I'm taking up a thread which is weeks old because I forgot to finish this post before. Here are answers to Mark, Tom, and Perry. >Henwood's graphic seems to show a rising trend in propductivity overall, but >that's not what he says elsewhere. The official productivity certainly increased quite a lot! There is probably some confusion here between the productivity growth rate and productivity itself. It seems that this issue always confuses people. How many times did Greenspan need to lecture those clueless Congressmen about this during his testimonies? That said, I agree that there are issues about the validity of official productivity numbers. Plus, I don't know how this chart is adjusted for inflation as well as other techincals. >Is there an article to go with the >graphic, Julien? Of course. http://www.panix.com/~dhenwood/Stats_earns.html >In any case, I don't think this changes my point... Maybe not, but it should change the way you summarized it! It's not only and probably not even mainly the oil shock which caused the fall in wages. >My point is that 1973 saw the beginning of an era of deflation, marked by >(a) huge *inflation*; then (b) disinflation as polict resulting in >stagflation, ie growth stagnated while inflationary pressures slowly >unwound; followed by (c) strong but uneven growth in a generally >deflationary environment. As far as I can see, this makes sense theoretically. But does the data really agree with a)? And does the timing really stick with your theory (for example, did stagflation follow disinflationary policies)? I don't know. >... and because of the rise in inequality which >deflations always produce, the overall result has been a net increase in >mass povety especially in Africe and other peripheries. But has the deflation really been worldwide? Many peripheric countries have weak currencies right? To what extent were they dollarized? I'm really don't know how to sort this issue. You have references, Mark? >Thus there is a *CLEAR* and observable connection between the >energy crisis of the early 1970s, which triggered the original economic >slowdown, Where do you *SEE* this slowdown in the US data? I know there was *a* slowdown, but was in what sense was its magnitude big enough to justify what you say? Or maybe the shock was a catastrophe for lots of "emerging" economies? Anyway, you don't need a very important real-economic event to generate, due the financial environment, big financially driven and avoidable crises. >Productivity increases durinf deflationary eras are particularly damaging to >living standards since what results is not increased output but increased >unemployment. What's the reasoning beyond this? You checked the charts? What you're saying seems more to be the explanation of a defaltionary spiral, because if consumption drops (this is what "damaging to living standards" implies, right?) while productivity grows, the effects on unemployment will indeed be severe. Since there was no deflationary spiral and no dramatic drop in output in that case, there has been huge profits. Thus, there has been a potential for tax hikes or deficit spending to compensate with welfare. Anyway, there's a very easy answer to such a situation which allows everyone to benefit from the productivity hikes: actually implemented cuts in working time per capita. Tom: >Perhaps I missed earlier discussions of this topic, but the common wisdom >here in the US is that real wage levels NEVER have recovered. Well, I've strong doubts about the validity of the official measure (or even of any measure) in this context anyway. But I think that the official data agrees with you. Maybe the recovery point is near, though. >The most devastating indication of this is the fact that in 1970 less than >14% of women married to wage earners worked outside the home in the US, >now >the figure is something around 66%, for no appreciable gain in real wages, >just making up the difference. According to official stats, this should have boosted incomes per family. But I think official stats don't tell you how the average family is doing because they averages money (in other words if the top-earners' income increased a lot, then the others' incomes would have diminshed significantly without moving the offical stats). The official inflation indicator could be under the "reality". And there's also the issue of taxes. >The toll on familes is tremendous and >everyone knows it. Then there's a bunch of liars out there. No news. >Stockman even >testified to Congress that there would be no more middle class. Interesting. You have a bigger quotation from that testimony? And now, an original "I'll look dumb" question: Who's Stockman? The Treasury man? > ... and it >seems that's true, doesn't it? I guess it depends of what definition you have for "middle class". Perry: >more, more, more!!! That's how Crash-List began: Speculation about overaccumulation and financial bubbles. You might want to look at the beginning of the archives. The connection? The "Henwood wedge" (by all means check his website if you're interested in that stuff!) means that capital is grabbing a bigger share of the pie, which is usually related to overaccumulation. >there isn't a one among us who can't use a more thorough theoretical and >practical understanding of this subject. Definitely. And if someone has a clue as to how the wages went down at the micro level (deunionization or whatever - I don't know), please post. _______________________________________________ Crashlist resources: http://website.lineone.net/~resource_base To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/crashlist
