A few links on where we stand, posted without comment.
What we are witnessing is a one-sided, long-term game of whack-a-mole, in which regulators crack down on one type of illegal activity, only for the same type of face-ripping-off and client-blowing-up to resurface in another market. And who knows how much is going on under the underfunded radar of the regulators?
Organized Crime on Wall Street by James Kwak (964 words).
A pet issue is that the claim that outsourcing and offshoring lower costs is greatly exaggerated. Offshoring and outsourcing (we’ll just say “outsourcing” for the purposes of this post) do lower direct factor and lower-level worker costs. But they do so at the increase of greater coordination costs of much more highly-paid managers. And they also increase shipping and financings costs, and downside risk. Having people work at a distance, whether managerially or by virtue of being in an outside organization where the relationship is governed by contract, increases rigidity (harder to respond to changes in market demand) and the odds of screw-ups due to communication lapses. And outsourcing also reduces an organization’s skills. Those lower-level people have a lot of product know-how that you lose when you transfer activities to an outside operation. It’s nice to think that you can hollow out your organization and just do all the sexy design and marketing stuff and dump the grunt work on other players. But over time you are breeding future competitors.
More on the Myth of Outsourcing’s Efficiency by Yves Smith (909 words).
That was the central principle that gave rise to Pikettymania one year ago. With preferential tax rates for capital — such as the 23.8% maximum rate on capital gains and qualified dividends in the United States — it really doesn’t matter what the top labor tax rate is. The people at the top of the pyramid make almost all of their money from capital, and they laugh at the 43.4% rate on earned income.
The Importance of Taxing Capital by James Kwak (806 words).
Now, why not do a little sociohistorical analysis too, and look at what happens when unemployment and wages fall and inequality rises, and a large section of a population is discontented and feels it has no future. Guess what - the economic environment stops being like the one we have at present.
Machine Age automation kills jobs & wages shocker by Alan Patrick (352 words).
In sum, waiting for wages to rise is like waiting for the Messiah. The true believers will continue to assert that the magic moment is just around the corner, but the moment just keeps on being postponed. In the meantime, there are too many statistical imposters: unemployment numbers, figures on job creation, GNP growth rates and average wages. The obstacles to President Obama’s vision of “Middle-Class economics” are still too numerous: too much surplus labor, too much globalization, too much technological unemployment, and too little bargaining power for labor without union backing.
Why you shouldn’t expect wages to rise any time soon by John Komlos (1763 words).
Perhaps it is time to rethink the “college for everyone” meme as ‘fair’ and instead realize it is nothing more than government delaying the inevitable of a middle-class being down-trodden to debt-servitude for the good of the few at the top who need credit to be extended to any or everyone in order for the obvious unsustainability to be exposed for all to see.
Want A Low-Wage Job? Go To College by Tyler Durden (197 words).
In case you’d like to depict the Brave New World of more sorta-self employed people (more accurately, what amount to disposable parts for shafting services like Uber) is somehow a boon to them, the data says otherwise. Over the weekend, Bill Mitchell summarized a new OECD study on inequality that discuses how the shift towards “non-standard work,” as in employment arrangements other than full-time jobs, hurts workers and the economy overall.
The Shafting, Um, Sharing Economy by Yves Smith (1746 words).
People. Buying and selling things is not “sharing”. It’s the opposite of sharing. Thank you. (@umairh)
Our Grim Meathook Future
The upshot of all of this is that the Future gets divided; the cute, insulated future that Joi Ito and Cory Doctorow and you and I inhabit, and the grim meathook future that most of the world is facing, in which they watch their squats and under-developed fields get turned into a giant game of Counterstrike between crazy faith-ridden jihadist motherfuckers and crazy faith-ridden American redneck motherfuckers, each doing their best to turn the entire world into one type of fascist nightmare or another.
Full Text Of The Grim Meathook Future Thing by Joshua Ellis (460 words).