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Krugman: Think Beyond Stimulus to New Economy |
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Once the nation’s economy begins to recover; we should build a durable and broadly shared prosperity. That was the message Nobel laureate Paul Krugman brought today to the first in a series of conferences on progressive ideas to turn around the economy.
Speaking to more than 800 participants at the Thinking Big/Thinking Forward conference in Washington, D.C., Krugman said that to prevent the nation’s economic pit from becoming a permanent trench, we will need a combination of fiscal and financial policies. And that will require the government to invest in the economy in a big way to spur demand.
Krugman, who won the Nobel Prize in economics in 2008, disputed Republican claims that the best way to stimulate the economy is through tax cuts.
There’s more bang for the buck from government spending than from tax cuts.
Krugman added that the one thing conservative opponents of the stimulus legislation fear the most is that when the economy recovers, people will look back at the government programs and say they were a good thing. And that would reverse the mantra of the past 30 years that “less government is better government.”
We have spent 30 years shortchanging public investment in the name of ‘government is bad’—30 years shortchanging the things government can do to make us richer and our lives better.
Larry Mishel, president of the Economic Policy Institute President (EPI), agreed:
It’s about economic security. We need health care for everybody; we need retirement security. We have a labor market mechanism that’s broken. We have institutions that are weak, that don’t really guarantee that when we have a growing economy, that we have living standards growing.
We also need to pursue globalization on a different basis—not on the corporate agenda, but in a way we can help people in other countries grow as well as protect the living standards and prosperity in our country. We need to this in a bold way and in a sustainable way.
The one-day conference was co-sponsored by The American Prospect, Institute for America’s Future, Demos and EPI. Conference organizers say this is the first salvo in an ongoing campaign and issued a manifesto for going forward, Towards an Economics of Shared Prosperity, which said:
This first conference will focus on the need for substantial, strategic and sustained public investment in our future. Future meetings will address the other core elements of a new economic strategy to create a widely shared and sustainable prosperity in a global economy. It is time to think anew. This conference is designed to help begin that effort.
Shared prosperity calls for a “revived social contract to replace the private-sector promises on health care, pensions and job security that have been shredded by the corporations and the financial speculators.”
We must ensure that every child gets a healthy and fair start in life, from pre-natal care to high-quality education. We must construct a 21st century infrastructure. We must support the research and development that generate breakthroughs that forge the markets of the future. We’ll need far more investment in workers and a commitment to a society where all jobs pay a living wage.
Also today , the Institute for America’s Future issued a new report, Beyond Recovery: America’s Public Investment Deficit, which warns that once we pull the economy out of recession, we cannot return to business as usual, that is:
…a high-consumption, low-wage economy based on asset bubbles and foreign borrowing. That strategy was never sustainable and is no longer available.
Instead, the report says, a sustained recovery will require a dramatic change of course—and a dramatic change of priorities.
We must make the investments vital to a dynamic economy able to sustain a broad middle class in a global economy. This requires investing in the public goods that are the foundation of a healthy society and a dynamic economy—from a 21st century infrastructure to world-class public schools. We need to curb short-term private speculation and bolster long-term public investment.
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Hey, thanks for this report. I am a retired high school teacher/AFT member from Austin, TX
Found out about this conference over at DailyKos in Thinking Big, Thinking Forward
by Dana Houle aka DHinMI
Wed Feb 11, 2009 at 09:25:44 AM PST
http://www.dailykos.com/story/2009/2/11/114417/719
Found your story by searching Google News tonight. Good work. Krugman is so right.
Krugman’s analysis is spot on insofar as the economy and economic policies are concerned. However, he needs to go one step further. It has been disheartening to me to see what has happened to organized labor over the past decades. Unions have borne the brunt of the effects of globalization being accused of excessive benefits and high wages while management carves out huge bonuses. I suggest that in addition to the economic reforms there also be some management reforms beginning with at least one worker or preferably union representative on corporate boards of directors. Workers have to know why they are being asked to take wage cuts while management continues to draw large bonuses. It reached the level that it is now absurd.
Krugman is one of the few voices for the people.I too wish he would go further and call for passage of the Free Choice Act so everyone could join a union.
It was interesting that in the New York Times today Nicholas Kristof advocated nationalizing the banks. I couldn’t agree more. We are essentially buying them, but instead of benefitting from ownership we are socializing the costs and privatizing the profits. Meanwhile Republicans quibble about what union workers make while turning a blind’s eye to the obscene wages and bonuses of the geniuses that caused the whole mess.
What say we demand nationalize the banks. The government could loan money directly to the people instead of paying thieving bankers to do so.
This article and the linked “manifesto” discuss the massive failures in the economy of the last 30 years. But the big “C” word (Capitalism) is never mentioned. The “manifesto” is baffling and confusing because it is designed to put you to sleep. No mention of ending Capitalism means that ultimately nothing will change.
The U.S. capitalist economy, after thirty years of decline, has finally crashed and taken the global capitalist system down with it. Like Humpty Dumpty, all the “bailouts” and looting of the treasury will never be able to restore the profitability of U.S. capitalism. The unending wars, (that have benefitted the oil companies and the military-industrial complex), are now increasingly destroying the economy. This country, now massively in debt by trillions to China and Japan, cannot afford any more wars, it’s last source of profit.
When these gangster capitalists (including slick talking Obama) start talking about scaling down Social Security, destroying public education as “too expensive” while at the same time giving more tax cuts to the rich
….. the time to “draw the line” is now.
The millionaires and billionaires want to return to a world of vast easy profits by gaming with the economy (hedge funds, commodities speculation, Wall Street manipulations, etc.)
U.S. capitalists have moved all the goods productive jobs essential to a livelihood for U.S. working people OUT OF THE COUNTRY. These jobs cannot ever be restored by “Buy American” campaigns. That only makes the “Buy American” owners wealthy, and still leaves the worker with second rate jobs with few benefits. The “Buy American” protected companies will still want to make maximum profits at the expense of working people.
There is no return possible to any sort of “glorious” capitalism as far as working people are concerned. The time is now to think in terms of creating a new economy to focus on making and producing the material economic needs of all the people. We must demand an end to gangster capitalim and transition
to a new socialist economy “of, by and for” working people.
What would a transition to a socialist economy look like? These are minimal things needed to end the looting of the economy for private profit. The wealth generated in the economy should be re-distributed to benefit universally all working people that produce the goods and services that sustain society.
As it is now, the vast wealth of this country has for decades been “re-distributed” into the hands of a small minority of individuals and corporations. The top 5-10 percent of the wealthiest own and control 90 percent of the wealth.
1. End the wars in the Middle East for oil profit and armaments profit. Cut the defense budget by 50 percent. Shutdown the 700 plus foreign bases. End privatization of the Federal government. All troops out of Afghanistan, Iraq, etc.
Audit and minimize the CIA budget (OMB: trillions of dollars “disappeared”).
The “peace dividend” expected with the collapse of the Soviet Union (1991) should now be used “of, by and for” the people to secure world peace.
2. Nationalize the energy industry. That is Socialize (under worker management) the oil companies,( gas, coal, nuclear, etc.)that refuse to clean up their vast pollution because it would affect their profits. Use the profits from these polluting industries to phase them out and minimize their production, fund sustainable non-polluting transportation.
3. Socialize (nationalize with worker management) auto production to non-polluting private cars, and maximize public transportation. Bailing out the current incompetent “big 3″ owners, without any regulation or new management is an utter waste of money. Jobs? Cheaper to pay all the workers for a full retirement rather than re-build a failed industry. (Perhaps re-tool for public transportation vehicles, non-polluting transportation.)
4. SOCIALISE PUBLIC HEALTH. Establish a “single-payer” universal national health program devoted to bringing health care to everyone by cutting out the for-profit corporations from the system. Costs of health care will drop by at least one-half, as other foreign countries have experienced.
5. EDUCATION IS A UNIVERSAL HUMAN RIGHT AND NECESSITY! Establish free universal quality public education from pre-school through college and adult education. Essential for a quality human life today. Millions of people will be needed to learn new survival skills if humanity is survive this century. Environmental scientists, urban engineers, medical personnel, teachers, information technolgy, agricultural scientists, etc. will be needed to maintain survival under increasingly unstable global climatic conditions.
6. Socialism will is now essential for the survival of humanity.
So, what are the next steps for the labor movement and working people?
A. End the self-destructive “partnership with business”. Corporate
capitalism is in a never ending class war to forever impoverish working people to maximize profit. Today the function of unions to help corporations in this
process!
2. Break with the Democratic Party. The Democrats(including Obama) are now fully controlled by corporate money and agendas.
3. Create a new socialist political party with a platform based on the needs of the people. Run candidates for all local, state and federal offices to implement the socialist agenda. The new party runs against both Republicans and Democrats who forever support the agenda of corporate profit and wars for oil.
4. Create a new mass media (tv, radio, newspapers,) to reach, inform, educate and organize all working people, not just organized into unions.
For decades corporte media has brain-washed the working people of America into accepting the rule by corportions. The end result today has become the increasing impoverishment of American working people including the “middle class”.
Socialism is now essential for the survival of humanity.
For a socialist perspective on current affairs read:
World Socialist Web Site: http://www.wsws.org)