U.S. Economic Collapse Permanent?
Haven’t we been warning you that an economic collapse is right around the corner? Even after a minor stock market crash at the start of 2016, few investors seemed to get it: this economic crash might be permanent.
Every time we shine a light on the crisis facing America’s economy, some knucklehead writes in defending the establishment bigwigs.
But even they can’t deny this next fact: U.S. worker productivity is in its worst slump since 1993.
Our efficiency as a nation just declined for the second consecutive quarter, yet we have political candidates (some of them running for president) who think Americans are working harder than ever before. (Source: “U.S. Worker Productivity Hasn’t Been This Bad Since 1993: Chart,” Bloomberg, May 4, 2016.)
It just isn’t true. Many Americans are hard-working and inventive, but others are more willing to slack off. Recent studies show that Americans spend an average of five hours a day on their smartphones, facebook-ing, taking snapchats, and tweeting.
These are just a few of the impediments to a fully productive workday. Don’t buy the scary quotes about how many hours we’re working. Those one-liners are meant for the cameras, not for you. (We’re looking at you, Bernie!)
In any case, longer hours don’t necessarily translate to real economic output. Being productive is what helps our economy grow. Without that fuel, the U.S. economy could enter a phase of permanent stagnation.
A handful of economists have been worrying about this the last few years. After all, there are only a handful of ways to grow an economy, and the U.S. doesn’t have any of them.
Let’s run down the list:
- A population boom: Economists call this one a “demographic dividend,” because the returns are so predictable. Good things happen when you have a growing population. Unfortunately, the U.S. has an aging population. The baby boomers are starting to retire, meaning we’ll have fewer workers and more retirees. No chance of growth there.
- Immigration: Another way to get the “demographic dividend” is to bring in highly trained foreign workers. But considering the U.S.’s recent history with illegal immigration, this idea isn’t politically feasible. Scratch it off the list.
- Manufacturing: We lost this battle a long time ago. American manufacturing simply can’t compete with factories in China and Bangladesh—at least not while labor is so cheap in those parts of the world. We have a shot at high-tech manufacturing, but it’s probably too little too late.
- Technology: Maybe some 21-year-old kid with a laptop can build a billion-dollar company, but that doesn’t add jobs to the economy. When Nokia was at its peak, the company employed over 100,000 workers. It was the king of photography, but the company fell apart as smartphone cameras grew more popular. Now Instagram is the king of photography. When it sold to Facebook for $1.0 billion, the company had only 13 employees. (Source: “Facebook Buys Instagram For $1 Billion,” TechCrunch, April 9, 2012.)
- Productivity: Since it was pretty obvious that the U.S. didn’t have any of the above, economists hoped productivity would save us. Making the economy more efficient, gleaning more output from every worker and every dollar of capital could have helped. But America is too lost in pleasure.
The U.S. economy is dead without (at least) one of the growth factors listed above. Unless someone proves to us that the data is flawed, we will continue to warn you, dear reader, of an imminent U.S. economic collapse.