Robert B. Reich, a co-founder of The American Prospect, is a Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. His website can be found here and his blog can be found here.
The New York Times
The euro, the most audacious gamble in the history of currency, has become a
reality. What will this crucial step toward unity mean for Europe, the United
States and the world? The New York Times Op-Ed page asked several experts in economics and observers of European
culture to offer their insights.
Robert B. Reich:
Left-of-center politicians now lead every major Western nation, including
most of Europe. So what? Real power is shifting to global businesses, which
are merging at a record pace, and to central banks, rapidly consolidating
their authority. The euro accelerates both trends.
Jürgen Stark, vice president of the Bundesbank, says the euro presents a
"great opportunity for Europe to combine sound monetary and fiscal policy
with more flexibility." These are code words.
"Sound monetary policy" means that the new European Central Bank (freed
LA Times Federal Reserve Chairman Alan Greenspan on Wednesday did exactly what he needed to do by dropping short-term interest rates another half-point, but it's not enough. The Great Economic Slowdown of 2001 (let's not call it a recession quite yet) came on partly because Greenspan raised short-term interest rates too high, starting in June 1999 and continuing through five more rate increases. Now he's backtracking, and interest rates are going back below where they were when he started. That should give the economy a needed boost. Not surprisingly, on word of the rate cut, the stock market reversed direction and scored one of its largest one-day rallies ever. But can the rally be sustained? And what's the outlook beyond the immediate euphoria? Notably, two-thirds of the recent economic slowdown has been because of a dramatic drop in capital spending. At the start of last year, American businesses were buying new equipment (much of it high-tech) at an annual rate 20% above the year...
The Web changes everything -- including change. And it's not just the Web. Digital technologies, wireless technologies, the Human Genome Project, complexity theory, and the emergence of new science have all changed how we think about change: why change has to happen in companies, how change happens, and, most important, who makes change happen. Power has shifted from inside to outside, from corporate planners to aggressive buyers. Now all customers, all clients, all investors, have a huge array of choices -- and can switch to something better instantly.
Change today happens suddenly, unexpectedly, unpredictably. It occurs in companies the way that we see it occur in biological systems or in technological breakthroughs: Change is sudden, nonlinear, and constant. Its amplitude and direction can't be forecast. Killer apps can come from anywhere; new competitors are lurking everywhere. Markets emerge, flourish, inspire imitators, breed competitors, and...
Broadcast August 24, 2001 The butcher metaphors of modern management are back: cutting out the fat, slicing to the bone, getting leaner and meaner. Well, all this butchering may slow the slide of stock prices, but it's not a way to build long-term competitive strengths. The fact is, the key competitive assets of most companies these days is their people, not their machines or plants or even their patents, but their employees. Their employees' intellectual capital, knowledge about the companies' products, services and technologies. Their employees social capital, relations they built up over the years with clients and customers. And inside the company, relationships among employees who've become a team. And beyond the intellectual and social capital is what might be called trust capital, the sense among employees that the company will be there for them when times are tough, so that employees are willing to go the extra mile, make that extra commitment because they feel loyal to the...
P resident of the United States Economy Alan Greenspan is frustrated. George W., the mere president-elect, won't deal. Worse, Greenspan can't punish W. for not dealing. He can't even credibly threaten punishment, because punishment is just what W. wants. Don't throw me into that briar patch, Br'er Greenspan!
The last two presidents have been willing to strike a deal. Bush the Elder struck it too late, of course. Greenspan began raising short-term interest rates in 1988, at the start of the Elder's presidency, and squeezed and squeezed until Elder cried uncle. Elder finally agreed to raise taxes, despite what the public had read on his lips. But by then, growth had stalled and unemployment had shot upward. Elder was kicked out of office by an electorate worried about the economy, stupid.
When Bill Clinton was elected, Greenspan made the deal explicit at their first meeting: You saw what I did to Elder Bush, he said. I could do the same to you,...