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How about setting a maximum wage for government officials and top-paid government contractors?

Here’s how it would work: If the minimum wage for employees of federal contractors rose to $10.10 an hour from $7.25, the president’s $400,000 salary would move to 20 times that of the lowest-paid worker, from roughly 27 times.

We should then enact laws to ensure that top-paid federal executives — and, critically, top-paid executives of companies that do business with the federal government — are never paid in excess of 20-to-1 (or perhaps even 27-to-1) compared with their lowest-paid workers. Perhaps we could start with companies that bid on contracts (or receive no-bid contracts) above some threshold. Here are some recent top federal contractors and what Bloomberg News estimates as the ratio of top pay to the average worker’s: Oracle, 1,287-to-1; General Electric, 491-to-1; AT&T, 339-to-1; and Lockheed Martin, 315-to-1.

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– http://ift.tt/1cNLt2b

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President Obama will pronounce on the state of the union for the fifth time on Tuesday, and never during his time in office has the state of the economy been better — yet rarely has he gotten such low marks from the public for his handling of it.

Not only have economic indicators shown progress toward pre-recession health, but many forecasters are predicting what one called “a breakout year” for growth. A new study from a Federal Reserve economist even put a more benign spin on a negative trend, the shrinking labor force, by attributing the decline not to discouraged unemployed workers who have quit looking for jobs, but to the first baby-boomer retirements.

Demand for labor is up and the unemployment rate is below 7 percent for the first time since November 2008. Consumers, buoyed by rising home prices and stock values, are spending more; so are businesses. Exports are growing as Europe regains health. The fiscal drag from state and federal spending cuts has abated. And contrary to Republicans’ claims, many forecasters do not see the health care law as “a job-killer.”

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– http://ift.tt/1jFiVvv

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Which leads nicely to Lanier’s final big point: that the value of these new companies comes from us. “Instagram isn’t worth a billion dollars just because those 13 employees are extraordinary,” he writes. “Instead, its value comes from the millions of users who contribute to the network without being paid for it.” He adds, “Networks need a great number of people to participate in them to generate significant value. But when they have them, only a small number of people get paid. This has the net effect of centralizing wealth and limiting overall economic growth.” Thus, in Lanier’s view, is income inequality also partly a consequence of the digital economy.

It is Lanier’s radical idea that people should get paid whenever their information is used. He envisions a different kind of digital economy, in which creators of content — whether a blog post or a Facebook photograph — would receive micropayments whenever that content was used. A digital economy that appears to give things away for free — in return for being able to invade the privacy of its customers for commercial gain — isn’t free at all, he argues.

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– http://www.nytimes.com/2014/01/07/opinion/nocera-will-digital-networks-ruin-us.html?ref=todayspaper

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“The beauty of the stock market is that it’s an astonishingly easy place for buyers and sellers to connect with one another. If you want to sell almost any stock, you can find a buyer within seconds and know within a few cents how much the buyer will pay. (Compare that with selling a house or a car or even an old piece of furniture on Craigslist.) In the old days, the stock market worked because there were people — so-called market makers — whose job was to ensure that there was almost always a willing buyer and seller for every stock. In the past decade, their jobs have been largely replaced by high-frequency traders who provide this middleman service. Over time, this shift to technology has generally made it cheaper for everyone, including long-term investors, to buy and sell stocks. But there are notable exceptions. A trader using a high-speed connection to jump in front of a deal between a willing buyer and seller is driving up costs for the buyer and isn’t really improving the market.”

– http://www.nytimes.com/2013/10/13/magazine/high-frequency-traders.html?pagewanted=2&ref=todayspaper

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People and news organizations pay attention to Mr. Icahn because companies that ignore him — see Motorola and Yahoo — do so at their peril. Never mind that Mr. Icahn would probably not know an iPhone from a Galaxy S4. In a market-driven world, the stock price is everything. And the only thing. He doesn’t own shares in a company called Apple. He owns a stock listing called AAPL.

He is akin to everyone’s crazy uncle whom no one should listen to, except everyone does, and he often turns out to be right. He wins in part because he knows the outside play — the media game — so well. Using business news outlets and now social media, Mr. Icahn is able to make corporate boards quake and chief executives tremble because they know he will say anything, and he often does.

Mr. Icahn usually zeros in on troubled companies, but in this case he is cynically suggesting that one of the most successful companies in the world — one that has already announced plans for $100 billion in dividends and buybacks — should borrow $150 billion and go into real, actual debt despite having $147 billion in cash on hand. (Most of Apple’s cash is overseas and cannot be used to buy off investors.) Apple probably won’t take the Twitter bait. The company has replaced Coke as the most recognizable brand in the world, with a steady string of product hits. Does it really need Mr. Icahn’s advice?

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– http://www.nytimes.com/2013/10/07/business/media/using-twitter-to-move-the-markets.html?ref=todayspaper

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Financial markets have long treated U.S. bonds as the ultimate safe asset; the assumption that America will always honor its debts is the bedrock on which the world financial system rests. In particular, Treasury bills — short-term U.S. bonds — are what investors demand when they want absolutely solid collateral against loans. Treasury bills are so essential for this role that in times of severe stress they sometimes pay slightly negative interest rates — that is, they’re treated as being better than cash.

Now suppose it became clear that U.S. bonds weren’t safe, that America couldn’t be counted on to honor its debts after all. Suddenly, the whole system would be disrupted.

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– http://www.nytimes.com/2013/09/30/opinion/krugman-rebels-without-a-clue.html?ref=todayspaper

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Taxpayers fund the stadiums, antitrust law doesn’t apply to broadcast deals, the league enjoys nonprofit status, and Commissioner Roger Goodell makes $30 million a year. It’s time to stop the public giveaways to America’s richest sports league—and to the feudal lords who own its teams.
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The NFL’s nonprofit status should be revoked. And lawmakers—ideally in Congress, to level the national playing field, as it were—should require that television images created in publicly funded sports facilities cannot be privatized. The devil would be in the details of any such action. But Congress regulates health care, airspace, and other far-more-complex aspects of contemporary life; it can crack the whip on the NFL.

If football images created in places funded by taxpayers became public domain, the league would respond by paying the true cost of future stadiums—while negotiating to repay construction subsidies already received. To do otherwise would mean the loss of billions in television-rights fees. Pro football would remain just as exciting and popular, but would no longer take advantage of average people.

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– http://www.beyondchron.org/news/index.php?itemid=11877

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In 2010, the Department of Commerce published a study about what it would take for different types of families to achieve the aspirations of the middle class — which it defined as a house, a car or two in the garage, a vacation now and then, decent health care and enough savings to retire and contribute to the children’s college education.

It concluded that the middle class has become a much more exclusive club. Even two-earner families making almost $81,000 in 2008 — substantially more than the family median of about $60,000 reported by the Census — would have a much tougher time acquiring the attributes of the middle class than in 1990.

The incomes of these types of families actually rose by a fifth between 1990 and 2008, according to the report. They were more educated and worked more hours, on average, and had children at a later age. Still, that was no match for the 56 percent jump in the cost of housing, the 155 percent leap in out-of-pocket spending on health care and the double-digit increase in the cost of college.

So either we define the middle class down a couple of notches or we acknowledge that the middle class isn’t in the middle anymore.

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– http://www.nytimes.com/2013/09/19/business/americas-sinking-middle-class.html?ref=todayspaper

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