Saturday, July 30, 2016

Grateful For The Obamas

Obama's stimulus package was inadequate in size (due to interference from the Republican Congress), but it was large enough to prevent Great Depression II. Obamacare wasn't designed to limit medical care inflation (only get more people covered), but surprisingly, it ended up doing so. The problems of the U.S. economy today are very similar to those of the 20's and 30's, whereby technical advancements are used to make the economy more efficient, which drives down employment, and starves the middle class of wages. Demand stagnates from inadequate middle-class wages, making the boost from technical advancements moot. Increasing the minimum wage and the strengthening unions helps. Deficit spending can help too. We need much, much larger deficits than we have at present to spark demand, but deficit hawks always squawk, so the economy continues to stagnate. The situation today is aggravated by offshoring, which the 20's and the 30's didn't have to contend with. The argument always is that offshoring leads to cheaper consumer goods, which is helpful to the middle class, and they have (Wal-Mart), but since even Chinese wages are increasing now, that path leads to a dead end. Increased research and investment would help, but America's rich don't appreciate that need. The cowardly rich don't care; they got theirs. Why invest? Why assume the risk? So they don't. The labor participation rate will continue going down as long as the bulge of the Baby Boom is retiring and jobs are being offshored.

We may be heading this direction (fun video there). In the meantime, no desire to let up on the dodgy corporations:

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