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Climate Change and how to move forward
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Cathy Orlando what is the biggest issue for you?14 minutes ago ·
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Ross Hunter beyond all other considerations, climate change for sure. But I’m persuaded (by Paul Hawken’s concepts) that social justice and indigenous rights form a crucial component of same. And there are some nuances from seeing how we’ve drifted past tipping points unable to pull back – this shows our society’s architecture is at least corrupt and perhaps even wrong in its original design. So I’m greatly interested in sustainable economics and accountable politics as the necessary tools both to “recover” and to “rebuild” with whatever survives the crisis.
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Archive for the ‘Economics’ Category
Economics 07/05/2011
Posted by rosshunter on July 4, 2011
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Economics 05/24/2011
Posted by rosshunter on May 23, 2011
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The People vs. Goldman Sachs | Rolling Stone Politics
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Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn’t leave much doubt: Goldman Sachs should stand trial.
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Economics 04/10/2011
Posted by rosshunter on April 9, 2011
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Wall St. Stands at the Pinnacle of 5,000 Years of Human Exploitation | | AlterNet
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The species is completely out of balance by denying one half of it’s intelligence, the half that would never have split the atom nor built nuclear power plants; the half which would have warned of the dangers of cutting down the sacred groves, giving us our oxygen. The half which invented civilization in the first place.
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Would add what others have, and push it farther: We have a SOCIOPATHOGENIC SOCIETY, meaning that our social systems DEVELOP sociopathy, and they do so for the simple reason that they are not based on Empathy. A sociopath (psychological cousin to a psychopath) is defined as someone who is INCAPABLE of empathy. If a society’s systems are not set up to reward empathic action — which is the American case — then empathy is not developed and withers; but — worse, and also the American case — if exploitation of others IS rewarded, and empathic action an (economic) liability, then you have a sociopathogenic society, one whose systems are designed to encourage and develop non-empathic behavior.
Creating the new systems, especially economic and political, that foster and most of all REWARD us for empathic action — making Empathy the key to economic success (whatever that might look like), to create the Empathic Global Society (or, as Jeremy Rifkin calls it, the Empathic Civilization), is the great work of our time.
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Would add what others have, and push it farther: We have a SOCIOPATHOGENIC SOCIETY, meaning that our social systems DEVELOP sociopathy, and they do so for the simple reason that they are not based on Empathy. A sociopath (psychological cousin to a psychopath) is defined as someone who is INCAPABLE of empathy. If a society’s systems are not set up to reward empathic action — which is the American case — then empathy is not developed and withers; but — worse, and also the American case — if exploitation of others IS rewarded, and empathic action an (economic) liability, then you have a sociopathogenic society, one whose systems are designed to encourage and develop non-empathic behavior.
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The species is completely out of balance by denying one half of it’s intelligence, the half that would never have split the atom nor built nuclear power plants; the half which would have warned of the dangers of cutting down the sacred groves, giving us our oxygen. The half which invented civilization in the first place.
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But the boot heel of the androcentric culture came down swiftly.
I could almost believe that the rise of the Christain fundamentalist movement and the subsequent empowering of the ultra misogynist “right” was a direct response to the threat of the women’s equality surge. -
I could almost believe that the rise of the Christain fundamentalist movement and the subsequent empowering of the ultra misogynist “right” was a direct response to the threat of the women’s equality surge.
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Oh, where have we seen that before?
“But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”
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David Korten’s conclusion -that the working class establish its own economy and abandon the corporatist one- isn’t new. but it is very radical. It got Martin Luther King assassinated for daring to propose to the black community that they had the economic power of small nations, and that they should use that power for the good of their own community, for to continue to support the racist economy any longer was not going to help them gain freedom and respect. It’s all in his Mountaintop speech, given the night before he was shot. It’s just as valid today, and for a much wider and more varied audience, than it was in 1968. We should heed King’s warnings and advice while we still have the means to do so.
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I would like to encourage women to become involved in food production and distribution. In fact i would like women to dominate agriculture world wide. I think they would be better at it than men.
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Economics 03/02/2011
Posted by rosshunter on March 1, 2011
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The root is that economic reason won’t work because the system is corrupt. Ergo, it’s a political problem because free market forces can’t work.
What’s referred to in the post is a metaphorical approach – saying that since we can’t recoup the true cost of carbon in taxes because the system is corrupt, we the people must work to make carbon costly in every way we can.
We the people are paying the true cost of carbon with damaged public health and environmental conditions, among other things. The true cost of carbon, if exacted, would pay for that, and what better way to pay for the commons, the public good, than through taxes. But government no longer works for us, it works for the owners. So we have to go deal with the owners, directly. Our representatives are slaves, and not worthy of our sovereign time. So we’ll have to take down the slave owners instead.
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Economics 02/25/2011
Posted by rosshunter on February 24, 2011
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the Koch brothers you have to understand that they’re not libertarians – they’re vampires drinking deeply at every exposed vein. And investors know this, even though the Tea Party hasn’t wised up yet. Read this story and understand – it’s nuanced, and our job is to make it simple and pass it on.
Freemarket Failures: Investors Prefer Doing Business With Hugo Chavez Over Billionaire Koch Brothers
blogs.alternet.org
You didn’t hear this on Fox News or the Drudge Report, but on October 10 Venezuela seized and nationalized a massive fertilizer plant part-owned by Koch Industries. The media silence is a bit puzzling. You’d think that the seizure of property belonging to America’s second-largest private company, ow
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Economics 02/19/2011
Posted by rosshunter on February 18, 2011
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there’s plenty of money. The people earn it, and pay taxes, and they once had a contract with government to regulate the playing field so that industry wouldn’t steal all the money. But business paid government more than the voters did, so government continues to break down the regulation, privatizing at pennies on the dollar the commons that the people actually built with their own capital. If there’s no money left, you have to follow the trail and see where it went. It wasn’t to the unions
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Economics 02/04/2011
Posted by rosshunter on February 3, 2011
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Ted Keki Ross
My power is finally back on after 13 hours. Traffic lights in my neighborhood working again too. Half of me is deeply grateful, with the other half divided between more gratitude and concern that perhaps Texas really is a third-world country after all.
19 minutes ago · Like ·Ross Hunter Well, we have some banana republic-ans in power for sure, but I think we’re still mostly part of first world. But 2 things:
1. as Tom Friedman put it, Americans get out of the country so rarely they don’t grasp how far behind they’re slipping.
2. The rest of the world (Australia, Russia, etc) is in bad shape from weather already, and it’s starting here with this massive storm. Better get used to outages of everything as fuel prices skyrocket and infrastructure simply fails.
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Economics 01/15/2011
Posted by rosshunter on January 14, 2011
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Taking distributed energy seriously | Grist
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cost comparisons between central-plant power and distributed power are woefully inadequate, typically focusing in on price-per-kWh. Of course rooftop solar fails by that comparison. But what happens when you factor in the saved cost of transmission lines that don’t have to be built? What happens when you factor in the efficiency gains made possible by smart appliances, smart vehicles, and smart grids? What happens when you factor in the fact that money spent on these systems will circulate almost entirely within a community rather than leaving it? What happens when you factor in energy independence, resilience, innovation, jobs?
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Economics 01/09/2011
Posted by rosshunter on January 8, 2011
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Robert Greenwald: New York’s Spending on the Afghanistan War Is Larger Than Its Budget Hole
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- . An October 2007 study by the Political Economy Research Institute (PERI) found that per $1 billion invested in the following fields, you create wildly different numbers of jobs:
- Defense: 8,555 jobs
- Construction for home weatherization/infrastructure: 12,804 jobs
- Health care: 12,883 jobs
- Education: 17,687 jobs
- Mass transit: 19,795 jobs
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Attacking Public Employees: Will New York Lead?
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If taxes on corporations and businesses were raised by 50% over what they yielded in 2000 — equaling what happened to New York’s personal income taxes — New York State’s budget would get much healthier. Such a business tax would generate more new revenue for New York than would be saved by the new governor’s proposed wage freezes and other public employee cutbacks.
Sales and excise taxes are the most regressive kinds of taxes. They do not tax persons according to ability to pay (as do both New York’s and the federal income tax systems). A Rockefeller and you pay the same 4% state sales tax when purchasing a taxable good or service. There is little justice in having regressive taxes, but there is absolutely none in raising them more over the last 10 years than taxes on businesses.
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The Texas Omen – Krugman NYTimes.com
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Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.
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Will Our Economy Ever Recover From the “Greatest Recovery”?
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For the past two years, American workers submitted to the president’s appeal – taking steep paycuts despite hectic productivity growth. By contrast, corporate executives have extracted record profits by sabotaging the recovery on every front – eliminating employees, repressing wages, withholding investment and shirking federal taxes.
The global recession increased unemployment in every country, but the American experience is unparalleled. According to a July Organization for Economic Cooperation and Development (OECD) report, the US accounted for half of all job losses among the 31 richest countries from 2007 to mid-2010.[2] The rise of US unemployment greatly exceeded the fall in economic output. Aside from Canada, US Gross Domestic Product (GDP) actually declined less than any other rich country from mid-2008 to mid-2010.[3]
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The corporate cash glut has become a point of recurrent contention between the Obama administration and corporate executives. In mid-December, a group of 20 corporate executives met with the Obama administration and pleaded for a tax holiday on the $1 trillion stashed overseas, claiming the money will spur jobs and investment. In 2004, corporate executives convinced President Bush and Congress to include a similar amnesty provision in the American Jobs Creation Act; 842 companies participated in the program, repatriating $312 billion back to the US at 5.25 percent rather than at 35 percent.[19] In 2009, the Congressional Research Service concluded that most of the money went to stock buybacks and dividends – in direct violation of the Act.[20]
The Obama administration and corporate executives saved American capitalism. The US economy may never recover.
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Economics 01/08/2011
Posted by rosshunter on January 7, 2011
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This is important and worth repeating: Koch Industries’ involvement in the fertilizer plant was actually a drag on the operation and investor confidence. Getting rid of the Koch’s stake in Fertinitro had the effect of boosting the value of the company, which is funny considering the fact that Koch Industries was the only major private investor in the fertilizer plant.
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Here’s what happened: When Chavez’s nationalization of the plant took Koch Industries out of the picture, bond investors responded by driving up the value of the company’s bond debt by a whopping 33 percent. That means they had a lot more confidence that the debts would be paid back AFTER the free-market Kochs were out of the picture. As every business school flunky knows, price fluctuations of bonds are very much like those of stocks: the more they cost, the higher the confidence in a given company. And that means investors had less faith in the ability of the Kochs to run a tight business operation than they did in a bunch of Venezuelan socialist bureaucrats.
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This is important and worth repeating: Koch Industries’ involvement in the fertilizer plant was actually a drag on the operation and investor confidence. Getting rid of the Koch’s stake in Fertinitro had the effect of boosting the value of the company, which is funny considering the fact that Koch Industries was the only major private investor in the fertilizer plant.
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Economics 01/05/2011
Posted by rosshunter on January 4, 2011
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An Answer to 2011′s Austerity Arguments: ‘We Won’t Pay For Their Crisis’
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The cost figure just for the Iraq imbroglio is now far in excess of $3 trillion, according to The Washington Post.
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According to data obtained by U.S. Senator Bernie Sanders, I-Vermont, the 21,000 transactions from December 2007 through July 2010 that totaled more than $3 trillion.
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Republicans in Congress and even some Democrats were all saying that the country was broke and that it was going to be necessary to put Social Security, Medicare, Medicaid and other social programs at risk to balance the books.
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Now, Washington is abuzz with speculation about the prospect that the next Obama-GOP project will be a formal assault on Social Security. Medicare and Medicaid-with an announcement coming in the State of the Union address.
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Economics 01/04/2011
Posted by rosshunter on January 3, 2011
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If you want to understand why Gasoline costs the USA $10/ per gallon than consider the following hidden costs.
Health care impacts of breathing smog from vehicles
_cancer
_copd
-asthma
-heart disease
-brain damageLife quality impacts of smog
_nasty smell
-nasty taste
-discolors sky
-discolors fabrics, paints
-makes outdoor activities less enjoyable
-makes indoor air quality worse
-loss of fresh air
-stress from traffic
-traffic congestion
-noise pollutionInfrastructure costs
-federal road subsidies
-federal oil exploration/refining subsidies
-state subsidies for road maintenance
-DOT construction and personnel costs
-emissions control systems/ monitoring and testing
-transition from railways to road commercial transportEnvironmental Fallout
-climate change
-tire and break dust run off
-particulate precipitation
-lake, stream wet land pollution
-water reservoir contamination
-noise pollution
-land fragmentation
-oil spiils
-oil refinery flaring
-oil drilling/ fracking fallout
-land fragmentation
-urban sprawlHuman Costs
-human death in oil operations
-human injuries in oil operations
-accidents where fuel fires cause burns and deathNational Security / Economic Damage
-loss of capital
-trade imbalance
-importation dependency
-funding to terrorists
-funding to nations that violate human rights
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Economics 01/03/2011
Posted by rosshunter on January 2, 2011
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In Europe they think of us as losers.
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Ross Hunter via RePeace
I hate to be thought of that way, but I can’t argue back.
America has long been a country of limitless possibility. But the dream has now become a nightmare for many. The US is now realizing just how fragile its success has become — and how bitter its reality. Should the superpower not find a way out of crisis, it could spell trouble ahead for the global
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Economics 12/28/2010
Posted by rosshunter on December 27, 2010
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Beyond WikiLeaks: The Privatization of War
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A short look at the careers of the current managers of BAE Systems, as well as at their address books, confirms that we are no longer dealing with a normal corporation, but with a cartel that unites high-tech weaponry (BAE Systems, United Defense Industries, Lockheed Martin), speculative financiers (Lazard Freres, Goldman Sachs, Deutsche Bank) and raw material cartels (British Petroleum, Shell Oil) with on-the-ground, private military and security companies.
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Economics 05/15/2010
Posted by rosshunter on May 14, 2010
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y’know, ALL the economists have embraced the notion of limits to growth at the limits of natural resources.
I think that the only future left to us – if any future is left to us – is steady-state economics: sustainable enterprises working in stable cycles unto the nth generation without impacting the planet other than by growing its natural resources.
5 minutes ago ·
Ross HunterSo I’m opting for a green party. Any political platform that fails to include sustainability at its bedrock, and as the dynamic engine of its planks, is failing the needs of this time, in my opinion.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 04/28/2010
Posted by rosshunter on April 27, 2010
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Bill Black: economic meltdown caused by fraud
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Bill Moyers with Bill Black, bank investigator during the Savings & Loan mop-up of the eighties, and national expert on financial crime. Black says every bank we’ve investigated involved in the meltdown has revealed deliberate fraud, and we’ve only investigated six! No one’s pushing forward calling out the fraud, and there are no indictments.
Black explains exactly how the current economic and political system has created sociopaths who must steal more money. Yes, steal. Our global recession is the result not of incompetence but crime, in Congress and Wall Street. And it’s still going on.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 04/27/2010
Posted by rosshunter on April 26, 2010
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I think the undoing of Goldman will be that its execs, just like those at Morgan Stanley, or GE, or GM, have failed to understand that their own personal wealth can only last as long as the “lower classes” have at least a decent life. A chance to feed their kids and send them to a proper school, to get proper medical treatment for their families if and when required, and, when they age, to draw sufficient retirement funds not to suffer from hunger and cold
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Posted from Diigo. The rest of my favorite links are here.
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Economics 04/12/2010
Posted by rosshunter on April 11, 2010
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Worse still, I think Krugman misses the opportunity to advance another important argument, which is that we’re almost certainly going to be better off in a world where we act boldly on climate, not just compared to the hell we’ll live in if we don’t act, but compared to the world we live in now.
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A bright green economy is not analogous to a dirty economy, just with the energy sources swapped: it can work differently, and, on balance, better: it can produce new innovations, better designs, more intelligently planned cities, stronger communities, healthier kids, long-lifespans, higher qualities of life. A bright green world isn’t just less bad environmentally; it’s better in nearly every way.
Perhaps, as I’ve been told, economists would have to break long-established traditions and count more externalities in order for their models to reflect that reality. Maybe it’s time they got started.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 04/10/2010
Posted by rosshunter on April 9, 2010
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Climate Change – Building a Green Economy – NYTimes.com
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In particular, there is no reason to assume that free markets will deliver an outcome that we consider fair or just. So the case for market efficiency says nothing about whether we should have, say, some form of guaranteed health insurance, aid to the poor and so forth. But the logic of basic economics says that we should try to achieve social goals through “aftermarket” interventions. That is, we should let markets do their job, making efficient use of the nation’s resources, then utilize taxes and transfers to help those whom the market passes by.
But what if a deal between consenting adults imposes costs on people who are not part of the exchange? What if you manufacture a widget and I buy it, to our mutual benefit, but the process of producing that widget involves dumping toxic sludge into other people’s drinking water? When there are “negative externalities” — costs that economic actors impose on others without paying a price for their actions — any presumption that the market economy, left to its own devices, will do the right thing goes out the window. So what should we do? Environmental economics is all about answering that question.
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Now, efficiency isn’t everything. In particular, there is no reason to assume that free markets will deliver an outcome that we consider fair or just. So the case for market efficiency says nothing about whether we should have, say, some form of guaranteed health insurance, aid to the poor and so forth. But the logic of basic economics says that we should try to achieve social goals through “aftermarket” interventions. That is, we should let markets do their job, making efficient use of the nation’s resources, then utilize taxes and transfers to help those whom the market passes by.
But what if a deal between consenting adults imposes costs on people who are not part of the exchange? What if you manufacture a widget and I buy it, to our mutual benefit, but the process of producing that widget involves dumping toxic sludge into other people’s drinking water? When there are “negative externalities” — costs that economic actors impose on others without paying a price for t
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Posted from Diigo. The rest of my favorite links are here.
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Economics 03/18/2010
Posted by rosshunter on March 17, 2010
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Macro management indeed. It was at the macro level that the system collapsed.
I don’t think we need to worry too much about people buying homes within their means, for example – it was the credit industry itself that deliberately enlarged those means. This proceeded from a systemic culture of arbitrage that could tolerate no slowdowns or limits to growth, by hook or by crook.
That culture is still reflected today in the $60 trillion of derivatives at large in the global economy, a sum roughly equal to the productive global economy itself.
The world of course can’t call in this kind of gambling marker, not when the world itself is the stake. All we can do is plug the little holes that appear (using real wealth) as various players have fainting spells. Occasionally a lone player is carried to the bench.
What we need – exactly as one could infer from your scepticism – is hard-coded laws that mandate the macro percentages of risk and collateral and segregate the instruments and the industries beyond discretionary choice.
Then we could use something like the FBI to handle the regulation.
So the problem to be addressed lives at the macro political end of things, and this requires a large swell of public awareness coupled with some legislators who haven’t been too badly bought. I have great faith in the first, but the second? There’s that rub again.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 03/12/2010
Posted by rosshunter on March 11, 2010
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The Speech For Which We Have Been Waiting « The Baseline Scenario
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The problem with fixing the economy is a lot like the problem with fixing global warming. Things have reached the point of no return. It’s too late to turn the Titanic around, the iceberg is in our path and we are about to go down, regardless. “Free market” capitalism has reached the point where it is not only too big to fail, but too big to control, and certainly too big to regulate. At the first sign that someone with real power is about to do something meaningful to forestall a future collapse, the entire edifice will instantly crumble before our eyes, that very day. And the politicians know that, either consciously or unconsciously. Which is the deep reason why we aren’t seeing meaningful reform, and are not likely to see it, ever.
The good news is that there is really nothing wrong with our economy, when evaluated in terms of resources, both natural and human. What has failed is our financial system, not our economy. If we would be willing to let go of the financial system, i.e., to toss overboard all the ballast produced by all the billionaires and millionaires and their huge stores of paper wealth, the ship of state would be that much lighter and more maneuverable and we might be able to turn things around after all. Wittgenstein tells the story of a monkey who put his hand into a jar to get a nut and finds he can’t pull it out again without loosening his grip on that nut. Unless we are willing to loosen our grip on our “free market” fantasy, we will never be free.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 03/10/2010
Posted by rosshunter on March 9, 2010
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Way Too Big To Save « The Baseline Scenario
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The biggest banks in some European countries today are already too big to save. Unless we take immediate and real action to reduce the power – and size – of our largest banks, we are heading in exactly the same direction.
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The great failure of the Obama Administration has been to accept point #2 as well – to accept a false choice between Depression 2.0 and Bailout Nation. Its failure has been the refusal to offer an alternate path that prevents Depression 2.0 without instigating a stream of unending Bailouts.
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They Saved the Big Banks But Kind Of Lost The Economy Doing It « The Baseline Scenario
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The Baseline Scenario
What happened to the global economy and what we can do about it
They Saved the Big Banks But Kind Of Lost The Economy Doing It
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They Saved the Big Banks But Kind Of Lost The Economy Doing It
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It would be easy to take relatively cheap shots at the portrayal of Tim Geithner — “we saved the economy but kind of lost the public doing it” — in the New Yorker, out today.
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What exactly was the “Geithner stabilization plan” that frames the article – and is the basis for Secretary Geithner claiming to have saved anything? We are not really talking about the much vaunted but little used toxic asset/loan purchase program (the “PPIP”). “The plan” here means essentially the stress tests designed by Treasury and run by the Fed – which brought some transparency to banks’ balance sheets, but which also used a relatively benign “stress scenario” (watch commercial real estate, residential mortgages, and credit card losses now unfold).
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In truth, “too big to fail” is not the worst thing we should fear – our financial institutions are now on their way to becoming “too big to save”.
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If we continue to allow banks to grow, as they have over the last 30 years – and did again through the latest boom-bailout-rescue cycle – we head towards a day when Mr. Geithner or his successor will try to save the financial system and will fail.
You might think that is a good thing and for sure it will bring on a big change in creditor attitudes and presumably much stronger regulation. But, just as in the 1930s, first we will have to dig out from under a lot of economic rubble – and we’ll lose a lot more than 8 million jobs.
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As a result of the recession that started in December 2007, actual GDP is much lower than potential GDP, so we can say that there is significant “slack” in the economy. More precisely, economic output is far below what it would be under full resource utilization, meaning there is considerable unemployment of labor and underutilization of plant and equipment capacity. To put the current gap between actual and potential output into perspective, it helps to compare (both are shown in Chart 1) the current recession with the previous one in 2001, when there was essentially no negative gap until after the recession had ended.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 02/25/2010
Posted by rosshunter on February 24, 2010
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Banking Industry: Sicker, More Concentrated « The Baseline Scenario
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Get rid of the Fed.
Open 50 State Banks.
North Dakota, the only state with a state bank (opened in 1919) does not have a failed bank on the FDIC list that started in Oct. 2000. It also has a budget surplus of around $1 billion.
ND also has the lowest unemployment in the country, no housing problem & no large bank exposure or branches. Just local banks & the state bank.
This compares with our central bank’s (Fed) balance sheet which is over $2 trillion of which over $1.5 trillion is loans of which over $500 billion is national debt. Another $367 billion is MBS. This is our money they’re lending to the big insolvent banks & Freddie & Fannie to buy up their bad loans. And congress.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 02/23/2010
Posted by rosshunter on February 22, 2010
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Op-Ed Columnist – The Bankruptcy Boys – NYTimes.com
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In fact, conservatives have backed away from spending cuts they themselves proposed in the past. In the 1990s, for example, Republicans in Congress tried to force through sharp cuts in Medicare. But now they have made opposition to any effort to spend Medicare funds more wisely the core of their campaign against health care reform (death panels!). And presidential hopefuls say things like this, from Gov. Tim Pawlenty of Minnesota: “I don’t think anybody’s gonna go back now and say, Let’s abolish, or reduce, Medicare and Medicaid.”
What about Social Security? Five years ago the Bush administration proposed limiting future payments to upper- and middle-income workers, in effect means-testing retirement benefits. But in December, The Wall Street Journal’s editorial page denounced any such means-testing, because “middle- and upper-middle-class (i.e., G.O.P.) voters would get less than they were promised in return for a lifetime of payroll taxes.” (Hmm. Since when do conservatives openly admit that the G.O.P. is the party of the affluent?)
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But there is a kind of logic to the current Republican position: in effect, the party is doubling down on starve-the-beast. Depriving the government of revenue, it turns out, wasn’t enough to push politicians into dismantling the welfare state. So now the de facto strategy is to oppose any responsible action until we are in the midst of a fiscal catastrophe. You read it here first.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 02/20/2010
Posted by rosshunter on February 19, 2010
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Economist’s View: Tax Cuts and Government Investment
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Invisible Hand, first note that Adam Smith, despite the myth, even in 1776 understood that the invisible hand did not work well in many cases without a government role. As Cornell economist Robert H. Frank notes in his New York Times Economic Scene article of May 25, 2008:
ADAM SMITH’S modern disciples are far more enthusiastic about his celebrated invisible-hand idea than he ever was. In their account, Smith’s assertion was that purely selfish individuals are led by an invisible hand to produce the greatest good for all. Yet Smith himself was under no such illusion.
On the contrary, the relevant quotation from his “Wealth of Nations,” which describes a profit-seeking business owner, is far more circumspect. It says that this owner “is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” It continues: “Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”
In short, Smith understood that the invisible hand is often benign, but not always.
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The case for infrastructure spending and against tax credits
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Moody’s economy.com indicated that for every dollar spent on infrastructure grew the economy by $1.59 during that year.
Compare that with these figures. For every dollar cut in corporate income taxes, the economy grew by 30 cents. For every dollar cut in dividend and capital gains taxes, the economy grew by 38 cents.
If you want to create jobs and/or stimulate the economy in the short run, infrastructure spending beats business tax cuts every time.
View the PDF below and scroll to the chart on page 9 to get an idea of what works and what doesn’t for stimulating the economy.
http://www.economy.com/mark-zandi/documents/Economic_Stimulus_House_Plan_012109.pdf
Posted by: cjo30080 | February 18, 2010 11:54 AM
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I’m all for instead of tax cuts a great increase in high social return government investments of the kind the pure free market will grossly underprovide due to long established in economics pure free market problems like externalities, inability to patent, etc., etc.
I had a post on this that Mark Thoma devoted a post to. I really think it’s good and valuable. The Thoma post on it is at:
http://economistsview.typepad.com/economistsview/2008/08/tax-cuts-and-go.html
Posted by: RichardHSerlin | February 18, 2010 3:56 PM
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Posted from Diigo. The rest of my favorite links are here.
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Economics 02/10/2010
Posted by rosshunter on February 9, 2010
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Elizabeth Warren Calls Out Wall Street « The Baseline Scenario
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But last month, Republican political consultant Frank Luntz wrote a memo laying out how Republicans could kill financial regulatory reform. “Ordinarily, calling for a new government program ‘to protect consumers’ would be extraordinary popular,” he wrote. “But these are not ordinary times. The American people are not just saying ‘no.’
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We like to make fun of government in this country, but really, what are you and a few of your buddies going to do to fight JPMorgan Chase on your own? For all of our beloved rugged individualism (and our individual right to handguns), it doesn’t do much good when you’re up against your credit card issuer. There is no Chicago-school free market solution to an oligopoly that, on top of all its other advantages, has an implicit government guarantee that gives it a major funding cost advantage over its competitors. One of the purposes of government is to protect ordinary people from forces (hurricanes, terrorists, monopolies) against which free market forces do not provide adequate protection. This is why we need a Consumer Financial Protection Agency. And this is what Frank Luntz wants to trick people into forgetting.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 01/25/2010
Posted by rosshunter on January 24, 2010
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Paul Krugman For The Fed « The Baseline Scenario
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big global american corporations now run congress,the fed,and the presidency….they are all pushing jobs,money
business out of this country because asia is the future for them….there is no one in this country to fight for the middle class…this country is slowly dying and no one realizes this…we all standby
and watch the destruction of our economy and our democracy while big business is quickly leaving the country…whithin 5 years there will be anarchy here…because the people are complacent and we will pay for it -
Well, you do realize that the financial markets have NO effect on our GDP, our employment or our market demand, right? You do know that, right?
The stock market only reflects the preferences of those who OWN companies (stockholders). Our financial well-being is not determined by that measure. It is determined by how much stuff people want to buy — you know — the middle-class, buying groceries and clothes?
A Fed Chairman needs to understand that. Greenspan, Summers, Geitner and Bernanke thought that somehow the stockmarket would produce jobs if they pushed enough graft and corruption into it — notice how well that worked out?
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Posted from Diigo. The rest of my favorite links are here.
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Economics 01/13/2010
Posted by rosshunter on January 12, 2010
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Op-Ed Columnist – Learning From Europe – NYTimes.com
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The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 01/12/2010
Posted by rosshunter on January 11, 2010
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You can never go home again (nor should you)
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the default of the finance industry has diluted the sense of morality attached in many people’s minds to paying back loans, as well as having shown us all the fabricated nature of most of the “money” involved in most of our loans received.
The article suggests explicitly that actually it’s only people’s residual sense of morality that’s prevented many of them from walking away from upside-down arrangements.
My guess is that this moral tie will continue to weaken to whatever extent that events show continued disregard for the working stiff.
In short, we’re witnessing a massive destruction of cultural morality caused by a massive display of immorality in our nation’s institutions.
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Ezra Klein – Marco Rubio is an attractive Senate candidate
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well if it’s a Monday morning discussion of free markets, and the talking heads who love them, allow me to point out that we’ve lately witnessed the captains of finance recoiling in horror away from free markets.
Without governance, it seems, every free market will work to produce top dogs, who will then work to shutter the markets from any further competition.
A commenter made the lovely remark over at Simon Johnson’s blog one day, that the free market had in fact tried to operate, in the meltdown, to weed out the insolvent banks, but of course that was the last thing anyone wanted.
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Posted from Diigo. The rest of my favorite links are here.
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Economics 01/08/2010
Posted by rosshunter on January 7, 2010
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Now if the aerospace lobby had told us after the 1986 Challenger disaster that the key to better performance was to turbocharge the engines and quit performing preflight inspections, everyone would have agreed that they were crazy. Yet that’s essentially what the finance lobby has done over the past decade, and in some weird way we were too mesmerized to recognize it. Within months of a near catastrophe caused by one of the industry’s brightest stars, the lobbyists were busily making certain that it would happen again—and that when it did happen, it would be bigger and more disastrous than ever.
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Posted from Diigo. The rest of my favorite links are here.
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