Where Did All the 'Growth' Go?

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Have a gander at this mind-boggling chart put together by Mike Mandel.


It shows the share of real growth of private fixed assets - stuff like machinery, factories, technological equipment, and, yep, housing. Or, as Mandel puts it: "All the privately owned productive assets of the country - for the decade spanning 1999 to 2009."

That decade, Mandel points out, saw the slowest growth of any decade of the post-war period. What's worse, more than half of it was made up of housing. Technology broadly accounted for just 14 percent of the increase. "[T]he net real increase in housing fixed assets was more than triple the net real increase in IT fixed assets," Mandel concludes. "That may help explain why we are in such dire straits now -- plenty of new homes, not enough investment in IT."

And that is why we need to Reset the economy away from housing - which played its role in driving the old industrial economy - and toward new technology, knowledge, skills accumulation, and broad human capital development required to drive the emerging creative economy.

Forget the stimulus: This is broad structural adjustment that begs for Washington's attention.

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Richard Florida is Senior Editor at The Atlantic and Director of the Martin Prosperity Institute at the University of Toronto. See his most recent writing at The Atlantic Cities. More

Florida is author of The Rise of the Creative Class, Who's Your City?, and The Great Reset. He is founder of the Creative Class Group.

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