Schwartz, Tyson, Soros, Martin Wolf to Headline Discussion on What Will (or Won't) Replace US Consumer
Regrettably, the Obama administration seems to be fumbling the ball on an economic policy course that restores confidence in the American economy on both the optics level and also on a substantive front that reorganizes the "social contract" and design of the real economy in the U.S.
Obama, in his 'loyalty' to his current economic team and the mistakes they are making is the antithesis of Abraham Lincoln. Obama may have tried to mimic Lincoln's "team of rivals" approach to politics -- but he needs to read the chapters on the number of generals Lincoln fired during the Civil War to finally get things moved forward.
Obama may need to fire a number of his economic generals who have been trying to restore Wall Street to what it once was -- not boldly and critically reorganize the financial sector in a way that the dysfunctional behavior that characterized its bubble success is dismantled and reshaped.
Civil society should not wait quietly while Obama's team continues to fumble -- and while its key economic policy chiefs play "point the finger" at their colleagues behind the scenes. It's time for serious discussion about what needs to be done. . .and we need better benchmarks than we have for applauding, critiquing, and simply measuring the policy steps the administration is taking.
Paul Krugman, James Galbraith, Joseph Stiglitz, Robert Reich, Robert Kuttner and others have been invaluable commentators and truth-tellers on the macro and micro dimensions of the economic policy steps and missteps the Obama team has been making.
Under the auspices of the New America Foundation Economic Growth Program, Next Social Contract Initiative, and Smart Globalization Initiative -- my colleagues and I are organizing a set of economic policy forums that are going to raise questions about our economic policy course.
The first "Bernard L. Schwartz Economic Policy Symposium" will take place in Washington at the New America Foundation offices on Thursday, 26 March 2009. Attendance information is here.
Financier and former Loral CEO Bernard Schwartz has been trying to push the administration and Congress to realize that there are different kinds of deficits the nation has to struggle with -- and the most important in his mind is leaving an "infrastruture deficit" to the next generation. He will be helping to open this important conference.
Philanthropist and investor George Soros will also be speaking -- and has been pushing a five point plan for the Obama team to consider. His new book is about to appear -- but a short primer piece of his recently appeared on Huffington Post and outlined five key points of an economic recovery plan that the Obama team has flubbed up on for the most part:
1. A fiscal stimulus package2. A thorough overhaul of the mortgage system
3. Recapitalization of the banking system
4. An innovative energy policy
5. Reform of the international financial system
Former National Economic Adviser to President Clinton, Laura D'Andrea Tyson, will also be engaging in a discussion with Chief Economics Commentator and Associate Editor of the Financial Times Martin Wolf. Wolf, who recently authored the book Fixing Global Finance thinks that there is very little that can be done at present time to respond to the collapse of consumption by American consumers that have been the essential driver of global growth. Tyson has been very focused on the question of what America needs to do to rewire a "new social contract" with middle class American workers who have been left behind by the patterns of economic growth in the past.
I have been suggesting for some time that "Tysonomics" -- which recognizes a need for government prioritizing of certain strategic sectors and of regulation -- is very different than the Rubinomics that dominated the Clinton administration (even when Laura Tyson worked for it) and which arguably were at the root of much of the deregulatory, neoliberal mania that helped hatch the economic disaster the nation and world find themselves in today.
Others in this conference will be Mark Zandi, Chief Economist and Co-Founder, Moody's Economy.com as well as author of Financial Shock: Global Panic and Government Bailouts -- How We Got Here and What Must Be Done to Fix It; Tom Gallagher, Senior Managing Director, International Strategy and Investment (ISI) Group; Richard Vague, Chairman and CEO, Energy Plus and Founder and Former Chairman & CEO, First USA Bank; Leo Hindery, Managing Partner, Inter-Media Partners and former CEO, AT&T Broadband Network as well as Former CEO, Yankee Entertainment and Sports Network -- who has been writing recently on the "Obama job creation deficit"; Jeff Madrick, Director of Policy Research, Schwartz Center for Economic Policy Analysis, The New School and author most recently of The Case for Big Government.
Also. . .Sherle R. Schwenninger, Director, Economic Growth Program, New America Foundation; William Gerrity, Chairman and CEO, Gerrity International; Clyde V. Prestowitz, Jr., President and Founder, Economic Strategy Institute; Nicholas Lardy who recently co-authored China's Rise: Challenges and Opportunities and is Senior Fellow, Peterson Institute for International Economics; and finally one of the most prescient forecasters of today's major economic crisis -- Desmond Lachman, Resident Fellow, American Enterprise Institute.
I will be moderating the meeting along with my colleague Sherle Schwenninger and New America Foundation President and New Yorker staff writer Steve Coll.
Bernard Schwartz. . .George Soros. . .Laura Tyson. . .Martin Wolf. . .Clyde Prestowitz. . .Desmond Lachman. . .Tom Gallagher. . .Steve Coll. . .Mark Zandi. . .William Gerrity. . .Leo Hindery. . .Richard Vague. . .Nicholas Lardy. . .Jeff Madrick. . .Sherle Schwenninger. . .and others make up quite a line up for a great meeting.
For those who are deeply interested in these issues, I should note that George Soros' revised book (in paperback) will be released next week on March 30th and is titled The Crash of 2008 and What it Means: The New Paradigm for Financial Markets. Soros will also have a major economic policy critique/op-ed in tomorrow's (Monday, 23 March) Financial Times and another economic policy op-ed in Tuesday's (24 March) Wall Street Journal. Leo Hindery will have a front cover featured article on the Obama administration's job creation deficit in the April 1 edition of The Nation which should be online early this next week.
This entire conference will STREAM LIVE at The Washington Note between approximately 8:30 am and 1:00 pm EST on Thursday, 26 March 2009.
If you would like to attend, RSVP information is here.
The purpose we have in organizing this meeting is to try and position some of the key issues that should be considered at the London G-20 meeting and to begin to emphasize that the fumbling on economic policy needs to stop.
It's time to begin organizing a Team B economic policy effort -- even if it is organized by a network of concerned civil society leaders.
-- Steve Clemons publishes the popular political blog, The Washington Note
This is great, thanks Steve!! (I've got a Doctor's appt, Thursday morning, so hopefully you'll leave the youtube clips up for me to listen to in the afternoon...)
Good luck, and enjoy...
March 22, 2009 7:18 PM | Reply | Permalink
I will be sure that we get YouTube clips of each segment up for later viewing. all best, steve
March 23, 2009 1:35 PM | Reply | Permalink
Thanks, looking forward to it...
March 23, 2009 2:07 PM | Reply | Permalink
Tyson has been very focused on the question of what America needs to do to rewire a "new social contract" with middle class American workers who have been left behind by the patterns of economic growth in the past.
Currently and, if we remain on the present course, in the future too.
And credit being given based on unrealistically valued real estate holdings, at high rates of interest, have shown they don't work. So how do we get more money into the hands of the American consumer? It starts with universal health care for all based on what the Canadians and Western European countries have put in place. That is why they aren't struggling economically as bad as the US is. It isn't the be all and end all of the problem but exponentially skyrocketing health care costs is at the core of the problems along with the costs of carbon based energy which we are currently reliant upon.
March 22, 2009 7:30 PM | Reply | Permalink
“Replace the US consumer” as what? Over-spender-in-chief?
Why, oh why can’t people live within their means?
March 22, 2009 9:22 PM | Reply | Permalink
Because our economy and the other economies of the world depend on the American consumers spending money they don't have. And since the financial 'Lords of the Universe' will raise the wages of the American workers over their collective dead bodies we get easy credit at high interest rates...shop to you drop America.
March 22, 2009 9:28 PM | Reply | Permalink
Looks great Steve but I'm very concerned that you and yours are not even discussing the elephant in the room here. There is no such thing as an institution that represents a "systemic risk" and all bailout money paid so far has been wasted. We should be concentrating on reclaiming lost assets. Let's get all TARP money repaid, let's refuse another dime to AIG and let's not be afraid to nationalize failed banks where necessary.
We can repair the economy but bailouts don't help. Lets be honest -- anyone who lost money because they were wrong in believing that the issuer of their CDS contract could pay off is getting what they deserve. I shouldn't be on the hook for Goldman's lack of due dilligence. AIG wrote CDS contracts that obliged it to pay 44% of capital if things got really bad and they didn't hedge. They did, however, reveal that fact in filings. Anyone who did business with AIG after AIG revealed that fact knew the risks and should take their losses.
One of your points is that we should recapitalize the banks, persumably at public expense. Why? They were capitalized. They blew it. Why should we pay for that? The world doesn't need Goldman Sachs. If theyn fail, they fail. We shouldn't rescue them.
And, I like Soros but let's not forget who he really is: he made his fortune by breaking the British pound and then he made more by breaking the Thai bhat. He is, I think, a good and smart man who has destroyed many lives without apology. He's problematic, at best. We shouldn't blindly take his advice.
March 22, 2009 11:03 PM | Reply | Permalink
Thanks Destor -- very good note above -- and I'll take note of it during the meeting. On Soros -- what I particularly like about him, perhaps in contrast to you, is that George is one of the world's shrewdest investors who for a long time has been warning all of us to beware market fundamentalism and fundamentalists.
I have read all of his books -- and to some degree, they can be collectively summarized as public warnings to Central Bank authorities and political financial elites to "change things to stop people like me before we kill again..."
So, I'm into Soros -- but appreciate where you are coming from.
March 23, 2009 1:34 PM | Reply | Permalink
So basically what we have here is an advertisement for an event Steve Clemons is moderating?
I am so impressed.
March 22, 2009 11:06 PM | Reply | Permalink
Well, to be fair, Steve Clemons rocks. So, we're mostly cool with that around here.
However, I do agree with you that I don't like purely promotional posts here at TPMCafe. Thing is, this would seem to be of genuine interest to most of us readers and, as I posted above, I'd really like it if Steve were to say, read my comment and include more points of view in his event -- for example, a voice from the anti-bailout left. Dean Baker would be a good choice.
March 22, 2009 11:52 PM | Reply | Permalink
Thanks for the support Destor -- Dean Baker will be in future such meetings that I also hope to alert Cafe goers about -- but always attached to a fully substantive/provocative/ideas-laden preamble. ;-) I would have asked Dean this time -- but am out of room on this forum, but there are others. He's a great friend and has a great mind.
best, steve
March 23, 2009 1:37 PM | Reply | Permalink
Hi Gary -- Yeah, I guess I am. I started out writing about the fact that I think Geithner and others are losing the confidence of even those who want to be most supportive -- like Bernard Schwartz, Soros, Jamie Galbraith, Joe Stiglitz, Paul Krugman and others... And then raised (below the fold) the conference which is bringing a number of these people to the table. I think that an event -- and the streaming of it -- is like a "live oped" and feel little compunction noting it in a forum like TPMCafe if it's connected to real substance. So, you tagged me -- but I think given my views -- I hope you'll understand the rationale and support it.
All best, steve clemons
March 23, 2009 1:31 PM | Reply | Permalink
You are a bit premature about firing generals when the opening skirmishes are going quite well except for the spin some people are putting on it.
That said, I'm in favor of independently developed plans B, C, D, .... so I will be interested to follow the conference.
Soros is a really mixed bag. He admits openly that he doesn't understand rational economics, and he's been pushing his pet "philosophy" of Reflexivity and Fallibility for some time now. I read the earlier edition of his upcoming book. While I picked up a few facts and ideas, it's understandable why he needs to call himself a "failed philosopher", no offense.
March 23, 2009 2:12 AM | Reply | Permalink
The "social contract" issue could be the real (and possibly most dangerous) elephant in the room.
Failure to address the social contract issue, as I think Ms. Tyson may fully understand, could lead to very disturbing political activity.
For instance, contracts for Wall Street institutions and 'employees' are deemed to be hallowed instruments whereas contracts for blue-collar automobile workers are readily viewed as transgressible documents.
Steve and New America Foundation - thanks for organizing these forums.
March 23, 2009 3:50 PM | Reply | Permalink