PeakTrader.com

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PeakTrader said...

The U.S. suddenly became more productive starting in 1995. A higher level of productivity is disinflationary:

Governor Randall S. Kroszner
At The Forecasters Club of New York, New York, New York
September 27, 2006

"A great success story for the American economy has been the resurgence of productivity growth that began around 1995.

From 1973 to 1995, labor productivity in the nonfarm business sector increased at an annual rate of 1-1/2 percent. (Labor productivity is defined in terms of output per hour of work in the economy.)

In contrast, from 1995 to 2000, productivity accelerated to a 2-1/2 percent rate.

Perhaps even more remarkably, despite a recession, the fall of the dot-com market, a broad stock market correction, terrorism, and corporate governance scandals, productivity has accelerated even further since 2000.

Despite some slowing in the past few quarters, productivity in the nonfarm business sector has risen at an average annual rate of about 3 percent over the past 5-1/2 years."

http://www.blogger.com/comment.g?blogID=28997633&postID=5053697253525074472

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PeakTrader said..
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Hydra, there's a moral question that's too often overlooked.

When "good" choices are made, people (or governments, firms, households, or individuals) should be rewarded, and when "bad" choices are made, people should be punished.

Promoting equality also promotes immorality, because good choices become equal to bad choices.

Also, there's the fundamental economic problem of scarcity, i.e. unlimited wants and limited resources.

Limited resources should be allocated and employed to where value is maximized, even if it means the rich benefit more than the poor.

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Hydra said...

The past is no guarantee of the future, you investmentadvisor would say.

Yes, we will invent new stuff.

PTs statement implies success and growth is good.

We acknowledge this will accrue to the wealthy.

What happens to every one else, whether unemployed or underemployed?

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PeakTrader said...

Hydra, President Kennedy stated that a rising tide of economic growth generated benefits for all.

Absolute living standards have risen for both the rich and the poor.

Are the poor better off if the rich creates a trillion of wealth or if they don't?

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Hydra said...

Are the poor better off if the rich creates a trillion of wealth or if they don't"

they are better off.

A rising tide raises all boats the same amount, but it raises the rich mans boat several hundred ton-ft and the poor mans boat a hundred pounds-ft.

You act like the rich create that trillion of wealth out of thin air. Or as if they are solely responsible for the tide.

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PeakTrader said...

Hydra, the only way to move from one economic revolution into the next is through efficiencies of production, because of limited resources.

People, rich and poor, are better off after the Agricultural-Industrial-Information-Biotech revolutions than they were before.

There are many more economic revolutions to come, which are inevitable. The question is how fast do we want the country or society to move into new economic revolutions.

I suggest, the faster we move into new economic revolutions, the better off both the rich and the poor will become.

Fewer resources to produce more output, in each economic revolution, allow limited resources to shift into the next economic revolution.

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PeakTrader said...

Hydra, fewer resources means fewer inputs to get more output. That's been the trend.

Eventually, less than 1% of the workforce will produce enough food (Agricultural Revolution), while less than 10% of the workforce produce enough manufactured goods (Industrial Revolution), etc.

Someday there may be hundreds of economic revolutions instead of the four today. Perhaps, at that point, 1,000 workers will produce enough food to feed 10 billion people.

http://www.blogger.com/comment.g?blogID=28997633&postID=3944626522812155883