Joe Stiglitz: Why the world economy's malaise continues

[Robert Mahnke]

Sorry, but this is absolutely consistent with what I have been saying.  The
global problem is that in the developed world, demand fell off after the
2007 shock and hasn't returned.  Hence the weakness in the European and US
economies, with the US outperforming EU but not by a lot.  Japan's problems
predate 2007.  Of course, things are not the same everywhere, and the
Chinese economy was strong for years after 2007, since China's internal
growth made up for the fall-off in demand from the West.  China's economy
is now faltering.  It's easy to believe that there is "too much supply" in
China because of the much larger role of state planning.  Market-based
economies can have bubbles, but state-run economies are less likely to
allocate resources well, and it's easy to picture Chinese bureaucrats
continuing to build more factories that will turn out excess goods.  But
what's happening in China does not change the fact that in the US and
Europe, we have never recovered from 2007.  Demand limps along, and our
political system has not been able to recognize the problem or do enough
about it.

On Fri, Jan 15, 2016 at 10:55 AM, ish mailian <ishmailian at gmail.com> wrote:

> WORLD  ASIA  CHINA NEWS
>
> Glut of Chinese Goods Pinches Global Economy
>
> Plants in China keep producing as growth falls, fueling deflationary
> pressure world-wide
>
> A worker loads a truck with tires from Del-Nat Tire, a distributor in
> Memphis, Tenn., that found itself stuck with high-priced inventory after
> tire prices declined because of overproduction in China. ENLARGE
>
> A worker loads a truck with tires from Del-Nat Tire, a distributor in
> Memphis, Tenn., that found itself stuck with high-priced inventory after
> tire prices declined because of overproduction in China. PHOTO: STEVE JONES
> FOR THE WALL STREET JOURNAL
>
> By LINGLING WEI,  BOB DAVIS and  JON HILSENRATH
>
> June 1, 2015 10:38 p.m. ET
>
> 164 COMMENTS
>
> DONGYING, China— Liu Zijun built a thriving tire-manufacturing business
> when China’s economy was roaring ahead. But when China’s growth weakened,
> he had to cut prices to keep his business afloat.
>
>
>
> Now the pain felt by industrialists such as Mr. Liu is reverberating
> across the globe, showing how China, once the world’s most reliable source
> of growth, is adding to deflationary pressures world-wide.
>
>
>
> In the rubber-tree fields of Southeast Asia, planters are scrambling to
> cut prices for their latex fast enough to keep customers in China happy. In
> the U.S., tire distributors are marking down prices and some are cutting
> staff as China floods the U.S. with discounted goods from unneeded
> factories.
>
>
>
> “The growing production capacity in China changed the U.S. industry,” said
> Brian Grant, chief executive of Del-Nat Tire Corp., a Tennessee tire
> distributor that exited the business early this year after chalking up
> losses on overpriced inventory it had bought before prices fell.
>
>
>
> A dozen years ago, low-cost workers from the countryside poured in to
> China’s factories, helping bring down the cost of everything from T-shirts
> to tricycles.
>
>
>
> Then the country’s booming demand for commodities such as oil and cotton
> helped to reverse that downward inflation trend, as natural-resource prices
> surged. Now, China’s excess manufacturing capacity and slowing growth rate
> are changing the equation again, putting renewed downward pressure on
> prices.
>
>
>
> Milk producers in New Zealand, coal miners in Australia and sugar growers
> in Brazil have been forced to cut their prices after finding they had
> overestimated commodity demand from China. At the same time, Chinese
> manufacturers, stung by their country’s economic slowdown and excess
> capacity, are flooding export markets with finished goods such as tires,
> steel and solar panels.
>
>
>
> RELATED READING
>
>
>
> As the China-U.S. Tire Battle Rolls On, American Consumers Pay More
>
> How China’s Taste for Milk Actually Hurt the Value of New Zealand’s Cows
>
> Global deflationary pressures emanating from China are symptomatic of
> wider demand issues gripping economies from South America and Europe to
> much of Asia. China is far from the sole cause of price weakness; others
> include new crude-oil supplies in North America and sluggish growth in
> Europe. But China’s sheer size, reach and central role in global
> manufacturing make it a potent force.
>
>
>
> Consumer prices for tires in the U.S. have fallen in 23 of the past 32
> months, by a total of 6.5% since July 2012, after rising steadily a few
> years earlier, Labor Department statistics show. Prices of all goods
> imported to the U.S. directly from China have fallen in 20 of the past 38
> months, by 2.2% in all.
>
>
>
> For U.S. consumers, that is good news. But for policy makers and corporate
> executives, declining prices present a real challenge. The declines can sap
> profitability, deter investment and block wage growth, all of which are
> needed to help the world break out of its years of underwhelming growth.
>
>
>
> U.S. prices for services, which are affected by domestic factors such as
> the cost of labor, are running close to the Federal Reserve’s target of 2%
> annual inflation. They could move higher still as the job market tightens.
>
>
>
> But U.S. goods prices, which are more susceptible to global trade winds
> influenced by China, have been running well below the Fed’s inflation
> target since 2012, and entered outright deflation in 2013.
>
>
>
> Inflation below target
>
> Overall, the Federal Reserve’s preferred measure of annual U.S. consumer
> price inflation was 0.1% in April. Soft prices of commodities, particularly
> oil, and declining import prices have been contributors. This U.S.
> inflation measure hasn’t been above 2% since early 2012.
>
>
>
> In Europe, falling consumer prices earlier this year prompted the European
> Central Bank to embrace aggressive monetary-easing measures as a way to
> drive growth. In April, European consumer prices were flat.
>
>
>
> China’s role in weak price growth world-wide is becoming increasingly
> apparent as the country struggles to absorb all of the plant capacity it
> has added. Prices at the factory in China have fallen for more than three
> years, pressuring the People’s Bank of China to ease credit conditions and
> bring down borrowing costs in hopes of spurring consumption and broader
> economic growth.
>
>
>
> Still, PBOC officials worry that such moves could make matters worse, by
> channeling money to industries that already have excess capacity and are
> looking to export away their problems. The risk is that cheap money spurs
> even more expansion of Chinese manufacturing capacity.
>
>
>
> With China’s slumping construction industry requiring less steel than had
> been expected, the country has become a massive global exporter of the
> metal, weighing on global prices.
>
>
>
> Last year, China exported 94 million metric tons of steel, more than the
> total output of the U.S., India and South Korea, the world’s third, fourth
> and fifth largest producers.
>
>
>
> Too much capacity
>
> UBS analysts estimate the world has excess steel-production capacity of
> 553 million metric tons a year, much of it in China. That is enough to
> build more than 10,000 modern aircraft carriers a year, or the Eiffel Tower
> 75,000 times annually.
>
>
>
> The price of a common steel product called hot-rolled coil has dropped by
> 44% since March 2012, according to McGraw Hill’s Platts unit. Other prices
> are falling with it, including those for iron ore, coking coal and scrap
> metal.
>
>
>
> A fundamental mismatch of supply and demand haunts other industries. In
> 2013, Chinese authorities named 19 sectors plagued by overcapacity in the
> country, including cement, aluminum, copper, chemical fiber and paper.
>
>
>
> “This has happened again and again in markets, but this was on a super
> scale,” said Daniel Yergin, vice chairman of the Colorado market-research
> firm IHS Inc. “People invest, but they don’t see what everybody else is
> doing at the same time.”
>
>
>
> The troubles in China’s tire industry provide a glimpse of how pernicious
> deflationary pressures can be.
>
>
>
> Between 2000 and 2013, China’s tire production soared threefold to about
> 800 million tires a year as the country grew into the world’s biggest auto
> market, according to Freedonia Group, a market-research firm in Cleveland.
> Producers exported many of those tires, occasionally drawing complaints
> from tire industries in the U.S., Brazil, Turkey, India, Colombia and Egypt
> that China was dumping its excess supplies on their markets. All six
> nations imposed tariffs on Chinese tires.
>
>
>
> The problem has worsened dramatically since 2009. Chinese tire producers
> expanded rapidly by taking advantage of the easy credit that was part of
> the government’s post-financial-crisis economic stimulus. By the time
> China’s economic growth rate slowed to about 7% this year, output was far
> outpacing demand.
>
>
>
> According to the China Petroleum and Chemical Industry Federation, the
> more than 300 tire makers in China operate at 70% of capacity, far below
> the 85% that economists say is needed to generate profits. Chinese tire
> exports increased tenfold between 2000 and 2013.
>
>
>
> Guangrao, a county in eastern China, is home to about 200 tire factories
> in an area dubbed Rubber Valley. For years, the valley’s skyline was
> dominated by construction cranes hoisting up new factories.
>
>
>
> The Guangrao county government, which needs tire companies’ tax revenue,
> is trying to keep them in business. Doing so saves jobs in the short run.
> But it also puts off a consolidation that might make the survivors
> profitable.
>
>
>
> One manufacturer, Deruibao Tire Co., turned to the Guangrao government for
> help in arranging a sale that would prevent it from filing for bankruptcy,
> the Guangrao government said. Helping the company stay in business means
> little or no capacity will be reduced. Privately owned Deruibao declined to
> comment.
>
>
>
> Family-owned Shandong Yongsheng Rubber Group, where Mr. Liu is chief
> executive, is another local company that has struggled. It began making
> rubber tubes in 1986 and grew into one of China’s largest tire exporters.
>
>
>
> Figuring that demand would continue soaring, Yongsheng kept investing. The
> company spent roughly 1.5 billion yuan ($242 million) to finish two new
> plants last year, raising its capacity to 18 million tires a year from 15
> million.
>
>
>
> It became clear executives had overestimated demand.
>
>
>
> Del-Nat Tire CEO Brian Grant, seen here in a warehouse, sold the inventory
> at a loss. ENLARGE
>
> Del-Nat Tire CEO Brian Grant, seen here in a warehouse, sold the inventory
> at a loss. PHOTO: STEVE JONES FOR THE WALL STREET JOURNAL
>
> “I’ve been with the company for six months, and the prices of our products
> have already dropped four times,” Huang Jianning, a Yongsheng salesman,
> said in February. They now average about 200 yuan, or $32, per tire.
>
>
>
> Mr. Liu has mothballed two factories to try to keep his business on track.
>
>
>
> Rubber Valley’s problems have rippled out to other countries, including
> ones where planters produce the raw material for tires.
>
>
>
> Rubber trees take about seven years to mature. Planters had to decide in
> 2007—when China’s gross domestic product expanded by 14.2%—how many trees
> to plant to meet demand in 2014.
>
>
>
> When it was time to harvest, the Chinese economic growth rate had fallen
> by about half.
>
>
>
> Kampanart Pornpromvinij, a Thai planter, bought 395 acres over the past
> decade for rubber-tree cultivation. He thought demand and prices would keep
> rising.
>
>
>
> Now, more than 316 acres of his trees are maturing. But the price of the
> milky white sap, called latex, that is processed into rubber is down 60%
> from its high four years ago. Mr. Kampanart has continued shipping latex at
> a loss to Mr. Liu’s Yongsheng and other factories, so he can maintain
> relationships and gain at least some revenue.
>
>
>
> In the U.S., the sliding prices are a boon to tire shoppers. Gene
> Endicott, a Memphis gas-station mechanic, said he used his tax refund in
> February to buy tires priced at $139 apiece for his Dodge Caravan.
>
>
>
> “When I saw what tires were selling for, I jumped on it,” he said.
>
>
>
> For some retailers and distributors, though, the deflation has meant
> losses, layoffs and trade fights.
>
>
>
> At Del-Nat, prices fell so quickly they began to undermine the Memphis,
> Tenn., distributor’s business model.
>
>
>
> Del-Nat had been buying a large share of its tires from Yongsheng,
> reselling them at a markup. When Yongsheng and other Chinese companies
> started cutting prices, Del-Nat was stuck with older, higher-priced
> inventory it couldn’t sell at a profit.
>
>
>
> “Management had a hard time getting over the fact that prices were going
> down and to turn the product, they had to reprice it, even at a loss,” said
> Mr. Grant, a 33-year-old turnaround specialist recruited last year as
> Del-Nat chief executive. “Instead of minimizing losses, they sat and hoped
> for a rebound.”
>
>
>
> Tariff issue
>
> Matters grew worse after low-price exports by Yongsheng and other Chinese
> tire makers caught the attention of the U.S. government last year,
> triggering a tariff action that led to even more setbacks for Del-Nat.
>
>
>
> The Commerce Department was getting complaints from workers in U.S. tire
> factories, who argued that Chinese tire producers benefited from improper
> subsidies such as tax credits.
>
>
>
> Commerce zeroed in on Yongsheng, peppering the company with questions.
> Relations between the Chinese company, which declined to answer Commerce’s
> queries, and U.S. investigators became so poisonous that Commerce labeled
> Yongsheng a “non-cooperating party.” The Chinese company “significantly
> impeded” its investigation, Commerce said in a document explaining a
> preliminary ruling in November.
>
>
>
> In that preliminary action, the U.S. tagged Yongsheng with an 81.29%
> tariff. A final decision is expected this summer.
>
>
>
> Mr. Liu said his company withdrew from the Commerce investigation because
> it couldn’t provide “in a very short period” all of the detailed
> information requested. He said it would ask the department to review its
> decision next year if it puts in place a stiff tariff, as expected by many
> in the U.S. tire industry.
>
>
>
> ENLARGE
>
> Recognizing that its tires would probably become uncompetitive in the U.S.
> because of the tariff on them, Yongsheng stopped shipping orders to
> America. That left Del-Nat in Memphis without the main supplier for some of
> its best-selling brands. Losing money already, Del-Nat felt it didn’t have
> time to find alternative suppliers.
>
>
>
> “We were done; we couldn’t rebound,” said Mr. Grant, its CEO.
>
>
>
> He quickly sold the distributor’s inventory in January 2015 at what he
> calls a “distressed” price of $23 million, or about 85% of what Del-Nat had
> paid for it. Half of the company’s 52 employees have left or been laid off;
> the others are looking for jobs from the purchaser of the Del-Nat warehouse.
>
>
>
> “A tremendous amount of capacity came on line [in China] before people
> realized it wasn’t sustainable,” Mr. Grant said. “By then, it was too late.”
>
>
>
> — Wilawan Watcharasakwet contributed to this article.
>
>
>
> Write to Lingling Wei at lingling.wei at wsj.com, Bob Davis at
> bob.davis at wsj.com and Jon Hilsenrath at jon.hilsenrath at wsj.com
>
>
>
> Corrections & Amplifications:
>
> Freedonia Group is a market-research firm in Cleveland. An earlier version
> of this article misspelled Freedonia as “Fredonia.” (June 2, 2015)
>
> On Fri, Jan 15, 2016 at 1:50 PM, ish mailian <ishmailian at gmail.com> wrote:
>
>> I respectfully withdraw from the discussion; I can't go round on this one
>> more time, sorry.
>>
>> On Fri, Jan 15, 2016 at 9:54 AM, Robert Mahnke <rpmahnke at gmail.com>
>> wrote:
>>
>>> If what you're talking about is what's in that Japan Times piece, it's
>>> nonsense. If not, you haven't tried to explain.
>>>
>>> It's easy to explain where the shortfall in demand came from: the shock
>>> in 2007. Demand has never recovered. If you want to say we have too much
>>> supply, you need to explain how that could be. One can do this in a
>>> particular sector (say, cars or housing). But what's your story about the
>>> global economy?
>>>
>>> Sent from an iPhone; pls xcse typos.
>>>
>>> On Jan 14, 2016, at 23:28, ish mailian <ishmailian at gmail.com> wrote:
>>>
>>> Krugman is shooting away at his favorite target, the idiots on the Right
>>> who argue, mostly from some puritan ideology and not from any economic
>>> theory, that belt tightening is the best way to feed the poor. Though he
>>> sets his favorite theory against their favorite theory, the piece is not
>>> economics but politics.
>>>
>>> And, while he is absolutely correct, his piece has nothing to do with
>>> what I am talking about.
>>>
>>> On Fri, Jan 15, 2016 at 2:06 AM, ish mailian <ishmailian at gmail.com>
>>> wrote:
>>>
>>>> Yeah, he's right about the war on demand, but I'm not talking about
>>>> that.
>>>>
>>>>
>>>>
>>>> On Thu, Jan 14, 2016 at 8:02 PM, Robert Mahnke <rpmahnke at gmail.com>
>>>> wrote:
>>>>
>>>>> It's a little dated, but this post is still quite relevant,
>>>>> apparently:
>>>>>
>>>>> http://krugman.blogs.nytimes.com/2011/01/24/the-war-on-demand/
>>>>>
>>>>> On Thu, Jan 14, 2016 at 4:19 PM, David Morris <fqmorris at gmail.com>
>>>>> wrote:
>>>>>
>>>>>> That's what I thought.  A very biased author without a story,
>>>>>> confusing everything in order to attack excess debt.
>>>>>>
>>>>>> Thanks,
>>>>>> David Morris
>>>>>>
>>>>>>
>>>>>> On Thursday, January 14, 2016, Robert Mahnke <rpmahnke at gmail.com>
>>>>>> wrote:
>>>>>>
>>>>>>> That piece (the Japan Times op-ed from 2012) is gobbledegook.  In
>>>>>>> the right circumstances, it makes a lot of sense to talk about a bubble
>>>>>>> creating over investment in certain areas, leading to an excess of supply
>>>>>>> over what a market in equilibrium (not a bubble) will demand.  Arguably,
>>>>>>> you have had this situation in the auto industry, where national
>>>>>>> governments subsidize their own makers. But to say that this is happening
>>>>>>> across the global economy is nonsense, a slick label without a story behind
>>>>>>> it.
>>>>>>>
>>>>>>> The author says there is "excess labor"?  What does that mean?  Too
>>>>>>> many people have been born?  Persuaded to enter the economy instead of
>>>>>>> loafing in unemployment.  You have high unemployment because there aren't
>>>>>>> enough jobs, which is to say there is insufficient demand for the labor we
>>>>>>> have.
>>>>>>>
>>>>>>> The author also talks about excess capacity.  How does he know the
>>>>>>> problem is excess capacity instead of absent demand?  "Prices of digital
>>>>>>> home appliances are going down at an accelerating speed, and a new model is
>>>>>>> sold at a 50 percent discount within six months of its launch. This is
>>>>>>> proof that the global economy is in excess supply."  If you think that's
>>>>>>> proof of anything other than sloppy thinking, I have a bridge to sell you.
>>>>>>>
>>>>>>> His third problem is excess debt, and there the reason for this
>>>>>>> piece is clear.  The author is hostile to fiscal stimulus, and clearly has
>>>>>>> reasoned backwards to attack the case for it.  The case for stimulus, and
>>>>>>> what we could do about the secular stagnation, can be another conversation,
>>>>>>> but the only way to read this piece and to think that it rebuts what
>>>>>>> Stieglitz wrote is to have started with that as a belief and to have
>>>>>>> searched for confirmation.
>>>>>>>
>>>>>>> On Thu, Jan 14, 2016 at 3:19 PM, ish mailian <ishmailian at gmail.com>
>>>>>>> wrote:
>>>>>>>
>>>>>>>> Maybe this will help?
>>>>>>>>
>>>>>>>>
>>>>>>>> http://www.japantimes.co.jp/news/2012/11/05/business/excess-supply-not-lack-of-demand-weighing-on-the-global-economy/#.VpganfkrIb1
>>>>>>>>
>>>>>>>> On Thu, Jan 14, 2016 at 5:41 PM, Mike Weaver <mike.weaver at zen.co.uk
>>>>>>>> > wrote:
>>>>>>>>
>>>>>>>>> It's not really about production, it's about distribution.
>>>>>>>>>
>>>>>>>>> On 14/01/2016 22:12, David Morris wrote:
>>>>>>>>>
>>>>>>>>> Does the article say deceased demand isn't the cause of over
>>>>>>>>> supply?  Since I can't read it...
>>>>>>>>>
>>>>>>>>> David Morris
>>>>>>>>>
>>>>>>>>> On Thu, Jan 14, 2016 at 4:08 PM, ish mailian <ishmailian at gmail.com
>>>>>>>>> > wrote:
>>>>>>>>>
>>>>>>>>>> OK, but if demand is not declining, the price level is not
>>>>>>>>>> increasing, the story is supply. That's the story, Gerry.
>>>>>>>>>>
>>>>>>>>>> On Thu, Jan 14, 2016 at 4:59 PM, David Morris <fqmorris at gmail.com
>>>>>>>>>> > wrote:
>>>>>>>>>>
>>>>>>>>>>> Lack of demand is one of the basic causes of over-supply (glut),
>>>>>>>>>>> and that lack of demand might be caused by any number of things, like lack
>>>>>>>>>>> of money (liquidity). Overproduction (exceeding demand) might be another
>>>>>>>>>>> cause.  Cheap money would not be one of its causes.
>>>>>>>>>>>
>>>>>>>>>>> David Morris
>>>>>>>>>>>
>>>>>>>>>>> On Thu, Jan 14, 2016 at 3:42 PM, Robert Mahnke <
>>>>>>>>>>> rpmahnke at gmail.com> wrote:
>>>>>>>>>>>
>>>>>>>>>>>> When demand exceed supply, how do you distinguish between "a
>>>>>>>>>>>> supply story" and a demand story?
>>>>>>>>>>>>
>>>>>>>>>>>> On Thu, Jan 14, 2016 at 1:31 PM, ish mailian <
>>>>>>>>>>>> ishmailian at gmail.com> wrote:
>>>>>>>>>>>>
>>>>>>>>>>>>> Sorry about that; I thought it was a free article. It's an
>>>>>>>>>>>>> excellent article. And yes, it is focused on China, but the overproduction
>>>>>>>>>>>>> is not just a China story.
>>>>>>>>>>>>>
>>>>>>>>>>>>> The super capacity that was built to meet the expected super
>>>>>>>>>>>>> demand of the developing and emerging growth economies, in China and
>>>>>>>>>>>>> elsewhere, is the story, a supply story.
>>>>>>>>>>>>>
>>>>>>>>>>>>> On Thu, Jan 14, 2016 at 4:07 PM, David Morris <
>>>>>>>>>>>>> fqmorris at gmail.com> wrote:
>>>>>>>>>>>>>
>>>>>>>>>>>>>> This article is behind a paywall, but if the first two
>>>>>>>>>>>>>> sentences portend its content, then it seems to be saying that a glut of
>>>>>>>>>>>>>> Chinese goods is slowing growth.  More demand would be the solution to this
>>>>>>>>>>>>>> problem.  Lack of demand is its cause.
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> David Morris
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> On Thu, Jan 14, 2016 at 2:56 PM, ish mailian <
>>>>>>>>>>>>>> ishmailian at gmail.com> wrote:
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> Because it's true.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> <http://www.wsj.com/articles/glut-of-chinese-goods-pinches-global-economy-1433212681>
>>>>>>>>>>>>>>> http://www.wsj.com/articles/glut-of-chinese-goods-pinches-global-economy-1433212681
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> On Thu, Jan 14, 2016 at 3:49 PM, Robert Mahnke <
>>>>>>>>>>>>>>> rpmahnke at gmail.com> wrote:
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>> Why do you say that?
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>> On Thu, Jan 14, 2016 at 12:37 PM, ish mailian <
>>>>>>>>>>>>>>>> ishmailian at gmail.com> wrote:
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>> The world is not not suffering from too little demand but
>>>>>>>>>>>>>>>>> with too much supply and with too much capacity.
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>> On Thu, Jan 14, 2016 at 3:00 PM, David Morris <
>>>>>>>>>>>>>>>>> fqmorris at gmail.com> wrote:
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>> The economics of this inertia is easy to understand, and
>>>>>>>>>>>>>>>>>> there are readily available remedies. The world faces a deficiency of
>>>>>>>>>>>>>>>>>> aggregate demand, brought on by a combination of growing inequality and a
>>>>>>>>>>>>>>>>>> mindless wave of fiscal austerity. Those at the top spend far less than
>>>>>>>>>>>>>>>>>> those at the bottom, so that as money moves up, demand goes down. And
>>>>>>>>>>>>>>>>>> countries like Germany that consistently maintain external surpluses are
>>>>>>>>>>>>>>>>>> contributing significantly to the key problem of insufficient global demand.
>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>> At the same time, the U.S. suffers from a milder form of
>>>>>>>>>>>>>>>>>> the fiscal austerity prevailing in Europe. Indeed, some
>>>>>>>>>>>>>>>>>> 500,000
>>>>>>>>>>>>>>>>>> <http://thinkprogress.org/yglesias/2011/07/08/263588/the-conservative-recovery-continues-2/> fewer
>>>>>>>>>>>>>>>>>> people are employed by the public sector in the U.S. than before the
>>>>>>>>>>>>>>>>>> crisis. With normal expansion in government employment since 2008, there
>>>>>>>>>>>>>>>>>> would have been two million more.
>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>> On Thu, Jan 14, 2016 at 1:39 PM, Robert Mahnke <
>>>>>>>>>>>>>>>>>> rpmahnke at gmail.com> wrote:
>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>> <http://www.huffingtonpost.com/joseph-e-stiglitz/world-economy-2016_b_8908560.html?utm_hp_ref=world>
>>>>>>>>>>>>>>>>>>> http://www.huffingtonpost.com/joseph-e-stiglitz/world-economy-2016_b_8908560.html?utm_hp_ref=world
>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>
>>>>>>>>>
>>>>>>>>
>>>>>>>
>>>>>
>>>>
>>>
>>
>
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