Former Labor Secretary Robert Reich writes:
The means of most Americans haven’t kept up with what the economy could and should provide. The economy is twice as large as it was three decades ago, and yet the typical American is earning about the same, adjusted for inflation.
Read more here.
From a wide-ranging interview with Noam Chomsky:
[O]ne of the main problems for students today — a huge problem — is sky-rocketing tuitions. Why do we have tuitions that are completely out-of-line with other countries, even with our own history? In the 1950s the United States was a much poorer country than it is today, and yet higher education was … pretty much free, or low fees or no fees for huge numbers of people. There hasn’t been an economic change that’s made it necessary, now, to have very high tuitions, far more than when we were a poor country.
Read Chomsky’s breakdown of the rich-country-indebted-student paradox here.
Jason Sattler writes that Senator Elizabeth Warren is asking a good question:
Why does the government give the big banks a better deal than it gives students?
It’s question so perfect that people can’t stop talking about it.
The first standalone bill from Senator Elizabeth Warren (D-MA) would not only prevent student loan rates from doubling, it would cut them down to the same rate the Fed charges banks to borrow money overnight for the next 12 months. And the idea has taken off like wildfire, with more than 400,000 people signing on to support the legislation.
Read more here.
Econ4′s Gerald Friedman writes:
Even while scholarship has exposed the fallacy of austerity economics and this news has reached wide audiences through Twitter and the Colbert Report, the United States government is embracing austerity’s policy prescriptions… The ghost of bad austerity economics continues to haunt, and even to drive, the living.
Read his piece here.
The revelation by UMass-Amherst researchers that a key Harvard study used to support austerity economics was based on sloppy (mis)use of data has created a sensation in the media and the economics profession. Paul Krugman explains the selling power of junk economics:
The intellectual edifice of austerity economics rests largely on two academic papers that were seized on by policy makers, without ever having been properly vetted, because they said what the Very Serious People wanted to hear.
Read Krugman’s piece here.
Read a brief summary by UMass economists here.
See links to media coverage here.
Katrina van den Heuvel writes in The Washington Post:
True conservatives are — or should be — offended by corporate welfare as well. Conservative economists Raghuram Rajan and Luigi Zingales argue that it is time to “save capitalism from the capitalists,” urging conservatives to support strong measures to break up monopolies, cartels and the predatory use of political power to distort competition.
Here is where left and right meet, not in a bipartisan big-money fix, but in an odd bedfellows campaign to clean out Washington.
Read her piece here.
For many Americans, Nobel laureate Joe Stiglitz writes, the dream of upward mobility is being subverted by the reality of unequal opportunity:
Probably the most important reason for lack of equality of opportunity is education: both its quantity and quality. After World War II, Europe made a major effort to democratize its education systems. We did, too, with the G.I. Bill, which extended higher education to Americans across the economic spectrum. But then we changed, in several ways. While racial segregation decreased, economic segregation increased. After 1980, the poor grew poorer, the middle stagnated, and the top did better and better. Disparities widened between those living in poor localities and those living in rich suburbs — or rich enough to send their kids to private schools. A result was a widening gap in educational performance…
In some cases it seems as if policy has actually been designed to reduce opportunity: government support for many state schools has been steadily gutted over the last few decades — and especially in the last few years. Meanwhile, students are crushed by giant student loan debts that are almost impossible to discharge, even in bankruptcy. This is happening at the same time that a college education is more important than ever for getting a good job.
A level playing field is a key element of Econ4′s vision of how an economy that works for people, the planet and the future.
Stephanie Coontz writes in the Times on family-unfriendly work-life policies:
We must stop seeing work-family policy as a women’s issue and start seeing it as a human rights issue.
Read more here.
U.S. Senator Bernie Sanders (Ind- VT) on corporate takers:
In 2010, Bank of America set up more than 200 subsidiaries in the Cayman Islands (which has a corporate tax rate of 0.0 percent) to avoid paying U.S. taxes. It worked. Not only did Bank of America pay nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion that year. They are not alone. In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens to avoid paying some $4.9 billion in U.S. taxes. That same year Goldman Sachs operated 39 subsidiaries in offshore tax havens to avoid an estimated $3.3 billion in U.S. taxes. Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis.
On and on it goes. Wall Street banks and large companies love America when they need corporate welfare. But when it comes to paying American taxes or American wages, they want nothing to do with this country.
Read more here.
Gretchen Morgenson recounts Tim Geithner’s accomplishments as Treasury Secretary for Obama 1.0:
How did Treasury favor the banks? Consider its answer to the foreclosure mess. After promising to help four million borrowers, its Home Affordable Modification Program at last count had helped about one-quarter of that number.
One reason for this is that the program was flawed from the start.
First, the Treasury made the program voluntary, awarding funds to participating banks but failing to penalize those that did not. The program was all carrot, no stick.
Worse, the initial plan didn’t require the banks to write down second liens they may have held — like home equity lines — from borrowers whose original loans were modified. This let the banks put their interests ahead of both borrowers and those who held the first mortgages.
Read how HAMP was hampered here.