Can America Produce Genuine Long-Term Growth?
by Michael S. Rozeff Genuine means authentic which means “conforming to fact and therefore worthy of belief andtrust” (as the thesaurus says), and the antonym is counterfeit, false, and a sham.Amid the intense focus on the recession and Washington’s efforts to combat it, a far moreimportant question is being ignored. Can the American political economy come up with honest-to-goodness long-term growth? Year in and year out growth that augments capital, that reducesunemployment and underemployment to stable and low levels, that significantly improves realincomes of most Americans, that raises living standards throughout the land, and thataccompanies a solid increase in asset values in gold-deflated terms?Is the American political economy in a position to augment wealth and create value over thelong-term? Much depends on the answer.The question is not recovery from a deep recession. Nor are we referring to a statistical rise ineconomic numbers that are heavily influenced by large amounts of new government debt andnew government spending. We are talking about a decade or two of real economic growth, suchthat at the end, nearly all working people are better off and feel better off. No one can bake a genuine cake without the proper ingredients. One cannot bake a real cake withthe wrong recipe and the wrong ingredients. A genuine cake (made at home from scratch) hasrelatively few ingredients, and they are pure and unadulterated, such as butter, eggs, flour, sugar,vanilla, and baking powder. A fake cake, the kind of cake sold in most grocery stores, has a longlist of chemicals such as partially hydrogenated vegetable and/or animal shortening, highfructose corn syrup, glycerin, wheat protein isolate, polysorbate 60, soy protein isolate, sodiumstearoyl, and more.Are Americans in a position to bake a genuine economic cake?Washington has largely remade the American kitchen to the point where it is equipped mainly to bake fake cakes. It is a government-run kitchen. The cooks are shackled. They no longer controlthe production. The maintenance of the kitchen is going downhill. We are lucky even to get asmany fake cakes coming out of the ovens as we used to. Lately we import many of them, whichwe pay for with fake money.Since the point here is to raise the important question, let us put the matter extremely. Genuinelong-term growth is
given the present political economy of America. Far too manyeconomists suggest the opposite as they spy green shoots, recovery, stabilization, and a stock market rebound. They are addressing neither the long term nor genuine wealth-augmentinggrowth. Cheerleading for temporary, unsustainable, and unbalanced recoveries has no significantimpact on the long-term issue.If Americans
produce real and substantial growth over the next 20 years, it will not be with