Here’s the Deal

An interview with Laura Tyson

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Mother Jones asked Laura Tyson, head of President Clinton’s Council of Economic Advisers, how the administration views the nation’s economic health. In an exclusive interview, she expressed concern about long-term economic trends, but disputed that gains in productivity would cause increased unemployment.

MJ: Has substantial unemployment become a permanent part of the economy?

Tyson: Most of the increase in unemployment that occurred between 1989 and 1993 was due to the slowdown in the growth rate of the economy, rather than any structural changes. In other words, there’s a fairly significant cyclical component to the unemployment of the last few years.

It’s true that the United States has too high a level of what you might call “cyclically insensitive” unemployment. If we got the economy back on an expansion path of 3 percent a year, we might bring unemployment down to 5.5 percent. That’s a high rate, and we want to do something about that.

Even more, we have to worry about the quality of jobs and the income they generate. For years, real wages have continued to fall, median family incomes have stagnated, and incomes for the bottom 20 percent of American families have fallen.

 


If the economy is doing well, then the jobs will create themselves.


MJ: What’s the administration doing about it?

Tyson: First, the earned-income tax credit will be phased in this April. It’s designed to guarantee that the worker who works full time and supports a family of four can bring that family above the poverty level.

Second, we can create jobs. The fact that we’ve now doubled the number of jobs we’re creating per month will generate some income growth for American families.

Third is investment–not only in infrastructure, but in people. There are a whole variety of education programs that we’re pushing: Head Start, school-to-work transition programs, improvements in education standards, and, in particular, a worker-retraining program. And we’re not looking just for public investment; we want to encourage private-sector investment as well.

MJ: Last February, the president suggested that investment should take priority over deficit reduction. Have your priorities changed?

Tyson: No. We all agreed that some short-term spending was needed ahead of deficit reduction, but we were defeated. Our plan contained a stimulus package that was meant to be up-front government spending before deficit reduction.

[But] in the last decade a consensus developed that the most important thing to do to put us on a sustainable path of economic growth is to reduce the deficit. I wish we could spend more money, but in the new budget we’re already asking for a substantial amount for investment programs.

MJ: What should be done for American workers, particularly in the manufacturing sector?

Tyson: The real problem for the economy is to generate attractive employment alternatives so that people can move from industries with increasing unemployment to new industries with new technologies. If the economy is doing well, then the jobs will create themselves. Structural and technological change will generate new demands, which will generate new jobs and higher wages.

MJ: So you’re optimistic?

Tyson: Look, we’re trying to be very realistic. The economy now seems to be on a path of moderate growth, which will gradually bring the unemployment rate down. A year ago, people were talking about a jobless recovery. Now they’re talking about a recovery with moderate job growth.

We aren’t ignoring the longer-term problems. These are trends we want to change and reverse. We can’t change them in a few months, but we can change them in a few years if we’re consistent in our approach and committed to more investment and more education.

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WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We canā€™t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who wonā€™t let independent, investigative journalism down are the people who actually care about its futureā€”you.

And we need readers to show up for us big timeā€”again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

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