Tuesday, June 06, 2006

A Clintonite returns home 

Reader Peter Lorenzi (at Loyola University of Maryland) sent me an article reviewing Laura Tyson, former Clinton head of the Council of Economic Advisors who's finishing a stint as the dean of the London Business School. While the article calls her "renowned economist", I would say she was much less well-known at the time of her appointment even within the profession than others chosen to the post. Still, she's parlayed that position into a good career and done some good. Perhaps she's now leaving LBS to go to work on another presidential campaign, given this comment:
'In the long term, I think our economy is in a bad condition. For the past 30 years we've seen major productivity gains but the only people who have gained are the top 10 per cent. Those in the middle aren't going anywhere - they're mortgaged up to the wazoo and their savings are now next to nothing - while the gap between top and bottom is now wider than it has been at any time since the Twenties.'

Warming to what is effectively an attack on the Bush policy of tax breaks for the equity-owning rich, she continues: 'We're told we're a shareholding society. Do you know what the median shareholding is in the United States? Zero. The average amount of those who do own stock is about $25,000, but most people only hold around $6-7k worth.'

Tyson was enlisted as a consultant to the unsuccessful Kerry-Edwards Democrat presidential ticket in 2004, but is sceptical about what difference her contribution could have made: 'That election wasn't about the economy. It was about terrorism, security and values.'
I think that quote is slightly off. Direct shareholding, certainly, is down. Most of us hold shares through our retirement plans a little more indirectly. Several years ago James Glassman estimated it was about half, and a year later a Congressional Joint Economic Committee report said 48.8% -- I would think it more now. So the median number of "zero" says that we haven't gone over fifty percent. Perhaps Tyson's been in London too long.

But she's right that the last election was about "terrorism, security and values." So will be this one.