Times Rich List, Piketty and Inequality

At a time when there is heightened awareness about inequality it is astounding that serious (?) media commentators suggest that the (Times) Rich List 'should be taught as a set text to inspire the next generation of risk takers'.
Quite how this inspiration should work in detail the author leaves to our imagination. It certainly is not possible to become the next Duke of Westminster, one of the rare true British members of the top ten entrants in this year's list.
And how one should emulate the various oligarchs and tax exiles - some of feature only because they chose the right parents - could also be of great interest to those lucky or unlucky enough to be given the benefit of these lectures.
It would also be interesting during which class these lectures would be held. Religion, Philosophy, Politics or Economics?
The really sad thing with this sort of fawning at the superrich 0.01% is the fact that there is very little reporting about the reasons such extreme wealth can be accumulated and what should be done to prevent it. Not a word about fairer tax laws, more effective inheritance taxes, better regulation, less generous copyright protection or a wider spread of ownership of productive assets.

Socially useless Economists?

Starting a discussion about which economic activities are or are not 'socially' useful opens a can of worms. Is Opera - or Music in general - socially useful? or hairdressing beyond simply chopping off surplus hair? Opinions will differ widely and the last thing we want is to leave the answer to this question to authorities, be they religious (we had enough of that for 2000+ years), political or - academics. The discussion about the merits (or lack thereof) of High Frequency Trading (HFT) illustrates this very well. While I have often argued that the rules of the stock exchange should be adjusted so that the rules of 'priority and precedence' are brought up-to-date for the internet age it is means overkill when economists or regulators attack the activity per-se claiming that it is socially useless. That may well be the case. Participants may see it as just another form of gambling (Casinos are also a negative sum game for the punters) and should be free to enjoy their game...as long as they are collectively willing to accept the net negative costs associated with this activity. And I am gentleman enough not to question Mr. Stiglitz' social usefulness.

Higher taxes no solution for Income Inequality

Robert Shiller is too much focused on the simple expedient of higher taxes for the rich (however defined) as a tool to stop rising inequality. It may well paper over the underlying malaise but does little to change the reasons behind the increase in differences between income (and even more importantly, wealth) disparities in the USA and many other countries. Only a thorough review of policies concerning the way the capitalist system works (ownership of productive assets, capital gains and inheritance taxes, intellectual property rights, educational policies to name just a few) will lead to a substantial reduction in inequality.

Sanctions on Russia may backfire

Sanctions seem to have replaced actual warfare as the preferred weapon these days. But are sanctions imposed on Russia in the wake of the annexation of Crimea going to have the intended effect? More than in other cases of (usually futile) sanctions the latest version of sanctions will have little effect - or even backfire on the sponsors in the 'West'. A look at the map makes it clear that Russia is not just any country that can be bossed around 'gunship style'. It is a whole continent! So self-sufficiency should not be a problem. And looking at economic history a period of isolation from the world markets, esp the main economies, should actually do wonders for the development of a competitive domestic industry. Do Russians - the broad mass of people, not the oligarchs - really need to buy BMW's or other high-end luxuries from the West? The USA and Germany have expanded their domestic industries behind tariff walls, and the English navigation act has contributed substantially to the rise of British sea power. Cutting off access to international financial markets will not lead to the default by Russian borrowers as predicted in some places. Russia can simply declare 'Force majeure' and refuse to pay back the loans if they are not rolled over at the behest of unaccountable political lobbies. The USA have only minor trade relationships with Russia, but therefore Russia is not much exposed to any lost trade with that country either. And the EU may be a substantial partner, but the world is large enough, there is China, India, Brazil etc. And if Russia really gets needled too much it can make overtures to Iran and other states therefore setting the cat among the pigeons.

Economists - just Idiot Savants?

It makes the blood boil when one reads about highly (overpaid?) economists sitting in tenured positions in Academia suggesting outright thievery as their preferred solutions to our economic problems. Debt repudiation and wealth taxes are not the only solution to the problems that indebted nations face. The debt mountain can be reduced the same way it has been built up - by small incremental changes over a long period of time, decades, not years. Deficit spending really came into fashion during the 1970s - on the advice of an earlier generation of  Idiot Savants. That the Nobel prize is now being awarded for what in many cases is only a thinly-disguised for of quackery devalues the prizes given to those for 'hard' science. And let's not even remember the Peace Nobel prize awarded to Obama!

Summers regurgitates tired old macro cliches

Guessing what the 'correct' or 'true' natural interest rate is may be a worthwhile passe temps for tenured university professors like Larry Summers but it is of little use to explain/solve the pressing economic problems of our time. Such as Unemployment or Inequality. Both have little to do with macro economic mumbo jumbo but a lot with poorly designed policies and laws. Note the circular congratulations to Stanley Fischer etal - the world of 'celebrity' economists is a small one, but maybe a larger talent pool would not be such a bad thing, given the unhealthy trends in the world economy.

Economics for simple Minds - Unions are bad for Growth (Stelzer)

Economics is not an exact science, if it is a science at all. For that reason ideological prejudices are often hidden in simple statements such as this one: 'A Union revival that will hurt Growth' (Irwin Stelzer, The Weekly Standard). 
Unions may well have created all sort of economic and political havoc but before one makes the statement one should first check the facts: was economic growth really slower when union 'power' was higher? And what about the distribution of the growth? What is growth worth if only a very small minority benefits - today's equivalent of the Robber Barons and their hangers-on?