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Grantham interview on Bloomberg


Eric50
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What about gains in productivity?

 

Productivity has been eroding, not that fast but pretty steadily. And part of it is just the maturing of society. There’s no way we’re going to recapture that robustness that you get from a huge surge in manufacturing. It’s quite different for the developing markets. They probably have 20 years before they cool down. But it’s a big factor for the U.S. Every five years, you’ve dropped another point in manufacturing and replaced it with people cutting each others’ hair.

 

Thanks for posting, Grantham's quote above particularly struck a chord. The hollowing out of our manufacturing base here in Australia is disturbing to say the least.  While the commodities boom has made us richer in the short term,  we will inevitably succumb to a rather severe bout of Dutch disease.  Time to open a salon or two and then hope the masses have some free cashflow available after servicing the mortgage on inflated real estate ;)

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