What level of economic growth is sustainable? In the current environment probably the anemic growth we are seeing, but capitalism has always been a boom and bust thing with a mentality that if you aren’t growing like crazy you are dying. The older I get the stupider this seems.
The latest Wells Fargo economic report said that the Federal Reserve and the Obama Administration had decided that there can be no dramatic increase in growth until housing construction recovers. Huh? What do we need more houses for? The emerging immigrant middle class perhaps, but besides the immigrants the demographics are all downhill. The postwar generation is senescent and will be vacating houses for the foreseeable future. The pathetic message here is that housing construction is the last bastion of Joe six-pack American manufacturing. Computer numerically controlled, CNC, machines will take over much of new housing just as they have taken over the rest of successful American manufacturing.
So what is sustainable? Not Joe six-pack. He will remain a ward of the state or his family. Not Keynesian stimulus programs that prime the pump when the pond is dry. First, we need to fill the pond.