US economic growth slows to 1.7 percent

US economic growth rose only slightly in the second quarter of 2010, the government said Thursday, confirming that the pace of the economic recovery has slowed.

Gross domestic product, which measures the output of goods and services in the United States, increased at an annual rate of 1.7 percent in the second quarter, the Department of Commerce said.

The figure marks a sharp decline from the first quarter, when real GDP increased 3.7 percent.

Not even close. I’m just a guy who actually looks at the real data for myself, not what the media feeds me.

You can keep telling yourself what you want it doesn’t change the fact that government regulation is only *part* of the reason unemployment is high. Once the microchip was invented, the game changed. There will NOT always be work to do for unskilled workers. They are destined to become more and more redundant with the passing of each year. Anyone who thinks otherwise is fooling themselves.

To illustrate: In the 1950’s, a grocery store would have a fruit and vegetable man on staff to go around to each location and figure out how much foodstuffs to order - strawberries, bananas, watermelon, etc. Today, that job doesn’t even exist because the moment a melon is taken out of inventory, the computer notifies the central warehouse of the existing stock units and places an order for a new melon. The distribution systems have become so overwhelmingly efficient that most don’t even require human interaction except on the retail floor where inventory must be checked and adjusted periodically to account for theft, spoilage, etc.

You also hear much about the ‘decline of American manufacturing’. Yet, virtually every economist in the United States knows that manufacturing profits, on an inflation-adjusted basis, are the EXACT SAME as they were in 1960, it has just become a smaller part of the overall economy, not due to decline, but rather due to industries such as ecommerce and finance becoming LARGER from very small or non-existent bases.

So how is it that during that same time manufacturing jobs disappeared? If manufacturing is exactly as profitable in “real” dollars after inflation as it was in 1960 why do we have fewer jobs? Most of it isn’t China and India but software automation and productivity gains. For us to be having this conversation 30 years ago would have required both of us to write on a piece of paper, stuff it in an envelope, and send it through the mail. That meant more logging jobs for paper, more manufacturing jobs for pens, most mailmen jobs, etc. Now, sites like Free Republic can handle millions of conversations, posts and comments on - what - a few servers?

The unions, politicians, and other support systems know this. But if they go to their people and say, “We’re going to keep losing jobs in this industry - you should probably go become an anesthesiologist - they will be voted out office and a job, along with their comfortable paychecks and benefits. So they put on a good show.

But anyone who ignores the underlying reason our economy is shifting does so at his own (or her own) peril. In 20 years, they will still be broke or bankrupt, still be unemployed, and wonder why the hell the world left them behind. It’s no different than horse and buggy manufacturers lamenting the rise of the automobile. Those who were smart enough to go work in Detroit made bank but those who kept trying to sell saddles and whips didn’t fare very well.

To think otherwise is an exercise in self-delusion that is the adult equivalent of believing in Santa Claus.

No, you incorrectly extrapolated my microeconomic argument into a macroeconomic prediction that I never made.

My point is simple: People who lack any marketable skill other than a high school degree and who refuse to retrain to meet market demand (which is just another way of saying “provide stuff people want”) are going to be poor. They will always be poor. Nothing the government does can change that in any sustainable long-term way. No one “owes” them a job. You aren’t entitled to make a living just because you are willing to work. You MUST provide something people want of their own free God-given will.

Your argument simply reinforces, rather than repudiates, my position. Society in the past progressed because the base population progressed forward WITH technology not against it. The generation that made automobiles and planes in domestic factories LEARNED THOSE SKILLS FROM SCRATCH because those industries didn’t exist in the prior century. They progressed to meet market demand. As I said before, the wise horse and buggy manufacturers retooled and become car plants. The ones that didn’t adapt probably bitched about their bygone glory days and wondered why they couldn’t feed their kids.

So I will say it again: Those who lack any discernible skills other than manual labor, which has become virtually free due to productivity gains in technology, will find themselves increasingly irrelevant and unable to survive because the wage a “free market” would set would be below a sufficient level necessary to feed oneself. That wage level is already artificially increased by the Federally mandated minimum wage.

To think that THOSE TYPES jobs are going to come back is delusional. But the free market presses on ... when the whalers died out, the kerosene market rose. When it fell, the crude oil market grew to power. Then came natural gas.

Society will be just fine. But the guy waiting for the steel mill to return? For the auto plant to start hiring again? Yeah, he’s out of his freaking mind. It isn’t going to happen. I’m sure there were old sea captains that were convinced the whaling days of blubber powered fat fuel were destined for a resurrection. They died hoping to see it with empty bank accounts.

OK, I think I understand your central point. You are saying that people need to train themselves to supply the skills the market needs and that politicians and the past are not necessarily good guides to that. I’ll agree.

I also agree regarding the person who is waiting for the plant to reopen. In many cases it is not likely to happen. BUT, I will disagree if you think we don’t have a comparative advantage in manufacture with a Constitutional government and a free market. The system itself is one of our major comparative advantages . . . and we are legislating that system away.

I believe that Chinese and other nations currency valuations are a form of tariff and trade policy. GATT has focused on tariffs and for all intents and purposes elimated them. To me this is bad . . . because tariffs are easily understood and generate revenue only on spending, not on income, and were a traditional way of funding the US government back when we were expanding in power relative to the rest of the world — back when we were more successful. It is also bad because currency markets are hard for voters and politicians to understand and control, at least in Democratic countries, and so make trade policy impenetrable.

My other point of disagreement is if you are going farther than your training point, and believe that those that are not intelligent or well trained will be unemployable in modern economies you are wrong. It’s just that these jobs are currently held by illegals in our particular economy.

If you want to extrapolate to a future with vacuum cleaning robots in place of hotel maids, I reserve the right to extrapolate to a free market economy in which such wealth is generated that the hotel maid’s salary gives her a better standard of living than today’s engineer (those that are employed and haven’t been replaced by an Indian or Chinese fellow because of our sell-out Congress’ allowing immigration at corporate request). Such things happen . . . I read a columnist once that compared a modern plumber on a cruise ship to Loius the 16th favorably in terms of his standard of living.

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