The Essex Exchange – Second Quarter 2016: How Do We Fix The Employment Conundrum

Even before the surprising vote on the Brexit at the end of June, the Federal Reserve was pulling back from their intentions to raise rates more than once this year as growth once again showed signs of bouncing around 2%. The inability of the US economy to accelerate past 2-2.5% growth continues to frustrate policy makers and citizens alike as this recovery continues to be one of the least heralded and least believed in our collective memory.  In particular, the continued sense of malaise caused by stagnant wages and frustration over job growth has been one of the major factors leading to the rise of populism around the world.  We are seeing calls from our presidential candidates in the US as well as political candidates in Europe for policies that they believe will lead to a return to manufacturing ranging from tax treatment, to tariffs, to a repudiation of globalization.  The question, of course, is will any of these prescriptions cure the disease?