Alan Blinder

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Blinder was an early advocate of a "Cash for Clunkers" program, in which the government buys some of the oldest, most-polluting vehicles and scraps them. In July 2008, he wrote an article in The New York Times advocating such a program, [20] which was implemented by the Obama administration during the summer of 2009. [21] Blinder asserted it could stimulate the economy, benefit the environment, and reduce income inequality. [20] The program was praised by President Obama for "exceeding expectations," [22] but criticized for economic and environmental reasons. [23] [24] [25] [26]

Private sector

Blinder was a co-founder and a vice-chair of the Promontory Interfinancial Network, LLC.[ citation needed ]

After his service as the vice chairman of the Federal Reserve, Blinder, along with several former regulators, founded a company that offers a number of services that provide a means for depositors (including governmental entities, nonprofits, businesses, as well as individuals such as retirees) to access millions in Federal Deposit Insurance Corporation (FDIC) coverage at a single institution instead of multiple ones.[ citation needed ] This provides banks that are members the ability to offer coverage above the FDIC per account/per bank limit by letting those banks place funds into CDs or deposit accounts issued by other network banks. This occurs in increments below the standard FDIC insurance maximum ($250,000) so that both principal and interest are eligible for FDIC insurance. [27] The company acts as a sort of clearinghouse, matching deposits from one institution with another. [27] Through its services it allows access to higher levels of FDIC insurance although limits apply. [28]

Views regarding 2008 near-meltdown of major financial institutions

Blinder draws 10 lessons for fellow economists in a 2014 article entitled "What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?” which include: [6] [29] [30] [ non-primary source needed ]

5) Fraud and near-fraud can rise to attain macroeconomic significance.

“ . . I think most of us thought that fraud and near-fraud were in the rounding error—not something that could have consequences on a macroeconomic scale. We were wrong. . ”

6) Excessive complexity is not just anti-competitive, it's dangerous.

“ . . When the crash comes, losses may therefore be much larger than investors dreamed imaginable. Markets may dry up as no one knows what these securities are really worth. Panic may set in. Thus complexity per se is a source of risk.”

7) Go-for-broke incentives will induce traders to go for broke.

“We had to learn this? Apparently so.
“In the years prior to the crisis, banks, investment banks, and hedge funds often compensated their traders in ways that offered fabulous riches for success but comparative slaps on the wrist for failure. . ”

Is economics "barking up the wrong tree" by focusing so heavily on consumption, and not on jobs?

In a 2019 article entitled "The Free-Trade Paradox: The Bad Politics of a Good Idea," Blinder states that the main focus of the economics profession has been on how to use price signals to produce goods and services as cheaply as possible and how to distribute these goods and services (also using price signals). Jobs are viewed as secondary at best, and in fact often as a distinct negative and as something people put up with only to get the money to afford their own consumption. [31]

Blinder writes, “What if people care as much (or more) about their role as producers -- about their jobs -- as they do about the goods and services they consume? That would mean economists have been barking up the wrong tree for more than two centuries.” [31]

Blinder still thinks there’s an excellent case to be made in favor of trade, but it’s not the case economists typically make. [31]

Selected works

See also

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References

  1. "Economist Rankings | IDEAS/RePEc". ideas.repec.org.
  2. 1 2 Princeton Economist to Be Named To Clinton's Council, Aides Say, New York Times (archives), Louis Uchitelle, Jan. 4, 1993.
  3. 1 2 3 4 5 6 7 8 "Alan S. Blinder, Princeton University". Princeton University.
  4. "Alan Blinder".
  5. 1 2 3 "What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?", Alan Blinder, Nov. 2014.
  6. National Bureau of Economic Research, US Business Cycle Expansions and Contractions. The recession was later determined to have begun in Dec. 2007 with the bottom occurring in June 2009. And from that point forward until Feb. 2020, the US economy was in expansion mode.
  7. Stephen Harlan Norwood, Eunice G. Pollack, ed. (2008). Encyclopedia of American Jewish History, Volume 1. p. 721. ISBN   9781851096381.
  8. Blinder, Alan Stuart. "The Theory of Corporate Choice". Princeton University. Department of Economics.
  9. Blinder, Alan S. (1971). Towards an Economic Theory of Income Distribution (Ph.D.). Massachusetts Institute of Technology.
  10. "Alan S. Blinder". National Bureau of Economic Research.
  11. "APS Member History". search.amphilsoc.org. Retrieved 2021-12-10.
  12. NBER, Curriculum Vitae: Alan Stuart Blinder, accessed 14 August 2001
  13. Alan Blinder, Textbooks
  14. Princeton University, 24 June 2009, Blinder named fellow of American Academy of Political and Social Science, accessed 14 August 2009
  15. Blinder, Alan S. (2008). "Free Trade". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN   978-0865976658. OCLC   237794267.
  16. Mark Weisbrot (10 January 2012). "The economic idiocy of economists". Comment is free. London: guardian.co.uk. Retrieved 31 March 2012.
  17. The New York Times , 18 March 1995, Opening the Fed's Doors From Inside; Alan Blinder Preaches Communication at Tight-Lipped Central Bank
  18. Grim, Ryan (Oct. 23, 2009) Priceless: How The Federal Reserve Bought The Economics Profession, Huffington Post
  19. 1 2 Blinder, Alan S. (27 July 2008). "A Modest Proposal: Eco-Friendly Stimulus". The New York Times.
  20. Why One Economist Pushed Cash For Clunkers, National Public Radio, August 11, 2009.
  21. More Cash for Clunkers?; Despite the frenzy, another $2 billion may not sell any additional cars., Wall Street Journal, August 3, 2009.
  22. Derek Thompson, The Senate Should Kill Cash for Clunkers, The Atlantic, August 2009.
  23. "Cash for Clunkers" Bad for Environment?, CBS News, August 7, 2009.
  24. Clearing the air; Environmental benefits limited from ‘Clunkers’ deal, The Houston Chronicle, September 5, 2009.
  25. ,"Stimulus For Clunkers" Wall Street Journal, August 6, 2014.
  26. 1 2 Svaldi, Aldo (18 August 2008). "CDARS, safety in numbers for big bank customers". Denver Post.
  27. Taleb, Nassim Nicholas, 1960- (2012). Antifragile : things that gain from disorder (1st ed.). New York: Random House. ISBN   978-1-4000-6782-4. OCLC   774490503.{{cite book}}: CS1 maint: multiple names: authors list (link)
  28. Blinder credits fellow economists Carmen Reinhart (1955– ) and Kenneth Rogoff (1953– ) with describing important features of a worse-than-normal recession. Blinder writes, “Reinhart-Rogoff recessions destroy parts of the financial system and leave much of the rest reeling--and needing to deleverage. All of that stunts and delays recovery. Reinhart-Rogoff recessions also leave large buildups of debt--financial sector debt, corporate debt, household debt, and public debt--in their wake.”
  29. Blinder states that it wasn’t until May 2014 that payroll employment climbed back to its Jan. 2008 peak.
  30. 1 2 3 "The Free-Trade Paradox: The Bad Politics of a Good Idea," Foreign Affairs, Alan S. Blinder, Jan-Feb. 2019.
  31. After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead, Alan Blinder, Penguin Press, 2013, review by GoodReads.
Alan Blinder
Alan S. Blinder, Vice Chairman Federal Reserve.jpg
15th Vice Chair of the Federal Reserve
In office
June 27, 1994 January 31, 1996
Government offices
Preceded by Member of the Federal Reserve Board of Governors
1994–1996
Succeeded by
Vice Chair of the Federal Reserve
1994–1996