South By North Strategies, Ltd.

Midweek Humor: Rapping Economist Version

The rapping version of John Maynard Keynes and Friedrich Hayek return to debate the state of the economy.

What Has Gone Wrong?

The Economist asks what has gone wrong with the American economy.

Meanwhile, the biggest dangers lie in an area that politicians barely mention: the labour market. The recent decline in the jobless rate has been misleading, the result of a surprisingly small growth in the workforce (as discouraged workers drop out) as much as fast job creation. A stubborn 46% of America’s jobless, some 6m people, have been out of work for more than six months. The weakness of the recovery is mostly to blame, but there are signs that America may be developing a distinctly European disease: structural unemployment.
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Youth unemployment is especially high, and joblessness among the young leaves lasting scars. Strong productivity growth has been achieved partly through the elimination of many mid-skilled jobs. And what makes this all the more worrying is that, below the radar screen, America had employment problems long before the recession, particularly for lesser-skilled men. These were caused not only by sweeping changes from technology and globalisation, which affect all countries, but also by America’s habit of locking up large numbers of young black men, which drastically diminishes their future employment prospects. America has a smaller fraction of prime-age men in work and in the labour force than any other G7 economy. Some 25% of men aged 25-54 with no college degree, 35% of high-school dropouts and almost 70% of black high-school dropouts are not working.

Around The Dial – 5/3/11

Economic policy reports, blog postings, and media stories of interest:

• Off the Charts points out “the craziness of the debt limit debate.”
• Paul Krugman sees “springtime for bankers.”
• TaxVox demystifies various child tax provisions.
• The New York Times reports on the “paradox” of the corporate tax code.

Government At Work

The newest video from Together NC points out the benefits associated with public funding of the juvenile justice system.

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Corporate Taxes In North Carolina

A new Policy Brief from the N.C. Budget and Tax Center argues that the proposed changes to the state corporate tax code only offers “false help.”

Small‐ and medium‐sized businesses are the engine of job growth in the state, and very few would benefit from reducing the state corporate income tax rate. As of 2005, only about 28,0008of North Carolina’s more than 775,000 businesses (more than 175,000 of which were employers)9paid any corporate income tax. In the same year, 217 corporations accounted for nearly three of every five dollars in corporate income tax payments. Thus, approximately three‐fifths of any corporate tax cut would flow to 0.12 percent of North Carolina’s private employers.