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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Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Mrs Miller [look her up], and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Friday, November 11, 2011

We Are Poorer than We Should Be

Reading this post at Tux's reminded me of something I wrote for a project that will probably never see the light of day in its originally intended form and format.

Here, then, is the opening of what was intended to be a chapter in a book.

Part 1.

Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.
– Kenneth E. Boulding

It's no secret that the general economic environment in the U.S. has changed dramatically since some poorly defined moment within a few years of 1980. The dramatic decrease in the volatility of aggregate economic activity is commonly known among economists as The Great Moderation. The traditional view (circa 2005) was that this is a good thing, resulting from the absence of energy price shocks, improved monetary policy, and better inventory management techniques. This interpretation looks pretty hollow in the wake of the 2007 recession, when the economy collapsed, monetary policy was reduced to relative impotence, and energy price shocks are again dominating the economic landscape.

My view is that the volatility reduction is the result of a gradual decline in economic health over that time period – what skeptics like me call The Great Stagnation. In fact that is the title of a recent e-book by George Mason University economist Tyler Cowan.

I'm a bit on the skeptical side of agnosticism regarding Cowan's main point – that we have run out of low hanging technological, financial, and resource-based fruit.  The technology claim, if it has any merit at all, might be an artifact of a slow down in government spending at all levels – coincidentally, also since about 1980.  I’ll let those with more specialized knowledge sort out the rest of Cowan’s claim. My position is that, while Cowan's argument might (or might not) have some intrinsic value, it largely misses the point.

More on the mark is Cowan's corollary – that we are poorer than we realize. He thinks measurement techniques currently in vogue overstate our wealth. While this may be true, there is plenty of data available to demonstrate in directly measurable ways that, in the aggregate, we are poorer than we should be. And what makes this even worse is that growing income and wealth disparities have led to an economically top-heavy society that is probably unstable. Ultimately, this will require either effective mechanisms to redistribute wealth downward, or effective mechanisms to repress an increasingly impoverished and unruly population. The latter could be accomplished by a stark and impenetrable stratification of society into haves and have-nots – the kind of forced repression that leads to either South American style banana republicanism or 12th century European style feudalism.  On the other hand, forced redistribution led to America's post WW II golden age.

I have not been a long-time observer of the deterioration of the human condition, so I did not have a keen view of the long, slow slide that has been taking place since the post WWII golden age ended.  My awakening came with the impeachment of Billy-Bob Clinton, our first Bubba President.  This, for me was a real WTF?!? event.  To say there was no there there is to wildly overstate the significance of Clinton's history of dalliances with various consenting adults.

With my eyes thus opened, I watched the election appointment of The Shrub with a combination of horror and disgust.  His plan to ruin America by going to war while simultaneously cutting taxes was a success that even Grover Norquist would have had trouble hoping for.

And now we have some significant minority (oh god, please let it be no more than that) of the American people openly embracing a rouge's gallery of even worse Rethug presidential hopefuls. People who cheer for Herman Cain's claim to be a surrogate Koch brother, and increase their donations in the light of his sexual harassment revelations. 

The intellectual nihilism of conservatives is perfectly demonstrated by Shrub, Cheney, McCain, Cain, Bachman, and most especially by the idiotic Rick Perry.   You see, it takes anti-intellectualism, ignorance or outright dishonesty to embrace the Rethug policies of upward wealth redistribution, and all that they imply.

I am seriously fearful of the world we will hand to my grandchildren - now aged from 4 to 14.  We are on a road to to deep repression or revolution, and eventually, perhaps, even another World War


Bukko Canukko said...

The intellectual nihilism of conservatives ...

The apocryphal suicidal tendencies of lemmings, ostriches, boiling frogs and other animals are fables. Those stories are just analogies for what HUMANS actually do. (And not just the Amerikkkan sheople, either -- see Rwanda, Khmer Cambodia, the Soviet Holodomor and so many other stupidly self-destructive acts.) WASF because WASS (last S = "stupid.")

Suzan said...

Gee, Jack.

Wish you would go ahead and finish that book.

I like your approach and agree with your analysis. This mainly sprang from the Reagan coup (if not the coup replacing JFK before).

We need your documentation.

Kudos for that start!


The Arthurian said...

I liked it too, right off.

Something you might like: In the upper-right corner of the screen, at EconomPic.


"I support the Occupy movement"

Jazzbumpa said...

Hi kids -

The book wasn't my project. I was invited to contribute a chapter. But, for reasons that have very little to do with the project itself, (lie got in the way) it had to be postponed, which realistically means dropped.

The purpose was to point out where we are to a population that is either ignorant or in denial, and make specific policy recommendations.

I think I'll just out the whole chapter up here n a series of posts. Some of it will be redundant, since it draws largely on what I've posted here, but there's no reason to to that stop me.

Thanx for the encouragement.