- Paul Krugman writes that the only real difference between the latest global crisis and past depressions is that we've moved further and further toward a rent-based economy - meaning that aggregated growth doesn't necessarily result in any benefit for the vast majority of people:
(T)here is at least one important respect in which the 21st-century economy is different in a way that ought to have a significant effect on macroeconomics: the much larger role of rents on intangible assets. This isn’t an original insight, but I haven’t been finding systematic analyses of the point.
What do I mean by the role of rents? Consider the changing identity of the most valuable company in America. For a long time, it was GM, then Exxon, then IBM. These were companies with huge visible production activities: GM had more than 400,000 employees, which was amazing when you consider that the overall national work force was much smaller than the one we have today, Exxon had oil refineries. IBM was an information technology company, but it still had many of the attributes of an old-style manufacturing giant, with many factories and a large, well-paid work force.- And the Huffington Post Canada reports on one obvious example of that effect - as Canada's millionaire class saw five times as much growth in the wealth as the average household.
But now it’s Apple, which has hardly any employees and does hardly any manufacturing. The company tries, through fairly desperate PR efforts, to claim that it is indirectly responsible for lots of US jobs, but never mind. The reality is that the company is basically built around technology, design, and a brand identity.
There are a couple of obvious implications from this change in the nature of corporate success. One is that profits are no longer anything remotely resembling a “natural” aspect of the economy; they’re very much an artifact of antitrust policy or the lack thereof, intellectual property policy, etc. Another is that a lot of what we consider output is “produced” at low or zero marginal cost.
- The Huffington Post also discusses the World Bank's link between poverty and climate change:
The World Bank says it will increasingly view its efforts to help developing countries fight poverty through a "climate lens."- And Stephanie Levitz reports on the Canadian Alliance to End Homelessness' study showing the cost of homelessness in Canada to be over $7 billion per year.
In a report released Wednesday, the international lending institution warned that heat waves, rising seas, more severe storms and other impacts of climate change will trap millions of people in poverty.
As a result, the Washington-based bank said it is stepping up support for efforts to curb climate change and to help the world adapt to it.
In a conference call, bank Vice President Rachel Kyte said the World Bank doubled its lending aimed at adaptation efforts to $4.6 billion in 2012.
She said that money was separate from the adaptation funds transferred from rich to poor countries in U.N. climate talks. The developed countries have pledged to ramp that financing up to $100 billion annually by 2020. Critics say that won't be enough, pointing to the New York's recently announced $20 billion plan – for that city alone – to stave off rising seas with flood gates, levees and other defenses.
- Finally, Dennis Howlett points out that the Cons' attempts to paper over tax evasion won't accomplish much without Canada also participating in a global push for corporate transparency.