Monday, December 2, 2013

The rising tide of profits...

... won't lift an employment boat with a hole in the bottom.

Whenever someone talks about how the "trickle down" from corporate profits will help employment point out what "everyone who's ever run a business knows..."
"..hiring more people is a course of last resort for capitalists. It’s what we do if and only if rising consumer demand requires it." (Nick Hanauer, quoted by Angry Bear)
So the question is not how much money that corporations are making, the question is whether demand is increasing.  Since unemployment (and the employment-population ratio) is stuck, we can presume that demand is not increasing and corporations are merely making more money by improving productivity. Sure, improved productivity can come from investment in new technology (which can support new jobs), but it seems that right now its from cutting wages and benefits to provide the same product/service with a higher profit margin.

Saturday, November 30, 2013

QOTD November 30, 2013

"Intelligence is a tool. If you use your intelligence to rationalize being incurious because you already know everything, or use your intelligence to find more sophisticated and convoluted reasons why what you decided was true before you began thinking is still true, you are not being very smart. Smart and stupid are not innate characteristics, but rather products of a willingness to educate oneself, to ask for and seek help from those smarter than oneself, and to mark one’s beliefs to market."
Brad DeLong at the Washington Center for Equitable Growth

It's unfortunate that Prof. DeLong slips into economese in the last sentence, which makes an otherwise brilliant and universal quote a little less so.  For those who don't regularly follow DeLong, his phrase "mark one's belief to market" means revising beliefs that are proven wrong by world that is, and not living in the world as you imagine.

Wednesday, November 13, 2013