You Are Probably Worse Off Than You Were Four Years Ago

THE NEW REPUBLIC,  AUGUST 24, 2012- Timothy Noah

In March, the Berkeley economist Emmanuel Saez shocked a lot of people by calculating that during the first year of the recovery from the 2007-2009 recession, incomes for the top one percent grew by 11.6 percent while incomes for the bottom 99 percent grew a mere 0.2 percent. (All figures here are in “real dollars,” i.e., they discount for inflation.) Granted, the one percent had taken it on the chin during the recession; from 2007 to 2009, incomes had fallen twice as fast for the one percent (36.3 percent) as for the average family (17.4 percent). The rich always lose big in recessions, because so much of their income comes from capital gains. (Indeed, the one percent took an even bigger share of the nation's income losses between 2000 and 2002, which included the “tech bubble” recession of 2001.) But Saez’s calculations showed that the one percent had come roaring back. In 2010, fully 93 percent of the recovery ended up in the pockets of the one percent. One year later, the bottom 99 percent were marching in the streets.

When I wrote about Saez’s findings in March, I said things had likely gotten better for the 99 percent in 2011, because unemployment was inching downward. And maybe they did. But they sure didn't get better for the average American household. Indeed, some very disturbing new data from Sentier Research, a private firm, by two former high-ranking Census statisticians, indicate that median household income has fallen significantly more during the recovery (4.8 percent) than it did during the recession (2.6 percent). Only at the end of 2011 and during 2012 did median household income start to creep up again, and it hasn't crept very far. Going back all the way to 2000, Sentier found that median household income has fallen by 8.1 percent. During these dozen years labor productivity—output per worker per hour—has increased by 2.4 percent, on average, per year. The more valuable American workers become to their bosses, the more income they lose.

Median household income losses between June 2009 and June 2012 occurred for nearly every conceivable demographic group. Family households lost 4.7 percent. Nonfamily households (i.e., people who live alone) lost 7.5 percent. Men who live alone did very badly; they lost 9.4 percent. Households headed by African-Americans did even worse; they lost 11.1 percent.  Married-couple households weathered the, um, recovery better than others, but still lost 3.6 percent. Weirdly, two-earner households lost more income (5.9 percent) than one-earner households (4 percent), perhaps because they started out with more income to lose. Households headed by full-time workers lost 5.1 percent. Households headed by private-sector workers lost 4.5 percent, while households headed by government workers lost 3.5 percent.

Income losses occurred at all levels of educational attainment. The steepest losses were for those with “some college, no degree”; they lost 9.3 percent, followed by people with associate’s degrees (8.6 percent), high school grads (6.9 percent), people with bachelor’s degrees or more (5.9 percent), and high school dropouts (5.3 percent). High school dropouts lost the least because they never had much to lose.

I’ve previously noted that a lot more wealth was lost during the recession in Republican regions than in Democratic ones. In that sense, it was a “Republican recession.” This pattern didn’t really continue during the recovery. To be sure, from June 2009 to June 2012 the biggest income losses were in the Republican West (8.5 percent) and the smallest income losses were in the Democratic Midwest (1.1 percent). But income losses were equally bad in the Republican South (4.9 percent) and in the Democratic Northeast (4.9 percent)—two regions that would seem to have absolutely nothing else in common. On a non-regional basis, households in the aggregated red (Republican) states lost slightly less income (5 percent) than in the aggregated blue (Democratic) states (5.2 percent). Since that’s basically a tie, I think we have to conclude that the Republican recession was followed by a bipartisan crap recovery. Swing states, interestingly, did worst of all; households there lost 5.7 percent in income. Maybe things will even up when Obama and Romney spend a king's ransom there this fall.

Did anyone come out ahead? Yes: the elderly. Those aged 65 to 74 saw their incomes increase by 6.5 percent, while those aged 75 and older saw their incomes increase by 2.8 percent. Many of the first group and nearly all of the second are retirees. The only way for typical households to make more money in this economy is to withdraw from it. (Warning: This doesn't work if you're under 65.)

All told, this is a stunningly bad economic record for an incumbent president to run on. The fact that Obama’s still the favorite testifies to how uniquely terrible the Romney-Ryan ticket is, and perhaps also to how much blame extremist congressional Republicans deserve for consistently blocking nearly every plausible avenue to economic recovery. Still, there’s no avoiding the fact that the economy has worsened over four years for the typical American household, even as it has improved for the one percent. Thank goodness Mitt Romney is about the last person on earth who would ever want to point that discrepancy out.

Neil Armstrong, the first man to walk on the moon, died Saturday, weeks after heart surgery and days after his 82nd birthday.

Charlie Rangel Discusses Joe Biden’s foolish remark

Rangel condemned Biden's latest display of his notorious stupidity in a radio interview with The Perez Notes.  It shows up at about 1:37 on the video.

According to Rangel:

"Was he talking about slavery? You bet your ass he was," Rangel said. "Was he using the vernacular? Yes, he was. Did he think it was cute? Yes, he did. Was it something stupid to say? You bet your life it was stupid."

"It's something that if a black had said it, we would have been laughing because we would know that deep down they may be beating the hell out of us but they ain't thinking of putting us in chains," Rangel continued.

Kodak enters the end game.

Kodak set to quit camera film and photo paper business

BBC

Professional photographers still value the unique feel that film gives to their pictures.

Debt-struck photography pioneer Kodak says it may sell off its still-camera film and photo paper divisions.

The firm has already stopped making digital cameras as part of efforts to reduce its losses after filing for bankruptcy protection in January.

It has also been trying to raise funds by selling off more than 1,100 digital imaging patents.

It had originally planned to announce a buyer last week, but said "discussions continue" and a deal might not happen.

Apple and Google had been reported to have made rival bids for the patents, but the Wall Street Journal reports they have now joined forces and have added Samsung, LG, HTC and others to their consortium

The WSJ's sources suggested the offer price for the portfolio would be about $500m (£315m) - well below the $2.6bn estimate that Kodak had suggested it could be worth.

The company recently reported a $665m net loss for the first six months of the year, putting further pressure on its finances.

Film's feel

In its latest announcement the US company said it had hired investment bank Lazard to help it sell its Personalised Imaging and Document Imaging businesses.

This would mean an end to it making films for still cameras, photo papers, souvenir photo products at theme parks, scanners and picture print-out kiosks at stores.

It would leave the business focused on printers, cinema film stock and chemicals.

The British Journal of Photography said the news would concern the industry.

"A lot of professionals still shoot with film and like the quality it gives them," Olivier Laurent, news editor at the journal, told the BBC.

"The resolution is still a thousand times higher than most digital cameras can offer so long as a good scanner is used.

"A film photograph has a different mood thanks to its grain - it's about the love of the image and digital still has a hard time trying to reproduce that feeling."

No justice for Rachel Corrie, US citizen killed by Israeli Defense Force

Israel's inquiry into death of activist Rachel Corrie not credible, says US

Ambassador criticises investigation into death of Rachel Corrie as civil case verdict expected

DONALD MACINTYRE 

JERUSALEM

FRIDAY 24 AUGUST 2012 INDEPENDENT

Israel has failed to carry out the “thorough, credible and transparent investigation” it had promised into the death of American activist Rachel Corrie in Gaza nine years ago, the US ambassador in Tel Aviv has reiterated to her family.

The Haifa district court is expected to deliver a verdict next Tuesday in the civil action brought against the State of Israel by the bereaved family of Ms Corrie, who was crushed to death by a military bulldozer while part of a group seeking to prevent the destruction of Palestinian homes in the southern Gaza border town of Rafah.

US ambassador Dan Shapiro's comments, in a meeting with Ms Corrie's parents Craig and Cindy, and her sister Sarah, reflect earlier public stances of the US government. But the family said yesterday it had been “encouraged” that coming so soon before the hearing they indicated an “ongoing” demand by the US government for such an investigation irrespective of next week’s verdict.

The family opened the civil suit in 2005, two years after Ms Corrie’s death at the age of 23, when the military prosecutor closed the file on the case after an internal enquiry.

The suit charged that the Israeli military had been responsible for the International Solidarity Movement activist’s death and failed to conduct a full and open investigation.

The state argued in response to the family's suit that Ms Corrie and her fellow activists should not have been in a military zone and that the driver of the D9 military bulldozer did not see her. Witnesses called by the plaintiffs, however, said that Ms Corrie, who was wearing an orange fluorescent jacket, was clearly visible before she was killed.

At a hearing in the court in 2010 Richard Purssell, a British activist in the pro-Palestinian ISM, described how he had watched in horror as Ms Corrie was dragged four metres by the bulldozer moving forward at a “fast walking pace”.

The full investigation was promised in a telephone call to the then US President George W Bush by Ariel Sharon, who was Israeli Prime Minister at the time, in the immediate aftermath of Ms Corrie's death. But no action was taken against the bulldozer driver or any other military personnel present at the time.

The US embassy said yesterday it would not comment on what was said at a private meeting held by the ambassador. But his remarks appear to reaffirm the letter written to the family in 2004 by Lawrence Wilkerson, an aide to then Secretary of State, Colin Powell, saying that Israel had failed to carry out the “thorough, credible, and transparent” investigation promised by Mr Sharon.

Ms Corrie's sister, Sarah Simpson Corrie, said yesterday that the lack of such an investigation had caused a "mounting battle" for the family in bringing the civil suit. Saying that she continued to look to the US government to press the case for a transparent investigation, she added: "You can't really expect the family to resolve the issue of a diplomatic promise. That is a matter for the governments – our's and Israel's."

Bad Ass or Dumb Ass, You decide.

Lance Armstrong to run for US Senate. He has what it takes.

Cycling Legend Loses Titles

By REED ALBERGOTTI And VANESSA O'CONNELL

AFP/Getty Images

The U.S. Anti-Doping Agency stripped Lance Armstrong of his seven Tour de France titles and banned him from competition after the racer said he wouldn't contest charges he used performance-enhancing drugs.

Lance Armstrong was stripped of his record seven Tour de France titles late Thursday after he refused to fight allegations that he used performance-enhancing drugs.

Mr. Armstrong notified the U.S. Anti-Doping Agency that he wouldn't fight the charges the agency brought against him in June, a move that, according to USADA, immediately strips him of all of his athletic titles going back to Aug. 1, 1998, roughly a year before his first Tour de France victory. USADA said Mr. Armstrong is also banned immediately from competing in Olympic and other elite-level sports for the rest of his life.

Enlarge Image

Reuters

Seven-time Tour de France winner Lance Armstrong in 2010.

In 2010, The Wall Street Journal was the first to report that a former teammate had accused Mr. Armstrong of doping, which eventually led to the investigation by USADA.

USADA, a nonprofit organization charged with policing doping, doesn't have the authority to bring criminal charges, but it can sanction athletes by stripping them of their titles and banning them from competition for doping.

Mr. Armstrong had until midnight Thursday to officially decide whether to fight the agency's charges, which alleged Mr. Armstrong had participated in a conspiracy to cheat.

In a statement, Mr. Armstrong didn't admit that he cheated, but said he won't fight USADA, an organization Mr. Armstrong has said for months has treated him unfairly.

"Say what you will about what I did or didn't do ten years ago, they're not playing by the rules," Mr. Armstrong said in an interview with The Wall Street Journal earlier this summer. "Here's the deal, athletes cheating in sport, that's bad. But what these guys are doing is far worse. The levels they have gone to try to f— me and rig this thing are far worse than any athlete taking a transfusion or some EPO. This is far dirtier."

By opting not to fight—a move that took many by surprise—Mr. Armstrong gave up the chance to defend himself against the charges in an arbitration hearing.

The governing body for the sport of cycling, known as the UCI, could appeal the sanctions, though it has never appealed a sanction handed down by USADA. The UCI could also refuse to acknowledge USADA's sanctions, though that would be unprecedented.

More

• Read Armstrong's Statement
• Letter to William Bock, General Counsel, U.S. Anti-Doping Agency
• Armstrong Lawsuit Dismissed (8/20/2012)
• Cycling Body Jumps Into Armstrong Doping Case (8/3/2012)
• Former Armstrong Associates Get Lifetime Bans From USADA (7/10/2012)
• Armstrong Charged in Doping Case(6/29/2012)
• Cycling Doctor Under a Microscope(6/17/2012)
• Armstrong's Ex-Mates Cooperated(6/14/2012)
• For Cycling's Big Backers, Joy Ride Ends in Grief (12/18/2010)
• The Case of the Missing Bikes (7/3/2010)
• Blood Brothers (7/3/2010)

"There comes a point in every man's life when he has to say, 'Enough is enough,'" Mr. Armstrong said in a statement Thursday. "For me, that time is now. I have been dealing with claims that I cheated and had an unfair advantage in winning my seven Tours since 1999."

Mr. Armstrong's lawyers Timothy J. Herman and Robert Luskin wrote in a letter Thursday to USADA that Mr. Armstrong's decision didn't reflect "any belief that USADA's charges have merit or any fear of what a fair proceeding would establish."

View Slideshow

Throughout his career, Mr. Armstrong was dogged by allegations that he had used performance-enhancing drugs. In 2010, Mr. Armstrong's former teammate, Floyd Landis, sent a series of emails to cycling officials in which he made allegations of doping on Mr. Armstrong's former cycling team and accused Mr. Armstrong of doping during his career. The existence of the emails was first reported by The Wall Street Journal.

Enlarge Image

AFP/Getty Images

Lance Armstrong crosses the finish line of the 91st Tour de France cycling race in 2004.

Mr. Armstrong has always firmly denied the charges, often lashing out at his accusers and asserting that he had passed more than 500 drug tests. USADA's case against him rests largely on the testimony of at least 10 former teammates who USADA has said stand ready to say Mr. Armstrong doped during his career.

Mr. Armstrong was diagnosed with testicular cancer in 1996. He came back to win the sport's biggest race—the Tour de France—in 1999. He went on to win six more Tour de France titles in a row, beating the previous record of five. Mr. Armstrong's autobiography, "It's Not About the Bike," was a best seller.

Mr. Armstrong retired in 2005 and came back to the sport for the 2009 season. Initially, he agreed to enter into a special blood-testing program to prove that he was racing clean. He ultimately ended the program, citing high costs and logistical problems.

Mr. Landis's allegations led to a federal criminal investigation that was dropped in February. In June, USADA announced it was bringing doping charges against Mr. Armstrong and five other people affiliated with his former team.

Write to Vanessa O'Connell at Vanessa.O'Connell@wsj.com and Reed Albergotti atreed.albergotti@wsj.com

If health-care spending hits the government-dictated ceiling, then even if you’re willing to pay a doctor out of pocket for a consultation, the government won’t let you.

REASON

 The government takeover of health care continues apace. Starting in 2014, the Affordable Care Act—i.e., Obamacare—will make you buy health insurance. Soon, Obamacare II could limit how much you spend on health care, too. As critics warned, the Affordable Care Act will not “bend the cost curve downward” as promised. To the contrary, a June report by the Centers for Medicare and Medicaid predicts that national health spending through 2021 will continue to grow at a considerably faster clip than Gross Domestic Product. That growth will not be even. Private health insurance spending will rise about 8 percent. Medicaid spending will grow about 20 percent.

In a few years, government will account for 50 cents of every health care dollar spent in America.

What’s more, federal health care costs will consume a larger and larger share of the federal budget—and crowd out all other government functions in the process. If current trends continue, then by 2025 just four budget categories—Medicare, Medicaid, Social Security, and interest on the debt—will gobble up every last federal dollar.

 This, naturally, has alarmed many progressives. But don’t worry—as always, they have a plan. According to The Washington Post's Ruth Marcus, “23 responsible Democrats—some of the left’s leading thinkers in the health-care field—have just come up with a set of answers.” And like a boozer who tries to drink himself sober, their answer is…wait for it…more government.

The group, Marcus writes, believes that “no matter how hard federal officials work to slow the rising trajectory of federal spending, their efforts will fail if overall health-care costs continue to rise. ‘Health costs throughout the system drive federal health spending,’ they write...’The only sustainable solution is to control overall growth in health costs.’” Translation: Set a nationwide cap on all health spending, including private spending. This is the brilliant fix being offered by "responsible...leading thinkers” such as the Center for American Progress’ John Podesta and former Obama health-care adviser Ezekiel Emanuel. (Just imagine what the irresponsible, second-rate thinkers would come up with.)

  Pause for a second to review how we got here. Although numerous factors have contributed to the explosion of health-care costs—an aging population and expensive technology, for example—a chief driver is government itself. WWII-era wage controls, followed by the tax preference for employer-provided health insurance, combined to create the third-party-payer conundrum vexing us today. Medicare and Medicaid made the cost problem worse. It’s the same dynamic driving up college tuitions: Massive government subsidies encourage massive price hikes, which then ostensibly justify yet more government intervention to bring prices down.

 If you’re wondering whether anyone could have seen this coming, the answer is: yes. Precisely the same story has played out in Massachusetts, thanks to Mitt Romney and Romneycare. According to The Wall Street Journal: "Health costs...will consume some 54 percent of the [Massachusetts] state budget in 2012, up from about 24 percent in 2001. Over the same period state health spending in real terms has jumped by 59 percent, while education has fallen 15 percent, police and firemen by 11 percent and roads and bridges by 23 percent.” So Massachusetts is imposing a cap on health spending, public and private.

Here’s the Journal again: “All Massachusetts doctors, hospitals and other providers must register with a new state bureaucracy as a condition of licensure...They'll be required to track and report their financial performance, price and cost trends, state-sanctioned quality measures, market share and other metrics....An 11-member board known as the Health Policy Commission will use the data to set and enforce rules to ensure that total Massachusetts health spending, public and private, grows no more than projected gross state product through 2017.”

 “Sweeping” is a woefully inadequate word to describe such policies, whose terminus is all too clear: If health-care spending hits the government-dictated ceiling, then even if you’re willing to pay a doctor out of pocket for a consultation, the government won’t let you. The essence of Obamacare was the individual mandate—the decree that everyone must buy health insurance, whether they want it or not. Now, many of the same liberals who wanted government to make people spend money on health care also want to dictate the point at which they should stop. (And when that doesn’t work, what then?) Without knowing it, progressives are proving William Voegeli correct. “Liberals,” he writes in Never Enough, “don’t want the government to grow indefinitely. They just want it to be bigger than it is right now.”

 This column originally appeared in the Richmond Times-Dispatch.