robertogreco + deficits   5

The Wrongest Profession | Dean Baker
[via: https://economicsociology.org/2018/07/21/bb-populism-rostows-economics-and-vietnam-war-informal-economy-grows-universities-privatization-failures-deficit-hawks-deceive-you-inequality-one-sided-economists/ ]

"How economists have botched the promise of widely distributed prosperity—and why they have no intention of stopping now"



"OVER THE PAST TWO DECADES, the economics profession has compiled an impressive track record of getting almost all the big calls wrong. In the mid-1990s, all the great minds in the field agreed that the unemployment rate could not fall much below 6 percent without triggering spiraling inflation. It turns out that the unemployment rate could fall to 4 percent as a year-round average in 2000, with no visible uptick in the inflation rate.

As the stock bubble that drove the late 1990s boom was already collapsing, leading lights in Washington were debating whether we risked paying off the national debt too quickly. The recession following the collapse of the stock bubble took care of this problem, as the gigantic projected surpluses quickly turned to deficits. The labor market pain from the collapse of this bubble was both unpredicted and largely overlooked, even in retrospect. While the recession officially ended in November 2001, we didn’t start creating jobs again until the fall of 2003. And we didn’t get back the jobs we lost in the downturn until January 2005. At the time, it was the longest period without net job creation since the Great Depression.

When the labor market did finally begin to recover, it was on the back of the housing bubble. Even though the evidence of a bubble in the housing sector was plainly visible, as were the junk loans that fueled it, folks like me who warned of an impending housing collapse were laughed at for not appreciating the wonders of modern finance. After the bubble burst and the financial crisis shook the banking system to its foundations, the great minds of the profession were near unanimous in predicting a robust recovery. Stimulus was at best an accelerant for the impatient, most mainstream economists agreed—not an essential ingredient of a lasting recovery.

While the banks got all manner of subsidies in the form of loans and guarantees at below-market interest rates, all in the name of avoiding a second Great Depression, underwater homeowners were treated no better than the workers waiting for a labor market recovery. The Obama administration felt it was important for homeowners, unlike the bankers, to suffer the consequences of their actions. In fact, white-collar criminals got a holiday in honor of the financial crisis; on the watch of the Obama Justice Department, only a piddling number of bankers would face prosecution for criminal actions connected with the bubble.

There was a similar story outside the United States, as the International Monetary Fund, along with the European Central Bank and the European Union, imposed austerity when stimulus was clearly needed. As a result, southern Europe is still far from recovery. Even after another decade on their current course, many southern European countries will fall short of their 2007 levels of income. The situation looks even worse for the bottom half of the income distribution in Greece, Spain, and Portugal.

Even the great progress for the world’s poor touted in the famous “elephant graph” turns out to be largely illusory. If China is removed from the sample, the performance of the rest of the developing world since 1988 looks rather mediocre. While the pain of working people in wealthy countries is acute, they are not alone. Outside of China, people in the developing world have little to show for the economic growth of the last three and a half decades. As for China itself, the gains of its huge population are real, but the country certainly did not follow Washington’s model of deficit-slashing, bubble-driven policies for developing countries.

In this economic climate, it’s not surprising that a racist, xenophobic, misogynist demagogue like Donald Trump could succeed in politics, as right-wing populists have throughout the wealthy world. While his platform may be incoherent, Trump at least promised the return of good-paying jobs. Insofar as Clinton and other Democrats offered an agenda for economic progress for American workers, hardly anyone heard it. And to those who did, it sounded like more of the same."



"At this point, the deficit hawks typically start raising apocalyptic fears about higher taxes impoverishing our children. I have three responses to this claim.

The first is that we are all paying much higher Social Security and Medicare taxes than our parents and grandparents did. Are we therefore the victims of generational inequity? What’s more, the main reason Social Security costs are rising is that our kids will live longer lives than we will. In other words, the dire specter of a generously subsidized cohort of older Americans is actually a sign of widespread social progress. (High Medicare costs are due to an incredibly inefficient health care system, but that’s another story—one that deficit hawks are also in the midst of monkey-wrenching in order to delegitimize any state-supported solution.)

My second reply is that we should be worried about after-tax income, not the tax rate. Recall that austerity policies favored by deficit hawks may have already cost us the equivalent of an increase in the payroll tax of 14 percentage points. We’re supposed to get hysterical over the prospect that our kids may pay 2 to 3 more percentage points in payroll taxes, but be unconcerned about this huge and needless loss of before-tax income?

More generally, if we manage to reverse the wage stagnation of the past thirty-plus years and see ordinary workers once more take a share of the gains of economic growth, their before-tax pay will be 40 to 50 percent higher in three decades than it is today. If they have to give back some of these gains in higher payroll taxes in order to support a longer retirement, it’s hard to see just what the problem would be. (The bigger question, of course, is whether we can succeed in creating a political economy in which ordinary workers will once again share in generalized economic growth.) And taxes are just one way in which the government imposes costs on citizens. Donald Trump wants to have a massive infrastructure program financed by the creation of toll roads. These tolls will be paid to private companies and will not count as taxes. Feel better?

On a much larger scale, the government grants patent and copyright monopolies as an incentive for research and creative work. In the case of prescription drugs alone, these patent monopolies cost close to $350 billion a year (approximately 1.9 percent of GDP) over what the price of drugs would be in a truly free market. Even as deficit hawks try to convince us that the government can’t afford to borrow another $50 billion a year to finance the research done by the pharmaceutical industry, they tell us not to worry about the extra $350 billion we pay for drugs because of government-granted patent monopolies. This monomaniacal obsession with tax burdens, to the exclusion of any reckoning with the burden of patent monopolies, shows yet again that the deficit hawks’ oft-professed concern for our children’s well-being is purely rhetorical, and in no way serious.

We should remember that we will pass down a whole society to our kids—including the natural environment that underwrites the quality of life of future generations. If the cost of ensuring that large numbers of children do not grow up in poverty and that the planet is not destroyed by global warming is a somewhat higher current or future tax burden, that hardly seems like a bad deal—especially if the burden is apportioned fairly. Now suppose, by contrast, that we hand our kids a country in which large segments of the population are unhealthy and uneducated and the environment has been devastated by global warming, but we have managed to pay off the national debt. That is, after all, the future that many in the mainstream of the economics profession are prescribing for the country. Somehow, I don’t see future generations thanking us."
economics  economists  us  policy  politics  deanbaker  health  healthcare  deficits  government  governance  gdp  priorities  labor  markets  capitalism  socialsecurity  bubbles  greatrecession  2018  china  portugal  spain  españa  greece  eu  paulryan  timothygeitner  donaldtrump  taxes 
july 2018 by robertogreco
Jonathan Mooney: "The Gift: LD/ADHD Reframed" - YouTube
"The University of Oregon Accessible Education Center and AccessABILITY Student Union present renowned speaker, neuro-diversity activist and author Jonathan Mooney.

Mooney vividly, humorously and passionately brings to life the world of neuro-diversity: the research behind it, the people who live in it and the lessons it has for all of us who care about the future of education. Jonathan explains the latest theories and provides concrete examples of how to prepare students and implement frameworks that best support their academic and professional pursuits. He blends research and human interest stories with concrete tips that parents, students, teachers and administrators can follow to transform learning environments and create a world that truly celebrates cognitive diversity."
neurodiversity  2012  jonathanmooney  adhd  cognition  cognitivediversity  sfsh  accessibility  learning  education  differences  howwelearn  disability  difference  specialeducation  highered  highereducation  dyslexia  droputs  literacy  intelligence  motivation  behavior  compliance  stillness  norms  shame  brain  success  reading  multiliteracies  genius  smartness  eq  emotions  relationships  tracking  maryannewolf  intrinsicmotivation  extrinsicmotivation  punishment  rewards  psychology  work  labor  kids  children  schools  agency  brokenness  fixingpeople  unschooling  deschooling  strengths  strengths-basedoutlook  assets  deficits  identity  learningdisabilities  schooling  generalists  specialists  howardgardner  howweteach  teams  technology  support  networks  inclusivity  diversity  accommodations  normal  average  standardization  standards  dsm  disabilities  bodies  body 
november 2017 by robertogreco
The Tipping Point | Coffee Party
"Years from now, we will think of February 2011 as the tipping point in America’s great awakening. After all the warnings and wake-up calls, this be will remembered as the time when the American people decided to come together, confront the plutocracy that plagues our republic, and do something to change the economic inequality / instability that has grown from it. There is a tide. If you don't yet feel it, here are Ten Wake Up Calls that we predict will help define February 2011 in America.  The more people who get involved, the more meaningful it will be.  So, please share this page with others who may still need a reason to wake up and stand up."

1 Egypt; 2 Bob Herbert's Challenge To America; 3 The Protest & the Prank Call in Wisconsin; 4 Johann Hari's article in The Nation; 5 It's the Inequality, Stupid; 6 The Great American Rip-off; 7 BP makes US sick; 8 House of Representatives run amok; 9 The Stiglitz Deficit-reduction Plan; 10 Tax Week, April 11 to 17, 2011."
2011  tippingpoint  us  politics  policy  plutocracy  change  gamechanging  egypt  bobherbert  matttaibbi  bp  corporations  corporatism  capitalism  corruption  campaignfinance  josephstiglitz  johannhari  inequality  disparity  incomegap  taxes  crisis  banking  finance  government  bailouts  foreclosures  unions  unionbusting  wisconsin  deficits  deficitreduction  teaparty  coffeeparty  kochbrothers  havesandhavenots  money  wealth  influence  power  from delicious
february 2011 by robertogreco
Op-Ed Contributor - Four Deformations of the Apocalypse - NYTimes.com
"The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing — as suggested by last week’s news that the national economy grew at an anemic annual rate of 2.4 percent in the second quarter. Under these circumstances, it’s a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach — balanced budgets, sound money and financial discipline — is needed more than ever."
economics  policy  georgewbush  taxes  reagan  reaganomics  republicans  deficits  balancedbudets  budget  2010  money  finance  debt  nationaldebt  texcuts  disparity  wealth  us  government  davidstockman 
august 2010 by robertogreco
Is Italy Too Italian?: From Taxis to Textiles, Italy Chooses Tradition Over Growth - NYTimes.com ["Roughly one-quarter of Italy’s G.D.P. is off the books."]
"Economists...see a country w/ a service sector dominated by guilds..., a timid entrepreneur class...a political system in thrall of older voters who want to keep what they have, even if it dooms the nation to years of stasis.

They see a society whose best & brightest are leaving & not being replaced by immigrants, because Italy has so little upward mobility to offer.

To Professor Giavazzi, the future here doesn’t look like Greece. It looks like Argentina.

“Before World War II, Argentina was rich. Even in 1960, the country was twice as rich as Italy.” Today...you can compare the per capita income of Argentina to that of Romania. “Because it didn’t grow. A country could get rich in 1900 just by producing corn & meat, but that is not true today. But it took them 100 years to realize they were becoming poor. & that is what worries me about Italy. We’re not going to starve next week. We are just going to decline, slowly, slowly, & I’m not sure what will turn that around.”
italy  argentina  guilds  economics  growth  politics  aging  age  policy  immigration  2010  stagnation  markets  china  globalization  local  slow  manufacturing  crisis  deficits  savings  society  decline  blackmarkets  offthebooks  protectionism  jobs  craftsmanship 
august 2010 by robertogreco

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