Posts By John Ross

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How the influence of World Bank policies damaged China’s economy

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Present negative trends in China’s financial system and economy were accurately predicted by me three years ago as occurring if there was any influence of policies of the World Bank Report on China.

While China has made major steps forward in areas such as the Asian Infrastructure Investment Bank and New Silk Road (‘One Belt One Road’) unfortunately in some areas World Bank policies did acquire influence. As predicted they led to present negative trends.

There should also be clarity. China has the world’s strongest macroeconomic structure so these trends will not lead to a China ‘hard landing’. But they are a confirmation that no country, including China, can escape the laws of economics. As long as there is any influence of World Bank type policies, which are also advocated by Western writers such as George Magnus and Patrick Chovanec, there will be problems in China’s financial system and economy.

The article I wrote in September 2012 which was published under the original title ‘Fundamental errors of the World Bank report on China’ is republished without alteration. 

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The World Bank’s report China 2030 has, unsurprisingly, provoked major criticism and protest. I have read World Bank reports on China for more than 20 years and this is undoubtedly the worst. So glaring are its factual errors, and economic non-sequiturs, that it is difficult to believe it was intended as an objective analysis of China’s economy. It appears to be driven by the political objective of supporting current US policies, embodied in proposals such as the Trans-Pacific Partnership.

Listing merely the factual errors in the report, of both commission and omission, as well as the elementary economic howlers, would take up more column inches than are available to me. So what follows is just a small selection, leaving space to consider the possible purpose of such a strange report.

The report has no serious factual analysis of the present stage of China’s economic development. On the one hand it is behind the times and “pessimistic”, saying China may become “the world’s largest economy before 2030”. This is extremely peculiar as, by the most elementary economic calculations, (the Economist magazine now even provides a ready reckoner!) China will become the world’s largest economy before 2020.

On the other hand, the report greatly exaggerates the rate at which China will enter the highest form of value added production. As such, the report calls for various changes in China, and bases its calls on the rationale of “when a developing country reaches the technology frontier’. But China’s economy, unfortunately, is not yet approaching the international technology frontier, except in specialized defence-related areas. Even when China’s GDP equals that of the US, China’s per capita GDP, a good measure of technology’s spread across its economy, will be less than one quarter of the US’s. Even making optimistic assumptions, China’s per capita GDP will not equal the US’s until around 2040, by which time China’s economy would be more than four times the size of the US’s! Put another way, China will not reach the technology frontier, in a generalized way, for around three decades, so this rationale can’t be used to justify changes now.

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The need to clarify the left on budget deficits – confusions of so called ‘Keynesianism’

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This article was originally published in the Socialist Economic Bulletin on Monday, the 14th of September.

John McDonnell, the new Shadow Chancellor, has created something of a stir by his firm opposition to budget deficits to cover current expenditure – writing ‘let me make it absolutely clear that Labour under Jeremy Corbyn is committed to eliminating the deficit and creating an economy in which we live within our means.’ The so called ‘Keynesian’ left has attempted to make a point of defending budget deficits, presenting this as a hallmark of the left. These latter views are politically damaging because they are economically false. Neither do they derive from Keynes but from the confused views of academic pro-capitalist economics. John McDonnell is entirely correct on this point to oppose borrowing to cover current expenditure over the course of the business cycle.

The following article, originally published as ‘A damaging confusion in Western economics books – which followers of Keynes and Marx should correct’ deals with this issue from a fundamental economic point of view. A more comprehensive treatment of the issue, presented in a less technical fashion, can be found in my article‘Deng Xiaoping and John Maynard Keynes’.

Hopefully John McDonnell’s firm stance on the budget deficit will help the left to adopt the positions of Keynes and Marx and abandon the confused ideas on budget deficits that were wrongly presented under the name of ‘Keynesianism’.

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No China’s economy is not going to crash – why China has the world’s strongest macro-economic structure

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This article originally appeared in Socialist Economic Bulletin on Tuesday, 1 September 2015.

A great deal of highly inaccurate material is currently appearing in the Western media about the ‘crisis’ of China’s economy – an economy growing three times as fast as the US or Europe. This follows a long tradition of similarly inaccurate ‘crash’ material on China symbolised by Gordon Chang’s 2002 book ‘The Coming Collapse of China’.

The fundamental error of such analyses is that they do not understand why China has the world’s strongest macro-economic structure. This structure means that even if China encounters individual problems, such as the fluctuations in the share market or the current relative slowdown in industrial production, which are inevitable periodically, it possesses far stronger mechanisms to correct these than any Western economy. This article is adapted from one published in Chinese by the present author in Global Timesanalysing the greater strength of China’s macro-economic structure compared to either that of the West or the old ‘Soviet’ model. The original occasion of the article was the next steps in the development of China’s next 13th Five Year Plan. The analysis, however, equally explains the errors of material currently appear in the Western media.

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In October a Plenary Session of China’s Communist Party (CPC) Central Committee will discuss China’s next five-year-plan. This provides a suitable opportunity to examine the reasons for China’s more rapid economic development than both the Western economies and the old Soviet system.

Taking first the facts which must be explained, China’s 37 years of ‘Reform and Opening Up’ since 1978 achieved the fastest improvement in living standards in a major country in human history. From 1978 to the latest available data real annual average inflation adjusted Chinese household consumption rose 7.7%. Annual average total consumption, including education and health, rose 8.0%. China’s average 9.8% economic growth was history’s most rapid.

As China’s ‘socialist market economy’ achieved this unmatched improvement in human living conditions it is this system which must be analysed. Its difference to both the Western and Soviet models explains why China’s economic development is more rapid than either.

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Reality and Myth of the US ‘Internet Revolution’ – And its lessons for China

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China is speeding up still further its ‘internet revolution.’ From the viewpoint of China’s overall economic strategy premier Li Keqiang has launched the concept of ‘Internet Plus’ – emphasising integrating the mobile Internet, cloud computing, big data and the Internet of Things with manufacturing and e-commerce. To further boost Internet use the premier recently urged China’s telecommunications operators to enhance Internet speeds and cut prices.

China’s still greater emphasis on the internet is even more impressive as it is in a context that China already has by far the world’s greatest number of internet users – 642 million in 2014, compared to the US’s 280 million and India’s 243 million. From a global perspective 21% of the world’s internet users are in China compared to 9% in the US.

Equally striking is the build-up of China’s investment in Information and Communications Technology ( ICT) of which the Internet is at the core. Over the last two decades China’s investment in ICT was already generating 1.0% a year total GDP growth – out of an average 8.8% annual expansion. As the Table shows over the last 20 years China’s annual GDP growth created by ICT investment was already significantly higher than any other major industrial or BRIC economy – for example two thirds higher than the US, over twice that of Germany and three times that of Japan.

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 But even given this high level of achievement China’s further push into the internet is vital for economic strategy. In a modern economy the internet has expanded far beyond its original use with computers to become the most rapidly growing sector of telecommunications, retailing, and application to advanced manufacturing – hence the key idea of ‘Internet Plus’.

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Can the Lib-Dems save Tory Britain?

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This article originally appeared on the blog Socialist Economic Bulletin on the 4th of May. 

By now many pollsters admit they misread the election campaign. As Freddie Sayers, You Gov’s Editor in Chief, put it:

‘Back in February, it was still considered a near-certainty by the media pundits that the Conservatives would end up significantly ahead. Ed Miliband was unconvincing, the economic numbers coming in were all positive, and now the SNP were wiping out Labour in Scotland: the Conservatives themselves felt a certain inevitability about their return to power after May 7th.’

The election campaign has not turned out like that – the Tories have not gained support. But an attempt has been to explain this by short term factors such as Lynton Crosby’s distasteful election tactics or backlash against the Tory media’s attempted character assassination of Ed Miliband. As Peter Kellner summarised this analysis: ‘Tories pay the price of an inept campaign’.

This view is wrong. History, including election campaigns, is ‘natural selection of accidents’. Far more powerful forces than Lynton Crosby, or David Cameron’s inability to accurately name his supposed favourite football term, explain the failure of Tory support to rise.

To show the deep social processes explaining absence of the anticipated Tory surge the graph below shows the Tories percentage of the vote at every general election since the party’s highest ever score –  55.0% in 1931. The graph is breath-taking in the steadiness of its decline.

conservative_declineAlready after World War II the peak Tory vote was 49.6% in 1955 – lower than inter-war levels. It fell to 41.9% by 1992 – the last time the Tories won a majority in the House of Commons. By 2010, when they had declined to being the largest party, but without an overall majority of seats, Tory support was  36.1%. Typically each Tory victory was won with a lower percentage of the vote than the one before, each Tory defeat saw the party’s support fall further than the one previously. 

This process is produced by clear social trends. The modern Conservatives originated in the South East of England, outside London, in the mid-nineteenth century following the old Tory Party’s split over repeal of the corn laws. Over nearly a century the Conservatives rose to become Britain’s dominant party by adding, in chronological order, mass support in North West England, London, the West Midlands and Scotland – the current Tory rump in Scotland, with one seat, is in a nation where from 1945-55 Tories actually had more support than England! The Tory decline was the progressive loss of first Scotland, then North West England, then the West Midlands and London.  Now the Tories are back in their original South East bastion. 

This trend, based on real elections not polls, was analysed in 1983 in my book Thatcher and Friends and has continued to operate since. It is such powerful forces, operating over more than 80 years, which underlay the failure of Tory support to rise in the election campaign.

Relentless historical Tory decline, of course, does not mean there are no short term shifts. There is a swing factor of slightly under 5% between a Tory victory and a defeat – explained by events nearer the time of an election. But this is superimposed on an underlying erosion of the Tory vote of slightly over 0.2% a year.

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Photo credit: Euronews

Syriza’s Victory: Turning Hope into Reality

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This article by Michael Burke and John Ross was originally posted on Socialist Economic Bulletin on Monday the 26th of January. 

The Greek people have inspired every progressive force in Europe, and beyond, by electing the first anti-austerity government in Europe. Syriza has similarly inspired every progressive person with the great political skill with which it outmanoeuvred the forces in Greece and Europe who attempted to scare the Greek people into not voting for it. As Alexis Tsipras said immediately after its victory Syriza has opened up hope for the Greek people – and many others as well.

The key question now is how to turn hope into reality.

Syriza has outlined clearly its orientation – which should be supported by every progressive force. Syriza has said it is not seeking to exit from the Euro. It wants Greece’s unpayable and unjust debt renegotiated. The immediate priority of the left throughout Europe must be to organise support for this demand of Syriza during the coming negotiations. It is to be welcomed that not only the political left but also far wider groups arguing for a rational economic policy support this course – including eminent figures in their profession such as Nobel Prize winners in economics Joseph Stiglitz and Chris Pissarides. All efforts must be redoubled across Europe to gain support for the renegotiation of Greece’s debt – a course which corresponds not only to the interests of the Greek people but to the interests of rational economic policy across Europe, and therefore to the interests of the people of Europe.

Whether or not these negotiations succeed, however, the new Greek government is faced with key choices in economic policy. This is even more the case as, if the economic policies of the new government do not succeed, sinister forces that failed to win this election will seek to turn Greece backwards.

The first and immediate priority, of course, is to reduce and eliminate the appalling humanitarian suffering imposed on the Greek people by the austerity policies. Creating jobs, raising wages, restoring pensions, recreating the best possible social security are the top priorities. As always politics must take precedence over economics.

But to sustain the improvement in the living standards of the Greek people it is necessary to relaunch economic growth. And the key to economic growth is necessarily investment. Without rising investment an economy cannot grow.

Under the conditions of Greece it is even more unrealistic than normal to rely on the private sector for investment. It is the collapse in private investment which has driven economic collapse in Greece and economic recession across Europe. Since 2007 Greece’s GDP has fallen by €57bn of which the bulk is the fall in investment at €36bn. The only way to secure economic growth is therefore to embark on a programme of state investment. Those countries which have used state investment as their key instrument to promote growth have enjoyed outstanding success – for example Ecuador, Bolivia and China.

In a country such as Ecuador, which has enjoyed 5% GDP annual average growth over 10 years, real incomes per capita have risen by over 2% a year, and 10% of the population has been lifted out of poverty. This has been driven by state investment which has now reached 15% of GDP.
Economic growth, led by state investment, will in turn create the conditions under which the private sector will begin to invest again.

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The Changing Pattern of Foreign Investment in China

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This article was originally posted on John’s blog Key Trends in Globalisation on the 21st of October. 

Inbound investment into China continues to be the highest for any developing economy – US$101 billion in 2013 on UN data. But the pattern of investment in China is changing significantly as the country develops, and this trend will inevitably become more pronounced. China refusing to acknowledge and internalise that only 30% of the world’s population now lives in countries with a higher per capita GDP than China leads to confusion on the key issues in foreign investment.

In the first decades after the start of China’s economic reforms in 1978, inward foreign direct investment (FDI) was primarily undertaken by overseas companies to create a base for exports. Although this was helpful in China’s early stage of “reform and opening up,” the investment was frequently very low value added. For example, a 2009 study found China received only 2 percent of worldwide wages paid for iPod production despite the fact that every iPod, at that time the world’s most successful consumer product, was manufactured in China.

As recently as 2010, the majority of China’s exports came from foreign-owned companies. Among large exporters, the role of foreign investment was even greater – of the top 200 exporting companies in 2009, 153 were foreign-funded. Only among small and medium size exporters were Chinese companies dominant and Alibaba’s original success was creating the Internet systems that connect these Chinese companies to their foreign markets.

But as China’s economy has developed, the reason for its attractiveness to foreign companies has radically changed. In comparative international terms, China is no longer a low-wage economy. On World Bank data, only 30 percent of the world’s population now lives in countries with a higher per capita GDP than China, and wages will be approximately proportional to this. In Southeast Asia and South Asia, every developing country except Malaysia now has a lower per capita GDP than China.

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China’s is the world’s greatest contribution to the real development of human rights

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The following article was originally published on 2 June 2014 and dealt with a resolution passed by the US House of Representatives. However its arguments clearly deal with the issue of human rights in general. For the reason’s given in it, China’s is easily the greatest contribution made to human rights by any country in the world.

This version is taken from John’s post on Key Trends in Globalisation which was published today.

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On May 28, the U.S. House of Representatives chose to debate a resolution expressing its concern over the issue of “human rights” in China. This makes it appropriate to make a comparison of the real records of the U.S. and China on human rights.

This is a vital issue as human well-being is certainly the sole goal of any correct policy — including in that the right of each nation to pursue its national sovereignty and national culture, which is why China’s “national revival” and overall human progress are inseparably linked.

Real human beings have an immense number of needs and desires ranging from basic ones, to have good health and enough to eat, through to the most complex — the most advanced fields of human culture or science. Objectively only extremely developed societies, with enormous economic and social resources, can approximately meet all these needs.

Consequently the attempt to reduce “human rights” to a Western style political structure, as though having a “parliamentary” system were the most important question facing human beings, is ridiculous. The real issue was very well put by the BBC’s correspondent in China, Humphrey Hawksley:

“I hear from an Iraqi wedding photographer who had lost so many friends and family members that he would gladly have exchanged his right to vote for running water, electricity and safety; from an Argentine shoe maker who bartered trainers for food because his economy had collapsed; and from the African cocoa farmer whose belief in the Western free market left him three times poorer now than he was thirty years ago.”

The example of women in China and India can readily be taken to illustrate the real issues involved in human rights. A Chinese woman’s life expectancy is 77 years and literacy among Chinese women over the age of 15 is 93 percent, an Indian woman has a life expectancy of 68 and literacy rate over the age of 15 is 66 percent. India may be a “parliamentary republic” but the human rights of a Chinese woman are (unfortunately)far superior to the human rights of a woman in India. Anyone who does not understand or admit that there are better human rights if a person lives nine years less or more and whether they are literate or illiterate is either out of touch with reality or a liar.

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China’s Economic Growth in the Light of the Findings of Modern Western Economic Research

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This article was originally posted on John’s blog Key Trends in Globalisation on the 2nd of September. 

Since 1978 China has seen the most rapid economic growth of any major country in world history, and the most rapid increase of living standards of any major economy. Furthermore, following the beginning of the international financial crisis, China far outperformed any other major economy – in the seven years from 2ndquarter 2007 to 2nd quarter 2014 China’s economy grew by 78% and the US by 8%. In a single generation China has gone from a ‘low income’ economy to the verge of achieving ‘high income’ status by World Bank criteria.

This unprecedented economic development is sometimes explained in terms of unique ‘Chinese characteristics’, but Western economic research over the last 30 years confirms that the reasons for China’s economic growth are rooted in universal economic processes. To be more precise, while the combination of global forces producing economic growth is unique in China, and produces unique ‘Chinese characteristics’, the forces propelling China’s growth operate throughout the world economy.

These modern advances in Western measurement and analysis of the causes of economic growth have major implications for China. Some economists in China have claimed that its very rapid growth is ‘aberrant’ and not in conformity with economic theory. Instead, supposedly China must switch from a growth pattern based on high investment and exports to one based on productivity, more precisely Total Factor Productivity (TFP), growth. Unfortunately such arguments are based on economic methods and concepts that are 30 years out of date and which have been formally replaced by the UN, US and OECD.

Modern economic methods show that growth in the world economy, therefore including China, is fundamentally driven by high levels of investment and by globalisation, which is division of labour on an international scale. The aim of this article, therefore, is to outline the results of the most advanced Western economic methods and their implications for China. First a brief characterisation of the scale of China’s economic achievement will be given, as this establishes the fundamental implications of this for economic theory, and then the implications of modern Western economic research for understanding China’s growth will be analysed. In particular, attention will be given to the formally registered advances of measurement and understanding of economic growth in general, by international economic agencies, and to the most comprehensive application of these to the study of China and Asia’s economic growth – Vu Minh Khuong’s masterpiece The Dynamics of Economic Growth: Policy Insights from Comparative Analyses in Asia.

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Deng Xiaoping – The World’s Greatest Economist

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This article was originally posted on John’s blog, Key Trends in Globalisation on the 23rd of August.
August 22, 2014 is the 110th anniversary of the birth of Deng Xiaoping. Numerous achievements would ensure Deng Xiaoping a major position in China’s history – his role in shaping the People’s Republic of China, his steadfastness during persecution in the Cultural Revolution, his extraordinarily balanced attitude even after return to power towards the development and recent history of China, his all-round role after 1978 in leading the country. But one ensures him a position among a tiny handful of people at the peak not only of Chinese but of world history. This was China’s extraordinary economic achievement after reforms began in 1978, and the decisive role this played not only in the improvement of the living standards of Chinese people but the country’s national rejuvenation. So great was the impact of this that it may objectively be said to have altered the situation not only of China but of the world.

China’s economic performance after the beginning of its 1978 reforms simply exceeded the experience of any other country in human history. To give only a partial list:

  • China achieved the most rapid growth in a major economy in world history.
  • China experienced the fastest growth of living standards of any major economy.
  • China lifted 620 million people out of internationally defined poverty.
  • Measured in internationally comparable prices, adjusted for inflation, the greatest increase in economic output in a single year in any country outside China was the U.S. in 1999, when it added US$567 billion, whereas in 2010 China added US$1,126 billion – twice as much.
  • During the beginning of China’s rapid growth, 22 percent of the world’s population was within its borders – seven times that of United States at the beginning of its own fast economic development.

Wholly implausibly, it is sometimes argued that this success was merely due to “pragmatism” and achieved without overall economic theories, concepts, or a leadership really understanding the subject (particularly with no knowledge of U.S. academic economics!). If true, then the study of economics should immediately be abandoned – if the greatest economic success in world history can be achieved without any understanding of the subject, then it is evidently of no practical value whatever.

In reality this argument is entirely specious. Deng Xiaoping’s approach to economic policy was certainly highly practical regarding application – the famous “it doesn’t matter if a cat is black or white provided it catches mice.” But it was extremely theoretical regarding foundations – as shown clearly in such works as In Everything We Do We Must Proceed from the Realities of the Primary Stage of Socialism, We Are Undertaking An Entirely New Endeavour, and Adhere to the Principle to Each According to his Work. Deng Xiaoping’s outstanding practical success was guided by a clearly defined theoretical underpinning, which can be understood particularly clearly in its historical context and in comparison with Western and other economists.

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The most important book on economic growth to have appeared for many years

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This article was originally posted on John’s blog Key Trends in Globalisation on the 28th of July.

Vu Minh Khuong’s The Dynamics of Economic Growth is the most importantbook on world economic growth to have appeared for many years. It is for that reason (full disclosure) that I did a small amount of work assisting on editing it.

The crucial importance of the book is rightly summed up by Professor Dale Jorgenson, of Harvard University, in his forward: “The emergence of Asia… is the great economic achievement of our time. This has created a new model for economic growth built on globalization and the patient accumulation of human and non-human capital.’ However the book’s economic importance goes far beyond Asia – although it is by far the most important comparative study published anywhere of how East Asian countries became prosperous. The aim of this review is therefore to explain why the book is so important from the point of view both of general economic theory and policy making.

There are two different strategies for economic growth, related to two different theoretical analyses of its causes, which have been pursued in the world in the last six decades.

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Why China Won’t Suffer a Western Type Financial Crisis

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This article originally appeared on John’s blog Key Trends in Globalisation on the 22nd of July.

Inaccurate articles sometimes appear claiming China faces a “severe debt crisis.” Factually these are easily refuted. Changyong Rhee, the IMF’s Asia and Pacific Department director, pointed out that China’s national and local government debt is only 53% of its GDP, compared to U.S. government debt which is roughly as big as GDP, or in Japan where government debt is 240% GDP. Foreign debt is 9% of China’s GDP – insignificant set against the world’s largest foreign exchange reserves.

Factually, it is therefore unsurprising that China’s predicted “Lehman” or “Minsky” moment, a financial collapse, invariably fails to occur. But there is another, even more fundamental, reason why China’s economy does not suffer severe financial crises of the type that struck the Western economies in 2008 or wracked the Eurozone. As this illustrates a way that China’s economic structure is superior to the West’s, it is worth analyzing.

Starting with fundamentals, the way the argument is constructed that China faces a “serious debt crisis” violates the most elementary accounting rule – more precisely that of double entry book keeping, which was invented in Italy “merely” eight centuries ago! This is that for every debit entry there has to be a credit one, and vice versa. Discussion of only of one side of a balance sheet without the other is financial nonsense. Claims, such as in the Financial Times, that the big story of 2014 is “the black cloud of debt hanging over China” are financially meaningless given they do not discuss assets to be set against debt.

To illustrate this elementary accounting principle, take a simple example. A company borrows $100 million at 5% interest, uses it to build houses, and sells them at 15% profit. To declare “there is a crisis – the company has a $100 million debt” is evidently nonsense. The company has debts of $100 million but assets of $115 million. It can repay $105 million and make $10 million profit – there is no “debt crisis” whatever. That its assets are greater than its debt illustrates why it is financially illiterate to discuss only debt without assets. A “balance sheet” is called that because it has two sides, not one.

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The Dangers of Exaggerating RMB Internationalisation

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RMB ‘internationalization’ is one of the most discussed issues in China’s economic policy. But many claims regarding the extent of RMB internationalization are greatly exaggerated and the practical proposal to attempt to achieve it, capital account convertibility of the RMB, is extremely dangerous for China’s economic and social stability. To eliminate false estimates and policies, it is, therefore, necessary first to accurately establish the facts regarding the real international role of the RMB and then analyze what consequences flow from these.

Those wishing to present a highly exaggerated picture of the degree of RMB internationalization frequently do this by presenting percentage growth figures. This gives a misleading impression because it fails to mention that such growth rates look impressive merely because they are calculated starting from extraordinarily low levels. To take a typical example, the proportion of RMB payments carried out in the US in April 2014 had risen by 100% compared to a year earlier. This sounds spectacular – until it is noted that the rise was only to 0.04% of all worldwide currency transactions!

A sense of reality is immediately injected if its noted that in April 2014 the RMB accounted for only 1.4% of international payments – globally, RMB payments are entirely marginal. Furthermore even this very low figure exaggerates the RMB’s internationalization because a large percentage of the payments are merely between mainland China and Hong Kong.

To illustrate the real situation, start with China’s strongest area internationally – trade. By the end of 2013, 8.7% of world trade was denominated in RMB – but the dollar’s share was almost 10 times as high at 81%. Furthermore, the RMB figure was artificially flattering as around 80% of RMB payments were for Hong Kong. Excluding Hong Kong RMB payments were marginal. For example, by April 2014 only 2.4% of China and Hong Kong’s trade with the US, China’s largest single country export market, was in RMB.

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The Long Term Deceleration of the US Economy

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This chart shows the dominant long term trend in the US economy – gradual deceleration. A 20 year moving average is used to eliminate all cyclical or short term trends. The deceleration from 4.4% in 1969, to 4.1% in 1978, to 3.5% in 2002, to 2.5% in the first quarter of 2014 is clear. The temporary recovery in the late 1990s and beginning of the 21st century proved unsustainable and was followed by a sharper fall.

This trend shows that the most enduring feature of the US economy, which must be explained by any analysis, is not any analyses of business cycles, particularly those of a ‘manic-depressive’ type, but this very long term slowdown of the US economy.

Furthermore, as this deceleration has been going on for 40 years, it clearly has extremely deep roots which are very difficult to reverse. Unless dramatic changes in US economic policy take place, therefore slow deceleration should be built into projections for the US economy.

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