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Old 16-08-07, 06:33 PM   #13
multi
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Join Date: Jan 2002
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Roll eyes 2 One needs to understand the bigger picture of what happened back then

What was happening with the Western economies post WW2 was of course going to be fairly complex arrangement of conditions that would shape the flow of money in following decades...as far as I can make out it has always been that the affluent and their workers are a symbiotic relationship that need each other to survive...

What drove the post WW2 western economy did vary but basically:
Quote:
Trade expansion drove growth, growth drove expanded social insurance programs and real wage levels; expanded social insurance states and real wage levels social peace, social peace allowed inflation to stay low even as output expanded rapidly, rapidly expanding output led to high investment, which further increased growth and created the preconditions for further expansions of international trade.
Which only lasted one generation until the 70's

Quote:
It was assassinated by an odd combination of oil barons, union leaders, and monetarists. Without the tripling of world oil prices in 1973 and again in 1979, the pressure to do something to reduce inflation would have been much weaker. It was strong pressure to do something to reduce inflation that broke down the alliance between social democratic welfare-state politicians and union leaders. The first pressured the second to sacrifice the real wages of union members in support of the fight against inflation. The second refused. The consequence was, first, higher inflation and, second, a shift in political power to the right and the turnover of power to make monetary policy to central banks interested in halting inflation no matter what the cost.

Once it was plain that the old consensus politicians could not fight inflation through corporatist dialogue, the new non-consensus politicians won votes by promising that they would fight inflation through monetary restraint--and their monetarist economic advisors assured them that any excess unemployment created by fighting inflation would be transitory and temporary. In the U.S. the monetarists turned out to be right. In Europe the monetarists turned out to be wrong, leaving Europe with its current problems of structural unemployment.

they made lots of babies ,maybe one answer?
Quote:
1946 to 1964. In the United States alone, approximately 76 million babies were born
http://en.wikipedia.org/wiki/Post-Wo...r_II_baby_boom
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Last edited by multi : 16-08-07 at 06:45 PM.
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