Alan Blinder

Alan S. Blinder is the Gordon S. Rentschler Memorial Professor of Economics at Princeton University and Co-Director of Princeton's Center for Economic Policy Studies, which he founded in 1990. He has served as vice chairman of the Federal Reserve Board and was a member of President Clinton's original Council of Economic Advisers.

Recent Articles

Poised for Prosperity?

Drawing the right lessons from the past quarter-century

AP Photo/Khue Bui
This article appears in the Spring 2015 issue of The American Prospect magazine. Subscribe here . Celebrate our 25th anniversary with us by clicking here for a free download of this special issue . History doesn’t repeat itself, but as Mark Twain famously suggested, it occasionally rhymes. About 15 years ago, I partnered with Janet Yellen—who has since gone on to bigger and better things—to write a short book titled The Fabulous Decade . The decade, of course, was the 1990s, or more specifically, the period beginning in 1992 or 1993 and ending in 2000—by common consent the most successful period in U.S. economic history since the 1960s. The questions for this article are whether, how, and to what extent current preconditions and policy settings resemble those that prevailed around President Bill Clinton’s inauguration day, whether the good times are about to roll again, and what policy adjustments may be needed to usher in a new period of prosperity. At...

Outsourcing: Bigger Than You Thought

The great conservative political philosopher Edmund Burke, who probably would not have been a reader of The American Prospect , once observed, "You can never plan the future by the past." But when it comes to preparing the American workforce for the jobs of the future, we may be doing just that. For about a quarter-century, demand for labor appears to have shifted toward the college-educated and away from high-school graduates and dropouts. This shift, most economists believe, is the primary (though not the sole) reason for rising income inequality, and there is no end in sight. Economists refer to this phenomenon by an antiseptic name: skill-biased technical progress. In plain English, it means that the labor market has turned ferociously against the low skilled and the uneducated. In a progressive society, such a worrisome social phenomenon might elicit some strong policy responses, such as more compensatory education, stepped-up efforts at retraining, reinforcement (rather than...

Social Security and the New Fiscal Policy

The most profound, and profoundly disturbing, innovation in budget policy during the administration of George W. Bush has been to discard the old-fashioned notion that presidents who propose a tax cut or new spending should also propose some way to pay for it. That practice, apparently, is just soooo 20th century. Observers of this administration's fiscal policies won't be surprised to learn that the president's preferred way (according to presumably authorized leaks) to pay for the so-called transition costs of partially privatizing Social Security is to not pay for them at all. That, of course, is precisely how President Bush paid for his tax cuts, for the wars in Iraq and Afghanistan, for the Medicare drug benefit, and so on. Never mind the cost. Just put it on the national tab. Most thoughtful proponents of privatization (and there are some) see it as a way to boost national saving. Here's the argument: An unfunded Social Security system reduces the need for...

Controversy: Can't We Grow Faster?

Continuing the debate from "The Speed Limit," by Alan S. Blinder, and "Why We Can Grow Faster," by Barry Bluestone and Bennett Harrison (September-October 1997).

Continuing the debate from " The Speed Limit ," by Alan S. Blinder, and " Why We Can Grow Faster ," by Barry Bluestone and Bennett Harrison (September-October 1997). Dear Alan : In your recent article [" The Speed Limit : Fact and Fancy in the Growth Debate," TAP , September-October 1997], we very much appreciate your modest, wonderfully humorous, and clearly stated reasoning against betting too heavily on faster growth. We share with you the view that the more capital-friendly tax and regulatory policies advocated by the right (and, increasingly, by the center as well) will not cause the economy to grow faster, in either the short or long run, and would only serve to make the distribution of income between labor and capital even more unequal than it is already. As you will see in this letter, we also share other points of concurrence. But we apparently have an honest disagreement on the central point. We see many signs of a higher potential growth rate; you see growth continuing at...

The Speed Limit

It would be nice if the Dodgers returned to Brooklyn and if the economy grew faster than 2.3 percent. But neither of these things is in the offing.

S ay it ain't so, Joe," a young boy is reputed to have implored Shoeless Joe Jackson, the tarnished star of the infamous Chicago "Black Sox" in 1919. That same cry went up in February 1997 when the Council of Economic Advisers, then headed by Joseph Stiglitz, pegged the U.S. economy's long-term growth rate at only 2.3 percent per annum. "Say it ain't so, Joe." Like the young baseball fan, growth optimists from both the left and the right of the political spectrum do not want harsh realities intruding upon and ruining their dreams. But Joe Jackson couldn't say it wasn't so, because it was. And neither could Joe Stiglitz. Based on some simple arithmetic that I will display shortly, mainstream economists are exceptionally united right now around the proposition that the trend growth rate of real gross domestic product (GDP) in the United States—the rate at which the unemployment rate neither rises nor falls—is in the 2 percent to 2.5 percent range. In fact, a central aspect...