Let’s cut the crap about Japan’s lost decade
Marshall Auerback, a Director of Institutional Partnerships at the Institute for New Economic Thinking (www.ineteconomics.org) Let’s cut the crap about Japan’s Lost Decade.
As Hill notes, we tend to use very narrow metrics to determine a nation’s economic success: “Americans are the only ones who seem to think they need three refrigerators, four televisions and a car for everyone in the household” is the best way to measure national well-being. I admit that terms like “happiness” and “well being” can be somewhat amorphous, although it is only in the last 40 years or so that we have defined prosperity solely in terms of the metric of growth and of course, Japan always seem short-changed in that regard.
One shortcoming of investment-led growth is the traditional Harrod-Domar issue: it is difficult for aggregate demand to keep up with the additional supply capacities created by previous investment. This is probably less of a problem in underdeveloped economies where improvements in standards of living are badly needed (provided, of course, that the capacities of production are used for internal markets rather than exports to developed countries). But it is definitely a concern for mature economies.
Here we go again — this “new” economic thinking that we have enough smacks Bill O’Reilly uttering that folks must be better off these because average house size was larger (missing of course that all the average increase comes from the top these days).
Half of Chicago’s gang age males are in gangs (100,000!); low income neighborhood schools don’t work because students (and teachers!) know they wont get paid anything for work when they graduate — so why bother (minimum wage down 25% while per capita income upped 100%); Republicans running rampant because deunionized America has nobody watching the Washington store; NYC cops make 24X as many stops per reported crime (crime down 4X — then — stops upped 6X) because deunionized middle class and poor have lost their mojo (NYC cops subjected to even worse abuse by their superiors for the same reason — PS; their union went for 34, since 1974 years without any raise for increased per capita income and still don’t know it happened to them).
Want some new thinking — try some old thinking that has worked around the world starting post WWII in Germany: legally mandated, SECTOR-WIDE LABOR AGREEMENTS — which seem to balance both labor markets and political forums perfectly. And double the minimum wage while waiting: only 4% * increase in direct inflation. * http://ontodayspagelinks.blogspot.com/2008/08/3-cost-of-gdp-output-and-inflation.html
dennis
“we have enough” does not mean it is well distributed.
and given that the class of people you cite thinks having enough means a new pair of air jordans or a Raider’s jacket (i am dating myself) i would have to say that we need to give people a better idea of what “enough” means.
coberly,
First and foremost, I spell my name with only one “n”, not two. Please do not ever make this error again. 🙁
Secondly, the class of people I cite would like to see an $30,000/yr minimum wage, going up to $40,000/yr, 12-15 years out.
Deniss
i have all i can doo to spel my own name rite.