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Post: Picadillo on rice -- The Riot of Truth Continues on The Progress Diner Radio Show
Link: http://progress.enlightenradio.org/2018/12/picadillo-on-rice-riot-of-truth.html
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Saturday, December 8, 2018
Robert Reich: Break Up Facebook (and Google, Apple, and Amazon)
Moderator: Why are two amazons better than one? Why is scale bad? I doubt breaking up these enterprises will raise wages or benefits for their employees, or workers generally. Bernie's $15 campaign against Amazon had more effect because Amazon IS SO LARGE. None of them seem to be suffering the usual effects of monopoly, a lack of innovation. At least not yet.
I think the remedy, if there is one, for too big to fail corps is additional public oversight rights,at the Director, Stockholder (Stakeholder) levels, in exchange for the greater public health safety security and economic risks associated with large-, global-scaled criminal or dangerous conduct, made too powerful to supervise by Citizens United and rising inequality, especially in political and legal access.
Too big to fail corps, or strangle holds on public information and media, require more 'socialization' remedies, not more privatized competition. This should not trouble Jeff bezos all that much: Amazon Web services itself bills its services practically as public goods, as "things everyone that computes has to do" that just gets in the way of more user innovation. Pretty much like a Road, or Bridge. More socialism (but not more than we can swallow), Less capitalism (but enough to persist development in scarce goods and services). More free and cheap stuff to live -- abundance is the ultimate benefit of scale.. More opportunities to perform services for each other.
Reintroduce the golden rule in resolving commercial relations between nations and peoples, and, in a democracy, social classes: "Do not demand of your partner concessions you would not yourself accept in their position"
**************************************************
Robert Reich
Friday, December 7, 2018
Why Inequality Matters? [feedly]
Elegantly laid out by By Branko Milanovic - 06 December 2018
(I call him Branko the Blunt :) )
https://www.globalpolicyjournal.com/blog/06/12/2018/why-inequality-matters
This is the question that I am often asked and will be asked in two days. So I decided to write my answers down.
The argument why inequality should not matter is almost always couched in the following way: if everybody is getting better-off, why should we care if somebody is becoming extremely rich? Perhaps he deserves to be rich—or whatever the case, even if he does not deserve, we need not worry about his wealth. If we do that implies envy and other moral flaws. I have dealt with the misplaced issue of envy here (in response to points made by Martin Feldstein) and here (in response to Harry Frankfurt), and do not want to repeat it. So, let's leave envy out and focus on the reasons why we should be concerned about high inequality.
The reasons can be formally broken down into three groups: instrumental reasons having to do with economic growth, reasons of fairness, and reasons of politics.
The relationship between inequality and economic growth is one of the oldest relationships studied by economists. A very strong presumption was that without high profits there will be no growth, and high profits imply substantial inequality. We find this argument already in Ricardo where profit is the engine of economic growth. We find it also in Keynes and Schumpeter, and then in standard models of economic growth. We find it even in the Soviet industrialization debates. To invest you have to have profits (that is, surplus above subsistence); in a privately-owned economy it means that some people have to be wealthy enough to save and invest, and in a state-directed economy, it means that the state should take all the surplus.
But notice that throughout the argument is not one in favor of inequality as such. If it were, we would not be concerned about the use of the surplus. The argument is about a seemingly paradoxical behavior of the wealthy: they should be sufficiently rich but should not use that money to live well and consume but to invest. This point is quite nicely, and famously, made by Keynes in the opening paragraphs of his "The Economic Consequence of the Peace". For us, it is sufficient to note that this is an argument in favor of inequality provided wealth is not used for private pleasure.
The empirical work conducted in the past twenty years has failed to uncover a positive relationship between inequality and growth. The data were not sufficiently good, especially regarding inequality where the typical measure used was the Gini coefficient which is too aggregate and inert to capture changes in the distribution; also the relationship itself may vary in function of other variables, or the level of development. This has led economists to a cul-de-sac and discouragement so much so that since the late 1990s and early 2000s such empirical literature has almost ceased to be produced. It is reviewed in more detail in the Section 2 of this paper.
More recently, with much better data on income distribution, the argument that inequality and growth are negatively correlated has gained ground. In a joint paper Roy van der Weide and I show this using forty years of US micro data. With better data and somewhat more sophisticated thinking about inequality, the argument becomes much more nuanced: inequality may be good for future incomes of the rich (that is, they become even richer) but it may be bad for future incomes of the poor (that is, they fall further behind). In this dynamic framework, growth rate itself is no longer something homogeneous as indeed it is not in the real life. When we say that the American economy is growing at 3% per year, it simply means that the overall income increased at that rate, it tells us nothing about how much better off, or worse off, individuals at different points of income distribution are getting.
Why would inequality have bad effect on the growth of the lower deciles of the distribution as Roy and I find? Because it leads to low educational (and even health) achievements among the poor who become excluded from meaningful jobs and from meaningful contributions they could make to their own and society's improvement. Excluding a certain group of people from good education, be it because of their insufficient income or gender or race, can never be good for the economy, or at least it can never be preferable to their inclusion.
High inequality which effectively debars some people from full participation translates into an issue of fairness or justice. It does so because it affects inter-generational mobility. People who are relatively poor (which is what high inequality means) are not able, even if they are not poor in an absolute sense, to provide for their children a fraction of benefits, from education and inheritance to social capital, that the rich provide to their offspring. This implies that inequality tends to persist across generations which in turns means that opportunities are vastly different for those at the top of the pyramid and those on the bottom. We have the two factors joining forces here: on the one hand, the negative effect of exclusion on growth that carries over generations (which is our instrumental reason for not liking high inequality), and on the other, lack of equality of opportunity (which is an issue of justice).
High inequality has also political effects. The rich have more political power and they use that political power to promote own interests and to entrench their relative position in the society. This means that all the negative effects due to exclusion and lack of equality of opportunity are reinforced and made permanent (at least, until a big social earthquake destroys them). In order to fight off the advent of such an earthquake, the rich must make themselves safe and unassailable from "conquest". This leads to adversarial politics and destroys social cohesion. Ironically, social instability which then results discourages investments of the rich, that is it undermines the very action that was at the beginning adduced as the key reason why high wealth and inequality may be socially desirable.
We therefore reach the end point where the unfolding of actions that were at the first supposed to produce beneficent outcome destroys by its own logic the original rationale. We have to go back to the beginning and instead of seeing high inequality as promoting investments and growth, we begin to see it, over time, as producing exactly the opposite effects: reducing investments and growth.
-- via my feedly newsfeed
I had a crazy dream talkin to Mimke bloomberg
I am interested in the Michael Bloomberg presidential candidacy. My first question is: Has the labor movement, or the 'Bernie Sanders' constituency, broadly speaking -- my base, more or less :) -- got a deal to propose with Mr Bloomberg, a hard headed but pragmatic globalist billionaire liberal, on LABOR's REVIVAL as the effective, and most market oriented means of reversing the aggravated inequality tearing this country apart. and restoring a just distribution the shares of growth to labor AND capital? I ask the question in reference to Mr Bloomberg, who has a well documented financial and political record, as I would ask it reference to any representative, rational members of the billionaire class.
My (short) version of a deal:
I am not proposing a return to the 30's, Mr Bloomberg. I am proposing a certain shift in the adversarial stance of US labor laws, written in the 1930's and 1940's toward transforming labor organizations into quasi public institutions. These institutions can and should be principle conveyors in universalizing health care, and adjusting flexible workforces to the structural and retraining shifts mandated by both automation and globalization. The new world requires adaptation to rapid changes in work and family. Institutionalizing democratic, labor-based organizations as publicly accountable, self-administrators of much of the necessary transitions between jobs, careers, families and retirement could pave a new path in American competitiveness and economic justice for American workers.
It can enable the losers in these painful transitions to become winners. As quasi public institutions, as full partners in society, labors' own politics could become more parliamentary, and diverse, in its own ranks -- a challenge in the past, forced upon labor politics by the neverending war by corporations to destroy it.
Do we have grounds for discussion, Mr Bloomberg?
If we do not, if this path toward progressive social peace in IRRATIONAL to Mr Bloomberg, then what are we left to say to ANY of the billionaires?
Hillary's governing sensibilities are not far afield from Michael Bloomberg. She and Sanders were not able to join together on a ticket --- the surest path to Democratic Victory in 2018.
I doubt my deal above is far afield from Bernie. Can we make a deal, Mr Bloomberg --- we need a sweeping, far-reaching coalition that can make a major shift in direction for the country. We have see what failure to close a deal means. Are we talking, Mr Bloomberg???
John Case
Harpers Ferry, WV
Harpers Ferry, WV
The Enlighten Radio Player Stream,
Sign UP HERE to get the Weekly Program Notes.
Check out Socialist Economics, the Enlighten Radio website
Tyler Cowen: Why Brexit is so important [feedly]
I usually don't take Tyler Cowen (R-libertrian economist and author of Blog/Zine Marginal Revolution) seriously despite his being clever at times.
AND, the UK is 1/5 the size of the US so the UK crisis is not identical to the nationalist expressions -- or its targets -- in the Trumpian US. Nonetheless there is one striking similarity being "tested" --- CAN ESTABLISHED DEMOCRACIES MANAGE THE TRANSFORMATIONS AND INEVITABLE (?) LOSS OF SOVEREIGNTY UNLEASHED BY GLOBALIZATION?????
http://marginalrevolution.com/marginalrevolution/2018/12/why-brexit-is-so-important.html
In this dilemma, I think of U.K. citizens as a kind of stand-in for the human race. Per capita income and education in the U.K. are well above the global average and, more important, Great Britain has one of the most firmly established democratic traditions in the world. So if the U.K. cannot get this decision right, it's pretty gloomy news for all of us. I am reminded of the scene in Ingmar Bergman's "The Seventh Seal," where the traveling knight has to play a game of chess against the figure of Death, and his life will be spared if he wins…
Paul Krugman opined recently that Brexit would likely cost the U.K. about 2 percent of GDP, a fair estimate in my view. But that is not the only thing at stake here. Humanity is on trial — more specifically, its collective decision-making capacity — and it is the U.K. standing in the dock.
I'll be glued to my seat, watching.
-- via my feedly newsfeed
Bernstein: Another solid jobs report, even with a slightly slower trend in payrolls [feedly]
Another solid jobs report, even with a slightly slower trend in payrolls
http://jaredbernsteinblog.com/another-solid-jobs-report-even-with-a-slightly-slower-trend-in-payrolls/
-- via my feedly newsfeed
http://jaredbernsteinblog.com/another-solid-jobs-report-even-with-a-slightly-slower-trend-in-payrolls/
Payrolls were up 155,000 last month, and the unemployment rate held steady at 3.7 percent, close to a 50-year low. Hourly wages were up by 3.1 percent over the past year, the same rate as last month and tied for a cyclical high. Though another in a string of solid job reports, the pace of job gains downshifted a bit compared to last month's report, average weekly hours ticked down slightly, and both the job and wage numbers came in below market expectations. That said, monthly noise, weather and other one-off effects (winter storms, fires) can influence monthly data, and the underlying trend remains that of a labor market closing in on full employment.
To better glean the underlying trend of job growth, our monthly smoother looks at 3, 6, and 12-month averages of monthly job growth. The 3-month average of 170,000 is slightly below that of the 6- and 12 -month averages, suggestive of a slower trend in monthly payroll gains. However, this pattern is to be expected as the labor market closes in on full-capacity. In fact, the 3-month pace (170K), if sustained, is easily strong enough to put further downward pressure on the unemployment rate and thus, upward pressure on wage growth. Moreover, as I note below, I suspect real (inflation-adjusted) wage growth will soon accelerate due to declining oil prices.
Wage growth held at its cyclical high reached last month of 3.1 percent, year-over-year, a sign that tight labor markets are giving workers a bit more bargaining clout. The figures plot nominal gains for all private sector workers and for middle-wage workers (blue-collar factory workers and non-managers in services). The six-month moving average shows the recent acceleration from about 2.5 percent through 2017 to around 3 percent this year.
But what about real wage growth? Over the near term, real wages and the price of oil tend to be highly correlated. That is, falling oil and gas prices lead to slower overall price growth, which raises real wage growth. That means we now have two factors helping to boost real wage growth: the tight labor market is generating faster nominal wage gains, and cheap oil is pushing up real gains. Though we do not yet know CPI inflation for November, my guess is that the price index is up about 2.2% over the past year. If that's correct, it means real hourly wages grew at a yearly rate of about 1 percent, the fastest pace of real wage gains since late 2016.
Other highlights from today's report:
–The closely watched "prime-age" (25-54) employment rate was unchanged at 79.7 percent. However, it was up 0.2 points for men and down slightly for women. Abstracting from the monthly blips, this series, especially for men, shows potential available labor supply, as the men's rate is still 1.6 points below its pre-recession peak (prime-age women have surpassed their peak).
–The black unemployment rate fell to 5.9 percent, tied for an all-time low, but the decline was accompanied by lower labor force participation, so it's not unequivocal good news. Also, these data are particularly noisy, month-to-month.
–Construction employment was up only slightly (5,000), possibly reflecting the slowdown in the interest-rate-sensitive building sector.
–Government employment has been flat in recent months, driven largely by state-level declines, possibly reflect state budget constraints, particularly in education.
Finally, turning to the Fed, according to recent news reports, the central bank is considering downshifting its "normalization" campaign, meaning pausing between rate hikes more than they've heretofore been signaling. Today's report constitutes a supportive data point in that regard. Wage growth is growing but not quickly accelerating, and the trend pace of job gains is off its peak, as shown in the smoother. Most importantly, as the figure below reveals, even while unemployment remains well below the Fed's "natural rate" and wage growth has picked up, their key inflation gauge remains not merely well-anchored but, in its most recent print, slightly below target.
Given other recent headwinds, most notably the flattening of the yield curve and the fact that fiscal stimulus is scheduled to go neutral in terms of its growth contribution later next year, the cause for a pause continues to gain momentum.
-- via my feedly newsfeed
Wednesday, December 5, 2018
Jared Bernstein's letter to the New Democratc House
Jared Bernstein: An open letter to the new House Democrats
To: New House Dems
From: Jared, the Good
Re: Woohoo!!!
First, I can't tell you how glad I am to see you!
If I had known you were coming, I would've baked a cake! Instead, I've written you a memo on what looks most important from my humble political-economy corner.
But before we jump in, two points. First, rest assured that I know you do not represent an ideological monolith. In this divided country, that's a feature, not a bug. I welcome your diversity in all forms.
That said, after paying close attention to many of your campaigns, I believe you are united by a desire to get things done to help a lot of people who've been left behind. As I suspect you know, this stands in stark contrast to many who've come before you in recent years whose implicit message was "Washington is broken! Send me there, and I'll make sure it stays that way!"
Second, you've heard a lot about gridlock and how you won't be able to legislate anything. That may or may not be true — legislation is always possible in Washington up until the moment it isn't. But forget about all that. I strongly urge you to use your time to craft the best policies to meet the many deep challenges we face.
The rest of this note is intended to provide a brief glimpse of the lay of the land in those areas.
There's a reason the strong macroeconomy didn't help Republicans in the midterms.
Strong GDP growth and low unemployment are, of course, welcomed, but they don't provide health care. They don't guarantee decent employment opportunities in places hurt by global competition. They don't even guarantee real wage gains commensurate with overall growth, and, thanks to the Republicans' tax cut — which broke the linkage between strong growth and tax revenue — they don't lower deficits that should be falling now instead of rising.
ARTICLE CONTINUES BELOW
So, my first point is that growth is necessary but not sufficient to uplift Americans' living standards. Republicans have long argued otherwise; the growth itself would trickle down to average folks. If that were even the slightest bit true, we wouldn't be having this conversation. In fact, what's missing is the policy agenda that creates the connective tissue, linking growth to the incomes and opportunities of middle- and lower-income households.
Sticking with health care, the extent to which Republicans pretended to be the defenders of preexisting coverage suggests we've won that part of the argument. Yet one thing that's clear in today's non-representative politics is that you can win a policy argument and lose the policy. Republicans are actively pursuing a legal strategy to repeal the Affordable Care Act, and I urge you to pay close attention to the Trump administration's sabotage efforts, including skimpy coverage that exempts people from key consumer protections, along with attempts to destabilize the individual insurance market.
As far as folks who've been left behind even as the economy closes in on full employment, a reconnection agenda should include wage and employment policies. Some of your new colleagues have plans to raise the minimum wage, increase pro-work wage subsidies, and subsidize employment in places still not reached by the current expansion. Again, the Senate is unlikely to support these ideas, but the more the people learn about them, the better chance they'll have down the road.
During the midterms, it made sense not to mud-wrestle with President Trump on immigration. (I suggest you be guided by this George Bernard Shaw quote: "Never wrestle with a pig. You get dirty, and besides, the pig likes it.") But many of you are here to join that fight, and Democrats need to hone a coherent position. Two areas to start with are public charge and a path out of the shadows for undocumented workers here already.
By changing the rules that determine whether someone is deemed a "public charge," the Trump administration is pushing a radical policy that without congressional involvement would "effect major changes in the nation's immigration system, shifting it away from family-based immigration toward one restricted to people who are already relatively well-off or highly skilled when they enter the country." Again, people need to know about this, and the more public hearings and comments you can help generate on this unjust, self-destructive attack on legal immigrants — and, in some cases, their citizen children, who will be frightened from accessing public benefits as a result of this policy — the better.
Both "dreamers" and undocumented workers need immediate protection from deportation and a longer-term path to integration and citizenship. Note that neither of these groups invoke arguments about broader and more complicated immigration flow or border issues. They're here already, and we help neither them nor the rest of us by ignoring their status.
Finally, whether it's new ideas, such as infrastructure or job subsidies, or protecting much-valued old ones, like Social Security or Medicare, you're going to be told that there are simply no resources. Just look at the rising debt!
To which I say, just look at whose fingerprints are all over that rising debt. As noted, the tax cut broke the linkage between growth and improved fiscal balance. Democrats must repair the fiscal damage. One point of reference in this regard is rising wealth and profits, even as real workers' wages are just now catching a bit of a buzz. Closing the many wide loopholes that favor wealth and inheritances is both good fiscal policy and good politics in the age of Trump.
Also, let's see a strong push to fully fund the IRS, simply to collect what's owed. Each dollar spent on tax enforcement raises $18 in revenue, and recent budget cuts have reduced the tax agency's enforcement staff by 28 percent. Remember, this is not a fight about whether taxes should be raised or lowered; it's a "fair share" argument to, as I recently put it on this page, "block the gaming of the tax code by lawyered-up tax avoiders, to collect what is owed, and, in so doing, to fight back against the corrupt plutocracy that we saw in the Paul Manafort trial and ... in the dealings of the president."
There's a lot more for us to talk about, but you've already got a lot on your plate. So again, welcome fresh-women and -men! Settle in, fasten your seat belts, and let's roll!
--
Re: Woohoo!!!
First, I can't tell you how glad I am to see you!
If I had known you were coming, I would've baked a cake! Instead, I've written you a memo on what looks most important from my humble political-economy corner.
But before we jump in, two points. First, rest assured that I know you do not represent an ideological monolith. In this divided country, that's a feature, not a bug. I welcome your diversity in all forms.
That said, after paying close attention to many of your campaigns, I believe you are united by a desire to get things done to help a lot of people who've been left behind. As I suspect you know, this stands in stark contrast to many who've come before you in recent years whose implicit message was "Washington is broken! Send me there, and I'll make sure it stays that way!"
Second, you've heard a lot about gridlock and how you won't be able to legislate anything. That may or may not be true — legislation is always possible in Washington up until the moment it isn't. But forget about all that. I strongly urge you to use your time to craft the best policies to meet the many deep challenges we face.
The rest of this note is intended to provide a brief glimpse of the lay of the land in those areas.
There's a reason the strong macroeconomy didn't help Republicans in the midterms.
Strong GDP growth and low unemployment are, of course, welcomed, but they don't provide health care. They don't guarantee decent employment opportunities in places hurt by global competition. They don't even guarantee real wage gains commensurate with overall growth, and, thanks to the Republicans' tax cut — which broke the linkage between strong growth and tax revenue — they don't lower deficits that should be falling now instead of rising.
ARTICLE CONTINUES BELOW
So, my first point is that growth is necessary but not sufficient to uplift Americans' living standards. Republicans have long argued otherwise; the growth itself would trickle down to average folks. If that were even the slightest bit true, we wouldn't be having this conversation. In fact, what's missing is the policy agenda that creates the connective tissue, linking growth to the incomes and opportunities of middle- and lower-income households.
Sticking with health care, the extent to which Republicans pretended to be the defenders of preexisting coverage suggests we've won that part of the argument. Yet one thing that's clear in today's non-representative politics is that you can win a policy argument and lose the policy. Republicans are actively pursuing a legal strategy to repeal the Affordable Care Act, and I urge you to pay close attention to the Trump administration's sabotage efforts, including skimpy coverage that exempts people from key consumer protections, along with attempts to destabilize the individual insurance market.
As far as folks who've been left behind even as the economy closes in on full employment, a reconnection agenda should include wage and employment policies. Some of your new colleagues have plans to raise the minimum wage, increase pro-work wage subsidies, and subsidize employment in places still not reached by the current expansion. Again, the Senate is unlikely to support these ideas, but the more the people learn about them, the better chance they'll have down the road.
During the midterms, it made sense not to mud-wrestle with President Trump on immigration. (I suggest you be guided by this George Bernard Shaw quote: "Never wrestle with a pig. You get dirty, and besides, the pig likes it.") But many of you are here to join that fight, and Democrats need to hone a coherent position. Two areas to start with are public charge and a path out of the shadows for undocumented workers here already.
By changing the rules that determine whether someone is deemed a "public charge," the Trump administration is pushing a radical policy that without congressional involvement would "effect major changes in the nation's immigration system, shifting it away from family-based immigration toward one restricted to people who are already relatively well-off or highly skilled when they enter the country." Again, people need to know about this, and the more public hearings and comments you can help generate on this unjust, self-destructive attack on legal immigrants — and, in some cases, their citizen children, who will be frightened from accessing public benefits as a result of this policy — the better.
Both "dreamers" and undocumented workers need immediate protection from deportation and a longer-term path to integration and citizenship. Note that neither of these groups invoke arguments about broader and more complicated immigration flow or border issues. They're here already, and we help neither them nor the rest of us by ignoring their status.
Finally, whether it's new ideas, such as infrastructure or job subsidies, or protecting much-valued old ones, like Social Security or Medicare, you're going to be told that there are simply no resources. Just look at the rising debt!
To which I say, just look at whose fingerprints are all over that rising debt. As noted, the tax cut broke the linkage between growth and improved fiscal balance. Democrats must repair the fiscal damage. One point of reference in this regard is rising wealth and profits, even as real workers' wages are just now catching a bit of a buzz. Closing the many wide loopholes that favor wealth and inheritances is both good fiscal policy and good politics in the age of Trump.
Also, let's see a strong push to fully fund the IRS, simply to collect what's owed. Each dollar spent on tax enforcement raises $18 in revenue, and recent budget cuts have reduced the tax agency's enforcement staff by 28 percent. Remember, this is not a fight about whether taxes should be raised or lowered; it's a "fair share" argument to, as I recently put it on this page, "block the gaming of the tax code by lawyered-up tax avoiders, to collect what is owed, and, in so doing, to fight back against the corrupt plutocracy that we saw in the Paul Manafort trial and ... in the dealings of the president."
There's a lot more for us to talk about, but you've already got a lot on your plate. So again, welcome fresh-women and -men! Settle in, fasten your seat belts, and let's roll!
John Case
Harpers Ferry, WV
Harpers Ferry, WV
The Enlighten Radio Player Stream,
Sign UP HERE to get the Weekly Program Notes.
Check out Socialist Economics, the Enlighten Radio website
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