A Phony Economic Narrative

Nation of Change has this surprising editorial, A Crisis in Two Narratives.  I wouldn’t be surprised if this weren’t a new attempt at the far Right, upper 1% to come up with yet another alternative to Keynesian economic prescriptions for what ails the world economy.

You might be entertained by reading the article.  If you don’t immediately see the flaws in this silly argument, let me add my take on what is said in this article.  The quoted sections come from the article.

This has got to be one of the most misguided analyses I have read in ages. I am surprised to see it in Nation of Change.

“But, as Tyler Cowen has argued in his book The Great Stagnation, once these “low-hanging fruit” were plucked, it became much harder to propel growth from the 1970’s onward.”

If, indeed, it became difficult in the 1970s, more likely the problem was the onslaught of wealth transfer from the bottom to the top.

“If this diagnosis is correct, advanced countries need to focus on reviving innovation and productivity growth over the medium term,”

If the diagnosis is correct, how is it possible that making companies able to produce more with less labor (productivity growth) going to put people back to work and increase demand?

The solution is much simpler and far more obvious. Start shifting the wealth back from the wealthy who have been taking it away from the middle class since the 1980s and put it back in the hands of the middle class so that they can put the demand back in the economy.

Reregulate the banks so that we can shift the focus of our economic growth away from money manipulation which destroys jobs, and toward making useful things that require workers. We need to stop the anti-union forces so that those workers share the benefits of productivity gains that they help make possible.

Finally, the government should rebuild infrastructure now while there is slack in the economy and it will be cheapest to do. We are running trillions of dollars of deficit on the infrastructure rebuilding that is necessary to do in any case, and now couldn’t be a better time to do it.

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