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01/20/2014

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jim kirby

Once quality improvements, like healthy longevity, are monetized, the measure of economic success is not GDP, but GDP per capita.

I don't get it, but economists like these two continue to talk about how to raise the GDP, ignoring entirely the denominator of the equation. In other words, economic success could be achieved at low cost by putting a stop to all the breeding.

If I'm trying to make it though the winter in a snowbound sailing ship together with 10 dogs and 10 cats, all breeding away, it should soon occur to me to: first, stop their breeding; second, start killing them off to lower the competition for food; third, start eating them. Folks like Shackleton have actually done this.

Now I don't (yet) recommend killing or eating Amerikan kids, but we sure as hell could put a stop to all the gummint policies that encourage breeding. If we needed workers (sometime in the distant future), we could turn to importing potty-trained workers from nearby countries who are ready and willing to contribute to the GNP without our having had to spend over $10,000 each over 13 years to give them a public mis-education.

A sure road to economic disaster is to continue to overtax the producers among us in order to support the indigent unemployed that go on breeding away.

B Wilds

Japan is the poster child and living proof that low interest rates do not guarantee economic growth and prosperity. Years ago before the "Bernanke has all the answers" era, many of us criticized Japan for failing to own its problems. Many people thought Japan should face up to the mess it had created and do the right thing. Broadly accepted was the concept that only by letting its zombie banks and industries fail could Japan clean out the system and move forward.

While they claim otherwise, in many ways Bernanke and the Fed have put America on a path that mirrors the same unsuccessful path taken by Japan. A path that avoids real reform and bails out the very people that caused many of our problems. More on this subject in the post below,

http://brucewilds.blogspot.com/2013/11/we-are-on-path-to-lost-decades.html

Bill Goode

Tax policy and government regulation do impact domestic growth, but the fear of the same also has a beneficial or detrimental effect, as well. The fiscal multiplier produced by government stimulus will change depending on what the stimulus is spent on (maintaining high employment in the public sector vs. improving unemployment in the private sector) as well as, what other uncertainties exist in the minds of the consumer (increasing savings vs. consumption).

Monitary policy at this zero lower bound level has obvious limitations. Fiscal Policy probably would have a greater impact; however, the type of legislation that private industry infers or fears from the political party in power and how the government spends any stimulus (private or public)is very difficult to put into a mathematical model; thus making the prediction of the benefit of such a fiscal policy less reliable.

Gertrud Fremling

I disagree with your statement:"It is difficult to imagine productive activities that cannot be automated—mining, construction, many medical services, house cleaning: the list goes on and on." Indeed it is easy to imagine many types of (now) luxury type services where demand would continue to increase. For instance the whole category of educational/athletic services, such as personal trainer, dance instructor, ski instructor. Similarly, people like to learn to improve many fun skills, such as getting group lessons in cooking, painting, ceramics, wood working, playing a musical instrument. Pets will be pampered more, increasing demand for veterinarians, dog walkers, pet psychologist. And if the cost of travel comes down due to automation, demand for air craft, tour guides et.c. would go up. Protective services, such as security guards and police would increase, too as people spend less on other areas. Just look at what the currently wealthy consume: they do not prefer robots but actual personal service.

Gertrud Fremling

Ooops! My comment was meant to be posted for Posner.

Neilehat

Simply because we can do something, doesn't necessarily mean we should do it. Socio-economic benefits many times outways our ability to do things. QEI was once advised by her Counsel to throw open the Nation to vast imports. Her response, "But then what will our Craftsman and Artisans do"? And so, a Golden age was born. Or, when the Emperor Augustus and cohort Agrippa was approached by their construction Engineers who told him that they had machines that could drastically reduce the amount of Labor and time required to rebuild Rome. Augustus's response, "That's not the point" and so another Golden age was born. Talk about "Deja Vu"...

Terry Bennett

I remember standing on the shore at Messina in 1981 and looking over to mainland Italy, and asking my local contact why there was no bridge. He said the mafia ran the ferry. A few connected ferry operators benefited, and tens of thousands of residents on both sides were burdened, many to the point that they'd avoid the trip whenever possible.

If the government wants to step in and regulate product quality or features, as they have now done with health insurance, maybe they can beat back the Chinese import machine. Meanwhile, millions of Wal-Mart customers vote every day that Its products are good enough to get the job done. Should 300 million people pay higher prices for clothes so a few thousand textile workers can luxuriate in their less than competitive production level? I'm suspicious.

Neilehat

Terry, Having lived in Sicily, Ragusa/Siracusa as a matter of fact, I can tell you that you don't want a bridge between Sicily and the Mainland (if the bridge had been needed, they'd have put one in thousands of years ago). As for the "Mafia" response from a "local contact", that's a common Sicilian response to most Tourists. Especially "Ugly Americans" and other "invaders" throughout the Centuries... ;)

Jack

I'd agree with Prof Becker on there being many more technical breakthroughs in computers (and robotics) in the coming decade. But even were the pace of development to slow the more widespread adoption of what we have should produce substantial productivity increases.

Most of us likely remember almost spending more time and energy than we saved with under-powered computers running the clumsy DOS. Today, ha! despite frustration with "Obamacare" we're seeing not only a roll out of a system empowering both buyer and seller to "meet" at a competitive market place, but IT systems moving ahead, finally! that should greatly improve productivity of docs, nurses and all, but with more "big data" available and searchable, we should be able to find and adopt the procedures offering the best outcomes or same at less cost.

Haha! "Trouble is....." the productivity gains seem to be getting wasted with, from a recent report, employees spending two hours a day at "work" on social media.

Well! after the positive outlook on increasing productivity in about every endeavor that comes to mind but teaching? and lawyering? what about Neil's question as to "What will our craftsmen do?"

One answer and Becker has it right, is to be honest with ourselves and no longer ignore over $2 trillion on LONG delayed maintenance and upgrades of our infrastructure. A simple equation really, pay the hard hit construction sector extended unemployment and eventually welfare and "disability" or put them to productive work fixing our nation up so that when this mess is over well have the playing field for a brighter future.

Much of the rest of the answer ------ lacking an especially insightful queen, is that of resorting to democratic processes that might guide the "invisible hand" to more favorably "develop our nation's resources for the benefit of THE people" ie NOT one in a hundred.

"Two hours of social media" ie the new version of squandering the day yakking at the water cooler, gives us one big clue. "Send 'em home early!" Yes! even as our "40 hour week" seems to have all too often become more hours and the expectation of text messages being answered during all waking hours, what we need is a shorter work week and say the number of holidays as France. Spread more of what work there is over more employees.

Next, is to quit caterwauling about "productive and "jobless leeches"" and pull out ALL the stops to begin the long awaited "trickle down". Start at the bottom where the costs are very small by SUBSTANTIALLY increasing the min wage. Instead of glorying in the demise of the collective bargaining that built the middle class from THEIR share of the mfg era and instead work to further empower unions like SEIU that are seeking to represent the lowest paid and least powerful working folks.

As Gertrud hopes there will be Demand for new products and services, but ONLY IF far more of us have the time and discretionary income to take Bush's advice to "go shopping". If not we continue to ha! take advantage of IT to buy stuff on Ebay to fix our aging gas hogs and eat our discounted food purchased in bulk at Costco at home, while, one more chuckle, even McD's tries to figure out how to improve its numbers.

Stagnant wages ---------------- stagnant economy.

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