Our projects are designed to empower policy makers to create positive change. With a focus on collaboration and outreach, we provide original, standards-based research on key policy issues.
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 Monday, July 30, 2012
On July 29, 2012, the New York Times ran an op-ed by SCEPA Senior Fellow Jeff Madrick, "A Big Banker's Belated Change of Heart." Madrick discusses recent comments by former Citigroup Chairman Sanford I. Weill, who stated that the separation of commercial banking and investment banking should be re-established. This principle was the main purpose of the 1933 Glass-Steagall Act that was repealed in 1999, with Weill's support. Madrick argues that Weill's claim that the one-stop shopping model of investment banking and commercial banking "was right for the time" couldn't be "further from the truth."
According to Madrick, Weill's support of financial conglomeration led to conflicts of interest that "led to investment in and promotion of risky, poorly run and, in some cases, deceitful companies." This practice, in turn, fueled first the technology and dot-com bubble and then the housing bubble. This was in part due to the changing role of investment analysis. "Traditionally, investment analysis on Wall Street had been fairly well-trusted as an independent opinion on which investors could rely. But there was a shift during the speculative boom of the 1990s, when analysts were directly compensated by their firms for promoting the sale of shares and the purchase of bonds for investment banking and loan clients."
Jeff Madrick conlcudes his piece by saying that Weill's changing views may be because he "no longer has anything to lose." Mr. Weill's comments about his time at Citigroup show he "hasn’t come to terms with the damage the financial giants did on his watch, which would have been a true test of his sincerity. Indeed, if he were still running Citigroup, he would almost certainly be singing a different tune."
- Published on Wednesday, July 25, 2012
We are proud to announce that SCEPA Faculty Fellow Willi Semmler was awarded a grant from the Fritz Thyssen Foundation to hold a speaker series as part of SCEPA's Economics of Climate Change project. These funds will bring distinguished scholars, policy experts and government officials to The New School over the next two years. Mark Z. Jacobson of Stanford University will deliver the inaugural lecture on November 15, 2012.
The series will address how the transition to low-carbon intensive technology and "green energy" can effectively help reduce the emission of green house gases, create energy independence, produce sufficient energy supply and contribute to economic stability and employment. This includes discussion of how market economies can be brought to a path consistent with prosperity and sustainabilty, which economic environments are most favorable for inducing entrepreneurs to invest in and adopt green technology and green energy, and how the public sector can encourage a green transition.
Initiated in 2010 with a comprehensive international conference, SCEPA's Economics of Climate Change project is questioning how to enact effective climate change policy in light of fragile domestic and global economies and the possibilities and practicalities of renewable energy. The project hosted a second conference at The New School in 2011, The Bottom Line On Climate Change, which addressed how to transition from high carbon-intensive technologies to low carbon-intensive technologies.
- Published on Monday, July 23, 2012
On July 21, 2012, SCEPA Director Teresa Ghilarducci wrote an opinion piece in the New York Times Sunday Review on "Our Ridiculous Approach to Retirement." She describes how the current 'do-it-yourself' retirement planning both defies human behavior by requiring each individual to perform like a professional investor, while relying on the very natural human response to believe that you can work forever without sickness or forced unemployment.
"Not yet convinced that failure is baked into the voluntary, self-directed, commercially run retirement plans system? Consider what would have to happen for it to work for you. First, figure out when you and your spouse will be laid off or be too sick to work. Second, figure out when you will die. Third, understand that you need to save 7 percent of every dollar you earn. (Didn’t start doing that when you were 25 and you are 55 now? Just save 30 percent of every dollar.) Fourth, earn at least 3 percent above inflation on your investments, every year. (Easy. Just find the best funds for the lowest price and have them optimally allocated.) Fifth, do not withdraw any funds when you lose your job, have a health problem, get divorced, buy a house or send a kid to college. Sixth, time your retirement account withdrawals so the last cent is spent the day you die."
Ghilarducci ends with a call for a shared solution to ensure retirement security through practical policies based on actual, rather than idealized, behavior. "I hope that fear can make us all get real. The coming retirement income security crisis is a shared problem; it is not caused by a set of isolated individual behaviors. My plan calls for a way out that would create guaranteed retirement accounts on top of Social Security. These accounts would be required, professionally managed, come with a guaranteed rate of return and pay out annuities. This is a sensible way to get people to prepare for the future."
On July 23, 2012, Carole Fleck echoed the New York Times column on the AARP Blog. In her post, "Our 'Ridiculous' Retirement System is Crumbling, Expert Says," Fleck cites Ghilarducci, "She says it’s irresponsible for Congress to deny that the retirement system, despite its tax breaks, defies human behavior. Basing a system on people’s voluntarily saving for 40 years and evaluating the relevant information for sound investment choices is like asking the family pet to dance on two legs."
On July 24, 2012, Business Insider and the Huffington Post both covered Director Ghilarducci's opinion piece. Jill Krasny's article in Business Insider, "ECONOMIST: The Do-It-Yourself Pension System Has Failed," she writes, "Ghilarducci calls this is a "shared problem," and it most certainly is. But whether the government is ready to create retirement accounts on top of Social Security remains to be seen. It may be as tall an order as asking us to calculate what we'll be living on forty years from now." Robert Teitelman, Editor-in-Chief of The Deal, discusses Ghilarducci's NYTimes piece in the Huffington Post in his article "The Looming Retirement Crisis and What To Do About It." He agrees that the define contribution system doesn't work in an economy with macroeconomic volatility such as what the U.S. economy has experienced in the past ten years. He writes, "in the end, Ghilarducci pumps for a kind of mandated retirement program for everyone that would sit atop Social Security. She may be right, though the politics of this are very difficult." And he concludes by saying, "if the experiment in defined-contribution plans taught us anything, we don't share nicely. It'll take a very large crisis to change that."