Thursday, September 25, 2014
I am officially old.
This has been your edition of simple answers to painful questions.
I agree with your assessment of the economy, but am curious as to what you think the government can do about it. This problem has become much more severe since the Great Recession. The new requirement for substantial non-cash compensation for employees has had the expected impact on the amount of cash left for salaries, as well as increasing the reluctance to hire entry-level people. It's less risky to go for experienced people who can step right into a higher level of responsibility--let someone else do the training.
Would one expect those changes to favor labor or capital?
This isn't tough.
Yes, it is. It's much smaller in some than in others. In some (South Korea and Taiwan, for example), we have seen a mass movement toward better and better-paying work being available.
So, which countries are doing better? Which policies did they pursue? What were the differences between those countries and the countries that have done less well? Where did they start, and where did they end up?
This isn't about ideology. It's about empirics. Which countries that started rich did better than other countries that started rich? Which countries that started middle or poor are doing better now? What are the policy differences between those countries, and do those policy differences match the policy changes over time in the US or contradict them?
Make your case. Show us how South Korea's massive expansion of the financial sector and full-on assault on the trade union movement exists. Or show us how Great Britain's commitment to austerity has improved its position compared to Sweden since the early 2000s.
For liberals, ideology is something to be tested and improved, not something to be derided or worshipped. If you're making your case to liberals, you're going to have to use empirics, rather than appeals to shared disdain.
What are the patterns? What are the anamolies? Why does the US (and Bahrain) keep ending up on the bottom of quality-of-life indices despite its tremendous resources and capacity? Why do other nations, facing greater challenges, respond more effectively?
Dunno about Bahrain, but I'd guess that a big reason the US ends up so low is that you aren't really a single country. Big regional differences, big differences between different parts of the same region… so those parts that are poor drag down those parts that re better-off (and you are decreasing the well-off parts by policies both governmental and social).
Also, while you have a lot of resources, they are increasingly siphoned off by what Galbraith called the Predator State*. Why else do you spend so much on health care for so little results, and resist so ardently any move to implement systems that demonstrably work more efficiently?
*Actually a combination of private interests and the regulatory institutions they've captured.
If so, what is it about the US and Bahrain that makes us uniquely prone to the assault of a predator state, as versus (say) Costa Rica or Sweden?