Crunch | Jared Bernstein

Summary of: Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)
By: Jared Bernstein

Introduction

Settle in as we decode the complex economic world discussed in Jared Bernstein’s Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries). This summary highlights the issues of economic inequality, power hierarchies, and the challenges faced by households as they struggle to meet rising costs of health care, education, and housing. Delve into the world of economists and policy makers, who must navigate their own interests and biases while allocating resources, and explore their use of metrics like GDP, unemployment, underemployment, and productivity to guide their decisions. Get ready to explore the impact of politics, globalization, and more on the U.S. economy.

The Challenge of Economic Inequality

The U.S. faces a major challenge in organizing the economy to provide the necessary goods and services to its citizens, while also ensuring fair distribution of resources. Market forces and political power shape resource allocation, but economic relationships often have unexpected outcomes and require trade-offs among scarce resources. Economic inequality is a fundamental problem that has been on the rise for decades, with inflation-adjusted incomes declining and costs for essential services outpacing average price growth. This has created financial stress for a majority of Americans, despite increased productivity and GDP. Unfortunately, politicians often offer ineffective solutions, such as pushing for more education, while ignoring the root causes of economic inequality. A comprehensive response to environmental challenges, globalization, and lack of healthcare coverage requires creating a fair and sustainable economic system.

The High Cost of Living

The decline of unionized factories, the rise of service jobs, and the soaring costs of tuition, healthcare, and housing have resulted in a decrease in salaries and an increase in poverty among working-class men in the US. While women’s workforce participation has increased, the middle class is unable to spend on nonessentials due to rapidly growing costs. Despite employers’ assistance with health care, their workers are still paying, as employers cannot offer wage increases. Washington policymakers need to reshape the healthcare pricing and delivery system into a single-payer or regulated system, like those of other nations, that can hold costs down and create a large risk pool. The wealthy continue to steer most of the economic growth their way, perpetuating the problem.

The Flaws in Economic Vocabulary

The common economic terms used to measure the growth and decline of the economy have limitations that obscure more than they explain. For example, GDP overlooks the environmental impact of expenses and counts the value of things that get destroyed. Unemployment and underemployment are not accurately represented and the benefits of productivity do not trickle down equally. Thus, familiar economic terms need to be reevaluated and updated to provide a more comprehensive understanding of our economy.

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