The above chart shows a 20 year rolling average in RGDP growth contrasted with the 20 year rolling average standard deviation of that growth.
English translation – Economic growth is going down, BUT so is the volatility of the growth. It implies we’re sacrificing economic growth for increased stability.
Why?
Regulation
Increased taxation
Larger public sector
Feminization
Equalization
Wealth transfers
Tony Stark would never make it in this economic environment.
Very interesting. I wonder what the graph would look like if it hadn’t been chopped at year 2000.
It actually includes data up to 2010’s 1st quarter. It’s just that it averages out at the 2000 mark because it’s 20 years. 10 on one side, 10 on the other.
This may be the best blog post title ever.
The graph doesn’t really show anything other than the slowing of economic growth. Standard deviation doesn’t mean anything without comparing it to the average about which it lies…relative standard deviation, the standard deviation divided by the average (deviation as a % of the average), would actually tell you how much it’s really changed.
If the average is falling, the standard deviation could fall with it BECAUSE the average is falling…yet the relative deviation could remain the same.
For example…an average of 50 with a standard deviation of 5 has the same variability as an average of 10 with a standard deviation of 1.
Looking at the graph, it seems that the relative deviation hasn’t changed very much at all, a slight decrease when comparing the start of the graph to the last point on the graph.
Captain “most people DEMAND a risk free world”
Right, the word risk has practically been banned from our day to day living. Our falling down the path of Climategate is the ultimate “hide the decline”. Climate control symbolized that many people were demanding their politicians even take the risk out of the weather.
Just because we moved from an agricultural age to knowledge based economy doesn’t remove risk. In fact the transformation has probably increased risk because we are now striving for comparative advantage within a global economy. Moreover, at the same time we have taken on massive liabilities embedded with all our entitlements. Yet we somehow expected that government entitlements would reduce the risk in our lives; nothing could be further from the truth. The only solution to this mess is a return to entrepreneurial innovation like “Stark Industries”. The solution is nicely articulated by Walter Russell Mead at The American Interest Online; a quote:
Government planners, even Harvard-educated ones with Truly Gigantic Brains, are simply not able to predict what technologies will really matter twenty, ten or even five years down the road.
A viable national economic strategy today would have three component parts: long term measures to reduce the costs and overhead of small business by making government and the legal system cheaper and less intrusive; efforts to transform the marketplace for services like health care, education and others now provided largely by government into the private sector so that entrepreneurs can build new kinds of business while reducing the social cost of these vital and necessary services; and a way to provide the country with an affordable infrastructure that allows small business to flourish and enjoy the benefits of a national market at a low cost.
All true. I would add unionization and EI.
North America is pricing itself out of the market for investment because of high labour costs, higher taxes, health and safety regulations, environmental studies at every level of government, and political correctness.
People like Stark would be shut down in a heart beat as a threat to the security of the country.
Is it just me? I would frequent CC blog a lot more but find it hard to read because of the black back ground.
Not just you Ron.
I was diagnosed with macular degeneration in one eye last yr and have trouble reading fine print.
I need high contrast backgrounds and fair sized print for easy reading nowadays.
Dark sites like CC are hard for me to read.
CNN Headline News is useless to me because they have an orange background and yellow print.
My viewing habits have changed over the last yr.
Luckily for me there are treatments for this disease (have you ever had a needle poked in your eyeball?), and I have recovered somewhat.
Thank you Canadian medical system.
And of course, SDA will always be a required reading because of its present easy reading compact format.
And quality that is second to none. None!!!!
What would Tony Stark do?
Move to China, that’s what.
“… we’re sacrificing economic growth for increased stability.”
I’d assert that we’re sacrificing economic growth for the left’s agenda, since it has clearly steered the economy since Reagan left office, and has certainly created the investment climate, or what there is left of it, that we, and the unemployed, enjoy, today.
How many of Obama’s supporters realized that ” hope and change ” was a euphemism for ” accelerated decline in median income “? Sad thing is, probably a large fraction of Democrat presidential voters think that by voting Democrat at the presidential level they cleverly game the system for personal benefit, but the joke is really on them. Rough justice, I suppose.
You may also note that in the graph standard deviation and economic growth are inversely related. During the period of 1967-1973 economic growth increased while the standard deviation fell…then during 1973-1986 the opposite occurred, although the two do follow a similar long-term downward trend..and then from ’86-Present they’ve followed almost a perfectly inverse relationship.
Economic stability is what has motivated foreign influence in the ME for decades…that is why dictators are put in..to create economic stability for the top players. I’m not saying it’s a ‘good’ thing, I’m just pointing out facts. I’m also not advocating the intervention of governments into economic matters.