Sunday, April 24, 2011

The Answer: How to create jobs

Yes, we have an answer to long term structural unemployment. In the academic world, We are finally starting to see what looks like the broad outline of of a job creation policy. The centerpieces are strong anti-monopolization regulation, support for small businesses, and education and training for the workforce. Conservatives would also all support for wage and geographic labor market flexibility.

Below is an important piece on corporate consolidation.


But then, as a rational thinking economist want-a-be, you then say what institution, private or public, if any could handle the task. During the 70's and 80's we trusted government regulator's to operate in the countries best interest. But conservatives has discredited any good government could do, so there is no one left fill the void. and encourage competition.


Saturday, April 16, 2011

Food Nationalism: Develop a local food and gourmet industry

Developmental ideas that work local and globally

A key development idea is import substitution: Replacing imports with locally made products. This is true for 2700 Atlantic ave., Fort Greene, Brooklyn, Atlanta or Barbados. You always want to consumer products made within you local confines while being a net exporter outside your boundary.

The local food sector is a great target for import substitution. Food production provides lot of jobs, especially in the developing world. They may not pay very much but the large number of jobs helps.

One way to do this is to exploit local taste or create them. Almost every country and region has some sort of food nationalism. All countries have there own specifc recipies that they take pride in cooking. Some countries like Japan and France, have specific laws limiting the number and quality of imports. And almost all countries practice discrimination against some foreign foods. France is well-known example of food bigotry but almost every country has examples.

Conversely, many poor countries have very weak food nationalism cultures. They like imported goods and their status. I have been in two countries where gleaming supermarkets competed with local fresh fruit vendors. The street vendor sold mostly locally produced products. The stores sold the similar products for twice the price. Don't you know people nearly kill themselves getting into the supermarket. They were buying way more than just fruit.

Multinational companies work against such food nationalism for economic reasons. They try to sell the "American" or "European" lifestyle to developing countries. The promotion has have disastrous effects for local farmers and food producers.

Developing communities must promote their own products to keep more money in the local economy. Promotion through word of mouth and cell phone chatter would break though the usual market hype. It turns that "Local" is almost always best when it comes to food.


Friday, April 15, 2011

National rate drops to 8.8%; Black Unemployment Rate rises in March

The national rate dropped 0.1% to 8.8% of the counted workforce. There was a 216,000 increase in private sector jobs. Jobs increased in the following sectors: professional and business services, healthcare and leisure.

The Black Unemployment rate rose to 15.5% from 15.3%. The increase was small but the direction was worrisome. We also have concerns over the source of the increase: Black Male and Teen unemployment increases. The white unemployment rate is 8.0%.

The unemployment rate for Black men over 20 years old stood at 16.8% and the rate for women, 20-years and old was 12.5%. The Black teenage unemployment figure was 42% nearly double the white teenage rate of 22%.

The long term unemployed, 27-weeks or longer, increased from 43.9 to 45.5. The labor force participation rate stayed at 64.2. Part-time workers who want full-time work was fixed at 8.4 million.

Budget battle represents a discussion of core american values

The heat and smoke from the "Budget Battle" has crowded out any discussion of unemployment or Black Economics. So we have to talk the issue. First, is there even a budget issue. Short-term: No. Inflation is in check. Interest rates are zero. There is excess capacity in the manufacturing and labor markets. The real short term problem remains which is unemployment: long-term, structural, and class based.

In the medium and long-term there is a real problem but of a smaller magnitude than is covered in the news. Yes, we spend more than we collect but it is easily corrected by reducing our spending on the military, health care and tax relief.

The real issues is the conservatives using the debt as an excuse to limit the size and especially the role of government in programs they don't like. They are willing to cut education, health and retirement account but not the military, fire & police or business tax incentives. It is really just a battle over fore beliefs disguised as a "Debt / Budget" battle.

At last the American public is starting to understand the issues. I hope we can have a deeper understanding of the issues.

Thursday, April 7, 2011

Pay your fair shre

Well, it looks like the tax issue is finally getting a fair discussion. For too long, large corporations and super-rich individuals have paid little or no taxes. They do it quietly and legally by following the letter of the law and not the spirit of the law. They use lobbyist to bend the rules to fit their own circumstance. Now many of the tactics are coming to light.

The New York Times reported that GE paid no taxes. Here. An Joseph Stigliz reported that the top 400 richest people in the US have an effective tax rate of 17%. Here.

These abuses have a common theme of doing whatever they can get away with. Of the rugged individual beating the "system" against the odds. Of David beating Goliath. Nothing could be further from the truth.

The little guy is actually the IRS, who collects money for the government to pay for teachers, pensions, healthcare and military spending. And Goliath is the 975 person tax department of GE. Or the slew of tax lawyers and tax accounants available to the rich.

Luckily, news websites are running stories about tax abuse by the wealthy.

There are also people fighting for tax justice such as the "Tax Justice Network". Here.

Monday, April 4, 2011

Why aren't the rich feeling the heat ?

I am having trouble understanding why here in the US there is not more pressure on the rich to share some of their wealth. Either though taxes or compensation limits. The top 1% of the countries wealth has grown by 30% over the past 30 years while the median income has barely moved.

My theory is that the large middle class majority is happy with the status quo because:

1) they personally have not felt the pinch. The great masses of people have not really felt the sting. Materialistically, they live a very good life compared to the rest of the world and they know it. They can see others on TV. They are not starving. They can buy any basic necessity they require. They still eat out on fridays and buy new pick-up trucks.

2) Materially, they have just about everything they need. In the US, even the poorest among us has some material luxuries. We all have cellphones, cable tv, and decent clothes. No one is starving. Many receive unemployment benefits.

3) Long-term problems like health-care, education, retirement and college tuition are far into the future.

4) They believe they are rich or might some day be rich.

5) They don't understand how much money the rich actually have and receive from the economy.

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