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I was hoping for a Tesla, but I agree with Randy’s points below and his policy note.

 

I didn’t see the universal job guarantee in the piece. Perhaps you could add it and create a petition as being discussed?

 

Eric

 

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Eric R. Hake

Dean, Ralph W. Ketner School of Business
Elias B. Saleeby Professor of Business
Secretary-Treasurer, Association For Evolutionary Economics www.afee.net
Faculty Advisor, SMIF


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From: AFEEMAIL Discussion List <[log in to unmask]> On Behalf Of Wray, Randall
Sent: Tuesday, March 17, 2020 5:55 PM
To: [log in to unmask]
Subject: Re: Emergency Government Household Income

 

External Sender:

Tim: I admire your passion, of course, and I think it demonstrates an important point. well, maybe several.

 

A shock crisis creates desperation so that progressives will settle for the doctrine. Naomi explains this very well. We had a crisis of medical care so we settled for a bailout of wall st (AKA obamacare). We know Bernie's got the policies, but we settle for Uncle Joe because we've got a crisis of Trump. Joe's going to continue all the failed policies of the past--everyone knows that--but he's better than Trump (impossible to argue with that). We know that handing out cash to the comfortable is dumb policy, but Silicon Valley, Trump, and Munchkin are all-in on it. (It is the "bail out Trump" initiative, after all.) You can be sure that Trump et al will buy your support and reduce the amount to a pittance--just enough to improve his popularity--while focusing their attention on Wall St. 

 

Yes 7500 is a huge amount for a poor family. Hard to work with so many zeros, but it works out to near a Trillion for the population (if my math is right). Let's say production only falls by 20% and Trump piles on for a BIG so there's no other stimulus, we lose, say $5T of production, but demand doesn't fall by as much so the bottom half of the population can compete with the top half for the reduced supply. Landlords get their rents, debt collectors get their debts, the insurance companies deny the claims, patients get stuck with the bills. Middle incomes who can work at home get their Teslas. Life goes on, Trump gets reelected, or (very unlikely) Joe replaces him. Nothing changes. Wall Street is rescued again.

 

By our estimate, even if you ignore most savings of moving to full employment, a universal Job Guarantee at $15 per hour with good benefits comes to half of that. And we don't provide the downpayments for Teslas. Of course I do not care about the budgetary "cost"; I do care about subsidizing the purchases of Teslas, as well as helping the high income to compete with the lower income for the reduced supply of total output.

 

Actually I did already put my proposal out (with Yeva) and linked it. Much of what we proposed has already become fairly widely accepted (I'm not implying it was because of our piece--which I doubt has been read by many). I asked that you and others consider the points raised. We did in the end support a payroll tax holiday although we do not see much value in the stimulus--rather we would like to see a permanent elimination of the payroll tax, which is a terrible tax for several reasons. If we get a holiday in every crisis, maybe some might begin to fight for a permanent holiday. But most of our focus was on dealing with the crisis--eliminating the uncertainty over testing, treatment, and sick pay. We do not see much point in stimulating Agg D when the problem is collapse of Agg S. 

 

We began arguing for the Job Guarantee about 25 years ago. Virtually everyone told us it is impossible, will never be accepted. (Some institutionalists have been supportive all along; virtually all Post Keynesians have attacked it from the beginning up to the present time.) And, heck, it was politically impossible until about a year ago when almost all presidential candidates were forced to adopt it. 

 

You just never know.  I never take "it will never happen in our current political situation" as a barrier to proposing what is the correct approach. And especially as a crisis is unfolding. Our current political situation is changing by the minute. And it has changed tremendously over the past 25 years. Outside the geezer class, the majority of Americans now prefer Socialism. Who wudduv thought?

 

You are suggesting that this early in the "game" we pile on to the "save Trump" strategy--send a check to every potential voter, plus their kids. I'm suggesting you are giving in to the doctrine much too early. There are many other strategies that can help the groups you are worried about. What about a moratorium on foreclosures, evictions of renters, bill collectors, utility payments, student loan and mortgage payments. Expanded food stamps, emergency provision of food and supplies everywhere the virus has struck, field hospitals, safe shelter and transport. Demanding quid pro quo for support of business (OK airlines, you get a check too, but we are nationalizing air transport to ensure better service.) 

 

Targeted support (both cash and help) makes much more sense than mailing a check to every American. I don't see any reason to give up so early.

 

L. Randall Wray

Senior Scholar, Levy Economics Institute

 

Professor of Economics, Bard College

 

Emeritus Professor, University of Missouri-Kansas City

Co-editor Journal of Post Keynesian Economics
ISSN 0160-3477 (Print), 1557-7821 (Online)
www.tandfonline.com/toc/mpke20/current
http://www.tandfonline.com/toc/mpke20/current

 

Recent Books:

A Great Leap Forward: Heterodox Economic Policy for the 21st Century; Randall Wray; Paperback ISBN: 9780128193808; Academic Press; Published Date: 22nd January 2020; https://www.elsevier.com/books/a-great-leap-forward/wray/978-0-12-819380-8

 

Macroeconomics; Author(s): William Mitchell, L. Randall Wray, Martin Watts; Red Globe Press, Macmillan International; February 2019; https://www.macmillanihe.com/page/detail/Macroeconomics/?K=9781137610669.

 

Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Presshttp://press.princeton.edu/titles/10575.html

 

Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908 

 

 

 

Please make note of my new email address as I will be transitioning all email to:

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Wunder, Tim <[log in to unmask]>
Sent: Tuesday, March 17, 2020 2:08 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Emergency Government Household Income

 

Randall you are right that the below is how it should be done, but it will never happen in our current political situation.  So instead of that happening what will happen is a massive government bailout of the corporations with a small pittance handed to households in the form of the Romney $1000 per adult policy.   Your theoretical purity will result in no politically achievable response and the field will be left to a policy that will once again bail out the rich with little going to the poor and middle class.  Your overall 'vision' of how it 'should be' leaves no room for a response that people can turn to.  So what we will get for those struggling is absolutely nothing. 

 

Do you think I want to fight for simply giving cash?  Do you think I don't want policies reigning in banks?  Of course those are policies everybody here wants.  But if we can't get those policies, and anybody not living in a dreamworld knows we can't, than at least we should be fighting to get something out of this boondoggle for those who really need it.  Instead of getting 7500 to poor families of 3 you will get the single parent getting 1000 and American Airlines getting record bonuses.  Instead of putting out there a proposal that puts that 850 billion to helping the poor, you will get a proposal that once again only bails out the powerful. 

 

In this situation we can't get what we want or what is needed, so perhaps we should get a little bit more for those we can.  For a household of three making the median income $7500 is a HUGE amount of money.  Its not perfect but at least it is something.

 

Let's hear your solution Dr. Wray.  Put out a simple letter that the average person on the street can understand and will buy into.  Tell us how to help my friend who is likely to be homeless next month AND have it be a policy that can get through congress.  I didn't want to write this letter but I am tired of my friends being screwed over because we can't organize our shit to get things done.  You have a brilliant mind sir and I respect the hell out of it.  So you write the letter.  You write a simple letter that can get the traction needed to save my friends.  I will be the first to sign it.  You write that letter that can get broad support and that a person on the street can understand and I will be right there.

 

My friends need help and cash to pay their bills.  Meanwhile we are being outplayed because we let the perfect get in the way of the OK.  So write the letter to congress and the people of the US and let us see it. 

 

Let's get this done.  You think mine is broken then fix it, and do so in a way that can get through congress.  Force the powers to pay attention to the poor for once in this damn world.  Please show me how the letter should be written in a way that will help out those about to be blown up. 

 

 

Timothy A Wunder

Clinical Associate Professor of Economics

Department of Economics

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Wray, Randall <[log in to unmask]>
Sent: Tuesday, March 17, 2020 1:19 PM
To: [log in to unmask] <[log in to unmask]>
Subject: Re: Emergency Government Household Income

 

Target cash.

 

Provide compassion and support without discretion.

 

Yes, many are suffering and we should relieve the suffering. No more foreclosures; no more fees and interest added to late payments; moratorium on debt collection; financial assistance for rent and utilities where needed. Ramp up foodstamps (Yes, I know Trump is cutting them), Jobs for all who want them and social assistance to those who cannot/should not/do not want to work. 

 

Sending cash to a comfortably employed worker who can work from home just makes no sense. Might that person go make a down payment on the latest Tesla SUV? Probably. 

 

Make no mistake. This is a trial run for the doctrine. Similar to what they did in New Orleans after Katrina. It worked wonders. 

 

This time, it is the whole country and probably many others.

 

It is the Munchkin-Trump alternative to a real response.

 

L. Randall Wray

Senior Scholar, Levy Economics Institute

 

Professor of Economics, Bard College

 

Emeritus Professor, University of Missouri-Kansas City

Co-editor Journal of Post Keynesian Economics
ISSN 0160-3477 (Print), 1557-7821 (Online)
www.tandfonline.com/toc/mpke20/current
http://www.tandfonline.com/toc/mpke20/current

 

Recent Books:

A Great Leap Forward: Heterodox Economic Policy for the 21st Century; Randall Wray; Paperback ISBN: 9780128193808; Academic Press; Published Date: 22nd January 2020; https://www.elsevier.com/books/a-great-leap-forward/wray/978-0-12-819380-8

 

Macroeconomics; Author(s): William Mitchell, L. Randall Wray, Martin Watts; Red Globe Press, Macmillan International; February 2019; https://www.macmillanihe.com/page/detail/Macroeconomics/?K=9781137610669.

 

Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Presshttp://press.princeton.edu/titles/10575.html

 

Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908 

 

 

 

Please make note of my new email address as I will be transitioning all email to:

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Wunder, Tim <[log in to unmask]>
Sent: Tuesday, March 17, 2020 1:03 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Emergency Government Household Income

 

Randy I respect your work and it has influenced my thinking in so many ways.  But right now there are literally millions of people a home afraid of where they are going to get the money to make it through the next 3 months.  The politics on capital hill are such that no real change like what you and I both want are likely.  I think fighting for that change is important, hell it is my lifes work.  right now however the country is on fire.  Millions of households are literally on the edge of running out of money. 

 

My letter is likely to garner the support of many across the board.  Is it the solution to the problems we face?  Of course not.  We need a job guarantee, sick leave....  We must have them.  Yet right now we have to get real money into the hands of the people who are about to fall off the cliff.  What you are saying is we need to create  a new system not prone to fires like we are experiencing.  You will find few people more in support of your ideas.  However I am saying we need to put the fire out in order to literally save millions of lives.  I hope that you will consider that. 

 

These families on the edge are people.  They are the ultimate end and are what we have to consider first and foremost.  I hope that will help you understand, and perhaps even support the ideas in this letter.

 

Sincerely

 

Timothy A Wunder

Clinical Associate Professor of Economics

Department of Economics

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Wray, Randall <[log in to unmask]>
Sent: Tuesday, March 17, 2020 12:39 PM
To: [log in to unmask] <[log in to unmask]>
Subject: Re: Emergency Government Household Income

 

I'd like everyone to think a bit more about this proposal.

 

See this first: http://www.levyinstitute.org/publications/the-economic-response-to-the-coronavirus-pandemic

The Levy Economics Institute of Bard College is a non-profit, nonpartisan, public policy think tank

I admit that things have deteriorated greatly in the 5 days (!!) since we wrote that piece. 

 

People need free testing; free medical care; debt relief; paid sick leave (NOT Pelosi's bait and switch, which excludes 85% of all workers--thanks Nancy for excluding Wall Street and megacorps). 

 

Many have lost their jobs (some permanently); many are losing their small businesses. 

 

They need additional help--expanded and more generous unemployment compensation for example.

 

The homeless need special attention, more urgently than pre-crisis.

 

"cash" should be targeted; care and compassion should be indiscriminately supplied.

 

A small BIG is not the answer. As the virus spreads, infecting perhaps 2/3 or 3/4 of the population, putting cash into everyone's hands is not the answer. 

 

It is the "free market" solution favored by Silicon Valley and others who think we will eliminate most workers and just turn them into consumers who are otherwise detached from the economy and the political system. As Naomi Klein put it, this is shock doctrine--and the virus is the perfect shock to implement the doctrine. 

 

More cash indiscriminately handed out + loss of maybe half or more of the labor force + disruption of global supply chains = significant fall of output = ???

 

This is a REAL crisis, not a situation of insufficient aggregate demand. More cash will not get more people onto airlines or into restaurants. We are a service sector economy. Much of that requires physical proximity.

 

 

L. Randall Wray

Senior Scholar, Levy Economics Institute

 

Professor of Economics, Bard College

 

Emeritus Professor, University of Missouri-Kansas City

Co-editor Journal of Post Keynesian Economics
ISSN 0160-3477 (Print), 1557-7821 (Online)
www.tandfonline.com/toc/mpke20/current
http://www.tandfonline.com/toc/mpke20/current

 

Recent Books:

A Great Leap Forward: Heterodox Economic Policy for the 21st Century; Randall Wray; Paperback ISBN: 9780128193808; Academic Press; Published Date: 22nd January 2020; https://www.elsevier.com/books/a-great-leap-forward/wray/978-0-12-819380-8

 

Macroeconomics; Author(s): William Mitchell, L. Randall Wray, Martin Watts; Red Globe Press, Macmillan International; February 2019; https://www.macmillanihe.com/page/detail/Macroeconomics/?K=9781137610669.

 

Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Presshttp://press.princeton.edu/titles/10575.html

 

Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908 

 

 

 

Please make note of my new email address as I will be transitioning all email to:

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of C whalen <[log in to unmask]>
Sent: Tuesday, March 17, 2020 9:34 AM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Emergency Government Household Income

 

Great idea, Tim.

 

It would be great to have such a letter composed, and circulated widely for signatures, by the members of AFEE, which is, as I often say, an (American based) international group of scholars in the tradition of those who fashioned the New Deal and Great Society. Of course, signatures would not be limited to AFEE members.

 

I also think this should be done in a nonpartisan way.

 

And, since the crisis is global, perhaps we should see if members of our sister organizations in Japan (JAFEE) and Europe (EAEPE) want to pursue similar letters in a coordinated fashion.

 

I’m willing to contribute input.

 

Tim: Don’t worry about your rank as a social or professional influencer, just draft something and share it for comment. If you build it… ;

 

Charles

 

 



On Mar 17, 2020, at 10:16 AM, Wunder, Tim <[log in to unmask]> wrote:

 

Can we get an open letter started calling on the government to get money to families directly?  There is a proposal for 850 billion in emergency funds.  That's enough to give every man woman and child $2500.  Can someone more influential than I am start an open letter calling for the government to send households money directly.  So a household of 4 would get $10k.  A household of 2 would get $5k.  

 

This would be incredibly popular and it would actually help the people.

I know there are people on this list who could organize something like this.  Retail workers are terrified, as are so many Americans.  Perhaps this is something we could do to help.

 

Tim

 

Timothy A Wunder

Clinical Associate Professor of Economics

Department of Economics

 

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