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Home Publications Blogs Beat the Press The Technological Transformation in Thomas Friedman's Mind

The Technological Transformation in Thomas Friedman's Mind

Saturday, 07 December 2013 23:22

No one expects Thomas Friedman to base his columns on evidence, but he strayed even farther than usual today. The piece is a complaint that the United States is not prepared to deal with "a huge technological transformation in the middle of a recession." The data won't support that one. 

The usual measure of technological progress is productivity growth. That has been lagging in this upturn, averaging close to 1.0 percent for the last three years.



We know that Thomas Friedman has lots of stories from his cab drivers and other people that he talks to, but most of us might opt to rely on the data from the Bureau of Labor Statistics instead.

Friedman is also a bit behind the times in telling us about the loss of middle skilled jobs. That might have been a story for the 1980s, but the data have not supported Friedman's story for at least a decade.

Friedman also feels the need to lecture liberals, saying they:

"need to think more seriously about how we incentivize and unleash risk-takers to start new companies that create growth, wealth and good jobs. To have more employees, we need more employers."

Of course many people on the left have given lots of thought to exactly this issue. Putting a tax on financial speculation and breaking up the big banks would reduce the amount of resources diverted to unproductive activity in the financial sector. Developing a more efficient alternative to patent monopolies to support pharmaceutical research would free up hundreds of billions of dollars a year. And of course the main agenda item at the moment simply has to be to stimulate the economy to end the $1 trillion needless waste of potential GDP.

The problem is not a lack of thinking on the part of the left. The problem is that Friedman is too lazy to pay attention to what people on the left are saying.

Comments (9)Add Comment
written by JDM, December 08, 2013 12:13
Want to incentivize those rich risk takers, Tommy Boy? Okay. How about we start by making it harder for them to make easy money by cheating people out of hundreds of billions and then get away with it paying 10% of their ill-gotten gains in finex (those few times they pay at all). Then those people might have to try to do honest work that requires workers.
News media still prescribes leeches for the 99%, 5 years later and counting
written by jaaaaayceeeee, December 08, 2013 12:46

Your prescription would still work, 5 years later, for a financial transaction tax, fixing TBTF, diverting from unproductive financialization, replacing pharma's patent monopoly system, and stimulating economic demand.

But such proven policy is verboten in Congress and news media. Friedman is as bad as the Tory tea partier and the venture capitalist, who thought that they schooled Paul Krugman, May 30, 2012, on BBC's NewsNight. A snippet on how they ignore depressed demand:

Andrea Leadsom: Don’t, don’t you think, though, that efforts to reduce corporation taxes, to deregulate, to make it easier to start new companies ... to actually improve the private sector element of the economy are going to have more impact than simply borrowing more money to create jobs (Krugman interrupting, "No".) and flow money to the economy and increase tax?

Krugman: "No, we have survey evidence from the USA about what is holding private businesses back, and overwhelmingly, the answer is lack of sales, there just is not enough demand; constraints on capital are not an issue...what has changed is there’s no demand...and that’s what these austerity policies are making worse, (Andrea interrupting, garbled) they are actually inhibiting the private sector..."

Jon Moulton: Not all austerities, uh, policies have failed, have they? Some have actually prospered.

Krugman: Every one of those success stories turns out to involve, either, a situation where interest rates were quite high to start with so you can bring them down, or a situation where you have a large currency devaluation, which is not going to work now, because you have to have some prosperous economy to devalue against, and there’s nobody out there right now.


Andrea Leadsom: There are, there are.

Jon Moulton: (unintelligible) clear it up in Estonia.

Krugman: Estonia? No, it just doesn’t fit your story at all.

Host Jeremy Paxman: I don’t even know the evidence on the Estonia example. I don’t think we have time to get into it, either, thank you.

Jon Moulton: I’d love to.

Krugman: I’m sure you would.

Host Jeremy Paxman: Yes, come back and do that. Tell us all about the Estonian economy. Thank you all very much, thanks.

Thomas Friedman Advances More Loser Liberalism in America to Keep the Middle Class Down
written by Last Mover, December 08, 2013 5:26

Friedman says:
In a less integrated and less automated world of walls, where unions held more sway, many Americans could live an average middle-class lifestyle with average skills. In today’s hyperconnected world without walls — when more Indians, Chinese, computers, robots and software can perform more average blue-collar and white-collar jobs — the only high-wage jobs are increasingly high-skill jobs. “Over the last decade, job growth in the industrialized world has almost exclusively been at the top end of the PISA skill distribution,” explained Schleicher, “while routine cognitive skills, the kinds of things that are easy to teach but also easy to digitize and outsource, have seen the steepest decline in demand.”


In the past the vast successful middle class of America didn't earn a living through above average productivity, as much as it just coasted along with average productivity and routine cognitive skills to collect it through the monopoly power of unions combined with isolation from global competition.

Never mind the reign of prosperity and full employment that followed WWII that created the middle class. Never mind the labor that was paid its share of productivity gains in that period. Never mind the high taxes on the rich in that period. Never mind the absence of lobbyists in that period. Never mind the absence of economic predators in that period, banished earlier as robber barons.

Never mind that the greatest problem of productivity itself for the last five years has been idle unused existing resources which could produce a trillion more in annual output.

And what does Friedman talk about? Why training the unemployables in America of course with more skills so they can jump right in with the rest of the world to compete and keep up and have jobs produced by what? Demand created out of thin air?

This is what a loser liberal looks like America, grasping for anything and everything to explain and distract from what actually brought the middle class down - economic predators, plain and simple, who survive precisely by crushing the very free market competition from the supply side that Thomas Friedman glorifies as the key to economic recovery.

The earth is not flat Thomas Friedman. It is walled off to the heavens with protectionist barriers, whether from government or the private sector, to extract productivity gains from wherever they arise and funnel them to the 1%. Shame on Friedman for ignoring the root cause with distractions so trivial they are insulting.

What's next, an article on how a bright young kid in a foreign country created an app that reduces unemployment by uploading above average skills directly into the brain?
written by ifthethunderdontgetya™³²®©, December 08, 2013 7:56
In today’s hyperconnected world without walls —

Tom Friedman, or the Tom Friedman Column-Generator™?
written by Bloix, December 08, 2013 9:22
Silly Dean. "Incentivize and unleash risk-takers" means "cut taxes and eliminate consumer-protection regulations." "Think more seriously" means "adopt Republican policies." Don't you speak English?
IT is ironic that Friedman so frequently mentions math and science with his background
written by John Wright, December 08, 2013 10:15
If one looks at Friedman's background, a degree in Mediterranean studies and a degree in Middle Eastern studies, one might wonder how he did so well by avoiding math and science.

He quotes, "over the last decade, job growth in the industrialized world has almost been exclusively been at the top end of the PISA skill distribution" without giving ANY idea of how MANY of these jobs were created in the USA.

Friedman has a basic problem with scaling as he doesn't understand that a country will end up competing with other countries for high-skill and high-wage jobs.

There just aren't that many highly paid innovative jobs for Friedman's newly highly educated global workers.

Ralph Gomory (former IBM R&D chief) and Andrew Grove (former Intel head) criticized Friedman in print years ago for his unrealistic view that Americans could preserve many highly paid innovative jobs for Americans.

If one looks at R&D budgets for technology firms, for example, Texas Instruments spent 368 million on R&D (Innovative jobs) in the quarter ended Sept 30, 2013 with a revenue of 3244 million, or about 11.3% of revenue on R&D, this might support R&D salaries of half this or 5.7% of revenue.

So this technology company was able to pay only 5.7% of revenue toward innovative job salaries.

Applying this to other companies, leads to the conclusion that scaling up to large numbers of high paid innovative jobs is unlikely except in the mind of Friedman.

There just aren't that many innovative jobs to be had.

But Friedman does seem to accept as a necessary condition that 10% of Americans take home 50% of national income.

Friedman should mention how he has done well by repetitively publishing columns touting globalization while offering false hope to Americans through better education.

Friedman's career advice could be "don't study math and science, do what the boss wants and you too can be prominently featured at the New York Times.".

But we come back to the problem of scaling into many innovative New York Times jobs.

Math is hard
written by Victor, December 08, 2013 5:15
Even a dull old historian like me can read a table every now and then. I am sure Friedman could if he wanted to . . . For instance, he might start with our friends over at the BLS as Dean suggests. There he would find a table predicting which occupations will have the most job growth over the next decade, both in percentage and total numbers, if percentage is too tough a concept for him. http://bls.gov/emp/ep_table_101.htm. That tables shows that job growth will occur most for service workers--more Walmart clerks and fast food cooks. Hardly, the innovation economy.
written by watermelonpunch, December 08, 2013 9:09
@ victor : that link isn't working for me. Anyone have the correct?
Better link for BLS table
written by Victor, December 08, 2013 10:54
Sorry, I inadvertently added a period. Try this http://bls.gov/emp/ep_table_101.htm

The top three broad occupational categories in terms of predicted percentage growth according to BLS are: healthcare support, personal care and support, and personal care and support. In terms of total numbers of new jobs, it is office and administrative support, healthcare practitioners, and construction.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.