>> A sustained sub-5% unemployment rate and a
>>significant hike in the minimum wage are the main reasons
>
>Doug, I don't think the first is the reason as much as the thing that
>itself needs to be explained.
I don't disagree with this at all.
>(As for the min wage hike, I understood it to
>be part and parcel of welfare reform, i.e., in order to force people to
>work the min wage simply had to be increased minimally while welfare was
>cut back.)
Nor this. I'd add that Nathan's beloved EITC was also part and parcel of welfare reform - to widen the economic wedge between welfare and work, and to widen the ideological wedge between the undeserving and deserving poor. It's also a subsidy to low-wage employers. But the minimum wage increase and the EITC have substantially improved the material welfare of the bottom third of the U.S. income distribution, no matter how debased the motives behind them.
>At any rate, as the WSJ quotes some expert today, the US boom is not
>inspite of but because of the world wide slump: speculative capital flight
>is driving overconsumptionism from equity inflation; credit terms are
>eased, resulting in debt driven investment (in 1998, US absorbed more than
>4x the foreign capital it did 1994); commodity prices are depressed,
>boosting profitability. Moreover the stock market has been driven higher by
>centralisations and buy backs and other acts of financial sabotage. There
>is no inherent strength to the US economy; it's a bubble economy that was
>only blown bigger by Big Al's last rate cuts.
I don't disagree with this either. I'd add that the Fed, and the U.S. capitalist class it works for, has tolerated low unemployment and rising real wages only because the financial situation in the rest of the world is so dire. The cliche is now that the Fed isn't only the U.S. central bank, but the central bank to the world. The world demands indulgence. Also, I'll bet Greenspan & Co. are terrified of what would happen if the U.S. bubble did burst, so I think they're closing their eyes to it for the moment and hoping all this bad stuff just goes away.
>But most importantly from a
>Marxian point of view, that is from the pt of view of the global
>proletariat, the capitalist system has entered a general crisis in which no
>*general* advancement is possible.
We'll see about that, won't we? Shaikh argues the contrary for what he thinks are very Marxian reasons too.
Doug