We welcome all of you here today on behalf of the Ford School and our Center for Public Policy and Diverse Societies. I also like to extend a very warm welcome to our speaker, David Harris. David is the Deputy Assistant Secretary for Human Services Policy at the US Department of Health and Human Services. And he leads the Office of Human Services Policy in the Office of the Assistant Secretary for Planning and Evaluation. He's actually called that unit as something akin to Think Tank that analyzes federal policy issues. So that's a way to think about what that unit does. He's on leave from Cornell University, where he was deputy provost, vice provost for social sciences and professor of sociology. As deputy provost, he focused on a number of key provost office priorities, including academic planning, admissions and financial aid and diversity. And as vice provost for social sciences, he was responsible for leading the development and implementation of university-wide efforts to enhance the social sciences and for providing a social science perspective on Cornell's policies and priorities. He has extremely broad research interests in social stratification, race and ethnicity, social identity, and other areas related to public policy. And his work has applied theories from sociology, economics, and psychology to empirical studies of racial and ethnic disparities in socioeconomic status, the fluidity of race, and racial and non-racial determinants of residential mobility. I know that for many of you, he really does not need any introduction. His academic career started right here in Michigan, where he started as an assistant professor of sociology and taught on the faculty here until 2003. He was actively involved in the early days of the National Poverty Center, and he was responsible for one of the NPC's edited volumes of book that is called The Colors of Poverty, Why Racial and Ethnic Disparities Persist, which he co-edited with our own NLN. We couldn't be more pleased to welcome David back to Ann Arbor. But before I call him up to the podium, I did want to say that today's event is the second in our annual Distinguished Lecture Series, hosted by the Diversity Center this year. We have a number of additional events planned for the fall, and I encourage you to take a look at our website, which we've actually just recently revamped and updated to learn more about those activities. Our next session actually is very soon. It's coming up on Friday this week. It'll be at 4 o'clock, where we'll post a book talk and a signing by Don T. Chinney, the creator of Patchwork Nation, which is an innovative effort to understand voting patterns across a wide range of community demographic characteristics. E.J. Dionne in reviewing the book calls it, quote, a wonderful book that takes us beyond the red and the blue, while also explaining social, regional, and economic roots of partisan and ideology color wars. So I hope that many of you can join us on Friday. But with that, I am delighted to turn the floor over to David Harris. Thanks, Susan. Thanks, folks. It really is a great, you always say this, but this time I really mean it. It really is a great pleasure to be here today at the University of Michigan. As Susan said, it's where I got my academic start after graduate school. Started first working with Sheldon and then on the faculty in sociology and pop studies and at server research center. And actually linked a little bit here at the Ford School, taught a course, a graduate course on race, class, gender, inequality, my last year here at Michigan. So it was pretty exciting when I got a letter from Susan back a couple months ago asking if I'd come give a talk here at the University of Michigan at the Ford School. And I thought, well, it'd be great to go to Ann Arbor. I haven't been to Ann Arbor much since I left. But then the question was, well, what are we gonna talk about? And in my role as a government official, I thought, what am I gonna talk about? And so I decided that I'd use this time to talk about three issues, sort of bundling things into three categories. And there are three categories, three things that I spend a lot of my time thinking about, a lot of my time working on in Washington. And there are three areas where I think academics have something to say. We're both, those who are here at master's program, PhD program, I think through your research, through your education, things you'll be doing soon, but also the academics, researchers, I think have something to say. And there's plenty of opportunities for the public to comment on these things, but I thought this would be another venue, another opportunity for that to happen. As you can see up here, feedback here, echoes of some sort.  These didn't all say number one, by the way. You think we can't make decisions in government? We can't prioritize in government, right? Everything's number one. I actually had prioritized, but it got undone. There was number one, number two, and number three. I'll see what else happens as I go through. So the first number one is evidence I'm gonna talk about. As you probably know, there's been a huge push in this administration on evidence-based policy, and there are an awful lot of questions about what exactly that means, how you implement it. I'm gonna talk about that some. The second is challenges. What I wanna talk about here is what I've long believed is one of the critical issues to successful anti-poverty policy, and that's men, and in particular, it's issues around incarceration. And so I wanna talk some about this. And third, public perceptions. So a little bit different from what we usually worry about as academics, worry about doing the research, and what's the answer, and what should the policy be? I wanna take it back a step, and maybe influence somewhat by my time as a senior administrator at Cornell, and think about the public perceptions. Think about the message and other things that are critical to the policy as critical as having the right policy. So before I get into talking about those three things, let me just give you a little bit of an overview on HHS, Human Services at HHS, and ASPE, the area where I'm involved. And I wanna, if you don't mind holding questions to the end, I think that'd be best unless there's some question of clarification, which is unlikely to happen in a talk like this. There's no formulas or any such things. HHS, so HHS, I didn't know all of this about HHS six months ago. HHS, of course, knew as a principal agency, as you can see here, for protecting the health of all Americans and providing essential services for those in need. There are upwards of 65,000 employees in the Department of Health and Human Services. They're not all in Washington, they're all over the place. They have places in Rockville, we have regional offices around the country. They're spread across 11 operating divisions. Operating divisions are those divisions at HHS that run programs for the most part, and there's 18 staff divisions. The staff divisions range everything from HR, budget, legislative affairs, a whole range of things following the staff divisions. The operating divisions are the vast majority of the employees. There's 300 programs run out of HHS and a large number of grants, programs run out of there as well. As you can see here, the annual budget, $850 billion. HHS is a huge part of the federal government. About 80% of that has to do with Medicare and Medicaid. HHS is primary responsibility for implementing health reform. So the big game, the big story, the big issue at HHS is health reform. And it's been really a treat as someone who doesn't do health reform, as I said, knows very little about health. I've been learning a lot since I got there, and my area is not, I don't work in the health area at HHS, but it's really been fascinating to be in the meetings for the last six months, sort of behind the scenes of health reform, which is a critically important change in American policy, but also incredibly complex. And there's just a lot of things that have to be hammered out. It's been very interesting to see how we're trying to make this happen. We will get it done, but it's quite complex. The other, of course, is there's this other part of HHS, which is the human services. And there, I think it's fair to say, maybe some of my colleagues in other departments are quibble, but I think HHS has primary responsibility for anti-poverty programs. A lot of anti-poverty programs you think about or run out of HHS. We work, of course, with folks in HUD and Ed and other places, but HHS is a critical player with respect to anti-poverty programs. So that's HHS. The vast majority is health, but this is another part of HHS, which is human services. So where is that? Human services at HHS is overwhelmingly in ACF, Administration for Children and Families.  So TANF, which used to be welfare. You've got child support enforcement. Child welfare, foster kids. An area that I hadn't really come into contact with that much before I got to HHS. Somehow in my work, it hadn't really come up very much. Just a really important and really difficult area and a lot of kids in very, very difficult situations and a lot of really thorny policy issues. It's an area I don't know how much is going on. Ford School, you guys talk about it, but it's really an area that I think could use a lot more attention from academics and from others, the area in child welfare. Disaster, response and recovery. Big surprise to me. I actually spent the fair amount of my time late spring and early summer on the oil spill related issues. Had no idea I'd be doing things like that, but HHS has responsibility for the public health, recovery and response with respect to disasters. And the part of that that deals with human services is actually an ACF. And our role as a liaison with ACF and the rest of HHS got heavily involved in aspects, the human aspects, not shellfish and all that stuff. The other parts of the oil spill. LIHEAP, which is around assistance to people for heating and cooling expenses, head start, and of course there's a fatherhood and marriage initiative.  So what's ASPE? Well ASPE, I only knew about ASPE. The big thing I knew about ASPE before I got this call and was asked to come join ASPE, was of course they fund the poverty centers. Sheldon knows that, a lot of you probably know that. I think ASPE, word association, ASPE poverty centers. But there's a lot more to ASPE than the poverty centers. It's an important piece, so there's a lot more. ASPE is one of the staff divisions. We sit in the office of the secretary. We're principal advisors to the secretary on policy development. We're involved in a lot of things, policy coordination. So we're heavily involved in activities coordinating across HHS and often a lot of our work is between HHS and other departments. So I spend an awful lot of time with people from Hyde, Ed, Justice and other places. Legislative development, working on ledge proposals that come up often, but not always from the operating divisions and trying to figure out which of those we want to move forward. Strategic planning for HHS as well as operating divisions. And there's a whole other piece of our portfolio Susan said, it's sort of the think tank part. We are a piece that tries to fund projects that are thinking both a few months ahead and several years ahead. We're funding some of our, well some of our work is sort of quickly trying to understand answers to things. So for example on poverty guidelines. There's a poverty rate which we all know, but there's also something called poverty guidelines which is related and the poverty guidelines actually affect eligibility for a number of programs around the country, school lunches amongst other programs. We had a whole bunch of things we had to deal with very quickly this year because for the first time since we've been doing this we had a deflationary period and that was something that was not anticipated in the legislation. Had to quickly figure out if we allow all these rates to go down how many people will lose their access into what programs. That's a very quick but we also have longer run things around research. It's four offices. DALTSIP which is disability aging long-term care policy, health policy, human services policy and science and data policy. So I'm the deputy assistant secretary for human services policy, this part of it. There's about 30 people in my office including Kim Klum as some of you may know who's a recent alum of Ford School and anthropology here. We have the poverty centers this national poverty center here of course. There's three other poverty centers, area of poverty centers. There's a national center for family and marriage research. With respect to coordination across, to my surprise, the first couple of months I was in the role, I probably spent half my time on homelessness. Had no idea I'd be doing that. But about half my time probably because in June the federal government rolled out the first ever federal strategic plan to end homelessness. That had five and 10 year goals on ending various forms of homelessness. Worked closely with HUD and others on that. So the research projects and the ledge proposals which had been quite interesting. Trying to figure out and it's why we were waiting with bated breath for two weeks from now to see what we think will happen, what will happen with Congress and what that implies for the work we're trying to do. So that's the set up. That's the background. That's the context in which this is occurring. Let me talk about the three things. So the first one's evidence-based policy. So this long quote here is from former OMB director Peter Orszag. Peter Orszag was director of OMB from the beginning of the Obama administration until July, I believe it was, this previous summer. This is a quote the blog post that Peter Orszag put on the White House blog about six months after President Obama took office. And the keys here are basically what he's saying is for a long time the federal government has funded programs and it hasn't been clear that those programs are effective. It's not been clear that there was evidence for those programs, but we kept doing it and we can't do that anymore. Basically what we have to do is we have to think about evidence. We have to put our money into supporting generation of people generating evidence, doing research to generate evidence, but we also have to make hard decisions and we have to ask is there evidence for this program? And if the answer is no, we have to think maybe we shouldn't be doing it. And if we do a program and we can't show that it's effective, we have to think maybe we should stop doing it. Maybe we should do something else. So that's evidence-based policy. And two of the key places where it's mentioned in this blog post, this isn't the whole thing, are team pregnancy and home visiting, which are two areas that are both sitting squarely in HHS and we end up getting involved in. So evidence-based policy.  I mean, if you knew that one group of policies worked and another group didn't, you would generally want to support the policies that we thought would have an impact. But when you move to evidence-based policy, there are an awful lot of questions that come up. And what we've been doing in sort of this, if you will, this think-tank piece of HHS and working with others across the federal government is trying to anticipate some of those questions and trying to answer some of those questions. And again, this is an area where I think a lot of folks in this room, a lot of folks on this campus and other campuses have a lot to offer about how we ought to think about this. One of the first questions is, well, what counts as evidence? There's experimental design, of course, right? What if we don't have experimental design? Can anything that isn't experimental design count as evidence? So quasi-experimental design, is that okay or not? What are the implications of saying it has to be experimental design? A lot of things in human services, it's just not feasible to think that you'd have a random assignment across some things before you knew that they worked. So there's one huge question, a lot of methodologists and others should be able to chime in and evaluation people. What counts as evidence? But then you get to some other issues. We can tell if a program's effective, but it's pretty clear that more, I'd say just as, if not more important than asking the question, is the program effective? Is asking a question, why is the program effective? Because what we're interested in is not saying, wait, that was great, that worked. We're interested in taking this and trying to replicate this, trying to scale it up. If you don't know why it worked, it's awful hard to figure out how to replicate it and how to scale it up. It's very difficult, but it's something we've got to get better at doing. It's trying to figure out why things work. And that's actually one of the reasons I think that, I don't think there's disagreement among people I'm talking to and watching about this, but the notion of evidence-based policy, it kind of needs to be accompanied by something called theory-based policy. So you need to have evidence, but you also need to have a theory about how things work and why they work that way to allow you to later replicate and scale up. But then you get to another issue, which is, I like to say, evidence anywhere is not evidence everywhere. So evidence anywhere is not evidence everywhere. So if something worked in a particular place, in a particular economic context, that doesn't mean that's evidence for every subpopulation in every part of the country, in every economic context. So you have to think long and hard about what kind of modifications will be required to make this work in a different setting for a different population. I'll give you an example at the end where things didn't go so well. And lastly, this issue of fidelity. This is an issue that the evaluation people talk about an awful lot, fidelity. Fidelity basically means if you had a program that the program was run, this demo, you got the results you wanted, you need to have fidelity to that model, which means you can do everything that was done in that model. If you don't, you have deviations from this, you don't have fidelity. But the question is, what exactly does fidelity mean? As I said earlier, there's a question about what are the key elements that you need to have? But there's also a question, if fidelity, for example, if you had a population, you had materials for them to read as part of this program, and those materials were in English, and then you go to South Texas, right? Fidelity actually would mean changing them to Spanish, probably, or having an English and a Spanish option. You have to think about the context when you think about fidelity. If you're a stick in the mud about fidelity, and you say, no, no, no, these are exactly the programs we used, materials won't work. So a couple examples, the Healthy Marriage Initiative. So this has been out there publicly. The Healthy Marriage Initiative is something that started in the previous administration. It's based on some work that primarily came out of Oklahoma that showed that it looked like we could positively affect relationships, positively affect marriage, strength of marriages, and so forth. And we implemented this. I believe it was nine sites across the country. It was primarily, not exclusively primarily tested, developed on more middle-class populations, primarily white populations in Oklahoma. Some of this work also came from college students. Work with college students, psych labs, that kind of stuff. Well, one of the places it was implemented was in Baltimore, and the group in Baltimore was overwhelmingly black, overwhelmingly very poor, and in fact, unlike some of the other groups who were cohabiting or in marriages, this is a group where a lot of these folks were barely in a relationship. They had a kid together, perhaps, but they were barely in a relationship. Well, not only didn't we get the same positive results, what was troubling about it was that we actually got a significant and a substantial increase in rates of serious domestic violence. And I had a briefing on this and said, well, what a serious domestic, being a good survey person, right? What a serious domestic violence, what does that mean? Punched, used, assaulted with a weapon, sent to the hospital. We're talking serious things that aren't ambiguous. We had something like a 60% increase in the rate of serious domestic violence among the treatment group as opposed to the control group. So why did this happen? Well, we're not, frankly, we don't 100% know. We have some good indications about it. But my sense is that part of it has to do with this issue of evidence anywhere isn't evidence everywhere, right? Having a program that worked really well for a more advantaged, more white population in a different part of the country might not work for a population where we tried it in Baltimore. And in this case, the consequences were pretty significant and pretty disturbing. We learned a lot from it, obviously. Home visiting. Home visiting and teen pregnancy are extremely active right now. There's whole questions about what's evidence. And so you can go online and see, we had reviews done by MD, I think we have reviews done by Mathematica of all the research we could find on home visiting, all the research we could find on teen pregnancy. And then identified in teen pregnancy, I think it was 28 programs, 28 programs that we believe have evidence. And then there's a grant competition where you can apply, states can apply, and say, which of these 28 programs are they going to use? But there's some really important questions are gonna have to be answered as we're reviewing these applications, right? If you say, we're gonna use this in Phoenix, right? This part of Arizona, so we're gonna use this in Phoenix. Well, the question is, how are they gonna modify it? So it works in Phoenix. Who has the expertise to review that application? What do we do with it? So there's gonna be a lot of important questions. Obviously, I don't wanna go back to a world that isn't evidence-based policy, but there's a lot of difficulties. Oops, sorry, that's a telephone. Second, it's still number two. So I did prioritize. So for a second, imagine you're in a poverty class, right? So let me give you some highlights from inequality courses. Poverty rate, right? This was 2009, came out a couple months ago, or so ago. Poverty rate in the US is 14.2%. Overall, it's higher among kids. It's about a fifth of American kids are living under the poverty line. And you can see that there are racial differences, which is, and Lynn and I have this book. This is why we have the book. You can see whites and Asians on one end of this continuum, just around 10% plus or minus poverty rates. Blacks and Latinos on the other end, 25% are so poverty rate. That's troubling, but I always like to put on here what the poverty line is. Because then you realize, this is more troubling than you think it is at first. Because the poverty line, family of three, that's mom and two kids is what I put up here. 17,285 dollars a year. And my favorite exercise when I was teaching with undergrads is I would have my students break up in the small groups and I'd say, okay, you're a mom and two kids. What are the necessities? What are the luxuries? Let's price out the necessities and let's figure out what it is. Now what's that for a year? And then figure out how we get back to 17,285 dollars.  So first thing we know, we've got a lot of poverty in the country. The poverty rate actually went up. It didn't go up as much as people were worried it would. Shouldn't be surprised it went up given the economy, but we have poverty and we have disparities by race and ethnicity. And in fact, the number of people who are under some livable amount is probably higher given the way the poverty line is. Second, test score gaps. You can see them by race, you can see them by class, they're large. And in the book I did with Ann Lynn, I thought one of the most interesting, if not the most interesting graph in the entire book is in the chapter on education. I'm sure you all have it by your nightstands. If you turn there tonight and look at it, you'll see there's this chart. And basically there's three curves. There's one, two, three. The gap between them is pretty constant across the whole space. What you have on the y-axis, I think it's verbal ability. What you have on the x-axis is age from starts at 36 months and it goes to age 13. Now what are these groups? The groups are higher income whites, lower income whites, higher income blacks, lower income blacks. So there's two things that are really interesting about this. One, there's only three curves, but there's four groups. That's because the higher income blacks are sitting on top of the lower income whites for pretty much the whole space. So you really see three. If you look, you can see four, but first time you look at it, you just see three. That's the first thing that's interesting. It tells you there's a race-class interaction. The second thing that's interesting, and I think this is really fascinating, the gap at age three is the same as the gap at age 13. So that tells you schools are part of the story, but a huge chunk of the black-white test score gap we're worried about is before kids ever enter the classroom. It's there at age three. So that's test score gap. So we've got some other challenges on the human services side in America. And the last one I'll share with you here is infant mortality rate, which I always tell my students, I think is the most disturbing indicator in America, or most disturbing indicators around individual quality of life. It's impossible, I would argue. I submit it's impossible to blame the victim in this case. You can't do it. You can blame people for being unemployed. You can blame them for not getting education. You can't blame them for not living to see their first birthday. That's what this is. And this tells you that in America, you have overall 6.8, 6.8 have a blank, 100,000, right? I think 6.8 have 100,000 live births. Don't make it to their first birthday. That's similar to Hungary, Poland, and Slovakia. And it's not as good as a whole bunch of countries we'd want to be as good or better than, or you expect, given socioeconomic status, Japan, Denmark, England, Cuba, right? They all have numbers that are as good or those numbers are all better than ours. But the story gets more disturbing when you look with subgroups. You see that for whites and Mexicans, and here this is this paradox that's been talked about a lot, you see a number that's 5.8 to 5.6, Asians 4-9, but here's African-Americans again, 13.7. So what that basically tells you is if you're born to a black mother, because that's how we handle interracial couples, by the way, it's just race and mom.  So what do we do about this in the federal government? We have a lot of programs. A lot of programs that are trying to deal with this. Those programs are overwhelmingly focused on children and primary caregivers. Those primary caregivers are basically overwhelmingly, that's women, okay? So we've got programs that mentioned something before, we've got 10, if we've got Head Start, we've got around nutrition, we've got WIC and SNAP, SNAP used to be food stamps, as you probably all know, Race to the Top, Promise Neighborhoods, we've got a lot of education, we've got EITC, public housing, Medicaid, CHIP, we've got health reform on the way, but for now, Medicaid and CHIP, these are almost all, or mostly as you can get it, it's possible if you're a single man, but it's very difficult. But what about men? What about prime age men? What about men who are, say, 25 to 35, who live in poor communities who, the people Al knows, right? Ali Young, everybody, my old colleague, people must be like Ali Young's study, right? People who, Dean Graduate High School, they have weak work histories, they've been incarcerated, what about those guys, right? What do we have for them? What's the story with them? Let me give you a few facts about these men. First, let's think about earnings employment. So if you look at individuals who are non-resident parents with a child support order, these are overwhelmingly guys, okay, non-resident with a child support order, 32% of them, almost a third, have zero reported earnings. Another 19% have less than 10,000 year reported earnings, and 14% have between 10 and 20,000, which tells you about two thirds of the guys out there with child support orders, they make less than $20,000 a year. How about education? Now, look at those who are working, so we've already cut out the bottom folks who aren't working at all. Look at those who are working non-resident parents, again, largely men, with incomes less than 200% of the poverty line. What's their skill set with respect to education look like? 20% don't have a high school diploma or a GED, another 50% have no more than a high school diploma or GED. So 70% of these guys don't have an associate's degree, bachelor's degree, graduate degree, any of those things we think are critical in the new economy, 70% of those guys. But the other part, the one that I think we don't talk about enough, these, the first two, education and plant, we talk about those a ton we have for decades, but this is other piece that we don't talk about very much, and that's incarceration. What I like to say is that trying to understand the inner city without thinking about incarceration and life course is like trying to understand affluent areas without thinking about college transitions. You can't do it. Incarceration is all over the place in these communities. It explains a ton about these guys, about their families and about their communities. What are the numbers look like? Well, these are 07 data. If you look at men between the age of 18 and 55, 2.5% are incarcerated currently. This is only current, not lifetime. You've got big race disparities again, and it's the same kind of things that you usually see. You usually see whites and Asians on one end of the continuum and blacks and Latinos on the other. You can see it here. You've got 1.4% and 0.6% respectively of whites and Asians incarcerated men. You've got 6, 8% of blacks and 2.8% of Latinos. But that's all men. I like to hope that I have a pretty low probability. So what if we narrow it down to some of these guys we're thinking of in some of these communities? Let's take blacks aged 26, 35 with less than a high school education. 28% of them are currently incarcerated. Not lifetime, that's currently incarcerated. So that leads to the statistic that Bruce Western generated at the bottom, this quote, among children born since 1990, 4% of whites and 25% of blacks will witness their father being sent to prison by their 14th birthday. So that's the link to families. And for me, this became really hit home. I had this great, this interesting opportunity at Cornell to give a talk in a maximum security prison on the book, The Colors of Poverty. And so I'm busy, right? And so someone asked me something interesting and I thought, yeah, I'll do that. And then on the way there, I thought, why did I agree to do this? Why did I agree to spend my time talking to these guys? Why didn't I spend my time like mentoring at an elementary school or something? What am I doing? Why am I going to hang out with these guys? And it was an incredible experience, especially because the book, if you looked at it, starts with the story about a hypothetical character and I talked about that character and the first person in the audience raised his maximum security prison, he said, that's me. And he talked about why it was him and what had happened in his life that led to him being there. And it was almost like it was incredible. They all started to talk about this sort of stuff. But I realized on my way there and especially on my way back, the reason I was there was not for these guys. It was for their kids. Because I started to realize all these guys, almost all these guys are connected to children. They're affecting these kids' sense of what they ought to be doing in many, many ways. So you can see this is the why they matter. They matter because of income, but they also matter because of other stuff, social capital culture. They matter because of expectations and aspirations. They matter because they model what success is for their kids and their communities. They're the phrase old heads that you've heard before perhaps about neighborhood stability. They can be the old heads who create stability or they can be the old heads who get in the way of stability. So these men are absolutely critical. And as mentioned already, Al, there's lots of folks who've done fantastic work urban ethnography. One of the ones I like to assign, I think it's really wonderful, is the story of John Turner by Elijah Anderson. If you haven't read it, I strongly encourage you to. It's a really great way and a relatively short piece to get a sense of the importance of young men in inner city communities and the difficulties of addressing their challenges. And also I think you get from that but I certainly get from other things quite pessimistic or concerned about our ability to address the problems of poverty by just focusing on kids or just focusing on kids and women. We've got to think about these guys and their big challenges. Here's something I did once after a meeting and it's on my wall, not on the wall, it's a piece of paper that's taped on my wall. I did not mess up government property. And so this is actually one of the things I think about is I was in some meeting and I saw some presentation and it seemed very compelling about young guys and I started to think about the following. If you look at the statistics, we talk about reentry programs a lot, incarceration, right? You can almost talk about pre-entry programs, right? Why would I say that? I'm not saying all these people are destined but if you look at the data, more than half these kids in Lawn Abroad, the boys are going to jail. We know they're going to jail if you look at the numbers. We don't know which ones but we know something's going to happen. So what's happening here is we've got boys born in extreme poverty, right? And there's a path and there are programs. My worry is that a lot of the programs out there, they're not off ramps, they're rest stops. So I worry that you go along, maybe you were in and out of a system or maybe someone to provide some help before you got in the system and it slowed you down and you went to rest stop, right? But after not too long, you're back on this path. Maybe you had another program. This is what I felt like as I was hearing these guys talk about different programs they've been in. But you know, you're headed down here perhaps, not finishing high school, not going on to college, not developing the skills you need to support your family and so forth. We've got to figure out off ramp. We need good outcomes. We need an off ramp. And one of the things that I've spent a lot of time thinking about HHS, working with folks in my area and working with others, is just trying to figure out, what are the off ramps? Do we know, and that's evidence-based policy goes back to, do we know what the off ramps are? If we had all the money and all the political capital and so forth to do it, what are the off ramps? Because again, unless we can figure out the off ramps for these men, I think I'm not too positive about our ability to make huge progress with respect to urban poverty. So what are we doing about that? One is awareness. So one is just talking a lot about incarceration, trying to make it clear to everyone that in more affluent communities, we don't have incarceration. I don't think I know it. I do not know anyone who's currently incarcerated. And a lot of people with my socioeconomic status would be like that. You don't know anyone who's incarcerated. And as a result, I think we think about it too little when we do our research and we think about it too little when we think about policy. It's the opposite of the Chicago's or urban poverty effect on people like Bill Wilson and the work that was going on in the 80s was all in big cities and so forth. We thought about urban poverty a lot. We don't think about this enough. And so one is just awareness. A second though is to think about existing programs. So it's actually the case right now in, I think it's about nine states that, and I don't remember if, I don't know if Michigan's one of them. New York is not. I don't think Michigan is, but I'm not sure. That if you are incarcerated, that's treated as voluntary unemployment with respect to child support. Incarceration equals voluntary unemployment, which means that arrearages pile up while you're incarcerated. So when you get out of jail, now you have a prison record, which makes it harder to get a job. And we're going to garnish your wages because you're way behind on child support because you weren't paying it while you were in prison and it racked up because we thought that's voluntary unemployment. That's nothing different than saying I just don't want to work. That's one of the things we're thinking about. Does that make sense? And what impact is that having on individuals, families and communities? There's a bunch of other programs we're thinking about from the lens of incarceration. And the other is new programs. Okay, if we recognize this in the federal government, what should we have out there to help folks who either are incarcerated or seem like they're on the wrong path. They're on the way there. Lastly, public perceptions. This is the best I can do it. When I was at Cornell, I used to always joke with the dean of the vet school that it just wasn't fair because we'd give talks to the board of trustees and he put up pictures with like kittens and so forth and oh, and then I come up with data. Well, let me show you this bar graph about poverty. So the best I can do is kids, right? Kids are better than puppies, right? So anybody know who these kids are? Anybody recognize these kids? Yeah? You got it. It's Daisy, Francisco and Anthony from the movie Waiting for Superman. Anybody seen Waiting for Superman? Other than one person's obviously seen it. Well, I'm not surprised because if you saw the movie, I don't think you'd forget these kids. So saw this movie this weekend, Waiting for Superman. And that tells you I did not finish the talk on Friday, by the way. But I saw the movie Saturday. And it was really powerful. I don't know if you've agreed. I strongly recommend it and government official can endorse the movie, I suppose, but this was a good movie. It was really compelling. And what was interesting about it? It's basically without a spoiler, any spoilers here, basically what is the story is of five kids who are in situations, they're in schools, public schools that are not meeting their needs. Their parents do not believe they're meeting their needs. And so the parents want to enroll them in charter schools, which they believe would be high-performing charter schools that want to give their kid a chance. And the movie does a very good job of making you believe that at least four of these kids, I'd say, if not all of them, they're in really bad shape if they don't get in this charter school. I mean, they're in schools where the vast majority of kids don't graduate, don't graduate high school when they get there in that path. And those who do graduate, for example, in California, the majority of the kids who graduate aren't qualified to attend the UFC system. They just haven't completed the classes you need to do it. So you can see parents working really hard. And it's incredibly powerful. And I think, and it ends with just heartbreaking, the lottery. These schools actually have lotteries.  And the numbers tick down. They show the pictures of the mom. Usually, I think they're all mom. Mom wants a dad. A parent and a kid sitting there, and they say, there's a name, and 10 spots remaining, nine spots remaining, eight spots remaining. Some kids get in, some don't. I won't tell you which ones do which ones don't. But it's really heartbreaking. This moment at the end, it's just heartbreaking, because you know what these kids are in for. And one of the things I thought was so striking about this was I thought about, again, as a privileged person, and I think we're all in my world, I think we're all privileged people that we can spend our time doing things like this, I almost never come to contact with these kids. I don't know these kids. They're not part of my world. They generally don't go to my kids' school. If they go to my kid's school, I might know one or so, but I don't know them very well. And I don't think I'm unusual in that sense. We've got an awful lot of segregation in this country by social class. So we've got residential segregation by social class. This is a paper, an MBR, a working paper, and it looked, for example, at youth census data from 1970, 80, 90, and 2000, and said, two-thirds of metro areas experience increasing segregation of the rich from the poor between 70 and 2000. But, because people aren't randomly distributed across metro areas, two-thirds of metro areas, but 85% of the metro area population lives in a place that saw increasing income segregation between 1970 and 2000. And there's a lot of other work to support this assertion that we have had a growth in residential segregation by income. But we also have social segregation by class. So there's some really interesting work using 2006 GSS data by Tom DePreet and his colleagues, and they looked at networks. So they looked at two kinds of networks. They looked at acquaintance networks, people say, yeah, I know, someone's so acquainted with, but they also looked at trust networks. So who are your friends? Who can you go to when you really need something? And what they end up concluding, I have a quote here from the paper, what they end up concluding is that levels of social segregation, network segregation, by race are quite high, but they're also quite high by religious behavior, by employment status, by political ideology, and they had other indicators of their own well be social class type indicators. So not only do we live in places that are segregated, but our social networks are segregated. We also have what I call is informational segregation. So I think about this, my family moved down to DC about a week and a half ago before I was commuting back and forth, and as a good modern person, I read the paper, but just on my iPhone, right? And like any of you, I don't know if you've had this experience, and I've had the iPhone, you're very in bed, iPhone hits you in the head, you're reading, right? That's how I read the paper at night, okay? Some of you know what that's like. But then my family moved here and we started getting the Washington Post, the print version, and it reminded me that there's something very different about reading the print version versus the iPhone version, and that is you end up reading stories you're not looking for, and you read stories you're not looking for because, oh, there's an interesting, the headline is an interesting picture. You can sort of get that when you look in the iPhone or online, but nowhere near the magnitude, my experience, of when I'm reading the physical paper, so what it means is with the decline in circulation, I picked the Chicago Tribune, I could have picked any paper, a lot of these went to zero because they went away in this period. Over the 16 years you saw the average daily circulation for the Chicago Tribune go from 601,000 then the 452,000, while the population's going the other direction, okay? But there's another way to think about this, informational segregation, and I'll close with this chart, which I thought was really interesting from Pew Research Center. It's the kind of thing you thought was probably true, but I hadn't seen the results before I came across this.  Are you conservative, moderate, liberal?   Then they said, where do you get your news, all right? Do you watch or listen to various news sources? And so all you have here is a very simple table. It simply tells you buy political party and then buy political ideology. Where are they getting the news? And you can see Rush Limbaugh, right? Has 63% of the people who watch or listen to Rush Limbaugh say they're Republican, but only 10% say they're Democrats, 23 independent, and here's the distribution across the whole sample, 25, 33, 34, Republican Democrat, independent, respectively. On the other extreme, you've got Keith Oberman, right? Countdown on MSNBC. You've got 3% Republican, 60% Democrat, and 29% independent. It's pretty interesting. Think about what you watch and so forth and see where you are on here. And see, yeah, I guess I'm right with a bunch of people like me. And then you can see it also over here, not by Republican, Democrat, independent, but by conservative, moderate, liberal. See the same basic story. And what I think is interesting about this is, and of course nowhere near the first person to comment on this, but this is different from the old days of depending on your age, your parents or your grandparents, when you had, you know, it wasn't that this many choices, it wasn't, am I gonna watch Cronkite or something else or something else in the other networks, Brinkley I guess, I don't even remember, but there were a few networks. And that's where you got your news. And there was the local paper where you got your news. That meant that you and your neighbors had more of a shared sense of what was going on in the world. What this is telling you is, because I've watched a lot of these and I'm sure you have as well, the story's really quite different across these different forms. What that tells you is, that individuals are not just living in places with people who are more like them and hanging out with people who are more like them, they're getting information that's consistent with the information that people like them get and not like the information that people unlike them get. So what? How does this link into this stuff and why am I talking about this as the DAS in human services policy? Because my concern goes back to waiting for Superman. It goes back to the fact that I think a lot of the differences on policy are because we have different information, because we have different experiences. It's true that once you get the information, you can come to different conclusions, but I really think a lot of it is because you have different experiences and I give you an anecdote that illustrates it. So from my time here at Michigan, I became a faculty member of the Alumni Association. The reason I became a member of the Alumni Association is because I ended up going to Camp Michigania to give a talk. Anybody here know Camp Michigania? Yeah, we love Camp Michigania. We've been eight, I think 10 years in a row now. I was a speaker twice and now we just go as campers and I loved being the speaker at Camp Michigania. My wife wasn't so keen on it and the reason was you give a talk and I would give talks about things you can imagine and equality type of things and the entire week people would be talking to me at the archery range and the cafeteria everywhere about, oh, I had never thought about this. Well, what I noticed is these are very smart people. They had very strong opinions on day one when they heard my talk. After a week of like, well, you know, I was thinking a little bit more and I have another question about this or have you thought about that? I could see them start to change. I could see them start to say, hmm, well, maybe it's not all that. It's not like they were all of a sudden saying, boy, I was some lefty and I went to some right-wing person, but they could start to say, hmm, the world's a little more complicated than I realized it was. Well, we don't have that opportunity very much anymore as my argument, given the levels of segregation and information and what it means is our role in human services is twofold. Our role is to advise the secretary to generate the best policy options we can, but we've also got to figure out how we communicate that to the public because if we don't find ways to communicate this to the public, it doesn't matter what great policy ideas we come up with because people are less likely to support them as my contention because they don't have the experiential knowledge that you get from a rare case of watching something like Waiting for Superman because we live in segregated worlds. So that's what I had to talk to you about. Those are three things, they're back to three number ones. Three things that occupy my time at HHS, Human Services will continue to occupy my time and I'm happy to take questions or talk about any of these or anything else that you might wanna.


everyone for joining us today and very warm welcome to everyone. I sincerely hope you and your loved ones are all safe and well. It's great to see so many people joining. If you want to comment on the chat box from which part of the world you're joining from that would be great. So yeah, so today we're going to be focusing on corporations and COVID bailout saviours. And by way of introduction, my name is Marnvi Lada. I'm a bachelor's student at SOAS studying economics and politics and I'm going to be operating today. So today's webinar is the 12th webinar in the economics of COVID-19 series. It's a series organized by the Department of Economics at SOAS alongside the Open Economics Forum, which is a student association part of the Rethinking Economics Network, which aims to introduce plurality in economic debate. I'm just going to start by saying a huge thank you to everyone behind the team, behind the scenes story that's working to make the webinars happen. They've been incredibly fascinating to learn from. So if you haven't been able to attend any of the previous webinars, they have been recorded and they're available on the SOAS economics page and they've also been recorded and uploaded onto the SOAS Open Economics Forum Facebook page. This webinar will also be recorded and uploaded as soon as possible. To keep up with the data on the future events, feel free to follow our social media accounts. I've put them in the chat box and keep the conversation going with the hashtag economics of COVID. So you can check that out as well. So today's speakers are Dr. Carolina Alves and Dr. Farwa CL. So Farwa CL is a postdoc at the Global Development Institute at the University of Manchester. She's the co-editor at Developing Economics and a co-convener of both DEECON and the Business and Development Working Group of the Development Studies Association. Her research interests include development aid, political ecology, corporations, industrial policy, corporate social responsibility, private sector and international development. She tweets at Farwa CL. And Carolina Alves is a Joan Robertson research fellow in heterodox economics at Gerson College University of Cambridge. She is also a co-editor at Developing Economics, a co-founder of DEECON. Now it currently sits on the advisory board of rebuilding macroeconomics and is a council member at the Progressive Economy Forum. Carolina's research interests include macroeconomics, money, monetary and fiscal policy, public debt financialization, Marxist economics and Latin America. And she tweets at CAC RIS Alves. So yeah, that's my introduction. I'm going to pass it now to Farwa. So hi everyone. Thank you very much for joining us and thanks a lot to the Open Economics Forum and SOAS Department of Economics. There's a lot of work which goes behind the scenes, especially coordinating this and arranging everything. So thank you so much for having us. I'm going to go right into the discussion. So to get us started, I'm going to start with the point of inequality and the impact of the pandemic. In the SOAS series alone, we've heard some very important talks on regional, sectoral and country responses to the pandemic. And in some ways, or the other, most talks have touched upon this tension between the concept of developed countries and developing countries. For the first time, the very notion of vulnerability and structural inequality in the context of poverty and institutional weaknesses are being associated with developed countries outside academia. And in this context, the role of the corporate sector needs to be better understood, we think. At an organizational unit, as an organizational unit which serves as an engine of trade, commerce, finance, some remnants of innovation, as well as acting as a vehicle for political lobbying, the corporation has all been at the heart of the capitalist system. Of course, it has also played a very powerful role internationally. And the purpose of our talk today is to look at corporations broadly in the US and the UK and highlight the socio-economic relations which bind corporate empowerment with inequality. So I'm going to be talking about three things and then Carolina will follow. The first, I'm going to talk about the role of the corporate sector before the crisis. Second, on how corporations have responded to the crisis. And I'm going to focus on some of the ways in which the profiteering has been happening. Third, I'm going to talk about corporate philanthropy and governance. And then Carolina will focus on the nature of bailouts, which have favored the corporate sector disproportionately in comparison to households. And we're trying to develop this term of bailout saviours in the context of the current pandemic. And I hope we have a time to discuss that. So even for this very brief talk, I think it's helpful to mention the origins of the modern corporation which line the Imperial Joint Stock Company. Although joint stock companies existed in ancient China and Japan, East India Company was different as a colonial enterprise involved in manufacturing, trade, and financial services, as well as having its own army. So its political role in siphoning wealth from one part of the world to another was undeniable. However, later literature on theory of the firm takes a sort of disjuncture. On the one hand, you have the rise of so-called robber banners or this idea of monopoly capitalism in the form of corporations. But there is also this push towards understanding how the corporation works or the mechanics of it. So a lot of literature focuses on the organizational theory of the firm. There is emphasis on the M firm or diversified model of the firm which is focusing on divisions within a firm, resource allocation, and mechanisms which help coordinate different activities in the firm. Williamson, Chandler, Penrose are some of the pioneers of that literature. But there is a move towards a very technical understanding of the firm and a disjuncture from the socio-economic. Having said that, I think there were standard texts like Berlin memes writing in 1932 which are focusing on the concentration and political role of the firm. Following from that, the 1960s transformation of companies towards financial managerialism completely transforms the previously limited speculativities of the firm. Conglomerates now leverage their individual firms on financial markets, reorganizing firms to avail opportunities on capital markets and end up with an aggressive merger and acquisition through highly politicized processes. So the financialization of the firm sets the ground for the now very famous story of shareholder revolution of the 1980s which accelerated against the circulation on financial markets, empowered shareholders, civilized share buybacks, and initiated the phenomena of shareholder activism to the ends of unmooring dividends from productive investment, a phenomena we see now as being very normal. The rise and crash of the 2001.com bubble unfolded in this setting. The decline of U.S. manufacturing since the 1970s found a temporal fix with liberalization, the rise of venture capital, and growing equity investment in tech companies. Sorry. Also, without revival of industrialization, the shift from one asset class to tech class enabled growth also on the back of outgoing outsourcing. But the implementation of a very loose monetary policy could not sustain corporate profits until the 2001 crash. In spite of the crash, central bank intervention continued to incline towards lower interest rates, compelling new search for investments in areas such as some prime mortgage, as well as enabling the rise of platform capital, which I will talk about a little later. We now have a lot of information about the corporate failure leading up to the 2008 financial crisis. But the point to note is that no concerted efforts on on the regulatory front were implemented to curb the excesses or share of share buybacks, moral hazard. And if you consider the four trends in the 2008 crisis for assistant fall and income share of labor, this has been written about from heterodox economists point of view at length since the 1970s, the dissonance between productive investment and financialized accumulation, something I just mentioned with respect to the role of the firm, the privatization of public goods, which has been an ongoing phenomenon. And fourth, a point which is missing here is the global skyrocketing of debt, global debt skyrocketed to 113 million just before the crisis, and mostly dominated by private debt. What's important to remember in terms of bringing this whole story together of corporate rise and inequalities, the fact that while companies were in possession of something like $2 trillion in cash, 42 million Americans were in food stamps. And this is just before the crisis. One last point that I wanted to mention before I move on to the next slide is this idea of the North side divide, which I don't think gets enough attention, especially with relation to the corporate sector. A lot of core activity, which happens continues to extract wealth from one part of the world to another. And we can see that in the global value chains phenomena, we see that with tax havens, corporations in developing countries, and in other countries actually don't have the same luxury of indulging in this corporate heaven activity that a lot of northern companies do, as well as this sort of commodifying of knowledge through patents. So there is a disproportion, which is ongoing and which we see in the rise of the coalition. When it comes to the current pandemic, the response of the US and the UK can be fairly described, I think as one of colossal mismanagement. This course was both implicitly and explicitly about the opportunity cost of prioritizing certain lives over others. So on the second of April, for example, there is a there are news headlines about shortage of ventilators. And one reason why doctors are forced to focus on patients with better survival rates. And also the fact that both countries have a very high mortality rate. This failure, I think, has to be understood as a result of the interplay between hollowed state capacity and corporate opportunity. That is the empowerment of one hasn't taken place without the disempowerment of another. By this, I exclude the state's capacity to respond to the needs of the private sector, which is ongoing. But it does involve an erosion of the social contract of welfare and social policy. If we're talking about the corporate's ability to capture on this gap, there are many examples, you just have to pick up their newspaper and you'll find tons of examples right now. But I will focus on the response of the health sector. So in the US, the strategic national stockpile, a reservoir of life saving pharmaceutical and medical supplies was basically inadequate. Only 16,600 ventilators were available. Many were outdated. And this, of course, was caused by a diversion of resources away from the hand from the public sector. But also as a result of private equity takeover of a handful of companies involved in domestic manufacturing of ventilators. The repurposing of productive value chains to companies like Tesla and Ford meant a lengthening of the duration of response to the emergency. Also incurring high cost, but also distributing the high cost to other logistic giants such as Amazon and Walmart. In the UK, we see a very different set of problems with the Brexit climate, but the favoring of giant corporations over SMEs and middle-sized companies is also ongoing. So to give you an example, one domestic company was actually exporting to the EU while there was a shortage of ventilators in the UK. At the same time, of course, there is piecemeal privatization of the NHS and a very strange model in the US in which private hospitals are investing in hedge funds, private equity, and continue to sit on hordes of cash while sort of taking money away from the public hospitals. And we know, of course, that the private insurance in the US does not respond in spite of all this investment. A second phenomena which has been really discussed right now with respect to corporate activities is dissonance between rising stock exchange and the real economy. We know already, of course, that the stock exchange is not sort of reflective of the economy and has been for a very long time, but fluctuations in recent months have been incredible. And this is owing to the rise of platform capital. People have very different definitions, but I define platform capital quite loosely as an intermediary, which could be data driven. So for example, Facebook, but also exists as a combination of e-commerce and logistics, such as Amazon. So this ability of platform capital to rise to this extent, especially in the current pandemic, is astonishing. Giant tech companies, for example, individuals have become millionaires, whereas 39 million Americans are right now unemployed. So we're really in this universe of trillionaires and and bread lines. But apart from that, there's also incidences of other corporate activity, which is quite worrying. So recent research publication by Transnational Institute and Corporate Euro Observatory points towards the possibility of litigation scenarios by some MNCs against states under the investor state dispute settlement. So basically states can, multinationals are considering suing states based on COVID revocation of contracts. At the same time, I'm sure you've read in the UK, the Bangladesh garment sector, which has been suffering is trying to claim a really large amount of money from a UK retail company, but it's not unsuccessful, but it's not successful at the moment. So I think we're talking about an economic model in which companies are able to benefit from a forced major or an unforeseeable event, a natural disaster. And this economic model clearly there's something very wrong happening here. In this context, finally, I want to talk about the rising role of corporate philanthropy. So the pandemic has also made visible the changing global governance model, which is heavily determined by corporate activity. This can be described in three ways. First, the role of corporation in multilateral governance, second, the digitalization of social policy, and third, the reproduction of global platform capital. The ongoing beginning of multilateral governance previously run by nation states has been under discussion a lot, especially with focusing on the UN. But not enough is mentioned, I think, on the role of the UN as a contracting body which outsources many of its major operations to private companies. These range from basic logistical services to humanitarian relief and even research and development. So reduction in state funding and reliance on corporate funding has a huge reorientation for the UN. The pharmaceutical lobbying in the WHO, for example, has pushed our research and development, which favors expensive drugs and obsesses over acquisition and strategies for patenting. And this, of course, has a major implication for any area of innovation. Gates Foundation now is the biggest donor, but I think I want us to imagine the possibility of a WHO, which had it continued to work as it was planned, would have built the health capacity of the entire country. So we're talking about a vaccine-building capacity or now a response to a pandemic which could have been uniform, had the WHO been empowered to do what it was built to do. And we can talk about the need for a vaccine right now and what to do about it, but this was a really big missed opportunity because of the changing governance model. Second is governance and digitalization of social policy. Since private tech companies are involved in producing and providing social safety net providers, projects domestically, as well as internationally, they will increasingly rely on tech to collect information. This could have repercussions for privacy breach, but also involve a welfare surveillance model in which social safety nets are based on certain social conformity behavior. We already see this happening in some countries. A data-driven re-engineering could become part of social policy with commodification as a main driver. But having said that, of course, we need to remember that there are problems with philanthropy in itself. So for example, the Silicon Foundation Fund, one of the largest philanthropic funds, which is a pool of funds coming by major tech companies actually allows tax breaks to these companies without the need to spend this money immediately. So money is being parked, it's kind of a tax break, and it's not certain what is going to happen. That is another kind of power, and we don't know where this money would be disseminated or how. Finally, there is the very important part which we see happening a lot. It's the reproduction of the global platform capitalism. What I mean is the inclination of tech giants to give to other tech companies as donations. So if you see Twitter, Facebook, Amazon, Alibaba Gates Foundation, and if you isolate Twitter from this list and look at how it's distributing this money for the pandemic specifically, it's actually giving to a lot of major platform companies as well as small platform companies. So companies like GiveDirectly, GoFundMe and $1 billion is not given entirely to one platform capital. There are multiple platform capital companies, and when they give, every company of course takes a share for the services that is provided. And then a very small amount is actually given to this area of need, but this sort of rent capture at every step of the way is on the rise, and it has very major implications for developing countries as well. We now know that the health sector in developing countries has been completely decimated because of structural adjustment policies and mass privatization. And in some cases, GoFundMe and these other companies are actually coming as saviours for a lot of very small modern operations and very small elements. And these global linkages could be in the form of franchise, so a company sitting in the UK or US and a local venture then forming a chain, but there are also very different layers of how this process happens. So with these three processes and a lot of other activities which is strengthening corporate philanthropy, there's also the phenomena of bailout, and I will now give the floor to Carolina to talk a little bit about what that looks like. I think her sound is all very good. Yes, is that enough? Yeah, great. Thank you. Thank you very much for having me here today anyway. So I will try to push a little bit further on some of the aspects that Fawa was mentioning, but specifically regarding to the bailout of corporations, which basically is the response to the Codiv-19 crisis, particularly from this business perspective. And then while doing that, I also take our attention to what the bailout actually means for society now and also in the future. So the current situation is, as we know, there are uncertain and things are changing constantly and so are these policies and measures. So we've been trying to adapt here and keep up with all these changes. But as far as I know by now, I can probably, I have probably identified over 10 measures ranging from tax reliefs to loans to business in the UK. And I'm sure we can probably criticize all of them, see ways to improve all of them, and saying how they're not efficient enough or how they could be well designed. And that indeed would be probably a talk or a paper that we can write and discuss with constructive criticism. But what I decided to do today is, and I thought would be more interesting, was to go and discuss a broader point that I think we should reflect on, which is basically how we think, how we elaborate, how we implement social and economic policies, having as reference the market and the corporations within our capitalist system. And that's important. And I think if we do that, if you have clarity about this, then we can get into the technical aspects of this bailout, we can get into the implications of this bailout, and then start coming up with a plan to improve it or even just ditch them all together. So I do think this is a very important discussion because if our starting point is that there is a unbalanced power relation between capital and workers, or if you like conflict, then what you're saying basically is that there is one consequence of any corporation bailout, which is a burden that is shifted to working people who actually end up paying the cost of this bailout in a way or the other, which as a consequence will end up exacerbating the qualities in society. So just to give you an illustration, and I'm going to mention an example that actually Fawa brought to my attention in the couple days, which is the case of the British Airways that has been relying on the government's follow scheme since April, but now just came up with the possibility of cutting over around 12,000 jobs. And I think what's important here is to give the background of what's happening, right? So yes, VA is going through that process, but if you look back in the last five years and see VA also engaging with probably around 3.6 billion pounds to shareholders that have been dividends and shares buybacks. It is also in this background the question of the International Airlines group, which is the group that managed the British Airways, that has been sitting on a reserve of 8 billion pounds as it goes back to some of the points that Fawa made. And we should also consider that actually the same group has been able to guarantee state loan of around 3 million from the Spanish government. So despite all these, this cooperation is actually going to probably cut more than a quarter of the workforce, the official workforce. And not only is also proposing some adjustment regarding job contracts, which probably reflect more precariousization of labor. So it's doing this kind of, you know, trying to illustrate what's happening. If we contrast that to some talks within the UK government to be guiding what to do after the crisis, right? With all the steps that's probably heading to because of that scheme, we're going to need to freeze public sector pay or rising regressive taxes. So looking to this and say, okay, companies of government are now liberal, but it also brings to the discussion something that we've been looking into for a very long time, which is this power imbalance between capital and labor, which to go back to some of the Fawa's points as well, it takes the share constant transfer of wealth, money from society to shareholds and financial spectators, which I don't want to get into that in detail for now. So yes, there is an argument, which is we need to keep businesses doing the crisis, right? This is the fact, yes, but we have to understand that there is much more involved in the logic of corporations market and then how this leads to that policies, that economic policies, that social policies. And I think this crisis is somehow giving a golden opportunity to revisit this. Okay, so let's try to recap something that is somehow very obvious in that context, which is the role of corporations society. So how corporations are important for our current society in the way we're organizing production? Yes, they generate jobs. We can't disagree that they generate, you know, in the monetary economy, which is our economy, this is very important because we keep the monetary flow going through the system. So if money you pay bills, we then pay our debt and keep things going. And that's actually very important if you look, especially in the UK in the last 40 years, where the public sector has been gone through so much cuts in market practices that have deprived society from the state provision. And in cases where it hasn't just deprived society from state provision, it has actually deprived sector through areas such as health and education. So more than ever, households, workers, they need that money, that monetary input, kind of having access to some businesses. So of course, we can see how corporations are important, we can see the argument to have it to keep them afloat, although we also have to consider that they don't do that for charity. Of course, corporations, they are business big. But this is like the obvious case. You can see corporations like this is fine, they have to exist. But it's the other side, which is less obvious in the sense that it's not highlighted up as much as it should in terms of being a structural problem, which is like these corporations that now they are very quickly lining up for bailouts from food factories, in fact, contribute very little to that own institution they are asking help for. And they are complaining about contributing. I think the comes to taxes, right? How these corporations actually, they have mastered the art of tax avoidance with help, actually, of big accounting firms such as Lloyd, KPMG, and so on. So what happens here is not the tax avoidance itself, it's how actually these corporations, they actively move to this offshore tax haven. And what that means is that they have a set of implications, which there are many people looking to that in a very interesting way. For example, we know that in that case, governments, they start competing with each other to kind of offer a highest level of tax subsidies. So they can attract that firms that but the consequence is the capacity of these governments that they provide to their citizens. So there's a lot of little things involved there. And the interesting aspect for us as well is how then we see these corporations relying on taxpayer funds structures such as roadway or law and order energy, but they constantly try to avoid paying their share for the government in terms of providing the services. So it is very interesting as well from the economic perspective, because what we have there is basically like economic and a financial rationale where taxes, they are seen as expenses rather than a payment to the government. And the moral argument is not there either. So what that means is it takes these corporations or the rationale behind these, they have to minimize their costs and taxes basically cost.  And there are all the aspects here, for example, the relationship between corporations and the environment. People, economists looking to that discussion, they know the efforts that are necessary in terms of regulations. And in terms of fines to kind of bring these corporations to stop polluting, for example, we know that the corporations they involve within the government to avoid any policy that you kind of resolve in terms of production. And of course, there's the scary thing about the carbon, which we know that also these corporations are within these corporations, and accept the idea that if you want to avoid global warming, we have to leave a very large proportion of the fossil fuels we already know that exist in the ground. So there are many things you can go and talk. I think the labor market, the regulation, something that heterodox economists are really looking and show how corporations welcome labor deregulation because, of course, you allow them to cut their costs. And for me, what that gives us is this very clear conflict between society and corporations' interest, which makes us wonder if you have that in our mind, which is when the economic crisis they hit, okay, a lot of workers, you know, it's still a priority, or when you have economic crisis is the environment is still a priority. And I think if you keep that in mind, if you highlight this opposite interest between society and corporation, we can design, you can think of social economic policies differently. We can bring a more nuanced discussion to the rhetoric, oh, we need to keep this in the flow. And we can also bring more complexity regarding the discussion of the implications of the corporation bailout, because right now, basically, these implications relate to the government deficits and how the government is going to find a way out that problem. But they are much more involved if you frame the discussion in terms of that conflict. And that's not new, but I want you to bring that to the discussion of the CODIF-19 rescue package for corporations. And just to head to the end of my talk and bring some examples here, I think the argument in a way is simple. We do have, you know, both sides of the economic and political spectrum making the case for bailout corporations. And I very much, although as economists, kind of agree with some measures such as, you know, the retention scheme and tax holiday. But what I want to say is that we have to be clear about this conflict, because if we are very clear about that, we can see that these measures, they shift that cost to the working people, as I mentioned before, in most vulnerable people. Now, this is a very difficult argument to make for two main reasons. One is the historical context we are, where, you know, there is, as I said, rhetoric about keeping corporations alive and the question of wages and the question of how we're going to bring the economy back on track straight away after the crisis. But I think the other difficulty is that by the end of the day, this is an argument that has to be empirically. We need empirical analysis that go through these schemes, these reputable packages, and trying to show the implications of the diverse developments of this conflict in each of these schemes. So, and basically what I'm arguing here seems very simple, but it's not because what I'm asking is that we consider that macro policies, they are biased in favor of capital and against labor. And that is a very interesting argument to make at a theoretical level, but the empirical level is much more difficult. And there are people within the heterodox spectrum trying to make that argument. I highly recommend the Institute of Public Policy Research Report on who pays who's who wins. I think that's the name, sorry, where they are basically saying, you know, they're looking to this massive state intervention and trying to show that some of these measures, the job rotation scheme, for example, or the small and medium-sized business loan, they seem very progressive, right? But then you would be progressive. They are somehow intervening or trying to change the balance of the power in society. And the term they use is, you know, if that intervention would actually affect the balance of wealth and power in economy. So if you see it that way, so these policies, they can be progressive. And I finish you with a concrete example regarding the job rotation scheme, because I think it is one of the most important policies in that context. We can look at it from the perspective of household as well, and, you know, it's unprecedented in the UK. And we can go through that job scheme, the job rotation scheme, and get into the details, right? Get into the technical aspect of it. So we know that the menu is excluded from that support. We know that this doesn't stop the question of total hazard that Faro brought before, which is workers, they can still get fired. We know that, you know, it's just 8% of the wages. So by the end of the day, household, they are experiencing a very significant loss of income. So we can go through these technical issues which, in a way, I'd say that even if you can call them technical, if you visualize that in this broader conflict dimension, probably can see that design is actually a fail to grasp how some of these policies would somehow fail to protect workers and households. But what I think is important here is to, and that's where I'm going to end, and that's the data I get from the EPP report, which is they have estimated that 40% of the net cost of the furlough scheme, job retention scheme, will be spent on rent and debt repayment. So around 10 billion, if considering just three months of lockdown, and 20 billion, considering six months of lockdown. So households, they basically, they wouldn't have a way to meet these obligations without that scheme. But what is very interesting here is that that money is basically going to banks and landlords, and that's the contrast they are making the report, which basically can be considered as a implicit bailout for banks and landlords. Of course, the banks and the landlords can come in and defend themselves in that sense. But what we're trying to do here is to show that there are the consequence of the crisis and how each segment of society are taking the heat of the crisis, not even in distributed, right? In that case, clearly banks and landlords, they're going to keep the continued inflow of income. And that, of course, will exacerbate inequalities. And it doesn't really help us to take this opportunity to somehow find a way to restructure society in a fair way. So this is where I finish. There are many other examples to go through, which is basically can be framed in terms of moral hazard and how these companies, these corporations, they need a proper check if we're going to bail them out. But I would move away from the moral hazard aspect and bring the conflict aspect for us to do that analysis, and you can go through the questions. And I think we have to be very clear and sharp here that the government bailout of business, right? It has cost for society as a whole, and that has to be debated in a theoretical, empirical way that's convincing, so we can approach policy makers and then make the case that we have to redesign that policies. And that's it. Thank you.


Three people shot dead in possible racist attack in Paris. Three people have been killed and three others injured as a gunman opened fire in central Paris today in a possible racist attack. The 69-year-old attacker targeted the Kurdish center in Strasbourg-Saintainess in the 10th district of Paris. Police has warned residents to avoid visiting the area. The Kurdish Democratic Council in France, CDF, the Drancy Center has already issued a statement condemning the attack. This is investigating the racist motive behind the attack. Paris prosecutor Laura Bissot has revealed that the gunman had previously been charged with racist violence. He was jailed back in 2021 for attacking tents at a migrant camp in Paris.