In this review of How Markets Fail: The Logic of Economic Calamities for Monthly Review, Robert Pollin describes John Cassidy’s new book as “an illuminating narrative of the causes of the crisis.” He describes what sets Cassidy’s book apart from the rest of the new literature on this topic: the framing of the book in the context of economic theory. Pollin is gratified to see that Cassidy is “the first widely read commentator to give the great financial macroeconomist Hyman Minsky and the equally great Marxist economist . . . Paul Sweezy their due, as two of a tiny handful of people who recognized and warned about the patterns of rising financial fragility that would, in time, produce the disasters of 2008-09.” In the end, however, Pollin reminds us that there remains a critical need to translate theoretical insights into a workable set of policies and institutions that can create sustainable democratic, egalitarian economies.

>> Download "The Wall Street Collapse and Return of Reality-Based Economics"

In his latest column for New Labor Forum, Robert Pollin asks: How much, by itself, could a change in our global trade policies—especially tariff restrictions on imports or lowering the value of the dollar—accomplish toward pushing the unemployment rate down to around 4 percent? Pollin finds that such policies would be minimally effective. Instead, he recommends that we look to policies that keep the focus on the goals of job creation and productive investment. The policy scenario he envisions includes public investments and industrial policies as driving forces. In this context, some form of regulation promoting domestically-produced goods are justified, but such ‘buy American’ policies need to be based on careful weighing of conflicting considerations.

>> Download "Economic Prospects: U.S. Trade Policy & the Jobs Crisis"
>> Read earlier Economic Prospects columns

In this new study, PERI Research Professor Jeffrey Thompson presents compelling evidence that investing in state infrastructure and building the skills of the current and future workforce are among the most effective ways to create jobs in New England.

Prioritizing Approaches to Economic Development in New England provides ample evidence that infrastructure (roads, bridges, dams, energy transmission systems, drinking water, and the like) and education are effective approaches for creating jobs and generating economic growth. By necessity, infrastructure repairs employ local workers and use local materials. These activities would also meet an increasingly urgent need: evidence reviewed by Thompson shows that 40% of bridges in the region are structurally deficient; 80% of the region’s dams present significant hazard; most of our roads are in poor or mediocre condition; and our drinking water infrastructure is in need of $12 billion worth of repairs and renovations.

Thompson describes how, instead of making these investments, state policymakers are too often turning to corporate tax breaks to lure businesses to their state and public subsidies for employers who promise to hire workers in the state. These policies have been tried for decades, but Thompson presents the clear evidence that these tax subsidies don’t work to create jobs or revitalize state economies.

>> Download Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure, and Tax Incentives

>> Download the accompanying policy brief

>> View a video interview with Jeffrey Thompson on this topic

In their new working paper, Stephanie Seguno and James Heintz explore how the contractionary monetary policies in the U.S. from 1979 – 2008 affected diverse racial and gender groups in different ways. They hypothesize that women and Blacks, as groups with less power, fare worse in the resulting competition over jobs, creating in a disproportionate rise in female and Black unemployment rates relative to White men. The authors find that the costs of using these policies to fight inflation are unevenly distributed among workers, weighing more heavily on Black women and men, followed by White females, and lastly, White males.

>>> Download “Contractionary Monetary Policy and the Dynamics of U.S. Race and Gender Stratification”

In this working paper, David Howell asks whether the prevailing view of cross-country unemployment rates is sufficiently comprehensive. Rather than attributing all cross country variation to internal labor market institutions and the equilibriums that result from them, Howell asks whether we need to look at a broad comparative political economy framework to explain the demand for employment in any country, and the translation of that demand to actual employment levels. Howell points to evidence that institutional models grounded in high levels of social and political consensus can produce low unemployment, low wage inequality and substantial income security.

>> Download “Institutions, Aggregate Demand and Cross-Country Employment Performance: Alternative Theoretical Perspectives and the Evidence”