In this Op Ed piece by David Stockman, the NY times hits on four deformations of the US economy created by policy mistakes of the last 40 years, and where they leave us today. Remember David Stockman? He was director of the Office of Management and Budget under Ronald Reagan. So this gives him a measure of credibility in placing blame squarely on his own party for their particular failures. His four deformations are:
- Failure to balance international accounts and the resulting $8 trillion accumulated trade deficit
- Explosion of government debt which will take it to Greek style levels
- The vast unproductive expansion of the financial sector
- The hollowing out of the larger American economy.
To focus on this one just a bit more:
The fourth destructive change has been the hollowing out of the larger American economy. Having lived beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore. In the past decade, the number of high-value jobs in goods production and in service categories like trade, transportation, information technology and the professions has shrunk by 12 percent, to 68 million from 77 million. The only reason we have not experienced a severe reduction in nonfarm payrolls since 2000 is that there has been a gain in low-paying, often part-time positions in places like bars, hotels and nursing homes.
I will soon be posting on the similarities between the current American system of Political and Economic power concentrated in the hands of few today and how that compares to pre-revolutionary France. The current manifestations of those power imbalances are different than they were then. We do not have either a dominant church or nobility, but we have power groups that act in a similar fashion. My post, perhaps later today, is intended to cautionary and certainly no endorsement of the type of revolution that occurred in France. Yet, if the Powers-That-Be do not heed the interests of the vast Third Estate, a revolution they will get. Hopefully a revolution at the ballot box. For no nation can stand an apocalypse and keep all measures of civility.