It is widely recognized that economists are not very good at economics. That is why we are looking at a decade of economic stagnation with tens of millions of people being unemployed or underemployed in Europe and the United States.
If economists were better at economics, central banks in the United States and Europe would have recognized the housing bubbles that were driving economies in the last decade. They would have taken steps to rein them in before they grew so large that their inevitable collapse would sink the world economy.
We recently had the opportunity to see that economists are no better at moral philosophy than economics. In a recent paper, Harvard economics professor Greg Mankiw, the former chief economist to President Bush and one of the country’s most prominent conservative economists, compared progressive taxation to forcefully removing a person’s kidney for a transplant.
That is probably not how most people would view imposing a high tax rate on rich people.
Last Friday, my wife, Susan, was out where Santa Monica meets Brentwood to tell the President not to approve the Keystone XL pipeline. No one caught a glimpse of him, of course. What she did see were scores of expensive cars moving down San Vicente – black, big SUVs, as usual, and top-of-the-line Mercedes and BMWs but also Jaguars, Ferraris, a Rolls, even a Lamborghini, plus others she couldn’t name. These cars begin at $75,000 and go to the mid-six figures.
Also trying to wind though the traffic maze were the workers, gardeners in small, beat-up Toyota pickups, house maids in compacts from 20 years ago, bunches of Latinas waiting at the bus stop for public transportation and delayed by the President’s presence at a fundraiser in a nearby home. The juxtaposition of the vehicles of the very wealthy and those of their servants was what she found remarkable about the experience.
In the previous week we reposted this fact-packed, viral video (more than four million views at last count) about economic inequality in America. Its deft use of graphics makes this a handy resource — and worth a second look.
Few American economists want anything to do with social movements. Then there’s Robert Pollin, who has embraced his role as a progressive with a prolific output of books, studies and articles that make the economic case for greater equality.
Pollin, who will be honored at the L.A. Alliance for a New Economy’s (LAANE) City of Justice Awards Dinner next month, rose to prominence in the late 1990s as the most ardent academic defender of living wage laws. In recent years he has advanced the case for a new green economy based on good jobs and environmentally sensible policies.
Pollin, a professor of economics at the University of Massachusetts – Amherst and co-director of the Political Economy Research Institute, may be left of center but he is no business-bashing liberal. To the contrary, he learned from his father – the late Abe Pollin,
Suppose the growth of the U.S. economy slows to a trickle. I don’t mean in the next quarter or next year or even over the next decade. I mean from this time forth.
Gordon writes that three industrial revolutions have taken place over the past 250 years: the first centered on the steam engine and railroads; the second based on electric power, the internal combustion engine and indoor plumbing; and the third rooted in computers and the Internet. By substituting mechanical power for human power in the production process and by greatly speeding up transportation and communication, Gordon asserts, the second revolution raised productivity and wealth far more than did the other two.
Indeed, U.S. productivity gains and the concomitant increase in wealth have slowed in recent decades from the levels the United States historically enjoyed.