- 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.
SCEPA Fellow Jeff Madrick's Letter to the Editor entitled "Capitalism for its Own Sake is Not the Target of Protests" is in response to a November 16th Financial Times article entitled "Authorities Move against Occupy Protests" by Shannon Bond and Tom Burgis. Madrick makes the point that protesters for the most part are not against capitalism per se, but are aligned against unfettered capitalism.
"Rarely have these protesters condemned capitalism. Inequality, yes. Bank bail-outs and foreclosures, yes. Lack of jobs, yes. Quite a few have personally told me they are not against capitalism. What they are against is wild, unfettered capitalism. And that is what we've had for 20 to 30 years."
Jeff Madrick's latest piece in the Washington Post, "A World Without Wall Street," calls not for an end to Wall Street, but a more capable financial sector - one focused on the effective allocation of resources. Instead if having a financial sector that has used Americans' savings to make wildly risky trades that fed bankers' profits, Wall Street needs to get back to what it is supposed to do: channel Americans' savings into investment in business.
"We need a smaller financial industry with serious capital and debt limits. Risky products that are hard to understand or easily abused should be prohibited. All trading should be aboveboard and transparent, and should be done on central exchanges. Conflicts of interest should be minimized by restricting firms to a handful of products designed for one kind of customer: a buyer or a seller. Now, firms represent both."
by Jeff Madrick, SCEPA Senior Fellow
For a few decades now, American economic policy has focused on keeping inflation low, assuming that the natural rate of unemployment is fairly high. In general, that has led to stagnating wages in America. Family income today is at 1990s levels. Hourly wages are at levels adjusted for inflation they first reached in the 1960s. The wage share has been falling. Some economists claim inequality is the bigger issue, most income gains going to the top. My own view is that inequality is a runaway of income for the very top and a better way to look at America's dilemma to focus on stagnation for the broad middle and bottom. The incomes at the top, which account for most of the inequality, are made in finance—much of which is games Wall Street plays with itself. For this brief piece, I will put that issue aside.
I will argue that there has been no clearer set of circumstance to demonstrate the need for strong and relatively equal wages than current economic disturbances in the world—no better economic case to be made for a thriving middle class. The possible collapse of the eurozone and the ongoing damage of America's mortgage bust, which has left the U.S. in a prolonged recession, can now focus our attention on wage deficiency in many nations.
You might be surprised to think Europe or even American financial distress is a wage problem, not a financial discipline problem. But it is time to think this through clearly. We are too often told that disciplined Germany must bail out undisciplined Greece, that America is angry at China's currency manipulation and China at America's profligate government deficits. We might almost believe this is the heart of the matter.
But at the center of the issue are low wage shares and/or inequality. And one reason the world's policymakers, technocrats and economists don't think about it clearly enough is that they focus too much on "supply " as the principal source of economic growth -- of machinery, ideas, technology, resources, and human capital quality labor. They focus far too little on demand as a source of economic growth.
So here is the brief version of this case...