Hoisted from the Comments on Kathleen Geier’s, Hold on to your wallet: Doug Henwood on the Bitcoin scam:
Bitcoin is basically a playground for libertarian idiots, con-artists, and people seeking out a market for illegal products (bitcoin has made possible a very robust market for child pornography). The Federal Reserve system doesn’t “scam” anyone out of their money. That’s something only a delusional goldbug would say.
The bad news via Emily Atkin, The 3 Most Sobering Graphics From The U.N.’s New Climate Report:
The overall message of the Intergovernmental Panel on Climate Change’s newest report is simple: a rapid shift to renewable energy is needed to avert catastrophic global warming.
The good news via The Guardian, IPCC climate change report: averting catastrophe is eminently affordable:
Catastrophic climate change can be averted without sacrificing living standards according to a UN report, which concludes that the transformation required to a world of clean energy is eminently affordable.
“It doesn’t cost the world to save the planet,” said economist Professor Ottmar Edenhofer, who led the Intergovernmental Panel on Climate Change (IPCC) team.
Follow the links above for the details.
Wages as a share of gross domestic product (GDP):
Multiply the numbers on the y-axis by 100 to get percentage of GDP which comes from wages.
Harvard Prof. Greg Mankiw in the NY Tmes, Yes, the Wealthy Can Be Deserving. Perhaps there is a case but, if there is, Mankiw ain’t making it in his op-ed. Talk about a target rich environment. People more eloquent than I will gut him. I’ll update with links as the rejoinders to his piece roll in.
UPDATE #1: Here we go:
… the point should be clear. If the 1 percent are able to extract vast sums from the economy it is because we have structured the economy for this purpose. It could easily be structured differently, but the 1 percent and its defenders aren’t interested in changing things. And the 1 percent and its defenders have a great deal of influence on the direction of economic policy.
The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
Mankiw invokes the strong role of financial fortunes in U.S. inequality to argue that the incomes are deserved…Has Greg been living in a cave since 2006? We’re now in the seventh year of a slump brought on by Wall Street excess; the wizardly job of “allocating the economy’s investment resources” consisted, we now know, largely of funneling money into a real estate bubble, using fancy financial engineering to create the illusion of sound, safe investment. We also know that there is a real question whether hedge funds, in particular, actually destroy value for their investors.
One more thing: Mankiw argues that our tax system is fair because the top 0.1 percent pays a higher share of income in federal taxes than the middle class. This neglects the partial offset of this progressivity by regressive state and local taxes. But surely the main point is that to the extent that taxes on the 0.1 percent are high (they aren’t really, in historical context) that’s largely because Mitt Romney lost the 2012 election… It’s kind of funny to claim that our system is fair thanks to policies that you and your friends tried desperately to kill…
[Quoting Mankiw:] “…a nation would allocate many of its most talented and thus highly compensated individuals to the task.”
“Most talented” at what? The 0.1 percenters rise to the top because they are the most talented at making money. Then the conservatives proclaim that the 0.1 percenters deserve to make huge sums of money because they are talented.
Beware of assumptions, especially if the assumption is based on a circular argument where cause and effect, the why and the what, are reversible or are essentially the same thing.
From Alec Torres, Costco: The Argula of Chain Stores:
President Obama has been talking up the members-only shopping chain Costco in his crusade to raise the federal minimum wage, but the favored big-box store for well-heeled shoppers is probably far from the right model for most American businesses…
Costco not only pays wages above those of its obvious competitors — the average Costco employee earns $22.89 an hour, compared to $12.67 an hour at Walmart — but also offers health care to its workers, boasts a meager 5 percent turnover rate among employees, and has seen sales increase by 39 percent and stock prices double since 2009, according to Bloomberg Businessweek.
But what is good for Costco may not be good for everyone else…
The article itself is pretty ridiculous but it does have entertainment value. More interesting though is one of the reader comments it inspired:
From Rep, Mike Capuano‘s (D-MA) e-newsletter yesterday:
New Federal Reserve Chair Janet Yellen appeared this week before the Financial Services Committee to deliver the Federal Reserve’s semi-annual report to Congress. When I had the opportunity to ask her a few questions I brought up the perception that many financial institutions are still considered “Too Big to Fail” despite recent controls put in place by Dodd Frank financial regulatory reform. I spoke about the possibility of reinstituting some provisions of the Glass-Steagall Act, which was repealed more than a decade ago. Glass Steagall required a separation between commercial and investment banking and many, including myself, believe that the easing of this separation contributed to the financial crisis in 2008.
This month’s issue of Harper’s arrived to today. The lead article is “Nothing Left: The long, slow surrender of American liberals” by Adolph Reed, Jr. I haven’t read it yet but judging from the first few paragraphs it appears well-aligned with Dan Kervick’s post last November, Think Bigger, Please!:
Paul Krugman has yet another pair of pieces up about real interest rates, inflation rates, monetary policy “tightness” or “looseness”, and the purported theoretical connection between these phenomena and US stagnation: stagnation in US growth, employment and wages. Read them and yawn.
These discussions are a waste of time. The fundamental source of stagnation in the United States is a conservative, corrupt and intellectually deficient US government – infesting both Congress and the White House – that refuses to do its job and is incapable of thinking big. We need an industrial policy, a detailed and aggressive program of mission-driven public investment for the 21st century, a national commitment to full employment and human development, and a very substantial increase in the federal government role in our economy. And we need our democracy and its citizens to get active in charting and implementing an agenda for our future, and to seize control of that agenda from the corporate profit-seekers and the complacent affluent who are stakeholders in the existing stagnation.
Mainstream economists aren’t helping. Most of them have very conservative late-20th century “end of history” views favoring dwindling states and a reliance on private sector self-sufficiency. They seem to be incapable of engaging with the kind of transformational economics and national ambition that drove our mid-20th century forbears and that is called for again in the early 21st century. Continue reading
From the NY Times, Retail Businesses That Try Crowdfunding Face Some Skepticism:
After nine years in Brooklyn, the Chocolate Room — a popular purveyor of wine, cake, candy and coffee — experienced one of those cataclysmic events retailers fear: a crippling rise in rent. Informed in late 2012 that they would face an increase of more than 500 percent, the cafe’s owners, Naomi Josepher and Jon Payson, reluctantly decided to abandon their space and begin figuring out how to finance a $200,000 relocation.
The couple are still paying off private and family loans for their start-up costs. So Ms. Josepher and Mr. Payson took a suggestion from their customers and started a crowdfunding campaign on Kickstarter. Word spread quickly, and by the third day, the shop had more than $1,000 pledged toward its goal of $40,000.
Donating via Kickstarter is like buying stock in a company only… only… only you don’t get any shares in exchange for your money. You have to admit that certainly simplifies the exchange. It’s a wonder that crowdfunding of for-profit businesses isn’t more popular.
Read the Economix blog at the NY Times. Contributors of particular note:
Google is based in Mountain View, CA. A significant number of its employees live in San Francisco, enough that they run private shuttle buses between SF and Mountain View. What’s the fuss? After all, running shuttle buses reduces the number of cars on the road and that’s a good thing. Well, superficially at least, there’s some fuss that the Google buses have been using public bus stops as pick up and drop off points. More significantly, there’s an argument that the Google buses apparently have an adverse impact on the finances of SF’s public transportation system. Fair enough. But while the buses themselves are a source of conflict they’re a proxy for a bigger issue: gentrification. High-salaried techies – Google employees and otherwise – are driving up the cost of living and driving out middle class residents – see here and here for anecdotes. It’s enough of an issue that here’s been a bit of a popular uprising against the buses.
With that as background, there was a post on Unfogged the other day re the Google bus protests:
President Googly writes: In the past month, the situation with the tech buses has gone from mildly annoying to slightly worrisome to bone-chilling. I’ve heard every side of this argument six different ways by now and I’m really quite hopeless that the root causes can ever adequately be addressed. Furthermore, I’ve never seen the DFH [“Dumb F%^*ing Hippies”] contingent so thoroughly stink up an issue (i.e., the housing shortage not the damn bus stops) that genuinely calls for a vigorous progressive response.
The most interesting part to me is how unhinged the whole debate is becoming and the weird interaction between a genuine public policy dilemma and a semi-professional Left that’s piling on with all kinds of non-answers. This is probably old hat for Bay Area natives, but I’m a neoliberal from back East and I’m not accustomed to finding myself on the “conservative” side of an issue.
Also, if you click through to the details of the “protest” at a random Google employee’s house in Berkeley, the details are really, really creepy and it is not at all unreasonable to fear for this guy’s personal safety.
The post does beg the question, Just what is President Googly’s suggested “vigorous progressive response” to SF’s affordable housing problem? Listen to the crickets chirp? (No answer is better than non-answers? Please. Put up or shut up.) That aside, the comment is just run-of-the-mill hippie punching. So what? Continue reading