How much growth is enough? It’s a pretty simple question that upon close examination leaves no easy answers. This is a problem that has plagued economists since there were economists. Recognizing very real dangers on both sides, there is as much trouble about “too much” as “too little.”
The purpose of the modern central bank, then, is to moderate and chart a course between them. Whether it was ever wise to put that task upon them is another matter; this is where we are.
In 2018, most of them now believe for the first time in a decade they’ve achieved that balance (and they are the only ones allowed to make the determination). After spending all of that time closer to “too little”, mainstream commentary at the very least has been looking desperately toward “too much.” Not that we are there, but that the economic tumblers have finally all clicked together and a plausible path toward it might now be unlocked.
Even during the worst of economic depressions, the vast majority of people do just fine during it. What is at issue with regard to proper balance is the proportion of the population on the outside. During the thirties, at the worst of the Great Depression, three-quarters of the labor force was still employed – and that was catastrophic. Far worse was the fact that by the end of the decade, that proportion only improved to 83%.
The issue is always bifurcation, which is a more simplistic view of stratification. The flipside of the Great Depression is that even during the best of economic booms there are still those who don’t experience it. The real economic balance we all seek to achieve is to minimize this bifurcation as much as possible, for it can never be eliminated. To leave too many in it is to invite disaster no matter the recovery statistics (the real legacy of the Great Depression).
But it isn’t strictly a matter for employment, or where bifurcation becomes more stratification. By that I mean people who are employed may also be struggling; the unemployment rate is not comprehensive on the matter. They may be underemployed or may just perceive a general lack of opportunity that causes a very real change in expectations and therefore economic behavior. You may have a job that is minimal in nature but stay at it because you are more concerned about cutting loose to find a better proposition.