A Different Kind of Economic “Bubble”

A Different Kind of Economic “Bubble” by Sheila Kennedy.

Some interesting points Sheila makes in her class, based on the book “The Price of Inequality: How Today’s Divided Society Endangers Our Future” by Joseph Stiglitz on how the 1% rig the economic system to continuously give themselves an advantage:

According to Stiglitz, the vaunted American market is broken. It has been overwhelmed by politically engineered market advantages—special deals that economists call “rent-seeking.” The term refers to politically-achieved “exemptions” from the market that allow certain individuals to reap economic returns above normal market levels– profits derived from favorable political treatment rather than competitive success.

And another point – business and the wealthy shuffle off the cost of their business production onto the commons, making taxpayers bear the cost:

Stiglitz also argues that much of the rent-seeking that plagues our economy takes a more subtle form. In many cases, the production of a product produces what economists call “negative externalities.” These are costs that are incurred during the manufacturing or development process that end up being imposed on society rather than paid for by the producer and included in the price of the goods or services involved. The most commonly cited example would be a manufacturer who discharges his waste into a nearby waterway rather than properly disposing of it, shifting the costs of cleanup and disposal to others. Society pays for the pollution, and that cost is not included in the market price of the manufactured goods.

Sounds like an interesting book and an interesting course.

1 percent map illustration

1 percent map illustration

Open Letter to that 53% Guy

Max Udargo on the Daily Kos delivers a great response to to the guy calling people whiners for not working 70 hours a week, and telling people to “suck it up” and stop blaming Wall Street. Read the whole response, because it’s worth it. But this particular bit stuck out to me (emphasis mine):

Here’s how a liberal looks at it: a long time ago workers in this country realized that industrialization wasn’t making their lives better, but worse. The captains of industry were making a ton of money and living a merry life far away from the dirty, dangerous factories they owned, and far away from the even dirtier and more dangerous mines that fed raw materials to those factories.

The workers quickly decided that this arrangement didn’t work for them. If they were going to work as cogs in machines designed to build wealth for the Rockefellers, Vanderbilts and Carnegies, they wanted a cut. They wanted a share of the wealth that they were helping create. And that didn’t mean just more money; it meant a better quality of life. It meant reasonable hours and better working conditions.

Eventually, somebody came up with the slogan, “8 hours of work, 8 hours of leisure, 8 hours of sleep” [note from Steph: I never heard this before. I like it!] to divide the 24-hour day into what was considered a fair allocation of a human’s time. It wasn’t a slogan that was immediately accepted. People had to fight to put this standard in place. People demonstrated, and fought with police, and were killed. They were called communists (in fairness, some of them were), and traitors, and many of them got a lot worse than pepper spray at the hands of police and private security.

But by the time we got through the Great Depression and WWII, we’d all learned some valuable lessons about working together and sharing the prosperity, and the 8-hour workday became the norm.
The 8-hour workday and the 40-hour workweek became a standard by which we judged our economic success, and a reality check against which we could verify the American Dream.

If a family could live a good life with one wage-earner working a 40-hour job, then the American Dream was realized. If the income from that job could pay the bills, buy a car, pay for the kids’ braces, allow the family to save enough money for a down payment on a house and still leave some money for retirement and maybe for a college fund for the kids, then we were living the American Dream. The workers were sharing in the prosperity they helped create, and they still had time to take their kids to a ball game, take their spouses to a movie, and play a little golf on the weekends.