For the past six years, Wall Street has enjoyed one of its longest bull markets (64 months at an increase of 191%). This is fourth on the list behind Dec 1987-March 2000 (150 months, 582%), June 1949-August 1956(87 months, 267%), and Oct 1974-Nov 1980 (75 months, 126%). While the top 7 percent of our country have seen a 28 percent increase in their net worth, the rest of us in the 93 percent have lost 4 percent of our net worth. The gap between the top one percent of earners and everyone else is the widest its been since 1928.
According to conservative ideology, all of this wealth at the top should pay off in our economy in the form of investments, right? We should be seeing massive job increases and a ton of economic growth. We are told, time and again, that wealth increase at the top means better days for everyone else.
Where are the better days?
Apparently, they only exist inside of the right wing bubble because the last six years should illustrate to everyone that this assertion is a complete fucking lie.
Showing posts with label US Economy. Show all posts
Showing posts with label US Economy. Show all posts
Monday, August 11, 2014
Saturday, July 05, 2014
Billionaire Once Again Warns The One Percent
Nick Hanauer has done it again. His recent open memo to his fellow zillionaires is exceptional. Here are a few great pulls...
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.
Of course, it's not just his fellow zillionaires that need to wake up. It's the 30 percent or so of voters who still buy into supply side economics. These are the people who believe that our nation is divided into two parts: the haves and the soon to haves. It's also no coincidence that these same people would like to see a return to the Antebellum South and its aristocratic framework. That's why the are fighting so hard to maintain the status quo. As Hanauer notes, however, it never works.
If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
When, indeed. I challenge anyone to find an historical example that refutes Hanauer.
The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.
This is where the whole issue of hubris comes into play. Conservatives just don't want to admit that liberal policies will make wealthy people wealthier. They ignore how a minimum wage hike will give people more money to spend in the economy which will, in turn, lead to more hiring and more wealthy for the wealthy. It's as if the word "demand" has been excised from their brain stems.
I wanted to try to change the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middle-out” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines—and has so screwed the American middle class and our economy generally.
Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another. Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.
Exactly right and props to him for coining middle out economics. It's exactly the kind of focus we need on demand.
So, Hanauer asserts that we need to dramatically raise the minimum wage.
The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?
Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.
Fucking. Brilliant.
Next, Hanauer turns to the size of government and, again, makes a brilliant point.
I’d ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways. But no way can you cut government substantially, not the way things are now. Ronald Reagan and George W. Bush each had eight years to do it, and they failed miserably.
Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don’t need food stamps. They don’t need rent assistance. They don’t need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won’t need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.
This may seem hard to grasp for those individuals who have a pathological hatred of the federal government but we can make laws that actually reduce the size and influence of our national governing body.
Hanauer closes with an argument I have made many times.
Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don’t. Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism. It’s an indispensable tool smart capitalists use to make capitalism stable and sustainable.
Amen. Let's get started!!
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.
Of course, it's not just his fellow zillionaires that need to wake up. It's the 30 percent or so of voters who still buy into supply side economics. These are the people who believe that our nation is divided into two parts: the haves and the soon to haves. It's also no coincidence that these same people would like to see a return to the Antebellum South and its aristocratic framework. That's why the are fighting so hard to maintain the status quo. As Hanauer notes, however, it never works.
If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
When, indeed. I challenge anyone to find an historical example that refutes Hanauer.
The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.
This is where the whole issue of hubris comes into play. Conservatives just don't want to admit that liberal policies will make wealthy people wealthier. They ignore how a minimum wage hike will give people more money to spend in the economy which will, in turn, lead to more hiring and more wealthy for the wealthy. It's as if the word "demand" has been excised from their brain stems.
I wanted to try to change the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middle-out” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines—and has so screwed the American middle class and our economy generally.
Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another. Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.
Exactly right and props to him for coining middle out economics. It's exactly the kind of focus we need on demand.
So, Hanauer asserts that we need to dramatically raise the minimum wage.
The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?
Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.
Fucking. Brilliant.
Next, Hanauer turns to the size of government and, again, makes a brilliant point.
I’d ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways. But no way can you cut government substantially, not the way things are now. Ronald Reagan and George W. Bush each had eight years to do it, and they failed miserably.
Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don’t need food stamps. They don’t need rent assistance. They don’t need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won’t need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.
This may seem hard to grasp for those individuals who have a pathological hatred of the federal government but we can make laws that actually reduce the size and influence of our national governing body.
Hanauer closes with an argument I have made many times.
Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don’t. Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism. It’s an indispensable tool smart capitalists use to make capitalism stable and sustainable.
Amen. Let's get started!!
Details of the Latest Jobs Report
An even brighter spot in June's jobs report is that fewer Americans are giving up on the job search because they are discouraged by their prospects. Adam Belz notes the fine print.
The fine print of Thursday’s cheery U.S. jobs report revealed that the number of people who are not looking for a job because they don’t think they can find one has fallen by 351,000 in the past 12 months.
Those who aren’t actively looking for a job don’t count as unemployed in government labor statistics. As the unemployment rate has fallen, a common concern has been that the number misrepresents the reality of the job market, because the ranks of discouraged workers rose as high as 1.3 million in 2010. That figure has fallen to 676,000.
Thursday’s numbers, which show the ranks of discouraged workers falling by 21,000 in June and declining steadily over the past year, indicate that retirement — not a weak job market — is increasingly the biggest reason people are leaving the workforce.
Very good news indeed!
The fine print of Thursday’s cheery U.S. jobs report revealed that the number of people who are not looking for a job because they don’t think they can find one has fallen by 351,000 in the past 12 months.
Those who aren’t actively looking for a job don’t count as unemployed in government labor statistics. As the unemployment rate has fallen, a common concern has been that the number misrepresents the reality of the job market, because the ranks of discouraged workers rose as high as 1.3 million in 2010. That figure has fallen to 676,000.
Thursday’s numbers, which show the ranks of discouraged workers falling by 21,000 in June and declining steadily over the past year, indicate that retirement — not a weak job market — is increasingly the biggest reason people are leaving the workforce.
Very good news indeed!
Thursday, July 03, 2014
Unemployment Rate Drops
U.S. employment growth jumped in June and the jobless rate closed in on a six-year low, decisive evidence the economy was moving forward at a brisk clip after a surprisingly big slump at the start of the year.
Nonfarm payrolls increased by 288,000 jobs last month and the unemployment rate fell to 6.1 percent, its lowest level since September 2008, the Labor Department said on Thursday. Data for April and May were revised to show a total of 29,000 more jobs created than previously reported.
This marks the 5th straight month of 200K+ job growth which is great news for the US Economy. Of course, this is not so great for the Republicans who have now officially lost the economy as a campaign issue in the fall. If the economy is the #1 issue in the fall election and it's going in the right direction, why would they want to vote an incumbent out of office?
This marks the 5th straight month of 200K+ job growth which is great news for the US Economy. Of course, this is not so great for the Republicans who have now officially lost the economy as a campaign issue in the fall. If the economy is the #1 issue in the fall election and it's going in the right direction, why would they want to vote an incumbent out of office?
Monday, June 09, 2014
Reduction Emissions Already Achieved
With bowels being blown and predictions of the US economy swirling down a boiling pit of sewage due to the president's new carbon emissions regulations, the right has completely failed to note the following: the 30 percent reduction the president is calling for has already been achieved in some parts of the country. And guess what?
No boiling pit of sewage.
Take a look at this recent piece from the New York Times and the Georgetown Climate Center.
At least 10 states cut their emissions by that amount or more between 2005 and 2012, and several other states were well on their way, almost two decades before Mr. Obama’s clock for the nation runs out.
That does not mean these states are off the hook under the Obama plan unveiled this week — they will probably be expected to cut more to help achieve the overall national goal — but their strides so far have not brought economic ruin. In New England, a region that has made some of the biggest cuts in emissions, residential electricity bills fell 7 percent from 2005 to 2012, adjusted for inflation. And economic growth in the region ran slightly ahead of the national average.
Once again, Republicans are essentially lying about the detrimental effects of these new regulations. They are also continuing to lie about cap and trade.
Through a program called cap and trade, the Northeastern states also impose a small price on emissions of carbon dioxide from power generation, and plow the proceeds back into energy-efficiency programs, such as retrofitting homes and businesses, lowering electricity bills. And the states have encouraged the growth of emissions-free renewable power and more judicious use of energy. David W. Cash, the Massachusetts commissioner of environmental protection, said he saw a direct link between the state’s above-average economic performance in recent years and lower energy bills for businesses and consumers.
“Every dollar they’re not spending on coal that comes from Colombia or natural gas that comes from Pennsylvania is a dollar that stays here in Massachusetts,” Mr. Cash said.
So, there goes another bullshit myth.
When will the rest of the United States stop listening to these bozos?
No boiling pit of sewage.
Take a look at this recent piece from the New York Times and the Georgetown Climate Center.
At least 10 states cut their emissions by that amount or more between 2005 and 2012, and several other states were well on their way, almost two decades before Mr. Obama’s clock for the nation runs out.
That does not mean these states are off the hook under the Obama plan unveiled this week — they will probably be expected to cut more to help achieve the overall national goal — but their strides so far have not brought economic ruin. In New England, a region that has made some of the biggest cuts in emissions, residential electricity bills fell 7 percent from 2005 to 2012, adjusted for inflation. And economic growth in the region ran slightly ahead of the national average.
Once again, Republicans are essentially lying about the detrimental effects of these new regulations. They are also continuing to lie about cap and trade.
Through a program called cap and trade, the Northeastern states also impose a small price on emissions of carbon dioxide from power generation, and plow the proceeds back into energy-efficiency programs, such as retrofitting homes and businesses, lowering electricity bills. And the states have encouraged the growth of emissions-free renewable power and more judicious use of energy. David W. Cash, the Massachusetts commissioner of environmental protection, said he saw a direct link between the state’s above-average economic performance in recent years and lower energy bills for businesses and consumers.
“Every dollar they’re not spending on coal that comes from Colombia or natural gas that comes from Pennsylvania is a dollar that stays here in Massachusetts,” Mr. Cash said.
So, there goes another bullshit myth.
When will the rest of the United States stop listening to these bozos?
Thursday, April 24, 2014
Republican Victory in 2014?
The recent New York Times Kaiser Family Foundation Poll illustrates that the Republican "victory" seven months ahead of the 2014 elections may be a bit premature. It looks like Mark Pryor isn't as much on the hot seat anymore. And Kay Hagan is holding her own in North Carolina. As expected, Mitch McConnell is on the hot seat in Kentucky and it will be interesting to see if this race stays as deadlocked into the fall.
So, why is this happening? I thought that the GOP was going to be able to cruise to victory on the evils of Obamacare. The numbers from Arkansas and Kentucky, where two Democratic governors embraced Medicaid expansion, say otherwise. Kentucky also ran its own exchange which did very, very well so if I were ol' Mitchie, I'd lay off the anti-Obamacare talk. Does he (and other Republicans, for that matter) really want to stand for taking away people's health care?
The key for the Democrats, as Dan Balz notes, is to get the same level of turnout in a presidential year. It's helpful that the president's approval ratings are on the rise to the mid 40s from the lower 40s where they have been stuck for quite some time. But his good news isn't getting across and that needs to happen ASAP. Oddly, he seems to be doing a better job with the ACA than with the economy.
Democrats need to take heart that some of the worst nightmares for the Republicans are coming true. The ACA is working and will help the Democratic vote in the tossup states. The economy is growing at a 3 percent rate. Even if just these two issues coalesce in November, nothing will change in the Senate and the Democrats may surprise a few people in the House.
So, why is this happening? I thought that the GOP was going to be able to cruise to victory on the evils of Obamacare. The numbers from Arkansas and Kentucky, where two Democratic governors embraced Medicaid expansion, say otherwise. Kentucky also ran its own exchange which did very, very well so if I were ol' Mitchie, I'd lay off the anti-Obamacare talk. Does he (and other Republicans, for that matter) really want to stand for taking away people's health care?
The key for the Democrats, as Dan Balz notes, is to get the same level of turnout in a presidential year. It's helpful that the president's approval ratings are on the rise to the mid 40s from the lower 40s where they have been stuck for quite some time. But his good news isn't getting across and that needs to happen ASAP. Oddly, he seems to be doing a better job with the ACA than with the economy.
Democrats need to take heart that some of the worst nightmares for the Republicans are coming true. The ACA is working and will help the Democratic vote in the tossup states. The economy is growing at a 3 percent rate. Even if just these two issues coalesce in November, nothing will change in the Senate and the Democrats may surprise a few people in the House.
Wednesday, April 02, 2014
What Is Your Alternative, Ms. Palin?
Sarah Palin recently called Paul Ryan's latest budget "a joke" saying "it is STILL not seeing the problem; it STILL is not proposing reining in wasteful government overspending TODAY, instead of speculating years out that some future Congress and White House may possibly, hopefully, eh-who-knows, take responsibility for today’s budgetary selfishness and shortsightedness to do so."
“THIS is the definition of insanity,” she continued.
Fine. Where do you propose cuts?
“You’d think one who is representing the mighty Badgers, who made it to the Final Four based on sacrificial work ethic and discipline that obviously pays off in the end, … would understand that future success depends on hard work and sacrifices,” Palin said.
Again, where exactly do you propose cuts?
There is plenty to cut, Palin argued, as “every omnibus bill is loaded with pork and kickbacks.”
Be specific. How much? What would happen as a result of the cuts?
“As my Dad would say after these April Fool’s announcements, ‘This would kill a lesser man.’ This out-of-control debt is killing our economic future,” Palin wrote.
How exactly?
Sarah Palin is a great example of how all conservatives have these days is criticism...even of their own party! They don't offer anything but strident language and hollow (and really, really played) talking points that appeal to fear. Considering our massive wealth and assets, the debt is a phantom menace and she is simply lying about our economic future.
Of course, she (and any other conservatives) are welcome to prove me wrong with substantive plans of their own:)
“THIS is the definition of insanity,” she continued.
Fine. Where do you propose cuts?
“You’d think one who is representing the mighty Badgers, who made it to the Final Four based on sacrificial work ethic and discipline that obviously pays off in the end, … would understand that future success depends on hard work and sacrifices,” Palin said.
Again, where exactly do you propose cuts?
There is plenty to cut, Palin argued, as “every omnibus bill is loaded with pork and kickbacks.”
Be specific. How much? What would happen as a result of the cuts?
“As my Dad would say after these April Fool’s announcements, ‘This would kill a lesser man.’ This out-of-control debt is killing our economic future,” Palin wrote.
How exactly?
Sarah Palin is a great example of how all conservatives have these days is criticism...even of their own party! They don't offer anything but strident language and hollow (and really, really played) talking points that appeal to fear. Considering our massive wealth and assets, the debt is a phantom menace and she is simply lying about our economic future.
Of course, she (and any other conservatives) are welcome to prove me wrong with substantive plans of their own:)
Friday, February 28, 2014
America Is Not In Decline
Dovetailing quite nicely with Kurtzman's Second American Century is this piece from Politico magazine by Sean Starrs. Our continual and often hyperbolic obsession with "America's decline" really can be most hysterical and irrational.
It all started with a wave of declinism in the 1980s, set off by the rise of Japan. Then the doom and gloom suddenly vanished amid the triumphalism of the 1990s, which transformed the United States into the world’s only superpower. After the Sept. 11 attacks and the invasion of Iraq, many thought “empire” was a better moniker, with the United States apparently able to reshape world order virtually at will. And then just a few years later — poof! — declinism returned with a vengeance, with American power supposedly crashing like the latest Hollywood reality queen. China supplanted Japan as a hegemon on the rise, and the biggest global financial crisis since 1929 — emanating from the United States itself — was allegedly the final nail in the coffin of the American century.
This really is an issue that both parties are guilty of having their heads up their asses. Recently and in the same day, Bubba T and my ultra libertarian/rabid Randian brother in law both foamed at the mouth about how America is doomed. I realized how similar the far left and the far right sound when they are shrill:) But this is exactly what Starrs is talking about in this piece. For example, the metric by which we measure Chinese power is flawed.
China, for example, has been the world’s largest electronics exporter since 2004, and yet this does not at all mean that Chinese firms are world leaders in electronics. Even though China has a virtual monopoly on the export of iPhones, for instance, it is Apple that reaps the majority of profits from iPhone sales. More broadly, more than three-quarters of the top 200 exporting firms from China are actually foreign, not Chinese. This is totally different from the prior rise of Japan, propelled by Japanese firms producing in Japan and exporting abroad.
In the age of globalization, we can't measure a country's economic power in the same way.
It all started with a wave of declinism in the 1980s, set off by the rise of Japan. Then the doom and gloom suddenly vanished amid the triumphalism of the 1990s, which transformed the United States into the world’s only superpower. After the Sept. 11 attacks and the invasion of Iraq, many thought “empire” was a better moniker, with the United States apparently able to reshape world order virtually at will. And then just a few years later — poof! — declinism returned with a vengeance, with American power supposedly crashing like the latest Hollywood reality queen. China supplanted Japan as a hegemon on the rise, and the biggest global financial crisis since 1929 — emanating from the United States itself — was allegedly the final nail in the coffin of the American century.
This really is an issue that both parties are guilty of having their heads up their asses. Recently and in the same day, Bubba T and my ultra libertarian/rabid Randian brother in law both foamed at the mouth about how America is doomed. I realized how similar the far left and the far right sound when they are shrill:) But this is exactly what Starrs is talking about in this piece. For example, the metric by which we measure Chinese power is flawed.
China, for example, has been the world’s largest electronics exporter since 2004, and yet this does not at all mean that Chinese firms are world leaders in electronics. Even though China has a virtual monopoly on the export of iPhones, for instance, it is Apple that reaps the majority of profits from iPhone sales. More broadly, more than three-quarters of the top 200 exporting firms from China are actually foreign, not Chinese. This is totally different from the prior rise of Japan, propelled by Japanese firms producing in Japan and exporting abroad.
In the age of globalization, we can't measure a country's economic power in the same way.
Thursday, February 27, 2014
The Second American Century
Joel Kurtzman, former Editor in Chief of the Harvard Business Review, recently posted a great summation of his new book, Unleashing the Second American Century: Four Forces for Economic Dominance. Looks like I am going to need this book ASAP.
The core of his argument is optimism. Despite the continual drudge of negative views of the future of our country, we are indeed poised to continue our hegemonic dominance of the world. Kurtzman posits that because of the following four reasons, the future is looking very, very bright for you country.
American Creativity
Manufacturing Renaissance
An Energy Bonanza
Abundant Capital
He offers brief summations of each of these reasons in the linked post above. I'll be taking about this book as I read it, thus the new tag called "Second American Cenutry."
If I were a political party in this country (hint hint), I would jump on the Kurtzman bandwagon right now. Optimism always wins the day over anger, hatred, and fear.
The core of his argument is optimism. Despite the continual drudge of negative views of the future of our country, we are indeed poised to continue our hegemonic dominance of the world. Kurtzman posits that because of the following four reasons, the future is looking very, very bright for you country.
American Creativity
Manufacturing Renaissance
An Energy Bonanza
Abundant Capital
He offers brief summations of each of these reasons in the linked post above. I'll be taking about this book as I read it, thus the new tag called "Second American Cenutry."
If I were a political party in this country (hint hint), I would jump on the Kurtzman bandwagon right now. Optimism always wins the day over anger, hatred, and fear.
Tuesday, February 25, 2014
Keynes and Hayek A Go Go
A recent discussion in comments reminded me of this piece from a while back that I never posted. There were a couple of good points in it.
The problem with the Hayekian position is that it’s relentlessly negative: spending doesn’t work, stimulus doesn’t work, all we can do is suffer a nasty bout of deflation and trust in the invisible hand to eventually get us back to work again.
Right. Then, there was this highly familiar point...
For the Hayekians, the Manhattan Institute’s Diana Furchtgott-Roth was particularly revealing: she would take a question about rescuing the financial system and duck it by talking about how rescuing the auto industry was a bad idea. Or she would ridicule high-speed rail by saying that no one wants to take the train from New York to L.A.—a route that precisely no one is proposing. In other words, the Hayekians were more comfortable with straw men than with messy reality.
Pretty much sums up every discussion I've every had with these sorts of folks.
But I remembered that the main reason why I didn't is that is seemed far too bipolar. The answer isn't always simply "Keynes" or "Hayek." In fact, in the current age of globalization, neither fully apply. I've always been one to take a more constructivist approach to any issue of the day. New ideas that are people driven, not "school of thought" driven. For example, both liberalism and realism completely failed to predict the collapse of the Soviet Union. They didn't figure that Gorbachev would simply give up and call it a day. Is there an economist out there or world leader who will finally leave behind both Keynsian economics as well as the theories of Friedrich Hayek? In my view, it's long overdue. How does one stimulate aggregate demand when we have a world economy? This implies that all of the world's governments would have to act in concert to achieve this end and, given the reality of the international stage and conflicting interests, this hardly seems likely.
And there are far too many misconceptions about John Maynard Keynes that have sadly taken root. The thing that people forget about Keynes is that only called for increased government spending in times of contraction. When economies were doing well, he did call for austerity and reduced spending. The anti-spending anaphylactics tend to forget that. These same people also forget that Ronald Reagan was a Keynsian by both cutting taxes (which increases aggregate demand) and increasing spending. "I'm not worried about the deficit. It's big enough to take care of itself," he once quipped. Richard Nixon famously said, "We are all Keynsians now" and, to a certain extent, he was right.
My biggest beef with Hayekians is that can't point to a real world example of how his theories work in practice. Like the libertarian fantasists, where was the utopia of which they dream? How would it work today, given globalization? Certainly, they can point to austerity measures taken during boom times but that's honestly Keynes, not Hayek. The reality is Hayekians just don't like the government. Their emotions about it have clouded their judgment and inhibited them from seeing that different circumstances dictate different paths of solutions.
Sometimes you can't plug a square peg into a round hole. Shocking, I know!
The problem with the Hayekian position is that it’s relentlessly negative: spending doesn’t work, stimulus doesn’t work, all we can do is suffer a nasty bout of deflation and trust in the invisible hand to eventually get us back to work again.
Right. Then, there was this highly familiar point...
For the Hayekians, the Manhattan Institute’s Diana Furchtgott-Roth was particularly revealing: she would take a question about rescuing the financial system and duck it by talking about how rescuing the auto industry was a bad idea. Or she would ridicule high-speed rail by saying that no one wants to take the train from New York to L.A.—a route that precisely no one is proposing. In other words, the Hayekians were more comfortable with straw men than with messy reality.
Pretty much sums up every discussion I've every had with these sorts of folks.
But I remembered that the main reason why I didn't is that is seemed far too bipolar. The answer isn't always simply "Keynes" or "Hayek." In fact, in the current age of globalization, neither fully apply. I've always been one to take a more constructivist approach to any issue of the day. New ideas that are people driven, not "school of thought" driven. For example, both liberalism and realism completely failed to predict the collapse of the Soviet Union. They didn't figure that Gorbachev would simply give up and call it a day. Is there an economist out there or world leader who will finally leave behind both Keynsian economics as well as the theories of Friedrich Hayek? In my view, it's long overdue. How does one stimulate aggregate demand when we have a world economy? This implies that all of the world's governments would have to act in concert to achieve this end and, given the reality of the international stage and conflicting interests, this hardly seems likely.
And there are far too many misconceptions about John Maynard Keynes that have sadly taken root. The thing that people forget about Keynes is that only called for increased government spending in times of contraction. When economies were doing well, he did call for austerity and reduced spending. The anti-spending anaphylactics tend to forget that. These same people also forget that Ronald Reagan was a Keynsian by both cutting taxes (which increases aggregate demand) and increasing spending. "I'm not worried about the deficit. It's big enough to take care of itself," he once quipped. Richard Nixon famously said, "We are all Keynsians now" and, to a certain extent, he was right.
My biggest beef with Hayekians is that can't point to a real world example of how his theories work in practice. Like the libertarian fantasists, where was the utopia of which they dream? How would it work today, given globalization? Certainly, they can point to austerity measures taken during boom times but that's honestly Keynes, not Hayek. The reality is Hayekians just don't like the government. Their emotions about it have clouded their judgment and inhibited them from seeing that different circumstances dictate different paths of solutions.
Sometimes you can't plug a square peg into a round hole. Shocking, I know!
Saturday, February 22, 2014
U.S. Economic Activity, Split in Half and Mapped
Check this out...
The orange represents 50 percent of the economic activity of the entire country whereas the blue represents the other half. Looks like my hometown is pulling its weight quite well. Of course, it's hard to go wrong with 3M, General Mills, Target, Best Buy, Cargill and UHC in one spot, just to name a few.
Hmm...I see a whole lot of blue in red state areas. What a bunch of freeloaders...must be the fault of Obama and the federal government!;)
The orange represents 50 percent of the economic activity of the entire country whereas the blue represents the other half. Looks like my hometown is pulling its weight quite well. Of course, it's hard to go wrong with 3M, General Mills, Target, Best Buy, Cargill and UHC in one spot, just to name a few.
Hmm...I see a whole lot of blue in red state areas. What a bunch of freeloaders...must be the fault of Obama and the federal government!;)
Friday, February 21, 2014
The Gap Closes The Gap
It looks like retail clothing firm The Gap has joined Costco and other businesses in economic intelligence. Hmm...pay people more money...they spend more money in the economy...businesses hire more people and earn more profit...weird how that works:)
Wednesday, February 19, 2014
Sunday, February 16, 2014
Saturday, February 15, 2014
US Assets Outweigh US Debt
The next time you here someone blow a bowel over federal debt, show them this.
- More than 900,000 separate real assets covering more than 3 billion sq. ft.
- Mineral rights, on and offshore, covering 2.515 billion acres of land, more than the total surface land in Canada -45,190 underutilized buildings, the operating costs of which are $1.66 billion annually
- Oil and gas resources on and offshore worth $128 trillion, roughly eight times the national debt of the country
This doesn't even include all of our military resources. Add that in and all of the obsessive focus on our debt is seen clearly as being irrational and hysterical. Even the Heritage Foundation agrees.
So, given these very simple facts, it seems that some folks have been trying to pull the wool over our eyes (see: lying) simply because they have a pathological hatred of the federal government (see also, unresolved issues with parents, authority, massive insecurity) and can't admit when they are wrong.
So, given these very simple facts, it seems that some folks have been trying to pull the wool over our eyes (see: lying) simply because they have a pathological hatred of the federal government (see also, unresolved issues with parents, authority, massive insecurity) and can't admit when they are wrong.
Friday, February 14, 2014
Thursday, February 13, 2014
Wednesday, February 12, 2014
Tuesday, February 11, 2014
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