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The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better: A Penguin eSpecial from Dutton [Kindle Edition]

Tyler Cowen
3.7 out of 5 stars  See all reviews (64 customer reviews)

Kindle Price: $3.79
Sold by: Penguin Group (USA) LLC

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Book Description

America is in disarray and our economy is failing us. We have been through the biggest financial crisis since the Great Depression, unemployment remains stubbornly high, and talk of a double-dip recession persists. Americans are not pulling the world economy out of its sluggish state -- if anything we are looking to Asia to drive a recovery.

Median wages have risen only slowly since the 1970s, and this multi-decade stagnation is not yet over. By contrast, the living standards of earlier generations would double every few decades.

The Democratic Party seeks to expand government spending even when the middle class feels squeezed, the public sector doesn’t always perform well, and we have no good plan for paying for forthcoming entitlement spending. To the extent Republicans have a consistent platform, it consists of unrealistic claims about how tax cuts will raise revenue and stimulate economic growth. The Republicans, when they hold power, are often a bigger fiscal disaster than the Democrats. How did we get into this mess?

Imagine a tropical island where the citrus and bananas hang from the trees. Low-hanging literal fruit -- you don’t even have to cook the stuff.

In a figurative sense, the American economy has enjoyed lots of low-hanging fruit since at least the seventeenth century: free land; immigrant labor; and powerful new technologies. Yet during the last forty years, that low-hanging fruit started disappearing and we started pretending it was still there. We have failed to recognize that we are at a technological plateau and the trees are barer than we would like to think. That’s it. That is what has gone wrong.

The problem won’t be solved overnight, but there are reasons to be optimistic. We simply have to recognize the underlying causes of our past prosperity—low hanging fruit—and how we will come upon more of it.


Editorial Reviews

Review

"As Cowen makes clear, many of this era's technological breakthroughs produce enormous happiness gains, but surprisingly little economic activity." ---David Brooks, The New York Times

About the Author

Tyler Cowen is a professor of economics at George Mason University.

Paul Boehmer, who has appeared on Broadway, on television, and in films, narrated an award-winning unabridged recording of Moby Dick.

Product Details

  • File Size: 360 KB
  • Print Length: 128 pages
  • Publisher: Dutton Adult (January 25, 2011)
  • Sold by: Penguin Group (USA) LLC
  • Language: English
  • ASIN: B004H0M8QS
  • Text-to-Speech: Enabled
  • X-Ray:
  • Lending: Not Enabled
  • Amazon Best Sellers Rank: #81,360 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
167 of 173 people found the following review helpful
5.0 out of 5 stars Well-written and perceptive, but raises questions... January 26, 2011
Format:Kindle Edition
"The Great Stagnation" offers a very concise and well thought-out essay on the relationship between innovation and prosperity. The first chapter, which shows how median incomes have stagnated in recent years as the economy's "low hanging fruit" has gotten scarce is especially well done. The parts on health care and education are also very good.

Cowen's central idea is that the pace of innovation has slowed, and that we are now on a "technological plateau" that makes further growth challenging. If you consider technology in the broad sense (energy, transportation, home, etc), this makes sense as things have not changed a lot in recent decades. However, I think it is also true that progress has been highly concentrated in information technology and communications, and that things continue to advance rapidly in this area. Cowen notes this but seems to feel that the Internet is the only really major innovation.

Cowen argues that what we need is a new burst of innovation that will propel economic growth. Here is the problem I see with that: Cowen writes that "a lot of our major innovations are springing up in sectors where a lot of work is done by machines, not by human beings." In fact if you look at companies like Google or Facebook, or entire industries like semiconductors, computers, Internet or biotech, there are really not a lot of jobs in total and certainly not a lot for middle skill people. If there is manufacturing it is either heavily automated or offshore.

The question is: if today's innovations are already creating industries that are not labor-intensive and rely instead on technology, why would the future be different? Won't the new burst of innovation that Cowen calls for create even more technology-intensive industries...and few jobs?
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48 of 53 people found the following review helpful
3.0 out of 5 stars Some good points, but many blank spots June 8, 2011
Format:Kindle Edition
Tyler Cowen: The Great Stagnation

This nice little book is worth reading. Tyler Cohen has correctly identified several almost unique circumstances that helped America become great and powerful. Some low hanging fruit like free land, innovation, millions of immigrants seeking work (and ready to work for pennies), millions of young people wanting to get education; scientific progress and technical innovation.

The book contains very sharp observations. For instance, the author notices that innovation has moved lately in the wrong direction:
"If one sentence were to sum up the mechanism driving the Great Stagnation, it is this: Recent and current innovation is more geared to private goods that to public goods. That simple observation ties together the three major macroeconomic events of our time: growing income inequality, stagnant median income, and, as we will see in chapter five, the financial crisis.:

Not only this. Cowen points out that "Top American earners are increasingly concentrated in the financial sector of the economy."

The booklet is easy to read, the style is lively and intellectually entertaining. When I reached the end, however, I said: Oops, was that all? Too many blank spots left!

Here is a major blank spot: The dollar. Talking about low hanging fruit, the author somehow missed the dollar. By becoming the world reserve currency after WW2, the dollar gave this country an enormous financial advantage. It became not only a low hanging fruit, but a ready fruit on the table. The benefits of this fruit only increased when it was freed from gold in 1971 and when OPEC agreed to trade oil only in dollars in 1974. What is the future of the dollar? What are the perspectives to enjoy it free on the table?
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35 of 40 people found the following review helpful
Format:Kindle Edition|Verified Purchase
This is a wonderful mini-book reflecting on the slowing pace of technological process, how US economic growth has changed as a result, and what that means for the next 30 years. Cowen's thesis--that much of the growth from 1940-'75 came from "low-hanging fruit" and will not easily be duplicated--makes a lot of sense to me, as does his assertion that further improving educational attainment will be worthwhile but very hard. As usual, Cowen is at his best not at developing revolutionary ideas but in putting ideas together in a new, interesting, thought-provoking, and meaningful ways, that make you think about old issues differently.

He raises interesting points about the productivity growth of the last 30 years: that, really, neither labor nor capital has gotten much richer, so maybe productivity didn't improve that much after all?; and that much of the productivity gains in recent years have come from producing the same amount (or close to it) with fewer people, rather than doing more with the same workforce.

And his thesis about economic growth being perhaps overstated...due to fast growth in sectors--education, health care, government--where expenditures are valued at cost rather than reflecting a market price...rings very true to me. He points out that schools today have MUCH better facilities than they did 40 years ago, and all of that shows up in published GDP numbers--but what is the true benefit of such? Or of highways, unnecessary doctor visits, etc.

His writing about the Internet, and its effect on GDP, also is insightful and important. That is, quality of life has improved in meaningful ways that are destructive to GDP: using wikipedia instead of buying a dictionary, posting on Internet bulletin boards rather than paying to go to the dance hall, etc.
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Most Recent Customer Reviews
3.0 out of 5 stars Read for some insights on the problems, not the predictable answers...
Cowen's discussion of the technological plateau and move away from innovation in the productive economy is insightful at first. Read more
Published 5 days ago by C. D. Varn
4.0 out of 5 stars not bad
Pretty good for an educational book, wasn't bad at all. It was short and sweet. Read it for my government class and probably the best read I've ever been required to do.
Published 22 days ago by Dina T.
4.0 out of 5 stars a clear and succinct treatise
The book nicely summarizes the issues that developed countries and in particular US face. It is devoid of left or right wing biases and strives to present the author's analysis in... Read more
Published 2 months ago by New Hampshire
4.0 out of 5 stars Worthwhile reading
Although this is not the first time I have read some of the reasons given here for the lack of growth and the present stagnation (in the USA and in other parts of the world) I... Read more
Published 2 months ago by Juan M. Sansinenea
5.0 out of 5 stars good read
America is definitely in deep economic trouble. Cowan explains why in simple terms from a historical and economics perspective, without taking any political posture.
Published 5 months ago by T. Nettleman
5.0 out of 5 stars Short and (harsh) description of what is wrong with the West
This book has the basic premise: a slowing rate of scientific and technological innovation is the root cause of our current economic problems. Read more
Published 6 months ago by Ryan
5.0 out of 5 stars I want too know ,this informs me
a lot too think about. increasing my perspective. looking to our future. can we (America)do the(best)good things? this is a sister to his earlier book.
Published 7 months ago by jodyt
3.0 out of 5 stars Short and punchy w. his unique viewpoiont
Did I mention short? There is a very substantial amount of linked third party content used to buttress his points but at least in this eSpecial edition, they are moved from the... Read more
Published 8 months ago by John F. Cahill
4.0 out of 5 stars excelent and balanced book!
Tyler Cowen argues new normal isnt as good as the old one. In this book he explains in simple words how these revelations had a profound effect on our history. Read more
Published 9 months ago by troopa
3.0 out of 5 stars The Short Unhappy Economic Life of Modern America
In September 2008 I taught a graduate social policy course at Arizona State University West. The economy was going into a crazy spiral and I felt obligated to explain why to my... Read more
Published 9 months ago by Dakotadoc
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How many pages does the book have?
I did some number crunching... if you multiply the maximum "Location" by 0.045 you will get the number of pages. So 3884 "Locations" is about 175 pages.
Nov 29, 2011 by Greg |  See all 3 posts
American Ingenuity and not Low Hanging Fruit Be the first to reply
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