How would you fund the Marshall Plan? Isn’t the problem that Govs & central banks have been trying their version of a Marshall plan since 2008 but it’s way beyond the point of diminishing returns & now every new round of QE is making the economy worse? I agree with most of what you write but I think William White’s comments on a modular economy are even more valuable than his thoughts on private debt. Western economies are close-coupled, geographically specialised & centrally controlled by finance-supporting central banks. Ricardian comparative advantage might be ok if countries can control their basic critical infrastructure & have economic sovereignty but privatisation swept that all away. So now we have countries operating a fake model: democracy, elected govts, taxation to fund services etc; In fact, democracy doesn’t exist - sovereign govs can’t even control their own societal infrastructure because it’s been sold off to foreign capital or is subject to the trade agreements that favour capital over citizens. They can’t raise money to fund investment because capital markets say: ‘nope. Either crush labour & privatise more or we’re skipping off elsewhere’. And they can’t raise taxes because capital backed populists come along & say: this is a post tax world. Taxes make you poorer. We can just run deficits & keep piling on debt so long as we stick to the plan - fake democracy, depressed wages, central banks that backstop capital. Clearly the whole thing is no longer sustainable. But how do we avoid a collapse & build something better? For me, the modular economy is critical. Bottom up national economies are the start. Core infrastructure & services owned nationally - not necessarily nationalised but owned by citizens of a country. Shelter & help for small or growing businesses & international competition for big businesses. Capital - and this is the big bit - kept in sovereign nations not spirited off into SPVs, holding cos & tax havens. I don’t mind Amazon offering cheap goods in my country (UK) if it follows our labour laws, pays taxes on revenue transacted here & receives its income through British banks. Sovereign nations should get back to running their own economies in their own way & trading their surplus according to international rules. The IMF & WTO should get back to disciplining surplus countries & rebuilding crisis hit countries instead of the opposite. We all traded sovereignty for global connectedness when the Soviets were marching through Europe. But we failed to see that it was making our system fragile & open to exploitation by a bigger force than the Soviets - the Western oligarchs. I’m not sure pouring more fiat money into this world will do a damn thing until we can stop it leaking into the pockets of global capital.
I'm not a financial expert at all -- just two other things that come to mind -- one is medical expenses -- Covid made a lot of people very sick, of course many died, some after very lengthy stays in ICUs. That is phenomenally expensive, even with insurance. How did that impact budgets, and people's ability to pay their mortgages? Second, homeowners insurance rates have skyrocketed, and many people across the country have had their homes damaged or destroyed due to various weather events. How have those expenses impacted people's ability to keep up with their monthly payments? I would think that for many people one or both of those could be the last straw.
This is pretty much the same thing I said in another post under Mark Mansour as to why the Democrats lost. But in a shortened version. Basically what you are talking about is Keyesian economics which Democrats are for when u r talking about a Marshall Plan. The problem is and will continue to be are Conseratives. They honestly believe that programs that help working class people are for free loaders. They vote against them in Congress all the time. The main thing the Democrats need to do is EDUCATE THE PUBLIC ON HOW GOVERNMENT AND THE ECONOMY WORKS .
Yes, agreed. It's all about economics and how many were convinced that Trump would improve their economic situation. Of course economics are globally influenced and neoclassical economics has been at play since Regan/Thatcher/Mulroney. Fewer controls, more monopolies, greed-flation; PE devoid of anything but greed; the commodification of housing as a result. Nothing trickles down. Unfortunately, tariffs tend to increase prices which will be felt by citizens - actually decreasing buying power.
There's a particular assumption baked in your post that I think needs to be examined.
The assumption is that standards of living have to increase generation after generation, regardless of what kind of value added you can provide.
Men in the West have turned their backs on learning skills that the job market values. There's no earthly reason why they ought to have social status and life above bare subsistence if they have don't provide a utility surplus for other people / the employer.
There IS, of course, the real politik reason: if you don't give net negative value men the option to feel superior to others, they'll vote in a strongman who'll give them a leg up.
With respect, that is not the case, on multiple levels.
One of the reasons for increasing living standards has been improvements in technology, which drive productivity, because one person can now do the work of many. These changes - as well a changes in trade, competition, financial crises, displace workers whether they are valuable or not. There are people who could be doing productive work, who are qualified, and the work is needed, but are not doing the job because of what are political and ideological reasons.
The other is that as these workers' incomes have stagnated, what their owners have been paid, or have been paying themselves, has soared. So workers have actually been generating more and more value, but it is being captured at the top.
There was a massive shock to the U.S. and the world when China entered the WTO. Countries all around the world lost manufacturing capacity, as executives transferred capital and manufacturing overseas. The local workers lost out, while the executives massively increased their pay. It was not because the local workers couldn't do their jobs, it's that it was now possible to get people in another country to do exactly the same job, at a much lower price, because the cost of "overhead" for those workers in the other country is a fraction of the cost. The wealth that is associated with a "developed nation" is a form of economic overhead.
In the 1800s, Europe could not compete with the U.S. in part because the U.S. was giving away free land to settlers, as were Canada and other colonies. The "old world" was struggling to compete because their costs were higher, because of the cost of the rentiers - aristocrats - who "make money in their sleep" from owning, not working.
These workers cannot compete, not because of a lack of skills, but because the economic overhead of the entire country - the cost of housing and mortgages and debt - is higher. This is especially the case for housing, which developed countries have used to inflate their economies, investing in non-productive housing instead of industrial production.
When housing costs increase, workers need a certain wage to be able to put a roof over their heads. The high cost of housing and of the financial sector in general have undermined workers and the "real economy" by replacing "industrial capitalism" with financial capitalism.
These are social and political arrangements. They can be changed. But they are treated as the one true religion, which they are not.
A very thoughtful answer, thank you! But I don't think it speaks to my point.
There is no cosmic law that states that generation after generation, living standards MUST be higher. A thought experiment. Let us imagine that billions of years from now, something like a sentient species lives on Earth, and they've evolved to have technology, but they aren't capable of space travel. The Sun goes nova, and no-one has a positive quality of life any more.
So there is no logical necessity or a cosmic law that prevents our lifetime utlity, or even aggregate utility on national level or global level, from decreasing, even permanently.
That thought experiment is a distant one, but it proves the point: in certain circumstances, some creatures will just have to accept a lifetime total utility less than their parents had. For humans who can't learn skills that are in demand, those circumstances are pretty often around, and for those males who don't like book learning... well, there's trades. It's honest work and you can make good money.
I think it was JB Peterson who almost cried over the question of what to do with men whose intelligence means even armed forces can't turn them into productive workers. And that, in some ways, technological progress means the minimum ingelligence required to be competitive in the job market seemed to be rising. Add to that the lower male propensity to show up and put in the work, and it's not looking great for making in the professional job market. I'm something of a social democrat, having been born and raised in Finland, so I think it's the least we ought to do to provide charity for these people, women or men.
But we also shame those who don't work, and I think that's a bitter pill for many men. The solution cannot be to hand the bitter dum dums the power to wreck societies.
I wish it was so simple. The reason Trump won is because the Democrats lost and that continued in both the House and Senate. Sending hundreds of billions to Ukraine and Israel while millions of Americans lost everything to disasters, watched massive explosions of dangerous chemicals in train wrecks and fires, a declining healthcare system, extreme inflation, growing homelessness all while being lied to and hiding the horrors of a genocide were major contributors. To add insult to injury the Democrats used fear mongering to put demons under the voter’s bed to manipulate them into ignoring the reality of what has been done to them! The economy is small compared to the deceit and destruction of democracy, education, healthcare, a steady stream of food recalls and a government that neither listens nor cares about the people. The efforts to impose censorship against the only sources we have to see the truth of what’s happening in the world made it easy to want this mob out!
The point I made in my piece was that a fair chunk of inflation was deliberately caused by oil companies - who are overwhelmingly backing Trump.
But the point I will always make is that economic distress is something that is damaging in ways that people do not recognize, and there is a fundamental problem - a genuine problem - in that the economics we use is an economics from the point of view of shareholders.
People are not willing to talk about it, because it really can be a confession of weakness or vulnerability.
I agree there are other reasons why people might feel disappointment or moral outrage, but I will say this. While there are undoubtedly people who did not want to vote Democrat for the reasons you cite, the reason I cite inflation and debt is that that is something that is undoubtedly affecting millions of Americans and communities in ways that are not recognized.
You think Americans are unfamiliar with his greed and buffoonery? The argument that if you don’t like Harris you must love Trump is so incredibly misguided.
At no time did I mention or defend Trump. As it has been for every US election in decades, two lousy choices were put on the ballot. Sadly the majority of voters buy into the media manipulation of thinking we only have two choices despite nearly every state has at least 8 names available and a write-in option.
I don’t subscribe to either cult. Trump isn’t the topic of the article nor is he part of my original comment.
How would you fund the Marshall Plan? Isn’t the problem that Govs & central banks have been trying their version of a Marshall plan since 2008 but it’s way beyond the point of diminishing returns & now every new round of QE is making the economy worse? I agree with most of what you write but I think William White’s comments on a modular economy are even more valuable than his thoughts on private debt. Western economies are close-coupled, geographically specialised & centrally controlled by finance-supporting central banks. Ricardian comparative advantage might be ok if countries can control their basic critical infrastructure & have economic sovereignty but privatisation swept that all away. So now we have countries operating a fake model: democracy, elected govts, taxation to fund services etc; In fact, democracy doesn’t exist - sovereign govs can’t even control their own societal infrastructure because it’s been sold off to foreign capital or is subject to the trade agreements that favour capital over citizens. They can’t raise money to fund investment because capital markets say: ‘nope. Either crush labour & privatise more or we’re skipping off elsewhere’. And they can’t raise taxes because capital backed populists come along & say: this is a post tax world. Taxes make you poorer. We can just run deficits & keep piling on debt so long as we stick to the plan - fake democracy, depressed wages, central banks that backstop capital. Clearly the whole thing is no longer sustainable. But how do we avoid a collapse & build something better? For me, the modular economy is critical. Bottom up national economies are the start. Core infrastructure & services owned nationally - not necessarily nationalised but owned by citizens of a country. Shelter & help for small or growing businesses & international competition for big businesses. Capital - and this is the big bit - kept in sovereign nations not spirited off into SPVs, holding cos & tax havens. I don’t mind Amazon offering cheap goods in my country (UK) if it follows our labour laws, pays taxes on revenue transacted here & receives its income through British banks. Sovereign nations should get back to running their own economies in their own way & trading their surplus according to international rules. The IMF & WTO should get back to disciplining surplus countries & rebuilding crisis hit countries instead of the opposite. We all traded sovereignty for global connectedness when the Soviets were marching through Europe. But we failed to see that it was making our system fragile & open to exploitation by a bigger force than the Soviets - the Western oligarchs. I’m not sure pouring more fiat money into this world will do a damn thing until we can stop it leaking into the pockets of global capital.
You make lots of excellent points. What's required is a "people's QE" because actual QE does not go into the economy, it goes into bank reserves.
You can read my analysis of it here.
https://dougaldlamont.substack.com/p/quantitative-easing-has-broken-economics
I'm not a financial expert at all -- just two other things that come to mind -- one is medical expenses -- Covid made a lot of people very sick, of course many died, some after very lengthy stays in ICUs. That is phenomenally expensive, even with insurance. How did that impact budgets, and people's ability to pay their mortgages? Second, homeowners insurance rates have skyrocketed, and many people across the country have had their homes damaged or destroyed due to various weather events. How have those expenses impacted people's ability to keep up with their monthly payments? I would think that for many people one or both of those could be the last straw.
So... Right wing disaster is rewarded with mire right wing disaster..
No wonder encumbants always lose.
This is pretty much the same thing I said in another post under Mark Mansour as to why the Democrats lost. But in a shortened version. Basically what you are talking about is Keyesian economics which Democrats are for when u r talking about a Marshall Plan. The problem is and will continue to be are Conseratives. They honestly believe that programs that help working class people are for free loaders. They vote against them in Congress all the time. The main thing the Democrats need to do is EDUCATE THE PUBLIC ON HOW GOVERNMENT AND THE ECONOMY WORKS .
Yes, agreed. It's all about economics and how many were convinced that Trump would improve their economic situation. Of course economics are globally influenced and neoclassical economics has been at play since Regan/Thatcher/Mulroney. Fewer controls, more monopolies, greed-flation; PE devoid of anything but greed; the commodification of housing as a result. Nothing trickles down. Unfortunately, tariffs tend to increase prices which will be felt by citizens - actually decreasing buying power.
There's a particular assumption baked in your post that I think needs to be examined.
The assumption is that standards of living have to increase generation after generation, regardless of what kind of value added you can provide.
Men in the West have turned their backs on learning skills that the job market values. There's no earthly reason why they ought to have social status and life above bare subsistence if they have don't provide a utility surplus for other people / the employer.
There IS, of course, the real politik reason: if you don't give net negative value men the option to feel superior to others, they'll vote in a strongman who'll give them a leg up.
With respect, that is not the case, on multiple levels.
One of the reasons for increasing living standards has been improvements in technology, which drive productivity, because one person can now do the work of many. These changes - as well a changes in trade, competition, financial crises, displace workers whether they are valuable or not. There are people who could be doing productive work, who are qualified, and the work is needed, but are not doing the job because of what are political and ideological reasons.
The other is that as these workers' incomes have stagnated, what their owners have been paid, or have been paying themselves, has soared. So workers have actually been generating more and more value, but it is being captured at the top.
There was a massive shock to the U.S. and the world when China entered the WTO. Countries all around the world lost manufacturing capacity, as executives transferred capital and manufacturing overseas. The local workers lost out, while the executives massively increased their pay. It was not because the local workers couldn't do their jobs, it's that it was now possible to get people in another country to do exactly the same job, at a much lower price, because the cost of "overhead" for those workers in the other country is a fraction of the cost. The wealth that is associated with a "developed nation" is a form of economic overhead.
In the 1800s, Europe could not compete with the U.S. in part because the U.S. was giving away free land to settlers, as were Canada and other colonies. The "old world" was struggling to compete because their costs were higher, because of the cost of the rentiers - aristocrats - who "make money in their sleep" from owning, not working.
These workers cannot compete, not because of a lack of skills, but because the economic overhead of the entire country - the cost of housing and mortgages and debt - is higher. This is especially the case for housing, which developed countries have used to inflate their economies, investing in non-productive housing instead of industrial production.
When housing costs increase, workers need a certain wage to be able to put a roof over their heads. The high cost of housing and of the financial sector in general have undermined workers and the "real economy" by replacing "industrial capitalism" with financial capitalism.
These are social and political arrangements. They can be changed. But they are treated as the one true religion, which they are not.
A very thoughtful answer, thank you! But I don't think it speaks to my point.
There is no cosmic law that states that generation after generation, living standards MUST be higher. A thought experiment. Let us imagine that billions of years from now, something like a sentient species lives on Earth, and they've evolved to have technology, but they aren't capable of space travel. The Sun goes nova, and no-one has a positive quality of life any more.
So there is no logical necessity or a cosmic law that prevents our lifetime utlity, or even aggregate utility on national level or global level, from decreasing, even permanently.
That thought experiment is a distant one, but it proves the point: in certain circumstances, some creatures will just have to accept a lifetime total utility less than their parents had. For humans who can't learn skills that are in demand, those circumstances are pretty often around, and for those males who don't like book learning... well, there's trades. It's honest work and you can make good money.
I think it was JB Peterson who almost cried over the question of what to do with men whose intelligence means even armed forces can't turn them into productive workers. And that, in some ways, technological progress means the minimum ingelligence required to be competitive in the job market seemed to be rising. Add to that the lower male propensity to show up and put in the work, and it's not looking great for making in the professional job market. I'm something of a social democrat, having been born and raised in Finland, so I think it's the least we ought to do to provide charity for these people, women or men.
But we also shame those who don't work, and I think that's a bitter pill for many men. The solution cannot be to hand the bitter dum dums the power to wreck societies.
I wish it was so simple. The reason Trump won is because the Democrats lost and that continued in both the House and Senate. Sending hundreds of billions to Ukraine and Israel while millions of Americans lost everything to disasters, watched massive explosions of dangerous chemicals in train wrecks and fires, a declining healthcare system, extreme inflation, growing homelessness all while being lied to and hiding the horrors of a genocide were major contributors. To add insult to injury the Democrats used fear mongering to put demons under the voter’s bed to manipulate them into ignoring the reality of what has been done to them! The economy is small compared to the deceit and destruction of democracy, education, healthcare, a steady stream of food recalls and a government that neither listens nor cares about the people. The efforts to impose censorship against the only sources we have to see the truth of what’s happening in the world made it easy to want this mob out!
The point I made in my piece was that a fair chunk of inflation was deliberately caused by oil companies - who are overwhelmingly backing Trump.
But the point I will always make is that economic distress is something that is damaging in ways that people do not recognize, and there is a fundamental problem - a genuine problem - in that the economics we use is an economics from the point of view of shareholders.
People are not willing to talk about it, because it really can be a confession of weakness or vulnerability.
I agree there are other reasons why people might feel disappointment or moral outrage, but I will say this. While there are undoubtedly people who did not want to vote Democrat for the reasons you cite, the reason I cite inflation and debt is that that is something that is undoubtedly affecting millions of Americans and communities in ways that are not recognized.
You ain't seen nothing yet.
You think Americans are unfamiliar with his greed and buffoonery? The argument that if you don’t like Harris you must love Trump is so incredibly misguided.
They billions to Ukraine go to US arms manufacturers.
There's a reason Trump loves the poorly educated.
At no time did I mention or defend Trump. As it has been for every US election in decades, two lousy choices were put on the ballot. Sadly the majority of voters buy into the media manipulation of thinking we only have two choices despite nearly every state has at least 8 names available and a write-in option.
I don’t subscribe to either cult. Trump isn’t the topic of the article nor is he part of my original comment.