Wednesday, March 4, 2009

Miracle of the Market

Mark Perry has a great post, with the graphic copied here, that reminds us of the incredible advances in worker productivity and market efficiencies that we all enjoy today.

11 comments:

CDLIC said...

Scott,

It would be very interesting to research a comparison of the costs of government/state services over the same time period -- inflation adjusted.

Don Harrison said...

These numbers underlie the question Obamaniacs never ask themselves: why are we wealthier than our grandparents? And the answer: because we can do more with less. Or as the economists put it, productivity growth, which is fueled by market-directed capital, which they in Washington seem to be bent on destroying.

Mark Gerber said...

Hi Scott,
I couldn't help but notice that almost every one of these items is mostly imported today. Even in my own case, the last time I purchased most of these items it was made in Asia! I'm not sure what that means, but should the dollar crash, the current figures would change dramatically.
Mark

Mark A. Sadowski said...

I have way too many of these items. (Inherited wealth.) This is a major reason why I work for my country and not for myself anymore.

Scott Grannis said...

Mark: Should the dollar crash, it would undoubtedly result, eventually, in higher prices for imported goods. But foreign manufacturers generally find it very difficult to raise their prices here when the dollar depreciates. I don't think the prices of the goods in that list could ever return to where they were before in terms of hours of work. The whole world has experienced a tremendous surge of productivity and efficiency. That's the beauty of free trade, because it dramatically expands markets and brings intense competition to bear.

Scott Grannis said...

Mark S: We wouldn't be having these discussions if it weren't for free trade and free markets and technological advances.

Bernard said...

Scott,

In response to your early comment about Amex not wishing to be in consumer credit, I just had one of my credit cards closed due to inactivity even though I have great credit. This is happening all and essentially hurting peoples credit and raising their interest rates at exactly the wrong time.

This is criminal and a great example of the state of America, the get it while its good and the governmentis on the dole, and sc*ew everyone else.

A pity...

Bernard said...

And it was Bank of America....

Paul said...

Bernard,

Does that really hurt your credit? I had a couple cards closed recently for the same reason, and I've never had a credit blemish in my life.

Bernard said...

Paul, in answer to your question, yes it will. When one of the 3 credit bureaus picks up on it, it will negatively impact your credit score because it is a removal of credit, regardless of why. They do not log why the credit limit was reduced. After this occurs, it is likely those same credit card companies will raise your interest rate due to the change in your credit score. Lovely how that works, huh? In my case, I might be spared because the credit bureaus never had an accurate picture of my credit profile and thus never registered the now closed card I had open for the past 7 years. That is another issue I have with the current credit card consortium. The credit bureaus are great at capturing negative events but could care less about accurately portraying your true credit profile by doing research to capture everything and maintain appropriate up to date records.

At this point, I am wondering what ties the credit companies and bureaus have. It is easy to see where there could be a conflict of interest similar to rating agencies and the companies securitizing the mortgages/abs…

Bernard

Scott Grannis said...

CDLIC: that would require some serious research to answer correctly. But the quick answer is that state government spending has risen faster than nominal GDP just about everywhere for a very long time. If spending is a proxy for the cost of government, and nominal GDP is a proxy for median incomes, then it takes us more hours of work to pay for the government we get today versus almost any time in the past.