At Truth Out, there is an item Joseph E. Stiglitz | The Price of Inequality . The following is a quote from the article:

It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: even bankers who had led the global economy, as well as their own firms, to the brink of ruin, received outsize bonuses.

A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).

Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.

The usual cry from politicians like Mitt Romney and Scott Brown is that the rich deserve their income and low taxes.  No doubt some of them do.  However, it is about time we stop falling for such stereotypes as a generalization for the vast majority of the very rich.

Of course, there are even readers of this blog who might say, “Who is this guy Stiglitz, and what does he know?”  I’d prefer to understand his arguments and judge them on their merits than resort to a war of credentials.  There are a number of highly credentialed people whose judgment isn’t worth a bucket of spit. However, some of my readers do seem to be impressed by credentials so here it is from the article itself.

Nobel Prize-winning economist

I generally downplay the Nobel Prize in Economics by reminding myself that Milton Friedman also won a Nobel Prize.  So the prize in and of itself doesn’t prove much.

Here is the beginning of what WikiPedia has to say:

Joseph Eugene Stiglitz, ForMemRS, FBA (born February 9, 1943) is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is also the former Senior Vice President and Chief Economist of the World Bank. He is known for his critical view of the management of globalization, free-market economists (whom he calls “free market fundamentalists“) and some international institutions like the International Monetary Fund and the World Bank.

In 2000, Stiglitz founded the Initiative for Policy Dialogue (IPD), a think tank on international development based at Columbia University. Since 2001, he has been a member of the Columbia faculty, and has been a University Professor since 2003. He also chairs the University of Manchester‘s Brooks World Poverty Institute and is a member of the Pontifical Academy of Social Sciences. Stiglitz is an honorary doctor of Durham Business School,^[1] an honorary doctor at the Charles University, an honorary professor at Tsinghua University School of Public Policy and Management and a member of the Executive and Supervisory Committee (ESC)^[2] of CERGE-EI in Prague. Stiglitz is one of the most frequently cited economists in the world.^[3]

Are you suitably impressed yet?

From a McClatchy news story, At G-20’s closing, Obama prods Europe to boost growth, I have taken the following quotes:

Treasury Under Secretary Lael Brainard told reporters Monday that the administration expected to see “a high degree of resolve to work together to address financial market tensions and more clarity about the need to strengthen demand.”
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Treasury Secretary Timothy Geithner said the Europeans were designing the “financial architecture” to secure their financial system, including seeing that especially hard-hit countries like Spain and Italy that are making long-term reforms can borrow at existing low interest rates.

“Those two things are very important,” he said. “Not just the long-term reforms to build a stronger Europe, but the immediate steps to make sure that they’re stabilizing their financial systems and making sure these reforms can really work.”

And he said the Europeans have agreed to a focus on economic growth, “because of course, for these reforms to work in Europe over time, Europe needs to grow faster.”

Brainard said there had been a “noticeable shift in the European discussion recognizing the critical importance of supporting demand and job growth,” and she said the Europeans were looking at supporting project bonds and strengthening the European investment bank. Asked whether the shift included the German contingent, Brainard said it did.

“I think you’ll see it both in the documents and in their discussions,” she said.

In my recent conversations, I have spoken to two people who I thought were diehard Obama supporters in the current Presidential contest, and yet they don’t seem to understand the wisdom of what Obama is trying to do about the European situation.  Even the Treasury Secretary, Tim Geithner, seemed to be slow to catch on, but he has come around to the accepted macro-economic view of what is ailing the world economy.

I know how hard it is to understand how macro-economics differs from micro-economics in a few key aspects.  As hard as I try to explain it, people who have a strong moral view about about actions taken in the micro-economics realm cannot seem to let some of these ideas go when thinking about macro-economics.

As an engineer and as a sailor, I know that sometimes what applies in the small absolutely must not be tried in the large.  What I did sailing my 11 foot  Sunfish sailboard did not always apply to my 26 foot sailboat. (By volume and weight, the 26 foot boat is 13 times bigger than the 11 foot boat.)  I also know that no small boat sailor would have been aware of the problem that occurred when the QE2 sailed near Martha’s Vineyard at a speed that increased its draft beyond the depth of the water it was in. (The QE2 is on the order of 57,000 times the weight and volume of my 26 foot boat.)

People who run really big things have to be aware of all sorts of effects that people who run small things never have to worry about.  It is impossible for people who run small things to even imagine the issues confronting people who run big things.  People who only run small things need to read about the problems that occur with big things with an open mind.  If they cannot fathom (pun intended) the concept that there are differences between the large and the small, they simply dismiss what the read about the problems of the large.  I am hoping that the boating analogy used above can be mind and eye opening to the possibilities.

Economist Paul Krugman on Germany’s ‘Whips and Scourges’ has an excellent interview of Paul Krugman on PBS explaining some important issues about the current financial crisis in Europe. There is no date given for the interview. However Krugman is obviously speaking at a time when Nicolas Sarkozy was still President of France. That ended on May 15. This would put the interview at least a month old.

At the end of the article is “a rebuttal of sorts from Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics.” I guess this is just proof that you can find whatever view you want whenever you look at the same set of facts. I don’t think the Peterson Institute is quite as bad as The American Enterprise Institute, but they do seem to have a decided institutional point of view as reflected by Jacob Kirkegaard.

The pointer to this interview and article was sent to me by someone who thought it contradicted Paul Krugman as quoted in my previous post We Don’t Need No Education. Try as I might, I cannot see where there is a contradiction.

A local newspaper ran the Associated Press story with the headline High court rejects a challenge to DNA evidence. The article explained the case as follows:

The case grew out of a DNA expert’s testimony that helped convict Williams of rape. The expert testified that Williams’s DNA matched a sample taken from the victim, but the expert played no role in the tests that extracted genetic evidence from the victim’s sample.

No one from the company that performed the analysis showed up at the trial to defend it.

The court has previously ruled that defendants have the right to cross-examine the forensic analysts who prepare laboratory reports used at trial.

In this case, the state of Illinois said that the DNA expert who matched the two samples played the critical role – even though she did not actually extract the DNA samples and conduct the tests – and that she testified and was subjected to a thorough cross-examination.

Judge Clarence Thomas broke the tie vote with his separate opinion.  According to the article,

In the middle was Thomas, writing only for himself, but controlling the outcome of the case. Thomas said the lab report used in this case could not be considered testimonial and so does not fall under the Constitution’s cross-examination requirement.

The report “lacks the solemnity of an affidavit or deposition, for it is neither a sworn nor a certified declaration of fact,’’ Thomas said. It may be used at trial, but the judge who presided at Williams’ bench trial in the absence of a jury did not have to lend it much credence.

In her opinion, Kagan said the court muddied the issue in this case.

It appears that Judge Clarence Thomas tries to play word games and uses faulty logic to come to an absurd conclusion.  With the slightest knowledge of recent famous court cases, he could have come to the right conclusion and not embarrassed himself with his own writings.

The expert witness may have provided completely accurate testimony based on the evidence that the expert witness saw.  However, if the person who extracted the DNA samples had been present to testify, the defense council would have been able to ask the technician questions about how the samples were extracted.  In particular, the council would have asked what measures were taken to isolate the sample taken from the defendant from the sample taken from  the victim.  The O. J. Simpson acquittal rested in large part from the possibility that one sample had been contaminated by the second sample.  If such contamination had occurred, then finding the defendant’s DNA in the victim’s DNA sample would be quite possible without proving that the defendant had anything to do with the victim.

Of course, I am only basing my judgment on the newspaper article.  There are several possibilities that I can think of as a result.

1. The Associated Press or the newspaper editors are incompetent at reporting and/or editing the article, and they left out the most important parts.
2. The defense council arguing before the Supreme Court was incompetent, and failed to present the main reason for wanting the technician who took the samples to have testified.
3. Five of the Supreme Court Justices are incompetent as lawyers, and were incapable of figuring out for themselves why a defense council would have a need to cross-examine the technician, among others.

Given this Supreme Court ruling, defense council will now have to remember to ask such expert witnesses how they can be sure that the samples were properly taken and were not contaminated. If the expert witness can not make such assurances, then the testimony is of no value. Maybe that is where the incompetence of the defense is only compounded by the incompetence of the Supreme Court.

I could be mistaken in all this if it turns out that The Associated Press completely missed the point of the Supreme Court proceedings. It wouldn’t be the first time.

McClatchy has the story Ahead of G20 summit, Obama camp says Romney crossed the line with Europe policy critique.  The story quotes a Romney adviser.

The Romney piece by senior economic adviser Glenn Hubbard, ran in Handelsblatt, a German business newspaper. It took the administration to task for what Hubbard called an “unwise” strategy that showed “ignorance of the causes of the crisis and of a growth trend in the future.”

Talk about “ignorance of the causes of the crisis and of a growth trend in the future” Glennn Hubbard is the one displaying ignorance.  As Dean of the Columbia University Graduate School of Business, perhaps you don’t need to know anything about macro-economics.  If micro-economics is all you know, can you be forgiven for thinking that your knowledge applies to national and international economics?  No, I do not think you can be forgiven.  I learned more about macro-economics in my first economics course than Glenn Hubbard seems to be displaying here.

Of course Hubbard is playing “expert” witness to the Romney campaign.  In that role, he says whatever the paymaster asks him to say.

In my previous post, We Don’t Need No Education, I quoted Paul Krugman as saying:

In fact, almost everyone following the situation now realizes that Germany’s austerity obsession has brought Europe to the edge of catastrophe — almost everyone, that is, except the Germans themselves and, it turns out, the Romney economic team.

You can’t just pick which expert you want to believe.  You have to hear the explanation that backs up what they say.  In this case the economic theory behind Paul Krugman’s remarks makes much more sense than the explanation behind what Hubbard has to say.

The New York Times has Paul Krugman’s column, We Don’t Need No Education.

Conservatives would have you believe that our disappointing economic performance has somehow been caused by excessive government spending, which crowds out private job creation. But the reality is that private-sector job growth has more or less matched the recoveries from the last two recessions; the big difference this time is an unprecedented fall in public employment, which is now about 1.4 million jobs less than it would be if it had grown as fast as it did under President George W. Bush.

And, if we had those extra jobs, the unemployment rate would be much lower than it is — something like 7.3 percent instead of 8.2 percent. It sure looks as if cutting government when the economy is deeply depressed hurts rather than helps the American people.

And here is a paragraph singled out by me and dedicated to two cousins I was speaking to this weekend.

In fact, almost everyone following the situation now realizes that Germany’s austerity obsession has brought Europe to the edge of catastrophe — almost everyone, that is, except the Germans themselves and, it turns out, the Romney economic team.

My cousins still believe that the European problem lies with Spain.  When I told them that the actual problem is caused by Germany, not Spain, I have no doubt they dismissed that idea as coming from someone who had too much to drink at the wedding.

Truth Out has the video and a transcript of Elizabeth Warren’s Keynote Speech at Netroots Nation.

I have heard suggestions that Elizabeth Warren should talk more about exactly what is wrong with her opponent’s voting record. How about the following example from this speech:

When some of us were working to rein in Wall Street, the Republicans were fighting regulation tooth and nail. Scott Brown personally held the reforms hostage as he negotiated to weaken the rules and to give the big banks a $19 billion break. Scott Brown and his Republican buddies voted against funding for summer jobs, and voted twice to let the interest rate on student loans double. Just this week, Scott Brown and his Republican buddies voted for the second time against equal pay for equal work. And just a couple of months ago, he sponsored a law to let employers block access to birth control and routine cancer screenings from health insurance.

This is a bit of an experiment. I have set up a page on the Elizabeth Warren – Senator For Massachusetts web site. I’ve put in more details of the event on the Warren sponsored web page. If you would like to attend, please email your RSVP to me.

Here is the speech that President Obama gave in Ohio that just lays it on the line in very clear terms.

What we do right now will determine the path our country takes for the next four years.

It’s that simple.

What he didn’t say quite clearly enough for me is that not only must we put him back in office, but we must change Congress to remove the gridlock. If the American voters cannot make up their minds in a sufficiently clear way, then we will muddle through another 4 years of going almost nowhere.

If all of the rest of the world were as undecided as we are and were as feckless as we have been in the 2010 election, then we will all be making very little progress at about the same rate. Even though there are many countries who are as confused as we are, there are some who are not. We can commiserate with all the other countries falling to the back of the pack with us, while a few head to the front.

The decision is in our hands and the decision will have major consequences for our future. Let us hope that the American people are up to the challenge. This time around, it is not a foregone conclusion. There is a significant chance that we will fail to rise to the challenge this time. There will be nobody to blame but ourselves if we fail.

Let me be clear, in case you cannot deduce what I am saying about Congress. This country will not recover if we fail to send President Obama back to the White House. However, even if we re-elect President Obama, if we send Scott Brown back to the Senate, there still will not be any progress. Doing half the job as a voter just won’t cut it at this particularly hazardous moment in our history.

Here is the video of Elizabeth Warren’s June 13 appearance on Hardball with Chris Matthews.

I think she did a good job talking about the issues, but she did evade questions about why she isn’t doing better in the polls. I think she was right to focus on the issues rather than get into the game of inside politics.

I just hope that inside her political organization, they are thinking hard about the issues Matthews raised. It is obvious to me in seeing her in person at various events, that she is working her heart out. She is working so hard, I worry she is losing weight when she didn’t have any spare weight to lose in the first place. Working harder at what she is already doing is not the solution in this case. I am not sure any human being could work harder. So now is the time to look at working smarter.

When the campaign “professionals” cannot see that continuing to use the old “Elizabeth Warren for Massachusetts” slogan instead of the new “Elizabeth Warren for Senate” slogan, or the Deval Patrick phrase “Elizabeth Warren – Senator for All of Massachusetts” is doing unnecessary harm to the campaign and it would be trivial to fix it, you do have to wonder what they are up to.

The campaign headquarters still answers the phone “Elizabeth Warren for Massachusetts”. I asked them, “Why oh why do you still say that instead of ‘Elizabeth Warren for Senate'”. The person on the other end of the phone said he would pass my suggestion on. In parting he asked whether I really thought the new slogan would be better. I had all I could do to not reply, “Well, duh?” Instead, I explained that as I go around in the field and people ask me what she is running for, I have to wonder why the campaign isn’t doing more to put that question to bed. (Of course the signs, bumper stickers, and campaign paraphernalia I make myself all do say “Elizabeth Warren for Senate” or sometimes “Elizabeth Warren – Senator for Massachusetts”. The official signs from the campaign now do say “Elizabeth Warren for Senate”, so at least one faction in the campaign hierarchy gets it.)

When I get an appeal from “Elizabeth Warren for Massachusetts”, I have taken to replying that I would be happy to comply with resuests from “Elizabeth Warren for Senate”, but I no longer comply with anything asked of me from “Elizabeth Warren for Massachusetts”.