Jeff Faux

Jeff Faux is a distinguished fellow at the Economic Policy Institute, which he founded. His latest book, The Servant Economy (Wiley), was published in June 2012.

Recent Articles

Slouching toward Seattle

Every economic system develops a politics around the institutions and rules that govern it. The economic system now being created by the relentless merging of the world's markets will be no exception. But what global politics will emerge to match the new global economy? One place to look for clues will be in Seattle this November 30, when officials representing the 134 nations of the World Trade Organization (WTO) gather to begin another round of negotiations to lower trade barriers. More than tariffs will be on the table. As Renato Ruggiero, the outgoing director-general of the WTO, put it, "We are no longer writing the rules of interaction among separate national economies. We are writing the constitution of a single global economy." The Seattle "ministerial" conference has a largely ceremonial purpose: to approve agreements already struck in smaller, less public meetings around the globe. The official business in Seattle will therefore be much like casting votes at a U.S. political...

A Trade Deal Built on Sand

T he World Trade Organization finally found a safe place to hold a meeting. Doha, a city in the tiny Persian Gulf sheikhdom of Qatar, is only 1,000 miles from Afghanistan. It is a 9,000-mile flight from Seattle, where two years ago street protestors frustrated the WTO's attempt to set an agenda for another "round" of negotiations over rules for global trading and investment. But this time, on November 14, protected by a detachment of plainclothes U.S. marines in a desert theocracy sealed tight against outsiders, U.S. Trade Representative Robert Zoellick engineered an agreement on an agenda over which 142 countries will negotiate during the next three years. And just in time. Failure would have reinforced growing doubts among both critics and supporters as to the WTO's credibility. Just a few years ago, Renato Ruggiero, the organization's director general at the time, could say with confidence that its rules for global trade were the "constitution of a single global economy." Today,...

Time for a New Deal with Mexico

M exican President-elect Vicente Fox, fresh from a historic victory that ended 71 years of one-party rule in his country, dropped in on U.S. lameduck President Bill Clinton just before Labor Day. He was brimming with ideas for further integrating their economies, including a proposal to open the border to more Mexicans seeking work in the United States. The Clinton White House, which seven years ago sold NAFTA to Congress on the grounds that it would keep Mexican workers out, was unenthusiastic. Fox also visited Ottawa, where he proposed a single continental currency: the U.S. dollar. The Canadian response was frigid. "We're happy to maintain our own currency," sniffed Prime Minister Jean Chrétien. Despite the rebuffs, Fox has opened up a discussion that will not easily be shut down--nor should it be. A former president of Coca Cola Mexico, Fox is a free-trader faced with the reality that NAFTA did not deliver on its promise to raise the...

Is The American Economic Model the Answer?

The financial elites that favor the "American" model -- deregulation, weak unions, and a minimalist welfare state -- ask the wrong question: how to compete against countries with lower wages and living standards.

N ot too many years ago, the conventional wisdom was that Europe and Japan did it all right, and the United States did it all wrong. And everything that could be learned, we could learn from them, and indeed, they had nothing to learn from us. Now, the new conventional wisdom is just the opposite; we're doing everything right, and Europe and Japan are doing everything wrong. Neither of those positions is correct. -- Secretary of Labor Robert Reich, Detroit Jobs Conference, March 14, 1994. T he economic elites of most advanced nations now believe that the United States offers the best model for competing in the new global economy. As commonly formulated, the argument holds that, compared with Europe, the United States has: Created more jobs. Thus, according to a recent commentary in the Washington Post: The record is unmistakably clear. Since 1970 the U.S. economy has generated 41 million new jobs. . . . By contrast, the European Union -- the new name for the European Community -- has...

The Next Recession

A decade of prosperity has convinced a fair portion of the punditry that the new hi-tech service economy has lifted us into an economic orbit beyond boom and bust, where recessions are history. Unfortunately, there is little evidence that the laws of economic gravity no longer apply. Indeed, sensible people should now be preparing for the possibility that Alan Greenspan's effort to slow down the economy will overshoot and that we will soon face rising unemployment and a sinking stock market. To begin with, the length of the current expansion is less a product of some epochal transformation of the American economy than it is of the convergence of temporary economic trends and political events whose influence may have run its course. During its first five years, the current upturn was at best ordinary. After having fallen in 1991, the GDP rose at an average of a little above 3 percent annually through 1996, about the same as the previous two expansions and considerably less than earlier...

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