South By North Strategies, Ltd.

Midweek Humor: Tax Edition

Citizens for Tax Justice has some pointed fun with the inequities embedded in the federal tax code.

The Great Housing Debate

Writing at Naked Capitalism, Matt Stoller describes the policy debate over housing as a clash between “handcuffs” and “hope and change.”

There are two schools of thought on fixing the housing market.  The first is the Tim Geithner school, which we’ll call the “hope and change” school.  Hope and changers, who occupy most elite positions in the administration, in banks, at the Fed, in the economics establishment in Congress, at housing nonprofits like the Center for Responsible Lending, in regulatory agencies, believe that the housing market will come back when the economy returns.  Foreclosure problems may be tragic, or overblown, or not, but ultimately are incidental to fundamentals, like matching housing supply to demand or increasing employment through boosts in aggregate demand.  Warren Buffett is probably the most famous member of this school.
…
The second is the “law and order” or “handcuffs” school, which has (loosely) as members people like former FDIC chief Sheila Bair, former SIGTARP Neil Barofsky, iconoclastic investors such as Bill Frey, foreclosure fraud defense attorneys, Congressional actors like Maxine Waters, criminologists like Bill Black and various securitization experts and bloggers.  The handcuffs believes that law and order is not incidental to the breakdown of the housing market, but is central to it.

Around The Dial – April 10, 2012

Economic policy reports, blog postings, and media stories of interest:

• The Center for American Progress has a handy index of job creation policies.
• Naked Capitalism discusses inequality and its consequences with James Galbraith.
• Jared Bernstein lays out two competing visions of American society and government.
• Laura Tyson defends American multi-national corporations as a source policy attention.
• The NC Budget & Tax Center traces public disinvestment in higher education.

Reviewing March Employment Data

Heather Boushey and Adam Hersh of the Center for American Progress summarize the national employment report for March.

Some of the moderated growth in March may be due to unseasonably warm winter weather in parts of the country, which could have pulled some economic activity earlier into the year. Overall, though, 2012 registered the strongest first quarter of job growth since the first quarter of 2006—at the peak of the real estate bubble—and stronger than any other first quarter of jobs growth since the 1990s boom economy.
..
Still, millions of middle-class families continue to struggle uphill due to the hole left in our labor market by the Great Recession that began in December 2007, and the recovery’s moderate pace and unequal distribution mean that growth is not reaching enough people.
…
Although a number of factors outside the United States are blowing headwinds against our recovery, the conservative budget for fiscal year 2013 passed on a party-line vote in the House of Representatives last week poses a political threat to growth, job creation, and financial security and opportunity for middle-class families.

Two Decades Of Cuts To Public Higher Education

• Public institutions have played an important role in serving the growing numbers of undergraduate students. Public institutions absorbed 65.6 percent of the undergraduate enrollment increases that have occurred since 1990.
• After controlling for inflation, states collectively invested in higher education $6.12 per $1,000 in personal income in 2010-2011, down from $8.75 in 1990-1991, despite the fact that personal income increased by 66.2 percent over that period.
• Over the past 20 years, there has been a breakdown in the historical funding pattern of recessionary cuts and expansionary rebounds. The length of time for higher education funding to recover following recessions has lengthened for every downturn since 1979 with early evidence suggesting that the recovery from the Great Recession will be no different.
• Between 1990-1991 and 2009-2010, published prices for tuition and fees at public four-year universities more than doubled, rising by 112.5 percent, after adjusting for inflation, while the real price of two-year colleges climbed by 71 percent.
• Median household income in the United States in 2010 was just 2.1 percent higher than in 1990.

“When we turn our back on higher education, we turn our back on the future of the middle class in America,” said Viany Orozco, Senior Policy Analyst at Demos, who oversaw the development of the report. “State and federal legislators need to recognize that our future workforce will demand a higher education degree; a college degree is not a privilege, it is a necessity.”

“Despite its long history of support for community colleges and public universities, North Carolina has not been immune to the wave of disinvestment that has swept across the nation since 1990,” explained Quinterno. “After adjusting for inflation, the state’s investment of its own funds in higher education amounted to $11.51 per $1,000 in personal income in 2010-2011, down from $13.64 in 1990-1991.”

“The decline in North Carolina’s investment occurred despite the fact that inflation-adjusted personal income in the state grew by 90 percent over the past 20 years,” added Quinterno. “Simply put, North Carolina has become a richer state that is investing less of its wealth in the institutions that help individuals secure a place in the middle class and help fuel the state’s long-term economic prosperity.”

The report calls for renewing America’s commitment to nurturing a strong and inclusive middle class through investments in public higher education. It underscores that states have the capacity to invest more, for despite the budget challenges of recent years, every state is wealthier than it was 20 years ago.