Friday, October 02, 2015

OPEC's Family Feud

                                                   Comments due by Oct 9, 2015

When Venezuelan Oil Minister Juan Pablo Pérez Alfonso resigned in 1963, he blasted the Organization of Petroleum Exporting Countries, at the time torn by internal rivalries, for failing to produce any benefits for his country. Half a century later, OPEC is still split and Venezuela is again unhappy, this time at the unwillingness of the organization’s top producer, Saudi Arabia, to rescue oil prices from a six-year low that’s dragging the battered Venezuelan economy into an even deeper crisis.
On Sept. 10, Venezuela’s oil minister, Eulogio del Pino, tweeted appeals for OPEC and non-OPEC countries “to have a discussion on fair prices, minimum prices to ensure sustainability” and to “overcome our differences of opinion.” Venezuelan President Nicolás Maduro said on Sept. 16 that he was making progress on organizing a summit of petroleum exporting countries to have that discussion. OPEC member Algeria is backing the Venezuela-proposed conference—as well as Maduro’s desire for a higher price. Venezuelan officials didn’t respond to requests for comment.
Maduro’s plans won’t pan out unless Saudi Arabia stops flooding the market. There’s no sign it’ll retreat from that strategy, which is helping it preserve and even gain market share. “OPEC is of no use today,” says former Algerian Prime Minister Ahmed Benbitour. “The war now is about market share, not price, and Algeria is getting no benefit from this organization.” OPEC declined to comment for this story.
Venezuela’s and Algeria’s complaints raise the question of why some members stay in OPEC if the Saudis call the shots and ignore pleas for higher prices. Neither Venezuela nor Algeria has made moves to quit. Not only is the group intact, but former member Indonesia is returning, boosting membership to 13 nations.
Disgruntled members “don’t leave because they still believe there could be something in the future where the group does make a decision” to boost prices and cut production, says Jamie Webster, an oil analyst at researcher IHS. “It’s much easier to just keep OPEC alive than to shut it down, and with it a key communication channel” among governments whose financial health depends largely on oil income.
Of the 1.7 trillion barrels that remain to be extracted worldwide, 1.2 trillion, or 70 percent, are controlled by OPEC’s current members. Venezuela and Saudi Arabia hold 18 percent and 16 percent, respectively, and Iran and Iraq 9 percent each, according to oil major BP. These four nations, with Kuwait, are OPEC’s founding members.

“Just look at the outlook for oil in the next 10, 20, 30 years. It is expected that OPEC countries will actually have to come up with most of the growth in supply to meet the demand,” says former OPEC Secretary General Adnan Shihab-Eldin of Kuwait. “If OPEC didn’t exist, it would be needed in the future much more than in the present or the past” to coordinate production and keep the world supplied.
Pricing has often been a bone of contention, with Algeria, Iran, Iraq, Libya, and Venezuela pushing for higher prices, a hawkish stand compared with Saudi Arabia and its neighbors Kuwait, Qatar, and the United Arab Emirates. “Venezuela’s position within OPEC is to pursue a strategy of low production and high prices, since they can’t attract investments” to boost output, says Carlos Rossi, president of Caracas-based consulting firm EnergyNomics. Gulf Arabs are more inclined to accept a lower price to keep consumers hooked on cheap gasoline and thus extend the Age of Oil. Saudi Arabia in particular is more likely to accept a lower price that preserves global growth and gives it influence far in excess of its actual economy. Says Ed Morse, Citigroup Global Markets managing director: “Saudi Arabia’s economy is the size of Illinois’s.” Yet the nation sits at the same table as China, Europe, Japan, and the U.S. thanks to its role as the major producer.
Instead of lowering output to prop up prices, as suggested by Algeria and Venezuela, Saudi Oil Minister Ali al-Naimi lobbied his OPEC counterparts in November 2014 not to yield market share to competing suppliers, including U.S. producers of shale oil. Crude sank and trades at about $50 a barrel, half its level a year ago. “What OPEC wanted to do is have a fresh look at the structural changes that have taken place in the oil market with the advent of U.S. shale and other producers, who at a very high price were able to bring in fresh supplies that far exceed what demand called for,” says Shihab-Eldin.
Algeria’s and Venezuela’s attempts to recruit non-OPEC producers in an effort to increase prices have been rejected by Russia and Mexico, two of the largest exporters outside the group. The Mexicans say their focus is on restoring the productivity of their biggest field. Russia says it doesn’t have the ability of some Persian Gulf producers to quickly raise or lower output because of the harsh winters and complex geology at its Siberian oil fields. “You cannot regulate productivity of Russian wells simply by turning a faucet,” Sergei Klubkov, exploration and production analyst at Moscow-based Vygon Consulting, said in an e-mail.
The International Energy Agency says Saudi Arabia is winning the fight for market share, driving higher-cost producers—for example, some U.S. shale companies—out of business. Non-OPEC supply is expected to fall in 2016 by the most in more than two decades as producers shut wells that can’t operate profitably with oil below $50 a barrel. Production outside OPEC will fall by 500,000 barrels a day, to 57.7 million, in 2016, the agency said on Sept. 11.
That’s no solace for those in OPEC who are hard-pressed for cash. Fresh supply is likely to hit the market from Iran next year, when the oil export ban is lifted as a result of the July agreement with the U.S. and the other Western powers restricting its nuclear program. Oil prices could drop to as low as $20 a barrel, Goldman Sachs said on Sept. 11.
Saudi Arabia’s production of about 10.5 million barrels a day is its highest ever, and the kingdom still has spare capacity of more than a million barrels. Other OPEC members are pumping less oil as projects to bring fresh crude to the market were derailed or delayed by political or social unrest. Venezuela is producing 2.5 million barrels a day, vs. a peak of 3.7 million in 1970. Algeria and Nigeria are in similar straits.
Those three nations, plus Iraq and Libya, are the OPEC members most vulnerable to political turmoil as cheap oil hammers their currencies and weakens their ability to sustain social subsidies. Venezuela “appears poised for a near-term crisis” amid protests and shortages of basic goods as December’s parliamentary elections get closer, analysts Christopher Louney and Helima Croft of the Royal Bank of Canada said in an August report on OPEC’s “fragile five.”
“OPEC is like a family where the children quarrel but can’t do without each other,” says Karin Kneissl, a Vienna-based university lecturer on energy politics and author ofEnergy Poker. “They know they are better off talking to each other to preserve the common, long-term interest; even those who left long to return if they can.”
Indonesia voluntarily suspended its OPEC membership in 2009 as its production declined to the point that it had to import oil. Indonesia still pumps oil for its domestic market. It will return officially on Dec. 4 as the first member that isn’t a net oil exporter. As OPEC’s only member in East Asia, Indonesia could help strengthen the group’s ties in the region, where oil demand is strongest, said Indonesian Energy Minister Sudirman Said in June. As both oil consumer and producer, it will help OPEC bridge the divide between the two groups, he said.
“The benefits from staying with the group outweigh by far the cost of membership,” says Hasan Qabazard, chief executive officer of Kuwait Catalyst and former head of research at OPEC. “Getting firsthand access to market data, research, and information that may affect the market” could be “the motivation behind Indonesia’s application” to return.
“I don’t see OPEC falling apart,” says Fayyad Al-Nima, Iraq’s deputy oil minister for extraction. And Venezuela’s reason for sticking with the group? Says Carl Larry, head of oil and gas for market researcher Frost & Sullivan: “It’s either stay with OPEC and tag along or leave OPEC and be by yourself.”
The bottom line: Saudi Arabia manages to impose its will on other members of OPEC, thanks to its ability to flood the market.

Friday, September 25, 2015

Human Development Index ; HDI

                                                      Comments due by Oct. 2, 2015
The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The HDI can also be used to question national policy choices, asking how two countries with the same level of GNI per capita can end up with different human development outcomes. These contrasts can stimulate debate about government policy priorities.
The Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions.
The health dimension is assessed by life expectancy at birth component of the HDI is calculated using a minimum value of 20 years and maximum value of 85 years. The education component of the HDI is measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school entering age. Mean years of schooling is estimated by UNESCO Institute for Statistics based on educational attainment data from censuses and surveys available in its database. Expected years of schooling estimates are based on enrolment by age at all levels of education. This indicator is produced by UNESCO Institute for Statistics. Expected years of schooling is capped at 18 years. The indicators are normalized using a minimum value of zero and maximum aspirational values of 15 and 18 years respectively. The two indices are combined into an education index using arithmetic mean.
The standard of living dimension is measured by gross national income per capita. The goalpost for minimum income is $100 (PPP) and the maximum is $75,000 (PPP). The minimum value for GNI per capita, set at $100, is justified by the considerable amount of unmeasured subsistence and nonmarket production in economies close to the minimum that is not captured in the official data. The HDI uses the logarithm of income, to reflect the diminishing importance of income with increasing GNI. The scores for the three HDI dimension indices are then aggregated into a composite index using geometric mean. Refer to Technical notes for more details.
The HDI does not reflect on inequalities, poverty, human security, empowerment, etc. The HDRO offers the other composite indices as broader proxy on some of the key issues of human development, inequality, gender disparity and human poverty.
A fuller picture of a country's level of human development requires analysis of other indicators and information presented in the statistical annex of the report.

Copy this link into your browser to look at the HDI data:

Friday, September 18, 2015

Happiness Index

                                         Comments due by Sept. 25, 2015
We will start soon a detailed discussion of what is GDP, what are its components and how is it calculated. We will also point out to the fact that the GDP was not meant to be a measure of welfare as some insist on doing. Efforts to develop a Happiness Index as a measure of "subjective wellbeing" is something that you must become familiar with. I hope that some might even decide to write your research paper on this topic or something closely related to it.
Calls from UK Prime Minister David Cameron, the United Nations’ World Happiness Report, the OECD’s Better Life Index, along with psychologists and economists, all reflect on the need to develop a better understanding of subjective wellbeing (‘happiness’). Though many contemporary economies have tracked crime, education and economic production for the best part of a century, subjective wellbeing only began to become a staple of world economic indicators in the 1970s.
Unlike national income accounting, which initiated the collection of GDP in the 1930s, subjective wellbeing is a rather young indicator. Though there have been successful projects to roll back GDP (e.g. Bolt and van Zanden 2014, Broadberry 2015), attempts to construct historical series for wellbeing have been notably lacking. Without such a series, we are left wondering how wellbeing responds to key historical events, such as expansionary monetary policies, education and longevity.
But if constructing historical series for wellbeing makes sense, how can we extend existing measures when direct survey evidence was only initiated in the 1970s? The key insight in our new research paper (Hills et al. 2015) is that language conveys sentiment, and that the growing availability of digitised text provides unprecedented resources to construct a quantitative history of wellbeing based on historical language use.
In particular, the foundation of our work involves combining multiple large collections of texts of natural language going back two centuries with state-of-the-art methods for deriving public mood (i.e. sentiment) from language. The recent digitisation of books, newspapers and other sources of natural language – such as the Google Books Ngram database – represent historically unprecedented amounts of data (‘big data’) on what people thought and wrote over the past few centuries (see Michel 2011). These databases have already proved fruitful in detecting large-scale changes in language, which in turn correlate with social and demographic change, for instance in Hills and Adelman (2015).
These data offer the capacity to infer public mood using sentiment analysisDeriving sentiment from large collections of written text represents a growing scientific endeavour. Examples include recovering large-scale opinions about political candidates, predicting stock market trends, understanding diurnal and seasonal mood variation, detecting the social spread of collective emotions, and understanding the impact of events with the potential for large-scale social impact such as celebrity deaths, earthquakes and economic bailouts (e.g. Pang and Lee 2008). Applying the same methods to historical text we can begin to produce more quantitative accounts of national happiness.
In the approach we take, sentiment measures are based on valence norms for thousands of words. These already exist in the literature and are collected from a large group of individuals who are asked to rate a list of words on how those words make them feel (e.g. Gilbert 2007). In the present case, valence norms based on the affective norms for English words have already been collected for five languages: English, French, Spanish, Italian, and German.
We applied these norms to the Google Books corpus for each of these languages, allowing us to derive a new index for subjective wellbeing going back to 1776, which we tentatively call the HPS index. An initial comparison with subjective wellbeing collected with survey data is shown in Figure 1. The data reflect the residuals after controlling for country fixed effects and clearly show a strong and significant correlation with our measure based on historical language.
Figure 1. Comparison between survey measures of life satisfaction and residuals (after controlling for country fixed effects) for our measure based on sentiment from historical text.
Note: The grey area represents the 95% confidence interval.
Rolling the text-derived measures of subjective wellbeing back to 1776 reveals a quantitative picture of how public sentiment has changed across the six countries we considered: France, Germany, Italy, Spain, the UK and the US. Though we make clear in our research that we need to exercise caution when examining very long-run trends (as language itself has evolved so much), it is nonetheless clear in Figure 2 that short-term events, such as the exuberance of the 1920s, the Depression era, and World Wars I and II show clear and distinguishable influences on subjective wellbeing.
Figure 2. The average valences over the period 1776-2000.
Note: For all countries the vertical red lines correspond to 1789 (the year of the French Revolution), World War I (1915-18) and World War II (1938-45). In the five European countries, a line is draw for 1848 (the year of the revolutions). In the US, the vertical lines represent: the Civil War (1861-65), the Wall Street Crash (1929), the end of Korean War (1953) and the fall of Saigon (1975); in the UK, the Napoleonic Wars (1803-15). In Spain, the starting of Civil War (1936); in France, the Napoleonic Wars (1803-15), the end of the Franco-Prussian War (1870); for Germany, the vertical lines represent the Napoleonic Wars (1803-15), the Franco-Prussian War and unification (1870), Hitler's ascendency to power (1934), the reunification (1990); for Italy, the unification (1861-70).

Why is a quantitative history of wellbeing important?

The fledgling state of wellbeing data has limited our collective ability to understand how wellbeing responds to different historical events. This has in turn limited the use of wellbeing in public policy, health initiatives and financial decision-making. In practice, if subjective wellbeing is to become a key factor in guiding our collective behaviour, then we need accounts of wellbeing on a par with those of GDP.
Using wellbeing as a measure to guide behaviour, however, takes more than the desire to simply improve wellbeing. As noted by Gilbert (2007), people have problems understanding so-called ‘affective forecasting’ – the ability to understand how one will feel in the future – and with this also comes a limited capacity to understand how prior events and decisions influenced our past happiness.
To overcome this, especially at the government level, we must develop our capacity to predict how wellbeing responds to both deliberate and unexpected events. Better predicting economic fortunes was the motivation of the national income accounting, which later became GDP, following the Depression in the 1930s. Of course, now numerous decisions are based on GDP, despite a near global acceptance that, in the words of John F Kennedy, “it measures everything in short, except that which makes life worthwhile” (Presidential Library and Museum, North Dakota).
Thus, as with GDP, governments and other agencies recognise the importance of this additional ‘emotional accounting’ and, by all accounts, they want to understand how better to use it to improve future wellbeing. But to do that we need historical informed accounts of what this means, and our index represents a first attempt.(Vox, Sept 17, 2015)

Friday, September 11, 2015

Wage Rates and Interest Rate

                                                       Comments due by Sept. 18, 2015
For most Americans, paychecks determine living standards. Unfortunately, wages in America have long stagnated or declined for most working people, including college graduates.
The disappointing employment report for August — in which wage growth showed no sign of accelerating — only drove home that reality.
Worse, flat or falling pay is self-reinforcing because it dampens demand and, by extension, economic growth. In the current recovery, median wages have fallen by 3 percent, after adjusting for inflation, while annual economic growth has peaked at around 2.5 percent. At that pace, growth isn’t able to fully repair the damage from the recession that preceded the recovery. The result is a continuation of the pre-recession dynamic where income flows to the top of the economic ladder, while languishing for everyone else.
Policy makers should be focused on strategies to raise wages, but the opposite appears to be happening. Just as Congress enfeebled the economy by switching too soon from stimulus spending to budget cuts, Federal Reserve officials have all but vowed to begin raising interest rates this year. That move reflects a belief that the economy is returning to “normal,” but it would be premature, because today’s norm is an economy that is incapable of generating and sustaining broad prosperity.
In a healthy economy with upward mobility and a thriving middle class, hourly compensation (wages plus benefits) rises in line with labor productivity. But for the vast majority of workers, pay increases have lagged behind productivity in recent decades. Since the early 1970s, median pay has risen by only 8.7 percent, after adjusting for inflation, while productivity has grown by 72 percent. Since 2000, the gap has become even bigger, with pay up only 1.8 percent, despite productivity growth of 22 percent.
Why has worker pay withered? The answer, in large part, is that rising productivity has increasingly boosted corporate profits, executive compensation and shareholder returns rather than worker pay. Chief executives, for example, now make about 300 times more than typical workers, compared with 30 times more in 1980, according to the Economic Policy Institute. Other research shows far greater discrepancies at some companies.
For younger people, pay has actually declined. The average hourly wage for recent college graduates in early 2015 was $17.94, compared with $18.41 in 2000. That “loss” in starting pay, about $1,000, can carry over to diminished earnings for years to come. Young high school graduates have it even worse. Their average hourly pay was $10.40 in early 2015 versus $11.01 in 2000.
The Fed is a crucial player in reversing those trends, since one of its mandates is to foster full employment. Wage stagnation is a clear sign that the economy is not at full employment, which means it needs loose monetary policy, not tightening. An interest rate hike, by sending the wrong signal of economic health, could make it harder for labor groups and policy makers to assert the urgency of their efforts to raise pay.
In the past year, low-wage workers have successfully fought for minimum wage increases in states and cities. Congressional Democrats have championed legislation to raise the federal minimum wage and to fight wage theft and abusive worker scheduling. The Labor Department is moving ahead with a much needed new rule to update the nation’s overtime-pay laws.
In the midst of those efforts, it would be a setback for the Fed to act as if the economy is already near full employment. It’s not. The proof is in the paycheck.(NYT Editorial 9/7/2015)

Thursday, September 03, 2015

Jobs in New Orleans 10 years after Katrina

                         Comments due by Sept.11, 2015
New Orleans has spent the past decade clawing its way back to normality after Hurricane Katrina decimated much of the city, causing residents and businesses to flee. But as of late, it’s struggling to hold onto jobs.
It was the only major metropolitan area to have lost jobs in July compared with a year earlier, the Labor Department said Tuesday. In the past year, 50 out of the 51 metropolitan areas with populations of one million or more saw a rise in employment, according to the Labor Department. But payrolls shrank by 3,800 in the New Orleans-Metairie area in July, with losses concentrated in construction and the manufacturing sector that includes oil refining.
The New Orleans-Metairie area steadily added jobs year over year from fall 2010 through February this year. Since March, the area has lost an average of 2,275 jobs each month compared with the prior year.
Meanwhile, with the overall national economic recovery, quality is uneven among the thousands of jobs that have come back since the hurricane. A recent in-depth analysis showed that many of the jobs created in New Orleans since the devastating hurricane are low-wage jobs in the hospitality industry, mainly in the city’s restaurants, for which it is renowned.
The area’s nonseasonally adjusted unemployment rate fell to 6.4% in July from 6.7% in June, but is still well above the nonseasonally adjusted national average of 5.6% in July. The seasonally adjusted national unemployment rate was 5.3% in July.
In the past three years, its monthly unemployment readings have swung between 7.9% and as little as 5%. So far in 2015, the unemployment rate has hovered between 6% and 6.9%.
Across the country, winners over the past year included the New York-Newark-Jersey City metropolitan area, which added 164,400 nonfarm jobs between July 2014 and July 2015. Los Angeles-Long Beach-Anaheim, in California, saw 157,500 jobs spring up in the past year. Dallas-Fort Worth-Arlington, Texas, continued to add jobs to the tune of 121,700, even as the energy industry took a hit from falling gas prices.
Overall, 322 out of 387 metropolitan areas added jobs in the past year. Eleven were unchanged, and 54 lost jobs. (WSJ)

Tuesday, November 25, 2014

The New York Fed.

                                       Comments due by Dec 3, 2014

This is a must read about the Fed . It does deal with many of the issues that we spoke about during our last class session. 


WASHINGTON, DC – The US Federal Reserve System is the world’s most important central bank. Its decisions about interest rates and financial regulation reverberate through global markets and affect millions of lives. Yet its governance structure is of another age – antiquated, increasingly problematic, and urgently in need of sensible reform.
The Fed made major mistakes in the run-up to the global economic crisis of 2007-08, most notably by adopting a lax approach to the supervision of key financial institutions, and by allowing some very large banks to become extremely fragile. In one of the great ironies of modern American politics, the post-crisis Dodd-Frank financial reforms of 2010 actually gave more power to the Fed, mostly because other US regulatory agencies were regarded as having done a worse job.
In view of the Fed’s decidedly mixed track record since the Dodd-Frank reforms, some officials evidently regarded that default by Congress as a mandate to conduct business as usual. Recent press reports have highlighted lapses in supervision, particularly in and around the Federal Reserve Bank of New York – one of 12 regional banks in the Fed System, which also has a Board of Governors in Washington, DC.
This regional structure is the result of legislative compromise in 1913, when the Fed was created, and again in the mid-1930s, when its governance was last overhauled. Whereas members of the Fed’s Washington-based Board of Governors are nominated by the US president, subject to Senate confirmation, the presidents of the regional Federal Reserve banks are appointed by local boards.
In reality, the New York Fed has always had disproportionate sway; not all regional Fed presidents are created equal. The president of the New York Fed is a permanent voting member and vice chairman of the Federal Open Market Committee, which sets interest rates, whereas other regional Fed presidents are voting members only on a rotating basis.
The New York Fed also has a particularly important role in bank supervision – most of America’s “too big to fail” banks are located in its jurisdiction (and most global banks have a presence there). And the New York Fed has long been the Fed System’s eyes and ears on Wall Street.
Or perhaps it has become the other way around. At least over the past decade, senior New York Fed officials have consistently sided with the interests of very large banks. (To be clear, I also know many Fed officials who are outstanding public servants). Though Wall Street interests have long been well represented on the board of the New York Fed, under Timothy Geithner, its president from 2003 to 2009, the big players became even more powerful – with some rather unfortunate consequences for the rest of us.
In his recent memoir, Stress Test, Geithner says, “I basically restored the New York Fed board to its historic roots as an elite roster of the local financial establishment.” His choices included Dick Fuld, CEO of Lehman Brothers, which failed spectacularly in September 2008, and Stephen Friedman, a Goldman Sachs board member, who resigned as chair of the New York Fed’s board after being accused of inappropriately trading Goldman stock during the financial crisis. Geithner also established a tangled web of connections between the New York Fed and JPMorgan Chase, some of which linger to this day.
Some senior Fed officials become angry when pressed about this reality. But the Fed’s legitimacy – and its ability to make sensible policy – is not boosted by having major banks represented, directly or indirectly, on a board that chooses and oversees a key policymaker.
Now, finally, US politicians on both the left and the right are focusing their attention on a long-overdue reform of the Fed’s governance. One important proposal comes from Senator Jack Reed, a Democrat from Rhode Island, who proposes, quite reasonably, that the president of the New York Fed should be nominated by the president and confirmed by the Senate, just like members of the Board of Governors – or any other important economic policymaker. The president of the New York Fed would also be required to testify before Congress on a regular basis.
The Fed’s defenders will respond that it would be dangerous to alter the status quo. But it is the Fed’s current governance that has become dangerous. Senators Elizabeth Warren of Massachusetts and Joe Manchin of West Virginia argue, entirely convincingly, that the composition of the Fed’s Board of Governors should be tilted away from people who are connected with big Wall Street firms.
Meanwhile, House Republicans are preparing their own Fed governance reforms, which would be even more radical – and would likely constrain monetary policy unwisely.
In any case, it is time for change at the Fed. And, as is often the case with finance, the place to start is New York.

  • Friday, November 21, 2014


                                         Comments due Nov. 30, 2014
    The Tenement Museum, on the Lower East Side, is one of my favorite places in New York City. It’s a Civil War-vintage building that housed successive waves of immigrants, and a number of apartments have been restored to look exactly as they did in various eras, from the 1860s to the 1930s (when the building was declared unfit for occupancy). When you tour the museum, you come away with a powerful sense of immigration as a human experience, which — despite plenty of bad times, despite a cultural climate in which Jews, Italians, and others were often portrayed as racially inferior — was overwhelmingly positive.
    I get especially choked up about the Baldizzi apartment from 1934. When I described its layout to my parents, both declared, “I grew up in that apartment!” And today’s immigrants are the same, in aspiration and behavior, as my grandparents were — people seeking a better life, and by and large finding it.
    That’s why I enthusiastically support President Obama’s new immigration initiative. It’s a simple matter of human decency.
    That’s not to say that I, or most progressives, support open borders. You can see one important reason right there in the Baldizzi apartment: the photo of F.D.R. on the wall. The New Deal made America a vastly better place, yet it probably wouldn’t have been possible without the immigration restrictions that went into effect after World War I. For one thing, absent those restrictions, there would have been many claims, justified or not, about people flocking to America to take advantage of welfare programs.
    Furthermore, open immigration meant that many of America’s worst-paid workers weren’t citizens and couldn’t vote. Once immigration restrictions were in place, and immigrants already here gained citizenship, this disenfranchised class at the bottom shrank rapidly, helping to create the political conditions for a stronger social safety net. And, yes, low-skill immigration probably has some depressing effect on wages, although the available evidence suggests that the effect is quite small.
    So there are some difficult issues in immigration policy. I like to say that if you don’t feel conflicted about these issues, there’s something wrong with you. But one thing you shouldn’t feel conflicted about is the proposition that we should offer decent treatment to children who are already here — and are already Americans in every sense that matters. And that’s what Mr. Obama’s initiative is about.
    Who are we talking about? First, there are more than a million young people in this country who came — yes, illegally — as children and have lived here ever since. Second, there are large numbers of children who were born here — which makes them U.S. citizens, with all the same rights you and I have — but whose parents came illegally, and are legally subject to being deported.
    What should we do about these people and their families? There are some forces in our political life who want us to bring out the iron fist — to seek out and deport young residents who weren’t born here but have never known another home, to seek out and deport the undocumented parents of American children and force those children either to go into exile or to fend for themselves.

    The real question, then, is how we’re going to treat them. Will we continue our current regime of malign neglect, denying them ordinary rights and leaving them under the constant threat of deportation? Or will we treat them as the fellow Americans they already are?

    The truth is that sheer self-interest says that we should do the humane thing. Today’s immigrant children are tomorrow’s workers, taxpayers and neighbors. Condemning them to life in the shadows means that they will have less stable home lives than they should, be denied the opportunity to acquire skills and education, contribute less to the economy, and play a less positive role in society. Failure to act is just self-destructive.
    But speaking for myself, I don’t care that much about the money, or even the social aspects. What really matters, or should matter, is the humanity. My parents were able to have the lives they did because America, despite all the prejudices of the time, was willing to treat them as people. Offering the same kind of treatment to today’s immigrant children is the practical course of action, but it’s also, crucially, the right thing to do. So let’s applaud the president for doing it.
    (P. Krugman)

    The Economics of Thanksgiving Dinner.

                                    Comments due by Nov . 29, 2014      

    From negotiating family politics at the dinner table to managing the misery of holiday travel, the entire Thanksgiving enterprise is fraught with challenges for which we're supposed to be grateful. (And, of course, we are.)
    Even the annual traditions, like the constant of the Thanksgiving dinner, is subject to the whims of the universe. On Thursday, for example, the American Farm Bureau Federation announced that the price of Thanksgiving dinner is going slightly up this year. Using an informal survey of typical Thanksgiving offerings, the group determined that "the average cost of this year’s feast for 10 is $49.41, a 37-cent increase from last year’s average of $49.04."
    And while price increases seem to be a steady part of the tradition too, this year's presumptive Thanksgiving feast offers an interesting insight into how the economy is functioning. According to the U.S. Bureau of Statistics, turkey is actually 13 percent cheaper this year, despite the rising cost of most other meats. As the Columbus Dispatch noted, "at $1.58 a pound for a frozen bird at retail in September, the latest data available, turkey was 24 cents per pound cheaper than at the same time in 2013."
    The greater trend though, it adds, snaps the wishbone less in favor of the consumer: In 10 years, the per-pound price of turkey has risen 50 cents.
    So if falling fuel prices are dovetailing with a drop in corn and soybean prices (making turkey a bit cheaper), why is the overall cost of Thanksgiving dinner going up? The AFBF says prices for other staples like "sweet potatoes, dairy products and pumpkin pie mix" all jumped up in price.
    Meanwhile, in terms of actually getting to the table, driving seems to be the way to go. As the AP reported:
    Amtrak says its ticket prices have increased an average of 2 percent over last year. Same goes for flying. The average price of an airline ticket for travel this Thanksgiving is $307.52, not including an average $51 in taxes and fees, according to the Airlines Reporting Corp.
    The secret may be out though. According to AAA estimates, over 46 million Americans will drive 50 miles or more to their Thanksgiving gatherings. That's 4.2 percent increase from last year and the highest number since 2007. (The Atlantic)