It seems to me….
“You can see the computer age everywhere but in productivity statistics.” ~ Robert Solow.
Technology is rapidly changing every aspect of both work and personal life but seems to have not significantly improved economic growth.
There have been three previous so-called “Industrial Revolutions”. While only time will tell, it appears we now are living in the fourth. The characteristics of each are:
1784: Mechanical production and steam power.
1870: Mass-scale production and electric power.
1969: Network communications and computer availability.
Present: Artificial intelligence and big data (along with machine learning, nanotechnology, 3-D printing, genetics, biotechnology…).
Rapidly accelerating exploitation of technological innovation is disrupting the global economy in unanticipated ways and at an unparalleled pace. This is readily apparent in labor market transformation which along with other socioeconomic and demographic changes are predicted to result in a net loss of 5 million jobs in a minimum of 15 major developed and emerging economies by 2020.
Middle-class worker’s wages have shown little or no growth as technology dependence has climbed to higher corporate employment levels. The overall result has been wage stagnation impacting economic demand which in the U.S. and most other affluent nations accounts for the largest component of their respective economies. The result has been increasing economic inequality where just 62 people in the world now have as much personal wealth as those comprising the entire lower half of the world’s population. To increase consumer demand, it will be necessary to significantly improve current tax codes, corporate governance, education, and national infrastructure.
While those at higher personal economic levels, primarily the educated elite, express general satisfaction with existing institutions and governance, those less well-off are experiencing economic malaise which if not corrected will lead to social unrest, populism, and political unrest potentially resulting in increased extremism, isolation, and volatility throughout the world.
There is a point where U.S. conservatives who have continuously forecast economic catastrophe for President Obama’s entire two terms should logically admit they have been wrong in all their dire pronouncements. Similarly, contrary to their predictions, the results following California’s Governor Jerry Brown raising taxes on the wealthy – after years of massive budget deficits, California has a massive surplus and the world’s eighth largest economy is undergoing rapid expansion.
Meanwhile, the Affordable Care Act (ACA) has dramatically slowed the growth of healthcare premiums, insured millions of people that lacked even basic coverage, and even come in under budget. In the first year of the ACA’s full implementation, the U.S. economy as a whole added 3.3 million jobs, the biggest gain since the 1990s; half a million of those jobs were added just in California which now is creating more jobs than Texas. All of which is indisputably good for the economy.
While President Obama does not deserve the entire credit for these gains as, in general, presidents and their policies matter much less for the economy’s performance than most people imagine. Times of crisis are an exception and the Obama stimulus plan enacted in 2009 did successfully have a positive effect but that stimulus was very short term and after 2010 had very little economic impact.
From a conservative point of view, Mr. Obama did everything wrong, afflicting the comfortable (slightly), comforting the afflicted (a lot), and nothing bad happened. We can, it turns out, make our society better after all.
Conservative judgement predicted President Obama’s policies, such as enactment of the 2010 Dodd-Frank financial reform would greatly increase unemployment by starving businesses of capital. They predicted increasing taxes on high incomes, especially at the very top where average tax rates rose by about six and a half percentage points after 2012, would destroy incentives. And they claimed enactment of healthcare reforms that went into full effect in 2014 would have catastrophic effects on employment. All of which turned out to be untrue.
Politicians on the right make claims such as the one from Senator Rand Paul: “When is the last time in our country we created millions of jobs? It was under Ronald Reagan.” which is totally incorrect since if creating “millions of jobs” means adding two million or more jobs in a given year, the U.S. has done that 13 times since Reagan left office: eight times under Bill Clinton, twice under George W. Bush, and three times, so far, under Barack Obama. But conservatives apparently are not counting.
No matter what is happening in the real world, Republicans will never deviate from their talking point that Democrats are “job killers.” Five years into a record-breaking job growth streak, they’re STILL saying that Obama is destroying the economy.
Reality has a liberal bias and the economy is growing despite every obstacle Republicans have thrown in its path. Red states that pursued austerity for the peasants while cutting taxes for the rich are collapsing while blue states that did the opposite are booming. Trickle-down economics is not a theory but rather an attempt to rationalize increasing economic disparity.
There MUST be a tipping point where even the most hardcore right-winger will notice that California isn’t falling into the ocean from all those high taxes on the rich while conservative tax cutting utopias like Kansas, Texas, and Louisiana are seeing their economies meltdown but for conservatives, it appears ideology still trumps reality. Until then, Republicans will keep running their con game on Americans and hope no one notices that they keep being wrong on everything.
That’s what I think, what about you?
 Robert Merton Solow is an American economist particularly known for his work on the theory of economic growth that culminated in the exogenous growth model named after him.
 Foroohar, Rana. In Davos, Taking Bets On When The Technology Revolution Will Finally Deliver Enough Jobs, Time, 1 February 2016, pp26-28.
 Krugman, Pal. The Obama Boom, The New York Times, http://www.nytimes.com/2016/01/11/opinion/the-obama-boom.html?smid=fb-nytimes&smtyp=cur&_r=0, 11 January 2016.