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The US Political Economy: What’s Gone Wrong and How to Fix It

The US Political Economy: What’s Gone Wrong and How to Fix It. Jared Bernstein CBPP bernstein@cbpp.org 4/17/2013. What’s Gone Wrong?. Dr. John: “Refried confusion is making itself clear…” Deep, deep confusion about almost everything important in terms of economic and fiscal policy.

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The US Political Economy: What’s Gone Wrong and How to Fix It

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  1. The US Political Economy: What’s Gone Wrong and How to Fix It Jared Bernstein CBPP bernstein@cbpp.org 4/17/2013

  2. What’s Gone Wrong? • Dr. John: “Refried confusion is making itself clear…” • Deep, deep confusion about almost everything important in terms of economic and fiscal policy. • Tax policy: responsiveness, supply-side fairy dust, its role in economic growth, distribution. • Fiscal policy: deficit attention disorder, austerity, not enough CDSH’s.

  3. What’s Behind Deficit Fetishism? • To be clear, structural budget deficits are bad and should go. Be a CDSH! • BUT, 3 reasons for fetishism behind austerity: --A strategy has become a position; --Misinterpreting the Clinton years; --Strategy to shrink government vs. the national conversation we had in election and need to keep having. • Markets and governments are complements, not substitutes!

  4. Refried Confusion, cont… • Inequality • Income, compensation/productivity split. • Only now are progressives articulating what’s wrong with it; linkages to opportunity. • Social Welfare • Actually, some real success here. • But relentless attack, most notably in budgets (and, though they’re a lot worse, it’s not just R’s). • Limits of redistribution. • Political Dysfunction • Gridlock: it’s a strategy! • Diagnostic failure.

  5. Sources: Census, EPI

  6. What’s To Be Done? • The University Approach: Fight back with facts • Social Work: Helping people hurt by all the above; systems change through better policy. • Finding the way back to fact-ville: • Money in politics • He said, she said • Better frames, messaging, etc.

  7. Spare Any Change (Theory)? • Get out of cramped DC debate • Get back on offense • Yes, raise the minimum, but also the median • Full employment! • It takes a movement…ala immigration reform • Economic rights? • OWS? Opportunity/Accountability for All!

  8. Bonus!Things I wish I knew when I was you. • Market failure, yes…but government failure too. • Simpler is much better. • Working for a good profis about the best thing you can do. • The Zen of the dissertation. • Power (political, financial) is even more important than you think. • Implementation matters, but you probably can’t learn that much about it here. • Governments and peoples relationship with facts is…um…complicated. • It’s not just about the poor. • There’s a tilt toward class over race; I don’t buy it. • The economists haven’t exactly distinguished ourselves. It’s up to you to fix the world.

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