michael meeropol

Much of the discussion of the Trump Administration’s proposed budget has focused on the extremity of the cuts to the civilian side of the discretionary budget.   By some calculations, if the budget were adopted, the discretionary budget would be cut almost in half, making the Federal Government almost completely unable to function.  

Michael Meeropol: Wag The Dog

May 5, 2017

WAMC listeners in the mid-Hudson Valley are probably acquainted with the free monthly lifestyle magazine Chronogram.   Available from Northern Westchester to Columbia County as well as Orange to Ulster counties, it provides a window into a variety of local activities from music to business to education.   It also is the home of some biting political commentary by the novelist/journalist and Woodstock resident Larry Beinhart.

Have you ever heard of an economist named Arthur Laffer? Back in the 1970s he created a story about the effect of income tax rates on high income people. Because the rates were allegedly too high, incentives had been damaged and the wealthy were refraining from saving and investing. This caused the economy to grow slower. Laffer convinced Congressman Jack Kemp that permanent dramatic income tax cuts would create such a big improvement in incentives that the resulting increase in economic activity would raise the tax base so much that even with lower rates, revenues would actually rise. (The principle is the same as with a sale – the discounted price is more than made up with an increased volume of purchase. In the case of a tax cut stimulating activity, say a 10% cut in tax rates produces income increases of 20% (raising the amount subject to the tax) --- revenues actually go up.)

Michael Meeropol: A Proposal To Retrain Coal Miners

Apr 7, 2017

There are approximately 65,000 coal miners working today in the United States.  (Adding employment in coal fired electrical plants brings the number connected to coal to about 150,000.)   In 1985, the number of coal miners was 173,700.   By 2003 it had fallen to 70,000.   Donald Trump and Republicans have made a big deal about President Obama’s so-called “war on coal” and that propaganda had been very effective.   Republicans carried West Virginia and Kentucky against President Obama, and Donald Trump won Pennsylvania as well.  He parlayed his cynically false promise to bring back coal jobs into big electoral majorities in coal country --- carrying West Virginia for example with 69% of the vote.   And yes, coal mining jobs were at 65,400 in 2015 indicating that the downward trend in coal employment had continued under President Obama, though the major declines were much more precipitous before 2008.  (These numbers are available from the Federal Reserve Bank of St. Louis).   Coal production on the other hand rose steeply from the late 1960s to 2008 reflecting increased productivity as strip-mining began to replace deep-shaft mining and equipment made the old pick and shovel image of a coal miner completely obsolete.   Total production was 1.172 million short tons in 2008 falling to less than 900,000 in 2015.  (The numbers are available from the U.S. Department of Labor, Mine Safety and Health Administration, Form 7000-2, “Quarterly Mine Employment and Coal Production Report”).    Though the fall has been blamed on the “war on coal” in fact it is the result of cheap natural gas as a result of fracking.   The only way to bring back coal jobs is to impose onerous taxation on natural gas so that utilities will cease switching over.   Imagine how well that would play with natural gas companies.

Michael Meeropol: What A Decent Society Looks Like

Mar 24, 2017

[Between the time this was taped for delivery on March 24 and the writing of this longer version, the Republicans pulled their bill repealing and replacing the Affordable Care Act.   The principles enunciated here and the argument that seniors who receive Medicare are receiving the same kind of social insurance subsidies from current taxpayers as are Medicaid recipients remain very important.   It is also important that people who struggled to protect the Affordable Care Act from being replaced by Trumpcare remain vigilant.  The promise by the Trump Administration that the will do everything in their power to destroy the effectiveness of the Affordable Care Act should be taken very seriously.] 

What is the difference between Medicaid and Medicare?    The major difference is that Medicare is an earned entitlement while Medicaid is a means-tested entitlement.  Working ten years and paying payroll taxes qualify you for Medicare’s hospitalization insurance without having to pay out of pocket premiums.   Paying those payroll taxes also entitles seniors to enroll in Medicare Part B which covers physicians’ services and Part D which is the prescription drug plan.   These programs are yours regardless of your income, so long as you have paid the payroll tax during ten years of your working career.  Billionaires get free hospitalization and access to Medicare Parts B and D along with the rest of us, just by virtue of having paid the payroll tax.  Because of this fact, people who receive Medicare (and this applies to Social Security pensions as well) believe they have “paid for it” with their taxes and are not, therefore, receiving “welfare.”

On January 31, there were two articles about Donald Trump that had him saying two diametrically opposed things. The topic was whether or not Medicare should be able to negotiate the price of drugs bought for the Part D insurance program. Under the 2003 law which set up Medicare Part D, Medicare is explicitly barred from negotiating drug prices with their suppliers. The Veterans Administration, by contrast, is permitted to do so and saves about 40% compared to Medicare, Part D. For details see “What if Medicare’s drug benefit were more like the VA’s” at http://theincidentaleconomist.com/wordpress/what-if-medicares-drug-benefit-was-more-like-the-vas/

Michael Meeropol: Showing Up

Feb 3, 2017

Many members of my extended family participated in demonstrations on Saturday, January 21 pledging resistance to the far right agenda of the Republican Congress and their leader, Donald Trump.  We marched in solidarity with women disgusted by the thought of a sexist, sexual predator in the White House.

Julius and Ethel Rosenberg
wikipedia.org

Michael Meeropol is professor emeritus of Economics at Western New England University, and the co-author of Principles of Macroeconomics: Activist vs. Austerity Policies. He is also a long-time WAMC commentator. But the topic that brings Mike back to WAMC's studios today is his late parents: Ethel and Julius Rosenberg. Here in the waning days of the Obama administration, Mike Meeropol and his brother are working to exonerate their mother.

November 8 was a shock. I believed that Trump’s misogyny, racism, xenophobia, Islamophobia and basic dishonesty would lead to a rejection by a large majority. I have come to agree with Greg Palast and others that years of Republican strategies to suppress the votes of members of the Obama coalition paid off in some key states. Palast persuasively argues that the election was actually stolen. For details see: http://www.gregpalast.com/election-stolen-heres/

Have you ever heard of the economist Steve Keen?   In 2010 he received the largest number of first place votes for the “Revere Award in Economics.”   This award was created to identify the three economists whose writings most strongly warned of and anticipated the financial meltdown of 2008.  Listeners may recall that I have repeatedly referred to the work of Dean Baker who as early as 2002 wrote that the rise in housing prices had all the characteristics of an unsustainable bubble.  It turns out that Steve Keen had done similar writings and in fact “beat out” Baker for first place in the Revere Award.   (Baker garnered 3rd place, the financial expert Nouriel Roubini took 2nd).

On October 30, the National Geographic Channel will broadcast the first episode of the second season of a series entitled Years of Living Dangerously.  The series explores the dangers of global warming and associated climate change.   The first episode, A Race Against Time, focuses two compelling stories:  the promise of solar energy in India and the political obstacles to wider use of solar energy in the U. S.

President Barack Obama told world leaders at the United Nations today that the global economy needs to work better for all people, not just those at the top. The two major party presidential candidates have had plenty to say about the economy. Jobs, taxes and the future of Social Security will likely loom large as election day nears. 

There is disgusting theme being bruited about from the Trump campaign that blames the   difficulties of low income African Americans in numerous inner-city neighborhoods on the Democratic Party.   Now I am no Democrat --- and I have not been averse to criticizing the policies of the Obama and (Bill) Clinton Administrations.  However, the idea that poverty among African Americans and crime in African American neighborhoods is the fault of the Democratic Party, just because the Mayors of many of the cities where these concentrated populations of people of color in poverty are Democrats is totally false.   Most of these cities have been starved for funds by State Legislatures and federal programs that would have reduced the economic hardships for these communities, the Medicaid expansion under the Affordable Care Act, raising the minimum wage, rebuilding our nation’s infrastructure have been blocked by Republican governors and Congress.

I began doing these commentaries in 2005.   In 2006, after the Democrats took control of Congress, I delivered a commentary noting that a battle for the soul of the Democratic Party was brewing.   On the one hand there were a set of policies proposed and adopted by the “triangulator” Bill Clinton.   (Triangulation referred to his ability to oppose most of his own party and the Republicans at the same time – first playing one then the other against his two adversaries.)   These policies included NAFTA, which would not have passed without Republican support.   They included so-called welfare reform, which Senator Daniel Moynihan correctly identified as abolition and not reform.   During Clinton’s eight years there was no improvement in opportunities for workers to join unions.  There was however, ridiculous focus on budget balance and what turned out to be disastrous financial deregulation?   Despite record job growth and for a few years very low rates of unemployment, inequality actually increased during the entire 8 year period.

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.

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