Economy

At the last World Economic Roundtable, Michael Kumhof, Deputy Division Chief of the Modeling Division of the International Monetary Fund, and Raymond Torres, Director of the International Institute for Labour Studies of the International Labour Organization, came to discuss the relationship between inequality and financial crises. 

If you live or work in the Washington, D.C. / Virginia / Maryland area and are interested in asset-building, you are in for a treat. During January 11-15, 2012, approximately 20 individual research papers and posters focusing on asset-building research will be presented at the annual conference of the Society for Social Work and Research (SSWR). This research is the latest and greatest from some of the leading researchers in the asset-building field, including Gina Chowa, Michal Grinstein-Weiss, Vernon Loke, Jin Huang, and Youngmi Kim. Topics include savings at tax time, financial capability of youth in international settings, home ownership and housing stability, and debt and asset accumulation. The conference will be held at the Grand Hyatt Washington. Presentations that are "don't miss" are listed below. Click on the number at the end of the titled presentation for a direct link to the complete abstract.

There are two ways a president can run for reelection. The first is to boast about your success in your first term, and promise to build on it in the next. That's what Dwight Eisenhower did in 1956; it's what Ronald Reagan did in 1984; it's what Bill Clinton did in 1996. For the strategy to work, Americans have to be relatively satisfied with their lot, and relatively optimistic about the future.

It’s a busy time of year. Perhaps you didn’t hear President Obama’s December 6^thspeech in Osawatomie, Kansas. It’s worth a closer look—both for its specific language and general themes. The speech was a billed as a thematic statement of Obama’s vision for the economy and if that’s the case, we can expect to hear more in the coming campaign about inequality, mobility, opportunity, and even fairness. Given the state of the economy, we should expect these issues to attract attention, but still the speech sounded like a departure for a president who has often shied away from taking a populist stance. 

I’ll be honest and say that Osawatomie had not previously been on my radar. But the choice of using this heartland town as the site for a major economic address was not accidental. In 1910, Teddy Roosevelt delivered what’s been called his “New Nationalism” speech, a milestone for the progressive era, where he called upon government to regulate capitalism and elevate the public interests above those of money and property. The press reports piqued my interest and I tracked down TR’s address. Reading it, I was surprised by how contemporary it felt.

TR used his address to rail against the rising power of corporations and moneyed interests that “too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics.” The very triumph of America was at stake, which at that time held the hopes of anyone believing in the desirability of democratic and popular government. Property was to be respected and protected but not given undue influence – and certainly not “the right of suffrage.” (We should send this speech to the current Roberts Court.) TR believed that the unleveled playing field was tipping the scales of justice and the promise of America could only be realized with “practical equality of opportunity for all citizens.”

“…when we achieve it, will have two great results. First, every man will have a fair chance to make of himself all that in him lies; to reach the highest point to which his capacities, unassisted by special privilege of his own and unhampered by the special privilege of others, can carry him, and to get for himself and his family substantially what he has earned. Second, equality of opportunity means that the commonwealth will get from every citizen the highest service of which he is capable. No man who carries the burden of the special privileges of another can give to the commonwealth that service to which it is fairly entitled.

I stand for the square deal. But when I say that I am for the square deal, I mean not merely that I stand for fair play under the present rules of the games, but that I stand for having those rules changed so as to work for a more substantial equality of opportunity and of reward for equally good service.”

Pardon the dated gender language and my bolding of the passage, but for me all it would take to make this passage ring true today is a few new pronouns. Now, let’s see how President Obama picks up on these ideas in his speech delivered over a hundred years later. 

China’s surplus fell from 10.1% of GDP in 2007 to 5.2% in 2010.  Whether its current account will continue to decline or will return to higher levels seen in the mid-2000s is a subject of considerable disagreement.

Paul Misener, the vice president for global public policy at Amazon.com, appeared before members of Congress Wednesday to urge it to pass a proposed bill that would require online retailers — including Amazon itself — to collect state sales tax on the goods they sell through their websites.

“Congress should help address the states’ budget shortfalls without spending federal funds, by authorizing the states to require collection of the billions of revenue dollars already owed,” Misener said.

In recent years, researchers and policymakers have offered up young people’s savings policies (e.g., Child Development Accounts [CDAs], the ASPIRE Act) as potential solutions for mitigating the effects of parents’ and households’ financial resources on young people's educational and financial outcomes. One question of interest is whether young people’s financial outcomes can be improved by extending access to basic financial services early in life. In other words, if you give someone a savings account in adolescence, do they maintain that account into young adulthood and beyond?

The Redcoats are coming! The Redcoats are coming!

Remember what your elementary school teacher taught you about the War of Independence? The British wore scarlet coats, which made them easy marks and symbolized institutional pomposity, adherence to status over efficiency and an out-of-touch empire bent on doing things the old way. The rebellious American colonists, on the other hand, wore whatever; they were nimble, unencumbered by institutional baggage and not too proud to employ guerrilla tactics.

I've just finished reading a new report by Professor Richard Feinberg, a former Clinton administration official and non-resident fellow at the Brookings Institution.  "Reaching Out: Cuba's New Economy and the International Response," clocked in at a daunting 101 pages but should nonetheless be required reading for anyone following the island nation's long-awaited economic restructuring.

In this podcast, Reid Cramer, director of the Asset Building Program at New America, describes the new dynamics of inequality that emerged in the wake of the Great Recession and have given rise to the Occupy Wall Street movement.  Without dramatic changes to the housing market and policy efforts designed to get families out from under the overhang of debt, significant wealth inequality will persist for years to come. This is particularly apparent when recognizing  the staggering growth of the racial wealth gap. Today, November 17th, marks the two month anniversary of the protests, which should be applauded for initiating a national conversation about equality, mobility, and opportunity.