[PEN-L:3100] Re: Re: We are waiting
>Gerald Levy wrote (of the Daily Labor Report): > >>seriously, Dave: stop it! > Why would anyone object to Dave Richardson's amazingly useful reports? I, for one, don't have time to read every major paper every day and find lots of interesting nuggets in the Daily Labor Reports. Please keep them coming, Dave! Ellen Frank
[PEN-L:2833] Re: Re: virtuous circles
RE: The failure of "Keynesian" policies. "But individual initiative will only be adequate when reasonable calculation is supplemented by animal spirits, so that the though of ultimate loss which often overtakes pioneers...is put aside This means, unfortuantely, not only that slumps and depressions are exaggerated in degree, but that economic prosperity is is excessively dependent on a political and social atmosphere which is congenial to the average business man. If the fear of a Labour Government or a New Deal depresses enterprise...it is the mere consequence of upsetting the delicate balance of spontaneous optimism." JMK, General Theory, Ch. 12, p 162 Ellen FRank
[PEN-L:2662] Re: Re: Domestic consequences of global economicturmoil
At 02:05 PM 1/27/99 -0800, you wrote: to > The US is pushing for the Japanese to open her financial markets, a >move that promises more benefit to the US economy that saving the welfare the >American Steel workers. She also need the Japanese to continue buying US >Treasuries. Funny, this convention of calling America "she", when the "he's" are so clearly calling the shots. Ellen Frank
[PEN-L:2461] clinton's social security plan
I hate to interrupt these fascinating disquisitions on post-structural
subjectivities and what not, but I am REALLY CONFUSED and hope someone out
there (you listenin', Max?) can help.
Clinton's budget projects a $4.4t surplus over the next 15 years (yeah,
right!). Clinton proposes that, of this, $2.7b be used to shore up SS. He
claims that using this $2.7t for SS will keep the system solvent until
2050. ("Investing" $0.7t of the $2.7t in stocks will, supposedly, keep the
system in the black until 2055).
But isn't $2.7t almost exactly equal to the projected SS trust fund
increase over the next 15 years? I mean, wasn't this ALREADY budgeted for
SS? Am I wrong here?
So is he saying that,rather than spend the $2.7t
budgeted for SS, the Treasury is going to what? Put it in a vault?
Transfer it to bondholders? How exactly does Clinton's proposal extend SS
solvency by 18 years? I'm lost.
Ellen Frank
[PEN-L:2342] Harvard
I apologize for any criticism of Elaine Barnard and the Harvard Trade Union Program that some may have inferred from my earlier post (meant humorously!). Elaine Barnard is a terrific person, a wonderful speaker and superb organizer. My comment about the HTUP derived from a talk Elaine gave a few years back in which she said, I believe, that Harvard understands power and needs to keep an eye on a potentially powerful enemy. She also pointed out the huge disparity between Harvard's funding of labor (a few rooms in Harvard Square for Elaine and a tiny staff) and its funding of capital (the B-school). On the subject of accepting succor from capital, let me share a brief anecdote. I heard a talk recently of an ex-nun, now a feminist and extremely hostile to the Catholic church, who nevertheless teaches religion at a Catholic college. She was asked why she remained there, why, since she disagreed with Catholic doctrine, she bothered even engaging in theological disputes with the church. She replied that she would not be driven out and leave the old men in control of all the resources and wealth. Ellen Frank
[PEN-L:2264] Re: Crimson filter?
In my comment that Harvard maintains the TUP to keep an eye on them, I was paraphrasing Elaine Barnard (the TUP director) who made this observation in a talk a few years ago, though I don't recall her exact words. Ellen Frank >HARVARD TRADE UNION PROGRAM > > The Harvard Trade Union Program is an intensive 10-week executive > training program designed for trade union leaders. It is comparable to > the advanced education that the University offers to executive-level > individuals in business and government. It teaches the essential > skills for the management and leadership of unions, as well as > providing a unique opportunity to explore key issues for the labor > movement. > > >I like Elaine Bernard well enough, but something here fails to make >basic sense. The cops don't run burglary seminars, nor do the >churches have free thought retreats or ski lodges hold workshops >on chastity. >Anybody here wanna buy a bridge? > valis > > >
[PEN-L:2245] Re: Re: Re: Re: Re: Junk Science
>Ken Hanly wrote: > Does this include Noam Chomsky? MIT keeps on people like Chomsky for the same reason Harvard maintains a trade union program -- to keep an eye on them. As Michael Corleone said, "keep your friends close, and your enemies closer." Ellen Frank
[PEN-L:2162] blood
Some years back, some of you old-timers might recall, there was a discussion on pen-l of the exchange of blood and reference was made to a study (book?) tracing international exchange of blood from the poor to the (relatively) rich. Does anyone recall the reference? Thanks in advance. Ellen Frank
[PEN-L:2113] Re: Re: Re: The pseudo-interrogative mode ofdiscourse
Guys! Guys! Guys! Alrightalready! Stop! Cease! Ferchristsake, you two live in the same neighborhood, why not just take it outside? Ellen Frank
[PEN-L:2073] Re: Re: Social Security Redux
At 11:00 AM 1/12/99 -0800, you wrote: >While you are at it, any rebutal to Milton Friedman's Social Security >Chimeras on the WSJ op-ed page (11/11/99)? > >Henry C.K. Liu > Friedman's editorial (in yesterday's NYT, by the way), points out, correctly, that the SS trust funds and projected shortfalls and all the sturm and drang surrounding them are, in fact, mere accounting issues. He points out that, in real economic terms, it doesn't matter whether we save or not, whether there's a shortfall or not -- points that many of us on this list have made. He argues that gradual, partial privatization of SS is unnecessary, since gradualist solutions are premised on attempts to "preserve" what amount to fictional balances anyway. Why not, he concludes, go all the way? Full, complete privatization right now. What about today's SS recipients? Give them a check representing the present value of their promised benefits and wash our hands of them! My (obvious) rebuttal is that, if the shortfall and trust fund and all that jazz are mere accounting problems (which they are) then SS has no problem in the first place. Why not drop the whole argument and affirm our committment to a decent public pension system for all Americans? Ellen Frank
[PEN-L:2045] unemployment
I remember reading somewhere that the average unemployment rate in the US in the latter half of the 1800s was probably around 20%. Anyone else seen this figure? Any comparables for England? Thanks, Ellen Frank
[PEN-L:2002] Re: BLS Daily Report
At 10:45 AM 1/7/99 -0500, you wrote: >BLS DAILY REPORT, WEDNESDAY, JANUARY 6, 1999 >The prevailing view at the three-day meeting of the American Economic >Association was that high stock prices probably reflect the economy's actual >strength and not a speculative bubble that could burst. ... In the minds of >many economists, the stock market serves mainly as a gauge of the real >economy and a stimulus for spending. Over the last few days, I have been looking over data on wages, exports, bankruptcies, etc. in the former so-called emerging markets. International capital, it seems, is really putting the screws to the laboring classes in Asia and South America. Asian assets are on sale at rock-bottom prices; commodity prices are so low, they're practically giving them away. Is this not the triumph of capitalism? Little wonder the Dow hit 9500. Ellen Frank
[PEN-L:1369] Re: RE: Re: Social Security
At 01:58 PM 12/8/98 -0500, Max wrote: > *If* the trust >fund bonds are redeemed with general revenue, there >is no long-run overuse of the payroll tax. I think >there is little likelihood of any other outcome, >as long as the institution of the trust fund is >maintained and respected. > I'm troubled by this statement. Right now, the budget surplus that Congress wants to spend on tax cuts is, in fact the social security surplus, is it not? And isn't the $1.5b projected ten-year surplus also the SS surplus? What bothers me is that this money, which is collected through a regressive tax, will be spent on something. The left should have a voice in what that something is. Cato recently proposed putting the SS surpluses in some big extra-governmental money fund, to keep our (the public's) hands off of it, until a better solution (like financing a flat tax) could be found. I understand, and sympathize with, the desire not to rock boats or waken sleeping dogs. But there is the immediate, short and medium-term question of why wage-earners are financing a big chunk of non-SS government spending, when the spending isn't going to programs that will directly benefit them. Saying that the regressiveness of the current system will be cancelled out in 22 years doesn't quite cut it for me. Ellen Frank
[PEN-L:1356] Re: Re: Social Security
At 08:09 AM 12/8/98 -0800, you wrote: With Ellen Frank's permission all Pen-l'ers should >copy her short explanation and distribute it through every imaginable means. > > Permission Granted -- Ellen Frank
[PEN-L:1311] Re: Re: Social Security change under Reagan
In response to Bill Lear's question, I've attached a short piece I wrote on SS for a local union publication. Ellen Frank Each year, American workers pay more into the Social Security (SS) system than retirees take out. The difference, now about $90b per year, is saved in the Social Security Trust Fund. Today the trust fund has around $800b. By 2021, it will have nearly four trillion dollars. In that year, taxes that workers pay into SS wont fully cover payouts to retirees. The Social Security Administration (SSA) plans to cover the shortfall by gradually spending down the trust fund. Depending on whose estimates you believe, the $4 trillion will run out 10, 20 or 30 years later (sometime after 2032). Supposedly to make the money were saving grow faster and last longer, conservatives propose investing some of our SS taxes in the stock market. But this proposal rest on a very flawed understanding of how SS works. For one thing, the $800b put away for the future retirees is already gone, spent; the $4 trillion to be saved between now and 2021 will be spent as well, gone as soon as it comes in, in all likelihood. Nor is there anything wrong in this. Many people, when thinking about the SS trust fund, imagine some great heap of money, stacked high in a vault somewhere, piling up, year after year. Then, in 2021, SSA officials open the vault, dust off the cobwebs and begin doling out the stash. But there is no pile of money, there never was and there never will be. Why not? Where has the money gone? The federal government spent it, used it to cover deficits in the rest of its operations, and replaced the cash with IOUs (bonds). When payroll taxes fall short of SS payments in 20 year or so, officials at the SSA will redeem the IOU's, converting one type of paper (bonds) into another (cash). Would the situation be any different if the trust fund were invested on Wall Street? Not at all. Wall Street would have spent the money, as well, loaning it out to currency speculators or telecom mergers. All money gets spent. The only question is how it's spent. When future retirees spend their future benefits, theyll be buying goods and services produced by future workers. How far the benefits go, how well we live, will depend ultimately on how well future workers can provide for us. All the trust funds in the world cant change this. If the workers of 2021 and beyond are uneducated and ill-fed, theyll have little to offer the aged, regardless of the stocks or bonds we put aside. If the environment is ravaged, the air unbreathable, the climate hostile to health, the aged will languish, regardless of the money we've saved. We can not, in fact, save money against the future. Money doesn't feed or cloth us or heal our wounds. Those tasks inevitably fall to the younger generation and will require their energy, their labor, their commitment. In 2021 we will have only two things to fall back on: the real assets we construct today for future use -- buildings, parks, transportation systems - and our children. What then to do with the billions of dollars flowing into the trust funds -- more than $100 billion per year, paid by wage-earners and ear-marked for their future? Spend them! Every last dollar! Not on stocks or bonds or tax cuts, but on real stuff that we need. Imagine what we could do. $100b to train doctors! $100b to build schools, housing, parks, to clean the environment, to feed our children! Our money. Spent on our behalf, for our future. Imagine that.
[PEN-L:691] Re: Re: Re: Re: What are we doing here
At 12:18 PM 10/26/98 -0800, Colin wrote: >This is a false dichotomy. You can argue that there are >real forces acting on exchange rates without adopting >an equilibrium model or asserting that markets are >efficient. (Jim D makes a similar point.) I would strongly agree with Ellen that >equilibrium models, especially of the PPP variety, are >misleading. But this is not the same thing as saying >that the thing is "purely" speculative. > To say that exchange rates have widespread economic effects and to believe that, in some perfect world, exchange rates would equilibrate imports and exports or match the price of beans in Mexico to the price of beans in Texas, should not blind us to the fact that, in the actual world of 1998, the proximate cause of exchange rate behavior is speculative trading in international currency markets. In this world,the predominant forces acting on the exchange rate are the supply and demand of bets made by traders in international banks and hedge funds. Nor is this an academic point. It is precisely because the "free-market" system in international finance provides no room for the exchange rate to moderate the very real strains and stresses of international trade that countries find themselves in the situation of Brazil. In the case >of Brazil, for example, you can simply point out that >substantial real exchange rate (RER) appreciation has >hurt exporters and encouraged imports, and that the >countrys ability to get foreign credit to plug this gap >is limited. The fact of RER appreciation and its effects >on trade do not rely on a notion of equilibrium or market >efficiency. Recognize here that Brazil's efforts to stabilize it's dollar exchange rate was DEMANDED BY SPECULATIVE INVESTORS who would hold funds in real only if the government promised to "fix" the nominal exchange rate. Those very same investors also demanded that Brazil allow full and free convertibility the better to flee the country when and if the government reneged on its promise. When the economic stresses of a hard real became obvious, investors blamed the government for "overvaluing" the real and presented themselves as the hapless victims of GOVERNMENT mismanagement. The identical scenario has played out over the years in countries too numerous to mention. >This is a larger debate that we may not want to rehearse, >but again on my dichotomy point: the fact that speculators >are the proximate cause of a collapse does not mean they >are fundamentally responsible. Any time you have large >RER appreciation with a fixed exchange rate, and the >central bank has limited foreign reserves, you become >easy pickings for speculators. But this is like walking >out of your house and leaving the front door wide open >sooner or later youll get robbed. So you have to start >by asking what policies created this extreme vulnerability. My point exactly. What policies created this vulnerability? Full and free convertibility and the lack of a international, non-market agency to assist in trade finance. Countries have nowhere to go but to the rentiers and speculators, who then demand both full convertibility and fixed exchange rates. The combination is impossible to manage -- even with big reserves -- look at Korea. > >Further, the majority of capital flight or the looting >of the central banks foreign reserves if you like stronger >language is in most cases carried out by domestic wealth- >holders, not by people like Soros. Discouraging the >activities of the Soroses, even if you could do it, would >have little effect on this. > Right. This is why capital controls (inward and outward) are ultimately more useful than Tobin taxes. Though as Jim points out, Tobin taxes could generate lots of revenue. Best, Ellen Frank
[PEN-L:669] Re: Re: hat are we doing here
On October 26, Louis Proyect wrote: >Aren't you the same Ellen Frank who had a sidebar in the Aug./Sept. >"Dollars and Sense" in an article written by the NY manager for Camejo's >Progressive Assets Management? I wasn't exactly sure where you stood, ... >Louis Proyect > The very same Ellen Frank. That sidebar was a very truncated version of a longer piece I wrote for Dollars and Sense a couple of years ago, written in response to a reader query. If you're interested, I've attached the full text, below. Q: I put some money in socially-screened, ethically-conscious index funds, then I discovered that the fund invests in firms in Indonesia that exploit their workers, etc.. Is there any point to these socially responsible, lesser-evil investments, or am I just a sucker? Nora Olsen Dear Nora, You dont say which fund you invested in and, without doubt, some are better than others in screening firms for ethical and socially responsible business practices. As interest in responsible investing has grown in recent years, there has been a proliferation of socially-responsible funds, most offered by small investment companies that specialize in this type of investing, a few managed as a side-line by traditional fund managers. Some define their mission quite narrowly, promising only to avoid weapons manufacturers, casino operators, or tobacco companies (a new fund invests only in the shares of gay-friendly companies). Some do more extensive screening, looking at labor practices, community relations, environmental records and so forth. A very few socially screened funds take a contrarian approach, investing heavily in precisely those companies most socially conscious investors wish to avoid -- military contractors, firms with horrendous labor practices -- hoping to use their clout as shareholders to change corporate policy. Of all the socially-screened funds, the index funds may have the most difficulty reconciling principle with investment goals. These funds try to minimize shareholder risk and mirror the returns of the S&P index. To accomplish this, they invest in a broad range of stocks, often domestic and international, and its not surprising if some of the hundreds of companies in which they hold shares have less than spotless ethical records. Your experience, though, raises a broader question about the very concept of these socially-responsible funds: is socially responsible investing, as its boosters assert, a form of principled activism, or is it merely, as some critics claim, a ineffectual feel-good device to assuage the guilty consciences of affluent yuppies?Is it possible, in financial markets, to do well while doing good? Theres no question that one can do well with socially screened funds -- in the past year, according to a survey by Business Ethics, most socially screened funds earned returns as high as, or greater than, the average for the mutual fund industry as a whole. But, in doing so well, are fund-holders doing any good? Not really. Many individuals who place their money with socially responsible funds do so in the belief -- mistaken, as it turns out -- that they are funneling cash to the companies in which they hold shares and are thereby rewarding good corporate behavior. In fact, virtually all activity in the stock market entails funneling cash between various financial investors and speculators. Buying shares, say, of Ben and Jerrys has no impact at all on Ben and Jerrys bottom line. Instead the cash goes to whatever investor held the shares before you bought them -- maybe an insurance company or a pension fund or just a wealthy individual. If the socially responsible investor pays more for the shares than the original buyer paid, it has enriched the insurance company or pension fund or wealthy individual who sold the stock. Ben and Jerrys will never see a dime of the money. Some socially-screened funds do promise to engage in shareholder activism -- using their position as shareholders to pressure corporate boards. This is a laudable pursuit, but, given the relatively small size and limited holdings of these funds, rarely very effective. Furthermore, if shareholder activism is the goal, wouldnt it make sense to invest in bad companies, whose behavior needs changing, rather than good companies, who already behave well? This is the strategy of a few funds, but it places their investors in an ethical quandary. If the shareholder activism doesnt work and the shares do well, the investor may find herself prospering from the capital gains and dividends payments of an arms trader or toxic sludge manufacturer. Socially-screened funds are a response to the impulse of many concerned people to avoid making money off the exploitative practices of rapacious corporations. This desire is understandable, even com
[PEN-L:667] Re: Re: Re: What are we doing here
At 08:25 AM 10/23/98 -Jim Devine wrote: >right! trade issues only affect exchange rates in the long run (several >years) via purchasing power parity -- or via speculator expectations. It's >trading in assets that's crucial in the short run, not trading in goods and >services. (BTW, this is the basis for arguments against a purely-floating >exchange rate system, a la Milton Friedman.) The problem with this statement is that so-called long-run tendencies (like purchasing power parity) aren't likely to turn up unless short-run forces (real-world trading in acutal historical time) are somehow driving things in the right direction. Efficient market types try desperately to put a good face on foreign exchange markets by claiming that everything will make sense in the long run. All real-world evidence contradicts this. I find it most helpful to regard the exchange rate as a purely speculative variable --hanging by it's bootstraps. Sometimes speculation is stabilizing, moving to correct obvious problems of over- and under-valuation. This is what efficient market boosters would have us believe. Korea, Indonesia, Mexico, et al, were victims of nothing more than way-overdue market "corrections" to long-run equilibrium. Then again, sometimes speculation is distabilizing. I would say the won, rupiah, baht, ruble, peso all fell victim to destabilizing speculators. The Clinton administration is, just now, arranging a tax-financed, $30b pay-off to keep destabilizing speculators from bringing down the real. How much easier (and cheaper) to just control currency trading. Ellen Frank
[PEN-L:629] Re: Re: Currency Values
I'm not sure what the origin of this line of discussion is, but it is now pretty well accepted, even in mainstream international finance, that the trading of currencies for the purposes of financing trade (yen for pounds to buy British sweaters) is largely irrelevant in determining exchange rates, at least for internationally traded currencies. The annual volume of currency traded exceeds the world volume of international trade by a factor of around 100. So whether the Japanese pay for their imports in yen, dollars, pounds or marks has little bearing on the value of the yen. As Jim says, most exchange rate models regard the supply of currency as vertical. Price depends on shifts in demand, which can be caused by changes in interest rates, liquidity preference, speculative beliefs. A decline in exports can drive down the currency value if the decline is interpreted by currency traders as a sign to sell. On the other hand, massive trade deficits can be associated with an appreciating currency if traders are generally bullish on the country -- look at the U.S. Ellen Frank >What happens is that Japanese pay Y to buy Pounds, using cash or check. The >British get some Yen (or claims on Yen). The Pounds are then paid to >British sweater manufacturers. The Japanese lose Yen (or now suffer from >greater foreign claims on their Yen) but gain sweaters. > >If the amount of Yen doesn't not change (a vertical supply curve), and the >demand for Yen falls (shift in demand), the exchange rate falls. (The >number of Pounds needed to buy a Y falls.) > >Jim Devine [EMAIL PROTECTED] & >http://clawww.lmu.edu/Departments/ECON/jdevine.html > >
