Category Archives: Leadership

The Wealth of Humans: Work, Power, And Status In The Twenty-first Century

BOOK REVIEW

The Wealth of Humans: Work, Power, and Status in the Twenty-first Century, Author: Ryan Avent.

By Ryan Avent – The digital revolution actually is probably going to be as transformative as the industrial revolution and the big technologies like electricity and steam that we saw then were. I think this transformation has already begun, and ironically, the evidence of that is in the struggles that we’re seeing across lots of countries that workers are facing in terms of limited growth in wages, in terms of rising inequality.

What my book tries to point out though is that in fact the biggest effect is not going to be mass unemployment. The biggest effect of the digital revolution is not going to be massive numbers of workers who just can’t find any work; it’ll be that the work they find ends up being very low-paying, because the displacement effect of these new technologies is so great, and the economy is asked to absorb so many new workers, that that’s just going to put an incredible amount of downward pressure on wages. That’s the real short-run challenge, I think.

.. The difficulty I think, again, comes in deciding who is entitled to a share of that ownership. If you’re socialising the gains, is that limited to citizens of the country, and then are any immigrant workers second-class citizens? If you don’t limit it, then suddenly you probably have social pressure to shut out immigrants, and then that leaves people on the outside of the country all the poorer. more> https://goo.gl/1iz2EU

Why a Consumption Tax May not Make any Sense at All

By Steve Roth – You often hear calls out there — mostly from Right economists but also from some on the Left — for a consumption tax in the U.S. As presented, it’s a super-simple idea: tally your income, subtract your saving, and what’s left is your consumption. You pay taxes on that.

We want to encourage thrifty saving and discourage profligate consumption, so what’s not to like?

Start with a simple pared-down household. The only accounting complication is that they own a house.

How much did this household “save”? Should the interest payments count as consumption? The principal payments almost certainly should not. But what about home maintenance? A new paint job increases your home’s asset value. Should you depreciate that asset value over some years? Or say you buy new appliances for your kitchen: You’re cash out of pocket, but your home is worth more. Are those purchases “consumption”?

This notion of some simple tally of your “saving” starts to look more complicated.

The tuition line raises a particularly vexing question, and brings us back to the second question: what economic effects would we see from a consumption tax, under various accounting and taxation rules? Clearly, if you tax tuition, you discourage education.

And consider more-prosperous families paying for private school. Are those families “consuming” more education than public-school families? Those households would be especially hard hit if tuition counts as taxable consumption — as would those private schools. Is that A Good Thing? more> https://goo.gl/LZSRZd

Why Is Donald Trump Still So Horribly Witless About the World?

By Robin Wright – “The President has little understanding of the context”—of what’s happening in the world—“and even less interest in hearing the people who want to deliver it,” Michael Hayden, a retired four-star general and former director of both the C.I.A. and the National Security Agency, told me.

“He’s impatient, decision-oriented, and prone to action. It’s all about the present tense. When he asks, ‘What the hell’s going on in Iraq?’ people around him have learned not to say, ‘Well, in 632 . . . ’ ” (That was the year when the Prophet Muhammad died, prompting the beginning of the Sunni-Shiite split.)

Trump’s policy mistakes, large and small, are taking a toll. “American leadership in the world—how do I phrase this, it’s so obvious, but apparently not to him—is critical to our success, and it depends eighty per cent on the credibility of the President’s word,” John McLaughlin, who worked at the C.I.A. under seven Presidents, from Richard Nixon to George W. Bush, and ended up as the intelligence agency’s acting director, told me.

“Trump thinks having a piece of chocolate cake at Mar-a-Lago bought him a relationship with Xi Jinping. He came in as the least prepared President we’ve had on foreign policy,” McLaughlin added. “Our leadership in the world is slipping away. It’s slipping through our hands.” more> https://goo.gl/Nza7eC

Away from Oil: A New Approach

By Basil Oberholzer – Two main problems arise from the connections between monetary policy, financial markets and the oil market: the first is financial and economic instability caused by oil price volatility. The second is an environmental problem: a lower oil price inevitably means more oil consumption. This is a threat to the world climate.

Is there a joint answer to these problems? There is. While hitherto existing policy propositions like futures market regulation or a tax on fossil energy face some advantages and disadvantages, they are not able to deal with both the economic instability and the environmental problem at the same time. What is proposed here is a combination of monetary and fiscal policy. Let’s call it the oil price targeting system.

First, to achieve economic stability in the oil market, a stable oil price is needed. Second, to reduce oil consumption, the oil price should be increasing. So, let us imagine that the oil price moves on a stable and continuously rising path in order to fulfill both conditions. To implement this, the oil price has to be determined exogenously. Due to price exogeneity, speculative attacks cannot have any influence on the price and bubbles cannot emerge anymore. The oil price target can be realized by monetary policy by means of purchases and sales of oil futures. Since the central bank has unlimited power to exert demand in the market, it can basically move the oil price wherever it wants. more> https://goo.gl/eUh85j

Venezuela’s Unprecedented Collapse

By Ricardo Hausmann – Media worldwide have been reporting on Venezuela, documenting truly horrible situations, with images of starvation, hopelessness, and rage.

The cover of The Economist’s July 29 issue summed it up: “Venezuela in chaos.”

The most frequently used indicator to compare recessions is GDP. According to the International Monetary Fund, Venezuela’s GDP in 2017 is 35% below 2013 levels, or 40% in per capita terms. That is a significantly sharper contraction than during the 1929-1933 Great Depression in the United States, when US GDP is estimated to have fallen 28%. It is slightly bigger than the decline in Russia (1990-1994), Cuba (1989-1993), and Albania (1989-1993), but smaller than that experienced by other former Soviet States at the time of transition, such as Georgia, Tajikistan, Azerbaijan, Armenia, and Ukraine, or war-torn countries such as Liberia (1993), Libya (2011), Rwanda (1994), Iran (1981), and, most recently, South Sudan.<

Put another way, Venezuela’s economic catastrophe dwarfs any in the history of the US, Western Europe, or the rest of Latin America. more> https://goo.gl/xXWCgg

Recovery is Not Resolution

By Carmen Reinhart – A few days ago, Greece, the most battered of Europe’s crisis countries, was able to tap global financial markets for the first time in years. With a yield of more than 4.6%, Greece’s bonds were enthusiastically snapped up by institutional investors.

Do recent positive developments in the advanced countries, which were at the epicenter of the global financial crisis of 2008, mean that the brutal aftermath of that crisis is finally over?

Good news notwithstanding, declaring victory at this stage (even a decade later) appears premature. Recovery is not the same as resolution.

It may be instructive to recall that in other protracted post-crisis episodes, including the Great Depression of the 1930s, economic recovery without resolution of the fundamental problems of excessive leverage and weak banks usually proved shallow and difficult to sustain.

During the “lost decade” of the Latin American debt crisis in the 1980s, Brazil and Mexico had a significant and promising growth pickup in 1984-1985 – before serious problems in the banking sector, an unresolved external debt overhang, and several ill-advised domestic policy initiatives cut those recoveries short. more> https://goo.gl/oQBpm1

The limits of tolerance

BOOK REVIEW

The Limits of Free Will, Author: Paul Russell.

By Paul Russell – Race, gender and, more recently, sexual orientation are forms of identity that have been especially prominent in politics during the past century. What is striking about these forms of identity is not only that they are generally unchosen, but that they are not based on any ideological or value-laden set of commitments of a political or ethical nature.

Of course, the significance and interpretation of non-ideological identities, the ways in which they can be viewed as threatened or disrespected, is itself an ideological matter; but the identities themselves are not constituted by any ideological content (systems of belief, value, practices, etc), and the groups concerned could vary greatly in the particular ideologies that they endorse or reject.

It would, for example, be absurd to praise or blame Martin Luther King Jr for being black, or Margaret Thatcher for being a woman. There is no ideological content to their identity to assess or debate – the relevant identity is an inappropriate target for praise or blame, since there are no relevant assessable beliefs, values, practices or institutions to serve as the grounds of such responses. The identity of the group turns on natural qualities and features that cannot be discarded in light of critical scrutiny or reflection of any kind.

With ideological or value-laden identities the situation is different. The most obvious of these identities are political, constituted by doctrines, beliefs and values that have implications for our social and ethical practices and institutions.

The crucial question for tolerance, is: where does religion stand in relation to this divide? more> https://goo.gl/H6df7Z

Updates from GE

Three Reasons Why You Should Invest In Smart Cities Now
By Gary Shapiro – Smart cities are the urban landscapes of the future. Powered by the ubiquitous connectivity of the Internet of Things (IoT), smart cities collect data on a variety of factors – from pollution to traffic – and employ that data to make cities safer and more sustainable.

By 2050, the majority of the world will be living in cities – now is the time to lay the groundwork for smart building and infrastructure.

City rules shape how energy is used and how buildings are designed. As digital infrastructure evolves, the rules that govern it will become only more complex.

It’s no secret that drawing the best and brightest to a company isn’t just a matter of compensation. The workers who will add the most value over the longer term want to live and work in places that offer them affordable, sustainable housing, timely and safe transportation and a clean and pleasant atmosphere. more> https://goo.gl/AkbCZE

The Battle for the Judiciary

By Joseph P. Williams – Besides depriving the president Obama of an opportunity to shape the lower courts, Senate Majority Leader Mitch McConnell‘s gambit denied Obama his right to create, among other things, a left-leaning feeder system for future Supreme Court nominees. The blockade seemed to pay big dividends: When President Donald Trump won the White House, he inherited more than 100 judicial vacancies McConnell forced Obama to leave behind.

The GOP’s well-laid plans to move the federal courts to the right, however, has been ambushed by the Democrats’ counterattack.

Using the political equivalent of guerrilla warfare – insisting on following arcane legislative rules, withholding approval of home-state nominees and generally throwing sand in the Senate machinery – the minority party has ground Republicans’ judicial agenda to a halt.

Those tactics have kept Trump and his Senate allies from addressing a judicial system with so many vacancies that legal experts on both sides have called it a crisis.

Nan Aron says she believes the debate over healthcare – and the fact that some Republican senators allied with Democrats to fight off the GOP’s attempts to repeal a popular government program – could become a watershed moment in the fight over Trump’s nominees.

“It’s important to note that the political winds are shifting,” Caroline Fredrickson says. “That, with Trump’s poll numbers continuing to decline, greater numbers of individuals will want the courts to stand as a check on his excesses. The more people come to understand what courts and judges do, we believe, the more they will begin to weigh in on judgeships” and pressure Republicans. more> https://goo.gl/JTRoqY

Related>

The Scaramucci effect: what White House havoc means for the world

The Trump administration is now a beacon of dysfunction. Allies, and enemies, are taking note.
By Leslie Vinjamuri – What does this mean for US leadership?

For some, Trump’s heavy-handed, even aggressive unilateralism is a symptom, not a cause, of the country’s relative decline.

According to this view, the country’s investment in liberal internationalism is an outdated strategy predicated on the historical need to counter the Soviet threat. It was designed for a different time, when the US’s military and economic power far surpassed that of any of its European counterparts, even when combined. The country’s retreat from the global stage is long overdue, so the argument goes.

In the absence of a clear national security imperative, foreign interventionism is both bad strategy and bad for the US. Trump’s style may be repugnant – but his America First instincts are not wrong.

But this is shortsighted.

Soft power is crucial to US leadership, more so now than ever before. In an era in which power is diffuse, and problems do not respect national borders, the capacity of any nation to influence others depends on the goodwill of a large number of state and non-state interests. more> https://goo.gl/qhPfM8