Alice Rivlin Lectures On “Saving Market Capitalism”

by Brendan Work

On Thursday night, Alice Rivlin, former Cabinet official and first Director of the Congressional Budget Office, presented the annual Bernie Saffran Lecture, this year entitled “Saving Market Capitalism.” Rivlin gave solutions to what she identified as the primary flaws of America’s capitalist system, its instability and its inequality, and argued that only by finding a true middle ground would Democrats be able to pass their necessary reforms.

Rivlin began the night by explaining that while the preceding year’s economic meltdown was a trial for market capitalism, it was hardly an indictment. In fact, Rivlin argued, “The severity of the crisis and its aftermath gives us a chance to re-examine market capitalism and make it more stable and fair.” Rivlin proposed increased financial regulation to prevent the next crises, including a cap on credit card interest rates, a plan to force securitizers to keep part of their risk, and a “new tool” for the Federal Reserve, which would allow the body to control leverage, and not just interest rates. “We must realign incentives so that markets work towards the collective good,” said Rivlin.

Rivlin focused most of the rest of her speech on the issue of fairness – of granting equal opportunities to the poor. “Poverty rates have risen with the recession and are unlikely to go down for a long time,” Rivlin said, adding that the way to increase opportunity was not to hamper society’s most successful and ambitious, but to “improve access to education and training for the poorest.” She supported President Obama’s plan to grant universal healthcare, both because of the inefficiencies it would eliminate and the uninsured it would cover. “The President made a great speech last night,” Rivlin said.

The overall tone of the talk was moderate and optimistic. Rivlin spoke frequently about the necessity of reaching across the aisle, of forming what she termed “coalitions of the sensible.” Rivlin argued that the moderate course has always been America’s course, that where the Great Depression caused the rise of Fascism in Germany and Communism in Russia, it only caused more financial regulation and the introduction of a social safety net in America. This moderate tone was repeated during the question and answer session that followed the lecture, when Rivlin reiterated that “the public option,” a controversial Democratic healthcare initiative favored by Congress’ more liberal members, was “not essential” to any health care plan.

The talk was held in honor of Bernie Saffran, a beloved Swarthmore Economics Professor who passed away in 2004. Students, faculty, and a few locals attended the talk, which was advertised on posters throughout the school, as well as on web pages online. Elan Silverblatt-Buser ’12 remarked, “She gave a very persuasive lecture. She proved that we can’t abandon the market economy like some have suggested.”