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Seymour Patterson received a Ph.D. in economics from the University of Oklahoma in 1980. He has taught courses and done research in international economics and economic development. He has been the recipient of two Fulbright awards--the first in Botswana in 1991 and the most recent in Ethiopia in 2009. He was on the Truman State University faculty until 2008.
Sunday, March 29, 2015(3 comments)
The Minimum Wage and Economic Growth
Both sides on the minimum wage debate may be right for an increase can cause more unemployment, but also higher spending. Find the net effect of the minimum wage by calculating the sensitivity of wages on unemployment. A higher minimum wage can also mitigate the growing US inequality gap. The minimum wage and the average wage can keep wage costs down, which is good for business but bad for workers.
Thursday, February 12, 2015(1 comments)
"Catch-22" in Government Poliicies
The government wants to cut education funding and privatize traditional government functions on assumption business is more efficient. Also, people lacking insurance who get sick and can't pay their medical bill so their credit score suffers. In 2008, 401(k)s lost 22 percent of their value and interest rates dropped to less than one percent after this date.
Wednesday, January 21, 2015(1 comments)
Growing Rhetorical Silence on Deficits
There have been at least two competing models on growing an economy out of a depression. One advocates deficit spending; another disavows deficit spending. The former attempts to supplant reduction in household and business spending, while the latter tries to encourage household and business spending through tax cuts and tax credits.
Monday, December 15, 2014(1 comments)
The Disparity in Income Distribution Persists
Employers earn about 400 times what their workers make, as profit shares soar and wages stagnate. This implies that worker productivity is zero and explains some of the rising income inequality between the rich and the poor. Higher wages might lead to some unemployment, but there are benefits, too. This applies equally to raising the minimum wage. Low-income workers will spend the increase in income of $18 billion a year.
Friday, November 7, 2014(3 comments)
Politicians and Duplicity
Politicians garner votes to stay in office, so they must be duplicitous. If they tell the truth, their jobs might be in jeopardy. Politicians and duplicity catalogues few examples of duplicity; Ukraine versus Georgia, Fast-and-Furious versus Wide Receiver, IRA, Benghazi, Ebola, and Guantanamo. In all these cases, the scandals depend on party affiliation; not the truth.
Monday, October 27, 2014(4 comments)
A failed experiment may go national after the November elections
Governor Brownback's economic experiment for Kansas has been a resounding failure. He cut government spending and taxes and expected that economic growth would follow. What followed was a shortfall in government receipts. The elections of November 2014 would elevate the Kansas experiment to the nation. If that were to happen, the prospect for the continued economic would be encouraging.
Sunday, October 5, 2014(7 comments)
U.S. Should Emulate Free-Tuition Germany
Germany returned to tuition-free education. However, the trend in the US has been to make students pay for their education, which resulted in a student loan debt of $1.2 trillion. US spent $6 trillion on the wars in Iraq and Afghanistan. Yet, the returns to education are greater than the returns to war spending, which is needed for national security. But education must trump war spending.
Thursday, September 4, 2014(3 comments)
Is Government Welfare Only Good for the Rich?
The rich and the poor are different. Many Americans have no qualms about tax breaks and subsidies for the rich, which they think spur investment and jobs. Many also think welfare causes bad behavior in the poor--which assumes that the rich are good by nature and the poor innately bad. Today, the rich get a trillion dollars in welfare, the same as the poor, but it's the poor whose benefits we want to cut.
Friday, July 18, 2014(3 comments)
Positive effects of higher minimum wages
There is evidence that raising the minimum wages does not hurt employment. Congress will not raise the federal minimum wage to $10.10 but some states, as some businesses, are raising their minimum wages. States that have raised the minimum wages have higher employment. Business that pay more than the minimum wage benefit from lower employment turnover and greater productivity.
Tuesday, July 1, 2014(2 comments)
Free Tuition is the way to go: Pass A Students Emergency Loans Refinancing Act Already.
Congress failed to relieve student debt by adjusting the loan interest rate. The government makes a profit on student loans and it is reducing it share of the cost of higher education. Education is a public good and should be free to students. If the student load debt were forgiven, the ensuing spending would stimulate rapid economic growth.
Tuesday, June 10, 2014(7 comments)
Minimum Wage, Unemployment Benefits, and Income Inequality Connection
Income inequality is a problem addressed by Mr. Piketty and the Pope, both of whom were criticized for their effort. Ways to reduce the income gap are to be found in the minimum wage and unemployment benefits. A rise in the minimum wage and extension of unemployment benefits would marginally reduce the income inequality prevalent in this country and raise aggregate demand for goods and services.
Wednesday, April 2, 2014(4 comments)
Fiscal-Policy Obstruction to Economic Recovery
Fiscal policy has a positive effect on economic growth and is needed as a way to escape from a recession. The Fed expanded the money supply to make up for political restraints put on the economic-stimulus effort. Political considerations have trumped pro-growth economic policies in this post-recession environment.
Wednesday, January 29, 2014(1 comments)
The Tragedy of Lower Wages
For business efficiency the government keeps wages down. Recessions, not extending unemployment benefits, and weak unions cause low wages that boost profits and widen the income gap. Child-labor laws repeal can lead to lower wages.
Wednesday, January 15, 2014(2 comments)
On Income Inequality and Economic Growth
Three causes of inequality with negative impacts on economic growth are discussed. Income inequality increases when the top marginal tax rates are reduced, when there is persistent high unemployment, and when unions are weakened. Tax cuts widen the income gap between rich and poor. High unemployment depresses wages, so the gap between worker and CEO income widens. Weak unions can’t bargain for wages to match productivity.
Wednesday, November 6, 2013(1 comments)
In the Budget Crisis...Just a Short Reprieve and Another Round Begins
Convoluted efforts to defeat, repeal, and defund the Affordable Care Act have failed. The most recent fiasco led to the shutting down of the government and a near default, both of which, to the chagrin of Republicans, failed as political strategy. How odd it is that Republicans can celebrate the tactics of hurting the country (especially government workers)and risking its financial credibility as means to get their own way.
Wednesday, October 16, 2013(4 comments)
U.S. . . . Another Greece? Never!
The U.S. is not Greece and not likely to become Greece. It is bigger and its debt-to-income ratio is smaller. Greece tried austerity (imposed by the EU) and its debt-to-income ratio rose. That's not surprising--in fact, it was anticipated. The U.S. should push for growth through capital investment, human-capital investment, and tax incentives for U.S. businesses abroad to come back home.
Wednesday, October 9, 2013(3 comments)
Abrogating Responsibility To Make the Economy Work Is Inexcusable
Incentives are important. But there is no political will to grow the economy to bring down the deficit. Shutting down the government, or defunding or repealing Obamacare, is insanity. A better solution to the deficit problem is an excise tax on Wall Street. While some people believe in running the government like a business, they fail to note that businesses are mismanaged and fail all the time--e.g. Enron, WorldCom, and AIG.
Wednesday, September 25, 2013(2 comments)
ACA is going into effect soon. The Supreme Course ruled it is constitutional. ACA will make health care insurance available to millions of Americans without insurance. It will address physical health problems as well as lifestyle quality issues related to promoting good health. The possibility of the success of ACA seems to motivate opponents kill it now because it would be difficult to repeal a popular program later.
Sunday, September 8, 2013(2 comments)
Labor continues to suffer in this recovery; but corporate profits soar
Over the years CEO compensation has been rising relative to worker compensation. The reasons include the weakness of unions, reductions in top marginal tax rates, failure to enforce antitrust laws, and a stagnant minimum wage. The difference between worker and CEO compensation is also the result of rewarding the latter with the productivity gains of the former.
Thursday, August 22, 2013(2 comments)
Does the Choice of a Fed Chairman Matter?
Larry Summers' resume both qualifies and disqualifies him for the job of chairman of the Federal Reserve Bank. Janet Yellen has real hands-on experience working at the Fed. But ultimately, it is President Obama's call and he will make that selection--and if his recent public support for Larry Summers is foreshadowing the president's selection, then it might be fair to say the choice has already been made.
Thursday, August 8, 2013(3 comments)
Strong Dollar might be Counterproductive to Economic Growth
Low interest rates are the currency of the day. They reflect the failed effort of the Fed to grow the economy. Business is awash with cash, and tax cuts would increase the supply of loanable funds, but both these things have not made the economy grow faster. The weak dollar has not help either. Obama wants to redouble his efforts to encourage faster economic growth through more government spending.
Thursday, July 25, 2013(5 comments)
Not having Health Insurance Coverage is Risky Business
Many Americans have no health insurance. But because premiums are expensive, many Americans elect not to have insurance. Obamacare is an attempt to address this problem, however, the House voted 37 times to repeal it. Already, more people have access to insurance, premiums are cut in half, seniors on prescription drugs have saved $6.3 billion, and $1.6 billion has been rebated to policyholders.
Saturday, July 13, 2013(1 comments)
Some People Don't Like Science, but Science Is Good for Us
Science is both a source of discovery and harm. In a closed system like the earth, entropy rises. The production of goods and services also produces waste. But the damage production does to the air, the ozone, water, and the voice can be redressed by science.
Wednesday, June 26, 2013(1 comments)
The Stock Market Jitters on Good News for Retirees!
Chairman Bernanke's optimism on the economy is examined here. Wall Street likes low tax rates, interest rates, and deficits. National saving equals private, government, and foreign saving. If the deficit rises, so will interest rates and crowd out investment. So our grandchildren will face higher taxes and have less capital. But higher interest rates are good for people whose main source of income is interest-earning assets.
Saturday, June 8, 2013(3 comments)
The Burden of Education on Students Grows but It Shouldn't
Education as a public good is explored. The $1.1 trillion student debt is a burden hard to repay. Student loan interest rate boubling to 6.8 percent creates a disincentive for students to get an education. The U.S. ranks below many European countries in math and science scores, and some of these countries have lower education costs and no tuitions. Higher education should be affordable to everyone given its public nature.
Saturday, May 25, 2013(2 comments)
No Union is an Island, Entire to Itself . . .
This piece deals with the potential consequences of the assault on unionism, and the resulting decline in union membership and wages. This was followed by a rise in profits. The rift between the profit recipients and wage earners has the potential of causing the emergence of political instability, which could split the country apart.
Monday, May 13, 2013(1 comments)
The Weakening Case for Austerity
There have been a slew of articles discrediting austerity as the pathway to economy recovery. But there have also been many articles denouncing stimulus. I have written a few articles against austerity citing its failure under SAPs in Africa, and in the EU in countries like the U.K., Greece and Spain. Flawed research and condemnation of Keynes have been used to support austerity arguments.
Wednesday, May 1, 2013(2 comments)
Bad Results Follow Flawed Reasoning about the Debt-to-GDP Ratio
The case for austerity made by Harvard economists Reinhart and Rogoff in their paper "Growth in a Time of Debt" fell apart when graduate student Thomas Herndon discovered errors in their argument. Neoliberal thinking about deficits, as it applies to developing countries, Europe, and America, cannot demonstrate that austerity, Structural Adjustment Programs, or sequestration promote economic growth.
Wednesday, April 17, 2013(1 comments)
Don't tamper with social security Mr. President
It is a disappointment the president chose to include chained CPI in his budget. This makes him the first democratic president to do so. It is an opening for republicans to push for Ryan's voucher plan, which models Pinochet's failed privatized pension plan Chile. There are costs and benefits to any plan. But the advocates for privatization ignore the costs.
Monday, April 1, 2013(2 comments)
Ramifications of the Frustrating Spending versus Taxes Debate Stalemate
Congress caused the credit downgrade of the U.S. by insisting on balancing the budget on entitlement cuts. Obama could have prevented this by invoking the 14th Amendment. Apart from Estonia, austerity does not produce economic growth. The deficit is not an issue, most of it is held by Americans. Confidence in the U.S economy is high. Foreign governments will lend us money with one percent interest rates. US should invest now.
Saturday, March 9, 2013(3 comments)
Interest Rates Policy Ineffectiveness Debacle
This piece deals with the fact that interest rates are low--the FED's attempt to deal with slow growth. So the government can borrow at very low rates. The debt is of concern (even that portion held by the Chinese). However, must of the debt is held by Americans. Further, poor people are blamed for the financial recession of 2007, but Wall Street got bailed out while millions of households around the country got foreclosed.
Thursday, February 7, 2013(1 comments)
Worry about the deficit is not the solution to slow economic growth. The 4th-quarter GDP drop is no excuse to cut entitlement spending. Also, irrational arguments are everywhere. For instance, Congress wants to destroy the U.S. Postal Service to save it; President Obama lied about closing Gitmo, but Congress failed to provide funds to close it. Government cannot create jobs--so, a government postal worker doesn't have a job.
Friday, January 18, 2013(1 comments)
Keeping your eye on the ball
We're still debating government spending. We've taken our eyes off the ball. Deficits are necessary in bad economic times for growth. This is not the time to defund Planned Parenthood, intrude into women's reproductive issues, and attack unions. The economy might have been well of the way to a robust recovery if the politicians weren't distracted by partisanship. Congress needs to focus on pro-growth policies.
Thursday, December 27, 2012(1 comments)
Throwing Social Security Beneficiaries Under the Bus
Obama tries to renege on no compromise on entitlement. He should never give in to people who want him to fail. The deficit is not related to entitlement benefits because payroll taxes are paid for Social Security and Medicare. The chained CPI for COLA makes the middle class and poor bear the brunt to fix the deficit. The answer to the economy is growth.
Tuesday, December 11, 2012(11 comments)
Euro-area Economy Austerity Bad Strategy for the U.S.
When politicians focus their attention on the wrong variables bad things happen. Austerity in the euro-area economy led to another recession. In this country politicians are debating what to do about spending and taxes--fiscal cliff. Taxing the top two percent of the population more will not hurt the economy--never mind Norquist and Rep. Boehner. Another stimulus--$50 billion Pres. Obama proposes--is what the economy needs.
Friday, November 30, 2012(4 comments)
Conspiracies and theories that didn't matter because they're flawed
In the political arena, some conspiracies and theories are attempts to assign nefarious motives for the actions of takers. The infrastructure of the arguments is lies and exaggerations. And they have as their main aim the destruction of political opponents. Americans did not buy into these arguments in re-electing President Obama.
Monday, November 12, 2012(1 comments)
The Community Organizer versus the Bain Capital Manager
Pres. Obama won re-election with a better ground game and understanding of the political landscape than the challenger Mitt Romney. The American voter is insightful and punishes those who disregard some ethnic groups, and disrespect women's right to control their own bodies. They don't take too kindly to voter-suppression efforts. The campaign organizer Obama did a better job of managing his campaign than the manager Mitt.
Friday, November 9, 2012(7 comments)
Startups and small business create most new jobs
Big business rests on pedestals. When they flounder their CEOs get generous severance payouts. The myth that tax cuts on big business and top marginal taxpayers is the path to growth has exploded. More fruitful is a shift in focus to more small business friendly policies, as small business is the engine of job creation. On the demand side, middle and low income tax cuts have empirical roots for economic growth.
Monday, October 8, 2012(2 comments)
The Debate on Tax Cuts: More Politics and Economics
Obama and Romney vie to cut taxes on Americans assuming tax cuts lead to economic growth. Tax cuts raise after tax income and buying power. But, the case for tax cuts is unclear--some plus in the short run, in the Kennedy and Reagan years; but not in the Clinton years--higher tax rates correlate with better economic growth. From 1913 to 2011 across the board tax cuts were less effective than targeted cuts of the same size.
Saturday, September 1, 2012(5 comments)
Try something novel when all else fails
The Economic Stimulus package snatched the U.S. economy from a depression, but the recovery has been anemic with interest rates near zero. This has not stimulated demand. Maybe, higher interest rates could temper future inflation, and right now make people with interest bearing assets feel wealthier, and thus they will spend more. The point is when all else fails, it is prudent to try something else.
Saturday, August 11, 2012(1 comments)
The 2012 Presidential Election a Referendum on Stimulus versus Austerity: Who's Right (or Wrong) Obama or Romney?
This article deals with the choices before the presidential candidates for fixing the economy--government spending or austerity--while coming to terms with the notion that China will overtake the U.S. economy by 2025, if the trajectory of economic growth rates for both countries continue on track going forward. There are lots of game-changer events that can derail China's economic hegemony--war, climate change, etc.
Sunday, July 29, 2012(1 comments)
Incentivizing Economic Growth
This article deals with the difficulty the Federal Reserve Bank faces trying to stimulate economic growth through quantitative easing of the money supply. But firms have profit maximization as their goal. On the other hand, the two political parties have different fiscal policy objectives--Democrats want to increase spending, while republicans want to cut spending. Ironically, both think recovery will follow from this.
Friday, July 6, 2012(1 comments)
Deficit, U.S. Default, and Economic Stimulus versus Austerity
This article deals with the dichotomy between the approaches of President Obama and Mitt Romney for dealing with the country's economic problems. Based on his policies to date, it is clear Obama thinks the problem facing the economy is low demand. Hence, the need for a stimulus. Mr. Romney has not clearly articulated any substantive policies but seems to prefer tax and spending cuts, to restore business confidence.
Monday, June 11, 2012(12 comments)
Wisconsin Recall Results: Why Some People Don't Vote Their Self-Interest
This article deals with the inconsistencies of votes cast be voters against their own self interest. It is gemaine to what took place just recently in Wisconsin and addresses the wider issue of inconsistencies in terms of gaps between factual events and fictional ones as voters perceive them.
Tuesday, May 15, 2012(3 comments)
Marginal Tax Rates and Economic Performance
Marginal tax rate cuts are hypothesized to increase economic output. However, there is some evidence that suggest that marginal tax rates and economic performance are positively correlated. If rich and poor people have different propensities to consume, raising taxes on the rich would not reduce consumption and might help the national deficit. So it's hard to justify Grover Norquist's intransigence on hiking taxes on the rich.
Thursday, April 5, 2012 Deja vu all Over Again.
The article makes the point that elections matter in ways that affect economic and legislative policies. This was true when Hoover was president in the 1929 depression. It is true today when state governments put balancing the budget ahead of employment and economic growth, and when ideology dictates cuts to Medicare, Medicaid, education funding, EPA, and NPR. Recession requires stimulus spending not balanced budgets.
Sunday, March 18, 2012(7 comments)
Is Growing Ethnic Diversity a bad thing?
This article discusses the concerns about the change in the ethnic makeup of the U.S. by mid-century. Pat Buchanan paints a dreary portrait of America in his new book Suicide of a Superpower: Will America Survive to 2025. By assuming that "all human capital is no created equal," he must conclude that what is coming is bad. I argue high income and the democratic form of government give hope for a bright U.S. future.
Thursday, March 1, 2012(4 comments)
Economic Recovery Conundrum
Since recessions reflect reductions in aggregate demand for goods and services, particular private household and business demand, it is counterintuitive to cut government spending to promote economic growth. Cutting government spending (by laying off government workers) to balance the budget at the state and local level will lower income and thereby government revenue leading to deficits--this cycle repeats.