That is a takeaway from a new economic white paper being released on Wednesday. It has three authors, one of whom is Dr. Doom, Nouriel Roubani, who was spot on about our current financial crisis before it occurred.
The op ed pages for Tuesday's New York Times are now online, and Joe Nocera has a column on the white paper. The column is titled This Time, It Really Is Different, which is a description of the current world-wide economic crisis. The underlying report has the very long title of The Way Forward: Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness. and it was commissioned by the New America Foundation. At the end of Nocera's piece he writes
You should read it — even if your congressman doesn’t.
It is late for me, and I do not have time to do a full exploration either of Nocera's piece or the white paper. One key point - one reason for the current poor job situation is that the integration of Russia, India and China has created a glut of labor, now instead of half a billion billion, more than 2.5 billion are in the global work force. That depresses wages and eliminates consumer spending as a means of coming out of the current problems.
Let me quote one key part of the Nocera piece, which he sets up by explaining why the three authors oppose (as many of us do) the emphasis on deficit reduction:
Instead, they believe that this is perhaps the best time in recent history for the government to take on a sustained infrastructure program, lasting from five to seven years, to create jobs and demand. “Labor costs will never be lower,” says Hockett. “Equipment costs will never be lower. The cost of capital will never be lower. Why wait?” Their plan calls for $1.2 trillion in spending — not all by the government, but all overseen by government — that would add 5.2 million jobs each year of the program. Alpert says that current ideas, like tax cuts, meant to stimulate the economy indirectly, just won’t work for a problem as big the one we are facing. Indeed, so far, they haven’t.
There is more to the plan, just like there is more to the article by Nocera. I suggest both are must reads, and well worth passing on.
I thought that before I went to sleep it was calling to attention to both.
Peace.