prole Posted April 19, 2011 Posted April 19, 2011 Typically, the mainstream's owl of Minerva flies a decade or two behind schedule (and is riddled with inconsistencies), but hey... Capitalism is failing the middle class Reuters Apr 15, 2011 Global capitalism isn’t working for the American middle class. That isn’t a headline from the left-leaning Huffington Post, or a comment on Glenn Beck’s right-wing populist blackboard. It is, instead, the conclusion of a rigorous analysis bearing the imprimatur of the U.S. establishment: the paper’s lead author is Michael Spence, recipient of the Nobel Prize in economic sciences, and it was published by the Council on Foreign Relations. Spence and his co-author, Sandile Hlatshwayo, examined the changes in the structure of the U.S. economy, particularly employment trends, over the past 20 years. They found that value added per U.S. worker increased sharply during that period – 21 per cent for the economy as a whole, and 44 per cent in the “tradable” sector, which is geek-speak for those businesses integrated into the global economy. But even as productivity soared, wages and job opportunities stagnated. The take-away is this: Globalization is making U.S. companies more productive, but the benefits are mostly being enjoyed by the C-suite. The middle class, meanwhile, is struggling to find work, and many of the jobs available are poorly paid. Here’s how Spence and Hlatshwayo put it: “The most educated, who work in the highly compensated jobs of the tradable and non-tradable sectors, have high and rising incomes and interesting and challenging employment opportunities, domestically and abroad. Many of the middle-income group, however, are seeing employment options narrow and incomes stagnate.” Spence is neither a protectionist nor a Luddite. He prominently notes the benefit to consumers of globalization: “Many goods and services are less expensive than they would be if the economy were walled off from the global economy, and the benefits of lower prices are widespread.” He also points to the positive impact of globalization on much of what we used to call the Third World, particularly in China and India: “Poverty reduction has been tremendous, and more is yet to come.” Spence’s paper should be read alongside the work that David Autor, an economist at the Massachusetts Institute of Technology, has been doing on the impact of the technology revolution on U.S. jobs. In an echo of Spence, Autor finds that technology has had a “polarizing” impact on the U.S. work force – it has made people at the top more productive and better paid and hasn’t had much effect on the “hands-on” jobs at the bottom of the labor force. But opportunities and salaries in the middle have been hollowed out. Taken together, here’s the big story Spence and Autor tell about the U.S. and world economies: Globalization and the technology revolution are increasing productivity and prosperity. But those rewards are unevenly shared – they are going to the people at the top in the United States, and enriching emerging economies over all. But the American middle class is losing out. To Americans in the middle, it may seem surprising that it takes a Nobel laureate and sheaves of economic data to reach this unremarkable conclusion. But the analysis and its impeccable provenance matter, because this basic truth about how the world economy is working today is being ignored by most of the politicians in the United States and denied by many of its leading business people. Consider a recent breakfast at the Council on Foreign Relations that I moderated. The speaker was Randall Stephenson, chief executive officer of AT&T. Mr. Stephenson enthused that the technology revolution was the most transformative shift in the world economy since the invention of the combustion engine and electrification, leading to a huge increase in “the velocity of commerce” and therefore in productivity. One of the Council of Foreign Relations members in the audience that morning was Farooq Kathwari, CEO of Ethan Allen, the furniture manufacturer and retailer. Kathwari is a storybook American entrepreneur. He arrived in New York from Kashmir with $37 in his pocket and got his start in the retail trade selling goods sent to him from home by his grandfather. Here’s the question he asked Stephenson: “Over the last 10 years, with the help of technology and other things, we today are doing about the same business with 50 per cent less people. We’re talking of jobs. I would just like to get your perspectives on this great technology. How is it going to over all affect the job markets in the next five years?” Mr. Stephenson said not to worry. “While technology allows companies like yours to do more with less, I don’t think that necessarily means that there is less employment opportunities available. It’s just a redeployment of those employment opportunities. And those employees you have, my expectation was, with your productivity, their standard of living has actually gotten better.” Spence’s work tells us that simply isn’t happening. “One possible response to these trends would be to assert that market outcomes, especially efficient ones, always make everyone better off in the long run,” he wrote. “That seems clearly incorrect and is supported by neither theory nor experience.” Spence says that as he was doing his research, he was often asked what “market failure” was responsible for these outcomes: Where were the skewed incentives, flawed regulations or missing information that led to this poor result? That question, Spence says, misses the point. “Multinational companies,” he said, “are doing exactly what one would expect them to do. The resulting efficiency of the global system is high and rising. So there is no market failure.” This conclusion is a very big deal – Spence is telling us that global capitalism is working the way it should, but that the American middle class is losing out anyway. Since global capitalism is the best way we’ve come up with so far to run our economy, that creates quite a dilemma. Spence is honest enough to admit that he has no easy answers. But he has posed the right question. American politicians in both parties are focused on a budget debate that is superficial, premature and ultimately about something pretty easy to figure out. Instead, we should all be working on the much bigger problem of how to make capitalism work for the American middle class. --from here. Quote
ivan Posted April 19, 2011 Posted April 19, 2011 the middle class has been thoroughly unnecessary since the robotic uprising on the mid 1990s [video:youtube] Quote
tvashtarkatena Posted April 19, 2011 Posted April 19, 2011 (edited) Whatever happened to just posting a link? Try it sometime, folks. I don't know about anyone else, but posting the entire article in an attempt to 'force' people to read your pet tome may cause a lot of rapid scrolling. Reading? Not so much. Edited April 19, 2011 by tvashtarkatena Quote
KaskadskyjKozak Posted April 19, 2011 Posted April 19, 2011 Whatever happened to just posting a link? Try it sometime, folks. I don't know about anyone else, but posting the entire article in an attempt to 'force' people to read your pet tome may cause a lot of rapid scrolling. Reading? Not so much. +1 Quote
tvashtarkatena Posted April 19, 2011 Posted April 19, 2011 It's called consideration, although a realize that a fully actualized progressive is above all that...because WHAT YOU HAVE TO SAY IS TOO IMPORTANT! Quote
prole Posted April 19, 2011 Author Posted April 19, 2011 It's called consideration, although a realize that a fully actualized progressive is above all that...because WHAT YOU HAVE TO SAY IS TOO IMPORTANT! What the fuck are you talking about? Nevermind, I don't care. Quote
ivan Posted April 19, 2011 Posted April 19, 2011 Whatever happened to just posting a link? Try it sometime, folks. I don't know about anyone else, but posting the entire article in an attempt to 'force' people to read your pet tome may cause a lot of rapid scrolling. Reading? Not so much. i'm too lazy to follow links, so if you want me to read a bit of anything, might as well post it here Quote
tvashtarkatena Posted April 19, 2011 Posted April 19, 2011 It's called consideration, although a realize that a fully actualized progressive is above all that...because WHAT YOU HAVE TO SAY IS TOO IMPORTANT! What the fuck are you talking about? Nevermind, I don't care. The font matches his combover.... Quote
tvashtarkatena Posted April 19, 2011 Posted April 19, 2011 Trump, Palin, Bachmann, Mitt OMFG. This is gonna be a turkey shoot. Where's that lyin' New Jersey phat phuck? Quote
prole Posted April 19, 2011 Author Posted April 19, 2011 Don't count Christie out, he's got crossover appeal for the "Fiscal Reality"-Flavored Kool Aid drinkers! Quote
ivan Posted April 19, 2011 Posted April 19, 2011 Trump, Palin, Bachmann, Mitt OMFG. This is gonna be a turkey shoot. i'd be more excited if the likely winner was likely to do a fucking thing w/ his rousing mandate anyone notice who he took on as his new chief of staff a few weeks back? i'm not real sure how the obama-llama is head and shoulders beyond dubya Quote
j_b Posted April 19, 2011 Posted April 19, 2011 Are the vultures manipulating credit markets to enforce austerity? [video:youtube]_5CRuSXGF_o Quote
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