Economic Growth Program: Policy Papers

There is widespread recognition that the financial crisis which triggered the Great Recession was significantly due to financial excess, particularly related to real estate. Now, policymakers are looking to reform financial systems in hope of avoiding future crises. But like the drunk who looks for his lost keys under the lamppost because that is where the light is, policymakers remain fixated on capital standards because that is what is already in place.

If we go by election results, and no better guide to our national mood exists, the years of conservative hegemony in the United States are over, at least for the foreseeable future.  Not only has the country elected a Democratic president and Congress, but conservative ideas, which once had seemed so innovative, are increasingly stale or non-existent.  Meanwhile, the Republican Party seems both directionless and leaderless. 

The economy has lost 8 million jobs since the beginning of the recession.   But because the population is growing, we need to create over 9.6 million jobs.  Due to severe job loss and steady population growth, the unemployment rate has soared to 9.8%, nearly as high as during the early 1980s.

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What the Government Can Do to Better Promote Job Creation by Timothy J. Bartik Jobs: What Can We Do? by James K. Galbraith The Time Has Come for Direct Job Creation by L. Randall Wray

Back in 2007 we used to refer to the current crisis as the "U.S. subprime crisis". But while it was the area where troubles first emerged, the subprime mortgage sector turned out to be only the tip of the iceberg. Today, the Lehman crisis of mid September 2008 is still widely seen as the critical blunder that pushed the U.S. and world economies off the cliff. And yet, the Lehman bust may have been no more than just the trigger of an implosion of underlying financial… more

Fiscal conservatives are opportunistically looking to use the recession induced spike in the budget deficit to revive their crusade for fiscal austerity. The case for fiscal austerity is based on flawed economic analysis and it is not supported by thoughtful budget analysis. It was the wrong agenda before the crisis and it is even more wrong now.

It might be called the "World's Scariest Chart."  It is a snapshot of the fragile foundations of the American economy and the epic boulder it now finds itself trapped beneath. The graph shows total debt outstanding in the United States, both secured and unsecured, as a percentage of GDP. In 1981 it was a manageable 168 percent, in 1996 253 percent, and by the first quarter of 2009 with the collapse of the housing and credit bubbles it had reached a staggering 373 percent of GDP.

 

"The Koizumi reforms" was one of the portmanteau concepts most commonly bandied about in Japanese political debates in the summer of 2009 as the parties geared up for the August election. Japan had in fact embarked on its neo-liberal agenda of deregulation and privatization well before the charismatic Mr. Koizumi laconically offered his "no gain without pain" recipes, but it was pushed with most enthusiasm during his premiership from 2001 to 2006.

Despite its aim, the European Trading Scheme (ETS) for carbon is widely regarded as an inefficient market. The initial design of the scheme has caused trading reactions that do not follow the pricing patterns of other, more efficient commodities.

Within ETS, it isn’t carbon’s price volatility that makes its market seem uncharacteristic of other commodities markets; commodity markets are often characterized by volatility. Instead, it is the fact that carbon’s price drivers are not so easily pinpointed and, therefore, its… more

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German Chancellor Angela Merkel has just completed her first official visit to Washington since President Barack Obama took up office. At home Mrs. Merkel has only a few months left to go until an upcoming general election will determine her own political future. This was surely one more reason to send a message of harmony with President Obama back home, as the new U.S. president, much in contrast to his predecessor, enjoys great popularity among German voters. Elections aside, such harmonious gestures can hardly deflect

In recent weeks, new signs of an economic recovery have emerged in the form of stock market rallies, surprisingly high bank profits, and better-than-feared official unemployment and economic growth reports. But accompanying these so-called green shoots is worrying evidence of a recovery that could be compromised if not cut short altogether by high levels of unemployment and by a long period of unusually weak and uneven job creation.   Not only is actual unemployment more severe than is reflected in official measures, it is also concentrated in those

Recently, discussions around health care reform have begun in earnest among politicians and policymakers in Washington, D.C. and beyond. President Obama has spent the month of June hitting the trail and the airwaves making the case for reform,  and legislators are now aiming to pass a health care reform bill sometime this summer. With the possibility of comprehensive changes to health care on the horizon, it is important for leaders and policymakers—as well as citizens—to understand the full argument for… more

Green investment is a major pillar of the president's economic recovery plan.  Yet, America's dependence on foreign countries to produce green technologies may undermine this recovery strategy.  Using a list of green goods derived from the Organization of Economic Cooperation and Development (OECD) and the Asia-Pacific Economic Cooperation (APEC), we have determined that the United States ran an overall green trade deficit of -$8.9 billion in 2008, including a deficit of -$6.4 billion in the critical category of renewable energy,… more

Davos Man, by all accounts, is worried. The severity of the global economic recession has alarmed many of the architects of the global economy. Fears of resurgent economic nationalism are rampant. At the same time, some world leaders - most prominently, French President Nikolas Sarkozy, as well as German Chancellor Angela Merkel - argue for instituting a new regime of regulation for the financial sector that will be global rather than merely national in scale.

The United States now confronts its greatest economic challenges since the Great Depression. In addition to resolving crises in financial and housing markets, trade deficits with China and on oil must be addressed for the U.S. economy to achieve robust growth.

This speech was delivered at The New School on May 19, 2009.

Views on the U.S. economy

On April 9, 2009, the Securities and Exchange Commission (SEC) released five proposals for reinstating the uptick rule and initiated a 60-day public comment period. Now, nearing the end of that comment period, the opinions of senators and financial commentators on the proposed legislation must be ringing in the SEC's ears.  Jim Cramer, the host of the Mad Money TV program, spoke fervently in support of the uptick rule during his May 4th broadcast while Senator Ted Kaufman, another supporter, noted that SEC Chairwoman Mary Schapiro should… more

The 2008 presidential election was not about globalization or U.S. trade policy. However, the challenges facing the administration of President Barack Obama-the financial crisis, the lengthening and deepening recession-are inextricably bound up with America's trading relationships. A "business as usual" trade policy will not deliver the economic changes that President Obama has promised the public, nor restore Americans' faith in their country's engagement with the global economy.