Worker productivity, spending and the Democrat's big infrastructure bill

The Washington Post published an interesting article this morning and a possible sustained increase in worker productivity. That might sound boring to some, but it really isn't.  When productivity increases, wages tend to increase and the overall economic situation tends to be solidly good. One of the key points is that the second infrastructure bill the Democrats have advocated and, not surprisingly the fascist Republican Party (FRP) opposes, increases funding for R&D. Economists point to that as a good indicator of increased productivity. 

Evidence of the increase is in recent data. Second quarter worker productivity grew by 2.3% and 4.3% in the first quarter, according to the Bureau of Labor Statistics. Productivity gain in the decade after the financial crisis averaged 1.2%.

WaPo writes:

Rapid adoption of robots and artificial intelligence during the pandemic combined with a rebound in government investment is making some economists optimistic about a return of a 1990s economy with widespread benefits.

As companies and customers embrace new technologies, making it easier for Americans to produce more with fewer workers, a growing number of economists say this is not a blip and could turn into a boom — or, at least, a “mini boom” ― with wide-ranging benefits for years to come.

Higher productivity typically leads to more goods and services available at a lower cost and increases in wages. Without it, economic growth is sluggish.

“America used to do a lot more public investment and it used to grow faster. I don’t think that’s a coincidence. It seems like we are reentering an era of public investment,” said professor Erik Brynjolfsson, director of Stanford University’s Digital Economy Lab. He forecasts “a productivity surge that will match or surpass the boom times of the 1990s.”

The other key dynamic is increased government investment in the economy. The $1.2 trillion bipartisan infrastructure bill that recently passed the Senate has received widespread praise among business leaders and economists. The decision to stimulate the economy has also created a lot more demand than normal coming out of a recession, which is helping drive continued productivity and business investment.

“Infrastructure investment certainly has the potential to improve our productivity,” said Julia Coronado, founder of MacroPolicy Perspectives and a former Federal Reserve economist.

The nation hasn’t seen this kind of public investment in years. Improvements in roads and bridges are much needed, but economists are most excited about the money in the bill to expand and enhance broadband, and research and development. Democrats are also working on a $3.5 trillion spending package that is more controversial, though some economists praise parts of that bill that would expand child care and paid leave to make it easier for more U.S. parents, especially mothers, to work.

“It won’t be a game changer to just fix roads and bridges. It will help at the margin, but it’s not transformational,” Coronado said. Instead, she noted that “creating more child-care infrastructure could cause the labor market to be more dynamic and drive stronger workforce participation from women.”

Higher productivity could also alleviate many of the nation’s top economic concerns. Inflation is currently running at a 13-year high, with many Americans citing it as a big worry. As prices for so many goods and services rise, workers can’t afford to buy as much. Productivity gains typically lead to lower prices since factories and offices can produce more, and it tends to bring higher pay as workers are seen as more valuable and effective.  

“We are going to be short of young people. So all the tasks that were being done with the prior amount of the labor will have to be automated quite a bit,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “There won’t be that many drivers available for Uber and garbage trucks and all that. It’s very clear. Something will have to give.”

This is some rationale to think that the broader infrastructure spending the Democrats want could have good economic effects. Despite that, the FRP constantly attacks it because it believes that things like daycare and expanded broadband access aren't infrastructure. The FRP's fascist ideology considers (1) that infrastructure is roads, bridges, railroads and not much more, and (2) government and domestic spending is unconstitutional, evil, socialist and ineffective at everything other than (i) running a huge military-industrial complex, and (ii) courts to defend and advance the the dominant interests of the FRP and its wealthy donor class, namely power, wealth and non-democratic government. 

It's not clear why some of the FRP in congress voted for the first, narrower bill. After all, the spending is still evil, socialist and something Democrats want. The FRP vehemently opposes all of that. If the FRP had its way, all infrastructure, like 100% of public schools, would be privatized and run by the always better free markets. Probably fear of the 2022 elections mostly explains it. Re-election first, ideological coherence second.

Questions: If the productivity boom does sustain itself for a while, say at least the next six months, would that justify spending on the Democrat's broader vision of what constitutes infrastructure these days, or does one need to wait a couple of years to assess the cost-benefit? Is one or both infrastructure bills and their spending socialist, unconstitutional and/or evil as the FRP and its ideology sees it? Should all infrastructure and all public schools be privatized as the FRP wants, or is it exaggerated and inaccurate to say that is what the FRP wants? Is it exaggerated and inaccurate to say that the Republican Party, including its rank and file, is fascist?