There’s a summary of how employment in the United States has changed over the last ten years in one big infographic at Fiscal Times. Here it is in words.
Anything that’s been subsidized has grown. So have sectors that depend on large numbers of very low wage workers, e.g. hospitality, food service. Manufacturing employment has collapsed. Everything else is nearly stagnant or growing very slowly.
When I read the article on how the military would kill Godzilla at War Is Boring my first thoughts were that they would bore him to death with PowerPoint presentations or put him on a waiting list for a procedure at a VA hospital.
Actually, they’d blind him with white phosphorus and then hit him with a bunker-buster. The article correctly takes note of the hazmat problem afterwards, a topic neglected in most movies (Pacific Rim is an exception to that).
When I read Richard Ravitch’s Wall Street Journal op-ed entitled “More Detroits Are on the Way”, I felt a little like someone who reads the obituaries to see if he’s listed among them. I wondered if he included Chicago. I wasn’t disappointed:
The largest single expenditure in most state budgets is for Medicaid. Unfortunately, health-care costs have been rising faster than either inflation or state and local tax revenues, and most economists believe they will rise even faster in the next few years.
But the most critical piece of the states’ fiscal dilemma is that they are borrowing to cover their operating deficits. They do this directly—by issuing debt securities—but also indirectly. Some states, like New York, make contributions to their pension systems in promissory notes rather than cash. States and cities also sell assets and treat the proceeds as operating revenues, in effect selling off the family silver to stay afloat.
In 2009 Arizona sold its capitol buildings for more than $700 million. In 2008 Chicago leased its parking meters for 75 years for nearly $1.2 billion. In 1991 New York sold Attica Prison for $200 million to itself through a bond issuance, providing a temporary revenue boost but costing taxpayers far more in the long run in interest. While state constitutions contain various balanced-budget clauses, they generally don’t define revenues or prevent such creative accounting.
If you haven’t devised a method of living within your means going forward, selling assets or borrowing to pay operating expenses isn’t a success-oriented strategy. It’s just trying to manage your own decline.
Michael Gerson’s column today serves as a reminder:
Much about the future health of the republic depends on Harvard sociologist Robert Putnam being wrong. Given the track record of Harvard social scientists, this might appear a reasonable bet. But, in this case, Putnam’s diligence and thoughtfulness make for very bad news.
Putnam has spent much of his academic life as America’s chief chronicler of declining social institutions — a dour task, cheerfully performed. In the 1990s, he began drawing together the disparate evidence of declining attendance at bowling leagues, church services and Moose lodges. His data points included the falloff in yearly picnic attendance and a rise in the incidence of drivers giving each other the finger.
of the power of social institutions. The decline in social institutions is one of the things contributing to a wide variety of social ills from rising income inequality to the violence committed by gangs. The one thing that those calling for radical individualism and those urging the professionalization and centralization of benevolence have in common is that both of their preferred solutions weaken social institutions. Entire books have been written on this subject.
We used to be a country notable for the breadth and depth of our social institutions. I don’t know that there’s any way to return home.
When the Soviet Union collapsed the only institutions left standing in the ruins were the military/KGB, the Orthodox church, and organized crime. The Soviet government had fostered the first and however hard it tried it couldn’t stamp out the other two. We should hardly be surprised when the society that emerged in today’s Russia is founded on those institutions.
Catherine Rampell criticizes the debasement of the notion of sharing:
At its most benign, calling things “sharing†that are actually no different from traditional commerce is just empty marketing. It might also crowd out other activities that used to be done for altruistic purposes (like donating your old clothes to Goodwill rather than selling them on the Internet, or offering a friend a ride to the airport instead of charging for the service).
But more perniciously, this semantic sleight of hand has been used to justify tax evasion and other kinds of law-skirting. Of course you shouldn’t have to pay hotel taxes if you’re just “sharing†your home! And of course you shouldn’t have to submit to health-department restaurant inspections if you’re just “sharing†your kitchen with paying customers every night! Or get a taxi medallion or commercial insurance if you’re just “sharing†your car!
There’s nothing inherently unethical about monetizing skills or capital that are otherwise lying fallow, and no doubt many of these new “sharing economy†platforms are helping some 99-percenters make money in flexible, rewarding, creative ways. But to call these activities “sharing†is an insult to the intelligence of existing businesses, regulators and 5-year-olds everywhere.
Sharing your wealth is virtuous. Urging those with the means to share their wealth is virtuous, too. Compelling those with wealth to share it with the needy is expedient.
In the old commercial linked to above the brilliant Jack Gilford (in award-winning fashion) exemplifies the power of shame.
The Watcher’s Council has announced its winners for last week.
For those who’ve been following my ongoing soap opera, I’ve entered a new chapter. I’ve been engaged for a project that in some ways is a dream project and in others a blamed inconvenience.
The dream part of it is that I’ll be a worker bee/project manager for a substantial project over a six month time frame. Basically, I’ll be doing some design work, some project planning, some project management. Maybe a little grunt labor, too, since it’s my nature to get my hands dirty a little. I’m not unfamiliar with the subject matter of the project but it’s not a complete re-run of anything I’ve been doing over and over.
The best part of all is that the client I’ll be working for is a new client who has substantial potential for future projects of this sort.
The inconvenience part of it is that I’ll need to put substantial time in on it on a regular M-F 9-5 basis—the first time I’ve done that in almost twenty years. Welcome back to the old grind.
Oh, well. The pay is decent—I’ll make more doing this project than I’ve earned in aggregate in the last two years.
I don’t plan to stop blogging but it may cut down on my output a bit. Expect more early morning and evening posts.
More love for Thomas Piketty from Martin Feldstein at the Wall Street Journal:
Thomas Piketty has recently attracted widespread attention for his claim that capitalism will now lead inexorably to an increasing inequality of income and wealth unless there are radical changes in taxation. Although his book, “Capital in the Twenty-First Century,” has been praised by those who advocate income redistribution, his thesis rests on a false theory of how wealth evolves in a market economy, a flawed interpretation of U.S. income-tax data, and a misunderstanding of the current nature of household wealth.
I think that Dr. Piketty’s assumptions hold better in Europe than elsewhere. I suspect this debate will continue, possibly for many years to come.
In the meantime I wonder how quickly American economists and politicians will figure out that Dr. Piketty’s global wealth tax which already has no traction will involve taxing poor people in the United States and other rich countries to the benefit of rich people in poor countries?
Speaking of slim hopes, as I predicted a Circuit Court judge has put a stay on Gov. Quinn’s and the state legislature’s clearly unconstitutional plan to reform Illinois’s public pension system:
SPRINGFIELD — A Sangamon County judge stopped Illinois’ state pension overhaul law from taking effect Wednesday, issuing a stay on the law until the court can rule on its constitutionality.
Two lawyers representing plaintiffs in the case said that Circuit Judge Jon Belz issued the order to stop the pension law that reduces retirees’ benefits and increases their contributions from taking effect this summer.
Parts of the law were to take effect June 1.
The overhaul was designed to close a $100 billion deficit in five state pension systems. It was signed into law last fall.
The House author of the changes, Rep. Elaine Nekritz, noted that none of the savings officials expect to reap from the changes are factored into the state budget for this year.
“I would have been shocked had there not been a stay,†the Northbrook Democrat said. “It should have been stayed and we should wait to see frankly what the Supreme Court tells us.â€
As I’ve said before the plan is unconstitutional on its face and its being declared constitutional will depend on just how much water the courts are willing to carry for the governor and state legislature. Almost no one likes the plan other than the governor and the legislators who voted for it. The state’s public employees don’t like it, their unions don’t like it, ordinary Illinois citizens don’t like it, and anyone who can add doesn’t like it because it doesn’t solve the problem it claims to.
I do not as a rule approve of non-Illinoisans sticking their noses into Illinois politics. My general view is that the voters of any state are welcome to govern themselves in any damn fool way they care to. I’ll complain about Illinois but my complaints about state and local government outside Illinois are rare. I may point out problems but I don’t generally prescribe solutions.
That having been said you might want to take a look at George Will’s take on the contest for governor in Illinois:
A new Gallup poll shows that Illinois has the highest percentage — 50 percent — of residents who want to leave their state. If Illinois voters reelect Gov. Pat Quinn, they will reject Bruce Rauner, who vows to change the state’s fundamental affliction — its political culture.
The state’s strongest civic tradition is of governors going to jail. Four of the last nine have done so. Lt. Gov. Quinn ascended to the governorship in 2009 because Gov. Rod Blagojevich, of fragrant memory, tried to sell the Senate seat Barack Obama vacated. In 2010, Quinn defeated a downstate social conservative by 32,000 votes out of 3.7 million cast. Quinn’s job approval today is about 35 percent.
Rauner, born a few blocks from Wrigley Field, grew up in a Chicago suburb — his father was an electrical engineer at Motorola; his mother was a nurse. He attended Dartmouth, earned a Harvard MBA and joined the private-equity firm GTCR, where he made enough money to buy his nine homes. When a reporter asked him if he is among the 1 percent, he cheerfully replied, “Oh, I’m probably .01 percent,” an answer that was better arithmetic than politics.
All other things being equal, I’ll vote for Rauner in November. I think that Pat Quinn is a decent bloke but he hasn’t earned my vote for re-election. I don’t think there are any prospects whatever for the same team as holds office now solving Illinois’s manifest problems. Barring some cataclysm Mike Madigan will remain speaker of the Illinois House so there’s only the slimmest hope for change but a slim hope is better than no hope at all. Gov. Quinn’s proposals, rather than solving Illinois’s problems, are likely to drive the state farther into distress.
