Rolling US Economy Into The Shitbin Thread

maybe we should try it sometime then

We did during WWII.

I think the idea that we'll create millions of middle class jobs through govt tweaking policy this was or that way is pretty much a dream. we're in the new normal, the question is how we deal w/ it. even w/ strong economic growth sometime in the future income inequality will continue to climb, as job creation will stick to a bipolar distribution.

Aren't most of the significant gains in wealth inequality related to equity ownership? Or is it primarily wages?

http://elsa.berkeley.edu/~saez/saez-UStopincomes-2011.pdf

Interestingly, the income composition pattern at the very top has changed considerably over the century. The share of wage and salary income has increased sharply from the 1920s to the present, and especially since the 1970s. Therefore, a significant fraction of the surge in top incomes since 1970 is due to an explosion of top wages and salaries. Indeed, estimates based purely on wages and salaries show that the share of total wages and salaries earned by the top 1 percent wage income earners has jumped from 5.1 percent in 1970 to 12.4 percent in 2007.5

Evidence based on the wealth distribution is consistent with those facts. Estimates of wealth concentration, measured by the share of total wealth accruing to top 1 percent wealth holders, constructed by Wojciech Kopczuk and myself from estate tax returns for the 1916-2000 period in the United States show a precipitous decline in the first part of the century with only fairly modest increases in recent decades. The evidence suggests that top incomes earners today are not “rentiers” deriving their incomes from past wealth but rather are “working rich,” highly paid employees or new entrepreneurs who have not yet accumulated fortunes comparable to those accumulated during the Gilded Age. Such a pattern might not last for very long. The drastic cuts of the federal tax on large estates could certainly accelerate the path toward the reconstitution of the great wealth concentration that existed in the U.S. economy before the Great Depression.

saw that link, those are only based on estate tax returns through 2000. Would be interested to see the effect of the past 12 years.

a good way to solve income inequality is to take money from rich people and give it to poor people

too complicated!

i still think we should tie the highest marginal income tax rate to unemployment. couldn't hurt

or straight up tax wealth whenever unemployment rises above, i don't know, 3%. it's not like trickle down economics hasn't been totally disproved to work as advertised

Re soaking the rich, the capital gains tax rate used to be higher (that's where the rich do especially well) and the percentage of income that is taxed for Social Security payroll taxes used to be higher. Capital gains should be taxed at the same rate as regular income-- there have been studies I believe showing that the Republican argument that lower cap gains rates will help create jobs and boost the economy does not work.

I get the feeling only the marks on the right believe that trickle down economics "works" as advertised

i agree, but it's a zombie theory that still has way too much sway over public discourse

studies our GOP friends have suppressed, no less, curmudgeon

http://www.forbes.com/sites/rickungar/2012/11/02/non-partisan-congressional-tax-report-debunks-core-conservative-economic-theory-gop-suppresses-study/

They also have sway over Obama's White House. When he "compromised" for just taxing the income rate of the wealthy who make more than $400 grand, he also should have pushed for restoring cap gains rates higher at that time (they went up slightly but not to the same rate as income taxes).

My mba grad sister who always votes Democrat and is liberal on social issues, thinks raising the payroll tax cap on Social Security is unfair to the wealthy who got there by working hard. I want to give her the stats I read that at the beginning of the Reagan administration a higher percent of income was taxes for Social Security purposes than is now, but sometimes you just can't argue with family. The Washington Post editorial page is stubborn on this too.

was taxed

the norquistists have done a fine job conflating taxing labor earnings with property and inheritance. hats off to grover

preach it brother matt

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425?hatersgonnahate

My experience in the past four years has been the exact opposite of this:

The Myth of America's Tech-Talent Shortage

anyone else on ILX in tech?

complaining about stagnating wages in the ~90-120k range at the moment seems a bit...

I'm in tech and I think the article has some truth to it. Employers like the lower-wage, more docile aspect of foreign workers.

also americans are terrible don't forget.

the worst.

I'm a tech person too and I generally agree with his argument.

http://dailyhowler.blogspot.com/2013/05/the-professoriate-fails-us-again-this.html

In the more recent case involving Reinhart and Rogoff, it was left to three graduate students to check the facts and uncover the scam. Your economics professors all took a pass. The professoriate failed you again.

In fairness to the nation’s professors, many of them have a good excuse for their failure to serve. They couldn’t check Reinhart and Rogoff—they were in the south of France! But all your clammy liberal bloggers have let the obvious question pass, as they so typically do in such cases:

Why was it left to three graduate students to fact-check that very important paper—“the most influential economic analysis of recent years?” Maybe there’s an answer to that. So far, we haven’t seen the question asked.

Why was it left to three graduate students? Here’s our provisional answer: At the top of our intellectual pig-piles, this latest failure is the norm. In large part, our intellectual elites stopped functioning a long time ago!

At the top of our journalistic and academic pig-piles, our society no longer works.

well, it escaped fact checking because it was never peer reviewed. but in any case lots of nonsense economics is built on a foundation of peer reviewed fact-checked facts.

At the top of our journalistic and academic pig-piles, our society no longer works.

Luckily it works remarkably well in every other hierarchic organization in the country.

dean baker on reinhart and rogoff has been good as well

i have sort of turned to him permanently in favor of the daily howler, not sure why, he's not as funny or as vibrantly outraged. there is maybe a weird little pill of bitterness somewhere in the howler's work whose origin remains obscure but whose absence makes beat the press a slightly clearer read

Always seems like a lot of his bitterness is rooted in the way that his friend Al Gore got treated during the presidential campaign.

This could probably fit on multiple threads, but Felix Salmon is in fine form today on how labor has been taking it in the nads from capital for the past 40 years, and he throws in a masterful skewering of Tom Friedman's latest:

Friedman is a billionaire (by marriage) who — like all billionaires these days — is convinced that he achieved his current prominent position by merit alone, rather than through luck and through the diligent application of cultural and financial capital. His paean to self-motivation recalls nothing so much as Margaret Thatcher's "there is no such thing as society" quote: "parenting, teaching or leadership that 'inspires' individuals to act on their own will be the most valued of all," he writes, bizarrely choosing to wrap his scare quotes around the word "inspires" rather than around the word "leadership", where they belong.

http://blogs.reuters.com/felix-salmon/2013/05/01/the-systemic-plight-of-labor/

the employment-to-population ratio, which fell off a cliff during the Great Recession and which will probably never recover.

actually, the whole thing is quite depressing

A Story for May Day: The Fed, Apple, and Trickle-Down Economics
http://robertreich.org/post/49368810890

in favor of over

so what's going on, unto the brink of the shitbin once more my friends?

Ask Bernanke (though Krugman disagrees)

WSJ: Joblessness expected to dip below 7% next year.
http://online.wsj.com/article/SB10001424127887323300004578559263197557362.html?mod=ITP_pageone_0

http://www.washingtonpost.com/opinions/harold-meyerson-start-the-border-fence-in-norfolk-va/2013/06/25/09e63d18-dd1c-11e2-9218-bc2ac7cd44e2_story.html?hpid=z3

Northern US policy ideas versus Southern ones

http://www.propublica.org/article/the-expendables-how-the-temps-who-power-corporate-giants-are-getting-crushe

http://www.moneynews.com/MKTNews/billionaires-dump-economist-stock/2012/08/29/id/450265

Ha, don't know what link trail led me there. Didn't realize it was newsmax. Newsmax otm?

That temps article is so sad

lol billionaires warn of impending financial collapse

no, newsmax definitely not otm. the dow is not going to 1500.

if warren buffet thinks we're about to get a 90% stock market correction then why would he reduce his consumer products allocation by only 21%? and what did he do with that money (clue: he bought stocks. warren buffet does not think this.)

Here's some more great moneynews reporting

http://www.moneynews.com/Wolinsky/Buffett-obama-wolinsky-Credibility/2011/09/22/id/411898

lol

I think moneynews is literally the site that always has those "from around the web" links with the worried billionaire who I think looks like saul bellow

so detroit just filed for bankruptcy. who will break the record next?

http://www.nytimes.com/2013/07/19/us/detroit-files-for-bankruptcy.html?hp&_r=0

http://www.nytimes.com/2013/07/22/business/in-climbing-income-ladder-location-matters.html?_r=0

http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html?smid=fb-share&_r=0

MOUNT CLEMENS, Mich. — Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars.

The story of how this works begins in 27 industrial warehouses in the Detroit area where a Goldman subsidiary stores customers’ aluminum. Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again.

This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country.

Tyler Clay, a forklift driver who worked at the Goldman warehouses until early this year, called the process “a merry-go-round of metal.”

Only a tenth of a cent or so of an aluminum can’s purchase price can be traced back to the strategy. But multiply that amount by the 90 billion aluminum cans consumed in the United States each year — and add the tons of aluminum used in things like cars, electronics and house siding — and the efforts by Goldman and other financial players has cost American consumers more than $5 billion over the last three years, say former industry executives, analysts and consultants.

The inflated aluminum pricing is just one way that Wall Street is flexing its financial muscle and capitalizing on loosened federal regulations to sway a variety of commodities markets, according to financial records, regulatory documents and interviews with people involved in the activities.

maybe this is 'rolling us economy out of the shitbin' news, but still, these fuckin dudes

yeah I know, posted that in the finance industry thread, one of those things where you go "how the fuck is this not illegal"

it's their gas, i guess