If this article is correct, the Obama team has a lot of explaining to do.
In particular, they need to tell us whether their guy doesn’t have the chops to understand Dean Baker and Paul Krugman, or if he is serving some other, darker interest. And don’t give me any bull about how virtuous it would be to raise the cap on SS taxes: it all depends on the narrative. If you get to a more progressive tax system by flashing false alarms about Social Security, you feed the beast under the guise of clipping its clawnails.
Tuesday, October 30, 2007
Monday, October 29, 2007
Globalization -- A New Twist
I just spent the weekend with a pretty high level delegation from China. At the final banquet, some of them were telling my wife that they appreciated the low prices in US stores. They were especially happy with some shoes that cost 6 times more than in China. They were taken aback when she mentioned that the shoes were made in China, where they presumably cost far less than in Los Angeles.
The Best Fit Ever
Krugman on his blog uses Larry Bartel's data, from the latter's *What's The Matter With What's The Matter With Kansas* to puncture the myth that the rich are more likely to vote Republican.
In my forthcoming *What's The Matter With What's The Matter With What's The Matter WIth Kansas* I find a perfect negative correlation between intelligence and a tendency to vote Republican. My inverse measure of intelligence? - the tendency to vote Republican!
In my forthcoming *What's The Matter With What's The Matter With What's The Matter WIth Kansas* I find a perfect negative correlation between intelligence and a tendency to vote Republican. My inverse measure of intelligence? - the tendency to vote Republican!
Sunday, October 28, 2007
$90 Oil Prices: Is This a New Record in Real Terms?
AP reports:
Should we inflation adjust using the GDP deflator or the CPI deflator?
James Hamilton does the latter in a chart entitled dollar price of West Intermediate divide by ratio of CPI. By this measure, we are not yet an inflation adjusted record. WRTG Economics has their own historical price in real terms though 2006. The inflation-adjusted real price record in terms of 2006 dollars was less than $70 per barrel. I suspect WRTG Economics is using the GDP deflator, which has not risen as much as the CPI deflator since 1980. AP was not kidding when they said “depending on the adjustment”. I get the $101 figure if we use CPI but where does the $96 dollar figure come from? The GDP deflator in 2007QIII were only 2.29 times the GDP deflator as of 1980QI so wouldn't the inflation-adjusted oil price been $87 not $96 dollars?
Of course, it also matters which measure of the spot rate one uses for this. WRTG also reports both the WTI spot price and Brent Spot price, which was considerably lower.
With the recent gains, the price of oil is closing in on the inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today.
Should we inflation adjust using the GDP deflator or the CPI deflator?
James Hamilton does the latter in a chart entitled dollar price of West Intermediate divide by ratio of CPI. By this measure, we are not yet an inflation adjusted record. WRTG Economics has their own historical price in real terms though 2006. The inflation-adjusted real price record in terms of 2006 dollars was less than $70 per barrel. I suspect WRTG Economics is using the GDP deflator, which has not risen as much as the CPI deflator since 1980. AP was not kidding when they said “depending on the adjustment”. I get the $101 figure if we use CPI but where does the $96 dollar figure come from? The GDP deflator in 2007QIII were only 2.29 times the GDP deflator as of 1980QI so wouldn't the inflation-adjusted oil price been $87 not $96 dollars?
Of course, it also matters which measure of the spot rate one uses for this. WRTG also reports both the WTI spot price and Brent Spot price, which was considerably lower.
Hedge Funds: Ben Stein Finds the Money Machine That Will Eliminate the Federal Debt
While Ben Stein hearts Stephen Cohen of SAC Capital, Dean Baker has a closer look. I sense a tie to the Social Security debate!
Ben Stein writes:
As I read this, I had to wonder about my belief in the Efficient Markets Hypothesis. But then Dean Baker brought a little reality to this discussion:
OK, this may be a very small departure from a perfectly efficient market but Ben Stein’s 36 percent return is not a measure of the benefits from exploiting inefficiency. Rather it is the benefit to SAC Capital from exploiting others. But isn’t this kind of wealth transfer the real agenda for those who wish to privatize Social Security?
Ben Stein writes:
magicians like Steven A. Cohen, founder of SAC Capital in Stamford, Conn., can regularly earn 40 percent a year - often more - on their capital. But why waste our time on envy or disbelief? Let’s put Mr. Cohen to work for the greater good. Let’s have the federal government issue about $10 trillion in Steven A. Cohen National Debt Retirement Fund Bonds. After interest is paid on the bonds, if Mr. Cohen makes 40 percent on the money, the fund will return 36 percent a year. That means that in only two years, he will have made roughly $10 trillion for the taxpayers, with which he can pay off the entire United States federal debt.
As I read this, I had to wonder about my belief in the Efficient Markets Hypothesis. But then Dean Baker brought a little reality to this discussion:
Well Cohen's modus operandi is to make bets ahead of the market. He finds the winners just before they start winning and dumps the losers just before they start losing. The economic benefit from Cohen's actions is that prices adjust somewhat quicker than they otherwise would ... Mr. Cohen's gains come from other shareholders. If he buys IBM stock before it rises, he helps to bring the stock price to its proper level, but he gets the gain rather than some other potential stock purchaser. By being faster and better informed than other traders, Cohen is able to garner earnings that would otherwise have gone to other shareholders. Higher returns for Cohen mean lower returns for everyone else.
OK, this may be a very small departure from a perfectly efficient market but Ben Stein’s 36 percent return is not a measure of the benefits from exploiting inefficiency. Rather it is the benefit to SAC Capital from exploiting others. But isn’t this kind of wealth transfer the real agenda for those who wish to privatize Social Security?
Friday, October 26, 2007
The Fire This Time and The Water Last Time
I see there are no refugees this time - only evacuees. And we don't have Barbara Bush talking about the greater opportunities dislocation offers to the dislocatees. And we do have free massages in the stadium. And so on. Words fail me. I'll take them from Leadbelly: "If you're white, you're alright/ If you're brown, stick around/ but if you're black, oh baby/ Get back, Get back, Get back."
Thursday, October 25, 2007
Speaking of Wal-Mart and Avoiding Taxes
Michael talks about how Wal-Mart has played the transfer pricing manipulation game to reduce its state income taxes. But this is small potatoes when compared to the Federal tax reduction game.
AB readers know that I have had lots of posts on this topic – often giving huge hat tips to Max Sawicky. Here I document the drop in Wal-Mart’s overall effective tax rate. Here I note how part of this play relates to how they source goods from China. As I note – none of this is rocket science so one has to wonder why the tax authorities are not doing a better job at enforcing arm’s length pricing under section 482.
AB readers know that I have had lots of posts on this topic – often giving huge hat tips to Max Sawicky. Here I document the drop in Wal-Mart’s overall effective tax rate. Here I note how part of this play relates to how they source goods from China. As I note – none of this is rocket science so one has to wonder why the tax authorities are not doing a better job at enforcing arm’s length pricing under section 482.
Wal-Mart's Efficiency -- In Avoiding Taxes!
This Wall Street Journal article describes how Wal-Mart is able to pay about half as much state tax as a typical corporation.
Drucker, Jesse. 2007. "Inside Wal-Mart's Bid To Slash State Taxes." Wall Street Journal (23 October): p. A 1.
"In May 2001, Wal-Mart Stores Inc. issued an appeal to big accounting firms: Find us creative new ways to cut our state tax bills. Ernst & Young LLP swung into action. Senior tax experts at the big accounting firm swapped ideas via email and in a series of meetings. At least one gathering, according to an internal Ernst & Young calendar, took place in Wal-Mart's headquarters in the "Tax Shelter Room"."
"Big companies hardly ever discuss how outside accountants, lawyers and investment bankers help them cut their tax bills. But Ernst & Young's contributions to Wal-Mart's state-tax minimization project are outlined in a raft of documents filed in recent months in North Carolina state court, where the state's attorney general is challenging a Wal-Mart tax-cutting structure involving real-estate investment trusts. The material, which includes company emails and memos, provides a rare window into accountants' role in generating tax-reduction ideas at one major company."
"Companies often assert that tax savings are simply happy byproducts of transactions pursued for other business reasons. But documents from the North Carolina case indicate that Wal-Mart, from the outset, had one primary purpose: cutting its state income taxes. Ernst & Young worked to fulfill that goal. In 2002, for example, the accounting firm delivered a 37-page proposal laying out a smorgasbord of 27 potential tax strategies, most tailored to a particular state's tax code. It described one of them as "a very aggressive strategy with considerable risk."
"Publicly traded companies reduced their federal income taxes by about $12 billion in 2004 through potentially abusive tax transactions, according to Internal Revenue Service data. Some experts say companies save far more than that each year through elaborate tax-cutting maneuvers."
"Wal-Mart's 2001 letter to accounting firms got right to the point. It began: "Wal-Mart is requesting your proposal(s) for professional tax advice and related implementation services in connection with minimization of state income taxes in the following states: Arizona, California, Florida, Illinois, Indiana, Michigan, Minnesota, and Pennsylvania"."
"State income-tax rates for corporations average about 6.9%, and come on top of a federal statutory rate of 35%. Tax rates vary from state to state, and some states have no corporate tax at all on certain income. That provides ample opportunity for so-called tax arbitrage, in which companies allocate expenses and revenues between states in order to minimize taxes owed."
"On average, Wal-Mart has paid taxes at a rate equal to about half of the average statutory state rate over the past decade, according to an analysis of the company's regulatory filings by Standard & Poor's Compustat."
"In the early 1990s, it employed an "intangibles holding company," a unit operating in tax-friendly Delaware into which it transferred ownership of its brand names such as Sam's Club. It then made payments to that unit for use of those brands, deducting them as expenses from its taxable income in other states, according to court records. That strategy fell out of favor after several states successfully challenged Wal-Mart and other companies in court over the maneuver."
"Wal-Mart set aside about $526 million for state and local income taxes last year, not including its substantial property-tax bills, according to the company's financial reports. But its various state tax-cutting strategies seem to have had an impact. On average, Wal-Mart has paid taxes at a rate equal to about half of the average statutory state rate over the past decade, according to an analysis of the company's regulatory filings by Standard & Poor's Compustat."
"After Wal-Mart hired the firm in 1996 ..., an Ernst & Young tax executive urged his team to be discreet, according to a staff memo included in North Carolina court records. "We don't think there is much the state taxing authorities can do to mitigate these savings to Wal-Mart, however some states might attempt something if they had advance notification," he wrote. "We think the best course of action is to keep the project relatively quiet .... there just seems to be too many opportunities for it to get out to the press or financial community and we all know they are difficult to control, particularly when we are dealing with a client as well-known as Wal-Mart"."
"David Bullington, Wal-Mart's vice president for tax policy, said in a deposition that he began feeling pressure to lower the company's effective tax rate after the current chief financial officer, Thomas Schoewe, was hired in 2000. Mr. Schoewe was familiar with "some very sophisticated and aggressive tax planning," Mr. Bullington said, according to a transcript of the deposition, taken by the North Carolina attorney general's office in July. "And he ride herds [sic] on us all the time that we have the world's highest tax rate of any major company"."
"As Ernst & Young worked on its proposals, one high-ranking tax partner sent an email to a colleague addressing a concern often faced by companies: how to describe a tax-driven transaction in a way that won't create problems later on with tax authorities. "You asked if we have a document that details how the tax savings will work, how much they will save .... We really don't have anything like that except for the sales document, partly because we have avoided calling this a 'tax' project, to show that we did not have a tax savings motivation, rather it is a 'domestic restructuring' project," he wrote."
"As for Wal-Mart's "Tax Shelter Room," North Carolina officials asked Mr. Bullington about the odd name. In his deposition, the Wal-Mart vice president said the moniker was "a bit of a pun," stemming from the conference room's use by tax-department employees to conduct safety drills for natural disasters such as tornadoes."
Drucker, Jesse. 2007. "Inside Wal-Mart's Bid To Slash State Taxes." Wall Street Journal (23 October): p. A 1.
"In May 2001, Wal-Mart Stores Inc. issued an appeal to big accounting firms: Find us creative new ways to cut our state tax bills. Ernst & Young LLP swung into action. Senior tax experts at the big accounting firm swapped ideas via email and in a series of meetings. At least one gathering, according to an internal Ernst & Young calendar, took place in Wal-Mart's headquarters in the "Tax Shelter Room"."
"Big companies hardly ever discuss how outside accountants, lawyers and investment bankers help them cut their tax bills. But Ernst & Young's contributions to Wal-Mart's state-tax minimization project are outlined in a raft of documents filed in recent months in North Carolina state court, where the state's attorney general is challenging a Wal-Mart tax-cutting structure involving real-estate investment trusts. The material, which includes company emails and memos, provides a rare window into accountants' role in generating tax-reduction ideas at one major company."
"Companies often assert that tax savings are simply happy byproducts of transactions pursued for other business reasons. But documents from the North Carolina case indicate that Wal-Mart, from the outset, had one primary purpose: cutting its state income taxes. Ernst & Young worked to fulfill that goal. In 2002, for example, the accounting firm delivered a 37-page proposal laying out a smorgasbord of 27 potential tax strategies, most tailored to a particular state's tax code. It described one of them as "a very aggressive strategy with considerable risk."
"Publicly traded companies reduced their federal income taxes by about $12 billion in 2004 through potentially abusive tax transactions, according to Internal Revenue Service data. Some experts say companies save far more than that each year through elaborate tax-cutting maneuvers."
"Wal-Mart's 2001 letter to accounting firms got right to the point. It began: "Wal-Mart is requesting your proposal(s) for professional tax advice and related implementation services in connection with minimization of state income taxes in the following states: Arizona, California, Florida, Illinois, Indiana, Michigan, Minnesota, and Pennsylvania"."
"State income-tax rates for corporations average about 6.9%, and come on top of a federal statutory rate of 35%. Tax rates vary from state to state, and some states have no corporate tax at all on certain income. That provides ample opportunity for so-called tax arbitrage, in which companies allocate expenses and revenues between states in order to minimize taxes owed."
"On average, Wal-Mart has paid taxes at a rate equal to about half of the average statutory state rate over the past decade, according to an analysis of the company's regulatory filings by Standard & Poor's Compustat."
"In the early 1990s, it employed an "intangibles holding company," a unit operating in tax-friendly Delaware into which it transferred ownership of its brand names such as Sam's Club. It then made payments to that unit for use of those brands, deducting them as expenses from its taxable income in other states, according to court records. That strategy fell out of favor after several states successfully challenged Wal-Mart and other companies in court over the maneuver."
"Wal-Mart set aside about $526 million for state and local income taxes last year, not including its substantial property-tax bills, according to the company's financial reports. But its various state tax-cutting strategies seem to have had an impact. On average, Wal-Mart has paid taxes at a rate equal to about half of the average statutory state rate over the past decade, according to an analysis of the company's regulatory filings by Standard & Poor's Compustat."
"After Wal-Mart hired the firm in 1996 ..., an Ernst & Young tax executive urged his team to be discreet, according to a staff memo included in North Carolina court records. "We don't think there is much the state taxing authorities can do to mitigate these savings to Wal-Mart, however some states might attempt something if they had advance notification," he wrote. "We think the best course of action is to keep the project relatively quiet .... there just seems to be too many opportunities for it to get out to the press or financial community and we all know they are difficult to control, particularly when we are dealing with a client as well-known as Wal-Mart"."
"David Bullington, Wal-Mart's vice president for tax policy, said in a deposition that he began feeling pressure to lower the company's effective tax rate after the current chief financial officer, Thomas Schoewe, was hired in 2000. Mr. Schoewe was familiar with "some very sophisticated and aggressive tax planning," Mr. Bullington said, according to a transcript of the deposition, taken by the North Carolina attorney general's office in July. "And he ride herds [sic] on us all the time that we have the world's highest tax rate of any major company"."
"As Ernst & Young worked on its proposals, one high-ranking tax partner sent an email to a colleague addressing a concern often faced by companies: how to describe a tax-driven transaction in a way that won't create problems later on with tax authorities. "You asked if we have a document that details how the tax savings will work, how much they will save .... We really don't have anything like that except for the sales document, partly because we have avoided calling this a 'tax' project, to show that we did not have a tax savings motivation, rather it is a 'domestic restructuring' project," he wrote."
"As for Wal-Mart's "Tax Shelter Room," North Carolina officials asked Mr. Bullington about the odd name. In his deposition, the Wal-Mart vice president said the moniker was "a bit of a pun," stemming from the conference room's use by tax-department employees to conduct safety drills for natural disasters such as tornadoes."
Wednesday, October 24, 2007
Fred Thompson Takes Credit for Clinton’s Fiscal Record
This CNN Video is entitled Thompson Talks Immigration but the real whoppers come when Fred talks fiscal policy. Take a listen and then let’s talk.
Fred Thompson mentions cutting taxes and balancing the budget almost in the same sentence. He fails to mention the 1993 tax increase – opposed by all Republicans in the Senate – even though this was one of the two major moves that did lead to fiscal responsibility. The other major move has often been called the “Peace Dividend” where we felt able to sharply reduce defense spending. There is only one candidate running for the GOP Presidential nomination that would once again reduce defense spending. His name is Ron Paul and he tends to be mocked by his colleagues when they are not promising more tax cuts. So it goes in the Spend & Borrow wing that dominates the Republican Party.
Fred Thompson mentions cutting taxes and balancing the budget almost in the same sentence. He fails to mention the 1993 tax increase – opposed by all Republicans in the Senate – even though this was one of the two major moves that did lead to fiscal responsibility. The other major move has often been called the “Peace Dividend” where we felt able to sharply reduce defense spending. There is only one candidate running for the GOP Presidential nomination that would once again reduce defense spending. His name is Ron Paul and he tends to be mocked by his colleagues when they are not promising more tax cuts. So it goes in the Spend & Borrow wing that dominates the Republican Party.
CHINA: EMERGENCE OF THE NEW CLASS
The 17th National Congress of the Chinese Communist Party has just ended, with a roll-out of the new members of the Standing Committee of the Poltiburo of the Central Committee of the party. Identified among those as the current leading candidate to succeed newly reentrenched leader, Hu Jintao, is Xi Jinping, identified by news reports (WaPo) as one of many "princelings" in newly powerful positions, in his case, son of Xi Zhongxun, a former Politburo member and Vice Premier. Just as in North Korea, with Kim Il Jong succeeding his father, and the children of the ruling Nomenklatura coming to power in the later stages of the former Soviet Union, we see The New Class reproducing itself in the PRC. (Of course in the US we cannot complain to much with our succession of Bushes.)
Tuesday, October 23, 2007
PER CAPITA CARBON EMISSIONS AND PER CAPITA INCOME
Here is ranking of top 25 or so countries in real per capita income with their ranks in per capita carbon emissions, with Singapore and Taiwan missing data. Oil producers mostly do badly, but users of nuclear for electricity tend to do well. Real GDP is for 2006, IMF data, per capita carbon emissions from Wikipedia for 2004.
Real per cap GDP in order Per cap carbon emissions rank
Luxembourg 4 (burns lots of coal for electricity)
Ireland 32
Norway 12
USA 10 (third worst on list, big surprise)
Iceland 53 (lots of geothermal)
Hong Kong 72 (don't know why so good, best on list)
Switzerland 69 (don't know its breakdown for electricity production)
Netherlands 43
Denmark 36 (tops in use of wind power)
Qatar 1 (small OPEC oil producer)
Austria 46
Finland 21
Canada 11 (fourth worst on list, oil)
UK 37
Belgium 40
Sweden 66 (lots of nuclear and hydro)
UAE 3 (small OPEC oil producer)
Australia 13
Greece 44
Japan 34
France 63 (lots of nuclear)
Israel 29
Germany 38
Italy 52
Real per cap GDP in order Per cap carbon emissions rank
Luxembourg 4 (burns lots of coal for electricity)
Ireland 32
Norway 12
USA 10 (third worst on list, big surprise)
Iceland 53 (lots of geothermal)
Hong Kong 72 (don't know why so good, best on list)
Switzerland 69 (don't know its breakdown for electricity production)
Netherlands 43
Denmark 36 (tops in use of wind power)
Qatar 1 (small OPEC oil producer)
Austria 46
Finland 21
Canada 11 (fourth worst on list, oil)
UK 37
Belgium 40
Sweden 66 (lots of nuclear and hydro)
UAE 3 (small OPEC oil producer)
Australia 13
Greece 44
Japan 34
France 63 (lots of nuclear)
Israel 29
Germany 38
Italy 52
Monday, October 22, 2007
Book Announcement
MORE UNEQUAL: ASPECTS OF CLASS IN THE UNITED STATES
Monthly Review Press Edited by Michael D. Yates
With contributions by John Bellamy Foster, Vincent Navarro, William K. Tabb, Michael Perelman, Richard D. Vogel, David Roediger, Kristen Lavelle and Joe Feagin, Sabiyha Prince, Martha Gimenez, Stephanie Luce and Mark Brenner, Peter McLaren and Ramin Farahmandpur, Michael D. Yates, Angela Jancius, and Michael Zweig.
"Workers in the United States are systematically being allocated a shrinking share of the prodigious wealth we produce, and that's old news. This widening exploitation of workers and communities further exposes the myth of a 'just' capitalist economy. Despite the radical increase in economic and social inequality, we still lack a cohesive popular understanding and consciousness of why and how our market-based economic system facilitates this 'one-sided class war' against us.
"More Unequal: Aspects of Class in the United States is a strategically assembled collection which binds diverse, informed, often compellingly personal explorations of social and economic inequity together into a revealing journey through the scarred terrain of today's working-class reality. This book should be off the shelf and in the hands, and backpacks, of a new generation of working-class activists who can lead the struggle to collectively claim a new direction." -Jerry Tucker, former UAW International Executive Board Member & co-founder of the Center for Labor Renewal
"The shocking data about wealth, income, home ownership, access to health care, education, and political influence cry out for analysis which is driven by the desire not only to understand but also to transform. Fortunately, the scholars and activists who have contributed to More Unequal offer such analysis, and they do so clearly and succinctly. This book will prove useful to teachers, students, researchers, and activists as we struggle to understand how class is working in the twenty-first century United States." -Peter Rachleff, professor of history, Macalester College, and President, Working Class Studies Association
"This excellent collection helps us to further rehabilitate the discussion of class both in the United States and globally." -Bill Fletcher, Jr., writer and activist
"Extraordinarily comprehensive.focuses on the effects of class oppression and exploitation" -Roxanne Dunbar-Ortiz, writer
Table of Contents
Introduction & Acknowledgements - Mike Yates
1. Aspects of Class in the United States: A Prologue - John Bellamy Foster
2. The Worldwide Class Struggle - Vincent Navarro
3. The Power of the Rich - William K. Tabb
4. Some Economics of Class - Michael Perelman
5. Harder Times: Undocumented Workers and the U.S. Informal Economy - Richard D. Vogel
6. The Retreat from Race and Class - David Roediger
7. Hard Truth in the Big Easy: Race and Class in New Orleans, Pre- and Post-Katrina - Kristen Lavelle and Joe Feagin
8. Will the Real Black Middle Class Please Stand Up? - Sabiyha Prince
9. Back to Class: Reflections on the Dialectics of Class and Identity - Martha Gimenez
10. Women and Class: What Has Happened in Forty Years? - Stephanie Luce and Mark Brenner
11. The Pedagogy of Oppression - Peter McLaren and Ramin Farahmandpur
12. Class: A Personal Story - Michael D. Yates
13. Class for a Downwardly Mobile Generation - Angela Jancius
14. Six Points on Class - Michael Zweig
Contributors Notes Index
Michael D. Yates is associate editor of Monthly Review. For many years he taught economics at the University of Pittsburgh at Johnstown. He is the author of Cheap Motels and a Hotplate: An Economist's Travelogue (2006), Naming the System: Inequality and Work in the Global System (2004), and Why Unions Matter (1998), all published by Monthly Review Press.
Monthly Review Press Edited by Michael D. Yates
With contributions by John Bellamy Foster, Vincent Navarro, William K. Tabb, Michael Perelman, Richard D. Vogel, David Roediger, Kristen Lavelle and Joe Feagin, Sabiyha Prince, Martha Gimenez, Stephanie Luce and Mark Brenner, Peter McLaren and Ramin Farahmandpur, Michael D. Yates, Angela Jancius, and Michael Zweig.
"Workers in the United States are systematically being allocated a shrinking share of the prodigious wealth we produce, and that's old news. This widening exploitation of workers and communities further exposes the myth of a 'just' capitalist economy. Despite the radical increase in economic and social inequality, we still lack a cohesive popular understanding and consciousness of why and how our market-based economic system facilitates this 'one-sided class war' against us.
"More Unequal: Aspects of Class in the United States is a strategically assembled collection which binds diverse, informed, often compellingly personal explorations of social and economic inequity together into a revealing journey through the scarred terrain of today's working-class reality. This book should be off the shelf and in the hands, and backpacks, of a new generation of working-class activists who can lead the struggle to collectively claim a new direction." -Jerry Tucker, former UAW International Executive Board Member & co-founder of the Center for Labor Renewal
"The shocking data about wealth, income, home ownership, access to health care, education, and political influence cry out for analysis which is driven by the desire not only to understand but also to transform. Fortunately, the scholars and activists who have contributed to More Unequal offer such analysis, and they do so clearly and succinctly. This book will prove useful to teachers, students, researchers, and activists as we struggle to understand how class is working in the twenty-first century United States." -Peter Rachleff, professor of history, Macalester College, and President, Working Class Studies Association
"This excellent collection helps us to further rehabilitate the discussion of class both in the United States and globally." -Bill Fletcher, Jr., writer and activist
"Extraordinarily comprehensive.focuses on the effects of class oppression and exploitation" -Roxanne Dunbar-Ortiz, writer
Table of Contents
Introduction & Acknowledgements - Mike Yates
1. Aspects of Class in the United States: A Prologue - John Bellamy Foster
2. The Worldwide Class Struggle - Vincent Navarro
3. The Power of the Rich - William K. Tabb
4. Some Economics of Class - Michael Perelman
5. Harder Times: Undocumented Workers and the U.S. Informal Economy - Richard D. Vogel
6. The Retreat from Race and Class - David Roediger
7. Hard Truth in the Big Easy: Race and Class in New Orleans, Pre- and Post-Katrina - Kristen Lavelle and Joe Feagin
8. Will the Real Black Middle Class Please Stand Up? - Sabiyha Prince
9. Back to Class: Reflections on the Dialectics of Class and Identity - Martha Gimenez
10. Women and Class: What Has Happened in Forty Years? - Stephanie Luce and Mark Brenner
11. The Pedagogy of Oppression - Peter McLaren and Ramin Farahmandpur
12. Class: A Personal Story - Michael D. Yates
13. Class for a Downwardly Mobile Generation - Angela Jancius
14. Six Points on Class - Michael Zweig
Contributors Notes Index
Michael D. Yates is associate editor of Monthly Review. For many years he taught economics at the University of Pittsburgh at Johnstown. He is the author of Cheap Motels and a Hotplate: An Economist's Travelogue (2006), Naming the System: Inequality and Work in the Global System (2004), and Why Unions Matter (1998), all published by Monthly Review Press.
Sunday, October 21, 2007
Rich and Poor Multipliers Again
Earlier I asked about the multipliers for the consumption of rich and poor people. Let me be a little bit and more explicit. I would assume that rich people spend a lot more on personal services and expensive goods.
Expensive goods tend to have much higher markups. Remember Henry Ford II responding to the influx of Volkswagens observing that mini cars mean mini profits. Expensive branded goods have very high markups, meaning relatively few jobs per dollar of expenditure compared to the spending of the less affluent. Personal services are probably bimodal. Some professional work would probably mean relatively few jobs per dollar of expenditure; some less prestigious work might mean quite a few jobs per dollar of expenditure; for example, underpaid immigrant nannies. Any thoughts?
Saturday, October 20, 2007
Would Redistributing Income to the Poor Increase National Savings and Long-term Growth?
It would seem that Scott Patterson has turned the usual tinkle down argument on its head.
As Michael notes, this WSJ piece is arguing:
Exactly the right question. The usual rightwing argument for NIBOR DOOH economics (take from the poor and give to the rich) is that the poor have a high marginal propensity to consume, while the rich have a high marginal propensity to save. My own (maybe too much Ando-Modigliani lifecycle dominated) is that the marginal propensities to consume v. save don’t differ by income class. But if the WSJ wants to tell us that the poor save more – great. I’m all in favor of things that would increase long-term growth such as movements that would reduce income inequality!
As Michael notes, this WSJ piece is arguing:
The Wall Street Journal suggests that the economy might not be affected by the credit crunch because it will mostly hit the poor. Since the poor don't spend that much, the economy can happily sail along. I was wondering how multipliers might differ by income class.
Exactly the right question. The usual rightwing argument for NIBOR DOOH economics (take from the poor and give to the rich) is that the poor have a high marginal propensity to consume, while the rich have a high marginal propensity to save. My own (maybe too much Ando-Modigliani lifecycle dominated) is that the marginal propensities to consume v. save don’t differ by income class. But if the WSJ wants to tell us that the poor save more – great. I’m all in favor of things that would increase long-term growth such as movements that would reduce income inequality!
Economic Benefits of the Trickle-up?
The Wall Street Journal suggests that the economy might not be affected by the credit crunch because it will mostly hit the poor. Since the poor don't spend that much, the economy can happily sail along. I was wondering how multipliers might differ by income class.
Patterson, Scott. 2007. "Has the Crunch Filtered Down to Consumers?" Wall Street Journal (18 October): p. C 1.
"Dean Maki, an economist at Barclays Capital, expects households to muddle through even as lenders get more strict. He says many of these credit problems have hit lower-income consumers, while wealthier spenders remain largely unscathed. Roughly half of consumer spending comes from the top 20% of the income bracket, Mr. Maki says."
Patterson, Scott. 2007. "Has the Crunch Filtered Down to Consumers?" Wall Street Journal (18 October): p. C 1.
"Dean Maki, an economist at Barclays Capital, expects households to muddle through even as lenders get more strict. He says many of these credit problems have hit lower-income consumers, while wealthier spenders remain largely unscathed. Roughly half of consumer spending comes from the top 20% of the income bracket, Mr. Maki says."
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