In yesterday’s post about chronically low levels of investment, I concluded that they’ve “given us stagnant productivity growth and a collapsing infrastructure.” This morning, the Bureau of Labor Statistics (BLS) confirmed the productivity part. For the year ending in the second quarter, it was down 2.5%, the worst in the series’ 75-year history. Productivity sounds like one of those things only the orthodox worry about, but it doesn’t have to be. Its most common form, labor productivity, is a measure of how much a worker can produce in an hour on the job. While… Read More
You can hardly look at Twitter without reading something about the impending AI revolution: robots are coming for your job. I’m a skeptic. By that I don’t mean to argue that IT and AI and all the other abbreviations and acronyms aren’t changing our world profoundly. They are. Tech affects everything—work, play, love, politics, art, all of it. But the maximalist version, where robots, equipped with artificial intelligence, are going to replace human workers, is way over done. No doubt they will replace some. But not all. Back in 1987, ancient history… Read More
The productivity slowdown: Is structural stagnation our fate?
In my widely overlooked book, After the New Economy, I initially took a very skeptical line towards the productivity acceleration of the late 1990s. I dismissed it as temporary and bubble-like, and an artifact of very imperfect measurement. When I wrote a new afterword for the paperback edition, though, I recanted my skepticism: the acceleration seemed to be going on long enough that, as painful as it was to admit, the bourgeois functionaries were right. Robert Solow’s famous 1987 quip, “You can see the computer age everywhere but in the productivity statistics,” had finally been repealed…. Read More
Does productivity = unemployment?
There’s a controversy aflame in the left–liberal blogosphere around a revelation in Ron Suskind’s new (and apparently error-riddled) book, Confidence Men. (Brad DeLong has the page.) Suskind reports on tense high-level meetings within the Obama administration as it became clear that the StimPak wasn’t really working. Unemployment was drifting higher, and the Keynesian faction—Christina Romer, then chair of the Council of Economic Advisors, and later Lawrence Summers, then resident wise man—was calling for more stimulus. Obama said no. It was politically impossible, but Obama also argued that the productivity revolution has made workers obsolete…. Read More
Posted on August 15, 2009 by Doug Henwood
Radio commentary, August 15, 2009
On Wednesday, the Federal Reserve completed its regular policy-setting meeting, an event that happens every six weeks or so. The communiqué they issued after this one contained few surprises. They see the economy as leveling out, and the financial markets in an improving trend, but prosperity as anything but around the corner. More precisely, they expect economic activity “to remain weak for a time,” and anticipate that they will continue to engineer a regime of “exceptionally low,” in their phrase, interest rates. They see the risks of inflation as very low too—unlike a… Read More