The invisible hand of capitalism is broken. Economic and political forces are preventing markets from correcting themselves, and we're now living in an unprecedented age of oversupply. Governments and central banks across the developedworld have tried every policy tool imaginable, yet our economies remain sluggish or worse. Howdid we get here, and how can advanced nationscompete and prosper once more?In this bold call to arms, economic policyexpert Daniel Alpert argues that a global labor glut, excess productive capacity, and a rising ocean ofcheap capital have kept the economies of the firstworld, and notably the United States, mired inunderemployment and anemic growth.Distracted by a technology boom and a massivedebt bubble in the 1990s and early 2000s, advancednations failed to assess the ultimate impact of thetorrent of labor and capital unleashed by formerlysocialist economies. After the financial crisisof 2008, the United States and Europe joined analready sclerotic Japan in dire economic straits.Today, as the BRICs (Brazil, Russia, India, andChina) and others poach jobs from Western Europe, the United States, and Japan, household incomes inthe developed world continue to decline. Many policymakers believe in outdated supplysideeconomic remedies. They miss the connectionbetween global oversupply and the lack of domesticinvestment and growth. But Alpert shows how theyare intertwined: We cannot understand the housingbubble and the financial crisis without appreciatinghow the rise of the emerging nations distorted theeconomies of rich countries. And we can t chart apath for growth in the developed world withoutrecognizing that many of these distorting forcesare still at work."The Age of Oversupply" offers a bold, freshapproach to fixing the West s economic woesthrough large-scale fiscal stimulus measures, investmentsin infrastructure, and an aggressive privatedebt reduction plan. It also delivers a vigorous challengeto proponents of austerity economics."
DANIEL ALPERT is founding managing partnerof investment bank Westwood Capital, LLC. He iswidely quoted in the business media and was featuredin the Academy Award-winning documentary"Inside Job." Alpert is also a fellow in economicsof the Century Foundation, the United States oldestpolicy think tank. He lives in New York."