Just finished Detroit: An American Autopsy. About the quickest I've ever flown through a book (I'm not the best of readers). Charlie LeDuff the author isn't Steinbeck, but I appreciate how he follows a similar intent - kind of a, it's the system's fault so no one person had control to stop it, but everyone has the responsibility to be responsible. Steinbeck would be down with that.
My last girlfriend opened me up to some solid perspective. There was an intriguing oblivity to be exposed to she brought to the relationship. Ideas like how Robert Moses was good for America, and for blatantly selfish reasons. The discrepancies were bloated - Moses essentially wanted to wall black people into the cities and make it really easy for whites to drive to the cities without actually living among them. Detroit was nothing more than niggers shooting niggers. American society can burn as long as the rich can stay rich. But at the same token, being poor was immoral and if you had a shit position in life you probably deserved it. I'm sure there's a nexus of selfishness, indifference, and ignorance that leads people to believe in the existing power structures while also not understanding why people don't just better their socioeconomic class. It's why I think more conservatives should be forced to take behavioral economics courses.
She used to jokingly refer to Red Lobster as Black Lobster, because only black people would be poor enough to want to eat there. This was regularly thrown in my face with the knowledge my parents wouldn't have been able to afford eating there when I was little. I turned into a bad person during that time; I think I'm getting better.
Showing posts with label development. Show all posts
Showing posts with label development. Show all posts
Wednesday, September 11, 2013
Saturday, February 11, 2012
Helping Someone: The Enemy of Helping Everyone?
Slate carried an article this Thursday entitled "Mobile Phones Will Not Save the Poorest of the Poor." Cell phones have received a lot of coverage regarding the opportunities they've provided in developing nations, but the claim is probably defensible - those earning $5 day can't afford phones, and therefore can't take advantage of their services.
The article immediately became more intriguing when I clicked and saw the subtitle: The Cost of Cellphone-Based Services is Hurting Large Swaths of the Developing World. I'm always up for an argument that challenges my perceptions, and the idea that cellphone access is actually a bad thing certainly offers a challenge to my paradigm.
The crux of the argument is this paragraph:
But there’s a downside to this program—and others like it—that’s too often ignored: These mobile money services do not effectively reach the poorest of the poor. In a 2010 study of M-PESA usage in Kenya, where mobile money penetration is greatest, 60 percent of the poorest quartile did not use the service. Part of the problem is access: Telecom companies have relatively little incentive to build out infrastructure, especially in poorer, rural markets.
A second argument is then made that the fees for using this service are too expensive for some people to afford.
REBUTTAL
So the poorest people are hurt because the kind-of-poor now have access to a technology that may allow them to rise to the middle class? While I'm not a huge fan of income disparity, this is an awful argument for two reasons:
1. A method for bettering a peoples' position in life should not be criticized if it's not hurting someone else. The article literally condemns upward progress because some people are not able to take advantage of new technologies that others have access to.
2. A rising tide can raise boats. Issues of inflation, exploitation, corruption, and a host of other factors will keep always keep the very poor in underdeveloped countries from achieving success. Hell, these issues prevent upward mobility in the U.S. too. But if a segment of a lower class finds itself financially secure for the first time in history, they're gonna buy more goods, pay for more services, and some of that will trickle down to rural farmers producing these goods.
I get the idealism of wanting to save everyone. I don't get the logic of decrying an opportunity to help some if it doesn't help everyone. I'll recognize that the ability to make payments on a cell phone isn't a panacea. The writers should recognize it's a helluva lot better than the status quo of five years ago.
The article immediately became more intriguing when I clicked and saw the subtitle: The Cost of Cellphone-Based Services is Hurting Large Swaths of the Developing World. I'm always up for an argument that challenges my perceptions, and the idea that cellphone access is actually a bad thing certainly offers a challenge to my paradigm.
The crux of the argument is this paragraph:
But there’s a downside to this program—and others like it—that’s too often ignored: These mobile money services do not effectively reach the poorest of the poor. In a 2010 study of M-PESA usage in Kenya, where mobile money penetration is greatest, 60 percent of the poorest quartile did not use the service. Part of the problem is access: Telecom companies have relatively little incentive to build out infrastructure, especially in poorer, rural markets.
A second argument is then made that the fees for using this service are too expensive for some people to afford.
REBUTTAL
So the poorest people are hurt because the kind-of-poor now have access to a technology that may allow them to rise to the middle class? While I'm not a huge fan of income disparity, this is an awful argument for two reasons:
1. A method for bettering a peoples' position in life should not be criticized if it's not hurting someone else. The article literally condemns upward progress because some people are not able to take advantage of new technologies that others have access to.
2. A rising tide can raise boats. Issues of inflation, exploitation, corruption, and a host of other factors will keep always keep the very poor in underdeveloped countries from achieving success. Hell, these issues prevent upward mobility in the U.S. too. But if a segment of a lower class finds itself financially secure for the first time in history, they're gonna buy more goods, pay for more services, and some of that will trickle down to rural farmers producing these goods.
I get the idealism of wanting to save everyone. I don't get the logic of decrying an opportunity to help some if it doesn't help everyone. I'll recognize that the ability to make payments on a cell phone isn't a panacea. The writers should recognize it's a helluva lot better than the status quo of five years ago.
Saturday, March 26, 2011
This video has been making the rounds on the internet and stirring up more sentiment against the formal Libyan Government:
I struggle with not wanting to diminish the harm done, and recognizing how insignificant the event really was. You can reasonably assume hundreds of women have encountered mistreatment in Libya since fighting began in February. Absent a quick reunification and proper rule of law, thousands more will follow. Rape is what happens when regions suffer destabilization, but I don't think we like to talk about it because it makes us feel icky. Anyway, body counts aren't always the best way to measure the impact of armed conflict, but these types of externalities never make it into the broader conversation surrounding military engagement.
I struggle with not wanting to diminish the harm done, and recognizing how insignificant the event really was. You can reasonably assume hundreds of women have encountered mistreatment in Libya since fighting began in February. Absent a quick reunification and proper rule of law, thousands more will follow. Rape is what happens when regions suffer destabilization, but I don't think we like to talk about it because it makes us feel icky. Anyway, body counts aren't always the best way to measure the impact of armed conflict, but these types of externalities never make it into the broader conversation surrounding military engagement.
Thursday, March 3, 2011
More Economic Fact-Busting: Commodities v. Grocery Bills
Commodity prices have a big impact on food prices, but not in the way you think. It costs more to transport your box of cereal from Battle Creek, MI to Concordia, KS than the actual corn in the box did. According to the USDA, for every dollar we spend on food, farmers get about 16 cents from the sales of raw food commodities. This is because we like our food really, really refined. And then truck it all over the country. There really is nothing worse than unprocessed foodstuffs.
The above is very valid. However, the story changes as we move into more developing markets. In those countries that rely on more basic grains for their consumption without all the fructose, packaging, and marketing, the raw price of commodities becomes a significant portion of food sales.
I think this is an important distinction that no one is willing to make. The ethanol opposition decries biofuels as the reason for the rising cost of food in the grocery store if wheat goes up $3/bushel. Fortunately for us, bread only increases four cents a loaf – a fairer villain is oil speculators betting on Libyan politics. Yet ethanol supporters can’t wash their hands of food riots in developing nations using this same logic. When you purchase wheat and corn directly to make flour and tortillas, a 50% increase in crop commodities means your food bill just went up 50%. That’s a lot when you make less than $2.50/day (see: 50% of the world).
Conclusion: be thankful you live in a developed country whenever soybean prices spike, because their fluctuations don’t impact people nearly as much in the U.S. as they do in Nicaragua. I don’t like people who are ignorant about the real impacts of crop commodity prices on their grocery bill.
The above is very valid. However, the story changes as we move into more developing markets. In those countries that rely on more basic grains for their consumption without all the fructose, packaging, and marketing, the raw price of commodities becomes a significant portion of food sales.
I think this is an important distinction that no one is willing to make. The ethanol opposition decries biofuels as the reason for the rising cost of food in the grocery store if wheat goes up $3/bushel. Fortunately for us, bread only increases four cents a loaf – a fairer villain is oil speculators betting on Libyan politics. Yet ethanol supporters can’t wash their hands of food riots in developing nations using this same logic. When you purchase wheat and corn directly to make flour and tortillas, a 50% increase in crop commodities means your food bill just went up 50%. That’s a lot when you make less than $2.50/day (see: 50% of the world).
Conclusion: be thankful you live in a developed country whenever soybean prices spike, because their fluctuations don’t impact people nearly as much in the U.S. as they do in Nicaragua. I don’t like people who are ignorant about the real impacts of crop commodity prices on their grocery bill.
Monday, November 22, 2010
Corporations Aren't People (Don't Tax Them)
I don't like corporate income taxes, and would prefer them to be reduced if not eliminated. I justify this with a desire to also retool marginal income tax rates and taxes on dividends that, while not empirically driven, does a good job conforming to my world view. I'm more than happy to tell you about why I'm pretty sure I'm more right than other people on this if you like.
One interesting aspect of my modification is the implication on capital investments. Currently, firms can write off the depreciation in value of their capital purchases (e.g., computers, trucks, and machinery). This would be eliminated when no taxes are ever paid. The new equilibrium probably has a different bundle with fewer capital inputs - there's less comparative advantage to buying more things.
However, I'm more curious about the implications for economic stimulus. Governments will temporarily grant accelerated depreciation schedules so that firms can write off investments sooner, making the investment 'cheaper' and spurring economic growth. As the Obama Administration continues debating how to give companies breaks that encourage economic development, it would be interesting to see how the discussion changes once you can no longer write off depreciation (because you're not paying taxes in the first place).
Other methods to use tax breaks to induce growth still exist - the biggest being payroll tax reductions. This year, stimulus policy provided the opportunity to avoid payroll taxes on new hires that had been previously unemployed. Making this the only option (since you can't depreciate your capital) means that we can encourage firms to hire, but not necessarily make things. Given the likelihood the government actually goes along with this (none), I say we make Delaware our own personal laboratory for implementing different tax schemes every five years and assessing the impact. If we find a successful formula, awesome. If things go horribly wrong, no worries - nobody cares about Delaware.
One interesting aspect of my modification is the implication on capital investments. Currently, firms can write off the depreciation in value of their capital purchases (e.g., computers, trucks, and machinery). This would be eliminated when no taxes are ever paid. The new equilibrium probably has a different bundle with fewer capital inputs - there's less comparative advantage to buying more things.
However, I'm more curious about the implications for economic stimulus. Governments will temporarily grant accelerated depreciation schedules so that firms can write off investments sooner, making the investment 'cheaper' and spurring economic growth. As the Obama Administration continues debating how to give companies breaks that encourage economic development, it would be interesting to see how the discussion changes once you can no longer write off depreciation (because you're not paying taxes in the first place).
Other methods to use tax breaks to induce growth still exist - the biggest being payroll tax reductions. This year, stimulus policy provided the opportunity to avoid payroll taxes on new hires that had been previously unemployed. Making this the only option (since you can't depreciate your capital) means that we can encourage firms to hire, but not necessarily make things. Given the likelihood the government actually goes along with this (none), I say we make Delaware our own personal laboratory for implementing different tax schemes every five years and assessing the impact. If we find a successful formula, awesome. If things go horribly wrong, no worries - nobody cares about Delaware.
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