Monday, November 28, 2016

How to handle an Affirmative Action Brownie Sale

Houston Chronicle: Bake sale at University of Texas

Occasionally you will see a conservative group selling cookies or brownies at different prices to make a point about affirmative action.  They will offer the same brownies at different prices for male, female, Black, Hispanic/Latino and White customers. For example, the brownies is $1.00 for White men, $0.50 for Hispanic women and $0.25 for Blacks.

They are trying to make the point that Affirmative Action gives people "free" things they did not deserve. They are wrong for three reasons.

1) They are making broad generalizations about groups of people while ignoring the fact that each individual had a unique struggle to make it to the University of Texas

2) They also miss the idea that a diverse student population increases the richness of the campus experience. Diversity improves debate, strengthens ideas and encourages understanding.

3) Finally, they are also ignoring the long history of educational, political and economic oppression of minorities in the US.

Most people see how mean spirited and shallow the brownie sale argument is and do not take the young conservatives seriously.

How to respond

The best way to respond is a large anti-racism protest. The more people the better.  A large show of numbers is critical. You need, as the police say, "An overwhelming show of force."  Chanting "no to racism, yes to unity" and "racist" works great.

Try not to ridicule the anti-affirmative action protesters since it breeds resentment.

Short of jumping up in someone face and screaming "You don't know me," the second best response we found was is to set-up an alternative stand near by with free food items.  The stand would promote an alternative point of view. For example:

1. The graduate and professional students of color at University of Illinois organized a White privilege popcorn sale.  White males get a full bag and everyone else get a 1/3 of a bag. You can read the story in the Daily Illini.

2. You can also give away free cookies while also promoting "Cookies under Socialism."  While giving away the cookies, explain that racism, class, ignorance and selfishness are natural byproducts of capitalism. And that capitalism encourages racism.

Other alternatives are:

3. A booth on slavery or murders by police with graphic photos. A photo of a lynching or a whipped slaves' back is pretty effective.

4. A booth on poverty in the US, the minimum wage or income inequality.

5. Bake White privilege cookie which is costs 4 slave hours in 1860; 3 Jim Crow hours in 1930 (15 cents); 1 hour at incarceration wage (UNICOR 0.23 cents)

Note: Price Discrimination is when he same supplier charges different groups different prices for the same item.  For example, reduced drink prices on "Ladies Night". Price discrimination is illegal when based on race, gender, nationality or religion


Monday, November 14, 2016

No change in key rates ahead of election: Unemployment stable at 4.9% with 161,000 new jobs

October Unemployment Wrap-up

Every major unemployment indicator has been "little changed" over the past 18 months. This report was no exception. The unemployment rate dropped to 4.9% as the 161,000 new employees found work in October according to the BLS monthly unemployment report. The report, which was released four days before the election, was ignored by both candidates. Wages rose $0.10 cents to $25.92 per hour at an annual rate of 4.6%. The unemployment rate has been 5.0% or below since October 2015.

The Labor Force Participation(LFP) rate was 62.8%. The figure has been flat since December 2013.

The Black unemployment rate rose to 8.6%, the second straight month of increase. The long term unemployed was also unchanged at $2.0 million.

Establishment Survey

Business reporting hiring 161,000 new workers in October. Both the business services (+43,000) and the healthcare sector (+39,000) added the highest number of new jobs.  The federal government add (+12,000) while manufacturing lost (-9,000) positions.

Black Unemployment

The Black unemployment rate was calculated at 8.6% after hitting a recent low of 8.1% in August. The Black LFP was 62% overall. Black men 20 and over participated in the job market at a 67% rate while 62% of Black women were in the labor force.

The national unemployment rate was 4.9%.

The Black labor force participation rate was a low as 60% in December 2013 but has since rebound to nearly 62%. Black unemployment was measured at 8.6%.

The Black unemployment rate continued to be significantly higher than the White or Hispanic/Latino rate.

Government added 19,000 jobs in October 2016.

Every category was up except manufacturing and retail trade.

We are adding a new chart which shows where the jobs are being created: in the good producing sector or in the service providing sector.   Service jobs are being created at a ratio of about five service performing to one goods producing jobs. The number of manufacturing jobs has steadily dropped since the recession due to the growth in imports and the efficiency of the manufacturing sector.

Monday, November 7, 2016

Laundry List of Hillary Clinton's and Donald Trump's Economic Policies

I have to vote tomorrow in New Jersey. I went from Bernie to Hillary to Jill Stein and then back to Hillary.  Hillary needs a mandate to govern.

To prepare for voting I went through every economic policy from the websites of both Hillary Clinton and Donald Trump.  No judgments were made about the quality of the proposed programs. 

Economic Policies of Hillary Clinton


- Ensure the wealthy and corporations pay more
4% surcharge tax on $5 million or more
30% minimum tax rate on incomes of $1 million or more
Close tax loopholes used by the rich like stepped up basis on estates, offshore tax avoidance schemes and using derivatives trading to reduce taxes
Eliminate the carried interest tax loophole
Restore estate tax; eliminate stepped up basis

Child Related

Double child tax credit to $4000
- Provide tax credits for affordable housing
Limit child care expenses to 10 percent of income

Corporations, Financial Institutions, Small Business, and Manufacturing

Additional risk fees on large financial institutions
End overseas inversions. Pay exit tax when they leave the US. Stop Earning stripping
Use Treasury department to stop inversions
Offer manufacturing tax credits
Reward companies that invest in the US or bring back jobs
Close tax loopholes for oil and gas. Promote clean energy
Allow small businesses to immediately deduct some expenses. Simplify small business returns
Support small business, advanced manufacturing, and startups
$1500 tax credit for apprenticeships
Spend $275 billion over five years on infrastructure investments: Roads, public transit, airports, energy and internet networks.


Make college debt free. Eliminate current student debt
- Make college free now, if you make less than $85,000. Free public college tuition for those making $125,000 or less by 2021. 
Free tuition at community colleges
- Provide $25 billion for HBUCs and Hispanic Colleges

Minimum Wage and Labor

Raise the minimum wage and get rid of tipped minimum wage
General support for unions and labor
Tax relief for working families


Support public investment in R&D
Refinance students loans at  current low rates
Have companies share profits with workers
- Give green cards to STEM masters and Ph.D. degrees graduates and visas for entrepreneurs

Economic Policies of Donald Trump

Create a booming economy. Boost growth to 3.5% on average
Create 25 million new jobs

Individual taxes

Pro-growth tax plan. Reduce taxes across the board especially for working and middle-class Americans.
Reduce tax brackets from 7 to 3: 12%, 25%, and 33%
Proposed a tax cut of $4.4 Trillion ($2.6 Trillion with growth). $1.8 trillion in trade, energy, and regulatory reform savings. $800 billion in other cuts.
Carried interest is treated as ordinary income
Repeal 3.8% tax on investment income. Repeal alternative minimum tax(AMT).
Increase standard deduction to $30,000 for married filers and $15,000 for singles.
Repeal estate taxes. Capital gains over $10 million would be taxed. Repeal special treatment of appreciated assets donated to charity.
Offer spending rebates for child care expenses for people receiving the EITC
Ensure the rich pay their fair share.

Child Related

Eliminate special interest loopholes. Reduce business taxes
Deduct average child care or eldercare costs from taxes
50% match of child savings accounts

Regulatory Reform

Create a modern regulatory framework. Reduce anti-growth regulations
Impose a moratorium on new regulations. Agency and department heads will remove needless, job-killing regulations.
Scrap clean power plan regulations

Trade Policy

Promote an America first trade policy
All trade agreements must increase the GDP growth rate, reduce the trade deficit and strengthen US manufacturing base.
Actively enforce trade agreement violations
Renegotiate NAFTA
Enforce WTO rules against china for currency manipulation and industry subsidies using tariffs and taxes


Energy plan
Support coal and fracking. Support energy development on federal lands.
Ease energy regulations. Streamline permitting process.
Allow the free market to determine energy technologies, not government

Business Taxes 

Lower business taxes from 35% to 15%.
Bring back off-shore profits at 10% rate
Eliminate corporate tax subsidies except for R&D


Reduce non-defense, non-safety net government spending by 1% each year for ten years.

Friday, November 4, 2016

Big Econ Story of the Week: Shrinking Global Trade

Global Trade is Shrinking (by Binyamin Applebaum in the New York Times)

This weeks most talked about economics story is that global trade is shrinking.   The drop in trade is clearly linked to the slowdown in global growth.  Political sentiment against trade may also be playing a part. Some believe the trade explosion was a one time event (you can only hollow out American factories or off shore jobs once) and we have reached a new norm.

You can also read the story here

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