February 19, 2013 archive

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 19 is the 50th day of the year in the Gregorian calendar. There are 315 days remaining until the end of the year (316 in leap years).

On this day in 1942, U.S. President Franklin D. Roosevelt signs Executive Order 9066, authorizing the removal of any or all people from military areas “as deemed necessary or desirable.” The military in turn defined the entire West Coast, home to the majority of Americans of Japanese ancestry or citizenship, as a military area. By June, more than 110,000 Japanese Americans were relocated to remote internment camps built by the U.S. military in scattered locations around the country. For the next two and a half years, many of these Japanese Americans endured extremely difficult living conditions and poor treatment by their military guards.

The Order

The order authorized the Secretary of War and U.S. armed forces commanders to declare areas of the United States as military areas “from which any or all persons may be excluded,” although it did not name any nationality or ethnic group. It was eventually applied to one-third of the land area of the U.S. (mostly in the West) and was used against those with “Foreign Enemy Ancestry” – Japanese.

The order led to the internment of Japanese Americans or AJAs (Americans of Japanese Ancestry); some 120,000 ethnic Japanese people were held in internment camps for the duration of the war. Of the Japanese interned, 62% were Nisei (American-born, second-generation Japanese American and therefore American citizens) or Sansei (third-generation Japanese American, also American citizens) and the rest were Issei (Japanese immigrants and resident aliens, first-generation Japanese American).

Japanese Americans were by far the most widely affected group, as all persons with Japanese ancestry were removed from the West Coast and southern Arizona. As then California Attorney General Earl Warren put it, “When we are dealing with the Caucasian race we have methods that will test the loyalty of them. But when we deal with the Japanese, we are on an entirely different field.” In Hawaii, where there were 140,000 Americans of Japanese Ancestry (constituting 37% of the population), only selected individuals of heightened perceived risk were interned.

Americans of Italian and German ancestry were also targeted by these restrictions, including internment. 11,000 people of German ancestry were interned, as were 3,000 people of Italian ancestry, along with some Jewish refugees. The Jewish refugees who were interned came from Germany, and the U.S. government didn’t differentiate between ethnic Jews and ethnic Germans (jewish was defined as religious practice). Some of the internees of European descent were interned only briefly, and others were held for several years beyond the end of the war. Like the Japanese internees, these smaller groups had American-born citizens in their numbers, especially among the children. A few members of ethnicities of other Axis countries were interned, but exact numbers are unknown.

Secretary of War Henry L. Stimson was responsible for assisting relocated people with transport, food, shelter, and other accommodations.

Opposition

FBI Director J. Edgar Hoover opposed the internment, not on constitutional grounds, but because he believed that the most likely spies had already been arrested by the FBI shortly after the Japanese surprise attack on Pearl Harbor. First lady Eleanor Roosevelt was also opposed to Executive Order 9066. She spoke privately many times with her husband, but was unsuccessful in convincing him not to sign it

Post World War II

Executive Order 9066 was rescinded by Gerald Ford on February 19, 1976. In 1980, Jimmy Carter signed legislation to create the Commission on Wartime Relocation and Internment of Civilians (CWRIC). The CWRIC was appointed to conduct an official governmental study of Executive Order 9066, related wartime orders, and their impact on Japanese Americans in the West and Alaska Natives in the Pribilof Islands.

In December 1982, the CWRIC issued its findings in Personal Justice Denied, concluding that the incarceration of Japanese Americans had not been justified by military necessity. The report determined that the decision to incarcerate was based on “race prejudice, war hysteria, and a failure of political leadership.” The Commission recommended legislative remedies consisting of an official Government apology and redress payments of $20,000 to each of the survivors; a public education fund was set up to help ensure that this would not happen again (Public Law 100-383).

On August 10, 1988, the Civil Liberties Act of 1988, based on the CWRIC recommendations, was signed into law by Ronald Reagan. On November 21, 1989, George H.W. Bush signed an appropriation bill authorizing payments to be paid out between 1990 and 1998. In 1990, surviving internees began to receive individual redress payments and a letter of apology.

Cross posted from The Stars Hollow Gazette

Why was this not in the State of the Union address? The deficit is falling faster in the last three years than at anytime since World War II.

To be specific, CBO expects the deficit to shrink from 8.7% of GDP in fiscal 2011 to 5.3% in fiscal 2013 if the sequester takes effect and to 5.5% if it doesn’t. Either way, the two-year deficit reduction – equal to 3.4% of the economy if automatic budget cuts are triggered and 3.2% if not – would stand far above any other fiscal tightening since World War II. [..]

History suggests that there’s little good to be gotten from cutting the deficit much faster than 1% of GDP per year. That’s especially true at the moment, given the nature of our related demographic and budget challenges.

Both of those challenges suggest that growth should be our paramount concern, far ahead of near-term deficit reduction, even as we work to improve the intermediate-term budget outlook.

So the deficit falling too fast is bad? What Ezra Klein said:

And we may well have a coincident recession this time, too. According to the initial GDP numbers, the economy shrank slightly in the fourth quarter of 2012, largely because government spending fell. As federal spending continues to fall and the effects are compounded by new tax increases (the payroll tax cut expired in January, for instance), it wouldn’t be a huge surprise to see more quarters of negative growth. So, given that the typical definition of a recession is two consecutive quarters in which the economy shrinks, this drop in deficits might yet be accompanied by another recession.

Hence, two things to remember in the deficit conversation: First, the deficit is expected to fall faster in 2013 than at any time in the last 60 years. And second, that kind of austerity tends to be accompanied by recessions, and we’ve already seen evidence that the same might be true this time, too.

Austerity and sequestration are really bad ideas and that is what the President should have been hammering in the SOTU.

Cross posted from The Stars Hollow Gazette

Economist, author and co-director of the Center for Economic and Policy Research, Dean Baker took New York Times columnist Thomas L. Friedman back to economics class (he may not have ever went) for his Sunday column that was “once again mass marketing misinformation on economics” and getting it “180 degrees wrong: the Friedman standard.”

Dr. Baker start off citing Mr. Friedman’s first paragraph:

It begins by telling us that Tim Cook and Apple are sitting on $137 billion that they could be investing:

“Apple is currently sitting on $137 billion of cash in the bank. There are many reasons Apple has not spent its cash horde, but I’ll bet anything that one of them is the uncertain economic and tax environment in this country. Think about how much better we’d all be if Apple, and the many other companies sitting on cash, felt confident enough in the future to spend it. These are the most dynamic companies in the world. They don’t need any government help to innovate.”

He goes on to explain how, at this time, investment in equipment and software is near pre-recession levels. He then moves on to Mr. Friedman’s wrongheadedness about consumption and the trade deficit.

Then Dr. Dean get to the real nitty gritty of how really wrong Friedman is on getting the American economy moving is this theory on investment in infrastructure and early childhood education:

Friedman just keeps getting better:

“Our choice today is not ‘austerity’ versus ‘no austerity.’ That is a straw man argument offered by both extremes. It’s about whether we phase in – in the least painful way possible – a long-term plan that balances our need to protect the most vulnerable in this generation while funding the most opportunities for the next generation, and still creating growth. We can’t protect both generations in full anymore, but we must not sacrifice one for the other – favoring nursing homes over nursery schools – and that’s what we’re on track to do.”

You have to love the line:

“We can’t protect both generations in full anymore.”

Somehow Friedman missed the fact that the problem we are facing is a lack of demand. We need people to spend more not less. How does austerity reduce unemployment and get the economy back to full employment? It hasn’t worked in Ireland, Greece, Spain, the United Kingdom or anywhere else that can be identified. How on earth does the fact that we now face a huge gap in demand mean that we are less well-situated to “protect both generations.” (Of course he doesn’t say anything about income distribution.)

Again, if Friedman could be taught some intro economics it would be hugely helpful here. Suppose Friedman gets his wish for a grand bargain and everyone working today knew that they would be seeing sharply lower Social Security and Medicare benefits in the future. All of those consumers who Friedman thinks are paralyzed by uncertainty will suddenly realize that they can be certain that they will need more money to support themselves in retirement because the Thomas Friedmans of the world have taken away their Social Security and Medicare.

As Mr. Friedman has written, he mostly travel’s by taxi. So Dr. Baker has an idea on how you can help with Mr. Friedman’s economic education if you live in New York City:

Print copies of the two graph’s the investment share of GDP and consumption as a share of disposable income;

Give then to NYC cab driver’s to give to Mr. Friedman if, and when, they pick him up.

The theory is that if enough people do this eventually Mr. Friedman will learn something about economics and we will “no longer have to see painfully wrongheaded columns on the economy in the Sunday NYT.”

I stopped reading Mr. Friedman’s columns sometime after 2006, three years into the Iraq War that was only suppose to last six months. Mr. Friedman started predicting the outcome of the war would take six months in 2003. He did it often enough that Atrios started calling the prediction a “Friedman Unit” in 2006 and it became a running joke thereafter.

Cross posted from The Stars Hollow Gazette

Writing for his New York Times blog, Conscience of a Liberal, Nobel Prize winning economics professor Paul Krugman makes two salient observation about President Barack Obama’s proposal to raise the minimum wage from the current $7.25 per hour to $9.00 per hour indexed to inflation. His first observation is the political “trap” for Republicans leaders who are opposed, even though a vast majority of voters support a wage increase (pdf) and that includes a string majority of Republican women but not men. Prof Krugman notes that while Republicans want you to believe that they are concerned workers might lose their jobs, he gives two examples of why this faux sincerity “won’t wash”:

1. The truth is that top Republicans have so little regard for ordinary workers that they can’t even manage to pretend otherwise. Case in point: on the last Labor Day, Eric Cantor declared,

   “Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success”.

Yep: even on Labor Day, Cantor had nothing positive to say about workers, just praise for their bosses.

2. Consider a working couple with two children, earning the current minimum wage. How much federal income tax do they pay? If I’m doing the math right, the answer is, none – they get a refund. (They pay plenty of payroll taxes, sales taxes, etc., but that isn’t supposed to count). In the minds of Republicans, this makes them lucky duckies, members of the 47 percent, part of what’s wrong with America. The GOP just can’t credibly claim to suddenly be deeply concerned about their job prospects.

Prof. Krugman’s second observation is about the economics of raising the minimum wage:

First, as John Schmitt (pdf) documents at length, there just isn’t any evidence that raising the minimum wage near current levels would reduce employment. And this is a really solid result, because there have been a lot of studies. We can argue about exactly why the simple Econ 101 story doesn’t seem to work, but it clearly doesn’t – which means that the supposed cost in terms of employment from seeking to raise low-wage workers’ earnings is a myth.

Second – and this is news to me – the usual notion that minimum wages and the Earned Income Tax Credit are competing ways to help low-wage workers is wrong. On the contrary, raising the minimum wage is a way to make the EITC work better, ensuring that its benefits go to workers rather than getting shared with employers. This actually is Econ 101, but done right: given a second-best world in which you use imperfect tools to help deserving workers, two tools together can produce a better outcome than either one on its own.

As usual, if you want comprehensive, in depth discussion without the political talking points and invective, at the same time presenting both sides, Chris Hayes and his guests on Up with Chris Hayes this past Saturday provided just that. Joining Chris to discuss the president’s proposal to raise the minimum wage were by Arindrajit Dube, assistant professor of economics at University of Massachusetts-Amherst; Lew Prince, owner of Vintage Vinyl, Inc. a small business in St. Louis, Missouri; Jennifer Sevilla Korn, executive director of the Hispanic Leadership Network; and Tsedeye Geeresslasse, staff attorney of the National Employment Law Project.

Republicans and business groups have lined up in opposition to a minimum wage increase, and in doing so, they’ve repeated a talking point that has been common in Washington for decades: that an increase in the minimum wage would lead to reductions in employment. As it turns out, there’s a growing body of empirical evidence that indicates that minimum wage increases, within a certain range, have no negative impact on employment, and may actually boost worker productivity and consumer demand, providing a much-needed stimulus to the economy.