High Fallutin’ Nazis – NYTimes.com

Here comes another billionaire who thinks that anyone who talks about income inequality is a Nazi; this time it’s Ken Langone, co-founder of Home Depot. I don’t have anything useful to say about this, other than the observation that there must be a lot of these guys. I mean, there aren’t that many billionaires, so that coming up with multiple examples of the genus who not only believe that progressives are just like Hitler but are willing to say so in public must indicate that a substantial proportion of our billionaires share this belief, but more privately. Luckily, great wealth doesn’t bring great political influence in modern America — does it?

But Jonathan Cohn’s report on Langone brought to mind an earlier rant by the same guy, in which he denounced yours truly and my “high-fallutin’ thoughts and ideas.” And I think, now that I remember that, that this rant (and others like it) gives a partial clue to the mystery of the continuing popularity of the Wall Street macro canon, despite its total failure in practice.

via High Fallutin' Nazis – NYTimes.com.

The Right’s Crusade to Repeal the 20th Century | Alternet

Silly me: President Obama’s executive order to expand opportunities for overtime pay Thursday seemed like a win-win. Currently, if you make more than $23,000, you can’t necessarily receive overtime; the president’s order would raise that cap, and also make it harder for employers to classify people with almost no supervisory duties as “supervisors” and thus exempt.

Where’s the downside? Newly qualified workers currently being forced to work overtime without pay will now get higher wages. Or, if their employer doesn’t want to spring for the overtime pay (traditionally time and a half), they will have to expand their workforce to get the work done. Higher wages and/or more jobs: Sounds good, right?

Not to Republicans, of course. The backlash to the president’s overtime-pay expansion just makes clear what we’ve known for a long time: They oppose every attempt by government to reward hard work and protect the rights of workers – unless it applies to the very wealthy.

Speaker John Boehner sounded unusually befuddled opposing Obama’s move. “If you don’t have a job, you don’t qualify for overtime. So what do you get out of it? You get nothing,” he told the Washington Post. “The president’s policies are making it difficult for employers to expand employment. And until the president’s policies get out of the way, employers are going to continue to sit on their hands.”

The president’s policies are in fact making it harder for employers to exploit their workers. That’s all. As Jared Bernstein told the New York Times. “I think a potential side effect is that you may see more hiring in order to avoid overtime costs, which would be an awfully good thing right about now.”

Or you’ll see higher wages, which would also be an awfully good thing. One of the major causes of rising income inequality is that back in the 1970s, rising productivity suddenly became detached from rising wages. For decades — since the labor-rights reforms and social welfare advances of the ’30s and ’40s — the two lines climbed in tandem, with higher productivity translating into higher paychecks. The two came apart, in what’s become known as “the great divergence,” at the same time as income inequality began to climb. There are many reasons for the productivity-wage split, including a stagnant minimum wage, declining union membership, and weaker labor rights overall – including less compensated overtime.

Republicans no longer accept that it was government intervention in the economy, first in the Progressive era and then, more forcefully, after the Great Depression, that created the greatest economic boom and the biggest middle class in history. The 40-hour work week. The weekend. Vacations. Child labor laws. The minimum wage. Social Security. Health and safety protection. All of these represented government intervention on the side of working people, to balance the playing field with exploitive employers, and to carve out a realm of family and personal life that could be protected from ceaseless labor. Progressive public policy essentially created childhood, as a time when kids who weren’t wealthy might be educated and protected from labor abuse.

via The Right's Crusade to Repeal the 20th Century | Alternet.

Liberty, Equality, Efficiency – NYTimes.com

Most people, if pressed on the subject, would probably agree that extreme income inequality is a bad thing, although a fair number of conservatives believe that the whole subject of income distribution should be banned from public discourse. (Rick Santorum, the former senator and presidential candidate, wants to ban the term “middle class,” which he says is “class-envy, leftist language.” Who knew?) But what can be done about it?

The standard answer in American politics is, “Not much.” Almost 40 years ago Arthur Okun, chief economic adviser to President Lyndon Johnson, published a classic book titled “Equality and Efficiency: The Big Tradeoff,” arguing that redistributing income from the rich to the poor takes a toll on economic growth. Okun’s book set the terms for almost all the debate that followed: liberals might argue that the efficiency costs of redistribution were small, while conservatives argued that they were large, but everybody knew that doing anything to reduce inequality would have at least some negative impact on G.D.P.

But it appears that what everyone knew isn’t true. Taking action to reduce the extreme inequality of 21st-century America would probably increase, not reduce, economic growth.

Let’s start with the evidence.

via Liberty, Equality, Efficiency – NYTimes.com.

No, really, you didn’t build that: How the rich became dependent on government subsidies – Salon.com

Remember when President Obama was lambasted for saying “you didn’t build that”? Turns out he was right, at least when it comes to lots of stuff built by the world’s wealthiest corporations. That’s the takeaway from this week’s new study of 25,000 major taxpayer subsidy deals over the last two decades.

Titled “Subsidizing the Corporate One Percent,” the report from the taxpayer watchdog group Good Jobs First shows that the world’s largest companies aren’t models of self-sufficiency and unbridled capitalism. To the contrary, they’re propped up by billions of dollars in welfare payments from state and local governments.

Such subsidies might be a bit more defensible if they were being doled out in a way that promoted upstart entrepreneurialism. But as the study also shows, a full “three-quarters of all the economic development dollars awarded and disclosed by state and local governments have gone to just 965 large corporations” — not to the small businesses and start-ups that politicians so often pretend to care about.

In dollar figures, that’s a whopping $110 billion going to big companies. Fortune 500 firms alone receive more than 16,000 subsidies at a total cost of $63 billion.

These kinds of handouts, of course, are the definition of government intervention in the market. Nonetheless, those who receive the subsidies are still portrayed as free-market paragons.

via No, really, you didn’t build that: How the rich became dependent on government subsidies – Salon.com.

Taxing the rich is good for the economy, IMF says – Business – CBC News

A new paper by researchers at the International Monetary Fund appears to debunk a tenet of conservative economic ideology — that taxing the rich to give to the poor is bad for the economy.

The paper by IMF researchers Jonathan Ostry, Andrew Berg and Charalambos Tsangarides will be applauded by politicians and economists who regard high levels of income inequality as not only a moral stain on society but also economically unsound.

via Taxing the rich is good for the economy, IMF says – Business – CBC News.

Wall Street adviser: Actual unemployment is 37.2%, misery index worst in 40 years | WashingtonExaminer.com

Dont believe the happy talk coming out of the White House, Federal Reserve and Treasury Department when it comes to the real unemployment rate and the true “Misery Index.” Because, according to an influential Wall Street advisor, the figures are a fraud.

via Wall Street adviser: Actual unemployment is 37.2%, misery index worst in 40 years | WashingtonExaminer.com.

At Davos 2014, The Gods Of Mischief Rule – The Daily Beast

Not so long ago and not so very far away, there were people who thought they were masters of the universe. They were very powerful and very rich (and very often both), and each year they got together on a mountaintop in Switzerland to congratulate themselves, network with each other and confer about how best to bring order and prosperity to humankind.

From afar, the confab known as the World Economic Forum in Davos looked a little like Asgard, the mythical home of the Norse gods. Up close, slipping along the icy sidewalks with people partying all night in a hodgepodge of hotels, it looked like Loki, the god of mischief, was running the show.

For decades after the forum was founded in 1971, Davos often appeared a model of disorganization, a 30-ring-circus of panels and plenary sessions, even as the world, with or without its help, looked to be in more or less good order. The Cold War ended; Communism died; technology was spreading opportunities; global trade supposedly was pulling people out of poverty. Even the problems of terrorism and a very shaky euro, while they were disconcerting, seemed manageable.

via At Davos 2014, The Gods Of Mischief Rule – The Daily Beast.

Trickle-down economics is the greatest broken promise of our lifetime | Alex Andreou | Comment is free | theguardian.com

The richest 85 people in the world have as much wealth as the poorest 3.5 billion – or half the world\’s entire population – put together. This is the stark headline of a report from Oxfam ahead of the World Economic Forum at Davos. Is there a reason why the world\’s powerful, gathering at the exclusive resort to sip cognac and eat blinis, should care? Well, yes.

If one subscribes to the charitable view that neoliberal philosophy was simply naive or misguided in thinking that \”trickle down\” would work infinitely, then evidence that it doesn\’t, should be cause for concern. It is a fundamental building block of supply-side economic theory – the tool of choice these past few decades for those in charge to make adjustments. The realisation that governments have been pulling at economic levers which, for some time, have been attached to nothing, should be a wake-up call to the deepest sleepers.

Even if one subscribes to the cynical view that the elite knew what they were doing all along, observing that the \”rising tide\” is lifting fewer and fewer boats and leaving more and more to rot in the sediment – both at a personal and national level – must make most wonder \”am I in the right boat and is it big enough?\” Concentration is rampant. Credit Suisse estimates that the world will have 11 trillionaires within two generations.

via Trickle-down economics is the greatest broken promise of our lifetime | Alex Andreou | Comment is free | theguardian.com.

Vatican’s New Bogeyman: Capitalism, Not Communism – Pope Francis’ condemnation of trickle-down theory is a shift: Essayist

(NEWSER) – Pope Francis\’ blistering attack yesterday on the \”tyranny\” of unchecked capitalism in general and trickle-down economics in particular marks a fundamental shift in church thinking, writes Emma Green at the Atlantic. A half-century ago, the church largely condemned communism and embraced democracy, along with its underlying free-market system. The pope made clear yesterday that those days are long gone. \”This is more than just a lecture about ethics,\” writes Green. \”It’s a statement about who should control financial markets.\” And Francis clearly believes \”the global economy needs more government control—an argument that would have been unthinkable for the pope just 50 years ago.\”

via Vatican's New Bogeyman: Capitalism, Not Communism – Pope Francis' condemnation of trickle-down theory is a shift: Essayist.