Benjamin M. Friedman is the William Joseph Maier Professor of Political Economy at Harvard. His books include The Moral Consequences of Economic Growth and Day of Reckoning: The Consequences of American Economic Policy Under Reagan and After.

 (November 2015)

The Joys of Innovation: For Profit Only

Edmund Phelps, Amartya Sen, and Joseph Stiglitz at a conference on the future of capitalism, Paris, January 2009
In his inaugural address on March 4, 1933, Franklin D. Roosevelt sought to reassure his fellow citizens that he would devote full effort to putting them back to work and lifting them out of the widespread poverty and destitution into which the Depression of the past three years had sunk …

The Pathology of Europe’s Debt

German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble before a vote on financial help for Greece, Bundestag, Berlin, November 2012
Today Europe is living through a difficult time. Germany’s finance minister, Wolfgang Schäuble, has called the recent elections for the European Parliament “a disaster,” going on to conclude that “all of us in Europe have to ask ourselves what we can do better…we have to improve Europe.” But what is …

The Oligarchy in America Today

Robert Redford in The Great Gatsby, 1974
Alexis de Tocqueville began his classic description of democracy in America by remarking that what struck him most about the strange new country he visited in the early 1830s was “the general equality of condition among the people.” Much of the rest of what he wrote was an elaboration of …

Whither China?

The skyline of Shanghai, looking from the Haitong Securities Building toward the Pudong financial district, 2007
Westerners have perceived a potential economic threat from China for a very long time. Their chief protection, they thought, was the distance. In 1750 David Hume wrote that “a Chinese works for three-halfpence a day, and is very industrious. Were he as near us as France or Spain, every thing …

Cassandra Among the Banksters

William Rhodes, senior vice-chairman of Citigroup, with Josef Ackermann, chairman of Deutsche Bank, at the Institute of International Finance spring membership meeting, Beijing, June 2009
The banksters, as some people have taken to calling them, have had a mixed run lately.1 Just a year or two ago, at the height of the financial crisis and during its immediate aftermath, most Americans were acutely aware of the damage done to our financial system and our …

Two Roads to Our Financial Catastrophe

President Barack Obama delivering a statement about financial reform at the White House, January 21, 2010. With him are Treasury Secretary Timothy Geithner, Representative Barney Frank, and Economic Recovery Advisory Board Chairman Paul Volcker.
One inescapable principle highlighted by the current financial crisis in the United States is that a democracy gets the regulation it chooses. If voters elect public officials who do not believe in regulation, and if those officials appoint people of like mind to lead the key agencies that make up …

The Failure of the Economy & the Economists

By now there are few people who do not acknowledge that the major American financial institutions and the markets they dominate turn out to have served the country badly in recent years. The surface evidence of this failure is the enormous losses—more than $4 trillion on the latest estimate from …

A Challenge to the Free Market

Is George W. Bush a conservative? Have his administration’s policies reflected conservative principles? In both 2001 and 2003 President Bush successfully proposed large tax cuts. The President has also provided federal support for “faith-based” social programs ranging from soup kitchens to job training to prison education. And although there is …

Chairman Greenspan’s Legacy

The US financial markets are suffering their rockiest period since the nation’s savings and loan industry collapsed at the end of the 1980s. The economy either is on the verge of the first business recession since 2001 or is already in it. The Federal Reserve System is taking dramatic actions …

FDR & the Depression: The Big Debate

The depression of the 1930s was a worldwide event. In most economically advanced countries the fall in output and employment was the deepest and the most protracted in recorded history. In many of these countries the economic disaster also had profound political consequences, most prominently the rise to power of …

Bush & Kerry: A Big Divide

Twenty years and five presidential elections ago, Walter Mondale said that Ronald Reagan’s economic policy was turning America into a “nation of hamburger flippers.” Although the recovery from the steep 1981–1982 recession was well under way by election time, and American businesses were employing four million more people than they …

Globalization: Stiglitz’s Case

The most pressing economic problem of our time is that so many of what we usually call “developing economies” are, in fact, not developing. It is shocking to most citizens of the industrialized Western democracies to realize that in Uganda, or Ethiopia, or Malawi, neither men nor women can expect …

Gore vs. Bush: The Difference

October 16, 1996: The US economy was in its sixth consecutive year of expansion. Only 5.2 percent of the labor force was unemployed, at that time nearly as low a rate as at any point since before the OPEC cartel raised oil prices in 1973. Inflation during the previous twelve …

The Power of the Electronic Herd

In a widely publicized study carried out in the late 1950s and early 1960s, researchers asked citizens of more than a dozen countries around the world whether they were happy with their lives. While the answers indicated a wide range of attitudes within each country, the surprising result—which attracted much …

The New Demon

In his new book, ominously titled The Great Betrayal, Patrick Buchanan seeks to show that the economic difficulties and anxieties faced by working Americans today, including large parts of the middle class, are the result of free trade and the pressures of open competition in the world economy. More broadly, …

There They Go Again

Santayana’s warning that those who forget the past are condemned to repeat it has become a stock cliché of political criticism. But what about those who remember the past all too well yet choose to repeat its mistakes nonetheless? One of the more remarkable developments of the 1996 presidential campaign …

Must We Compete?

The summer’s renewed decline of the dollar against the yen, at long last making one US cent worth less than one Japanese yen, has once again concentrated public attention on America’s difficulties in international economic relations. Concerns along such lines were also widespread a decade or so ago, when a …

The Clinton Budget: Will It Do?

“Perhaps if people were told of their dangers,” Churchill suggested to Britain’s war cabinet in 1940, “they would consent to make the necessary sacrifices.” Economic dangers differ from wartime peril, of course, but over much of the past year the American political system looked as if it were about to …

Clinton’s Opportunity

President-elect Clinton faces a situation in which US economic policy and the US economy have reached a standoff. Business is sluggish in part because it must carry the weight of past mistakes, both public and private, but also in part because it has been receiving little help from what in …

The Morning After

Today the ability of the American economy to provide rising incomes and expanding job opportunities is in greater doubt, and at greater genuine risk, than at any other time in recent memory. Even during the record-length business expansion that began in 1983 and ended in 1990, growth in US productivity …

Reagan Lives!

The legislation enacting Reaganomics may now be mostly gone, but the economic legacy of Ronald Reagan remains. Perhaps more important, the political attitudes that made many Americans so receptive to the Reagan program in the first place remain as well. One of the most significant lessons to be drawn from …

A Deficit of Civic Courage

In his approach thus far to major questions of economic policy President Bush is like a man who has just inherited his grandparents’ house and has to sift through their accumulated belongings before putting the property up for sale. He carefully picks up item after item, examines it fondly, allows …

The Election and the Future: A Symposium

C. Vann Woodward It was President Reagan himself who suggested that the recent presidential election might be regarded as a referendum on his own presidency. There is much to support his view. “I feel a little like I’m on the ballot myself,” he said, and he campaigned that way. The …

The Campaign’s Hidden Issue

When they mention economics, both of this year’s candidates have concentrated, predictably, on prosperity: How successful has the Reagan administration been in creating jobs, boosting incomes, and containing inflation since the current business expansion began at the end of 1982? What can be done about those Americans who remain poor? …