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I often rail against liberals who wring their hands over the unfortunate folks who have been left behind by globalization and technology. E.J. Dionne gave us a classic example of such hand-wringing in his piece today on the need to help the left behinds to keep them from flaming reactionaries.
For some reason, it is difficult for many liberals to grasp the idea that the bad plight of tens of millions of middle class workers did not just happen, but rather was deliberately engineered. Longer and stronger patent and copyright protection did not just happen, it was deliberate policy. Subjecting manufacturing workers to global competition, while largely protecting doctors, dentists, and other highly paid professionals was also a policy decision. Saving the Wall Street banks from the consequences of their own greed and incompetence was also conscious policy.
I know it’s difficult for intellectuals to grasp new ideas, but if we want to talk seriously about rising inequality, then it will be necessary for them to try. (Yeah, I’m advertising my [free] book Rigged again.) Anyhow, let’s hope that in 2019 we can actually talk about the policies that were put in place to redistribute income upward and not just pretend that Bill Gates and his ilk getting all the money was a natural process.
I often rail against liberals who wring their hands over the unfortunate folks who have been left behind by globalization and technology. E.J. Dionne gave us a classic example of such hand-wringing in his piece today on the need to help the left behinds to keep them from flaming reactionaries.
For some reason, it is difficult for many liberals to grasp the idea that the bad plight of tens of millions of middle class workers did not just happen, but rather was deliberately engineered. Longer and stronger patent and copyright protection did not just happen, it was deliberate policy. Subjecting manufacturing workers to global competition, while largely protecting doctors, dentists, and other highly paid professionals was also a policy decision. Saving the Wall Street banks from the consequences of their own greed and incompetence was also conscious policy.
I know it’s difficult for intellectuals to grasp new ideas, but if we want to talk seriously about rising inequality, then it will be necessary for them to try. (Yeah, I’m advertising my [free] book Rigged again.) Anyhow, let’s hope that in 2019 we can actually talk about the policies that were put in place to redistribute income upward and not just pretend that Bill Gates and his ilk getting all the money was a natural process.
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The New York Times has an interesting piece on the flood of books that are about to come into the public domain now that the term for the last extension of copyright (from 75 to 95 years) is about to be reached. This extension was applied retroactively, so it meant that virtually no copyrighted works came into the public domain for 20 years.
As policy, making a copyright extension is rather bizarre, since it is impossible to provide incentives for things that happened in the past. As the piece notes, one of the main motivations was Disney’s desire to keep some Mickey Mouse work under copyright protection, which is why the extension is sometimes referred to as the “Mickey Mouse copyright act.”
Anyhow, the fact that the work is now coming into the public domain both means that new editions can be published at just the cost of printing, making them more widely available. In addition, people can now freely do derivative works, as well as play and movies, derived from these books, without paying and/or getting permission from the copyright holders. It will be interesting to see how this change affects the treatment of the work newly in the public domain, which includes books by Agatha Christie, F. Scott Fitzgerald, and Kahlil Gibran.
The New York Times has an interesting piece on the flood of books that are about to come into the public domain now that the term for the last extension of copyright (from 75 to 95 years) is about to be reached. This extension was applied retroactively, so it meant that virtually no copyrighted works came into the public domain for 20 years.
As policy, making a copyright extension is rather bizarre, since it is impossible to provide incentives for things that happened in the past. As the piece notes, one of the main motivations was Disney’s desire to keep some Mickey Mouse work under copyright protection, which is why the extension is sometimes referred to as the “Mickey Mouse copyright act.”
Anyhow, the fact that the work is now coming into the public domain both means that new editions can be published at just the cost of printing, making them more widely available. In addition, people can now freely do derivative works, as well as play and movies, derived from these books, without paying and/or getting permission from the copyright holders. It will be interesting to see how this change affects the treatment of the work newly in the public domain, which includes books by Agatha Christie, F. Scott Fitzgerald, and Kahlil Gibran.
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The media apparently just love the story of everyone being a gig worker, and like Donald Trump, they are not going to let the data get in the way. The Washington Post just ran a column telling us that gig workers are everywhere.
While this person and millions of others are struggling to get by with non-standard employment, the most recent survey from the Bureau of Labor Statistics shows there has been no increase in gig-type employment over the last decade. The proliferation of gig economy jobs is a story the media like to tell for some reason. It would be nice if they instead tried to focus on the real economy.
The media apparently just love the story of everyone being a gig worker, and like Donald Trump, they are not going to let the data get in the way. The Washington Post just ran a column telling us that gig workers are everywhere.
While this person and millions of others are struggling to get by with non-standard employment, the most recent survey from the Bureau of Labor Statistics shows there has been no increase in gig-type employment over the last decade. The proliferation of gig economy jobs is a story the media like to tell for some reason. It would be nice if they instead tried to focus on the real economy.
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Justin Gillis argued in an NYT column that higher carbon taxes face too much political resistance to be a serious option in the near future. He points to the difficulties faced by politicians who have proposed such taxes, most recently the rise of the Yellow Vest movement in France in opposition to carbon taxes imposed by French President Emanuel Macron. Gillis instead proposes measures, such as increased public transit options, which will give people an incentive to use less energy.
While Gillis is right about the political opposition to carbon taxes, there are policies that can provide equivalent disincentives. (Gillis does understate the incentive effect. People in Europe use much less energy than in the US, presumably in large part because of the higher prices there.) If we convert car insurance from being largely a fixed cost to a per mile charge, it would have provide a substantial disincentive to driving.
An average insurance policy costs roughly $1,000 a year. If average miles driven per car are 10,000 a year, this would come to 10 cents a mile. For a car that gets 20 miles a gallon, paying 10 cents a mile in higher insurance premiums would provide the same disincentive as a $2.00 a gallon gasoline tax. The nice part about this switch is that it does not mean raising people’s insurance premiums on average, it just changes the way they pay.
We obviously have to do much more than switch to pay by the mile auto insurance to stop global warming, but this is a relatively simple and largely painless measure that could have a substantial impact.
Justin Gillis argued in an NYT column that higher carbon taxes face too much political resistance to be a serious option in the near future. He points to the difficulties faced by politicians who have proposed such taxes, most recently the rise of the Yellow Vest movement in France in opposition to carbon taxes imposed by French President Emanuel Macron. Gillis instead proposes measures, such as increased public transit options, which will give people an incentive to use less energy.
While Gillis is right about the political opposition to carbon taxes, there are policies that can provide equivalent disincentives. (Gillis does understate the incentive effect. People in Europe use much less energy than in the US, presumably in large part because of the higher prices there.) If we convert car insurance from being largely a fixed cost to a per mile charge, it would have provide a substantial disincentive to driving.
An average insurance policy costs roughly $1,000 a year. If average miles driven per car are 10,000 a year, this would come to 10 cents a mile. For a car that gets 20 miles a gallon, paying 10 cents a mile in higher insurance premiums would provide the same disincentive as a $2.00 a gallon gasoline tax. The nice part about this switch is that it does not mean raising people’s insurance premiums on average, it just changes the way they pay.
We obviously have to do much more than switch to pay by the mile auto insurance to stop global warming, but this is a relatively simple and largely painless measure that could have a substantial impact.
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A friend called my attention to this Project Syndicate piece by Kenneth Rogoff, a Harvard economics professor and former chief economist at the IMF. Rogoff argues that Russia will need major economic reform and political reform in order for its economy to get back on a healthy growth path.
In the course of making his argument, Rogoff makes a quick and dirty case that the fact Putin was able to win re-election despite the economic downturn in 2015–2016 resulting from the collapse of world oil prices, shows that the country is not a western democracy.
“The shock to the real economy has been severe, with Russia suffering a decline in output in 2015 and 2016 comparable to what the United States experienced during its 2008–2009 financial crisis, with the contraction in GDP totalling about 4 percent. …
“In a western democracy, an economic collapse on the scale experienced by Russia would have been extremely difficult to digest politically, as the global surge in populism demonstrates. Yet Putin has been able to remain firmly in control and, in all likelihood, will easily be able to engineer another landslide victory in the presidential election due in March 2018.”
First, the IMF data to which Rogoff links does not support his story of an economic collapse in Russia. The reported decline in GDP is 2.7 percent, not the 4.0 percent claimed by Rogoff. And, it is more than reversed by the growth in 2017 and projected growth in 2018. In other words, there does not seem to be much of a story of economic collapse here.
But the idea that a Russian government could not stay in power through an economic downturn, if it were democratic, is an interesting one. According to the IMF, Russia’s economy shrank by more than 25 percent from 1992 to 1996 under Boris Yeltsin, a close US ally. Yet, he managed to be re-elected in 1996 despite an economic decline that was an order of magnitude larger than the one under Putin from 2014 to 2016. By the Rogoff theory, we can infer that Yeltsin should not have been able to win re-election through democratic means.
A friend called my attention to this Project Syndicate piece by Kenneth Rogoff, a Harvard economics professor and former chief economist at the IMF. Rogoff argues that Russia will need major economic reform and political reform in order for its economy to get back on a healthy growth path.
In the course of making his argument, Rogoff makes a quick and dirty case that the fact Putin was able to win re-election despite the economic downturn in 2015–2016 resulting from the collapse of world oil prices, shows that the country is not a western democracy.
“The shock to the real economy has been severe, with Russia suffering a decline in output in 2015 and 2016 comparable to what the United States experienced during its 2008–2009 financial crisis, with the contraction in GDP totalling about 4 percent. …
“In a western democracy, an economic collapse on the scale experienced by Russia would have been extremely difficult to digest politically, as the global surge in populism demonstrates. Yet Putin has been able to remain firmly in control and, in all likelihood, will easily be able to engineer another landslide victory in the presidential election due in March 2018.”
First, the IMF data to which Rogoff links does not support his story of an economic collapse in Russia. The reported decline in GDP is 2.7 percent, not the 4.0 percent claimed by Rogoff. And, it is more than reversed by the growth in 2017 and projected growth in 2018. In other words, there does not seem to be much of a story of economic collapse here.
But the idea that a Russian government could not stay in power through an economic downturn, if it were democratic, is an interesting one. According to the IMF, Russia’s economy shrank by more than 25 percent from 1992 to 1996 under Boris Yeltsin, a close US ally. Yet, he managed to be re-elected in 1996 despite an economic decline that was an order of magnitude larger than the one under Putin from 2014 to 2016. By the Rogoff theory, we can infer that Yeltsin should not have been able to win re-election through democratic means.
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When the columnist with the longest tenure at the country’s leading newspaper has no clue on the biggest issues facing the world, then it is a good sign that the elites, in general, have no idea what they are doing. He notes the disaffection of large numbers of middle class people in both Europe and the United States with the status quo.
Friedman correctly observes that “average work no longer returns an average wage that can sustain an average middle-class lifestyle.” However, he absurdly blames this on “rapid accelerations in technology and globalization.”
This is the big lie. Bill Gates is not incredibly rich because of rapid accelerations in technology and globalization, he is incredibly rich because the government gives Microsoft patent and copyright monopolies on Windows and other software. It will arrest people who make copies without his permission. In fact, it negotiates trade deals (wrongly called “free trade” deals) that require other countries to arrest people too. Patent and copyright monopolies may transfer as much as $1 trillion a year from average workers to people who have these forms of property in the United States alone. That’s 5 percent of GDP or 60 percent of after-tax corporate profits.
The reason there are very rich people in finance, who can bid up property prices in major cities to make them unaffordable to the middle class, is that we coddle the financial industry. Remember when the market was about to work its magic on Goldman Sachs, Citigroup, and the rest back in 2008? The leaders of both parties could not run fast enough to rescue these bloated turkeys from being destroyed by their own greed and stupidity.
And the reason globalization puts downward pressure on the pay of factory workers, but not doctors and dentists, is that we have protection for doctors and dentists. We make it very difficult for foreign professionals to practice their professions in the United States.
There is a longer list, but the point is that we have screwed middle class workers by deliberate policy, it was not just something that happened, as in “rapid accelerations in technology and globalization.” The fact that our elites refuse to acknowledge this reality and treat the plight of the middle class as a result of personal failings, as in not the right skills, will inevitably cause many to be angry, like yellow vest protestors in France. As long as this is the standard line in policy debates, their anger is not likely to go away.
(Yes, this is the theme of my [free] book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
When the columnist with the longest tenure at the country’s leading newspaper has no clue on the biggest issues facing the world, then it is a good sign that the elites, in general, have no idea what they are doing. He notes the disaffection of large numbers of middle class people in both Europe and the United States with the status quo.
Friedman correctly observes that “average work no longer returns an average wage that can sustain an average middle-class lifestyle.” However, he absurdly blames this on “rapid accelerations in technology and globalization.”
This is the big lie. Bill Gates is not incredibly rich because of rapid accelerations in technology and globalization, he is incredibly rich because the government gives Microsoft patent and copyright monopolies on Windows and other software. It will arrest people who make copies without his permission. In fact, it negotiates trade deals (wrongly called “free trade” deals) that require other countries to arrest people too. Patent and copyright monopolies may transfer as much as $1 trillion a year from average workers to people who have these forms of property in the United States alone. That’s 5 percent of GDP or 60 percent of after-tax corporate profits.
The reason there are very rich people in finance, who can bid up property prices in major cities to make them unaffordable to the middle class, is that we coddle the financial industry. Remember when the market was about to work its magic on Goldman Sachs, Citigroup, and the rest back in 2008? The leaders of both parties could not run fast enough to rescue these bloated turkeys from being destroyed by their own greed and stupidity.
And the reason globalization puts downward pressure on the pay of factory workers, but not doctors and dentists, is that we have protection for doctors and dentists. We make it very difficult for foreign professionals to practice their professions in the United States.
There is a longer list, but the point is that we have screwed middle class workers by deliberate policy, it was not just something that happened, as in “rapid accelerations in technology and globalization.” The fact that our elites refuse to acknowledge this reality and treat the plight of the middle class as a result of personal failings, as in not the right skills, will inevitably cause many to be angry, like yellow vest protestors in France. As long as this is the standard line in policy debates, their anger is not likely to go away.
(Yes, this is the theme of my [free] book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
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