America’s economy is once again reinventing itself

http://www.economist.com/node/21558576?fsrc=scn/tw/te/ar/comebackkid

by shill • 14 years ago

84 74 14 years ago

chrismealy2• 14 years ago

Thanks for reminding me why I stopped subscribing to The Economist. In addition to the usual simpleminded analysis that serves only to flatter its readers, we get an endorsement of fracking! Good lord!

disbelief• 14 years ago

I was a bit shocked by that. Not sure I would want Fracking to be the engine driving my economic growth — you're trading a financial crisis for a potentially massive environmental catastrophe.

lcargill993• 14 years ago

Isn't that the tradeoff? You either join the circle of people selling each other insurance, or you get a real job.

msellout• 14 years ago

Don't judge them too harshly. Fracking isn't clearly bad or good. As the article pointed out: coal is worse.

Karunamon• 14 years ago

At least they're upfront about their biases. More than you can say for much other "journalism".

gwern• 14 years ago

It's hard to argue with hundreds of billions of dollars and oil-addict America becoming a net exporter.

mwsherman• 14 years ago

Here’s what’s happening with natural gas vs coal, I assume at least partly attributable to fracking: http://www.theatlantic.com/technology/archive/2012/07/the-hu...

InclinedPlane3• 14 years ago

A facile prejudice against fracking has proven an excellent litmus test to identify dilletante pseudo-environmentalists. It's an indication they have no clue what they are talking about and also don't consider carbon emissions a serious problem.

Many studies have been done on fracking, and there is every indication that with sound regulation and proper practices it is a perfectly safe technique for extracting natural gas. More so, using natural gas for energy instead of oil or especially coal is an enormous carbon emissions win. Far greater than any hybrid or even all electric vehicle technology can achieve. To write it off as an evil because you heard some anecdotal evidence somewhere just proves you don't take the fundamental problems of energy production and the environment seriously.

dimitar• 14 years ago

There are many ways in which you can argue against fracking on an environmental basis.

But one is really abouve all: natural gas is a fossil fuel and burning of fossil fuels leads to climate change. The costly investment on this harmful energy source is much more needed in renewables.

Unfortunately climate change science has been distorted in the media.

vipervpn• 14 years ago

I'm not sure what your qualifications are to reply as you did, but I doubt it's on par with Arthur Berman, a petroleum geologist and editorial board member of The Oil Drum. His views are quite different than yours.

Here's an interview he did on the Kunstlercast: http://kunstlercast.com/shows/kunstlercast-192-arthur-e-berm...

chrismealy2• 14 years ago

You are blowhard and moron.

keithpeter• 14 years ago

"Because the companies leading the process are so productive, they pay high wages but do not employ many people. They may thus do little to reduce unemployment, while aggravating inequality."

That can't really carry on long term can it? Not much chance of infrastructure improvements without a tax base?

stcredzero2• 14 years ago

> That can't really carry on long term can it? Not much chance of infrastructure improvements without a tax base?

This is a problem for large political units going back to at least the Roman Empire.

The government should be doing everything it can to empower small businesses. It isn't because of two-party adversarial politics, however.

HotKFreshSwag• 14 years ago

Not so much two-party adversarial politics so much as big business and the 0.01% funding and controlling the two viable parties. The center-right party and the right party used to compromise. The system wasn't always this dysfunctional but one party has been hijacked by fringe groups who refuse to compromise.

lcargill993• 14 years ago

"Empower" how? Subsidies? If you enact subsidies, then you create an environment in which somebody has the incentive to aggregate the subsidy - in a large business. That's agricultural policy in the US for the last hundred years in a nutshell.

troyastorino• 14 years ago

Ultimately there are going to have to be shifts in what skills people learn. There will be high unemployment during the adjustment period, but as long as demand for low-skill jobs shrinks, people will adjust and learn new skills. You don't have to go back to school to learn how to be a programmer :)

dangrossman• 14 years ago

Two faulty assumptions:

1) That for every low-skill job lost, a high-skill job replaces it. That's not the case. When robotic arms replace 100k factory workers, the robotic arm companies do not need 100k new programmers, nor are the factory owners going to use the reduced labor costs to turn into software shops. It's not like the industrial revolution all over again; computers and robotics are producing such enormous productivty gains that eventually there will be fewer people required by the labor force than the working-age population.

2) That people whose skills are no longer in-demand will somehow acquire other skills. Some will, but large swaths of the unemployed won't, especially among people 50+. That's why so many millions, especially 50+ women, have now been unemployed for years. It's not such an easy transition as you make it out to be -- people won't simply adjust, no, a large portion will essentially drop from middle-class to poverty and stay that way until they die. It's not they who will take the new jobs, it's the younger next generation that never had the obsolete skills.

A 55 year old with only a HS diploma for whom a computer has never been more than a magical toaster that delivers e-mail, only existing in the past few years of his/her life, is simply not going to become a professional programmer even if he/she wanted to.

lesterbuck• 14 years ago

Brynjolfsson and McAfee deal with the stresses on societies to keep up with technology:

http://www.amazon.com/Race-Against-The-Machine-ebook/dp/B005...

Unfortunately, the rate of technological acceleration is increasing, and society is not able to keep up with even the current rate, viz. the huge numbers of unemployed workers with outdated skills. They suggest that the disruptions we have experienced over the last ten years are just a hint of the disruptions coming over the next ten years, with increasing rates of change. It is the elephant in the room for the presidential campaign, but is pretty much being ignored by both sides. They even suggest that in ten years or so, all that manufacturing in China could move back to US soil as factories become completely robotic.

adventureful2• 14 years ago

America doesn't have a tax base problem, it has a spending priority problem. The total government system in the US collects more in taxes than the entire German economy is worth. You'd think we could have nice roads given that. The problem is what that money is being spent on.

Our tax system is also extraordinarily complex, with thousands of taxes, and a tax code that the IRS doesn't even fully understand. Individual Americans spend $300+ billion (last I recall reading) just preparing their taxes each year.

rayiner2• 14 years ago

http://www.politifact.com/truth-o-meter/statements/2011/nov/...

If a number seems hard to believe, it probably is. Think it through--how many hours do you spend doing your taxes each year? A few hours? How many hours do you spend showering and brushing your teeth each year?

Maybe it's businesses--but the entire US legal sector is only about $150 billion.

johnohara• 14 years ago

Nothing says "buff and reinvented" like red, white and blue nipple tassels.

jasonwatkinspdx2• 14 years ago

This is disappointing.

I enjoy some of the articles in the Economist, but this is advocacy writing at its worst. It strings together a few examples as claims, each presented uncritically, then generalizes from this bullet list to make sweeping claims with emotional characterizations.

It never shows you if each of these examples is actually net positive for our society and economy. It never shows you the scale or impact they're having.

It's like saying "Kevin Durant's shooting percentage was up this year, so the Thunder are going to win the next 10 NBA Championships!"

It's cheerleading.

No surprise there's no author's name on it.

runako• 14 years ago

The Economist typically omits bylines for all its writing:

https://en.wikipedia.org/wiki/The_Economist#Editorial_anonym...

tokenadult• 14 years ago

I enjoy some of the articles in the Economist, but this is advocacy writing at its worst.

Your clue that this submitted article here comes from the "leader" section of editorials by the Economist editors comes from the "(see article)" link in the submission here. You're reading an editorial, and it is written like an editorial, with a point of view. The actual underlying article

http://www.economist.com/node/21558591

to be found by following that link is longer, more detailed, more in the style of objective journalistic reporting, and full of food for thought.

jasonwatkinspdx2• 14 years ago

Thanks. I didn't know that "Leader" meant "Editorial."

The linked article is much more what I would expect.

jordo37• 14 years ago

I wasn't so bothered by the fact that it was opinionated but that it's examples had such obvious and in some cases faulty assumptions. The idea that America will become an exporter of oil due to natural gas is, pardon the pun, a pipe dream. Natural gas has absolutely affected our dependence, but no one knows how long of a supply (or rather given the oil industries continued lack of accuracy on life-of-well numbers, none that I trust) or how regulation will affect this in the long run. Fracking has been targeted by many environmental groups as a huge enemy and I expect to see that continue.

rrggrr• 14 years ago

Household debt 114% of income is nothing to brag about. Apalling.

pjscott2• 14 years ago

It's a substantial improvement, and if you graph it over time, it's heading down after decades of going up:

http://en.wikipedia.org/wiki/File:U.S._Household_Debt_Relati...

That downward trend is the opposite of appalling.

pessimizer2• 14 years ago

1. Could that be because disposable income is going down?

and

2. Mass paying down of debt may not be the best thing to generate demand during a demand crisis.

vital_sol• 14 years ago

It would be very helpful if the article would mention, 114% of what exactly is the household debt. 114% of annual income, perhaps? Anyway, it looks like we are looking at few more years of decreasing consumption, to get to the year 2000 level of household debt. And even that level is probably too high. So, mostly troubles ahead for US economy, no matter who the next president is going to be.

jpike• 14 years ago

I painfully disagree with this article.

nodename• 14 years ago

The first paragraph shows we're not talking real world here: Obama a "left-wing president"?

jarek• 14 years ago

That quote is presented as Mitt Romney's supposed view on "what would make things worse", not the Economist's.

ams61105• 14 years ago

He's not?

potatolicious6• 14 years ago

He really isn't. Some aspects of his administration are centrist-liberal (see: healthcare reform), and maybe to the largely-very-right-wing mainstream political sphere of the USA he's a leftist, but on the global stage Obama is pretty firmly in the center.

known• 14 years ago

How can https://en.wikipedia.org/wiki/American_middle_class cope with https://en.wikipedia.org/wiki/Renminbi#Value economic/export/currency tricks, if every country follows them.

America’s economy is once again reinventing itself

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