1
U.S.
A Fight Over Water, and to Save a Way of Life
A decades-long war over river flow into Apalachicola Bay in Florida has contributed to the collapse of the oyster industry there.
2
U.S.
New Rules May Rein In Prosecutors in Leak Investigations
Attorney General Eric H. Holder Jr., under fire over investigative tactics at the Justice Department, has opened internal discussions over new limits on seeking information that could identify reporters’ sources.
3
U.S.
Scramble for Female Votes in Mass. Senate Race
Representative Edward Market is aggressively courting women voters with the help of Carole King and others as he tries to tip the balance in the Massachusetts Senate race in his favor.
4
World
Seven Die in Iran After Drinking Homemade Alcohol
A batch of illegally distilled alcohol has killed seven people, hospitalized dozens and blinded several others in the southern city of Rafsanjan.
5
World
Trade Schools Offer Hope for Rural Migrants in China
While newly minted university graduates face a tight job market, skilled vocational school graduates are in high demand.
6
Technology
Official Pushes for End to Roaming Fees in Europe
The European Union’s commissioner for digital policies is pressing for one set of rules governing the market for cellphones in Europe.
7
Business Day
Treasury Auctions Set for This Week
The following tax-exempt fixed-income issues are scheduled for pricing this week.The Macroeconomics of European Disunion
Wolfgang Münchau
makes a point that isn’t new, but still gets overlooked too often: the
euro area is, for practical macroeconomic purposes, a single unit — and
one that doesn’t really do all that much trade with the rest of the
world. Aggregate euro area policy, monetary and fiscal, should therefore
be subject to more or less the same rules that apply to the United
States.
Yet because monetary union wasn’t accompanied by political union, the continent as a whole is pursuing what amount to insanely restrictive policies. Here we have an economy with massive unemployment and inflation that is too low by any reasonable standard (Europe, even more than America, would do a lot better with a 4 percent inflation target):
Yet what we see is sharply restrictive fiscal policy:
And the ECB isn’t even trying to offset this fiscal drag with
expansionary monetary policy, in part because of fear of adverse
reactions to possible higher inflation in Germany.
We can and often do get bogged down in the details of country analysis, not to mention the difficult politics of the situation. But every once in a while it’s worth backing up and thinking about the fundamental craziness of aggregate European policy."
Yet because monetary union wasn’t accompanied by political union, the continent as a whole is pursuing what amount to insanely restrictive policies. Here we have an economy with massive unemployment and inflation that is too low by any reasonable standard (Europe, even more than America, would do a lot better with a 4 percent inflation target):
We can and often do get bogged down in the details of country analysis, not to mention the difficult politics of the situation. But every once in a while it’s worth backing up and thinking about the fundamental craziness of aggregate European policy."
8
Opinion
An Injustice on Death Row
Robert M. Morgenthau, the former Manhattan district attorney, discusses the wrongful conviction of William E. Kuenzel, a man on death row whose case was declined by the Supreme Court.
9
Business Day
F.D.A. to Reconsider Restrictions on Diabetes Drug
In a highly unusual move, the agency has decided to reopen the case on Avandia and will ask a committee whether it should reconsider the restrictions on the drug.
10
Business Day
Google’s Washington Insider
Susan Molinari, a brassy, well-connected New York Republican who served seven years in the House, now works to broaden Google’s support beyond Silicon Valley Democrats.
11
Business Day
To Compete, G.M. Alters a Sedan
The revamped Malibu, along with new pickup trucks this summer, is part of an effort by General Motors to emerge from years of retrenching after its financial collapse.
12
Arts
Donald Judd and the Art of Living
The factory at 101 Spring Street in New York, where the artist once lived and worked, is opening to the public this month after three years of restoration.
13
Business Day
Chinese Bid for U.S. Pork Had Links to Wall Street
The bid for Smithfield Foods, America’s biggest pork producer, points to a type of cooperation between Wall Street and Asia’s elites that may be on the rise.
14
Magazine
Colum McCann’s Radical Empathy
Four years after the publication of “Let the Great World Spin,” Colum McCann’s magnificent, cathartic 9/11 novel continues to help people cope with tragedy.
15
N.Y. / Region
Just in Time for Summer, the A Train Is Fully Restored
Seven months after Hurricane Sandy wiped a portion of the A train from the subway map, full service was restored to the peninsula on Thursday.
16
N.Y. / Region
Teacher Assessments Extending to Art and Gym
A new state system will include teachers of subjects that are not typically evaluated.
17
Travel
Let’s Play: Making Travel a Game
In case the view’s not enough, several apps and programs turn your trip into a game, offering GPS challenges, dispensing trivia and helping you make social connections mid-flight.
18
World
U.S. Targets Iran’s Petrochemical Industry
In addition to blacklisting Iranian petrochemical companies for the first time, the Obama administration punished businesses in other countries that help Iran evade oil sanctions.
19
Business Day
Consumer Spending Slipped 0.2 Percent in April
Lower gasoline prices and warmer weather, which meant lower spending on utilities, contributed to the decline.Ben Bernanke Endorses A 73 Percent Tax Rate
OK, he didn’t actually say that in so many words. But if you follow through on the logic of his excellent speech at Princeton yesterday, that’s where you end up.
Actually, there were several things Bernanke said that were politically controversial. When he declared that
But the big thing in Bernanke’s remarks was his discussion of the obligations of the successful, even within a supposedly meritocratic society:
As soon as you portray the choice that way, you’ve introduced a strong presumption in favor of redistribution. After all, if you should happen to end up as a member of the top 1 percent, an extra dollar at the margin won’t mean a lot to you; but if you should happen to end up as a member of, say, the bottom quintile, an extra dollar could make a lot of difference. So you should, other things equal, favor a system of progressive taxation and generous aid to the poor and unlucky.
So why not favor complete leveling, America as Cuba? Because for many reasons, both economic and political, we favor a market economy in which people make decentralized decisions about working, saving, and so on. And this means that incentive effects become important; you can’t levy 100 percent taxation on the rich, or completely insulate the poor from any consequences of low income, without destroying the incentives you need to make the economy work.
The question then becomes one of numbers. In particular, how high should we set the top tax rate? From a Rawlsian perspective, the key thing about very high incomes is that making them a bit higher or lower basically doesn’t matter — if you are lucky enough to find yourself in the top 0.1 percent (say), the marginal value of a dollar to your welfare is trivial compared with the value of that dollar to almost anyone else. So the top tax rate should be set solely with regard to the amount of money it raises for other purposes; essentially, you should soak the rich up to the point where any further rise in the tax rate would actually reduce revenue.
And we have a pretty good idea, based on careful statistical studies, of where that optimal top rate lies; 73 percent, say Diamond and Saez, maybe 80 percent, say Romer and Romer.
Does this sound wildly radical to you? Well, it’s just where the logic and evidence take you once you adopt a more or less Rawlsian view of social justice — which is exactly what Ben Bernanke did at Princeton.
Some people have suggested that BB’s speech had a touch of radicalism to it. Little did they know!"
Actually, there were several things Bernanke said that were politically controversial. When he declared that
physical beauty is evolution’s way of assuring us that the other person doesn’t have too many intestinal parasiteshe was endorsing the theory of evolution — which puts him at odds with a large majority of Republicans, 58 percent of whom believe that man was created in his present form within the last 10,000 years.
But the big thing in Bernanke’s remarks was his discussion of the obligations of the successful, even within a supposedly meritocratic society:
We have been taught that meritocratic institutions and societies are fair. Putting aside the reality that no system, including our own, is really entirely meritocratic, meritocracies may be fairer and more efficient than some alternatives. But fair in an absolute sense? Think about it. A meritocracy is a system in which the people who are the luckiest in their health and genetic endowment; luckiest in terms of family support, encouragement, and, probably, income; luckiest in their educational and career opportunities; and luckiest in so many other ways difficult to enumerate–these are the folks who reap the largest rewards. The only way for even a putative meritocracy to hope to pass ethical muster, to be considered fair, is if those who are the luckiest in all of those respects also have the greatest responsibility to work hard, to contribute to the betterment of the world, and to share their luck with others.OK, this is, whether BB realizes it or not (he probably does) basically a Rawlsian view of the world, in which you think of life as a kind of lottery in which you draw a ticket that includes things like your genetic endowment as well as the wealth of your parents. And what you’re supposed to do, ethically, is support the economic and social system you would choose if you had to enter that lottery not knowing what ticket you were going to draw — if you were making political choices behind the “veil of ignorance”.
As soon as you portray the choice that way, you’ve introduced a strong presumption in favor of redistribution. After all, if you should happen to end up as a member of the top 1 percent, an extra dollar at the margin won’t mean a lot to you; but if you should happen to end up as a member of, say, the bottom quintile, an extra dollar could make a lot of difference. So you should, other things equal, favor a system of progressive taxation and generous aid to the poor and unlucky.
So why not favor complete leveling, America as Cuba? Because for many reasons, both economic and political, we favor a market economy in which people make decentralized decisions about working, saving, and so on. And this means that incentive effects become important; you can’t levy 100 percent taxation on the rich, or completely insulate the poor from any consequences of low income, without destroying the incentives you need to make the economy work.
The question then becomes one of numbers. In particular, how high should we set the top tax rate? From a Rawlsian perspective, the key thing about very high incomes is that making them a bit higher or lower basically doesn’t matter — if you are lucky enough to find yourself in the top 0.1 percent (say), the marginal value of a dollar to your welfare is trivial compared with the value of that dollar to almost anyone else. So the top tax rate should be set solely with regard to the amount of money it raises for other purposes; essentially, you should soak the rich up to the point where any further rise in the tax rate would actually reduce revenue.
And we have a pretty good idea, based on careful statistical studies, of where that optimal top rate lies; 73 percent, say Diamond and Saez, maybe 80 percent, say Romer and Romer.
Does this sound wildly radical to you? Well, it’s just where the logic and evidence take you once you adopt a more or less Rawlsian view of social justice — which is exactly what Ben Bernanke did at Princeton.
Some people have suggested that BB’s speech had a touch of radicalism to it. Little did they know!"
20
U.S.
Maine: Zumba Teacher Sentenced for Prostitution
A Zumba fitness instructor at the center of a prostitution scandal told a judge who sentenced her Friday to 10 months in jail that she is happy to have escaped her former life.
1
Health
Microsampling Air Pollution
New portable sensors allow users, often citizen scientists, to record minuscule fluctuations in air quality in a neighborhood, on a floor of a building or in a bus.
2
Business Day
The S.E.C. Is 'Bringin' Sexy Back' to Accounting Investigations
In the past, the Securities and Exchange Commission relied mainly on the market to flag accounting problems at companies that would lead to an investigation. Now, it is devising new programs to be more proactive.
3
Opinion
A New Way to Harvest Wind Energy at Sea
A small floating wind turbine tests the promise of cheaper offshore wind energy supplies.
4
Health
Men's Use of Hormone on the Rise
A new report shows that the number of older and middle-aged men prescribed the hormone has tripled since 2001, raising concerns about abuse and mistreatment.
5
Business Day
A Tale of Wall St. Excess
A former trader traces his rise and descent in “The Buy Side,” a memoir about the underbelly of big-money, fast-paced hedge funds.
7
8
N.Y. / Region
Teacher Assessments Extending to Art and Gym
9
Business Day
Checking Trees as Hurricane Season Starts
Homeowners’ insurance policies will typically cover damage when a tree falls on your home during a storm, but it is wise to take steps to deal with weakened trees beforehand.
10
13
Business Day
Consumer Spending Slipped 0.2 Percent in April
15
Health
Helping Children Play Safely in Sports
For children in organized sport, risks can be minimized with proper equipment, a safe environment, and access to health care professionals who know when and how to intervene.
16
Business Day
A.I.G. Ends Suit Against New York Fed Over Losses
A.I.G. has agreed to end its lawsuit over whether the New York insurer held the right to sue over mortgage-backed securities losses after the 2008 bailout.
17
Technology
Big Question for Wearable Computing: Is It Ready for Consumers?
While Apple and Google agree that the future of computers will be wearable, they disagree about which kind of computers people will actually want to wear.
18
U.S.
U.S. Says It Pursues More Prosecutions on Indian Lands
The Justice Department said its rate of criminal prosecutions in Indian country had risen by more than 50 percent in the past four years, a period in which violent crime soared.
19
Opinion
The Price of Rebellion
Was my grandfather a hero for speaking out against Jim Crow racism? I’m not sure.
20
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