In Failure by Design, the Economic Policy Institute's Josh Bivens takes a step back from the acclaimed State of Working America series, building on its wealth of data to relate a compelling narrative of the U.S. economy's struggle to emerge from the Great Recession of 2008. Bivens explains the causes and impact on working Americans of the most catastrophic economic policy failure since the 1920s.
As outlined clearly here, economic growth since the late 1970s has been slow and inequitably distributed, largely as a result of poor policy choices. These choices only got worse in the 2000s, leading to an anemic economic expansion. What growth we did see in the economy was fueled by staggering increases in private-sector debt and a housing bubble that artificially inflated wealth by trillions of dollars. As had been predicted, the bursting of the housing bubble had disastrous consequences for the broader economy, spurring a financial crisis and a rise in joblessness that dwarfed those resulting from any recession since the Great Depression. The fallout from the Great Recession makes it near certain that there will be yet another lost decade of income growth for typical families, whose incomes had not been boosted by the previous decade's sluggish and localized economic expansion.
In its broad narrative of how the economy has failed to deliver for most Americans over much of the past three decades, Failure by Design also offers compelling graphical evidence on jobs, incomes, wages, and other measures of economic well-being most relevant to low- and middle-income workers. Josh Bivens tracks these trends carefully, giving a lesson in economic history that is readable yet rigorous in its analysis. Intended as both a stand-alone volume and a companion to the new State of Working America website that presents all of the data underlying this cogent analysis, Failure by Design will become required reading as a road map to the economic problems that confront working Americans.
About the Author
Josh Bivens has been an economist at the Economic Policy Institute since 2002. He is the author of Failure by Design: The Story behind America's Broken Economy and coauthor of The State of Working America, 12th Edition, both from Cornell.
Lawrence Mishel is the president of the Economic Policy Institute and its research director from 1987 to 1999. He is the coauthor of every edition of The State of Working America.
Table of Contents
List of Figures vii
The Great Recession: The damage done and the rot revealed 5
The Great Recession's Trigger: Housing bubble leads to jobs crisis 11
Fallout: the job-market 16
Fallout: broader measures of economic security-poverty, health insurance, and net wealth 25
The Policy Response to the Great Recession: What was done, and did it work? 29
The dynamics of the Great Recession 32
Recovery Act controversies: what was in it? 33
Recovery Act controversies: did it work at all? 35
Recovery Act controversies: why has consumer and not government spending led the recovery? 41
The Great Recession Ended More Than a Year Ago-so," Mission Accomplished"? 45
Apathy, not overreach 47
Exchange rate policy 48
Monetary policy 49
Fiscal policy 49
Clear economics, fuzzy politics 50
The Cracked Foundation Revealed by the Great Recession 53
Falling minimum wage 55
Assault on workers' right to organize 55
Global integration for America's workers and insulation for elites 56
The rise of finance 56
Abandoning full employment as a target 57
You get the economy you choose 64
Incomes in the 30 years before the Great Recession: growing slower and less equal 65
Is everybody getting richer but the rich are just getting richer faster? 70
Why have typical families' incomes and overall economic growth de-linked? 74
The arithmetic of rising inequality: falling wage growth for most American workers 74
The economics of rising inequality 74
Lower wage growth did not buy greater economic security or sustained progress in closing racial gaps 83
How did American families cope with lower wage-growth and rising insecurity? 86
Where to from Here? 93
About EPI 101
About the Author 103
The State of Working America Web site 104
Most Helpful Customer Reviews
This book is a concise presentation on the path taken by the U.S. to its present state of economic difficulty. The text is short but lucid. The book includes many graphs that illustrate a variety of factors related to U.S. economic welfare. These may be a problem for some readers, but the text easily stands alone and the graphs can be bypassed if necessary.