200 Years Economic Growth Just a Blip?

[Zippyjuan]

Interesting article I found which suggest we are nearing the end of an unusual historic economic period and are returning to possibly centuries of stagnation again.

http://nymag.com/news/features/economic-growth-2013-7/

The Blip

What if everything we’ve come to think of as American is predicated on a freak coincidence of economic history? And what if that coincidence has run its course?

Picture this, arranged along a time line.

For all of measurable human history up until the year 1750, nothing happened that mattered. This isn’t to say history was stagnant, or that life was only grim and blank, but the well-being of average people did not perceptibly improve. All of the wars, literature, love affairs, and religious schisms, the schemes for empire-making and ocean-crossing and simple profit and freedom, the entire human theater of ambition and deceit and redemption took place on a scale too small to register, too minor to much improve the lot of ordinary human beings. In England before the middle of the eighteenth century, where industrialization first began, the pace of progress was so slow that it took 350 years for a family to double its standard of living. In Sweden, during a similar 200-year period, there was essentially no improvement at all. By the middle of the eighteenth century, the state of technology and the luxury and quality of life afforded the average individual were little better than they had been two millennia earlier, in ancient Rome.

Then two things happened that did matter, and they were so grand that they dwarfed everything that had come before and encompassed most everything that has come since: the first industrial revolution, beginning in 1750 or so in the north of England, and the second industrial revolution, beginning around 1870 and created mostly in this country. That the second industrial revolution happened just as the first had begun to dissipate was an incredible stroke of good luck. It meant that during the whole modern era from 1750 onward—which contains, not coincidentally, the full life span of the United States—human well-being accelerated at a rate that could barely have been contemplated before. Instead of permanent stagnation, growth became so rapid and so seemingly automatic that by the fifties and sixties the average American would roughly double his or her parents’ standard of living. In the space of a single generation, for most everybody, life was getting twice as good.

At some point in the late sixties or early seventies, this great acceleration began to taper off. The shift was modest at first, and it was concealed in the hectic up-and-down of yearly data. But if you examine the growth data since the early seventies, and if you are mathematically astute enough to fit a curve to it, you can see a clear trend: The rate at which life is improving here, on the frontier of human well-being, has slowed.

If you are like most economists—until a couple of years ago, it was virtually all economists—you are not greatly troubled by this story, which is, with some variation, the consensus long-arc view of economic history. The machinery of innovation, after all, is now more organized and sophisticated than it has ever been, human intelligence is more efficiently marshaled by spreading education and expanding global connectedness, and the examples of the Internet, and perhaps artificial intelligence, suggest that progress continues to be rapid.

But if you are prone to a more radical sense of what is possible, you might begin to follow a different line of thought. If nothing like the first and second industrial revolutions had ever happened before, what is to say that anything similar will happen again? Then, perhaps, the global economic slump that we have endured since 2008 might not merely be the consequence of the burst housing bubble, or financial entanglement and overreach, or the coming generational trauma of the retiring baby boomers, but instead a glimpse at a far broader change, the slow expiration of a historically singular event. Perhaps our fitful post-crisis recovery is no aberration. This line of thinking would make you an acolyte of a 72-year-old economist at Northwestern named Robert Gordon, and you would probably share his view that it would be crazy to expect something on the scale of the second industrial revolution to ever take place again.

Long article- more at link.

In a shorter period- others suggest that our post- WWII boom was a singular event- a fluke where the US was the only economic power in the world left standing and that led to our great growth and now that the rest of the world has been catching up, we will no longer see such growth again.

Gordon has two predictions to offer, the first of which is about the near future. For at least the next fifteen years or so, Gordon argues, our economy will grow at less than half the rate it has averaged since the late-nineteenth century because of a set of structural headwinds that Gordon believes will be even more severe than most other economists do: the aging of the American population; the stagnation in educational achievement; the fiscal tightening to fix our public and private debt; the costs of health care and energy; the pressures of globalization and growing inequality. Over the past year, some other economists who once agreed with Gordon—most prominently Tyler Cowen of George Mason University—have taken note of the recent discoveries of abundant natural-gas reserves in the United States, and of the tentative deflation of health-care costs, and softened their pessimism. But to Gordon these are small corrections that leave the basic story unchanged. He believes we can no longer expect to double our standard of living in one generation; it will now take at least two. The common expectations that your children will attend college even if you haven’t, in other words, or will have twice as rich a life, in this view no longer look realistic. Some of these hopes are already outdated: The generation of Americans now in their twenties is the first to not be significantly better educated than their parents. If Gordon is right, then for all but the wealthiest one percent of Americans, the rate of improvement in the standard of living—year over year, and generation after generation*—will be no faster than it was during the dark ages.

Gordon’s second prediction is almost literary in its scope. The forces of the second industrial revolution, he believes, were so powerful and so unique that they will not be repeated.

Another problem is maintaining exponential growth. Improvements need to be exponential as well.

But even if they could, that would not be enough. “The growth rate is a heavy taskmaster,” Gordon says. The math is punishing. The American population is far larger than it was in 1870, and far wealthier to begin with, which means that the innovations will need to be more transformative to have the same economic effect. “I like to think of it this way,” he says. “We need innovations that are eight times as important as those we had before.”

The article traces rises in women's rights, civil rights, and even immigration to economic booms and busts. Technology freed women from having to send all day on household chores to doing more things. Booms led to more jobs for minorities- blacks and immigrants. When the last bubble burst in 2006, illegal immigration came to a halt and even went negative as Mexicans found more opportunity at home and less opportunity in the US.

One recent afternoon, I met Gordon at his house, and we drove to lunch through Northwestern’s main campus. Around Gordon and me—bicycling across the quad, wandering half-drunk into the streets—were the members of the first American generation who would be no more educated than their parents. “You look at the numbers, at how much more it costs now to get ahead—all the tutors, the college-prep courses, in some cases the private admissions consultants—and it is just astonishing,” Gordon said. What he was describing was a society where the general privilege of simply being American was once again losing out to the specific, inherited privilege of being born rich.

[acptulsa]

The only 'cycle' we're caught up in is the cycle wherein generations of success lead to a kind of complacency which causes people to see success as something that just happens, regardless of whether you stick by the founding and guiding principles which are in fact the real key to the thing. Which, in turn, is exploited by people who want to print funny money for profit, and kill people for profit, and micromismanage the snot out of everyone because that's how you convince people it's a good idea to bribe you.

'There is danger of disappointment and disaster unless there be a wider comprehension of the limitations of the law. The attempt to regulate, control, and prescribe all manner of conduct and social relations is very old. It was always the practice of primitive peoples. Such governments assumed jurisdiction over the action, property, life, and even religious convictions of their citizens down to the minutest detail. A large part of the history of free institutions is the history of the people struggling to emancipate themselves from all of this bondage.'--Calvin Coolidge

But when they're finally free of that bondage, they do indeed remain vigilant about staying out of it. Unfortunately, the lesson tends to get a bit watered down by the time one gets to their great-great-grandchildren.

In any case, I'm far more receptive to Calvin Coolidge's take on the matter than a couple of random New York Intellectual Idiots. Harding and Coolidge took a terribly moribund economy, sliced a ton of socialism out of it, and turned it into the Roaring Twenties.

We could use another Roaring Twenties.

[devil21]

It's a bad sign when Zippy is posting doom articles.

[oyarde]

Well , everyone knows we are stagnated , and I expect no improvement .Does this mean Danke will buy me a drink ?

[Spikender]

It's a bad sign when Zippy is posting doom articles.

I for one welcome our new "The End is Nigh" Zippy.

[Lucille]

Zippy found a doom article that aligns with his prog ideology, which conveniently ignores the fascist ruling class' responsibility for the decline.

At some point in the late sixties or early seventies, this great acceleration began to taper off. The shift was modest at first, and it was concealed in the hectic up-and-down of yearly data. But if you examine the growth data since the early seventies, and if you are mathematically astute enough to fit a curve to it, you can see a clear trend: The rate at which life is improving here, on the frontier of human well-being, has slowed.

Yeah, WWII led to capital flight to the US, and a manufacturing boon. Then the ruling class began to dismantle it around that same time. What a coincidence. Then NAFTA, of course, stuck a fork in it.

Then, perhaps, the global economic slump that we have endured since 2008 might not merely be the consequence of the burst housing bubble, or financial entanglement and overreach, or the coming generational trauma of the retiring baby boomers, but instead a glimpse at a far broader change, the slow expiration of a historically singular event. Perhaps our fitful post-crisis recovery is no aberration.

Not one mention of the massive amount of regs the ruling class continues to pile on every $#@!ing industry in the country. I wonder why...

http://www.nam.org/Data-and-Reports/...Full-Study.pdf

This is not a bad way of thinking of the cultural corrections that in retrospect we will probably categorize as Obama-ism: The renewed skepticism about capitalism, the urgency of the problem of inequality, the artisanal turn away from modernity, the rapid decline of American exceptionalism. We may be making provisions for the economy that we actually have.

"Skepticism" about capitalism is what led to this fascist joke of a country. Progs kill me. They regulate, control, central plan-and destroy and destroy and destroy-and then look everywhere but their utter failure of an ideology and themselves for the reason.

http://www.ronpaulforums.com/showthr...aling-our-jobs!


http://www.ronpaulforums.com/showthr...ensing-must-go
http://www.ronpaulforums.com/showthr...se-you-ve-seen

"During the 1950s, only five percent of American workers needed a permission slip from the government to work. Today, that figure is almost 40 percent."

http://blog.independent.org/2010/03/...ide-the-state/

When the state produces unworkable or unsatisfactory conditions in any area of life, and therefore elicits complaints and protests, as it has for example in every area related to health care, it responds to these complaints and protests by making “reforms” that heap new laws, regulations, and government bureaus atop the existing mountain of counterproductive interventions. Thus, each new “reform” makes the government more monstrous and destructive than it was before. Citizen, be careful what you wish for; the government just might give it to you good and hard.

"Prosperity depends entirely upon a minority being allowed to function. We do not mean a class, but a certain type of mind. It exists in various degrees and forms-business men and farmers and foremen and housewives, the people who always somehow get things done, get some practicable result from whatever material is at hand and whatever other people they must work with. They are self-starters. And they are seldom conspicuous.

The self-starters are never college professors nor politicians. Neither do we mean inventors, intellectuals, artists or writers-the creative artist is naturally anti-social. The self-starters, of course, use what more original minds discover, and their particular function is to hold everything together. One can't always see how they do it...

In an effort to regulate everything those people may be easily eliminated. They have been very nearly exterminated in Russia. Bureaucracy smothers them. And the set-up goes with them."
--Isabel Paterson

"The test of fascism is not one's rage against the Italian and German war lords. The test is — how many of the essential principles of fascism do you accept and to what extent are you prepared to apply those fascist ideas to American social and economic life? When you can put your finger on the men or the groups that urge for America the debt-supported state, the autarkical corporative state, the state bent on the socialization of investment and the bureaucratic government of industry and society, the establishment of the institution of militarism as the great glamorous public-works project of the nation and the institution of imperialism under which it proposes to regulate and rule the world and, along with this, proposes to alter the forms of our government to approach as closely as possible the unrestrained, absolute government — then you will know you have located the authentic fascist.

"But let us not deceive ourselves into thinking that we are dealing by this means with the problem of fascism. Fascism will come at the hands of perfectly authentic Americans, as violently against Hitler and Mussolini as the next one, but who are convinced that the present economic system is washed up and that the present political system in America has outlived its usefulness and who wish to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing millions every year and spending them on all sorts of projects through which such a government can paralyze opposition and command public support; marshaling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination all to be done under the authority of a powerfully centralized government in which the executive will hold in effect all the powers with Congress reduced to the role of a debating society. There is your fascist. And the sooner America realizes this dreadful fact the sooner it will arm itself to make an end of American fascism masquerading under the guise of the champion of democracy."
-- John T. Flynn, As We Go Marching, 1944

Progs got their fascist empire, and now they're trying to blame it on everyone but themselves. It's just a fluke! LOL

[luctor-et-emergo]

Another problem is maintaining exponential growth. Improvements need to be exponential as well.

Amen. But this is exactly why we cannot have an economy based on eternal debt paid of by more debt. This is exactly what is stimulating this need for exponential growth.

[acptulsa]

Amen. But this is exactly why we cannot have an economy based on eternal debt paid of by more debt. This is exactly what is stimulating this need for exponential growth.

Meanwhile, we have a host of regulatory agencies designed to stifle any 'improvement' which comes from an entity not rich enough to bribe them and bribe them well. And lo and behold, said big, fat, rich, complacent entities don't seem to be anywhere near as good at concocting 'exponential improvement' as a whole swarm of individuals innovating for the purpose of surviving and getting ahead in life.

Cycles are not 'natural'. They are made, not born.

[Lucille]

Progressivism Is Ideological Ebola
http://www.lewrockwell.com/2014/10/c...logical-ebola/

The Western World was on the cusp of something really special during the 1800′s. The Industrial Revolution pulled the masses out of a brutish of filth, sound money was used internationally as a medium of exchange, and the ideas of Classical Liberalism dominated the minds of the opinion molders.

That’s not to say that everything was perfect. Governments still existed, along with their lapdog court intellectuals. These parasites may have endured a massive hit from the ideas of liberty & freedom, but they were still in the game. Their existence was never seriously questioned.

In order to squash the tremendous threat to their control over human beings, the “Old Order” would need to gain the upper-hand in the realm of ideas once again.

They did….and the 1900′s were the result. Government wars commenced on an unimaginable scale. Human life and property were turned into mountains of ashes. The destruction of sound money swept across the globe, and power was centralized like never before.

What a turnaround!

Liberty and Freedom were barely in their infancy. The gluttons for power were smart enough not to hesitate. They did not rest on their laurels, and were able to get back in the driver’s seat.

How did the gluttons for power pull it off? How were they able to place the mass of humanity back onto the road that leads to squalor. What were the ideas that they used?

Those ideas would go by the very oxymoronic term: “Progressivism”. Ever expanding government control, over every aspect of life, would be the benchmark of “Progress”.

We are now 100+ years into The Progressive Era, and are neck-deep in government power. If the ideas of Liberty were meant to have a baptism by fire, the 1900′s to the present is it! This writer thinks it’s well passed the time push forward.

In order to do so, we must concentrate on the most powerful weapon of all: ideas.

The ideas of Liberty must once again unseat the gluttons of power. Humanity must retake the upward momentum that was snatched away. The 1700-1800′s do not have to be a blip in humanity’s long history of living in filth and squalor, under the boot of the political few.

Fortunately, author James Ostrowski has taken a sledgehammer to the ideas of Progressivism. He has written a book titled: Progressivism: A Primer on the Idea Destroying America.

Ostrowski writes:

America will continue its downward spiral until this false and destructive ideology is fully understood and rejected…Where do we stand with progressivism at this time? Virtually every aspect of our lives is to some extent or entirely controlled or regulated by the state.

Ostrowski thoroughly cuts through the multitude of progressivism’s branches, and most importantly strikes hard at the root. He covers the following important topics:

• What is Progressivism?
• The Origins of Progressivism
• The Failure of Progressivism
• Progressivism’s Archenemy – True Liberalism
• Progressivism’s Vanquished Foe – Conservatism
• War is the Health of the Progressive State
• Progressivism as Utopianism
• How to Bury Progressivism and Restore Liberty

Progressivism has to be buried. Arm yourself intellectually with Ostrowski’s fantastic book, and help to get the ideas of Liberty back in the position of dominance.

The quality of our lives, as well as the lives of those yet come, literally depend upon it.

[devil21]

Cycles are not 'natural'. They are made, not born.

Depends on what the cycle is. Economic cycles are closely related to astrological/astronomical cycles. It's sorta 'how the elites roll'.