In 2008, with the global financial crisis at its peak and the world teetering on the brink of a second Great Depression, world leaders and policymakers took decisive fiscal and monetary policy actions that bolstered our economies and stopped our financial system from spiraling into chaos and dragging our economies into depression.
But today, AFL-CIO President Richard Trumka told the “Trans-Atlantic Agenda for Shared Prosperity” economic summit:
Our work is far from done, and no progress has been easy. We have had to battle those who wanted to block the fiscal stimulus, which was so critical for halting our economic slide. And we are still battling those same opponents who now want to impose strict fiscal austerity that threatens to sabotage our economy and trigger a new recession, as those same policies have in Europe.
The daylong Washington, D.C., summit, sponsored by the AFL-CIO, Friedrich Ebert Foundation (FES) and Macroeconomic Policy Institute (IMK) of the Hans Boeckler Foundation, is the first of a pair of conferences by the groups to examine and promote fiscal policies that will promote economic recovery and growth and a path to full employment and shared prosperity.
In his opening remarks, Trumka said that after the initial stabilization of the global economy:
Government after government, encouraged by the IMF [International Monetary Fund] and the OECD [Organization for Economic Co-operation and Development] neglected the lessons of the Great Depression and embraced the idea that austerity—cutting government spending and public employment—was the best medicine for economies suffering from slow growth, mass unemployment, and recession driven deficits.
In economy after economy, including the United States, these austerity measures “have actually led to relapses into negative growth.” He said that while the battle over specific measures to deal with the immediate economic picture—from interest rates, to federal monetary policy, to economic stimulus measures—continues:
We have to fundamentally change the rest of our economic model. Our economies are not fine. Not by a long shot. We cannot go back to the way it was before the financial crisis and the Great Recession. In the American labor movement, we understand that financial crisis was just the crowning event that brought the fundamental flaws of our economy into full focus.
He said that today’s summit and the upcoming March 11 summit in Berlin present an “opening to conduct a serious cross-border examination of the challenges of our economic revival.”
We have the opportunity to explain the policies that can restore full employment and shared prosperity. We can win the war of ideas, but only if we both explain what went wrong, and how to fix it. We cannot change the past financial crisis or erase the economic pain, but the future, a better future, can be in our hands.
Along with Trumka, today’s speakers will include Janet Yellen, vice chair, Board of Governors of the Federal Reserve; Matthias Machnig, minister of economy, German Federal State of Thuringia; IMK Director Gustav Horn; and Thomas Palley, senior AFL-CIO economic policy adviser.
Panel discussions throughout the day will include leading academics and economists from MIT, Yale, University of Texas, Economic Policy Institute, Center for Economic and Policy Research, Center on Budget and Policy Priorities, Brookings Institution and several European foundations and think tanks.