The Raw Deal: How Myths and Misinformation about the Deficit, Inflation, and Wealth Impoverish America FROM THE PUBLISHER
Over the past twenty years, Americans have been fed a mash of confusing financial and economic information. Economist Ellen Frank's alternately enlightening and shocking volume shows us how what we've been taught to think about stocks, interest rates, personal opportunities, employment, government spending, and inflation distorts popular understanding of how the economy really operates. But public confusion serves a distinct political goal: to camouflage the transformation of economic policy from a tool for improving the living standards of all to a tool for securing privileges for the wealthy.
This combination of misleading rhetoric and misinformation implies, for instance, that it is possible for all of us to become wealthy by investing in the stock market; that 401(k) plans are better than pension plans because they give individuals responsibility and control over retirement savings, making us more responsible citizens; that low unemployment leads to inflation; and that rising inflation impedes progress and forces people into poverty.
But as Frank shows us, much of what we think we know is wrong. Most American households actually lost wealth during the great bull market of the 1990s -- virtually all capital gains flowed to the top 10 percent of households. Companies have sought to do away with pension plans because retirees benefit from them at a cost to shareholders. Deficit spending does not cause interest rates to go up: in the 1990s, when Congress and the Clinton administration cut the U.S. deficit dramatically, fully expecting interest rates to plunge, the Federal Reserve instead doubled the short-term interest rate.
Sifting through confusing rhetoric on everything from the stock market to the federal budget to the global financial system, Frank reveals how we came to be so misinformed and lays out in clear and engaging prose the basis of real wealth and economic well-being.
SYNOPSIS
The rhetoric of U.S. economic policy has, since the 1980s, become mostly mystification and obfuscation, obscuring the interests of the vast majority of the ordinary wage and salary earners, argues Frank (senior economic analyst, Poverty Institute, Rhode Island College). She attempts to dispel the myths about financial markets and policies in the U.S. by describing, in successive chapters, how the stock market is not a solution to the security needs of most Americans, the false restraints on government borrowing and debt, and the current single-mindedness of government's attempts to protect financial wealth. Annotation ©2004 Book News, Inc., Portland, OR
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