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Sunday, January 20, 2013

Shiller: Obama Needs a New Deal

Robert Shiller says Obama needs a new metaphor expressing his vision and policies for the economy. He doesn't like the 2008 slogan "Change we can believe in," or the 2012 slogan "Forward." Same for "Hope" or "Yes we can!":

Obama Needs a New Deal, by Robert Shiller: ...Obama’s slogans are examples of “dead metaphors”: They are not part of an overall conceptual scheme. By contrast, in the 1930s, President Franklin Roosevelt used a metaphor that remains very much alive today. The idea of a “new deal”... Apparently, Roosevelt, or his speechwriters, borrowed it from A New Deal, a book by Stuart Chase that was published in 1932 and adapted the same year into a cover story for the New Republic. ...
Formulating a good metaphor for Obama’s second term ... might embody the idea of an “inclusive economy.”... Opinion polls show that, above all, what Americans want are jobs— the beginning of inclusion.
The parallel to Chase’s book today is the 2012 bestseller Why Nations Fail by ... Daron Acemoglu and ... James Robinson. Acemoglu and Robinson argue that in the broad sweep of history, political orders that include everyone in the economic process are more likely to succeed in the long term. The time seems ripe for that idea, and it fits with the triumph of inclusiveness symbolized by Obama himself. But another step in metaphor-building is needed to encapsulate the idea of economic inclusion.
The biggest successes of Obama’s first term concerned economic inclusion. The Affordable Care Act (“Obamacare”) is providing more people with access to health care ... than ever before... The Dodd-Frank financial reforms created the Consumer Financial Protection Bureau... And he signed the JOBS Act,... which aims to create crowdfunding Web sites that allow small investors to participate in start-up ventures. ...
The right metaphor would spin some of these ideas, or others like them, into a vision for America’s future that, like the New Deal, would gain coherence as it is transformed into reality. On January 29, Obama will give the ... State of the Union address... He should be thinking about how to express—vividly and compellingly—the principles that have guided his choices so far, and that set a path for America’s future.

This is a pretty good window into Shiller's thinking. He talks about the ACA, Dodd-Frank, and crowdfunding for small investors -- what else does he mean by inclusion?:

We have not reached the pinnacle of economic inclusion. There are hundreds of other possibilities, including improved investor education and financial advice, more flexible mortgages, better kinds of securitization, more insurance for a broader array of life’s risks, and better management of career risks. Much more progress toward comprehensive public futures and derivatives markets would help, as would policies to encourage the emerging world to participate more in the US economy.

Pretty heavily weighted toward financial markets, and not exactly what I think of as "inclusion." Where are the steps, for example, to increase opportunity, a necessary condition for broader inclusion? As he says, people want decent jobs. How does all this talk about inclusion in financial markets, investor education and the like, help with that? (Then again, maybe all of this concern with financial markets does, in fact, expose the "principles that have guided [Obama's] choices so far.")

    Posted by on Sunday, January 20, 2013 at 11:21 AM in Economics, Politics | Permalink  Comments (44)

          


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