Higgenbotham wrote: ↑Sat Jun 22, 2024 1:33 am
Higgenbotham wrote: ↑Tue Jun 11, 2024 1:53 pm
This will be my next project in this Dark Age Hovel: to go through all 214 pages of this hovel and summarize the factual information regarding the outputs that the managerial elite class overseeing the United States has actually generated.
7. "Acemoglu et al. systematically examined companies that had corporate ties to Geithner, had executives who served with him on other boards, or had other direct relationships. They found that "the quantitative effect is comparable to standard findings" in Third World countries with weak institutions and higher levels of corruption. In other words, markets react to government actions in the U.S. the same way they do in a corrupt developing country. Crony capitalism pays, and the market knows it."
This is a link to an article from this same author published in the Financial Times.
https://www.ft.com/content/4e3f1731-3d6 ... ca51649b29
A few excerpts:
The real threat to American prosperity
Nobel-winning economist Daron Acemoglu on trade wars, tech industry hubris — and how loss of faith in US institutions could spiral
Even amid a tumultuous present, it is difficult to imagine a radically different future. But the fortunes of nations do change, often dramatically. Politics has consequences. For this reason, it pays to think creatively about what these consequences might be — and about how we might look to those living with them.
As an economist used to studying growth and stagnation over the long term, I can picture myself assessing American history in 2050 (assuming I am still alive and not senile by then). This story, of course, is yet to be told. But it could go something like this.
The decline, when it came, was sudden and unexpected. The 20th century had been the American century and the US looked even more unstoppable in the first decades of the 21st. As it took the lead in artificial intelligence, its economy appeared robust and destined to outperform western European rivals that were still suffering the effects of the 2007-09 financial crisis and the Covid pandemic of 2020-22. China was a more formidable rival, but many commentators had begun dismissing the possibility that it would overtake the US. It came as a surprise to most when, in the early 2030s, the US economy stopped growing and fell behind even compared to Europe.
None of these explanations were sufficient to account for the sudden, unexpected decline, however. The most significant was the crumbling of American institutions. This happened both because of structural problems that long predated Biden and Trump, and also, importantly, because the actions of both presidents crushed belief in these institutions.
The cracks were visible long before Trump was first elected in November 2016. He was in many ways a symptom of those troubled times. Voters can be gullible. But their willingness to support outsiders, often with very little preparation or qualification for national office, correlates with deep discontent with the existing state of affairs and a belief that the system needs to be shaken up. One fundamental problem was that political operatives and business elites opposed to Trump never understood him in this way.
Symbols matter, especially when it comes to institutions. Once it becomes accepted that institutions are not functioning and cannot be trusted, their slide intensifies and people are further discouraged from defending them. We could see this dynamic already in the late 2000s, interwoven with polarisation. Trust in institutions took a severe beating after the financial crisis of 2007-09, precisely because the conceit of a well-regulated, expertly run economy came crashing down. Understandably, many Americans reacted negatively when the government rushed to rescue banks and bankers while doing little to help homeowners in bankruptcy or workers who had lost their jobs. The inequalities that had formed became much more visible, partly because the lavish lifestyles of the bankers rescued by the government became a symbol for the gulf that had opened between regular working people and the very rich.
Similarly, the critical state of US institutions became much clearer after Biden’s cynical pardons, sending a signal to millions that his administration’s defence of democracy was a charade.
The damage to democracy thus began even before Trump ascended to power the second time.
America’s collapse thus followed Hemingway’s famous line on bankruptcy. It happened gradually, as shared prosperity, high-quality public services and the operation of democratic institutions weakened, and then suddenly, as Americans stopped believing in those institutions.
Looking back from 2050, however, one thing is clear. This was all avoidable. There were many points at which institutions could have been bolstered, compromises reached and extremists kept at bay. American politicians and activists failed. Perhaps Americans got the politicians and the activists they deserved. At the very least, they did nothing to prove that they deserved better.
Daron Acemoglu is a professor at the Massachusetts Institute of Technology and a winner of the Nobel Prize in economics
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.