US Policy Changes Vol.61 (Employment/Economy/Inequality Vol.7)

Here are articles on economy, corporations, middle class, inequality, et al. Excerpts are on our own.

Inflation, Interest Rates and ‘the Politics of Rage’ (12/22/2016) | @whartonknows
… The Fed is targeting an inflation rate of 2% — it’s currently about 1.7% and has been even lower in recent years. This month, the Commerce Department revised up GDP numbers for the third quarter – from 3.2% to 3.5% (annualized) — pointing to faster-than-expected growth.
The Fed’s hawkish stance is a sea change from only a few months ago, when there was much wringing of hands about growth and inflation being too low…
Politics and Inflation
…higher inflation and interest rates, more government debt and slower economic growth…
“Both the Trump and Brexit campaigns evoked fear and anger at immigration, free trade, and globalization and multi-cultureness more generally,” says Dan Kselman @IEuniversity… …but rather rejection of the status quo political elite from both major parties, seen as corrupt and disconnected.”
… Wharton professor Kent Smetters has said that Trump has talked of reducing tax rates, especially for higher-income people — but also for businesses – that would stimulate the economy in the short run. …
…traditional trickle-down economic policies, such as…the increasing marginalization of the American industrial working class.” …
Protectionism Backlash
…Victory Capital…“The possibility of massive deficit spending has the potential to devalue the dollar and re-price inflation expectations.”
…the key risks facing global equity markets are threats of greater protectionism, including unilateral tariffs and re­writing of trade agreements. These actions could boost inflation…
The Benefits of Government Spending
…worries about inflation are overdone and that any rate below 4% is probably tolerable. …
…Jeremy Siegel… …inflation can go to 3% without causing much harm…
Higher inflation typically comes hand in hand with higher interest rates, and yields on the 10-year U.S. Treasury note have already gone to about 2.6% from 1.6% last summer. …
…debt, currently near $20 trillion, could grow by another $10 trillion in a decade or so. But the U.S. could handle that…
…tax cuts and reduced regulation. …
…bond yields have gone up in anticipation of greater government borrowing… Higher borrowing costs from rising interest rates could damage corporate earnings, hurting stock prices.

Corporations and Politics: Shunning the Middle Road to Go Left or Right (7/7/2016) | @whartonknows
…Daniel Korschun @DrexelUniv @LeBow.
Taking a Stand: Consumer Responses to Corporate Political Activism (w PDF; 7/7/2016) | Daniel Korschun, Anubhav Aggarwal, Hoori Rafieian
… Unsurprisingly, services are popping up to help consumers sort through corporations based on their political leanings. …2ndVote… …BuyPartisan…
… “If we just keep going about our business and ringing the Starbucks register every day and ignoring this (the race issue), then I think we are, in a sense, part of the problem.” …

Why most economists are so worried about Donald Trump (1/12/2017) | Justin Wolfers @nytimes @smh
… Most of my fellow economists remain convinced that university-trained economists can offer useful insight to the new administration. …
…his agenda stands as a rejection of the advice that mainstream economists have typically offered.
Partly this reflects his appointments. Few of his key economic advisers have economics training. …
… The optimists were those who thought he would not have the energy to actually implement his agenda…
… Of the 31 respondents to the University of Chicago’s IGM Economic Experts Panel, 28 disagreed with the claim that the “seven actions to protect American workers” in Trump’s 100-day plan would improve the economic prospects of middle-class Americans. …
…the latest survey from December shows that the optimists now outnumber the pessimists by 50 percentage points. …”stratospheric”.
… Trump remains something of an unknown, and each group is filling in the blanks differently.
… Trump’s anti-regulatory zeal may help businesses but hurt workers; his anti-trade agenda could help sellers but hurt buyers; and his instincts to protect existing jobs may help existing businesses at the expense of new entrepreneurs.
Or perhaps the optimism of small-business owners is about what they think is most likely to happen, particularly in the short run.

Tony Atkinson is the economist who had the measure of inequality (1/3/2017) | @ALeighMP @canberratimes
…died on January 1, aged 72, contributed as much as any modern economist to the study of poverty and inequality.
…like Adam Smith and John Maynard Keynes, he recognised the importance of economics being grounded in history and politics. He was generous to intellectual predecessors such as his Cambridge teachers James Meade and Joan Robinson. …Timothy Coghlan and Colin Clark.
… He created his own inequality measure (the Atkinson Index), devised a novel technique for estimating wealth inequality from inheritance data, and shook up public finance through his work on optimal taxation with Joseph Stiglitz…
…surprised the Thatcher Government by helping the Labour Opposition to estimate the distributional impact of a proposed tax cut before the Chancellor had finished speaking.
… After Thomas Piketty showed how taxation statistics could be used to produce long-run inequality estimates for France, Tony did the same for Britain. Tony eventually produced top incomes estimates for nearly 20 other nations…
… In each of these nations, inequality was at its low-point in the late-1970s. Since then, the share of the top 1 per cent has approximately doubled.
… Inequality: What Can be Done?, it focused on policy solutions to the rising gap between rich and poor. These included guaranteed public employment at the minimum wage, encouraging innovation that improves employability, stronger union power, and more foreign aid. Atkinson also proposed that competition policy should explicitly take account of inequality…

Trump’s Planned Economic Policies: What Could Work, and What Won’t? (w Podcast; 11/14/2016) | @whartonknows
…Kent Smetters, Wharton professor of business economics and public policy… …the Penn Wharton Budget Model…
Infrastructure Investments in Sight:…incidents involving hacking of digital networks occur often because companies have failed to adequately protect their systems. …
Tax Cuts ? Gains Now, Pains Later:… Such debt will compete with private capital for household savings and international capital flows. …
Social Security Shock:…the Social Security trust fund will run out of money in 14 years…
Bringing Back Corporate Taxes:… Trump’s plan to introduce a destination-based tax system would deter “a lot of the income shifting” to foreign tax havens… …similar to the Republican Party’s proposal of a destination-based tax to replace the current corporate tax regime and make it less attractive for U.S. companies to do “international tax planning and profit shifting…
Trade, Jobs and GDP growth:… “When you have less trade, and less capital flows, the impact of debt that would be created under his tax plans would be even bigger than it otherwise would have been.” … “Over a long period of time, the growth rate is pinned down by the rate of technological change, and that is closer to 1% to 1.5% annually after inflation.” …

Top Insights of 2016 (12/29/2016) | @YaleInsights
Why Is Healthcare So Expensive?
What Comes Next for Europe?
What Makes a Museum Successful?
Is Government the Key To Prosperity?
What Happens When the Same Investors Own Everything?
Is Obamacare in Trouble?
Does Taking Photos Make Experiences More Enjoyable?
Do We Benefit From Trade?
What’s the Real Jobs Picture?
What Are the Consequences of India’s Currency Reform?

The Next Four Years: Key Issues and Important Lessons of the 2016 Presidential Campaign (11/1/2016) | @WilsonSchool

POST-ELECTION 2016: WHAT’S NEXT (w Video; 12/6/2016) | @ColumbiaSIPA

What to Watch in Europe in 2017 (1/4/2017) | @whartonknows