China Wins! Weekend updates start with the news that China has overtaken the US as the largest economy in the world. Except it’s not true. According to the IMF, using one measurement of economic magnitude, China has overtaken the US. Of course the US media jumps all over this story despite the fact that the measurement called PPP is controversial for many reasons. In fact China’s economy is considerably smaller and poorer than the US. However, it should be pointed out, when your neighbor is saying ‘things are better now’; if the US continues to have sub par growth (par in this case would be a normal dynamic growth of 4% or more for the same length of time as the recession), China will eventually overtake us. All the more reason to advocate growth policies focused on production, rather than trying to stimulate consumption. Protesters, variously reported as protesting the Ferguson Grand Jury decision and advocating for a higher minimum wage, blocked I35W just outside of the downtown Minneapolis. (Editor’s Note: The confusion in reporting got me talking about minimum wage, but the effect is the same. I don’t understand how making people angry because they sit in traffic for an hour makes them amenable to the cause, whatever that is.) The kinds of people who make more money are the people who develop time and productivity saving innovations, and figure out how to market them. Increasing wages by fiat won’t make anyone’s life better in the long run. Moreover, it’s possible in the short run, some fast food and service industries that employ human beings will automate most of these processes and actually improve service and the quality of their product. Low and middle skilled labor in the next twenty five years will face some grim employment challenges. Protesting this sea-change in the production and labor equation, is spitting into the wind. Black Friday sales are down, provoking all kinds of discussion about ‘what it means for the economy and retailers’. Probably nothing, either way. But, it does provoke a discussion about why some retailers are going out of business, and it isn’t because they’re not offering discounts. Its because they’re not retooling properly for the new consumers who don’t want to wait until the day after Thanksgiving for the best deals, and they want better service. Some stories from the consumer front prove this thesis. For example, a new study says people care more about the WIFI connection than they do the bed, when it comes to choosing a travel hotel. Did the North Koreans really hack Sony Pictures. Not so fast. Investigators now think it was a disgruntled employee. But the real story is how much these Hollywood types are making … but you won’t see any minimum wage protesters on the Sony studio complex. Meanwhile, more TV viewers are streaming their favorite shows, and its happening with radio too as people listen to podcasts and services like Pandora, over the internet. Finally, that all meat diet you’re on may actually be better for your heart than the gluten free bagel diet. New studies show its the carbs that kill your heart. Sponsored by Ryan Plumbing and Heating of Saint Paul, and by Depotstar.
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