Why I don't believe this is the whole story:



With truly complex problem with multiple variables, like the slow growth problem (aka stagnation problem, or "Joe Median getting the shaft problem") we find the same old causes and solutions being proposed based upon economic theories of long dead economists. Experience has shown that Japan didn't solve the problem with massive infrastructure construction and debt. Europe didn't solve it with austerity approaches. The US didn't solve it with the stimulus spending and massive amounts of liquidity from the Feds, enriching wall street and blowing asset bubbles. Greece didn't solve it with riots and Russia hasn't solved it with diversionary wars (which didn't work in the US either).



When we see this type of situation, we need to ask what variable or parameter has changed somewhat uniformly in the developed world to cause this slow growth in all the advanced countries relative to emerging economies around the world with 5% to 10% growth rates. In these fast growing countries, the key step seems to be the freeing up the creativity of private sector. This was done in China by allowing farmers to decide what, when and how to grow, which decreased the power, authority, social status and income of the millions of agricultural "planners" who used to decide for the farmers. Even a "deal" with the farmers that made share cropping in the US look like a good deal for the farmer, was so much better at utilizing the knowledge and creativity of the massive number of farmers. It resulted in farmers going from starvation to eating pork/fish. We know what freeing up some of the industrial sector has done for better jobs for the hundreds of millions of rural poor.



In India, restricting the "License Raj" of bureaucratic delays, fees, bribes, etc. created an economic miracle, but the Raj is fighting back.



In the US we do have the "permissionless" sector of our society dealing with digital technology (apps, software, etc.). This sector of our economy is growing rapidly with few, if any, regulatory considerations. Hiring is focused on creative technical talent, not on legal/regulatory talent. Engineers can be hired with funds other sectors, hampered by regulations, must spend on lawyers.



However, whenever this permissionless sector touches the real world creating large numbers of "Joe Median" type jobs for non-programmers, like UBER, AirBandB or the emerging Drone industry, regulators crawl out of their holes, as their very livelihoods and pensions are threatened by innovation.



All the advanced countries have evolved into societies in which almost anything having to do with the real physical world has multiple layers of regulations, permissions, approvals, etc., essentially giving every existing interest a veto over any innovation that could harm them. The advanced countries have become "Vetocracies". Most of the "existing interests" are among the ruling and economic elite.

