Tag: Business News
Many people might think that the country’s problems stem from the fact that too much money has been going to the very rich. Over the last three decades, the richest one percent of the population has increased its share of national income by almost 10 percentage points (Excel spreadsheet). This comes to $1.5 trillion a year, or as the deficit hawks are fond of saying, $90 trillion over the next 75 years.
To put this in context, the size of this upward redistribution to the richest one percent over the last three decades is roughly large enough to double the income of all the households in the bottom half of the income distribution. The upward redistribution amounts to an average of more than 1.2 million dollars a year for each of the families in the richest one percent of the population.
And this upward redistribution was brought about by deliberate policy (continue reading…)
Over breakfast with a client who had a $90 million fortune, I asked a hypothetical question: would it decrease your motivation as an entrepreneur if it were understood that each year people with big incomes would be celebrated and, as if at a potlatch, would give back to the community all but some small multiple of the average family income?
After a forkful of Spanish omelette, he told me, “no, it wouldn’t decrease my motivation or my business creativity: what other game would I play?”
As my client knew, a potlatch was a Native American custom in the Northwest, a feast at which prosperous members of the community sought prestige not by having wealth, but by giving it away.
Let’s plug in figures for a conservative yield on my client’s fortune and for the average family income. Even allowing no deductions at all, he would be giving away the equivalent of an income tax even higher than the 91%* charged under Eisenhower for the biggest incomes. (It’s now down to 35% on whatever portion is taxable after the accountants get done.)
The sample size of my breakfast survey was just one, and the respondent was unusual: as a philanthropist, he was already giving some of his fortune away and he had a broad worldview. He took seriously the claim that, above a certain level, money is only a way keeping score (continue reading…)
Rejecting the gloom and that which so many corporate antics inspire, business writers of late have taken to praising the companies that pursue purpose, articulate values and see for themselves higher values than just boosting the bottom line. And we admire those who embrace corporate social responsibility (CSR) and attempt to give something back to their communities through volunteering and charitable donations. I’m all for this — though there will always be a part of me that still wonders that we celebrate those who simply try not to be evil.
But it seems to me that before we start celebrating all these added extras, we should require of our corporations that they do one basic thing: they should pay their taxes (continue reading…)
We think small when it comes to women. Micro, to be exact.
When I first started reporting on women entrepreneurs in conflict and post-conflict zones in 2005, nearly everyone, from IMF officials in their offices to development workers in the field, told me the only women I would find would be “selling cheese by the side of the road.” Women, I was told again and again, did not own the kind of growing businesses that created jobs and economic growth. This, it seemed, was strictly the purview of men. One customs official even joked that they were not sure why I had taken a week-long trip to Afghanistan to interview businesswomen when surely my interviews would all fit into the space of a single afternoon.
What I found when I began reporting, however, was that even in the poorest and most traditional countries, women owned businesses that went well beyond the micro (continue reading…)
Seven years ago a judge in California ruled that women suing Wal-Mart for sex discrimination could move forward as a class. That meant the women with various claims wouldn’t have to go it alone, each with a separate lawyer and separate expenses. Essentially what the judge said is that the six women who filed the lawsuit can represent a whole group of women who might have similar complaints — all 1.6 million of them.
Wal-Mart appealed all the way to the Supreme Court (continue reading…)
There was once a time when the biggest defenders of Meredith Whitney’s over the top, doomsday prediction that 2011 would be the year that municipal bonds defaulted in cataclysmic proportions were to be found at a certain business television network headquartered in New Jersey looking to have her appear on-air in order to goose ratings.
No longer. Whitney’s fan base seems to have spread to certain elements of the conservative movement, which appears content to use her increasingly absurd claims of imminent municipal Armageddon to further its agenda of quashing the power of government unions, and the enormous costs they impose on state and local budgets through the bankruptcy courts.
All of which wouldn’t be so bad if Whitney’s fans on the right had any idea a) that bankruptcy is a costly process for taxpayers, the very people they are allegedly trying to help with their municipal-union busting; and b) how they are playing right into the hands of the left, which is also using Whitney’s “analysis” to promote a federal bailout of ailing states and cities that are allegedly heading toward bankruptcy.
Yet, maybe the oddest thing about the conservative infatuation with Whitney’s prediction, seen recently in publications like The Daily Caller, and Reason is that it ignores the progress made by conservatives like Governors Scott Walker in Wisconsin, Chris Christie in New Jersey, and the former liberal and turned born-again right wing budget cutter, Andrew Cuomo in New York, who have pushed for budget cuts over union concessions in ways that should make investors in the muni bonds from these states jump for joy.
What all of them have proved is that as bad as things are at the state and city level, Armageddon hasn’t yet arrived, and probably wont arrive for some time if state and local governments do the obvious: start cutting their budgets as most are doing now. I never thought I would be saying this, but the lefty-dream of another government stimulus package, with President Obama signing over mega checks to bailout out states so they can bail out cities and their union cronies may well be shattered by son of super liberal Mario Cuomo.
But you wont hear that from certain elements of the right. Instead, people like former House Speaker and possibly Republican Presidential candidate Newt Gingrich are floating stupid ideas like that states should be able to declare bankruptcy in order to squeeze concessions from public-sector unions, particularly on costly guaranteed pension plans and other perks (continue reading…)
Over 4 million people moved their money from Wall Street Banks in 2010, according to Sara Ackerman, project coordinator for Move Your Money.
I bought into the “Move Your Money” movement the day that Arianna Huffington and some associates founded the concept. I had already been doing it for years.
My money is in non-Wall Street banks that have branches, or headquartered, in my home city of Richmond, Kentucky.
Long ago, I learned the importance of having a personal relationship with my banker. I don’t want to call an 800 number and talk to a “customer service” representative in India (continue reading…)
In the sorting out of the wreckage after Japan’s earthquake and tsunami, many Americans have begun paying more attention to a phrase they had barely known — “supply chains.”
American manufacturing companies no longer make most of the parts that they use in production. Rather, both U.S. companies and foreign ones that produce for the U.S. market have long and complex chains of suppliers the world over, many of them in Japan (continue reading…)
In 1983 NY hotel-chain-owning billionaire Leona Helmsley said, “We don’t pay taxes. Only the little people pay taxes…” As our country migrates from democracy to plutocracy, this more and more appears to be official policy. Again and again we see tax cuts for the wealthy few, tax breaks and subsidies for the big corporations that operate as fronts for those wealthy few, and budget cuts for the things We, the People (government) do to empower and protect each other. Just a few weeks ago we watched as an extension of the Bush tax cuts and a huge cut in the estate tax rate was pushed through (continue reading…)
If you haven’t achieved the success you thought you would by now, blame failure — or, rather, the lack of it.
Confused? Don’t be. The surprising truth about success is this: it often is the byproduct of repeated failures. Take NBA legend Michael Jordan, widely regarded as the best basketball player of his generation. Most fans only remember Jordan as the unstoppable force that powered the Chicago Bulls to six NBA titles (continue reading…)
It was a privilege to participate in the IMF conference devoted to rethinking policy frameworks in the wake of the crisis. Highly encouraging was the openness of the discussion, the range of views, the willingness to question orthodoxy, and the posture of humility.
One gets the impression that the crisis has triggered a response that it should trigger, and we have embarked on a path of rethinking conceptual frameworks and policy choices in a way that will contribute to the stability of the system.
That said, the good news is that we recognize that in finance and parts of macroeconomics the models or frameworks are incomplete. That represents a challenge to the academic community. But it also means that, in the short run, participants and regulators will be operating with incomplete models (continue reading…)
Outsourcing Tragedy On the 100th Anniversary of Triangle Shirtwaist Workers Are Still Dying in Garment Factory Fires
One hundred years ago today, a fire broke out at the Triangle Shirtwaist factory in lower Manhattan. After locked doors made flight impossible, many workers leapt to their deaths to escape the flames. One hundred and forty-six people died, in a tragedy that helped catalyze a national movement for workplace reform.
Unfortunately, we do not need to look back a hundred years to contemplate the horror of garment workers falling from the high floors of a burning factory. The last such nightmare befell workers barely 100 days ago, on December 14, when thirty workers were killed and more than a hundred injured at a factory producing for Kohl’s, JC Penney, Target, Wrangler, Phillips-Van Heusen, Oshkosh, Gap and others.
The sad irony on this centennial of the Triangle tragedy is that the abusive conditions, poverty wages and shoddy garment industry safety practices that unions and social reformers decried in 1911 have not been eliminated (continue reading…)
I wonder if other economic observers were shaken to the extent I was by recent comments by seemingly disparate actors, William Dudley, president of the New York Fed, and President Obama. The former sought to downplay the extent of price inflation by explaining that as is true with iPad devices and other consumer electronics, we are often receiving more for our money today than in the past.
“Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful,” he said referring to Apple Inc’s (AAPL.O) latest handheld tablet computer hitting stories on Friday.
“You have to look at the prices of all things,” he said.
The latter, referred to cars getting eight or ten MPG as having poor fuel economy.
When our policy-makers are out of touch with economic reality to this extent and not even embarrassed about it, it’s hard to be confident about our economic future. Mr (continue reading…)
If you’re not happy with the way the U.S. economy is being run right now, you’ve been pretty much stuck talking to leftists to get any serious in-depth dissidence. With the exception of a few distinguished rightist critics like Paul Craig Roberts, a former Reagan appointee at the Treasury Department, most people who do hard-hitting across-the-board criticism of our present variety of capitalism are liberals and beyond. So if pink isn’t your political color, you’re pretty much stuck with narrow-bore criticism of the recent financial crisis–most of which comes down to “people were stupid and crooked.”
Thus it is with great pleasure that I review Ha-Joon Chang’s new book 23 Things They Don’t Tell You About Capitalism (continue reading…)
Remembering Women’s History Month and the Triangle Shirtwaist Fire, New Deal 2.0 tells the surprising story of how women became citizens — and how their economic lives have evolved along with their rights. Fatima Goss Graves shines a light on how the wage gap undermines our meritocracy ideals, and why the class action suit against Wal-Mart must go forward.
No matter how available wage data is sliced and diced, a single truth remains: a wage gap exists between male and female workers. On average, full-time female workers make 23 percent less than male full-time workers. And for women of color, the gap in wages is even larger (continue reading…)
All small businesses are not the same. Until this is registered and embraced by our legislators, this country will not succeed in its efforts to promote economic growth through innovation or unleash our full capacity to compete globally.
As a participant in Treasury’s Access to Capital Conference held Tuesday in Washington D.C., I was invited to speak on a panel about fostering growth and innovation for high growth small businesses, with a specific focus on the role that debt can play. I was appreciative of the opportunity to represent the needs of truly innovative companies that contribute substantially to U.S. GDP, U.S (continue reading…)
Professor Elizabeth Warren, the architect of the Consumer Financial Protection Bureau (CFPB), was in the press often this week letting the public know about the progress of “standing up” the new consumer protection agency. Her opponents took notice, and posted a “Fact Check” purporting to find errors in one of her interviews from earlier in the week.
But their “Fact Check” needs a fact check. It’s a political spin job, not a policy paper.
In its short length, it manages to make several factual mistakes while also completely missing the point (continue reading…)
A little over a month ago my husband Rich Silverstein and I launched our One Job For America initiative on the Huffington Post. 600 comments appeared at the time which indicates to me that regardless of what people thought of our idea it’s one that provoked a good deal of conversation. Since then we’ve had over 10,000 visitors to our One Job For America website. And to date nearly 160 businesses from all over the country have made a pledge to create one new job (continue reading…)
I have been receiving lots of emails with information which will help to explain the present situation of Nobel Peace Prize winners Muhammad Yunus and the Grameen Bank. Supporters of Microfinance around the world stand in support of Dr. Yunus and are doing their best to help resolve this situation. Organizations such as Grameen Foundation, Grameen America, Accion, Women’s World Banking, The Microcredit Summit, Kiva, and others, have been working hard getting loans to those in need, which is what Dr Yunus has been working so very hard to do for most of his life.
As Dr Yunus always says, “I am not the hero, the women are the heroes” (continue reading…)
Sometimes you learn more from your failures than your successes. One of the most painful times occurred in early 2000. My goal was to build the ultimate state-of-the-art baseball stadium in the entertainment capital of the world, Las Vegas. At the time, Mandalay baseball owned five professional minor league franchises across the country, including single-A, double-A, and triple-A teams (continue reading…)
It is a beautiful spring day in Washington. This is a nice respite from the horrors taking place in Japan and the ever-growing nuttiness of D.C. politics. Enjoying the weather provides a nice alternative to listening to the news or reading the newspaper.
The flood of nonsense in the traditional news outlets just continues to grow (continue reading…)
Those people over at Standard & Poors spoil all the fun. Their periodic research reports on the performance of mutual funds routinely show the majority of actively managed mutual funds underperform the benchmark indexes the fund managers are so handsomely paid to beat. As if that indignity was not enough, twice a year they publish the “S&P Persistence Scorecard.” It answers the question every active fund manager fears: Does past performance matter?
We all know that “past performance is not an indicator of future performance”, but the financial media and the securities industry work seamlessly to convince us this is not true. Here’s what I mean:
CNBC has “fund screener” on its web page. (continue reading…)
Despite being one of the most pressing policy choices facing America, and despite having been one of the biggest controversies in the last, oh, 400 years of economic history, free trade rarely gets a real debate in this country. For the most part, its superiority is just assumed, and the word “protectionist” is treated like, say, “fascist”: something just obviously, axiomatically bad and requiring no serious thought.
So it is gratifying to see economist Uwe Reinhardt of the New York Times and Princeton University attempt to engage in a real debate on the issue.
He is a free trader (continue reading…)
Sub-prime mortgages still plague the housing market. Real estate watch-dog Housing Wire, citing statistics compiled by Realty Trak, recently reported that “Lenders filed a record 3.8 million foreclosures in 2010, up 2% from 2009 and an increase of 23% from 2008.” But 2011, they said, “could be even worse.”
As the government ponders penalties, the banks and lenders continue to seek a scapegoat. In a twist of logic comparable to the man who kills his parents and then pleads for mercy as an orphan, the big banks, whose greed and reckless lending brought us the crash of 2008-2009, are now attempting to wiggle out of responsibility by casting themselves as the victims, not the home buyers who were duped.
On March 3, 2011 the New York Times reported that attorneys for the banks claim that helping homeowners facing default is “like taking money that should be paid to the Treasury and using it for an unappropriated social program.” And the Bank of America, the nation’s largest mortgage servicer, “is already readying what will be among the industry’s main arguments: that it is unfair to reward homeowners who are delinquent or underwater but cannot point to specific errors in their case” These statements echo the rant of financial commentator Rick Santelli who blamed the victims (continue reading…)