Why the Economy Doesn’t Roar Anymore

 

 

The U.S. presidential candidates have made the usual pile of promises, none more predictable than their pledge to make the U.S. economy grow faster. With the economy struggling to expand at 2% a year, they would have us believe that 3%, 4% or even 5% growth is within reach.

But of all the promises uttered by Donald Trump and Hillary Clintonover the course of this disheartening campaign, none will be tougher to keep. Whoever sits in the Oval Office next year will swiftly find that faster productivity growth—the key to faster economic growth—isn’t something a president can decree. It might be wiser to accept the truth: The U.S. economy isn’t behaving badly. It is just being ordinary.

Historically, boom times are the exception, not the norm. That isn’t true just in America. Over the past two centuries, per capita incomes in all advanced economies, from Sweden to Japan, have grown at compound rates of around 1.5% to 2% a year. Some memorable years were much better, of course, and many forgettable years were much worse. But these distinctly non-euphoric averages mean that most of the time, over the long sweep of history, people’s incomes typically take about 40 years to double.

That is still significant progress. Looking back over an 80-year lifespan, a typical person in a wealthy country would have seen his or her annual income quadruple. But looking from one year to the next, the improvements in living standards that come from higher incomes are glacial. The data may show that life is getting better, but average families feel no reason to break out the champagne.

Today, that is no longer good enough. Americans expect the economy to be buoyant, not boring. Yet this expectation is shaped not by prosaic economic realities but by a most unusual period in history: the quarter-century that began in the ashes of World War II, when the world economy performed better than at any time before or since. By 

by MARC LEVINSON WSJ

This is the biggest crock ever to grace the cover page of Wall St. Journal Review.  Today is analogous to the technical revolution on the farm that freed up 80% of the farm work force to man the new factories of the new modern industrial age which was applying its own new technologies of engineering and mass (low cost) production of highly desirable goods.  

Now workers are being freed up in the old-fashioned industrial age factory production systems by computerized robotic production and digital administrative functions and communications.  The workers are being displaced by more productive and lower cost robotic and computer industrial methods and the demand is for educated workers:  Designing, engineering, and making and controlling robotic and computerized goods production……. also more workers in the services, highly skilled services.  And there will always be certain skilled trades for servicing and maintaining even the mundane (but now higher tech) stuff from HVAC installations, large and small, welders for pipelines, electricians, plumbers for installations, large and small….. And the health care field from the most sophisticated OR skills and procedures and equipment……to the maintenance of those facilities.  Has Mr. Levinson not heard of the American shortages of graduates in the STEM fields?  

Our youth are not studying those hard subjects so the classrooms and graduates are imported, foreigners, and U.S. industry begs for government to allow more visas for imported/foreign STEM talent.  Has he heard of the looming shortage of MDs? And other talents in that field.  We have large pockets of uneducated, unemployed, slum and ghetto dwellers, producing nothing but chaos in their lives and in others’ that they touch.  Something is seriously wrong in the culture……yeah, in values and morality.  Then there is the not yet industrialized world out there, couple billion people, in need of enterprise, technology, education, skills……. and market economies (instead of thug governments impeding it and stealing from it)……many of their people fleeing their thug governments to find work elsewhere (or to find a welfare check elsewhere where governments are stupid enough to pay it to them).  

When are the statist rulers and economists like Levinson going to wake up and preach that the a primary cause of the poverty and lack of productivity and incomes in much of the world is the unequal distribution of Capitalism.  Levinson’s prediction that economic growth, employment, incomes wealth will be sluggish for the ages, will be fulfilled if statist (i.e.thug) governments continue to stamp out market capitalism, continue to run a worthless educational system turning out illiterate high school graduates and university Art History majors with little prospects for decent incomes…… as all the while statist thug governments continue to hammer away at their PC income redistributionist, welfare state and their pathetic top-down central economic planning (The Fatal Conceit, as Hayek exposed it).

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