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June 22, 2013

krugman on monopoly rents

Thought exercise.

OK, so we all know that the "recovery" that some economists talk about is a sham.  (See: Heidi Moore.)  So now imagine, what if every iPhone, iPad, Samsung Galaxy, etc. had been manufactured in the U.S. and not in China and other low-wage labor markets?  What would unemployment look like?  What would the Middle Class look like?  What would the average wage vs. productivity look like?

What brought this to mind is Paul Krugman's most recent op-ed, in which he discusses "monopoly rents," which sent me out into the Internet to figure out what he's talking about.  In economics, economy rents, or rent-seeking, is the act of increasing wealth instead of creating wealth, by manipulating the economic environment.  And by my thinking there are two separate things going on, in the way that Krugman is referencing this phenomenon.  First is the rent-seeking, in the sense that someone like Apple having the cachet to basically pick a retail price and consumers will pay it.  Hence the piles of cash Apple makes is unconnected to the value created by labor, and the effect on the economy is to suck capital out of it.  See also, the financial industries.  The second thing is the employment practices of the rent-seeker.  Apple is the first or second biggest company in America, and they practically employ no one.  There are not hordes of skilled laborers, the Middle Class, working for Apple.  There are small cadres of engineers and managers and the Mandarins that run the thing.

The end effect, and Krugman is careful to say that he's not applying a moral judgment, is that Apple is bad for the economy.

Or to put it differently, rising monopoly rents can and arguably have had the effect of simultaneously depressing both wages and the perceived return on investment.

You might suspect that this can't be good for the broader economy, and you'd be right. If household income and hence household spending is held down because labor gets an ever-smaller share of national income, while corporations, despite soaring profits, have little incentive to invest, you have a recipe for persistently depressed demand. I don't think this is the only reason our recovery has been so weak -- weak recoveries are normal after financial crises -- but it's probably a contributory factor.

So what if Apple was for some reason not able to do this?  What if Apple employed as many people as the auto industry did in its heyday?  I mean, it's probably a genie that can't be put back in the bottle, but we have an employment problem, and even for the employed, we have a wage deflation problem.  And our largest employer (Walmart) is hell-bent to pay its hundreds of thousands of employees as little as freaking possible.  We need employers, and we need to gin up some incentive to convince them to pay fair wages.

I guess the bottom line is that the economy has changed structurally, in fact changed decades ago, and to have an actual recovery we're going to need structural reform.

Posted by mrbrent at 1:52 PM

June 21, 2013

james gandolfini

So as many of you know I work days for a law firm, an entertainment law firm.  I basically work in movies, plus also my wife is an actress, so it is not infrequently that there are what you would call movie stars around.  And of course the ten year-old me is all agape and agoggle, but everyone's just people, man, so I try to chill, and definitely refrain from that, "You'll never guess who was just in my office!?!" foolishness.  So this one time is an exception.

But a couple of years ago, in the middle of the last season, I think, James Gandolfini was in for a meeting.  Real sweet guy.  Funny: he's not the biggest guy in the world, but he wore his size.  He had a gravitational pull.  But polite to a fault.

Almost to a fault.  He and whoever he came in with go down to the sidewalk to smoke a cigarette.  They're talking amongst themselves.  A bike messenger is riding by, slams on the breaks.  "HEY MAN, YOU'RE TONY SOPRANO!" he says, and then makes little imaginary guns out of his hands and pretends to shoot, laughing.

And Gandolfini gave the wave and the implied howyadoin, but this shadow passed over his face and you couldn't tell if it was rage or disappointment.  Not like a reluctance to be bothered, fan, but more like, this idiot just thinks of this actor not as an actor but as some sort of totem of bullying and violence.  Like, how many times would Gandolfini be recognized in an elevator and some moron would get all, "Don't shoot! Ha ha ha!"

But like I said, he smiled, maybe a little tightly, and waved.  It's a sad thing he's gone.

Posted by mrbrent at 9:09 AM

June 19, 2013

lagerfeld calls her a luxury product

This is apropos of nothing at all in the world, but it is the strangest little aside contained in the body of a by-the-numbers news story that I can remember.  Buried in the middle of a story concerning French soccer stars being tied up in a prostitution scandal, enter the accused prostitute:
The young woman in question, Zahia Dehar, now 21, has made a whole new career out of her notoriety, and has more than 55,000 followers on Twitter. Algerian-born, she came to France at the age of 10, and she has transferred her dyed blond hair and pneumatic figure into fashion, opening her own line of luxury lingerie featuring the color pink and what could be considered a postmodern take on the Barbie doll.

While it is not clear who her investors are, and she refuses to say, her line is reportedly successful, and she has been taken up by the German fashion designer Karl Lagerfeld.

Mr. Lagerfeld has compared Ms. Dehar to Diane de Poitiers, who was for years the favorite of King Henry II, but who was also renowned for her political acuity and influence on the king. "I find her fascinating," he has said, calling her "a luxury product."

Ms. Dehar lives in a vast apartment, with a cook and a maid, in the 16th Arrondissement in Paris, and has a huge showroom in the 8th; her collections include rose garters, bras in pleated blue organza and nightgowns with cupcake paper pleats around the bodice. The French news media praise her for making some of her products in France and suggest that she is the muse of a Chinese investor from Hong Kong.

It's not the type of story I typically pursue, and I certainly don't have the time/means/command of the French language to fly out there and report it properly, but wouldn't that be a bit of magazine journalism that you'd want to read?  I'm not crazy to be fascinated by this phenomena, right?

It's like the apotheosis of some modern process that we had no idea was in effect.  A "Gibson," let's just call it.

Posted by mrbrent at 9:29 AM

June 18, 2013

bobby jindal is a serious man, for a goof

I do not need to remind you that Bobby Jindal is kind of a goof.  I might need to remind you who he is (governor of Louisiana), but once you remember: oh right, that goof.  He gave that famously bad rebuttal to the 2009 State of the Union address, he continually tries to legislate Louisiana into obsolescence only to be rebuffed by the courts, and has deregulated the state to the point that it is basically a place where explosions are the cost of doing business.

But aside from being a goof, he is also very convinced that he is the future of the Republican Party.  He's very conservative (try out-Ayn-ing him, he dares you) and Tea Party friendly, plus also he is not Caucasian, which the GOP tends to favor because they think it makes them bullet-proof from the reality of their institutional racism.  But perhaps his greatest qualification is his dogged refusal to quit trying to be a National Voice, no matter how many times he has been rebuffed.

The latest example is an "op-ed" for the entertainment website Politico.  You don't have to say it out loud: if the best place you can get to run your attempt to insert yourself into the national conversation is Politico, you might want to rethink your efforts.  But Bobby Jindal has no time for rethinking!  He is a very serious man, with very serious thoughts, which he would like to share with us for the umpteenth time:

Because the left wants: The government to explode; to pay everyone; to hire everyone; they believe that money grows on trees; the earth is flat; the industrial age, factory-style government is a cool new thing; debts don't have to be repaid; people of faith are ignorant and uneducated; unborn babies don't matter; pornography is fine; traditional marriage is discriminatory; 32 oz. sodas are evil; red meat should be rationed; rich people are evil unless they are from Hollywood or are liberal Democrats; the Israelis are unreasonable; trans-fat must be stopped; kids trapped in failing schools should be patient; wild weather is a new thing; moral standards are passé; government run health care is high quality; the IRS should violate our constitutional rights; reporters should be spied on; Benghazi was handled well; the Second Amendment is outdated; and the First one has some problems too.

Oh my God he fit every single GOP strawman into a single paragraph.  And that's hilarious enough, but the thrust of his "op-ed" is that Republicans need to stop belly-aching and act (in which "op-ed" he condensed the entire spectrum of belly-aching).

It's kind of circular.  Jindal's ambition compels him to brush off his goofiness and throw his hat in the ring again, which ring becomes a chopping block because he is, in the final account, just a goof.

Oh, now I'm kind of sad.

Posted by mrbrent at 10:15 AM

June 17, 2013

last word on superman

As usual, I got a whole bunch of thinking done on a topic after I filed the actual story, which is frustrating, but I would not want the topic of the Superman movie (which apparently is a critical mess and also a legit box office smash) to pass without mentioning that there is a comic book that got Superman right, absolutely right, dead on the nose, and it ran not even ten years ago.

"All-Star Superman" is the name of the twelve issue series, written by Grant Morrison and illustrated by Frank Quitely.  It is thoroughly modern and yet is filled with all the missing gee-whiz that makes me so mawkish and intolerable.  And if you read Morrison's history of super hero comics/memior, "Supergods," you will find a super-interesting anecdote concerning the exegesis of Morrison's version of Superman, involving the San Diego Comic Con in 1999 and more than a little synchronicity (or magic, if you will).  But the Superman that I yammer on about being gone came back at least for the duration of "All-Star Superman," and everyone should read it.

And finally, thanks to reader John E. of Penfield, NY for noticing that I totally mucked up a certain slogan associated with the Man of Steel.  Unfortunately, it's integral to a little passage that follows it, so it's going to have to stand, a monument to me misremembering something yet again.

(Yes, I intend to see the movie, but probably will wait to see what my folks think before committing to a theater crowded with people too young to know that talking while the movie is in progress is disturbing to those around you.)

Posted by mrbrent at 9:40 AM