Is There a Great Stagnation in America? 7 Must-Read Answers

May 3, 2013

The U.S. Chamber of Commerce Foundation reads the Internet so that you don’t have to, sharing a short list of curated blog posts for your Friday reading.

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James Pethokoukis asks, “Should workers fear IBM’s Watson?” The reason he asks this question stems from a TED debate between Northwestern’s Robert Gordon and MIT’s Erik Brynjolfsson on whether “America is past its prime.” The answer may very well be found in this one chart from Brynjolfsson pitting Jeopardy!  contestants (the blue dots) against the relentless improvements in IBM supercomputer Watson’s answers. As Brynjolfsson says, “Watson is growing up fast.” The point he makes is that technology is racing ahead into a “new machine age” that is “digital, exponential, and combinatorial.” Rather than there being a great stagnation, “Each innovation creates building blocks for even more innovation.” And that creates far more opportunities for gainful work.

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So, how will automation (i.e., robots) affect employment? Richard Posner is right on the money in his (rather complicated) reply, and being a judge he points to what’s going on in law firms today as a similar case:

“There is no guaranty that labor markets as a whole will adjust smoothly to changes in demand in particular labor markets. That depends on the size and rapidity of those changes, and in turn on the size and rapidity of changes in automation, outsourcing, and management practices, all linked to technology in a narrow or broad sense.” 

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Mashable: “Staples just became a little more cutting edge. The office supply chain announced Friday that it is now selling 3D printers through its website and will start selling 3D printers in select stores by the end of next month. Staples is touting itself as the first ‘major U.S. retailer’ to sell the product.” 

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At the high end of 3D printing, Mark Perry highlights this excellent story from CBS’ Sunday Morning on “bioprinting.” 

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Moving beyond technology to the broader economy, a recent Vanguard study finds that the rise in policy uncertainty since 2011 has cost the economy some $261 billion—the equivalent of $800 per American. Ezra Klein is skeptical of these findings though. 

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At the consumer level, Matt Phillips profiles the “student borrowing bubble in 17 charts.” Does our great hope for tomorrow rest on the shoulders of the indebted young? 

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Finally, Megan McArdle has some very smart writing on the structural foundation of America’s “jobless recovery”:

“Programmer jobs that once demanded anyone with a pulse and a C++ manual now require that you also have at least three years of experience designing websites for a fast food multinational, speak fluent Tajik, and be proficient in hacky sack. So just as employees are flooding the market from industries that need to permanently downsize, it becomes harder to transition into a new industry or job description. ...

The result: long term unemployment. What is the government supposed to do about that? ...

The answer is, nothing. We can, and should, ease the pain of those who lose jobs. But the government can’t find you a job any more than it can find you a spouse or a hobby. The process of matching individuals to employers can only be done by individuals.”