
Second-quarter US GDP growth revised up to 4.2 percent on software, trade - Varcht
https://www.thegazette.com/subject/news/nation-and-world/second-quarter-growth-revised-up-to-42-percent-on-software-trade-20180829
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joefranklinsrs
I haven't seen US economy this versatile and powerful in a long time, maybe
since the 80s. This economy is diversified - manufacturing jobs used to be 32%
in the 60s, now it is around 9% currently, but it is growing fast this year.
We now have new jobs in every sectors growing, from finance (NY), college
(Boston), healthcare (east coast), government (Washington DC), entertainment
(Los Angeles), oil and gas (Texas), import/export (Cali/Florida), tourism
(Florida), agriculture (flyover), and of course, tech (Silicon Valley,
Seattle). And each industry is evenly distributed and growing. Thus the low
unemployment rate and wage increases (higher in industries with higher
demands)

US has gone through lots of challenges (globalization, gas/oil crisis, 9/11,
cold war) in the last 50 years, and has come out on top every time.

4% growth is huge for the largest economy in the world, and the economy is
nearly double the size of the closest competitor country. Bay Area alone is
nearly a trillion dollar economy, and has double the growth rate of any other
county in US.

Coupled with the flooding of capital back to US via the reduced expatriation
tax rate, US is firing on all cylinders.

~~~
melling
I’ve been trying to learn a little about economics. Do you have any favorite
economists, etc that you follow? I’m trying to learn more about the
interaction of QE, rising fed rates, growing deficits, etc.

Basically, I’d like to move beyond the headlines and the spin.

[Update]

Here are some people I try to follow:

Jan Hatzius - Goldman Economist

Robert Schiller

Stephen Roach - Yale Economist [https://www.project-
syndicate.org/columnist/stephen-s--roach](https://www.project-
syndicate.org/columnist/stephen-s--roach)

Jeremy Grantham - GMO

Ray Dalio - Bridgewater

Larry Summers

~~~
joefranklinsrs
Great question, thanks for asking!

I like Nikolai Kondratiev, Pettis, Alfred Marshall, Carmen Reinhart, and Bill
Gates (read his recent stuff on software economics)

I don't like Krugman and Greenspan.

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jhundal
I'm particularly curious about why you prefer Reinhart over Krugman,
specifically because of the disagreement over the famously erroneous Reinhart-
Rogoff results (Krugman comment here:
[https://krugman.blogs.nytimes.com/2013/04/16/reinhart-
rogoff...](https://krugman.blogs.nytimes.com/2013/04/16/reinhart-rogoff-
continued/). As far as I know, Reinhart-Rogoff never republished or responded
further than what Krugman discussed in the linked post). Specific examples
supporting/disproving the case of either would be helpful.

I tend to ignore Krugman when he's talking politics (eg. his prediction of a
Trump recession). However, when he goes through the process of laying out the
assumptions of an economic model (happens in many of his blog posts labeled
'wonkish'), his discussion of economic consequences of various policies seems
to map very well with reality.

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beerlord
One thing I've noticed hiring in both the USA, Australia, and Europe is the
huge amount of 'hidden' taxes in Europe.

For example, if I hire a worker even on minimum wage, I'm paying up to half of
their gross labour cost (depending on the country) as taxes to the Government!
This is called things like a social security tax, healthcare tax, disability
tax, etc etc.

By contrast in the USA you have one pretty simple and low payroll tax, plus
health insurance. Australia has it even better, with no health insurance,
though you do have mandatory superannuation/retirement fund contributions on
behalf of the employee (all still much lower in Europe).

This creates huge incentives in Europe to just pay cash in hand, or say pay
the annual bonus or overtime as cash. There are also a lot of companies afraid
of growing larger and hiring more staff, because it will make their cash
payments harder to conceal.

I hope from this boom in the US that the Federal Government can remove payroll
taxes there. Combined with a move to a single-payer healthcare system, hiring
and paying US employees could be the simplest on the planet.

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purplezooey
The challenge of the next 10 years will be housing. We are not building nearly
enough. A fraction of what we need even to slow price growth. We still have
these quaint subdivisions built in the 60s and 70s full of nimbyism and voting
down all development. We need a big move here.

~~~
mrep
The only area that I am aware of that has that problem is the bay area. Yeah,
you guys are fucked but every other city that I am aware of is aggressively
building to supply demand for housing.

~~~
throwawayjava
Boston, NYC, and DC are all similarly fucked. Not as bad, but not good...

Part of the problem is that a lot of _wage_ growth is concentrated in areas
that are experiencing a housing crunch.

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grandmczeb
> Part of the problem is that a lot of wage growth is concentrated in areas
> that are experiencing a housing crunch.

This is actually a really good point. There's actually a great paper that
covers how much higher housing prices have hurt growth due to workers being
discouraged from moving to high productivity areas[1]. The tl;dr is that if
only NYC, SF, and San Jose adopted the land uses restrictions of a median US
city, GDP would be about 9% higher (about $8,775 per worker assuming the labor
share of GDP and number of workers doesn't change).

[1]
[http://www.nber.org/papers/w21154.pdf](http://www.nber.org/papers/w21154.pdf)

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irishcoffee
Thoughts?

[https://www.businessinsider.com/wages-growth-is-weak-due-
to-...](https://www.businessinsider.com/wages-growth-is-weak-due-to-
widespread-underemployment-study-finds-2018-8)

~~~
spamizbad
A reasonable hypothesis. I also wonder if its a (business) culture issue:
companies these days just seem really reluctant to give raises, with people
(or rather, those with the ability to do so) just changing jobs to get a
"raise"

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telotortium
Mods, can we retitle this to point out that it's specifically the US economy
that's grown?

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dang
At your service.

