Andrew Yang’s math on the robot takeover doesn’t check out
bloomberg.com
bloomberg.com
Our issues have everything to do with boardroom and executive policy and profit maximalism.
What bodes well for South Korea and Germany are their social and corporate welfare systems which are a completely different cultural makeup than ours.
Also, manufacturing as a whole HAS improved throughput over the decades, just with less humans:
https://qz.com/1269172/the-epic-mistake-about-manufacturing-...
https://www.vox.com/new-money/2016/10/10/12933426/27-charts-...
The Federal Reserve Bank of St. Louis' chart seems at odds with the chart from the Bureau of Labor and Statistics.
I'd like to see more journalism with less cherry picking and more delivery of a whole picture.
no one is claiming that this is his platform though.
1. He claims “Prime age” (25-54) participation is at an all time high. It is, but overall labor force participation is at a 40 year low.
2. Median income has risen in the past 4 years than at an point since the 90s. This is such a cherry picked stat, I don’t even... How about this, real wage growth has barely moved since the 70s (source: https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...)
3. Companies that invest in IT experienced hiring growth. Sure, but we’re talking about the entire labor supply not individual company success. Success at one company often comes at the expense of failure at another (a competitor who is made irrelevant, etc).
4. Productivity gains. This is getting insanely hard to measure, as others have pointed out, but it also seems to be a straight lie. Productivity has increased since 2010, so I can’t make out what he’s saying there. Also, why narrow the timeline to 2010? Brief periods of stagnation often occur within larger trends. Like productivity.
This is just another “head in the sand” think piece, by someone who is part of a group of people that are desperate to convince everyone that this economy is actually working fine. Well the labor market hasn’t really recovered since the last recession, so this wish fulfillment is just wrong.
Manufacturing increased productivity and profit over the last decade while employing net fewer people. That is the first time in human history that that has ever happened. We need to take it very seriously.
"Prime age participation" seems like what you would want to measure if you're trying to assess whether the robots are taking our jobs
When opportunities are abundant, people are generous; when opportunities become scare, people are selfish.
The answer was that computers allowed new models that weren't measured by the stats. Just as much labor was done but now you'd have a few people running the numbers on a financial deal when before it was slower and more shoot-from-the-hip.
Consider the robots at Amazon warehouses: they are reducing the labor component, but amazon is growing so much that their hiring is growing as well, though not as rapidly as it would have without the robots...or do the robots mean they can open more sites? Who knows?
Plus the robots are leading to more workplace injuries but nobody is tracking that statistical correlation yet; the reportage is just starting to appear.
The numbers will be visible once it's obvious to everyone that a phase change has occurred.
The first can be estimated in various ways (revenue per worker, costs per worker, packages shipped per worker, etc) but the second is not estimable. The example I like to use is the advent of the automobile. I'm sure there were a lot of horse-and-buggy drivers or train operators that were decrying the disastrous unemployment it would cause, but the automobile industry now employs more people than that industry ever did, not to mention the new industries it has enabled such as long-haul trucking, taxis, private postal couriers, ride-sharing, logistics, etc. On top of that the automobile industry enables new productivity gains in hundreds of not-directly-related industries such as sales, food service, plumbing, medicine, and so forth.
The average American owns more than one vehicle. They're an affordable, quick way to do things like work more than a couple miles from your home, haul goods, or take a vacation. If the horse-and-buggy operators had got their way we'd have deprived ourselves of many of the luxuries we enjoy today.
Where the advent of the automobile brought about a labor market for machine operators (taxi drivers, combine driver, etc.), what happens when the machines automate themselves.
Or the bar to acquire the technical skills of an operator (ML engineer) is so high and move too fast coupled with institutions reacting far too slow to adopt policy aiding the unemployed in high skill acquisition.
The more we pursue new technologies boldly without fear of the consequences the more power we give to the common man to get things done that would've previously been impossible to him.
Perhaps AI algorithms are just getting started, and in the coming years they will automate health care, education, retail and other industries the way machine tools once automated the assembly line. If that happens, either humans will have to find new things to do that can’t be easily automated -- for example, creative jobs -- or something like Yang’s basic income proposal will indeed become necessary.
Isn't it obvious this is happening right now and increasing? The articles uses words like "Perhaps" and "If that happens" as if this is some science fiction. This isn't some possible far future, it's currently in progress right now. Self driving trucks are already being tested on the roads. And so much more is coming in other industries.
For example in the physical realm, working an assembly line is mind-numbing, and relatively unfulfilling. A robotic arm can take over.
And now in the cognitive realm, sticking to a strict call center script or taking orders at a fast food restaurant is equally uninteresting, and if speech to text + a decision tree can do that, then that's good.
As long as we don't leave people behind, removing in-human jobs is imo a net good.
It is a very credible threat facing Radiology residents at the moment.
Here's where I think just about everyone is not seeing the full picture. You have all of the major tech companies and many universities and enthusiasts in a global race to create AI that has better abstraction abilities and understands the world better. We don't need to get to something that is exactly like a digital person in order to approach many of the highest level jobs. ML can already automatically create world models. We just need them to be more compositional and accurate. And yet everyone is acting as if this AI race is guaranteed to just sputter out.
The only way this is really about retail workers and truckers is if Bengio, Hinton, LeCun, Deep Mind, Tencent, Baidu, Google, Facebook, Open AI, Amazon, Nnaisence, many other companies, John Carmack, and thousands of independent geniuses all fail. It certainly is possible. But take a look at the papers coming out where they are hammering away at creating better disentangled models and such.
There is no way to predict the future but I think that people are a little too comfortable.
Basic income and the other radical ideas are going to be relevant for everyone. Everyone.
> But the most important piece of data against Yang’s thesis is slow productivity growth. If companies are adding robots, AI algorithms or other automation to their production processes, it should show up as accelerating productivity. But labor productivity growth has slowed to a crawl since 2010...
The article presents a graph going back to 1980 in which productivity spikes as high as 4% but hasn't broken that level since 2010.
Two points:
1. Productivity, as measured by the government, could be a lagging indicator, as Yang notes and the article doesn't address.
2. Productivity growth (as seen in the chart) spikes after recessions. This could be because underperformers get fired during recessions. There hasn't been a recession since 2009. No recession means no pressure to cull the workforce.
Are there any forward-looking measurements of productivity?
We would expect investment to track productivity growth, and it apparently does, which suggests productivity growth is trending down, rather than simply being hidden or lagging.
I'd be wary of any discussion of buybacks that didn't mention that the price of money has been kept artificially low for a long time now.
Maybe there's just so much free cash that companies can keep investing normally while also doing buybacks. But few people would deny that America has a serious infrastructure problem, both in maintaining our existing infrastructure, and failing to meet demands for new infrastructure. So there are plenty of investment opportunities--to the extent public infrastructure could maintain and boost productivity--and nobody is disputing that these opportunities aren't being pursued. The question is, how do we direct that cash to fund those capital improvements?
The old argument was that share buybacks returned money to shareholders, who are better capable, writ large, of discovering new investment opportunities. But they're not. All we're seeing are more buybacks and more cash accumulation. Investors aren't investing, they're just cashing out, which because there has been so much cash floating around[1] has become a persistent trend rather than cyclical.
[1] IMO more because of global industrialization, not because of injection of dollars by the Fed. Reduced capital investment is a global trend. Because of the structural position of the U.S. in the global economy, much of that cash is funneled to the U.S., at least for the time being.
https://www.nytimes.com/2019/11/14/opinion/andrew-yang-jobs....
We've been living in a society built around the 1920-1940s when we passed universal high school and labor union laws, setting up a scenario where companies needed human labor in factories and human workers could be compensated well as their companies succeeded.
If technology advances again it only makes sense that we would need to update the social contracts as well, as we have always done.
I would add to that a corporate shareholder governance model that takes all the externalities into account like labor and environment instead of primarily profit and public perception.
While we're at it, update our model for GDP to include softer concepts like mental and physical well being / education / etc.
If your metric is money, you become money.
Can’t say I’m a huge fan of that, since UBI often gets touted as a “help the poorest” thing.
EDIT: looks like Yang's position on the stuff below changed. His website used to say it wouldn't stack with anything, now it says it stacks with some things, which makes more sense. I'm till not completely convinced though, since the combination of programs that it doesn't stack with can easily exceed the $1000/mo limit that make it regressive again. But there's a complicated analysis there that I'm not qualified to make.
The number of people receiving disability has increased 5x since 1970: https://www.ssa.gov/policy/docs/statcomps/di_asr/2016/sect01...
In effect disability ends up being a basic income for former auto workers laid off, which is not what it was intended for.
Those on benefits are fearful of losing their benefits for appearing too "able-bodied" and those who legitimately need assistance have to go through appeals proving their disability.
One could imagine a better system of UBI for all + additional disability, for those who genuinely are unable to work.
Even some people who receive more than $1,000 a month in SSI would choose to take the Freedom Dividend because it has no preconditions. Basic income removes these requirements and guarantees an income, regardless of other factors." https://www.yang2020.com/what-is-freedom-dividend-faq/
So it looks like they softened this position at some point? But yeah, that's a much better position than the old one.
That said, the pricing curve doesn't ignore tax, and if the company has to pay tax, then the price will go up, but sometimes not at all because the pricing curve still means passing on all the costs mean lower demand.
It depends on the elasticity of demand. Which is why a "flat tax without exception" has downsides. Inelastic demand allows companies to push more/all costs to customer without impacting the pricing curve.
1. Means Tested Transfer of $1k per month to those with 0 income, phased out progressively by 20 cents per dollar of income. Funded by a progressive income tax: 20% of incomes above $60k.
2. Universal Basic Income: $1k per month to all, funded by 20% flat tax on all income.
Which is better? (Answer: they're the same). It's just that choice 2 gives and takes income from all at different times, but the political benefits are enormous. Universal programs are much more resistant to being slashed like the current TANF and SNAP programs.
https://taxfoundation.org/universal-basic-income-ubi-means-t...
The problem comes with the loopholes - cap gains, real estate taxes. Do those fall under flat tax?
Depends on implementation I suppose. The example given is just a simple illustration that a regressive looking and progressive looking scheme could have the same payouts in theory, they just seem different on the surface.
> if I'm paying for a 20% flat tax, I couldn't be persuaded by future demagogue that my measly $1k/mo isn't worth it if I'm say, paying more in taxes than the $12k annual?
If you can afford to spend $120k a year on luxury consumables (assuming 100% VAT passthrough) then you're probably savvy enough to figure that out without the demagogue. But there aren't a lot of people with that kind of money.
Historically universal programs fare better, Alaska is one example.
And yes, in Europe and other places where VAT is used the cost ends up being passed-along to consumers.
The other thing that concerns me is the mathematics of paying for UBI with this VAT: US consumer spending is at about $40 trillion annually. [1] That means the VAT raised would be approximately $4 trillion.
$4 trillion divided by $12,000 per individual pays for about 333 million people. While that is approximately the population of the US I'm afraid Mr. Yang has forgotten one of the most basic principles of economics: When you tax some behavior you get less of it. I'm afraid consumer spending will drop sharply if his tax plan is implemented, resulting in shortfalls of tax revenue for UBI. A sharp drop in consumer spending would also result in job losses and an economic slowdown that may harm the economy of the US more than any benefit gained from UBI. I'm also afraid that the cost to administer and distribute UBI will be huge and has not been accounted for by these numbers.
[1] https://tradingeconomics.com/united-states/consumer-spending
Low income household: Income: $30K Spending on taxable goods: $10K VAT Paid: $1K UBI Received: $12K Total Paid: $ -11K (-37% of income)
Higher Income Household: Income: $120K Spending on taxable goods: $70K VAT Paid: $7K UBI Received: $12K Total Paid: $ -3K (-2.5% of income)
Very high income household: Income: $300K Spending on taxable goods: $150K VAT Paid: $15K UBI Received: $12K Total Paid: $3K (1% of income)
Lower income people (who spend less by necessity) end up profiting very nicely relative to their income. The rich, i.e. anyone who spends more than $120K on taxable goods, however, would end up spending more than they receive, and are actually the only people funding the UBI.
EDIT: looks like Yang's position on the stuff below changed. His website used to say it wouldn't stack with anything, now it says it stacks with some things, which makes more sense. I'm till not completely convinced though, since the combination of programs that it doesn't stack with can easily exceed the $1000/mo limit that make it regressive again. But there's a complicated analysis there that I'm not qualified to make.
Disability is one thing (I think that it should stack with disability), but let's not look at the existing welfare system with overly-rosy lenses:
* TANF has been repeatedly cut back and now only 23% of households in poverty are receiving benefits. (universal programs like UBI are more resistant to cuts like this)
* Depending on your state, SNAP and TANF together still don't even get your family to the poverty line
* There are reporting requirements and other administrative hoops to jump through, aid is meant to be "temporary"
https://www.cbpp.org/research/family-income-support/more-sta...
A UBI benefits way more people, and a VAT would end up falling more on the rich (even assuming 100% passthrough (in Europe it's ~50%) you'd have to spend more than $12k a month to offset the UBI).
This is true, but if you subsidize some behavior, you also get more of it. And giving people $1000/month would certainly encourage consumer spending. It's not so simple as you are making it out to be: you're ignoring spillover benefits like an increase in entrepreneurial ventures that would create new jobs, as well as an increase in worker productivity that comes with better well-being as a result of UBI.
Also, I'm of the belief that the VAT will become more valuable (in the sense of tax $ earned) over time, as margins will certainly increase as automation becomes more widespread - and VAT is a tax only on the margin that consumer goods producers earn.
I'm immediately suspicious of anybody proposing a VAT. Everything I've heard and read from Europeans is that the VAT system is quite complex. AFAIU, VAT evasion is a serious problem in Europe. The grey market in otherwise legal goods and services is orders of magnitude larger in Europe than in the U.S., and as far as I can tell part of that can be attributable to the complexity of VAT. The other part is the prevalence of organized crime in Europe, but the complexity of VAT in terms of both accounting and enforcement would seem to promote organized evasion.
The other problem is that VAT is regressive. You can mitigate that with exceptions on certain consumer goods and services, but that adds complexity. You can also provide direct transfer payments to offset the tax, but "welfare" payments are too politically contentious in the U.S. There's little reason to believe they can be enacted or sustained at an adequate level to realize the potential of a VAT. Ultimately I think it'd simply contribute to increased wealth inequality and cynical, nihilist anti-government sentiment.
A VAT like anything can be complicated but does not have to be -- it depends on the implementation. Many countries have figured it out without (many of) the downsides you mentioned. I'm from a country with a GST and it's mostly transparent.
Criticisms of a VAT can be found here [1] and they mirror your arguments, but they also provide additional context to guide one's judgment. If read carefully, it's clear the outcomes are varied and dependent on implementation, and does not uniformly result in ill-effects as many would initially suspect. It's actually a tried and true idea -- otherwise countries would be falling over themselves trying to repeal theirs.
[1] https://en.wikipedia.org/wiki/Value-added_tax#Criticisms
"Neoliberal" has become an epithet in this country precisely because textbook economic theory hasn't played out as well as expected here. Part of it is because the theory was too simplistic at scale, and part of it is because its application in the U.S. is difficult and often impossible--the U.S. has significant political and social problems and attitudes that impede the application of certain kinds of policies. Part of it is that it has worked well, but some policies make for an easier scapegoat than others. Obamacare is again instructive. Nobody doubts, nor is anybody even surprised, that Obamacare needs reform. It was designed with processes to systematize ongoing reform. (One aspect of which was spun as "death panels".) But because of its politicization and our extreme political polarity, constructive, incremental reform has become impossible. Instead we teeter between radical rejection and paralysis.
We've become a nation obsessed with radical reform precisely because we're incapable of faithful, consistent application of social policy generally. Technology (VAT is a social technology) won't save us. Our problems are deeper.
That said, I think it's a move in the right direction based on my experience with it in the countries I've lived in. It will definitely raise positive revenue (this is incontrovertible -- whether it raises enough revenue is another issue). My intuition tells me a VAT will likely not be a merely lateral move but of course I have no proof. Theoretical analyses on a complex system are often unconvincing, so I won't advance those.
What I find compelling though--and I offer this not to convince you or others, but merely something I personally find reasonably persuasive--is that unlike mere economic theory, the VAT idea is actually a live experiment running in 166 countries right now, with different parameters. One may argue that none of those experiments have scales that match the gargantuan size of the U.S. economy, and that many of them are encumbered with different issues like complexity, but nonetheless many of those experiments have actually been fairly successful over a long period of time.
I guess I'll make the modest suggestion that a VAT is at the very least not a crackpot idea and worth thinking about. Whether or not it will work in the U.S. isn't something we can definitively know without actually running the experiment.
One thing that's kind of good the US tax system is the tendency to produce large multinationals, since businesses here pay taxes on profits, it incentivizes them to keep growing, and now US companies dominate the world over. From a geopolitical perspective that's very valuable.
But it does lead to monopolies and abuse.
"Instead of sounding the alarm about robots, proponents of a basic income should use arguments that aren’t dependent on the threat of automation -- and there are many good ones."
On the macro level, automation's effects are uneven. At present, the gains from automation are likely incremental. I suspect the losses from automation however might be deeply felt by a segment of the population that most of us rarely interact with. An economist recently put it like this: "the gains are diffuse, the losses are concentrated".
Perhaps he's hanging on for long enough now to progress to the next Bernie style 16 negative stories in 16 hours[1] level.
[0]: https://www.lwv.org/newsroom/press-releases/league-refuses-h...
[1]: https://fair.org/home/washington-post-ran-16-negative-storie...
UBI is a solid idea that could be more easily realized in the US through expansions of the EITC and child credits.
EITC is what we got, it's means tested and has a work requirement. Take away the work requirement and we'd have a NIT like the one proposed by milton friedman in the 70s. And take away the means testing and we're at UBI.
Did he though?
Michael Bloomberg says he will not run for president in 2020
https://www.cbsnews.com/news/michael-bloomberg-2020-bloomber...
Of course he knew. Do you think he woke up one day, listened to some Bernie/Yang/Warren speech and decided he needs to run for president?
I saw a blue checkmark people saying just that in response to WaPo covering Warren's own staff releasing her law work with corporations. This Bloomberg stuff comes up constantly too.
idk how otherwise smart people buy into this stuff. It's a very naive view of how the world works and conspiracy theory tier stuff. Much like gov conspiracies hiding massive world changing information, newsrooms unquestioningly follow the orders of the chairman and the editors and staff all keep it super-secret (despite it being the biggest story of the year if it leaked, among people in the business of leaks), just to help one guy polling at 2% beat the other guy polling at 3%. Bias in newspapers is very different than direct interference.
Reporting costs money. If you can control the budget, then you can control which stories are prioritized and which aren't. If you own the paper, you can control the editorial section. Pretending that these tools can't be or aren't being used to influence the population is naive.
Fortunately that's not what we're talking about, at least not so broadly.
But saying the stories are artificial or plants directly from the Bloomberg campaign - basically saying "ignore anything to do with his competitors from Bloomberg News because it's obviously at the direction of the chairman". That's what I don't buy.
Another example which would be crossing a line is any reporters getting silenced or stories getting squashed.
Even worse is the idea there's a broader conspiracy to protect the 1% class that Bezos et al and all of the big newspaper teams are engaged in is an even bigger yawn.
If we're just talking about hiring people with a certain bias and budgeting then eh.. I really don't see the problem with that, which as you mentioned every paper or editor/management would be guilty of it. That's why we have more than one newspaper.
I'd rather judge each story on their individual merits, with the obvious consideration of the source being a factor.
Both are polling around 4% and are battling for 5th in polls.
Not that that would invalidate the article. Just feels funky.
Therefore, he only has to beat Yang (since he doesn't really care if he looses to a Biden candidacy; he joined the race when Biden seemed wobbly)
Trump was a Democrat for a lengthy period of time and the Republicans still nominated him. I think Bloomberg is betting that the party and its supporters will not build a coalition around a more left-leaning candidate (Sanders, Warren) and they desire a candidate who, at least for the intent and purpose of electability, can appear more moderate to attract the swing voters. He's also betting that Joe Biden's support will peter out as the campaign moves along - perhaps a gaffe to top all gaffes? - and Bloomberg will slowly vampirize Biden's base. At least, that's my hypothesis on his motivations.
I think the problem Bloomberg will find is that many who lean farther left will not settle for another moderate Democratic candidate who promises only to carry on the status quo (and of course, to defeat Trump). I think his likability and charisma (or lack thereof) will become hindrances to him as this election progresses (Joe Biden, for all his faults, is much more endearing and 'folksy' if you will). I can't imagine hardened Bernie supporters rallying around an old New York billionaire who has the gall to enter as late as he did and basically buy his way into electoral momentum.
Someone with much support, influence and popular appeal.
> I can't imagine hardened Bernie supporters rallying around an old New York billionaire
Me neither, but I also can't imagine them rallying around an uncharmismatic, non-mediagenic guy with primarily nerdy support and the same ideas as the rest, except for the unrealistic and probably "unamerican" UBI, to phrase it in the same style.
> the Republicans still nominated him
Democrats aren't Republicans, of course.
I think this is Yang's biggest fallacy. He assumes that growth and innovation will be "eternal exponential". That's a pretty huge assumption. Yes, it's been relatively true for 100 years, but that's a very small slice of human history. What if growth isn't exponential? What if the singularity is 1000 years away?
Moore's "Law" and exponential growth are taken as gospel, but there's no reason why it will continue this way forever. Too many people are thinking about the singularity and too few are thinking about an impending innovation stagnation.
Absent of a lot of critical coverage is Michael Bloomberg. Here [0] we have an article that simply reports on Bloomberg's apology for stop and frisk, but of course it's behind a paywall.
This isn't suspicious in the least. Right?
I am not a supporter of any of the above-mentioned candidates but I hope people see what is going on here.
[0] https://www.bloomberg.com/news/articles/2019-12-03/michael-b...
Having just had a taste of dystopian future injected straight into my veins, my irritability was at a peak, so I tried to quickly pass through behind someone else. Fuck it, I have my transfer I paid for anyway right?
A lady in the city's transit uniform instantly appears from behind the fare box and asks me what the hell I'm doing. I avoided trouble, but, well, I don't even know what to say really. It is just so absolutely bewildering and upsetting to have no human in uniform to go show my transfer to, but faster than I can snap my fingers does one appear to be the muscle.
Capitalist power structures will forever invent stupid shit for humans to do. The rich and powerful seem to prefer it this way, because whatever the hell it is for them that replace the simple joys of friends and family, is something that can only be appreciated when others can't have it. Diamonds.
I bet all power structures do that...
Regardless, any political commentary about any topic coming out of this organization is highly suspect and shouldn't really be linked to while Michael Bloomberg is in the race or in office.
We are clamoring for a problem that doesn't yet exist, ready to provide a solution that won't give people what they need the most: a feeling that they are a valuable part of society. It's pure arrogance to predict that people can't learn new trades, that there are people currently functioning in society who will one day be too dumb to be part of society.
It's not going to be easy to retrain the 3 million truck drivers, many of whom have high school diplomas and are age 60+ men, for one of the high-growth jobs of today (topped with software engineer, statistician, nurse practitioner). Especially considering that they're competing against 20-somethings.
And when I say it's not going to be easy I mean we haven't managed to do it so far.
By the numbers those who have lost their auto manufacturing jobs to automation have not been retrained very well. Half dropped out of the workforce, and of those the other half filed for disability (the number of disability beneficiaries has increased 5x since 1970).
Seriously, are we going to hold politicians to not distorting the facts now? Since when is that even a thing? No politician has ever been elected into a public office without lying. In fact presidential elections could be viewed as a competition for who lies the most convincingly.
Also: facts do not matter in who gets elected. What matters is how people _feel_ about a candidate. Facts affect that very little. I think Yang's ideas are kooky, but of the entire dem lineup he _feels_ the best. He's obviously very intelligent, he's also much more authentic than all the others, especially the frontrunners. And he's not a career politician, which is a major advantage in this day and age.