A business journalist quotes me:
"The trouble with making the rest of the economy "more productive" is, of course, that it means higher levels of unemployment." Can I refer you to the most productive economies in the world – the four Nordics and Germany? All of them have low unemployment and high per capita income. Greece, to take a topical example, is less productive despite the average employee spending many more hours at work. There is no shortage of ‘work’ to go around in Greece, but quite high levels of unemployment. Why? Because productivity creates surplus capital, which can be invested in new productive enterprises. Another word for this is growth. Growth = employment. By your logic, the most technologically backward places in the world should have the lowest unemployment. I think you’ll agree that the evidence says otherwise.
It was a badly worded sentence and I withdraw it. What I was trying to say is that the new technologies need many fewer employees than the old ones, hence the effective disappearance of entire industries. Yes, this will eventually shake out. But temporarily, the technological transition, combined with the recession, makes for a bleak short term. Another reader:
Where's all the Internet money? Easy answer: San Francisco.
While all the rest of the country has been in recession, the San Francisco Bay Area has been partying like it's 1999. Not only is San Francisco one of the few metropolitan areas where median home prices never declines, but the rental situation in the city has gone critical. My own rent jumped by more than 50% in two years. The reason? I live South of Market, with my neighbors Square, Zynga, Twitter and Salesforce – maybe you've heard of them? Also, the advent of mobile wi-fi busses has allowed a lot of Silicon Valley workers at companies like Apple, Google and Genentech (BTW, we also have biotech) to move to the city.