Major Growing Pains

It’s a conundrum that has vexed politicians and pundits alike. Despite an economic “expansion” that ranks as one of the longest in the nation’s history, Americans remain unsettled about their economic future. Neither Republican challenger Bob Dole, who stresses the need for more growth, nor Bill Clinton, who is trying to take credit for the current expansion, has been able to assuage the public’s deep, brooding concerns.

The usual explanation for the nation’s economic unease includes the layoffs and two-worker families that lurk beneath the rosy growth figures and the way the fruits of prosperity have been falling mainly to those at the top. But there’s another possible explanation, one that has received much less attention: namely, that much of the rapid growth in recent years actually consists of things Americans want less, not more of.

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Reinventing the Corporation

Corporations benefit from the public, so it is fitting that the public should expect something in return from business. The current climate of greed, cynicism and corruption is discussed, along with ways of holding business more accountable.

When an act of simple human decency appears heroic, it’s time to ask some basic questions about the culture in which that act takes place. That’s what happened last December in an old mill town in Massachusetts. AT&T had just announced it was laying off 40,000 workers, even though profits and executive pay were soaring. U.S. corporations had inflicted over three million such layoffs since 1989, and there was a depressing new litany on the evening news: jobs down, stock market up. (More recently, it’s been the equally revealing counterpart: jobs up, market down.) The new Republican Congress was giving these corporations the store. Yet the more they got, the less they seemed willing to give back in return.

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Replace the GDP

Adam Smith said that the final measure of an economy is the well-being of the people. Yet this is the one question that the policy establishment never asks. The government studies the supposed means to that end in exacting detail. It can tell us how many televisions we buy, how much money the drug or record industry invests, practically down to the last penny.

But nobody bothers to ask whether such means actually bring about the. desired end. Economists simply assume it, and this assumption is the implicit baseline of just about every policy debate in Washington. More consumption or investment will bring about more well-being, regardless of what that consumption and investment consist and the actual impact on people’s lives.

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