Naomi Jagoda writes:  Democratic presidential candidate Hillary Clinton called for an additional 4 percent tax on people making more than $5 million per year.  Clinton called the tax a “fair share surcharge” that would make sure wealthier taxpayers pay higher tax rates.

“This surcharge is a direct way to ensure that effective rates rise for taxpayers who are avoiding paying their fair share, and that the richest Americans pay an effective rate higher than middle-class families,” a Clinton campaign aide said.

The surcharge would raise more than $150 billion over 10 years.  It is part of Clinton’s plan to build on the principle of the “Buffett Rule” to raise the effective tax rates of the rich.

The Buffett Rule, named after philanthropist billionaire Warren Buffett, would ensure that those making more than $1 million pay at least 30 percent of their incomes in taxes.

Clinton intends to release more proposals that would increase the amount of taxes paid by the wealthy later this week, the aide said.

The former secretary of State also plans to release more proposals that would provide tax relief to the middle class. She has already proposed tax credits for excessive healthcare costs and for family members caring for ailing parents and grandparents.

The campaign of Sen. Bernie Sanders (I-Vt.), Clinton’s main rival for the Democratic presidential nomination, criticized the proposal. as “too little too late.”

Without defining surcharge, and without suggesting a fair tax overhaul, Clinton’s proposal may be meaningless.  Let the dialogue begin, for instance, on whether the first $50,000 of every American’s income go free of tax.  Donald Trump has suggested this.

Alexander Bolton writes:  As the price of oil plunges to its lowest point in 12 years — and threatens to drag the broader U.S. economy down with it — lawmakers say Congress should consider helping teetering energy companies with policy fixes beyond the decision to lift the oil-export ban.

Among the proposals under discussion: Expediting the process for exporting liquefied natural gas, and upgrading infrastructure to move energy to market more quickly and cheaply.

Another top priority is loosening environmental and other regulations. But moves in that direction are highly unlikely while a Democrat remains in the White House.

With oil currently below $33 a barrel, some on Capitol Hill are calling for quick action.

Some lawmakers are floating the possibility of taking retaliatory trade measures against Saudi Arabia, which has flooded the market with cheap oil in what some analysts see as a bid to drive America’s growing shale oil industry out of business.

The House version of the energy legislation includes language to expedite natural gas exports.

The Obama administration has proposed nearly 100 regulations for the oil and gas industry, ranging from restrictions on methane and carbon dioxide to limits on operating on federal land.

Legislation passed last month to lift the four-decade ban on oil exports is expected to boost exports by 500,000 barrels a day but so far it has had little impact on prices.

Goldman Sachs has warned that oil may sink as low as $20 a barrel, which would shake financial markets by sinking energy stocks, driving companies into bankruptcies and setting off a round of junk-bond defaults.

Third Avenue Investment, a New York-based fund, last month blocked clients from pulling their money, prompting a sell-off of high-yield bonds and evoking memories of the 2008 meltdown.

Growing tensions between Saudi Arabia and Iran over the execution of a Shiite cleric might have been thought to have boosted prices by raising the specter of regional conflict. But that had little effect on oil prices this past week.

Bankruptcies among oil and gas companies have hit the highest quarterly level since the midst of the 2008 financial crisis, Bloomberg Business reported last month.

Oil and gas companies have laid off more than 250,000 workers and that number could swell in the months ahead.

Saudi Arabia, taking advantage of its low extraction costs, has refused to curb oil production in a bid to expand market share and undercut competitors. This has raised the prospect of the U.S. government taking action to level the playing field for domestic companies.

If the energy industry continues to sink, other proposals will pop up in the energy negotiations due to kick off next week.  There are calls for new infrastructure: the right mix of pipelines, transmission lines, rail, roads,” he said.

J.W. Mason writes:  To the surprise of no one, the Federal Reserve recently raised the federal funds rate — the interest rate under its direct control — from 0–0.25 percent to 0.25–0.5 percent, ending seven years of a federal funds rate of zero.

But while widely anticipated, the decision still clashes with the Fed’s supposed mandate to maintain full employment and price stability. Inflation remains well shy of the Fed’s 2 percent benchmark (its interpretation of its legal mandate to promote “price stability”) — 1.4 percent in 2015, according to the Fed’s preferred personal consumption expenditure measure, and a mere 0.4 percent using the consumer price index — and shows no sign of rising.

US GDP remains roughly 10 percent below the pre-2008 trend, so it’s hard to argue that the economy is approaching any kind of supply constraints. And setting aside the incoherent notion of “price stability” (let alone of a single metric to measure it), according to the Fed’s professed rulebook, the case for a rate increase is no stronger today than a year or two ago.

While the consensus view considers the main job of central banks to be maintaining price stability by adjusting the short-term interest rate, this has never been the whole story.

The conscious planning that confines market outcomes within tolerable bounds is hidden from view because if the role of planning was acknowledged, it would undermine the idea of markets as natural and spontaneous and demonstrate the possibility of conscious planning toward other ends.

The Fed is a central planner. One particular problem for central bank planners is managing the pace of growth for the system as a whole. Fast growth doesn’t just lead to rising prices — left to their own devices, individual capitalists are liable to bid up the price of labor and drain the reserve army of the unemployed during boom times. Making concessions to workers when demand is strong is rational for individual business owners, but undermines their position as a class.

Modern central bankers pay close attention to the somewhat misleadingly labeled labor market, and use low unemployment as a signal to raise interest rates.

So in this respect it isn’t surprising to see the Fed raising rates, given that unemployment rates have now fallen below 5 percent for the first time since the financial crisis.

Indeed, inflation targeting has always been coupled with a strong commitment to restraining the claims of workers. Paul Volcker is now widely admired as the hero who slew the inflation dragon, but as Fed chair in the 1980s, he considered rolling back the power of organized labor — in terms of both working conditions and wages — to be his number one problem.

Volcker’s successors at the Fed approached the inflation problem similarly. Alan Greenspan saw the fight against rising prices as, at its essence, a project of promoting weakness and insecurity among workers.

Testifying before Congress in 1997, Greenspan attributed the “extraordinary’” and “exceptional” performance of the nineties economy to “a heightened sense of job insecurity” among workers “and, as a consequence, subdued wages.”

As Greenspan’s colleague at the Fed in the 1990s, Janet Yellen took the same view.

And when a few high-profile union victories, like the Teamsters’ successful 1997 strike at UPS, seemed to indicate organized labor might be reviving, Greenspan made no effort to hide his displeasure.

While it might look like naked class warfare to deliberately raise unemployment to keep wage demands “subdued” (in the soothing language of the Fed’s public statements), the Fed assures us that it’s really in the best interests of everyone, including workers.

What happens when you end medical malpractice lawsuits?

The Danish health system’s treatment of negligence issues offers lessons for policymakers in the United States, where medical harm remains widespread and the mechanisms for addressing it are often cumbersome and adversarial. The Danes’ primary focus is on helping patients who have been hurt by the health care system. Data helps flag offenders.

The U.S. system for compensating injured patients – medical malpractice lawsuits – effectively shuts out patients when the potential damages are small. Proving negligence, the usual standard for winning compensation, is difficult. There are scant incentives for doctors and hospitals to apologize, reveal details about what happened, or report errors that might unveil a pattern.

Denmark offers a radically different alternative.  Alternative responses to patient harm have been tried on a smaller scale. Virginia, for example, has a program designed to compensate for severe neurological childbirth injuries that is similar in some ways to the Danish system.

Common to all these programs is a commitment to provide information and compensation to patients regardless of whether negligence is involved. That lowers the bar of entry for patients and doesn’t pit doctors against them, enabling providers to be open about what happened.

Denmark’s compensation program has been in place since 1992, replacing a lawsuit-based approach much like that in the U.S.  Today, medical injury claims aren’t handled by the Danish court system but by medical and legal experts who review cases at no charge to patients. Patients get answers and can participate in the process whether or not they ultimately receive a monetary award.

Filing a claim is free. Patients are assigned a caseworker to shepherd them through the process. The hospital or doctor is required to file a detailed response, which patients may rebut. Patients have access to their complete medical record and a detailed explanation of the medical reviewers’ decisions. All of this is available for patients and their families through an online portal, which alerts them when there are developments in their claims process.

Overall, about one in three patients who file a claim is compensated. The minimum eligible claim is under $2,000, and the average paid out is $30,000, or about 15 percent of the typical amount awarded in lawsuits against U.S. doctors.

However, it’s estimated that more than seven times as many claims are filed per capita in Denmark, and about four times as many patients per capita receive some award. A claim for a few thousand dollars would not be worth it in the U.S. system because of the high cost of pursuing lawsuits.

The Danish health care system helps patients file medical injury claims by providing an independent nurse with legal training to assist at every hospital.  Danish doctors are known to file compensation claims on behalf of patients, which occurs in about 10 percent of the cases.

The Danish system is not perfect. Although the data collected from claims is freely shared with researchers, injury and error rates are not published so that patients could use them to select providers. By design, there is not communication between the claims and disciplinary systems.

Proposed alternatives to the U.S. medical malpractice system have been strongly opposed by some powerful interest groups, most prominently trial lawyers.