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Piketty’s Model of Inequality and Growth in Historical Context, Pt 2

Many individuals helped construct neoclassical economics, often with financial support from the robber barons and their successors. I will focus on two: in the United States, John Bates Clark (1847-1938), and in Europe, Vilfredo Pareto (1848 to 1923). . . . → Read More: Piketty’s Model of Inequality and Growth in Historical Context, Pt 2

Piketty’s Model of Inequality and Growth in Historical Context, Pt 1

In Thomas Piketty’s doomsday model, slowing of growth in the twenty-first century will cause an inexorable increase in inequality. Piketty is not the first to propose a grand model of inequality and growth. To get some perspective on his model, let’s see what the “classical” economists had to say (Part I), and how the “neoclassical” economists responded (Part II). . . . → Read More: Piketty’s Model of Inequality and Growth in Historical Context, Pt 1

The Mouse That Wouldn’t Die: How a Lack of Public Funding Holds Back a Promising Cancer Treatment

Spring 1999. “Professor Cui, this mouse didn’t get cancer. Should I get rid of him?” “There must have been a mistake,” said Cui, “Inject him again.” Two weeks later, still no cancer. “Try again with a higher dose!” Still no cancer. No cancer even at a million times the lethal dose. Cui decided to breed the mutant mouse. . . . → Read More: The Mouse That Wouldn’t Die: How a Lack of Public Funding Holds Back a Promising Cancer Treatment

Congressman Bill Foster Explains Why Middle Class Tax Cuts Lead To Economic Growth

If you give a dollar to a middle class family, they will spend it in the local economy and spur growth, or they will use it to make a high return investment, such as paying for their children’s college. If you give that same dollar to a very wealthy individual, instead of circulating it in the local economy, they will place it in lower-return investments, often offshore. . . . → Read More: Congressman Bill Foster Explains Why Middle Class Tax Cuts Lead To Economic Growth

Whose Water? Ours! How to End California’s Water Crisis

The California Constitution says the water belongs to the people. Yet the state gives water almost free to agriculture–resulting in enormous waste and dire “shortages” during droughts. If the state were to charge for water, that would end the water crisis–and solve California’s fiscal crisis too. . . . → Read More: Whose Water? Ours! How to End California’s Water Crisis

Increasing the Minimum Wage Can Actually Create Jobs–If It’s Enforced

Back when I studied economics, we “proved” in class that a minimum wage causes unemployment. But that proof depends on assuming a perfectly competitive market. Big low-wage employers like Wal-Mart have substantial market power; they can deliberately under-staff operations to force down wages. In that case, a minimum wage increase can actually create jobs–if it can be enforced. . . . → Read More: Increasing the Minimum Wage Can Actually Create Jobs–If It’s Enforced

The Affordable Care Act Will Raise Wages

The new Congressional Budget Office report projects that the Affordable Care Act will lead to a decline in full-time equivalent workers of 2.5 million. This is people voluntarily deciding to work less–like mothers with small children, or workers in poor health or close to retirement. That should mean higher wages for the remaining workers. . . . → Read More: The Affordable Care Act Will Raise Wages

What’s Crippling the Recovery: Lack of Investment Demand or Too-Big-to-Lend Banks?

Quantitative Easing (QE) was supposed to stimulate the economy by encouraging investment with low interest money. That hasn’t happened, but why? Does no one want to borrow, or do banks not want to lend? My favorite financial columnist, Yves Smith, has laid out both theories. . . . → Read More: What’s Crippling the Recovery: Lack of Investment Demand or Too-Big-to-Lend Banks?

Taxing Carbon is Like Taxing Diamonds

A carbon tax would operate much like a diamond tax, for reasons both of demand and supply. . . . → Read More: Taxing Carbon is Like Taxing Diamonds

How a Progressive Tax System Made Detroit a Powerhouse (and Could Again)

In 1995, we encountered a group of economic advisors to Governor John Engler of Michigan, intent on cutting property taxes. We reminded them of California’s 1979 Proposition 13. After Prop. 13 rolled back and froze property taxes, sales taxes reached crushing levels, budget crises became routine, local services collapsed, and public schools fell from the best in the nation to among the worst. But Engler was determined. . . . → Read More: How a Progressive Tax System Made Detroit a Powerhouse (and Could Again)