The US Economy

Thomas,

You are correct "fair and balanced" is the mantra of the Fox network, a generally consrervatively biased organization, as compared to ABC and CBS which are of a decidedly liberal bias. Overall I believe DeLong's piece was about as "fair and balanced" as are the Fox news reports.

Apart from limiting productivity growth through restrictions on labor markets or perhaps indirectly contributing to its enhancement through incentives to investment and consumption (hard to do the two together), I'm not sure what government can do to influence labor productivity. It seems to me this is much more a byproduct of market forces and the entrepreneurial activities of many people. I don't doubt government's willingness to take the credit when productivity is rising (or assign the blame when it is falling) but I think its influence is more related to the sum total of its activities over a broad range of economic policies than it is the result of wisdom or skill in any specific ones.

I am an admirer of Milton Friedman, but not so much of Krugman, who strikes me as far too partisan in the political application of his supposed views. Gary Becker (California, Stanford, Hoover Institute) if we are talking about the same guy, is a close acquaintance through a club in California. More stuff to ask him this summer.

Why, given the prevailing demographics, are the Europeans consuming their productivity gains with added leisure? Doesn't appear to be an appropriate solution even in the short run.

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georgeob1 wrote:

Overall I believe DeLong's piece was about as "fair and balanced" as are the Fox news reports.

... which is, of course, entirely appropriate for a commentary, but not entirely appropriate for a news report. But that's probably another discussion.

georgeob1 wrote:

[...], I'm not sure what government can do to influence labor productivity.

Nobody is sure except political propagandists of either camp, and they are wrong. For example, nobody really knows why productivity suddenly grew a lot slower in the 70s and 80s. All the popular explanations -- the hippies, the oil crisis, the influx of women ... -- have failed to survive statistical scrutiny.

georgeob1 wrote:

I am an admirer of Milton Friedman, but not so much of Krugman, who strikes me as far too partisan in the political application of his supposed views.

I suppose you haven't read much of his pre-Bush stuff then. As I might have mentioned earlier, it is surprising how little conflict you find between Krugman's "Peddling prosperity" and Friedman's "Capitalism and freedom". If you are interested, I recommend Krugman's Slate and Fortune articles, available on his old MIT home page.. Actually, Krugman's willingness to debunk fallacies in his own camp is a major reason I am so certain in my opposition to Bush. When Michael Moore comes out against Bush, that doesn't mean anything. When a moderate, reasoned liberal like Krugman goes shrill, it does mean something.

georgeob1 wrote:

Gary Becker (California, Stanford, Hoover Institute) if we are talking about the same guy, is a close acquaintance through a club in California.

Man, I sooo envy you! His work on the economics of crime, discrimination, marriage, and other supposedly 'non-economic' topics are highlights in my library. By all means ask away when you meet him -- there are people out there who would kill for the opportunity!

georgeob1 wrote:

Why, given the prevailing demographics, are the Europeans consuming their productivity gains with added leisure? Doesn't appear to be an appropriate solution even in the short run.

Why not? One form of consumption is as good as the other. If added leisure was a substitute for saving, you would have a valid point re: demographics. But a bigger car and 500 hours of leisure are just two different things people want to have, and trade off for each other. The fact that one shows up in productivity statistics and the other does not is entirely the statisticians' problem. It has no relevance to the real world.

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Thomas,

I'll get to the early Krugman stuff after I finish the goddam Economics text.

Polemics from an academic type are (in my book) no better than polemics from a "news" organization.

Very interesting point about leisure as a good.

So productivity growth is the economic result of many factors, none well enough understood to be reliably predictive. True? How then did DeLong assign 1/2 of the growth in the '90s to the wisdom of Clintonian policies?

I was aware of Gary's various columns and some of his academic work at Hoover, but not of all the rest you referred to. Shows you how blissfully ignorant one can be.

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Just maybe, more people are beginning to see what I've been seeing for quite awhile.
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Stocks Fall as Confidence Wanes
Tue Feb 24, 4:44 PM ET Add Business - Reuters to My Yahoo!

By Bill Rigby

NEW YORK (Reuters) - U.S. stocks fell on Tuesday for the fifth straight session as investors worried over a dip in consumer confidence and fretted that markets are overpriced after scaling higher for nearly a year

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cicerone imposter wrote:

Just maybe, more people are beginning to see what I've been seeing for quite awhile.
*************************
Stocks Fall as Confidence Wanes
Tue Feb 24, 4:44 PM ET Add Business - Reuters to My Yahoo!

By Bill Rigby

NEW YORK (Reuters) - U.S. stocks fell on Tuesday for the fifth straight session as investors worried over a dip in consumer confidence and fretted that markets are overpriced after scaling higher for nearly a year

You must be positively giddy to have some bad news after all this optimism! Very Happy

How lovely for you!

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Lovely for me? You're confused! I've been the lonely voice against all this rah-rah US economy rhetoric coming out of the pundits, because I did not see - nor continue to see - how our economy can be in good health when 77,000 job losses per month continues for over three years in a row. It will take 300,000 job growth per month for our economy to show "real" growth, and I haven't seen that yet. If you think I have to apologize for being right, you've got the wrong critic. Our investment allocation still sits at 36 percent equities. What makes you think I'm happy or giddy about this bad news?

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georgeob1 wrote:

I'll get to the early Krugman stuff after I finish the goddam Economics text.

Oh, you did get a copy of Dornbush/Fischer's 1978 edition? My issue is still shipping. (Didn't get anywhere near my university library to copy the pages on disinflation, so had to order a used copy on abebooks.com)

georgeob1 wrote:

Polemics from an academic type are (in my book) no better than polemics from a "news" organization.

I agree. And I have no problem with the fact that Fox's commentaries contain conservative polemic. My problem is with the fact that their polemics color their news reporting. (Like their not reporting on the 100,000 people demonstration against the War on Iraq in Washington last March.) De Long's article was a commentary, not a report.

georgeob1 wrote:

So productivity growth is the economic result of many factors, none well enough understood to be reliably predictive. True? How then did DeLong assign 1/2 of the growth in the '90s to the wisdom of Clintonian policies?

I should have been more precise, because it depends on the kind of productivity you're talking about. Labor productivity, which is what news reports usually refer to, is a function of the capital stock and the state of technology. Reducing government debt reduces interest rates, accelerates the growth of the capital stock, and thus increases labor productivity. Economists disagree on the exact amount though.

Then there is total factor productivity -- output in goods and services per input in land, capital, and labor. This is a measure of the state of technology alone, and it's the kind of productivity which economists don't really know how to improve. De Long thinks this latter kind accounts for 50% of economic growth in the 1990s, Mankiw evidently thinks it's 85%. Stated this way, the disagreement looks much smaller, doesn't it?

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Thomas wrote:

georgeob1 wrote:
Polemics from an academic type are (in my book) no better than polemics from a "news" organization.

I agree. And I have no problem with the fact that Fox's commentaries contain conservative polemic. My problem is with the fact that their polemics color their news reporting. (Like their not reporting on the 100,000 people demonstration against the War on Iraq in Washington last March.)

I find that they did report about anti-war protests in Washington in March, though not in the numbers you mention:

Tens of Thousands March Against War in New York, Washington

I also do not find another news source that agrees with your number for any March protest in Washington. (Though that doesn't mean one does not exist.)

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Am I wrong in thinking that the president is responsible for ZERO spending and that Congress who spends all the money? I thought I had read that somewhere...

Now it's true that Bush yet to see a spending bill he hasn't signed, but I don't feel that the blame then resides on his shoulders, but on the congress bringing those spending bills to his desk.

I just think blame should lie where it best belongs. I don't recall Bush ever adding pork to any of those bills.

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Let's see; who brought the $84 billion spending bill to congress for Iraq?

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Didn't congress have to approve it?

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Yep.

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They should all be thrown out on their ears......come next election.

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Congress should have term limits.

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I agree!

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Quote:

Congress should have term limits.

I thought we had elections for that.

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dys, We "do" have elections for that, but we all understand how politics works in Washington. The "seniors" get all the gravy jobs and influence, so very few are willing to turn over the apple cart. We have identified the enemy.......

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I see "term limits" as throwing the baby out with the bathwater.

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Scrat wrote:

I find that they did report about anti-war protests in Washington in March, though not in the numbers you mention:

Fair enough. I stand corrected on this point then. Thanks!

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Sometimes we need to clean out the bathtub.

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