German auto manufacturers like BMW and Volkswagen have, in other words, shown that they can be profitable while their workers make extremely good wages and benefits and have a voice in decisions that affect them. But they’ve also shown that they won’t do it if someone doesn’t make them. That’s why we need laws that level the playing field for American workers—and how we know, despite what Republicans tell us, that those laws won’t tank our economy.

Worth studying.

But there might still be another possibility — something we couldn’t really imagine for ourselves until the digital era. As a pioneer of virtual reality, Jaron Lanier, recently pointed out, we no longer need to make stuff in order to make money. We can instead exchange information-based products.

We start by accepting that food and shelter are basic human rights. The work we do — the value we create — is for the rest of what we want: the stuff that makes life fun, meaningful, and purposeful.

This sort of work isn’t so much employment as it is creative activity. Unlike Industrial Age employment, digital production can be done from the home, independently, and even in a peer-to-peer fashion without going through big corporations. We can make games for each other, write books, solve problems, educate and inspire one another — all through bits instead of stuff. And we can pay one another using the same money we use to buy real stuff.

Strange. Compelling. Strangpelling.

The question we have to begin to ask ourselves is not how do we employ all the people who are rendered obsolete by technology, but how can we organize a society around something other than employment? Might the spirit of enterprise we currently associate with “career” be shifted to something entirely more collaborative, purposeful, and even meaningful?

Instead, we are attempting to use the logic of a scarce marketplace to negotiate things that are actually in abundance. What we lack is not employment, but a way of fairly distributing the bounty we have generated through our technologies, and a way of creating meaning in a world that has already produced far too much stuff.

The communist answer to this question was just to distribute everything evenly. But that sapped motivation and never quite worked as advertised. The opposite, libertarian answer (and the way we seem to be going right now) would be to let those who can’t capitalize on the bounty simply suffer. Cut social services along with their jobs, and hope they fade into the distance.

But there might still be another possibility — something we couldn’t really imagine for ourselves until the digital era. As a pioneer of virtual reality, Jaron Lanier, recently pointed out, we no longer need to make stuff in order to make money. We can instead exchange information-based products.

HT @sgharms.

It seems there are two kinds of people—those who regard America as something like a family and those who regard it as a collection of individuals unrelated to each other and even in competition with each other.

Of course, a single person might be a mixture of both—sometimes leaning one way and sometimes leaning the other way.  But many people seem locked into one mindset or the other and whichever it is determines their attitudes toward the disadvantaged and less fortunate among us.

People who look at everyone around them, anywhere they go in America, as a family member tend to have compassion on the socially disadvantaged and wish a better life for them.  They think it’s right for our American family to help them get up on their feet; “pulling themselves up by their own bootstraps” isn’t a family way of thinking about the less fortunate.

“Family-oriented” people tend to think most of the poor are deserving of special help, even through spreading the family’s wealth around.  These people look to the common good of the whole family and seek ways to move toward true equality of all.

Then there are people who look at everyone around them, anywhere they go in America, as individuals not related to themselves (except, of course, their own blood or maybe shirttail relatives).  They view America as a whole not as a family but as an aggregate of individuals competing with each other.  Of course, many of these people believe viewing America that way benefits all as everyone, hopefully, strives to better themselves.

The problem is that people in this second category tend to be blind to oppression–social causes of disadvantage and poverty.  To them, all or most of the poor choose poverty and are therefore undeserving of anything.

This is excellent.

Pure comedy.

But to understand just how non-capitalistic Christianity is supposed to be we turn to the first chapter after the gospels, Acts, which describes the events of the early church. Chapters 2 and 4 state that all “the believers were together and had everything in common. Selling their possessions and goods, they gave to anyone as he had need… No one claimed that any of his possessions was his own, but they shared everything they had…. There were no needy persons among them. From time to time those who owned lands or houses sold them, brought the money from the sales and put it at the apostles feet, and it was distributed to anyone as he had need.”

Now folks, that’s outright socialism of the type described millennia later by Marx – who likely got the general idea from the gospels.

The pro-capitalist Christians who are aware of these passages wave them away even though it is the only explicit description of Christian economics in the Bible.

This is the saddest infographic I’ve seen in a long time.

Look at the tar roofs covering millions of American buildings. They absorb huge amounts of heat when it’s hot. And they require more air conditioning to cool the rooms. Mayor Bloomberg started a program to hire and train young people to paint New York’s roofs white. A big percentage of the kids have been able to parlay this simple work into higher-skilled training programs or energy-related retrofit jobs. (And, believe it or not, painting the roof white can lower the electricity use by 20 percent on a hot day!)

Interesting?

Not surprisingly, Wall Street and the top of corporate America are doing extremely well as of June 2011. For example, in Q1 of 2011, America’s top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries. Somewhere around 40% of the profits in the S&P 500 come from overseas and stay overseas, with about half of these 500 top corporations having their headquarters in tax havens. If the corporations don’t repatriate their profits, they pay no U.S. taxes. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%, most Americans struggled. In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced. Major U.S. corporations are currently lobbying to have another “tax-repatriation” window like that in 2004 where they can bring back corporate profits at a 5.25% tax rate versus the usual 35% US corporate tax rate. Ordinary working citizens with the lowest incomes are taxed at 10%.

I could go on and on, but the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.

Chilling.

Habeas Data.

I hate when data gets in the way of a good narrative.

How about the example of the one successful country full of smart people? Among rich nations, the only example the magazine could find is the Netherlands. They have “a higher ratio of pension assets to GDP than any other country”, with 100% funding, basically, for the actuarially predicted costs. They retire younger than Americans (age 62.1 versus 65.5). Part of the magic is that they don’t promise unlimited inflation indexing. If their country gets poorer, the pain will be shared by the working and non-working alike. The same is true in Sweden, Germany, and Japan. But mostly the Dutch have deferred consumption. Overall, the countries that have at least some plan and hope for paying what they’ve promised are the Netherlands, Switzerland, Sweden, Australia, and Canada (this doesn’t include developing countries such as China, which has $3 trillion in cash and hasn’t made any long-term promises).

A 2008 study of 24 leading economies by the Organization of Economic Cooperation and Development (OECD) concludes that, “Taxation is most progressively distributed in the United States, probably reflecting the greater role played there by refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit. . . . Taxes tend to be least progressive in the Nordic countries (notably, Sweden), France and Switzerland.”

The OECD study—titled “Growing Unequal?”—also found that the ratio of taxes paid to income received by the top 10% was by far the highest in the U.S., at 1.35, compared to 1.1 for France, 1.07 for Germany, 1.01 for Japan and 1.0 for Sweden (i.e., the top decile’s share of Swedish taxes is the same as their share of income).

A second fatal flaw is that the large share of income reported by the upper 1% is largely a consequence of lower tax rates. In a 2010 paper on top incomes co-authored with Anthony Atkinson of Nuffield College, Messrs. Piketty and Saez note that “higher top marginal tax rates can reduce top reported earnings.” They say “all studies” agree that higher “top marginal tax rates do seem to negatively affect top income shares.”

I am hesitant, but willing, to accept this narrative. I wonder what someone versed in these matters would have to say about the study referenced.

It costs 1.62 cents to mint and distribute penny.  Really.  And this isn’t anything new.  Since 2006, it’s cost slightly more to produce a penny than the one cent it is worth, leading to a loss of of about $20 million dollars, total, in 2009.  The main culprit?  The metals used to make it.  A penny is 97.5% zinc and 2.5% copper, and as the price of these materials have gone up, so has the cost to produce the coin.

Kill the penny.

New research led by economists at the University of Warwick reveals that medieval England was not only far more prosperous than previously believed, it also actually boasted an average income that would be more than double the average per capita income of the world’s poorest nations today.

Worth looking into…

However, the evolution of society towards increased specialisation and exchange is not unidirectional. History is littered with examples of people who moved back towards self-sufficiency as they grew less prosperous. Unable to find trading partners to do mutual service with, they had to serve themselves and that made them poorer.

Two examples, both from The Rational Optimist:

The economist Vernon Smith, in his memoirs, recalls how in the Depression his family moved in the 1930s from Wichita, Kansas, to a farm when his father was laid off as a machinist, because ‘we could at least grow most of our own food and participate in a subsistence economy.’

And the end of the Roman empire.

As Roman rule disintegrated, at least in the west, money lending at interest stopped and coins ceased to circulate so freely. In the Dark Ages that followed, because free trade became impossible, cities shrank, markets atrophied, merchants disappeared, literacy declined and – crudely speaking – once Goth, Hun and Vandal plundering had run its course, everybody had to go back to being self-sufficient again. Europe de-urbanised. Even Rome and Constantinople fell to a fraction of their former populations. Trade with Egypt and India largely dried up, especially once the Arabs took control of Alexandria, so that not only did oriental imports such as papyrus, spices and silk cease to appear, but those export-oriented plantations in Campania became the plots of subsistence farmers instead. In that sense, the decline of the Roman empire turned consumer traders back into subsistence peasants. The Dark Ages were a massive experiment in the back-to-the-land hippy lifestyle (without the trust fund): you ground your own corn, sheared your own sheep, cured your own leather and cut your own wood. Any pathetic surplus you generated was confiscated to support a monk, or maybe you could occasionally sell something to buy a metal tool off a part-time blacksmith. Otherwise, subsistence replaced specialisation.

No big developed country has come out of the global recession looking stronger than Germany has. The economy minister, Rainer Brüderle, boasts of an “XL upswing”. Exports are booming and unemployment is expected to fall to levels last seen in the early 1990s. The government is a stable, though sometimes fractious, coalition of three mainstream parties. The shrillest protest is aimed at a huge new railway project in Stuttgart. Amid the truculence and turmoil around it, Germany appears an oasis of tranquillity.

Heh, Europe in shambles with the exception of Germany. Too funny.