Tag Archive for 'Crony Capitalism'

Apple And Google Conspire to Suppress Wages

The article, and I do suggest reading the whole thing, covers the lawsuit against Apple, Google and others for conspiring to keep wages in Silicon Valley down. An excerpt:

What’s galling about the emails is that they come from executives who, on any other day, praise the wonders of the free market, competition, and its ability to set fair prices. Yet in private, when it comes to their own companies, they avoid competing for staff and pursue policies that artificially distort the market to ensure that their most valuable assets — the people who actually create the products that generate Apple and Google’s returns — get paid as little as possible.

At the same time the executives of these large politically connected firms are suppressing wages, they are also lobbying for more immigration.

The original article: Apple And Google Recruitment Emails In Lawsuit – Business Insider.

Income Inequality Matters

Roger Koppl in a nicely done piece.

I should memorize this paragraph for the next dinner party:

Liberal political theory tells us to expect that sort of thing as a sort of disease to which the body politic is subject under representative democracy. Our presumption, then, should be that much of the inequality of any epoch is produced by tariffs, licensing restrictions, bailouts, and other specific acts of governments. Most of the time the game is rigged more or less. (The trick of constitutional design is to minimize this evil bathwater without tossing out freedom or democracy.) The more a society’s income distribution is determined by politics and not markets, the more it will be skewed away from whatever pattern would emerge in a less fettered market economy. And in general, that skew will be toward greater inequality. As the political component grows, we can expect power to be concentrated in fewer and fewer hands and income distribution be more and more unequal. If political power is growing, we should strongly suspect that some of the rich are using the state to squeeze money from most of the poor.

My friends on the left keep thinking it’s all about the people in charge. They don’t seem to be able to grasp the notion that it is the system they really should be complaining about and working to change.

 

The Grumpy Economist: Fiscal cronyism

The Grumpy Economist: Fiscal cronyism.

Read the whole thing. Well, maybe not, if you’re planning on having a good weekend.

Revolving door

The Grumpy Economist: Revolving door.

The Instapundit recommends tax rates of 50% on any income over the salary of the last government job.

Since I am on the outside of all this deal making and have to, you know, actually make my customers happy, I get pissed at this stuff. Members of both Team Coke and Team Pepsi do this shit.

Cut welfare to sports

Cut welfare to sports.

I was aware of sports team owners being able to depreciate their player’s contracts and deduct the salaries as an operating expense, since Mrs. White Rock used to work in accounting at a local professional sports team. But you really need to go read the whole article to get a sense of the nonsense of pro sports subsidies.

The article also touches on college sports.

Gaahhh!

Update: I want it understood that when the author of the article says that tax exempt stadium bonds cost the treasury money he’s wrong, but it doesn’t change his overall point by much. One industry should not be favored over another. And pro sports seems to be a particularly bad industry to choose to subsidize if public policy goals at to help/grow the middle class.

Don’t Listen to What They Say

Watch what they do.

Warren Buffet helping others avoid the increase in the estate tax.

I don’t understand the status of this guy. He’s always just talking his book.

Dinocrat: Taxes and behavior

Dinocrat: Taxes and behavior.

Unfuckingbelievable. Well, no it’s really not so unbelievable. It is just so typical of our ruling elites.

The Democrats and Republicans

Further thoughts on the lines highlighted in the post below linking to The Grumpy Economist, specifically:

He who writes the regulations will make a lot of money. He who does not will lose.

Everyone I know that is a strong supporter of either party has an economic interest in “their” party winning an election. Not an economic interest in the sense that one of the party’s positions will allow for greater overall growth in the economy, but rather in the sense that their actual living is tied directly to the success of one of the parties or a specific piece of legislation.

I know of many people whose living is tied to our current over regulated health care system. When these people describe to me their customers and how they service them, you can see their whole business crumbling rapidly if there were free market in the provision of health care services. Many of the high paying jobs in health care exist solely because of the crazy legal and regulatory environment in that industry. I know many people that work on large government construction projects, either in designing them or the actual construction. I know real estate types that begin discussion of new projects by talking about whether or not the project will meet the criteria for government financing or tax relief. I know people that don’t make hardly anything, but their wife or husband work for the government in some capacity. That wife or husband will have a nice fat government pension at the end of their career. Many lawyers and CPA’s would simply be working in other fields if not for enabling legislation and regulation.

Admittedly, many of us are on the receiving end of government largess. My daughter, the Ace, after attending Catholic schools for which we paid, is now a student at State U. We are paying less for tuition, room and board than we paid for Catholic high school tuition. Since State U is an SEC school, she’s become a sports fan. What do SEC sports have to do with quality education? Big State U sports programs are welfare for the middle class. Subsidized tuition at State U is welfare for the middle class. There is the mortgage tax dodge, etc. The list of government programs refunding a portion of our tax dollars is long. All of which is nothing but hay and a barn for horses.

My family’s income is not tied to a particular party. We are not involved in contracting with the government. We will not have a defined benefit pension from the state. We have none of these things. We especially don’t have any influence. I will not have the opportunity to write regulations and make a lot of money off of that experience. I look at the U.S. government’s debt, and the unfunded liabilities of state and local government pensions. (Earlier this week I learned that $1 trillion translates into approximately $9,000 per U.S. household.) With the stated debt of the U.S. government at $16 trillion (with no accounting of the off balance sheet liabilities of medicare, medicaid and social security) and unfunded local government pension liabilities over $4 trillion, the Ace and the Deuce will be starting their adult lives off with a $180,00 tax burden for money that has already been spent or promised to others. These figures leave me very pessimistic about the future for my children. I don’t see a pleasant and/or peaceful solution to this problem; especially if the government continues to tighten it’s regulatory control over government activity. The only way out is through growth, and the prospects of that are not wonderful these days.

Neither the Democrats or Republicans are offering a serious solution to these problems. Their supporters appear to be only interested in their short term gain. There doesn’t seem to be much hope that any of this will change for the better in the near term.

My coworker told me I should be happy about the election outcome, as we will now have a national health care system. But this is the same guy that has never read a word of Hayek. His faith in the federal government is unshakable.

Yes, it is somewhat easier to be optimistic when looking backward, but right now looking to the future really depresses me.

I need to go back to looking for weird stories out of Florida to improve my mood.

I am of like mind

The Grumpy Economist: Predictions.

Advice? If you run a business, get a lot of lawyers and lobbysists. He who writes the regulations will make a lot of money. He who does not will lose.  Make sure you make the right political contributions and don’t say anything critical of those in power. You will need a discretionary waiver of something, and these rules are so huge and so vague, the regulators can do what they want with you. Don’t be the one to get “crucified” (EPA). We live in the crony-capitalist system that Luigi Zingales describes so well. Live with it. Political freedom requires economic freedom, taught us Milton Friedman. You don’t have the latter, don’t expect the former.

Italics mine.

The problem for so many of us who work in small businesses is that we have no resources available to influence the regulations. We can barely pay the rent most months. Hiring lobbyists is out of the question. We can only try to adjust to the problems coming down the pike.