Ars Technica has a short post up reporting on a discussion about slowing US economic growth at a TED conference. The first speaker apparently characterized the problem thus:
In his talk today, Gordon named four “headwinds” that confront the nation—demographics, education, debt, and inequality—which point to an ebbing American economy. Combined, these four factors cut growth in half, and innovation is needed to offset this trend. But that innovation is not likely to materialize, said Gordon. If we have less innovation over the next 50 years, there will be even less growth.
What’s noticable is that three of those four “headwinds” – education (or rather its cost), (private) debt, and economic inequality – could be directly addressed by the US government. Instead, the way his statement is presented, they are shown to be inevitable and as having to be mediated by further innovation. But as the good man himself acknowledges, this is not likely to work out.
Similarly misleading is:
From 1891 to 2007, American economic growth was 2.0 percent per year
The problem with this time frame is that it mixes up the robber baron era before the Great Depression, the New Deal era, World War 2, the post-war economy up to the onset of the neo-liberal era, and then the neo-liberal era. On the one hand this equates very different regulatory frameworks, and very different public infrastructure. The well-funded and active welfare state of the post-war era with relatively strong unions has almost nothing in common with today’s US. This also leads to this relatively low 2 percent number when much of the low growth is actually part of the neo-liberal era (Trading Economics – post war only). Breaking down GDP growth in this manner identifies much better how the neo-liberal era, which produces the afore-mentioned three headwinds, is a drag on growth.
TED is supposed to be outside-the-box-thinking yet it seems as if neither speaker pointed out that the problems are very much created by the (lack of) regulatory and public framework in the US, even though:
[…] both speakers agreed on one point: the labor force is being left behind, and we must work to solve the educational and population problems that confront the United States.