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Link Biscuits: 1.5.10

Submitted by Shawn Fremstad on Tue, 01/05/2010 - 22:57
  • James Galbraith, Who Are These Economists, Anyway?: "In the present crisis, the vapor trails of fraud and corruption are everywhere: from the terms of the original mortgages, to the appraisals of the houses on which they were based, to the ratings of the securities issued against those mortgages, to gross negligence of the regulators, to the notion that the risks could be laid off by credit default swaps, a substitute for insurance that lacked the critical ingredient of a traditional insurance policy, namely loss reserves. None of this was foreseen by mainstream economists, who generally find crime a topic beneath their dignity. In unraveling all this now, it is worth remembering that the resolution of the savings and loan scandal saw over a thousand industry insiders convicted and imprisoned. Plainly, the intersection of economics and criminology remains a vital field for research going forward."
  • Miller-McCune, The Revolution Will be Mapped: "The Kirwan Institute at Ohio State University engages in "opportunity mapping," which begins with the assumption that opportunities for high-quality housing, employment, education, health care and other key indicators should be distributed equally throughout a given metropolitan area. Kirwan maps identify disparities in the distribution of opportunities, which in turn provides direction for policymakers to correct those disparities. In a similar vein, the Los Angeles-based Advancement Project takes a solution-oriented approach with its mapping initiative, the Healthy City Project. An interactive, online compendium of demographic, economic and health data for Los Angeles County, Healthy City also pinpoints the location of services for referral purposes and lets users create maps to identify concerns in their own neighborhoods. Developed in collaboration with an innovative GIS lab at UCLA, the Healthy City platform is so advanced that stakeholders often consult with project staff to inform policy debates and decisions."
  • Dean Baker, Samuelson Wrong on Scarcity: "The most painful aspect of the economic crisis is that the pain is unnecessary. Ordinarily we think of the economy being limited by the supply of available resources, land, labor, and capital. We can't all have huge houses with servants. In a world where the economy is limited by supply, pain is understandable, even if not acceptable. To give one person more means taking something away from someone else. But, that is not the situation the U.S. or world economy faces today. We don't have 15 million unemployed because of scarcity. We have 15 million people unemployed because of a lack of demand. This is exactly the same problem that the country faced in the depression. All we had to do then to get people employed was to spend money, which we eventually did in very large amounts to fight World War II. That is what we need to do now to end the enormous pain caused by this downturn. Unfortunately, there is a lack of political will to undertake the necessary spending in part because of political hacks running around complaining about deficits. This is why it is especially painful to see Washington Post columnist Robert Samuelson refer to the "scarcity" in which today's youth are being raised. In fact, they are being raised in a period of unprecedented abundance. It only looks like scarcity because the country's economic policy is so awful."