The Atlantic Business Channel: Jim Manzi Archives

Jim Manzi

Jim Manzi is Founder and Chairman of Applied Predictive Technologies (APT), an applied artificial intelligence software company. He is In also a Senior Fellow at the Manhattan Institute and a Contributing Editor of National Review, where he writes frequently for both the print and online editions on topics related to science, technology, business and economics.

Recently by Jim Manzi

May 22 2009, 8:23AM

How to Think About Waxman-Markey: A Response

I've generally kept my climate change monomania off this business blog, but Ryan Avent has brought the bacillus here. He starts his post with a very generous set of compliments about me that could be more accurately directed toward him. So I'll just say that if you have to disagree with somebody on this topic, Ryan's the guy.

His points are, as usual, well-considered and well-intentioned. Let me try to take them one at a time.

Mar 7 2009, 10:28AM

Duration, not rate

There are a lot of headlines screaming about how the U.S. unemployment rate is exploding, and has now reached levels not seen since 1983. The February unemployment numbers for February really are quite bad; unemployment increased 0.5%, from 7.6% to 8.1%. May of last year was the only month in any of the recessions of the past 25 years that saw that big a jump in the rate.

When we think about how bad unemployment gets in any given recession, however, we need to consider three numbers: the starting point, the average monthly change in the rate, and the duration of the recession. The past two recessions (2001 and early 90s) were very mild, so I'll compare the current recession to the 81-82 recession, which was by most measures the worst since the Great Depression.

Feb 6 2009, 11:18AM

Stimulus predictions: put up or shut up

Here's a liberating statement: while I am skeptical of the proposed stimulus bill, I don't know what net impact it would have on the economy.

Apparently a lot of other people are far more confident about their ability to predict this. Many are highly credentialed economists. Some believe stimulus will help a lot, others that it will cause more harm than good. So, while they are all talented at speaking in a grave and impressive tone, it is certain that at least some of these people must be wrong.

Feb 3 2009, 8:23PM

Do political actions affect economic growth?

Last week, Steven Landsburg pointed to a striking chart that shows remarkable stability in the growth rate of US GDP per capita over two centuries. I've pointed to a version of this chart myself as a source of rational confidence about our economic future, at least in the long-term. But I think that Landsburg was bit Panglossian when he explains the cause of this as:

It's the way the modern world works. Things improve. Incomes rise, work hours fall, the quality of goods improves.

Consider the growth of computational power per year over the past 50 years or so. It has followed a path of consistent exponential growth that is remarkably similar:

Feb 3 2009, 2:50PM

Memo from the department of dangerous predictions

Fortune has an article up saying that "economists and executives believe that this time tech won't lead the country out of its slump", the way Fortune says it did in the 1970s, 1980s, 1990s and 2000s. Why not? Because:

...they don't see a single big idea - no semiconductors or PCs - to prime the pump. Funding for even the most promising technologies has dried up. And the country's rate of spending on new gadgets is slowing.

Well, let's put aside the point that apparently they think tech = IT, and are ignoring potential biology-based, rather than physics-based, tech, when biology is likely to be the more fundamental economic driver in this century. But look at their view of new digital technologies on the horizon:

Jan 31 2009, 4:55AM

Popper is my homeboy: a manifesto

Will Wilkinson has an amusing series of posts demonstrating increasing frustration with the macroeconomic arguments about the stimulus proposal. In one, he sums up the source of his frustration:

When I see Delong more or less indiscriminately trashing everyone at Chicago, or Krugman trashing Barro, etc., what doesn't arise in my mind is a sense that some of these guys really know what they're talking about while some of them are idiots. What arises in my mind is the strong suspicion that economic theory, as it is practiced and taught at the world's leading institutions, is so far from consensus on certain fundamental questions that it is basically useless for adjudicating many profoundly important debates about economic policy. One implication of this is that it is wrong to extend to economists who advise policymakers, or become policymakes themselves, the respect we rightly extend to the practitioners of mature sciences. There is a reason extremely smart economists are out there playing reputation games instead of trying to settle the matter by doing better science. The reason is that, on the questions that are provoking intramural trashtalk, there is no science.

This is just about perfectly stated.

Jan 28 2009, 12:41PM

A nation of children, drowning in debt

I went to a local Best Buy to get a digital camcorder as a present last week, and saw something truly horrifying.

Two camcorders were on display next to one another: one for about $1,100, and the other for $244. Directly under the price tag for the more expensive camcorder was a financing offer: $32 per month for 48 months. Who would take that deal?

Jan 26 2009, 10:17AM

Reality bites

In December, GM approached the federal government and claimed that they were within 30 days of bankruptcy with ~$10 billion in the bank because this was minimum liquidity required to fund operations. As private investors were unwilling to provide them with any more debt or equity investment, they asked taxpayers for an $18 billion bridge loan, saying that if they got this, then they could restructure rapidly enough to become profitable without further assistance.

GM provided a plan to accomplish this restructuring. It was not obvious that the operational assumptions embedded in the plan were achievable. Specific goals that seemed (and seem) very difficult to achieve, and about which the plan provided essentially no credible operational roadmap included: