Cafe Hayek Wages, Productivity, Rates of Return, and Investment: Quick Thoughts
From ; http://cafehayek.com/2012/09/wages-productivity-rates-of-return-and-investment-quick-thoughts.html
I've said it before, understanding this trend.... (http://www.irle.berkeley.edu/events/spring08/feller/productivity_wages_graph.gif ) is paramount to understanding the economy. Lots of questions follow as is clear from the professors discussion above as he himself is far from having addressed all the issues it brings up. I've brought up this simple graphic in the past and others simply eschewed it as being of no consequence based on its simplicity. But you can't do that now unless you know the answers to all the issues the professor brought up in his post on the issue. So my questions follow;
- Why are there NO other Keynesian professional economist that post here?
- Why am I the best representative of that point of view when it clearly is not marginalized with in the profession?
- Why is there not a more definitive answer to the inflation question. College tuition, health care, housing and automotive cost suggest that inflation may be under-estimated not over estimated.
- when you have to question the data that has clearly been reviewed over and over doesn't it suggest you maybe don't want to deal with the implications of the data.
- Why is it assumed that capital is taking a huge chunk of national income and NOT simply that greater shares are going to the very top as so much evidence indicates?
- How can you blame " tax or regulatory policies that artificially discourage investment" when they clearly are not effecting corporate profits? How would they just kick in at some certain level? It makes no sense. Why can't you even suppose that ever increasing gains are being limited by lost demand reflected in decreased wages? Explain to me what policy you have in mind that allows for these great gains but some how imposes a ceiling on them a some limit.
If ones whole professional position was in any way brought into question by issues like this I would think one would pursue to their great satisfaction the answers this issue brings up. WHAT IF YOU ARE WRONG? Is it possible that the problem here is something clearly described by the Keynesian position? What if he is right? Do you think you could ever come to that realization. Again this is as much a study of human psychology as anything. I've gone through such a transformation being an adherent the ideas of free markets, voting republican and even libertarian and despising the democratic party but then slowly coming to a new view that flipped my position. It's an astonishing transformation and I don't think many people go through such a thing. Maybe I flipped to the wrong side.... i don't think so but at least I know what such a transformation feels like. I am impressed that many people are completely incapable of such a transformation for complicated reasons of psychology that I can't claim to understand.
Corporate profits are at record levels, income gains are continuing to go to the top, tax rates are at record lows and still investment are NOT being made in real productive endeavors. All the surveys state its because of low sales... ie low demand. There is clearly something broke here and it's VERY difficult for supply siders to explain. demand siders have very elegant and logical and historically consistent explanations. I don't think you can explain my simple graphic... I don''t think you want to.