Feed on

Coal Tattoo has an enlightening piece on the politics of closing down dangerous mines that supply the only local jobs.


If they let them off the hook on robosigning, which has completely undermined our entire property system, what’s the point? Or is “moral hazard” only for the little people?

Larry Summers

After reading this CJR piece, I’d say it’s pretty clear that Larry Summers really wants to be the next Secretary of the Treasury. Again.

The Chilean system

If you’ve been around here a while, you’ve read the various posts I’ve done about the Chilean privatized Social Security system. Now liberal economist Dean Baker is responding to Newt Gingrich’s praise of that same system:

Dear Speaker Gingrich:

I have seen you refer to the privatized Social Security system in Chile several times as a model for the United States. I believe that you would not hold this view if you were more aware of the details of the Chilean system.

First, you have often claimed that the Chilean system is voluntary. This is not quite right. The system is mandatory for workers in the formal sector. However like most countries in Latin America, Chile has a large informal sector where participation is de facto voluntary. (The Chilean military and policy forces are an exception to this rule. They were allowed to remain under the traditional defined benefit system. This presumably was in part due to the fact that the program was put in place under the Pinochet dictatorship.)

The second point is that the system is not simply a defined contribution system that does not require funding from the government. The system guarantees workers who have participated for at least 10 years a minimum benefit. To get this benefit workers turn over the money they earned in their accounts and then get the minimum benefit from the government, with the government making up the difference.

In fact, most workers in the informal sector go this route. They effectively vote with their feet for this government-guaranteed benefit, generally participating in the system only long enough to qualify for the minimum benefit. Part of the reason is likely that they fear the volatility of financial markets and also they resent seeing 20-30 percent of their contributions siphoned off by the financial industry. (The corresponding figure for administrative costs for the US Social Security system is roughly 0.5 percent.)

The privatized system was in fact not popular with the Chilean people. Reform of the privatized system was the major issue in the 2005 presidential campaign. Both major candidates promised to reform the privatized system, including Sebastian Pinero, the current president and brother of Jose Pinero, the designer of the reformed system under Pinochet.

Finally, it is difficult to understand the possible basis for your claim that we would reduce inequality in wealth by 50 percent with this system. Since the payback structure of Social Security is quite progressive, low-income earners would almost certainly be losers under a privatized system, which would make inequality greater not lower.

I would be happy to discuss this background more with you or your staff.

1 For more background on the privatized system in Chile and other Latin American systems, see Gill, Indermit, Truman Packard and Juan Yermo, 2004. Keeping the Promise of Social Security Reform in Latin America. Stanford, CA: Stanford Economics and Finance.

Food for thought

Things I don’t have to think about today…

Felix Salmon

On why the luminaries at Davos are ignoring the Occupy movement.

Spotlight on Newt!

With God’s own reporter, Susie Sampson:


What Avedon said:

Jay Ackroyd and McJoan mostly talked about Republicans on Virtually Speaking Sundays, and Digby did the same on The Majority Report with Sam Seder. It was entertaining, but I think people spend too much time talking about the Republicans, and I’m a bit annoyed by the effort involved in, say, unpacking Ron Paul, worthy effort though it may be, when there is the much larger issue of restoring liberalism at stake. Talking about Ron Paul’s connections to the Koch brothers is all very well, but if you’re ignoring the Democratic Party’s own ties to some of the most right-wing funders in America, you are missing the larger point, which is that our entire political apparatus has been hijacked by these people.

Electing Democrats no longer means building and promoting liberal policies, it just means we don’t fight as hard to do it because we’re supposed to be protecting and defending Democrats – even Democrats whose “strategy”, apparently, is to sabotage their own party. But if the Democratic leadership is manifestly unliberal, as it certainly is, why would we want to defend them? What is the point of electing Democrats whose sole purpose is to help the Republicans slip their own hideously right-wing policies by us without our fighting back?

Remember, George W. Bush tried to privatize Social Security, but he failed, and he failed because people – with liberals leading the charge – fought back, to the point where even registered Republicans realized what was going on and called their GOP Congresscreeps and let them know they’d never get another vote from them if they signed on to this outrage. Now Obama is trying to wreck Social Security, and where are those people? Well, they’re not telling people to call their Congressmen, because they are still too busy telling us how awful the Republicans are, as if only the Republicans were doing anything outrageous.

Home births

Although all the reasons they list in this story are factors, they’re missing the biggest one: Namely, that a lot of families no longer have health insurance. I was a lay midwife in the ’80s, and believe me, cost was a big reason for many, many pregnant women during Reagan’s recession.

Why is that so hard to understand? I mean, what are their other options?

Jessica Wilcox thinks her in-laws still view her ideas about childbirth as kind of out there, but it’s hard to argue with success: In the last five years or so, Wilcox has given birth to two boys and two girls — each weighing more than 10 pounds — at her northern Virginia home. And she hopes to do it again one or two more times.

Wilcox is part of a small but growing trend. While home births are still rare in the United States, they’ve posted a surprising climb in recent years, according to a government report out Thursday.

Jessica Wilcox has given birth to her two sons and two daughters at their northern Virginia home.
After declining from 1990 to 2004, the percentage of U.S. births that occurred at home jumped 29 percent from 2004 to 2009, when it hit the highest level since researchers began collecting data 20 years earlier.
Non-Hispanic white women were most likely to give birth at home in 2009, with one in every 90 births, or about 1.1 percent, in that group taking place at home. That represents an increase of 36 percent over 2004.

Still, Wilcox’s children represent only a tiny minority. In 2009, 29,650 U.S. births, or .72 percent of total births, occurred at home. Compare that to, say, 1940, when 40 percent of births took place at home.
Home births today tend to be more common among women 35 and older and among women with several previous children, according to the new report from the Centers for Disease Control and Prevention’s National Center for Health Statistics. They’re most common in states with renegade reputations, such as Montana, which had the highest percentage of home births, nearly 2.6 percent, followed by Oregon and Vermont, with nearly 2 percent each.

A life-affirming little theft

Jennifer Egan, author of A Visit From the Goon Squad, read Wednesday night at Rutgers-Camden from the book’s opening story, “Found Objects,” about a New York City woman named Sasha who has a one-night stand with a man named Alex. Sasha finds time to indulge her ruling compulsion, kleptomania, when Alex uses her bathroom, and this is where Egan conjures up the sort of little surprise that makes fiction worth reading. More here.

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