I'm not sure how old New York Times is, but i'm pretty sure it's old enough that it should've probably discovered that capitalism exists sometime before the year of our lord 2019
6
Increasing the taxes on the wealthy and increasing the inheritance, on the one hand. On the other hand, improving our schools and training programs. This should increase productivity and narrow the income gap.
I'm appalled by the flagrantly ageist assumptions tantamount to discrimination used to describe the growing work force that must work later and later into their 60's and soon into their 70's.
People are living longer but at earlier and earlier ages they are being pushed out of careers altogether and out of jobs that allow one to earn more than a paycheck to paycheck subsistence.
This has nothing to do with productivity which older workers have a fine reputation for. No, it's more about discriminatory assumptions like those in this articles employers use to fire experienced employees who deserve higher pay when they can get the job done less well but cheaply enough to compensate for the quality drop.
I have had countless jobs since the Great Recession through out my 50's never finding one that would hire on the more reliable older workers, been on interviews to teach at the university level in my field only to find I got the interview only to satisfy the appearance not being ageist in their process.
We WANT to learn more tech. The tech environment is more adamantly opposed to older people than is well documented discrimination of women. The tech world is dominated by a culture of self-centered, intolerant males who feel no need to reach out to anyone who is not like them. It only takes trying to take a coding class to find the tech industry won't make even the show of trying to bridge social and cultural openness to women and older people.
I was amused by the comment that training good workers who are close to retirement might not be worth the cost. It is my experience and opinion that coporate america has lost interest in training any of their employees even ones with the proper background and skills to be trained. They would rather higher people with the specific skills they need so they can "hit the ground running". In my long engineering career, I never stopped learning new skills. Engineering school did not teach me how to do a specific job but rather gave me a broad background of knowledge that I could apply to any number of jobs. In these days of low unemployment I see constant complaints about companies not being able to find people with the skills they need but I see nothing about companies offering training programs for people, young and old, who are willing to learn new skills. When I graduated, there were no desktop computers, cell phones, GPS, or internet. These were all things I learned to use as they came along. The same is still true today.
13
Lower interest rates for whom? Not for college students. Not for those who need pay day loans. And GDP is a terrible metric by which to assess how the economy is doing. Add Bezos' billions to the pitiful salary of your average Walmart worker, divide by 2, and presto! A GDP of over $35 billion! In the 1980's, Bush Sr. used to talk about the "new world order." I used to think he meant political order, but I've come to believe he meant the global billionaire cabal that seems bent on destroying unions, pensions, education and social safety nets, while shifting labor to the cheapest third world country, and undermining democracy through various voter suppression techniques, wedge issues such as immigration, religion and abortion, and their overall refusal to pay taxes. Yes, there is a spider's web. It starts at Davos and ends at CPAC.
11
Access to credit and credit worthiness are as important to businesses of all sizes than the actual level of interest rates. For that matter, what a business does with a loan is far more important than the actual interest rate. It's just not so simple that interest rate levels per se reward all large businesses and penalizes all small businesses.
2
This article made me think that the problem with affordable housing falls under the same problem. If interest rate for mortgages are low many people want to buy properties, inventory decreases and prices for properties go up! What would happened if rates go up and fewer people can buy, and inventory goes up; would it force developers to build more affordable housing in order to get people to start buying again?
Things that make you wonder.
3
Many good points - one missing. Government, it's size and the impact of its dead hand. Using, for example, 1960 as a reference point, imagine for a minute, the volume growth in the tax code and regulations in general. There are always good and bad rules and regulations, but just how much effort is expended each and every year just to make sure a potential business isn't running up against one or another government requirement or toll on productivity? I can't help but think that GDP growth is like Gulliver, trying as hard as it can, but falling a little bit shorter each decade.
2
With all due respect, I dispute this:
"No one disputes that the aging of the current work force is reducing growth rates."
The aging work force is the most productive segment because they possess perspective. Younger, inexperienced workers are by their nature still growing and hopefully will oneday have the perspective which comes with age. Until then we have to train them and pass along our wisdom. Thank you for being a bold journalist and writing on this topic.
3
Please read Harry Dent’s The Great Boom Ahead. It sheds light on the role of demographics. You see the results in Japan and Europe. With the United States not far behind.
1
The problem? Unchecked greed.
Greed is the driving engine of the current economic model. There were some counter measures against the beast, like high tax, strong union...
Those are gone. The Greed win. That is the single source of the problem.
Excessive greed is against nature. It is not going to last.
5
Yes, there are problems exacerbated now in 2019 with deindustrialization, the rise of tech and finance, and more wealth inequality.
However, egregious political and military decisions made things worse. A bad response to 9/11 -> Iraq War -> middle east instability -> collateralized debt obligations -> big recession -> domestic strife -> Trump
A constant state of war leaves society in a reactive state, not a rational one. Trump is not a rational actor, and things could get much worse.
The economists from 2000 could not fathom our nation because of a state of general global belligerence in which America has been diminished. Economists from 1960 would say that we are afflicted by a collective derangement in which productivity is not shared, progressive measures abandoned, and inequity patent.
We used to be the society of Bell Labs, Stanford Research, MIT, Cal Tech, etc. Now we are a hustler society led by a guy who does branding, real estate, golf courses, and casinos.
Economists from the past would say we are nuts. Contemporary denizens are whistling past the graveyard.
3
I agree with OSS Architect; older workers are escorted into a self-fulfilling prophecy. They are given low-visibility tedious work and denied training, eventually being told their jobs have been eliminated and their current skills do not match any open jobs.
Productive workers make up 5% of any company regardless of age. If you are not productive in your 20’s you will remain so and vice versa.
Workers, beginning around 2000, were written off and stricken from companies at age 50. This was for a number of factors which became the standard with the recession after the NASDAQ crash. Lower the average age and you increase productivity at a lower cost was the HR mantra.
I reentered the IT workforce about 14 years ago based on my former skills at half the salary. After eight years I moved to a new company which was recently purchased by a third. In 14 years I have received no training or promotions yet I am self-taught, knowledgeable, highly skilled and sought after by coworkers and customers. Many optimally aged coworkers have come and gone, some fired or laid off. I outrank many of my coworkers in longevity.
Recently I was asked how long I expected to work. Tom Brady is asked the same question everyday. Yet for 95% who were ever a starting NFL QB, Brady’s worst season would have been their career best. Sounds like harassment and age discrimination.
So, Neil Irwin, what is the magic algorithm that predicts when the promise of productivity turns to washed-up.
3
There seems to be a paradox..in saying that low interest rate
causes income inequality, since low rate does promote more
investment and increased output,surely in developing economies.
As regards developed economies ,also gain from low rates to
begin with, and quantity easing practiced in wake of 2008 subprime mortgage lending, saved the economy from disaster.
Question of income inequality between employer and employees
is part of the game and also socio-political philosophy of a country.An employer is risk bearer,envisions the business,and
undertakes all measures to succeed in competitive environment.
His ever increasing income leaves to higher savings and lower
interest rate enthuse him to more investments and challenge
competitors.His hunger is to go up and maintain top positions
on Billioneers' list.Low interest rates promote growth on the whole and not a curse for income inequality.
1
Having just read this article, it only proves the point I made in the article about ECB reinstituting zero interest loans on March 7. All things being equal, someone who has more money is always going to be able to leverage loans more than someone with less. This is why ultralow interest rates will continue to distort the global and all local economies. The rich get richer, allowing them to buy everything that comes for sale in sight and they can hold onto them forever. This has been going on for the last 10 years. Wake up people! Everything is way too expensive because of this massive expansion of credit. the ‘buy now or be priced out forever’ mantra is only true because, under these distorted tactics, it WILL continue. Powell was doing the right thing until he got spooked from someone or some entity. We’ll never know but I suspect he was under enormous pressure not to break the rich people’s game.
2
If it could, Silicon Valley would only staff it's businesses with 25-35 year old engineers. Past 35 your "shelf life" makes you a target in every re-org, or downsizing, or re-focusing of the business.
I've had a 40 year career in computer science, but that is only because I go home at night and learn new programming languages, software tools, and the latest state of the art design of software systems. I can only do this because we didn't have children and my wife is similarly driven engineer.
I've watched fellow engineers in their 50's drop dead in their cubicals, and the people my age still employed in Tech remain there because they constantly re-train on their own time.
Productivity is not unlimited. It's asymptotic, and at some point you just max out on what a single individual can do in a life time. There is a possibility of residual productivity gains through cooperation, but that is a tough sell in a competitive work environment.
6
Much of the worlds problems stem from lack of common sense Greed and corrupt governments. And that is systemic.
1
The rich don't "tend to save money rather than spend it," they HOARD it! Warren Buffett and Marie Kondo need to stage some major interventions with the world's bajjionaires: does concentrating all that wealth really "spark joy" in your greedy little hearts?
3
@Tim - Although I can understand the feeling, wealthy save more because they can, and even then, there is only so much anyone would or could spend. This last piece is also why taxing the wealthy is not so harmful.
If you earn more than you spend, a normal working person can put away 25% of their income. As income goes higher so does savings, and then given that much of the wealthy's money is investment capital, it gets plowed into from where it came, investments, equities, bonds, along with cash reserves to make choice investments.
1
@TimWarren Buffett is not exactly generous with his Billions.
1
Hmmm. Buried beneath each supposedly independent factor... Goliath thoroughly wins.
4
I find the epistemological naivete of this article nothing less than stunning, particularly if it is indicative of economists and not merely this author.
Take this (minor) example:
"Mr. Mian, along with his Princeton colleague Ernest Liu and research partner, Amir Sufi at the University of Chicago, tried to figure out if the relationship between low interest rates and business investment might be murkier than textbooks suggested."
If economists believe their textbooks, we are all in trouble. In all other disciplines that I'm aware of it is widely accepted that textbooks are gross over-simplifications of out-dated research written for naive audiences.
4
@Hmmm
Ah Hem!
I made a living in It / Computer Science, so I think that I know a bit about change.
It seems to me that you know less about that which you speak about than you are aware.
ALL of my old high school text books and Regents Review books as well as my college texts are as correct today as when I was in school. They may not have the latest information, but they are, essentially, correct.
Placing a pile of NaCl in H2O yields a solution of sodium and chloride ions. Bombarding heavy uranium (U238) with neutrons yields plutonium. The heart pumps blood into the lungs and thence to the rest of the body. Bodily muscles pump the blood back to the heart via the valves in the veins.
Yes, there are some new things under the sun, but the basic order of things is the same.
4
@Eugene
Ah Hem!
Science is completely different from the social sciences. Consider a History Text from the 60s re: Native Americans, just to start.
But then you knew that.
1
I didn't notice the age-related comment until it was pointed out by someone else, but what is it like when you are approaching 60, write better code then your peers, bother to learn new things others don't - Python, R, principal, ML/AI - speak, lead, organize, do more work, etc., but still get pushed out? What is it like when you are too jaded by the abuses and corruption of corporate America to want to make it, maybe because you already have made it? What is it like not wanting to spin faster on the treadmill, even though can, since you might like to enjoy what you have earned, or spend more time with one's spouse? What's it like to be management, and not a junior grunt trying to prove themselves? I'm not sure.
That said, they are quite likely correct in their age assessment, but I am personally sick of the idea that we are only as good as what we produce for someone else. It certainly doesn't help us as individuals or as a country, since that extra productivity only lines the pockets of the wealthy. Why can't we care about our quality of life, our health, our happiness? Why do we let ideologies drive us to be slaves and peons to work?
9
The wealthy and powerful are far too overvalued for any real economic growth or innovation to happen. It really is as simple as that. We can (and should) spend decades rigorously analyzing it down to the bone. But it is plainly obvious that our economy massively overweights a tiny sample of human beings - far, far beyond their actual economic worth.
Jeff Bezos is not even close to being worth a million times more than the average person. Neither is Warren Buffett, Bill Gates nor anyone else among the super wealthy. To sink so much of our world's wealth into them is hugely wasteful. And inefficient, wasteful economies are just that: inefficient and wasteful.
If you want growth and innovation you need to allocate resources in a sane way.
5
@MattAllocate resources? Do you mean redistribute the Wealth. The wealthy or those who created companies actually Did something. They created companies. As much as I do not care for Bezos, he and his wife created a business model unlike any other. Anyone who uses Amazon can attest to that.
1
First, the web described here has been described as a K-wave elsewhere going all the way back to Schumpeter. In the first half of a K-wave businesses spend more on building infrastructure, say, hotels. Once built and paid for (the second half of the K-wave) the cash flow used to pay loans falls to the bottom line (most of it) thus making a bigger player disproportionately wealthier than smaller ones and better able to compete for the marginal dollar than the smaller players (hotels). Strategy for small guys is not to compete on price but on other unique factors, e.g. the nebulous “experience.” Also, almost by definition, older employees are paid more so their productivity numbers don’t look as good. This is a source of age discrimination. We need better metrics for productivity and competitiveness.
5
Yes, everything is interconnected. This was one of Barry Commoner's Laws of Ecology many years ago. Still, a nice insight about economics, showing a deeper meta-look than usually shown in the NYT. So good up to a point. However, now apply it at an even deeper level. Sustainability tells us that the economy, environmental, and equity are deeply interconnected. There are a number of graphical ways to show this. Google "Sustainability interconnections between the economy and environment." This perspective can help bring you closer to actual understanding of problems and better shots at solutions to the tough issues, like climate change. Of course it can be psychologically difficult and challenging to cloud conventional insights of how boundaries are defined. We could use the Irwins, Krugmans, and other economic columnists (as well as others) to begin to explore this. They can use this new insight in the debate which has already started on the New Green Deal. The latter has been critiqued for including apparently unrelated areas like health insurance, guaranteed living wage jobs, and addressing injustices instead of focusing just on the already enormous task of getting net carbon emissions to zero. Yet, what if AO-C is right about these interconnections, and we have to think really, really broadly? Further, I doubt this is the only way of thinking that will need to change to meet the challenges of the 21st century. So kudos for this first attempt--but keep it going, please.
9
@Matt Polsky Thoughtful comment, thank you. I'd like to add that the annual Global Risks reports put out by the World Economic Forum provide handy visualization charts of the interconnectedness of many of the world's most pressing challenges (ranked for likeliest and highest impact by a survey of global business leaders' risk perceptions). In my view, the year-after-year emphasis in these reports of extreme weather & climate change-related issues as topmost issues, shows how climate change, which you mention, is related to all other risks/problems, including global inequality. As a so-called "super wicked problem," therefore, climate change's characteristics imbue all the other global risks with the same attributes, suggesting that we must learn anew how even to solve problems. These are complex problems, as distinguished from complicated ones. The GND strikes me as a much-needed if belated effort to recognize this in a world sadly incurious about how we got to where we are today. There is a whole lot of rethinking now needed & I'm not seeing it happening in places you would expect it to be, such as in universities. Will they be ready when the teens of today are ready for them?
1
Weather forecasters use supercomputers to integrate all the factors, because it is easily understood that everything interacts, and everything affects everything else when it comes to the weather.
The world economy is exactly the same, and economists are finally recognizing it. "Cet Par" is a favorite for economics, but it is entirely a fabrication with no direct or indirect place in the actual world economy. Those who make policy decisions believing that changing one factor will leave everything else unaffected are chasing a fantasy. "Tariff Man" has this problem. When one economic factor changes, every other economic factor also changes. The linkages and relationships are fuzzily understood, and worse so by policy makers meddling in world economics. It *is* all interrelated. And to pretend otherwise dooms any economist that does so to irrelevancy eventually. Watching our amateur economic policymakers fumbling through taxes, trade deficits, employment and fiscal policy, with willful ignorance in charge, is just scary.
7
But what if you add in all the 'externals' that are never included in most economic theories. The fact that th world is teetering towards ecological collapse while climate change is quickly gaining momentum is certainly adding major costs, and uncertainty. The problem is, of course, that no one would dare change economic goals to reflect certain ruin.
4
"Everything...affects everything." Correct me if I'm wrong, but I recall that Wassily Leontief won a Nobel prize in 1973 for his exhaustive work in constructing a huge economic input-output matrix demonstrating this idea mathematically. One of the striking things about the math is that while we can visualize a web in two or three dimensions, the mathematical reality isn't limited to our own senses. His matrix was 79 x 79, as I recall. So as we look at the two-dimensional economic graphs we're accustomed to, it's good to consider that these representations are shadows of shadows of shadows of what's really going on..
20
The fact that there has been class warfare, as Buffet says, and his class has won in a rout it a problem.
But people IMO should realize that inequality is not the same problem as it once was. Once upon a time, those at the bottom lived in want. They did not have the food they wanted, the clothes they wanted, the homes they wanted, the cars they wanted, etc etc
But today, even those at the bottom do have the food they want, they do have the clothes they want and in general they are not literally needy. I am not saying that they would not like more, but they are not needy and in want.
1
@M Plaut They are more likely to want other necessities. Healthcare and college education for their children.
4
@M Plaut The elite just grow more and more out of touch with the realities facing the working class. Sixty per cent of families couldn't withstand a $400 unexpected expense.
But I'm sure the upper class will continue spinning tales about the freedom from want that the under class enjoys, just like their fanciful tales of ridding the world of "extreme poverty".
10
@M Plaut Good heavens! What planet (or country) do you live in? Not the U.S.A., I don't think. Those at the bottom do NOT have the food they want, the clothes they want, certainly not the housing/cars they want. They ARE needy. They use food pantries and church clothing "closets" and coat drives. They are missing teeth by their 30s. Their kids particularly suffer. Just because they aren't begging on the street corner doesn't mean "inequality is not the same problem as it once was." It's worse.
5
Interesting how a little face slap toward "less productive" older workers is part and parcel with other social and economic woes, such as inequality and interest rates. If the author wants to raise the issue of inequality, why not include how older workers are treated and often dismissed summarily? Like in this article.
Initially I thought this was a great piece, until I saw the one-sided comment about older workers. Contrary to the research the author refers to, a Brookings Institute article cites SS Admin data that older workers are not less productive. https://www.brookings.edu/blog/up-front/2013/06/10/is-an-aging-workforce-less-productive/
This position is echoed by an economist with the World Bank: https://www.weforum.org/agenda/2015/09/are-older-workers-less-productive/
A quick Google search would give this author a much more balanced picture to write about when it comes to older workers.
7
Economics as a discipline was formed and initiated to address problems of scarcity. What conventional economics has not and is not addressing (and neither are journalists or business journals) is the issue of over supply. What happens to a system when there is an over supply of everything? Separate from the issue of distribution, over supply seems nowadays to be the overarching challenge.
10
If economists don't realize the interconnectedness of these things, they are awfully lacking in common sense.
11
We suffer terribly from academic economic expertise. They imagine castles in the clouds and then spend their lives "studying" the architecture.
1
I would tell those time-traveling economists that it's a little late for economists to realize that they don't understand how the economy actually works (!) in the real world and they should hang their heads in shame because the amount of damage their utterly useless academic theories and "elegant econometric models" have inflicted on humanity is incalculable.
2
anyone who thinks that the world is anything but a spider web of interlocking causes which cause a web of effects needs to return their degree immediately, no matter what this degree is in.
9
I was reading a book on physics last week. When it got to Quantum Theory, one of the (two) central principles is: Relationships. At the most basic level, everything relates to everything.
And the other principle? Unpredictability!
I’m a retired therapist. My total productivity is now in caring for my husband. It adds nothing to the economy, but the relationship endures. Though it’s outcome is... unpredictable.
8
The last line in this article is the truest. I was trained as an economist in the traditional format. I studied both macro and micro economics which are usually viewed as two separate career tracks. However, I never understood why that was so since each is dependent on the other. Because of that, I focused more on the big picture and specialized in Strategic Consulting. That is a business that requires its practitioners to assist companies to think simultaneously more broadly and in great detail. More broadly to recognize their position in the marketplace and to define their short and long-term goals. Once those are defined, the focus moves to the details of implementing solutions that will permit them to reach those goals. Any business that does not do this is going to find itself under-performing. Without correction, that under-performing may ultimately lead to their demise. Unfortunately for them, I have had numerous clients over the years that brought me in too late and then when I described the need for drastic catch-up actions, they hesitated or refused. Those clients are no longer around. More than ever, in today's world EVERYONE, not just businesses, must connect the dots if they want to succeed in life, love and business. No man is an island ever rang truer than now yet our politicians focus on separating us. Refuse.
2
All the technocrats and economics professor spinning all the dials in the world cannot distract us from the greatest maldistribution of wealth the planet has seen since the heyday of the Roman Empire. There is only one wheel that counts and that is the wealth distribution wheel; the one that the one percent keeps a lock on.
8
Can you please pay more attention to the term "economic system" which is only a sub-part of a social-political system. Thus, to explain system changes and the components therein, on must first fully identify each and every element. Your laundry list of conventional metrics along with there conventional methodologies and data sets remain woefully inadequate to the task.
1
WW 2 expansion, has been replaced with western Democracies all fostering the Social Democratic Welfare State Model, which in turn encourages printing debt, lowering interest rates etc. Point being, Central Bankers are managing western Democracies economies. Economies simply react to their guidance .
1
Small firms have trouble diversifying risk, and so are thus reluctant us use debt, and be able to exploit low interest rates.
Makes sense.
3
Low interest rates are regularly considered a great incentive for the Government to initiate big infrastructure programs - so why shouldn't the same be true for larger business relative to capital investments?
1
@KEF - so where are our big govt infrastructure investments? Too bad the current administration is not actually interested in governing.
1
Neil - this essay should form the basis of an ongoing column. The truth, as you imply, is that low rates and poorly chosen-subsidies are desperate attempts to keep the music playing for the landed aristocracy. The myriad observations are indeed all related. Some argue for a gradual return to economic "normalcy", but there is of course no such thing, stationarity is an illusion. True capitalism might have offered the least bad way out of the predicament (it once did), but the world hasn't seen that for 40 years. The conventional narrative that we should all just wait for the central banks to sort out their nightmarish Dr. Moreau-like experiments in monetary policy is preposterous and must be exposed in ways an average citizen can understand. Because make no mistake about it, average citizens are the ones who are paying the price.
6
I'm in my 70s and I am a lot more interested in developing and learning new techniques and applying new technology than most of my colleagues in my profession and my industry. I'm continually hearing from co-workers decades younger than me, "Couldn't we just track our mobile assets in Excel instead of having to learn ArcGIS?" On the other hand I have less energy and my productivity has fallen because of it. A decade ago I could drive 300 miles to an 8 hour meeting and then 300 miles back home in a day. I can't do that now. I also find myself dozing off after lunch. I'm only one member of the group, but the lack of acceptance of tech doesn't explain my declining productivity. To paraphrase Yeats, "The elders lack energy, while the youth are full of passionate intensity."
1
But the fact that the American tax system - which overtaxes money earned by work and undertaxes money earned by money (capital) has grown the number in poverty nearly half again faster than the general population. Since 1977, US population is +49% and number in poverty is +72%. DESPITE our economy growing by 840%! That's just wrong and due mostly to the over-expansion of capital gains rates. Too many incomes are based on what their money earns rather than what their work earns. We need to fix that.
20
@Jack Taxes are too high across the board, but yes capital is favored. They should be treated the same
And long term is favored over short term. If anything, making your gain in as short a time as you can is good for the economy, as capital is more quickly freed up for other investments. But those who want to hold their investments forever can avoid taxes for decades. Even generations.
Imagine if you paid a 1% tax per year on the capital regardless of what you invest in or how profitable it is. And this replaced the income tax on the profit made when you sell.
Maybe we could exempt the first $25K of capital so young people and the working poor would not face it when they get started investing.
I doubt 1% and $25K are the right numbers to use, just placeholders. But you see how this might encourage people to do more useful things and provide incentives to get started with saving money. And discourage investing to avoid taxes
.
4
@Jack
How can anyone attempt to explain poverty rates and numbers without incorporating the millions of children born to economically challenged unwed parents and the millions of low-skilled, low-educated, and low-English language capabilities of millions of people who have relocated to this country?
2
@Alan
Why would you want to encourage meaningless churning? There is already far too much of that going on, and it only leads to bubbles and other destabilization. What we need to do is equalize tax on earned and investment income, with capital gains adjusted for inflation and then taxed at very progressive marginal levels.
1
Interconnectivity is not a new concept, although unexpected new pairs of connected nodes keep popping up.
I remember reading 10-15 years ago how the shortage of brides in urban centers in China is causing the savings glut. Urban Chinese bachelors are in an arms race to woo potential brides, so each saves a little more to buy a better flat. Their collective efforts result in a global savings glut.
Atif Mian and Amir Sufi have been saying this for a long time. So have several other people. Low interest rate is the dope that's been goosing the stock market / assets like housing, for the last thirty years. When interest rates are low, pensioners and pension funds are forced to move to risky stocks and junk bonds for yield. Which drives stock market up.Anticipating that big companies front run and buyback shares instead of investing in business. Which drives stock market higher. Thus setting up a positive feedback loop. And middle class consumers fearful of iffy asset price and low interest rates, tighten their belt. Which shrinks the real economy. And small businesses who face shrinking business and inability to buyback shares, close shop. So basically it's win win for the wealthy and upper middle class. Who own assets and who delude themselves that economy is roaring and the people living under the bridge are dope addicts and losers. And both parties (and their respective mouthpieces) 'wake up' to the fact only when the opposition is in power. Otherwise they keep harping on dangers of climate change, second amendment abrogation, abortion rights etc. However the problem is with voters. Who think their own party is noble/intelligent/compassionate while the opposition is pure evil. And completely overlook the fact that both parties are on the same page. Namely subsidies the upper class, give handouts to lower class and decimate the middle class.
15
@Vasantha Ramnarayan. Hear, hear! All of this. Well said.
1
@Vasantha Ramnarayan Dead on, there is no differentiation between parties when it comes to subsidies to their own constituencies, that in some cases are the same. Part of the answer could be no political parties, which would make lobbyists and others find it prohibitively expensive to do business if they had to buy all politicians individually, instead of today's method of buying in bulk by just having to buy a few key party leaders that can control the rest.
3
@Kevin
The solution is to get rid of the paid lobbyists and unlimited funds that can be used to buy politicians under our system.
1
The author completely misses the real changes to the economy since 2000.
Hundreds of millions of people (maybe 1B) who were in abject poverty joined the middle and affluent consuming classes. The Chinese went from riding bikes to buying more cars than Americans and Europeans, for example.
Economic growth was meteoric during the past 2 decades. With China, India et al growing at impressive rates.
Worldwide inequality was greatly REDUCED with the difference in income between Americans/European/Japanese and Chinese/Indians/etc narrowing substantially.
It is only the advanced economies that have been suffering. The rest of the world (excluding Africa) did great since 2000.
5
@Baron95
Also, note the vast increase in social security payments (in the aggregate) and the corresponding aggregate amount of social security taxes paid by working individuals and households.
1
While true it may be several spider webs woven in similar pattern, the crux of the problem goes even deeper than inequality. Productivity has not been weak. In fact, it has risen to incredible heights in the last two decades. You can easily look that up on the Bureau of Labor Statistics. Also, compare wages against the same timeline of production and see the divergence that contributed greatly to our ailments today. It all started with cheap labor abroad and now automation is even taking over even those jobs. The resulting benefits of the efficiency have not been shared, but collected among just a few. It is not automation or the rich who are at fault, but a system that enabled such things to occur. Efficiency is the result of good capitalism, which is simply the reduction of methods or steps needed to produce greater amounts of goods. We are needing fewer and fewer people to produce things that once took hundreds or even thousands of workers. Now add this to the corruption, greed, and mismanagement of our political system all swayed by large corporate lobbyists many years in the making and it becomes easy to see how our society is becoming unequaled. The problem is the gains have not been shared equally, but then the question becomes should a company making more share its wealth with its workers? If not then its almost seems like the system is doomed to eat itself. What happens when you buy the rules to the monopoly game? Who loses?
13
Start with the beginning. If you print a dollar bill and exchange that with someone else for a bond with a 3% interest rate and you have to pay back said debt... Can you? NO the 3 cents does not exist in the money supply. Its called perpetual debt and it never goes away which is why the US national debt always goes up. It cannot be paid off. Many know this but dont speak of it.
One force clearly related to all our economic problems is the concentration of decision making power in fewer and fewer hands. We all know planned economies are inefficient, but a planned economy is what we have now, just one with a few predatory CEOs instead of a few Communist apparatchiks in charge of each branch.
10
@Green Tea
I do not know about you, but as for me, no CEO chooses what I buy or how I live. In fact, I actually realize that markets always provide me far more choices than I need or want--except of course for those goods/services that government compels me to choose (or choose from)--e.g., utilities as one example.
1
Yup, it's called capitalism!
2
@Will Dean
What's called capitalism?--please explain.
1
Most companies favored thus hired younger employees as they would accept lower salaries. This was the trend when I was working; living close to Silicon Valley, they now bounce or fail to promote/increase salaries of even 35 year olds in favor of those in the mid-20s. In the age-obsessed society we live in, especially for women, it's very difficult to compete with men of the same age from 40 to retirement (60-65). When the talented, experienced baby boomers are weeded out by forced retirement or leaving for lack of promotion and salary increases, there are few of such calibre to hire much less train to catch up with the demands of each position.
10
The problem/solution binary presented in this article is the wrong way to think about the world. Life does not offer problems to be solved, it offers only trade-offs to be undertaken. When we see the world as a binary of problem/solution, it makes it easy to ignore the unintended consequences that inevitably arise (these consequences are often intentionally ignored as being a small price to pay for a golden future that never arrives). Seeing the world as instead offering trade-offs forces us to look for the unintended consequences, measure them and then decide whether or not they are acceptable outcomes before implementing any change. Outcomes must be managed, not wished away with illusory "solutions".
12
You know what disturbs me? The generations of ignorance and immaturity coming from our "experts" who assumed that all of this was NOT interconnected.
It's ALL interconnected.
23
Once again the so called best and brightest rediscover common sense. Can I have a refund on my tuition?
12
Honestly, it never occurred to mean that many people would have such a simplistic view of the economy which is basically the study of human activity. As for the author, why would anyone assume that credit card debt and a bad marriage were unrelated problems?
10
Those "theories" don't go far enough. Our issues in the US are a combination of technology increasing the value of capital and reducing the value of many human activities. In addition unrestrained trade with say China costs a lot of opportunities. These things result in all those other things in the US, changing them is either impossible (technology) or difficult (paying more for stuff produced here).
2
"Savvy, more experienced workers might be able to generate more output for every hour they work. But they might be less willing to learn the latest technology or adapt their work style to changing environments."
There is one very important point that isn't mentioned here, namely, that the largest companies are constantly laying off older, more experienced workers because all they are looking at is the bottom line. Older, more experienced workers are more expensive. Theirs are some of the first jobs to be shipped overseas to save money. Unfortunately their replacements - either overseas or in the U.S. - are not as productive. And guess what? Workers can't sue the company for age discrimination if there is a "business reason" (i.e. cost savings) for laying them off.
13
every night I listen to my wife talk about the cascading medical issues her patients have and consistently marvel at how complex the emergent system is. the concept of emergent order goes back thousands of years and Hayek wrote about for economics generations ago. it would be absurd, if true, that only now are economists thinking about complexity not only from the perspective of how the system grows but how the system breaks down. maybe a few more generations and these concepts will get added to econ textbooks. and few generations after that, politicians will start taking it seriously.
4
"When interest rates fall to very low levels, though, the payoff for being the industry leader rises, under the logic that a business generating a given flow of cash is more valuable when rates are low than when they are high." Why wouldn't this be so when rates rise, too?
1
I find interesting these economists talk about the aging demographics, yet do not include machines replacing human labor in the global look at the economy. Higher interest rates serving better, mmmm, not sure I agree with this. Also, they neglected to mention that many corporations, do not want to invest in an older more experienced person when they can get a newbie for cheaper. Just some thoughts... after all, it is about the bottom line right and not actual sustainability?
6
Economists deal with human behavior as do marriage counselors. Assuming that multiple problems in human behavior are always unrelated is not the best approach to problem solving. This gets back to the first step of problem solving--identifying the problem. This gets into whether an observed condition is just a symptom of something else.
6
I always find these debates about productivity to be curious. We have plenty of jobs available, record profitability, strong stock market valuations. No one lacks for any silly thing that anyone else produces. Food is plentiful and cheap. There is literally nothing you cannot get if you want it tomorrow (or even later today) from online shopping. So sure... produce more. Make the company more profitable. Work harder.
Why? I'm comfortable. Why should I make myself miserable when I don't have to? I won't benefit at all from this "do more with less" approach to life.
Then there is the ever curious complaint that older workers don't do enough coupled with the complaint that when they retire they reduce economic output. That's what we really need, I guess. 70 somethings working 80 hours a week at hard labor.
What a horrible life these economists envision for us all.
1
@Neildsmith Not everyone in the world or Kansas City is comfortable. The availability of jobs is a local circumstance, even in the US. Part time minimum wage jobs are not the same thing as a job that can support a family above the poverty level or that can afford health care and insurance for a family.
7
@Bob Good points, but many should not have any family, and they should remain healthy as well.
1
@Neildsmith Not everyone lives your life. Even in Kansas City. That is a significant problem with your world view. For instance most of the world population doesn't own US stocks. Ironically US stocks are currently artificially high because corporations have been using cash to buy back stocks.
3
"Maybe, for example, inequality is contributing to weak growth and low rates because the rich tend to save money rather than spend it."
N0!
The rich hoard money in wealth rather than spend it.
10
@Martin Byster Yes, but what about the wealthy who run foundations. Bill Gates spends tens of millions of dollars a year on world health efforts. Doesn't that count as spending?
1
@joe Think of saving versus spending in terms of velocity of a dollar instead of an on off-switch for the dollar. High velocity circulation is stronger. Low velocity circulation is weaker. Bill Gates's foundation is probably slower circulation compared to Microsoft's circulation. Circulation meaning how long does the organization hold on to a dollar before it passes it on. It is the circulation that is important not whether you call it savings. Typical families with young children circulate a dollar faster than typical retired families that own their own homes for instance. Home equity is an example of savings.
1
@Martin Byster Sure they do, they put it under their mattress. How foolish most invest in stocks, bonds, or other businesses. Some do buy say gold, but not that many. Many very "wealthy" own and control a company, their wealth is tied up in their business.
1
This is a very creative observation of the global economy. One factor that Mr. Irwin is missing is the macroeconomic fact that all the balance sheets of major central banks have been ballooned since the 2008 financial crisis.
Regarding an aging workforce, some companies--Amazon, Walmart, et al--seek to totally eliminate workers in completely automated stores. Like an oil refinery, just a handful of technicians to oversee a huge operation. And in such cases, workforce age is irrelevant. There is no workforce.
16
John Muir observed quite a while ago that "When we try to pick out anything by itself, we find it hitched to everything else in the Universe."
It is one of the persistent failures of the division of labor/nose down to the lab table/scientistic just-look-at-each-piece-closely way of approaching all problems that afflicts the modern age. When confronted with a big world and complex, interrelated problems in it, we instinctively shy away from synthetic, bold thinking large enough to address them.
This fearfulness has invaded such diverse fields as philosophy and history. Go small. Be safe.
Never going to work. Einstein himself said, "Never trust your data until it's been proven by a theory."
Now there's a painful conundrum for a modern academic mind.
6
@paultuae Hmmm?? Is the way from particular to general or is it general to particular. Conundrum, hardly; as it has always been a trade off between the two with the determination and resources to work it out.
1
Whatever happened to that incredibly intricate and many-faceted ball of plastic and lights? I hope it wasn't trashed but how could you 're-purpose' that?
1
Actually, economists have known for a while that low interest rates stimulate the economy, not via business investment, but via *housing*. By far the biggest loans that consumers take in their lifetimes are home mortgages, and low interest rates make mortgages cheaper, and that stimulates homebuying.
7
@Iris Hmmm? The Great Recession certainly demonstrated the limits of consumer debt, set by employed wage earners, their debt payments, minus the excess profits, money raked out of the economy as wealth not reinvested in the economy leading to a federal deficit to be paid for by the next generation of wage earners for recovery from the Great Recession.
1
Finally, those that have a platform, such as a newspaper column/article, are catching on that economics is pervasive all throughout the world on a rather global macroeconomics level that is also made up of spectacularly numerous microeconomic influences, and abused by way too many politicians and totalitarian rich people to keep "them" comfortable. Think butterfly effect. Sometimes it takes a lot, sometimes not so much, but we are all interconnected.
8
"Mr. Ozimek says companies may not want to invest in new training for people in their early 60s who will retire in a few years."
I do not buy this.
People who have worked in a certain industry do not need years of retraining. 2-3 months should be sufficient, at the most.
More likely reason: companies want to hire younger people at salaries lower than that paid to older employees.
43
@G.S.
And in the US, lower health care costs through lower health insurance costs
1
This is fairly bad news for economic policy and struggling people. *In this context* the kinds of programmes usually looked to to increase employment, productivity, or relieve poverty just nibble around the edges. Now, it has always been the case that the economy at whatever scale is much larger than any intervention can be. But if things aren't going well due to intertwined forces described in this article, and *only* massive interventions can make them better, we still live in a world that doesn't accept very large scale intervention. Comparatively small-scale intervention, done right, is important and necessary. But if the problem is much bigger, everyone needs to know that and either accept the challenge or just do what they can knowing the implications of either strategy.
A note: Large companies also get lower interest rates than small companies because lenders give favorable rates to their best, and best secured, customers, so the interest rate playing field isn't level.
6
Sounds interesting, but also sounds kind of like the pursuit of a unified theory in physics.
So it might take a while -- a few hundered years? -- to get such a theory established in economics...
2
@Cary. Exactly my first impression. Economic String Theory.
1
I agree. "Everything affects everything." So much going on.
Nice article, nice explainations, no conconclusions, but thats ok. As long as we continue to work on it. To continue to try to figure it out. We know the easy is just not realistic. But, we persevere.
3
"“At low interest rates, the valuation of market leaders rises relative to the rest,” Mr. Mian said. “Amazon becomes a lot more valuable as interest rates fall relative to a smaller player in the same industry, and that gives a huge advantage to Amazon.”
Hogwash. Show me the present value equation that has the amount of the cash stream affecting the multiplier. Hint: it does not exist
2
New system where the Fed raise interests rates progressively based on company revenue. boom solved
1
and of course the Piketty Effect - that the rich can easily get much richer - while the poor can struggle all their lives to just survive - with choices like 'I'm sick - will I use my last dollars to go to the doctor, buy food or pay the rent - I can only afford one of those'
inequality seems a primary problem today - I had previously read that the average US CEO got 400 times their average worker pay - but then the other day I saw that may now be 1000 times ... !?!?!?
Inequality damages life for both the poor and the rich. When the rich can't walk down the street for fear of being mugged or kidnapped (South America ?), that looks like a Bird in a Golden Cage.
21
@Frank Sure it does, when the rich can't walk around, they either won't or the criminals will be eliminated. And we need fewer humans, lots fewer.
2
So the world economy is a junkie with mental health problems and no useful productive or interpersonal skills?
I can't agree more! We all know what happens to that uncle. He doesn't just wake up one day and make up with his kids, put on a suit and find a respectable job. No, he definitely doesn't.
You know how National Public Radio will take donated cars that *nobody* in their right mind would be willing to take; complete heaps of rust, and loose bolts?
I've said since 2016 that we should just donate the United States to NPR; all of it. Drag the whole thing down there and drop it off. NPR is the only organisation crazy enough to take such a huge lemon!
1
As my wise philosopher plumber says, "Everyone needs a toilet, and can only use one toilet at a time. Does a billionaire buy 10,000 toilets? No. So they don't contribute to the economy like 10,000 working people." Wise indeed.
34
@Michael F
They just own the factory where the poor person earns his money to buy toilets, or keeps it in the bank which provides toilet loans.
2
I would like to throw something else into the mix... We have seen wage stagnation for years now, and higher wages are certainly an incentive to be productive. Might the ability of firms to maintain low wages be disincentivizing labor?
22
@PJM: More, disincentivizing consumption. You can't buy anything with your hard-earned wages if it's all going to rent, food, transport, health insurance, etc. You'll buy the cheapest everything. Higher wages would help consumption, and free up jobs, since, right now, lots of low-wage earners work multiple jobs.
13
@PJMd. In 1926, Henry Ford voluntarily lowered the work week from 6 days to 5 days / 8 hours, AND he DOUBLED the hourly production wage to $5/hr.
Imagine what transformation would happen if major U.S. corporations voluntarily initiated a 4 day, 7 hour work week and adjusted hourly rates upward so net gross pay matched the current 40 hr rate? Those who scoff this would never succeed. Using automation do a quick search of Henry Ford & 1926 and consider the factual evidence.
6
This deserves a closer look (than just the single sentence in this article).
"In recent weeks, for example, one groundbreaking paper proposes that low interest rates are fueling a rising concentration of major industries and low productivity growth"
Including asking central bankers what they think of this work.
1
I can complete my work, and with better quality, in half the time that I did twenty years ago, due largely to my experience. I am not, however, looking to fill up that extra time with more work. I'd rather read the NY times and respond to articles! So my productivity levels, as far as work is concerned, have remained the same. Good statisticians and theorists will tell you that one-to-one correlations are not the norm, and that multiple factors, moderating variables, and nuances should be expected, no matter what field one studies.
27
You have left out high debt levels, which can suck the life out of economies. If all the revenue is needed to pay interest, there is little left for new investment. The economy is divided into debtors, who do the work, and creditors, who collect the money. The creditors get richer and richer, but there is little profitable use for their money.
13
The attitude or opinion that training 60+ year old workers is not worthwhile is a bias, not necessarily justified by anything in terms of facts, analysis, whatever.
Just because a bias exists does not make it rational or true.
The best example of this is in industries with very high turnover rates of technology, and workers. The worker turnover is simply because they are on a treadmill, often without being fully vested. The myth is that a contracting employment agency can bill these persons out at 1.75 to 2.5 their paid rate and that the host employer - because it can terminate dozens or hundred of employees at will - is then ahead.
In this world, using that line of reasoning, there is never any reason to pay for training or any kind of education.
It seems that people could find a way to both pay more, increase skills and also lower the ultimate employer's cost of wages, if they wanted to find such an accommodation.
The only loss would be to the employment agency.
3
@mumbogumbo
Compared to 20-30 years ago, corporations aren't doing much training of anyone. Rather than make investments in training "their people," corporations now expect schools to create perfect employees for them, skilled in all the latest technologies and methods.
Companies have abdicated much of what we used to think of as being good corporate citizens in their drive to create more "shareholder value." Greedy people demand it.
Unregulated capitalism will result in growing inequality that eventually becomes untenable. Just ask Theodore Roosevelt.
30
When working "correctly" capitalism makes the rich richer, and the rest poorer.
We just pretend it can do something else.
47
@Jerry Capitalists share their wealth when they are forced to. A capitalist can not share.
5
@Rich Pein Incorrect, they share their wealth when paying someone increases their wealth, not when forced to. When force is tried they avoid it as much as possible. See the tax code for a great example.
2
Or it could be because EVERYONE IS ON THEIR CELL PHONES ALL OF THE TIME.
13
I can make this easy.
Just repeat, over and over, "The rich get richer, the poor get poorer", and when that gets boring, try whispering to yourself, "......trickle down..... trickle down.....trickle....."
And, if you still can't sleep at night, go over to the Heritage or Cato Institute and tell them that you want a NEW philosophy of economics, their old ones no longer work and some hippie has just opened a website that is offering hand milled, Green, and fully portable guillotines. No shipping charges.
Comes with a small piece of cake, free.
Sorry - no sympathy here.
You knew 45 years ago that "trickle down" was a hoax to drain the bucks into your wallet and starve out the poor.
....oh, those pesky poor.....
76
@rosa
Can you please supply website URL for the guillotines?
Thanks.
36
It's ironic that economic orthodoxy would be questioned with unemployment low and the stock market high. Is that because we are bored or because we don't believe our lying eyes?
4
@reaylward
The stock market, at this point, is completely decoupled from the actual economy. It's like one of those off-shore casinos out beyond the 12 mile limit; if it sank, it would only affect those on board. The gamblers however, like to maintain the fantasy that they are irreplaceable geniuses, so when the ship does inevitably sink, we'll send out the fleet to rescue them, sparing no expense. Complicit in this myth are most of our elected officials.
25
@stan continople
Very well said! Thank you.
4
Amazing; everything affects everything. Not being a trained economist I never could have imagined it could be so.
And a butterfly beats its wings in Asia . . .
20
Unstated by Mr. Irwin is the (IMHO) untenable axiom that per capita wealth must continue to expand - that the economy must always "grow". A wider view, one that includes the facts of environmental degradation and the resulting breaking of ecological systems due to over population and the (understandable) desire by the 99.9% for greater economic equality (=more per capita wealth) immediately challenges this unstated axiom. I believe a more tenable view may include the fact that for many of us - at least in the developed world - we are saturated with goods: we need no more, and might do just find with considerable less. There is more wealth for all of us in the form of improving the environmental "commons", saving and building the ecological capital life on Earth requires to continue. Let's add these dimensions explicitly from now forward in our considerations of "economy".
87
@John "we are saturated with goods: we need no more, and might do just find with considerable less. "
How about requiring manufacturers to produce goods that don't break within a few years?
If a microwave or dishwasher (our most recent ones lasted 3 years!) doesn't last, say, 5 years, they should be required to take it back and reimburse the buyer.
Sure there are warranties but just try to get them enforced. Manufacturers know you're not taking them to court for a few $100s.
Having quality goods and appliances that last instead of having to be replaced every few years should cut down on household expenditures and free up landfills.
8
@John
Even setting aside the whole environmental issue, "growth" that largely benefits the richest 10,000 families and bypasses a super-majority is inherently destructive. It turns a large part of the economy into a luxury-goods mall where the majority can only window-shop.
Anyone who continues to advocate "growth" with no benefit to the majority is, by definition a slavish fool.
2
@Lynn People want cheap. Buy the premium version (i.e. Breville coffeepot instead of Mr. Coffee) and it will last much longer. It also costs twice as much. Do you buy Henkel knives and All Clad pans?
2
This article describes the problems facing advanced countries (and arguably China).
Most developing countries other than China actually face the opposite problem, where population growth is too fast and there is not enough financial capital, causing excess demand and therefore interest rates and inflation that are too high.
It seems then that a big part of the solution will be encouraging economic convergence and integration between developing countries and rich ones, including immigration, so that the excess supply in the rich world and excess demand in the developing world can equalize.
5
@Aoy: Your solution, which is sound, is precisely what the Trump regime works so hard to prevent. Dean Baker at the CEPR points out frequently how bizarre it is that developing nations maintain huge positions US government securities. They do so in order to prevent the IMF from doing what it did to the Southeast Asian economies in 1998. In 1910 the UK economy (mature) was making huge investments in the developing US economy. That was textbook economics. What's going on right now is bizarre.
2
At least you admit the downside to the low interest rate policy of the central banks.
8
Should we imagine that most workers age 60+ are either the manager or have a sign that reads "my pension has vested" on display at their desk?
I was lucky enough to have such a sign much earlier in life. It is a nice feeling that adds to wellness but does not get added to GDP.
1
@Alan Would you be referring to those 60+ "retirees" working doors at Walmart?
9
@Susan
Or the ones living in discarded Walmart boxes in my rainy town?
PS: isn't Walmart terminating those 60+ "retirees" this year?
7
I would tell the time traveler that
1. unions have been busted
2. taxes on large corporations are low or nil
3. pollution has been exascerbated by fossil fuel and also plastic which powers ships and lightens the load of goods traveling around the world to places that used to manufacture them at home.
Huge vs mom and pop is a no-brainer. The solution may just be making things locally in an environmentally sound manner.
49
@betty durso These are concerns but the most common factor of all is the belief in all of these governments in the need for austerity and balanced budgets. Only China, the most successful modern economy, does not subscribe to austerity. Even the IMF has identified austerity as a central factor contributing to current economic woes.
19
@John Tillson
Japan did not practice austerity and still has not been able to defeat is economic stagnation
Of course the growing inequality is contributing to lack of growth. How can demand increase if wages are stagnant? All evidence is that there is an excess of capital, which is not being constructively invested because demand growth is insufficient. Economists talk about a "savings glut" and the best thing that corporations think they can do with the money they get from low interest rate loans as well as tax cuts is buy back their own stock.
When inequality was decreasing from around 1933 up to the 70's there was excellent growth and no lack of capital. There were plenty of people who were willing to work as CEO's for the much smaller compensation they got then, thanks to more progressive tax rates.
68
@skeptonomist Exactly incorrect. When you can buy a machine that does the work of 30 or more humans without the problems employees bring capital is way more valuable than labor. Now of course CEOs are way over paid, wait until machine learning replaces them.
2
@vulcanalex Uh, as funny as your comment is, let's take this to it's logical extreme . . .
What will the machines do when they cannot get the energy they need to run?
You forget that corporations, contrary to Citizen's United, are not people.
It is called systems theory in the social sciences: each of the parts affects the others. If one changes, the others do as well.
Are economists just waking up to this?!?
The challenge is to find/create interventions that lead to desired changes in each of the components and thus the whole system. Would it be incentives to increase the birth rate and thus reverse the aging of the population? Lessen income inequality with tax reform (good luck trying to get that one through Congress/legislatures which depend on donations from the wealthy!)?
49
@richard: No need to increase the birth rate to reverse the proportion of old to young with our current lower birth rate. In a few decades the grim reaper with have righted the imbalance -- in a far more practical way.
2
The problem is simple.....the modern world is defining itself by what it dosn't have instead of what it has.
2
"With many in the large baby boom generation retiring, fewer people are working and producing"
This is basically false - like many who write about this Irwin gets his demographics wrong. Evidently most people go by what other people say, not what the data say. Actually the percentage of working-age people will be about the same in 2030 as it was in 1900 or 1965:
http://www.skeptometrics.org/RealDemographics.html
There will be a decline of a few percentage points to the 1965 level, but demographics are not considered to have been a factor at that time.
The story of demographic doom is also totally opposed to the story of robots taking all the jobs. See Dean Baker's blog (http://cepr.net/blogs/beat-the-press/)
15
@skeptonomist And many of older people would do productive work if conditions were different. Job sharing for professionals would make me go back to work.
2
The surprise here is that anyone would find the interconnectedness of these various economic phenomena surprising. One doesn't have to be a conspiracy theorist to believe that the entire economy, this 'free' market economy is the orchestrated product of a very small number of very wealthy people, created principally for their benefit.
87
@richard - Orchestrated, no, but a system run under one dollar one vote, with many vying to be heard, but those having the most 'votes' win.
15
I find the whole premise, looking at relations between economic factors as if it was new is ludicrous. Haven't we always looked at interrelated factors? The other hubris, as if the problems citied are the defining characteristics of the problem. The problem is human welfare, or rather, the lack of concern for it.
To me, hypothetically, the issue is control by the powerful and an unwillingness to enforce the public good. Monopoly control. No wage growth. Inequality. Corruption. Low growth (Picketty). Bubbles. Debt. Mortality. We have been overrun by the wealthy, corporations, and the financial markets, with no sign that it is abating. We can only hope the rising left keeps rising...
101
@James Igoe One should recognize that democracy is an illusion. It exists because the wealthy can veto and circumvent the crowd by campaign contributions and the media. When they cannot rig the system, the system becomes authoritarian. However, when the power of the masses is unchecked, you get a revolution. Choose your poison.
4
@alanWe had a revolution when President Trump was elected. It was a signal to DC that we were sick of their unchecked, non transparent Abuse of Tax dollars. The revolution continues. Legal Americans are AT war with the LEFT. The party of corruption and Lawlessness.
1