Tag Archives: Government

The Case Against Free-Market Capitalism

By Ngaire Woods – Free-market capitalism is on trial.

Just a quarter-century ago, the debate about economic systems – state-managed socialism or liberal democracy and capitalism – seemed to have been settled. With the Soviet Union’s collapse, the case was closed – or so it seemed.

Since then, the rise of China has belied the view that a state-led strategy will always fail, and the global financial crisis exposed the perils of inadequately regulated markets. In 2017, few of the world’s fastest-growing economies (Ethiopia, Uzbekistan, Nepal, India, Tanzania, Djibouti, Laos, Cambodia, Myanmar, and the Philippines) have free markets. And many free-market economies are suffering from growth slowdowns and rapidly rising inequality.

The conservative case, eloquently articulated by Theresa May, is that a free-market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created. If that claim is true, the only logical conclusion is that we are doing it wrong.

So what measures are needed to get it right? more> https://goo.gl/ioQAAD

Rex Tillerson and the Unraveling of the State Department

With an isolated leader, a demoralized diplomatic corps and a president dismantling international relations one tweet at a time, American foreign policy is adrift in the world.
By Jason Zengerle – Tillerson was originally recommended to the Trump team by the former Defense Secretary Robert Gates and the former Secretary of State Condoleezza Rice, both mandarins of the Republican foreign-policy establishment who had consulted for Exxon Mobil, on the grounds that his vast knowledge of foreign governments and their leaders made him a perfect fit for the job. “The expectation was that Tillerson would be a grown-up and provide ballast,” says a 30-year veteran of the Foreign Service, “that he was someone who believed in America being the glue that created global stability and would be interested in upholding the world order as we have it.”

In a few short months, Tillerson had rid the State Department of much of its last several decades of diplomatic experience, though it was not really clear to what end.

The new secretary of state, it soon became evident, had an easier time firing people than hiring them — a consequence of the election that delivered him to Foggy Bottom.

In the past few months, the pace of nominations for the State Department has picked up. But even so, few of the nominees have qualifications that match those of their predecessors. more> https://goo.gl/qE5XZS

Updates from Chicago Booth

Should we stop the ‘revolving door’?
The movement of people between industry and government is a political talking point, but how big a deal is it? Research is starting to quantify the extent of the problem.
By Brian Wallheimer – When US President Donald Trump took office, addressing the “revolving door”—the movement of people between industry and government—ranked high on his agenda. In his second week, with members of his staff steps away, he signed new ethics rules while saying, “Most of the people standing behind me will not be able to go to work or do anything adverse to our wonderful country. Five-year ban. It’s a two-year ban now and it’s got full of loopholes.”

But the revolving door proved too irresistible not too push. The Trump administration hired former industry lobbyists for prominent jobs, and several cabinet positions came straight from corporate America. Even before Trump had a chance to sign the ethics order, which critics complained had its own loopholes, his former campaign managers had set up a lobbying shop.

Behind the revolving door is the idea of regulatory capture. Forty-six years ago, the late George Stigler described how a regulatory body tasked with protecting the public interest would ultimately be “captured” to serve the interests of the regulated industry.

Chicago Booth’s Sam Peltzman expanded on this theory, arguing that regulations come about through a balancing act involving politicians and interest groups, which can be companies or other affected parties. more> https://goo.gl/e2yyWn

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Why Cities Shouldn’t Bend Over Backwards for Corporations

By Rick Paulas – In early 2010, the city of Topeka, Kansas, was in trouble. The city’s unemployment rate had risen to unprecedented levels. Some in the mayor’s office thought that a lack of affordable broadband Internet access wasn’t helping. Mayor Bill Bunten tried to remedy the situation by changing the city’s name to Google.

“There was a feeding frenzy, so Google was in the position to say, ‘If we don’t get what we want, we’ll go elsewhere,'” says Tony Grubesic, a professor of policy analytics at Arizona State University who has studied Google Fiber’s effects on Kansas City. “Google was in the driver’s seat.”

Corporations pitting cities against one another to get the best deals won’t stop anytime soon. Cities are currently courting Amazon in hopes of becoming the site of the company’s second headquarters.

Tucson sent a 21-foot cactus to Amazon chief executive officer Jeff Bezos; Birmingham built huge Amazon boxes downtown; Stonecrest, Georgia, voted to give the corporation 345 acres that it’s dubbed “the city of Amazon“; and New Jersey is trying to push through a $5 billion tax break. more> https://goo.gl/Yxj2sA

The only job a robot couldn’t do

By Daniel Carter – The gig economy is growing rapidly, but it’s also changing how we think about what it means to work. Uber and other online platforms are making the case for a future in which work happens in little on-demand bursts — you need a ride, and someone appears to give you that ride. Instead of a salary and benefits like health insurance, the worker gets paid only for the time they’re actually driving you around.

I’m a researcher who studies how people work and I have a hard time endorsing this vision of the future. When I see Favor delivery drivers waiting to pick up a to-go order, I imagine a future in which half of us stand in line while the other half sit on couches. And then I imagine a future in which all these mundane tasks are automated: the cars drive themselves, the burritos fly in our windows on drones. And I wonder how companies are going to make money when there are no jobs and we can’t afford to buy a burrito or pay for a ride home from the bar. more> https://goo.gl/gXoUXd

Five reasons why “downtown universities” matter for economic growth

By Scott Andes – The value of the nation’s higher education system is usually expressed as just that—education. But while the educational mission of America’s colleges and universities is critical, often missed or neglected by local and national policymakers is the value of these institutions to economic growth. This is particularly true for those universities located near major employment neighborhoods of large cities.

Here are five reasons these universities matter for economic growth:

  1. Research universities are essential for innovation, and innovation is essential for economic growth.
  2. Universities located in urban areas produce more patents, corporate partnerships, and startups.
  3. Universities located within innovation districts build on existing urban assets.
  4. Downtown universities specialize in research.
  5. Downtown universities still have a lot of room to improve their outcomes.

As the country searches for new sources of innovation, jobs, and growth, policy makers should consider how some of its oldest institutions—research universities—are best positioned for the new economy. more> https://goo.gl/nXEPk4

Updates from GE

From Light To Bright: San Diego Is Building The World’s Largest Municipal Internet Of Things
By Bruce Watson -San Diego’s newest streetlights might not look all that special — and that’s exactly the point. Designed to blend in with the rest of the city’s outdoor lighting, they’re easy to overlook. Under the surface, though, the LED fixtures are actually data-gathering machines. They will allow San Diego to build the largest municipal internet-of-things network in the world.

San Diego’s digital lighting revolution started as a modest solution to a common problem. “We were broke,” David Graham, San Diego’s deputy chief operating officer, told GE Reports in February. “In the early 2000s, we went through about a decade of fiscal crisis, and we were trying to find ways to be more efficient, save money and reduce energy usage.”

One idea to save money was to replace the yellow glow of the city’s old sodium vapor streetlamps with efficient new LED lights. In addition to providing cleaner, broader-spectrum light, the new fixtures used 60 percent less energy and slashed maintenance needs because of their longer life spans. The city replaced more than 35,000 lights, yielding an estimated $2.2 million in savings per year.

But the new fixtures also brought to light new problems. “We know when a traditional light bulb isn’t working, because it burns out,” says Austin Ashe, general manager of Current, powered by GE’s Intelligent Cities program. “But an LED doesn’t burn out. It just degrades over time.” more> https://goo.gl/6fdyFY

Are Internet companies complicit in promoting hateful and harmful content?

By Hany Farid – In 2016, Facebook, Google, Microsoft, and Twitter announced that they would work together to develop new technology to quickly identify and remove extremism-related content from their platforms. Despite some progress, serious problems remain.

First, we need a fast and effective method to remove content. Once content has been identified, reported, and determined to be illegal or in violation of terms of service, it should be immediately removed (Prime Minister Theresa May is calling for a maximum of two hours from notification to take-down).

Fourth, we need to invest in human resources. While advances in machine learning hold promise, these technologies – as technology companies will admit – are not yet nearly accurate enough to operate across the breadth and depth of the internet. There are more than a billion uploads to Facebook each day and 300 hours of video uploaded to YouTube each minute of the day.

This means that any machine-learning based solution will have to be paired with a significant team of human analysts that can resolve complex and often subtle issues of intent and meaning that are still out of reach of even the most sophisticated machine learning solutions. more> https://goo.gl/X2ACdL

It’s Time to Rewrite the Rules of Our Economy

By Tim O’Reilly – Business leaders making decisions to outsource jobs to low-wage countries or to replace workers with machines, or politicians who insist that it is “the market” that makes them unable to require companies to pay a living wage, rely on the defense that they are only following the laws of economics. But the things economists study are not natural phenomena like the laws of motion uncovered by Kepler and Newton.

The political convulsions we’ve seen in the United Kingdom and in the United States are a testament to the difficulties we face. We are heading into a very risky time. Rising global inequality is triggering a political backlash that could lead to profound destabilization of both society and the economy. The problem is that in our free market economy, we found a way to make society as a whole far richer, but the benefits are unevenly distributed. Some people are far better off, while others are worse off.

Why do we have lower taxes on capital when it is so abundant that much of it is sitting on the sidelines rather than being put to work in our economy?

Why do we tax labor income more highly when one of the problems in our economy is lack of aggregate consumer demand because ordinary people don’t have money in their pockets? more> https://goo.gl/2DioyZ

The Coming Software Apocalypse

By James Somers – “When we had electromechanical systems, we used to be able to test them exhaustively,” says Nancy Leveson, a professor of aeronautics and astronautics at the Massachusetts Institute of Technology who has been studying software safety for 35 years. She became known for her report on the Therac-25, a radiation-therapy machine that killed six patients because of a software error. “We used to be able to think through all the things it could do, all the states it could get into.

Software is different. Just by editing the text in a file somewhere, the same hunk of silicon can become an autopilot or an inventory-control system. This flexibility is software’s miracle, and its curse. Because it can be changed cheaply, software is constantly changed; and because it’s unmoored from anything physical—a program that is a thousand times more complex than another takes up the same actual space—it tends to grow without bound. “The problem,” Leveson wrote in a book, “is that we are attempting to build systems that are beyond our ability to intellectually manage.” more> https://goo.gl/XSu4jU