“In this interregnum morbid phenomena of the most varied kind come to pass”

Posted: 23 February 2017 in Uncategorized
Tags: , , , , , , , ,

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In his Prison Notebooks, Antonio Gramsci wrote: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum morbid phenomena of the most varied kind come to pass.”*

The world is once again living an interregnum. It is poised between the failed economic model of recovery from the crash of 2007-08 and the birth of a new model, one that would actually work for the majority of Americans.**

Morbid symptoms abound, including slow economic growth, persistent poverty, and obscene levels of inequality. Perhaps even more significant, especially at this point in the so-called recovery, when according to mainstream economists and policymakers full employment has been achieved, workers’ wages are actually declining.

According to the latest release from the Bureau of Labor Statistics (pdf), both real average hourly and weekly earnings for production and nonsupervisory employees decreased 0.4 percent from December to January. And, over the course of the past year (January 2016 to January 2017), real average hourly earnings for all employees failed to increase (remaining at $10.65 (in constant 1982-1984 dollars) and real weekly earnings actually decreased by 0.4 percent (from $368.66 to $366.32).

That’s what happened under the last administration, based on an economic model that is dying. And there’s nothing in the new administration’s proposed economic policies that promise any better. In fact, the likelihood is that things will stay the same or get even worse for most American workers in the next four years.

Only large corporations and wealthy individuals will likely gain from promised changes in business regulations and tax policies.

That’s a scenario that pretty much guarantees the appearance of even more morbid symptoms in this interregnum.

 

*The passage is from Notebook 3 (pp. 32-33), written in 1930, which appears in the second volume of the English edition of the full Prison Notebooks, edited and translated by Joseph A. Buttigieg.

**Nicholas Eberstedt [ht: bg], of the American Enterprise Institute, argues the current model failed around the turn of the century, with warning signs even earlier: “For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then—and broke down very badly.” David Brooks, as it turns out, concurs.

Comments
  1. Billikin says:

    What about the “old” model of recovery, that of fiscal stimulus? In the US, only enough stimulus was applied to prevent a second Great Depression, not enough for recovery. This was deliberate on the part of Larry Summers, et al. In Europe, the Euro system prevented such stimulus and austerity was imposed. The so called bailout of Greece was actually a bailout of French and German banks.

  2. David F. Ruccio says:

    I suppose one can argue, as many mainstream economists still do, that all the U.S. needed was more stimulus. The problem is, these days, more stimulus doesn’t generate decent jobs at decent wages, less inequality, or much else we’d like to see. That’s why I argue the existing model is dying.

    • Billikin says:

      More stimulus can’t generate decent jobs if it isn’t tried.

      BTW, I agree that it matters where the stimulus goes. IIUC, the most effective stimulus in the US in the aftermath of the recent financial crisis was unemployment insurance. The closer to the bottom of the economy that stimulus is applied, the better, IMO.

      Instead of having date limitations, the US stimulus legislation could have been written to continue at least until the unemployment rate went below 7% and stayed there for 6 months. For instance. Stimulus is per se not a cure for inequality, but, IMO, insufficient stimulus paved the way for increasing inequality in the aftermath. Big finance and Wall Street were bailed out, not Main Street.

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