Who Broke the Economy?
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If you want to prepare yourself for the inevitable election year discussions/arguments with your right-wing uncle or tea party neighbor about the nation’s economy and how we got into the ditch that we’re finally driving out of, check out Failure by Design: The Story Behind America’s Broken Economy.
Named last month by The Washington Post as one of the best political books of 2011, it is a broad narrative of how the economy has failed to deliver for most Americans over much of the past three decades. Says author Josh Bivens, an economist for the Economic Policy Institute (EPI):
Over the past 30 years we’ve seen this rapid increase in inequality in the U.S. economy with more and more of economic growth going to a smaller and smaller slice of the people. None of that was an accident…it was not just something that happened….It happened because we very much changed the policy of the U.S. economy.
He says the policies that were put into place—including “an all assault on the right of workers to organize”—guaranteed “that the already rich got an ever increasing share of economic growth.” In other words, those policies sowed the seeds that grew into the 99 percent.
Click here for a video with Bivens. The book is available through the EPI bookstore and Amazon.
Experts: Let Deficit Grow to Stimulate Economy
The road to economic growth and a full recovery lies in allowing the deficit to grow temporarily and investing in programs that put money in the hands of consumers, two nonpartisan experts said.
Testifying before the congressional supercommittee yesterday, Congressional Budget Office Director Douglas Elmendorf warned that to avoid slowing the economy even further, the deficit must get worse before it gets better:
There is no inherent contradiction between using fiscal policy to support the economy today and imposing fiscal restraint several years from now. If policymakers wanted to achieve both a short-term economic boost and longer-term fiscal sustainability, a combination of policies would be required: changes in taxes and spending that would widen the deficit now but reduce it later in the decade.
Report: Deficit Commission Proposals Would Cost 4 Million Jobs
The deficit reduction plan released last week by the co-chairmen of the National Commission on Fiscal Responsibility shows that this so-called budget deficit commission shows the commission has run severely off course.
The recommendations issued by co-chairs Alan Simpson and Erskine Bowles would cost 4 million jobs over three years and reduce economic growth by 0.7 percent in 2012, 1.4 percent in 2013 and 1.9 percent in 2014, according to an analysis by the Economic Policy Institute (EPI).
The Simpson-Bowles approach calls for job-killing budget austerity to begin in October 2011, even though most economic forecasters expect unemployment to remain as high as it is today or even increase by then.
Simpson and Bowles also call for deep cuts in Social Security benefits, even though Social Security is not responsible for our long-term budget problem and the public is overwhelmingly opposed to benefit cuts.
Federal Reserve Should Bail Out Main Street, Not Wall Street
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The Federal Reserve’s announcement this week that it will purchase $600 billion of Treasury debt, also known as “treasuries,” to help stimulate the economy should be a wake-up call to lawmakers that government needs to spend more, not less, to create jobs, economists say.
Here’s Josh Bivens, an economist at the Economic Policy Institute (EPI):
[The Fed purchase] is a welcome acknowledgement that the economy needs more help.…Congress should follow the Fed’s lead and provide this needed support, starting with an extension to unemployment benefits that are set to expire at the end of this month.
Obama’s Economic Recovery Plan Already Created, Saved 720,000 Jobs
President Obama’s economic recovery package created or saved some 720,000 jobs in the second quarter, according to an analysis by the Economic Policy Institute (EPI). Although the economy continued to shrink, the effect would have been much worse without the recovery act, says EPI economist Josh Bivens.
The Commerce Department is expected to announce tomorrow that the nation’s gross domestic product (GDP) dropped by about 1.5 percent in the second quarter, one-fourth the rate in the first three months of the year. Without the recovery legislation, the rate would have been around 4.5 percent, Bivens says. That translates into about 720,000 jobs, he adds.
Managers, Not Workers, Overpaid in Manufacturing Jobs
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Some pundits and lawmakers—Sen. Bob Corker (R-Tenn.) comes to mind—falsely claim that union workers are overpaid and are to blame for the decline of U.S. manufacturing. But a new report, released last week by the Economic Policy Institute (EPI), busts that myth and shows the convenient conventional wisdom to be wrong.
EPI economist Josh Bivens lays out the facts in Squandering the Blue-Collar Advantage, which show that U.S. manufacturing’s blue-collar workforce, far from destroying U.S. competitiveness, is actually one of the key elements making a positive contribution to competitiveness—a contribution being undermined by a variety of other factors. Click here to read the entire report.
Most Workers Lose in Global Economy
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Here is one strong reason for the Obama administration and Congress to think big about how to reduce economic inequality and insecurity in the years to come: Most working Americans have suffered steady and significant income losses that stem from current global economic policies, according to a new book.
While the effect of global trade on American workers is often measured in jobs lost, Josh Bivens, an economist with the Economic Policy Institute (EPI), argues in his new book that the vast majority of U.S. workers have been hurt by increased global trade—through diminished wages, as well as lost jobs.
In Everybody Wins, Except for Most of Us, Bivens says global trade likely cost a full-time U.S. worker earning the median wage some $1,400 in 2006. This is as much or more than what median wage-earners lost during the recession of the early 2000s. For workers on its losing end, globalization has felt like a chronic (if largely unseen) recession.
