The State of the Economy
Bernstein, Jared. “The state of the economy in America.” Msnbc 18 January 2015: Web. 17 April 2015. From http://www.msnbc.com/msnbc/the-economic-recovery-real-now-what-are-we-going-do-it
The author’s central point in this article is that president Obama always claim that the US economy is constantly doing well despite some shortcomings. However, in 2015, the president is likely to change this narrative because of the inherent inequality in the US economy among different classes of people. According to the author, back in 2010, president Obama in his state of the union speech claimed that the American economy was getting better, but he was categorical that it was still bad. In 2011, the president claimed that the American economy was doing well for stock market and profit, but it was not good for average Americans. In 2012, the president also claimed that the US economy was getting strong, but it was not strong enough (Bernstein Para 5). In this article, the author predicts what president Obama is likely to say about the US economy in 2015. The author claims that this year the president is likely to address long-term structural issues in the economy rather than simply stating that the US economy is doing well. From a general viewpoint, this argument is positive because it contains facts rather than following a standard norm.
According to Jared Bernstein, the most relevant macroeconomic variables to pay attention to in evaluating the state of the US economy are the rate of unemployment, infrastructure, health, inequality, GDP growth, and the performance of the stock market. In evaluating the state of the US economy for the period that president Obama has been in the office, the author focuses much of his attention on the number of employment opportunities. He claims that immediately president Obama took office, over two million jobs were lost (Bernstein Para 3). According to the author, the government countered this problem by developing and implementing some macroeconomic policies. From an economic viewpoint and what we covered in class, unemployment is an important issue when considering the state of the economy because it indicates the aggregate output of an economy (Case, Fair and Oster 411). Consequently, if there are more unemployed people, the performance of the economy is likely to be poor. On the contrary, if the number of unemployed is low or there are no unemployed people in an economy, the state of an economy is likely to be good.
The author also focuses his attention on the GDP growth and claims that it has been doing well. This notwithstanding, the author claims that the government needs to do more because job growth and GDP growth alone cannot fix the problem the American economy faces right now. According to the author, the government needs to address the structural inequality between the rich people and the middle class. In this regard, the author has evaluated the cyclical movements of the US economy. The author has categorically identified the short-term and the long-term cyclical. According to the article’s author, Jared Bernstein, within the short-term, the president can confidently say that the economy is growing (Bernstein Para 11). From what we covered in class, economies do not always grow on even rates. Instead, they tend to experience some short-term ups and downs (Case, Fair and Oster 410). These changes are referred to as business cycles. From an economic viewpoint, when the aggregate output in an economy is low, the standard of living is likely to decline, and vice versa. This explanation explains how GDP that may be termed as aggregate output links to the state of economy.
By evaluating the cyclical and structural factors that affect the economy, the author evaluates how markets work competitively. The rich people benefits from economic growth, while the poor and the middle class are stuck and unaware of how they can benefit from economic growth. From this perspective, the author claims that from a cyclical perspective that focuses its attention on job growth and GDP growth, president Obama might say that that the US economy is doing well (Bernstein Para 12). However, looking at long-term structural factors, the author claims that president Obama is likely to say what his government is doing to reduce the gap between the rich and the poor such that all the American citizens can benefit from economic growth. In particular, the president is likely to talk about what he expects to do for the middle class to feel the effect of economic growth. Bernstein proposes that economic growth should strive towards full employment, investing in job creating infrastructure, and raising minimum wages. He also claims that it would involve creating free community colleges, health care reform, and enhancing financial market. The author has provided a convincing argument because he has addressed the most relevant macroeconomic variables in the US economy (Case, Fair and Oster 457)
Works Cited
Bernstein, Jared. “The state of the economy in America.” Msnbc 18 January 2015: Web. 17 April 2015. From http://www.msnbc.com/msnbc/the-economic-recovery-real-now-what-are-we-going-do-it
Case, Karl, Fair Ray, and Oster Sharon. Principles of economics. Boston: Prince Hall, 2012. Print.