Daily Archives: December 19, 2012


Cutting Social Security benefits is a cruel, stupid policy

This headline is a quote from the Paul Krugman post The Deal Dilemma.

Switching from the regular CPI to the chained CPI doesn’t affect benefits immediately after retirement, which are based on your past earnings.What it does mean is that after retirement your payments grow more slowly, about 0.3 percent each year. So if you retire at 65, your income at 75 would be 3 percent less under this proposal than under current law; at 85 it would be 6 percent less; there’s supposedly a bump-up in benefits for people who make it that far.

This is not good; there’s no good policy reason to be doing this, because the savings won’t have any significant impact on the underlying budget issues. And for many older people it would hurt. Also, the symbolism of a Democratic president cutting Social Security is pretty awful.

I have already called my representative Richard Neal, to tell him that I hope he publicly opposes this cut to Social Security.  His staff person who answered told me that Neal does not consider this to be a cut.  I told him that I did.  From what I have heard, seniors have a faster rising cost of living than other citizens.  As Krugman says, it would be “cruel , stupid policy” to change their formula for cost of living raises to be less than the general population.

I told Congressman Neal’s office that I would prefer that he take us over the cliff than accept this compromise.  The country can get a better deal from the next Congress.  Though the gist of the Krugman article is that he is not so sure which deal would be better.

Tell the President: No Deal That Cuts Benefits.


Galbraith: Change of Direction, IG Metall Conference

Mark Thoma has posted the transcript of speech Galbraith: Change of Direction.  Here is the link to the audio of the speech.  The audio has some annoying background noises, but is quite understandable.  If this noise is too annoying for you, you can read the transcript.  If the following teaser is not enough to get you to listen, then there is probably nothing I could have said to change your mind.

Yesterday we heard Professor Nouriel Roubini give a magisterial and very high speed tour of the world situation making it clear of course that the promised recovery has not occurred. But if Nouriel is Sir Isaiah Berlin’s fox, who knows many things, let me try this morning to be the hedgehog who knows one big thing, and that one big thing is that what we are experiencing is a single, unified, global crisis of the economy and of the financial system. It is not a cluster of distinct and separated events; a subprime crisis in the United States; a public debt crisis in Greece; a bank crisis in Iceland; a real estate bust in Ireland and Spain; nor are there distinct U.S. and European crises, nor can the financial be separated from the real, nor is Germany a country to which crisis has not yet come with the suggestion that there might be some separate way out. There is one crisis, only one crisis, a deeply interconnected crisis of the world system. This crisis has, I think, three deep sources going back not twenty years but forty years to the early 1970s and the end of what we sometimes call the “golden age,” the “glorious thirty” years in the immediate aftermath of the second World War.


For the sake of context, you might be interested in the WikiPedia definition of IG Metall.

IG Metall (German: Industriegewerkschaft Metall, “Industrial Union of Metalworkers'”) is the dominant metalworkers’ union in Germany. Analysts of German labor relations consider it a major trend-setter in national bargaining. As a metalworkers’ union, it represents workers in the motor vehicle industry. Significantly, IG Metall represents both blue- and white-collar workers.



Interview With James Galbraith

Mark Thoma has posted an Interview with James Galbraith that was conducted by Roger Strassburg in the German publication NachDenkSeiten.  I give the link to Thoma’s post of the interview just so you get a few introductory remarks and also get a chance to see other links on his blog.  One of those links is to a speech made by James Galbraith at a conference in Germany. The actual interview on the original site are part 1 and part 2.

The teaser I have chosen from the interview is a response by James Galbraith:

The specifics of this begin with the question of the debt, and recognition that you cannot adjust your way out of a debt that can’t be paid. A debt that can’t be paid won’t be paid. The sooner you relieve the burden of that debt, the better off you are.

This is just an example of the practicality of the discussion.  I see it as an attempt of both the interviewer and the interviewee trying to get people to see reality as it is rather than as their preconceived notions would want it to be.


Untold History: Early US Imperialism, Hitler, Roosevelt, The Spanish Civil War

The Real News Network has the dialog Untold History: Early US Imperialism, Hitler, Roosevelt, The Spanish Civil War as the second part of the series.  I posted the first part previously in The Making of “Untold History of the United States”.


It is hard to pull out a sentence or two to act as a teaser. All I can say is that it is a fascinating discussion of history. As in any telling of history, I am no authority to tell you who is right, or wrong, or even anywhere near the truth on what actually happened.

I am beginning to think that the only purpose of delving into history is to get an understanding of what various people think about each other based on what their understanding of history is. The reason for people to have the attitudes they do is based on what they think history is. It almost makes no difference how close to reality that imagined history is. Our understanding of people is probably no more accurate than our understanding of history. So where does that leave us?

Maybe the real lesson is that life is just very complicated. As an engineer, I feel like the best attitude to have is to always put safety margins in your plans based on the premise that what you think you know may not be completely accurate or may not be complete. Putting such contingencies in your plans has a cost. The art of engineering is to make these contingencies as small as possible without making them too small. Competition makes for pressure to cut the safety margin. As an engineer you have to give in to that pressure enough so that your enterprise survives the competition, but not give in so much that your product becomes unsafe. That’s a neat trick if you can do it.