Mezclando

“The fragility at the heart of the American model was threatening the world economy as a whole. Japan and Germany were the most dependent on the situation in the US—‘the creditors have been captured by the debtor’. The American deficit was the symptom not only of huge quantitative imbalances but of a deliberately instituted qualitative disequilibrium: the displacement of productive activities to China and other emergent economies amounted to deflation on a world scale—driven in this case not by a collapse of demand but by cost reductions. The US stock market, and the other financial markets operating on similar lines, drove these processes forward; the stock markets ‘no longer reinforcing the capital base of the quoted enterprises but methodically eroding it’”.

“This conflict between consumers and workers is an important piece of the productivity puzzle. Workers have lost power since the heyday of organized labor in the mid-20th century. Meanwhile, consumers are in their heyday right now. Family spending dominates the U.S. economy more than any other big economy”.