Tuesday, December 27, 2011

And Matt Yglesias followed it with a post on economic bubbles

I have trouble understanding how a smart guy like Yglesias manages to keep going further down this path, but when I've said that he prefers society to always have more younger people than older people, I meant it as a somewhat joking criticism.

The joke's on me, because he's pretty literal about it now as a path for growth:

 [If immigration and lax land use regulation prime a state for population growth] then you don't need any particularly optimistic beliefs to see that the state is primed for certain kinds of investment. We're going to need new houses for these new people in the short-run, and we'll need new schools & hospitals, new car dealerships, and new highways for them in the medium run. So we're investing. And with that investment happening we need new Whataburger franchises and new H-E-Bs and probably new power plants as well. And now suddenly we're on the high equilibrium. We need more accountants and more wedding planners, we're going to need some fancy restaurants, we'll need hotels, we'll need more of everything. And since we'll need more of everything and the price of new homes will remain moderate, we'll expect the population to keep growing as people from around the country tend to move here in search of work.

As for how long that all is supposed to last, he's silent.  Ironic that the very next (not so good) post was about economic bubbles, so he acknowledges issues of unsustainability, while missing his own huge blind spot.

And yes, population growth can help economic growth, but it's unsustainable in any number of senses of the word.

9 comments:

carrot eater said...

Shrug. Having a high dependency ratio is bad for your economy, and that should be recognized. Slow, steady population growth is fine - it's the baby booms you need to avoid- it turns out, it's awfully painful when that bulge retires.

EliRabett said...

Yglesias is stupid. Bulges in any part of the profile are not very good, for example look at countries with low average age, usually that means high unemployment for younger people, a recipe for social unrest if there every was one.

Anonymous said...

The whole 'ageing population disaster' is a crock for any number of reasons, not least that it forgets the 'cost' of children, while bemoaning the purported cost of the elderly.

Anonymous Etc

Brian said...

Slow steady population growth is certainly better than rapid bulging growth, but the difference is in the severity of unsustainability.

My guess is Yglesias would argue that the unsustainable aspects of population growth are far off in the future, and there's a limit to how much we should sacrifice near term benefits because of uncertain future risks. From an environmental perspective tho, the costs of population growth are immediate.

Pinko Punko said...

Agree with the Rabett. Yggie is the great pretender, sometimes he makes sense, sometimes he doesn't- and he can't distinguish when he is good and when he isn't. He's an opinion generator, nothing more. This is why he will be destroyed by Battle Raps.

Pinko Punko said...

And Matt is so goddamned cute to add his local flavor with his Whataburgers and his H.E.B.s

Hank Roberts said...

Growth, seen from a 1980s Cassandra perspective:

http://blog.seattlepi.com/davidhorsey/files/2011/12/Capitalist-China-1987-640x462.jpg
http://blog.seattlepi.com/davidhorsey/files/2011/12/Stock-market-1987-640x491.jpg

carrot eater said...

"for example look at countries with low average age, usually that means high unemployment for younger people, a recipe for social unrest if there every was one. "

Well, it depends on whether your economy otherwise has good conditions for growth. If it does, then your young people are your demographic dividend, and living standards go up. If it does not, you get angry jobless youth who get into trouble or protest. (of course, if the government is lousy and there aren't true elections, protests might end up a good thing). The world has seen both outcomes.

Anonymous said...

An immutable law of biology (and other finite systems): all absolute growth is temporary.

An immutable social corollary of the above law: all human processes and endeavours dependent on absolute growth are temporary.

The immutable conclusion for (expanding) non steady-state economies, based on the above: the party will end.

Best get used to these facts.


Bernard J. Hyphen-Anonymous XVII, Esq., with lashings of whipped cream.