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Why is Alex Berezow Allowed to Write on Economics?

8:50 pm in Uncategorized by BrandonJ

In my daily trek of researching the news, a friend posted up a piece by Forbes contributor Alex Berezow over Socialist Alternative candidate Kshama Sawant in a Seattle City Council election and her credentials as a teacher of economics. I can assure you my friend found the piece humorous and so did I.

Forbes logo

Why Forbes’ Alex Berezow is wrong.

But I am curious, why is Alex Berezow, a person listed to write on “science, science policy, and a dash of European affairs,” allowed to write on a subject he did little to no research about? In fact, has he read anything aside from Gregory Mankiw?

Perhaps an analysis of his post can allow us understanding of why an individual can write over economics with such terrible insight.

Berezow is right to state economics is not a science usually considered “traditionally,” though that is the only part where he is right. He moves on to say:

Still, economics can provide powerful insights on market behavior. Indeed, economists from various ideological backgrounds have managed to reach a consensus on several major issues, and from that vantage point, we can say the field has developed something resembling scientific knowledge.

Economics has not reached consensus on major issues since there many schools of thought. Additionally, the issue of terrible reporting on economics has been talked on by economist Dean Baker, for instance, and the issue of problems within the economic paradigm as it works within a neoclassical model. That is why books like The Economics Anti-Textbook by economists Rod Hills and Tonny Myatt exist, to counter-act such thoughts bias in the field and rejection of alternative theories.

Yet, as I read the entire piece, it starts with the age-old idea of incentive for people to work:

One of those insights is that people respond to incentives. If I offer a teenager $50 to mow my lawn — and an extra $25 if he trims the bushes — then I can expect to shell out $75. I just offered my little helper a handsome incentive, and there’s a very good chance he’ll respond to it.

Here I admit defeat as my socialist convictions cannot respond to such logic of paying a teenager $75 to mow the lawn and trim the bushes. I thought capitalism was exploiting others, but it seems this teenager (whoever it is) is a genius who is taking an easy $75 to do errands for Alex Berezow who is too busy writing on things he knows nothing about.

He mentions how socialists, like me, never admit to the idea of incentive in our framework despite our work proving him wrong. But the best part of the entire post is found within one line:

Yet, shockingly, socialists can regularly be found on college campuses.

Yes, we’re here on campuses preparing events to teach the public on special causes. We can be found in your cafeteria, your classrooms, your libraries, your buses, your trains, your lanes and even your sidewalks (yes we can walk). Perhaps most shocking of all, we’re human beings that can critically think and engage with other people while hoping for a change in the future.

He then proceeds to call out Sawant by saying she “openly endorses socialism” and might win her Seattle City Council race as she currently has 49.5 percent of the vote.

Two years ago, it was found by Pew Research Center those aged 18 to 29 view “socialism” favorably at 49 percent to 43 percent. It’s not a dirty word anymore.

Berezow flat-out deceives the reader to fit into his agenda of what is right and wrong. For instance, he criticizes Sawant for her support of rent control by stating:

If Dr. Sawant’s embrace of socialism isn’t bad enough, she also endorses a terribly destructive policy called “rent control.” This policy can take various forms, but basically, landlords are not allowed to charge market rates for apartments. That might sound like a nice thing if you’re a renter, but Dr. Mankiw — citing a 1992 paper in American Economic Review — states that 93% of economists reject rent control because it “reduces the quantity and quality of housing available.”

One major problem with this argument is the lack of a definition with rent control. Yes,  the statistic of 93 percent of economists rejecting rent control is all fine, but what specific rent control are we speaking about? Here is the question he either refuses to answer or does not know much about.

In the Economics Anti-Textbook by Rod Hills and Tonny Myatt, they do talk about the neoclassical idea of rent control, but give an alternative view as well. They write:

But knowing the extent to which the ceiling rent is binding over time is very tricky. It’s complicated by the fact that we cannot observe the equilibrium rent. A second complication is that the type of rent control prevalent nowadays is very different from the type assumed in textbooks — a rigid rent freeze.

What Berezow is saying is that “first-generation rent control” is rejected by many economists. For those unaware, it is, as stated above, “a rigid rent freeze.” However, “second-generation” rent control is more flexible as it can allow “automatic rent increases geared to increasing costs, excludes luxury high-rent buildings and new buildings, restricts conversions, decontrols between tenants, and provides incentives for landlords to maintain or improve quality.”

In the same manner my introduction to microeconomics textbook (coincidentally written by Gregory Mankiw) failed to address this, so does Berezow fail to distinguish to difference between the two.

But the biggest problem is thinking that housing units aren’t assets, when, in reality, they are. Again, the two economists state there are more factors such as “interest rates, inflation, profit opportunities elsewhere, the local real estate cycle, government housing and tax policies, and current and expected future changes in all relevant variables.”

Nowhere, in a business site named Forbes, is the discussion of any of these factors raised. Rather, a reporter with time on his hands decided to write an article on a subject he did not research thoroughly.

Richard Arnott, economist at the University of California — Riverside, spoke on the impact of such factors. He wrote, in “Time for Revisionism in Rent Control?“:

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Analyzing NYC’s Mayoral Elections: Bill de Blasio (Part IV of V)

7:24 pm in Uncategorized by BrandonJ

This is an on-going series analyzing New York City’s mayoral race. To read the introduction, click here. To read on Independent candidate Adolfo Carrion Jr, click here. To read on Republican candidate Joseph Lhota, click here.

Bill de Blasio – Democratic candidate

Bill de Blasio is the last person in this series as the election comes to a close. It is fitting since many publications and polls have stated he is heavily favored to win the election. Yet, since he is on the Democratic ticket and making such a huge stride, I must wonder why a person like de Blasio is having such an edge and whether his rhetoric matches his actions.

Bill de Blasio is definitely someone guaranteed since the beginning of this race to win the election through a landslide. However, his work within the Democratic establishment merits further discussion of his overall role in this race and what may occur in the future. It is more important to start off during his politically active days as an outsider to the system.

During his upbringing, his volunteering with the Sandinista government in Nicaragua was pointed out as another instance of a “Communist”  guaranteed to bring his communist friends to have communist policies with communist parties and erect Lenin statues across New York City, especially across Wall Street. If that seems ridiculous to you, the New York Post had a cover with the face of Bill de Blasio and the USSR symbol of the hammer and sickle. The Gothamist poked fun of such talk by saying:

Coincidentally, the news emerges on the eve of tomorrow’s election, and could cost de Blasio the crucial ‘senile conservative’ demographic.

The New York Post, a Rupert Murdoch-owned publication, discussed his trips to communist — or state capitalist — countries during the 1980s. Their ridiculous “analysis” wouldn’t even be taken as serious, but it is interesting to observe his status as a person with a revolutionary spirit against the capitalist system.

Then, de Blasio joined Democrats for campaigning and he would slowly lose such status as a left-wing revolutionary and more of an establishment individual. As the New York Times pointed out on Aug. 25:

The campaign for an open Senate seat [for Hillary Clinton] was a turning point in Mr. de Blasio’s life; it was the biggest and most high-profile political effort he had ever been put in charge of. And it turned out to be his last, as an operative.

His work with the Clintons goes back to the late 1990s where he was appointed in the Department of Housing and Urban Department as Regional Director for New York and New Jersey. One interesting point from historian Howard Zinn’s A People’s History of the United States is housing under Clinton:

The United States (forgetting, or choosing to forget, the disastrous consequence of such a policy in the twenties) was consigning its people to the mercy of the “free market.” The “market” did not care about the environment or the arts. And it left many Americans without jobs, or health care, without a decent education for their children, or adequate housing. Under Reagan, the government had reduced the number of housing units getting subsidies from 400,000 to 40,000; in the Clinton administration the program ended altogether.

Bill de Blasio later, as the previous New York Times article points out, ran for different positions after realizing his talent as a campaign manager. He mentions, reflecting his time under the Clinton Senate campaign in 2000, what he gained and applied to his own style of campaigning:

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The New Dirty Word: Whistleblower

12:53 am in Uncategorized by BrandonJ

During the Cold War, the dirty word at the time was “socialism.” The use of the word drew suspicious of anyone who was associated with it and made the populace suspicious of each other as dictated by their government officials. These days, socialism has been received more positively among the publicespecially the youth, so it is not as damaging as before.

However, the same cannot be said about the term “whistleblower” in this day and age as it has overtaken socialism. The scapegoats for the government and the media have turned to whistleblowers for their contributions for the public. The difference is that the media has not been successful in forcing propaganda down the throats of individuals on “whistleblowers” as a majority of people believe, for example, that Snowden is a whistleblower rather than a traitor.

This is significant as whistleblowing had been scrutinized and argued against on behalf of the establishment. They are a disaster for those in Washington and whenever disasters erupt, panic fills the elite and they decide to use their means for damage control. Author Rebecca Solnit references the term “elite panic” for it in her book, A Paradise Built in Hell, and references a quote by Caron Chess, a Rutgers University professor that helped coin the term with fellow professor Lee Clarke:

“The distinguishing thing about elite panic as compared to regular-people panic, is that what elites will panic about is the possibility that we will panic. It is simply, more prosaically more important when they panic because they’re in positions of influence, positions of power. They’re in positions where they can move resources around so they can keep information close to the vest.”

Whistleblowers strike fear in the elite as their legitimacy is put into question by the populace and, therefore, must react strategically before losing their hold. The Obama administration decided that the best course of action was to punish anyone who decides to be a whistleblower. Of course, this is indicative of an administration who decides to let a war criminal walk free, while putting someone who exposed war crimes on trial.

However, the argument doesn’t only mean whistleblowers against the government only, but of both government and big businesses.

Numerous states are passing or have passed anti-whistleblower laws or “ag-gag” laws that target anyone who speaks up on abuses at slaughterhouses or factories in the private industry. While such laws appeared in 1990 starting in Kansas, twelve states introduced bills to implement “ag-gag” laws last month. The rationale is simple:

States adopting ag-gag laws simply want to “silence whistleblowers,” according to Farm Forward, an Oregon-based group opposed to factory farms.

Take the case of Amy Meyer in Utah for example. After exposing the cruelty at the Smith Meatpacking Company with her cell phone on public grounds, she was arrested and had her charges dropped due to a vast media campaign. Utah, along with Iowa and Missouri, still has its “ag-gag” law in place however.

The extraordinary acts taken upon whistleblowers in both the public and private area would have been denounced by Barack Obama as evident through his ethics agenda on change.org (now unsurprisingly unavailable):

We need to empower federal employees as watchdogs of wrongdoing and partners in performance. Barack Obama will strengthen whistleblower laws to protect federal workers who expose waste, fraud, and abuse of authority in government. Obama will ensure that federal agencies expedite the process for reviewing whistleblower claims and whistleblowers have full access to courts and due process.

What is significance is that the year Barack Obama first took office, two private sector whistleblowers came out to testify on behalf of the public against the illicit activities taking place in their industries.

Wendell Potter was “the head of corporate communications of CIGNA, one of the nation’s largest for-profit health insurance companies.” However, realizing that the industry he was in was profiting off the expense of other individuals, he deciding to leave the industry and work on behalf of the public. Currently, he works at Center for Media and Democracy against the PR that the health care industry that used to fight for.

John Kopchinski blew the whistle on Pfizer after they partook in illicit marketing for their drug Bextra, Zyvox, Lyrica and Geodon. He was later fired as he questioned the direction of such illegal activity, however, Pfizer had to pay a fine of $2.3 billion dollars as a result of a lawsuit because of Kopchinski’s testimony.

While they blew the whistle in private industries that emphasized profit, there is merit in having laws in place to defend federal whistleblowers where the revolving door between private industry and public service still exists.  However, Barack Obama does uphold his promise as his “Insider Threat Program”, for instance, goes against everything he ran upon. It it is idiotic to consider whistleblowers in the Hobbesian view, when the fact remains that whistleblowers are “watchdogs” that correct a government for its lack of justice in equity.

The federal government can show its real reaction to federal whistleblowers that Glenn Greenwald excellently pointed out: Read the rest of this entry →