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EconomicPolicyInstitute November 7, 2008

This week’s historic election of Barack Obama underscores how dramatically the center has shifted in U.S. economic thinking. As EPI President Larry Mishel wrote in a post-election statement, voters overwhelmingly cited the economy as their top concern and soundly rejected the model that has held sway since Ronald Reagan. “It is now clear that the failed supply-side, market fundamentalist experiment has wrecked the economy” with excessive deregulation, large tax cuts for corporations and the wealthy, and unrestrained globalization, he wrote. A new era of shared prosperity now seems within reach, he added. “The task ahead is to fashion policies that will improve the economic circumstances of the vast majority, and thereby restore confidence,” he wrote. “There is much to overcome.”

Right now, the situation is dire
Tracking economic indicators has been grim work for the past six months. EPI Vice President Ross Eisenbrey, with research assistance from Kathryn Edwards, compiled some notable numbers on jobs, wages, foreclosures, bankruptcies, and trade. And things are expected to get much worse before they improve, with unemployment perhaps reaching 8% or more in 2009.

The October jobs report from the Bureau of Labor Statistics underscored how quickly the economy is unraveling, with unemployment jumping to 6.5%. As EPI economist Heidi Shierholz noted in EPI’s monthly Jobs Picture, the economy is in deep recessionary territory. “What this means is that millions of working families are unable to find the jobs and hours they need, while those who are working are seeing much slower wage growth,” she wrote. “The consequent loss of income means that consumption–which makes up 70% of the economy–is also slowing. To pull out of this negative spiral, it is imperative that policy makers pass a large, second economic recovery plan–on the order of $300 billion–that is focused on elements that provide the maximum economic bang for the buck.”

Healthcare debate ragesHealth care debate rages
The election is over, but the debate on health care is just getting started. EPI has provided valuable research and analysis on health care proposals, including those put forward by the presidential candidates. As part of the public education on health care reform, EPI economist Elise Gould served as a panelist at Columbia University Medical Center’s Healthcare Election Forum. The heated debate drew over 250 people in Columbia University’s medical community and received ample coverage from The Columbia Spectator. Along with critiquing the candidates’ health care plans, Gould also debated with Robert Goldberg, vice president of the Center for Medicine in the Public Interest. In particular, she defended the need for increased oversight of medical care and discussed the potential for a national health insurance exchange.

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