News & Media Mentions
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By Inet Ed. | 02 Feb, 2021
Stiglitz has an article in Project Syndicate discussing Biden’s recovery package.
“The economy would, of course, be better off without zero interest rates. It would also be better if policymakers raised taxes by imposing levies on pollution and restoring greater progressivity to the tax system. There is no valid reason why the richest Americans should pay lower taxes as a percentage of their income than those who are far less well off. Given that wealthy Americans have been the least affected, medically or economically, by the coronavirus pandemic, America’s regressive tax system has never looked uglier.”
Basu has an article in Project Syndicate profiling why he thinks South Korea, Vietnam, and Mexico will have outstanding growth in the next decade.
“schoolteachers are typically paid less than they should be, which I believe is because the effect of a good education cascades down to future generations. Good teachers are thus a bit like good climate policy: future generations benefit, but they do not influence today’s decisions. South Korea has drawn some of its most talented people into teaching, and schoolteachers are among the country’s richest people.”
Weil is participating in an EPI panel, “Actions the Biden administration and Congress can take to better protect farmworkers” on February 10th at 3 pm EST
By Inet Ed. | 27 Jan, 2021
Appelbaum, Batt, Lazonick, and Shin are cited in Naked Capitalism in an article looking at the industrial revolution and how finance capitalism instead of industrial capitalism came to be. (Lazonick & Shin citations are INET funded research)
“In taking over industrial companies, financial managers focus on the short run, because their salary and bonuses are based on current year’s performance. The “performance” in question is stock market performance. Stock prices have largely become independent from sales volume and profits, now that they are enhanced by corporations typically paying out some 92 percent of their revenue in dividends and stock buybacks.
Private equity has played a big role in increasing corporate leverage, both through their own actions and by disinhibiting large public companies in the use of debt. As Eileen Appelbaum and Rosemary Batt explained, the large buyout firms, following the playbook developed in the 1980s, produce their returns from financial engineering and cost-cutting (smaller size deals target “growthier” companies, but while those private equity firms assert that they add value, it may just be that they are skilled at identifying promising companies and riding a performance wave). Contrary to their marketing, private equity fee structures mean they make money even when they bankrupt firms. And they have become so powerful that it’s hard to get political support to stop them when they hurt large numbers of citizens through exploitative practices like balance (“surprise”)billing.”
Mazzucato joined The Economist podcast to discuss her new book.
By Inet Ed. | 26 Jan, 2021
Lazonick’s INET funded research on stock buybacks is cited in the FT.
“Biden has long been critical of buybacks, which were in fact considered market manipulation until the early 1980s. There are all kinds of new research to show that far from being a mark of confidence in a company’s prospects, buybacks simply represent what UMass academic Bill Lazonick has dubbed the “downsize and distribute” strategy of American companies, one that bolsters asset prices rather than productivity.”
A review of Antonella Stirati’s INET funded book in Sinistrainrete.
“in addition to the author's interpretations, there will also be a considerable list of texts and contributions that can be useful for approaching and deepening the economic debate and the developments of the alternative and post-Keynesian theoretical approach, even in its various currents. . The not obvious presence in the public debate of these topics makes the book an important reading to interpret the recent economic history of our country starting from the questions that the crisis triggered by the outbreak of the pandemic and the recipes prepared by the European and national institutions pose us. , of which however no shadow is seen in political decisions, having an interpretative key that escapes the mainstream logic is, even more so in this context, of crucial importance.”
john a. Powell appeared on KALW radio to discuss finding common ground after Trump.
CP Chandrasekhar and Jayati Ghosh have an article in the Hindu Business Line on the shifting balance of power and payments between the Centre and States in India.
“Consider the farcical nature of the plan: the Centre owes the States money; but instead of paying up, it lends the States some part of what they are owed from the Centre. Even this is being seen as a concession because earlier the Finance Minister had offered only to allow the States to borrow the amount from the market. This is possible only because of the extremely unequal power relations between Centre and States. While some states are still holding out for their rightful dues, most have fallen in line, out of sheer desperation because of the need to pay salaries and keep their governments even minimally functional.”
Mazzucato is featured in Time.
“Covid presents us with a desperate situation that needs immediate measures to protect health and incomes. But we cannot forget that more serious environmental crises loom around the corner. We must be bold. We must solve the immediate with ambition, designing into the solutions the foundations to make tomorrow a better world. Otherwise ‘building back better’ is only a slogan, and we risk remaining stuck in a world that perpetuates one crisis after another: economic, health, and climate.”
Sheng has an article in Project Syndicate on the need for a US and China common understanding to move forward competitively and cooperatively.
“In his book A History of Civilizations, the great French historian Fernand Braudel quoted the French sinologist Marcel Granet. “The Chinese are either superstitious or practical or rather they are both at once,” Granet said. “It is this ‘both at once’ that a Westerner often finds hard to grasp.” Some Western thinkers have of course understood such dualities. The economist Joseph Schumpeter, for example, observed that markets derived their dynamism from entrepreneurial “creative destruction.” This “both at once” worldview suggests that partial, linear, zero-sum, and monist perspectives misunderstand today’s interconnected global society. America worries that China may usurp global leadership, while China is concerned that the US is blocking its modernization. This dynamic has fueled rising insecurity in the world’s two biggest economies, creating potentially fertile ground for further confrontation, and even a military conflict.”
Mohamed El-Erian has an article in Project Syndicate on lessons from the former UK lockdowns.
“The UK’s evolving response to the COVID-19 pandemic is following a pattern seen in several previous crises around the world. It highlights the need to maintain an open mindset, think analytically in terms of risk budgets, distinguish carefully between recoverable and non-recoverable mistakes, and take action early steps to minimize common behavioral traps. The more we take note of these issues in real-time, the greater the opportunity to improve our crisis-management approaches in the future.”
Spence has an article in Project Syndicate on what needs to be done for a successful vaccine rollout.
“The crises that Biden confronts as he begins his presidency are not of his making. And he has already promised to avoid many of his predecessor’s mistakes – beginning by building his pandemic strategy on scientific expertise and restoring the federal government’s central role. But now the government needs to mount a massive delivery program, enlisting adequate management and operations expertise. Without that, even Biden’s best-laid plans may go awry.”
Hot Money’s trailer featuring Storm & Pistor
INET In The News
By Inet Ed. | 25 Jan, 2021
Michael Greenberger joined Ian Masters’ podcast to discuss evidence regarding the insurgent attacks on January 6th.
Greenberger is quoted in the NY Times on whether Michael Barr is a good fit for Comptroller.
“Michael Barr is a very bright, well-informed, expert on financial markets, but he and Geithner were not aggressive pushers of Dodd-Frank as it moved through Congress,” Mr. Greenberger said. “In the last few days, the sudden hesitancy about Barr is focused on what he did with Volcker.”
And in Mr. Greenberger’s view, the difference between the two choices is not between good and evil. Rather, he said, it is akin to whether the office’s leader will be an activist, striking out in a new direction, or whether the agency will hew closer to the status quo. “He will not be a bad regulator,” Mr. Greenberger said. “But he will not be a leading reform regulator.”
The UN DESA announced the creation of a High-level Advisory Board on Economic & Social Affairs. Of the 20 new board member, 5 are INET scholars; Corsetti, Ghosh, Mazzucato, Rodrik, and Stiglitz
Stiglitz appeared on Bloomberg to discuss the stimulus package.
David Michaels joined NPR to discuss Biden’s executive order on workplace safety.
“In many industries, workers are simply replaceable. If a worker got sick, they would disappear. Another worker would appear at the door. And workers just aren't paid that much, and so employers didn't have any financial incentive to protect those workers. That will change because now they're risking monetary fines and actually potentially quite large ones, where during the past administration, OSHA did no more than slapping a few wrists. You know, they fined corporate meatpacking giants like Smithfield Foods a few thousand dollars for exposures that sickened hundreds of workers.”
Fazzari is quoted in the National Post on Donald Harris.
“As for Donald Harris himself, Fazzari said he was “very engaging” as a teacher. Despite an analytical, almost mathematical approach to economics, “he had a kind of informality you associate with Jamaican culture,” said the economist. “I remember him being a friendly mentor without being your buddy-buddy …You weren’t going to go out and spend all night at the bar with him.” A “Post-Keynesian” theorist, Harris was a leading figure in the small group of economists who posited alternative visions to neo-classical mainstream thinking about markets, and focused on the importance of income distribution long before income inequality became a widespread concern, said Fazzari.”
Fazzari is quoted in the St. Louis Post-Dispatch on Biden’s spending plan.
“Steven Fazzari, a professor of economics at Washington University, argues that the government tightened its purse strings too quickly after the 2008-09 recession, leading to a slow and subpar recovery.
A bold spending plan now, he believes, could help make up for that error. “This is a large response by historical standards, no doubt about it, but the problem is historic too,” Fazzari said. “I don’t find the total number excessive. For anyone who worries about the ballooning federal debt, Fazzari suggests paying attention to the bond market. With 10-year Treasury notes yielding just 1.1%, investors clearly aren’t worried about runaway inflation or Uncle Sam’s solvency.”
Hans-Joachim Voth’s new research paper was featured in The Economist.
“A new paper by Sebastian Doerr of the Bank for International Settlements, Stefan Gissler of the Federal Reserve, José-Luis Peydró of Imperial College London and Hans-Joachim Voth of the University of Zurich examines one of history’s darkest chapters. The Depression enabled the Nazis’ rise to power; the party went from receiving just 2.6% of the vote in 1928 to 37.3% in 1932. But economic pain was not the only factor that sent voters into the Nazis’ arms. The authors note the critical historical importance of the banking crisis that erupted in 1931 and felled two of Germany’s largest lenders, Danatbank and Dresdner Bank. Cities dependent on the banks experienced sharp declines in income as a result of the failures—of more than 20% over the course of the crisis, or about eight percentage points more than the German average. But while the crisis boosted support for the Nazis in places with deep ties to Danatbank, it had little effect on Nazi voting in those with closer links to Dresdner.”
Mohamed El-Erian has an article in Bloomberg on the Fed meeting this week.
“Given existing financial conditions and multiplying evidence of excessive risk-taking in markets, the Fed could be expected to tilt its policy guidance toward an earlier gradual taper of its ultra-loose monetary policy stance as the economy gets through the short-term difficulties and the new fiscal stimulus kicks in. The case for such a tilt is strengthened by legitimate concern that markets have been distorted by too many years of ample and predictable liquidity injections, causing them to disconnect excessively from fundamentals while also fueling the already considerable concerns about inequality. Yet the Fed is unlikely to do so at this week’s FOMC meeting, worried that a premature change in forwarding guidance could cause financial market dislocations that would undermine an economy facing that dimmer short-term outlook.”
Morris has an article in Business Insider on Argentina’s millionaire's tax.
“This is the state of our economy: the rich are richer than they've ever been, and everyone else is struggling. It doesn't take a Ph.D. in economics to see how we fix this. Tax the rich, and offer support to everyone else.
We've asked so many Americans, from medical workers to retail workers to business owners, to sacrifice this year for the sake of others - it's only right that those of us with so much more to give be asked to do the same. If Argentina can do it, why can't the United States?”