Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Inequality’

‘Socialism for the rich’: the evils of bad economics

Posted by hkarner - 9. Juni 2019

Date: 08-06-2019
Source: The Guardian By Jonathan Aldred

The economic arguments adopted by Britain and the US in the 1980s led to vastly increased inequality – and gave the false impression that this outcome was not only inevitable, but good.

In most rich countries, inequality is rising, and has been rising for some time. Many people believe this is a problem, but, equally, many think there’s not much we can do about it. After all, the argument goes, globalisation and new technology have created an economy in which those with highly valued skills or talents can earn huge rewards. Inequality inevitably rises. Attempting to reduce inequality via redistributive taxation is likely to fail because the global elite can easily hide their money in tax havens. Insofar as increased taxation does hit the rich, it will deter wealth creation, so we all end up poorer.

One strange thing about these arguments, whatever their merits, is how they stand in stark contrast to the economic orthodoxy that existed from roughly 1945 until 1980, which held that rising inequality was not inevitable, and that various government policies could reduce it. What’s more, these policies appear to have been successful. Inequality fell in most countries from the 1940s to the 1970s. The inequality we see today is largely due to changes since 1980. Den Rest des Beitrags lesen »

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Mind the Productivity Gap to Reduce Inequality

Posted by hkarner - 8. Mai 2019

Date: 07-05-2019
Source: The Wall Street Journal By Edward P. Lazear

It isn’t only an American problem, but the U.S. has lessons to learn from other wealthy countries.

How are American workers doing? Neither the middle class nor the poor have fared well in recent decades—but don’t blame tax cuts, a too-low minimum wage or the greed of the 1%. In rich countries around the world, the top half of the income distribution has been pulling away from the bottom half. Productivity growth among high-wage workers, driven by technological change, is the reason.

When measuring wage dispersion, economists frequently look at the 90/50 ratio—the wage of the worker at the 90th percentile divided by the wage of the worker at the median. In 2017 the 90th-percentile worker earned around $108,000, while the median worker earned around $45,000 a year—a ratio of 2.4. That’s an increase from 2.2 since 1997. Over the same period, the 50/10 ratio—the median wage divided by the wage at the 10th percentile—stayed flat, at 2.1. Den Rest des Beitrags lesen »

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The Rich Can Fight Inequality, Too

Posted by hkarner - 24. März 2019

Kaushik Basu, former Chief Economist of the World Bank, is Professor of Economics at Cornell University and Nonresident Senior Fellow at the Brookings Institution.

Many wealthy people in the United States and elsewhere support the objective of curbing extreme economic inequality. They should not allow themselves to be silenced by right-wing accusations of hypocrisy.

NEW DELHI – When wealthy people espouse left-wing causes, such as redistribution of wealth, those on the right often label them hypocrites. “If you are so concerned about equality, why don’t you give up some of your own income first?” is the usual retort.

This response can have a powerful dampening effect. Most people do not like to think of themselves as hypocrites. So the wealthy are faced with a choice: either give away some of their assets and then campaign against inequality, or just keep quiet. Most prefer the second option.

This is unfortunate, because global inequality is reaching intolerable levels. What’s more, wealth tends to remain in families over time. Inequality is becoming dynastic, with some people born rich and vast numbers who are poor from the moment they appear on Earth. Den Rest des Beitrags lesen »

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How the internet led to greater wage inequality

Posted by hkarner - 18. März 2019

Date: 16-03-2019
Source: The Economist: Bartleby

Training can help solve the problem

The great detective has summoned everyone to the library. “I was asked to identify the culprit behind the growing wave of wage inequality” he says. “I can reveal that the offender is there.” And the assembled suspects gasp as he points, not at a human, but at the computer in the corner.

In real life, few would be too be surprised at that verdict. Economists have long pointed to “skill-biased technological change” as one of the driving forces behind inequality. But demonstrating the influence of technology is important in an era when politicians routinely blame immigration or cut-price competition from imports instead. And the evidence that technology is indeed the perpetrator is getting stronger as academics look at its impact on inequality within individual firms, as well as across the broader economy.

A new working paper* by Christopher Poliquin of the University of California, Los Angeles, examined the effect on wages at Brazilian firms that adopted broadband between 2000 and 2009. The average employee experienced a 2.3% cumulative gain in real wages, relative to workers at firms without broadband. But managers at the firm gained 8-9% while executive directors enjoyed an 18-19% boost. Mr Poliquin thinks that the internet allowed skilled workers to be much more productive than before. Den Rest des Beitrags lesen »

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Raghuram Rajan says capitalism is ‚under serious threat‘

Posted by hkarner - 13. März 2019

Date: 12-03-2019
Source: BBC

Former Indian central bank governor Raghuram Rajan has warned capitalism is „under serious threat“ as it has stopped providing for the masses.

Mr Rajan told BBC Radio 4’s Today Programme „when that happens, the many revolt against capitalism“.

He said governments cannot afford to ignore social inequality when considering the economy.

Mr Rajan led India’s central bank and was also a former chief economist at the International Monetary Fund (IMF).

He has been tipped by some as a possible successor to take over from Mark Carney as governor of the Bank of England.

„I think capitalism is under serious threat because it’s stopped providing for the many, and when that happens, the many revolt against capitalism,“ he told the BBC.

Mr Rajan said it was possible in the past to obtain a middle class job with „modest education“. Den Rest des Beitrags lesen »

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Market Concentration Is Threatening the US Economy

Posted by hkarner - 12. März 2019

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His latest book, People, Power, and Profits: Progressive Capitalism for an Age of Discontent, will be published in April.

Rising inequality and slow growth are widely recognized as key factors behind the spread of public discontent in advanced economies, particularly in the United States. But these problems are themselves symptoms of an underlying malady that the US political system may be unable to address.

NEW YORK – The world’s advanced economies are suffering from a number of deep-seated problems. In the United States, in particular, inequality is at its highest since 1928, and GDP growth remains woefully tepid compared to the decades after World War II.

After promising annual growth of “4, 5, and even 6%,” US President Donald Trump and his congressional Republican enablers have delivered only unprecedented deficits. According to the Congressional Budget Office’s latest projections, the federal budget deficit will reach $900 billion this year, and will surpass the $1 trillion mark every year after 2021. And yet, the sugar high induced by the latest deficit increase is already fading, with the International Monetary Fund forecasting US growth of 2.5% in 2019 and 1.8% in 2020, down from 2.9% in 2018. Den Rest des Beitrags lesen »

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The Trouble With Taxing Wealth

Posted by hkarner - 8. März 2019

Date: 07-03-2019
Source: The Wall Street Journal By Greg Ip

Elizabeth Warren’s proposed tax on net worth seems like a nearly surgical strike at inequality, but it may not be efficient

Massachusetts Sen. Elizabeth Warren has proposed a tax of 2% on net worth above $50 million and 3% above $1 billion.

Around the world, governments in recent decades have sought to lighten the burden on capital by reducing taxes on dividends, capital gains, corporate profits and wealth. The motivation is straightforward: more capital means more investment, higher productivity and faster growing wages. Capital is also highly mobile: Tax it too much, and it will go elsewhere, undermining growth.

Massachusetts senator and Democratic presidential contender Elizabeth Warren has broken with that consensus by proposing a tax of 2% on net worth above $50 million and 3% above $1 billion. It may never be enacted; yet in spirit it marks a historic pivot in the focus of capital taxation, from growth to inequality.

While there is no “right” level of inequality, it stands near historic highs and Democrats are unified in wanting to reduce it. Taxing wealth is an immensely appealing, nearly surgical strike at its most glaring manifestation. Yet it may not be an efficient response. Den Rest des Beitrags lesen »

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Millennial socialism

Posted by hkarner - 16. Februar 2019

Date: 14-02-2019
Source: The Economist

A new kind of left-wing doctrine is emerging. It is not the answer to capitalism’s problems

After the collapse of the Soviet Union in 1991, the 20th century’s ideological contest seemed over. Capitalism had won and socialism became a byword for economic failure and political oppression. It limped on in fringe meetings, failing states and the turgid liturgy of the Chinese Communist Party. Today, 30 years on, socialism is back in fashion. In America Alexandria Ocasio-Cortez, a newly elected congresswoman who calls herself a democratic socialist, has become a sensation even as the growing field of Democratic presidential candidates for 2020 veers left. In Britain Jeremy Corbyn, the hardline leader of the Labour Party, could yet win the keys to 10 Downing Street.

Socialism is storming back because it has formed an incisive critique of what has gone wrong in Western societies. Whereas politicians on the right have all too often given up the battle of ideas and retreated towards chauvinism and nostalgia, the left has focused on inequality, the environment, and how to vest power in citizens rather than elites. Yet, although the reborn left gets some things right, its pessimism about the modern world goes too far. Its policies suffer from naivety about budgets, bureaucracies and businesses. Den Rest des Beitrags lesen »

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The new elite’s phoney crusade to save the world – without changing anything

Posted by hkarner - 27. Januar 2019

Date: 26-01-2019
Source: The Guardian

Today’s titans of tech and finance want to solve the world’s problems, as long as the solutions never, ever threaten their own wealth and power. By Anand Giridharadas

A successful society is a progress machine. It takes in the raw material of innovations and produces broad human advancement. America’s machine is broken. The same could be said of others around the world. And now many of the people who broke the progress machine are trying to sell us their services as repairmen.

When the fruits of change have fallen on the US in recent decades, the very fortunate have basketed almost all of them. For instance, the average pretax income of the top 10th of Americans has doubled since 1980, that of the top 1% has more than tripled, and that of the top 0.001% has risen more than sevenfold – even as the average pretax income of the bottom half of Americans has stayed almost precisely the same. These familiar figures amount to three-and-a-half decades’ worth of wondrous, head-spinning change with zero impact on the average pay of 117 million Americans. Globally, over the same period, according to the World Inequality Report, the top 1% captured 27% of new income, while the bottom half of humanity – presently, more than 3 billion people – saw 12% of it. Den Rest des Beitrags lesen »

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Ökonom: „Trump verstärkt miese Seiten im Menschen“

Posted by hkarner - 20. Dezember 2018

Interview Alexander Hahn18. Dezember 2018, 12:37 derstandard.at

Wahlentscheidungen beruhen nicht nur auf Eigennutz, sagt Verhaltensökonom Ernst Fehr. Es seien auch Fairness-Gefühle, mit denen Populisten spielen

Unter der Präsidentschaft Donald Trumps zeigen sich die USA als tiefgespaltenes Land, in Italien ließ der Haushaltsstreit der Regierung aus Fünf-Sterne-Bewegung und Lega Nord mit der EU-Kommission neuerliche Sorgen um die Eurozone anschwellen. Bei einer Tasse Tee erläutert der Verhaltensökonom Ernst Fehr, heuer von deutschsprachigen Medien zum einflussreichsten Volkswirt der Region gewählt, im Gespräch mit dem STANDARD die Hintergründe des Zulaufs für populistische Politiker und Parteien.

STANDARD: Wie erklären Sie als Verhaltensökonom, dass immer mehr Menschen populistische Politiker wählen, obwohl diese oft Politik gegen ihre wirtschaftlichen Interessen machen?

Fehr: Weil sie ihren Versprechen geglaubt haben. Es ist auch nicht so, dass Menschen Wahlentscheidungen immer gemäß ihrem Eigennutz treffen. Auch das Empfinden von Fairness spielt eine große Rolle.

STANDARD: Also ist das Empfinden von Gerechtigkeit bzw. Ungerechtigkeit so stark, dass es die Leute den Populisten in die Arme treibt?

Fehr: Die Wahlentscheidung ist eine höchst komplexe Entscheidung, da spielen auch viele Dinge hinein, die nichtwirtschaftlicher Natur sind. In den USA haben Fremdenfeindlichkeit und Rassismus eine große Rolle gespielt. Offen gesagt: Wenn man so stark polarisiert wie manche populistische Politiker, dann bringt das das Schlechteste im Menschen zum Vorschein. Ich glaube, dass das bei Trump der Fall ist: Er verstärkt nicht die guten Seiten, sondern die miesen Seiten im Menschen. Das zeigt sich auch daran, dass es wieder salonfähig geworden ist, rassistische Äußerungen zu tätigen. Das hat auch eine Rolle gespielt, aber nicht nur das. Es ist ein Konglomerat an unterschiedlichen Motiven.  Mitglieder des Ku-Klux-Klans machten im Juli 2017 in Charlottesville, wo ein Rechtsextremer einen Monat später eine Gegendemonstrantin tötete, kein Hehl aus ihrer Gesinnung. Den Rest des Beitrags lesen »

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