Archive for National Economy

Contemporary Capitalism, and Why We Need Marxism

The attached essay, composed by CPEG members Mel Rothenberg and Bruce E. Parry over the past year, argues that a Marxist materialist analysis is fundamental in understanding and articulating the current international social/economic conjuncture. They note about the essay, “We sketch the theoretical framework underlying such an analysis, apply this framework broadly to describing the key phenomena defining our era, and draw some general strategic conclusions on what political approach and tasks revolutionary Marxists should be currently focusing on. To do all this in a relatively short essay necessitates a necessarily cryptic and schematic presentation, but we felt this was worth doing in view of the absence of such analysis among Marxist activists. There are a number of worthy lengthy and more detailed treatises written by scholars and academics, some of the most relevant of which we reference. Unfortunately these works are often theoretically dense and do not ordinarily find their way to left activists, the primary intended audience of this essay.

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On the Neglect of Class in Neoclassical Macroeconomics

DandSlogotiny

This response to the Romers’ Critique of Friedman Bernienomics Analysis, authored by CPEG’s Ron Baiman, is a cross-post from the Dollars and Sense blog.

To her credit Christina Romer, one of the four former CEA Chairs who wrote a scathing four paragraph letter dismissing Gerald Friedman’s detailed study of the impact of the Sanders economic program, has acknowledged that Friedman’s estimates warrant a detailed and substantive analysis. Romer has, with her husband and prominent fellow “Neoclassical (NC) Keynesian” Economist, David Romer, produced a more detailed critique that attempts to back up the stridently critical statements of the CEA Chair’s letter.

As Friedman notes, in his detailed rebuttal, the Romers’ major critique appears to be that a stimulus program that ramps up from $300 billion in 2016 to $600 billion by 2021 and then declines to the $300-$400 billion per year range from 2022 to 2026 (Romers, p. 2) cannot produce permanent gains in GDP growth rates via increased emp/pop ratio and productivity rather than a one-time boost in output that tapers off as the stimulus declines. Indeed, the Romers appear so sure of their NC methodological approach that they speculate that Friedman must have made an elementary miscalculation by not calculating multiplier impacts off of an unchanged (for 10 years) CBO baseline.

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The Poverty of Neoclassical Economic Analysis

The Poverty of Neoclassical Economic Analysis, by CPEG’s Ron Baiman, is a response to recent denunciations of economic analysis regarding economic proposals from U.S. Presidential Candidate Bernie Sanders. Baiman writes “When I first got wind of the denunciation of Prof. Gerald Friedman’s Bernienomics impact estimates by prominent liberal Economists, two questions came immediately to mind. Who were these “liberal economists” and what were their objections? A little googling around got me the first answer in a jiffy. The liberal economists were four former Chairs of the Council of Economic Advisors (CEA) under Democratic Presidents Clinton and Obama: Alan Kreuger, Austan Goolsbee, Christina Romer, and Laura D’Andrea Tyson. It took more time and more work to establish the second answer.” Click below to read the full essay.

New CPEG Working Paper – ‘Greece and the Economic/Financial Crises in the EU’

The crises that unfolded between the new Greek government and the German dominated Euro-zone at the beginning of February is blowing hot and cold. It cooled with the acceptance on February 28 of the Greek negotiating offer by the German Parliament. It seems to have reheated in the middle of March with the Euro spokesmen accusing Syriza of foot dragging in implementing the neo-liberal restructuring of the Greek economy the EU demands.

This paper explores the context, current developments, and potential impact of an international mass democratic anti-neoliberal, anti-austerity movement in the United States.

Read the Working Paper (PDF)

Commentary on the October 2014 BLS Jobs Report

On Nov 7th, three days after the 2014 midterm elections, the BLS released its Employment Situation Report for Oct 2014. The numbers are simple and not dramatically different from those that CPEG has analyzed for the past several months.

Overview

First, about 214,000 new jobs were created, continuing the string of net private job creation to 56 months, a new record.

Second, leisure and hospitality, health care and social assistance, retail trade and temporary help services – in that order – accounted for almost 3 of every 5 new jobs in October. Over the past year these four job categories accounted for almost half of all new jobs.

Third, the unemployment rate dropped slightly to 5.8%.

Fourth, the labor force participation rate remains very low at 62.8% although the employment/population ratio has risen by 1% over the past year.

Fifth, looking over the longer time span, the “Obama economy” has, to date generated more than 4.5 million new jobs vs the “Bush economy” new job creation of 1.5 million.

Sixth, although not part of the jobs report analysis, federal deficit is below 2% of GDP – lower than the 40 year average.

Few of the voters in the 2014 elections could have told you any of the foregoing – and some would have vehemently denied at least the last two points.

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