The "Losing Jobs To China" Discussion
I am bothered by the ongoing discussion about how the US has allowed China (and other lower cost countries) take our manufacturing jobs. That is true, of course. But it does not address the larger context which is that manufacturing is becoming more and more automated and many of these jobs will not exist at all anywhere in a few more decades.
We are now well into a transition from an industrial economy to an information economy. It seems to me that part of that transition was the move of industrial jobs to lower and lower cost regions in an ongoing march to reduce costs. But that march may end with massive automation and very little labor in the manufacturing process. That means that these low cost regions that “stole our jobs” will also lose these jobs eventually.
The US and a number of other countries around the world are building new information based economies. That is the long term winning strategy.
So while we can critique our leaders (business and political) for giving up on the manufacturing sector a bit too early, I think the US has largely played this game correctly and will be much better off than the parts of the world that have taken the low cost manufacturing jobs from us.
But we don’t hear any of our political leaders explaining this. I wish they would.
Comments (Archived):
Here is a good discussion concerning manufacturing by Bruce Greenwald. The title is somewhat deceptive in that it is really about the state of manufacturing.https://www.youtube.com/wat…Well worth your time. More in-depth analysis from Prof. Greenwald is also worth hunting down on youtube.
Thanks
At’s a lot’s a sugar: Now we’re putting people homeless on the streets, destroying families and communities, etc.The GM numbers on employees are likely total BS: GM outsourced a lot of the jobs as a way to bust the UAW. So, GM became design, marketing, some crucial core manufacturing, highly automated, and final assembly with the rest, glass, plastic, smaller components, etc. all outsourced, sure, often to small companies also in the Rust Belt.
Labor arbitrage has been a big enabler of change around the world.As a student of globalization, it was a new flow of information value that has allowed these emerging economies to grow.I agree that not all manufacturing means low-cost jobs, due to automation & global sourcing. Case in point is Tesla, but it is an expensive product.That said, countries like China, Korea, Brazil and India are also moving up simultaneously into information-based industrialization, although it is not as widely distributed.
See my comment to Jim’s above. It’s not simply about manufacturing in China. Their information economy is sophisticated.I saw a presentation by Alibaba (TaoBao) at NVidia’s GTC and their image recognition and product recommendations algorithms are ahead of what Amazon, eBay and others can do.I go to JD.com’s event and their version of Kickstarter for Chinese market is “kickass” smart and integrated. After all, they also own the entire supply & delivery chain so can do fulfillment in ways US crowdfunding platforms can’t.
What you are describing is just another byproduct of ignorance of one simple fact.There is a sentence that every single high school graduate should be required to write on every final in order to graduate:”Wealth can be created by man, the economic pie is not static.”Not understanding this fact leads to terrible conclusions, and creates a climate where policies are a reaction to envy and greed–“she has therefore I have not” –the ugliest lies of humanity.I’m sick of watching today’s politicians ignore wealth-creation in order to stoke the flames of fear, greed and envy among their most desperate constituents.
Me too Andy. Me too.
If only it were money, not people, who had the right to vote /sarcasm
Exhibit A ^^
Agreed !Wealth production is not a zero sum play but that is exactly why the organic multiplier complexities are not as simple to dismiss as envy and greed 🙂
Isn’t there an “IBM issue” though ? I mean, if we never learn how to have competitive jobs in mature sectors (industry, PCs) won’t we be perennially locked into what the French call “fuite en avant” (fleeing forward) to supposedly less competitive sectors (services and, well, services), only to be pushed out a bit later again because in the end what matters is not so much what you’re doing, but learning to be competitive at whatever you’re doing ?
If you don’t think Americans have a competitive advantage offering services, then you’ve never been abroad– I’ve lived outside of the USA for 90% of my life and US companies are impressive in their ability to ‘just work’, compared to most local companies– or other multinationals from other home countries.
I’m not saying that, and I think they probably do, right now. Just like 30 years ago, they had an advantage in making stuff, and 100 yrs ago, in growing/mining stuff.
A colleague who immigrated from the Netherlands used to refer to “extreme service” in the US. I was shocked at how long it took to get a phone installed in the Netherlands.
Gving the jobs up a bit too early – seems the policy makers method of burning the boats. A forcing function to fully birth the information economyPerhaps the timing should be commended too not just the strategy.
Forgive the length, I don’t have the time to make it shorter.I am generally pro-entrepreneur – and think it’s a path to a meaningful life for many who don’t always ‘fit’ in the large institutions of the establishment – and it’s a key to innovation for societies.I co-founded a $200MM consumer product company (AND 1). I know what building a company is. We did all of our manufacturing overseas and attempted to enforce minimum worker safety and rights. In many of the countries in which we worked, the jobs in our factories were the best jobs available by far. I went to every factory we worked in. I saw the good ones and bad ones. Not outsourcing would have been competitive death for our business.I even was ‘in the game’ long enough to see all the shoe industry manufacturing jobs leave Taiwan and go to China and watch the pain there.The data is very unclear as to whether outsourcing is a net good or bad. (see for example: https://www.washingtonpost….What is clear is that the more rapid the pace of industry and economic change, the greater the human costs. The rapid loss of manufacturing was very bad for large sections of our society – many of whom still have never recovered. And it was a tiny number of jobs – 7Mm to 8MM total manuf. jobs lost from 1979 peak to 2016.Take an economic tour of Philadelphia or Detroit. I have. The cities and their workers have been gutted since the 1950’s or so by a combination of a) suburban flight by upper middle and upper class whites beginning in the 1950’s and then b) the manufacturing sector collapse. This led to increasing segregation and even more failing schools with concentrated poverty. This led to rising crime and a series of harsh incarceration practices – investing more in many areas in prisons than in schools. Ignoring basic research around ‘solutions’ that are cost effective and moral, things like universal pre-k, and parenting education and nutrititional programs for moms and kids. Opting instead for prisons. This is all very well documented.However, the decline in manufacturing was ‘tiny’ on a relative scale – maybe 7 MM jobs total lost from 1979 to today.What’s coming now is a steamroller – the most rapid and dramatic change in our economic system in human history – and like nothing we’ve ever seen. The total decimation of many service sector and middle class jobs is almost here. We have automation allowing (or soon allowing) corporations to replace and significantly reduce headcount for things like a) drivers, b) accountants, c) investment advisors, d) basic service and customer service reps (through bots and AI), etc.Everyone has read (most likely) this Oxford study:http://www.oxfordmartin.ox….They are projecting up to 47% of all jobs to be at risk – within a few decades. This pace is simply too fast for a workforce to, by and large, adapt. When these jobs are automated, the sheer size and scale of it is unlike anything that has happened in human history. A general ‘fear’ pervades society – with war, economic uncertainty, and fear over the environment and climate. This is why we are seeing a large rise in social unrest and dystopian fiction – and the rise of films like the Hunger Games, Snowpiercer, the Divergent Series, the Road, etc. This is why we are seeing so much ‘Zombie’ media having traction.People can feel it. The wealth is being concentrated (under our current political and social model) in the hands of a small number of founders and investors who win the lottery – either through luck or birth or happening to love a small area that explodes in popularity. In starting an over $200MM company, I won the lottery. If I got ten lives, I might have that same outcome in 3 of them.I am now scared for our future and the future of my two young girls (10 and 7).What should scare us all is that the government response (our government’s response) was so weak when we lost 7 million jobs – they responded with prisons and harsher penalties.When it’s 20-50% of the work force, we are going to have real issues UNLESS we get involved.When we throw in rising climate instability, and growing access to WMD’s and other advanced weapons – we need to worry – UNLESS WE DO OUR BEST TO HELP CREATE SOLUTIONS.We’ve all seen the stats in the rise of income inequality (or should)www.imf.org/external/pubs/f…Income inequality matters to social stability. It matters to economic growth. It’s rising. Automation will make it worse globally.And most people don’t want to be handed a ‘basic income.’ People want to work. Work and career is a basic human need for feeling self-worth and a connection to the society. When 20% to 40% of existing jobs are automated and there are no replacement jobs for many of the middle age and above workers, and people lose the feeling of social worth, we are looking into an abyss – UNLESS we get really serious and smart about our response to this.These issues are too large and complex to leave to the Government and public sector, although they are needed allies in the fight.But, what happens to all the people left behind?We need more investment in responses and solutions. We need less focus on profit only and more focus on the basic social contract and structure of the economic systems. What do we do with all these people and how do we retrain them, and how can we change the budget spending and focus of our government and private sector (time, talent and minds) to equip our society to be robust enough to handle this?We will need much more innovation in education – across the lifespan. We will need to find ways to create huge numbers of jobs – jobs people want and have the skills to do – and to connect people with the jobs they are best suited for.We also have to remember that, in many cases, many of the foundation level breakthroughs in the core technology allowing for wealth creation came from DARPA, NASA and government funded research – and yet the society that paid for that research receives very little back – in terms of ‘equity’ owned in the companies or even, often, tax revenues received from the corporations or individuals who founded them.So, we need taxes and redistribution of wealth. It helps economic growth – so long as it’s reasonable. That’s a fact. http://www.oecd.org/social/Focus-I…Entrepreneurs benefit from the US system – stability, military strength, education, etc. But all too replace jobs and contribute little to helping those hurt.What happens when billionaires and companies can simply move to another country if they choose to avoid taxes?What saddens me is seeing us squander trillions of dollars on wars in the middle east and not invest in education here at home. Investing in education – what we know works is a must. We haven’t even got universal Pre-K yet and we know that works a lot better than jails later in life.We all need to get engaged in the process, especially those of us who have benefited from living in this (sometimes) great nation.
Only 9% of the work force is in manufacturing http://www.nam.org/Newsroom… . How do we get the right training and education out to Middle America ?
Isn’t it easier to lose information economy jobs to China than manufacturing jobs? Isn’t that happening already? …at a faster rate than manufacturing jobs were lost?
No way. China has little intellectual property rights, huge govt. intervention in regards to who can compete in markets, literally uses “steal and duplicate” as major r&d platform, doesn’t even have an open freaking internet. Information jobs that are more than routine call center / back office will not migrate there in mass. IF that is going to occur anywhere it is India. India is obviously dominating back office / low level and has made some in roads into higher value add tech services, but still questionable how much core business will be taken there. Worked with this a lot at a top 3-4 internationa consulting firm a few years ago and India was typical global shared services hub. Many firms had a “china for china strategy”, where they only served the country (albeit a massive country and future opportunity”). Had a lot to due with both language / cultural barriers, as well as lack of trust in the regulatory and political environment for global operations. while the above is pretty factual, here is a speculatory bet (anyone have a 85 year time horizon? :)), India due to more western (yet still fllawed / corrupt as of today) and open embrace of capitalism will have a higher gdp by 2100.
“China” in this conversion is just a proxy, a placeholder, for any country where jobs are going.
I think that is correct. We have a lot of public policy problems that incentivize it. Corporate tax policy is one of them.
Indeed
In that regard then yes India, as my comment articulated partially. Really few other countries of scale with educational system and low wages. Hard pressed to think of another one with over 50 milllion that could take a lot of low wage / informational jobs. How many can be automated by software / technology… that is likely large.
In 2035, the only place you will be able to buy a 18k gold plated C3PO robot is China, not any placeholder, I mean the real China.
But isn’t IP a very artificial construct ? In the US, patent and copyright have been extended way past their original durations to please political donors, and are given out hand over fist, not because any economics analysis said it was “good” for the economy or the citizenry, but because it’s good for the ones who bought the laws, and the lawyers who wrote them ?
Very complicated and multi-faceted answer. Much of patent is pure monopoly / profit extractions (see the pharmaceutical industry). And software patents are kind of bull shit. But in china they literally will steal complete code bases, confidential documents etc. There is a differrence from building new software that does same thing as oracle, microsoft, salesforce etc. and literally stealing there hundred million or 10 billion code line base code. Most companies don’t trust to put intellectual assets in china for this reason. But yes, IP can be used to benefit lawyers and ocmpanies primarily
I once had a… reseller… explain to me they were being nice by buying one copy of our books as a master for the bootlegs they were then selling on, so I agree the argument is not utterly one-sided.But a 20 years patents and life + 70 years copyrights is very long.
Yeah copyright is pretty darn long. And some patents are too long. I think criteria besides ust years have to be developed. a blanket year length is too crude. But i am not enough of an expert at all in that area to give a specific policy proposal!
This is spot on, Jim.* Chinese investors moving in on Valley deals — http://techcrunch.com/2016/…* Chinese innovation ahead of SV — see FB Messenger copying WeChathttps://augintel.com/2016/0…http://bankinnovation.net/2…http://www.forbes.com/sites…
We were all farmers too not that long ago.I’m working my way through Robert Gordon’s The Rise and Fall of American Growth. His premise is that out biggest innovations and increase in standard of living were done in the past. His productivity charts show the US biggest productivity shot was 1920-1970. Our productivity now is more like 1870.There are economics forces at play that we may not know or understand or even be aware of now. What we have no lack of is half baked political gibberish.http://www.amazon.com/gp/pr…
Second time I’ve seen this book recommended. Maybe the first was you too. Either way, I think I’ll read it. 🙂
Small doses help. It’s dense, Indoor plumbing had a bigger impact on the work than most/all tech
this new information economy looks very light on job creation. what are the masses going to be doing to earn a living?
Flipping burgers, then delivering them to you, then cleaning up after you’re done. All while taking care of your kids so you can eat in peace ;-p
“But we don’t hear any of our political leaders explaining this.”You just did.Good enough for me.Maybe you should run 🙂
I am at the University of Illinois today. Last night, I was in the College of Engineering and had dinner with some professors. One thing that has occurred to me over and over again is that I hear and see a lot of fear from people. At dinner, we were talking about how if people understood the innovation that was happening, and could be exposed or participate in it in some way they would have less fear. Instead what would happen is by being exposed, they would generate new ideas and create new things.Software is eating the world. Machines, robotics, AI, and algorithms will replace lots of jobs. They always have. But, technology innovation which causes creative destruction always builds up new industries and opportunities we never would have dreamed of.Some of the stuff I was exposed to yesterday was mind blowing. Yes, it will commoditize more jobs. But, it’s going to create new ones and make our lives so much better.I am a person who’s job was automated. I know the pain. It horrible to go through. But, there is light on the other side if you look for it-or are guided to a place where you can look for it.
Hi,Was wondering if you could talk a bit more about how/when your job got automated away, and what the process o personal reinvention was like. (Feel free to point me elsewhere if you’ve already covered the topic.)
Sure. It’s painful but I am happy to talk about it. I won’t go into gory details because it’s not fair to anyone. I sort of instigated my unemployment myself. To make a long story short, I was part of a group at CME that saw the world changing around 1995. In 1998, our memberships went from $1M in value to $280k. A small membership was $400k and went to $115K. I bought one because I thought they were cheap and was confident our path was the right one. We had virtually no electronic way to trade-it was all open outcry. At this time I was 36 years old. I am 54 this year.It took several years of infighting, and it took a few years of restructuring and CME switched from an open outcry private mutual institution to a fully electronic public institution.For me, it meant not being able to have access to order flow. From 1988-2002, every day when I woke up in the morning I felt reasonably certain that I could make $1000 or more depending on how much risk appetite I had or how the market traded. Even if I was wrong, I could cover the trade fast enough to do little damage. I never traded anyone else’s money. It was all mine. I never had partners or employees. It was all me. People had been doing what I was doing since 1848.When the market went electronic, instead of making $1000 a day that was the minimum I was losing, plus commission. At the same time, the 2008 crash happened and every asset I had dropped in value by 2/3rds, or more. My 115k seat couldn’t be leased out anymore because no one wanted it. My big seat plummeted in value again.I had no way to make a living, and virtually no one would (or will) hire me.Talk about feeling 1 million percent alone. I had no way to make a living, bills to pay and had another 50 years to live.I felt a lot of anger. The way I had viewed the future had not turned out exactly how I thought it would. No one in my network would/could help me because they were all floundering themselves. Think of 10000 fish poured out on a boat deck. Public and exchange policy gone bad is why I started blogging.I reached out for help from people that I thought might-and no one really did-and some screwed me over. That brought more anger.Anger is a human emotion and you have to give yourself permission to be angry-but you have to get over it. I can still bring up some anger when I want-but it’s better to take a clear eyed view of the world.I was mentally frozen. I was physically frozen.It has taken around 7 years of intense soul searching to get to where I am today. Iyengar yoga helps and having a pretty amazing wife helps. I read a book by Parker Palmer (recommended by Jerry Colonna) that is pretty interesting. http://www.amazon.com/Let-Y…I am in a mental place that if what I want to do doesn’t work out, I know it won’t be the end of the world. I will move on and survive. Physically, my body is feeling better (although I need to lose some weight) But, I will have to make some choices I don’t really want to make.
love this.
Thank you for sharing.
Wow, deep and from the heart. Thank you for sharing. Hope brighter days are on the horizon.
Thanks for sharing this very honest and powerful personal story. It’s a cautionary tale every VC and AI person should read as the charge to “automate everything” picks up pace in the Valley.I was at a talk last night by Tim Chang of Mayfield fund in which we were shown scenarios of all sales, services and CRM roles being taken over by messaging chatbots, including the pharmacists & the physicians.The argument is made that AI automation “supplements” human roles but it’s easy to see that it can also, potentially, supplants them and some of us will struggle for years to adapt.
Relative to my comment above (which I made before reading this) did you have enough assets from trading to get into investing as you do now?
Let me answer both comments in one.1, I took a lot of risk in my life. I was a different kind of factory worker. I made my own luck. I am not at U of I today judging the Cozad New Venture Challenge because I sat on my hands. I networked like hell and would talk to anyone in the world that I thought could help me and that I could learn from. In 2003, I could foresee the world changing for me. I was a futures trader and made money by forecasting the future! I got my MBA at Chicago and I started Hyde Park Angels in 2007 with the idea of doing a seed stage venture fund. I continue to work toward that goal. Turns out, Chicago was a totally underserved and ripe market for that to happen. You should see some of the incredible shit I saw today at U of I.Doing what I did, and being an early stage entrepreneur is very very similar mentally and emotionally.The bottom really dropped out of my life in 2009. I was paralyzed by fear. Depression, yup I know it. Being vulnerable-not feeling confident, feeling like the end of the world is nigh, I know it. The lesson for the factory worker is do something-anything. Drive for Uber and go back to a JC and teach yourself an new skill. The ability to change comes from an internal fire within-not from people exhorting you to do it. Nothing happens when you sit still.2. Thanks to my wife, we never spent much money. Without her, I would probably be dead now or absolutely dead broke and greeting at WalMart. I know at least 15-20 people that have ended their life and it’s not stopping. We had enough assets to make investments and live. My wife was willing to take the risk which cannot ever be underestimated. The largest expense we had in our lives outside of a home was educating our children. I never drove brand new fancy sports cars and an exotic vacation was a trip to Florida to see grandparents or driving to MN to go fishing at my family’s cabin. I don’t have a huge art collection or a lot of fancy furniture. I had a gigantic problem because not only did I have family expenses (college and living) but I was also LOSING money not making it every time I turned on a computer and tried to trade. My life was a double drain. Talk about fear.
Maybe you have written about this, but this sounds like a topic/experience that needs be expanded on. It’s these personal pieces that really cause me to think, learn and potentially grow.Also, your emotion is palpable, and that’s not something you find all the time. I want more of that.Thanks for sharing.
Thanks for the feedback I have not writen a lot about it for a lot of reasons Everyone has their own story and they are their own authors of it in their own way Perhaps I should do a few blogposts about it For me its always been easy to wear some of my emotion outside my bodyI blog everyday and my blog consistently evolvesI see so much fear in the world today I havent conquered fear and I dont think you ever do But you can look it squarely in the eye and beat it I am pretty competitive and I dont like to lose
I can only imagine personal experiences are the hardest to write about. I just wanted to say thanks for sharing.Agreed on fear. You never rid yourself of it, but I’ve learned you have to at least acknowledge it. Fear (the personal kind that is) can be an effective motivator.
Nice thoughts I appreciate you taking the time to write that. We need more personal thoughts like that here (I do it quite frequently).The lesson for the factory worker is do something-anything. Drive for Uber and go back to a JC and teach yourself an new skill.Drive for Uber, yes they can do that. Home repairs yes maybe they can do that. Back to school? That’s tough for a) someone who is older and b) someone who wasn’t particularly academic in the first place and that is why they ended up working at a factory job (let’s speculate). I never drove brand new fancy sports carsI think there is something to be said for driving fancy sports cars if you enjoy that type of thing (I do). For me in particular having a nice car definitely helped me in the following ways. a) Dating (really) b) Marriage c) Business deals. As such it was cost effective. I can tie at least one business deal to driving a nice car and not appearing to be a schlepper. And also a bunch of “most likely because of”. Honestly I am not kidding. And dating and marriage are happiness. And happiness helps you not get depressed and make more money. Being frugal isn’t always “an investment”.You know when my Dad was growing up he was generally conservative and frugal to a fault. He bought a small vacation home instead of a better larger one. Turns out the more expensive one appreciated greatly and the small one is in the red value wise now. Go figure. This idea that being frugal always pays off is way overrated. That doesn’t mean blow money or be stupid. But the truth is having nice things (and I do not claim to have a bunch of nice things to be clear) can and does payoff in some circumstances no question about that. I don’t have a huge art collection or a lot of fancy furniture. I had a gigantic problem because not only did I have family expenses (college and living) but I was also LOSING money not making it every time I turned on a computer and tried to trade. My life was a double drain. Talk about fear.Fwiw just reading that gives me anxiety I am very sensitive to that and have felt almost similar in the past. One case was in 2002 when I was in SFO with a girlfriend attending a conference. I saw a homeless man on the street and got anxiety thinking “where is my next dollar coming from?”. I know that’s not what you are saying but I can understand the pressure (typically on men) like that.
There’s the story of Trump seeing a homeless person on the sidewalk and saying “He is worth $8 billion more than I am.”. Apparently that was when some of Trump’s deals were deeply under water. But Trump turned it around. Inspiration for all of us.Gates was at Harvard — fancy place. Too soon he was in a flea bag motel, IIRC, writing the assembler code for the FAT file system, while next door a John and Lady of the Evening were being really loud. But pulled out of it.
Both worked hard and both had different advantages. However Trump is still plugging hard at 68 (for the hardest job in the world). Gates threw in the towel and burned out. (Or the way I think he got some disease that we don’t know about that caused him to stop working). Trump did most things with a skeleton staff of people who wouldn’t be considered the best and the brightest. He didn’t rely on a HR department to hire it was his own instinct. He personally handled all details of all deals. Trump is the ultimate small business guy, Gates is the big corporate guy. Posing in serious “office of the President” pictures looking uber respectable like he is the one guy who doesn’t whack off or something like that. Trump was always grown up. He didn’t go through a phase of not showering and sleeping on the office floor.
Ah, the worst that can happen is you die, and eventually will do that anyway! Given that, just charge ahead!
Congrats. You make me feel lucky: I was able to look at, right, all of Internet search, recommendation, and discovery, a big problem, stir up some original applied math for likely and apparently by a wide margin the world’s best solution, create and enter the 80,000 lines of typing for the software, have it run apparently as intended, and have it now in alpha test. The crucial foundation might seem improbable — some advanced and quite pure math. But, as I look back, Lebesgue, Kolmogorv, von Neumann, etc. were fully correct — quite broadly that math permits taking what you have and getting a good approximation for what you want. Net, that wasLuck! Blind, stupid, simple, doo-dah, clueless luck!
I’m pro-actively do automate jobs away regularly… my own jobs…This week for example I was sick of analyzing data quality by hand. As a result I started to develop a PoC, a tool that just tells me who this 100k rows do look… instead of 2 of a complete review of the data the the tool did the job in half a second.How it feels? Great! I got insight into the methodology of data quality testing, got a new perspective on the subject and did improve my Scala skills.I’m on a new level, just b/c I did a PoC. On the horizon I see much more possibilities what I could do with approach, for example analyzing automatically the topology of raw data to gain semantic insight….Not a bad return for 8-10 hours for recreational coding motivated by a highly manual job, or?;-)
Agreed. The difficulty is the transition. If the adjustment period is a few months to a few years then the story about new opportuniteis /jobs / technologies is compelling. If it is a few DECADES for transition to take place…. well we live in that world and you see what we get. That is the obvious complication. I know you know this, just reiterating it clearly why the “theory and reality” don’t line up and lead to all the apprehension.
I am a person who’s job was automated. I know the pain.Well, with all due respect (as is said) you exited with enough money (and connections) to get into investing from what I gather.A typically factory worker is not having dinners with UI engineering professors and commenting (intelligently of course) on AVC and trying to learn and better themselves every day as you are doing. You deserve credit for what you have done (as I do!) [1] but don’t assume some (what I will call) “single function factory worker” with a high school or community college education is in the same place. That’s not my fault or your fault.[1] My point is there are probably traders who aren’t doing what you are doing now just like not every kid given a 1,000,000 loan from their dad ends up running for President.
So, net, we’re not losing manufacturing jobs to China right now. A pretty good number of manufacturing jobs have been reshored in America. http://www.ft.com/cms/s/0/0… | Yes, it’s good to have an information-based economy, but where are the manufacturing robots going to physically be?
“…in an ongoing march to reduce costs”costs being ultimately wages. when does basic income guarantee come in?
EITC is better
I wish the tax code were more transparent, though – and/or easier for normal people to understand. I know people who don’t actually pay any taxes and complain about taxes. I get the impression they don’t even know they don’t pay taxes (federal income taxes, I mean).
The tax code is rife with all kinds of things for special interests. Additionally, you might hear a politician say, “I am giving a tax break to …..” and the hoops and contortions you have to go through to get that tax break often aren’t worth the marginal benefit to go through them. My good friend is one of the top people in the world on international corporate tax. His solution (which would put him out of a job) is a low flat tax, something like 10%. Milton Friedman correctly tried to explain that corporations don’t pay taxes, they aggregate them so the most economically efficient corporate tax for everyone would be 0%. If we want to create jobs in the US and see GDP grow read this: http://johnhcochrane.blogsp…
I really enjoyed reading that essay. Thank you for sharing.
My good friend is one of the top people in the world on international corporate tax. His solution (which would put him out of a job) is a low flat tax, something like 10%.The transition period and unintended consequences of something like this is mind boggling. It will never happen. Not to mention that tax policy also is a way of getting certain behavior out of people and companies by providing incentives to spend money in a particular way. You take away a valuable stick. Even if there is a downside there is an upside.I have thought “why not give people tax deductions for spending money on certain products in America certain ways?”. [1] Then I think “but yeah that means that if I buy a luxury car made in America vs. one made in Germany the people who work for the German dealership and support system (ad agencies, dealership employees) will be disadvantaged. Now take that and multiply it by 10,000 and you get an idea of the complexity of doing something like this. Don’t believe there is a legit way to even phase this in over time although I am sure there are academics who would propose theoretical non workable complex solutions.[1] Similar to investment tax credit.
Agreed, it’ll never happen, but it’s nice to dream every now and then.As it is, the tax code exacts its price in time and stress as well as money, and every page added to it increases those non-monetary costs; in programming terms, it’s accumulated a rather significant technical debt. For that matter, it may well be close to unmaintainable by now. Starting fresh may have too many unintended consequences, but there’s still something to be said for refactoring (and thus reducing those ongoing costs of time and stress).
Thanks for the link.The tax code is rife with all kinds…Exactly! AND it’s intentionally (IMO) obfuscated to hide the motivation for some of it. Your example of corporate tax is another example. It’s a way to institute a sales tax and pass it off as corporations paying their fair share. (BTW, as such, I am more inclined to leave it alone than to lower it to 0% and raise individual income taxes. The better plan would be to just add a real sales tax (and perhaps cut spending too! ) ).
The idea that jobs of any kind ‘belong’ to one country or another, and that they can be ‘stolen’, is not only not true, it is ridiculous and wholly contrary to the notion of the market on which our economies are based. That’s what the media should explain.
The problem is for the workers that lose the manufacturing jobs, these new technology jobs are not substitutes. Google does not have a headquarters in West Virginia or Oklahoma. These workers have not been trained to be CEOs and start their own companies. When the only other job in town is Wal-Mart, that’s what you end up doing because how are you really supposed to know that you should learn to code, and then how to do that, and even if you succeed do you get a job where you live or do you have to move to a place like San Francisco which you might not even enjoy and is probably far from your family? Lest we forget that San Francisco doesn’t even have room to house the new people.NAFTA made goods cheaper and was a big win for people in the cities. It was a natural disaster for people in middle America. While I think ideas like basic income are exciting, the thing I have come to understand is that while accountants and policy nerds might be indifferent to how dollars move, people are not. A service fee feels less awful than a tax, a tax credit feels better than a subsidy, and money you receive for doing something feels better than a gift.Finally when I talk to many people in the world, the truth is they aren’t excited by their work. They are survivalist workers and do not like their jobs (http://www.vox.com/2014/6/2…. They do not have their dream job, they are working at the thing they do because their other option is to starve and when you are doing something you do not enjoy, you are largely indifferent to the other things the economy might ask you to do that you also do not enjoy except to the extent you receive more money, free time, etc.When I walk into the office I work in everyday, I am aware of how privileged I am to be able to do a thing that I dreamed of doing for many years and get paid for it. I hope everyone gets to experience that feeling at some point. But I think we need to remember that not everyone sits in their first grade classroom dreaming of working at Chipotle or being a Department of Motor Vehicles Clerk. But even people in these jobs they don’t love will go in and work hard because for the longest time the deal was if you did that, if you were a good employee, your company would take care of you. NAFTA destroyed that deal. It is no wonder that something that seems so obvious from an economic standpoint receives so much political criticism.
Matt Zagaja:your post is certified Gold. Something so simple and obvious explained well. In spite of your youthful look.
“The reality for the average American family is that its household income is $4,000 less than it was when Bill Clinton left office.” When you look at macro statistics, perhaps it’s true we’ve played the game correctly, as Fred suggests. But I’m inclined to agree with your perspective here, Matt. There is something deeper and more troubling going on here; and people are right to look for a culprit. This piece from the Times, which includes a lengthy interview with Obama on his economic legacy, is worth a read in this context:http://www.nytimes.com/2016…The quote above is pulled from there.
.Agreeing more with you than you do with yourself.Well played.JLMwww.themusingsofthebigredca…
how are you really supposed to know that you should learn to code, and then how to do that, and even if you succeed do you get a job where you live or do you have to move to a place like San Francisco which you might not even enjoy and is probably far from your family? Lest we forget that San Francisco doesn’t even have room to house the new people.Come on Matt. You know that the world is not SFO and NYC. I deal with people everyday from all over the country that are in IT and fixing network problems and whatnot and they aren’t working at startups in any place, let alone those two places. IT is not the entertainment business centered with jobs in essentially only two places. For that matter even in entertainment there are jobs everywhere (not just LA/NYC etc.) you know you can sing at weddings and do photography at bar mitzvah’s. It’s your issue if you think that’s not as exciting as working in the glamour field in a glamour location. To bad. Everybody wants to do that just like I would assume all high school coaches in shitville would rather be working in the NFL. To bad we can’t all win a prize especially in some competitive field.
I’m not saying these jobs don’t exist across the country but if you live in Buckhannon, WV there are 9 postings for IT jobs on Glassdoor and if you live in San Francisco there are 8,504 postings ( https://www.glassdoor.com/J… ). Even if you are qualified it’s pretty clear where it will be easier to find employment.
Yeah but the population of Buckhanon is less than 6k of people. And the cost of living pails in comparison to SFO. By the way once again I deal with many people in shitville that are doing IT work for people all over the country and the world. So it’s cheaper and easier to do that in (a) Buckhanon than it is in SFO especially with remote access. Lot’s of these 3rd tier IT guys leading the blind customers who know even less. Doesn’t take much skill from my interactions. Today I had someone who couldn’t even pull a whois record to see who was taking care of the DNS..and he is earning a living helping the customer who knows even less. That’s a pretty simple thing that is kind of 101 to me. [1][1] And law? There is a local lawyer that is handling a tax appeal for me on some properties. He won’t make much for doing this and showing up in court. Just 50% of the first years savings. But his overhead is way low and he has carved out a niche and probably makes himself $150k per year with his law job and small office. How did I find him? I asked the local realtor for a referral. So he built up a customer base and is serving a particular market. Plenty of these guys out there from what I have seen but all you hear about (in the press) is the top salaries for kids out of college working at the top tier (legal tax on society) firms. My wife’s ex husband? Got a job out of law school at a top firm but couldn’t hold on to it. So he is now working in some kind of sales position and has loans to pay. He is “really smart” but doesn’t have the hustle. (Lives with parents..)
LE, thanks for your reply but honestly you do not understand how this shifting economy is affecting people. I’m not blaming NAFTA like many do. All this was going to happen and Fred was correct, that we should get out ahead of it. And you are right that people should have more pluck. You have it, I have it but so many don’t for many reasons. But your line of reasoning ends with ‘it is their fault’ and that is where you and I disagree. That is a conclusion that lacks political reality. We must do a better job of helping people transition. I don’t see how we avoid needless prolonged pain and suffering if we don’t And it is the only way to stop politicians from exploiting the situation to enrich their parties and candidacies.
We must do a better job of helping people transition.We differ on the degree to which this turns into “enabling” someone and digging them out of a ditch for making stupid choices with their career and their life and free time.My daughter is in NYC and I help her pay for some of her apartment. I also loaned her the money to pay the deposit last year. She said she would pay me back in 1 year since she would probably get a raise. She got a small raise but now doesn’t want to pay me back (it seems). Her mother (my ex) thinks I should just let her float. I (probably) won’t. You know why? I want her to have more guts to a) either demand higher pay and not be complacent or b) look for another job c) hustle even more. It’s just a philosophy. I don’t want things to be to easy for her so I will take what I feel is a harder line. Hopefully that will motivate her. If I just give her everything she will stay at the job and her employer (which happens to be a non-profit but wealthy one) will be the beneficiary and she will not learn a valuable skill (negotiating and/or taking chances).
LE you and I share very similar philosophies and methodologies. I have two sons and navigate a fine line between patience, understanding and tough love. However, not everyone was raised with our fundamental philosophy and even if they were (as in our children) they don’t really get it until they are living on their own. Then the beta testing begins. You cite examples of your family, your experiences and I’m sorry but they are a fraction of the many experiences out there all who have an equal place at the debate. Those who have no basis in our (yours and my) system deserve more patience understanding from us. It is just not that simple to expound a philosophy, measure everyone by it and set rules based on it. The narrow mindedness of that approach leads to political exclusion, opportunism, endless exploitation (as we seen now) and real trouble. It isn’t easy, it is hard work. Anyway I’ve got to get back to work. I appreciate your thoughtful contribution to this thread. All the best to you.
Except current government policy is to drive down the wages in those jobs via the H1B visa program.My firm opinion is that Larry Ellison donated $4 million dollars to pro-immigration Marco Rubio’s super PAC in order to lower his labor costs..
Mark Gannon:not surprised you received two upvotes on the Larry Ellison allegation, assumption, conspiracy theory statement but surprised you had the gumption to post it in a medium with a high volume of college graduates. Yikes!What other opinions are brewing in that mind? No stop! Don’t want to know. Just was kidding.#twopartysystemsucks #trueIndependents
Finally when I talk to many people in the world, the truth is they aren’t excited by their work. They are survivalist workers and do not like their jobsExcited? This doesn’t matter at all. Period. And there are plenty of people enjoying their jobs just fine. Perhaps because a) they were lucky b) they were smarter c) they worked harder and ignored easy pleasure reinforcements.While “a” and “b” are perhaps beyond their control “c” isn’t. When my Dad came to this country (with nothing after losing parents and family) he took real estate course at night. I remember as a kid him coming home late at night. He did ok with that, he didn’t make a fortune but that is an example of “c”.
But even people in these jobs they don’t love will go in and work hard because for the longest time the deal was if you did that, if you were a good employee, your company would take care of you.That’s big company shit from the 50’s let’s call it. That was only a small (but visible) part of the working world. My dad, representative of many small business people, had a company and gave people jobs. There was no implicit guarantee of long term employment period. If you did your job you kept it. One of his workers (who was an alcoholic) left his warehouse to go for a “better” job at UPS (was the 70’s). He didn’t last a month and then came back to my Dad’s place after getting fired.
Did not reply to this because I did not have time to dig up the data, but came across this interesting tidbit: http://conversableeconomist…. I will concede I maybe embellished a little, although to be fair I know many lifers in Fortune 500 companies. I’m not saying employment was guaranteed but that for the people that worked hard, as long as the company was doing well they were taken care of and trained to do the new things the company needed them to do.
as the company was doing well they were taken care ofMuch of the role of regulations and lawsuits (and discrimination bullshit) plays into this. Things have changed greatly with employment everyone is walking on eggshells. It’s no wonder companies are looking to get rid of people if they can (not to mention it tends to boost the stock price).Employees also realize that the employer doesn’t have their back like in the old days. Do one thing wrong and you are out.
Correct. Which is why I am spending about 25% of my time right now on getting information economy skills into every one of the 1700 schools in NYC
Damn dude, you nailed it. Nothing to add, but “thank you” for such a wise response. Great, long overdue discussion.
“if you were a good employee, your company would take care of you. NAFTA destroyed that deal.”Are you saying sans NAFTA, American companies would be relatively immune from global competition and free to keep plenty of less fortunate workers in obsolete and overpaid positions just to “take care of them”? Really?
I don’t see how you blame NAFTA or free trade generally for the destruction of what sounds like a fantasy about how “if you were a good employee your company would take care of you.” There may have been a brief postwar period when paternalistic companies were able to do that, for some workers (overwhelmingly white males, actually), and it made economic sense to do that because the U.S. had this huge head start (the rest of the world having been laid waste by World War II) — companies that could staff up quickly could expand distribution rapidly. But those companies were motivated by profit as much as any companies at any time.To me the more compelling explanation of our current plight is unbridled deregulation, especially of finance, which allowed a relative handful of people to earn money far above their value creation in the economy, and then use those profits to lock in their advantage by removing limits on campaign funding.That said, I don’t share Fred’s sanguine take on how we’ve navigated the post-industrial era, specifically because of this issue of the commanding heights of the political system being captured by a self-reproducing elite. The obvious parallel is the Gilded Age and the “malefactors of great wealth” who tried to capture the political system to their own ends. What stopped them was not so much the machinations of the Rockefellers and Morgans and so on, criminal though they were, but the dramatic abuses of the meatpacking industry centered on Chicago: the threat to the national food supply caused thinking people to ask if the entire economy and political system needed to be re-engineered to assure basic health. (Incidentally, this is why food-safety issues are such a hot button in China — it’s a threat vector for Communist Party hegemony there.)We have some of the same issues in our country now — how can we have so much subsidized agriculture and such malnourished, unhealthy people? But the blame-the-poor response works better now that it did 100 years ago…
Agree with you on trade and the apparent wish to return to a time that never was, where basically anyone with a pulse could apparently get a job, work for a single company for 20 years and leave with a sweet pension never to punch a time clock again.”To me the more compelling explanation of our current plight is unbridled deregulation, especially of finance, which allowed a relative handful of people to earn money far above their value creation in the economy, and then use those profits to lock in their advantage by removing limits on campaign funding.”Do you have any evidence that there is less financial regulation today than at any point in our history? I mean, I would say that a bigger problem is that the gobs and gobs of regulations on the books are written by the very people whose alleged corruption they are supposed to check — more like mis- or mal-regulation, not deregulation. Seems like the last thing financial elites, i.e. the Jamie Dimons of the world, want is a fully deregulated banking system when they know they get to write the rules for regulating it.
I don’t know how to estimate either the quantity or quality of industrial regulation in any objective way; what I’m describing is I think inherently a subjective take on our regulatory / legislative climate. Dismantling Glass-Steagall pretty obviously had the side effect of creating a cadre too-big-to-fail behemoths, where the upside went to owners and senior managers and the downside stayed with taxpayers.[Along the same lines, I didn’t say there was less regulation than at any time in our whole history, just that the current era, it seems to me, is weak on sensible regulation like the Gilded Age of massive trusts and monopolies.]I agree very much with your point about financial elites writing regulations that favor themselves and their industries, and would go further — many of those regulations reduce competition, entrench oligopolies, and put owner interests first in a way that promotes stagnation. How crazy is it — to take one example — that the government buys drugs through Medicare but can’t use its buying power to negotiate lower prices?
“Dismantling Glass-Steagall pretty obviously had the side effect of creating a cadre too-big-to-fail behemoths, where the upside went to owners and senior managers and the downside stayed with taxpayers.”How do you mean, obvious? AIG, Bear Stearns, Lehman, Countrywide Financial, and the nations largest money market fund that was going to have to “break the buck” were not touched by any changes to Glass-Steagall and were at the forefront of the crisis. Which institutions were made vulnerable specifically because they co-mingled commercial banking and investment banking? That just didn’t strike me as much of an issue. Are you saying that we wouldn’t have bailed out our financial system if we just hadn’t allowed a few particular mergers in the early 2000’s but allowed every other shenanigan that had gone on for so long? I feel like the downside risk was already on the tax payers prior to any changes to Glass-Steagall, and if anything depression era laws were specifically designed precisely to put said downside risk on us tax payers. It seems like a feature, not a bug.”How crazy is it — to take one example — that the government buys drugs through Medicare but can’t use its buying power to negotiate lower prices?”Sounds more like a symptom of handing out monopoly privileges to producers and suppressing entry into the field more generally. I don’t think that allowing government to selectively strong arm the pharmaceutical companies that don’t donate enough to the right legislators’ political campaigns — err, I mean ‘negotiate’ — is the right way to reign in medical spending. Sounds like we will end up with an even more distorted market for medical services than we already have. Maybe I am just too cynical.
Good points — the issue with repealing Glass-Steagall (along with other deregulatory choices like allowing the i-banks to leverage up to 30x, if memory serves me) was more that it created a kind of universal-bank mosh pit where all these institutions were forced to compete by cooking up crazy derivatives, leveraging their balance sheets, and generally rushing around.Competitive pressure wasn’t the problem — I’m pro-competition — the problem was (and is) that the taxpayer still held the safety net under the circus. And you’re right that this was the scheme under G-S too, but the point of G-S when it was written, along with other regulations, was that it kept the circus under a kind of control and limited the lunacy. That was the tradeoff: taxpayer backstop in exchange for a tightly-regulated market.I think we’re making the same point about the whole drug-price thing: I agree it’s a symptom of a general corrupting of government. What I find diabolical is that it’s camouflaged under a rubric of “free market” ideology, patently insincere.
“it created a kind of universal-bank mosh pit where all these institutions were forced to compete by cooking up crazy derivatives, leveraging their balance sheets, and generally rushing around”I see what you’re getting at, but I still protest that altering portions of Glass-Steagall was in any way consequential. Which of those things could they not do before Gramm-Leach-Bliley?If anything, much of the problem stemmed from the ridiculous Basel Accords treatment of capital requirements — i.e. requiring something like a fifth of the capital to be held for MBS’s than they required for the original mortgages. This mal-regulation created the incentive for regulatory arbitrage and greatly increased the amount of securitization and leverage in our financial system while only reducing risk on paper.”the tradeoff: taxpayer backstop in exchange for a tightly-regulated market.”Yes, the worst kind of regulatory regime possible — banks get a closed industry that can expand credit together with privatized profits and socialized losses. “What I find diabolical is that it’s camouflaged under a rubric of “free market” ideology, patently insincere.”Yep. Just like California “deregulated” it’s electricity market in the early 2000’s when in reality our legislature did anything but. Utilities would not have such a thing since they have so many built in legacy costs into their businesses that they wouldn’t be able to compete with upstarts. All they did was create ways for private companies (Enron, Dynergy) to engage in regulatory arbitrage on top of a still-very-tightly-regulated industry. Didn’t stop anybody from blaming rolling black outs on “deregulation”, though.
.Perhaps you are conflating commercial banking and investment banking just a little. Close call as all are closely related.Derivatives came from the young guys with the MBAs and mousse in their hair, the investment bankers. Mostly pure Wall Street plays like Goldman.GS was more of a commercial banking implication which flooded over into investment banking at shops like Citi and BofA who had IBs themselves.The big thing was the increase in insurance levels which made the gov’t the big risk taker.JLMwww.themusingsofthebigredca…
They went from being closely-related to being departments of the same institution (in a lot of cases, not all). The big problem, as I see it, was the emergence of a shadow banking system that ran by investment-banking rules but supported, and ultimately underpinned, the commercial-banking, payment-processing and deposit-taking activities that used to be somewhat protected. That’s how Lehman Brothers became too-big-to-fail, though it wasn’t known to be such, and why the Fed coerced Goldman and Morgan into bank holding-company structures during the crisis — because the whole system would have frozen up completely otherwise, those firms having insinuated themselves into the same TBTF category, without ever becoming commercial banks.This comment thread has wandered away (my fault) from Fred’s initial post, which was about globalization and “losing jobs to China.” To bring it back, I think the idea we are circulating around is whether part of our economy’s problem is due to capture of the regulatory and legislative apparatus by interested parties. In this argument, trade with China is just a stressor on the system: what weakens the system, and our economy, making it less adaptive to stresses like China (or Mexico, or immigration, or Zika, or ISIS), is the stasis imposed by rent-seeking elites.
.On Sunday, Lehman fails.On Monday, ML is chased into the arms of a white knight.Paulson (Goldman guy) was settling some old scores with Dick Fuld.It was personal at the start.JLMwww.themusingsofthebigredca…
JLM:We don’t know the actual intend of Paulson (unless you had talked with him) but the actions provided room for at least the assumption.Should have allowed the market to dictate what occurred with the companies verses picking winners and losers. Hindsight is twenty twenty.
.These guys hated each other which was well known to folks for three decades. At the end, Dick Fuld admits he asked for a favor and was told “no.”The negotiations with ML were going on at the same time.Hindsight is 10-10.JLMwww.themusingsofthebigredca…
NAFTA was a big part of this. It’s a very simple business argument. Business looked at the cost of the American worker and the cost of the Mexican worker and made a simple calculation about increasing profits. This wasn’t rocket science. It was simple math.The tragedy of it was that they bought off the politicians (Al Gore and Bill Clinton) to convince the American people that cutting their own throats was a good idea for the good of the economy (whatever the hell that means).NAFTA isn’t a question about high minded economics and political philosophy. It’s a simple calculation about increasing the share of the pie of people who own versus people who work. Plain and simple.
The evidence, after 20+ years, is nothing like so clear. In fact it’s hard to tease out whether NAFTA had any impact at all, let alone whether it was job-creating or job-destroying, wealth-creating or wealth-destroying. Just Google the phrase “How many jobs did NAFTA cost” and you’ll see the wide spread of opinion, with respectable parties on both sides, and no smoking gun at all.My take is that low-productivity, low-wage jobs are always moving towards lower-cost economies, and that tariff and non-tariff barriers may help a few people in the short term, at the cost of general sclerosis in the long term. I cannot find any case where trade-limiting rules are anyone’s explanation for long-term economic success, and many cases where opening up an economy (e.g., South Korea, Taiwan) created a net gain for everyone.But I also suspect that the era of big gains from free trade are behind us, and that Ross Perot-style threats to resurrect Smoot-Hawley — possibly the most self-harming tariff in American history — are behind us as well. I hope so…
South Korea and Taiwan are not open for free trade. They are open for export but not so much for imports.As for NAFTA destroying jobs, you’re looking at the wrong stats. You should really look at the number of factories that left post-NAFTA versus pre-NAFTA. That completely gets around the jobs numbers that allow people to say “Well, the jobs numbers are unclear,” which feels like another way of saying, “Well we just don’t know so let’s keep doing it.”As for your hopes, Ross Perot was the canary in the coal mine. That canary has grown into the presumptive Republican candidate for President.The American people don’t like these deals because while economists can play with spreadsheets and the well-to-do can posit theories there are real people losing real jobs with real children and real lives.
If there are statistics on factory counts as opposed to jobs, I haven’t seen them. The National Association of Manufacturers, an American lobby group that isn’t a natural ally of free trade, said that 800,000 net new jobs in manufacturing appeared in the four years after NAFTA went into effect: http://www.newsweek.com/fre…For balance, the throw-up-our-hands response is put well by the Council on Foreign Relations: http://www.cfr.org/trade/na…In the end, I find myself agreeing with the vast majority of economists that free trade is a net benefit to global prosperity, and that most attempts to restrict that trade wind up making everyone worse off, often the intended beneficiaries the most.You’re correct, of course, that job losses are wrenching and can hurt not just workers but their families and communities; and not enough is done so that the winners in trade deals compensate the losers. I would argue that the biggest loss was in lowering marginal tax rates in the post-Clinton years, while preserving traditional deductions like mortgage interest that reduce progressivity in the tax code. We should have taken the opportunity of global growth and the rise of China to strengthen the safety net and improve education, including lifetime learning. People live longer, and most people will hold jobs that didn’t exist when they were in high school or college. We haven’t made any of those adaptations. Unfortunately, the world keeps moving along and the idea that we can wall it out through trade restrictions is a dead end.
First your link is an opinion piece, not a report. An opinion from a guy sitting in an office with enough connections to get paid giving his opinion.Second, your entire comment is filled with Washington words that don’t mean anything to real people. “a net benefit to global prosperity.” What?! What does this mean exactly. If the rich getting richer means global prosperity increases and the stock market goes up but towns and families live on the ragged edge then why should that be a benchmark anybody is actually proud of?And this Paul Ryan-esque drivel about tax rates and the safety net? What use are changing the tax rates if the people your talking about don’t really make any real money. Great. Because keeping 90% of very little is still very little. And the safety net? People don’t want welfare! They want jobs. And lifetime learning? Everyone doesn’t have the capacity to learn Adafruit at the age of 62. Eyesight goes bad. Memory gets worse. People get arthritis. You think Coursera is the cure for that?But I have a question for you. How much is enough? How much money do the rich need to feel better about themselves? How much does one person need to fill a spiritual void?Does capitalism exist to serve the people or do the people exist to serve capitalism? This system of people being required to constantly chase the All Mighty Dollar above all else is ridiculous. And this system of people constantly having to scramble while owners sit back and watch their share price increase is unreasonable. Worse yet, it’s unstable. That should be the fear. The system as it stands is unstable.It reminds me of a line in Game of Thrones. A priest said to a threat from one of the elite: “Have you ever reaped the grain? Have you ever sown the harvest? A lifetime of privilege has left you blind in one eye. You are the few. We are the many. And when the many no longer fear the few … ehh.”Donald Trump is America’s primal scream. If it’s ignored it will only get continuously worse.Nick Hanauer said “The Pitchforks are Coming.”http://www.politico.com/mag…They’re here now.
Two thoughts here: 1) you don’t seem to be arguing the assertion that post-NAFTA, manufacturing employment in the US went up, not down; that it was cited in an opinion piece is neither here nor there, though obviously I would have preferred it if they’d pointed to their source. And 2) the point of higher marginal tax rates is to generate resources for education, health care and infrastructure — stuff that benefits everyone, the lower-paid most of all.You may be surprised to read that I agree, the system we have today is dangerously unstable: “what weakens the system, and our economy, making it less adaptive to stresses like China (or Mexico, or immigration, or Zika, or ISIS), is the stasis imposed by rent-seeking elites.” Now I’m quoting myself from earlier in this comment thread so I’d best sign off with thanks for an interesting exchange.
I don’t think the issue is with free trade per se, but with the simultaneous breakdown of the social compact. The most basic feature of the social compact is progressive (or at least flat) taxation, but we’re now with regressive taxation. That means the poor don’t even have a chance at health care and education (we’re not talking handouts here, but a chance at staying alive and developing your skills), and the middle-class is disappearing. It’s got to the point where poisonous tap water in a poor neighborhood actually happened (the golf courses are OK).
Tom Hughes:you just cited historical facts in a medium that developed amnesia on who was the President during:1. False Premise for Going to War2. 45 Million Americans Without Health Insurance3. Controversial Assertion of Executive Power4. Skyrocketing Deficit5. Too close to the Edge on Torture6. Politicization of the Department of Justice7. No Robust, Sustained Alternative Energy Policy8. Hurricanes Expose FEMA Woes9. SEC Allows Investment Banks to Go Unregulated10. No Child Left Behind: A Few Bumps in the RoadThis will get the apologist for a failed view in a tussy.Dragnet Episode Jack Webb as Sargent Joe Friday. As a con man you are a flop.https://youtu.be/gxhuUdZzGYw#twopartysystemsucks #trueIndependents
#realtalk
Ideology “Trumps” facts. Pandering “Trumps” facts. Democrats and Republicans do it to their constituents every election cycle. Wealth creation isn’t the demon. What is done with wealth can become the demon.The manufacturing positions are gone and are not returning. If anyone looks objectively at trade deals they became the catalyst to those positions being obsolete. Cheaper manufacturing “Trumps” costly manufacturing.Every generation has experienced innovation and have adapted. It appears there is no easy adapting to this new innovation because it requires returning to school which many don’t have the acumen or desire. It is difficult to motivate a middle aged person who hadn’t been exposed to school since high school. (A reality)Some people find it difficult to use a smart phone in that age group. Scared and willingness to continue what is most expedient. (Complain and do nothing)#twopartysystemsucks #trueIndependents
It seems like a combination of lack of knowledge, failing to see manufacturing job losses as a natural transition, and the need to please constituents who feel the immediate pain that’s driving today’s rhetoric from some of our politicians.
A while back on AVC there was a Shapeways discussion where I shared my hope the post offices of the US would become printing centers via recycling.John Warner, green chemist genius of Warner Babcock, just spoke about this at RISD. Bring in your waste/recycling to a facility, pitch it in the pile, have it remade into the object you need. I want this via Shapeways and 3D printing to replace the factory system.We have manufacturing backwards on resource finite Spaceship Earth. We are supposed to be repurposing and reusing rather than making new.John Warner has a dream of the highway zamboni. It digs up the crappy highway and chucks it into this zamboni, which via an additive, rolls out the asphalt. He just invented the additive to the asphalt which makes this possible.So I vote for more imaginative thinkers and doers. And I am deeply invested in making sure their education primes them with the concepts they need to grow up thinking about highway zamboni type ideas.
That’s really cool.
What is cooler is how Warner figured out how to do this – while working on an Alzheimer’s drug mechanism he realized it could apply to asphalt. Seeing the parallels in solving is the product of a free mind. We need to promote the free mind more in education.
Amazing !
If I make it to my 80s I expect that all my old man clothes will be printed by a machine at home. The question is, if I look then at the labels at the back side of the printer and the material cartridges, what they would say?Made in …………..
My mother, in her 80’s has her clothes made. I have my own patterns. Yes, I would love to print my own clothes. I also want a Glowforge.I wonder whether your clothes would say Made In my kitchen?
I completely agree. The US has largely played this game correctly
This is happening, many manufacturers moved to southeast countries from China for lower costs already.And no doubt that robots or machines would take the place of human assembling.
Perhaps on cue, here is a lengthy discussion with President Obama where he tries to explain the nuance of what is going on in the American economy: http://www.nytimes.com/2016…
thanks!!! i had not seen it. i hope he tries to explain this. our political leaders must do this.
Nuance is becoming a lost art in American political rhetoric.It sinks to new lows every day.
One contrarian view: to do the manufacturing is to understand how the engineering works. To understand how the engineering works gives you an innovation and competitive advantage. No?
I believe so.
Someone have to build the robots that will send all of us home.
It goes way beyond the cost of labor. The cost of building and operating manufactoring facilities in China is much cheaper.Even for highly automated manufacturing industries like chip making. This article is a bit old but makes the pointhttp://www.washingtonpost.c…
There are two important parts of the manufacturing discussion that are missing here:1) Manufacturing knowledge, product innovation and the product development. To design a new type of product that can solve problems, or elevate an experience, we need designers, engineers and the makers to work together. Plus, when production is automated, we tend to continue to create similar products.2) Small batch manufacturing. The growth of small businesses and the need to test products. Kickstarter has become the go-to for launching and testing products. But when products are produced at mass scale for the first time, we’ve also seen that this causes major delays and defects. Small batch manufacturing, especially when local (although not as cost effective), is a great solution. It allows for new products to test the market, and for small businesses to launch and iterate. We’ve seen this at Maker’s Row, and why so many large and small businesses are looking to test the market more instead of investing millions in 1 style.IP is another conversation…
Unfortunately the electorate feeds on a steady diet of sound bytes. The first such winner with that strategy was Bill Clinton at the behest of James Carville (remember “It’s the Economy Stupid”). Clinton (undoubtedly one of the most intelligent people to ever occupy the office) began his race with nuanced and thoughtful arguments. It was brilliant stuff, but a snooze fest for most voters. Now Twitter requires 140 characters… that’s the most we can handle and process at once
I have the same frustration with the ACA, Dodd-Frank, immigration, and every other major issue facing the country.Unfortunately, most Americans do not have the attention span and/or background to listen to any of these items in enough detail to make informed decisions. (Rush calls them “Low Information Voters”). It is easy to be angry at losing your job and blaming others for “taking it”. It is very hard to accept that a new reality now drives the world.If the Government truly wanted to help the people, they would fund or sponsor a program that would help rust-belt workers move to new careers. Challenging? Yes. Impossible? No.These focused programs would be much cheaper and much more effective than the huge programs in place now.
No one should be surprised when a society defines economic success by increased corporate earnings at largely the exclusion of everything else. Cheap labor drives profitability, which is the Holy Grail. Nothing new here and we set that bar long ago. In 2004, Congress passed the American Jobs Creation Act with the intended goal of creating new jobs to boost our economy. The thinking was by giving corporations a tax break on money earned in foreign countries (5.25% vs. 35%) it would create more American jobs and/or companies would expand their operations in the U.S. Sadly, job creation was never made a requirement so the bill served as a tax break w/ out the necessary quid pro quo. There are laws our gov’t can enact to level the playing field and repatriate jobs, but it requires a mindset that isn’t solely wed to profitability and pressure by external influences (aka lobbyists).
Amen! It is unfortunately too un-populist to say that. It is far easier to blame trade agreements and vilify our trading partners like both Trump and Bernie do. I wish the discussion was more about the bounty of choice and the ridiculously low prices of those products that benefit all of us (even those who were displaced from those jobs). We will never return manufacturing jobs to this country the way it used to be. We need to focus on educating and transitioning our children & workforce to what will be (more technology, more information-based, more globalization), rather than what was!!
The big problem is that both the large industrial complex and the labour movement have a very strong political lobby, and politicians end up bowing to those lobbies. Here in Brazil we have the very same problem, with most of the economic discussion being framed between the industrial lobby and the labour movement.
This is been a big focus of my investments in my current fund. So many industrial functions are being automated, it is so true. Politicians don’t have the stomach to say this as clearly as you do because it’s not a recipe to get elected — however, someone politician who is steady in their constituency or on their way out may say this. Maybe Obama post 2016? Thinking more about it, I am not sure who has the incentive and authority to deliver this message.
They don’t explain it because they don’t understand it. Great insight.
I think what is missing in this discussion is the loss of industrial culture: playing/working with physical things instead of reducing everything to information. We are talking too much about learning to code but leaving behind a fantastic universe that goes beyond Lego and Arduino.For example, Shenzhen is an innovation hub with a new kind of cultural ecosystem.
Reading some of the comments here today make me almost ashamed to be a reader.How many people who generally despise Trump for his attitude to the world outside the US, are today espousing exactly his views, but with a bow of “we have to buy foreign shit” tied up around it to make it smell less like the hypocrisy that is really it is?As an American (YOU – that is you and not me and not many other here) have to :a) Hide behind walls that suggest for some reason you do not need to compete in the world and but are of an US-centric subjectivity just as extreme as that of white supremacists who think there is more than one sort of human.b) Adopt a position (with *ahem* a little humility) that says “hey sure we are from the good old US of A – but (nice though that might be) – we do understand that does NOT entitle us to a single ounce of special treatment from other peoples” – because – why should they?c) Practice hypocrisy as Usual , Preach one thing, but pay for another ! – And then (and this is what sickens many non US observers), whine at the outcome and blame someone else.Sorry – but this had to be said. I can take a republican, I can take a democrat – but I cannot deal with a racist, nationalist who describes him- (or her-) self as being in any way objective in pursuing their goals.
Jeez, a little harsh, no? Don’t conflate Trump’s blatant racism (e.g., build a wall, don’t let Muslims in, gender discrimination, reluctance to condemn white supremacy, etc.) with commentary about productivity and labor inefficiencies, largely driven by U.S. trade policies and an antiquated corporate tax system.
When I read this from @ccrystle:disqus (Note I use this as an example and not an attack on charlie I think his phrasing was clumsy on this occassion and but expect there was no negative intent)….Gut the middle class, then sell them cheap imported shit. We sell them worthless paper and they sell us poisoned toys and toothpaste. …I see evidence of nationalism and hatred and it is aimed at “them” which is a great litmus test for xenophobia – not something I normally think of from CharlieAs soon as you take “they sell us poisoned toys and toothpaste” out of truthful limited context (where it belongs and should be condemned) and into a generalised imputed disgusting behaviour of people who are guilty only by virtue simply of being “NOT us (or not US), there are huge implications…] I suggest that if you had prefixed that phrase with “Jews, homosexuals, gypsies who…” and rolled back to the mid 1930s – you would have an almost exact replica of the pot stirring blind hatred that cost many millions of people their lives a few years later.It is one thing to disagree with policy – it is another to introduce hatred where it does not belong as a clumsy side effect of poor rhetoric.If the world is scared of Trump ( it is and I believe rightly so), we should note the world was NOT sufficienty scared of Hitler.It is generally acknowledged that he triumphed in the power-vacuum after the Weimar republic collapsed through his nationalism and xenophobic treatment of “them” as scapegoats and by creating easily adoptable “truths” of general hatred for consumption without question by the under-trodden people .Blame cultured propaganda, thrives in situations like those in post-industrial areas of the US where labour is undervalued and underwanted – It is not the fault of the unemployed – it is a lack of accountability of Government to needs of its people.The parallels of hatred are frightening, the social conditions are tending towards the same extremes (as Fred notes), and our ability to rabble rouse on mass has multiplied many fold.So we must be careful.So harsh NO.Perhaps not as lucid or learned as I would like to be, and so perhaps not fully explained, but condemning silent endorsement or even vocal accord with evil- YES absolutely.
.The world was not sufficiently scared by Hitler, in part, because he had the willing assistance of countries like Switzerland which were his accomplices in seizing Jewish assets.Instead of providing proof of his crimes, the Swiss assisted the Nazis in locating and seizing Jewish assets, in running R & R for the German Army and their wounded, by allowing trains to go through Switzerland enroute to Italy, by lending money for armaments, by providing forex to the German worldwide 5th Column.JLMwww.themusingsofthebigredca…
Agreed – please see my response to your mis-directed remarks above.Having said that – you cannot blame young Swiss people for their past any more than you can think of young Germans as being as racist as Trump.
.Perhaps the same interest in the facts should be applied to understanding what Trump did and did not say.And, actually, I do blame Swiss and Germans for denying their past. They are apologists.They need to own the sins of their nation, admit to them, and pledge not to repeat them. All nations, including the US, need to know and confront their history.JLMwww.themusingsofthebigredca…
Facts need to be assessed not assumed.I was citing Charlie Crystal on this web page and not Trump !You can verify this for little effort – heck I was not even attacking your beloved leader – I was critising those who fuel his arguments inadvertently !
> reluctance to condemn white supremacy,That’s not my reading of what happened. Instead, some newsie tried to get a headline from a silly claim that some nasty people supported Trump meant that Trump agreed with the nasty part of those nasty people. Within 24 hours Trump had just exemplary statements on the whole thing. But the newsies who wanted to gang up and get and push a story kept trying to make a case for some ugly nonsense. Their case was nonsense. Their behavior was dishonest and disgusting. People shouldn’t let themselves fall for that stuff.
He didn’t disavow David Duke at first blush. He hemmed and hawed, as if he needed more time to digest what was said or inferred. He subsequently did, and then shortly thereafter quoted Mussolini.
My reading is that most of what you are saying is just what some of the newsies put out. Instead, my reading is, on the original question, he sensed a serious trap and just didn’t respond at all. I looked at the actual statements and found nothing wrong with what Trump did.Some people keep saying that Trump is a racist. I don’t see even a tiny bit of it. Instead, I just see a made up claim reinforced by a lot of people who want to gang up on a story for whatever reason. A huge fraction of all media remarks on Trump recycle this old nonsense — it never was true, and it still isn’t, but it just gets recycled.E.g., temporarily stopping Mideast Muslim immigration is just very simple common sense and not xenophobic at all — just simple common sense.Part of what is going on here is the theme of political correctness which has some people just screaming bloody murder at just any contrived tiny thing for any tiny, even imaginary, fraction of the population.I’m concluding that political correctness, a way to totally shoot between the ears much of US policy, was some darned clever foreign, maybe old USSR, sabotage.
.On the highest level, much of the debate is really about fair trade v free trade.We give foreign companies unfettered access to the American market while standing in line to gain access to theirs. One of the reasons these trade compacts require secrecy is exactly that. They do not pass the smell test and they are written to serve Goldman clients.Where most of the trade agreements fall apart is right there. Why are we, Americans, going hat in hand to foreign countries begging for access while they are selling their wares in the US with no barriers?Trump has touched a nerve here. Not only that, he is perfectly correct.Why does Carrier think they can go to Mexico, make the same products they were making in Indiana, and expect to be able to retain access to the American market while employing foreign workers? While leaving chaos in their wake?There is no reason why the US should not be a bit protectionist of jobs and our own economy.The US requires no “special treatment” from anyone. We would like to be treated fairly in the marketplace. We have long ago established our service to the world. We have literally bled for the world’s peace. All we have ever really asked is for enough room to bury our dead.I live in Texas which has a long border with Mexico and I love Mexico. What Trump has said as to the composition of the Mexican illegal immigration is true.The wisdom of vetting Muslim immigrants is proven by the terror attacks in Europe. This is just common sense.Trump is all that he is accused of being while being right on most things.Make no mistake, this is a second American Revolution. The people in the US have finally wised up to how shitty the Establishment, the GOPe, the DEMe, the political dynasties, the Bosses have been running the US.One last thing — I hope you will be offended by this — I want no lectures from countrymen whose countries funded and banked the fucking Nazis. Who are the world’s most prolific bank cheats.Get your own house in order.Not really sorry.JLMwww.themusingsofthebigredca…
Quick retort – I am British and happy to be. And I do take a stand in what I believe in.You refer to blood for freedom – I wonder which of the two of us lost most family members to war on European soil last century.Maybe your Mother and Grandmother also experienced the Coventry Blitz first hand, (I could go on and on and on)I would never have thought war a decent subject for a pissing contest – so shame on you – for drawing me in !So please, before spouting more vitriol – get your facts straight -and your house in order – and apologise if you are man enough !I do live in Switzerland and know many Swiss you are openly ashamed of the national positions taken for example regarding “the singing trains”. Switzerland has a record of personal civil courage but a poor one on taking a stance against evil as a nation.
.You are from Europe. My family came to bail yours out. We don’t live in Europe. My kin landed at Normandy and fought in Italy. Even my mother was in WWII.I sincerely APOLOGIZE for calling you a bloody Swiss bastard, being a Limey is enough.Other than that original unpleasantness in the 1700s and 1812, we’ve always gotten along well though what Cromwell did to my family in Cork has never really been atoned for.JLMwww.themusingsofthebigredca…
Refer The Irish National Archives http://titheapplotmentbooks…to see my Great Grandfathers tithing record in Eire (County wicklow Mungoduff) – he was an an economic emigrant during the potato famine too ! Probably hated Cromwell pretty soundly tooSeems we are more closely related than your open hatred supports.When I sent condolences last year I meant them – If you now hate me for being European, or British it is your right – as it is mine to call you racist.
.I do not hate anyone.I didn’t realize you called me a racist. That is so silly as to not even be worthy of a reply.I did apologize for calling you Swiss, right?JLMwww.themusingsofthebigredca…
I agree with JLM and Mat Zagaja!While the debate about how we got here is important, what we should do next is more important. I think the president is missing a key point selling point in flogging TTIP. The damage is already done. If you’re still manufacturing, you are competitive with anyone in the world and another trade deal isn’t going to change that. Folks I know in manufacturing management all have maximum global elite frequent flier status. My fundamental problem is that the agreement will extend a broken IP system and make change that much harder. Cui Bono? I see no reason to make more money for s@#$ weasels like Shrikeli and Ackman! Pharmaceutical companies eager to move off shore to avoid US taxes do not deserve the US’s support in trade negotiations.I realize I will get down voted for writing this, but I think it’s the truth. The best thing we can do for the working stiff in this country is to unionize Walmart! While unions, like corporations, can do bad things because of the people running them, more money in the hands of Walmart workers (as opposed to people who won the womb lottery) will be good for the communities those workers live in. It would even make Walmart better, since those employees will have more money to spend at Walmart.Trump is wrong and there is no way to bring back an imagined past. The political elite has been caught with their pants down on this issue and only credible proposals that will actually improve the lives of the working class are going to blunt the appeal of ignorant demagogues.
Forgive the length, I don’t have the time to make it shorter.I am generally pro-entrepreneur – and think it’s a path to a meaningful life for many who don’t always ‘fit’ in the large institutions of the establishment – and it’s a key to innovation and growth for societies (or can be).I co-founded a $200MM consumer product company (AND 1). So, I know what building a company is. We did all of our manufacturing overseas and attempted to enforce minimum worker safety and rights. In many of the countries in which we worked, the jobs in our factories were the best jobs available by far. I went to every factory we worked in. I saw the good ones and bad ones. Not outsourcing would have been competitive death for our business.I even was ‘in the game’ long enough to see all the shoe industry manufacturing jobs leave Taiwan and go to China and watch the pain there.And while the data is unclear as to whether outsourcing is a net good or bad. (see for example: https://www.washingtonpost….What is clear is that the more rapid the pace of industry and economic change, the greater the human costs. The rapid loss of manufacturing was very bad for large sections of our society – many of whom still have never recovered. And it was a (relatively) tiny number of jobs – 7Mm to 8MM total manuf. jobs lost from 1979 peak to 2016.Take an economic tour of Philadelphia or Detroit. I have. The cities and their workers have been gutted since the 1950’s or so by a combination of a) suburban flight by upper middle and upper class whites beginning in the 1950’s and then b) the manufacturing sector collapse. This led to increasing segregation and even more failing schools with concentrated poverty. This led to rising crime and a series of harsh incarceration practices – investing more in many areas in prisons than in schools. Ignoring basic research around ‘solutions’ that are cost effective and moral, things like universal pre-k, and parenting education and nutrititional programs for moms and kids. Opting instead for prisons. This is all very well documented.However, the decline in manufacturing was ‘tiny’ on a relative scale – maybe 7 MM jobs total lost from 1979 to today.What’s coming now is a steamroller – the most rapid and dramatic change in our economic system in human history – and like nothing we’ve ever seen. The total decimation of many service sector and middle class jobs is almost here. We have automation allowing (or soon allowing) corporations to replace and significantly reduce headcount for things like a) drivers, b) accountants, c) investment advisors, d) basic service and customer service reps (through bots and AI), etc.Everyone has read (most likely) this Oxford study:http://www.oxfordmartin.ox….They are projecting up to 47% of all jobs to be at risk – within a few decades. This pace is simply too fast for a workforce to, by and large, adapt. When these jobs are automated, the sheer size and scale of it is unlike anything that has happened in human history. A general ‘fear’ pervades society – with war, economic uncertainty, and fear over the environment and climate. This is why we are seeing a large rise in social unrest and dystopian fiction – and the rise of films like the Hunger Games, Snowpiercer, the Divergent Series, the Road, etc. This is why we are seeing so much ‘Zombie’ media having traction.It’s why our political process has become so broken – with extreme moves away from the middle – people are hurt and scared and the status quo isn’t working all that well.People can feel it. The wealth is being concentrated (under our current political and social model) in the hands of a small number of founders and investors who win the lottery – either through luck or birth or happening to love a small area that explodes in popularity. In starting an over $200MM company, I won the lottery. If I got ten lives, I might have that same outcome in 3 of them – maybe.I am now scared for our future and the future of my two young girls (10 and 7).What should scare us all is that the government response (our government’s response) when we lost 7 million jobs – was prisons and harsher penalties.When it’s 20-50% of the work force, we are going to have real issues UNLESS we all get involved.When we throw in uncertainties around rising climate instability, and growing access to WMD’s and other advanced weapons – we need to worry – AND WE DO OUR BEST TO HELP CREATE SOLUTIONS.We’ve all seen the stats in the rise of income inequality (or should)www.imf.org/external/pubs/f…The pace of change matters. So does income inequality. Both are keys in social stability. They are both rising. Automation will make it worse globally.And most people don’t want to be handed a ‘basic income.’ People want to work. Work and career is a basic human need for feeling self-worth and a connection to the society. When 20% to 40% of existing jobs are automated and there are no replacement jobs for many of the middle age and above workers, and people lose the feeling of social worth, we are looking into an abyss – UNLESS we get really serious and smart about our response to this.These issues are too large and complex to leave to the Government and public sector, although they are needed allies in the fight.We need more investment in responses and solutions. We need less focus on profit only and more focus on the basic social contract and structure of the economic systems. What do we do with all these people and how do we retrain them, and how can we change the budget spending and focus of our government and private sector (time, talent and minds) to equip our society to be robust enough to handle this?We need much more innovation in education – across the lifespan. We will need to find ways to create huge numbers of jobs – jobs people want and have the skills to do – and to connect people with the jobs they are best suited for.We also have to remember that, in many cases, many of the foundation level breakthroughs in the core technology allowing for wealth creation came from DARPA, NASA and government funded research – and yet the society that paid for that research receives very little back – in terms of ‘equity’ owned in the companies or even, often, tax revenues received from the corporations or individuals who founded them.So, we need taxes and redistribution of wealth. It helps economic growth. That’s a fact. http://www.oecd.org/social/Focus-I…Entrepreneurs benefit from the US system – stability, military strength, education, etc. But all too replace jobs and contribute little to helping those hurt.What saddens me is seeing us squander trillions of dollars on wars in the middle east and not invest in education here at home. Investing in education – what we know works is a must. We haven’t even got universal Pre-K yet and we know that works a lot better than jails later in life.We all need to get engaged in the process, especially those of us who have benefited from living in this (sometimes) great nation.
lots of agreeing going on in this thread. i agree too.
> I think the presidenthates the US, is hurting the US as much as he can without actually being impeached, is not respected even by Saudi Arabia or Cuba, and otherwise is an idiot. We’ve learned our lesson. Now, let’s just f’get about him.
I’ve been manufacturing consumer electronics for the last 20 years. I watched UK factories invest in automation at the beginning of this century to stop jobs moving to Eastern Europe and China. Didn’t work. I’ve seen the last 5 years of erosion in the Shenzhen scene as manufacturers flee high labor costs to move to Indonesia, Malysia, Vietnam and Thailand. Automation, manufacturing know how and supply chain are not enough to to overcome labor cost.In the late 90’s analog video camera manufacturers had almost completely automated assembly lines. Still it was more economic to have 30 people working a line than to have that automated line in S. Korea. Labor cost contribution to overhead of management, engineering etc can destroy your economics.For robots to win the manufacturing sector they need to be practically free to buy, cost less than $300 a month and be *completely* general purpose and trainable. Oh, and you need to be able ramp up and down their supply at zero cost.Of course we will have more automation in the next 20 years. I dont have any evidence yet that it will be enough to overwhelm the influence of low cost labor.
Robert Reich nailed it:http://robertreich.org/post…Open Letter to the Republican EstablishmentSUNDAY, FEBRUARY 28, 2016You are the captains of American industry, the titans of Wall Street, and the billionaires who for decades have been the backbone of the Republican Party.You’ve invested your millions in the GOP in order to get lower taxes, wider tax loopholes, bigger subsidies, more generous bailouts, less regulation, lengthier patents and copyrights and stronger market power allowing you to raise prices, weaker unions and bigger trade deals allowing you outsource abroad to reduce wages, easier bankruptcy for you but harder bankruptcy for homeowners and student debtors, and judges who will let you to engage in insider trading and who won’t prosecute you for white-collar crimes.All of which have made you enormously wealthy. Congratulations.But I have some disturbing news for you. You’re paying a big price – and about to pay far more.First, as you may have noticed, most of your companies aren’t growing nearly as fast as they did before the Great Recession. Your sales are sputtering, and your stock prices are fragile.That’s because you forgot that your workers are also consumers. As you’ve pushed wages downward, you’ve also squeezed your customers so tight they can hardly afford to buy what you have to sell.Consumer spending comprises 70 percent of the American economy. But the typical family is earning less today than it did in 2000, in terms of real purchasing power.Most of the economic gains have gone to you and others like you who spend only a small fraction of what they rake in. That spells trouble for the economy – and for you.You’ve tried to lift your share prices artificially by borrowing money at low interest rates and using it to buy back your shares of stock. But this party trick works only so long. Besides, interest rates are starting to rise.Second, you’ve instructed your Republican lackeys to reduce your and your corporation’s taxes so much over the last three decades – while expanding subsidies and bailouts going your way – that the government is running out of money.That means many of the things you and your businesses rely on government to do – build and maintain highways, bridges, tunnels, and other physical infrastructure; produce high-quality basic research; and provide a continuous supply of well-educated young people – are no longer being done as well as they should. If present trends continue, all will worsen in years to come.Finally, by squeezing wages and rigging the economic game in your favor, you have invited an unprecedented political backlash – against trade, immigration, globalization, and even against the establishment itself.The pent-up angers and frustrations of millions of Americans who are working harder than ever yet getting nowhere, and who feel more economically insecure than ever, have finally erupted. American politics has become a cesspool of vitriol.Republican politicians in particular have descended into the muck of bigotry, hatefulness, and lies. They’re splitting America by race, ethnicity, and religion. The moral authority America once had in the world as a beacon of democracy and common sense is in jeopardy. And that’s not good for you, or your businesses.Nor is the uncertainty all this is generating. A politics based on resentment can lurch in any direction at almost any time. Yet you and your companies rely on political stability and predictability.You follow me? You’ve hoisted yourself on your own petard. All that money you invested in Republican Party in order to reap short-term gains is now reaping a whirlwind.You would have done far better with a smaller share of an economy growing more rapidly because it possessed a strong and growing middle class.You’d have done far better with a political system less poisoned by your money – and therefore less volatile and polarized, more capable of responding to the needs of average people, less palpably rigged in your favor.But you were selfish and greedy, and you thought only about your short-term gains.You forgot the values of a former generation of Republican establishment that witnessed the devastations of the Great Depression and World War II, and who helped build the great post-war American middle class.That generation did not act mainly out of generosity or social responsibility. They understood, correctly, that broad-based prosperity would be good for them and their businesses over the long term.So what are you going to do now? Will you help clean up this mess – by taking your money out of politics, restoring our democracy, de-rigging the system, and helping overcome widening inequality of income, wealth, and political power?Or are you still not convinced?
There is no need to worry about this issue because I’m told that Trump is going to make everything great again.
.Your comment is facetious and that is a great thing.But, on a very serious note — do you think we (and the Presidential candidates) would even be talking about this if not for Trump having raised it?In great measure, the 2014 Republican sweep of the Senate, House, Governorships, Statehouses was because the average rank and file voter was angry about things like this.Trump is the only one who saw this anger — not Rubio, Carson, Bush, Gilmore, Christie, Fiorina, Santorum, Huckabee, Pataki, Paul, Graham, Walker, Jindal, Perry, Cruz, Kasich, not Humpy Freakin’ Dumpty.Trump.Trump has set the agenda.This agenda is at the core of a pathetic economy that grew in the most recent quarter by 0.5% — the rounding error?Trump is the reason for the tone of the season and it will serve us well.JLMwww.themusingsofthebigredca…
Not so simple: in all of these trade deals we exchanged the ability to export tech, finance, etc. duty free for developing countries ability to export manufactured goods duty free. This was the trade, and it made the tech industry more money when we were already making a lot of money, and accelerated the decline of manufacturing jobs. Yes, these jobs will all be automated soon enough. But let’s not pretend these were fair deals. And the next answer of course is that the cost of goods declined, so yes, we saved the average blue collar family a few thousand dollars on their TV, fridge, couches and children’s toys. I think they would happily take their jobs back instead.
There was another reason: Some Foggy Bottom world theory types thought that they could establish and maintain a world order that at least kept down the chances of another Hitler or Tojo.Their technique was the carrot and the stick.The carrot was US trade deals — e.g., give Pukistan the US Carolina textile industry.For the stick, that was be in the US sphere or face the US military. We were essentially successful in Korea, but we got our bluff called and lost in Cuba and Viet Nam. In Iran, we set up the Shah but that mostly backfired. We were successful in Gulf War I but lost in Gulf War II, e.g., ended up with ISIS.So, some of these terrible US trade deals were from the Foggy Bottom types giving away US manufacturing as a carrot to get their idea of a world order. That was not well explained to the US voters who never got to vote on it.
…and assuming certain things like smartphones really can’t be made here…
Andy Grove on why he was concerned about losing manufacturing jobs to China: http://www.bloomberg.com/ne…One point he made there was that when you lose manufacturing, you often lose the the engineering skills and jobs that go with it.
.Yep. You lose jobs and then you lose the freakin’ industry.One of the most important bits of legislation ever passed by Congress was the requirements that were put on foreign car companies.Today, BMW and MB and Toyota are made in the US because of this legislation. We did not lose the jobs. We did not lose the industry.The Congress doesn’t have to be stupid.JLMwww.themusingsofthebigredca…
in addition to matt’s excellent comment, much depends on how one defines industrialization and information. as usual the resolution to a beef presented in a binary context (information vs manufacturing) is never one or the other but rather both (or neither, for the nihilist perspective). manufacturing will be reborn alongside information and dismissing it as subordinate is a mistake in my opinion, akin to to how apple all too readily sent much of its manufacturing off to samsung.
But it does not address the larger context which is that manufacturing is becoming more and more automated and many of these jobs will not exist at all anywhere in a few more decades. Here, of course, “in a few more decades”, even if true, is a long time. In particular, and of high importance, it is time for our present labor force to retire. I expect that for anything very significant, the time will be longer than “a few more decades”.And we should expect, and, really, want, it to take time, much like steel, steam, rails, electricity, electronics, mechanization of agriculture, etc. took time. E.g., there needs to be a supply chain from the womb, big changes in teacher training, curricula, education, experience, technology, business models, capital allocation, etc.Or, in simple terms, Moore’s law is mostly over for now, a long time, or longer.It’s in statements such as the quote above where the AI hype starts to be dangerous — throw tens of millions of US workers and just crucial parts of the US economy on a junk heap for no good reason — suicidal, literally so for many thousands of good US citizens.We are now well into a transition from an industrial economy to an information economy.Way, Way, WAY, WAY too simplistic. In fact, we are being fumble bumblers with “an information economy”. What can and will happen in “a few more decades” is not very clear but, still, with anything like our current approaches, not very much. It seems to me that part of that transition was the move of industrial jobs to lower and lower cost regions in an ongoing march to reduce costs. No. One million times, 10 billion times no. No way. Wildly wrong. The point “lower cost regions” is such a wild oversimplification to be wildly and even dangerously wrong.Instead a simpler but still more correct view is: China is awash in very poor people without much to do. Why? The traditional reason: Live in river valleys, grow grains with irrigated farming, make babies, and do little else. E.g., Egypt. And the country is very short on 21st century infrastructure of all kinds.But what China can do is put a few hundred million people into essentially slave labor to manufacture things cheaper. Just cheaper.So, then they can get the business by underselling nearly everyone else. They can drive essentially all competitors out of business. And, maybe then they can get some market domination and raise their prices.They can pollute their lands, water, and air, have dangerous food, poison their people, etc.Well, we in the US don’t need that. And we don’t want that. We can, and did, do just fine without China, and we still can. I’m sorry about China’s hundreds of millions of poor people, but they are trying to make us as poor as they are, and we don’t need that. In fact, it’s a good way to have riots in our streets.So, for decades, out of the woodwork have come economists with simplistic theories claiming to show that buying cheap stuff from China is in our interest because, then, the US workers are free to write high value software, etc.BS. Total BS. Upchuckable total BS. Manipulative, deceptive, destructive, contemptible, disgusting, ugly, nasty BS. Excuses from the people who stand to make money outsourcing jobs and importing products.Instead, China is, in part, using predatory marketing practices, collusion in restraint of trade, dumping, theft of trade secrets and intellectual property, slave labor, polluted land, water, and air, etc. to win an economic war with the US, that is, take, control, and dominate markets. E.g., the US laws on intellectual property, anti-trust, etc. don’t apply in economic globalism. China knows this; nearly all of our US political system has enjoyed ignoring this simple but crucial fact.Fred, the whole issue of loss of US jobs and, more generally, economic globalism is not and has not been much about lower cost regions but just about traditional fighting to take, control, and dominate markets by techniques a large fraction of which you and most of the AVC audience could quickly and effortlessly outline. For techniques you know so well, you are curiously reluctant to see China, etc. using just those techniques. That means that these low cost regions that “stole our jobs” will also lose these jobs eventually. Nope, not significantly, at least not for a long time. You are giving up way, Way, WAY WAY too soon. You are giving away much of the US, shooting tens of millions of US families in the gut, pushing the suicide rate off the tops of the charts, while looking like a spineless wuss and a pushover from some silly quasi-academic excuse making and not the smart, highly determined entrepreneur you really are.Even if your statements about automation are correct, really your position is just to let China have that future, too.Fred, you know about competition: Well, China is competing. They are desperate, have several hundred million people without much to do. The leaders are trying to keep down a revolution from hundreds of millions of starving people that would cost the leaders their heads — literally.Fred, if you want the US to have a world class, world leading future in an “information economy,” parts of the US are ready, willing, able, and eager to totally blow away nearly everyone else in the world. Sure, at times in parts of the work Germany, France, Russia, England and a few more can compete, but in total we can blow away everyone outside the US.For the investment community, one first, big step would be, drum roll, please, be ready to read and get expert reviews of the crucial core technology in the corresponding business plans, a step the US investment community from Sand Hill Road to Buffett and Blackrock are determined, with feet locked in high-tech reinforced concrete, never but NEVER to do (the situation in biotech is better). Indeed, the US investment community regards the crucial, technical core of an “information economy” as just routine C, C++, Objective C, Python, HTML, CSS, JavaScript, and SQL — wrong, way wrong, wildly wrong. That’s like Lockheed thinking that the keys to the technology of aerospace were spruce, glue, and linen or maybe even just steel, aluminum, and titanium.Similarly way, way wrong is thinking that the academic foundations of an “information economy” are from academic computer science — at best trivia and otherwise sucking a stream of sewage, e.g., AI hype. Computer science is no closer to intelligent software than the shrubbery in my front yard.The academic foundations of an “information economy” are from academic pure and applied math because it is the only subject with the crucial prerequisites, going back thousands of years, and methodology — theorems and proofs.E.g., far too much of computer science and practical computing is still in bitter quasi-religious arguments about programming style among Turing-equivalent programming languages.Too many famous chaired profs, e.g., of machine learning, in famous departments of computer science quite literally still are at the level of sophomore calculus before having learned how to read and write math.Computer science as a field is a train-wreck: They have some big problems, so big that building “an information economy” on computer science is like building physics on flogiston or medicine on the four humors. Four debilitating problems in computer science:(1) They are essentially illiterate, that is, quite broadly in the field they are unable to write clearly and precisely about their work. The academic field is largely still stuck in the days of self-taught programmers with essentially only weak high school educations mumbling about gibberish of undefined acronyms. One step up would be to a decent college term paper. Another would be the better writing in engineering, then physics, especially a good text on freshman physics, and then to math, a good text in calculus, then advanced calculus for applications, then, right, Halmos and von Neumann through Rudin and to Bourbaki. Knuth is the exception and likely and apparently the only significant one.(2) Computer science is essentially without the prerequisites for progress in their field. Engineering, physical science, and applied math knew what to do and did it, but computer science has not. Even social science did better: E.g., my brother, no math whiz, but Ph.D. in political science, knew in very nice, even profound, terms about statistical hypothesis testing, but, in that field, just crucial for much of computer monitoring, for performance, reliability, security, etc., computer science and practical computing have yet to catch up. Knuth gave computer science some examples about how to use math, but the field of computer science too quickly returned to trivia down to nonsense.(3) Computer science is horribly short on any effective methodology for progress.(4) Computer science is short on what the heck their goals are. For a while, it appeared that the field wanted to bet everything on finding some fundamental truths about time and space computational complexity, but except for the question of P versus NP the field never did. About the best fundamental truth they got was the Gleason bound. Or we might also include the CAP theorem.That was A. Gleason, a terrific mathematician long at Harvard. But we don’t hear any of our political leaders explaining this. I wish they would. Fred, our political system is driven by money from people who want to make money, and a lot of those people want to export US jobs and import foreign products. The rest, they are not thinking about.But, for what you want, which is good, there is … 3D printing, artificial intelligence and cyber warfare. athttp://time.com/4309786/rea…Well, let’s just say that really he meant the foundations of an “information economy” whatever they are.
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There is so much BS and so many Myths around Manufacturing Jobs in this country, it’s ridiculous. Yes, we screwed up manufacturing. No, all the manufacturing jobs are not going away (not even close) because of robots despite what Fred or Andrew McAfee might think. For the most part, the situation we’re in with these jobs was entirely manipulated, entirely reversible, and it is very much in our best interests to do so.http://blog.cnccookbook.com…
It is an interesting point. The main concept of free enterprise is to make things more efficient which that cost of labor is a part of but as cost accountant I can tell you that the cost of labor is relatively low in the total cost of most production inside or outside of the USA. With that understanding more gains in efficiency are actually people losing employment whether it is inside or outside the US. The argument that you could also make a product more cheaply by reducing materials means also there is a loss of jobs because the supplier that was supplying the paint or metal or whatever now is producing less and less employment.What I wonder about is why as we go forward as a society why are we working more hours? It would seem that if we are more efficient we should have two choices, one to work less and have more time or work the same and have more stuff. It appears as Americans we have chosen the later which from my personal standpoint as a 50+ male I have for more stuff than my dad has ever made (ditto my dad vs. grandfather). What I find interesting is my children don’t seem to care as much about size of house, new cars or the traditional trappings of what we considered success. Certainly this is a micro economic view of the situation but is similar to Japan a 20 years ago when the youth rejected the long hours their parents were accustom too. The question of what is important to Americans could very well change.
Even though ‘building new information based economies’ may be ‘.the long term winning strategy’ that doesn’t mean that you can necessarily forsake investment in the old. What’s the timing of the investments?40 years ago, the cost of implementing new technology was immense. Hence virtual monopolies. 10 or 20 years ago tech cost was high. Its getting lower and lower.So if your economy is killing it the old way, soon you’ll have the dough to jump on the next ‘information services’ breakthrough, while we wait to justify another investment .To justify new investment,,outside of the venture community, existing investments have to have a return or a strong promise of a return OR a politically fraught announcement of failure needs to take place (change of direction), .I really can’t see that public institutions have the flexibility to say “well we failed 7 times out of 10, but we’re still up by 30%” Nobody is going to give that a hooray.
Two great complimentary reads on this subject are Paul Graham’s The Refragmentation and Martin Ford’s Rise of the Robots. The more I learn about this subject the clearer it is that the structural shift that is underway will unequivocally widen the income and skills gap forcing governments to work closer with the private sector in creating minimum viable social safety nets where possible to support the workforces that will be left behind. Impact on lower income countries however (where population growth is the largest) is going to be the toughest nut to crack, and with attempts at isolating them (or the developed ones from their impact) being doomed to failure, needs to be something the world as a whole has to address.
Jesus Fred. You are a venture capitalist.You think long term. And, with all due respect, you can afford to think long term.But if you’re a family of four in the Midwest and you just lost your job at the Carrier factory to Monterrey, Mexico and you’re trying to pay your mortgage and feed your kids (look at your kids right now and think how it would feel for them to be hungry … hunger isn’t a long-term problem, it arrives every four hours), long-term means absolutely nothing to you.For a politician to get up and explain the long-term benefits of you being out of work and how you should just grin and bear it for the greater good (whatever the hell that means) would be political suicide.
Wow, good post! Complicated topic made easy.
Made easy if you’re doing well and have benefited. Otherwise, go drive for Uber and pray you don’t sprain your ankle.
You may be right about mass manufacturing. But skilled manufacturing- job shop and prototype shops- shops that work hand in hand with US based innovators and designers are being displaced by overseas competitors. Believe it or not, in hardware, technical innovation is bred hand in hand with very skilled low level trade based personnel. If you peek behind the curtain of major technical innovators, you will find that engineers and designers simply rely on skilled tradesmen to spur innovation.The workflow in the kinds of shops which produce this ability cannot be automated due to low volume and high part variability. A tight interplay between designer and the builder is a critical factor in product design. Oftentimes a skilled machinist is a better designer than a person with an engineering degree. Yet it has gotten to the point where it makes no economical sense to pay these skilled people to aid in my design process, simply because Chinese resources will *always* be cheaper. In some cases due to real competetive advantage, but there is always the specter of currency and market manipulation.For many people who can’t get into a top engineering school, vocational school is the next best option. Yet if a job shop simply cannot compete in the USA because that skill and knowledge can be provided artificially cheap in China, who will have these crucial skills in twenty years? And what will these people do instead? How will US innovators learn the constraints created by manufacturing limitations?The implications of an economy which an only dream and not build are staggering, right down to who actually owns what. Could you imagine a country full of software architects but no programmers?
Sad but true. As an entrepreneur, I hope the new government will be more serious in finding ways to battle out Americans losing employment rate. Great article btw.
The weird thing is that I honestly think we really should hope that we can automate. The scope of things that need to be done in this world is vastly larger than the scope of things people are doing. The greatest tragedy is we live in an economy where people are unemployed while other people cannot access the doctors, lawyers, teachers, and social workers that they need to succeed and be healthy in life.
“Squeezing out more profit” explains a lot of things that happened in the past and are happening today, all backed by a system that encourages and is based on perpetual growth. If it is not regulated by legally backed and enforced human/robots quotas I don’t know how you can survive fully automated competitors. I believe that people with a good will as you can do great things for their communities and make a change, but that is not enough.
.”The US investor class and management handed them to them.”Real wisdom can be reduced to the size of a tattoo in 18 pt type. I will be getting this tattooed on my left inner forearm in the aforementioned 18 pt type, likely Helvetica.I agree more with you than your own Momma when you were born loved you, the last time you were bald.We did this to ourselves. We screwed the American worker and allowed him to be replaced with prison labor, child labor working in a cesspool of environmental chaos.We did this for greed. We did this for Wall Street. We did it for the worship of a filthy dollar. We betrayed the American worker.We are paying the price in the unemployment lines, in the hearts and minds of men who cannot find work. In the loss of dignity that goes with being unemployed.We did it for greed.JLMwww.themusingsofthebigredca…
not because the US wasn’t competitive, but because they only cared about squeezing out more profit.Oh please Charlie stop with all of that liberal shit. You know if you are in a business and your competitors find a way to cut costs you have to match them. Or you lose sales. You know that. [1] This is all driven mostly by the consumer and their quest (like people voting and listening to politicians) to ignore actual details and buy based on cost. That is why we buy cheap shit from some 3rd world country that won’t last as long as a more expensive product from any country. People are always stupid with this. Even people with money. Quality is a possible sell but a hard sell. Takes a great deal of effort and marketing instead of simply offering a lower price which will fly off the shelves. Many reasons for this including the fact that people are greedy and if the impact isn’t until the future they will take their chances.[1] Yes there are exceptions obviously. Duh. Luxury products.
True points, but part of the reason doctors and lawyers aren’t availlable is because they make so much money… (true for almost all doctors, and some of the lawyers, although obviously bi-furcation in legal market has ramped up in the last decade). We could easily have lower cost healthcare and more availability but peope in that industry resist. Which is normal. Just like unions in manufacturing resisted. Until there was too much opportunity to completely outsource.If we automate more and more in health care the general public benefits but the industry may get slashed hard.. its a constant balancing act looking for an efficient nash equilibrium point 🙂
Automation as the enemy of desirable-sounding manufacturing jobs may be a hangover from the mid-century era (in the U.S. at least) when service jobs were denigrated and factory jobs seen as desirable and rewarding. As I see it, the natural order should be the other way around: service jobs should be the rewarding ones, because they give the provider the opportunity to do something unique each time, something that responds to the needs of the unique client. Obviously I’m not thinking of, say a fast-food kitchen as a “service job” in this sense (though government statistics inevitably call them service jobs). But I am thinking of jobs up and down the economic ladder, jobs that reward empathy and creativity as well as hard work.This is a bit of a jump but if you watch “The Grand Budapest Hotel,” the movie by Wes Anderson, you can see it as a comedic but heartfelt ode to a certain kind of high-status service profession, exemplified by Ralph Fiennes’ character.
Automation is ultimately beneficial and technically/economically unstoppable.It will however requires the development of new value systems around the assignment of said automated wealth creation.That is the tricky part where it all gets tangled up in the old left/right, makers/takers food fight polemics.It is hard to imagine what set of incrementally workable steps could transition us into new social/economic values/attitudes regarding the redistribution of automated-wealth-creation.The whole thing is a historical chicken/egg wealth zero-sum belief-system problem. It is hard to committee to abandoning zero-sum wealth distribution patterns until automated-wealth-production redistribution proves its potential as a new non-zero-sum economic force multiplier and that cannot be proven until we take a leap of faith and committee to some kind of structured politically-risky minimum-income transition experimentation.That is a hard sell in a global corporate landscape especially in America!The real problem with wealth concentration is not the concentration itself. Regardless of wealth ownership it will seek reinvestment. The problem is concentrated wealth tends to limit the scope of reinvestment only to economic organizational experimentation that reenforces its own concentration of wealth, often reinvesting in paper based profits with no tangible economic value creation. That is fair enough as far as it goes and certainly better that government central planning but that leaves little to no middle ground for large scale economic production/organizational experimentation.Who’s on first 🙂
The reason doctors and lawyers make so much money is they need to in order to pay off their education. The truth is that there is a large contingent of people in the legal and medical fields that are there for purely economic reasons and they are indifferent to whether they litigate a criminal case in a courtroom or maybe become a manager in a Fortune 500 company, but they are not indifferent to their salary. If you don’t have to pay off law school loans then paying a lawyer $40K/year is much more feasible, and if you manage to filter the people going into law school in a way where only the people who enjoy it go through the process, then they’re more likely to accept the lower salary.
Decent people are necessary Charlie, but then ‘being decent’ precise definition is subject to interpretation and varies from town to town.
Nope as my comment to Charlie indicates blame needs to be layed on the consumer and their buying habits and greed. People don’t pay for quality, the masses, even though you or I might. (You seem like a guy who will pay for quality and buy the higher priced lawn chair or piece of furniture).
When did “greed” flip from being the dynamo (biologically driven self-interest) that powers the hidden hand of free market magic into being the villain that is now decimating the distributive fabric of middle-class democracies?Is this “role flipping” a cyclical technological-trajectory driven phenomenon or just the latest fractal replay in a historically universal social oligarchic food fight or is it an organic intertwining of both?I put my money on “an organic intertwining of both” an intertwining which is now being exponentially amplified by our transition into the accelerated social/economic interdependencies inherent in a ubiquitous network-effect social/economic substrate.If that organic intertwining of social/technical evolution is true, we need to fundamental reframe the whole debate around the constraints that near-instantanious organic social/economic interdependencies place on social/economic organizational-structues/values integration. Social/economic/technology interdependency integration is no longer optional under network-effect conditions. Technology is now forcing our hand!This poses a daunting species-wide challenge because it implies the requirement for some sort of collective borg-like survival-strategy mechanisms. Survival-strategy mechanisms that are not inherently part of a our “survival of the fittest” evolutionary trajectory/pathology.Technology is now dragging us kicking and screaming into an organic domain where “WIN WIN” is no longer a nicety but a collective survival strategic necessity. This is a economic-organization phase change not well supported by our evolutionary substrate.Being that such collective-survival mechanics are not onboard as a low level substrate the only work around available to us is the construction of a collective-cognitive-introspection mechanism to bypass this evolutionary bottleneck.Further evolutionary progress now requires us to collective grow up and take self-referencal receipt/responsibility of our own meta-evolutionary trajectory.I see no movement afoot to collectively debate/coalesce a set of narratives, metaphors and language (Organic Process Literacy) by which to frame our new world of social/economic organic interdependencies.Just as we could not move forward in the world of physical engineering without replacing the language of alchemy with the language of atomic-table valences, we will not be able to master the challenges of organically organized social/economic structures without developing new narrative, metaphor and language (Memes) that effectively map the key features/dynamics of our new organic social-structure dependencies. Language is pivotal to complex team work.Back to reality !Even if GOD dropped the ultimately effective (Organic Process Literacy) tools (Memes) into the minds of everyone on the planet we would still be skewed.Why, because we have not even mastered the most basic prerequisites required for world citizens to participate in a social fabric of collective WIN-WIN organic interdependencies.We have not even managed to universally populate the bottom rungs ofMASLOW’S HIERARCHY OF NEEDS<img src=”http://ichef.bbci.co.uk/ima…”>This leaves most of the planet unable to come to the organic interdependencies party !Looks like we have reached our evolutionary hull-speed limit :-(IN SHORT – WHAT CHARLIE SAID
.Even the quality products are being produced overseas.It is the cheap labor.No, this was all greed and it took checks to Congressman to change the laws to make it happen.Greed. Missionary position greed.JLMwww.themusingsofthebigredca…
Has nothing to do with law school loans it has to do with legacy thinking and how lawyers as a group think and restrict their trade. If you were right it wouldn’t explain how much money lawyers even made back when school wasn’t that expensive (like when I was growing up).As far as doctors that is based in part on a restriction of supply based on training and residency positions (as my wife points out). You can’t simply educate more doctors there have to be residency positions for them. And there are only so many of them. (My wife teaches at her job as well as practices..)That said law (in part at least) is a tax on society so it’s good that it’s expensive and hard to pay for a lawyer that is not on contingency.
Matt, I appreciate the amazing thread your comments triggered here and agree with much you say except the explanation about why doctors and lawyers ave to charge so much. Yes, the new kids coming out of college have huge loans to pay but for most of the medical industrial complex as I’ve come to call them all, it is a money grab pure and simple. For themselves and or their stockholders it is greed backed up by favorable laws and loopholes. It is shameful. While I did not vote for Obama, I am so grateful to him now for his courage and strength to push his care plan through. It is a beginning to the end of the medical industrial complex.
Well debt is definitely stated reason, but certainly not the full reason. A doctor may pay back $400k in loans (priniple and interest) but then makes over $6-15 million (30 year career 200-500k a year). Definitely i support working on how to better pay for medical training but if they made 100k a year, a very fair salary for doctors if they had no debt with such high job security they may earn say $3-5 million in working career. You aren’t the only one to make the debt point, so I don’t mean to be hostile to you or it, but clearly the extra $3-10 million they make is way more than the 400k they pay in debt. We can quible on the numbers a bit, but they are an order of magnitude (10x as demonstrated ) different. In regards to law, basically do away with law school as mandatory, just pass the bar. Go to apprenticeshi pmodel. Very simple and intellectually compelling solution. Also know won’t happen for many years (decades) because of power of encumbent lawyers. Medicine is different and while i still favor a modified apprenticeship model, the stakes are higher than law so some mandated existing training vs a more free market approach is needed. Could talk for years on these topics! The real thing is the problem is the power of existing incumbents… which willl take a long time to change
While I’m inclined to side with you and Charlie in this beef, when you model the system dynamics you end up with a feedback loops for consumers and investors. Y’all could have bought American right up until the point that you couldn’t.
The cheap shit is what gave the Chinese the ability to offer quality products by perfecting their manufacturing methods and training their workforce.Tim Cook is correct. We don’t have a workforce to sit and do the manual part of making iphones in the US not going to happen. Nobody can work in that regimented fashion they are to spoiled.When I was growing up (and for sure you remember this) I remember my Dad exclaiming “made in Japan” as a pejorative. Then Japan became good and he hated stuff made in Taiwan. Then it was he would avoid the chinese products as shit. [1]That said how do you compete with some of these countries that are pulling people off the rice fields? And when that country gets more of an economy you go to the next country and pull people off their rice fields?[1] I remember him going to a store at one point to buy a TV and checking the box to make sure he had the Sony made in Japan as opposed to the Sony made in Taiwan (I think). Then it was Taiwan box over China box. By the time he passed away he thought highly of Chinese manufacturing.
well said. “quest to ignore details”, so true – ignorance is bliss. Imagine how many people would be vegetarians (or “free range” only) if they ever visited a meat processing plant, for example.
It is a poor manager who blames his workers.In 1984, the GM auto plant in the Bay Area was the worst performing plant in GM’s system. They entered into an agreement to share the plant with Toyata and let Toyata use their management system. It went from the worst performing to the best performing within 6 months. They did this with the same workforce!. GM management was so incompetent they couldn’t put what they learned into practice elsewhere. You can listen to This American LIfe’s episode about it here.
It is a poor manager who blames his workers.Oh yeah right. You have a union workforce and it’s trivial and entirely possible to get it to turn around and do a great job. This reminds me of when I hear about a super teacher somewhere who manages to get results in a previously incorrigible school. (They have those on 60 Minutes and NPR as ‘the solutions’) I am still waiting for that type of obvious solution to be able to work everywhere. If it’s that simple it would be that simple. The other week 60 Minutes had a report on how great the German prison system is and why it’s what we should be doing here “the solution”.
Yeah people are all over the map on this stuff for sure. I am not a big meat eater at all but I do eat some meat. And I have no problem plunging a lobster into a hot pot of boiling water (no steam for me) and then eating it. Haven’t don’t it lately though. My sister is a vegetarian as is my sister in law. I have no problem that people are vegetarians but it always seems like an ideology and religion in the sense that they will not touch anything that is a meat product or even close. Like being kosher. They wouldn’t eat the chicken soup at Passover for example (even w/o chicken). That’s extreme to me. So we had to make them up special meals that they could eat. That’s the religion part. Imagine if I went to someone’s home and said “I only eat lobster not fish and not meat”. They would laugh and never accommodate me. You know why? It’s not a religion like vegan apparently is. Anything that is religion has extra get out of jail cards in life. Vegan has religious social proof. A key to getting legitimacy. (Same reason you can’t start a religion or new sports league today and be taken seriously..)
And here I thought management got paid high salaries because they are the few who are good at doing a difficult job.
Wait until Germany, the astounding German culture of working both smart and hard with astounding quality, the German cities, and the German prisons are loaded up with the current crop of Mideast medieval nasty wackos!Slavery and slave labor are horrible ideas, for both the slaves and also the slavers.
I love steak and burgers, but that’s because I’ve never actually had to kill a defenseless animal, skin it and gut it. I hope I never have to, because they sure are tasty! I have a hard enough time cleaning a fish.
I’m a lurker here and not a vegetarian, but I did try it for a while and think everyone should. You equate vegetarians (you mix vegetarian and vegan which are quite different) with religion. Religion doesn’t have the facts to back it up that vegetarianism does, if your particular belief system is that eating animals hurts animals. The facts are pretty clear on that, pain is felt, regardless if you are a lobster or a goat. @TeddyBeingTeddy – An Oscar nominated short called The Reaper https://vimeo.com/116840017 simply followed a slaughterhouse worker in Mexico as he routinely kills about 75 cows per day and had doing so for 20 years. The terror in these cows faces would be enough to resign anyone off meat for a lifetime. @LE The reason people would laugh at you if you came to dinner and made that statement above is because you would be a hypocrite.
I remember harvesting my first deer when I was 15. The experience gave me a profound respect for where food comes from. This is probably the opposite type of feeling I’d have at a processing plant.Even at that young of an age, the realization hits you – that animal was a living, breathing being just seconds before. It’s a indescribable feeling when it hits – part sadness, joy, accomplishment, etc.That same sense of respect is also why many of the landowners I know (many of them large landowners) also happen to be some of the staunchest environmentalists, despite the fact almost all lean to the right politically.
.Shot this deer at 300 yards. My hunting season lasted about 5 minutes that year. That’s a Sako rifle from 1938.That deer (and a few others) turned into some nice venison tenderloins and a lot of sausage (bit of pork, beef, and tons of spices).I’m the guy in the VMI sweatshirt. The guy field dressing the deer is the winningest high school football coach in history of the Commonwealth of Virginia.Hunting is both fun and tasty.Of course, this is Texas.JLMwww.themusingsofthebigredca…
.JLM, who I know fairly well, IS a liberal. Sometimes.Hell, the guy got a free freakin’ education Bernie Sanders style. Went to undergrad and grad schools on the gov’t’s dime.Sure there were a few years in harm’s way in return but he would have done that shit for free anyway.These titles mean nothing.A good idea doesn’t need a political endorsement. It is still a good idea.A bad idea will not fail to stink because Ted Cruz says, “Hey, that’s a genuine conservative idea.”BTW, I turned Ted down. I was his first choice for Sec of Offense.JLM (liberal, conservative, sometimes)www.themusingsofthebigredca…
You got me for a second with the JayZ LM there. I was confused. Who is “Jay L M”? Anyway, I kind of care more about what is happening here than I do “over there”. I am selfish like that!That said I would help you or anyone any day if I had to (as I have actually). In that way I am not selfish.
Watch the 60 Minutes on German prisons if you haven’t done so. To me it’s absurd (although they claim it works at least with the people that live in their country which is not the same as the people who live in this country).
.Andrew –You should have told him, “Yeah, I know who you are. Do you know who I am? I’m the guy who has been shorting the fuck out of your stock. Nice job. Keep it up.”Then again, maybe not.BTW, a stock cannot be down 300%.JLMwww.themusingsofthebigredca…
A well equipped lab or garage are perfect places to spend week days if you ask me, solving little problems and fixing things and yes, dreaming about the solutions and better places to be. What may be boring are repetitive tasks that never change, but even there there is something good, in the rhythms and repetition and getting better at it.Hiding Ferraris and Porsches in the crappiest spots HAS to be fun!
> venison tenderloinsEager to do that, as soon as my business is in good enough shape.You use a sauce in part from black current jelly?
I have always wondered about who killed Bambi’s mother. Now I know it was you. This is sad. You are a bloody Texan, Sir.
congrats, you slaughtered a defenseless animal. must feel proud. But at least you were the one that killed and cleaned it. most of us don’t have it in us to actually do that part before eating a pile of burning flesh like that.
.Cut them real thin and pan fry or grill them. Salt and pepper only.JLMwww.themusingsofthebigredca…
What did you think of Hail Mary Fiorina?
> A bad idea will not fail to stink because Ted Cruz says, “Hey, that’s a genuine conservative idea.”That was one place I really quit listening to him. That he was dumb, nasty, and arrogant enough to push that nonsense was scary. So, he’sUntrusTEDEliminaTEDGood to send him back to Texas, and maybe Texas will send him back to Canada, Cuba, someplace.The election is showing that the fraction of people really just sick-o between their ears, at least who want to run for POTUS, is really scary.
.I cannot bear to listen to Ted Cruz’s voice and she is as grating on my ear as he is.If I were hiring a President, I would want an inexperienced, low mileage, no executive experience Senator to be balanced by an experienced person — much like Obama did with Biden.So, I really can’t take him seriously. Hell, she lost herself and said some really mean stuff about him.Reagan did the same thing in 1976 and it did not work then.I suspect, after a good ass whipping in Indiana, he will name his entire cabinet plus his first two Supreme Court appointees. It is all a little delusional and he seems to be looking a little removed from reality.What he and Kasich did, an act of true desperation, has only made Trump’s meme more embraceable. I would love to have heard the convo. What were they thinking?Trump is lucky to have such a knucklehead as Cruz as his opponent. The numbers are now just overwhelming.I actually sort of want there to be a contested convention so the Republicans can burn the freakin’ house down. But, I think Trump walks in with 1237. Trump is pretty damn shrewd. He has stuck with it. Grit.JLMwww.themusingsofthebigredca…
Trump is lucky to have such a knucklehead as Cruz as his opponent. The numbers are now just overwhelming.Well anytime anyone wins anything it’s always because the next in line sucks more (sports, best movie and so on). It’s always relative to the other players, eh?Trump is pretty damn shrewd.Well I called that as you know. But then again I have an unfair advantage of more intel than anyone else who must just be listening to the rhetoric. [1] I have been following the guy (in one form or another) since the late 70’s so I have seat of the pants context for how he operates and how he thinks. As someone who negotiates quite a bit (and earns some money being paid to do so) I know the creative off the wall process and thinking and can appreciate the nuance.That said it doesn’t mean he will beat Hillary. But he has definitely beat all of the critics, pundits, media and intellectuals who were to stupid to understand the game he plays.[1] Or more importantly blinded and turned off by the red herring of his words.
.I think Hillary is going to come apart at the seams. She gets the nomination and then the real fun begins. It is hard to believe she can stand up to any real scrutiny.The public is more finely attuned to corruption than ever before. It is a huge issue. It is a Trump winning issue.Lots of folks fail to remember that Bill Clinton became President on the strength of Ross Perot’s 18% of the vote in 1992 and 8% in 1996.Clinton’s popularity is a myth. He was never ballot box boffo. Ross Perot put him in the White House.It is hard to believe she does better than him. She has also lurched further to the left than Obama, by a long shot. I don’t know she can get back to where she needs to be.I think a Trump nomination puts California and NY into play and if he is smart and puts Kasich on the ticket (thereby taking Ohio), then even if he doesn’t really have a chance to win California/NY, the Dems have to spend money and a lot of it to forestall that initiative.None of what has happened thus far amounts to anything once the race begins after Labor Day. Trump is good on the stump and she is not.Neither of them are well served by the camera which was a huge Obama advantage. She cannot resurrect the Obama youth movement.I also think she spends her entire campaign on the defensive whether she likes it or not. She might actually get indicted, who knows?JLMwww.themusingsofthebigredca…
.Well, that makes two of us.I’m not only poorly educated, I’m ill-informed, brain dead, a sinner, and I can’t remember the other ones.JLMwww.themusingsofthebigredca…
Bubba is looking totally doddering. Like an (yiddish here) “altah cockah” (old dude) . God does he look bad and like a dull boy. He might be suffering some big medical problem that is being kept under wraps.HRC is like a b movie actor playing a woman Presidential candidate. Her “win” speech for the wins the other day was like b movie politician. She is so dull and predictable. Nothing creative going on there.What’s amazing is that with all of her brains, consultants and money she can’t master and change the way she sounds in front of a crowd to sound less canned.HRC though is a good technician. A good clinician. I will give her that.Trump deserves to win just because of the odds he has faced and the adversity he has overcome to get to where he is. Can’t think of anyone else that can survive a barrage like that at 68 years old. Love the fact that he is unpredictable and the foreign leaders buy the act.When I was a kid I had a friend. He used to say “you have to be the crazy driver that others look out for”.
.She is a good technician in a 20 year old campaign. She does not have the GOTV operation or the data mining operation that Obama had.She cannot get the young folk excited. They are all with Bernie.Haha, the 74 year old guy gets the young folk? Haha. Rich.She has her zealots who will never leave her but they are not 51% of the electorate and she cannot inspire people. Tired, predictable, mean, old.JLMwww.themusingsofthebigredca…
> I am always amazed that we Americans didn’t perfect it.The name is W. Edwards Deming. That’s where the Japanese got it. There are lots of other US names, e.g., Abraham Wald and sequential testing. That can be regarded as a special case of discrete time stochastic optimal control, that is, stochastic dynamic programming, by, right, Richard Bellman, R.T. Rockafellar, and more.E.g., want to give an expensive blood test to each of 1000 soldiers. Sooooooo, draw all the blood, mix it all together, and test that, just once. If find nothing wrong, then saved 999 expensive tests. If do find something wrong, then divide the 1000 into subgroups and test again. So, what is the optimal way to do this? What Wald did answers that. IIRC this was applied by the US Army in WWII.On something like that applied math, the US has long, and really still does, mostly totally blow away all the rest of the world. That is a great advantage we do have.The remark at the beginning of the movie on John Nash that “mathematics won WWII” is basically correct. It can still win for the US.
My point is, no prison system will be seen to work with the people coming from the Mideast. They are coming from a Medieval society and can’t leap forward 500+ years.To have survived in the desert, they can’t be fundamentally stupid or weak, but their culture is totally sick-o.
At the core it’s religious brainwashing. We have it here as well and it results in a different type (and less severe) type of over the top behavior which I find objectionable in many ways. It’s a way to control people for the benefit of those that are in control.
.Bucks (boys) have horns. Does (girls) do not.Bambi’s momma is a doe. That is a buck.Ergo, I did not shoot Bambi’s momma, though I gladly would in order to balance out the herd and to make a lot of sausage.I would shoot Bambi if she was in the line of fire.I did not get a drop of blood on me as I didn’t even field dress that little buck. I had Mario, the sausage maker, do it. The ranch is only 20 miles from town so I just shoot and scoot thereby saving myself a lot of work.I am notoriously lazy.JLMwww.themusingsofthebigredca…
Right, but in the Mideast, much worse.W said that Islam was a “peaceful religion” or some such. Well, it is neither peaceful nor just a religion.Some of just how hostile and violent much of Islam is directly from the Qu’ran is inhttp://www.breitbart.com/na…In simple terms, when a Muslim meets you, it is his obligation to convert you to his version of Islam or regard you as an infidel and kill you. Literally true, and by ISIS and some others actually attempted in practice.And Islam is not just a religion but runs essentially everything in its countries — social norms, dress, food, marriage, sex roles, architecture, education, law, government, foreign policy, and religion. And the head of state is to be a religious leader. And Islam is really good at keeping out any outside influences and any internal changes. Except for oil, the Mideast countries would be just very sparsely populated by nomadic tribes with tents, flocks, and camels fighting each other over water, women, sheep, or some such.
Not guilty. Relief. Thought about the horns but it was too late, I kind of expected a proper JLM reply. My brother and I had a fair amount of emotional stress every time we heard Bambi on a record player, vintage vinyl of course, so now it should be cool.
.You know, a lot of life is purely environmental. Some stuff you do because of how you were raised and where. Never occurs to do otherwise.I have been around weapons all my life and I am the most fastidious person in the world when it comes to handling them. I get mad at people who cross a fence with a loaded weapon.I am a catch and release fisherman except for whatever I am going to eat that very day. I do make some smoked striped bass spread sometimes but otherwise I am quite the little conservator.I used to give my son a hank of venison sausage and a chunk of rat cheese to go to the football games because the junk they sell there is so damn expensive.It became quite fashionable.JLMwww.themusingsofthebigredca…
Agree. Maybe “less severe” wasn’t a severe enough way of putting it.Anyway, maybe we can invade and attack them with our big american breasts [1] and our wallets.[1] SNL: http://snltranscripts.jt.or…
The reason people would laugh at you if you came to dinner and made that statement above is because you would be a hypocrite.How so?
Only in the context of the vegetarian argument would you be. In reading back the situation you posed, not a hypocrite. I recant that statement.
Yes I know, my dad had firearms at home. My grandmother, his mother in law, made him promise he would never teach us how to use them and he kept his promise, he lend us his air rifle. I recall my first hunting experience was with that rifle and it is a very bad memory, I think I don’t have the guts needed to kill animals and I can’t preach against it because I am not a vegetarian.
.Our markings, when made young, are not our decisions. I used to go with my father to the rifle range when I was about 10 years old and stand in a concrete bunker and fire away for hours at a time.When I went to VMI I could disassemble and reassemble an M1 blindfolded which got me a lot of pushups.I embarrassed a lot of upperclassmen who made me do a lot of pushups.JLMwww.themusingsofthebigredca…
.Fair play to you, Teddy.I did go hand-to-hand with some radishes the other day. Put up quite a fight. I finally was able to kill them.Lots of the food supply goes under the “defenseless” label. High in protein, but, essentially, defenseless.I suspect we may have some daylight between our view on this stuff. Just guessing.JLMwww.themusingsofthebigredca…
I’m actually a carnivore too, not proud of it…Which makes me worse because at least you have the stomach to kill/clean/earn it… I respect that you don’t just use them for cabin trophies; that’s the difference between lions and cowards.