- Emmanuel Saez and Gabriel Zucman look into the spread of wealth inequality in the U.S., and find that it may be worse than we already knew. And Paul Krugman discusses how toxic anti-government ideology is preventing the U.S. from both getting its economy on track in the short term, and investing in infrastructure it will need down the road:
More than seven years have passed since the housing bubble burst, and ever since, America has been awash in savings — or more accurately, desired savings — with nowhere to go. Borrowing to buy homes has recovered a bit, but remains low. Corporations are earning huge profits, but are reluctant to invest in the face of weak consumer demand, so they’re accumulating cash or buying back their own stock. Banks are holding almost $2.7 trillion in excess reserves — funds they could lend out, but choose instead to leave idle.- Meanwhile, PressProgress highlights the Bank of Canada's alarming findings about the decay of Canada's manufacturing sector. And Hadrian Mertins-Kirkwood finds that big oil's massive profits aren't producing anywhere near enough jobs to pick up the slack.
And the mismatch between desired saving and the willingness to invest has kept the economy depressed. Remember, your spending is my income and my spending is your income, so if everyone tries to spend less at the same time, everyone’s income falls.
There’s an obvious policy response to this situation: public investment. We have huge infrastructure needs, especially in water and transportation, and the federal government can borrow incredibly cheaply — in fact, interest rates on inflation-protected bonds have been negative much of the time (they’re currently just 0.4 percent). So borrowing to build roads, repair sewers and more seems like a no-brainer.
(T)he result...is that America has turned its back on its own history. We need public investment; at a time of very low interest rates, we could easily afford it. But build we won’t.
- Planet Experts reports on the UN's latest report which concludes that climate change is causing irreversible damage to our planet. But presumably the oil industry will simply pretend that inconvenient facts don't exist - as it typically does when people out the other ill environmental effects of resource exploitation.
- Colin Macleod weighs in on the ongoing child care debate with a strong case for a universal program rather than selective incentives and subsidies:
First, means testing, if it is to be fair and reasonably accurate, requires the creation of elaborate and expensive bureaucratic procedures through which eligible recipients can be distinguished from ineligible recipients. In practice, such systems are highly inefficient and frequently fail to correctly those who deserve assistance from those who do not. It is simpler and more efficient to provide the opportunity for cheap daycare available to all on an equal basis.- Finally, Elizabeth Renzetti argues that we should take a hard line against fearmongering in light of last week's shootings in Ottawa, while Eric Wright criticizes Stephen Harper for instead looking to foment unjustified conflict.
Second, means-testing draws invidious distinctions between citizens that jeopardize the social conditions of self-respect. In a society in which the default assumption is that citizens should bear the full cost of daycare costs, demonstrating that someone merits a subsidy often requires them to make ‘shameful revelations’. The fat cats do not have to worry about that. They are not in a position of being scrutinized by a government bureaucrat in order to determine whether they are worthy recipients of something to which all parents should have ready access to: good childcare.
I suspect that most of the people who are enthusiastic about means testing are those who are never likely to be subject to it. The rich might feel differently about means testing if say their health care cards were revoked upon determination that their income fell within the top 15% of earners and that in order to gain access to publicly provided health care they would have to complete a series of confusing forms and meet with an entitlements officer who would ask probing questions about whether they really needed to access the public system. It’s ironic that many right-wingers who are generally suspicious of the state think it’s ok to subject some citizens – usually the poor – to invasive inquiries of this sort by state officials.
Instead of treating access to affordable daycare as something that distinguishes the poor from the rich, we should treat it as an opportunity to which all have access in virtue of our common and equal citizenship. On this model, the appropriate way to ensure that the costs of providing the common good of access to daycare are fairly shared is through the background tax system. Those who worry about the regressive potential of daycare tend to neglect the overall malleability of the tax system. A properly structured arrangement for funding daycare through the tax system need not confer net benefits on the rich of the sort critics worry about. If the system for funding is made suitably fair then the concern that the rich are unfairly benefiting from a subsidy is adequately answered. Universality need not be regressive and we can have progressivity without means testing.