Tag Archives: Government

Crisis Of Globalization: Restoring Social Investment Is Key

By Robert Kuttner – Why is democracy under siege throughout the West? How much of the story is cultural or racial, and how much is economic? And can the slide into authoritarianism be reversed? I think it can.

In the remarkable three decades after World War II, the economy delivered for ordinary people and there was broad support for democracy. That era was unique in two key respects.

First, the economy not only grew at record rates for peacetime, but it also became more equal. Second—and not coincidentally—this was a period when raw capitalism was tightly regulated, on both sides of the Atlantic, economically and politically.

Banking was very limited in what products it could offer, and at what prices. It was almost like a public utility. There were no exotic securities like credit derivatives to deliver exorbitant profits and put the whole economy at risk. Globally, there were fixed exchange rates and capital controls, so bankers could not make bets against currencies and entire economies.

Organized labor was empowered. Unions were accepted as legitimate social partners and had substantial influence. This was true in both Europe and America.

In the years since then, political and financial elites have redefined trade agreements to mean not just reciprocal cuts in tariffs but broader changes in global rules to make it easier for banks and corporations to evade national regulation.

Laissez-faire, discredited and marginalized after 1929, got another turn at bat(ting). Hyper-globalization was a key instrument. And that reversion had economic and ultimately political consequences. more>

Trump’s Assault on American Governance Just Crossed a Threshold

By John Cassidy – Since Donald Trump entered the White House, American democracy has sometimes been described as dangerously fragile, but that isn’t necessarily true. Having survived for two hundred and forty-two years, American democracy is more like a stoutly built ocean liner, with a maniac at the helm who seems intent on capsizing it. Every so often, he takes a violent tug at the tiller, causing the vessel to list alarmingly. So far, some members of the ship’s crew—judges, public servants, and the odd elected official—have managed to rush in, jag the tiller back, and keep the ship afloat. But, as the captain’s behavior grows more erratic, the danger facing the ship and its passengers increases.

All that concerns him is discrediting the Russia investigation and saving his own skin. To this end, he will do practically anything he can get away with. And, judging by the deathly silence from the Republican leadership over the past couple of days, he won’t receive any resistance from that quarter. To repeat, the danger is increasing. more>

How to Save the Human Race

BOOK REVIEW

World Population and Human Values: A New Reality, Authors: Jonas Salk and Jonathan Salk.

By Gabrielle Levy – Until only recently, the whole of human history has been marked by population growth, first gradual and then, in the past two hundred years, a sudden explosion. But in the last decades of the 20th century, population growth began to slow, and eventually, it will plateau or even decline.

The moment at which growth goes from accelerating to decelerating, according to a theory posited by Dr. Salk is called an inflection point – and would be filled with turmoil and conflict, but also opportunity.

Salk characterizes the time before the inflection point as Epoch A, and in that period, people were focused on their own betterment and achievement as necessary to capitalize on the potential for great growth. But going forward, after the inflection point in Epoch B, people will need to be more collaborative and sustainability-oriented. This plays out now in issues like climate change, where the world must work together to combat the issue.

The book has a particular kind of resonance and a particular kind of relevance at this moment in time, because we’re really seeing the pull between two differing value systems, and making decisions as a species about how we’re going to deal with the future. It’s always been a meaningful book, but I think it’s particularly poignant at this moment in time. more>

We Don’t Have Elections

BOOK REVIEW

Terms of Service: Social Media and the Price of Constant Connection, Autor: Jacob Silverman.

How tech companies merge with the nation-state
By Jacob Silverman – It should shock no one if Facebook emerges from its latest privacy imbroglio with a meager fine and a promise to do better—even as our elected leaders, whose lack of knowledge of Facebook’s workings reflected their advanced age, tut-tutted that this time Facebook has to do better.

The canon of American regulatory practices tends toward the ceremonial, with extreme deference shown toward corporations that may one day hire former regulators. Senator Lindsey Graham even invited Zuckerberg to submit possible regulations—an example of regulatory capture so blatant that “corruption” doesn’t even seem like the proper word.

Playing along, Zuckerberg expressed an openness to regulation, though he asked for a light touch, which, barring another data spillage, he should expect.

Beyond a few mild critiques, Congress’s overriding opinion of Zuck seems to be that he was a classic American success story, and perhaps—in his cunning acquisition of ungodly riches on the backs of others’ labor—he is.

To better understand Silicon Valley’s politics, we might return to the nation-state metaphor and consider technology companies as recently ascendant great powers. Endowed with impressive resources, making themselves known in assorted global capitals, their CEOs are greeted in the manner of heads of state. Their vast offshore cash reserves resemble sovereign wealth funds, whose investments have the power to shape politics. more>

It’s Time to Protect Identity Like We Protect Critical Infrastructure

By Andre Durand – With the past year’s record-breaking wave of breaches, it is now safe to believe that most Americans have had their personal identity information exposed—and analysis of the Hudson Bay breach has confirmed this knowledge is now being traded in dark markets.

The long-term ramifications are going to have an impact on every public and private sector organization that utilizes our identity to conduct business and to provide access to critical systems, which will create disruption in our day-to-day activities and even to our way of life.

Because business and government institutions that handle personal information are vital to our society, it’s time to designate “identity” as a new segment in the nation’s critical infrastructure, a set of 16 sectors the Homeland Security Department deems essential to the nation’s well-being.

The entire identity chain must be strengthened to prevent these criminal activities. Birth certificates, which can be used to open bank accounts, are still administered by hospitals that are ill-equipped to manage security. Our government devotes huge resources to ensuring that currency can’t be counterfeited, yet it pays scant attention to documents that can be used to obtain multiple forms of ID. Every physical document we use to prove our identity should be made far harder to duplicate.

We can then move onto our digital systems. more>

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Fiscal Policy Remains In The Stone Age

By Simon Wren-Lewis – Or maybe the middle ages, but certainly not anything more recent than the 1920s. Keynes advocated using fiscal expansion in what he called a liquidity trap in the 1930s. Nowadays we use a different terminology, and talk about the need for fiscal expansion when nominal interest rates are stuck at the Zero Lower Bound or Effective Lower Bound.

When monetary policy loses its reliable and effective instrument to manage the economy, you need to bring in the next best reliable and effective instrument: fiscal policy.

The Eurozone as a whole is currently at the effective lower bound. Rates are just below zero and the ECB is creating money for large scale purchases of assets: a monetary policy instrument whose impact is much more uncertain than interest rate changes or fiscal policy changes (but certainly better than nothing). The reason monetary policy is at maximum stimulus setting is that Eurozone core inflation seems stuck at 1% or below. Time, clearly, for fiscal policy to start lending a hand with some fiscal stimulus.

You would think that causing a second recession after the one following the GFC would have been a wake up call for European finance ministers to learn some macroeconomics. Yet what little learning there has been is not to make huge mistakes but only large ones: we should balance the budget when there is no crisis. more>

So Much More than a Tiger

By Bolaji Ojo – The foundation for what Taiwan is today and what will be years from now were laid decades ago by successive leaders in government and private sectors who elevated the island above natural and geopolitical obstacles to ensure its survival.

Taiwan – also known as the Republic of China – is not at risk of extinction. Rapid economic growth catapulted Taiwan into the group of countries economists like to describe as Asian Tigers, but the island plays an even more central role in the high-tech ecosystem.

It is today headquarters to some of the better-known players in the electronics industry, amongst them Taiwan Semiconductor Manufacturing Co. Ltd., the world’s biggest chip foundry. Foxconn, the No. 1 global contract manufacturer and a Top 5 high-tech company by sales, calls Taiwan home, as does WPG Holdings, a leading distributor of electronic components. Taiwan is a major supplier of PCBs to OEMs and EMS providers and is host to AU Optronics Corp., one of the biggest suppliers of displays for smartphones, PCs and laptops.

Taiwan’s challenge this time is finding a way to respond to China’s ascendance and staving off rivals elsewhere. Taiwan was one of the forces behind the emergence of China as a heavyweight in the electronics supply chain. The huge investments of money and expertise poured into China by Taiwan, Japan and other Western countries helped to turn the Communist country into a manufacturing hub for the electronics industry. For Taiwan, though, China presents a conundrum; It has become both a beneficiary of and a victim of China’s explosive growth. more>

Updates from Chicago Booth

Why policy makers should nudge more
By Alex Verkhivker – When policy makers around the world want to influence their constituents’ behavior, they have a few options. They can offer a carrot, such as a tax incentive, stipend, or other reward. They can use the legislative stick by passing a mandate or a ban.

But research suggests they should turn more often to a third tool, a “nudge,” which in many cases is the most cost-effective option.

Nudging is the word used in behavioral science for structuring policies and programs in ways that encourage, but don’t compel, particular choices. For instance, requiring people to opt out of rather than into a program, such as a retirement savings plan, might nudge them toward participating. So might reducing the paperwork necessary to enroll. more>

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From a nation at risk to a democracy at risk: Educating students for democratic renewal

BOOK REVIEW

How Democracies Die, Authors: Madeleine Albright, Ronald Inglehart, Steve Levitsky and Daniel Ziblatt.

By Fernando Reimers – Public schools were invented to prepare people for self-governance, and to work with others towards the improvement of their communities and for the betterment of society. These were the arguments Horace Mann used, in the 1830s, when he led a successful advocacy campaign to launch public education in Massachusetts. Since then, schools in America have in many ways provided students the capacities necessary to engage civically, to collaborate with others, across lines of difference, in making society better.

As American democracy has evolved, so have the ways in which schools embrace their civic mission. For much of their history, our public schools did not hold women and men to similar expectations, nor did they adequately educate African Americans and other ethnic minorities. It was only when social movements, such as the women’s movement and the civil rights movement, broadened our collective understanding of who should be included in the opportunity to participate in this democratic experiment of self-rule, that schools, in turn, broadened their focus to prepare women and minorities for civic engagement and leadership.

The global democratic setback is the most severe since the end of World War II.

It is time to replace the powerful compact and narrative that A Nation At Risk provided to guide our schools three decades ago, with a more capacious vision for how our schools can help our students stand up for a democracy that is very much at risk. more>

How To Stop Trump

By Robert Reich – Why did working class voters choose a selfish, thin-skinned, petulant, lying, narcissistic, boastful, megalomaniac for president?

One explanation focuses on economic hardship. The working class fell for Trump’s economic populism. A competing explanation – which got a boost this week from a study published by the National Academy of Sciences – dismisses economic hardship, and blames it on whites’ fear of losing status to blacks and immigrants. They were attracted to Trump’s form of identity politics – bigotry.

If Democrats accept the bigotry explanation, they may be more inclined to foster their own identity politics of women, blacks, and Latinos. And they’ll be less inclined to come up with credible solutions to widening inequality and growing economic insecurity.

Yet the truth isn’t found in one explanation or the other. It’s in the interplay between the two. more>