Read the keystone essay: What Is Market Capitalism and Why Do We Need to Understand It?
The US Economy
The US economy is still the largest in he world and it makes us one of the richest nations on earth. We think of it as the most dynamic, innovative, technologically advanced in the world. However, the trends of the recent decades show that there is much to be concerned about.
The results are extremely tilted in the favor of the top 10% and even then to the top 1% really. Everyone else has not had a pay raise in forty years. We are well beyond the transition from an economy that was dominated by manufacturing, making things, to a services economy with an outsized chunk of that concentrated in the super profits of the financial sector. Throughout the economy the educational requirements have changed from a simple high school diploma to a college degree and higher. Automation and process improvements have driven enormous increase in labor productivity but very little to none of the benefits have remained available to the bottom 905 of the population.
The focus of this delusion, the US economy, is on understanding the trends and seeking suggestions for policies that could make the results more equitably distributed and the externalized social and environmental costs more agreeable.
Posts about the US Economy
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The Monopolization of America
November 26, 2018 Adam Smith discussed the harms caused by monopolies1 in the frequently, ritualistically cited book, The Wealth of Nations2. The progressive politics of the end of the 19th century and into… Read more → |
 February 20, 2018 The new digital economy is displaying the same drive to concentration, monopolies and oligopolies, that capitalism has always displayed. Facebook, Google, Amazon, Apple, and Microsoft are just a new face… Read more → |
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Structure of Jobs Is Changing Rapidly – Political System Failing to Address Issue
January 23, 2018 Shifts to contract work, losses in jobs due to automation and robots, growth in poorly paid occupations, low participation rates, healthcare and retirement tied to full-time jobs, and extremely unequal… Read more → |
 January 17, 2018 UPDATE: IBM does blockchain….Cryptocurrencies and blockchain technologies are subject to the same control by the rich and corporations as our existing financial and business sectors. These technologies are embedded in… Read more → |
 December 31, 2017 A Note on Jobs & Unemployment Original publication date – 12/27/2016; Revised – 12/31/2017 As the presidential campaign of 2016 fades away and the Trump Era begins, we find a… Read more → |
 December 27, 2017 At a time when the Republicans are transferring income and wealth to the rich and corporations over 40 million Americans fall below the official poverty line. Read more → |
 December 20, 2017 Republicans Create Bigger Deficits Then Blame The Entitled Poor. Cuts to social programs coming to fix the Republican created deficit problem. Read more → |
Recently Noted: World Inequality Report 2018 – findings and policies
December 14, 2017 Inequality in wealth and income is a continuing global crisis. The World Inequality Report 2018 defines the problem based on wealth ownership and the transfer of public wealth into private… Read more → |
 November 6, 2017 Otto Budweiser beer delivery The shape of jobs in the US and around the world it’s changing rapidly. On 11/5/2017 NBC News reported: Self-driving trucks One year ago this week a… Read more → |
 November 5, 2017 We are hearing from Republicans that American corporate tax rates are the highest in the world. The tax rate on the books is in fact higher than most. But, the… Read more → |
 October 30, 2017 Trump and Republicans (and some Democrats) puff up the return of well-paid manufacturing jobs and toss about ideas that thirty years of globalization can be reversed by renegotiating NAFTA and… Read more → |
 October 12, 2017 Report from Economic Innovation Group shows that US economy is becoming less dynamic and more focused around a few geographic regions. Recovery from Great 2008-09 Recession accelerated this process. Read more → |
 October 1, 2017 The impact of globalization on the US economy has been mostly cast by the media and politicians in light of the disappearance of many manufacturing jobs and the swarms of… Read more → |
 September 29, 2017 It is widely known that the bottom 80% of the US population has been stuck in neutral or gone backwards in terms of income and wealth over the last 45… Read more → |
 September 28, 2017 Trickle-down economics has never worked, yet once again it is being used to justify tax cuts for the rich and corporations. Trump and Republicans are once again using this thoroughly… Read more → |
 September 26, 2017 Capitalism, Monopoly, Oligopoly and John Oliver Capitalism does a number of things very well. Concentrating power, wealth and income is one of them. Though we naturally focus our attention on… Read more → |
 April 17, 2017 In the US four airlines control over 80% of the seats and in many regional markets the competition veers towards a state of monopoly. There is simply no effective competitive… Read more → |
Building the New American Economy – Not
April 5, 2017 The title of this short book, only 130 pages, Building the New American Economy: smart, fair, & sustainable by Jeffrey D. Sachs with a foreword by Bernie Sanders (Columbia University… Read more → |
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Job (Business) Killing Regulations
March 2, 2017 Ever since Ronald Reagan told us in his 1981 Inaugural Address, “Government is not the solution to our problem; government is the problem.” government bashing by right-wingers, Republicans and many… Read more → |
The Internet and Demand Management (Advertising)
March 1, 2017 My friend Joe Keenan recently sent me an article by Vicki Boykis, “Fix the internet by writing good stuff and being nice to people” from her blog Woman.Legend.Blog. Today’s internet… Read more → |
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How Much Money Would It Take To Eliminate Poverty in the US?
February 26, 2017 This 2013 article “How Much Money Would It Take to Eliminate Poverty” (http://prospect.org/article/how-much-money-would-it-take-eliminate-poverty-america) addresses this question. The answer then was $175 billion. This is a ridiculously small number in the context… Read more → |
Talk Back: Correcting the Anti-Government Bias of Our Politics
January 29, 2017 President Reagan was not the originator of this central trope of free-market (neo-liberal) politics, but he famously said in his first Inaugural Address in 1981, “Government is not the solution… Read more → |
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Park Avenue and How We Got There
January 22, 2017 Park Avenue puts faces to many of the wealthy and the corporations. Do not for a moment think that if we could just rid ourselves of these avaricious individuals that… Read more → |
The Gig Economy in the Academy – a note
December 29, 2016 The values of capitalism, especially as expressed through free market (neoliberal) ideology, have come to dominate how we organize our lives. Silicon Valley and the tech sector is busy celebrating… Read more → |
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Book Review – The Rise and Fall of American Growth
June 25, 2016 The Rise and Fall of American Growth: the US standard of living since the Civil War by Robert J. Gordon is a weighty book in every… Read more → |
 September 27, 2014 Since the beginning of the 2008 Great Recession we have hoped that the government would return to applying some real rational restraints on the financial system. To be honest, with… Read more → |
 April 7, 2014 We should demand that our financial markets serve their findamental purposes – connect investors with those who can deploy those resources to create new products and services and enable the… Read more → |
 July 9, 2013 photo courtesy of Chance Agrella, photographer An article in the NY TImes today reports that NY Attorney General Schneiderman is pursuing… Read more → |
 May 21, 2013 Reading this op ed leaves one with the notion that these changes have arisen through some immutable forces of nature. He fails to mention that in parallel with the individual… Read more → |
The Job Creators – Who Are They? The Rich, Really?
May 19, 2012 In recent years a standard bit of political rhetoric in the US has included references to “the job creators”. This most usually flows along the lines of higher taxes on… Read more → |
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High Frequency Trading and Deeper Questions about Capitalism
March 27, 2012 A recent PBS Newshour report by Paul Solman on Thursday 3/15/12 in his series “Making Sense of Financial News” gave pause concerning the role of high frequency traders (HFT) on… Read more → |
Charts from Mother Jones Illustrate That the Rich Have Won the Class War
November 19, 2011 I came on a set of graphics in Mother Jones, “It’s the Inequality, Stupid: Eleven charts that explain what’s wrong with America” that illustrate what you probably already know. But, a simple refresher course in some… Read more → |
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Economics Explained for 6th Graders
September 23, 2011 I ran across this somewhat longish article at NakedCapitalism.com. Even if you are not a 6th grader you will find this interesting. In part, Andrew Dittmer, who in fact has… Read more → |
Job Creation – A Pliable (Fraudulent) Rhetoric in the Current Debate over Debt and Debt Ceilings
July 12, 2011 When it comes to job creation both Democrats and Republicans reflexively trot out small business as the engine of growth. These flights of breathy admiration for plucky small business owners… Read more → |
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Where, Oh, Where Did Our National Debt Come From?
July 8, 2011 The political rhetoric of the current moment, chiefly flowing from Republicans, but barely challenged by the Democrats, describes tales of profligate over-spending by the Federal government matched with burdensome taxation. While… Read more → |
More Thinking about the Defence Budget and US “Security” – a letter to the editor
May 6, 2011 Submitted Today to Hudson’s Register Star Letter to the Editor May 6, 2011 As our politicians and the media continue the “debate” about our public budgets, Federal and state, we… Read more → |
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Let’s Talk About The Defense Budget – a letter to the editor
April 2, 2011 (This was submitted to the Letters to the Editor section of the Register Star here in Hudson. Not clear at the moment whether it will be published.) Discussions of the… Read more → |
Corporations as Persons – Freedom of Speech, now Right to Privacy – Bring on Three Strikes!
January 20, 2011 The case of the Federal Communications Commission v. AT&T now being heard… Read more → |
 November 12, 2010 There is more evidence that the current run of religious mania about “free markets” is finally giving way to a more fact-based approach to this important human invention, many countries… Read more → |
The Mortgage Debacle – Redux
October 10, 2010 The current tsunami of revelations of misbehavior, if not outright criminality, by the banking industry in their pursuit of mortgages gone bad, is further evidence of how fundamentally corrupt and cynical this… Read more → |
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Krugman Asleep at the Wheel of History ….. the elite has not been interested for forty years…
August 2, 2010 The August 1st New York Times carries the latest Paul Krugman opinion piece, “Defining Prosperity Down”. He is depressed because it is dawning on him that the elite is in… Read more → |
Do We Need Wall St. and all the other gamblers in the financial services world?
April 20, 2010 What Is the Function of Wall St.? The global financial meltdown of 2008 – 2009 with its ongoing sequelae seems not to have definitively demonstrated the dangers of our continuing… Read more → |
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The Two Faces of Mortgage Debt – “Return to Creditor”
January 25, 2010 Return to Creditor There is an interesting headline in today’s (1/25/10) New York Times, “Huge Housing Complex in N.Y. Returned to Creditors”. ((photo by Nicole Bengiveno/The New York Times -… Read more → |
How Did We Come To Consider Corporations to Be Natural Persons? – What To Do Next?
January 25, 2010 This week’s decision by the US Supreme Court to allow corporations, including unions, to hold full rights to free speech and political action under the First Amendment to the Constitution… Read more → |
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Controlling Gambling by Wall St. and the Big Banks – Bad for Business?
January 22, 2010 Anti-Wall St Does Not Mean Anti-Business President Obama’s proposals to break up the “too large to fail” mega banks and otherwise reapply the Glass Steagall Act to the financial sector… Read more → |
 November 13, 2009 Manias, Panics, and Crashes: a history of financial crises, fourth edition by Charles P. Kindleberger (New York: Wiley 6th edition 2011) A recent Wall St Journal article described this book… Read more → |
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Enron, Trust and Malfeasance
January 29, 2002 January 23, 2002 (revised 1/29/02) The collapse of energy giant Enron over the last six months has produced a surprising level of outrage especially for a cynic like me. As… Read more → |
Enron, Trust and Malfeasance
January 29, 2002 January 23, 2002 (revised 1/29/02) The collapse of energy giant Enron over the last six months has produced a surprising level of outrage especially for a cynic like me. As… Read more → |
Footnotes
- A note about the term “monopoly”: Economists have long acknowledged that the literal meaning of monopoly, a company having exclusive control over a commodity or service, is not a useful representation of how capitalist economies actually work. In practice when a small number of firms, say 3 or 4, control roughly 50% or more of a market, they can and do act to control prices, restrain trade, and force weaker competitors out of the market. As John Oliver notes we can experience this by simply booking an airline flight. Southwest, Delta, United, and American control 69% of the domestic market. This concentration is amplified by the hub and spoke system that assures that in many localities there is no choice but a single provider of air services. This is precisely why we need to reinvigorate the existing anti-trust laws and protect consumers from the gouging and abuse we now experience every time we fly.
- Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations.
- chart borrowed from: Leonhardt, David. “Opinion | The Monopolization of America.” The New York Times, November 26, 2018, sec. Opinion. https://www.nytimes.com/2018/11/25/opinion/monopolies-in-the-us.html.
- To be sure the US rank amongst steel producers has declined significantly with most of the world's steel now being produced in Asia
- Allan Collard-Wexler and Jan De Loecker, “Reallocation and Technology: Evidence from the U.S. Steel Industry,” Working Paper National Bureau of Economic Research, January 2013, http://www.nber.org/papers/w18739.
- Jane Wakefield, “Foxconn Replaces ‘60,000 Factory Workers with Robots,’ BBC News, May 25, 2016, sec. Technology, http://www.bbc.com/news/technology-36376966
- Angel Gonzalez, “Amazon Unveils Smart Convenience Store sans Checkouts, Cashiers,” The Seattle Times, December 5, 2016, http://www.seattletimes.com/business/amazon/amazoncom-unveils-self-driving-brick-and-mortar-convenience-store/
- Brick and mortar retail stores have sales per employee between a 1/4 and a 1/3 of Amazon's performance.
- Thanks to Elizabeth Kolbert, “Our Automated Future,” The New Yorker, http://www.newyorker.com/magazine/2016/12/19/our-automated-future and Daron Acemoglu and David Autor, “Skills, Tasks and Technologies: Implications for Employment and Earnings,” Working Paper (National Bureau of Economic Research, June 2010), http://www.nber.org/papers/w16082.
- Neiswanger, Robbie. “PHOTOS/VIDEO: Robots to Work in 50 Wal-Marts, Including Several in Arkansas.” Arkansas Online. Accessed October 30, 2017. http://www.arkansasonline.com/news/2017/oct/26/robots-to-work-in-50-wal-marts-20171026/.
- Santens, Scott. “The Real Story of Automation Beginning with One Simple Chart.” Medium (blog), October 24, 2017. https://medium.com/basic-income/the-real-story-of-automation-beginning-with-one-simple-chart-8b95f9bad71b.
- https://americandelusions.com/2016/12/27/a-note-on-jobs-unemployment/
- ”IBM Now Has More Employees in India Than in the U.S.” by Vinod Goel 9/28/2017 NYTimes. https://www.nytimes.com/2017/09/28/technology/ibm-india.html
- “2017 Distressed Communities Index.” Economic Innovation Group. Accessed September 29, 2017. http://eig.org/dci.
- The report actually groups communities as follows: Prosperous, comfortable, mid-tier, at risk, and distressed.
- all data and graphs from the DCI report
- https://www.nytimes.com/2016/02/13/health/disparity-in-life-spans-of-the-rich-and-the-poor-is-growing.html?_r=0 By SABRINA TAVERNISE FEB. 12, 2016
Footnotes
| 1. | ↥ | Princeton U. Press. 2016 |
| 2. | ↥ | Regulators Examining Early Sales of Financial Data http://nyti.ms/12hDF3t |
| 3. | ↥ | See the NYTimes, “Court Weighs Whether Corporations Have Personal Privacy Rights” By ADAM LIPTAK Published: January 19, 201 |