Everett Wilkinson | Give Me Liberty or Give Me Debt!

Everett Wilkinson — Spoiler alert: there is no so-called ‘productivity conundrum.’ In simple English, companies have been incented with America’s answer to China’s gun-to-the-head form of monetary policy: Borrow at 5,000-year low interest rates or suffer the consequences.

The beauty of the strong-arming is readily apparent in the short term, at least for a while. Toss the top line; earnings per share have never been so flattered as they have been recently in the wake of debt-financed share buybacks.

The problem is monetary policy can only force gratuitous gratification so many times without exacting a pernicious price. That is what lies at the non-mystery of slumping productivity growth: a dearth of investment in organic growth, the misallocation of resources stemming from credit booms and the death on the line of startup activity. Mystery solved, but to what end?

This week, for a change, your recommendations would be most welcome in addition to your feedback. The fact is, this country needs strong productivity growth more than it ever has. An openness to all suggestions would be a great start.



Give Me Liberty or Give Me Debt!

In the event you’ve already binge-watched House of Cards Season Four, don’t be so quick to tune Netflix out. Instead, restore your faith in mankind and search for Brothers in War, a gripping National Geographic Vietnam War documentary that recounts the journey of Charlie Company. Though two-thirds of those who served in combat in Vietnam were volunteers, the draftees featured in Brothers were one of the last groups to go through basic training and sent to the front lines together, in this case to the unforgiving Mekong Delta. Some 50 years later in the making of this film, they reunite and marvel at their lasting bond. But most of all, these boys, now seniors, ask what gift of fate allowed them to return home at all, unlike so many of their comrades who made the ultimate sacrifice.

Among the unalienable rights generations of U.S. soldiers have fought to preserve is that of liberty, both ours and that of those in foreign lands. Little could many of those who served in the Vietnam era have known how terribly that very freedom for them as individuals would be impinged upon in their lifetimes. Among workers who are roughly the age of Vietnam veterans, 65 and older, those who work because they have to now exceed those working by choice by a factor of 2 to 1.

Several culprits contributing to their delayed retirements are easily identifiable, chiefly being a lack of savings and income. But these are merely symptoms and don’t get at the root cause of the disease. At its contaminated core is a fundamental change in our culture which has for many, blocked the pathway to achieving the American Dream. That change is an acceptance of debt, rather than investment, to power economic growth. Read More