State of Resistance
State of Resistance, by Manuel Pastor, draws out lessons from the fall and rise of California’s economy:
Once upon a time, any mention of California triggered unpleasant reminders of Ronald Reagan and right-wing tax revolts, ballot propositions targeting undocumented immigrants, and racist policing that sparked two of the nation’s most devastating riots. California confronted many of the challenges the rest of the country faces now–decades before the rest of us.
Today, California is leading the way on addressing climate change, low-
wage work, immigrant integration, over-incarceration, and more. As white residents became a minority and job loss drove economic uncertainty, California had its own Trump moment twenty-five years ago, but has become increasingly blue over each of the last seven presidential elections.
How did the Golden State manage to emerge from its unsavory past to become a bellwether for the rest of the country?
Read more here.
Rethinking the economic role of the state
Mariana Mazzucato offers a counterpoint to market fundamentalism: the state is the “investor of first resort,” whose key role in the innovation ought to be recognized and rewarded.
American bifurcation
Inequality by the numbers:
Source: “Economic growth in the United States: A tale of two countries,” by Thomas Piketty, Emmanuel Saez and Gabriel Zucman for the Washington Center for Equitable Growth.
Economic orthodoxy: where vision goes to die
Econ4’s Gerald Friedman laments the blindness of orthodox economics:
When I conducted an assessment of Senator Bernie Sanders’ economic proposals and found that they could produce robust growth, the negative reaction among powerful liberal economists was swift and vehement. How much, I wondered, did this reflect personal disappointment being rationalized into a political economy of despair? Professional economists tend to embrace an economic theory that government can do little more than fuss around the edges. From that stance, what do they have to offer ordinary people for whom the economy is not working? Not a whole lot.
Read Friedman’s full piece here.
PS: The debate on the Sanders proposals between Friedman and his critics is recapped here and here.
Standard & Poor’s hits U.S. income inequality
From an August 2014 report by S&P:
- At extreme levels, income inequality can harm sustained economic growth over long periods. The U.S. is approaching that threshold.
- Standard & Poor’s sees extreme income inequality as a drag on long-run economic growth. We’ve reduced our 10-year U.S. growth forecast to a 2.5% rate. We expected 2.8% five years ago.
For the report, see here.
For press coverage, see here.
The over-supplyside economy
Daniel Alpert explains why the economy ain’t what it used to be:
We are in an age of global oversupply: an oversupply of global labor (hence high underemployment); an oversupply of global productive capacity (hence ultra-low inflation); and an oversupply of global capital (hence low interest rates)….
[O]ne can’t properly understand the financial crisis without appreciating how the rise of the emerging nations distorted the economies of rich countries. And you can’t chart a course to more growth and stability in the developed world without recognizing that many of these distorting forces are still at work. Cheaper credit through monetary easing, for example, doesn’t yield much in an era when cheap capital already exists in abundance.
Can we get out of this mess? We can, but we need a fresh playbook.
Read his Times op-ed piece here.
Greed today, gone tomorrow
Lynn Parramore, writing for Alternet, explains why investment in innovation has declined in America:
There’s a motto on Wall Street: “I.B.G.-Y.B.G.” or “I’ll Be Gone, You’ll Be Gone.” As long as you’re making money right now, what happens tomorrow is not your problem.
It’s everyone else’s problem. Witness the decline in the number and quality of jobs, the middle class evaporating, and the financial instability that brought about the Great Recession.
Read more here.
Grow the good, shrink the bad
Econ4’s James Boyce writes that we need better measures of economic well-being, better public policies, and better language:
We need to move beyond the stale “pro-growth” versus “anti-growth” rhetoric of the past. It’s time to raise a new banner: Grow the good and shrink the bad.
Read more here.
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.
