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Post-Crisis Economic Strains and Policy in Europe and the United States

Paper Session

Saturday, Jan. 6, 2018 2:30 PM - 4:30 PM

Loews Philadelphia, Parlor 1
Hosted By: Association for Social Economics
  • Chair: Nina Eichacker, University of Rhode Island

Food Insecurity in the Time of Austerity: The Case of Greece

Charalampos Konstantinidis
University of Massachusetts-Boston


The economic crisis that has been plaguing Greece over the last decade has had significant repercussions for the material well-being of working people in the country. Despite international news coverage of various dimension of material deprivation such as hunger and energy poverty among household in Greece, there has been little empirical work analyzing the empirical determinants of various form of material deprivation. I use Eurostat’s Social Inclusion and Living Conditions dataset for the period 2009-2014 to examine the determinants of self-reported measures of food insecurity in crisis-ridden Greece. I show that the passing of the first two structural adjustment programs in 2010 and 2012 is associated with higher degrees of food insecurity across Greece. Moreover I show that the likelihood of being food insecure is significantly higher for (a) urban households, particularly those in Athens, and (b) for non-EU citizens. I argue that this result is consistent with the significance of both formal and informal mechanisms, including social transfers and family networks, in mitigating food insecurity among households in Greece. Finally, I argue that the Third Structural Adjustment Program of 2015 institutes new forms of governance that constrain the Greek people’s ability to govern their affairs democratically – undermining efforts to transform the agricultural and food system in ways that could potentially decrease food insecurity.

Learning All the Wrong Lessons: The Political-economy Response to Europe’s Ongoing Crises

Nina Eichacker
University of Rhode Island


This paper explores European economic and political responses to the Global Financial Crisis (GFC), the Eurozone Crisis, and country-level economic crises since 2008, at both the national and supra-national level. It outlines the trajectory of economic development in the years prior to the GFC, outlines how the GFC transformed into the Eurozone crisis, and how different European countries in the core and periphery of Western Europe have responded to their unique and shared challenges since. In so doing, it considers the contradiction that left-of-center political parties have failed to capitalize on the global recessionary moment of 2009, whether due to national hegemony of biases against activist fiscal policy, political and economic constraints from position within the Eurozone, or some combination, and been succeeded by center-right or farther right political parties in some cases. It argues that the failure to implement active spending agendas in peripheral and core Western European economies leaves the region open to election of farther-right populist parties, with potential negative implications reaching beyond the economic.

Money Market Mutual Funds in the Era of Trump: A Minskyan Analysis

Greg Hannsgen
Levy Economics Institute of Bard College


The administration of Donald Trump may bring an attempt to re-make money and in particular money market mutual funds (MMMFs). Our analysis begins with a recent regulatory overhaul in the US and an episode in which a money market fund “broke the buck.” In essence, a monetary instrument defaulted. What will happen next? MMMFs (a) have a very low risk of capital loss in the unit of account; and (b) bear a “market” rate of return. The policy implications in a populist political moment are important because those with large portfolios have access to strategies and instruments that preserve capital. Moreover, the crisis highlighted the fragility of the assets typically held by MMMFs. Finally, the trend toward negative interest rates has reached MMMFs. Two alternatives seem to exist: 1) abandoning the unit-price guarantee or 2) shoring up a recognizable system of MMMFs in part by regulating asset structure. Competing visions for “private” monies will also be on the table. Something like MMMFs, I argue, are still needed. I will attempt to construct a coherent account of recent institutional changes, present relevant Financial Accounts data, and speculate on the next turn for money.

A Public Banking Option in the United States

Thomas Herndon
Loyola Marymount University


Basic financial services, such as access to a bank account, credit card, and the ability to cash a check are vital for full participation in the economy, yet the United States currently has a sizable portion of residence with inadequate access to basic financial services. Further, many consumers are unhappy with their current banking options, largely due to experiences associated with predatory practices and exorbitant fees, penalties, and regulations. Households without access to basic financial services (the unbanked) and those that rely on alternative financial services (the underbanked) spend a disproportionate amount of their income on accessing exploitative financial services, services which contribute to the creation and maintenance of poverty in the United States. A public option is not a new phenomenon; the United States a rich history of government-run or sponsored intuitions designed to offer basic financial services to the unbanked and underbanked. The first section of this paper will review the history of a public option for banking in the United States. The next section will investigate international examples of public banks, both historical and current. The final section investigates the potential role of a public banking option in the to regulate, and compete with, financial firms through the primary market in basic banking services.

Everyday Financialization: The Case of UK Households

Ariane Hillig
Open University


In recent decades, the UK government has been promoting private asset ownership while reducing publicly funded welfare programmes. This asset-based welfare approach calls on households to accumulate assets for the purpose of providing financial security during periods of income drops, such as in case of ill health, unemployment or retirement. Drawing on semi-structured interviews, I explore how norms of asset ownership in the form of homeownership, savings and pension investments impact everyday life. More specifically, I demonstrate how households restrict themselves in everyday spaces of consumption and work in order to be able to save and invest. Interestingly, finance rationality also enters and modifies relationships. Informed by Foucault’s concept of governmentality, I argue that those asset norms represent a power technology, reinforcing existing power relationships and controlling everyday practices.
JEL Classifications
  • B5 - Current Heterodox Approaches