(Replying to PARENT post)

Or maybe, just maybe, companies find it cheaper to hire new employees due to the number of people who permanently couldn't find jobs, than to invest in increasing productivity. The past 8 years of overestimating economic growth by central banks have clearly shown hope is not sufficient to boost the economy on its own. Central bank balance sheet have exploded, exploding price of assets, making in unattractive for businesses to invest. They would rather perform stock buybacks from borrowing money, send it to investors to be consumed. In terms of real physical capital (as opposed to financial), the American economy is actively divesting. Any supposed GDP growth from the current monetary policy is due to capital being actively consumed, increasing spending temporarily. The data showing lack of productivity growth supports this pessimistic scenario. Central banks will do well to hike interest rates, collapse the markets, destroying the zombie and hangers on companies, so their physical assets go on firesales, releasing physical capital at massively deflated prices, for well run and well managed companies to gobble up. Only this will rejuvenate the American economy and return its status as the world's economic growth powerhouse.

Remember, the current Silicon Valley boom started in the mid-2000's due to the collapse of costs of IT, with the advent of cheap Internet and cloud computing, not because of low interest rates. The cost of building capital got so low from 1999 people were doing it in their parents basements eating ramen.

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(Replying to PARENT post)

That's supported by the observation in the article that companies are not investing much capital in improving productivity.

If you've ever seen video of a Foxconn factory you've seen the rows of people carefully placing ICs onto circuit boards. In fact, there are machines to do that. They're called pick and place machines[0]. They've existed for many years. But labor in China is cheap enough that it often makes more sense to pay humans to do it manually than to invest in automation.

[0] https://en.wikipedia.org/wiki/SMT_placement_equipment

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(Replying to PARENT post)

Also, real wages are declining. After a point, working harder to make the c suite and Wall Street richer begins to seem pointless.
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