Posted on 08/03/2008 3:48:45 PM PDT by abb
Recessions don't usually look like this, at least when it comes to productivity.
In the six U.S. recessions since 1970, worker productivity, or output per hour, grew a sluggish 0.8%, on average. But since the end of last year, even amid economic weakness, productivity is estimated to have grown an average 2.5% at an annual rate.
That defies productivity's usual behavior of going "up in good times and down in bad times," says Georgia State University forecaster Rajeev Dhawan.
Productivity's path isn't just an academic debate. That productivity is staying strong even in bad times has big implications for economic growth, inflation, employment and, ultimately, living standards. For example, strong productivity growth, by countering inflation pressures from energy and commodities, allows the Fed to keep interest rates lower than it otherwise might, helping it stoke the economy.
But "it's a bit of a two-edged sword," said Chris Varvares of Macroeconomic Advisers, since efficiency gains could mean that companies can get by with fewer workers, exacerbating unemployment in the short run.
Some economists say that the current healthy growth in productivity reflects a shift in the economy from less productive domestic sectors like home building and into exporting industries, which tend to be highly efficient. That shift has been aided by the weak dollar, which has made U.S. exports more competitive.
"It's a compositional story," said Dale Jorgenson, a productivity expert at Harvard University. Productivity, he explained, is "languid" in construction, so the decline of building as a share of the economy in recent quarters "is certainly going to be positive for productivity" on average.
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(Excerpt) Read more at online.wsj.com ...
How can this be ping.
How much longer will foreigners want to buy America’s debt?
What happens after they own it all?
Want to burn some money to keep warm?
y’all come.
I guess the WSJ didn’t get the memo from the Ministry of Truth: If it doesn’t fit the Narrative, then it’s not news.
Must have had a network breakdown. Or maybe this was a story planted by us BushBots...
Shhhhh.
Productivity will grow if fewer people are working and the output is the same
Not really a telling stat...since the debt is still very high and the trade deficit is so high it makes Third Worlders laugh at us.
The weak dollar is good for US exports....but what exports? Everything I see is “Made in China”. So few things are made in the USA anymore. Heck, now the US IMPORTS food....where before the US was a net exporter.
This seems to be a mantra but one I dont see it. Every company I that I have recently visited with a couple of exceptions are doing extremely well. Case, CAT, Cummins, John Deere, Electro-Motive. Of course they are selling in India, and China too.
Or even if it declines. Say I employ five workers; sales go down 10%. I fire one of my workers and produce 90% of my former output with 80% of my former workforce. Productivity increases by 2.5% since my workers, who were each producing 20% of 100% of my former output are now each producing 25% of 90% of that former output.
So productivity can be a little misleading as a statistic.
20 to 22.5 is an increase of 12.5%.
As long as we pay them back.
What happens after they own it all?
We'll be laughing our asses off. How could you possibly think that would be bad?
And how long will foreigners WANT our money when it becomes worth-LESS? Not a pretty scenario.
Why should you think it is funny when we can’t even drill for our own energy, average Americans are being squeezed, and yet let Arabs and Chinese can buy our country up with our increasingly useless funny money?
There's a good chance that America will become the world's low cost provider with a couple of decades ~ FOR EVERYTHING!
China will be seen to have made a serious mistake by focusing on labor intensie industries.
The Chicoms have ~ lots of them. They know the difference between toasters and planes.
“China will be seen to have made a serious mistake by focusing on labor intensie industries.”
Good heavens! I never thought of that. I have a neighbor studying miniaturized computers. I guess she’ll be helping high-tech factories hum along.
At the same time, it would be nice to help manufacturing grow through the fair tax and curbed spending.
[I was in a labor-intense plant a few years back. Between that and a leaky roof, the place folded. Akia nearly did business with us, but his men apparently didn’t approve of rain falling on our wood panels. Sorry to digress.]
That's because they are incredibly productive and generate far more than anyone's expected share to GDP.
Think about Wal-Mart for a moment (and IKEA for that matter). These organizations are much more like vast machines than the old-fashioned chain-store warehouse/retail outlet model. IKEA stores themselves are remarkably interchangeable with a degree of uniformity that allows a handful of layout designers in Stockholm to prepare detailed maps for goods movement and stock presentation down to the gnat's eyelash for hundreds of stores worldwide.
That system is replicated in Wal-Mart, although I do know of a store in Carlsbad/Oceanside/Vista (on Cannon Road) that is the EXACT opposite layout from the one closest to my home.
The computers can evaluate staffing needs and schedule employees without serious need of supervisory intervention.
Both IKEA and Wal-Mart extend their store stocking system backwards up the line to their contract manufacturers and suppliers. It's not just a case of signing a contract; these guys tell you when and where you will provide what, and that's the end of the story.
Just before I retired from USPS I was very involved in quality control systems that enabled major mailers to perfectly meld their operations with USPS entry operations and thereby get better service while creating the lowest possible costs for USPS. We had computer systems hanging off every guy involved in this 24/7.
USPS continues to be the world's "low cost provider" when it comes to mail service. No doubt there's room for improvement, but how'd you like to be served by the second-best postal system?
Pure robotics were purchased "off the shelf" for USPS. I presume it's improved since I left. Someday the only postal worker you will see is the guy delivering the mail.
You do realize that USPS was supposed to fail along with Fed-Ex. The US Postal System has no need of profits, and need not pay taxes. You guys really ticked off the left.
Not much. If nobody owned the debt, it wouldn't even exist. So by definition, somebody already has to own all of it.
It would be sort of like what happens when someone's mortgage is bought by another lender. Other than sending the payments to a different place, the mortgage holder would see no difference.
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