Saturday, December 9, 2017

America’s Broken Political System: Fresh at Project Syndicate [feedly]

America's Broken Political System: Fresh at Project Syndicate
http://www.bradford-delong.com/2017/12/americas-broken-political-system-fresh-at-project-syndicate.html

Project SyndicateAmerica's Broken Political System: Whether or not the tax bill survives the conference process and becomes law, the big news won't change: the Anglo-Saxon model of representative government is in serious trouble. And there is no solution in sight. For some 400 years, the Anglo-Saxon governance model–exemplified by the republican semi-principality of the Netherlands, the constitutional monarchy of the United Kingdom, and the constitutional republic of the United States of America–was widely regarded as having hit the sweet spot of liberty, security, and prosperity. The greater the divergence from that model, historical experience seemed to confirm, the higher the likelihood of repression, insecurity, and poverty. So countries were frequently and strongly advised to emulate those institutions.

Nobody would dare offer that same advice today... Read MOAR at Project Syndicate


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Friday, December 8, 2017

NYTimes: After 7 Years of Job Growth, Room for More, or Danger Ahead?

After 7 Years of Job Growth, Room for More, or Danger Ahead? https://nyti.ms/2BOtA2D

In the Battle against Fake News, the Bots may be Winning [feedly]

In the Battle against Fake News, the Bots may be Winning
http://www.globalpolicyjournal.com/blog/07/12/2017/battle-against-fake-news-bots-may-be-winning

In the Battle against Fake News, the Bots may be Winning

Andrea Stroppa - 7th December 2017

Andrea Stroppa on the state of the ongoing struggle agaisnt fake news.

Lawyers from top tech companies were recently asked about the role their firms played in the 2016 United States presidential election, during three Congress hearings.

Propaganda, disinformation and misinformation messages on Facebook and Instagram reached approximately 146 million American citizens – almost half the population – Facebook revealed in a prepared testimony.

Twitter accounts linked to Russia "generated approximately 1.4 million automated, election-related tweets, which collectively received approximately 288 million impressions" between September 1 to November 15 2016, according to company executives.

These revelations echo my own research during November 2016. The then Republican candidate Donald Trump's Instagram account was amassing a good deal of followers, but significant tranches of them were bots and Russians – even if there was no clear evidence of direct involvement by the Russian government.

Hatred, confusion and disarray

These figures give rise to many urgent questions, such as whether these social media activities influenced the outcome of the election. In a wider context, consider how the use of social media tools has changed since their inception. The same media that gained traction by promoting freedom and democracy around the world – during the 2011 Arab Spring, for example – now seem ideal tools to manipulate opinions and spread hatred, confusion and disarray. Public perception of social media has shifted accordingly in recent months.

US law-makers, academics and tech experts are pressuring Facebook, Twitter and Google to prevent such digital propaganda and disinformation campaigns, and rightly so. But there are two significant issues. Firstly, from a technical standpoint, it is difficult to stop these "botnets" – the large number of fake accounts run by specific software which swamp user newsfeeds and timelines with fake news or deceptive posts.

Secondly, the value of social networks such as Facebook, Instagram and Twitter is based on the volume of their active users. Therefore, the primary and constant goal of these tech companies is to expand their user base. (This is why Facebook is so eager to enter the Chinese market.)

These networks want to give access to those living under repressive governments who censor the internet. So they enable techniques which circumvent national surveillance systems, such as proxy, VPN and others.

This makes life very easy for botnet creators, who are developing sophisticated software to imitate real users. For example, in order to bypass the phone verification typically required by social media platforms, botnet owners use virtual phone numbers and private IP proxies. Also, thanks to the work of some tech experts who reverse-engineer apps to find out how their deepest processes work, these 'smart' bots are quickly able to evade any security system. Such operations are cheap to run and available to any organisation or government.

How to spot a bot

Particularly on Facebook, these propaganda or disinformation campaigns run on pages either professing support for a social cause or simply offering generic entertainment news. How are users to decipher a genuine page from a fake one? Does this power lie only with Facebook engineers?

A potential answer may be the appearance of the post, such as its format and featured links. By applying data analysis and open-source intelligence, experts could have understood in advance what was actually happening. Facebook could simply have used common sense when accepting Russian rubles for sponsored, politically motivated posts.

On a technical level, the digital propaganda strategies in question mostly rely on botnets and exploiting online communities, using paid content and sharing to disseminate material. In response, social media companies are planning new measures to better manage paid content on their platforms.

An upcoming bipartisan bill is focused on tightening rules for political advertising. However, as respected tech journalists such as Anthony de Rosa have noted, the real problem is that people continue to share links, posts and spam on Facebook pages with a high number of followers.

Dangers of digital propaganda

This is a problem which independent research projects could help with, if the internet giants were only willing to share their internal data. In recent years, it is independent researchers who have shed light on previously unknown issues affecting social media users, such as software bugs, counterfeit item trafficking, phishing campaigns and malware dissemination.

More generally, we are also facing a cultural problem. Broadsheet newspapers, research papers, government inquiries, Congressional hearings, and tech companies have all underscored the dangers of digital propaganda in recent weeks. But some public sources still tend to minimise or dismiss this phenomenon.

Nobody could seriously "believe that a post on FB could ever swing an election", suggested a well-known commentator at the Italian newspaper Corriere della Sera on Twitter recently. Such glib comments miss the point. Digital propaganda strategies take aim at real issues, such as immigration, economic crisis, terrorism and social inequality, in order to push millions of people surreptitiously towards a particular political agenda or viewpoint.

The revelations from the US 2016 election pertain to other countries. Italy, for example, has its own general election coming up. It has 30 million Facebook users, and 35% of its adult population get their daily news from that platform (only 14% still rely on newspapers).

Some organised networks have already launched their social media election strategy to influence voters, using propaganda and fake news campaigns. Media pundits are on high alert for what promises to be another challenging situation worthy of global attention.

 

 

Andrea Stroppa writes about security and technology for the World Economic Forum. this post first appeared on the Agenda blog.

Image Credit: Zen Skillicorn via Flickr (CC BY-ND 2.0)


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A quick note on CHIP, block grants, and the tax cut [feedly]

A quick note on CHIP, block grants, and the tax cut
http://jaredbernsteinblog.com/a-quick-note-on-chip-block-grants-and-the-tax-cut/

This piece from the WaPo makes an important point, which I'd like to embellish a bit.

A few months ago, Congressional authorization for the CHIP program expired, and they still haven't reauthorized the funding, which is a block grant to states in support of this health coverage program for 9 million low-income kids and pregnant women.

On Friday, Utah posted a notice online saying it probably will run out of CHIP funding by the end of January. Earlier in the week, Colorado notified families that their coverage might end early next year. Arizona, California, Ohio, Minnesota and the District are also nearing the end of their funding, as is Oregon, whose Democratic governor, Kate Brown, has directed the state's health authority to continue financing CHIP through April out of its reserves.

Unlike Medicare, Medicaid, SNAP, and other programs that automatically expand and contract with need, block granted programs depend on Congressional re-authorization. Therein lies one of the problems (I'll get to another below) and the article raises an important concern:

…imagine this same situation, but applied to Medicaid, the program that covers far more Americans — around 70 million.

The reason Congress must reauthorize funding for CHIP is because it's a block grant program, meaning that states are provided with a set amount of federal dollars instead of an ongoing funding stream (as with Medicaid).

Were Congress to convert Medicaid into block grants, as Republicans tried to do in multiple health-care bills this year, it's feasible lawmakers might show the same delay in letting funding lapse, throwing states into uncertainty on an even larger scale.

In other words, what's going on with CHIP is a potent warning against block granting other safety net programs, like Medicaid or SNAP (moreover, we've written that the CHIP block grant is set up to work better than the ones proposed for Medicaid). This is a very well known problem, btw, to those of us who followed the block-granting of TANF (cash payments to poor families). Its funding froze and its anti-poverty and counter-cyclical effectiveness have been hugely diminished.

Here's a new problem in this space. If the Republican tax bill passes, as I suspect it will, and they significantly reduce the state-and-local tax deduction, those states that want to raise the revenues necessary to support block-granted programs will have a much harder time doing so, since their residents can no longer write off most or all of these tax payments against their federal liabilities.

In this regard, Republicans are up to a devious bait-and-switch. They want to convert safety net programs that current respond to need into fixed-funded block grants, while at the same time reducing states' ability to support these programs.


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What’s up with productivity growth and what does it mean? [feedly]

What's up with productivity growth and what does it mean?
http://jaredbernsteinblog.com/whats-up-with-productivity-growth-and-what-does-it-mean/

I'll be brief, because first and foremost, the recent uptick in productivity growth that I'm about to show you may be statistical noise. These are jumpy data. But in case this sticks, I did want to lay down a marker and tout some potential implications.

This morning's revised productivity report has output per hour up a rousing 3 percent in Q3. That's an annualized, quarterly rate, and OTE'ers know I like to filter out some of the noise by looking at year-over-year changes.

So, the table below shows the recent acceleration in year-over-year changes in the key variables.

Since productivity growth equals output minus hours growth, we can decompose the increase. It's all about faster output growth; hours of work have slowed a touch.

Now, there could be a bit of the hurricane season in there, as that hurts employment but boosts (gross) output. Also, as we close in on full employment, employment and hours growth will naturally slow.

What's a bit disconcerting here–with even bigger caveats re data noise in this series; I'm pretty skeptical of this wage result–are the unit labor costs, which measure compensation growth relative to productivity growth. We typically expect pay to rise along with productivity growth, at least at the average (if not so much the median), especially as the job market tightens. And, as Dean Baker and I point out here, you see real wage pressures in some series. But compensation slows of late in this series. And slower compensation amidst faster productivity growth drives down unit labor costs.

That dynamic–productivity rising faster than comp–also drives down labor's share of national income, as the next figure shows (the BLS labor share data is more pessimistic than other series; part of the decline is due to imputations of self-employed earnings, but all measures show a similar trend).

Source: BLS

Towards the end of the figure, if you squint you can maybe see the beginning of a trend reversal around 2015, but the series has since turned down again. It's an unsettling picture of where most income growth has gone in recent decades.

At any rate, if this productivity acceleration sticks, and that's a big "IF," here are some implications:

–The Fed has even less reason to raise rates, as faster productivity growth can pay for non-inflationary wage gains.

–Score one for the full-employment-multiplier theory a number of us like to tout. As the job market tightens, firms must find new efficiencies to maintain profits margins as production costs rise (another reason the wage result above looks fishy to me).

–Get ready for a lot of ridiculous claims that the tax cut and MAGA are responsible for the acceleration.


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Chart of the Week: Sharing the Wealth: Inequality and Who Owns What [feedly]

Chart of the Week: Sharing the Wealth: Inequality and Who Owns What
https://blogs.imf.org/2017/12/07/chart-of-the-week-sharing-the-wealth-inequality-and-who-owns-what/

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By IMFBlog

December 7, 2017

Luxury yachts in Monaco: The surge in top incomes, combined with high savings, has resulted in growing wealth inequality (photo: Eric Gaillard/Newscom).

Income inequality among people around the world has been declining in recent decades. But the news is not all good. Inequality within many countries has increased, particularly in advanced economies.

In addition to income inequality, wealth inequality—what you have accumulated, as opposed to what you earn—is closely related, and reflects differences in savings, inheritances, and bequests.

In our Chart of the Week from the October Fiscal Monitor, we zoom in on inequality of wealth—the distribution of wealth across households or individuals at a given time. 

Wealth is more unequally distributed than income. As the chart shows for the countries listed, all part of the Organization for Economic Cooperation and Development, the average share of wealth held by the top 10 percent of households is 50 percent, which by far exceeds the average share of income, 24 percent, held by the top 10 percent. In the United States, the top 1 percent holds nearly 40 percent of total net wealth. Financial assets, such as equities, life insurance, and pensions, to name a few, make up a large share of household wealth at the very top. 

The latest Fiscal Monitor shows that wealth inequality has risen considerably in recent decades. The surge in top incomes, combined with high savings, has resulted in growing wealth inequality.

Fiscal policy is a powerful tool for governments to address high and rising income and wealth inequality. The Fiscal Monitor shows that equity and efficiency can and must go hand-in-hand. Policymakers need to consider both taxes and transfers, and have many policies from which to choose.  The Fiscal Monitor focuses on three policy debates: progressive taxation, universal basic income (UBI), and public spending on education and health.eed

Net Neutrality Likely to Accelerate the Trend in Media Consolidation [feedly]

Net Neutrality Likely to Accelerate the Trend in Media Consolidation
http://economistsview.typepad.com/economistsview/2017/12/net-neutrality-likely-to-accelerate-the-trend-in-media-consolidation.html

The conclusion of a post by Harold Feld at ProMarket:

Will Repeal of Net Neutrality Accelerate the Trend in Media Consolidation? The History of Cable Suggests "Yes," by Harold Feld, ProMarket: ...Based on the history of both the cable industry and the broadband industry (which is, after all, almost entirely derived from the cable industry), we should expect repeal of the net neutrality to rules to accelerate the trend toward vertical and horizontal consolidation. This is particularly true in light of the public statements of chairman Pai and other Republican commissioners indicating they believe that consolidation can offer benefits to consumers and that the dangers of anticompetitive behavior are exaggerated. This is not only true about net neutrality, but generally. Although chairman for less than a year, Pai has already announced that the FCC will simply defer to the Department of Justice on antitrust and to the Federal Trade Commission on consumer protection, and has either repealed or begun the process of repealing the FCC's longstanding limits on vertical and horizontal media ownership.
Additionally, although Pai and the other Republican commissioners repeatedly refer to state consumer protection laws as providing an additional layer of protection, the draft order repealing net neutrality also contains sweeping language preempting the states from any laws "inconsistent" with the "deregulatory policy" the FCC will adopt on December 14. Charter Communication (which now owns Time Warner Cable) has already rushed to use this language to file a motion to dismiss a lawsuit by the New York state attorney general relating to Time Warner Cable's 2014 conduct denying New York subscribers access to Netflix. Whether or not this particular motion to dismiss succeeds, we can expect broadband provider to use the broad preemption language in the net neutrality repeal order to block precisely the kind of state consumer protection statutes chairman Pai claims will make FCC oversight unnecessary.
In short, the net neutrality repeal order does for broadband exactly what the 1984 Cable Act did for cable—create an environment with virtually no effective restraint on the ability of providers to favor their own content and discriminate against rivals. We should therefore expect the same result: rapid horizontal and vertical consolidation. While chairman Pai and other supporters of the repeal order dismiss these concerns, they offer no plausible explanation for why this round of deregulation should produce different results beyond an airy wave that all that consolidation is ancient history and how could that possibly happen again?
As we all know, those who refuse to learn from history are doomed to repeat it.

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