Re: [OPE] real wages and productivity growth

GERALD LEVY wrote:
> > > Key to Rick Wolff's explanation of the economic crisis
> > > was the claim that there is a long-term gap between real wages
> > > and productivity in the US (see, especially, his video lecture).
> > There is a problem with this in general as a thesis as the US as a
> > whole is massively overconsuming and under saving.
>
The argument he puts forward would be credible if it were the case
that the working class households were offsetting a rise in domestic
exploitation by borrowing from the US bourgeoisie.
They are not.
What is happening is that the chinese bourgeoisie and chinese
state is lending the money that had been extracted as SV from
chinese workers whose level of consumption has been very
much lower than that of the US worker. The lending of course
is not just to the US consumer, but more importantly to the US
state.
>
>
> Hi Paul C:
>
> I think that fits rather well with his thesis: in the presence of
> long-term relatively stagnant real wages, working-class households
> have been able to increase consumption only by increased
> borrowing from financial institutions. In addition to stagnant real
> wages, credit card debt is a major reason for the decreasing rate
> of savings by these households. That's a HUGE bubble that hasn't
> burst yet - and, at present, legally can't since Congress passed
> legislation years ago which prevented consumers from declaring
> bankruptcy as a way of nullifying credit card debt. How this will
> be resolved is anybody's guess: if working-class families lose
> their homes, other forms of tangible property, no longer have savings
> or jobs, how will they possibly be able to pay back credit card debt?
>
>
> In solidarity, Jerry
> ------------------------------------------------------------------------
>
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Received on Mon Nov 17 09:21:53 2008