Archive

By Stefano Sannino Secretary-General, European External Action Service (EEAS), Jutta Urpilainen EU Commissioner for International Partnerships, European Commission, Rohinton P. Medhora President, The Centre for International Governance Innovation (CIGI), Andrew Michael Spence Nobel Laureate of Economics, Co-Chair, Commission on Global Economic Transformation, Jayati Ghosh Professor of Economics, University of Massachusetts, Amherst, Andrea Renda (moderator) Senior Research Fellow, Head of GRID Unit, CEPS

How do we break free of the cycle of restrictive thinking which has plagued economics, and the world?

“Now it’s maybe particularly an Indian phenomenon because of the strong lockdown we had last year, but I think across the world what we’re seeing in fact is that people are trapped in poverty because of the lack of employment opportunities, lack of income support, they’re increase in indebtedness, and their earnings remain depressed. So in that sense the news is extremely bad. Also, we’re seeing huge dislocations in the labor market itself. People who finally came into the formal labor force and had some sort of formal protections are now becoming informalized or worse as is the case with women in India, just leaving the labor force. When one asks for example social cohesion what can one say –it is devastating for any kind of view of an inclusive growth process where we’re trying to encourage many people into gainful employment and to actually see their welfare rise. Of course, financial vulnerabilities have risen many fold as a result of that. In addition, one ought to underline that this thing isn’t going away. Right now in India we’re in the second wave which is quite devastating. There are the very simple and awful thoughts of just basic mortality. What it’s going to do to you know many people’s indebtedness, their ability to earn incomes because this is not limited in India for example only to let’s say the relatively elderly but across the population distribution. I think we’re just at the beginning of trying to of seeing what it will do for social cohesion or destruction more likely. I think we had a mild wave last year and what we’re going to see this year as a result… we have yet to see but it will be bad.” — Arjun Jayadev

“Ransomware demands have increased exponentially in the last six months, according to Melissa Hathaway, president of Hathaway Global Strategies and a former cybersecurity adviser to Presidents George W. Bush and Barack Obama. The average ransom demand is now between $50 million and $70 million, Hathaway said. While those demands are often negotiated down, she said companies are frequently paying ransoms in the tens of millions of dollars, in part because cyber insurance policies cover some or all of the cost. She estimated that the average payment is between $10 million and $15 million.” — Kartikay Mehrotra and William Turton, Bloomberg

“This survey gives a voice to US health care workers who have been on the frontlines of COVID-19,” David Michaels, a professor of environmental and occupational health at the George Washington University and former administrator of the Occupational Safety and Health Administration, said. “Health care workers have valuable first-hand knowledge about this pandemic and this report offers recommendations that could help keep the U.S. on a steady course now and in the future.” …. Michaels and Melissa Perry, a professor and chair of the Department of Environmental and Occupational Health, provided guidance in producing the report. The McElhattan Foundation and the Institute for New Economic Thinking provided financial support for the survey and the report.” — George Washington University

The plight of white blue-collar workers is well-known, but Blacks in that category were feeling the squeeze long before their white counterparts.

How once-promising Black upward mobility reversed course, and what can be done about it

“But COVID vaccines are by no means unique — most medicines developed and approved in the United States involve taxpayer investment. Between 2010 and 2019, every single new medicine approved by the Food and Drug Administration included taxpayer-funded research through NIH. Drug companies patent the drugs we pay to develop and then charge us exorbitant prices for them that increase every year — sometimes twice a year.” — Terry Minow, Missoulian

“[T]he U.S. Department of Justice should determine and make clear that paying a ransom is illegal,” Hathaway said in an article posted May 13 by the Institute for New Economic Thinking. “This step would likely force organizations to further invest in their security and ability to withstand and recover from an incident (i.e., increase their resilience). Categorizing ransom payment as an illegal activity would also clearly remove coverage for these types of payments from insurance policies,” Hathaway wrote.” — Charlie Mitchell, Inside Cybersecurity

Despite fear-mongering about the latest Consumer Price Index, unemployment remains elevated and stimulus is needed to prevent a collapse in demand

Despite fear-mongering about the latest Consumer Price Index, unemployment remains elevated and stimulus is needed to prevent a collapse in demand

“Larger dairy farms inevitably mean a system less geographically dispersed, larger environmental challenges with farm waste, and a less resilient system. The Institute for New Economic Thinking detailed these impacts in a recent report on the pandemic’s effects on dairy farmers, Spilt Milk: COVID-19 and the Dangers of Dairy Industry Consolidation: “The COVID-19 pandemic led to the collapse in commercial demand as restaurants, caterers, schools and other institutional customers were forced to close. Dairy plants serving supermarkets and grocery stores were already operating at close to full capacity when the coronavirus struck. Capital equipment specialized to produce for commercial customers were incapable of producing for consumers served by supermarkets or food banks. Some farmers had no choice but to dump milk.”[9] For the smaller dairy farmers, international (primarily Canadian) competition and price fluctuations are daily economic challenges.” — Charles Luke, Homeland Security Today … [9] Eileen Appelbaum and Jared Gaby-Biegle, “Spilt Milk: COVID-19 and the Dangers of Dairy Industry Consolidation,” Institute for Economic and Policy Research, August 15, 2020, https://www.ineteconomics.org/uploads/papers/WP_134-Appelbaum-and-Gaby-Biegel.pdf

“Among those contributions, recent works highlight the deep, radical revision of axioms considered cystic: that hysteresis, the permanence of high unemployment rates over time, is a basic condition to keep inflation under control. Professors Walter Paternesi, Davide Roamniello and Antonella Stirati have empirically demonstrated that this thesis is not permanent and that long-term unemployment can be reversed without a significant spike in inflation (https://www.ineteconomics.org/research/research- papers / on-the-non-inflationary-effects-of-long-term-unemployment-reductions). Another flagship of themainstream that can fall apart.” — Carles Manera, The Worker

“The former ambassadors were speaking on a panel discussion at the law economics policy conference titled “Strategic Patience and flexible policies: How India can rise to the China challenge” and organized by INET.” — BQ Desk, Bloomberg Quint

Ransomware gangs have been causing extensive damage. It’s time that the government takes them more seriously.

Lance Taylor’s New INET Paper

“The new acting Deputy Prime Minister for EU funds is called Atanas Pekanov. The young expert, who recently turned 30, is an economist at the Austrian Institute for Economic Research (WIFO) in Vienna, Austria, and a lecturer at the Vienna University of Economics and Business (WU Wien). … Member of the Young Researchers Initiative of the Institute for New Economic Thinking.” — Darik

“Political scientist Thomas Ferguson has documented how U.S. big business interests poured money into local and state elections to ensure positive support for their largely unpopular policies. What Ferguson calls “political investment” is the practice of spending serious sums on party competition to keep hand-picked, docile representatives in power.” — Duncan Cameron, Rabble

Can big data strengthen global inclusivity and trust?

An interview with young migrants living in Mali’s capital city of Bamako

And electric vehicles don’t do a lot better

“Pandemic management will also have to overcome the knotty issue of political economy. The blame game between the Union and state governments over an essential commodity such as oxygen is visible in court proceedings. We need a transparent mechanism that is perceived to be fair and trusted by all the stakeholders. Apart from dealing with the allocation of vaccines and other essential medical supplies such as oxygen, this body could suggest the financing pattern for sharing the expenditure on Covid management, including vaccine procurement. … Far too many lives have been lost to Covid. But as a challenge to India (and to humanity), it is certainly not an impossible task to manage the pandemic. But this can only happen effectively with cooperation, coordination, empathy, humility and scientific knowledge. It is not too late.” — Arjun Jayadev, Hindustan Times

“Just now read this fascinating interview by Janine Jackson of fair.org (Fairness & Accuracy In Reporting) with Lynn Parramore of the Institute for New Economic Thinking on how hedge fund managers are damaging American companies by pushing company managements to do stock buybacks. Basically, stock buybacks force up the price of a stock, allowing shareholders to make megabucks when they sell. Such buybacks were difficult until the Reagan administration loosened the regulations in 1982. Why are stock buybacks bad ? Because they divert money from research, from new investments and innovation, and from raising wages. The interview with Lynn Parramore goes into the details.” — Daily Kos

A low agreement between bibliometrics and peer review at the level of individual article indicates that metrics should not replace peer review at the level of individual article.

Restoring faith in governance and public action is itself a public good that would prepare us for a whole myriad of challenges on the horizon

“In their December 2017 paper, “Artificial intelligence, worker-replacing technological progress and income distribution,” the economists Anton Korinek, of the University of Virginia, and Joseph E. Stiglitz, of Columbia — describe the potential of artificial intelligence to create a high-tech dystopian future. Korinek and Stiglitz argue that without radical reform of tax and redistribution politics, a “Malthusian destiny” of widespread technological unemployment and poverty may ensue.” — Thomas B. Edsall, New York Times

“Researchers involved in a new study from Washington University say women could be in trouble financially for years to come because of significant job losses during the crisis. “We have to be somewhat concerned that the larger inequality effects of the current crisis could have these persistent impacts on wages and on career progress in all the groups that are disproportionately affected,” said Steven Fazzari, a professor of economics and sociology at Wash U who co-authored the study.” — Andrea Y. Henderson, St. Louis Public Radio NPR

Analyzing corporate conference calls reveals the way that countries perceive and spread risk through the global financial system

“Yet notable critics like Joseph Stiglitz and Jayati Ghosh, an economist at the University of Massachusetts Amherst, see woefully insufficient production by Western drug companies as a major roadblock to universal vaccination.” — Walden Bello, New York Times

Analyzing corporate conference calls reveals the way that countries perceive and spread risk through the global financial system

“Right after the CDC made this announcement, the president of the American Federation of Teachers, Randi Weingarten, sent a letter to the Biden administration, citing a study by the Institute for Economic Thinking. … The authors of the study are Dr. Deepti Gurdasani, who did much of the research for the study and is a clinical epidemiologist and statistical geneticist and senior lecturer at the William Harvey Research Institute in London; Dr. Phillip Alveldi, CEO and chairman of Brain Works Foundry Inc, a U.S.-based developer of artificial intelligence-enhanced health care technologies and services; and Thomas Ferguson, the director of research projects for the Institute for New Economic Thinking.” — Dennis Donohue, Santa Fe New Mexican

“Polluting companies tell us every day how they’re invested in the future; we’ve heard corporations en masse say, “Profits, what? We’re all about the people now!” There’s a certain amount of people-who-make-the-problem-pretending-they’re-the-solution that we can see through, but there’s still plenty going on behind the scenes. We’ll talk with Lynn Parramore, senior research analyst at the Institute for New Economic Thinking, about how hedge funds get in the way of the big changes all kinds of companies need to make to fight climate disruption.” — CounterSpin

“Today joined by Dr Arjun Jayadev, who is a Professor of Economics at the School of Arts and Sciences at Azim Premji University in Bangalore, India. He was previously Associate Professor of Economics at the University of Massachusetts Boston. He is also closely involved with the Institute for New Economic Thinking. I speak to him about the basic links between IPRs and the pandemic; the long-held orthodoxy in economic theory on the importance of IPRs, especially in areas like health; how IPRs lead to suboptimalities like hoarding of knowledge, vaccine grabs and other global inequalities; the relationship between public funding and vaccine production; whether private profits being produced from public investments; and finally, the problem of vaccine nationalism.” — Chayakkada Chats

“To do this properly, we need to understand the structure of markets for knowledge-based products like new vaccines. Currently, we do not: the “market” is a mishmash of competition and side deals. According to a recent paper from the Institute for New Economic Thinking, governments and pharmaceutical companies last year concluded 44 bilateral COVID-19 vaccine deals, many of which have undisclosed details and poorly understood escape clauses. Poor countries were, by and large, left out.” — Kaushik Basu, Project Syndicate

In 1898, upwardly mobile Blacks in Wilmington, NC were terrorized and slaughtered in a violent insurrection that set the stage for Jim Crow – and the next 123 years. Hardly anyone really knows about it.

As new coronavirus cases surge across India, calls are growing louder for wealthy countries to loosen intellectual property restrictions

A collection of INET’s most important articles, videos, interviews, and working papers that deal with the climate crisis

“But ultra-low interest rates may be doing more harm than good, economist William White says in a working paper published last month by the Institute for New Economic Thinking. White, a former economic adviser at the Bank for International Settlements, has a number of arguments against this central bank policy. First, while lower borrowing costs do initially accomplish their goal of spurring spending, much of it is on “unproductive purchases” by both households and corporations that only wind up increasing the debt burden. Second, low interest rates can actually destabilize financial markets and the institutions surrounding them, either through inflated prices, encouraging fund managers to take on riskier investments, or hindering how banks and lenders are supposed to do business, White argues. And then there’s the exit problem. Once central banks lower interest rates, it’s very hard to tighten the flow of easy money. “Each cycle of monetary easing contributes to a buildup of undesired side effects that raises the likelihood of future instability,” White writes. “Central banks are then lured into a ‘debt trap’ where they refrain from tightening, to avoid triggering the crisis that they wish to avoid, but that restraint only makes the underlying problems worse.” — Diccon Hyatt, The Balance

“Some authors argue that the German export success has nothing to do with wage or unit labour cost moderation and is instead due to the country’s high non-price competitiveness.” — Lucio Baccaro and Tobias Tober, LSE

“The much-touted “new thinking” on fiscal policy and debt is actually very thin and little of it is new. In the 1990s, economist Luigi Pasinetti clarified the folly of the proposed Maastricht criteria for public finances and forecast the coming disaster with those. Subsequently, many economists, including more than a few working with the Institute for New Economic Thinking, showed in detail how austerity reduces potential output over time and how absurd theories about Phillips Curve trade-offs lead to big underestimates of real rates of unemployment. Running below full employment for long periods blows big holes in public finances and thus piles on debt.” – Thomas Ferguson

“A study by Nobel Laureate James Heckman found that every dollar invested in a high-quality, birth to five program for the most economically disadvantaged children resulted in $7.30 in benefits as children grew up healthier, were more likely to graduate high school and college, were less likely to be involved in crime, and earned more as adults.” — The White House

Contrary to the New Keynesian paradigm, long-term unemployment can be reversed without a significant uptick in inflation

Contrary to the New Keynesian paradigm, long-term unemployment can be reversed without a significant uptick in inflation

A new age virtual conference series in 2021 that aims to bring together legal, economic, and public policy thinkers to consider a variety of real world issues in India in a holistic manner.

“For more on this methodology, see Wolff’s National Bureau of Economic Research paper Household Wealth Trends in the United States, 1962-2013” — Chuck Collins

How does the Chinese economy actually work?

Large-sale debt relief for indebted households could be a game changer.

Unlike the Great Recession, the pandemic has hit women workers harder than men, and disproportionately hurt the job prospects of lower education workers.

Unlike the Great Recession, the pandemic has hit women workers harder than men, and disproportionately hurt the job prospects of lower education workers

The People’s Bank of China’s network of local currency swap arrangements provide Asian countries with a much-needed safety net, while also strengthening China’s diplomatic position.

The People’s Bank of China’s network of local currency swap arrangements provide Asian countries with a much-needed safety net, while also strengthening China’s diplomatic position

An interview with African development specialist Bara Guèye

Un entretien avec Bara Guèye

“To go back a little bit, Covid is possibly the first global event that we’ve actually seen. One year after it really started, we are seeing all these vaccines. It is really quite incredible when you think about the scientific advancement, it has really been something quite extraordinary. But our systems of management globally of knowledge and health are weak and counterproductive and in adequate. I’d say they’re probably best described as unjust and incompetent. Let’s start with this whole question of patent rights. Right from the outset it became quite clear that it was hindering the fight against covid. From the early days if you remember N95 masks we’re a concern, then treatments like remdesivir, so it’s not only a vaccine issue. This was the basis for last years’ call for the Covid technology access pool, which was rebuffed despite widespread support. It was rebuffed by the advanced countries. It’s hard to imagine why this should be the case because such technologies for public health are massive and have positive spill over benefits. Moving now to vaccines, I think the system is even more inefficient when one considers the fact that many companies across the world received significant subsidies for vaccines. Estimates range from about $100 billion and in some cases the entire cost; Moderna and Johnson and Johnson vaccines that were paid for by a public set of money. Such is the case for having patent rights to allow for innovation completely disappears. Now the debate has moved, that it is not actually IP which is the restriction, it’s the ability to produce and manufacturing capacity. But remember eight months ago that did not exist in developed economies. People like the Moderna chief chemist said it takes about three to four months to actually set up these factories. What we should’ve had was a massive transfer in technology to places that could actually do this, completely open access to technology of all sorts, and ramping up production on a sort of global war scale. That has not happened and is it’s still not happening because of these limitations and unfortunately despite India and South Africa making the case in the WTO and despite some better noises from the Biden administration we’re really not seeing much movement.” — Arjun Jayadev

“Patriotic people pay taxes.”

Whether it is called “Build Back Better” or a “Green Industrial Policy” or, indeed, a Green New Deal, it is imperative to reject the false dichotomy of “jobs against climate.”

“There is a lot to like about with this infrastructure plan from what we already know and there seems to be a historical opportunity to get things right. Before answering your question, let me bring us to three trends just for context. Firstly, for decades we’ve had an economic model that benefited a small number of people tremendously and left behind the majority of Americans, resulting in widening inequality and decline in the middle class. The fact that a zip code could predict a lot of things; your health outcome, your lifespan, your success in life is an extremely telling example. Secondly, we’ve had the digital revolution which spanned a good part of the last 15 years that further demonstrated a lot of displacing and polarizing tendencies. If you’re in the wrong parts of the economy so to speak, it really didn’t work that much for you. Thirdly of course, we had the Covid crisis which turbocharged a lot of these trends. A lot of this is to say that sure there’s a lot of roads and bridges to fix and as well as fiscal infrastructure, but how to productively engage more Americans in the economic process through like you said job training and education, through better child care, invest in green recovery, and climate resilience these are paramount tasks.” — Jack Gao, Institute for New Economic Thinking

Formerly incarcerated Black people emerge from prison with far less education and social skills than white ex-cons. And they have great trouble forming families or earning a good living.

“So these companies have been hamstrung by these hedge fund activists that are only interested in making a buck as quickly as possible. And they really don’t care about the long-term sustainability or health of the company. Or is it anything the company might want to do in the way of making products in the future? They’re all about the short term. So they are holding American companies back.” — Lynn Parramore

Join us for this lively and timely presentation, followed by Q&A.

Hedge fund managers are pushing American firms to play Wall Street games instead of investing in technologies of the future. China doesn’t have that problem.

Your identity is being used against you. Can economics help?

“The economists Òscar Jordà, Moritz Schularick, and Alan Taylor studied the sensitivity of house prices to interest rates across 14 countries and 140 years of history. They found that a 1 per cent rise in interest rates reduces the ratio of house prices to incomes by about 4 per cent. In New Zealand, for example, that ratio has risen by about half in a decade, implying a double-digit rise in interest rates to stabilise it.” — Robin Harding, FT

Lynn Parramore appeared on Ian Masters to discuss Biden’s stimulus package and the “New Koch Brothers” wrecking America’s green new deal.

Contrary to its image as a cash-strapped, transparent public service, Wikipedia is a wealthy NGO with close ties to big tech companies that it tries to obscure

“In “Private Equity’s Engagement With Health Care: Cause for Concern?” a report to the Institute for New Economic Thinking, researchers Eileen Applebaum and Rosemary Batt found that wages dropped at urgent care centers after acquisitions by private equity companies. They were 9 to 12 percent lower than hospital wages. More consolidation and Amazon’s relentless drive to suppress costs bode more of the same.” — Brian Alexander, Boston Globe

The discussants will illuminate the findings and wisdom in Montek S. Ahluwalia’s book BackStage: The Story Behind India’s High Growth Years (2019) and then explore the challenges for the developing world and Asian geopolitics.

The world has changed, and we need to adapt. Andrew Sheng calls for a more human economics to drive us toward a sustainable future.

History shows robust antitrust enforcement helps promote a prosperous, fair, and balanced economy. Antitrust expert Mark Glick explains how the U.S. went astray during the 1980s, and how to get back on track.

Mortality and economic data show how constraints to government spending and a skepticism of redistributive policies have made the pandemic far worse

“As consumers become richer, they spend more on services such as health and education, the demand for which is much more income elastic, and less on agriculture and manufactured goods, according to a recent study, co-led by Diego Comin, a professor of economics. The results are published in Econometrica. Until now, productivity has often been considered at least as important, if not more, than preferences, in shaping the sectoral composition of the economy. Politicians and business leaders often make claims about why certain sectors in the economy are shrinking, such as the decline in U.S. manufacturing is due to robotics or trade with China. Such assessments are flawed, as the sectoral composition of the economy is mostly driven by preferences and not by productivity, according to the study, which models long-run structural change in the economy.” — Amy Olsen, Darmouth News

Mortality and economic data show how constraints to government spending and a skepticism of redistributive policies have made the pandemic far worse

“From 2010 to 2019 the FDA approved 356 drugs. Recent research from Bentley University finds that NIH funding contributed to every single new drug approved. At a cost to the tax payer of roughly $230 billion dollars. In spite of this contribution the NIH is listed on only 27 of those patents. This suggests that while tax payers provide funding for the bulk of the early stage research they do not get patent protections supposedly secured by the by dole act. In essence American tax payers are paying the highest prices in the world for drugs they already paid to help develop.” — Senator Tammy Baldwin

“As William Lazonick and other analysts have pointed out, stock buybacks artificially inflate executive pay and drain capital that could be put to productive purpose. .[xxv] — Sarah Anderson, Counter Punch [xxv] William Lazonick, “Profits Without Prosperity,” Harvard Business Review, September 2014.”

School re-opening push based on outdated science is poorly timed in face of coronavirus resurgence

How to Get Relief to Those Who Need It. Gosia Glinska in Conversation with Anton Korinek

There are several reasons why unprecedentedly low interest rates will probably not stimulate demand and may even threaten financial stability

“The issue is important because it tends to conflict with a hugely influential study published in 2017, called The Rate of Return on Everything, by Oscar Jorda, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, and Alan M. Taylor. This was a mightily ambitious piece of financial archaeology covering 17 countries, and it rendered the startling result that housing performed virtually as well as equities over time, but with much less volatility. The result held true for every country that Jorda and his colleagues examined.” — John Authers, Bloomberg

What’s the Future and Why It’s Up to Us

“I believe they mostly got this right. Just before President Biden took office, I presented some thoughts on what a rescue plan should include to deal with the macroeconomic challenges of the pandemic. I emphasized four broad areas: public health spending, enhanced unemployment benefits, assistance to state and local governments, and so-called “stimulus checks” to households. The legislation the president has signed does a pretty good job in all four areas.” — Sara Savat, Washington University News Room

INET’s Commission on Global Economic Transformation - Interim Report on the Global Response to the Pandemic

“Hedge fund managers are torpedoing chances for a successful Green New Deal, according to Lynn Parramore, Senior Research Analyst for the Institute for New Economic Thinking. In her recent article “Meet the “New Koch Brothers” – the Hedge Fund Activists Wrecking America’s Green New Deal“, she talks about how corporate raiders are turning the direction of “green” corporate partners of battery development, software, wind turbines, and more away from long term energy conservation projects toward short-term money-making projects to increase the hedge fund shareholder returns.” — WORT 89.9 FM

“Hedge fund managers are torpedoing chances for a successful Green New Deal, according to Lynn Parramore, Senior Research Analyst for the Institute for New Economic Thinking. In her recent article “Meet the “New Koch Brothers” – the Hedge Fund Activists Wrecking America’s Green New Deal“, she talks about how corporate raiders are turning the direction of “green” corporate partners of battery development, software, wind turbines, and more away from long term energy conservation projects toward short-term money-making projects to increase the hedge fund shareholder returns.” — WORT 89.9 FM

It is an attitude typical of conventional economists that sees the claim to qualify as technicians who deal with “social engineering”, on the basis of a “true” economic theory. Disrespectful of the epistemological (i.e. research methods) and even ontological principles (concerning the conception of the world). — Riccardo D’Orsi, Econopoly …. Citation: Lawson, T. (2010). Really Reorienting Modern Economics . Institute for New Economic Thinking (INET), April 10.

…That Five Years of Full Employment Wouldn’t Fix

“And what if there is a stock buyback during the period the share price is inflated? Does that harm shareholders because the company is spending money to repurchase its stock, or does it actually further benefit them by potentially raising earnings per share (EPS)?” … Citation: William Lazonick, The Financialization of the U.S. Corporation: What Has Been Lost and How It Can Be Regained, 36 Seattle U. L. Rev. 857, 859 (2013) (noting that trillions of dollars are spent on share buybacks and that “corporate executives who make these decisions are themselves prime beneficiaries of this focus on rising stock prices as a the measure of corporate performance”)

The New Keynesian Dynamic Stochastic General Equilibrium (DSGE) is a straightjacket for macroeconomics

The New Keynesian Dynamic Stochastic General Equilibrium (DSGE) is a straightjacket for macroeconomics

The Political Movement That Dared Not Speak its Own Name: The Neoliberal Thought Collective Under Erasure Philip Mirowski [Institute for New Economic Thinking, August 2014] ….consider the question: how should we approach the construction of a reliable history of a group of intellectuals who have managed to turn their meditations into a political movement on a global scale? Of course this raises timeworn problems of the relationship between theory and practice; but the Neoliberal case sports a further thorny complication: while we can fairly comprehensively identify the roster of whom should be acknowledged as a part of the movement, at least from its beginnings in the 1930s until the recent past, we are confronted with the fact that, in public, they themselves roundly deny the existence of any such well-defined thought collective, and stridently denounce the label of Neoliberalism. Not only do they wash their hands of most of the documented activities of the Neoliberal Thought Collective – think of Hayek and Friedman and their denials concerning the Pinochet interlude in Chile— but their plaint is that their opponents the socialists have always gotten the better of them, and thus their political project has never enjoyed any real successes, ever, anywhere, contrary to all evidence brought to the table. They are forever the bridesmaid of conservative parties, never the bride, to hear them tell it. Given the sheer numbers of people involved, and the really astronomical sums of money, and the cultural dominance of the airwaves, this sad sack victimhood is really quite remarkable, and itself calls for serious examination. Perhaps it has something to do with the fact that a political movement that dare not speak its own name has intellectual contradictions that it dare not air openly.

“With all of that said, The Institute for New Economic Thinking (INET) recently published a study casting doubt about the methodology BLS uses to tabulate its unemployment data, especially when it comes to Black people. INET suggested that BLS’ data is inaccurate and downplays Black unemployment. On average, Black men’s unemployment rate is 2.8 percentage points higher than BLS data shows,” according to INET’s study, entitled, “Masking Real Unemployment: The Overall and Racial Impact of Survey Non-Response on Measured Labor Market Outcomes.” The same was true for BLS’ unemployment rate for Black women, which INET found was, on average, about 2.4 percentage points lower than its actual rate. The differences grow for younger Black males from 16 to 34 years old. INET’s findings lend some credence to a tweet from the Center for American Progress after January’s jobs report was published that said Black women, in particular, “are still being left behind by the recovery.” — Bruce C.T. Wright, News One

“Making matters worse, the Black unemployment rate might be much higher, according to a new analysis by the Institute for New Economic Thinking. The unemployment rate is calculated using data from the Current Population Survey. But that survey has a much lower response rate from Blacks than from white Americans, leading to more misclassifications in the official unemployment rate. For Blacks, the response rate is 72%, while the response rate is 90% for whites. Factoring that in, the unemployment rate for Black workers could be at least 2.6 percentage points higher than the monthly rate by the BLS, leaving it at 12.5% in February, the analysis found. For whites, the increase is much smaller at 0.7 percentage point. “The Current Population Survey has been missing a larger share of the population over time, particularly among Blacks,” said Baker, who is also an author of the analysis. “You have to ask what’s the situation for the people they’re not talking to.” — Denitsa Tsekova, Yahoo Money

Wealthy predators are playing stock market games with companies needed to develop and produce clean technology

“The piece gives a series of case studies. Parramore summarized the problem: “Players on Wall Street have been torpedoing our chances of averting environmental catastrophe for years. A group of billionaire financiers has made sure the companies the government must partner with to fight climate change are focused on one thing only – making these men (they all seem to be men) even richer. Instead of leading the world in climate change technology, firms like Apple, GE, and Intel have been pressured to become the personal piggy banks of powerful moneymen — known as hedge fund activists — who can’t see beyond the next quarterly report.” — Institute for Public Accuracy

Like Republicans with political polls, unemployed Black workers are underrepresented in federal employment data because of non-response.

“Pressley’s resolution builds upon the academic intellectual framework developed by advocates like Dantas and Wray, as well as the ongoing civil rights demand for federally guaranteed jobs, which can be seen in the 1963 March on Washington for Jobs and Freedom (where the Rev. Dr. Martin Luther King, Jr. gave his “I have a dream” speech) and indeed long before that. It also draws on the work of Sadie Alexander, recognized as the nation’s first Black woman economist. Speaking at Florida Agricultural and Mechanical College in 1945 (as noted by Professor Nina Banks, blogging at the Institute for New Economic Thinking), Alexander described full employment as a way to address the nation’s economic and racial imperatives.” — Marin Levine, Nonprofit Quarterly

A large and growing percentage of households are missed in the monthly Current Population Survey (CPS).

The $1.9 trillion stimulus should be large because the need is large

Rob Johnson appeared on the Background Briefing with Ian Masters to discuss working with Trumpsters, the source of their anguish, and important pathways to healing

Conservative legal theory is based on a shoddy definition of what constitutes “efficiency”

Conservative legal theory is based on a shoddy definition of what constitutes “efficiency”