Tags: Auerbach | Krugman | technology | productivity

Software Engineer Auerbach: Krugman's Wrong to Dump on Technology

By    |   Friday, 29 May 2015 07:00 AM

Nobel laureate economist Paul Krugman recently offered strong criticisms of the technology industry in The New York Times, but he went too far, says software engineer David Auerbach.

"I am inclined to sympathize with Krugman when he bemoans the incessant empty hype around technology these days," he writes in an article for Slate.

"Disconnected venture capitalists, multi-billion-dollar valuations of content companies, millionaires telling us to check our privilege — it's all getting a bit surreal and a bit stupid."

But the problem is "complacent consumerism, not technology," Auerbach argues. "If we hope to save ourselves from disaster, technology — real technology — remains our only hope. We shouldn't roll our eyes at it, as Krugman does. We should give it some credit."

Technology is vitally important for economic growth, Auerbach notes.

"In the next few decades, technology may play less of a role in fuelling major productivity gains, but it will play a far greater a one in preventing humungous productivity losses," he argues. "And by productivity losses, I mean ecological catastrophe, bio-destruction, infrastructure collapse and mass death."

That's why "Krugman's dismissal of technology's impact is shortsighted," Auerbach writes.

Money manager Ken Fisher, CEO of Fisher Investments, also sings technology's praises.

"The elephant in our world's living room is, simply, technology," he wrote in an article for Forbes.

"While I like tech stocks, the big beneficiaries will be the rest of us — and firms that derive increased productivity or conception of innovative products and services. . . . Productivity will rise as this bull market endures." Productivity fell an annualized 1.9 percent in the first quarter.

So what stocks should we look at to take advantage of this trend?

Fisher likes UnitedHealth Group, the country's largest healthcare insurance company. It represents "a slow-growth, high-quality way to angle the coming Baby Boomer healthcare cost spiral," he explains. "It's both America's largest single health carrier (the one my firm chose for its needs) and a leading provider of technology and services to the broader healthcare universe."

In addition, he thinks drug titan Pfizer is a good bet. It suffered last year amid weak earnings and its failure to acquire AstraZeneca. "Yet its basics are sound, drug line exceptionally diversified and growth potential reasonable," Fisher writes.

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Nobel laureate economist Paul Krugman recently offered strong criticisms of the technology industry in The New York Times, but he went too far, says software engineer David Auerbach.
Auerbach, Krugman, technology, productivity
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2015-00-29
Friday, 29 May 2015 07:00 AM
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