Monetary Sources of Real Wage Stagnation

 

The left-wing Economic Policy Institute posts the chart below, which shows that real wages and productivity began to diverge in 1973, two years after President Nixon's abolition of the secondary gold standard and in the midst of a 15-year period of massive regulatory expansion, including workplace regulation such as ERISA, OSHA, and Medicaid. Before 1971 the average real hourly wage increase was .5% to 2% per year, resulting in 65% real wage growth in 50 years. That relationship began with the Jacksonian (no central bank) era or even earlier, in the colonial era, and it ended in 1971. The pre-1971 path shown on the chart (1948-1971) was characteristic of the laissez faire, Progressive, and New Deal eras.Since 1971, a period of about 47 years, there has been zero real wage growth. Although unions have declined in proportion to the work force, there was a similar level of unionization during the laissez faire era, when inflation-adjusted wages grew at .5% to 2.0%. In addition, because there were no (zero) income taxes in the laissez faire period, workers kept their wages and saved, to the tune of 30% of income in the late 19th century. The interest on that savings was higher than during the Fed era. Stock and bond market returns were, however, lower.            https://www.epi.org/publication/charting-wage-stagnation/

2018 APEE Meeting a Success

I just attended the Association of Private Enterprise Education (APEE) meeting at Caesars Palace in Las Vegas. I presented a paper on the political affiliation of liberal arts faculty and had organized a separate session "Political Correctness and the Constitution of Higher Education." The keynote speaker, the famed Alan Kors, spoke on related topics. Overall, it was an enjoyable and beneficial experience.

My Interview on Raquel Okyay's Podcast March 30

Raquel Okyay had me on her podcast, Rocky and the Gonz, on March 30  . I enter about one-half hour in. It was fun. 

University Scientism and American Totalitarianism

Is there a difference between (a) the American pragmatic political approach, a cornerstone of the claim of American exceptionalism, and (b) mere political caprice in the management of the economy and society such as characterized the fascist and national socialist economic policies? Academic research, especially in the fields of economics, sociology, and psychology, supposedly contributes to the public policy making process, differentiating the American third way from the fascist third way by making it rational.

But what if American pragmatism is based on a sham? What if social science is but scientism? Then, American economic and social policy is guided and influenced by the moral whimsies of social scientists whose moral sense has been addled in part by scientistic training, in part by careerist opportunism, and in part by political pandering. In that case, social science higher education can be viewed as any other propaganda device.  Perhaps American pragmatism and American exceptionalism are equivalent to any other authoritarian or totalitarian form.