dagblog - Comments for "Book Review: The Great Stagnation"

Thanks Obey. I missed this

Michael Wolraich — Thu, 24 Feb 2011 15:26:28 +0000

In reply to An objection regarding this

Thanks Obey. I missed this comment earlier.

Had I just read further down the article, I could have displayed the US diagram--which is a less dramatic curve. Interesting that Cowen didn't display this graph, since his thesis focuses only on the U.S.

For the record, I think Cowen did address the issue of ordinary Americans to an extent. He talked about how the GDP misrepresents real economic growth, and he also addressed the growing income disparities. But he placed the blame for the latter somewhere else than I think you would--on economic conditions rather than government policy.

it's like the whole economic

David Seaton — Wed, 23 Feb 2011 15:56:22 +0000

In reply to An objection regarding this

it's like the whole economic profession doesn't want to deal seriously with this issue

Trying to rationalize America's conversion into a frozen third-worldish oligarchy is a major growth industry with a high rate of "innovation". Well paid too.

An objection regarding this

Obey — Wed, 23 Feb 2011 10:39:35 +0000

In reply to Book Review: The Great Stagnation

An objection regarding this point of yours:

I don't have the data to redraw Huebner's chart in terms of American-specific innovation and population, but you would certainly see a far less dramatic curve.

Huebner explicitly addresses this point in the article you and Cowen cite:

Fig. 3 plots the rate of invention in the United States since the Patent Office opened in 1790. The rate of invention is defined as the number of patents issued each year to US residents by the US Patent Office [6] divided by the US population [7].This measure of the rate of technology growth avoids one of the potential problems with using the world population for the rate of innovation in Fig. 1, in that a large portion of the world’s population live in poor countries with rapidly expanding populations but contribute little to technology advancement. The peak in the rate of invention occurred in 1916, 43 years later than the peak in the rate of innovation in Fig. 1.
- from p. 6 of the article

It's a less dramatic falloff, but not inexistent.

Not that I disagree with your overall point, but I don't think your formal quantitative critique is valid.

What I find strange about the book is how Cowen seems to be desperately avoiding the real problem. He identifies the phenomenon of stagnation by noting the flattening median household income trend over the last 40 years, while ignoring the fact that economic growth - i.e. gdp - has continued pretty much unabated over that period. So, in short, there is no economic stagnation, there is only an upward distribution of the gains from economic growth such that ordinary families have faced income stagnation. And THAT phenomenon is something that a conservative like Cowen really does not want to face, because of the uncomfortable conclusions about regulatory and tax reform it might involve.

And it isn't just Cowen, it's like the whole economic profession doesn't want to deal seriously with this issue, as I've argued at length before.

"I fear all we have done is

Beetlejuice — Wed, 23 Feb 2011 03:00:38 +0000

In reply to “So as long there is someone

"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

Japanese Admiral Yamamoto

Found the flaw in your

acanuck — Tue, 22 Feb 2011 20:43:04 +0000

In reply to How about this. We have at

Found the flaw in your argument, quinn. Happy Winnipeggers? I don't think so.

Trenchant.

quinn esq — Tue, 22 Feb 2011 20:20:33 +0000

In reply to I think that is where things

Trenchant.

David, why so intellectually

quinn esq — Tue, 22 Feb 2011 20:19:54 +0000

In reply to Genghis,Your criticisms are

David, why so intellectually lazy? A book selling well in the US BECAUSE it's intellectually valid? Right after noting, "to be gloomy is the fashion now?" Gee, looks like you had to give up one hobbyhorse (Americans all about buying trendy stuff) to hang onto an old fave (David taking the gloomy view of the US.)

Sounds to me like you can't be bothered to read any explanations deeper than "Urrrrrm, we runded outta the low-hangin' fruit, Ma. Looks like wer doomed. Best we go crawl inta tha root celler."

How about I explain things on your end, a la Seaton: "The Spanish have always been lazy. They're bred for laziness, ever since they colonized the Americas. Recently, they managed to make a nice living off money coming in from rich (harder-working) Northern Europeans who came to build houses in the sun. Naturally though, the lazy Spanish got carried away with their greed, everyone thought it would make their fortune, and now... they've lost it all. Oh well."

Thought, Seaton-style.

I think that is where things

David Seaton — Tue, 22 Feb 2011 19:10:02 +0000

In reply to We'll have to lower the costs

I think that is where things are going. Something like a third world country, Brazil if we are lucky, Nigeria if we aren't.

We'll have to lower the costs

Resistance — Tue, 22 Feb 2011 18:42:19 +0000

In reply to How about this. We have at

We'll have to lower the costs of cars and electricity, because who'll be able to afford it otherwise.

The cars and the batteries will be produced, where labor is cheaper.

I guess home values have a ways to go before they hit bottom and can become affordable for the new slave class.

The States will have to lower expected tax revenues that are based upon lower property values.

All workers including Wisconsin State workers will need cheaper electricity and cars, I suspect with lower electricity costs and cheaper transportation, the Government can then cut the overhead costs of entitlements. Everything else will be cheaper, even labor costs.

Are you willing to compete against slave wages, if not, you won't need a $30,000.00 car or will you be able to afford one, to go to work, there won't be a job for you to go to?

Maybe the cheaper electricity will allow the customer to afford, to turn the furnace on, when the bitter cold winter comes?

I don't see Utopia on the horizon, I see American workers in despair, unable to compete in a slave driven labor pool.

A $30,000.00 dollar car driven by a chauffer works for the wealthy industrialist?

“So as long there is someone

Resistance — Tue, 22 Feb 2011 18:10:18 +0000

In reply to So america's spectacular

“So as long there is someone who has an idea, america can make it come true.

Ideas are not enough; the industrialists will take the produce from the idea and propagate the seeds of the idea onto foreign soil.

If you try to have a homegrown crop, a cheaper FOREIGN labor force will undermine it. Your idea will make others rich.

A foreign interest is not interested in Americas prosperty, GET IT

The new industrial concept; the same as the old industrial concept, Slavery makes the industrialist more profits...

The idea ....Labor is a commodity to be exploited.

The plan is in place to acommodate the "exploitation idea"

America doesn't need to accept being enslaved or made to compete against slave made products.

Why are we making trade agreements with dictators? Making trade agreements with partners who have no moral values as regards human rights or work conditions or work safety or environmental considerations.

Of course the industrialist propaganda machine convinces some Americans, to sell out their self-interest, some stupid Americans convinced that purchasing slave goods helps the slaves become middle class citizens.

Stupid Americans wondering where are the jobs, where is the safety net, where is the retirement, the healthcare financing, to come from to support AMERICANS?

This One World happy talk, is BS.

One world of slavery is the plan, resist it and your country will be brought to it's knees, the better days will never come, you will submit or be economically destroyed.

With no tax base, because the industrialists has relocated manufacturing overseas; whose supposed to pay the bill? The unemployed; the Wisconsin State worker, how about the homeowner upside down on his mortgage, you think they can pay more taxes?

The economic system of America destroyed, for the sole pupose of enslaving the American worker. CAN'T YOU SEE IT?

Who took your homes, your healthcare and retirement? Did you just give it away or was it a plan to take it away?

Americans will either become slaves or be beaten into submission in order to compete in a slave commodity world.

"Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains."Thomas Jefferson

Stop the export of jobs and the importation of goods, for the sole purpose of benefiting the merchants

How much longer must America suffer, because stupid Americans have rejected the instruments of defending against those who would take our freedom and enslave us?

Tariffs and duties as a revenue source, to be used in the protection and support of AMERICAN workers.