Economic Union Lessons from the U.S. to Europe

This is an awesome summary of the economic history of the United States economic union by Jeffry Frieden published by Bruegel.

Frieden argues that the U.S. economic union (including monetary, fiscal, and banking union) was not truly created until the 1930s. The early history of the union was marked by tensions between established financial centers and stable economic regions (which preferred tighter credit and fiscal conservatism) and frontier/developing regions (which preferred loose credit and significant spending on infrastructure and development). These conflicts boiled down to a somewhat universal tension between creditors and debtors.

There are some great historical insights:

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Pres. Bill Clinton Argues with 24-Year Old Bernie Supporter (see education spending graphs)

Apparently today in New Mexico, former President Clinton got in a 30-minute-long argument with a 24-year old New School graduate, per Buzzfeed News.

While hilarious and awesome that he spent so much time talking to this guy, I wanted to shed light on the one factual claim on which Clinton and Josh Brody sharply disagreed.

He told Clinton that his administration had drawn down investments in “basically every agency, naming the Department of Education in particular.

“I doubled education,” Clinton said.

“If you go from the beginning to the end of your team, each of these departments have shrunk,” Brody said.

“That’s just wrong. I doubled education,” Clinton said. (Reached by email later on Wednesday, a spokesman said Clinton had been referring to federal spending and dollars allocated to college aid.)

“You have cherry-picked facts, which contradict the truth.”

Sounds awkward.

I went to the Department of Education Budget History Tables to see who was right (I’m not sure why Buzzfeed News didn’t do this). GRAPHS BELOW!!

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“Red Vienna” & Urban Economic History

In reading a bit more about Karl Polanyi, Prof. Iber pointed out the influence of living in ‘Red Vienna’ on Polanyi. I didn’t know much about this part of the interwar period, but apparently from 1919-1934 the city council of Vienna was dominated by Democratic Socialists. They implemented a quasi-socialist program, but were hindered and eventually defeated violently by the Christian Social Party-led national government, which was a conservative-cum-fascist party.

Reading about Red Vienna, I was struck by the largest plank of their platform: a massive housing project in a city with a massive shortage of housing and construction. Sounds like a certain city where I currently live.

Anyway I found this a fascinating historical moment and wanted to share a bit. Here is an excerpt from Jill Lewis in the European Studies Review (1983): Continue reading

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Rise of Polanyi Dems

I loved this piece by Patrick Iber and Mike Konczal at Dissent Mag.

Karl Polanyi is one of my favorite political economist/philosophers.

READ IT!!!!!

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WSJ Econ Forecaster Panel Likes Establishment/Conservative Candidates

[Preface: I wrote down these thoughts a while ago when they were more relevant to the primary election, but figured they might still be worth posting. Maybe in future, I’ll write a bit more about Trump vs. Clinton on economic policy, though the tough thing about policy is that with many candidates it’s impossible to know (1) what policies they would enact in a perfect (fantasy) world where they could do whatever they wanted; and (2) what policies they could actually get passed in our flawed, sometimes insane reality.]

The WSJ polled it’s panel of economic forecasters (March 10, 2016) on how particular Presidential candidates affect their economic outlook for 2017. They found, I would say somewhat unsurprisingly, that the most ‘establishment’/’centrist’ candidates would have no effect or a positive effect on their outlook.

I complained about this on Twitter to the reporter who wrote the article, and I wanted to elaborate here on how I think this poll and article should be interpreted (my even-more-pithy alternate headline would be “Economic Forecasters Favor Upward Redistribution of Income”).

I think there are 3 potential explanations for how the forecasters responded to this survey:

  1. Economic forecasters are basing their answers on sober and detailed policy analysis based on each candidates platform and policy proposals.
  2. Economic forecasters are basing their answers on (somewhat amateurish, but generally understandable) political analysis for what they think will happen if each candidate actually gets elected.
  3. A significant number of these economic forecasters are basing their answers on ideological/political preferences.

Most of my discussion will be about Senator Bernie Sanders because I’ve spent more time thinking about and discussing his economic policy proposals. I’ll include some compare and contrast with the other candidates, sticking mostly to broad strokes about their positions. Hopefully, this ends up being interesting/provocative.

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Some somewhat evidence-oriented thoughts on #BernieOrBust (Kevin Drum Addendum)

[I added a section at the end about a provocative Kevin Drum blog post, if it were its own post, I would have titled it “Is Kevin Drum Conning Us Youths?”]

Will try to be succinct. I wanted to write up at greater length my thoughts on this article about #BernieOrBust. There are some tangential points, like the bizarre claim that Sanders supporters are dominated by white males… even though young women are actually more likely to vote for Sanders than young men, meaning that the difference in support is almost entirely about age, not gender or race (Matt Bruenig has addressed these tendentious arguments over and over again). Here we go: Continue reading

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How-to: Breaking up big banks with Bernie

A bunch of pundits and political commentators have written and talked about this Bernie Sanders interview with NY Daily News. They, apparently, read the transcript and freaked out because they say he doesn’t seem to think deeply or know anything about income inequality and breaking up big banks, his signature issues!

Not so, says Mike Konczal, a Fellow at the Roosevelt Institute whose expertise is in finance and financial reform,

Bernie Sanders gave some fairly normal answers on financial reform to the New York Daily News editorial board. Someone sent it to me, and as I read it I thought “yes, these are answers I’d expect for how Sanders approaches financial reform.”

You wouldn’t know that from the coverage of it, which has argued that the answers were an embarrassing failure. Caitlin Cruz at TPM argues that Sanders “struggles to explain how he would break up the banks” and that’s relatively kind. Chris Cillizza says it was “pretty close to a disaster” and David Graham says the answers on his core financial focus is “tentative, unprepared, or unaware.” Tina Nguyen at Vanity Fair writes that Sanders “admits he isn’t sure how to break up the big banks.”

This is not correct. Sanders has a clear path on how he wants to break up the banks which he described. Breaking up the banks doesn’t require, or even benefit from, describing the specifics on how the banks would end up, neither for his plans or the baby steps Dodd-Frank has already taken.

Generally, I believe Sanders would benefit from taking the important points Clinton has made in expanding how to tackle the financial sector as a whole. But bad arguments are bad arguments, and the arguments against Sanders here are bad.

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