Stagflation was a catchy way to describe the economics of the Vietnam war West:
Stagflation, a portmanteau of stagnation and inflation, is a term used in economics to describe a situation where an inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high....
... In the version of Keynesian macroeconomic theory which was dominant between the end of WWII and the late-1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by the Phillips curve....
The end of this period, around the time of the Zero-sum Society [1], is conventionally ascribed to Volcker's US rate increases @1980 that increased unemployment and supposedly controlled inflation. [3]
We don't have stagflation in year 13 of the Forever War and year 16 of the Bubble era. Instead the US has "The Great Stagnation" (Cowen version) or "Secular Stagnation" [2] -- a time of low inflation/deflation, "free money" that's fueling corporate acquisitions and mega-growth, neo-Feudalism, recurrent Bubbles, and, of course, mass disability and the related return of the Basic Income movement. All, I personally believe, arising because our economic structures can't respond quickly enough to the rise of China, India and information technology. We've fallen off the exponential curve [3].
Now the people who have been mostly right over the past five years are saying we need to embrace the Bubble. Another analogy, one I prefer, is to that we can't get out of the whitewater, we have to shoot the rapids.
Which is kind of desperate advice, since there could be a waterfall down this river. It's easy to invent policy alternatives, but hard to imagine how today's democracies can implement them.
- fn -
[1] "... Thurow proposes that the American economy will not solve its most trenchant problems-inflation, slow economic growth, the environment-until the political economy can support, in theory and in practice, the idea that certain members of society will have to bear the brunt of taxation and other government-sponsored economic actions"
[2] Krugman - stagnation "of or relating to a long term of indefinite duration”
[3] Around the time the IT world began.
No comments:
Post a Comment