Lester Thurow

Recent Articles

The Crusade That's Killing Prosperity

The Federal Reserve's crusade against the ghost of inflation has driven unemployment much higher than the official numbers suggest. It's not technology that's keeping down wages -- it's the policy of America's politically insulated central bank.

T he great untold story of the American economy in the 1990s is the disguised high rate of unemployment and its direct impact on stagnating living standards. Properly calculated, our rate of joblessness is well into double digits. No wonder workers have no bargaining power to get their share of an increasingly productive economy. Among economists, a debate rages on why earnings inequalities began to rise rapidly and real median wages started to fall a quarter century ago. Some blame a technological shift that cut demand for uneducated labor while boosting the demand for those with greater education and skills. Others identify global "factor price equalization"--in an open global economy overseas workers with comparable skills but lower wages are forcing the wages of Americans down. What's left out of this lengthy, if inconclusive, debate is the role played by the slack economic environment in which these two forces have been operating. While each is real, their impacts would have been...