Diane Coyle — Our Gilded Age (India version)

Short review of FT’s former Mumbai bureau chief James Crabtree’s The Billionaire Raj.

The theme of the book is corruption, and its co-evolution with the Indian economy as the ‘licence raj’ restrictions were progressively removed, and new sectors like telecoms grew dramatically. In this new world, the super-wealthy businessmen and the politicians found they needed each other: the deployment of legislation and contracts helped the former, the opportunity to take part in business helped the latter. As one of the interviewees puts it: “They [the politicians] are saying: ‘We don’t want briefcases full of cash and Swiss bank accounts and all that any more. We want to own businesses ourselves. We want equity stakes.”...

The Enlightened Economist
Our Gilded Age (India version)
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Evan Osnos — Doomsday Prep For The Super-Rich

Some of the wealthiest people in America—in Silicon Valley, New York, and beyond—are getting ready for the crackup of civilization.

This is like the captain being the first to abandon ship.

The New Yorker
Doomsday Prep For The Super-Rich
Evan Osnos

Brad DeLong — The Melting Away of North Atlantic Social Democracy

Assessment 

When I try to evaluate the state of the debate over Thomas Piketty's Capital in the Twenty-First Century two years after its first (French) publication, I find myself driven to three conclusions. The factors that Piketty identifies as leading to the melting-away of the social-democratic North Atlantic economy are operating, but so far their effects on income and wealth inequality have been smaller than other largely-unrelated factors that have been operating in the past generation and generating the rise of housing as a source of wealth and the rise of the super-incomes. Piketty's factors have been supercharged by other forces over the past generation, but that does not mean that they are not at work—and, in fact, reinforces the chances that Piketty's inequality-driving factors will be of decisive importance over the next seventy years. The question of whether our road leads to Piketty (2014)—a new Belle Époque plutocracy—or Keynes (1936)—a euthanization of the rentier in which the wealth of the rich is outlandish but their incomes are not due to low rates of profit—hinges on our politics. And our politics is something we can control.

We as a civilization could decide that we are not willing to let money talk so loudly in politics. We could keep our politics from being one of establishing monopoly after monopoly and rent-extraction chokepoint after rent-extraction chokepoint. If we manage that, then the forecasts of Keynes (1936) and Rognlie (2015) will come true, and a rise in wealth accumulation will carry with it a fall in the rate of profit, and a highly-productive not-too-unequal society.

But right now money talks very loudly indeed. And I leave the Piketty debate more depressed about our ability to keep it from talking so loudly. What makes me more depressed? The Piketty debate itself does: The eagerness of so-many economists to aggressively make so many shoddy arguments that Piketty does not know what he is talking about.

Talking Points Memo
The Melting Away of North Atlantic Social Democracy

J. Bradford DeLong

Collapse of the US Middle Class — Ehrenrichs unload on the 1%

The old conservative dictum -- that it was unwise to criticize (or tax) the rich because you might yourself be one of them someday -- gave way to a new realization that the class you were most likely to migrate into wasn’t the rich, but the poor.

Read it at TruthOut
The Making of the American 99 Percent and the Collapse of the Middle Class
by Barbara Ehrenreich and John Ehrenreich, TomDispatch/The Nation | Op-Ed

Pretty scathing indictment.

Where other once-wealthy nations have a safety net, America offers a greased chute, leading down to destitution with alarming speed.

I experienced this first-hand a couple of years ago when I helped out a guy who I was vaguely acquainted with in the Sixties. He had become a millionaire and had accumulated lots of toys. But then he used up most of his funds paying for treatment of his sister's debilitating illness which ran up huge bills before she succumbed. He then got caught in a downward spiral due to a business deal gone bad. It proceeded so fast he was unable to liquidate stuff fast enough to meet his cash flow requirement. So he found himself on the street, where he eventually got beat up. It was a really ugly scene that no one should ever have to go through. But there are also a lot of people that live in these circumstances from childhood. All they get to experience is the down. No excuse for it.