The GameStop game stop
In the end, the old adage “the bigger the bubble, the bigger the pop” will be confirmed yet again. In the meantime, Doug Henwood offers some thoughts about the playpen called the stock market:
It’s funny to see some Wall Streeters complain that there’s something unfair about this action, since these are the sorts of games they play with each other and the general public all the time. They talk up stocks or talk them down, depending on their interests, and plot against what they see as weak or vulnerable players all the time. It’s just that the speculators with names like DeepFuckingValue who are savaging them for now are the wrong kind of people. They don’t live in Greenwich in houses with twenty-car garages.
Read his take here.
Paying the price for offshoring production
Americans should draw a lesson from the pandemic:
In the past two decades, the U.S. economy has been lulled into following a path of offshoring, driven by an ideology celebrating short-term financial gains above everything else. The country, once a manufacturing powerhouse, is populated by corporations that have moved manufacturing overseas and lost their ability to produce domestically, leaving little behind except shell companies that employ relatively few people. The United States no longer produces even the essentials, from personal protective equipment to our smartphones and laptops.
It doesn’t have to be this way. Read more here.
Tax cuts for the rich – period
A new study from the LSE looks at the effects of tax cuts for the rich in 18 OECD countries over the 50-year period from 1965 to 2015. The conclusion:
We find that major tax cuts for the rich push up income inequality, as measured by the top 1% share of pre-tax national income. The size of the effect is substantial…. Turning our attention to economic performance, we find no significant effects of major tax cuts for the rich. More specifically, the trajectories of real GDP per capita and the unemployment rate are unaffected by significant reductions in taxes.
One more nail in the coffin of “supply-side economics”. Read more here.
Pollution brutality
The New York Times reports from Delhi:
Air pollution killed more Indians last year than any other risk factor, and Delhi is among the most polluted cities in the country. But the burden is unequally shared.
Read the story of two children here. For more on Delhi’s air pollution as a classic case of environmental injustice, see here.
Big money and ‘public opinion’
Tom Ferguson writes about a new study that highlights the congruence between public policy, public opinion, and the preferences of the rich:
Surveys of opinion at the level of the [richest] 1 or 2%, especially if they are trying to explain changes in policy, do not typically reflect anything as innocently vaporous as “opinion” at all. Their data are instead noisy by-products of the mobilization of big money with its comet-like trail of social networks, subsidized op eds, subservient think tanks, and journalists seeking applause and better positions. That is how the reality of money-driven political systems shows up in surveys.
This is the crucial point that economics and political science need to absorb. Refining models of voter behavior to take more account of voter ignorance is pointless if you systematically bypass what’s driving the system, especially when money speeds across state lines at the speed of light.
Read more here.
Some make money while they sleep… while others risk their lives
From a new report called “Billionaire Wealth vs. Community Health”:
As of November 17, 2020, the wealth of 647 U.S.billionaires has increased almost $960 billion since mid-March, the beginning of the pandemic, approaching $1 trillion in wealth increases.
Read more here.
America’s inequality crisis
Underlying the political crisis is a deeper one:
American inequality has reached a crisis moment. The 60 richest billionaires in America control as much wealth as the bottom 50 percent of Americans, according to the latest Fed data. To Collins, the Inequality.org editor, America is reaching an “oligarchic moment,” where the economy is increasingly hardwired to concentrate wealth and power at the very top. It is urgent to increase taxes on the wealthiest not only to generate revenue, he says, “but to put a brake on accretions of power. It isn’t is a class warfare,” he insists. “This is really, ‘How do you protect against such a levels of extreme inequality that it threatens basic democratic functioning?’”
Source: Tim Dickinson, “How Trump Took the Middle Class to the Cleaners,” Rolling Stone, October 26, 2020.
Productivity versus wages
A chart shows what’s happened in the USA – and it’s not a pretty picture:
Source: Economic Policy Institute.
Inequality: Bad for your health
Worried about Covid-19? Check this out:
Source: Institute for Policy Studies.
A risky trade
Outsourcing crucial industries in pursuit of lower wages and lower taxes puts corporate profits ahead of public health. Today the U.S. is paying the price:
Source: Global Development Policy Center, Boston University.
