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.