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Tuesday, April 30, 2019

Krugman: The Zombie Style in American Politics [feedly]

I think its cool when Krugman shadows Lenin's argumentative style....certain writers are good at keeping the lines in the middle of the road brightly lit! 

The Zombie Style in American Politics
https://www.nytimes.com/2019/04/29/opinion/republican-party-ideas.html

Russia didn't help Donald Trump's presidential campaign. O.K., it did help him, but the campaign itself wasn't involved. O.K., the campaign had a lot of Russian contacts and knowingly received information from the Russians, but that was perfectly fine.

If you've been trying to follow the Republican response to revelations about what happened in 2016, you may be a bit confused. We're not even talking about an ever-shifting party line; new excuses keep emerging, but old excuses are never abandoned. On one side, we have Rudy Giuliani saying that "there's nothing wrong with taking information from Russians." On the other side, we have Jared Kushner denyingthat Russia did anything beyond taking out "a couple of Facebook ads."

It's all very strange. Or, more accurately, it can seem very strange if you still think of the G.O.P. as a normal political party, one that adopts policy positions and then defends those positions in more or less good faith.

But if you have been following Republican arguments over the years, you know that the party's response to evidence of Russian intervention in 2016 is standard operating procedure. On issue after issue, what you see are multiple levels of denial combined with a refusal ever to give up an argument no matter how completely it has been discredited.

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I first encountered this style of argument a long time ago, over the issue of rising inequality. By the early 1990s it was already obvious that growth in the United States economy was becoming ever more skewed, with huge gains for a small minority at the top but lagging incomes for the middle class and the poor. This was an awkward observation for a party that, then as now, wanted to slash taxes for the rich and dismantle the social safety net. How would conservatives respond?

The answer was multilayered denial. Inequality wasn't rising. O.K., it was rising, but that wasn't a problem. O.K., rising inequality was unfortunate, but there was nothing that could be done about it without crippling economic growth.

You might think that the right would have to choose one of those positions, or at least that once you'd managed to refute one layer of the argument, say by showing that inequality was indeed rising, you could put that argument behind you and move on to the next one. But no: Old arguments, like the wights in "Game of Thrones," would just keep rising up after you thought you had killed them.

And this is still going on. Even as you read about the superrich buying $240 million apartments and demanding ever-bigger mega-yachts, there's a whole industry of people denying that inequality has gone up.

You see the same thing on climate change. Global warming is a myth — a hoax concocted by a vast conspiracy of scientists around the world. O.K., the climate is changing, but it's a natural phenomenon that has nothing to do with human activity. O.K., man-made climate change is real, but we can't do anything about it without destroying the economy.

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As in the case of inequality, refuted climate arguments never go away. Instead, they become intellectual zombies that should be dead but just keep shambling along. If you think Republican arguments on climate have gotten more sophisticated, wait for the next snowstorm; I guarantee you'll hear the same crude denialist arguments — the same willful confounding of climate with daily weather fluctuations — we've been hearing for decades.

What the right's positioning on inequality, climate and now Russian election interference have in common is that in each case the people pretending to be making a serious argument are actually apparatchiks operating in bad faith.

What I mean by that is that in each case those making denialist arguments, while they may invoke evidence, don't actually care what the evidence says; at a fundamental level, they aren't interested in the truth. Their goal, instead, is to serve a predetermined agenda.

Thus, inequality denial is about using whatever argument comes to hand to defend policies that benefit the rich at the expense of working Americans. Climate denial is about using whatever argument comes to hand to defend fossil fuel interests. Russia denial is about using whatever argument comes to hand to defend Donald Trump.

All of this is or should be obvious. After all, it's a pattern that goes back decades. But my sense is that the news media continue to have a hard time coping with the essential fraudulence of most big policy debates. That is, reporting about these debates typically frames them as disputes about the facts and what they mean, when the reality is that one side isn't interested in the facts.

I understand the pressures that often lead to false equivalence. Calling out dishonesty and bad faith can seem like partisan bias when, to put it bluntly, one side of the political spectrum lies all the time, while the other side doesn't.

But pretending that good faith exists when it doesn't is unfair to readers. The public deserves to know that the big debates in modern U.S. politics aren't a conventional clash of rival ideas. They're a war in which one side's forces consist mainly of intellectual zombies.
 -- via my feedly newsfeed

Dean Baker: What We Have Learned From the Trump Tax Cut [feedly]

The estimable and always sharp Baker.......


What We Have Learned From the Trump Tax Cut
http://cepr.net/publications/op-eds-columns/what-we-have-learned-from-the-trump-tax-cut

What We Have Learned From the Trump Tax Cut

Dean Baker
Truthout, April 29, 2019

See article on original site

We're now well into the second year of the Trump tax cut, and we're still waiting for the investment boom. By its own criterion, the Trump tax cut has failed badly, but there are a few lessons worth learning before trashing it as a complete failure. First, and most importantly, the tax cut did provide a boost in demand, leading to faster economic and wage growth and a lower unemployment rate.

The bulk of the tax cut took the form of a reduction in the corporate tax rate from 35 percent to 21 percent. As has been widely reported, this led to a surge in share buybacks, as companies could find nothing better to do with the extra cash than pay it out to shareholders.

Those shareholders spent much of the money they got, driving up consumption by 2.9 percent in the year from the third quarter of 2017 (the last quarter before the tax cut was approved) to the third quarter of 2018. That's up from growth of just 2.4 percent the prior year. Growth also got a boost from higher federal spending, mostly military, which grew by 5 percent in 2018 after growing just 1.3 percent in 2017.

This boost to growth led to more rapid job creation, pushing the unemployment rate down to its current 3.8 percent level. (It had been as low as 3.7 percent for two months last fall.) This is a really big deal. Most economists had not previously thought the unemployment rate could get this low without causing spiraling inflation.

While we may start to see issues with inflation in the future, there is essentially zero evidence of any uptick in the inflation rate to date. This means that we were able to get the unemployment rate down, employing perhaps another million workers. These workers were disproportionately from the most disadvantaged segments of the labor market — people of color, workers with less education and people with criminal records.

The tighter labor market also led to a modest uptick in the rate of wage growth. This has averaged 3.3 percent over the first three months of 2019, up from 2.5 percent in the last three months of 2017.

All of this has come with no noticeable uptick in interest rates. Many warned that the larger budget deficits that resulted from the tax cut would lead to higher interest rates, which would crowd out investment. As it stands, the interest rate on 10-year U.S. Treasury bonds is just 2.53 percent. This compares to interest rates of more than 5 percent back in the late 1990s, when the federal government was running budget surpluses.

Once again, economists show themselves to be incredibly bad at recognizing the economy's potential. Back in the late 1990s, virtually all economists agreed that the unemployment rate could not get much below 6 percent without triggering spiraling inflation. They were shown to be wrong in a big way as the unemployment rate averaged 4 percent in 2000, with no noticeable uptick in inflation.

Most economists put the floor for the unemployment rate at or above 5 percent, just a few years back. By pressing the economy to produce at higher levels of output, the tax cut showed the floor is clearly under 4 percent, and perhaps quite a bit lower.

This doesn't change the fact that a tax cut targeted to the rich and corporations was a terrible way to boost demand. We should have done it by investing in infrastructure, education, child care and other productive uses. If we were going to do tax cuts, they should be targeted to the low- and moderate-income people who need it most.

We also learned — if anyone still needed this lesson — that tax cuts to the rich and corporations are not a good way to boost investment. There is little difference in the pace of investment growth pre- and post-tax cut. Orders for non-defense capital goods, the largest category of investment, are up just 11.2 percent from their level of two years ago. This translates into annual growth of just 5 percent, compared to a promised boom in the neighborhood of 30 percent.

The promises that lower corporate tax rates would be associated with the end of loopholes also failed to pan out. After the tax cut passed, the Congressional Budget Office projected the government would collect $243 billion in corporate income taxes in 2018. The government actually collected$205 billion in 2018, a shortfall of almost 20 percent. Apparently, even with the lower rates, the loopholes are still there.

In short, we can say that those of us who thought the Trump tax cut was a pointless giveaway to the rich were right. But those who complained that it was some budget buster that was going to cause high-interest rates and seriously damage the economy were wrong. There was (and may still be) further room to increase demand. It is a good thing that we are testing the economy's limits, even if we are doing it in the worst possible way.


 -- via my feedly newsfeed

Monday, April 29, 2019

Sen. Warren’s debt cancellation plan: Should progressive policy aim for narrow targets or structural change? [feedly]

Sen. Warren's debt cancellation plan: Should progressive policy aim for narrow targets or structural change?
http://jaredbernsteinblog.com/sen-sen-warrens-debt-cancellation-plan-should-progressive-policy-aim-for-narrow-targets-or-structural-change/

Introduction

Sen. Warren's college debt cancellation plan, which I explain here, has gotten a mixed reception. While many progressives and, predictably, student debt holders give it high praise, it has taken flak from two broad groups: those who just don't like cancelling debt and those who view it as insufficiently progressive. The latter group objects to the extent to which it helps higher income debtholders who, in their view, don't need the help relative to those with lower incomes.

Their critique provides a microcosm of a major policy debate for Democrats between progressive targeting on one side versus a broader approach aimed at reducing structural inequalities that have grown to historical proportions. It's an important debate, as it plays out in Medicare for All versus Medicare for More, subsidized jobs for targeted groups versus guaranteed jobs for all, universal income support versus targeted wage subsidies, and so on.

This essay starts by examining the rationale for college debt relief and then uses Warren's higher education plan to try to garner some insights into the narrower-versus-broader policy debate. Warning: I do not conclude that one approach dominates the other. In the spirit of full disclosure, I'll admit that as an older, technocratic, incrementalist who gives significant weight to opportunity costs, I'm congenitally more familiar and comfortable with narrow targeting. But as someone who has, for decades, watched increasingly concentrated wealth and power distort economic and particularly racial outcomes, I'm increasingly open to questioning my priors.

I'll say little about those who can't stomach debt cancellation. While I understand where they're coming from, I wouldn't let such resentment block useful public policy. Should the government not subsidize health coverage for those without it because the rest of us have long paid our premiums? Was the introduction of Social Security and Medicare unfair to those who had to retire without them? That's not saying student debt relief is useful public policy or that Warren's plan is the way to go. It's saying that the fact that the introduction of any public benefit may be viewed as unfair to those who won't receive it tells you little about the extent to which that benefit will improve social welfare.

Is college debt reduction good public policy?

Whether debt relief is good public policy and if so, how best to do it, is a more interesting question. The rationale for helping student borrowers is strong. First, K-12 education has long been viewed as a public good, meaning absent government support, the population would under-invest in it with negative economic, social, and political consequences. But, as I said in my earlier piece, 12 is no longer the right number for the high end of that range. Workplace skill demands have steadily increased, driving up the need for a more educated workforce (note that this is a different argument than the ubiquitous, and suspect, claims of skill shortages by many employers).

Second, college tuition (and the ancillary costs, like boarding and textbooks) has increased a lot faster than typical household income incomes (the BLS price index for college tuition and fees rose 63 percent, 2006-16, while nominal median income rose 22 percent). Yes, grants improve affordability, but at public four-year colleges, annual costs increased by $6,300 since 2000, while annual aid increased by less than half that amount. Meanwhile, states have significantly disinvested in higher education (the average state spent 16 percent less—inflation adjusted—per student on public colleges and universities in 2017 than in 2008).

At the same time, the return to college has also gone up and the evidence shows that for many students who complete their degrees, even with loans, college pays off. Still, these two facts—higher ed as a public good and the affordability challenges it poses for many families of limited means, especially for racial minorities—provides a rationale for helping at least some group of student borrowers. A third rationale is that the extent to which the historically large stock of student debt is a negative for the macroeconomy.

Here's how (my old Obama-era pal) James Kvaal, now the president of The Institute for College Access & Success, recently put it (italics added):

For college to be affordable, students must be able to both make ends meet while enrolled and successfully repay their loans after leaving school. Unfortunately, for many students, one or both of those goals are not possible today. Financial barriers still keep many students from earning college degrees and—while the returns to college are high for those who succeed— there is a crisis for the many students who struggle to repay their loans. A million students a year default.

For these reasons, various debt relief programs already exist, though they are, as Kvaal's comments suggest, insufficient. Few experts in this area of education policy view the status quo as adequate, and thus, we need to do more.

Critics of Warren's plan argue it is not progressive enough

And yet, many criticized Warren's plan for providing more debt relief than is necessary to too many debtors who don't need the help. That is, they judged the plan to be too generous and not progressive enough because too much debt cancellation goes to upper income borrowers.

The claim is reflected in numbers released both by Warren and outside analysts. An Urban Institute analysis finds that 32 percent of the cancelled debt would go to the bottom 40 percent while 45 would go to the top 40 percent (a Brooking analysis yields similar results). Warren's materials show that at least 80 percent of all borrower households up to the 80th percentile get full debt cancellation, though this share falls to about half of those in the top fifth.

Given that distribution, columnist David Leonhardt, who has long advocated for helping the neediest in their pursuit of higher ed, worries that the plan will help "a 24-year-old in Silicon Valley making $90,000" thereby confusing "the mild discomforts of the professional class with the true struggles of the middle class and poor."

To be clear, even by these numbers, because its top benefit ($50,000 applied to debt cancellation) begins to phase down at $100,000 of household income, the plan maintains some degree of progressivity (to which Leonhardt gives a nod) and racial equity. The Urban analysis finds that 56 percent of the debt relief goes to families in the bottom 60 percent, with incomes below $65,000. Warren's materials show total cancellation for about 90 percent of those with an associate degree or less compared to 25 percent of those with a professional degree or doctorate. Since student borrowing rises with income, and the plan cancels 40 percent of the outstanding debt of 75 percent of borrowers, the 60 percent it doesn't cancel is mostly held by higher-income families (above the plan's $250,000 cutoff) with high amounts of debt. Urban's analysis finds the plan disproportionately helps African-American borrowers (black households are 16 percent of all households, but they receive 25 percent of all cancelled debt).

Still, the plan's design could be tweaked so that more of its benefits would reach low versus higher-income borrowers. Because higher income families borrow more for college, lowering both the $50,000 forgiveness threshold—say, to $20,000—and more so, starting the phaseout lower—maybe at $60,000 instead of $100,000—would boost progressivity and lower the cost.

The challenge is that when you're cancelling student debt, because high-end households are more likely to borrow for college and to borrow larger amounts, it's hard to achieve high progressivity. That's one reason why many critics of the plan prefer income-based repayment options (where borrowers pay 10 percent of their disposable income to service their debt, which is forgiven after 20-25 years of such payments) and/or, as Leonhardt argues, "an enormous investment in colleges that enroll large numbers of middle-class and lower-income students."

Is the goal of college debt reduction to help low-income borrowers or to pushback on structural inequality?

Is targeting debt reduction to poorer households clearly the better policy choice in this space? The critics argument—a resonant one—is: in a world of limited resources, why aid "mild discomfort" when you can help those with "true struggles?"

But Warren is coming at the issue from a different perspective. Her purpose is not to parse these two groups. It is the more ambitious (and thus, more expensive and interventionist) goal of resetting the imbalances driven by the vast increase in wealth inequality. Her motivation comes from her oft-stated belief that concentrated wealth equals concentrated power, political influence, and the stripping of opportunities from broad swaths of Americans, most notably racial minorities, and not just the poor.

It is thus not incidental that her higher ed plan (which, as I discuss below, includes a lot more than debt relief), is financed by a tax on extreme wealththat hits the top 0.1 percent of wealth holders. The goal is to claw back some of this narrowly concentrated wealth to provide more opportunities for all the families who face some of costs of these extreme imbalances. No question, it will help some computer engineers and lawyers. But in so doing, the hope is that by reducing that engineer's debt burden, she will have the freedom to start her own business. A lawyer who benefits from her plan will have the economic space to shun the corporation in favor of public service law.

Viewed through that lens, the Warren plan is not designed to target debt relief to the least well-off. It is instead designed to return some measure of economic security and freedom of choice to 42 million people from across the income distribution who, by dint of their current debt burdens, face economic constraints that she believes public policy should address.

There's more to the plan, most importantly making two and four your public colleges tuition free. That's a whole other discussion, though it raises all of these same issues. Re progressive targeting, I've seen too few references to the fact that her plan also calls for $100 billion in higher funding for Pell Grants—the program Kvall called "the most important federal commitment to college opportunity." Given free tuition, these grants would pay non-tuition costs, which for many students outpace their tuition costs.

But none of that negates the opportunity costs invoked by this and other plans with such broad scope. A dollar spent on a $100,000 household is one that isn't spent on a $20,000 household, and it's undeniable that the latter needs more help than the former, especially when we consider those students whose upward mobility is most elastic to a quality, higher education are the ones least able to afford it.

But it is also undeniable that, in the face of levels of inequality that we haven't seen in this country since the 1920s (which, for the record, did not end well), it will take more than narrowly targeted corrections to reset the balance of power and opportunity in America. I don't know if this or any other big idea is part of the solution. Also, I've ignored politics, which I've argued elsewheremay be more conductive to targeted incrementalism than sweeping reforms. But those of us who seek economic and racial justice must entertain the possibility that relative to the sorts of ideas we've long promoted, it may take a policy agenda that's bigger, more disruptive, and more ambitious, to start to repair the damage.


 -- via my feedly newsfeed

At this Rate, It Will Rake 200 Years to End Global Poverty [feedly]

Should the poor be patient and wait??

At this Rate, It Will Rake 200 Years to End Global Poverty
https://www.globalpolicyjournal.com/blog/29/04/2019/rate-it-will-rake-200-years-end-global-poverty

During the debate about global poverty that erupted earlier this year, one fact kept getting repeated: maybe poor people's incomes haven't increased enough to lift them out of actual poverty (grudgingly admitted), but at least they've been rising. For those who seek to defend neoliberal globalization, this fact has become a precious touchstone. 

While it is true that the average incomes of poor people have increased since 1981, there are two crucial caveats to this that we need to pay attention to. 

1) First, the increase has not been steady.  Indeed, there have been long periods over the past few decades where the average incomes of the global poor (those living on less than $7.40 per day, the minimum necessary for decent nutrition and normal life expectancy) didn't rise at all, and quite often actually fell.  Here are a few examples:

  • In Latin America and the Caribbean, the average income of the poor fell after 1981 and didn't recover its previous level until two decades later.

  • In the Middle East and North Africa, the average income of the poor fell after 1990 and didn't recover its previous level until a decade later.

  • In South Asia, the average income of the poor fell after 1996 and didn't recover until 2008.

  • And in Sub-Saharan Africa the average income of the poor declined after 1981 and didn't recover until more than two decades later, in 2005.

Crucially, these periods of decline and stagnation happened almost entirely during the 1980s and 1990s, as neoliberal structural adjustment programs were imposed across the global South.  In other words, the imposition of Washington Consensus capitalism during this period not only caused the number and percentage of poor people to rise (as I have described elsewhere), it also caused the incomes of the poor to decline and stagnate. 

2) Second, the increase that has happened has been at an astonishingly slow pace.  Since 1981 poor people's daily incomes have increased by only about 2 cents per year, on average. 

At this rate it will take around 200 years to end global poverty at $7.40 per day, and 500 years to end poverty at the US poverty line of $15 per day.

Poverty

The graph above is based on World Bank poverty data. I've calculated the total poverty gap per region per year (i.e., the amount of additional income it would take to bring everyone above the poverty line of $7.40 per day), divided this by the number of poor people in each year to get the average distance that poor people live below the poverty line, and then subtracted this from $7.40 to show average income.  

Keep in mind that this figure counts not only income but also consumption.  So if a person is living on $2 per day, that includes not only the cash they might earn from wages, but also the value of food they grow themselves, and anything they might scavenge or receive as gifts for household consumption.  And all of this is valued in terms of purchasing power in the United States.  So $2 is what that amount of money would buy in the US in 2011; barely anything, basically.  Not even enough to cover basic food needs.

What is more, these results overstate the incomes of the poor because the World Bank's methodology doesn't account for the fact that poor people spend a disproportionate amount of their income on food.   

Here's what the World Bank data reveals:

Table WB

And remember: these are the people who render the majority of the resources and labour that keep the global economy going. What they get in return for that is literally pennies.

Those like Gates and Pinker who so adamantly defend the status quo of the global economy – this is what they are defending.  That the incomes of the poor should grow by 2 cents per year, ensuring that poverty will be with us for hundreds of years to come.

This is a striking position to take, when you consider that poverty could be ended right now, forever, simply by shifting $6 trillion of existing global income to the poorest 60% of humanity. This would be enough to lift every human on the planet above the $7.40 line.

For perspective, the richest 1% capture more than $18 trillion each year in income, according to the World Inequality Database.  In other words, we could tax the 1% a mere third of their income to put an end global poverty, and still leave them with an average income of $175,000 per year. 

This is just a thought experiment, of course; to me a better approach is to change the rules of the global economy so that the world's majority can claim a fairer share of the yields they produce in the first place, as I argue in The Divide.  But the point is clear: global poverty today isn't natural or inevitable, it is an artifact of the very same policies that have been designed to siphon the lion's share of global income into the pockets of the rich.  


 -- via my feedly newsfeed

Saturday, April 27, 2019

Notre Dame Cathedral and Questions from a Worker Who Reads (after Bertolt Brecht) [feedly]

Notre Dame Cathedral and Questions from a Worker Who Reads (after Bertolt Brecht)
https://workingclassstudies.wordpress.com/2019/04/22/notre-dame-cathedral-and-questions-from-a-worker-who-reads-after-bertolt-brecht/

When Notre Dame Cathedral caught fire in Paris on April 15, 400 firefighters were deployed to tackle the blaze. One of those workers was seriously injured, and two police officers were also hurt. Emergency workers risked their lives to remove artefacts from the burning cathedral, but most reports emphasized  the value of the artefacts and artworks rather than the people who saved them. Media coverage of the global reaction to the fire focused on the great sadness many people feel at the potential loss of an iconic building. Catholics have understandably been particularly upset at the loss of the church. In France, the president, Emmanuel Macron, has promised that the Cathedral will be rebuilt, and two French billionaires have pledged millions of dollars towards the repairs. Experts have explained how technology can assist in the reconstruction of the destroyed parts of the building and there has been much commentary on the cultural significance of the cathedral.

As this was all unfolding, I kept thinking about Bertolt Brecht's 1935 'Questions from a Worker Who Reads'. In the poem, the worker asks questions about the people who are missing from stories about famous monuments and historical events – the labourers who 'haul(ed) up the lumps of rock'; cooks who prepared the feasts for kings; the masses of workers who built, fought, and died for all these important historical figures.

And this is what kept coming back: who built Notre Dame? How many of those workers were injured or died during the construction? Who has been maintaining the cathedral – fixing lights, unblocking toilets, keeping it neat and tidy, answering the phones, serving in the gift shop? What will happen to these workers while the building still smoulders? No doubt, an army of tradespeople will be employed in the rebuilding: will they be paid decent wages and will they be safe at work?

Questions lead to more questions, such as how the reporting on the Notre Dame fire reflects cultural biases based on class and race. Responses to the fire show how certain buildings or places can be attributed more value than others. Some have compared responses to Notre Dame with reactions to the June 2017 fire at Grenfell Tower, which housed working class low-income people, where 72 people lost their lives. The fight for affected families to be rehoused and for dangerous flammable cladding to be removed from other social housing blocks continues, but have working-class residents of social housing been treated as less important than artefacts in a famous cathedral?

Destruction of other significant religious or cultural buildings around the world have not received the same attention as Notre Dame, such as the loss of Black churches in Louisiana in April to arson by a white supremacist. While the churches might not be as old as Notre Dame, they are extremely important to the local community, and their destruction as the result of a hate crime is deeply significant. Was there less of an outcry because the affected community are people of colour? The Al-Aqsa mosque in Jerusalem also experienced an accidental fire on the same day at Notre Dame, but the fire was not reported on by Western media despite the religious significance of this site, which points to the devaluing of sites outside of the west, as well as the ongoing suspicion of anything Muslim.

For many, Notre Dame is an iconic symbol of the Catholic Church, but for others, it is a symbol of French colonial and imperial power. The outpouring of grief for the lost building has been seen as symptomatic of the lack of concern for the rights of people under colonial rule and the continued impact of French colonialism in terms of racism and discrimination faced by African and Muslim immigrants in France today. Meanwhile, some right-wing outlets were very quick to try attribute blame to Islamic terrorists.

Responses to the Notre Dame fire often emphasize the Cathedral's age, but in Australia, people seemed less bothered by the potential loss of sacred trees that are just as old. Indigenous activists in Victoria have been fighting to protect 800-year-old sacred trees, including a birthing tree where countless generations of Djap Wurrung people have been born, from a highway expansion. Indigenous people in Australia have experienced many such fights, as their land and sacred sites have been destroyed to make way for roads, mines, and building developments. Some public figures here have suggested that Australia should assist with the cost of rebuilding Notre Dame – an idea that seems particularly galling in the light of Indigenous disadvantage and the continuing gaps in life expectancy and educational outcomes between Indigenous and non-Indigenous Australians.

Wider suggestions that the cathedral 'belongs' to the world (and therefore the world should contribute to the repair fund) insult the millions suffering under austerity measures or experiencing racism due to the rise of right-wing rhetoric (particularly when this hateful rhetoric has a religious basis), or living without adequate housing, nutrition, education, or health care around the world.

I visited Paris as a working-class teenager in the 1980s (after saving for months) and I remember going in to Notre Dame cathedral and admiring the skill of the workers who created the stained-glass windows, the beautiful stone work, the intricate wood carvings. To see the fruits of their labour destroyed is a great shame. But what is the chance that the focus of any rebuilding will be on the workers? More likely, we will hear stories about the value of the artefacts, the use of technology to recreate lost sections, the importance of the building to French history, and the willingness of the powers-that-be to make sure everything is restored.

As we listen to those stories, we should remember that reports on historical places and events are always classed and raced. As Brecht's worker says at the end of the poem, 'So many reports/ So many questions'.

Sarah Attfield, University of Technology Sydney, editor Journal of Working-Class Studies


 -- via my feedly newsfeed

Thursday, April 25, 2019

The Captain Swing Riots; Workers and Threshing Machines in the 1830s [feedly]

The Captain Swing Riots; Workers and Threshing Machines in the 1830s
http://conversableeconomist.blogspot.com/2019/04/the-captain-swing-riots-workers-and.html

"Between the summer of 1830 and the summer of 1832, riots swept through the English countryside. Over no more than two years, 3,000 riots broke out – by far the largest case of popular unrest in England since 1700. During the riots, rural laborers burned down farmhouses, expelled overseers of the poor and sent threatening letters to landlords and farmers signed by the mythical character known as Captain Swing. Most of all, workers attacked and destroyed threshing machines."

 Bruno Caprettini and  Joachim Voth provide a readable overview of their research on the riots in "Rage against the machines New technology and violent unrest in industrializing England," written as a Policy Brief for the UBS International Center of Economics in Society (2018, #2). They write:
"Threshing machines were used to thresh grain, especially wheat. Until the end of the 1700s, threshing grain was done manually and it was the principal form of employment in the countryside during the winter months. Starting from the Napoleonic Wars (1803-1815), threshing machines spread across England, replacing workers. Horse-driven or water-powered threshers could finish in a matter of weeks a task that would have normally kept workers busy for months. Their use arguably depressed the wages of rural workers." 
Here's a figure showing locations of the Captain Swing riots: 

The authors collect evidence about where threshing machines were being adopted based on newspaper advertisements for the sale of farms--which listed threshing machines at the farm as well as other property included with the sale. They show a correlation between the presence of more threshing machines and rioting. But as always, correlation doesn't necessarily  mean causation. For example, perhaps areas where local workers were already more rebellious and uncooperative were more likely to adopt threshing machines, and the riots that followed only show why local farmers didn't want to deal with their local workers. 

Thus, the authors also collect evidence on what areas were especially good soil for wheat, which makes using a thresher more likely, and what areas had water-power available to run threshers. it turns out that these areas are also where the threshers were more likely to be adopted. So a more plausible explanation seems to be that the new technology was adopted where it was most likely to be effective, not because of pre-existing local stroppiness. 

The Captain Swing riots are thus one more example, an especially vivid one, that new technologies which cause a lot of people to lose a way of earning income can be highly disruptive. The authors write: "The results suggest that in one of the most dramatic cases of labor unrest in recent history, labor-saving technology played a key role. While the past may not be an accurate guide to future upheavals, evidence from the days of Captain Swing serve as a reminder of how disruptive new, labor-saving technologies can be in economic, social and political terms."

 -- via my feedly newsfeed

Wednesday, April 24, 2019

Following up on economics.enlightenradio.org

Hi there,

I wanted to check in with you one last time regarding my previous email and our guide about helping single women obtain the mortgage they deserve. I think this resource would be a great addition to this page of your site:

http://economics.enlightenradio.org/2016/05/ryan-cooper-why-bernie-sanders-is-most.html

I’ve included our guide here:

https://www.creditcards.com/credit-card-news/single-womans-guide-to-mortgage-ready-credit.php

Please feel free to reach out if you have any questions.

Gratefully,

Ryan Noonan
Communications Specialist
CreditCards.com
9600 N. Mopac, Stonebridge Plaza II, Suite 500
Austin, TX  78759

On Thu, Apr 18, 2019 at 9:39 PM, Ryan Noonan <ryan.noonan@creditcards.com> wrote:

Hi there,

I hope you’re enjoying your Thursday.

I wanted to reach out to see if you had a chance to read my previous email.

We created a guide that explains the best strategies for single women to build a strong credit profile and obtain a mortgage. It also describes the best practices for preparing and protecting ones credit throughout the home-buying process.

I thought you might want to include it on your page here:

http://economics.enlightenradio.org/2016/05/ryan-cooper-why-bernie-sanders-is-most.html

Here’s the link:

https://www.creditcards.com/credit-card-news/single-womans-guide-to-mortgage-ready-credit.php

Please let me know if you can add our guide to your page.

Best,

Ryan Noonan
Communications Specialist
CreditCards.com
9600 N. Mopac, Stonebridge Plaza II, Suite 500
Austin, TX  78759

On Thu, Apr 4, 2019 at 9:01 PM, Ryan Noonan <ryan.noonan@creditcards.com> wrote:

Hi there,

I hope you’re well!

I noticed you mention cbpp.org’s A Guide to Statistics on Historical Trends in Income Inequality on this page of your site:

http://economics.enlightenradio.org/2016/05/ryan-cooper-why-bernie-sanders-is-most.html

I thought you might also want to link to our guide that empowers single women to rise above financial inequality and build their credit in order to obtain a mortgage.

Despite making up almost one-fifth of the home buying market, single women are more likely to be denied mortgage loans than any other group. We created a guide that breaks down the best strategies for positively managing credit throughout the home-buying process and how to utilize a strong credit profile to combat gender bias.

I have included a link to our guide here:

https://www.creditcards.com/credit-card-news/single-womans-guide-to-mortgage-ready-credit.php

Would you consider adding a link to our guide on your page above?

Gratefully,

Ryan Noonan
Communications Specialist
CreditCards.com
9600 N. Mopac, Stonebridge Plaza II, Suite 500
Austin, TX  78759




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Friday, April 19, 2019

Capitalism’s Great Reckoning [feedly]

Capitalism's Great Reckoning
https://www.project-syndicate.org/onpoint/capitalism-s-great-reckoning-by-james-k--galbraith-2019-04

As the maladies of modern capitalism have multiplied, fundamental questions about the future of the world's dominant economic model have become impossible to ignore. But in the absence of viable alternatives, the question is how to reform a system that is increasingly at odds with democracy.

VISIT WEBSITE

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Thursday, April 18, 2019

Question for economics.enlightenradio.org

Hi there,

I hope you’re enjoying your Thursday.

I wanted to reach out to see if you had a chance to read my previous email.

We created a guide that explains the best strategies for single women to build a strong credit profile and obtain a mortgage. It also describes the best practices for preparing and protecting ones credit throughout the home-buying process.

I thought you might want to include it on your page here:

http://economics.enlightenradio.org/2016/05/ryan-cooper-why-bernie-sanders-is-most.html

Here’s the link:

https://www.creditcards.com/credit-card-news/single-womans-guide-to-mortgage-ready-credit.php

Please let me know if you can add our guide to your page.

Best,

Ryan Noonan
Communications Specialist
CreditCards.com
9600 N. Mopac, Stonebridge Plaza II, Suite 500
Austin, TX  78759

On Thu, Apr 4, 2019 at 9:01 PM, Ryan Noonan <ryan.noonan@creditcards.com> wrote:

Hi there,

I hope you’re well!

I noticed you mention cbpp.org’s A Guide to Statistics on Historical Trends in Income Inequality on this page of your site:

http://economics.enlightenradio.org/2016/05/ryan-cooper-why-bernie-sanders-is-most.html

I thought you might also want to link to our guide that empowers single women to rise above financial inequality and build their credit in order to obtain a mortgage.

Despite making up almost one-fifth of the home buying market, single women are more likely to be denied mortgage loans than any other group. We created a guide that breaks down the best strategies for positively managing credit throughout the home-buying process and how to utilize a strong credit profile to combat gender bias.

I have included a link to our guide here:

https://www.creditcards.com/credit-card-news/single-womans-guide-to-mortgage-ready-credit.php

Would you consider adding a link to our guide on your page above?

Gratefully,

Ryan Noonan
Communications Specialist
CreditCards.com
9600 N. Mopac, Stonebridge Plaza II, Suite 500
Austin, TX  78759




Don't want emails from us anymore? Reply to this email with the word "UNSUBSCRIBE" in the subject line.
CreditCards.com, 9430 Research Blvd Bldg 4, Austin Texas, 78759, United States

Embedded Internationalism: The Only Way to Fight the Global Oligarchy [feedly]

Embedded Internationalism: The Only Way to Fight the Global Oligarchy
https://www.nakedcapitalism.com/2019/04/embedded-internationalism-the-only-way-to-fight-the-global-oligarchy.html

A Very provocative essay on what constitutes internationalism. Also provocative, Dani Rodrik's Peaceful Coexistence 2.0

Embedded Internationalism: The Only Way to Fight the Global Oligarchy

Posted on April 18, 2019 by 

Yves here This post may seen a bit abstract, but it attempts to map out how to increase democratic accountability and counter the influence powerful private sector interests have over major international institutions. While another response has been to try to bolster national sovereignity, that can't go very far in a world where economies smaller than the US and China (or ones that are or have been forced to autarkies, like India, Russia, and Iran) operate through regional trade blocs.

The shortcoming of nationalism as a response to how the global wealthy have succeeded in using their ability to arbitrage markets to foment a race to the bottom in environmental, regulatory, and labor standards is that it often winds up being dominated by right wing interests that play upon xenophobia and by design don't address the problems of mobile capital and long supply chains. So "embedded internationalism" isn't quite a solution, it at least helps clarify the nature of the problem and where some approaches might lie.

By David Adler (@davidrkadler), a political researcher. Originally published at openDemocracy

Progressives must urgently develop a new vision for international institutions, or they will be reshaped in the image of our opponents.

This article is part of a series by openDemocracy and the Bretton Woods Project on the crisis of multilateralism. The views expressed are those of the author's only, and are not necessarily representative of either organisation.

A coup is underway at the World Bank, and no one is watching. On Friday, 5 April, the executive directors of the world's most powerful multilateral bank voted unanimously to appoint David Malpass — a staunch supporter of Donald Trump and fierce critic of "globalism" — as its new president.

The decision honoured the 'gentleman's agreement' that allows the US president to install an ally at the helm of the bank — despite a hard-fought campaign to allow for an open selection. The direction of the bank will now be set by a man who believes that multilateralism has "gone substantially too far" to obstruct the America First agenda.

But beyond the pages of the Financial Times, these proceedings have barely dented public discourse. Malpass will begin his five-year term without a single street protest or a single press statement by a major political party.

The silence is puzzling. The World Bank, like its partner the IMF, has huge costs. The United States alone contributes $155 billion of taxpayer money to the bank — more than double what it spends on food stamps each year. These institutions also have huge consequences. As the Bretton Woods Project has revealed, the World Bank and the IMF continue to demand austerity and drive privatization across the global south. The scale and scope of these institutions suggests that their management should invite serious public scrutiny.

But they do not — and this is not an accident. International institutions are intentionally insulated from democratic demands. A very generous reading would suggest that this is because international institutions must be protected from the vagaries of the electoral cycle. Their democratic deficit is, according to this view, a virtue. International institutions could never withstand grassroots intervention.

But this strategy has now — clearly and dramatically — backfired. By closing themselves off from public view, these institutions made themselves easy targets for political entrepreneurs seeking a scapegoat for their domestic crises. The European Union, the United Nations, NATO — international institutions have become the bogeymen of populist movements around the world. There are important reasons to revile these institutions, but they are rarely those cited by the blustering Brexiteers or MAGA chuds.

In other words, if democracy once appeared as the great danger to the integrity of international institutions, technocracy has revealed itself as their true existential threat.

It is time, then, to bring the politics back in — not only as a strategy for building a new internationalism, but also as a necessary defence against the alt-globalist agenda that is climbing its way to the very top of our international institutions, one quiet coup at a time.

II.

But what, exactly, does this mean? How should we make sense of the struggle to reclaim international institutions? And what are the strategies to get there?

To answer these questions, it is helpful to set out the terrain.

I map the political economy of this struggle across two axes. The first is embeddedness: the extent to which markets are anchored in society. At one end is laissez faire capitalism, a free market unconstrained by moral considerations and economic regulations. Everything here is a commodity, including human life and the earth itself. The axis therefore moves upward toward decommodification, enshrining protections that limit the exploitation of resources like labour and land.

The first axis could also be described by its more modern inverse, financialisation: the extent to which elements of society present themselves as opportunities for financial speculation. To disembed is to financialise. To re-embed is to definancialise.

The second axis is scale: the level at which political activity is organized, from the nationalto the global.

Figure 1: The Axes of Internationalism

The map tells the story of a century of political conflict.

In its first half, the primary conflict occurred along the axis of embeddedness at the national level. A Gilded Age of capitalism witnessed the emergence of a consolidated national bourgeoisie, which built new institutions — peak associations, political machines — to disembed the economy. New workers' movements then organized their own institutions at the national level — trade unions, political parties — in order to demand that governments combat inequality, provide decent jobs, and enshrine new rights to services like healthcare and goods like housing. Social democracy was born.

The latter half of the century activated the second axis. Having been tamed at the national level, capital went global, chasing opportunities in countries where the economy was far less constrained by embedding regulations. Of course, they did not encounter those countries in a natural state of disembeddedness. Rather, this process required the construction and mobilization of institutions that would clear the way for international investors.

The World Bank and the IMF, dangling the carrot of development resources, were refashioned to play this role. Promoting their 'Washington Consensus,' these institutions acted as vehicles for a global disembedding of the economy — both directly, in the cases of countries that agreed to the terms of structural adjustment; and indirectly, in the cases of countries who were forced to compete with them, applying pressure to undo the progress of the social democratic arrangement.

In other words, capital and labour have been caught in a game of cat and mouse across the quadrants of this map. Capital first scurried to enshrine its interests at the national level, then labour caught up and contested. Capital scurried to reconstruct the global economy in its image — but no social movement has emerged to contest it at that scale.

Indeed, in the aftermath of the global financial crisis of 2008, new political movements tended to point toward more familiar quadrants of the map. Right-wing populists from Nigel Farage to Donald Trump heralded a new model of national neoliberalism: shifting back on the axis of scale while demanding a deeply disembedded economy — Singapore-on-Thames, or the Trump tax cuts. Their left-wing opponents similarly called to reassert the primacy of the nation, but with much stronger social protections. Globalization, both agreed, had gone too far.

But in calling to return to the nation, the new social democrats failed to learn the lessons of the past. Capital, now globalized, has the upper hand against individual nations that hope to contest it. It can slither between borders, and hide out in havens. The mouse is out of the bag — now we must train the cat to find it.

In other words, our task is to push into the missing quadrant — to re-embed the institutions that govern the global economy: an embedded internationalism.

Figure 2: Strategies for Embedded Internationalism

But how, exactly, do we get there?

The map provides some ideas. In particular, it suggests two lines of strategic attack that we must pursue simultaneously.

The first is contestation: igniting a transnational debate that links social movements around the world in a single conversation about our international institutions — scaling up along the x-axis. The last half-century of globalization has made our national debates increasingly alike in content, focused on transnational issues like trade and finance in a global economy. But they remain fragmented in form: few social movements or political parties coordinate their platforms across borders. Scaling up means integrating these national debates to match the scale of their issues.

In a word, we need to get international institutions back on the ballot, calling on progressive politicians to outline their own vision for institutions like the World Bank, IMF, ILO, and the UN.

The second is democratization: demanding reforms that shift power away from the technocrats and toward regular people — re-embedding along the y-axis. We might start by killing the 'gentleman's agreement' that allows the US and the EU to install their allies at the head of the World Bank and IMF, respectively. But we should also call to introduce democratic representation at the heart of these institutions, allowing countries to elect members of their governing council.

These may sound like pipedreams. But the perverse power structure of our international institutions means that a progressive president in the White House or prime minister at Number 10 could radically shift the momentum in favour of these proposals. After all, countries like the US and the UK hold key purse strings. If contestation can push their governments to table serious democratization reforms — to raise the voices of small countries around the world — these proposals will get a hearing.

Of course, not every institution can be salvaged in the process of re-embedding the global economy. Consider the International Finance Corporation (IFC), a wing of the World Bank Group that oversees private sector investment in developing countries. The IFC today acts as little more than an engine for financialisation, turning public wealth into financial products that can be traded across the financial sector. A bold agenda for global re-embedding would simply abolish the IFC full stop.

But new institutions can be proposed in its place. Progressives around the world are crying out to coordinate their demands and fight together to constrain the global oligarchy. All it takes is one progressive government with the courage — and the imagination — to propose new institutions to do so: worker ownership funds, green transition institutions, tax justice authorities. Even proposals that are introduced unilaterally will soon attract international participation. If the US builds it, in particular, they will certainly come.

Critics like Adam Tooze suggest that efforts to reclaim and transform the international institutional order are "quixotic," because the global economy is too fluid, too volatile to be ordered in this way.

But laissez faire was planned, and globalization was, too — and now David Malpass is preparing to remould them. Progressives should take a page from the playbook of their opponents and develop a plan to roll out new institutions for the re-embedding of the economy, rather than simply relying on ad-hoc interventions to roll back the mistakes of the past.

III.

On the eve of Trump's inauguration, the United States was poised to retreat from its role as the driver of global disembedding. The Trans-Pacific Partnership (TPP) was dead. America First was alive. And virtually every international institution had earned the ire of the incoming president. "If the word 'isolationist' has any meaning, [Trump] qualifies as one," the FT reported.

But now we can see that the right-wing populist project is more dangerous than it first appeared. Far from rejecting international institutions — scaling back from the global level to the national one — Trump and his allies are mounting their take-over. The objection to the Washington Consensus, it turns out, was not that it did not serve their interests. It was that it did not serve them well enough. This is what David Malpass means when he says that multilateralism has gone "too far."

It is all too easy for progressives to dismiss international institutions as the machinery of global capital, and to focus where power appears closer at hand.

But we cannot afford to play peek-a-boo politics: just because we don't talk about the World Bank and the IMF doesn't mean that they are not still there. As the mess of Brexit has definitively demonstrated, power at the international level is a prerequisite for sovereignty much lower down, particularly in countries that lack the geopolitical weight to set the international agenda. We must therefore develop our own vision of international institutional change, or else they will be reshaped by our opponents.

The first steps of this strategy are now clear. We must contest globally, reminding people and parties around the world that international institutions are theirs for the taking. And we must demand democracy, reigniting our imagination about how to transform them.

But the prospects for such a transformation are far better than they may appear. The unanimous appointment of an anti-globalist like David Malpass at the helm of a hyper-globalizing institution like the World Bank should be an inspiration to all of us — that radical change may be around the corner.

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This entry was posted in Banana republicEconomic fundamentalsFree markets and their discontentsGlobalizationGuest PostIncome disparityPoliticsRegulations and regulatorsThe destruction of the middle class on April 18, 2019 by .

13 COMMENTS

  1. Sound of the SuburbsApril 18, 2019 at 4:07 am

    Let's work out what's wrong with their half-baked neoliberal ideology and its underlying economics, neoclassical economics.

    "Everything is getting better and better look at the stock market" the 1920's sucker that believed in free markets

    "Stocks have reached what looks like a permanently high plateau." Irving Fisher 1929.

    The 1920's neoclassical economist that believed in free markets knew this was a stable equilibrium.

    Better shelve this for a few decades until everyone has forgotten.

    Now everyone has forgotten we can use it for globalisation.

    I don't know who the architects of globalisation were, but I do know they weren't very bright.

    Just because people have forgotten what's wrong with neoclassical economics, it's still got all its old problems.

    Running an economy on neoclassical economics.

    The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression.

    No one realised the problems that were building up in the economy as they used an economics that doesn't look at private debt, neoclassical economics.

    What's the problem?
    1) The belief in the markets gets everyone thinking you are creating real wealth by inflating asset prices.
    2) Bank credit pours into inflating asset prices rather than creating real wealth (as measured by GDP) as no one is looking at the debt building up.

    Let's have another go.

    https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png

    Whoops!

    1929 and 2008 look so similar because they are; it's the same economics and thinking.

    The global economy never stood a chance.


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