"Today, the Chinese working class is fighting. More than thirty years into the Communist Party’s project of market reform, China is undeniably the epicenter of global labor unrest." — Eli Friedman from Jacobin
"Some date the crisis to August 9 2007, the day it became clear that Europe’s banks were up to their necks in US housing debt. The ECB flooded markets with €95bn of liquidity. It seemed a lot of money then. The term “trillion” was still banned by the Telegraph style book in those innocent days. We have since learned to swing with the modern dance music from central banks." [Five years on, the Great Recession is turning into a life sentence]
The comparative experience thus suggests that for inequality reduction, it is the quantity of taxes rather than the progressivity of the tax system that matters most. Affluent countries that achieve substantial inequality reduction do so with tax systems that are large but no more progressive than ours [America's]. [more inside]
Paul Ryan. Seven-term congressman for Wisconsin's 1st District. Chairman of the powerful House Budget Committee. Architect of the controversial Ryan Budget -- a "Path to Prosperity" [PDF - video - CBO] that would slash trillions from the federal budget, sharply curtail taxes on the wealthy, and transform Medicare into a private voucher system. Proponent (vid) -- and renouncer -- of Ayn Rand 's Objectivism. Social Security beneficiary. Hunter. Weinermobile driver. And as of this morning, the 2012 Republican candidate for Vice President of the United States of America. [more inside]
Financial Markets, Politics and the New Reality: "Louis M. Bacon is the head of Moore Capital Management, one of the largest and most influential hedge funds in the world. Last week, he announced that he was returning one quarter of his largest fund, about $2 billion, to his investors, [saying] it is impossible to make money when there is heavy political involvement, because political involvement introduces unpredictability in the market… Adam Smith and David Ricardo, who modern investors so admire, [never] used the term "economics" by itself, but only in conjunction with politics; they called it political economy… The investors' problem is that they mistake the period between 1991 and 2008 as the norm and keep waiting for it to return."
The current system of corporate governance is bunk. Capitalist corporations are on the way to certain extinction. Replete with hierarchies that are exceedingly wasteful of human talent and energies, intertwined with toxic finance, co-dependent with political structures that are losing democratic legitimacy fast, a form of post-capitalist, decentralised corporation will, sooner or later, emerge.An analysis of the management and organizational style of Valve Software.
Robert and Edward Skidelsky talk about their book "How much is enough." Mixing economics and philosophy will obviously cause a lot of debate, but they do raise some valid points.
Mitt Romney's cousin explains the history of the GOP and Mormonism through twitter (and other interesting things)
Miles Kimball tells the history behind the Mormon church's close ties to the GOP through his twitter account. [more inside]
...But most of all, I am emerging from this drama with a renewed appreciation for the value of my taxpayer-supported public services. The Berkeley Fire Department did right by me — not only by saving most of my house from burning to the ground, but also by demonstrating real human kindness and connection in the middle of fire and chaos. In the rubble, I found magic. And in a strange way, I feel like I deserved it. In Berkeley, we are addicted to high taxes — in the 25 years I’ve lived here, I can’t even count how many times I and my fellow citizens have said a resounding yes to yet another tax hike or bond measure. Two weeks ago, I got my money’s worth. [more inside]
Yesterday Australia joined many developed nations in putting a price on carbon pollution (fixed at $23/tonne CO2e for three years) (prev). Despite extensive compensation, this moderate economic reform has proved enormously unpopular ("based on a lie") and is expected to be repealed if/when the Federal Opposition are returned to government.
What's also obvious is that this phase of Occupy, with talk of credit unions and occupying the SEC, while eminently worthy, is also kind of boring, especially when compared to the thrill of Occupy's park phase. Some, though, are ready to move on. "It's easy to go back to the park occupation and fetishize it, in a way," says Occupy Chicago's Brian Bean. "I prefer not to run a mini-society – I want to run society." - The Battle For The Soul Of Occupy Wall Street - Rolling Stone - Mark Binelli.
Jon Ronson (whose book The Psychopath Test was the basis of a This American Life episode ) interviews folks living in America at several varied levels of income in: GQ - Amber Waves of Green.
In less than an hour, the Supreme Court will hand down its final judgment in what has become one of the most crucial legal battles of our time: the constitutionality of President Obama's landmark health care reform law. The product of a strict party line vote following a
year century of debate, disinformation, and tense legislative wrangling, the Affordable Care Act would (among other popular reforms) require all Americans to buy insurance coverage by 2014, broadening the risk pool for the benefit of those with pre-existing conditions.
The fate of this "individual mandate," bitterly opposed by Republicans despite its similarity to past plans touted by conservatives (including presidential contender Mitt Romney) is the central question facing the justices today. If the conservative majority takes the dramatic step of striking down the mandate, the law will be toothless, and in danger of wholesale reversal, rendering millions uninsured, dealing a crippling blow to the president's re-election hopes, and possibly endangering the federal regulatory state.
But despite the pessimism of bettors, some believe the Court will demur, wary of damaging its already-fragile reputation with another partisan 5-4 decision. But those who know don't talk, and those who talk don't know. Watch the SCOTUSblog liveblog for updates, Q&A, and analysis as the truth finally comes out shortly after 10 a.m. EST.
GDP since Jesus. That headline is a big promise. But here it is: The economic history of the world going back to Year 1 showing the major powers' share of world GDP, from a research letter written by Michael Cembalest, chairman of market and investment strategy at JP Morgan. everything to the left of 1800 is an approximation of population distribution around the world and everything to the right of 1800 is a demonstration of productivity divergences around the world. [more inside]
In Praise of Leisure - "Imagine a world in which most people worked only 15 hours a week. They would be paid as much as, or even more than, they now are, because the fruits of their labor would be distributed more evenly across society. Leisure would occupy far more of their waking hours than work. It was exactly this prospect that John Maynard Keynes conjured up in a little essay published in 1930 called 'Economic Possibilities for Our Grandchildren.' Its thesis was simple. As technological progress made possible an increase in the output of goods per hour worked, people would have to work less and less to satisfy their needs, until in the end they would have to work hardly at all... He thought this condition might be reached in about 100 years — that is, by 2030." (via) [more inside]
Happyism: The Creepy New Economics of Pleasure. Economist Dierdre McCloskey, in the New Republic, digs into the mathematical underpinnings of the scientific study of happiness. Executive summary: she doesn't like what she finds.
The Mommy-Fight Site. What does it mean to raise a child in "America’s highest-income, best-educated Census area? D.C. Urban Moms and Dads might be as close as it gets to a field guide to parentis Washingtonianis" [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]
"Can doctors and investment advisers be trusted? And do we live more for experiences or memories? In a SPIEGEL interview, Nobel Prize-winning psychologist Daniel Kahneman discusses the innate weakness of human thought, deceptive memories and the misleading power of intuition."
The Global Middle Class Is Bigger Than We Thought A new way of measuring prosperity has enormous implications for geopolitics and economics.[...] the number of passenger cars in circulation serves as the most reliable gauge we have about the size of a country's middle class.
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.”
Take a holiday in Somaliland: journey to the state that isn’t. "Positioned on the upper haunch of the Somali dog-leg the Republic of Somaliland looks initially unpromising. It is mainly dry and rocky, there are few paved roads, and the population is small and generally dispersed. ... Whilst the economy may be on the up, Somaliland still feels extremely isolated. An employee of a big international NGO who I met in the lobby of my hotel, The Mansoor, looked at me with astonishment when I said I’d come to Hargeisa for fun. 'The biggest danger here,' he said 'is dying of boredom.'"
"Are Democratic politicians, like Andrew Cuomo, using social issues to distract from the economic status quo?" Article by David Sirota in Salon.
The Costs of Capitalism's Crisis: Who Will Pay? Economics professor Richard Wolff gives some context to the latest economic crisis and suggests a solution to prevent this from happening again.
"I can say with confidence that rich people don't create jobs, nor do businesses, large or small," said über-rich venture capitalist Nick Hanauer in a March 1st TEDx talk, which TED is refusing to put on its website. [more inside]
The Invisible Hand is Invisible Because It Isn't There. Nobel laureate Joseph Stiglitz gives the keynote address at the launch of The Roosevelt Institute's new initiative: Rediscovering Government. Via the Next New Deal.
"Sixteen years ago, Patricia (P.J.) Johnston of Des Moines made the front page of this paper for collecting her diploma from Drake University at just 19. “I think I’m probably meant to be an academic,” Johnston was quoted as saying. And she has been, getting a master’s in one institution, going to seminary at another, doing field research in India in her area of interest — Indian Catholicism — and currently working toward a Ph.D in religious studies at the University of Iowa....As it is, she sleeps on her office floor on the days she has to be in Iowa City, riding the Greyhound bus in from Des Moines."[more inside]
How a fire in a small German town threatens to cause a worldwide car shortage. "When a fire in the small town of Marl in the west of Germany closed down an obscure chemical plant on 31 March, it barely made headlines." Now according to a recent IHS Automotive report, "shortages of the obscure component are 'likely to be serious.'"
"I call it the destruction of shared prosperity hypothesis. ... [A]round 1980 the U.S. adopted a fundamentally flawed economic paradigm ... that abandoned full employment and severed the link between wages and productivity growth. ... Financial deregulation, regulatory forbearance, financial innovation, financial mania, and plain vanilla financial fraud kept the economy going by making ever more credit available, However, as the economy cannibalized itself by undercutting income distribution and accumulating debt, it needed ever larger speculative bubbles to grow. The house price bubble was simply the last and biggest bubble and was effectively the only way around the stagnation that would otherwise have developed in 2001." - an interview with Thomas Palley on the origins and prognosis for the crisis
"We do not share the view of many of our economics colleagues that growth will solve the economic problem, that narrow self-interest is the only dependable human motive, that technology will always find a substitute for any depleted resource, that the market can efficiently allocate all types of goods, that free markets always lead to an equilibrium balancing supply and demand, or that the laws of thermodynamics are irrelevant to economics."
Crooked Timber's online seminar on David Graeber's Debt: The First 5000 Years (previously, previously, previously and previously). [more inside]
"Trade, not aid:" the interesting story of Good African Coffee. [slnyt]
Mark Sweep describes an interesting game from his childhood which helps explain why companies move and keep their manufacturing in China.
Where are you on the global pay scale? A nice calculator that shows how your monthly salary compares to the average for your country and for the world. But before drawing too many sweeping conclusions, check out the notes that explain how the numbers are calculated, and the difficulties with trying to calculate any such thing. [more inside]
The Incentive Bubble (ungated pdf) - "The fraying of the compact of American capitalism by rising income inequality and repeated governance crises is disturbing. But misallocations of financial, real, and human capital arising from the financial-incentive bubble are much more worrisome to those concerned with the competitiveness of the American economy." [more inside]
One of the more conservative of the Fed's regional banks, the Dallas Federal Reserve, says "too-big-to-fail" banks must be broken up. Now. An interesting and important essay(pdf) from a most unlikely source.(via)
Elizabeth Kolbert explores the case against kids. Drawing from the work of philosophy professors David Benatar, Christine Overall and economist Bryan Caplan, Kolbert examines the justifications for reproducing.
The New Priesthood - "The hapless economist uses the same tools as acclaimed physicists and astronomers. She has trained for years to speak precisely the same language as them, to understand the same advanced mathematics, to deploy most complex statistical methods which are an essential part of the scientific toolbox. It is, understandably, incredibly difficult to accept that her work is a form of higher order superstition; a religion couched in the language of mathematics and statistics. Tragically, this is precisely what it is." [more inside]
“Kipper und Wipper”: Rogue Traders, Rogue Princes, Rogue Bishops and the German Financial Meltdown of 1621-23
Following an amendment in the recent Conservative Party budget, VAT on 'Baked Goods' will be re-instated. In response, the question of whether or not David Cameron once ate a Greggs pasty infects the British press. The Telegraph have a live blog covering what has been termed by some Pasty Gate
This morning marked day two of marathon proceedings in what's likely the most momentous and politically-charged Supreme Court case since Bush v. Gore: the effort to strike down President Obama's landmark health care reform law. While yesterday was a sleepy affair of obscure technical debate, today's hearings targeted the heart of the law -- the individual mandate that requires most Americans to purchase insurance by 2014. With lower courts delivering a split decision before today, administration lawyers held some hope that at least one conservative justice could be persuaded to uphold the provision, which amortizes the risk that makes universal coverage possible. But after a day of deeply skeptical questioning by swing justice Anthony Kennedy and his fellow conservatives [transcript - audio], the mandate looks to be in grave trouble, with CNN legal analyst Jeffrey Toobin going as far as calling the day "a train wreck" for the administration. But it's far from a done deal, with a third day of hearings tomorrow and a final decision not expected until June.
Why Nations Fail - In a nutshell: "Proximately, prosperity is generated by investment and innovation, but these are acts of faith: investors and innovators must have credible reasons to think that, if successful, they will not be plundered by the powerful. For the polity to provide such reassurance, two conditions have to hold: power has to be centralised and the institutions of power have to be inclusive." [more inside]
A new working paper by economists Charles Courtemanche (University of Louisville) and Daniela Zapata (UNC-Greensboro) shows that Massachusetts 2006 uniform healthcare coverage caused improvements for numerous health outcomes. To the degree that the Massachusetts experiment is a guide for the federal Affordable Care Act, this study provides some guidance for guessing which individuals and approximately how much the benefits of the program will be. [more inside]