Thursday, May 24, 2012

Is Greed Good? Professor Krugman Wonks Us Out With the Data

Krugman @ NYT:
From "Mitt Romney Is a Tool" - K. Genius & TBX

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.

1 comment:

  1. Bruce - couldn't agree with you more about the facts here - the rise of Wall Street's big business has done nothing to help America's middle class, upon which our strong foundation is built.

    Would love it if you would credit our site for the photoshop posted in your article. Thanks for sharing. Let it be known: Mitt Romney is a tool

    ReplyDelete