Deficits Are OK, But Inequality Is a Challenge

Noted economist Robert Pollin, co-director of the Political Economy Research Institute and distinguished professor of economics at the University of Massachusetts, will visit Buffalo State to lead two discussions about inequality and austerity policies, both critical economic issues.

On Thursday, April 24, Pollin will introduce the film Inequality for All at the Burchfield Penney Art Center at 6:30 p.m. Inequality for All, a documentary featuring former U.S. Labor Secretary Robert Reich, was the winner of a special jury prize at the Sundance film festival. Director Jacob Kornbluth approached the film intending to “take a conceptual and abstract topic and…tell an approachable and human story about it.”

The film concludes the Crisis! Film Series, was put together by Ted Schmidt, associate professor of economics and finance; Bruce Fisher, visiting professor and director of the Center for Economic and Policy Studies, and Albert Michaels, professor of history. “We wanted to inform the public about the financial crisis using movies,” said Schmidt.

Preceding the film, Pollin will present “Solving Inequality.” His recent books include Back to Full Employment and A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States. An earlier book, Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity is ranked 19 on List Muse’s list of the 100 best economic books of all time.

Following the film, Fred Floss, professor of economics and finance director of the Fiscal Policy Institute will join Pollin, Schmidt, and Fisher to discuss the talk and the movie. The event is sponsored by the Center for Economic and Policy Studies, the Economics and Finance Department, the Burchfield Penney Art Center, and the League of Women Voters of Buffalo/Niagara.

Pollin will lead a discussion about fiscal austerity on Friday, April 25, at noon in the Bulger Communication South 2.

Fiscal austerity proponents argue that reducing government spending promotes economic growth. It’s not merely an argument among academics; the conclusions affect fiscal policy around the world because academic experts are key advisers to, and influencers of, government policy makers.

However, the argument for fiscal austerity is backed by a study that Pollin helped to discredit. The study, by Ken Rogoff and Carmen Reinhart,  purports to show that a country’s deficits can, if they reach 90 percent of the country’s GDP, send that country’s economy into the tank. (GDP—gross domestic product—is the market value of goods and services produced by a country.) Pollin, with Thomas Herndon, a graduate student at the University of Massachusetts at Amherst, and Michael Ash, professor of economics and public policy at the same school, showed that the study’s conclusions were faulty, owing to both methodology and an error in coding an Excel spreadsheet.

The conclusions made headlines around the world, and sparked a segment on the Colbert Repot. “Between the interest in Pollin’s work and growing concern with income and wealth inequality,” said Schmidt, “both events promise to be lively as well as informative.”