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Discussion: (4 comments)

  1. The problem is all of this productivity can REDUCE the need for labor, and create even more wage disparity. It won’t help. And we’re not here just to put up better numbers. it’s going to be about the kind of lives people will have.

  2. Jim
    I can understand even the President being pessimistic in the middle of a Great Recession. What is fantastic is seeing Paul Krugman in the July/August 1997 issue of the Harvard Business Review, being pessimistic smack in the middle of the Great Moderation!
    “Most economists believe that the US economy is currently very close to, if not actually above, its maximum sustainable level of employment and capacity utilization. If they are right, from this point onwards growth will have to come from increases either in productivity (that is, in the volume of output per worker) or in the size of the potential work force; and official statistics show both productivity and the workforce growing sluggishly. So standard economic analysis suggests that we cannot look forward to growth at a rate of much more than 2 percent over the next few years. And if we – or more precisely the Federal Reserve – try to force faster growth by keeping interest rates low, the main result will merely be a return to the bad old days of serious inflation.”

  3. Benjamin Cole

    I have to say, Pethokoukis is perhaps the best economics blogger going today.

    Bring on boom times again, and you will see the news articles about the bright future ahead. Productivity will rise as overhead costs per unit shrink, and businesses have the money and incentive to buy better equipment etc.

    The weak link today is the Fed. It is too timid in monetary expansionism. Obama’s anti-business stances are not helpful either.

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