Annals of global warming: Would you worry if it shrinks your paycheck?

October 26, 2015

Then worry.

Scientists estimate the impact of climate change on the world economy - from Nature Magazine

Scientists estimate the impact of climate change on the world economy – from Nature Magazine via MarketWatch

MarketWatch’s Silvia Ascarelli wrote:

Your grandchildren may pay a bigger price for global warming than you thought.

A hotter Planet Earth will cool down national economies, according to fresh research from scientists at Stanford University and the University of California, Berkeley.

Average U.S. income could shrink 36% by 2100 because of climate change from what it would be without global warming, they say. That is more than other, earlier studies have suggested.

But not all countries will suffer. Russia, Canada and countries in Northern Europe should benefit from warmer temperatures, according to the scientists’ models, because they have yet to reach what the scientists called the optimal average temperature for an economy — 55 degrees Fahrenheit, roughly where the U.S. is now.

“We were surprised at how important temperature is for the global economy,” said Solomon Hsiang, an associate professor of public policy at Berkeley and one of the co-authors of the study along with Marshall Burke, an assistant professor in earth system science at Stanford, and Edward Miguel, Oxfam professor in environmental and resource economics at Berkeley.

Global per capita gross domestic product will be down 23% at the turn of the next century if global warming isn’t slowed, the study found. The impact will be more severe in China — average income will shrink 43%—and Mexico, where average income could plunge 73%.

More at MarketWatch.

Should we worry? Can we afford global warming?


Yeah, if you put it that way, Obama is a very successful president

December 18, 2014

Got this chart from the national Democrats, The Democratic Congressional Campaign Committee (DCCC):

Obama is a very successful president.

Obama’s presidency is a success, by the GOP’s favorite numbers.

An old friend on Facebook told me he wants verification of the numbers, because he doesn’t feel it. Few of us below the very, very rich feel it — which is what Obama’s been saying, and what Sen. Bernie Sanders, Sen. Elizabeth Warren, Paul Krugman and Robert Reich have been saying in various ways daily.  That’s what the struggle on income inequality is all about.

But the numbers check out.  Go see for yourself (some of the sites I list below update monthly, or daily, so if you’re not looking at this in December 2014, they may vary; look for the link to historic numbers).

I wrote:

Numbers are dated in Consumer Confidence (but much higher than I thought! See below).

But the other numbers are well published.

Dow Jones Index plugged at least nightly on NBC, ABC, CBS and PBS — hourly at least on CNN and MSNBC (I don’t get the latter two).

http://stockcharts.com/freecharts/historical/djia1900.html

Unemployment is updated monthly by the Bureau of Labor Statistics — and again, plugged on national news when it happens.

http://www.bls.gov/bls/unemployment.htm

GDP growth:

http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG
and
http://www.bea.gov/newsreleases/glance.htm

US deficits as % of GDP:

Bloomberg press report:
http://www.bloomberg.com/…/u-s-deficit-decline-to-2-8…

St. Louis Branch, Federal Reserve:
http://research.stlouisfed.org/fred2/series/FYFSGDA188S

Consumer Confidence is tracked by the anti-Obama Conference Board:

http://www.conference-board.org/data/consumerdata.cfm

Reuters report on October Consumer Confidence report:

http://www.reuters.com/…/us-usa-economy-confidence…

As a socialist anti-free market guy, Obama is the worst in history.

Now will you listen to Obama when he tells you that we need to do something OTHER than what the GOP says, to make the growth something YOU feel? Please?

So tomorrow, and every day until January 21, 2017, when your very conservative and otherwise not stupid friends tell you we must “cut government” because “America can’t afford to be great any longer,” instead of flipping them the bird like you usually do, send them here to get the links to look at the numbers for themselves.

Don’t take my word for it, nor the DCCC’s word for it. Look for yourself, using the sites I’ve listed above.

Now ask: Why can’t Congress figure this out, and give Obama some support?


Insta-Millard: In the new Gilded Age, the rich do not share the wealth

May 6, 2014

Have the GOP and the Über-wealthy set up the whole world for another Great Depression?  Should we expect a World War to follow?

Or, do we have time to make our societies more egalitarian, and more anti-poverty, and more stable?  Graphic from BusinessWeek:

Super wealthy have concentrated the wealth of the world in their personal control.  Capitalism run riot? Graphic from BusinessWeek

Super wealthy have concentrated the wealth of the world in their personal control. Capitalism run riot? Graphic from BusinessWeek

Opportunity to move up, economically, is stifled when so much wealth blocks access to the top economic rungs.

These figures come out of a clever analysis by economists Emmanuel Saez of the University of California at Berkeley and Gabriel Zucman of the London School of Economics, who is a visiting professor at Berkeley. The Internal Revenue Service asks about income, not wealth, which is the market value of real estate, stocks, bonds, and other assets. Saez and Zucman were able to deduce wealth by exploiting IRS data going back to when the federal income tax was instituted in 1913. They figured out how much property different strata of society owned by looking at the income that was generated by that property, such as dividends and capital gains. To simplify, if a family reported $1 million in rental income one year and the market rate of return on rental properties was 10 percent, then Saez and Zucman concluded that the family must have owned property worth $10 million.

The message for strivers is that if you want to be very, very rich, start out very rich. The threshold for being in the top 0.1 percent of tax filers in 2012 was wealth of about $20 million. To be in the top 0.01 percent—that’s the 1 Percent club’s 1 Percent club—required net worth of $100 million. Of course, even $100 million is a pittance to Bill Gates, whose net worth, according to the Bloomberg Billionaires Index, is nearly 800 times that.

It will require great creativity to work our way out of this maldistribution without some sort of catastrophe.

More: 

Read the rest of this entry »


A lot of people reading Piketty — the right ones? Enough to matter?

April 23, 2014

An article in the Washington Post calls Thomas Piketty’s book, Capital in the Twenty-first Century, a “runaway best seller.”

Have you read it?

Thomas Piketty - Professor of Economics, Paris School of Economics; photo from The Next Deal

Thomas Piketty – Professor of Economics, Paris School of Economics; photo from The Next Deal

Are you aware of the contents?

Are the right people reading it — especially GOP Members of Congress whose minds need to be changed?  Or, are enough people reading it to make a difference in American politics?

There are presses cranking it out in the United States, India and Britain, and the book is in at least its fourth run. Even though the book was already a hit in its native France, it’s now taking off among English readers around the world, said Donnelly. She expects that sales in China, Hong Kong and Japan will also soon follow.

Piketty, already widely cited for his work on income inequality, has clearly touched a nerve. The book argues that the underlying mechanisms of capitalism tend towards massive inequality. Piketty argues that the era between 1930 and 1975 — often hailed for the way in which wealth was broadly shared — was actually a departure from the norm. That period of economic growth, he says, was the result of unusual circumstances like World War II, a global depression and the government’s actions in the aftermath of those events: strong policies raising taxes and increasing regulation. But now, with many of those policies rolled back, societies are reverting back to extreme inequality.

What do you think, read it or not?

More:


Milton Friedman really said higher wages make a nation prosperous?

December 18, 2013

Chicago University and Nobel-winning economist Milton Friedman, inspecting fruits of free markets.

Chicago University and Nobel-winning economist Milton Friedman, inspecting fruits of free markets. (Photo found at Crooks and Liars, with quote of Friedman’s explaining the benefits of things like that Earned Income Tax Credit)

In Free to Choose, Milton Friedman wrote:

But when workers get higher wages and better working conditions through the free market, when they get raises by firm competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. They can only come from higher productivity, greater capital investment, more widely diffused skills. The whole pie is bigger – there’s more for the worker, but there’s also more for the employer, the investor, the consumer, and even the tax collector.

That’s the way the free market system distributes the fruits of economic progress among all people. That’s the secret of the enormous improvements in the conditions of the working person over the past two centuries.

What would Friedman say about higher productivity and greater capital investment, an increasing pie, when the increases are denied to the worker, and the employer, and the consumer, and the tax collector?  Somehow, I think even Mr. No-government-regulation would cry, “Foul!”

Heck, that’s a good argument for raising the minimum wage, and for fixing income inequality.

More:


Winners and losers in ObamaCare

November 1, 2013

Chart based on Jonathan Gruber’s calculations here, in The New Yorker.  Gruber was on PBS’s NewsHour a few days ago, opposite a cranky old man from the Heritage Foundation who seems to be offended that he gets a fat paycheck.  Transcript and much more information, here.  Video of entire segment (including report on House hearings on the “glitches”), below.

Jonathan Gruber, a professor in MIT's Department of Economics Photo: M. Scott Brauer

Jonathan Gruber, a professor in MIT’s Department of Economics Photo: M. Scott Brauer

Gruber was interviewed by economics reporter Paul Solman earlier, and that appeared on NewsHour’s blog, on October 1; that transcript is here.

More:


Reminder: How wealth inequality crowds out America’s success

October 7, 2013

Upworthy reposted this little movie today, which reminded me that nothing good has changed since last March. Looks like there’s not much chance of saving America soon, either, with the way things are going in the Capitol.

Is it time to really write the obituaries for America?  I hope not.

Watch it again:

What happens when a lot of money — I mean, a lot of money — is concentrated in a few hands?

The nation runs the risk of economic failure.

This short video says that more money is concentrated in fewer hands than we think.

Description from the maker, Politizane:

Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

This is just one facet of the figures necessary for having rational discussions about tax reform, federal budget and deficit cutting, tax policy, and economic and monetary policy.

But it’s an ugly portrait, isn’t it?  How much does it differ from the France of Louis XVI and Marie Antoinette?  How much does it differ from the going-to-hell-in-an-accelerating-handbasket U.S. of 1929?  Wealth’s concentration in the hands of a tiny few literally crowds out hundreds of millions of Americans from the ability to successfully accumulate modest nest eggs.

What do you think?

I wish the film’s creator had provided citations.

Have things improved since 2007?  Look at this chart based on Institute for Policy Studies figures:

Maldistribution of U.S. wealth, 2007; Inst for Policy Studies

Source: Institute for Policy Studies, via BusinessInsider

More:

More, since the original posting:

Update March 9, 2013:  This is funny, to me:  Some people think just talking about this stuff is “class warfare.”  How are they so familiar with class warfare, you wonder?  That’s a self-answering question, isn’t it?

 


Remedial economics, remedial U.S. history

May 20, 2013

I should set a threshold — five e-mails, or a dozen Facebook posts, and a response will be given.

But then some idiot would work to make the threshold.

You’ve seen this, of course:

5 misleading truths

“5 Truths You CANNOT Disagree With”

It was past the threshold, so I responded:

More truths:

  1. You cannot legislate poverty away by laws that send all the wealth generated by the working poor, to the rich.
  2. What one person receives without working for in capital gains, or productivity increases, another person worked for, without receiving. It is unjust to give the benefits of the sweat of one woman, to another man.
  3. Government subsidies create wealth in nations; most great enterprises have found their roots in government funding, from irrigation in Babylon, to farming along the Yellow River, through Columbus’s voyage of (accidental) discovery, the Transcontinental Railroad, and settlement of America.
  4. When opportunities exist for the poor, hard work makes much wealth. A society is wealthy, and an economy is sound, when the poor spend money. Rich guys spending money doesn’t work — there are not enough rich guys.
  5. When the rich tiny percentage of the people get the idea that they do not have to work, but that the work of others is ALSO their property and the poor will take care of them, then we have conditions for financial collapse (see the Panic of 1908, or 1837, or the Great Depression — or any other); those conditions often lead to revolution, sometimes violent (see Russia in 1917, Germany in 1922, Shay’s Rebellion, the French Revolution — when the rich get the rewards the hard-working man created, it is the beginning of the end of any nation. Some smart nations fix those problems when they occur.

When hard work no longer gets you ahead, and when hard work no longer will feed, clothe and educate your family, you may get angry.

“Those who make peaceful revolution impossible, make violent revolution inevitable,” John Kennedy said. He was pretty smart for a young, rich guy.

(Links added above, other than the YouTube video; I hope the JFK Library has video of Kennedy actually saying that.)

People who post these “5 truths” without irony must have slept through ALL of economics in high school, and forgotten everything they may have ever learned about American history in the 20th century.  Income distribution is a serious issue — maldistribution and misdistribution of wealth leads to trouble, either economic calamity, or violent revolution, or both.

It’s fun to say that no person should get ahead on the earnings of another person; it’s more realistic when we understand that a system rigged to give financial players yachts, and working people debt, is the unfairness that those worriers should worry about.

John F. Kennedy waves to a crowd in front of Cobo Hall, in Detroit

Presidential candidate John F. Kennedy waves to a crowd in front of Cobo Hall, in Detroit, during the 1960 American Legion Convention. Image from Walter Reuther Library

More:


How wealth inequality crowds out America’s success

March 4, 2013

What happens when a lot of money — I mean, a lot of money — is concentrated in a few hands?

The nation runs the risk of economic failure.

This short video says that more money is concentrated in fewer hands than we think.

Description from the maker, Politizane:

Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

This is just one facet of the figures necessary for having rational discussions about tax reform, federal budget and deficit cutting, tax policy, and economic and monetary policy.

But it’s an ugly portrait, isn’t it?  How much does it differ from the France of Louis XVI and Marie Antoinette?  How much does it differ from the going-to-hell-in-an-accelerating-handbasket U.S. of 1929?  Wealth’s concentration in the hands of a tiny few literally crowds out hundreds of millions of Americans from the ability to successfully accumulate modest nest eggs.

What do you think?

I wish the film’s creator had provided citations.

Have things improved since 2007?  Look at this chart based on Institute for Policy Studies figures:

Maldistribution of U.S. wealth, 2007; Inst for Policy Studies

Source: Institute for Policy Studies, via BusinessInsider

More:

More, since the original posting:

Update March 9, 2013:  This is funny, to me:  Some people think just talking about this stuff is “class warfare.”  How are they so familiar with class warfare, you wonder?  That’s a self-answering question, isn’t it?


Taking from the poor to give to the rich, 1979-2007

August 14, 2012

For honest seekers of economic truth, the question about what went wrong that led to the recent great economic collapse has deep roots — but not complicated roots.

Our increases in wealth came at the expense of the poor and especially middle class, and they went to the tiny fraction of people at the very top who now own much of your nation.

Redistribution of wealth, Paul Krugman from CBO figures

Paul Krugman’s graphic of redistribution of wealth in the U.S., figures from the Congressional Budget Office

Our most vocal Nobel-winning economist, Paul Krugman noted at his blog:

The top quintile excluding the top 1 percent – which is basically the abode of the well-educated who aren’t among the very lucky few – has only kept pace with the overall growth in incomes. Just about all of the redistribution has taken place from the bottom 80 to the top 1 (and we know that most of that has actually gone to the top 0.1).

Much of our current difficulty in climbing out of recession can be told from this chart.  People who would normally be spending money for food, gasoline, clothing, cars, home repairs and incidentals, simply don’t have the money to spend.  Consequently, demand is down.  Consequently, the top 1% will not invest their money in the U.S. to meet that non-existent demand.  This is the ultimate failure of “supply-side” economics writ large.  The very rich can consume only so much.  Additional wealth stashed away, even in domestic accounts, will not be spent for more food, or more housing, or more transportation.  Even the very rich can eat only so much, travel so much, and few of them behave exactly like Saddam Hussein, with palaces they will never even see.  Meanwhile, the bottom 80%, which includes the middle class, lacks money to spend on education, housing, durable goods, and transportation — despite needing more of all of those things.

Below the fold, the CBO report’s highlights press release, from the Congressional Budget Office.

Read the rest of this entry »


Income inequality: The snake that threatens to choke the economy

February 11, 2011

Quoted completely from the Economic Policy Institute:

In recent decades, the bulk of income growth in America has gone to the top 10% of families, but that was not always the case. Throughout most of the 20th Century, the bottom 90% claimed a much larger share of income growth than they have in recent years. The Chart, from EPI’s new interactive State of Working America Web site, compares the distribution of income growth over two periods. Between 1948 and 1979, a period of strong overall economic growth and productivity in the United States, the richest 10% of families accounted for 33% of average income growth, while the bottom 90% accounted for 67%. The overall distribution of income was stable for these three decades. In an extreme contrast, during the most recent economic expansion between 2000 and 2007, the period that led up to the Great Recession, the richest 10% accounted for a full 100% of average income growth.

Income inequality, from EPI

In other words, while average annual incomes over the seven-year period between 2000 and 2007 grew by $1,460, that growth was extremely lopsided. Average incomes for the bottom 90% of households actually declined.  The interactive feature When income grows, who gains?, on the new State of Working America Web site, lets users look at income growth and distribution patterns for any time frame between 1917 and 2008.

This new feature lets users choose any two years between 1917 and 2008 to see how much the top 10%, versus the bottom 90%, contributed to growth in average incomes. Because income growth can change a lot during periods of recession, researchers tracking trends in inequality often chart movements between the peaks of different business cycles in order to avoid comparing a high point in one business cycle to a low point in another. The interactive feature on income distribution also shows how an increasing amount of income growth has been flowing not just to the top 10%, but to the richest 1% of families.

More at the EPI website.

Econ chart - who gains, from EPI

Income inequality, Economics Policy Institute – click on image for a larger version

If you find it difficult to read the chart, you can click through to a larger version at EPI, or click on the thumbnail image for a larger one.

Wasn’t income inequality one of the key causes of the Great Depression?

Tip of the old scrub brush to reader Nic Kelsier, and to Luiz Carlos Abreu, who appends this note:

I wish the bottom 90% would let go of the myth that we can all be in the 10% richest. In fact, being rich does not mean having a happy not even non-stressful life, not if polls on the subject tell anything.

Never mind Christianity, Judaism, Islam — the real religion of most Americans seems to be Capitalism; there are even some fundamentalist capitalists. Its main beliefs seem to be:

  • The world has unlimited resources so long as we have faith in Money to whom nothing is impossible.
  • Only Money is God, those who have Money are His Prophets.
  • The Holy Sainthood and Divine Right of the Rich.
  • Money is happiness, and to be one with Money is the Supreme Happiness.
  • We can do all things through Money that enriches us.
  • An amount of Money is a measure of Holiness or Godliness, therefore separating Money is a sin and accumulating Money is a holy act.

I wish this was just a bunch of BS.

Also see:

 


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