Jared Bernstein

Jared Bernstein is an economist and senior fellow at the Center on Budget and Policy Priorities. He was formerly chief economist to Vice President Joe Biden and a member of President Barack Obama’s economics team.

 

Recent Articles

Room for Growth

When I was a kid we had this crazy dog that used to chase cars for all he was worth. My father used to yell after him, “What the heck you gonna do with it if you catch it?!?” Given much of the recent economic news, one might say the same thing to John Kerry (I'm afraid I know what George W. Bush would do): If you win, what are you going to do with the spate of developing economic problems? Both campaigns say a lot about how they're going to address the short-term problems generated by a fits-and-starts recovery and a labor market that just can't seem to get over the hump. This is an important discussion, because there's solid evidence that this persistently weak labor market has taken its toll on living standards . The real income of the median household has declined three years in a row, off $1,500 since 2000. Poverty has risen over these years as well, adding more than 4 million to the ranks of the poor. The conventional wisdom that presidents have little impact on the economy is...

They Did it Again

A few months ago, the Federal Reserve made it clear that, given that the recovery was more or less on track, it was going to start raising interest rates off their 46-year low. It did so at its most prior meeting in June, raising the federal funds rate -- the interest rate banks charge each other for overnight loans -- from 1 percent to 1.25 percent. Today they went up another 0.25 percent to 1.5 percent. Why'd the bank do it? The June decision announced (in Fed-speak) that the Fed was going to continue boosting rates; the consensus was that, barring a big economic surprise, it'd probably keep at it for a while. If anything, it was suggested, the Fed might have to raise rates less incrementally than it'd like to. Then life got complicated for our friends on the Federal Open Market Committee (FOMC), the group, chaired by Alan Greenspan, that makes these decisions. First, economic reports began to show soft spots in the economy. Most importantly, the job market began to weaken, adding...

The Fog Machine

After the worst jobs report in months came out last Friday, the President, in an almost Stepford-like fashion, asserted that his tax cuts are working and the economy is “strong and getting stronger.” In fact, fewer than 100 days before the presidential election, unemployment is stuck where it was when the recovery began two-and-a-half years ago. Real wages are down over the past few months. And many who have found new employers after losing their jobs during the recession or its jobless recovery are earning less than they used to. The fact that some in the Bush camp are in denial about the data is to be expected at this point in the game, but it seems like a good time to set out the relevant facts, both positive and negative. First, the positive (don't be discouraged that there are only a few bullets in this section -- the first two are huge, and should be weighted very heavily): The jobless recovery is over. Since September, we've added 1.5 million jobs. These job gains have not been...

Pressure Cooler

At the end of June, that very powerful group of bankers, the Federal Reserve's Open Market Committee (FOMC), got together under Chairman Alan Greenspan's leadership to decide whether they should try to slow down the pace of economic growth by raising the federal funds rate. That's the interest rate that banks charge each other for loans; the important thing about it is that when it goes up, it raises the cost of borrowing throughout the economy. That, in turn, usually dampens investment and hiring activity, but the ultimate target is inflation. Raising the price of borrowing, the idea is, will dampen the pace of economic growth and take some of the pressure off prices. And so that's what they did last month, authorizing a slight boost to the federal funds rate. Now, those of you not on the FOMC: Raise your hand if you really think the economy is growing too quickly. True, the jobless recovery is behind us, but we've still got a deep jobs deficit. We're 1.2 million jobs down from the...

Growing Apart

It's official: Though the economy is clearly expanding and jobs are coming back, the benefits of growth are once again accruing to the wealthy. After a brief hiatus during the late 1990s, economic inequality is reasserting itself. No less than the nation's chief economist, Federal Reserve Chairman Alan Greenspan, noted this in recent testimony, stating that “most of the recent increases in productivity have been reflected in a sharp rise in the pretax profits…” This trend stands in sharp contrast to the way growth was apportioned just a few years ago, when the benefits of workers' increased efficiency were broadly shared. The difference between then and now -- and the key determinant as to how the benefits of growth are distributed -- is the tautness of the labor market. Back in the late '1990s, we recognized the unique nature of the first full-employment economy in decades and wrote a book to document the phenomenon. One of our observations was that fast productivity growth is a...

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