Over at The Guardian, the actual newspaper of record, economics editor Larry Elliott doesn’t think things are looking good. I mean, when your opening sentence is "And so it begins", you’re establishing a certain mood, and he ends the next paragraph with "This could get ugly". So you get that he’s not optimistic about the near future, economically speaking at least.
Generally, he reports, there’s a trigger event such as a huge spike in oil prices or a well-known bank having to admit it was in difficulties that indicates systemic weakness widely recognized but never voiced; and in this case the Chinese economy and the government’s somewhat inept handling of it are the elephant in the room. A year (and $300 billion USD) spent propping up the yuan/renminbi has ended with implicit admission of failure, resulting in speculators finding their accounts lighter and governments and corporations having to adjust trade and foreign exchange policies and rates to the ripple effects of the world’s second largest economy suffering such a huge turnaround.
In the past the US could often be counted on to take up the slack in consumption, but our consumption is increasingly concentrated in the hands of a miniscule portion of our population.
The economic story of the US since the Great Recession ended has been of QE [quantitative easing] fuelling a six-year bull market in shares at a time when economic growth has been weak and productivity growth even weaker. There has been no trickle-down effect, and no attempt to redress the main structural problem of the past three decades: the severing of the link between productivity and wages. The top 10% of US households took 116% of the income gains when the US economy was recovering between 2009 and 2012. The other 90% of US citizens saw their living standards fall. Inequality has widened.
Around the world, power is becoming more and more concentrated. And not even in some manner at least intended for the public welfare, but rather in the hands of the most opportunistic and ruthless, the greediest and most power-hungry, among us. In the past this was a recipe for localized conflict, but that no longer exists. Since nearly anyone seriously bent on terrorism can find some sort of hugely destructive weapon, local conflict quickly spreads.
All power corrupts, Acton wrote to his friend. Concentrated power, I assert, produces concentrated corruption, and the combination is a toxic brew. We don’t need more Presidents indebted from the moment they’re elected to these private and thus unaccountable seats of concentrated, corrupt power. I see only one Presidential candidate who avoids that mold from which both parties’ candidates and elected officials have long been cut.