Author Archive

Cult of CEOs

February 5, 2016 4 comments

from David Ruccio

The United States suffers from an obscene cult of CEOs. Whether we’re talking about “Neutron Jack” Welch (who was celebrated for raising GE’s market value while laying off tens of thousands of workers) or Bill Gates (who made Microsoft competitive by engaging in anticompetitive practices) or Lloyd Blankfein (head of the “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”)—they’re routinely feted as being ruthless, “transgressive” leaders who make change happen in the corporate world.

I suppose it comes as no surprise, then, that two business professors—Hamid Bouchikhi and John R. Kimberly [ht: kc]—would extend that celebration to CEOs in the academy, by studying the decision by Dean of Arts and Letters Mark Roche to divide the Department of Economics at the University of Notre Dame.* Read more…

Inequality of opportunity (3 graphs)

February 4, 2016 1 comment

from David Ruccio


It’s impossible to defend the grotesque—and growing—levels of inequality that characterize U.S. capitalism.

But, as they have throughout American history, some people still try. Their most common argument is that there’s nothing wrong with unequal outcomes as long as there is equal opportunity.*  Read more…

A case for reparations?

January 27, 2016 2 comments

from David Ruccio

In the summer of 2014, Ta-Nehisi Coates made headlines by announcing that he had changed sides and was now in favor of reparations to African-Americans (accompanied by an explanation of why, in contrast to four years earlier, he had changed his mind). Two weeks ago, Coates made headlines again by criticizing Bernie Sanders for opposing “reparations for slavery” (accompanied, a week later, by a defense of his critique of Sanders).

Needless to say, this is a sensitive debate, one that over time might contribute to the development of a progressive movement in the United States but also one that, at the present moment, threatens to undermine the fragile foundations of that movement. So, I want to step lightly and, instead of taking a firm position, merely raise a few issues for further discussion. Read more…

Emotion vs. fundamentals?!

January 26, 2016 5 comments

from David Ruccio


Most of us have little understanding of what makes equity markets move in one direction or another.

A long time ago, one of my professors explained to me: “It’s 5 percent fundamentals; the rest is determined by however big investors feel when they wake up in the morning.”

What about the experts? Well, according to Adena Friedman, president and chief operating officer of Nasdaq Inc.,

“Once emotion comes out of the market, fundamentals should prevail.”

Really, in markets that are by their very nature speculative, how can one distinguish between emotions and fundamentals?!

Read more…

1% + 99%, 62 = 50%

January 20, 2016 1 comment

from David Ruccio


The current global distribution of wealth makes as much sense as the math in the title I’ve chosen for this post.

According to a new report from Oxfam (pdf), “An Economy for the 1%,” based on data from Credit Suisse (pdf), Read more…

Percent change in U.S. real wages by income percentile, 2007-2014

January 16, 2016 1 comment

from David Ruccio


source Read more…

How does the 1 percent capture the surplus?

January 14, 2016 2 comments

from David Ruccio


The share of income captured by the 1 percent more than doubled (from 10 to 20.1 percent) between 1980 and 2013.

How did they do it?

Read more…

Divergence at the top in the U.S.

January 10, 2016 2 comments

from David Ruccio


I don’t attend the American Economic Association annual meetings. And I’m not in San Francisco this year. However, according to Nelson D. Schwartz, mainstream economists have finally discovered the obvious: income inequality is a real problem in the United States. Read more…

Production of inequality ignorance and knowledge

January 4, 2016 5 comments

from David Ruccio

One Percent

Greg Mankiw is not sure why we’re talking about income inequality now: Read more…

Tax rates for top 400 earners in the US – 1992 to 2012

January 3, 2016 2 comments

from David Ruccio


Each of the top 400 U.S. taxpayers took home, on average, about $336 million in 2012—but they only paid 16.72 percent in federal income taxes. That’s down from tax rates in the 28-29 range in the early 1990s, according to the latest data from the Internal Revenue Service (pdf).

What happened? Basically, the tiny group at the top has used a portion of the surplus they’ve been able to capture—amounting to about $134 billion or 1.5 percent of U.S. (adjusted gross) income—to purchase favorable tax policy and hire an army of lawyers and accountants to shield much of their income from U.S. taxes.

In the meantime, their incomes have grown dramatically: on average (in 1990 dollars), from $47 million in 1992 to $76 million in 2012, and, as a total (also in 1990 dollars), from $17 billion to $76 billion.

As F. Scott Fitzgerald explained, these careless people, who smash up things and creatures, are able to retreat back into their money and let other people clean up the mess they have made. . .

World arms industry statistics by country (4 tables and charts)

January 1, 2016 3 comments

from David Ruccio


Last year, the United States led the world in arms sales, with a total of $36.2 billion in worldwide arms transfer agreements. Russia took a distant second place with $10.2 billion in agreements, out of a global total of $71.8 billion in 2014.

Read more…

Country on the verge of an economic breakdown

December 23, 2015 3 comments

from David Ruccio

Spain wages and total employees

According to those in charge, Spaniards should have been thrilled. After years of stagnation, the country has in fact been growing. Read more…

Council of monkeys – 12 exhibits comparing the U.S. to other countries

December 21, 2015 3 comments

from David  Ruccio

Business people and investors in the United States have a reputation, even after the spectacular crash of 2008, to be worldly, no-nonsense, bring-it-on types. They’re supposed to know what is going on in the world and to react to the news with dispatch, making the hard decisions that lead to efficient outcomes.

However, they’re actually like a council of monkeys, sitting on a pile of cash: hear no bad news, see no bad news, speak no bad news.  goin_council-of-monkeys_black-duke-of-lancaster

According to Jeremy Grantham [ht: ja], cofounder and chief investment strategist of Grantham Mayo van Otterloo, a Boston-based asset management firm, business people and investors actually have a “preference for good news over accurate news.”

a while ago I came up with a list of propositions that are widely accepted by an educated business audience. They are widely accepted but totally wrong. It is my attempt to bring home how extreme is our preference for good news over accurate news. When you have run through this list you may be a little more aware of how dangerous our wishful thinking can be in investing and in the much more important fields of resource (especially food) limitations and the potentially life-threatening risks of climate damage. Wishful thinking and denial of unpleasant facts are simply not survival characteristics.

Grantham then proceeds to show how wrong they are—with a series of arguments and charts that, in his view, challenge an “educated business audience.”  Read more…

Higher education in the US has a Koch problem

December 18, 2015 2 comments

from David Ruccio

It used to be the case that, for the most part, the Koch brothers were bottom-feeders when it came to higher education. They approached (or were approached by) financially strapped schools that were only too willing to sell their academic-freedom souls for relatively small infusions of cash.

The exception was, of course, George Mason University, the largest public research university in the Commonwealth of Virginia, which took in just under $80 million from Koch foundations from 2005 to 2014.

Now, the grants are getting larger and the recipients much richer and more prominent. In some cases, the Koch brothers are supporting right-wing, free-market scholars and programs; in other cases, they’re buying the prestige based on an association with highly ranked colleges and universities. And, of course, a mixture of the two.

Here are three recent examples: Read more…

Wages, profits, and inequality

December 10, 2015 7 comments

from David Ruccio

One of the legacies of the hegemony of neoclassical economics in the postwar period was a general lack of interest in issues pertaining to inequality, especially the analysis of the role of class in causing inequality in the distribution of income.

Unlike both classical economists (such as David Ricardo) and critics of classical economics (such as Karl Marx), postwar neoclassical economists weren’t much concerned with the class—or, as they referred to it, the functional—distribution of income. The argument was that factor (labor and capital) shares were relatively constant and therefore not particularly important in explaining economic inequality or much of anything else.

Well, that has changed in recent decades, with growing inequality, the decline in the labor share, and the rise in the capital share of national income. The relation between class and inequality simply can’t be ignored any longer.

Or can it?  Read more…

“It’s like they’re running a business, a real business” (4 tables)

December 9, 2015 5 comments

from David Rucciocomunity college leaders cash in_0

As Donald Trump put it: “You look at the kind of salaries paid to the heads of the colleges—it’s like they’re running a business, a real business.”

Indeed they are, to judge by the salaries reported by The Chronicle of Higher Education, for 2013.  Read more…

6 and1/2 years into the “recovery” but little has been recovering except corporate profits and incomes for the 1 percent.

December 5, 2015 11 comments

from David Ruccio



The United States is six and a half years into the current “recovery” but little has been recovering except corporate profits and incomes for the 1 percent.

That’s because spending—both consumer spending and business investment—have basically stopped growing. And, within capitalism, when spending slows down, the economy as a whole stops growing and threatens, once again, to falter.

Read more…

Greenhouse-gas emissions: current level, proposed level and level needed to avoid calamity

December 3, 2015 6 comments

from David Ruccio

cc math

The math behind the chart starts with the “carbon budget“: Read more…

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…


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