The Widdershins

Posts Tagged ‘Economy

A good Friday to you Widdershins!

With Prolix’s laptop giving up the ghost on him and tin cans and string not working well for internet connectivity, Fredster here is going to do a post in his absence.  Prolix has been kind enough to take a post or two for me, so reciprocating is fine with me.  But as one of the tags to the post says, “Not Prolix”, so don’t hold me to that standard…puhleeze!

In some of my readings around the internet I found articles that I thought were interesting and so I bookmarked them for future reference.  I think that will work out just fine today.  This isn’t exactly current events, nor earth shattering, but something I found interesting and perhaps you will also.

* * * *

The topic I want to cover is from Bloomberg Busisnessweek and concerns the auto manufacturing  and auto parts manufacturing companies that have come to some of the southern states and in this case to Alabama.  The piece is subtitled “Cheap Wages, Little Training, Crushed Limbs“.  And that is about right.

Bama’s experiences with the auto manufacturing business began when the state was able to entice Mercedes Benz to build an assembly plant near Tuscaloosa Alabama.  “In 1997…That gleaming M-Class SUV was historic. Alabama, the nation’s fifth-poorest state, had wagered a quarter-billion dollars in tax breaks and other public giveaways to land the first major Mercedes factory outside Germany.”  I don’t know this personally but I’m sure the employees at that plant have decent wages and working conditions because: German company.  And after that initial company, Toyota, Honda and Hyundai opened their own assembly plants in Bama.  The car assembly plants opened in other southern states too; Tennessee and Georgia as examples.  And one reason the plants came was because most of these states are right-to-work states.  U.A.W. ?  Nah, we don’t need no stinkin’ unions here.  And after the car assembly plants, the parts suppliers started opening up in the state.

The parts supplier companies are usually foreign-owned and supply the parts for the assembly plants.  And though the companies may both be from South Korea, there’s no love lost between them.  The assembly plants have contracts with the parts plants and have very fixed quotas on how many widgets for a car those plants must make or they’ll be penalized.  So those suppliers take chances and cut corners, and the corners usually involve worker safety.

Take the case of Regina Elsea.  She had great plans, was going to attend Auburn University with desires to be a pediatrician.  But love called in the form of her kindergarten sweetheart who was a stocker at a local Walmart.  Regina dropped out of school so they both could work to get a place of their own.  She got a job at the Ajin plant which made parts for Hyundai and Kia cars.  Regina was working 12-hour shifts 7 days a week in an effort to go from temporary paying $8.75/hr. to full time permanent with a raise to $10.50/hr.   Here’s what happened to Regina one day:

On June 18, Elsea was working the day shift when a computer flashed “Stud Fault” on Robot 23. Bolts often got stuck in that machine, which mounted pillars for sideview mirrors onto dashboard frames. Elsea was at the adjacent workstation when the assembly line stopped. Her team called maintenance to clear the fault, but no one showed up.

[snip]

After several minutes, Elsea grabbed a tool—on the video it looks like a screwdriver—and entered the screened-off area around the robot to clear the fault herself. Whatever she did to Robot 23, it surged back to life, crushing Elsea against a steel dashboard frame and impaling her upper body with a pair of welding tips. A co-worker hit the line’s emergency shut-off. Elsea was trapped in the machine—hunched over, eyes open, conscious but speechless.

(No one knew how to release the robot)

A team leader raced to get a maintenance worker in the break room.  But the maintenance worker worked in a different part of the plant and wasn’t familiar with this equipment.

When emergency crews arrived several minutes later, Elsea was still stuck. The rescue workers finally did what Elsea had failed to do: locked out the machine’s emergency power switch so it couldn’t reenergize again—a basic precaution that all factory workers are supposed to take before troubleshooting any industrial robot. Ajin, according to OSHA, had never given the workers their own safety locks and training on how to use them, as required by federal law. Ajin is contesting that finding.

An ambulance took Regina to a local hospital and then to a trauma center in Birmingham where she died the next day.  Regina’s mom says she still hasn’t heard a word from Ajin’s owners or senior executives. They sent a single artificial flower to her funeral.

Regina’s isn’t the only horror story involving these supplier companies where the goal is “meet the quota or we lose money or we’ll be penalized”.  Some more examples:

  • A man had worked a 12 hour shift but was summoned to work on a metal press  The press had not been working well all day.  A hole puncher didn’t deploy and then it did…at the wrong time – on his finger. “I saw my meat sticking out of the bottom of my glove,” he says.
  • In 2015, a 33-year-old maintenance worker was engulfed in flames at Nakanishi Manufacturing Corp.’s bearing plant in Winterville, Ga.—after four previous fires in the factory’s dust-collection system.
  • A man working at a plant supplying parts for Mercedes Benz was working cleaning ventilation ducts over dipping pools of acid used to anodize the parts. There were no handrails, gangways or cables. He was working one day cleaning the ducts and “His hands slipped, and he tumbled backward into a vat of sulfuric and phosphoric acid 4 feet deep.”

OSHA (under Obama) began noticing this and cracking down:

The agency cited one year, 2010, when workers in Alabama parts plants had a 50 percent higher rate of illness and injury than the U.S. auto parts industry as a whole. That gap has narrowed, but the incidence of traumatic injuries in Alabama’s auto parts plants remains 9 percent higher than in Michigan’s and 8 percent higher than in Ohio’s. In 2015 the chances of losing a finger or limb in an Alabama parts factory was double the amputation risk nationally for the industry, 65 percent higher than in Michigan and 33 percent above the rate in Ohio.

From David Michaels who headed OSHA under President Obama:

“The supply chain isn’t going just to Bangladesh. It’s going to Alabama and Georgia,” says David Michaels, who ran OSHA for the last seven years of the Obama administration. Safety at the Southern car factories themselves is generally good, he says. The situation is much worse at parts suppliers, where workers earn about 70¢ for every dollar earned by auto parts workers in Michigan, according to the Bureau of Labor Statistics. (Many plants in the North are unionized; only a few are in the South.)

Michaels in a meeting with the car companies themselves said to them:

“I gave them a very strong message: ‘This brings shame on your reputation. American consumers are not going to want to buy cars stained with the blood of American workers,’ ”

Summing all of this up:

When Trump suits and ties are made in Mexico and when Ivanka’s clothes are made in sweat shops in Asia, do we really believe that any of these situations are going to improve?  MAGA indeed.

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Okay Widdershins I hope this wasn’t too boring or snooze-worthy.  And also I violated Prolix’s 800 word rule by about 400 extra words.  Yikes!  Please take the conservation in any direction you wish.

 

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rapture

Does anyone else feel like we are living through The Rapture? The Chosen ones – David Bowie, George Michael, Carrie Fisher, etc., – are being carried off to a better place while the rest of us heathens stay behind to suffer Drumpf for all eternity. We can all agree 2016 has been literally the worst. I’m not sure saying goodbye to it will make anything better though. Just when you think things can’t get any worse – they can. Do we have any reason to think 2017 will be an improvement with Drumpf – aka. King Jesus – and Pence leading the way?

light-at-end-of-tunnell

Over the last couple of weeks we’ve also had some bizarre murmurings about HRC’s loss from Obama and everyone’s apparently favorite uncle Joe Biden. (Nevermind that Biden is a gaffe machine who once said it was nice that Obama was so clean, among many other stunning pronouncements). Obama declared he definitely would have won if he ran against Trump (thanks Obama!) and Biden said Hillary never figured out how to run. This is from a guy who has run for President how many times and always dropped out with single digit support? Now Biden says he might run in 2020. Ok fantastic, good luck with that uncle Joe. With friends like these who needs friends? So how about Obama and Biden shut the hell up at this point? And while they’re at it, can they shut Bernie up too?

Speaking of Bernie, I’ve had it up the wazoo with Bernie and his Bros. We are still hearing them tell us how much we don’t understand the suffering of poor white men in the rust belt, and how we should not look down on them, and our condescension of their deplorableness is one big reason HRC lost the election (they don’t really care about the popular vote any more than Drumpf does.)

Ok look, this might sound harsh, but we don’t care about political correctness anymore, right? And these are tough guys, they’re men damn it, they can handle the truth.  So here goes: I have no doubt poor white men in the rust belt are suffering. But whose fault is it? Whose freaking fault is it? Apparently it’s HRC’s fault, and my fault and all of your fault Widdershins. We just don’t take care of them enough. Boohoo poor babies. Wahwahwahwahwah. My coal job is gone and I can’t get black lung disease anymore! And “fixing” Obamacare might get rid of my black lung health insurance!

woe-is-me-e1346181134882

Ok, you know what? I’m done being blamed for that shit. The world evolves and people must evolve with it. Once upon a time everybody was a farmer. Then the Industrial Revolution came and people had to evolve and adapt. So they lost their farming jobs anddinosaurs-missingark-jpg-w300h308 moved to the big cities and started working in factories. Now we are living in a post-Industrial world, we are in a technological age. Maybe these poor white men in the rust belt could turn off NASCAR and crack open a damned book and learn something? Maybe go to a community college and get a degree in something instead of longing for the golden age of coal mines? It’s just a suggestion. Stop mocking the coastal elites who work long hours in offices and who went to college and got college degrees and massive student debts. I have a friend who works full time at Teach For America and goes full time to the New School. He has asked me for small loans to buy food a few times because his entire salary is spent on school and rent (with roommates.) These are the choices he made and I’ve never heard him blame anyone for them. He chose to go to school to get a masters while working full time and living in Brooklyn. So how about these poor white men in the rust belt stop whining and demanding things from everyone, blaming coastal elites for their troubles, while accepting no responsibilities for their own choices and actions. And how about Bernie Bros stop patronizing them and treating them like little children who are apparently so stupid that after a two year Presidential campaign HRC was somehow unable to connect with them. Excuse me, are they complete idiots who are incapable of critical thinking? Well, I tend to think “Yes, they are.” These are the people who year after year vote against their won self interests. In 2016 they voted for Drumpf. Seems pretty stupid to me. But Bernie/Bros tell us to stop condescending to them. Ok fine, let’s stop condescending to them, let’s treat them like adults with a few still living brain cells and hold them accountable for their own actions. Stop blaming everyone for these people’s stupidity and maybe spread out some blame for our current predicament to these people themselves? I mean, go ahead and blame HRC for her failures (I’ll assign one: it was obviously a mistake to spend time, money and resources trying to flip Georgia blue.) But stop blaming HRC for these poor suffering white men’s own failures as well as her own. I think we are all tired of being everybody’s whipping boys/girls, no? Take some responsibility for your actions folks in the rust belt and Bernie Bros who love them. You voted for Trump because you don’t like women, because you get bored by policy, you never looked at HRC’s plans for job creation in your regions, you only watched Faux News and read Breitbart for your breaking news, you thought e-mails were a really big deal. Own it. Hmmkay thanx bye.

emotional-rollercoaster

What’s on your minds Widdershins? This is an open thread.

Apologies to Carly Simon, but…Carly Simon

We’re so vain, we probably think this economy is about us,
We’re so vain, we bet future swaps this economy is about us,
Don’t we? Don’t we?

A few years ago, when the Chinese economy was booming, politicians said it was an orchestrated plot to take America down.  Now that the Chinese economy is struggling desperately, those same politicians are just as convinced it is – wait for it – a plot to take America down.

The political discourse around this issue is genuinely unhelpful.  Just like Seinfeld’s Soup Nazi, Scott Walker snapped, “No state dinner for Xi,” the Chinese President Xi Jinping scheduled for a formal state visit.  I guess the closest Benihana will have to do.  Given the impetuous inanity passing for policy, here’s what you need to know about the China Syndrome of the Chinese economy in less than 800 words.

Chinese Stock MarketChina’s stock market is relatively small.  It’s mostly mom and pop investors who have borrowed the money to buy stocks – a majority of them don’t have a high school education.  After gaining 140% last year, this year the Shanghai Composite Index has fallen 40% in the face of a tremendous amount of active intervention by the Chinese central government.  It seems as though the Politburo can’t stop the crash.

The reason all these unsophisticated investors got into the stock market was the implicit support of the Chinese Communist Party.  It appears to have been an overly optimistic act of faith in the Chinese Politburo’s economic stewardship.

With an abundance of labor, China bet the farm on being the world’s low-cost manufacturer and assembly line.  Such an economic model is not sustainable for an economy needing to grow at a double-digit multiple to service a burgeoning middle class.  The Chinese government has been notoriously optimistic in its economic forecasts (some say notoriously deceiving).  There are more than a few economists who believe the Chinese economy is on the verge of recession, if not already there.

This is how it happened:  When global demand went kaput in 2008, China decided to focus on massive domestic Empty cityconstruction projects.  There has been a massive, and I do mean massive, overbuild in China with unused stadiums, skyscrapers, and even whole cities.  They sit empty.

Add to this the relocation of 250 million Chinese from rural settings to cities in just twelve years as official state policy.  In essence, this top down policy from the Politburo turns China into a majority urban country in a dozen years.  Put another way, it would be the equivalent of relocating 5 of every 6 Americans in the span of three presidential terms.

Chinese leadership is terrified of political unrest reminiscent of Tiananmen Square.  Without sustained growth at a level sufficient to service a growing middle class, the leadership of China is at a crossroads.  At once they are both risk-willing to try just about anything to thwart economic upheaval and at the same time, risk-averse against any potential calamities resulting from their actions.

Chinese Stone SoldiersThere is a group of millennial Chinese numbering about 300 million – about the size of the total U.S. population.  This group is better educated and likes its taste of the middle class lifestyle.  The Communist Party worries most about this group.  Quelling political unrest in this group would be difficult, almost impossible, because of the nomadic nature of these 300 million workers and their widespread geographic dispersion.

In its simplest terms, the problem is transforming a manufacturing, rural economy into an urban, consumption-based economy in less than a generation.  For perspective, it took Great Britain 200 years, the U.S. 100 years, and Japan 50 years to do the same thing.

As with all instances of massive historical change, there are naysayers within the Chinese system.  China’s top-down, hierarchical structure ensures elites have control over policy and decision-making.  These traditionalists are wary of many of the enacted economic reforms.  This current economic tsunami strengthens traditionalists at the expense of reformers like President Xi Jinping.

How does this affect us?  Throughout history, when absolute control is threatened in China, it retreats back in on itself.  Hibernation of the world’s second largest economy would be the equivalent of a worldwide recession and catastrophic to our economic well-being and the world economy in general.Chinese Stone Soldiers

Even more sobering is this:  Political instability in a country with a standing army of 200 million soldiers and perhaps 3,000 nuclear warheads is indeed a worrisome thing.  This is especially true in a region where China is surrounded by emerging economies – the “if you can’t make it, take it philosophy” would indeed present existential threats.

Again, my apologies to Ms. Simon:  “Instead of clouds in my coffee, clouds in my coffee,” there are clouds on the horizon, clouds on the horizon.

Take the conversation in any direction you might like.

 

 



Happy Friday, Widdershins.  The long and difficult week is over.  The Vandals have invaded Washington City, and immediately began laying waste to civilization as we know it.  I won’t rehash the details so eloquently reported by Prolix in his Tuesday post, as my one and only Economics class was a required one back in 1967.  In fact, I would go so far as to quote Thomas Carlysle in regard to my economics acumen:  “Teach the words ‘supply’ and ‘demand’ to a parrot, and you have an economist.”  Yep.  I’m right there with the parrot in the comprehension department.  I know the words, and I know what they mean.  As to the rest, I am guessing.

I can, however, guess that Rep. Paul Ryan’s dynamic accounting methodology has its roots in the Reagan Administration’s voodoo economics, which tripled the national debt.  I can also guess that there are a blue million committees and even more subcommittees that are germinating in those dark corridors as we speak, and that every one of them is exploring some method to ascertain that the 99% find some other way to make the 1% more comfortable.  I can guess that Mitch McConnell’s bloviating claim that the economy is improving because we all knew that the Republicans were taking over is solid gold bull-puckey.  Even the Daily Caller is amused.  To wit:

Senate Majority Leader Mitch McConnell credited the new Republican Congress with recent economic improvements in a statement Wednesday outlining the Senate’s legislative priorities.

“After so many years of sluggish growth, we’re finally starting to see some economic data that can provide a glimmer of hope,” McConnell said. “The uptick appears to coincide with the biggest political change of the Obama administration’s long tenure in Washington: The expectation of a new Republican Congress.”

The economy grew 5 percent in the third quarter of 2014, and unemployment is relatively low at 5.8 percent. President Obama boasted of 57 straight months of job growth in December, and 10.9 million new private sector jobs.

So there you have it – two days into the new (not necessarily) improved Congress, all is well because “we” are here, and all the gains of the past year are because “we” are here.   “Supply and demand” – you’ve got it.   Jon Stewart has a slightly different take, and suggests that rubbing Mitch McConnell’s shell will produce five years of business growth.  Either way, it’s supply and demand:  the difference is perspective.

Best of all is the decision to tinker with the funding for DHS because the Republicans are in a snit about the President’s immigration plan.  How perfect will it be to defund the department charged with protecting our borders as retaliation?  Will we get to see those cantaloupe-calved Mexicans scurrying across the Rio Grande, or are they limited to the darkest portions of Louie Gomert’s dreams?  Stay tuned.  In the meantime, I have a suggestion to make, a wee modest proposal of sorts.  If the Repubs won’t fund something, let’s Crowdsource it.  The White House/Democratic caucus can put up a Crowdsourcing page for Border Patrol salaries, and I’ll bet the Right Wing will pony up.  Put up another for food stamps for the elderly, and invite the church groups to pitch it.  Need money for education?  Not a problem – all those people who scream about better schools will have the opportunity to put their money where their mouth is, and perhaps a number of the foundations pledged to same might well help.  If you can’t get over the wall, trying walking around it.

In the meantime, Congress will then be freed up for the really important stuff, like investigating Benghazi and defunding Acorn.  And bailing out Steve Scalise – you know, the really, really important stuff.   Like working on their tans, and golf, and…….

This is an open thread.

Good Thursday, Widdershins.  I hope that your week has gone well thus far.  We have heard a great deal regarding the vast impositions being placed on both religious institutions and People of Faith by the nefarious actions of the federal government.  I could have sworn that I have heard/read everything possible, but I was wrong.  In fact, stone cold wrong.

Today, I read an article posted on Real Clear Politics in their religion section.  The post was written by one Robert Sirico, and I had not heard of him before.  Clearly, Mr. Sirico is a devout Catholic, and the article entitled “Hobby Lobby’s Liberty and Ours” reflects his most sincere beliefs,  The article also awakened me to some facts that had heretofore passed me right by, such as the fact that federal money is going into the coffers of religious institutions. I cannot seem to find any clear-cut figures that would quantify the amount of funding and the various recipients, so if anyone knows that answer, please feel free to share.  Mr. Sirico actually wrote the article to decry the amount of time, effort, and dollars that religious institutions were spending on legal fees to “defend” their long-held positions against “secular” interference from government agencies, various.  He also comments that the current administration is the most secular in the nation’s history.  (Funny.  Doesn’t seem that long ago that the Prez was decried as a Moslem/Liberation theocratic.  Now he is suddenly hyper-secular.  Who knew?)

The brouhaha du jour involves the Catholic Church’s semi-apoplectic reaction to the latest round of stipulations regarding the payment of employees of federal contractor.  Again, who knew that the Catholic Church is considered a federal contractor?  Certainly not me.  Seems that The RC church gets federal dollars for  social services, so they fall under the mantel of a contractor.  From the article:

On July 21, President Obama issued an executive order that prohibits federal government contractors from “sexual orientation” and “gender identity” discrimination and forbids “gender identity” discrimination in the employment of federal employees. In a scathing response, the U.S. Conference of Catholic Bishops decried the executive order as “unprecedented and extreme and should be opposed.” The bishops’ response, authored by Archbishop William Lori of Baltimore and Bishop Richard Malone of Buffalo, asserted that “in the name of forbidding discrimination, this order implements discrimination.” The bishops predicted that “faithful Catholics and many other people of faith will not assent” to the deeply flawed understanding of human sexuality undergirding the order. “As a result, the order will exclude federal contractors precisely on the basis of their religious beliefs.”

While being a practicing Catholic is long ago and far away for me, I have family members and friends who would qualify nicely for this category.  I assure you that none of them will be remotely upset if women are paid as well as men, and if the minimum wage ticks upward.  They just won’t, your Eminences.  Cross my heart and hope to die. But, there’s more

:This means that Washington will now police the hiring and staffing policies of any church or charitable organization that holds federal contracts. The irony here is that the Catholic Church unequivocally opposes discrimination based on gender or sexual orientation, without compromising its teachings on marriage or family. Who holds the moral high ground on this question, the federal government or the Church?

I’m going to go out on a limb here and suggest that the Roman Catholic Church has been anything but a bastion of equity., at least with regard to gender issues.  (The Church was stellar on civil rights racial issues.)  Even Pope Francis, who so generously welcomed gays back into the church and is a veritable model for social justice has admitted that he cannot elevate the status of women to equity without rattling the age-old Church doctrine of the patriarchy.  Ergo, the Church may oppose discrimination, but lives it on a daily basis.  Sad to say, but the Church would have to look up to view the high moral ground in this particular instance. So here is the dilemma, as I see it:  the Church is the pinnacle of efficiency when it comes to social services.  They run Catholic Charities beautifully, and not a dime goes to “administrative costs”.  They fund raise well, and can stretch a dollar until the eagle begs for mercy.  They put their money where their mouth is.  BUT – and a big but is indicated – if they are taking federal dollars collected from people of all faiths, can they insist on using that money only by their own patriarchical standards? This is not church money, so the grounds by which they can claim an exception are shaky at best.  They are contractors, plain and simple, and the rules should apply to all equally. Mr. Sirico eventually says something with which I can agree wholeheartedly:

 This was, in a way, inevitable. I’ve been sounding the alarm for more than two decades about the risks of church-based groups — Catholic Charities comes immediately to mind — becoming overly dependent on government contracts. What we should do is to “reprivatize” private charities. That’s the only way these religious groups will be truly accountable and truly private.

Cue the applause.   Way to go, Mr. Sirico.  If it’s their money, they will simply fall under the laws of their individual states, as we do not allow slavery, human sacrifice, or marriage to multiple women who happen to be in the seventh grade, and churches are not immune to state and federal laws.  Just ask Jim Baker and Warren Jeffers.  However, he did not ask the one question that I think is paramount:  Doesn’t the act of giving federal funds to various churches violate the separation of church and state?  Think about it.

This is an open thread.  (If you look carefully, my significant other is the last snare drummer on the right, many moons ago.  Yes, we have very strange hobbies.)

Afternoon Widdershins.  I hope you survived St. Patty’s Day and are basking in the first glimpses of spring.

Quite fortuitously, a couple of new reports surfaced this week that nicely dovetail with Tuesday’s post.  My apologies for nerding out yet again so soon on an economics post, but these reports are important.  They will arm you with a silencing rejoinder for any wayward soul crossing your path spouting the typical Tea Party tripe associated with know-nothing, coffee klatch economics.

First, there is the report of the Organization for Economic Cooperation and Development (OECD).  Thirty-four developed nations are a part of the OECD and once again, the United States leads in economic inequality while at the same time we are the fifth highest with 17.4% of our population falling into poverty.

Graph Share of Income for the 1 percent

A few data points as you are looking at the OECD graph.  Most importantly, NO investment income is included in these numbers.  That’s right — these numbers are exclusive of any capital gains.  The top 10% are closing in on 50% of the economic pie leaving the 90% of the rest of us to divvy-up the remaining 50%.  The pre-tax income going to the top 1% has more than doubled since 1980 when we replaced sound economic principles with political sloganeering.

There are two other data points I want you to consider.  Look at the meteoric rise since 1980s and then compare where we are today as opposed to the last Gilded Age of 1920.  The wealthy have surpassed their previous high watermark!  Simply put, it is a great time to be rich!

But not such a great time to be poor.  The poor have not bounced back at all since the economic ravages of 2008.  The number of Americans reporting they are unable to afford food for their families has risen by 50% since 2008.

This is what income inequality looks like in Sao Paulo...

This is what income inequality looks like in Sao Paulo…

You are probably thinking, I already know all this — old Prolix has harped on this issue for years now.  This is where the new information comes, but first, I need to clear up some definitional remnants — the words entitlements and redistribution.  I hate, hate, hate, and abhor those words.  They are words most likely spawned from the satanic synapses of Frank Luntz — chosen not for their accuracy, but for their visceral emotional impact.

Both entitlement and redistribution are pejorative words for the way one person sees another person’s expected largesse.  Whether it is a single mother receiving food stamps for her children or a hedge fund manager being taxed at the special and reduced rate of 15% for carried interest, they are both governmental entitlements and redistribution.

Whether it is an earned income tax credit for the working poor or an international corporation paying an effective tax rate of 12.6% (less than the working poor), both are instances of governmental redistribution.  Whether it is a senior citizen receiving social security and Medicare or a venture capitalist larding up an otherwise profitable company with monstrous management fees to just put the company in a debt death-spiral as a tax strategy, they are both government sanctioned acts changing the otherwise status quo.  Both are entitlements and redistribution.  To mix metaphors, all that matters is when the music stops someone else is dancing with a gored ox.

That little definitional interlude leads us to the second report.  This one was released by the International Monetary Fund.  As you might know, the IMF is anything but a “librul-leaning” organization.  It is heavily skewed toward business and economic development — growth is their stated and implicit goal.  That fact alone is why I was surprised their report didn’t get any play whatsoever in the press.

Out of a Himalayan mountain of data and research, the IMF report challenges the old saw and conventional economic wisdom that redistribution undermines growth.  The report proves just the opposite, if anything, right-sized redistribution enhances and supports faster and more durable growth.

Conversely, income inequality hurts, hampers, and hamstrings economic growth.  Simply put, as inequality increases, growth declines.  Here are two graphs demonstrating the point.

Inequality a drag on the economy

Of course this type of unconventional counter-intuitive thought is sure to ignite a maelstrom on the right.  Why would anyone in the One-percent crowd dare to engage in fact-based self-awareness when they have emotionally charged sophistry in which to drape themselves?

Speaking of the total lack of self-awareness in the moneyed class here’s a great illustration.  In his most recent prison interview, that bastion of free-wheeling capitalism Bernie Madoff said, “I’m not a great fan of redistribution of wealth.”  I guess Bernie prefers the old-fashioned private sector type of redistribution — plain old theft and fraud.

The IMF research contains recommendations such as needs testing Social Security by phasing out high wage earners, improving educational access — particularly college, improving access to health care, and reforming the tax code to make it more progressive thereby eliminating exemptions and deductions.  The research finds by appropriately modulating redistribution it results in a win/win situation — faster, long-term, durable growth while meeting the needs of the less fortunate.

The big takeaway is this:  Redistribution is a good thing for economies when right-sized and moderated.  Both too much redistribution and too little redistribution are bad for any economy.  Just like Goldilocks, if it is just right, everyone is better off since we all do better when we all do better.

This is an open thread.

”You just don’t in the 21st century behave in 19th century fashion by invading another country on completely trumped up pretext.”   John Kerry

Good Thursday, Widdershins.   As a rule, ’tis a blessing to be Irish, or so my mother told me.  This week we celebrated the Irish High Holy Day,  and now I’d like to move on to some very strange behavior that surrounded The Day..  Maybe there’s a holiday aura to SPD that renders one stupid, as the days surrounding Christmas appear to invite depression.  This aura appears to affect all creeds and nationalities equally, and that’s fair enough.  If everyone is Irish on SPD, they should all share equally in the holiday blowback.

No, I don’t mean the donning of green apparel, and attempting to learn to step dance, getting your brogue on,  juggling Guinness or any of the other bizarre rituals of the 17th of March.  I mean statements like the above-referenced quote from John Kerry, of the nearly Irish Catholic Ilk.  Secretary Kerry made that infamous statement with regard to the Russian incursion into Crimea, as he had apparently clean forgotten about the US invasion of Iraq.  Or perhaps he remembered after he had forgotten, as he was against it after being for it – no matter.  He then concluded by stating that Russia was inviting international opprobrium.  David Gregory neither reminded nor challenged the Secretary.  He sat there expressionless – perhaps he was too stunned to comment?

And speaking of Guinness, my next nominee is a full-blooded Irish Catholic (FBIC), and half-*ssed jerk, Bill Donohue.  Bill is quite annoyed with Heineken, Guinness, and Sam Adams breweries, and wants them boycotted forthwith by all right-thinking Catholics.  The beer troika withdrew from the St. Patrick’s Day parades in New York and Boston, which are truly the grandaddies of all SPD parades, because the management declined to allow participation by identified LGBT groups.   Bill is righteously indignant, and penned the following for the Catholic League:

None of these companies believe in diversity. No gay person has ever been barred from marching in any St. Patrick’s Day parade, anymore than the parade bans pro-life Catholics or vegetarian Catholics; they simply cannot march under their own banner. The parade has one cause: honoring St. Patrick. Those who disagree do not have to march—that’s what diversity is all about.
The parade is quintessentially Catholic, beginning with a Mass in St. Patrick’s Cathedral. It is this Catholic element that angers those who are engaged in a bullying campaign against the St. Patrick’s Day parades. The bullies also have nothing but contempt for the constitutional rights of Irish Catholics.

Yes, indeedy, Bill is but a victim here.  A victim of the big, bad, beer troika whpch dared to see through the privately organized parades.  Many cities began using privately organized parades so that they could bar the organizations of their choosing as “not fitting in”.  And, Bill is correct – those who disagree do not have to march – Heineken, Guinness, and Sam Adams disagreed and did not march.  So, what’s the problem here, Bill?  Since when has disagreement with your stand been equal to contempt for Irish Catholics/denial of First Amendment rights?  We have a long, sorry history of repression, and the absence of three breweries from two parades does not hold a candle  to starvation, insurrection, the death of Bobby Sands, or the Black and Tans.   Godwin’s Law will soon require an Irish codicil should this keep up.

As long as Godwin’s Law has been mentioned, Ken Langone is the most recent example.  (He’s also my not Catholic, not Irish example.)  As a  Jewish person, Mr. L. should probably be exquisitely sensitive to lame Holocaust comparisons. but apparently he is not.  In Tuesday’s Politico, Langone discusses the evils of populism, and is  quoted as follows:

“I hope it’s not working,” Ken Langone, the billionaire co-founder of Home Depot and major GOP donor, said of populist political appeals. “Because if you go back to 1933, with different words, this is what Hitler was saying in Germany. You don’t survive as a society if you encourage and thrive on envy or jealousy.”

Now, let me get this straight (pun absolutely intended): , Mr. Langone, the peasants need to starve cheerfully, or the next thing you know our Jewish citizens will find themselves living in a concentration camp.?  And Mr. Donohue, do you really honestly believe that it’s Irish Catholics that the beer troika are boycotting?   (What, exactly, would they do without us???)  I shudder to think of what might happen should the two of these guys ever meet.  Perhaps Secretary Kerry could explain “inviting opprobrium” to these gentlemen.

This is an open thread.


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