Links for 08-21-17

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Links for 08-21-17 // Economist's View
http://economistsview.typepad.com/economistsview/2017/08/links-for-08-21-17.html

Evidence of a Toxic Environment for Women in Economics - NYTimes A public plea to my male senior colleagues in economics – Jeffrey R. BrownA better centrism - Stumbling and Mumbling GSEs' Conservatorships: Not a Time to Celebrate - Cecchetti & Schoenholtz 'Metrics Monday: Regression and Causality for Dummies - Marc Bellemare Brexit remains an exercise in deception - mainly macro Debts and Disasters - American Economic Association The new spring of artificial intelligence: A few early economics - VoxEU The Political Failure of Trickle-Down Economics - Paul Krugman Ahem! Stanley Fischer for the Fed? - Economic Principals The impact of demographics on long-term discount rates - VoxEU On zero-sum thinking - Stumbling and Mumbling The Low Misery Dilemma - Carola Binder Whither Trumpism? - Paul Krugman Blockchain: New Frontiers - Tim Taylor Japan and the burden of government debt - mainly macro
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Graham-Cassidy: Maybe the worst Republican health proposal yet

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Graham-Cassidy: Maybe the worst Republican health proposal yet // Economic Policy Institute Blog
http://www.epi.org/blog/graham-cassidy-maybe-the-worst-republican-health-proposal-yet/

The first plan the House of Representatives put forward to repeal the Affordable Cart Act (ACA) was the American Health Care Act (AHCA). The Congressional Budget Office projected that the AHCA would cost 24 million Americans their health insurance coverage by 2026. An amended version, which passed the House, cut this number to 23 million. Besides inflicting these coverage losses, the AHCA would have cost jobs and increased out-of-pocket costs faced by Americans.

The second plan, the Better Care Reconciliation Act (BCRA) failed narrowly in the Senate. The CBO projected that the BCRA would have cost 22 million Americans their coverage by 2026. On one hand, it may have seemed like progress of some kind to reduce the number thrown off the insurance rolls relative to the AHCA, but the BCRA back-loaded severe cuts to Medicaid beyond the budget window that CBO traditionally examines. This means that in the longer run, the BCRA would have been even more destructive to health security than the House-passed plan. Additionally, unlike the AHCA, the BCRA cut not just the expansions to Medicaid passed under the ACA, but cut deeply into traditional, pre-ACA Medicaid, shifting the burden of paying for health care onto states and/or poor households.

Think of the latest Republican entry, known as Graham-Cassidy, as the BCRA on steroids. After the CBO budget window passes, Graham-Cassidy is not a "repeal-and-replace the ACA" plan. It's not even a straight "ACA repeal" plan. Instead, it's a plan that repeals the ACA and cuts Medicaid over and on top of that. It's, in short, an attempt to rollback not just the ACA, but even the coverage provided by the pre-ACA American health care system.

Just to remind everybody, this pre-ACA coverage system was unraveling at a rapid rate, with roughly 15 million workers losing employer-based coverage between 2000 and 2010.

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Interview with the always cogent Larry Summers

http://marginalrevolution.com/marginalrevolution/2017/09/conversation-larry-summers.html

Out of Africa

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Out of Africa // TripleCrisis
http://triplecrisis.com/out-of-africa/

Jomo Kwame Sundaram and Anis Chowdhury

Not a single month has passed without dreadful disasters triggering desperate migrants to seek refuge in Europe. According to the International Organization for Migration (IOM), at least 2,247 people have died or are missing after trying to enter Europe via Spain, Italy or Greece in the first half of this year. Last year, 5,096 deaths were recorded.

The majority – including 'economic migrants', victims of 'people smugglers', and so on – were young Africans aged between 17 and 25. The former head of the British mission in Benghazi (Libya) claimed in April that as many as a million more were already on their way to Libya, and then Europe, from across Africa.

Why flee Africa?

Why are so many young Africans trying to leave the continent of their birth? Why are they risking their lives to flee Africa?

Part of the answer lies in the failure of earlier economic policies of liberalization and privatization, typically introduced as part of the structural adjustment programmes (SAPs) that many countries in Africa were subjected to from the 1980s and onwards. The World Bank, the African Development Bank and most Western donors supported the SAPs, despite United Nations' warnings about their adverse social consequences.

SAP advocates promised that private investment and exports would soon follow, bringing growth and prosperity. Now, a few representatives from the Washington-based Bretton Woods institutions admit that 'neoliberalism' was 'oversold', condemning the 1980s and 1990s to become 'lost decades'.

While SAPs were officially abandoned in the late 1990s, their replacements were little better. The Poverty Reduction Strategy Papers (PRSPs) of the World Bank and IMF promised to reduce poverty with some modified policy conditionalities and prescriptions.

Meanwhile, the G8 countries reneged on their 2005 Gleneagles pledge to provide an extra US$25 billion a year for Africa as part of a US$50 billion increase in financial assistance to "make poverty history".

Poor Africa

Thanks to the SAPs, PRSPs and complementary policies, Africa became the only continent to see a massive increase in poverty by the end of the 20th century and during the 15 years of the Millennium Development Goals. Nearly half the continent's population now lives in poverty.

According to the World Bank's Poverty in Rising Africa, the number of Africans in extreme poverty increased by more than 100 million between 1990 and 2012 to about 330 million. It projects that "the world's extreme poor will be increasingly concentrated in Africa".

The continent has also been experiencing rising economic inequality, with higher inequality than in the rest of the developing world, even overtaking Latin America. National Gini coefficients – the most common measure of inequality – average around 0.45 for the continent, rising above 0.60 in some countries, and increasing in recent years.

While the continent is experiencing a 'youth bulge', with more young people (aged 15-24) in its population, it has failed to generate sufficient decent jobs. South Africa, the most developed economy in Sub-Saharan Africa (SSA), has a youth unemployment rate of 54%.

The real situation could be even worse. Discouraged youth, unable to find decent jobs, drop out of the labour force, and consequently, are simply not counted.

Surviving in Africa

Most poor people simply cannot afford to remain unemployed in the absence of a decent social protection system. To survive, they have to accept whatever is available. Hence, Africa's 'working poor' and underemployment ratios are much higher. In Ghana, for example, the official unemployment rate is 5.2%, while the underemployment rate is 47.0%!

Annual growth rates have often exceeded 5% in many African countries in the new century. SAP and PRSP advocates were quick to claim credit for the end of Africa's 'lost quarter century', arguing that their harsh policy prescriptions were finally bearing fruit. After the commodity price collapse since 2014, the proponents have gone quiet.

With trade liberalization and consequently, greater specialization, many African countries are now even more dependent on fewer export commodities. The top five exports of SSA are all non-renewable natural resources, accounting for 60% of exports in 2013.

The linkages of extractive activities with the rest of national economies are now lower than ever. Thus, despite impressive economic growth rates, the nature of structural change in many African economies have made them more vulnerable to external shocks.

False start again?

Africa possesses about half the uncultivated arable land in the world. Sixty percent of SSA's population work in jobs related to agriculture. However, agricultural productivity has mostly remained stagnant since 1980.

With agriculture stagnant, people moved from rural to urban areas, only to find life little improved. Thus, Africa has been experiencing rapid urbanization and slum growth. According to UN Habitat, 60% of SSA's urban population live in slums, with poor access to basic services, let alone new technologies.

Powerful outside interests, including the BWIs and donors, have been advocating large farm production, claiming it to be the only way to boost productivity. Several governments have already leased out land to international agribusiness, often displacing settled local communities.

Meanwhile, Africa's share of global manufacturing has fallen from about 3% in 1970 to less than 2% in 2013. Manufacturing's share of total African GDP has decreased from 16% in 1974 to around 13% in 2013. At around a tenth, manufacturing's share of SSA's output in 2013 is much lower than in other developing regions. Unsurprisingly, Africa has deindustrialized over the past four decades!

One cannot help but doubt how the G20's new 'compact with Africa', showcased at Hamburg, can combat poverty and climate change effects, in addition to deterring the exodus out of Africa, without fundamental policy changes.

Originally published by Inter Press Service.

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A few links: Cassidy-Graham just-as-bad-as-the-rest health care bill, and more re last week’s Census data

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A few links: Cassidy-Graham just-as-bad-as-the-rest health care bill, and more re last week's Census data // Jared Bernstein | On the Economy
http://jaredbernsteinblog.com/a-few-links-cassidy-graham-just-as-bad-as-the-rest-health-care-bill-and-more-re-last-weeks-census-data/

My CBPP colleagues have been churning out scads of analysis of the Cassidy-Graham last-ditch attempt to repeal and replace the ACA. Here's CBPP's main bullet points with color commentary from yours truly.

Second, while I justly touted last week's good news from the Census of median incomes, poverty, and health coverage, it's very important to put the last few years within their historical context. I do so here.


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OSHA's Claims About Hiding Information on Worker Deaths Fall Flat [feedly]

OSHA's Claims About Hiding Information on Worker Deaths Fall Flat
https://aflcio.org/2017/9/15/oshas-claims-about-hiding-information-worker-deaths-fall-flat

OSHA's Claims About Hiding Information on Worker Deaths Fall Flat

Since January, government agencies under the Donald Trump administration have taken steps to hide information from the public--information that was previously posted and information that the public has a right to know. 

But a recent move is especially personal. Two weeks ago, the agency responsible for enforcing workplace safety and health—the Occupational Safety and Health Administration—removed the names of fallen workers from its home page and has stopped posting information about their deaths on its data page. In an attempt to justify this, the agency made two major claims discussed below. Like many efforts to decrease transparency by this administration, these claims are unfounded, and the agency whose mission is to protect workers from health and safety hazards is clearly in denial that it has a job to do. Here's how:

OSHA claim #1: Not all worker deaths listed on the agency website were work-related because OSHA hasn't issued or yet issued a citation for their deaths.

Fact: It is public knowledge that 1) OSHA doesn't have the jurisdiction to investigate about two-thirds of work-related deaths but does issue guidance on a wide variety of hazards to workers that extend beyond their enforcement reach, and 2) OSHA citations are not always issued for work-related deaths because of a variety of reasons, including limitations of existing OSHA standards and a settlement process that allows employers to remedy certain hazards in lieu of citation. (The laborious process for OSHA to develop standards deserves a completely separate post.) But neither of those points mean the agency cannot recognize where and when workers are dying on the job, and remember and honor those who sought a paycheck but, instead, did not return home to their families.

In fact, the federal Bureau of Labor Statistics, also housed in the Department of Labor, counts and reports the number of work-related deaths each year. The agency reported that in 2015, 4,836 working people died of work-related traumatic injury—"the highest annual figure since 2008." So, another agency already has taken care of that for OSHA (whew!). But this is just a statistic. Luckily for OSHA, employers are required to report every fatality on the job to OSHA within eight hours, so the agency has more specific information that can be used for prevention, including the names of the workers and companies involved, similar to the information the public has about deaths that occur in any other setting (outside of work).

OSHA claim #2: Deceased workers' families do not want the names and circumstances surrounding their loved ones' death shared.

Fact: Removing the names of fallen workers on the job is an incredible insult to working families. The shock of hearing that your family member won't be coming home from work that day is devastating enough, but then to hear that their death was preventable, and often the hazards were simply ignored by their employer, is pure torture. The organization made up of family members who had a loved one die on the job has stated repeatedly that it wants the names of their loved ones and information surrounding their deaths shared. It does not want other families to suffer because of something that could have been prevented. The organization has made it very clear that it opposes OSHA's new "out of sight, out of mind" approach.

So why shield this information from the public? We know the Chamber of Commerce and other business groups have long opposed publication of this information. The Trump administration seems to live by very old—and very bad—advice from powerful, big business groups whose agenda it's pushing: If we don't count the impact of the problem or admit there is a problem, it must not exist.

Find out more.

Kenneth Quinnell Fri, 09/15/2017 - 08:41

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Jack Metzgar: Equal Opportunity Is Not Enough [feedly]

Equal Opportunity Is Not Enough
https://workingclassstudies.wordpress.com/2017/09/18/equal-opportunity-is-not-enough/

We middle-class professionals are a crafty bunch, especially our intellectual elite.  One of our cagiest moves recently involves our expressions of concern about increasing income and wealth inequality in the U.S.  While eloquently expressing how guilty we feel about our privilege, we never come close to suggesting that some money be moved around.  "Redistribution" is either not in our vocabulary or "something we need to discuss," which is our standard way of ending discussion by putting it off to an indefinite future.  But our craftiest move is how we routinely slip and slide in our discussion of the inequality of money (which is what income and wealth are) into ways to improve equality of opportunity.

Richard Reeves's Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It is a reductio ad absurdum of this crafty slip sliding, but Reeves makes two important contributions.  First, he widens the target from the top 1% to the top 20% of households.  Second, he inadvertently demonstrates the absurdity of applying equality of opportunity to income classes and of understanding social mobility as simply about equalizing opportunities to be in that top 20%.  Worse, though a generous soul gently tweaking our class privilege, Reeves ends up recommending that the primary solution to equalizing opportunities is for our class to improve "human capital development" in the working class, including "home visiting to improve parenting"!

As misguided as I think Reeves is, Dream Hoarders is well worth reading because he pulls together a lot of recent research on how professional-middle-class privilege is being passed on across generations to such a degree that the U.S. has become an "hereditary meritocracy."  In doing so, he shifts the focus from merely the top 1% of households whose average income tops $1.6 million to a much larger group ranging down to $121,000 a year (in 2016).  This is the top 25 million households, whom he rightly says are "the single most dangerous constituency to anger" because we are "wealthy enough to have influence, and numerous enough to be a significant voting bloc."  While often humorously chiding his own behavior, he shows the wide range of ways middle-class professionals use our social and cultural capital to improve the chances of our children and grandchildren ending up in that top 20%.

He argues convincingly that that's not fair and proposes a number of remedies that would make things somewhat more fair, such as eliminating legacy admissions to universities, forbidding unpaid internships, curbing exclusionary zoning, and rejiggering federal loans to make them more affordable for low- and middle-income college students.

But he is very chary when it comes to moving money around.  He wants to greatly improve K-through-12 public education, for example, but rules out spending a lot more money or reducing class sizes.  He even has a great little section on how federal income tax subsidies disproportionately benefit the top 20%, but concludes: "My point is not that we should tax our way to more income equality" but merely to illustrate "the fact that if we need additional resources for public investment, it is reasonable to raise some of them from the upper middle class."  Note the weasel language here: the "if" leaves him uncertain about whether we actually need more money for public investment (as our roads and bridges crumble and our water systems sometimes poison children), but if we do, only "some" of it need come from the top 20%.  Reeves thinks he knows what will most piss off "the single most dangerous" voting bloc, and he tippy-toes around it.

Having excluded progressive tax reform and knowing that checking a whole series of class privileges like eliminating legacy admissions would not make much difference, Reeves has nowhere to go but to reform the working class's "human capital formation."  He seems to have no idea how fraught with conflict this has been in American working-class history.  From the Pullman Palace Car Company's paternalistic rules for living in its company town to the Ford Motor Company's infamous Sociology Department, workers have fiercely resented and resisted all attempts from people in authority who think they know how to make them better human beings.  If you want to convert the rest of the working class, including people of all colors, into Trump voters, systematic government "home visiting to improve parenting" among the bottom 80% is probably the way to do it.

It's not that it couldn't be helpful to have more parents reading to young children, more use of time-outs rather than spanking for discipline, or more parental involvement in schooling among working-class families. The problem is that the people doing the home visits would likely deliver a program that implicitly says the goal of life is to score well on written exams, go to college, and become one of those professional or managerial phonies so many working-class parents spend a lifetime trying to avoid or resist.  It may be hard to believe – and that's a big part of the problem! – but many (probably most) folks  don't want to be people like us, no matter how much they might envy our incomes and working conditions.

And this is Reeves's biggest, but illustrative mistake.  He is trapped in an equal-opportunity frame that is perfectly applicable for blacks, women, and other groups who have been and still are being denied equal opportunities in education and jobs, in where they live, or who they love.  But to apply that framework to income classes, as Reeves quite rigorously does, doesn't and can't work.  His singular goal is to equalize people's life chances to be in the top 20% of income-earners while, as his subtitle highlights, "leaving everyone else in the dust."  He is quite clear in explaining that this is how relative social mobility works across income quintiles: upward mobility for those born in the bottom four quintiles requires an equal amount of downward mobility for those born in the top quintile.  This is a worthy goal for those who aspire to a genuine meritocracy where pay is related to performance, but it will not and cannot do anything to reduce our outrageous and still increasing levels of income and wealth inequality – which, by the way, are reducing most people's life chances day by day and year by year.

Absolute social mobility, on the other hand, is and always has been the more widely shared American Dream.  Sometimes referred to with the metaphor "a rising tide lifts all boats," that's but one way to achieve it.  Absolute mobility simply means getting ahead of where you were before, not necessarily getting ahead of others as you do so.  It means that the next generation will have a better life than their parents had – with more income and more free time for what you will.  Stronger economic growth as a "rising tide" can make that more likely, but only if it is shared across all income classes, which it was for the three decades after World War II, but hasn't been for the last 30 or 40 years.

To achieve shared prosperity, we need to move some money around, starting with a more equitable tax system.  Taxing investment income the same as income you work for, collecting sales taxes on the purchase of stocks and bonds just as we do when people buy pants and soda pop, and taxing financial assets as well as property would simply be more fair.   But less class-biased taxes like these would also raise hundreds of billions of dollars to improve public schools and our rotting physical infrastructure and to fund increases in public subsidies for day care, family leave, public transportation, and many other public goods that would reduce daily living expenses – all of which would benefit all income classes, while disproportionately benefiting the lower income quintiles.  Reeves's upper-middle class would get nicked a bit with these tax changes, but most of those hundreds of billions would come from the top 1% or 2% — because that's where most of the money is.

A class-neutral tax system would be a significant move toward the kind of "equality of condition" Alexis de Tocqueville once thought was what made America exceptional.  And I'm betting that a majority of "the single most dangerous voting bloc" would sooner give up a few thousand dollars a year in taxes than the formidable array of privileges which Reeves so clearly shows help keep us and our progeny in our place.

Jack Metzgar

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