MONDAY, DEC 9, 2013 09:11 AM EST

Paul Krugman eviscerates GOP’s “callous” stance on unemployment insurance

The New York Times columnist hits GOPers like Sen. Rand Paul for their lousy morals and bad economics

ELIAS ISQUITH

TOPICS: PAUL KRUGMAN, UNEMPLOYMENT INSURANCE, UNEMPLOYMENT, UNEMPLOYMENT BENEFITS, THE NEW YORK TIMES, POLITICS NEWS

Paul Krugman (Credit: Reuters/Anton Golubev)

For his latest article, New York Times columnist Paul Krugman inveighs against Republicans who would let unemployment benefits expire in a misguided effort to help the long-term unemployed.

“Six years have passed since the United States economy entered the Great Recession, four and a half since it officially began to recover, but long-term unemployment remains disastrously high,” Krugman writes. “And Republicans have a theory about why this is happening. Their theory is, as it happens, completely wrong. But they’re sticking to it — and as a result, 1.3 million American workers, many of them in desperate financial straits, are set to lose unemployment benefits at the end of December.”

Krugman goes on to dismantle GOP talking points on unemployment insurance, noting that they’re largely based off of decades-old academic research that, in an economy suffering from a lack of demand, don’t apply to the current situation. “[T]he G.O.P. answer to the problem of long-term unemployment is to increase the pain of the long-term unemployed,” Krugman writes. “Cut off their benefits, and they’ll go out and find jobs. How, exactly, will they find jobs when there are three times as many job-seekers as job vacancies? Details, details.”

More from Paul Krugman at the New York Times:

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The view of most labor economists now is that unemployment benefits have only a modest negative effect on job search — and in today’s economy have no negative effect at all on overall employment. On the contrary, unemployment benefits help create jobs, and cutting those benefits would depress the economy as a whole.

Ask yourself how, exactly, ending unemployment benefits would create more jobs. It’s true that some of the currently unemployed, finding themselves even more desperate than before, might manage to snatch jobs away from those who currently have them. But what would give businesses a reason to employ more workers as opposed to replacing existing workers?

You might be tempted to argue that more intense competition among workers would lead to lower wages, and that cheap labor would encourage hiring. But that argument involves a fallacy of composition. Cut the wages of some workers relative to those of other workers, and those accepting the wage cuts may gain a competitive edge. Cut everyone’s wages, however, and nobody gains an edge. All that happens is a general fall in income — which, among other things, increases the burden of household debt, and is therefore a net negative for overall employment.

Ultimately, Krugman concludes that the GOP will likely win its battle against extending unemployment benefits. “[T]he odds, I’m sorry to say, are that the long-term unemployed will be cut off, thanks to a perfect marriage of callousness — a complete lack of empathy for the unfortunate — with bad economics.”

NYPD Orders Precincts to Deny Journalists Access to Crime Reports

The NYPD has ordered police precincts to stop giving out details about local crimes to reporters, sources told DNAinfo N...

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Getty Images/Spencer Platt

NEW YORK — The NYPD has ordered the city's 77 police precincts to stop giving out any information to the media about crimes taking place in their neighborhoods, cutting off a long-standing source of information for New Yorkers.

According to a terse NYPD edict transmitted citywide, precinct commanders were instructed: “Any requests by media to view complaint reports be referred to the office of the Deputy Commissioner For Public Information.”

The NYPD's public information office, known as DCPI, typically disemminates only select major crimes such as murders, sexual assaults and grand larcenies, but often does not include lower level neighborhood crimes. Those complaints could traditionally be found at the precinct, a reliable source for information of interest for residents.

According to sources, the latest media restriction was sent last week to the precinct supervisors from their borough commanders, who received the transmission from the NYPD’s Chief of Patrol James Hall.

Reporters from DNAinfo New York, and other local news sites, experienced the crackdown this week when they were told that access to the precinct’s reports were suddenly revoked. The crackdown was first reported by The Nabe.

"It's a big policy change," a source said

However, the source questioned whether DCPI would be able to cope with the influx of media requests if reporters couldn't get information from the precincts. “DCPI is a small unit, so I don't know how they're going to handle it."

The move is the latest — and perhaps not the last — taken against the media by outgoing Police Commissioner Raymond Kelly.

“This is just another sign of the current NYPD’s hostility to public accountability," said Christopher Dunn, associate legal director of the New York Civil Liberties Union. "Starting in January, we expect the department to take a dramatically different approach to openness, one that will benefit not only local newspapers but the press and public in general."

Under his stewardship, DCPI has systematically diminished the type of information it provides as well as overall access to department personnel. The clampdown evolved even though Mayor Michael Bloomberg, a media mogul, pledged that his administration would be a beacon of open government and transparency.

Kelly made himself the face of the NYPD and, with rare exception, the only police person permitted to speak to television, radio and print reporters about department matters, large and small.

Leaked information not sanctioned by the NYPD has led to what critics call "witch hunts" inside the department, including suspected leakers being grilled by the Internal Affairs Bureau.

Kelly went so far as to attempt to oust the city's in-house press corps, including the New York Times, the AP, the Daily News and the New York Post, among others, from their offices within Police Headquarters several years ago.

The news came in a two paragraph letter that gave barely one month's notice, claiming there was no longer room for them inside One Police Plaza. The eviction was halted, only after owners of several news outlets complained to Mayor Bloomberg.

The NYPD released a statement early Friday evening:

"The New York City Police Department’s Patrol Guide clearly states that all media requests shall occur through the Office of the Deputy Commissioner, Public Information (DCPI). Local crime information is available to media and distributed through DCPI, which is operational 24/7 to facilitate press inquiries from the media. This procedure has been in place for decades."

Senator: Extending Unemployment Benefits Would Do ‘Disservice’ To Unemployed

ON DECEMBER 9, 2013 AT 8:43 AM

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Appearing on Fox News Sunday, Sen. Rand Paul (R-KY) said that while he supports unemployment benefits for workers up to 26 weeks, he doesn’t support extending them beyond that cutoff.

“I do support unemployment benefits for the 26 weeks that they’re paid for,” he said. “If you extend it beyond that, you do a disservice to these workers.”

He went on to explain that a study showed that a worker who has been unemployed for four weeks and on unemployment insurance is more likely to be hired than one who has been unemployed for 99 weeks and receiving the benefits. But that mischaracterizes the situation: while many studies have shown that the long-term unemployed have a much harder time getting interest from prospective employers than those who have been out of work for a shorter period of time, it isn’t because of the benefits. Some employers say outright they just won’t consider anyone who has been unemployed for a lengthy period of time. Yet the long-term unemployed look very similar to the short-term unemployed — they’ve just had a harder time finding a job in an economy where there are more than four unemployed workers for every job opening.

But even with the cards stacked against them, there’s reason to believe that unemployment benefits help, not hurt, people in getting new jobs. Those receiving benefits spend more time job-hunting than those who don’t. That’s thanks both to the requirements of the program, which dictate a certain effort of looking for new work, and because the financial assistance can help with the basics of job hunting, like paying for internet service and gas, as Maurice Emsellem of the National Employment Law Project previously told ThinkProgress.

While most states provide unemployment benefits up until the 26-week cutoff Paul endorsed, federal benefits kick in after that. Yet the 1.3 million recipients will be abruptly cut off at the end of the year if Congress doesn’t reauthorize the program as it has 11 times since it was first enacted in June. The long-term unemployed still make up nearly 40 percent of all unemployed people even with an improving jobs picture.

Losing the benefits will mean losing a vital lifeline for many of these workers. Lillian Humphrey told ThinkProgress that she’ll have to tap into Social Security and yet still find a part-time job if she stops getting an unemployment check. Alan said that he will have to give up on his plan to train as an English teacher and move in with a friend in another state. John De Marchi will have to leave the career as a 3-D artist he worked nine years to enter and take a sales job to continue supporting his household.

New hedge funds need $300 mln just to break even: Survey

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 Published: Monday, 9 Dec 2013 | 11:44 AM ET

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Traders launching a hedge fund need to raise at least $300 million in assets to pay for rising regulatory costs and to offset lower fees, a survey showed, a far cry from the pre-crisis days when managers could start with tens of millions.

According to the survey by Citi, hedge funds now charge annual management fees of as low as 1.58 percent of assets, down from the traditional 2 percent that larger funds still command.

Added to this, compliance and regulatory costs have risen because of new rules such as the Alternative Investment Fund Managers Directive in Europe and Dodd-Frank legislation in the United States.

(Read more: Hedge funds shift strategy in bid for growth)

"Fee compression continues to reshape the business of hedge funds, lowering fees even as expenses rise, all but eliminating fee-only operating margins, and raising the level of assets needed for a hedge fund business to succeed,'' said Alan Pace,Global Head of Prime Brokerage and Client Experience at Citi.

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Rough time for hedge funds

Why hedge funds are having a hard year, and the impact to hedge funds if the Fed decides to taper, with Anthony Scaramucci of SkyBridge Capital.

The findings underline the diverging fortunes of hedge funds today. While larger firms have sucked in the bulk of new cash flooding into the industry from institutional investors, smaller funds have struggled to raise assets.

The structure of hedge fund fees—typically an annual 2 percent management charge and a 20 percent performance fee—also means bigger firms can enjoy huge revenues and absorb increased regulatory costs even without generating positive returns for their clients.

By contrast, until smaller funds break the $1 billion in assets mark, they will struggle to cover expenses from management fees alone, the survey showed, meaning managers must increase assets and produce a positive performance or subsidize a loss-making business.

(Watch: Hedge funds into non-traditional spheres)

The situation is worse in Europe, Citi said, where company expenses were at least 20 percent higher than for U.S. firms and managers are worrying more about upcoming regulations.

The study surveyed 124 hedge fund firms representing $465 billion, or 18 percent plus of total industry assets.

Riots Break Out In Singapore; Think Your Country Is Immune?

Submitted by Tyler Durden on 12/09/2013 12:36 -0500

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Submitted by Simon Black of Sovereign Man blog,

Mohamed Bouazizi. It’s not a name that means much to most people. But you’ll recall his story.

Frustrated with the absurd amount of regulation and corruption that prevented him from being able to put food on the table for his family, Bouazizi was the 26-year old Tunisian fruit merchant that set himself on fire in 2011.

In doing so, all the pent up frustration across the Middle East and North Africa erupted all at once; the entire region immediately plunged into multi-year revolution which became known as the Arab Spring that has since toppled a number of governments.

Like individual people, societies have their own breaking points. They build up anger and frustration for years… sometimes decades. Then all it takes is one spark. One catalyst. And it all becomes unglued.

Just yesterday, a 33-year old Indian man got hit by the proverbial bus in Singapore’s Little India neighborhood. That was the catalyst. What transpired for the next several hours was a full blown riot… the first of its kind since 1969.

Several hundred rioters stormed the streets. They started off smashing the up the bus that was still on the corner of Hampshire Road and Race Course Road. Then they started throwing objects at the ambulance staff who were unsuccessful in extracting the man in time to save his life.

By the end of the evening, an angry mob had lit five police vehicles on fire, plus the ambulance, leaving the streets in a towering inferno.

The government immediately went into damage control mode trying to explain what happened. But the explanation is really quite simple.

Singapore has had years of tensions building. The wealth gap is growing like crazy. Wealthy people are becoming ultra-wealthy, while the majority of folks see the cost of living rise at an alarming rate.

Strong ideological and ethnic differences are boiling over. And backlash against immigrants, especially from certain countries, is becoming an acute and obvious problem.

These issues are commonplace. Ideological differences. The wealth gap and economic uncertainty. Immigration challenges.

They’re the same issues, for example, that have plunged much of Europe into turmoil, including the rise of a blatantly fascist political party in Greece.

And these same issues exist, in abundance, in the Land of the Free… where a number of serious ideological divides are becoming obvious social chasms.

Printing money with wanton abandon. Racking up the greatest debt burden in the history of the world. Doling out wasteful and offensively incompetent social welfare programs at the expense of the middle class. Brazenly spying on your own citizens. These are not actions without consequences.

And if it can happen in Singapore - one of the safest, most stable countries on the planet, it can happen anywhere. Even in a sterile American suburb.

MONDAY, DEC 9, 2013 11:15 AM EST

3 ways the super-rich suck wealth from the rest of us

The financial industry has, in effect, created a whole new share of global wealth

PAUL BUCHHEIT, ALTERNET

TOPICS: ALTERNET, INEQUALITY, U.S. ECONOMY, WEALTH, POVERTY, BUSINESS NEWS, NEWS

(Credit: AP/Diane Bondareff)

This article originally appeared on AlterNet.

The facts are indisputable, the conclusion painful. The wealthiest people in the U.S. and around the world have used the stock market and the deregulated  financial system to lay claim to the resources that should belong to all of us.

This is not a matter of productive people benefiting from their contributions to society. This is a relatively small number of people extracting massive amounts of money through the financial system for accomplishing almost nothing.

1. They’ve Taken $1.6 Million Per Family in New Wealth Since the Recession

The richest 5% of American families each gained at least that much in five years, mostly from the stock market. Using data from  Credit Suisse, the Economic Policy Institute, Pew Research, and the  Census Bureau and two separate analyses (shown here and here), this extraordinary wealth grab can be calculated.

To briefly summarize, the richest 5% (six million households) own about two-thirds of the wealth, or about $10 trillion of the $15 trillion in financial wealth gained since the recession. That’s $1,667,000 per household. Calculations based on alternate sources resulted in a gain of over $2 million per household.

It is noteworthy that most of their windfall came from  stock market gains rather than from job-creating business ventures. The stock market has, once again, been forming an overblown bubble of wealth that does not reflect the relative degrees of productivity of workers around America. The market has more than doubled in value since the recession, and the richest 5% own about  80% of all non-pension stocks.

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2. They Create Imaginary Money That Turns Real

The world’s wealth has  doubled in a little over ten years. The financial industry has, in effect, created a whole new share of global wealth and redistributed much of it to itself.

In the U.S., financial sector profits as a percentage of corporate profits have been  rising steadily over the past 30 years. The speculative, non-productive, and fee-generating  derivatives market has increased to an unfathomable level of over  $1 quadrillion – a thousand trillion dollars, twenty times more than the world economy.

With the U.S. driving the expansion of this great bubble of wealth, our nation has become the fifth-most  wealth-unequalcountry in the world, while global inequality ( between rather than  within countries) has become even worse than for any one country. Just  250 individuals have more money than the total annual living expenses of  almost half the world - three billion people.

3. They’ve Stopped Payment on Productive Americans

Reputable sources agree that the working class has not been properly compensated for its  productivity, and that the  “rent-seeking” behavior of the financial industry, rather than changes in technology, is extracting wealth from society.

As a result, our median inflation-adjusted household  wealth has  dropped from $73,000 to $57,000 in a little over 25 years. We’ve lost another  five percent of our wealth since the recession.

Shockingly, only one out of four Americans, according to a survey by Bankrate.com, “have six months’ worth of expenses for use in emergency, the minimum recommended by many financial planning experts.”

The End Result? That suction-like sound is the financial industry soaking up our country’s wealth.