The President's "myRA" proposal is an old idea with a slight twist. It would allow employers to send workers' contributions to a guaranteed non-profit government bond plan. This is a good move. The program would extend tax breaks that are currently only avaliable to high income workers. This is both a fair and good move.

However, the proposal would move myRA accounts to commerical IRA accounts when savings exceed $15,000. These accounts could then be tapped before retirement, which is a bad move. Another detriment - the program is voluntary, which will limit an individual's ability to accumulate adequate funds for retirement.

Unfortunately, these possibilities for leakage make this proposal woefully inadequate to deal with the retirement crisis. The President should support expanding Social Security, Social Security contributions, and a universal guaranteed prefunded account on top of Social Security.

I would like to keep everyone abreast of recent editorials surrounding both the relevant research and President Obama's "myRA" plan.

Obama MyRA Proposal Unlikely to Boost Retirement Savings
Walter Hamilton
LA TImes
January 29, 2014

A Guide to Obama’s Plan for Retirement Savings
Paul Wiseman
Associated Press
January 29, 2014

New Retirement Plan, myRA, Could Spur Savings for Those Who Were Shut Out in the Past
Phyllis Furman
New York Daily News
January 30, 2014

Connecticut Group Wants State MyRA
Dan Berman
Benefits Pro
January 29, 2014

MyRA Retirement Plans: Everything You Need to Know
Lauren Foster
CRA Institute
January 30, 2014

Nebraska sealOn December 10, 2013, I am honored to testify before the Nebraska Legislature’s Retirement Systems Committee hosted by its chairperson, Senator Jeremy Nordquist. The hearing will discuss LR344, legislation calling for an interim study to examine the availability and adequacy of retirement savings of Nebraska’s private sector workers.

In the last 10 years, Nebraska has seen a decline of 9% in the number of employers offering retirement plans to their workers, dropping from 66% to 57%. As a remedy to a looming retirement crisis caused by a lack of retirement income, I propose Nebraska open up its public pension system to private sector employees by creating State GRA accounts. This would provide residents access to professional money managers and allow them to choose among a variety of investments, including a guaranteed fund similar to the Thrift Savings Plans offered to federal employees and the TIAA-CREF plan offered to university professors. 

On November 21, 2013, I had the pleasure of presenting the opening keynote at a plenary in Chicago sponsored by TIAA-CREF and the Governing Institute, "Roads to Retirement Readiness: Ensuring Retirement Security for You Workforce Roundtable." The forum was an exploration of the potential to solve the impending retirement crisis on the state level. Given my work with The New School's Schwartz Center for Economic Policy Analysis documenting the growing lack of retirement plan sponsorship on the state level, I presented our policy proposal, State Guaranteed Retirement Accounts (State GRAs). My fellow speakers included Rhode Island State Treasurer Mark Dingley, former Utah State Senator Dan Liljenquiest and Senior TIAA-CREF Economist Paul Yakoboski. 

Austerity coverFollowing a debilitating federal shutdown that failed to resolve conflicts over government spending and economic recovery, I joined with my fellow SCEPA economists to both edit and contribute to an upcoming journal publication that critiques the mainstream acceptance of austerity policies that persist politically despite continued economic stagnation.

Austerity: Failed Economics But Persistent Policy,” is the November 1st issue of Social Research: An International Quarterly, a publication produced by The New School’s Center for Public Scholarship. The volume includes thirteen essays by leading economists, including Robert Pollin, Rick McGahey (my co-editor), and Willi Semmler, offering tools to escape austerity’s ill-advised vision and concrete policies to create economic growth and prosperity for all people, rather than just a wealthy few.

The volume describes austerity policies both here and abroad, how implementation has restricted economic growth, and why government officials continue to support these policies in spite of their poor track record. Specifically, authors argue that austerity policies hamper economic recovery, but remain popular among elites as a tool to lower labor costs and taxes while increasing profits. A real path to economic recovery and long-term fiscal health requires refocusing the debate from how to eliminate debt to how to eliminate mass unemployment.

Alternative policy proposals include a federal loan guarantee program for small businesses (Pollin), creation of a permanent federal government job guarantee program (Hamilton), and an expansion of Social Security to stabilize the economy and bolster the bargaining power of labor (Ghilarducci).

The issue can be ordered online.

SCEPA's Economics of Climate Change Lecture Series Presents:
Predictions of the 5th IPCC Report

In September, the United Nation’s Intergovernmental Panel on Climate Change (IPCC) published the first of four reports providing updates on the scientific community’s knowledge of climate change and its effects. The report from the first Working Group, Climate Change 2013: The Physical Science Basis, strengthens the panel’s degree of certainty that climate change is man-made and is the cause of melting ice, rising global sea levels and various forms of extreme weather. However, its language has proven controversial both to those who downplay or deny the report’s claims and to those who think the conclusions are too conservative.

SCEPA’s Economics of Climate Change lecture series presented a panel discussion with leading climate change scientists on the major findings of the report. They discussed its local and global predictions and what it forecasts for urban areas, agriculture, food production, and developing economies.

Speakers:

Peter Schlosser, What Does the the 5th Assessment Report Tell Us?
Professor of Earth and Environmental Sciences, Columbia University
Deputy Director and Director of Research, The Earth Institute at Columbia University

Robert Kopp, Local and Global Impacts of Extreme Weather
Assistant Professor, Department of Earth & Planetary Sciences, Rutgers University
Associate Director, Rutgers Energy Institute

Wolfram Schlenker, Effects of Weather Change on Agricultural, Food Production & the Developing World
Associate Professor, School of International and Public Affairs, Columbia University

SCEPA’s Economics of Climate Change project, led by New School Professor of Economics Willi Semmler, is generously supported by the Fritz Thyssen Foundation and the German Research Foundation (DFG).

My latest article in the Huffington Post, "Men Fail, Only Then Women Rule," calls out the absurd sequence of events that had to take place prior to the appointment of Janet Yellen, Karnit Flug and Christine Lagarde into high-ranking economics leadership roles.

In the past, their male predecessor's transgressions - sexual predation in the case of Lagarde's predecessor Dominique Strauss-Kahn, arrogant recklessness and greedy conflict of interest in the case of Yellen's predecessor Larry Summers, and crude criminality, in the case of Flug's predecessor Jacob Frenkel - would not have stopped them from succeeding.

But today, hooray! Strauss-Kahn did not become president of France or remain director of the International Monetary Fund, where Lagarde took his place. Yellen was President Obama's second choice after Larry Summers for Federal Reserve chair, even though Summers was paid millions from the same financial industry he would be charged with regulating. Most recently, Flug was also a second choice contender, for governor of the Bank of Israel. Though she is witty, creative, and highly qualified, Netanyahu, Israel's prime minister, had to give up his top choice, Jacob Frenkel, when Hong Kong police charged him with shoplifting in a duty free shop.

It is indeed a victory that Lagarde, Yellen, and Flug rose to these prominent leadership positions in the economics profession. However, let's be clear - each has a long, successful careers built on solid credentials. The only difference is that this time, their male predecessor's were not given more than they deserved. "To women no less, to men no more," is the mantra that explains why these remarkable women are now powerful economists.

On October 28, 2013, SCEPA Research Assistant Kate Bahn presented SCEPA's report, "Are Connecticut Workers Ready for Retirement?" at the first meeting of the state's Retirement Security Plan Roundtable. The ongoing series is spearheaded by Connecticut State Senate Majority Leader Martin M. Looney and House Majority Leader Joseph Aresimowicz. The series will focus on how to prevent a looming retirement crisis in the state by establishing a state-administered retirement saving plan for low-income, private sector workers. This proposal, modeled after SCEPA's State GRA plan, was described in Senate bill senate SB 54.

Bahn's presentation documented the decline in employer-sponsored retirement plans in the state, making it harder for Connecticut residents to prepare for retirement and leaving them vulnerable to downward mobility as they get older.