Category: Folbre

A columnist writing for The Nation says President Obama could pay for an expansive new job creation program by taxing financial transactions by Wall Street traders. The author notes that top national economists, such as UMass Amherst economics professor Nancy Folbre, have supported the idea, noting that European countries already have such taxes. Folbre argues that the current U.S. tax policy encourages speculation in financial instruments that don’t invest in productive outcomes. (The Nation, 8/31/11)

How Will We Pay for Obama’s New Jobs Push? Answer: Tax Wall Street
John Nichols | August 31, 2011

University of Massachusetts Amherst economics professor Nancy Folbre [6], a MacArthur Fellowship recipient who has consulted with the World Bank and the United Nations Development Office professor of economics at the University of Massachusetts Amherst, praised the NNU’s “Tax Wall Street” campaign in a recent New York Times piece that explained the push in an international context.

“Purchases of stocks, bonds and other financial instruments in the United States go untaxed but for a tiny fee on stock trades that helps finance the Securities and Exchange Commission. In Britain, by contrast, a 0.5 percent tax on stock transactions raises about $40 billion a year. President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany recently announced plans to introduce a similar tax in the 27 nations of the European Community,” wrote Folbre. [7] “Our current tax policies favor speculative investment in financial instruments over productive investments in human capabilities. This imbalance helps explain why nurses’ unions in the United States (NNU) have been particularly outspoken advocates of a financial transactions tax. As they put it: ‘Heal America. Tax Wall Street.’?”

In her Economix blog, Nancy Folbre, UMass Amherst economics professor, examines why deficit reduction and not unemployment is dominating the public policy agenda. She offers several possible explanations including the fact that high unemployment rate is not adversely affecting overall business profits.   (New York Times, 7/11/11)

July 11, 2011
Unemployment? Who Cares?
By NANCY FOLBRE

The A.F.L.-C.I.O. and other unions keep demanding “Good jobs now!” Progressive think tanks like the Economic Policy Institute carefully monitor employment trends. Many economists, including the professionally prominent members of the Employment Policy Research Network, insist on the need for more attention to the issue. As Till von Wachter of Columbia University put it, “Unemployment is the No. 1 economic problem facing the country today.”

Some business leaders have spoken up. Last summer, Andrew Grove, the former chief executive of Intel, wrote a passionate commentaryfor Bloomberg BusinessWeek calling for a “job-centric” economy.

But this is not something the country can achieve with jobs-oblivious politicians. Why isn’t unemployment reduction front and center on the policy agenda? More specifically, why has the debate over deficit reduction shoved it aside?

First, unemployment is concentrated among the less educated, blacks and Hispanics who lack political or economic clout.

Second, high unemployment is not hurting overall business profits, which have soared to historic heights. In the 1930s, joblessness reduced the demand for consumer goods, idling many businesses as well as workers, creating economic incentives to support public job-creation efforts.

Today, our largest corporations and richest investors are well positioned to take advantage of growing demand in emerging markets far from our shores, whether in the form of increased exports or new investment opportunities.

As a small-business owner explained in a recent Wall Street Journal article, he only sells domestically and does not have the opportunity to “exploit foreign markets that are growing faster.”

Nancy Folbre, UMass Amherst economics professor, writes in the Economix blog about how low birth weight is a strong economic indicator of how a child will do in society. She also argues that exposure to environmental pollution is a key contributor to the health of newborns and has a strong impact on birth weight. (New York Times, 6/27/11)

June 27, 2011
Born to Lose: Health Inequality at Birth
By NANCY FOLBRE

Epidemiologists and economists have long agreed that low birth weight is an important, albeit approximate, predictor of future health problems. A wealth of new economic research tracing individuals over time shows that it is also an approximate predictor of future earnings problems, with statistical effects almost as strong as children’s test scores.

Among other things, low birth weight increases the probability of suffering from attention deficit hyperactivity disorder and lowers the probability of graduating from high school.

In the current American Economic Review, Janet Currie of Princeton, a pioneer in this new area of research, summarizes recent findings and points out that children of black mothers who dropped out of high school are three times as likely as children of white college-educated mothers to suffer low birth weight.

Many of the mechanisms that underlie this inequality are linked to characteristics of the physical environment, such as exposure to environmental toxins.