Wage Story Not to be Missed

NY Times article

The Times yesterday had an oft-blogged-upon article about how wage growth in the US has not kept up with inflation nor productivity nor corporate profits nor non-wage income. This is an interesting phenomenon, just like the story that the middle-class in America is disappearing with globalization.

Workers take on this so far: Corporate profits and the non-parallel growth of wages might be due to the fact the the corporate welfare state has finally caught up with us. The US Government (and state and local governments too in many cases) have given tax breaks, special interest spending and otherwise have protected big businesses who are the political leaders' friends. This may have given a distorted economy, one where profits are up but not wages. Where income per worker is up (the definition of productivity) but this isnt getting to the workers because the income increases are due to rents (corporate capitalism; increased lobbying and governent spending) instead of efficiently- created market-oriented breakthroughs stiffled by the corporate welfare state which might naturally flow throughout the economy more readily in a less corporate world. Eg profits are supranormal and wages are normal, and/or crowded-out by the growth of the government-corporate axis in the economy.

An alternative view is that maybe the fact that wages arent keeping up with the growth of the economy is that 1) people are not wanting to work as much as they have been taking equity out of their homes to live on, 2) there is no doubt that Walmart and Chinese and Indian imports have drastically lowerd the costs of the necessities of life (what is the basket of goods that inflation measures? Sure seems to be missing the true picture. I mean clothes, cleaning supplies, (reasonable) cars, food, even CDs and DVDs are the same price if not less that they were 5 years ago and the quality better! 3) maybe people (except the urban underclass) are happy with their lives and any additional income just doesnt mean that much to them, 4) maybe the growth of the stock market over the last three years (thus those self-same rises in corporate profits which seem erroneously juxtaposed against 'wages' - are a good thing) - and the corresponding growth in people's retirement accounts, of which more than 50% of American's have, has also put current income less than a priority.

Same thing with how the middle class may or may not be disappearing. There is more to the picture than meets the eye. Yes the top 5% are getting more of the total wealth in society (and they are paying a greater percentage of the taxes too) and the lower 20% arent getting as wealthy as quick as the top 5%. Does this mean the middle is disappearing? Hard to say. But maybe as the rich get richer the poor get richer. But basically we have an underclass, the wealthy and the middleclass. I don't think that has changed. Do you?

Lastly, the Mises Institute captures the story quite well here.

More Corporate Welfare for the Film Industry in New York

The famous are different than you and me

Mayor (President?) Bloomberg announced a new program for job training for the “behind the scenes” people for film. New York is big into film and tv and fashion as is well known. (And publishing too but that might be a different category). Film is a big export business for the USA.

These training subsidies are just a form of industrial policy, or economic central planning of you will, and are a gift to the already established film industry (so the ‘infant industry’ argument doesn’t even hold up in this case). Why should the film industry get their people trained by the taxpayer as opposed to those in other industries? Or another way to look at it, the major film companies are owned by the Japanese (not that there is anything wrong with that - we can all invest in Sony) so why should we pay for their workers to be trained, as opposed to say non-tradeables such as the gas company’s tech repairmen. Because the government should not be in the business of subsidizing one company over another, it’s not fair, thats why.

The government should focus more on the rule of law and the coddled film industry should lower its prices; I can get a bootleg DVDs of the latest movies at the corner market here in Brooklyn for $5 two days after the release of a blockbuster.

Economic growth (technology and capital investment) gives one access and options to goods and services but one doesn’t necessarily have to indulge. Just knowing they are there provides a good unto itself. You ever been to an African supermarket (as opposed to say the open-air informal markets)? Talk about the need for rule of law and failed industrial policy. If alot of that money would have been used for commons like roads or not ended-up in overseas bank accounts, instead of failed support to what could have been a developing entrepreneur class, alot of the poorer parts of Africa might be on a different path or at least a more abundant and less corrupt one.

Start Your Own Religion

The soul is not for sale

The latest concept in ‘reality’ programming is on religion; eg here is money, start your own and we’ll film it. Isn’t religion sacred? I bought a t-shirt in the San Francisco airport from the Church of John Coltrane (who of it was said never had an unkind word for anyone) - it was a sacred act.

Many thinkers not least of whom were Mao, Pareto and I think Socrates, said that religion is the “opiate of the masses” and/or a tool to perpetuate the class struggle (is there really such a thing as a ‘class struggle' ?) Carl Menger in his Principles of Economics stated how poorer societies put more of their effort into imaginary goods (religious tokens) as opposed to real goods (which satisfy needs) than do richer ones. So maybe class struggle is just a manifestation of the lack of economic growth. Or does materialism supplants spirituality (the answer to that may be obvious).

Of course Good, God, Gold and Dog, may be just a semantical evolution but I think most of us would like to believe in a greater good. Scientific rationality put paid to a lot of metaphysical thinking, but institutions remain. How you practice your spiritual may be the stuff of reality tv.

At what point does something become officially a religion? One definition might be when a place of worship is established (and funded) by the followers or maybe when the head of the church makes his ‘living’ from the church. So does it really boil down to the almighty buck, maybe.

Spirituality Inchallah, is more than just money, and maybe perhaps is manifested in how we treat each other. Maybe organized religion is just a community happening, the patterns which we all need to live in a complex dualistic world.

The original drummer Angus MacLise for the Velvet Underground (a “religion” to some) quit when they first started getting paid ($75 split 4 ways) as he thought they would have to sell out. He later changed his mind about that, maybe the Velvets where the exception and that is because they never got famous and barely made a living.

Today maybe for some ‘non-believers’ the new religion is the State, but people have been saying this for quite some time. Same thing with the belief that the State is not the answer to our problems, but the difference is only the State has the right to take from one person and give to another, and isnt that against one of the golden rules since even before the Bible's big three?