I would like to make some personal remarks today. It may surprise you when I say this, but it is true at this late date that I still find the stuff I write about—the Human Condition—almost impossible to believe. As I've reported this stuff these last five years, and as the evidence became more and more overwhelmimg that human beings are very fucked up indeed, I've thought oh, c'mon, how can this be? For most of my life I knew things were bad, but, really, this bad? Give me a break!
Let me give you an example I've written about frequently, especially lately. Two economists, one from Princeton and the other from the University of Chicago—my alma mater—have started a blog called House of Debt. Well, good for them!
Their post today was called The Most Important Economic Chart. I have published a version of this chart maybe a dozen times, most recently in I Do Not Make This Shit Up. (And see the follow-up Knowing When Someone Is Blowing Smoke Up Your Ass.) And I agree with them, it is a very important chart.
If you must know only one fact about the U.S. economy, it should be this chart:
The chart shows that productivity, or output per hour of work, has quadrupled since 1947 in the United States. This is a spectacular achievement by an advanced economy.
The gains in productivity were quite widely shared from 1947 to 1980. Real income for the median U.S. family doubled during this time just as output per hour of work performed doubled. The rising tide was lifting all boats...
So [in 2014] where are all of the gains in productivity going? Two places:
First, owners of capital are getting a bigger share of GDP than before. In other words, the share of profits has risen faster than wages. Second, the highest paid workers are getting a bigger share of the wages that go to labor.
The net result is that families at the higher end of the income distribution have received more of the income produced by the economy since the 1980s. The latter fact has been documented meticulously by the brilliant research of Thomas Piketty and Emmanuel Saez.
The widening gap between productivity and median income is a defining issue of our time. It is not just about inequality – important as that issue is. The widening gap between productivity and median income has serious implications for macroeconomic stability and financial crises. Our forthcoming book takes up these issues in more detail.
We will also discuss some of these issues in coming posts.
So, why are Atif Mian (Princeton) and Amir Sufi (U of C) writing this stuff?
Most obviously, they are publicizing their forthcoming book.
OK, I can buy that. If I had a book coming out, I would do the same thing.
But on a deeper level, and here's where the rubber meets the road, what are the readers of this House of Debt post supposed to do with this information?
Before I rattle on about this, you need to know that I know full well what I'm doing when I talk about the shit I do not make up. That shit is part of my general indictment of Homo sapiens. I am talking about what humans are, not what they "think" they are. And I think we can say in 2014 that the jury is in and verdict has been read—non compos mentis (not guilty by reason of insanity).
But what are Atif Mian and Amir Sufi doing, aside from publicizing their book? Well, one presumes that these denizens of Flatland are really saying hey look, this income/productivity thing is fucked up! maybe we ought to do something about this!
If that's not what they're actually doing, then who cares about the chart? In that case I guess it would be all about the book. But let's give these academic economists the benefit of the doubt, choosing to believe that they are do-gooders. We've got lots of do-gooders in the world, or at least would-be do-gooders.
On the possibility of doing good, perhaps it would behoove Mian and Sufi to look at the recent remarks of Jason Furman, head of the White House Counci of Economic Advisors.
President Obama’s top economic adviser said Tuesday that the administration’s response to the financial crisis had averted an outcome worse that the Great Depression, and suggested that lawmakers’ ongoing resistance to investing in infrastructure has helped intensify the increasing economic inequality in the U.S.
Speaking at the Atlantic Economy Summit in Washington, Council of Economic Advisers Chairman Jason Furman [image left] said that the Obama administration’s initial response to the financial crisis was effective at preventing much more serious damage.
“If you look at the amount of wealth that was wiped out at the onset of the crisis, it was about five times as large as the shock that led to the Great Depression,” said Furman. “But the outcome was completely different.”
Here we observe the characteristic self-serving bullshit we always see in from politicians and their representatives. Sigh. But now Furman addresses the inequality problem, which as gotten even worse on Obama's watch in the aftermath of the financial crisis.
However, he said, slower-than-usual growth in worker productivity has continued to be one of the challenges holding back the economy. Furman contrasted the high-productivity-growth years of the 1950s and 1960s with the present day, noting that massive public works projects, such as the Interstate Highway System, allowed the economy to make full use of technological innovations, such as improvements in vehicle design and the invention of synthetic rubber.
Today, he said, “Public investment and innovation could be supplementing technological innovations and increasing productivity growth.” The productivity growth that would result, he suggested, would lead to higher wages for workers, and help reduce income inequality.
AFL-CIO president Richard Trumka, who spoke on a different panel, took issue with the connection between productivity growth and wages, noting that in recent decades, “productivity has doubled and wages have stayed flat. The compact that used to exist between working people and capitalism has been shredded.”
Did you understand what Furman said? He wants implement policies to improve productivity to achieve higher wages for workers.
This beggars belief, but there it is.
The problem, as Atif Mian and Amir Sufi point out, is that productivity has grown and grown, albeit at a lower rate than in much-nostalgized Golden Age in the 1950's and 1960s, while household/family income has stagnated all that time. And that's been going on for about 35 years now. And during Obama's presidency, 99% of the income gains have gone to the top 1% of American wage earners (2009-2012).
Yet Furman says the income inequality problem stems from a lack of productivity growth.
Here we must understand that Furman reports directly to the President. He has the President's ear. Any public remarks the President makes on this and related subjects are based on the input he gets from Furman.
Thus we have overwhelming evidence that Obama has no intention whatsoever of addressing the real causes of wealth & income equality in the United States. He has no intention of leveling with the American public, regardless of his ability to get legislation through the Congress. Even worse, the notion of "intentionality" on Obama's part has no meaning here because he's incapable of being honest with himself.
None of this is surprising because wealthy interests bankroll the Democratic party, although other wealthy interests also bankroll the Republican party. But I am not concerned with the reasons for this abject moral failure today.
If these academic economists (Atif Mian and Amir Sufi) are attempting to do some good in the world by presenting the productivity/income chart above, I must repeat my original question.
What are the readers of that House of Debt post supposed to do with this information?
The simple fact is that there is nothing to be done with it. The political system is utterly corrupt. There is no Good Faith (bona fides). The political system represents elite special interests, and has done so for 35 years now. Would-be do-gooders are utterly powerless to change the situation. This helplessness is the norm, not the exception, in human affairs.
And now I want to finish my personal remarks. What I can't live with (at least easily) is that humans are constantly deluding themselves and each other and nothing ever changes. The Human Condition is a tragic constant, but it is also an elaborate joke. It's a good joke, a funny joke in a dark sort of way, sometimes, but most of the time, for most people, it is not funny.
And I almost forgot to tell you the best part—for Obama, for Furman, for Atif Mian and Amir Sufi, all this stuff I'm telling you lies outside of conscious awareness. Obama and Furman are not aware that they're rationalizing the status quo. These ivory-tower economists are not aware that they deal in abstraction, not realities. Obviously, we have lots of con men running around out here, but by and large humans are utterly taken in by their own bullshit, even those (like Obama or Furman) who give the appearance of helping. Such is the weakness of the conscious mind.
That's the thing which is almost impossible to believe.
In today's example, what do Atif Mian and Amir Sufi think they are accomplishing? Whatever they believe they are accomplishing, they are in fact accomplishing nothing, outside of the fact that publishing that chart may help book sales.
Otherwise, they are breathing air, taking up space and consuming resources like any complex organism needs to do. And so am I. All of this is merely sound & fury signifying nothing.
So this is it. This is the Human Condition. The "why get out of bed" problem seems to get a little worse every day. And it's easy to see why.
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