Secular Stagnation

[GravitySucks]

Yesterdays Diane Rehm Show had Martin Wolf as a guest. Among other things, he was talking about America and Europe entering a prolonged period of economic stagnation due to low consumer demand. Somewhat a Japan Lite of the last 20 years. Any thoughts?

Martin Wolf: "The Shifts And The Shocks: What We've Learned -- And Have Still To Learn -- From The Financial Crisis" | The Diane Rehm Show from WAMU and NPR

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[H2ODude]

I guess this is off topic but am I the only one who finds Diane Rehm's voice so painful to listen to that I can't listen to her show?

 

[audreyh1]

As long as I can fund my consumption, I'll be doing my demand part in both continents. Otherwise, I don't really worry about it.

 

[GravitySucks]

I guess this is off topic but am I the only one who finds Diane Rehm's voice so painful to listen to that I can't listen to her show?

Indeed, but I do give her credit for sticking with it even after contracting that disease. I usually enjoy her guests, even the ones I disagree with. Usual her guest are even tempered and hope to impart information instead of arguing.

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[Chuckanut]

She asks some good questions though her prejudices do shine through. As far as low consumer demand, check out the Nov. 2014 issue do Consumer Reports for an article on new consumer spending habits.

 

[brewer12345]

Um, so why is this particular pundit being featured just right now? The bullcrap echo chamber that is the media operates 24/7 I guess...

 

[donheff]

Indeed, but I do give her credit for sticking with it even after contracting that disease. I usually enjoy her guests, even the ones I disagree with. Usual her guest are even tempered and hope to impart information instead of arguing.

+1

 

[Amethyst]

It is only painful to me because I can remember how mellifluous her voice was, years ago, before her voicebox was damaged.

I still like her persona, and that makes up for her raspiness. Rush Limbaugh's voice is OK - and I even agree with him from time to time - but his persona is so obnoxious that I literally cannot listen to his show.

On-Topic: I do not know the answer. If basing financial bets on the affairs of the current majority race (Euro-Caucasians), then the prospects for the U.S. economy seem dismal since so many of the ones my age didn't have kids, or only have one child (and the rise of the twee neologism, "Granddog," tells us all we need to know about where that population trend is going).

Nevertheless, I am observing, in my own little corner of the U.S., Central American immigrants aggressively working their way into the business class. This growing population segment may be shopping at the 2nd-hand stores now, but if current (personally observed) trends continue, they'll be looking to buy nicer things very soon. There are a lot of Central American immigrants around here and they won't all be mowing lawns forever (the guy who tiled my bathroom used to mow the lawn next door, and hopes to own his own remodeling company one day).

Amethyst

I guess this is off topic but am I the only one who finds Diane Rehm's voice so painful to listen to that I can't listen to her show?

 

[MichaelB]

Um, so why is this particular pundit being featured just right now? The bullcrap echo chamber that is the media operates 24/7 I guess...

He just wrote a book, the interview was probably part of the promotional tour.

He's a smart guy, qualified, very analytical, not part of the bs chamber. He stands apart as a journalist because he knows his stuff and his writing focuses more on policy than politics. I'm not going to buy the book but may listen to the interview, not sure I buy into the secular stagnation theory.

 

[Senator]

I have no doubt that consumers, the majority of them, are spending less. That is why the great deflation fears are being talked about, especially in the EU.

When real wages fall, what are consumers supposed to do, spend more? We are in the great wage equalization period, that will last many years. It will continues until all people, in all countries, make the same wages to live a similar lifestyle.

Once one countries wages get too high, there will be another lower priced country to take it's place.

 

[HFWR]

No worries; we're turning the rest of the world into good little consumers as fast as we can...

 

[Senator]

No worries; we're turning the rest of the world into good little consumers as fast as we can...

And then people will be crying because all those people are driving cars, and consuming energy... Causing more environmental damage.

 

[EastWest Gal]

I do wish McDonald's would stop marketing all those wasteful plastic toys. They're made from oil and all end up in landfill.


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[GravitySucks]

Wolf's point on stagnation was the fact we are in for a long period of de-leveraging, companies buying back stock instead of investing in growing the business, consumers cutting back, etc. It sounds reasonable that this would eventually be good for the economy, but I'd really like to see bond real returns be positive sooner than later!

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[CaliforniaMan]

It is only painful to me because I can remember how mellifluous her voice was, years ago, before her voicebox was damaged.

I still like her persona, and that makes up for her raspiness. Rush Limbaugh's voice is OK - and I even agree with him from time to time - but his persona is so obnoxious that I literally cannot listen to his show.

On-Topic: I do not know the answer. If basing financial bets on the affairs of the current majority race (Euro-Caucasians), then the prospects for the U.S. economy seem dismal since so many of the ones my age didn't have kids, or only have one child (and the rise of the twee neologism, "Granddog," tells us all we need to know about where that population trend is going).

Nevertheless, I am observing, in my own little corner of the U.S., Central American immigrants aggressively working their way into the business class. This growing population segment may be shopping at the 2nd-hand stores now, but if current (personally observed) trends continue, they'll be looking to buy nicer things very soon. There are a lot of Central American immigrants around here and they won't all be mowing lawns forever (the guy who tiled my bathroom used to mow the lawn next door, and hopes to own his own remodeling company one day).

Amethyst

+1
This is what I observe also. Immigrants have always done better than native born, and have powered our progress. The immigrants I know work harder and longer than I ever could, starting from almost nothing are building businesses, always successful because of their hard work. This is the one card we have in our pocket which will keep us from ever becoming another Japan.

The ones I know don't want to shop second hand. Even if they buy little, they want the best. Seeing them I don't worry about the next generation of business builders or consumers.

 

[robnplunder]

Nevertheless, I am observing, in my own little corner of the U.S., Central American immigrants aggressively working their way into the business class. This growing population segment may be shopping at the 2nd-hand stores now, but if current (personally observed) trends continue, they'll be looking to buy nicer things very soon. There are a lot of Central American immigrants around here and they won't all be mowing lawns forever (the guy who tiled my bathroom used to mow the lawn next door, and hopes to own his own remodeling company one day).

Amethyst

I notice that they seem to spend what they make.

Whether people like it or not, population growth fuels economic growth. US population is still on growing trend b/c of immigration. As long as that continues, I will not worry about stagnation. Japan has aging, and declining population. They had to look to export to generate growth and had tough competition from China, Korea, and others over the last 20 years. Apples and oranges ....

 

[GravitySucks]

I notice that they seem to spend what they make.

Whether people like it or not, population growth fuels economic growth. US population is still on growing trend b/c of immigration. As long as that continues, I will not worry about stagnation. Japan has aging, and declining population. They had to look to export to generate growth and had tough competition from China, Korea, and others over the last 20 years. Apples and oranges ....

Gotta agree that demographics are hard to fight.

Seems there's a lot of people trying to curtail immigration to the US though. If they're successful this growth can't be counted on and I think birthrate for US citizens is below the replacement value.... Not sure if that's still 2.1 children per woman....

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[urn2bfree]

We had an Echo Boom of kids born from 1984 to 1992... Those kids are just starting to move out into the world, get married, have kids, buy homes, minivans, car seats, etc. add in a growing middle class in India and China...I would like to see this guys math.


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[donheff]

I am observing, in my own little corner of the U.S., Central American immigrants aggressively working their way into the business class. This growing population segment may be shopping at the 2nd-hand stores now, but if current (personally observed) trends continue, they'll be looking to buy nicer things very soon.

Amethyst

+1
This is what I observe also. Immigrants have always done better than native born, and have powered our progress. The immigrants I know work harder and longer than I ever could, starting from almost nothing are building businesses, always successful because of their hard work. This is the one card we have in our pocket which will keep us from ever becoming another Japan.

The ones I know don't want to shop second hand. Even if they buy little, they want the best. Seeing them I don't worry about the next generation of business builders or consumers.

I notice that they seem to spend what they make.

Whether people like it or not, population growth fuels economic growth. US population is still on growing trend b/c of immigration. As long as that continues, I will not worry about stagnation. Japan has aging, and declining population. They had to look to export to generate growth and had tough competition from China, Korea, and others over the last 20 years. Apples and oranges ....

+1 The American Dream has fueled our success for our entire history. That is why I am amazed at the fear of immigration rampant on our shores. We are a magnet for entrepreneurial spirits looking to improve life for themselves and their families. Just the people we want. We can deal with the small proportion of neer-do-wells who tag along -- they certainly are in no greater proportion than our own bad seeds.

 

[pb4uski]

I wonder if some of this reduced consumer demand was very predictable consequence of the Great Recession, similar to how our parent's generation reacted to the Great Depression. While it will undoubtedly result in slower growth, my hope is it will result in more sustainable growth as well and less consumer excess than in the past. I think more LBYMing and saving by the masses would be good even though it will have a adverse impact on economic growth.

 

[Chuckanut]

That is why I am amazed at the fear of immigration rampant on our shores. We are a magnet for entrepreneurial spirits looking to improve life for themselves and their families.

Yes. Who would we not admit to this country - Levi Straus, Sergey Brin, Elon Musk, Hyman Rickover, Albert Einstein, John Muir, or my parents and grandparents?

 

[ERD50]

+1 The American Dream has fueled our success for our entire history. That is why I am amazed at the fear of immigration rampant on our shores. We are a magnet for entrepreneurial spirits looking to improve life for themselves and their families. Just the people we want. We can deal with the small proportion of neer-do-wells who tag along -- they certainly are in no greater proportion than our own bad seeds.

Yes. Who would we not admit to this country - Levi Straus, Sergey Brin, Elon Musk, Hyman Rickover, Albert Einstein, John Muir, or my parents and grandparents?

Please correct me if I'm wrong, but didn't all those people legally immigrate to the US?

For me, there is a huge difference between someone who follows the rules and comes here legally, and someone who enters illegally. That's a matter of law, not an opinion.

-ERD50

 

[cooch96]

Please correct me if I'm wrong, but didn't all those people legally immigrate to the US?



For me, there is a huge difference between someone who follows the rules and comes here legally, and someone who enters illegally. That's a matter of law, not an opinion.



-ERD50

Most of those folks immigrated when we didn't have irrational quotas. This nation was founded on fighting tyrannical laws. Ignoring irrational laws and fighting current injustice upholds that tradition. That's a matter of history, not an opinion. I consider it a fine tradition, which is admittedly my opinion.

 

[ERD50]

Most of those folks immigrated when we didn't have irrational quotas. This nation was founded on fighting tyrannical laws. Ignoring irrational laws and fighting current injustice upholds that tradition. That's a matter of history, not an opinion. I consider it a fine tradition, which is admittedly my opinion.

Perhaps (likely even) the system needs to be changed. But until then, illegal is illegal. And it is not 'undocumented', it is illegal. Not filing your taxes does not make you an 'undocumented income earner', it is illegal.

-ERD50

 

[razztazz]

Most of those folks immigrated when we didn't have irrational quotas. This nation was founded on fighting tyrannical laws. Ignoring irrational laws and fighting current injustice upholds that tradition. That's a matter of history, not an opinion. I consider it a fine tradition, which is admittedly my opinion.

At various time there were all kinds of quotas placed or attempted on all kinds of people coming here. This happened when the free and self governing People of this country decided they didn't want any more people from that place. Love it or hate it that's freedom. Letting anyone and everyone from anywhere barge or stumble in here and being forced to allow it is the opposite of freedom