This week, I have been mostly reading:

• Wall Street’s Message to Young Adults: “You are Clueless” — Bill Black at NEP elicits a LOL: Wall Street CEOs are very upset with young adults. They believe you are “clueless” and “voting against [your] own interests” when you support Bernie Sanders. A Wall Street CEO took to the pages of the Wall Street Journal to decry the fact that “Millennials are flocking to Sanders.” It would be cruel to note that one has to be clueless to believe that writing an op ed in the WSJ was a good way to reach millennials supporting Bernie.
• Dear Paul — Gerald Friedman (Context here): While you don’t know me, you seem to feel free to speculate about my values and interests. You assume that an outsider economist like myself must be considered not particularly “insightful or even technically competent.” And, elaborating this theory, you conclude that envy would lead me to jump on an opportunity for self-advancement by shilling for an outsider politician. Now this theory might be tested empirically. You could easily have tested your theory by investigating my motives empirically. You could have called me and asked. Or you could have read any of the news stories where I explained how I stumbled on this research project, and where I explained my (lack of) connection to the Sanders campaign. Krugman's continuing public self-immolation is baffling.
• Saturday Morning Breakfast Cereal:
• Who are the capitalists? — David F. Ruccio: It’s one of the questions I ask my students. And they always get the answer wrong. So, in my experience, do most other people. But it’s a key issue. If we’re going to figure out how capitalism works—and, perhaps even more important, how to change it—we need to know who the capitalists are.
• Surprised by the rise of Bernie Sanders and Jeremy Corbyn? Then you need to get out more — Simon Wren-Lewis: Political commentators talk to politicians who talk to political commentators. It tells us how embedded the influence of the City and Wall Street is. The media relies on economists from the financial sector, and so tends to see the economy from their perspective. The blind spot is mostly to the left, because we have the Daily Mail and Fox News. As a result, it came as a complete surprise that a crisis caused by the financial sector that left that sector unscathed but instead led to a diminished role for the state, might make many people rather angry.
• Robert Samuelson Is Unhappy that We Have Evidence Based Economics — Dean Baker at CEPR: There are still millions of unemployed or underemployed workers who would like full-time jobs. This means that the concern about balanced budgets is needlessly keeping these people unemployed. And the weakness of the labor market is keeping tens of millions of workers from having the bargaining power necessary to get their share of the benefits from economic growth in higher wages. Perhaps even worse, the obsession with deficits prevents us from doing things we really need to do. The neglected items form a long list, from early childhood education and affordable college to keeping the kids in Flint from being poisoned.
• Australia’s Housing Bubble: In the Grip of Insanity — Pater Tenebrarum, who appears to be some kind of gold bug, but as the link comes via Naked Capitalism, and I agree with the conclusion, I'm prepared to overlook the tinfoil hat: In this particular case, the boom has already progressed to a rare extreme: with home prices at 10 to 12 times disposable income (far higher than the peaks attained in the housing bubbles in the US, Ireland and Spain), the end is clearly getting close. Australian home-owners, property investors and banks will be in for quite a rude awakening.
• How to Explain the Sanders Campaign to an Idiot, Paul Krugman or a Clintonite in 8 Sentences — Seth Abramson in the Huffington Post: Bernie Sanders […] is staying in the race because all the extant hard data suggests he is a stronger general election candidate than Mrs. Clinton, because he passionately believes the Democrats must defeat Donald Trump in the fall, and because Mrs. Clinton’s stunning failure to secure 59 percent of pledged delegates didn’t merely invite but indeed encouraged him to take his case to superdelegates in July […] The Democratic Party has never, in modern history, run a candidate with an unfavorable rating as high as Mrs. Clinton’s […] Sanders plans to continue his campaign in the hope of saving Democratic elders from their slavish devotion to a political dynasty that’s turned the Party from its New Deal roots toward a neoliberal corporatism now destroying the middle class.
• Waist deep in the Big Muddy — John Quiggin: The sudden collapse of four for-profit vocational education enterprises including Aspire college is the latest in a string of scandals, failures and license revocations in the sector. […] The provision of public funds to for-profit operators has been a predictable, and predicted disaster. Of all the disasters perpetrated under the banner of microeconomic reform, education reform has probably been the worst.
• Morrison's tax swap would have taken from the poor and given to the rich — Peter Martin: The most shocking thing in the Treasury analysis delivered to Scott Morrison on January 25 isn't the finding that a cut in income tax funded by a lift in the goods and services tax wouldn't boost the economy at all. It's what Morrison asked the Treasury to model. He asked it to model a lift in GST from 10 to 15 per cent and then the handing back of every possible cent in income tax cuts. Because boosting the GST automatically results in extra spending on benefits such as Newstart, family allowances and pensions as prices climb it isn't possible to give all of it back. But it is possible to hand back $30 billion of the $35 billion as tax cuts, and that's what Morrison asked the Treasury to model in the first instance, not legislated increases in benefits of the kind delivered by his predecessor Peter Costello when introducing the GST. The impact is horrific.
• To Fix Inequality and Steady the Economy, Think Radically — Lynn Parramore at INET interviews Adair Turner: […] for the decade leading up to 2007, a whole lot of people who weren’t getting raises felt that they were doing ok because they managed to buy a house that was going up in price. But it all came to and end, a catastrophic end. Rising inequality can create a more highly leveraged economy, and it can then make the economy vulnerable to a crash like 2008. And in that crash, the really malign thing is that the crash itself tends to further increase inequality because it tends to be the people at the lower end of the wealth distribution who were highly leveraged and had to borrow lots of money to buy their house. In the downswing, they lose all the wealth they’ve got.