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Showing posts from October 8, 2014

Income Inequality and Rising Health-Care Costs

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[A worker who today makes $30,000 has had to forsake a 26% salary increase since 1999 as employer costs rise. New data show that, in the US, health care costs are the largest driver of income inequality. *RON*]

By Mark J. Warshawsky and Andrew G. Biggs, Wall Street Journal Blogs, 6 October 2014

A new Kaiser Family Foundation survey reports that health-insurance premiums rose by a “modest” 3% in 2013. Even more modest, however, was the 2.3% growth of workers’ earnings last year. These figures merely illustrate a long-term trend of rising health costs eating away at wages. The real story is even more dramatic: Government data show that health costs are the biggest driver of income inequality in America today.

Most employers pay workers a combination of wages and benefits, the most important of which is health coverage. Economic theory says that when employers’ costs for benefits like health coverage rise, they will hold back on salary increases to ke…

Austerity has been an even bigger disaster than we thought

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[New research showing that austerity is so bad for economic growth that it may actually increase deficits and debt. *RON*]
By Matt O'Brien, Washington Post Blogs, 7 October 2014 There might be a worse idea than cutting spending during a depression, but I doubt it.

The fundamental economic question of the last five years has been a simple one: how much does stimulus work? The answer, according to a new paper by Daniel Riera-Crichton, Carlos Vegh, and Guillermo Vuletin, is much more than we previously thought. And that means austerity has also hurt more than we thought — so much so that it might even be self-defeating.

That's right: cutting spending in a slump might actually make debt problems worse.

It's all about the fiscal multiplier. Stimulus, you see, is measured by how much one dollar of government spending increases GDP. But in a normal economy, it doesn't. That's because the Federal Reserve has its inflation target that it…

SAT Scores and Income Inequality: How Wealthier Kids Rank Higher

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[Before long we will drop the pretense and just start calling universities CEO and Lawyer (i.e., politician) Schools. There is also a view that, as long as we are going to pretend to continue having a democracy we are far better off if we only permit very ignorant people vote. Some of the comments to the original story are worth reading as well. *RON*]
By Josh Zumbrun, Wall Street Journal Blogs, 7 October 2014

SAT originally stood for Scholastic Aptitude Test. But parsing the results by income suggests it’s also a Student Affluence Test.

On average, students in 2014 in every income bracket outscored students in a lower bracket on every section of the test, according to calculations from the National Center for Fair & Open Testing (also known as FairTest), using data provided by the College Board, which administers the test.

Students from the wealthiest families outscored those from the poorest by just shy of 400 points. Given the widespread use …

Germany’s Insistence on Austerity Meets With Revolt in the Eurozone

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[Great photo! :-) The winds of discontent grow apace: "...national leaders, policy makers and economists are starting to challenge as never before the guiding principle of the Continent’s response to six years of crisis: Germany’s insistence on budget austerity as a precondition to healthy growth." *RON*]

By Alison Smale and Liz Alderman, New York Times, 7 October 2014

BERLIN — As Europe confronts new signs of economic trouble, national leaders, policy makers and economists are starting to challenge as never before the guiding principle of the Continent’s response to six years of crisis: Germany’s insistence on budget austerity as a precondition to healthy growth.

France this week stepped up what has become an open revolt by some of the eurozone’s bigger economies against Chancellor Angela Merkel’s continued demands for deficit reduction in the face of slowing growth. Italy has warned against too rigidly following Germany’s preferred app…

Can Scientists Speak? New Report

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[The group Evidence for Democracy (E4D) has produced a report on the communications policies of Canadian federal government departments. Unsurprisingly, they come up with a failing grade. The following is taken from the email announcement for their report. As they note, "A healthy democracy requires that scientific information is made available for informed public debate so that we can hold our governments accountable." *RON*]



E4D has just released its first-ever research report! We have graded 16 federal government departments on their communications policies, and found that, overwhelmingly, they fail to support open communication between scientists and the public.

Major results of the report, Can Scientists Speak? Grading communication policies for federal government scientists, include:
Government media policies do not support open and timely communication between scientists and journalistsPolicies do not protect scientists’ right to free spee…