Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Growth for a few is just fine

by Jerome a Paris Thu Apr 6th, 2006 at 06:18:36 AM EST

A century after Henry Ford, middle class does less to drive economy (IHT)
The Economics of Henry Ford May Be Passé (NYT)

By any reasonable standard, the last few years have been bad ones for most people's paychecks. The average hourly wage of rank-and-file workers - a group that makes up 80 percent of the work force - is slightly lower than it was four years ago, once inflation is taken into account. That's right: most Americans have taken a pay cut since 2002.

But you would never know it by looking at the headline numbers on economic growth. From the standpoint of the broad national economy - the value of the goods and services the country produces - the last few years have been stellar. Despite two wars, soaring oil prices, business scandals and a stock market crash, the economy has been growing more than 3 percent a year.

(...)

Even some Democrats, who have long made Fordism a centerpiece of their rhetoric, are coming to the conclusion that Ford's reassuring cycle is not the only thing that can keep the U.S. economy humming.

"You don't need an equitable distribution to have a sustainable recovery," said Jared Bernstein, a *liberal economist* in Washington.

The common wisdom of the Reagan years has now spread to "liberal economists": wealth capture by the upper classes is okay.


The articles reminds us of Ford's radical proposal in 1914 to increase wages, to share in the profits he was making (and later, to make them able to buy his products).

His rivals were horrified. The Wall Street Journal accused him of injecting "Biblical or spiritual principles into a field where they do not belong." The New York Times correspondent who traveled to Detroit to interview him that week asked him if he was a socialist.

Ooohh, a socialist... And the quote about keeping the Bible (which the WSJ seemed to hold as a "socialist" book at that time, it would seem!) outside of business is also to be fully appreciated...

"One's own employees ought to be one's own best customers," Ford said years later. "Paying high wages is behind the prosperity of this country."

This was one of the pillars of 20th century economic wisdom. It is time to ask, though, whether Ford's big idea is as ill-suited to this century as his car company seems to be.

This is the most terrible line in this otherwise fairly balanced article, because it implicitly accepts the most dangerous concepts introduced by the Reagan revolution:

  • only things that can be expressed in money terms have value, and whether the "country does well" is determined only by its wealth;
  • that wealth is measured only in aggregate, without taking into account who gets it.

In fact, well-off families, not cash- strapped ones, have been the ones increasing their borrowing and cutting their savings the most in recent years, according to the Federal Reserve Board. In 1992, the top fifth of U.S. households, as ranked by income, accounted for 42 percent of consumer spending. By 2000, that share had grown to almost 46 percent, and it is probably not much different today. That may sound like a small change, but it is an enormous amount of money, a shift of $300 billion a year in spending from the poor and middle class to the affluent.

The middle classes see the wages (and wealth) stagnate, while the rich indulge in an orgy of consumption that makes it appear that the country's economy is doing great.

But that orgy of consumption is not even real, and it is certainly not sustainable, in that it is paid fully by debt. If you take out debt, GDP growth looks less perky:

  • The poor stay poor (and their number is on the rise)
  • The middle class stagnates
  • The rich only appear to be rich
  • The ultra rich are accumulating unprecedented

    levels of wealth

(with a wink to the Canadian readers who asked for Canada data... Click both to enlarge)

How long is this going to be seen as an acceptable situation? For as long as the underlying common wisdom about "growth" is accepted by any Democrat.

This doesn't look to be a temporary phenomenon. Except for a span of a few years in the late 1990s, the hourly pay of most workers has done no better than inflation for the last 30 years. Even some Democrats, who have long made Fordism a centerpiece of their rhetoric, are coming to the conclusion that Ford's reassuring cycle is not the only thing that can keep the U.S. economy humming.

"You don't need an equitable distribution to have a sustainable recovery," said Jared Bernstein, a liberal economist in Washington.

He is a sellout. He is wrong on the politics, and he is wrong on the substance - and guys like him are the reason the Democrats don't win in the US: they don't speak about the real causes of the economic woes of the midle classes, and they accept the underlying values of the Republicans (money trumps all), making them unable to propose a coherent alternative.

But let me end on a note of hope:

Rubin group to map Democrats' economic course

Robert Rubin, the former Treasury secretary under President Bill Clinton and the most influential economic adviser to the Democrats, yesterday launched an initiative aimed at influencing the economic policy debate and charting a course "diametrically opposed to the current policy regime".

The Hamilton Project, named after Alexander Hamilton, the first US Treasury secretary, hopes to revive debate on economic policy at a time when Democrats have been accused of lacking a clear strategy.

A white paper co-written by Mr Rubin, who was a central figure in putting deficit reduction at the heart of Mr Clinton's economic agenda, makes concerns about growing income inequality in the US a central tenet of its philosophy.

Citing concerns about the sluggish growth in real median family income - which has been grown at just 1 per cent a year since 1973 - the paper contends that public policy that benefits "a select few will fail to utilise the nation's full potential . . . and risks a backlash that can threaten the very stability of democratic capitalism itself".

(...)

As chairman of the executive committee at Citigroup, Mr Rubin said his corporate colleagues "running big business" were concerned about the imbalances, but "very few will come out and support anything that is in opposition to the current regime . . . the great preponderance are greatly troubled by the same things that trouble us."

The Hamilton Project will be based at the Brookings Institution, a think-tank. It will be run by Peter Orszag, an economist and senior Brookings fellow.

Give support to such efforts by not repeating the talking points of the right, and taking any claims about "growth", or "average incomes" (as opposed to median incomes) with the requisite grain of salt.

(And yes, that includes not making fun of the French who are protesting agaisnt the exact same logic today).

Display:


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 06:20:14 AM EST


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 06:24:52 AM EST
[ Parent ]
Thanks for yours.
The similarities between the two are actually pretty striking!

Do you mind posting this near the top of the dKos thread? This will be worth exploring in a future diary as well.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 06:47:19 AM EST
[ Parent ]
Done... (source and, for fairness, debunking)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 06:55:42 AM EST
[ Parent ]
Economics seems to be all about thermodynamics. Helmholz makes the world go round. Put money on a Joule standard.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 06:59:46 AM EST
[ Parent ]
...showcased, a few weeks ago, an economist who explained bald-faced that any economic bubble that would collapse would not be a problem for the economy of the USA since the top 5% would continue to spend (or be urged to increase spending) and uphold the economy all by themselves. Please carry on, nothing to see.

How quaint.

It's not often I swear at newspapers, but that day... It seems to slot in right with your diary. How concerted is this idea getting pushed, I'm starting to wonder. Or is it all common wisdom coming to the fore by itself?

by Nomad on Thu Apr 6th, 2006 at 06:36:33 AM EST
[ Parent ]
More growth for me!!!

Woot!

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Apr 6th, 2006 at 07:57:00 AM EST
[ Parent ]
You've taken your time, rich guy!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 08:02:44 AM EST
[ Parent ]
Two-hour power lunch, cognac, cigar, you know how it is...
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Apr 6th, 2006 at 08:23:36 AM EST
[ Parent ]
If we had an email for this new think tank, we could send them links to our articles here...maybe I'll try to track something down.

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Thu Apr 6th, 2006 at 06:28:53 AM EST
Bingo: here is the link - The Hamilton project

http://www.hamiltonproject.org/es/hamilton/hamilton_hp.htm

And if you click on the "experts" link, it takes us to a page with names, photos and emails. This would be a little project, but it might be worth making contact and offering our input. What do you all think, worth a try?

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia

by whataboutbob on Thu Apr 6th, 2006 at 06:35:57 AM EST
[ Parent ]
you have been drafted!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 06:47:50 AM EST
[ Parent ]
J, suggest an article or two you think wouuld be best for me to send a link on (or perhaps you could write one that could be used as a summary statement?), and I could start contacting these people. Looking through these experts, many are pretty high-powered folks, and economics is not my area of expertise...so if someone else wants to help me...

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Thu Apr 6th, 2006 at 06:54:37 AM EST
[ Parent ]
Just scanned their white paper. They're about as good as I suppose you can expect from an American think tank, though it would be nice if they mentioned sustainability as well as energy independence.
by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 06:42:36 AM EST
[ Parent ]
Actually, he's probably right: you don't need an equitable distribution to have a sustainable recovery, especially if you're measuring recovery by GDP. There are many configurations of the economy that can lead to a recovery by that measure. The metrics are nonsense.
by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 06:32:45 AM EST
What are we trying to measure, and what would be an appropriate measure? Multiple dimensions allowed. Start with just listing what we'd like to measure:
  1. Labour, capital and resource inputs into the economy [amounts, and prices]
  2. ?


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 06:42:00 AM EST
[ Parent ]
Using the mode of wages at PPP versus the minimum necessary consumption (food, clothing, shelter, energy ... off the top of my head) would be a good start.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Thu Apr 6th, 2006 at 12:45:52 PM EST
[ Parent ]
The mode is always going to be at the bottom end, by Pareto.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 12:57:23 PM EST
[ Parent ]
Can I assert that is a Good Thing without being jumped on?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Thu Apr 6th, 2006 at 01:00:27 PM EST
[ Parent ]
This possibly depends on the definition of sustainable.

Once you limit spending power to a small minority, the economy as a whole has to contract eventually, because most of the liquidity is either sitting in bank accounts doing nothing, or being spent on luxury goods - which in terms of absolute GDP is a relatively trivial  market.

The rich can isolate themselves for a while, but sooner or later the effects inevitably catch up with them.

The problem with today's have-mores is that they'd rather be emperors of a tin shack than share a palace.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Apr 6th, 2006 at 06:50:37 AM EST
[ Parent ]
The rich can isolate themselves for a while, but sooner or later the effects inevitably catch up with them

That "sooner or later" would seem to bear some relation to our discussions re Iron Law, cost of Chinese labour, etc.

Meaning, you can shift the axis of the consumer society up the scale for as long as low-cost labour allows you to flood the mass market with cheap products. <<Look!!!>> : growth without inflation! But if the price of consumer goods starts to rise above the capacity of say, half? two-thirds? of the population to acquire them, presumably the chickens start flying home to roost.

(Or not... What do people think?)

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Apr 6th, 2006 at 08:22:17 AM EST
[ Parent ]
I think you have to share some of your growth, afew. </snark>

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:25:12 AM EST
[ Parent ]
That's basically what is happening in the US.  People are literally eating their homes by borrowing the equity for consumer goods and services because they cannot maintain their "lifestyle" - conspicuous consumption - on their income.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Thu Apr 6th, 2006 at 12:50:25 PM EST
[ Parent ]
Check out this comment from the parallel DKos thread
Interest-only mortgages are becoming the top financing instrument in California.

And then there is this disturbing trend:

"It's a good idea for consumers," said John Marcell, president of the California Association of Mortgage Brokers. "There's nothing wrong with a 50- or 60-year mortgage."
Who wants a 60-year interest-only mortgage?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 01:01:59 PM EST
[ Parent ]
<head explodes>

This just drives me nuts.  I can understand why Mr. Marcell President of the California Association of Mortgage Brokers would think "There's nothing wrong with a 50- or 60-year [interest-only] mortgage."  What I can't understand is why anyone else would take this baloney seriously.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Apr 6th, 2006 at 01:17:50 PM EST
[ Parent ]
That statement did make me jump at first. But it would be nice to see more than this one-liner to know what he really meant by the statement and what he thinks about it.

He's a specialist on a lot of things we talk about here. See Jared Bernstein's bio at the Economic Policy Institute (scroll down).

Of course, he's experienced enough to take care what he says to a journalist and how he ends up getting quoted...

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Apr 6th, 2006 at 08:07:49 AM EST
[ Parent ]
Crossposted (with small adaptations to dKos)
http://www.dailykos.com/story/2006/4/6/64329/03570

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 06:46:17 AM EST
I've always felt that the size of the US economy works against it in times of problem. Like a supertanker, an awful lot of it can hit the iceberg before the guys on the bridge have to notice they're in trouble.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Apr 6th, 2006 at 07:33:27 AM EST
Jesus Christ! This graph is absolutely flabbergasting! http://www.eurotrib.com/files/3/060405_US_non_supervisory_wages_45_05.gif

If I understand it correctly, all income growth in the latest 35 years have gone to the top 20 % earners!

I am (and I say this without any hint of irony) absolutely shocked.

Looking at the numbers of France and Japan makes me glad I don't live in an English speaking country.

Does anyone have a graph shoving average hourly earnings for European countries?

 

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Apr 6th, 2006 at 07:41:06 AM EST
Mostly it's gone to a much smaller %.
by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 07:45:27 AM EST
[ Parent ]


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 08:01:58 AM EST
[ Parent ]
Here are two more charts drawn up by btower. They compare fifths of the distribution and the top 5%. The first begins in 1967, on mean US household earnings, the second in 1980, on growth of those earnings.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Apr 6th, 2006 at 09:55:51 AM EST
[ Parent ]
I think that graph is in serious need of an update (methinks the stock market crash-related contraction of the top 5% has turned around again), and relative growth (income growth/total 1980 resp. 1967 income) should also be displayed.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu Apr 6th, 2006 at 10:13:46 AM EST
[ Parent ]
Anybody got similar graphs for continental EU countries? It would be interesting to see how they look.
by MarekNYC on Thu Apr 6th, 2006 at 02:23:54 PM EST
[ Parent ]
One could argue that reduced equity is acceptable if everyone become richer even if the wealth increase of the rich is bigger than the wealth increase of the average worker.

Peter Singer (or was it John Rawls?) argue like that.

But this graph says that only the rich (in the US) have gotten richer, in spite of immense economic growth!

One could of course argue that is better that only the rich get richer if the alternative is that no one get richer, but when we look at the European countries we see their is another alternative, that is, everyone get richer.

I am just ranting but well that graph just changed  quite a major part of my world view.

Why the Hell have no one told me this before?!

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Apr 6th, 2006 at 08:12:05 AM EST
Why the Hell have no one told me this before?!
For in much wisdom is much grief, and he who increases knoledge increases sorrow.

That's the positive answer. The negative answer is

Ignorance is Strength.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:17:27 AM EST
[ Parent ]
You didn't know this already?
by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 08:18:08 AM EST
[ Parent ]
A raising tide lifts all boats.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:19:04 AM EST
[ Parent ]
Except the ones with holes in them. Or the ones stapled to the ground.

And the people with no boats are screwed.

by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 08:20:28 AM EST
[ Parent ]
Actually, in terms of conceptual metaphors, "economic wealth is like the sea", implies "economic growth is distributed equally".

Trickle-down economics has been sold to people using a redistributionist message. It's only now that they are starting to say "it's ok if the tide doesn't lift all boats", but they're going to have to come up with a different metaphor pretty quick.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:23:37 AM EST
[ Parent ]
No!

And I study fucking economics!

(Though at a very basic level)

Well, if energy policy didn't manage to beat all the remaining neoliberalism out of me, this certainly have.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Apr 6th, 2006 at 08:25:50 AM EST
[ Parent ]
The more the market is unconstrained the more it tends to concentrate wealth.
by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 08:28:09 AM EST
[ Parent ]
It's called the pareto Principle. It's a pervasive property of complex systems.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:30:15 AM EST
[ Parent ]
What do you mean by that? Are you an economics undergraduate?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:28:22 AM EST
[ Parent ]
I haven't really understood how the mechanics of this forum work, but if that question was directed at me the answer is yes. I am an economics and political science undergraduate, second semester.

But well, I don't think one should need to go University to know about that amazing, shocking, graph. It should be  absolutely basic knowledge like knowing what the Soviet Union was or knowing that the Pyramids are in Egypt.

But hey, maybe everyone knows about that graph and I am just retarded. ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Apr 6th, 2006 at 08:48:06 AM EST
[ Parent ]
It's not one that the purveyors current conventional wisdom likes to talk about but it is an inevitable result of setting up a system with minimal redistribution of wealth. Market action tends to reward good luck and punish bad in all sorts of ways: the rich get richer and the poor get poorer.
by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 08:52:13 AM EST
[ Parent ]
The amazing thing about all this is that it's hidden in plain sight in the pages of The Economist, or the OECD statistics, or the FT, or Eurostat... But nobody looks at the data, and when you do, your eyes pop out. I suppose we're all learning new "old news" every day here, because nothing of what we do is original research, we just take stuff from publicly available sources and look at it.

I think we are all in collective denial about the oil shocks of the 1970's and their consequences. I have had a sneaking suspicion since about 1990, but I was just a teenager then, and more interested in physics than in economics. I really think someone should get as many econometric series as possible between 1945 and 2005 and look hard at the before and after the 1970's.

My comment was a direct reply to your comment, so yes, it was directed at you. Anyway, you're likely to find your economics professors are also in denial about what's been going on since 1970.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:56:19 AM EST
[ Parent ]
Hey welcome starvid! As for the forum, well...it is a bit loose...but if you make a comment and the thread below shows it is in response to your original comment, then it is to you.

And there are a lot of people here who are quite knowledgeable about economics (note: I'm not one of them, though I try to understand!), so you found the right place. Look forward to your further comments...and maybe a diary or two? (Like why you think that graph is so important...dive in!!)

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia

by whataboutbob on Thu Apr 6th, 2006 at 08:56:38 AM EST
[ Parent ]
What on earth are you doing on eurotrib if you did not know this before?!

Oh my God, we are not only preaching to the converted! I need to watch out what I say, then...

;-)

Welcome on board, in any case. We hope you'll have insights of your own for us as well!

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 08:23:12 AM EST
[ Parent ]
Thanks, and I hope I will have something intelligent to contribute. Maybe something on the coming Swedish elections in September?

----------

As a matter of fact I found Eurotrib when I was out looking for stuff on nuclear power I could to bash leftists and so called "environmentalists" (coal huggers) with, and found your diary on nuclear power in France.

But now...

Must... not... become... commie... ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Apr 6th, 2006 at 08:40:14 AM EST
[ Parent ]
You are our last best hope to obtain a positive score on the political compass!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:44:39 AM EST
[ Parent ]
I am afraid not. I got:

Economic Left/Right: -0.75
Social Libertarian/Authoritarian: -1.38

But I think that is quite absurd. I should be a lot more to the right than people like Gerhard Schröder and sometimes I feel more authoritarian than Ariel Sharon.

I must have been dragged down to the left by all those pro-sex anti-religion answers. ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Apr 6th, 2006 at 08:57:40 AM EST
[ Parent ]
Down maybe, but not to the left...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 09:07:47 AM EST
[ Parent ]
We've sort of had this discussion before: left-right is often phrased in terms of methods rather than outcomes, while that test is somewhat outcome focused. Does your reaction to the graph above indicate someone who's committed to right-wing outcomes?
by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 09:10:01 AM EST
[ Parent ]
Someone joked that Fran should have a couple of points of handicap on the vertical axis on account of being Swiss. Maybe the Swedes have a similar handicap on the left-right axis. </snark>

Hopefully I'm not getting Sweden and Switzerland mixed up again. </snark type="dubya">

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 09:12:46 AM EST
[ Parent ]
But I think that is quite absurd. I should be a lot more to the right than people like Gerhard Schröder and sometimes I feel more authoritarian than Ariel Sharon.

I think multiple factors can be behind this:

  • In Social Democrat dominated Sweden, being right-wing is being rebellious and chic.

  • What's rebellious and chic is often a bit unserious: it is strong on theory and idealising what right-wing role models are doing in practice elsewhere.

  • You may not recognise how right-wing in practice Schröder is and has governed from reading the international press.

  • In fact you may not realise how often your own Swedish Social Democrats veered off leftist principles, if relying on a combination of their Swedish right-wing caricature and their own media image (which can be wrong simultaneously).


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu Apr 6th, 2006 at 10:24:02 AM EST
[ Parent ]
How about Sweden's pledge to become oil-free in 20 years?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 08:45:22 AM EST
[ Parent ]
Well, it's a very interesting issue. Mostly hot air though.

For one, the people at the top know all about peak oil. They have even held public televised multi-hour seminars (available on the web) on the issue, with the prime minister presiding. And they have created an expert group called literally "The commission against oil addiction".

The Royal Academy (the people who hand out the Nobel awards) has written a report on peak oil etc.

So, they sure know about it.

But when you look in the fine print Sweden has not pledged to become oil free in 20 years. What the government has pledged is that no one should solely have to rely on oil in 20 years. That is not a very tough target to reach, because it is already reached.

No one needs to heat their house with oil (use electricity, biofuels, heat pumps, direct solar or district heating) and no needs to use oil in their cars (use ethanol).

That there is not enough ethanol for everyone is ignored.

So basically, the socialist politicians know all about peak oil and they are doing nothing about it. How nice.

Yeah, and they just decided to build a new giant highway in Stockholm. When do we get our TGV's?!

To further make matters worse the minister of Energy, Mona Sahlin, is incredibly incompetent. She was laughed at by the entire world at an energy summit in Paris a few years ago.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Apr 6th, 2006 at 09:18:12 AM EST
[ Parent ]
In fact, well-off families, not cash- strapped ones, have been the ones increasing their borrowing and cutting their savings the most in recent years, according to the Federal Reserve Board.

There has been debate between Izzy and others whether the US consumer debt spiral is due to careless consumption or lower-middle-class and working-class families falling ever deeper into a debt trap. From the above, it would seem poorer families are in the debt trap, but it is the richer ones who really went on a consumption binge.

Izzy, how do you see it?

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Apr 6th, 2006 at 10:10:27 AM EST
guys like him are the reason the Democrats don't win in the US: they don't speak about the real causes of the economic woes of the midle classes

Pardon me for another comment from the red corner, but this Democrat focus on middle classes, this we-are-the-country middle-class consciousness always bothered me. As if there were no people to care for below the middle classes.

This was bad enough even while in the Cold War years the latter were a small minority, but presently they are expanding. Especially what could be termed the service class: the new working poor who mostly don't even have a practical chance at unionising like the working class in the 19th century.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Apr 6th, 2006 at 10:31:42 AM EST
Fair enough.

The point is that the Dems have abandoned even the middle classes, let alone the poorest.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Apr 6th, 2006 at 11:12:30 AM EST
[ Parent ]
OK, and I should have stated I don't doubt that you don't just care about the middle classes!

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu Apr 6th, 2006 at 11:41:46 AM EST
[ Parent ]
Robert Rubin, the former Treasury secretary under President Bill Clinton and the most influential economic adviser to the Democrats, yesterday launched an initiative aimed at influencing the economic policy debate and charting a course "diametrically opposed to the current policy regime".

Diametrically opposed is a bit strong... Rubin sang different tunes when Clinton became President, he was a co-father of the late nineties financial bubble, he was at the helm of the IMF/World Bank/WTO-pushed neoliberal revolution in the nineties, and still favors cutting social benefits, and dereg. He wants a nicer neoliberalism (a tide in which all ships are rising), not an end to it. That he was in Kerry's team was one of the reasons Kerry was no hope for me.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Apr 6th, 2006 at 10:54:16 AM EST
The more I read of their stuff the less impressed I am.

They're better than the Bush crowd but still not good.

by Colman (colman at eurotrib.com) on Thu Apr 6th, 2006 at 10:56:36 AM EST
[ Parent ]
Rubin, et. al., think if you take the chairs from deck B and put them on deck A the Titantic won't sink.  The CW economic narrative is completely broken as it is plain wrong.

But I am yclept a dirty rotten no-good Pinko-Commie-Bolshevik-from-Redsville-on-the-Volga so YMMV.


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Apr 6th, 2006 at 12:58:28 PM EST
[ Parent ]
the Soviet Union enjoyed decades of growth not thanks to the middle class, but by systematically destroying the middle class? Stalin already proved during the early part of the last century that Fordism is not the only way to growth. There is nothing new in a short-term growth with or without widening income inequality.

I am increasingly troubled by the casual talk of this "new century," be it terrorism, economy, or anything else. The horde of pundits and media seem to have fallen into intellectual laziness in which they don't even bother to open a history book, living in a convenient illusion that we have "overcome" the past.

I will become a patissier, God willing.

by tuasfait on Thu Apr 6th, 2006 at 12:03:34 PM EST
History books? Didn't you know history ended? </snark>

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Apr 6th, 2006 at 12:05:08 PM EST
[ Parent ]
the Soviet Union enjoyed decades of growth not thanks to the middle class, but by systematically destroying the middle class? Stalin already proved during the early part of the last century that Fordism is not the only way to growth.

and the lower classes as well. Squeeze the peasants to the point of starvation. When confronted with workers moving from place to place en masse in search of higher wages and better conditions in the first Five Year Plan, ban worker mobility by legally tying them to their place of work.  Though actually depending how you look at it some of the middle classes did reasonably well - that is the new middle class which replaced the old one and those experts and apparatchiks who managed to survive.

by MarekNYC on Thu Apr 6th, 2006 at 01:40:00 PM EST
[ Parent ]
Hat off.

I will become a patissier, God willing.
by tuasfait on Thu Apr 6th, 2006 at 02:49:45 PM EST
[ Parent ]
I was struck by that quote as well. The question is what he meant by it. If it is simply that you can have steady economic growth that provides no benefit to most of the population, then that seems pretty neutral. If he means it is something that should be accepted then your outrage is perfectly justified.
by MarekNYC on Thu Apr 6th, 2006 at 01:57:29 PM EST


Display:
Go to: [ European Tribune Homepage : Top of page : Top of comments ]

Top Diaries