On 29 Jan 97 at 10:41, Robert Cherry wrote: > I am a strong supporter of the EPI and have signed ad. However, I am > increasingly disheartened by the lack of focus of the EPI on > the issue of full employment. In the election ad, some in the EPI > capitulated to the claim that we are so near full employment that there is > not much room for a demand side stimulus. While the EPI tried to distance > itself from this positon it has done nothing to contradict it. That is, > it has yet to mobilize economists around the notion that the unemployment > rate should be driven down to the 4-4.5% range. By your first reference to "ad" I assume you mean the anti-BBA petition, which is not quite an ad yet though it will be released to the press with the appropriate PR hoopla. Chances are some virtuous organization will decide such an ad should indeed be placed and pony up the $50,000 or so required. By "election ad", if you mean the petition signed by 500+ economists criticizing the Dole economic plan last fall, I completely agree with you. You won't find my own name on that ad, nor that of certain other EPI staff economists and cronies in academia. We would like to mobilize people, including economists, around the notion that UE could be less than 5 percent. We have not done a separate petition because a) the other petitions were politically pressing; b) doing the work of the other petitions was financed; and c) it's not obvious such a petition would be successful. On the last point, a petition almost requires a news "hook" to attract attention. If we were in deep recession such a petition would be a more likely activity. We're also in something of a position of petition saturation, what with two in the past six months. We don't want to go to the well too often. Another factor re: success is that it's not clear we could get many signatories to the notion that Robert Gordon's NAIRU is too high. A petition that only gets 150 names is probably better not circulated (especially after getting 1000+ names on a different petition). It (e.g., the 150 names) says nobody buys this except for a fringe. The problem in taking on the NAIRU, beyond sponsoring research (which we have been doing), parallels a basic problem in the debate on the balanced budget. Namely, the entire organized left and labor movement is unwilling to go to the public and proclaim that it is simply not necessary to balance the budget, ever. Even my colleagues at EPI think it's an exercise in futility. The public conviction that the emporer is well-attired has intimidated anyone from saying the dude is buck naked. The Progressive Caucus in Congress, led by Bernie Sanders, is in the process of forging a coalition with the Right around the notion of reducing so-called "corporate welfare." For the right, this means killing anything that looks like industrial policy (outside of defense, of course), while for the left, it means reducing some tax expenditures. The purpose of this grand enterprise is to reduce the deficit. The main problem is that such cuts devoted to deficit reduction will be entirely wasted, from the standpoint of potentially constructive initiatives in public spending. They are wasted because health care spending growth will just eat them up and then recreate high deficits, prompting further rounds of austerity. I have been arguing to no avail that as long as the public thinks balanced budgets are good things, they will gloss over the details of how such good things are best brought about and eventually the BBA will pass. I further maintain that the polling data on public support for the BB is bogus because such polling never couches the question in the economically-honest way, namely, making clear that a BB has inexorable consequences and cannot be taken in isolation. For instance, when pollsters ask if the BB is a good thing when it entails cuts in Medicare and Social Security (as it inevitably must), then 2/3rds of the public rejects the BB. The neglect of full-employment politics is a major opportunity for budding third-party efforts, but so far it seems these folks are content with demanding employment and income as a right, as if the government can simply create them by fiat, rather than talking about policies that can actually create jobs and raise wages. Any thoughts on how to cope with these political problems would be welcome. Until then, I'm busy solidifying a rep in D.C. as an unbalanced-budget crank. > Instead, it has gotten sidetracked into the focus on the balanced budget > demand. Even here, EPI accepts a united front with regressive liberals. > That is, the ad accepts the notion that it is good to generally balance the > budget but disagrees with the method. The petition back-handedly accepts the notion held by the majority of the profession -- that the budget ought to balanced over the business cycle, and that arrangements to ensure such a policy ought not to be in the Constitution. In this sense I agree with you. If the ad's language was more radical (heck, more liberal) we would have 200 names, not 1000, and maybe two Nobels rather than 12. I fear such a result would not bode well for defeat of the BBA in Congress. FYI: the petition and cover letter were written by Bob Eisner and James Tobin, not EPI. Given the purposes involved, I doubt we would have written it any differently. They have also been quite insistent that EPI's name be kept out of the 'message.' We have been acting purely in an administrative capacity here. > I believe that the EPI should provide some leadership with a discussion of > making a mass demand to lower the unemployment rate to say 4.2% EVEN IF IT > MEANS A MODERATE INCREASE IN THE ANNUAL INFLATION RATE. Without leading such We've been pretty explicit on these points, but again one must distinguish between what EPI says, what the press will filter through to the public, and what you eventually hear that we said. The BBA petition is seen as a legitimate news story and will get good coverage. A package of press release/study/petition/ press conference demanding 4.2 percent unemployment would get zero coverage, I'm quite certain. I would still be for doing it, but that begs the question of a political strategy. EPI is not set up for and hasn't the resources to do politics, except in the dissemination of our research. > a campaign the EPI will at best put a human face on Rockefeller Republicanism > which after all is what the Democratic Party has become. I think there are important differences among Democrats, especially between the White House and the House of Reps leadership. I don't think we've put a human face on Clinton. We've supported little that he has done. Of course, our work does support the conclusion that Dole or Bush would have been worse than Clinton. EPI is not political in the way that you may think. Mostly what we do is prepare and publish reports. What you see there is what you're really getting. We don't spend all that much time promoting the publications beyond an initial window of a week or so. Our Hill testimony and public appearances reflect our reports in content and emphasis. That's 95 percent of what we do. > Of interest, I just reread a 1965 piece by James Tobin in which he > makes essentially the same points that I am making. In that article, he > argued that the unemployment rate should be brought down to an AVERAGE of 3.0- > 3.5 percent and he was willing to accept the modest increase in inflation > rates. Maybe the EPI can have Eisner and others generate an ad that would > have this focus -- even a few hundred signatures on this kind of an ad is > worth more than the thousands you are getting on the bbamendment ad. Actually I had discussed something much like this with Mike Meeropol and Paul Davidson. You might remember my raising it on the PKT list last fall. I was reacting to that anti-Dole petition. I still think it's worth pursuing, but the questions of timing how-to are important. Tobin and others did generate such a petition a few years ago, but regarding your urge that EPI take 'leadership,' our offer to assist in that effort was not welcomed by those involved, much like their demand that EPI maintain an arm's length relationship with the current petition. Thanks for your note. MBS =================================================== Max B. Sawicky Economic Policy Institute [EMAIL PROTECTED] 1660 L Street, NW 202-775-8810 (voice) Ste. 1200 202-775-0819 (fax) Washington, DC 20036 Opinions above do not necessarily reflect the views of anyone associated with the Economic Policy Institute. ===================================================
