Sarah Wrote That | economics

bmichael:felixsalmon:

I can look at this NYC income map for hours. Fascinating stuff.

This is hell of fascinating or interesting. It’s not a video; if you click play, you get an interactive map.

Wow DUMBO and the Bloomberg waterfront.

Reblogged from B Michael Tumblr

andrewgraham:

“NPR requested help from numerous Republican congressional offices, including House and Senate leadership. They were unable to produce a single millionaire job creator for us to interview. So we went to the business groups that have been lobbying against the surtax. Again, three days after putting in a request, none of them was able to find someone for us to talk to.”

— GOP Objects To ‘Millionaires Surtax’; Millionaires We Found? Not So Much (via Tumble DC 25)

I’m thrilled NPR did this piece, but I wish they’d been more systematic—maybe they have been elsewhere—and interviewed at least one tax expert and somehow more directly fact-checked this:

The [GOP] argument is that many small-business owners report company profits on their individual taxes because of the way their businesses are structured.

Summarizing a misstatement lends it an air of validity, of objectivity, that anecdotal rejoinders don’t entirely dispel.

Read on →

Reblogged from this might not hurt, but close your eyes anyways

via New York State Comptroller report.

Catherine Rampell:

That chart is from a new report from the New York State Comptroller’s office on the securities industry in New York City.

It shows that the average salary in the industry in 2010 was $361,330 — five and a half times the average salary in the rest of the private sector in the city ($66,120). By contrast, 30 years ago such salaries were only twice as high as in the rest of the private sector.

(Source: The New York Times)

What Would Keynes Say Now? →

John Cassidy’s distillation of Keynes is essential reading (for instance: both traditional GOP and Democratic responses to recession are essentially Keynesian—whether lowering taxes or increasing spending, the government is doing something). The full piece is unfortunately behind the New Yorker paywall but he summarizes key points on his NYer blog:

1. In the short-run, demand is what drives economies, not prices.

2. In a demand-driven economy, many types of unfavorable and self-sustaining outcomes are possible, including lengthy slumps.

3. The role of the government is to sustain demand and help the economy avoid such disastrous outcomes.

I regard these statements as truisms, even though others would dispute them, to varying degrees. Once you get beyond them, things get murky.

Read on →

"
To monitor the evolving American consumer market, Proctor & Gamble executives study the Gini index, a widely accepted measure of income inequality that ranges from zero, when everyone earns the same amount, to one, when all income goes to only one person. In 2009, the most recent calculation available, the Gini coefficient totaled 0.468, a 20% rise in income disparity over the past 40 years, according to the U.S. Census Bureau.

‘We now have a Gini index similar to the Philippines and Mexico — you’d never have imagined that,’ says Phyllis Jackson, P&G’s vice president of consumer market knowledge for North America. ‘I don’t think we’ve typically thought about America as a country with big income gaps to this extent.’
"

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“As Middle Class Shrinks, P&G Aims High and Low” - Wall Street Journal

via marathonpacks:

A basic primer on neoliberalism. A basic thing the Occupy Wall Street folks should be screaming about.

via bmichael:

In order to read the full article, you have to like Google its title or something and then click through from Google. It’s worth the effort because, again, it’s super interesting to think about the new two-tiered America. (Ie, a top tier with mostly all the money and a bottom tier that’s statistically large but has virtually none of the money.) Especially when you consider that (maybe) the big distributors of culture are going to be driven by the top tier, but by virtue of their business model, be taken in mostly by the bottom tier. How is advertising and consumer culture going to cope with the disappearance of a middle class to project its desires onto? We’ve gone through recession rap, but I think there’s going to be a large field for recession everything for the next few decades.

So worth the effort. I was struck again, reading it, by how insufficient companies are as arbiters of the shape and character of society, because for all their conglomerate intelligence and occasional, individual brilliance, even the largest and most powerful of them are essentially response mechanisms, thriving or failing by their success in adapting to circumstance*:

Luxury retailer Saks Inc. is bolstering its high-end apparel and accessories because its wealthiest customers—not those drawn to entry-level items—are driving the chain’s growth.

Citigroup calls the phenomenon the “Consumer Hourglass Theory” and since 2009 has urged investors to focus on companies best positioned to cater to the highest-income and lowest-income consumers. It created an index of 25 companies, including Estée Lauder Cos. and Saks at the top of the hourglass and Family Dollar Stores Inc. and Kellogg Co. at the bottom. The index posted a 56.5% return for investors from its inception on Dec. 10, 2009, through Sept. 1, 2011. Over the same period, the Dow Jones Industrial Average returned 11%.

“Companies have thought that if you’re in the middle, you’re safe,” says Citigroup analyst Deborah Weinswig. “But that’s not where the consumer is any more—the consumer hourglass is more pronounced now than ever.”

How much of this is more or less inevitable, the consequence of markets opening up, technological shifts, and how much is policy? How much is because policy was shifted for precisely this outcome? A great deal, I suspect.

*I know: lobbyists. Though to continue my metaphor, in that they’re behaving like megafauna and flora, creating the conditions for themselves to thrive, regardless of long term viability.

Reblogged from B Michael Tumblr

Maybe "Invisible Vigilantes" Or "The Confidence Fairy" Will Catch On? →

Paul Krugman:

somehow it has become conventional wisdom that now is the time to slash spending, despite the fact that the world’s major economies remain deeply depressed…

…As Douglas Elmendorf, the director of the Congressional Budget Office, recently put it, “There is no intrinsic contradiction between providing additional fiscal stimulus today, while the unemployment rate is high and many factories and offices are underused, and imposing fiscal restraint several years from now, when output and employment will probably be close to their potential.”

This Is What a Bubble Looks Like →

"We too have lived through an era of stability, certainty, and the illusion of indefinite economic improvement. But all that is now behind us. For the foreseeable future we shall be as economically insecure as we are culturally uncertain. We are assuredly less confident of our collective purposes, our environmental well-being, or our personal safety than at any time since World War II. We have no idea what sort of world our children will inherit, but we can no longer delude ourselves into supposing that it must resemble our own in reassuring ways."

- Tony Judt

31 Dec 2009 08:37

The Fascination Of What’s Difficult

Laura started a good discussion at Apt. 11D about Friedman’s take on the need for education reform. ~~The moustache of understanding~~ Friedman thinks that education needs to focus on… well, on what Tom Friedman focuses on:

So our schools have a doubly hard task now — not just improving reading, writing and arithmetic but entrepreneurship, innovation and creativity.

(You might note the missing gerund in front of “entrepreneurship”—perhaps ‘teaching’ or ‘encouraging’?) But, as Laura notes, it’s heartening simply to see education on the Times editorial page, and Friedman manages to avoid putting too many metaphors through his usual enhanced interrogation.

Is it useful, though, to draw the kind of distinctions the piece is about? The idea of teaching creativity is more than the inadvertently ironic fodder for self-satisfied hipster smirking it initially seems.

Read on →

23 Oct 2009 15:55