Development: beyond aid and trade
Dani Rodrik explains how rich countries could promote development overseas:
First, a new global compact should focus more directly on rich countries’ responsibilities. Second, it should emphasize policies beyond aid and trade that have an equal, if not greater, impact on poor countries’ development prospects.
A short list of such policies would include:
- carbon taxes and other measures to ameliorate climate change;
- more work visas to allow larger temporary migration flows from poor countries;
- strict controls on arms sales to developing nations;
- reduced support for repressive regimes; and
- improved sharing of financial information to reduce money laundering and tax avoidance.
Notice that most of these measures are actually aimed at reducing damage—for example, climate change, military conflict, and financial crime—that otherwise results from rich countries’ conduct. “Do no harm” is as good a principle here as it is in medicine.
Read his piece here.
Health care: where profits warp incentives
Echoing our recent Econ4 statement, Eduardo Porter explains in the New York Times why our healthcare-for-profit system means that Americans pay too much and get too little:
From the high administrative costs incurred by health insurers to screen out sick patients to the array of expensive treatments prescribed by doctors who earn more money for every treatment they provide, our private health care industry provides perhaps the clearest illustration of how the profit motive can send incentives astray.
By many objective measures, the mostly private American system delivers worse value for money than every other in the developed world. We spend nearly 18 percent of the nation’s economic output on health care and still manage to leave tens of millions of Americans without adequate access to care.
Read his piece here.
The austerity fallacy
Austerity policies are founded on a fallacy of composition: the mistaken notion that if something is true of the part (in this case, households), it must be true of the whole (in this case, the nation’s economy). Paul Krugman, writing in the Times, explains the difference:
An economy is not like a household. A family can decide to spend less and try to earn more. But in the economy as a whole, spending and earning go together: my spending is your income; your spending is my income. If everyone tries to slash spending at the same time, incomes will fall — and unemployment will soar….
The crisis in Greece [from 2010] was taken, wrongly, as a sign that all governments had better slash spending and deficits right away. Austerity became the order of the day, and supposed experts who should have known better cheered the process on, while the warnings of some (but not enough) economists that austerity would derail recovery were ignored. For example, the president of the European Central Bank confidently asserted that “the idea that austerity measures could trigger stagnation is incorrect.”
Well, someone was incorrect, all right.
Read his piece here.
Race to the bottom
Econ4’s Jerry Epstein breaks downs the fallacy of ‘tax incentives’ as a lure to investment:
Source: The Real News Network.
Read the New York Times story on corporate tax giveaways here.
New narrative for a new economy
John Cavanagh and Robin Broad write on the new economy movement:
If the Occupy movement popularized the call to end extreme inequality, Hurricane Sandy is popularizing the call to rebuild our nation’s infrastructure in a green and resilient manner. Weaving these themes together can make for a gripping narrative.
Read more here.
Local business: Not just a smaller version of big business
Stacey Mitchell of the Institute for Self-Reliance says changing where you shop is only the first step:
Source: http://www.ilsr.org/
Economics denial
The New York Times reports today on attempts to suppress a Congressional Research Service report showing that tax cuts for the rich don’t create jobs:
“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie,” the report said. “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”
Read the Times piece here.
Read the suppressed report here.
How not to create jobs
Lessons from Recent History 101: the Bush tax cuts.
It is Orwellian that after a decade of trillion dollar tax cuts and bailouts of the rich, and a steadily worsening jobs and employment picture for American workers, we are told to be kind to the rich and give them even more money because they are the “jobs creators”.
Read more here.
Superstorm Sandy: Harbinger of things to come?
Five years ago, this picture appeared in report titled Nation Under Siege: Sea Level Rise at Our Doorstep. It depicts what would happen – and this week, did happen – as a result of a 3-meter rise in sea levels in New York City:
Was superstorm Sandy a preview of what sea level rise will bring—permanently—to New York and other coastal cities by century’s end?
Read about it here.
Waste
The food thrown away in Europe and North America would be enough to feed all the hungry people in the world three times over.
Source: http://whypoverty.net/en_GB/video/128.
