The financial industry and elites sucking up all of the capital and holding it, while heavily lobbying to maintain a low-tax environment and to prevent governments from spending on infrastructure and lifestyle improvements for the general population, although they generally are borrowing at near zero or negative interest rates. This results in insufficient demand and secular stagnation. No investment = no growth.
Luxury goods and services are doing well, though.
Also, the United States is not adding jobs at a healthy clip; the jobs are worse and the prime-age (25-54) employment rate has only retraced halfway since the stock crash nearly 10 years ago. The US intentionally pushes a strange number for joblessness that drops people from being counted, and can be adjusted through legislation lengthening and then reducing the period during which unemployment benefits can be collected. The rate jobs are being added would be fine for an economy not recovering from a crash. This is not that economy.
1) 15 years ago marks the crashing of the dotcom bubble, which was used to recover from the recession of the early 90s, which was caused by Reagan ruining the country. So, IMO the way to view it is that Reagan destroys the working class and causes it to live on credit and prayer while cutting infrastructure spending and lowering taxes on the rich. The best thing he does is spend an enormous amount on the military and other welfare for the rich, which creates some sort of replacement demand, although he finances it by driving the national debt into the stratosphere.
2) Clinton deregulates everything, ends welfare as we know it, and encourages a bubble in stocks. A bubble is not a boom - a bubble is a time when people take out loans with collateral that is on fire. During this, he raises taxes, which shifts the Reagan debt to personal debt. The stock bubble crashes as soon as he leaves, and what seemed to be a reasonable amount of debt for the working class to carry became a crushing amount of debt.
3) Then Bush encourages another bubble to save the economy, and it's in houses, an asset that is spread widely among the working class. They mortgage those houses to pay off their debt, and many get to buy some stuff. Bush immediately starts spending again like a maniac in the Reagan model, with an administration consisting largely of exactly the same people: wars on multiple fronts, welfare and tax cuts for the rich, and massive government contracts for insiders.
4) The bubble crashes as Bush leaves, and Obama comes in with a mandate for a massive national veer to the left, wastes most of it on an inadequate healthcare program of right-wing origin that is very nearly a no-op, and in almost every other way is continuity to the Bush administration. He freezes government spending in the lowest interest rate environment in history, and fills the demand hole by handing free money to wealthy people through the bailouts and QE, shifting all of that public debt partially to private working/middle class debt.
5) The rest of that free money has nowhere to go, due to the previously mentioned historically low interest rates, and in addition the tailing off of the marginal return on further investments in technology and industries based on the invention of the transistor, so it ends up in a combination of traditional large industry/natural resource extraction, banks (betting on a repeat of the experience of the bursting of the property bubble, where banks failing from intentionally taking on irrational risk was rewarded by direct, open payments of cash and grants of credit), and tech companies in-name-only, where service companies use the internet in place of phones (as in the original dotcom bubble where they were used in place of mail-order catalogs), or where the actual profits were made in services for B2B, such as advertising or computing infrastructure (the kind of stuff that large industries/finance/fake-tech-companies can park all of their cash in.)
tl;dr it's just kleptocracy.
Majorities of the youth and the marginalized now openly despise government, and have made this election cycle the scariest one we'll see until the midterms which will be the scariest one until the next presidential election. This "low-growth world" is the closest thing we're going to get to a bubble in this financial cycle, since the working/lower-middle classes are seeing absolutely no benefit from QE and the bank bailouts (unlike dotcom and the property bubble.) The only place to fall is open rebellion, tribal violence, and the aimless violence of suicide, mass shootings, and property crime.
I have friends who are economists, and I get in this argument with them all the time over beers.
There's economic optimization, and social optimization, and those are two different things that are often totally orthagonal.
Economic progress is often horrendously negative for people's lives and livelihoods. People don't just pick-up and move, or re-train in a completely different field with the fluidity that is often indicated, and disruption often destroys lives. This is why income inequality is getting really worrisome, and there's the huge debate over college education costs, and you see so many people now living in their cars because they're chronically under-employed. This is why Trump was pandering to Pennsylvania coal miners and the like. There are millions and millions of people kind of stuck and not sure how to move forward. Everybody in this country can't just be a fullstack web guy, and the alternatives are increasingly working for minimum wage at two jobs, each of which keeps you under 20 hours so they don't have to pay benefits.
That being said, you can't just put the brakes on progress so that people doing things that we don't need anymore are kept happy.
Ideally, we'd have mechanisms in place to help people transition, but we really don't. The best we have is things like the American Reinvestment and Recovery Act, various infrastructure programs (just big employment schemes), and affordable Community College vocational programs. The worst we have are predatory vocational programs that re-train people with useless skills, which are essentially scams to cash in on predatory student loans and GI Bill money.
This is the crux of the 2016 election, and although the virus has hijacked 2020 it probably would have been the crux of that one as well. You have Yang and Sanders proposing massive reforms, AOC with the Green New Deal, contrasted with Trump pushing a regressive approach, and everybody's polarized and yada yada.
Nobody has a good answer yet, or 300 million people wouldn't currently be arguing about it. Ideally we'd have a temporary system of 'engineered inefficiency' in the economy that would help people with legacy skills transition into new fields when employment dried up. But, nobody knows how to politically design, implement, or fund anything like that. So, what we have is this and it sucks.
I hope people smarter than me are working on this problem. I feel horrible about all the folks who have just gotten screwed, and have lost their homes, and are trapped in cycles of poverty. But, I mean, we are debating with strangers on the internet, so you know, no ill will towards anyone even if they disagree.
What I'm thinking is that monetary and fiscal policy will do whatever it takes to make the masses minimally happy.
Whatever the side effects (growing wealth gap, rich making out like bandits), they don't care. As long as the masses have their minimal existence, Netflix, cheap food, etc.
"and will help the US economy grow in more sustainable ways going forward"
how? capitalisms defining hallmark is a ten year cycle of boom/bust. the last solution in 2020 was a bailout and forgiveness for virtually all commercial covid debts. prior to that it was a massive bailout and payout checks to taxpayers along with a scorched earth foreclosure wave. at some point the argument comes across as an alcoholic that repeatedly crashes cars and promises to learn and grow from it.
real wages are stagnant, homes are still unaffordable, rent is skyrocketing, healthcare now routinely sells insulin for $200 and everything from energy to food is still rising. ive a tough time believing corporate fraud is a silver lining.
Wow, I think the more interesting part of this is his slamming of the current situation in America:
"The institutional structure of the United States is under stress. We might be in dangerous economic straits if the dollar were not the principal international reserve currency and the eurozone in deep fiscal trouble. We have a huge public debt, dangerously neglected infrastructure, a greatly overextended system of criminal punishment, a seeming inability to come to grips with grave environmental problems such as global warming, a very costly but inadequate educational system, unsound immigration policies, an embarrassing obesity epidemic, an excessively costly health care system, a possible rise in structural unemployment, fiscal crises in state and local governments, a screwed-up tax system, a dysfunctional patent system, and growing economic inequality that may soon create serious social tensions. Our capitalist system needs a lot of work to achieve proper capitalist goals."
I'm arguing that if those policies were as awful as economic conservatives continually say, the West Coast and Northeast wouldn't be the best economies in the world.
There's clearly something positive to be gotten from investments in infrastructure and education.
The US has the most productive workers in the world. You cannot feasibly make them more productive without harming our ability to be disruptive. The fact that they've been as productive as they've been for years, through massive economic changes and yet the gap between the top .01 percent of Americans and the entire rest of the country has still grown. Supply side economics are a laughable farce. Just because wealthy people have more money doesn't mean that they invest or spend it in any way that helps the economy, what is provable though is that it harms democracy by limiting the voices of the middle class, and has created a poor class that has become nearly impossible to get out of as economic ladder climbing is effectively nil.
The only way to save our democracy is by putting in policies that will harm the wealthy aristocracy of the US. The other alternative is war and death that impacts the wealthy, as history has shown time and again. Blood or money, it's their choice.
It’s pretty clear conservative policies are a train wreck and are slowly eating the country alive (tax cuts for businesses solely for shareholder gain, erosion of social services, infrastructure neglect, an illogical trade war with everyone, etc).
Forget social agenda, I’m just asking for some sane fiscal policy at this point. Stop wasting scarce resources. Stop corruption. Stop passing the buck to my kids to clean up. That’s my desire and my goal.
So yeah, give me 100 tech workers for 100 days and I’ll show you phenomenal return on investment through public policy surrogates who support policy that’ll improve quality of life drastically while saving the country tens of billions of dollars.
A trillion dollar tax cut that raises the annual deficit to over a trillion dollars a year can certainly ignite some economic activity. So can lighting a bonfire using the household furniture and next year's crop of seed corn.
This isn't organic economic growth, it is the lowest form of political populism that doesn't even pretend to be an actual economic policy intended to make the US economy strong.
We ostensibly have a "better" measure of productivity, called the GDP. Every time a carton of cigarettes gets sold, GDP goes up. every time a person is diagnosed with cancer, GDP goes up. for a capitalist, the GDP is generally a positive litmus.
the concern I think is most evident is that a nearly theatrical number of short-term and long-term issues are becoming insurmountable obstacles to progress at all. having coasted on Quantitative Easing and bond buys since 2008, the market has cheated recession at all turns and subsequently created a corporate credit bubble that has turned the prime interest rate into a third-rail for anyone seeking to raise it to counter now rampant US inflation. many point to 2020 as a recession period, however bond prices and home prices remained high, and it only lasted a month at most as the fed simply injected more cash into the system to "correct" the uncomfortable decline.
the minimum wage hasnt moved in a decade, and most service economy workers (those which make up the backbone of neoliberal capitalist society) faced with the near
Sisyphean task of caring for COVID patients at home, educating their kids remotely, and working multiple jobs that offer no healthcare or medical leave reached its absolute breaking point when the government and corporations deputized most of them as mask police to be spit on and assaulted. paying people more isnt working.
finally the fed and the gov arent helping. the looming threat of regular petulant government shutdowns coupled with states that refuse to in many cases even acknowledge their covid numbers, is butting against Federal reserve dogma that laughably insists somehow this is just "transient" inflation and its just going to go away, despite the first decline ever in cyber monday sales on record.
the silver lining analysts all rally around is a trillion dollar stimulus bill just that wasnt even submitted to the house until nine months into the year that will arrive just in time for a 2022 meldown over what are widely anticipated to be poor christmas sales amid a driver shortage, shipping gridlock, and chip shortage.
to see the BLS flog capital intensity platitudes and labor composition functions is just bad comedy. its the same sort of bureaucratic blinders we had right up to 2008.
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