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What Service Economy?

March 20, 2009 1 comment

gelogo

A few weeks ago I wrote about Jeff Madrick’s book The Case for Big Government, published last fall by Princeton University Press. I learned about it in Richard Parker’s New York Review of Books review and ordered it a couple of days later. I got about halfway through the book before getting distracted by other business.

As I anticipated from the review, I’ve enjoyed reading Madrick’s argument that government spending throughout US history has had much to do with the country’s becoming the world’s leading economic power by early in the twentieth century, as it moved from an agricultural to a manufacturing economy. This simply would not have happened without government investment in education and infrastructure, or without government land policies and land giveaways. Well, that’s a simplification of his argument, but part of it. In particular, the claim that government spending interferes with economic growth and initiative, which has come to be taken for granted since Reagan’s presidency, as Milton Friedman’s ideas have moved to the mainstream and dominated conservative-based economic discussion, is simply false, without data to support it.

Madrick also discusses the next stage in our country’s economic evolution, from a manufacturing to a service economy, and as one reads his discussion of this, one need only look at events of the last half year to realize what an illusion that was. You can’t make something out of nothing. Wall Street did for a while. Enron did. Madoff did. But eventually it collapses.

With my two recent trips to Detroit, this has been much on my mind. Michigan (and surrounding states) became the country’s manufacturing center in parallel with the growth of a manufacturing-based economy in the first half of the twentieth century. Now Michigan is an economic mess. Yet, I can’t help thinking that the revitalization of this region and more generally of our industrial base may be an essential component of the country’s economic recovery.

This was on my mind when General Electric’s annual report arrived in the mail yesterday. (Joel owns 10 shares, a Bar Mitzvah present from my brother, which is why we receive GE mailings.) Given GE’s own problems and its announcement three weeks ago that it was cutting dividends from 31 cents a share to 10 cents a share, I decided this morning to see what chairman and CEO Jeffrey Immelt had to say in his opening letter. It’s a long one, about six pages of small print. I still haven’t read it all, but I did come across a passage near the end that prompted this post and that I wish to quote. Here’s what Immelt says:
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Categories: Business, Economics, History

Second Lunch at Rover’s

March 20, 2009 Leave a comment

roverlogo

Two months ago I wrote about our lunch at Rover’s, the famed Seattle restaurant that’s just down the street of us. We returned today for our second lunch, which I will describe in due course. First let me review.
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Categories: Food, Restaurants

Electric Car Network

March 20, 2009 Leave a comment

betterplace

David Pogue, the NYT technology writer, interviewed Better Place chief executive Shai Agassi on the CBS News Sunday Morning last Sunday. Better Place has been much in the news lately for its plans to build an electric car network. You’ve probably read about it — this is the idea that you don’t have to charge your car at home or work and get limited range. Instead you can drive into the electric equivalent of gas stations when you’re on long drives and have the battery swapped for a fresh one. For shorter drives, charging the one in the car overnight or while at work should work fine, but for long drives you do battery swaps. Plus, the company owns the battery, so the price of the car drops. And as battery technology improves, the company drops in better batteries, so you don’t have to worry about having an out-dated battery that doesn’t perform as well as those in new cars.

I didn’t see Pogue’s interview of Agassi, but yesterday Pogue had a blog post containing an edited transcript of the interview that, though shorter than the full interview, is longer than what was shown on TV. It’s fascinating. I urge you to read it. The ideas underlying the network, as described partly above, fit together brilliantly. A short excerpt is below, but read the whole transcript.
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Return to Detroit

March 20, 2009 Leave a comment

atlasdetroit

A few weeks ago, Gail and I spent a weekend in Detroit. I described the trip only briefly in a post that had a minimal restaurant roundup and a few comments on the Detroit Tigers’ baseball field, Comerica Park. I returned to Comerica park in a second post that contained photos Gail took with her phone. There was much more to say, but I never got around to it. And now I’m back from a second trip to Detroit, so it’s time for another restaurant roundup.
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Categories: Restaurants, Travel

Still Here

March 20, 2009 Leave a comment

I’ve been silent all week, but I’m back, with a backlog of posts that I hope to get written. I was out of town and continuously busy from early Monday morning to late Wednesday night. Yesterday I needed to get caught up on various other things, like watching Monday night’s episode of 24 and Tuesday night’s episode of NCIS, as well as picking up from school the final papers for my course. The most pressing item now is reading the papers and determining course grades, which are due on Monday. I probably shouldn’t be writing blog posts until I’ve completed that. But I will. More soon.

Categories: Travel