Income Inequality and Financial Crises:
David A. Moss, an economic and policy historian at the Harvard Business School, has spent years studying income inequality. While he has long believed that the growing disparity between the rich and poor was harmful to the people on the bottom, he says he hadn’t seen the risks to the world of finance, where many of the richest earn their great fortunes.
Now, as he studies the financial crisis of 2008, Mr. Moss says that even Wall Street may have something serious to fear from inequality — namely, another crisis.
Did weak copyright laws help Germany outpace the British Empire?:
Höffner contends … that the near absence of copyright law in eighteenth and nineteenth century Germany laid the groundwork for the “Gründerzeit” — the enormous wave of economic growth that Deutschland experienced in the middle and later nineteenth century.
Mark Cuban in response to yesterday’s stork market panic:
Tax every single share of stock that is bought and sold 25 cents per transaction … If you are a true investor. Someone who wants to own a share of stock in a company you believe in, then its an amount that is not going to impact your investment decision making process … If you are a day trader, you are going to have to be right more often or actually hold on to stocks for a longer period of time. That’s ok. I know it will be rough on some of you that make a living this way. But in reality, you don’t add anything to the markets.
There are hundreds of parodies of this “Downfall” clip. The studio, Constantin Films, has ordered takedowns of some of them, and eventually even had this parody removed from YouTube. In this clip, Hitler is the producer, and his lawyers tell him why he can’t do a DMCA takedown and how the EFF could stop him. He desperately searches for other ways to protect the movie. Click through for the video.
Last year I remarked on the subprime mortgage induced financial collapse:
To blame individuals acting within the rationale of a system for producing unwelcome outcomes is to deny the fundamental flaws of the system.
Michael Lewis, author of The Big Short, being interviewed by 60 Minutes on the collapse:
The incentives for people on Wall Street got so screwed up that the people who worked there became blinded to their own longterm interests because their short-term interests were so overpowering.
Sounds like the definition of capitalism to me.
James K. Galbraith, writing for The Nation:
Bankers don’t like budget deficits because they compete with bank loans as a source of growth.
There’s a campaign under way in the U.S. to “restore the First Amendment to its original purpose: to protect people, not corporations.” They need to hurry. The U.S. has long taken the road to corporatocracy. The longer this goes on the less likely they’ll ever be able to turn back.
Richard Wilkinson and Kate Pickett writing for The Guardian:
The evidence shows that almost all the problems that occur most often in the poorest neighbourhoods — including those that make us a broken society — are systematically more common in more unequal societies. Rates are not just a little higher, but between two and eight times higher. Wider income gaps make societies socially dysfunctional across the board.
Last October Cameron rounded on Labour, saying: “Who made inequality greater? No, not the wicked Tories. You, Labour. You’re the ones that did this to our society. So don’t you dare lecture us about poverty. You have failed and it falls to us, the modern Conservative party, to fight for the poorest who you have let down.”
But the truth is that we are suffering the impact of the massive increases in income inequality under Thatcher, which Blair and Brown have since failed to reverse. In the 1980s the gulf between the top and bottom 20% widened by a full 60% — much the most dramatic widening of income differences on record.
Cancel Haiti’s Debt petition — Oxfam International
Alex von Tunzelmann, writing for The Times, explains how Haiti became so indebted in the first place:
The appalling state of the country is a direct result of having offended a quite different celestial authority — the French. France gained the western third of the island of Hispaniola — the territory that is now Haiti — in 1697. It planted sugar and coffee, supported by an unprecedented increase in the importation of African slaves. Economically, the result was a success, but life as a slave was intolerable. Living conditions were squalid, disease was rife, and beatings and abuses were universal. The slaves’ life expectancy was 21 years. After a dramatic slave uprising that shook the western world, and 12 years of war, Haiti finally defeated Napoleon’s forces in 1804 and declared independence. But France demanded reparations: 150m francs, in gold.
For Haiti, this debt did not signify the beginning of freedom, but the end of hope. Even after it was reduced to 60m francs in the 1830s, it was still far more than the war-ravaged country could afford. Haiti was the only country in which the ex-slaves themselves were expected to pay a foreign government for their liberty. By 1900, it was spending 80% of its national budget on repayments. In order to manage the original reparations, further loans were taken out — mostly from the United States, Germany and France. Instead of developing its potential, this deformed state produced a parade of nefarious leaders, most of whom gave up the insurmountable task of trying to fix the country and looted it instead. In 1947, Haiti finally paid off the original reparations, plus interest. Doing so left it destitute, corrupt, disastrously lacking in investment and politically volatile. Haiti was trapped in a downward spiral, from which it is still impossible to escape. It remains hopelessly in debt to this day.