Though not necessary for reading this analysis, allow me to share the links to the Freakonomics podcast and the TEDtalk.
“Yes, the American Economy Is in a Funk — But Not for the Reasons You Think”
From this podcast, I can identify with being a techno-pessimist. There will not be mass unemployment b/c of techno revolution and robots. The progress will be slow, but the slow progress allows for checks and balances. Consequences of business practices and procedures are less destructive to humanity and environment than in years past.
We are intrinsically resourceful and innovative and will find ways to flourish in whatever economic environment we are in.
I am comforted by Robert Gordon’s interpretation of “how innovation and inventions affect the economy, especially the inventions of the past few decades”.
The villain of our economy is the culture to be faster and cheaper, we want to SAVE money and acquire more objects. We have a culture of amassing things, not experiences. We value the perception of others of us over the value of a meaningful exchange of goods and services. Our economy is the result of fast and cheap. We don’t care where it came from or who made it as along as it makes us look good on the outside and create a false sense of security on the inside.
Improvements in efficiency per unit of labor and per unit of machine is called total factor productivity = impact of innovation.
Our economy is measured by total factor productivity – improvements in efficiency per unit of labor and per unit of machine. It has been 1.2 percent a year for the last 10 years. In 10-15 years, it is predicted to be .3 percent per year, which means that as many people will be falling back as there are moving ahead.
Our growth rate is similar to other developed nation’s markets in all but one area, the measurable slowing improvement of educational attainment sets the US apart.
My argument is that economists measure of growth rate is no longer relevant.
(Personal side note: Isn’t this is an exploitative concept? Why would we want to measure progress on the backs of human beings anyway?)
The perfect economic storm in 10-15 years:
Inequality in income, slowing improvement of educational attainment (esp. of young
men), aging population soon to be dependent on SS and medicare, and the loss of SS
and medicare.
“The future of work and innovation: Robert Gordon and Erik Brynjolfsson debate at TED 2013”
In this debate, I was disappointed by Robert Gordon’s interrelation. To accept that notion that any aspect of our human capacity to be stagnated seems scientifically foolish. After watching the Ted Talk debate, I did not change my mind when I heard Economist Erik Brynjolfsson present an opposing view.
We are not witnessing the end of innovation. We are shifting from a need of material things and “snazzy machines” to a greater need of self-fulfillment and greater experiences. The view of history that I believe is that we are on an S-curve, that inventions and innovations are changing, there is ebb and flow. The problem is not with technology, it is with ourselves.
I do agree with Gordon’s take on immigration, we could have a more robust economy,healthier diverse cultures, and true competitive markets. I also agree on his take on tax policy, we are losing potential revenue by not taking advantage of a nationwide sales tax and lowering income taxes and cleaning up the tax loopholes. I agree the most on the need to quality remedial education.
I have considered U.S. public policies like this, I am passionate about using policy to impact human rights issues such as human trafficking.
The connection between economics and public policy is that one fuels the other. No, our current policy does not reflect what is economically best. It is based on the outdated notions that materialism is the answer to all social ills.I chose indoor plumbing because I value quality of life. I do not think growth is over, I think we need to revamp the way we let children learn.
Thank you.
Diana Ortiz-Beaudet/Suchodolski
ASU Public Policy & Public Affairs
Economics and Public Policy – PAF201
The Response 