Author Archive

US student loan borrowers are increasingly struggling to repay their education debt (2 charts)

November 25, 2015 2 comments

from David Ruccio


An increasing number of student loan borrowers are struggling to repay their education debt as outstanding student loan balances nationwide increased by $13 billion in the third quarter of 2015, according to the New York Federal Reserve.

Read more…

Accumulate, accumulate! Or not

November 23, 2015 4 comments

from David Ruccio


What are U.S. corporations doing with all the surplus they’re managing to rake in? Well, they’re not investing it. Instead, they’re paying it out to shareholders and upper-management, buying back their stock and expanding their portfolios of financial assets, and hoarding the rest in cash. The net effect is to dampen the rate of economic growth and the creation of new jobs. Read more…

How to kill a unicorn

November 21, 2015 2 comments

from David Ruccio

You can’t, of course, kill a unicorn. Because it isn’t real. It’s just a mythical creature.

Except, it seems, in the world of venture capital. There, as I’ve come to learn from Rupert Neate [ht: ja], unicorns abound. And they just may represent the beginning of the end of the current tech bubble.



source Read more…

Beyond the standard explanation

November 16, 2015 17 comments

from David Ruccio

Robert Reich is right: the standard explanation of—along with the standard debate about—inequality misses the point.

The standard explanation for why average working people in advanced nations such as Britain and the United States have failed to gain much ground over the past several decades and are under increasing economic stress is that globalisation and technological change have made most people less competitive. The tasks we used to perform can now be done more cheaply by lower-paid workers abroad or by computer-driven machines.

The left’s standard solution has been an activist government that taxes the wealthy, invests the proceeds in excellent schools and in other means that people need to become more productive, and redistributes to those in need. These prescriptions have been opposed vigorously by those on the right, who believe the economy will function better for everyone if government is smaller, public debt is reduced and taxes and redistributions are curtailed.

Read more…

Income inequality in the United States increases as people get older.

November 11, 2015 1 comment

from David Ruccio


Income inequality in the United States increases as people get older.

That’s the stark conclusion of a new study by Fatih Karaham for the Federal Reserve Bank of New York.* In the chart above, men are grouped into percentiles of total lifetime income (income earned between ages twenty-five and sixty). Read more…

Unequal distributions of income

November 8, 2015 7 comments

from David Ruccio

We all know that the distribution of income has been increasingly unequal in recent decades—in the years leading up to the crash of 2007-08 and, now, during the current economic recovery.*

But, as I explained to my students in class this week, there are two different ways of conceiving of and measuring inequality within capitalism. One is the size or interpersonal distribution of income—the distribution of income to individuals or individual households. Thus, for example, the Gini coefficient, the share of income going to the top 1 percent, and the 90-10 ratio are all ways of measuring the size distribution of income. The other way is the functional distribution of income—the distribution of income to groups that are functionally related to the production of total income. Thus, we often refer to and measure the income shares going to capitalists and workers (and, less often these days, to landlords).

The question is, what is the relationship between the functional distribution of income and the size distribution of income?

Read more…

Epidemic of pain, suicide, and drug overdoses (3 graphs)

November 5, 2015 6 comments

from David Ruccio


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4 maps of the United States

November 2, 2015 Leave a comment

from David Ruccio


The New York Times has mapped the percentage of the U.S. population that still, two years into Obamacare, remains without health insurance. Read more…

Academic unfreedom in economics

October 30, 2015 9 comments

from David Ruccio

We forget, at our peril, the extent to which academic unfreedom is enforced in departments of economics across North America.

Most departments of economics offer—in the classroom and in terms of research and policy advice—only mainstream economics. By that I mean they hire economists who only teach, conduct research, and offer policy advice defined by one or another version of mainstream (neoclassical and Keynesian) economics. Other approaches to economics—generally, these days, referred to as heterodox economics—simply aren’t recognized by or represented within those departments. That was true in the decades leading up to the crash of 2007-08 and, perhaps even more startling, it has continued to be the case in the years since.

That’s particularly true in departments that have doctoral programs in economics. While heterodox economists are often hired by undergraduate departments (such as, most famously, the University of Southern Maine), you simply won’t find heterodox economics or heterodox economists at Harvard, MIT, Princeton, Yale, and Chicago.

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Consumer bifurcation

October 29, 2015 1 comment

from David Ruccio

Apparently, Hershey’s chocolate is another victim of the obscene levels of inequality we’re seeing in the United States.

Chocolate maker Hershey Co , long a staple of middle-class U.S. households, is getting squeezed as consumers either pay up for fancier sweets or seek more savings. . .

Hershey executives said the company is grappling with a growing gap between low and high-income households in the United States, which has changed buying patterns for many consumer goods. On the high-end, consumers are more willing to pay up for premium brands like Green & Black’s organic chocolate bars. On the low end, families hunt for greater discounts for products.

“We think the consumer bifurcation has been an important driver,” Hershey Chief Executive John P. Bilbrey said on an investor call, referring to the growing wage gap. Bilbrey said the company has secured more merchandising space for its products in the holiday season and expected trends to improve in the fourth quarter.

Companies ranging from Campbell Soup Co to Mondelez International Inc have spoken of similar pressures in the United States. Some have tried to introduce more products to appeal to low-income consumers at convenience stores and dollar stores.

“We are seeing a widening disparity between upper-income and lower-income” consumers, said Mondelez CEO Irene Rosenfeld in an interview.

Capitalism and technology and Stephen Hawking

October 19, 2015 18 comments

from David Ruccio

While we’re referring to the thinking of eminent scientists on capitalism and socialism, consider Stephen Hawking’s answer to a question about automation and “the possibility of technological unemployment”:

I’m rather late to the question-asking party, but I’ll ask anyway and hope. Have you thought about the possibility of technological unemployment, where we develop automated processes that ultimately cause large unemployment by performing jobs faster and/or cheaper than people can perform them? Some compare this thought to the thoughts of the Luddites, whose revolt was caused in part by perceived technological unemployment over 100 years ago. In particular, do you foresee a world where people work less because so much work is automated? Do you think people will always either find work or manufacture more work to be done? Thank you for your time and your contributions. I’ve found research to be a largely social endeavor, and you’ve been an inspiration to so many.


If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality.

Read more…

A gathering storm?

October 16, 2015 10 comments

from David Ruccio

René Magritte, Are we seeing the signs of a global economic meltdown?

Marxist and other radical economists often remind people of the inherent instability of capitalism—unlike their mainstream counterparts, who tend to focus on equilibrium and the invisible hand of free markets.

But, right now, the warnings about new sources of instability are coming from quarters that are anything but radical. And they’re all saying pretty much the same thing: National monetary policy is increasingly ineffective. Central banks are largely impotent. The IMF points to increased global economic risk because of impossible amounts of debt that will never be repaid. Creditors are way too overextended. Finance capital is out of control. Growth everywhere is threatened. China and emerging-market nations are mostly to “blame.” And so on and so forth.

Here’s a recent sample of three recent articles [ht: ja]: from the BBC, Reuters, and the Guardian. Read more…

“We estimate that the top percentile now own half of all household assets in the world.” 2015 Credit Suisse Global Wealth Report.

October 15, 2015 Leave a comment

from David Ruccio


There is a wealth of data in the 2015 Credit Suisse Global Wealth Report.

One series (which Credit Suisse began compiling last year) measures global wealth inequality. As the authors of the report observe, Read more…

Follow the gun money

from David Ruccio

In the United States, there are now somewhere between 270 million and 310 million guns, according to the Pew Research Center. That’s almost one gun for every person in the nation.

While we spend a lot of time discussing Second Amendment rights and gun-control measures, the fact is guns are big business in the United States.


According to the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, U.S. gun manufacturing has more than tripled since 2001 (from 2.9 million to 10.8 million total firearms produced). Read more…

When people start to ask questions

September 29, 2015 5 comments

from David Ruccio


Marx, it seems, just won’t go away.

According to Charles Moore in the Wall Street Journal,

When things go backward in nations accustomed to middle-class stability, people start to ask questions. What is the use of capitalism if its rewards go to the few and its risks are dumped on the many? The rights of property do not seem so enticing if the value of what you own collapses or if that property is trapped by debt. What is so great about globalization if it means that the products and services you offer are undercut by foreign competition and that millions of new people can come to your country, take your jobs and enjoy your welfare benefits?

Great international banks and other corporations—and their top executives—can devise a life that escapes normal tax jurisdictions. Their successes are globalized and accrue chiefly to them; their failures crawl back home to die, at the expense of the rest of us.

So instead of feeling that it is a privilege to be an ordinary citizen of a free country, many of us start to feel a bit like suckers. Hope—the inseparable companion of progress—fades and is replaced by disappointment, even bitterness. It has always been understood that opportunity carries some price of insecurity, but what happens if insecurity rises and opportunity contracts?

Read more…

6-hour day?

September 25, 2015 Leave a comment

from David Ruccio

Back in the nineteenth century, the union movement demanded an 8-hour workday.

Here’s the question I often pose to my students: when did the United States finally pass legislation limiting the workday to 8 hours? It’s a trick question, of course. The answer is: never.


Read more…

The fundamental truth about American economic growth

September 21, 2015 5 comments

from David Ruccio

1percent grand compromise

Ray Fisman and Daniel Markovits suggest that we’re seeing right now, with the insurgent campaigns of Donald Trump and Bernie Sanders and elite hopes that they will just fade away, are “early skirmishes in a coming class war.”

Why? Because their research (along with coauthors Pamela Jakiela and Shachar Kariv, just published in Science) revealed stark differences between attitudes toward economic justice between ordinary Americans and those at the top. Basically, the elites (both intermediate and extreme) are much more likely to be selfish as their compatriots in general. What’s more, elite Americans show a far greater commitment to efficiency over equality than ordinary Americans.  Read more…

What recovery?

September 19, 2015 5 comments

from David Ruccio


The United States is more than six years into the officially designated and much-vaunted economic recovery from the Great Recession. But most Americans wouldn’t know it.  Read more…

Hide the gap?

September 17, 2015 Leave a comment

from David Ruccio

chart (1)

We know that economic inequalities have been increasing in the United States for decades now. And there’s been no let-up since the economic recovery was officially declared in 2009.

And many of us believe the grotesque inequalities we’re seeing these days have a corrosive effect on U.S. society. Not only are the majority being left behind; everything from the public infrastructure to political discourse appears to be deteriorating because of the growing gap between a small group at the top and everyone else. Read more…

Share of corporate income received by US workers from 1979 to 2015.

September 14, 2015 Leave a comment

from David Ruccio


This chart illustrates the share of corporate income received by workers (in the form of wages and benefits) from January 1979 through April 2015.

As the Economic Policy Institute explains, Read more…


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