We see how German trade financing facilitated Greek excesses.
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It about inequality of opportunity.
"The absence of rewarding employment opportunities in the lower- and middle-income ranges breaks an important part of the social contract in America, which holds that you are largely on your own but that if you work hard the opportunities will be there. The second part of that contract is now in question. " University of Chicago Professors.
A job market paper from a Boston U Candidate. I have been saying theses things since the inception of the blog.
"Abstract Hourly wage data from 1990 to 2011 show a narrowing gap between the median wage and the 10th percentile wage, but an increasing gap between the median and 90th percentile wages. In this paper, I investigate the impact of offshoring on the employment and wage distributions to determine whether it has contributed to this convexification. I use a task-based framework of the labor market with three inputs and model what happens when the world price for the middle task input declines. The model predicts both a decline in domestic employment and a reduction in the wage paid to workers in this task, resulting in a rise in upper tail unemployment. However, I demonstrate that observed wages within an industry can rise due to selection. I construct a proxy measure of offshoring for both service and material inputs, and use industry level production and trade data from the US Census Bureau’s Census of Manufactures, and individual level wage data from the US Census and the American Community Survey to test the implications of the model. Offshoring has the anticipated effects on employment and convexification. I find a negative effect of offshoring on employment and a positive effect of offshoring on upper tail wage inequality. Moreover, current levels of industry offshoring are significantly correlated with an industry’s lagged occupational composition. In particular, both forms of offshoring decrease with the share of manual occupations and service offshoring increases with the share of routine occupations." Hubbard's behaviour falls into the realm of evaluation for positive economics not normative economics. He and others like him should be disavowed en masse for their lack of professional integrity and the call is not even close. And we need to get to a point in society where we stop giving people a pass for unethical behaviour just because it is legal. We are seriously undermining the case for democracy when we allow elites to fix the rules and dance around their edges.
For the record - I have only voted against the conservative party once in my eighteen years of voting eligibility. But everything conservatism stood for when I was young - pro family pro small business- is being undermined by current catering to oligarchy elites by the right. Business Insider.
"Moving on, Chanos tackled an even bigger storyline on Wall Street — the belief that the economy is being hurt by too much regulation and uncertainty. This narrative just "doesn't hold" when you look at the numbers, Chanos said. For example, The Fed Register of financial regulation has grown just as much under President Obama as it did under President Bush. And as for investment: "They say people are holding back investment ... and again, the numbers belie that," said Chanos. "Domestic GDP investment in the U.S. is back up just about to pre-recession levels and bottomed out in 2009, 2010 ..." The problem, he said, is actually that "the investment we're all looking for is actually saving labor ... Look at what the internet is doing to retail," he added. According to Chanos, investing in technology that makes things more efficient doesn't save jobs. So we're looking at a capital-labor tradeoff that's been going on for years. In the early years of the Bush administration this was masked by strong construction jobs but since the housing market collapsed, those are gone." Long time readers of this blog will know this lines up pretty well with my views on structural unemployment. Those wishing to see the video on Bloomberg. Matt Taibbi from Rolling Stone.
"To deal with this problem, the Dodd-Frank Act among other things included a simple reform. It required the financial advisors of municipalities to do two things: register with the SEC, and accept a fiduciary duty to respect the best interests of the taxpayers they are advising. Sounds simple, right? But Wall Street couldn’t have that. After all, if companies are required to have a fiduciary responsibility to cities and towns, how in the world can they screw cities and towns? The idea was a veritable axe-blow to the banks’ municipal advisory businesses." Seems like the only responsibility the elites are concerned with pertains to the poor for their lot in life. The concept of ethics and responsibility does not extend to the rich and powerful. Just make the unethical legal - and there you have it- our hands are clean. Mr,. Policeman go concern yourself with arresting minorities on petty drug charges -our hands are clean. Mitt -tell us again how the unemployed in the US should borrow $20,000 from their parents and start a business. It is such an inspiriing tale of individualistic entrepreneurship - like your personal story. Unfortunately, Obama-Geitner-Dems are not any better wrt to FIs. The march of progress seems to be speeding up. (My Thanks to Brent for these and many other links). This won't be good for structural unemployment and inequality. Routine jobs continue to be automated or outsourced. Will increasing trade sanctions be effective given technological changes?
The current debate around technology, globalization, and structural unemployment summarized in the NY Times.
"Both candidates are only tinkering at the edges of the most important issue facing the United States: the hollowing out of the employment marketplace, the disappearance of mid-level jobs...... Michael Spence, a professor at N.Y.U.’s Stern School of Business, and David Autor, an economist at M.I.T., have argued that this “hollowing out” process is a result of twin upheavals: globalization and the hyper-acceleration of technological progress." |
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