Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at Brandeis University's Heller School. His latest book is Debtors' Prison: The Politics of Austerity Versus Possibility. He writes columns for The Huffington Post, The Boston Globe and the New York Times international edition. 

Recent Articles

Comment: Boom Box

This month, the economic boom enters its 107th month, making it the longest expansion in U.S. history. But there are now two small clouds on the economic horizon. With the economy having grown in the fourth quarter of 1999 not at the 3- or even 4-percent annual rate that most economists now consider sustainable, but at 5.8 percent, the Federal Reserve will try to temper the economy's growth. And just to give the Fed ammunition, the oil exporting countries have lately succeeded in restricting output and raising the price of crude oil, which filters through to the measured rate of inflation. Nothing scares central bankers like inflation, never mind whether it has any connection to domestic economic "overheating." The growth rate has soared to levels not seen since the 1960s because the new economy really is new. Technology that took more than two decades to gestate is finally bearing fruit in higher productivity, in applications as diverse as retail sales,...

Comment: Speed Bumps

W ill the economic expansion just keep rolling on? Probably not. The economy has certainly demonstrated that it can sustain higher rates of growth than most economists thought possible. This higher speed limit is one part technology, one part greater competition, and one part belated recognition that the earlier pessimism about the economy's potential was wrong. The economy could well have achieved somewhat higher growth and fuller employment without inflation all along. Even so, that doesn't mean we'll never have another recession. The entire history of industrial capitalism is one of unexpected shocks. These setbacks have often been compounded by bad policy. Most recent recessions have resulted from the Federal Reserve overreacting to inflationary pressures or using the wrong tools. The current Fed chairman, Alan Greenspan, has been less inflation-phobic than most of his predecessors. But Greenspan is now playing a very risky game, tightening money even while inflationary pressures...

Back to the Future

D uring the postwar boom, it seemed that mass unemployment had been cured forever. A mixed economy--based on activist government, deficit spending, public investment, strong trade-unionism, a welfare state, and a warfare state--kept the industrial West on a high-growth path. Living standards rose steadily. Satisfied voters returned to office politicians who believed in this model. Not only is that economy dead, but the soil that nurtured it has seriously eroded. Today most politicians in the West believe their task is to expunge the mixed economy, not to reinvent it. As mass unemployment keeps rising and wages stagnate, it is bizarre to watch governments pursue freer trade, more deregulation, limitations on government, balanced budgets, and privatization, as if a pre-Keynesian free market would somehow restore high growth and full employment. With the collapse of communism and the revival of ghosts of prewar nationalism in both Eastern and Western Europe, the stakes could not be...

Of Our Time: Wayne's World

O ur text, fittingly enough, is the editorial page of the Wall Street Journal . At the top of the page for June 3 is an essay by Wayne Angell, the former governor of the Federal Reserve. "Over the past 15 years stock prices in the U.S. have risen at a 15 percent annual rate," he begins. "This long bull market didn't just happen. There is a rational explanation. Economic policy has brought the U.S. to a new economic era—an era of stable money and lower income tax rates." Inflation is at a reassuring 2.5 percent, Angell continues. "The market may have already risen on expectations of a reduction in the nominal capital gains rate." But "if the Federal Reserve allowed inflation rates to escalate, it would be a disaster for the equity market. By my estimate, if inflation rose to 4 percent, the Dow could be expected to fall to 6500. . . . If inflation were 5 percent, the Dow could plummet to 4500." There we have it. The economy is, and should be, run in the interest of the stock market...

Market, State, and Dystopia

A dystopia is a utopia in reverse. The post-1980 era is likely to be remembered as a free market dystopia--a headlong compulsion to throw away the mixed economy that was built on the ruins of depression and world war in favor of a marketized society. This compulsion has been ground into the lenses of the press, the economics profession, and the political class generally. It is presumed that greater marketization is desirable and in any case inevitable, despite accumulating evidence to the contrary. And though we now have a Democratic president of liberal spirit, who is well placed to reverse the conservative assumptions of the 1980s, the White House is providing scant intellectual revision. Much of the New Democrat creed accepts the premise that more of society should be marketized; it just wants to do the job more humanely. To look at today's economic conundrums, against the turbulent economic history of the twentieth century, is to appreciate the continuities of a recurring malady:...

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