Skip to main content

Economics Daily Digest by the Roosevelt Institute banner

By Rachel Goldfarb, originally published on Next New Deal

Click here to receive the Daily Digest via email.

Seattle Enacts $15 Minimum Wage, a Phased In Big Dream (Seattle Post-Intelligencer)

Joel Connelly reports on the city council's passage of the highest minimum wage in the country, and the conflicts that arose along the way.

Colleges Are Buying Stuff They Can’t Afford and Making Students Pay For It (The Nation)

A new study from the University of California, Berkeley's Debt and Society Project ties universities' increased debt from capital projects to rising student debt, writes Michelle Chen.

Low Retail Wages Disproportionately Hurt Women (MSNBC)

A new Demos report highlights this industry-wide problem, which Ned Resnikoff connects to other industries with more women and very low wages, like food service and domestic workers.

50 Shades of Fed (WaPo)

Jim Tankersley reports on a gathering of economists who discussed whether the Federal Reserve is overstepping its bounds. He notes that they didn't talk much about unemployment.

Coca Cola Demonstrates CEO Pay Has Nothing to Do with Performance (AJAM)

The bonus packages at Coca Cola are so disproportionately large compared to the company's profits that they can't truly be "performance pay," says Dean Baker.

Los Angeles Sues Big Banks for Predatory Mortgages But Unlikely to Win (The Guardian)

The city is suing banks for discriminatory practices that targeted minority communities for subprime mortgages, reports David Dayen, but it won't compensate homeowners with any winnings.

New on Next New Deal

Working Families Party Endorsement of Cuomo Shows Progressive Political Power

Roosevelt Institute Senior Fellow Richard Kirsch argues that New York Governor Andrew Cuomo's agreement with the Working Families Party creates an opportunity for real progressive change.

Originally posted to Daily Kos Economics on Tue Jun 03, 2014 at 05:04 AM PDT.

Also republished by Daily Kos.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •   Economic Espionage. (1+ / 0-)
    Recommended by:

    Last month, Attorney General Eric Holder announced that the United States was charging members of the Chinese military with economic espionage. Stealing trade secrets from American companies, he said, enabled China to “illegally sabotage” foreign competitors and propel its own companies to “success in the international marketplace.” The United States should know. That’s pretty much how we got our start as a manufacturing power, too.

    The United States emerged as the world’s industrial leader by illicitly appropriating mechanical and scientific innovations from Europe,” the historian Doron Ben-Atar observes in his book “Trade Secrets.”

    These days, of course, things have changed. The United States is the world’s biggest advocate for enforcing stringent intellectual-property rules, which it insists are necessary for economic growth. Yet, as our own history suggests, the economic impact of technology piracy isn’t straightforward.

    You Don't Happen To Make It. You Make It Happen !

    by jeffrey789 on Tue Jun 03, 2014 at 07:30:28 AM PDT

  •  Stephen Colbert on Thomas Piketty (1+ / 0-)
    Recommended by:

    Stephen Colbert on Thomas Piketty
     June 3

    ... In the latest bout of American media swooning over Mr. Piketty’s 696-page “Capital in the Twenty-First Century” — he also occupied the Business Week cover last week in a parody of the fan magazines favored by teenage girls — he appeared on the show with Stephen Colbert’s bombastic alter ego.

    Mr. Colbert opened his show wearing a goatee, which seemed as if it might be a nod to the similarities many critics have noted between Mr. Piketty’s works and those of the (heavily bearded) Karl Marx, or perhaps a general parody of a French intellectual. Not quite.

    “I grew this in solidarity with my personal friend, billionaire industrialist Tony Stark,” the in-character Mr. Colbert said. “If Piketty had his way, and Tony was coughing up 80 percent in taxes, suddenly he’s not a billionaire anymore, and can’t afford to be Iron Man. Then who’s saving New York from the Chitauri invasion? Hawkeye? Sure, after he gets there on the bus.”

    Watch Mr. Colbert’s riff on the “French Fried Fraud” and his voluminous book, “Harry Potter and the Deathly Boring,” here.

    Thomas Piketty vs. Billionaire Heroes

    And his full interview with Mr. Piketty, where he tries to wrap his head around the r>g formula (that is, the rate of return on capital exceeds the rate of growth) that economics commentators have been debating all spring, here.

    Thomas Piketty

    You Don't Happen To Make It. You Make It Happen !

    by jeffrey789 on Tue Jun 03, 2014 at 08:36:19 AM PDT

    •  See my comment below. (1+ / 0-)
      Recommended by:

      The idea that anybody is actually arguing about the problem of r>g, rather than simply accepting the obvious truth of it and going on to talk about meaningful solutions, is that starkest evidence of the utter fraud that is modern economics.

      Any 12th-grader who has finished AP Calc can be trivially made to understand the unsustainability of geometric increase in financial wealth.

      That individuals with PhDs and pseudo-Nobel Prizes might find the concept disputable is all we need to know, to know that they all should be put to work picking up litter on the highways.

      To put the torture behind us is, inevitably, to put it in front of us.

      by UntimelyRippd on Tue Jun 03, 2014 at 09:06:52 PM PDT

      [ Parent ]

  •  Roosevelt Institute totally wrong on WFP & Cuomo (1+ / 0-)
    Recommended by:

    Just a bad spin job of BS in that article (and diary that they posted and didn't engage in here on DKos)

    Never underestimate stupid. Stupid is how reTHUGlicans win!

    by Mannie on Tue Jun 03, 2014 at 08:05:34 PM PDT

  •  So, I followed the link to the article on college (0+ / 0-)

    spending, and the headline does not do justice to the essential point of the story. The headline sort of implies that the colleges are on some sort of unwarranted spending binge, but that is not the focus of the report.

    Rather, what is significant is that, per the article, about 45 billion dollars per year, 10% of the annual "budget" for American higher education, is spent servicing debt -- either student loan debt, or bonds issued by states or universities.

    So, I'm going to take yet another opportunity to point out this simple mathematical inevitability of any economic system in which unspent accumulated "credit" is expected to accrue a geometric gain, endlessly: Eventually, 100% of economic output will accrue to a minuscule proportion of the population. This is because geometric growth (for example, 6% "real" returns per year) is fundamentally exponential in character. At a measly 6% (and no, the top .01% are not satisfied with 6%), in one century their wealth will increase by a factor of 340.

    [Disclaimer: I'm going to play a bit fast and loose with the following examples, because being precise would take 3 weeks, would only confuse the readers, and wouldn't make a damned bit of difference. What is important about the following examples is not the particular set of numbers, but the nature of the set of numbers.]

    Exponential growth can never be sustained, anywhere, ever. If today 10% of the money spent on education goes to servicing the education-incurred debt, then in 12 years, that number will need to be 20%. In 25 years it will need to be 40%. In 50 years, it will need to be 160%!! Wait what? It can't be more than 100%! True enough.

    But what do I mean when I say "need"? I mean, our economic system will demand it: Either we pay the vigorish, or they firebomb society.

    The only solution is to put a fundamental cap on the share of the economic output that can accrue as financial return to unspent credit. If the economy doesn't grow, neither does aggregate financial wealth -- and if the economy does grow, aggregate financial wealth can only grow proportionately; and either way, aggregate financial wealth in one economic quintile cannot grow at the expense of another.


    If you believe anything else will work, you are wrong.
    If you believe "this is not pragmatic ... such a solution is politically impossible, and will never happen in America", then you believe that America (and indeed, the entire planet) is doomed, within a century, to a future of phenomenal concentration of wealth -- 95% of Americans will live at the approximate level of the average current Bangladeshi, 4% will live at the approximate level of the average current American mall clerk, 0.9% will live at the approximate level of the current American convenience store manager, 0.09% will live at the approximate level of the average current American lawyer or doctor, and 0.01% -- well, they'll be enjoying themselves. A LOT.

    This is inescapable. To believe otherwise is to engage in a cognitive denial indistinguishable from that which characterizes climate change denial. The inexorable spiral of geometric growth dictates that it must be so. Remember that factor of 340%? Consider it in these terms:

    American total household income is about 8 trillion dollars per year. 2 trillion of that goes to the top 1%. Assuming they only manage to consume half of their bloated aggregate income, their financial wealth will increase by trillion dollars this year. If that's the case, then based on 6% annual real return, in 100 years, they're going to want 340 trillion 2014 dollars every year. That's about 3.5 times the current Gross World Product.

    And that's just to service America's wealthiest families. The bottom line: Even if we could sustain a world economic growth rate of 2%, every year for the next 100 years, the GWP would increase by a factor of about 7 -- which wouldn't be enough to match the demands of the world's top 1%.

    And of course, 12 years after that ... just America's barons would want 680 trillion 2014 dollars per year. 'Cuz that's how exponential growth works. The idea that the planet's resources could possibly sustain the kind of economic growth
    necessary to feed that vigorish is preposterous.

    To put the torture behind us is, inevitably, to put it in front of us.

    by UntimelyRippd on Tue Jun 03, 2014 at 09:02:04 PM PDT

    •  oops: not "factor of 340%", just "factor of 340". (0+ / 0-)

      To put the torture behind us is, inevitably, to put it in front of us.

      by UntimelyRippd on Tue Jun 03, 2014 at 09:15:34 PM PDT

      [ Parent ]

    •  Just to fully reinforce this: (0+ / 0-)

      200 years from now, assuming no fundamental revolution in our economic system, in order to service a 6% real return rate on financial wealth, the financial wealth of the top 1% will need to increase by a factor of 115,000.

      Currently the aggregate financial wealth of the top 1% appears to be somewhere around 20 trillion dollars. In 200 years, that wealth is going to need to increase to 3 quintillion dollars -- that's 3,000,000,000,000,000,000 -- with an annual return at 6% of 180,000,000,000,000,000. 180 quadrillion dollars -- about 2000 times the current GWP.

      Do you begin to comprehend the difficulty?

      To put the torture behind us is, inevitably, to put it in front of us.

      by UntimelyRippd on Tue Jun 03, 2014 at 09:32:49 PM PDT

      [ Parent ]

  •  All that the WFP endorsement (0+ / 0-)

    of Cuomo did was weaken or maybe even render the WFP insignificant.
    When a so-called progressive party has to barter with a so-called Democrat to get that so-called Democrat to do Democratic things,
    well... what's the point?  And what's the upside?

    Follow Connect! Unite! Act! MeetUp events! For live podcasting of your Event contact winkk to schedule.

    by winkk on Tue Jun 03, 2014 at 10:15:31 PM PDT

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site