I'm in Cambria this afternoon, a little coastal town that is not as famous as the big nearby tourist attraction, Hearst's Castle, about 8 miles up the road, but a delightful coastal community. This area in San Luis Obisbo County is one of the areas that is suffering from severe drought, so bad they have closed the bathrooms at Hearst Castle to save water and brought in port-a-potties. But Cambria is still a peaceful bucoloic place to spend some time. We saw Dolphins cavorting around the surfers when we went out to watch the Sunset last night. Actually the Dolphins had probably found a school of fish under the surfers so were mostly hunting but they look cavorting ish much to the delight of the tourists on shore watching the sun go down behind the clouds.
I'm neither a global warming fanatic, nor a global warming denier. I accept that the science suggests we are probably heating the world up with our industrial development and lifestyle. Sure we don't even know what we don't know, but you have to make decisions based on the evidence available, at least if you want to behave conservatively in the true sense. If you pick at the weaknesses in the evidence so you have an excuse to deny the most likely explanation for all the evidence, you are not practicing good decision making.
But for many years I wasn't really inclined to pay too much attention to global warning. It is pretty clear to me a political solution is not going to happen since trying to control global warming by cutting back emissions pits the haves with developed economy's against the have nots with billions of people who want to enjoy something like the standard of living the haves have. Even within the haves there is conflict between the people that take the long view and the people that don't want to upset their advantageous current economic situation. So a unified world response is not going to happen. The weather will change in some undetermined manner, rainfall patterns will change in some undetermined manner, and there will be winners and losers. But, I've thought, we here in California, blessed with so much diversity, will be able to adapt to the changes. So it was pretty low on my list of concerns.
Then I saw the National Geographic article a while ago about how much the sea level will rise if all the ice caps melt in Greenland and Antarctica. The science guys who study melting ice and such things said it would all melt in 100 years if melting continues at the rate it has been occurring, and that would bring the sea level up 216 feet.
Presumably it won't be the sea level jumping up 216 feet on January 1, 2114. It will be sort of like compound interest, rising little bits at first then accelerating over the years, but it still would be an astounding change to our physical environment.
In the article, and in other sources I have seen they talk about the disaster rising sea levels would cause in Bangladesh, but 216 feet, or even 26 feet would threaten coastal areas all over the world. When I was 20 years old 100 years seemed an unfathomably distant future. Now at 67 it seems much shorter. 100 years ago my grandparents were in their teens. Coupled with the fact the science is imprecise, it could happen sooner (or later) but what if, for example, it rose 25 feet in the next couple decades?
I live on the ridge that forms the eastern boundary of the City of Berkeley looking out at the San Franscisco Bay. So I pulled up a google map of the bay area and set it on the terrain setting to have access to the elevation markings. If the sea level rises 216 feet the economic engine that is the bay area today will no longer exist. The houses on the ridges that surround the bay will be looking at a much bigger bay that has swallowed up all the commercial areas. From the financial district in San Francisco, to Silicon Valley to the I-880 stretch of development in Oakland, it would all be under water. Even 26 feet would swamp all the Bay Area airports and much of the crucial economic infrastructure
When I expanded the map I saw that at 216 feet Sacramento, and Davis, the town I lived in for 30+ years will be under 150 or so of water. Stockton will be gone, Fresno will be the bay front property at the southern end of a second inland bay. Much of Napa and Sonoma County will be underwater, the northern end of the expanded bay will be about Geyserville and St. Helena.
Most of Los Angeles and much of San Diego will be seafloor. On the west coast Portland will be largely underwater, and much of Seattle. The whole eastern seaboard, including Boston, New York, Washington DC, Baltimore, Charleston, and most of the State of Florida will be underwater.
Rising sea levels would have a massive economic impact on the United States.
So now I go to some nice relaxing beach resort like Cambria and I find myself looking around imagining what is going to be underwater, both in the near future, and in the longer term. I pull up topographical maps to see how far up the canyon that brings Santa Rosa Creek down through town will the sea intrude. I imagine which houses up on the hill are going to have great view, which houses are going to be isolated on little islands surrounded by the intruding sea. I speculate on where the business district down along Santa Rosa Creek will go as the sea swallows up the current business district..
The California I've known all my life is going to be reshaped in ways that affect people I know and love today, and I want to know what it will look like.
Next: The politics of global warming - who wins and loses from rising sea levels.
Saturday, November 1, 2014
Monday, October 20, 2014
The Irony of Obamacare
As we approach the congressional mid-term election the media conversation is all about how the Republicans are well positioned to come out of the mid-terms with control of both houses of Congress for the first time since the period from 1996-2007.
The last time voters trusted Republicans with the keys to Congress they managed to set the table for the biggest economic catastrophe since the Great Depression, and for dessert they invaded Iraq, an action that has destabilized the entire middle east, creating a quagmire of violently competing interests from which it is beginning to appear we will never be able to extract ourselves, and which it is beyond question we are not going to resolve.
How have the Republicans managed to convince voters to turn back to their leadership? Most of the issues they flogged on the road to victory from 1995-2007, fear of the gay menace and immigrants, trust Wall Street but don't trust Government, have become losing issues with many voters. Although Obama walked in the door in 2008 with impossibly difficult problems on the economy and in the middle east, the Republicans have managed to convince many voters Obama is the reason those problem aren't solved. But Republicans can't make a lot of headway using those issues because too many voters remember that it was Republicans that made all the really bad decisions that blew up the economy and got us into Iraq. But, the Republican fingerprints on the first big thing Obama did, enact a law to set up a framework to provide health insurance to all, are not so obvious. So the biggest issue the Republicans have tied their hopes too the last couple years has been Obamacare.
Obamacare is a perceived as a bureaucratic mess (and this voter shares that perception to some extent). Ironically Obamacare is mess mostly because of the Republicans in Congress were so intransigent, so stubborn and uninterested in dealing with the fact our health care system was the most expensive and least efficient system in the world, that they refused to support any kind of health care reform unless every possible lobbying group with campaign dollars was appeased.
That universal medical coverage for all citizens is a good thing is a no-brainer (a fact currently highlighted by the Ebola fears). Even arch conservative Richard Nixon had recognized that it was necessary for a smoothly functioning modern state 45 years ago. Free market principles that work for efficient production of refrigerators or cars don't work for Medical care. But Republicans were so dead set against any plan of "socialized medicine" Obama perceived the only way he could get some sort of Universal Health coverage enacted was to use a "Republican" model (Mitt Romney's Massachusetts plan) and cut deals with lobbyist for people making piles of money off the old system at every turn to get enough votes to get the law passed.
Obamacare is successful in one huge respect. Voters now recognize the value of universal medical coverage. Most Republicans no longer dare talk about repealing Obamacare but Republicans have been pretty successful at spinning reality to convince voters the bureaucratic snafu's associated with Obamacare are all Obama's fault. That their strategy may put them back in control of both houses of Congress is historically nonsensical. It's like giving a kid an ice cream cone for blaming his brother trying to clean up a broken window, forgetting it was he that threw the rock that broke it.
But it does say something about who ultimately is responsible for stupid acts by Congress. If voters really want to know who's screwing up the government many will see the culprit in their bathroom mirror.
Postscript - One reader felt the last sentence did not connect with the rest of the article. The point I was trying to make (unsuccessfully perhaps) was that in the end if Government is screwing things up, the solution will usually only be found when enough voters examine their preconceived notions about issues, immunize themselves from emotional name calling and exaggeration, and figure out for themselves the nature of reality.
The last time voters trusted Republicans with the keys to Congress they managed to set the table for the biggest economic catastrophe since the Great Depression, and for dessert they invaded Iraq, an action that has destabilized the entire middle east, creating a quagmire of violently competing interests from which it is beginning to appear we will never be able to extract ourselves, and which it is beyond question we are not going to resolve.
How have the Republicans managed to convince voters to turn back to their leadership? Most of the issues they flogged on the road to victory from 1995-2007, fear of the gay menace and immigrants, trust Wall Street but don't trust Government, have become losing issues with many voters. Although Obama walked in the door in 2008 with impossibly difficult problems on the economy and in the middle east, the Republicans have managed to convince many voters Obama is the reason those problem aren't solved. But Republicans can't make a lot of headway using those issues because too many voters remember that it was Republicans that made all the really bad decisions that blew up the economy and got us into Iraq. But, the Republican fingerprints on the first big thing Obama did, enact a law to set up a framework to provide health insurance to all, are not so obvious. So the biggest issue the Republicans have tied their hopes too the last couple years has been Obamacare.
Obamacare is a perceived as a bureaucratic mess (and this voter shares that perception to some extent). Ironically Obamacare is mess mostly because of the Republicans in Congress were so intransigent, so stubborn and uninterested in dealing with the fact our health care system was the most expensive and least efficient system in the world, that they refused to support any kind of health care reform unless every possible lobbying group with campaign dollars was appeased.
That universal medical coverage for all citizens is a good thing is a no-brainer (a fact currently highlighted by the Ebola fears). Even arch conservative Richard Nixon had recognized that it was necessary for a smoothly functioning modern state 45 years ago. Free market principles that work for efficient production of refrigerators or cars don't work for Medical care. But Republicans were so dead set against any plan of "socialized medicine" Obama perceived the only way he could get some sort of Universal Health coverage enacted was to use a "Republican" model (Mitt Romney's Massachusetts plan) and cut deals with lobbyist for people making piles of money off the old system at every turn to get enough votes to get the law passed.
Obamacare is successful in one huge respect. Voters now recognize the value of universal medical coverage. Most Republicans no longer dare talk about repealing Obamacare but Republicans have been pretty successful at spinning reality to convince voters the bureaucratic snafu's associated with Obamacare are all Obama's fault. That their strategy may put them back in control of both houses of Congress is historically nonsensical. It's like giving a kid an ice cream cone for blaming his brother trying to clean up a broken window, forgetting it was he that threw the rock that broke it.
But it does say something about who ultimately is responsible for stupid acts by Congress. If voters really want to know who's screwing up the government many will see the culprit in their bathroom mirror.
Postscript - One reader felt the last sentence did not connect with the rest of the article. The point I was trying to make (unsuccessfully perhaps) was that in the end if Government is screwing things up, the solution will usually only be found when enough voters examine their preconceived notions about issues, immunize themselves from emotional name calling and exaggeration, and figure out for themselves the nature of reality.
Thursday, October 9, 2014
The Welfare Conundrum
If any kind of government handout is truly free it undermines productive activity. The social safety net becomes a hammock people many people will rely upon for a life without responsibility.
Those who live in this situation for long periods of time sometimes become convinced they are victims in life, that nothing is their responsibility, that the world is conspiring against them.
On the other hand our free market is not very good at finding productive activity for all members of society. It leaves many young people without opportunity, and often discards older people.
Republicans and Democrats both tend to dismiss the complexity of the problem. Republicans are hostile to government assistance to folks who have little, suspicious that everyone without a means of support has only themselves to blame. Democrats refuse to acknowledge that some of those without means of support are in that position because of concious decisions not to be bothered with the restraints on their fun activites that are sometimes required to successfully support yourself.
To me the answer is pretty obvious. We need a government run assistance system that doesn't just hand out money, it requires payment for the benefits in the currency most people without means of support have in abundance - time.
The time requirements could involve public service, volunteering for non-profits, advancing educational achievement.
There would still be folks who tried to work the system, so a structured system that progressively requires more time and committment the longer the person receives public benefits would provide incentive for people to get away from the public trough and into self sufficiency so they will have more control over their life.
On the other hand our free market is not very good at finding productive activity for all members of society. It leaves many young people without opportunity, and often discards older people.
Republicans and Democrats both tend to dismiss the complexity of the problem. Republicans are hostile to government assistance to folks who have little, suspicious that everyone without a means of support has only themselves to blame. Democrats refuse to acknowledge that some of those without means of support are in that position because of concious decisions not to be bothered with the restraints on their fun activites that are sometimes required to successfully support yourself.
To me the answer is pretty obvious. We need a government run assistance system that doesn't just hand out money, it requires payment for the benefits in the currency most people without means of support have in abundance - time.
The time requirements could involve public service, volunteering for non-profits, advancing educational achievement.
There would still be folks who tried to work the system, so a structured system that progressively requires more time and committment the longer the person receives public benefits would provide incentive for people to get away from the public trough and into self sufficiency so they will have more control over their life.
Wednesday, July 30, 2014
Republicans - The Party of Ideas
In early July (2014) the New York Times Sunday Magazine had a long feature article about all the new think tanks full of Republicans developing new substantive ideas. The Republican's have evidently woken up to the fact just saying no to Democratic ideas isn't enough for voters, outside the reddest of red states.
After reviewing the ideas discussed in the article it is apparant the Republican notion of new ideas is to take problems the Democrats have been harping about for years and find "Republican" solutions.
Conservative Republicans have the same deeply flawed approach to addressing policy problem that left wing Democrats have. Both ends of the political spectrum start with an narrow view of reality then build their policy ideas based on the their false notion that their view of the world reflects the totality of reality. For Republicans its "business good, government bad." For the left wing its "business bad, government good."
The left wing of the Democratic party has had a hard time being taken seriously the last few decades but the right wing of the Republican party is still a force in American politics.
However Republicans have a lot of history to overcome before I will spend my time seriously considering their new ideas.
Back around the end of World War I Republican's used support for Prohibition, coupled with "fresh" ideas about cutting taxes and regulations and enacting business friendly laws to sell voters on trusting them and grab and control Congress, which they held from 1919 to 1933. We went through a business boom where the stock market went wild, the housing market went wild, the rich got richer and the rest got poorer, then the 1929 Stock market crash ushered in the Great Depression. But the time the Republicans lost control of government in 1933 the country was on its knees.
Voters remembered that, so Republican's were a minority party for the next 40 years, but as those voters died off the Republican parties influence began to rise again. By the 1980's the conventional wisdom (still unquestioned today) was that the Republican party was again "the party of ideas". In the mid-1990's they used their glossy list of nice sounding new ideas to gain control of Congress and over the next decade or so enacted many of the same ideas they sold the country on back in 1919 (dragging along Democratic politicians who knew which way the wind was blowing). Again we had a steady diet of tax cuts, business friendly laws, and cuts in government's ability to regulate economic activity. Securities markets took off, the price of housing took off. A quote from a 1980's movie that "greed is good" went from ironic in the movie to a hallowed truth in Congress.
As voters finally ushered the Republican Congressional majority out the door in 2007 we were sliding into the biggest financial collapse since the the Great Depression, the greatest concentration of wealth in the hands of a few since the Great Depression, the housing market had become a casino for speculation, and unemployment had risen to levels not seen for decades.
History suggests Republican's are much better at marketing ideas than actually coming up with workable ones.
I just don't want to waste time on ideas from either end of the poltical spectrum that grow out of simplistic views of the world rooted in an emotional commitment to a particular ideology.
After reviewing the ideas discussed in the article it is apparant the Republican notion of new ideas is to take problems the Democrats have been harping about for years and find "Republican" solutions.
Conservative Republicans have the same deeply flawed approach to addressing policy problem that left wing Democrats have. Both ends of the political spectrum start with an narrow view of reality then build their policy ideas based on the their false notion that their view of the world reflects the totality of reality. For Republicans its "business good, government bad." For the left wing its "business bad, government good."
The left wing of the Democratic party has had a hard time being taken seriously the last few decades but the right wing of the Republican party is still a force in American politics.
However Republicans have a lot of history to overcome before I will spend my time seriously considering their new ideas.
Back around the end of World War I Republican's used support for Prohibition, coupled with "fresh" ideas about cutting taxes and regulations and enacting business friendly laws to sell voters on trusting them and grab and control Congress, which they held from 1919 to 1933. We went through a business boom where the stock market went wild, the housing market went wild, the rich got richer and the rest got poorer, then the 1929 Stock market crash ushered in the Great Depression. But the time the Republicans lost control of government in 1933 the country was on its knees.
Voters remembered that, so Republican's were a minority party for the next 40 years, but as those voters died off the Republican parties influence began to rise again. By the 1980's the conventional wisdom (still unquestioned today) was that the Republican party was again "the party of ideas". In the mid-1990's they used their glossy list of nice sounding new ideas to gain control of Congress and over the next decade or so enacted many of the same ideas they sold the country on back in 1919 (dragging along Democratic politicians who knew which way the wind was blowing). Again we had a steady diet of tax cuts, business friendly laws, and cuts in government's ability to regulate economic activity. Securities markets took off, the price of housing took off. A quote from a 1980's movie that "greed is good" went from ironic in the movie to a hallowed truth in Congress.
As voters finally ushered the Republican Congressional majority out the door in 2007 we were sliding into the biggest financial collapse since the the Great Depression, the greatest concentration of wealth in the hands of a few since the Great Depression, the housing market had become a casino for speculation, and unemployment had risen to levels not seen for decades.
History suggests Republican's are much better at marketing ideas than actually coming up with workable ones.
I just don't want to waste time on ideas from either end of the poltical spectrum that grow out of simplistic views of the world rooted in an emotional commitment to a particular ideology.
Monday, July 21, 2014
Why We Are So Clueless About Alzhiemer's
My mother has Alzhiemer's. As I and my sibling's struggle to find some way for her to live out her life as comfortably as possible and die as peacefully as possible, it has become apparent to me the medical profession is pretty clueless about why Alzhiemer's progresses differently in each person, and that the drug companies solutions, as to any particular person, are unguided missles, as likely to cause harm as good.
In the middle of this ongoing struggle I ran across an article in Science News (August 24, 2013, p. 15) that rekindled frustrations that I have felt for decades. The article discussed a July 25 article in "Current Biology" reporting on recent research that found that people do not sleep as well on nights when the moon is a full, even if they are in a windowless room where they have no idea it is a full moon. Other sleep researchers reported being surprised by the findings, although they have praised the study as well conceived and executed. What struck me as particularly significant was the leader of the research team reported he was at first reluctant to publish the study because "If you publish lunar stuff, your going to be put in the "lunatic' corner and not be considered a serious sleep researcher anymore."
It is disheartening that the sleep research scientists found the studies results surprising. There is so much data from other disciplines that has existed for decades - data about more crime during a full moon, more conceptions during a full moon, the stock market falling during a full moon. How can any field of scientific enterprise still be surprised in 2013 that the full moon influences behavior?
The answer, sadly, can be found in the researchers comment about being afraid of being put in the "lunatic" corner. In our western culture Astrology has been viewed as heresy - incompatible and competing with religion - for centuries because it challenged the ability of church leaders to use the Bible to claim they were the final source of knowledge on everything. The bias is so ingrained that any idea that could be interpreted as suggesting that what is happening with the moon, sun or planets might have predictive value for human behavior was career suicide for a scientist.
The hard sciences, physics, astronomy, chemistry, have managed to largely put the bias behind them. Even large parts of biology are no longer encumbered by this bias. But those areas of science that most directly affect human behavior, medicine and the social sciences, are still wearing blinders.
Science has known for 100+ years that many of the chemicals in our body are not constant, the ratio's of different chemical's rise and fall predictibly over the course of a day, a lunar month or a year. Over the years research findings have documented that the time of the day, or the time of year a person is born can predict things like when a women begins menopause, or who is a good driver or a bad driver.
Yet little or no research funding goes to look at how those predictable fluctuations in our body chemistry affect us. As a result we as a culture still have no real idea how to develop truly personalized medicine. It is pretty apparent to all of us we are all different. Yet medicine, psychiatry, and the drug industry, still treat us all as identical chemical clones.
Think of the feel good commercials on which drug companies spend billions to fill our airwaves. Each one is followed by some person talking as fast as they possibly can about all the possible bad things that can happen from taking the drug. Yet neither the drug companies nor the medical profession generally have a clue why some drugs help some people and harm others. More disheartening, they don't seem particularly interested in finding out.
Someday we will put aside the prejudice against investigating how those predictible changes in our body chemistry make us different from those whose chemical processes started at a different stage in the fluctuating chemical reaction. Until then we have to learn to live with the fact science has been most impaired by ancient prejudices in those areas that have the most direct impact on our ability to understand in what ways we are all slightly different chemical beings.
For related discussions:
http://motrvoter.blogspot.com/2012/05/big-surprise-genetics-is-of-little-use.html
http://motrvoter.blogspot.com/2011/09/nature-v-nurture.html
http://motrvoter.blogspot.com/2013/04/obamas-mapping-brain-project.html
http://motrvoter.blogspot.com/2013/04/what-western-medicine-is-good-at-and.html
In the middle of this ongoing struggle I ran across an article in Science News (August 24, 2013, p. 15) that rekindled frustrations that I have felt for decades. The article discussed a July 25 article in "Current Biology" reporting on recent research that found that people do not sleep as well on nights when the moon is a full, even if they are in a windowless room where they have no idea it is a full moon. Other sleep researchers reported being surprised by the findings, although they have praised the study as well conceived and executed. What struck me as particularly significant was the leader of the research team reported he was at first reluctant to publish the study because "If you publish lunar stuff, your going to be put in the "lunatic' corner and not be considered a serious sleep researcher anymore."
It is disheartening that the sleep research scientists found the studies results surprising. There is so much data from other disciplines that has existed for decades - data about more crime during a full moon, more conceptions during a full moon, the stock market falling during a full moon. How can any field of scientific enterprise still be surprised in 2013 that the full moon influences behavior?
The answer, sadly, can be found in the researchers comment about being afraid of being put in the "lunatic" corner. In our western culture Astrology has been viewed as heresy - incompatible and competing with religion - for centuries because it challenged the ability of church leaders to use the Bible to claim they were the final source of knowledge on everything. The bias is so ingrained that any idea that could be interpreted as suggesting that what is happening with the moon, sun or planets might have predictive value for human behavior was career suicide for a scientist.
The hard sciences, physics, astronomy, chemistry, have managed to largely put the bias behind them. Even large parts of biology are no longer encumbered by this bias. But those areas of science that most directly affect human behavior, medicine and the social sciences, are still wearing blinders.
Science has known for 100+ years that many of the chemicals in our body are not constant, the ratio's of different chemical's rise and fall predictibly over the course of a day, a lunar month or a year. Over the years research findings have documented that the time of the day, or the time of year a person is born can predict things like when a women begins menopause, or who is a good driver or a bad driver.
Yet little or no research funding goes to look at how those predictable fluctuations in our body chemistry affect us. As a result we as a culture still have no real idea how to develop truly personalized medicine. It is pretty apparent to all of us we are all different. Yet medicine, psychiatry, and the drug industry, still treat us all as identical chemical clones.
Think of the feel good commercials on which drug companies spend billions to fill our airwaves. Each one is followed by some person talking as fast as they possibly can about all the possible bad things that can happen from taking the drug. Yet neither the drug companies nor the medical profession generally have a clue why some drugs help some people and harm others. More disheartening, they don't seem particularly interested in finding out.
Someday we will put aside the prejudice against investigating how those predictible changes in our body chemistry make us different from those whose chemical processes started at a different stage in the fluctuating chemical reaction. Until then we have to learn to live with the fact science has been most impaired by ancient prejudices in those areas that have the most direct impact on our ability to understand in what ways we are all slightly different chemical beings.
For related discussions:
http://motrvoter.blogspot.com/2012/05/big-surprise-genetics-is-of-little-use.html
http://motrvoter.blogspot.com/2011/09/nature-v-nurture.html
http://motrvoter.blogspot.com/2013/04/obamas-mapping-brain-project.html
http://motrvoter.blogspot.com/2013/04/what-western-medicine-is-good-at-and.html
Monday, July 7, 2014
The Tiresome Argument about Mlinimum Wage Laws
During the half century of my life that I have been old enough to pay attention to the news there has been nothing in politics more predictable than periodic fights about increasing the minimum wage.
It will start with Democrats pointing to poverty statistics and saying the minimum wage is so low it allows business to exploit workers. Republicans will respond that increasing the minimum wage will force lots of business closures and hurt the economy. Democrats respond that putting more money in consumers pockets will give the economy a boost.
The body of research by economists over the years tends to favor the Democratic argument somewhat based on what has actually happened but that might partly be a function of the fact the Democrats demands were always moderated by Republican opposition. If the Democrats always got what they wanted we might well have ended up with a more stagnant economy.
So they are both right and they are both wrong. Big box retailers, fast food chains and other big businesses that rely on very low wages to generate big profits are exploiting workers to some extent, and, equally important, are undermining consumer buying power, and thereby our economy, by using very low wages to pump up their profitability.
On the other hand the small businesses or start-ups that are the backbone of our economy may not be making enough profit to pay more than minimum wage - in individual cases they may indeed go out of business, or decide to not start a business, if the minimum wage goes up.
From my position outside the argument it seems like a simple long term solution would be to link the minimum wage a business can pay to the profitability of the business.
Thus a new business that isn't making any money could pay people a lower wage, but as the business grows in profitability, the minimum wage the business pays workers would rise.
That approach would probably hurt Wall-Street a little bit, big businesses that rely on cheap labor would be less profitable. But the added money in the pockets of people who actually spend all their money instead using the excess cash to swap assets back and forth with other well off folk would be a big boost to our economy. It would increase demand that business could satisfy, and alleviate the asset bubbles that have plagued us the last couple decades.
It will start with Democrats pointing to poverty statistics and saying the minimum wage is so low it allows business to exploit workers. Republicans will respond that increasing the minimum wage will force lots of business closures and hurt the economy. Democrats respond that putting more money in consumers pockets will give the economy a boost.
The body of research by economists over the years tends to favor the Democratic argument somewhat based on what has actually happened but that might partly be a function of the fact the Democrats demands were always moderated by Republican opposition. If the Democrats always got what they wanted we might well have ended up with a more stagnant economy.
So they are both right and they are both wrong. Big box retailers, fast food chains and other big businesses that rely on very low wages to generate big profits are exploiting workers to some extent, and, equally important, are undermining consumer buying power, and thereby our economy, by using very low wages to pump up their profitability.
On the other hand the small businesses or start-ups that are the backbone of our economy may not be making enough profit to pay more than minimum wage - in individual cases they may indeed go out of business, or decide to not start a business, if the minimum wage goes up.
From my position outside the argument it seems like a simple long term solution would be to link the minimum wage a business can pay to the profitability of the business.
Thus a new business that isn't making any money could pay people a lower wage, but as the business grows in profitability, the minimum wage the business pays workers would rise.
That approach would probably hurt Wall-Street a little bit, big businesses that rely on cheap labor would be less profitable. But the added money in the pockets of people who actually spend all their money instead using the excess cash to swap assets back and forth with other well off folk would be a big boost to our economy. It would increase demand that business could satisfy, and alleviate the asset bubbles that have plagued us the last couple decades.
Tuesday, June 17, 2014
Falling business start up rate
Research by a fellow at the Harvard Business School finds that beginning in 1978 the rate of business start ups has consistently fallen, other than a brief rise in 1983-88 and 2003 to 2008. In 1978 business start up rates stood at about 15%, by 2011 the start up rate was about 8%. Since 2008 the start up rate has been below the business failure rate - more businesses have died than have been started.
A fellow at the Harvard Business School suggests the cause may in part be the rise of big box and on line retailers that have killed local retailing.
What does it mean for our future that our business diversity is shrinking? That more and more of our life is controlled by fewer and fewer Corporate CEO's? Is this related to the increasing gap between most of us the the very wealthy? Is this related to the overarching monetary muscle that now controls our politics?
Economist May 10, 2014, page 27 - Citing research by the Brookings Institute
A fellow at the Harvard Business School suggests the cause may in part be the rise of big box and on line retailers that have killed local retailing.
What does it mean for our future that our business diversity is shrinking? That more and more of our life is controlled by fewer and fewer Corporate CEO's? Is this related to the increasing gap between most of us the the very wealthy? Is this related to the overarching monetary muscle that now controls our politics?
Economist May 10, 2014, page 27 - Citing research by the Brookings Institute
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