RSS Feed

Category Archives: economic development

Hate unions, but love your occupational license?

The decline of union membership and public support for labor unions has corresponded rather precisely to the rise in the percentage of Americans who hold occupational licenses.

Occupational licensing would not have grown without broad support. Here’s an economist’s explanation of why:

Governmental officials benefit from Read the rest of this entry

What good are economists if we don’t listen to them?

Economists, as a group, have been criticized for not predicting the collapse of the economy in 2007 and 2008, even though there were a few lonely voices. We need to learn to listen to the ones who sometimes tell us what we don’t want to hear.

Here’s Raghu Rajan from his blog, Fault Lines: Read the rest of this entry

Our surprising preferences for distribution of income and wealth

Regardless of political affiliation, Americans are remarkably close in their opinions of how wealth would be ideally distributed, according to economists Dan Ariely of Duke University and Michael I. Norton of Harvard Business School.

The results of their survey of 5,522 Americans randomly selected from one million people in 47 states, indicated that most people overestimate the equality in the distribution of wealth and would prefer an even more equal distribution of wealth. The persons polled were asked to divide the population into five groups (“quintiles”) and to estimate how much of the total wealth each quintile owned (in 2005) and how much each group should own in an ideal world. Amazingly, people in all quintiles believe that the two poorest quintiles should have at least twice as much of the total wealth as they now own.

Arielly’s summary of the findings is in his blog, Irrationally Yours, as presented in this graph:

To move from the reality to the ideal in distribution of wealth requires redistribution of income, which can be accomplished through market forces as well as through taxes on incomes and property. In Missouri, the incomes of the lowest-earning quintile grew at a rate of 10.9% over the period from the late 1980s through the mid-2000s, while the incomes of the highest fifth grew by 35.9%, which probably represents a widening of the disparity in wealth.

Many Americans, if not most Americans, have a visceral objection to federal and state governments taking wealth from one class of citizens and giving it to another class. But those of us in the bottom 80% wouldn’t mind if somehow–without any government action–the invisible hand of the market acted as Robin Hood. And we each have our thoughts about the effect of tax policies as incentives for the rich and the poor.

What is it about our economy and our incredibly complicated tax laws that makes the existing distribution of wealth so different from a distribution that we all agree would be better? When considering whether to accept or reject change, the first step in the analysis has to be a critical look at the status quo.

Growers vs. packers vs. USDA

The disputes between growers (of cattle, hogs and poultry), the small number of purchasers (packers) and the USDA dwarfs the Shirley Sherrod affair in economic importance, especially in the Ozarks.

While the character assassination and redemption of Shirley Sherrod was essentially contrived by and blown up by the media, the real economic tensions between those who raise animals and those who buy them and convert the meat into consumer products has reached a point at which Congress in the 2008 Farm Bill asked the USDA to propose regulations to address several problems.

The problems arise out of the unequal Read the rest of this entry

Branson Landing and the dilemmas of economic development

Cliff Sain’s excellent report on Branson Landing in the July 18 Springfield News-Leader contains statements that illustrate some of the dilemmas faced by developers and local governments when planning a large project.

Branson’s aldermen (none of whom were in office when the Branson Landing project was approved for construction) have chosen to take $1.4 million from the city’s general fund and $1.2 million from the city’s transportation fund Read the rest of this entry

Mid-2010 economic outlook for the Ozarks

On January 3, 2010, I posted a glum summary of published economic reports from Federal Reserve Banks in Kansas City and St. Louis and other sources from the metro areas that surround the Ozarks. My rough guess is that the economic activity in the Ozarks is primarily generated by the surrounding metro areas, which create demand for goods and services produced in the Ozarks, an idea that looks something like: Read the rest of this entry

The defunct HOA problem continues in Missouri, legislation needed urgently

Homeowner associations (HOAs) are given responsibility by recorded subdivision and condominium documents for maintaining, insuring and operating private communities’ common properties, such as streets, drinking water systems, sewer collection and treatment systems, and recreation facilities.

With many developers having abandoned projects before the HOA is operated by residents, the residents and other lot or unit owners (such as lenders that have foreclosed) are often faced with HOAs that cannot properly Read the rest of this entry

%d bloggers like this: