A Great Stagnation?

This isn’t directly pertaining to Tyler Cowen’s work.  The only link is, during an EconTalk interview with Russ Roberts, Cowen noted that free-market supporters tended to be the people who most fervently wished that the Great Stagnation thesis were not true, even though, Cowen argued, they need not be opposed to it.

Thinking about Jay Cost’s piece from the other day (my short discussion here), I realized that, in at least one respect, I do agree with Cowen:  there has been a definite stagnation in the US.  Looking at a chart of GDP growth rate for the US versus globally, the last decade has been pretty bad for the US, and 2010 probably won’t be any different.  But even before that, you can see that it was pretty rare when the US had a significantly higher growth rate than the rest of the world.  I know that there are a couple of factors that make this relatively less likely:  first, the US has historically been a pretty large percentage of global GDP, so the trends will match up pretty well; and second, it’s a lot easier for a country with a tiny economy to experience large, regular growth.  Still, think about this:  the last time the US had a real growth rate of 5% was 1984; before that, it was 1978.  During the 1970s, US growth was above 5% 4 times, and was 4.6% in 1977.  In 1999, it was 4.9% and hit 4% just once after:  2000.  And we now realize that the late 1990s were driven by the Federal Reserve keeping interest rates artificially low.  What’s even worse is that, despite having a huge bubble in 2003-2007, growth rates were still anemic.  They hit 3.6% in 2004 and have been downhill since.

I think the biggest reason for this is the long-term increase in government.  Yeah, part of this is government spending as share of GDP, which crowds out private investment and limits growth.  But not measured in that is the cost of regulation.  In 2004, compliance with federal regulations came out to be roughly $1.1 trillion.  In 2010, that number jumped to $1.75 trillion (though note in the comments that the study indicates that regulatory costs increased by “just” $63 billion during this time).  And this is before the implementation of Obamacare.  This also doesn’t mention state and local regulations, which themselves do a good bit of harm.  Note that the US economy in 2009 was measured at $14.72 trillion, so if the $1.75 trillion is correct, roughly 10% of American economic output was prevented due to regulation.  Even if you want to argue that some of the regulatory costs are shifts rather than pure losses, I would start the floor at 5% or so.

Over the past several decades, there has been a significant expansion of government.  Gone are the days of 10% of GDP (of which the majority was spent by local governments); now we’re talking about governments at all levels taking 40%, and frittering away another 5-15% (including state and local governments) due to regulations.

I would argue that the end result is a significant degradation from where we could be.  Compare the US to Hong Kong and Singapore, generally the 1-2 countries on economic freedom indices (like the Heritage Foundation’s).  During the 2000s, Hong Kong had > 5% growth 4 separate years and Singapore was above 10% twice (above 5% 5 times).  And it’s not like these are developing nations with a lot of room to play catch-up—Hong Kong has a PPP GDP per capita roughly equal to the US, and Singapore’s is actually higher.  They also aren’t up there because of a few people owning major natural resources, like in Qatar or (to a lesser extent) Norway.

At any rate, Hong Kong and Singapore offer us examples of high-growth nations.  These islands both have very small populations and are kind of indicative of “small, open-market economies,” so even if the US repeated with Hong Kong or Singapore do, the net effect likely would not be as great.  On the other hand, aside from the occasional one-year blip, both islands regularly out-perform the US, meaning that they’re doing something right.  Go back to the 40% of GDP I mentioned governments spending; in Hong Kong and Singapore, that number is closer to 17-18%.  With significantly lower spending, these two islands have lower tax rates for both individuals and corporations.  In addition, their regulatory environments are significantly less burdensome. All of this adds up to a large performance gap.  And considering a semi-permanent ratchet effect for government regulation (how it always seems to go up on net, or at least does not go down to a considerable degree), this gets worse over time, as we have seen.

Moving toward cutting total government spending in half, eliminating vast swaths of regulatory burden, and cutting taxes significantly may not push the US up to 10% growth, but it would certainly be significantly higher than it is today, and that 5% mark would hardly be out of reach.  And I do not think it out of line to believe that a massive government is responsible for a 1.5-2.5% yearly drag on US GDP growth, if not more.  This is a huge drag:  a 2% increase in yearly growth would double the economy in roughly 36 years, meaning that GDP per capita could have been roughly twice as high now had the regulatory state been demolished in the 1970s.  There’s your stagnation right there.


Priors Regarding “Double-Dip” Recession Revised Upward

Jay Cost has an article noting that bad economic news may be on the horizon once more.  It’s not like things were gangbusters the last couple of years (as “Recovery Summer” dragged into “Recovery One Of These Years”), but things are unexpectedly getting worse.

Cost’s thesis is that, as regular growth becomes more difficult to sustain, the old “vital center” compromise of how to split up this growth becomes untenable.  With Social Security, Medicare, and Medicaid untenable—and with these funds already beginning to run out—there are serious decisions that politicians must make, as the status quo is no longer an option.

Updating Your F-Spot Photo Location

I use F-Spot for my photo editing and publishing needs, in part because I could use it to publish photographs to Picasa from China.  Unfortunately, I have taken enough photographs at this point that I ran out of disk space on my Linux partition…twice.  This last time around, I decided to change the output directory for F-Spot, but what to do about the old photo references that F-Spot has? If you don’t do anything, F-Spot will still keep the thumbnails (unless you moved those as well!) and tags, but your photos will show up as unavailable because it can’t find the old file location.

That’s where this Marc Novell post comes in handy.  The post is a few years old, so the steps are slightly different, but the concept is the same.

Using sqlite3, I jumped to the photos.db file.  On my local machine, it’s in my home folder, under .config/f-spot/.

sqlite3 .config/f-spot/photos.db

Once inside sqlite, you can still use the .schema command to view the table structure for this database. But now there are two places to change records: photos and photo-versions. In my case, I decided to change the listings from /home/USERNAME/Pictures/Photos/ to /media/OS/Photos/, as the second partition has significantly more space.

To do this, you only need two simple update statements. SQLite3 supports the Replace function, making our task trivial.

update photos set base_uri = replace(base_uri, '/home/USERNAME/Pictures/Photos/', '/media/OS/Photos/') from photos;
update photo-versions set base_uri = replace(base_uri, '/home/USERNAME/Pictures/Photos/', '/media/OS/Photos/') from photos;

Once you do that, the changes are committed and you can re-load F-Spot.  Now your photo database is up to date and you can view the photos again.

Photo A Week Project

I’ve decided to start a photo-a-week project.  Publishing a photograph a day is too much for me, but a week is probably the right timeframe.  The goal is to get me out there with my camera more often, taking, editing, and publishing photographs wherever I am.  They can be with my new camera, with my phone, or any other camera I can get my hands on.  It should also give me an opportunity to learn more about the various bits of photography that I’ve missed—it’s been a decade since my last photography course, so I could certainly use some work on lighting, camera settings (and not letting “Auto” do my work for me), composition, etc.

My plan is to upload a photo every Sunday.  Ideally, the photo should be one that I took during the last week, though I might slip on that on occasion.

SSIS Variable Overrides In SQL Agent Jobs: Think About Those Trailing Slashes

This is mostly a note for myself…

When creating a SQL Server 2008 Agent job and using an SSIS 2008 package, a trailing slash (of the \ variety) may interfere with your results.  For example, suppose we have two variables:  FTPSFolderLocation and ArchiveFolderLocation.  These are set in your SSIS package as variables, so that when you run the agent job, you can override the package variable to be what it really should be:  a network share, local directory, or whatnot.  When overriding the variable, you’ll have the variable name and value set to look like:

\Package.Variables[FTPSFolderLocation].Value –> C:\FTPS\

\Package.Variables[ArchiveFolderLocation].Value –> C:\Archive\

When actually running the package, though, the FTPSFolderLocation value will not be “C:\FTPS\” at all;  it will be C:\FTPS” /SET \Package.Variables[ArchiveFolderLocation].Value;C:\Archive instead.

The way I got around this personally was to remove the trailing \ and in the script block that I needed these variables, append them.  Perhaps you could also double-slash (\\) the last one to show that it is not a special character, but I did not try that way.

Leading From The…Hey, Where Are You Going?

Pessimism:  Paul Ryan’s budget proposal garnered only 40 votes.  Rand Paul didn’t like how small it was (and that’s fair), and 4 squishes voted against it because there’s probably a few trillion dollars of “waste, fraud, and abuse” that nobody has gotten around to clearing up.*

Optimism:  President Obama’s budget proposal got 0 votes.  Not a single Democrat voted in support.

* – If there’s so much waste, fraud, and abuse in the system that this could be enough to right the fiscal outlook, wouldn’t that mean that elected official in the federal government is guilty of a dereliction of duty?  I mean, when Scott Brown says he’s going to vote against the budget and his alternative is to remove the waste, fraud, and abuse, why has he not been doing this?  If there are trillions of dollars out there just waiting to be saved without any negative consequences (except for the wasteful, fraudulent, and abusive), why not jump on the wagon and take the credit?  Economists joke about finding a $20 bill on the sidewalk, but this is a sack of $100 bills in a sack with a green dollar sign on it.  If waste, fraud, and abuse really were the big-ticket item that squishy politicians who don’t have any clue (paging Charlie Crist) claim they are, there’d be some squishy Congressmen-for-life or Presidents.  If Scott Brown could put us on sound financial footing that way, he’d be President in 2013.

But he probably knows better.  “Waste, fraud, and abuse” is a phrase bandied about to take advantage of our notions that government life is full of that stuff.  But even then, it’s still a minuscule proportion of federal spending, unless you take an extreme libertarian approach and say that Social Security, Medicare, Medicaid, the EPA, and roughly 85% of government activity is unconstitutional and thus fraudulent.  Hey, I could go for that…  End the waste, fraud, and abuse:  get rid of federal entitlement programs!