Another entry in the Brad DeLong files:NYTimes
: (excerpts, emp add)
For Many, a Boom That Wasn’t
In 2000, at the end of the previous economic expansion, the median American family made about $61,000, according to the Census Bureau’s inflation-adjusted numbers. In 2007, in what looks to have been the final year of the most recent expansion, the median family, amazingly, seems to have made less — about $60,500.
This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew while the economy did. You can think of this as the most basic test of an economy’s health: does it produce ever-rising living standards for its citizens?
More than anything else — more than even the war in Iraq — the stagnation of the great American middle-class machine explains the glum national mood today.
The causes of the wage slowdown have been building for a long time. They have relatively little to do with President Bush or any other individual politician (though it is true that the Bush administration has shown scant interest in addressing the problem).
The slowdown began in the 1970s, with an oil shock that raised the cost of everyday living. The technological revolution and the rise of global trade followed, reducing the bargaining power of a large section of the work force.
Of course, if you are safely ensconced at Berkeley, why care about the bargaining power of labor? Free-trade gets you cheap television sets and inexpensive shoes, which is all that matters to some people.
In case you are wondering, this blog will continue to harp at "liberal" DeLong for his advocacy of free trade (with countries that pay workers considerably less) until he admits he is wrong.
Keep harping on it till Brad admits he, as with so many professional economists, admits to needing remedial sociology...and finally begin to understand the social cost of so-called "free" trade.
As I like to say, since there is no "free" lunch, since someone always pays the cost of lunch, there is likewise no "free" trade, since someone always pays the cost of that trade...