michael meeropol

Michael Meeropol: Of Trump And The Bernie Vote

May 6, 2016

My wife, Annie, and I just spent a couple of weeks in Europe.  Virtually every European we met asked us incredulously, “are we looking at a President Trump?”This was particularly true in Great Britain which recently debated keeping him out of the country because he is a purveyor of hatred. Returning home we were confronted with headlines that suggested the possibility that Trump could pick up some Bernie Sanders supporters because both men are “anti-establishment” and oppose “bad” trade deals that cost American jobs.

Perhaps listeners have heard about the debate over an economist’s efforts to predict what would occur if Senator Bernie Sanders’ program were enacted.   An economist at the University of Massachusetts in Amherst, Gerald Friedman, took a look at Senator Sanders’ proposals --- increased spending for infrastructure, free college education at state universities, an expansion of social security, replacing the current crazy-quilt health insurance system with a “Medicare for all” single payer system for health insurance, and numerous expenditures to address the threat of climate change.   All of these expenditure increases would be funded by tax increases that would increase the over-all progressivity of the system, by, in Senator Sanders’ words making the billionaires pay their fair share of taxes.

Some of you listening to me might remember the Savings and Loan Crisis of the late 1980s.  Over 1000 Savings and Loan Associations (S & Ls) went bankrupt between 1986 and 1995 because they made high risk investments in a period (after 1980) when they were artificially valuing their assets at historical (original) values rather than at current values.   Mortgages issued in the low interest 1960s had, in the high interest 1970s, fallen in resale value.   Had these institutions been forced to write down the value of these mortgages, their liabilities would have exceeded their assets – they would have been forced into bankruptcy.   [For details of the causes of the problem see Meeropol, Surrender, How The Clinton Administration Completed the Reagan Revolution:  188-190].  

On January 2, a group of armed protesters walked into the Malheur National Wildlife Refuge near Burns Oregon and vowed to remain there until their concerns were addressed.   What initially triggered this “protest” was the re-sentencing of two ranchers who had initially served a few months in prison for arson – setting fires that spread to federal land.   The protesters felt new sentences (requiring both defendants to serve 5 years) were too harsh.  In a January 6 statement, they announced that in addition to freedom for the two men, they wanted the land currently owned by the federal government to be returned to the people. They wanted “loggers get back to logging, ranchers get back to ranching, miners get back to mining and farmers get back to farming.” [part of this quote is from a press conference January 6 reported at http://www.cbsnews.com/news/militia-occupation-leader-in-oregon-were-like-rosa-parks/.  

I am disgusted both by the rhetoric against Syrian refugees and the apparent support the rhetoric is garnering in polling data.  Listen to the following statements from some prominent politicians – some of whom want to be the next President of the United States.

Just three months ago, I commended the Papal Encyclical Laudato Si which focused on the need for humanity to unite in an effort to drastically cut back carbon emissions to mitigate climate change.  In this commentary, I want to focus on one of the Pope’s economic arguments.

Michael Meeropol: Upward Mobility On The Decline

Jun 5, 2015

Last month (May, 2015) I watched a video of a discussion about childhood poverty at Georgetown University featuring President Obama, the head of the American Enterprise Institute (Arthur Brooks), and Harvard  University Professor Robert Putnam. 

Where does Hillary Clinton stand on the various issues related to Social Security?    Does she agree with former President Bush that Social Security is going bankrupt or with former Texas Governor Rick Perry that it is a “Ponzi scheme”?   [I have commented on this issue before but just to re-iterate – a Ponzi scheme is a situation where a fraudster sells future profits of an organization that actually has no revenue stream other than the “income” from selling share to the next round of buyers.   In other words, I sell you something for $1000 and promise a 20% return.  The only way I get that money to you is to sell two other people something for $1000.  Now I have $2000 and I give you $1200 and keep the $800 for myself.   Then I have to find four people to sell “shares” for $1000 each, give, the two new people $2400 and keep the $1600 for myself.  It works until I run out of people to sell to or until someone figures out that there’s no way my organization is truly “earning” the money I claim.   Social Security is nothing like that.  It has a guaranteed revenue stream from the payroll tax.]

Michael Meeropol: Do We Really Want To Go To War With Iran

Apr 16, 2015

Let’s get real.  Do you want the US to go to war with Iran in a futile attempt to stop them from acquiring a nuclear weapon?   That’s what those who are trying to torpedo the deal that is being negotiated seem to want.   For most of the Republicans it appears that it is more important to damage President Obama than to avoid war.

When Hillary Clinton ran for President in 2008, she lost the nomination to Barack Obama because she had voted for the Iraq War and he had made a speech against it.   Should Secretary Clinton declare her candidacy for the Presidency, I am wondering if her vote in favor of the bank bailout in 2008 will come back to haunt her in a similar way.

Which Presidential candidate called for “high sustained economic growth where more people can have earned success?” and in what year?  No, it was not Bill Clinton in 1992.  No, it was not Barack Obama in 2012.  It was Jeb Bush in a sit-down with Sean Hannity during the CPAC conference.  (For details see http://reason.com/blog/2015/02/27/jeb-bush-defends-himself-on-common-core )

Today I want to talk about some of the tax changes proposed in the 2016 budget just submitted by President Obama.   It would be a great public service if we could get the predicted presidential candidates to respond to some of the specific elements of his proposals.   I wish that those interested in running for the Democratic nomination would be forced to explain which of these proposals she or he supports and which he or she doesn’t support and – most importantly – why?    The Republicans probably have it easier because they can just complain about how many billions (or trillions) of dollars of tax increases are in that proposal and leave it at that.  In fact that is just what they did when the budget was first released.  However, but even given the Republican mantra against any tax increases, it would be great to force them to get more specific about their objections.

Sometime soon, Hillary Clinton and Jeb Bush will declare whether or not they are running for President, as will a host of others. The campaigns will probably be dominated by personalities, opposition research, an endless series of debates, one gaffe or another, one catchy slogan or another and virtually nothing of useful substance.

Michael Meeropol: Here We Go Again

Dec 5, 2014

Nine years ago, the first commentary I presented identified two competing approaches to economics.  The first one was personified by then Fed Chair Alan Greenspan who is well known as a free-market true-believer.   In fact in his youth he was a philosophical follower of Ayn Rand.   The other person highlighted in that commentary was the late John Kenneth Galbraith.  Galbraith was a strong supporter of government action to fight unemployment and poverty.  He was also a strong believer in macro-economic demand management following the arguments of John Maynard Keynes.   In that first commentary, I made it appear as if Galbraith was for “big government” while Greenspan was for “small government.”

What can economics tell us about the Ebola problem?   First it can answer the question as to why there has never been a vaccine manufactured for human consumption, even though the virus was first isolated in 1976 and there have been a number of (small) outbreaks of the disease since.  Second, it can point ways to a policy action that can lead to the widespread availability of such a vaccine.

Back in 1993, the original proposal from the Clinton Administration on how to close the budget deficits that they had inherited upon taking office included a revenue raiser called a BTU tax --- a tax on the amount of energy (measured in British Thermal Units) contained within all fuels sold.

Michael Meeropol: A Dissent From The Rush (Back) Into War

Sep 15, 2014

On September 10, I watched President Obama justify sending the US air force (and Special Operations “trainers”) back into combat in Iraq and in the near future into Syria as well.  According to recent polls, over 70% of those asked favored air strikes in Iraq against ISIL – the so-called “Islamic State.”   This is not surprising, given the revulsion that many Americans feel towards that group.  As the President rightly pointed out, ISIL has engaged in massacres, ethnic cleansing, brutal public executions and more significantly, offers the people under its control nothing positive for their futures.  Nevertheless,  even though ISIL is a group of vicious murderers that does not in and of itself justify military intervention.

I assume many listeners have seen the television footage of the angry mobs in places such as Murrieta, California and other places holding up signs urging the government to send back the immigrant children who were being bused to processing centers. 

I recently read an OP-ED piece on line that really made me angry.  It focused on the coalition challenging the scientific community on the issue of global warming.  It was written by Meredith Tax and entitled “Climate change and false gods: Moloch and the bible-punchers in the US” (It was posted on April 14, 2014 on the opendemocracy.net website.)

Have you ever heard of the Employment Policies Institute?   It’s one of those so-called “research” organizations that are actually public relations fronts for some special interest groups.

I assume most of our listeners have heard of the columnist Charles Krauthammer.  Recently, he has been on a tear attempting to convince his readers that the Affordable Care Act is causing a reduction in employment.  He understands that it is no longer possible to get away with falsely asserting that the Congressional Budget Office prediction that the ACA will cause a decline in hours worked means an increase in involuntary unemployment.   Instead he argues that the voluntary decline in work because people are no longer tied to their jobs to get health insurance is somehow a terrible thing for the economy.

As I speak, approximately 1.3 million of the long-term unemployed have exhausted their benefits --- they now receive nothing to bolster their spending. To some, this is an outrageous betrayal of the fundamental decency that is at the core of the best of America’s moral traditions. To others, it is about time the unemployed stopped being subsidized in their idleness – cutting off benefits, so the argument goes, will make them try harder to find a job.

Have you ever heard of Wynne Godley?  Those who read the front page of the Business section of the NY Times on Wednesday, September 11, might have seen the picture and noted the name.  For others, he will be an unknown. 

Six years ago I noted in a commentary that there was a very simple solution to the foreclosure crisis that followed the bursting of the housing bubble.  The solution is to force any financial institution that foreclosed on a property to permit the current homeowners to stay in the house as renters with the rent fixed at a current market rate.  A version of this idea was introduced in Congress in 2010.

Today I want to talk about the Supreme Court’s recent decision eviscerating the Voting Rights Act of 1965.  

Members of my family live in New York’s 18th  Congressional District.  Previously, I have criticized the former representative from this district, Republican Nan Hayworth.  Today I want to strongly criticize the Democrat who beat her, Sean Patrick Maloney.  Recently, he voted in support of building the last section of the Keystone Pipeline – a terrible vote in my opinion.

Back in 1990, a Congressman from South Carolina (Stephen Neal) introduced a bill that would require the Fed (our Central Bank) to make a zero rate of inflation its primary goal.  I was able to publish my response in the economic journal Challenge under the title, “Zero Inflation: prescription for recession.” (Challenge 1990) At the time I noted that Fed Chairman Alan Greenspan had expressed support for that goal.  What I did not know was that later in the decade, Chairman Greenspan would attempt to persuade the entire Federal Reserve Board of his view.  IN 1996, he engaged in a spirited Debate with Economist Janet Yellen, then a member of the Fed Board of Governers.

By all rights, President Barack Obama should have been beaten handily by Mitt Romney.  Usually, an incumbent President wins if the economy is doing well --- think of 1996 when Bill Clinton was re-elected, think of 1972 when Richard Nixon was re-elected.   If the economy is not doing well, an incumbent President loses:  Think of Jimmy Carter in 1980 and George H, W. Bush in 1992.  There are “close calls” in this analysis – the two that come to mind are the successful re-election campaigns of Ronald Reagan in 1984 (which resulted in a landslide victory) and George W.

My wife, Ann and I have fond memories of the time we lived in Wisconsin.  I got my Ph D from the University of Wisconsin in Madison.  Ann, taught in the public schools and our son was born in Milwaukee.  We have always had a great deal of respect for the great progressive traditions of the State of Wisconsin.

Thus, when Governor Scott Walker introduced a budget bill into the State Legislature that would not merely cut pensions of government workers but strip them of all collective bargaining rights, I was heartened by the outpouring of opposition within the state.

On April 17, the front page of the New York Times had an article about two economists.   No, it was not about Ben Bernanke and Alan Greenspan who are very well known.

Instead, the two economists are academics – academics who are not household names.

These two economists, Thomas Piketty and Emanuel Saez, have done path-breaking research to document the incredible increase in inequality that has occurred in the US since about 1980.