Sunday, November 6. 2011
Some scattered links I squirreled away during the previous week:
Paul Krugman: More Thoughts on Weaponized Keysianism:
Even (or perhaps especially) the Republicans acknowledge that cutting
on useless weapons systems costs the economy jobs.
And the evidence clearly shows that weaponized Keynesianism works --
which means that Keynesianism in general works.
So why do politicians and their hired economic propagandists say
differently? On reflection, I think it's a bit more complicated than
I suggested in my previous post on this topic, because there's a
strong element of cynicism as well as genuine intellectual confusion.
What kind of cynicism am I talking about? First, there's the general
fear on the part of conservatives that if you admit that the government
can do anything useful other than fighting wars, you open the door to
do-gooding in general; that explains why conservatives have always seen
Keynesianism as a dangerous leftist doctrine even though that makes no
sense in terms of the theory's actual content. On top of that there's
the Kalecki point that admitting that the government can create jobs
undermines demands that policies be framed to cater to all-important
That said, there's also the Keynes/coalmines point: there's a strong
tendency to take any spending that looks like a business proposition --
building bridges or tunnels, supporting solar energy or mass transit --
and demanding that it appear to be a sound investment in terms of its
financial return. This makes most such spending look bad, since almost
by definition a depressed economy is one in which businesses aren't
seeing good reasons to invest. Defense gets exempted because nobody
expects bombs to be a good business proposition.
The moral here should be that spending to promote employment in a
depressed economy should not be viewed as something that has to generate
a good financial return; in effect, most of the resources being used are
in reality free.
Paul Krugman: Graduates Versus Oligarchs:
On the argument many apologists for the status quo make that the key
to getting ahead is getting an education: "that the 20 percent or so
of American workers who have the skills to take advantage of new
technology and globalization are pulling away from the 80 percent
who don't have these skills." Krugman whips out a chart that shows
that the income share of the 80-99 percentile group has remained
level since 1979 -- actually, bulges a bit in the middle but by
2007 has returned to 1979 levels. On the other hand, the share of
the top 1% has increased dramatically:
The big gains have gone to the top 0.1 percent.
So income inequality in America really is about oligarchs versus
everyone else. When the Occupy Wall Street people talk about the 99
percent, they're actually aiming too low.
One last point: I see that David Brooks is arguing that the
oligarchy issue, if it matters at all, is a coastal phenomenon, not
the issue in the heartland. Let me point out, then, that we have one
country, with a tightly integrated economy. High finance is concentrated
in New York, but it makes money from the United States as a whole. And
even when oligarchs clearly get their income from heartland, red-state
sources, where do they live? OK, one of the Koch brothers still lives
in Wichita; but the other lives in New York.
Put it this way: having much of the wealth your state creates go to
people who are in effect absentee landlords, whose income therefore
shows up in another state's statistics, doesn't mean that you have an
equal distribution of income. Out of state shouldn't mean out of mind.
Also see Krugman's
I Do Not Think That Word Means What You Think It Means, Hypocrisy
Apparently you can only be authentic if your politics reflect pure
personal self-interest -- Mitt Romney is Mr. Natural.
Inequality Trends in One Picture: OK, straight to the picture:
Andrew Leonard: America's Corporate Tax Obscenity:
In 2010, Verizon reported an annual profit of nearly $12 billion. The
statutory federal corporate income tax rate is 35 percent, so theoretically,
Verizon should have owed the IRS around $4.2 billlion. Instead, according
to figures compiled by the Center for Tax Justice, the company actually
boasted a negative tax liability of $703 million. Verizon ended up
making even more money after it calculated its taxes.
Verizon is hardly alone, and isn't even close to being the worst
offender. Perhaps most famously, General Electric raked in $10.5 billion
in profit in 2010, yet ended up reporting $4.7 billion worth of
negative taxes. The worst offender in 2010, as measured by its overall
negative tax rate, was Pepco, the electricity utility that serves
Washington, D.C. Pepco reported profits of $882 million in 2010, and
negative taxes of $508 million -- a negative tax rate of 57.6 percent.
Altogether, according to "Corporate Taxpayers & Corporate Tax
Dodgers 2008-10," a
blockbuster new report put together by the Citizens for Tax Justice
and the Institute on Taxation and Economic Policy that will have you
reaching for your hypertension medicine before you finish reading the
third page, 37 of the United States' biggest corporations paid zero
taxes in 2010. The list is a blue-chip roll-call.
As the authors acidly note, "Most Americans can rightfully complain,
'I pay more federal income taxes than General Electric, Boeing, DuPont,
Wells Fargo, Verizon, etc., etc., all put together.' That's an