- The global economy is suffering from a lack of aggregate demand. With insufficient demand, nations compete furiously for their share of the diminishing growth pie.
- In the U.S. and Euroland, many policies only temporarily bolster consumption while failing to address the fundamental problem of developed economies: Job growth is moving inexorably to developing economies because they are more competitive.
- Unless developed economies learn to compete the old-fashioned way – by making more goods and making them better – the smart money will continue to move offshore to Asia, Brazil and their developing economy counterparts, both in asset and in currency space.
A lack of demand for goods and services is THE most significant driver of unemployment/underemployment in the US. RadioMouths would tell you that it is fear of increased taxation. Not so much, really.
Having said that, Gross' third bullet's language: "...making more goods...smarter" has real implications about taxes and regulations. (At the margins, yes, there are additional considerations such as unionization, education, motivation, yadayada.)
However, the REAL burdens on US "more/smarter" are not limitations of intellectual firepower--we ARE The Innovator, after all--nor of willpower, nor capital.
The real burdens are taxes and regulations which are second only to those of Europe. The US and its several States regulate and tax damn near every action and transaction imaginable, and each of those regs and taxes adds cost to the product.
Moreover, those added costs require consumers with incrementally-increased incomes to COVER those costs.
In other words, to buy Widget A from a US manufacturer, you have to pay his cost of material, labor, overhead, taxes, regs, and shipping (among other things.) But beyond that, you have to pay your OWN cost of electricity and gasoline--which has been increased because of regulatory decisions.
Thus, you, as a worker, must increase your income--which increases the cost-of-labor to your employer. If you're buying a GE refrigerator and you work for GE, that becomes a problem, no?
The AOS blogger comes to roughly the same conclusion as I do--which differs in some ways from Gross' direction, and which also considers the 'meta-bubbles' of finance, which have had more than a little consequence.
Worth the read.