Re: [Pen-l] The economy is still at the brink

[Jim Devine <jdevine03@xxxxxxxxx>]

an excellent article!

> NY Times, June 7, 2009
> Op-Ed Contributors
> The Economy Is Still at the Brink
> By SANDY B. LEWIS and WILLIAM D. COHAN

> Instead of promising the imminent return of good times, why isn’t Mr. Obama talking more about the importance of living within our means and not spending money we don’t have on things we don’t need? We used to be a frugal nation. The president should be talking about kicking our addictions to easy credit, to quick fixes and to a culture of more is better (and Congress’s new credit-card legislation, while perhaps eliminating some of the worst aspects of that industry, certainly didn’t send the right message about personal finance).<

this is one of the major "memes" that's been wafting around the rich
and professional-managerial strata: they problem, they say, we've been
living beyond our means. ("We used to be a frugal nation.") As if
working class folks have been living high on the hog.

The problem with this conception is that wages have been stagnant
(except for a little bit during the late 1990s). This has mean that
"irresponsible" use of credit has been crucial to allowing
working-class people to serve needs and to "live like Americans"
(including "owning" a house). Crucially, credit expansion allowed the
business-cycle uptick of before 2007. Of course, the financial sector
and foreign financiers were enablers here.

If a business-cycle recovery is the goal, the substitute for
irresponsible credit is to have wages rise more in step with labor
productivity.
-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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