Deflation, recession and globalization - Jason, your suggestion of this blog has accomplished at least one singular good. It has gotten my economic ravings off laststraw. If you want to watch the voice of the estabblishment [NYT] dance see http://www.nytimes.com/2003/05/18/business/yourmoney/18FEDD.html?pagewanted=all&position=. They conflate the jobless recovery [1992-94] with persistant global economic weakness and the decline of the dollar. They left out the trade deficit. They all do fit together. The world economic problem is that globalization has produced war too many goods chasing too few willing consumers [yes this does included such things as distribution of wealth, purchasing power, etc but we will leave this aside for the moment. In the short run globalizatio produces lower prices at the mall. In the medium run it dries up job creation. The so-called 'good jobs with benefits' are with precisely those very large corporations that are under the greatest market pressure to outsource overseas and have the administrative structures to do so. The top corporations in the US have been net shedders of jobs since the 1970's. The published figures are bad enough. The reality is worse as the two largest employers now are Wal-Mart and UPS. More education only postpones the problem for a short bit. The HS dropout's job at a textile mill goes to China faster than the IT professional's goes to Bangalore but the same race to the bottom gets you to the same place. A fully globbalized economy means equalization of nominal wages without an equalization of living costs. It is a slow process, like boiling a lobster. However it has been happening over decades and shows no sign of ending. Now the solution to this from an employment and value added standpoint is small business. However, every tax move we have made since 1986 and every regulatory move we propose just makes it harder for the micro and small business to get financing and deal with the maze of laws, regulations, insurance rules, etc. The nanny state works when large entities - government agencies, unions, megacorps interact. Start a one person business and stare at the maze of paper [collated and undated in no one place]. Now add an employee...We are fated to live in interesting times.
posted by scott 6:22 AM