Workers only ever make real gains when economies innovate - invent their way forward - and create premiums so that managers and stockmarkets can move with increased confidence and lowered risk.
Workers only ever lose out when there is fear in the air and the managers and stockmarkets have pulled in their horns and the ONE way forward is to cut costs + cut costs + cut costs.
Which of these models are we on right? Let's take a stab in the dark here....
Well, the tax breaks for capital (what, once, was effectively vilified as supply-side economics) now equal X trillion dollars over the few years ahead. And the dollar is now down some 30 percent against the Euro.
Between them, at an informed guess... $20 trillion already in "costs" cut? For which, we have been seeing feeble growth, sinking productivity, a stagnant-or-worse stockmarket, tanking exports...
And now this from today's Financial Times. which, one would think, kinda clinches it.
Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times by the Economic Policy Institute.
Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.
The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.
Stingy pay rises mean many Americans will have to work longer hours to keep up with the cost of living, and they could ultimately undermine consumer spending and economic growth.
Many economists believe that in spite of the unexpectedly large rise in job creation of 274,000 in April, the uneven revival in the labour market since the 2001 recession has made it hard for workers to negotiate real improvements in living standards........
"There is still little evidence that workers are gaining much traction in their negotiations," said Paul Ashworth, US analyst at Capital Economics, the consultancy. "If this does not pick up, it raises the prospect of a sharper slowdown in consumer spending than we have been expecting."
So. All is clear now as to the model, the problem - and the way forward? Hint: invent, invent, invent... and set things up at every level for just precisely this.
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Main Economics Poster At LiberalStreetFighter