Category Archives: The destruction of the middle class

Are Advanced Economies Mature Enough to Handle No Growth?

Economists occasionally point out that societies generally move to the right during periods of sustained low growth and economic stress. Yet left-leaning advocates of low or even no growth policies rarely acknowledge the conflict between their antipathy towards growth and the sort of social values they like to see prevail. While some “the end of growth is nigh” types are simply expressing doubt that 20th century rates of increase can be attained in an era of resource scarcity, others see a low-growth future as attractive, even virtuous, with smaller, more autonomous, more cohesive communities.

Low Wage Growth, High Long-Term Unemployment Recognized as International Problem

High unemployment and low wage growth are solvable problems. But powerful and well placed people believe it is in their interest to keep them unsolved

New Yorkers: Take a Stand Against Cronyism and Corruption – Vote for Teachout and Wu Today

A quixotic run for New York governor by the pro-worker, anti-fracking, anti big bank law professor Zephyr Teachout and her running mate, the net neutrality activist Tim Wu has gotten enough traction to lead governor Andrew Cuomo to browbeat likely supporters of the challengers into line.

Utopian Robotics

So the robots take over the social function of providing most everything in the two layers at the base of Maslow’s hierarchy of needs, physiology and safety. Food, water, shelter, warmth; security, stability (for example). We’ve got robot houses, robot servants, robot cars, robot malls, robot servants, robot baristas, robot Walmart greeters, robot drivers, robot security guards, robot financial advisors, robots to make robots….

Elites Finally Starting to Get that Inequality is Messing Up Growth

Even though there has been a big uptick in news stories on rising economic inequality, and more chatter among economists about the idea that high levels of inequality are associated with lower growth, much of the messaging has come from the Democrats desperate to use the one dog whistle that might rally their badly abused base. Even though inequality has risen under Obama, thanks to policies that favored rescuing banks and enriching the medical-industrial complex over helping ordinary citizens, the Democrats are all too willing to rely on their perceived lesser-evilism relative to the Republicans. After all, it was only Romney’s billionaire warts that kept Obama from what would otherwise have been a well-deserved 2012 defeat.

But while the Administration has been pushing inequality as a useful campaign theme (the signal was inviting Thomas Piketty to meet with Treasury Secretary Jack Lew), in parallel, it also appears that some of the expressions of concern about inequality among the policy classes are genuine.

Hillary Clinton and Trade Deals: That “Giant Sucking Sound”

By Lambert Strether of Corrente. In the 1992 Presidential campaign, Ross Perot famously said in debate: We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,…have […]

CBO – Still Pushing Deficit Scaremongering Propaganda

Yves here. We’ve written from time to time about the shameless partisan role that the Congressional Budget Office plays in stoking misguided and destructive concern about budget deficits. It’s important to recognize the CBO’s openly partisan stance on this issue, because it is supposed to make independent, apolitical budget forecasts and is widely and mistakenly seen as “objective”. In fact, the CBO’s regularly takes stances that put them in the same camp as billionaires like Pete Peterson and Stan Druckenmiller, who want to slash Social Security and other social safety nets.

Ignacio Portes: Paul Singer v. Argentina – Where Did All That Debt Come From?

With Argentina’s payment to the holders of its restructured debt on June 30th in limbo at the Bank of New York Mellon, blocked by Federal Judge Thomas Griesa, and the 30 day grace period to official default ticking away, financial pundits have taken a keen interest in the biggest debt struggle in memory.

Some have been very critical of both the judge’s interpretation of the pari passu clause that created this mess and, more importantly, of his damaging precedent. But no one seems able to resist adding digs at Argentina, even when generally supporting its position in the litigation.

The Corporate Illogic of Outsourcing and Offshoring

You must go, now, and read a critically important piece questioning the logic of sending American manufacturing jobs offshore. It’s titled Losing Sparta (hat tip Dikaios Logos) by Ester Kaplan in VQR. We have written regularly about how we have been repeatedly told by managers and executives that the case for offshoring was often not compelling, particularly when risks, such as higher financing and shipping costs, exposure to foreign exchange losses, and inventory risk were included. This makes perfect sense when you consider that for most manufactured goods, factory labor is a mere 10-15% of total wholesale cost, and any savings in factory labor will be offset by higher shipping and greater managerial costs (more coordination, performed by much more highly paid workers). It is thus more accurate to regard a lot of offshoring as not being about cost savings, but a transfer from ordinary workers to managers and executives.

The article focuses on a world class manufacturing plant in Sparta, Tennessee, owned by Phillips that made florescent light bulbs.