EconomyProgressives have lots of good reasons to wish that President Obama and the 2009-10 Congress has taken an even more aggressive approach in responding to the Great Recession. More stimulus spending and a more aggressive push to reform giant financial institutions would have undoubtedly have helped things get better faster — especially in places like North Carolina.

That said, for all the imperfections of their approach, it’s absolutely clear that the economy is much better off today than it would have been without it (and exponentially better off than it would have been had the U.S. followed the do-nothing, “cuts first” approach promoted by conservatives). For confirmation of this reality check out this new report from two of the nation’s top economists. Their central finding: the federal government’s responses were a resounding success.

Bob Greenstein of the Center on Budget and Policy Priorities summarized their findings in this recent post:

In a major new paper for CBPP’s Policy Futures initiative, Alan Blinder, former Federal Reserve Vice Chairman, and Mark Zandi, chief economist of Moody’s Analytics, explain that “the massive and multifaceted policy responses to the financial crisis and Great Recession — ranging from traditional fiscal stimulus to tools that policymakers invented on the fly — dramatically reduced the severity and length of the meltdown that began in 2008; its effects on jobs, unemployment, and budget deficits; and its lasting impact on today’s economy.”

Without the policy responses of late 2008 and early 2009, Blinder and Zandi estimate that:

  • The peak-to-trough decline in real gross domestic product (GDP), which was barely over 4 percent, would have been close to a stunning 14 percent.
  • The economy would have contracted for more than three years, more than twice as long as it did.
  • More than 17 million jobs would have been lost, about twice the actual number.
  • Unemployment would have peaked at just under 16 percent, rather than the actual 10 percent.
  • The budget deficit would have grown to more than 20 percent of GDP, about double its actual peak of 10 percent, topping off at $2.8 trillion in fiscal 2011.
  • Today’s economy would be far weaker than it is — with real GDP in the second quarter of 2015 about $800 billion lower than its actual level, 3.6 million fewer jobs, and unemployment at a still-dizzying 7.6 percent.

This landmark paper is especially important because Read More


North Carolina’s recent wintry weather has helped give rise to a lot of pent up activity this week. Tonight at 7:00 pm for instance, is an excellent event at the Duke University Center for Documentary Studies entitled “Organizing the South: How a Southern Workers’ Movement Can Change the Nation.” Click here for more information and here to watch the video livestream tonight.

And speaking of not-to-be-missed events, be sure if you get the chance to check out the Raleigh showing of “Inequality for All,” Robert Reich’s powerful new movie about America’s modern economy. The event will be held on Tuesday, February 18 from 6:00-9:00 p.m. at William Peace University’s Browne-McPherson Music Building. Parking is free on campus. Click here for more information.

And speaking of the exploding inequality of the modern economy, check out economist Dean Baker’s essay from over the weekend in which he explains how America’s inequality hasn’t occurred by accident or simply as the result of the talent and hard work of the top 1%. To the contrary, as Baker explains, it’s happened “by design.”

And speaking of things that are exploding, the Duke Coal Ash disaster continues to be the biggest story in the North Carolina policy world. Read More


Here’s the intro to today’s “must read” from two of the nation’s most astute economists:

Taking aim at the wrong deficit
By Jared Bernstein and Dean Baker

Jared Bernstein

Dean BakerWASHINGTON – Ask most people in this city what the most important step is to increasing economic growth and job creation, and they’ll reply, “Reduce the budget deficit!”

They’re wrong. So-called austerity measures — lowering budget deficits while the economy is still weak — have been shown both here and in Europe to be precisely the wrong medicine. But they could be on to something important if they popped the word “trade” into that sentence.

Simply put, lowering the budget deficit right now leads to slower growth. But reducing the trade deficit would have the opposite effect. Not only that, but by increasing growth and getting more people back to work in higher-than-average value-added jobs, a lower trade deficit would itself help to reduce the budget deficit….

Read the rest of the essay at the New York Times by clicking here.


Not that very many people with any common sense really believe that cutting taxes on corporations and the wealthy would really jump-start the North Carolina economy, but here’s some additional info that places this patently absurd idea in its proper light.

As reported today by Travis Waldron at Think Progress:

“Even as American corporations are raking in record profits, the largest among them are shifting larger amounts of money away from the United States and into offshore tax havens that allow them to pad their bottom lines even more, according to multiple analyses of legal filings made since the beginning of 2013.

The Wall Street Journal found that the 60 largest companies moved $166 billion offshore in 2012, shielding 40 percent of their earnings from American taxes and costing the U.S. billions in lost revenue.”

Got it? The problem is not lack corporate profitability; it’s lack of demand from cash-strapped, debt-strapped consumers. Generally speaking, businesses generally have plenty to invest, but are holding back or squirreling money away because they don’t perceive a demand for the products and services they might produce. Cutting taxes and public spending further just perpetuates the vicious and destructive cycle in which we are already stuck.


There’s still more news this morning that the national economy is finally starting to pick up steam. CBS News reports:

“The U.S. economy expanded at a slightly faster 2 percent annual rate from July through September, buoyed by an uptick in consumer spending and a burst of government spending.

Growth improved from the 1.3 percent rate in the April-June quarter, the Commerce Department said Friday.”