Tag Archives: economy

TED starts self-censoring its own talks

Posted on by
Reply
TED (conference)

TED (conference) (Photo credit: Wikipedia)

TED, who’s slogan is “Ideas Worth Spreading” and who has provided hundreds of insightful speeches for years, has decided not to spread one idea. They are refusing to provide access to a talk by a speaker who argues that income inequality is bad for America.

The speaker was Nick Hanauer, and here is part of what he said:

We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Rather they are a consequence of an ecosystemic feedback loop animated by middle-class consumers, and when they thrive, businesses grow and hire, and owners profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.

It is very odd, to say the least, for a forum for free expression to back away from one of their speakers.

Economics quote of the day

Posted on by
Reply

When plunder becomes a way of life for a group of men living in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.

– Frederic Bastiat, French writer and economist, quoted by Bill Moyers. (via the Quotation of the Day Mailing List)

Related articles

Economics quote of the day

Posted on by

… in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.

Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.

Furthermore, bond markets keep refusing to cooperate. Even austerity’s star pupils, countries that, like Portugal and Ireland, have done everything that was demanded of them, still face sky-high borrowing costs. Why? Because spending cuts have deeply depressed their economies, undermining their tax bases to such an extent that the ratio of debt to G.D.P., the standard indicator of fiscal progress, is getting worse rather than better.

Meanwhile, countries that didn’t jump on the austerity train — most notably, Japan and the United States — continue to have very low borrowing costs, defying the dire predictions of fiscal hawks.

– Paul Krugman. Fortunately, the “bond vigilantes” in the US did not get their way. They constantly decried deficit spending (during the financial collapse) as inflationary. It simply hasn’t happened.

Political quote of the day 2

Posted on by

When we were at our darkest hour, Mitt Romney turned his back on the industry, their workers and the people of Michigan and in other places where Americans depend on the auto industry.

– UAW President Bob King, responding to Mitt Romney’s Detroit News op-ed, in which Romney called the federal bailouts of the auto industry “crony capitalism on a grand scale.” Romney seems most upset that the auto workers and retirees benefited more than creditors, the creditors being the banks who had already received billions in bailouts. Here is part of what he said:

 …the outcome of the managed bankruptcy proceedings was dictated by the terms of the bailout. Chrysler’s “secured creditors,” who in the normal course of affairs should have been first in line for compensation, were given short shrift, while at the same time, the UAWs’ union-boss-controlled trust fund received a 55 percent stake in the firm.

Related articles

The end of Wall Street?

Posted on by

Well, we can hope.

But there does seem to be a fundamental change going on. The full article is a must read.

The crash four years ago was shocking enough to the financial class. But what is happening on Wall Street now is even more terrifying. No doubt the economy itself—the crisis in Europe, the effects of the tsunami in Japan, America’s sputtering recovery—has played a large part in the financial industry’s struggles. But even the most stubborn economies improve eventually. The bigger issues are structural. The Dodd-Frank financial-­reform act, much maligned, has already begun to change the shape of the financial system—even before a number of its major provisions are proposed to go into full effect this coming July. Banks are working hard to interpret Dodd-Frank’s provisions in a way most favorable to them—and repealing Dodd-Frank is a key piece of Mitt Romney’s campaign platform.

To comply with the looming regulations, banks have begun stripping themselves of the pistons that powered their profits: leverage and proprietary trading. In the wake of the crash, Morgan Stanley and Goldman Sachs converted to bank holding companies to tap the “discount window,” the Fed’s pipeline of cheap funds that gave the banks an emergency source of liquidity. That move seemed smart then, but the stricter standards required of banks have now left them boxed in.

Related articles

Political quote of the day

Posted on by

I was, frankly, offended by it.

I’m a huge fan of Clint Eastwood, I thought it was an extremely well-done ad, but it is a sign of what happens when you have Chicago-style politics, and the President of the United States and his political minions are, in essence, using our tax dollars to buy corporate advertising and the best-wishes of the management which is benefited by getting a bunch of our money that they’ll never pay back.

– Karl Rove, hating on Clint Eastwood’s Chrysler commercial, and describing his anger that US car companies remain in business. For those of us who live in Michigan and throughout the Midwest, I think it is fair to say that we are thrilled at the continued survival of an industry critical to all of us. Rove certainly has no problem with bank bailouts, given that it was the Bush administration that gave $700 Billion to the banks.

Here is the ad that has Rove fuming. What do you think?

Related articles

Globalization quote of the day

Posted on by

Such moral outrage is common among the opponents of globalization — of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad.

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.

– Paul Krugman, via Daring Fireball.  Keep in mind that Paul Krugman is as liberal as they come. Also note that Krugman won the Nobel Prize for Economics in 2008 based in his work analyzing international trade. It is an area he knows well.

Krugman on low cost labor

Posted on by

First of all, even if we could assure the workers in Third World export industries of higher wages and better working conditions, this would do nothing for the peasants, day laborers, scavengers, and so on who make up the bulk of these countries’ populations. At best, forcing developing countries to adhere to our labor standards would create a privileged labor aristocracy, leaving the poor majority no better off.

And it might not even do that. The advantages of established First World industries are still formidable. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved. And since export-oriented growth, for all its injustice, has been a huge boon for the workers in those nations, anything that curtails that growth is very much against their interests. A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries.

– Paul Krugman. Much more in this article at Forbes.

Better late than never

Posted on by

Finally.

Bowing to mounting evidence that austerity alone cannot solve the debt crisis, European leaders are expected to conclude this week that what the debt-laden, sclerotic countries of the Continent need is a dose of economic growth.

A draft of the European Union summit meeting communiqué calls for ‘‘growth-friendly consolidation and job-friendly growth,’’ an indication that European leaders have come to realize that austerity measures, like those being put in countries like Greece and Italy, risk stoking a recession and plunging fragile economies into a downward spiral.

Still, don’t hold your breath waiting for Europe to implement policies understood by first year economics students.

And don’t forget that we have our own problems in this regard.