John Edwards’ exit from the presidential race puts his supporters up for grabs. Both Senators Clinton and Obama want those votes. Here’s how to win them.
The central plank of the Edwards’ campaign was restoring a prosperous and secure middle class, which requires ending wage stagnation and having wages again grow with productivity. This must be the central economic policy goal of any candidate wanting the Edwards vote. (more…)
For the past 25 years, the so-called “Washington Consensus†– comprising measures aimed at expanding the role of markets and constraining the role of the state – has dominated economic development policy. As John Williamson, who coined the term, put it in 2002, these measures “are motherhood and apple pie, which is why they commanded a consensus.†(more…)
In recent months the U.S. subprime mortgage crisis has been rippling outward affecting other countries. British banks have made large loan loss provisions and there has been a run on the Northern Rock bank. German banks have incurred similar losses and Germany has suffered two large bank failures. European banks have also become leery about lending to each other, forcing the European Central bank to infuse emergency liquidity. Now, Japan’s banks are feeling the heat. (more…)
Many people now believe the United States cannot afford to continue with the policies of the Bush-Cheney administration. Those policies have undermined global support for America – a key part of national security – and have produced an economic expansion that has bypassed working families and looks as if it will bequeath years of house-price pain. (more…)
With Senator Hillary Clinton firmly cemented as the front-runner for the Democratic Party’s nomination, Rubinomics—named after former Treasury Secretary Robert Rubin, who shaped economic policy under President Clinton—has re-emerged as a critical issue. This is because Senator Clinton has firmly embraced it. Rubinomics rests on faulty economics and embodies bad politics. Progressive Democrats and the nation need to understand this. Here’s an explanation. (more…)
It is widely recognized that the debacle in Iraq has contributed importantly to disenchantment with the Bush administration and Republican Party. However, less recognized is the potential long-term political impact of Iraq, which has opened the door to moving beyond the red state – blue state division that has marked US politics for the past generation. That in turn could create a lasting progressive majority. (more…)
Deep thinking involves going to the root of ideas, analyzing core assumptions and the logic upon which arguments are built. In a sense it is analogous to the Research component of R&D. Research represents deep thinking, while Development takes the product of that thinking and turns it into something that can be marketed profitably. In like vein, physicists distinguish between pure and applied physics, while economists distinguish between theory and policy. (more…)
MEMO
TO: Progressive Presidential Candidates:
RE: Framing a Winning Economic Policy
FROM: Thomas I. Palley
The unbalanced U.S. boom that has followed the 2001 recession provides a real window of opportunity for progressive Democrats to reverse the laissez-faire extremism of the last 30 years. This window may open still wider if the economy suffers a recession in the next two years (The Next Recession ). If progressives are to take full advantage of this opportunity, they will need a new economic policy frame. Here’s a suggested road map. (more…)
It is often said that knowledge is power. One implication of this is that the powerful have an incentive to police what gets called knowledge. Nowhere is this truer than in economics since how we describe the economy has vital consequences for economic policy, providing a clear motive to police the production of economic knowledge. Unmasking this reality is critical for a democratic equal opportunity society. However, it is extremely difficult to do. (more…)
Progressives and trade unionists frequently complain about how globalization has tilted the playing field in favor of capital. By facilitating international trade and cross-border investment, globalization has enabled capital to go mobile. This has created multiple exit options for capital, and the credible threat of movement to other countries has raised capital’s economic and political bargaining power. Corporations, who control capital, have then used this increased power to shift income distribution in favor of profits, roll back taxes, and challenge policies promoting social protection and inclusion. (more…)