Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect, as well as a distinguished senior fellow of the think tank Demos. He was a longtime columnist for Business Week and continues to write columns in The Boston Globe. He is the author of Obama's Challenge and other books.

Recent Articles

Back to the Future

D uring the postwar boom, it seemed that mass unemployment had been cured forever. A mixed economy--based on activist government, deficit spending, public investment, strong trade-unionism, a welfare state, and a warfare state--kept the industrial West on a high-growth path. Living standards rose steadily. Satisfied voters returned to office politicians who believed in this model. Not only is that economy dead, but the soil that nurtured it has seriously eroded. Today most politicians in the West believe their task is to expunge the mixed economy, not to reinvent it. As mass unemployment keeps rising and wages stagnate, it is bizarre to watch governments pursue freer trade, more deregulation, limitations on government, balanced budgets, and privatization, as if a pre-Keynesian free market would somehow restore high growth and full employment. With the collapse of communism and the revival of ghosts of prewar nationalism in both Eastern and Western Europe, the stakes could not be...

Of Our Time: Wayne's World

O ur text, fittingly enough, is the editorial page of the Wall Street Journal . At the top of the page for June 3 is an essay by Wayne Angell, the former governor of the Federal Reserve. "Over the past 15 years stock prices in the U.S. have risen at a 15 percent annual rate," he begins. "This long bull market didn't just happen. There is a rational explanation. Economic policy has brought the U.S. to a new economic era—an era of stable money and lower income tax rates." Inflation is at a reassuring 2.5 percent, Angell continues. "The market may have already risen on expectations of a reduction in the nominal capital gains rate." But "if the Federal Reserve allowed inflation rates to escalate, it would be a disaster for the equity market. By my estimate, if inflation rose to 4 percent, the Dow could be expected to fall to 6500. . . . If inflation were 5 percent, the Dow could plummet to 4500." There we have it. The economy is, and should be, run in the interest of the stock market...

Market, State, and Dystopia

A dystopia is a utopia in reverse. The post-1980 era is likely to be remembered as a free market dystopia--a headlong compulsion to throw away the mixed economy that was built on the ruins of depression and world war in favor of a marketized society. This compulsion has been ground into the lenses of the press, the economics profession, and the political class generally. It is presumed that greater marketization is desirable and in any case inevitable, despite accumulating evidence to the contrary. And though we now have a Democratic president of liberal spirit, who is well placed to reverse the conservative assumptions of the 1980s, the White House is providing scant intellectual revision. Much of the New Democrat creed accepts the premise that more of society should be marketized; it just wants to do the job more humanely. To look at today's economic conundrums, against the turbulent economic history of the twentieth century, is to appreciate the continuities of a recurring malady:...

The Limits of Markets

The claim that the freest market produces the best economic and social outcome is the centerpiece of the conservative political resurgence. But without government intervention, the market can destroy a lot of things--including itself.

Adapted by the author from Everything for Sale : The Virtues and Limits of Markets , Alfred A. Knopf / Twentieth Century Fund, published January 1997. T he claim that the freest market produces the best economic outcome is the centerpiece of the conservative political resurgence. If the state is deemed incompetent to balance the market's instability, temper its inequality, or correct its myopia, there is not much left of the mixed economy and the modern liberal project. Yet while conservatives resolutely tout the superiority of free markets, many liberals are equivocal about defending the mixed economy. The last two Democratic presidents have mainly offered a more temperate call for the reining in of government and the liberation of the entrepreneur. The current vogue for deregulation began under Jimmy Carter. The insistence on budget balance was embraced by Bill Clinton, whose pledge to "reinvent government" was soon submerged in a shared commitment to shrink government. Much of the...

How to Rescue the Economy

The economy now seems headed for serious recession. How to fight a shadowy enemy is necessarily Topic A, but rescuing the economy is not far behind. The economy is plummeting for several interrelated reasons. The stock market was already falling sharply before Sept. 11. The speculative excess of the late 1990s financed trillions of dollars of investments that will never return profits. Once investors grasped that, the market headed south. So this is not just a blow to investor psychology; the economic blow is real. A second source of weakness is consumer spending. Even before Sept. 11, there had been tens of thousands of layoffs and the unemployment rate had risen sharply, to 4.9 percent. Now, several key industries such as insurance, airlines, hotels, and financial services have felt the effects of the attack directly, and consumers are spending less money generally. This intensifies the squeeze on corporate profits and investments. Earlier this year, continued consumer spending,...

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