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      Coronavirus sharpens America's already stark economic inequalities

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      [embedded content]
      Walter Almendarez doubts there will be any presents beneath his artificial Christmas tree – not for his daughter, his nephews or anyone else.
      Back in March, Almendarez reread an email over and over again, trying to process the news that he had just been let go from Los Angeles’s Chateau Marmont, where he had worked for over two decades. He was among more than 200 people fired by the swanky hotel in one fell swoop.
      “It was just terrible, the way they did it,” he said.
      Widespread local shutdowns made finding a new job practically impossible, and soon, he used up his 401(k) retirement savings just trying to pay the bills.
      Like Almendarez, tens of millions of people across America are struggling to make ends meet in an economy devastated by the impact of efforts to control the coronavirus pandemic. Yet at the same time millions of other Americans are enjoying an end-of-year spending spree. The National Retail Federation is projecting that holiday sales will jump between 3.6 and 5.2% this year compared with 2019, with consumers collectively spending well over $750bn.
      Those startling discrepancies represent a stark example of how the pandemic has exacerbated America’s already chronic inequalities, amid a widespread awakening to the country’s deep-rooted problems with economic and racial injustice.
      “It is definitely something that has increased disparities between white and Black, between those well-off and less well-off – high wage, low wage. All of those things have been absolutely pulling apart,” said Elise Gould, a senior economist at the Economic Policy Institute (EPI).
      During the pandemic, 651 billionaires have accrued more than $1tn in additional wealth – enough to send every American a $3,000 check and then some. But so far, that prosperity has not trickled down to 26.1 million US workers, who in November were still wrestling with direct impacts from the economic downturn, including unemployment and drops in pay.
      Those hardships have disproportionately fallen on Black and brown people, who were less likely to be able to work from home even pre-pandemic. In the third quarter of 2020, the unemployment rates for Black people and Latinos were 13.2% and 11.2% respectively, compared with 7.9% for white people.
      The slowdown has also caused a “shecession” for women, especially women of color, who have been overburdened with caretaking responsibilities while simultaneously watching their industries flounder.
      As Americans struggle to pay rent or buy food, “the worst suffering” people can experience “could really be heading for us as we go into the end of the year”, warned Amanda Fischer, policy director at the Washington Center for Equitable Growth, a research and grant-making non-profit.
      Early into the pandemic, Congress’s Cares Act, which provided $2.2tn in coronavirus aid, proved “one of the most effective anti-poverty tools we’ve seen in American history”, Fischer said. But those provisions were only temporary, and once they vanished, vehicles lined up outside food banks while renters fell months behind on their bills.
      Then, when the US economy started to rebound, it did so through a “K-shaped” recovery, benefiting the rich and leaving behind almost everyone else. The stock market – where about 80% of wealth has historically been owned by the top 10% of households – continued to surge, and CEOs projected widespread confidence in the economy, despite many of them expecting to reduce their workforce and let wages stagnate.
      High earners also fared well, with the employment rate for those making over $60,000 eventually eclipsing what it had been near the beginning of 2020, according to not-for-profit organization Opportunity Insights. More

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      Trickle-down economics doesn't work but build-up does – is Biden listening? | Robert Reich

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      How should the huge financial costs of the pandemic be paid for, as well as the other deferred needs of society after this annus horribilis?Politicians rarely want to raise taxes on the rich. Joe Biden promised to do so but a closely divided Congress is already balking.That’s because they’ve bought into one of the most dangerous of all economic ideas: that economic growth requires the rich to become even richer. Rubbish.Economist John Kenneth Galbraith once dubbed it the “horse and sparrow” theory: “If you feed the horse enough oats, some will pass through to the road for the sparrows.”We know it as trickle-down economics.In a new study, David Hope of the London School of Economics and Julian Limberg of King’s College London lay waste to the theory. They reviewed data over the last half-century in advanced economies and found that tax cuts for the rich widened inequality without having any significant effect on jobs or growth. Nothing trickled down.Meanwhile, the rich have become far richer. Since the start of the pandemic, just 651 American billionaires have gained $1tn of wealth. With this windfall they could send a $3,000 check to every person in America and still be as rich as they were before the pandemic. Don’t hold your breath.You don’t need a doctorate in ethical philosophy to think that now might be a good time to redistribute some of richesStock markets have been hitting record highs. More initial public stock offerings have been launched this year than in over two decades. A wave of hi-tech IPOs has delivered gushers of money to Silicon Valley investors, founders and employees.Oh, and tax rates are historically low.Yet at the same time, more than 20 million Americans are jobless, 8 million have fallen into poverty, 19 million are at risk of eviction and 26 million are going hungry. Mainstream economists are already talking about a “K-shaped” recovery – the better-off reaping most gains while the bottom half continue to slide.You don’t need a doctorate in ethical philosophy to think that now might be a good time to tax and redistribute some of the top’s riches to the hard-hit below. The UK is already considering an emergency tax on wealth.The president-elect has rejected a wealth tax, but maybe he should be even more ambitious and seek to change economic thinking altogether.The practical alternative to trickle-down economics might be called build-up economics. Not only should the rich pay for today’s devastating crisis but they should also invest in the public’s long-term wellbeing. The rich themselves would benefit from doing so, as would everyone else.At one time, America’s major political parties were on the way to embodying these two theories. Speaking to the Democratic national convention in 1896, populist William Jennings Bryan noted: “There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.”Build-up economics reached its zenith in the decades after the second world war, when the richest Americans paid a marginal income tax rate of between 70% and 90%. That revenue helped fund massive investment in infrastructure, education, health and basic research – creating the largest and most productive middle class the world had ever seen.But starting in the 1980s, America retreated from public investment. The result is crumbling infrastructure, inadequate schools, wildly dysfunctional healthcare and public health systems and a shrinking core of basic research. Productivity has plummeted.Yet we know public investment pays off. Studies show an average return on infrastructure investment of $1.92 for every public dollar invested, and a return on early childhood education of between 10% and 16% – with 80% of the benefits going to the general public.The Covid vaccine reveals the importance of investments in public health, and the pandemic shows how everyone’s health affects everyone else’s. Yet 37 million Americans still have no health insurance. A study in the Lancet estimates Medicare for All would prevent 68,000 unnecessary deaths each year, while saving money.If we don’t launch something as bold as a Green New Deal, we’ll spend trillions coping with ever more damaging hurricanes, wildfires, floods and rising sea levels.The returns from these and other public investments are huge. The costs of not making them are astronomical.Trickle-down economics is a cruel hoax, while the benefits of build-up economics are real. At this juncture, between a global pandemic and the promise of a post-pandemic world, and between the administrations of Trump and Biden, we would be well-served by changing the economic paradigm from trickle down to build up. More

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      After the Trump years, how will Biden help the 140 million Americans in poverty? | Mary O'Hara

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      After four punch-drunk years of Donald Trump, the weeks since the November presidential election have presented a chance, despite his machinations to overturn the result, to reflect on what might come next for the tens of millions of Americans struggling to get by. What lies around the corner after the departure of an administration that brought so much destruction matters to the lives of the least well-off and marginalised people?
      President-elect Joe Biden sought to reassure people that he was on the case when he announced his top economic team last week. “Our message to everybody struggling right now is this: help is on the way,” he said, offering a steady economic hand to a weary public rattled by the virus and an unprecedented economic crisis.
      Many people are simply so relieved that Biden and Harris won that they talk about “getting back to normal” after the chaos. That’s an understandable reaction given all that’s transpired. However, getting back to normal isn’t an option. Nor should it be the goal. When Trump took power, around 140 million Americans were either poor or on low incomes even without a pandemic – a staggering proportion.
      For decades the wages of those at the top soared while paychecks for those at the bottom flatlined. Gender and racial income and wealth disparities endure. Despite widespread support for boosting minimum earnings, the federal minimum wage of $7.25 hasn’t been increased since 2009. Roughly 60% of wealth in the US is estimated to be inherited. And, as if this wasn’t enough to contend with, in 2020 billionaire wealth surged past $1tn since the start of the pandemic. The Institute for Policy Studies (IPS) calculates that the wealth of Amazon’s Jeff Bezos alone leapt by almost $70bn to a colossal $188.3bn as the year draws to a close.
      Over the past four years I asked myself frequently what another term of the Trump wrecking ball would mean for the people at the sharp end of regressive policies and a reckless disregard for the most vulnerable in society. Thankfully, that is no longer the question. The question now is: after all the carnage, what next?
      So far, indications are that Biden and his team recognise that as well as confronting the gargantuan challenges unleashed by Covid-19, longstanding inequities cannot be left unchecked. The presidential campaign was calibrated to highlight this, including around racial injustices. Overtures have been made, for example, on areas championed by progressives such as forgiving loan debt for many students and expanding access to Medicare. Biden has also pledged to strengthen unions and, well before the pandemic during his first campaign speech, endorsed increasing the federal minimum wage to $15.
      Even in the face of unparalleled challenges – and while a lot rides on a Democratic win in the two Georgia Senate run-offs in January – Biden could and should “use all the tools” at a president’s disposal to shift the dial quickly, says Sarah Anderson, director of the Global Economy Project at the IPS. Examples include placing conditions on workers’ pay for companies bidding for federal contracts and leveraging the presidential “bully pulpit” to try to push proposals such as a minimum wage hike through the Senate.
      There is also a genuine opportunity for the new administration to spearhead a concerted focus on policies affecting more than 61 million Americans who are disabled – a group all too often ignored in presidential campaigns and sidelined in policy. Biden’s disability plan makes for a comprehensive read. Off the bat, if the new administration takes steps to overturn the “abject neglect of disability rights enforcement” under Trump in areas ranging from education to housing it would be off to a good start, argues Rebecca Cokley, director of the disability justice initiative at the Center for American Progress.
      The pandemic is the most pressing challenge facing the incoming administration. However, structural inequalities, the people lining up at food banks, the children going hungry or homeless, historic injustices and the out-of-control concentration of wealth, must also be priorities. Right now, the US at least has a chance to finally put some of this right. However in the UK, with the end of the Brexit transition period looming and the chancellor under pressure to fend off accusations that another dose of austerity isn’t on the way, it’s a whole different story. The lessons in both countries from past mistakes – ones that harm those most in need – must be learned.
      • Mary O’Hara is a journalist and author. Her latest book, The Shame Game: Overturning the toxic poverty narrative, is published by Policy Press. She was named best foreign columnist 2020 by the Southern California Journalism Awards More

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      'Right now, I'm in panic mode': US freelancers plead with Congress to pass Covid relief

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      Suzy Young, an artist in Winterport, Maine, cheered when Congress enacted an innovative program that provided unemployment benefits to artists, freelancers and the self-employed after Covid-19 hit the US. But like many others, Young – whose art sales have plunged in recent months – is angry that this pandemic aid program is due to expire the day after Christmas.Young was already upset that the most generous part of the program – $600 a week in supplemental jobless benefits – expired in July, but now she fears she will lose all her jobless benefits. Four months behind on her $1,800 rent, she is fighting her landlord’s effort to evict her and her disabled husband on 1 January.“Congress needs to do something, or a lot of people are going to face homelessness,” said Young, 58. A fiber artist who weaves works out of wool, Young saw her income disappear when the farmers market where she sold her work was closed due to the lockdown. “That killed my business,” she said. She was getting by while receiving the $600 weekly supplement, but once that disappeared, her unemployment benefits fell to $172 a week.A study by the Century Foundation estimates that 7.3 million freelancers, artists, self-employed and others will lose their weekly benefits if the Pandemic Unemployment Assistance program (known as PUA) expires, as scheduled, after Christmas. That program is unusual because jobless benefits traditionally go only to laid-off workers who are considered employees – and not to freelancers or the self-employed. A second program – Pandemic Emergency Unemployment Compensation – is also scheduled to expire 26 December, ending special federal benefits for 4.6 million laid-off workers who were considered employees.“A lot of these people [freelancers and the self-employed] were out of work, and not eligible for regular unemployment benefits,” said Andrew Stettner, a senior fellow at the Century Foundation. “This program has been really successful. These people really need this bridge until the economy gets back to a better place.” After the $600 benefit supplement expired in July, freelancers and the self-employed continued receiving regular unemployment benefits, but the average nationwide for them has been just $207 a week, although it’s two or three times that in some states.Last Tuesday, a bipartisan group of nine senators proposed a $908bn stimulus and relief package that included a $300 weekly jobless supplement, half the former $600. The senators said their plan “would increase unemployment benefits to help families make ends meet”. That same day, five Democratic senators, including the minority leader, Chuck Schumer, proposed a relief plan that would restore the $600 boost in benefits as well as extend normal jobless benefits by 26 weeks. The Senate majority leader, Mitch McConnell, threw cold water on the bipartisan plan, saying: “We just don’t have time to waste time.”Rafael Espinal, president of the 500,000-member Freelancers Union, said the senators’ $300-a-week proposal was inadequate. “Considering the cost of living in cities, $300 isn’t going to allow people to pay their rent or meet other demands.”Grant McDonald, a New York-based video director who films concerts and special events, has had little work since March and worries about PUA expiring. “It’s pretty drastic sitting here, waiting for my savings to run out,” he said. McDonald fears he will soon fall behind on his rent; he may then move in with his father.“I have worked very hard to build a career in this city,” McDonald said, worried that leaving New York will set back his career.McDonald and Stephanie Freed, who lights fashion shows and other special events, founded ExtendPUA, a group that has lobbied dozens of senators and representatives to extend pandemic assistance and restore the $600 supplement. Many Republicans oppose the $600 level, saying it costs too much and discourages people from seeking work.We need to help people out here from starving. We need Congress to hear us, we’re in the worst placeBut ExtendPUA argues that it’s not wise to press people to look for work when the pandemic is raging or when skilled people with long careers, on Broadway, for instance, have little idea when they’ll return to regular work.“Any economist will say you don’t want skilled people to give up their work and not be able to get back to what they’ve given up,” Stettner said. “We can see that the vaccine will make everything better, and if we can just extend these benefits a little longer, it will make a big difference for a lot of people. If you lose your car or get evicted, those are not easy things to recover from.”Steve Gregg stopped working as an Uber driver in San Francisco after Covid-19 hit – he has diabetes and lung problems. Greg said the $600 supplement, on top of his $450 in regular weekly jobless benefits, “saved me, I would have lost my home”. But with the $600 expired, Gregg, divorced and paying child support, has moved into a single room in Modesto he shares with a cousin. “If they want us not to be homeless, they better pass something,” Gregg said. “I have no flexibility. I’ve cut back on many things.”Friends tell Gregg he has an extraordinary voice and should do TV voiceovers, but he doesn’t have the several hundred dollars to go to a studio to prepare a proper sample recording.Shan Grimm, a guitarist for jazz and R&B bands in New Orleans, fears she and her daughter will be evicted once the moratorium on evictions ends. She receives $247 a week in jobless benefits, but her rent is $850 a month, her car insurance $193 and her phone $60. “I’m trying to figure out what I’m going to do, where I’m going to go,” said Grimm, who also worked as a bartender. “Even $300 a week would make a big difference. Right now, I’m in panic mode. I have $107 in my bank account. I’ve been eating once a day.”“We are the people and Congress needs to hear us,” Grimm added. “We need to help people out here from starving. We need Congress to hear us, we’re in the worst place.” More

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      Joe Biden's economic team beats Trump's goon squad – but it faces a steep challenge | Robert Reich

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      “It’s time we address the structural inequalities in our economy that the pandemic has laid bare,” President-elect Joe Biden said this week, as he introduced his economic team.It’s a good team. They’re competent and they care, in sharp contrast to Trump’s goon squad. Many of them were in the trenches with Biden and Barack Obama in 2009, when the economy last needed rescuing.But reversing “structural inequalities” is a fundamentally different challenge from reversing economic downturns. They may overlap – last week the Dow Jones Industrial Average hit a record high at the same time Americans experienced the highest rate of hunger in 22 years. Yet the problem of widening inequality is distinct from the problem of recession.Recessions are caused by sudden drops in demand for goods and services, as occurred in February and March when the pandemic began. Pulling out of a recession usually requires low interest rates and enough government spending to jump-start private spending. This one will also necessitate the successful inoculation of millions against Covid-19.By contrast, structural inequalities are caused by a lopsided allocation of power. Wealth and power are inseparable – wealth flows from power and power from wealth. That means reversing structural inequalities requires altering the distribution of power.Franklin D Roosevelt did this in the 1930s, when he enacted legislation requiring employers to bargain with unionized employees. Lyndon Johnson did it in the 1960s with the Civil Rights and Voting Rights Acts, which increased the political power of Black people.Since then, though, not even Democratic presidents have tried to alter the distribution of power in America. They and their economic teams have focused instead on jobs and growth. In consequence, inequality has continued to widen – during both recessions and expansions.For the last 40 years, hourly wages have stagnated and almost all economic gains have gone to the top. The stock market’s meteoric rise has benefited the wealthy at the expense of wage earners. The richest 1% of US households now own 50% of the value of stocks held by Americans. The richest 10%, 92%.Why have recent Democratic presidents been reluctant to take on structural inequality?First, because they have taken office during deep recessions, which posed a more immediate challenge. The initial task facing Biden will be to restore jobs, requiring that his administration contain Covid-19 and get a major stimulus bill through Congress. Biden has said any stimulus bill passed in the lame-duck session will be “just the start”.Second, it’s because politicians’ time horizons rarely extend beyond the next election. Reallocating power can take years. Union membership didn’t expand significantly until more than a decade after FDR’s Wagner Act. Black voters didn’t emerge as a major force in American politics until a half-century after LBJ’s landmark legislation.Third, reallocating power is hugely difficult. Economic expansions can be a positive-sum game because growth enables those at the bottom to do somewhat better even if those at the top do far better. But power is a zero-sum game. The more of it held by those at the top, the less held by others. And those at the top won’t relinquish it without a fight. Both FDR and LBJ won at significant political cost.Today’s corporate leaders are happy to support stimulus bills, not because they give a fig about unemployment but because more jobs mean higher profits.“Is it $2.2tn, $1.5tn?” JP Morgan chief executive Jamie Dimon said recently in support of congressional action. “Just split the baby and move on.”But Dimon and his ilk will doubtless continue to fight any encroachments on their power and wealth. They will battle antitrust enforcement against their giant corporations, including Dimon’s “too big to fail” bank. They’re dead set against stronger unions and will resist attempts to put workers on their boards.They will oppose substantial tax hikes to finance trillions of dollars of spending on education, infrastructure and a Green New Deal. And they don’t want campaign finance reforms or any other measures that would dampen the influence of big money in politics.Even if the Senate flips to the Democrats on 5 January, therefore, these three impediments may discourage Biden from tackling structural inequality.This doesn’t make the objective any less important or even less feasible. It means only that, as a practical matter, the responsibility for summoning the political will to reverse inequality will fall to lower-income Americans of whatever race, progressives and their political allies. They will need to organize, mobilize and put sufficient pressure on Biden and other elected leaders to act. As it was in the time of FDR and LBJ, power is redistributed only when those without it demand it. More

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      Jobs slump and Covid lead litany of post-Trump crises facing Janet Yellen

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      Of all the 78 US Treasury secretaries since Alexander Hamilton first took up the office in 1789, few have faced an in-tray piled quite so high as the one that will greet the first woman in the job: Janet Yellen.The choice of the Brooklyn-born doctor’s daughter to succeed Steve Mnuchin was a statement of intent by president-elect Joe Biden. Where many of her predecessors have been scions of Wall Street, Yellen’s background is in economics and public policy, and she has made it clear that her priorities are with Americans struggling to get by rather than with investment bankers. “There is a huge amount of suffering out there,” she said in September as she urged Congress to agree a new stimulus package.Yellen’s expressed desire for tighter financial regulation did not, however, stop Wall Street from joining the applause for her nomination. In part, that was due to the fact that, having been the first woman to be in charge of America’s central bank, she is seen as a seasoned pro. Donald Trump declined to give her a second term as chair of the Federal Reserve in 2018 not because she was doing a bad job, but because she was a Democrat appointed by Barack Obama.More importantly, though, Wall Street sees Yellen as a Treasury secretary who will push hard for expansionary policies aimed at boosting growth, profits and share prices. Nothing in her record suggests that the financiers are wrong.American economists are often divided into two camps: “freshwater” economists who believe in the primacy of market forces and whose spiritual home is the University of Chicago in landlocked Illinois; and “saltwater” economists, who emanate from the universities on the Atlantic and Pacific seaboards and admire the teachings of John Maynard Keynes.Yellen is a Keynesian to her fingertips: she warned against an over-hasty removal of stimulus during the financial crisis of a decade ago; she insisted that the Fed pay as much attention to unemployment as to inflation when she was its chair; and she believes the state has a duty to tackle poverty and inequality.Mohamed El-Erian, once chief executive of the investment management firm Pimco but now president of Queens’ College, Cambridge, said: “The appointment was probably one of the most well-received in the history of the US Treasury, and for good reason. Economists, lawmakers and market participants rightly see her as highly qualified, having lots of relevant experience and coming to the job with a deep understanding of both domestic and international issues. The policy portfolio she inherits will require an agile mix of traditional and out-of-the-box thinking.”Top of the to-do list will be a new package of support for a US economy struggling with three interlinked problems: a pandemic, high levels of unemployment, and the imminent expiry of financial support for laid-off workers.The jobless total has come down since surging to levels not seen since the Great Depression in the first wave of infections in the spring, but remains troublingly high for a country with, by western standards, a limited welfare safety net. What’s more, the latest data on Friday showed the rate of job creation slowing.Biden wants Congress to pass a “robust” stimulus package, and the chances of that happening will be greatly improved if the Democrats seize control of the Senate by winning the two vacant seats in Georgia next month. If not, as Mark Sobel of the Omfif thinktank says, Biden will be dealing with a “stingy” Republican Senate leader, Mitch McConnell.The appointment was probably one of the most well received in the history of the US Treasury“Yellen will help negotiate and provide intellectual backing, making the case that now is the time to spend and that with low debt service costs, America should not fret in the near-term about rising debt,” Sobel says.Getting an emergency package of stimulus through Congress will only be the start of the legislative battle, because Biden also wants to spend more on upgrading America’s crumbling infrastructure and on tackling global heating.Yellen’s scope for fiscal action (tax and spending measures) may be limited by gridlock in Congress, in which case the White House will require the Fed to provide more stimulus and a good working relationship between Yellen and the man who succeeded her as head of the central bank, Jerome Powell.While sorting out the labour market and boosting living standards will be the biggest challenge, Yellen will also devote time to other policy issues. She has the executive power to toughen up what she sees as too-weak financial regulation without Congress’s say so; she will adopt a less hostile – if still robust – approach towards China; and she will seek to reassert US leadership on the global stage, pursuing a multilateralist rather than a go-it-alone approach.In all, Yellen can be expected to act as if Trump’s four years in office never happened. The message will be that the grownups are back in charge.Six central bankers who shaped the future of their economiesBen Bernanke Chair of the US Federal Reserve between 2006 and 2014, Bernanke was credited with preventing a deep recession following the 2008 financial crisis. A student of the 1930s Great Depression, he vowed to rescue the banking system and maintain the flow of funds to prevent a wave of foreclosures and mass unemployment.His determination contrasted with the Bank of England, which hesitated before rescuing Northern Rock. However, Bernanke, a former Princeton professor, played down the threat from the US sub-prime mortgage scandal during the first two years of his tenure, which he has admitted made the crisis, when it came, much worse.Karl Otto Pöhl Often dubbed a father of the euro, Pöhl was appointed president of the German Bundesbank from 1980 to 1991 by his friend and mentor, chancellor Helmut Schmidt. A colourful, English-speaking former economics journalist, he came to prominence after the conservative Helmut Kohl surprised many and reappointed him. He famously warned Kohl against rushing ahead with German unification based on a one-to-one valuation of the east German mark with its West German equivalent, fearing the collapse of the east’s uncompetitive export industries. He said the same about the implementation of the euro. Kohl ignored him. East Germany’s industrial base collapsed. After the 2008 financial crisis, southern Europe erupted in riots, with protesters blaming the euro for their ills.Mario Draghi If Pöhl laid the foundation stones for the euro, Draghi prevented the currency from toppling over. In 2012, after campaigns in several member states to quit the euro – notably in Greece and Italy – triggered panic in financial markets, he said the single currency was “irreversible” and famously pledged to do “whatever it takes” to save it.As president of the European Central Bank from 2011 to 2019, which absorbed most of the powers from 19 member states’ central banks on its creation in 1999, he drew a line under the destabilising debate about the currency’s future. After he stepped down, the Nobel prize-winning economist Paul Krugman described him as “[arguably] the greatest central banker of modern times”.Mark Carney Carney was governor of the Bank of England from 2013 to March this year. He was appointed by the chancellor at the time, George Osborne, who courted him for a year and called the former Goldman Sachs banker and head of Canada’s central bank “the outstanding central banker of his generation”. Yet within a year, he was likened to an “unreliable boyfriend” who failed to match his promises with action. This followed a series of overly optimistic forecasts that led many to prepare for an increase in interest rates that never came. Carney, more polished and dapper than his contemporaries, recovered much of his reputation in 2016 when he was dubbed “the only adult in the room” following the Brexit referendum. While parliament went into shock and No 10 was consumed by the resignation of David Cameron, Carney toured the TV and radio stations, calming fraying nerves.Raghuram Rajan The Chicago Booth economics professor is often described as one of the few economists to predict the financial crisis. In a speech in 2005 to the world’s top central bankers he explained that an explosion of borrowing made financial markets more dangerous. At the time he was chief economist at the International Monetary Fund, so he might have expected his warning that “it’s possible these developments are creating a greater (albeit still small) probability of a catastrophic meltdown” would be taken seriously. It wasn’t.He took over as governor of India’s central bank in 2013 after warning that the country was suffering from hubris, adding that “growth can never be taken for granted” and that “self-delusion is the first step towards disaster”. The rupee, which tumbled 12% against the dollar in the three months before his arrival, stabilised. By the time he left in 2016, price inflation had fallen from almost 10% to below 4% and a series of banking reforms were in place.Christine Lagarde As president of the European Central Bank since last year, Lagarde has shown she is a would-be central bank hero. Shifting the dial at an institution covering 19 countries is never easy, but the former boss of the IMF has embarked on a campaign for greater transparency in a break from the traditionally closeted bank’s decision-making, and for unemployment and inequality to be as much of a yardstick for the ECB as inflation. She has also matched Carney in the drive to make central bank lending more climate-friendly, with green bonds that only allow loans to businesses that are environmentally friendly. PI More

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      'Move with urgency': Joe Biden's economic team in their own words

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      Joe Biden’s incoming economic team is filled with firsts. The lineup that the incoming president introduced this week will, if approved, place women and people of color at the controls of the US economy during one of the darkest periods in recent history.
      While the team is historic, it also faces a historic challenge. Unemployment has fallen dramatically since the early days of the coronavirus pandemic. It fell to 6.7% in November. But it remains 3.2 percentage points above its level before Covid-19 struck, jobs growth is slowing sharply, long-term unemployment is growing and people of color are still suffering hardship at far higher levels than white Americans.
      The pandemic has also exacerbated already worrying levels of income inequality, and across the US, shocking lines are forming at food banks as the country’s already frayed social safety net collapses.
      Congress has been deadlocked on a new round of stimulus money for months. A compromise now seems to be in the works but will come too late for many.
      The future looks difficult too. The US now has a $21.2tn national debt – up from $14.4tn on the day Donald Trump was inaugurated. Republicans, who helped fuel that enormous rise, are now talking about the need for fiscal responsibility.
      Biden’s team is strong on progressive talk. Its members have championed the need for more government intervention, greater equality and a stronger safety net. A look at the team’s own words shows just how ambitiously they are thinking.
      Whether they can achieve those goals looks set to hang on two crucial Senate races in Georgia in January that will decide who controls the Senate.
      Janet Yellen, treasury secretary
      The first woman to head the Treasury if confirmed, Yellen has had a long and distinguished career and was the first woman to head the Federal Reserve.
      This week Yellen called the pandemic recession “an American tragedy” and said: “It’s essential that we move with urgency.”
      An expert on labor markets, she has long highlighted income inequality and its disproportionate impact on people of color in the US. “There really is a new kind of recognition that you’ve got a society where capitalism is beginning to run amok and needs to be readjusted,” she told Reuters recently.
      In a 2014 speech, she said: “The extent of and continuing increase in inequality in the United States greatly concern me.” Yellen noted: “The distribution of income and wealth in the United States has been widening more or less steadily for several decades, to a greater extent than in most advanced countries.”
      But her long-term views on the nation’s debts have some progressives worried that she may look to cut welfare programs once Covid-19 is, finally, behind us. “The US debt path is completely unsustainable under current tax and spending plans,” she said in February.
      Neera Tanden, head the Office of Management and Budget (OMB)
      The president of the left-leaning Center for American Progress will be the first woman of color to head the OMB if she is confirmed. But Republicans, angered by her partisan tweets, have said she stands “zero chance” of being approved if they keep control of the Senate.

      Neera Tanden
      (@neeratanden)
      Imagine a world where Mitch McConnell is not in the Senate. Now let’s go make that happen. https://t.co/iOwO3GgDf1

      February 13, 2019

      Her India-born mother, Maya, relied on food stamps and other government programs to raise her children after her divorce and Tanden is a strong supporter of a better social safety net.
      “I’m here today thanks to my mother’s grit, but also thanks to a country that had faith in us, that invested in her humanity, and in our dreams,” she said this week.
      The OMB is the largest office within the executive office of the president and oversees the development and implementation of the federal budget. Her priorities are unmistakable.
      “Budgets are not abstractions,” Tanden said. “They are a reflection of our values. They touch our lives in profound ways and sometimes they make all the difference.”
      Adewale ‘Wally’ Adeyemo, deputy treasury secretary
      If confirmed, Nigerian-born Adeyemo will be the first Black person to serve as deputy Treasury secretary.
      “Public service is about offering hope through the dark times and making sure that our economy works not just for the wealthy, but for the hard-working people who make it run,” he wrote on Twitter this week.
      Like Yellen he has emphasized the need to address income inequality. “In California’s Inland Empire, where I had grown up in a working-class neighborhood, the Great Recession hit us hard,” he said this week. “We were one of the foreclosure capitals of the United States. The pain of this was real for me.”
      But his work as a senior adviser to BlackRock, the world’s largest asset manager, and past positions calling for “avoiding protectionism” and asserting the need to join the Trans-Pacific Partnership trade deal are likely to cause problems with progressive Democrats and even many Republicans in the post-Trump era.
      Cecilia Rouse, chair of the Council of Economic Advisers
      Another first, Rouse will be the first Black chair of the Council of Economic Advisers if she is confirmed.
      Currently dean of the Princeton School of Public and International Affairs, Rouse is another expert in labor markets. Among her most famous research papers is a study of sexism in auditions and hiring for symphony orchestras.
      An expert on the impact of education on the labor force and long-term unemployment, Rouse has also championed paid sick leave. Last year, nearly 34 million workers – about a quarter of the US workforce – lacked paid sick leave.
      While supportive of the private sector, she recently wrote that the pandemic had exposed “a ‘Franken-system’ of support that is inadequate, costly, unnecessarily bureaucratic, and ultimately not trusted by many Americans”. More

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      'Help is on the way,' says Joe Biden as he announces new economic team – video

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      US president-elect Joe Biden has formally introduced his choices for top economic advisers. ‘Our message to everybody struggling right now is this: help is on the way,’ Biden said. Biden’s nominations would put several women in top economic roles, including Janet Yellen, who if confirmed by the Senate would be the first woman to lead the US treasury in its 231-year history.  Yellen said the economic impact of the pandemic was ‘an American tragedy’
      ‘Help is on the way’: Joe Biden introduces economic team as pandemic rages
      Bipartisan group pitches $908bn Covid-19 relief to break deadlock in Congress More