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Surprise! Eric Cantor Lands $3.4 Million Job on Wall Street

| Tue Sep. 2, 2014 1:56 PM EDT

After Rep. Eric Cantor lost his primary to a tea party challenger in June, he could have stayed on as a lame duck, collecting his salary and voting as a full member of Congress through January 2015. Instead, Cantor decided to step down from his job as the GOP's majority leader and resign his seat early. Cantor claimed that the decision to call it quits was in the interests of his constituents. "I want to make sure that the constituents in the 7th District will have a voice in what will be a very consequential lame-duck session," Cantor said at the time, explaining that he'd timed his decision so his replacement could be seated as soon as possible.

No one believed it—on August 1, the Huffington Post's Arthur Delaney and Eliot Nelson wrote that voters would soon hear about "Eric Cantor's forthcoming finance job." A month later, their prediction has proven true: On Monday, the Wall Street Journal reported that Cantor will soon start work at Moelis & Co, an investment bank. Cantor—whose experience prior to becoming a professional politician largely consisted of working in the family real estate development business—will earn a hefty salary for his lack of expertise: According to Business Insider, he's set to make $3.4 million from the investment firm. "Mr. Moelis said he is hiring Mr. Cantor for his "judgment and experience" and ability to open doors—and not just for help navigating regulatory and political waters in Washington," the Journal reported.

Democrats sell out, too. In 2010, former Indiana Sen. Evan Bayh announced his plans to retire in 2010 in a New York Times op-ed that bemoaned the lack of bipartisan friendships in the modern Senate and attacked the influence of money in politics. Yet shortly after he left Congress, Bayh signed up with law firm McGuireWoods and private equity firm Apollo Global Management and began acting as a lobbyist for corporate clients in all but name. Less than a year later, he joined the US Chamber of Commerce as an adviser. Sen. Chris Dodd (D-Conn.) pulled a similar trick, promising "no lobbying, no lobbying," before taking a $1-million-plus job as the head of the Motion Picture Association of America, Hollywood's main lobbying group.

According to the Center for Responsive Politics, 417 ex-lawmakers hold lobbyist or lobbyist-like jobs.

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Inflation Is Still the Great Bogeyman of the Rich

| Tue Sep. 2, 2014 12:26 PM EDT

Paul Krugman is trying to figure out why wealthy elites are so damn obsessed with the dangers of moderately higher inflation. After all, in a deep recession, inflation is likely to spur economic growth, and that helps rich folks. Their assets increase in value and they become even richer. So what's their problem?

In a post yesterday, Krugman refers to my suggestion that it's mostly a case of septaphobia, or fear of the 70s. The idea here is that inflation really did run out of control in the 70s, and it really did take a massive recession engineered by Paul Volcker to rein it in. If that was one of your seminal experiences of the consequences of loose money, then it's no surprise that you fear inflation. But Steve Randy Waldman says this is "bass-ackwards":

Elites love the 1970s. Prior to the 1970s, during panics and depressions, soft money had an overt, populist constituency....The 1970s are trotted out to persuade those who disproportionately bear the burdens of an underperforming or debt-reliant economy that There Is No Alternative, nothing can be done, you wouldn’t want to a return to the 1970s, would you?

Quite right. Because the high inflation of the 70s really was painful for the middle class, the 70s do indeed serve a very useful purpose to elites who want to keep fear of inflation alive. But that begs the question: Why do they want to keep fear of inflation alive? The fact that elites have hated inflation forever isn't an answer. During the days of the gold standard, high inflation really did hurt the wealthy. But today's economy is vastly different from the hard-money + financial repression economy of the 70s and before. Inflation is much less threatening to the rich than it used to be. Why haven't they figured this out?

I'm not sure, but I do want to note that both Krugman and Waldman have at least partly misunderstood me. Although I do think that septaphobia is a real thing, I mainly think it's a real thing for the non-rich. It's primarily the middle class that fears a rerun of the 70s. That might have been a bit muddled in my initial post (which Krugman linked to), but I made this clearer in a subsequent post about the roots of inflation phobia:

So what's the deal? I'd guess that it's a few things. First, the sad truth is that virtually no one believes that high inflation helps economic growth when the economy is weak....Second, there's the legitimate fear of accelerating inflation once you let your foot off the brake....Third, there's the very sensible fear among the middle class that high inflation is just a sneaky way to erode real wages....Fourth, there's fear of the 70s, which apparently won't go away until everyone who was alive during the 70s is dead. Which is going to be a while.

Krugman responds to Waldman here, and even though Waldman says my argument is bass-ackwards, I actually think he and I mostly agree. Krugman may be right that higher inflation would help the rich right now, and that they'd support it if they were smart. But Waldman argues there's more to it. Basically, he thinks the rich are fundamentally conservative: inflation might help them on average, but there are still going to be plenty of losers whenever there's an engineered change to the economy. Since the rich, by definition, are already doing pretty well, why risk it?

I think that's probably right, though Waldman probably overstates its importance. Wealthy elites aren't that conservative, especially when it comes to making money. Still, it's almost certainly a significant factor. But I also think Krugman is right about false consciousness. In fact, that was #1 on my list above: the fact that virtually no one really, truly believes in Keynesian stimulus. (Waldman makes this point too.) If rich elites really did believe that a bit of high inflation would get the economy booming, I think they'd swallow their innate conservatism and support it. But they don't. Almost no one really believes it in their guts.

That's a failure of the economics profession, perhaps, but it's also a legacy of septaphobia. After all, if you take a look solely at the surface—and that's what most of us do, rich and poor alike—what's the lesson of the 70s? That's easy: Inflation got out of control and the economy went to hell. Then Paul Volcker reined in inflation, and the economy boomed. What's more, the rich have prospered mightily in the 30 years of low inflation since then. So why mess with a good thing?

So yes: It's septaphobia, both in a real sense and as a useful morality tale. It's false consciousness from wealthy elites who don't really believe that inflation will spur the economy. And it's the innate conservatism of the rich, who don't have much incentive to accept change when they're already doing pretty well. Add to that the fact that inflation phobia is an easy sell to voters because the middle class really does have reason to fear inflation, and you have everything you need to make it nearly impossible to convince people that a bit of higher inflation would be a good thing right now. And so we stagnate.

Putin Brags About How Fast He Could Take Ukraine

| Tue Sep. 2, 2014 10:58 AM EDT

Here's the latest from Russia:

Vladimir Putin has said Russian forces could conquer the Ukrainian capital, Kiev, in two weeks if he so ordered, the Kremlin has confirmed.

Moscow declined to deny that the president had spoken of taking Kiev in a phone conversation on Friday with José Manuel Barroso, the outgoing president of the European commission....Barroso asked Putin about the presence of Russian troops in eastern Ukraine. Nato says there are at least 1,000 Russian forces on the wrong side of the border. The Ukrainians put the figure at 1,600.

"The problem is not this, but that if I want I'll take Kiev in two weeks," Putin said, according to La Repubblica.

The Kremlin did not deny Putin had spoken of taking Kiev, but instead complained about the leak of the Barroso remarks.

Yes, the leak is the real problem here. Invading Ukraine is a mere piffle.

Gemma Ray's Latest Is Fresh and Unsettling

| Mon Sep. 1, 2014 6:00 AM EDT

Gemma Ray
Milk for Your Motors
Bronze Rat

A perfect master of noir pop, British-born Gemma Ray turns a familiar recipe—twangy guitars, dreamy melodies, hazy rhythms and wistful voices—into something fresh and more than a little unsettling. Milk for Your Motors transcends artful background music because her songs are smart and unpredictable, encompassing the nostalgic desire of "When I Kissed You" ("I want to remember how I kissed you / ’round the back of the air-raid shelter") and the gruesome dark comedy of "Waving at Mirrors" ("It was all a terrible mess / Which came from nothing less / Than a moment carelessly spent applying make up instead of driving") Aching and wry at once, Ray is a mesmerizing presence, mixing brainy cool and genuine passion with precise skill. For added hipster cred, note cameos by Howe Gelb (Giant Sand) and Alan Vega (Suicide), who references his own classic "Dream Baby Dream" on the spooky "Out in the Rain."

5 Dazzling Female Singers on the Rise

| Mon Sep. 1, 2014 6:00 AM EDT
Frazey Ford, Diana Gameros, FKA Twigs, Sevyn Streeter, and Irene Diaz

Summer's pulling to a close, but perk up. Here are videos of five refreshing female vocalists whose smart and uncompromising performances have dazzled me recently:

1. Frazey Ford

Fans of the quirky alt-folk band the Be Good Tanyas—of which Frazey Ford is a founding member—won't be disappointed with this sneak-peek single off Ford's upcoming solo album, Indian Ocean, out in mid-October. With subtle vibrato and pulsing emotion, Ford's velvety vocals take center stage in "September Fields." While Ford's a country-folk singer at heart, the electric organ in the track transforms her normally aching lullaby into something funkier and full of sunshine. As I listened, I kept picturing late summer drives through peaceful farm towns, passing barns with their paint peeling, peach stands framed by dry corn stalks, little girls in their Sunday best giggling on the steps of a small church. "Are you holding, holding on so tight?" Ford croons. Yes—to the edge of my seat in anticipation for her album to land.

2. Diana Gameros

One evening in July, Mexican singer Diana Gameros boarded the historic Balclutha, a tall ship parked in the San Francisco Bay. Under violet lights in the main cabin, alongside a handful of other masterful Latin American musicians, she delivered "Canciones Del Mar (Songs of the Sea)." The group performed ocean homages plucked from all over the continent, from fishing ditties to a silly tune about an octopus to a tribute to the Argentine poet Alfonsina Storni, who is said to have ended her own life by wading into the sea.

Gameros also performed her original, "Soy Tu Mar," and released this humble video a month later. The waves washing through the ballad offer the singer an ethereal alternative rhythm, and pair well with her bright nylon-stringed Takamine guitar with a sound reminiscent of a mariachi. Gameros grew up bouncing between her hometown of Ciudad Juárez, Mexico, and Holland, Michigan, where she learned English and studied music. She now resides in the Bay Area and plays regularly at a tamale parlor in San Francisco's Mission District. Her delicate first album, Eterno Retorno, showcases Gameros' bilingual songwriting and jazzy voice. Like "Soy Tu Mar," it's at once full of yearning and serenity. Don't miss the improvised bonus song in the tunnel at the end of the video.

3. Sevyn Streeter

Ignore the nails and revel in this diva's silky and powerful voice. It baffles me that the guys lifting weights in the righthand corner of this scren were able to hold it together while Streeter just kills it.

With roots in church gospel music, Streeter started winning talent competitions at a young age, but her cousin had to convince her to upload her music to MySpace. It soon caught the eye of Beyoncé and Jennifer Lopez's producer Rich Harrison, who asked Streeter to join RichGirl, a new pop group he was forming. The band never really took off, but Streeter continued to write songs, and six of the tracks she helped pen made it onto Chris Brown's Grammy-winning album F.A.M.E.

Now, with an EP to her name, Streeter is working on a debut album. The singles out so far are gussied up with plenty of electronic beats and echo-y harmonies. But after seeing this video, I hope she releases more stripped-down acoustic tracks that allow her pure voice full reign.

4. FKA Twigs

Move over Gaga: FKA Twigs has arrived. This satisfyingly weird artist struts her sultry vocals and mesmerizing poise in the video version of "Two Weeks." This year saw the London-based Twigs, a former backup dancer, move into the spotlight with her album LP1. Hipster music blog Pitchfork raves about its "eerie, post-humanist, Uncanny Valley-girl aesthetic." Indeed, Twigs plays a doll in many of the surreal videos off this album—in "Water Me," her head bobs from side to side and her eyes are unnaturally large.

In the video above, she's an unapproachable empress. But amid all this cold posturing, her voice is piercingly intimate. And her command of her space and skilled restraint suggest that this 26-year-old half-Jamaican artist is only getting started.

5. Irene Diaz

Okay, this video's not brand new. But Irene Diaz is probably new to most of you. I just stumbled on her recently (h/t NPR's Tiny Desk Concerts), and I'm hooked on this playful song with its driving piano and flirtatious glances.

Based in Los Angeles, the soulful Diaz is just breaking into the national scene, playing at 2014's SXSW and opening for Lila Downs' on her current tour. Diaz seems like she'd be a ton of fun live—but here's hoping she pauses from touring long enough to complete her first full-length album soon. As one blogger pointed out, Diaz sounds a bit like Fiona Apple, but her songs aren't quite so morose. They're muscular and catchy, with a hint of vintage spunk.

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Russia Is Going After McDonald’s. (Can We Give Them Jack in the Box?)

| Fri Aug. 29, 2014 4:28 PM EDT
A McDonalds in St. Petersburg, Russia

Russia's health inspection agency is scrutinizing more than 100 McDonald's locations and has forced the company to temporarily close multiple others in the country. The agency says McDonalds outlets are getting inspected because some have violated sanitary regulations— but others see retaliation for US sanctions on Russia.

"This is a prominent symbol of the U.S. It has a lot of restaurants and therefore is a meaningful target," Yulia Bushueva, managing director for Arbat Capital, an investment advisory company, told Bloomberg. "I don't recall McDonald's having consumer-safety problems of such a scale in over more than two decades of presence in Russia."

McDonald's was the first fast food chain to enter Russia, and it holds some symbolic importance in the country. The first location opened in Pushkin Square in Moscow in January 1990 to one utterly massive line (see video below). This was shortly after the fall of the Berlin Wall but nearly two years before the dissolution of the Soviet Union when Western brands of any stripe were a rare sight in Russia. At the time, the site of the Golden Arches in the center of Moscow signaled the arrival of a new era of prosperity and integration with the world economy.

Today, there are more than 400 McDonald's outlets in the country. Many are owned locally. The company employs more than 37,000 people in Russia and sources 85 percent of its products from Russian suppliers, according to its website.

But as Russia and the West began facing off over Ukraine this spring, McDonald's has fallen victim to their power struggle. In April, McDonald's announced it would close it's three company-owned locations in Crimea "due to operational reasons beyond our control," according to their statement to Reuters.

That decision was praised by Vladimir Zhirinovsky, a prominent legislator and Putin supporter, who suggested the chain should leave Russia as well. "It would be good if they closed here too, if they disappeared for good," he said in Russian media. "Pepsi-Cola would be next." Zhirinovsky also proposed instructing members of his Liberal Democratic party to picket outside McDonald's until they closed.

Since August 20, McDonald's has temporarily closed 12 locations throughout Russia, including four in Krasnodar, near the black sea, and the iconic first-ever location in Moscow. Burger King, Subway, and KFC— which have all seen big expansions in Russia in recent years— have remained unscathed.

Friday Cat Blogging - 29 August 2014

| Fri Aug. 29, 2014 2:51 PM EDT

It's the return of quilt blogging! Sort of. In any case, there's a quilt in the background because that happens to be where Domino was posing this week. I think she's auditioning to be the model for a new pair of sculptures outside the New York Public Library.

Chart of the Day: When Women Fail, They Pay a Bigger Price Than Men

| Fri Aug. 29, 2014 2:19 PM EDT

The chart below is not part of a study that examines a statistically random set of data. It's quite informal, and probably suffers from some inherent sampling biases. Nonetheless, it's pretty astonishing:

Here's the background: Kieran Snyder asked men and women working in the tech industry to share their performance reviews with her. Virtually all of them were high performers who got generally strong reviews. But it wasn't all positive:

In the 177 reviews where people receive critical feedback, men and women receive different kinds. The critical feedback men receive is heavily geared towards suggestions for additional skills to develop....The women’s reviews include another, sharper element that is absent from the men’s:

“You can come across as abrasive sometimes. I know you don’t mean to, but you need to pay attention to your tone.”

[Etc.]

This kind of negative personality criticism—watch your tone! step back! stop being so judgmental!—shows up twice in the 83 critical reviews received by men. It shows up in 71 of the 94 critical reviews received by women.

This comes via Shane Ferro, who concludes that there's probably good reason for women to be more cautious than men in their professional lives. It's easy to tell women they shouldn't be afraid to fail. "But we as a society (men and women), need to stop judging women so harshly for their flaws. For them to be equally good, it has to be okay that they are equally bad sometimes."

Has Vladimir Putin Painted Himself Into a Corner?

| Fri Aug. 29, 2014 1:14 PM EDT

Max Fisher writes today that Vladimir Putin probably never wanted to invade Ukraine. So why did he? It all started when he was elected to a third term as president amid continuing economic stagnation:

Putin expected another boisterously positive reception, but that's not what he happened. Instead, he got protests in major cities, opposition candidates, and, even according to the highly suspicious official tally, only 63 percent of the vote.

Putin panicked. He saw his legitimacy slipping and feared a popular revolt. So he changed strategies. Rather than basing his political legitimacy on economic growth, he would base it on reviving Russian nationalism: imperial nostalgia, anti-Western paranoia, and conservative Orthodox Christianity.

....Then the Ukraine crisis began....In March 2014, Putin indulged his own rhetoric about saving Ukraine's ethnic Russians — and seized an opportunity to reclaim a former Soviet strategic port — when he launched a stealth invasion of Crimea....This is when the crisis began to slip beyond Putin's control....The nationalistic rhetoric inside Russia was cranked up to a fever pitch. Putin's propaganda had built a parallel universe for Russians, in which the stakes in eastern Ukraine were dire not just for Russia but for the world....But the violence in eastern Ukraine was spinning out of control, with Ukrainian military forces looking like they were on the verge of overrunning the rebels.

In a rational world, Putin would have cut his losses and withdrawn support for the rebels. But, thanks to months of propagandistic state media, Russians do not live in a rational world. They live in a world where surrendering in eastern Ukraine would mean surrendering to American-backed Ukrainian Nazis, and they believe everything that Putin has told them about being the only person capable of defeating these forces of darkness. To withdraw would be to admit that it was all a lie and to sacrifice the nationalism that is now his only source of real legitimacy. So Putin did the only thing he could to do to keep up the fiction upon which his political survival hinges: he invaded Ukraine outright.

Is this basically correct? It's more or less the way I view events in Russia, so it appeals to me. But I don't know enough about Russia to have a lot of confidence that this is really the best explanation for Putin's actions.

It's also not clear—to me, anyway—that Putin is truly stuck in a situation he never wanted. I agree that this interpretation makes sense. Eastern Ukraine just flatly doesn't seem worth the price he would have to pay for it. But that's easy to say from seven thousand miles away. I wonder if this is really the way Putin sees things?