Is the Great Stagnation Over?

“Cowen argued 10 years ago that the previous set of general purpose technologies—machines and factories powered by fossil fuels and electricity—had run their courses, at least in the United States and other developed economies. When eventually nearly everyone had a car, electric appliances, and indoor plumbing, technological improvements were being made just at the margins. The result was a significant slowdown in the rates of productivity growth and incomes.

The online crew assembled by AEI expressed some optimism that a whole bunch of new technologies were on the verge of jumpstarting our sluggish economy. Strain declared himself very confident that the Great Stagnation is not permanent. He suggested that entrepreneurs were even now exploring how to adapt a whole suite of new technologies—batteries, vaccines, artificial intelligence, driverless trucks—to their best economic uses and whose benefits will become increasingly evident over the coming decade.

Tucker chimed in that it takes a while for entrepreneurs and innovators to figure out how to profitably apply ideas and new technologies. She noted that her fellow economists have been offering two excuses for why advances in digital technologies were not showing up in productivity figures. The first is that the enhancements were not being measured properly. The second is that the elaboration of general purpose technologies, e.g., steam and electricity in the 20th century, needs 20 to 30 years of experimentation before businesses can figure out how to really rev them up to boost productivity. She pointed out that people initially thought electricity was about the light bulb, but what really promoted economic growth was powering machinery in factories and electric appliances at home.

Cowen cautioned that many technological advances would doubtlessly improve human welfare but still might not show up in U.S. gross domestic product (GDP) and productivity statistics.”

Remote work is overrated. America’s supercities are coming back.

“If you are a biotech engineer who specializes in a certain branch of biotech and you move to Silicon Valley, where at any moment in time there’s a thousand biotech firms looking for biotech engineers, you might be able to find biotech firms that really value your branch of biotech. That same person moves to Chicago, when at that moment in time there’s a handful of firms looking for employees in biotech; well, you might have to settle for a less good match, a biotech firm that is not really looking for your area of specialization. Notice that it really favors both the firm and the worker. Firms move to the Bay Area and they’re really looking for somebody that is specialized in a certain branch of biotech; and vice versa, it’s much harder for them in Chicago.

And also notice this advantage is not there for unskilled or non-specialized labor. If you are a janitor or a secretary or a welder, the advantages of agglomeration don’t really mean much for you — but if you are a specialized scientist or mathematician or engineer or an innovator, that market thickness will provide a better match. So that’s one important channel that has been documented to improve the productivity both of the firm and the work.”

“for the innovation sector broadly defined, I think they’re going to see quantifiable losses in productivity as measured by quantifiable losses in the amount of innovation these types of workers will be able to create. A lot of the existing research points to the fact that by clustering geographically, these inventors, before Covid, were significantly more productive in quantifiable ways. I have a paper where I quantify the number of patents that an inventor could gain by moving to a tech cluster and the quality of those patents as measured by patent citations. So we’re talking about quantifiable causal effect on productivity and creativity; the moment you start losing that creativity and productivity, that’s when both the employer and employee have something to lose from this decentralized application.”

“some occupations can be probably managed in the long run remotely without huge losses in productivity. Probably that depends, from industry to industry and employer to employer.”

“So we’ve been talking a lot about labor demand — people moving to superstar cities to get these good jobs. There’s another facet, which is labor supply. A lot of young people actually want to live in these places — a lot of young people were attracted by the urban amenities. Right now it’s not too surprising that places like San Francisco and New York are deserted by a lot of these same people, because right now a lot of these urban amenities are shut down.
Assuming that we can go back to feel safe around each other and the vaccines can manage our safety effectively, I think it’s fair to assume that urban amenities will come back pretty much at the same level that existed before, so [the] labor supply of well-educated workers will keep flowing to these places.”

‘See Something, Say Something Online Act’ Punishes Big Tech for Not Snitching

“The legislation says any interactive computer service provider—that means social media giants, small blogs, podcast hosting services, app stores, consumer review platforms, independent political forums, crowdfunding and Patreon-style sites, dating apps, newsletter services, and much more—will lose Section 230 protections if they fail to report any known user activity that might be deemed “suspicious.”

“Suspicious” content is defined as any post, private message, comment, tag, transaction, or “any other user-generated content or transmission” that government officials later determine “commits, facilitates, incites, promotes, or otherwise assists the commission of a major crime.” Major crimes are defined as anything involving violence, domestic, or international terrorism, or a “serious drug offense.”

For each suspicious post, services must submit a Suspicious Transmission Activity Report (STAR) within 30 days, providing the user’s name, location, and other identifying information, as well as any relevant metadata.

Those submitting the user surveillance reports would henceforth be barred from talking about or even acknowledging the existence of them. STARs would also be exempt from Freedom of Information Act (FOIA) requests.

The bill, which comes amid renewed calls to stamp out domestic terrorism after the Capitol riot, is impressive in managing to be both completely invasive and utterly unconcerned with even appearing to be about protection, since the remedy—report within 30 days—would hardly help stop the commission of crimes”

“The bill would set up a massive new system of intense user monitoring and reporting that would lead to more perfectly innocent people getting booted from internet platforms. It would provide the government with a new tool to punish disfavored tech companies, and it would enlist all digital service providers to be cops in the failed post-9/11 war on terror and the drug war.”

“Worse than simply overloading the system, it would make federal agents investigate all sorts of ordinary Americans for harmless comments. It also seems likely to make finding actual terrorists and violent criminals even more difficult.”

The Air Force has already built and flown a prototype of its first new fighter jet in two decades