M.V. Lee Badgett

M.V. Lee Badgett, UMass Amherst economics professor and director of the Center for Public Policy and Administration, writes a column in the online New York Times about how President Obama could stop workplace discrimination based on sexual orientation for companies doing business with the federal government by issuing an executive order. She argues that such a move would underline the president’s commitment to non-discrimination and would be a sound business practice for contractors who would see improved production and less workplace strife. (New York Times, 2/6/12)

In the past, executive orders setting standards for contractors have not only put an American ideal of equal opportunity into practice; they have also helped show employers that ending discrimination is good for business. Employers who act out of bias waste valuable training and often pass over the best person for the job. In the case of gay and transgender workers, workplace discrimination comes with an added cost to employers, leading other lesbian, gay, bisexual and transgender workers to fear disclosure and contributing to stress, illness and lower productivity.

Perhaps the most convincing evidence that nondiscrimination policies are good business policy comes from businesses themselves. A recent Williams Institute study of the 50 largest federal contractors and the 50 biggest Fortune 500 companies found that nearly all had policies against sexual orientation discrimination, and almost all said that diversity was good for business. They also described their policies against sexual-orientation and gender-identity discrimination as a sound business decision, resulting in more productive and loyal employees, more good ideas and a stronger customer base. That means the federal government and American taxpayers get more efficient contractors, whether for designing software applications or supporting troops in Afghanistan.

Requiring federal contractors not to discriminate against workers based on sexual orientation or gender identity lets the American public win twice — as taxpayers and as workers. New research of mine shows that by issuing an executive order, President Obama could cover more than 16 million additional workers against discrimination. Following the legacy of almost every president since World War II and the lead of most of the nation’s top companies, the president should once again put our government on the side of equal opportunity for all.

James Crotty

“The Austerians Attack!” an article by James Crotty, UMass Amherst economics professor emeritus, is the featured cover story for the February issue of In These Times.

In the article Crotty writes about recent austerity measures, like public-sector layoffs and budget cuts, that have been imposed as a way to reduce the deficit. Crotty argues that it is possible to shrink the public debt burden without compromising important social spending. Crotty’s article offers a historical context to the current deficit and to possible solutions. (In These Times, 1/30/12)

Fronts in the austerity war

The state and local government battle: The Right has mounted a ferocious attack on New Deal programs at the federal, state and local government levels.

But excessive long-term growth in social spending did not cause the large current and prospective deficits at the state and local levels. The four main causes of these deficits are:

1. Slow economic growth since 2001.

2. The deep recession that hit in mid 2008. In 2009, 20010 and 2011, state revenues fell by an average of 13 percent each year – a revenue loss unprecedented in the post-World War II era.

3. A collapse in the value of pension fund assets as a result of the financial meltdown. Between mid-2007 and mid-2009, pension fund accounts lost $900 billion in value.

4. An erosion of the tax base. Thanks to a decades-long process of corporate tax cuts, state corporate income taxes fell from 10 percent of state revenue in the 1970s to 5.4 percent by 2010. Tax erosion has been exacerbated by the fact that in response to the crisis – and even in the face of exploding deficits – many states have further cut corporate taxes. Governors justify such tax cuts on the grounds that they will help attract new business to their states. But these cuts create a typical “race to the bottom” dynamic in which, as a whole, states gain no additional investment.

The combination of revenue losses and the rise in spending on the social safety net, caused by the recession, generated a total estimated annual budget gap of $140 billion in 2010, or 21 percent of state spending commitments. Federal grants covered about one-third of the gap that year, but those funds are drying up. Since almost all states are legally required to avoid deficits, and since most states refuse to raise taxes substantially (if at all), the gap has to be eliminated primarily through spending cuts. Thus, the austerity war rages.

States are cutting funds for programs such as healthcare for the poor, home care for the infirm, and support for education at the elementary, high school and college levels. From the official end of the recession in June 2009 to June 2011, more than 467,000 state and local jobs were lost, including 188,000 jobs in schools. At a similar point after the end of the 2001 recession, 249,000 jobs had been added.

Charalampos Konstantinidis

Charalampos Konstantinidis, UMass Amherst graduate student, has received a William Waters Grant from the Association for Social Economics. Konstantinidis was awarded the $5,000 grant for his research proposal, “How Resilient Is ‘Green’? Organic Farmers in the Crisis of European Capitalism.”

The William R. Waters Research Grant was established in 1999 in honor of William R. Waters, editor of the Review of Social Economy for many years and President of ASE in 1987.  The grant was first awarded for Summer, 2000.

The purpose of the William R. Waters Research Grant Program is to inspire economists to organize their research in social economics and social economy along the lines suggested by William Waters in his 1988 presidential address to the Association for Social Economics.

The major concern of social economics is explaining the economy in its broadest aspects; that is, showing how human beings deal with the ordinary business of using human and physical resources to achieve a level of material comfort. Explanation includes cultural, political, and ethical details as they are needed for a full understanding. As in any economics, there are three parts to social economics. First is the philosophical base of the social economist, which may or may not be a reflection of the philosophical base or ethos of the society he/she is studying. Social economics (or any economics) builds upon it. It is the hard core as in the recent popular literature of the philosophy of science. The second part of the discipline is a description of the significant characteristics of the economy. The economist must observe the multiplicity of economic reality and abstract those characteristics that are substantive. The two together, the philosophical premises and the empirical observations, will determine the third part of the discipline, social economic policy. Policy formulation is thus a mix of the first two. [William R. Waters, presidential address, “Social Economics: A Solidarist Perspective,” Review of Social Economy, 1988, p. 113 ff.].

Gerald Epstein

Last year Gerald Epstein, UMass Amherst economics professor and co-director of the Political Economy Research Institute, and Jessica Carrick-Hagenbarth, UMass Amherst graduate student, sent an open letter to the American Economic Association urging the organization to adopt a code of ethics for the economics profession that would require “disclosure of potential conflicts of interest that can arise between economists’ roles as economic experts and as paid consultants, principals or agents for private firms.” The letter was signed by over 300 economists including Nobel laureate George Akerlof and Christina Romer, a former advisor to US president Barack Obama.

At its annual meeting earlier this month, the Executive Committee of the American Economic Association adopted extensions to its principles for authors’ disclosures of potential conflicts of interest in the AEA’s publications. Epstein said in a recent interview that “the AEA guidelines are a very big step forward. They make very clear the importance of disclosure of potential conflicts of interest by economists and set out in detail the types of conflicts that should be disclosed. In some ways these guidelines are stronger than i had expected… They require disclosure with respect to publication in AEA journals, rather than just recommend it.” (Economics Intelligence, 1/8/2012; Wall Street Journal, 1/9/12)

Gerald Friedman

S501, “An Act Establishing Medicare for All in Massachusetts,” was presented at a legislative hearing earlier this month at the State House and supported by state Sen. JamieEldridge (D-Acton) and state Rep. Jason Lewis (D-Winchester), health care advocates, providers, employers, and employee union leaders. UMass Amherst Economics Professor Gerald Friedman noted during the hearing that a single-payer healthcare system would reduce costs, extend coverage and create jobs. (Nashoba Publishing, 12/15/11)

James Boyce

James Boyce, UMass Amherst economics professor, is interviewed by the Valley Advocate about Econ4, a new initiative focused on economics for people, for the planet, and for the future. The organization supports the Occupy Wall Street movement and opposes what it calls “the ideological cleansing of the economics profession” and the “political cleansing in the vital debate over the causes and consequences of our current economic crisis.” (Valley Advocate, 12/22/11)

“We can’t just write on our computers,” Boyce says. “We need a strategy for communicating ideas. We aim to do an end run around the corporate-controlled media and its talking heads by using new information technologies.”

By contributing Internet-friendly teaching materials and creating a collaborative space for an online community of dissident economists—their Network for Innovative Economics Teaching—Econ4 hopes to change the study and implementation of economics.

“Part of the problem is economics itself, in the research being done and the economics being taught,” Boyce continues. “We want to change the public understanding of how the economy works, and, more importantly, how it should work.”

Avanti Mukherjee

Avanti Mukherjee, UMass Amherst Economics graduate student, was awarded the Sanjay Thakur Young Labour Economist award for the best paper at the 53rd annual conference of the Indian Society of Labour Economics (ISLE) held at Udaipur, Dec 17-19. This award is given to an economist under the age of 40, who writes and presents a paper at the annual meeting. This year around 350 papers were eligible, and Avanti was given the award for her paper ”Exploring Inter-State Variations of Rural Women’s Paid and Unpaid Work in India.” 

The ISLE was founded in 1957 by distinguished Indian academics, in the field of labour and industrial relations, especially Shri V.V. Giri, who later became the president of India.

Carol Heim

Carol E. Heim, professor of economics and CPPA faculty member, was interviewed earlier this month for a six-part television series on capitalism. The series will explore the history of capitalism and its contemporary presence around the globe. Written and directed by documentary filmmaker Ilan Ziv, it is organized around key historical debates and thinkers, and will air in 2013. Heim was interviewed about Joseph Schumpeter, a 20th-century economist who focused on innovation, entrepreneurship, and large-scale firms. In Capitalism, Socialism, and Democracy, he highlighted the “creative destruction” that characterizes capitalism, incessantly destroying old structures and creating new ones. Heim also answered questions on the emergence of capitalism, its distinctive institutions, and its historical evolution.

James Boyce

The founders of Econ4 want the economy, and the study of economics, to pay more attention to such issues as the fair distribution of opportunities; to emphasize minimizing vulnerability in the economic system instead of maximizing efficiency; and to strive to give a fuller accounting of the costs and benefits of market and government decisions, including consequences for the environment and the value of caring for dependents.

“Our basic aim is to try to produce a change in economics in the United States,” said James K. Boyce, professor of economics at UMass-Amherst, and a founder of the group. “We see a connection in how the economy is such a mess and what has happened in the economics profession over the last two decades.”

The continuing political debate over whether the government should intervene in the markets, or whether they should be left to themselves, also needs to be reframed, Mr. Boyce said. “The central question is the distribution of wealth and power,” because the two are increasingly correlated.

“If you don’t have purchasing power, you lose when markets operate. If you don’t have political power, you lose when it comes to how governments operate,” he said. “Do we live in a democracy or an oligarchy?”

Gerald Epstein

Higher education is no stranger to complaints of ideological dominance in certain disciplines, but they regularly come from conservative scholars who see a bias against their viewpoints. The irony is not lost on those who want economics to be more intellectually inclusive.

While he acknowledged that political bias probably does sometimes exist in such departments as gender or ethnic studies, the difference in economics is that the bias is not just one of perspective but also of methods, said Gerald A. Epstein, a professor of economics at UMass-Amherst and a founder of Econ4.

“The problem is that their view of how to think like an economist is extremely narrow to the point of being cut off from some of the major questions affecting society,” Mr. Epstein said. “In the end it is a form of indoctrination.”

Nancy Folbre

While every discipline is resistant to unorthodox ideas, said Ms. Folbre of UMass-Amherst, this tendency is amplified in economics departments because its scholars study how economic power is deployed. “Whether you favor the current deployment of power has big implications for what kind of resources you can get,” she said. “It’s more subject to ideological bias than sciences that aren’t so embedded in realpolitik.”

Ms. Folbre pointed to the pay that economists earn as proof of the perceived value of the discipline.

Over the past 30 years, economics and business professors have seen their salaries soar in comparison with their colleagues, according to a recent analysis published in The Chronicle. In 1980, a full professor of economics earned 13.9 percent more than a full professor of English. Thirty years later, the economics professor earns 41 percent more. Similarly, business faculty were paid 11 percent more than the typical full professor of English in 1980. Business professors now earn 50.9 percent more. The only gap larger was for law professors.

“The closer you are to the center of power, the better you’re paid,” Ms. Folbre said. The stakes and penalty for acting out, she added, also increase.

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