Hi,
I've been lurking, but this calls for some response.
> economy did. You can think of this as the most basic test of an
> economy's health: does it produce ever-rising living standards for its
> citizens?
Or, at least a stable and decent one for everyone.
> The slowdown began in the 1970s, with an oil shock that raised the cost
> of everyday living.
Nonsense, the slowdown began much earlier and continued long after the oil
embargo. See Brenner's _Economics of Global Turbulence_.
> The technological revolution and the rise of global
> trade followed, reducing the bargaining power of a large section of the
> work force.
He's letting U.S. Capital off the hook. The flow of capital from the US to
Japan and elsewhere accounts for the rise (transformation actually) of
global trade. See Bluestone and Harrison's _Deindustrialization of America_.
This, of course is how capitalism works. So it underscores Jim's comment.
> In recent years, the cost of health care has aggravated the
> problem, by taking a huge bite out of most workers' paychecks.
Not to mention the shrinking share of employers' contribution to health
coverage.
>
> Real median family income more than doubled from the late 1940s to the
> late '70s. It has risen less than 25 percent in the three decades since.
> Statistics like these are now so familiar as to be almost numbing. But
> the larger point is still crucial: the modern American economy
> distributes the fruits of its growth to a relatively narrow slice of the
> population. We don't need another decade of evidence to feel confident
> about that conclusion.
But if you adjust for increased female labor force participation, teenager
part-time work, and multiple-wage earner households, the picture is far less
rosy.
>
> Fortunately, there is an obvious model waiting to be dusted off. The
> income gains of the postwar period didn't just happen. They were the
> product of a deliberate program to build up the middle class, through
> the Interstate highway system, the G. I. Bill and other measures.
Wow, he must have read Mike Davis' "The Political Economy of Late-Imperial
America." (New Left Review (143):6-38) but forgot to mention growing the
military, rampant suburbanization, and mass higher education. Does anyone on
this list think that such demand-side policies are either all or part of the
solution for the current crisis?
>
> It's easy enough to imagine a new version of that program, with
> job-creating investments in biomedical research, alternative energy,
> roads, railroads and education.
Or, as Keynes suggested, burying money and paying people to dig it up.
History has demonstrated that demand-side policies tend to move into areas
that do not compete with private capital or, even more, that subsidize
existing powerful private interests. Leonhardt at least needs to address the
question of political feasibility and how to achieve it.
>
> The same goes for public works. Spending on physical infrastructure is
> at a 20-year high as a share of gross domestic product, but too much of
> the money is spent on the inefficient pet programs championed by
> individual members of Congress. Pork barrel spending does not add up to
> a national economic strategy.
Tsk, tsk. This is systematic, not accidental.
>
> Health care and taxes will have to be part of the discussion, too. Dr.
> Ezekiel Emanuel of the National Institutes of Health pointed out to me
> that a serious effort to curtail wasteful medical spending would
> directly help workers. It would spare them from paying the insurance
> premiums and taxes that now cover that care.
How far we are from serious discussion of even liberal policies can be
gauged by the candidates' failure to debate getting rid of employer-based
health insurance.
Of course, my comments beg the question of what to do. As a starting point,
I'd suggest a better analysis of the problem.
Marsh Feldman
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