Good morning everyone. Welcome to the AFL-CIO.

I want to begin by thanking Pia Bungarten of the Friedrich Ebert Foundation and Gustav Horn of the Macroeconomic Policy Institute of the Hans Boeckler Foundation for partnering with the AFL-CIO in sponsoring today’s conference.  Today’s conference is the first of two international meetings sponsored by the AFL-CIO, the FES, and the Hans Boeckler Foundation.  The second meeting will be in Berlin on March 11.

The Trans-Atlantic agenda for shared prosperity is critically important subject, something that we should be talking about on both sides of the Atlantic. The economies that span that ocean are the world’s largest economic bloc, and Europe and the United States have a long history of productive economic engagement.

Today, an outstanding group of economists will drive a conversation on recovery and growth, and the path to full employment and shared prosperity.

Over lunch we will hear from two policymakers – Janet Yellen, who is the Vice Chair of the Federal Reserve, and Matthias Machnig, the Minister of Economy for the German Federal State of Thuringia. The AFL-CIO is deeply honored to have the privilege of hosting such a distinguished gathering of economic thinkers.  

Five years ago the U.S. economy descended into a financial crisis that went on to shake the foundations of the entire global economy. At its peak in 2008, it seemed the world might be on the verge of a catastrophic second Great Depression.

That didn’t happen. Instead, key policymakers around the world were motivated to act fast and apply vital lessons from the Great Depression, and in particular the insights and ideas of John Maynard Keynes. Our leaders found the courage to take 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.

And then something happened. After the first big jolt of action, policymakers changed course, first in Europe, then in the United States. 

Government after government, encouraged by the IMF and the OECD, 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.

And now, in economy after economy, including now here in the United States, these austerity policies have actually led to relapses into negative growth.

I’m glad to say that today the IMF and the OECD are rethinking these wrong-headed ideas. In our meetings today, we will assess this recent history and looking at ways to grow our economies toward prosperity.

Here in the United States, our economy has stabilized. We have had almost four years of employment growth—sluggish growth, but still growth.  We recently surpassed the level of private sector employment prior to President Obama taking office.

Yet 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.

A similar struggle has occurred over monetary policy. Our opponents argued against the Federal Reserve lowering interest rates… and against the Federal Reserve engaging in quantitative easing. Now, those same voices say the Federal Reserve should prematurely end its policies aimed at stimulating economic activity.

These policy battles illustrate the critical significance of economics and of economic policy for shared prosperity and full employment.

But there is a far bigger lesson, which is that in economic policy, ideas matter.   We are engaged in a war of ideas as well as a battle of values and interests.

But the clash of ideas is much bigger than the debate about stimulus. It extends to the larger terrain of how we explain the crisis, and how we need to change our economy.

Some argue today that the 2008 crisis was nothing but a financial shock that caused an unusually deep recession. Those same people urged fast action on a massive scale four years ago to save our financial institutions. But when it comes to reversing the underlying economic causes of the economic crisis, that urge for action has evaporated.

A small dose of reform in the financial sector and a dash of stimulus isn’t enough. 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.

Wages for working people have been stagnant for more than 30 years. We papered over the gap between rising output and flat wages with credit cards and home equity loans. The evidence was clear long before 2008—in rising economic inequality and insecurity, global imbalances and wage stagnation for working people and repeated financially driven economic crises.

As these problems grew, Wall Street and corporate cash flooded this city, its politicians and think tanks, buying influence and authority that has convinced too many policymakers that “credit bubble” prosperity is real prosperity… and that falling wages and rising corporate profits are the inevitable reward of technological change and global competition rather than old-fashioned greed and a rigged economy.

The financial crisis has made it possible to tell the real story, and we intend to keep telling it, and advocating for fundamental fixes, and it is working. Scholars and, increasingly now, the public accepts the story of how flat wages and terrible economic inequality broke our economic foundations.

And that’s why today’s event is so important. We have 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.

That is the agenda today. The speakers today will explain:

• the role of macroeconomic policy in sustaining the recovery and investing in a future of shared prosperity;

• how to make finance serve the real economy instead of having the real economy serve finance;

• how to design labor markets that raise wages and restore the link between wages and productivity growth; and

• how to make government and the marketplace work together so people can have the security and wherewithal to invest in themselves, their families, and their communities.

And now, let me turn the floor over to this morning’s first panel. Thank you.