Monthly Archives: December 2011

Legislature considers single-payer healthcare bill

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)

Economist Gerald Friedman, from UMass-Amherst, noted at the hearing that a single-payer system could reduce health care costs by nearly $13 billion a year (or 19 percent ) in Massachusetts. Even after expanding coverage to all Massachusetts residents, this would leave savings of over 17.6 percent of current expenditures. Municipalities in particular would benefit; according to Friedman’s calculations, local governments would save over $350 million a year.

Friedman also noted that, when added to significant administrative savings within companies, a single-payer system would dramatically enhance the competitiveness of Massachusetts companies, adding nearly 100,000 additional jobs to the economy.

Boyce explains Econ4 in Valley Advocate

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.”

Mukherjee wins best paper at ISLE conference

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.

Heim interviewed for TV series on capitalism

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.

Econ faculty featured in Chronicle of Higher Ed

UMass Amherst Economics Professors James Boyce, Gerald Epstein and Nancy Folbre and Econ4, a collaborative organization which originated at UMass Amherst earlier this year, are featured in a Chronicle of Higher Education article which discusses the effort to expand viewpoints and teaching methods in the field of economics. Boyce, Epstein and Folbre argue alternatives to the orthodox approach. (The Chronicle of Higher Education, 12/13/11)

 

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.

 

How to Create 19 Million Jobs and Push Unemployment Below 5 Percent

A new report from the Political Economy Research Institute at UMass Amherst says U.S. commercial banks and large nonfinancial corporations have been carrying huge cash hoards and other liquid assets, totaling $1.4 trillion. At the same time, small businesses have been locked out of credit markets, preventing them from expanding. In the report, UMass Amherst Economics Professor Robert Pollin, James Heintz ’01 PhD, Heidi Garrett-Peltier ’10 PhD and Jeannette Wicks-Lim ’05 PhD of PERI examine the impact that mobilizing these excess liquid assets into productive investments could have on job creation. They find that if we moved those liquid assets into business expansions, U.S. employment could expand by about 19 million jobs by the end of 2014, with unemployment falling below 5 percent. (Physorg.com, 12/7/11; News Office release)

>> Download “19 Million Jobs For U.S. Workers: The Impact Of Channeling $1.4 Trillion In Excess Liquid Asset Holdings Into Productive Investments”

Faculty support of Occupy Wall Street movement

UMass Amherst Economics Department faculty continue to participate in events and publish information on the Occupy Wall Street movement. The “Occupy” protests started on Wall Street and have spread internationally. Protests have been held locally in Amherst, Boston and Northampton.

UMass Amherst Economics Professor Arindrajit Dube, who is also a research fellow at the Institute for the Study of Labor (IZA) based in Bonn, discussed the Occupy Wall Street movement with his colleague Marta Murray-Close for the UMass Amherst Department of Economics Echoes alumni newsletter. (Echoes, 12/12/11)

In her Economix blog, Nancy Folbre, UMass Amherst economics professor, says concerns about growing economic inequality that spurred the rise of the Occupy Wall Street movement should be the focus of a wider discussion by economists about capitalism and its effects. (New York Times, 11/28/11)

Gerald Friedman participated in an Occupy Wall Street Teach-In at Smith College. His talk can be viewed here. (11/12/11)

More than 350 economists have added their name in support of the Occupy Wall Street movement. Read their statement and watch a video featuring UMass Amherst Professors James Boyce, Nancy Folbre and Mwangi wa Githinji.

Friedman interviewed on Press TV

Gerald Friedman

Gerald Friedman, a professor of Economics at University of Massachusetts Amherst, says there is “a general rise in popular discontent” in the United States due to the country’s economic downturn. 

Back in 2009 and 2010, Americans saw a revival of the Tea Party, the right wing populism and “now with Wisconsin, with Ohio, with the Occupy movements we may see a revival of the left wing populism,” he told Press TV’s U.S. Desk on Saturday.

He also said that the public in Wisconsin is supporting collective bargaining rights of unions which state officials have been targeting as a method to balance their troubled budgets by cutting jobs and benefits. Watch the interview. (Press TV, 12/12/11)

Folbre blogs about British austerity measures

Nancy Folbre

Nancy Folbre, UMass Amherst economics professor, writes in the Economix blog about how the British government is dealing with its debt problems by imposing strong austerity measures which include cutting pension benefits and strictly limiting wage increases for public-sector workers. She says the cutbacks have stalled the economy and are sparking protests from middle-class and working people there. (New York Times, 12/5/11)

Cuts in public spending seem to reflect a divide-and-conquer strategy. Planned increases in unemployment benefits next year will be paid for by cuts in tax credits for low-income families.

Although the Cameron government insists that it remains committed to a longstanding British campaign to reduce child poverty, it has scrapped its plans to increase the child tax credit. Families with children in the lower half of the income distribution will be hurt most.

Opposition to the austerity program is growing. On Wednesday – just as I was leaving the country – public-sector workers staged the largest strike in a generation, closing more than half of all state schools, as well as many hospitals.

Protesters from Occupy London found their way to the office of the highest-paid chief executive in the country, Mick Davis of Xstrata, to brandish a banner reading “You get £18,426,105, we get austerity.”

 

Dube: Raising minimum wage does not cause job loss

Arindrajit Dube

Arindrajit Dube, UMass Amherst economics professor, comments in a Wall Street Journal story about how businesses in states that are about to increase the minimum wage are looking for ways to cut costs.

According to Dube, there is no “‘evidence of any loss of employment or hours for the type of minimum-wage changes we have seen in the U.S. in the last 20 years’….Earlier this year, Mr. Dube and two colleagues used government data to compare employment figures in counties that border states with different minimum wages. If employers cut back on labor, it’s generally due to poor economic conditions, not pay requirements, Mr. Dube says.” (Wall Street Journal, 12/1/11)