When I read this piece by Peter Turchin at Bloomberg on how over-educated “elites” are fostering economic and political unrest:
The roots of the current American predicament go back to the 1970s, when wages of workers stopped keeping pace with their productivity. The two curves diverged: Productivity continued to rise, as wages stagnated. The “great divergence†between the fortunes of the top 1 percent and the other 99 percent is much discussed, yet its implications for long-term political disorder are underappreciated. Battles such as the recent government shutdown are only one manifestation of what is likely to be a decade-long period.
I was struck, once again, by how incredibly prescient Joseph Schumpeter was in his analysis, which I quoted at length here. It is so obviously what we see around us I can barely fathom why there is any doubt.
Rather than dwell on the problem, why not consider solutions? Here’s Mr. Turchin’s:
In some cases, however, societies come through relatively unscathed, by adopting a series of judicious reforms, initiated by elites who understand that we are all in this boat together. This is precisely what happened in the U.S. in the early 20th century. Several legislative initiatives, which created the framework for cooperative relations among labor, employers and the government, were introduced during the Progressive Era and cemented in the New Deal.
By introducing the Great Compression, these policies benefited society as a whole. They enabled it to overcome the challenges of the Great Depression, World War II and the Cold War, and to achieve the postwar prosperity. Whether we can follow such a trajectory again is largely up to our political and economic leaders. It will depend on all of us, rich and poor alike, recognizing the real dangers and acting to address them.
Sadly, the policies we’ve embarked on do very nearly the opposite. The PPACA does not tax the top 1% of income earners. It taxes individuals and couples earning between $60,000 and $80,000 per year, redistributing it to people who earn just slightly less than that. Raising the personal income tax on the highest income earners might accomplish his desired goal but it might just tax people in the top quintile to 99% percentile of income earners and redistribute the additional revenues within that quintile and to the top 1% of income earners.
My preferred solution would
- Limit the incomes of those dependent for their incomes on the government to a level the society is capable of bearing. That doesn’t just mean federal employees but physicians and other healthcare providers, educators, police officers, firefighters, and so on.
- Stop encouraging, even subsidizing, people to borrow to buy educations that will prepare them for jobs that will never exist.
- Grow, mine, drill, and produce more stuff here, even if it means imposing import duties.
The only other alternative I can see is violence.
“The roots of the current American predicament go back to the 1970s”
If the “elite” is defined by its level of education, the genesis goes back further than 1970, I think, to the National Defense Education Act of 1958. The Act helped millions of Americans attend college.
” That doesn’t just mean federal employees but physicians and other healthcare providers”
Where “other health care providers” = hospitals. I believe hospitals are much more to blame for the cost spiral than doctors. When I had my ankle fused a few years ago, the surgeon charged $2300, the anesthesiologist, $1700. I went into the hospital at 9 AM, the surgery was at 11 AM and lasted till about 12:30 PM, and I was in the recovery room until 5PM that night when I was discharged and went home. While I was in the recovery room, I was attended by one nurse. The total bill came to $19,000. The four and half hours in recovery plus the two hours preop cost $15,000 dollars.
I don’t disagree that hospitals have become absurdly expensive, sam, but most of the expense is salaries. As the CEO of Mayo put it recently, “Too many people making too much money.”
Another question is where your baseline is. I draw my baseline for wages, not entirely arbitrarily, 40 years ago. If you draw your baseline in 1990, wages in the healthcare sector have grown at roughly the rate of inflation. Still too high since they’re growing faster than the rate of inflation excluding healthcare but not nearly as fast as is clear if you push your baseline back to the early 70s.
Boy. There is a lot going on in this essay. I’m ping ponging back and forth between here and conf calls so I just want to address the narrow healthcare part now.
“The PPACA does not tax the top 1% of income earners. It taxes individuals and couples earning between $60,000 and $80,000 per year, redistributing it to people who earn just slightly less than that.”
Although I understand and agree with the general thrust, that’s not really true. As the onion gets peeled, there are a number of “hidden” taxes, some applicable only to people like me. (I guess we forgot to turn on the tax scam machine.) Taxes on investment income and so on.
As I noted in recent comments we have been cancelled. Cadillac plan. So we have only a few weeks to make some decisions. An insurance consultant was in yesterday, and the summary spreadsheets arrived late last night. I get to my desk at about 5:30 am these days to get things sorted out and went through them. Wow.
1. Bottom line? My partner and I will be better off on HC per se . (I suppose we are 1% ers, even though in no way shape or form are we Warren Buffet etc) Dumbing down from Cadillac to “Obama approved” the premiums decline for us and employees.
2. However, as a great economist once observed “there is no free lunch.” In return for dumbing down the premium, deductibles go up. Now, as I have said for years, that’s not an inherently bad thing. Expose the consumer to price. But choice has gone to government from the citizen. Further, my partner and I won’t be materially harmed if our deductible exposure goes to $20K. Our employees with little ones will. Net, net, this is a raw deal for our people. I know Michael, who has been crowing about how his personal premiums have gone down “thousands” while giving us faux concerns about others, will want to help us subsidize our people, should we do that. (snicker) Classic liberal: I care as long as I care with other peoples money.
3. The wealth transfer is simply unconscionable. Impose the – pick one – 1) social security, 2) Medicare, 3) Medicaid, 4) ObamaCare financial burden on the young, and give it to the old………….after all, they reliably vote.
And look, I didn’t even address that the system is horribly effed up with not a chance of being fixed within a year.
And now, smiling on camera with hand chosen sycophants in background, President Obama, about to blame Fox News and Republicans while he explains as you are wheeled into the OR the “glitch” causing the doctor you lost to be replaced by a guy willing to accept half the reimbursement……….
The worst thing about the conditions that Turchin points out is that the political elite of both parties are working to make things worse. Probably the last gasp of someone making a credible push for a different direction was Perot’s run in 1992.
Incidentally, I saw an analysis a few months ago that indicated the missing voters that Romney didn’t get were most likely Perot voters in 1992. The main difference in the parties now seems to be that Democrats want more of the spoils to go to government workers (both those that work for the government directly and those that work for the government indirectly) than Big Business, and Republicans want the opposite. Both sides agree that Big Finance must get a healthy cut regardless.
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I first started hearing about Turchin a little while back, and just in the last week or so realized he has his own blog. He’s also got a fairly interesting biography, academically.
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Love the check box at the bottom.
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Romney was the ultimate small business guy: private equity.
Sure he was, Red, sure he was. I believe YOU believe what you’re saying, but I would give that statement no more than 47% truthiness.
Inequality, as measured by the Gini coefficient, has been diminishing over time if we include all forms of healthcare insurance (private and government). Study of years 1995-2008 Now, health insurance may not be a good or service that people enjoy or is entirely comparable with cash, particularly if manifests itself primarily as a paycheck deduction or a government program.
Traditionally, if productivity is increasing and wages are not, then capital is the beneficiary. That may have been the case in the Gilded Age; I don’t think that’s the case today.
At the end of the first paragraph: “People may feel increasingly insecure from non-cash compensation.”
@PD
This tells a somewhat different story than the one told in the paper you cite re decreasing Gini: Gini coefficient: US income Gini indices over time, showing a steadily increasing Gini index for the US.
Dueling economists. OK. But nobody I’ve read has ever said that the lion’s (hell, a whole pride of lions’) share of the gains made post-2008 have not accrued to the top tier incomes in the US, and the bulk of those gains to the top 1% (of storied fame). The velocity of that accrual is not diminishing. I think that’s the fulcrum of Dave’s argument. That’s situation breeding danger for us.
I too discovered Turchin recently (probably from the same reference as . . . ), and am not sure what I think about his writing. It reminds me too much of people who write about generational patterns; I can see the patterns they describe, but they are not the most straight-forward explanations of history.
I think the piece is weak in identifying what it means by “elites.” The recent law school graduate with more student loans than he/she can ever hope to repay is an “elite”? The Civil War was partly caused by elite demand for public office? (rolls eyes) The politics as the natural desire of elites through history seems far-fetched. A lot of elites despise politics. And for every John Kerry, with great personal wealth, there is a Joe Biden.
Is the ACA an elite product? Maybe you could argue that its an elite response to a popular demand, but I don’t think elites wanted anything in this shape or form.
@sam, the study I linked to finds that inequality has been increasing when measured by take-home pay, but that it is decreasing when we add the value of health care insurance to take-home pay. Wages vs. total compensation.
Turchin:
“The Roman Empire, Imperial China and medieval and early-modern England and France suffered such cycles, to cite a few examples.”
Let us hope that this epitaph for imperial Spain does not come to be our own:
J. H. Elliot, Imperial Spain: 1469-1716, p. 382.
Well, for me the true horror of Obamacare has finally come home: Blue Shield of California just informed me that . . . they’re going to fix their eternally backward billing procedure allowing such futuristic innovations as “paying online.”
It’s the future!
Gosh, I wonder why they would suddenly give a shit about customer service? Do you suppose it’s because they ran the same numbers I did and realize I can dump them and save money via Obamacare?
On the larger topic of indequality, yeah, it’s a very serious problem, one I’ve been pointing to (accompanied by derision from Lord Drew) for years. You cannot have this much inequality and democracy. Sooner or later the 99% vote themselves the assets of the 1%.
Wal-Mart is watching this begin to blow up in their faces. They’ve been hammered by bad publicity and any notion they had of attracting a clientele beyond their existing base of the working poor has gone up in smoke. “Typical liberals” like me wouldn’t be caught dead there. Why does that matter? Online sales. Wal-Mart wanted to go after the Amazon shopper and their own rapacious greed is now an obstacle. Kind of sweet.
Grow, mine, drill, and produce more stuff here, even if it means imposing import duties.
Impractical for two reasons:
1) Restricting imports is at odds with having the global reserve currency as we would be restricting the available supply. This will also have the paradoxical effect of strengthening the USD over the medium term, rendering our exports less competitive and neutralizing whatever short-term gains are realized.
2) We run the risk of a trade war we can ill afford.
3) Increasing the costs of imports will place further strain on already stretched household budgets.
4) Exporting is not a particularly good strategy for generating domestic employment. A country running surpluses to provide employment is by definition suffering from insufficient effective demand. Rather than address this domestically the country in question decides to import demand from other nations. The United States exports demand in exchange for real goods and services, therefore the correct response is to address the lack of demand rather than attempting to import more of it from someone else.
5) The only figures that matter here are employment numbers. A tight labor market policy will force incomes and conditions at the bottom of the wage structure to improve as firms compete for workers. A large broadening of the tax base will also result.
PD, I came to Turchin’s writings through Razib Khan.
Oops, that should be five reasons. Seems I got to two and just kept on going.
Ben, I’m not particularly interested in increasing our exports. I think we should be producing more of what we consume.
@Elipses, I think I came to it by Razib’s recommendation as well.
I particularly find this chart of political violence problematic. The American Revolution was an act of political violence, and it doesn’t measure a blip. Shay’s Rebellion. Whiskey Rebellion. Duels. The riots and mob action that accompanied the first party system (see Gordon Wood). The lynchings (not necessarily racial) that emerged in the Jackson era. I think violence against slaves wouldn’t necessarily count as “political violence,” (slaves are property and not part of a political community), but some slave revolts like Gabriel’s Rebellion were directed towards changing the political order. Religious riots against Catholics and Mormons.
PD, not saying there aren’t problems, but he is in new territory. I think the first real efforts in this direction started in the 1970s with studies of the economic utility of the slave system in the Antebellum South. He comes to history by way of ecology evolutionary biology.
But he’s also amassed a bunch of interesting data in the meantime, to say the least. And I would agree with him that the times seem more and more unstable.
And hey, don’t forget that the Mormons had their own standing army for a while, too!
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Care to present an argument? Mine would be simple. He spent his career funding small businesses.
“Lord Drew”
I like that. Michael is trainable.
I suspect he doesn’t have the data to make that chart, and the data that he might have is ultimately culled from studies specific to conflicts like the Civil War, Vietnam, etc. Also, that chart doesn’t seem to take into consideration the general increase in population.
“Lord Drewâ€
The authentic voice of the oligarch:
Not a wisp of wisp of the merest, tiniest acknowledgment that maybe, just maybe, he and his posse could be part of the problem. It’s all the fault of the old, the sick, the poor, the unemployed. The monsters.
Sam:
No, Drew is perfectly un-self aware. He’s a primitive that way, like a cave man who has never paused in his pursuit of the Wildebeest to wonder, “Why?” He thinks only as far as, “Me like Wildebeest. Me get Wildebeest. Mmmm, mighty good.”
Sure, Red, he’s a small business man, exactly the same as my barber and the family that runs my favorite sub shop. They’re worth a quarter billion too.
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PD, I haven’t had the chance to read it yet, but he says Turchin has much more supporting data on his blog. I just can’t find the time when I’m both awake and free of my three year-old to read anything deep.
“… but Turchin says he has …”
Sigh. I’m too old to have a three year-old. It’s exhausting.
The current predicament in the US can be traced back to 1913. There fixed it.
Sigh. I’m too old to have a three year-old. It’s exhausting.
When children are toddlers and pre-schoolers, it’s a physical task running after them, entertaininng them, letting them safely explore new vistas we’ve already checked out. When they are pre-teens and older, it becomes a mental /emotional task, in containing but encouraging their immature independent spirit, and at the same time preparing yourself and them to let go. It’s different energies expended at different times in raising children. It’s never really easy, but rather an unpredictable adventure that nothing else seems to surpass.
I don’t often agree with Jan, but she speaks from experience. I have 16 and soon-to-be 14. As tired as I used to be when they were little, I think this may be harder. I guess the bad news is that there is no easy time.
Michael,
It’s a different kind of “hard,” one that is out of your parental safety net.
Michael,
It’s a different kind of “hard,” one that is out of your parental safety net.
Dave
An increase in domestic consumption via duties is directly linked to a reduction of imports. You cannot have one without the other. What you’re really arguing for is a completely different international currency regime where the U. S. no longer holds the reserve currency, which is fine, but that’s a far cry from a simple domestic production policy.
sam
Care to pose a mechanism for that assertion? Or just your usual incoherent rant?
@Red
“Care to pose a mechanism for that assertion?”
Indicted out of your mouth, and oblivious thereto. You know, you’ve forced me to accept a conclusion that I’ve resisted for some time: You are truly stupid. Your mind is really something to be despised.
Ben:
We maintained a trade deficit half our present one and a quarter our present one, the dollar was still the reserve currency, and somehow it all worked out.
There are other alternatives to duties. For example, China, Japan, and the KSA could voluntarily import more from us. I’m skeptical about that.
1) I dont think the inequality issue is completely clear. Women entering the work force and marrying those with similar salaries clouds the picture since household income is used so much in these studies. That said, it is pretty clear that income and wealth are concentrating in the top 0.1%.
2) This is a concern because it may just be Another Road To Serfdom. Hayek’s concerns were wrong all along. Socialism is a relatively new construct, and pure socialism has failed. Given the conditions when he wrote, maybe his concerns had some basis, if overblown, but it ignores the tried and true road, i.e. a few wealthy people/families running a country. That is the world’s historical norm and what we should worry about. Since you cannot vote out the wealthy who run a country, revolution of some sort is the usual method of change.
3) To somewhat obliquely address Sam and Drew’s squabble, we really did have small businesses, big ones too, before 1970. We had economic growth before 1970, often pretty good. Since 1970, the period under consideration, we have had massive growth in the financial sector, which I think should include PE. Have we seen a corresponding amount of growth in the rest of the economy? No. All of the changes in policy/deregulation which have occurred since 1970 have clearly benefitted the financial sector. It i snot clear that everyone else has benefitted that much. … is correct that both parties are guilty, though I would argue that the Ds have made some attempt at mitigation.
4) I dont know if this is inevitable or not anyway. We are looking at a mature, capitalistic economy. No one knows the end game as no one has ever been here before. As we are becoming so productive that we need relatively few workers, even for grow, drill and mine, do we end up with a two tiered society anyway? It seems highly probable to me that in this setting a few workers are going to be lucky and most will not and capital will be king.
Steve
I don’t often agree with Jan, but she speaks from experience. I have 16 and soon-to-be 14. As tired as I used to be when they were little, I think this may be harder. I guess the bad news is that there is no easy time.
Hah… Try having all phases of parenthood going on all at once, when you’re too old to have the energy. I will turn 49 in January, have a three year old (almost died from infection at C section site), have a thirteen year old child with special needs, and a nineteen year old in college. Exhausting is a huge understatement….there really are no words to describe it. On the bright side, my perspective is a lot better now. The little one is calling me to play princesses with her at the moment. I “should” be doing a hundred other things, but instead of getting frustrated I look at it as a good excuse for poor housekeeping.
CStanley:
You poor bastard. Respect.
Steve:
I think that’s a really interesting point. Terra incognita, and nothing to guide us but ideology – distorted rear-view mirrors.
I agree with steve’s #1. Too much focus on income and not on wealth. The historic measure of too much power was that the rich owned everything, they owned all the good land you wanted to farm, and they not only owned the means of production, but the nearby houses and stores.
The top 1 percent of households in 2009 started at $343,9217 (AGI), which really isn’t robber baron territory; it could reflect two-income households of professionals in Manhattan or near Silicon Valley with lots of debt.
The universal dynamic that drives _every_ human society, no matter its political structure, is “keeping what is yours.” But perhaps not quite in the way you think.
http://cellosophist2.blogspot.com/2013/11/oh-humanity-three-recalibrations-of.html
The societal _differences_ lie, principally, in what and in whom your own identity is analogically invested (see essay at link), in which types of investments your society encourages (culture), and in the extent to which those investments, once made, affect future growth and replenishment at the societal level (resilience/antifragility).
Arguments over details are more likely to be productive (if less snarkily entertaining) if we can frame them compatibly in the context of some sort of universal agreement. The linked essay above is an overview of such a frame.
Dave
The global economy is a lot bigger than it used to be, which means more nations require more reserves. China alone imports 6 million barrels of oil per day. Being very generous and assuming oil is only $90 per barrel that’s $197 billion per year, which accounts for most of our trade deficit with them. A fall in our imports will affect their capacity to reliably meet domestic energy needs so long as the dollar remains the accepted currency.
If the major economies can’t get the dollars they want, they’ll move to end its reserve status.
Our trade deficit with China last year was just about double that.
I’m open to suggestions. I think the end state of any suggestion that includes employing the least-skilled two-thirds of the American people will include growing more, mining more, drilling more, building more, and producing more.
Most people are not going to be able to find meaningful work as doctors, lawyers, or other professionals. A lot of white collar work that used to be done here is now done in India. A lot of blue collar work that used to be done here is now done in China.
Steve: “i snot clear….”
Hehehe, no sign of infection, good!
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I was reading through some Chinese history earlier this year. The big trend that didn’t involve barbarian invasions was how much of the land was owned by the elite, andhow ling it took before someone decided that was a bad thing.
Dave is reading the linked piece through the lens of Schumpeter, and I’m reading the linked piece through the eyes of the Oxford History of the U.S. series.
Schumpeter’s concern is not elites as commonly understood, but a class of over-educated and under-employed (particularly lawyers) that have the tendency to redirect the economy and institutions (the bureaucracy and labor unions) to their benefit (perhaps even through altruistic motives). Dave’s response is to try to reduce the excess surplus of education, minimize the professional class’s profiteering from the government, and provide more productive opportunities elsewhere.
So what is PD’s response? Given that you’re one of the two people I read this site for, I am genuinely curious.
I generally agree with Dave here, with the exception of import duties. I’m less Jeffersonian than Dave, so I’m not as concerned about “elites” in office, except to the extent of cost and political accountability.
I think we need the Court system to be more active in making sure that when Congress delegates tasks, particularly rulemaking, that the tasks are of a truly technical nature. The technical term is “nondelegation doctrine,” and the courts have stepped back from it because its hard to know where technical questions and policy questions begin and end. When Congress delegates to bureaucrats policy, the results will be to the convenience and liking of the bureaucrats.
“Indicted out of your mouth, and oblivious thereto. You know, you’ve forced me to accept a conclusion that I’ve resisted for some time: You are truly stupid. Your mind is really something to be despised.”
That’s fine, sam. I’ll take that as “You are correct, Drew, I can make no coherent argument for my assertion and dammit, quit calling me out on it, so neener, neener, neener.”
@CStanley- Had our son when wife was 44, her first. Know what you mean about tired sometimes, though I think we were more tolerant since we were older. Just had to get used to being asked if were the grandparents at his speech and debate tournaments.
Steve
Dave- Not that I would use your own arguments against you (Ha) but you have long pointed out that investments in infrastructure dont net many jobs. If we bring growing back here, it will be because one guy can do the work of many Chinese. Same for drill and mine to some extent. Specialized jobs, high tech, lots of gear without lots of workers. Better than no jobs but hardly seems the answer for those 2/3’s you worry about.
Steve
@steve- haven’t been mistaken for the grandparents yet that we know of, but I know it’s coming. We’re probably at the stage like early pregnancy when people suspect but aren’t quite sure, so they err on the side of caution.
“The roots of the current American predicament go back to the 1970s, when wages of workers stopped keeping pace with their productivity.”
So I wanted to get back to this.
One needs to understand that the economic environment of the 50’s and 60’s was really a unique period for the US, an open playing field if you will, due to the predicaments of Japan and Europe post war.
It is true that the 1970’s started the decline in productivity and wage growth, but few actually understand what really happened.
1. Formal education in Japan and Europe (trades focus) caught up to the US.
2) Ocean freight and declining protectionism increased competition, especially with rebuilt, large-scale-economy manufacturing footprints. Why do you think Japan and Europe came into our markets in steel, auto and machine tools? Scale industries. And the monopoly wages (a tax, really) charged by the unions in those industries – at the expense of consumers – evaporated. Now you understand the de-coupling of wage indexes and productivity.
3. Fear not, markets respond. US business wage structures moved towards incentives and performance based: bonuses and 401K’s vs fixed salaries and defined benefit pensions. And Americans got on their horses and went to work. Productivity in the 50’s and 60’s declined from 2.8%/yr to 1.2% in the 70’s……..but later increased to 2.0%. Michael may still be feeling positively European, but US productivity grew double to quadruple France, Germany and Japan.
4. Employment may have moderated in the US vis-Ã -vis the 50’s, but it grew by 40% since the 80’s. Europe and Japan? 15% And incomes?? Weighted avg incomes since 1980 increased 30%, 3% gross. (and bennies are up 15%) The key is in mix. The usual composition mix (white male, non-white male, white and non-white female) changed over time. More lower productivity, lower wage mix. BUT ALL DEMO’s WENT UP. Simple composition mix data analysis that the Paul Krugman’s count on the average Joe not to understand as they rant. And you know who you are. Productivity? Other countries just unemployed their low productivity workers like the young, sort of like is happening now in the US, ahem.
5. I could write a book. But last point, almost never understood by commenters. The cost of consumer staples as a percent of disposable income has plummeted the last 30 years. The mirror, as far as standard of living, to slower income growth is even more rapid reduction in cost of living. You are net better off. Can you say Wal-Mart? That’s why people of modest means didn’t have color TV’s etc in 1970………….but now everyone does. And so on.
I don’t criticize President Obama just because. I criticize him because he is behaving, well, positively European, and he will get the same result. He IS getting the same result. And that’s not good for the Average Joe.
I’m a bit more optimistic than Dave is, but not by much.
I’ll use Steve’s 4 points to jump-off on my own:
1. As PD notes, the statistics for this are a bit dodgy because of our tax system and the use of “households.” I wish we had better data. Measuring income, especially in a diverse country like ours, doesn’t tell us much without knowing the other side of the equation.
Secondly, inequality may or may not be a problem – I think how we deal with inequality is the most important issue. It’s important to note that inequality in much of Europe is worse than the US until one accounts for taxes and transfers – so Europe deals the problem through redistribution. Germany, in particular, has pretty much given up on the idea that everyone is employable with their tax and welfare systems as well as the carve-out for “mini jobs.” Inequality is also the historical norm in most societies.
So, how will we deal with inequality here? To me the crisis is that the partisan elites on both sides have no solutions. “Liberals” make vague suggestions about increasing taxes on the “rich” but the numbers never add up, and “conservatives” talk about support to “job creators” but in reality they act like corporatists. Personally, I’m not ideologically wedded to any particular idea, but I’m skeptical that a European model will work here. We are not an ethnically and culturally homogenous nation-state like the countries of Europe.
2. I agree that “socialism” isn’t a concern, depending on how one defines it. I think corporatism is, at this point, the bigger problem here in the US.
3. I think the period before 1970 (meaning between 1946 and 1970) is a special case highly influenced by circumstances that we can’t repeat today – first of all, you have all the stuff Drew mentions about Europe and Japan and global competition. But you also have growth from the pent-up demand from austerity from the Great Depression and WWII (rationing) plus all the investment in industrial production thanks to the war. There was simply no way the growth from those factors could continue indefinitely.
4. I dont know if this is inevitable or not either.
“and “conservatives†talk about support to “job creators†but in reality they act like corporatists.”
No. The corporatist wing of the Republican Party acts like that, not conservatives.
“But you also have growth from the pent-up demand from austerity from the Great Depression and WWII (rationing) plus all the investment in industrial production thanks to the war. There was simply no way the growth from those factors could continue indefinitely.”
Yes. But notice that we rebounded from that from the mid-80’s and for 15 years. We are now applying the Euro model, and we will get the Euro result: high unemployment and slow growth. So much for “caring.” But at least Reynolds is saving thousands from Obamacare. So we got that going for us.
Trade deficit with China was $315 billion in 2012, and I did say I was being very generous with that figure. Oil prices over the last two year have not commonly been so low as $90 per bbl.
https://www.census.gov/foreign-trade/balance/c5700.html
Drew,
Many have made the argument that post-war America prosperity was a result of its dominance of the export markets but the data don’t support that. Our trade surpluses averaged two percentage points of GDP during that period, nowhere near enough to account for strong wage growth. The need for workers during WWII drove the labor market to true full employment and as a result the country had tremendous savings to be spent once the war ended.
This of course begs the question: if we can have full employment for the purposes of killing Germans, why can’t we have it for purposes of peace?
Ben, it is hard to have full employment when the rulers keep importing millions and millions of workers from elsewhere.
Where are these conservatives? There are precious few of the “classical liberal” strain left, and even fewer in positions of real power.
“Many have made the argument that post-war America prosperity was a result of its dominance of the export markets but the data don’t support that.”
Not my argument, or the way I and others of my ilk see it.
“The need for workers during WWII drove the labor market to true full employment and as a result the country had tremendous savings to be spent once the war ended.”
And investment, and a market closed to competition.
Really, Andy? You are talking to one. The vast majority of business owners I speak with are. Don’t confuse the Lindsey Grahams of the world with conservatives.
We cannot blame a lawyer that we hire before we analyze his duty. In addition it’s our mistake if we go to wrong place getting wrong lawyers.