What to do when Jon Stewart is the most interesting economic analyst on cable news?
Archive for August, 2011
I don’t think we have posted this one yet [ht:jm]:
But actually it is quite well done and fairly witty. And it gets to some important points about inflation that have been discussed by others: there are winners and losers. That is, economic actors are affected differently depending on their position in the economic system.
Drew Weston wrote a wonderful piece in The New York Times about “What Happened to Obama’s Passion?” [ht:ck]. Given how much we have written on this blog about economic justice and human dignity in the economy, I thought the final paragraph of the article would be particularly appropriate to post:
But the arc of history does not bend toward justice through capitulation cast as compromise. It does not bend when 400 people control more of the wealth than 150 million of their fellow Americans. It does not bend when the average middle-class family has seen its income stagnate over the last 30 years while the richest 1 percent has seen its income rise astronomically. It does not bend when we cut the fixed incomes of our parents and grandparents so hedge fund managers can keep their 15 percent tax rates. It does not bend when only one side in negotiations between workers and their bosses is allowed representation. And it does not bend when, as political scientists have shown, it is not public opinion but the opinions of the wealthy that predict the votes of the Senate. The arc of history can bend only so far before it breaks.
Conspicuous consumption plays an important role, even in our flailing economy. See the NYTimes, “Even Marked Up, Luxury Goods Fly Off Shelves”:
Nordstrom has a waiting list for a Chanel sequined tweed coat with a $9,010 price. Neiman Marcus has sold out in almost every size of Christian Louboutin “Bianca” platform pumps, at $775 a pair. Mercedes-Benz said it sold more cars last month in the United States than it had in any July in five years.
Even with the economy in a funk and many Americans pulling back on spending, the rich are again buying designer clothing, luxury cars and about anything that catches their fancy. Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering — they are zooming. Many high-end businesses are even able to mark up, rather than discount, items to attract customers who equate quality with price.
In the Theory of the Leisure Class, Veblen wrote that a major force driving economic activity was competition in the pursuit of higher status: to drive the nicest car, wear the most expensive clothing, go on the most exotic vacations, so that others would see your status. Veblen wrote that this conspicuous consumption led to irrationality in purchases and wasteful spending. This article is a great reminder of how economists could progress by looking backwards once in a while.