Either the economy has recovered or it hasn't. Which is it libs?

[Remodeling Maidiac]

Gramps, your government contracts are incentives.

Your taxes, in part, help create those opportunities.

The question is not if but how much and how long on UE.

Two years is a bit ridiculous is it not?

 

[Londoner]

Growing slowly is nothing to brag about.

The economy is performing far below capacity.

On one side we have unprecedented levels of capital, sitting on the sidelines, unused.

On the other hand we have a massive army of unemployed workers, sitting on the sidelines, unused.

Capitalists have the Capital to add jobs and they have the Labor resources, but they lack the incentive (and capitalism's strength is that it understands incentives better than the Soviet system which failed to channel self-interest)

The Left believes that Capital lacks the incentive to invest because there are not enough consumers, that is, Capital is suffering from a demand shortage. After 30 years of borrowing more and more money just to stay afloat, and after 30 years of stagnant wages, disappearing benefits, rising energy and health costs, the Great American consumer is finally tapped out. (Please Recall: the American Economy is based on a high degree of consumer spending. When consumers have disposable income in their wallets, Capital will innovate and add jobs in order to tap into that spending money. On the other hand, when consumers are not buying the stuff, the capitalist is forced to layoff workers, and has no incentive to invest. During the postwar years, we had the highest paid lower and middle class in history. The result was the most robust consumption economy in our nation's history. Don't take my word for it, study the economic growth in the 50s and 60s. Unfortunately, the high wage middle class (form the postwar years) is gone. Now, the average full time worker for our largest employer, Walmart, make only $15,576/yr, which isn't enough money to consume at the levels needed for economic growth.

How did we get here? In 1980 we decided that lowering the cost of production (lower wages/zero benefits) would incentivize investment, which would lead to inclusive economic growth. Problem is, the growth happened at the expense of middle class, which lost the purchasing power that accompanied high wages/benefits. Now only did we lower wages for American workers, we moved production to cheaper labor markets in freedom hating places like China and Taiwan. This was also done to provide suppliers with a greater incentive to invest their surplus capital in producing goods.

The point of global capitalism was to give our Producers access to the world's cheapest labor and raw materials. In fact, the Reagan Revolution used the Cold War (the Soviet Threat) as a context to intervene in resource rich parts of the third world so that we could give our capitalists maximum access to cheap labor and resources. [Don't take my word for it. Study how global capitalism was created. Research where our products are manufactured. Read the labels on the clothes you wear. Cheap labor in freedom hating nations was/is essential to economic growth, for it is precisely the kind of cheap labor that comes from dictator nations that produces the highest return on investment. The biggest disincentive to investment is when a thriving, literate, politically free middle class springs up near a vital supply chain. Why? Because high middle class labor costs lower the return on investment. This is why Milton's Friedman's "Capitalism and Freedom" should be re-named "Capitalism and Sweatshop Labor". Fact is, Nike investors make higher returns when their sneaks are made by oppressed workers making under $5/day and living beneath a terrible dictator, who reproduces the needed political and social conditions to keep the worker living in hovels]

But there's a flaw to cheap labor. With Reaganomics - specifically it's desire to lower the operating cost of capital investment - we unwittingly destroyed the other necessary part of the equation - the middle class consumer, who depended on those high paying jobs as much as the economy depended on robust middle class consumption. So we tried to fix a disappearance of jobs/wages/benefits with credit (debt), that is, we put the wealthy on a regime of tax cuts, subsidies and bailout (profits on steroids); and we put the consumer on American Express, Visa, MasterCards and SubPrimes. This worked for a couple decades. Reagan's expansion of credit fueled quite a boom.

But we finally ran out of credit, and now we're left with a decimated middle class consumer.

America swallow poison 1980, and it's now working its way through the system