Is Economic Growth Coming to an End?—Part II

The Decline Narrative and the Data

In my column last week at The Breakthrough Institute on Robert Gordon's analysis of US per capita economic growth, I identified what I believe to be an error in his calculation of post-1950 growth rates. Such an error matters because Gordon's recent discussion paper has been called “the summer’s most talked about working paper in economics” and argues a data-based case for US decline. My view is that such discussions should at least start with a solid empirical basis and re-checking assertions grounded in data claims is fair game (not all agree, however).

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Is Economic Growth Coming to an End?

How Robert Gordon Misreads the Data and What It Tells Us About the Dismal Science

Over that past month there has been much discussion of a new paper by Robert Gordon, a prominent economist at Northwestern University, which carried the provocative title: Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds.” (See for instance, Annie Lowrey here, the Economist here and David Keohane here).

In what Tim Harford called “the summer’s most talked about working paper in economics,” Gordon argues that the economic growth of the past century may represent an aberration from the normal state of society, which experiences little economic growth. Look far enough back in time Gordon says and the world had minimal, if any economic growth, and looking ahead, we may be returning to that dismal state. Gordon explains that he is raising “the audacious idea that economic growth was a one-time-only event."

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AP: The Secret History of the Gas Revolution

T. Boone Pickens and the Myth of the Lone Entrepreneur

At a TED talk earlier this year, the oil and gas billionaire T. Boone Pickens dismissed President Barack Obama's claim in his State of the Union address that the technological innovations that resulted in today's glut of natural gas depended on 30 years of federal investment. "I witnessed my first frack job in 1953," Pickens told the crowd, "I hear the President say the DOE [the Department of Energy] invented it 30 years ago and I don't know what he's talking about."

Since then, the claim has become a conservative talking point. "We have the hydraulic fracturing and natural gas revolution because of private entrepreneurs," claimed a gas expert from the libertarian-minded Institute for Energy Research in National Journal, "not because of the federal government or federal programs."

But now, after an in-depth investigation, the Associated Press has come to the opposite conclusion: the federal role was crucial.

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Questioning the Wisdom of Denier Discourse

Labels as a Barrier to Action on Climate Change

It's difficult to imagine today, but only four years ago, we were debating the wisdom of calling those who oppose action on climate change "deniers." In a 2008 interview with PRI The World, I suggested that the term "denier" was counter-productive. Resorting to extreme language and name calling in the climate debate not only inflames tensions among opponents, but for a wider spectator public struggling to come to terms with climate change as a societal priority, resorting to "denier" rhetoric misses the opportunity to more persuasively connect the issue to commonly shared values, or to fashion compromise around policy approaches.

As we look past the election to what might be possible on climate and energy policy during the next Administration, we would be well served to reflect carefully on the labels and rhetoric we all-too-easily come to adopt in reference to opponents and allies alike.

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The Great Cosmopolitan Stagnation

The Marriage of Technological Pessimism with Geopolitical Optimism

To the extent that the American elite shares a consensus, it is a combination of pessimism about technology and optimism about politics—particularly world politics. In my view this synthesis provides a picture that is the opposite of reality, in which amazing technological progress will continue to take place on a planet whose politics is characterized by national and sub-national conflict, irrationality, and ignorance. This seems so obvious to me that I don’t understand why most educated and thoughtful people in the U.S. and the world generally hold perceptions that are exactly opposite mine. In the words of the eighteenth-century British poet Christopher Smart, who was confined to London’s infamous Bedlam asylum: “I said they were mad, and they said I was mad, and damn them, they outvoted me.”

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The Politics of Prediction

A Review of Nate Silver's The Signal and the Noise

Nate Silver is a Wunderkind. Not yet 35, Silver has already developed the leading statistical tool for assessing prospective professional baseball players, been consulted by the 2008 Obama presidential campaign to help assess the implications of opinion polls for the election’s outcome, writes a widely read New York Times blog and in 2009 was named by Time magazine as one of the 100 most influential people in the world. Along the way, and apparently in his spare time, Silver made more than $400,000 playing professional poker (before losing about a third of it and moving on). Silver’s initial foray into professional poker turned a $100 initial stake into $15,000, which was apparently enough to convince Silver to quit his day job, which has been to the benefit of the rest of us. Silver adds to this impressive list of accomplishments with the publication next week of his first book The Signal and the Noise: Why Most Predictions Fail – But Some Don't (Penguin USA).

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Diffusing Public Anger Over Climate Change

Study tests emotional reactions to different frames

If you live in an American city, chances are this summer you have experienced the health effects of climate change.  As Richard Harris reported at NPR News earlier this month, people who live in cities -- where there are far fewer trees and lots of pavement -- are more vulnerable to the effects of extreme heat. Rising temperatures associated with climate change not only put people at risk directly, but can also lead to more severe asthma and allergies.

Focusing on the human health effects of climate change -- and the benefits to health if we take action -- opens the door to an important new way of communicating about climate change, a strategy that can inspire hope among those disengaged on the issue, while diffusing anger among those otherwise opposed to action.  As Richard Harris reported in a follow-up story at NPR News, research that I have been conducting with Edward Maibach and colleagues shows that people across the political spectrum respond more favorably to warnings about climate change when the issue is framed as a public health problem rather than as an environmental threat. 

As I told Harris about the strategy: "Not only does it lead to emotionally engaging responses among a broad cross section of Americans, it also helps to localize the issue for people and to view the issue as more personally relevant."  The research offers evidence of a frame of reference that could help define common ground on the issue:  "The idea of protecting people, the innocent especially, from harm, and caring for the innocent, is a value that's widely held across the political spectrum,"

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Should We Swap Energy Subsidies for a Carbon Tax?

The Surprising Reality

Over the past few months there has been increased talk in Washington of taxing carbon emissions. Rep. Jim McDermott (D-WA) has introduced legislation, while former Rep. Bob Inglis has proposed replacing today's subsidies with a carbon tax.

The view among most economists is that a tax would be more efficient at reducing emissions than subsidizing clean energy. Over the years, Harvard economist Greg Mankiw, an advisor to George W. Bush and now Mitt Romney, along with President Ronald Reagan's economic advisers, Martin Feldstein and Arthur Laffer, have all endorsed carbon taxes, along with environmental economists, like Harvard's Robert Stavins.

Breakthrough Institute is on the record supporting a low carbon tax (here and here), subsidy reform, and increased federal spending on energy innovation. We were thus interested in calculating how much of a price incentive a carbon tax would offer for the deployment of solar, wind, nuclear, and natural gas, the leading low-carbon technologies.

What we found surprised us. A $20 per ton carbon tax would offer just one-half to one-fifth the incentive of today's zero carbon subsidies — but at nearly 10 times the cost. (Our full analysis can be read here, and an Energy and Environment story on the study follows below.)

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Reflections on Mann and Ornstein’s Quest for Democratic Accountability

Liberals Should Lead on Rebuilding Our Civic Culture

Earlier this year, Thomas Mann and Norman Ornstein published It’s Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism.  As they detail, to the extent that both parties have become more ideologically consistent in their makeup, hyperpartisanship in Congress has collided with a Constitutional system that depends on compromise and collaboration to get things done. But as they also argue, things are made much worse by an asymmetry in American politics, as the Republican party has veered far to the right relative to a Democratic party that has moved more modestly to the left.

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Friedrich List and Economic Nationalism

A Personal Credo, Part III

In my two previous posts, I argued that Epicurean ethical theory and Lockean political theory are the most useful guides to ethics and politics in a universe that scientific discovery has emptied of magic and divinity. I’ll conclude this personal credo by explaining why I think that economic nationalism, in the tradition of Friedrich List, is the tradition of political economy most compatible with the republican liberalism of John Locke.

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