
Innovation Won't Overcome Stagnation - lnguyen
https://www.bloomberg.com/view/articles/2017-05-28/innovation-won-t-overcome-stagnation
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jtraffic
I have many problems with this analysis, but I'll name the biggest one: the
author focuses on increases in value provided, but doesn't consider the cost
(for consumers) to obtain that value.

If we receive the same value for lower cost, that's as good as an increase in
productivity: I can earn the same money and afford a better living standard.
Moreover, this kind of advance benefits the poor disproportionately (relative
to the kind the author addresses).

~~~
TheAdamAndChe
This assumes the poor and middle class don't see a decrease in wages, which
just doesn't happen. Wages are a function of supply and demand, and with a
larger labor pool, wages go down. A good example is the effect globalization
has had on the Midwest[1]. Wages are lower, inequality is higher, and the jobs
are being concentrated to cities with a higher cost of living. Historically, a
family could live comfortably with a single wage earner in the house. Nowadays
that's very tough to do without having an advanced degree.

[1] [http://www.epi.org/press/globalization-lowered-wages-
america...](http://www.epi.org/press/globalization-lowered-wages-american-
workers/)

~~~
jtraffic
> This assumes the poor and middle class don't see a decrease in wages

I disagree. I think it only assumes that relative wages fall less than the
relative incremental value of the new tech increases.

> Wages are a function of supply and demand

Yeah, but my point is that wages in isolation don't tell you much. The
difficult-to-measure value accessible with those wages matters too.

> A good example is the effect globalization has had on the Midwest[1]

Irrelevant. Globalization need not move in lockstep with new technology.

I don't want to be reductionist, and perhaps my original comment came across
as overconfident. My core assertion is that "it's not that simple," which
decreases the value of conclusions based on oversimplified analysis. I think
the article is oversimplified.

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jankotek
> _It 's true that many recent innovations have reduced costs. But they've
> often done so by using lower-quality products or untrained workers, or by
> extracting revenue from personal assets._

I read biography of Tomas Bata, in industrialist from 1930ties. Growth and
innovation used to be about making things cheaper and affordable, while
preserving quality. Today it is hard to imagine housing cost should go down,
rather than up.

~~~
TheAdamAndChe
Housing costs are going up because the good jobs are being concentrated to a
handful of cities in the country that benefit from globalization. Cheap
housing is abundant in rural America, but because the corporations that
control our government benefit from a concentrated workforce, they have no
reason to invest in rural America.

~~~
killjoywashere
Housing costs also go up because of the mortgage interest deduction. The home-
owning middle class is living in subsidized housing.

~~~
TheAdamAndChe
Are you saying that the mortgage interest reduction is causing the insane
housing costs in the cities? If this were the case, wouldn't we see an
equivalent increase in costs in the somewhat rural areas?

~~~
killjoywashere
As people move away from the midwest, and the midwest economies lag, their
housing costs should have cratered. Instead, they had the same 2008-2009
bubble popping everyone else saw, then continued to drift up. Source: bought
and sold homes in 3 regions in the last 10 years. Also, you can marinate
yourself in the trend lines on trulia.

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jccooper
Not productivity-enhancing: "A driverless or electric automobile is just a new
type of car."

Productivity-enhancing: "Word processing software didn't eliminate the need to
type out documents but eliminated secretaries and typing pools, leaving
individuals to do the task themselves."

Sure, those are totally different.

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paulpauper
I guess by the author's logic, there has been stagnation since the the stone
age, because cars still use wheels to move stuff. A smart phone is no
different than a rotary phone ,because they involve imputing numbers into an
interface, etc.

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mbleigh
This author seems to be afflicted by a crippling short-sightedness. I stopped
reading when I hit the sentence about autonomous cars being "just a new type
of car".

