Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Wednesday, July 14, 2010

Productivity - It's A-Wunnaful

In comments here, Tux brings up the issue of efficiency in making stuff, which is a contributor to productivity.  His point is that we are too efficient.  I've never considered that angle in that way, and he may be on to something.  Most particularly because of what productivity has done to wealth distribution.

Well, hey - I have some graphs on that subject.  (Are you surprised?)    Full disclosure: these are not my graphs.  They come from The Economic Mobility Project Report, by Isabel Sawhill and John E. Morton, which I previously linked  here.

The first graph shows how median income and productivity traveled pretty much in lock step in the post WWII years, until something happened.  The thing that happened was the presidency of Ronald Wilson Reagan.

Here are some close-ups.

Up through '74, everything seems to be in order.

To recap:
Truman - OK
Ike - OK
Kennedy/Johnson -  OK
Nixon/Ford - Yup, still OK
Carter - OK.  Geeze - even the moribund Carter administration was OK.
Reagan - Well, a bit of separation starts to develop, but maybe not too bad . . . maybe?
Bush I - The first major divergence, as productivity goes on it's merry. steady way, but median income declines.  Wait a minute -- productivity up, and incomes down?  How in the hell can that happen . . . ?
Clinton - It takes a couple of years, but median incomes start to rise again (yay!), pretty much parallel to productivity increases.  Phew - it's a good thing we got that divergence behind us.

Oh -- wait . . .

Bush II - Well, shit!  It looks like the wheels came off.  Off median income,that is.  But not productivity, which continued to rise apace.  But if productivity goes up, and median income doesn't, then where, oh where is all that increased profit going?

(For reasons that are not likely to become clear any time soon, the authors chose to renormalize  both productivity and median income to a base of 100 with Y2K data in that last chart.  Perhaps they did so because the growing divergence would make fitting both lines on a single graph awkward.  It already looks like a damned alligator's gaping maw!)

But wait - there's more.  I have a graph (ta-dah) that answers that question.

Well - I guess that answers that.  But, hey - it's all good, cuz, who needs a middle class anyway?


J said...

The stage was set for BushII during the reign of demopublican Clinton, I believe. Check out the increase of wealth among like top 5% during Clinton--even outdoes Reagan. Those were the years the dot.com's got rolling--Microsoftocracy-- and Clinton barely kicked taxes back up on the well-to-do (still less than Reagan's first term).

Clinton also agreed to most of Gingrich/Gramm's de-reg schemes and wiping out the last remaining traces of the New Deal, thus opening up the mortgage casino to AIG/G-Sachs/JP Morgans, etc. He may have done some good for the po'--but on the whole Clinton was pro-business, pro-corporate all the way, and nearly as much a war-mongerer as Bush-Cheney (ie Kosovo, etc); though Bush with help from his big oil palsies outdid even Clinton's excesses.

It's the sort of ...moderate academic econo-types such as DeLong and Krugman who have managed to make the Clinton era seem like...JFK or something, when it was economically speaking still Reagan supply-side hucksterism, with a few liberal aspects.

Diogenes J

BadTux said...

J, Alan Greenspan called Clinton "the best Republican President of the past forty years." For those of us who were busy fighting the Clinton Administration on a number of fronts from civil liberties to the safety net (we mostly saved civil liberties, lost the safety net), it was clear that he was no liberal. Clinton looks good today only by comparison to the men who preceded and succeeded him, but you're quite correct that his policies set the stage for the utter disaster of the Bush II Presidency...

- Badtux the Was-there Penguin

Jazzbumpa said...

Cogent comments, guys.

Clinton might have set the stage for Bush, but nobody held a gun to Bush's head and told him to ruin the country. (Disclaimer: By "Bush" I mean the regime. I still believe that W himself saw close to irrelevant to his own presidency.)

I didn't realize Greenspan said that about Bubba Billy. I thought I had made it up myself. Really.

Anyway, what this illustrates is that there is a brand of centrist conservatism that can be relatively successful. As opposed to right-wing regressivism, which will be the ruin of us all.


J said...
This comment has been removed by the author.
J said...

The Democrats, or DINOs at least have for the last few years let Billy Bob Clinton off the hook for de-reg and signing off on Gingrich/Gramm's plans (including the ending of the Glass Steagall act). So really, he's as much to blame for the mortgage crisis as the GOPers (as the Counterpunchers pointed out a few years ago, to little or no avail). And lest we forget Obama then staffed his economic team with Clinton people, and G-sachs execs. Wasn't Larry Summers, a multi-millionaire, and the other econ-dude a Clinton adviser as well

Economically speaking there's no great divide between Dems and GOPs (actually ...Pelosicrats are probably closer to Demo values, but hardly perfect. ). For that matter Billary agreed to the Bush war, and indeed help set that up as well. Greenspan was on the money--

Jazzbumpa said...

I only disagree a little. Gramm's financial deregs came very late in Clinton's 2nd term, post impeachment, after his hair all turned gray. Maybe he could have done something about it, but I really have my doubts.

I do think that economically, at least, Clinton was to the right of Eisenhower, and B. Hoover Obama is farther right, still.

I can't say there is no divide between Dems and Rapugs, though. The thugs are trotting out the lunacy of supply-side economics again, as if it was handed down from moloch-almighty to Jude Wanniski on gilt-edged stone tablets.

My dad told me almost 50 years ago that if a crumb happens to fall off the plate, the Dems might let you keep it. The Repugs won't even do that.

At the time, I had no idea how right he was.

On foreign policy, I almost totally agree. Obama has simply continued the Bush agenda. McShame would probably have been even worse.


J said...

Yes, in terms of authentic Demo values ala FDR or JFK there was a divide. But late-term Clinton--with Larry Summers, who helped orchestrate much of the de-reg, at the helm--however seemed nearly Reagan-ish. Who cares really, but...Summers still wields a great deal of power, economically and politically. Indeed, I suggest Summers might be interpreted as the Grand Poobah of the Obama Admin., the head of the backroom guys. The recent supreme court nominees, Miss Kagan also a Summers person (did some coverup work for him at Hah-vahhd).

Jazzbumpa said...

I guess the other sub-text here is that the political left is close to non-existent in the U.S. What we do have is just about the size of Bernie Sanders.

Half the country is centrist, 30% leans right to hard right, and 20% are bat-shit crazy ass-hat tea-baggers and/or authoritarian followers. And almost all of them in every segment are ignernt.

The only populism is far right wing.

Which is why I think we are headed toward fascism.