Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries) - Hardcover

Bernstein, Jared

Hardcover

ISBN 10: 1576754774 ISBN 13: 9781576754771

Publisher: Berrett-Koehler Publishers, 2008

Synopsis

Is Social Security really going bust, and what does that mean to me? If I hire an immigrant, am I hurting a native-born worker? Why does the stock market go up when employment declines? Should I give that homeless guy a buck? What’s a “living wage”? How much can presidents really affect economic outcomes? What does the Federal Reserve Bank really do? And when the pundits say the economy’s doing so well, why do I still feel so squeezed?

If you’d like some straight answers, premier economist Jared Bernstein is here to help. In Crunch he responds to dozens of questions he has fielded from working Americans, questions that directly relate to the bottom-line, dollars-and-cents concerns of real people. Chances are if there’s a stumper you’ve always wanted to ask an economist, it’s solved in this book.

Bernstein is fed up with “Darth Vaders with PhDs” who use their supposed expertise to intimidate average citizens and turn economics into a tool for the rich and powerful. In the pages of Crunch, Bernstein lays bare the dark secret of economics: it’s not an objective scientific discipline. It’s a set of decisions about the best way to organize our society to produce and distribute resources and opportunities. And we all can, and must, participate in these decisions. “America is a democracy,” he writes. “And in a democracy all of us, not just the elites and their scholarly shock troops, get to weigh in on biggies like this.”

Our economy will be only as fair as we can make it. In this lively and irreverent tour through everyday economic mysteries, Bernstein helps us decode economic ”analysis,” navigate through murky ethical quandaries, and make sound economic decisions that reflect our deepest aspirations for ourselves, our families, and our country.

About this title

About the Author

Jared Bernstein is a senior economist and director of the Living Standards Program at the Economic Policy Institute in Washington, DC. He is the coauthor of the last seven editions of The State of Working America as well as The Benefits of Full Employment: When Markets Work for People. He writes a regular column for the American Prospect online, and his op-eds have appeared in the New York Times and the Washington Post.

From the Back Cover

Economics for the Rest of Us

Economics isn't as mysterious or arcane as some economists make it seem. And Jared Bernstein is not one of "those" economists. In Crunch he strips away the confusing jargon and gives straight answers about topics everyone wonders about: Social Security, immigration, globalization, homelessness, job security and more. But ultimately economics is a matter of making choices, not right and wrong answers. Bernstein shows how we can choose answers to our economic questions that will lead to the kind of society we all want: one that is fair and equitable as well as efficient.

"Jared Bernstein's new book is a must-read for everyone who cares about restoring economic fairness in an America with the greatest income inequality since the Great Depression. Drawing on everyday examples, Crunch is an accessible explanation of economic principles presented with equal parts of insight, humor, and stimulation. In the process, Bernstein explains how we got to where we are, what to do to fix it, and why fighting for a fair society is so important"
--Senator John Edwards

"The sprightliest writer working in the dismal science since the heyday of John Kenneth Galbraith."
--Harold Meyerson, Washington Post columnist

"Jared Bernstein has written a fun, user-friendly primer that tells you everything you need to know about the economy. I liked it, you'll like it, and if you read it you can stop feeling guilty that you forgot everything you learned in that freshman econ course."
--Jonathan Chait, Senior Editor, The New Republic, and author of The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics

"Crunch is a dangerous book. Anyone who reads it will be armed with new ideas to start kicking back at the false economic theories that have ensnared this country. The book is witty, irreverent, and easy to read, but don't let that fool you. It's powerful."
--Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard Law School and coauthor of All Your Worth: The Ultimate Lifetime Money Plan

"Jared Bernstein--the rare economist who writes lucid English--has a gift for making difficult topics easy to grasp without dumbing them down. Bernstein's latest superbly timed book,Crunch, is a must-read guide to the economy's current slide and its effect on us all."
--Robert Kuttner, Founding Co-Editor, The American Prospect

From the Inside Flap

Is Social Security really going bust, and what does that mean to me? If I hire an immigrant, am I hurting a native-born worker? Why does the stock market go up when employment declines? Should I give that homeless guy a buck? What's a "living wage"? How much can presidents really affect economic outcomes? What does the Federal Reserve Bank really do? Why do I feel so squeezed?

If you'd like some straight answers, premier economist Jared Bernstein is here to help. In Crunch he responds to dozens of questions he has fielded from working Americans, questions that directly relate to the bottom-line, dollars-and-cents concerns of real people. Chances are if there's a stumper you've always wanted to ask an economist, it's solved in this book.

Bernstein is fed up with "Darth Vaders with PhDs" who use their supposed expertise to intimidate average citizens and turn economics into a tool for the rich and powerful. In the pages of Crunch, Bernstein lays bare the dark secret of economics: it's not an objective scientific discipline. It's a set of decisions about the best way to organize our society to produce and distribute resources and opportunities. And we all can, and must, participate in these decisions. "America is a democracy," he writes. "And in a democracy all of us, not just the elites and their scholarly shock troops, get to weigh in on biggies like this."

Our economy will be only as fair as we can make it. In this lively and irreverent tour through everyday economic mysteries, Bernstein helps us decode economic "analysis," navigate through murky ethical quandaries, and make sound economic decisions that reflect our deepest aspirations for ourselves, our families, and our country.

Reviews

Starred Review. According to economist and author Bernstein (All Together Now: Common Sense for a Fair Economy), the endless parade of economic legislation and corporate criminality that keep the rich getting richer are all a direct product of economic knowledge being monopolized and manipulated by the rich, keeping the middle and lower classes woefully unprepared to understand, much less stand up to, the economic forces aligned against them. Fortunately, this accessible overview should clear things up for even the most befogged reader. Answering questions from an average American perspective-"the ones in the vise grip of the crunch"-Bernstein explains murky topics like health care reform, minimum wage laws, the Federal Reserve, immigration and budget deficits with a clear, friendly manner that sidesteps any scholarly (and/or sinister) obfuscation. His progressive "we're all in this togther" philosophy, though seemingly familiar, is backed up with enough data and savvy to illuminate what's wrong in the dominant "self-reliance" narrative of American political discourse. This down-to-earth, populist guide to the pressing economic issues of our time is a clarifying, useful and empowering resource.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Excerpt. © Reprinted by permission. All rights reserved.

Introduction: So What Is Economics, Anyway?

So a doctor tells this unfortunate woman that she has but six months to live. “Isn’t there anything I can do?” she pleads. “Marry an economist,” the doctor replies. “It won’t cure the illness, but it will make the six months seem like five years.”

We might as well start with the basics, and I promise this won’t take anywhere near six months.

I recently completed my toughest speaking gig of the year: I taught an economics lesson to my first-grader’s class. The goal was to teach them the fundamental concepts of needs versus wants, goods versus services, and scarcity. These distinctions are critical, because a good working definition of economics is the following:

The economy is the way we organize our society to best provide the goods and services that we need and want. Economics studies the best ways to do this.

They quickly got the needs/wants distinction, but they raised some fascinating questions. They got that housing is a need. But someone then asked, “What about a mansion?” (Just to be sure, I asked them if they knew what a mansion was. “A big house with lots of cobwebs,” they said.) They discussed that and determined that a mansion is a “want,” not a need. Smart kids, I thought.

Anyway, all I’m saying is that anybody of any age can get this stuff. In fact, to not get it, to give up because it’s too obscure, is, as I will show, a profoundly important political act, one with damaging consequences. The stakes are high, for ourselves and for those who come after us—too high to entrust to those whose agenda is to redistribute power and resources to themselves and their friends.

Am I really suggesting that evil people disguised as social scientists are out to rob us blind while we willingly sign on the dotted line because we don’t get the math?

No, not at all, though many powerful political and corporate actors use economists and economic (il)logic to do just that.

It’s just that there are countless ways to organize our society to “best provide the goods and services that we need and want.” In other advanced economies—in those of Europe, Canada, Scandinavia—they answer this question quite differently from the way we do. For example, they take access to health care services “out of the market,” based on the beliefs (a) that health care is a basic right in an advanced society, and (b) as discussed in some detail later, that there are special attributes of health care that make unregulated markets a particularly inefficient (read: wasteful) way to deliver and provide it. And you don’t have to get on a plane to learn the lesson that there are different ways to organize the economy. In other periods within our own history, we organized things differently, too.

This question of how we organize the economy matters a lot. It determines how the benefits of growth are distributed. Even more important, it determines who gets the opportunity to realize their potential. If the best educational opportunities go to the haves, their position relative to the have-nots will become etched in stone, as economic mobility atrophies. If those in political power believe—and act on the belief—that labor standards, like minimum wages, overtime, or the right to collectively bargain, are harmful to economic growth, then the ability of some workers to bargain for their fair share of the growing economy will evaporate while that of others grows stronger. How we organize our economy determines how we structure our response to the challenges from environmental degradation, globalization, the lack of health coverage, and staggering wealth inequalities.

When answering the questions that follow, three unifying principles kept coming up. I’ll come back to these often, as I found them to be useful navigational tools, providing the intellectual and moral guideposts needed to keep us moving in the right direction—toward an economy that works best for all.

BASIC PRINCIPLES OF CRUNCH-STYLE ECONOMICS

1. Economic outcomes are generally thought to be fair, in the sense that market forces dole out rewards to those who merit them. But that’s not always the case. Power, whether it’s based on political clout, wealth, class, race, or gender, is also a key determinant of who gets what.

2. Economic relationships often play out in surprising ways, contradicting both basic logic and textbook theory. The path to economic truth is paved with evidence, not assumptions.

3. Since economics is concerned with finite resources, economic decisions often invoke trade-offs: choosing one outcome over another. Though these trade-offs are usually thought of as the benign outcomes of rational discourse, it’s not so: See #1.

As I hope these principles suggest to you, the goal of this book is not simply to help readers become better versed in economic discourse, though that’s part of my goal. It’s also to offer a new way to answer the question, how can we best organize our society to provide the things we want and need? America is a democracy, and in a democracy we all get to weigh in on biggies like this, not just the elites and their scholarly shock troops.

With that in mind, let’s get to work.

Crunchpoint :* Economics is not an objective, scientific discipline. It is a set of decisions about how to produce and distribute resources and opportunities. Understanding and evaluating the logic and rationales for those decisions, while recognizing whom those decisions favor or exclude, is a big part of what this book is about. To proceed with these insights foremost in our minds is the only way I know to rechannel the power of economic analysis back to the service of those who need it most: the ones in the vise grip of the crunch.

* Each question and chapter in the book ends with a “crunchpoint,” an allegedly snappy summary of the discussion.

Edition details

• Publisher: Berrett-Koehler Publishers
• Publication date: 2008
• Language: English
• ISBN 10: 1576754774
• ISBN 13: 9781576754771
• Binding: Hardcover
• Edition number: 1
• Number of pages: 240