Monthly Growth Scan

Principal author:
John L. Clark


This article examines other sources that discuss the policy of economic growth, focusing on sources from March, 2011.

March was a study in localized chaos and agony that corresponds well with the year and even the decade thus far. True, in the wake of all the ongoing strife, I have seen less concerted devotion to economic growth. People are still heavily discussing economic repercussions and jobs, however, and I don't think they want either to shrink. I was reading at the school library last week, when I happened to look up and see one of the talking points on the muted CNN HUD: “Japan, Libya, & Your Finances”. Later, the headline was “Japan Crisis: Effects on Car Prices”. But that doesn't mean no one is explicitly stoking the cultural blaze of economic growth, some even with an explicit link to the recent crises.

Since Japan is such an influential economic contributor, particularly with respect to highly technical luxuries, it is unsurprising that the Japanese nuclear crisis has elicited commentary that is both implicitly and explicitly concerned about economic growth … everywhere. For example, one economist said, “[w]e don’t know the extent to which the post-tsunami Japan is going to grow, and whether or not there will be consequences for other countries as well.” One article places the Japanese crisis on the table with the larger set of concerns that analysts are considering:

Despite positive signs, economists warned that economic growth could be hit by the twin shocks of high gas prices and the impact of events in Japan, which has hampered auto and electronic supply chains.

All of the mainstream debates about economic issues find common ground in assuming that economic growth is the goal. With the continued high prices of oil, and about 1.6 mbd going offline in the shadow of the civil war in Libya, more analysts are considering the links between fuel supplies and the economy, as several of the earlier sources hinted. One article reported that “[t]he U.S. government reiterated that it could tap its strategic oil reserves in order to safeguard economic growth as surging gasoline prices increase pressure for action.” The New York Times gave us this tip: “One rule of thumb is that each $10 increase in the price of a barrel of oil knocks 0.2 to 0.3 percentage points off the growth rate of the economy.” On the other hand, Ben Bernanke declared that “the surge in oil prices is unlikely to hurt the U.S. economy unless it is sustained”, but was instead concerned that “job growth remains far too anemic”.

Another ongoing topic of discussion that pulls back the curtain on growth is the current international political trend towards imposing austerity measures to deal with budget crises. One powerful financial sector executive promoted careful cuts. “"Let's cut the deficit, but let's do it gradually," so that real economic growth can take hold.” The conservative position is clear:

“We have been about cutting and growing since Day 1,” Representative Eric Cantor, the Virginia Republican and majority leader, said.

Paul Krugman took to his podium a couple of times to champion growth but defend against austerity. Early in the month he wrote an article that provides a good summary of the liberal growth position in which he said that “consumer surveys suggest solid growth” but that conservative spending cuts would end up “undermining America’s future and threatening to abort a nascent economic recovery”. Later in the month he reprises this role:

Austerity advocates predicted that spending cuts would bring quick dividends in the form of rising confidence, and that there would be few, if any, adverse effects on growth and jobs; but they were wrong.

Another source tentatively supports the government's positive impact: “[m]ost economists believe the Federal Reserve's bond-purchase program is helping to support U.S. growth”.

Of course, let's not forget that the economists still view all of human society through the ideological lens of growth. One report was cautiously optimistic that U.S. bumps up Q4 growth, seen slowing in early 2011, while another more happily reports that Data points to strengthening growth, jobs, which is also backed up in a third:

The labor market is strengthening even though economic growth slowed early in the year, held back by bad weather and rising energy prices, after a brisk fourth quarter.

Excitement continues about the effect of manufacturing on economic growth:

Other data Monday painted a bullish picture of the manufacturing sector, with a gauge of factory activity in the country's Midwest hitting a 22-1/2 year high this month, which should help the economy weather rising oil prices and maintain its steady growth momentum.

With all of the cultural pressure to support the ubiquitous growth program, there are few providing any push back. One of the consistent voices providing regular dissent is Paul Mattick, who again published a strong article in March: Capitalism's Dismal Future.

Capitalism has been around for so many generations now, proving its vitality by displacing or absorbing all other social systems around the globe, that it seems a part of nature, irreplaceable. But its historical limits are visible in its inability to meet the ecological challenges it has produced; to generate enough growth to profitably employ the billions of people accumulating in slums in Africa, South America, and Asia, along with growing numbers in Europe, Japan, and the United States; and to escape the dilemma of dependence on a degree of state participation in economic life that drains money from the private enterprise system. Just as the Great Recession has demonstrated the limits of the means set in place during the last 40 years to contain capitalism's tendency to periodic disaster, it suggests the need finally to take seriously the idea, as the saying goes, that another world is possible.

There is an opportunity for us to provide some resistance to the idea of unlimited growth that came to my attention this month. I received an email from a member of CASSE pointing out that the Conserving the Future website (a joint effort by the U.S. Fish and Wildlife Service and the National Wildlife Refuge Association) is hosting a Bold Ideas Forum that encourages people to vote on conservation proposals. This CASSE member has proposed an idea titled Raise public awareness of the trade-off between economic growth and wildlife conservation, and he has asked us to vote for it and comment on it in order to do just what it says. Please do both! (You will need to sign up for an account on that website, which hopefully will not be too burdensome.)

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