Thursday, March 12, 2015

Productivity and the Ribbon

In a paper from early 2002, Robert J. Gordon observes "a dismal period of slow productivity growth between 1972 and 1995", followed by "the U. S. macroeconomic miracle of 1995-2000":

The core of the [1995-2000] American achievement was the maintenance of low inflation in the presence of a decline in the unemployment rate to the lowest level reached in three decades.

At CEPR, late in 2007, Dean Baker and John Schmitt warn in The Real Economic Crisis of "the sharp deceleration in productivity growth since the middle of 2004."

They put the decline in productivity some years later than Robert J. Gordon. But then, they were writing some years later as well. Apparently Professor Gordon jumped the gun. Eh, live and learn.

In August of 2012, Izabella Kaminska recalled Alan Greenspan's confusion over the economy's superb performance in the latter 1990s, and his 1999 statement that (as Kaminska put it)

some sort of missing variable must have been responsible... A variable which, very possibly, was tied to the growth of information technology and computers, an area of the economy that economists and statisticians still didn’t understand well.

Greenspan called it the new economy, and said it was driven by computers. Robert Gordon hopped on the technology bandwagon, saying

The post-1995 technological acceleration, particularly in information technology (IT) and accompanying revival of productivity growth, directly contributed both to faster output growth and to holding down the inflation rate...

Baker and Schmitt hopped on also:

The driving force behind the 1996-2004 productivity acceleration, however, was massive investment in computers, software and related high-tech machinery...

I don't buy it, myself. I attribute the years of good productivity to the anomalous early-1990s decline in the debt-per-dollar ratio:

But I've been having second thoughts lately (he said, tongue in cheek). We got new computers at work, and new MS Office.

The Excel of Office 2013, under Windows 7, opens each workbook in its own separate Excel window. Something like what Word has been doing for some time.

What am I, too stupid to have two workbooks open in the same window? Each one has to have its own window now?

And isn't it wonderful that the second one you open comes right on top of the first one, so that you have to move it if you want to work on both of them.

Oh yeah, and then the next time you open an Excel file, it opens over top of the one you just moved... so moving it accomplishes nothing, really.

Oh and that frickin ribbon, disorderly and disorganized, with no command where you can find it, instead of an orderly menu system. The ribbon all by itself is enough to take the steam out of any economy's miracle of productivity.

So maybe I was wrong all those years, saying accumulating debt reduces productivity and slows growth. Maybe it's the changes to Excel and Windows that are behind it all. Maybe Greenspan was right about technology. And maybe the ribbon did us in.

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