It's depressing to read the Washington Post's Wonkbook

Eli,

This passes for serious wonkery in the liberal wonkosphere. It's unfortunate since is it so silly. Here's the paragraph that had me shaking my head:

"There are one of two ways to look at the digital revolution of the last few years. The first way is that it hasn't done much for the real economy. The major players like Apple and Google and Twitter and Facebook simply don't employ that many people. They've made a smaller number of people very, very, very rich. But the Internet hasn't been like the automobile, where the new industries meant jobs for millions upon millions of American workers."

It's just a staggeringly ignorant statement. Consumers purchase an iPhone and iPad because the value of the product is at least as great, to them, as as the value of anything else they can buy. Or put simply, it makes the consumer's life better. The number of ways it makes the consumer's life better is as myriad as the number of consumers. For some it will make their work life more productive, which equates to wealth creation and job growth. For some it lowers costs, leaving room in the budget for spending on other items, leading to wealth creation and job growth. For some it just makes them happier to have the device.

And then it leads to other things. The iPhone isn't some paperweight. It requires a cellular network. It requires a distribution network. It requires apps that give it value and makes it object of desire by consumers. Those things aren't just created out of thin air. It requires software programmers. It requires data centers and power generators and electricity, meaning it needs batteries and natural gas and coal and oil.

It is so remarkably stupid to posit Apple, Google, Twitter and Facebook  "hasn't done much for the real economy."

Bill

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/27/there-will-someday-no-longer-be-a-great-stagnation/

There will someday no longer be a great stagnation

Farhad Manjoo has me convinced: Square is a really exciting company.

Square

There are one of two ways to look at the digital revolution of the last few years. The first way is that it hasn't done much for the real economy. The major players like Apple and Google and Twitter and Facebook simply don't employ that many people. They've made a smaller number of people very, very, very rich. But the Internet hasn't been like the automobile, where the new industries meant jobs for millions upon millions of American workers.

The second way is that it hasn't done much for the real economy yet. But there are signs that that's changing. If you look at the much-hyped digital start-ups of the past few years, you're seeing more and more companies knitting the physical, brick-and-mortar economy into the digital revolution.

Groupon, for all its recent troubles, is a good example: They're using e-mail and social networks to get more people into local businesses. Uber, the app-based, on-demand limo service, is another fit: They're using iPhones to get people into physical cars driven by real drivers, leading to transactions that wouldn't have happened in their absence.

But none of these have been gamechangers. Square, a company led by Twitter co-founder Jack Dorsey, has the potential to be a gamechanger. It wants to do nothing less than change how we pay for everything. In doing so, it has the potential to vastly lower transaction costs for businesses that accept credit, and to significantly increase the number of transactions that happen, period. If it works, that could be a transformative advance.

Of course, that leaves open the question, will it work? Perhaps not. But something will. Eventually.