12 March 2017

The Asymptote of Progress - part the third

We're getting closer. Even a (nearly) lunatic Right Wingnut, N. Gregory Mankiw the NYT token Rightist, takes up a number of themes of these endeavors likely opaquely to himself, in today's edition. He suggests that Kim Jong-Don talk to an actual economist (not mentioned is that it should be Stiglitz, but that's a bridge too far) to get answers to economic questions. Not that any Freshwater economist would have anything new on offer to Kim Jong-Don. Mankiw does offer up some real facts, which is a miracle on its own.

So, here are some bits from Mankiw.

But a large expansion in the aggregate demand for goods and services is not what the economy needs right now.

Of course, since Kim Jong-Don claims that the "real" unemployment rate is in the neighborhood of 40%, the only possible way to get those millions of unemployed into jobs is to push up aggregate demand. Unless, of course, you just want to leave those out of the labor force hanging out on meth and heroin. Mankiw is taking the 5% reported as globally true. Kim Jong-Don is right that U3 is too narrow a measure for the current circumstances; of course, he's nuts to say it's 42%, which number is generated from total employed divided by total population. Only a lunatic would offer such a number.

According to a recent paper by Mr. Jones and three co-authors, the number of Americans engaged in research has increased more than twentyfold since the 1930s, yet there has been no similar explosion in productivity growth. Their interpretation is that big ideas are just getting harder to find. Unfortunately, there is no sign that this is about to change.

That is, directly, the asymptote of progress. I claim previous invention.

Mr. Trump's victory can be attributed largely to the support of white working-class Americans.
The question is whether Mr. Trump can alter these disturbing trends. Few economists point to flawed trade agreements as the main source of the problem, as the president often does. More important is what economists call skill-biased technological change.
The solution is to increase the skills of the labor force through better education and training. Yet this is easier said than done.

Well, we're back to the solutions presented in previous missives in this series:
1 - you're just stupid and should never have earned such high wages, aided and abetted by evil unions; suck it up and make do with nothing (which is basically what the Right said to unemployed Northern union workers as jobs went South over the last decades)
2 - you're just stupid, but you're Real Americans and thus deserve sinecure for the rest of your life and those of your spawn (who will grow up just as stupid with Red State reactionary education, and then their spawn; repeat)

Mankiw isn't the bloody mouthed Bannon, but even a bit of sanity seeping into the Right is welcome. Whether there'll ever be enough is the critical question. The last billionaire to actually care about the underclass was called FDR. Kim Jong-Don ain't no FDR.

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