Showing posts tagged economics
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Businessmen like to style themselves as the defenders of the free market economy, but as Luigi Zingales, an economist at the University of Chicago Booth School of Business, argued, “Most lobbying is pro-business, in the sense that it promotes the interests of existing businesses, not pro-market in the sense of fostering truly free and open competition.
More from “The Self-Destruction of the 1 Percent”

(Source: The New York Times)

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It is no accident that in America today the gap between the very rich and everyone else is wider than at any time since the Gilded Age. Now, as then, the titans are seeking an even greater political voice to match their economic power. Now, as then, the inevitable danger is that they will confuse their own self-interest with the common good. The irony of the political rise of the plutocrats is that, like Venice’s oligarchs, they threaten the system that created them.
From “The Self-Destruction of the 1 Percent,” the most emailed article of the day on NYTimes.com. Great stuff.

C.E.O.’s and the Pay-’Em-or-Lose-’Em Myth

Good piece on an issue I’ve had strong feelings about for a few years now. What really galls me is that the very guys (and yes, they’re mostly guys) who have gamed the system to pad their own retirement accounts are the same types of people (ad hominem alert!) who are always touting the laws of supply & demand.

Executive compensation exactly flies in the face of supply & demand: Even if a successful CEO actually made good on a threat to leave and flew the coop, 95% of the time the board could replace him with someone less established — i.e., they could pay him much, much less — and the company would continue to perform just as well. (BTW, the same could not be said of, say, an NFL All-Pro or a TV star. Again, supply & demand.) The “peer group” the article refers to has essentially (d)evolved into an old boys’ club powered by an engine that runs on twisted, Romney-esque logic: We deserve it because we’re smart and we worked hard to get here. Ten thousand other boys fit that exact same description, boys. You may be good, but you’re not that special.

Related reading: Gladwell’s 2010 New Yorker piece on star-talent compensation, “Talent Grab.”

Dear Bankers: Thanks for Wrecking Our Lives...

Palpably poignant

Tax breaks that benefit the 26 best compensated CEOs could pay for 211,000 elementary school teachers.

think-progress:

Your fact of the day.

(Reblogged from think-progress)

CEO will receive a $44 million payout despite resigning on his first day

motherjones:

think-progress:

Nice work if you can get it.

We quit humanity.

(Reblogged from motherjones)
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Basically, the Republican strategy for the past three years has been this:

1. Do everything humanly possible to prevent the economy from recovering.

2. Wait for 2012.

3. Run a campaign focused on the fact that the economy is lousy.

Yep, pretty much.

(Source: Mother Jones)

(Reblogged from motherjones)
theatlantic: The Funniest Graph About Why the Euro Is Totally Doomed If you spun a globe and stopped your finger 12 times on 12 random countries, they just might make more sense for a monetary union than the euro zone. That’s the conclusion from this awesomely clever chart showing the difficulty, and maybe impossibility, of the euro experiment. Here is what this chart shows. Compared across more than 100 factors measured by the World Economic Forum Global Competitiveness Report, from corruption to deficits, JP Morgan analyst Michael Cembalest calculates that the major countries on the euro are more different from each other than basically every random grab bag of nations there is, including: the make-believe reconstituted Ottoman Empire; all the English speaking Eastern and Southern African countries; and all countries on Earth at the 5th parallel north.And here is your tweetable fact: A monetary union might make more sense for every nation starting with the letter “M” than it does for the euro zone.  Read more. Hilarious. View high resolution

theatlantic:

The Funniest Graph About Why the Euro Is Totally Doomed

If you spun a globe and stopped your finger 12 times on 12 random countries, they just might make more sense for a monetary union than the euro zone. 

That’s the conclusion from this awesomely clever chart showing the difficulty, and maybe impossibility, of the euro experiment.

Here is what this chart shows. Compared across more than 100 factors measured by the World Economic Forum Global Competitiveness Report, from corruption to deficits, JP Morgan analyst Michael Cembalest calculates that the major countries on the euro are more different from each other than basically every random grab bag of nations there is, including: the make-believe reconstituted Ottoman Empire; all the English speaking Eastern and Southern African countries; and all countries on Earth at the 5th parallel north.

And here is your tweetable fact: A monetary union might make more sense for every nation starting with the letter “M” than it does for the euro zone. 

Read more.


Hilarious.

(Reblogged from theatlantic)
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The primaries have been great for the economy. Dimwitted billionaires are dumping money they don’t need into the campaigns of people who can’t win, providing much-needed jobs for ad-writers, poll-takers and yard-sign manufacturers.

Do you remember, at the depth of the recession, when Keynesians kept saying that we could jump-start the recovery by just paying a whole bunch of people to dig holes and fill them back in? This is exactly the same thing! Keep going, Republicans!

Gail Collins, in today’s Times
I like how Earth isn’t even rated 1.0. The question is, Did it used to be? theeconomist: Daily chart: life beyond Earth. A new index scores planetary bodies on their suitability for life. Unsurprisingly, Earth tops the list, but Titan, a Saturnian moon, takes the second spot ahead of Mars. View high resolution

I like how Earth isn’t even rated 1.0. The question is, Did it used to be?

theeconomist:

Daily chart: life beyond Earth. A new index scores planetary bodies on their suitability for life. Unsurprisingly, Earth tops the list, but Titan, a Saturnian moon, takes the second spot ahead of Mars.

(Reblogged from theeconomist)

3 Asset Managers Win $254 Million Powerball Lottery

…and the Lord spaketh, “Fuck you, 99 percent.”

Nice. Reminds of this quote from years ago about Mike Tyson. theatlantic: One Year of Prison Costs More Than One Year at Princeton One year at Princeton University: $37,000. One year at a New Jersey state prison: $44,000. Read more. View high resolution

Nice. Reminds of this quote from years ago about Mike Tyson.

theatlantic:

One Year of Prison Costs More Than One Year at Princeton

One year at Princeton University: $37,000. One year at a New Jersey state prison: $44,000. Read more.

(Reblogged from theatlantic)

In the last few years, corporate profits (which flow largely to the wealthy) have reached their highest level as a share of the economy since 1950, while worker pay as a share of the economy is at its lowest point since the mid-1950s.

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There is nobody in this country who got rich on his own. Nobody. You built a factory out there — good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea — God Bless! Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.
Elizabeth Warren. Courtesy of The Atlantic Wire.
(Reblogged from thenewrepublic)

Loved Barry’s speech last night. Also loved that he specifically called out hedge fund managers, especially in light of this feature from last week’s New Yorker. As the author explains:

Worldwide, there are now some 10,000 hedge funds, which the government regulates only loosely. Together, they have about $2 trillion under management. Even today, they employ the two basic tools that Jones used—borrowing (“leverage”) and selling short—and they charge their clients hefty fees, as Jones did. On top of a 2% management fee, they deduct 20% of any investment gains they generate. Jones claimed that this remuneration scheme, which is known as “two and twenty,” was inspired by the way ancient Phoenician merchants financed their trading expeditions. But the practice is also tax-driven. It allows hedge-fund managers to classify much of their income as capital gains, which are taxed at a far lower rate than regular income. While cops and schoolteachers face a marginal tax rate of 25%, hedge-fund managers like Dalio have for years paid 15% on the lion’s share of their income.

Two trillion dollars. That is more than the GDPs of all but eight countries. What an absolute racket. There is really no other conclusion that can be reached.