Bill Bonner, reckoning today from Baltimore, Maryland...
You have probably wondered…
….how come US growth rates have fallen so much? The average growth rate was over 3% per year in the 1960s. In the 1990s, it was over 2%. Now, it’s less than 1%.
Less growth (per capita) means fewer jobs, lower earnings, and less wealth. Who wants that?
And how come wages are falling? The average person has seen his weekly paycheck fall, in real terms, for the last 20 months in a row.
And why, after so much progress in technology, would productivity be going down? Time is the ultimate limit. Productivity measures how much you’re able to get out of it. Rich countries have high productivity. Poor countries – where people still hew the wood and draw the water by hand – have low productivity rates. So, get this, CNBC:
Worker productivity is falling at the fastest rate in four decades
Employers are not only battling inflation and slowing growth, but worker productivity that is falling at the fastest rate in four decades. This has been the first year since 1983 to include three straight quarters of year-over-year drops in average productivity per worker, ADP chief economist Nela Richardson said during CNBC’s recent Workforce Executive Council Town Hall.
Simply put: People are working more and producing less.
The Big Flop
To ask the question in a broader way…
why…with such swell capital markets, so many new tools and gee-whiz technology, and of course, an enlightened government in which our economy is guided by the geniuses at the Fed and constantly improved by the 535 members of Congress (including Senators) and the executive team in the White House…
…why is our economy such a flop? If it had just maintained the growth rates of the 1960s, we’d all be vastly richer. Instead, by our calculation, a working man today is actually poorer than he was in 1975.
We’re not saying he is necessarily worse off. After all, now he can work from home, watch movies on his own sofa, and order his meals from Uber Eats. But he has to work more hours to afford the basics – a car, a house, medical care and education.
What gives?
Nowhere in economics – neither popular nor academic – have we seen the answer. But you, dear reader, will be among the first to have it.
As we will see, fish gotta swim; birds gotta fly; and a late, degenerate empire needs to follow the script.
You might think: who has an interest in lower growth…in less productivity…and less wealth for everyone? The economy is the backbone of the country; nobody wants a weak country.
This might lead you to think: so surely, we will put our heads together and figure out how to solve this problem, right?
After all, the government is in charge. And as Hillary Clinton says, the “government is all of us.” It may make mistakes, but it always has our best interest at heart…and will eventually do the right thing, right?
Group “Think”
Alas, Mancur Olson, who taught at the University of Maryland, pointed out the problem in the 1970s. He described it in “The Logic of Collective Action.” In short, what’s good for some isn’t necessarily best for all.
Last week, in our description of the Twitter Files controversy, we offered a prediction. You’ll recall that the feds colluded with Twitter executives as a way of ignoring the First Amendment. In America, we have a right to say what we want. But the feds found a way – courtesy of Twitter – to outsource censorship. They proposed…and Twitter disposed…of ideas and opinions they didn’t want you to see.
What will happen now? Will federal officials and Twitter executives go to jail for conspiring to deny US citizens their constitutional rights?
Probably not.
The elite media, we guessed, will largely ignore the story. And the public won’t care. Mancur Olson explained why. Some people – the deciders, those in control – have a keen, focused interest in suppressing the First Amendment. Most people – the general public – have only a vague interest in protecting it. Like a subsidy to chip makers, some few people will be very much in favor of it. They’ll make campaign contributions to the right people. They’ll get favorable articles written in the press. They’ll make it sound as though it were a matter of national survival. Most people, on the other hand, will not have enough incentive to dig into the issue…understand it…or take action.
But there’s more to the story. If most people don’t really care much about free speech, why was it included as the first item (and presumably the most important) in the Bill of Rights? And if the creators of the USA were able to set up a model for a dynamic, successful country, how come we’ve abandoned it now?
Tune in tomorrow…
Regards,
Bill Bonner
“Alas, Mancur Olson, who taught at the University of Maryland, pointed out the problem in the 1970s. He described it in “The Logic of Collective Action.” In short, what’s good for some isn’t necessarily best for all”.
In 1974 George Washington University Professor Of Mgt Science Jerry B Harvey introduced the Abilene Paradox. Via a parable of a blistering hot and nasty road trip to Aibilene he demonstrates how groups end up making decisions or doing things that none of the individual members would ever agree to if they had the sole decision making authority. A link to the original article he wrote is below. It has been a guiding principle for all aspects of my life.
My dad gave me a copy of this article in 1977 as my graduation ‘gift’ from college, along with his own missive on how to bring value to my new employer. At the time I thought it was a strange gift. It did not take me very long, working at a large firm with 1000s of employees, to realize how valuable the ‘gift’ really was and armed with the lessons from the parable (and blessed I suppose with stellar ‘brain genes’ from both my parents) I was soon punching well above me weight. Which ultimately led to multiple promotions, a paid sabbatical to finish law school, and retirement (the first time) at age 45.
Thanks Dad. I miss you.
https://web.mit.edu/curhan/www/docs/Articles/15341_Readings/Group_Dynamics/Harvey_Abilene_Paradox.pdf
Edward R. Murrow was a true investigative journalist who stood up to Senator Joe McCarthy in the late 1940s to mid 1950s. He would be ashamed to see where newspaper reporters and journalists today have sunk in this past honorable profession by ignoring stories of corruption and governmental destruction of our Constitution and the Bill of Rights. Supposedly, the "Fourth Estate" main job is to expose misdeeds of those in power and protect the ordinary citizens from abuses of power. In the past several weeks, Bill has raised numerous issues that men like Murrow, Cronkite, Reasoner would have run with and powerful people would have been publicly exposed and prosecuted. It seems that the reporters and editors of newspapers and television news channels today are graduates of the "Joseph Goebbels' 'Big Lie" School of Journalism. It's so sad to see our nation where it is today. Bill, keep telling us about these important issues. Maybe, a true investigative reporter will rise from the current journalistic sewer and run with the issues you expose to us daily.