Most of the proposed remedies involve changes in taxes and regulations, and they would help. But the single step that would do the most to reduce inequality has nothing to do with finance at all. It’s an expansion of early childhood education.
Huh? That will seem naïve and bizarre to many who chafe at inequities and who think the first step is to throw a few bankers into prison. But although part of the problem is billionaires being taxed at lower rates than those with more modest incomes, a bigger source of structural inequity is that many young people never get the skills to compete. They’re just left behind.
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Occupy the Classroom – NYTimes.com
20 OctMajor News Corp Shareholders Vote to Replace Directors | The Nation
18 OctIt’s showdown at the OK corral:
Earlier this month the California State Teachers’ Retirement System, which owns more than 6 million shares in News Corporation, voted to replace the entire board of directors. At the same time California Public Employees’ Retirement System, the country’s largest pension fund, said it would be pushing for Murdoch to step aside in favor of an independent chairman. Glass Lewis, an advisor to major institutional investors in the United States, recently advised its clients to vote against both Rupert Murdoch and his son James, while Pirc, a British advisor, told its clients to vote against the Murdochs, as has the British group who manage local government pension funds.
Of, course, the News Corporation is huge and it owns the Fox network, the Wall Street Journal, the New York Post and local newspapers from here to Dunady, not to mention all the British media they own. And, as we all know, they’ve got dirt on everyone. So bringing the company to shareholder justice
Yet Friday’s meeting is more than just corporate theatre. News Corporation also faces a tsunami of legal troubles: hundreds of potential phone-hacking victims in Britain lining up for cash settlements generate the most headlines, but there are also shareholder lawsuits attacking the way the Murdochs run the company “like a wholly owned family candy store,” and ongoing criminal investigations in Britain and the United States.
via Major News Corp Shareholders Vote to Replace Directors | The Nation.
MARK CUBAN: ‘Tax The Hell Out Of Wall Street And Give It To Main Street’
18 Octn a world of High Frequency Trading and black box trading that does nothing but create a platform for “financial hackers” to turn the market into their own proprietary financial playground, we need to figure out a way to revert the Stock and Bond Markets, and the derivative instruments created from these equities, back to their original purpose, a place to raise capital for growing business. Instead, today its a platform for financial engineers and hackers looking to exploit every and any opportunity. When 60pct or more of trades are from High Frequency/Algorithmic traders and the correlation for every market index rushes past .7, the market is no longer a market, its a platform.
The simplest way to change this is to place a very simple per share tax on every transaction. 10 cents a trade. Every share. Every option. Every Bond. Every currency transaction. Every trade.
The obvious response is that trading volume will plummet. So what? Let it. The next response is that traders will merely move their trades to foreign exchanges. Yes they will. Will transaction costs go up? Duh.. that is the point. The market thrived when spreads and transaction costs were much higher just a few short years ago. It will survive now.
via MARK CUBAN: ‘Tax The Hell Out Of Wall Street And Give It To Main Street’.
Come Together, Right NOW! Music on the March
18 OctYeah, Dylan was cool. But today we have marchin’ music that would burn his protestin’ butt.
Last Saturday Salon published an article by Stephen Deusner on protest music: Will a new Dylan emerge from Occupy Wall Street? For better or worse it struck me as a bit of a lament for the Good Old Days when they had Good Old/New Protest songs, but, alas, kids today don’t write ‘em like they used to:
As Occupy Wall Street has gained momentum, it has been compared to the anti-war and civil rights protests of the 1960s by commentators as diverse as comedian Dick Gregory, Republican presidential candidate Herman Cain and scores of newspaper columnists. Yet, as Mangum’s performance demonstrates, they are very different in at least one regard, however minor: Music is not quite the central force today that it was 40 and 50 years ago, when a song like “We Shall Overcome” or “Fixin’ to Die Rag” could communicate certain motivating ideals and reinforce solidarity among a great throng of participants. Instead, it remains peripheral.
Things get moderated toward the end:
The lesson of the 2000s seems to be to approach politics obliquely instead of head-on, to make it one concern among many. If protest songs are largely absent from Occupy Wall Street, it’s not that they aren’t being written. It’s that they no longer serve the same purpose they once did — and are so spread out across genres and audiences that they don’t register as broadly as they once did. …
On the other hand, protests inspire music, not vice versa. Perhaps the artists participating in or even just witnessing the Occupy Wall Street gatherings will be moved to write about their experiences. Perhaps the next great wave of radicalized pop is just a few months or years away.
Well, maybe.
People’s Music
But I have a somewhat different take on the whole business. Back in the day the most important music was the music sung in black churches, mostly traditional hymns and gospel. That’s the music that summoned, organized and energized the civil rights movement. The anti-war movement was a different group of people and, of course, a different issue, but it emerged in a public arena that had been activated by the civil rights movement. Continue reading
He Made It on Wall St. and Used It to Help Start Protests – NYTimes.com
17 OctBut Mr. Halper, a 52-year-old Brooklyn native, never reveals two facts about himself: he is a former vice chairman of the New York Mercantile Exchange and the largest single donor to the nonprofit magazine that ignited the Occupy Wall Street movement.
“The whole thing is very surreal to me — the fact that I spent my whole career right across the street,” he said in an interview last week on a marble bench near the park. “It makes me a little anxious, to tell you the truth. It could go anywhere. I just pray that it ends peaceful.”
via He Made It on Wall St. and Used It to Help Start Protests – NYTimes.com.
Occupy Economics, and the Sustainable Finance Lab — Crooked Timber
17 Octin the Netherlands a very interesting initiative started a few weeks ago (independent of Occupy Wall Street, but obviously not independent of the same global problems in the financial sector): the Sustainable Finance Lab. It’s an initiative by an eclectic group of academics, mostly economists (some more mainstream, some more heterodox), and one small ‘green’ bank (Triodos), to bring together people interests in debating what the real problems are with the financial sector and what needs to be changed. … it’s been very, very interesting – in fact, on issues of economics I haven’t seen anything as interesting so close to home for a long time, and that’s probably because people who normally don’t speak to each other are sitting in the same room and sharing their views. Bankers, academics, students, ex-investment bankers, journalists—they all share their views in a respectful atmosphere, but it’s clear they do not quite have the same perception of how urgent change is needed, and indeed what type of change is needed, or what the causes of the problems are.
via Occupy Philosophy, Occupy Economics, and the Sustainable Finance Lab — Crooked Timber.
The Bankers Don’t Get It!
15 OctThe alpha monkeys are playing dumb. If they’d studied evolutionary psychology they’d know that equality is in our blood. The protests are not going to stop.
Writing for The New York Times, Nelson Schwartz and Eric Dash report:
“Most people view it as a ragtag group looking for sex, drugs and rock ’n’ roll,” said one top hedge fund manager.
“It’s not a middle-class uprising,” adds another veteran bank executive. “It’s fringe groups. It’s people who have the time to do this.”
Well of course they have time, you fool, you destroyed their jobs playing king of the hill with their pension fund money, their 401K money, and their mortgages! Here’s another one of these self-deluded buffoons!
“Who do you think pays the taxes?” said one longtime money manager. “Financial services are one of the last things we do in this country and do it well. Let’s embrace it. If you want to keep having jobs outsourced, keep attacking financial services. This is just disgruntled people.”
Well, do YOU pay taxes? Warren Buffett says he pays at a lower rate than his secretary. What about you? And just what do you mean this country does financial services well? You guys just blew up the WELL three years ago! What you do well, very well, is get the government to pay you for all the destruction you’ve wrought!
This Midas goes on to say:
He added that he was disappointed that members of Congress from New York, especially Senator Charles E. Schumer and Senator Kirsten Gillibrand, had not come out swinging for an industry that donates heavily to their campaigns. “They need to understand who their constituency is,” he said.
Yep, that’s it! He bought the government and he wants it to stay bought. And I’ll just bet that Schumer and Gillibrand want to stay bought, too. Maybe that’s why this chump was talking to a Times reporter, so he could get in a shout out to his homies/lackies in Congress, reminding them to keep in their place and mind their betters.
“Wall Street continues to underestimate the degree of anger among citizens and voters,” said Douglas J. Elliott, a former investment banker who is now a fellow at the Brookings Institution. For the most part, bankers say that they see the protests as a reaction to the high unemployment and slow growth that has plagued the American economy since the recession and the financial crisis of 2008. Despite all the placards and chants plainly indicating otherwise, some bankers suggest that deep down, the protesters are not really all that mad at them.
Well, of course they’re mad about not having jobs. But anger over jobs has reminded us of something that goes deeper than that, much much deeper. These guys are out of touch; they don’t have a clue. Continue reading
Percentiles — Crooked Timber
14 OctI’m now much more sympathetic to the ‘99 per cent’ analysis. First, a closer look at income growth figures suggests that, while the 19 per cent have enjoyed rising incomes, they’ve only barely maintained their share of national income. The redistribution of the past three decades has gone from the bottom 80 per cent to the top 1 per cent.
That suggests the possibility of a policy response in which the main redistributive thrust would be to reverse this process. This would almost certainly involve higher tax payments, but this would be offset by the restoration of public services, which are in economic terms a ‘superior good’, valued more as income rises. The top 1 per cent can buy their own services, and are largely unaffected by public sector cutbacks, but that’s not true of the 19 per cent.
Another important factor is the growth of economic insecurity. The myth of the US as a land of opportunity for upward mobility has been replaced by Barbara Ehrenreich’s Fear of Falling (another good source on this is High Wire by Peter Gosselin). Even if people in the top 19 per cent are doing well, they are less secure than at any time since the 1930s, and their children face even more uncertain prospects.
The Decreasing Reliability of Accounting Data for US Firms
12 OctThis post is rather technical, but it indicates the corporations routinely cook their books and that the practice is very widespread.
While these time series don’t prove anything decisively, deviations from Benford’s law are compellingly correlated with known financial crises, bubbles, and fraud waves. And overall, the picture looks grim. Accounting data seem to be less and less related to the natural data-generating process that governs everything from rivers to molecules to cities. Since these data form the basis of most of our research in finance, Benford’s law casts serious doubt on the reliability of our results. And it’s just one more reason for investors to beware.
H/t Tyler Cowan, Marginal Revolution.
Truth and Traditions 