The Economist

How to be a true progressive

"He wants to invest more in the poor, but has shown no appetite to overhaul America's welfare state, many elements of which- from disability insurance that discourages work to ineffective training schemes do nothing to boost economic opportunity, and often undermine it"

Why is the disincentive to work always framed as the welfare state being too strong? The way I look at it, the disincentive to work is wages being too low. 


A memo to Obama

"taxing the rich more- is a blunt edged response to inequality"

Agreed.  The systemic issues should be addressed but in the meantime...

"Mobility and opportunity, on the other hand get their hearts pounding"

Yes because without the idea of upward mobility and opportunity their story wouldn't make sense.

"Any negative effects of the minimum wage can be counteracted through the EITC"

Let real wages stagnate longer, take away transfers since people will be working their $7.25/hr jobs (if they exist) and everything will work out because they are working and will get a tax credit. 

"offered intensive counseling and training to the long-term unemployed"

So they can be skilled cyclically unemployed people.

"Since people who end up on DI seldom leave, the key is to persuade them not to apply"

...

We should minimize transfers because if people are willing to do what it takes (accept lower wages, enroll in job training) they can get hired again.  The minimum wage is fine at $7.25 because you are able to move up if you do what it takes. 

Am I missing something?  It sounds like mobility and opportunity are assumptions for these proposals, not arguments to improve them. 


Inequality v growth (enough said?)

"Some inequality is needed to propel growth, economist reckon.  Without the carrot of large financial rewards, risky entrepreneurship and innovation would grind to a halt."

Without the carrot in your mouth, risky offshoring and tax dodging would grind to a halt.


Plucking the goose

"At a time when the rich world is struggling to generate economic growth, you might imagine that its politicians would be competing to attract good companies and stimulate them to create jobs, innovative products and revenue"

This sounds a lot like developing countries competing for capital inflows which often inflate bubbles, misallocate resources, and fly out at the first whiff of paranoia. 

"data protection officer to safeguard customers' details.  The cost would be monumental. "

This kind of statement might explain why businesses aren't looked upon so brightly today by some.  Cost of providing quality service is just too much?