Productivity stinker

In yesterday’s post about chronically low levels of investment, I concluded that they’ve “given us stagnant productivity growth and a collapsing infrastructure.” This morning, the Bureau of Labor Statistics (BLS) confirmed the productivity part. For the year ending in the second quarter, it was down 2.5%, the worst in the series’ 75-year history.  Productivity sounds like one of those things only the orthodox worry about, but it doesn’t have to be. Its most common form, labor productivity, is a measure of how much a worker can produce in an hour on the job. While… Read More

Washington will pick up the check

Semiconductor firms are about to get showered with cash thanks to a new bill, The CHIPS and Science Act of 2022—CHIPS standing for, cleverly, The CREATING HELPFUL INCENTIVES TO PRODUCE SEMICONDUCTORS Act. Because it involved free money for capitalists, 17 Republicans (out of 50) voted for it despite their habit of voting against almost anything supported by Democrats except money for the Pentagon. Biden is scheduled to sign it on Tuesday, August 9. It’s a $280 billion package designed to encourage semiconductor manufacturing and research in the US. Pundits and generals have… Read More

America: the rot goes on

It’s been a while since I looked at one of the major reasons for the pervasive sense of rot about the US: the low level of investment—investment in real things, that is, not crypto. It’s barely keeping up with the forces of decay. If you’re wondering why nothing works and everything seems to be falling apart, here are some explanations. First a definition: investment is spending by businesses, governments, and individuals on long-lived physical assets like buildings and machinery. Gross investment is the dollar value of such spending; net is what remains… Read More

Rot: the private sector angle

In a post yesterday, I showed how public investment, net of depreciation, in the U.S. is barely above 0, meaning that fresh expenditures on long-lived assets like schools and roads are running just slightly ahead of the decay of existing infrastructure. You might think, given neoliberal orthodoxy, that the private sector is taking up the slack. It isn’t. The graph below shows net private nonresidential fixed investment as a percent of GDP. Net means less depreciation (the declining monetary value of existing assets over time, as they wear out and grow obsolete);… Read More

GDP etc. in a deep funk

By the way, here’s a graph of actual real U.S. GDP and its major components relative to their long-term (1970–2007) trendlines through the end of 2013. Note how things fell off a cliff in the recession. GDP, consumption, and government spending are all about 15% below where they’d be had they continued to grow in line with their long-term trend. (The hysteria over out-of-control government spending looks ludicrous in the light of this graph.) Investment is about 25% below where it “should” be. thanks largely to the housing collapse, though it’s staging… Read More

On Panitch & Gindin and American decline

These are comments I delivered at a panel on The Making of Global Capitalism, by Leo Panitch and Sam Gindin, at the Rethinking Marxism conference, held at the University of Massachusetts–Amherst, on September 20, 2013. I interviewed them about the book here. I want to start by saying that I greatly admire this book, and pretty much everything these two guys have done over the years. Unusually for the genre, I meant every word of the blurb I supplied for it. A while back, I was on a panel with Radikha Desai, on which she… Read More

Profitability: high, and maybe past its peak?

As every Marxist schoolchild knows, the profits “call the tune” for the capitalist economy, as Michael Roberts put it recently. He writes: Despite the very high mass of profit that has been generated since the economic recovery began, the rate of profit stopped rising in 2011.  That’s a sign that the US capitalist economy will not achieve any significant sustainable growth over the next year so so.  The rate remains below the peak of 1997.  But the rate is clearly higher than in was in the late 1970s and early 1980s at… Read More