Growing unease

real gdp japan us germany 1973 equals 100

Japan is in a technical recession. The US economy (red line) dawdles along. Germany’s economy seems steady, though unspectacular.

Uncertainty reigns against a backdrop of diminishing demand and political crises. Meanwhile, a few have so much money they don’t know where to put it; they are understandably timid about investing, since there are no sure bets.

It’s a constant conundrum of market economies: the unquenchable thirst for profits drives producers to continuously shave costs, and the bulk of such costs are labor. But reduced income of the many weakens demand for products, which compels further cost-cutting.

Most economists suggest that the solution is simple, though hardly easy. Politics, ignorance, and ideology get in the way. One obvious remedy, albeit partial, is for governments to spend more on public infrastructure. In turn, such spending would put more money into consumers’ pockets while facilitating further economic growth (e.g., more efficient transportation of goods).

By the way, lowering taxes on the One Percent, as advocated by Republicans, would only exacerbate capitalist glut and do nothing to improve the lives of the Rest of Us.