UnThreaded | Threaded | Whole Thread (47) | Ignore Thread Prev | Next
Author: Lokicious Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Re: OT: Man in the White Suit Date: 2/15/2009 9:58 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 4
Nobody knows. Nobody ever knows. This is a complaint that could be made during any recession, depression, or moment of economic uncertainty during the past 200 years. And after a period of self-flagellation (and other necessary economic retrenchment) we pick ourselves up and go forward. When? Where? Really, it's a total mystery. But it's not going to stop forever because you don't need to upgrade your computer as often.

This is why I call this faith-based economics. I have no doubt there will be innovation, but that doesn't mean it will lead to new and better jobs. History is complex on this: job losses from increased productivity have been mitigated by immigration, migration, high percentages of public employees, shorter work week, and of course wars.

We have seen a major new innovation over the last 25 years, and we can easily see how it has enabled increased productivity and will continue to do so. But job growth in this country after the dot.com recession (I don't take 9-11 as a real factor, just a brief psychological blow), despite record profits and officially high growth, was way below par and almost entirely fueled by borrowing and the housing boom/bubble. The Great Depression took WWII and a huge percentage of the population working directly or indirectly for the government to turn around, and building the interstate system after the war. Not only was there then a population boom, but there really was lots of new stuff out there for people to want, even if perhaps not necessary to meet basic needs. My concern is that this time it is different: aging population, productivity gains that affect not just manufacturing and farming, but services. And most of the new "stuff" is replacing old "stuff" to accomplish the same "needs." My mother-in-law just sent us my late father-in-law's 35 mm camera. I have a very good 35 mm camera (actually 2, if you count the one without auto-focus I used when I could see well enough to use it). I don't even know where to get film developed (I'm sure there are still places) and haven't used it for years. I remember trying to explain digital cameras to my late father-in-law, who couldn't understand how anyone would make money (this was before the craze among teens and preens sending self-porno over cell phones). My answer was, and is, once people decide they don't need a hard copy, there will be little money to be made once the camera is bought.

The number of people working in financial services in recent years has been staggering—I consider this corporate feather-bedding (people extracting a huge percentage of GDP that does not become working capital). Obviously, the housing boom funded by debt financing was a private sector (with help from the Fed) version of public works projects. Gambling has been a growth industry—very healthy for the economy (and I think way over capacity). Eating out has boomed, with women entering the work force, but what happens if people figure out they can save money and eat better cooking for themselves? Which basically leaves health care. We seem to be headed toward and economy where caring for sick, old people is the growth industry. Oouch!
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (47) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement