Reforming Taxation to Promote Growth and Equity

May 28, 2014

Download the paper by Joseph E. Stiglitz.

Download the paper by Joseph E. Stiglitz.

This white paper outlines concrete policy measures that can restore equitable and sustainable economic growth in the United States, in the context of the country’s recurring budgetary crises. Effective policies are within our grasp, because these budgetary crises are the result of political and not economic failings. Tax reform in particular offers a path toward both resolving budgetary impasses and making the kinds of public investments that will strengthen the fundamentals of the economy. The most obvious reform is an increase in the top marginal income tax rates – this would both raise needed revenues and soften America’s extreme and harmful inequality. But there are also a variety of other effective possible reforms related to corporate taxation, the estate and inheritance tax, environmental taxes, and ensuring that the government gets full value when it sells public assets. This white paper describes the gravity of the economic situation in the United States, but also shows that there is a way out.

Key Arguments

  • The current economic situation in the United States is grave, with extreme inequality, persistently high unemployment, and GDP growth far below potential, to name just a few problems. But the barriers to a solution are political, not economic.
  • Reforms to corporate and personal income taxes will be essential in restoring economic vitality. Examples include implementing financial transaction taxes; increasing corporate tax rates while incentivizing investment in the U.S. and closing loopholes; increasing taxes on rent-seeking; reforming estate and inheritance taxes; and making personal income taxes more progressive.
  • All reforms must be made with the understanding that deficit reduction in and of itself is not a worthy goal. Rather, taxation must be reformed to help grow the economy, improve distribution, and encourage socially beneficial behavior on the part of firms and individuals.

 Read: "Reforming Taxation to Promote Growth and Equity," by Joseph E. Stiglitz.

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The Stiglitz Code: How Taxing Capital Can Counter Inequality

May 28, 2014Felicia Wong

Nobel-winning economist Joseph Stiglitz argues that tax reform is the key to addressing inequality in a new Roosevelt Institute paper released today. Click here to listen to Stiglitz describe the key arguments of the paper.

Nobel-winning economist Joseph Stiglitz argues that tax reform is the key to addressing inequality in a new Roosevelt Institute paper released today. Click here to listen to Stiglitz describe the key arguments of the paper. Click here to read his recent congressional testimony on why inequality matters and what can be done about it.

The American economy is at a crossroads. One of the questions that will determine which path we take is whether and how the government can use taxes to meet social needs. In recent years there have been countless calls to overhaul the tax code, but few have offered a robust set of objectives framed around providing and supporting public goods. The vision of active and effective government in support of the economic common good that President Franklin D. Roosevelt advanced through the New Deal is fading from sight.

That changes with today’s release of “Reforming Taxation to Promote Growth and Equity” by Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz. In this transformative new white paper, the Nobel-winning economist who foresaw the economic crisis and the rise of the Occupy movement sets out to reshape the debate around the role of taxation in our society.

The ideas proposed in the paper are premised on core economic principles – taxing bads, encouraging goods – on which the vast majority of economists agree.  The policy toolkit Stiglitz describes applies across the entire economic landscape. With growing wealth inequality and the political power of the top 1 percent in the spotlight thanks to the success of Thomas Piketty’s bestseller Capital in the 21st Century, Stiglitz calls for taxing capital as if it were regular income and boosting inheritance taxes. He overhauls corporate taxation for the age of globalization and international tax havens, bringing money back to where it was made. He also proposes taxes on negative externalities to ensure that those whose actions do harm, whether in the form of environmental pollution or a financial crisis, pay the price.

The specifics are cogent and compelling. Stiglitz’s truly innovative idea is that we can raise tax revenue while also creating a better, more equal and just economy that works for all – the kind of economy that FDR believed in and fought for. Stiglitz makes the case that tax policy can and should counter some of the country’s biggest challenges: runaway inequality, the threat of climate change, and a business sector warped by bad incentives.

This will not be easy. The transition to a smarter, better tax code would require careful implementation. Tax expenditures would need to be replaced with a better mechanism to ensure that homeowners build equity and that the tax code doesn’t just subsidize the rich. The financial sector, too, would be subject to new taxes that, according to Stiglitz, “would not only raise substantial revenues, but also encourage that sector to better serve the needs of society.” Lobbyists would be out in force to resist and undermine these policy changes, as they have done with the new regulations imposed by Dodd-Frank.

But in an era when the debate over taxation is still dominated by austerity economics and a slash-and-burn approach, Stiglitz lays out a tax policy that would grow the economy. And instead of treating taxation as value-neutral or a necessary evil, he tells us that it can be a means to address important problems. This represents a fundamental and long-overdue shift in our public dialogue about the economy. The American people deserve a tax code that works for them. With this paper, we have the blueprint to create it.

Felicia Wong is the President and CEO of the Roosevelt Institute. Follow her on Twitter @FeliciaWongRI.

Banner photo via OurWorld2.0, Creative Commons.

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Daily Digest - May 28: Progressive Taxation: Another Capital Idea

May 28, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

The Stiglitz Code: How Taxing Capital Can Counter Inequality (Next New Deal)

In a major white paper published today, Roosevelt Institute Chief Economist Joseph Stiglitz connects tax reform to the fight against income inequality. President and CEO Felicia Wong comments.

Click here to receive the Daily Digest via email.

The Stiglitz Code: How Taxing Capital Can Counter Inequality (Next New Deal)

In a major white paper published today, Roosevelt Institute Chief Economist Joseph Stiglitz connects tax reform to the fight against income inequality. President and CEO Felicia Wong comments.

  • Roosevelt Take: Read the white paper, "Reforming Taxation to Promote Growth and Equity," here.

Getting Real about Closing the Gender Pay Gap (The Baffler)

Kathleen Geier looks at three policy changes to counter the gender pay gap: make it easier to join a union, pass pay equity laws, and encourage workplace flexibility.

Conservative 'Compassion' for the Underprivileged Blows Another Fuse (LA Times)

Conservative reformers' suggestions for economic reforms show contempt for the underprivileged, writes Michael Hiltzik, and for the public programs that assist them.

Median CEO Pay Tops $10 Million For The First Time (NPR)

The increase in CEO pay was primarily due to performance bonuses and stock options, compensation that allow CEOs to profit from the rising stock market, reports Alan Greenblatt.

  • Roosevelt Take: Roosevelt Institute Fellow and Director of Research Susan Holmberg and Campus Network alumna Lydia Austin call for closing the performance pay loophole.

Chamber Of Commerce Claims Calculating How Much More CEOs Make Than Their Workers Is ‘Egregious’ (ThinkProgress)

Bryce Covert reports on the Chamber's insistence that CEO-to-worker pay ratios won't demonstrate if CEOs are overpaid. Right, they're more likely to show if workers are underpaid.

Verizon Wireless Workers Make History in Brooklyn (In These Times)

Mike Elk says the store workers' vote to join the same union as their Verizon landline co-workers breaks into new ground.

New on Next New Deal

The FT's Piketty Criticism is Nothing Like the Reinhart-Rogoff Affair

Roosevelt Institute Fellow Mike Konczal contrasts Chris Giles' critique of Thomas Piketty's data and the methodology errors in Carmen Reinhart and Ken Rogoff's work.

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The FT's Piketty Criticism is Nothing Like the Reinhart-Rogoff Affair

May 27, 2014Mike Konczal

Several people are comparing Chris Giles’s piece in the Financial Times, which criticizes the data Thomas Piketty used in his book Capital in the 21st Century, to the Reinhart-Rogoff (R-R) incident from last year. That was when Carmen Reinhart and Kenneth Rogoff’s paper ”Growth in a Time of Debt, which found that growth went negative above a 90 percent debt-to-GDP threshold, was criticized by Thomas Herndon, Michael Ash, and Robert Pollin (HAP). HAP found data and methodology errors in R-R, and now Giles finds data and methodology errors in Piketty. (I wrote about Giles’s article here.)

So the critiques must be similar, right? No. They are quite different, and in fact there are at least four ways in which they are practically the opposite of each other: in their transparency; in the object of their criticism; in the severity of their critiques; and in their democratic implications.

Transparency and Accessibility of the Data

Piketty’s data is public. That is why we are debating it, because that’s how Giles went about critiquing it. R-R kept their data hidden for years as their policies shaped the international debate over austerity.

R-R based their argument on post-war debt and growth, but their site had no spreadsheet saying “here are the countries and growth rates we used for the post-war period.” Instead they offered links to various other sites for growth data, without clarifying which ones they used. If you tried to replicate the data yourself, as many did, you’d find 110 high-debt data points, but R-R only used 96. Again, it wasn’t clear which were being used.

It’s a minor point, but one worth emphasizing. I can think of at least three sets of economists who stated publicly that R-R had not released their data between 2010 and 2012 [1]. This was before Carmen Reinhart sent their raw data to an innocuous graduate student named Thomas Herndon, which formed the basis for HAP.

Attacking the Data Versus Attacking the Argument

Giles is questioning Piketty’s underlying, original data. HAP took the data that R-R provided for granted, even though it likely would have similar questions, and instead criticized what they did with said data.

A lot of people are pointing out that creating brand new data sets, especially using data that spans countries and centuries, will necessarily involve a lot of difficult calls around merging and splicing various sources. To put that a different way, it would be odd if someone went back into the raw, underlying data and didn’t find some difficult calls that could be questioned.

Critics took R-R’s underlying data for granted in the debate. Perhaps they shouldn’t have. As Bivens and Irons of EPI pointed out in their 2010 discussion, R-R use gross debt, which seems inappropriate compared to debt held by the public if the story they’re telling is about debt and economic outcomes. Yeva Nersisyan and Randy Wray argued that R-R also did a poor job of noting whether a debt was denominated in its own currency.

Those are good points, but they’re not what HAP focused on. They looked at the methodology and construction of results and took the R-R data as given instead of nitpicking the underlying data calls -- calls which are always fraught with ambiguity. Critics generally didn’t try to undermine the data R-R presented in This Time is Different; they took on a supplemental argument tacked onto that data, and the problems they found were less subjective and much more devastating.

The Actual Problems Identified Were Far Different in Scale

Giles focused his analysis on the most speculative data chapter in the book. According to Piketty, inequality in the ownership of wealth is one of the two channels that can lead to greater income inequality, but it’s the less important and far more speculative one, developed at the end of the book and added with many, many caveats by the author himself. This chapter is also at the farthest edge of the research frontier, as evidenced by the fact that new research on this topic is still breaking. Even if the whole chapter collapses, there are still very open questions about the growth of capital stock, how much of the economic pie capital will take home, the rise in labor inequality, and many other topics that comprise a much bigger part of the book.

In contrast, within 72 hours of HAP, support for the idea that there was a debt “threshold” collapsed. John Taylor said that the G20, a far cry from a group of liberal bloggers, omitted specific deficit or debt-to-GDP targets as a result of HAP’s critique. What happened?

First, the actual methodological problem was more important in R-R. It became clear that the choices made in weighting and averaging radically overstated the effects of one year from New Zealand in which R-R recorded a negative 7.6 percent change in GDP. But more generally, HAP showed that the final results were very sensitive to minor data adjustments.

This gets confused in the subsequent narrative, but R-R largely accepted the numbers of HAP. In fact, they said that the smaller numbers HAP found were in line with their new research, which found a smaller decline and correlation between debt and GDP, implicitly abandoning their 2010 paper that had become the focus of world policy. But they still argued that a negative relationship was present.

Since the data was made available by HAP, it took only 24 hours before other researchers found major problems that R-R’s response did not address. Specifically, the economist Arin Dube showed that “simple exercises suggest that the raw correlation between debt-to-GDP ratio and GDP growth probably reflects a fair amount of reverse causality. We can’t simply use correlations like those used by R-R (or ones presented here) to identify causal estimates.” In other words, low growth led to a higher debt-to-GDP ratio, not the other way around.

There was no convincing answer forthcoming from R-R about this issue. A month later, the economist Miles Kimball and Yichuan Wang found that they “could not find even a shred of evidence in the Reinhart and Rogoff data for a negative effect of government debt on growth.”

That no other researchers have used Giles’s findings to immediately disprove, or at least cast doubt on, Piketty’s central arguments is telling. This could still happen, so it’s important to be critical. But the general work in Capital, leaving aside the question of inequality of the ownership of capital in Chapter 10, has evolved over decades and has had its tires kicked many, many times. The debt threshold of R-R never passed peer review, and it is unlikely it could have given the obvious reverse causality issues.

The Difference in Democratic Accountability

It seems like everyone who brings up Capital in the 21st Century has to immediately remark about how impossible it would be to do anything about Piketty’s findings given our current reality. Did you hear that Piketty’s solutions in Capital are impractical? They’re impractical, you know. A global wealth tax? Impractical!

But some people, when they act, create their own reality. Even though it had never been replicated, R-R’s paper was immediately moved to the center of elite discussion. It was one of the most cited pieces of evidence during the Great Recession. It became a justification for austerity, and it was one of the central economic arguments for the Ryan Plan, the budget that Mitt Romney would have tried to put into place had he won the 2012 election.

Some people want to argue that the R-R Excel error was no big deal. And in an econometric sense, they might have a point. But in a political sense, it mattered. It showed that hundreds of millions of people’s lives were being guided by a piece of research with an error that literally anyone would have found if R-R had let another set of human eyeballs look at it.

This is why democratic accountability is so important with economics. It’s good to see Piketty checked here, even if the concerns are overplayed; as Piketty says, the distribution of wealth “is too important an issue to be left to economists, sociologists, historians, and philosophers. It is of interest to everyone, and that is a good thing.” Indeed it is, just as austerity and government budgets are.

[1] First, “Government Debt and Economic Growth.” Bivens and Irons of EPI, July 2010, footnote 5: “The actual data used in the [R-R] study have not been made available to the public by the authors.”

Second, “Not Following Professional Ethics Matters Also.” Dean Baker, July 2010: “Mr. Rogoff and Ms. Reinhart have declined to adhere to standard ethics within the economics profession and have refused to share the data on which they base their conclusion with other researchers.”

Third, “Is High Public Debt Always Harmful to Economic Growth?” Minea and Parent, Feburary 2012, footnote 4: “Our efforts for obtaining the database used by RR were...unfortunately unsuccessful.”

Follow or contact the Rortybomb blog:
 
  

 

Several people are comparing Chris Giles’s piece in the Financial Times, which criticizes the data Thomas Piketty used in his book Capital in the 21st Century, to the Reinhart-Rogoff (R-R) incident from last year. That was when Carmen Reinhart and Kenneth Rogoff’s paper ”Growth in a Time of Debt, which found that growth went negative above a 90 percent debt-to-GDP threshold, was criticized by Thomas Herndon, Michael Ash, and Robert Pollin (HAP). HAP found data and methodology errors in R-R, and now Giles finds data and methodology errors in Piketty. (I wrote about Giles’s article here.)

So the critiques must be similar, right? No. They are quite different, and in fact there are at least four ways in which they are practically the opposite of each other: in their transparency; in the object of their criticism; in the severity of their critiques; and in their democratic implications.

Transparency and Accessibility of the Data

Piketty’s data is public. That is why we are debating it, because that’s how Giles went about critiquing it. R-R kept their data hidden for years as their policies shaped the international debate over austerity.

R-R based their argument on post-war debt and growth, but their site had no spreadsheet saying “here are the countries and growth rates we used for the post-war period.” Instead they offered links to various other sites for growth data, without clarifying which ones they used. If you tried to replicate the data yourself, as many did, you’d find 110 high-debt data points, but R-R only used 96. Again, it wasn’t clear which were being used.

It’s a minor point, but one worth emphasizing. I can think of at least three sets of economists who stated publicly that R-R had not released their data between 2010 and 2012 [1]. This was before Carmen Reinhart sent their raw data to an innocuous graduate student named Thomas Herndon, which formed the basis for HAP.

Attacking the Data Versus Attacking the Argument

Giles is questioning Piketty’s underlying, original data. HAP took the data that R-R provided for granted, even though it likely would have similar questions, and instead criticized what they did with said data.

A lot of people are pointing out that creating brand new data sets, especially using data that spans countries and centuries, will necessarily involve a lot of difficult calls around merging and splicing various sources. To put that a different way, it would be odd if someone went back into the raw, underlying data and didn’t find some difficult calls that could be questioned.

Critics took R-R’s underlying data for granted in the debate. Perhaps they shouldn’t have. As Bivens and Irons of EPI pointed out in their 2010 discussion, R-R use gross debt, which seems inappropriate compared to debt held by the public if the story they’re telling is about debt and economic outcomes. Yeva Nersisyan and Randy Wray argued that R-R also did a poor job of noting whether a debt was denominated in its own currency.

Those are good points, but they’re not what HAP focused on. They looked at the methodology and construction of results and took the R-R data as given instead of nitpicking the underlying data calls -- calls which are always fraught with ambiguity. Critics generally didn’t try to undermine the data R-R presented in This Time is Different; they took on a supplemental argument tacked onto that data, and the problems they found were less subjective and much more devastating.

The Actual Problems Identified Were Far Different in Scale

Giles focused his analysis on the most speculative data chapter in the book. According to Piketty, inequality in the ownership of wealth is one of the two channels that can lead to greater income inequality, but it’s the less important and far more speculative one, developed at the end of the book and added with many, many caveats by the author himself. This chapter is also at the farthest edge of the research frontier, as evidenced by the fact that new research on this topic is still breaking. Even if the whole chapter collapses, there are still very open questions about the growth of capital stock, how much of the economic pie capital will take home, the rise in labor inequality, and many other topics that comprise a much bigger part of the book.

In contrast, within 72 hours of HAP, support for the idea that there was a debt “threshold” collapsed. John Taylor said that the G20, a far cry from a group of liberal bloggers, omitted specific deficit or debt-to-GDP targets as a result of HAP’s critique. What happened?

First, the actual methodological problem was more important in R-R. It became clear that the choices made in weighting and averaging radically overstated the effects of one year from New Zealand in which R-R recorded a negative 7.6 percent change in GDP. But more generally, HAP showed that the final results were very sensitive to minor data adjustments.

This gets confused in the subsequent narrative, but R-R largely accepted the numbers of HAP. In fact, they said that the smaller numbers HAP found were in line with their new research, which found a smaller decline and correlation between debt and GDP, implicitly abandoning their 2010 paper that had become the focus of world policy. But they still argued that a negative relationship was present.

Since the data was made available by HAP, it took only 24 hours before other researchers found major problems that R-R’s response did not address. Specifically, the economist Arin Dube showed that “simple exercises suggest that the raw correlation between debt-to-GDP ratio and GDP growth probably reflects a fair amount of reverse causality. We can’t simply use correlations like those used by R-R (or ones presented here) to identify causal estimates.” In other words, low growth led to a higher debt-to-GDP ratio, not the other way around.

There was no convincing answer forthcoming from R-R about this issue. A month later, the economist Miles Kimball and Yichuan Wang found that they “could not find even a shred of evidence in the Reinhart and Rogoff data for a negative effect of government debt on growth.”

That no other researchers have used Giles’s findings to immediately disprove, or at least cast doubt on, Piketty’s central arguments is telling. This could still happen, so it’s important to be critical. But the general work in Capital, leaving aside the question of inequality of the ownership of capital in Chapter 10, has evolved over decades and has had its tires kicked many, many times. The debt threshold of R-R never passed peer review, and it is unlikely it could have given the obvious reverse causality issues.

The Difference in Democratic Accountability

It seems like everyone who brings up Capital in the 21st Century has to immediately remark about how impossible it would be to do anything about Piketty’s findings given our current reality. Did you hear that Piketty’s solutions in Capital are impractical? They’re impractical, you know. A global wealth tax? Impractical!

But some people, when they act, create their own reality. Even though it had never been replicated, R-R’s paper was immediately moved to the center of elite discussion. It was one of the most cited pieces of evidence during the Great Recession. It became a justification for austerity, and it was one of the central economic arguments for the Ryan Plan, the budget that Mitt Romney would have tried to put into place had he won the 2012 election.

Some people want to argue that the R-R Excel error was no big deal. And in an econometric sense, they might have a point. But in a political sense, it mattered. It showed that hundreds of millions of people’s lives were being guided by a piece of research with an error that literally anyone would have found if R-R had let another set of human eyeballs look at it.

This is why democratic accountability is so important with economics. It’s good to see Piketty checked here, even if the concerns are overplayed; as Piketty says, the distribution of wealth “is too important an issue to be left to economists, sociologists, historians, and philosophers. It is of interest to everyone, and that is a good thing.” Indeed it is, just as austerity and government budgets are.

[1] First, “Government Debt and Economic Growth.” Bivens and Irons of EPI, July 2010, footnote 5: “The actual data used in the [R-R] study have not been made available to the public by the authors.”

Second, “Not Following Professional Ethics Matters Also.” Dean Baker, July 2010: “Mr. Rogoff and Ms. Reinhart have declined to adhere to standard ethics within the economics profession and have refused to share the data on which they base their conclusion with other researchers.”

Third, “Is High Public Debt Always Harmful to Economic Growth?” Minea and Parent, Feburary 2012, footnote 4: “Our efforts for obtaining the database used by RR were...unfortunately unsuccessful.”

Follow or contact the Rortybomb blog:
 
  

 

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Daily Digest - May 27: Taking Stock of Piketty's Capital

May 27, 2014Rachel Goldfarb

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Why Geithner Drives Liberals Nuts (Politico)

Ben White quotes Roosevelt Institute Fellow Mike Konczal, who says tensions over Tim Geithner's work during the financial crisis will come into play in the 2016 elections.

Click here to receive the Daily Digest via email.

Why Geithner Drives Liberals Nuts (Politico)

Ben White quotes Roosevelt Institute Fellow Mike Konczal, who says tensions over Tim Geithner's work during the financial crisis will come into play in the 2016 elections.

Thomas Piketty Accuses Financial Times of Dishonest Criticism (The Guardian)

Jennifer Rankin reports on Piketty's response, in which he maintains that his conclusions are solid even when looking at more recent data than he used in his book.

I.R.S. Bars Employers From Dumping Workers Into Health Exchanges (NYT)

Giving employees tax-free dollars to pay for insurance on the exchanges won't satisfy the Affordable Care Act's employer mandate, reports Robert Pear, and the fines are steep.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch suggests that employers that don't want to provide insurance should pay an additional payroll tax instead.

The Slow, Quiet Death of Extended Unemployment Benefits (MoJo)

Patrick Caldwell blames the lack of momentum on this issue on the House GOP, given that long-term unemployment is higher than it's ever been without federal emergency benefits.

New on Next New Deal

The FT Gets Piketty's Capital Argument Wrong

Roosevelt Institute Fellow Mike Konczal argues the Financial Times misses Thomas Piketty's central theme: the size and importance of capital will soon dwarf the rest of the economy.

The New Conservative Reformers Still Don't Have a Plan for Wall Street

Mike Konczal looks at a new report from conservative reformers and finds it lacking on financial reform. It doesn't address any of the current debates on issues like Too Big To Fail.

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Daily Digest - May 21: What Do Consumers Get Out of Cable Mega-Mergers?

May 21, 2014Rachel Goldfarb

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AT&T and DirecTV Team Up Against Customers (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford says that instead of overseeing mergers that will hurt consumers, regulators should be pushing cable companies to invest in infrastructure.

Click here to receive the Daily Digest via email.

AT&T and DirecTV Team Up Against Customers (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford says that instead of overseeing mergers that will hurt consumers, regulators should be pushing cable companies to invest in infrastructure.

To Lift the Poor, You Can’t Avoid Taxing the Rich (NYT)

The money for programs needed to help low-income Americans has to come from somewhere, writes Jared Bernstein, and simply promoting overall growth isn't a viable alternative.

A Super PAC for the Poor: How to Actually Get Something Done About Economic Suffering (Salon)

Blake Zeff argues that the best way to fight poverty is to take a page from the right's handbook and form a super PAC powerful enough to threaten lawmakers who don't support the cause.

Job Outlook for 2014 College Grads Puzzling (USA Today)

This is the sixth graduating class in a row to enter a profoundly weak labor market, writes Hadley Malcolm, and though unemployment is down, young people are leaving the work force.

No, Taking Away Unemployment Benefits Doesn’t Make People Get Jobs (ThinkProgress)

Bryce Covert reports on new data from Illinois, where two months after Congress allowed extended unemployment to lapse, 82 percent of those who lost benefits were still out of work.

As Court Fees Rise, The Poor Are Paying The Price (NPR)

Joseph Shapiro reveals the impact poverty has on Americans' experiences with the legal system, as fees increase for everything from public defenders to electronic monitoring devices.

Credit Suisse's Plea is Kabuki Theatre. Big US Banks are Still Getting Off Easy (The Guardian)

The Swiss bank's guilty plea won't harm its business, writes Heidi Moore, nor is it a sign that the Justice Department will start pursuing criminal charges against U.S. banks.

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Daily Digest - May 19: Workers Around the World Order Up Higher Pay

May 19, 2014Rachel Goldfarb

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Fight for Higher Wages Goes Global (Melissa Harris-Perry)

Guest host and Roosevelt Institute Fellow Dorian Warren discusses the evolution of the fast food workers movement as it spreads beyond American borders.

Click here to receive the Daily Digest via email.

Fight for Higher Wages Goes Global (Melissa Harris-Perry)

Guest host and Roosevelt Institute Fellow Dorian Warren discusses the evolution of the fast food workers movement as it spreads beyond American borders.

How to Win Millennials: Equality, Climate Change, and Gay Marriage (The Atlantic)

A new survey of Millennials shows a decidedly progressive voting bloc, says John Tierney, with broad support for government involvement on the issues that matter to them.

The Odds You’ll Join the Ranks of the Long-Term Unemployed (WaPo)

Matt O'Brien looks at data showing how closely long-term unemployment is tied to the business cycle. Losing a job at the right moment makes all the difference for finding a new one.

The Deep Roots of Skilled Labor Shortages: Anti-Union, Anti-Worker Corporations (Working Economics)

The solution to shortages of skilled construction labor in Texas isn't training, writes Ross Eisenbrey. It's paying the higher wages skilled workers deserve, and welcoming unions.

The Republican War on Workers’ Rights (NYT)

Corey Robin examines the spread of state laws that harm workers since the 2010 midterms, from banning municipal sick leave guarantees to easing child labor restrictions.

Retailers Make More by Paying Their Workers Better, Researcher Says (Pittsburgh Post-Gazette)

Ann Besler writes about new research proving that cutting labor budgets in retail leads to lower sales. Stores then cut labor even more, creating a vicious cycle of low profits.

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Daily Digest - May 16: American Dreamers Wake Up to Inequality

May 16, 2014Rachel Goldfarb

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It’s Now the Canadian Dream (NYT)

Nicholas Kristof quotes Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz on how inequality of opportunity has diminished the American Dream.

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It’s Now the Canadian Dream (NYT)

Nicholas Kristof quotes Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz on how inequality of opportunity has diminished the American Dream.

  • Roosevelt Take: Stiglitz spoke to the Senate Budget Committee about growing inequality of income and opportunity in the U.S., and how policy can push back.

Harry Reid Backs Campaign Spending Amendment (Politico)

The Senate Majority Leader has backed a constitutional amendment that would overturn Citizens United and McCutcheon, writes Burgess Everett, though it's unlikely to pass.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch calls for political organizing to protect democracy in the wake of McCutcheon.

Biggest Fast Food Strike Ever Attracts Global Support (MSNBC)

Ned Resnikoff reports on the expansion of the fast food strikes that began a year and a half ago in New York City. Yesterday brought strikes in 150 U.S. cities and 33 other countries.

Fast Food, Slow Movement (TAP)

Paul Waldman says the slow growth of the fast food movement could be to its advantage when it comes to developing demands, strategies, and leadership.

Another Conservative Governor Finds a Way to Expand Medicaid (WaPo)

Expanding Medicaid without provoking GOP opposition, as Indiana's governor is attempting to do, could be key to closing the coverage gap, writes Jason Millman.

New on Next New Deal

In Georgia, Lawmakers Taking Pride in Policies That Hurt the Poor

Roosevelt Institute Fellow Andrea Flynn explains why Georgia's active efforts to undermine the Affordable Care Act are making things worse in a state with an already high poverty rate.

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Daily Digest - May 15: The Politics of Embracing Piketty

May 15, 2014Rachel Goldfarb

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Why Democrats Are Paying Attention to Piketty's Book on Inequality (Real News Network)

Roosevelt Institute Senior Fellow Tom Ferguson suggests Democrats are using Capital in the 21st Century to strengthen their inequality narrative for the midterm elections.

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Why Democrats Are Paying Attention to Piketty's Book on Inequality (Real News Network)

Roosevelt Institute Senior Fellow Tom Ferguson suggests Democrats are using Capital in the 21st Century to strengthen their inequality narrative for the midterm elections.

  • Roosevelt Take: Roosevelt Institute President and CEO Felicia Wong says that Piketty and his peers are defining today's debate and opening new opportunities to push back on inequality.

Fast-Food Protests Spread Overseas (NYT)

Steven Greenhouse reports on today's fast food strikes in 150 U.S. cities, the largest yet, and why the organizers are working to build support and influence abroad as well.

The Merits of Participatory Budgeting (AJAM)

Bringing citizens into the decision-making process for local spending empowers them, says Hollie Russon Gilman, and builds their connection to politics more generally.

Paul Ryan's Approach To Poverty Is Straight Out Of The 19th Century (HuffPo)

Arthur Delaney looks at the anti-handout models of fighting poverty from the 1800s, which don't make sense given modern data, and finds strong similarities to Rep. Ryan's views.

The Neediest Americans Are Getting The Least Government Assistance (ThinkProgress)

Bryce Covert looks at forthcoming research that shows that since 1975, social safety net spending has shifted away from the poorest Americans to those who are more well off.

New on Next New Deal

Places for Hope in the Fight to Protect Women's Health and Rights

To push back against the constant barrage of bad news, Roosevelt Institute Fellow Andrea Flynn shines a light on states that are taking proactive, positive steps on women's health.

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Daily Digest - May 14: A Victory for Workers in Vermont

May 14, 2014Rachel Goldfarb

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Vermont to Set Highest State Minimum Wage in the U.S. (MSNBC)

Ned Resnikoff reports that the Vermont legislature has voted to raise the state's minimum wage to $10.50 an hour, and the governor is expected to sign the bill soon.

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Vermont to Set Highest State Minimum Wage in the U.S. (MSNBC)

Ned Resnikoff reports that the Vermont legislature has voted to raise the state's minimum wage to $10.50 an hour, and the governor is expected to sign the bill soon.

I Like Jane Austen's Novels, But I Certainly Don't Want to Live Like That (HuffPo)

Heather Boushey writes that Thomas Piketty's prognosis for the economy is of particular concern for women, because if success depends on inheritance, gender equity will suffer.

Fannie-Freddie Overseer Easing Loan Buybacks (Bloomberg News)

Melvin L. Watt, head of the Federal Housing Authority, has announced new rules intended to stimulate the housing market by encouraging lending, reports Clea Benson.

SEC Peeks Under Private Equity Rug, Finds 'Remarkable' Corruption (LA Times)

Corruption in private equity firms isn't just a problem for the very rich, says Michael Hiltzik, since pension funds are among private equity's big clients.

Rebellious Economics Students Have a Point (New Yorker)

John Cassidy writes that the lack of real-world perspective in today's economics classrooms is a problem. He's particularly interested in bringing back economic history and organization.

Tim Geithner and the Paradox Behind the Government’s Crisis Response (WaPo)

In his review of the former Treasury Secretary's new book, Zachary Goldfarb considers the difficult balance between winning over public opinion and saving collapsing systems.

New on Next New Deal

Why Are Courts Allowing Redefinitions of Emergency Contraception?

Roosevelt Institute Fellow Andrea Flynn decries the misinformation about emergency contraception that's being accepted as fact in court cases over the contraception mandate.

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