Paul Krugman in Friday's NY Times reported the Federal reserve's expectation of high unemployment rates through 2011 "even absent further economic shocks." He thinks Obama's stimulus is helpful but not enough. We may be back to a 19th century model, whereby the economy eventually recovers once there's enough pent-up demand to get things going again.
Robert Pollin is an academic economist in a sudden spotlight because in the midst of all this he is arguing that full employment must be the main goal of economic policy again, as it was from FDR through to the late 1970s. Further, he believes it can happen, through investment in education, healthcare and especially green jobs. He had a recent cover article in The Nation, was quoted at some length in this month's Progressive, and wrote a memo to Obama in the current Tikkun, all stemming from his institute's timely report Green Recovery: a Program to Create Good Jobs and Start Building a Low Carbon Economy. On the Tikkun Phone Forum this week (listen here) he explained how he managed to get out a short version of the report in time for the election, and was then amazed at the sudden interest, and the speed with which it entered Obama's inner circle. Its recommendations appear to be close to those adopted in the final stimulus package.
So what else has to characterize economic policy in future? My editor, the astonishingly "on" Michael Lerner, is in hospital and in pain recovering from cancer surgery today (he just called, sounding very much himself), and also in Ha'aretz with a piece written this week arguing for "a spiritual bailout."
The world may need to turn to the wisdom of Jewish tradition to get an alternative framework to that which has dominated the global economy over the past few decades. And I'd like to invite Jewish thinkers to join us at Tikkun in developing more explicitly what such a global economy would look like.
The invitation is extended quite as much to people from other spiritual traditions. So put on your economic thinking caps and send us some wild visions. The dream of socialism was hatched in the 19th century and, for both good and ill, dominated much of 20th century politics. Eco-economics is the dream being hatched now, but what else--apart from full employment--must it include? David Korten was arguing in Tikkun that the government, not the banks, must create our money, or we are condemned to always grow the economy to pay the banks back their loans with interest. Muslim mortgages are working just fine, as I wrote here last week. What else? Send me an email: dave at Tikkun.org.