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News from EPI “Prosperity Economics” provides economic blueprint for long-term growth

Jaymie Gustafson, 202-293-6200 x211
Jeff Parcher, Center for Community Change, 202-339-9341 703-314-6778
Josh Goldstein, AFL-CIO, 202-637-5219, 202-251-7438

“Prosperity Economics” provides economic blueprint for long-term growth

New Paper Criticizes “Myths” of Current Economic Debate and Offers Evidence-Based Alternative

July 31, 2012 (Washington, D.C.) – Professor Jacob Hacker and Nathaniel Loewentheil of Yale University today released their new paper, Prosperity Economics: Building an Economy for All, at the Economic Policy Institute. This bold paper provides a comprehensive blueprint to grow our nation’s economy in a way that works for everyone.

Drawing on recent economic research, lessons of our history, and the success stories of other nations, Hacker and Loewentheil argue that the only path to sustainable, long-term growth is through an economy in which the benefits of growth are broadly shared. Prosperity economics depends on what they call the three pillars of prosperity: growth, security and democracy.

“To achieve an economy that works for all Americans, we must focus on innovation-led growth grounded in job creation and public investment; security for workers and their families; and an accountable, effective democracy,” said Professor Hacker at a briefing at the Economic Policy Institute. “Together, these three pillars will strengthen the middle class and drive our economy forward.”

Prosperity Economics argues that current austerity policies have failed and are holding back growth and increasing inequality in the United States. The paper calls on the federal government to step into the fray and start rebuilding the American dream and lays out policy recommendations and political reforms that will achieve this long-term goal.

Professor Hacker was joined by the AFL-CIO, Center for Community Change, The Leadership Conference on Civil and Human Rights, Economic Policy Institute, SEIU and the National Council of La Raza. These organizations – along with other leading labor, community and advocacy groups – will use the core propositions in the paper as a clarion call for their members.

“Prosperity economics, as an integrated set of policies, offers a light at the end of the long economic tunnel of a generation of stagnant wages and financial crises,” said Richard Trumka, President of the AFL-CIO, at the briefing. “Prosperity economics means jobs, it means investment and it means growth.”

“The Great Recession shows us that when an economy is built on unequal policies, everyone loses,” said Deepak Bhargava, Executive Director of the Center for Community Change. “Prosperity economics increases revenue and growth and addresses the vast inequality and plummeting living standards that failed conservative economic policies have created. The Center for Community Change will use this paper to organize its members leading up to the November election and beyond.”

“Hacker and Loewentheil have created a serious, economically sound plan that meets the challenges facing America’s working people, specifically job creation and better job quality, the key elements of an economy that works for everyone,” said Lawrence Mishel, President of the Economic Policy Institute.

“More than half of all new workers and nearly one in four American school children is Hispanic; it is no wonder that jobs and the economy remain the top concern among the nation’s twelve million Latino voters,” said Janet Murguía, President and CEO of NCLR (National Council of La Raza). “Latinos are doing their part to bring the economy back from the brink by working hard, starting businesses, and paying taxes. Respect for our communities on the street and in the voting booth honors these contributions and helps to build an economy based on broadly shared prosperity.”

SEIU’s International Secretary-Treasurer Eliseo Medina added, “Despite its gradual recovery, our economy remains broken due to historic income inequality. While the immediate task is to reduce unemployment, we need to do more. We need to reconstruct our economy to empower workers by protecting their right to bargain collectively, regulate the financial industry, rebuild our infrastructure, ensure that the wealthy pay their fair share and reinvigorate the public sector so that the American economy works for everyone, not just the top 1%. This important paper by Professor Hacker points the way. SEIU is proud to stand with our coalition partners in support of this important contribution in the fight for a fair economy.”

Wade Henderson, President and CEO of The Leadership Conference on Civil and Human Rights added, “One’s civil rights cannot be divorced from issues of economic justice.” Henderson continued, “That’s why The Leadership Conference and the civil rights community are deeply invested in working to make sure that every person in the U.S. has an opportunity to share in prosperity that enables them and their families to build better lives.”

The full report is available here.