In his latest column at the Washington Post Robert Samuelson counsels against “economic nostalgia”:
The change is real. If you examine the basic indicator of the economy’s size — gross domestic product, or GDP — there clearly has been a break from the rapid growth of the early post-World War II decades. From 1950 to 1973, the economy grew at an average annual rate of 4 percent, reports the Congressional Budget Office. More recently, growth from 2008 to 2017 — the Great Recession and the recovery — averaged only 1.5 percent.
When Trump pledges to “make America great again,†he is widely thought to be referring to the 1950s and 1960s. There is an understandable urge to retrieve these decades, but the prospect that this is a cure is a mirage. Much of the postwar boom was driven by three economic advantages for the United States that were fated to fade.
But I had to snicker at this:
And third, economists seemed to have made progress in stabilizing the economy.
Seventy years after WWII, that again seems to be in question. Are economists “stabilizing the economy” or are they ensuring that recoveries are shallower while contractions are deeper? If that’s the case, maybe we could do with a little instability.
I will agree with Mr. Samuelson that if we continue to do what we’ve been doing we’ll continue to obtain the results we’ve been getting. Now if we could just figure out what we’ve been doing…
“…he is widely thought to be referring to the 1950s and 1960s…”
I didn’t know Mr Samuelson had such a wide head.
A certain M Friedman has documented the folly of the Fed as stabilizer. And I don’t think he even included Greenspan’s reign.
I’m guessing Samuelson argues (I don’t subscribe to his rag) that the U.S. was doomed to lose its economic vitality due to changing terms of trade.
But the U.S. typically enjoyed a trade surplus in the range of 1% following WWII. That was never enough to begin sustaining the post-war boom and I’m tired of lazy people making an easily falsifiable argument.
The only trade that has ever been critically important to the U. S. is internal domestic trade. This might be handy:
We have never been Germany, Japan, or China. My bitch is that I believe we either need a much more diverse economy or a better population. I don’t think we can flourish based upon the top third of the people.