Peter Camejo's Long Wave, continued
The many questions you raise are precisely the right ones and point to a weakness of my original posting(s) for which I must apologize. They assume a level of familiarity with current U.S. economic conditions and statistics that most people, including those who live in the United States, don't have. So, I'm going to go fishing on the web and give this the once over lightly treatment, with not too many numbers, I hope!
And people reading this should be mindful Ï'm not attempting to present either a balanced or carefully researched picture, but just picking up figures and stats from various places on the web, mostly government sites, that illustrate or corroborate or indicate what's new and different in the past few years.
So now the news on the American economy since the end of the Cold War, as it relates to growth, employment, the manufacturing/industrial sectors, with a bit more on productivity.
To start with, though ...
Louis makes a very good point in another post that Wall Street, the Dow 10,000 and all that is esssentially a sideshow. The stock market at best is a distorted picture, at worse, a false one. We should look instead at the real economy.
My theses is that U.S. is now undergoing a "prolonged" period of relatively higher growth in production and productivity thanks first and foremost to the "digital revolution." By "prolonged" I envision something on the order of 15 or 20 years, a few business cycles
The current U.S. expansion is the longest on record in peacetime. Since the end of the "Gulf War" recession in 1991 the U.S. has "officially" not had a recession. For the first few years, until about 1994, growth was good but not out of the range of what might be expected, given past performance.
In 1995 there was a blip -- very little growth for a couple of quarters, which I believe marked the "downturn" or "low point" of that business cycle, even though it was not a full-fledged recession (i.e., a contraction of the economy's output) thanks to the "extra oomph" provided by the digital transformation of the economy.
Coming out of that '95 slowdown, U.S. economic growth has been breathtaking by advanced capitalist country standards. GDP grew 3.4% in 1996, 3.9% in 1997 and 98, and was increasing at an annual rate of 4.3% in the first quarter of this year.
U.S. economists believe the "natural" maximum sustainable growth rate of the U.S. economy is somewhere around 2% or less, 1% or less from productivity gains, 1% from population gains. Go any faster, and the inevitable result is inflation.
There's an emerging school of thought around Fed chairman Alan Greenspan who believe that the introduction of new technologi