Category - Politics

CBO Director’s Testimony Ignores Most Obvious Use of Cap-and-Trade Revenues

Friday, May 8, 2009 by Tom Masterson
Categories: Consumption, Environment, Fiscal Policy, News, Political Economy, Politics, Taxes

Congressional Budget Office Director Douglas W. Elmendorf summarizes his testimony to Congress (there’s also a link to the pdf file of the full testimony). Unfortunately, the simplest way to ‘distribute the value of carbon allowances,’ to paraphrase Elmendorf, is not mentioned: dividing it up equally. The technical details (division!) have been dealt with before on this blog by Jonathan.  Why would this obvious alternative be left out? My inner conspiracy theorist whispers that it’s left out to make giving away allowances the most politically viable alternative on the table. After all, why should all those poor folks benefit, when the rest of us have to shell out more at the pump?

Director’s Blog » Blog Archive » Testimony: The Distribution of Revenues from a Cap-and-Trade Program for Carbon Dioxide Emissions

On Worker Deaths

Tuesday, March 17, 2009 by Center for Popular Economics
Categories: Econ-Atrocity / Econ-Utopia, Healthcare, Labor, News, Politics

By Patrice Woeppel, Ed.D.
Author of Depraved Indifference: the Workers’ Compensation System

March 16, 2009

The Bureau of Labor Statistics (BLS) records 5,488 worker fatalities for 2007, the most recent year for which their data is completed. But the number of worker fatalities recorded by BLS is grossly under-reported.

Worker deaths from toxic exposures, other work illnesses are conservatively estimated by NIOSH and other researchers at 50,00 to 60,000 deaths each year, or ten times the number of fatalities from work injuries.[fn1] [fn2] [fn3] It is a disaster of monumental proportions that goes largely unrecorded. The United States has no comprehensive occupational health data collection system.

As we have lagged behind other nations in our lack of a national comprehensive medical and statistical database on occupational illnesses, occupational injuries; we have lagged behind in the research into the causes and consequences of occupational illnesses that would lead to improved diagnosis, treatment, prognosis, and ultimately prevention, of occupational toxic exposures and resultant diseases.

While the United States has set permissible exposure limits on less than 500 of the hundreds of thousands of chemicals in use in workplaces throughout our country, the EU regulates 30,000 chemicals utilized in their workplaces, and many that we allow here have been banned for years in the EU.[fn4] Even the small number of chemicals, upon which exposure limits have been set in the US, are grossly out of date based on more recent scientific data.

It is a major and costly health issue – costly in lives, and costly in dollars. The economic burden for occupational illness, injury and death in our country is an estimated $170 billion annually. It is an economic burden that falls mainly on families (44%) and on taxpayers (18%); with only 27%, on average, being paid by workers’ compensation.[fn5]

There has been very little general public awareness of this system that maims and kills with impunity. The time is long overdue to re-evaluate a structure that evolved over one hundred years ago; and which clearly doesn’t meet the needs of seriously injured, ill, or toxic chemical-exposed workers, or the families of workers who died from their work – a system that has fostered devastating and lasting damage to families, to communities, to our environment.

Increasingly as a nation, we have been all too willing to push corporate costs onto workers and taxpayers; and all too willing to cut protections for workers, communities.

Occupational illness deaths are now the eighth leading cause of death in the US, more than many of the diseases that receive far more government, public, and media attention.[fn6] We need to right this terrible, continuing American tragedy.

References:

1. Leigh, J. Paul; Markowitz, Steven; Fahs, Marianne; Landrigan, Philip. Costs of Occupational Injuries and Illnesses. University of Michigan Press, 2000.

2 U.S. House of Representatives. Hidden Tragedy: Underreporting of Workplace Injuries and Illnesses. A Majority Staff Report by the Committee on Education and Labor. Honorable George Miller, Chairman, June 2008.

3.Steenland, Kyle; Burnett, Carol; Lalich, Nina; et al.Dying for Work: The Magnitude of US Mortality From Selected Causes of Death Associated With Occupation, American Journal of Industrial Medicine, Vol 43, pp 461-482, 2003.

4. Regulation EC 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), http://eur-lex.europa.eu.

5. op. cit. Leigh, et al, 2000.

6. LaDou, J., M.D. Occupational and Environmental Medicine in the United State: A Proposal to Abolish Workers’ Compensation and Reestablish the Public Health Model, International Journal of Occupational and Environmental Medicine in the United States. 2006; 12 (2) 154-168; and US Department of Health and Human Services, National Center for Health Statistics, Centers for Disease Control and Prevention, National Vital Statistics System, National Vital Statistics Reports, Vol 53, Number 5. Deaths: Final Data for 2002, Table 10 and Worktable I, pp. 1585, 1634, 1662, 1703, 2220-2224, at cdc.gov/hchs/data/dvs/mortfinal2002_workipt2.pdf.

NPR = Not-news Public Radio?

Monday, March 16, 2009 by Jonathan Teller-Elsberg
Categories: Fiscal Policy, Monetary Policy/Federal Reserve, News, Politics, Pop Culture

[cross posted]
What gives with this morning’s NPR “Morning Edition” story about banks that are choosing to steer clear of TARP bailout money? Reporter Jim Zarroli mostly profiles the Johnson Financial Group, a bank that at first applied for $100 million, then decided not to take it after all once it learned the details of the the strings that come attached, saying that this bank is just one example of many that represent a “mini rebellion” against the TARP program. As the president of Johnson Financial Group says directly, and as Zarroli reiterates later in the story, Johnson didn’t need the money! Why in the hell would it be news–or be considered “rebellious”–that a healthy bank would not participate in a welfare program for the financial industry? Why is is conceivably news that TARP is designed to include incentives that encourage banks to pay back money they receive through the program quickly? Though undoubtedly flawed six ways to Sunday, the basic idea behind the TARP bailout is that it provides money to large banks that will otherwise go bankrupt or experience major disruptions–and spread those disruptions to other financial institutions, and through them the rest of the economy–and is designed so that the banks will eventually pay back the government (and so, you and me as taxpayers). Zarroli briefly quoted Rep. Barney Frank in defense of TARP and the strings that it attaches to its payouts, but 98% of the story is just bankers whining about either being forced to bank responsibly or whining about not having access to free taxpayer money, free even of the relatively mild strings that are part of TARP. I guess it needs repeating, though I wouldn’t have thought it necessary:

  1. TARP money should only be available to banks that actually need it to avoid major business disruptions. That a bank like Johnson, which is in good financial condition, is even allowed to apply for TARP funds is a flaw in TARP. The flaw is not that TARP’s strings cause Johnson to say “no thanks.”
  2. Banks that take TARP money not only are required, but by all rights should be required to pay back that money in full, and including interest payments to cover the risk that taxpayers are taking that not all TARP recipients will pay back in full after all is said and done. This is banking after all, right?
  3. Banks that take TARP money should pay back the money sooner rather than later. What’s the advantage to taxpayers for having the banks sit on the money longer than they need it?

No-strings-attached banking is what primed the financial bomb that has now exploded in our faces. Responsible banking practices are needed more then ever, and NPR’s promotion of irresponsible banking propaganda does not help.

McCain v. Obama on taxes

Wednesday, August 20, 2008 by Tom Masterson
Categories: Fiscal Policy, News, Political Economy, Politics, Taxes

As discouraging as votes on things like FISA and telecom immunity have been, there are still some enormous differences between the two (?) major party candidates. For example, there’s the distributional impacts of their tax policy proposals, as well-illustrated in the figure below from the Tax Policy Center’s newly updated analysis (click on image to embiggen).

Figure 2 from Updated Analysis of the 2008 Presidential Candidates’ Tax Plans: Executive Summary - August 18, 2008, Urban-Brookings Tax Policy Center

(Tip of the Econ-Atrocity chapeau to Paul Krugman)

Is the Energy Bill Not-Insane?

Thursday, May 8, 2008 by Tom Masterson
Categories: Energy, Fiscal Policy, News, Politics, Taxes

J.S. at Environmental Economics seems to think so. Maybe. According to a NY Times piece the bill

would revoke $17 billion in tax breaks extended to big oil companies like Exxon Mobil Corp and slap a 25 percent windfall profits tax on firms that don’t invest in new energy sources.

My question is: will the Democrats grow a spine in time to pass such a bill, even in the face of some opposition?

[Crosspost] How it could have been done if the preachers of the free market had stuck to their principles instead of launching a moronic war

Friday, April 25, 2008 by Jonathan Teller-Elsberg
Categories: Fiscal Policy, Militarism, News, Politics

[Originally posted here.]

In my post a moment ago I mentioned how I’d once heard that, for the money the US spent on the war in Vietnam, we could have paid for the installation of an in-ground swimming pool for each and every Vietnamese family instead. What a great way to win the hearts and minds of our enemies, eh? So I decided to try out the math for this stupid, awful, and infuriating Iraq war. What if we had tried to bribe the Iraqi people to overthrow Saddam Hussein and install a working democracy instead of imposing these things (rather: trying futilely to do so) by force?

Cost of war to US taxpayers as of March 28, 2008: a bit over $506,359,000,000. Source.

Population of Iraq in July 2008, according to the CIA World Factbook: 27,499,638.

I threw in 2,000,000 extra people to account for the dead and refugees, so the numbers below are based on an estimated population 29.5 million people.

Cost per Iraqi (each man, woman, and child) paid so far by US taxpayers on the war: $17,767.21.

First of all, what if we’d just offered Saddam Hussein and his top leadership only, say, half the total that we’ve spent–roughly $253 billion–to leave Iraq and go live in the Bahamas? Well, if he’d refused but the so-called free market loving leadership in the US had pursued this market line of thinking, we could have had Hussein overthrown–without the loss of a single American life–by offering each man, woman, and child in Iraq any of the following.

There you have it. The Iraqi people could have had a Saddam Hussein-free Iraq and eaten their apple pie, too. But that’s not the way we did it, because, as usual, the American government tried to do it on the cheap. Haven’t any of these people heard “penny wise, pound foolish” before? And now Bush/Cheney and McCain have got their sights set on going double-or-nothing broke in Iran as well. Will you buy that?

The best democracy money can buy

Sunday, April 20, 2008 by Jonathan Teller-Elsberg
Categories: News, Politics

I was trolling through Flickr looking for photos of John McCain (for a t-shirt design I’ve got in mind) and came across this graphic by pseudoplacebo. It shows how much Clinton, Obama, McCain, and Ron Paul had spent per delegate they’d won, as of February 25, 2008. It’s something that’s been on my mind lately. Even though I’ve come to be an Obama supporter, it is seriously grossing me out how much money this election is costing–more than that, it’s unnerving to me that Obama’s lead (and probably victory) in the Democratic primary has depended so heavily on such obscene amounts of money. Yes, yes, I know, more than almost any politician in recent years, Obama’s money is coming largely from small donors. Even still, it gives pause for thought.

Anyhow, thanks to pseudoplacebo for giving this graphic a Creative Commons license!
cost_per_delegate_feb25_by_pseudoplacebo.jpg

Night of the living “brain-dead liberal”

Monday, April 14, 2008 by Jonathan Teller-Elsberg
Categories: News, Political Economy, Politics, Pop Culture

I know I’m behind the times, but last night I was reading some (seriously) backlogged email and in it was a link forwarded by my mom to David Mamet’s recent essay in the Village Voice, “Why I Am No Longer a ‘Brain-Dead Liberal’.” It’s a strange essay that’s simultaneously difficult to follow and clearly intended as an embodiment of Churchill’s (perhaps apocryphal) dictum that “If you’re not Liberal when you’re 25, you have no heart. If you’re not Conservative when you’re 35, you have no brain.” It took Mamet more than 25 years to harden his heart, but by golly he’s done it! As for the question of whether he successfully traded it in for a new and improved brain… well, that’s not quite so certain.

It seems his first mistake is in assuming that his playwriting is an accurate reflection of reality, and then using an interpretation of his own play as a way to see back through to reality. His example of the clash between “conservative” and “liberal” is from his recent play, November.

But my play, it turned out, was actually about politics, which is to say, about the polemic between persons of two opposing views. The argument in my play is between a president who is self-interested, corrupt, suborned, and realistic, and his leftish, lesbian, utopian-socialist speechwriter.

Notice that his “conservative” is actually just a jerk: “self-interested, corrupt, suborned” — I won’t grant him “realistic” since this is Mamet’s subjective interpretation of his own character after the fact of Mamet’s conversion to a more conservative philosophy about life. Nothing about being self-interested or corrupt or suborned has anything to do with political outlook. People across every inch of the political spectrum are sometimes self-interested (and sometimes not) and sometimes corrupt (and sometimes not). True, the stereotype of a conservative in our culture is of a self-interested “old white man,” and leading conservatives in recent years, from Dick Cheney to Tom DeLay and so on, have done a bang-up job of encouraging the belief that conservatives are also likely to be corrupt; but those things don’t really have anything to do with conservatism per se, only with the nonpartisan tendency of power to corrupt and absolute power to corrupt absolutely.

On the other side is Mamet’s stand-in for a “liberal.” The key term for her is that she’s “utopian” (though her being a lesbian is surely frosting on the cake for Mamet). And again, though utopianism fits the stereotype of the left, it’s an intellectual flaw that knows no boundaries. Hitler, among other things, was certainly a utopian (and certainly not a liberal).

So Mamet has allowed himself to be confused by the surface ephemera of cultural stereotypes, has embodied them in his play’s characters, and has then analyzed them in his effort to deduce essential truths. It’s no surprise that he’s missed the mark.

Mamet’s conversion is based on his revelation that people, alas, are not generally good at heart. Instead, he says, “people are swine and will take any opportunity to subvert any agreement in order to pursue what they consider to be their proper interests.” He goes on to say that recognition of this truth of human nature is at the heart of the U.S. Constitution.

The Constitution, written by men with some experience of actual government, assumes that the chief executive will work to be king, the Parliament will scheme to sell off the silverware, and the judiciary will consider itself Olympian and do everything it can to much improve (destroy) the work of the other two branches. So the Constitution pits them against each other, in the attempt not to achieve stasis, but rather to allow for the constant corrections necessary to prevent one branch from getting too much power for too long.

Rather brilliant.

I’m in no position to disagree, but this points us towards Mamet’s next essential error. While Mamet is a fan of the separation and more-or-less balancing of powers between the branches of government, his conversion to conservatism (which, though hard to tell for sure from his essay, sounds pretty much like libertarianism) leads him to imply that the “free-market” should be left to itself and the power of government eliminated, or at least mostly so.

What about the role of government? Well, in the abstract, coming from my time and background, I thought it was a rather good thing, but tallying up the ledger in those things which affect me and in those things I observe, I am hard-pressed to see an instance where the intervention of the government led to much beyond sorrow.

But if the government is not to intervene, how will we, mere human beings, work it all out?

I wondered and read, and it occurred to me that I knew the answer, and here it is: We just seem to. How do I know? From experience. I referred to my own—take away the director from the staged play and what do you get? Usually a diminution of strife, a shorter rehearsal period, and a better production.

Let’s ignore the fact that, once again, Mamet is mixing up the metaphors of his reality. When you take away a director, you aren’t just taking away generic “government,” you’re taking away authoritarian government. It might be true that taking away any and all forms of government leads to beautiful theatrical productions, but that’s not a conclusion Mamet can legitimately claim from his example.

Anyhow, Mamet’s bigger confusion is one of scale and it leads him to fall for a bait and switch. Sure, a group of people the size of a bunch of actors and production crew can probably figure out how to behave with one another reasonably well most of the time. “Live and let live” works, mostly, maybe, at the level of neighborhood or community. (Don’t forget, however, that it has often been transformed into “live and let lynch.”) So conservatism/libertarianism might be perfectly reasonable at small scale; to paraphrase Churchill again, this might be the worst political philosophy there is for the small scale of society, except for all the others.

But our world is not as claustrophobic as Mamet’s theatrical in-crowd. We don’t live in one giant small town. And if the separation and balancing of powers makes sense for government, where is Mamet’s desire, post-conversion to “conservatism,” for a balancing of the power of corporations, of the market economy? This is Mamet’s most interesting mistake, in my opinion, because in pointing out the inconsistency of his thinking I’ve realized that the traditional “liberal” response doesn’t hold up well enough for me. Mamet’s bashing of government as leading to not “much beyond sorrow” is the knee-jerk conservative response to failures that are real; and while I think that government is necessary to serve as a balancing power against the whims of the market economy, the frustrations that both conservatives and liberals continuously feel at the state of our society leads me to a further conclusion: this balancing act isn’t working because it’s a two-legged stool. The Constitution balances the powers by splitting them up between three branches. If one branch gets out of hand, the other two–even if only for entirely selfish reasons–will be inclined to join forces to bring the first branch back within proper limits. But it takes three branches to enable such a dynamic.

In our contemporary society, there doesn’t seem to be a third branch of structural power available, not one that I can think of at least. Perhaps once the labor movement served that role. The civil rights movement and other mass social movements might be understood to have functioned as third branches of social power in their times. Nowadays, I don’t see anything filling the role of a third branch. The result, from my “liberal” perspective, is a government largely overrun by the power of the economic sphere. (Of course, it’s not just the “economy” generically speaking that can organize and direct power; it’s the people in elite positions of the economy who can do so.) And when the government has been “suborned” (my thanks to Mamet for that–I was annoyed at first that I had to look up his fancy word, but it’s a good one) by the economy, is it any wonder that so many of the government’s actions appear to lead to sorrow?

So what’s out there to rise up as a new third leg of power, capable of enabling a balancing with government and economy? A revived labor movement might do it, but I’m not holding my breath. Some new social movement, maybe, like that of immigrants or environmentalists. But I think I might be better off buying Bear Stearns stock than putting my hopes in one of those possibilities. Even if such a social movement does arise, what chance does it have to institutionalize itself to remain relevant for more than a few years, a decade or two at the most? What makes it even more unlikely is the fact that institutionalization of social movements seems mostly associated with the demise of their social power, their appropriation into the realms of government and economy, not the maintenance of an independent power structure. How about “the church”? That’s the most likely candidate, but frankly, I’d rather stick with the second-rate status quo than risk going the route of The Handmaid’s Tale.

The only suggestion I’ve heard that might do the trick–and I don’t know that it would–is that of Peter Barnes from his book a year or so ago, Capitalism 3.0 (available in full as a free PDF). In the book, Barnes argues in favor of the establishment of a legally empowered and widespread system of “commons”; that is, resources and organizations held as common property by some relevant group of people, from the level of neighborhood to nation to world. This commons sector wouldn’t replace the market economy and its associated private property (though some resources currently utilized as private property would be converted to common property) and it wouldn’t replace government and its associated public property (though some resources currently utilized as public property would be converted to common property). What makes a commons sector viable, perhaps, as a third leg in balancing the social powers is that it would (as envisioned by Barnes) be institutionalized in a manner that maintains its separate power base from the private property economy and the government. Unlike Mamet, Barnes has no interest in dazzling readers into a state of confusion and irritation, so his writing is clear and pleasant to read. Could the commons be enough to do the trick? Would it truly be robust and resilient over time? I don’t know, but the book is short and sweet, so check it out and see what you think.

Now I want to get back to something I touched on above. One of the ironies of Mamet’s essay is that, partly (though surely not entirely) due to his obnoxious tone of condescension towards all those “brain-dead liberals” he’s left behind in his conversion, the comments in response to the article are filled with back and forth vitriol between offended liberals and conservatives offended at the offended liberals. I tried reading the comments but quickly sickened of the dismissive attitudes that predominated. So here’s the irony: Mamet thinks that people work things out when left to their own devices, just like his utopian theater group that puts on such great plays when liberated from under the thumb of the governing director; and yet his article elicits evidence of exactly the opposite. As I suggested, the theory that people just work things out A-OK might be a good theory to apply to small groups (but then, why so many runaway teenagers? why so many battered wives? why so many suicides?) but, repeating myself, the world is much bigger than that. Our modern world is filled to overflowing with connections, some seen, some hidden, between people near and far, people who not only don’t know one another but don’t even know that the others exist. Farmers in Kansas converting their fields from wheat to corn, in order to cash in on the ethanol boom, are part of a system that results in skyrocketing bread prices in Egypt (and yes, I realize that this example is one in which government plays a leading role in screwing things up, though — does it really need saying? — the US government’s ethanol policy wouldn’t be nearly the disaster that it is if the government weren’t so susceptible to the lobbying efforts of Archer Daniels Midland, Cargill, and the other agribusiness corporations).

More banal, but experienced by almost anyone reading this missive of mine, is the fact that the anonymity and distance of modern modes of communication, perfectly presented in comments on blogs and other online pages, triggers so very many people to adopt an “act like an asshole first and apologize later, if I feel like it” attitude. It’s neither liberal nor conservative to be bothered by the decay in cultural decency; but Mamet’s self-described conservative preference for just letting it all fix itself leaves a lot to be desired. Sure, sometimes government action exacerbates a problem; sometimes there’s no good solution and leaving things alone is the best available from a set of bad options. But in a world of “people [who] are swine and will take any opportunity to subvert any agreement in order to pursue what they consider to be their proper interests,” does it really make good sense to always and everywhere ask the swine to work their own problems out, regardless of the fact that some but not all of the swine are armed to the teeth, that some but most definitely not all are richer than God, that some revel in their swineness while others care at least to try for a little courtesy and decency and honesty? The answer to a swinish human nature in the realm of government was the balancing of powers. It also seems to me the best answer I’ve encountered for the overall realm of society at large. Balance those powers. Put a leash on the government, absolutely for sure, but also for sure put a leash on the economic powers cuz those pigs will steal the shirt off your back and then smile as they offer to sell it back to you at a special discount, “just for you ;).” For now, at least, that’s the liberalism this zombie is sticking with.

Step #3 for a Democratic Economy

Tuesday, April 1, 2008 by jjfitzgerald
Categories: Econ-Atrocity / Econ-Utopia, Economic Democracy, Education, Fiscal Policy, Monetary Policy/Federal Reserve, Political Economy, Politics, Social/Solidarity Economy

A Modest Proposal: Ten Steps to a Democratic Economy

In my initial installment of this series, I proposed, “Ten Steps to a Democratic Economy.” With this column, I would like to explain and defend my third proposal. I invite commentary and analysis.

3. Reform the Money System – The money supply system is directly under the control of the Federal Reserve. This agency has 14-year terms. They need to be placed under congressional control, not Presidential control. I recommend that their terms be limited to 4 years and they should be checked by Congressional fiscal policy. High interest rates currently only benefit banks and financial institutions.

The Federal Reserve, usually called, ”The Fed,” is the central banking system of the United States. The Federal Reserve System is composed of a central Board of Governors in Washington, D.C., and twelve regional Federal Reserve Banks located in major cities throughout the nation, and a number of member banks. The Federal Reserve Act created the Federal Reserve System in 1913. The board and its chairman are appointed by the President of the United States and approved by the Senate.

The money supply available at any given time in our economy is a product of the interest rates that are set by the Federal Reserve. As it raises or lowers the interest rate it charges to member banks, it increases or decreases the amount of money available to the economy. Higher interest rates slow the economy and lower interest rates speed it up. This means that the economy is producing goods and services and thereby creating jobs in a “slow” manner or in a “faster” manner.

I am not an expert in economics, but I know that high interest rates hurt low-income people and benefit wealthy people. Low interest rates help low-income people, but do not hurt wealthy people. The wealthy have a surplus and they profit from whatever the amount of the interest that it earns. Their complaint would be that they are not being rewarded “enough” for their thrift and/or miserly behavior. People who have surplus money can, of course, give it away, but most wealthy people prefer to “rent” it out. The money you pay in interest on a loan is in effect the rent for that loan. The wealthy are the creditors and the poor are the debtors. Those who lend are the creditors and those who borrow are the debtors. (One problem with this scenario is that truly destitute, impoverished people are hardly ever loaned money. They are considered poor risks.)

When a bank grants someone a loan, most people feel happy. This is understandable but they should not feel happier than the bank. The bank is now getting a 6% return on its money, when earlier it was only getting 2%. This is how banks make money for themselves. They take it in at one window and loan it out (part of it) at the other window.

Low interest rates stimulate purchasing of goods and services. With low interest rates it is easier to borrow money to buy a car, a refrigerator or a house. This means that more people will exercise that purchase option and the economy will move along. This tends to create a bit of inflation.

Wealthy people do not like inflation. It means that their wealth does not buy as much as it used to buy. Large financial institutions feel the same way. They like to have the Federal Reserve under the control of people who are not elected by the citizens, or at least at a distance from the people. The President appoints Federal Reserve Board members. Their terms in office are for 14 years and the Senate confirms them. The House plays no role. The Senate is the more conservative of the two legislative branches. Senators have 6-year terms. There are two per state regardless of population.

Recently, after Hurricane Katrina, hit the Gulf Coast, a number of people felt that the Federal Reserve should have lowered interest rates to make goods and services available to those afflicted. It did not do so. It was focused on the anti-inflationary policy that it had been following. This is an example of monetary policy interfering with fiscal policy. Tax cuts meant that the government would have to borrow to cover the costs of the hurricane and aftermath.

Fiscal policy refers to the ability to raise revenue by way of taxes and to spend money on needed projects. In a phrase, fiscal policy refers to revenue and expenditure policy. With a democratic fiscal policy, we could collect more money from the affluent and provide more services to the poor. Tax the rich and help the poor.

It is for this reason that conservatives fear and loathe democracy. Conservatives fear that a majority would probably want to spend more money on schools, health care and environmental protection, instead of prisons, police and the military. Since the wealthy people would see an increase in their federal income taxes, if this happened, they generally oppose giving Congress strong fiscal tools, and instead rely on monetary policy to adjust the economy.

A more democratic society would give us better economic policies. Better economic policies would put people before profits.

A better world is possible.

References:

Economic Report of the People. Boston: South End Press, 1986.
(Center for Popular Economics, Amherst, Massachusetts)

http://en.wikipedia.org/wiki/Federal_Reserve

Raise the minimum wage!

Friday, February 29, 2008 by jjfitzgerald
Categories: Econ-Atrocity / Econ-Utopia, Economic Democracy, Labor, Massachusetts, Political Economy, Politics

A Modest Proposal: Ten Steps to a Democratic Economy

In my initial installment of this series, I proposed, “Ten Steps to a Democratic Economy.” With this column, I would like to explain and defend my second proposal. I invite commentary and analysis.

2. Raise the Minimum Wage – I think it would be a good idea to raise the minimum wage to $10.00 per hour. It is currently $5.85 per hour.($8.00 in Massachusetts.) I would also shorten the workweek to 35 hours to give people more free time for recreation and education.

Raising the minimum wage would put a lot more money into circulation and would stimulate the economy. Most of the people who would benefit from this new policy would spend their money on goods and services that they presently do without. For all of these people, it would mean more money above the subsistence wage that they are presently earning. These people are the working poor. They are for the most part the invisible poor. Visible or not they are a reality in the current American economy.
The economist Holly Sklar is a widely published op-ed columnist and author. She is co-author of “Raise The Floor: Wages and Policies That Work For All Of Us,” which Barbara Ehrenreich calls, “A commanding work and powerful tool for the living wage movement.” She is a contributor to numerous high school and college text anthologies and is a frequent guest on talk radio.
She tells us,

“The number of Americans in poverty is a group so large it would take the combined populations of Louisiana, Mississippi, Alabama and Texas, plus Arkansas to match it. That’s according to the Census Bureau’s latest count of 37 million people below the poverty line.
Millions more Americans can’t afford adequate health care, housing, child care, food, transportation and other basic expenses above the official poverty thresholds, which are set too low. The poverty threshold for a single person under age 65 was just $9,827 in 2004. For a two-adult, two-child family, it was just $19,157.
By contrast, the Economic Policy Institute’s Basic Family Budget Calculator says the national median basic needs budget (including taxes and tax credits) for a two-parent, two-child family was $39,984 in 2004. It was $38,136 in New Orleans and $33,636 in Biloxi, Mississippi.
America is becoming a downwardly mobile society instead of an upwardly mobile society. Median household income fell for the fifth year in a row to $44,389 in 2004 — down from $46,129 in 1999, adjusting for inflation.”

Under my proposal, if the principal wage-earner was paid $10.00 an hour for a 35 hour work week, their family income would be $17,500.00. This would not eliminate poverty, but would put a floor under it. With family assistance for the working poor, in the form of tax credits or income credits, we could effectively insure that no family lived in poverty.
A higher minimum wage also helps protect the wages of workers in the higher brackets. It also promotes a greater sense of community, in that it eliminates the resentment that gross inequality in income and wealth promotes. This resentment contributes to criminal and anti-social activity.
The minimum wage would have to be indexed to inflation to protect it. To promote skilled labor, a minimum wage policy would have to include free education. By making education available to all, with free tuition, room and board, etc. we would remove a number of people from the work force and at the same time invest in future job growth for highly skilled graduates. Over time these skilled workers would pay back the system by paying their just share of taxation.
The current system will not move toward this direction unless we build a social and political movement that works to bring it into being. The current economic elite is aware of how fragile their social position is. That is why they spend so much money for lobbyists and political bribes (aka “contributions) to keep the current unjust system in place. A disciplined political organization of working people and their allies could easily overcome this. It really is just a matter of, “keeping your eyes on the prize,” as they used to say in the civil rights movement.
One thing is certain, if we do not try to build a progressive movement, then we will not have a progressive movement. If we try, we might fail. But a rational and realistic effort, very probably would succeed.
The alternative is the misery and injustice that we see around us today. To maintain that outcome, we need to do nothing.

Don’t give me the creeps

Saturday, February 23, 2008 by mash
Categories: Econ-Atrocity / Econ-Utopia, Fiscal Policy, News, Politics, Taxes

Here is a quick quiz question and reality redefinition brought to you by President Bush’s Council of Economic Advisers. Fill in the blank:

“[A]s people’s real incomes grow, they become subject to higher tax rates.”

This phenomenon is known as _______________________.

A Modest Proposal: Ten Steps to a Democratic Economy

Wednesday, February 20, 2008 by jjfitzgerald
Categories: Econ-Atrocity / Econ-Utopia, Economic Democracy, News, Politics

A Modest Proposal: Ten Steps to a Democratic Economy

by John J. Fitzgerald

I propose Ten Steps to a Democratic Economy. Starting with this column, I would like to explain and defend my proposals. I invite commentary and analysis.

1. The Right to a Job – Every person should be guaranteed a job. If the private sector cannot help them, then a public sector job should be available. This could include working on a mass transit system to replace the interstate highway system. Maintenance of public parks, fully staffing public schools and public hospitals could be other areas of employment. We should also publicly fund an alternative energy policy to end our dependence on foreign oil. The model to follow here would be Sweden.
- - - - -
Every person who is not significantly handicapped should be able to work for a living. I define a decent job as one that pays at least $10.00 per hour, for a 7 hour day, 5 days a week, with decent working conditions, health care and Social Security coverage. If the current market can not supply those jobs, then the government should. This program would be similar to what Franklin Roosevelt’s New Deal meant in the 1930’s, except it would not wait for an economic depression to get it started. I would like to see this expand and contract as the situation required. For example, maintenance of public parks and recreation areas would be an ongoing effort. Maintenance of public buildings, schools and hospitals which are historically neglected because of budget concerns would be fully funded, thereby creating a supply job market that will always be present to match demand. Creating a mass transit system would require a huge workforce just as the interstate highway system of the 1950’s and 1960’s did. Converting from an automobile based transportation system would ease global warming and end our dependence on oil from the Middle East. Converting from petroleum and natural gas to wind power, solar and increased hydro would also require new construction and manufacturing jobs.
Shortening the work week to 35 hours will also create more jobs. It would increase leisure time and thus would promote jobs in that sector. We would also have to make over-time illegal. One should be able to survive and flourish on the income generated by one job. The goal is to create more jobs. The whole idea is to get away from a profit making system to an economy that puts people first. Another name for this is democratic socialism.
To attain this goal we need to start discussing it as a goal. Some people are already close to doing this. This past month, [December, 2006] AFL-CIO President John Sweeney outlined his federation’s vision for stopping what he called, “the senseless slaughter” of good American jobs.
In a speech to the National Press Club, Sweeney described how America’s workers have struggled over the past 25 years as “a perfect storm of outsourcing, off shoring, tax evasion, layoffs, work speedups, wage cuts, health care cuts, pension cuts, shifting risks, bashing unions and short-changing communities”
has swept across the economic landscape.
Sweeney talked about some of the immediate actions Congress and President George W. Bush can take to stop the erosion of good jobs in
America, including:
• Guaranteeing America’s workers the freedom to form unions and
bargain for a better life.
• Giving workers the same protections as corporate interests in
our trade policy.
• Making it illegal for companies to buy or sell products made
in sweatshop conditions.
• Repealing tax laws that encourage companies to send jobs
overseas.
• Passing universal health care coverage.
• Telling corporate America to rejoin our national community by
investing more in workers and less in their executives.
• Doubling the money we spend on education and job training.
• Raising the minimum wage.

Sweeney is making proposals within the context of a corporate-capitalist-labor union system. I think we need to move beyond this approach and for that we will need to get involved with political parties and political campaigns. A good start might be found in a progressive movement within the Democratic Party.

Krugman on odds of achieving universal health care: w/ Clinton not bad, w/ Obama near zilch

Thursday, February 7, 2008 by Jonathan Teller-Elsberg
Categories: Healthcare, News, Politics, Social/Solidarity Economy

Paul Krugman’s latest column asserts that Senator Clinton should be the clear favorite for those in favor of universal health care.

The principal policy division between Hillary Clinton and Barack Obama involves health care. It’s a division that can seem technical and obscure — and I’ve read many assertions that only the most wonkish care about the fine print of their proposals.

But as I’ve tried to explain in previous columns, there really is a big difference between the candidates’ approaches. And new research, just released, confirms what I’ve been saying: the difference between the plans could well be the difference between achieving universal health coverage — a key progressive goal — and falling far short.

Specifically, new estimates say that a plan resembling Mrs. Clinton’s would cover almost twice as many of those now uninsured as a plan resembling Mr. Obama’s — at only slightly higher cost.

[cont’d]

On the other hand, and mucking up the analysis of what’ll happen if Clinton is elected versus Obama (assuming one of them is indeed elected over the Republican candidate), is the idea I’ve seen advocated that Obama on the November ballot will better help in the election of lots more Democrats to the US House and Senate. The idea being that Clinton is more divisive, so even if she wins, there will be fewer middle-ground and moderate-Republican voters who will feel enthusiastic about the Dems in general, and so less likely to vote for other Dems on the ticket. But Obama is seemingly more unifying and uplifting of a character, and so good vibes for him will rub off on other Dems on the ticket. And if that’s true, then ironically Obama would have a Congress to work with that would be more amenable to a strong health care initiative, whereas Clinton would have a harder fight on her hand because the Congress she faced wouldn’t be as friendly to progressive causes. (Examples of this sort of analysis from The Nation and DailyKos.)

And is Krugman right that those opposed to universal health care will actually and successfully be able to kill an attempt by Obama to expand his policy vision by turning his primary campaign words against him? It seems plausible that he could change his vision and that, if this occurs during a honeymoon first 100 days following a landslide victory, brush aside those sorts of attacks without too much trouble. Maybe I’m being too optimistic. It’s just that I find myself reasonably convinced by the “Obama brings with him a stronger Congress than Clinton” arguments and so have been finding myself moving towards supporting him for that reason. (I’m in Vermont and our primary isn’t until March 6.)

Onward!

[Update] It’s all pretty frustrating, this not being able to predict the future. I say that because I agree with something else that Krugman has said (though I can’t recall where to link to it at the moment) that establishing a viable universal health care system is enormously important, both for the wellbeing of the country in general, and for a left/progressive movement as well. It’d be like a new New Deal–it would provide a kind of shared benefit that tens-, hundreds of millions of people would feel and appreciate. They’d not only be better off, they’d know that it was the left that got them better off. Large numbers of people who felt that there was no useful difference between the Republicans and the Democrats would learn that in fact there is. (And even if you think there isn’t currently, the establishment of universal health care would in itself be the fact of difference.) Large numbers of people who think government is just a big joke would learn that government can indeed do some things–some very, very important things–right, do them better than the alternatives. A decent universal health care system, alongside a carbon cap-and-dividend system, would breathe vibrant new life into a progressive political movement. We’d gain a generation or more of new loyalty and energy.

And we need that loyalty and energy. There’s lots to be done, from avoiding the worst of global warming to eliminating poverty, from ending the Iraq war to rebuilding crumbling schools and other infrastructure. These things are big jobs and expensive. To do them right means having the backing of the majority of the people. To get that backing, the people have to feel–to know–that “we’re all in it together” is more than empty rhetoric. Universal health care is the achievable reality that makes that rhetoric tangible. It’s a policy of solidarity that makes each next step a little easier to achieve. It’s why I’ve been quipping (mostly to myself) for a while now that “universal health care is an environmental issue.” If we can provide universal health care that makes it one heck of a lot easier to convince people that we all have to face restrictions on energy consumption (and so consumption in general). We have to face both the restrictions and the benefits (of health care, of a healthy environment, etc.) together.

And so if in fact that’s all true, then boy oh boy will it be disappointing if Obama (or Clinton) is elected president–especially if he (or she) is backed by a newly enlarged Democratic majority in Congress–and yet fails to seize the opportunity. Boy oh boy, very disappointing.

Some popular vote numbers for the primaries

Wednesday, February 6, 2008 by Jonathan Teller-Elsberg
Categories: News, Politics

I was curious about overall popular vote numbers for the primaries this year. I’ve seen a number of pieces, particularly at DailyKos (like this one) pointing out that Democrats are going to the polls in much larger numbers than Republicans. But a little bit of searching came up with nothing as far as overall popular vote tallies. They’re out there, I’m sure, but I couldn’t find them easily. So I put some together and they’re over on my workplace blog, in case you’re curious.

A poem

Tuesday, January 22, 2008 by Jonathan Teller-Elsberg
Categories: Class, Commons, Economic Democracy, History, History of Thought, Inequality, News, Political Economy, Politics, Pop Culture, Prisons

A friend just sent this to me. It’s an English folk poem, circa 1764, so he says.

They hang the man and flog the woman
That steal the goose from off the common,
But let the greater villain loose
That steals the common from the goose.

The Law demands that we atone
When we take things we do not own
But leaves the lords and ladies fine
Who take things that are yours and mine.

The poor and wretched don’t escape
If they conspire the law to break;
This must be so but they endure
Those who conspire to make the law.

The law locks up the man or woman
Who steals the goose from off the common’
And geese will still a common lack
Till they go and steal it back.

Peter Barnes’ new book: Climate Solutions

Friday, January 18, 2008 by Jonathan Teller-Elsberg
Categories: Commons, Energy, Environment, Inequality, News, Politics

My day job is as an assistant editor at Chelsea Green Publishing. I’ve been particularly excited about one book that we’ve been working on, Peter Barnes’ Climate Solutions: A Citizen’s Guide: What Works, What Doesn’t, and Why. Well, it’s just shipped from the printer, so now’s your chance to get a copy and check it out.

[update] I just came across a little BusinessWeek article focusing on Barnes’ ideas for a carbon dividend. They don’t get all the details quite right (all the more reason for you to read the book!) and they don’t mention the book (curses!), but “cap-and-dividend” just might be turning into a powerful and politically relevant meme.

Candidates with hairstyles on economic policy

Tuesday, January 15, 2008 by Jonathan Teller-Elsberg
Categories: News, Politics

Paul Krugman has a NYTimes op-ed column on the economic policies of all the big-name presidential contenders. One of his final comments is, “on Sunday Mr. Obama came out with a real stimulus plan. As was the case with his health care plan, which fell short of universal coverage, his stimulus proposal is similar to those of the other Democratic candidates, but tilted to the right…. I know that Mr. Obama’s supporters hate to hear this, but he really is less progressive than his rivals on matters of domestic policy.”

A friend had sent me a link to Krugman’s column, and knowing that she’s been torn between backing Clinton or Obama I replied to her

Go Hillary! (Right?)

Or,

Go Barack! (Not right but Left!)

To which she replied

Haha, I don’t know…I mean, maybe slightly right on economic policy isn’t such a bad thing…? There sure are a lot of moderately right leaning economists…I just thought it was an interesting (and new) way to compare the candidates

To which I replied

No, slightly right on economic policy is bad. Slightly right on economic policy means slightly closer to:

  • ever-growing government deficits and/or slashed social services
  • ever-growing economic inequality
  • greater turbulence in the economy thus increasing risks of more frequent and deeper recessions
  • more frequent and larger government bailouts of high-risk corporate losses (see point above)
  • and a total ban on all cheese. [My friend loves cheese more than life itself.]

There are a lot of moderately right leaning economists because most economists have never been exposed to any genuinely left economic thinking and there’s a tendency for left leaning people who might otherwise become economists to instead become sociologists. They think Paul Krugman is a lefty when in reality he’s only mildly left leaning.

Just thought I’d share. Feel free to add more bullet points in the comments.

(And if you’re wondering about my mention of hairstyles in the title of this posting, just read Krugman’s column and you’ll see.)

Privatized social security–you can’t lose (even if you already have)

Tuesday, December 4, 2007 by Jonathan Teller-Elsberg
Categories: News, Politics, Taxes

Devilstower at DailyKos has done us the favor of a great analysis of the past few years experiment in privatized social security.

Congratulations, Citizen!
by Devilstower
Sun Dec 02, 2007 at 10:29:22 AM PST

Back on 2001, right after Inauguration Day, $10,000 of your Social Security funds were placed in a special private personal magic pony account where it would enjoy the explosive benefits of the our surging prosperity, and the Longest Peacetime Terra-fightin’ Expansion in HISTORY… History… history. All of this made possible by cutting taxes on the productive people at the top of the food chain and removing those regulations that prevented our financial institutions from using all their imagination in creating new ways to loan give… to give you money! We at the Treasury know there was some discussion about not going along with the president’s plan, but I think you’ll agree that what we’ve learned over the last seven years is that the president can do anything he wants and no one will do more than talk about stopping him. So we just did it! Say, why not send us a subpoena? That’d be a hoot!

Now, as we close in on the last year of this glorious wondertime, here’s a quick report on how your outsourced, privately-managed fund has done.

[cont’d]

Climate policy cont’d: Obama talking the talk

Wednesday, October 10, 2007 by Jonathan Teller-Elsberg
Categories: Commons, Energy, Environment, News, Politics

Barack Obama must have read the Jonathan Alter article in Newsweek, or maybe he shared the back of a taxi with Peter Barnes. Whatever the cause for his conversion, he’s now speaking a bit of the gospel.

Presidential hopeful Barack Obama on Monday called for reducing U.S. greenhouse gas emissions by 80 percent of the 1990 level by 2050. His proposal would force power companies and other businesses to pay for all their pollution.

He proposed a modified “cap and trade” approach to reducing emissions that would require businesses to buy allowances to pollute, creating an incentive to reduce energy usage.

Under a traditional cap and trade system, power plants or businesses that exceed pollution caps must buy or trade for additional capacity, generally from plants that have taken steps to reduce their emissions. Unlike some of his rivals, Obama said he would auction all allowances rather than grandfathering some to big emitters such as oil and coal companies.

“No business will be allowed to emit any greenhouse gases for free,” he said. “Businesses don’t own the sky, the public does, and if we want them to stop polluting it, we have to put a price on all pollution.”

Sweetness. Of course, Obama is still listed as a co-sponsor of Lieberman’s “big business owns the sky, so give allowances for free to the big emitters” bill, so we’ll have to see what he does in terms of walking the walk. But for all my cynicism, hearing the right talk is an unexpected pleasure.

Meanwhile, I’m surprised to see this statement in the Washington Post “campaign 2008″ blog:

Most legislation offered to reduce carbon emissions takes this form [cap total emissions and allow trading of allowances within that limit], even though many economists believe a carbon tax would be simpler, if more difficult to sell politically.

Which “most” economists are they talking about? When you have a specific target you are trying to reach, taxes are a blunt and inaccurate instrument. Plenty of the nerdiest economists can whip up a quick model to show how a cap-and-trade system is more economically efficient (using the terms of market economics) than a tax system in this kind of scenario. Maybe someone needs to do a survey of economists or something. Anyhow, I badmouthed Congress the other day for being (or acting willfully) ignorant of simple economic principles.* But now, if the Washington Post is right, I’ve got to badmouth “most economists” and give credit to the politicians for getting this one right.

*”which is so Econ 101 it’s plain pathetic that most of Congress seems to be dismissing it out of hand

Lieberman climate bill: “worse than nothing”

Friday, October 5, 2007 by Jonathan Teller-Elsberg
Categories: Commons, Energy, Environment, News, Politics, Social/Solidarity Economy

The other night I attended a presentation by Peter Barnes at Vermont Law School. He was talking about different possible policies Congress might pursue to address global warming. Barnes is a persuasive advocate for a specific form of cap-and-trade on greenhouse gases, wherein the limited permits for emitting greenhouse gases are auctioned off and the revenue that comes in from the auction is then distributed on an equal per-person basis to everyone in the country. More on that in a moment (or see Jonathan Alter’s nail-on-the-head article in Newsweek).

I’d heard about Barnes proposal before–in fact, Nancy Folbre, James Heintz, and I used it as the basis for a bit of the Field Guide to the US Economy. What I hadn’t realized was that there is currently legislation working its way through Congress that would implement a different variation of cap-and-trade on greenhouse gases. The leading version is Joe Lieberman’s S.280 in the Senate and the near-identical bill fostered by John Olver, H.R.620, in the House. (Part of my ignorance stems from the recent birth of my daughter Susannah. I haven’t been keeping up with the news very much.) (But she sure is cute!)

“Wow,” you might be thinking, “Congress might actually pass a bill that deals seriously with global warming. Will miracles never cease?” Well, um, don’t get too excited just yet.

Cheap justice (habeus corpus too expensive for GOP)

Sunday, September 23, 2007 by Jonathan Teller-Elsberg
Categories: Fiscal Policy, Militarism, News, Politics, Prisons

My wife and I wrote a letter to the editor of our local paper yesterday. Out of respect for the paper’s request that submitted letters be otherwise unpublished, I won’t copy it here, but I will spell out some of what we were writing about.

So it started with an article about the recently successful filibuster by Senate Republicans, to prevent a vote on a bill that would allow Guantanamo Bay detainees, and other prisoners in the “war on terror,” to have access to the court system for review of their cases; that is, to return to them the right of habeus corpus that was stripped in previous legislation. (We read it in our local Valley News, but it was originally from the Washington Post.)

A Republican filibuster in the Senate yesterday shot down a bipartisan effort to restore the right of terrorism suspects to contest in federal courts their detention and treatment, underscoring the Democratic-led Congress’s difficulty with terrorism issues.

The detainee rights amendment was an effort to reverse a provision in last year’s Military Commissions Act that suspended the writ of habeas corpus for terrorism suspects at the military detention facility at Guantanamo Bay, Cuba, and other offshore prisons.

The authors of last year’s bill said that advocates of such rights would open the federal courts to endless lawsuits from the nation’s worst enemies. “To start that process would be an absolute disaster for this country,” said Sen. Lindsey O. Graham (R-S.C.), an Air Force Reserve lawyer who was instrumental in crafting the provision in question in last year’s bill. …

NPR: “Stuck and Suicidal in a Post-Katrina Trailer Park”

Wednesday, August 8, 2007 by Jonathan Teller-Elsberg
Categories: Class, Inequality, Labor, News, Politics, Unemployment

I try to follow the rule that blog posts should be more than just a “hey, check this out,” and a link. But I guess some rules are made to be broken. I don’t have much to say about this, but it is definitely worth listening to.

NPR.org, August 8, 2007 · The first morning of my visit to Scenic Trails, I was walking the path between some trailers when I bumped into a man named Tim Szepek. He was young, tall, and solidly good-looking. I asked if I could speak to him for a moment and he agreed. We found a spot of shade beneath a tree, and I started with what I considered a casual warm-up.

“What’s it like to live around here?” I asked.

“Well,” he replied, “I’ll be honest.”

“Ain’t a day goes by when I don’t think about killing myself.”

And so began my time in Scenic Trails, a FEMA trailer park deep in the Mississippi woods where 100 families have lived in near isolation for close to two years.

[cont’d and audio versions]

Right-to-Know: No-Bid Federal Contracts and Other Federal Spending

Monday, July 16, 2007 by mash
Categories: Fiscal Policy, Militarism, News, Politics, Taxes

FedSpending.org is a new website sponsored by effective OMB watchdog organization and Right-to-Know enforcer OMBWatch.org, which keeps an eye on the deregulatory manias of recent administrations. The new FedSpending.org website allows visitors to track Federal grants and contracts using various search criteria, e.g., location of the recipient (how about “Halliburton”), place of performance (try “Iraq”), sponsoring agency (”Defense”), and whether or not the contract was open to competitive bidding.

The Federal government was supposed to produce such a website itself, but Senator T. Stevens (Alaska) put a secret hold on the legislation. Although the hold was eventually withdrawn, the government still has not come up with the promisted user-friendly database.

Here’s the Halliburton search. Notice that you can refine the search by asking for more years and more detail.

Leave comments that describe your searches.  Ethanol?  Pharmaceuticals?

US Social Forum well under way

Thursday, June 28, 2007 by Tom Masterson
Categories: News, Political Economy, Politics

Just a quick note from Atlanta. It’s the end of the second day of the first US Social Forum. Due to travel ‘difficulties’,  I was not here yesterday. My spies on the ground tell me the march yesterday morning to kick off the Social Forum was 10 to 20 thousand people strong. Always hard to say, exactly, but a quick examination of the program (with over fifty workshops and panels going on at once for three days) and taking in the attendance at the panels I’ve attended, and just the sheer number of people on the streets of downtown Atlanta with their USSF ID badges, this is clearly the largest such gathering I’ve ever seen in the US. Thousands of people together to discuss and strategize a different US, something so necessary for the world as a whole, and no less so for us US’ers.

And the conversations happening go far beyond simple critiques of today’s neoliberal capitalism (too easy, anyway). They’re talking about concrete alternatives that are working on the ground now, and strategizing about scaling them up going forward. Of course there’s still a long way to go, but this forum represents a most welcome development: the coming together of disparate ’single-issue’ groups to hammer out common ground and devise strategies to move forward as one. I’m sorry you’re not here!

More specifics later, must sleep….

Socialized Medicine: America’s best health-care organization?

Saturday, June 23, 2007 by mash
Categories: Econ-Atrocity / Econ-Utopia, Healthcare, News, Politics

The 14,500 doctors and 58,000 nurses of this health-care organization serve 7.6 million enrollees, delivering care that outperforms both commericial insurance and Medicare–let alone poor, underfunded Medicaid–on a host of indicators of quality of process and outcome. While Medicare costs increased from $5,000 to $6,800 (36 percent) per patient-year between 1996 and 2004, its costs stayed constant at $5,000 per patient-year. And the patients receiving this high-quality, moderate-cost care are disproportionately poor and disabled.

Is it Kaiser Permanente? Is it a new for-profit chain of health clinics? No, it’s the Veterans Health Administration (VHA).

Econ-Utopia: The Bloodless Revolution, part 1 of 2: A review of Peter Barnes’ CAPITALISM 3.0

Wednesday, June 20, 2007 by Center for Popular Economics
Categories: Books, Class, Commons, Econ-Atrocity / Econ-Utopia, Energy, Environment, Inequality, News, Political Economy, Politics, Social/Solidarity Economy

Jonathan Teller-Elsberg, CPE Staff Economist

A few weeks ago, CPE Staff Economist Jerry Friedman wrote an Econ-Atrocity reviewing Bill McKibben’s new book, Deep Economy. Though he says McKibben “has written a clear attack on much of what ails us,” Friedman nonetheless criticizes McKibben for approaching the environmental and social problems of the day from an individualist perspective. For all that McKibben wants to promote and revive “community,” he has the attitude (says Friedman) of a “personal Salvationist . . . [who thinks that] the enemy [is] ourselves: we use too much, waste too much, want too much; and the only salvation for the environment is to change our preferences, use less, recycle more, and choose to live simply.” What McKibben misunderstands or ignores, Friedman argues, is the power of social institutions to drive behavior, regardless of the desires and seemingly free choices of individuals.

I think that Friedman will find solace in Peter Barnes’ recent book, Capitalism 3.0: A Guide to Reclaiming the Commons, since Barnes’ approach is definitively institutional. The problem, according to Barnes, is that the structure of the economy and society leave too much power in the hands of corporate capitalism. Even if all the CEOs and boards of directors and politicians were replaced with kind-hearted souls like McKibben, we would still face pretty much the same issues of environmental decay, economic inequality, and other social ills—the logic of capitalism and the legal structure of private property rights force the leaders of corporations to do what they currently do. He learned this from personal experience as co-owner and manager of several business ventures, most famously Working Assets (a telephone and credit card company that donates one percent of gross revenues to progressive charitable organizations). “I’d tested the system for twenty years, pushing it toward multiple bottom lines [that consider social and environmental impacts in addition to profit concerns] as far as I possibly could. I’d dealt with executives and investors who truly cared about nature, employees, and communities. Yet in the end, I’d come to see that all these well-intentioned people, even as their numbers grew, couldn’t shake the larger system loose from its dominant bottom line of profit.” (Ironically, Bill McKibben is quoted on the front cover of Capitalism 3.0 helping to promote Barnes’ book.)

Econ-Atrocity: The economics, and the politics, of environmentalism

Friday, April 20, 2007 by Center for Popular Economics
Categories: Books, Econ-Atrocity / Econ-Utopia, Environment, History, News, Political Economy, Politics, Pop Culture

By Gerald Friedman, CPE Staff Economist

At the time of the first Earth Day, April 22, 1970, the Environmental Movement straddled two approaches to addressing environmental problems, approaches rooted in two alternative theories. Senator Gaylord Nelson of Wisconsin proposed the first Earth Day to “force this issue onto the political agenda,” to promote changed government policy to protect the environment. But many of the 20 million Americans who took part in this first Earth Day were deeply suspicious of organized politics or state action. “Personal salvationists,” they blamed environmental troubles on our weaknesses as individuals. Instead of failed social policy, the enemy was ourselves: we use too much, waste too much, want too much; and the only salvation for the environment is to change our preferences, use less, recycle more, and choose to live simply.

Twenty seven years later, the Environmental Movement confronts the same division between personal salvation and political action, a division nicely illustrated by a new book, Bill McKibben’s Deep Economy. A prominent environmentalist, McKibben has written a clear attack on much of what ails us; but he misses the underlying cause of these ills and, therefore, his prescription for remedial action is necessarily off. In many ways, a pleasure to read, the book also left me so frustrated that I threatened to throw it against the wall.

Report from CBPP on taxing below-poverty-line families

Thursday, March 29, 2007 by Jonathan Teller-Elsberg
Categories: Fiscal Policy, News, Politics, Taxes

This just came out a couple days ago. It even crossed the desk of Rush Limbaugh, who used it as an opportunity to recommend increasing taxes on those below the poverty line. Rush, egalitarian that he is, feels it is unfair for people with low-incomes to avoid sharing equally in the funding of the state. Har!

THE IMPACT OF STATE INCOME TAXES ON LOW-INCOME FAMILIES IN 2006
By Jason Levitis

Summary

Poor families in many states face substantial state income tax liability for the 2006 tax year. In 19 of the 42 states that levy income taxes, two-parent families of four with incomes below the federal poverty line are liable for income tax. In 15 of the 42 states, poor single-parent families of three pay income tax. And 29 of these states collect taxes from families of four with incomes just above the poverty line.

Some states levy income tax on working families in severe poverty. Six states — Alabama, Hawaii, Indiana, Michigan, Montana, and West Virginia — tax the income of two-parent families of four earning less than three-quarters of the poverty line such families. All of these states except Indiana also tax the income of one-parent families of three earning less than three-quarters of the poverty line.

In some states, families living in poverty face income tax bills of several hundred dollars. A two-parent family of four in Alabama with income at the poverty line owes $573 in income tax, while such a family in Hawaii owes $546, in Arkansas $427, and in West Virginia $406. Such amounts can make a big difference to a family struggling to escape poverty. Other states levying tax of more than $200 on families with poverty-level incomes include Indiana, Iowa, Michigan, Montana, New Jersey, and Oregon. In 2006, the federal poverty line for a family of four was $20,615, and the line for a family of three was $16,079.

States’ tax treatment of low-income families for 2006 has improved in some states since 2005 but gotten worse in others. Between 2005 and 2006, Oklahoma and Oregon reduced the income tax liability of poor families, Delaware entirely stopped taxing the incomes of poor families of three, and Virginia entirely stopped taxing the income of poor families of four. But four other states increased their taxes on poor families by 25 percent or more, and New Jersey began taxing poor families of four for the first time since 1998. The reason for these tax increases is that provisions designed to protect low-income families from taxation — including standard deductions, personal exemptions and low-income credits — were not increased to keep up with inflation. Overall, there was virtually no change this year in the number of states levying income taxes on families with incomes below the poverty line.

The outlook for the future is somewhat better. A number of states have recently enacted significant reforms that will reduce taxes on low-income families. Between 2007 and 2010, Alabama, Arkansas, Hawaii, Michigan, Oklahoma, Oregon, and West Virginia each will improve their income tax treatment of the poor. In Arkansas, Michigan, Oklahoma, and West Virginia, the changes will wipe out or dramatically reduce tax liability that now costs poor families hundreds of dollars. Overall, the number of states taxing poor families of four could decline from 19 to 16. And quite a few other states are currently considering similar measures.

Taxing the incomes of working-poor families runs counter to the efforts of policymakers across the political spectrum to help families work their way out of poverty. The federal government has exempted such families from the income tax since the mid-1980s, and a majority of states now do so as well.

Eliminating state income taxes on working families with poverty-level incomes gives a boost in take-home pay that helps offset higher child care and transportation costs that families incur as they strive to become economically self-sufficient. In other words, relieving state income taxes on poor families can make a meaningful contribution toward “making work pay.”

States seeking to reduce or eliminate income taxes on low-income families can choose from an array of mechanisms to do so. These mechanisms include state Earned Income Tax Credits (EITCs) and other low-income tax credits, no-tax floors, and personal exemptions and standard deductions that are adequate to shield poverty-level income from taxation. Some states go beyond exempting poor families from income tax by making their EITCs or other low-income credits refundable. These policies provide a substantial income supplement to families struggling to escape poverty, but they are relatively inexpensive to states, since these families have little income to tax.

Despite some progress, there remains much to do before state income taxes adequately protect and assist families working to escape poverty.

Farm Bill and other rural affairs

Friday, March 9, 2007 by Jonathan Teller-Elsberg
Categories: Agriculture/Food, Inequality, News, Politics

The latest (March 2007) newsletter from the Center for Rural Affairs has several good articles, mostly in response to the proposed Farm Bill and the President’s proposed federal budget now before Congress. [Note: once the next newsletter comes out, the link to this one will change and you’ll be able to find it through their newsletter archives.] And as usual, the “Corporate Farming Notes” are worth following. Some examples:

Care Talk

Wednesday, February 28, 2007 by nfolbre
Categories: Fiscal Policy, Gender, News, Politics, Taxes

A sweet week for family policy in the print media. Don’t miss Ruth Rosen’s cover article on “The Care Crisis” in The Nation of March 12, 2007 OR the special report entitled “The Mother Load” in The American Prospect of March 2007, with contributions by Heather Boushey and Janet Gornick, among others. Both magazines insist that creative feminist family policy ideas should move to front and center-left of the Democratic party agenda.

First, a confession. I am a virgin blogger so I may not get the links–or the lingo–quite right. But here goes:

What good is the CIA?

Tuesday, February 27, 2007 by Jonathan Teller-Elsberg
Categories: History, Militarism, News, Politics

The fact that so much of what the “intelligence” community does is done in secret makes it a little hard to judge the worth of their efforts. But here are a few things to consider.

1) When they do accomplish things, it often turns out badly. Very, very badly.

2) When they don’t accomplish things, the bad results are avoided perhaps only by the grace of God (and the more cool-headed minds that stand between the U.S. intelligence community and whatever it is they are trying to accomplish). Case in point: intelligence on Iran’s nuclear programs turns out to be pretty much a bunch of junk.

Speaking of which, I liked Alexander Cockburn’s recent column on selling bridges to the New York Times. (Full column available to Nation subscribers only, but this intro is a nice taste.)

Econ-Atrocity: The Perils of Cheap Corn

Friday, February 23, 2007 by Center for Popular Economics
Categories: Agriculture/Food, Consumption, Econ-Atrocity / Econ-Utopia, Environment, Fiscal Policy, Healthcare, News, Political Economy, Politics

By Heidi Garrett-Peltier, CPE Staff Economist

You are what you eat. And according to Michael Pollan, author of The Omnivore’s Dilemma, that means we’re corn. Corn has now made its way into our diet in the form of fillers, sweeteners, oils, alcohols, pills, and breakfast cereals, not to mention of course the indirect path it takes through animal feed. Why should we care? Because cheap corn has been linked to obesity, and obesity will soon overtake tobacco as the leading cause of preventable death.

Econ-Utopia: The Northeast’s Regional Greenhouse Gas Initiative

Friday, February 9, 2007 by Center for Popular Economics
Categories: Commons, Econ-Atrocity / Econ-Utopia, Environment, Massachusetts, News, Politics

By Matthew Riddle, CPE Staff Economist

The Regional Greenhouse Gas Initiative, or RGGI, grabbed headlines in Massachusetts recently when Governor Deval Patrick signed onto it, committing Massachusetts to a cut in its emissions of greenhouse gasses from power plants, and reversing Mitt Romney’s decision to abandon the agreement. In addition to rejoining RGGI, Patrick also outlined some proposals for its implementation, which may prove to be even more significant than his decision to join.

Mutually assured hypocrisy w/r/t Iran’s nuclear weapons

Thursday, February 1, 2007 by Jonathan Teller-Elsberg
Categories: Militarism, News, Politics

This morning’s reports on French President Chirac’s statement that, according to the NYTimes,

“what is dangerous about this situation [Iran acquiring a nuclear bomb] is not the fact of having a nuclear bomb,” he said. “Having one or perhaps a second bomb a little later, well, that’s not very dangerous.

“But what is very dangerous is proliferation. This means that if Iran continues in the direction it has taken and totally masters nuclear-generated electricity, the danger does not lie in the bomb it will have, and which will be of no use to it.”

Mr. Chirac said it would be an act of self-destruction for Iran to use a nuclear weapon against another country.

“Where will it drop it, this bomb? On Israel?” Mr. Chirac asked. “It would not have gone 200 meters into the atmosphere before Tehran would be razed.”

There’s no doubt that this represents lame politics on Chirac’s part, since, if this is his true belief, he shouldn’t have been suggesting otherwise before now (or after, with his bungled attempts at retraction).

Econ-Utopia: Greenbacks for Green Energy

Thursday, January 25, 2007 by Center for Popular Economics
Categories: Econ-Atrocity / Econ-Utopia, Energy, Environment, News, Politics

By Jonathan Teller-Elsberg, CPE Staff Economist

With Al Gore on Oprah giving his “inconvenient” PowerPoint presentation, new reports of melting ice sheets and rising sea levels, and the release of the British government’s Stern Review, which is the latest major estimate of the economic costs of climate change, the issue of global warming is becoming a part of mainstream politics and kitchen-table conversations. Since the burning of fossil fuels (oil, natural gas, and coal) is the main source of human-caused warming, the need for alternative forms of energy is clear.

On Carter on Israel, Palestine, and Apartheid

Thursday, December 28, 2006 by Jonathan Teller-Elsberg
Categories: Books, News, Politics, Pop Culture

Any present or past President has got to be used to being scorned, so the hue and cry now erupting over Jimmy Carter’s new book on the Israeli-Palestinian misery can’t be terribly surprising for him. I haven’t yet had a chance to read the book and so am not in a position to endorse or reject or somewhere-in-the-middle it. Still, some of the reaction is so clearly based on attacking Carter himself, rather than the content of his book–indeed it seems to be attacking Carter instead of attacking his arguments–and that’s just plain wrong. An example.

Some thoughts on 2006

Sunday, November 12, 2006 by Center for Popular Economics
Categories: Massachusetts, Militarism, News, Politics, Race

The 2006 Election(s)
By John J. Fitzgerald

The 2006 Election cycle has come and gone. Just like the 2006 Hurricane season it has not performed exactly as predicted, but it has left some changes in its wake. We might actually have experienced several different elections rather than just one. A lot of decision-making got formalized on the 7th of November.

Here are some of the highlights:

Econ-Atrocity: Will it matter if the Democrats win?

Friday, November 3, 2006 by Center for Popular Economics
Categories: Econ-Atrocity / Econ-Utopia, News, Politics

By Gerald Friedman, CPE Staff Economist

As I write this, it appears likely that after 12 years in the wilderness, the Democrats will capture a majority in the House of Representatives and will make substantial gains in the Senate. (My favorite objective source, http://www.electoral-vote.com/, gives the Democrats a 225-208 lead in the House and a gain of 4 Senate seats to move to 49-51 in the upper body.) After 6 years of almost uninterrupted one-party rule, and the worst government this country has endured since the 1850s, we can only rejoice at Democratic gains as, if nothing else, a sign of a return to sanity after the trauma of September 11, 2001. But, beyond this, what can we expect from the Democrats? Can we anticipate a reversal of Bushism, and a renewed push for social progress?

Congress Fails to Investigate or Punish War Profiteering

Wednesday, October 25, 2006 by Center for Popular Economics
Categories: Fiscal Policy, Militarism, News, Political Economy, Politics

The following post is the text of a radio commentary I (Mike Meeropol) delivered over WAMC radio in early October.

Did you know that the US Congress has rejected efforts to punish, investigate and criminalize war profiteering?

Yes, that’s right. This past February, the House on a mostly party-line vote rejected an effort to forbid expenditures from going to any contractor, “…if the Defense contractor audit agency has determined that more than $100,000.000 of the contractor’s costs involving work in Iraq … were unreasonable.”[1]

Meanwhile, the Senate on an equally party-line vote, rejected an amendment to an appropriation bill “to prohibit profiteering and fraud relating to military action, relief and reconstruction…”[2]

What’s going on here?

Angry response to Kerry Healey’s exploitation of racism in her attack ads on Deval Patrick

Wednesday, October 25, 2006 by Center for Popular Economics
Categories: News, Politics, Race

Dear Readers — the following is an email message I sent to all fellow faculty at Western New England College where I teach. I am including it here based on an invitation I received to share it with all readers of this Blog. I am reproducing it here without editing.

Mike Meeropol (econ Prof, Western New England College, Springfield, MA)

I am writing this e-mail because I am thoroughly disgusted with the effort to “Willie Horton” the candidacy of Deval Patrick for Governor of Massachusetts. I hope some of you inclined not to read this will force yourself to do so … Even people who were not inclined to support Mr. Patrick for Governor should respond to the vicious advertising campaign.

How to vote early and often — legally!

Monday, October 23, 2006 by Center for Popular Economics
Categories: Massachusetts, News, Politics

My Recommendations for Election 2006
By John J. Fitzgerald

One of the most patriotic things that anyone, who loves this country, can do in the next few weeks has to be focused on voting. (I know that voting is not the only road for activists, but it does have some value.)

I would like to make a few recommendations to enlarge the effect of voting in 2006.

Econ-Utopia: Environmental Tax Shifting

Wednesday, June 28, 2006 by Center for Popular Economics
Categories: Consumption, Econ-Atrocity / Econ-Utopia, Energy, Environment, News, Political Economy, Politics, Taxes, Unemployment

By Jonathan Teller-Elsberg, CPE Staff Economist

In the U.S., talk of tax reform usually means debates about taxes on income and wealth. A little less common are discussions of flat taxes and a shift from payroll, income, investment, or property taxes to consumption taxes—that is, a federal sales tax.

We’ve seen the miserable results of lowering taxes on the rich, and we’ll be dealing with the massive government debts for decades to come. Flat taxes are simply another way to lower taxes on the rich, under the guise of simplifying the tax system. (To be sure, simplifying taxes is not exactly something to dismiss out of hand—the system is far more intimidating than it should be.) The supposed advantage of a shift to consumption taxes is that the shift away from payroll and/or other taxes should lead to more jobs. This is because a payroll tax makes it “expensive” for a business to have an employee. If the payroll tax is reduced or eliminated, the business will have more money available to hire additional workers. The problem with consumption taxes is that they tend to be regressive—meaning that they fall hardest on lower-income members of society.

Another type of tax reform that deserves more attention is the environmental tax shift (ETS), also known as the green or ecological tax shift. The idea here is to increase taxes on activities that result in environmental damage and use the money generated to reduce other taxes by the same amount. As with the consumption tax idea, most proposals center around reducing payroll taxes.

Econ-Atrocity: What’s missing from the new bankruptcy laws?

Wednesday, March 8, 2006 by Center for Popular Economics
Categories: Class, Consumption, Econ-Atrocity / Econ-Utopia, Healthcare, News, Politics

By Helen Scharber, CPE Staff Economist

The new national bankruptcy laws that went into effect in late 2005 prompted a big stir, not to mention a record-setting level of bankruptcy filings just before the laws changed. What is it about the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 that caused so much controversy? Like its Orwellian cousins the Clear Skies and Healthy Forest Initiatives, this act—whose very title suggests it will enhance consumer protections—does anything but. Indeed, the problems with this new law have much to do with what it does not include.

Econ-Atrocity: The King is Dead! Long Live the King!

Wednesday, February 1, 2006 by Center for Popular Economics
Categories: Econ-Atrocity / Econ-Utopia, Monetary Policy/Federal Reserve, News, Political Economy, Politics, Unemployment

by Jonathan Teller-Elsberg, CPE Staff Economist

After eighteen years holding the reigns of power, Alan Greenspan has finally ended his career as chair of the Board of Governors of the U.S. Federal Reserve, as a result of legal limitations on the length of his term. As the person in charge of monetary policy in the U.S., Greenspan was, by some accounts, the single most powerful person in the world economy. His term as chair coincided with the early 1990s recession that contributed to George H. W. Bush’s loss to Bill Clinton; continued through the longest continuous period of economic growth in U.S. history; included the multi-billion dollar bailout of the Long-Term Capital Management hedge fund in 1998; persisted through the internet-inflated stock market boom and bust as the new century began; and has finished in the current period of feeble recovery.

Econ-Atrocity {special History of Thought series} Resurrecting the Radical Keynes

Wednesday, April 7, 2004 by Center for Popular Economics
Categories: Econ-Atrocity / Econ-Utopia, Fiscal Policy, History of Thought, Monetary Policy/Federal Reserve, News, Political Economy, Politics

By Jim Crotty, CPE Staff Economist

The Keynesian economics that Paul Samuelson popularized in the United States after World War II was a sanitized version of the radical critique of capitalism offered by Keynes himself. John Maynard Keynes’s deep-seated attack on free-market economics led him to call for direct government control of the lion’s share of investment spending, industrial policy, a confiscatory wealth tax, strict control over cross-border financial flows and managed trade. But US “Keynesians” defanged his attack, arguing that if the government regulated interest rates and budget deficits, all other decisions could be left to market forces.

In the aftermath of World War I, the British economy experienced sluggish growth and high unemployment until war preparations began in the late 1930s. The conventional analysis of the time was that high unemployment was caused by high wages that priced British products out of the global markets they traditionally dominated. The conventional solution was to smash the
strong unions in these industries.

Keynes argued that the correct policy was for the government to initiate a large long-term program of government infrastructural investment. This would reduce unemployment not only through government employment, but also by the spending of the newly employed - the famous Keynesian “multiplier” effect that has puzzled generations of students. Focus on large-scale government investment was not just a post-war expedient for Keynes. He supported this policy until his death in 1946.

Keynes believed that free-market capitalism was subject to extreme instability primarily because business investment spending was inherently volatile. To build a factory, a firm must gamble that the future profits from the factory will more than compensate for its cost. But firms cannot know what future profits will be. As Keynes put it, “About such matters, we simply do not know.” Therefore, investment can only be based on hunches or guesses about the future, and these are profoundly influenced by waves of optimism and pessimism in market psychology. Boom euphoria leads to over-investment and excess capacity, while fear of loss in the downswing causes investment to plummet. Keynes considered stock markets to be “gambling casinos” whose instability only made investment more volatile.

Keynes thought that there were almost unlimited opportunities for productive state investment - in education, housing, transportation, utilities, health, culture and so forth. He believed that if the government could keep public investment on a steady growth path, this would provide a center of gravity for private profit expectations that would drastically lower private investment instability. In 1928, he proposed a “National Investment Board” to plan and control a massive investment program, arguing that “an era of rapid progress in equipping the country with all the
material adjuncts of modern civilization might be inaugurated which would rival the great Railway Age of the nineteenth century.”

In 1935 in The General Theory he said: “I expect to see the state … taking an ever greater responsibility for directly organizing investment.” In 1943 he argued that “if the bulk of investment is under public or semi-public control and we go in for a stable long-term programme, serious fluctuations are less likely to occur.” Keynes specifically rejected the idea that government should rely on changing interest rates and budget deficits to control instability, the macro policy attributed to him by Samuelson.

Keynes understood that capitalists and renters would be likely to ‘run away’ from Britain in reaction against his program, causing skyrocketing interest rates and plummeting investment. To prevent this, he called for an ironclad regime of government control of financial flows into and out of Britain, and saw to it that every country was given the right to control capital movements by the Bretton Woods Agreement that created the International Monetary Fund in 1944.

The economic prospects of the majority of people would be greatly improved if government policy followed Keynes’ more radical vision, rather than the timid version promoted in nearly all college textbooks.

Reference:

Jim Crotty. “Was Keynes a Corporatist: Keynes’s Radical Views on Industrial Policy and Macro Policy in the 1920s,” Journal of Economic Issues, September 1999. [pdf]

Keynes’ most famous book, The General Theory of Employment, Interest, and Money, is available online.

(c) 2004 Center for Popular Economics

Econ-Atrocities are a periodic publication of the Center for Popular Economics. They are the work of their authors and reflect their author’s opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.

Econ-Atrocity: Bad for Children, Bad for the Economy

Wednesday, June 25, 2003 by Center for Popular Economics
Categories: Class, Econ-Atrocity / Econ-Utopia, Education, Fiscal Policy, Inequality, News, Politics

(6/25/03)
By Anita Dancs, Staff Economist for the Center for Popular Economics and Research Director of the National Priorities Project

With great fanfare, President Bush signed the ‘No Child Left Behind Act’ in 2001. Contrary to Administration claims, this Act will leave many children behind. The Act sets out requirements on public schools in an effort to raise student achievement, but it also promises additional funding. Despite these promises, the Bush Administration’s proposed budget for the coming year would underfund the Act by $7 billion. State and local governments mired in fiscal crises in recent years, will have to find ways of meeting the Act’s requirements while also dealing with rising Medicaid costs, underfunded homeland security mandates, and neglected roads.

Econ-Atrocity: Beyond good intentions: Is U.S. newly-found interest in Africa real?

Wednesday, January 22, 2003 by Center for Popular Economics
Categories: Econ-Atrocity / Econ-Utopia, Economic Development, Globalization, News, Political Economy, Politics

By Léonce Ndikumana, Assistant Professor, University of Massachusetts, Amherst

American interest in Africa has been traditionally peripheral, opportunistic at best. In the past, aid to African countries supported client regimes that the United States and its allies needed to prevent the expansion of communism on the continent, as in the case of former Zaire under the late Mobutu Sese Seko. In these circumstances, the objective of economic aid was not economic development of African countries, but instead aid often contributed to propping up dictatorships that catered to the interests of the West.

South Dakota Econ-Utopia: Corporate Farms Lose in the Voting Booth

Wednesday, August 21, 2002 by Center for Popular Economics
Categories: Econ-Atrocity / Econ-Utopia, Economic Democracy, News, Politics, Social/Solidarity Economy

By Jonathan Elsberg, CPE Staff Economist

The voters of South Dakota have recently upheld one of the least known but most progressive set of laws in the land. Along with eight other Midwestern states, South Dakota restricts corporations’ ability to own or operate farms. In the case of South Dakota, this restriction was first legislated in 1974 (Title 47, Chapter 9A) and beefed up in 1998 through an amendment to the State Constitution (Article XVII, Sections 21-24), which boldly states that “No corporation or syndicate may acquire, or otherwise obtain an interest, whether legal, beneficial, or otherwise, in any real estate used for farming in this state, or engage in farming.”

Corporate interests attempted to water-down these restrictions with their proposed Amendment A. However, Amendment A was defeated in the June primary elections, meaning that South Dakota’s restrictions on corporate farming will remain intact for the time being.

This is good news for the family farmers of South Dakota, and the rural communities to which they belong. The number of family farms in the state has held steady since 1999, while in the rest of the country family farm have been in the decline. Representatives from the Stand Firm! Coalition (which opposed Amendment A) attribute at least part of this family farm maintenance to the restrictions on corporations. The principle of defending family farming from corporations was recognized by the state’s legislature when it past the 1974 Family Farm Act, which stated that “The Legislature of the State of South Dakota recognizes the importance of the family farm to the economic and moral stability of the state, and the Legislature recognizes that the existence of the family farm is threatened by conglomerates…and is jeopardized by downward vertical integration in farming.”

This idea is not merely theoretical or anecdotal. Researchers Dr. Rick Welsh and Dr. Thomas Lyson recently analyzed Census of Agriculture and Economic Census data to see if corporate farming restrictions have beneficial effects on the states that use them. They found that, in general, states with such laws suffered lower poverty and unemployment and had more farms realizing cash gains in their agriculture-based counties. Additionally, they found that the stronger the restrictions on corporate farming, the better (in general) the outcome for the communities involved.

Unfortunately, South Dakota’s anti-corporate farming laws are not in the free and clear just yet. Recently, U.S. District Judge Charles Kornmann ruled that the existing anti-corporate amendment to the state’s Constitution does not meet the requirements of the United States Constitution’s commerce clause. This ruling is being appealed to the U.S. Circuit Court, but if upheld, it will require South Dakotans to reformulate their laws in a way that protects family farms - as they have repeatedly shown they wish to do - while passing constitutional muster.

It should be noted that Judge Kornmann did not take issue with the right of South Dakota to restrict corporate agriculture. While ruling that that the anti-corporate statutes generally serve “a legitimate [i.e., constitutional] local purpose,” his judgment did find flaw with right-of-way access for utilities and with compliance with the Federal Americans with Disabilities Act. However, South Dakota law states that if any part of a statute is found unconstitutional, the entire statute is nullified. It was into this legal limbo that pro-corporate interests injected Amendment A. If needed, the existing anti-corporate statutes can easily be modified so that they comply with Judge Kornmann’s findings and also continue to protect family farmers and their communities.

Sources and additional information:

Center for Rural Affairs, “Amendment A Fails in South Dakota,” in the July 2002 issue of the CFRA Newsletter.

For additional information on corporate farming issues, see the CFRA’s “Corporate Farming and Market Access” page: www.cfra.org/issues/corporate.htm.

Fritz Herrick, “People victorious over agribusiness in South Dakota,” Madison, Wisconsin Independent Media Center, 6 June 2002 http://madison.indymedia.org:8081/front.php3?article_id=5312.

Argus (South Dakota) Leader editorial, “Amendment A defeat a step backward for S.D.,” 5 July 2002: www.southdakotaelections.com/Story.cfm?Type=Editorials&ID=291 .

Dr. Rick Welsh and Dr. Thomas A. Lyson’s article, “Anti-Corporate Farming Laws, the ‘Goldschmidt Hypothesis’ and Rural Community Welfare,” is available from the website of Nebraska’s “Friends of the Constitution” at www.i300.org/what’s_new.htm#anti_corp.

The full text of Title 47, Chapter 9A of the South Dakota Codified Statues can be read at http://legis.state.sd.us/statutes/Index.cfm?FuseAction=DisplayStatute&FindType=Statute&txtStatute=47-9A

The full text of Article XVII, Sections 21-24 of the South Dakota Constitution can be read at http://legis.state.sd.us/statutes/Index.cfm?FuseAction=DisplayStatute&FindType=Statute&txtStatute=0N-17

The full text of the proposed and rejected Amendment A can be read at www.state.sd.us/sos/2002/2002bqprimary.htm.

If you have access to the Lexis-Nexis online database, you can read Judge Kornmann’s decision. Click “Legal Research” –> “Federal Case Law” –> enter “south dakota farm bureau” into the Keyword box and change the Court drop-list to “District Courts,” then click the “Search” button. Judge Kornmann’s ruling is the first case returned: “S.D. Farm Bureau v. Hazeltine,” filed 17 May 2002.

(c) 2002 Center for Popular Economics

Econ-Atrocities are a periodic publication of the Center for Popular Economics. They are the work of their authors and reflect their author’s opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.