‘The Innovators’ versus ‘The Maintainers’

Innovation Is Overrated by LAURA BLISS

http://www.theatlantic.com/business/archive/2016/04/innovation-is-overrated/477702/

“New technologies and their inventors are often celebrated as society’s heroes. Steve Jobs, Bill Gates, Elon Musk, Larry Page: These are all contemporary “innovators” whose “visionary ideas” and “creative leaps” led to “disruptive realities”—that is, if one buys the rhetoric of certain books and novelty-oriented publications.

But those who’ve questioned whether technology really is society’s salve aren’t alone. Lee Vinsel, an assistant professor of science and technology at the Stevens Institute of Technology, wrote a dissertation on innovation and regulation in the early days of the automobile. But lately, he finds that the word “innovation” is overused to the point of meaninglessness—and worse, that it can obfuscate the bleak realities of the status quo. “In a culture where we forget about things like crumbling infrastructure and wage inequality, those narratives about technological change can be really dangerous,” Vinsel says.”

Natural Capital – Identifying the Economic Value of Nature’s Bounty

An excellent piece from Der Spiegel that highlights economic concepts such as negative externalities and natural capital:

http://www.spiegel.de/international/tomorrow/the-true-price-of-foodstuffs-a-1085086.html

“The prices of bananas, beef, bread and other foodstuffs are determined primarily by supply and demand -- and sometimes by subsidies, quotas and price speculation. But the prices do not include contributions made by nature. These contributions include such things as the use of clean water or fertile farmland. Harmful chemicals, gases or polluting particles emitted during production are likewise not factored into the price, neither for producers nor consumers.”

Physical Stature and Economic Well-Being

How the Scandinavians got so tall

https://www.washingtonpost.com/news/wonk/wp/2016/04/08/how-the-scandinavians-made-themselves-among-the-tallest-people-in-the-world

“For most of the history of the United States, Americans were the tallest people in the world. Recently, though, northern Europeans became the world's tallest people. The Scandinavians have a reputation for stature, but it turns out it is the Dutch who are the tallest -- eight inches taller, on average, than they were two centuries ago.

Hacker and Pierson argue the shift occurred because, these days, active government has made Europeans healthier than we are. In particular, according to the authors, they have healthier childhoods, because their governments offer more material help to pregnant women and infants than does the U.S. government.”

Value-Added Tax versus Income Tax

An excellent WSJ essay: Taxation without Exasperation

http://www.wsj.com/articles/taxation-without-exasperation-1460129434

“We could move back to an income tax far more like that of 1913—one that imposes a tolerable burden on upper-middle-class families and the truly rich while leaving the rest of us completely untouched.

Getting there wouldn’t be painless. The federal government spends far more than it did in Woodrow Wilson’s day, for starters, so we would have little choice but to raise more revenue than we did back then. And Congress has grown addicted to using the income tax as an instrument of central planning rather than a means of raising revenue, a habit that will be hard to break.

Still, a new tax system that can increase economic freedom, raise just as much revenue as we do today, and foster higher wage and productivity growth is in our grasp. All we need to do is get over our irrational fear of the value-added tax, or VAT, a consumption tax on goods and services that is used by almost all of the world’s rich market democracies.”

Hedge Funds and Sovereign States

How Hedge Funds Held Argentina for Ransom

http://www.nytimes.com/2016/04/01/opinion/how-hedge-funds-held-argentina-for-ransom.html

Guzman and Stiglitz note:

“It’s common to hear the phrase “moral hazard” when looking at countries that face crushing debt, like Greece or Argentina. Moral hazard refers to the idea that allowing countries (or companies or people) to renegotiate and lower their debts only reinforces the profligate behavior that put them in debt in the first place. Better that the debtor faces disapproval and harsh consequences. But the Argentina deal reversed the moral hazard by rewarding investors for making small bets and reaping huge rewards.”

Related:

http://vivekjayakumar.blogspot.com/2014/07/hedge-fund-blackmail-and-judicial.html

http://vivekjayakumar.blogspot.com/2014/09/debt-restructuring-emerging-markets-and.html

US Desperately Needs Corporate Tax Reform

The Tax Inversion Debate - Free Pfizer! Why Inversions Are Good for the U.S.

http://www.nytimes.com/2016/04/08/opinion/free-pfizer-why-inversions-are-good-for-the-us.html

Time to abolish the corporate income tax

http://www.nytimes.com/2014/01/06/opinion/abolish-the-corporate-income-tax.html

Why abolishing the corporate income tax is good for American workers

http://www.pbs.org/newshour/making-sense/abolishing-corporate-income-tax-good-american-workers/

Reforming Corporate Taxation Is a Bipartisan Issue

http://mercatus.org/expert_commentary/reforming-corporate-taxation-bipartisan-issue

Veronique de Rugy notes:

“For several years now, the United States has had the highest corporate income tax rate in the developed world, with a national statutory corporate tax of 35 percent. The United States also has the highest combined rate (39.2 percent) when the federal rate and the average rate among the states are added. Japan used to have the highest combined rate (39.8 percent), until it got it down to 36.8 percent in April 2012.

Even such high-tax nations as France have lower rates. However, the real competition comes from Canada (26.1 percent), Denmark (25 percent), the United Kingdom (20 percent) and the many countries, such as Ireland (12.5 percent), with rates below 20 percent. Moreover, competition is intensifying. Last June, the U.K. announced that it would cut its rate from 20 percent to 18 percent in the next five years. It's now saying that it will lower the rate even further, to 17 percent.” 

Why are US Infrastructure Costs So High?

A great survey by Justin Fox:
http://www.bloombergview.com/articles/2016-04-08/why-u-s-infrastructure-costs-so-much