Ecomonics, Finance, & Business Feed

The Villain

When Trump named Carl Icahn as a chief advisor, I sat at my office desk and wept openly, for Icahn is the villain who laid waste to the economy of my hometown.  Now a new book details how Icahn did the same to Lancaster, Ohio. Here is a review of the book, on Slate.

And the article's conclusion reveals the sad state of affairs in US and the puzzle of many of us who grew up in this era for why our fellow citizens didn't learn the same lessons we did:

When push came to shove, however, 59 percent of Fairfield County voters voted for Trump. Carl Icahn, the billionaire financial buccaneer who opened season on Anchor Hocking, is one of Trump’s key economic advisers, and Stephen Feinberg, founder of Cerberus Capital Management—one of the firms that gutted the company to line its own pockets—is another. Many of the town’s residents, marinating in conservative cable news, remain in deep denial about what caused the decay of the local economy and how bad it’s become. “Their pro-business bias blinded them,” Alexander writes, “to how … Cerberus picked their pockets.” But not quite all of them. When Alexander asks Eric Brown, the head of the Major Crimes Unit, what happened to destroy the “social contract” in Lancaster, the policeman responds, “Corporate America is what happened.” No one can blame him for crying about that.


Will on the Carrier Deal

George Will continues the free market critique of Trump's carrier deal with a column entitled "Trump’s Carrier deal is the opposite of conservatism."  An excerpt:

When, speaking at the Carrier plant, Vice President-elect Mike Pence said, “The free market has been sorting it out and America’s been losing,” Donald Trump chimed in, “Every time, every time.” When Republican leaders denounce the free market as consistently harmful to Americans, they are repudiating almost everything conservatism has affirmed: Edmund Burke taught that respect for a free society’s spontaneous order would immunize politics from ruinous overreaching — from the hubris of believing that we have the information and power to order society by political willfulness.


Order v. Personality

Evan McMullin makes important points in his op-ed in the NYTimes pointing out the ways Trump is acting like an authoritarian already.  

Mr. Trump’s inconsistencies and provocative proposals are a strategy; they are intended to elevate his importance above all else — and to place him beyond democratic norms, beyond even the Constitution.

This is the wake of Larry Summers' op-ed in the Washington Post criticizing the Carrier deal. 

It seems to me what we have just witnessed is an act of ad hoc deal capitalism and, worse yet, its celebration as a model. As with the air traffic controllers, only a negligible sliver of the economy is involved, but there is huge symbolic value. A principle is being established: It is good for the president to try to figure out what people want and lean on companies to give it to them. Predictability and procedure are less important than getting the right result at the right time. Like Hong Kong, as mainland China increasingly imposes its will, we may have taken a first step toward a kind of reverse transition from rule of law capitalism to ad hoc deal-based capitalism.

One article praising the deal does so for the very reason that Summers (and I) are alarmed by it.

It may be a qualified win, but the Carrier deal suggests that Trump’s promises of greater federal intervention in the economy were not just posturing. It could open the door for Trump to take a much more active role in the economy, not simply through fiscal policy but through direct involvement with specific companies.

All point to an erosion of the norms and traditions of our country.  We must work to conserve what is important in our tradition of order.


Praise Be

Encyclical Letter Laudato Si’ of the Holy Father Francis : On Care for Our Common HomeEncyclical Letter Laudato Si’ of the Holy Father Francis : On Care for Our Common Home by Pope Francis
My rating: 5 of 5 stars

I've read a few papal encyclicals through the years, but none were as inspiring to me as this one. Francis is an easy and engaging writer. Benedict to craft intricate theological statements. And John Paul paradoxically combined the writing talents of a poet and playwright with the sometimes obscure philosophical speculations of a phenomenologist. Francis' writing is both clearer and more engaging to a wider readership.

And what he writes is challenging and inspiring. In many ways, there is nothing new here. The Roman Catholic Church has long criticized Western capitalism for its greed, consumption, and exploitation and/or neglect of the poor. But what Francis has accomplished is a beautiful, cheerful, and hopeful connection of the deep problems of our current society--ecology, economy, and quality of life. He has sought common ground with other faith groups and nonbelievers while also articulating specifically how a catholic, Trinitarian theology promotes engagement with the poor and radical changes in our lifestyles in order to live as better stewards of the earth.

I intend to look back through the letter (I've been reading it here and there over the last month during free time at work) in order to organize my thoughts more. I very likely will preach on topics from the encyclical this autumn.

View all my reviews

Minimum wage, etc.

An interesting report on Bloomberg news suggesting that the Democratic party can achieve some of its policy aims by unbundling them and running them as initiatives, as this year's success of the minimum wage votes demonstrates.  

This report also informs you that, adjusted for cost of living, Nebraska will have the highest real minimum wage in the country!


Waldman on the Eich matter

Ari Ezra Waldman writes about the firing of Mozilla CEO Brendan Eich and takes exception to Andrew Sullivan's tirade on the matter.  Waldman writes that this wasn't about a group of gays taking him down, but was about the company deciding he wasn't the right fit because of employee complaints and a decision of the board.  He then deals with the larger issue of free speech, belief, etc.  A good read.


Conservatives misread Friedman

Philosopher Gary Gutting argues that current conservatives are mis-reading conservative economist Milton Friedman.  

It follows that, on Friedman’s own account, capitalism is not an economic system that operates independently of the political system in which it is embedded. It is a creature of that system, which has goals (of morality and social responsibility, for example) that go beyond the profitable exchange of goods. Therefore, the owners of businesses must accept governmental restrictions on their profit-making for the sake of overriding social values.

It might seem that this activist role for government flies in the face of Friedman’s libertarian insistence on the magic of Adam Smith’s “invisible hand” to produce “public goods from private vices,” without political control. In fact, however, Friedman makes it clear that the invisible hand is attached to the body politic. Here is how he introduces Smith’s famous phrase: “It is the responsibility of the rest of us to establish a framework of law such that an individual in pursuing his own interest is, to quote Adam Smith again, ‘led by an invisible hand to promote an end which was no part of his intention.’”The “invisible hand,” therefore, operates for the public good only because it is directed by the social values that our political system enacts by its laws. These values shape the function of the capitalist economic system.

Whereas Friedman believed that capitalism served other social ends, current conservatives seem to promote the means as the ends:

Our current political impasse over economic issues has arisen because so many conservatives have moved well beyond Friedman’s position. They object to almost all regulation of business, reject the need for any governmental solutions to social problems, and often seem to insist on judging corporate success in terms of short-term profits.

I have long objected that many conservatives of the last decade or so have misunderstood Ronald Reagan and his legacy.  Reagan promoted tax cuts as necessary means to larger ends.  They would spur economic development, lift America out of its late-70's malaise, inspire entrepeneurial efforts which could lift all boats (and help in the defeat of the Soviet Union).  They were part of his optimism about the future of American life.  I am convinced that he did not believe in continual tax cuts at all costs.  I don't believe a true Reaganite could support the Bush tax cuts of 2001, as the properly prudent thing to do in 2001, that which would have moved us closer to achieving the larger goals of American life, would have been to keep running surpluses so that we could have paid off the national debt (which projections said could have been accomplished in a decade).

I believe this analysis of Friedman argues similar points.


Joint filing!

Strange to be excited about a tax ruling, but I am.  The Treasury Department has announced that married same-sex couples can now file jointly, even if they reside in a state that does not recognize their marriage.  Read about it here.  

While I'm excited, I'm also nervous.  I so used to doing my taxes the same way every year, and now they will change.  Plus, I get mine done like two months before Michael usually does.  So, this will be a new source of anxiety.

And, we'll still have to file separately on the state level, so I guess we'll have to prepare individual federal returns that we'll have to use for the state filing?  What a pain in the ass.


More on Good Work

Further Wendell Berry quotes on good work:

by our work we reveal what we think of the works of God.  How we take our lives from this world, how we work, what work we do, how well we use the materials we use, and what we do with them after we have used them--all these are questions of the highest and gravest religious significance.  In answering them, we practice, or do not practice, our religion.

The significance--and ultimately the quality--of the work we do is determined by our understanding of the story in which we are taking part.