This post was published at jsnip4
This post was published at jsnip4
The growth of US military power has rarely, if ever, been the result of legitimate concerns about defensive strategy, let alone about the national welfare. Instead, it’s more often a consequence of a waste, corruption, and imperial ambition that together have produced the modern military-industrial complex. This history receives some well-deserved attention in Paul Pedisich’s book Congress Buys a Navy: Politics, Economics, and the Rise of American Naval Power, 1881-1921, which offers an in-depth look at the history of Congressional involvement with the US Navy. I’ve written a more general review of the book for those interested (here), but in this post I want to focus on some of the economic implications of US naval history over these four decades.
The main emphasis of the book is on a series of Congressional battles over appropriations for the Navy, and how these disputes influenced its growth and change. This process, Pedisich argues, was not driven by strategic questions of national security, but by a wide range of political interests. Pedisich provides a wealth of information about Congressional voting blocs and committees, as well and the personal and professional ties between politicians, the Navy, and the war industries. These consisted most often of conventional rent-seeking: members of Congress wanted appropriations channelled to their own constituencies, and the Navy’s budget provided an excellent opportunity for those states that stood to gain from the Congressional spoils system (pp. 28-29, and throughout).
This post was published at Ludwig von Mises Institute on Jan 23, 2017.
Inequality vs Inequality
There is inequality and inequality.
The first is the inequality people tolerate, such as one’s understanding compared to that of people deemed heroes, say Einstein, Michelangelo, or the recluse mathematician Grisha Perelman, in comparison to whom one has no difficulty acknowledging a large surplus. This applies to entrepreneurs, artists, soldiers, heroes, the singer Bob Dylan, Socrates, the current local celebrity chef, some Roman Emperor of good repute, say Marcus Aurelius; in short those for whom one can naturally be a ‘fan’. You may like to imitate them, you may aspire to be like them; but you don’t resent them.
The second is the inequality people find intolerable because the subject appears to be just a person like you, except that he has been playing the system, and getting himself into rent seeking, acquiring privileges that are not warranted -and although he has something you would not mind having (which may include his Russian girlfriend), he is exactly the type of whom you cannot possibly become a fan. The latter category includes bankers, bureaucrats who get rich, former senators shilling for the evil firm Monsanto, clean-shaven chief executives who wear ties, and talking heads on television making outsized bonuses. You don’t just envy them; you take umbrage at their fame, and the sight of their expensive or even semi-expensive car trigger some feeling of bitterness. They make you feel smaller.
There may be something dissonant in the spectacle of a rich slave.
The author Joan Williams, in an insightful article, explains that the working class is impressed by the rich, as role models. Michle Lamont, the author of The Dignity of Working Men, whom she cites, did a systematic interview of blue collar Americans and found present a resentment of professionals but, unexpectedly, not of the rich.
It is safe to accept that the American public -actually all public -despise people who make a lot of money on a salary, or, rather, salarymen who make a lot of money. This is indeed generalized to other countries: a few years ago the Swiss, of all people almost voted a law capping salaries of managers . But the same Swiss hold rich entrepreneurs, and people who have derived their celebrity by other means, in some respect.
This post was published at Zero Hedge on Dec 28, 2016.
Why are so many men in their prime working years unemployed? The Obama administration would have us believe that unemployment is low in this country, but that is not true at all. In fact, one author quoted by NPR says that ‘it’s kind of worse than it was in the depression in 1940′. Most Americans don’t realize this, but more men from ages 25 to 54 are ‘inactive’ right now than was the case during the last recession. We have millions upon millions of strong young men just sitting around doing nothing. They aren’t employed and they aren’t considered to be looking for employment either, and so they don’t show up in the official unemployment numbers. But they don’t have jobs, and nothing the Obama administration does can eliminate that fact.
According to NPR, ‘nearly 100 percent of men between the ages of 25 and 54 worked’ in the 1960s.
In those days, just about any dependable, hard working American man could get hired almost immediately. The economy was growing and the demand for labor was seemingly insatiable.
But today, one out of every six men in their prime working years does not have a job…
In a recent report, President Obama’s Council of Economic Advisers said 83 percent of men in the prime working ages of 25-54 who were not in the labor force had not worked in the previous year. So, essentially, 10 million men are missing from the workforce.
‘One in six prime-age guys has no job; it’s kind of worse than it was in the depression in 1940,’ says Nicholas Eberstadt, an economic and demographic researcher at American Enterprise Institute who wrote the book Men Without Work: America’s Invisible Crisis. He says these men aren’t even counted among the jobless, because they aren’t seeking work.
This post was published at The Economic Collapse Blog on September 7th, 2016.
The election 2016 is a catalyst-free contest that has been shaped by the political parties attempts to understand the mind of the electorate, while the electorate has been struggling to make up its mind about what the pivotal issues of the election should be. Compounded by the epic gaffes of the reality-skipping life-time politicos (take that Enda Kenny pill, ye old comedian) and we had an election devoid of real ideas and ideals as far as the mainstream parties go.
Harder Left and genuine Centre-Left (e.g. Social Democrats and majority of the independents) have attempted to focus the elections on the issues relating to the lagging nature of economic recovery in the domestic sectors – an issue that, traditionally, has been the core breadwinner for the Labour. However, having completely abandoned any pretence at ideals-based, principles-rich politics, the Labour has thrown its weight behind the FG-led attempt to steer plebiscite into a debate about a general (and to majority of us abstract) notion of policy continuity and stability of governance as the panacea for the ‘continued recovery’. Topical issues and specific policies aimed at actually producing a real recovery that is not stuck in the canyons of tax arbitrage by the MNCs became the victims of this absurd departure from the world of the living into the world of FG/LP.
Even shielded from competition by being effectively the only Right-of-Centre (in the Politics of Boggerville 101-style of Enda Kenny and Michael Noonan) party, FG has managed to squander the election by such a massive margin, one has to wonder how on earth can the party continue to pretend to represent anyone other than a handful of clientilist farmers, rent-seeking businessmen and a bunch of conservative civil servants.
This post was published at True Economics on Constantin Gurdgiev /March 1, 2016.
February 5, 2016
Hiring at restaurants, hotels and other leisure and hospitality sector venues slowed markedly last year in metro areas that saw big minimum-wage hikes, new Labor Department data show.
Wherever cities implemented big minimum-wage hikes to $10 an hour or more last year, the latest data through December show that job creation downshifted to the slowest pace in at least five years.
Liberals fighting for a dramatic increase in the minimum wage have insisted that there would be a negligible impact on job creation. Though the data are preliminary and overly broad, Washington D. C., Oakland, Los Angeles, San Francisco, Seattle and Chicago seem to be finding out that the reality isn’t so benign.
A slowdown in job growth can fly below the radar, at least for those who aren’t seeking low-wage work. But the risk of raising the minimum wage too high became fairly obvious last month, whenWal-Mart (WMT) bolted from Oakland and Los Angeles and scrapped plans for two stores in low-income areas of D. C.
The big shortcoming in the available data for 5 of the 6 cities is that they cover broad metro areas, far beyond the city limits where wage hikes took effect. Still, the uniform result of much slower job growth in the low-wage leisure and hospitality sector, even as the pace of job gains held steady in surrounding areas, sends a pretty powerful signal.
This post was published at David Stockmans Contra Corner By Jed Graham Investor’s Business Daily /.
September 12, 2015
The Chinese Jngj qj, wirtschaftswunder, keizai no kiseki, milagro econmico or whatever you want to call is neither a miracle nor distinctly Chinese. A basket case like Argentine managed to pull off a similar feat, albeit with more volatility, over a 42 year timespan beginning in 1870. Germany did even better between 1945 and 1970. And Japan had its own miracle from 1950 to 1990.
Giving the Beijing consensus, whatever that may be, credit for creating an unprecedented economic miracle is nave and have led pundits all over the world to make disastrously optimistic forecasts for what the future will bring. Commodity producers as far away as Latin America, Africa and Australia have poured money into capacity expansions with a very simple strategy;can’t sell it? Dump it in China, they’ll take it. We have seen this, admittedly expressed more eloquently, first hand.
China is several countries centrally governed by a ruthless power elite with vested interest in maintaining the status quo. To expand their own power, wealth and status all they had to do was open up their borders to foreign capital and supplying it with slave labour. It is not very difficult, even a communist can figure it out. However, as the economy evolved it needed investments in infrastructure which was easily funded by stealing workers savings (financial repression on a scale the Yellen’s and Draghi’s of the world can only dream off) and funnelling it into state owned enterprises with lucrative government contracts. They didn’t even have to pay lip service to property rights as all property was and still is held by the state. In short, this stage of economic development involves resource allocation from the centre. As Michael Pettis argues in The Four Stages of Chinese Growthcentralised capital allocation gets a tremendous support from the rent-seeking elite and are thus easy to implement.
This post was published at David Stockmans Contra Corner BY EUGEN VON BHM-BAWERK Bawerk.net /.
As documented in Parts 1-3, the Fed has generated a $50 trillion financial bubble since Alan Greenspan took the helm in August 1987. After 27 years, honest price discovery has been destroyed, thereby reducing the nerve centers of capitalism – -the money and capital markets – -to little more than gambling casinos.
Accordingly, speculative rent-seeking in the financial arena has replaced enterprenurial innovation and supply side investment and productivity as the modus operandi of the US economy. This has resulted in a severe diminution of main street growth and a massive redistribution of windfall wealth to the tiny share of households which own most of the financial assets. Warren Buffett’s $73 billion net worth is the poster boy for this untoward state of affairs.
The massive and systematic falsification of asset prices which lies at the heart of this deformation of capitalism is a direct and unavoidable consequence of monetary central planning. That is, the pursuit of Keynesian business cycle management and stimulus through central bank interest rate pegging and massive monetization of existing public debt and other securities – -especially since the latter has no purpose other than to artificially goose the price of bonds and lower their yields; and also via other indirect methods of financial asset levitation such as the Greenspan/Bernanke/Yellen doctrine of wealth effects and the implicit central bank ‘put’ which underpins the economics of buy-the-dip speculators.
As previously indicated, the Keynesian bathtub model of a closed, volumetrically driven economy is a throwback to specious theories about the inherent business cycle instabilities of market capitalism that originated during the Great Depression. These theories were wrong then, but utterly irrelevant in today’s globally open and technologically dynamic post-industrial economy.
This post was published at David Stockmans Contra Corner on June 12, 2015.
“When an industry becomes necessary for the proper functioning of our society, it wields an unhealthful amount of power. Specifically, it is in the perfect position to engage in what economists call ‘rent seeking.’ (monopolies on ‘essentials’ are the dream of our modern capitalists, and healthcare and Banking are prime examples – Jess)
Generally speaking, businesses earn profits in one of two basic ways. The first is by providing goods and services more productively than others and selling them at a price people are willing to pay. The second is by seeking rents.
‘Rent,’ in the economic sense, refers broadly to any excess benefits that people and businesses receive simply because they have power over something that others need. Patents are a form of rent, as are cable-TV monopolies.
For economists, rent-seeking is everywhere, and is a common way that economies go awry. Crudely speaking, productivity enhancement is good, because it makes society richer over all. Equally crudely, rent-seeking is bad, because it makes the people who are already rich even richer.
Rent-seeking tends to be a force against innovation and for stagnancy, in large part because its focus is on the past – on maintaining power and influence gained long ago, often at the expense of innovation.
Businesses built around rent-seeking don’t try to increase the size of the pie; they just want to make sure they get a bigger slice. (If a company doesn’t seem to care about your opinion of it as a customer, there’s a good chance that it is seeking rents.)”
Adam Davidson, Wall Street Using Dodd-Frank Against Itself
The biggest problem we have is that the President and the Congress have no moral courage. If we had only a portion of the resolve to reform that led the New Deal, we would not have the threat of another financial crisis hanging over our heads.
This post was published at Jesses Crossroads Cafe on 01 JUNE 2015.
We can heartily praise Alexis Tsirpras for calling bull on the destructive puzzle palace economics thrust on his country by the hypocrites and liars who rule from Brussels. And his finance minister designate, economist Yanis Varoufakis, is surely on the right track when he targets the rent-seeking bankers, big businesses and media operators who have plundered the Greek state for decades.
Indeed, his pledge that ‘we are going to destroy the Greek oligarchy system’ should resonate throughout the length and breadth of Europe. After all, what has smothered growth, enterprise and hope in the EU is exactly the kind of crony capitalist corruption of economic life and exploitation of the state that had already wrecked the Greek economy – -even before the Trioka administered the coup de’ grace.
So the Syriza Shock is an inflection point. It represents the beginning of the end of unimpeded rule by the elitist apparatchiks who dominate the central banks and the economic policy machinery of Brussels, Washington and London. Overwhelmingly, their half-baked Keynesian and statist solutions have propped up the giant banks, fueled stupendous inflation of financial assets and enabled an era of obscene gambling windfalls to the very rich which is unprecedented in modern history.
But what centrally administered financialization has not done is relieve the middle and working classes from a relentless assault on their living standards or a growing recognition that their voices have been totally muted in the halls of government. So it was only a matter of time before a revolt of the ‘demos’ would materialize; and, needless to say, what could be more supremely fitting than that the insurrection has started in the very land where the demos first found its voice?
This post was published at David Stockmans Contra Corner by David Stockman ‘ January 26, 2015.