Capitalism

How to drain the swamp NYT 10/26/17

Article (Opinion): "Trump Made the Swamp Worse, Here's How to Drain It"  

 Hard copy here.

> Trump won in part because of our eroding faith in our governing institutions. Long-term wage stagnation and income inequality has convinced many that the system is corrupt and rigged in favor of the elites - only an outsider like Trump can “clean it up”. The slow growth/income inequality economy that has been the norm for the last decade is a sign that powerful insiders (big business, the wealthy) are using the system to both increase their own wealth and protect themselves from competition.

> Four ways in which this is done - first, the financial sector lobbies for laws (like the mortgage interest deduction) that encourage high levels of debt which can then be securitized (and monetized). With regulations removed, the financial sector has grown too large. Next, intellectual property laws protect both media and pharmaceutical conglomerates. Third, at the state and local level, occupational licensing artificially boosts the pay of those being licensed and restricts entry. And finally, at the local level, zoning laws inflate the home values of the current owners while making it more difficult for newcomers to move in.

> High profits and wealth have been used by the incumbents to fund think tanks and policy research centers and pay for lobbyists who promote policies that support the status quo and stifle competition. Example: Big Pharma funds research that shows loosening patent laws would stifle innovation, instead of increase it. Lawmakers get only one side of the issue.  

> Reform idea - Congressional staffs need to be expanded, upgraded and professionalized so that members of Congress are no longer dependent upon lobbyists for research.

> Reform idea: at the federal level, the OMB (Office of Management and Budget) independently reviews the impact of federal regulations. No such agency exists at the state level. There should be one.

> Reform idea: private philanthropy should fund new interest groups and think-tanks that will make lawmakers aware that other points of view exist besides those of the entrenched wealthy and powerful.

> Authors Brink Lindsey and Steven Teles work for libertarian think-tank the Niskanen Center and have authored the book The Captured Economy.

Overview of Piketty's "Capital" Three years on 5/20/17

Article: "A political economy   

Piketty was one of three empirical economists including Emmanuel Saez and Anthony Atkinson who used tax data to show that over time, in a capitalist economy, wealthy becomes more and more concentrated in the hands of a few.

> Mathematically, this reduces to r > g - the rate of return on investments exceeds the overall growth rate of the economy. Wealth will grow faster than income, allowing wealth to concentrate in the hands of a few families over time.

> The political connection - as wealth becomes more concentrated in the hands of a few, those few will use that wealth to shape laws that allow them even higher rates of return and protect them from competition.

 

Temp Workers 7/16/16

Article: ""How the 2% lives" 

Temporary workers (with no benefits) make up 2% of the American workforce (3 million people). Since 2009, 10% of all new jobs have been temp jobs. They make 15% less than comparable full-time workers and 15% of them live in poverty. Census Bureau study (2005) says 8 in 10 temp workers would prefer a permanent position - putting the lie to the claim that temp workers enjoy their “flexibility”.