Archive for April, 2013

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Special mention

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Given the awful track record of the economics departments at Harvard and elsewhere, it’s a bit strange that the economics department at the University of Massachussetts Amherst is referred to as “offbeat” [ht: ke].

Not to mention the fact that the fundamental errors in the now-infamous Reinhart-Rogoff study were first identified by Thomas Herndon, a graduate student at UMass.

It used to be called a radical economics department. In more recent times, it’s often referred to as heterodox economics. Yet, even after the “radical package” was hired back in 1973, the department only ever included a minority of nonmainstream economists. (In the video above, Don Katzner, Sam Bowles, and the late Stephen Resnick discuss some of that history. Matthews’s article also includes links to two other sources: Katzner’s book and a 2007 Nation piece by Chris Hayes.)

But that’s how it is in economics, even now five years into the Second Great Depression, which of course was precipitated by following the policies advocated by mainstream economists: having even a smattering of non-believers is enough to identify the department as something out of the ordinary—whether radical, heterodox, or simply offbeat.

Lifestyle-Graffiti-Crop

The founding editors of the British journal Soundings—Stuart Hall, Doreen Massey and Michael Rustin—have published an online manifesto in which they argue for disrupting the current neoliberal common sense and challenging the assumptions that organize our twenty-first-century political discourse.

Three ideas are, in my view, particularly important. First, “mainstream political debate simply does not recognise the depth of this crisis, nor the consequent need for radical rethinking.” That indictment is accurate not only for the current political debate but also for mainstream political and economic thought, both liberal and conservative—although there are plenty of intellectuals who are willing to take the “pay to play” in the sandbox of neoliberalism.

Second, neoliberalism has never succeeded in conquering everything. It is, instead, a project, an attempt—not always or everywhere successful—to colonize the world.

It operated within, and created, a world of great diversity and unevenness. Its early – classic – laboratory was Chile, but the rise of South East Asian tigers was, critically, a state-aided development (by no means the official neoliberal recipe). And in spite of the Western triumphalism of 1989, Russia also retains its specificities – a hybrid of oligarchic and state capitalism combined with authoritarianism. China, too, struggles to define a different model; it currently combines centralised party control with openness to foreign investment, and acute internal geographical dislocations and widespread social conflict with break-neck rates of growth and the lifting of hundreds of millions out of poverty. Indeed, conflict has erupted in many parts of the world where the neoliberal orthodoxy has been adopted. India, so frequently lauded for its embrace of the market consensus, exhibits both extraordinary rifts between the new elites and the impoverished, and multiple and persistent conflicts over its current economic strategy. Other major sites of conflict have been the water and gas wars in Bolivia, and the struggle of ‘the poors’ in Thailand. The emerging articulations of progressive governments and grassroots social movements in Latin America are, in varying ways and in varying degrees, responses to the impact of previous neoliberal policies. The alter-globalisation movement has been vocal. This has not been a simple victory.

Third, the shift in economic and social power since the 1970s has not been driven by a simple logic or single motor.

The economic is critical; but it cannot determine everything – even ‘in the last instance’, as Althusser famously argued. Any given conjuncture represents, rather, the fusion ‘into a ruptural unity’ of an ensemble of economic, social, political and ideological factors where ‘dissimilar currents … heterogeneous class interests … contrary political and social strivings’ fuse. What has come together in the current neoliberal conjuncture includes class and other social interests, new institutional arrangements, the exercise of excessive influence by private corporations over democratic processes, political developments such as the recruitment of New Labour to the neoliberal consensus, the effects of legitimising ideologies and a quasi-religious belief in the ‘hidden hand’, and the self- propelling virtues of ‘the market’.

So, there we have it: a neoliberal order in crisis that simply cannot be grasped or contained by mainstream political and economic thought, which has only ever involved an incomplete and always-contested attempt to remake the world, and which represents the contradictory fusion of economic and non-economic processes and events.

That’s a very good start. I look forward to reading the next installments of the Kilburn Manifesto.

uneven-recovery

According to a new report by the Pew Research Center,

During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%. . .

From 2009 to 2011, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896.

These wide variances were driven by the fact that the stock and bond market rallied during the 2009 to 2011 period while the housing market remained flat.

Affluent households typically have their assets concentrated in stocks and other financial holdings, while less affluent households typically have their wealth more heavily concentrated in the value of their home.

From the end of the recession in 2009 through 2011 (the last year for which Census Bureau wealth data are available), the 8 million households in the U.S. with a net worth above $836,033 saw their aggregate wealth rise by an estimated $5.6 trillion, while the 111 million households with a net worth at or below that level saw their aggregate wealth decline by an estimated $0.6 trillion.

Because of these differences, wealth inequality increased during the first two years of the recovery. The upper 7% of households saw their aggregate share of the nation’s overall household wealth pie rise to 63% in 2011, up from 56% in 2009. On an individual household basis, the mean wealth of households in this more affluent group was almost 24 times that of those in the less affluent group in 2011. At the start of the recovery in 2009, that ratio had been less than 18-to-1.

Now, that’s what I call an uneven recovery!

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Fast food and retail workers are taking to the streets of downtown Chicago today to demand higher wages.

“These are poverty wages and homelessness wages,” Lorraine Chavez of the Workers Organizing Committee of Chicago.

They are calling it the “Fight for 15” to get $15 an hour. The organization says that a single adult Chicago with a child needs a wage of $21 an hour to pay for necessities such as clothing and rent.

Many workers are forced to work two or three jobs to support a family, according to Chavez.

taxing-economics-cartoon

Special mention

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Map of the day

Posted: 23 April 2013 in Uncategorized
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NYC-poverty

In 2011, 21.3 percent of New Yorkers lived in poverty, according to the Center for Economic Opportunity. That’s the third consecutive year the rate of poverty had risen.