Eastern Panhandle Independent Community (EPIC) Radio:EPIC Thursday -- Local Truth with Hound Dog and Abel -- Economics and Social Science -- LIve Music

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Blog: Eastern Panhandle Independent Community (EPIC) Radio
Post: EPIC Thursday -- Local Truth with Hound Dog and Abel -- Economics and Social Science -- LIve Music
Link: http://www.enlightenradio.org/2017/03/epic-thursday-local-truth-with-hound.html

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Fwd: A Would Be Fascist Dictator

Sent from my iPhone

Begin forwarded message:

From: Stewart Acuff <acuff.stewart@gmail.com>
Date: March 9, 2017 at 4:45:18 AM EST
To: Stewart <acuff.stewart@gmail.com>
Subject: A Would Be Fascist Dictator

A would be fascist dictator is now president

He's singled out groups of Americans to scape goat

With executive orders he has sent

Americans to foreign lands , again kept folks from the vote

Busily destroying the environment

Destroying our public education putting our kids in the boat

Of ignorance and destroying our labor movement.

More money to the military

Working on a budget that has bènt

The Common Good to a common bad re

Nothing for us but a safety net rent

Into strips of fabric torn too easily

By his evil into Americas shell.

Sent from my iPhone

Eastern Panhandle Independent Community (EPIC) Radio:EPIC Wednesday: Prescription for Addiction, and Resistance

John Case has sent you a link to a blog:



Blog: Eastern Panhandle Independent Community (EPIC) Radio
Post: EPIC Wednesday: Prescription for Addiction, and Resistance
Link: http://www.enlightenradio.org/2017/03/epic-wednesday-prescription-for.html

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Dean Baker: Progressives Should Support Policies That Help All Working-Class People

Here here!

Progressives Should Support Policies That Help All Working-Class People

Dean Baker
Truthout, March 6, 2017

See article on original site

In the months following the election there has been a strange debate about whether Democrats should try to recapture the white working class voters who supported Donald Trump. Those arguing against such an effort have said that there is no reason to try to appeal to voters who supported a racist, xenophobic and misogynist candidate.

While no one should have empathy for the hatred expressed by Donald Trump and many of his supporters, there is a separate policy issue. The question is whether progressives should look to support policies that help the working class.

Note that I said "working class," not "white working class." It's true that many white manufacturing workers have been hit badly by changes in the economy over the last four decades, most notably the rise in the trade deficit and the decline in unionization. But millions of African-American, working-class workers were also hit by these same trends, as were working-class Latinos and Latinas, although fewer Latinos and Latinas were working in factories three decades ago.

Workers without college degrees have been losers in the last three decades regardless of their race or ethnic background. This is a simple and important point -- and has been noted by a number of critics since the election. However, it is widely misunderstood.

In recent months there actually have been several pieces in major news outlets arguing the opposite: that somehow white workers are unique in losing out over this period. These analyses, that ostensibly showed that African Americans and Latinos and Latinas had done better in the labor market than whites, either failed to control for the aging of the population or relied on picking a single month of highly erratic data rather than a longer time period. Any honest account shows that workers without college degrees have faced a weak labor market and stagnant wages over the last four decades.

This point is important because, just as is the case with whites, most African-American workers do not have college degrees nor do most Latino, Latina or Asian workers. Policies that help workers without college degrees will benefit most non-white workers. This means that even if we didn't give a damn about the white working class voters that supported Trump, we should still be promoting policies that reverse the massive upward redistribution we have seen over the last four decades.

On trade this means policies designed to reduce the trade deficit. This issue here is not "winning" in negotiations with our trading partners. It's a question of priorities in trade negotiations.

Rather than demanding stronger and longer protections for Pfizer's patents and Microsoft's copyrights, we should be getting our trading partners to support a reduction in the value of the dollar in order to make our goods and services more competitive. If we can reduce the trade deficit by 1-2 percentage points of GDP ($180 billion to $360 billion) it will create 1-2 million manufacturing jobs, improving the labor market for the working class.

We should use trade to reduce the pay of doctors and other highly paid professionals. If we open the door to qualified professionals from other countries we can save hundreds of billions of dollars a year on health care and other costs, while reducing inequality.

We should also support policies that rein in the financial sector, such as reducing fees that pension funds pay to private equity and hedge funds and their investment advisors. This money comes out of the pockets of the rest of us and goes to some of the richest people in the country. A financial transactions tax, which could eliminate tens of billions of dollars spent each year on useless trades, would also be a major step towards reducing inequality.

Policies that put downward pressure on the pay of CEOs and other top executives would also help the working class. This could mean, for example, making it easier for shareholders to reduce CEO pay. In the nonprofit sector we could place a cap on the pay of employees for anyone seeking tax-exempt status. Universities and nonprofit charities could still pay their presidents whatever they wanted; they just wouldn't get a taxpayer subsidy.

There is a long list of market-based policies that we can pursue to reverse the upward redistribution of the last four decades. (For the fuller list see Rigged). These are policies that we should pursue because it is the right thing to do. It will help the working class of all races, including the white working class.

These policies may not get the white working class to vote for progressive candidates instead of racist demagogues like Donald Trump. But it is worth noting that almost all the people who insist that such policies won't matter also assured us that Hillary Clinton would be elected president.

There is one other point on these policies that is worth mentioning. While Trump won among white college graduates, his margin among these voters was much smaller than his margin among whites without college degrees.

If the growth in college graduation rates had grown at the same rate since 1979 as they had in the years from 1959 to 1979, there would have been 10.4 million more white college graduates voting last November and 10.4 million fewer whites without college degrees. If these people split their votes in the same ratio as other white college graduates and non-graduates, it would have increased Hillary Clinton's popular vote margin by more than 1.8 million votes, virtually guaranteeing her a solid victory in both the popular vote and the Electoral College.

This is not to say that those who have college degrees are automatically more likely to vote a certain way. Whatever the implications for winning elections, progressives should support policies that reverse upward redistribution because it is the right thing to do. And this is true even for those who don't give a damn about the white working class.

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John Case
Harpers Ferry, WV

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Dean Baker: The New Trade Agenda: Deals that Promote Equality Rather than Inequality [feedly]

The New Trade Agenda: Deals that Promote Equality Rather than Inequality
http://cepr.net/publications/op-eds-columns/the-new-trade-agenda-deals-that-promote-equality-rather-than-inequality

The New Trade Agenda: Deals that Promote Equality Rather than Inequality

Dean Baker
The Hankyoreh, March 5, 2017

See article on original site

With the Trans-Pacific Partnership now definitely dead and Donald Trump pushing for a renegotiation of NAFTA, many progressives are looking for a fundamental re-examination of trade deals. As supporters of international cooperation rather than narrow nationalists, progressives have often felt uncomfortable opposing trade deals.

While there is no reason to be defensive about opposing trade deals that favored business interests at the expense of workers, consumers, and the environment in all the countries participating, it is worth asking how trade deals can be crafted to promote a progressive agenda. There really is no shortage of ideas in this area.

To start, from a U.S. perspective, the items opened up for trade has to be broadened. High-end professional services, such as physicians' and dentists' services should be front and center in any future trade deals. The U.S. has highly protectionist rules in this area. In the case of physicians, foreign doctors are prohibited from practicing in the United States unless they complete a U.S. residency program. Foreign dentists must graduate from a U.S. dental school, although in recent years graduates of Canadian schools have been allowed also.

As a result of this protectionism, doctors in the United States earn on average more than $250,000 a year, twice as much as their counterparts in other wealthy countries. The potential gain to the United States from standardizing licensing requirements in professional services is at least $100 billion a year and quite likely close to $200 billion (0.5-1.0 percent of GDP). The goal need not be that all countries have the same standard, but rather that licensing rules are transparent and based on legitimate public interest, not protecting the incomes of professionals.

A central focus of recent trade deals has been making patent and copyright protection stronger and longer. These forms of protectionism are incredibly costly, often raising the price of the protected items by many thousand percent above the free market price. This is especially important in the case of prescription drugs, where patent monopolies can raise the price of drugs from a few hundred dollars to a few hundred thousand dollars. Modern trade deals should be pushing in the opposite direction: trying to diffuse knowledge and cultural output as widely as possible.

Towards this end, trade deals should create more space for open innovation and creative work. This would mean setting rules that would allow parties to trade deals to share publicly funded work, while excluding those who do not share in the funding. For example, if the United States and South Korea were to both agree to spend 0.5 percent of GDP on developing new drugs, a trade deal could give both countries access to the output, while maintaining patent rights against the use by other nations. Trade agreements of this sort could be a powerful dynamic towards creating a world of open innovation and culture.

Another area where trade deals can work to both increase efficiency and reduce inequality would be by requiring greater transparency in government dealings with the financial sector. In the United States this is especially important with public pension funds. State and local government pension funds have over $6 trillion in assets. They routinely turn over management of these funds to investment advisers, private equity funds and hedge funds. The terms of these arrangements are rarely disclosed. As a result, pension funds often pay far more than necessary for these services.

Trade deals that required full transparency in these government dealings with the financial sector would be a great win-win. They would reduce the amount of money wasted (perhaps "stolen" is the better word) by financial firms operating through political connections.

Also, full transparency would open up the sector to more competition both domestic and foreign. If we want the public to be able to fuller benefit from open trade, we should want investment fund managers from all over the world competing to invest the trillions of dollars held by pension funds in the United States and elsewhere.

In a similar vein, it would be a huge step forward to include competition policy as an agenda item in future trade deals. The logic here is straightforward. If a company is pursuing anti-competitive policies to control the market and keep out domestic competitors, it is also implicitly acting in a way to exclude potential foreign competitors.

The U.S. government has largely abandoned anti-trust policy in the last four decades. Companies like Microsoft and Facebook have openly engaged in practices that almost certainly would have led to anti-trust actions in prior decades.

In Microsoft's case, it managed to lock up a near monopoly on operating systems by signing contracts with manufacturers requiring them to pay Microsoft for computers shipped with a competitor's software. Facebook openly sought to buy Snapchat and Whatsapp for the purpose of eliminating a potential competitor. (Its buyout succeeded in the case of Whatsapp.) It would be good policy and good trade policy to require governments to take action against companies that are seeking to monopolize markets.

These are the sort of rules that we should be looking to include in future trade agreements. There is no inherent reason that trade should redistribute income upward. It only happens because the people designing the deals want this outcome. That can change.

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Walden Bello: Keynesianism and the Great Recession [feedly]

Keynesianism and the Great Recession
http://triplecrisis.com/keynesianism-and-the-great-recession/

An Interview with Walden Bello

Keynesianism offered important tools for overcoming the economic crisis, but its application by Obama's government was too half-hearted and misdirected (going to banks rather than households) to effectively reduce the recession. Clinton paid the price.

This interview with Walden Bello is based on the article "Keynesianism in the Great Recession:
Right Diagnosis, Wrong Cure," available here from the Trans National Institute.

Q: What were the main ways in which neoliberalism created the Great Recession?

A: Neoliberalism sought to remove the regulatory constraints that the state was forced to impose on capitalist profitability owing to the pressure of the working class movement.

But it had to legitimize this ideologically. Thus it came out with two very influential theories, the so-called efficient market hypothesis (EMH) and rational expectations hypothesis (REH). EMH held that without government-induced distortions, financial markets are efficient because they reflect all the available information available to all market participants at any given time. In essence, EMH said, it is best to leave financial markets alone since they are self-regulating. REH provided the theoretical basis for EMH with its assumption that individuals operate on the basis of rational assessments of economic trends.

These theories provided the ideological cover for the deregulation or "light touch" regulation of the financial sector that took place in the 1980s and 1990s. Due to a common neoliberal education and close interaction, bankers and regulators shared the assumptions of this ideology. This resulted in the loosening of regulation of the banks and the absence of any regulation and very limited monitoring of the so-called "shadow banking" sector where all sorts of financial instruments were created and traded among parties.

With so little regulation, there was nothing to check the creation and trading of questionable securities like subprime mortgage-based securities. And with no effective monitoring, there were no constraints on banks' build-up of unsustainable balance sheets with a high debt to equity ratios.

Without adult supervision, as it were, a financial sector that was already inherently unstable went wild. When the subprime assets were found to be toxic since they were based on mortgages on which borrowers had defaulted, highly indebted or leveraged banks that had bought these now valueless securities had little equity to repay their creditors or depositors who now came after them. This quickly led to their bankruptcy, as in the case of Lehman Brothers, or to their being bailed out by government, as was the case with most of the biggest banks. The finance sector froze up, resulting in a recession—a big one—in the real economy.

Q: So how did these banks get to be so big and powerful? What drove the "financialization boom" that triggered the recession?

A: Financialization or an increasing preference for speculative activity instead of production as a source of profit was driven by four developments. The first was the abolition, during the Clinton Administration, of the Glass-Steagall Act that had served as a Chinese Wall between commercial or retail banking and investment banking, as a result of tremendous pressure from the big banks felt left out of the boom in trading. The second was the expansive monetary policy promoted by the Federal Reserve to counter the downturn following the piercing of the dot.com bubble in the first years of the new century. Third was the government and business' move to shore up effective demand by substituting household indebtedness for real wage increases. Fourth was the lifting of capital controls on the international flow of finance capital, following the era of financial repression during the post-war period. These developments acted in synergy, first to produce a speculative boom in the housing and stock markets, then feeding on one another to accelerate an economic nose-dive during the bust.

Q: What was the worst impact of the crisis, and upon whom?

A: With unemployment hitting 10 per cent in 2010, working people suffered the most. Although the unemployment rate is now down to five per cent, that fall has been driven less by improved labor market conditions than a falling rate of participation, as discouraged workers withdrew from the labor force. More than 4 million homes were foreclosed. Lower income households, the main victims of aggressive loan sharks, suffered most.

As far as growth was concerned, the recovery was tepid, with average GDP growth barely 2 per cent per annum between 2011 and 2013, less than half the pace of the typical post-World War II expansion. In terms of inequality, the statistics were clear: 95% of income gains from 2009 to 2012 went to the top 1%; median income was $4,000 lower in 2014 than in 2000; concentration of financial assets increased after 2009, with the four largest banks owning assets that came to nearly 50% of GDP.

An Economic Policy Institute study summed up the trends: "[T]he gains of the top 1 percent have vastly outpaced the gains for the bottom 99 percent as the economy has recovered."
At the individual and household level, the economic consequences of being laid off were devastating; with one study finding that workers laid off during recessions "lose on average three full years of lifetime income potential." One estimate showed that the income of the United States would have been $2 trillion higher had there been no crisis, or $17,000 per household.

Q: What did Keynesianism offer as a way of responding to the crisis?

A: Keynesianism offered two major weapons for overcoming the crisis. The first and most important was a fiscal stimulus, or deficit spending by government. The second was monetary expansion. Essentially, these were forms of government intervention designed to revive the economy after a collapse of investment on the part of the private sector. They are called "countercyclical" since they are designed to counter the recessionary pressures brought about by the crisis of the private sector.

Q: How were Keynesian policies and strategies applied in the wake of the onset of the recession?

A: The Keynesian interventions were in the right direction. Unfortunately, they were applied half-heartedly by the Obama administration. For instance, the size of the fiscal stimulus $787 billion might have been enough to prevent the recession from getting worse, but it was not enough to trigger an early recovery, which would have demanded at least $1.8 trillion, according to Cristina Romer, the head of Obama's Council of Economic Advisers.

Expansive monetary policy was always a second best solution and was not as effective as a fiscal stimulus. Yes, cutting interests to zero and quantitative easing—or providing banks with infusions of money—did have some impact, but this was rather small since, for the most part, individuals and corporations did not want to go further into debt but wanted to focus on lessening their debt.

Q: What three things could have been done, "truer" to the spirit of Keynesianism, that would have reduced the recession?

A: First of all, there should have been a much bigger stimulus, one along the lines of Cristina Romer's proposal of $1.8 trillion. Second, instead of focusing on saving the banks, the government should have devoted resources to assisting the millions of troubled homeowners, a move which would have raised effective demand. Third, the insolvent banks should have been taken over or nationalized and the billions spent on recapitalizing them or guaranteeing their borrowing should have been devoted to creating jobs to absorb the unemployed.

Q: Is financialization still a threat?

A: Yes, even conservative analysts say that the so-called Dodd-Frank reform encourages moral hazard or reckless behavior by banks owing to their belief that when they get into trouble, the government will bail them out.

Derivatives—which Warren Buffet called "weapons of mass destruction"—are still virtually unregulated. And so is the shadow banking sector. The non-transparent derivatives market is now estimated to total US$707 trillion, or significantly higher than the US$548 billion in 2008.

As one analyst puts it, "The market has grown so unfathomably vast, the global economy is at risk of massive damage should even a small percentage of contracts go sour. Its size and potential influence are difficult just to comprehend, let alone assess." Former U.S. Securities and Exchange Commission Chairman Arthur Levitt, the former chairman of the SEC, says that none of the post-2008 reforms has "significantly diminished the likelihood of financial crises."

Q: What has been the legacy of the crisis on U.S. politics?

A: One can say that the Obama administration's failure to reinvigorate the economy after eight years and to reform the banks was the central factor that lost the elections for Hillary Clinton. If there's one certainty that emerged in the 2016 elections, it was that Clinton's unexpected defeat stemmed from her loss of four so-called "Rust Belt" states: Wisconsin, Michigan, and Pennsylvania, which had previously been Democratic strongholds, and Ohio, a swing state that had twice supported Barack Obama.

The 64 Electoral College votes of those states, most of which hadn't even been considered battlegrounds, put Donald Trump over the top. Trump's numbers, it is now clear, were produced by a combination of an enthusiastic turnout of the Republican base, his picking up significant numbers of traditionally Democratic voters, and large numbers of Democrats staying home.
But this wasn't a defeat by default. On the economic issues that motivate many of these voters, Trump had a message: The economic recovery was a mirage, people were hurt by the Democrats' policies, and they had more pain to look forward to should the Democrats retain control of the White House.

The problem for Clinton was that the opportunistic message of this demagogue rang true to the middle class and working class voters in these states, even if the messenger himself was quite flawed. These four states reflected, on the ground, the worst consequences of the interlocking problems of high unemployment and deindustrialization that had stalked the whole country for over two decades owing to the flight of industrial corporations to Asia and elsewhere. Combined with the financial collapse of 2007-2008 and the widespread foreclosure of the homes of millions of middle class and poor people who'd been enticed by the banks to go into massive indebtedness, the region was becoming a powder keg of resentment.

True, these working class voters going over to Trump or boycotting the polls were mainly white. But then these were the same people that placed their faith in Obama in 2008, when they favored him by large margin over John McCain. And they stuck with him in 2012, though his margins of victory were for the most part narrower. By 2016, however, they'd had enough, and they would no longer buy the Democrats' blaming George W. Bush for the continuing stagnation of the economy.
Clinton bore the brunt of their backlash, since she made the strategic mistake of running on Obama's legacy—which, to the voters, was one of failing to deliver the economic relief and return to prosperity that he had promised eight years earlier.

Q: In what ways do we need to go beyond Keynesianism to address current economic and ecological problems?

A: I think Keynesianism has valuable insights into how a capitalist economy operates and can be steadied so its inherent instability and contradictions can be mitigated. But, as Minsky says, these solutions do not address the inherent instability of the system. A new equilibrium contains the seeds of disequilibrium. With its focus on growth propelled by effective demand, Keynesianism also has problems addressing the problem of ecological disequilibrium brought about by growth.
The real issue is capitalism's incessant search for profit that severely destabilizes both society and the environment. I think there is no longer any illusion, even among its defenders, that capitalism is prone to crises, and these days, these are crises that not only stem from the dynamics of production but from the dynamics of finance.

We need to work towards a post-capitalist system that aims at promoting equality, enhances instead of destroys the environment, is based on cooperation, and is engaged in planning to achieve short term, medium term, and long-term goals. In this scheme, finance would function to link savings to investment and savers to investors, instead of becoming an autonomous force whose dynamics destabilizes the real economy. A post-capitalist society does not mean the elimination of the market. But it does mean making use of the market to achieve democratically decided social goals rather than having the market drive society in an anarchic fashion.

Triple Crisis welcomes your comments. Please share your thoughts below.

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Bernstein: Inflation?! We ain’t got no stinkin’ inflation! [feedly]

Inflation?! We ain't got no stinkin' inflation!
http://jaredbernsteinblog.com/inflation-we-aint-got-no-stinkin-inflation/

This morning's update to the GDP report from last quarter showed that the Fed's preferred inflation gauge, the core PCE deflator, rose at an annual rate of only 1.2 percent in 2016Q4. Seasoned economists know that the technical term for such an increase is bupkis.

Now, OTE'ers know that I'm always going on about boosting the signal to noise ratio by looking at year-over-year changes instead of annualized quarterly ones. That holds here as well, as seen in the figure below: the yr/yr change cuts a smooth average through the noisier annualized quarterly change.

Source: BEA

Still, the deceleration in the noisier series could signal a slight slowing in an already low-pressure inflation environment. FWIW, a pure ARIMA forecast has the yr/yr change slowing from 1.7 percent to 1.5 percent over the next four quarters.

Anyway, GDP's on trend at about 2 percent, the job market is closing in, but not yet at, full employment (the underemployment rate is still about a percentage point too high), and wage growth has picked up a bit but it's not bleeding into price growth in anything like an obvious or threatening way. And inflation remains below the Fed's 2 percent target and could even be slowing.

I'm pretty guilty when it comes to the usual economist's hedge of "on the one hand this, on the other hand, that" but let me say unequivocally that the evidence in favor of a Fed rate hike in March looks really very, very weak.

 -- via my feedly newsfeed