I know there are a lot of hard reasons for secular stagnation. The laser / integrated circuit GPT has now been fully exploited. (Rosenberg, if he had lived?) The IT revolution never mattered that much anyway because the low-hanging fruit was picked between 1870 and 1970, particularly the second half of that period (Gordon). Surplus savings from Asia have pinned us up against the zero bound on rates, which is leading to chronic deficient demand and an endogenous weakening of the supply side (Bernanke, roughly). The collapse of the housing and housing-related credit bubbles has taken a very long time to work through, although we will get there eventually (Rogoff). Many possible reasons, although the evidence that something durable is driving this is irrefutable (Summers).
I get all that. But nobody has ever been any good at actually predicting these things, so I feel perfectly free to speculate wildly without any real basis. My pet hypothesis, which appeals to me on aesthetic grounds, is that the culture ebbs and flows from practical and growth-oriented to sentimental and stagnationist. What leads to this is beyond me, but that does not mean it does not happen.
For example, today’s business culture is now polluted with total corporate bullshit. Consider this former McKinsey partner offering advice on how to respond when your colleague says something that is totally retarded. In a pro-growth culture, you would just point out that it is retarded, recognize that the person asserting that idea is not totally defined by having made a mistake, and expect that the person whom you corrected would be adult enough to accept it.
But in the secular-stagnation bullshit culture, you approach it differently.
- The thing I like about this is… … then boom.
- “Yes and” … … followed by why it can’t work.
- And best of all “What would have to be true for that to work?” Something other than what is.
I once had a boss who said famously, “if you ever propose something that stupid again then you are fired.” He ran a spectacularly successful company. If America were run that way, I bet the growth rate would be higher.
But the business culture evolves. The focus can shift from succeeding to being full of shit.
What are you gonna do? It is not necessarily clear that this is a legislative failure, although I imagine it is partly that. The culture is not under the control of the government, which is actually probably a good thing. If America, collectively, insists on being a bunch of quisling pansies, I am not sure DC can fix that for you.
Anyhow, you may not agree with me on this. But just read the linked article with these thoughts in mind. Fun stuff. Secular stagnation brought to you by a consultant.