Despite stagnant wages, consumers increased their spending in December, reports the New York Times. It appears that we reduced our savings, which weren’t all that high to begin with. Since the Great Divergence, our personal savings rate has been on a downward slope.
Timothy Egan exposes Cathy McMorris Rodgers as a world-class hypocrite, espousing anti-government rhetoric despite being on the public payroll for most of her adult life. Besides, without government, her home county would be in even worse economic straits.
She gave the official Republican response to the State of the Union, uttering her party’s platitudes while ignoring the plight of those she represents in Congress, many of whom are poor, unemployed, and uninsured. Egan:
The reason that large numbers of people here in the home district of Cathy McMorris Rodgers are signing up for the first chance in their lives to get affordable, or even free, health care is because they know something their member of Congress doesn’t. The girl who once picked apples in Kettle Falls can’t see what they see, because she’s committed to a party that won’t allow it.
Regardless of who builds the ovens, babies will burn. So we might as well be the builders.
That thought came to mind while reading this from the New York Times:
The long-awaited environmental impact statement on the project concludes that approval or denial of the pipeline, which would carry 830,000 barrels of oil a day from Alberta to the Gulf Coast, is unlikely to prompt oil companies to change the rate of their extraction of carbon-heavy tar sands oil, a State Department official said. Either way, the tar sands oil, which produces significantly more planet-warming carbon pollution than standard methods of drilling, is coming out of the ground, the report says.
Ginandtacos.com on the official Republican response to the State of the Union address:
…The official response from Cathy McMorris-Rodgers appeared to be focused solely on answering the question, “Who the fuck is Cathy McMorris-Rogers?” It’s a fair question…
The other ongoing problem with the Republican responses is that they are written and delivered as though everyone in America is about 8 years old. Even if I agreed with her positions, I don’t think I could have tolerated being spoken at in the way. The point gets made all the time, but if you compare a speech like this to a political address from the 1950s or 1960s, the difference in tone is stark. Political figures used to speak to the nation as though it was made up of adults. Now they not only treat us like children, but not particularly bright children at that.
And yet, and yet—Americans continue to vote for Republicans. Perhaps the GOP is on to something: we’re rapidly becoming a nation of idiots as we nevertheless believe we’re the brightest bulbs on the planet.
Charles Blow, writing for the New York Times:
The president seems to have been reduced by the resistance. He seems to be concentrating on what can be done rather than on what should be done. This is a rational reaction, I suppose, to irrational opposition, but nonetheless it’s a sad indictment of our politics.
As a student at Berkeley in the 60s I often heard—or overheard, to be more precise—that “the system” was to blame for nearly everything judged evil at the time, from overt racism and war to the subjugation of women and environmental destruction. So the answer to solving the world’s problems was simple: destroy the system, or “the machine.” And with what shall we replace it? First things first.
Though I am hardly an expert on Marx, I believe he had a word or two to say about the system of capitalism. He thought it bad for the Rest of Us, to be sure. But just wait; it will collapse of its own accord, ushering in a society of proletariats owning the means of production, distributing to each according to his need and extracting from each according to his ability. It’s no wonder that those with ability, both real and imagined, didn’t much care for this radical arrangement. Nor did anyone else, save for a relative handful who stubbornly cling to the precepts of a long-dead German philosopher.
Nevertheless, suppose that Marx was onto something about “the system,” even if he was wrong about its demise and the contours of its replacement. What if capitalism won’t implode but, instead, continues on a dismal trajectory of the rich getting richer and the poor becoming more so?
That’s the conclusion of French economist Thomas Piketty in his new book, Capital in the 21st Century, whose English version will be published in March. He argues that only very dramatic actions by the world’s governments can possibly arrest the juggernaut.
Those actions include a global wealth tax (otherwise, capital will depart high-tax countries for lower-tax havens) and a graduated tax on financial transactions. The objective is to reduce the concentration of capital in a relatively few hands and divert more to labor.
Conservative readers will find that Piketty’s book disputes the view that the free market, liberated from the distorting effects of government intervention, “distributes,” as Milton Friedman famously put it, “the fruits of economic progress among all people. That’s the secret of the enormous improvements in the conditions of the working person over the past two centuries.”
Piketty proposes instead that the rise in inequality reflects markets working precisely as they should: “This has nothing to do with a market imperfection: the more perfect the capital market, the higher” the rate of return on capital is in comparison to the rate of growth of the economy. The higher this ratio is, the greater inequality is.
And, now, Milanovic:
Thomas Piketty has provided a new and extraordinarily rich framework allowing us to think about the recent increase in inequality not as an isolated phenomenon and to forever discuss the merits or demerits of high-skill biased technological progress vs. trade openness, but to see the rising inequality as part of a changing nature of modern capitalism.
Well, there’s no way in hell that governments will agree to impose the taxes advocated by Piketty, however necessary they may be. Instead, and because of the very fact that concentrated wealth buys enormous political influence, we may witness the opposite, a gradual unravelling of existing taxes on the wealthy, accelerating the Great Divergence begun in the latter 70s.
I mean, just consider the modern Republican Party—marinated in ignorance of all kinds and driven by antediluvian ideology that strives to make idiots of us all, save for a very privileged few. The rich must wonder at times how remarkably easy this all is, creating a system that screws 99 percent of us.
Investors have never figured out Apple and seem oblivious to its actual financial results. Consider this chart from MacRumors:
Apple’s profits were $13.1 billion. Samsung’s profits were $7.7 billion for the same quarter. Google made less than $3 billion. But, by all means, buy Google stock, and, while you’re at it, Amazon’s, too, which actually lost money during the same time frame.
What do consumers know? Apparently more than investors.