From Prakash Loungani’s blog:
A standing-room only audience at the IMF last month heard a presentation by [Menzie] Chinn and [Jeffry] Frieden [on Lost Decades], along with comments from Diane Lim Rogers (Concord Coalition), Gail Cohen (Joint Economic Committee) and Simon Johnson (MIT and Peterson Institute). The forum was moderated by Nobel Prize-winner George Akerlof.
Loungani discusses some of the give and take during the Q&A:
Frieden said that the [OWS] demonstrations in the U.S. reflect the growing realization that “the benefits of the party [during the 2000s] were not equally shared while the burden is being unequally distributed.” Over the 2000-07 period, Frieden said, the top one percent of the U.S. population saw its income grow by 60 percent. But the bottom 99 percent of the population had income gains of only 6 percent and “of course that six percent [was] eaten away by the crisis.”
This was a theme picked up by Cohen in her remarks. “What I’m really concerned about,” she said, is that the lost decades that Chinn and Frieden fear “will only be for some segments of the population and that some people will do fine.” Simon Johnson concurred, noting that for some people decades have already been lost: “This is a continuation of losses.”
Cohen noted that long-term unemployment is at historically high levels: half of those unemployed have been out of work for over six months. African-American workers have been disproportionately hit, as have younger workers. The unemployment rate for younger workers is 20 percent. Her examples of the unequal distribution of pain supported Frieden’s assertion that some segments of the populations are “really almost at Depression levels of unemployment and underemployment.”
And on the topic of the fiscal train wreck that was, if not set up by the Bush Administration, greatly accelerated by it:
The wisdom of the Bush tax cuts of 2001 and 2003 also generated some back-and-forth. In commenting on the book, Diane Lim Rogers noted that she and Menzie Chinn had “worked together at the end of the Clinton Administration on the Council of Economic Advisors and ever since then I became obsessed with the Bush tax cuts and the fiscal irresponsibility of them.”
The entire transcript and video is available here. Some additional graphs in this post.
The books and participants in the previous IMF Book Forums are here.
“Frieden said that the [OWS] demonstrations in the U.S. reflect the growing realization that “the benefits of the party [during the 2000s] were not equally shared”
Yes, the 1% had a great party, drank all the booze and eat all the food and leave the mess for the help to clean up. Then their check to the help bounces.
Hey this is a great country or what?
USA! USA! USA! Free Markets! Free Markets! Free Markets! Did I forget one?
dilbert, you forgot:
“We’re number 1!!!”
“They hate our freedom.”
“You’re either with us or with the terrorists.”
“The American way of life (Disneyland) is not negotiable.”
“Property rights” (for corporations and the 1%).
“Financial innovation” (weapons of mass destruction).
“Diversity and multi-culturalism” (an invasion of undocumented Mexicans and Central Americans to work as cheap labor in agribusiness, food processing, construction, and hospitality).
“Free trade” (neo-imperialism).
“Competitiveness” (for labor, not capital).
“The best universities in the world” (increasingly for foreign students).
There won’t be an American Revolution II until the self-satisfied professional middle-class (PMC) bourgeoisie begin to fear being eaten by the seething prole masses and they realize that the top 0.1-1% duped them into internalizing the rapacious rentier values to serve as the buffer caste to protect the top 0.1-1% from the proles.
The top 0.1-1% won’t be there to bail out the PMC.
Another global deflationary contraction, big stock market crash, further unreal estate price decline, local and state gov’t budget cuts, including pay, pension payouts, and benefits, and increasing scale of social unrest and lose of confidence in institutions should serve to wake up the PMC from their self-satisfied slumber.