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I look first and foremost at energy [0] and would typically measure from 1970 since that seems to be the last time we had a major change in economic regime [1].

by roenxi 2y ago

I look first and foremost at energy [0] and would typically measure from 1970 since that seems to be the last time we had a major change in economic regime [1]. Although admittedly the US has grown since the 70s, stagnation didn't set in until around the 2000s. So as far as sloganing it'd have to be sometime around then. And I don't think the US is growing at all. The energy picture and GDP/M2 [2] both suggest it is treading water at best although the situation is hopefully a little better than those timeseries suggest since there should be some efficiencies from better tech. But the political situation to me is the most telling. We shouldn't be seeing the sort of slow-motion collapse of the polity that we are in the US unless there was also serious slow-burn economic pressure. EDIT I can't decide which follow up comment to respond to so I'll just put it here: The energy efficiency argument isn't really valid - improvements in energy efficiency tend to cause usage to increase; it is a textbook case of Jevons' paradox [3]. [0] https://ourworldindata.org/grapher/primary-energy-cons?tab=chart&country=OWID_WRL~CHN~USA https://ourworldindata.org/grapher/primary-energy-cons?tab=c... [1] I have actual arguments, but I don't think it is controversial so https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ gets the point across. [2] https://fred.stlouisfed.org/graph/?g=eTtE https://fred.stlouisfed.org/graph/?g=eTtE [3] https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox

whynotminot 2y ago
Energy usage seems like a pretty bad indicator to start with, given vast efficiency improvements in nearly every aspect of industry? As a contrary example, we might well see energy usage massively surge here in the short run due to generative AI. And at this point there’s not much evidence there’s actually much real GDP value creation yet in any of that at all.
bobthepanda 2y ago
Primary energy consumption would matter if energy efficiency did not exist. Generally speaking all sorts of industries use electricity way more efficiently in the US, which is why that number has not really budged; it is not really providing economic output to replace all our LEDs to inefficient incandescents, for example. China's graph looks substantially different because it started from an extremely low base living standard.
s1artibartfast 2y ago
I don't necessarily want to disagree with the you on your no growth claim. what I want to know is why you think that is evidence of for poor Capital allocation, and not evidence of poor opportunities for Capital allocation. It seems like the evidence supports both (no growth). The main difference is that the poor allocation hypothesis requires the additional assumption that investors are too stupid to figure it out or dont want to make a return.
- roenxi 2y ago
  The first result I get when I search for "us homeless tent city" is https://www.latimes.com/california/story/2024-08-03/as-san-francisco-clears-homeless-camps-where-will-people-go https://www.latimes.com/california/story/2024-08-03/as-san-f... . That looks to me like a population who could make use of a bit more allocated capital. I don't buy the idea that capitalism is done in any country that still has substantial homeless populations; there is obviously a need for more something. And I don't think the investors are confused by the situation; I mean, I know about it. I'm an investor and I'm claiming the trend is so big I can spot it from more than a continent away. ~40% of the US economy is government spending and there is a central planning committee that was publicly committed to keeping interest rates at 0% up until about 2 years ago which, funnily enough, makes it damn hard for rational people to make their voices heard on where money should go. The structurally important thing since '07 is positioning to be in the path of government largess and to be near the front of the queue for bailouts when the losses are realised. That isn't an environment where efficient capital allocation is possible. Since efficient capital allocation is probably impossible, I don't expect it to be happening. It doesn't seem to be happening either, there are obviously opportunities, there is a huge and increasingly upset political constituency in the US who are screaming that the current situation isn't working for them.
  - s1artibartfast 2y ago
    I just dont see the global capitalist conspiracy to not make money in what you are saying. What is the investor ROI for a typical homeless person? Are you claiming they hate homeless more than they like making money? >Since efficient capital allocation is probably impossible, I don't expect it to be happening. It doesn't seem to be happening either, there are obviously opportunities, there is a huge and increasingly upset political constituency in the US who are screaming that the current situation isn't working for them. I think you are conflating efficiency of allocation and the availability of opportunities and rules of the system. Investors are allocating as efficiently as they can given the investment opportunities available. There are are huge policy problems preventing the better opportunities. Central planning of the interest rate and 40% government spending is not an allocation selected or determined by the market, it is a policy choice. Markets operation within the rules and incentive established by policy. What you are calling market failure is policy failure.

by roenxi 2y ago

whynotminot 2y ago

Energy usage seems like a pretty bad indicator to start with, given vast efficiency improvements in nearly every aspect of industry? As a contrary example, we might well see energy usage massively surge here in the short run due to generative AI. And at this point there’s not much evidence there’s actually much real GDP value creation yet in any of that at all.

bobthepanda 2y ago

Primary energy consumption would matter if energy efficiency did not exist. Generally speaking all sorts of industries use electricity way more efficiently in the US, which is why that number has not really budged; it is not really providing economic output to replace all our LEDs to inefficient incandescents, for example. China's graph looks substantially different because it started from an extremely low base living standard.

s1artibartfast 2y ago

I don't necessarily want to disagree with the you on your no growth claim. what I want to know is why you think that is evidence of for poor Capital allocation, and not evidence of poor opportunities for Capital allocation. It seems like the evidence supports both (no growth). The main difference is that the poor allocation hypothesis requires the additional assumption that investors are too stupid to figure it out or dont want to make a return.

roenxi 2y ago
The first result I get when I search for "us homeless tent city" is https://www.latimes.com/california/story/2024-08-03/as-san-francisco-clears-homeless-camps-where-will-people-go https://www.latimes.com/california/story/2024-08-03/as-san-f... . That looks to me like a population who could make use of a bit more allocated capital. I don't buy the idea that capitalism is done in any country that still has substantial homeless populations; there is obviously a need for more something. And I don't think the investors are confused by the situation; I mean, I know about it. I'm an investor and I'm claiming the trend is so big I can spot it from more than a continent away. ~40% of the US economy is government spending and there is a central planning committee that was publicly committed to keeping interest rates at 0% up until about 2 years ago which, funnily enough, makes it damn hard for rational people to make their voices heard on where money should go. The structurally important thing since '07 is positioning to be in the path of government largess and to be near the front of the queue for bailouts when the losses are realised. That isn't an environment where efficient capital allocation is possible. Since efficient capital allocation is probably impossible, I don't expect it to be happening. It doesn't seem to be happening either, there are obviously opportunities, there is a huge and increasingly upset political constituency in the US who are screaming that the current situation isn't working for them.
- s1artibartfast 2y ago
  I just dont see the global capitalist conspiracy to not make money in what you are saying. What is the investor ROI for a typical homeless person? Are you claiming they hate homeless more than they like making money? >Since efficient capital allocation is probably impossible, I don't expect it to be happening. It doesn't seem to be happening either, there are obviously opportunities, there is a huge and increasingly upset political constituency in the US who are screaming that the current situation isn't working for them. I think you are conflating efficiency of allocation and the availability of opportunities and rules of the system. Investors are allocating as efficiently as they can given the investment opportunities available. There are are huge policy problems preventing the better opportunities. Central planning of the interest rate and 40% government spending is not an allocation selected or determined by the market, it is a policy choice. Markets operation within the rules and incentive established by policy. What you are calling market failure is policy failure.