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Economic news

This tax credit wasn’t meant to help with housing, but that’s exactly what it’s doing

This tax credit wasn’t meant to help with housing, but that’s exactly what it’s doing

Economic news
As rents rise and wages stagnate, many families struggle to find affordable housing in the U.S. This is especially true for low-income households who often spend more than half their income on rent. The U.S. has a number of housing policies to help low-income families find and afford housing, but only about one quarter of eligible households got assistance in 2018. Thus, my colleague Katherine Michelmore and I considered whether a different type of policy – the Earned Income Tax Credit (EITC) – might help improve families’ access to housing by giving parents more disposable income. We wanted to know if further expanding the credit might help address the housing affordability crisis. Getting money back The EITC is a refundable tax credit that provides a subsidy to mostly lo...
Will Trump’s trade war with China ever end?

Will Trump’s trade war with China ever end?

Economic news
President Donald Trump recently escalated his trade war with China, threatening to impose a 10% tariff on the remaining US$300 billion of untaxed Chinese imports. If the new tariff goes into effect in September as promised, virtually all Chinese exports to the U.S. would be subject to levies ranging from 10% to 25%. China retaliated by letting the value of its currency fall to the lowest level in more than a decade and halting all crop imports. Many Americans like me are now wondering: Is there any end in sight? How to win an economic war As a scholar of trade policy, I’ve repeatedly made the point that free exchange is a positive sum game – meaning every participating country can benefit – rather than zero sum — as Trump seems to believe. This is why commercial disputes ...
How corporate bankruptcy works

How corporate bankruptcy works

Economic news
More than 20,000 companies file for bankruptcy every year. Although companies follow many different paths to bankruptcy, each one encounters a process that is carefully designed to balance the rights of debtors and creditors. As I’ve learned from studying and practicing bankruptcy law, the system is not perfect, and sometimes outcomes seem unfair. But bankruptcy is definitely not a “get out of jail free” card for companies deep in debt. Making the best of a grim situation To most people, bankruptcy has a negative image. And for good reason: A filing almost always means there’s not enough money to go around. But the system makes the best of a grim situation by imposing an orderly and open process that preserves value and encourages negotiation. Bankruptcy reorganizati...
The US-China trade war: 5 essential reads

The US-China trade war: 5 essential reads

Economic news
The U.S. has placed tariffs on more than US$250 billion worth of Chinese goods and has threatened tariffs on another $300 billion. China has retaliated, placing tariffs of their own on billions of dollars worth of U.S. goods, including alcohol, fruit and pork. Experts call it a trade war. These five stories from The Conversation archives will help readers better understand what that a trade war is and what might happen next. 1. What is a tariff? Amitrajeet A. Batabyal, an economist at the Rochester Institute of Technology, defines a tariff as “a tax levied on an imported good.” In this case, Batabyal writes, the U.S. placing tariffs on China will make Chinese goods more expensive in the U.S. But tariffs “are not implemented in a vacuum,” he writes, meaning that aggre...
5 reasons why Trump’s Venezuela embargo won’t end the Maduro regime

5 reasons why Trump’s Venezuela embargo won’t end the Maduro regime

Economic news
The U.S. has announced an economic embargo on Venezuela, intended to put an end to President Nicolás Maduro’s authoritarian regime. In an Aug. 5 executive order, President Donald Trump said that the tough new sanctions – which target any company or individual outside of Venezuela doing business directly or indirectly with Maduro’s government – were a response to the Maduro regime’s “continued usurpation of power” and “human rights abuses.” All Venezuelan government assets in the United States are also now frozen. The new measures represent a significant escalation from previous sanctions, which mainly targeted government officials and some key industries such as oil and gas, gold and finance. But my analysis of Venezuela’s political and economic crisis sugg...
Companies promoting causes can be accused of ‘wokewashing’ – allying themselves only for good PR

Companies promoting causes can be accused of ‘wokewashing’ – allying themselves only for good PR

Economic news
More consumers want companies to address societal problems, including climate change and crumbling infrastructure. Additionally, more than half want to buy from brands that take stands on social issues. At the same time, consumers are increasingly skeptical about these partnerships, seeing them as marketing stunts. It’s called wokewashing. I’m a professor of brand responsibility, and my forthcoming research investigates brands and their relationships with social issues, including the importance of both allies and advocates. Allies or advocates In marketing terms, allies are members of a dominant social group that bring attention to important social issues. A company can serve as an ally when it works to increase awareness about issues affecting marginalized groups. Advocate...
The Senate filibuster explained – and why it should be allowed to die

The Senate filibuster explained – and why it should be allowed to die

Economic news
Sen. Elizabeth Warren is the latest Democrat to argue an arcane Senate rule governing debate stands in the way of passing a progressive agenda, such as meaningful gun control. The procedure, known as the filibuster, allows a 41-vote minority in the Senate to block legislation. Its power has been steadily eroding, however, as both Democratic and Republican lawmakers create procedures to get around the roadblock to pass everything from the Affordable Care Act to President Donald Trump’s Supreme Court nominees. Should the Senate move even farther toward being a legislative body characterized by majority rule rather than minority obstruction? Many Democrats, including me, might resist anything that helps Trump and his GOP Senate majority pass their agenda. Yet as a scholar of the S...
How Democrats can win back workers in 2020

How Democrats can win back workers in 2020

Economic news
Labor unions and the workers they represent were once the heart and soul of the Democratic Party. The 2016 presidential election revealed just how much that has changed. Hillary Clinton lost in key battleground states like Michigan and Wisconsin in part because she took labor support for granted. A survey my team of labor scholars at MIT conducted about five months after the election showed that most workers feel they lack a voice at their jobs. Many Americans apparently felt that Donald Trump did a much better job than Clinton showing he was on their side and had a plan to help them. As I watch the 2020 presidential debates, I wonder: Will Democrats make the same mistake? Or will they return to their roots and put the full range of workers’ needs and aspirations front and cen...
Here’s what happened last time the US bought a large chunk of the Arctic

Here’s what happened last time the US bought a large chunk of the Arctic

Economic news
Editor’s note: Reports that President Donald Trump has urged aides to look into buying Greenland make us think of the last time the United States bought a major territory in the Arctic: the purchase of Alaska from Russia in 1867. Two years ago, we asked William L. Iggiagruk Hensley, a visiting professor at the University of Alaska Anchorage, to write about that historic sale. On March 30, 1867, U.S. Secretary of State William H. Seward and Russian envoy Baron Edouard de Stoeckl signed the Treaty of Cession. With a stroke of a pen, Tsar Alexander II had ceded Alaska, his country’s last remaining foothold in North America, to the United States for US$7.2 million. Alexander II led Russia when the U.S. purchased Alaska. Wikimedia Commons, CC BY ...
Cómo enseñar mejor a nuestros hijos en la era del big data

Cómo enseñar mejor a nuestros hijos en la era del big data

Economic news
En la reunión de padres y maestros, me senté a un lado de la mesa frente a la maestra de mi hijo de primer grado. La maestra señaló porcentajes garabateados con tinta roja. Miré y escuché. “Este número”, dijo, “es su calificación Lexile”. Ella continuó moviendo el dedo índice a través de una tabla creada por MetaMetrics. “Este es el rango normal para su edad. Así que usted quiere que, en este nivel, él lea libros”. Su informe de rendimiento matemático procedió de manera muy similar: más porcentajes, rangos y “niveles”, a veces calculados a partir de diferentes medidas protegidas por derechos de autor. A estas alturas, me resultaba difícil seguirla. Me pregunté en silencio: Tengo un doctorado en Enseñanza y Aprendizaje, y no entiendo lo que dicen e...