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SCEPA joined with the Economic Policy Institute on Capitol Hill to brief congressional staff and policy experts on tax expenditures, or incentives given through the tax code without scrutiny by Congress.
SCEPA economists are working on the prospects for a more progressive economic order to emerge from the shock of the recession. They have published papers and documents that place current events in a longer-term context as well as policy proposals to deal with short-term concerns. They are also documenting the emerging discussion of how the discipline of economics is reacting to the Great Recession and the questioning of conventional economic analysis.
Lance Taylor, a SCEPA Faculty Fellow, presents an overview of his new book, Maynard’s Revenge, in a Google Tech Talk.
The book, published this November by Harvard University Press, is a timely analysis of mainstream macroeconomics, posing the need for a more useful and realistic economic analysis that can provide a better understanding of the ongoing global financial and economic crisis.
The government spends $143 billion through tax breaks in an effort to expand pension coverage and security. Yet, over half of the American workforce does not have a pension. Retirement insecurity hurts business plans, workers’ lives and retiree well-being. Reform is needed.
SCEPA’s Guaranteeing Retirement Income Project, sponsored by the Rockefeller Foundation and in collaboration with Demos and the Economic Policy Institute, has a plan to guarantee safe and secure retirement income for all Americans.
- Published on Friday, August 03, 2012
by Rick McGahey, SCEPA Faculty Fellow
This morning's release of July's employment report breaks with the downward employment trend of the past three months. New jobs rose by 163,000, with private sector employment up by 172,000. The unemployment rate ticked up slightly, from 8.2 to 8.3 percent. The 163,000 figure for July's job growth is more than twice the monthly average for the second quarter, which was a dreadful 75,000 per month.
But we still have a very weak economy, and although July's job number is good news, it is no panacea. If we have this level of job growth for the next two months prior to the presidential election, it will barely move the unemployment rate—using the Atlanta Fed's jobs calculator suggests this level of job growth would only bring the unemployment rate down to around 8.1 percent in two months. An entire year of monthly job growth at this rate would only get unemployment down to 7.7 percent.
Today's report also needs to be viewed against other negative factors. Real GDP growth in the second quarter slowed to 1.5 percent. Some analysts believe that at least 2.5 percent growth is necessary to keep the unemployment level from rising. If economic growth doesn't speed up, we could see a worsening employment situation.
Congressional action on jobs has long been blocked by Republicans eager to see economic stagnation, believing it will enhance their electoral prospects in November. And due to the Tea Party's growing power over the Republicans, Congress is currently so dysfunctional that they've gone home to campaign without enacting any annual appropriations bills, adopting a popular farm bill, renewing protections for women against domestic violence, or passing legislation endorsed by the Pentagon and other security experts against "cyberterrorism". If the pork-laden farm bill, a favorite of legislators from both parties, cannot pass, there is no prospect of sensible economic action prior to the election.
That leaves the central banks, but both in Europe and the United States, they are staying on the sidelines. Mario Draghi, the head of the European Central Bank (ECB) said recently that they would do "whatever it takes" to save the Euro, and then the ECB did nothing, driving European markets into a frenzy.
In the U.S., the Fed is not taking further action, even though Vice Chairwoman Janet Yellin is calling for action to "insure against adverse shocks" that could set off a "self-reinforcing spiral of downward weakness."
So today's employment report could have been worse. But it isn't very good, and it is hard to see how employment gets much better prior to the November election. President Obama will have to hope that Mitt Romney keeps refusing to release his tax returns—Obama won't be able to campaign on very much good economic news.
- Published on Wednesday, August 01, 2012
The August 4, 2012 edition of the Indian magazine Economic & Political Weekly features a column by SCEPA Faculty Fellow Sanjay Reddy, "Hamlet Without the Prince: Politics and the Eurozone," about "political requirements of a successful fiscal and economic system." In his piece, he argues that the current Eurozone crisis was not just the result of "misguided technical arrangements and unanticipated economic shocks," but also "the 'democratic deficit' in the relation between the eurozone economic institutions and European society." Sanjay Reddy writes that the creation of the European Central Bank was "institutional substition" for European nations with weaker central banks to be more like the German Bundesbank. "At the broadest level, the lesson is that institutional substitution cannot by itself provide a long-term solution to problems which are manifested in weak pre-existing institutions. Only a political and social project aiming to change the conditions which made those institutions weak in the first place can ultimately succeed at creating institutions which do not suffer their deficiencies."
He concludes by saying that the solution to the Eurozone crisis does not lie in punitive measures such as current austerity policies. "A lasting solution to the eurozone's ills must be politically legitimate in order to be economically adequate. Attempting to address the economic problems of the eurozone without recognising the political requirements of a successful solution is like trying to stage a performance of Hamlet without the Prince."
- Published on Tuesday, July 31, 2012
On July 27, 2012, SCEPA Director Teresa Ghilarducci joined American Public Media's Marketplace in a segment titled, "The 401(k) System Doesn't Work." She describes how our current, individual-based voluntary system for retirement doesn't work "because it expects individuals to know when when they will lose their job, get sick, get divorced, lose a spouse and eventually die."
She points out that "the coming retirement income security crisis was not caused by a set of isolated individual behaviors; the system was simply never realistic." Ghilarducci says that the solution to the problem lies in "government-mandated, guaranteed retirement accounts on top of Social Security," a proposal described by SCEPA's Guaranteed Retirement Accounts (GRA) plan.
Ghilarducci's comments on Marketplace are based on a July 21 column in the New York Times Sunday Review Opinion Pages, "Our Ridiculous Approach to Retirement." The piece was also discussed in India's Economic Times, "Investment norms for National Pension System Should be More Liberal to Boost Returns for Investors," for an international perspective, and in partner content from The Nation on NPR,w hich discusses the implications for women's health in "Women's Health Takes Another Hit."