Thursday, August 2, 2018

Quotes of the Day: "Had we frozen the economic structure in 1950"

The consensus estimate for the July employment report (due out tomorrow morning) is for 192k new jobs created. The unemployment rate is expected to come in at 3.9%.

This morning's jobless claims number extended the record below-300k streak to 178 weeks.

Hmm... Don't know that I'm all in on the we're getting killed on trade and losing our jobs narrative!

But what about "our" manufacturing jobs? You ask... Well, yes, the number of U.S. manufacturing jobs has shrunken mightily over the decades. But, interestingly, our manufacturing output has risen dramatically at the same time. I believe they call that productivity.

In his intelligent, honest and thoughtful way, economist Arnold Kling schools on economics, on progress, and on economic history in his excellent and accessible book Learning Economics:
"What happens to jobs that are “lost” to progress, displacement, and trade? New jobs become more important. If we had frozen the economic structure in 1800, America would have many more agricultural jobs than we have today. Had we frozen the economic structure in 1950, we would have more manufacturing jobs. But even though we have “ lost ” jobs in agriculture and manufacturing, there is enough work to keep the economy pretty close to full employment.
I think that most people prefer the work that they do to the mind-numbing labor of a factory assembly line or the backbreaking labor of a farm. Work today is less dangerous, less unpleasant, and less dreary than it has ever been. Keep that in mind when people complain about “ lost ” jobs."
So why all the misunderstanding, and, alas, the misleading? Well, Kling touches on that as well:
"Ours seems to be the age of the Partisan Hack. Looking over the list of best-selling books or the roster of columnists at top-drawer newspapers, success appears to correlate with mean-spirited attacks and heavy-handed rhetoric . Whatever happened to logical analysis of economic policy designed to illuminate as opposed to rabble-rouse?"

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