Category: Economics

The 21st Century Silver Spoon

ELIZABETH CURRID-HALKETT, associate professor of urban planning, USC’s Price School.

This op-ed originally appeared in the New York Times on Nov. 10.

In 1899, the sociologist Thorstein Veblen scathingly critiqued what he called the “conspicuous consumption” of America’s upper class. The rich were so obsessed with their social status, he wrote, that they would go to gratuitous lengths to signal it. His famous example was silver flatware: handcrafted silver spoons, though no more “serviceable” than and hardly distinguishable from aluminum ones, conferred high social rank and signaled membership in what he called the “leisure class.”

A silver spoon is no longer a mark of elite status. Take the nation’s top 10 percent of households. The top 1 percent — those making more than $394,000 annually — are today’s version of Veblen’s leisure class in terms of wealth, but they are not the biggest buyers of silver flatware. Instead, households in the rest of this high-earning cohort — those making between $114,000 and just under $394,000 — take the silver prize.

California’s High-Speed Rail Needs a New Mandate

LISA SCHWEITZER, associate professor, USC Price.

This op-ed originally appeared in the Los Angeles Times on Sept. 11.

Over the last few weeks, the California High-Speed Rail Authority both lost and won fairly significant battles. It lost when a Sacramento County Superior Court judge ruled that its proposed funding plan violated the voter-approved law, Proposition 1A, that created the agency. The judge has set a hearing to give the state a chance to show that it can comply with the law and environmental reviews.

Mickelson’s in a Tax Trap

EDWARD J. McCAFFERY, professor of law, economics and political science, USC’s Gould School of Law.

This op-ed originally appeared at CNN on Jan. 25.

Phil Mickelson, aka Lefty, is thinking of leaving California and perhaps America because, according to his own reckoning, he is facing tax rates of 62% or 63%. Mickelson, probably the second-most-famous professional golfer in the world after Tiger Woods, later backed off from his initial comments about making “drastic changes.”

Reports suggest that Mickelson earned more than $60 million in 2012. In that sense, he appears to be doing better than the Romneys, and perhaps you are not all that sympathetic to him.

Deconstructing the Sandy Relief Numbers

LARRY HARRIS, professor of finance, USC’s Marshall School of Business.

This op-ed originally appeared in the Wall Street Journal on Jan. 11.

President Obama asked Congress for $61 billion for various relief programs following Hurricane Sandy. The Senate approved the full request late last month, but so far the House has approved just $9.7 billion, for flood-insurance claims. The House will soon vote on the remaining $51 billion in proposed aid.

Sandy was an unusually large storm that did substantial damage to the Eastern Seaboard. More than eight million people lost power and perhaps as many as 100,000 were left homeless. Thousands of buildings were destroyed or damaged along the coastline from Maryland to Maine.

Many people don’t appreciate how large these numbers are, in particular the size of the proposed relief. Consider some simple comparisons. The $61 billion aid package represents:

How to Escape the Debt Ceiling Limit

EDWARD KLEINBARD, professor of law, USC’s Gould School of Law.

This op-ed originally appeared in the New York Times on Jan. 10.

The fiscal cliff may have been avoided, but an even higher-stakes political standoff — this time, over the federal debt ceiling — is just around the bend.

Congressional Republicans have said they will demand immense cuts to popular government programs in exchange for agreeing to raise the nation’s authorized borrowing limit of $16.4 trillion. The Treasury Department briefly nudged against that ceiling on Dec. 31, but used “extraordinary” financial measures to buy more time. If nothing is done, the government will soon be unable to pay all of its bills in a timely manner. This unprecedented event would profoundly damage the government’s credit rating and send the financial system into a tailspin.

L.A.’s Future Economic Engine: Silicon Beach

LUCY HOOD, executive director of the Institute of Communication Technology Management, USC’s Marshall School of Business.

This op-ed originally appeared in the Los Angeles Times on Jan. 9.

What’s the future of L.A.’s economy? That’s a question that should be at the center of this year’s mayoral campaign. Key to that discussion should be recognition that Los Angeles, despite all its economic problems, is an increasingly prominent home to the next generation of technology companies that will drive the digital revolution in the 21st century.

Los Angeles’ tech awakening is unfolding in a slice of territory — dubbed “Silicon Beach,” which initially referred to Venice and Santa Monica and then expanded to Hollywood and downtown — where established giants such as Google and Apple have opened offices and where some 500 newcomer ventures have taken root. Silicon Beach culture, unlike Silicon Valley’s, is more consumer-oriented, drawing on art, entertainment and commerce to explore the intersections between technology and gaming, fashion, advertising and video.

The 2,000-Year-Old Prescription to Control Health Costs

DAVID AGUS, professor of medicine and engineering, Keck School of USC.

This op-ed originally appeared in the New York Times on Dec. 11.

The inexorable rise in health care spending, as all of us know, is a problem. But what’s truly infuriating, as we watch America’s medical bill soar, is that our conversation has focused almost exclusively on how to pay for that care, not on reducing our need for it. In the endless debate about “health care reform,” few have zeroed in on the practical actions we should be taking now to make Americans healthier.

An exception is Mayor Michael R. Bloomberg of New York, who is setting new standards that we would do well to adopt as a nation. In the last several years, he’s changed the city’s health code to mandate restrictions on sodas and trans fats — products that, when consumed over the long term, harm people. These new rules will undoubtedly improve New Yorkers’ health in years to come.

A Ramp Away From the Fiscal Cliff

EDWARD D. KLEINBARD, professor of law, USC’s Gould School of Law.

This op-ed originally appeared at CNN on Nov. 30.

America’s fiscal policy faces an apparent Hobson’s choice. On the one hand, we need to tame federal deficit spending by imposing new across-the-board spending cuts and higher taxes. We are told that if we do not act on this soon, the debt markets will choke on the overabundance of government debt issued to fund those deficits, causing interest rates to climb. As a result, businesses and homeowners will be unable to borrow on reasonable terms, which will lead to a slowdown of the economy.

Obamacare Exchanges May Be Too Small to Succeed

DANA P. GOLDMAN, director of USC’s Leonard D. Schaeffer Center for Health Policy and Economics, MICHAEL CHERNEW and ANUPAN JENA, professor of health policy at Harvard University.

This op-ed originally appeared in the New York Times on Nov. 23.

With the re-election of President Obama, the Affordable Care Act is back on track for being carried out in 2014. Central to its success will be the creation of health-insurance exchanges in each state. Beneficiaries will be able to go a Web site and shop for health insurance, with the government subsidizing the premiums of those whose qualify. By encouraging competition among insurers in an open marketplace, the health care law aims to wring some savings out of the insurance industry to keep premiums affordable.

Why Does CEO Mean White Male?

K.C. COLE, professor of journalism, USC Annenberg.

This op-ed originally appeared in the Los Angeles Times on Oct. 18.

A pedestrian holding a map approaches you and asks for directions. You engage in a short conversation, which is briefly interrupted when two workers walk between you carrying a door. A second later, you continue your conversation.

What you don’t notice is that the pedestrian is now someone else. Yep, that’s right: A different person took his place when the door passed between you. And you didn’t even notice. In fact, fully 50% of people who participated in this 1998 experiment by psychologist Daniel Simons were blind to the switch.