Yggy Pop

From my last post:

I was planning to post about Matty Yglesias, using a column Thers referenced and one other. Only just now did I notice that the 'other one' was written by Ezra Klein instead. Go figure!

In my defense, Matt Yglesias and Ezra Klein wrote essentially the same post within a half hour of each other. Knowing that Yggy was moving to the Washington Post corporation (albeit Slate), I searched WaPo for the topic. Eventually I noticed the authors were different people, thanks to Pinko's entry in the latest Three Bulls! Header Contest. They don't look the same. In any case the WaPo now owns 100% of the hive mind.



From Ezra:

The question is what, if anything, comes next for Occupy Wall Street. The movement has already scored some big wins. As this graph by Dylan Byers showed, they have changed the national conversation. Income inequality is now a top-tier issue. Before Occupy Wall Street, it wasn’t.

Shorter: "OMG, Bloomberg could have ignored OWS, and then we could have done the same!"

Income inequality has been increasing for some time. It isn't some cat that is alive or dead depending on whether or not the likes of Ezra Klein, Matt Yglesias, or anyone else in the press is forced by OWS to write about it.

Having said that, I don't think 'income inequality' comes close to describing the issues that have created OWS. All that says is some people get a lot less, others get a lot more. This is true, but it leaves the door open for the counterclaim that the OWS is "just jealous of the job creators." (More discussion of the semantics in this thread.)

For 30 years, people who make money with their money have had the government tilt the table in their favor. Everyone else has gotten the short end of the stick. This has happened through tax policy, deregulation and approval of merger after merger, trade policy, and through chipping away at the the social safety net. And of course, our government comes to the rescue of the Randroid Masters of the Universe when the bets they've made with their too-big-to-fail banks turn out the the wrong way.

And it's also been accompanied by judicial inequality. One law for the plutocrats, and another for everyone else.

DOJ has obtained ten convictions of senior insiders of mortgage lenders (all from one obscure mortgage bank) v. over 1000 felony convictions in the S&L debacle. DOJ has not conducted an investigation worthy of the name of any of the largest accounting control frauds. DOJ is actively opposing investigating the systemically dangerous institutions (SDIs).

The elections of 2006 and 2008 did not change this in any way. Banks still own the place, and both parties curry their favor.

But we have plenty of law enforcement focused on peaceful members of OWS attempting to exercise their rights to free speech.





I see plenty of skepticism around the innertoobz as to what OWS will eventually accomplish. I have a lot more faith in OWS than I have in Obama and the Democrats.



UPDATE: At Naked Capitalism, Andrew Haldane, Executive Director, Financial Stability, Bank of England and Vasileios Madouros, Economist in the Financial Stability directorate of the Bank of England:

In fact, high pre-crisis returns to banking had a much more mundane explanation. They reflected simply increased risk-taking across the sector. This was not an outward shift in the portfolio possibility set of finance. Instead, it was a traverse up the high-wire of risk and return. This hire-wire act involved, on the asset side, rapid credit expansion, often through the development of poorly understood financial instruments. On the liability side, this ballooning balance sheet was financed using risky leverage, often at short maturities.
...
There is a second, equally important, reason why the measured value-added of the financial sector in the national accounts may be seriously over-stated. We now know that the risk being taken by banks was not in fact borne by them, fully or potentially even partially. Instead it has been borne by society.

That is why GDP today lies below its pre-crisis level. And it is why government balance sheets, relative to GDP, are set to double as a result of the crisis in many countries.
...
Elsewhere, we have sought to estimate those implicit subsidies to banking arising from its too big-to-fail status. For the largest 25 or so global banks, the average annual subsidy between 2007-2010 was hundreds of billions of dollars; on some estimates it was over $1 trillion (Haldane 2011). This compares with average annual profitability of the largest global banks of about $170 billion per annum in the five years ahead of the crisis.

(Cross-posted at Whiskey Fire. Mouse over pics for captions, and click them for larger versions.)
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