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
Continue ReadingA Different Kind of Economic “Bubble”

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.

Continue ReadingOpen Letter to that 53% Guy

Indiana under George Bush

Source: DNC Research

Read more in this downloadable file about Indiana stats under the Bush administration.

  • 47,380 more Indiana workers have become unemployed since Bush took office.
  • 26,900 of Indiana workers have lost their unemployment benefits since january 2004.
  • 69,800 Indiana manufacturing jobs lost since Bush took office.
  • 46 percent of Indiana taxpayers will receive less than $100 from latest Bush tax cut in 2004.
  • Indiana families face rising share of national debt burden of $20,855 over next six years.
  • 209,000 Indiana children abandoned by Bush, left out of child tax credit.
  • 797,000 Indiana residents have no health insurance, up 11 % under Bush.
  • 100,300 Indiana seniors worse off under Bush medicare prescription plan.
Continue ReadingIndiana under George Bush

Gay People Blamed for Enron

And if it’s not enough that the right-wing nutjobs are trying to kill us and attempting to steal our children away, now they are blaming gay people for the fall of Enron Corporation.
Enron was YOU GUYS. Republicans. With all your deregulation, and your corporate welfare, and tax breaks for the rich, and thwarting campaign finance reform… the conservative republicans are responsible for Enron. Not us homos! When all else fails and it looks like you might get caught or the pidgeons will come home to roost, blame it on the gay people.

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Economics and Republican fantasy

I’ve said it before, but let me repeat it: There is a finite amount of money. I’m not a communist… I love capitalism. But reality prompts me to point out that we don’t have unlimited amounts of cash.
If we increase our spending at the same time we cut taxes, we’re going to wind up with a huge debt that we can’t pay. If we can’t pay the bills now, how are we going to pay them in the future? In the future people will have become attached to tax cuts, and they won’t want to pay more. They’ll also be attached to government services that they don’t want to give up. We will never be able to get out of debt.
When are the Republicans ever going to get a grip on reality? I don’t carry any debt in my own life. I certainly don’t want the government to do so. We need a good democratic presidential candidate…. and fast.

Continue ReadingEconomics and Republican fantasy

The Rich and Taxes

Excellent quote from Salon:

I am speaking here semi-professionally, as an economics professor (currently at Purdue, but I taught at the University of Chicago for five years, so my conservative bona fides are in order). It is not the case that the rich pay an overwhelming portion of taxes. They pay an overwhelming portion of income taxes. When you figure in payroll taxes and sales taxes, the distribution skews much more strongly toward the poor and middle-income Americans. This is because payroll taxes are only levied on the first (roughly) $70,000 of income, so you effectively pay 13 percent of every dollar of income up to that point, and nothing thereafter.

Of course, the fraction of income that is consumed falls rapidly with income, so the rich pay a much lower percentage of their income in sales taxes. These other taxes comprise roughly 45 percent of the federal budget, and a much higher percentage of state and local budgets. By defining the debate in terms of income taxes, rather than the entire tax burden, the Bush camp has made a reasonable case for a tax cut skewed heavily toward the wealthy. Now perhaps a case could be made that the wealthy should pay a lower burden than the rest of us, or that there is a particular reason to pay attention to income taxes rather than all the other taxes that eat away at our paychecks. But the Bush camp is not making this case; they are trusting in the public’s inability to uncover this fundamental dishonesty. If you’re interested in learning more, we suggest to suggest to look into professional corporate services in Thailand.


Continue ReadingThe Rich and Taxes