Author Archives: Frederick Guy

The richer get richest

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Margaret Jacobson and Filippo Occhino of the Federal Reserve Bank of Cleveland provide a nice charting of changes in

* the shares of income going to labor (wages, salaries) and to capital (profits, interest) from 1947 to present, and
* the concentration (i.e., inequality) of income within each share, from 1979 to present.

The data are for the USA. The share of income going to labor has been declining for some time – since 1970 or 1980, depending on which data series you use.

Since capital income is more highly concentrated (most working age adults have labor income, but little or no capital income), an increased capital share produces increased inequality even if nothing else changes. But, also, there’s been increased concentration (inequality) within both the labor and capital shares.

Increased inequality within the labor share is well known. It is also well known that, in the distribution of overall (labor+capital) income, the top 0.1% have seen a much larger growth of their income than the top 1%, who have in turn seen a larger growth than the top 10%; and since those top slices of total income all get large shares of capital income, increased inequality within the capital share is no surprise. It’s nice, though, to see it plotted and explained so clearly.

Going to London for news of the US

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For parts of my childhood on a sunny wooded hillside in California, we got our international news from this damp country where I now live, in the overseas weekly edition of what was then called the Manchester Guardian. We got that paper not because my parents had any connection to England – neither of them had even been there, or done any foreign travel at all other than my father’s time in the Pacific during the war. But it was still the depth of the Cold War and the escalation of the Vietnam war and the perspectives on international affairs published in US daily newspapers were, shall we say, limited. Hence the subscription.

So my breast wells warm with nostalgia to see in today’s Guardian that the US Army is blocking access to the Guardian on large parts of its network: the paper is still playing the same role of bringing in news that’s a bit hard to find at home.

Copying trade secrets and catching up

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From Ed Crooks in The Financial Times (register to get past paywall)

US charges Sinovel with trade secret theft

The US government has charged Sinovel, one of the largest Chinese wind turbine manufacturers, with stealing trade secrets from one of its US suppliers, alleging the offence amounted to “attempted corporate homicide”.

If we skip over the fact that this brings the personification of the corporation to a new and, well, corporeal level (I’ll leave that matter to Yves Smith), here’s your Rorschach: is Sinovel the hero and AMSC the villain, or vice versa? Continue reading →

Such a linear, ordered, minimalist …. purposeful graffito

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Book him, Danno.

Anthony Cardenas was arrested by Vallejo police for felony vandalism. … Cardenas is in [jail] for painting one crosswalk and adding cross-hatching to the three official ones…. [jail] time, …. $15,000 bail …

Read from the whole story from David Edmondson at Vibrant Bay Area.

DeLong’s endearing false modesty

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In this post, fiscal expansionist Brad DeLong says kind and admiring about austerian Ken Rogoff, concluding on a note that if taken literally is strikingly humble – not a characteristic we associate with DeLong. All the while, he is gently taking Rogoff’s argument to pieces: the humility smacks of false modesty, going almost too far to be good manners, but it’s clearly meant as good manners. Is he making up for joining in the schadenfreude over the Reinhart-Rogoff spreadsheet debacle? Is he just happy to be able to engage with a prominent austerian who, unlike many of the Chicago school (Fama, Cochrane, Lucas, Stephen Williamson …) understands Keynesian reasoning and has not erased from memory two hundred years of monetary theory? Maybe he just figures you can’t do nuance on the Web, so he slathers the flattery thick. It’s a little disconcerting to see somebody whose reflexive reaction to error is such that he used to run a “stupidist person alive” contest on his blog, to frame a fundamental disagreement about a matter of great import in such an elaborately respectful tone. Still, civil discourse is nice.

p.s. Read De Long’s post down to the comments – Robert Waldmann’s is spot on.

Riots, growing inequality, in …. Sweden?

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The Guardian reports that

Despite Sweden’s reputation for equality, the rioting has exposed a faultline between a well-off majority and a minority, often young people with immigrant backgrounds, who cannot find work, lack education and feel marginalised.
…. The gap between rich and poor in Sweden is growing faster than in any other major nation, according to the OECD, although absolute poverty remains uncommon.

A possibly connected fact: Sweden has become one of the world’s few net exporters of intellectual property – one of the big ones along with the US, UK, and France. Thesis: an economy based on intellectual monopoly is one of the major drivers of inequality of income, and reduced social mobility. Continue reading →

Good luck, Jim

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From today’s Guardian – NASA’s James Hansen talks to the UK government:

Tar sands exploitation would mean game over for climate, warns leading scientist
[…] Hansen met ministers in the UK government, which the Guardian previously revealed has secretly supported Canada’s position at the highest level.

From last Friday’s Guardian – the UK government couldn’t care less:

UK’s climate change adaptation team cut from 38 officials to just six
Former senior official John Ashton attacks government for ‘spooking potential investors’ in energy infrastructure