Alan Stuart Blinder (, born October 14, 1945) is an American economics professor at Princeton University and is listed among the most influential economists in the world.
Blinder served on President Bill Clinton's Council of Economic Advisers from January 1993 to June 1994 and as the vice chairman of the Federal Reserve from June 1994 to January 1996. and on the "offshoring" of jobs. His writing has been published in The New York Times, The Washington Post, as well as a monthly column in The Wall Street Journal.
Regarding the 2008 financial crisis, Blinder drew ten lessons for fellow economists, including "Excessive complexity is not just anti-competitive, it's dangerous" and "Illiquidity closely resembles insolvency." in Brooklyn, New York. He graduated from Syosset High School in Syosset, New York. Blinder attended Princeton University as an undergraduate student and graduated summa cum laude with a B.A. in economics in 1967. He completed a 130-page long senior thesis, titled "The Theory of Corporate Choice". He received a M.Sc. in economics from the London School of Economics in 1968
Professional life
Academic career
Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton where he has been since 1971; from 1988 to 1990, he chaired the economics department. Also in 1990, he founded Princeton's Griswold Center for Economic Policy Studies. And he has served as vice-chair of The Observatory Group.
Since 1978, Blinder has been a Research Associate of the National Bureau of Economic Research. He is a past president of the Eastern Economic Association and Vice President of the American Economic Association and was named a Distinguished Fellow of the latter in 2011. and a member of the board of the Council on Foreign Relations (since 2008). Blinder's textbook Economics: Principles and Policy, co-written with William Baumol, was first published in 1979 and, in 2012, was printed in its twelfth edition.
In 2009, Blinder was inducted into the American Academy of Political and Social Science, "for his distinguished scholarship on fiscal policy, monetary policy and the distribution of income, and for consistently bringing that knowledge to bear on the public arena." He is a strong proponent of free trade. Blinder has been critical of the public discussion of the US national debt, describing it as generally ranging from "ludicrous to horrific".
Political career
Blinder is listed among the most influential economists in the world according to IDEAS/RePEc.
In 1975, Blinder served as the Deputy Assistant Director of the Congressional Budget Office.
In the 1990s, he served on President Bill Clinton's Council of Economic Advisers from January 1993 to June 1994,
Many have argued that Blinder's stint at the Fed was cut short because of his tendency to challenge chairman Alan Greenspan. By challenging assumptions, Blinder supposedly disrupted "the whole pipeline of Greenspan-arriving-at-decisions."
He was an adviser to Al Gore and John Kerry during their respective presidential campaigns in 2000 and 2004. The company acts as a sort of clearinghouse, matching deposits from one institution with another.
"Cash for Clunkers"
Blinder was an early advocate of a "Cash for Clunkers" program, in which the government buys some of the oldest, most-polluting vehicles and scraps them. In July 2008, he wrote an article in The New York Times advocating such a program, which was implemented by the Obama administration during the summer of 2009. Blinder asserted it could stimulate the economy, benefit the environment, and reduce income inequality. but criticized for economic and environmental reasons.
Great Recession of 2008 and 2009, and slow recovery
The Great Recession started in December 2007 and bottomed-out in June 2009, at which point the U.S. economy began a slow recovery. Blinder points out that payroll employment didn't regain its previous level until almost five additional years.
Blinder argues for 10 lessons for fellow economists,
Economic models with one interest rate — "the" interest rate — are no longer good enough. He writes, "After all, in the 2000s we saw several dramatic instances of risk spreads first narrowing dangerously, then skyrocketing once fear took over from greed, and then narrowing again as calm returned."
For a beginning class in economics, he recommends including QE, or Quantitative Easing, as practiced by the Fed. He also favors including that investment bubbles can and do occur, and that "leverage is a double-edged sword."
Regarding other concepts such as "Too Big To Fail," Blinder recommends including them in advanced courses but not in introductory classes. He thinks the early class(es) should include material which economists largely agree on, the "received wisdom" as it were, although he sees how other teachers might come to different conclusions.
Criticism of consumption-focused economics
In a 2019 article entitled "The Free-Trade Paradox: The Bad Politics of a Good Idea," Blinder states that the main focus of the economics profession has been using price signals to produce goods and services as cheaply as possible. Jobs are viewed as secondary, and often as a distinct negative which people put up with only to get the money for their own consumption.
But then he asks, "What if people care as much (or more) about their role as producers — about their jobs — as they do about the goods and services they consume? That would mean economists have been barking up the wrong tree for more than two centuries."