I thought I’d start the day off with some new topics given we’ve spent the weekend following world events unfold. One of the major complaints of the Egyptian people is their high unemployment rate. It’s basically the same as ours. They also have seen rising food and energy prices. Our overall price inflation is well under control at the moment, but there are world events that have made food and energy prices more volatile than usual. The Egyptians have experienced GDP growth rates that are twice ours, but like our country, the income improvements have advantaged the very few instead of the many for many of the same reasons. One of the guys that skedaddled on that airplane was the big telecom industry captain. We have many huge corporations–like GE–that exist on no bid government contracts that they never lose, even when they’ve been found endlessly maleficent.
I thought I’d start with Tyler Cohen who has been riffing on themes relevant to his for sell on line pamphlet The Great Stagnation. His NYT article this weekend buried one of the themes of the SOTU. It’s called ‘Innovation Is Doing Little for Incomes’.
The income numbers for Americans reflect this slowdown in growth. From 1947 to 1973 — a period of just 26 years — inflation-adjusted median income in the United States more than doubled. But in the 31 years from 1973 to 2004, it rose only 22 percent. And, over the last decade, it actually declined.
Most well-off countries have experienced income growth slowdowns since the early 1970s, so it would seem that a single cause is transcending national borders: the reaching of a technological plateau. The numbers suggest that for almost 40 years, we’ve had near-universal dissemination of the major innovations stemming from the Industrial Revolution, many of which combined efficient machines with potent fossil fuels. Today, no huge improvement for the automobile or airplane is in sight, and the major struggle is to limit their pollution, not to vastly improve their capabilities.
Although America produces plenty of innovations, most are not geared toward significantly raising the average standard of living. It seems that we are coming up with ideas that benefit relatively small numbers of people, compared with the broad-based advances of earlier decades, when the modern world was put into place. If pre-1973 growth rates had continued, for example, median family income in the United States would now be more than $90,000, as opposed to its current range of around $50,000.
improvements in rich world living standards may, for the moment at least, come from the capture of policy low-hanging fruit. In other words, the rich world should focus on getting rid of blatantly foolish and costly policies. Moving from taxes on goods, like income, to bads, like traffic congestion, would be a good start. Not spending so much on medical treatments with dubious benefits would be another possibility. Cutting out policy foolishness like agriculture subsidies and the mortgage-interest deduction would be another positive step. Amid rapid growth, really silly policy choices could be tolerated, since surpluses continued to rise. As growth rates slow, the failure to cut out bad policies will mean continued stagnation or declines in living standards for some.And it’s a little amusing to focus on the implications of the spread of cheap-to-free internet amusement. As Mr Cowen notes, the availability of good, free internet entertainment has allowed a lot of people hit hard by falling incomes or recession-induced joblessness to maintain relatively high levels of utility (though this available substitute has also made it easier to cut down on physical consumption, with nasty effects on GDP).
Paul Krugman agrees here. Robert Reich struck a similar chord on stalled incomes in his response to the SOTU. Reich focuses on one of our topics. That would be the important list of what the president didn’t say.
What the President should have done is talk frankly about the central structural flaw in the U.S. economy – the dwindling share of its gains going to the vast middle class, and the almost unprecedented concentration of income and wealth at top – in sharp contrast to the Eisenhower and Kennedy years.
Although the economy is more than twice as large as it was thirty years ago, the median wage has barely budged. Most of the gains from growth have gone to the richest Americans, whose portion of total income soared from around 9 percent in the late 1970s to 23.5 percent in 2007. Americans kept spending anyway by using their homes as ATMs but the bursting of the housing bubble put an end to that – leaving them without enough purchasing power to reboot the economy. So the central challenge is put more money into the pockets of average Americans.
This narrative would be politically risky (opening Mr. Obama to the charge of being a “class warrior”) but at least honest. And it would allow him to connect the dots – explaining why his new health-care law is critical to reducing medical costs for most working families, why tax reform requires cutting taxes on the middle class while raising them on the rich, why the Bush tax cuts shouldn’t be extended for the wealthy, why deficit reduction must not sacrifice education and infrastructure (both important to rebuilding middle-class prosperity) and why any cuts in Social Security or Medicare must be on the backs of the wealthy rather than average working families.
I still can’t believe we have a President that doesn’t run a counter narrative to the Republican Voodoo economic fantasy. I guess it’s left to those of us in the blogosphere to hammer home traditional democratic values. So, speaking of some of the worst of the worst, there’s a movement afoot to UnCloak the Kochs. Those John Birch Society Billionaires that want to bring down social security have been taking up some virtual ink in left blogistan. Here’s something from the New York Observer: ‘7 Ways the Koch Bros. benefit from Corporate Welfare’.
Now that we’ve heard about their charitable giving, David’s 240-foot mega-yacht and role as patrons of the Tea Party movement, it’s time to ask a more serious question: How libertarian are they?
The short answer…not very.
Charles and David Koch, the secretive billionaire brothers who own Koch Industries, the largest private oil company in America, have spent millions bankrolling free-market think tanks and pro-business politicians in order, as David Koch has put it, “to minimize the role of government, to maximize the role of private economy and to maximize personal freedoms.” But a closer look at their dealings reveals that for the past 35 years the brothers have never shied away from using government subsidies to maximize their own profits, even while endeavoring to limit government spending on anything else.
These guys are a veritable bankroll for so-called think tanks that spout more tank than think. Some one should let them know that their businesses are hardly shining examples of a free market. These guys are card carrying members of the crony capitalist set.
In 1977, Charles Koch founded the Cato Institute, an influential libertarian think tank, with the aim of injecting free-market ideas into the mainstream. The Kochs would go on to establish and fund a vast network of overlapping think tanks, institutes, foundations, media outlets, and lobby groups that would vilify centralized government and promote laissez-faire capitalism as the only route to economic prosperity. The Mercatus Center, Americans for Prosperity, Reason Magazine, the Federalist Society and the Heritage Foundation are just a few of the right-wing organizations that run on Koch cash today.
David Dayen has a post up at FDL about protests organized to protest these bloated trust fund babies and their plutocratic friends. These guys are manufacturers of stupidity like climate change denial. Common Cause organized the protest.
After a litany of speakers – including Jim Hightower, Rick Jacobs of the Courage Campaign, and Common Cause President and former Illinois Congressman Bob Edgar, the entire group of protesters moved to the setup across the street from the resort. Police helicopters buzzed overhead. After a while, the police agreed to shut down Bob Hope Drive, and the protesters streamed across the street and directly in front of the resort, just a few inches away from the phalanx of riot cops. The usual protest chanting and raising of banners ensued. More cops were brought in, traipsing over the flower beds. And 25 protesters were taken away in a paddy wagon. The protests were generally peaceful, and the police professional.
The protesters generally decried the Koch Brothers’ influence over American democracy, in particular their use of the Citizens United ruling to spend corporate money in elections. Koch Industries’ funding of climate denialism and other conservative causes was on the minds of the protesters as well.
You can read some of the dirty deeds that pay others to do dirt cheap in the NYT article on the Tea Party targets. Here’s the list of who is in their ‘surveyor’ marks for the 2012 Senate elections. Evidently, Indiana Senator Richard Lugar is one of the guys they’re after. Here’s some more making their unclean, impure list.
In Maine, there is already one candidate running on a Tea Party platform against Senator Olympia J. Snowe. Supporters there are seeking others to run, declaring that they, too, will back the person they view as the strongest candidate to avoid splitting their vote. In Utah, the same people who ousted Senator Robert F. Bennett at the state’s Republican convention last spring are now looking at a challenge to Senator Orrin G. Hatch.
The early moves suggest that the pattern of the last elections, in which primaries were more fiercely contested than the general election in several states, may be repeated.
They also show how much the Tea Party has changed the definition of who qualifies as a conservative. While Ms. Snowe is widely considered a moderate Republican, Mr. Hatch is not. Mr. Lugar, similarly, defines himself as a conservative. He argues that he has consistently won praise from small-business groups, supported a balanced budget amendment and pushed for a reduction in farm subsidies and the closing of agricultural extension offices as part of an effort to reduce unnecessary spending — all initiatives that fall under the smaller government rubric of the Tea Party.
Guess that means there’s more bat shit crazy folks waiting in the wing to mangle and destroy American history and the constitution. Do you suppose we’ll see any more “I am not a witch” ads?
So, last week I posted something sent to me from BostonBoomer about the rise in violent attacks in prisons due to cost cutting measures and outsourcing to private firms. BB’s found another more horrible link. CNN reports the death of a correctional officer in Washington who had made a complaint to her union steward that she feared for her safety.
Jayme Biendl, 34, was discovered late Saturday night after workers at the Monroe Correctional Complex noticed her keys and radio were missing, according to a statement from the Washington State Department of Corrections. Staff at the prison immediately went to where she worked and found her unresponsive, it said.
Emergency responders declared Biendl dead at the scene shortly before 11 p.m. PT, the department said.
She had been strangled, according to Chad Lewis, a department spokesman.
So, it’s monday morning, I spent all weekend rewriting an article on Venture Capital. As long as you don’t have anything to say about that, because I’ve frankly reached my fill on the subject , I’d like to know …