"cavelamb" wrote in message
...
Ed Huntress wrote:
"cavelamb" wrote in message
news
Ed Huntress wrote:
There's some serious questioning going on about the premises of the
free-market model, but we went through that in the '30s, too. So I
don't make too much of it. But I had a feeling about reaching this
moment in history 'way back in the early '70s. I was covering
automation and computers were just starting to get involved. It looked
then like we wouldn't need a lot of people in the future. My thoughts
then were that we would simply shorten the work week, like France was
doing at the time. But capital doesn't like to be spread around. g

Welcome to the 21st Century

Well, yeah, I have a calendar, but it doesn't tell me what's going to
happen to our economy. d8-)



Ed, I can appreciate that.

But can you appreciate how much you position had changed in the last year?

You were a true believer.
A true optimist.
You had faith in "the system".
It was all going to be - okay.

I loved you for that.
It gave me hope.

But now here we are...

The inmates have taken over the asylum,
and here we are...

Richard, I couldn't begin to explain my thoughts on economics, work, and
policy in 1,000 messages here. I do indeed believe that everything is going
to be Ok. My concern about jobs goes back 35 years -- it's a concern with
the economic system, not with the long-term well-being of the country. I saw
a train wreck ahead with saturating markets, low-cost Asian manufacturing,
large gains in productivity, and our growing dependency on big, historic
technological breakthroughs to give employment and the economy as a whole a
periodic boost.

It's just never looked sustainable to me. But those breakthroughs kept
coming, and they've dominated economic growth during our adult lifetimes.
Now the breakthroughs have slowed down and we've become dependent on
bubbles.

What's next? A denouement of sorts: a recognition that the chain of
breakthrough technologies isn't enough to sustain adequate growth under our
present model, and a further recognition that bubbles are chimeras that do
more harm than good.

Our economy is based on private consumption, and it is far and away the most
mature, and saturated, such economy in history. I don't think the
traditional growth models apply to it very well. Between replacement (think
agriculture and underwear g), and the growth that comes from continuous
improvement (cars, PCs, cameras), my gut feeling is that we can produce no
more than 3% growth per year. Possibly even less. Anything over that is
direct and indirect effects of big technological developments (mass
production of steel; the railroad; the automobile; civilian air transport;
microelectronics; personal computers -- all in the past tense -- and
possibly energy breakthroughs in the future tense) or bubbles. Again, the
former cannot be counted on, even if they occasionally apply a positive
punctuation to the basic economic model.

Without a shot at sustainable 4+% growth, we'll have a hell of a time
digging out of future recessions. So I see some changes coming in the
operating model. Don't ask me what they are; I don't have a clue. I can
hypothesize some things but they're just guesses.

As for why I think things will be Ok -- eventually -- we have the means to
produce a very nice standard of living. Recessions don't change that. Other
highly developed countries are headed for a worse funk than we are. At some
point we'll do a new Bretton Woods and come up with a sustainable model. We
all have the means.

We aren't going to commit suicide, and our productive capacity, housing
stock, transportation and communication are not going to disappear. So
there's good reason to be optimistic. We do need to adjust to slower growth,
and we need to make sure that all growth accrues to the well being of the
large majority of citizens.

--
Ed Huntress