Holiday Reading

Monarch butterflies bounce back in Mexico wintering grounds

The Media Needs to Stop Pretending that Elon Musk is a Wise Sage rather than a Grifter

When I First Saw Elon Musk for Who He Really Is

No Atheist Has Done This Much Damage to the Christian Faith

'Big Short' investor Michael Burry compares the market slump to a plane crash — and hints tumbling stocks and home sales remind him of the housing bubble bursting

The massive gap between rich and poor Americans costs the US economy more than $300 billion every year, study says

The Southern Baptist Horror

How America Sold Out Little League Baseball

Bad Economics

Midweek Reading

The Gadfly of American Plutocracy
How Compass Became the Bane of Real Estate
How One of the Reddest States Became the Nation’s Hottest Weed Market

Police Association Calls BLM Protesters ‘Terrorists’

Wisconsin Supreme Court upholds Biden's win, rejects Trump lawsuit

Senator Ron Johnson No Longer Has Constituents; He Has a Boss, a Don

The Election is Over. Wisconsin Turns to Redistricting.

Democrat asks Pelosi to refuse to seat lawmakers supporting Trump's election challenges

A new California bill would require a 4-year degree to become a cop

Violence flares in Washington as far-right Trump supporters clash with counter-protesters

Everything We’ve Learned About Modern Economic Theory Is Wrong

"Robots Are Taking Over" Isn't Supported By The Data

Democrats, Avoid the Robot Rabbit Hole

What Economists (Including Me) Got Wrong About Globalization

Don’t Blame Robots for Low Wages

Andrew Yang’s Math on the Robot Takeover Doesn’t Check Out

Andrew Yang Is Ross Perot for Millennials

Making Andrew Yang Smarter

Blame the policies, not the robots

Weekend Reading

Why And How Capitalism Needs To Be Reformed
The IRS Tried To Take On The Ultrawealthy. It Didn't Go Well.
The Tax Law's Big Winner Is The Millionaire CEO
Bernie Sanders's Fox News Town Hall Wasn't A Debate. Bernie Won Anyway.
Warren Has A Good Beginning For Ending Corporate Tax Avoidance
The Truth About U.S. Taxes Is That They Aren't High Enough
Yes, Graceland Actually Threatened To Move To Japan To Get $194 Million In Subsidies From Memphis
Ending The Economic War Among The States: A Strategic Proposal
Amazon's Next Frontier: Your City's Purchasing
The Undemocratic Making Of Indianapolis
The Future Of Unions Is White-Collar
Fun Fictions In Economics

Talking Heads Upset Billionaire Isn't Given Billions In Corporate Welfare

Boo-fucking-hoo, you babies.  Sorry your usual status-quo shakedown didn't work.

‘Morning Joe’ Rips Alexandria Ocasio-Cortez Over Amazon Pull-Out: ‘She Only Cares About Herself’

The set of “Morning Joe” was not happy about the decision by Amazon to pull out of their new planned headquarters in New York City yesterday, laying the blame for the decision at the feet of Rep. Alexandria Ocasio-Cortez and fellow recalcitrant progressive lawmakers. 

On set there was near unanimity that Ocasio-Cortez did not understand the broader situation and was unfamiliar with basic economics. 

“The protests that we saw were to get on AOC’s bandwagon. And what’s shocking to me is yet once again she shows how little she understands, about not just economics, but even unemployment,” show mainstay Susan Del Percio said. “Just because she has a progressive agenda, which some people like, does not mean she has the city’s best interests. What she showed me today, or yesterday, is that she only cares about herself.”

Um, actually she understands the economics better than the Morning Joe corporate welfare shills.

How much was New York giving Amazon?  What was the cost-per-job?  If you're not going to discuss the details of the giveaway and actually analyze it in comparison to other possible investments, maybe you're the one who needs to shut the fuck up.

I guess, according to the Morning Joe crew, giving billions to a billionaire is good use of public dollars.  Oh, but all these rich pricks hate socialism.  Yeah, unless it's for them.

For Further Reading:
Amazon To Pay $0 In Federal Taxes In 2019
Economic Development, Tax Incentives and The Plutocracy It's Creating

Friday Reading

Is Foxconn Double Crossing Walker?
Unions Will Try To Thwart Supreme Court Janus Ruling - That's What They Did In Michigan
Meet The Economist Behind The One Percent's Stealth Takeover Of America
The Second Amendment's History
Is It Great To Be A Worker In The U.S.? Not Compared With The Rest Of The World
A 30-Year Alarm On The Reality Of Climate Change
Crude Oil Through Port Of Milwaukee Creates Risks For Lakefront, Water Supply
Business' Complaints Over Pressure For Donations Prompted Ouster of Ald. Tony Zielinski As Licenses Committee Head
No President Has Tied Themselves Closer To The Stock Market Than Trump - Now The Chickens Have Come Home To Roost
Scott Walker Is Donald Trumps Most Dangerous Enabler

Sunday Reading

Is Wisconsin Going to Get Fox-Conned?
Modern Economists:The Inept Firefighters' Clubs
Capitalism the Apple Way vs. Capitalism The Google Way
100 Companies Responsible For 71% Of Global Emissions
Scientists Starting To Clear Up One Of The Biggest Controversies In Climate Science
You Can Pay For A Ballpark Without Fleecing Taxpayers
The Fascinating Life Of Nikola Tesla
Walker Building Yesterday's Economy

Weekend Reading

Scott Walker, the John Doe Files and How Corporate Cash Influences American Politics
How Privatization Is Killing The Public Sector
Scaring Kids About The National Debt
Wall Street Journal Mourns The Growing Efficiency of the Banking Industry
Elizabeth Warren Asks Obama To Replace Wall Street Regulator For Brazen Conduct
Ruling Against Wall Street Watchdog Decried As Reckless and Partisan
Oklahoma Governor Mary Fallin Declares 'Oilfield Prayer Day' To Ask God To Protect The State's Oil Industry
Larry Summers Makes The Case For Higher Capital Requirements
Social Security Is Not The Main Driver of the Country's Long-term Budget Problem
Economics Has A Major Blind Spot
Wisconsin Among The Worst Places In U.S. To Start A Business
Talgo Coming Back To Milwaukee
Solution To False 'Benefit Crisis' Isn't Cuts - It's Better Fiscal Policies
America Isn't The Greatest Country On Earth. It's No. 28
The Undercover War Against The Parks
How The Oil & Gas Industry Awakened Oklahoma's Sleeping Fault Lines

Weekend Reading

Oxfam Finds 85 Elites As Rich As 3.5 Billion People
Trickle-Down Economics Is The Greatest Broken Promise Of Our Lifetime
Here's Why The Idea Of A 'Traditional Marriage' Is Total Bullshit
25 Manners Everyone Needs
Health Care Spending Slows To Historically Low Rate
Income Growth Has Stalled For Most Americans
The Biggest Myths In Economics
No, Raising The Minimum Wage Won't Kill The Economy
8 Subconscious Mistakes Your Brain Makes Everyday

Income Inequality

Did Sprawl Kill Horatio Alger?
A Tale Of Two Rust Belt Cities
Will SCOTUS Voting Rights Ruling Yield A Blue State Refund?

Without State Spending There'd Be No Google Or GlaxoSmithKline
Econ 101 Is Killing America
McDonald's Budget Plan Leaves Out Corporate Welfare
The Case For Paying People More
Mr. President, Have Pity On The Working Man
How Intellectual Property Reinforces Inequality
Is Productivity Being Translated Into Pay Increases?
Higher Productivity Used To Mean Higher Wages. Has That Broken Down?

Wages Fall At Record Pace
Walmart One Of The Major Welfare Recipients In America
Who's Dependent On Food Stamps? Cheapskate Corporations
Inequality In America: The Data Is Sobering

Weekend Reading

Comparing Housing Recoveries
Five Myths About Obama's Stimulus
Giving Economics A Bad Name
Looks Like Ryan: Mitt's Pick
Obamacare Benefits Are Starting To Roll Out
The Opportunity Cost Of Hoarding Cash Is Lower Than You Think
Ryan Wants Even Bigger Tax Cuts For Wealthy Than Romney
Where The World's Running Out Of Water

Weekend Reading

Barbecue Styles Across the U.S.
Economics In The Crisis
Free Trade Blinders
A Milwaukee Jobs Act
More Than 15% Obese In Nearly All U.S. Metros
School For Quants
Scott Walker Sets Up Legal Defense Fund
U.S. Cities With The Best Urban Policies
Wisconsin Employment Climbs...To 12,500 Below 2011 Levels

The End of Loser Liberalism

A new book from Dean Baker.

Contents

1 Upward Redistribution of Income ....... 1

2 Where We Are and How We Got Here........ 12

3 The Great Redistribution ......... 27

4 The Bubble Economy ............ 35

5 The Fed and Interest Rates........ 49

6 Full Employment without the Fed ....... 61

7 The Treasury and the Dollar ........ 79

8 Trade in an Overvalued-Dollar World...... 87

9 Reining in Finance.......... 111

10 Government-Granted Monopolies ..... 129

11 Follow the Money:......... 141

Sunday Reading

ACORN: Federal Governments Best Investment
Affordable Housing Innovations
Economics of Models
Ending LEEDs Monopoly
High-Speed Rail: A No-Brainer
Midwest Has Highest Per Capita Rate of Iraq War Fatalities and Casualties
On Endless Growth
Owners No More
Perils of Waterfront Development
Private Equity Vultures
Problems With Securitization
Too Politically Connected To Fail In Any Crisis
Transport of Tomorrow
Whitopia

Economic Reform

Robert Skidelsky has an interesting article in the Financial Times concerning a reform of the economics profession.

Unnecessary Economic Complications

You've got to love economic theories. Cute perfect-world scenarios wrapped up nicely in elegant algorithms. The problem is much of the assumptions are pure drivel.

I've always found that historical trend analysis seems to offer the most insight into where we've been and how to handle challenges presently and in the future. History is a wonderful guide in locating the norm (mean reversion) of whatever it is we're measuring. By just looking at how inflated the price-to-income and price-to-rent ratios had become towards the late 1990s, a few of our better economists were able to call the housing bubble back in 2002. They didn't have to dress-up the obvious in fancy mathematical models to show what was plain as day.

One particular Homo Economicus assumption I've seen popping up lately is the idea that people are averse to working more if they know it will lead them into a higher tax bracket. Of course this argument was brought out by conservatives as a warning against President Obama's plan to raise taxes on the wealthiest amongst us. [By the way, during our most robust period of growth from the late 40s to the late 60s our highest marginal tax rate varied from 90 to 70 percent.] It may be true that higher taxes lead millionaires to find more and more clever ways to avoid taxation, but regardless of the amount they are making, they always seem to be trying to avoid taxes. And, let's face it, can we really say many of these people are "working" that hard? Avoiding taxation isn't the same as doing less. This has more to do with profit and greed than some efficient decision about taxes and time worked.

This is especially true for the 85 percent of the population earning under $100,000. Most people work as much as they can for as long as they can. Which is why even though our productivity per hour has increased, so has our number of hours worked.

But I guess when our economic system is constructed toward rewarding the Haves every example displayed and the indicators used to explain what's going on will no doubt be more geared to their wealth -- the S&P, the Dow, Russell, Nasdaq, Goldman, etc. These have become the markers we all watch and live by. Yet the wealthiest control nearly all of the stock market. This misdirection is comparable to tracking sales at Neiman Marcus as a guide for the shopping patterns of average Americans.

NAFTA & The Myth of Free Trade

John McCain recently indicated his position in the free trade debate and belittled his Democratic challengers by dismissing their reservations about and proposals of possible reform for the North American Free Trade Agreement (NAFTA). Yet, why should we trust McCain's judgment of NAFTA or anything closely resembling economics when he readily admits he doesn't understand the subject?

McCain went on to state, "The fundamentals of our economy are still strong." Huh? I think he's been on the campaign trail a bit too long. You don't have to have be an economics PhD to read the newspapers and grasp that our economy is headed in the wrong direction. Many parties and policies are to blame for this downturn. Reagan/Thatcher deregulation, lower taxation, and decreased protectionism; Greenspan/Rubin/Clinton continued deregulation, balanced budget obsession, and the dollar/stock/housing bubbles; and Bush's even lower taxation, deregulation, and costly and unnecessary war. So as we can see, there is a theme running through the last three decades and much of it is coming to a head.

In the 1980s we bailed out the savings & loan industry. Which, as Paul Krugman calculates, cost taxpayers 3.2 percent of GDP, or the equivalent of $450 billion today. Today, we're bailing out the cesspool that is the subprime mortgage industry. Both were caused by excessive deregulation and lack of oversight into the activities of what have become evermore-risky financial schemes. The U.S. has been on a steady path of lowering taxes on its corporations, tearing down trade restrictions (mostly to undercut labors' gains and their bargaining power), and removing any management and boundaries of standards of acceptable business practice. We're letting the foxes watch the hen house. All of this is done to please Wall Street-ers and to cook the books for acceptable quarterly returns for shareholders.

As Nouriel Roubini notes there now exists a shadow financial system, composed of conduits, money market funds, hedge funds and other non-bank financial institutions. "The Fed now can lend unlimited amounts to non-bank highly leveraged institutions that it does not regulate...By lending massive amounts to potentially insolvent institutions that it does not supervise or regulate and that may be insolvent the Fed is taking serious financial risks and seriously exacerbating moral hazard."

We've entered into an era of uber casino capitalism where rules and ethics no longer apply. Aided by bought-and-paid-for government policies, elite capital plunders and pillages the globe in search of higher returns. This is all claimed under the guise of creating jobs, advancing democracy, increasing wages, and advancing civilization. Yet all of these assertions are empirically and demonstrably false.

Alice Amsden, an MIT economist, has demonstrated that most of the successful Asian nations have violated every aspect of the law of comparative advantage on their path to economic success. Ha-Joon Chang, a Cambridge economist, has shown that almost all countries have used protectionist measures to protect their infant industries and to develop economically throughout time. Unadulterated free trade, virtually non-existent taxes, and the lack of any protectionist measures, as an economic development policy is a modern scheme. This is a ruse that is failing miserably. Developed countries grew at 3.2 percent during the 1960-1980 period. Their growth stalled to just 2.2 percent, from 1980-2000. Over this same time, developing countries growth decreased from 3 percent to 1.5 percent.

Alexander Hamilton, America's first treasury secretary, proposed measures to protect America's infant industries. Since 1791, up until the Second World War, the U.S economy grew behind huge tariff walls, with industrial tariffs ranging from 25 to 40 percent. Direct government participation and protection of industry resulted in the economic strength and maturity of the nation. "Within 200 years, when America has gotten out of protection all that it can offer, it too will adopt free trade," Ulysses Grant (civil war hero, U.S. president 1868-1876) commenting on U.S. trade policy with parallels to England's history of protection and their change in attitude to free trade when they saw that they had gotten all that protection could offer them.

The countries that have accomplished economic ascendancy have done so by fashioning policies to their own needs, not by following neo-liberal orthodoxy (aka The Washington Consensus). Today, China and India have tariffs ranging between 20 and 30 percent on manufactured goods. The productivity gap between rich (developed) and poor (developing) countries is much higher today than it was, so it only follows that tariffs should also be higher. The ratio of per capita income in purchasing power parity between the richest and poorest developed countries was, at most, four-to-one. Today the gap is around fifty-to-one. Today's developing countries will have to impose higher tariff rates than those used by developing countries in the past if they are to provide the actual same degree of protection to their industries. Infant economies cannot compete with mature ones. Free trade agreements between countries with vastly different levels of productivity cannot succeed over the long-term.

From 1993 (NAFTA's inception) to 2002, the U.S. lost 879,280 jobs due to the trade agreement. Wisconsin has lost 23,028 jobs due to NAFTA over this period. Productivity has risen by 48 percent since 1973, yet real hourly compensation has increase by only 20 percent. In 1973 manufacturing accounted for 24 percent of total U.S. employment, it is now only roughly 10 percent. Trade liberalization has been most hurtful to those without college degrees, whom have actually seen their wages decline.

The neoliberal experiment has failed. It's time for a new New Deal. Imagine that -- government restricting corrupt financial practices and putting the people back to work, whilst also initiating some new programs, legislation, and policies aimed at benefiting the majority of the population rather than a select monied few. As Stanley Kutler's recent article states, "The New Deal launched vast public works projects, expanding and improving the nation's infrastructure...More than eight million people working on one million projects, benefited from the program. The Roosevelt administrations enduring legacy came from its reform measures...the Social Security Act...legislation and regulatory commissions for banking, securities, communications, and labor practices." If only we hadn't spent the last three decades tearing apart these policies and legislation, much of today's horrible financial news and depressing economic conditions could have been averted.

And this also ties into immigration, obviously. First, although this is free trade and is supposed to be based on Ricardo's comparative advantage, which is supposed to lead to efficiency and productivity gains. But with the U.S. continually subsidizing farmers, we artificially lower the price of American agricultural exports and hurt developing countries. Such as Mexico, in one area where they can actually produce at a lower cost. Instead, our subsidized agri-business drives Mexican farmers off their land because of our low priced agricultural products. And, because of this, Mexican wages have actually fallen since NAFTA. Hmmm, I wonder where they might go to find better wages?

For Further Reading:
Challenging Neoliberal Myths
Consensus Against Neoliberal Washington Consensus
Economics of Empire
Fair Trade
False Promises on Trade
How the Washington Consensus Endangers U.S. National Security
Myth of Free Trade
NAFTA at Ten: The Recount
Post-Washington Dissensus
Rethinking Global Political Economy
Subprime Bailout Bonanza