Raghuram Rajan: Populist Nationalism Is "the First Step Toward Crony Capitalism"--
http://economistsview.typepad.com/economistsview/2017/08/ raghuram-rajan-populist- nationalism-is-the-first-step- toward-crony-capitalism.html Asher Schechter at ProMarket discusses Raghuram Rajan's views on the rise of populist nationalism:
Raghuram Rajan: Populist Nationalism Is "the First Step Toward Crony Capitalism": The wave of populist nationalism that has been sweeping through Western democracies in the past two years is "a cry for help from communities who have seen growth bypass them."So said Raghuram Rajan, the former governor of the Reserve Bank of India, during a keynote address he gave at the Stigler Center's conference on the political economy of finance that took place in June.Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating" impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community via exclusion.In his talk, Rajan focused on three questions related to current populist discontent: 1. Why is anger focused on trade? 2. Why now? 3. Why do so many voters turn to far-right nationalist movements?"Pointing fingers at these communities and telling them they don't understand is not the right answer," he warned. "In many ways, the kind of angst that we see in industrial countries today is similar to the bleak times [of] the 1920s and 1930s. Most people in industrial countries used to believe that their children would have a better future than their already pleasant present. Today this is no longer true." ...There's quite a bit more. I don't agree with everything he (Raghuram) says, but thought it might provoke discussion.
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Tuesday, September 5, 2017
Re: [socialist-econ] Raghuram Rajan: Populist Nationalism Is “the First Step Toward Crony Capitalism” [feedly]
Raghuram Rajan: Populist Nationalism Is “the First Step Toward Crony Capitalism” [feedly]
http://economistsview.typepad.com/economistsview/2017/08/raghuram-rajan-populist-nationalism-is-the-first-step-toward-crony-capitalism.html
Asher Schechter at ProMarket discusses Raghuram Rajan's views on the rise of populist nationalism:
Raghuram Rajan: Populist Nationalism Is "the First Step Toward Crony Capitalism": The wave of populist nationalism that has been sweeping through Western democracies in the past two years is "a cry for help from communities who have seen growth bypass them."
So said Raghuram Rajan, the former governor of the Reserve Bank of India, during a keynote address he gave at the Stigler Center's conference on the political economy of finance that took place in June.
Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating" impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community via exclusion.
In his talk, Rajan focused on three questions related to current populist discontent: 1. Why is anger focused on trade? 2. Why now? 3. Why do so many voters turn to far-right nationalist movements?
"Pointing fingers at these communities and telling them they don't understand is not the right answer," he warned. "In many ways, the kind of angst that we see in industrial countries today is similar to the bleak times [of] the 1920s and 1930s. Most people in industrial countries used to believe that their children would have a better future than their already pleasant present. Today this is no longer true." ...
There's quite a bit more. I don't agree with everything he (Raghuram) says, but thought it might provoke discussion.
-- via my feedly newsfeed
US private schools increasingly serve affluent families
Richard Murnane, Sean Reardon 31 August 2017
Family income inequality in the US has risen sharply in the last few decades (Stone et al. 2016). One of the consequences has been that affluent families increasingly live in different communities than lower-income families. Since most children attend a school close to their home, public schools are increasingly segregated by income (Owens 2016).
Rising inequality may also have led to increasing economic segregation between public and private schools. There is, however, surprisingly little information about whether this has happened. In recent research, we set out to learn whether this has occurred by examining trends in private school enrolments over the last 50 years (Murnane and Reardon 2017).
Over the last half century, the percentage of US elementary students who attend private schools has not changed much; it was 11% in 1970, and 9% in 2011. What has changed is the family income mix of private school students. In 1970, 17% of affluent students attended private schools and in 2011, 16% did so. But, among middle-class families, the enrolment rate dropped from 13% to 7%; among poor families, the rate has always been low. Figure 1 shows trends in private school enrolment rates for children from 20th, 50th, and 90th income percentile families.
Figure 1 Estimated private school enrolment rates by family income percentile
Source: US Census and Current Population Survey.
The role of Catholic elementary schools
The decline in Catholic school enrolments has contributed to the changing income mix of private school students. In 1970, 85% of elementary school students (those aged 5 to 11) in the US who were enrolled in a private school were attending a Catholic school. Low tuition fees and scholarships enabled these schools to serve a great many children from low- and middle-income families, as well as those from affluent families. Over the next 40 years, the number of Catholic elementary schools in the US declined 37%. By 2011, only 43% of private elementary school students attended Catholic schools.
Several factors contributed to this decline in Catholic school enrolments. Migration of middle-class families from cities to suburbs deprived urban Catholic schools of much of their historic clientele. Rising costs, spurred in part by the decline in religious vocations, resulted in large increases in Catholic school tuition fees, and a reduced ability to provide scholarships. Between 1970 and 2011, the average fee for tuition in Catholic elementary schools, expressed in 2015 dollars, increased from $873 to $5,858. This far outstripped the 23% increase in the median real income of families with school-aged children during this period. As a result, Catholic elementary schools increasingly serve students from relatively high-income families (see the left-hand panel of Figure 2).
Figure 2 Estimated elementary private school enrolment by family income percentile
Source: US Census, CPS, NHES, NELS88, ECLS.
Non-sectarian private schools
In contrast to the decline in Catholic school enrolments, the number of students attending non-sectarian private elementary schools has increased in recent decades, both in absolute terms and as a percentage of private school enrolments. In 2011, these schools served 17% of all children enrolled in private elementary schools, up from 10% in 1989. Measured in 2015 dollars, the average tuition in non-sectarian private elementary schools rose from $4,120 in 1979 to $22,611 in 2011. High and rising tuition fees help to explain why enrolment in non-sectarian elementary schools is increasingly concentrated among students from high-income families. This pattern is shown in the middle panel of Figure 2.
Non-Catholic religious schools
These schools have an increasing role in private school enrolments. In 2011, these schools enrolled 40% of students attending private elementary schools, up from 33% in 1989. As with other types of private schools, a higher percentage of children from affluent families attend non-Catholic religious elementary schools than do children from middle- or low-income families.
As the right-hand panel of Figure 2 shows, enrolment trends by family income in non-Catholic religious elementary schools are different. The percentages of children from low- and middle-income families attending non-Catholic religious elementary schools increased between 1987 and 2011, while the percentage from high-income families declined. These trends seem surprising, given that tuition fees in these schools have also increased rapidly, from an average of $3,896 in 1993 to $9,134 in 2011 (in 2015 dollars).
Regional differences help explain this surprising trend. These schools, especially the subset of them known as Conservative Christian schools, are disproportionately located in the South. In 2011, 40% of children enrolled in non-Catholic religious elementary schools, and 47% of those attending Conservative Christian schools, lived in the South. After Supreme Court decisions banning prayer in schools, many conservative Christians felt that public schools did not reflect their values (Cooper 1984). This led them to send their children to schools associated with their churches, despite the high financial cost of doing so.
Perceptions of quality
The perceived quality of the public schools with which private schools compete helps explain the patterns in private school enrolments. The increase in residential segregation by income, especially among families with school-aged children, is that urban public schools increasingly have low-income student populations (Owens 2016, Owens et al. 2016). Average mathematics and reading scores are much lower for students attending urban public schools than for those attending suburban public schools. Student discipline problems are more frequent. Throughout the 1980s and early 1990s (the only period for which we have consistently coded data), urban parents with children of school age rated their local public schools as lower quality than suburban parents did. For example, in 1992, 37% of urban parents gave their local schools a grade of A or B, while 50% of suburban parents did so (Phi Delta Kappa 1992).
This may explain why more than one-quarter of students from high-income families living in cities sent their children to private schools in 2013, about the same percentage as did so in 1968. In contrast, high-income families living in suburban communities were much more likely to send their children to public schools. In consequence, urban public schools and urban private schools have less socioeconomic diversity today than they had several decades ago (see Figure 3.)
Figure 3 Estimated elementary private school enrolment by family income percentile
Source: US Census and Current Population Survey.
The impact on economic mobility
In summary, the distribution of private elementary school enrolments in the US has changed markedly over the last 45 years. Non-Catholic religious elementary schools today serve more students whose family incomes are in the bottom half of the distribution than Catholic elementary schools do. There has been substantial increase in the percentage of students from high-income families who attend private non-sectarian private schools. Much less is known about these private schools than is known about Catholic schools, which historically were the dominant supplier of private school services in the US, and the subject of a great deal of research.
The trends we documented in this paper indicate an increasingly polarised pattern of school enrolment. US schools – both public and private – are increasingly segregated by income. High-income families increasingly live either in suburbs with expensive housing or enrol their children in private schools. The private schools their children attend are more likely to be expensive non-sectarian schools than was the case four decades ago. Meanwhile, low-income students remain disproportionately concentrated in high-poverty public schools, and even those low-income students in private schools are generally not in expensive, non-sectarian private schools.
Given how difficult it is to build and sustain high quality educational programs in schools serving high concentrations of children from low-income families (Duncan and Murnane 2014), the increasing income segregation of US schools is likely to strengthen the intergenerational transmission of economic inequality, and reduce the potential for upward economic mobility.
References
Cooper, B S (1984), "The changing demography of private schools: Trends and implications", Education and Urban Society 16(4): 429-442.
Duncan, G J and R J Murnane (2014), Restoring opportunity: The crisis of inequality and the challenge for American education, Cambridge, MA: Harvard Education Press and the Russell Sage Foundation.
Murnane, R J and S F Reardon (2017), "Long-term trends in private school enrollments by family income", NBER Working Paper No. 23571.
Owens, A (2016), "Inequality in children's contexts: Trends and correlations of economic segregation between school districts, 1990 to 2010", American Sociological Review 81(3): 549-574.
Owens, A, S F Reardon and C Jencks (2016), "Income segregation between schools and school districts", American Educational Research Journal 53(4): 1159-1197.
Phi Delta Kappa (1992), "Gallup/phi delta kappa poll # 1992-PDK92: 24th annual survey of the public's attitudes toward the public schools", Roper Center for Public Opinion Research, Cornell University.
Stone, C, D Trisi, A Sherman and E Horton (2016), A guide to statistics on historical trends in income inequality, Center on Budget and Policy Priorities.
Harpers Ferry, WV
Larry Summers: America needs its unions more than ever [feedly]
http://larrysummers.com/2017/09/03/america-needs-its-unions-more-than-ever/
September 4, 2017
The central issue in American politics is the economic security of the middle class and their sense of opportunity for their children. A pervasive sense of vulnerability and missing opportunity leads to dissatisfaction, reduces faith in government and institutions, diminishes willingness to support the least fortunate, increases resentment towards members of other ethnic groups and fuels truculence towards other nations.
As long as a substantial majority of American adults believe that their children will not live as well as they did our politics will remain bitter and divisive. Middle class anxiety is surely also fed by the slow growth of wages even in the ninth year of economic recovery with unemployment at historic low levels. The Phillips curve – the view that tighter labour markets spur an acceleration of wage growth – appears to have broken down. The Bureau of Labor Statistics just reported that average hourly earnings last month rose by all of 3 cents or little more than 0.1 per cent. For the last year, they rose by only 2.5 per cent. In contrast profits of the S&P 500 are rising at a 16 per cent annual rate.
What is going on? Economists do not have complete answers. In part there are inevitable fluctuations. Profits have declined in recent years. The wages that are reflected by the BLS are earned in the US, whereas a little less than half of profits are earned abroad and have become more valuable as the dollar has declined. In part, wages have not risen more because a strengthening labour market has drawn more people into the workforce.
But I suspect the most important factor explaining what is happening is that the bargaining power of employers has increased and that of workers has decreased. Bargaining power depends on alternative options. Technology has given employers more scope for replacing Americans with foreign workers, or with technology, or by drawing on the gig economy. So their leverage to hold down wages has increased.
On this Labor Day we would do well to remember that unions have long played a crucial role in the American economy in evening out the bargaining power between employers and employees. They win higher wages, better working conditions and more protection from unjust employer treatment for their members. More broadly they provide crucial support in the political process for broad measures such as Social Security and Medicare, which benefit members and non-members alike. Both were at their inception passionately opposed by major corporations.
What can be done? This is surely not the moment for policy to tilt further to strengthening the hand of large employers. Sooner or later labour law reform that gives organisers a chance by seriously punishing employers who engage in illegal reprisals should be back on the agenda. Union efforts to organise non-traditional groups in non-traditional ways need to be encouraged. And policy support needs to be given to institutions where workers have a chance to share in profits and in corporate governance.
In an era when the most valuable companies are the Apples and the Amazons rather than the General Motors and the General Electrics, the role of unions cannot go back to being what it was. But on this Labor Day any leader concerned with the American middle class needs to consider that the basic function of unions – balancing the power of employers and employees – is as important to our economy as it has ever been.
-- via my feedly newsfeed
Repeal of pay transparency rule will make it easier to discriminate against women and people of color [feedly]
http://www.epi.org/blog/repeal-of-pay-transparency-rule-will-make-it-easier-to-discriminate-against-women-and-people-of-color/
On Tuesday, the Trump administration announced a "review and immediate stay" of the EEO-1 pay data collection rule, which was an Obama-era rule issued by the Equal Employment Opportunity Commission (EEOC). The rule would have required large companies (with 100 or more employees) to confidentially report to the EEOC information about what they pay their employees by job category, sex, race, and ethnicity. Pay transparency is key in leveling the playing field in order to eliminate employer discrimination.
This move is just another example of how the Trump administration's campaign rhetoric on supporting working people has been followed by actions that hurt them at every turn. Further, this decision runs counter to what the research shows—inequities have gotten worse, not better. Even among workers with the same level of education and work experience, black-white wage gaps are larger today than nearly 40 years ago and gender pay disparities have remained essentially unchanged for at least 15 years. In both cases, discrimination has been shown to be a major factor in the persistence of those gaps.
As my colleague Marni von Wilpert notes, by staying the equal pay data rule, the Trump administration is making it harder for employers and federal agencies to identify pay disparities and root out employment discrimination—and it will make it more difficult for working people to know when they are being discriminated against. When this rule was first announced, former EEOC Chair Jenny R. Yang stated, "Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws." By staying this rule, the Trump administration has shown that it does not value equal pay for equal work.
-- via my feedly newsfeed
Monday, September 4, 2017
Enlighten Radio Podcasts:Podcast: The Labor Day Poetry Show -- 2017
Blog: Enlighten Radio Podcasts
Post: Podcast: The Labor Day Poetry Show -- 2017
Link: http://podcasts.enlightenradio.org/2017/09/podcast-labor-day-poetry-show-2017.html
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Sunday, September 3, 2017
UN Role in Reforming International Finance for Development [feedly]
http://triplecrisis.com/un-role-in-reforming-international-finance-for-development/
Jomo Kwame Sundaram
Growing global interdependence poses greater challenges to policy makers on a wide range of issues and for countries at all levels of development. Yet, the new mechanisms and arrangements put in place over the past four decades have not been adequate to the growing challenges of coherence and coordination of global economic policy making. Recent financial crises have exposed some such gaps and weaknesses.
Multilateral UN inclusive
Although sometimes seemingly slow, the United Nations (UN) has long had a clear advantage in driving legitimate discussion on reform because of its more inclusive and open governance. Lop-sided influence in the current international financial system is a principal reason why many countries lack confidence in existing arrangements. Rebuilding confidence in such arrangements will require that all parties feel they have a stake in the reform agenda.
But the UN is also suited to drive the discussion because of its long tradition of reliable work on international economic issues. The UN secretariat has developed and maintained a coherent and integrated approach to trade, finance and sustainable development, with due attention to equity and social justice issues.
The ongoing 'secular stagnation' has again highlighted the interdependence of global economic relations, exposing a series of myths and half-truths about the global economy. These include the idea that the developing world has become "decoupled" from the developed world; that unregulated financial markets and the new financial instruments had ushered in a new era of "great moderation" and "stability"; and that macroeconomic imbalances — due to decisions made in the household, corporate and financial sectors — were less dangerous than those involving the public sector.
UN Secretariat different, but competent
The UN secretariat has long doubted such arguments, and warned that any unravelling of global macroeconomic imbalances would be unruly. Also, persistent asymmetries and biases in global economic relations have particularly hit developing countries, both emerging markets and the least developed countries.
Not surprisingly, the UN Secretariat also drew attention to the close links between the financial crisis and the food and energy crises of recent years. A more integrated approach to handling these threats is needed, particularly to alleviate the downside risks for the poorest and most vulnerable communities.
The UN Secretariat has a strong track record of identifying systemic threats from unregulated finance, warning against a misplaced faith in self-regulating markets and offering viable solutions to gaps and weaknesses in the international financial system. Special drawing rights (SDRs), the 0.7 per cent aid target and debt relief, for example, were all conceived within the UN system during the 1960s and 1970s.
From the 1980s, the UN secretariat – both in New York and Geneva — has consistently warned against the excessive conditionalities attached to multilateral lending, promoted the idea of rules for sovereign debt restructuring, and cautioned that the international financial institutions were moving away from their traditional mandates of guaranteeing financial stability and providing long-term development finance.
UN has more than earned leadership role
During the 1990s, UN agencies warned against the dangers to economic stability, particularly in developing countries, from volatile private capital flows and the speculative behaviour associated with unregulated financial markets. The UN was among the very few warning Mexico in 1994, the East Asian countries in 1997 and the world in 2008 that excessive liberalization threatened crisis. The UN system was also almost alone among international institutions to identify growing inequality as a threat to economic, political and social stability, and insisted early on measures for a fairer globalisation.
Many of these concerns culminated in the 2002 Financing for Development Conference in Monterrey, Mexico. More recently, the UN has insisted on the importance of policy space for effective development strategies and particularly on the need for macroeconomic policies to support long-term growth, technological upgrading and diversification.
The combination of a strong track record and a core secretariat steeped in its tradition of an integrated multilateral approach to policy-oriented research places the UN in the best position to advance discussions to reform the international financial architecture if given the chance to do so.
-- via my feedly newsfeed