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The Case of the Missing Productivity


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February 05, 2007

The Case of the Missing Productivity

Michael Mandel

This morning's lengthy WSJ piece on "How War's Expense Didn't Strain Economy" managed to not mention strong productivity growth at all. How odd, considering that's the main reason why the economy has been able to support both the Iraq war and consumption growth at home.

09:02 AM

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Moreover my assumption (based upon zero research or statistical analysis) is that a war (at least a small scale war in context of a strong economy) serves to reduce productivity growth -- since a good chunk of bright energetic labor is devoted to something OTHER than making me a cheaper plasma TV, or building Micro Mosquito helicopters so Radio Shack isn't completely sold out when I'm wanting to buy one.

I think it's telling us productivity growth is strong and would be even stronger if everything was peace, love, and kittens. Which is good.

Posted by: Kevin at February 6, 2007 12:07 PM


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