Levinson’s inability to perform a Bohm-Bawerk grade undermining of Schiller is shameful and the attempt appalling
Marc Levinson’s article, linked below, offers details about the post WWII “golden age” which are thorough for casual interest readers to understand and to gain insight as to events which may have cause and effect relationship related to modern economic conditions and how to proceed. However there were key places Levinson chose to selectively not educate the reader. One, he fails to discuss financing the “golden age” with taxes on income 25x poverty levels. Though realistically everyone paid higher rates to help finance the needs and support structures he thoroughly describes as essential to the success during that period.
he fails to discuss financing the “golden age” with taxes on income 25x poverty
Two, we saw the same improvements return once slightly higher rates were implemented before observing them fall alongside the tax rates afterward. This point he vaguely touches on and without the preceding information and him offering no description as to why, there is little to be recognized other than Levinson’s lack of analysis at this point and ho-hum ‘I guess it was an effort in vain’ approach is shocking to any reader and makes me concerned about the intent of this economist. At the same time don’t mind my block quotes. The overview of these first two alone indicate a directed perspective, not unnoticed when reviewing his career, but I want to touch on that – specifically intent – later because the overall article is well written and informative.
Levinson’s lack of analysis at this point and ho-hum ‘I guess it was an effort in vain’ approach is shocking
I am not offering questions, I’m answering them along the way and so I’ll keep going because it wasn’t limited to one missed topic broken into two segments. Three, at the same time he describes “inflation undermining wage gains,” which is correlation not causation and a red herring – and I’ll show you how so – he explains that productivity growth flattened after describing productivity gains. This is the trick, productivity growth is synonymous with GDP growth (total value) while productivity gains are gains based on a ratio – by using the word productivity in alternating fashion he sets up what I perceive as a systemic problem with his communication.
he describes “inflation undermining wage gains,” which is correlation not causation and a red herring
Let’s break down what we know. We know productivity rose, the value of goods fell, inflation occurred, and wages stagnated. By utilizing his phrasing – instead of correlating GDP and inflation (which is natural and well, just basic economics) he offers a magicians trick. Now as I’ve described earlier, we saw a decrease in the tax rates to the uber-wealthy – ummm that’s why GDP growth fell – literally the government wasn’t able to give people who regularly purchase needs the money the wealthy were now holding for wants. Quite specifically demand fell for US goods because there was no longer the same quantity of demand. And so I don’t confuse the use of the word demand, I mean economic demand fell, consumer demand remained the same. I still need food, but if I can’t buy it then I’m not in the market competing for it anymore. Well technically I am – because my ask is zero and because no government assistance, that means I’m going through charitable means to ask for it (not receive it mind you because we’re talking demand).
I still need food, but if I can’t buy it then I’m not in the market competing for it anymore
What does this mean? Sadly I have to explain this to every gen x I meet: if there are less people capable of buying goods, the amount of money you hold onto becomes less valuable. By taking some off the top and sliding it back into the bottom of the stack there is always a quantity of demand because – you know – people want to survive with food (I’m using the best ilk-ing voice I can when I write that because I wanted to type like food) and when they have money to buy food they will with 97% effectiveness do so. Yes, just like at the top there are problems at the bottom with thrill-seeking, greed, addiction, and just basic fraud but the waste on bottom is way less than at the top (ask a fraud accountant – they know both).
Sadly I have to explain this to every gen-x I meet: if there are less people capable of buying goods, the amount of money you hold onto becomes less valuable
I feel bad because at the heart of his article there is exceptional economics terminology but on the most basic levels he either fails to connect cause and effect accurately or fails to want the reader to connect cause and effect accurately. And this is where I come in and self-promote: my intent was to offer clear explanations and challenge this nouned economist (that’s right, not renowned, like with a name and everything – nouned) Marc Levinson to offer more than sideways historical explanations when you offer such accuracy and detail in so many other respects inside the same article. Perhaps I love history too much. Whatever the case, I certainly attempted to remain lighter when slighting him, than through my final two concerns.
Four, he seriously describes that “Two factors deserve special attention.” Then points at “growing welfare state” and “rising living standards” before concluding in his analysis that is kind of indicative that poor people and laziness were not just the reason for the golden age but also it’s demise. Effectively telling me he either is going in a circle or similar to me he thinks the silent generation set boomers and gen-x up adequately yet they fell on their face. Ultimately I believe him economically inadequate – he can’t converse in full and instead plays politics rather than economics and therefore he’s a political economist not an economist (title rather than technical trade).
he thinks the silent generation set boomers and gen-x up adequately yet they fell on their face
Five, his tenacity for blaming Schiller were at Hayek levels. And much like Hayek fell short; Levinson’s inability to perform a Bohm-Bawerk grade undermining of Schiller is shameful and the attempt appalling. Okay that’s all, I hope you all go back to all things not economics related and I’ll see you again soon.
PS – that was the link I mentioned before (just above) and I forgot I had these two floating around – Yay Millennials – let’s keep the improvements going