Crunch: Why Do I Feel So Squeezed?

I watched Jared Bernstein, a senior economist at the Economic Policy Institute, on BookTV at CSPAN2 the other night as he discussed his book, Crunch: Why Do I Feel So Squeezed?. He's a terrific speaker and the book is a must-read for me this summer. In it he "outlines a 'reconnection agenda' to cure the nation’s economic ills." The New York Times (for some not hard to understand reason) chose Harry Hurt III to review it. Why is this guy asked to comment on an important economics text? As I came upon his other works while doing some research on him, he appears not to be. However, he does cover important subjects like "executive pursuits" at The New York Times (according to The New York Post!). And he trivializes Bernstein's rather eloquent and comprehensible text.

His basic thesis about the current state of the economics profession and the American economy is unapologetically left-leaning. “Economics has been hijacked by the rich and powerful, and it has been forged into a tool that is being used against the rest of us,” he declares. “Far too often, economists justify things many of us know to be wrong while claiming the things we believe are critically important can’t be done.” “Economics is not an objective, scientific discipline,” he writes in one of the “Crunchpoints” that serve as his chapter summaries. “It is a set of decisions about how to produce and distribute resources and opportunities.” Those decisions, he says, are based on power, not computer modeling. His goal is to demystify economics so as “to rechannel the power of economic analysis back to the service of those who need it most: the ones in the vice grip of the crunch.” “Crunch” succinctly defines the quandary faced by many Americans. First, Mr. Bernstein duly notes that from 2000 to 2006, the American economy grew by a healthy 15 percent and achieved impressive efficiency gains. But during that same period, he says, the inflation-adjusted weekly earnings of the typical, or median worker, were flat, and the portion of the population officially defined as poor increased to 12.3 percent from 11.3 percent. The costs of health care, child care, college tuition and housing, meanwhile, “have been growing much faster than the overall average of all prices taken together,” he says. “The name of the problem is economic inequality, and it’s been on the rise for decades,” Mr. Bernstein says. Looking at the rise of inequality, he blames the breakdown of “economic mechanisms and forces that used to broadly and fairly distribute the benefits of growth.” These mechanisms and forces specifically include “unions, minimum wages, employer and firm loyalty, global competitiveness, full employment, the robust creation of quality jobs, safety nets, and social insurance.” Mr. Bernstein acknowledges the benefits of globalization in numerous passages, including one in which he describes replacing his 25-year-old stereo with a better, foreign-made system for the surprisingly low price of $130. At the same time, he reminds us of the problems ranging from the outsourcing of American jobs to the demise of American industries because of competition from cheaper goods from abroad. He says, however, that the crisis created by globalization can at least be “shaped” by enlightened political leadership and a sea change in public policies. Mr. Bernstein believes that full employment — as opposed to relatively low unemployment, in the 4 to 6 percent range — is the key to restoring the bargaining power of workers and unions. He says that the Federal Reserve should focus on promoting job growth over limiting inflation. Mr. Bernstein would also reform health care by pooling risk and cutting costs with a government-operated system, because he says “markets tend to be fairly lousy at providing public goods.” He would reform immigration by controlling “immigrant flows” — though he opposes building a wall — and by instituting “economic integration” programs for those who earn legal status. He would grapple with the double-edged effects of globalization by taking “some of the benefits of trade” and plowing them into universal health care, pensions, public infrastructure and a drive for energy independence.

The best part of the Hurtful Times' review is when it accuses Professor Bernstein of glibness. Now we never see that about the daily fare from Fox News and the other MSM, do we? Read it for yourself. My money's on your nonglib enjoyment. Suzan _________________________________