Monthly Growth Scan

Principal author:
John L. Clark


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

The insane devotion to economic growth continued in February. We got to meet a relatively new member of its cheerleading squad: Austan Goolsbee, the new Chairman of the Council of Economic Advisers to President Obama, made an appearance on The Daily Show during which he stumped for growth six times in the eight minutes of the interview. “We've got to grow!”, he gushed, then immediately cautioned that we have to (also) “live within our means”. A society built on that deep inconsistency can and does lead to grotesque instability.

Last month, I pointed to several discussions of exponential growth in Egypt's economy, oil consumption, and population, and we've seen what the current situation looks like there. Slate magazine posted an article that reinforces this point at the very end of January, thus slipping past my growth scan for that month.

Egypt has posted solid economic growth numbers, particularly in the past half-decade, but that growth has failed to improve the quality of life or income of most of its 80 million citizens.

While the spreading protests demonstrate that Egypt is not alone in her sentiments, some reports show that neither is she alone in her structural situation. One mentioned that “[w]estern investors may take eager note of India’s economic growth rate of nearly 9 percent a year”, although India shelters deepening inequality, as with all other growth-based societies. Concern about the stability of Europe continues to be a theme; one article maddeningly asserted that “[t]he euro zone economy ended last year with stable growth”, but that it still failed “to meet expectations for an acceleration as expansion in the three largest nations fell short of forecasts and Greece and Portugal contracted.” The concept of “stable growth” is critically unsound on its own, but to then immediately go on to call for even more growth is deeply frightening. Ben Bernanke provided a parallel summary of the situation in the United States:

Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate.

Analysts presented us with a whole list of things that we can't do, lest we harm our precious, precarious economic growth. Some tell us that we can't have such a large deficit, or “the result could be sharply higher interest rates that would slow economic growth”. But Paul Krugman is manning the levees against the rising tides of austerity, asserting that we can't “slash spending”, because that is “a recipe for slower economic growth”. Bernanke is in Krugman's camp (or vice versa), warning that “steep reductions in government outlays could compromise growth”. Robert Reich agrees, too, but goes a step further and calls for a return to a progressive tax system to “get the economy growing again”. It's reasonably clear that when two Democratic congressmen requested a report from the EPA about “the effects of the Clean Air Act on job creation and economic growth”, they wanted to be sure neither of those were negatively impacted. One article provided a big hint about US foreign policy when it warned that “lingering uncertainty over the stability of the Middle East could drag down growth, not just in the United States but around the world”. Republicans warned that eliminating oil subsidies “would kill jobs and slow economic growth”. The President of the United States himself declared that he will veto any bill that “curtails the drivers of long-term economic growth”. Growth certainly is increasingly precarious. That, of course, is largely the point. Economic growth, like all exponential growth, rapidly burns itself out.

These policies, from across the political spectrum, all share the same goal but have wildly contradictory means to reach it. It would seem that anything we do is going to harm economic growth. That, too, is largely the point. Thus the confusion about the symptoms of growth should not be surprising. In a different article, Krugman flirts with thinking about limits when he notes that “both economic growth and bad energy policy have played some role in the food price surge”, although he quickly retreats to the core of his argument about the danger that climate change presents to food security. Andrew Leonard digs in a bit more, pointing out that “[t]he growth in global demand for food probably deserves more attention than the single sentence Krugman devotes to it in his column”, although he limits the scope of his discussion to food demand and focuses his gaze on China. Talking frankly about growth of consumption throughout the world, and in particular discussing the role of the United States in that process, is a poison pill for so many mainstream commentators.

We can see why this is the case, as the steady stream of narcotic propaganda about our growth situation also continues. One headline sings that Factory and spending data support strong growth tone. Another harmonizes that Data points to stronger growth momentum. Another is more timid, carefully offering that Retail sales slow, still point to growth pickup. Again we are told that Fed Forecasts Faster Growth as Economy Improves. On the technology front, we read that EBay Says Big Growth Is Not Over. Talking about climate change remediation (but not about resource depletion), David Roberts summarizes economic faith:

From what economists tell us, it looks like the worst thing policymakers risk on climate change is somewhat slower economic growth. One way or another, we're getting wealthier.

Looking for easy culprits for the press of current economic problems, one report emphasized that “[t]he snowstorms in January probably had some effect on the anemic job growth”, but that “[a] mosaic of other indicators this week suggested that the economic recovery was gaining momentum”.

We saw writers like Krugman and Leonard doing some limited analysis about the consequences of growth. We need to point out where that analysis is valuable and explain its unconscious boundaries, and encourage these leaders and others to expand the scope of that reasoning. I am very pleased to see Prince Charles providing some bold leadership on environmental issues. “I cannot see how we can possibly maintain the growth of GDP in the long term if we continue to consume our planet as voraciously as we are doing”, he boldly stated, although it is important to press even deeper and note that growth of GDP in fact requires voracious consumption, and that we must jettison that very goal. There are others also providing a conscious and stark critique, such as Robert Seymour.

We have unconsciously sacrificed our collective humanity and devalued our lives on the altar of a counterfeit economy that picks “winners” and “losers” based on global forces that are far beyond our immediate control. The never ending demands placed on us in an economy deemed “too big to fail” and too presumptuous to think it could ever stop growing, have now pushed America to a critical point in history.

The title of his article is an excellent reminder of what is important: Got Food? Consider yourself lucky. Indeed.

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