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