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.


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.

I am pleased to be an invited speaker at the Sustainable State & Local Retirement Systems: Responsible Stewardship of Public Funds & Fairness for Employees. This convening will bring together state legislative leaders, plan officials, and national thought leaders to discuss the steps states can take to address underfunded public pension plans and best practices for putting retirement systems on a sustainable path. Many states and cities are seeking to balance responsible stewardship of taxpayer dollars and the ability to recruit and retain a high-quality workforce. We seek to help policymakers wrestle with questions of benefit plan design, evaluation of funding mechanisms, and examination of the legal framework for reform.

Session topics include:

• Retirement reform and the law
• Retirement for police and firefighters
• Retirement for teachers
• Retirement reform and the media
• Asking more from actuaries

October 24-25, 2013 

Mandarin Oriental Hotel
1330 Maryland Ave SW
Washington, District of Columbia 20001

6:00pm, Friday, October 25, 2013
The New School
Wolff Conference Room

6 East 16th Street, Room 1103
New York, NY

SCEPA was honored to welcome Robert L. Gordon, distinguished economist from Northwestern University and brother of SCEPA founder David Gordon, to present the annual Irene & Bernard L. Schwartz Lecture.


Professor Gordon has rocked the economics profession and the employment policy debates at the highest levels with his recent – and controversial - work predicting an end to economic growth as we know it. He writes, "Our best days may be behind us." He debated his theory in a recent TED talk and was featured in New York Magazine, where he is described as a "declinist and an accidental social theorist."

Gordon's work demonstrates the shrinking impact of innovation due to the "headwinds" of debt, demographic change, diminishing educational returns, and inequality. Focusing on inequality, Gordon will compare his own policy recommendations with those put forward by his brother in his book, Fat and Mean.

New School economists David Howell, Professor of Economics and Public Policy, and Anwar Shaikh, Professor of Economics, will join Gordon in a debate on inequality. Howell will argue that Gordon has ignored the powerful growth consequences of redistributing wealth and power away from the very wealthy, and Shaikh will give us the long-view of periodic crises in capitalist economies, where the end of growth is periodically predicted.

Robert J. Gordon, Stanley G. Harris Professor of the Social Sciences, Department of Economics, Northwestern University
David Howell, Professor of Economics and Public Policy, The New School for Public Engagement
Anwar Shaikh, Professor of Economics, The New School for Social Research

Teresa Ghilarducci, Chair of the Economics Department at The New School for Social Research, and Director of the Schwartz Center for Economic Policy Analysis

You can join the conversation on Twitter using #gordonecon.

On October 23, 2013, the Maryland legislature will hold a hearing on Senate Bill 1051, the Maryland Private Sector Employees Pension Plan sponsored by Senator James Rosapepe. The bill will be heard in Annapolis by the Maryland Joint Committee on Pensions. SCEPA submitted written testimony regarding the state of future retirees in Maryland based on our March 2013 report, "Are Maryland Workers Ready for Retirement?" The report received headlines in the state last spring for its findings that '40% of older households in Maryland are ill-prepared for retirement' and that '49% of those working in Maryland are not enrolled in an employee-sponsored retirement plan.' 

SCEPA testified at a hearing in the Maryland House of Delegates on similar legislation sponsored by Delegate Tom Hucker that would increase access to a retirement savings plans by giving workers the option of opening an individual Guaranteed Retirement Account (GRA) through the existing Maryland State Retirement and Pension System. The Guaranteed Retirement Account (GRA) is based on Ghilarducci's STATE GRA plan, which was recently enacted in California.