U.S. Real Growth and Technology
April 30, 2015
The span of time since Y2K constitutes a “long run,” and it has seen a proliferation of new electronic devices transforming the world as we know it. U.S. inventions have driven much of this technology revolution, yet U.S. real economic growth has counter-intuitively slowed greatly. It’s not that America’s best and brightest have done a bad job. Quite the contrary, their ingenuity has been spell-binding but regrettably directed wrongly. Technology through out history has been a key factor behind economic development, but there’s a catch. The best advances are ones that support production, and much of post-1995 technology has been oriented toward the consumer, not business.
The evidence of a trend slowdown in U.S. growth is compelling. For the first time in over 53 years, the 15-1/4 year moving average of U.S. real GDP growth slipped under 2.0% in the first quarter of this year to 1.9%. The average growth rate over any 15.25-year period of time since 1Q47-2Q62 was 3.3%, and growth in the 15-1/4 years to end-1999 was similar at 3.5% per year. The fastest average growth rate over a span if this length was 4.5% in the 61 quarters ending in 2Q73 — that is just before the first oil price shock. After 1978, one can find no 15-1/4 year lengths of time with average growth of 4.0% per year or better, and the interval of that length ending in 4Q08 was the last to show growth of as much as 3.0% per year.
U.S.-made consumer electronic devices have accelerated the inequality of U.S. incomes, promoted globalization, and reduced barriers to mischievous groups bent on spreading terrorism and revolution. Companies reaping astounding profits from selling technology have been above to do so with incredibly few employees. Technology has given an enormous boost to developing economies that cannot match the infrastructure of more advanced economies, enabling the former to close the gap with the latter. America’s geopolitical enemies are no longer other governments. Many are movements that cross national boundaries, and as a result, the U.S. federal government’s task of keeping the world safe is now more complicated and a greater drain on the U.S. economy. U.S. participation in the First World War lasted just 19 months, and from Pearl Harbor to Hiroshima was a span of less than four years. Since the 9/11 attacks over 13 years ago, the United States has been engaged in a never-ending war.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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