First Quarter Productivity Results

I wanted to quickly remark about GDP results.  Productivity in the U.S. contracted well more than GDP.  I noted in my post on the Trumpty Dumpty economy some months ago how bad the economy really is versus the carnival barking of our circus leader.  In that post I noted that productivity has been negative for the Trump presidency and profits peaked five years ago.  Today’s GDP numbers also came with a nearly 6% contraction in productivity.  What that essentially means is the Federal Reserve has to pump gobs more money into the system than is coming out the other end.  There’s some ability to fake it by opening the flood gates of economic immigration as we have been but how many people do you think are trying to get into the U.S. today?  Without massive immigration and the fiscal supports given to them, the only outcome I can see to ameliorate the productivity dynamic is the government will have to put money in people’s hands to overcome this contraction until the situation resolves itself.  And, that will be never without a new economic system.  How do you think that will go over with the pathological Mitch McConnell and his corporate cronies in the Republican Party?  Or, neoliberal Nancy and her corporate crony Democrats? 

One might surmise that given this dynamic, restarting the U.S. economy will be a little more difficult than Trump believes.  The amount of monetary stimulus needed to shock the system into restarting is likely to be staggering.  The largest impact to this dynamic will be felt outside of the United States.  This is a far, far different dynamic than the Great Depression.  Far different. Far more insidious.  Far more broken.  We don’t hear economists talking about this because, to be honest, economists are generally little more than the high priests of the state religion of money aka economics.  Being on Twitter the last few months has been interesting.  Lots of economists on there.  More concerned about knobs, dials and theoretical nonsense than any type of real-world understanding.  I’ve noted here in the past that economics died when it was removed from the field of sociology and the powers-that-be attempted to turn into a hard science.  The person attracted to sociology is far different than the modern economist who loves playing with charts and numbers in their cubicle.  Attempts to turn economics into the state religion destroyed the study.  Economics today isn’t science at all.  It’s the marriage of pseudoscience or scientism and mythology.  Goes back to credentials versus competence.  Most economists sit in ivory towers and their endless theoretical wrongs never have consequences. 

I’d take a plumber or any true science to learn economics any day.  That plumber gets direct feedback on his abilities and understands the limitations of his abilities as a result. As do applied sciences where outcomes are consistent and measured.  So much of today’s world is science is junk.  Discussed endlessly on here.  Especially true of academia.  I love theoretical exercises that stretch our limits of the mind but they have no practical place in this world. 

Economics is fundamentally more about the human condition applied to society or sociology. And, that means it has to be steeped in ethical philosophy.  People aren’t knobs, dials and charts.  Modern economics dehumanizes people and as numbers to be treated as efficiencies.  Of course, this is certainly by design. 

The economy should reflect the wishes of everyone in society because ethics is not a decision to be made by politicians or economists or corporations. Ethic involve human rights.  And, in order for that to actually play out in reality, economics has to be local and substantially determined by the community.  Not by a number in a spreadsheet.   It shouldn’t be decided by an entitled few in a far off land who often benefit from make massive, consequential oftentimes erroneous decisions that impact all of us.  Or, decisions based on their own self-interest.  That statement extends to how we should be handling this social distancing and the sociological and ethical consequences.  And the impacts it is having on people who, because of economists, corporations and politicians, are literally worried about food, healthcare, housing and other basic human needs. 

Negative productivity is a major issue.  It tells us capitalism has been in systemic failure since 2008 and has been permanently eating itself ever since.  We’ve relied on gimmicks to keep it going; $29 trillion bailout in 2008, essentially zero bound interest rates, four rounds of quantitative easing, liquidity in every orifice, corporate tax breaks, tax breaks concentrated in the most wealthy Americans, coronavirus bailouts for corporations and the top 1% while democracy rots, Obamacare medical-industrial complex was a bailout, massive increases in military-industrial complex spending, endless economic and military wars, labor international arbitrage and the like.  They are pulling out all of the stops and productivity still remains negative.  And, steeply so in the first quarter. 

With the social horrors the pandemic has now exposed in plain site, the rot, corruption and incompetence in our economy and in corporations is laid bare.  It should be manifestly obvious to anyone who isn’t driven by belief systems but rather can see presently what is happening, that most people in this world exist, and generally little more than a forced subsistence, only to provide for those of institutionalized entitlement.   I believe this is called royalty. Capitalism calls it the free market. 

It’s going to be interesting how the global economy responds on the back end of this.  Not likely “good” interesting either.