Read more at the Levy Institute.

For evidence, look no further than Apple’s decision to borrow a whopping $17 billion and turn it over to its investors in the form of dividends and stock buy-backs.

Apple is already sitting on $145 billion. But with interest rates so low, it’s cheaper to borrow. This also lets Apple avoid U.S. taxes on its cash horde socked away overseas where taxes are lower.

Other big companies are doing much the same on a smaller scale.

Who gains from all this? The richest 10 percent of Americans who own 90 percent of all shares of stock.

But little or nothing is trickling down. The average American can’t borrow at nearly the low rates Apple or any other big company can. Most Americans no longer have a credit rating that allows them to borrow much of anything.

Read more at Huffington Post

How Roosevelt took this fateful step has been the subject of debate among historians, many of whom believe that the president flailed his way through his first weeks in office, and only gradually came to the decision to take the country off gold that April. But the evidence suggests that Roosevelt intended to do so from Day One for very specific reasons, although he delayed letting the rest of the country in on his plans.

Minutes after FDR had made his unsettling private disclosure, a secretary told him that reporters were clamoring to know if the U.S. had left the gold standard. “Tell them to ask a banker,” Roosevelt said. He clearly did not yet wish to say the truth publicly. First, he needed depositors to return the gold they had withdrawn in panic in the weeks preceding his inauguration.

Read more at Bloomberg.

Dr. Roubini has extensive policy experience as well as broad academic credentials. From 1998 to 2000, he served as the senior economist for international affairs on the White House Council of Economic Advisors and then as the senior advisor to the undersecretary for international affairs at the U.S. Treasury Department, helping to resolve the Asian and global financial crises. The International Monetary Fund, World Bank and numerous other prominent public and private institutions have drawn upon his consulting expertise.

He has published over 70 theoretical, empirical and policy papers on international macroeconomic issues and coauthored the books “Political Cycles: Theory and Evidence” (MIT Press, 1997) and “Bailouts or Bail-ins? Responding to Financial Crises in Emerging Markets” (Institute for International Economics, 2004) and “Crisis Economics: A Crash Course in the Future of Finance” (Penguin Press, 2010).

Dr. Roubini’s views on global economic issues are widely cited by the media, and he is a frequent commentator on various business news programs. He has been the subject of extended profiles in the New York Times Magazine and other leading current-affairs publications. The Financial Times has provided extensive coverage of Dr. Roubini’s perspectives.

Naomi Klein’s first book No Logo: Taking Aim at the Brand Bullies released in 2000 was an international bestseller translated into over 25 languages with more than a million copies in print. The New York Times called it “a movement bible.” In 2011, Time Magazine named it as one of the Top 100 non-fiction books published since 1923. A tenth anniversary edition of No Logo was published worldwide in 2010. The Literary Review of Canada has named it one of the hundred most important Canadian books ever published. A collection of her writing, Fences and Windows: Dispatches from the Front Lines of the Globalization Debate was published in 2002. Naomi Klein is a contributing editor for Harper’s and reporter for Rolling Stone, and writes a regular column for The Nation and The Guardian that is syndicated internationally by The New York Times Syndicate. In 2004, her reporting from Iraq for Harper’s won the James Aronson Award for Social Justice Journalism. Additionally, her writing has appeared in The New York Times, The Washington Post, Newsweek, The Los Angeles Times, The Globe and Mail, El Pais, L’Espresso and The New Statesman, among many other publications.

He serves as Director of The Earth Institute at Columbia University, as well as Quetelet Professor of Sustainable Development and Health Policy and Management.  He is Special Advisor to United Nations Secretary-General Ban Ki-moon on the Millennium Development Goals, having held the same position under former UN Secretary-General Kofi Annan. He is co-founder and Chief Strategist of Millennium Promise Alliance, and is director of the Millennium Villages Project. He has authored three New York Times bestsellers in the past seven years: The End of Poverty (2005), Common Wealth: Economics for a Crowded Planet (2008), and The Price of Civilization (2011).

Professor Sachs is widely considered to be the world’s leading expert on economic development and the fight against poverty.  His work on ending poverty, promoting economic growth, fighting hunger and disease, and promoting sustainable environmental practices, has taken him to more than 125 countries with more than 90 percent of the world’s population.  For more than a quarter century he has advised dozens of heads of state and governments on economic strategy, in the Americas, Europe, Asia, Africa, and the Middle East.  He also advised Pope John Paul II on the encyclical Centesimus Annus. He works closely with international organizations including the African Union, the Asian Development Bank, the Inter-American Development Bank, the African Development Bank, the Islamic Development Bank, the World Health Organization, the United Nations Development Programme, the World Food Programme, UNAIDS, the Global Fund to Fight AIDS, TB, and Malaria, among others.

Professor Sachs’ work has been pivotal in many of the key junctures of globalization during the past thirty years.  In the 1980s he helped several Latin American countries including Bolivia, Brazil, and Peru to end hyperinflations and renegotiate their external debts.  He was the leading academic advocate in the United States for reducing the debt overhang of the developing countries and his ideas were incorporated in the global debt-reduction plans undertaken from the mid-1980s onward, including the Brady Plan and the HIPC Program.

In 1989, Professor Sachs advised Poland’s anti-communist Solidarity movement and the first post-communist Government of Prime Minister Tadeusz Mazowiecki.  He wrote the first-ever comprehensive plan for the transition from central planning to a market democracy, which became incorporated into Poland’s highly successful reform program led by Finance Minister Leszek Balcerowicz.  Professor Sachs was the main architect of Poland’s successful debt reduction operation.  The Government of Poland awarded Sachs with one of its highest honors in 1999, the Commanders Cross of the Order of Merit.  He also received an honorary doctorate from the Cracow University of Economics.

Sachs’s ideas and methods of transition from central planning were successfully adopted throughout the transition economies.  He helped Slovenia (1991) and Estonia (1992) to introduce new stable and convertible currencies.  Based on Poland’s success, he was invited first by Soviet President Mikhail Gorbachev and then by Russian President Boris Yeltsin on the transition to a market economy.  He served as advisor to Prime Minister Yegor Gaidar and Finance Minister Boris Federov during 1991-93 on macroeconomic policies.  He received the Leontief Medal of the Leontief Centre, St. Petersburg, for his contributions to Russia’s economic reforms.

From the mid-1990s till today, Prof. Sachs has been involved with economic reforms in many parts of Asia, including India and China.  He has been a senior advisor to the Indian Government, most recently on the scaling up of primary health care in rural areas (the National Rural Health Mission), a policy that he recommended and helped to promote through the Indian Commission on Macroeconomics and Health.  For his broad-based support of India’s economic reforms he was awarded the Padma Bhushan, one of India’s highest honors. He has similarly engaged with the Chinese Government on many issues of sustainable development, and during 2001-3 worked with senior government officials on China’s Western Development Strategy.  He has authored many scholarly and policy papers on India’s and China’s economic reforms.  Sachs has also worked in other parts of Asia on a number of development and research projects, including in Malaysia, Indonesia, Timor-Leste, Bangladesh, Bhutan, and others. He actively supports Bhutan’s innovative strategy of Gross National Happiness. He works with the Government of Jordan on a national program of poverty reduction and with the Government of Qatar on education and ICT initiatives throughout the Arab region.

Since 1995, Professor Sachs has been deeply engaged in Africa’s escape from poverty.  He has worked in more than two-dozen African countries, and has advised the African leadership at several African Union summits.  In the mid-1990s he worked with senior officials of the Clinton Administration to develop the concept of the African Growth and Opportunity Act (AGOA).  He has engaged with dozens of African leaders to promote smallholder agriculture and to fight high disease burdens through strengthened primary health systems.  His pioneering ideas on investing in health to break the poverty trap have been widely applied throughout the continent.  He currently serves as an advisor to several African governments, including Ethiopia, Ghana, Kenya, Malawi, Mali, Nigeria, Rwanda, Senegal, Tanzania, and Uganda, among others.

The Millennium Villages Project, which he directs, operates in more than one dozen African countries, and covers more than 500,000 people. The MVP has achieved notable successes in raising agricultural production, reducing children’s stunting, and cutting child mortality rates, with the results described in several peer-reviewed publications. Its key concepts of integrated rural development to achieve the MDGs are now being applied at national scale in Nigeria and Mali, and are being used by many other countries to help support national anti-poverty programs. He works very closely with the Islamic Development Bank to scale up programs of integrated rural development and sustainable agriculture among the Bank’s member countries. One such project supports pastoralist communities in the Horn of Africa, with six participating nations: Djibouti, Ethiopia, Somalia, Kenya, Uganda, and South Sudan.

Since the adoption of the Millennium Development Goals (MDGs) in 2000, Professor Sachs has been the leading academic scholar and practitioner on the MDGs.  He chaired the WHO Commission on Macroeconomics and Health (2000-1), which played a pivotal role in scaling up the financing of health care and disease control in the low-income countries to support MDGs 4, 5, and 6.  He worked with UN Secretary-General Kofi Annan in 2000-1 to design and launch the Global Fund to Fight AIDS, TB, and Malaria.  He worked closely with senior officials of the administration of George W. Bush to develop the PEPFAR program to fight HIV/AIDS, and the PMI to fight malaria. On behalf of Secretary-General Kofi Annan, from 2002-2006 he chaired the UN Millennium Project, which was tasked with developing a concrete action plan to achieve the MDGs.  The UN General Assembly adopted the key recommendations of the UN Millennium Project at a special session in September 2005. The recommendations for rural Africa are currently being implemented and documented in the Millennium Villages, and in several national scale-up efforts such as in Nigeria.

Professor Sachs has been the Director of the Earth Institute of Columbia University since 2002.  In that capacity, he leads a university-wide organization of more than 850 professionals from natural-science and social-science disciplines, in support of sustainable development.  Sachs has consistently advocated for the expansion of University education on sustainable development, and helped to introduce the PhD in Sustainable Development at Columbia University, one of the first PhD programs of its kind in the U.S.  He championed the new Masters of Development Practice (MDP), which has led to a consortium of major universities around the world offering the new degree.  The Earth Institute has also guided the adoption of sustainable development as a new major at Columbia College.  The Earth Institute is home to cutting-edge research on all aspects of earth systems and sustainable development.

Sachs is the recipient of many awards and honors, including membership in the Institute of Medicine, the American Academy of Arts and Sciences, Harvard Society of Fellows, and the Fellows of the World Econometric Society.  He has received more than 20 honorary degrees, and many awards and honors around the world. His syndicated newspaper column appears in more than 80 countries around the world, and he is a frequent contributor to major publications such as the Financial Times of London, the International Herald Tribune, Scientific American, and Time magazine.

Sachs’ policy and academic works span the challenges of globalization, and include: the relationship of trade and economic growth; the resource curse and extractive industries; public health and economic development; economic geography; strategies of economic reform; international financial markets; macroeconomic policy; global competitiveness; climate change; and the end of poverty. He has authored or co-authored hundreds of scholarly articles and several books, including three bestsellers and a textbook on macroeconomics that is widely used around the world.

Prior to his arrival at Columbia University in July 2002, Sachs spent over twenty years as a professor at Harvard University, most recently as Director of the Center for International Development and the Galen L. Stone Professor of International Trade.

Sachs was born in Detroit, Michigan, in 1954. He received his B.A., summa cum laude, from Harvard College in 1976, and his M.A. and Ph.D. from Harvard University in 1978 and 1980 respectively. He joined the Harvard faculty as an Assistant Professor in 1980, and was promoted to Associate Professor in 1982 and Full Professor in the fall of 1983, at the age of 28.

Germany increasingly recognizes that if the adjustment needed to restore growth, competitiveness, and debt sustainability in the eurozone’s periphery comes through austerity and internal devaluation rather than debt restructuring and exit (leading to the reintroduction of sharply depreciated national currencies), the cost will most likely be trillions of euros. Indeed, sufficient official financing will be needed to allow cross-border and even domestic investors to exit. As investors reduce their exposure to the eurozone periphery’s sovereigns, banks, and corporations, both flow and stock imbalances will need to be financed. The adjustment process will take many years, and, until policy credibility is fully restored, capital flight will continue, requiring massive amounts of official finance.

Until recently, such official finance came from fiscal authorities (the European Financial Stability Facility, soon to be the European Stability Mechanism) and the International Monetary Fund. But, increasingly, official financing is coming from the European Central Bank – first with bond purchases, and then with liquidity support to banks and the resulting buildup of balances within the eurozone’s Target2 payment system. With political constraints in Germany and elsewhere preventing further strengthening of fiscally-based firewalls, the ECB now plans to provide another round of large-scale financing to Spain and Italy (with more bond purchases).

Thus, Germany and the eurozone core have increasingly outsourced official financing of the eurozone’s distressed members to the ECB. If Italy and Spain are illiquid but solvent, and large-scale financing provides enough time for austerity and economic reforms to restore debt sustainability, competitiveness, and growth, the current strategy will work and the eurozone will survive.

Read more at Project-Syndicate

Much controversy currently surrounds a radical federal budget overhaul designed by Representative Paul Ryan of Wisconsin and overwhelmingly backed by House Republicans. The Ryan plan calls for trillions of dollars in cuts in Medicaid and other safety-net programs for low-income and disabled Americans. It also goes after Medicare, one of the pillars of middle-class retirement, aiming to turn it into a voucher system that would force the typical retiree to pay about $6,000 more per year just to get the same benefits Medicare now guarantees.

What about Social Security? Ryan would effectively gut that program, too, supposedly to address a looming national fiscal crisis. But in fact Social Security’s long-term shortfall is manageable, and we need to invest more not less in this effective system.

Read more at Campaign for America’s Future.

Ryan’s budget proposal, which propelled him to the headlines a couple of years ago, would return government spending to 16 percent of GDP, the same the size it was in 1950, before Medicare or Medicaid were created or Social Security expanded enough to lift the majority of the elderly out of poverty. He would basically privatize Medicare, providing an inadequate subsidy to enable the elderly to purchase plans on the open market. He once proposed to change change Social Security in a similar way, but that is now apparently on the back burner. He will deeply gut Medicaid and would almost entirely cut out all other government spending in coming decades, except for defense, which he seems to adore. This includes students loans, veteran programs, infrastructure spending, R&D, and so on.

Despite all this, he would not balance the budget, because the tax cuts he proposes are so extreme that even his social spending cuts won’t pay for them for a generation. Indeed, the size of his tax cuts seems to get lost in some analyses. They are bigger than Romney’s, really whoppers. There was a casual promise that they would be partly financed by closing tax loopholes, but as with Romney, we have yet to see details

Read more at The Huffington Post.

First, as to recovery, the jobs stimulus averted much worse unemployment than we would otherwise have had; this is widely understood.

Second, as to reinvestment, it will bring real and lasting “change” — Grunwald uses this word deliberately, arguing that (unlike FDR) Obama has scrupulously kept his campaign promises. ARRA has transformed the energy sector, giving renewable energy a new lease on life; it modernized medical records, it put money into high-speed rail, and pushed high-speed internet out to poorer areas. This is the more original part of Grunwald’s book and the most valuable; it’s summarized here in the FP post.

Grunwald has a tremendous amount of energy, writes in a chatty, highly readable style, and the book is full of what certainly seems like terrific reporting. I hope very much lots of citizens, and especially perhaps journalists, will read it and take on board its argument, because it’s an argument that needs to be made

Read more at the Chronicle of Higher Education.

Now we have had, of course, the Knight Capital meltdown. I’ve also come across some other things well worth reading, among them Scott Patterson’s excellent Dark Pools(which I reviewed here),a new Wired feature, Raging Bulls, and among several by Felix Salmon this blog post with an astounding animation showing the growth of high frequency trading. On my list too is Sal Arnuk’s Broken Markets.

Read more at The Enlightened Economist.

I remember this ad, because I remember several liberals being worried about this type of Romney campaign. Why? Because the liberals in question basically agreed with it. President Obama was trying to make a Grand Bargain with unemployment above 9 percent. The weak recovery was accepted as a given by the administration instead of as a problem that had to be tackled. There was a lot of debate over what could be done and how, but at that point unemployment was off the table. President Obama would pivot back to jobs that fall, but it would remain a quiet priority, especially after so much time had been wasted. And it was a worry that if Mitt Romney ran a campaign that was all about unemployment all the time, President Obama would lose. I thought this was correct at the time.

That has changed with Paul Ryan now announced as Romney’s vice presidential running mate. This appears to signal that the Romney campaign will move away from the previous focus on unemployment and toward arguing for the conservative transformation of the federal government and the social safety net. This move is being interpretedas a sign of weakness from the campaign, one where they are worried that their previous strategy was failing. But why was the unemployment message failing? The economy isn’t much stronger, so it hasn’t lost its potency. Mitt Romney’s job creation record was being attacked, but that only gets you so far. I think a major reason why is because of an odd contradiction one can see from the recent “Romney Program for Economic Recovery, Growth, and Jobs”released by Romney’s economics team. Romney has no actual interest in trying to bring unemployment down faster, which blunts the ability to really say anything about unemployment, but his economics team also wasn’t signing off on the far-right’s bizarro stimulus plans.

Read more on Salon.com.

Last month, Federal Reserve Board Chairman Ben Bernanke gave testimony before Congress in which he said that he had become aware of evidence that banks in the UK were rigging the Libor – the inter-bank lending rate and one of the primary benchmarks for short-term interest rates – in the autumn of 2008. According to Bernanke, he called this to the attention of Mervyn King, the head of the Bank of England. Apparently Mervyn King did nothing, since the rigging continued, but Bernanke told Congress there was nothing more that he could do.

Read more at AlJazeera.

No matter what the headlines say, the short-term impact of the rising yields on Spain’s actual borrowing cost is very limited. Spain is currently paying just 4.1 per cent on the stock of its outstanding debt which has an average maturity of 6.4 years. This means that if Spain can now borrow at an average rate of say 7.1 per cent (a full 3 per cent points above current costs) it would take more than six years for this to reflect in its average borrowing costs. This means that in any one year its actual borrowing cost is likely to rise only by about a sixth of that amount, around 0.5 per cent. If the panic in the markets does not worsen (which is a big if) Spain’s actual borrowing cost will only rise to a bit more than 4.6 per cent by July 2013 – which is a cause for concern, but not a cause for panic. What then is the problem? Why the near panic?

Read more at Business Spectator.

Draghi’s strong – indeed, unprecedented – statement was widely interpreted as signaling that the ECB would soon revive its bond-purchase program, focusing on Spanish debt in particular. Stock markets around the world soared. Jens Weidemann of the Bundesbank immediately expressed reservations, but the next day German Chancellor Angela Merkel and French President François Hollande issued a joint statement expressing their determination “to do everything in order to protect the eurozone.”

I recently argued that the ECB, working with the nascent European Stability Mechanism (ESM), was the only institution that could save the eurozone. It could do so by buying Italian and Spanish bonds in the secondary market with the pre-announced intention of keeping their sovereign interest rates below a certain threshold for a certain time.

It is likely that Draghi’s statement will indeed be followed by ECB purchases of Spanish (and Italian) sovereign bonds. A man like Draghi would not have issued such a statement without believing that he could follow through on it. But, if this is to become a decisive turning point in the eurozone crisis, three things must happen.

Read more at Project-Syndicate.org.