implemented before recovery from a depression or recession is well under way—otherwise the government’s borrowing to finance the stimulus will slow the recovery by pushing up interest rates. (That is, at some point in the recovery, business will resume investing and so will be competing with the government for capital.) If enactment of the job subsidy is delayed in Congress, or if procedures for preventing the gaming of the program are cumbersome, the subsidy expenditures may come too late to do any good.

The stimulus must be targeted on industries, and areas of the country, in which unemployment is high. Like the $787 billion stimulus, the job-subsidy plan flunks this test as well.

Most important, a stimulus is designed to stimulate demand, not supply. The economic problem for which a stimulus program is a solution is insufficient demand relative to the economy’s labor and other resources. Because of overindebtedness and continued weaknesses in the financial system, consumers and businesses are reluctant to spend. Businesses are reluctant to hire (that is one aspect of their reluctance to spend), so unemployment is high and wages are stagnant, which further depresses demand. The idea behind the stimulus is for government demand to take the place of the missing private demand. Government “buys” new roads, in lieu of consumers’ buying SUVs, and contractors meet the government’s demand by hiring unemployed construction workers. The job-subsidy plan is not demand-focused, and so is unlikely to contribute to the economic recovery. Suppose a firm in a depressed economy sells 100 earth-moving machines a year, and employs 200 workers. If the government tells the firm it can save $5,000 on its taxes by increasing its work force to 201, the firm’s total costs will increase (by the wages and benefits of the additional worker less $5,000), but its revenues will not increase because adding a worker does not increase the demand for its product.

There is an enormous amount of idle productive capacity in the U.S. economy at present. There is thus a case, as liberal economists such as Paul Krugman keep urging, for further stimulus spending. The problem is that such spending is irresponsible unless coupled with a credible commitment to repay, after the economy recovers, the money borrowed to finance the spending. Not only is there no such commitment; at present the only realistic prospect is of staggering deficits stretching indefinitely into the future. As a result there is at present no stomach for additional stimulus spending. The government is reduced to impotent gestures, of which the job-subsidy plan is one.

2. Inequality in times of crisis: Lessons from the past and a first look at the current recession

The debate on the adverse consequences of the economic crisis in the US flags rising unemployment as the most pressing issue. But crises are also bad for income distribution (Coile and Levine 2009). Households in which a bread-winner becomes unemployed face a significant decline in earnings. Thus rising unemployment mechanically causes the bottom of the earnings distribution to fall off relative to the median, increasing inequality in earnings.

A key question for the policy debate is to what extent this loss of earnings power at the bottom of the earnings distribution translates into a decline in living standards.

The figure starkly illustrates the fact that the households in the bottom percentiles of the earnings distribution suffer the largest earnings declines in recessions. Moreover, declines at the bottom of the earnings distribution can be very persistent. For example, earnings at the 10th percentile declined by 20% in the 1980-82 recession; they did not return to pre-recession levels until the late 1990s.

owever, labour earnings are not the only source of income for households. In particular, at the bottom of the earnings distribution, government and private transfers such as unemployment insurance, welfare, food stamps, and pension income are counter-balancing sources of income that tend to rise when earnings fall, thereby mitigating widening earnings inequality.

Compared to Sweden, the government in the US plays a smaller role, and taxes and transfers only partially offset widening earnings inequality in recessions. In particular, inequality in total household income increased during the recessions of the early 1980s and early 1990s.

Did these increases in income inequality translate into widening inequality in welfare and living standards? Because consumption of goods and services is more closely connected to welfare, we have examined the extent to which rising income inequality during recessions translates into consumption inequality. Figure 4 plots inequality in total after-tax income against inequality in non-durable consumption.²

Recent evidence shows how the distribution of resources changes in recessions in complex ways.

• The bottom of the earnings distribution falls off substantially relative to the median, causing earnings inequality to increase in recessions.
• This increase is substantially mitigated by government and private transfers. This mitigating effect, together with the fact that households can use borrowing and lending to smooth income declines, causes the consumption distribution to typically move very little during recessions.
• The current recession appears somewhat unusual. So far, consumption inequality has declined sharply, perhaps because the consumption-rich have been disproportionately hurt by declining asset prices.

3. From A Poll of Conservatives

I can't seem to get the whole table to show up. Follow the link on the title to see the whole chart.

I will let the numbers speak for themselves:

Question	Yes	No	Not Sure
Should Barack Obama be impeached?	39	32	29
Do you believe Barack Obama was born in the United States?	42	36	22
Do you think Barack Obama is a socialist?	63	21	16
Do you believe Barack Obama wants the terrorists to win?	24	43	33
Do you believe ACORN stole the 2008 election?	21	24	55
Do you believe Sarah Palin is more qualified to be president than Barack Obama?	53	14	33
Do you believe Barack Obama is a racist who hates white people?	31	36	33
Do you believe your state should secede from the United States?	23	58	19
Should openly gay men and women be allowed to teach in public schools?	8	73	19
Should contraceptive use be outlawed?	31	56	13
Do you believe the birth control pill is abortion?	34	48	18