From Stiglitz:
“But income data suggest that it is the neoliberals who may benefit from therapy. Large segments of the population in advanced countries have not been doing well: in the US, the bottom 90% has endured income stagnation for a third of a century. Median income for full-time male workers is actually lower in real (inflation-adjusted) terms than it was 42 years ago. At the bottom, real wages are comparable to their level 60 years ago.
The effects of the economic pain and dislocation that many Americans are experiencing are even showing up in health statistics. For example, the economists Anne Case and Angus Deaton, this year’s Nobel laureate, have shown that life expectancy among segments of white Americans is declining.”
No. Things are not OK.
https://www.project-syndicate.org/commentary/globalization-new-discontents-by-joseph-e–stiglitz-201
6-08
But they keep on posting these sunny scenarios, don’t they. Making their own reality.
Only the neoliberals can afford to waste money on therapy.
But jobs finally hit where they should have been in 2009! It worked!
As Milton Friedman would have said: “Mission accomplished!”
Fur—eeeeeee–dummmmmmbbbbbbb
They might benefit from some truth serum.
Neoliberals don’t yet understand that they were wrong. That’s the scary part. And yet they’ve already started laying smoke. Small wonder this all started in Austria.
Sluggish growth, anaemic employment, deflationary trends, depositor bail-ins, negative interest rates, constant stimulus, artificially elevated asset values and direct central bank manipulation in almost all asset classes? Get used to it, for better or worse this is the new macro-economy.
And the political ramifications are increased racial and political polarization.
And of course, the fear that what you describe may at some point hit a wall.
I don’t people really get this: but the economists don’t have a lot of great solutions to this.
It would require them to admit neoliberal solutions are designed to exacerbate income inequality. They are a total failure in creating a functioning economy for anyone besides the “meritorious”.
I get that.
So what is the fix? Unwinding the deal trade deals would take years. Stimulus helps. But it’s itself a fix.
Jobs are identity. They matter more than just income.
Some of those New Deal nostrums would be a good beginning. Banks and Market regulations. Anti-trust. New types of collective bargaining like France has(that the neolibs are trying to destroy.)
Stop privatizing government functions and bring back those baseline setting government jobs. Get rid of 401Ks–the Fed will kill you with their policies.
Reverse perverse tax incentives.
Helicopter money is being whispered about in Europe. No more to the banks. It did not solve the stagnation. It just made a lot of connected people a lot richer.
Is a whole lot more, but zip chance of HC doing it. And the courts are a BIG pro-business problem.
They can’t raise interest rates twenty-five basis points without tanking the economy. There is going to be a reckoning and it won’t require legislation. We are on the flume ride now; stay seated and keep your hands inside the boat.
Is exactly the thing they are desperately trying to avoid; how do you fix that?
They can run but they can’t hide. Unstable structures will always collapse at some point.
That’s right, they don’t have solutions for this. We may have backed ourselves into a collective corner from which there seems no immediate escape; low interest rates, which encouraged ill-advised investment and overhang, now cannot be raised without tanking the economy. Whoops. It is like putting the patient in a coma with a drug that will kill them when they awaken. Not smart.
But the economists, it seems to me, didn’t count on the market grasping so readily perverse incentives and short-sighted profiteering. They underestimated our captains of industry.
Wolf Richter had a timely post on the subject of inflated economic resume`:
Wolf Richter: Why this Job Market is Still Terrible: The Politically Incorrect Numbers Everyone is Hushing up
http://www.nakedcapitalism.com/2016/08/wolf-richter-why-this-job-market-is-still-terrible-the-politi
cally-incorrect-numbers-everyone-is-hushing-up.html
Some good comments.