LyrArc Article Gist
Dan Balz says former prime minister Blair's policies in Britain (1997-2007) closely followed the policies of moving to centrist positions of U.S. president Clinton, with Blair's election in 1997 following Clinton's wins in 1992 and 1996. Clinton followed the Reagan years and Blair the Thatcher years in government, in modifying the early postwar ideas about the economy. The election of Corbyn by 59.5% of the vote of Labor party members, exceeds the 57% achieved by Blair in 1994. The opposing candidates did very poorly. Yvette Cooper, who most resembled Blair's positions was seen as waffling on issues by not taking clear positions. She lost badly with 4.5% of the vote, showing that something significantly has changed with the the deep recession following the 2008 financial crisis, and the recovery through years of austerity policies under Cameron's Conservative government. Balz's view is that this is likely to bring up the same debate in the Democratic party- Corbyn proposes a national investment bank for large investments in education, health services and infrastructure, and a reversal of Labor policies introducing fees for college education to increase opportunity. Sanders has not proposed a national investment bank, but says he would invest in education ( including reversing the spiralling education costs), health services, infrastructure, and other areas. Hillary Clinton has made the issue of upward mobility for the middle and working class a central issue in her campaign, but lacks the authenticity claimed by Sanders, who has tapped into anti-establishment feeling following the lack of recovery in wages under 7 years of the Democratic party government in the U.S. In this context Jeb Bush has also stated at the 2013 CPAC conference that social and economic mobility is the central issue of our times, only he would approach it by giving business incentives to increase business investment to create jobs and increase wages; and by adopting a tax code that would be also fair to the middle and working class....

LyrArc Article Gist
The failure of the 117th Congress to pass key parts of president Biden's agenda for hard hit families and workers in America is now taking place. The 50-50 standoff in the US Senate and failure of two Democrat senators Sinema of Arizona, Manchin of West Virgina to support Biden's Families and Workers Plan leaves key parts of the safety net being left out. This leaves out the education, and paid leave part of the agenda and provisions for utilities to accelerate shift away from coal out of the bill. It fails to implement a new national agenda for upward mobility, child care and paid leave to help stressed out mothers and families. The failure to include even a modest community college 2 years of support at a time when men's college enrollment is dropping to disastrous levels for America's economic competitiveness is a failure of the 117th Congress to grasp the needs of families and workers in America today. Only a new Congress in 2022 can take up the needed action for families and workers in education, health care, child care and help for families. The passage of the infrastructure bill and the current version of the social spending bill can only be seen as a first step in the right direction, after three decades of different administrations neglecting infrastructure, education, healthcare, childcare, elderly care, upward mobility, and climate change. On the plus side as the first step to restore dignity and health of families and workers in America it includes- $150 billion for rental assistance, home buying help, public housing repairs, and building 1 million affordable housing units. $150 billion for federal programs for home health care and community care for older Americans and people with disabilities $165 billion to reduce premiums for people under Affordable Health Care Act, cover additional 4 million through Medicaid, adding hearing coverage but not dental or vision to Medicare. $200 billion for child care tax credit to parents. $400 billion to reduce health care costs and give universal pre-kindergarden for 3-4 year old children. $40 billion for worker training $555 billion for fighting climate change including through tax incentives for sources of energy that are low emission and low carbon. It will be paid for by additional taxes on incomes of very high income earners in annual $1 million plus range, and by having a corporate minimum tax of 15% for large corporations, including on profits overseas, that previously did not pay this tax. A wealth tax on unrealized capital gains of billionaires or other wealth of the richest Americans is left for a future Congress to consider for financing the key parts of climate change provisions, education and health care that were left out. The education and healthcare provisions need to be expanded to restore America's historic mission of upward mobility for all. A provision for Medicare to comprehensively negotiate prices with pharmaceutical companies that would be taken for granted in any advanced country as in Europe, is also left for a future Congress that understands and responds to the dire needs of families and workers in America for affordable healthcare medicine neglected by administration after administration for the last three decades.   ...

LyrArc Article Gist
Germany's export oriented economy and its export oriented companies are struggling in 2021 with broken supply chains and high energy prices. This report in the WSJ looks at how Germany needs to rebuild its economy in a different way. German industrial output was 9% below its 2015 level in August, compared to 2% for the eurozone as a whole, according to EU's statistics agency. Italy's growth was 5% over the same period. There is a redirection underway to bring more production back home after years of outsourcing and outshoring. Other changes taking place are the policies being put in place for net zero emissions by 2050, and the targets for 2030 that would make this possible. This also changes prospects for Germany's large auto industry. By 2030 30-50% of all cars will have to be electric cars. About 30% of Germany's industrial output and exports are tied to overseas demand, 4 times that in the US. From 2003 when competitive overhauls took place under chancellors including Mr. Schroeder, German industrial growth was sustained by demand from China. Now with China looking to internal demand following global tensions on trade, sales of some companies are looking flat instead of sustained year over year growth. What will happen now? Here is what the likely new chancellor from the Social Democrats has to say about the overhaul of the German economy and industry- "It will be the biggest industrial modernization project that Germany has carried out probably for over 100 years, and it will really help our economy." The SDP and Greens that together share the same ideas for rebuilding Germany around infrastructure and climate change and upward mobility, badly neglected in the Merkel years, plan big investments. Big investments are to be made in climate protection, high speed internet, education, research and infrastructure. Germany's net investment rate has been around 0.5% of economic output since 2000, compared to 1% for Italy and 1.5% for the US, according to the World Bank. This WSJ report even says net public investment has fallen below zero as existing assets depreciate. To achieve this transition Germany has identified several problems. One is the delays in investment projects that cost German companies 55 billion euros a year, about half the money invested in research and development, according to Germany's statistics agency. Germany was thought to be an industrial powerhouse but the quality of work in projects and delays so apparent in the Berlin Brandenburg airport infrastructure project clearly shows a decline over the past two decades. This will need to be fixed. Other problems are in getting more workers as Germany faces a shortage of workers for factories to 2030.     ...

LyrArc Article Gist
Administrative costs are one of the key reasons tution costs have increased to excessive proportions in the U.S., putting a heavy burden on the middle class, reducing social mobility that is an important aspect of postwar progress in Europe and the U.S. by putting college out of reach for millions of young people. This also creates a heavy debt burden for young people- U.S. student loan debt passed $1 trillion in 2012- who are less likely to buy a first home because of years needed to repay student loans. The market pressures to control costs do not exist in the same way as industries such as automobiles, because of the demand for college education in a modern globalized economy. Douglas Belkin and Scott Thurm have provided an indepth look at the University of Minnesota to show the spending surge and internal tendencies for faculty and bureaucracy to increase spending on hiring, building expansion to compete with other schools, and salaries to support their own within the college and university system, with a passive student community, and passive parent community, and lack of other outside pressures. Tution and fees for state residents doubled in the last decade at the University of Minnesota to $13,524. The figures tell the story- total debt with borrowing for building construction at U.S. 4 year public colleges tripled to $88 billion between 2002 and 2011, according to the Department of Education. Debt servicing costs doubled at the University of Minnesota to $106 million in that period. Minnesota's government provided $570 million for university operations in 2011, same as 2003-2004 school year even with inflation and 10% higher student enrollment. Yet analysis by the Department of Education and the Wall Street Journal shows in that period the spending increased disproportionately compared to inflation, student enrollment and teaching activity, with little restraint. WSJ analysis showed the University of Minnesota system added 1000 administrators between 2001-2011, with administration hires increasing 37%, double the increase in the students and double that of teachers. During that period the number of employees to manage people, programs and regulations went up 50% faster than the number of instructors, according to the Department of Education. Bureau of Labor Statistics cites this as the reason tution costs went up faster than health care costs. The 19,000 employee payroll at the University of Minnesota means one employee for three and half students. The new university president in 2011, Eric Kaler, interviewed by WSJ's Belkin and Thurm, says no one knew what it cost to run the school when he started....

LyrArc Article Gist
Paul Peterson, a professor who heads the Program on Education Policy at Harvard, says that public school education has not done as well as private or charter school education. In two areas character or values, and school discipline, public schools lag far behind private schools or charter schools. Private schools score 59% and 46% in these two areas, public schools lag far behind at 21% and 17%, in the 2016 Education Next Survey, says Peterson. He says by appointing Betsy DeVos as Education Secretary, the Trump administration sees the need to think how public schools can benefit from improvement in these areas.

LyrArc Article Gist
The European Union Commission says Ireland must recover 13 billion euros in back taxes for giving tax preferences to Apple that are against EU rules. The EU Commission says Ireland allowed Apple to pay a corporate tax rate of 1% on its European profits in 2003, and .005% in 2014. The EU Commissioner says the use of Ireland as the place where Apple pays taxes on operations in Europe has no base in reality, as most profits are earned in other countries outside Ireland. Taxable profits of Apple "did not correspond to economic reality," according to Ms. Vestager, the EU Commissioner.  In the current environment where political upheaval is unsettling the democratic process in the U.S., Britain, Spain, France and Italy, as well as in Brazil and other countries in the developing world- because of deep recessions, and efforts to cut the deficits with deep cuts in state spending including in education and healthcare, basic services- the moves by companies to reduce taxes to these absurdly low levels such as .005% when other companies in the EU are paying 12.5%, is becoming increasingly unpopular. As pointed out in this BBC News article this sounds like the way Carnegie, Rockefeller and Vanderbilt operated during the late 19th century, and were seen as operating in a manner that was above the law. Janet Yellen pointed out at a Boston Fed Conference on inequality in Oct 2014 that the bottom half of the distribution or 62 million households in the U.S. in 2013, had a net worth of about $10,000, One quarter of these households had a net worth of zero dollars. The working class and blue collar workers in the U.S. provide much of the support at Trump rallies. Younger college educated people support Sanders, because of the situation of the working and middle class in the U.S., and a similar situation exists in Europe. It is for the sake of the democratic process and delivering services in education, healthcare, and other basic areas to all, that companies small and large need to pay their fair share of taxes, regardless of size, influence, or technological advantages. Today this is is seen by most leaders who draw public support as the right way forward for the U.S., Latin America, Europe and Asian countries, including proper allocation of resources to best serve the needs of working people. For example the 13 billion euros is equal to all of Ireland's healthcare budget, and 66% of its social welfare budget.    ...

LyrArc Article Gist
Some of the crude rhetoric at Donald Trump rallies, and use of coarse language, according to the NYT. Working class and older Americans show their anger at a system that appears to have left them behind with slogans, stickers, T-Shirts. The idea of the wall figures in much of this and shows that the wall has become not jut about Mexico but a metaphor that captures this anger, that reflects this anger. Another aspect of the 2016 campaign is that those most vulnerable and most in need of help have not sought the comfort of knowing about programs to improve middle class and working class wages, incomes, to build infrastructure, create jobs, stop companies from shifting jobs overseas, plans for improving accesss to health care and education, to ask for specifics and delivery. This is the supreme irony of the 2016 election campaign that not enough attention is going to what will be done for the middle and working class, and what specifics will be delivered, in what time frame- which is essential for restoring the condition of the American middle and working class to where it was in the 2 decades after the Second World War. ...

LyrArc Article Gist
This editorial in the NYT says Bill Clinton moved the Democratic Party to the centre in 1992. In 2016 about 25 years later, after the removal of the Glass Steagall Act led to the 2008 global financial crisis and a deep recession, after the trade relations with China led to loss of U.S. manufacturing jobs over two decades and the hollowing out of industry in the midwest, things have changed. The revolution led by Bernie Sanders, a shrinking middle class, smaller access to college education for the middle and working class, and wide disparities in income, are putting the Democratic Party closer to its roots and the days of FDR. The Democratic Party platform calls for a 21st century Glass Steagall Act to separate normal banking from investment banking, opposes the TPP to prevent any further export of jobs overseas, and goes for a $15 minimum wage. This was also evident at the opening day of the Democratic National Convention when Sanders told the gathering in Philadelphia that even though he was not the candidate, these are the planks of the platform that Hillary Clinton will be pushing for in her presidency. What the editorial does not point out is that the Republican economic platform also calls for reinstatement of Glass Steagall Act, opposes TPP and opposes any loss of American jobs to overseas locations. It differs on the minimum wage leaving it to the states, and it is likely to skew tax cuts towards the wealthy, but also possibly removing the lower income brackets from taxes as Britain has done under the Conservative Party. Both parties today are looking for support from the middle and working class and have directed their appeal to these two groups which are in upheaval. The election of Trudeau in Canada recently also followed this trend, after the hollowing out of Canadian industry in Ontario and Quebec in a similiar pattern as in the midwestern U.S.  ...

LyrArc Article Gist
A new West Coast Model is emerging with ballot measures in the states of Washington, California and Oregon. The model is to make up for decades of faulty income distribution which favored tech communities in west coast states leaving behind people from minority communities and the working class outside tech hubs such as San Francisco, San Jose and Seattle. During this period budgets for education and healthcare, social services and essential infrastructure suffered as budgets were squeezed for local governments. Minimum wage also lagged behind and communities struggled to keep up. Washington votes for a ballot measure that raises the minimum wage to $13.25 statewide and mandate paid sick leave for workers. In California a ballot measure makes permanent an income tax surcharge on millionaires to use these funds for education. In Oregon measure 97 places a gross receipts tax on corporations with annual sales in Oregon over $25 million, raising $3 billion a year for schools, health care and other programs. The California and Washington measures are likely to pass, Oregon uncertain, say experts. And even in Oregon supporters have learned from the experience to put forward new proposals on the ballot. The Washington measure is supported by Nick Hanauer, and Zach Silk, president of Civic Ventures in Seattle, who say it is essential to put more money in workers wages to increase growth and to bring better lives outside the tech hub areas. Most of the tech booms of the last two decades have not touched the areas outside tech hub metropolitan areas. The conservative approach adopted in Louisiana and Kansas of reducing taxes first and then when holes in state budgets developed to cut education, health and other service expenditures has not worked, and it has led to the backlash in the form of the new West Coast Model, which is expected to be brought up in other states in the east and midwest. The tech hub areas have grown with the boom in tech but this has largely ignored the rural areas, communities just outside of the tech cities, and led to uneven and distorted growth shortchanging the working class and the middle class, and hurting investment in education and healthcare across each state. Bill Whalen, a research fellow at Stanford University's Hoover Institution conservative think tank ,says that its hard to deny that the balanced growth for all communities across the state has lagged far behind as the tech booms boosted growth in the economies of California, Oregon and Washington. An article in the German online site Zeit on Silicon Valley described this vividly showing how this can happen in communities sitting side by side in the San Jose area, with minority Hispanic communities and working class communties seeing very little of the benefits of growth. ...

LyrArc Article Gist
Prof. Peterson of Harvard and Hanushek of the Hoover Institution, authors with Woessmann of the book "Endangering Prosperity: A Global View of the American School," offer some startling reminders about the importance of education to economic growth and incomes in countries. Simply by raising the math standards in the U.S. to the higher standards in Canada would raise GDP by three fourths of one percentage point. One advantage that the U.S. enjoys comes from its good university systems, open markets, rule of law, tax rates, and open immigration policies, which give it about two thirds of a percentage point in higher GDP growth per year. The estimates are from the authors calculations. For the period 1960-2009, a period of rapid growth in Asian countries Korea, Taiwan, Singapore and Hong Kong, higher test scores in math and reading compared to the wrold average as measured by NAEP test and PISA, have led to 2% higher GDP growth. NAEP shows only 32% of U.S. high school students proficient in math compared to 45% in Germany and 49% in Canada and 63% in Singapore. By contrast to Korea and Taiwan, Peru, Argentina, the Philippines and S. Africa have about 2% less in GDP growth because of lower scores compared to the world average....

LyrArc Article Gist
Robert Gordon of Northwestern University describes the problems in American Education and how this is the first generation which will not do better than its parents in educational attainment. The cost says Gordon comes in lower potential economic growth rates.

LyrArc Article Gist
The U.S. Census Bureau shows incomes of American households, the median household income, surged in 2015 by 5.2%. This increased by $2800 to $56,500. This is the largest increase since 1967. It shows that steadily improving employment and hiring is leading to improvement in incomes for the middle and working class. Ris in minimum wage has also helped . The largest increase was for the lowest 20% of the income tiers. Full time working women did better than men, with increase annually of 2.7% for women, and 1.5% for men. Nocitizen incomes increased 10.5% to $45,100, native born households went up 4.4% to $57,200. The number of people without health insurance also declined from 33 million or 10.4% of the population to  29 million people or 9.1%. Another way the changes are helping lower income households is the decline of the official poverty rate to 13.5% in 2015 by 1.2 percentage points from 14.8% in 2014. Through a series of small incremental steps the path is being set for a recovery of household incomes for the middle class and working class. A bright spot is that the improvement has affected all age groups, household types, regions and ethnic groups, though among full time workers women did better than men. In this recession older white men have had more difficulties getting back into the workforce. This is reflected in the political scene in 2015-2016 for the election season. ...

LyrArc Article Gist
The National Assessment of Education Progress, NAEP, which is a report card of educational levels in the U.S. secondary school system shows 36% of fourth graders in the U.S. are proficient in reading for 2017. For eighth graders this drops to 34% in 2017. This shows that a little over a third of fourth and eight graders are achieving proficiency in reading, a glaring sign of failure leaving about two thirds of young people behind. With declining level of reading proficiency and proliferation of social media, the bottom 25% are faring much worse than even this dismal result.

Between 2015 and 2017 there was no improvement in NAEP scores.

LyrArc Article Gist
Rosa Ines Rivera, a cook at the cafeteria for the Y.H. Chan School of Public Health, Harvard University, with 2 small children, describes the protests over the increase by Harvard administration of the premiums charged on health insurance that now take up over 10% of the income. She says she lives in public housing with her parents as she lost her apartment because she is behind on the rent, and now cannot afford to pay the increase in premiums. About 750 workers at Harvard are on strike on this issue. She says dining hall workers want the current pay of $31,193  a year increased to $35,000 to provide a living wage that helps them afford medical care, because of the high cost of living in Boston.  To get some idea of the plight of workers who provide the kind of nutritious meals that a lot of students depend on for healthy living- Rivera says she takes in about $450 a week after taxes, or about $1800, rent is $1150, which leaves $650 for herself and two children for all food, and expenses in Boston. The $4000 in premiums for health insurance would be about 330 per month, leaving her about $320 for food and living expenses with 2 children. Why the need to bring up children in poverty in America, for generation after generation, after putting in a full day of work? ...

LyrArc Article Gist
Obama's State of the Union address in 2014 focusses on increasing the minimum wage, reducing inequality and creating opportunities for the middle class. It marks a shift to doing things by executive order wherever possible to avoid protracted debates and delays by Congress.

LyrArc Article Gist
Friedman reviews Acemoglu and Robinson's new book, "Why Nations Fail." Acemoglu says that nations fail when wealth and opportunities are concentrated in the hands of few people, that a condition for societies to succeed is to create opportunities for more people. For this to happen it is important to create inclusive political and economic institutions. This is an important insight, but for Western society this is an insight as old as Adam Smith when he pointed out the importance of this aspect of western societies after the feudal period in his "Wealth of Nations." For Smith it was the failure to create inclusive societies that led to the gradual unravelling of societies in the river valleys of the Yangste and the Ganges, in China and India, of increasing poverty and the gradual disappearance of what constituted the middle class in India and China. Chapter 8 titled "Of Wages and Labor" in the "Wealth of Nations" makes specific reference to this.