Post WW2 International
Economic Competitive Adjustment and the New Normal |
Post WW2 pent-up demand increased
AD increasing US wages and Profits. |
Cold War to 1980 AD > AS |
Neo Liberal Era 1980- 2008 AS > AD | Three Problems of the AS > AD Era in a Democracy | ||
Full Employment Goal led to Inflation, Debtors Paradise |
Business Responded Leading
to |
1) Sustained Deflation has |
2) Globalization Failed |
3) Pickett's R > G and Back to Equilibrium |
Structural Causes | Structural Causes | Losers | Winners | Winners and Losers |
Historical Long Run? Return on Capital Growth R > Growth rate of the Economy G. 90% of Income Gains Went to Top 1% and since 2012 most (70% of that 90%) went to Top 1/10 of 1%. Credit to consumers, business and governments expanded to equate AD with AS. |
Strong Unions National Markets Central Government Strong Central Bank Weak Finance Weak |
Weak Unions Globalized Markets Central Government Weak Central Bank Strong Finance Strong |
Creditors lost as
Real Value Up But
Some Don't Pay |
Debtors: Can't Wont Pay as Deflation Kills Wage Growth and Increases Real Debt Value |
World's Very
Poor and Very, Very Rich Win Vast Middle of Rich Western Nations are Stagnate |
|
Economic Results Sustained Inflation Wages Share All Time High Corporate Profits All Time Low Inequality Low |
Economic Results Secular Deflation Wages Share All Time Low Corporate Profits All Time High Inequality High |
Center Left Parties lost as lower wages moved voters to right leaning parties |
Populist Nationalist Parties: attract voters with renationalize and form anti-austerity policies |
|