Thomas Friedman is Way Off Today

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Wednesday, 30 January 2013 04:58

That's a cheap shot derived from the information that the NYT gave us at the end of Thomas Friedman's column: "Maureen Dowd is off today." Nonetheless it seems an appropriate response to a piece that tells real wages for most workers are stagnating because:

"In 2004, I wrote a book, called 'The World Is Flat,' about how the world was getting digitally connected so more people could compete, connect and collaborate from anywhere. When I wrote that book, Facebook, Twitter, cloud computing, LinkedIn, 4G wireless, ultra-high-speed bandwidth, big data, Skype, system-on-a-chip (SOC) circuits, iPhones, iPods, iPads and cellphone apps didn’t exist, or were in their infancy.

Today, not only do all these things exist, but, in combination, they’ve taken us from connected to hyperconnected."

So Facebook and Twitter are the cause of wage inequality? I knew there was some reason Mark Zuckerberg rubbed me the wrong way.

Friedman also tells us:

"we have record productivity, wealth and innovation, yet median incomes are falling, inequality is rising and high unemployment remains persistent."

Well the first part of this statement is almost always true. Except for short periods at the start of recessions, productivity always rises, implying greater wealth and presumably record innovation (not sure how that is measured).

Anyhow, it is not clear why Friedman finds anything surprising about this coinciding with high unemployment. Those of us who follow the economy would point to the fact that nothing has replaced the $1.2 trillion in annual construction and consumption demand that we lost when the housing bubble collapsed. And when we get more demand employment would grow, labor markets would tighten and we would see most workers in a position to get higher wages. There is no mystery here to folks who know basic economics and a bit of arithmetic.

Friedman wants people to have:

"more P.Q. (passion quotient) and C.Q. (curiosity quotient) to leverage all the new digital tools to not just find a job, but to invent one or reinvent one, and to not just learn but to relearn for a lifetime."

Yeah, it would be great if people had more passion, curiousity and learned more, but it's not clear that this would affect wages much for the 14.9 million people working in retail, the 10 million people employed in restauarants and the 1.8 million employed in hotels. In other words, even in Friedman's hyperconnected world, a very high percentage of jobs still do not offer many opportunities for passion, curiousity, and learning.

The reason that these people are not sharing in the benefits of productivity growth, as they did in the period from 1945 to 1973 is that the folks controlling economic policy lack passion, curiousity and an interest in learning. They think it's just fine that we waste $1 trillion a year due to an economy that is below full employment and that 15 million people are unemployed and underemployed.

Anyhow, maybe we can get the NYT to fix that line about Maureen Dowd.