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This failing in the West’s economies is also a failing of economics

many people have long felt the desire to do something with their lives besides consuming goods and having leisure. They desire to participate in a community in which they can interact and develop.

Our prevailing political economy is blind to the very concept of inclusion; it does not map out any remedy for the deficiency

injustice of another sort. Workers in decent jobs view the economy as unjust if they or their children have virtually no chance of climbing to a higher rung in the socioeconomic ladder

though the injustices in the West’s economies are egregious, they ought not to be seen as a major cause of the productivity slowdowns and globalization. (For one thing, a slowdown of productivity started in the US in the mid-1960s and the sharp loss of manufacturing jobs to poorer countries occurred much later—from the late 1970s to the early 1990s.) Deeper causes must be at work.

justice is not everything that people need from their economy. They need an economy that is good as well as just. And for some decades, the Western economies have fallen short of any conception of a “good economy”—an economy offering a “good life,” or a life of “richness,” as some humanists call it

The good life as it is popularly conceived typically involves acquiring mastery in one’s work, thus gaining for oneself better terms—or means to rewards, whether material, like wealth, or nonmaterial—an experience we may call “prospering.”

As humanists and philosophers have conceived it, the good life involves using one’s imagination, exercising one’s creativity, taking fascinating journeys into the unknown, and acting on the world—an experience I call “flourishing.”

“Money is like blood. You need it to live but it isn’t the point of life.”4

prospering and flourishing became prevalent in the nineteenth century when, in Europe and America, economies emerged with the dynamism to generate their own innovation.

High-enough wages, low-enough unemployment, and wide-enough access to engaging work are necessary for a “good-enough” economy—though far from sufficient. The material possibilities of the economy must be adequate for the nonmaterial possibilities to be widespread—the satisfactions of prospering and of flourishing through adventurous, creative, and even imaginative work.

In nineteenth-century Britain and America, and later Germany and France, a culture of exploration, experimentation, and ultimately innovation grew out of the individualism of the Renaissance, the vitalism of the Baroque era, and the expressionism of the Romantic period.

What made innovating so powerful in these economies was that it was not limited to elites. It permeated society from the less advantaged parts of the population on up.

today’s standard economics. This economics, despite its sophistication in some respects, makes no room for economies in which people are imagining new products and using their creativity to build them. What is most fundamentally “wrong with economics” is that it takes such an economy to be the norm—to be “as good as it gets.”

It will also be essential that high schools and colleges expose students to the human values expressed in the masterpieces of Western literature, so that young people will want to seek economies offering imaginative and creative careers. Education systems must put students in touch with the humanities in order to fuel the human desire to conceive the new and perchance to achieve innovations

ince around 1970, or earlier in some cases, most of the continental Western European economies have come to resemble more completely the mechanical model of standard economics. Most companies are highly efficient. Households, apart from the very low-paid or unemployed, have gone on saving

In most of Western Europe, economic dynamism is now at lows not seen, I would judge, since the advent of dynamism in the nineteenth century. Imagining and creating new products has almost disappeared from the continent

The bleak levels of both unemployment and job satisfaction in Europe are testimony to its dreary economies.

a recent survey of household attitudes found that, in “happiness,” the median scores in Spain (54), France (51), Italy (48), and Greece (37) are all below those in the upper half of the nations labeled “emerging”—Mexico (79), Venezuela (74), Brazil (73), Argentina (66), Vietnam (64), Colombia (64), China (59), Indonesia (58), Chile (58), and Malaysia (56)

The US economy is not much better. Two economists, Stanley Fischer and Assar Lindbeck, wrote of a “Great Productivity Slowdown,” which they saw as beginning in the late 1960s.11 The slowdown in the growth of capital and labor combined—what is called “total factor productivity”—is star

What is the mechanism of the slowdown in productivity

The plausible explanation of the syndrome in America—the productivity slowdown and the decline of job satisfaction, among other things—is a critical loss of indigenous innovation in the established industries like traditional manufacturing and services that was not nearly offset by the innovation that flowered in a few new industries

hat then caused this narrowing of innovation? No single explanation is persuasive. Yet two classes of explanations have the ring of truth. One points to suppression of innovation by vested interests

some professions, such as those in education and medicine, have instituted regulation and licensing to curb experimentation and change, thus dampening innovation

established corporations—their owners and stakeholders—and entire industries, using their lobbyists, have obtained regulations and patents that make it harder for new firms to gain entry into the market and to compete with incumbents.

The second explanation points to a new repression of potential innovators by families and schools. As the corporatist values of control, solidarity, and protection are invoked to prohibit innovation, traditional values of conservatism and materialism are often invoked to inhibit a young person from undertaking an innovation.

ow might Western nations gain—or regain—widespread prospering and flourishing? Taking concrete actions will not help much without fresh thinking: people must first grasp that standard economics is not a guide to flourishing—it is a tool only for efficiency.

Widespread flourishing in a nation requires an economy energized by its own homegrown innovation from the grassroots on up. For such innovation a nation must possess the dynamism to imagine and create the new—economic freedoms are not sufficient. And dynamism needs to be nourished with strong human values.

a reform of education stands out. The problem here is not a perceived mismatch between skills taught and skills in demand

The problem is that young people are not taught to see the economy as a place where participants may imagine new things, where entrepreneurs may want to build them and investors may venture to back some of them. It is essential to educate young people to this image of the economy.

prospering

This reorientation of general education will have to be supported by a similar reorientation of economic education.

An additional problem for the optimistic interpretation is this: The productivity slowdown is too big in scale, relative to the size of the tech sector, to be plausibly compensated for by tech progress.

Basically, under a conservative estimate, as outlined by Professor Syverson, the productivity slowdown has led to a cumulative loss of $2.7 trillion in gross domestic product since the end of 2004; that is how much more output would have been produced had the earlier rate of productivity growth been maintained. To make up for this difference, Professor Syverson estimates, consumer surplus (consumer benefits in excess of market price) would have to be five times as high as measured in the industries that produce and service information and communications technology. That seems implausibly large as a measurement gap

The tech economy just isn’t big enough to account for the productivity gap. That gap has caused measured G.D.P. to be about 15 percent lower than it would have been otherwise, yet digital technology industries were only about 7.7 percent of G.D.P. in 2004. Even if the free component of the Internet has become more important since 2004, it’s hard to imagine that it is so much better now that it accounts for such a big proportion of G.D.P.

America’s productivity crisis is real and it is continuing. While information technology remains the most likely source of future breakthroughs, Silicon Valley has not saved us just yet.

The pressure on prices has been significant. Continue reading the main story Related Coverage China’s Slowdown Tarnishes Economic Boom in Copper-Rich ZambiaDEC. 2, 2015 A Global Chill in Commodity Demand Hits America’s HeartlandOCT. 23, 2015 Glencore Isn’t Out of the Woods YetOCT. 1, 2015 Prices for iron ore, the crucial steelmaking ingredient, have fallen by about 40 percent this year. The Brent crude oil benchmark is now hovering around $40 a barrel, down from more than a $110 since the summer of 2014.

Companies are caught in the downdraft.A number of commodity-related businesses have either declared bankruptcy or fallen behind in their debt payments

Even more common are the cutbacks. Nearly 1,200 oil rigs, or two-thirds of the American total, have been decommissioned since late last year. More than 250,000 workers in the oil and gas industry worldwide have been laid off, with more than a third coming in the United States.

The international mining company Anglo American is pulling back broadly, with a goal to reduce the company’s size by 60 percent. Along with the layoffs announced on Tuesday, the company is suspending its dividend, halving its business units, as well as unloading mines and smelters.

China looms large in the commodities equation.Between 2000 and last year, companies invested hundreds of billions of dollars to expand their production capacity to satisfy China in a period of rapid economic expansion. Much of the corporate growth was fueled by debt.

In the past, economic elites might have been comfortable with a market-friendly approach from left-leaning parties. In the future, that comfort will fade, because both the political space for a moderate left approach to governing and the economic growth generated by such an approach appear to be shrinking

Between accommodating economic populism from the left and nationalist populism from the right, plutocrats will opt for the latter. Populist nationalism will not generate greater economic growth, but it does lead to redistribution that favors owners of capital.

They do like the tax cuts, light regulatory touch and business-friendly judiciary, however. Equally important, they like it a lot more than anything that the left is offering them

here are three stories over the past month or so that support the arguments made in the chapter.

This volume asked a different question: What happens to the U.S. political economy if the slowdown is the new status quo?

As Rep. Chris Collins said at the time, “My donors are basically saying, ‘Get it done or don’t ever call me again.

From the time the tax bill was first introduced on Nov. 2, 2017, until the end of the year, a 60-day period, dozens of billionaires and millionaires dramatically boosted their political contributions unlike they had in past years, giving a total of $31.1 million in that two months,

Second, Ben White wrote in Politico about the wariness that Wall Street feels toward the Democratic presidential candidates. His opening sentence: “Top Wall Street executives would love to be rid of President Donald Trump. But they are getting panicked about the prospect of an ultraliberal Democratic nominee bent on raising taxes and slapping regulations on their firms.”

Finally, the New Yorker’s Jane Mayer came out with a long story this week on the unholy marriage of Trump and Fox News. An aside in that story was the ways that Murdoch has personally profited from having an ally in the White House:

All of this suggests that high-net-worth individuals and cash-rich corporations are very likely to back Trump come 2020

In a low-growth environment, it will be very difficult for the Democrats to offer them anything appealing.

Still, Sharma’s broader point remains: The real threat of the economic slowdown is to political stability. For decades, advanced democracies, including the United States, have adopted a similar political model. It assumed that economic growth could deliver social peace and loyalty to democratic values.

The system’s victims and critics could be bought off. But the model required — and most people took for granted — a dynamic economy that could boost living standards and expand welfare benefits. This assurance has now gone missing. At best, the model desperately needs repair; at worst, it is busted.

the streaming wars seduced Hollywood into abandoning a successful business model that supported a vibrant film and television ecosystem — one encompassing blockbusters, breakout indies and romantic comedies, sitcoms and “The Sopranos.”

the laws of demography, time and economics were bound to reassert themselves. There are only so many people in the country where streaming services operate. They have only so much money to spend on entertainment.

there are the challenges posed by the geopolitical complexities of the entertainment business. Netflix recorded a loss of subscribers rather than a mere slowdown in subscription growth because it stopped offering its services in Russia.

Even when a Netflix show is wonderful, loving it can be a lonely experience if no one else is watching along with you. The weekly release model made cliffhangers possible.

Furthermore, both Reagan and Clinton inherited depressed economies, with unemployment well over 7 percent. This meant that there was a lot of economic slack, allowing rapid growth as the unemployed went back to work. Today, by contrast, unemployment is under 5 percent, and other indicators suggest an economy close to full employment. This leaves much less scope for rapid growth.

The only way we could have a growth miracle now would be a huge takeoff in productivity — output per worker-hour. This could, of course, happen: maybe driverless flying cars will arrive en masse. But it’s hardly something one should assume for a baseline projection.

belief that tax cuts and deregulation will reliably produce awesome growth isn’t unique to the Trump-Putin administration.

We heard the same thing from Jeb Bush (who?); we hear it from congressional Republicans like Paul Ryan. The question is why. After all, there is nothing — nothing at all — in the historical record to justify this arrogance.

Yes, Reagan presided over pretty fast growth. But Bill Clinton, who raised taxes on the rich, amid confident predictions from the right that this would cause an economic disaster, presided over even faster growth. President Obama presided over much more rapid private-sector job growth than George W. Bush, even if you leave out the 2008 collapse. Furthermore, two Obama policies that the right totally hated – the 2013 hike in tax rates on the rich, and the 2014 implementation of the Affordable Care Act – produced no slowdown at all in job creation.

Meanwhile, the growing polarization of American politics has given us what amount to economic policy experiments at the state level. Kansas, dominated by conservative true believers, implemented sharp tax cuts with the promise that these cuts would jump-start rapid growth; they didn’t, and caused a budget crisis instead. Last week Kansas legislators threw in the towel and passed a big tax hike.

At the same time Kansas was turning hard right, California’s newly dominant Democratic majority raised taxes. Conservatives declared it “economic suicide” — but the state is in fact doing fine.

It would be nice to pretend that we’re still having a serious, honest discussion here, but we aren’t. At this point we have to get real and talk about whose interests are being served.

Never mind whether slashing taxes on billionaires while giving scammers and polluters the freedom to scam and pollute is good for the economy as a whole; it’s clearly good for billionaires, scammers, and polluters.

And on such matters Donald Trump is really no worse than the rest of his party. Unfortunately, he’s also no better.

Growth in annual average economic output per capita has slowed from the century-long average of 2 percent, to 1.3 percent over the past 25 years, to a mere 0.7 percent over the past decade.

The gains in income since the 2007-9 Great Recession have flowed overwhelmingly to those at the top, as has been widely noted. Real median family income was lower last year than in 1998.

There are numerous causes of the less-than-satisfying economic growth in America: the retirement of the baby boomers, the withdrawal of working-age men from the labor force, the relentless rise in the inequality of the income distribution and, as I have written about elsewhere, a slowdown in technological innovation.

Education deserves particular focus because its effects are so long-lasting. Every high school dropout becomes a worker who likely won’t earn much more than minimum wage, at best, for the rest of his or her life.

The premium that employers pay to a college graduate compared with that to a high school graduate has soared since 1970, because of higher demand for technical and communication skills at the top of the scale and a collapse in demand for unskilled and semiskilled workers at the bottom.

research has shown that high-discipline, “no-excuses” charter schools, like those run by the Knowledge Is Power Program and the Harlem Children’s Zone, have erased racial achievement gaps. This model suggests that a complete departure from the traditional public school model, rather than pouring in more money per se, is needed.

For most of the postwar period, the G.I. Bill, public and land-grant universities and junior colleges made a low-cost education more accessible in the United States than anywhere in the world. But after leading the world in college completion, America has dropped to 16th.

The cost of a university education has risen faster than the rate of inflation for decades. Between 2008 and 2012 state financing for higher education declined by 28 percent

Two-year community colleges enroll 42 percent of American undergraduates. The Center on International Education Benchmarking reports that only 13 percent of students in two-year colleges graduate in two years; that figure rises to a still-dismal 28 percent after four year

Compared with other nations where students learn several languages and have math homework in elementary school, the American system expects too little. Parental expectations also matter: homework should be emphasized more, and sports less.

family breakdown is now biracial.” Among lower-income whites, the proportion of children living with both parents has plummeted over the past half-century

the holders of G.E.D.’s performed no better economically than high school dropouts and that the rising share of young people who are in prison rather than in school plays a small but important role in the drop in graduation rates.

Lacking in the American system is a well-organized funnel between community colleges and potential blue-collar employers, as in the renowned apprenticeship system in Germany.

In Canada, each province manages and finances education at the elementary, secondary and college levels, thus avoiding the inequality inherent in America’s system of local property-tax financing for public schools. Tuition at the University of Toronto was a mere $5,695 for Canadian arts and science undergraduates last year, compared with $37,576 at Harvard. It should not be surprising that the Canadian college completion rate is about 15 percentage points above the American rate.

He argues that our society, for the moment, has hit a technological plateau.

many of this era’s technological breakthroughs produce enormous happiness gains, but surprisingly little additional economic activity

Jared’s other priorities also produce high quality-of-life gains without huge material and productivity improvements.

For Sam, income and living standards were synonymous. But for Jared, wealth and living standards have diverged. He is more interested in the latter than the former. This means that Jared has some rich and meaningful experiences, but it has also led to problems. Every few months, new gizmos come out. Jared feels his life is getting better. Because he doesn’t fully grasp the increasingly important distinction between wealth and standard of living, he has the impression that he is also getting richer. As a result, he lives beyond his means. As Cowen notes, many of our recent difficulties stem from the fact that many Americans think they are richer than they are.

the bursting of the debt bubble three years ago was not just a severe example of the ups and downs that are an inevitable part of American capitalism. Rather, it was the ultimate consequence of the modern global economy. Chief among the changes that have taken place is the integration of China, Russia, India and other countries into the global economic mainstream. The developed world once had maybe 500 million workers. Today, say the authors, we’ve added another two billion people to the global work force. That change alone has had a great deal to do with the stagnant wages, income inequality and the oversupply of labor in America that was masked by rising home prices and access to credit.

they believe that this is perhaps the best time in recent history for the government to take on a sustained infrastructure program, lasting from five to seven years, to create jobs and demand. “Labor costs will never be lower,” says Hockett. “Equipment costs will never be lower. The cost of capital will never be lower. Why wait?” Their plan calls for $1.2 trillion in spending — not all by the government, but all overseen by government — that would add 5.2 million jobs each year of the program.

Reducing government spending in the short term will only make things worse.

Now that the curtain has been pulled back, cheap credit alone can’t fix our problems. The country is in a deflationary cycle that is very difficult to get out of: as wages decrease (or more workers become unemployed), people become afraid to spend. Assets like homes drop in value. Businesses react by lowering prices and laying off yet more workers — which only triggers a new round of deflation. The only thing that doesn’t change is the unsustainably high debt that was accrued during the bubble.

they call for a “global rebalancing,” which includes a radical change in the current dysfunctional relationship between creditor and debtor nations, and even a new global currency that would be administered by the International Monetary Fund.

Then there’s health reform, where Republicans were very clear about what was supposed to happen: minimal enrollments, more people losing insurance than gaining it, soaring costs. Reality, so far, has begged to differ, delivering above-predicted sign-ups, a sharp drop in the number of Americans without health insurance, premiums well below expectations, and a sharp slowdown in overall health spending.

the biggest secret of the Republican triumph surely lies in the discovery that obstructionism bordering on sabotage is a winning political strategy. From Day 1 of the Obama administration, Mr. McConnell and his colleagues have done everything they could to undermine effective policy, in particular blocking every effort to do the obvious thing — boost infrastructure spending — in a time of low interest rates and high unemployment.

This was, it turned out, bad for America but good for Republicans. Most voters don’t know much about policy details, nor do they understand the legislative process. So all they saw was that the man in the White House wasn’t delivering prosperity — and they punished his party.

Myth: Nonviolent struggle’s major tactic is amassing large concentrations of people. This idea is widespread because the big protests are like the tip of an iceberg: the only thing visible from a distance. Did it look like the ousting of Mubarak started with a spontaneous mass gathering in Tahrir Square? Actually, the occupation of Tahrir Square was carefully planned, and followed two years of work.

You can start with tactics of dispersal, such as coordinated pot-banging, or traffic slowdowns in which everyone drives at half speed. These tactics show that you have widespread support, they grow people’s confidence, and they’re safe.

Myth: Nonviolence might be morally superior, but it’s useless against a brutal dictator. Nonviolence is not just the moral choice; it is almost always the strategic choice. “My biggest objection to violence is the fact that it simply doesn’t work,” Popovic writes. Violence is what every dictator does best.

The scholars Erica Chenoweth and Maria J. Stephan analyzed campaigns of violent and nonviolent revolution in the last century (their book, “Why Civil Resistance Works,” uses Otpor’s fist as its cover image) and found that nonviolence has double the success rate of violence — and its gains have been more likely to last.

laughter is 10 ten times more powerful than scream. Nothing breaks people’s fear and punctures a dictator’s aura of invincibility like mockery — Popovic calls it “laughtivism.”

Most people don’t care about human rights. They care about having electricity that works, teachers in every school and affordable home loans. They will support an opposition with a vision of the future that promises to make their lives better.

on a tactical level, decentralization was critical. Otpor had only two rules: You had to be anti-Milosevic and absolutely nonviolent. Follow those rules, and you could do anything and call yourself Otpor. This kept activists feeling busy, useful and important.

Myth: Police, security forces and the pro-government business community are the enemy. Maybe, but it’s smarter to treat them like allies-in-waiting. Otpor never taunted or threw stones at the police. Its members cheered them and brought flowers and homemade cookies to the police station.

I lived in Chile when the opposition to Augusto Pinochet made mistake after mistake; advice from Otpor might have shortened the dictatorship by years. Had the Occupy movement in the United States adopted these tactics, it might still be a relevant force.

In the past, drug abuse deaths were more common in middle-aged blacks than in middle-aged whites. Now they are more common in whites. The same pattern holds for deaths from alcoholic cirrhosis of the liver. The suicide rate for whites was four times that of blacks.

Could people be taking drugs and killing themselves as a response to the economic slowdown? Maybe. But, if so, Dr. Deaton and Dr. Case said, then why aren’t people in other countries responding the same way?

Recent reports of illness and disability might provide some clues. More middle-aged whites report that their general health is not good; and, more report chronic pain

older people are actually doing better — less addiction, disability rates falling.

how much of what they are seeing might be attributed to the explosive increase in prescription narcotics.

the people who report pain in middle age are the people who report difficulty in socializing, shopping, sitting for three hours, walking for two blocks.

Dr. Deaton envisions poorly educated middle-aged white Americans who feel socially isolated are out of work, suffering from chronic pain and turning to narcotics or alcohol for relief, or taking their own lives. Starting in the 1990s, he said, there was a huge emphasis on controlling pain, with pain charts going up in every doctor’s office and a concomitant increase in prescription narcotics.

Dr. Deaton noted that blacks and Hispanics may have been protected to an extent. Some pharmacies in neighborhoods where blacks and Hispanics live do not even stock those drugs, and doctors have been less likely to prescribe them for these groups.

So we're all the same after all.Under the right conditions - no control over your life, low pay, no job, little in the way of job prospects, no healthcare, little education, families break down when the man can't be the breadwinner, and then along comes poor health, substance abuse, depression, despair - all those ills that were blamed on black people's supposed lack of morals.Now that white kids are dying of heroin we need to change the laws, end the war on drugs, legalize pot, and change how we talk about what were formerly known as 'junkies'.White men are in despair as a result of economic problems, white kids are doing hard drugs in numbers that everyone's starting to notice, and AIDS is plaguing white communities, and now we need to care. So we're all human?

Because white people are depressed over their diminution in society by the policies of the Federal Government, the education system, racial animosity and biased media outlets that are rampant through the society. These doctors are clueless liberals that will try to find any reason to blame, other than the truth. It's not the drugs, it's what is causing them to want the drugs. White males have been denigrated for the past 50 years. The effects have to be building up and weighing on them.

John is a trusted commenter Boston 6 hours ago No, their diminution in society came from globalized capitalism. A lot of these working class white people were Reagan voters. I'm the same age as them, I saw it happen. They thought they were getting "Morning in America" but instead they got morning for Walmart and sunset for the working class. That's enough to make anybody turn to pills and booze.

DougH Lithonia, GA 7 hours ago To some extent, it's of their own making. High school educated whites tend to vote Republican. Over the last 30 years, Republicans have sold them a bill of goods. They abandoned unions, opposed increases in the minimum wage, and opposed regulation, including safety, wage fairness, etc.So now they are paid less. They have no way of changing that (short of high education) and the big beneficiaries of lower taxes have been the businesses and owners that for which they work. Did those owners bless the workers with the fruits of their benefits? Of course not. They kept the reduced expenses as profit, increased CEO wages, and kept cutting benefits before finally shipping their jobs overseas.Perhaps, if they stopped voting against their own interests, they would fair better.

dw659 Chicago 8 hours ago Why? Simple. Because to males, a 'loss of control' is an unacceptable change. 200 years of being 'in control' just because you are born white and male is ending. Many men can't face a world where they are of 'lower status' than women, blacks, Hispanics, Asians, etc. They don't want to live in that world.....

dale south africa 5 hours ago Its true ! I am a conservative man and i live i johannesburg. I cant imagine what it must be like respecting all things under the suns . From females, gays blacks etc Children of slaves dictating societies . oprah picking presidents. the bully is not allowed to be at his natural best and strongest with this new liberal socialist agenda , everyone equal attitude. im not white but if I was who would want that

Linda is a trusted commenter Oklahoma 54 minutes ago I know so many white men in this small town I live in who never had anything to do with their children. They didn't care about anybody through their productive years and now they're surprised that nobody cares about them.

AC USA 5 hours ago Could it be because these guys have no close family ties? They are the ages that their parents are probably in nursing homes or already passed away. These blue collar, high school educated guys fathered unwanted children with women to whom they may or may hot have been married and divorced. But now at middle age comes time for them to feel wanted and valued by their progeny (dad, dispense some life wisdom to us, help us with college, getting married, a down payment on a house, take your grand-kids fishing, etc.), but they dumped their kids by not wanting to pay child support, or having a bad attitude and not helping their kids at all past age 18. So they kids moved on without dad's love and "support" (monetary or emotionally). The "all for myself mentality" they have espoused has finally come home to roost. There is no going back in time, they are all alone, have no purpose as jobs are hard to come by at that age - even more-so blue collar ones - so they drink/take pills to dull the pain, then overdo it.

suzinne bronx 5 hours ago Think white families more often DO NOT stick together. At middle age and white, have ZERO contact with any family members. By the time I was 16 most had died, moved away or become estranged. Know this amps up my chances for suicide, and that's probably going to pan out too. Flag

Paul '52 is a trusted commenter NYC 2 hours ago The is the first cohort to experience the phenomenon that if you do the same job as your parents you won't do as well or better. These are the auto workers, the airport baggage handlers, the truck drivers. They are, in fact, more productive than their fathers, but they're not paid as well and they don't have pensions. And the disappointment is taking its toll.

The Chinese authorities have acted after a string of poor economic figures showed that previous efforts to boost exports and growth against the headwind of an overvalued currency had failed.

As part of the devaluation, the authorities said they would widen the criteria to include more market information, allowing the currency to rise or fall more rapidly than before. The central bank sought to reassure financial markets that it was not embarking on a steady depreciation.

One financial analyst said the devaluation, which pushed the yuan to a four-year low, heralded a tidal wave of cheap goods from Asia as other south east Asian countries followed suit.

Unlike the pound and other major currencies, the yuan’s value is determined each day by the People’s Bank based on movements the previous day.

Albert Edwards, analyst at Societe Generale, said the yuan had become overvalued against the dollar in recent years and was unsustainably high relative to other major currencies.

A spokesman said the downward movement of the currency was a result of a project to liberalise its management and not a deliberate attempt to drive down its value.

Oil prices remained below $50 a barrel, down from more than $110 a barrel last summer when the slowdown in China first became apparent. The prices of key industrial and construction metals – nickel, copper and aluminium – hit six-year lows.

The U.S. economy has been steadily adding jobs, but is struggling to break out of a sluggish growth trajectory amid turmoil in overseas economies.

Excluding the volatile food and energy categories, so-called core prices rose 0.1%, their smallest increase since August.

Even as unemployment has fallen to 5%, workers have seen only modest wage growth. Wednesday’s report showed gasoline prices have fallen by 19.7% since December 2014, saving many Americans hundreds of dollars. But those savings from have so far failed to translate into robust consumer spending.

All of the pathologies evident in the 1930s, which weighed so heavily on the minds of the EU’s architects, are resurgent—the high unemployment, the economic extremes, the perverse austerity policies, the popular backlash against ineffectual parliamentary politics, and the resulting ultra-nationalism.

For the right, the remedy was a return to a more laissez-faire model, even though there was little evidence that Europe’s social market had anything to do with the economic slowdown

For the first four postwar decades, democratically mobilized citizens in strong nation-states anchored the social part of Europe while the European Economic Community, predecessor of the EU, promoted the market part

WHEN JACQUES DELORS, a moderate French socialist, launched a full-blown European Union in the 1980s, the hope was to expand social Europe and market Europe in tandem. But in the actual Maastricht Treaty of 1992—Europe’s de facto constitution—free movement of goods, services, capital, and people are fundamental rights, and social protections are add-ons

IF EUROPE NEEDED ONE more assault to further undermine the model, it came via the refugee crisis. The crisis laid bare two awful fragilities. The first is the dysfunction of the EU as a confederation with multiple veto points and little capacity for leadership in a crisis

Politically, the collision of a lingering and needless economic crisis with a random refugee crisis has energized nationalism, both moderate and neo-fascist. In Norway, Sweden, Denmark, the Netherlands, France, Finland, Austria, and elsewhere, the second- or third-strongest party is far-right populist. Much of this support is working-class, at the expense of social democrats.

he refugee crisis also makes clear that much of Europe’s social compact assumes a common national identity, to which foreigners do not easily fit in.

Europe might be able to accept a million refugees economically, but it cannot do so politically. The refugee crisis is simply an overlay on a deeper crisis of solidarity and common purpose. Unless there is a renewal of popular energy and a burst of progressive leadership, the three-decade era of broadly shared prosperity—les trente glorieuses, as the French call it—will be remembered as a historical blip. The EU aspired to combine that impossible trinity of the French Revolution: liberty, equality, and fraternity. All three are now on the defensive.

Satellite pictures show what US analysts say are deployments of surface to air missiles and facilities with military use, such as runways and radar.

The slowdown in spending comes as president Xi Jinping seeks to craft a more efficient and effective People’s Liberation Army (PLA), the world’s largest standing military.

Analysts say that for a fraction of the cost of an aircraft carrier – for decades the mainstay of Washington’s ability to project power around the world – the DF-21D missile threatens to alter the military balance in the Pacific.

Beijing defends its actions as being within its sovereign rights and denies Washington’s assertions that they threaten freedom of navigation.

The defence budget was determined by both China’s defence needs and the national economic situation, she added – the country saw its weakest growth in a quarter of a century last year.