America’s recovery is stalled. Manufacturing, the heart of it, is shrinking for the first time in three years. More than 13 million Americans are out of work, one-third of them for more than a year.
The slowdown now comes because the Eurozone currency turmoil is reducing American exports. Four years of European “austerity” programs, basically imposed by Germany, have only deepened the pain in many Eurozone countries: A record number of European workers are doing nothing: 17 million are unemployed--88,000 more than in May. The effects are clearly aggravating the difficulties of the United States.
Two years ago, Daily Beast editors surveyed leading economists in the United States, asking them for their prescriptions for reviving America. There was near universal agreement that U.S. policy priorities were skewed. Most fully acknowledged that a mid- and long-term program to control the federal deficit was required. But the consensus agreed that the immediate priority must be a program of public investments and tax cuts to spark recovery, increase revenues, and balance the budget over time.
“As in the 1930s, the economy is suffering a sharp decline in aggregate demand and loss of business confidence. Long experience shows that monetary policy may not be enough, particularly in deep slumps,” the manifesto said.
Sixteen economists and historians initiated the document including Alan Blinder, Joseph Stiglitz, Robert Reich, Sir Harold Evans, Richard Parker, Derek Shearer, John Cassidy, Sean Wilentz, and Laura Tyson.
Within days, 100 more economists and historians had endorsed the proposal.
Business reporter Rob Cox on why Europe has gone from slashing spending to slashing austerity measures.
Small steps were taken by Washington in the following two years. Unemployment edged down from 15 million. But deadlock in Congress, with the focus on debt instead of demand, continues to frustrate the recovery. And America by itself is limited in how far U.S. policy can revive the economy without a change in the Eurozone policy that is now having such a negative effect globally.
Last month in the Financial Times, two leading economists, American Nobel-Prize winner Paul Krugman and Britain’s Richard Layard of the London School of Economics, crafted a well-argued manifesto for Europe. It is similar in its general thrust to The Daily Beast’s 2010 manifesto, and we make it available here as an opportunity for those who want to add their support. Click here to read/-and, if you agree, endorse the recommendations.