Sunday, November 20, 2016

Neoliberalism and Trump


It was the Democrats' Embrace of Neoliberalism That Won It for Trump
By Naomi Klein 
November 9, 2016
Davos - where the global elite gather every winter to discuss and decide on economic policy effecting the rest of us. `Elite neoliberalism unleashed the Davos class. People such as Hillary and Bill Clinton are the toast of the Davos party. In truth, they threw the party.' 
Photograph: Ruben Sprich/Reuters // The Guardian
They will blame James Comey and the FBI. They will blame voter suppression and racism. They will blame Bernie or bust and misogyny. They will blame third parties and independent candidates. They will blame the corporate media for giving him the platform, social media for being a bullhorn, and WikiLeaks for airing the laundry.
But this leaves out the force most responsible for creating the nightmare in which we now find ourselves wide awake: neoliberalism. That worldview - fully embodied by Hillary Clinton and her machine - is no match for Trump-style extremism. The decision to run one against the other is what sealed our fate. If we learn nothing else, can we please learn from that mistake?

Democracy , Trade, Globalization, and Trump

Democracy, Trade, Globalization and Trump

 Rethink Globalization, Or Trumpism Prevails
By Thomas Piketty
November 16, 2016
Let it be said at once: Trump's victory is primarily due to the explosion in economic and geographic inequality in the United States over several decades and the inability of successive governments to deal with this.
Both the Clinton and the Obama administrations frequently went along with the market liberalization launched under Reagan and both Bush presidencies. At times they even outdid them: the financial and commercial deregulation carried out under Clinton is an example. What sealed the deal, though, was the suspicion that the Democrats were too close to Wall Street - and the inability of the Democratic media elite to learn the lessons from the Sanders vote.
Hillary won the popular vote by a whisker (60.1 million votes as against 59.8 million for Trump, out of a total adult population of 240 million), but the participation of the youngest and the lowest income groups was much too low to enable key states to be won.
The tragedy is that Trump's program will only strengthen the trend towards inequality. He intends to abolish the health insurance laboriously granted to low-paid workers under Obama and to set the country on a headlong course into fiscal dumping, with a reduction from 35% to 15% in the rate of federal tax on corporation profits, whereas to date the United States had resisted this trend, already witnessed in Europe.

Wednesday, October 26, 2016

Candidates on H-1B Immigration

SPEAKING OF FOREIGN WORKERS: Jeff Sessions said at a Trump campaign event in Iowa that he was open to eliminating the H-1B visa program for skilled foreign workers. "We shouldn't be bringing in people where we've got workers," Sessions said during a stop in Indianola, according to the Des Moines Register. "There are a number of ways to fix it. I don't think the republic would collapse if it was totally eliminated." The H-1B program allows skilled workers to live and work in the U.S. temporarily, and 172,748 such visas were issued in fiscal year 2015, according to the State Department
Trump's campaign statements on the H-1B program have been wildly contradictory, as the Washington Post documented earlier this year. In a March debate, for instance, Trump spoke of the need for more highly skilled foreign workers, then reversed his position that same evening, saying in a campaign statement that he would "end forever the use of the H-1B as a cheap labor program." Clinton has sent mixed signals, too. She's backed giving out more visas as part of comprehensive immigration reform, but told Vox in June that stories of Americans losing their jobs to H-1B visa holders were "heartbreaking." Politically active tech execs seem to prefer Clinton, FiveThirtyEight's Farai Chideya reported Tuesday: "Of the $8.1 million given by tech employees or executives, Clinton got 95 percent." More from the Des Moines Register here and from FiveThirtyEight here.

These respond to questions asked in class last week. 

Tom Hayden on NAFTA

Instead of NAFTA’s corporate escape from New Deal-style regulation, the new agenda would be an extension of the most progressive elements of the New Deal to global society, a new social contract in place of market fundamentalism. Globalization from the bottom up. Instead of NAFTA-style agreements that solely protect foreign investors, this alternative model would offer enforceable protections to workers, women and the environment as well–on both sides of the border. Instead of sweatshops and child labor there would be unions and literacy programs. Instead of damming rivers and slashing rainforests, there would be conservation programs for future generations.


Wednesday, October 5, 2016

Robert Reich (The Real Scandal of Trump Paying No Taxes)

Robert Reich (The Real Scandal of Trump Paying No Taxes)

Debate moderator outsourced all of her questions on the economy to a group of fiscal conservatives

Debate moderator outsourced all of her questions on the economy to a group of fiscal conservatives

Offshore Shell Games 2016 | CTJReports

Offshore Shell Games 2016 | CTJReports

Report on U.S. companies taking advantage of off shore tax laws.

Instead, the study — which notes that 58 Fortune 500 companies would owe $212 billion in additional federal taxes, “equal to the entire state budgets of California, Virginia and Indiana combined,” if they were taxed properly — should be a five-alarm call to voters and lawmakers to finally fix the tax system. If all the attention on Mr. Trump’s tax bill (or lack of one) isn’t enough to inspire a complete rewrite of the tax code, this study may be.
Continue reading the main stor
The authors of the report, which include the U.S. PIRG Education Fundand Citizens for Tax Justice, combed through the filings of the Fortune 500 for 2015 and found an astonishing 73 percent “maintained subsidiaries in offshore tax havens.”

Monday, October 3, 2016

Corporate profits are way up, corporate taxes are way down

Corporate profits are way up, corporate taxes are way down: Since 1952, corporate profits as a share of the economy have risen dramatically (from 5.5 percent to 8.5 percent), while corporate tax revenues as a share of the economy have plummeted (from 5.9 percent to just 1.9 percent). This trend has worsened since the end of the Great Recession. Between 2010 and 2015, corporate profits averaged 9.2 …

News Release: 44% of Tax Cuts in Trump's Revised Plan Would Go to Top 1% of Taxpayers | CTJReports

News Release: 44% of Tax Cuts in Trump's Revised Plan Would Go to Top 1% of Taxpayers | CTJReports: A new distributional analysis of Donald Trump's tax plan reveals that 44 percent of the candidate's proposed tax cuts would go to the top 1 percent of taxpayers, and the plan would increase the nation's deficit by $4.8 trillion over 10 years, Citizens for Tax Justice said today.

Monday, September 26, 2016

Here is Donald Trump's economic plan as promoted by his advocates.

Trump's plan contains elements of a traditional conservative agenda, like cutting corporate tax rates and reducing regulations, but mainly it focuses on reducing the "pull" of domestic investment offshore and the "push" of American jobs to foreign countries. Trump would do that by renegotiating trade deals (through which, the paper says, Trump would be able to close the country's $500 billion trade deficit), as well as getting the World Trade Organization to change rules that treat countries that rely more heavily on income taxes, like the U.S., differently than those that rely on "value-added tax" systems, like Germany, China and Mexico.
Navarro and Ross write that Trump's plan would increase annual economic growth to an average of 3.5 percent. "They also believe that, coupled with spending cuts, the plan will generate additional tax revenues that will make up for all the revenues lost from his tax cuts - between $4.4 and $5.9 trillion, by one analysis - meaning the plan would not add to the deficit. The independent Center for a Responsible Federal budget disagrees with that assessment, projecting Trump would in total add $5.3 trillion to the budget; its analysis did not account for any higher growth from the plan," Tankersley writes. Read the full paper here and Tankersley's explanation here.

WASHINGTON ― In late August, the private equity firm chaired by billionaire Wilbur Ross agreed to pay a $2.3 million fine and return $11.8 million that regulators said it had bilked from its own clients ― which included pension funds and universities. On Wednesday, Ross co-authored an economic analysis for Donald Trump.
The Securities and Exchange Commission had alleged that WL Ross & Co. failed “to disclose its fee allocation practices” for more than a decade in some private equity funds it managed. In human-speak, the SEC was accusing the firm of fudging its numbers to steal from its investors. This week, Ross was attempting to rebut calculations from a conservative think tank that Trump’s economic plan doesn’t add up. To do so, he relied on magic numbers and fantastical thinking. 
Analyzing Trump’s tax policies, The Tax Foundation concluded that they would cost $2.6 trillion over the next decade. This was a low estimate ― when the group ran the numbers without relying on assumptions about tax cuts for the wealthy stimulating economic growth, the hit to the national debt would have been as high as $5.9 trillion.

Tuesday, September 20, 2016

Carried Interest Tax Loophole

A hedge fund manager in Chicago gets paid $4 million per day and pays a lower tax rate than average working families. That's because of something called the "carried interest loophole.” 1
This loophole allows investment managers at hedge funds and in private equity to pay a reduced tax rate of 23.8 percent on the portion of their income deemed as a capital gain—or, return on investment. This is a lower effective tax rate than what middle-class families face. Further, it is far lower than the rate they would face if this income was correctly classified as simply the salary they earn for managing other peoples’ investments.
Hillary Clinton, Bernie Sanders and Elizabeth Warren all agree that we must close this loophole, which allows Wall Street money managers to pay a lower tax rate than working families. But far too many members of Congress have been silent on this issue.
They need to hear from you today!
Click here to sign the petition to Congress to close the “carried interest loophole,” which allows certain investment managers to pay a lower effective tax rate than you and me.

Since 1979 the top 1 percent’s income share has doubled. And last year, the top 25 hedge fund managers earned a total of $13 billion. By closing loopholes that benefit the top 1 percent, we’ll be able to invest in programs that help working families, such as accessible, affordable, high-quality child care and early childhood education.
Even many Republicans won’t defend this kind of special treatment for the super-rich in public. In fact, even Donald Trump wants to close this particularly egregious loophole—though, in typical Trump fashion, his plan then returns this money to the richest households by cutting other taxes and introducing new egregious loopholes.
It’s time for Congress to listen to working people, not lobbyists and wealthy campaign contributors.
Sign the petition to Congress today to close the “carried interest loophole” and use the tax code to restrain the incomes of the top 1 percent.
Together let’s build an economy that works for all Americans, not just the wealthy few.
Thank you,
Josh Bivens
Research and Policy Director, EPI Policy Center

Tuesday, September 13, 2016

Trump's Economic Vision Could Blow A $1 Trillion Hole In U.S. Economy, Study Finds | Huffington Post

Trump's Economic Vision Could Blow A $1 Trillion Hole In U.S. Economy, Study Finds | Huffington Post

Poverty in California

The US Census Bureau this morning released new national and state-level figures based on the Supplemental Poverty Measure (SPM). The SPM improves on the official poverty measure by better accounting for costs of living as well as for the various resources (including noncash benefits like food assistance) that families use to cover expenses.

A new Budget Center analysis discusses these latest SPM data, which show that 20.6 percent of Californians struggled to make ends meet on average between 2013 and 2015 — the highest rate of any state in the nation. The Budget Center's analysis discusses how high housing costs contribute to California's poverty rate under the SPM, looks at the role that Social Security, tax credits for working families, and other public supports play in lifting families out of poverty, and identifies ways that policymakers can address financial hardship and help families climb the economic ladder.

Thursday, September 8, 2016

Neo Liberalism - Defined

Definition.  Neoliberalism.
In addition to an economic policy, neoliberalism is also a political project.

 Important components of neo liberalism are the consideration of the market as a pre eminent process of decision making. Markets are privileged and regulations or rules on trade and commerce are opposed.  Advocates of neoliberalism promote cutting public expenditures such as schooling and health care and social services. The promote deregulation of markets such as eliminating the Glass Steagals limits on banking and deregulation of any practice that produces profits for some.

In many places they promote privatization of state owned enterprises through private investment, including energy companies, utilities, and similar companies. 

1.    The Rule of the Market which liberates “free” enterprise from any bonds (regulations) imposed by the government no matter how much social damage this causes.
2.    Cutting Public Expenditures for social services such as education and health care.
3.    Deregulation of any policies, practices or laws that could diminish profits, including environmental protection and worker safety.
4.    Privatization of state owned enterprises, goods, and services through sales to private investors
5.    Eliminating the Concept of “The Public Good” or “Community” and replacing it with “individual responsibility.” (Martinez & Garcia, 2000)
6.    Assaults on labor unions.

*The adoption of neo liberal policies by main stream Democrats helps to explain the anger of a portion of the White working class and their abandonment of the Democratic Party.

Raising Wages and Rebuilding Wealth | Center for American Progress

Raising Wages and Rebuilding Wealth | Center for American Progress

Monday, August 29, 2016

Austerity, State Budgets, and Education

Note: California does it right !
New York Times . Editorial. 8/29The children entering kindergarten and first grade this school year were not yet born when the Great Recession ended in mid-2009. Incoming high school seniors were not yet in middle school.

But in many states and localities, the wounds to school budgets from recession-era cutbacks are still large, leaving schools with more students and less money. Recent data from the Center on Budget and Policy Priorities shows that as of last year, 25 states were still spending less per student than before the recession, adjusted for inflation, and cuts in seven states exceeded 10 percent. In 31 states, local government spending per student fell between 2008 and 2014, the latest data available (adjusted for inflation). It is safe to assume some improvement in recent years, but even so, there is clearly a long way to go before overall spending catches up with enrollment and inflation.

Some states, however, don’t seem particularly interested in addressing the shortfalls, while others, notably California and Minnesota, have moved decisively to do so.

The difference has at least as much to do with political priorities as financial challenges. In part, persistent shortfalls in school budgets reflect the depth of the recession and the fitful recovery. To a lesser extent, they also reflect stagnation in federal help, which accounts for nearly 10 percent of school budgets.

Reform or Divorce in Europe by Joseph E. Stiglitz - Project Syndicate

Sunday, August 21, 2016

Why is recovery taking so long—and who’s to blame?

Why is recovery taking so long—and who’s to blame?: We are enduring one of the slowest economic recoveries in recent history, and the pace can be entirely explained by the fiscal austerity imposed by Republican members of Congress and also legislators and governors at the state level.

Tuesday, August 2, 2016

Building a Progressive International | Portside

Building a Progressive International | Portside

What we are experiencing today is the natural repercussion of the implosion of centrist politics, owing to a crisis of global capitalism in which a financial crash led to a Great Recession and then to today’s Great Deflation. The right is simply repeating its old trick of drawing upon the righteous anger and frustrated aspirations of the victims to advance its own repugnant agenda.

Yannis Varaoufakis,

Athens, Greece  

21st Century Glass-Steagall Act

In 1999, when Congress repealed core provisions of the Glass–Steagall Act, it provided an opportunity for traditional banks to engage in an array of high-risk activities. And that is exactly what they did—growing in size and adding activities to their portfolio that threaten our country’s financial security.

A 21st century Glass–Steagall—which has been introduced by Sen. Elizabeth Warren and has bipartisan support—would separate traditional banking activities such as savings and checking accounts from riskier financial services such as hedge fund and private equity activities, investment banking, and more.

Please stand with the EPI Policy Center and our partners in calling on Congress to pass Sen. Elizabeth Warren’s 21st Century Glass–Steagall Act and begin to rein in Wall Street’s greedy and reckless behavior.

Monday, June 20, 2016

Possible Recession ?

RECESSION LOOMING?: From The Wall Street Journal's Ben Leubsdorf: "Gut-wrenching gyrations in financial markets early in the year helped summon the specter of a new recession. Now, warning signs are coming mostly from the U.S. economy itself."
"Hiring is slowing, auto sales are slipping and business investment is dropping. America's factories remain weak and corporate profits are under pressure. All are classic signs of an economic downturn, and forecasters have certainly noticed. In a Wall Street Journal survey this month, economists pegged the probability of a recession starting within the next year at 21%, up from just 10% a year earlier. Some economists think the risk is even higher."

Wednesday, April 27, 2016

What is capitalism and how does it rule?

Capitalism, statism, and socialism defined by a scholar. Also, social democracy.

Sunday, April 10, 2016

Bill Black: Hillary and Bill and Paul Krugman Race to the Right to Stop the Bern | naked capitalism

Bill Black: Hillary and Bill and Paul Krugman Race to the Right to Stop the Bern | naked capitalism

How Clinton's Mass Incarceration led to crisis in public university tuitions.

How Bill Clinton’s Mass Incarceration Policies Fed Rising Higher Education Costs and Student Debt Burdens

Posted on April 10, 2016 by 
I seldom post a extract from another site without further commentary of my own, but this is sufficiently important that it deserves to be highlighted without me getting in the way. From Ben Jealous via Medium:
Furthermore, virtually every American between 18 and 24 is paying a price for mass incarceration.
This is because state after state has cut their higher education budget to pay for higher incarceration. As a result, public university tuition and student default rates have soared. Our youngest voters find themselves most likely to either be in prison, indentured by student loan debt or afraid to even apply to college.
President Clinton was misleading when he suggested his 1994 crime bill was only responsible for 10 percent of America’s mass incarceration crisis because that bill only applied to the federal system. Since at least the 1970s, when incarceration rates began rising in America, the states have quickly replicated federal changes in sentencing laws.
Indeed, most Black Lives Matter activists have paid a steep price for President Clinton’s policies.
However, they also understand what President Clinton has often ignored: while the percentages are higher in the black community, an equal or larger number of our white sisters and brothers have been impacted by the sky-high incarceration, poverty, and student debt default rates spurred by the very policies he touted.

Why we must save the EU | Portside

Why we must save the EU | Portside

Tuesday, March 29, 2016

Moneyed Class Finds New Way to Steal Pension Money from Workers

The excellent blog Capital & Main has an important piece up about the proposal to create a new retirement system in the state for workers who do not have a pension system.

As the writer Judith Lewis Mernit well describes, California ( and the nation)
is facing a growing retirement crisis and more and more jobs no longer have pensions.  This is an emerging crisis.

For comparison, here is the Sacramento Bee version of the same story.

The Capital and Main piece is a good piece on important issues. But, do we really only want to consider the neoliberal finance approach?  For example, the proposal calls for employers to insist on participation, but apparently does not require employers to contribute- as does social security.
Then, the advocates claim it is progressive because of the pooled IRA project.  But, IRA's are still invested in the markets. This is like the Peterson Institute arguing for the privatization of social security.

Friday, February 5, 2016

Hillary Clinton and Predator Nation

Choosing Democracy: Hillary Clinton and Predator Nation: by Charles H. Ferguson, Director of film, Inside Job. The stunning ascent of Bernie Sanders portends far more than a hard-fought Democ..

Author of Predator Nation.

Friday, January 29, 2016

Failure to Punish Corporate leaders for Fraud and Abuse

WASHINGTON — WHILE presidential candidates from both parties feverishly pitch their legislative agendas, voters should also consider what presidents can do without Congress. Agency rules, executive actions and decisions about how vigorously to enforce certain laws will have an impact on every American, without a single new bill introduced in Congress.

The Obama administration has a substantial track record on agency rules and executive actions. It has used these tools to protect retirement savings, expand overtime pay, prohibit discrimination against L.G.B.T. employees who work for the government and federal contractors, and rein in carbon pollution. These accomplishments matter.

Whether the next president will build on them, or reverse them, is a central issue in the 2016 election. But the administration’s record on enforcement falls short — and federal enforcement of laws that already exist has received far too little attention on the campaign trail.

I just released a report examining 20 of the worst federal enforcement failures in 2015. Its conclusion: “Corporate criminals routinely escape meaningful prosecution for their misconduct.”

Friday, January 15, 2016

Neoliberal Capitalism and What Comes Next ?

David M. Kotz
David M. Kotz is a professor of economics at the University of Massachusetts Amherst and the author of The Rise and Fall of Neoliberal Capitalism (Harvard University Press, 2015). This article originally appeared in the January/February 2016 issue of Dollars & Sense magazine.
Neoliberal capitalism had, at its core, a basic contradiction: Rising profits spurred economic expansion, but at the same time the source of the rising profits—the suppression of wage growth—created an obstacle to expansion. With wages stagnating, and with government spending rising more slowly, who would buy the output of an expanding economy? For a while, this simmering “demand problem” was forestalled, as risk-seeking financial institutions extended credit to the hard-pressed families whose wages were stagnating or falling. Debt-fueled consumer spending made long expansions possible despite the stagnation of wages and of government spending. Big asset bubbles provided the collateral enabling families to borrow to pay their bills.
The economic crisis of 2008 marked the end of the ability of the neoliberal form of capitalism to promote stable economic expansion. In the wake of the massive housing-bubble collapse and financial crash, the previous debt-and-bubble-based growth machine cannot be revived. The banks continue to find new speculative ventures and corporate profits remain high, but this process no longer brings normal economic expansion.
Change: Reactionary, Reformist, or Radical?
So far, the powers that be, in the United States and elsewhere, have been pursuing “austerity policy” as a way of doubling down on neoliberalism, which has greatly rewarded the “one percent.” However, continuing along that path promises only unending stagnation. Long-lasting stagnation is destabilizing to capitalism, tending to promote the growth of political movements—on the left and the right—demanding major political and economic change. This prods big business to consider some restructuring of capitalism to overcome stagnation and its dangerous consequences.

Tuesday, January 12, 2016

The Deficit: Nine Myths We Can’t Afford

The Deficit: Nine Myths We Can’t Afford: Has the federal government run out of money? Will we have to slash Social Security? Will we have to borrow dollars from China for our children to pay back? The national debate over fiscal responsibility and sustainability is entering a new, critical phase. Today, an 18-member bipartisan commission to examine the government’s fiscal problem will... Read more »

Monday, January 11, 2016

Where Economic Distress Meets Political Dysfunction

Robert Kuttner 
The economy generated almost 300,000 jobs last year and cut the nominal unemployment rate to five percent. But family incomes for most people are still deeply depressed. 
Yet a lot of experts seem to think this is the best the economy can do. The Federal Reserve last month actually voted to raise interest rates on the premise that growth would soon pick up, and inflation might be a threat.
Meanwhile, slowing growth has made fools of the Fed's experts. The collapsing stock market in China produced reverberations around the world and projections of slower growth at home and abroad. 
The U.S. economy is relatively strong compared to the rest of the world (faint praise). But as the deep slide in domestic stock markets during the first week of the New Year suggests, we are hardly immune to global trends. 
Nor is the current American economy strong enough to serve as a growth engine for the rest of the world. And nothing in the mainstream policy debate would significantly change the economic outlook for ordinary working families and the economy as a whole, though the proposals of the Sanders campaign are at least a down-payment.