Later On

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Why Should We Support the Idea of an Unconditional Basic Income?

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Fascinating article by Scott Santens, an expansion at Medium of what was originally a Reddit post:

So what exactly would you do, if you were guaranteed $1,000 per month for the rest of your life? And yes, that’s around what the amount would most likely be here in the United States, at least at first. So think about that amount for a moment, and don’t think about what others might do with it, think about what you would do with it. Perhaps you would do more of what you enjoy. So what is that?

Didn’t they try this in Russia?

You’ve compared this idea to communism, so let’s focus on that first. In doing so, let’s also talk about what was actually done in the former Soviet Union and not what was intended. What they actually did there, simply put, was transfer the means of production from those who ran the businesses based on market forces, into the hands of a bureaucracy who made decisions based not on market forces but on politics and cronyism. This is a terrible idea. But why is this a terrible idea?

The market works because it is a means of figuring out what people want, the degree to which they want it, and the means of getting it to them. Let’s take bread as an example. In Russia, they thought everyone should have bread. That was a decision made by those in power, and they then tried to make that happen, whether everyone wanted bread or not. This did not work so well, and there were shortages. Plus, those with the connections got more than enough while others got none. Trying to give bread to everyone, although noble in gesture, was a failure.

The magic of markets

So how do we do it here in America right now? The makers of bread make bread, and sell it to stores, so that people with the money to buy bread, can buy bread. If bread isn’t getting bought, less bread is made. If all the bread is getting bought, more bread is made. Those who make the bread aren’t making a top-down decision on how much bread to make. They are listening to market forces, and the decision is bottom-up. This is perfect, right? Just the right amount of bread is getting made and at just the right price. No, it’s not. Why? And how can this be improved?

Right now only those with the means to pay for bread have a voice for bread. We love to use the term, “voting with our dollars”. So is the outcome of that daily election accurate? Does everyone have a voice for bread? No, they don’t. There are people with no voice, because they have no dollars. The only way to make sure the market is working as efficiently and effectively as possible to determine what should be getting made, how much to make of it, and where to distribute it, is to make sure everyone has at the very minimum, the means to vote for bread. If they have that money and don’t buy bread, there’s no need to make and distribute that bread. If the bread is bought, that shows people actually want that bread. So how do we accomplish this improvement of capitalistic markets?

With unconditional basic income (UBI).

By guaranteeing everyone has at the very least, the minimum amount of voice with which to speak in the marketplace for basic goods and services, we can make sure that the basics needs of life — those specific and universally important to all goods and services like food and shelter — are being created and distributed more efficiently. It makes no sense to make sure 100% of the population gets exactly the same amount of bread. Some may want more than others, and some may want less. It also doesn’t make sense to only make bread for 70% of the population, thinking that is the true demand for bread, when actually 80% of the population wants it, but 10% have zero means to voice their demand in the market. Bread makers would happily sell more bread and bread eaters would happily buy more bread. It’s a win-win to more accurately determine just the right amount.

And that’s basic income. It’s a win-win for the market and those who comprise the market. It’s a way to improve on capitalism and even democracy, by making sure everyone has the minimum amount of voice.

Can we really improve capitalism or is this just theory?

If you want actual evidence of how much better capitalism would work with basic income, look at the pilot project in Namibia:

The village school reported higher attendance rates and that the children were better fed and more attentive. Police statistics showed a 36.5% drop in crime since the introduction of the grants. Poverty rates declined from 86% to 68% (97% to 43% when controlled for migration). Unemployment dropped as well, from 60% to 45%, and there was a 29% increase in average earned income, excluding the basic income grant. These results indicate that basic income grants can not only alleviate poverty in purely economic terms, but may also jolt the poor out of the poverty cycle, helping them find work, start their own businesses, and attend school.”

Think about that for a second. Crime plummeted and people given a basic income actually created their own jobs and actually ended up with even greater earnings as a result.

Or how about this psychology experiment as evidence for increased productivity? . . .

Continue reading.

The next few paragraphs of the article are strongly counter-intuitive (and also counter-current-practice), but have been repeatedly show to be true. Repeatedly.

Written by LeisureGuy

27 May 2015 at 1:31 pm

How federal dollars are financing the water crisis in the West

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Very bad news and very bad legislation, reported in ProPublica by Abrahm Lustgarten and Naveena Sadasivam:

STATE ROUTE 87, the thin band of pavement that approaches the mostly shuttered town of Coolidge, Ariz., cuts through some of the least hospitable land in the country. The valley of red and brown sand is interrupted occasionally by rock and saguaro cactus. It’s not unusual for summer temperatures to top 116 degrees. And there is almost no water; this part of Arizona receives less than nine inches of rainfall each year.

Then Route 87 tacks left and the dead landscape springs to life. Barren roadside is replaced by thousands of acres of cotton fields, their bright, leafy green stalks and white, puffy bolls in neat rows that unravel for miles. It’s a vision of bounty where it would be least expected. Step into the hip-high cotton shrubs, with the soft, water-soaked dirt giving way beneath your boot soles, the bees buzzing in your ears, the pungent odor of the plants in your nostrils, and you might as well be in Georgia.

Getting plants to grow in the Sonoran Desert is made possible by importing billions of gallons of water each year. Cotton is one of the thirstiest crops in existence, and each acre cultivated here demands six times as much water as lettuce, 60 percent more than wheat. That precious liquid is pulled from a nearby federal reservoir, siphoned from beleaguered underground aquifers and pumped in from the Colorado River hundreds of miles away. Greg Wuertz has been farming cotton on these fields since 1981, and before him, his father and grandfather did the same. His family is part of Arizona’s agricultural royalty. His father was a board member of the Central Arizona Water Conservation District for nearly two decades. Wuertz has served as president of several of the most important cotton organizations in the state.

But what was once a breathtaking accomplishment — raising cotton in a desert — has become something that Wuertz pursues with a twinge of doubt chipping at his conscience. Demand and prices for cotton have plummeted, and he knows no one really needs what he supplies. More importantly, he understands that cotton comes at enormous environmental expense, a price the American West may no longer be able to afford.

Wuertz could plant any number of crops that use far less water than cotton and fill grocery store shelves from Maine to Minnesota. But along with hundreds of farmers across Arizona, he has kept planting his fields with cotton instead. He says he has done it out of habit, pride, practicality, and even a self-deprecating sense that he wouldn’t be good at anything else. But in truth, one reason outweighs all the others: The federal government has long offered him so many financial incentives to do it that he can’t afford not to.

“Some years all of what you made came from the government,” Wuertz said. “Your bank would finance your farming operation … because they knew the support was guaranteed. They wouldn’t finance wheat, or alfalfa. Cotton was always dependable, it would always work.”

The water shortages that have brought California, Arizona and other Western states to the edge of an environmental cliff have been attributed to a historic climate event — a dry spell that experts worry could be the worst in 1,000 years. But an examination by ProPublica shows that the scarcity of water is as much a man-made crisis as a natural one, the result of decades of missteps and misapprehensions by governments and businesses as they have faced surging demand driven by a booming population.

The federal subsidies that prop up cotton farming in Arizona are just one of myriad ways that policymakers have refused, or been slow to reshape laws to reflect the West’s changing circumstances. . .

Continue reading.

Written by LeisureGuy

27 May 2015 at 12:40 pm

Trans-Pacific Partnership trade agreement: Why are the details kept secret? Why won’t Hillary Clinton state her position on TPP?

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The fact seems to be that the TPP details are kept secret because, if those details were known, the American people would strongly object. The modern US Federal government, including Congress, quite often ignores the will of the people and, even worse, knowingly and deliberately acts against the will of the people. This is possible due to the corruption of Federal politics by a tidal wave of money.

Sam Knight describes in The Intercept one aspect of the pushing through of the TPP:

While Democratic presidential candidate Hillary Clinton is refusing to reveal her position on the massive Trans-Pacific Partnership trade agreement, other former State Department officials are actively supporting the agreement. They’re just not bothering to reveal their conflicts of interest.

More than 30 former State Department officials, envoys, military officers and White House national security advisers who served under both Republican and Democratic presidents signed a letter last month calling the trade agreement “a defining test for American political and economic leadership in the Asia-Pacific region” and urging members of Congress to give President Obama “fast-track” authority to speed its passage.

Though the officials identified themselves in the letter using their prior government titles, many have since passed through the revolving door and now work at consulting firms focused on helping multinationals with interests in East Asia. Six of those with non-disclosed involvement in ventures that focus heavily on Pacific Rim trade served under Secretary Clinton.

The congressional letter was organized, in part, by Kurt Campbell, a former top aide to Clinton. Campbell served from 2009 until 2013 as assistant secretary of state for East Asian and Pacific Affairs. Metadata from the letter identifies the author of the document as Yong Kwon, an analyst with the Asia Group, a consulting firm founded by Campbell within days of leaving the State Department in February 2013.

Nirav Patel, the COO of the Asia Group and a former deputy assistant secretary of state in the Bureau of East Asian and Pacific Affairs under Clinton, also signed the letter.

Other signatories include: . . .

Continue reading.

The purpose of the TPP is, so far as I can tell from what I’ve read, is to increase corporate control of the government by defining areas in which the government cannot act. See, for example, this report from Democracy Now!

As negotiations continue, WikiLeaks has published leaked chapters of the secret Trans-Pacific Partnership — a global trade deal between the United States and 11 other countries. The TPP would cover 40 percent of the global economy, but details have been concealed from the public. A recently disclosed “Investment Chapter” highlights the intent of U.S.-led negotiators to create a tribunal where corporations can sue governments if their laws interfere with a company’s claimed future profits. WikiLeaks founder Julian Assange warns the plan could chill the adoption of health and environmental regulations.

Written by LeisureGuy

27 May 2015 at 11:37 am

Another quid pro quo: Former US Senator Mary Landrieu (D-LA) gets her big payoff in return for her corporate support in office

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Written by LeisureGuy

26 May 2015 at 3:43 pm

A look at why productivity languishes

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Paul Krugman has a very interesting column today. He looks at all the advances in technology and contrasts that with the lack of productivity in terms of the overall economy. For a while, the US made noticeable productivity gains from year to year (output per worker hour), but that has been stalled for quite a while despite all the technological advances. Worth reading. It begins:

Remember Douglas Adams’s 1979 novel “The Hitchhiker’s Guide to the Galaxy”? It began with some technology snark, dismissing Earth as a planet whose life-forms “are so amazingly primitive that they still think digital watches are a pretty neat idea.” But that was then, in the early stages of the information technology revolution.

Since then we’ve moved on to much more significant things, so much so that the big technology idea of 2015, so far, is a digital watch. But this one tells you to stand up if you’ve been sitting too long!

O.K., I’m snarking, too. But there is a real question here. Everyone knows that we live in an era of incredibly rapid technological change, which is changing everything. But what if what everyone knows is wrong? And I’m not being wildly contrarian here. A growing number of economists, looking at the data on productivity and incomes, are wondering if the technological revolution has been greatly overhyped — and some technologists share their concern.

We’ve been here before. “The Hitchhiker’s Guide” was published during the era of the “productivity paradox,” a two-decade-long period during which technology seemed to be advancing rapidly — personal computing, cellphones, local area networks and the early stages of the Internet — yet economic growth was sluggish and incomes stagnant. Many hypotheses were advanced to explain that paradox, with the most popular probably being that inventing a technology and learning to use it effectively aren’t the same thing. Give it time, said economic historians, and computers will eventually deliver the goods (and services).

This optimism seemed vindicated when productivity growth finally took off circa 1995. Progress was back — and so was America, which seemed to be at the cutting edge of the revolution.

But a funny thing happened on the way to the techno-revolution. We did not, it turned out, get a sustained return to rapid economic progress. Instead, it was more of a one-time spurt, which sputtered out around a decade ago. Since then, we’ve been living in an era of iPhones and iPads and iDontKnows, but even if you adjust for the effects of financial crisis, growth and trends in income have reverted to the sluggishness that characterized the 1970s and 1980s.

In other words, at this point, the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines, but modest economic results. Why?

One possibility is . . .

Continue reading.

Written by LeisureGuy

25 May 2015 at 8:58 am

Continuing fallout from the failure of the War on Drugs

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A bankrupt policy that costs $15 billion per year and results in increasing drug use. Jon Lee Anderson reports in the New Yorker:

1971, President Nixon announced the U.S. “war on drugs,” which every President since has carried forward as a battle standard. Until recently, most Latin American governments have coöperated, and in return have received intelligence, equipment, and, perhaps most importantly, financial assistance. The overall investment has been huge—the federal government now spends about fifteen billion dollars on it each year—with the net result that drug use has proliferated in the U.S. and worldwide. In the drug-producing countries, where drug consumption was negligible at the start of the American effort, the criminal narcoculture has attained ghoulishly surreal proportions.

Over the course of the past few years, a growing number of Latin American governments have begun to challenge U.S. policy and to call for a radical rethinking of the war on drugs, including widespread decriminalization. A handful of leftist governments, such as those of Venezuela, Ecuador, and Bolivia, have gone so far as to end their coöperation with the U.S. Drug Enforcement Administration, alleging that U.S. drug policy is a new form of Yankee imperialism. Uruguay, under the former President José Mujica, became the first country to legalize state-sponsored production, sale, and use of marijuana.

The latest opposition to the forty-five-year-old drug war came not from a government that is hostile to the U.S. but from its most steadfast ally in the Americas, Colombia. On May 14th, President Juan Manuel Santos announced that his government was halting its longstanding practice of spraying the country’s illicit coca crop with chemicals to kill the plants. The spraying began in the late nineties under the U.S.-sponsored Plan Colombia, which aimed to wipe out the country’s drug culture and its guerrillas, who largely depend onnarcotráfico for their survival. Santos made the announcement after U.N. scientists confirmed what critics of spraying had long alleged: that glyphosate, a key ingredient in the herbicide known as Roundup, is probably carcinogenic to humans.

Colombia was the last country in the world to use chemical spraying to combat illegal drug cultivation. Citing health hazards and damage to impoverished rural economies, both Bolivia and Peru, which also grow coca, have banned aerial spraying. Afghanistan, the world’s chief supplier of opium, overrode American protests to ban spraying in 2007. The Karzai government argued that the program drove poor Afghan farmers into the hands of the Taliban by destroying their livelihoods without offering realistic economic alternatives. Similar arguments have long been made in Colombia, where millions of farmers have been driven from their land to live in urban slums.

The U.S. State and Defense Departments, which jointly oversee Plan Colombia, have always lobbied heavily in favor of spraying, which is outsourced to the giant U.S. security contractor DynCorp. DynCorp has earned hundreds of millions from its Colombian contracts, just as it previously did in Afghanistan, where it also won the government contract to implement counter-narcotics strategy. Notably, after President Santos announced the halt to spraying, that U.S. Ambassador to Colombia, Kevin Whitaker, published an Op-Ed in the leading Colombian newspaper, El Tiempo, arguing in favor of continuing the spraying campaign while saying that the U.S would continue working closely with Colombia in spite of the recent decision. Whitaker ended his Op-Ed with the English phrase “We have your back.”

So who is to be believed about the war on drugs, and what is the right way forward? After almost twenty years, many deaths, and billions of dollars spent under Plan Colombia, has illicit coca production decreased in Colombia? Overall, yes, according to the plan’s proponents: in his piece, Whitaker asserted that the area under cultivation for illegal coca production was reduced by half between 2007 and 2013. But studies also show that that area increased by thirty-nine per cent last year—so the most recent trends aren’t good. And if one third of the initial cultivation area is still left, that means that a significant amount of cocaine is still coming out of Colombia, and will be for the foreseeable future. . .

Continue reading.

Maybe we’re going about drugs all wrong?

Written by LeisureGuy

23 May 2015 at 12:30 pm

Banks as Felons, or Criminality Lite

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The NY Times editorial board also notices that banks are never really punished for the crimes they commit:

As of this week, Citicorp, JPMorgan Chase, Barclays and Royal Bank of Scotland are felons, having pleaded guilty on Wednesday to criminal charges of conspiring to rig the value of the world’s currencies. According to the Justice Department, the lengthy and lucrative conspiracy enabled the banks to pad their profits without regard to fairness, the law or the public good.

Besides the criminal label, however, nothing much has changed for the banks. And that means nothing much has changed for the public. There is no meaningful accountability in the plea deals and, by extension, no meaningful deterrence from future wrongdoing. In a memo to employees this week, the chief executive of Citi, Michael Corbat, called the criminal behavior “an embarrassment” — not the word most people would use to describe a felony but an apt one in light of the fact that the plea deals are essentially a spanking, nothing more.

As a rule, a felony plea carries more painful consequences. For example, a publicly traded company that is guilty of a crime is supposed to lose privileges granted by the Securities and Exchange Commission to quickly raise and trade money in the capital markets. But in this instance, the plea deals were not completed until the S.E.C. gave official assurance that the banks could keep operating the same as always, despite their criminal misconduct. (One S.E.C. commissioner, Kara Stein, issued a scathingdissent from the agency’s decision to excuse the banks.)

Also, a guilty plea is usually a prelude to further action, not the “resolution” of a case, as the Justice Department has called the plea deals with the banks.

To properly determine accountability for criminal conspiracy in the currency cases, prosecutors should now investigate low-level employees in the crime — traders, say — and then use information gleaned from them to push the investigation up as far as the evidence leads. No one has thus far been named or charged. Nor has there been any explanation of how such lengthy and lucrative criminal conduct could have gone unsuspected and undetected by supervisors, managers and executives. The plea deals leave open the possibility of further investigation, but the prosecutors’ light touch with the banks makes it doubtful they will follow through.

An argument has been made that the S.E.C. was right not to revoke the banks’ capital-market privileges because doing so might disrupt the economy. That is debatable. What is not debatable is that bringing criminal charges against individuals and even sending some of them to jail would not disrupt the economy. To the contrary, holding individuals accountable is all the more important in instances of wrongdoing by banks that, for whatever reason, have been exempted from the full legal consequences of their criminal behavior. . .

Continue reading.

Written by LeisureGuy

22 May 2015 at 8:52 pm

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