"How to Be Prepared for a Secular Stagnation" by Mohamed A. El- Erian

A bad agrarian reformed always comes back.

Stefan Jovanovich writes: 

"Economists know how to beat secular stagnation. There are really two sorts of policies here according to Summers: prevention and cure. Policies that stimulate productivity growth and raise labour-force participation build in buffers against the zero lower bound by boosting persistent investment demand. Such pro-growth policies are uncontroversial in the policymaker world, even if they are politically difficult to implement."

It would be cruel and possibly racist and certainly totalitarian to find where Hubert Humphrey and Augustus Hawkins' minds came from and then impose a Carthaginian peace on the places and ideas. But it is tempting. The idea that enterprise can somehow through "policy" be connected to employment is the soft socialist fantasy of the modern world. There are no "policies" that stimulate productivity growth; there are only ideas and their applications through machinery and process that allow people to do things better, faster and cheaper. And the "cheaper" invariably involves substituting software and equipment for labor.

"Pro-growth policies are uncontroversial in the policymaker world" precisely because the only growth in employment those policies create is more jobs for policymakers and the Keynesian knock-on effect that comes from their spending money to go to conferences.

Shaw really did have it right
. The problem with the undeserving poor is that they have even greater requirements than the people who accept the market values for their skills and services. What makes those casualties of "secular stagnation" so attractive is precisely that their greater requirements involve perpetually more funding for the people who know they can fix the problem.





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