Labor

We’ve heard it a thousand times, from American CEOs, pundits and politicians. And we’ll probably hear it again from President Obama, in his State of the Union address. The U.S., we are told, is losing its manufacturing industries to competitors like China because America is falling behind in innovation and education.

It’s not true.

One of the little-noticed elements of the deal on taxes agreed upon by the Obama administration and the Republican congressional leadership is the decision of the White House and the GOP not to renew an obscure program known as Build America Bonds. This decision threatens to hurt American economic growth for decades to come, by eliminating one of the most successful methods of modernizing the vital infrastructure on which American businesses and workers depend.

If they agree on nothing else, much of the right and left in America agree that big is bad and that "small is beautiful" -- to borrow the title of the British economist E.F. Schumacher's 1973 book. Around the time that Schumacher's book became a bestseller in the United States, American culture underwent a transvaluation of values. New Deal liberalism, which took pride in hydropower dams, highways and rockets, was dethroned by the counterculture, which opposed dams, loathed automobiles and preferred the exploration of inner space.

Click here to download the slideshow, "A Recovery at Risk."

Joe Miller is simply wrong when he claims that the federal minimum wage is unconstitutional. In 1941 in United States v. Darby, the Supreme Court upheld the constitutionality of the 1938 Fair Labor Standards Act, which created the minimum wage.

The Great Recession has put enormous strain on the American social contract, exposing not only the many holes in our social safety net but also the weaknesses in its basic design and philosophy.

The Great Recession has exposed numerous flaws in our social contract – weaknesses that existed prior to the economic downturn – highlighting the need for changes in our system. This series of policy briefs explores the stresses on our social contract, and the policy changes that must be made to mend it. The six-part series includes:

• Overview: The Great Recession exposes flaws in the American Social Contract.

The single most important reason for the failure of the recovery to take hold thus far is that private credit markets are locked up, especially for small businesses.  Private business borrowing and lending is at a standstill, while private banks are holding an unprecedented $1.1 trillion in cash reserves in their Federal Reserve accounts.  In 2007, before the recession began, the banks held only $20 billion in reserves.  The 2007 figure was itself dangerously low.  But a nearly $1 trillion turnaround in bank reserve holdings is a new form of Wall Street excess.

Mr. President:

With hopes of a V- or U-shaped recovery fading, there is the increasing prospect of an L-shaped future of long stagnation, or even a W-shaped future in which W stands for something worse. The reason for this dismal outlook is economic policy is trapped by failed conventional thinking that can only deliver wage stagnation and prolonged mass unemployment.

Your administration’s current economic recovery program has been marked by four major failings: