Next Social Contract

The Social Security system was intended not merely to provide public pensions for the elderly but to establish a framework for a comprehensive system of economic security. Steven Attewell writes: “We need to go back to the original drawing board – the Social Security Act of 1935 – to finish the job it began and create a truly universal and comprehensive social welfare state.”

Let me say how grateful I am to Mark Schmitt for taking my argument seriously and responding to it so thoughtfully. He is one of the smartest DC political junkies around.

Incipient totalitarianism? Hardly. I though I had a catchy title with “All Power to the Choice Architects.” I was not aiming to compare Cass Sunstein, one of the most independent-minded and subtle thinkers of our time, to Lenin.

Probably the most distinctive innovation in the Obama Administration's brand of liberalism is its interest in behavioral economics and the power of modest incentives--the “nudge,” as administration official Cass Sunstein calls them--as an instrument of policy.

There is widespread recognition that the financial crisis which triggered the Great Recession was significantly due to financial excess, particularly related to real estate. Now, policymakers are looking to reform financial systems in hope of avoiding future crises. But like the drunk who looks for his lost keys under the lamppost because that is where the light is, policymakers remain fixated on capital standards because that is what is already in place.

If we go by election results, and no better guide to our national mood exists, the years of conservative hegemony in the United States are over, at least for the foreseeable future. Not only has the country elected a Democratic president and Congress, but conservative ideas, which once had seemed so innovative, are increasingly stale or non-existent. Meanwhile, the Republican Party seems both directionless and leaderless.

The economy has lost 8 million jobs since the beginning of the recession. But because the population is growing, we need to create over 9.6 million jobs. Due to severe job loss and steady population growth, the unemployment rate has soared to 9.8%, nearly as high as during the early 1980s.

To read more, click on the slideshow below.

What the Government Can Do to Better Promote Job Creation
by Timothy J. Bartik

Jobs: What Can We Do?
by James K. Galbraith

The Time Has Come for Direct Job Creation
by L. Randall Wray

Today, we spend three times as much on gasoline as we did six years ago. Although most of us are feeling the pinch, those hurt the most by increased energy costs are working families who struggle to buy gas for their cars and to heat and cool their homes. This energy crisis will not be solved with one-shot fixes like gas tax holidays or stimulus checks. While high energy prices appear to be part of America's future, few of the 70 million American families making less than $60,000 a year are prepared for this new reality.

In the fall of 2007, Countrywide Financial, then the nation's largest mortgage lender, had a curious new idea -- or, more precisely, an old one. It would no longer import foreign capital through Wall Street to make subprime loans. Instead, it would depend entirely on deposits from savers, who would finance each other's mortgages -- kind of like that humble thrift institution run by George Bailey in the movie It's a Wonderful Life."

This proposal offers dramatic improvements in highway safety and public health, as well as much reduced highway maintenance and construction costs. It will also significantly reduce energy use, greenhouse gas emissions, traffic jams, and shipping costs while providing significant short- and long-term economic stimulus. If fully implemented, it could get as many as 83 percent of all long-haul trucks off our nation's highways by 2030, reduce carbon emissions by 39 percent and oil consumption by 15 percent. Call it the "Back on Tracks" project.