Common sense in uncommon times
The French have a good idea: corporations that duck tax obligations can’t get financial support from the state they fail to support:
French finance minister Bruno Le Maire has said companies registered in tax havens, or with subsidiaries in such places, cannot benefit from the billions of euros of support being provided by the government to limit the economic damage of the coronavirus pandemic.
France has abandoned its budget deficit and public debt targets since the start of the Covid-19 crisis, announcing €110bn in emergency funding in order to stave off business bankruptcies and prevent a surge in mass unemployment of the sort that has hit the US.
“It goes without saying that if a business has its tax base or subsidiaries in a tax haven — and I want to say this with a lot of force — it cannot benefit from the state’s financial help,” Mr Le Maire told Franceinfo radio on Thursday. He also confirmed that companies that received state aid could not pay dividends or buy back their own shares.
Read more here.
Building a resilient economy
Who said this: “With a sensible industrial policy, workers will take precedence over short-term corporate gain.” And this?
Why didn’t we have enough N95 masks or ventilators on hand for a pandemic? Because buffer stocks don’t maximize financial return, and there was no shareholder reward for protecting against risk. Even in government, we became infatuated with the “just in time” acquisition model, as opposed to “just in case” contingency acquisitions.
Today, we see the consequences of this short-term, hyperindividualistic ethos. Americans cannot leave their homes. Neighbors are unable to shake hands. Places of worship are closed. The labor market, especially for working-class Americans in those service industries, is in free-fall….
A sensible industrial policy will mean creating federal incentives for productive investment in workers and equipment through tax policy and robust federal guarantees, while discouraging unproductive corporate behavior like stock buybacks. Where foreign subsidies draw away investment outside our own borders, the federal government should introduce cooperatives to spur the creation of domestic supply chains.
Though rebuilding a more productive and pro-worker economy will take time, we can achieve it and ensure that America’s next economic chapter will owe its character to the same spirit of resiliency, solidarity and collective pursuit of the common good that our people are now displaying to the world.
Hint: A welcome sign of intelligent life on the other side of the political aisle. Read more (and find out whose words these are) here.
Bernie breaks it down
The pandemic lays bare a broken system, writes the Senator:
If there is any silver lining in the horrible pandemic and economic collapse we’re experiencing, it is that many in our country are now beginning to rethink the basic assumptions underlying the American value system.
Should we really continue along the path of greed and unfettered capitalism, in which three people own more wealth than the bottom half of the nation, and tens of millions live in economic desperation — struggling to put food on the table, pay for housing and education and put a few dollars aside for retirement? Or should we go forward in a very new direction?
Read more here.
Valuing work that’s truly valuable
From the political philosopher Michael Sandel:
The coronavirus pandemic has suddenly forced us to reconsider what social and economic roles matter most.
Many of the essential workers during this crisis are performing jobs that do not require college degrees; they are truckers, warehouse workers, delivery workers, police officers, firefighters, utility maintenance workers, sanitation workers, supermarket cashiers, stock clerks, nurse assistants, hospital orderlies and home care providers. They lack the luxury of working from the safety of their homes and holding meetings on Zoom. They, along with the doctors and nurses caring for the afflicted in overcrowded hospitals, are the ones who are putting their health at risk so the rest of us can seek refuge from contagion.
Beyond thanking them for their service, we should reconfigure our economy and society to accord such workers the compensation and recognition that reflects the true value of their contributions — not only in an emergency but in our everyday lives.
Read more here.
Coronomics
Fresh insights on the economy and economics in a time of pandemic:
- • Noam Chomsky and Robert Pollin on neoliberalism as a pre-existing condition: here.
- • Sam Bowles and Wendy Carlin on rebooting the economic narrative: here.
- • OXFAM on inequality under the magnifying lens: here.
- • A rare glimpse of fossil fuel-free skies: here.
- • Meanwhile, clowns run amok: here.
- • Ezra Klein worries about coming fallout: here.
- • Julio Vincent Gambuto on our opportunity for a new version of normal: here.
Stay safe and stay tuned.
The care theory of value
Economist Nancy Folbre explains why care workers – people who care for the ill, the disabled, children, the elderly – are chronically underpaid:
To bolster my care theory of value, I invoke the words of Warren Buffett, Sage of Omaha, referring to investment strategies. “Price is what you pay; value is what you get.”
He just doesn’t have the pronouns quite right for care workers on the front lines today: Value is what you get, but price is what they pay.
Read more on her Care Talk blog, here.
Resilience and sustainability
As the coronavirus pandemic lays bare the fragility of global supply chains, the need for building more resilient and sustainable economies becomes ever more evident. It’s not just about medical supplies. In his new book, Feeding Britain, food policy expert Tim Lang dissects the nation’s perilous dependence on just-in-time supply chains in which eight mega-corporations control 90% of the retail market. From an interview in the Guardian:
What’s Lang’s solution? It’s detailed and includes the introduction of a food resilience and sustainability act, complete with legally binding targets. National nutritional guidelines should become the basis for food procurement contracts, both public and private. There should be an audit of food production in the UK and the budget for public health should be doubled from £2.5bn of the £130bn health budget to £5bn. It also proposes the creation of no fewer than nine bodies or institutions, including a royal commission to map a new set of “multi-criteria principles for the UK food system”, a food resilience and sustainability council and a network of urban and rural food and farming colleges.
Read more here.
Eat your credit card
Oops – you just did!
Every human on Earth is ingesting nearly 2,000 particles of plastic a week. These tiny pieces enter our unwitting bodies from tap water, food, and even the air, according to an alarming academic study sponsored by the World Wildlife Fund for Nature, dosing us with five grams of plastics, many cut with chemicals linked to cancers, hormone disruption, and developmental delays. Since the paper’s publication last year, Sen. Tom Udall, a plain-spoken New Mexico Democrat with a fondness for white cowboy hats and turquoise bolo ties, has been trumpeting the risk: “We are consuming a credit card’s worth of plastic each week,” Udall says. At events with constituents, he will brandish a Visa from his wallet and declare, “You’re eating this, folks!”
Read here about the campaign by Big Oil and Big Soda to bring the plastic horror show to your neighborhood – and stomach.
Killer fuels
Every year, poisonous air pollution from fossil fuels kills millions worldwide. Here’s the take-home from a new study in Cardiovascular Research: “Without fossil fuel emissions, the global mean life expectancy would increase by 1.1 years.”
Maybe that’s the health crisis we really ought to be freaking out about. Econ4’s James Boyce ponders the political implications of killer fuels:
Freeing ourselves from reliance on fossil fuels is not only good for the planet and future generations. It also saves lives here and now.
Read more here.
Paying the Price
The economics profession is starting to wake up to the terrible price of obsession with distribution-blind “efficiency”:
The AEA [American Economic Association] meetings took place against the backdrop of the publication of Anne Case and Angus Deaton’s remarkable and poignant book Deaths of Despair, which was presented during a special panel. Case and Deaton’s research shows how a particular set of economic ideas privileging the “free market,” along with an obsession with material indicators such as aggregate productivity and GDP, have fueled an epidemic of suicide, drug overdose, and alcoholism among America’s working class. Capitalism is no longer delivering, and economics is, at the very least, complicit.
Read more here.
