Economy
Is There Anything That Can Be Done?
Perhaps the most remarkable aspect of America’s current economic crisis is its persistence. The problems that began in 2007 with the collapse of the sub-prime housing market—a market that few in the world had previously heard of—are still burdening us today. And it’s not yet clear whether our national economic stagnation, high-levels of unemployment, and rising political polarization are going to dissipate anytime soon. READ MORE >>
Forget Bailouts and Stimulus. Let’s Think Small.
This article is a contribution to 'Is There Anything That Can Be Done? A TNR Symposium On The Economy'. Click here to read other contributions to the series. READ MORE >>
Want to Fix the Economy? Start With Social Security.
This article is a contribution to 'Is There Anything That Can Be Done? A TNR Symposium On The Economy'. Click here to read other contributions to the series. READ MORE >>
There’s No Shortage of Work. There’s a Shortage of Workers.
This article is a contribution to 'Is There Anything That Can Be Done? A TNR Symposium On The Economy'. Click here to read other contributions to the series. READ MORE >>
The Latest Jobs Report Is All Bad News
The Labor Department reported that the economy created 117,000 jobs in July and revised the prior months’ growth slightly to bring the average over the last three months to 72,000 jobs per month. This rate of job growth is below the 90,000 a month needed to keep pace with the growth of the labor force. Consistent with this fact, the employment to population ratio (EPOP) fell slightly to 58.1 percent, tying its previous low for the downturn. While the unemployment rate edged down to 9.1 percent, this was entirely attributable to people leaving the labor force. READ MORE >>
Why the Global Economy Is Tanking
A Fix for the Debt Ceiling That No One Is Talking About
Stop Blaming Wall Street
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Stop Blaming Wall Street
As the U.S. economy fails to recover, there is a growing fear that the United States has entered a phase of long-term decline. Conservatives blame “big government” for throttling entrepreneurship; liberals tend to take aim at Wall Street. Rolling Stone writer Matt Taibbi memorably described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Among less inventive critics, the term in vogue is “financialization.” According to author Kevin Phillips, who popularized this notion, financialization is “a process whereby financial services, broadly construed, take over the dominant economic, cultural and political role in a national economy.”Elements of this thesis can be found in scores of books, articles, and blog posts on the state of the U.S. economy. Phillips blames financialization not just for the “Great Recession,” but for “excessive debt, great disparity between rich and poor, and unfolding economic decline.” In their book, 13 Bankers, former International Monetary Fund (IMF) chief economist Simon Johnson and James Kwak blame financial factors for the “anemic growth” in the overall economy prior to the crash. And, in an influential essay—titled “WHAT GOOD IS WALL STREET?”—The New Yorker economics writer John Cassidy pointedly contrasts the period when regulators restrained the growth of the finance sector (when wages, investment, and productivity grew, lifting “tens of millions of working Americans into the middle class”) with the period of growth experienced by the finance sector since the early ’80s (when “financial blowups have proliferated and living standards have stagnated”). One thing is clear: Financialization, in some form, has taken place. In 1947, manufacturing accounted for 25.6 percent of GDP, while finance (including insurance and real estate) made up only 10.4 percent. By 2009, manufacturing accounted for 11.2 percent and finance had risen to 21.5 percent—an almost exact reversal, which was reflected in a rise in financial-sector employment and a drop in manufacturing jobs. It is also clear that high-risk speculation and fraud in the financial sector contributed to the depth of the Great Recession. But Phillips, Johnson, and the others go one step further: They claim that financialization is the overriding cause of the recent slump and a deeper economic decline. This notion is as oversimplified, and almost as misleading, as the conservative attack on the evils of big government. READ MORE >>
