Charles Tilly, 1929-2008
Professor Charles Tilly, a renowned social scientist, innovative theorist, and prolific author, passed away on April 29.In addition to the NY Times obituary, and a statement from the president of Columbia University, here's a very perceptive personal remembrance from a former student and colleague -- just one of many people who remember him fondly.
Dollars & Sense extends our sympathies to his family, including his son Chris, who is a longtime member of the D&S family.
Labels: social scientist, social theory, Tilly
If You Liked Bear Stearns, You'll Love Fannie Mae/Freddie Mac
The New York Times reported today that the two mega government-sponsored mortgage lenders, who have single-handedly kept the US mortgage market from sinking through the quicksand altogether since private mortgage finance dried up in the wake of the subprime crisis (they account for no less than 80% of mortgages bought by investors in the first quarter of 2008), may themselves require enormous taxpayer-financed bailouts if properties they hold continue to decline in value. Fannie and Freddie, who use their unspoken government guarantee to clinch cheap financing (which they do, to a degree, pass on to consumers), buy mortgages from banks and keep some of them on their books, while securitizing and selling the rest off (retaining the liability for repayment if consumers default). For example, Fannie Mae sits on an enormous pile of debt and outstanding loans (nearly $3 trillion), while investments, retained earnings and equity (or "core capital") chalks up at only about %800 billion, while Freddie has about $2 trillion in liabilities and $750 billion in assets. If these some of these loans follow the prevailing trend and continue dropping in value, it is clear that Fannie and Freddie could find themselves facing a serious shortage of capital, especially since they've been doing all in their power to avoid ramping up capital, in order to concentrate on paying off shareholders. Shareholders, remember, were put off by a series of scandals at the agencies, and Fannie and Freddie have been using Congress' desperation to keep the mortgage markets open to extract better terms from Congress (for one thing, Congress increased the cap on mortgages they can buy to $730,000 from $417,000); and now, Fannie and Freddie want Congress to repeal the verylaws Congress made in the wake of the scandals.
On top of this, it appears as if the agencies aren't accounting for their losses in conventional ways (i.e. "unrealized" losses don't affect earnings), and that, even worse, according to The Times, that they are betting that the housing market will rebound by 2010. If the crunch lasts longer, say analysts who spoke with the paper, "unexpected" losses could overwhelm reserves.
Well, Fannie reported its third straight quarterly loss today, and Freddie reports next week. Meanwhile, the headlines are full of sentiments like "Is the Housing Tsunami Receding?"
Join the Call To Promote Open Economic Debate at Notre Dame
A group of students at Notre Dame are campaigning to broaden the ideological scope of the economics department there. According to their open letterAt Notre Dame, economics is divided into two separate departments: “The Department of Economics and Econometrics, which is a neoclassical economics department committed to rigorous theoretical and quantitative analysis in teaching and research,” and The Department of Economics and Policy studies, which is committed to “issues relating to socioeconomic justice and ethics,” “openness to alternative methodological approaches,” and the “roles of history and institutions” in the “broader political economy.” It is our fear that, in pursuit of higher department rankings, Notre Dame will sacrifice the latter department in favor of the former.
In other words, we oppose a situation in which neoclassical economic theory is taught to the exclusion of other theories. This tendency is already apparent in the one-sidedness of economics majors at our University. The required courses – introductory/intermediate microeconomics and macroeconomics, statistics, and econometrics – are all typically taught using only mainstream theory. It is alarming that a student could easily graduate from Notre Dame with a degree in Economics, having never questioned the basic assumptions of or been presented with plausible alternatives to neoclassical economics.
You can read the full letter and sign the petition here.
Dollars & Sense covered a similar struggle by undergrads at Harvard a few years ago. Look here for a list of progressive economics teaching resources. And please check out all of D&S's fantastic economics textbooks and readers.
Labels: classroom resources, economics debates, heterodox economics
Dockworkers of the World Unite!
In a potent reminder of what organized labor can do, thousands of dockworkers along all 29 West Coast ports took the day off in a coordinated action to protest the U.S. war in Iraq.“We are supporting the troops and telling politicians in Washington that it’s time to end the war in Iraq,” said union President Bob McEllrath.
See the full story here.
Labels: dock workers, iraq war, labor, labor organizing, strike
CEOs of America Unite!
Kiwitobes has put together an interesting visual representation of overlapping membership on corporate boards among the largest U.S. corporations. This helps provide one explanation for the astronomical sums paid to CEOs and their lackeys (we get to talk like this on May Day). But as economist Arthur MacEwan explained in our magazine a few years back, the gap in pay between those who own the corporations and those who do the work is much greater in the United States than it is in many other countries that similarly have interlocking corporate boards. The rest of the answer, he concludes, has to do with the relative lack of power of U.S. workers.Over many decades, U.S. companies have created a highly unequal corporate structure that relies heavily on management control while limiting workers' authority. Large numbers of bureaucrats work to maintain the U.S. system. While in the United States about 13% of nonfarm employees are managers and administrators, that figure is about 4% in Japan and Germany. So U.S. companies rely on lots of well-paid managers to keep poorly paid workers in line, and the huge salaries of the top executives are simply the tip of an iceberg.Read the full article here.
This highly unequal corporate system is buttressed by an unequal political and social structure. Without a powerful union movement, for example, there is little pressure on Washington to adopt a tax code that limits corporate-generated inequality. Several other high-income countries have a wealth tax, but not the United States. In addition, U.S. laws governing the operation of unions and their role in corporate decision making are relatively weak (and often poorly enforced). Without powerful workers' organizations, direct challenges to high CEO pay levels are very limited (as is the power to raise workers' wages). So income distribution in the United States is among the most unequal within the industrialized world, and high executive salaries and low wages can be seen as two sides of the same coin.
Labels: Arthur MacEwan, ceo pay, Corporate Boards, May Day, wealth inequality, worker rights
Global Food Fights
A great commentary on the crisis in global food security from the Americas Program."For the first time since widespread famines devastated whole populations, serious doubts about global food supply have gripped societies throughout the world.
The problem this time is not so much the quantity of food produced (if it ever was), but what productive land will be used for, who will feed us, and who will eat."
Read the rest here.
Labels: Americas Program, economic meltdown, food crisis, food security, Inequality, Laura Carlsen, rising food prices
The Opportunity Costs of War
Rep. Dave Obey (D-WI), the chair of the Appropriations Committee, has put out a nice list of what economists refer to as opportunity costs of the United States war in Iraq.WAR COSTS: OPPORTUNITIES LOST
WASHINGTON - The war in Iraq is costing our country $339 million every day.Every day we spend in Iraq means missed opportunities to invest in important priorities here at home.
For $339 million:
- 2.6 million Americans without adequate health insurance could have access to medical and dental care at community health centers.
- 955,000 families could get help with their energy bills through the Low-Income Home Energy Assistance Program.
- Nearly 480,000 women, infants and children could receive nutritional help with the WIC program.
- 48,000 homeless veterans could be provided with a place to live.
- 130,000 low-income families could conserve energy and reduce their energy bills with help weatherizing their homes.
- Over 100 communities could make improvements to their drinking water and waste water systems with help from the Clean Water State Revolving Fund
- 937 grants for research into diseases like Alzheimer’s, cancer, and diabetes could be provided by the National Institutes of Health.
- 4,400 more “COPS on the beat” could be hired and kept on the beat for the next three years.
- 2,060 more Border Patrol Agents could be hired to protect our borders.
- 18,000 more students could receive Pell Grants to help them attend college.
- 317,000 kids could receive every recommended vaccination.
For D&S coverage of these issues, see this analysis of the true cost of the war, Arthur MacEwan's discussion of the role of oil at the start of the war, and Monique Morrissey's comparison of military and non-military spending as a share of GDP.
How would you spend the estimated $3 trillion that the United States will spend on the war? Fill up your shopping cart at 3trillion.org.
Labels: $3 trillion, costs of war, iraq war, opportunity costs
Born on Third Base?
Peter Wagner of the Prison Policy Initiative sent us this link to a recent article in Slate magazine. The article cites the curious phenomenon that professional baseball players are much more likely to be born in August than July. The author theorizes that August babies aren't naturally better at baseball -- they're just older than their peers, because Aug. 1 is the normal cut-off date for youth baseball leagues.The author concludes that this structural benefit for the August-born is a "small advantage can have an impact that lasts a lifetime."
We'd like to see more sports commentary -- or any commentary -- that looks at the lifelong impacts of big advantages, like economic security, well-funded schools, racial justice, or gender equality.
UMass Research on the Changing Retail Workforce
Researchers at the University of Massachusetts, including Dollars & Sense associate Chris Tilly, have completed a national study, "The Changing World of Work in US Retail Trade." The researchers conducted 18 case studies of employees in food and consumer electronics retail businesses, focusing on recent transformations in the retail sector and their consequences for the low-wage workforce.You can read more about the research at the Center for Industrial Competitiveness at UMass Lowell.
If you're in the Boston area, the authors of the study will be discussing their research on April 30 at UMass Boston. Details below:
Center for Industrial Competitiveness -UMass Lowell
Center for Social Policy - UMass Boston
A panel discussion of findings from a national study
Wednesday April 30, 2008
8:30 a.m. to 10:30 a.m.
University of Massachusetts Boston
Campus Center - 3rd Floor - Ballroom C
As a sector, retail trade exemplifies the central dilemma of low wage work in modern economies. Giant retailer Wal-Mart is the largest US employer, and overall, retail is one of the largest employment sectors in the country. What happens to jobs in this industry, which is a major provider of entry-level jobs, is a key element of the broader picture of low wage employment nationwide.
Retail work is undergoing significant change in the United States. To explore these changes, and their impacts in terms of turnover, skill levels, and other key workforce variables, the authors conducted 18 case studies of food and consumer electronics retail businesses. They spoke to employees from top corporate executives to frontline employees, visited stores, and reviewed HR statistics.
The two study authors will present selected findings:
Françoise Carré, Ph.D. Center for Social Policy, McCormack Graduate School, University of Massachusetts Boston
and
Chris Tilly, Ph.D. Department of Regional Economic and Social Development, University of Massachusetts Lowell.
Discussants of the study findings will include: Prof. David Weil¸ School of Management, Boston University; and Joel Boone, Vice President for Labor Relations, Stop and Shop Supermarkets.
Event sponsored by the Center for Social Policy, J. W. McCormack Graduate School at UMass-Boston; and the Center for Industrial Competitiveness and Department of Regional Economic and Social Development at UMass-Lowell.
For more information, contact:
UMass Lowell: Center for Industrial Competitiveness / 978 934-2796 /
UMass Boston: Center for Social Policy / 617 287-5550 /
Labels: low-wage labor, retail
Tax Day Thoughts on Social Security
On Tax Day, we recommend to you a recently-posted article from our March/April issue, Go Ahead and Lift the Cap, in which economist and D&S collective member John Miller responds to a Clinton campaign flyer claim about Obama's proposal to raise the cap on income subject to Social Security taxes. To her credit, Hillary Clinton has publicly questioned the very idea of a "Social Security crisis" (as we have repeatedly in the pages of D&S, e.g. here and here). But her criticism of Obama's proposed reform is off target.We also recommend this item, from Craig Jennings of OMB Watch:
Social Security: Its Long-Term Outlook Is Still Just Peachy
In fact, it's getting better. The Social Security Trustees Report for 2008 was released by the Social Security Administration today (it's quite the page-turner). Here are the key facts:
* Social Security's "insolvency" date remains the same as last year - 2041. This is the year in which the program's payments will exceed its income.
* The year in which program's payments will exceed tax revenues remains unchanged - 2017. This is the year that the trust fund will first be used to make payments to beneficiaries
* The actuarial deficit over a 75-year horizon is 1.70 percent of taxable payroll - a 0.26 percentage point reduction from last year. This number represents the combination of increased revenues and decreased benefits as expressed by percent of taxable payroll that is required to avoid insolvency
Also included in the report is the cost of the program over the next 75 years. And as much as certain pundits (I'm looking at you Bob Samuelson!) would like you to believe that Social Security is a large bit of the long term fiscal challenge, the report underscores how small a portion of the Entitlement CrisisTM Social Security is.Expressed in relation to the projected gross domestic product (GDP), OASDI cost is estimated to rise from the current level of 4.3 percent of GDP, to 6.0 percent in 2030, and then to decline to 5.8 percent in 2082.
At its peak in 2030, Social Security will cost 1.7 percent of GDP more than it does today - keep in mind, too, that in 2030, Social Security is still solvent. That's not pocket change, but it's not the soul-crushing, economy-killing, puppy-eating monster that Entitlement CrisisTM Henny Pennys make it out to be. To put into perspective, if President Bush's FY 2008 war supplemental request is fulfilled, that $196 billion would represent about 1.4 percent of current GDP. And while the war is an expensive project, it's hardly bringing the economy to a halt.
The real challenge in the long-term fiscal challenge is still health care costs. Data from GAO's Long Term Fiscal Outlook indicate that Social Security's modest cost increase (4.2 percent of GDP today to 5.3 percent in 2082) is a pittance compared to the growth in Medicare and Medicaid expenditures, which increase from 3.9 percent of GDP today to 13.9 percent in 2082.
Labels: hillary clinton, John Miller, Obama, OMB Watch, Social Security, taxes
Conference-Goers Push for Labor Solidarity, Rebound From Disruption
This from the staff of Labor Notes: a report on their annual conference, which was held this past weekend in Dearborn, Mich. D&S co-editor Amy Gluckman was in attendance.More than 1,000 union activists and supporters met at the Labor Notes conference April 11-13 to strategize and debate how to rebuild the labor movement's power.
Media attention has been given to the attempted disruption of the conference by several hundred staffers and members of the Service Employees International Union (SEIU)—some of whom became violent when conference participants refused to allow the chanting protesters to enter the hotel’s banquet hall (See full story).
The fact is, however, that the business of the conference went on as planned. With the exception of a handful of earlier workshops in which speakers were shouted down by SEIU staffers, participants gathered in 110 meetings with members of their own unions and across unions, learned nuts-and-bolts tactics, debated grand strategies, networked, agreed, disagreed, and inspired each other.
A few highlights:
* About 250 participants swelled the American Axle workers’ picket line in Detroit during the Saturday lunch break. A half-dozen amazed American Axle workers, who have been on strike for seven weeks, later came to the conference to be presented with Labor Notes’ “Troublemaker” award.
* Rail workers from seven different unions founded Railroad Workers United, a cross-union solidarity caucus aiming to counter the frequent feuding and disunity among rail unions.
* Participants came from 21 countries, including Vietnam, Sri Lanka, Mexico, Brazil, and China.
* Telecom workers held a special half-day meeting to strategize over upcoming contract expirations and restructuring changes in the their industry.
* A linked set of workshops on Chinese labor issues drew new participants who debated how to relate to the world’s largest workforce.
* Another set of meetings on Black workers’ issues drew African American labor activists into a unique cross-union dialogue.
* A reception for the Freightliner Five—union officers fired last year in Cleveland, North Carolina, for leading a one-day strike—drew both fellow UAW members and those concerned about organizing in the South.
* A workshop titled “Neutrality Agreements and Organizing Deals: Salvation or Sell-Out?” drew more than a hundred to debate both principles and practical results.
* The percentage of the conference made up of young people was much larger than in recent years. In the Bay Area and Portland, local support committees organized ahead of time to enable big crews of hotel workers and building trades apprentices to attend.
* "Troublemaker" awards were given to John Sferazo, an Ironworker and 9/11 responder who fought for compensation for workers disabled by their work at Ground Zero; the United Workers, a scrappy group that won a living wage for the day laborers who clean Camden Yards in Baltimore; the Taxi Workers Alliance, which organizes New York City’s immigrant cabbie workforce; and American Axle strikers.
The conference was dedicated to Santiago Rafael Cruz, an organizer for the Farm Labor Organizing Committee in Mexico, who was murdered by employer-paid thugs.
Perhaps surprising, given the weakened state of the labor movement, is the fact that this was the largest Labor Notes conference since 1997, with more than 1,000 registrants. Although discussions were sober, participants still found inspiration in encountering so many others who were, as one session was titled, "troublemaking for the long haul."