Globalization Will Work If We Stop Catering To The Elite, Says Larry Summers
Nathan Gardels The WorldPost
http://www.huffingtonpost.com/entry/globalization-larry-summers_us_594b0440e4b0312cfb616164
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A policy of investment in infrastructure; building things that everyone shares and can be proud of. This has the virtue of employing people who are having a tough time in the current economy. It is the best way to provide a general economic stimulus. A trillion-dollar commitment over the next 10 years would be a great step ― paid for by carbon taxes or other measures that are pro-environment.
A commitment to monetary policies that create an economy in which we’d face a shortage of workers rather than a shortage of jobs. That creates a more equal leverage between employers and employees, which is the condition for real wage growth for ordinary workers. We don’t even have a central bank that takes a 2 percent inflation target seriously. We’ve gone eight years with inflation nowhere near that. We need to target 2 percent, not just be comfortable with the forecasts of inflation inching minimally up.
We need a much greater level of investment in young people and their transition to work. Some of that has to do with the debt burden of a college education. But more importantly, we don’t do anything for people who don’t go to college. They are left to either sink or swim, and mostly they sink. I’m thinking here of the kind of vocational apprentice arrangements that Germany has implemented successfully.
We need to reorient our international economic policy toward what benefits people, instead of benefiting the rich and focusing on the priorities of corporations. Why is it that corporate tax loopholes, which mean that ordinary Americans need to pay more taxes, is not a priority? Instead, intellectual property protection for pharmaceutical companies are at the top of the international agenda. U.S. Commerce Secretary Wilbur Ross was recently very proud about getting credit rating agencies into China. Who cares? The shareholders come from all over the world ― and the jobs will be created for Chinese people in China. Why not tackle tax competition, jurisdiction arbitrage and tax shifting instead, all of which allow corporations to avoid their tax obligations. Tax avoidance and tax havens are the clearest example of bad international policy. And international agreement should aim as well at stopping races to the bottom on labor and environmental standards.
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