A primer on progressive economics
Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)
Even before the credit/food/fuel/jobs/real-estate turmoil of today, many Americans struggled to make ends meet. Helping readers to make sense of this is economist Jared Bernstein’s new book, Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries).
In five snappy chapters, the author, a senior economist at the Economic Policy Institute, widens the discussion on a slew of government policies and market trends. He uses people’s “e-mail questionnaires” about the economy and polity to address issues in “an engaging, non-jargony way.” And Bernstein’s wry humor makes his defining, explaining and summing up of economic concepts and terms easy on ordinary readers.
In the first chapter, he tackles the nation’s 800-pound gorilla. Bernstein notes, “The name of the problem is economic inequality, and it’s been on the rise for decades.” A major symptom is the slow growth rate of wages. According to Bernstein, the top reason for income inequality is the weakening of labor unions, especially those in the private sector, where the bulk of workers toil.
A secondary reason is the worsening health-care crisis, for which he blames the “medical-industrial complex.” To be clear, Bernstein is not anti-market. But he does explain, persuasively, why markets for health care are failing a rising number of Americans.
Next, he guides a friendly tour through the U.S. gross domestic product, the largest on the planet. Size does matter, but not in the way you might think. Take the rate of productivity growth, which enlarges the economy (nearly $16 trillion now). But this larger pie doesn’t lead to workers’ slices of it getting bigger, absent unions and employment protections. Instead, Americans have experienced ever-worsening income inequality over the past 30 years.
The opposite trend was the rule in the three decades following World War II. Then, labor unions were stronger, and the rate of productivity growth rose in concert with improving living standards. Bernstein’s narrative is helpful to understand this sea change.
Bernstein hammers home the political power behind economic results, which he believes is given short shrift in economics training. His purpose is to clear the air over U.S. policy issues upon which millions of ordinary Americans depend. For instance, why is Social Security in fine shape with minor tweaks only? Why is the Federal Reserve so vital to employment, notably for low- and middle-wage workers? Are federal budget deficits always bad things, and if not, why? The answers are surprising.
Bernstein’s policy goal is a “properly managed globalization” in which governments protect low- and middle-income families from harmful market forces. In a chapter titled “The World Ain’t Flat as All That,” he unravels the positions of corporate-led globalization cheerleaders such as Thomas Friedman, New York Times columnist and author. Bernstein’s take on so-called “free trade,” immigration policy and poverty is revealing.
He wraps up with a series of policy-change strategies. He writes: “The idea is to outline the framework for the solutions to our most important economic challenges.” A family man, the author gains such insights by watching his daughter and her peers ice skating.
It is perhaps odd that, after discussing the economics and politics of the U.S. medical- and military-industrial systems, Bernstein ignores the nation’s prison-industrial system. After all, no other country locks up its citizens (mainly those citizens who are low-income and have black or brown skins) at the rate that the U.S. government does. Challenging this oppressive policy should have been part of the author’s otherwise authoritative primer on progressive economics.