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By Rachel Goldfarb, originally published on Next New Deal

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The One Part of the Charity vs. Social Welfare Argument That Everyone Ignores (The Week)

Building on Roosevelt Institute Fellow Mike Konczal's piece in Democracy Journal on the myth that private charity could replace government, Matt Bruenig argues that the status quo bias – "let's hold on to what works" – protects social safety net programs once they're in place.

Bill to Restore U.S. Unemployment Insurance Likely to Deadlock in Congress (The Guardian)

Dan Roberts reports that John Boehner will not allow a vote on extended unemployment insurance, which lapsed in December, without provisions to encourage job growth, though the GOP hasn't offered any big ideas.

Labor Department Intervenes on Behalf of Hearst Interns (ProPublica)

In its first amicus brief in an unpaid internship lawsuit, the Labor Department urged the court to use stricter standards to determine whether an unpaid internship is permissible, writes Kara Brandeisky.

Banks Ordered to Add Capital to Limit Risks (NYT)

Federal regulators will increase the leverage ratio, which measures the amount of capital a bank must hold against its assets, writes Peter Eavis. Supporters say this rule is simpler and easier to enforce than other parts of financial reform.

Fed Gives Banks More Time on Volcker Rule Detail (Reuters)

Douwe Miedema reports that banks will get two additional years, through July 21, 2017, to sell off collateralized loan obligations, which the Volcker Rule deems too risky for banks to invest in.

The Unexpected Benefit of Telling People What Their Coworkers Make (The Atlantic)

On Equal Pay Day, many spoke up for pay disclosure as a way to reduce the wage gap. Emiliano Huet-Vaughn's research shows that pay transparency also significantly increases worker productivity.

New on Next New Deal

Is Short-Term Unemployment a Better Predictor of Inflation?

Roosevelt Institute Fellow Mike Konczal argues that we should not ignore long-term unemployment while analyzing how the economy is doing. That makes the Great Recession data make more sense, he says, but isn't applicable today.


Originally posted to Daily Kos Economics on Wed Apr 09, 2014 at 04:59 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Free Markets (2+ / 0-)
    Recommended by:
    Satya1, Cadillac64

    I think one of the biggest myths out there is that business is the
    guarantor of free markets and competitio­n. Businesses hates
    competitio­n and prefer monopoly, monopsony and oligopoly and will use
    their influence with government to stifle competitio­n. Overweenin­g IPR
    laws, anyone? Effective regulation­, transparen­cy and good government
    are needed to promote free markets.

    The financial sector is another poster child where excessive profits are
    a clear indication that competitio­n is lacking., Which sector most
    uses its funds to influence policy?

    The quote below is from the book Capitalism and Freedom written by
    Milton and Rose Friedman. Dr. Friedman is the economist who is quoted
    most often when conservati­ves are praising free markets and
    capitalism­.

    "But we cannot rely on custom or conscious alone to interpret and
    enforce the rules; we need an umpire. The­se then are the basic role of
    government in a free society;  to provide a means where we can modify
    rules, to mediate difference­s among us on the meaning of rules, and to
    enforce compliance with the rules on the part of those few who otherwise
    would not play the game."

    For whatever reason, this part of Dr. Friedman's philosophy is never mentioned when it comes to making "free markets" work.

    You Don't Happen To Make It. You Make It Happen !

    by jeffrey789 on Wed Apr 09, 2014 at 08:15:57 PM PDT

  •  I enjoyed the Konczal article (1+ / 0-)
    Recommended by:
    Cadillac64

    but in the example he gave about child poverty and the choice of government or charitable giving being the method, I think he needed to mention at least one more important factor.

    If people really believe that charitable giving can be the preferred method of lowering child poverty, nothing was in their way from engaging in that activity.  The "point" is that "the thousand points of light" was being sold to a party rank and file filled with a "thousand pointed heads."

    Personally I think it is pretty obvious that the Republicans who advocate solving human suffering mostly via charity and not by government are lying to everyone and sometimes to themselves.

    I'm sure there IS a status quo bias as Konczal suggests.  I just don't think that explains the teaching example he chose.

    I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

    by Satya1 on Wed Apr 09, 2014 at 08:28:06 PM PDT

  •  Not real impressed by increase in reserve (0+ / 0-)

    requirement.

    Have they done anything to eliminate deposit reclassification?

    That's a nifty little trick, hidden in fine print for consumer banks, whereby a bank account is actually two accounts:

    a transaction account that must conform to reserve requirements and a -- gee, what to call it? a holding account? -- to hold the money.  That holding account is in some form -- I think money markets work -- against which no reserve is required.

    Get serious about chasing down all of the accounting tricks, and I'll be more impressed.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Thu Apr 10, 2014 at 04:05:49 AM PDT

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