Professor
L. Randall Wray Class
Meets: M,W 4-5:15 pm, Haag Hall 201
Office
hours M, W 1:30-2:30, or by appointment; Manheim 202h
Contact
information: Best way to reach me: email wrayr@umkc.edu;
alternatively call x5687, however, do not leave a message if I am not in.
Textbooks:
The following are in the bookstore:
Dean Baker and Mark Weisbrot: Social
Security: the phony crisis
Mat Skidmore: Social Security and
its Enemies: the case forAmerica’s most efficient
insurance program
The following is a xerox that can be
purchased at cost from the Economics Department Office, Haag 211:
L.
Randall Wray: Real World Policy
The following is a book that can be
purchased at cost from CFEPS (Kelly Pinkham):
L. Randall Wray: Understanding
Modern Money
In addition, there are a number of
other readings, most of which can be downloaded from the internet. Full
citations for most are provided in the reference section of this syllabus.
Course
Description:
This course provides an overview of economic policy. We first examine the theoretical justification(s) for government intervention in the modern capitalist economy. This, of course, is controversial; while few economists argue for complete absence of government intervention, the degree of intervention desired varies greatly. There are two main traditions: the Keynesian/Institutionalist tradition that not only tends to support a great deal of intervention, but which also sees the "free market economy" as an impossibility; the other tradition is the Neoclassical, which sees a limited role for the government in the case of "market failures" and perhaps a few other "special cases". Note that even Neoclassical economists vary a great deal in the amount of government intervention desired, but in contrast to the Keynesian/Institutionalist tradition, government is indeed seen as an "intruder" into a reasonably well-functioning market economy. Next we turn to an examination of recent trends regarding public policy in the US, paying particular attention to the so-called "fiscal crisis" and rise of "balanced-budget conservatism", and to the fall of "Keynesianism". This trend is in evidence in virtually every developed capitalist country, so we shall puzzle over the reasons for the simultaneous adoption of Monetarist, Supply Side, and Fiscal Austerity policies in most countries. Finally, we will focus most of the course on an examination of two main public policy areas. The first concerns Social Security and other issues relating to an “aging” society. The second concerns unemployment, inequality, poverty, and related issues. Surprisingly, almost no area of economics is ignored in the debates about Social Security: fallacies of composition, relations between saving and investment, fiscal policy and economic impacts of deficits, productivity growth, labor force issues, demographics, inflation issues, monetary policy and interest rate determination, immigration policy, and so on. Likewise, a study of the causes and consequences of income inequality will require wide-ranging understanding of economic theory.
After an introduction to these issues,
students will undertake group research projects investigating one of the two
main topics of inquiry. This will involve detailed analysis of economic data,
applying theoretical understanding to real world policy issues. Each group will
make a presentation of findings to the class, and will produce a final
“journal-style” article.
Requirements:
It is expected that each student will attend all classes, will participate in discussion, and will complete all required readings. There is a Community Service component to this class (more details will be provided in class). There will be approximately 4 homework assignments, each requiring a “short” (approximately 5 page) essay. In addition, each student will participate in a group project that will culminate in a longer paper.
Evaluation:
Participation
10%
Presentation
15%
Homework
35%
Community Service
10%
Group Research Paper
30%
It
is the policy of the University of Missouri that there will be no discrimination
based upon any factor other than the quality of each student's academic work. I
adhere rigidly to that policy. If you have a physical condition that requires
special arrangements, please let me know as soon as possible, so that we may
make suitable accommodation. If you have any difficulty with the class
whatsoever, please discuss it with me as soon as possible so that we may work
together to overcome it. Finally, we will strictly adhere to the university’s
policy regarding plagiarism. All borrowed work must be properly cited—whether
in homework assignments or in the group research paper. Plagiarism is perhaps
the most serious transgression encountered in academics and will not be
overlooked.
SCHEDULE
OF TOPICS
(Note:
there will be handouts, and may be other assignments,
in
addition to those listed below)
23-25
August—INTRODUCTION: ECONOMICS. Reading: Wray Real World Policy (in Packet);
A quick refresher course in macroeconomics.
30
August-1 September¾History of Social Insurance and
the Creation of Social Security. Reading: Skidmore, Social Security and its Enemies, chapter 1-4.
8
September¾
(No
Class 6 September) Social Security since 1950. Reading: Skidmore, Social
Security and its Enemies, chapters 5-7; Baker and Weisbrot, Chapter 1-3.
13-15
September—The Economics Behind Provisioning for the Future. Readings: L. R.
Wray: “Functional Finance and US government budget surpluses in the new
millennium” (e-version to be supplied); Dugger: “Redefining economics: from
market allocation to social provisioning”, (in Packet); Wray “Subway tokens
and Social Security (www.cfeps.org); Bell and Wray “Financial aspects of the
Social Security Problem” (www.cfeps.org).
20-22
September—Trends: Economic and Demographic. Readings: National Research
Council, Preparing for an Aging World
(available at www.nap.edu focus in particular
on Chapters 1, 2, 4, 8); Martin and Preston (Editors): Demography of Aging (available at www.nap.edu),
focus in particular on Chapters 1, 2, 10; Government Accounting Office: An
Aging Society: meeting the needs of the elderly while responding to rising
federal costs (September 1986; available from www.gao.com;
focus in particular on Executive Summary as well as Chapters 1, 2, 5).
27-29
September—The Trustee’s Projections: the mechanics behind the projections.
Readings: Annual Report of the Boards of Trustees of the Trust Funds (2004;
available on-line); Baker and Weisbrot chapter 4-5. Papadimitriou and Wray, Does
Social Security Need Saving? (available from www.levy.org).
4-6
October—The Economics of Reform: Clinton and Bush Plans. Readings:
President’s Commission to Strengthen Social Security (2001a): Draft Report of the President’s Commission” and (2001b): Strengthening
Social Security and Creating Personal Wealth for All Americans (final
report); L. R. Wray: The emperor has no
clothes; and Killing Social Security
softly with Faux Kindness: the draft report by the President’s commission
(available from www.levy.org); Baker and
Weisbrodt Ch 6-9; Baker, Dangerous Minds?
The track record of economic and financial analysts (available at
www.cepr.net); Wray: “Social
Security: truth or convenient fictions?” (www.cfeps.org).
11-14 October—Inequality, prejudice, segregation, and discrimination. Readings: Tilly and Albeda “Not Markets Alone” (in Packet); Kluegel and Bobo “Perceived Group Discrimination and Policy Attitudes” (in Packet); Charles “Processes of Racial Residential Segregation” (in Packet); Tcherneva and Wray “Tax Cut Facts” (www.cfeps.org)
18-27
October—Poverty and Homelessness. Wright “Chapter 4: Who are the
Homeless?” (inPacket); US Conference of Mayors “Sodexho Hunger and
Homelessness Survey 2003” (www.usmayors.org);
from www.levy.org: The
War on Poverty After 40 Years: A Minskyan Assessment; Public
Policy Brief No. 78, 2004; Author(s):
Stephanie A. Bell, L. Randall Wray
25-27
October—Rising Tides and Penal Keynesianism. Wray “A New Economic Reality:
Penal Keynesianism” (in Packet); From www.levy.org: Did
the Clinton Rising Tide Raise All Boats?: Job Opportunity for the Less Skilled;
Public Policy Brief No. 45, 1998; Author(s):
Marc-Andre Pigeon and L. Randall Wray;
Down
and Out in the United States: An Inside Look at the Out of the Labor Force
Population Public Policy Brief No.
54, 1999; Author(s): Marc-Andre Pigeon,
L. Randall Wray
1-3
November—Money and Unemployment. Reading: Forstater “Unemployment” (www.cfeps.org);
Wray, Understanding Modern Money, Ch 1,4,6,7,8
8-9
November—Employer of Last Resort. Tcherneva: “Job or Income Guarantee?” (www.cfeps.org);
Tcherneva
“Argentina’s Jefes Program” (e-version to be provided); Forstater
“Public Service Job Assurance: A most fitting tribute to Dr. King” (www.cfeps.org);
Sawyer “Employer of Last Resort: could it deliver full employment and price
stability?” (in Packet); Mitchell and Wray “In Defense of Employer of Last
Resort: a response to Malcolm Sawyer” (e-version to be provided); Forstater
“Response to Sawyer” (e-version to be provided).
15-17
November—Conclusion. Wray and Forstater “Full Employment and Social
Justice” (e-version to be
provided).
22
November—Presentation #1; Outline of Group Papers due (all groups)
29 November-1 December—Presentations #2, #3; Draft Group Paper due 1 December (all groups)
6
December—Presentation #4 (LAST CLASS)
13
December—Final Group paper due. Must be emailed to: wrayr@umkc.edu