Friday, June 17, 2016

The Economy

The US Economy

The US economy is doing fine. Financial crashes take longer to recover from, than cyclical recessions. The faster 1980's recovery was not preceded by a financial crash.

We have had the longest consecutive months of job growth in history, with both unemployment and underemployment about 1/2 than before the recovery began. And inflation is contained, while energy costs and borrowing costs are at bargain levels. And wages are starting to increase. We have the world's best economy.

As for presidential candidates blaming trade deals for less well-paying jobs, they are wrong. We are in the middle of the latest industrial revolution, brought on by globalization and technology. It's called progress.

There are plenty of high-paying jobs available, plus, part of this new industrial revolution is an Enterpreneurial Age. Other than professional jobs (doctors, lawyers, even blue collar ones like electricians, etc), starting/investing in businesses is now easier and more lucrative than ever.

Plus, government sponsored infrastructure jobs, with interest rates at historically low interest rates, are an easy way to good jobs and affordable higher education.

As for the "disappearing middle class," that is just misreading economic history. 1950-1970 was an aberration, the result of post ww2 industrial world hegemony.

1970-mid 1980s was both a readjustment of our industry brought on by Japan beating us with manufacturing. Plus, inflation brought on mostly by the 1973 Arab oil embargo.

1990-present started the new Renaissance, the end of the Cold War, globalization and the digital revolution, together meant a growing world prosperity, but our middle class struggling because of foreign competition. Meanwhile, higher wage people in the US grew from about 14% in 1971 to 21%, resulting in record income inequality.

But, with rising wages, ACA, and improving education (Common Core, expanding community colleges, and online learning including MOOCs, and election of the right president, it is reasonable that a new US middle class will emerge.