Archive for Economy
This exchange from Star Trek: First Contact always fascinated me:
Captain Jean-Luc Picard: The economics of the future are somewhat different. You see, money doesn’t exist in the 24th century.
Lily Sloane: No money? You mean, you don’t get paid?
Captain Jean-Luc Picard: The acquisition of wealth is no longer the driving force of our lives. We work to better ourselves and the rest of humanity.
What a concept. A society not organized around money. Thomas Paine floated the idea of a citizen’s stipend in Agrarian Justice (1797). His ideas for reorganizing the economy were a bit ahead of his time. And while the 24th century may be bit far off yet, it seems several European cities are taking Paine’s 18th century idea out for a test drive:
An experiment to give away money as “basic income” is underway in Germany. In 2014, Michael Bohmeyer, a 31-year-old German entrepreneur, launched “My Basic Income” (“Mein Grundeinkommen”), and this month, the project, made possible through crowdfunding, issued $1,100 checks to 26 people to use however they want.
Leftists in Germany tend to support the idea of basic income while others in the country say the idea might take away incentives for people to work.
— Wall Street Journal (@WSJ) December 16, 2015
While GOP presidential candidates screeched and pulled each other’s hair in last night’s debate over who would kill terrorists (and their families) longer, higher and deeper, the U.S. House managed to do something. It pulled together a budget deal:
Congressional negotiators have wrapped up a sprawling deal to keep the U.S. government operating through next September while setting new policies ranging from repealing a 40-year-old ban on oil exports to making many business tax breaks permanent, according to Republican lawmakers.
House Speaker Paul Ryan told GOP lawmakers late Tuesday, urging support for the legislation that delivers GOP wins but also includes many Democratic priorities. The deal would eliminate any possibility of government shutdowns until at least next October, according to lawmakers present.
Because as Charlie Pierce observed yesterday, “America is the greatest country ever invented to be completely out of your mind,” we’re suffering a little insanity overload this morning.
Daily Show host Trevor Noah’s emergency appendectomy gave him a chance to experience America’s “best in the world” health care system this week. Raw Story:
The host said he periodically fainted from the pain of a perforated appendix, but the nurse told him he was not allowed to faint in the waiting area and should instead go to triage to lose consciousness.
“You’re telling me where I can and cannot faint?” he said.
Noah was finally taken, trembling with pain, to another room for treatment — where he was followed by the same nurse, who brought still more forms and asked how he would be paying for treatment of his life-threatening condition.
“With my life, clearly,” he said.
She decided because she recognized Noah from the billboards that he could pay whether or not he had insurance.
How far down the rabbit hole have we gone that Republican candidates for president think they are entitled to a list of demands from networks hosting debates (and I use that term reservedly) that would make rock bands blush? (Remember, no brown M&Ms.) The Washington Post obtained the list. Here are just a few:
- Will there be questions from the audience or social media? How many? How will they be presented to the candidates? Will you acknowledge that you, as the sponsor, take responsibilities for all questions asked, even if not asked by your personnel?
- Will there be a gong/buzzer/bell when time is up? How will the moderator enforce the time limits?
- Will you commit that you will not:
- Ask the candidate to raise their hands to answer a question
- Ask yes/no questions without time to provide a substantive answer
- Allow candidate-to-candidate questioning
- Allow props or pledges by the candidates
- Have reaction shots of members of the audience or moderators during debates
- Show an empty podium after a break (describe how far away the bathrooms are)
- Use behind shots of the candidates showing their notes
- Leave microphones on during the breaks
- Allow members of the audience to wear political messages (shirts, buttons, signs, etc.). Who enforces?
- What is the size of the audience? Who is receiving tickets in addition to the candidates? Who’s in charge of distributing those tickets and filling the seats?
- What instructions will you provide the audience about cheering during the debate?
- What are your plans for the lead-in to the debate (Pre-shot video? Announcer to moderator? Director to Moderator?) and how long is it?
- What type of microphones (lavs or podium)?
- Can you pledge that the temperature in the hall be kept below 67 degrees?
Dude, can I get on the “guest list” and a backstage pass to hang out with the band?
“Now, I’ll tell you what, my friend,” said Scrooge, “I am not going to stand this sort of thing any longer. And therefore,” he continued, leaping from his stool, and giving Bob such a dig in the waistcoat that he staggered back into the Tank again; “and therefore I am about to raise your salary!”
CEOs who don’t act like CEOs are a rare breed, and newsworthy. Even more so when they are not fictional. Susie Madrak highlighted one the other day at Crooks and Liars. Seems this guy found out it paid off to double the salary of his entry-level employees. Blasphemy! Rush Limbaugh branded him a socialist. Need we say more?
In April, Dan Price, CEO of the credit card payment processor Gravity Payments, announced that he will eventually raise minimum pay for all employees to at least $70,000 a year.
The move sparked not just a firestorm of media attention, but also a lawsuit from Price’s brother and co-founder Lucas, claiming that the pay raise violated his rights as a minority shareholder.
But six months later, the financial results are starting to come in: Price told Inc. Magazine that revenue is now growing at double the rate before the raises began and profits have also doubled since then.
On top of that, while it lost a few customers in the kerfuffle, the company’s customer retention rate rose from 91 to 95 percent, and only two employees quit. Two weeks after he made the initial announcement, the company was flooded with 4,500 resumes and new customer inquiries jumped from 30 a month to 2,000 a month.
From Europe to the Pacific rim, capitalism marches on. Right over democracy. Guess what? People don’t like it. You remember people? They’re the ones, as Pope Francis suggested, the economy is supposed to serve, not rule:
Hundreds of thousands of people marched in Berlin on Saturday in protest against a planned free trade deal between Europe and the United States that they say is anti-democratic and will lower food safety, labor and environmental standards.
The organizers — an alliance of environmental groups, charities and opposition parties — said 250,000 people were taking part in the rally against free trade deals with both the United States and Canada, far more than they had anticipated.
Opposition to the so-called Transatlantic Trade and Investment Partnership (TTIP) has risen over the past year in Germany, with critics fearing the pact will hand too much power to big multinationals at the expense of consumers and workers.
“What bothers me the most is that I don’t want all our consumer laws to be softened,” Oliver Zloty told Reuters. “And I don’t want to have a dictatorship by any companies.”
Yet that is what it appears we have. We are moving towards “authoritarian capitalism” like China and Singapore, says Slovenian philosopher Slavoj Žižek:
Which brings up massive tax cuts that pay for themselves. Sen. Marco Rubio expects Republican primary voters will fall for it again. Ezra Klein explains the Rubio tax plan succinctly at Vox:
The basic idea here is that massive tax cuts boost growth so much that they pay for themselves, and so there’s no actual trade-off between lower taxes and balanced budgets. In this telling, eating your cake leads your body to burn calories so fast that it’s like you end up thinner than you started!
Basically no serious economists believe this. Careful efforts to quantify whether tax cuts boost growth have led to estimates that they have a modest negative effect, a modest positive effect, or not much effect at all, depending on what assumptions you use. Mankiw, the former Bush adviser, described the idea that cuts boost growth so much that they pay for themselves as the province of “cranks and charlatans” in his economic textbook.
What is more amazing is that Cranks and Charlatans is not already the name of a popular Washington, D.C. watering hole. (Have at it.) Maybe near the offices of the Tax Foundation. Klein continues:
I design factories for a living. When I get off a job, lots of other people get jobs: building them and working in them. And in this country, too. Does that make me a “job creator”? Or, as Damon Silvers of the AFL-CIO suggests in the video below, is that really just “a polite term for plutocrats”? As he says, maybe that is why billionaires buy PR firms.
Mike Lux has a piece up at Huffington Post promoting a progressive economic agenda that just might be more important than the next loony thing a Republican candidate for president says. A video in plain-speak condenses a lot of progressive thinking on the economy to 7:25 min. Lux writes:
Contrary to the current trickle-down economic orthodoxy, our economy will only grow and strengthen over the long run if we focus on helping more poor people climb the ladder into an expanding and more prosperous middle class.
That is not happening today. It has not been happening much since the Reagan era introduced us to trickle-down. Capitalism is overdue for an upgrade.
“Alaska is the only state in the union besides New Hampshire without sales or income tax,” writes Alana Semuels in The Atlantic. The Granite State funds itself with one of the highest property taxes in the country, through excise and corporate taxes, and through fees. Lots of fees. The Last Frontier has $50 billion in its savings account and cannot pay its bills.
Alaska has funded nearly 90 percent of its operations for years with oil revenues, but, “For every $5 drop in oil prices, the state loses $120 million, according to Randall Hoffbeck, Commissioner of the Alaska Department of Revenue.” Now, things are getting tight:
“People are used to paying little or nothing for their government services,” Hoffbeck said. “It’s just going to be a change of mindset.”
The Washington Post’s Editorial Board scolds Republican presidential hopefuls (with the exception of Jeb!) for “kneeling before [Grover] Norquist’s make-believe anti-tax theology.”
It is ludicrous, the Board believes, to “pre-reject an entire range of policy options” for dealing with government spending projected to expand from the 20.1 percent of gross domestic product the U.S. averaged from 1965 to 2014 to 25.3 percent by 2014:
At that time, federal revenue is projected to equal about 19.4 percent of GDP absent any policy changes. There is, in other words, a vast budget gap that will need to be filled. Unlike his opponents, Mr. Christie has proposed specific benefit cuts that would narrow the gap somewhat. But neither his proposals, nor any other, can close the gap entirely in the absence of increased revenue. Trying to do so would leave the government paying pensions and rising interest costs (as it borrowed more and more) and devoting little or nothing to the other things Americans expect from government: defense, roads, bridges, basic scientific research, national parks and more.
When it comes to blowing up things or threatening other countries with sanctions or invasion, Republicans take nothing “off the table.” When it comes to paying bills or leaving their country better than they found it, they take away the table.