Alan Stuart Blinder (/ˈblaɪndər/, born October 14, 1945) is an American economics professor at Princeton University and is listed among the most influential economists in the world.[1] He is a leading macro-economist, politically liberal, and a champion of Keynesian economics and policies.[2]
Regarding the 2008 near-meltdown of major financial institutions, Blinder drew ten lessons for fellow economists, including “Excessive complexity is not just anti-competitive, it's dangerous” and “Illiquidity closely resembles insolvency.” [6][7]
Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton where he has been since 1971; from 1988 to 1990, he chaired the economics department.[4] Also in 1990, he founded Princeton's Griswold Center for Economic Policy Studies. And he has served as vice-chair of The Observatory Group.[citation needed]
In 2009 Blinder was inducted into the American Academy of Political and Social Science, "for his distinguished scholarship on fiscal policy, monetary policy and the distribution of income, and for consistently bringing that knowledge to bear on the public arena."[15] He is a strong proponent of free trade.[16][non-primary source needed] Blinder has been critical of the public discussion of the US national debt, describing it as generally ranging from "ludicrous to horrific".[17]
Political career
Blinder is listed among the most influential economists in the world according to IDEAS/RePEc.[1]
As Vice Chairman, Blinder cautioned against raising interest rates too quickly to slow inflation because of the lags in earlier rises feeding through into the economy. He also warned against ignoring the short term costs in terms of unemployment that inflation-fighting could cause.[18]
Many have argued that Blinder's stint at the Fed was cut short because of his tendency to challenge chairman Alan Greenspan. By challenging assumptions, Blinder supposedly disrupted "the whole pipeline of Greenspan-arriving-at-decisions."[19]
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]
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-collapse of major financial institutions
In a 2014 article entitled "What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?", Blinder draws 10 lessons for fellow economists, including:[6][non-primary source needed]
4)“Self-regulation is oxymoronic.”
5) “Fraud and near-fraud can rise to attain macroeconomic significance.”
6) “Excessive complexity is not just anti-competitive, it's dangerous.”
“ . . no one knows what these securities are really worth. .”
7) “Go-for-broke incentives will induce traders to go for broke.”
“We had to learn this? Apparently so. .”
8) “Illiquidity closely resembles insolvency.”
Blinder states that it wasn’t until May 2014 that payroll employment in the United States climbed back to its Jan. 2008 peak.
Is economics “barking up the wrong tree” by focusing on consuming instead of 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 using price signals to produce goods and services as cheaply as possible. Jobs are viewed as secondary, and often as a negative that people put up with only to get the money to afford their own consumption.[29]
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.”[29]
Blinder still thinks there's an excellent case to be made for free trade, just not the case which economists typically make.[29]
Selected works
(2022), A Monetary and Fiscal History of the United States, 1961–2021, Princeton University Press.
(2014), "What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?" Princeton University Griswold Center for Economic Policy Studies Working Paper No. 243, 22-page paper, November 2014.[6]
(2013), After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead, New York: Penguin Press, 24 Jan. 2013. ISBN is 978-1594205309.[30]
(2009), "How Many U.S. Jobs Might Be Offshorable," World Economics, April–June 2009, 10(2): 41–78.
(2009), "Making Monetary Policy by Committee," International Finance, Summer 2009, 12(2): 171–194.
(2008), "Do Monetary Policy Committees Need Leaders? A Report on an Experiment," American Economic Review (Papers and Proceedings), May 2008, pp. 224–229.
(2006), "Offshoring: The Next Industrial Revolution?" Foreign Affairs", March/April 2006, pp. 113–128. (A longer version with footnotes and references is "Fear of Offshoring," CEPS Working Paper No. 119, December 2005).
(2006), "The Case Against the Case Against Discretionary Fiscal Policy," in R. Kopcke, G. Tootell, and R. Triest (eds.), The Macroeconomics of Fiscal Policy, MIT Press, 2006, forthcoming, pp. 25–61.
(2004), The Quiet Revolution, Yale University Press
(2001, with William Baumol and Edward N. Wolff), Downsizing in America: Reality, Causes, And Consequences, Russell Sage Foundation
(2001, with Janet Yellen), The Fabulous Decade: Macroeconomic Lessons from the 1990s, New York: The Century Foundation Press
(1998, with E. Canetti, D. Lebow, and J. Rudd), Asking About Prices: A New Approach to Understanding Price Stickiness, Russell Sage Foundation
(1998), Central Banking in Theory and Practice, MIT Press
(1991), Growing Together: An Alternative Economic Strategy for the 1990s, Whittle
(1990, ed.), Paying for Productivity, Brookings
(1989), Macroeconomics Under Debate, Harvester-Wheatsheaf
(1989), Inventory Theory and Consumer Behavior, Harvester-Wheatsheaf
(1987), Hard Heads, Soft Hearts: Tough‑Minded Economics for a Just Society, Addison-Wesley
(1983), Economic Opinion, Private Pensions and Public Pensions: Theory and Fact. The University of Michigan
(1979, with William Baumol), Economics: Principles and Policy – textbook
(1979), Economic Policy and the Great Stagflation. New York: Academic Press
(co-edited with Philip Friedman, 1977), Natural Resources, Uncertainty and General Equilibrium Systems: Essays in Memory of Rafael Lusky, New York: Academic Press
(1974), Toward an Economic Theory of Income Distribution, MIT Press
^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.
^Taleb, Nassim Nicholas, 1960- (2012). Antifragile : things that gain from disorder (1st ed.). New York: Random House. ISBN978-1-4000-6782-4. OCLC774490503.{{cite book}}: CS1 maint: multiple names: authors list (link) CS1 maint: numeric names: authors list (link)
^ abc“The Free-Trade Paradox: The Bad Politics of a Good Idea,” Foreign Affairs, Alan S. Blinder, Jan-Feb. 2019.