1. WHATS THE ECONOMY FOR, ANYWAY? Part 1 of 3

2. Two Competing Views of the Economy The Private Ownership Society Vs. The Public Good Society

3. If you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country. -- George W. Bush. If you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country. -- George W. Bush. We need an ownership society [in which] individuals are empowered by freeing them from dependence on government handouts..., patients control their own health care, parents control their own children's education, and workers control their retirement savings. -- The Cato Institute We need an ownership society [in which] individuals are empowered by freeing them from dependence on government handouts..., patients control their own health care, parents control their own children's education, and workers control their retirement savings. -- The Cato Institutehealth careeducationretirement savingsCato Institutehealth careeducationretirement savingsCato Institute The Logic of the Ownership Society

4. Criticisms of the Ownership Society

5. Some call it the Youre on Your Ownership Society. Others call it The Risk Society. Some call it the Youre on Your Ownership Society. Others call it The Risk Society.Youre on Your Ownership Society.The Risk Society.Youre on Your Ownership Society.The Risk Society. Before they can join the Ownership Society they…[Americans]…have got to pay their credit card bills, their rising variable-rate mortgages and their auto loans. After that, theres no money left… -- Robert Reich Before they can join the Ownership Society they…[Americans]…have got to pay their credit card bills, their rising variable-rate mortgages and their auto loans. After that, theres no money left… -- Robert Reich Criticisms of the Ownership Society (cont)

6. The Logic of the Public Good Society Supporters of the public good society envision an economic system that provides: Fair and Decent Wages Fair and Decent Wages Good Healthcare Good Healthcare Affordable Housing Affordable Housing Secure Communities Secure Communities Good Education Good Education Efficient and Clean Transportation Efficient and Clean Transportation A Healthy Environment A Healthy Environment Time for Family Time for Family Time for Friends Time for Friends Retirement Security Retirement Security

7. Criticisms of the Public Good Society

8. The larger the slice taken by government, the smaller the cake available for everyone." -- Margaret Thatcher The larger the slice taken by government, the smaller the cake available for everyone." -- Margaret Thatcher … And you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It's our duty to look after ourselves… -- Margaret Thatcher … And you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It's our duty to look after ourselves… -- Margaret Thatcher Government is not a solution to the problem, it is the problem. -- Ronald Reagan Government is not a solution to the problem, it is the problem. -- Ronald Reagan Criticisms of the Public Good Society (cont)

9. Evaluating Current Policies Before evaluating current policies we need to ask a fundamental question: Whats the economy for, anyway?

10. The Conventional View of the Economy The American economy's "ultimate purpose is to produce more consumer goods." - Arthur F. Burns, Chairman of President Eisenhower's Council of Economic Advisors, 1953 The American economy's "ultimate purpose is to produce more consumer goods." - Arthur F. Burns, Chairman of President Eisenhower's Council of Economic Advisors, 1953 "Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction and our ego satisfaction in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever- increasing rate. - Victor Lebow, Retail Analyst, 1955 "Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction and our ego satisfaction in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever- increasing rate. - Victor Lebow, Retail Analyst, 1955

11. Conventional Measures of Economic Well-Being The various stock market averages The various stock market averages (DIJA, NASDAQ, S & P 500, etc.) Housing Starts Housing Starts The Inflation Rate The Inflation Rate The Unemployment Rate The Unemployment Rate Consumer Confidence Consumer Confidence Gross Domestic Product (GDP) Gross Domestic Product (GDP)

12. The World Banks GDP Rankings (2006) U.S. Millions of Dollars Rank 1United States (13,244,550)11Russia (979,048) 2Japan (4,367,459)12India (886,867) 3Germany (2,897,032)13South Korea (888,267) 4China (2,630,113)14Mexico (840,012) 5United Kingdom (2,373,685)15Australia (754,816) 6France (2,231,631)16Netherlands (663,119) 7Italy (1,852,585)17Turkey (392,590) 8Canada (1,269,096)18Belgium (393,590) 9Spain (1,225,750)19Sweden (385,293) 10Brazil (1,067,706)20Switzerland (377,240)

13. Some US States Have Bigger GDPs Than Most Countries

14. The IMFs GDP Per Capita Rankings (2006) Purchasing Power Parity (PPP) Rank 1Luxembourg ($80,471)11United Kingdom ($35,051) 2Ireland ($44,087)12Finland ($34,819) 3Norway ($43,574)13Belgium ($34,478) 4United States ($43,444)14Sweden ($34,409) 5Iceland ($40,277)15Qatar ($33,049) 6Switzerland ($37,369)16Australia ($32,938) 7Denmark ($36,549)17Singapore ($32,867) 8Austria ($36,031)18Japan ($32,647) 9Canada ($35,494)19Germany ($31,095) 10Netherlands ($35,078)20Italy ($30,732)

15. An Alternative View of the Economy Gifford Pinchot was the first director of the US Forest Service (1905-1910) and a Republican governor of Pennsylvania. Gifford Pinchot was the first director of the US Forest Service (1905-1910) and a Republican governor of Pennsylvania. According to Pinchot, the purpose of the economy is to promote According to Pinchot, the purpose of the economy is to promote 1) the greatest good 2) for the greatest number 3) over the longest run

16. How Might We Measure the Greatest Good? Wealth Wealth Income Income Health Health Family Life Family Life Community Life Community Life Security/Safety Security/Safety Education Education Life Satisfaction Life Satisfaction Freedom Freedom Etc. Etc.

17. How Might We Measure the Greatest Number? Gap Between Rich & Poor Gap Between Rich & Poor Poverty Rate Poverty Rate Social Mobility Social Mobility Access to Health Care Access to Health Care Access to Education Access to Education Etc. Etc.

18. How Might We Measure the Longest Run? National debt National debt Personal savings rate Personal savings rate Pension security Pension security Health security Health security Environmental sustainability Environmental sustainability Etc. Etc.

19. Time Series of the U.S. Personal Savings Rate Americans now have a net personal savings rate of -1%, lower than any European country except Greece!!!

20. Please Continue with Part 2: Whats the Economy for, Anyway?