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.
» Read more about: Economic Inequality: The Heart (and Kidney) of the Matter »
My friend pastors a vibrant congregation in the Mid-City area of Los Angeles. Her people reflect the neighborhood and the church worships in both Spanish and English. In a conversation this week I asked her how her folks were doing. Her voice dropped, and she shook her head. “There are no jobs,” she said, “and the ones who work can only get part-time hours.” With dismay, she said, “I don’t know how they are making it.”
I don’t either. At one extreme, high-end properties – homes that sell for several millions of dollars – had a banner year in 2012. Sales of super-expensive automobiles reached record levels. Exotic vacation destinations are packed. The number of jobs in Los Angeles County has reached about 4.3 million, almost the number we had before the Great Recession began five years ago, although there are now also more people looking for work than then.
» Read more about: Of Biblical Proportions: Inequality and Poverty Wages »
On November 6, 2012, the people sent a message: Americans cannot be bought. We do believe there is a place for government in providing services that the private sector is ill-equipped to provide.
We have experienced a change in attitude across the country, demonstrated by many of the Tea Party politicians losing their seats and more progressive Democrats winning seats. But we need to stay vigilant. The end of the year did not bring major tax increases for working people and spending cuts, but everything could change in the coming months. The fight hasn’t ended.
I don’t mind the Bush tax cuts expiring for everyone if that is what it takes for the richest One Percent to start contributing more to our economy. But I strongly disagree with the cutting of essential benefits, especially Social Security, Medicare and Medi-Cal. I also reject the notion that there must be a “balanced approach”
It seems like a hopeless conundrum. We need our government – federal state and local – to stimulate the economy and help create jobs. But our government has no money. Or at least less money. So does that mean that it’s foolish – or unfair – to insist that our local, state and governments do “something” to create more and better jobs for people who desperately need them?
Well, no. In fact, there is a lot that our government can do to double or triple the number of jobs that are being created in the U.S. with the same or similar amounts of money. We just have to do things in a smarter and more strategic way to get much better results.
Here’s what I mean. As people may imagine, local, state and the federal governments buy billions of dollars worth of goods and services every year. Think about all of the buses,
» Read more about: Winning More Jobs from Government Investment »
With tens of millions of Americans still out of work, the idea of the U.S. achieving full employment might seem like a pipe dream.
Not so, argues Professor Robert Pollin in his new book, Back to Full Employment. In fact, Pollin (who uses the standard definition of full employment as four percent or less unemployment) suggests that the ongoing jobs crisis offers the perfect opportunity for us to pursue what was once a cornerstone of national economic policy.
Pollin, co-director of the Political Economy Research Institute at University of Massachusetts, Amherst, is no stranger to controversy. Beginning in 1996, when he was asked by living wage proponents in L.A. to conduct a study on how such a policy would affect the city, he has regularly incurred the wrath of free market diehards with his findings that modest mandated wage increases do not wreak havoc on business.
» Read more about: Economist Robert Pollin on Restoring Full Employment in America »