The Perils of Productivity

Initial claims this week were at 366k – dropping by 5,000 from last week but only because last week’s 368,000 number was revised upward to 371,000.  This week’s numbers will probably be revised upward by next Thursday.  So it goes.

The problem we are facing now is decreasing productivity, as Denninger explains in detail here.

For a long time in the 1980s through maybe 2005, productivity grew largely as a result of technical innovations – desktop computers, laptops, cell phones, internet speed and accessibility.  We were able to do much more in the same amount of time with roughly the same resources.  Information technology expansions in business helped boost the GDP.  At this point, though, the internet has about run its course as far as offering us improvements in how much we can get done.  Obama’s ignorant lament about ATMs replacing bank cashiers has a tiny grain of truth to it.  Innovation in computer technology and robotics has replaced a lot of marginally skilled workers.  Dozens of stockers and cashiers in a brick-and-mortar store can be replaced by a website. 

I don’t think this is necessarily a problem.  I think the free market would figure out a way to deal with it.  I don’t think the government can fix it – which is one of the really stupid things government and unions are trying to do.  Their answer is to employ more government workers to provide more unnecessary, unwanted, wasteful and inefficient government “service”.  If government were inefficient enough, according to their thinking, the state could employ everybody.  Remind me again how that worked out for the Soviets, how it’s working out in Greece and most of Europe now, and how it will work out for us and the Chinese in the future. 

I know there are plenty of people running around telling everyone not to listen to the gloom-and-doomers.  Fine.  If people want to believe that happy days are here again, more power to them.  Such folks might want to keep a good supply of Xanax and/or vodka on hand.  I don’t mind at all if they turn out to be right.  But they are not. 

My advice is that people get anything they think they need to survive a collapse now – certainly before the end of the summer, preferably sooner.  At the very least, get a barrel and fill it with water.  The price of canned food has shot up over the last few months, but make sure you have some.  Pick up some junk silver coins.  Save your nickels and the pennies minted before 1982.  Get a couple of packs of butane lighters and extra batteries.  If you see .22LR ammunition anywhere, buy it.  Get some non-hybrid beans and grow some food.  It’s minor stuff, but it’s something.