Friday, August 8

Friday, August 8

Personal spending in Louisiana lags the country; Krugman says income inequality is an economic drag; Big business has fewer competitors; today in Common Core

Personal spending in Louisiana lags the country
A first-ever look at personal spending broken down by state shows that Louisiana fared better than most at the start of the Great Recession, but has since experienced slower growth than the rest of the country. The data was released by the Commerce Department and reported by the Associated Press:

“Louisiana was among only eight states where total personal spending rose from 2008 to 2009, at the height of the recession. That 1.1 percent increase was the nation’s third-largest, tied with North Dakota and behind only Hawaii, 6.7 percent, and West Virginia, 1.8 percent. But the state’s 3.5 percent increase from 2011 to 2012 was below that in 32 states, including Florida, Georgia, Kentucky and Arkansas.”

Louisiana Economic Development Secretary Stephen Moret attributed Louisiana’s poor showing to the state’s steady housing market, which has not experienced the same fluctuations in home values that other states have experienced in recent years.

Krugman: Inequality is an economic drag
The New York Times’ Paul Krugman writes an important follow-up to the Standard & Poor report that suggests America’s vast income inequality is dragging down overall economic growth. For years, Krugman writes, most economists took it for granted that higher taxes on the rich and increased aid to the poor was damaging to economic growth. But such conventional wisdom may be shifting.

“Why? It’s true that market economies need a certain amount of inequality to function. But American inequality has become so extreme that it’s inflicting a lot of economic damage. And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate.”

Big business has fewer competitors
In business, as in politics, incumbency seems to matter more than ever. Fewer Americans are starting businesses than in the 1970s, and more start-up companies are failing than in earlier eras, according to data compiled by Ben Casselman of fivethirtyeight.com. Whereas 15 percent of all businesses were startups in the late 1970s, that figure had fallen to 8 percent by 2011, the latest year for which data is available. And 27 percent of new companies now fail in their first year, compared to 20 percent two decades earlier.

“In other words, the advantage enjoyed by incumbents, always substantial, has been growing in recent years. In 2008, for the first time since records have been kept, and likely for the first time in U.S. history, more Americans worked for big companies — those with at least 500 employees — than for small ones. In the late 1980s, two-thirds of U.S. companies were 10 years old or less. In 2011, only about half were.”

Today in Common Core
The never-ending debate over Common Core continues on the op-ed pages. The Advocate’s Will Sentell says Gov. Bobby Jindal’s vocal opposition to the education standards he once embraced has put him on a political island in Louisiana even as it places him in the mainstream of potential GOP presidential contenders. Over at Nola.com, columnist Bob Mann says both Jindal and U.S. Sen. David Vitter appear more interested in political positioning than what’s actually best for the kids who are supposed to be helped by the new standards.

Register now for SRABC annual conference
Author and professor Michael Sherraden of Washington University in St. Louis, Brandeis University professor Thomas Shapiro and the Rev. William J. Barber II, president of the North Carolina State Conference of the NAACP are among the headliners at the Southern Regional Asset Building Coalition Conference in New Orleans on Sept. 24-26. The conference will bring together a diverse group of stakeholders for two days of discussion about policies and programs that can support low-income families and help close the racial wealth gap in America. For more information about the conference – including details on how to register – click here.

 

Number of the Day

$31,995 – Personal spending per-capita in Louisiana in 2012. (Source: The Associated Press)