- On Capitol Hill
- On Wall Street
- In the Press
- Policy Reform Work
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.
Jeff Madrick, SCEPA Senior Fellow, posted a blog as part of the Roosevelt Institute's "Rediscovering Government" project that uses the $2 billion in trading losses announced by J.P. Morgan Chase as the quintessential example of why strong regulation is needed. Below is an excerpt.
"(Jamie) Dimon, among the most cautious of executives, couldn’t control this trading animal with a life of its own, either. That’s the important conclusion. A Volcker rule to limit speculative trading for banks is necessary. They are using federally insured money to finance much of their banking operations, enabling them to leverage other facets of the company. They are using shareholder money, not their own, to take risks, yet they take enormous bonuses when all goes right. And they are implicitly using taxpayer money, because if they lose too much, they will be bailed out by the federal government. They remain too big to fail.
Serious capital requirements must be implemented against such trading, and banks must also change banker compensation procedures further. For traders, it’s a heads I win, tails you lose proposition. And so it is with the bank CEO as the firm’s overall earnings rise and are socked with a blow only every once in a while. These compensation plans have changed under pressure from the federal government to some degree. But probably not enough. The firms’ partners and employees have to be on the line for losses over time.
All this is a case study in why finance needs more government rules and regulations than most other industries. The omnipresent claim that such rules undermine liquidity in markets is almost laughable. In truth, we have a lot of liquidity when we don’t need it and little when we do—such as after the Lehman Brothers catastrophe in the fall of 2008. As regulations were eliminated and weakened after the 1970s, finance became more unstable, crises more frequent, and trillions of dollars were invested down the rat holes of speculation and fantasy, while Wall Street employees made countless millions. Yes, finance is important to economic growth, but only if government controls it properly. Otherwise it can be and has been damaging."
The Financial Times published a letter to the editor on May 14, 2012, by Sanjay Reddy, Associate Professor of Economics and SCEPA Faculty Fellow. The letter, Bias for Workers Would foster Asia Trade," puts forward an argument that "Growing inequalities within Asian economies threaten the sustainability of growth and development for reasons not mentioned, most importantly the obstacle they create to generating a pattern ofdemand that absorbs locally produced goods and services."
Reddy not only diagnoses the problem, but puts forward a prescription: "One way to effect amore equal income dist bution and increase the roleof domestic demand in the growth process is to promote co-ordinated enhancementsin wages and labour standards across Asian countries. Such an approach would muteany adverse impact on the competitiveness of individua exporting countries and alsofoster regional trade. In the present situation, a bias in favour of workers cansimultaneously improve lives and make the aggregate pa ern of development moresustainable, in both Asia and the world."
In a May 9, 2012 CNN Opinion piece, "401(k)s are Too Risky for Retirement," Yvonne Walker, President of the Service Employees International Union (SEIU) Local 1000, describes the risk to seniors as the three-legged stool of retirement - made up of traditional pensions, Social Security and individual savings - breaks down. Walker sites legislative proposals in California and New York City based on SCEPA's State GRA that would allow private-sector workers to enroll in state pension funds.
According to Walker, "If workers continue to be forced to play the dual role of employee and retirement actuary, stories of older workers like Edwards will not change for the better. We must work to improve and expand retirement options."