In Germany, still a manufacturing and export powerhouse, average hourly pay has risen five times faster since 1985 than in the United States. The secret of Germany’s success, says Klaus Kleinfeld, who ran the German electrical giant Siemens before taking over the American aluminum company Alcoa in 2008, is “the social contract: the willingness of business, labor and political leaders to put aside some of their differences and make agreements in the national interests.”
In short, German leaders have practiced stakeholder capitalism and followed the century-old wisdom of Henry Ford, while American business and political leaders have dismantled the dynamics of the “virtuous circle” in pursuit of downsizing, offshoring and short-term profit and big dividends for their investors.
Henry Ford, When Capitalists Cared – NYTimes.com
3 Sep
Where the Mob Keeps Its Money – NYTimes.com
26 AugMoney is money, no matter how much blood drips from it.
THE global financial crisis has been a blessing for organized crime. A series of recent scandals have exposed the connection between some of the biggest global banks and the seamy underworld of mobsters, smugglers, drug traffickers and arms dealers. American banks have profited from money laundering by Latin American drug cartels, while the European debt crisis has strengthened the grip of the loan sharks and speculators who control the vast underground economies in countries like Spain and Greece.
Mutually beneficial relationships between bankers and gangsters aren’t new, but what’s remarkable is their reach at the highest levels of global finance. In 2010, Wachovia admitted that it had essentially helped finance the murderous drug war in Mexico by failing to identify and stop illicit transactions. The bank, which was acquired by Wells Fargo during the financial crisis, agreed to pay $160 million in fines and penalties for tolerating the laundering, which occurred between 2004 and 2007.
Household Income Down Since Recession
24 AugHousehold income has declined in the three years since the recession. According to a report by Sentier Research, a firm headed by two former Census Bureau executives, from June 2009 to June 2012 the inflation-adjusted median household income fell 4.8 percent to $50,964.
… Median income is now 7.2 percent below its December 2007 level and 8.1 percent below where it stood in January 2000.
CBO: U.S. Is on Track for a Terrible 2013 Recession (Unless Congress Acts) – Derek Thompson – The Atlantic
23 AugOn January 1, 2013, America’s tax and spending picture changes suddenly and dramatically. Taxes go up by about $400 billion. (The Bush/Obama tax cuts expire, the stimulus tax cuts expire, the payroll tax cuts expire, the business investment tax cuts expire, *and* the health care reform tax increases begin.) Spending goes down by about $100 billion. (The Budget Control Act, which cuts into discretionary spending, coincides with reduced unemployment insurance payments and a sharp drop in Medicare payment rates for physicians.) That’s a painful bite for an economy clinging to growth and 8% unemployment.
We’d lose our grip on both things — growth and 8% unemployment — without further action. Unemployment would go back to 9%. Real GDP would fall by about 3% in the first half of 2013. The double-dip would be very real.
Monkeys reject unequal pay
21 AugGreg Mankiw points us to this revealing video from Frans de Waal. This is an excerpt from a longer TED video, also excellent.
Follow the link and check out the video. It’s wonderful,
Isolated and Under-Exposed: Why the Rich Don’t Give – Neighborhoods – The Atlantic Cities
21 AugThe study looked at tax returns for people with reported earnings of $50,000 or more from the year 2008 – the most recent year for which data was available. The report found that for people earning between $50,000 and $75,000, an average of 7.6 percent of discretionary income was donated to charity. For those earning $200,000 or more, just 4.2 percent of discretionary income was donated.
Turns out lower giving among the rich likely has much more to do with where they live and who they live near.
As this accompanying article from the journal notes, when the rich are highly concentrated in wealthy enclaves, they’re less likely to give as compared with the rich living in more economically diverse neighborhoods. The report found that in neighborhoods where more than 40 percent of taxpayers reported earning $200,000 or more, the average giving was just 2.8 percent of discretionary income.
In other words, concentration of wealth is also isolation from the less fortunate.
via Isolated and Under-Exposed: Why the Rich Don’t Give – Neighborhoods – The Atlantic Cities.
On the Stump, Romney and Ryan Avoid Real Medicare Debate | The Nation
21 AugAll Romney/Ryan are doing is trying to hide from the American public just how badly they would shred the social safety net in order to pay for giving themselves giant tax cuts.
Ryan actually included the savings from cuts to wasteful private subsidies in the Medicare Advantage program that the ACA enacted—the same ones he now inveighs against in every speech—in his own budget. The reason he kept them in his budget, even while he votes to repeal the ACA and therefore would lose them, is because it gives him more breathing room. Take away those savings, and Ryan would have to come up with even more cuts to other popular programs.
The Obama campaign is understandably aggravated by their opponents’ cowardly refusal to stand and fight.
I’ll bet that Gary Johnson, Libertarian Party and Jill Stein, Green Party, would have a good and useful debate on Medicare.
via On the Stump, Romney and Ryan Avoid Real Medicare Debate | The Nation.
Five ways privatization is ruining America – Salon.com
17 AugThe incentive to fail was also apparent in road privatization deals in California and Virginia, where ‘non-compete’ clauses prevented local municipalities from repairing any roads that might compete with a privatized tollroad. In Virginia, the tollway manager even demanded reimbursement from the state for excessive carpooling, which would cut into its profits.
The list goes on. The Chicago parking meter deal requires compensation if the city wishes to close a street for a parade. The Indiana tollroad deal demanded reimbursement when the state waived tolls for safety reasons during a flood.
Plans to privatize the Post Office have created a massive incentive to fail through the Postal Accountability and Enhancement Act, which requires the USPS to pre-pay the health care benefits of all employees for the next 75 years, even those who aren’t born yet. This outlandish requirement is causing a well-run public service to default on its loans for the first time.
Also set up to fail are students enrolled in for-profit colleges, which get up to 90 percent of their revenue from U.S. taxpayers. Less incentive remains for the schools after tuition is received, as evidenced by the fact that more than half of the students enrolled in these colleges in 2008-9 left without a degree or diploma.
Don’t Waste the Drought – NYTimes.com
17 AugWE’RE in the worst drought in the United States since the 1950s, and we’re wasting it.
Though the drought has devastated corn crops and disrupted commerce on the Mississippi River, it also represents an opportunity to tackle long-ignored water problems and to reimagine how we manage, use and even think about water….
But just as the oil crisis of the 1970s spurred advances in fuel efficiency, so should the Drought of 2012 inspire efforts to reduce water consumption.
Our nation’s water system is a mess, from cities to rural communities, for farmers and for factories. To take just one example: Water utilities go to the trouble to find water, clean it and pump it into water mains for delivery, but before it gets to any home or business, leaky pipes send 16 percent — about one in six gallons — back into the ground. So even in the midst of the drought, our utilities lose enough water every six days to supply the nation for a day. You can take a shorter shower, but it won’t make up for that.
The good news: There are a number of steps that together can change, gradually but permanently, how we use water and how we value it. Some can be taken right now.
Truth and Traditions 