Response to WNYC Brian Lehrer interview

from the blog Emancipation Propagation:

Andy Kessler points out that to build an iphone in 1972 would have cost 100 billion dollars; one bit of memory in 1972 cost one dollar, and today's iphone comes with 32 gigs or roughly 32 billion bits of memory. He does so to make the point that technology improves the quality of life at the cost of inefficiencies (inefficient companies and processes and technology are displaced and eliminated).  And that only the productive in a market economy will survive. 

Politicians can arbitrarily meddle with market economies so that the productive do not survive.  By imposing regulatory legislation politicians tilt the favor not to the productive but to the politically connected.

Listen below to the contrast in perspective of those that want to reward not the productive but the politically connected.

Andy Kessler: WNYC Brian Lehrer interview

In this radio interview author Andy Kessler discusses the concept of creative destruction--where the quality of life of the consumer is improved as inefficient companies go out of business. The cynical radio host and his listener/caller's comments afford a treasure of insight into the mind of scarcity-based Luddites who want to force everyone to retrogress into lower quality of life and believe this is the first time inefficient jobs have been eliminated by efficiency technologies.

 

Comments

[Roger Hutflesz]

What would these folks say about "Grid Computing" ? e.g. :

https://secure.worldcommunitygrid.org/index.jsp

[monster beats studio]

Some banks will sputter, and maybe even fail, even the big boys. But they've already had two years since the end-of-the-world sell-off in March 2009 to get their acts together, and many can now pay dividends. Hopefully the FDIC is ready to dive in and remove the remaining toxic mortgage assets of any failing banks, along with their managements, and then refloat the institutions. This contingency should be well mapped out by now with the Orwellian-named "Orderly Liquidation Authority" in the Dodd-Frank law.

But along with a likely lower stock market and failing banks will be several positive effects that will finally kick-start the economy. Oil and wheat and commodities will see a 20%-30% drop in price as speculators run for the hills. This will be a de facto tax cut for consumers. Hiring should restart when businesses see normal short-term rates, most likely 2%.

Similarly, the dollar, suddenly backed by rising interest rates, will start to rise. Unlike those foolish enough to believe that a lower dollar is the path to growth, a higher dollar will lower prices across the board, especially at Wal-Mart—shoes, shirts and sugar. Even better, the companies that are leading the economy, such as Apple and EMC, will benefit from lower costs for memory and storage, as will Google and Facebook stocking their data centers. This price cut on productivity tools will be a good thing for the economy and the real wealth effect.

And even better, despite rising costs from higher short-term rates, surviving banks will lose their fear of rising long-term rates and will start lowering banking spreads, signaling their willingness to lend and fund a real recovery.