In reporting about a rigorous statistical analysis showing different rates of intergenerational income mobility, NYT leads with stuff they just made up. The article bungles the reporting of a significant new study by saying that commuting difficulties were found to cause reduced intergenerational income mobility. The study does not say anything like that, as the author (David Leonhardt) clarifies in a blog post pointing out a striking similarity between the map of immobility and the map of race. The Executive Summary of the study is quoted in my post.
The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying global competitiveness of American business, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency; and proposing a solution.
The other American Dream of rising incomes—Horatio Alger stories One of my earliest and longest inquiries into upward socioeconomic mobility in America. The rate of upward mobility has been declining since 1980, and Horatio Alger stories are now more likely to occur in Denmark, Norway, Finland, Canada, Australia, and other advanced nations than in the US.
How mortgage backed securities increased systemic risk The securitization of mortgages and other debt obligations gives senior tranche holders less risk of individual defaults, but increases the risk to a general economic downturn. The increase in systemic risk was not generally appreciated but is demonstrated by Coval, Jurek, and Stafford in The Economics of Structured Finance. The paper contains exceptionally lucid descriptions of how structured finance works and uses simple examples to demonstrate the sources and magnitudes of systemic risks. This post is my summary of the paper.
The American Dream died in February 1973. With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth.
The history of US per-capita petroleum consumption will surprise you. A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.
Wages for college graduates in the cross hairs of US business. How US employers are driving down domestic wages by offshoring, importing guest workers, and deliberately creating an oversupply of American college grads.
Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US or the US CEO pay market is broken.
Americans have more than enough education to fill 21st Century jobs. A chart shows that only the 3% of workers with Ph.D.s and professional degrees had increasing earnings, while earnings of those with masters and bachelors degrees or some college declined even more than the earnings of those with high school only. The fact of falling earnings is inconsistent with the claim that there is a shortage of college-educated workers.
The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."