That’s the question that Paul Craig Roberts asks:
According to the official economic fairy tale, the US economy has been in recovery since June 2009.
This fairy tale supports America’s image as the safe haven, an image that keeps the dollar up, the stock market up, and interest rates down. It is an image that causes the massive numbers of unemployed Americans to blame themselves and not the mishandled economy.
This fairy tale survives despite the fact that there is no economic information whatsoever that supports it.
Real median household income has not grown for years and is below the levels of the early 1970s.
There has been no growth in real retail sales for six years.
How does an economy dependent on consumer demand grow when real consumer incomes and real retail sales do not grow?
It doesn’t. And real economists would be telling us that, except for the fact that you cannot be a real economists and get a PhD (or a job with the government or teaching at a university).
In an attempt to achieve the impossible, heavily indebted countries, such as Greece, have been forced to reduce old age pensions, fire government employees, reduce social services such as health care and education, reduce wages, and sell-off public property such as ports, municipal water companies, and the state lottery. These austerity packages deprive the government of revenues and the population of spending power. Consequently, consumption, investment, and government spending all fall, and the economy sinks lower. As the economy sinks, the existing debt becomes a larger percentage of the GDP and becomes even more unserviceable.
Economists have known this ever since John Maynard Keynes taught it to them in the 1930s. Yet there is no sign of this foundational economics in the policy approach to the sovereign debt crisis.
Economists it appears have simply vanished from the earth. Or, if some are still present, they have lost their voices and do not speak.
“Real economists” such as myself and Aaron Clarey have been drummed out of academia. Because we know the truth, and we aren’t afraid to let the modern economists know that they are full of shit. As a result of that, the only type of “economists” that are left are the failed mathematicians who don’t know economics:
…Keynes is the reason why we are having all of these problems in the economy today. Governments are following the economic policy prescriptions of a man who had only a rudimentary understanding of economics.