Tag: Economic Growth

AI And Productivity Growth

Everybody these days has something to say about this AI thing.

There has been a wealth of wide ranging posts and stories about this thing we call AI….even in the blogging world it has become popular authors employing it for posts and even comments.

There are both pro and cons in the usage of this technology.

I read an interesting article recently that takes a look at AI and productivity growth…..

It is really painful to see the regular flow of pieces debating whether AI will lead to mass unemployment. Invariably, these pieces are written as though the author has taken an oath that they have no knowledge of economics whatsoever.

The NYT gave us the latest example on Sunday, in a piece debating how many jobs will be affected by AI. As the piece itself indicates, it is not clear what “affected by AI” even means.

What percent of jobs were affected by computers? The answer would probably be pretty close to 100 percent, if by “affected” we mean in some way changed. If by affected, we mean eliminated, then we clearly are talking about a much smaller number.

Thinking of AI like we did about computers is likely a good place to start. First of all, we should remember that there were predictions of massive layoffs and unemployment from computers and robots for decades. This did not happen.

In fact, we have a measure of the extent to which computers, robots, and other technology are displacing workers. It’s called “productivity growth,” and the Labor Department gives us data on it every quarter.

Productivity is the measure of the value of output that a worker can produce an hour. We expect this to increase through time as we get better equipment and software, we learn how to do things better, and workers get more educated.

For the last two centuries, productivity growth has been a normal feature of the U.S. economy, and in fact, most normally functioning economies around the world. This is the basis for rising living standards through time. It is the reason that we can feed our whole population, and still export food, even with just around 1.0 percent of the workforce in agriculture, as opposed to more than 50 percent in the 19th century.

The big question is the rate at which productivity grows. Productivity growth has actually been pretty slow in recent years. It averaged just 1.3 percent annually since 2006. By contrast, it averaged close to 3.0 percent in the quarter century from 1947 to 1973.

AI, Job Loss and Productivity Growth

I am told that people cannot tell the difference between actual writing and the AI generated….if that is true why bother doing the writing?

I use quotes and my own thoughts…I do not use or need help.

Be aware I said ‘I’….that does not mean that I condemn the use….just that it is not for me.

That out of the way….

Any thoughts?

I Read, I Write, You Know

“lego ergo scribo”

Pandemics Helped Build Mega-Corporations

Yes I know another one of the professor’s historic posts……history is where it is at people.

I read an interesting article about pandemics and how they helped build the mega-corporations….but first a little background from earlier posts here on IST……

https://lobotero.com/2020/03/28/pandemics-in-history/

https://lobotero.com/2020/04/01/more-plague-history/

There have been many pandemics through history and each time someone dies and others profit……

In June 1348, people in England began reporting mysterious symptoms. They started off as mild and vague: headaches, aches, and nausea. This was followed by painful black lumps, or buboes, growing in the armpits and groin, which gave the disease its name: bubonic plague. The last stage was a high fever, and then death.

Originating in Central Asia, soldiers and caravans had brought bubonic plague – Yersina pestis, a bacterium carried on fleas that lived on rats – to ports on the Black Sea. The highly commercialised world of the Mediterranean ensured the plague’s swift transfer on merchant ships to Italy, and then across Europe. The Black Death killed between a third and a half of the population of Europe and the Near East.

This huge number of deaths was accompanied by general economic devastation. With a third of the workforce dead, the crops could not be harvested and communities fell apart. One in ten villages in England (and in Tuscany and other regions) were lost and never re-founded. Houses fell into the ground and were covered by grass and earth, leaving only the church behind. If you ever see a church or chapel all alone in a field, you are probably looking at the last remains of one of Europe’s lost villages.

https://theconversation.com/how-pandemics-past-and-present-fuel-the-rise-of-mega-corporations-137732

Throughout history there are winners and losers……usually it is the working stiffs that lose out and those with the money that make out like bandits…..

Think this is not the case?

Let’s look at Bezos……in one day during this pandemic…..

How do you treat yourself when you make $13 billion in one day? We’ll have to ask Jeff Bezos, who, per Bloomberg, saw that amount added to his net worth Monday, the largest single-day boost to one person’s wealth since the Bloomberg Billionaires Index began in 2012. A big part of his newfound windfall: Amazon shares rising 7.9% Monday (they’ve been up 73% so far this year). The 56-year-old Amazon founder has made $74 billion in 2020, bringing his overall fortune up to nearly $190 billion—more than what Nike or McDonald’s is worth. Earlier this year, Business Insider reported

Learn Stuff!

I Read, I Write, You Know

“lego ergo scribo”

The Economy–05Nov18

Tomorrow we go to the polls and vote either for dumb or dumber…..and it is important and you would think that since it is important that the Repubs would be looking for the best foot to put forward….and that would be the ECONOMY.

But so far all they have is bullshit anti-immigration slogans….why not emphasize the fact that wages are rising at a good rate……

The last unemployment report before the midterms is a strong one. Employers added 250,000 jobs in October, above the forecast of 188,000, reports the Wall Street Journal. The unemployment rate itself remained at a five-decade low of 3.7%, per the AP. The influx of new job-seekers in October increased the proportion of Americans with jobs to its highest level since January 2009. What’s more, wages rose 3.1% when compared to last October, the best such gain since 2009. It’s the first time since the recession ended that wages rose more than 3% over a year. Average hourly earnings in the private sector increased 5 cents to $27.30.

But so far the president spends all his time recalling 2016, bad mouthing opponents, ripping immigrants, and insulting the press…..not much on the things that are going right……

AS much as Trump would like his lies to find a foothold…..but all is NOT as good as the President would have us believe……

But all the news is not good with the Economy……

There’s mounting anecdotal evidence that President Donald Trump’s trade war is causing trouble for the US economy and businesses. But Friday’s report on third-quarter gross domestic product may be the best hard evidence yet that the tariffs are causing major disruptions in the economy.

GDP rose at an annualized rate of 3.5% in the third quarter. But the contribution of net exports of goods and services — the measure of how much trade added or subtracted to GDP growth — was a dismal -1.78 percentage points.

https://www.businessinsider.com/gdp-trump-tariff-trade-war-us-china-2018-10

Trump’s super tax cuts has put the US economy into a deep deep deficit……

It became very clear this month that neither the Trump White House nor its allies on Capitol Hill want you to know that the federal budget is already in very bad shape … and getting worse.

It happened when the Treasury, the official keeper of Washington’s financial results, issued its monthly statement for the first 10 months of fiscal 2018 about federal revenue, spending and, therefore, the budget deficit.

https://www.usatoday.com/story/opinion/2018/08/20/donald-trump-trillion-dollar-plus-deficits-fiscal-ruin-column/986236002/

2008 the housing market led the rush to ruin…and it is once again showing signs of weakness…..

Despite a robust U.S. economy, at least as measured by gross domestic product, real home price growth is locked in a cyclical downturn. If that’s not bad enough, it will likely get worse based on the same approach and factors that correctly flagged the housing bust — in real time — in early 2006.

Home prices are highly cyclical and, as everyone discovered from the last recession, their movements can have material consequences for the broader economy. Yet, according to the minutes of the Federal Reserve’s Aug. 1 monetary policy meeting, policy makers are only starting to recognize the “possibility” of a significant weakening in the housing sector as a “downside risk.” Our research suggests that real home price growth has already entered a cyclical downturn that is likely to intensify. Data this week is forecast to show a drop in housing starts and existing home sales.

https://www.bloomberg.com/opinion/articles/2018-10-15/housing-prices-may-have-entered-a-cyclical-downturn

Key economic indicators are flashing red:

  • Worker productivity is sluggish. The third quarter marked the “32nd straight quarter of yearly growth below 2%, a long and consistent stretch of anemic growth that hasn’t happened before in the post-World War II era,” the WSJ reports.
  • Manufacturing activity has stalled for the first time in two years, possibly the result of President Trump’s multi-front trade war.
  • Business investment is laggardly. Rather than using their $1.2 trillion tax cut on capital spending, companies are on track for the biggest-ever year of stock buybacks, possibly reaching $1 trillion.

Instead of focusing on a group of slow walking people maybe he should grasp and old saying……

“Mr. President….It is The Economy Stupid!”

Vote Tomorrow!

Economic Good News

I know that I have not been too receptive for Our Dear Leader but I believe that when credit is due I shall give it…….

Dear Leaders economic predictions are good and this time they were damn close to his…..

It’s not traditional for presidents to comment on economic growth figures before they are released, but President Trump isn’t exactly a stickler for tradition. At a rally at an Illinois steel plant on Thursday, Trump predicted that the numbers released by the Commerce Department on Friday morning would be very good indeed, the Wall Street Journal reports. He said somebody had predicted 5.3% growth, which he didn’t think would happen, but he’d be happy with anything over around 3.7%. “These are unthinkable numbers,” Trump said. “If I would have used these numbers during the campaign, the fake news back there would’ve said he’s exaggerating.”

At a rally in Iowa earlier Thursday, Trump told the crowd that there had been a lot of predictions—”some with a 5 in front of it.” He predicted it would be close, though economists surveyed by the Journal believe a figure of around 4.4% second-quarter growth is more likely. In his Illinois speech, Trump credited his tariffs with boosting the economy and helping the Granite City steel plant reopen, Fox News reports. “After years of shutdowns and cutbacks … workers are back on the job, and we are once again pouring new American steel back into the spine of our country,” he said.

The funniest part of that was the use of “traditionally”…..

But let’s not stop there……there is more good news for Our Dear Leader to use to his advantage…..

The Commerce Department reports that the gross domestic product, the country’s total output of goods and services, posted its best showing since a 4.9% gain in the third quarter of 2014. The Wall Street Journal notes the Q2 2017 GDP was 2.8%. Trump predicts growth will accelerate under his economic policies. But private forecasters cautioned that the April-June pace is unsustainable because it stems from temporary factors. The rest of the year is likely to see good, but slower growth of around 3%. Still, the Journal suspects this strong report will keep the Fed on track to raise its benchmark rate to 2% or 2.25% in September.

The news is good and I hope that it keeps up……we all could use with a bit of good economic news, right?

SOTU–Rigged Economy

Sorry to say that I am in the hospital and did not (would not) watch the SOTU speech by Pres. Trump…..of course the only positive thing that he, Trump, has to regale the country with his his economic policies….

The only people that will reap the benefits of the Trump economic policies is the wealthy…..the GOP will thump their chest over the pittance that the middle class will get for the next 5 years and nothing will be said about the wealthy permanent benefits….but what the Hell he gotta have something to bullsh*t the unwashed masses with, right?

In his State of the Union address on Tuesday, President Donald Trump is sure to point to stock indexes and other positive economic indicators as evidence of a “Trump boom.” But to the extent that middle-class and working families are doing better economically, it is not because of Trump or his policies; rather, it is in spite of them. Instead of fighting for American workers, as he promised to do during his presidential campaign, Trump has sought in numerous ways to disempower them.

The Trump administration’s fiscal policies are redistributing income and wealth upward through massive new tax breaks to corporations and the wealthy, which come at the expense of middle-class and low-income Americans and investments in key economic priorities such as infrastructure. And by ending the Deferred Action for Childhood Arrivals (DACA) initiative, the administration has thrown the lives of hundreds of thousands of young people—who, with DACA, have been able to get better- and better-paying jobs, buy houses and cars, and make significant economic contributions to the nation as a whole—into chaos.

https://www.americanprogress.org/issues/economy/news/2018/01/29/445446/state-union-preview-trump-rigging-economy-workers-middle-class/

All in all….I am glad that I was on pain meds after the surgery topped me from watching the most boring of evenings.

Closing Thought–13Oct17

When the news does not favor Trump then he takes to Tweeter and sets off belittling people or trying to draw attention to something that has anything to do with the running of this country.

He is so busy belittling people or trying to gin up some fake narrative that he misses his chance to come off in a good light.

For instance, instead of worrying about a knee or trying to take away the 1st amendment he should gave bee laser focused on the economy…..this week there was good news he could have used top bis advantage and to further his agenda…..

Stocks managed to post modest gains Wednesday on Wall Street, enough to set more record closing highs, the AP reports. Technology and health care stocks rose more than the rest of the market, while banks and phone companies fell. Johnson & Johnson rose 2.1% after the company asked regulators to approve a prostate cancer drug. Luxury goods maker Coach dropped 2.8% after saying it will change its name to Tapestry.

The Standard & Poor’s 500 index rose 4 points, or 0.2%, to 2,555. The Dow Jones industrial average rose 42 points, or 0.2%, 22,872. The Nasdaq rose 16 points, or 0.2%, to 6,603. All three closed at record highs. Small-company stocks lagged the rest of the market. The Russell 2000 index fell 1 point to 1,506.

Instead of showing his insecurities he should be thumping his chest about the good news from Wall Street.

It amazes me just how much good news he lets slip away while he chases one of his silly vendettas.

Why Americans Feel So Good

Trump came to office on the promise of the American economy will boom…he will ax crappy trade agreements….he will make the free market blossom for ALL Americans.

The stock markets are going well and Trump points to that as proof positive that he is doing what he promised.

It is true that markets are doing well……sadly the same cannot be said for the economy of this country….at best it is mediocre.

Then why are Americans pleased and satisfied with this situation?

A strange thing seems to be happening to the US economy. On surveys, businesspeople and consumers say the future looks bright. But recent economic activity hasn’t appeared very robust.

Andrew Ross Sorkin of the New York Times noted this in a recent article about mergers and acquisitions. A number of surveys have been reporting that chief executive officers are highly optimistic. For example, the website Chief Executive and the Wall Street Journal/Vistage Small Business CEO Survey both report a surge in CEO confidence since the 2016 election, while Business Roundtable’s CEO Economic Outlook Survey finds an average level of confidence.

But as Sorkin reports, M&A activity is at its lowest level since 2013, and has fallen 40 percent in the past two years. Share buybacks have also slowed. Those “hard” numbers indicate that whatever CEOs are saying on paper, they aren’t taking actions that signal confidence in the future of their businesses. Capacity usage, which fell slightly in May, is another indicator of that true business sentiment is far from giddy.

Source: Why Americans Feel So Good about a Mediocre Economy – ASHARQ AL-AWSAT English

It is typical….Americans have always been satisfied with mediocrity.

Closing Thought–04May17

May the Fourth be with you!

Before I go on I need to bring to everyone’s attention……on this day in 1970 soldiers shoot and kill protesting students at Kent State……

On this day in 1970 the Ohio National Guard were sent to Kent State University due to disturbances in the city of Kent that weekend. Students at the university were protesting the Cambodian Campaign of the United States and South Vietnam in the Vietnam War. The National Guard opened fire on the students, killing four unarmed students and wounding nine others.

On to the post for the hour………

Gravel at Our Feet!

For decades the US and others have imposed economic sanctions against the country of North Korea….the aim is to cripple the government and the country into submission to the will of the “Overlords”.

The US has just imposed a new round of sanctions in response to nuke testing and missile research…..by now, after decades,  there should be cracks appearing all over NK’s economy thanx to sanctions…..right?

Not so fast.

Resolute in its commitment to communism and plagued by sanctions, North Korea has one of the most isolated economies in the world. And yet its economy is showing signs of expanding — potentially at a pretty decent pace.

This weekend the New York Times’s Choe Sang-Hun wrote a fascinating article showing how the country has been experiencing economic success in recent years by taking steps toward allowing private enterprise to spread throughout the country.

According to the Times, some experts estimate that the North Korean economy could be growing between 1 and 5 percent per year. If North Korea’s economy is actually growing at the higher end of that estimate — say, around 4 percent — the country would be showing surprising resilience in the face of international sanctions.

Source: The North Korean economy is actually growing despite sanctions – Vox

If this is true then why are there a continuation of more sanctions if they are not doing what they were designed to do?

Einstein has a quote for this.

I close down for the day…..see you guys on the flip side of tomorrow….chuq

Why saving money won’t help the American economy

To continue boring the crap out of my visitors…..I will remain on the economics thing…..sorry must feel it must be said……

Whenever some economists get together they put out a call for more Americans to save so that there will be an increase of investing and that way the economy will get into high gear and we all will benefit……

Not so fast…..that is just a pipe dream sold to those uninformed…….it is at best propaganda ……at worst Bullsh*t!

 

Why saving money won’t help the American economy.

China Is As China Does

Inkwell Institute

CHINA…..now there is a subject that should get most people talking…..we blame a lot of the ills in our society on China….and the debate on how much of our so-called ‘debt’ that they own and how that could be used against us in time of hostilities……we all have an opinion on this massive country to our West……

From the China-United States Exchange Foundation……

How do we answer the age-old question of what happens when a rising power meets an established power? For centuries, this questions has hung over great power politics and posed a continual challenge to policymakers and international relations theorists alike.

When then Chinese Vice President Xi Jinping first raised the prospect of “a new type of relationship between major countries” in 2012, he called for the United States and China to chart a new course for their bilateral relationship. Since this initial call, American and Chinese officials have worked to build a new model of major power relations, including an informal “shirt-sleeve summit” between President Obama and President Xi last year.

Everybody is looking for a way to deal with the rising power of China, that would be economic power……let’s look at a few things first….in today’s world China is the second largest economy in that world….right?  In 1890 China was the….wait for it……second largest economy in the world.  So in that arena China has not come that far……So should we be worried about China as an economic or global threat?

In my humble opinion….NO!

Why?  They have an every expanding middle class and they will eventually reach for power……the poor in the outlying regions will have enough of the uneven equality that is growing in China….they will eventually rise up…..and then there is the corruption in the ruling class that will eventually bite them in the ass……their economic growth is slowing…….in closing this very simplistic analysis…..China in the next couple of decades will implode….giving Russia the opening it needs to expand its influence worldwide………..

There you have it….In My Opinion…..we are worrying about the wrong region of the world………there is far more danger to the world than China and it’s name is RUSSIA!

I will be watching!