(Roughly) Daily

Posts Tagged ‘economics

“Whoever said crime doesn’t pay is an idiot. It pays great, which is why there is so much of it.”*…

 

source

Low-level criminals in the US make an average of $900 per week, according to an estimate published in the academic journal Criminology.

So, people who commit small crimes, like robberies, forge checks, and deal drugs, are making more money per week than the average US worker ($885).

Low-level criminals are also making more money per week than high school dropouts ($504) and college dropouts ($756).

That might be in part because wage growth (in the formal economy) is so sluggish in the US, even though unemployment is low, at 4.4%. Wages grew only 2.5% between mid-2016 and mid-2017. While some analysts would expect it to be growing at 3.5%

More at Quartz Index.

* Jay Crownover

###

As we sigh from the straight and narrow, we might send well-organized birthday greetings to Joseph Michael “Joe Cargo” Valachi; he was born on this date in 1904.  A member of Lucky Luciano’s mob family from the 1930s through the 1950s, Valachi was primarily involved in rackets and gambling– until his racketeering conviction in 1959, for which he was sentenced to 15 years in a federal prison.

Valachi attained his notoriety– and historical significance in 1963, when he was the star witness in a government inquiry into the Mob (the McClelland Committee).  He provided the Committee with graphic details of Mob life, and named six New York are Crime families.  The first member of the Italian-American Mafia to publicly acknowledge its existence, he is credited with popularization of the term “Cosa Nostra.”

After returning to prison, Valachi teamed with appointed writer Peter Maas to craft his memoirs, The Valachi Papers, which were published in 1968.

Valachi testifying

source

 

Written by LW

September 22, 2017 at 1:01 am

“Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution”*…

 

What can a 19th-century rebellion against automation can teach us about the coming war– the robots are coming!– in the job market?

Clive Thompson, an author and journalist at the New York Times Magazine and Wired, revisited Luddite’s history in an article for The Smithsonian to see what it could teach us. As machine learning and robotics consume manufacturing and white-collar jobs alike, the 200-year-old rebellion’s implications for automation are more relevant than ever, says Thompson:

“The lesson you get from the end of the Luddites is: Do the people that are profiting off automation today want to participate in distributing their profits more widely around the population, or are they going to fight just as hard as they did back then?”

That economic and political question is hanging over western democracies coping with a wave of populism seemingly tracking a widening gap between stagnant wages and ballooning wealth at the top. While automation eventually tends to create new jobs even after it destroys old ones, that’s little consolation for millions of workers whose skills and experience are obsolete…

More on this all-too-relevant history in a interview with Thompson: “Luddites have been getting a bad rap for 200 years. But, turns out, they were right.”

And do read Thompson’s original article: “When Robots Take All of Our Jobs, Remember the Luddites.”

Then, check out “Robots don’t have to take over jobs in order to be a problem for workers.”

* Stephen Hawking

###

As we heft our hammers, we might we might send thoughtful birthday greetings to José Ortega y Gasset; he was born on this date in 1883.  A philosopher and essayist, he is perhaps best known for The Revolt of the Masses, which characterized 20th-century society as dominated by masses of mediocre & indistinguishable individuals– a conception tha converged with other “mass society” theorists like Karl Mannheim, Erich Fromm, and Hannah Arendt.  (Lest his view be seen as too grim and judgmental, he is memorialized in what has become known as “the Ortega hypothesis,” based on a quote in The Revolt of the Masses, that states that average or mediocre scientists contribute substantially to the advancement of science.)

In exile during the Spanish Revolution, he refused to support either side or to hold academic office under Franco.

 source

 

Written by LW

May 9, 2017 at 1:01 am

“There are people in the world so hungry, that God cannot appear to them except in the form of bread”*…

 

We stand at the precipice if we don’t re-evaluate our understanding of poverty and inequality. The narrative in the neo-liberal west is that if you work hard, things work out. If things don’t work out, we have the tendency to blame the victim, leaving them without any choices. Brexit, Le Pen, and the defeat of Hillary Clinton are examples of the cracks that result from inequality and poverty, symptoms of my childhood experience writ large. The Piketty pitchforks are out, and the march to global disorder can only be arrested by adopting measures that begin to price in the stacked deck that I and anyone else born into deep poverty sees, and resents.

I believe we will see the Italian Five Star Movement submit a referendum to leave the EU this year, and that Marine Le Pen has better than even odds of winning the French election. The EU is in danger of buckling under a globalist defeat and may exist in name only two years from now.

These trends are being accelerated by the blind belief that the poor have failed to seize the opportunities that the market or globalization has created. This myth deserves to be taken off life support—and the emerging, empirical, and carefully observed science of poverty can help us do so if we pay it the attention it deserves…

A powerful plea for a fundamental re-understanding of the economic inequality that vexes our society, and of the myth of meritocracy that has helped sustain it: “Why Poverty Is Like a Disease.”

* Mahatma Gandhi

###

As we agree with FDR that “the test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little,” we might recall that this date in 1907 was “Bloody Tuesday.”  The San Francisco streetcar strike, which had begun two days earlier, erupted into violence when armed strikebreakers fired into an angry crowd of strike supporters.  Soon armed strike sympathizers returned fire.  2 died; 20 were injured.

Armed strike breaker, left, shoots into the crowd on Bloody Tuesday, May 7, 1907. The original caption in The San Francisco Examiner said that “Photographer Coleman” took the picture “the moment before the man running beside him was fatally shot.”

source

 

Written by LW

May 7, 2017 at 1:01 am

“If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid”*…

 

Economists have a name for this

There are plenty of economics terms regular people would find not only very interesting, but useful for thinking about policy. Sadly, the most commonly used econ words tend to be the ones with the vaguest meanings — “rational,” “equilibrium” and “efficient.” Instead, here are some of my suggestions:

• Endogeneity

Everyone knows that correlation doesn’t equal causation, but somehow people seem to forget. Endogeneity is a word that can help you remember. Something is endogenous when you don’t know whether it’s a cause or an effect (or both). For example, lots of people note that people who go to college tend to make more money. But how much of this is because college boosts earning power, and how much is because smarter, harder-working, better-connected people tend to go to college in the first place? It’s endogenous. The media is full of stories about how which kind of people stay married, or what diet is associated with better health. Whenever you see these stories, you should ask “What about endogeneity?”…

Noah Smith suggest four other useful concepts in “5 Economics Terms We All Should Use.”

* John Maynard Keynes

###

As we get dismal, we might send fancy birthday greetings to Sir Frederick Henry Royce; he was born on this date in 1863.  An engineer and car designer, he founded (with Charles Rolls and Claude Johnson) the Rolls-Royce company, which introduced the first successful luxury cars in the emerging automotive industry.

 source

 

Written by LW

March 27, 2017 at 1:01 am

“The only function of economic forecasting is to make astrology look respectable”*…

 

We should remember that we will pass down a whole society to our kids—including the natural environment that underwrites the quality of life of future generations. If the cost of ensuring that large numbers of children do not grow up in poverty and that the planet is not destroyed by global warming is a somewhat higher current or future tax burden, that hardly seems like a bad deal—especially if the burden is apportioned fairly. Now suppose, by contrast, that we hand our kids a country in which large segments of the population are unhealthy and uneducated and the environment has been devastated by global warming, but we have managed to pay off the national debt. That is, after all, the future that many in the mainstream of the economics profession are prescribing for the country. Somehow, I don’t see future generations thanking us…

Economists have botched the promise of widely distributed prosperity: why they have no intention of stopping now– and why that matters so much: “The Wrongest Profession.”

* John Kenneth Galbraith

###

As we recalculate, we might recall that it was on this date in 1602 that Vereenigde Oost-Indische Compagnie (VOC, or The Dutch East India Company, as it’s known in the Anglophone world) was born.  Generally considered the world’s first trans-national corporation and the first publicly to issue stocks and bonds (and the first company to be ever actually listed on an official stock exchange), it began with a 21-year monopoly on the Dutch spice trade.  The VOC also prefigured the mega-corporation of today in that it had quasi-governmental powers, including the ability to wage war, imprison and execute convicts, negotiate treaties, strike its own coins, and establish colonies.  Considered by many to be the greatest corporation in history, the VOC eclipsed all of its rivals in international trade for almost 200 years.

 source

 

Written by LW

March 20, 2017 at 1:01 am

“Sameness is the mother of disgust”*…

 

Let’s imagine we’re on a beach that’s a mile long, and on that beach there are a couple of ice cream carts…

cart1

Let’s also imagine that the ice cream sold at each cart is identical in quality and cost, so the only reason customers choose one cart over the other is when one cart is closer. Given all of that, the best location of the carts is with each cart halfway between the middle of the beach and one of the ends. In this arrangement each cart gets 50% of the customers, and no one has to walk more than 1/4 mile to get some ice cream.

cart2

But what if one of the ice cream vendors decides to move their cart a bit closer to the middle of the beach…

cart3

They are now the ice cream cart of choice for a bigger segment of the beach, and will get more business. The other ice cream cart has no choice but to retaliate…

cart4

Now once again they each serve the same percentage of the beach-going public. Since any further movement by either cart would mean a loss of business for that cart, they end up permanently side by side, in the middle of the beach, even though this is a less optimal location for their customers.

That is a simple example of something called Hotelling’s law; the tendency of competing products to end up as similar as possible…

“Producers of products and services tend to make their products and services as similar as possible to those of their competitors.”  From The Laws of the Universe, the story of Hotelling’s Law.

* Petrarch

###

As we nose around for niches, we might send ambitious birthday greetings to Count Giovanni Pico della Mirandola; he was born on this date in 1463.  An Italian philosopher, he undertook, in 1486, at the age of 23, to defend 900 theses on religion, philosophy, natural philosophy and magic against all comers, in the process of which he wrote his famous Oration on the Dignity of Man, which has been called the “Manifesto of the Renaissance”; a revitalization of Neo-Platonism, it was a seminal text of Renaissance humanism and of what has been called the “Hermetic Reformation.”

Pico’s portrait, from the Uffizi Gallery in Florence

 source

Written by LW

February 24, 2017 at 1:01 am

“The man who invented doritos has passed away at the age of 97. He asked to be buried with the creators of Fritos and Cheetos in a variety pack”*…

 

All told, there are 26 separate ingredients in Doritos Nacho Cheese Tortilla Chips…

While most of these individual ingredients aren’t all that bad for us, they’re a cheese-dust-covered grenade when consumed together. “The more you mess with food, the more you’re demanding your immune system to figure out what the heck all these new things are — and it can make mistakes,” Shanahan says. For instance, studies show that over-processed foods have contributed to the rise in food allergies in Western countries.

Weirdly, while the ingredients that sound like they’d be unhealthy (i.e., disodium inosinate) aren’t really all that bad, the ingredients we think we recognize (i.e., vegetable oils) are slowly waging the real war on our insides. “The main thing people need to pay attention to are the first few ingredients in these foods, like vegetable oil,” Shanahan urges. “Vegetable oils alone can cause diabetes, and they don’t even contain any sugar.”

All 26 ingredients in America’s favorite cheese-flavored chip, singly and as a whole, explained:  “What’s in This?: Doritos Nacho Cheese Tortilla Chips.”

* Jimmy Fallon

###

As we wipe our fingers, we might send apocalyptic birthday greetings to The Reverend Thomas Robert Malthus; he was born on this date in 1766.  An English cleric and scholar, he was influential both in political economy and demography.  He is best remembered for his 1798 essay on population growth, in which he argued that population multiplies geometrically and food arithmetically; thus, whenever the food supply increases, population will rapidly grow to eliminate the abundance, leading inevitably to disastrous results – famine, disease and/or war… a conclusion that remains controversial to this day.

 source

 

Written by LW

February 13, 2017 at 1:01 am

%d bloggers like this: