March/April 2021 Issue

March/April 2021 issue cover

Our March/April 2021 issue has gone out to e-subscribers and will be mailed soon to print subscribers.  (Not a subscriber? Subscribe online here!)

Here’s the p. 2 editors’ note:

In the News

New York Governor Andrew Cuomo has been in the news lately, as it has come to light that he withheld data about nursing home deaths from the New York State legislature last year, according to the New York Times and other outlets. The U.S. attorney for the Eastern District and the F.B.I. are reportedly investigating Cuomo for his handling of nursing homes during the pandemic. It’s about time. While mainstream outlets seemed to have nothing but praise for Cuomo’s handling of the pandemic, left media outlets like The Intercept and The Daily Poster had reported on Cuomo’s executive order shielding health care industry officials, including nursing home operators, from Covid-19-related lawsuits. The state’s industry association for for-profit nursing homes, the Greater New York Hospital Association, had drafted the provision, parts of which Republicans in the U.S. Senate have copied word for word in their bid to take corporate immunity nationwide.

This issue’s cover story, by economist Bill Barclay, gets at key factors in the nursing home industry that help account for the fact that nursing home residents, who are about 0.5% of the U.S. population, account for some 40% of U.S. Covid-19 deaths. A key culprit: the takeover of the industry by private equity firms, whose business model is the extraction of profit.

Several other articles in this issue address topics that have been in the news lately.

On January 31, one of the only people to be convicted in the Libor-rigging scandal that emerged in 2012, former Citigroup and UBS trader Tom Hayes, was released from prison after serving half his 11-year sentence. With Libor, a key interest-rate benchmark, set to be retired by the end of this year, we might think the scandal has been put to rest. But in his feature article, economist John Summa lays out the evidence that there was a dimension of the Libor scandal that was missed. His analysis strongly suggests that bankers manipulated the benchmark to gain at least $1 billion a year in extra interest.

Another feature in this issue, by historian Christy Pottroff, takes a look at the role that the U.S. Postal Service played in prior pandemics. The postal service is ideally suited to play a key role in public health crises. Yet during the Covid-19 pandemic, the postal service, overburdened and underfunded for years by austerity and sabotage, has been hampered from fulfilling the role it could. Former President Donald Trump’s appointee to head the USPS, Louis DeJoy, carries on in that role under the Biden administration—for now—even as news reports in mid-February tell of how his plans will slow first-class mail and increase rates.

Arthur MacEwan’s “Ask Dr. Dollar” column answers a reader’s question about why there has been a big push to cancel at least some student loan debt. Although President Joe Biden paid lip service to debt forgiveness during his campaign, he recently seemed to balk at the idea, claiming that he doesn’t have the authority to forgive debt up to $50,000 per borrower (although experts have claimed he does), and that it would be unfair to forgive the debt rather than spending that money on early childhood education (but why not do both?).

February is Black History Month, and this issue’s final feature is an interview with economist Ellora Derenoncourt on her research on an important period of Black history in the United States—the Great Migration, when millions of African Americans from the U.S. South relocated to cities in the North, Midwest, and West. Derenoncourt’s “headline” finding is that, while Black migrants sought and found better economic opportunities in the cities they migrated to, their children and grandchildren suffered worse outcomes due to white backlash in those cities.

When northern cities are listed in order by how dramatically their demographics were altered by the Great Migration, Pittsburgh is in the middle of the list, which makes it an important comparison case. So we were thrilled to get permission from the Carnegie Museum of Art to use some of the gorgeous photographs from its Charles “Teenie” Harris Archives to accompany the interview. Harris was a staff photographer for the Pittsburgh Courier, an African-American weekly newspaper whose publication years, 1910 to 1966, coincided almost exactly with the years of the Great Migration. His photos chronicled all aspects of Pittsburgh’s Black community in the mid-20th century; we have selected three photos that show gatherings of multiple generations of Black Pittsburgh residents, whose lives would have been shaped profoundly by the Great Migration. Tens of thousands of photos from the collection can be viewed at the museum’s website (cmoa.org/art/teenie-harris-archive).

University of Vermont Penalizes Rethinking Economics

By Steve Keen, professor and Head of the School of Economics, History and Politics at Kingston University in London
Cross-posted from his Patreon page.

Mainstream economics clearly failed humanity in 2007, when, as the world sat on the brink of the biggest economic crisis since the Great Depression, mainstream economic models were predicting that 2008 was going to be a great year.My favourite such prediction was the OECD’s bi-annual Economic Outlook, which proclaimed in June of 2007 that “the current economic situation is in many ways better than what we have experienced in years“.

EDITORIAL

ACHIEVING FURTHER REBALANCING

In its Economic Outlook last Augutm, the OECD took the view that the US slowdown was not heralding a period of worldwide economic weakness, unlike, for instance, in 2001. Rather, a “smooth” rebalancing was to be expected, with Europe taking over the baton from the United States in driving OECD growth.

Recent developments have broadly confirmed this diagnosis. Indeed, the current economic situation is in many ways better than what we have experienced in years. Against that background, we have stuck to the rebalancing scenario. Our central forecast remains indeed quite benign: a soft landing in the United States, a strong and sustained recovery in Europe, a solid trajectory in Japan and buoyant activity in China and India. In line with recent trends, sustained growth in OECD economies would be underpinned by strong job creation and falling unemployment.

That was two months before the crisis began.

You might think that, after such an extreme failure, economists would be trying to find what went wrong with their modelling. That has happened at policy institutions like the Bank of England and, to its credit, the OECD.

The Bank of England established the “One Bank” research unit after the crash, has employed many researchers from outside economics, and is, in my personal experience, very receptive to non-mainstream ideas now. The OECD established a new unit called New Approaches to Economic Challenges, and is also much more receptive to non-mainstream views than it was before the crisis.

But universities have been a very different proposition.

In university departments, the reaction of the mainstream has been to defend their paradigm, and to penalize those who criticize it. Whereas in the past they would tolerate the odd dissident as just “that guy down the corridor with those weird views” and let him/her teach a range of service subjects, now they are actively targeting such non-conformists for removal.

A recent instance of this was the decision of the University of Vermont to sack a popular lecturer, John Summa, for teaching mainstream economics in a critical manner. The case has all the nasty characteristics of an academic bunfight, of which I’ve experienced several myself. Do read John’s GoFundMe appeal, even if you don’t wish to make a donation.

In the end, he was dismissed, and he is now challenging that dismissal via a court action. I wish John the best, hope that justice will prevail, and I’ve made a small donation ($100) to his cause. I’d be pleased if you did too. He needs $4000, and he’s about 60% of the way there.

I’ve reproduced some of John’s evidence below, but there’s much more on his GoFundMe site.

John Summa’s Statement

Despite solid evidence of exaggerated and false claims used against me to persuade the Dean to deny my reappointment at UVM, these mischaracterizations were ignored by the Vermont Labor Relations Board when they ruled on my grievance. The case is now being appealed to the VT Supreme Court.

But I need help! Click here to learn more:

I allege that proven false and exaggerated claims masked disapproval of my ecological critiques of standard (supply and demand) neoclassical model economics (which I fully and fairly taught according to over 2,500 student evaluations). I maintain that there is no evidence whatsoever to support the Chair’s biggest claim that I was not teaching the standard (neoclassical) model “fully and fairly”.

Make a donation and help me fight academic bullies who don’t want ecological and alternative economics being taught to students. 

I argue that the Chair was leading the removal of a popular and maverick veteran teacher who was exposing students (after teaching models fully and fairly and getting good reviews from students) to the truth about the profound failures of core curriculum models students are required to learn (and do learn). Among other shortcomings I highlighted is the failure of these models to address global warming, growing inequality and systemic market failure.

Purging popular and challenging teachers cannot be tolerated. Help me fight against academic cronyism and intellectual nepotism at UVM. Make a pledge!

Despite some Nobel prize winning economists saying these models are “foolish” and “dead-end” approaches in today’s world  (information I shared with students), I was nevertheless removed based on the belief that I was not teaching “good” economics (Chair’s choice of words) —  a reference to the same models now discredited by some of the profession’s own leading practitioners. Apparently  the Dept. Chair is unaware that there is no consensus on what constitutes “good” economics. Your good economics is my bad economics and vice versa.

The Faculty Standards Committee (FSC) at the University of Vermont was not fooled by the actions of the Chair and voted unanimously to reappoint me and described the review process as “tainted” (and believed the Chair was “out to get” me, according to a whistleblower who came forward to inform me of this fact).

If you would like to help me, please make a donation at my gofundme page. Here is the link

Thanks for helping me stand up to the enemies of freedom of expression and alternative thinking about economics.