While economists are great at analysis after the fact they are, for the most part, weak at understanding the zeitgeist that allows economies to function properly at this time. What many economists fail to see is that we are in an era of increased cynicism in which the beleaguered middle class, the class which is the mainstay of the modern day successful economy, appears to not feel as vested in this country and through that, this economy. Increased numbers of people renouncing citizenship to save on taxes is occurring. More and more are turning to barter systems to hide their profit from the government.
We’ve discussed at this site that for an economy to flourish positive belief is paramount. What we’ve also discussed is that a focal point of interest for the economy is necessary to give direction to that economy for economic growth. While the growth of the middle class in the mid-20th century was crucial for the vibrant economic growth of that time, it was the strength of the unions which led to greater wages for the lower classes that allowed those groups to perform the necessary consumption that created our economic growth.
Since that time the encouraging economic cycles have been marked by false positives including a credit binge led expenditure period which fueled economic growth but also led to catastrophic levels of indebtedness by the average citizen. The accompanying fake asset increase for the average American provided by an overheated and unreliable realty market also fueled the economy for a short period of time. And let us not forget to achieve and then maintain the lifestyle that Americans via the news and entertainment media was taught to be attainable Americans began to work a second job while all adult members of the household joined the labor force.
America’s economic strength through industrialization is over. The technocrat gadget and the social media avenues which we are currently experiencing are short term and limited growth avenues. They cannot sustain a whole economy. We have been floundering without direction ever since the false positives of the real estate market have exposed our inherent weakness and lack of economic direction.
So what is the current state of an economy that cycles the fortunes of close to 300 million? It certainly appears to be directionless and through that a continued weakness is perceived. Every recovery is temporary and a long term period of sustainable growth seems unattainable.
“Where does that leave us? Well, the economy may in fact be weakening. Winter weather hasn’t helped lately (cold and snow aren’t great for business). But perhaps more importantly, the rising U.S. dollar is making it harder for U.S. companies to sell their goods abroad. Meanwhile, consumer spending at home has been soft. The Federal Reserve Bank of Atlanta thinks that gross domestic product didn’t grow at all in the first quarter. There was some sense that employers might keep up the pace of hiring despite the headwinds. But apparently not. For a while, the most interesting story about the labor market was all about wages—specifically, why they weren’t rising faster, despite the declining unemployment rate. Perhaps we need to start worrying about jobs again, too.” http://www.slate.com/blogs/moneybox/2015/04/03/march_jobs_report_it_s_getting_ugly.html