‘End of Growth’ Sparks Wide Discontent

Consortium News ^ | 14 October 2016 | Alastair Crooke

[Lorianne]

Raul Ilargi Meijer, the long-standing economics commentator, has written both succinctly – and provocatively: “It’s over! The entire model our societies have been based on for at least as long as we ourselves have lived, is over! That’s why there’s Trump.

“There is no growth. There hasn’t been any real growth for years. All there is left are empty hollow sunshiny S&P stock market numbers propped up with ultra-cheap debt and buybacks, and employment figures that hide untold millions hiding from the labor force. And most of all there’s debt, public as well as private, that has served to keep an illusion of growth alive and now increasingly no longer can.

“These false growth numbers have one purpose only: for the public to keep the incumbent powers that be in their plush seats. But they could always ever only pull the curtain of Oz [Wizard of Oz] over people’s eyes for so long, and it’s no longer so long.

“That’s what the ascent of Trump means, and Brexit, Le Pen, and all the others. It’s over. What has driven us for all our lives has lost both its direction and its energy.”

Meijer continues: “We are smack in the middle of the most important global development in decades, in some respects arguably even in centuries, a veritable revolution, which will continue to be the most important factor to shape the world for years to come, and I don’t see anybody talking about it. That has me puzzled.

“The development in question is the end of global economic growth, which will lead inexorably to the end of centralization (including globalization). It will also mean the end of the existence of most, and especially the most powerful, international institutions.

[refermech]

Then, the time honored solution of war will be initated

[Jim W N]

What nonsense. The only thing that’s “over” is unbridled federal tyranny at the hands of socialist presidents like Obama.

The voluntary cooperation between buyers and sellers in the market economy free from government interference is ready and very able to do what it does best: create wealth.

[vikingd00d]

Funny that this ‘malaise’ only seems to happen when socialists are running things. A Reagan-esque president could fix that right up.

[fishtank]

How can we have “growth”

when we are killing 1.5 million taxpayers every year

here in America?

Thanks SCOTUS.

Thanks PP.

Thanks Dems.

Thanks libs.

Thanks ACLU.

/sarc

[Lorianne]

True to an extent. However the “growth” level that many expect can only come from increasing globalization .... we are in an era of decreasing globalization.

The growth will have to come another way or be defined differently.

[reed13k]

My opinion - so take that for what it’s worth:

Growth is limited - note I say limited not eliminated - due to the majority of top tier economies having replacement or negative population growth. US, EU, Britain, Japan, even China.

With an aging population there comes a time when people “have enough” and they are no longer looking to ‘expand’ but instead are looking to ‘downsize’ or ‘simplify’. Part of the driver for importing “refugees” into some of these countries is, in my mind, to offset the demographic shifts in these countries.

There will still be some growth due to technological advances. But the numbers in the majority of 1st/2nd world economies are not going to expand greatly like they did the last century. They will plateau if not slightly dip and then plateau.

More rapid growth could come IF ...I repeat IF... the shackles were to come off the third world nations with greater population growth. These are held in check by corruption, dictatorships, and a lack of freedom, education, and true economic opportunity. Freeing these would likely provide another 100 years of rapid growth until they too started to limit their reproduction.

Likelihood of 3rd world changing for the better in economic freedom or the things that drive it- 10%. Higher for specific countries, but very limited for most. Likelihood that some higher tier economies will instead head down the ladder of economic freedoms - I’d say 70%. Just look at what is happening with France and Germany - don’t think they will have any negative impacts due to their internal problems? Look at the last 10 years of movement on the US in economic freedom ratings, I think we dropped to the mid teens in a recent rating poll if I remember correctly.

So between the high tier demographic drivers and the likelihood of improvements in economic freedom factors, it would appear that rapid (not all) growth is going to be challenged for the near term.

I’m very concerned about what happens to the stock market in the next 10-15 years when all of the baby-boomers start to cash in their 401ks and retirement plans at the same time. Who is going to buy their stock? At what price? Supply vs demand. If they all start selling to pay for their retirement there has to be a buyer - it’ll either be the government (god forbid); other businesses (with limited growth is it the right move for a board to agree?); or a drop in the price until a buyer accepts based on limited demand.

Sorry for the book

[pierrem15]

The inevitable rule of history seems to be that societies that become rich become soft and stupid.

Aristotle wrote that, "He who contemplates politics philosophizes about pleasure and pain." Pleasure and pain teach us (for the most part) about what is right and wrong and what is truly practical. In rich societies there is too much pleasure and too little pain regarding politics and economics, and that makes people (especially the elites) stupid.

[Theoria]

It is globalization that has helped to create global wage arbitrage, increased productivity and immigration. The siren call of ‘globalization’ has not lived up to the hype for many.

[Rurudyne]

Living off of the churn: the bankers’ poisonous dream

[Lorianne]

Good insights.
I hadn’t thought of the baby boomers all cashing in in a relatively short time frame. Now that I think of it, this seems like a big problem on the horizon.

[Lorianne]

Good insights.
I hadn’t thought of the baby boomers all cashing in in a relatively short time frame. Now that I think of it, this seems like a big problem on the horizon.

[Lorianne]

If the tension between global capitalism and the nation state was one of the contradictions of Thatcherism, the conflict between globalisation and democracy has undone the left. From Bill Clinton and Tony Blair onwards, the centre left embraced the project of a global free market with an enthusiasm as ardent as any on the right. If globalisation was at odds with social cohesion, society had to be re-engineered to become an adjunct of the market. The result was that large sections of the population were left to moulder in stagnation or poverty, some without any prospect of finding a productive place in society.

[Lorianne]

History may look on Hillary Clinton’s struggle for the presidency as the closing act in the neoliberal experiment. More than the mistrust she inspires in many voters, or the issues surrounding her health, more even than her Mitt Romney-like dismissal of a sizable section of US voters as “a basket of deplorables”, it is the fact that she is identified with this failed experiment and with those who have most profited from it that casts the longest shadow over her candidacy. Few of those who end up voting for Clinton will do so because they expect her to bring about deep change in the economy.

Many will do so from fear of the alternative. But how many other Americans will be ready to roll the dice and opt for Trump, simply in order to impose change of some sort on the entrenched oligarchies and rigged political system that Clinton represents and embodies to them? Until the votes are counted, it is a question that cannot be answered, but it’s a safe bet that there will be more than have yet revealed themselves to pollsters.

[pierrem15]

In the US demographic decline has been more than offset by immigration.

But immigration plus outsourcing has lead to flat or declining wages and stagnant demand.

That's the bigger picture you are missing: an aging population in the developed world produces stagnant demand, but so does "free trade."

Globalization in its current incarnation provokes a demand-side economic crisis in the developed world leading capital to withdraw from productive investment (because it's not profitable) and move towards asset inflation (either here or in developing countries), which simply increases instability further.

The US was the primary driver of globalization because our trade deficits drove development in East Asia. With the increasing pauperization of Americans, that debt-driven model cannot continue.

[refermech]

There are many dominos ready to fall. The question, In what direction? And what will we be left with? Or will the playing field somehow become more level and all will be well?

[Myrddin]

Robert Kiyosaki has raised the issue of the baby boomer stock sell off starting about 2015 forward. The advent of ERISA and 401k retirement funds AND Bill Clinton shifting long term bonds to short term AND very low interest rates drove the baby boomers to inflate the stock market in pursuit of some return. It's time to harvest the return and fewer parties are there to buy the stock. It's going to be a sell off of stocks of diminishing value. The fed has been propping up the stock market with QE based purchases. It's a phony bubble that will pop.

[reed13k]

I see 2nd homes and other real estate doing the same thing.

My biggest fear is that it will lead to more fascism with the government buying up the stock bit by bit at “bargain” prices.

[Jim W N]

That is also wrong because the of amazing and utter confusion in the application of the term”globalization”, a term the Left happily misuses to confuse the average citizen, something the Left does purposely and very well.

Simply put, the confusion is mixing the proper application of the terms “globalization” and “open borders” as a threat to political and national sovereignty and freedom with the erroneous application to economics and the free market.

The voluntary cooperation of buyers an sellers in the market economy free of government interference presents NO threat to political boundaries and national sovereignty. It is how mutual trading partners create wealth and by definition has no government interference, just individuals freely buying and selling in the marketplace.

[Lorianne]

Globalization has also come to be a shortcut word for centralization (which I think is how it is used in this context).

And indeed there has been a worldwide backlash against centralization.