The musical chairs economy

Ian Welsh:

Ok, for some time, folks have been after me for a formal economics post. What’s going to happen in the future in the US?

The answer, for around the next 5 to 6 years, maybe longer, is the musical chairs economy. Let’s lay out the basics.

Oil and Gasoline consumption in the US has been crashing for years and the trend shows no sign of stopping. The US is now a net exporter of oil.

The majority of people who lost their jobs in the aftermath of the financial crisis have not found new jobs. Nor are they going to. Those who did, have generally found jobs which pay a lot less than what they had before.

For those people who did manage to keep their jobs, things aren’t so bad, just as people who kept their jobs in Great Depression did ok.

What has happened is that the general circle of prosperity has been reduced. Less people now live in the “good” US economy. When they drop out of that economy they also use a lot less oil and gas, and even electricity.

Since the US can no longer sell nearly as much paper in exchange for real resources and goods, the US now has to sell something the rest of the world wants. One part of that is intellectual property, which is why you will continue to see stricter and stricter IP laws. The other part of that is hydrocarbons. The world is still hungry for oil. And if Americans use less of it, and if the US moves massively to fracking of unconventional oil (which it is) then the US can, again, become an oil exporter. (Remember, for most of the 20th century the US exported oil.)

This plan includes impoverishing large numbers of Americans, since the reduction in oil use is not being produced by providing the same services with less energy, but that is not an issue to those who run America’s industry or politics, since they do not, despite rhetoric, care about the welfare of ordinary Americans.

One thought on “The musical chairs economy

  1. Part of the solution to our dilemma is to distribute much of the 40% of our wealth that the 1% owns downward. That and change the psychology pushed by the Capitalists that you can never have enough stuff.

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