Looking Forward To The Late Twenty-Teens
by Barkley Rosser (re-posted from Econospeak)
Looking Forward To The Late Twenty-Teens
Yes, at midnight on December 31, we shall be at the midpoint of this decade, going from the early twenty-teens to the late twenty-teens. While celebrating half decades is not something done particularly, indeed for some decades we do not distinguish their halves. Thus the late 90s was an economic boom period, the early 90s were not. The late 60s became dominated by hippies and anti-war movement that split the Dems, while the early 60s was about New Frontier and Great Society, which split the Dems a different way as the South did not like civil rights legislation. But people wore suits and thin ties rather than tie dye shirts. The early 40s was WW II while the late 40s were postwar. But few bother making a big deal about the early 80s versus the late 80s, even if I can argue that there were important differences between them after the fact now.
A century ago, the middle of the decade brought to an end “the long 19th century” as WW I broke up the order that was established a century earlier in the mid-eighteen-teens at the Congress of Vienna after Napoleon was finally defeated at Waterloo. This may not be the end of a “long 20th century,” but who knows? Maybe it is. In any case, I shall do a little looking forward, hopefully bringing in some larger movements.
Many observers seem to be pessimistic about economic prospects, both in the near term and the longer time horizon. Many speak of secular stagnation, whether due to demographic, technological, or sociological reasons. One of the secular stagnationists,Tyler Cowen, is also pessimistic about the coming year, except for the US and India. Paul Krugman in his interview with Ezra Klein actually talks about the next five years, but only in terms of income inequality, which he does not seem optimistic will be overcome. While I think Krugman is probably right about that, I may be not quite as pessimistic as Cowen or some of these others, despite not having a ready explanation for how to overcome the drags from falling birth rates, a lack of obvious growth-enhancing new technologies, or the heavy weight of severe income inequality. Nevertheless, I think many are too gloomy about the next half decade, even if Cowen proves right that this coming year is full of dangers and several nations fall into recessions (some almost certainly will, e.g. Russia).
So, the past half decade has been dominated by the hangover from the Great Recession, which most Americans say is still going on, even if it technically stopped early in the half decade. We know this is due to stagnant real wages and slow job growth, even in the more rapidly growing US. However, indeed it does seem that the US is growing more solidly now. Will it offset the negative trends in other major countries, including China and much of Europe? I do not know, but I suspect that over the next half decade, we shall come out of the Great Recession’s hangover, even if what goes on does not turn into an outright boom, at least globally. Let me look at some trends around the world.
The most depressing scenarios seem to be for Europe and Japan, both of them dragged down by demography. Abenomics seems to be stalling out, and the reappearance of crisis in Greece seems to threaten a revival of the recessionary euro crisis. It may well be that neither of these are going to join in any serious growth scenario, but I think chances are good that neither will drag the world back into global recession. Japan has been stagnant for a quarter of a century now, but it has not actually declined in any serious way. There is no reason why it may not continue as it has, stable in its pleasant stagnation (life is mostly pretty good in Japan), not contributing to major world growth, but also not dragging it down. Likewise in Europe, we may not see much growth, although maybe Eastern Europe will return to growth after falling behind Western Europe during the Great Recession. But the many who have forecast a blowup and end to the euro have so far proven wrong. The euro politicians are really committed to keeping it going and will cut deals to make it do so. It may look now like Greece will blow things up, but while it triggered a crisis four years ago, it failed to end the euro, and I do not see it doing so again. Even if Greece exits the euro, I do not see why that should necessarily spread to others in the eurozone. It might just be the best solution.
Anyway, the sources of growth would seem to need to come from elsewhere. Pessimists talk of a “middle income trap,” and see the BRICS and some others falling into that. But, I do not see what the mechanism of such a trap is. Why cannot these nations follow the East Asian tigers who have grown to very high real per capita income levels? That many are stalled out right now does not mean that they have to remain stalled out.
While Cowen forecasts stagnation for next year for Brazil and Mexico, I do not see a necessary reason why either of them, or Latin America more broadly, should remain stalled out. Deceleration of growth in China has been pointed to as a source of this stalling out, but if the US can continue to grow, it may be able to provide that engine to get them going, and they may be able to stimulate each other and grow together.
Another area where we may see acceleration of growth is Africa. Much of Africa is growing rapidly right now, including some unexpected nations such as Mozambique. Clearly Africa has many problems, from tribalism, religious war, corrupt Big Men leaders, and epidemics. But while some areas will probably remain mired in these over the next half decade, with the uber poverty-stricken Sahel zone of Niger, Chad, Central African Republic, and South Sudan, presenting an especially severe challenge. But, with rising populations and hopefully rising inter-African trade, we may see more and more nations coming to resemble Mozambique and embark on sustained growth. There are good chances that Africa will increasingly become a growth engine of the world economy.
I am not going to make any overly specific forecast for China. For both demographic and Gerschenkronian catchup reasons, I think it is likely that China’s growth will continue to decelerate. But it may well maintain fairly high growth rates despite some slowing down, at least for the next half decade. Certainly the development of the balance between the US and China will be an enormously dominating theme for this period, whatever is going on in other parts of the world (and I shall stay away from forecasting about Middle Eastern religious war or what will happen with Russia and the rest of the world, much of which will be strongly influenced by the difficult-to-forecast price of oil)..
In the US, I am thinking that a major change may be less broadly demographic and more to do with generations. The Greatest Generation will not totally die out, but effectively they are done for, with the retirement of the last WW II vet from Congress, John Dingell, who served there longer than anybody ever, symbolic. He and G.H.W. Bush and Bob Dole may still be alive five years from now, but they and their cohort will be exercising essentially zero influence by then. Their numbers are rapidly dwindling, and they are all going to be very old, over 85 and more. To the extent that this milestone coming up marks the end of a long 20th century, it may be in the final passing of any influence of this generation.
Also, while few speak of them, the Silent Generation will pretty much be retired by then, although still around in numbers. They often get ignored as the more numerous ones surrounding them have dominated the picture, but they have been a curiously stabilizing force in US society probably underappreciated. But they will turn into retired geezers, if not ready for the nursing homes like the remnant of the Greatest Generation.
The noisy and pompous baby boomers will, of course, be retiring in droves, although the highwater mark of that wave of retirements will only be hitting at the end of the half decade, after the peak cohort born in 1957 hits 62 in 2019 and into the next half decade. The majority of baby boomers will still be working at the end of the half decade, but most of the front end crowd will be retired, if inevitably likely to still be as noisy and attention-demanding as they are now, even if they find others less willing to grant them the attention they think they so richly deserve.
The Gen-Xers are already pretty much all into middle age, although many of them still under 40 may be denying it. By the end of the half decade, they will no longer be able to deny it. They will become our dominant middle aged group, and given what we know about age and happiness, they will be probably be so miserable they will not be able even to be ironic anymore.
Which brings us to the rising millennials, those children of the baby boomers whom they both resemble and resent. I find it funny when I read of people in Washington who are 36 or 37 claiming to be millennials. Are they? I kind of think they are just late stage Gen-Xers who are in denial and trying to be in with the cooler young millennial crowd. Of course, this brings out that these generation boundaries are somewhat fuzzy, but I guess that certainly people in their early 30s are millennials, and clearly they are going to become an increasingly important and influential group over the next half decade, for better or worse. On the better side, it may well be that their large numbers and rising skills will be the driving force that will overcome the stagnation that so many are prophesying, whether it is due to coming up with those growth-generating technical innovations or just through sheer energy and enthusiasm.
Which brings me up to a question and point almost nobody is talking about: who is the next generation? I have seen these datings of generations, and some have the millennials petering out in terms of birth years around 18 years ago or so. By some measures, this year’s freshmen in colleges are not millennials, but the next generation. Are they Gen-Z, if the millennials are Gen-Y? Are they the post-millennials? We do not have a name for them yet, and they do not yet seem to be forming an identity for themselves either. But I am reasonably certain that current undergrads are probably the last round of the millennials. If current freshmen are not the front end of the next generation, those in high school are, and those in middle school and elementary school will certainly be fully part of it.
So, I forecast that a major development during the next half decade is that the successor generation to the millennials will emerge and begin to stake out their own identity, whatever that is, and I shall make no effort to forecast what that will be or what they will do. But, perhaps they too will contribute to overcoming secular stagnation and keeping the world economy going.
Update: I shall add one more item to my quasi-optimistic scenario: Indonesia, world’s fourth largest nation in population, about which few comment. It had a democratic power transfer this past year to a moderately populist new president and is growing at a reasonably steady pace, which might well continue. It may help be one of those steady anchors in the world over the next half decade. I also note that it is the world’s largest Muslim nation, and its moderate political regime may yet offer a model to that part of the world eventually.
1/1/15 Update: Another decade that was sharply split in US history was the 1860s. This year will be the final year of recognizing the sesquicentennial of the US Civil War, with that decade obviously sharply split over that event..
How about this for an exciting — and liberating! — finish to the twenty-teens?
Unlike freedom of commercial speech (e.g., advertising soft drinks) which ranks significantly short in importance of political speech (e.g., Gettysburg Address), freedom of commercial association is so much an organic component of a free life (e.g., maxing out the market payout for our economic efforts), that it should rank just short of freedom of political association on economic grounds alone — but should be recognized as fully equal to political association (freedom of assembly) because labor unions are the only place where the great majority of Americans can assemble their political effectiveness (e.g., organized campaign financing and legislative lobbying).
Recent Wisconsin Supreme Court: “… collective bargaining remains a creation of legislative grace and not constitutional obligation. The First Amendment cannot be used as a vehicle to expand the parameters of a benefit that it does not itself protect … ” [my emphasis]
Labor’s threshold question: could any government — local, state or federal — constitutionally bar all union organizing and collective bargaining. Seems constitutionally impossible in the face of the First Amendment — so, while laws may balance constitutional rights against other interests — at what point can collective bargaining of and by itself be said to switch its nature from being a fundamental constitutional right to being a “creation of legislative grace”. I don’t see how anybody can point to any such point.
Establish collective bargaining as a fundamental right in federal court on the level with freedom of speech and we can change the culture of America overnight — even just by making unions as essential to genuine democracy a major national issue, win or lose on first try.
Go labor, twenty-teens! Morning in America.
As a non economist I only have one law of economics: Nothing happens until somebody buys something.
If money is not put into the hands of people who buy things with the money they have, then the economy will not prosper.
Denis has the right idea, but I could not be more pessimistic about the chances of any of that happening.
The RW and the .1% have figured out that while the Presidency is nice, it is not needed to control the government. They have figured out that the power starts at the state level, and they have thrown their cash at that level. Unlike the Federal level where the Dems can compete(while selling their souls to Wall Street), there is no way they can do it in the states.
We’re toast. We just don’t know it yet.
“”Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice . . . you don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own, and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying . . . lobbying, to get what they want . . . Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want . . . they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that . . . that doesn’t help them. That’s against their interests. That’s right. They don’t want people who are smart enough to sit around a kitchen table and think about how badly they’re getting fucked by a system that threw them overboard 30 fuckin’ years ago. They don’t want that. You know what they want? They want obedient workers . . . Obedient workers, people who are just smart enough to run the machines and do the paperwork. And just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it, and now they’re coming for your Social Security money. They want your fuckin’ retirement money. They want it back so they can give it to their criminal friends on Wall Street, and you know something? They’ll get it . . . they’ll get it all from you sooner or later cause they own this fuckin’ place. It’s a big club and you ain’t in it. You and I are not in The big club. By the way, it’s the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table has tilted folks. The game is rigged and nobody seems to notice. Nobody seems to care. Good honest hard-working people . . . white collar, blue collar it doesn’t matter what color shirt you have on. Good honest hard-working people continue, these are people of modest means . . . continue to elect these rich cocksuckers who don’t give a fuck about you. They don’t give a fuck about you . . . they don’t give a fuck about you. They don’t care about you at all . . . at all . . . at all, and nobody seems to notice. Nobody seems to care. That’s what the owners count on. The fact that Americans will probably remain willfully ignorant of the big red, white and blue dick that’s being jammed up their assholes everyday, because the owners of this country know the truth. It’s called the American Dream cause you have to be asleep to believe it . . .”
I don’t expect our politicians to get any better — or smarter. Abstractly, on a purely theoretical basis if you will for a moment, if big labor (big dream) supplied the same campaign financing and lobbying pressure on issues plus 99% of the votes they want they will come to us to ask what we want.
A while back I read in Truthout I believe that some Chicago cab drivers wanted to organized demonstrations to address grievances with the city. I emailed them at Truthout to instead go to their local city council persons and volunteer to work for them for a couple of weeks before election time — and the council persons would probably end up calling them to find out what they want. Now I see cab drivers working for council persons at election time and same are presumably calling them up. So it’s not a matter of changing these guys minds — only changing where they get their feed.
I just started reading Tom Geoghegan’s Which Side Are You On, his despairing tome about the decimation of the America’s labor movement — in 1991! Declaring how utterly unaware anyone and everyone was of the need for unions was in this country — in 1991!
Sugar burns at 350 degrees — but in our bodies, substances called catalysts allow it to burn at 100 degrees — under water. I see a campaign to establish the easily recognizable constitutional right to organize economically as equally capable of doing the seemingly impossible: a surprise cultural catalyst!
Win or lose in court, initially, the constitutional issue would “accidentally” educate one and all that unions are as intrinsically necessary to a real — as opposed to today’s sham — democracy. From one and all having no idea at all about the issue today (Tom’s despair!) to one and all understanding the issue (and who would disagree once they understand — and it is not exactly arcane matter; everybody will understand) is as doable as going to court (state or fed or all) tomorrow.
PS. Pretty funny George Calin: It’s called the American Dream cause you have to be asleep to believe it . . .” George Carlin went to my high school, Cardinal Hayes, in the Bronx. So did Martin Scorsese (one year ahead). I did a couple of courses a couple of summers in Rhodes high school in Manhattan, where Robert De Niro supposedly went. I ended up a taxi driver. Mmm. 🙂
And then there’s the TTP and TTIP. Game changers to any of the thoughts posted.
Not to forget in 5 years, we’ll be well into figuring out how to save the planet and not spend too much rebuilding after every weather disaster. Though that is some kind of growth, just not what I would have imagined having gone through the period of time when the US and others worked to bring the future to the present (and I don’t mean borrowing to get tomorrows profits today).
While I admire your attitude, you need to let a little reality sneak in.
Suburban sprawl and conservative attacks on unions have totally changed the battleground. Days where people worked at the plant and lived in the same neighborhood are gone. They are spread all over the countryside; they barely speak to their neighbors; and they barely socialize with those at work.
Only place that is different at all is in large cities, like Chicago. And the fact that those attitudes are relatively strong in those areas is a feature for the conservative movement, not a bug. they ignore those areas in elections and concentrate on the suburbs and rural areas where they can get more bang for the buck, while also taking advantage of the inherent racism in the US by ranting about “those people”.
Case in point:
“In the midterm elections, Republicans appear to have won their largest House majority since the Hoover administration. Republicans won on the weakness of Democratic candidates, a poor resource allocation strategy by Democratic party leaders, particularly DCCC chair Steve Israel, and an election narrative that did little to inspire base Democratic voters. That being said, in many ways, the game was rigged from the start. The GOP benefitted from the most egregious gerrymandering in American history.
As Rolling Stone reported, GOP donors plowed cash into state legislative efforts in 2010 for the very purpose of redrawing congressional lines. In the following year, as the Tea Party wave brought hundreds of Republicans into office, newly empowered Republican governors and state legislatures carved congressional districts for maximum partisan advantage. Democrats attempted this too, but only in two states: Maryland and Illinois. For the GOP however, strictly partisan gerrymandering prevailed in Ohio, Pennsylvania Virginia, North Carolina, Georgia, Florida, Texas, Louisiana, Arizona, Tennessee and beyond.
Here’s an example from the election last night. In Pennsylvania, one state in which the GOP drew the congressional districts in a brazenly partisan way, Democratic candidates collected 44 percent of the vote, yet Democratic candidates won only 5 House seats out of 18. In other words, Democrats secured only 27 percent of Pennsylvania’s congressional seats despite winning nearly half of the votes.”
– See more at: http://www.republicreport.org/2014/gerrymandering-rigged-the-2014-elections-for-republican-advantage/#sthash.UuVuLg54.dpuf
And the House is supposed to reflect the “will of the people”. The Senate of course has never had a whole lot to do with democracy. Add in the Electoral College and its insanity and the reality is really scary. And what is even worse is the process of electing the President if the Electoral College does not do so.
We live in a country with an 18th century system of government. Ground breaking over two centuries ago; probably the worst democratic system in the world today.
Carlin was funny. But he was also right.
I just read in Which Side Are You On that the Warren Court killed the Norris-LaGuardia Act’s clear stated intent to ban federal injunctions against strikes (including wild-cats, sit-downs, even if there is a no-strike clause in the contract) …
… which still left 48 states to do what they pleased. (Congress can set the jurisdiction of federal court.)
Imagine (as John Lennon would say [now looking down?]) a federal court ruling (far West states likely) or better a US Supreme Court ruling finding collective bargaining to be a fundamental First Amendment right. All such rulings would probably fall.
50 states have the right to regulate contracts. Federal law may dominate labor law under the present regime. I don’t know if states could set up union organizing now — even is so, who thinks of it. ???
In protecting freedom of association states would seem to have a lot more leeway (maybe they could do it now) to setup union recognition rules — I should say MAJORITY, EXCLUSIVE REPRESENTATION unions; minority unions (universal in “right-to-work” Europe) should be able to organize under today’s federal setup, but out of style for so, so long.
Imagine Washington state, Oregon, California and Nevada setting up centralized bargaining schemes (could work for retail workers, not for airlines probably).
Point is, once you get ruling anywhere recognizing free association labor rights, the damn can burst everywhere. For instance all the states that bar their employees from organizing would get hauled into many courts. Crackpot laws like Illinois’ just passed requirement that public school teachers must have 75% to strike (they did) should drop.
All the Koch brothers can do cannot keep one lawyer from going to court and sending all these many dominoes falling.
The idea that this SC or a preponderance of states will enact any pro labor acts is nil.
Right to work legislation is king, for the reasons I have already mentioned.
We are toast.
It is over.
Elvis has left the building.
I tend to share EMichael’s pessimism about any favorable legislative or court ruling in favor of organized labor in the next half decade.
OTOH, I think we may have just reached the high water mark of GOP legislative control in the country. We have had Obama’s secont mid-term election with things about as gerrymandered as they can get and the publicity and Obama’s standing very negative and weak. But much of this is changing, including people begining to decide that the economy is in fact doing better (consumer confidence just went net positive for the first time in many years), and it will become increasingly clear that certain longstanding hobby horses: Obamacar and Behghazi, will simply lose their relevance or ability to scare.
All that said, the GOP-controlled legislatures (and to a lesser degree, Congress) will cause a lot of damage in the next several years, which may help lead to rebound by the Dems.
I do not see the “trade” agreements as major game changeres, for better or worse. Assuming they do pass, they will simply add to drags and monopoly power, but probably not much worse than what we already have.
On the matter of the environment, we will se more warming and disasters from that. A curious point, otoh, is that the net impact on the overall US (and also the Chinese) economy in the near terrm of more warming is positive: reduced winter heating costs outweigh all those warming losses, although that turns around after another degree or so Fahrenheit, with the losses beaing out the gains.
To add to that, I note aI posted on oil prices later, after saying I would not forecast. But, clearly, for the near term we are in a low oil price situation (this will end, but I shall not forecast when). While it lasts, it will aggravate the longer term warming problem as incentives to get off fossil fuels decline. But in the near term this will contribute to the more favorable growth scenario globally, even if many markets are currently rattled by the impending problems of the oil producing nations and regions. Hard fact is that there are more oil ipmorters than exporters, and they will all gain in the short run from lower oil prices, with gloomy but oil importing Europe and Japan being among those areas that may get nice boosts the longer the oil price stays down.