David Cay Johnston is a US Purlitzer prize winning journalist for whom I have high regard. His latest Reuters blog begins by saying:
A broad swath of official economic data shows that America and its people are in much worse shape than when we paid higher taxes, higher interest rates and made more of the manufactured goods we use.
The numbers since the turn of the millennium point to even worse times ahead if we stay the course.
Worth reading.
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I strongly suspect government’s both here and the US would dearly love to recreate the economic conditions that would allow them to reflate the bubble again!
It’s a win-win sutiation for them.
The “free” market effectively gets to continue a policy of wage restraint and consumers effectively take on the growth of the economy themselves by taking on 95% mortgages and going massively into debt through bank loans.
Government’s and capital can then abdicate their responsibility to society of creating real well paid jobs to encourage growth.
The consumer can take the load! 🙂
But surely not just the tax regime but an outcome of globalisation. I originally thought that the ant- globalisation protestors were just dark age luddites trying to prevent economic progress. I now realise that it has been a giant swindle. It has transferred the lower paid jobs to the east leading to massive monetary surpluses in that region which have been recycled into the west as loans to fund the credit crisis. The impact has been largely on the poorest in society with the wealthy sucking up the benefits.
You might enjoy the book I wrote on tax havens and globalisation with Ronen Palan and Christian Chsvagneux
“To give you a hint of how bad it is in Europe today, the most recent retail sales out of Netherlands showed a decline of 8.7% year-over-year in April.23 In Spain, retail sales fell 9.8% year-on-year in April, which was 6% greater than the revised drop of 3.8% in March”
http://www.zerohedge.com/news/eric-sprott-presents-ministry-untruth
Skidelsky’s ‘Labor’s Paradise Lost’ and Eichengreen’s ‘Share the Work’, both on Project Syndicate this month, are well worth reading, as they compare the 1930s to today, look at some of Keynes’s thoughts from that period (similar to J S Mill’s, that the purpose of economic growth is to create time for leisure), and another poke is given to Bernanke as to his previous self.