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Fed Fails to Raise Rates in Timely Manner, End of the World Is ImminentDean Baker / September 19, 2015
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Labor Market Policy Research Reports, September 10 to September 17CEPR / September 18, 2015
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Is There a Shortage of STEM Workers?Kevin Cashman / September 17, 2015
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Latin America and the Caribbean
Haiti Elections News Roundup – September 17Jake Johnston / September 17, 2015
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Ex-Im Mainly Benefits Boeing and Other Corporate Giants. Let it Die!Dean Baker
Tribune News Service/The Island Packet, September 17, 2015
Dean Baker / September 17, 2015
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The Minimum Wage in the United States Is Far Below the International TrendKevin Cashman / September 16, 2015
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Biggest Lesson from Financial Crisis: Wall Street Gets What it WantsDean Baker
Fortune, September 16, 2015
Dean Baker / September 16, 2015
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Bernie Sanders and the Wall Street Journal's $18 TrillionDean Baker / September 16, 2015
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Even Jeb Bush Wants to End the Tax Deduction for Interest PaymentsDean Baker / September 16, 2015
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NPR Does Mind Reading on Overtime Rule, Also Tells Listeners Non-Profits Have Incompetent ManagersNPR had a bizarre piece on the Labor Department's new overtime rules which seemed intended to undermine support for them. These rules would increase from $23,660 to $50,440, the floor under which salaried workers would automatically qualify for overtime regardless of their work responsibilities.
While the piece does present the views on the new rules of Vicki Shabo, the vice-president of the National Partnership for Women and Families, the bulk of the piece is devoted to presenting the views of employers. No workers who will be affected by this rule were interviewed.
The discussion of the employers' perspective begins with this little exercise in mind reading:
"But employers do not believe it would be a windfall for workers. They say they will be forced to cut costs in other ways if the proposed rules take effect as written — and that workers may not like those changes."
Of course NPR reporters don't know what employers "believe," they know what they say. And it is understandable that they would tell a reporter that they don't like the rules because they hurt workers, as opposed to the possibility that the new rules may hurt profits or force a cut in their own pay. Remarkably, two of the three employers whose views are presented in this piece work at non-profits, even though the vast majority of the workers affected are employed by for profit businesses.
Dean Baker / September 16, 2015
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Latin America and the Caribbean
Honduras: austeridad del FMI, política macroeconómica e inversión extranjeraCEPR / September 15, 2015
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Steven S. Reinemund: Director Watch Director of the DayDirectorships: 5
Total director compensation, 2007–2014: $7,507,084
Average annual director compensation: $1,072,441
Average compensation per full year of service as director: $262,311
CEPR / September 15, 2015
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The Elite's Childlike Commitment to AusterityThe landslide victory of left-wing candidate Jeremy Corbyn for Labor Party leader in the United Kingdom has many establishment types bent out of shape. The Blair-wing of the party was literally obliterated, with Corbyn drawing more than four times the votes of his nearest competitor. After giving the country the war in Iraq and the housing bubble whose collapse led to the 2008-2009 recession and financial crisis, the discontent of the Labour Party's rank and file is understandable.
But naturally the elite types are fighting back. In this vein we get a lengthy piece in the New Yorker by film critic Anthony Lane warning us of the evils of Jeremy Corbyn. I will leave for others the discussion of Mr. Corbyn's friends and associates. I am mostly interested in Lane's treatment of Corbyn's economic agenda. He tells readers:
"The national deficit would be erased not through austerity, as practiced by the heinous Conservatives, but through taxes on the rich and by what Corbyn calls 'quantitative easing for people.' This means, we are told, that the Bank of England will print more money: an endearing and almost childlike solution, though not one that has met with unqualified success elsewhere."
First off, "quantitative easing for people" is obviously a political slogan. As such, it is not obviously more silly than "putting people first," or "yes we can." The issue is the substance behind the slogan.
What Corbyn is proposing is directly financing spending by printing money. If that is "childlike" then folks like Paul Krugman have a similar affinity for childlike solutions to economic problems. Just last week, in reference to Japan's continuing economic weakness, Krugman told readers:
"What’s remarkable about this record of dubious achievement is that there actually is a surefire way to fight deflation: When you print money, don’t use it to buy assets; use it to buy stuff. That is, run budget deficits paid for with the printing press."
By stuff, Krugman means things like child care, schools, hospitals, cutting edge Internet, research into clean energy, and other useful items. If the economy is suffering from a lack of demand, the government can directly create it by spending money. And, since the economy is below its potential, it doesn't need tax money to finance this spending, it doesn't even need to borrow, it can simply print the money.
Dean Baker / September 15, 2015
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Latin America and the Caribbean
Honduras: IMF Austerity, Macroeconomic Policy, and Foreign InvestmentSeptember 14, 2015
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FedWatch: Racial Inequality and the Federal ReserveA little over a month ago, while giving testimony before the U.S. House of Representatives, Federal Reserve (Fed) Chair Janet Yellen weighed in on whether or not monetary policy can be used to fight racial inequality in the economy:
“So, there really isn’t anything directly that the Federal Reserve can do to affect the structure of unemployment across groups, and unfortunately, it’s long been the case that African-American unemployment rates tend to be higher than those of on average among—in the nation as a whole. It reflects a number of different sources of disadvantage that are operative there.”
It’s true that many aspects of the racial divide in employment aren’t affected by monetary policy. The Fed can’t eradicate discriminatory hiring practices, racial inequality in the criminal justice system, or disparities in the quality of public schools. Nonetheless, it’s clear that the Fed can play at least some role in helping to create a more equal society.
The Federal Reserve has a dual mandate to pursue maximum employment and stable inflation. If the Fed were to raise interest rates—as some commentators are urging—it would have the effect of destroying jobs (and increasing the debt) for the sake of lowering inflation. This is despite the fact that inflation has been running below the Fed’s 2.0 percent annual target and is actually falling.
CEPR and / September 14, 2015
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To Fix the Debt, Stop Fed Rate HikesDean Baker
Al Jazeera America, September 14, 2015
Dean Baker / September 14, 2015
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Lehman Day: Making Fun of the Second Great Depression CrowdDean Baker
Truthout, September 14, 2015
Dean Baker / September 14, 2015
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The Success of Austerity in Spain: The Soft Bigotry of Incredibly Low ExpectationsDean Baker / September 14, 2015