Baumol is so last-century

Yesterday's discussion about the "Baumol effect" says as much about the times William Baumol was working in as it says about economics.

In the 1960's it was taken for granted that as labour productivity improved, wages would increase. Economists had a hundred years of data proving that to be the case. Baumol concerned himself with what was essentially a side-show; why did wages increase in occupations that did not enjoy productivity improvements?

Developments in the North American and some other Western economies since the 1970's have vaporized the underlying assumptions that Baumol and every economist of his generation took for granted. The goods-producing sectors of the economy have seen wages go down even as productivity continues to go up.

Instead of some of the surplus accruing to the workers who produce the goods, it now goes more than ever to the owners of the means of production. This class of patriots owe their allegiance in the first place to every American millionaire's number one most cherished value; the right to accumulate capital.

To that end the rich and their lobbyists and their politicians and their press have prevailed in molding a tax regimen that reflects their interests and values.

That's why we have Tim Cook in the news lecturing the US senate about how Apple's offshore cash hoard will stay offshore unless and until American taxes are cut to the level the company enjoys in those offshore tax havens.

That such a spectacle is even possible speaks volumes about how dysfunctional the American democracy has become.

Connecting the dots between Apple and the collapse of the Skagit River bridge

Apple CEO Tim Cook informed the Senate the other day that he had no intention of moving Apple's 100 billion off-shored cash hoard back to America until such time as US authorities dropped their tax rates to the 2% his company pays in Ireland.

Not long after Tim was done delivering his ultimatum to the Senate Finance Committee, a bridge in Washington State fell into the Skagit river.

While the short-term explanation of the Skagit River disaster will focus on that unfortunate Canadian trucker, in the long term saner minds are sure to afix blame to America's non-existent infrastructure renewal program.

Tens of thousands of bridges in America need rebuilding. That will require many billions of dollars.

But American companies are given a kiss and a hug for figuring out how to offshore their revenues and avoid American taxes.

How will that mind-set fix the Skagit River bridge?

Rise up and die

After you, Mr. Hedges...

Chris Hedges has written an excellent article about where we're at and how we got here.

Not much there to disagree with, and the article makes a perfect exclamation point for today's testimony at the Senate by Apple CEO Tim Cook. Cook stated flat-out that anyone who thought Apple would repatriate it's off-shored billions without a massive reduction in the US corporate tax rate was dreaming in Technicolor.

That blunt "go fuck yourself" is what Cook refers to as honoring the spirit of  America's tax laws.

But back to Chris Hedges. I have one question;

Rise up and do what?

Of course we need to support the Bradley Mannings and the Julian Assanges in their struggles. Those are our struggles too, after all.

But beyond that, what?

Does Hedges intend his screed to be a call to arms? If so, he is seriously deluded. With all due respect to those who have fetishised the second amendment, armed resistance is a dead-end. There's a reason America's military-industrial complex wants drones in the sky over your house; that arsenal in your spare room doesn't mean a damned thing to the Hellfire missile coming at you from 30,000 feet.

There is no future in armed resistance. Americans need to reclaim their democracy. This is not an exclusively American problem of course, but the world looks to America's 99%  for leadership.

After all, they've made up the most ground in the race to the bottom over the past forty years or so.

Rotten Apple; the decay of an iconic American company

Today's Senate hearings add momentum to Apple's shift from being celebrated for inspired design and technology innovations to being celebrated for inspired tax-avoidance schemes.

The hundred billion plus Apple has parked in Ireland aren't causing CEO Tim Cook to lose any sleep. "We pay all the taxes we owe, every single dollar," claims Cook. "We not only comply with the laws, we comply with the spirit of the laws."

He's absolutely right of course. He is acknowledging that the "spirit" of America's tax code is to facilitate tax avoidance by wealthy individuals and corporations. That's the same spirit Mitt Romney was saluting when he admitted to keeping most of his fortune in offshore tax-shelters.

Tax law isn't intended to tax the rich; it's intended to let them off the hook.

And apparently it has proven remarkably successful in achieving that goal.