A government-funded videogame featuring a black alien female superhero delivered to Earth to fight global warming is about to be released. The game was inspired by the artist’s “sense what we do on Earth impacts the universe − not just pollution destroying the ozone layer, for example, but our thoughts and how we organize gender roles and social systems also have impact.”
Month: January 2013
The Coming Dangerous Decade
We now have a re-elected president Obama who no longer has to face another election. He has “more flexibility”” as he assured Russian president Medvedev. His cabinet appointments so far give us a good view of what the next four years, at least, will bring. David Ingatius gives us the leftist view of the future in a Washington Post story.
Thinking about Eisenhower’s presidency helps clarify the challenges and dilemmas of Barack Obama’s second term. Like Ike, Obama wants to pull the nation back from the overextension of global wars of the previous decade. Like Ike, he wants to trim defense spending and reduce the national debt.
I would hardly call Obama an example of Eisenhower-like determination in national defense. Ignatius seems to believe that Israel is an ally best abandoned.
Weekend Recipe – A Chicken in Every Pot
Our Broken Frame of Reference on Government Spending
When I first traveled to Door County in Wisconsin I visited the various lighthouses and was given a tour by local historians. One of the points that stuck with me most of all was that these lighthouses essentially were one of the few elements of the Federal government that were locally present in the region.
Today our government is ubiquitous at the Federal, State and local level, especially here in Chicago where Cook County is one of the largest counties in the country, with massive hospitals and criminal court facilities.
I wrote about government influence and how it is all around us in posts aptly titled “We’re Barely Capitalists” here and here based on some (semi-humorous) local insights. It would be difficult to find substantial portions of the economy anywhere in a place like Chicago that wasn’t heavily influenced by government spending and allocations.
This article in Business Insider reviews recent job growth and notes that 40% of it was subsidized by government.
Consider our economy right now: about 17% of it is health care; about 6% in terms of GDP is education; and with some overlap, 15-20% is what we call government consumptiongovernment activity, not just transfers. At all levels of government, including state and local. Add those all up, take out the overlap, and it’s a pretty big chunk of the economy, like 20-30%. Those are all sectors where there are massive subsidies, massive distortions of incentives, a lot of bad policy; and it’s hard to measure value.
State and Local governments are poised to grow in 2013, according to this Bloomberg article.
After slashing their workforces by about half a million in the past five years, state and local authorities will add employees in 2013… Their payrolls in the fourth quarter will be 220,000 larger than in the same period for 2012.
Bloomberg then goes on to explain how this state and local government job growth is funded; by Federal US deficits at the trillion dollar+ level that then are passed down to the State and Local levels.
States get about one-third of their revenues from Washington. The agreement Congress hammered out to avoid more than $600 billion in automatic spending reductions and tax increases –the so-called fiscal cliff — spared states from cutbacks, at least for now. (states received) approximately $519 billion…in aid last year.
Don’t forget that, in addition to the US Federal debt and borrowings, the state and local governments are also deeply indebted. Not only are we borrowing to fund current needs, we are also accumulating pension and medical obligations that are truly enormous and growing, especially here in Illinois where recent pension reforms failed to get off the ground.
Our frame of reference on all this government spending and debt, however, is skewed by our comparison group. We continually compare US spending levels to the “Industrialized Powers” which include Western Europe and Japan. Comparing the US to these countries, many of which are economic “basket cases”, is not relevant for a forward looking appraisal of countries where our actual economic competition is coming from – we need to look at China, India, and other rising powers that represent the future.
One of the oldest shibboleths is the fact that the US doesn’t have a “single payer” health system, like the (broken) comparison group listed above. However, if you get sick in China, Brazil, India or other rising countries, there is a (small) safety net but you essentially have to pay substantially extra or have connections in order to get what we’d consider to be modern and effective medical care.
Another point of comparison is greenhouse gases and various environmental practices, such as use of “green” power. Our broken “peer group” countries like Spain invested heavily in massively subsidized wind generation, as I document here, which recently collapsed the moment that these subsidies evaporated (which correlated with the country essentially going broke and being re-floated by the EU central bank. China and India continue to invest enormous amounts in coal power, since it is so effective and plentiful and is needed to power their growing economies.
Great Moments in Wife-Selection
There’s an amusing incident in a recent biography of Erich Maria Remarque
“So I said, ‘Oh, really, Erich, that sounds terrible, who are they?’ ‘Well,’ he said, ‘one of them is Paulette Goddard and the other is Marlene Dietrich.’ So I said, ‘Well, Erich, my God, you’re in real trouble here.’ But he was deadly serious. ‘Which one do you think I should go for, Douglas? ‘That is a terrible dilemma, Erich, I mean, my God, this is something we have to think about very carefully.’ ‘You know,’ he said, ‘Marlene is very attractive, but Paulette is really good at the stock market. I think I should go for Paulette.’ So I said to him, ‘Well, Erich, the stock market is very important, no doubt about that.’
As a Remarque fan, I certainly hope he was kidding about this decision process. (Which would tend to belie the title of the linked autobiography: Erich Maria Remarque: The Last Romantic.)
In any event, he did marry Paulette Goddard, and (unlike his previous marriages and relationships), the marriage lasted. (Given Remarque’s comment about the stock market, I was wondering if there was any data on her long-term annualized rate of return–the comment here about “her talent at accumulating wealth” suggests that it was probably pretty good.)
And more recently, we have Amazon founder and CEO Jeff Bezos who, when he wrote down a list of attributes he wanted for his future wife, included “a woman who could get me out of a third-world prison.”
“It was really just a visualization for resourcefulness,” he clarifies, “because people who are not resourceful drive me bananas.”
Jeff married MacKenzie Bezos, a writer, in 1993. I can’t speak to her jail-springing skills, but I’ve read her novel The Testing of Luther Albright