> From: Brad DeLong[SMTP:delong at econ.Berkeley.EDU]
>
> Yes. But look on the bright side! 4% unemployment. A bunch of
> after-tax money transferred to the working poor via the EITC. The
> first sustained growth in low-end real wages in a generation. And at
> least a halting of the rise in income inequality if not a reversal in
> relative inequality trends.
-Three out of four of these are mostly Alan Greenspan's doing.
What is it with the cult of Greenspan on both the left and the right? Suddenly, we are all monetarists and fiscal policy is irrelevant to the health of the economy and job growth?
Isn't it possible that it was precisely the support for low-end wage growth, both through EITC transfers, affirmative action, support for low-wage unionization struggles, etc., that has contributed to sustaining this economic boom? I know Max and other folks hate Clinton's retreat from public fiscal Keynesianism, but there are also large components of private Fordist traditions that Clinton was publicly committed to and actually followed through on in a number of areas.
Not as much as any of us would like, but to give all credit to Greenspan and the bond market just seems a complete ideological surrender on left traditions supporting wage growth as a key component of improving economic growth. Greenspan did not increase the minimum wage, expand the EITC, support unionization drives and contract wins, fund infrastructure, defend Davis-Bacon wage levels, or support a range of other initiatives that contributed to that lower end wage growth.
Of course, those initiatives were not enough and the wealthy made out like bandits, but the gains for the non-rich are real and, on the ideological front, may be a key part of why this boom has been so long. But the cult of Greenspan just narrows the debate and avoids any discussion of private wage policies as a reason for growth.
-- Nathan Newman