WHY WE CAN DEMAND A LIVING WAGE

Makes sense to me ...

- Mark 

IS WAR A BANKER'S RACKET?

Via Zero Hedge ... This map helps support the arguments offered by the Neo-Mercantilist and Marxist schools of thought.

One thing's clear from this map (click to enlarge), the Liberal "trade equals peace" school have some 'splainin to do.

- Mark 

NORMANDY, FRANCE . . . 70 YEARS AGO

- Mark 

PART III: HOW THE FEDERAL RESERVE HAS WORKED SINCE 2008

Continuing from Part I and Part II of effort to help us understand how the Federal Reserve works, here's a somewhat humorous look at how the Federal Reserve has been operating since at least 2008 (which I also discuss here, here, here, and here) ...

Next Up: We take a look at central banks, President Andrew Jackson, and how he might react to the Federal Reserve today.

- Mark

WEALTH EXTRACTION 101 ... AND OUR MARKET ECONOMY

In my International Political Economy (PS 404) class we're discussing what happened to market players who gambled and lost in 2008. There are two key points to understand.

First, the entire market structure was built around securing fees and wealth extraction, and not hard work and wealth creation. To get to this point our market system depended - and continues to depend - on cheap money (thank you Alan Greenspan), favorable legislation (thank you Congress), and getting others to believe that the financial house of cards will not collapse (thank you Free Market delusions). If there is a threat of a collapse you also need enough people to believe that everyone else will have the money to back their market bets when market players get spooked (thank you Ignorance).

This is a tall order that, as we saw, is built more around a hope and a prayer than it is built around market discipline and hard work.

The end result is our markets have been governed by a logic more in tune with a casino, where money is readily accessible, but can also disappear over night.

Second, we need to understand that virtually everyone who put their money into "debt assets" - and other products that derive their value from unrealized, or unfinished, business - saw their portfolios disappear over night. Here think about what would happen if you purchased a ticket for an event that never happens, or you can't attend. You're left with nothing. So it was with market players in 2008.

The biggest losers (until the bailout) were the big financial players who thought they had bought insurance on their financial products (by purchasing Credit Default Swaps), but then learned that the "insurers" didn't have the money to pay claims when the market collapsed.

South Park helps us understand what happened to market players - who were looking for a fast buck in unsound markets - when the house of cards began to collapse ...

- Mark

MID-WEEK READING (June 4, 2014)

Want to know how much you would be making if wages had kept pace with productivity? Check this out (Upworthy).

Thousands of Manta Rays congregate, with some taking to the air (Distractify).

With stocks at record highs, what could go wrong? Pretty much everything (Wall Street Journal).

The 10 dumbest and smartest states in America (The Street).

For the PETA crowd ... Madrid bullfight canceled after all three matadors are gored (El Pais).


ECONOMIC THOUGHT(S)
Mainstream economics is a cult (Washington Blog).

A short, simple, and insightful, introduction to Adam Smith, John Maynard Keynes and Hyman Minsky (Bloomberg View).


WELCOME TO THE GUN SHOW
Gun activists flaunting assault rifles get booted from Chili's and Sonic (Mother Jones).

NRA scolds 'weird' people brandishing guns in coffee shops (Bloomberg Businessweek).

Maybe store owners can solve our 'gun nut' problem (Slate).

Guns allowed everywhere, except near politicians (Bloomberg Businessweek).


SIGNS THE APOCALYPSE IS UPON US? 
U.S. Senate hearings asks, "Which groups are we at war with?" The Department of Defense responds with "That's classified" (Barry Ritholtz).

We discussed this nonsense almost 5 months ago ... Cases of measles in the U.S. is at a 20-year high, thanks to anti-vaxxers (Mother Jones).

We're learning more from Stephen Colbert than from the actual news (Huffington Post).

Four southern states are now embracing Obamacare (NY Times).


BUDGET DEFICIT DISORDER(S)
National debt graph ... by president (zfacts).

U.S. debt by president ... Why the winner is George W. Bush (U.S. Economy).


IT DOESN'T JUST RAIN IN SPAIN
After 39 years, the king of Spain steps down (Bloomberg).

Racist gesture at a soccer game cost employee her job ... in Barcelona, Spain (El Pais).

Spanish government asks state attorney to crack down on Twitter hate speech (El Pais).


MISCELLANEOUS
Republican answer to made up VA "scandal" ... let's privatize (Daily Kos).

How corporations get away with wage theft (Salon).

Why English eggs are different from those in the U.S. (Huffington Post).

50 amusing photos from the past (Distractify).

- Mark 

PART II: THE FEDERAL RESERVE EXPLAINED IN 7 MINUTES

Yesterday, in an effort to help us understand the Federal Reserve, I promised to provide a series of overly simplified reviews of our central bank, and how it works. Today, we get the history of the Federal Reserve explained in 7 minutes ...

In the FYI category, this is how central banks are supposed to work.

Tomorrow we'll take a look at how the Federal Reserve has worked since the market collapse of 2008.

- Mark 

PART I: HOW THE FEDERAL RESERVE WORKS

Have you ever wanted to know how, since 2008, the Federal Reserve has been able to dump a never ending stream of money into the bottomless pit we call Wall Street? Have you ever wanted a "Quantitative Easing for Dummies" explanation? More simply, do you want to know how the Federal Reserve works?

Over the next few days I'll provide an overly simplified review of the Federal Reserve, it's history, and how it works. A 'Fed Starter Kit' of sorts.

For today, this sums up how the Federal Reserve has been operating since 2008 ...

Sure, the devil is in the details. But now you have a conceptual understanding of how the Federal Reserve works.

Tomorrow I'll post something a little more detailed about the Federal Reserve, and its history.

- Mark

WHAT UNIONS DO (AND HAVE DONE) FOR AMERICA

In line with my previous post ... Via Upworthy we get the following three graphs that help explain why the American worker and our middle class became the envy of the world, and is now on the ropes.

GRAPH #1: When Union Membership Increases Income Inequality Decreases

GRAPH #2: Unions Help Drag Up the Pay of Other Non-Union Workers

GRAPH #3: Unions Overall Impact on the Middle Class

In a few words, your quality of life is much better today in large part because of what unions have fought for over the past 100-plus years. Collective bargaining makes a difference, as does insuring that there is a basic wage structure that starts with a living wage.

- Mark

MORE THOUGHTS ON MINIMUM WAGE & INEQUALITY

Almost two years ago the National Employment Law Project (NELP) produced a study that showed how both minimum wage and the purchasing power of each dollar have lagged behind rising costs. The result is that individual lives have suffered as the average American is now working more for less, while debt loads and inequality levels have soared.

It's that simple.

One of the more important stories in the NELP study is the finding that 7 out of the top 10 growth occupations over the next decade will be in low-wage industries (which is fodder for those who see America in a race to the bottom).

Another key NELP finding is that the vast majority of low wage employees (66 percent) work for large corporations, or firms with more than 100 employees. What this means is that America's largest companies, rather than "mom and pop" stores, would be affected most by an increase in the minimum wage.

The question is how much would the big firms be affected by raising the minimum wage to, say, $15 an hour? There's a lot of debate here.

There's little doubt that there's been some confusion as to how raising the minimum wage would impact the largest firms in America who depend on low-wage labor. There are many sources that use conflicting methods to reaching a conclusion (as this, this, and this Forbes piece demonstrate). This helps explain why the picture posted above probably understates by $4 billion what McDonalds' executives and shareholders would have to give up from the pay and dividend pool if McDonald's raised the minimum wage to $15 per hour (this assumes McDonald's doesn't raise prices to pay for the wage hikes). The original poster was probably cherry picking the information.

Still, there's also no doubt from the information out there that one of the ways to slow down the growing gaps between the working poor and America's richest class is to raise the minimum wage by at least $3-4 an hour.

In my view this is something that needs to happen, especially since wages have not kept pace with what workers have been producing over the past 40 years.

The real key, as Seattle, San Francisco, and San Jose have shown, is recognizing that raising the minimum wage to $15 per hour would not be followed by the collapse of Western Civilization.

- Mark