In all the smoke and fog emitted by Trump and his adversaries, it must be hard to make out the actual issues dogging this society, and even when you can, to find a coherent position on them. This was nicely illustrated in Paul Krugman’s fatuous column in Monday’s New York Times, “On Economic Arrogance” — the title describes Krugman’s own attitude to a T.
In it, Krugman attempts to account for the no-growth economy by marshaling the stock-in-trade legerdemain of academic economics: productivity, demographics, and labor metrics. Krugman actually knows zip about what afflicts us in the present disposition of things, namely the falling energy-return-on-energy-investment in the oil industry, which is approaching the point where the immense activity of getting oil out of the ground won’t be worth the cost and trouble of doing it. And since most of the things we do and produce in this economy are based on cheap oil — with no reality-based prospect of replacing it with so-called “renewables” or as yet undiscovered energy rescue remedies — we can’t generate enough wealth to maintain anything close to our assumed standard of living. We can’t even generate enough wealth to pay the interest on the debt we’ve racked up in order to hide our growing energy predicament. And that, in a nutshell, is what will blow up the financial system. And when that department of the economy goes, the rest will follow.
So, the real issue hidden in plain sight is how America — indeed all the so-called “developed” nations — are going to navigate to a stepped-down mode of living, without slip-sliding all the way into a dark age, or something worse. By the way, the Ole Maestro, Alan Greenspan, also chimed in on the “productivity” question last week to equally specious effect in this Business Insider article.
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