Keith, I'll just have to take you at your word on the actual rate of US GDP
growth. It may well be higher than the 1.8% Reich claims it is. However, many
of the other things he mentions, and which others have mentioned, suggest an
economy in decline and perhaps in severe decline. Everything seemed to be
looking up until about the 1970s and then ever so many things started going
down hill after that. The best book I have on the reasons for it is Hacker's
and Pierson's "Winner Take All Politics" which lays out how the rich got very
much richer, the middle class became eroded and the poor became poorer from the
mid-1970s to the present. I should take another look at the book, but some of
the most significant trends H&P (and Riech) mention relate to changing
political power, enabling the rich to control politicians to make decisions to
their advantage (e.g. Bush tax cuts, financial donations to politicians making
them, in effect, lobbyists for finance and industry) and the politically
fostered decline of unions. As well, the US government and many state
governments have become hugely indebted and therefore greatly constrained with
regard to the kinds of stimulus programs they can launch. All in all, whether
the rate of growth is as Reich says or a little higher, the US does not appear
to have much of a chance of a return to the kind of growth, hope and prosperity
we witnessed in the decades following WWII.
Ed
----- Original Message -----
From: Keith Hudson
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION ; Ed Weick
Sent: Thursday, June 02, 2011 3:02 PM
Subject: Re: [Futurework] American economy
Ed,
At 15:09 02/06/2011, you wrote:
Robert Reich's take on what has happened to the USA since world war II.
http://truthout.org/truth-about-american-economy/1306953884
This is a pretty accurate account of the American economy since '45. However,
towards the end he writes:
<<<<
Democrats, meanwhile, are behaving as if they're powerless to affect the
economy even though a Democrat occupies the White House and his appointees run
the federal government.
>>>>
. . . and then gives no hint of what policy the Democrats should be
advocating! OK, it's true enough that they don't have a policy (except more
public spending which would only make the deficit worse) but that he -- one of
the most articulate economists on the left -- hasn't been able to sketch out
something that's anywhere near relevant is eloquent enough.
But there's another point that intrigues me for which Reich is not to blame.
This is the figure of 1.8% that's officially quoted for present GDP growth.
This cannot be so. In America, as in the UK and Europe, the average income and
well being of ordinary folk has actually been declining for decades. And yet
GDP has supposedly been tanking along at anything between 3% and 5% p.a. for
year after year! There's clearly a discrepancy here of at least 2%. Far from
being 1.8% today, it ought to be 0% or even a negative figure. This is pure
spin by government statisticians and economists.
Much the same applies in the case of official figures for inflation -- except
the fix is in the opposite direction. To be realistic, at least 2% or 3% should
be added to the officially quoted rate. This is why Bernanke is so ambiguous as
to know what he's going to do next. He knows that America is not far away from
galloping inflation. "Can I get away with yet another dose of QE", he must be
asking himself. He must be very fearful that if he does so he might go down in
the history books as the person who transformed the Great Recession into the
Great Depression Mark II.
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/06/
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