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 L.A. Times
The American economy is so hot that Alan Greenspan, chairman of the
Federal Reserve Board, is worried it's overheating. Dot-com billionaires are
blooming like spring crocuses. The average pay of chief executives of major
companies rose 18% in 1999 to $12 million. Across the managerial,
professional and executive ranks of the United States, pay (including
bonuses, stock options and perks) is skyrocketing. Afraid of losing their
talent to the dot-coms, big law firms just hiked the pay for first-year
associates to $120,000.
Greenspan worries that all this prosperity is causing consumers to buy too
much--more than the economy can produce--which means inflation is just
around the corner. That's why he and his pals at the Fed have hiked
interest rates five times since last June in an attempt to cool things down
and head off inflation.
But wait. What about Los Angeles' striking janitors...
Broadcast December 14, 2001 One of the things we're hearing a lot these days from political leaders is "We need to try to get our lives back to normal." None of us can go back to exactly what we were doing before September 11th, of course, and no one's suggesting we should stop grieving for those who died and for the innocence America lost that day. But our political leaders are asking that we at least try to take up where we left off. And step by step, most of us are doing so. . . . Except in Washington. That's the one place in the nation where almost no one is going back to doing what they were doing before September 11th. Prior to that date, you remember the Washington media were obsessed with Congressman Gary Condit and his former intern, who had gone missing. Maybe you know more than I do, but I haven't heard a word since then about the congressman or his missing intern. Meanwhile, you may recall, Democrats and the White House had finally reached broad agreement on legislation...
Broadcast November 16, 2001 We hear a lot about a stimulus package coming out of Congress, eventually. Regardless of what combination of tax cuts and spending increases finally emerges, almost everyone agrees that the government has to spur the economy right now. Alan Greenspan and company can't do it alone. Cuts in short-term rates are helpful, but we can't fight this recession with one hand tied behind our back. We also need government to spend more and tax less now. But the federal government isn't the only government in American whose spending and taxing affects the economy. There are also 50 state governments and hundreds of city governments. In fact, if you add up the budgets of all of America's states and cities, you reach almost the same figure as the federal budget, in the order of some $2 trillion this year. In other words, the fiscal policy coming out of Washington is only half of America's fiscal policy. So what's the story with the other half? Are state and local...
Broadcast December 6, 2001 For years now, many management gurus have been urging companies to give their employees a larger share of the profits. The thinking was that workers who invested in their own company would work harder because there'd be a direct connection between effort and reward. This idea came just at a time when many companies were ending the old-fashioned kind of pension plan that guaranteed employees a certain fixed amount of money every month after retirement. Companies replaced those plans with 401(k) retirement accounts. Instead of a specific pension, employees, and sometimes employers, now invest a certain amount every month tax-deferred. After retirement, employees live off the cumulative investment. Combine the two ideas--workers getting a share in the profits of their own companies and 401(k) retirement accounts--and you have more and more workers investing a portion of their paychecks in 401(k) retirement plans featuring their own company's stock. Well, this...
Americans are turning against free trade. To halt the protectionist tide, government must
minimise the hardship and dislocation caused by foreign competition.
In a recent poll, 58 per cent of Americans agreed with the statement that foreign trade was
"bad for the US economy because cheap imports hurt wages". Only 32 per cent agreed with
the statement that trade was "good for the US economy; it creates foreign demand,
economic growth, and jobs".
What is particularly striking is that these anti-trade sentiments are being heard at a time
when the US economy is doing so well. Unemployment is lower than it has been in 30
years. People at the bottom of the wage ladder are beginning to see wage gains, for the
first time in several decades. If free trade inspires this much antipathy now, when the
economy is surging, what will happen when the economy slows, as it inevitably will?