It's been ten years since the housing bubble burst in the US back in 2006, followed by the Great/Long Recession.
Time flies, as they say.
Ten years passed but things still aren't okay in the global economy. Europe never really recovered, and Deutsche Bank already looks like a repeat of Lehman Brothers, threatening to sink Germany and the rest of Europe. Even the Lucky Country, Australia, which avoided a recession, is teetering on the brink. To say nothing of political extremism, surveillance state, terrorism, wars, sabre rattling between nuclear powers, climate change, and mass extinction.
Things don't look promising for anybody I know. For once, I don't envy the young.
I know. It's not popular to tell the truth unvarnished. One is supposed to say there's an easy, painless, safe solution; a little reform here and there. But the truth is, you don't treat a gangrenous limb with a touch of iodine, a band aid, an aspirin and pseudo-scientific mumbo jumbo.
What can we really expect from a "reformed" capitalism?
The chart above speaks for itself: not much. Since 1950 the share of gross domestic income corresponding to wages has been falling in the US, the richest, most advanced capitalist economy.
Let that sink in: wages have been slowly eroding for sixty six years. Yes, 66! That's longer than you've been alive.
And it has fallen under recessions and under booms, under Democratic and under Republican administrations. More importantly: it has fallen under Keynesian and under Monetarist/neoliberal policies, with and without globalisation, free trade, and financial deregulation.
According to that old legend, rediscovered by Keynesians, only they -- Keynes' truest disciples -- inherited the sacred esoteric knowledge from their prophet and it's thanks to them that humanity for roughly thirty years (what the French charmingly call Les Trente Glorieuses) lived in the Garden of Eden.
Humanity, they say, only fell from grace when the Monetarist/neoliberal serpent entered Paradise, in the mid/late 1970s. But at the end of times (indeed, the end of history), they prophesy, we shall return and wolves and lambs, leopards and calves, capitalists and workers, shall live in harmony guided by the priesthood of Maynard.
There's just one problem with that prophecy, as the chart shows: it's just a legend. Workers have been losing the class war for 66 years. There's little difference between the priests of Keynes (with or without prefixes) and the neoliberal/neoclassical heathens.
There is no invisible hand of Maynard, in a capitalist economy, to stop capitalists and their state from squeezing workers.
And, for all their talk about science and pragmatism, for all their supposed hard-nosed realism and their technocratic posturing, post Keynesians do believe in the invisible hand of Maynard. They do believe, against all evidence to the contrary, that there's something inherently moral in capitalism:
"So Krugman is wrong. Economics *is* a morality play – because its about the production and distribution of goods and services to fulfil the needs of *society*."Ironically, even Paul Krugman knows better. If that doesn't qualify as fanatical faith, I don't know what does.
I'm a 55 year old man and I won't be around forever. Men in my family seldom live long. I may still avoid the worst, should things go further south. If you, my friend, are younger, you (or your children) may not be that lucky.
You can't say nobody warned you. Don't let those people bullshit you.