
We’re in a Low-Growth World. How Did We Get Here? - e15ctr0n
http://www.nytimes.com/2016/08/07/upshot/were-in-a-low-growth-world-how-did-we-get-here.html
======
blazespin
Growth as a result of consumption is destructive. We need to find ways to
'grow' our economy without increasing consumption. For example, measure growth
by how people are becoming more educated. If people could live healthily and
intelligent and only work 10 hours a week until they were 100, wouldn't that
be better than being able to buy a new car every year? Or a 5000sq house with
the latest big screen tv?

I believe (or rather, I pray) that we have hit peak consumption which will
lead to this problem forevermore. We need to find new ways to improve
ourselves than shopping more.

~~~
whenwillitstop
The problem is that we live in a world governed by natural forces, and not by
spiritual revolutions.

~~~
ZenoArrow
Which natural forces are you referring to? Are you sure that they are natural
forces (rather than learned behaviour)?

~~~
nine_k
Game theory, mostly.

~~~
ZenoArrow
If game theory is natural law then it should apply to all humans, regardless
of background. How does it apply to the groups of people who aren't driven by
amassing material possessions (hunter-gatherer tribes, monks/nuns, etc...)?

------
didibus
I'm so tired to hear about growth. Growth is not a very beneficial situation
to be in. We should focus on sustainability. Do we tell people to grow as fat
as they can be? No, we encourage a sustainable in and out, just what we need
for a happy and healthy life.

Billionaires are not a thousand times happier or healthier then millionaires.
Growth is overrated.

There's a baseline of wealth that we must sustain, then we need to focus on
horizontally scaling that baseline to as many people as possible, and finally,
we must work to sustain that scale too. Growth appears twice in this equation,
but always at a very well defined scale. We need to grow to reach the
baseline, and then grow to have everyone base-lined.

Once we have achieved the above in a sustainable way, then we should focus all
our remaining efforts into having fun, being curious, enjoying ourselves, and
enjoying each others company. This should similarly be handled in a
sustainable way. A heroine high is not a sustainable enjoyable and fun
activity. Going for a walk along a park or a coast is. The dosage is
important, a night out partying here and there is sustainable, day after day
of it is not. Sprinkle in some learning and curiosity, I for example, would
keep coding for pleasure. In fact, sustainability will probably motivate
people towards sciences and technological advancement even faster, as we'll
finally let free of our intrinsic motivations to do so.

To quote Nietzsche: "To escape boredom, man works either beyond what his usual
needs require, or else he invents play, that is, work that is designed to
quiet no need other than that for working in general."

The first part of that quote is Growth, endless, unhealthy, never ending
Growth, simply to address our own boredom. The second part is sustainable
life, easy, playful, and fun.

I really hope as we progress, I stop hearing about Growth, and I start hearing
a lot more about Sustainability.

~~~
jomamaxx
"Growth is not a very beneficial situation to be in."

Again this is false.

There are so many financially illiterate people here on Hackernews.

Growth is a _great_ situation to be in. When there is growth - there is money
for projects, hospitals, infrastructure etc.

When there is no growth - everything goes out the window, and the first thing
to go are longer term things like 'sustainability'.

You want to switch to solar - then you need a lot of 'growth' \- why? Because
the US cannot function on 40 cents/kwh electricity.

Now - growth by 'adding bodies' \- which is where most growth comes from in
the West - is bad. Immigration is where 80% of GDP growth comes from and that
is definitely a Ponzi scheme.

IF you normalize for growth across US and EU countries, it's much more
similar. The US simply imports people to grow the GDP whereas EU does less of
that.

So, to your point, measuring GDP/capita would be a good start for 'sustainable
growth'.

~~~
erikpukinskis
I'm financially illiterate, so you'll have to pardon me. But why is growth
necessary for spending? If my income is steady at $10,000,000 a year, I have
money for projects, hospitals, and infrastructure. No growth, but I do have
money.

~~~
abbasaamer
Not sure I'd call myself financially literate, but I do have an MBA and
computer science degree for whatever that's worth.

The short answer to that is it's necessary to encourage people to invest.
$10,000,0000 is only a meaningful figure if it is spendable ... which means
that people want to receive that money and others want to spend it. In order
for someone with excess money to spend it, they need to be incentivized to do
so. If they get no return on their money, then why would they spend? If on the
other hand, they can grow their money by spending it, they will. That's why,
for example, a VC would take the risk of spending it on a startup (or someone
more risk averse would spend on bonds). If you're just stashing money under
your mattress, then the economy comes to a halt. For the most part, people
don't need $10,000,000 to live a happy life so the excess money they have will
not be spent unless there is a growth opportunity to use it.

Having said that, I agree with many others on here that "growth for the sake
of growth" is dangerous and I'd like to see more focus on happiness (rather
than money) and sustainability rather than growth. The growth spurt we had in
the 20th century is likely not going to be reproduced in this century (the
industrial revolution is a rare and unusual event). We need to find some way
to keep this world moving forward in a low growth era, but I don't necessarily
know how that will happen.

------
Animats
_“Lack of demand creates lack of supply.”_

Exactly. Americans are spent out. The US savings rate is near a low. Americans
are spending 95% of their income, and for the bottom 90%, it's more than
that.[1] About 1 in 7 Americans has trouble getting enough food.

What we're discovering is that, when it doesn't take that many people to make
all the stuff, the economy winds down to a state where most people are just
surviving. This is a new thing. Historically, the big problem was making
enough stuff. For millenia, society ran out of labor before it could make
enough stuff. We're past that. And we have no idea how to cope with this.

[1]
[https://fred.stlouisfed.org/series/PSAVERT](https://fred.stlouisfed.org/series/PSAVERT)

~~~
pilom
Sounds like we need to start spending globally. Massive infrastructure
spending in third world countries to encourage demand for our products.

~~~
hurricaneSlider
Um. No thanks.

Unless you're being sarcastic, the casual way in which this is being proposed
makes me very uncomfortable. That is imperialism in all but name. An example
of such a phenomena is that South Africa was forced to take on millions of
tons of American "waste" poultry. It hurts our economy and makes us policy
slaves. The IMF is another institution which has a long history of forcing
African countries to act counter to their best interests. We'd like to retain
some scraps of our sovereignty.

~~~
Sacho
> An example of such a phenomena is that South Africa was forced to take on
> millions of tons of American "waste" poultry.

I haven't heard of this. How was it forced to do so? Did the US threaten to
bomb South Africa unless South Africa buys its waste poultry?

~~~
hurricaneSlider
They way they do everything else. The threat of economic sanctions. Tit-for-
tat. Except that the US has the stronger hand

------
paulpauper
People have been saying this since 2009, yet the S&P 500 is up 250% since
then.

We need to put things in perspective.

The reality is:

The US has greater inflation-adjusted GDP growth than most of the world,
including much of Europe, the Middle East, and South America, and Japan
[http://i.imgur.com/SBqFqtt.jpg](http://i.imgur.com/SBqFqtt.jpg)

Profits & earnings for tech companies, payment processing, retail, and
consumer staples companies have far-outpaced GDP growth. A lot of the lag
comes from the chronically weak financial, commodity, and energy sector.

It's much harder to grow a large economy than a smaller one. There's
diminishing returns to scale. It's harder to grow an economy at the same rate
it was growing when it was 10x smaller.

2% real GDP growth, while slow, is still growth. Most people cannot perceive
the difference between 2% growth and 7% growth.

Real GDP is back to 2003 levels, and far fewer people were complaining about
slow growth back then

Slow growth doesn't preclude discovery and innovation, things like web 2.0,
smart phones, apps, theoretical physics, mathematics, uber, self-driving cars,
on-demand entertainment, etc.

So while more growth may desirable, 'slow growth' isn't too much to lose sleep
over.

A lot of ppl have mentioned the UBI, but it's worth reminding that the
effective income tax for the lowest 20-40% of earners is negative

~~~
lifty
Of course the S&P 500 has been growing, central banks are buying stocks left
and right. What's worth mentioning is that both governments and companies have
massively increased their debt during that period, so its really hard to judge
what the 250% S&P 500 growth means.

~~~
jganetsk
The S&P 500 growth means that companies are confident enough in their future
cash flow that they will borrow money against that to buyback their own stock.
This has been a trend since the 80s.

We are living in situation where, instead of competition driving profits down
to 0, or profits being used to finance investment and growth -- profits are
simply returned to shareholders. Low interest rates are only reinforcing this.
It's a great time to be a shareholder, and not a great time to be a consumer.

~~~
ericd
Alternatively, it means that executives that are mostly incentivized by short-
term stock price movements via option grants have found a way to juice their
compensation.

------
ting_bu_dung
it's interesting that the report mentioned the start of 2001 as the low GDP
growth for US and EU......but it's also around the same time that China joins
WTO.

For 15 years, jobs, communities and quality of goods were sacrificed in US and
europe for cheap, shoddy goods that were produced by laborers in China in
abysmal conditions, the rewards reaped by Chinese communist party insiders.

For 15 years, US and european companies outsourced their money and time to
China, only come to find out that by being short sighted to profit, they've
lost their trade secrets, technologies, know-hows, skills, market shares to
Chinese manufacturers and technology companies. They paid a big price to learn
that with the Chinese government, Only China wins. There's no win-win for
both. When dealing with Chinese government, you lose.

So we're at an interesting intersection in 2016. China's membership in WTO is
at its end this year. China is exposed as having an authoritarian regime that
is hiding trillions of debt and likely having a 0-2% gdp growth. It is exposed
as having an anti-foreign environment where companies like Uber, Wynn, Yum,
Apple are all suffering. What will happen?

~~~
ting_bu_dung
"“Made in China 2025” initiative, which aims to ensure Chinese-made components
and materials account for 70 percent of China’s manufacturing inputs by 2025."

[http://atimes.com/2016/07/us-warns-at-wto-of-china-
backslidi...](http://atimes.com/2016/07/us-warns-at-wto-of-china-backsliding-
on-economic-openness/)

US warns at WTO of China backsliding on economic openness

------
jackcosgrove
Using the Solow growth model, economic growth has three factors: population
growth, technological improvement, and financial savings. All three factors
are reducing growth in the developed world. Populations are stagnant or
declining, technology may be displacing more jobs than it creates, and we are
in more debt than ever.

So what is the root cause? Birth rates fell because of declining economic
prospects, and savings declined for the same reason as well. Alone among these
three factors, technology has continued its advancement, except now instead of
improving labor it is a substitute for labor.

There were other supply shocks, such as the oil crises and more importantly
the baby boom in developing countries that made outsourcing possible. But
those are transient factors in the long run.

In the long run technology stands alone as the disruptive factor. We can try
to mask the problem with financial debt or economic redistribution, but the
problem remains that unskilled labor is no longer needed, and skilled labor is
an increasingly high hurdle to clear.

~~~
collyw
Isn't immigration making up for the low birth rates? It seems to be here in
Europe.

~~~
jackcosgrove
Not if the immigrants are past school age and have not learned needed skills
in their home countries. Implicit in the population growth factor is education
and training that makes those new people marketable.

------
davidf18
The article speaks mostly of Macroeconomic forces such as increasing the money
supply.

The problems with the economy are mostly caused by microeconomic issues.
Politically induced scarcity ("economic rents") that results in higher prices,
externalities, and asymmetric information.

A very, very large problem is the use of zoning laws which reduce density and
overuse of historic landmark status which artificially increases land value
and hence the cost of renting apartments and buying houses. This results in a
transfer of income and wealth from people renting apartments and buying houses
to landlords.

Income that should be going towards purchasing goods and services and thus
stimulating the economy goes towards landlords instead. Removing the
politically induced artificial restriction on zoning would lower the cost of
housing and stimulate a housing boom.

This is the reason for the high cost of housing in NYC, SF, LA, Boston,
Washington DC and other cities.

In NYC, there is a limit of 13,000 taxi medallions which resulted in a
medallion market value of $1.2 million. After Uber/Lyft came along the value
dropped to $700,000 and not surprisingly the cost of taking Uber/Lyft has
decreased compared to taking a taxi. This makes it so that New Yorkers can
spend less income on taxis and taxi-like vehicles and more on goods and
services. Of course course, the "taxi medallion landlords" have lost big time,
because the political scarcity of medallions has been undermined.

Many occupations have unnecessary licenses or unreasonable licensing
requirements in order to create scarcity in that occupation creating
artificially high prices while keeping others who would like to work out of
the market.

Stop the "rent-seeking" of "economic rents" through Federal Laws and we'll
make sure the markets are more efficient a huge growth to the economy.

What is baffling, and perhaps others can comment is why the NYTimes is writing
economics columns without addressing the microeconomic inefficiencies which
includes "economic rents." Can't they find someone with a basic understanding
of economics to write an appropriate column?

------
jgord
Piketty argues, from extensive historical data, that the hi growth of the
1950s-1970s was unusual, and low growth is the norm.

So we might want to look at another aspect, such as how wealth is distributed
- the low growth rate tends to accentuate the accumulation of growth on
capital, so those who inherited a lot of wealth capture even more of it over
time, without having to do anything with that capital [ such as investing in
startups, building next gen transport systems ]. Which means we most likely
need a much more aggressive tax on uber-high incomes and uber-large
inheritance wealth.

[ Im not saying don't look at wealth creation technologies such as - nanoscale
3d printing, VR-work-from-home, asteroid-mining etc. ]

Reading Piketty's Capital is a bit like waking up in the matrix after taking
the red pill - the gradual torrent of facts hits you viscerally, because you
really had no idea things were this extreme.

As preparation, I recommend watching this short vid on wealth distribution -
[https://www.youtube.com/watch?v=QPKKQnijnsM](https://www.youtube.com/watch?v=QPKKQnijnsM)

~~~
Amygaz
Piketty is one of the rare to actually pinpoint the problem and call it like
it is. This NY Times article definitely does not, even if has some of the
elements. Even early on it writes: "This trend helps explain why incomes have
risen so slowly since the turn of the century". Maybe it is the other way
around. I mean, if our economy is based on increasing production for the sake
of increasing production, so by the same vain consumption needs to keep up,
but then people can't afford consuming, or whatever they are consuming wasn't
the result of value addition.

Then there is the CBO farce, and the use and abuse of GDP, and also believing
to know what other people actually wants to buy, while also omitting to
include what is it that 81% of the people with declining income can buy.

------
bsbechtel
I'm shocked to see no one here has even discussed over-regulation as an issue.
The more things you tell people they can't do, and instead mandate they do
things they may not want to or need to do, the less opportunity they have to
do things they want to do, which is what people generally are willing to pay
for (an thus increases economic growth).

~~~
bunderbunder
Interesting, then, that this slowdown should coincide so closely with a period
of increasing _de_ -regulation.

~~~
CountSessine
_should coincide so closely with a period of increasing de-regulation_

?

The last 16 years has seen little or no de-regulation. The last serious bout
of de-regulation that I can remember was back in the 80's when Reagan threw
out the rulebook on airlines or when the RBOCs were allowed to reconstitute
themselves.

~~~
bunderbunder
Yeah, it's true, the big stuff was all pretty much done by the end of the last
century. I'm aware, and I'm not worried about that. I assume no big regulatory
change is going to have immediate effects - companies take time to re-align,
especially ones in the kinds of mature industries that get to be heavily
regulated in the first place. So for my purposes it's good that this is the
case, since it means we've had enough time to sit back and observe what
happens.

So, on that front: We have this hypothesis that regulation is a huge drag on
the economy, and that we should therefore deregulate in order to stimulate
greater economic growth. If this is true, then you would expect that we'd see
the US economy to take off during or shortly after the bulk of the
deregulation. With that prediction in mind, go back and look at the graph of
GDP growth by year. In the three economies shown, de-regulation instead
coincides with periods of consistently declining or perennially weak growth.

Which, to me, suggests that it's not reasonable to be so confident about the
idea that regulation will have this or that profound effect on the overall
economy. The idea that regulation is a horrible drag doesn't seem to have much
of an empirical leg to stand on. I don't see much evidence that the opposite
is true, either. The two regions that entered the graph with higher growth
were also just exiting a period of rebuilding and recovery following a very
destructive war, for example, so it's tough to say the pattern you see for
them isn't a reflection of outside factors.

------
Mz
I get paid to write online. The things I write are typically intended to be
published somewhere online. I rarely read paper books or magazines, yet I
consume information all day. When a system is infused with information, it
often can accomplish the same thing -- or something better/more -- with less
material matter.

I think no one is measuring any of that. The fact that I can do freelance work
online means I can earn less (gross) and keep more of it (net) because I do
not need a car to get to work or clothes to meet dress code, etc. So, I am
seeing real gains in my quality of life -- paying down debt, eating better,
better health etc -- than I could achieve when I had a corporate job. The
"overhead" for having a corporate job meant that by the time I quit, I was far
deeper in debt than when I got the job. It was a frustrating, frightening way
to live. Now, the money I earn is net gain, not "Oh, my god, I can't eat
without a job, but having a job has me barreling towards bankruptcy!"

~~~
ArkyBeagle
This. The disconnect from "having a real job" and working is spreading. The
corporate sector seems to be rapidly declining in exactly this way.

In my most recent gig, having to be onsite was a huge drain on productivity.
It really needed to be roughly 10% of my time. I stayed way ahead of my job
mainly by doing stuff at home - just the moronic network filters alone meant I
had ... 10x the bandwidth available.

But onsite was still required.

I have two kids around 30 or so; neither has an onsite corporate fulltime job.

------
tbihl
In first generation post-WW2, we built out productive infrastructure, and
started to do so with our savings. In the second generation, we expanded with
debt spending and started to increase consumer debt. Now, most well-educated
new entrants to the market have already taken more debt than they have an
appetite for, so they're saving to pay down that debt. There may be quite a
few who are still doing frivolous things with their money that could go to
service the debt, but in the end we're all paying off activity that already
happened, to one extent or another.

~~~
ThrustVectoring
This is entirely due to the baby-boomer demographic changes. Saving on a
generational and national scale is basically impossible: things you make today
are going to break down, wear out, or become obsolete thirty years from now.
The only way the retiring generation can receive care is by obligating or
mandating younger workers to pay for it.

This is the core of why college is pushed so hard, why home ownership is
pushed so hard, and why interest rates are so low. The baby-boomers need to
have someone paying back debt thirty years from now, so there's a ton of money
sloshing around trying to fund current consumption.

~~~
chrisdbaldwin
"things you make today are going to break down, wear out, or become obsolete
thirty years from now."

Planned obsolescence started not too long ago and everything now needs
replacing much earlier than thirty years. We can see its inefficiency in every
industries generated from this money printing scheme. Turning what once was
considered permanent and high quality will now break and need replacing.

Everybody is doing it, and it's hard to stop, but it probably should stop.

[https://www.youtube.com/watch?v=-1j0XDGIsUg](https://www.youtube.com/watch?v=-1j0XDGIsUg)

~~~
tbihl
I guess the flip side of this is that we can have access to so many things, so
affordably. I don't need an industrial-grade waffle iron, but it's kind of fun
to have for the occasional weekend if I've got space.

Having said that, I tend to avoid that side. If I have to buy something, I
tend to do a buy-it-for-life type of purchase. This drives my fiancee crazy,
as I spend 50% more money and 500% more time making my purchase. Most of the
time it's not even about the money; I just get upset when I have tons of
trash, so I try to avoid buying things that make or become trash.

~~~
gregpilling
and this is the niche manufacturing opportunity of the future.

I have a friend living it right now - he makes buy-it-for-your-grandkids-lives
tools and sells direct via the internet to his end user. His end user is in a
particular niche and my friend is an expert in it.

His stuff is expensive, niche, and his marketing consists of crappy phone
videos on Facebook. He is authentic however, his stuff is super high quality,
and he gives great customer service. His business has been growing at 30% a
year thanks to the internet allowing him to reach the few people that care
about his niche. He will surpass $1M in gross sales with a high net margin,
and he has zero competitors in his micro niche - a million dollar micro niche.

And its truly micro - 200 units per year of the $800 piece of equipment, and
the rest of the sales in the 14,000 accessories he has for the equipment. He
is doing quite a bit better than a well paid SV engineer and is direct to
10,000 consumers. His moat is impenetrable.

------
Ben-G
I think there are multiple interesting factors at play here: most importantly
downward pressure on prices (brought by technology) and the unequal
distribution of wealth/income.

Technology has made a lot of stuff far cheaper than it used to be. Instead of
buying a photo camera, a video recorder a tape recorder, etc. you can buy a
smartphone for the price of one of these individual items (at 1980/90
inflation adjusted prices).

A lot of services we consume have become a lot cheaper as well. Compare
Netflix & Spotify for a few $ months to buying individual movies & CDs. A lot
of people spend their free time on Youtube/Facebook/Reddit essentially
spending nothing at all.

A lot of younger people living in cities are no longer purchasing cars or
homes. Overall travel has become a lot cheaper as well. IKEA has commoditized
furniture which used to be extremely expensive a few decades ago.

Cheaper prices mean lower spending & lower GDP.

At the same time a smaller group of large companies is capturing the profits
in the low cost sectors (again IKEA, Netflix, Google, Facebook). These
companies are making huge profits per employee and they are facing very little
successful competition.

A majority of the middle class (that doesn't work for any of these highly
profitable companies) has very limited free cash flow, due to the rising cost
of housing and education and the stagnation of wages. They can't afford to
purchase expensive homes, expensive furniture or expensive cars.

More wealth is going to the highest earners, where each additional $
contributes a lot less to GDP than it would in the hands of a middle class
household.

\---

I'm throwing a lot of stuff together here, but this is what I'm missing from
most discussions about the economy: try to describe trends with the concrete
situation at hand rather than with generic theories that have been around for
decades yet have mostly failed to predict the economic outlook correctly (it
seems like the rise of behavioral economics could help here)

------
tim333
A lot of it seems insufficient demand after asset bubbles. Houses or whatever
keep going up for a while, people mortgage themselves to the hilt to buy and
when the bubble pops cut back spending to pay off the debts over the following
decade or three. That leads to less spending jobs tax revenue and so on.

The solution I think should be something like governments borrowing money at
the near zero rates we have at the moment and doing stuff like investing in
infrastructure and things that will boost spending. When you get back to too
much money chasing too few goods and inflation they can back off but we're way
off that point in most economies at the moment.

~~~
dilemma
>The solution I think should be something like governments borrowing money at
the near zero rates we have at the moment and doing stuff like investing in
infrastructure and things that will boost spending. When you get back to too
much money chasing too few goods and inflation they can back off but we're way
off that point in most economies at the moment.

This is a popular idea but the problem is that in practice the cutting back
never happens, so you end up with government policy together with central bank
interest rates causing deeper recessions, or even creating the depressions
they were intended to prevent.

------
apatters
Is it possible that some things are just a lot cheaper than they used to be,
and from a macro perspective focused totally on dollar figures this looks like
shrinkage?

I used to drive to the bookstore and spend $22 on a brand new hardcover book
because it was written by a famous author and promoted heavily at the
bookstore.

Now I might buy a Humble eBook Bundle and pay $8 for 8 books, and the car, the
bookstore, and the big advertising campaign are all long gone (but for the
most part, not missed).

There's very little out there I _want_ to spend a lot of money on (travel is
the main exception).

And growth is mainly driven by wants, not needs.

------
fsloth
I believe there are efficincies in the marketplace that are not captured in
the financial data - everything in my daily life is much easier now that I
have a smartphone in my pocket and everything is online. Maybe the fact that
everything is more efficient means one can get more value with less - thus,
making the daily consumer effectively better off although the capital is hurt.
What does this mean for the economy in total? Everything except truly
constrained things like land are utterly commoditized?

~~~
fsloth
To elaborate - we measure the price of the big mac, but put no price a)
finding the big mac b) finding the cheapest bigmac (both of a and b are
easier, but there is no way for the McBurger chain to capture the value of
this) c) discovering bigmacs are actually bad for you, abstaining from them
and saving a ton in healthcare costs later on, and also living longer (thus,
consuming and producing more over ones lifespan).

~~~
Barrin92
It makes sense to not measure those things because they don't increase our
overall happiness or productivity.

You can't live off imgur cat pictures or spreadsheets about big mac nutrition.
If that were the case the Western populations would be as happy as they were
never before. People need a house, an occupation that gives meaning to their
lives, the right to political participation and shape their everyday
experiences. These things are currently under a lot of fire and it won't go
away by appeasing the population with Netflix.

It's really not that much of a mystery, if a whole segment of the population
is robbed of these opportunities it's going to get ugly.

~~~
fsloth
"It makes sense to not measure those things because they don't increase our
overall happiness or productivity."

I disagree. The accessibility of everything nowadays reduces the opportunities
for frustration very often (i.e I don't need to queue at a bank at my lunch
hour except in very special circumstances). Thus - more happiness.

"You can't live off imgur cat pictures or spreadsheets about big mac
nutrition."

No, my comment was not about the internet alone. It was about the secondary
effects accessibility of information has on daily life in the strictly
physical domain.

"People need a house, an occupation that gives meaning to their lives, the
right to political participation and shape their everyday experiences."

Yes, I agree. The human life is very shallow without the joy of self-
expression. I was not suggesting smartphones connected to internet will
replace life. My comment was about the fact how they reduce the tedious, non-
productive segments of life.

------
danieltillett
When you get to a 70% service sector of course growth is going to be low [1].
Waiters aren’t anymore efficient than they were 100 years ago (probably less)
and the same applies to nearly every service industry. Without improvements in
unit labor costs then the economy can't grow per capita.

1\.
[http://data.worldbank.org/indicator/NV.SRV.TETC.ZS](http://data.worldbank.org/indicator/NV.SRV.TETC.ZS)

------
smallnamespace
Note that very long run GDP per capita growth is driven more or less by
technological change, and there's _no reason to expect that technological
change is constant._

Major technological innovations are often discrete, their impact can take
decades to be fully realized in the economy, and the timing of the next major
innovation is unpredictable.

~~~
ArkyBeagle
There is a great deal of grumbling, dour dissent with any sort of
technological change outside of the tech sector - aka the "true believers".
I'd stop short of calling it Luddism but it's like that.

I've presented far too many solutions to non-specialists who stared in
unblinking misunderstanding at these solutions to think otherwise.

------
YZF
I'm more amazed we had the high growth we've had in the past. Why would the
steady-state of such a complex worldwide system be at a point where we have
good employment, rising standard of living, growing populations, relative
peace? There are so many other local minima which we've managed to hit over
man kind history...

The key word is sustainability. Without it something has to give. It should be
obvious that given finite resources on this planet we can't continue expanding
our population and the standard of living indefinitely. The reason the
trajectory we were on could not continue is that it was not sustainable. We
can't have more people in the world, every such person living in a McMansion,
with two cars in the garage, buying new gadgets all the time. And really why?
Wouldn't it be better to have a contracting population that consumes less?

Humanity would be better off trying to reduce the population size, reduce
consumption ($ and resources), maximizing the utility/$ of goods rather than
the absolute $ of crappy goods sold. Aiming for more equal distribution of
wealth. Less conflicts. Social security (so sure, basic income but not as a
catalyst of growth). Everyone should work less hours and earn enough to
sustain themselves with a reasonable standard of living. So this is all
perhaps a deflationary, negative growth, environment.

~~~
didibus
Agree wholeheartedly. Sustainability is key. The last generations were raised
being told that success is growth, I hope the next generation will be raised
knowing that success is sustainability.

------
boulos
People complaining that UBI wouldn't help are missing an important point. In
the US, and most of the world, we have a demand problem not a supply problem.
The UBI "plan" then is to bump up the wealth of those that would essentially
immediately consume it, which generates demand. It's not controversial to
argue that an extra $1000 a year to a millionaire will just end up being
reinvested, while most Americans (the bottom 50%+1) would easily spend it all
sloshing it back into the economy.

~~~
WillPostForFood
Then that's not going to result in much good. To grow the economy, you want
investment, not people funneling a free $!000 to China for some cheap consumer
goods.

~~~
MarkPNeyer
> you want investment

In what?

A company that sells goods to consumers who can't buy it?

Those aren't doing any good.

There are mountains of cash right now, all seeking investment. They have
trouble finding anything worth investing in. This is why we see massive
valuations - with zero interest rates, a tiny revenue stream is worth a huge
amount of cash.

------
jack9
> The United States is adding jobs at a healthy clip, as a new report showed
> Friday, and the unemployment rate is relatively low

One of those isn't true and the other is misleading. Healthy would be
something to combat the massive existing unemployment. Unemployment Rate has
little to do with growth. Let's not talk at all about how GDP numbers are
being manipulated quarter after quarter and the endless easing putting us in a
freefall, since that news is inconvenient for the administration who did it
(Clinton then Obama...hmmm). The republicans just continue existing policies
anyway so it's self-serving Fed shenanigans as usual. Typical vacuous NYT
narrative is what I got out of it.

------
maxander
> Like most things in economics, the slowdown boils down to supply and demand:
> the ability of the global economy to produce goods and services, and the
> desire of consumers and businesses to buy them. What’s worrisome is that
> weakness in global supply and demand seems to be pushing each other in a
> vicious circle.

This is the sort of thing that makes people think economists live on a
different planet. "Demand," in particular the "desire of consumers and
individuals" for things, is something we have in spades- for a good example,
walk down a main street of any city and you'll find some people who
desparately want to stop being homeless. The problem, and on a more general
scale this is the whole problem of our kind of economy, is that _their demand
doesn 't matter._

These homeless people could, in many cases, work- they could do things that
generate more value than they require in exchange to live decent lives. But
their kind of work is ubiquitous, and they have no control over the market for
it; as a result, the market has been manipulated by much more savvy actors to
shift that labor market against them. Once this happens to a kind of laborer,
an entire segment of "demand" is functionally removed from the economy.

The answer to that sort of thing has been known for ages- unions, substantial
minimum wages, perhaps even basic income. But while the article talks about
the kind of economic inequality that these measures combat, it does an
impressive job of not putting two and two together. Economic stagnation and
inequality are two sides of the same coin, but no one talks about this-
because the managers of the economy are, predictably, wealthy, and have
everything to lose to redistribution of wealth.

------
jganetsk
It seems that a potential solution to this, as various economists have
proposed, is "helicopter money". In other words, have the central bank print
money and distribute it to the people. The main criticism for this is that it
is irreversible -- there would be no asset to balance the liability on the
Fed's balance sheet. But this is an extremely simple problem to solve:
monetize government debt. In that case, we would no longer call it "helicopter
money", and recognize it for what it is: basic income. Despite all its flaws,
basic income inspires a wide variety of Internet discussions about social
justice and robots (as if automation is something that just started happening
now, and not at the beginning of the 18th century) but ultimately it can be
understood as a tool of monetary policy. And if you manage to hand people free
money and yet the economy STILL doesn't grow, and inflation STILL doesn't rear
it's head -- guess what? That's a GOOD thing. That's called... utopia. So
maybe we should stop caring about GDP, and measure progress with a different
metric: how much basic income can our country stably generate?

~~~
formula1
If companies and service providers know that an individual canpay $50 more.
What insentive do they have to keep costs low? As it stands the price of
living is absurd. Free money would only provide excuses for higher charges.
GDP can be increased by making people buy more but is that really the
solution?

As it stands we have a ton of communities that are not sustainable and end up
a net loss. Where Mcdollars have value. The issue with these communities is
that they cannot produce their own food, materials for housing or clothes and
once factories leave they export nothing. If you want higher gdp, making
sustainable communitiesis far better than printing free money. One makes more
areas attractive to live tge other makes the average citizen have umbilical
cord connected to the central bank

~~~
susan_hall
jganetsk had already answered your question, you simply have to read what they
wrote. Anticipating a question like "What insentive do they have to keep costs
low?" they answered before you wrote, when they wrote: "And if you manage to
hand people free money and yet the economy STILL doesn't grow, and inflation
STILL doesn't rear it's head -- guess what? That's a GOOD thing."

Put differently, the government should print money until inflation appears.
This is what Keynesian economists have been recommending since 2008, yet most
Western governments went in the opposite direction and engaged in long bouts
of austerity.

~~~
jlj
The US has been buying bad debt with borrowed money (QE). There is so much
cash in circulation that the banks don't know what to do with it.

"So no, the Fed is not printing money. In fact, the Fed is doing much worse
than that. In allocating $4 trillion borrowed from banks, it’s supporting the
very government spending and housing consumption that got us into trouble to
begin with. More to the point, the Fed is financing ongoing economic hardship
through its expanded borrowing of bank reserves."

[http://www.forbes.com/sites/johntamny/2014/03/09/the-fed-
is-...](http://www.forbes.com/sites/johntamny/2014/03/09/the-fed-is-not-
printing-money-its-doing-something-much-worse/#76f682db43a1)

~~~
susan_hall
This idea has been disproven hundreds of times. It is a zombie idea -- no
matter how many times it is killed, it just keeps shambling along.

Also, the context here was helicopter money -- sending money to people, not
banks.

------
oldbuzzard
The Center for Economic Policy Research has a great free pdf ebook on Secular
Stagnation from 2014 which has essays from a variety of economic heavyweights
discussing the possibility of lower growth going forward.

[http://voxeu.org/content/secular-stagnation-facts-causes-
and...](http://voxeu.org/content/secular-stagnation-facts-causes-and-cures)

------
pastProlog
There are two ways producing widgets can grow 10%.

The standard way is where production methods stay the same, and 10% more
offices/factories are added and 10% more workers are added. The reason this
would be done is because there was a 10% growth in demand for widgets. This
would be due to a 10% growth in population that could afford widgets, or a 10%
growth in income for consumers/workers that they decide to spend on widgets.

With population growth shrinking in the standard consumer societies, that
aspect goes out. Insofar as income, the average US inflation-adjusted hourly
wage today is below what it was 43 years ago - it has shrunk. So the demand is
not really increasing. Since demand for widgets in general is not going up,
companies are not desperate to employ the average worker, and thus wages are
stagnant (or as I said, the average US inflation-adjusted hourly wage has
shrunk over the past 43 years).

When were companies investing the capital necessary for automation,
technological improvement etc.? From the 1940s to the 1960s. When demand was
high due to increased population (baby boom). There was a baby boom because
after a long depression, the economy started paying good wages to the average
worker due to strong unions and government stimulus starting heavily during
World War II. Money in workers/consumers pockets led to increased consumer
demand.

Due to the highest unionization rate in American history after World War II
you have high wages at these growing companies. How to lower costs? Invest in
automation, invest in technological improvement.

Without high wages, and some of the other factors mentioned, the financial
impetus to invest in technological improvement and automation fades. It's
always there, but it ebbs in the absence of high demand, high wage employees.

------
ryanmarsh
> 81 percent of the United States population is in an income bracket with flat
> or declining income over the last decade. That number was 97 percent in
> Italy, 70 percent in Britain, and 63 percent in France.

Ok so growth slowed in the West, but weren't a lot of people brought into the
middle class in the East?

> It argued that the internet would not have the same transformative impact on
> how much economic output would emerge from an hour of human labor as 20th-
> century innovations like electricity, air transport and indoor plumbing did.

There's lots of back office automation going on in the Fortune 500 that is
eliminating white collar labor. I seriously doubt these statements about
productivity. If its productivity per capita they want then just wait until
self driving trucks wipe out millions of jobs.

Am I missing something here? Isn't this basically what happens when labor (the
jobs I mean) moves somewhere else and automation eats away at whatever is
left?

------
mac01021
I'm hearing lots about this low-growth economy from various major news
sources, but it doesn't seem to me to be consistent with the data that I can
look up on my own.

For example, the chart here seems to me to show regular traditional reasonbly-
fast growth rates.([http://www.statista.com/statistics/188105/annual-gdp-of-
the-...](http://www.statista.com/statistics/188105/annual-gdp-of-the-united-
states-since-1990/))

If you look at a 20-year plot of the S&P 500 (not the same thing as the GDP, I
know, but still some kind of indicator of economic health) the net growth
probably is low, but only because of the giant housing crash that causes a
rapid setback right in the middle of the time period we're measuring. It looks
like we've been growing at full speed ever since.

So what's the deal?

~~~
somethingsimple
> It looks like we've been growing at full speed ever since.

S&P 500 valuations after the crisis are out of touch with reality. Look here:
[http://www.multpl.com/shiller-pe/](http://www.multpl.com/shiller-pe/). The
stock market is incredibly overpriced i.e. companies' earnings aren't growing
as much as people and institutions are buying stocks, driving their prices up.
The reason for the bull market is that with near zero interest rates, everyone
is looking for an investment vehicle that offers better inflation-adjusted
returns than cash and bonds, even if it means taking more risk.

------
tomjen3
There are a lot of calls in these comments for basic income, or schemes like
it. But that is just redistributing existing wealth, not creating new growth,
which is exactly the problem we have. You have to produce things before they
can be consumed, and this is also the case with economics.

~~~
mindslight
UBI is even worse than redistributing existing wealth. It is a simplistic plan
to throw more fuel on the monthly-rent fire, ignoring that price feedback will
eagerly consume it.

I had been wondering why it had quickly gained mainstream popularity, but then
I realized it is simply the latest way central banksters can conjure money to
have it collected by their cronies.

What we need is an end to this many-decades regressive policy of forcing
inflation, so that a middle class is once again able to save and thereby gain
economic security and bargaining power.

~~~
imtringued
A lot of people move to the city because that's where the jobs are. If the job
is no longer the primary motivation to choose their location then they would
go into a low cost city and decrease the pressure on the housing market of the
high cost city.

Oh and inflation is already very low.

~~~
mindslight
Yes, many people will move to rural areas where a lack of competition for land
will keep housing prices down. So BI will be good general welfare program for
those rural lower-paced areas.

But if one wants much income beyond the BI, they'll still be lured cities for
their economic opportunities. Housing competition will still exist there, and
thus we'd expect housing prices to stay in line with what people can afford by
rising. So the economic divide between the rural poor and urban rat racers
will actually _increase_.

I think much the interest in BI comes from urban rat racers frustrated with
making rent, wishing for a relief from that pressure so they could take time
off. But simplistically adding money to the situation will have the opposite
effect of what they want, just as how college loans fucked up college tuition.

------
bjornsing
I think it partly has to do with how we measure growth (i.e. GDP). For
example, try using a laptop and a mobile phone from 2001 for a week or so. How
does that feel? No growth, ehu? ;P

Another aspect I think is how much "non-monetized" value the Internet is
creating. What would you pay for access to an Internet search engine (like
Google or one of it's competitors), if you really had to? Going without is
just not an option, but the price still hovers around zero.

That brings us to yet another aspect; the Internet puts a huge downward
pressure on all (comparable) prices. I think this is a major factor behind the
lack of inflation: hiking prices is just not possible the way it used to be.

~~~
danieltillett
This is taken into account in the GDP deflator (i.e. inflation).

------
acd
It would be interesting to analyze central bank interest rate vs inflation and
test for R2 r-squared errors.

[http://www.zerohedge.com/news/2016-07-05/central-bank-
death-...](http://www.zerohedge.com/news/2016-07-05/central-bank-death-cross)

[https://www.imf.org/external/np/pp/eng/2013/041813a.pdf](https://www.imf.org/external/np/pp/eng/2013/041813a.pdf)

There might be diminishing return for every new credit money created which in
turn leads to lower growth.

It is also not certain that low interest rates will lead to inflation. If you
were a big company and suddenly got a lot of cheap credit. Would you A)
increase the wages of your workers or B) invest in cheaper production through
automation? What does choice A) or B) yield for consumer prices, do they go up
or down?

~~~
jganetsk
You would do neither. Instead, you would do C) borrow to buyback stock.

[http://www.wsj.com/articles/share-buybacks-the-bill-is-
comin...](http://www.wsj.com/articles/share-buybacks-the-bill-is-coming-
due-1456685173)

------
rm_-rf_slash
I often see articles like these result in a broad call for a universal basic
income. The reasons are simple: it doesn't dictate what you should or should
not spend your money on; it provides a standard-of-living floor; it balances
out the inequalities of a globalized and increasingly automated world.

I have a different proposal: instead of guaranteeing basic income, guarantee
broad access to basic services.

Off the top of my head, I see five basic services anybody in an industrialized
society ought to have provided for them: food/water, shelter, transportation,
health care, electricity/information. If these needs can be met cheaply
enough, then we won't need a guaranteed income. The basics are cheap enough
and if you want a higher standard of living, you can work towards it, but in a
market society there are winners and there are losers, and at least under the
guaranteed service mechanism, the losers aren't mired in poverty.

In the short term, food/water and electricity/information are nearly cheap
enough to be universal. We just don't choose to provide it in a low-tax
society.

Medium term, health care costs can be reduced through automated diagnosis and
operations. Some automated surgeons exist today and there was a recent report
that IBM's Watson was able to correctly diagnose patients.

Long term issue will be shelter and transportation. Even with self-driving
automobiles, providing shelter for everybody will require a delicate balance
between dense urban housing (which is currently in high demand and very
expensive) and suburban sprawl (which is harmful to the environment and
requires vast and expensive infrastructure like roads and water).

By investing heavily in an ultra-low-cost society, governments can ensure all
people have access to the services they need, while refraining from
redistribution-via-taxation, which, while good in intentions, dents the very
growth and ROI necessary to make these big investments.

~~~
morgante
Are you proposing the the government directly provide these services? No
thanks. You're providing an alternative to UBI without providing any
explanation of why it would be superior, while ignoring the very real impact
which competition has on lowering costs and increasing quality.

What is the benefit of that? Generally, government services are inferior to
those provided by the market. Just take a sample of public housing or
government cheese to see why having the government provision services is
suboptimal.

If the government wants to get into these businesses, it should do so as a
non-profit corporation directly competing with private sector alternatives.
Then we can see if government cheese is actually more desirable than private
alternatives.

> in a market society there are winners and there are losers, and at least
> under the guaranteed service mechanism, the losers aren't mired in poverty.

UBI would be a market solution and could still prevent losers. Poverty
reduction and personal choice are not mutually exclusive.

What you're proposing has been tried before and failed.

~~~
contingencies
_the very real impact which competition has on lowering costs and increasing
quality._

Oh please, what fallacy. Here on HN you have neoliberal truisms like this
being repeated, at the same time as articles about celebrated icons of
American capitalism clearly stating that in business they always seek to
establish monopolies and that competition is for losers.

As an example of how fallacious this line of bullshit is, look at what
privatization and 'competition' did to Australian telecommunications
(instantly bought by foreigners, now a national security threat... some of the
most expensive internet in the western world... metered downloads in 2016...
new government program to fund infrastructure is broken down in to a
government-pays, private-industry profits model... fiber is virtually unheard
of, and is exceptionally difficult to acquire even eg. for a relative who
lives right opposite the Sydney Opera House in central Sydney!) Whereas, here
in China everyone can have fiber and a flat screen and a mobile phone for
almost nothing, and they had no infrastructure at all 20 years ago.

~~~
morgante
> Here on HN you have neoliberal truisms like this being repeated, at the same
> time as articles about celebrated icons of American capitalism clearly
> stating that in business they always seek to establish monopolies and that
> competition is for losers.

The fact that you don't understand how those are literally two sides of the
same coin shows how limited your understanding of economics is. Competition
driving down prices is _precisely_ why as a businessman I want to avoid it and
establish a monopoly.

Since you lack even the critical thinking skills or economic understanding to
see how monopoly benefiting businesses and hurting consumers is entirely self-
consistent, it's not really worth arguing with you much more.

I'll just point out that we have numerous examples of competition benefiting
consumers. For example, airline deregulation has led to a sharp reduction in
ticket prices.

In the unfortunate cases where supposed "privatization" has had ill effects,
if you look below the surface it's usually the case that the underlying market
is anything but free. For example, internet service where only incumbent
providers are allowed to offer operate and new entrants are barred from
entrance while costs are subsidized by taxpayers. I suspect that the
Australian telecommunications industry falls into that category.

~~~
contingencies
_two sides of the same coin_

Actually, I was describing the progression from government run to "competition
wins!" to commercial actors to commercial actors barring competition. Net
result: effectively replaced something government owned (accountable to
people, non-profit motive) with something privately operated (accountable to
investors, sole profit motive). But you seem to have missed that, instead
spending three paragraphs attacking your perception of my person.

~~~
morgante
Where is this eloquent description of that? All you did was try to imply that
monopoly-seeking and competition are incompatible.

Incentives are fundamental to human behavior. Corporations will automatically
try to seek a monopoly position, but if the government isn't involved they can
only maintain it until a superior alternative is created (see: Facebook
supplanting MySpace).

------
mrleinad
"As a matter of arithmetic, the slowdown in growth has two potential
components: people working fewer hours, and less economic output being
generated for each hour of labor. Both have contributed to the economy’s
underperformance."

Really? So it's basically the workers fault because they're lazy?

------
spinchange
I'm still trying to find the time to complete Piketty's Capital, but one thing
that I was surprised to learn from it thus far is that global population
growth has a much greater impact on GDP growth than you might think. I'm loath
to leave a comment like this without citing some of his data (not at my
disposal, atm) but if I recall correctly, it's like more than half of GDP
growth (roughly). As global population growth slows, and it is, invariably
economic growth is going to slow down. It sounds like a common sense thing,
but the numbers Piketty put on it were very surprising.

------
nxzero
Real issue is that humanity's ability to exceed technology is limited. Even if
humanity was to conserve more resources and invest more, majority of value and
effort would be to increase the rate of returns from technology.

~~~
ArkyBeagle
Technology ( as the term is widely used ) is the principal mechanism by which
resources are conserved.

~~~
toasterlovin
Do you consoder economies of scale a technology? I ask because it seems to me
that economies of scale in manufacturing and agriculture have been a huge
driver in producing more with less inputs (especially labor inputs).

~~~
ArkyBeagle
Economy of scale is a specialization of logistics, so yeah.

Gears or transistors are not required for something to be a technology; a
technology is just a bundle of techniques.

------
bogomipz
We got not in a small part by China having double digit growth in GDP for well
more than a decade, this or course is no longer the case. Double digit growth
is not sustainable. The fact that it went on for as long as it did was an
anomaly. Also double digit growth is something that while not sustainable is
also maybe something that might not be desirable either. I would recommend
this read on the subject:

[http://hbswk.hbs.edu/item/the-curse-of-double-digit-
growth](http://hbswk.hbs.edu/item/the-curse-of-double-digit-growth)

------
ilaksh
Because we are focusing more and more on sustainability, which means more
conservation, less consumption all around, and therefore low growth.

Beyond that, the entire foundation of economics is flawed. Computer scientists
and software engineers should seriously examine the underlying assumptions of
economics and revise them to be in line with technical reality.

Money is a technology. Think about the design from first principles. If you
are an economist, you probably can't do that, because the design is fixed in
your mind and first principles aren't known or considered unchangeable.

------
pessimizer
The financial industry and elites sucking up all of the capital and holding
it, while heavily lobbying to maintain a low-tax environment and to prevent
governments from spending on infrastructure and lifestyle improvements for the
general population, although they generally are borrowing at near zero or
negative interest rates. This results in insufficient demand and secular
stagnation. No investment = no growth.

Luxury goods and services are doing well, though.

Also, the United States is not adding jobs at a healthy clip; the jobs are
worse and the prime-age (25-54) employment rate has only retraced halfway
since the stock crash _nearly 10 years ago_. The US intentionally pushes a
strange number for joblessness that drops people from being counted, and can
be adjusted through legislation lengthening and then reducing the period
during which unemployment benefits can be collected. The rate jobs are being
added would be fine for an economy not recovering from a crash. This is not
that economy.

1) 15 years ago marks the crashing of the dotcom bubble, which was used to
recover from the recession of the early 90s, which was caused by Reagan
ruining the country. So, IMO the way to view it is that Reagan destroys the
working class and causes it to live on credit and prayer while cutting
infrastructure spending and lowering taxes on the rich. The best thing he does
is spend an enormous amount on the military and other welfare for the rich,
which creates some sort of replacement demand, although he finances it by
driving the national debt into the stratosphere.

2) Clinton deregulates everything, ends welfare as we know it, and encourages
a bubble in stocks. A bubble is not a boom - a bubble is a time when people
take out loans with collateral that is on fire. During this, he raises taxes,
which shifts the Reagan debt to personal debt. The stock bubble crashes as
soon as he leaves, and what seemed to be a reasonable amount of debt for the
working class to carry became a crushing amount of debt.

3) Then Bush encourages another bubble to save the economy, and it's in
houses, an asset that is spread widely among the working class. They mortgage
those houses to pay off their debt, and many get to buy some stuff. Bush
immediately starts spending again like a maniac in the Reagan model, with an
administration consisting largely of exactly the same people: wars on multiple
fronts, welfare and tax cuts for the rich, and massive government contracts
for insiders.

4) The bubble crashes as Bush leaves, and Obama comes in with a mandate for a
massive national veer to the left, wastes most of it on an inadequate
healthcare program of right-wing origin that is very nearly a no-op, and in
almost every other way is continuity to the Bush administration. He freezes
government spending in the lowest interest rate environment in history, and
fills the demand hole by handing free money to wealthy people through the
bailouts and QE, shifting all of that public debt partially to private
working/middle class debt.

5) The rest of that free money has nowhere to go, due to the previously
mentioned historically low interest rates, and in addition the tailing off of
the marginal return on further investments in technology and industries based
on the invention of the transistor, so it ends up in a combination of
traditional large industry/natural resource extraction, banks (betting on a
repeat of the experience of the bursting of the property bubble, where banks
failing from intentionally taking on irrational risk was rewarded by direct,
open payments of cash and grants of credit), and tech companies in-name-only,
where service companies use the internet in place of phones (as in the
original dotcom bubble where they were used in place of mail-order catalogs),
or where the actual profits were made in services for B2B, such as advertising
or computing infrastructure (the kind of stuff that large
industries/finance/fake-tech-companies can park all of their cash in.)

tl;dr it's just kleptocracy.

Majorities of the youth and the marginalized now openly despise government,
and have made this election cycle the scariest one we'll see until the
midterms which will be the scariest one until the next presidential election.
This "low-growth world" is the closest thing we're going to get to a bubble in
this financial cycle, since the working/lower-middle classes are seeing
absolutely no benefit from QE and the bank bailouts (unlike dotcom and the
property bubble.) The only place to fall is open rebellion, tribal violence,
and the aimless violence of suicide, mass shootings, and property crime.

/rant (sorry)

~~~
refurb
_15 years ago marks the crashing of the dotcom bubble, which was used to
recover from the recession of the early 90s, which was caused by Reagan
ruining the country._

I couldn't disagree more. The US economy was crap through most of the 1970's.
The 1980's was one of the strongest periods of growth in the US for a long
time. And the growth in wages was across all income quintiles. In fact, the
runaway growth for the top income brackets started to take off in the
1990s.[1]

[1][http://www.advisorperspectives.com/dshort/updates/Household-...](http://www.advisorperspectives.com/dshort/updates/Household-
Income-Distribution.php)

~~~
pessimizer
The 80s weren't a strong period for investment, they were a strong period of
deficit defense spending and tax cuts, which were stimulative. When that
became unsustainable, the bottom dropped out of the economy. The history of
the presidency since Reagan has been continuous giveaways to the wealthy
financed by credit taken out by the middle class on phantom assets that vanish
into thin air as the president exits. The way the Reagan era was different was
that the asset was American world hegemony as a hedge against the eternal
threat of Russia (which collapsed partially because it couldn't spend as fast
as we could in Afghanistan.)

(Also, according to every graph on the page you linked, the incomes of the top
5% started their climb in 1981, dipped in 1989, recovered to the 1981 trend in
1993, and maintained it steadily until 2001. I don't know how you're reading
that differently. After 2001, even the incomes of the top 5% are stagnant, and
the important groups become the top 1% and the top 0.1%.)

------
EGreg
Low growth is sustainable! Rampant consumerism and the drive by corporations
to move money faster and faster by changing resources to garbage is a drug
that needs to be stamped out. The addiction to population growth just to fund
social security schemes is similar. Societies can get addicted too.

Now we just have to figure out how to weather the human->robot worker
transition smoothly.

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arekkas
"Growth" is really just cheap oil ("energy prices"). As this is an obvious
path to imminent doom, energy prices go up and thus growth diminishes.
Cheap(-er) energy is what's keeping the States ahead of the EU too.

The world isn't black and white, mostly. Sometimes there is an easy
explanation to things though.

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karma_vaccum123
In addition to the other good observations..."quarterly capitalism" has
reduced risk appetite.

Furthermore, we live in a very regulated world. Rules can be beneficial but
tend to also slow progress

------
stuaxo
It's the rising inequality silly! All the gains going to the top is
inefficient for the economy as a whole.

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anentropic
it's debt see Steve Keen eg
[https://www.youtube.com/watch?v=WPIQnOdjoZk](https://www.youtube.com/watch?v=WPIQnOdjoZk)

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brador
What we're missing is cash in peoples hands to spend on innovations. For many
80% of income is going to rent. How can you even hope to build an economy on
that?

~~~
refurb
You do realize that most people don't live in Silicon Valley or NYC, right?

I'd say a small fraction of the US population is paying "80%" of income for
rent.

------
api
We let worker wages stagnate such that there is now insufficient demand.

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jgord
Should we make it a policy not to link paywall urls ?

~~~
somethingsimple
I didn't get a paywall, and I'm not a subscriber.

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SlipperySlope
Free Trade is the problem.

The developed countries must impose 50% or higher tariffs on imported goods,
services and intellectual property to protect their workers.

The USA enjoyed very high growth rates in the 1800s.

When economists get around to simulating the economy via agent based modelling
of every decision making financial entity, akin to how weather is forecasted
in voxels, then Free Trade will be revealed as the root cause of the slow
growth rate of the developed countries.

