Economy

Over a year ago, the world economy suffered a massive economic quake – and certain countries have been experiencing aftershocks ever since. Two such aftershocks have grabbed headlines, one recently in Greece and another last summer in California. A comparison of these two events reveals something about the respective features of the west's two leading capitalist economies, the US and Europe.

The symposium discussed and offered recommendations for the economic redevelopment of America, including energy, the overwhelming challenge of climate change, and the mechanics of fiscal policy. Governor Edward Rendell of Pennsylvania presented a keynote address, which lead into a discussion of issues that ranged from budgeting for jobs and investments, to how to plan and pay for the country's needed renovations. Panels offered actionable plans to deal with energy and climate change in light of the current financial situation.

The U.S. economic recovery is in serious need of a course correction.

The policy measures pursued to date have failed to produce a sustainable recovery of demand and investment, have reflated financial assets but at the expense of much needed job creation, and have done little to correct the global imbalances that helped cause the crisis.

It sounds like a dubious aspiration, but one of the more pressing priorities for America this decade is to preserve our cherished freedom to fail in this country. This freedom to fail may not have made it into President Franklin D. Roosevelt's famous declaration of the four freedoms that define America — it would have been bad karma on the eve of World War II — but it has long been one of the pillars of this country's exceptionalism. Call it the fifth freedom.

Middle-class kids are taught from an early age that they should work hard and finish school. Yet 3 out of 10 students dropped out of high school as recently as 2006, and less than a third of young people have finished college. Many economists attribute the sluggish wage growth in the U.S. to educational stagnation, which is one reason politicians of every stripe call for doubling or tripling the number of college graduates.

The California Asset Building Program released a report on the federal Earned Income Tax Credit’s impact on the California economy yesterday in Sacramento, and let’s just say that these bucks have a lot of bang.

Big business and advocates for the working poor often have trouble finding common ground. But that shouldn't be a problem for the next few weeks leading up to April 15. New research shows they both have more than ever at stake this year in boosting California's woefully low participation in the country's largest program for the working poor – the earned-income tax credit. They just need to realize it.

The central issue in American politics isn't health reform, though you'd never know it from watching the news. Rather, the central issue, the one that helps define all others, is wages. When real wages increase, societies tend to be more open and generous. But when living standards are under pressure, a climate of distrust prevails. People grow fearful of losing what they have, and so they question the ambitions of social reformers and free-traders and others who promise to overturn old and familiar ways of doing business, whether from the right or the left.

Welcome to the The Solarium, the new blog of the Smart Strategy Initiative here at the New America Foundation. We're proudly a part of the great team here in the American Strategy Program, the foreign policy department of the New America Foundation. That said, the core proposition behind our work is that it is time to transcend the sometimes hard, sometimes blurry lines that still separate economic policy from foreign policy, and think big about the next generation of American grand strategy.

The New America Foundation's Steve Clemons talks with Leo Hindery about the Obama administration’s green energy initiatives, and how they fit into a broader American manufacturing strategy to create the millions of jobs necessary to achieve a full economic recovery.