INTRODUCTION: THE ENDLESS SLUMP
1. Gideon Rachman, “The Making of a German Europe,” Financial Times, March 23, 2013.
CHAPTER ONE: THE RISE OF OVERSUPPLY
1. Lester Thurow, Head to Head: The Coming Economic Battle Among Japan, Europe, and America (New York: William Morrow, 1992).
2. Francis Fukuyama, The End of History and the Last Man (New York: Free Press, 1992).
3. Richard Dobbs et al., “The World at Work: Jobs, Pay, and Skills for 3.5 Billion People,” McKinsey Global Institute, January 2012.
4. “Social Security with Chinese Characteristics,” The Economist, April 11, 2012.
5. Benjamin Carlson, “In China, College Education Comes at a Price,” Global Post, August 6, 2012.
6. Geeta Anad, “India Graduates Millions, But Too Few Are Fit to Hire,” Wall Street Journal, April 5, 2011.
7. “Emerging vs. Developed Countries’ GDP Growth Rates 1986 to 2015,” Real World Economics Review blog, March 24, 2011.
8. “Power Shift,” The Economist, August 4, 2011.
9. “China Foreign Exchange Reserves,” Trading Economics website.
10. “Gross Domestic Savings (% of GDP), Trading Economics website.
11. Ibid.
12. James Fallows, “The $1.4 Trillion Question,” The Atlantic, January 1, 2008.
13. “Health Expenditure, Total (% of GDP),” The World Bank website.
14. “Total Reserves (Includes Gold, Current U.S. $),” The World Bank website.
15. “Gross Domestic Savings (% of GDP), The World Bank website.
16. “Global Shadow Banking Monitoring Report 2012,” Financial Stability Board, November 11, 2012.
17. “A World Awash in Money,” Bain & Company website, November 14, 2012.
18. “Mortgage Debt Outstanding by Type of Property and Holder: 1990 to 2010,” U.S. Census Bureau website.
19. Heather Timmons, “Trouble at Fannie Mae and Freddie Mac Stirs Concern Abroad,” New York Times, July 21, 2008.
20. “Major Foreign Holders of Treasury Securities,” U.S. Department of Treasury website.
21. Ibid.
22. “State and Local Governments—Indebtedness: 1990 to 2008,” U.S. Census Bureau website.
23. Shahien Nasiripour, “Joseph Cassano, Ex-AIG Exec, Is Unapologetic, Blames Auditors for Losses,” Huffington Post, June 30, 2010.
24. “Global Shadow Banking Monitoring Report 2012.”
25. Jinyoung Kim, “Past and Future of the Labor Force in Emerging Asian Economies,” Asian Development Bank website, September 2010.
26. Ibid.
27. Richard Dobbs et al., “The World at Work.”
28. “Education Indicators in Focus,” Organization for Economic Co-operation and Development website, May 2012.
29. “Currency Composition of Official Foreign Exchange Reserves,” International Monetary Fund website.
30. “A World Awash in Money.”
CHAPTER TWO: OUT OF BALANCE
1. Jonathan Woetzel et al., “Preparing for China’s Urban Billion,” McKinsey Global Institute, February 2009.
2. “Major Foreign Holders of Treasury Securities,” U.S. Treasury Department website.
3. “Income and Poverty Rate at 1990s Level,” New York Times, September 13, 2011.
4. Author’s analysis, based on data from “Current Account Balance (BoP, Current US $),” World Bank website.
5. Author’s analysis, based on data from “Current Account Balance (BoP, Current US $).”
6. Ibid.
7. Ibid.
CHAPTER THREE: MAKING THE WORST OF IT
1. “U.S. Domestic Debt as a Percentage of GDP,” Charting the Economy, http://chartingtheeconomy.com, June 25, 2009.
2. Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World (New York: Simon and Schuster, 1998).
3. “U.S. Savings Rate’s Deterioration Since 1980,” Seeking Alpha, http://seekingalpha.com, March 22, 2009.
4. “Sold Out: How Wall Street and Washington Betrayed America,” Essential Information and the Consumer Education Foundation website, March 4, 2009.
5. Matthew Sherman, “A Short History of Financial Deregulation in the United States,” Center for Economic and Policy Research website, July 2009.
6. See for example Robert B. Reich, “Making Industrial Policy,” Foreign Affairs, Spring 1982.
7. Timothy Noah, The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It (New York: Bloomsbury Press, 2012).
CHAPTER FOUR: LET THEM EAT DEBT
1. Thomas Frank, What’s the Matter with Kansas? How Conservatives Won the Heart of America (New York: Metropolitan Books, 2004).
2. “Remarks by Chairman Alan Greenspan,” Federal Reserve Board, April 8, 2005.
3. Jennifer Wheary and Tamara Draut, “Who Pays? The Winners and Losers of Credit Card Deregulation,” Demos website, August 1, 2007.
4. “Historical Data: Consumer Credit Outstanding,” The Federal Reserve website.
5. “Debt Nation,” PBS NewsHour, April 18, 2001.
6. “Historical Data: Consumer Credit Outstanding.”
7. “The Garn–St. Germain Depository Institutions Act of 1982,” Federal Deposit Insurance Corporation website.
8. “America’s Debt Overhang: Growth, Austerity, and Other Policy Choices,” New America Foundation website, September 2009.
9. Elizabeth Warren and Amelia Warren Tyagi, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke (New York: Basic Books, 2003).
10. “Trends in the Distribution of Household Income,” Congressional Budget Office website, October 2011.
11. Thomas Piketty and Emmanuel Saez, “The Evolution of Top Incomes: A Historical and International Perspective,” AEA Papers and Proceedings 96 (2006): 200–205.
12. “U.S. Trade in Goods and Services—Balance of Payments,” U.S. Census Bureau website, February 13, 2013.
13. Peter Kilborn, “Japan Invests Huge Sums Abroad, Much of It in U.S. Treasury Bonds,” New York Times, March 11, 1985.
14. Rakesh Kochhar, “A Recovery No Better Than the Recession: Median Household Income, 2007 to 2011,” Pew Research Center website, September 12, 2012.
15. Neil Irwin and Dan Eggen, “Economy Made Few Gains in Bush Years,” Washington Post, January 12, 2009.
16. “The Low-Wage Recovery and Growing Inequality,” National Employment Law Project website, August 2012.
17. “Trends in the Distribution of Household Income.”
18. Robert E. Scott, “Growing U.S. Trade Deficit with China Cost 2.8 Million Jobs Between 2001 and 2010,” Economic Policy Institute website, September 10, 2011.
19. Justin R. Pierce and Peter K. Schott, “The Surprisingly Swift Decline of U.S. Manufacturing Employment,” The National Bureau of Economic Research website, December 2012.
20. “Growing U.S. Trade Deficit with China.”
21. “Foreign Trade: Trade in Goods with China,” U.S. Census Bureau website.
22. All figures from “Foreign Trade: Trade in Goods with China.”
23. “Historical Data: Consumer Credit Outstanding.”
24. “Credit Cards: Holders, Number, Spending, and Debt, 2000 and 2009, and Projections, 2012,” U.S. Census Bureau website.
25. Brett Weiss, “$1,000 a Day: Credit Card Solicitations in America,” Bankruptcy Law Network.
26. “The Plastic Safety Net: The Reality Behind Debt in America,” Demos website, October 12, 2005.
27. Cindy Zeldin and Mark Rukavina, “Borrowing to Stay Healthy: How Credit Card Debt Is Related to Medical Expenses,” Demos website, January 16, 2007.
28. Mark Kantrowitz, “Total College Debt Now Exceeds Total Credit Card Debt,” Fast Web, August 11, 2010, http:// www.fastweb.com/financial-aid/articles/2589-total-college-debt-now-exceeds-total-credit-card-debt.
29. “Flow of Funds Accounts of the United States,” Federal Reserve website, March 7, 2013.
30. “Refinance Activities Reports,” Freddie Mac, http://www.freddiemac.com/news/finance/refi_archives.htm.
31. Bill McBride, “Q3 2012: Mortgage Equity Withdrawal Strong,” Calculated Risk, December 10, 2012, http://www.calculatedriskblog.com/2012/12/q3-2012-mortgage-equity-withdrawal.html.
32. Alan Greenspan and James Kennedy, “Sources and Uses of Equity Extracted from Homes,” Federal Reserve website, March 2007.
33. “Household Sector Debt as a Percent of GDP,” Economagic.com, http://www.economagic.com/em-cgi/data.exe/var/togdp-householdsectordebt.
34. John Gittelsohn, “U.S. ‘Underwater’ Homes Increase to 28 Percent, Zillow Says,” Bloomberg, May 9, 2011.
CHAPTER FIVE: NATIONS IN NEUTRAL
1. “Employment Situation Summary,” Bureau of Labor Statistics, April 5, 2013, http://www.bls.gov/news.release/empsit.nr0.htm.
2. “Table A-15. Alternative Measures of Labor Utilization,” Bureau of Labor Statistics, April 5, 2013, http://www.bls.gov/news.release/empsit.t15.htm
3. “Alternative Unemployment Charts,” John Williams’ Shadow Government Statistics, http://www.shadowstats.com/alternate_data/unemployment-charts.
4. “Euro Area Unemployment at 11.8%,” Eurostate News Release, November 2012, http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-08012013-BP/EN/3-08012013-BP-EN.PDF.
5. “Euro Area Unemployment at 11.8%.”
6. “A Year of More: The High Cost of Long-Term Unemployment,” The Pew Charitable Trusts website, May 2012.
7. Rand Ghayad and William Dickens, “What Can We Learn by Disaggregating the Unemployment-Vacancy Relationship?” Federal Reserve of Boston website, October 2012.
8. “A New Jobs Program for People Trapped in Unemployment,” CBS News, February 19, 2012.
9. Katherine Bindley, “Long-Term Unemployment Worse Than a Criminal Record When It Comes to Job Placement: Survey,” Huffington Post, September 18, 2012.
10. Arthur Delaney, “Unemployed Face Discrimination Just One Month After Losing Their Jobs, Report Says,” Huffington Post, July 30, 2012.
11. Jeff Teitz, “The Sharp, Sudden Decline of America’s Middle Class,” Rolling Stone, June 25, 2012.
12. “Output Gap in Percent of Potential GDP,” World Economic Outlook, International Monetary Fund, http://www.econstats.com/weo/V009.htm.
13. “Budget and Economic Outlook: An Update,” Congressional Budget Office website, August 24, 2011.
14. “Output Gap in Percent of Potential GDP.”
15. Laurence M. Ball, “Hysteresis in Unemployment: Old and New Evidence,” National Bureau of Economic Research website, March 2009.
16. “Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports Infrastructure,” American Society of Civil Engineers website, September 2012.
17. Paul Krugman, End This Depression Now! (New York: W.W. Norton & Company, 2012).
CHAPTER SIX: THE EMPTY TOOLBOX
1. Eli Saslow, “‘Jobs Day’: Monthly Release Employment Data an Economic, Political Obsession,” Washington Post, March 9, 2012.
2. Michael Greenstone and Adam Looney, “The Role of Fiscal Stimulus in the Ongoing Recovery,” Brookings Institution website, July 6, 2012.
3. Josh Bivens and Heidi Shierholz, “Three Years into Recovery, Just How Much Has State and Local Austerity Hurt Job Growth?” Economic Policy Institute website, July 6, 2012.
4. Heidi Shierholz, “The Unemployment Rate Is Hugely Underestimating Slack in the Labor Market,” Economic Policy Institute website, April 5, 2013.
5. “Breakdown of Funds Paid Out by Category,” Recovery.gov, http://www.recovery.gov/Transparency/fundingoverview/Pages/fundingbreakdown.aspx.
6. Daniel Alpert, Robert Hockett, and Nouriel Roubini, “The Way Forward: Moving from the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness,” The New America Foundation, October 10, 2011.
7. Paul Krugman, “Earth to Ben Bernanke,” New York Times, April 24, 2012.
8. Molly Ball, “Romney Unveils 59-Point Jobs Plan,” Politico, September 6, 2011.
9. James Sherk and Salim Furth, “Heritage Employment Report: March Job Market Goes Out Like a Lamb,” Heritage Foundation website, April 5, 2013.
10. “Out of Keynes’s Shadow,” The Economist, February 12, 2009.
11. Joshua Cooper Ramo, “The Three Marketeers,” Time, February 15, 1999.
CHAPTER SEVEN: THE DETOUR ECONOMY
1. “Japan Interest Rate,” Trading Economics, http://www.tradingeconomics.com/japan/interest-rate.
2. Reference is to the speech made on August 15, 1945, by former Japanese emperor Hirohito when he asked his subjects to tolerate the American occupation of Japan after its defeat in World War II.
3. Conversation with author, April 11, 2013.
4. Alexandra Harney, “Without Babies, Can Japan Survive?” New York Times, December 15, 2012.
5. “Eurozone Recession to Deepen in 2013: Capital Economics,” FXstreet, January 10, 2013, http://www.fxstreet.com/news/forex-news/article.aspx?storyid=53dd8bde-1b4b-4ab4-8022-39f2513e3755.
6. Charles Roxburgh et al., “Debt and Deleveraging: Uneven Progress on the Path to Growth,” McKinsey Global Institute website, January 2012.
CHAPTER EIGHT: BAD VALUES
1. Walter Hickey and Grace Wyler, “Here’s Everything We Know About Mitt Romney’s Economic Plan,” Business Insider, October 4, 2012.
2. Léon Walras, Elements of Pure Economics (New York: Routledge, 2010).
3. Julian Hebron, “Shiller: Everyone’s Too Optimistic on Housing,” StockTwits.com, February 6, 2013; and Lauren Lyster, “This is Housing Bubble 2.0: David Stockman,” Daily Ticker, Yahoo! Finance, February 4, 2013.
4. Jared Bernstein, “Inflation and the Output Gap,” On the Economy website, August 28, 2012, http://jaredbernsteinblog.com/inflation-and-the-output-gap/
5. Jann Swanson, “Shadow Inventory on the Rise After 2012 Foreclosure Legislation,” Mortgage News Daily, March 28, 2013.
CHAPTER NINE: BLIND SPOTS
1. Daniel Alpert, Robert Hockett, and Nouriel Roubini, “The Way Forward: Moving from the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness,” The New America Foundation, October 10, 2011, 4.
2. Shawn Tully, “The 2011 Fortune 500: The Big Boys Rack Up Record-Setting Profits,” CNNMoney website, May 7, 2012.
3. “Cumulative Change in Total Economy Productivity and Real Hourly Compensation of Production/ Nonsupervisory Workers, 1948–2011,” State of Working America, http://stateofworkingamerica.org/chart/swa-wages-figure-4u-change-total-economy/
4. Chrystia Freeland, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (New York: Penguin Press, 2012).
5. Ross Eisenbrey, “America’s Genius Glut,” New York Times, February 7, 2013.
6. Holly Ellyatt, “Depression, Suicide Rise as Euro Debt Crisis Intensifies,” CNBC, September 4, 2012.
7. Mark Howarth, “Shock 15% Rise in Suicides Since the Recession as Unemployment and Bankruptcy Take Their Toll,” Daily Mail, May 25, 2012.
8. Alan Hall, “Suicides in Greece Rise by a Third as Financial Crisis Takes Its Toll,” Daily Mail, August 15, 2012.
9. Mari Yamaguchi, “Japan Suicide Rate Still Among the World’s Highest Due to Low Job Prospects,” Huffington Post, March 3, 2011.
10. http://www.nytimes.com/2013/05/03/health/suicide-rate-rises-sharply-in-us.html?_r=0.
11. Mark Follman, Gavin Aronsen, and Deanna Pan, “A Guide to Mass Shootings in America,” Mother Jones, February 27, 2013.
12. Tamara Draut, Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead (New York: Doubleday, 2006).
13. Steven Erlanger, “Young, Educated, and Jobless in France,” New York Times, December 2, 2012.
14. Edward N. Wolff and Maury Gittleman, “Inheritances and the Distribution of Wealth, or, Whatever Happened to the Great Inheritance Boom?” European Central Bank Working Paper No. 1300, February 14, 2011.
15. Susan Saulny, “After Recession, More Young Adults Are Living on Street,” New York Times, December 18, 2012.
CHAPTER TEN: THE STABILITY IMPERATIVE
1. “Statement on Signing the Omnibus Budget Reconciliation Act of 1990, November 5, 1990,” The American Presidency Project, http://www.presidency.ucsb.edu/ws/index.php?pid=19000.
2. Richard Grant, “How Reagan Was Compromised,” Forbes, September 2, 2012.
3. Douglas Martin, “Richard Darman, Veteran White House Deal Maker, Dead at 64,” New York Times, January 27, 2008.
4. Yalman Onaran, “U.S. Banks Bigger Than GDP as Accounting Rift Masks Risk,” Bloomberg, February 19, 2013.
5. Anat Admati and Martin Hellwig, “Must Financial Reform Await Another Crisis?” Bloomberg, February 5, 2013.
6. Sallie Krawcheck, “Four Ways to Fix Banks,” Harvard Business Review, June 2012.
7. Hyman P. Minsky, Stabilizing an Unstable Economy (New Haven: Yale University Press, 1986).
8. L. Randall Wray, “Minsky’s Money Manager Capitalism and the Global Financial Crisis,” Levy Economics Institute of Bard College, March 2011.
9. Simon Lack, The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True (New York: Wiley, 2012).
10. John Maynard Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt, Brace, and World, 1965).
11. Lynn Stout, The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public (San Francisco: Berrett-Koehler Publishers, 2012).
12. Daniel Alpert, “The Swiss Miss on Executive Pay,” Wall Street Journal, March 17, 2013.
CHAPTER ELEVEN: UNDERWATER NO MORE
1. “UPDATE 2—U.S. Household Debt Burden Eases in Second Quarter,” Reuters, September 16, 2011.
2. Daniel Alpert, Robert Hockett, and Nouriel Roubini, “The Way Forward: Moving from the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness,” The New America Foundation, October 10, 2011.
3. Joe Nocera, “The Freedom Recovery Plan,” New York Times, October 17, 2008.
CHAPTER TWELVE: REBUILD AND REFORM
1. Michael Grunwald, The New New Deal: The Hidden Story of Change in the Obama Era (New York: Simon and Schuster, 2012).
2. “2013 Report Card for America’s Infrastructure,” American Society of Civil Engineers website.
3. “Policies for Increasing Economic Growth and Employment in 2012 and 2013,” Congressional Budget Office website, November 15, 2011.
4. “Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports Infrastructure,” American Society of Civil Engineers website, September 2012.
5. Annie Lowrey, “Study of U.S. Health Care System Finds Opportunity to Improve,” New York Times, September 11, 2012.
6. “Report of the National Commission on Physician Payment Report,” National Commission on Physician Payment Reform website, March 2013.
7. Annie Lowrey, “Slower Growth of Health Costs Eases Budget Deficit,” New York Times, February 11, 2013.
8. Steven Brill, “Bitter Pill: Why Medical Bills Are Killing Us,” Time, March 4, 2013.
9. Megan Greene, “Greece Will Suffer Less If It Leaves Euro Now,” Bloomberg, March 11, 2012.
10. “Entrepreneurship Action Plan,” EUbusiness, January 9, 2013, http://www.eubusiness.com/topics/sme/entrepreneurship.
11. Charles R. Morris, Comeback: America’s New Economic Boom (New York: PublicAffairs, 2013).
12. E-mail to the author, April 9, 2013.
CHAPTER THIRTEEN: GOOD DEBT, BAD DEBT
1. J. Bradford DeLong and Lawrence H. Summers, “Fiscal Policy in a Depressed Economy,” Brookings Institution website, Spring 2012.
2. L. Bradford DeLong, “Increased Government Purchases Right Now Are Self-Funding,” Brad DeLong, October 11, 2012, http://delong.typepad.com/sdj/2012/10/increased-government-purchases-right-now-are-self-funding.html.
3. L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems (New York: Palgrave Macmillan, 2012).
4. “Allianz Global Wealth Report 2011,” Allianz website, September 14, 2011.
5. “Inclusive Wealth Report 2012,” International Human Dimensions Programme on Global Environmental Change website.
6. “Flow of Funds Accounts of the United States,” Federal Reserve website, March 7, 2013.
7. “The Debt to the Penny and Who Holds It,” Treasury Direct, http://www.treasurydirect.gov/NP/BPDLogin?application=np.
8. “World Economic Outlook,” International Monetary Fund website, October 2012.
9. “Problems and Priorities,” PollingReport.com website.
10. “The Real Election and Mandate,” Democracycorps.com, November 8, 2012.
CHAPTER FOURTEEN: A GLOBAL SYSTEM THAT WORKS
1. Conversation with the author, November 20, 2012.
2. Ibid.
3. Jean-Claude Trichet, “The Euro Zone and the Global Crisis,” New York Times, March 15, 2013.