Unfortunately, this is not what many Greeks (or Spaniards) believe. A large plurality of them voted for Syriza, which wants to reallocate resources to wage increases and subsidies and does not even mention exports in its growth strategy. They would be wise to remember that having Stiglitz as a cheerleader and Podemos as advisers did not save Venezuela from its current hyper-inflationary catastrophe.
– Ricardo Hausmann
There are several things in this article that I think are very debatable and damn I hate seeing people describe spending less of other people’s money as “austerity”, but this is an interesting piece nevertheless.
In his first six years in office, President Obama has performed well for those who wrote those checks. He brought in Wall Street insiders such as Timothy Geithner and Larry Summers to concoct his economic policy, which brought a recovery to the financial plutocracy before virtually anyone else. Wall Street was back by 2009; the rest of us have had to wait for 2015. Obama and the Democrats in Congress also handed the big banks a nice gift in the form of the Dodd-Frank Bill which helped them achieve that “too big to fail” status and has accelerated the growing consolidation of the American financial system. Indeed, since Dodd-Frank was passed smaller banks’ share of banking assets has dropped twice as quickly as before, notes a recent Harvard Kennedy School of Government study. Smaller and community banks – historically more likely to loan to small businesses – have seen a 50 percent drop in their share of lending while the the five largest banks now control over 40 percent of lending, twice their share 20 years ago.
– Joel Kotkin
What is all the more galling is that this “net neutrality” nonsense wasn’t stopped by a Republican-controlled Congress. This cannot be just blamed on Obama and his cohorts, argues Dr Hurd:
The federal government — and this probably includes most of the Republican Party, as well — cannot stand the idea that the Internet economy was a successful instance of (in today’s context) relatively unhampered market capitalism. It’s precisely because this model of (relatively) unhampered capitalism worked so well that government now has to regulate it. Otherwise, it could be held up as a model for the rest of the economy. “If the Internet works so well with little or even no regulation, then what does this suggest for health care, education, lending, and all the other sectors of the economy under government management or control?”
The statists who run the nation’s capital can’t have it, and they won’t have it. That’s why Obama and his Democratic majority on the FCC pushed this through. And that’s why the Republican-led Congress won’t lift a finger in protest. Most of them are just fine with it.
The people I hear defending the Orwellian-named Net Neutrality do so on the premise that it will bring this or that benefit to the consumer. Which consumer? Any action of government bringing benefit to one party (or company), by definition brings harm or loss to another. On what basis does the government take over management of the Internet itself to “benefit consumers” when the government will be the one picking winners and losers based on political — never economic — considerations?
The only proper role for government is a crucial one — to uphold contracts voluntarily entered into by consumers and businesses. Without such a role for government, there would indeed be chaos and anarchy. Advocates of “Net Neutrality” want us to believe that turning the Internet into a public utility will inaugurate this role, when the government was already playing that role all along. The real and only possible purpose for this rule is to ensure that government sets the terms of contracts into which customers and businesses would otherwise freely enter.
Here are more thoughts from the Internet Society.
In episode two of Our Guy In India, truck mechanic and Isle of Man TT racer Guy Martin visits the biggest slum in Mumbai, Dharavi. He is surprised to find how nice it is.
Most of what we see of Dharavi in the programme appears well looked-after: clean and tidy and with lots of decoration. There is also a lot of commerce. The people are well dressed; the children well fed. There are refrigerators and large televisions. The walls and floors are decorated with “right fancy tiling”. Some residents are more middle-class than might be expected: Guy meets a man who works as a backing dancer, choreographer and dance teacher.
The narrator explains that Dharavi generates £300 million in trade per year, though I am not sure how this is measured. He goes on to say that 85% of residents have a job; that anyone can set up a business; only 3% of Indians pay income tax; and many slum businesses are (unsurprisingly) unregistered.
We see one business that grinds spices, another making tread plates for stairs, another selling phone calls (though mobile phones are more common). Guy visits the Children’s Education Society’s Banyan Tree English School, which the sign says is a computer education center authorised to teach a course called MS-CIT. Also available here are free medical checks and treatment for children under 12.
It’s not all good. Some areas are so densely built-up that it is dark at street level in the daytime, though we see inside a house here and it is not unpleasant. And there is no running water or sanitation, though people are managing somehow. I also suspect the programme does not show the worst of it. What I do see is life getting better for poor people in India.
The programme is currently viewable online, at least in the UK, though I do not know for how much longer.
Many libertarians think that the answer to meetings like those Davos and Bilderberg Group get-togethers of the rich and powerful is to complain about them until they stop. This is ridiculous and pointless. Quite aside from the absurdity of libertarians objecting to people freely consorting with one another, how on earth are they going to stop the richest and most powerful people on the planet from meeting up and talking to each other from time to time?
My attitude has always been, not that such gatherings are automatically evil, but that we need our people to be right there in among them, and to make them less evil. People like Peter Thiel, who strikes me as being one of the smartest and most interesting people on the planet. The usual come-back about allegedly smart people goes: “If you’re so smart, why ain’t you rich?” Peter Thiel has some very good answers to that line of attack. Around 2.2 billion answers, according to Forbes magazine. This short Forbes profile describes Thiel as being “ideological to the point of eccentricity”, his particular eccentricity being that he is a libertarian. I don’t know if Peter Thiel spends any of his time bending the ears of fellow plutocrats and billionaires at gatherings like those alluded to above, but if he does, good.
And, if he does, maybe this excellent video performance provides clues about the kinds of things he says. (You might want to skip the rather numerous thankyous to other people at the start from the Independent Institute’s David Theroux, and go straight to where Thiel himself starts talking, at 7 minutes 45 seconds.)
I have ordered a copy of Thiel’s latest book, and not just because I want to read it, although I definitely do. I think of a book order as being like voting for an idea that I like the sound of, or in this case an author that I like the sound of.
The best way any government in the UK can bring prosperity is not by being ‘pro-business’ but rather by being ‘pro-market’. Labour sneeringly loathes both business and markets, the LibDems do not understand either and the Tories do not grasp that there is even a difference.
The solution? Try to do your business in Hong Kong, Singapore or New Zealand if you realistically have such a choice.
Question: why have overseas subsidiaries at all if you are a US business? Why not just hive off any non-US based businesses into actual, and not just nominal, separate businesses? As other nations do not try to tax and regulate non-domicile activities in the way the US does, surely it make more sense to simply do business elsewhere, have your HQ elsewhere and just make deals to sell your stuff to US only based companies if you want to access the US market (i.e. do it indirectly)?
Shared Parental Leave: How should business prepare for its effects? … so asks an article in City A.M… and surely the correct answers are to reduce your workforce with improved automation, find ways to outsource off-shore, or just move the whole business somewhere the state does not run your affairs to quite the same extent, unless the nature of what your company does precludes those options.
There are already plenty of reasons to take a dim view of Piketty’s leveling ideas on wealth. Here’s another (H/T, Econlog):
I think it would be a big mistake to oppose the objective of global progressive taxation of income and wealth with the objective of class struggle and political fight, for at least two reasons. First, making this tax reform possible would require a huge mobilization. This has always been the case in the past. All the big revolutions engendered a big tax reform. Take the French Revolution, the American Revolution, or World War One: although it was not a fiscal revolution initially, through the Bolshevik Revolution, it had a huge impact on the acceptance of a progressive tax regime and more generally social welfare institutions after World War One – and even more so after World War Two. These were fiercely opposed by the elite and by the right just before these shocks, so this shows that we need a big fight and sometimes violent shocks to make progressive tax accepted. It would be a big mistake to think of progressive taxation as a technocratic process that comes quietly from a minister and experts. This is not at all the history of taxation.
The man was interviewed and had his comments published in a blog rather aptly called Potemkin (not sure how ironic that is).
Perry Metzger, who writes occasionally for Samizdata, nicely skewered Piketty’s reasoning a few months ago.
Of all the legion of bad outcomes that result from political ambition, the most striking of our times is surely the euro, an unashamedly political project bolted on to sovereign European nations of long and proud competing traditions in the hope of making them more like the United States, at least in terms of economic prowess.
– Jeremy Warner.
Yet Oxfam also claims, without any real evidence, that excessive inequality hampers economic growth. It suggests that, since we want that economic pie to be as large as possible, we should tax wealth and capital. The problem is that all taxes destroy some economic activity, shrinking that pie. And different taxes do so differently. We also know that capital and wealth taxes destroy more of the pie than almost any others (other than that Robin Hood Tax Oxfam also supported). So the argument is that we must shrink the economic pie in order to stop inequality shrinking it. This has shades of having to destroy the village so as to save it.
– Tim Worstall
Detractors will try to argue that the poorest quintiles have a smaller percentage of the overall pie. And that might be true, but the pie is much, much bigger. Would you rather have 50 percent of a million or 20 percent of a billion? Another way of putting this is: Would you rather be better off, even if that meant certain people were super well off? Or would you rather everyone were worse off, as long as everyone were relatively equal?
That the poorest among us are still, on balance, doing better today than they were 50 years ago is a remarkable testimony to what relatively free people and markets can do, even as governments put up roadblocks. So if the poor aren’t getting poorer, why do people say they are?
– Max Borders