The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age
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    Finance and Society-New Economic Thinking

    By trkingmomoe on Tue, 05/19/2015 - 5:09am |

    The Institute for New Economic Thinking (INET) held a conference in Washington D.C. May 5, 2015 that lasted 2 days.  INET is a nonprofit think tank that was started with a 50 million dollar funding from it's founder, George Soros, in October 2009.  The organization is located in New York City. Robert Johnson is the current President of the organization.  It took 2 years to put this conference together and featured women speakers, though it was not about women in finance but about Finance and Society. Normally a conference on finance like this is dominated by men.

    For years media has covered and interviewed many from think tanks that are supported by right leaning political activist. Little attention has been given to progressive groups so I was not aware this group, There was a need for new economic thinking after the 2008 financial crisis. Soros got together with others that was willing to support a institution dedicated to new ideas in economics and to nurture young people in the field of economics.  The unique thing about this group is it in not about political spin and ideology but a serious look at what is needed to make our economy work for everyone. It also focus on the international economy also because when our banks was in crises, it spread to other countries.

     

     

    The key note speaker was Senator Elizabeth Warren but there were other notable women who spoke.  Fed Chair Janet Yellen, IMF Managing Director Christine Lagarde, and Brooksley Born just to name a few.

    I spent hours listening to all the videos that was posted from this conference on the internet.  I came away with the understanding that our financial system was not only broken and over grown but was not sustainable. It no longer served to redistribute money into society through investments but focused on growing profits for bank investors. CEO's no longer could tell you about the activities or what was on the books in their banks that was now to large to manage. They had grown also too powerful for the government to effectively regulate. A theme that kept being talked about was the financial industry was causing harm to society in their pursuit  of profit. 

    I will start with Sen Warren's speech and she is introduced by Robert Johnson.

     

     

     

    If you are interested to watch Fed Chair Yellen and IMF Director Lagarde give their talks and interview each other.  The IMF Director is very interesting and informative as to what is needed to be done.  Here is the link to that video. It is over an hour long.

    https://www.youtube.com/watch?v=yOLHSY59zpo 

    I found this forum extremely interesting and watched it twice.  There was many ideas and information coming from Beneficial Community State Bank in California, Co CEO Kat Taylor.  This bank serves low income and small business. She talks about how FICA scores don't really predict payments. That the abusive high interest rates of sub prime lending plays a bigger role in poor pay backs. The car loan industry was carved out of Dodd Frank.  There are now large segments of our society that is under served and banks like these will have to be part of the future if we are going to repair our economy. 

    I know some of you may not think this is something to look forward to but in my community we would welcome it.  

     

     

    If you are interested in more of this conference you can find other videos at you tube.  Just search using INET Finance and Society.

    I will stop here and pick up with Roosevelt Institute's paper next time that should answer how the Democrats will make changes.  

     


     

      

    Comments

    Sen. Warren published a paper yesterday "Broken Promises."  It is about the US not enforcing labor standard in Trade deals. I haven't read it yet.  I will post the link to it here.  

    http://big.assets.huffingtonpost.com/WarrenReport.pdf


    by trkingmomoe on Tue, 05/19/2015 - 7:06am

    This was just posted 3 hours ago.  She is a real power house and her staff with a full court press.  Copy of the bill. http://www.warren.senate.gov/files/documents/2015-5-18_ISDS_Amendment.pdf

     

     


    by trkingmomoe on Tue, 05/19/2015 - 7:55pm

    Yes. She knows the subject . Most of us became aware of her when she had a regular column on early TPM .Thanks for this illustration of what she's currently up to.

    My problem with all  trade discussions is that I start from a position  so extreme  no serious economist shares it.: that  we should  start with ,say, a 100% tariff across the board on all imports from all sources i.e. a tariff equal to the US price of the equivalent product.. ( "The thing about tariffs is, they do the trick" Keynes) And then negotiate reductions as necessary to gain access to things like minerals we absolutely must import.

    As an exception clearly we'd have free trade with Canada if it agreed to match our tariffs against all third countries. And I recall Friedman, in 1992 on Washington Week in Review arguing  that  congress would insist on whatever level of Mexican imports was required to hold down  immigration.

    But that's it. No  tariff reductions to build  Democracy in Botswana .

    With a different tax system- say the one JFK inherited from Ike- the Government would have sufficient resources so we could consider such ' foreign aid via  trade'. We'd have the necessary national income to somehow re employ our resulting employed.(Building better train tracks?)

    But that ship has sailed. At this point however desirable the result of any particular scheme to allow increased imports, we can't afford the the cost in  increased domestic unemployment .

    Theoretically we could reinstall a progressive tax code and then............forget about it.Ain't gonna happen.

    So if we are going to continue as ,a non-progressive tax code country ,as we are,, then  a corollary is  we can't afford to import anything that we could make for ourselves.(Keynes: "Let all goods be homespun").

    Sure there's a "cost". On an assignment in Brazil , I asked to sharpen a pencil and was offered a jack knife. "Doesn't anyone have a proper pencil sharpener?" I asked. Silence .Then ,whispered:  "there's one in the President's office." And there was . Probably 30 years old ,called the Boston Bull Dog, or something like that. After hours I sneaked in an used it., So , yeah, of course there can be  costs  to a no trade economy. .

    Better to pay them than to continue as a country that can't employ its workers. Or keep its bridges from falling into the Mississippi.

     

     


    by Flavius on Tue, 05/19/2015 - 11:14pm

    Flavius - your position on tariffs is extreme but also I believe mostly correct.  Still, there may be good reasons to have reduced or even no tariffs on certain goods imported from high wage developed countries that have a competitive advantage that we cannot overcome - e.g., French Champagne.  Besides keeping the price of such products within reason, we may also negotiate for equally favorable treatment for products that we can produce better than other countries - e.g., bourbon.


    by HSG on Wed, 05/20/2015 - 6:56pm

    Yes.

    Of course in theory it would exacerbate the reaction to what you correctly label as my extreme position on tariffs if there were any serious prospect of implementing it jointly with my equally extreme position on our nonprogressive tax code. 

     Clearly there's a lot of discussion right now about inequality. It concerns me too.Less because it it is creating  poisonous class enmity  than because we just can't afford it. Just staying with the trade and tariff issue,the billions of tax dollars we forego because the maximum incremental tax rate is 50 points lower than in 1960 renders  it  purely academic  to consider the -worth considering-  proposals for '"foreign aid through trade"  because we can't afford to heal the wounds- on the working class- of the last trade agreement ...

    The collective mental health- if you can say that- of the working class stems  directly from getting paid for having done a days work . And there's no shortage of jobs that need to be  done..And  no shortage of dollars to pay them for doing those jobs.

     But we don't. Because there is a  shortage of politicians willing to collect those dollars and use them to put the workers to work.' 

    Back to inequality. If the maximum incremental tax rate were 90%-again-in theory the IRS would collect a lot more dollars.

    In practice , wouldn't happen.

    Corporate boards wouldn't approve compensation packages which resulted in main lining vast sums to the Government, briefly passing through various executives bank accounts.So those funds would be used otherwise: workers comp,research,price cuts. And reach the IRS that way.

    And the CEO's could go back to flying   to Whistler, first class instead of in a rented jet. 


    by Flavius on Thu, 05/21/2015 - 1:05am