Brendan, after WWII, most of our economic competitors were rebuilding their urban infrastructures while absorbing the loss of sixty million of their citizens, most in their prime. In addition to the WWII losses, add about 50 million killed in the 1918 flu pandemic (almost all of whom were young healthy adults), and the 38 million dead and wounded from WWI. That’s a total of 148,000,000 dead in the span of thirty years, or almost 8% of the world’s population.
Since the seventies new generations have been born, educated, and added to the workforce and those countries have grown into keen competitors. Since the nineties, we have faced the reality of technological displacement of millions of workers, a reality that will get far worse before it gets better.
The conditions of the past forty years or so are far more normal than those extant from the forties into the seventies. They were great for the average worker, but those conditions cannot be replicated.
You may have spent your working life modeling economic systems, but it’s kinda hard to create decent models when you have no idea how those systems actually work. Good models are hard enough with static systems, but models react poorly to the legions of quite brilliant people out there who quickly identify and react to flaws and opportunities inherent in the model. After all, any model is an attempt to game economic reality, to artificially manipulate the market in order to encourage or force artificial results.
I would argue that the primary reason for our dreadfully slow recovery from the last recession was the uncertainty created by the administration. Rapid regulatory changes. Subverted existing law. Regulatory instability which prevented analysts from blessing capital movement or investments. What most people need is rock solid stability in the rules of the game so they can confidently make economic decisions, and that was one item sorely lacking during Obama’s term in office.
Capitalism, not socialism, or artificial wages, or heavy handed regulation, lifted more than a billion people beyond a dollar a day poverty in the past twenty years. No model our meddling policy analysts could devise could EVER approach that level of success. Don’t believe me? Just ask the UN.