Joe Stiglitz on Inequality, Wealth, and Growth: Why Capitalism is Failing (video; if you don't have 30m, skip to 20m for discussion of political inequality, wealth, credit and monetary policy) - "If the very rich can use their position to get higher returns, more investment information, more extraction of rents, and if the very rich have equal or higher savings rates, then wealth will become more concentrated... economic inequality inevitably gets translated into political inequality, and political inequality gets translated into more economic inequality. The basic and really important idea here is that markets don't exist in a vacuum, that market economies operate according to certain rules, certain regulations that specify how they work. And those effect the efficiency of those markets, but they also effect how the fruits of the benefits of those markets are distributed and the result of that is there are large numbers of aspects of our basic economic framework that in recent years have worked to increase the inequality of wealth and income in our society... leading to a society which can be better described, increasingly, as an inherited plutocracy." [more inside]
China rates its own citizens - including online behaviour: "The Chinese government is currently implementing a nationwide electronic system, called the Social Credit System, attributing to each of its 1,3 billion citizens a score for his or her behavior. The system will be based on various criteria, ranging from financial credibility and criminal record to social media behavior. From 2020 onwards each adult citizen should, besides his identity card, have such a credit code." [more inside]
When President Obama appointed Tom Wheeler (a former top telecom lobbyist) as chairman of the FCC, he got a lot of grief for selling out his '07 pledge to protect Net Neutrality -- the founding principle long prized by open web activists that ISPs cannot privilege certain data over others, without which dire visions of a tiered and pay-for-play internet loomed. Earlier, weaker attempts at net neutrality had failed in court, and the new chairman looked set to fold. But after an unprecedented outcry following last year's trial balloon for ISP "fast lanes" -- including a viral appeal by John Oliver, a public urging by the president, and perhaps Wheeler's own history with the pre-web NABU Network -- the FCC yesterday voted along party lines to enact the toughest net neutrality rules in history, classifying ISPs as common carriers and clearing the way for municipal broadband. ISPs reacted with (Morse) venom, while congressional Republicans are divided over what they called "Obamacare for the internet."
BIG and BOT Policy Proposals (transcript) - "Many of our current economic policies originated during times of scarcity. But now, says investor Albert Wenger, we live in an era of 'digital abundance', when creating new products costs virtually nothing. To adapt to the resulting economic upheavals, we won't need just more tech, says Wenger, but some strong policies. Here he explores two: basic income guarantee and the right to be represented by a bot." [more inside]
The End of Banking: Money, Credit, and the Digital Revolution - "Unregulated banking with access to government guarantees is an enticing business model. It offers the profits of excessive risk-taking in good times, and allows passing on the inevitable losses to taxpayers in bad times." [more inside]
The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare. "Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking." [more inside]
"The researchers found that conservatives tend to react more strongly to disgusting images having increased activity in regions of their brain that are involved in processing disgust and regulating emotion. The liberals, on the other hand, had increased activity in different brain regions." Study
Meet the Beer Bottle Dictator: For years, one man has approved virtually every beer label design in the United States. Among brewers, he’s a tyrant. A legend. A pedantic pain in the ass. Brewers and legal experts speak of him in hushed tones, with equal parts irritation and reverence. "He’s the king of beer. His will is law," said one lawyer who works with him regularly. The lawyer asked to remain anonymous, for fear of crossing the beer specialist. "There’s one dude in the government who gets to control a multibillion-dollar industry with almost no supervision." And he goes by the name "Battle."
Hell on Wheels: Are bad trucking laws partially to blame for Tracy Morgan's accident?
Two days before Kevin Roper crashed his Walmart big rig into Tracy Morgan’s limousine, critically injuring the comedian and killing his colleague James McNair, the Senate Appropriations Committee quietly loosened the laws governing truckers’ hours on the road. Senator Susan Collins slipped an amendment into an appropriations bill suspending for one year a rule limiting truckers to 70-hour work weeks, with a mandatory 34-hour “re-start” once they hit that threshold. Under the amendment, the law would revert to an 82-hour workweek. The Truck Safety Coalition denounced the measure: “What is being portrayed as a small change to the rest period actually has a large impact on crash risk and will set back safety for everyone sharing the roads with large 80,000-pound trucks.”
A couple of weeks ago, Uruguay unveiled marijuana regulation details... but it's easier written than done. The most famous cannabis activist in Latin America, Alicia Castilla, critizises the registries and points out several unknowns like supply. "I don't know how they'll come up with 22 tonnes of marijuana for November”.
This is not the typical lobbying we think about; it’s more like lobbying-through-threat: try to regulate us, and we’ll make life so miserable for innocent bystanders that you’ll drop the regulations. Here, the regulation in question simply makes banks responsible for noticing the fraud happening over the payment system they nominally control. They don’t want to do it, because they don’t want to lose lucrative business from predatory scam artists while they look the other way. -- When a division of JPMorgan Chase refused to process payments for a small business selling condoms, it was not out of prudishness, but part of an attempt to force the US government to drop their payday loan regulation by hurting small business owners through overly liberal interpretations of federal guidelines.
Free Money for Everyone - "A wacky-sounding idea with surprisingly conservative roots may be our best hope for escaping endless, grinding economic stagnation." (via) [more inside]
"One night in August 2004, I awoke to a man and a woman in my room whom I had never seen before telling me that they were "escorts" and we were going to a place called "wilderness."...There is a legal process where parents can sign over custody of kids who need residential care, which makes sense, because if a kid has to be housed in a mental health facility, the staff needs to be able to make all of the day-to-day decisions for her care. But that same process works for "unruly" teens like me, which meant the company that ran my camp had total legal control over where I went and what I did." --Cracked.com takes on the Tough Love for Troubled Teen camps that, mostly unregulated, are "treating" more and more children every year. [more inside]
Previously, covering Part One (out of Six) of the Chicago Tribune investigation Chemical flame retardants are everywhere. Our furniture. Our homes. Our bodies. Yet they don’t seem to stop fires. They do, however, seem to make us sick. TOXIC HOT SEAT is a documentary which takes an in-depth look at a nexus of money, politics and power – and a courageous group of firefighters, mothers, journalists, scientists, politicians and activists as they fight to expose what they assert is a shadowy campaign of deception that has left a toxic legacy in America’s homes and bodies for nearly 40 years. Set against the backdrop of the award-winning 2012 Chicago Tribune investigative series “Playing with Fire,” TOXIC HOT SEAT tells an intricate story, detailing how chemical companies that produce flame retardants spend millions of dollars on lobbyists, publicists and influencers, and how Big Tobacco had a hand in convincing fire-safety officials to back a standard that, in effect, requires all furniture to be filled with toxic flame retardants. [more inside]
Happy Political Clusterf*ck Day (U.S.)! In one corner: the first federal government shutdown since 1996, born of the House GOP/Tea Party faction's crusade to delay, defund, and destroy Obamacare (and the Democratic Senate and President's resolve to not do that). "Continuing resolutions" have ping-ponged between the two houses, fighting over language to cancel healthcare reform (plus a few other items, such as the implementation of Mitt Romney's entire economic agenda). National parks are closed, contractors are hamstrung, and 800,000 federal workers furloughed until Speaker Boehner drops the "Hastert Rule" and passes a bill the other branches can agree to. In the other corner, heedless of the chaos (though not without glitches of its own): the official rollout of the Affordable Care Act and its state insurance exchanges. The portal at Healthcare.gov is your one-stop shop for browsing, comparing, and purchasing standardized, regulated insurance coverage with premium rebates, guaranteed coverage, and expanded Medicaid for the poor (in some states). A crazy day, overall -- but peanuts compared to what might happen if the debt ceiling is breached in 16 days. [more inside]
How The Economic Machine Works by Ray Dalio actually makes a case against austerity and for redistribution, but also for money printing (and, arguably, for bailouts), while stressing the need to keep making productivity-improving public and private investments. However, it could be equally entitled: How The Industrial Age Political-Economy Doesn't Work Anymore, viz. Surviving Progress (2011)... [more inside]
The Council of the European Union recently released a proposal to amend the General Data Protection Regulation. Scaling back from becoming the most strict privacy regulation in the world, the amendment greatly favors corporate interests while reducing the rights of data subjects. [more inside]
As part of the Affordable Care Act, The Centers for Medicare and Medicaid Services has released data that show significant variation across the country and within communities in what hospitals charge for common inpatient services. (via) [more inside]
Did my wife's cosmetics give her breast cancer? During her first round of chemo in 2009, some volunteers at the hospital came calling with a little red bag [from the Look Good Feel Better program] that contained products from Clinique, Estée Lauder, and Del Laboratories. Upon reviewing the contents of her bag, she realized that several of the products contained parabens — chemicals that mimic estrogen and that according to the Campaign for Safe Cosmetics are linked to cancer. (previously, previouslier, previousliest in AskMe)
"Trusting your child with someone else is one of the hardest things that a parent has to do — and in the United States, it’s harder still, because American day care is a mess. About 8.2 million kids—about 40 percent of children under five — spend at least part of their week in the care of somebody other than a parent. Most of them are in centers, although a sizable minority attend home day cares.... In other countries, such services are subsidized and well-regulated. In the United States, despite the fact that work and family life has changed profoundly in recent decades, we lack anything resembling an actual child care system. Excellent day cares are available, of course, if you have the money to pay for them and the luck to secure a spot. But the overall quality is wildly uneven and barely monitored, and at the lower end, it’s Dickensian."
Boston taxi cab drivers, often cheated, work in a world where risk and reward are a mismatch. [more inside]
The comment period for the DRAFT Wireless code [PDF] to address some cellular provider abuses is expiring soon (February 15th). Comments can be made here. Highlights of the draft code include:
- A $50 (or less) monthly cap on incurred fees.
- A limitation of cancellation fees equal to the remaining amount of the prorated incentive amount
- Mandatory unlocking at no cost for non subsidy phones with no waiting period.
- Limits on deposits and non payment cancellations.
- No termination fee, 15 day cooling off period
- Mandatory listing of limits on "unlimited" plans.
Six and a half hours of surgery later, he and his colleagues had dug out small chunks of bone from the woman's eyelid and tissue surrounding her eye, which was scratched but largely intact. The clicks she heard were the bone fragments grinding against one another.
Popular “prediction market” Intrade is shutting its doors to US Customers, following a suit (filed post-election fortunately) by the Commodities Futures Trading Commission. Some see this as inevitable, given their history of dissembling to regulators. Other (predictably) see it as another restriction of internet freedom. [more inside]
England has a drinking problem. Since 1990, teenage alcohol consumption has doubled. Since World War II, alcohol intake for the population as a whole has doubled, with a third of that increase occurring since just 1995. [...] The United States, although no stranger to alcohol abuse problems, is in comparatively better shape. A third of the country does not drink, and teenage drinking is at a historic low.How a vertically integrated alcohol industry is to blame, and why the US could find itself in the same position soon.
Incandescent lightbulbs are now banned across the entire European Union as of September 1. "Concerns about poor performance of replacement bulbs have been proved wrong." It is predicted to save 39 terawatt-hours of electricity across the EU annually by 2020. "The phase-out has been very smooth." BanTheBulb said "..the vast majority of the public have adjusted to using the next generation of lighting technologies with the absolute minimum of fuss and drama." [more inside]
During his tenure as Mayor of New York City, "public health autocrat" Michael Bloomberg has attempted to regulate trans fats, smoking and sugar-filled sodas. Now, he has a fresh target: moms who don't breastfeed. Beginning September 3, NYC hospitals participating in a new, voluntary program: Latch-On NYC (press release / posters / FAQ -pdf-), will make formula less accessible, to encourage moms of newborns to breastfeed instead of using formula. [more inside]
JP Morgan's manipulation of California energy market is a massive, illegitimate tax on the entire state. 'The Federal Energy Regulatory Commission, the regulator of the ISO and its trading markets, has started a formal investigation into Morgan's allegedly manipulative energy deals in California and with the Midwest ISO, which covers 11 states from Michigan to Montana.' [more inside]
Tails of the Unexpected: "Normality has been an accepted wisdom in economics and finance for a century or more. Yet in real-world systems, nothing could be less normal than normality. Tails should not be unexpected, for they are the rule." An eminently human-readable explanation of why normal models fail to describe the uncertainties of our abnormal world. [more inside]
Louisiana monks go to court to sell their caskets. “The number one thing you should do as a public interest litigator is to get monks as your clients in every single case.”
Almost all the everyday complaints about cabs trace back to this regulatory cocktail. Drivers won’t take you to the outer reaches of your metropolitan area? The regulated fares won’t let them charge you more to recover the cost of dead-heading back without a return customer. Cabs are poorly maintained? Blame restricted competition, and the inability to charge for better quality. Cabbies drive like maniacs? With high fixed costs for cars and gas, and no way to increase their earnings except by finding another fare, is it any wonder that they try to get from place to place as fast as possible? Uber makes its money at least in part by alleviating these inefficiencies. In most places, “black car” or livery services are regulated differently, and more lightly, than taxis are. Though Uber has good reason not to say so, it’s basically turning livery services into cabs. The company is one step further removed from regulation, because it doesn’t run cars itself; it funnels passengers to existing services. “We’re sort of like an efficient lead-generation system for limo companies,” says Kalanick, “but with math involved.” - Megan McArdle analyses taxi regulation in the US and the taxi startup, Uber
The JOBS Act or "Jumpstart Our Business Startups Act" is not really about creating jobs but about loosening regulations on companies planning to IPO. SOX compliance and other financial regulations have made going public an expensive and time consuming process for young companies, and many are now staying private or getting acquired rather than going public. Fewer regulations encourages more IPOs, but what are the unintended consequences of "exempting [companies] from independent accounting requirements for up to five years after they first begin selling shares in the stock market"?
The Control Revolution And Its Discontents - "the long process of algorithmisation over the last 150 years has also, wherever possible, replaced implicit rules/contracts and principal-agent relationships with explicit processes and rules."
The Obama White House formally speaks out against SOPA, PIPA. The Obama White House has come out against the Stop Online Piracy Act. The move has -- unsurprisingly -- drawn responses from the MPAA, RIAA, and other interested parties.
This is why I don't give you a job. Hungarian blogger Jakab Andor breaks down the numbers and explains why taxes and regulations make it highly unappealing for him to start a small business employing people in Hungary. He also argues that these same factors make women and older people particularly unappealing prospects. His comments generated quite a bit of controversy (warning: most comments in Hungarian), to which he responded with an offer.
"Any industry would be proud of an average annual growth rate of 34% over ten years and of a global reach from Austria to Taiwan. But the headlong expansion of exchange-traded funds (ETFs), which by May this year controlled almost $1.5 trillion of assets (not far short of the $2 trillion in hedge funds), has become a matter for concern among financial regulators. Could ETFs be the next source of financial scandal, or even of systemic risk?" Characterizing the Financial sector "like a hyperactive child" that "can never leave a good thing be", The Economist appears to be wishing for the ETFs to be better regulated because "it would be a shame if reckless expansion spoiled a good innovation".
Let Children Be Children British government to recommend new measures aimed at preventing children from over-exposure to sexualised imagery in the media. [more inside]
The Destruction of Economic Facts - "Renowned Peruvian economist Hernando de Soto argues that the financial crisis wasn't just about finance—it was about a staggering lack of knowledge" (via) [more inside]
One percent of Americans now "earn" 25% of the income. Many of them have grown their wealth through criminal exploitation. Roger Ebert asks the burning question: why aren't more people outraged?
"I don't think the chief of police drinks water when he's having a meal." Members of the Compagnies Républicaines de Sécurité, the French riot police, are up in arms about a new regulation forbidding them to drink alcohol during the workday. The ban is said to be a reaction to widely publicized photos of riot police drinking beer while policing a high-school student demonstration in Perreux-sur-Marne.
100 years ago today, fire swept through the Triangle Shirtwaist Factory, killing 146 garment workers trapped inside. The tragedy spurred New York State to enact progressive labor reforms and was the motivation for the creation of the American Society of Safety Engineers. Although subsequent labor laws and regulations protect factory workers in the United States, the problem has moved overseas.
"We may argue again and again whether the Internet is changing our brains, elevating us, lowering us, making us smarter, or making us stupid. But at the end of the day, it seems the real argument is about control — who has it, who shares it, and who wants it." What people who worry about the internet are really worried about. Via naked capitalism.
Interview with Gary Gorton (pdf) - Fascinating look at private institutional bank money creation (really) and subsequent run on the shadow banking system that hearkens back to the late-19th century banking crises with securitization playing the role of checking before the advent of deposit insurance. "Gorton is a lucid narrator of a complex tale." (via via)
Localfilter: Today in Tokyo, legislation passed that will further restrict manga and animation "glorifying or exaggerating illegal sexual acts." Ten of the biggest comics companies are protesting the Tokyo International Anime Fair, sponsored by the city, responding that a focus on their mode of expression is unfair. Blogger Dan Kanemitsu reports.
With the climate bill dead and blame portioned, Ezra Klein asks what happens when congress fails? He concludes that "regulations to reduce carbon emissions are alive and well. The Environmental Protection Agency can attack carbon as a pollutant, and the Obama administration's announcement that efforts to hamstring the EPA will be vetoed suggests that they mean to do exactly that." [more inside]
The health care bill requires chains with 20 or more restaurants to post calorie counts on their menus, as is already the law in New York and Philadelphia. A study published last fall suggested that the labels didn't change the eating behavior of low-income New Yorkers. A recent study at Yale, conducted under laboratory conditions, found the opposite. Corby Kummer at the Atlantic says calorie labeling works -- once you understand the point is to change the behavior, not of the consumer, but of the vendor. Will calorie labels lead the way to a healthier America, or a part-skim socialist dystopia? Or is the call of the Thickburger just too strong for mere numbers to dispel?
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