Despite the inspiring headlines and statistics emerging following the Great Recession, TCF fellow Daniel Alpert confirms that the state of the economy is in fact not as healthy as it appears in the public eye. Apparently lackluster financial effects remain such as impending inflation and lower than average employment rates.In fact, the entire post-recession economic recovery in the U.S. has been far less than stellar. Median household real incomes have not recovered and jobs created have been at lower wages than previously existing jobs. The pace of job growth has slowed significantly this year, with the percentage of the employable population actually working near a 35 year low.
Read Alpert's full article here from CNBC.
Economists are largely politically polarized in their theories on how to improve the fiscal policy in the U.S. TCF fellow Mark Thoma says that unlike other professions that can rely on tests in a lab, economists must rely on modeling assumptions which inevitably means their work involves a high degree of "mathiness" or, "restricting your microfoundations in advance to guarantee a particular political result and hiding what you are doing in a blizzard of irrelevant and ungrounded algebra.”
We must find a way to make it clear what the preponderance of evidence says about important policy decisions. Far too often, confusion about the degree to which economists are unified, or not, clouds the public debate. Somehow, and surveys such as the IGM Economic Experts Panel are a start, we must do a better job of communicating the general view within the profession about important policy issues.
Read Thoma's full article featured in Fiscal Times.
A Clinton-era study called Moving to Opportunity (MTO) that looked at the effects moving individuals out of high-poverty neighborhoods with vouchers and into census-tracts with less than 10 percent poverty to see if this would improve their life outcomes. TCF fellow Stefanie DeLuca countered the article and says that programs like this do not go far enough to assist those living in poverty.
For DeLuca and Rosenblatt, there’s plenty that MTO did right but confronting endemic poverty and segregation requires a more systematic approach. That is, something perhaps more akin to the Baltimore Mobility Program (BMP), through which 2,400 Baltimore families have relocated since 2003. Whereas MTO offered housing search counseling to program participants, BMP provided that plus post-move counseling, second move counseling if necessary, and financial literacy and credit repair training.
Read the full article featuring Stefanie DeLuca's work.
Social safety net programs in the United States are indeed helpful, but by no means are they an adequate policy solution to lifting every family above the poverty line. TCF fellow Mark Thoma says that social insurance programs are not just a quick fix, but an true investment in our future, therefore need to not be taken lightly.
Even if the number had been calculated correctly, it would overstate the true cost of social insurance programs due to the failure to consider “dynamic effects.” That is, these programs don’t just provide income to struggling households in times of need, income that can have a valuable stimulative effect during economic downturns; social insurance programs are also an investment in our future.
Read Thoma's article from the Fiscal Times.
The Federal Reserve Board strives to be an independent organization, free of partisanship and with minimal influence from President's who might try stacking the Board. Ben Bernanke, former Federal Reserve Chairman, recently took on two private sector positions that could be seen as contentious given his recent close connections with Fed officials. TCF fellow Mark Thoma says there ought to be a system in place to maintain transparency and independence in the Fed.
Bernanke's case is a bit different in that it's typical for the Fed chairman to step down once he or she loses the faith of the president (chairs serve renewable four-year terms). But Bernanke gave up the chairmanship voluntarily. As far as we know, the president didn't ask him to do. Also, Bernanke had enough time left on his 14-year appointment as a Fed governor to serve another four-year term as chair.
Read Thoma's full article from CBS Moneywatch.
A recent article published in the Washington Post describes the long-term, critical decline of the city of Baltimore, describing how unrest within the city remains today. TCF fellow Stefanie DeLuca, who studies the socioeconomic and racial inequalities of urban areas, was quoted in the article:
"I thought the governor calling Baltimore a 'state of emergency' was a colossal fail. These framings don’t help us — they take away from the humanity of the people here who have grievances. It takes away from the incredible potential of a city that has been struggling and fighting for everything it has."
Read the full article here.
In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.
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