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How the US Economy Can Counter Its Demographic Headwind
The excellent 2016 book The Rise and Fall of American Growth by Northwestern University economist Robert Gordon — a book I frequently write about — is often portrayed as a work of technological pessimism. But Gordon doesn’t see it that way. Tech progress and innovation, as eventually reflected in productivity growth, isn’t going to slow in his view. It will pretty much continue as it has for decades — just no acceleration to the boomy 1920-1970 productivity pace due to advances in AI or robots or medical miracles. The demise of rapid economic growth is due to various “headwinds,” he argues, not technology. Not only will those factors slow per capita GDP growth, but much of that growth will be captured by wealthier households. Indeed, inequality is one of Gordon’s headwinds.
Another growth constraint, according to the economist, is demographics. This is uncontroversial. All those baby boomers are heading into retirement, and Americans are having fewer kids. Labor-force growth used to be so rapid — especially with women entering the job market as never before — that overall economic growth stayed fast even as productivity growth weakened. A San Francisco Fed analysis in 2018 noted the following:
In the 1970s, labor force growth alone contributed 2.7 percentage points to GDP growth, meaning that even if productivity growth had been zero, the economy would have expanded at 2.7%, slightly faster than the pace of our current expansion. Since that peak, labor force growth has come down substantially. As the forecast for 2025 shows, labor force growth is expected to remain stuck at 0.5% for the next decade. This means that, absent a surge in productivity, slow growth in the labor force will be a restraining factor on the U.S. economic speed limit.
Anti-China hawks in the US are eager for a New Cold War that would disentangle the two mega-economies, especially their technology sectors. They see the inevitable economic disruption as a necessary evil to bolster US national security. And there might be even a partially beneficial economic offset if a slice of Asian manufacturing returns to American shores.
Nearly nine years into an economic expansion, most Americans continue to believe their country is 
The cancer of anti-Semitism hasn’t been cured; it’s only gone into remission. These days it’s making a notable re-entry worldwide. By looking at France, the United Kingdom, and Germany, we can get a pretty good idea of the reasons for the increase; we can also take a look at the problem in the United States. And we can’t fool ourselves into thinking that there’s going to be a quick or easy cure.
A few days ago, I talked to my associate Prof. Harmon who raised a fundamental question by way of a preposition. This is not as rare an occurrence as you might think. He asked whether I meant to speak of American cinema as a reflection of American society or a reflection on it. As I said, the movies are our human way of seeing what we’re like, as humans. But what does that mean more clearly?
Europe is a rich, well-educated, orderly place. And many Americans not only like to visit and do business there, but also see it as an aspirational economic model.
