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Among the developed nations, the United States has one of the lowest tax rates. The U.S. also has the greatest concentration of wealth among industrialized nations and the lowest mobility making it difficult for low income people to move to middle and high income status.As it turns out, a strong social sector is essential for the financial well being of families and for a thriving economy. Take Denmark the highest taxed country, for example. While its minimum wage is three times that of the U.S., its unemployment is only 4.1%. It provides universal health care, early childhood education for all children, and a modern public rail network. At the same time, its citizens have high mobility, and it's private industry is thriving.All developed countries combine both a social sector and private enterprise. Aspects of both socialism and capitalism are part of their economies. The question is not whether one or the other is good or bad. Rather the question is how to organize and regulate both of these aspects of the economy to provide financial security and opportunity to all families and citizens. When a country gets both the social and market based aspects of its economy right, its families and its economy thrive. When it gets it wrong, its citizens and its economy suffer. Read the column in the Aitkin Independent Age "Tea Party suffers from mass myopia" by David Strand, Chair of the Aitkin County DFL.
Last Updated on Thursday, 06 May 2010 10:25
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A year ago President Obama signed the American Recovery and Reinvestment Act, a $787 billion bill designed to prevent job loss, create jobs, and jumpstart the economy. The Congressional Budget Office reports that the stimulus package blunted the impact of the worst recession in 70 years by creating up to 2.1 million jobs in the last three months of 2009. The package boosted the economy by 3.5% and lowered the unemployment rate by up to 2.1% (February 23, Reuters).
Tracking monthly job loss data from the start of the recession to today, Economic Policy Institute Vice President Ross Eisenbrey demonstrates that the most severe job loss of over 700,000 per month occurred in the months immediately preceding the Recovery Act. EPI President Lawrence Mishel noted in a debate on the PBS News Hour that once the Recovery Act investments began, job losses immediately began a decline to about 35,000 by the end of 2009.
During a podcast interview with The Nation editor Chrisopher Hayes, economist Josh Bivens stated that GDP data likewise shows the positive impact of the Recovery Act. During the last quarter of 2008 and first quarter of 2009, GDP contracted at a 6% annual rate. Once Recovery Act spending began in the second quarter of 2009, GDP contracted by less than 1% and has grown each quarter since then.
Last Updated on Monday, 22 March 2010 00:00
The Financial Reform and Consumer Protection Act was passed by the House in December and will soon be under consideration in the Senate. As investigative reporters have had a chance to study the bill, they have discovered that the original proposal for the bill has been greatly watered down as a result of vigorous lobbying by the financial industry. Click here to download a document that contains links to several articles and videos including a Wall Street Journal article on the failure to reform derivatives, an excellent article by Mother Jones financial reporter Kevin Drum, and a lively Bill Moyers interview with Kevin Drum and David Corn, Mother Jones' Washington Bureau Chief. Drum and Corn express concern that when the public doesn't understand a complex issue, citizens are less likely to take action. While financial reform is an uphill battle, articles on the top financial heroines and the bill to reinstate the Glass-Steagall Act sponsored by Senators McCain and Cantwell give hope that some degree of reform might yet be achieved. Get the weblinks to the articles and video here.
Action Alert: Champion of American Families Elizabeth Warren Needs Help on Consumer Financial Protection Agency
Finance heroine Elizabeth Warren wrote that the battle in the Senate over a proposed consumer financial protection agency is the final show down between banks and American  families. "The next few weeks will determine whether families will have to play by rules written by the banks and for the banks -- rules that let the industry get away with anything. In my view, we cannot let families lose again." Read the Huffington Post article:
"Will the Banks Win Again: Bailout Watchdog Rallies Support for Consumer Protection Agency"
Elizabeth Warren writes that we can count on her to do her part, but she needs our help. She has asked that as many people as possible call key members of the Senate Banking Committee and write letters to the editor supporting the Consumer Financial Protection Agency. Click here for members of the Committee. Clicking on a Senator's name brings you to a webpage. The Senator's contact information is usually listed at the bottom of the page. The Chair of the Senate Banking, Housing, and Urban Affairs Committee is Christopher Dodd, Tel: (202) 224-2823 | Fax: (202) 224-1083. The Ranking Republican Member is Richard Shelby, (202) 224-5744,
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Last Updated on Thursday, 04 February 2010 00:51
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With Michael Moore's new documentary "Capitalism: A Love Story" in theaters right now, it's a good time to take a closer look at economics. Two economists fill in the details on the unfairness of American capitalism which Moore presents in his movie. One is Elizabeth Warren, Chair of the Congressional Panel that oversees the Wall Street bailout, a Harvard Law Professor, and an expert on family finance and bankruptcy. Her book The Two Income Trap gives us a microeconomic look into the much greater financial risk that families face today than they did in the 1950's through the 1970's.
Thomas Palley, an economist at Yale University, has done research looking  at how American capitalism underwent a great shift starting during the Reagan administration, continuing under President Clinton, and accelerating under the Bush administration.
Both give us insight into Moore's observations of American capitalism in approximately one hour lectures based on their research. For an introduction and weblinks to Elizabeth Warren's video "The Coming Collapse of the Middle Class" and Thomas Palley's talk "The American Bubble Addiction," click on
Taking off from Moore's "Capitalism"
Easy Economics: From Micro to Macro
Last Updated on Saturday, 10 October 2009 23:22
 Last month, the chair of the FCC proposed that the four Net Neutrality principals that have been guiding the FCC be adopted as formal rules. In addition, Chairman Genachowski proposed two more rules that would open up the network management practices of the ISPs so users can see how the network is being managed if they wished to. Republican opposition to these plans has started to grow, and in the last few days a letter has been sent both to the FCC and the White House asking them to not adopt these rules at the FCC’s October 22 meeting. Republican legislators have also threatened to introduce bills that would bar the FCC from adopting these rules.
While these methods are not likely to stop the FCC from adopting the new regulations, I believe that it is important that we write our Representatives and Senators showing support for Net Neutrality and asking for their help in making sure that the FCC can pass these new regulations. The Republican concerns that these will slow and deter the growth of network infrastructure are weak arguments at best. The FCC is only looking to formalize what they already do and add on a provision that would keep network maintenance methods open and understood.
Some people have made the argument this is the FCC micromanaging the internet or that the this will stop companies from managing their networks effectively and efficiently. These new rules do not propose to tell companies how to manage their networks. They only insist that the ISPs tell us, the consumers, how they are managing their networks so we can see for ourselves. This helps keep the internet open for us all.
Below is a link to an Ars Technica article from last month that does a good job of explaining the Chairman’s position without going into lofty, technical language.
http://arstechnica.com/tech-policy/news/2009/09/fcc-chairman-wants-network-neutrality-wired-and-wireless.ars
Last Updated on Saturday, 10 October 2009 23:22
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