Economic Growth

IMF to the U.S. and Europe: Help Not Wanted

  • By
  • Charles Kenny,
  • New America Foundation
June 15, 2012 |

As the Great Recession rumbles on, hitting the old, very rich countries of Europe and North America far harder than the new, somewhat rich economies of Asia and Latin America, the traditional order of global financial governance is looking increasingly frayed. At the Group of 20 summit in Los Cabos, Mexico, on June 18-19, world leaders are expected to issue bold statements about their commitment to reshaping institutions such as the World Bank and the International Monetary Fund to reflect shifts in the economic balance of power.

The Case for Wage-Led Growth

  • By Jeff Madrick, Roosevelt Institute and Schwartz Center for Economic Policy Analysis
June 15, 2012

The share of wages and salaries in Gross Domestic Product (GDP) has declined in most rich nations over the past 20 to 30 years. Over the same period, income inequality has grown in most of these nations, and rapidly in some of the largest of them, resulting in slow wage growth for most consumers. 

Asset Building News Week, June 11 – June 15

June 15, 2012
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include the Fed’s Survey of Consumer Finances for 2010, homeownership, and income inequality.

12 Signs of the Europocalypse

  • By
  • Douglas Rediker,
  • New America Foundation
  • and David Gordon
June 12, 2012 |
Two short years ago, if anyone had suggested that we would be considering pan-European bank regulation, cross-border deposit guarantees, joint and several Eurobonds, and the very survival of the common currency, they would have been dismissed as nothing short of crazy. But what was unthinkable then appears to be verging on the inevitable now.

Is Your Job Robot-Proof?

  • By
  • Parag Khanna,
  • New America Foundation
  • and Ayesha Khanna
June 8, 2012 |

Back in 2004, America’s leading humor magazine the Onion ran a story titled “American Robot’s Job Outsourced to Overseas Robot.” The lawnmower assembling 11-year old robot named QT2D-7 bitterly complained of not receiving any notice or severance. For about a decade, outsourcing has been the Democratic Party’s hatchet to attack free-trade Republicans.

Large-Scale College Savings Account Demonstration Announced

June 6, 2012
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Last week, the US Department of Education (ED) announced plans to pursue a College Savings Account Demonstration project, which will be implemented within the GEAR UP Program and designed to expand the policy toolbox to get more high school graduates to and through college.

GEAR UP is an existing program that focuses on promoting college readiness for lower-income students. It provides resources for academic and related support services and in recent years has been funded at over $300 million a year.

The proposed demosntration project will provide 10,000 high school students with savings accounts as well as financial education counseling and will also deploy a rigorous, randomized control design to test the impact of the intervention. This will allow the demonstration to inform strategies at the federal, state and local level.

Previously, we have highlighted research that suggests students with savings accounts are much more likely to enroll in college than students without accounts. Based on this work, Secretary of Education Arne Duncan joined the FDIC and the national Credit Union Administration in a commitment to increase the number of students with savings accounts. With this announced Demonstration, ED is making good on this commitment. Secreatary Duncan and his colleagues at ED see this as a key strategy for helping the country meet its ambitious college completion goals. By 2020, the US aims to have the most comptitive workforce in the world, as measued by the proportion of colelge graduates over the next decade.

Under the proposed Notice published last week, each participating student will receive $200 in seed funding to start the account, which the state will open automatically. Students will have an opportunity to earn an extra $10 per month in a dollar-for-dollar savings match program over the next four years. This will mean a student can save over $1,000 by the time they are ready for college.

ED will initially allocate $8.7 million worth of funds that are already appropriated to support the demonstration, and devote more to the multi-year research evaluation. Although the Notice is not final, I believe at least the following States are eligible: Arizona, California, Connecticut, Idaho, Kentucky, Montana, Nevada, North Carolina, South Carolina, South Dakota, Tennessee, Texas, and Washington.

At this point, ED is inviting feedback on their proposal. Comments are due by June 30th and a final Notice will describe the application process for states interested in competing to participate.

Achtung Baby: Germany Is Riskier than You Think

June 5, 2012

This presentation is posted with permission from World Economic Roundtable members from Carmel Asset Management.

Why a Grexit Would Make Lehman Look Like Childs Play

June 5, 2012

This post originally appeared at TF Market Advisors.

by Peter Tchir

The Future of Food: Five Frontiers

  • By
  • Elizabeth Weingarten,
  • New America Foundation
June 1, 2012 |

Generations of kids have grown up forbidden to taste chocolate cake batter. The rationale for this quasi- torture: fear of salmonella poisoning.

And at the current rate of food technology, the kids of 2040 may be eating healthier cookie dough, too—gooey hunks infused with nano-sized nutrients, with chocolate chips engineered to be less fattening.

But future children may never know what salmonella is: A Dutch company is currently developing a consumer spray to kill the bacteria on contact. Salmonelex may sit next to Windex on future kitchen counters.

The Invisible Wall against Social Protection Reform in China

May 29, 2012
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Recently, the city of Chongqing has become the center of media attention caused by the political scandal surrounding prominent party leader Bo Xilai – the former top official in the Chinese province of Chongqing. Even before the scandal, Mr. Xilai received both praise and opprobrium for his policies and his role in the region’s rapid economic growth.

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