Has the American model of economic growth become irrelevant?

[KlatooBNikto]

The American model always assumed unlimited availability of natural resources, no impact on our environment and availability of cheap capital and labor to generate profits.

In a world that sees that our natural resources are limited, our environment undergoes irreversible degradation and our domestic labor is becoming more and more expensive in relation to the rest of the world, our model may itself be outmoded.

This is why I think the lesson of Argentina may well be a warning.That unfortunate country was invaded by an army more powerful and more devastating than any of Bush's marines: a bunch of Harvard economists who do not know how to do anything on the cheap. Instead of letting the loacl economy generate goods and services using local talent, they advised that Argentina borrow heavily to import goods from overseas going heavily into debt.That has plunged the country into an economic crisis that it will take several generations for Argentina to recover from.

Be wary of the IMF, World Bank and most of all, Harvard educated know nothings.

[IrateCitizen]

1. It hasn't become "irrelevant", but has always been unsustainable

Even M. King Hubbert, creator of the famous "Hubbert's Peak" oil curve, became convinced late in his life that the American economic model was completely incompatible with scientific realities.

Our economic model is one that is founded upon the idea of using up and wasting all of our resources. In all of nature, there are only two instances in which an organism consistently exhibits similar qualities.

One is the virus, the other is the cancer cell. Perhaps Agent Smith was correct in The Matrix after all....

[bemildred]

2. Ponzi schemes always scale badly. nt

[htuttle]

3. Pyramid schemes like the US economy will never be 'irrelevant'

But they don't represent economic growth, either -- just a redistribution of existing wealth.

[HEIL PRESIDENT GOD]

4. We could keep it up for two more centuries

If we abolished real estate ownership and based wealth strictly on what was produced, minus fines for polluting the commons.

[orwell]

5. Model Search

Any model has its benefits and costs.

As the US has relentlessly descended into crony corporate fascism, the costs are predictably overwhelming the benefits. The core of the problem is in the structural rot of excess money creation, enabled by the actions of anti-free market Federal Reserve.

When the base of our capitalist system, the medium of exchange itself, is consistently debased, all transactional decisions have become highly suspect. How can a capital investment's economic efficiency be assessed when the market is so clouded by the perversions of the Fed's Politburo style money management?

In other words, if the very foundation of the US capitalist "cathedral" is rotten, how can we begin to assess the structure itself?

[Lydia Leftcoast]

6. Actually, *America* didn't follow the "American" model of

economic development.

It was highly protectionist in its early years, and by the late nineteenth century had nearly universal elementary education and the beginnings of a public health establishment, worker protection laws, and social work initiatives directed at the poor.

By the time our most spectacular economic growth took place (after WWII), the New Deal programs were at their height.

And I have posted many times about how the real economic success stories in the world today, the ones that have managed high economic growth with equitable income distribution--Japan, South Korea, Taiwan, Malaysia, and Singapore--have done so with a high level of protectionism, intensive spending on education and infrastructure, and strict controls on activities by foreign companies and investors.

The "American" model of economic growth is a libertarian greedhead's fantasy that has never worked in any actual country.

[IrateCitizen]

8. One small comment, Lydia...

By the time our most spectacular economic growth took place (after WWII), the New Deal programs were at their height.

It must be acknowledged that this period was one in which the United States possessed over one half of the world's industrial capacity. Europe and Japan were in ruins from WWII.

Not that I'm discounting the positive effects of a social safety net, but the impact of WWII's aftermath must not be discounted.

[Lydia Leftcoast]

9. That certainly was a factor, but pent up demand from the war years

and such liberal programs as the GI Bill (bringing educational opportunity to countless working class people), and the Federal Housing Administration (which made home ownership and therefore all the expenditures that go with it possible for the masses) were much of the reason that this overwhelming industrial capacity could find customers.

[IrateCitizen]

10. Contrary to popular belief, consumption INCREASED during WWII

This is an interesting tidbit I learned from reading John Kenneth Galbraith's The Affluent Society. The biggest problem facing the American economy coming out of the depression was the unused industrial capacity. I've read estimates that the US was operating at less than 50% of its industrial capacity.

Therefore, when WWII kicked off, all that unused industry came on line. But not all of it was needed for war materials. In spite of the victory gardens, painted stockings, and the like -- purchase of consumer goods actually INCREASED as the war dragged on. Then, of course, after the war it absolutely exploded.

And you're absolutely right to point out the importance of programs like the GI Bill and mortgage incentives for spurring demand. I'm not discounting that at all -- I'm simply saying it's only one part of the total equation.

[MsTryska]

12. You're a stronger person than me....

I deperately tried to read Affluent Society but i jsut kept losing the thread.

maybe it's a book better suited to reading when i can focus rather than jsut before i go to bed.

[IrateCitizen]

13. Really? I found The Affluent Society concise and fascinating...

Then again, that's me. I actually enjoy reading detailed historical, scientific and economic treatises. :crazy:

I always thought one of Galbraith's strong suits was that he was able to take economics and boil it down and present it in a straightforward fashion that anyone of moderate intelligence could easily understand. Of course, maintaining their attention is another thing entirely....

[MsTryska]

15. Yeah.....and believe me i tried....the language is fairly simple...

but for some reason, i just couldn't "hook in", as it were. I'll try it again at a later date.

[Tyler Durden]

7. It NEVER WAS relevant.

Sort of like that great OXYMORON: MARKET CAPITALISM.

Time for us all to grow up and stop fucking each other for a buck.

[MsTryska]

11. Well - I've jsut started reading European Dream....

by jeremy Rifkin - i'll let you know in a few more chapters - but gut instinct....yeah i think we are becoming more irrelevant - what good is it to work 60 hours a wekk and have jacksquat but a f*cked up family life and debt out the wazoo to show for it?


who in their right mind (looking from the outside) would honestly choose to get screwed the way we get screwed on a normal basis and consider it normal?

[Taxloss]

14. Can I recommend "Small is Beautiful" by EF Schumacher?

Written 30 years ago and a little out of date, but still very provocative and relevant.

[sweetheart]

16. Perhaps the question could be framed differently

Obviously the model "is" relevant, as that is the one "we" in the
industrialized nations are still using today. "we" are still pushing
world bank dope as a national institution, and every transaction down
to purchasing toothpicks from taiwan is using this global infrastructure.

What has been exposed by the bush criminals, that was clandestine during
the clinton years, is the blatant hegemony implicit in the model. What
appeared to be a get-wealth scheme for all players in a "win-win"
model of trade promised by so many economists, is exposed in the bush
imperium as a purely lord-vassal relationship, in which wealth and
ownership are purposely usurped to maintain a global military empire.

Some writers have been especially good at exposing this lie:
"confessions of an economic hitman" (du frontpage)
"The world we're in" by will hutton
"The sorrows of empire" by chalmers johnson

These 3 books all discuss the failure of this model of captialism that
purposely makes resources and environment "exogenous" to the model.
In this regard, rather than seeing the earth as 1 planet, with 1
set of resources, these treat mother nature as an infinite thing, that
can sink infinite pollution, and supply infinite resources. The
model is bunk, as the seas have become overfished, as rivers have
become polluted and poisoned, as earth has become salinated by poor
farming irrigation... and so much of this infinite exploitation
noise.

the world today still uses this "growth" concept and still keeps
the impacts of industry exogenous. It will only become irrelevant
when that is no longer the case. However, the real question implicit
in your post, is that the hegemony and the "american"'ness of it is
indeed exposed, and now that element will never be the same. There
can never be a return to a benign imperium after this power grab.
The world has moved on to make other arrangements, and teh USA
is left out. The bully has been quarantined in the sandbox, and
even when he'll play nice, he'll be fettered in to his cell.