The U.S. Needs More i-Side Economics
No jobs? No wonder, given what passes for economic thought these days.</br></br>In his acceptance speech at the Democratic convention in Charlotte, N.C., this month, President Obama said, "We believe that when a CEO pays his auto workers enough to buy the cars that they build, the whole company does better."</br></br>And last month in Leesburg, Va., the president said, "When we've got new teachers doing great work with our kids, then you know what, they go to a restaurant and spend that money. And so suddenly businesses are doing well, the economy is doing well, and we get into a virtuous cycle. And we go up."</br></br>This myth -- that you can just give money to the middle class and good things happen -- is widely shared and is at the basis of a lot of government policy. And it is why the recovery is stuck between lack and luster.</br></br>Let's go back. Henry Ford is popularly credited with inventing the middle class by doubling his workers' salaries to $5 per day in 1914. A multiplier for the economy, right? Wrong.