Corzine speaks on 'social contract'

“There is a very serious level of discontent and disrepair of the social contract that needs to be analyzed,” he said. “There is no question that people have a fear that their children won’t live as well as our children have lived.”

Without delving into policy recommendations, Corzine called for lowering income and wealth inequality, developing an economic model that accounts for globalization, lowering government debt to avoid burdening future generations, improving the civility of discourse and overhauling financial regulation.

Corzine, who will be a visiting professor at the Wilson School next year, cited the “tilt away from the middle class” as a major problem, adding that it is “bad enough what has happened to the folks in the lower income [bracket].”

He explained that “as a matter of economics, it’s a mistake … whatever you want to call yourself, whether a Keynesian, a monetarist or a supply-sider … because consumption drives 70 percent of our GDP.”

Corzine added that despite the argument that increased consumption by the wealthy could make up for the decreasing purchasing power of the middle class, “there are only so many cars, computers and homes that can be bought by a narrow segment of the population.”

Beyond addressing wealth distribution, the United States should adapt its economic model to a globalized world by emphasizing innovation and education, he said.

The third challenge Corzine enumerated dealt with what he termed “generational justice,” which, he noted, was a problem at both state and federal levels. “It’s the same in every state, and we have been doing it for decades — we have freed our consumptions at the expense of future generations,” he said.

Beyond policy changes, Corzine called for a shift in the tone of politics.

“We live in a society that is supposed to be seeking a more perfect union,” he said. “If it turns into hatefulness — whether it’s in blogs or the streets — that’s just not going to get us anywhere.”

Corzine also cited the increase in filibusters as a symbol of the declining quality of dialogue, noting that there were 56 motions to end a filibuster between 1917 and 1970, yet an average of 69 per year since 2006.

On the issue of finance, the former CEO of Goldman Sachs called for a “global system of regulation” to improve stability.

Corzine also emphasized the importance of quickly addressing problems in the finance system. “Finance is like the circulatory system in our body, and a blockage brings on a heart attack,” he explained. “We need to have a system that people have confidence in.”

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Corzine expressed optimism about moving beyond the economic crisis and said he believed that it was possible to revitalize the social contract. “A period of crisis is also a period of great opportunity,” he said.

Dean of the Wilson School Christina Paxson called Corzine’s speech “a wonderful capstone to our annual colloquium,” noting that he tied together issues that had been discussed throughout the day. “I thought he did an excellent job pulling these themes together and discussing them in a thoughtful and intelligent way,” she said.

Five months after losing his bid for re-election to current governor Chris Christie, Corzine was named CEO of MF Global Holdings, a Wall Street options and futures firm, and appointed the John L. Weinberg-Goldman Sachs visiting professor by the Univerity for the 2010–11 academic year. The position is currently held by Joshua Bolten ’76, the former White House chief of staff under President George W. Bush.

Corzine said that he is looking forward to working with students.

“I do hope that the kinds of questions that we have covered here will fill the classroom,” he said, jokingly adding that his “slightly different” opinions from those of Bolten might “lead some Woodrow Wilson students to develop a mild case of schizophrenia.”