economics

Home/Tag: economics

Boomer legacy.

[W]e often attempt to see forms of institutional racism as rooted purely in cultural attitudes rather than political institutions and economic arrangements that favor finance. In city after city run by Democratic mayors, many of whom were elected on platforms involving racial justice, police violence is endemic. Ross Barkan explained that in New York City, the reason is economic. The NYPD is a massive paramilitary force, and it exists in its current form because to protect the main industry of the city, which is property value appreciation. New York used to have a mixed economic base, with manufacturing, shipping, transportation, and finance. The Garment District was actually a place people made clothes. But in the 1980s and 1990s all that got ripped out in favor of making the city dependent on the appreciation of financial assets, most evidently real estate. A finance-dependent political economy with rampant inequality is dependent on brutal security measures, regardless of how tolerant the culture is.

The inability to reckon with the political economy choices we’ve made that result in social dysfunction is in my view a result of the cynicism of the [1960s and 70s] counterculture. Proponents in that world are openly and nakedly greedy, and they justify their libertine activities using the language of tolerance, of progress, often techno-utopian flavored. That is certainly the politics of Wall Street, Silicon Valley, and McKinsey, and both political party elites. It’s why Burning Man is what it is, a seeming place of creativity and artistic license, with a subtext of billionaires being self-righteous libertine jerks. It’s why fear is now rampant among anyone who works for a living, either doctors, engineers, daycare workers, cheer coaches, whoever. That’s how we structure our economy, with various layers of coercion.

Matt Stoller on being socially liberal, economically conservative.

2020-08-28T08:52:14+10:0019th September, 2020|Tags: economics, politics|

Inequitable.

I described a private equity fund as “a large unregulated pool of money run by financiers who use that money to invest in, lend to, and/or buy companies and restructure them.” That’s a formal definition, but it’s also a highly ideological social movement that comes out of the modest conglomerate craze of the 1960s and then was transformed by the junk bond mania of the 1980s. Private equity proponents believe that they are removing sloth and waste out of the corporate sector, bringing innovation and productivity to American industry. It is of course a nonsense claim on the merits. Private equity is in fact “a political movement whose goal is extend deep managerial controls from a small group of financiers over the producers in the economy,” yet one more rhetorical cover for aristocracy in the long arc of human history.

Matt Stoller on the new aristocracy.

If you don’t know about private equity firms, how they operate, and what they do to businesses on an individual level and society in general… I mean, on the one hand that’s intentional. But, also: you totally should do some digging to find out.

2020-08-20T11:55:44+10:0025th August, 2020|Tags: economics, politics|

Planned planned obsolescence.

During Depression-era America, an influential book published 1932 advocated “creative waste”—the idea that throwing things away and buying new things can fuel a strong economy. One advocate, Bernard London, wrote a paper in 1932, “Ending the Depression Through Planned Obsolescence,” in which he called on the federal government to print expiration dates on manufactured goods. “Furniture and clothing and other commodities should have a span of life, just as humans have,” he wrote. “They should be retired, and replaced by fresh merchandise.”

Manufacturers purposely made stuff that broke or wore out, so consumers would have to buy the stuff again. Echoes of this practice persist. In shopping for new tires, for instance, drivers pay more for those “rated” to last longer.

G. Pascal Zachary on the disposable society.

If you’ve ever heard old people griping about how things “just don’t last as long as they used to”… actually, yes. There’s some truth to that. And yes, it’s intentional.

2020-08-19T08:55:53+10:0022nd August, 2020|Tags: economics|

Political illiteracy.

Rising student loan debt has ushered in a golden age of financial literacy programs aimed at students. But as the irrepressible journalist and expert on the failures of the personal finance industry Helaine Olen writes in 2012’s Pound Foolish, the problem with the rise of financial literacy is that “no one has been able to prove financial literacy actually works.”

[…]

If financial literacy served its supposedly intended purpose, it would encourage people to use fewer banking products and probably never take out a loan, including for higher education; it might even encourage students to drop out of college or start a mass mobilization to bring down the untenable cost of tuition. But browsing iGrad’s offerings reveals this is the opposite of the message. Under the website’s “topics” are six subheadings: Spending Less, Managing Your Debt, Repaying Student Loans, Types of Aid, Job Search, and Resume and Cover Letters. The message is clear: cut back on wasteful spending––hey, maybe even take out more loans––but whatever you do, don’t cut back on your loan payments!

Robin Kaiser-Schatzlein knows the financial is political.

2020-05-20T13:14:48+10:0027th July, 2020|Tags: economics, politics|

Trade of the free.

Ever since the time of David Ricardo, the 18th-century economist who developed the idea of comparative advantage, it has been well-known that not everyone benefits when trade barriers fall. If the U.S. is relatively good at making shoes and Japan is relatively good at making blue jeans, American jeans makers and Japanese shoe companies have good reason to fear a trade agreement between the two countries.

This becomes especially dangerous when one country specializes in cheap labor. [Economists suspect] that this is what happened with China — the addition of a billion workers to the global labor force was a bonanza for the rich, who could buy cheaper consumer goods, and a disaster for the middle class in developed nations. As Bivens noted, the U.S. has gradually shifted toward trading with poorer and poorer countries — good for global development but perilous for many American workers.

Noah Smith on winners and losers.

The tl;dr of this article is that, while economics are starting to publicly admit that free trade’s losses often outweigh its “gains”, the discipline has no idea on a) what to do about it, or b) what to replace it with. So, y’know. Thanks for that, free market ideologues, I guess.

2020-02-14T08:39:09+11:0014th June, 2020|Tags: economics|

Cost-shifting.

No one believes every worthy cause should be funded by the government so that private charity becomes redundant. And it’s true the federal government partially subsidises donations by making them tax-deductible. But where do you draw the line between what the government should cover and what can be left to the generosity – or otherwise – of private citizens?

The more I think about it, the more I realise that, as part of their commitment to Smaller Government and lower taxes, governments have been quietly shifting the dividing line between what the government pays for and what should depend on charity.

Ross Gittins on who pays.

To be honest, I kinda do believe in making private charity redundant, so… there’s that.

2020-02-11T10:19:42+11:009th June, 2020|Tags: economics, politics|
Go to Top