I believe that something else is going on. I believe that we are in a transition phase going from one structural construction of the economy to the next structural construction. Whereas the former was based on heavy industry that included electrification and mass production, the foundation for the structure we are moving into is IT-based. How it will work out and look at this stage is anybody's guess.
The crucial thing is the transition is taking place and will take place whether people like it or not. My belief is the last major transition came somewhere around the 1930s. The movement then was from a more agricultural-based economy to a more industrial-based economy.
This is important and that is why I feel so good that someone like Stanley Fischer is discussing the possibility.
If we just consider our problems to be short-run, cyclical problems then economic policies are devised to put people back to work in the jobs from which they had been laid off, and investment is made in goods that are associated with the existing capital stock.
In a world going through a transition, economic policies have to be constructed considering the longer term, which means investment will need to go into the emerging technology and efforts must be made to develop human capital so it can be productive in using the next-generation technology.
But going through such a transition is not easy and it cannot be done overnight. Governmental policies cannot be aimed to please the existing political base or power structure. Progress cannot be achieved by denigrating the opposition party.
Fischer's speech raises this issue to a higher level. We need to talk about these things and not just focus on short-run solutions, which, if this analysis is true, are only going to extend the problems and not solve them.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.