A true just transition means robust training, guaranteed jobs and pensions for fossil fuel industry workers.
Automation is an important ingredient driving economic growth and progress. Automation has enabled us to feed a growing population while allowing workers to transition from subsistence farming to new forms of work. Automation helped moved us from a craft system to mass production, from blue-collar to white-collar to “new collar” work—with better work, higher wages, more jobs, and better living standards.
But without adequate policies and institutions, automation can also have negative effects on individuals and communities. Emerging technologies—including artificial intelligence, machine learning, and advanced robotics—have the potential to automate many tasks currently performed by workers, leading to renewed questions over what the future holds for the American workforce. We must ensure the proper support structures are in place to promote opportunity and prosperity for all.
Automation and a Changing Economy is divided into two sections.
Part I, Automation and a Changing Economy: The Case for Action, explores how automation impacts the economic security and opportunity of the American worker…..
Part II of this report, Automation and a Changing Economy: Policies for Shared Prosperity, outlines a program to address automation’s challenges and opportunities……
Source: Bernard Yaros, Sarah Crane, Regional Financial Review, Vol. 29 no. 6, February 2019
The purpose of this article is to serve as a primer on U.S. fiscal multipliers in times of recession. We discuss the economic policies that Congress typically authorizes during a downturn and size them up against one another based on their multipliers. We analyze the impact on the economy of more government aid to states and localities, unemployment insurance benefits, food stamps, infrastructure, and various tax cuts.
From the abstract:
Why do some firms oppose transparency of government programs? In this paper we explore legal challenges to public records requests for deal-specific, company-specific participation in a state economic development incentive program. By examining applications for participation in a major state economic program, the Texas Enterprise Fund, we find that a company is more likely to challenge a formal public records request if it has renegotiated the terms of the award to reduce its job-creation obligations. We interpret this as companies challenging transparency when they have avoided being penalized for non-compliance by engaging in non-public renegotiations. These results provide evidence regarding those conditions that prompt firms to challenge transparency and illustrate some of the limitations of safeguards such as clawbacks (or incentive-recapture provisions) when such reforms aren’t coupled with robust transparency mechanisms.
Amazon HQ2: Texas experience shows why New Yorkers were right to be skeptical
Source: Nathan M. Jensen, Calvin Thrall, The Conversation, February 14, 2019
New York offered Amazon close to US$3 billion to build a “second” headquarters in Long Island City on the promise of 25,000 jobs.
Since the deal was joyfully announced in November, however, many local residents and some politicians in the area have been questioning whether it’s worth it, both in terms of the price tag and the impact on housing and traffic congestion. And on Feb. 14, Amazon backed out of the deal, citing political opposition to its plans.
The research supports those who question the wisdom of cities and states incentivizing economic development. Studies suggest the jobs and economic gains are usually not worth the tax breaks since the majority of companies would have come even without incentives.
And that’s when the companies try to live up to the promises they made. They don’t always do so, with the latest example being Foxconn’s announcement that it is reconsidering plans to build a factory in Wisconsin – less than a year after agreeing to create up to 13,000 high-tech jobs in exchange for more than $4.5 billion in incentives.
But how often do companies that agree to build factories and create jobs in exchange for economic incentives back away from their promises? And when they do, do taxpayers ever learn about it?
To shine light on these questions, we conducted a study of a Texas economic development program. Taxpayers in any American city considering luring a company with cash should take heed…..
Opinion: Amazon, New York and the End of Corporate Welfare
Source: Mene Ukueberuwa, Wall Street Journal, February 18, 2019
Special tax breaks do little to spur the economy. Now they’re becoming politically unpopular too
Are New Yorkers better off after Amazon’s decision Thursday to cancel its planned headquarters in the Queens neighborhood of Long Island City? It’s a complicated question, weighing the benefits of new high-earning residents against the added strain on local services. Yet the pullout could lead to a decisive triumph for taxpayers across the nation, as city and state officials start to reckon with the popular backlash against corporate tax incentives…..
Opinion: New York Did Us All a Favor by Standing Up to Amazon
Source: David Leonhardt, New York Times, February 17, 2019
Yes, Amazon’s departure will modestly hurt the city’s economy. But it’s also a victory against bad economic policy.
New York Labor Didn’t Shrink from Confronting Amazon
Source: Steven Greenhouse, American Prospect, February 18, 2019
But unions were sharply divided about how to deal with the tech giant.
Source: Adam A. Millsap, Bradley K. Hobbs, Dean Stansel, OnlineFirst, February 6, 2019
From the abstract:
Brennan and Buchanan’s Leviathan hypothesis states that “potential for fiscal exploitation varies inversely with the number of competing governmental units” (p. 211) and that “total government intrusion into the economy should be smaller, ceteris paribus, the greater the extent to which taxes and expenditures are decentralized [and]…the smaller the jurisdictions” (p. 185). Using data for US metropolitan statistical areas, we provide the first local-level test of that hypothesis (that we are aware of) that uses “economic freedom” as the dependent variable, which provides a better measure of “total government intrusion into the economy” than the less comprehensive measures (taxes or spending) used in the previous literature. We find mixed support for the Leviathan hypothesis. The number of competing jurisdictions is positively associated with economic freedom, driven largely by the labor market freedom component as opposed to the government spending and tax components (the very measures used in the previous literature).
The financial crisis of 2009, the worst since the Great Depression, was hard on all Americans. But arguably no group felt its sting more than African-Americans, who were already the most economically and financially vulnerable segment of the population going into it.
Even today, a decade since the Great Recession hit, blacks still haven’t fully recovered and remain in a precarious financial condition. What’s worse, Wall Street and policymakers are beginning to worry another downturn may be on the horizon. ….
On January 25, US President Donald Trump signed a short-term spending bill to reopen the federal government of the United States (Aaa stable) until Feb. 15 while negotiations continue on his proposal to build a wall along the country’s southern border. If the impasse is not resolved in the next three weeks, the president said the government will either shut down again or he will use emergency powers under the US Constitution to move forward with his border security proposal. In this report, we answer some of the key questions about the credit effects of the 35-day partial government shutdown – the longest such closure in US history – and the potential ramifications of another shutdown…..
From the summary:
CBO estimates that the partial shutdown delayed $18 billion in federal spending and suspended some federal services, thus lowering the projected level of real GDP in the first quarter of 2019 by $8 billion (in 2019 dollars), or 0.2 percent.
From the summary:
In CBO’s projections, the federal budget deficit is about $900 billion in 2019 and exceeds $1 trillion each year beginning in 2022. Because of persistently large deficits, federal debt held by the public is projected to grow steadily, reaching 93 percent of GDP in 2029.
Real GDP is projected to grow by 2.3 percent in 2019—down from 3.1 percent in 2018—as the effects of the 2017 tax act on the growth of business investment wane and federal purchases decline sharply in the fourth quarter of 2019. Economic growth is projected to slow to an average of 1.7 percent through 2023 and to average 1.8 percent from 2024 to 2029.
The federal government usually benefits the national capital region’s economy, driving high education and wealth levels, knowledge-based employment and providing a buffer during an economic downturn. But the partial federal shutdown, already the longest ever at five weeks, illustrates the drawbacks of the concentrated federal presence in the District of Columbia (DC) metro area, a significant contributor to the larger US economy. The DC area is absorbing the worst of the federal shutdown with missed pay for employees and private sector contractors reducing personal spending and tempering tax revenue for area governments. Federal workers will miss another payday January 25. In addition, public transit ridership has slowed, and operations at other government enterprises are experiencing disruption