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Getting Back to Full Employment:
A Better Bargain for Working People

The End of Loser Liberalism: Making Markets ProgressiveJared Bernstein and Dean Baker release the follow-up to their book, The Benefits of Full Employment (Economic Policy Institute, 2003). Getting Back to Full Employment builds on the evidence presented in their previous book, showing that real wage growth for workers in the bottom half of the income scale is highly dependent on the overall rate of unemployment.

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Biography

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, DC. He is frequently cited in economics reporting in major media outlets, including the New York Times, Washington Post, CNN, CNBC, and National Public Radio. He writes a weekly column for the Guardian Unlimited (UK), the Huffington Post, TruthOut, and his blog, Beat the Press, features commentary on economic reporting. His analyses have appeared in many major publications, including the Atlantic Monthly, the Washington Post, the London Financial Times, and the New York Daily News. He received his Ph.D in economics from the University of Michigan.

Dean has written several books, his latest being Getting Back to Full Employment: A Better Bargain for Working People. His other books includeTaking Economics Seriously (MIT Press), which thinks through what we might gain if we took the ideological blinders off of basic economic principles, False Profits: Recovering from the Bubble Economy (PoliPoint Press, 2010) about what caused - and how to fix - the current economic crisis. In 2009, he wrote Plunder and Blunder: The Rise and Fall of the Bubble Economy (PoliPoint Press), which chronicled the growth and collapse of the stock and housing bubbles and explained how policy blunders and greed led to the catastrophic - but completely predictable - market meltdowns. He also wrote a chapter ("From Financial Crisis to Opportunity") in Thinking Big: Progressive Ideas for a New Era (Progressive Ideas Network, 2009). His previous books include The United States Since 1980 (Cambridge University Press, 2007); The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (Center for Economic and Policy Research, 2006), and Social Security: The Phony Crisis (with Mark Weisbrot, University of Chicago Press, 1999). His book Getting Prices Right: The Debate Over the Consumer Price Index (editor, M.E. Sharpe, 1997) was a winner of a Choice Book Award as one of the outstanding academic books of the year.

Among his numerous articles are "The Benefits of a Financial Transactions Tax," Tax Notes 121, no. 4, 2008; "Are Protective Labor Market Institutions at the Root of Unemployment? A Critical Review of the Evidence," (with David R. Howell, Andrew Glyn, and John Schmitt), Capitalism and Society 2, no. 1, 2007; "Asset Returns and Economic Growth," (with Brad DeLong and Paul Krugman), Brookings Papers on Economic Activity, 2005; "Financing Drug Research: What Are the Issues," Center for Economic and Policy Research, 2004; "Medicare Choice Plus: The Solution to the Long-Term Deficit Problem," Center for Economic and Policy Research, 2004; The Benefits of Full Employment (with Jared Bernstein), Economic Policy Institute, 2004; "Professional Protectionists: The Gains From Free Trade in Highly Paid Professional Services," Center for Economic and Policy Research, 2003; and "The Run-Up in Home Prices: Is It Real or Is It Another Bubble," Center for Economic and Policy Research, 2002.

Dean previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He has also worked as a consultant for the World Bank, the Joint Economic Committee of the U.S. Congress, and the OECD's Trade Union Advisory Council. He was the author of the weekly online commentary on economic reporting, the Economic Reporting Review (ERR), from 1996 - 2006.

Biscuit

Biscuit is a 10-year old lapdog. He is retired from his career as an unwanted pet. Biscuit's former owner surrendered him to the Washington Humane Society due to economic hardship. He went to foster care and was adopted quickly. However, his new owner returned him half a year later because of health problems. Biscuit quickly settled into his old foster home and this time was determined to stay. He succeeded. His foster parents adopted him after failing to find a home for him. Biscuit graduated from the Washington Humane Society's Learning and Behavior Center with a degree in Well-Mannered Dog. He is currently in training for his Canine Good Citizen certificate and would love to become a therapy dog working in retirement homes. He lives in Washington, DC with Dean Baker, Helene, and his sister Olive.

Olive

Olive has a big heart. Once upon a time her heart was filled with worms that had multiplied to such numbers that they were strangling it. After her owner died, Olive had been left tied up in a backyard of an abandoned house living off food scraps thrown over the fence by a kind neighbor and drinking rain water collected in dirty puddles. Winter set in and Doberman Pincher Rescue of Pennsylvania (www.dprpa.org) heard about little Olive and rescued her. After months of treatment for heartworm and a zoo of intestinal parasites, Olive was ready to fill her heart with love. Dean adopted Olive on May Day in 2011, and she adopted him. It was love at first sight. Olive and Dean go running in Rock Creek Park, they write blog posts together, with Olive nosing the keyboard, and they discuss the economy. Grrrrr! Olive even goes to work with Dean time to time. One day, Olive hopes to be brave enough to accompany Dean to the Hill to testify about the need for strengthening the country’s anti-cruelty laws.

Getting Back to Full Employment: A Better Bargain for Working People

By Jared Bernstein and Dean Baker
Center for Economic and Policy Research (2013)

"A gem of a book — explaining why full employment is so important and how it can be achieved. Mandatory reading for every concerned citizen."

Robert B. Reich, Chancellor's Professor of Public Policy
University of California at Berkeley,
and former U.S. Secretary of Labor.

While most people intuitively know that low unemployment is important to job seekers, they may not realize that high levels of employment actually would make an enormous difference in the lives of large segments of the workforce who already have jobs. Particularly in an era of historically high wage and income inequality, many in the workforce depend on full employment labor markets, and the bargaining power it provides, to secure a fair share of the economy’s growth. For the bottom third or even half of the wage distribution, high levels of employment are a necessary condition for improving wages, higher incomes, and better working conditions.

Getting Back to Full Employment is a follow-up to a book written a decade ago by the authors, The Benefits of Full Employment (Economic Policy Institute, 2003). It builds on the evidence presented in that book, showing that real wage growth for workers in the bottom half of the income scale is highly dependent on the overall rate of unemployment. In the late 1990s, when the United States saw its first sustained period of low unemployment in more than a quarter century, workers at the middle and bottom of the wage distribution were able to secure substantial gains in real wages. When unemployment rose in the 2001 recession, and again following the collapse of the housing bubble, most workers no longer had the bargaining power to share in the benefits of growth. The book also documents another critical yet often overlooked side effect of full employment: improved fiscal conditions (without mindless budget policies like the current sequestration). Finally, in this volume, unlike the earlier one, the authors present a broad set of policies designed to boost growth and get the unemployment rate down to a level where far more workers have a fighting chance of getting ahead.

The End of Loser Liberalism:
Making Markets Progressive

Dean Baker

Most people define the central point of dispute between liberals and conservatives as being that liberals want the government to intervene to bring about outcomes that they consider fair, while conservatives want to leave things to the market. This is not true. Conservatives actually rely on the government all the time, but most importantly in structuring the market in ways that ensure that income will flow upwards. The framing that "conservatives like the market while liberals like the government," puts liberals in the position of seeming to want to tax the winners to help the losers.

This "loser liberalism" is bad policy and horrible politics. The efforts of liberals would be much better spent on battles over the structure of markets so that they don't redistribute income upward. This book describes some of the key areas in which progressives can focus their efforts to restructure markets so that more income flows to the bulk of the working population rather than just a small elite.

By releasing The End of Loser Liberalism: Making Markets Progressive under a Creative Commons license and as a free download, Baker walks the walk of one of his key arguments — that copyrights are a form of government intervention in markets that leads to enormous inefficiency, in addition to redistributing income upward. (Hard copies are available for purchase, at cost.) Distributing the book for free not only enables it to reach a wider audience, but Baker hopes to drive home one of the book's main points via his own example. While the e-book is free, donations to the Center for Economic and Policy Research are welcomed.

Creative 
Commons License
The End of Loser Liberalism: Making Markets Progressive by Dean Baker is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Taking Economics Seriously

By Dean Baker
MIT Press (2010)

There is nothing wrong with economics, Dean Baker contends, but economists routinely ignore their own principles when it comes to economic policy. What would policy look like if we took basic principles of mainstream economics seriously and applied them consistently?

In the debate over regulation, for example, Baker – one of the few economists who predicted the meltdown of fall 2008 – points out that ideological blinders have obscured the fact there is no "free market" to protect. Modern markets are highly regulated, although intrusive regulations such as copyright and patents are rarely viewed as regulatory devices. If we admit the extent to which the economy is and will be regulated, we have many more options in designing policy and deciding who benefits from it. On health care reform, Baker complains that economists ignore another basic idea: marginal cost pricing. Unlike all other industries, medical services are priced extraordinarily high, far above the cost of production, yet that discrepancy is rarely addressed in the debate about health care reform. What if we applied marginal cost pricing—making doctors' wages competitive and charging less for prescription drugs and tests such as MRIs?

Taking Economics Seriously offers an alternative Econ 101. It introduces economic principles and thinks through what we might gain if we free ourselves from ideological blinders and get back to basics in the most troubled parts of our economy.

A Boston Review Book

False Profits: Recovering from the Bubble Economy

By Dean Baker
PoliPoint Press (2010)

From PoliPointPress:

Despite reports that the recession may be over, the unemployment rate is more than ten percent and home foreclosures are at a record high. It’s no secret that the U.S. economy is in shambles because of the recent housing bubble. However, according to Dean Baker, Co-Director of the Center for Economic and Policy Research, the people who looked the other way as the eight trillion dollar housing bubble grew unchecked are trying to rewrite history by downplaying the impact of the bubble. In Baker’s new book, False Profits: Recovering from the Bubble Economy, he recounts the strategies used by the country’s top economic policymakers to keep the American public unaware of their failure to recognize the housing bubble and to take steps to rein it in before it grew to unprecedented levels, resulting in the loss of millions of jobs, homes, and the life savings for tens of millions of people

"What caused the Great Crisis? Who was responsible? How bad is it? What should we do now? In False Profits, Dean Baker blows away smokescreens and names the real culprits. Along the way, he hands up an indictment of economists – in government and academia – who for years could not see what was in front of their noses."

James K. Galbraith, author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too

"Dean Baker’s False Profits is simply the best succinct explanation of the causes, cures, dynamics, and politics of the financial crisis – an indispensable book."

Robert Kuttner, co-editor, The American Prospect

"Dean Baker has an incredible ability to simplify the complex and distill economic history into its most critical components. In False Profits, he squarely lays the blame for our current financial mess on the anemic leaderships of an elite group of men who remain unaccountable. After delivering this necessary dose of truth, Baker outlines practical solutions to achieve lasting future stability – solutions Washington should take seriously, before Wall Street is allowed to inhale many more trillions of our taxpayer dollars."

Nomi Prins, author of It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street

"Dean Baker warned us what was coming. Alas, the government and most economists ignored him. They denied that a housing bubble existed and would soon collapse with devastating consequences. Now we can read why Dean got it right when so many experts were blind. The story is intriguing – and deeply disturbing."

William Greider, National Affairs Correspondent, The Nation,
and author of Come Home, America

Plunder and Blunder:
The Rise and Fall of the Bubble Economy

By Dean Baker
Polipoint Press(2009)

For the second time this decade, the U.S. economy is sinking into a recession due to the collapse of a financial bubble. The most recent calamity will lead to a downturn deeper and longer than the stock market crash of 2001.

Dean Baker’s Plunder and Blunder chronicles the growth and collapse of the stock and housing bubbles and explains how policy blunders and greed led to the catastrophic—but completely predictable—market meltdowns. An expert guide to recent economic history, Baker offers policy prescriptions to help prevent similar financial disasters.

"Dean Baker warned us what was coming. Alas, the government and most economists ignored him. They denied that a housing bubble existed and would soon collapse with devastating consequences. Now we can read why Dean got it right when so many experts were blind. The story is intriguing—and deeply disturbing."

William Greider, National Affairs Correspondent, The Nation,
and author of Come Home, America

"Dean Baker foresaw the housing crisis, first, persistently, and almost alone, while Bush fiddled, Congress snoozed, and the media looked resolutely the other way. In Plunder and Blunder, he delivers his trademark one-two punch: clarity and honesty, in the face of vast malfeasance."

James K. Galbraith, author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too

The United States Since 1980

By Dean Baker
Cambridge University Press (2007)

This provocative book describes the sharp right turn the United States has taken following the election of Ronald Reagan as president in 1980. The treatment details how the policies pursued by the Reagan administration were a break from both the policies pursued by prior administrations and those pursued in other wealthy countries. The Reagan administration policies had the effect of redistributing both before- and after-tax income upward, creating a situation in which the bulk of the economic gains over the last quarter century were directed to a small segment of the population. The analysis explains how both political parties have come largely to accept the main tenets of Reaganism, putting the United States on a path that is at odds with most of the rest of the world and is not sustainable.

The Conservative Nanny State:
How the Wealthy Use the Government to Stay Rich and Get Richer

By Dean Baker
A free e-book (2006)

Economist Dean Baker debunks the myth that conservatives favor the market over government intervention. In fact, conservatives rely on a range of “nanny state” policies that ensure the rich get richer while leaving most Americans worse off. It’s time for the rules to change. Sound economic policy should harness the market in ways that produce desirable social outcomes – decent wages, good jobs and affordable health care

"Here is the brutal truth, exposed systematically, methodically, unsparingly. Forget the pork rinds and the hokey Texas twang: Conservative government is government by and for the upper class."

Thomas Frank, author of What's the Matter with Kansas? How Conservatives Won the Heart of America

"Dean Baker is one of the most insightful and original economists in Washington. With this book, he exposes the prevailing myth of modern conservatives. They are not for limited government, as they claim. Rather, they are for a government that helps their own. Baker says it is time to balance the books. Government is by all the people, for all the people. It's that simple."

Jeff Madrick, author of Why Economies Grow: The Forces That Shape Prosperity and How We Can Get Them Working Again

"There’s a new book from Dean Baker available as a free PDF download or in paperback if you're so inclined. It's fantastic... It would be a wonderful thing to start getting attention to some of the issues he raises. At the end of the day, the current Democratic agenda of raising the minimum wage and re-establishing pay-as-you-go budget rules is a bit unambitious."

Matthew Yglesias, The american Prospect

"In his recent book, The Conservative Nanny State, the economist Dean Baker argues that government nannyism, broadly defined, benefits the rich. So there is no point in pretending that government doesn't influence behavior."

Daniel Akst, The New York Times, July 23, 2006

"[The book] examines massive government interventions in the market—including immigration, trade, monetary and intellectual property policy—and notes how they all have the curious effect of making America's wealthiest people even more stupendously rich. And as if this weren't bad enough, Baker has made The Conservative Nanny State available for free as a pdf (or at low cost as a paperback). Clearly he's a madman who'll stop at nothing."

Jonathan Schwarz, TinyRevolution.com

"Baker knows what the phrase "free market" really means, and in his new book, The Conservative Nanny State (which you can purchase in paperback or download as an e-book free of charge), he lays waste to the notion that American conservatives embrace anything resembling a truly free market. In fact, they're perverse Marxists, using heavy-handed government intervention to redistribute wealth upward."

Joshua Holland, , AlterNet

"Baker does not use the term "crony capitalism" to describe the conservative economic agenda, but it is surely in the spirit of his argument. Skimming through the book shows that, to a degree, cronyism is in the eye of the beholder. For example, Baker takes aim at copyright and patent protection, expressing a view of intellectual property very different from mine…Because my textbooks are copyrighted, I suppose that I am a crony, using the power of the "conservative nanny state" to enrich myself as the expense of poor students around the world. Although I disagree with Baker on a wide range of topics, I will give him credit for one thing: He is not a hypocrite. Baker is distributing his new book free over the internet. As for me, if you want one of my books, you will have to fork over the cash."

Greg Mankiw, Harvard University

"Dean Baker has done us all a great service by exposing the counterfeit language pundits and politicians use to hide who really gets what in our economy. The biggest welfare chiselers, it turns out, are the corporate rich. This excellent book convincingly shows that the fundamental issue about government is not its size, but whose side it is on."

Jeff Faux, Economic Policy Institute

"More good ideas than a dozen Center for American Progress symposia. New America Foundation, this should make you feel old. If a million Kossacks typed on a million keyboards, eventually they would duplicate it. Eat your heart out, Hamilton Project. 113 pp. and a free download."

Max Sawicky, Max Speak, You Listen!

"Dean Baker is an innovative political thinker and has a gift for presenting economic issues in a clear, coherent way. He is particularly good at unmasking the hidden assumptions built into the political discourse about economic issues, and demonstrating how those assumptions, if unchallenged, will continue to put progressives on the defensive and, in the process, inflict economic damage on the country as a whole... The book provides a handy guide to exposing conservative reliance on government intervention into the market economy. It may well change the way you think about economics, markets and the like"

Daily Kos

"Baker had me from the preface…Writing for the layman, he puts the last 25 years of economic policy into a framework that cleverly repositions the terms of debate. Once one can point out that the so-called free market does not exist, and in fact is being warped and twisted by the right far more than by the left, one becomes much more potent on the ideological battlefield. So next time you feel like picking a bar fight on the topic of inflation, read a chapter or two of "The Conservative Nanny State" first. You'll be well armed."

Andrew Leonard, Salon

"My favorite economist, Dean Baker (I want his rookie card!), has just put out a free PDF of his latest book, The Conservative Nanny State. I would urge everyone to read this book -- it's not all directly related to environmental causes, but some of it is. More broadly, there's an obvious moral: The system we live in is, to an enormous extent, determined by government policies. Understanding that, and understanding how the apparatus of the state is tilted towards the already-wealthy, is crucial to any progressive cause"

John McGrath, Gristmill

The Benefits of Full Employment:
When Markets Work for People

By Jared Bernstein and Dean Baker
Economic Policy Institute (2003)

From the Economic Policy Institute:

When the 1990s business cycle ended, so did full employment. In a very short time millions lost their jobs, and the unemployment rate shot back up. Many economists and policy makers will try to argue that the latter 1990s was an aberration and that we cannot realistically aspire to get back to the tight labor markets that prevailed during that time. But the lessons learned leave us with no justification for not pursuing a true full employment policy.

Social Security: The Phony Crisis

By Jared Bernstein and Dean Baker
Center for Economic and Policy Research (2013)

"A gem of a book -- explaining why full employment is so important and how it can be achieved. Mandatory reading for every concerned citizen."

Robert B. Reich, Chancellor's Professor of Public Policy
University of California at Berkeley,
and former U.S. Secretary of Labor.

While most people intuitively know that low unemployment is important to job seekers, they may not realize that high levels of employment actually would make an enormous difference in the lives of large segments of the workforce who already have jobs. Particularly in an era of historically high wage and income inequality, many in the workforce depend on full employment labor markets, and the bargaining power it provides, to secure a fair share of the economy’s growth. For the bottom third or even half of the wage distribution, high levels of employment are a necessary condition for improving wages, higher incomes, and better working conditions.

Getting Back to Full Employment is a follow-up to a book written a decade ago by the authors, The Benefits of Full Employment (Economic Policy Institute, 2003). It builds on the evidence presented in that book, showing that real wage growth for workers in the bottom half of the income scale is highly dependent on the overall rate of unemployment. In the late 1990s, when the United States saw its first sustained period of low unemployment in more than a quarter century, workers at the middle and bottom of the wage distribution were able to secure substantial gains in real wages. When unemployment rose in the 2001 recession, and again following the collapse of the housing bubble, most workers no longer had the bargaining power to share in the benefits of growth. The book also documents another critical yet often overlooked side effect of full employment: improved fiscal conditions (without mindless budget policies like the current sequestration). Finally, in this volume, unlike the earlier one, the authors present a broad set of policies designed to boost growth and get the unemployment rate down to a level where far more workers have a fighting chance of getting ahead.