Why We’re in a New Gilded Age Paul Krugman reviews Capital in the Twenty-First Century by Thomas Piketty, and discusses the renewal of the importance of capital in preserving inequality across generations.
The return of "patrimonial capitalism": review of Thomas Piketty's Capital in the 21st century (pdf) - "Thomas Piketty's 'Capital in the 21st century' may be one of the most important recent economics books. It jointly treats theory of growth, functional distribution of income, and interpersonal income inequality. It envisages a future of relatively slow growth with the rising share of capital incomes, and widening income inequality. This tendency could be checked only by worldwide taxation of capital." [more inside]
NYTimes: At $142.4 Million, Triptych Is the Most Expensive Artwork Ever Sold at an Auction
It took seven superrich bidders to propel a 1969 Francis Bacon triptych to $142.4 million at Christie’s on Tuesday night, making it the most expensive work of art ever sold at auction. William Acquavella, the New York dealer, is thought to have bought the painting on behalf of an unidentified client, from one of Christie’s skyboxes overlooking the auction.[more inside]
A Generation of Intellectuals Shaped by 2008 Crash Rescues Marx From History’s Dustbin [more inside]
A survey by a high-end estate agent has revealed that there are more domestic servants in the exclusive London district of Mayfair now than 200 years ago, and indeed, in the élite London neighbourhoods which have been bought up by absentee oligarchs, often only the lights in the servants' quarters are on at night. For those who fancy a life of serving the super-rich, there are courses to prepare them for catering to their masters' exacting whims. But it's not all rosy at the top; the prices of luxury goods (including foie gras, Patek Philippe watches, paintings by artists such as Cézanne and Rothko) in the basket used to calculate the Affluent Luxury Living Index have been rising at a rate exceeding inflation.
While we are still recovering from the trauma that finance capital has inflicted on our public world, a late-capitalist fairy tale manages the pain in the more private and intimate reaches of the sexual daydream. In one version of the story, a wide-eyed mermaid cleverly disguises her essential self in order to win the heart of a prince (The Little Mermaid). In another, a hooker with a heart of gold navigates her way to a happy ending by offering some happy endings of her own (Pretty Woman). Or there’s the sassy secretary who shakes her moneymaker all the way to the corner office (Working Girl). Fifty Shades of Grey follows this long history of class ascendancy via feminine wiles, but does so cleverly disguised as an edgy modern bodice-ripper. [NSFW image]
Before Greed: Americans Didn't Aways Yearn For Riches. A response: An Embarassement Of Riches: Literature And The Ethics Of Wealth In The Gilded Age. Both from Boston Review. [more inside]
The latest foreclosure horror: the zombie title
The Kellers are caught up in a little-known horror of the U.S. housing bust: the zombie title. Six years in, thousands of homeowners are finding themselves legally liable for houses they didn't know they still owned after banks decided it wasn't worth their while to complete foreclosures on them. With impunity, banks have been walking away from foreclosures much the way some homeowners walked away from their mortgages when the housing market first crashed.[more inside]
Gold, Golden, Gilded, Glittering - The Unexpected Double History Of Banking And The Art World
In fact, we have long entrusted the task of representing our ideas of value to members of two professions that might seem to have little in common: banking and art. And, in the last seven hundred years or so, it has happened more than once that visual and financial inventors have come up with strikingly similar representations. There is more than a shadow of resemblance between the purchase of the Hirst skull in 2007 and the mortgage-backed-securities debacle that made of Lehman Brothers in the following year one of the great public pictures of vanitas we’ve had. And, when you look further into these intersections, you often find that what is really at stake is a change in the way we feel and understand time.[more inside]
First the Bubble. Then the Short. Now the Long.
Some neighborhoods in Oakland are as devastated as any of the worst hit regions across America — Atlanta, Las Vegas, Phoenix. Now the morphing of the housing bust and foreclosure epidemic into a lucrative multi-billion dollar opportunity for major investors is also uncannily centered upon Oakland and the greater Bay Area, where companies flush with hedge fund cash are buying up homes by the thousands. The entire sweep of the US housing bubble, financial crisis, and foreclosure wave can therefore be told by looking at persons and companies with intimate links to Oakland and the Bay Area. What follows is one account.
There's been a lot of talk in the US media about the "Fiscal Cliff" and the "Grand Bargain" What are they?
The "fiscal cliff" is a confluence of three legal changes taking effect Jan. 1: the expiration of a payroll-tax cut, the expiration of the Bush-era tax cuts, and the advent of mandatory spending cuts known as "sequestration."Fiscal Cliff 101: 5 Basic Questions Answered. What's Happening: Fiscal Cliff Explained [more inside]
In 2003, only two colleges charged more than $40,000 a year for tuition, fees, room, and board. Six years later more than two hundred colleges charged that amount. What happened between 2003 and 2009 was the start of the recession. By driving down endowments and giving tax-starved states a reason to cut back their support for higher education, the recession put new pressure on colleges and universities to raise their price. When our current period of slow economic growth will end is anybody’s guess, but even when it does end, colleges and universities will certainly not be rolling back their prices. These days, it is not just the economic climate in which our colleges and universities find themselves that determines what they charge and how they operate; it is their increasing corporatization. If corporatization meant only that colleges and universities were finding ways to be less wasteful, it would be a welcome turn of events. But an altogether different process is going on[more inside]
"The company at this point isn’t just a key purveyor of lower labor standards and a globalized and concentrated supply chain, it is a key tell for policymakers."
Over the last few months, a few cities around the United States have experienced their own, unique, fiscal crisis: bankruptcy. [more inside]
"Several executives involved in the transaction have either abruptly decided to retire or been sacked."
Last month, JP Morgan Chase announced it had lost $2 billion dollars in a 'hedging' maneuver. Today, Jamie Dimon, Morgan's chairman and CEO, testified before the Senate banking committee. [more inside]