Larry Summers: Trump is undermining his own treasury secretary

Larry Summers: Trump is undermining his own treasury secretary

President Trump's tax proposals were rolled out yesterday by Treasury Secretary Mnuchin and NEC Director Cohn. For reasons of long run budget health, fairness and economic impact, I think they are extraordinarily ill-advised. I am certain that the substantive concerns I have will be extensively addressed in the debates to come.

As I read about the proposals and thought back over the tax discussions of the last year, I found myself feeling sympathetic to Mnuchin. Some of the most difficult moments for any Cabinet officer comes when the president fails to respect his department's desire to do serious policy work, when political circumstance forces the repudiation of his major past statements, and when he has to out of loyalty support absurd propositions. All three of these things happened to Secretary Mnuchin this week.

By all accounts the Treasury was on a path working with other agencies to come forth by June with a set of tax reform proposals. Treasury officials were shocked when the president, speaking in the Treasury building, announced last Friday that the administration would unveil its tax plan today. There was no time for specification of a proposal, let alone consultation on its merits, estimates of its revenue impact, or evaluations of its economic impact. Instead the treasury secretary was asked to lend his prestige and that of his department to a one page document that would have been judged skimpy on detail if it were a campaign proposal. I can only imagine how demoralized the Treasury tax staff — a group that rightly prides itself on its professionalism and analytic seriousness — must be.

Mnuchin has stated on multiple occasions that the administration's tax proposals would not favor the rich. Whatever its other virtues, distributional neutrality is not a feature of the plan announced yesterday. Indeed, between massive corporate rate cutting, big tax cuts for the highest income individual taxpayers, elimination of the estate tax and other incentives, it is a certainty that the vast majority of the benefits of the plan will go to a very small fraction of tax payers.



Mnuchin also stated last week, in what appeared to be a scripted interview, that tax cuts would be so good for growth that they would come very close to paying for themselves. This of course is the famous Laffer curve idea. In the context of an economy with 4.5 percent unemployment, it is absurd. Ronald Reagan asserted that tax cuts could pay for themselves during his campaign but his Treasury Department was far too serious to ever make such a statement. His administration recognized that large tax cuts would raise deficits unless offset by spending cuts. So did the George W. Bush Administration. So have House and Senate Republicans. So has every reputable economist who has addressed the subject in the last several decades.

The treasury secretary's credibility is an important national asset that could be needed at any moment. I am very sorry to see it squandered on behalf of a set of tax reform proposals that are at best a bargaining position.

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John Case
Harpers Ferry, WV

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Links for 04-27-17 [feedly]

Links for 04-27-17
http://economistsview.typepad.com/economistsview/2017/04/links-for-04-27-17.html

• A John Bates Clark Prize for Economic History! - A Fine Theorem
• Unambiguous Evidence That Concentration Is on the Rise - ProMarket
• To accommodate or not: The Fed's new normal - Eggertsson, Mehrotra, Robbins
• How Accurate are Projections of Energy Intensity? - Stochastic Trend
• The Global Systemically Important Banks: An Update - Tim Taylor
• "I am the king of debt. I do love debt. I love debt." - Econbrowser
• Using Fiscal Policy for Trade Rebalancing ise Hard - Brad Setser
• Minimum-Wage Warriors See Certainty in Ambiguity - Bloomberg View
• The student loan crisis is fueled by a weak labor market - Equitable Growth
• A progressive VAT - John Cochrane
• Exchange rate prediction redux - VoxEU

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Minimum Wages and the Distribution of Family Incomes in the United States [feedly]

Minimum Wages and the Distribution of Family Incomes in the United States
http://economistsview.typepad.com/economistsview/2017/04/minimum-wages-and-the-distribution-of-family-incomes-in-the-united-states.html

Arindrajit Dube at Equitable Growth: 

Minimum wages and the distribution of family incomes in the United States: Introduction The ability of minimum-wage policies in the United States to aid lower-income families depends on how they affect wage gains, potential job losses, and other sources of family income, including public assistance. In contrast to a large body of research on the effects of minimum wages on employment,¹ there are relatively fewer studies that empirically estimate the impact of minimum wage policies on family incomes. 

In my new paper, I use individual-level data between 1984 and 2013 from the Current Population Survey by the U.S. Census Bureau to provide a thorough assessment of how U.S. minimum wage policies have affected the distribution of family incomes.² Similar to existing work, I consider how minimum wages influence the poverty rate. Going beyond most existing research, however, I also calculate the effect of the policies for each income percentile, adjusting for family size. This highlights the types of families that are helped or hurt by wage increases. I also calculate the effect on a broader measure of income that includes tax credits and noncash transfers. I quantify the offset effect of higher wages on the use of transfer programs and the gains net of the offsets by income percentiles, painting a fuller picture of how minimum-wage policies affect the U.S. income distribution and the overall well-being of U.S. families.

Overall, I find robust evidence that higher minimum wages lead to increases in incomes among families at the bottom of the income distribution and that these wages reduce the poverty rate. A 10 percent increase in the minimum wage reduces the nonelderly poverty rate by about 5 percent. At the same time, I find evidence for some substitution of government transfers with earnings, as evidenced by the somewhat smaller income increases after accounting for tax credits such as the Earned Income Tax Credit and noncash transfers such as the Supplemental Nutrition Assistance Program. The overall increase in post-tax income is about 70 percent as large as the increase in pretax income. ...

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Congress should oppose Acosta’s confirmation and demand a pro-worker secretary of labor [feedly]

Congress should oppose Acosta's confirmation and demand a pro-worker secretary of labor
http://www.epi.org/blog/congress-should-oppose-acostas-confirmation-and-demand-a-pro-worker-secretary-of-labor/

Alexander Acosta will not be the secretary of labor that working people need, and for that reason, senators should oppose his confirmation. As Senator Elizabeth Warren said, the test is not whether Acosta is better than Andrew Puzder, a truly abysmal, insulting choice to lead the U.S. Department of Labor (DOL). The test must be whether he will be a strong advocate for working Americans, someone who will use the power of his department to improve their lives. The evidence from Acosta's confirmation hearings and his past service in the government shows that he will not. The best we might hope for is that he will not politicize the agency and will be a caretaker until an administration that believes in the Labor Department's mission is elected. That is not enough.

It isn't even clear that Acosta will be a good caretaker of the agency whose mission is to foster and promote the welfare of the nation's job seekers, wage earners, and retirees. At Acosta's confirmation hearing, Senator Maggie Hassan (D-NH) asked whether Acosta would defend the DOL against the draconian 21 percent budget cut called for in President Trump's preliminary budget. Acosta refused to say he would, despite professing concern about reducing the already tiny number of OSHA compliance officers in New Hampshire. Even Scott Pruitt, who spent years in state government attacking and suing the Environmental Protection Agency (EPA) before his appointment as EPA administrator, cared enough about his mission to publicly oppose the EPA budget sent to Congress by Trump's Office of Management and Budget. DOL's Wage and Hour Division has fewer than 1000 inspectors for 7.3 million workplaces, and wage theft is a nationwide epidemic costing workers tens of billions of dollars a year. Yet Acosta would not commit to work to preserve the meager resources devoted to protecting workers from abuse.

Read more

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Enlighten Radio:Climate March, Guv Shutdown, Labor Film Fest

John Case has sent you a link to a blog:



Blog: Enlighten Radio
Post: Climate March, Guv Shutdown, Labor Film Fest
Link: http://www.enlightenradio.org/2017/04/climate-march-guv-shutdown-labor-film.html

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Labor, Socialists and Immigration [feedly]

Labor, Socialists and Immigration
https://talkingunion.wordpress.com/2017/04/24/labor-socialists-and-immigration/

Dr. Duane E. Campbell, April 19, 2017

In spite of the economic boon for the wealthy, working people in the U.S. have yet to receive a significant improvement in their standard of living for over 30 years. At the same time, democratic forces are once again confronted with anti immigrant campaigns- this time fostered and promoted by a President of the U.S.

As socialists, we stand with and among the US working class in opposition to the rule of the transnational corporations and their exploitation of the economy and their despoliation of our lives, our society and our environment.

We are currently experiencing a major restructuring of the global economy directed by the transnational corporations to produce profits for their corporate owners. The impoverishment of the vast majority of people in pursuit of profits for a small minority has pushed millions to migrant in search of food, jobs, and security. Global capitalism produces global migration. Along with wars NAFTA and other "Free Trade" deals each produce a new waves of migration.

Socialists support the rights of working people to organize, to form unions, and to protect their rights and to advance their interests. Unions have always been an important part of how socialists seek to make our economic justice principles come alive. Working people- gathered together and exploited in the capitalist workplace-are well positioned to fight their common exploitation.

Current immigration laws and practices, imposed upon us all by the corporations and their control of our government, often prevent working class unity by dividing workers against each other and by creating categories of workers with few rights to organize and thus to protect their own interests.

The neoliberal capitalist economic system now being created by the relentless merging of the world's markets also impoverishes the majority of U.S. workers. The average U.S. worker has experienced a decline in their real wages since 1979. Quality industrial jobs have moved to low wage, anti union areas in the U.S. and to Mexico, China, Singapore, Vietnam, India and other nations. At present the U.S. has no significant controls on capital flight. Indeed, the US government subsidizes some corporations to move jobs to Honduras, El Salvador, and the Caribbean.

The economic restructuring of Asia, Africa, and Latin America has pushed millions to migrate to the U.S. and Europe in search of a decent standard of living. In the two decades leading up to 2008, the U.S. experienced a major increase in immigration matching the immigration influx to the US of the period from 1890-1910. The large scale immigration was largely from Asia and Latin America. It has changed the ethnic and cultural make up of the labor force and the working class in many states and urban areas.

 

At the same time in both Europe and the U.S., among others, we see an intensification of narrow economic nationalism and the blaming of immigrants for the economic troubles of capitalism.

U.S. economic policy (called neoliberal capitalism) promotes the movement of capital and goods across borders to increase profits while at the same time it increases barriers to worker mobility . Since 2004 there has been a militarization of the US- Mexican border, a proposal to build a wall, and the significant increase in in arrests and internal enforcement threatening immigrant labor. The result is a situation in which workers on both sides of this border and around the world have been disempowered and impoverished.

In the current climate the economic forces of global corporate capitalism (neoliberal capitalism) are unrestrained. Corporations encourage the movement of capital, and thus jobs, to low wage areas. When workers attempt to exercise their power against these conditions via forming unions and organizing to withhold labor, their efforts are easily undermined by repression and the ever-looming threat of factories moving overseas. Labor unions and even local governments lose their power to hold capital accountable and all workers are forced to accept ever worsening wages and working conditions.

Current border enforcement makes exploitation possible by dividing the global working class into competing sectors and thus inhibiting the possibility of building a united working class movement.

 

As socialists, as internationalists, we know that rather than building walls and more prisons, what would really help workers to raise wages and improve living conditions is much stricter enforcement of worker protection and anti-discrimination laws including the right to form democratic unions.

Contrary to the Trump Administration narrative, immigrants create new jobs in the US by, buying homes, spending their income and paying taxes. A legal flow of immigrants based upon workforce demand will strengthen the U.S. economy by keeping productivity high and countering the negative impacts of the aging U.S. populations.

 

Threats by employers who use immigration status to keep workers from organizing unions or protesting illegal conditions should be a crime.  When there's no punishment for violating labor rights, workers have no rights. We should prohibit immigration enforcement during labor disputes or against workers who complain about illegal conditions.

 

The problem with our economy is not immigration; the problem is our broken immigration laws that allow business to exploit workers who lack legal status, driving down wages for all workers. If every immigrant were allowed to participate in our system, pay their dues, and become a citizen, we could block the corporation's exploitation and eliminate the two-tiered workforce while building a united labor movement that raises wages and living standards for all workers.

 

In the end, we need an immigration policy that brings people together instead of pitting workers against each other. We need an immigration policy that benefits migrants, their home communities, and working people here in the U.S. And we need a national policy that limits U.S. military and economic interventions in other parts of the world.

 

As socialists we support reforms that would grant immediate permanent resident status to all current undocumented workers and their children and that would establish an expeditious and non punitive route to citizenship for these workers and their families.

 

As socialists, we struggle for a system that produces security, not insecurity.  We need a commitment to equality and equal status for all.  We need to make it easier for workers to organize and protect themselves through unions. All workers must have full labor rights, including the right to organize, the right to protest unjust labor conditions, the right to change employers, and the right to form unions of their choice. We will work with immigrant rights organizations to promote family reunification, to halt deportations, to demilitarize our borders, and to help all of our children- regardless of legal status- to realize the dream of attaining a university education.

 

The Immigrants' Rights Committee of DSA is working to defend the rights of all workers and working families in the U.S. Their current project is to support the work of Cosecha in promoting a Day Without Immigrants ( Un Dia Sin Inmigrantes) https://www.lahuelga.comfor May 1, 2017. We request your support in locations around the country. You can contact our committee at antiracism@dsausa.org

 

A working paper of the Immigrants' Rights Committee of DSA. Suggestions are welcome. Please send them to campd22702@gmail.com

http://www.dsausa.org/socialists_and_immigration_dl

http://antiracismdsa.blogspot.com/2017/04/socialists-and-immigration.html

We know that several DSA local chapters are participating in May Day efforts organized by a wide variety of coalitions partners. This approach is consistent with our strategy of distributed organizing. Local DSA chapters are marching in Chicago, Los Angeles, East Bay, Sacramento, and more.

Our national DSA effort has focused on working with Cosecha and the Dia Sin Inmigrantes. We encourage DSA chapters to also assist in this worker protection efforts of Cosecha. By this message we are asking our members of the Immigrants' Rights Committee to contact DSA local chapters in their area and encourage them to support the DSA/Cosecha efforts. We welcome and encourage DSA locals chapters to work with and remain in communication with the Immigrants' Rights Committee to foster coordination of efforts. We can't encourage others to join your work if we do not know about it. We encourage DSA members to join the Immigrants' Rights Committee at the e mail below.

You can get in touch with the Immigrants' Rights Committee here http://www.dsausa.org/antiracism

Thank you for the work that you do.

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Another Organizing Victory in the South: Georgia’s Nestlé Workers Vote to Join RWDSU [feedly]

Another Organizing Victory in the South: Georgia's Nestlé Workers Vote to Join RWDSU
https://aflcio.org/2017/4/24/another-organizing-victory-south-georgias-nestle-workers-vote-join-rwdsu

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