UMass Econ in the News

Robert Pollin

Robert Pollin, UMass Amherst economics professor and co-director of the Political Economy Research Institute, says Standard & Poor’s decision to downgrade the U.S. government’s credit rating was based on a mathematical error – they pegged the national debt $2 trillion too high. He also says the ratings agency appears to be posturing, possibly in an effort to rehabilitate its reputation which was severely damaged by the mortgage meltdown where AAA ratings were routinely given to very risky investments. Pollin also predicted that a downgrade would have a negative impact on the stock market because investors often make decisions on incomplete or even inaccurate information. (The Nation, Huffington Post, 8/3/11; The Nation, Sun-Gazette[Williamsport, Pa.],  8/8/11)

The Standard & Poor’s Agenda
George Zornick
August 8, 2011

The Standard & Poor’s analysis is all the more silly given the haphazard way in which they calculated the national debt, confusing two different analyses by the Congressional Budget Office and pegging the national debt $2 trillion too high. “This is like an undergrad student mistake,” Robert Pollin, a professor of economics at the University of Massachusetts and co-director of the school’s Political Economy Research Institute, told The Nation.

Nobody is laughing at the report’s collateral damage, however. Stocks continued to plunge Monday morning, in what Forbes calledthe “Standard & Poor’s stock market crash.” Pollin correctly predicted last week that a downgrade would likely not have an impact on Treasury bonds but could rattle stocks, because investors often “act on the basis of incomplete, or even inaccurate, information” and could “interpret the downgrade as evidence of a rising default risk.”

Robert Pollin

Robert Pollin, UMass Amherst economics professor and co-director of the Political Economy Research Institute, is cited in “Sustainability Jobs Get Green Light at Large Firms” an article which appeared in the Wall Street Journal earlier this week. Pollin found that every $1 million spent on green-related projects creates about 17 jobs for the life of the project. The article notes that while unemployment remains high, companies seem to be hiring for positions relating to sustainability or renewable energy. In fact, large corporations like Coca-Cola Co. and United Parcel Service Inc. have both recently hired chief sustainability officers, charged with making sure their companies save energy and are environmentally responsible. (Wall Street Journal, 7/11/11)

Robert Pollin

Robert Pollin, UMass Amherst economics professor and co-director of the Political Economy Research Institute, says controlling health care costs is at the heart of the nation’s long-term debt problem. Pollin suggests that it is possible to adopt a universal health care plan that could reduce per person expenditures, citing other advanced economies as examples. “What we really want is universal health care…for everybody, and to do it in a way where the costs are at least more or less in line with other advanced economies. Right now, the United States spends, on average, about twice as much per person as do other advanced economies, like Canada, like France, like the United Kingdom. And that’s not due to Medicare. In fact, Medicare is actually a relatively cheap way to deliver decent health care. The problem is the private insurance companies and the private pharmaceutical companies. And that’s what needs to be controlled to get long-term health care costs down. (Real News Network, 6/16/11)

Robert Pollin

Robert Pollin, UMass Amherst economics professor and co-director of the Political Economy Research Institute, was featured in the story, Is Obama’s Bet On Green Jobs Risky? on 90.9 wbur, Boston’s NPR news station. The story notes that clean energy projects as a whole have received approximately $95 billion in funding and questions whether this is a risky investment. While there is uncertainty as to what the next big economic growth sector will be, there is reason to be optimistic about investing in clean energy. According to Pollin, who was hired by the Commerce Department to run the numbers, the government’s stimulus program on green activities yields approximately 17 jobs per $1 million of expenditure. This compares favorably to military spending which creates about 11 jobs per $1 million and to the oil and gas industry which produces about 5 jobs per $1 million of expenditure. Pollin notes that the payoff is higher because kick-starting a new industry requires more manpower. ”There’s way more jobs in clean energy because essentially there’s a lot more construction jobs, there’s a lot more manufacturing jobs, there’s a lot more transportation jobs,” he said. “So it’s really the process of building the new industry that makes it a good generator of jobs.” (NPR, June 13, 2011)

Robert Pollin

A recent proposal by Robert Pollin, economics and co-director of the Political Economy Research Institute, calls for having the federal government create strong incentives for both lending by banks to small business and for businesses to seek loans. He says currently the private credit markets are locked up, especially for small businesses. Pollin’s proposal uses federal loan guarantees to boost bank lending and a tax on excess reserves held by banks. (Washington Post, 9/28/10)