Heartiste’s Questions

Regarding the future:

1. How is the present automation and productivity conundrum qualitatively different than ones from the past (for example, the classic case of the auto replacing the horse and carriage)? If you do not believe it is qualitatively different, explain how we escape the “zero marginal productivity” worker trap, especially in an . . . → Read More: Heartiste’s Questions

Economics Question: Does Poverty Force People to Spend More?

Is being poor self-reinforcing because it forces one to spend more on stuff a little bit at a time over time, as opposed to saving up and/or forking over a large sum at once, and eventually spending less?

I don’t consider myself “poor,” but I do have a personal situation that illustrates the question:

. . . → Read More: Economics Question: Does Poverty Force People to Spend More?

Hysteresis

Benyamin Appelbaum:

More grim ruminations on our economic prospects: What if recessions do permanent damage, diminishing a nation’s productive capacity?

As I wrote on Thursday, recessions are commonly understood as disruptive rather than destructive to the economy as a whole. But a paper presented Friday at the Brookings Institution warns that recessions may do . . . → Read More: Hysteresis

CBO Nonsense

From the CBO Director’s blog:

Many factors are responsible for the rise in unemployment in general and in long-term unemployment:

-Weak demand for goods and services, as a result of the recession and its aftermath, which results in weak demand for workers;

The better question is: what is causing weak demand? Could it be . . . → Read More: CBO Nonsense

Greed

It’s the reason this happened:

Authorities say a teenage girl was trampled at a western Michigan Walmart store and suffered minor injuries after getting caught in a rush to a sale in the electronics department.

The Muskegon Chronicle reports the girl was taken to a local hospital Friday morning. Fruitport Township Supervisor Brian Werschem . . . → Read More: Greed

Inflation: Just Another Form of Government Theft

Karl Denninger explains inflation in rather graphic terms:

Let’s assume a 2% productivity increase per year over 30 years. Let’s also assume a 2% inflation rate over 30 years. This is what it looks like, starting with a baseline of “10,000.”

Your cost of living has gone up by 78% in notional dollar terms . . . → Read More: Inflation: Just Another Form of Government Theft

The Blame Game: Braddock

National Journal online has a focus on the failure that is Braddock. See: The Left-Behinds, subtitled: How three decades of flawed economic thinking have helped to create record numbers of long-term unemployed and undermine America’s middle class.

The whole meme of the piece comes down to this quote:

Braddock’s plight came from the structural decline . . . → Read More: The Blame Game: Braddock

The Cost and Benefits of Tax Complexity

I wrote a while ago about how GE had managed to avoid paying corporate taxes, and now there’s a story relating the complexity of GE’s corporate tax return:

General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didn’t pay taxes on $14 billion . . . → Read More: The Cost and Benefits of Tax Complexity

Maybe It’s Time to Give Up on Africa

ASI:

Britain’s international aid budget costs the equivalent of 22 days of national borrowing from international markets. By 2015, British Aid will have increased by 34.2% to £11.5 billion per annum. Including personal donations and state spending, Britain gives 0.8% of GDP in international aid. With state aid increasing, more people should ask: Why . . . → Read More: Maybe It’s Time to Give Up on Africa

Pop Quiz

Q: Who said this:

Second, the idea that U.S. economic difficulties hinge crucially on our failures in international economic competition somewhat paradoxically makes those difficulties seem easier to solve. The productivity of the average American worker is determined by a complex array of factors, most of them unreachable by any likely government policy. So . . . → Read More: Pop Quiz