Archive

“Ferguson, whose research has shown that candidates who raise more money stand a much greater chance of winning election, added that “when you get that much money pouring into the election, it means that you have all these investors who decide which election is ‘worth it’ and that tends to pull even liberal democrats to the right. It is a somewhat subtle effect but a very real one and clearly an anti-democratic consequence of the system.” — Andrew Kennis

“Critics led by William Lazonick, economics professor emeritus at the University of Massachusetts Lowell, say buybacks starve companies of cash for innovation and worker pay, and favor executives aiming to jack up the stock prices because their compensation is increasingly stock-based. The buyback trend has become controversial since a 2014 article by Prof. Lazonick in the Harvard Business Review, “Profits Without Prosperity.” The S&P 500 companies that had been publicly listed from 2003 through 2012, he found, had spent amounts equal to 54% of their earnings for buybacks and 37% for dividends, leaving “very little for investments in productive capabilities or higher incomes for employees.” — Randall Smith

“If companies continue to prioritize maximizing shareholder wealth at the expense of other key stakeholders, and at the expense of investing in innovation, then the Green New Deal could reinforce long-standing income and wealth inequities and the decline in innovation in the U.S. economy (for an important example, Bill Lazonick and Matt Hopkins document how maximizing shareholder value minimized the strategic national stockpile for ventilators and personal protective equipment).” —Lenore M Palladino

“Now, in a powerful work of synthesis, economist Lance Taylor, assisted by Özlem Ömer of Nevsehir Haci Bektas Veli University in Turkey, has brought a new perspective to the discussion. Taylor is a rare figure among economists nowadays. Previously a professor at two of the established citadels of mainstream economics, Harvard University and MIT, he has spent the past generation at the New School for Social Research in New York City, and is deeply engaged with the Institute for New Economic Thinking. … The overriding message from Taylor’s work is the exact opposite of “trickle-down economics.” Reducing inequality will increase economic growth and productivity. But, at the end of the day, there is no magic bullet to reverse the impact of the structural transformation of the past 50 years. That, too, was driven by policy initiatives, the full implications of which many policymakers are only just now beginning to comprehend.” — William Janeway

“Rich economies have more resources to spare to prioritise saving lives. And Wolf reproduces the Institute for New Economic Thinking’s now famous chart that refutes the idea there is a “trade-off” between saving the economy and saving lives. On the whole, those states that prioritised saving lives also lost less economic output. China is the standout case. But it isn’t just about how rich an economy is. The same chart shows that the states that suffered the biggest losses of lives and output include Italy, Britain, Spain, and France. The US and Belgium aren’t far behind.” —Alex Callinicos

“A look around the world shows that so far no country has managed to effectively protect its risk groups when the number of infections is high - Sweden at the beginning of the pandemic or Switzerland in the second wave also had to pay for their special routes with many deaths. And if such a strategy fails, you have wasted valuable time and may find yourself confronted with an infection that is completely out of control. This would mean a collapse of the health system with all the ensuing consequences. This also includes immense damage to the economy. This is also confirmed by a study by the Institute for New Economic Thinking. Those who reacted belatedly or wavered between strategies not only had very high casualties, but were also the most damaging to their economies, it said. The authors cite Great Britain as a negative example.” — Klaus Wedekind

“The “go-hard/go-early and no regrets” approach of the Australian states has been vindicated by the Institute for New Economic Thinking (INET), a nonpartisan, nonprofit organisation established in the wake of the 2009 global financial crash.” …. “We must be ready to accept renewed restrictions, targeted shutdowns and border closures. As the INET report clearly demonstrates, the failure to act is much more costly than any temporary measures, such as those used in South Australia last month.” — Dennis Atkins

George Soros’ latest op-ed in the Project Syndicate reasserts his view how perpetual bonds could help the European Union overcome its deadlock on fiscal spending.

No one person or perspective holds the key to solving economic problems, says Jay Pocklington of the Institute for New Economic Thinking

The central challenge confronting us in the future of work is this: can we create a future where work exists for all who need one with fair rewards, or will we end up on the path of increasing displacement, leaving workers vulnerable, dispensable, and miserable?

Individual EU member states ought to issue perpetual bonds

The perverted dreams of western modernity and capitalism may be exhausting themselves, says author Eugene McCarraher. And that’s something to be thankful for.

“Actual experience, as opposed to cost-benefit analyses of theoretical alternatives, further strengthens the case for suppressing the disease fully, where feasible. A recent paper from the Institute for New Economic Thinking, To Save the Economy, Save the People First, suggests why. A chart (reproduced here) shows that countries have followed two strategies: suppression, or trading off deaths against the economy. By and large, the former group has done better in both respects. Meanwhile, countries that have sacrificed lives have tended to end up with high mortality and economic costs.” — Martin Wolf, The Financial Times

“To save the economy, you have to save people first, is the title of a paper by Alvelda, Ferguson and Mallery of the Institute for New Economic Thinking. This work groups countries into three categories, according to the response to the covid: those that gave priority to maintaining economic life; those who focused on taking care of health first and those who wanted to be placed in the middle, but did not do either one well. The best economic results correspond to those who prioritized health. They are countries that are in Asia and Oceania, mainly. The worst are in the other two groups. Those who did not define one or the other, got the worst of both worlds: many deaths and great economic damage. What can be done? Alvelda, Ferguson, and Mallery recommend targeted subsidies by regions and sectors hardest hit; guarantee income for workers in non-essential activities and subsidize health safety measures for all those who cannot stop. This means, among other things, public money to make public transport and some massive workplaces more sanitary. Subsidize supervision / surveillance measures in spaces where many people go: shopping centers and places of religious worship, for example.” — Luis Miguel Gonzalez, El Economista (translated from Spanish)

Carbon pricing still has the potential to be a powerful tool contributing to emissions reductions, but it is clearly no panacea.