The numbers today on job growth are said to be “disappointing.” Not surprising, however, since slow growth is the objective.
A weak recovery is to blame, but a more accurate description recognizes a persistent deflationary trend that dampens diversity.
Since we operate with a credit economy, if we don’t pay people enough to demand the supply, then there is an equivalent demand for credit. There is not enough diversification of borrowers, however, to accommodate job growth. Instead, funds are being borrowed form the Fed at near-zero rates to consolidate (merge and acquire) industry and markets, which reduces market diversity and job growth. Bankers refer to this as “concentration risk” but does not intend to be interpreted as derived from a macro-risk dimension. Instead, it is considered to derive from no incentive to lend to people who are a high credit risk, which naturally (by the numbers) limits the pool of borrowers and dampens job growth (diversity).
The high credit risk is attributed to lack of productivity but (by the numbers) workers have been working more for less for forty years.
Capitalists say that people are not working hard enough. The more a person works the higher the pay, the less demand for debt, and the lower the credit risk. This, of course, is not really the solution because what actually happens is people end up working more for less, demanding more debt with a declining capacity to pay it.
The real problem, here, is not a lack of productivity but a lack of diversity.
Real diversity (disambiguated to yield organic growth) is the real solution, but that is not what we’re doing. Instead, consolidation of industry and markets is allowed, encouraged, on a massive scale, considered to be a natural utility, fully funded to build-out the conglomerate (diversification that yields to inorganic growth and a negative rate of interest) in the name of improved efficiency.
Yes, diversification is only natural. So we should really do it, disambiguated by the numbers, supplying the demand (liquidating the debt), intending organic growth of industry and markets, supplying the goods and services that actually meets demand and intends improved economic efficiency at a positive (non-deflationary) rate of interest.
It is possible to have a positive rate hike that isn’t actually negative.