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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsFed Reveals New Concerns About Long-Term U.S. Slowdown
http://www.bloomberg.com/news/2013-11-27/fed-reveals-new-concerns-about-long-term-u-s-slowdown.htmlFederal Reserve Chairman Ben S. Bernanke and his colleagues are suffering through their own form of cognitive dissonance: revealing new concerns about the economys long-term prospects even as they forecast faster growth in 2014.
Worker productivity, a key component of an economys health, has risen at an annual clip of 1 percent during the last four years, as the U.S. has struggled to recover from the worst recession since the Great Depression. Thats less than half the 2.2 percent average gain since 1983, according to data from the Labor Department in Washington.
Slower growth in productivity might have become the norm, the central bankers noted at their Oct. 29-30 meeting, according to the minutes released last week. Thats a switch from past comments by Bernanke that the deceleration probably was temporary and would end as the expansion continued.
A combination of forces may be at work. Chastened by the deep economic slump, corporate executives have reduced spending plans for factories, equipment, research and development. Startup businesses have been held back as would-be entrepreneurs find it harder to get financing from still-cautious lenders. And out-of-work Americans have seen their skills atrophy the longer theyre without jobs.
socialist_n_TN
(11,481 posts)and the Marxist economists (most notably Michael Roberts) have pegged this phenomena all along. It's a factor of the RATE of profit falling. Yes overall profits are up and capitalists are sitting on a mountain of cash, but there's nowhere for them to invest it where it meets Wall Street expectations for returns. The closest sector for meeting those expectations is in the financial sector or, as Marx called it, fictitious capital. That's the only sector that has completely recovered and, as large as it is, it's still not big enough to absorb all of the investment.
Also the financial sector doesn't create the same number of jobs as the productive sectors of the economy, nor are the jobs as widespread, which results in further funneling of wealth to the top.
Roberts called this a "Long Depression". A situation that lasts for a long time and is characterized by low growth (comparatively speaking), low employment, and low wage jobs for the 99%. As I said above, he's been talking about this all along, right from the time the real estate bubble burst in '07. All the other macroeconomists have been dazed and confused by the crash and it's aftermath, but not the Marxist guys. They've been on top of everything.