Category Archives: Pavlina R. Tcherneva

Why Bernie Sanders Should Add a Job Guarantee to His Policy Agenda

By Pavlina R. Tcherneva

Discussions of the ‘politically possible’ always remind me of a favorite quote: “Argue for your limitations, and sure enough they’re yours.”

Bernie Sanders’ issues page reads like a list of everything we’ve been told is not politically possible.  And yet he’s getting record breaking support, precisely because people are tired of being told that something cannot be done–that it is impossible to get money out of politics, or that tackling inequality and racial injustice is unrealistic, or that securing a living wage is a political nonstarter.

Bernie has unapologetically rejected sclerotic visions of what is ‘politically possible’.  And now he should add the Job Guarantee (JG) to his list of issues. Indeed, he already has the key ingredients—a bold proposal to eliminate unemployment by creating 13 million decent-paying jobs, a living wage, and a federally-funded youth job guarantee, which Sandy Darity correctly called a stepping stone (a pilot program) to a blanket job guarantee for all.

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It Simply Cannot Work

Pavlina Tcherneva discusses Greece’s Bailout with Richard Aldous on American Interest. You can listen here. She describes a deal that seems to contain more austerity than was initially proposed, and calls some of its economic incentives perverse. She discusses why the economic situation in Greece today is in some ways worse than was America’s Great Depression, and compares the decision to bail out Greece to Ireland’s austerity experience.

NEP’s Pavlina Tchernerva on RT discussing Greece

Pavlina appears on RT’s Boom Bust segment discussing Greece and austerity. She appears starting at 18 minutes.

Greek debt disaster bodes ill for daily life

By Pavlina Tcherneva
Cross posted from Al Jazeera

“There are red lines in the sand that will not be crossed,” Greek Prime Minister Alexis Tsipras said just weeks ago as he began the long negotiations process with creditors.

Some of these lines included no more pension cuts or value-added tax (VAT) increases, and a debt restructuring deal that incorporates renewed economic assistance from Europe. Tsipras has been working to complete the previous government’s austerity commitments, without any guarantee of a meaningful debt reprieve in the future.

Yet on Monday, he crossed his own previous red lines and offered a round of fresh austerity measures worth 7.9 billion euros ($8.9 billion) — the largest to date — which in turn prompted mass protests at home.

Crafted by the Greeks, an agreement seemed close at hand, but was nevertheless rejected by the International Monetary Fund and Greece’s euro partners at the European Commission and European Central Bank. The fiscal tightening that is currently being discussed is on the order of 2 to 3 percent of gross domestic product (GDP), comparable to that at the peak of the crisis in 2010.

Read the rest of the post here.

Modern Monetary Theory

Pavlina R. Tcherneva

Pondering here from my academic station
Why has never before such a simple observation
Caused more confusion and consternation
Amongst the general population

That the government is the currency-issuing monopolist
Is not a radical idea, nor a hypothesis
It is a simple, nay, elementary fact
That is often so fervently attacked

IT conjures fears of hyperinflation
The dread of every civilized nation
A crippling phobia that stunts our facilities
To rationally think about the economic possibilities

Pundits, economists, and the average bloke
Firmly believe that the U.S. government is broke
And defend this dreadful and deadly mythology
“There Is NO Alternative,” they say, without an apology

Inequality, retirement insecurity, mass unemployment
Environmental blight, pay gap, and other disappointments
Are no longer problems intractable, alarming and eerie
With a brief introduction to Modern Monetary Theory

©March 31, 2015

What’s Wrong with David Leonhardt’s NYT Piece on Inequality?

By Pavlina Tcherneva

The New York Times made waves this week with another piece on inequality, saying that it has not risen since 2007. The article was based on this paper by GWU’s Stephen Rose.

The article also suggests that expansions are not a good way of looking at trends in inequality (as I have done in the past, also covered by the NYT). Instead, one needs to look at the business cycle. It also concludes that, thankfully, because of government tax and transfer policies, inequality has not been “that bad” over the last few years and governments can clearly do something about it.

So what’s wrong with this picture?

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Greece wants to save Europe, but can it persuade Europeans?

By Pavlina Tcherneva
Cross posted from aljazeera.com

Most analysis of the Greek debt crisis ignores an important reality: While Greece may be the villain du jour, every eurozone nation is profoundly short of cash. That’s because of a well-acknowledged, but not fully appreciated, flaw at the heart of eurozone financial architecture that converted a historically unprecedented number of nations from issuers of their own currency to users of a common currency.

Greece is simply the first country to experience the extreme consequences of that loss of monetary sovereignty. With no independent source of funding, no currency of its own, no central bank to guarantee its government liabilities, it has had to ask others for help. And as a condition for securing that help, Greece has until now been forced to consent to radical austerity policies.

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Interviews with NEP’s Pavlina Tcherneva

NEP’s Pavlina Tcherneva has made a couple of appearances recently discussing President Obama’s State of the Union and tax proposals with an emphasis on inequality.

Appeared 1/21/15 on the Wall Street Journal Live with Sara Murray. You can view here. Discussion topic was an analysis of Obama’s tax plan.

Appeared 1/27/15 with Tim Farley on Morning Briefing, POTUS Politics, Sirius XM (radio). You can listen here.  

Grasping at straws and more trickery from Forbes’ Scott Winship

By Pavlina Tcherneva (revised 10/10/14)

Winship has produced a rambling and insulting retort to a very thorough and thoughtful response to his false critique of my original inequality chart.

Here are my brief replies to his last post.

  1. Let me say it again. His business cycle chart is incorrect.  One cannot make any sense of what is happening to the distribution of income growth over time by the way he reports his periods. To use his own words, it does not “convey history correctly”.

You can be the judge of whose method is better (his or mine) in calculating the business cycles, but even if you use his method, his results are wrong. See herewhere I present two business cycle charts (using both methods). Both methods yield completely different and more depressing trends than in his chart. It is unclear how he’s chosen his periods.

In a very disingenuous way, Winship, passes the hot potato and implicates Saez and Piketty in his own error, arguing that they do the same thing in Table 1 here. This is incorrect. Saez and Piketty’s table shows one whole time period and then several discrete periodsof various recessions and expansions and, unlike Winship, they have identified their expansions and recessions correctly. They do not report the history of all business cycles (go ahead, check).

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The Lower Unemployment Rate is a Recovery – for the Top 10%

NEP’s Pavlina Tcherneva appears on The Real News on October 5, 2014. The topic of discussion is the slow recovery and why monetary policy that is directed at finance and not job creation has this effect.