Debt is the four-letter word Medoff (Economics/Harvard) and consultant Harless employ as a starting point for their overwrought, well-nigh hysterical critique of the socioeconomic status quo in America. At pains to point out that borrowing can be constructive (e.g., when used to fight depression or recession and to win worthwhile conflicts like WW II), the authors assert that debt has been employed for antisocial purposes in recent decades. Corporate debt has led to downsizing programs that harm older workers, they charge, while mounting federal obligations have redistributed the country's wealth to the rich, impaired government's capacity to function, and provided convenient cover for budget cuts which will inflict further misery on the least fortunate. Medoff and Harless also reprove the general public for going into hock to maintain affluent lifestyles on the grounds that overconsumption dissipates resources required to invest in the future. The authors go on to lambaste the independent Federal Reserve Board for lender-friendly inflation-containment policies, which they contend have kept jobless rates at destructively high levels (a claim unsupported by available data). Medoff and Harless offer a series of proposals for breaking the vicious cycle of mounting debt. Fiscal policy tops their list, with suggestions ranging from ``heavy taxation of the rich'' through measures calculated to encourage thrift. On the monetary side, the authors want to make the FRB more accountable for the effect of its policies, but they're vague on the score of just how an essentially autonomous agency could be brought to book. Also advocated are a much higher minimum wage, greater protection for older workers, reform of the health-care system, and allied actions from the progressive agenda. Keynesian prescriptions for socioeconomic ills, real and imagined, which free markets have long since cured, curbed, or addressed.
Read full book review >