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

Sunny Forecast

An economist's view of the world generally boils down to “every silver lining has a cloud.” Our reputation as dismal scientists, fair or not, makes us especially grateful when we find something to be optimistic about. In that vein, there's one development over the past decade that makes even us feel brighter about the future: the acceleration in productivity growth. Productivity measures economic output per hour of work, and thus offers a basic measure of how fast living standards can rise. Since the mid-1990s, productivity has been growing at least 1 percentage point faster per year than it was over the prior few decades. This genuinely happy news is particularly relevant to one of today's most pressing political issues, as faster productivity growth will help to fill the Social Security financing gap. Now that even the president seems to understand that private accounts won't restore solvency to the system, talk has turned to tax increases, benefit cuts, and raising the retirement...

Tax and Interdepend

It's tax day, and the mind drifts to interdependent utility functions. Back in grad school at Columbia, we slogged through microeconomics, learning how individuals sought to “maximize utility,” which roughly translates into becoming as fulfilled as possible, given various constraints. The optimal economy, we learned, was one in which economic agents, or “people,” sought to promote their own well-being. We didn't just take this at face value, though; we constructed pristine mathematical models that proved it. Government, in these models, was generally something of a villain. Taxes inevitably created distortions in behavior that stayed the invisible hand. They created “deadweight losses” and led people to work less, or work more, or some combination thereof. Later, our textbook allowed that some amount of taxation was justified in the sense that there are a few “public goods” that we desire but that the market can't or won't provide. But I think it's fair to say that their training...

Ballad of the Beast-Starvers

In early 2005, the Bush administration released its budget for fiscal year 2006 (which goes from October 2005 to September 2006). And, for the first time, the Bush administration serves up big spending cuts. So it's worth checking out for whom the axe falls. In addition, the longer-term priorities of the administration and its backers are just under the surface. First, the short-run impacts, primarily spending cuts to human services programs, have gotten the most attention. But the long-run implications are particularly worrisome. Lurking behind these reams of tables and numbers is a mission to significantly shrink government. The problem is this: We are collecting too few revenues to meet our spending obligations. Unless we make big changes, the magnitude of the imbalance between what government takes in and what it's slated to spend grows to unsustainable levels. Eventually, we will either have to raise more revenue to meet our commitments or very noticeably reduce those commitments...

Crunching Numbers

Just in case you missed it, the central economic problem of our time was revealed on January 28 at 8:30 a.m. On that chilly morning, the government released two reports that, taken together, capture a critical imbalance embedded in our economy. We learned that the nation's gross domestic product, our most comprehensive measure of economic performance, grew 4.4 percent last year, the best year for GDP growth since 1999. A second report, on employers' costs, revealed that inflation-adjusted wages, on average, fell slightly for the year, the first time that's happened in more than a decade. Thankfully, the jobless recovery is behind us. In 2004, we added employment in each month, the first year that's happened since 1999. But now we've got a new problem: For many workers, real wages are falling. The overall average, as noted, slipped only slightly, by 0.2 percent. But this overlooks the evolving distributional dynamics: Real hourly wages were flat or falling for the bottom 70 percent of...

States of Flux

Don't despair, progressives. I bring a message of hope, and it comes from those renowned laboratories of democracy: the states. I just returned from the annual meeting of the Economic Analysis and Research Network, or EARN, as we call it around here. EARN is a collaboration of progressive state-level organizations engaged in research and advocacy, and the message from this year's meeting was crystal clear: If anything good happens, it's going to happen in the states. The Economic Policy Institute helps to run the EARN network, and its director here at EPI is Michael Ettlinger. Michael was kind enough to grant me an interview for this story (translation: I mugged him at the water cooler). Michael's case -- that the states are where the action is -- builds off the contention that the next four years promise to be especially tough here in Washington. Many of the resources of nationally oriented groups will be consumed by pushing back against really bad ideas like social-security...

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