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Morici lays out the causes of America's economic stagnation
Howard Richman, 7/25/2013

In a pithy paragraph from his July 16 commentary (Easy money is the opiate of the American economy), U. of Maryland economist Peter Morici nailed the causes of the great depression which, unaddressed, are causing America's current economic stagnation. The causes are:

1. Trade Deficits. "[A] growing trade deficit with China that saps demand for U.S. goods and destroys jobs;"

2. Wasting Money on Unprofitable Energy. "[D]ysfunctional federal policies that invest in bogus alternative energy schemes and limit drilling for oil offshore;"

3. Growing Business Regulation. "[B]urdensome business regulations that raise the cost of new projects;"

4. Bank Regulation that Hurts the Smaller Banks who lend to Small Businesses. "[B]ank reforms that enrich the Wall Street Banks, while starving America's biggest jobs creators—small businesses—of credit."

Morici's main point in the article is that the monetary growth "solution" being tried by the Fed cannot go on forever. He predicts eventual disaster:

With growth slowing, the Fed may have to pump even more cash into the economy with diminishing results. Sooner or later the recovery could falter, and much like Europe, a few pockets will prosper but much of the rest of the country, like Spain and Italy, will sink into double-digit unemployment.

The causes of the recession and economic stagnation are clear to Morici and to us. Unfortunately, those with power in Washington still appear to be clueless.

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Comment by M, 8/2/2013:

One cause is missing from the list. A broken political system.

Those in Washington are not clueless, it's just an act. Like the Caveman character from SNL.."Ladies and gentlemen of the City Council, I'm just a caveman... Your world frightens and confuses me. When I see your tall buildings and flashing neon signs...."  

The current system appears to work very well for the Federal Government, The Federal Reserve, and multi-national corporations.

 




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    Wikipedia:

  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

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  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]