The Bottom Line
1. An economy is more than a set of accounts: it's a system of production and distribution.
2. Some people get rich, some get poor; sometimes overall economy grows sometimes it falters. Not even the best economists in the world understand exactly how it works
1. Owners
1. Them that's got usually get. Individuals compete against each other in a capitalist economy, their success partly determined by the wealth they bring to the market. When they leave those who started out wealthy take home even more
2. The richest 10% of all households hold 80% of the financial wealth in America. The bottom 80% of households have only 9%.
3. Wealth bestows more than higher standard of living. It also provides the means for influencing political outcomes.
4. Concentrated economic power can lead to crimes enormously costly to society.
5. Those who enjoy advantages of wealth have benefited from Republican control of Congress and the presidency.
6. Distribution of financial wealth, 1983 - 2001
9. Macroeconomics
Macro focuses on factors that affect average incomes, employment and economic growth. Macroeconomic forces can be formidable, since their influence permeates the economy. Powerful institutions, such as the Federal Reserve Banking System, attempt
1. Racial Inequality has many dimensions, including unequal exposure to economic waste. Percentage of Hispanic, African American, or Asian American/Pacific Islander exposed to carcinogenic pollution rose. Even when blacks, Hispanics and whites of equal income are compared, nonwhites are likely to live in the most polluted sections of American cities. Discrimination in bank loans and housing may contribute to this pattern.
2. Regulatory Capture - When companies are tempted to put private profits ahead of public health, government regulation to protect public interest becomes especially important. But regulations are hampered when EPA administrators are concerned with keeping politicians happy than safeguarding the environment.
10. Global Economy
1. Federal Reserve banking system, attempt to steer the economy by influencing interest rates and inflation. But stock market crashes, trade imbalances, and skittish investors can knock the economy off course
2. The NBER (National Bureau of Economic Research) determines the dates of business cycles by deciding when the recessions begin and end.
3. The Genuine Progress Indicator (GPI) provides an alternative measure of economic well being. It adds the value of non market activities such as household volunteer work and subtracts the costs of pollution, resource depletion and loss of leisure time. This indicator paints a very different picture of the amount of progress we have made in recent years. While the per captia GDP tripled between 1950 and 2002, per captia GPI has been stagnating for decades.
4. A stock market bubble and unusually low interest rates helped prop the growth in the 1990s.
5. Consumption Gap - Investment has exceeded savings, which is possible only because of availability of resources from abroad. Without this foreign boost, net investment would fall even further.
6. Labor Productivity - New Tech, better equipment,
1. An economy is more than a set of accounts: it's a system of production and distribution.
2. Some people get rich, some get poor; sometimes overall economy grows sometimes it falters. Not even the best economists in the world understand exactly how it works
1. Owners
1. Them that's got usually get. Individuals compete against each other in a capitalist economy, their success partly determined by the wealth they bring to the market. When they leave those who started out wealthy take home even more
2. The richest 10% of all households hold 80% of the financial wealth in America. The bottom 80% of households have only 9%.
4. Concentrated economic power can lead to crimes enormously costly to society.
6. Distribution of financial wealth, 1983 - 2001
- Bottom 80% got $1 Trillion
- Next richest 19% got $9 Trillion
- Richest 1% got $10 Trillion
7. Are CEOs worth it ? Higher pay does not guarantee superior performance; companies with highest-paid CEOs often do worse than other firms. While Oracle was making Ellison a very, very rich man, the market value of the company fell 57% and nearly 1300 workers were laid off.
8. How did the richest people in America get their money ?
- Some emphasized privilege, like inheritance and race. Others emphasized government-provided services, liked subsidized college tuition and investments in technological research. And other noted old-fashioned luck
9. Scraping By - Income and wealth are related in two ways. People with high incomes can accumulate wealth, and this wealth can generate additional income. But for most people, income is just a means of surviving.
10. Inequality Hurts - Extreme inequality reduces people's sense of inclusion in the larger community. It reduces the likelihood that they will be able to work together to solve problems. It also contributes to overt forms of social conflict.
11. Everyone knows that money talks, but in American politics it positively screams. In 2004 elections, oil, gas and coal companies contributed 15 times the amount environmentals did, and the defense industry contributed more than four times as much as human rights advocates.
8. How did the richest people in America get their money ?
- Some emphasized privilege, like inheritance and race. Others emphasized government-provided services, liked subsidized college tuition and investments in technological research. And other noted old-fashioned luck
9. Scraping By - Income and wealth are related in two ways. People with high incomes can accumulate wealth, and this wealth can generate additional income. But for most people, income is just a means of surviving.
10. Inequality Hurts - Extreme inequality reduces people's sense of inclusion in the larger community. It reduces the likelihood that they will be able to work together to solve problems. It also contributes to overt forms of social conflict.
11. Everyone knows that money talks, but in American politics it positively screams. In 2004 elections, oil, gas and coal companies contributed 15 times the amount environmentals did, and the defense industry contributed more than four times as much as human rights advocates.
9. Macroeconomics
Macro focuses on factors that affect average incomes, employment and economic growth. Macroeconomic forces can be formidable, since their influence permeates the economy. Powerful institutions, such as the Federal Reserve Banking System, attempt
1. Racial Inequality has many dimensions, including unequal exposure to economic waste. Percentage of Hispanic, African American, or Asian American/Pacific Islander exposed to carcinogenic pollution rose. Even when blacks, Hispanics and whites of equal income are compared, nonwhites are likely to live in the most polluted sections of American cities. Discrimination in bank loans and housing may contribute to this pattern.
2. Regulatory Capture - When companies are tempted to put private profits ahead of public health, government regulation to protect public interest becomes especially important. But regulations are hampered when EPA administrators are concerned with keeping politicians happy than safeguarding the environment.
10. Global Economy
1. Federal Reserve banking system, attempt to steer the economy by influencing interest rates and inflation. But stock market crashes, trade imbalances, and skittish investors can knock the economy off course
2. The NBER (National Bureau of Economic Research) determines the dates of business cycles by deciding when the recessions begin and end.
3. The Genuine Progress Indicator (GPI) provides an alternative measure of economic well being. It adds the value of non market activities such as household volunteer work and subtracts the costs of pollution, resource depletion and loss of leisure time. This indicator paints a very different picture of the amount of progress we have made in recent years. While the per captia GDP tripled between 1950 and 2002, per captia GPI has been stagnating for decades.
4. A stock market bubble and unusually low interest rates helped prop the growth in the 1990s.
5. Consumption Gap - Investment has exceeded savings, which is possible only because of availability of resources from abroad. Without this foreign boost, net investment would fall even further.
6. Labor Productivity - New Tech, better equipment,