Blog Post by: The Century Foundation , on September 24, 2011
This is an excerpt from The Century Foundation's Countdown to Reform by Henry J. Aaron and Robert D. Reischauer.
Charles Ponzi's profession is listed in the Biographical Almanac as "swindler." Ponzi's name is immortal because he had the genius to turn a legitimate business venture into a very lucrative crime.
A native of Italy, Ponzi began his life of crime early, stealing from his parents and parish priests. He emigrated to Canada and then to the United States, where additional petty crimes led to short jail sentences. In 1919, he discovered "arbitrage"-making money by buying the same asset in one market and selling it at a higher price in another market. The asset was postage stamps. The International Postal Union sold certificates that could be used in post offices of various nations to purchase sufficient postage to send letters internationally. The cost of such certificates in Spain was 1 cent. The certificate was good For 5 cents worth of postage in the United States. This is the same sort of transaction in which "arbitrageurs" engage, buying grain, currency, or other materials in one market and selling it in another where prices are higher. Such transactions, which tend to raise prices in the low-price market and lower them in the high-price market, are entirely legitimate.
Post by: Benjamin Landy , on September 19, 2011
The unparalleled efficacy of the free market is the kind of conservative shibboleth that rarely involves qualification or nuance; for the modern GOP, the competitiveness of the private sector is nearly sacrosanct. The private sector can do anything cheaper and more effectively than the federal government, they argue, because private employees, with their typically lower incomes and worse benefits, face economic incentives to succeed that federal employees, with their inflated salaries and cushy pensions, need not concern themselves with. But when the independent nonprofit organization Project on Government Oversight (POGO) investigated the issue, they found that privatizing government is actually far more expensive in practice than in theory. In fact, the average price paid to contractors is 83 percent higher than if the federal government had simply paid their own employees to do the same job.
Post by: Benjamin Landy , on September 13, 2011
According to new data released today by the Census Bureau, the percentage of Americans living in poverty rose to 15.1 percent last year, the highest level of poverty since 1993. In 2010 a record 46.2 million people were below the poverty line, defined as income less than $22,314 a year for a family of four and $11,139 for individuals. It was the fourth consecutive year that the number of people in poverty has increased in America. Real median household income fell 2.3 percent to $49,445—lower than it was in 1997 and barely a 25 percent improvement since the 1960s.
Unsurprisingly, the Census data shows that the Great Recession only exacerbated longstanding economic disparities between geographic regions and racial categories. In 2010, the poverty rate varied significantly in the United States, with Blacks, Hispanics, and the southern states experiencing far greater economic hardship than Whites, Asians, and the northern states.
Post by: Benjamin Landy , on September 8, 2011
The Republican media complex has been having a field day with last month’s dismal jobs report, taking the opportunity to blame every progressive achievement of the last hundred years—from Social Security to the EPA to Medicare—for the nation’s current economic woes. The latest target in this series of straw men is government regulation, which the Heritage Foundation yesterday labeled the number one impediment to job growth.
Setting aside for the moment that it was a lack of regulation that allowed the derivatives market to wreck the economy, this claim fails to take into account the real reasons business leaders themselves have given for laying off their employees. According to the Bureau of Labor Statistics, which conducts a yearly Mass Layoff Statistics program that requires businesses to report their reasons for firing employees, government regulation can account for only 0.2% of layoffs in 2009. A lack of business demand, on the other hand, accounted for nearly half of the 2.1 million people who lost their jobs that year.
Blog Post by: , on September 6, 2011
The Congressional Budget Office has concluded that the Affordable Care Act (ACA), signed into law by President Barack Obama in the spring of 2010, will more than pay for itself, provide coverage for 32 million uninsured Americans, and trim federal budget deficits by some $210 billion over the ten years ending in 2021. In this issue brief, Maggie Mahar synthesizes the relevant numbers and offers in-depth analysis of exactly how the ACA will both strengthen health insurance protections and save money.