A Policy Agenda for Stronger, Fairer, and More Sustainable Growth

Jul 13, 2015Roosevelt Institute

The Roosevelt Institute today released the following statement in response to Hillary Clinton’s economic speech at the New School:

The Roosevelt Institute today released the following statement in response to Hillary Clinton’s economic speech at the New School:

Today, Hillary Clinton began outlining a comprehensive framework for tackling America’s problems of slow economic growth, low investment, and stagnant wages. Secretary Clinton’s speech reinforced an argument made by the Roosevelt Institute and supported by the economic evidence: inequality is a choice determined by the rules that structure how our economy works—the laws, regulations, and institutions that shape market behaviors and outcomes. Changes we have made to the economic rules over the past 35 years have left the U.S. with a weaker economy, higher inequality, and greater concentration of economic power. This cannot stand if the U.S. economy is to be put on track for long-term prosperity.

It is encouraging to hear Secretary Clinton focus so clearly on this central cause of America’s economic problems as she articulates a three-pronged approach to putting the U.S. economy back on track: making economic growth stronger, fairer, and oriented toward the long term. Delivering on the sweeping vision offered today will require a detailed policy agenda that addresses a number of issues ranging from family-friendly work policies to financial reform. Below, we’ve offered an outline of specific policies that we urge all presidential candidates to consider as they build their platforms.

But beyond any specific policies, an effective agenda must take a comprehensive approach to reforming the economy—an approach built on the evidence that our economy works best when it is working for everyone, not on the faith that prosperity will trickle down from a wealthy few at the very top. We cannot achieve strong, sustainable growth so long as the majority of economic gains remain concentrated in so few hands. To put it simply, stronger growth, fairer growth, and more sustainable growth are interconnected. We can’t have one without the others.

As we discussed in detail in our Rewriting the Rules of the American Economy report, there is a long list of policies that America can choose to implement in order to promote stronger, fairer, and more sustainable growth. We have summarized those policies below.

Making growth stronger

This means breaking down barriers to work: creating good jobs, sustaining good jobs, and ensuring that more Americans can obtain good jobs.

1)     Expand access to labor markets and opportunities for advancement

  • Enact paid sick and family leave so that more people can have the security to work while still caring for their children and family members.
  • Subsidize child care to benefit children and improve women's workforce participation and economic mobility.
  • Open Medicare to all to make health care more affordable for families and employers.
  • Expand public transportation to promote equal access to jobs and opportunities.
  • Reform the criminal justice system to reduce incarceration rates and penalize employers for discriminating against people with an incarceration history.
  • Enact comprehensive Immigration reform, recognizing immigrant families for their contributions to America’s economic success.
  • Protect women's access to reproductive health services so all individuals can access comprehensive, affordable, and quality care.

2)     Make public investments needed for private sector growth

  • Invest in large-scale infrastructure renovation with a 10-year campaign to make the U.S. a world leader in infrastructure manufacturing, jobs, and innovation that raises efficiency and cuts the cost of doing business in the U.S.
  • Enact universal early childhood education and a universal child benefit, ensuring that every child in America has access to pre-school starting at age 3 and that parents have the resources to invest in their children’s futures.
  • Make higher education accessible and affordable by reforming tuition financing, restoring consumer protections to student loans, and adopting universal income-based repayment.

3)     Make full employment the goal

  • Appoint members to the Federal Reserve who prioritize the Fed’s full employment mandate.
  • Restore balance to trade agreements to ensure that U.S. businesses and workers can compete with the world on a level playing field.

Making growth fairer

This means rewarding work fairly and crafting a tax code and compensation system that incentivizes investment and innovation in the real economy. 

1)    Empower workers

  • Close the pay equity gap to ensure equal pay for equal work.
  • Raise the national minimum wage and expand enforcement to ensure that work pays a living wage.
  • Strengthen the right to collective bargaining by easing legal barriers to unionization, requiring mandatory arbitration for first contracts, imposing stricter penalties on illegal anti-union activities, and amending laws to reflect the changing workplace in America.
  • Leverage government to set workplace standards by attaching strong pro-worker stipulations for private government contractors.

2)  Make taxes more progressive

  • Ensure top earners pay their fair share by raising top marginal income tax rates, replacing tax expenditures with capped credits, and taxing capital gains at least as much as labor income, with a much higher tax rate on short-term capital gains.
  • Enact revenue-positive corporate tax reform that ends the indefinite overseas deferral of corporate profits  in foreign tax havens, eliminates the incentive for offshoring by taxing corporations as unified entities on the basis of their global income, establishes a global minimum tax, and reduces corporate welfare within the tax code.

Focusing growth on the long term

This means ensuring that our financial system focuses on creating long-term value and minimizes the risks of a major financial crash.

1)     Fix the financial sector

  • Eliminate hidden subsidies to big banks that create too much risk and then hold taxpayers hostage to the need for bailouts.
  • Appoint officials to key federal agencies with a track record of enforcing regulations rather than lobbying for the industry.
  • Level the playing field between large financial institutions and community banks with increased leverage requirements and leverage surcharge.
  • Address the “shadow banking system” that eludes existing rules and regulations designed to make our economic system safe, stable, and accountable.
  • Eliminate the loopholes promoting offshore banking centers and tax havens.
  • Increase transparency throughout the financial sector so we can finally understand the risks and conflicts of interest that tip the scale of fairness and threaten to destabilize the economy.

2)    Focus corporate executives on long-term investment

  • Eliminate the CEO performance pay loophole, i.e. Section 162(m), that ties incentives to short-term stock prices rather than long-term performance; increase disclosure requirements on executive compensation and stock options; and implement the Dodd-Frank rule requiring disclosure of the CEO–median worker pay ratio.
  • Enact tax reform to combat short-termism for shareholders, first by raising tax rates on capital gains to the same level as the rates on labor income and then by raising the rate on short-term capital gains and non-productive long-term capital gains (land speculation) even higher.

3)     Rewrite the rules of trade to put all U.S. workers and businesses on a level playing field

  • Restrain the scope of the investor–state dispute settlement procedures for future agreements (and revise the myriad prior agreements) and build in safeguards so that public interest regulations cannot be undermined by private international courts.
  • Rebalance intellectual property protections to encourage innovation and lower consumer prices.
  • Make U.S. market access benefits contingent on firm audits of compliance with labor and environmental standards—a social standards export license—to give real meaning to a high-standard global economy.

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Statement to Congress: TPP Would Weaken U.S. Economy and Fail to Check China's Rise

Jun 17, 2015Adam Hersh

Roosevelt Institute Senior Economist Adam Hersh will appear today before the United States House Committee on Foreign Affairs' Subcommittee on Asia and the Pacific as part of a hearing on "China's Rise: The Strategic Impact of Its Economic and Military Growth." The following is his prepared testimony.

Roosevelt Institute Senior Economist Adam Hersh will appear today before the United States House Committee on Foreign Affairs' Subcommittee on Asia and the Pacific as part of a hearing on "China's Rise: The Strategic Impact of Its Economic and Military Growth." The following is his prepared testimony.

Chairman Salmon, Ranking Member Sherman, members, thank you for inviting me to testify on this pivotal topic: the geo-economic and geo-political significance of China’s rapid development and the U.S. strategic response, particularly as it pertains to the Trans-Pacific Partnership agreement.

I would like to begin on points of agreement between proponents: it matters a lot who gets to write the rules for how our economy and the international economy work. Last week’s historic vote by you and your colleagues on Trade Promotion Authority and Trade Adjustment Assistance showed how much the rules matter. What this said is that something is broken in the ways the United States makes trade rules: the dysfunction of the implicit agreement between Congress and the President—and his delegated ambassador as United States Trade Representative—in how Constitutional division of authorities to make international agreements will govern in practice.

When the rules matter this much, we should take the time to get them right, rather than bull-doze non-transparent new rules through Congress. What we know about the agreement—from Wikileaks, and from conversations with negotiators of more open TPP countries—is that the Trans-Pacific Partnership (TPP) has less to do with freeing trade, creating jobs, raising wages, or rebalancing geo-politics than it does with rewriting the rules of global trade and investment to favor big businesses at the expense of almost everyone else in society.[i]

These rules do not embody economic principles of open competition so much as the preferences of industry lobbyists that had the best seats at the U.S. Trade Representative’s table. The outcome is an agreement that fails to address America’s economic needs and geostrategic goals. Legitimate concerns have been raised on the left, right, and center of the American political debate, only to be dismissed by conventional wisdom as protectionist, old-fashioned, or naive to the ways of the world. But as Larry Summers wrote in the Washington Post, it’s time to take these concerns seriously.[ii]

Problems with current U.S. model for trade policy do not end with TPP. A multitude of agreements are underway under the same basic template--from a parallel mega-regional agreement with the European Union, to a multilateral agreement on trade in services (TISA), to a bilateral investment treaty with China itself and other countries that will all be critical to the U.S. economic future. They are critical to whether we grow with broadly shared prosperity or continue down the path of an economy producing high and rising inequality, and low economic opportunity.

Proponents of TPP are asking us to believe we can achieve the high road outcomes from a USTR so captured by special interests. But unless Congress acts to change the rules on how the United States government negotiates international economic agreements, we can expect the same confrontational and uncertain political outcomes, rather than a cooperative, inclusive approach to setting national economic priorities.

I will make two points today:

1. The most fundamental element of national security is a strong national economy, and TPP would weaken our economic base, leave us more unequal, and reinforce the global race to the bottom in social, environmental, and commercial standards and taxation.

2. TPP fails the geostrategic rationale for checking China’s rise.

On the first point, the most generous models predicting TPP’s economic impact claim it would raise U.S. GDP by $88 billion (in today’s prices) by 2025.[iii] This amount is less than the rounding error when the Department of Commerce calculates GDP. If you each picked an infrastructure project in your district, together you would create a bigger growth impact in the next year than TPP would have ten years from now.

The United States ranks among the highest of the advanced economy countries in inequality, and among the lowest in terms of upward economic mobility. TPP will lead to higher inequality--adjustment to new terms of trade will focus job and small business elimination in more labor-intensive industries—not just manufacturing, but in services of increasingly higher skill—faster than trade creates them in less labor-intensive export-expanding industries. Recent research by MIT economists Daron Acemoglu, David Autor, and co-authors shows that such import shocks decimate local economies, causing higher unemployment, slower wage growth, and straining social expenditures and tax revenues. Trade with China in particular, they estimate, cost the U.S. economy 2 to 2.4 million jobs over the course of the 2000s.[iv]

TPP goes far beyond mere tariffs and trade. All sides agree TPP’s most significant provisions address “behind the border” measures—not what happens between countries, but how the economic rules will work within countries.

To highlight two major issues, first is TPP’s investor–state dispute settlement mechanism (ISDS). Here, progressives like Senator Elizabeth Warren and a Nobel prize-winning economist Joseph Stiglitz are joined by the likes of Cato Institute and The Economist magazine in raising concerns that ISDS serves to empower global businesses against public regulation.[v] Understandably, global businesses would like assurance against expropriation and discriminatory treatment where rule of law is underdeveloped. But they can already buy private insurance against such risks. That USTR also insists on ISDS in an agreement with Europe, where no one questions legal standards, reveals the lie that this is about protecting investor rights, rather than expanding and subsidizing them.

The distortions created by this change in the rules provide a privilege for foreign investors not accessible to domestic investors in any TPP market, and works against developing country partners growing their own institutions and organically raising standards through more open, democratic policymaking. The combined result is to further incentive production to move offshore.

We also have to be clear about the dangers of TPP’s expansive intellectual property protections. Economic research is clear that patents do not increase innovation or growth. Rather, they serve to raise consumer prices and restrain competition. The agreement reportedly will allow “ever-greening” of drug patents and aim for more stringent exclusivity for biosimilar medicines than even President Obama’s budget proposed, meaning less access to medicines and slower development of new ones in TPP members and in third party countries. For the United States, this outcome would mean more national income will be spent on health care—through private spending and public programs. This is not a question of guns versus butter, but of guns, butter, or life-changing medicines.

On my second major point, that TPP fails the geostrategic rationale for checking China’s rise, proponents argue TPP is needed to buttress Asia-Pacific allies with an implicit economic ring-fence around China’s rising power and influence. This is a Cold War containment strategy, but in the 21st century the United States is no longer the epicenter of the world economy. And the strategy violates a seemingly forgotten long-standing tenet of the open world trading system, built painstakingly under U.S. leadership in the postwar years: the quest for peaceful foreign relations would be built on the principle of not excluding countries from the benefit of economic relations—the opposite of what TPP, and the Trans-Atlantic Trade and Investment Partnership would do.

A strategic agreement countering China’s rising influence, to be effective, requires two things: First, it must truly set high standards for international trade and investment; second, it must largely exclude China from the benefits, diverting investment and trade to TPP countries, thereby enticing China to rise to TPP standards. TPP does neither. China’s economic transformation under authoritarian capitalism, it’s ongoing non-market economic structure, and its expanding geopolitical influence pose real foreign and economic challenges for the United States and for the future of open societies, but TPP doesn’t answer to any of them.

On the first question, the level of standards, TPP clearly does not make any economically meaningful advances over the status quo. Although the agreement reportedly would establish well-sounding obligations on labor rights, environmental protection, and accountability for state-owned enterprises, TPP provides no credible mechanism to enforce these standards.

The lose-lose scenarios created by non-credible enforcement mechanisms are best illustrated in the case of Guatemala. In April 2008, Guatemalan workers first filed complaint of systemic labor abuses with the U.S. Department of Labor, as established by the US-Central American Free Trade Agreement; it took the USTR until December 2014 to open a formal dispute settlement case, and a ruling is still far off. Other recent experiences with partner countries Honduras and Colombia show no better results of improved practices or even an end to the rampant murders of free trade union members. This is the worst of both worlds: U.S. workers and businesses still face race-to-the-bottom competition, while global businesses and developing country governments face little pressure to improve conditions. No one has yet to give a clear answer to how TPP will effect free labor standards in one-party state Vietnam, or deter human trafficking of labor in Malaysia or Mexico?

This toothless model of enforcement for things other than investment and commercial disputes—and the fact that the agreement will not discipline currency manipulation in the Asia-Pacific region show that TPP does not set standards at a level that would pose meaningful constraints on China’s economic behavior.

On the second question, TPP cannot feasibly exclude China from the benefits of the TPP bloc. In fact, Chinese officials and technocrats are as enthusiastic about TPP as any business lobbyist in Washington. That’s because the 1 percent in both countries stand to gain substantially from a deal allowing both to expand supply chains into lower-cost developing Asia. TPP will not lock-in a U.S. export advantage in the region so much as a platform for U.S. and Chinese companies that want to offshore production to TPP member countries. This loophole is found in TPP’s “Rules of Origin,” or the percentage of a product’s value must be created in the TPP member country in order to qualify for preferential access to U.S. markets.

China is already more integrated with TPP countries than the United States. China’s total trade (exports plus imports) with non-Nafta TPP partners is nearly double ours--$780 billion in 2014 for China to our $423 billion.[vi] Beijing is now incentivizing Chinese enterprises in a strategy of “going out”—expanding China’s global footprint and brand recognition through massive foreign direct investment.

Deep and growing integration with TPP countries will mean that Chinese producers can enjoy the agreement’s benefits—either by investing in or trading Chinese-produced content through TPP countries, without reciprocating to TPP’s preferential terms. How big an economy is and its geographical proximity to others—the “gravitational factors”—matter much more for international trade patterns than do agreements like TPP. China’s economy will be bigger, grow faster, and be geographically and culturally closer to Asia-Pacific countries no matter what we do.

What’s more, TPP offers negligible counterbalance to the soft power China is earning in the region with its efforts to develop new models of multilateral infrastructure development financing. Here, America’s own unforced errors in foreign economic relations—from Congress’s failure to enact internationally negotiated IMF reforms, to this administration’s diplomatic debacle in their miscalculated strategy of strong-arming allies into a global boycott of China’s efforts to advance multilateral development finance institutions with the Asian Infrastructure Investment Bank and other projects. This U.S. strategic choice actually lost us an opportunity to write the economic rules with China, instead the strategy left us isolated from the international community and left China to write the rules of these multilateral institutions without us.

When this is how we treat our friends, it’s no wonder the United States has a reputation problem in the region. To illustrate the challenge, consider that Chinese officials and scholars routinely raise the Opium War and 1842 Treaty of Nanjing in conversations on trade and investment relations; they named their regional trade development initiative the “New Silk Road Initiative”—this is an area of the world where reputation holds long historical memory. Between the new BRICs bank, the Asian Infrastructure Investment Bank, and China’s Silk Road investment initiatives, China is committing $300 billion of capital investment, and buying untold foreign influence. TPP simply does not match the same return on investment on the political capital we have spent pressing our partners to ignore the same concerns that make trade such a contentious political issue in the United States.

There is a further lesson here: America’s economic future is tied more to the choices we make in the rules of our own economy rather than joining agreements. This Congress has been reluctant to invest in our own infrastructure. China’s leaders not only recognize the growth value from investing in their own economy, but in helping other countries develop in ways that create mutually-reinforcing trade and growth benefits for China. This is what it means to treat countries like true partners rather than geopolitical pawns.

Conclusion

Strengthening international relationships is essential for ongoing U.S. leadership in the world—be it economic, political, or cultural. No American should relish a failure to build deeper, more open relations with foreign partners, nor should we retreat from trying. But getting to a deal that serves more than the narrow interests of powerful corporations, their CEOs and shareholders will require Americans be willing to walk away from the agreement we have now, and for Congress to change how it exercises input and oversight over USTR’s negotiating priorities.

Adam Hersh is the Roosevelt Institute's Senior Economist and a Visiting Scholar at Columbia University's Initiative for Policy Dialogue.

 


[i] Full disclosure: I have been briefed privately, off the record on a number of occasions by USTR officials, but am similarly prevented from revealing the substance of those discussions.

[ii] Larry Summers, “Rescuing the free-trade deals,” Washington Post, June 14, 2015, available at http://www.washingtonpost.com/opinions/rescuing-the-free-trade-deals/2015/06/14/f10d82c2-1119-11e5-9726-49d6fa26a8c6_story.html.

[iv] Daron Acemoglu, David Autor, David Dorn, Gordon H. Hanson, Brendan Price , 2014, “Import Competition and the Great U.S. Employment Sag of the 2000s,” NBER Working Paper No. 20395, available at http://www.nber.org/papers/w20395.

[v] See Economist, “The Arbitration Game,” October 11, 2104, available at http://www.economist.com/news/finance-and-economics/21623756-governments-are-souring-treaties-protect-foreign-investors-arbitration; Simon Lester, “Does Investor State Dispute Settlement Need Reform?” Cato Unbound: A Journal of Debate, May 11, 2015, available at http://www.cato-unbound.org/2015/05/11/simon-lester/does-investor-state-dispute-settlement-need-reform; Joseph Stiglitz, “Where progressives and conservatives agree on trade: Current investor-state dispute settlement model is bad for the United States,” Letter sent to Congressional leaders, May 18, 2015, available at http://www.rooseveltinstitute.org/joseph-stiglitz-and-trans-pacific-partnership-tpp.

[vi] Analysis of United Nations Comtrade Database data, available at http://comtrade.un.org/data/

 

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Daily Digest - February 19: Can Housing Reform Turn Back the Clock?

Feb 19, 2015Rachel Goldfarb

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Set the Wayback Machine for Housing Finance Reform, But to When? (CLS Blue Sky Blog)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Set the Wayback Machine for Housing Finance Reform, But to When? (CLS Blue Sky Blog)

Roosevelt Institute Senior Fellow Brad Miller lays out the history of Fannie Mae and Freddie Mac to argue for a stronger government role in creating a safe and affordable mortgage market.

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Unlike other government programs that people benefit from, like student loans and mortgage deductions, EBT cards are highly visible, creating opportunities for judgment, writes Bryce Covert.

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What Happens if Europe Cuts Off the Greek Banks?

Feb 10, 2015J.W. Mason

Over the past week, it's become clear that the real leverage the European authorities have over Greece is via the banking system. What does Greece need continued loans for? Not to pay for public expenditures, thanks to its primary surplus. Not to pay for imports — Greece has a (small) trade surplus. Not to service current debt, if it defaults. What does need to be financed is the flow of deposits out of Greek banks to the rest of Europe.

Over the past week, it's become clear that the real leverage the European authorities have over Greece is via the banking system. What does Greece need continued loans for? Not to pay for public expenditures, thanks to its primary surplus. Not to pay for imports — Greece has a (small) trade surplus. Not to service current debt, if it defaults. What does need to be financed is the flow of deposits out of Greek banks to the rest of Europe.

So what happens if that financing is cut off, as the European Central Bank is threatening? The usual answer is the collapse of the Greek banking system, followed immediately by Greece’s forced exit from the eurozone. But what concretely are the mechanics of this? What is the exact chain of events from an end to ECB financing to Greek exit from the euro? I don't know the answer to this, but the more I think about it, the less confident I am in the conventional wisdom.

What concretely does it mean that the ECB is providing liquidity support to Greek banks? As far as I can tell, it is this: When a holder of a deposit in a Greek bank wants to make a payment elsewhere, either to purchase a good or asset outside Greece or to move the deposit to a different bank, the Greek bank must transfer an equal quantity of settlement assets to the bank receiving the deposits. These settlement assets are normally acquired on the fly by issuing a new liability in the interbank market, but if other banks are unwilling to accept the liabilities of Geek banks, they can be borrowed directly from the ECB against suitable collateral. This is the lending that the ECB is threatening to cut off.

What if the Greek banks couldn't acquire settlement assets? Then other banks would not accept the deposits, and it would be impossible to use deposits in Greek banks to make payments. Depositors would find their accounts frozen and, in the normal course of events, the banks would be shut down by regulators.

But Greece still has a central bank. My understanding is that much of the day-to-day business of central banking in Europe is carried out by the national central banks. In principle, even if Greek banks couldn't acquire settlement assets by borrowing from the ECB, they could still borrow from the Greek central bank. This wouldn't help with payments to the rest of Europe, since reserve balances at the Greek central bank wouldn't be accepted elsewhere. But I don't see why the Greek central bank couldn't keep the payments system working within Greece itself.

If the Greek central bank is willing to provide liquidity on the same terms as the ECB, what's going to force the Greek banks to shut down? It's not as though there's any Europe-wide bank regulator that can do it.

In a sense, this would be a kind of soft exit, since there would now be a Greek euro that would not be freely convertible into a non-Greek euro. But I don't see why it would have to be catastrophic or irreversible. Transactions within Greece could continue as before. It might not make much difference for routine trade, either, since the majority of Greek imports come from outside the EU.

Where it would make a difference is precisely that it would prevent Greek depositors from moving their funds out of the country. (Greek banks would also presumably be limited in their ability to provide physical cash to depositors, but I don’t think this is important.) In effect, by cutting Greece off from the European interbank payment system, the ECB would be imposing capital controls on Greece's behalf. You could even say that, if the threat of cutting off liquidity support can trigger a run on Greek banks, actually doing so would ensure that there isn't one.

Now maybe I'm wrong about this. Maybe there is a good reason why the Greek central bank can't maintain the payment system within Greece. But I also think there's a larger point here. I'm thinking about the end of the gold standard in the 1930s, when breaking the link with gold was considered an unthinkable catastrophe. And yet the objective basis of the money system in gold turned out to be irrelevant. I think, in the same way, the current crisis may be revealing the reflexive, self-referential nature of money. On a certain level, the threat against Greece comes down to: "You must make your money payments, or we will deprive you of the means to make your money payments."

The rule of the money system requires that real productive activity be organized around the need for money. This in turn requires that money not be too freely available, but also that it not be too scarce. Think of Aunt Agatha in Daniel Davies' parable. Suppose her real goal is to run her nephew's life — to boss him around, have him at her beck and call, to know that he won't make any choices without asking if she approves. In that case, she always has to be threatening to cut him off, but she can't ever really do it. If he knows he's getting money from her, he won't care what she thinks — but if he knows he isn't, he won't care either. He has to be perpetually unsure. And in keeping with Davies' story, the only thing Jim actually needs the money for is to continue servicing his debt to Aunt Agatha. The only real power she has is a superstitious horror at the idea of unpaid debts.

In this way I've tentatively convinced myself that all Syriza needs to do is hold firm. The only way they can lose is if they lose their nerve. Conversely, the worst outcome for the ECB and its allies would be if they force Greece into default and everyone watches as the vengeful money-gods fail to appear.

UPDATE: It turns out that Daniel Davies is making a similar argument:

Capital controls are arguably what Greece needs right now - they have balanced the primary budget, and they need to stop capital flight. From the ECB's point of view, I'd agree that the move is political, but it also means that they are no longer financing capital flight.

There's a sensible negotiated solution here - with a lower primary surplus than the program (in which context I think Varoufakis' suggestion of 1.5% is not nearly ambitious enough), a return to the structural programs (the Port of Piraeus really does need to be taken out of the political sphere), and an agreement to kick the headline debt amount into the far future (in service of which aim I don't think all the funny financial engineering is helping).

The fall-back is a kind of soft exit, with capital controls. But the massive, massive advantage of capital controls over drachmaisation is that they  preserve foreign exchange. Greece imports fuel and food. With capital controls, it can be sure of financing vital imports.

The fact that Davies is thinking the same way makes me a lot more confident about the argument in this post.

J.W. Mason is a Fellow at the Roosevelt Institute.

Note: A version of this post originally appeared at The Slack Wire.

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Daily Digest - February 5: Congratulations, Campus Network!

Feb 5, 2015Rachel Goldfarb

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Winners of 2015 MacArthur Awards for Nonprofit Organizations (AP)

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Winners of 2015 MacArthur Awards for Nonprofit Organizations (AP)

The Roosevelt Institute | Campus Network is among this year's recipients of the 2015 MacArthur Award for Creative and Effective Institutions.

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Daily Digest - February 2: Trade Shouldn't Mean Higher Drug Prices

Feb 2, 2015Rachel Goldfarb

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Don't Trade Away Our Health (NYT)

Roosevelt Institute Chief Economist Joseph Stiglitz argues that the Trans-Pacific Partnership's intellectual property agreements will raise drug prices unnecessarily and slow innovation.

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Don't Trade Away Our Health (NYT)

Roosevelt Institute Chief Economist Joseph Stiglitz argues that the Trans-Pacific Partnership's intellectual property agreements will raise drug prices unnecessarily and slow innovation.

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Rupert Neate reports on the final numbers for the fourth quarter of 2014, which showed slower growth than economists had expected. Still, overall GDP growth for the year was higher than 2013.

How Tipping Helped Make Sexual Harassment the Norm for Female Servers (In These Times)

Jenny Brown says that workers who rely on tips often have no choice but to put up with harassment, as discussed in a new report from Restaurant Opportunities Centers United.

Uber and Lyft Drivers May Have Employee Status, Judge Says (Bloomberg)

In two different lawsuits, judges have indicated that they are unconvinced that drivers for these services are merely consumers of a software platform, reports Karen Gullo.

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Daily Digest - January 9: Charity and Government Are Not Interchangeable

Jan 9, 2015Rachel Goldfarb

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Mike Konczal and David Beito Debate Charity vs. Government (Stossel)

Roosevelt Institute Fellow Mike Konczal counters right-wing arguments that charity can take the place of government in protecting social welfare.

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Mike Konczal and David Beito Debate Charity vs. Government (Stossel)

Roosevelt Institute Fellow Mike Konczal counters right-wing arguments that charity can take the place of government in protecting social welfare.

  • Roosevelt Take: Mike explained his argument on the "voluntarism fantasy" in greater depth in Democracy last year.

Europe’s Lapse of Reason (Project Syndicate)

Roosevelt Institute Chief Economist Joseph Stiglitz says that even as Europeans elect new leaders in their countries, their governments continue on a failed path of austerity, which must change.

House Democrats Swiftly Kill a Quiet Republican Plot to Protect Wall Street (The Guardian)

David Dayen says the work to stop this Republican anti-financial reform bill package demonstrates the Democratic strategy of making these economic fights very public.

Obama Plan Would Help Many Go to Community College Free (NYT)

The president's proposal would cover tuition for full- and half-time students who maintain a 2.5 GPA, report Julie Hirschfeld Davis and Tamar Lewin. It's a hard sell with a Republican Congress.

This Boehner/McConnell Obamacare 'Fix' Could Hurt Millions of Americans (LA Times)

Michael Hiltzik says readers shouldn't believe a GOP-authored op-ed's claims about changing the definition of full-time work under Obamacare. It's really a handout to employers.

America’s Workplaces Are Hostile to Families (The Nation)

Michelle Chen explores the ways that American employers make it difficult for workers to have children, as well as policy proposals that could fill the gaps.

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Daily Digest - December 8: What Changes When China is the Largest Economy?

Dec 8, 2014Rachel Goldfarb

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The Chinese Century (Vanity Fair)

Roosevelt Institute Chief Economist Joseph Stiglitz considers the implications of China becoming the world's largest economy, particularly as the U.S. system perpetuates so much inequality.

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

The Chinese Century (Vanity Fair)

Roosevelt Institute Chief Economist Joseph Stiglitz considers the implications of China becoming the world's largest economy, particularly as the U.S. system perpetuates so much inequality.

U.S. Jobs Report Beats Forecasts as 321,000 Positions Added in November (The Guardian)

Heidi Moore looks at the November jobs report, which surprised many economists with its strength. She emphasizes that many of the jobs created are low-wage.

Even at 321,000 Jobs a Month, It Will Be Nearly Two Years Before the Economy Looks Like 2007 (Working Economics)

Charting out scenarios for catching up with the jobs shortfall, Elise Gould points out that even a "good" jobs report like this one isn't indicative of a speedy recovery.

Recovery at Last? (NYT)

Paul Krugman considers what recent positive economic news means for our understanding of this recession. He thinks it's proof that government paralysis slowed the recovery.

Wall Street to Workers: Give Us Your Retirement Savings and Stop Asking Questions (In These Times)

David Sirota looks at current cases in which public officials have refused to release information about the fees paid to investment firms by public pension funds.

  • Roosevelt Take: Roosevelt Institute Fellow Saqib Bhatti explains how predatory municipal finance deals are harming taxpayers in his recent report.

Labor's New Reality -- It's Easier to Raise Wages for 100,000 Than to Unionize 4,000 (LA Times)

Harold Meyerson looks at the labor movement's shift toward focusing on issues that impact many workers who are not members, a project in which Los Angeles is at the center.

Elizabeth Warren Doesn't Like This Treasury Nominee. Here's Why. (Mother Jones)

Erika Eichelberger explains Senator Warren's opposition to Antonio Weiss's nomination, which is based on his lack of experience in banking regulation and coziness with the financial sector.

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Daily Digest - October 30: The Economic Impact of Cities' Sister Act

Oct 30, 2014Rachel Goldfarb

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Sister City Relationships Boost Business in Chicago, Phoenix and S.F. (Next City)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Sister City Relationships Boost Business in Chicago, Phoenix and S.F. (Next City)

Roosevelt Institute | Campus Network Senior Fellow for Defense and Diplomacy Nehemiah Rolle examines how these relationships allow cities to be power players in the global economy.

Why Millennials Can Fix Healthcare (Huffington Post)

Campus Network Senior Fellow for Health Care Emily Cerciello argues that Millennials' focus on how businesses can improve society could dramatically change the health industry.

Why Dems Are Winning on Minimum Wage (Politico)

Timothy Noah points at numerous races in which raising the minimum wage is proving the perfect wedge issue, and could help to boost Democratic turnout at the polls.

What Happens When People—Rather Than Politicians—Are Given the Chance to Vote for a Higher Minimum Wage? (The Nation)

Michelle Chen says economic justice advocates see these ballot initiatives as a far more straightforward way to improve people's lives than dealing with politicians.

Watchdog Slams Mortgage, Student Loan Servicers (The Hill)

The Consumer Financial Protection Bureau says it has found a broad array of illegal practices, reports Benjamin Goad, but it won't be announcing which servicers are breaking the law.

New on Next New Deal

Election 2014: Women's Rights in the Balance

Roosevelt Institute Fellow Andrea Flynn introduces her series examining the ways that close-call races across the country could impact health care, economic issues, and more. The state-by-state analyses, published throughout today and tomorrow, can be found here.

We Need Pretrial Detention Reform in Massachusetts

Roosevelt Institute | Campus Network Senior Fellow for Equal Justice Jessica Morris says alternatives to bail would create a more just legal system in her state.

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Threat of Ebola Highlights Problems in the U.S. Public Health System

Oct 15, 2014Emily Cerciello

It is likely that Ebola will be contained in the United States, but errors in Texas show we have room for improvement in responding to public health emergencies.

It is likely that Ebola will be contained in the United States, but errors in Texas show we have room for improvement in responding to public health emergencies.

On October 15, the second case of Ebola transmitted in the United States was confirmed in Texas between patient Thomas Eric Duncan and a health worker. Even more frightening, perhaps, is the sequence of events leading up to the transmission, and the many questions it generates about the preparedness of the U.S. in responding to public health emergencies.

Six days after Duncan arrived in the United States  – having passed a screening for fever at a Liberian airport – his symptoms progressed and he sought care at a Texas hospital, where he was promptly sent home with antibiotics.

The hospital claimed his early discharge was the fault of the electronic health record (EHR) for not communicating the patient’s travel history, but soon issued a correction saying his history was “available to the full care team…there was no flaw in the EHR.”

No matter who or what is at fault for letting Duncan fall through the cracks, we cannot let this huge breach in protocol happen again.

More than a week later, and several days after the patient was confirmed to have Ebola, the apartment at which he was staying with four individuals remained unsterilized. The quarantined family had the responsibility of arranging clean bedding until a waste management company agreed to clean the apartment. When they arrived, contractors wore no protective equipment and used power washers to sanitize – a practice which is likely not the most effective method of treating infectious surfaces.

And then, on October 12, the CDC confirmed that a nurse who had worn full protective gear while treating Duncan had contracted Ebola due to a yet unknown breach in protocol. On, October 15, another nurse who treated Duncan was confirmed to have the virus, showing symptoms just one day after boarding a commercial flight returning from Cleveland to Dallas.

These events point to several issues in the U.S. public health infrastructure: who is in charge when high-stakes infectious diseases spread? How should the U.S. prevent diseases originating in other countries? What can we learn from this case to prevent other errors in the system?

First, we need to decide who, or which agency, is in charge when a public health emergency occurs. Larry Copeland, a reporter at USA Todayagrees. Currently, the CDC provides assistance and guidelines to states and educates providers about how to prepare for Ebola. The choice to enact these protocols and successful operation of these procedures remains with the states. The CDC also issues guidelines to prohibit practitioners who have treated Ebola patients from boarding commercial flights. Separately, the Department of Homeland Security controls issues of air travel, including providing guidance to airlines and calling for symptom screenings at high-profile airports.

So there is no single entity leading the public health response to Ebola. While the CDC may fall into this role, it is up to individual hospitals and practitioners to respond promptly and effectively. Unfortunately, in Texas, several errors – including sending the patient home while infected, delaying sanitation of the patient's apartment, and developing two more confirmed cases – showcase how disorganization in public health can lead to unfavorable outcomes.

And how should the U.S. prevent diseases originating in other countries? Experts agree that closing borders of West African countries would worsen the crisis. Unfortunately, the issue of Ebola as it relates to air travel has become politicized by conservatives, prompting CDC Director Tom Frieden to speak out strongly against a travel banConservative Republicans have even attempted to relate Ebola to anti-immigration reform by claiming that migrants from Central America could bring Ebola through the southern U.S. border (despite the fact that no outbreak of Ebola has ever occurred in Latin America).

In a press conference, Dr. Frieden assured that strong core public health functions could stop the spread of Ebola. Although the CDC and public health workers successfully tracked close contacts of Duncan and isolated those at high risk, those steps could not stop the first incorrect diagnosis or the spread to front-line health workers – arguably the most important role in stopping the epidemic.

The implications of public health slipups cannot be understated. We need to start a conversation about the relationship between federal, state and local public health authorities. We need to simplify and communicate protocols to hospitals and ensure that providers and communities are enacting preparations for infectious diseases. Valuing the field of public health as much as we do individual appointment-based care is essential to stopping an epidemic. We need to organize authority and mobilize an informed and efficient workforce to improve the preparedness of the U.S. health system in responding to public health emergencies.

Emily Cerciello is the Roosevelt Institute | Campus Network Senior Fellow for Health Care, and a senior at the University of North Carolina at Chapel Hill.

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