Government programs kept tens of millions out of poverty in 2018 — Hunter Blair and Julia Wolfe

The talk now is cutting social welfare spending to "shrink" the "ballooning" deficit resulting from tax cuts that mostly benefited the top tier, along with increased military spending.

EPI — Economic Policy Institute
Government programs kept tens of millions out of poverty in 2018
Hunter Blair and Julia Wolfe

Peter Cooper — Fairness and a ‘Job or Income Guarantee’

Of the various criticisms leveled at a combined ‘job or income guarantee‘, ones appealing to fairness usually go along the lines that it would be unfair for healthy individuals outside the workforce to receive an income while others are occupied in jobs. In considering this objection, a number of points come to mind:

heteconomist
Fairness and a ‘Job or Income Guarantee’
Peter Cooper

McKinsey — Reimagining capitalism to better serve society

Is capitalism still creating prosperity and well-being for the many? That’s a central question behind Re-Imagining Capitalism (Oxford University Press, November 2016), a book coedited by McKinsey’s global managing partner, Dominic Barton; York University’s Schulich School of Business dean, Dr. Dezsö J. Horváth; and Matthias Kipping, Richard E. Waugh chair of business history at the Schulich School. In this video interview, Horváth speaks with McKinsey’s Rik Kirkland about the various forms of capitalism around the world, how societal well-being is strongly linked to enhanced competitiveness and productivity, and how a new generation of students wants to ensure that economic priorities meld well with societal needs.

Video and transcript.

Note: "Societal well-being" is called "social welfare" in economics, political science, and sociology, but "welfare" has been tarred with a negative connotation by its opponents. The new term is "well-being."

McKinsey Insights & Publications
Reimagining capitalism to better serve society

Brad DeLong — The New Socialism of Fools

Good read. BDL argues that globalization is not the problem it is taken to be. The solution is not more nationalism and less globalization but rather full employment economic policy that addresses social welfare and economic distributional issues simultaneously. 

The problem is not globalization as much as neoliberal globalization, where the gains go to the top of the town. This results in distributional issues that affect social welfare and create a political reaction.

Now if he would just jump on the MMT bandwagon about effecting a full employment policy using enlightened fiscal policy.

Project Syndicate
The New Socialism of Fools

Brad DeLong | Professor of Economics, UCAL Berkeley

David F. Ruccio — Make GDP great again

Here’s what folks need to understand: mainstream economists like Feldstein, who celebrate an economic system based on private property and free markets, build and use models in which market prices capture all the relevant costs and benefits to society. And, since GDP is an accounting system based on adding up transactions of goods and services based on market prices, for mainstream economists it should represent an accurate measure of the “public’s well-being.”

Mainstream economists can’t have it both ways—either market prices do accurately reflect social costs and benefits or they don’t. If they do, then Feldstein & Co need to stick with the level and rate of growth of GDP as the appropriate measure of the wealth of the nation. And, if they don’t, all their claims about the wonders of free markets simply dissolve.…

This quote summarizes the point — market information doesn't capture social welfare. More good stuff at the link. GPP measures transactions rather than product. Many transactions are non-productive.

Occasional Links & Commentary
Make GDP great again
David F. Ruccio | Professor of Economics, University of Notre Dame

teleSUR — Ecuador's Correa: 'Neoliberalism Has Failed, Not Socialism'

Ecuadorean President Rafael Correa rejected the notion that the leftist and revolutionary governments in Latin America have failed and instead posited that the real failure in the region has been the neoliberal economic model.

“Inequality in a poor country means misery, generalized misery. We must seek out other forms of developing ourselves that are distinct from those fantasies of trickle-down theories,” said President Correa in an interview Sunday.

For Correa the negative press regarding Venezuela, Bolivia, and Ecuador—all led by governments that are proponents of socialism—is partly driven by the political agenda of private media outlets, which have been historically hostile to leftist regimes.…

“Growth is important … but not just any kind of growth, it must be quality growth, growth that favors the poor, growth with social justice, growth with equity,” said Correa.
For the president, the successes of socialism of the 21st century can be seen in the reduction of inequality and poverty experienced in the aforementioned countries.…

teleSUR
Ecuador's Correa: 'Neoliberalism Has Failed, Not Socialism'

Ines Stelk, Steven Bosworth, Dennis J Snower — Technological progress: The other side of the coin

How the trend towards individualism in societies affects economic welfare is debatable, but it is generally agreed that the role of technological progress in spurring individualism is substantial. Exploring the impact of technological progress in a model of individual utility, this column finds that the direct positive effects of technological progress, in the form of innovation and economic growth, may be offset by the indirect negative effects resulting from greater positional competition at the expense of caring activities.

vox.eu
Technological progress: The other side of the coin

Ines Stelk, Steven Bosworth, Dennis J Snower

Zero Hedge — Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard

This is not a joke. He really means it.

If the world listened to his advice, it would result in a Great Great Depression. aka the grandmother of all depressions.

Zero Hedge
Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard
Tyler Durden

Susie Cagie — Best way to solve homelessness? Give people homes.

Homelessness has always been more a crisis of empathy and imagination than one of sheer economics. Governments spend millions each year on shelters, health care and other forms of triage for the homeless, but simply giving people homes turns out to be far cheaper, according to research from the University of Washington in 2009. Preventing a fire always requires less water than extinguishing it once it’s burning.

By all accounts, Housing First is an unusually good policy. It is economical and achievable. The only real innovation lies in how to inspire the necessary compassion and foresight to spur governments into building those needed homes.

But Housing First is not very popular. It runs directly counter to the US meritocratic mythology, where one is presumed to fail or succeed by one’s own hand. The homeless are presumed to have earned their place on the street.

Complement to the Job Guarantee. Food, shelter, health care and a job guarantee are vital needs that should be recognized as human rights in developed societies. The opportunity cost is low when compared with the alternative — a dysfunctional society that perpetuates itself. 

The argument against it seems to be that this would destroy incentive and undermine a capitalistic economy, where capital is prioritized over people and the environment. Societies with socialistic economies get this, however, since they prioritize people and the environment over capital.

Moreover, the argument might have made sense when people had access to resources for obtaining food and shelter by their own initiative, but since primitive accumulation and the proliferation of private property that no longer applies, especially in modern urban life.

It is societal institutions that produced this change and therefore it is up to society to address the consequences adequately so that the social fabric is maintained and no one suffers needlessly where there are adequate resources.

Aeon Magazine

Best way to solve homelessness? Give people homes

Susie Cagie

James Petras — The Right-Left Crossfire and the Post Neo-Liberal Left

The breakdown of the neo-liberal development model, which in turn ignited mass popular movements for radical political-economic transformations; the incapacity of the mass movements to produce a viable alternative worker-peasant based regime; the beginning of a decade long mega commodity boom which provided a huge influx of revenues which allowed the center-left regimes to finance a capitalist recovery, and secure support from the extractive capitalist sector and finance generous increases in wages, salaries and pensions.

These hybrid, extractive capitalist-national-populist regimes were repeatedly elected until the middle of the second decade of the 21st century. The capitalist-populist electoral coalition encountered major opposition with the end of the commodity boom. The fall in world-market prices led to demands by the techno-capitalist elites for measures of fiscal constraints aimed at reducing social expenditures. At the same time they insisted the regimes grant fiscal largesse for the agro-mineral elite by lowering capital gains taxes and increase fiscal incentives for investors.

As a result, the end of the commodity boom led to the termination of the center-left brokered “consensus”. In its place the regimes faced a right-left crossfire: rightwing business associations led successful electoral challenges and large scale street mobilizations, and the left-wing trade unions and social movements resisted through strikes in defense of existing social gains. The question raised by this left-right crossfire is whether this spells the end of the post neo-liberal, hybrid regimes and the return of neo-liberal regimes or class based leftist politics?

What is not in question is the increased class polarization and the challenges to the stability of post neo-liberal regimes.

Clearly the global conditions which sustained the broad social coalition of post neo-liberalism have changed for the worst. The deteriorating prices of commodities and the corresponding decline in revenues that sustained it are no longer present.

The conditions are set for a change in development strategy and socio-economic policies. These changes will necessarily result from the nature and impacts of the attacks from the crossfire between Right and Left. 

We will proceed by analyzing the nature and impact of the Right-Left crossfire under five post neo-liberal regimes in Ecuador, Argentina, Brazil, Bolivia and Venezuela.
We will then proceed to evaluate the relationship of class forces resulting from this conflict and the probable outcomes, including the ways in which the post neo-liberal regimes respond to the crossfire.

Finally, we will address the reason why, in the immediate aftermath of the decline of the post neo-liberal regimes, the Right will probably return to power, rather than the Left.…

James Petras Website
The Right-Left Crossfire and the Post Neo-Liberal Left
James Petras | Professor (Emeritus) of Sociology at Binghamton University in Binghamton, New York and adjunct professor at Saint Mary's University, Halifax, Nova Scotia

Pope Francis — Laudato Si'

ENCYCLICAL LETTER

LAUDATO SI’

OF THE HOLY FATHER

FRANCIS

ON CARE FOR OUR COMMON HOME

“The 21st century, while maintaining systems of governance inherited from the past, is witnessing a weakening of the power of nation states, chiefly because the economic and financial sectors, being transnational, tend to prevail over the political.” (p. 128)

ht/ Bill Moyers & Co.

Sean Monahan — Reading Paine from the Left

Weekend reading.

When Thomas Paine passed away at his small farm in New Rochelle, NY, in 1809, he was impoverished and largely reviled. 

In the United States, then undergoing a dramatic religious revival, he was slandered as an “infidel” and a “drunk” for his attacks on Christianity and his rumored personal moral depravity. This, on top of his tirades against George Washington, the Federalists, andslavery, had decimated his reputation in the country he helped found. 

Across the Atlantic, Paine was condemned as a traitor to the Crown and a dangerous rabble-rouser for his passionate defense of the French Revolution in The Rights of Man, convicted in absentia for seditious libel, and burned in effigy throughout Britain. No single person was seen as a greater threat to the political establishments of his day than Paine, both in the monarchies of Europe and in his own American Republic. 

As a cult of personality around the “Founding Fathers” grew over the course of US history, the author of Common Sense was notably excluded. For about two hundred years, Paine’s image in mainstream American circles was utterly tarnished: Teddy Roosevelt’s view of him as a “filthy little atheist” sums up the prevailing sentiment. It’s no surprise that decades earlier Abraham Lincoln kept his admiration of Paine quiet. 

Nonetheless, interest in Paine spiked during periods of crisis and democratic upheaval in the 1930s and again in the 1960s, and things changed when Ronald Reagan, in his 1980 acceptance speech for the Republican Party’s nomination for president, quoted the great revolutionary’s inspiring promise, “We have it our power to begin the world over again.” Since then, Paine has been readmitted into the lineup of US founders, and has recently been made the unlikely poster boy of the reactionary right, most notably by media personality Glenn Beck. 

Unlikely, because Paine was a consistent advocate of a strong federal government and also a sharp critic of economic inequality and poverty who designed the world’s first fully fleshed-out scheme of social welfare provision. Beyond that, he introduced millions to a radical critique of private property and class society, and pointed to democratic politics as the solution....

Thomas Paine not only conceived of the welfare state in some detail, he also provided for a universal job guarantee.

Perhaps most shockingly, this [welfare] scheme would provided for a network of public work houses in which anyone would be admitted for public employment with full room and board “without inquiring who or what they are,” where anyone is free to “stay as long, or as short time, or come as often as he choose.”

Paine viewed socio-economic problems as fundamentally distributive.

In Rights of Man Part II, Paine shows that society — specifically, “aristocratical” society — creates poverty: “One extreme produces the other: to make one rich many must be made poor; neither can the system be supported by other means.”

The solution was political.

For Paine, the cause of political democracy is inseparable from the economic demands of the poor, and the solution is democratic government: the poor can escape their wretched condition only through politics.

Paine also argued for a tax on land rent to be universally distributed.

He goes on to argue, like John Locke had, that in the state of nature the earth and all its bounties were “the common property of the human race.” But unlike Locke, Paine insists that this right is not forfeited when land is claimed as private property for the sake of cultivation — “it is the value of the improvement only, and not the earth itself, that is individual property.” 

He explains that such private property is justified because cultivation so greatly increases the productivity of the soil, but that in “all those who have been thrown out of their natural inheritance by the introduction of the system of landed property” are owed compensation for that loss by right. 

“Every proprietor, therefore, of cultivated land, owes to the community a ground-rent . . . for the land which he holds,” the funds from which would go towards a new scheme of social security. Again, Paine insists, “it is a right, and not a charity, that I am pleading for.” 

The money raised by this ground rent would be distributed out as an equal payment to “every person, rich or poor” on turning twenty-one, guaranteeing to each citizen a modest inheritance, “means to prevent their becoming poor.” This proposal has often been interpreted as the first suggestion for a universal basic income, but that doesn’t seem to be exactly what Paine had in mind.

Much more in the article, but you get the idea.

The American revolutionary’s formula was groundbreaking: exploitation and inequality are the disease, and democratic politics is the remedy.

Jacobin
Reading Paine from the Left
Sean Monahan

Amartya Sen — Social Choice and Social Welfare

On Kenneth J. Arrow's Impossibility Theorem.

Project Syndicate
Social Choice and Social Welfare
Amartya Sen

Lynn Stuart Parramore — You Won't Believe Conservatives' Absurd Theories They Think Will Cure Poverty

Paul Ryan serves up the latest Turkey-Hand recipe, relying heavily on promoting volunteerism and advocating charity in the place of food stamps to conquer poverty. And if that doesn’t work, hey, folks — just pray! “You cure poverty eye to eye, soul to soul,” Ryan explained to a Heritage Foundation forum. “Spiritual redemption: That’s what saves people.”

Paul Ryan's answer to Pope Francis?

AlterNet

You Won't Believe Conservatives' Absurd Theories They Think Will Cure Poverty
Lynn Stuart Parramore

Kate Connolly — Germany ‘exporting’ elderly to foreign retirement homes

Growing numbers of elderly and sick Germans are being sent overseas for long-term care in retirement and rehabilitation centres because of rising costs and falling standards in Germany....

But with increasing numbers of Germans unable to afford the growing costs of retirement homes, and an ageing and shrinking population, the number expected to be sent abroad in the next few years is only likely to rise. Experts describe it as a “time bomb”.
Germany’s chronic care crisis – the care industry suffers from lack of workers and soaring costs – has for years been mitigated by eastern Europeans migrating to Germany in growing numbers to care for the country’s elderly.

But the transfer of old people to eastern Europe is being seen as a new and desperate departure, indicating that even with imported, cheaper workers, the system is unworkable.

The Raw Story
Germany ‘exporting’ elderly to foreign retirement homes
Kate Connolly | The Guardian

"Innovation."

Peter Cooper — Inviting Visions of a Better World

Peter Cooper invites all to contribute their thoughts on creating a better world. Certainly a worth endeavor as we begin a new year.

Here's an opportunity to join a vision quest based on thinking out of the box.

Heteconomist

Inviting Visions of a Better World
peterc