"Labor productivity has increased only 1/2 percent per year since 2010--the smallest five-year rate of increase since World War II and about one-fourth of the average postwar rate (figure 11). The slowdown in productivity has been worldwide and is evident even in countries that were little affected by the crisis (figure 12). Given the global nature of the phenomenon, it is unlikely that U.S.-specific factors are mainly responsible."

Hmmm

Self evolved unregulated Market price paths evaluate performance of specific producer units against a market strike " norm "

The norm becomes an average or margin norm or something in between
depending on that spots  moment in market developments

Large penalties to low paid jobs incentive packages

" famously " wage workers can not singularly bare the weight of large penalties
However large personal penalties may be necessary to instill optimal work habits

So ?

Well these wage lings in the age of George jetson
Could get a loan of the funds to pay the penalty from Uncle Sam
and pay it back
Meanwhile they'd get " a time served " stipend
To the extent minimal compensations is wiped out as well as any bonus

If large production teams aren't able to be adequately whacked

Then monitor proliferation sets in

A hierarchy of straw bosses
That can at the job floor level monitor groups of monitor able size

Recall then we get monitors of the monitors if they too can afford the penalty that would motivate them to monitor adequately if not optimally

Holmstrom's an ace

He is worth his weight n surplus value !

Corporations are the organization he explains

They combine Alchian's  monitors  ie hierarchy crucial to a viable market embedded firm
as opposed to
A Contrivance of equals ie a partnership  system  via ing for revenue in competitive markets

Yes monitoring plus absentee ownership => corporations in holmstrom's lingo

Henc forth your comrade in arms OP

Will be implicitly invoking this distinction
when talking of corporations v the more generic term firms

Maximizing -- at the out put unit level/- Surplus labor time v minimizing total labor Time

Total LT added per unit  here is of course singular
Ie firm specific

SASNLT
(Simple Abstract Socially Necessary Labor  Time  )
Here
is a post facto construct
taking all like concrete labor times together and dividing by revenue from sale of output
The calculation
leaves a historic unit labor cost for a given task set at each stage of value added in production

The market price determines the specific pattern of firm black and red ink

But the  actual firm by firm  concrete labor times dispersion of the actual output total is by definition social necessary whether the specific LT is above or blow the particular average

You could define a firm using a easily expanded new process as determining the social necessary labor time and show a prospective potential increase in surplus labor time
If market price remained un changed even as all firms moved to the new process

Holmstrom's question one " why are some workers employes and others contractors ?

The fed control function made explicit ?......never !

Bernanke and the projections

"Importantly, projections are conditioned on each participant’s individual view of what would be “appropriate” monetary policy, defined as the policy that the individual believes would be most likely to help achieve the Fed’s inflation and employment objectives. So, when projecting the behavior of (say) inflation, a hawkish member of the committee might be assuming a very different future path of interest rates than a dovish member."

Translation this is mutual inconsistent group forecasting 

We need the explicit interest rate policy control settings at a minimum 

"The long run " is a poor term indeed

The benifull bernanke:


"?...the “long run” values of the variables :  

—the values to which the variables would be expected to converge over time 
if, hypothetically, there were no new shocks to the economy---"

Ie

These are values that  locate the systems various interacting " attractor-adjusters "  
Points of mutual balance 

Each such claim
 Posits the existence of  "a rest state " for internal adjustments an end to internal motion 
Beyond the final path where all variables are " content "
 to co operate in a mutually self sustaining motion 

Yes it's a Snuffle-upicus  in there never fully assembled yet always different in its final project able form 

First assume Snuffle -upicus ! 

The key no internal contradictions that will surely pre empt this rest state even without external shocks 


The system self evolves self reorganizes thru the millions of agent actions reactions

But unlike some cloud of confined atoms  there is no dynamic equilibrium value inherent
In the system if left to its own devices

Yes the clever definition of the confinement boundaries can "convert"
 internal contradictions into external shocks

But not without cloaking entanglements that connected the shock source to the internal workings
On the other side of "the confinement lines "


Edgeworth Agents and Newtonian molecules are very different critters

Yes you can try to tame the system
for example " a financial sector "  can be cut out of the system

This Simply ignores the interactions of  the trade based credit systems
And the spontaneous evolution of  a financial system ..long run

Practically this looks like
Put the financial sub system in harness
And the greater system will " grow " a new unregulated one

Holmstrom's strikes

" Styhzed facts indicate that small firms are responsible for a disproportionate share of innovative research.


 "There are many possible explanations for this fact. The paper seeks to understand this phenomenon as the outcome of an optimal assignment of tasks across individuals and organizations. It is shown that incentive costs associated with a given task depend on the total portfolio of tasks that an individual or an organization undertakes. Mixing hard to measure activities (innovation) with easy to measure activities (routine) is particularly costfy, since it will either lead to misail~ation of attention across tasks or to mi~l~ation of risk. Larger firms am at a comparative disadvantage in conducting highly innovative research, because of the costs associated with managing a heterogeneous set of tasks. It is further argued that optimal organizational responses to coordination and control of routine tasks will lead to bureaucratiza- tion within the firm and to financial constraints imposed by capital markets, both of which are hostile to innovation."

" For an increasing number of firms, innovation has become an urgent concern. "

Optimal defaults

First we recognized lots of defaults were a systemic good

Now we need a model for defaults that can guide credit policy

A rough notion of a better path for the aggregate default Rate is necessary but inadequate

It's the optimal path and pattern of actual defaults we seek

Pugs leu puffs "one’s material wealth is not synonymous with one’s true wealth, which is to say, one’s freedom and ability to lead a fulfilling life. Much of our true wealth is constituted within the household, where we can combine non-market temporal, informational, and social inputs with market goods and services to accomplish various ends of our own choosing."

For egg heads  the Biedermeier bliss point is dead ahead !


The rentier opium eaters got there faster of course

Is "The exploitation system " best characterized by producing the hetero labor powers

Yes

Start with the actual real bundles of wage goods and the hours of each single type produced

That is the foundational "reality " on the cost side of production

But please comrades think thru your model of final demand ..first

The demand side of final Markets are cost blind

The general the particular and the singular

Hegel

We must go all the way down to the singular
to complete an iteration
Before ascension back with the commencement of  the next iteration

G-- > P -- > S -- >  P -- >.......

The singular array at a moment in time must be outlined in all it's dispersion and heterogeneity

The particular expressed in this array

Say all the firms yesterday making steel tubes across the entire world wide market system

Stiglitz world:onomy. But even debt shouldn’t matter: standard General Equilibrium theory says that there is a market clearing competitive equilibrium—with full employment. Debt simply is a matter of who has claims on society’s resources. There is nothing in standard equilibrium theory that says that there are patterns of ownership claims that are inconsistent with full employment."

More stig:"The standard models (referred to earlier in the introduction, and discussed at greater length below) assume that the source of the disturbances to the economy is exogenous. To me, it is clear that that is simply wrong: the credit and housing bubble that were at the center of the 2008 crisis was created by the market. The bubble was a market phenomenon. To assume that it was exogenous is to assume that there is nothing that we can do either to prevent the creation of a bubble or to curtail its size."

"It is certainly not just in America that people desire a sense of vocational accomplishment, rather than simply money to live on. In no country does it feel generally right to respond to rising economic inequality by imposing heavy taxes on the rich and transferring the money to others. That feels like changing the rules of the game after it has been played...."

That's bob Schiller

So what's the plan bob ?


Vickrey macro ?
Well bob only reflects these rural working class types

They want more power over their economic destiny

Sounds like border control to me
But  what about unions

What else could job class power mean if not unions

But these folks joined in the de balling of public unions ?

We must work thru the contradictions eh ?

Stig adds on two way Buffet chits

Exporters earn chits dollar for dollar they can sell to importers

Like wise importers earn export chits

The supply of both time expiration stamped B chits
could be set at any ratio
There by setting the size of the trade gap

Ket feature of stig e bank credit auction ...negative prices

"To achieve full employment may entail an auction of credit at which the price is negative, i.e. the only terms at which potential lenders are willing to “accept” the temporary use of funds, to be repaid later, entail a negative interest rate. "


"The auction may entail a provision (unlike the current system) where a negative “bank rate” has to be passed on (at least partially) to borrowers, in the form of a negative lending rate. Presumably there is some negative rate at which the desired credit creation –that viewed as necessary to ensure full employment--related to new spending (investment or consumption) is achieved. "


But it may be a very negative rate, and the distributive and even allocative consequences of that negative rate may be adverse. Accordingly, it makes sense to look for more effective ways of stimulating the economy. "

More Stiglitz e banking public credit option

"The fact that the money created by the government can be used to pay the taxes that are owed to the government, and that the government has the power to levy taxes, ensures the value of the credit it has created. Indeed, because the credit that has been created is electronic money, the movement of which can easily be monitored, the government has not only the ability to levy taxes; it also enhances the ability to collect taxes. "

Stiglitz scores on credit system overhaul

https://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/The%20Theory%20of%20Credit%20and%20Macro-economic%20Stability%20Final.pdf


Cousin it Stiglitz has a draft of a better credit system

Start with a closed end e - money system
Then
Use
"The central bank (government) auctions off the rights to issue new credit."

Nb : 

"The system is symmetric. The central bank may decide that there is too much money in the economic system—that is, the banks are lending too much, using “money” that they receive in repayment. In that case, the government can buy back rights to issue credit: they buy back the money that they have allowed the banks to effectively manage on their behalf. Again, there can be an open auction for those most willing to give up rights to issue credit. This would literally drain money out of the banking system. "

"The government would allow for entry into the banking system; indeed, separating the depository and lending functions and the open auction of rights to issue credit should make entry easier, and thus competition more vigorous " 

"Entry would presumably occur to the point where the before‐tax return to capital (measured over the business cycle) would be slightly in excess of the normal return to capital. Some excess return may be necessary to induce more responsible social behavior on the part of bankers."

 

For example 

" if the economy is weaker, it will provide more credit to stimulate the economy" "Note that in this system, banks cannot create credit out of thin air, 
and the amount of money being created each month is known with considerable precision."

 "Conditions would attach to selling the “rights to lend” to the banks. Minimum percentages of the loans would go to small and medium-size enterprises and to new enterprises or to underserved communities; a maximum would go to real estate lending (perhaps apportioned by location, on the basis of local changes in prices), to purchases of other existing assets, or to those engaged in speculative activities, like hedge funds. None would be allocated to socially proscribed activities, like those contributing to global warming or associated with the promotion of death, such as cigarettes. In short, there would be minimum standards for social responsibility. There would be limits on the interest rates charged. Discriminatory lending practices and other abusive practices by credit card companies would be proscribed. So, too, would connected lending. "

"

Stiglitz scores on credit system overhaul

https://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/The%20Theory%20of%20Credit%20and%20Macro-economic%20Stability%20Final.pdf


Cousin it Stiglitz has a draft of a better credit system

Start with a closed end e - money system
Then
Use
"The central bank (government) auctions off the rights to issue new credit."

For example 

" if the economy is weaker, it will provide more credit to stimulate the economy" "Note that in this system, banks cannot create credit out of thin air, 
and the amount of money being created each month is known with considerable precision."

 "Conditions would attach to selling the “rights to lend” to the banks. Minimum percentages of the loans would go to small and medium-size enterprises and to new enterprises or to underserved communities; a maximum would go to real estate lending (perhaps apportioned by location, on the basis of local changes in prices), to purchases of other existing assets, or to those engaged in speculative activities, like hedge funds. None would be allocated to socially proscribed activities, like those contributing to global warming or associated with the promotion of death, such as cigarettes. In short, there would be minimum standards for social responsibility. There would be limits on the interest rates charged. Discriminatory lending practices and other abusive practices by credit card companies would be proscribed. So, too, would connected lending. "

 

"

 

Incomplete job market systems are not necessarily improved by establishing some additional markets

Exploitation thru market mechanisms perfectly consistent notion under bourgeois scarcity theory of exchange value

Yes imperfections in markets can be critiqued under neo classical
By comparison of actual market outcomes
with optimal exchange values under perfected market mechanisms

However the exploitation that exists at optimal exchange ratios
Under capitalism mediated by perfected markets
   is the camel that still fits thru the eye of the needle

The magic of the Natural market economy  ...that of 18 th century discovery
Has no explicit place of exploited wage labor
So long as
The wage is the product of a perfected job market

Channel analysis and monetary- credit macro

Mishkins channels
References Stiglitz paper on rationing credit
Then forgets it

Private banking means
We have
The macro perverse credit cycle
Despite rates and money injection
standards tighten in a crunch contraction
Killing monetary and credit channels

Other assets ?

See farmer for purchasing equity  shooting up the stock market
Will this lead to
A  demand injection
thru animal spirits upper effect spending burst ?

Probably not !

The corporate captains will take the equity boost as gracious extra personal bonus trigger

But still
sit on their hands
No more  outfit spending

Till output demand lifts

Late bill vickrey and the revival of bull moose fiscal activism

The early to mid 90's probably marked the apex of interest rate macro nautics
In that milieu bill vickrey trumpeted full blast fiscal macro

A call to revive KL type macro

To his honor and credit !

Social wage v social dividend

Social wage is an hourly rate the co joins with the job wage

Social dividend is a citizen payment

Choose ?

Or both ?
Tax base ?

vat ?

Average
Tax to  new funds injection ratio ?

"the world’s ability to generate wealth has outpaced its ability to generate safe stores of value and to credibly transfer that wealth"

That's the estimable
Doctors Hart and Jinglese


Code red Conclusion

The depository system is too important to leave
In the care of  profiteering  private banks

Hey from John Wilkes booth school of biz wiz comes this hypothesis

"My hypothesis is that markups have increased 

( see prior posts )

because firms became better at creating product differentiation and erecting barriers to entry."

Blaine Michael porter !

"  In 1980 Michael Porter wroteCompetitive Strategy, the ninth most influential book of the 20th century according to the Academy of Management. In this book, Porter explained how firms can create barriers to entry and obstacles to competition to increase their pricing power. The book became the primary textbook of all of the strategy courses taught in business schools and the gospel of the leading consulting firms. It captured also Warren Buffet’s investment rule. As he famously stated: “In business, I look for economic castles protected by unbreachable ‘moats’.” 

"Should we then be surprised if firms finally learned how to apply it? "

" If this were the case, Barkai’s model clearly shows that the outcome is inefficient: economic output and welfare could be greater if there were more competition. "

" But how to promote it? The traditional antitrust method, 

which looks predominantly at mergers and market shares, could be insufficient. 

If Barkai’s conclusions prove to be robust, we may need to start thinking about ..."

"   new policies to promote competition.   "

Yes deeper into interventionism more socialization of the market system 

Even some of "the Boothers " know this now ! 

For the record: maximizing firm profit is not social optimization in real market mediated environs

Institutional arrangements evolved thru historical processes are best characterized as rugged arrangements that suffice to sustain themselves until

overwhelmed
By the accumulated consequences
         of inherent Internal  contradictions

At some most likely several conjunctures  in the path of society
The irrationality of existing sociopolitical institutional arrangements
becomes widely apparent to Clios appointed class agents of change
And ....

"Piketty’s fundamental laws notwithstanding, the capital share declines as fast as the labor share. The big winner is the profit share, which goes from 2 percent of GDP in 1984 to 16 percent in 2014."

The nub
"f both labor and capital share dropped, we cannot blame a decline in the price of labor, it must be a change in markups, i.e. in the ability of firms to charge more than their cost (pricing power)."

We see this


" if we distinguish between return to capital and profits"

"we can appreciate that sometimes profits may come from (non-replicable) barriers to entry and competition, not from capital accumulation. In these cases, additional investments may not be as profitable as past ones."

"  In other words, if what makes Coca-Cola so profitable is its magic formula, new capital investments will have a significantly lower return, because they will be unable to add to the formula. Hence, Coke can be very profitable and not invest a lot." 

Call them

Rents of enterprise 

"Does this mean that the decline in capital and labor shares is due to an increase in firms’ market power? Barkai provides a clue this might be true: a strong cross-sectional correlation between the increase in concentration of an industrial sector between 1997 and 2012 and the corresponding decline in the labor share in that sector. "



"This conclusion is strengthened by a recent Fed working paper, which finds that on average M&As significantly increase markups, but have no statistically significant effect on productivity."

The weeds are brambles : " Most researchers assume that the share of total output lost by labor went to the owners of capital. However, a new working paper shows that the capital share has also declined, while the profit share has gone up. Could this be related to an increase in firms’ market power? "

Further Adventures in surplus hunting

So we got a wild surplus in our cross hairs

Query before squeezing the trigger on the ole 12 gage

"What is this type of surplus share and where did it come from ?"

The strictly flexible and flexibly strict kill or capture protocols
Handed over from party central to us poli Econ class  open market E rangers
Do not include a command

"Shoot all surplus critters "

We must track tag and monitor

Trim some cut down some and yes shoot on occasion to kill
Example query

Is this surplus a rent
Or an earned reward
For socially beneficial activity
Or some agrivating mixture

"Who Is Responsible for a Declining Labor Share of Output? Michael Porter

Posted on November 16, 2016 by Luigi Zingales

Most researchers assume that the share of total output lost by labor went to the owners of capital. However, a new working paper shows that the capital share has also declined, while the profit share has gone up. Could this be related to an increase in firms’ market power? 

Luigi Zingales

One of the issues most hotly debated in economics these days is the decline in the share of total output that goes to workers (see Figure 1). This labor share is computed simply by summing total compensation received by employees and dividing it by GDP. The recent sharp decline in this share is particularly puzzling, since in the United States it had remained roughly constant for the previous 75 years. Is this the macroeconomic consequence of stagnating median wages? What caused this decline? Possible explanations abound: from the demise of the unions to the introduction of technology that favors capital over labor, from managers’ greed to Piketty’s ‘fundamental laws of capitalism’ (for an intelligent discussion see).

Figure 1: Labor Share of Output

In conducting this analysis, most researchers assumed that whatever was not going to labor had to flow to the owners of capital. After all, in capitalist economies profits tend to go to equity investors. Yet, economic theory distinguishes between labor share, capital share, and profits, i.e. the residuals left after both capital and labor have been paid. 

In a new working paper, Simcha Barkai, a PhD student at the University of Chicago Booth School of Business and a fellow at the Stigler Center, studies what happens if we abandon the old practices and follow what theory suggests. When he separates the capital share (i.e., cost of capital times amount of capital divided by output) from the profits share (the residuals), he obtains:    

Figure 2: Capital Share of Output

Piketty’s fundamental laws notwithstanding, the capital share declines as fast as the labor share. The big winner is the profit share, which goes from 2 percent of GDP in 1984 to 16 percent in 2014.

This is not just a relabeling. In a world where capital gets all of the residuals after labor is paid, a reduction in labor share automatically means an increase in return to capital, which should make investing very attractive. Thus, why are firms today so profitable but invest so little? 

Simcha Barkai

By contrast, if we distinguish between return to capital and profits–as Barkai does–we can appreciate that sometimes profits may come from (non-replicable) barriers to entry and competition, not from capital accumulation. In these cases, additional investments may not be as profitable as past ones. In other words, if what makes Coca-Cola so profitable is its magic formula, new capital investments will have a significantly lower return, because they will be unable to add to the formula. Hence, Coke can be very profitable and not invest a lot.

Distinguishing between capital share and profits allows Barkai to gain some theoretical insights on the cause of the decline in these shares. If markups (the difference between the cost of a good and its selling price) are fixed, any change in relative prices or in technology that causes a decline in labor share must cause an equal increase in the capital share. Thus, if both labor and capital share dropped, we cannot blame a decline in the price of labor, it must be a change in markups, i.e. in the ability of firms to charge more than their cost (pricing power).

Does this mean that the decline in capital and labor shares is due to an increase in firms’ market power? Barkai provides a clue this might be true: a strong cross-sectional correlation between the increase in concentration of an industrial sector between 1997 and 2012 and the corresponding decline in the labor share in that sector. This conclusion is strengthened by a recent Fed working paper, which finds that on average M&As significantly increase markups, but have no statistically significant effect on productivity.

What Barkai does not address is the ultimate source of this increase in market power. Given the phenomenon occurred in the last twenty five years, it would only be natural to attribute it to the network externalities created by the ICT revolution. But the increase in markups is not limited to the high-tech sector. It could also be the effect of the demise of antitrust enforcement. But the phenomenon seems to take place even in industries that are not very highly concentrated.

My hypothesis is that markups have increased because firms became better at creating product differentiation and erecting barriers to entry. In 1980 Michael Porter wroteCompetitive Strategy, the ninth most influential book of the 20th century according to the Academy of Management. In this book, Porter explained how firms can create barriers to entry and obstacles to competition to increase their pricing power. The book became the primary textbook of all of the strategy courses taught in business schools and the gospel of the leading consulting firms. It captured also Warren Buffet’s investment rule. As he famously stated: “In business, I look for economic castles protected by unbreachable ‘moats’.” Should we then be surprised if firms finally learned how to apply it? 

If this were the case, Barkai’s model clearly shows that the outcome is inefficient: economic output and welfare could be greater if there were more competition. But how to promote it? The traditional antitrust method, which looks predominantly at mergers and market shares, could be insufficient. If Barkai’s conclusions prove to be robust, we may need to start thinking about new policies to promote competition.   

Disclaimer: The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy. 

 Antitrust and Competition One comment

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Latest craze:maintaining homeostatic compensation by social/ firm share shifting

Some times the system needs to reduce firm wage bills

As if system had wage flex ala neo classical macro

Using the transfer system the per hour social contribution can be increased to cover the firm cuts
On an average if not on each individual job holder
By maintaining full hours and job positions the movement between jobs should allow adjustments at the firm level to continue a pace

The potential uses of a socialized surplus both macro and micro
are a marvel ..eh ?

Sector crunches ?
Managers of the firms
Can slash wages during a share shift at the average without jobs tear reaction
Even under MIRV ( multiple independent return vehicles )  socialism ....of course
Firm residues still need the flex to self optimize
Come a crunch basic wage rates may require cuts

The bonus out of profit share should not be cut !

If we intend to obey holmstrom's  rules

Icentivization of agents is hardly optimized with the present system of private exploitation

Taxes to fund public production v taxes for distribution to the citizenry

Tariff policy can be part of the transfer system

Not part of the revenue ear marked for public goods and services

The proceeds -///just like a carbon tax or inflation tax ---

From any and all
  Trade regulating tariffs and auctioned import warrants
 can be viewed as a pigou tax
     Intended in its entirety
For per capita distribution

Seems we live under the curse of dicky ..

4 decades that is the usual interval suggested for the recent stage of our economic history
Here
In Unclestan

Yes
This blasted march started by most accounts
right after we forced poor mil house out of the White House

Not a coincidence ?

That petty act of liberal elite vengefulness
An actual scape goating of their own deep culpability
Has produced this accursed plague time

Oh Clio tell us
When shall we lift this curse

My guess as a pot bellied  indolent Samuel of the social side walk

Only when we purge the liberal elite from control of the Demrat party

Dean " Only a bit more than 4.0 percent of the over 65 population has non-Social Security income of more than $80,000 a year. If the point is to have substantial savings from means-testing it would be necessary to hit people with incomes around $40,000 a year or even lower. That is not what most people consider wealthy."

So long as we treat corporations as a black box ....

The corporate motives in trans border expansion need to be documented

Yes this is a shallow open science of agent motives
But where do we see this exposed by the academic egg heads of the non class based
Free range scientiacs

If indeed there are as pk modeled twenty years ago

Three states of global production

Local
Core periphery
Dispersion

Geared to changes in the cost of transport

If there are great advantages to cross border tax accounting and forex arbitrage

Plus heaven only knows other uneven local regs and rules
Dispersion of prices by bordered market segments etc etc etc

At least if this complexity is beyond modeling
We can note what the hell the MNC titans think they're doing !!!
Ten thousand stories
Each one
The true Confessions of a transgressive profiteer !!!

Micro foundations for KL macro ...look to Stigilitz et al

The era since the giants passed
Ie1980 to now
Has seen a large accumulation of new micro
This retro actively " founds "

The KL macro

We need to build models using this " Stigiltz Akerloff " micro

A new synthesis is possible

Dean gets dizzy fighting the Washington post

In a longer then perfect piece
Dean rebuts the post ed board on progressive political economy

He's like a panther in a field house cage full of sheep

There's so much to kill and too much to eat

He needs a magic sword

The notion of exploitation

The split of market income into earned and expropriated
The gist or better the core social mechanism

A de facto corporate administered " exploiters private taxing system "
on the gross earnings of the job class

A system we can transcend
by socializing most of the surplus now extracted privately

Essentially the system can function on a tiny fraction of the existing privatized surplus
Exploitation can be socially optimize
At least approximately
And the optimum is small compared to the present privatized hunk of the social surplus
....just enough to incentive the enterprisers
The agents of our dynamic  development of the production system

Leave wage streams be uncle !...The ever expanding transfer system needs to grab more of the social surplus

Yes we need to realize its always a patch work

A vat tax would be better then this payroll tax as a base for the transfer system

But a prog tax on surplus incomes would be even better

What is the surplus income stream in toto

Okay what about retro taxation
A wealth tax in disguise called a life time income tax
After a one time make up levy

Long as we over scimitar the 0.1 %
in the levy

A claw back levy makes for a great left populist demand

Recall left populism is just left social democracy without benefit
Of an education
In modern political economy ie  transfer systems plus  KL macro

The transfer system is historic social democracies enduring gift
KL macro the road not travelled out of keynesville center

Populism makes a great mass line
 Even now
Social democracy never penetrated the mass mind in any comprehensive way
Because the notion of a social surplus
Extracted by exploiters was not part of the inter class contract
Of  center right social democrat. civil pacifism
A wealth levy motivated by a popularly comprehended
Mass desire to retake the surplus not extracted since Reagan
Combined with
The return of the proceeds of the Reagan Moynihan pay roll robbery

Ziffle invokes the curse of Allende to damn the Donald

Yup Larry calls out the ghost of Rudi Dornbush
To pronounce the anathema

  Populist macro  gigs
" is doomed in the end "

Sure sure
It's all first act cheers
But

Come the second act  ?

restless easeless contortion

and by the middle of the third act ?
vicious boos rotten tomatoes

Final curtain
Like a infantry troop the audience as one
Storms the stage
Forcing  a bouquet of thorns into the leads mouth
and delivering
swollen lips  loose teeth and black eyes all around

You might not think the trump rise is adequate punishment for the Paul krugmans of planet earth ...

Well

If this horrid shock
As it becomes his daily nightmare
makes him continue to write
Like a complete egg headed idiot
 as it has so handsomely so  far

Hey
What could be more just

Clio is ever so cruel ..the Hegemonic nation screws itself even as it rampages

Alas the comeuppance must be directly felt by the plebs and proles
The cosmos may feel the pain but only thru deep empathic identification
More like the feeling will be contemptuous spite

" you goons brought this on yourselves "

  Trumpism triumphant


Take cheap solice in the liberal elite's torment
  Trump has forced them in a fit of impotent rage
to throw on
" the shirt of Nessus "

Let them burn in this ...
Drenched  tunic ....  Burn in the blood of the mudered centaur aka blue collar whitey

The Jeremiah bull frog chorus is mustering even as we quake at the rise of the Donald

Found a topic : the political economy of anti Trumpism or the hocus pocus of the Cosmo elite

First the Nassau terrier in fright chatter

"My own first instinct was to say that Trumponomics would quickly provoke an immediate economic crisis, but after a few hours’ reflection I decided that this was probably wrong. I’ll write more about this in the coming weeks, but a best guess is that .,,,,


there will be no immediate comeuppance."

Yikes he might succeed where Barry failed !!


Two other opening shots:

One by olive oil blanchette
The other by Larry Ziffle

Won't review them just
Laff
The scramble is on !

Look to a fad building
Worse then the Jeremiah bull frogging over early little bush ?

I'd count on it

Aim
misdirect the Donald like he's Polyphemus
And the cosmo mandarins
are the clever Greeks trapped in his cave

The great fear
Huge to down tax cuts plus
Arms build ups and no abatement of transfer payments
Well hell crew

The prick may just succeed !

Cooking each of them in his boom time cauldron

Nw depending how it's told
Reagan did just that
But little bush didn't

Owen paine fails cadre stress test " you won't have comrade paine to moo around at anymore " ..well sort of

Yup

I'm " ideologically " insolvent comrades

That is the verdict of the virtual gulag surveillance committee
Now holding court in my skull

I reviewed recent posts here
Applied the correct tests and the contraption that is ME
Failed the standards that are I's
The order from on high
Citizen paine
"Like a smart cow
Sit long and ruminate "

I must retreat into deeper darker sharper meme   states

A confederacy of dunces

Maybe trump will not go quackingly into the GOP hall of animatronic POTUS-'s

Maybe he will rogue it up once he gets used to his purple robe
A gulliver freed from the ten zillion   confining threads of.
Our dear  Belt way lilliput

The Carl Dunham in me hypes

" what a show "

Yes what a show
   that might be

Trumpism with Chinese characteristics

A Han Donald  ?

How ?

Comrades we better then most
 ought to grasp this essence

Closed systems too
have their realizations of basic trans institutional social contradictions
Might there be ...
Say
 Some Han avatar of milo Reno  incarnate as a red peasant main frame Maoist
Obscurely Developing  out there in the greater rural vastness
ready to morph into a national martyr
At the hands of some gang of pork fingered provincial cadre ?

A final ruthlessness
after great hesitation and a couple victories
Over a grudging permissiveness
Now add only
An   unsurpassable
 country wide  publicity ...?

When I see the word tensions I reach for my dialectic ..are these tensions contradictions

Put a wig and nose glasses  on a social contradiction and it plays like a tension



In polite company

http://www.worldbank.org/content/dam/Worldbank/document/China-2030-complete.pdf

China today peoples china
has a massive contradiction
between
Her urban and rural " pieces"

The Hukou, system, 
the lack of portability of pen- sion plans, 
weak labor market institutions,
 and inadequate job market information)
 the quality gap in public ser- vices available 
to rural and urban households has widened,
the “opportunity gap” between urban and rural areas has grown. 
Social tensions have ratcheted up 

 resulting in a growing number of pub- lic protests.
 Unresolved, these tensions 
could pose a threat to growth and stability in com- ing decades."

Yup

TENSIONS 
Aka antagonistic contradictions !!! 
In Mao speak 

 

 

 

Successive segments of the party - state   Policy paths
---since at least 1989  ---
have only sharpened this basic contradiction

Time to end these contradictions "peacefully " is running out

Think of Trumpism with Chinese characteristics

A " Maoist " face
Could bring spontaneous populism to a hearty roil
among the  left behind rural masses
And their migratory off spring
Open the city gates ?
Not enough !

The fully socialized equal opportunity and outcome
 tax and transfer system
must hook in universally
 no two china policy
No other china
Ending
   their rootless right less  " place "  in production
  in the city and on the coast

Smart commodities self selling

Trump could kick off a boom ..then what ! !

Why not
A huge top down tax cut and a unprecedented infra structure build out
plus a neo kold war weapons program

Not a prediction just one of his options

This is liberal wishful thinkng ..perhaps

".... prepare for the likelihood that Trump will move from attacking the most vulnerable to betraying the rural and white working people who turned out for him. "


" He won in part because he told them they had been betrayed by Democratic elites, and the Democrats did not succeed in refuting him. "

" But he has nothing for those voters except a vicious identity politics that cloaks standard right-wing tax-cutting, government-slashing, and regulation-gutting."

Really ?


I recall liberals missing the prospect of a  Reagan recovery too 

Off topic but I like this intoxicated prose line even if it's off course 


"  He told them they lived in a merciless world, and they agreed with him,
 but he has no mercy to bring. "


But here is its happy ending that has no guarantee to arrive in time to 
Rout this. Paul Bunyan sized
    milo minder binder 

"You do not have to forgive the votes for Trump, or excuse the reasons behind them, 
to understand  that, as ever, political majorities need allies,
 and Trump in time will prove to be a true friend to very few people."

Throw em all out ..every man jack and ass of em ..purge the party core now ! ! !

Rocket boy bob reich on the Dembo elite

" Democrats once represented the working class. 

But over the last three decades the party has been taken over by Washington-based fundraisers, bundlers, analysts, and pollsters 

The elite core has focused on raising big money from corporate and Wall Street executives, 

and getting votes from upper middle-class households in “swing” suburbs."

" While Republicans played the race card to get (the white {ed} ) working class to abandon the Democratic Party, 

the Democrats simultaneously abandoned the ( white {ed}) working class – clearing the way for Trump." 

"Democrats have occupied the White House for sixteen of the last twenty-four years, and for four of those years had control of both houses of congress. But in that time they failed to reverse the decline in working-class wages and jobs."

"Both Bill Clinton and Barack Obama ardently pushed for free trade agreements without providing millions of blue-collar workers who thereby lost their jobs means of getting new ones that paid at least as well."

"They stood by as corporations hammered trade unions, the backbone of the ....(white {rr} ) ...working class – failing to reform labor laws to impose meaningful penalties on companies that violate them, or help workers form unions with a simple up-or-down votes."

"The unsurprising result has been to shift political and economic power to big corporations and the wealthy, and to shaft the working class. That created an opening for demagoguery, in the form of Trump. "

"The pertinent question now is: "

Will we the rank and file remove these  big eared trumpista enablers from party control ?

The inner darkness of an elite liberal

"The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear."

Paul the laureate 

Has no "personal " reason to  prioritize the merely " economic " consequences
 of the Trump blitzkrieg ahead 
Of course not !

He can mull over the  Cruel  demise  
of the  flannel  pajama " identity prog " agenda 
With the prospect of a genuine  uncultivated "muddler in chief " like the Donald 

Know what A muddler   is ?

I just looked at one on sale at the liquor store where I cashier part time 

Well a muddler can be a simple stick 
But gins beauty 
Was 
Wooden handled pestle like device  
with a blockish head 
Faced up 
with lots of little  pyramid teeth ..for smashing ice cubes into a  ready to slide
 slurry  mash 

Yes brown proles beware 
Muddles are coming
With the trumptser- ization of Amerika 

But we  ice plebs  ?
Well 
Plebs  are cubes too my friends 
Some of us are bound to be slurry feed 

The Bogus banquet is now complete ...from Wallace to Reagan to Trump ...the final course has been served ....The Donald is blighted pleb headed wage white's dirty dessert

Pk "we are very probably looking at a global recession, with no end in sight. "

Rejected by wage white Amerika
Our Liberal elite thrashes about in a fit


And now
Imagines doomsday has struck

Okay

By electing the yank Burlesconi
Our dear
 white  pleb  class  nation
just en masse
jumped directly down deeper
 into the vast ever so slowly churning
econ con dumpster

But bless them
like mighty and blind Samson
they pulled the liberal Templars down with them

Random flash back

9/12 (and not a minute too soon)

No one's asking this, but I'll answer it anyway: Why didn't you, J.S. Paine, post any personal "reflections" on the 5th anniversaay of 9/11? Lord knows, everybody else did.

The answer: for the same reason I don't on the anniversary of the Deerfield massacre. The slaughter of the innocent, whether settlers' kids or cube farm functionaries, is a working hazard for those fortunate or unfortunate enough to be the empire's children. Yes they were innocent, but only of the knowlege of their own culpability. No, I won't celebrate -- and that's what this is: a maudlin serenade to the hardships of empire.

Father Smiff notices flags -- indeed, what mawkish poison. Even at its most sublime, the firefighters charging up those stairs, headed toward the top of a building about to come down to meet them, is not tragedy. Wrong genre. It's melodrama, and melodrama is best served house by house over the dinner table of a family, not on TV, like a tearful version of rockin' New Years Eve.

Tragedy is the unavoidable collision of two rights, not the horror of blowback for a series of chronic unending wrongs. But wasn't the slaughter indiscriminate? Well, not altogether -- no more so than the slaughter of Dresden, or Hiroshima. These were real people working in ignorance inside evil symbols -- like symbiotes in Moby Dick's belly.

Trouble is, we're in there somewhere too.

On retirement net pay out ...Use tax rate progressivity not pay out regressivity

If the retirement payment system looks too generous to higher incomes
Simply increase the higher income tax rate
And
Tax all income

The problem is segregating the retirement budget
Payments from the retirement system and FICA taxes on payroll

This is pure hocus pocus

11.2 percent of jobs to 6.7 percent ... The path down of Private sector unions in post kold war Amerika

Yes nick you are a thistle head

"There is a very big problem with the New Keynesian Macro model. It simply assumes, with zero justification for this additional (hidden) assumption, that agents in the model expect an automatic tendency towards full employment. ..,,,,precisely this question that Keynes wrote the General Theory to address."



Just for fun 

Here's a  Rowe  logic toy of recent devising 

Motto:
" Simplify massively, to clear the decks of anything that is not required for me to make my points." 

Model:

" Large number of identical infinitely-lived self-employed agents who produce and consume haircuts (the only good). 

So 

wages and prices are the same thing, 
and output, consumption, and employment are the same thing. 

All agents set the same price (which may be sticky or flexible).


 The central banks sets a rate of interest (somehow, and this is a question that must and will be answered)."


" To make it even simpler, 
assume the central bank indexes the nominal interest rate to the inflation rate,
 so it sets a real rate of interest. 
No shocks, nothing fundamental ever changes,
 and full employment equilibrium is 100 per period."

Some ..a few ..get ahead sooner then others ..but by generations or a decade ?

The last ranks must advance how fast ?
Stretch back how far
behind the front ranks
As the the people tramp forward together past the posts of material progress ?

how many posts how many income levels
 ought the last ranks march
Behind the peoples vanguards ?

Lave men, swiye ate

Wash your hands ...dry them in the dirt

Implicit motto
Of uncle Slam's
Submerging markets
  aide and development policy

Haiti needs two and a half million new jobs ...enter Caracol industrial park and the Clinton brand

" Possibly the most enduring criticism of the Clinton Foundation's work in Haiti
 stems from its signature project, a garment factory known as the Caracol Industrial Park.

The foundation, working with the Clinton State Department, helped arrange a US-subsidised deal with the Haitian government to build the $300m factory complex in 2012.

Several hundred farmers were evicted from their land to make way for the 600-acre manufacturing site, which produces clothes for retailers such as Old Navy, Walmart and Target.

South Korean textile giant Sae-A Trading Co, which is the main employer at the facility, subsequently donated between $50,000 to $100,000 to the Clinton Foundation.

Mr Clinton declared 100,000 jobs would be created "in short order".

But the Caracol Industrial Park has created only 8,000 jobs."

Some history

" the early 1980s, the garment sector in Haiti was a significant source of employment.  But since then, employment in the sector had dropped dramatically due to embargoes, instability, and lack of investment. " 

Today there are 35 k  garment jobs in Haiti .....

Potential ?

Trust has a golden mean ?

"More trustworthy participants, because they are overly-trusting, earn about 20% less on average in our experiment; on the other hand, more untrustworthy participants, because they are unwilling to expose themselves to social risk, also forgo about 20% of earnings compared to those with more moderate trust and trustworthiness "


Assume

we trust about as much as we are trustworthy 

Then we better believe there are some untrustworthy types out there
So make yourself by habit one who
trusts but verifies 

But know thyself as no saint 
Know thou shalt be 
trust worthy ...mostly 

The untrustworthy other gets personified as what

The crouching chinaman ?
the Jew in a sharp suit  ?
the guy with the mustache and a dragon  tattoo ?