Ellen Frank has long been a critic of government policies that favor wealthy Americans over the middle class. Her assessment: The current economic agenda contributes to consumers remaining stuck in an unending cycle of borrowing and spending.
At a glance
Ellen Frank, Ph.D.
Bachelor's degree and Ph.D. in economics from the University of Massachusetts, Amherst.
- Author of "The Raw Deal: How Myths and Misinformation about Deficit, Inflation, and Wealth Impoverish America."
- Senior economic analyst at the Poverty Institute in Providence, R.I.
- Visiting professor of economics at the University of Massachusetts Boston.
- Taught economics at several colleges, including Emmanuel, Wellesley and Mount Holyoke.
- Contributing editor to Dollars and Sense: The Magazine of Economic Justice.
- Staff economist for the Center for Popular Economics in Amherst, Mass.
- Served on the Council on Monetary and Financial Policy at the Economic Policy Institute in Washington, D.C.
She argues that the financial industry has long had the ear of the federal government when it comes to formulating U.S. economic policy. And debates about that policy have been so confusing that most people don't understand it.
In her book, "The Raw Deal," Frank points out several paradoxical messages that plague the American psyche. Among them: Consumers are prodded to spend more to fuel the economy, but at the same time, admonished for not saving enough. Also, cutbacks in consumer borrowing will hurl the economy into recession, yet Americans need more punitive bankruptcy laws to rein in irresponsible borrowing.
Consequently, working-class Americans largely have been marginalized in the debate over U.S. economic policy. Further, wage and income growth for the typical American household has become stagnant or has fallen despite overall economic growth.
Frank proposes increases in federal spending on Social Security, health care and education programs. Her rationale: If consumers had to worry less about retirement, high medical expenses and skyrocketing college tuition, they would have more money to pump into the economy and personal savings accounts.
Bankrate caught up with Frank at her home in the Boston suburb of Brookline, Mass., to talk about some of the larger forces affecting the U.S. economy, myths about Social Security and financial issues facing American consumers.
You've argued that the financial industry has had an influence in setting U.S. economic policy and in limiting public discourse about it. Could you provide some examples of this, and how does this affect the average consumer?
The financial industry has influenced macroeconomic policies that are to the advantage and benefit of people whose interest is in preserving financial wealth. The Fed's primary policy is an anti-inflation policy.