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David Shreve: The irony of American political economics
David Shreve: The irony of American political economics
Summary: Shreve analyzes the paradox between economic performance under Democratic versus Republican administrations and public perception of economic competence. He presents substantial statistical evidence showing Democratic administrations consistently outperforming Republican ones across multiple economic metrics, while explaining how Republicans have successfully maintained a reputation for superior economic stewardship through specific messaging strategies and tax policies.
Since 1949, job growth under Democratic presidencies has been more than twice as large as that during Republican administrations (2.47% to 1.07%). Excluding public sector jobs, the advantage is even greater (2.55% to 0.97%). Other key averages reveal a similar distinction during this period: Real business investment growth advanced 6.58% under Democratic presidents and 2.98% under their Republican counterparts; real personal income — excluding government transfers — increased 2.66% and real economic growth per capita (net domestic product) advanced 2.6% under Democratic chief executives, but only by 1.41% and 1.28%, respectively, under Republican leaders. Inflation has also been much more modest under Democratic presidents (2.91% compared to 3.28% under their Republican counterparts), with an even more decided advantage when volatile energy and food markets are excluded (2.87% compared to 3.59%).
Of the 11 U.S. recessions we’ve endured over the past 75 years, 10 began in Republican presidential administrations; only Jimmy Carter — embracing Republican-style fiscal, monetary and regulatory policy much more completely than any other recent Democratic president — presided over a “Democratic” recession. The two “double-dip” recessions of 1980 and 1981-82, straddling the late Carter and early Reagan administrations, are almost indistinguishable in their policy origins.
We are reminded consistently by pundits, journalists and scholars that tax cuts represent what may be our most readily available and useful tool for economic stimulus. Flat, or flatter, taxes, we are told, are the only means to the achievement of tax simplicity and tax compliance.
Even on the question of who tends to favor lower or higher taxes, it is easy to be deceived. When income taxes are reduced (at the federal and state level) and the entire tax code is rendered less progressive as a result, two things happen almost automatically: other much more regressive taxes rise to fill the vacuum created by universally demanded (if not readily acknowledged) public services and consumer demand falters as higher taxes begin to fall on those compelled to spend all that they earn. Overall economic activity and prospective revenue growth, in turn, begin to stagnate, triggering a vicious cycle of tax rate increases (among the untouched regressive tax vehicles), just to maintain public services and economic activity.
Republican politicians have stumbled upon a remarkably effective political strategy: preach tax cuts as the be-all and end-all of successful economic policy; ignore the ways in which federal income tax cuts often lead to increased tolls, fees and property, sales, and excise tax increases; relinquish all but rhetorical opposition to the federal deficits created by federal tax cuts; and cap it off by hinting repeatedly that more could be done — allegedly to great effect — by reducing government spending directed at “undeserving” and “unambitious” poor people of color.
Republican political leaders have their cake and eat it too, riding a diffuse anti-tax sentiment to political victory. Actual results in this game don’t often matter, at least as long as their Democratic opponents succeed in staving off the most precipitous decline with safety nets and the preservation of some progressive fiscal policy elements.
Begun quietly with what Republican activist and Wall Street Journal editor Jude Wanniski called the “Two Santa Claus Theory” — under which Republicans could counter the Democratic social spending Santa Claus with their own tax-cutting Kris Kringle — this approach promised political “success” even amid policy failure, for opponents could be pinned with the deficits and damage it produced.
Exploiting normal psychological tendencies to imagine that “more money in my pocket” and “less money in theirs” simply must be good policy, the widespread ignorance of actual public spending and significant intergovernmental fiscal policies (where federal change forces state and local change, or vice versa), and the compelling notion that personal economic opportunity or success must be derived from personal talent and initiative (rather than significant public policy reform), the “Two Santa Claus” strategy has buoyed a Republican Party that has consistently delivered sub-par results.
·dailyprogress.com·
David Shreve: The irony of American political economics
It's Time to Talk About America's Disorder Problem
It's Time to Talk About America's Disorder Problem
  • "Disorder" as distinct from crime, encompassing behaviors that dominate public spaces for private purposes (e.g., public drug use, homelessness, littering).
  • Despite decreasing violent crime rates in many cities, public perception of safety remains low, which the author attributes to increased disorder. Ex. retail theft, unsheltered homelessness, uncontrolled dogs, reckless driving, and public drug use.
Most conspicuous, in my experience, is the way that retailers have responded. It’s not just CVS; coffee shops seem to have gotten more hostile and less welcoming. This is, I suspect, because they are dealing with people who steal, cause a ruckus, or shoot up in the bathroom—disorderly behaviors that they have to deter before they cost them customers.
I increasingly think this is a more general phenomenon. Disorder is not measured like crime—there is no system for aggregating measures of disorder across cities. But if you look for the signs, they are there. Retail theft, though hard to measure, has grown bad enough that major retailers now lock up their wares in many cities. The unsheltered homeless population has risen sharply. People seem to be controlling their dogs less. Road deaths have risen, even as vehicle miles driven declined, suggesting people are driving more irresponsibly. Public drug use in cities from San Francisco to Philadelphia has gotten bad enough to prompt crack-downs.
Cities’ comparative advantage is agglomeration and network effects: concentrating people in one place can create innovation that yields ore than linear returns. But that only is possible if people have shared public spaces in which to interact. Community life, of the sort that makes cities worth living in, is harder to live in the presence of disorder.
A large share of disorder is generated by a small number of people and places—one drunk or one vacant lot, one uncontrolled bar or one guy shouting on the street, can ruin the whole experience for everyone else. Identifying these problem places and people, and remediating them—not exclusively through the criminal justice system—can bring disorder under control.
·thecausalfallacy.com·
It's Time to Talk About America's Disorder Problem
Monopoly by the Numbers — Open Markets Institute
Monopoly by the Numbers — Open Markets Institute
Antitrust laws have not been effectively enforced or applied to specific market realities.
A generation ago, small, independent operations defined the entire industry. Today, the businesses of beef, pork, and poultry slaughter are all dominated by four giants at the national level. But that greatly understates the problem, as in many regions, a single corporation holds a complete monopoly. Two firms, Dean Foods and the Dairy Farmers of America control as much as 80-90 percent of the milk supply chain in some states and wield substantial influence across the entire industry. As our Food & Power website details, the story is much the same in food-processing, egg production, grain production, and produce farming.
Monopolists have captured control over many lines of manufacturing as well. Corning, an American glass manufacturer, sells 60 percent of all the glass used in LCD screens, and Owens Illinois holds a near monopoly over market for glass bottles in the US. Rexam, a British company, holds a dominant position over the international supply of bottle caps and pharmaceutical bottles.
Hospital corporations across America have also been buying up physician practices in recent years. Hospital ownership of physician practices more than doubled between 2004 and 2011, from 24 to 49 percent. In drug stores, meanwhile, the pending takeover of Rite Aid by Walgreen’s would reduce the market to two giants, along with CVS.
Pharmaceutical companies have been merging at a record pace in recent years, and drug makers often use their concentrated market power to raise the prices of generic drugs, such as Digoxin, Daraprim, Naloxone, and standard vaccines.
Whirlpool’s takeover of Maytag in 2006 gave it control of 50 to 80 percent of U.S. sales of washing machines, dryers, and dishwashers and a very strong position in refrigerators. Maytag also controls the Jenn-Air, Amana, Magic Chef, Admiral, and KitchenAid brands and holds a dominant position over supply of Sears Kenmore products.
The FTC successfully blocked a proposed merger of Staples and Office Depot, but the market is still highly concentrated after Office Depot’s 2013 acquisition of Office Max. Collectively, the two firms control 69 percent of the entire office supplies market.
China’s vitamin cartel controls 100 percent of the market for U.S. Vitamin C, which is also known as ascorbic acid and which is used in almost all preserved foods.
·openmarketsinstitute.org·
Monopoly by the Numbers — Open Markets Institute