An opinion article in The Hill cites the research of Robert Pollin, UMass economics professor and co-director of the Political Economy Research Institute (PERI) and economist Heidi Garrett-Peltier. Their research supports the argument that investments in reforestation would have a bigger impact, both economically and environmentally, on climate change than investments in energy. Specifically, every million dollars of investment in forest, stream restoration and sustainable land management would produce 39 jobs. These investments are cheaper and would generate more jobs than investments in conventional energy sources. And, although most of the attention on climate change is attributed to coal power plants and automobile’s emissions, only half of global greenhouse gases come from energy. Investing in reforestation would generate immediate shovel-ready jobs and significantly cut down on global green house emission. (The Hill, 3/9/10)
Category: UMass Economics
Fourteen UMass Amherst students presented papers at the Eastern Economic Conference last month in Philadelphia. The Eastern Economic Association is a not-for-profit corporation whose object is to promote educational and scholarly exchange on economic affairs.
Presenters included:
Bengi Akbulut
“Interrogating the Turkish State and Sustainable Development: The GEF Experience”
Hasan Cömert
“Did the Fed Trigger the U.S. Financial Crisis of 2008?”
Noah Enelow
“The Relationship between Ecology and Trade: Proposal for a Theoretical Framework”
Charalampos Konstantinidis
“When Everybody Cares: Environmental Technocratism and (the Need for) Radical Ecological Economics”
Iren Levina
“Towards a Dialectical Marxist Theory of Finance”
Cem Oyvat
“How Migration Affects the Inequality in Developing Countries: A Critique of the Kuznets Curve”
Hyun Woong Park
“A Critique of the Circulationist Tendencies within the Social Paradigmatic Approach to Marx’s Theory of Value”
“Oversimplification of Overdetermination: A Critique of Overdeterminist Marxism”
Zhoachang Peng
“The Tragedy of ‘Quantitative Poverty Reduction’: An Analysis of What Has Gone Wrong with Rural Poverty Reduction in Post-Mao China”
“From Bless to Curse: Releasing and Absorbing Agricultural Surplus Labor in Maoist and Post-Mao China”
Luis Daniel Rosero
“Insuring Against Neighboring Crises: Contagion and the Reserve-Accumulation Decision by Latin American Central Banks”
Mark Silverman
“Causation and Constitutivity: A Critical Appraisal of Marxian Overdetermination”
Joao Paulo A. de Souza and Ben Zipperer
“Integrating Neo-Keynesian and Neo-Marxian Theories of Distribution”
Hasan Tekguc
“Importance of Food Self-Provisioning for Food Security of Rural Households”
Zhun Xu
“The Political Myth of Land Privatization in China”
UMass Amherst economics professor, Nancy Folbre, argues in her NY Times Economix blog that a massive default by “underwater” homeowners would actively reshape policies on home buying and lending. Folbre claims that it would “decisively increase the bargaining power of indebted homeowners, force changes in current federal policy and state regulation, and give individual debtors far more leverage in negotiating with creditors.” However, Folbre points out that most homeowners who are underwater won’t simply “mail their keys to the bankers” because they already love the neighborhood they live in, don’t want to disrupt the flow of their personal lives and feel a moral obligation to their financial commitments.
March 1, 2010
Will ‘Underwater’ Homeowners Make Waves?
By NANCY FOLBREBankers call it “negative equity,” but we all call it being “underwater.” A rising tide of articles point out that a large percentage of American homeowners — perhaps as many as 25 percent — owe significantly more on their homes than current market value.
If the difference between what they owe and what they could get if they sell is small, say less than 10 percent, homeowners may want to hold their breath and hope for the best. After all, home prices will probably rise eventually.
But if the difference is much greater than 10 percent, some experts argue, individuals should just walk away and mail their keys to the bank.
What would happen if all the homeowners in really deep water simply moved out and mailed their keys to the bank within the next six months?
A widespread strategic default would look something like a wildcat strike. It would decisively increase the bargaining power of indebted homeowners, force changes in current federal policy and state regulation, and give individual debtors far more leverage in negotiating with creditors.
Will this happen? The odds are against it. Many underwater homeowners are attached to their homes and neighborhoods and reluctant to disrupt their personal lives.
Bankruptcy significantly damages credit ratings, limiting future ability to borrow. Further, most individuals feel a moral obligation to meet their financial commitments.
On the other hand, evidence is mounting that many homeowners were misled by aggressive, largely unregulated lenders. They didn’t jump underwater — they were pushed.
UMass economics professor, Nancy Folbre, is cited in an op-ed article about teaching children about financial responsibility. Folbre urges those working in child economic outcomes to push for policy changes because children can’t advocate for themselves. “By the time they grow up, it’s too late to influence the policies that partly determine their own success in adulthood.”
(Opinion: How to Teach Kids Money Matters, 2/26/10)
Robert Pollin, UMass economics professor and founding co-director of PERI (Political Economy Research Institute), claims that we can reduce the unemployment rate to 4% by 2012, if we can create 18 million jobs. He says that even though 18 million jobs sounds overwhelming, it’s not unrealistic. In fact, 4% unemployment is similar to the rate we had coming out of the recession in 1975 with President Gerald Ford and in 1977-78 with President Carter. One way of reaching this goal, claims Pollin, is by “firming up the economy’s floor” and then “building and injecting roughly $700 billion in new private credit into productive job creating investments.”
18 Million Jobs by 2012
by Robert Pollin
February 18, 2010The job-creation proposals coming from the Obama administration, in the president’s January 27 State of the Union address and elsewhere, generally point in the right direction, with more spending for clean energy, infrastructure and support for small businesses. These proposals follow from Obama’s February 2009 economic recovery program, which injected $787 billion in new spending or tax relief into the economy over two years. However, just as last February’s stimulus program was too small to counteract the evaporation of $16 trillion in household wealth resulting from the financial collapse, the scope of Obama’s current proposals is nowhere near large enough for the situation today.
For example, Obama has proposed $33 billion in new tax credits for small businesses. By contrast, private borrowing by businesses over the previous six months was down by $1.5 trillion relative to 2007, with the largest proportional cutbacks coming from small businesses. What’s more, Obama’s call to freeze discretionary federal spending in nonmilitary areas is dangerously misguided. The fiscal deficits of 2009 and 2010–at between $1.4 trillion and $1.6 trillion, or around 10 percent of GDP–are indeed very large. But the freeze obscures what Obama and his advisers clearly know–that deficit spending is part of the solution to our economic predicament and will remain so until we see millions of people getting hired into decent jobs.
To read the article in full, click here.
Robert Pollin, UMass Amherst economics professor and co-director of the Political Economy Research Institute (PERI), says jobs in education and research have much lower start-up costs than those in fields such as construction. His comments come as part of the debate over whether the $15 billion federal jobs bill moving through Congress will create enough jobs to offset adding to the national debt. (USA Today, 2/25/10)
Gerald Epstein, UMass economics professor and co-director of the Political Economy Research Institute (PERI), is a member of the group SAFER, an organization that supports the Volcker policy. This policy was brought forth by the Obama administration for the purpose of reducing financial recklessness among big banks. With this new policy, large banks would be prevented from conducting their own proprietary trading and owning hedge funds. However, Epstein remains skeptical that the policy will not have a tangible impact on the way large banks operate. He claims that it would require political magic or “a big push from the Obama administration” to actually implement.
Maybe Jamie Dimon and his colleagues at JPMorgan Chase (JPM: 40.87, 0.85, 2.12%) didn’t get the memo: the Obama administration wants to prevent another financial crisis by reining in Wall Street risk and putting an end to banks that are “too big to fail.”
The administration hopes to achieve this through the so-called Volcker rule, which seeks to limit risk by barring banks that accept government-backed deposits from conducting their own proprietary trading and from owning hedge funds.
Named for former Federal Reserve chairman and current top Obama economic advisor Paul Volcker, the proposal was unveiled last month, and the White House is pushing for its inclusion in the broad financial reform legislation slowly winding its way through Congress.
Almost immediately, key members of Congress expressed skepticism for the rule, notably Senator Chris Dodd, D-Conn., chairman of the banking committee that is overseeing financial reform.
European leaders earlier this week publicly denounced the proposal, saying it ran counter to Europe’s fiscal interests and that it doesn’t reduce risk, just moves it somewhere else.
Then on Tuesday JPMorgan, the second biggest U.S. bank, got a little bigger by slapping down $1.7 billion for – naturally – a proprietary commodities trading business owned jointly by Sempra Energy and Royal Bank of Scotland (RBS: 11.13, 0.41, 3.82%).
Speculation quickly arose as to whether Dimon, JPMorgan’s CEO, was sending a not-very-subtle message to the president.
“Is it possible that JPMorgan Chase does not see these proposed rules and laws going into effect for any sustained period or perhaps not at all,” asked influential banking analyst Richard Bove of Rochdale Securities.
Bove went on to praise Dimon for a “courage sorely lacking elsewhere among other leaders of American banks.”
To read more, please go to http://www.foxbusiness.com/story/markets/widespread-skepticism-volcker-rule/
Nancy Folbre, UMass economics professor and contributor the NY Times Blog, Economix, examines gender inequality and trade-offs in a recent post. Although women’s income, relative to men’s, has improved over the last forty years, increasing from 62 cents to the dollar in 1970 to 80 cents in 2008, Folbre argues that it has not come without trade-offs. For instance, women are less likely to get full-time job because they are typically the family caretakers. And although unmarried women, who don’t have as many responsibilities, earn almost equal pay as men, Folbre points out that “going without a family seems a rather steep price to pay for equality.”
February 22, 2010
Gender Trade-Offs
By NANCY FOLBREIt’s pretty hard to get something for nothing. That’s one reason why economists like to analyze trade-offs.
Changing gender roles in our society have created some rather complicated trade-offs, and that helps explain why it’s hard to assess progress toward gender equality.
Women on nonfarm payrolls — a measure that includes part-time workers — now slightly outnumber men. Employers find women attractive to hire in part because women typically earn less than men with the same education.
A recent comparative analysisof 21 countries by two sociologists at the University of Washington, Becky Pettit and Jennifer Hook, reports that women’s labor-force participation tends to be lower in countries where their earnings relative to men are higher.
For instance, in Germany and Italy, a smaller percentage of women work for pay than in the United States, but those who are employed earn more, on average, relative to men. Women who overcome the obstacles to employment there tend to be high earners.
Across all countries, overall inequalities in wage income influence average differences in men’s and women’s earnings. So do public policies such as child care provisions that help adults cope with trade-offs between paid and unpaid work — and, more broadly, between economic independence and family commitment.
These trade-offs remain sharply significant in the United States.
Robert Pollin, UMass economics professor and co-director of the Political Economy Research Institute (PERI), argues that maintaining the moratoria on drilling in the U.S. oil and gas reserves won’t significantly affect the GDP. According to Pollin the most important factor is the price of oil. If the price of oil goes up, the GDP will be influenced by how effective we are at energy conservation. “The more we invest now in energy efficiency and building retrofits and public transportation, that is going to reduce the impact of any kind of a price shock on GDP,” states Pollin.
(Daily Climate News and Analysis, 2/18/2010)
In an article for Monthly Review, UMass Amherst economics professor emeritus, Rick Wolff, outlines Greece’s role in the global capitalist crisis. According to Wolff, although Greece’s role is minor in relation to the central causes of the crisis, Greece faced an economic downturn as a result of the crisis and, like so many other nations, borrowed a lot. Now, lenders are requiring them to pay much higher interest rates on their current debt obligations and are also threatening to stop lending unless poorer countries, like Greece, lower the ratio between their debt and their GDP.
The Stakes in “Punishing” Greece
by Rick Wolff
February 11, 2010
The global capitalist crisis first brought an economic downturn to Greece, and now the “recovery” seeks to impose on the Greek people an indefinite period of economic suffering as global lenders provide funds to the richer, larger capitalist economies elsewhere so that they can avoid what is demanded of the Greeks. The same leaders of business and government who produced the crisis are managing the “recovery” in just this way.