Corporate tax whiners

Corporate America is mad that the Inflation Reduction Act (IRA)—which may actually reduce inflationary pressures over the long term, if not now—will raise its taxes. The Financial Times has a nice collection of bleats from their trade associations: The bill would impose “significant new tax increases and unprecedented government price controls”, the US Chamber of Commerce warned. Its tax provisions would deal “a blow to our industry’s ability to raise wages, hire workers and invest in our communities”, said the National Association of Manufacturers. The Business Roundtable, which represents blue-chip companies in Washington, estimated… Read More

Productivity stinker

In yesterday’s post about chronically low levels of investment, I concluded that they’ve “given us stagnant productivity growth and a collapsing infrastructure.” This morning, the Bureau of Labor Statistics (BLS) confirmed the productivity part. For the year ending in the second quarter, it was down 2.5%, the worst in the series’ 75-year history.  Productivity sounds like one of those things only the orthodox worry about, but it doesn’t have to be. Its most common form, labor productivity, is a measure of how much a worker can produce in an hour on the job. While… Read More

Washington will pick up the check

Semiconductor firms are about to get showered with cash thanks to a new bill, The CHIPS and Science Act of 2022—CHIPS standing for, cleverly, The CREATING HELPFUL INCENTIVES TO PRODUCE SEMICONDUCTORS Act. Because it involved free money for capitalists, 17 Republicans (out of 50) voted for it despite their habit of voting against almost anything supported by Democrats except money for the Pentagon. Biden is scheduled to sign it on Tuesday, August 9. It’s a $280 billion package designed to encourage semiconductor manufacturing and research in the US. Pundits and generals have… Read More

America: the rot goes on

It’s been a while since I looked at one of the major reasons for the pervasive sense of rot about the US: the low level of investment—investment in real things, that is, not crypto. It’s barely keeping up with the forces of decay. If you’re wondering why nothing works and everything seems to be falling apart, here are some explanations. First a definition: investment is spending by businesses, governments, and individuals on long-lived physical assets like buildings and machinery. Gross investment is the dollar value of such spending; net is what remains… Read More

Fresh audio product: two views of British politics, Tory and Labour

Just added to my radio archive (click on date for link): August 4, 2022 Simon Kuper, Financial Times columnist and author of Chums, on the upper-class caste that’s been ruling Britain for a decade • James Meadway, director of the Progressive Economy Forum, on the dispiriting economics of the leader of the Labour Party, the drab Kier Starmer