Was Greed Good?

[phantom power]

As the debate moves – appropriately! – to a discussion of Romney’s career at Bain, one thing I’ve noticed is that everyone on the right, and a fair number of people who should know better, basically believes that Gordon Gekko was right. Before the Gekkos came along, they assert, American business was sluggish, unproductive, and uncompetitive. Then came the LBOs and all that, and our economic energy was unleashed.

As I said, everyone on the right knows that this happened. Needless to say, none of it is at all true.

Let’s look at how trends changed after 1980 or so, when the underlying rules of American business (and politics) shifted. Start with productivity – I use a log scale, so that the slope of the trend represents the rate of growth. See the big acceleration? Neither do I – productivity growth has actually been slower since the rise of Bain-type operators.



Ah, but competitiveness – we began selling competitively on world markets instead of running big trade deficits, right? Well, no.



So did anything change? Why, yes: income distribution became radically more unequal.



And that, I think, explains why everyone on the right knows, just knows, that great things happened after the forces of greed were unleashed. Great things did indeed happen to their patrons. For ordinary Americans, not so much.

http://krugman.blogs.nytimes.com/2012/05/23/was-greed-good/

[malthaussen]

1. You don't even need the graphs

Anecdote will serve. Memories of the Golden Age of the 80's are strictly divided between the winners and losers -- it was, to drag out Dickens's tired old quote, "The best of times and the worst of times." Those of us who didn't receive the benefits the rich garnered have long been scratching our heads over how that decade could be characterized as an era of prosperity.

Nice to have mathematical evidence, of course.

-- Mal

[leveymg]

2. But, the graphs are appreciated.

Greed is demonstrably killing what was once good about America - its relative openness, once upon a time, and lack of caste structure that have plagued other societies for centuries.

[coalition_unwilling]

3. IIRC, in 1982 the adult unemployment rate nationally reached 12%, the highest

since the Great Depression. Reagan essentially broke inflation on the backs of the working class.

Also, the mentally ill endured far more suffering than they need have, thanks to Reagan's policies to 'de-warehouse' the mentally ill from mental hospitals.

Speaking of anecdotes, a funny side note: when I graduated from college in 1983, the effects of the Reagan recession were such that the only organization hiring English or History majors (I double-majored) was the CIA! Well, I was damned if I'd work for the CIA. So it was off to grad school for me. Ah, those roads less travelled . . .

[malthaussen]

4. Ha, you *say* you don't work for the CIA

Do you really think we'd fall for such a transparent attempt to cover your activities as a COINTEL operative?

-- Mal

[coalition_unwilling]

5. Just because you're paranoid doesn't mean I'm not

out to get you

(My little shout-out to the heroes and heroines of the 60s)

[malthaussen]

6. A paranoid is better than no noid at all. n/t

[cthulu2016]

7. k&r