William Watson: The last thing we need is Ottawa taking on the productivity problem
William Watson: The last thing we need is Ottawa taking on the productivity problem
The best thing Ottawa can do for productivity is to stop wasting valuable resources on performative exercises. Read more.
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Supply side economics is a failure. This article writer would have us keep banging that broken drum forever, it seems.
And referencing Friedrich Hayek? Might as well look to Milton Friedman for answers.
I'm not sure Keynes has the answer either. But tbh I don't think any economic theories have really got a grasp on the 21st century
But also, I'm just some guy who spend ~20 seconds thinking about this :P
Gotta bring back the Trust busting that Teddy Roosevelt did AND bring back the Keynesian policies his cousin Frank brought in.
The economic problems of the 21st century aren't anything new. Just there's an unwillingness to do anything about them.
I do think this is a new economic paradigm. Look at the economics of Silicon Valley, it's unlike anything we've seen before. Most of the S&P 100 value is in tech, and these industries have several features that make them unique. Their products have a very high upfront cost and basically zero marginal cost. They can also change their products after they've sold them, and their products have feedback loops that not even they can understand.
It's just supply side economics. Wealthy people have so much money that all of the good investments are already over funded. But they need to put all that money somewhere. So they put their money into bad investments and try to get it out before everyone else does before it becomes widely known that the books are being cooked.
So we end up with obvious scams like crypto currency, NFT, etc. The smart people got out of those things before anyone else and dumped it into AI like ChatGPT and used their control over to media to hype that up.
And then you have companies like Facebook and Apple that are way over valued, and need to invent new products lines. So we end up with things like the Metaverse and "Apple Vision Pro." Products that only the wealthy think is a good idea but don't make sense for people that are struggling to pay thew rent.
Netflix has topped out on subscribers. Which would normally be fine, they have solid revenue, and could have a sensible budget for creating new content, have solid profits that they could send to investors as dividends. That's how it used to work, but you aren't going to get billionaire over-investment without promising MASSIVE GROWTH in the future. So they're trying to come up with bullshit schemes that will theoretically shake down their customers for more money so they can project more profit.
And you got reddit, similarly coming up with a scheme that theoretically will result in a lot of revenue, so they can project for future profit.
Essentially, bullshit is the product now. The goal is to entice billionaires to dump the vast amounts of money they don't know what to do with into your company.
We got the Metaverse, some pictures of bored monkeys, some VR headsets (that no one can afford) that have the functionality of a phone. And we got the general enshittification of everything.
Supply side economics. Does it feel like this way of doing things is working well?