Author Archives: emilykawano

Econ-Atrocity: The 800-Pound Ronald McDonald in the Room

By Helen Scharber, CPE Staff Economist

When your child’s doctor gives you advice, you’re probably inclined to take it. And if 60,000 doctors gave you advice, ignoring it would be even more difficult to justify. Last month, the American Academy of Pediatrics (AAP) issued a policy statement advising us to limit advertising to children, citing its adverse effects on health. Yes, banning toy commercials might result in fewer headaches for parents (“Please, please, pleeeeeeease, can I have this new video game I just saw 10 commercials for????”), but the AAP is more concerned with other health issues, such as childhood obesity. Advertising in general — and to children specifically — has reached astonishingly high levels, and as a country, we’d be wise to take the doctors’ orders.

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Econ-Atrocity: The High Cost of the Holidays

By Helen Scharber, CPE Staff Economist
Dec. 20, 2006

Ahh, the holidays. So full of joy, laughter, good cheer”¦ and contradictions. The holidays are all about spending time with loved ones. Or are they all about finding the perfect gift? They are a time of relaxation and spirituality. Or perhaps a time of stress and consumerism? According to a 2005 poll by the Center for a New American Dream, more than three in four Americans (78%) wished that holidays were less materialistic, yet shoppers around the country planned to spend an average of $907 on gifts this holiday season. Sixty percent of people polled anticipated spending less this year than last, but according to the National Retail Federation, holiday retail sales were forecasted to rise five percent to $457.4 billion. As Howard Dvorkin, founder of Consolidated Credit Counseling Services, Inc. (CCCS), observes, “It seems that consumers are trying to be more conservative with spending this year over last, but many of the best laid plans fall through when the pressures of advertisers and unrealistic holiday expectations hit a fever pitch of season overload.” The fast pace and high cost of the holidays can seem to be out of our control, but there are a number of good reasons to take the reindeer by the antlers and reign in holiday consumption.
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Econ-Atrocity: Can enlightened capitalism save health care?

By Gerald Friedman, CPE Staff Economist
Dec. 1, 2006

A recent article in the New York Times (October 25, 2006) entitled “Hospitals Try Free Basic Care for Uninsured” raises an intriguing possibility. The Times reports how some local governments and hospitals have found that by providing primary care, supportive services, and preventive care for the uninsured they can save money by avoiding higher costs when conditions worsen down the road. Following the experience of a diabetic patient at Seton, a Roman Catholic hospital network in Texas, the Times shows how preventive care reduced “costs for the hospital” by helping the woman avoid expensive emergency room visits. By improving her health, preventive care cut her medical bills nearly in half. “The money we save,” Dr. Melissa Smith, medical director of three Seton clinics, “money that is not hemorrhaging through the I.C.U., is money we can do so much more with to help her upfront.”

We could all hope that there will be enlightened insurers who will respond to these stories. The Times is certainly hoping to promote a free-market win-win where the poor will receive care that will help them stay healthy, and health insurers and providers will increase their profits by reducing total expenditures. But this worthy goal misses the fundamental flaw of for-profit health insurance: Capitalist businesses, including America’s health insurers, are not eleemosynary institutions. They do not set out to produce useful things. Instead, they seek to create profits; any social value or use is purely coincidental. In the specific case here, our capitalist health care industry is organized to produce profits; any quality health care that it provides is a desirable, but secondary, product.
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Some thoughts on 2006

The 2006 Election(s)
By John J. Fitzgerald

The 2006 Election cycle has come and gone. Just like the 2006 Hurricane season it has not performed exactly as predicted, but it has left some changes in its wake. We might actually have experienced several different elections rather than just one. A lot of decision-making got formalized on the 7th of November.

Here are some of the highlights:
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Econ-Atrocity: Will it matter if the Democrats win?

By Gerald Friedman, CPE Staff Economist

As I write this, it appears likely that after 12 years in the wilderness, the Democrats will capture a majority in the House of Representatives and will make substantial gains in the Senate. (My favorite objective source, http://www.electoral-vote.com/, gives the Democrats a 225-208 lead in the House and a gain of 4 Senate seats to move to 49-51 in the upper body.) After 6 years of almost uninterrupted one-party rule, and the worst government this country has endured since the 1850s, we can only rejoice at Democratic gains as, if nothing else, a sign of a return to sanity after the trauma of September 11, 2001. But, beyond this, what can we expect from the Democrats? Can we anticipate a reversal of Bushism, and a renewed push for social progress?
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Congress Fails to Investigate or Punish War Profiteering

The following post is the text of a radio commentary I (Mike Meeropol) delivered over WAMC radio in early October.

Did you know that the US Congress has rejected efforts to punish, investigate and criminalize war profiteering?

Yes, that’s right. This past February, the House on a mostly party-line vote rejected an effort to forbid expenditures from going to any contractor, “”¦if the Defense contractor audit agency has determined that more than $100,000.000 of the contractor’s costs involving work in Iraq “¦ were unreasonable.”[1]

Meanwhile, the Senate on an equally party-line vote, rejected an amendment to an appropriation bill “to prohibit profiteering and fraud relating to military action, relief and reconstruction”¦”[2]

What’s going on here?
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Angry response to Kerry Healey’s exploitation of racism in her attack ads on Deval Patrick

Dear Readers — the following is an email message I sent to all fellow faculty at Western New England College where I teach. I am including it here based on an invitation I received to share it with all readers of this Blog. I am reproducing it here without editing.

Mike Meeropol (econ Prof, Western New England College, Springfield, MA)

I am writing this e-mail because I am thoroughly disgusted with the effort to “Willie Horton” the candidacy of Deval Patrick for Governor of Massachusetts. I hope some of you inclined not to read this will force yourself to do so “¦ Even people who were not inclined to support Mr. Patrick for Governor should respond to the vicious advertising campaign.
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How to vote early and often — legally!

My Recommendations for Election 2006
By John J. Fitzgerald

One of the most patriotic things that anyone, who loves this country, can do in the next few weeks has to be focused on voting. (I know that voting is not the only road for activists, but it does have some value.)

I would like to make a few recommendations to enlarge the effect of voting in 2006.
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Econ-Utopia: Celebrating TINA’s Demise

by Emily Kawano, CPE staff economist

TINA is dead ““ let us rejoice. In the early 1980s British Prime Minister Margaret Thatcher famously declared, “There Is No Alternative” meaning that there is no alternative to capitalism. In the following years it certainly seemed that the capitalist juggernaut was on a roll. By the 1990s, Communism in the Soviet bloc had fallen and neo-liberalism, a particularly pro-corporate and anti-government brand of capitalism, had been enthroned throughout most of the world, enforced by the International Monetary Fund (IMF), the World Bank and the World Trade Organization. TINA ruled, unchallenged by clear evidence that a viable alternative existed.

And yet, the steady encroachment of neo-liberalism, accompanied by growing inequality and immiseration for many throughout the world, may have seeded TINA’s demise. The critique of neo-liberalism has been well honed by the ever-growing global justice movement that has focused a spotlight on the failure of the neo-liberal model in terms of growth, equity and sustainability. In Brazil, Venezuela, Chile, Argentina, Uruguay and Bolivia left-leaning governments have been swept to power under the banner of anti-neo-liberalism. The World Social Forum, the largest and most significant gathering of social movements in the world, is united by an opposition to neo-liberalism and a belief that “˜Another World is Possible.’

At the same time, many people and communities, moved by desperation, practicality, values, or vision, have become involved in concrete economic alternatives. A sample includes:

“¢ Cooperatives, which are businesses that are owned and run by the workers, consumers or members, are seeing new life. According to the International Cooperative Alliance, co-operatives provide over 100 million jobs around the world– 20% more than multinational enterprises.
“¢ Co-housing promotes a sense of community involvement and responsibility. Housing is private, but there are communal spaces and buildings, including for example, a common dining area, kitchen, childcare space, meeting rooms, and recreation space. Real estate speculation on the housing is prohibited and land is held in common.
“¢ Local currency, in which people and businesses use locally printed money, aims to stimulate and support the local economy by keeping money circulating in the local economy rather than “˜leaking’ outside.
“¢ Community supported agriculture supports local farmers by creating dependable demand for their produce. People pay for a seasonal or yearly subscription, which entitles them to a share of whatever is produced. In the U.S., 25,000 people participate in more than 500 CSA projects across the country, while in Japan, where it has been around since the 1960s, 5,000,000 families participate in CSA.
“¢ Participatory budgeting serves to democratize the process of governmental budgeting by giving local residents an official say in where public money should go. The most prominent example of Participatory Budgeting has been in Porto Alegre, Brazil where communities have been involved in city budgeting since 1989. The model has spread to cities in Canada, India, Ireland, Uganda and South Africa.
“¢ The squatters movement works to take over abandoned or unused land or structures and then secure permanent rights to the property; improve the quality of housing, sanitation, and access to clean water; and empower the poor to come up with their own solutions. Given that nearly half the population of cities in Asia, Africa and Latin America are squatters living in illegal settlements, the challenge and need for this work is very great.

Do these examples offer a serious challenge to neo-liberal capitalism? The potential is there, but particularly in the U.S., this potential will remain unrealized unless there is greater coherency among the various strands and a connection with the larger social movements. Otherwise these practices run the risk of remaining worthy but isolated endeavors, struggling for their individual survival, and cloaked in invisibility.

Shedding the cloak of invisibility is an important step in the development of greater coherency as well as legitimizing the importance of economic alternatives. For example, the European Union (EU) has officially recognized the social economy which includes significant segments of the alternative economy such as:

“¢ Cooperatives: housing, credit unions, coop banks, producer & consumer coops.
“¢ Social enterprises: businesses that put social aims at the core of their operation. There are many forms of social enterprises, including: enterprises that seek to create employment for marginalized populations such as people with disabilities, or community businesses that contribute a percentage of profits to a community fund and include community members on the board.
“¢ Mutuals: non-profits that exist for the benefit of their members, providing services such as insurance, mortgage and savings plans.

The EU has recognized the value and importance of the social economy both as a significant sector of the economy as well as its role in fulfilling social needs. EU governments are required to earmark a percentage of their budgets to promote the social economy.

Ultimately, it will take this kind of policy, financial and institutional support to develop the many inspiring economic alternatives into a viable economic system grounded in economic justice and sustainability. TINA is dead. The task now is to realize the transformative potential of the many alternatives that are already a reality.

Sources:
– International Cooperative Alliance, Statistics, http://www.coop.org/coop/statistics.html
– Co-housing, http://www.cohousing.org/default.aspx
– “The Potential of Local Currency,” Susan Meeker-Lowry, Z Magazine, July/Aug 1995, http://www.zmag.org/ZMag/articles/july95lowry.htm
– Community Supported Agriculture, http://www.nal.usda.gov/afsic/csa/
– Participatory budgeting resources, http://www.participatorybudgeting.org/resources.htm
– Squatters movement, http://www.sdinet.org/home.htm
– EU Social Economy, http://ec.europa.eu/enterprise/entrepreneurship/coop/index.htm

© 2006 Center for Popular Economics
Econ-Atrocities are the work of their authors and reflect their author’s opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.

Econ-Utopia: Environmental Tax Shifting

By Jonathan Teller-Elsberg, CPE Staff Economist

In the U.S., talk of tax reform usually means debates about taxes on income and wealth. A little less common are discussions of flat taxes and a shift from payroll, income, investment, or property taxes to consumption taxes—that is, a federal sales tax.

We’ve seen the miserable results of lowering taxes on the rich, and we’ll be dealing with the massive government debts for decades to come. Flat taxes are simply another way to lower taxes on the rich, under the guise of simplifying the tax system. (To be sure, simplifying taxes is not exactly something to dismiss out of hand—the system is far more intimidating than it should be.) The supposed advantage of a shift to consumption taxes is that the shift away from payroll and/or other taxes should lead to more jobs. This is because a payroll tax makes it “expensive” for a business to have an employee. If the payroll tax is reduced or eliminated, the business will have more money available to hire additional workers. The problem with consumption taxes is that they tend to be regressive—meaning that they fall hardest on lower-income members of society.

Another type of tax reform that deserves more attention is the environmental tax shift (ETS), also known as the green or ecological tax shift. The idea here is to increase taxes on activities that result in environmental damage and use the money generated to reduce other taxes by the same amount. As with the consumption tax idea, most proposals center around reducing payroll taxes.
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