American Gridlock Why the Right and Left Are Both Wrong - Commonsense 101 Solutions to the Economic Crises

by Brock, H. Woody

• ISBN13: 9780470638927
• ISBN10: 0470638923
• Edition: 1st
• Format: Hardcover
• Copyright: 2012-01-11
• Publisher: Wiley

Summary

A sensible solution to getting our economy back on track Pessimism is ubiquitous throughout the Western World as the pressing issues of massive debt, high unemployment, and anemic economic growth divide the populace into warring political camps. Right and Left wing ideologues talk past each other, with neither side admitting the other has any good ideas. In American Gridlock, leading economist H. Woody Brock bridges the Left/Right divide, illuminating a clear path out of our contemporary economic quagmire. Arguing from first principles and with rigorous logic, Brock demonstrates that the choice before us is not between free market capitalism and a government-driven economy. Rather, the solution to our problems will require enactment of constructive policies that allow "true" capitalism to flourish even as they incorporate social policies that minister to the neediest among us. Explains how the U.S. can revive economic growth, drive down unemployment, initiate an Infrastructure Marshall Plan, and shrink the government deficit-all at the same time Discusses how the U.S. can increase the quantity of health care services delivered to ever more citizens while simultaneously lowering the nation's total expenditure on healthcare as a percentage of GDP Explores how the U.S. can reform Social Security and Medicare to protect future generations Addresses why we must rethink our moribund political philosophies and understand that capitalism can be made consistent with a just society Real change, Brock argues, will require us to abandon the politics of polarization and strive for common sense solutions that cross the conservative/liberal divide. Brock utilizes new forms of deductive logic such as "game theory" to rethink old problems in a wholly new light. American Gridlock offers valuable insights into the nature of our challenges and how we can transcend our political divisions to create a more prosperous and just society.

Author Biography

H. Woody Brock is President and founder of Strategic Economic Decisions (SED), Inc., a firm that provides economic and financial market analysis to financial institutions, corporations, and investors. He has authored numerous Op-Ed pieces in the New York Times, the International Herald Tribune, and a variety of professional journals, and speaks regularly at investment conferences and forums. He is known worldwide as a speaker and writer adept at taking complex ideas and theories and expressing them logically and clearly. Brock was elected an Andrew Mellon Foundation Bicentennial Fellow of the Aspen Institute. He earned his BA, MBA, and MS (in mathematics) from Harvard University, and his MA and PhD from Princeton University.

Table of Contents

Preface xiii

Chapter 1 Dialogue of the Deaf 1

What to Do About It

What Went Wrong: Origins of the Dialogue of the Deaf

The Role of Deductive versus Inductive Logic in Policy Analysis

The Illogic of Policy Analysis Today

What Must Be Done to Raise the Level of Debate

Chapter 2 Must There Be a Lost Decade? 23

A Socratic Dialogue with the President Explains Why Not

Reasons for Lackluster Growth During the Remainder of this Decade

"Good" versus "Bad" Deficits, and the Main Policy Proposal

The Identifi cation and Ranking of Public Investment Projects by Their Return

When Huge Defi cits Are Justifi ed: A Unifi cation of the Arrow-Kurz and Keynesian Theories

Chapter 3 Resolving the Entitlements Spending Crisis 75

How to Drive Health-Care Spending Down while Increasing Access

A Supply-Side Solution to the Health-Care Crisis

Three Basic Assumptions for an Optimal Health-Care System

Expert Systems and Automation

Redressing the Social Security Deficit

Chapter 4 Preventing Perfect Financial Storms 119

When Everyone Was Too Clever by Half

The Four Origins of Today's Financial Crisis

The Role of Bad Economic Theory

Emergence of a Pathological Incentive Structure

Requisite Policy Reforms

Chapter 5 Bargaining Theory 101 157

How Not to Deal with China

The Origins of Economics Imperialism

The Possibility of the Hegemony of Political Science: The Nash-Harsanyi Pluralistic Bargaining Model

How Not to Negotiate with Thugocracies—The Case Study of China

The Remarkable Power of the Bargaining Model in Political Science and Beyond

Chapter 6 Beyond Democratic Capitalism 199

An Idealized Political Economy, with Distributive Justice

True Textbook Capitalism, and the Correct Role of Government

Beyond Effi ciency: The Eight Ideals of an Optimal Social System

Distributional Equity

A Comprehensive Theory of Distributive Justice

Conclusion 231

Appendix A Supply/Demand Summary of the Patient Protection and Affordable Care Act 235

Appendix B Dynamics of Total Health-Care Expenditure 241

Notes 249

Index 267