I enjoyed your piece in Sunday’s Times — but I don’t think the underlying problem is so much that American consumers have for years spent beyond their means as it is the means of typical consumers haven’t kept up with what the growing economy could have (and should have) been able to provide them.
The great divergence between productivity and median wages started in the late 1970s, as you know, and has become far more dramatic in recent years. If we move toward a more investment and production economy without enlarging the portion of national income going to the vast middle class, we’ll be left with an even greater imbalance –- and there’s no way net exports will correct it.