Sunday Thoughts (May 14-20)

A selection of links and thoughts that I stumble upon throughout the week – everything from economics to politics to philosophy to the occasional music video.

I. Besieged and Desperate

On Monday, while Israeli Prime Minister Netanyahu declared with a smile, “What a glorious day”, merely 100 km away,  58 Palestinians were killed by Israeli gunfire, and more than 1,200 wounded. The incident speaks volumes about the despair that the people in Gaza must be feeling and the lack of a peaceful perspective. On Friday, the Guardian published a long article by Sarah Helm about the suicide of a young Palestinian writer that offers a measured look at another lost generation and the misery in Gaza at large. Continue reading “Sunday Thoughts (May 14-20)”

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Sunday Thoughts (May 7-13)

A selection of links and thoughts that I stumble upon throughout the week – everything from economics to politics to philosophy to the occasional music video.

I. Cadet Bone Spurs’ Thirst for War

To the day seventy-three years after the US came out victorious of the Second World War in Europe, they have now all but abandoned the allies they once celebrated this victory with. In line with the billionaires that back him, the Comb-Over Caudillo has announced on Tuesday that the US will reimpose sanctions on Iran. Good luck receiving trust in future international treaties… Together with the apparently war-thirsty Israeli government, Agent Orange and his hawks (Pompeo, Bolton, etc.) are trying to fan fear of weapons of mass destruction in Iran – without a shred of evidence, of course – and are preparing for war. This reminds me so much of the 2003 war crimes, it makes me sick. Continue reading “Sunday Thoughts (May 7-13)”

Sunday Thoughts (April 30-May 6)

A selection of links and thoughts that I stumble upon throughout the week – everything from economics to politics to philosophy to the occasional music video.

I. New News

John Micklethwait, the editor-in-chief of Bloomberg News, writes about the transformation of journalism in the digital age. He stresses the importance of the subscription business model and the automation and personalisation of news. His views are of course biased towards optimism, but are readworthy nonetheless.

Meanwhile, Robert Shrimsley laments in the Financial Times the erosion of an outside mentality among journalists which makes the media complaisant and untrustworthy for the people it is supposed to keep informed. Continue reading “Sunday Thoughts (April 30-May 6)”

Sunday Thoughts (April 23-29)

Welcome to the first edition of Sunday Thoughts. I currently can’t find a lot of time to write articles for this blog (books and PhD theses are surprisingly time-consuming). Instead, I’m trying out this new format for which I curate a small selection of links and ideas each weekend. Continue reading “Sunday Thoughts (April 23-29)”

Unemployment and Labour Force Participation in the US – Reliable Statistics?

The unemployment rate in the United States is currently 4.4 percent and is at a ten-year low. Naturally, the Trump administration has been trying to interpret low unemployment numbers as a sign of their successful job-creating policy. This stands in strong contrast to comments that Trump made during his election campaign, alleging that the “real unemployment rate” was as high as 42 percent. But pre-inauguration Trump is not the only one who is concerned that the official unemployment rate does not fully capture the gap between the US economy’s current state and its full potential, often refered to as “slack”. Despite low unemployment numbers and a still very low interest rate, inflation has been timid, giving rise to theories that the slack in the US economy is higher than the unemployment rate might suggest. I take a brief look at falling labour force participation rates and underemployment to investigate the amount of truth in these theories and discuss implications and some potential remedies. Continue reading “Unemployment and Labour Force Participation in the US – Reliable Statistics?”

Do Pay Caps for CEOs Make Sense?

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The question whether CEO pay is excessive or adequate often leads to heated discussions. In an election year in Germany, the Social Democratic Party of Germany has recently made this topic the subject of headlines with their plan to cap CEO salaries. The argument that is usually brought forward in favour of CEO pay caps is a push toward “social justice”. This poses four important, consecutive questions: First, how can it be determined how much pay a manager deserves for his work? Second, do CEOs currently earn more than they deserve? Third, if so, at the expense of whom does this rent extraction occur? And fourth, would a cap on CEO salaries resolve potential issues? Continue reading “Do Pay Caps for CEOs Make Sense?”

Tax Evasion and Tax Avoidance – A Multi-Trillion-Dollar Business

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The topic of income and wealth inequality is closely linked to the practice of tax avoidance and evasion, both by international corporations and by wealthy individuals. For example, it is often argued that an increase in top-income taxes and capital taxes intended to mitigate economic inequality will only end up scaring off investors and high-skilled workers or encouraging them to circumvent the law and ultimately hurting national prosperity. The related difficulties of implementing national policies in a globalised world have been highlighted by the recent disclosures of the Panama Papers and the European Comission’s decision to hit Apple with a tax bill of €13 billion after years of paying an effective corporate tax below one percent due to a deal with the Irish government. Unfortunately, any discussion about tax avoidance and evasion is seriously constrained by the opacity of tax havens and the global financial system and its laws and the lack of robust data. Recent research may help to shed some light on the issue at hand. But while there has been made some progress on the international level recently, it remains highly doubtful whether the gigantic globalised financial shadow economy can be tamed. Continue reading “Tax Evasion and Tax Avoidance – A Multi-Trillion-Dollar Business”