Michelle Obama is experiencing mild depression. If she can feel depressed, I feel better about my own malaise, especially about the state of the US economy. Without additional fiscal stimulus, we will experience an economic depression, a situation where the economy lacks its own ability to recover. There are other things to feel terrible about – unnecessary deaths, inequality, school-age children falling behind, and another generation likely to incur long-term effects from sustained, high unemployment. All these painful experiences are worsened as the economy tanks further. It’s helpful to remember Macroeconomics 101. The level of our nation’s Gross Domestic Product (essentially our national income) depends on the addition of four terms. Consumption of disposable goods like food, entertainment, and clothing. It is the dominant majority of our GDP, coming in at about 69% in Q2 of 2020 GDP. Government spending on things like…
Top 5 Productivity Sinkholes
Whichever way you measure national productivity, it’s growing at a snail’s pace both in absolute terms and compared to past growth rates. (See Sidebar.) And that’s not a good thing as increases in productivity improve our standard of living. SIDEBAR: Measures of Productivity Labor productivity, the measure most often cited, captures the amount of goods and services produced (output) with the number of hours worked to produce those goods and services. Multi-factor productivity compares output to the amount of combined inputs (labor, capital, energy, materials, and purchased services) used to produce that output. Economists argue this measure better captures the impact of technology advances. Not all experts agree productivity is an issue. Bloomberg blogger and investment expert Barry Ritholtz argues that productivity is higher than we think because our current measures fail to capture innovations in the digital world that have changed how…