Lynn Parramore


Recent Posts by Lynn Parramore

  • Bradley Manning and the Case Against Solitary Confinement

    Dec 23, 2010Lynn Parramore

    lynn-parramore-web-headshot-1The degree of civilization in a society can be judged by entering its prisons.
    ~Fyodor Dostoevsky

    lynn-parramore-web-headshot-1The degree of civilization in a society can be judged by entering its prisons.
    ~Fyodor Dostoevsky

    In the earliest days of our Republic, a group of well-meaning Philadelphia Quakers set out to reform the prison system. The idea was to remove convicts from the mayhem and corruption of overcrowded jails to solitary cells where sinners would return to mental and spiritual health through reflection. In the Walnut Street Jail, no windows would distract the prisoners with street life; no conversation would disturb their penitence. Alone with God, they would be rehabilitated.

    There was a small problem. Many of the prisoners went insane. The Walnut Street Jail was shut down in 1835.

    But the word penitentiary became part of the language, and the idea of placing prisoners in solitary confinement did not die. It seemed so reasonable - so much better than chain gangs or public stocks. New prisons opened to test the theory that solitude might bring salvation to criminals.

    Charles Dickens had a keen interest in prison conditions, having witnessed his father's detention in a Victorian debtor's prison. When he heard about the latest American innovation in housing convicts, he came to see for himself. At Philadelphia's Eastern State Penitentiary, the wretches he found in solitary confinement were barely human spectres who picked their flesh raw and stared blankly at walls. His on-the-spot conclusion: Solitary confinement is torture. Dickens wrote:

    I believe that very few men are capable of estimating the immense amount of torture and agony which this dreadful punishment, prolonged for years, inflicts upon the sufferers...I hold this slow and daily tampering with the mysteries of the brain, to be immeasurably worse than any torture of the body: and because its ghastly signs and tokens are not so palpable to the eye and sense of touch as scars upon the flesh; because its wounds are not upon the surface, and it extorts few cries that human ears can hear; therefore I the more denounce it, as a secret punishment which slumbering humanity is not roused up to stay.

    A man who had seen his share of inhumanities, Dickens pronounced solitary confinement to be "rigid, strict, and hopeless...cruel and wrong."

    That was 1842. Since then, piles of scientific studies, along with the vivid accounts of victims, have confirmed what was obvious to Dickens. Solitary confinement is worse than smashed bones and torn flesh. When human beings are deprived of social contact for even a few weeks, concentration breaks down, memory fades and disorientation sets in. Eventually, many prisoners experience explosive rages, hallucinations, catatonia, and self-mutilation. Some become irretrievably insane. Far from promoting safety, the most commonly cited justification, solitary confinement often amplifies violent impulses, turning prisoners into ticking time bombs who are far more dangerous to human society upon release than they ever were to begin with (see National Geographic's documentary on the subject, available on Netflix).

    Human beings need social contact for normal brain function. Solitary confinement is thus a method of inflicting traumatic injury upon the human mind. "It's an awful thing, solitary," wrote former Vietnam prisoner John McCain in Faith of My Fathers. "It crushes your spirit and weakens your resistance more effectively than any other form of mistreatment." Among its legion perversities, solitary confinement turns medical doctors into torturers; renders violent criminals more aggressive, and makes prisoners cut off from human society incapable of functioning in it.

    In 1890, the United States Supreme Court nearly declared the punishment unconstitutional. It is banned by the Geneva Convention, condemned by the United Nations,  and either prohibited or restricted in most civilized countries. And yet today, as Atul Gawande showed in his revealing 2009 New Yorker article, tens of thousands of Americans are tortured in this fashion every day, out of sight, in the "Supermax" prisons that have popped up like poisoned mushrooms on the American landscape since the 1980s. Some prisoners are consigned to these Houses of Unholiness for violations - both major and minor -- of prison rules. Some for gang activity. Others for trying to escape. Or for violent behavior. Some are placed there because they are mentally ill and there is nowhere else to put them - the equivalent of casting a sufferer of pneumonia onto an Arctic tundra.

    Save for the death penalty, solitary confinement is the most extreme sanction allowed by law. Like slavery and every other form of institutionalized inhumanity, it should be banished to the dark annals of American history as an example of what happens when our humanity slumbers.

    Instead, it is being used as a method of terror and coercion by the United States government upon a citizen who has not even been convicted of a crime.

    As Salon's Glenn Greenwald and several other courageous journalists have documented, Bradley Manning, the 22-year-old U.S. Army Private accused of leaking classified documents to WikiLeaks, has been detained in solitary confinement for the last seven months, despite not having been convicted of any crime, having been a model detainee, and having evidenced no signs of violence or even disciplinary misdemeanors. Manning has been kept alone in a cell for 23 hours a day, barred from exercising in that cell, deprived of sleep, and denied even a pillow or sheets for his bed. As Greenwald reports, "the brig's medical personnel now administer regular doses of anti-depressants to Manning to prevent his brain from snapping from the effects of this isolation." A court hearing has not been set.

    The message of the U.S. government to its citizens in this activity is clear: blow the whistle and your brain will be mutilated before you even have a trial.

    But it may be that much to the shame of the U.S. government, our slumbering humanity is awakening. The solitary confinement - the torture, for we must call it that - of Bradley Manning is ironically shining a light on this brutality and tipping us off to the danger of authoritarianism. A United Nations probe is now investigating the Bradley case, and the drumbeat of outrage in the blogosphere grows louder every day. Protesters are organizing. Whatever one thinks of Manning and his involvement in the WikiLeaks release of classified information, there can never be any justification for torture. As Greenwald argues, such practices weaken the position of the United States government, both abroad and at home. Other countries will think twice before accepting extradition requests to a place where inhumane treatment of prisoners is sanctioned. Our moral standing in the world suffers, while the American citizenry, already suspicious of post-9/11 governmental abuses of power, grows even more alarmed. What kind of legitimacy adheres to a judicial hearing when the accused has been subject to sanity-threatening conditions? Even exposing the accused to duress is a violation of justice and of the U.S. Constitution -- which applies to both civilians and soldiers. Trust and faith in American justice will deteriorate as long as such damaging practices continue.

    As we spend time and rejoice with our friends and family in the new year -- enjoying the social interaction that human beings require - let us pause for a moment to remember the thousands of people being tortured in American prisons, including Bradley Manning, and let us send our own message back to our government: We are Americans. We will not accept the intimidation and coercion of our fellow citizens, even from the Pentagon. Most assuredly, we will not accept torture in our name. Not of the accused. Not of the mentally ill. Not even of convicted criminals. When our civilized society is attacked, no matter what the justification, we will rise up to defend it.

    The placement of human beings in solitary confinement is not a measure of their depravity. It is a measure of our own.

    Lynn Parramore is Editor of New Deal 2.0, Media Fellow at the Roosevelt Institute, and Co-founder of Recessionwire.

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  • Money and the Midterms: Are the Parties Over? Interview with Thomas Ferguson

    Nov 12, 2010Lynn Parramore

    lynn-parramore-web-headshot-1It was clear that cash was king in the midterm elections, so I spoke with Roosevelt Institute Senior Fellow Thomas Ferguson, the leading authority on money in politics.

    lynn-parramore-web-headshot-1It was clear that cash was king in the midterm elections, so I spoke with Roosevelt Institute Senior Fellow Thomas Ferguson, the leading authority on money in politics. Our conversation covered what November 2nd said about Democrats, the problems with campaign finance, and where Wall Street's loyalties really lie.

    Lynn Parramore: What do you make of the 2010 Election?

    Thomas Ferguson: The 2010 election was not like others. It was certainly not simply 2006 in reverse, this time with the Republicans winning by a landslide. There is an obvious cumulative process at work here, with first one party and then the other receiving lopsided votes of no confidence from voters. The U.S. economy is barely moving; millions of Americans are looking for work and struggling to find ways to salvage their life savings and pensions; the international position of the U.S. is sliding; and the government is largely paralyzed on issues that voters care about most. We have clearly been in a political crisis for some years; the meaning of the 2010 election is that this crisis is becoming much deeper, moving into an entirely different stage. The parallels to the Great Depression are eerie: At that time, in many countries, voters seem to have followed an "in-out," "out-in" rule. But that process does not go on forever. As the Depression deepened with no solutions, all kinds of strange creatures started creeping out of the shadows. The U.S. seems to be entering that stage.

    Lynn Parramore: You're implying the political system failed in some serious way. How so?

    Thomas Ferguson: 2008 had all the earmarks of a classic realigning election, as my old colleague Walter Dean Burnham describes them. In the wake of the financial collapse, it looked for all the world like voters were ready for, even demanding, major reforms. They had elected a Democratic President on a promise of "Change," with both houses of Congress solidly Democratic. That's why many people were thinking that Obama was going give us a modern New Deal. They really believed him when he promised change. Instead, Obama's failure on the economy has discredited the whole idea of the activist state. The dimensions of this failure were spectacular: he didn't move aggressively to combat unemployment, the economic stimulus was half as large as it needed to be, and he didn't deal with the mortgage crisis. So unemployment stayed way up, and many people remain in danger of losing their homes or are underwater on their mortgages, with the whole housing sector stalling out. To make matters worse, the administration lavished aid on the financial sector. The spectacle of the government aiding bankers, who turned around and paid themselves record bonuses, has just been unbearable for millions of people.

    What the election really shows is not that the parties can't agree -- Democrats and most of the GOP leadership finally agreed on the bank bailouts, for example -- but that the American people will not accept the policies that leaders in both parties prefer. In 2006 and 2008, the population voted no-confidence in the Republicans on the war and the economy. They have just now presented the Democrats with another resounding a no-confidence vote. What makes the current situation intractable is the fundamental reason for these serial failures. It's obvious: big money dominates both major parties. The Obama campaign's dependence on money and personnel from the financial sector was clear to anyone who looked, even before he won the nomination, promoted Geithner, brought Summers back, and reappointed Bernanke. For years I've promised people that I'll tell you who bought your candidate before you vote for him or her, by simply applying my "investment theory of political parties." When I analyzed the early money in Obama's campaign in March, 2008, it was impossible not to see that many of the people responsible for the financial crisis were major Obama supporters. As I wrote for TPM, serious financial reform would not be on President Obama's agenda.

    Lynn Parramore: Lots of people point out that the banks have paid back the bailout funds and that the government actually made money on the deal. Can Obama at least claim that this policy was good for the American people?

    Thomas Ferguson: The bailout was originally not Obama's but George Bush's, though Obama supported it during the campaign. The "banks-paid-us-back" story is mostly Treasury propaganda. The claim is really based on a narrow accounting of TARP funds. In fact, a lot of that aid has not been paid back. AIG, for example, is still heavily owned by the government. Secondly, the aid was way, way underpriced -- meaning that the federal government got very little for its money. If you want to see what market-driven terms you could get for aiding banks at the height of the crisis, just look at what Warren Buffett received for buying into Goldman Sachs. Most importantly of all, the banks actually got far more help than the direct TARP monies. They received sweeping FDIC guarantees on their debt and truly gigantic amounts of aid from Freddie Mac, Fannie Mae, and the Federal Reserve. All three of these entities have supported the market for mortgage-backed securities that the banks own. They bought huge amounts of them, taking the risks right out of banks, putting it on taxpayers, and in the process handing handsome profits to banks. Regulators allowed the banks to rip off their depositors and credit and debit card holders, while the Fed handed out virtually free money to banks. To add insult to injury, the regulators have allowed the bankers to use the profits from all these government subsidies to award themselves huge, indeed, record-setting bonuses. Those funds should have been used to strengthen the balance sheets of the banks. And if all this weren't enough, regulators also permitted the banks to hide the true value of their bad loans and they let it be known that the largest ones were Too Big To Fail, which allows them to borrow funds more cheaply than smaller banks. The net result of these big bank-friendly "forbearance" policies is that we have all paid to make these banks fabulously profitable, yet they still remain very weak institutions and are not lending. The resemblance to Japan's "lost decade" is obvious.

    Lynn Parramore: Was there ever a chance that Obama could be a new FDR?

    Thomas Ferguson: People who were hailing Obama as a new FDR were viewing American politics through the wrong lens. They were treating public policy as the result of the will of voters. But in fact, American political parties are mostly bank accounts. What you are told is the voice of the people is usually the sound of money talking.

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    Much of my research has been devoted to showing how both parties are dominated by blocs of large investors. The policy choices political parties present to the public on Social Security, macroeconomic policy, campaign finance reform, and indeed nearly every other policy area save a handful of hot-button "social issues" are basically dominated by big money. The consequences are disastrous: Neither party can level with the American people in crises. They cannot diagnose problems like the financial crisis with any honesty and they can't make any detailed case for why the policies they do sponsor would actually benefit ordinary Americans. What we get instead are pseudo-explanations, myths, and sometimes, obvious mendacity. Political discussions in the media, where they are not distorted by the plain interests of the concerns themselves, are dominated by denizens of the "think tank" and "policy institute" world. Most of these institutions are heavily driven by, surprise, surprise, big money in the form of donors. As Robert Johnson and I documented in our paper for last year's INET Conference, growing inequality in the United States complicates this dismal picture by converting regulatory agencies into recruiting grounds for would be millionaires via the revolving door, while at the same time permitting the financial sector to substitute virtually untraceable stock tips for direct contributions.

    Lynn Parramore: Where do you see politicians making up policy myths right now?

    Thomas Ferguson: On the Republican side, you again have people claiming that the problems of the Great Recession can be solved by reapplying the policies of Herbert Hoover. Surely this is amazing; they are plumping for going straight back to the deregulated market economy that brought you the 2008 disaster. It's simply crazy, for example, to even consider leaving financial houses free to decide on their own level of leverage, to sell derivatives on exchanges that are not fully transparent, or to sell junk securities to their own customers without telling them. But the Republicans are threatening to roll back even the anemic Dodd-Frank financial "reform" legislation, though, to be fair, they will have plenty of Democratic support for some of this.

    And it's obvious that neither party wants to address the problem of campaign finance reform. Instead, the Democrats spent part of the campaign talking up dangers from "foreign" money. It's not as though the problems of the system of American political financing come from foreign money. The problem is mostly domestic money. And the Supreme Court has made everything worse with its Citizens United decision. But, note well, the tragedy of big money in the Democratic Party was clear long before that Supreme Court ruling or even before Obama started running for president. Just look at the earlier cases I analyzed in my Golden Rule.

    Fundamentally, the problem of money and politics is very simple: campaigning is costly, much more costly than classical democratic theory has acknowledged. Some way has to be found to pay for it. We may take it as an axiom that those who pay for the campaign will control it. So the choices boil down to just two: either we all pay a little, through public financing of campaigns, or a relative handful of the super-rich end up controlling the system because they pay for the campaign.

    Lynn Parramore: Does the financial sector give more to Democrats or Republicans?

    Thomas Ferguson: We've all seen the staggering statistics on lobbying and political contributions by the financial sector over the last couple of years. More recently, we've also heard about how finance is supposed to have turned against the Democrats. There's something to this: bank contributions to the Republicans increased when discussions of a Consumer Financial Protection Bureau started as the House began considering Dodd-Frank. Contributions to the GOP swelled when the White House panicked after Scott Brown won the special election to fill Ted Kennedy's seat in Massachusetts and endorsed the so-called "Volcker Rule", just as public indignation about bank bonuses was at its height. But the size of the shift toward Republicans has been exaggerated. If you look at total political contributions from securities and investment firms over the entire 2009-2010 election cycle, you will see that more money still flowed to the Democrats. Commercial banks, a narrower sub-group of the financial sector, gave more to Republicans, but only by about 60-40.

    Lynn Parramore: So where does all this leave the American political system?

    Thomas Ferguson: I think the answer is pretty clear: The political system is disintegrating, probably heading toward a real breakdown of some sort. The striking thing is that if you look beneath the surface of the victorious Republican Party, it is about as contentiously divided as the Democrats. The Tea Party's distrust of the party establishment is apparent, but the divisions within the GOP predated the Tea Party's emergence. They were obvious in 2008. At that time, it was pretty clear that a majority of the party did not want McCain. But there was no consensus on an alternative. 2012 is looking like a repeat of 2008: All kinds of people are eyeing the race, including several would-be candidates who can probably raise large war chests. In the end, somebody is going to win -- my dark horse candidate is Haley Barbour, probably the Republican politician who is most closely connected to big business -- but the whole party is unlikely to unite around him or her. In all probability, the GOP primaries will turn into a demolition derby, tending to discredit everyone involved. I also doubt that the Republican governors who are now promising to cut state budgets will find the public nearly as receptive to deep cuts as they think it will be, as people watch essential social services disappear, prisons empty, and see educational institutions trashed out that are in many cases the only hope of lagging states. Nor do I believe there is any popular majority for cutting Social Security, which is clearly emerging as a major issue just as we speak. And parts of the health care legislation are really popular, so that just saying no is going to look pretty foolish after some months.

    The key to the future of American politics is the course of unemployment, though that is linked vitally to housing markets and how you deal with people's lost pensions and savings. If unemployment stays high, I would not be surprised to see some intra-party challenges to President Obama, even though right now everyone dismisses that possibility. The unions went down the line with Obama for the last two years and they have little to show for it; some of them are already scouting other possibilities. It is also interesting to speculate about Jerry Brown -- just watch his star rise if he succeeds in overcoming the California fiscal crisis. Were Brown to defeat Obama in a few primaries, then the temptation for Hillary Clinton to come in would be intense. And right now the United States is mired down in two shooting wars that are not going very well.

    Even more interesting are the possibilities of a third party candidacy -- the obvious entrant is Mayor Bloomberg. He's plainly considering it. I notice that he does not appear to have folded the network of organizations that quietly talked up his candidacy in 2008. That tells you plenty.

    Lynn Parramore: So is American politics fated to be all doom and gloom?

    Thomas Ferguson: If you want a happy ending, you probably shouldn't follow our system too closely in the next few years. Instead, go see a Disney movie, unless perhaps Tim Burton is making it. Bloomberg, Brown, or Hillary Clinton, though, are all known quantities. But the experience of the Great Depression was that as things failed to improve the swamp creatures got their chance. And when the economic situation shook out, the geopolitics became more sinister. It would be a rash person indeed who counted on a happy ending to this mess.

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  • Green Tide: The More Money You Make, the More Likely You Voted Republican

    Nov 4, 2010Lynn Parramore

    money-and-greed-150Memo to David Brooks, whose sentimental, fact-free musings on working class Americans and how they rejected the Democrats graced the Opinion page of the New York Times today:  Think that ordinary

    money-and-greed-150Memo to David Brooks, whose sentimental, fact-free musings on working class Americans and how they rejected the Democrats graced the Opinion page of the New York Times today:  Think that ordinary, hard-working folks have gone Republican? Think again.

    The Wall Street Journal has posted some very illuminating charts on 2010 voter preferences that help us blow through the blather and by-pass the baloney.

    Despite what you are hearing about Tea Party Populism and hopping mad Main Streeters, one thing is indisputable. The more money you make, the more likely you were to cast a ballot for Republicans in the 2010 elections. The GOP was swept into office by a green tide of affluence. The numbers do not lie, friends. And here they are.

    Voters who said their income is...

    Less than 30K per year voted 58% for Dems, 40% for Repubs

    30K - 49,999: 52% for Dems, 45% for Repubs

    50K-74,999: 46% for Dems, 52% for Repubs

    75K - 99,999: 43% for Dems, 56% for Repubs

    100K-199,999: 43% for Dems, 56 for Repubs

    Over $200,000: 36% for Dems, 62% for Repubs

    Notice that as soon as you past the average household income level in the United States, which is currently around 50K per year, you see voters trending Republican.

    What to make of this? Well, poor and working class people are not stupid. They know darn well that Republicans are out to put the squeeze on them. Make no mistake: they're plenty mad at Democrats for all the bank-centric bullshit and backroom deals. They are outraged that the same crooks that got bailed out are now kicking them out of their houses. But they aren't fooled by the phony populism that the Right is spewing. They know that between the two parties, the Democrats at least have a vestigial memory of standing against the brutal income inequality, exploitation, wage depression and ripping of social safety nets that the Right has come to think of as the norm.

    More affluent folks, on the other hand, are feeling greedier as their uncertainty about the future heightens. Apparently many of them aren't in the mood to share.

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    The Journal observes that the 2010 trend represents a distinct shift from 2006.

    "Democrats saw support in their long-term stronghold of low earners, while Republicans - many of whom have espoused tax overhauls that would limit income taxes - saw more support at higher income levels. A two-point edge in 2006 among voters with income between $50,000 and $75,000 a year turned into a deficit for Democrats, the preliminary data showed. And a five-point advantage among those with income of $75,000 to $100,000 has turned into a more substantial deficit for Democrats. These income groups made up a third of the 2010 electorate, early data showed."

    Somehow, we have got to convince more of the affluent voters that the ever-widening gap between the rich and poor is not in their interest, no matter how uncertain the future looks. It rips communities apart. It leads to every kind of social ill and unrest, from increased crime to depression to teen pregnancy. It's ruinous to democracy and it's even destructive to capitalism. Society will absorb only so much unfairness, only so much disparity between haves and have-nots.

    Ideas like cutting Social Security, extending tax breaks to millionaires and billionaires, cutting unemployment benefits so that Americans will take any job they can get, no matter how shitty, are the kinds of things these Republicans who have just been elected are going to be talking about.

    The trick is to get the Democrats to stop getting cowed and call them out. To get them to ask themselves tough questions about how they drifted from their roots, and how they can come back to being the party that they historically have been: the one that protects average, hard-working Joe and Jane.

    Lynn Parramore is Editor of New Deal 2.0 and Media Fellow at the Roosevelt Institute.

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  • She-Orientation: Female Entrepreneurs Will Shape Recovery

    Nov 1, 2010Lynn Parramore

    sexism-150After the crash, the downturn was dubbed a “mancession.” As the meme continues to circulate, we asked leading thinkers to help us sort fact from fiction. Are men suffering more than women in a weak economy? Is Washington doing enough to address female unemployment? How do we ensure a jobs agenda that’s fair and equitable?

    sexism-150After the crash, the downturn was dubbed a “mancession.” As the meme continues to circulate, we asked leading thinkers to help us sort fact from fiction. Are men suffering more than women in a weak economy? Is Washington doing enough to address female unemployment? How do we ensure a jobs agenda that’s fair and equitable? In the sixth part of our ongoing series, “The Myth of the Mancession? Women & the Jobs Crisis“, Lynn Parramore explains how women business-owners can help lead the world out of economic doldrums.

    Call it "She-orientation" -- a trend in which women are having an increasingly significant impact on the economic and cultural landscape. The "mancession" meme has outlived its usefulness, but it's high-time for a fresh way of looking at a seismic shift that will shape America's future. Women, it turns out, may be key to economic recovery.

    In the last 50 years, women's working lives have undergone an amazing metamorphosis. We're breadwinners. Over seven million families rely mainly or solely on our income to survive. And we're the backbone of the middle class. As President Obama recently acknowledged to a crowd in Seattle, women constitute "more than half of the money that's coming into middle-class families." He reminded folks that "when you talk about what's happened to the middle class, part of what you're talking about is what's happening to women in the workforce."

    The President also gave a shout-out to women entrepreneurs, a national asset that's commanding new attention as policy-makers and politicians search for ways to boost the economy. Over the last decade, the number of women-owned businesses grew twice and fast as those headed by men. Today there are over a million women-owned firms in the United States, which generate $1.9 trillion in sales. These companies provide jobs to 13 million people. The female entrepreneur, once a rara avis, is now a prized constituent of the economy whose way of doing business reaps enormous financial and social dividends.

    Since the Great Recession, a lot of ink has been spilled about how women are less likely to take risks than men. But I think women may simply view risk differently. For many of us, working for someone else can actually feel riskier that starting a business of our own. We never did have the Old Boys Network to support us, and many of us lacked the mentors and role models our male counterparts rely on to guide them through careers. We're kind of used to getting things done on our own. So entrepreneurship comes naturally to many women.

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    During the economic tsunami of 2008, I found this out for myself when I watched a freelance career I had spent years building crumble before my eyes. Suddenly, media outlets around the country closed or went on life-support. "Sorry, we've folded," came the call from long-time editors. I was shaken and afraid. But as a cultural critic, I also saw massive social and economic changes taking place and knew that I had to be part of the conversation. If no one would hire me to write, then I would make a place for myself on the Web. Without much more thought than that, I bought a URL from GoDaddy called "". Soon, joining forces with fellow out-of-work journalists Laura Rich and Sara Clemence, I created a place to capture stories and offer support to people like me who were getting pummeled by the economy.

    A loss of jobs and income became an opportunity - not only for the founders, but for the writers we hired, the interns we trained, the fellow-entrepreneurs with whom we barter and brainstormed, and the laid-off workers we inspired. I got to experience first-hand how entrepreneurial women support each other, both in their communities and online. We barter skills, pool resources, and offer each other comfort and advice. In a special section of Recessionwire called "Lemonade Makers", we talked to women who decided to start a business for the first time in the midst of a downturn -- women who showed what can be done with determination and resourcefulness. A graphic designer launched a handbag firm. A technology project manager became a career coach. A real estate developer started making cardboard forts for kids. I began to see how these female business owners combined reasonable risk-taking with real collaboration; how they infused profit-making with attention to social values.

    Two years after the Crash, women's economic stability is increasingly hard hit hard by foreclosure crisis, the shortfall in social services, and the recent round of state and municipal job cuts. As Eileen Boris pointed out earlier in this series, the burden of carework falls upon us disproportionately. Women trying their hand as entrepreneurs are creating critical jobs for Americans, and need start-up funds, access to affordable education and training, childcare, and a reliable network of social services. The growing pool of female entrepreneurs is a national treasure, and finding ways to capitalize on it will be a critical engine for growth. We are making steps in the right direction: Obama's Recovery Act has awarded 12,000 Small Business Administration loans to women-owned businesses. But there's more to be done.

    Female entrepreneurship can kick-start the middle class both in the U.S. and in the developed world. The success of women business-owners is key to both social stability and economic progress -- research shows that women tend to invest 90% of their incomes into their communities, as opposed to around 30% -- 40% invested by men. Countries that do not support women business owners will find themselves lagging behind on productivity, competition and community-building. Around the world, practices and programs that address women's business needs and help remove obstacles that stand in the way will reorient the economy in ways that benefit everyone.

    Lynn Parramore is the editor of New Deal 2.0, Media Fellow at the Roosevelt Institute fellow, Co-founder of Recessionwire and the author of Reading the Sphinx.

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  • Joseph Stiglitz: The New World Economy

    Oct 25, 2010Lynn Parramore

    joseph_stiglitz-150This is the sixth and final installment of  "The Influencers,” a six-part interview series that Lynn Parramore conducted in partnership with Salon.

    joseph_stiglitz-150This is the sixth and final installment of  "The Influencers,” a six-part interview series that Lynn Parramore conducted in partnership with Salon. She caught up with Joseph Stiglitz, Nobel laureate and the Roosevelt Institute's Chief Economist, to talk about the changing global economy. Stiglitz explains that while the US has traditionally been an economic superpower, it may have to forfeit that role.

    Lynn Parramore: People have said that before the crash, the U.S. provided the world's consumer of last resort. How much has the world changed in that respect?

    Joseph Stiglitz: Well, before the crisis, the United States was living beyond its means, and much of what it was spending beyond its means was consumption. It is still the case that the United States is living beyond its means, but the good news is that the households are now beginning to save. But on the other hand, the government deficits have actually increased. So the fact is, the U.S. is continuing to spend beyond its means. Now in the long run, this can't continue, and that is what is sometimes referred to as the problem of global imbalances. It changed a little bit since the crisis, but the fundamental problems that have given rise to it have not been corrected.

    China is running a massive export surplus, and this is beginning to emerge as a political issue. What's your take on this?

    Well, China's problems are distinctive, and in some ways just the opposite of ours. They have a savings rate of 50 percent. China's not the only country that's running large surpluses; Germany's running surpluses that are largely comparable as a percentage of GDP, and Saudi Arabia has surpluses that are also large. The focal point of the debate in the United States has been exchange rates -- concern that the exchange rate between the U.S. dollar and Chinese currency is distorted by government intervention on their part. Adjustments of exchange rate are not likely to fully resolve the problem of global imbalances. In fact, from 2005 to 2008, the time when the crisis occurred, China had basically increased the value of its currency by 20 percent, which is about two-thirds of what most people had thought was the exchange rate adjustment that was needed.

    Even if China continues to allow its exchange rate to appreciate, it is not going to solve the U.S. problems. The U.S. will be buying apparel and textiles from Sri Lanka, Bangladesh. It's not likely to start making them itself. And so it is a shifting of blame to say that is the U.S. problem. The problems in the U.S., I think, are more fundamental. It does hurt Sri Lanka and Bangladesh to have an exchange rate that might be distorted in that way, but it won't resolve the more fundamental problems of America's trade deficits.

    Policy-makers often talk about the U.S. as the world's indispensable nation. Is that consistent with how you view America's place in a post-crash world economy?

    Well, America is still the largest economy in the world, and in that sense it is going to continue to be a central player. Even the most optimistic forecast for China's growth suggests that it will be a quarter century before China is comparable in size, and even then, China's per capita income will be markedly lower than it is in the United States. And I think the United States is likely to continue to be the source of innovation, the source of higher education. So, the role of the U.S. is going to continue to be very, very strong. But there was a short period between the end of the Cold War and the crash of Lehman Brothers where the U.S. was the superpower not only militarily, but economically. It had a very strong role in dictating the terms of international agreements. That position is not likely to be restored.

    Let's talk about the U.S. stance toward the crisis in the European Union. The rescue is being done as a joint project between the European Union and the IMF. What's your take on the role of the IMF in a new world economy? There have been some proposals, for example, to restructure the IMF. What do you think about that?

    It's very clear that the IMF has taken a much more constructive role in this crisis than in earlier crises. Dominique Strauss-Kahn as the leader has really changed many of the policies and orientations, talked about the importance of unemployment, the necessity to have counter-cyclical fiscal policies, so in that way there has been a very big change in the role of the IMF. On the other hand, there is concern that if the IMF could change so quickly in one direction, it could change just as quickly back to where it was, and that raises very fundamental issues about governance, the need for changes in governance to make sure they are reflective not only of the advanced industrial countries and not only of the financial sectors in the advanced industrial countries, but of a broader representation of views.

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