Explaining Southern California's economy

Three reasons why it makes sense for Van Halen to reunite

Van Halen Press Conference To Announce Their New Tour

Michael Buckner/Getty Images

LOS ANGELES, CA - AUGUST 13: David Lee Roth (L) recieves a kiss from guitar player Eddie Van Halen at the Van Halen Press Conference announcing their new tour at the Four Season Hotel on August 13, 2007 in Los Angeles, California. (Photo by Michael Buckner/Getty Images)

What could be better than a Van Halen reunion that features not just David Lee Roth, Eddie and Alex Van Halen, but David Lee Roth, Eddie and Alex Van Halen — and Alex's son Wolfgang on bass? That would be Van Halen reuniting at the Grammy Nomination Show on November 30. Maybe they will. Maybe they won't. But the rumor is creating the requisite buzz. This is from Rolling Stone:

Recently the Grammy Foundation tweeted, "Who do u predict the reuniting band will be @ #GRAMMYnoms? Does this hint make u wanna 'Jump' & 'Dance the Night Away'?" – a not-so-subtle hint about a Van Halen reunion at the Grammy nominations concert. But Hagar said any reunion wouldn't include him. "If Van Halen play, it will be Dave [David Lee Roth], Eddie [Van Halen], Alex [Van Halen], and Wolfie [Wolfgang Van Halen], his kid – it wouldn't be Mike [Anthony] and I. First of all, we wouldn't be invited and second of all, if we were invited, we probably wouldn't do it. If Eddie is in the same condition he was the last time I saw him, I don't want to step onstage with him."

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Could France be the next victim of the eurozone crisis?

 

Just to stay current, a little Storify action on the continuing eurozone crisis. Suddenly former Italian Prime Minister Silvio Berlusconi threw in the towel over the weekend. But without decisive German action, will the single currency be saved? Or is France the next domino to fall?

Follow Matthew DeBord and the DeBord Report on Twitter.

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Vivkek Ranadive says replace the Federal Reseve with a computer

Forget PhD economists with beards who make oracular pronouncements about the economy. How about a computer program that can adjust interest rates in real time, rather than humans who are basing their judgments on outdated information?

As you'll see from the video, this is the modest proposal of Vivek Ranadive, a software entrepreneur. I first heard this idea a week or so back, when I saw Ranadive speak at a Drucker Business Forum/KPCC event where I also interviewed Mike Rossi, whom California Gov. Jerry Brown has asked to provide advice on the state's unemployment crisis.

It's a radical notion. But not that radical. A modern economy could benefit from interest rate changes that aren't kept too high, or too low, for too long. Ranadive agues that the Fed has consistenly failed to deliver a "soft landing" with its interest rate policies: cooling down the economy by rasing rates so that inflation is kept under control, yet a recession is avoided.

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How about higher taxes for everybody?

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Tim Boyle/Getty Images

The top of a form 1040 individual income tax return.

I'm generally a fan of NPR's Planet Money, but I'm a little perplexed by what one of its founders, Adam Davidson, has been writing since he took up residence at the New York Times Magazine.

This weekend, for example, he argued that the middle class needs to get over the idea that rich people and corporations should pay higher taxes. And while he runs the numbers quite well, the conclusion are, to say the least, troubling:

It serves the interest of both parties to argue about taxes on corporations and the wealthy because neither wants to discuss the alternative, which is where things get touchy. To solve our debt problems, we have to go to where the money is — the middle class. People who earn between $30,000 and $200,000 a year make a total of around $5 trillion and pay less than 10 percent of that in taxes (owing mostly to tax incentives and the fact that most families make less than $68,000, where larger tax rates begin). Increasing the middle-class tax burden an additional 8 percent, however, would actually have a bigger impact than taxing millionaires at 100 percent.

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It's a tough but manageable financial math problem. And America's middle class is actually a lot luckier than its counterparts in Greece, Spain or Ireland, who will be paying higher taxes while their countries' economies shrink, or stagnate. Even the Fed's dark forecasts anticipate that the U.S. economy will return to healthy growth (about 3 percent annually) within a couple of years. Unless we hold on to the fantasy that the solutions to our problems lie in the bank accounts of rich people and corporations.

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The crisis in liberal arts college education

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Mark Wilson/Getty Images

College may not be worth it for some students

Kenneth Anderson has a long-ish post about the declining return on a liberal arts — versus a "science, technology, engineering, mathematics" (STEM) — education. The gist of it is that liberal arts isn't necessarily a bad investment, but that the market for lib arts has been weakened by changes in the economy — and by higher ed's inability to educate graduates for what the market actually needs. That is, verbal analysis and basic quantitative skills.

As Anderson puts it: "The traditional promise of the quality humanities or liberal arts major — not a technical skill set, but generalist analytic skills in reading, writing, basic maths, and strong communications skills — has somehow eroded and colleges fail to convey those skills."

There's another problem, which is that if you invest in this unmarketable education, you wind up spending more than you can realistically expect to earn back, because the value of liberal arts skills has been so relentlessly degraded. And guess what? The entire economy is now stuck with a low-growth future. This is fueling the notion — one I find fairly repellent — that too many people are going to college and that we should reshape the university system along more overtly elitist lines.

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