Back when they gave the stimulus to the banks, it almost would have been better to get money/stimulus to the people to use strictly to pay down debt (credit card, home, student loans). Even if it was only a chunk, not only would this have helped free up debt load, it would also go directly back to the banks that had been lending to the lower 90% all along.
Instead they gave money to banks to help with loans/lending, overlooking the fact that it does nothing to help consumers. They gave it to groups that weren't really lending to the 90% of consumers.
Trickle up is not just trickle up, it is trickle up and down. When you give money to the lower 90%, most of them give it right back. When you give it only to banks and upper 10%, it typically stays locked up in that 10%.
Anybody surprised by this consumer economy sputtering hasn't been looking at it and doesn't get that you need to get money to the lower classes to prop up the upper classes and banks.
Wages have stagnated this entire century so far, when people were surprised in 2008 when it came crashing down, it wasn't housing alone, it was that people had no money, less raises, while costs rose immensely.
I won't go into the trillions on war spent on credit by the country as well that further harmed the downturn. We financed the wars with China's credit, it is almost as if China wants to break us with debt and ongoing, un-winnable wars. We aren't playing the game very smart and the greed is thick.
In the future, stimulus should mean lowering debt loads of personal and state debt from the bottom up. Again, rich people mad by this aren't thinking it through, it is a two step hop and it is right back to them. But you'd have the lower classes now with more debt room and or room to spend. This is the only fix.
If you were playing a simulation to create a good economy in a game, you'd probably do something like this instead of enrich modern day kings to hold onto, hoard and lock up more money in the upper 10% backdrift that does not make it's way to the lower 90% with enough force.
Do banks assume that bailout + people making payments on underwater mortgages is, in the end, more profitable than bailout + lower debt loads and increased spending? An awful lot of people just walked away from their homes and mortgages.
1. http://www.bloomberg.com/news/articles/2013-11-06/blackstone...
Either way, a lassez faire market naturally forces this type of evolution without proper controls by a governing body. It makes complete sense that profits can be maximized if "consumers" (what the rest of us call people /s) have to continuously pay to use things that they depend on.
We should have said, listen you fucks, collectively, across the board, you are writing off a massive amount of debt owed. They get money at 0 to negative rates and screw over the public at the same time.
Short answer: when you print money, borrowers and non investors lose money, while lenders and investors gain more. It creates more imbalance.
Printing money does not get to consumers to spend, the 90% we are talking about, not the upper class which already knows how to make money when more money is being printed.
Our economy is heavily consumer focused, there aren't enough wealthy people to spend needed amounts to account for the whole populace/economy. Wealth by nature is hoarding/saving and only investing for returns.
If you look at it like a distributed system, giving money to lower class to improve the economy is to bittorrent/distributed decentralization where giving money to banks and the wealthy only is more like a centralized single point of failure that leaves many out.
When you do a stimulus for the lower 90% you will have guaranteed spend and increased buying from all areas of the economy, when you do a stimulus for banks and wealthy you only fund endpoints (wealth centers/investment/loans) throughout that have too much demand on each endpoint. The lower will spend at any time, even in down turns, the wealthy only spend in booms or extreme busts due to the nature of investing. If we looked at stimulus more like a distributed system, we might be better off.
Side note: The Iraq war cost for instance 1.7 trillion and will go up to 6 trillion:
The U.S. war in Iraq has cost $1.7 trillion with an additional $490 billion in benefits owed to war veterans, expenses that could grow to more than $6 trillion over the next four decades counting interest, a study released on Thursday said [1]
There is 1.2 trillion in student debt. What was a better purchase? Iraq war or paying off student loans here that will turn into a huge lower end stimulus? It isn't just an offset either, the country has 1.2 trillion in student loan debt and upwards of 6 trillion in Iraq only war debt. So really we have 7-8 trillion in debt out there between just those two things, because we aren't making good choices.
[1] http://www.reuters.com/article/2013/03/14/us-iraq-war-annive...
It is more complicated than that. If you print money, borrowers (e.g. 30 year mortgage) can win, because they get to pay back their debt with cheaper dollars. If you have credit card debt, you are probably in trouble. People who have saved, and invested (e.g. bonds) can lose, because their investments are devalued.
1. Get rid of the minimum wage. It makes as much sense as rent control... none.
2. Help out the needy by introducing a minimum income and/or an aggressive earned income tax credit.
3. Everyone knows kids are expensive. They shouldn't be. Scale 2 according to household size.
4. Set the levels of 2 high enough that citizens can pay their own taxes (both halves of the pension tax) and buy their own benefits (disability, health, life, 401k 'matching', etc.).
...watch the number of entry-level jobs explode and the demand for robotic work tank (like McD's filling sodas with robotics).
Side benefits:
A. Small companies will be better able to compete with big companies with employment lawyers and HR departments.
B. Bootstrapping and entrepreneurship becomes more viable.
C. Corporations lose some of their relative power due to A and B.
People have better things to do than repetitive, unfulfilling tasks (unless they enjoy it, of course). We need to get to the Star Trek utopia... what you're talking about sounds like halting progress.
And that's going to happen sadly before we reach Star Trek utopia, and there will be large-scale civil unrest, even in the US, within the next 30 years, I'm betting on it.
And let's not even talk about impoverished countries with exploding populations that are already struggling to provide jobs - an endless cycle of regional warfare, an endless Arab Spring.
Work is almost over. Good riddance to it. Why shouldn't everyone benefit from the fruits of full automation?
> We are going to have ... the super low wage unskilled laborers in a race to the bottom, trying to compete with machines, and a huge, empty nothing in the middle between those groups... and there will be large-scale civil unrest, even in the US, within the next 30 years, I'm betting on it.
That is largely up to the people who now have all the money and power. If they are shortsighted enough to take entirely for themselves the wealth the machines create - rather than using it to guarantee basic security for everyone - then we're in for rough times. I'm betting with you on that one.
They should, but:
>That is largely up to the people who now have all the money and power.
And that's why they won't. At least not until their poverty destabilizes the economy. It's expensive and reduces profits for the people making the decisions, at least in the short run.
Something that seems to get missed a bunch when talking about the upcoming lack of work for humans is that a job category doesn't need to be fully automated to cause widespread lack of employment.
Simply automating a job enough to allow 2 people to do the work 3 used to do puts 33% of those doing that job out of work. 33% unemployment is already an economic nightmare and the actual ratios of "X people to do the work Y used to do" will quickly become much more severe than 2 to 3.
Some people will inevitably say "this has happened before", but this time a lot of the automation is going to be purely software. You are not going to have enough new jobs for people "maintaining the robots" at anywhere near the scale required to make up for the lost jobs like you did with the previous more mechanical style of automation.
Your mistake is assuming that a sizable portion of the work these jobs involve can't be replaced by "dumb AI", which is what ML is all about, and that they require a fully general AGI.
If the proposition is that this would lead to fewer humans being needed for these jobs, I suppose that could be the case. In my own field, my criticism of automating, say, legal research and writing, is that the time it would take for me to check the work would be nearly the same as doing it myself. I don't see much efficiency gain, which is why I think the only thing that would truly be better than a human would be an AGI.
Also, if you look at most of what's been automated away, there's very little what we would consider (and even what people 40 years ago would have considered) artificial intelligence involved.
If you look at the legal field, what's changed is the means of gathering and disseminating information. Legal researchers can be much more productive with computer searches, and consumers can get access to advice and forms in some cases without the need of direct face time with a lawyer.
Some of the changes weren't even primarily driven by technology at all, but by new ideas for business models. I think that something like legalzoom could have been done with the technology available decades ago (phones, mail, and catalogs).
Disclaimer: I live in one of these neighborhoods. While I, personally, think we're closer to a post-scarcity society than we realize, I'm still surrounded by those who lack the privilege to think about such things. As such, they're kept awake at 2 AM because their neighbor is having a physiological reaction to whatever drugs he took that day and is storming around his complex, screaming and destroying things. Meanwhile, I'm a straight white male privileged enough to be living in a co-op, where we maintain a better standard of living and don't worry about such things on our property (at least, to some extent.)
Depends on what you mean by progress. Giving someone work experience is progress for her.
I'm not talking about halting progress. I'm talking dividing the employment and subsistence problems. There will still be demand for automation. It just won't be artificially inflated by making employment more expensive than it has to be.
Is it, though? If you spent 8 hours a day pouring soda in to cups would that be progress? We have this absurd fetishization of "work" as though any task performed in exchanged for money is inherently virtuous. Imagine a world where that person is given their wage, but a robot does the job for them. Is that world any worse off?
It's not exciting, but proving you can show up on time every day isn't nothing. There are plenty of great jobs that mostly involve being professional, congenial, and available. It's the work history equivalent of building a good credit rating.
> Giving someone work experience is progress for her.
Progress is getting to the point where people can have technology provide the essentials, so that these repetitive jobs are just for fun, rather than a means for survival. It's like in DS9 where Sisko's father runs a restaurant--for pleasure. If he'd been sick or no longer interested in working, he wouldn't have to worry about starving or finding a place to live.
They're mostly mutually exclusive, and we'll have to face up to that fact.
What we currently have, though, is a poorly designed system which doesn't make this transition easy and doesn't reward actors properly. I'm talking about things like free training for programming and technical skills, conditional support for the unemployed so they can have time to re-train and re-insert in the job market (while maintaining their health and spending), and means to make income distribution little flatter (automation can concentrate income to a degree that gets counterproductive).
"Our infrastructure provides you with X to spend every time period. Spend on what you'd like. Earn more if you'd like with a job/tasks/work of your choosing."
So even if we live in crazy robot utopia world people will be creating things that will still exist in finite amounts that they will trade for other objects that exist in finite amounts. In fact we really already do live in crazy robot utopia world and this is already happening. Almost no one is starving in america and millions of people live primarily on the dole. Those people living on the dole are living better than like 90% of the human race that has ever existed, they are just living relatively worse than the people who are employed or making a living.
In project australia or whatever it sounded like there were easy ways to consolidate resources because people still owned things and could barter them and eventually they would have all the resources and the monthly credit allowance would once again be welfare. I'm not even really sure what is wrong with capitalism as a system because life is getting better for everyone over time, and as long as ownership/monopoly isn't taken to its extreme things continue to work out.
In 2013, 49.1 million Americans lived in food insecure households, including 33.3 million adults and 15.8 million children. [1]
> Those people living on the dole are living better than like 90% of the human race that has ever existed
How is this a metric we should be measuring on?
[1] http://www.feedingamerica.org/hunger-in-america/impact-of-hu...
It's pretty funny how sentiment is completely opposite in Europe, and how heavily invested most European governments are in promoting procreation.
Because it doesn't matter? All of the data from minimum wage increases indicates that employers are not employee constrained, they are demand constrained.
So, minimum wages increases bump demand significantly while hurting employment weakly (if it all).
Suuuuuuuuure.
And H1B's don't represent more people hired. The data shows that companies use H1B's to replace existing employees.
So, you don't improve employment but you do reduce the demand. Congratulations, welcome to a downward spiral.
The problems with the suggestions here is #1 and #2 are both vigorously defended by different parties. So your proposal is a no-go politically. The Dems won't lower or get rid of minimum wage, and the earned income tax credit is already hated by the GOP (even though they proposed it). There is the additional problem of all the missing details as well.
Now before anyone trots out the whole "well if politics werent so stupid..." I have to stop you there. You reform with the politics you have, not the politics you want.
They hate writing checks just to write checks.
You can get it passed if you sell it as a progressive subsistence voucher that will replace the minimum wage, medicaid (we still have an insurance mandate), food stamps, etc.
In fact, use the word voucher. The GOP loves those.
...and the GOP is more complex than people understand. I voted for Romney and McCain and I'd go for an EITC if it came with the right reform package. All this "if it weren't for those guys..." is really counterproductive.
Over the last 30 years the GOP has raised government spending far more than the Dems. Consider the Medicare prescription drug plan without any negotiation for lower rates.
It's just redicusly over the top levels of corruption.
Can you name a political party, in any part of the world, in the last century that did follow through with their "great message"?
Politicians are PR / sales people. The product work is rarely actually done by them.
If mortgage interest rates on average went up, the politicians will blame the greed of banks, the international exchanges market, the gravity was higher than normal etc.
If mortgage interest rates on average went down, then that's a great reason to vote that politician in for another term!
People who had suffered through WW2 wanted to feel that there would be some benefit to the common people - 70 years later and the NHS is still one of the most loved institutions in the UK despite being avowedly a socialist endeavour.
NB I am not a supporter of the current Labour Party (AKA "New Labour") but they do deserve a lot of credit for what they did back then.
The nearest example I can see in recent history was the ANC in South Africa since 1994.
And by and large, much of what's "bought" with those fees and taxes just doesn't fucking work. Pension taxes can either go up for low-wage workers (precisely where they impact low-wage employers more) xor they can stop topping out for well-off professionals (and instead scale linearly or progressively with income). Health, life, and disability insurance should be consolidated into a more efficient public system. Company-provided 401k's are often basically just a handout to mutual-fund companies (that is, the fees take away from contributions but the investments don't perform better than a random walk). We can switch people over to firm-independent IRAs or some other supplementary pension system to increase efficiency, and give the gains back to workers as pay rises.
Also, getting rid of the minimum wage - or any other measure designed to decrease mechanization and increase the usage of low-wage, low-skill labor - is exactly the opposite of what should happen. Public policy should never be written to deliberately hamper productivity growth in the name of increasing human toil!
Depends on what you mean by productivity. Taken as a whole, people are working less and less.
> And by and large, much of what's "bought" with those fees and taxes just doesn't fucking work.
I disagree, but regardless, tying benefits to employment is silly and counterproductive. How many people make major employment decisions based on availability of benefits. I think there's common ground in thinking that employer-provided benefits is a broken idea.
I also think there's way to provide for the needy while letting individuals make their own decisions. Health insurance is already regulated and individually mandated.
Productivity is well-defined: output per unit of input. Labor is only one input, but since it's the most common, productivity-per-hour is one of the most measured forms of productivity.
If we assume that wages and productivity are correlated, then while reducing wage floors sounds like a good idea, what actually happens is that we're encouraging employers to use low-skill, low-output-per-hour labor in place of machines that have a higher output-per-hour but a higher up-front cost and no ability to externalize maintenance expenses (ie: between the cost of keeping a machine repaired or a worker fed and housed, we currently allow employers to externalize the latter but not the former).
This is why low wages are a bad idea: they reduce the total output of the economy, but make up the loss by externalizing it onto workers (who then have to take Food Stamps to stay alive because their job isn't productive enough to provide them a living). It means we end up using losses to the total economy to subsidize exploitative and unpleasant working conditions, throwing good money after bad.
Humans aren't capital that is produced to industrial demand; if humans aren't employed productively, they still need to be fed and housed (or, alternatively, the externalities associated with their not being fed and housed must be accepted.)
So its somewhat inaccurate to say that we allow employers to externalize those costs, as they are cost that exist independent of the decision of employers to use labor, and which low wage payments, while not completely offsetting, mitigate somewhat.
If industrial machines were produced independently of industrial demand and produced negative externalities if they weren't maintained whether or not they were productively employed, then it would make sense address them differently with policy than we do now, too.
GDP is Gross Domestic Product, a measure of productivity. Every employed worker could be more productive while the U.S. loses productivity as a nation.
Finding ways to get more people producing useful things is what we need to think about. I was suggesting that we should reduce the cost of providing entry-level employment. This will make it cheaper for employers to hire the under-employed, under-educated, and mis-trained. At some point, the under-educated workers will become experienced workers, and likely more productive (in the individual sense) than the equivalent unemployed worker.
Product(ion) is not productivity. Productivity is product/(some input measure) -- laborers and laborer-hours are common input measures when measuring labor productivity, though there are other less common kinds of productivity one might measure.
I'd like to point out that my assertion that has been basically ignored in favor of less interesting semantic arguments.
Come on. You were wrong, the difference between production and productivity is very important. You can't just cop out and whine that 'definitions are pedantic'. No. Definitions are very important.
This would only work if we got rid of welfare. Otherwise we are just going to create more government subsidized jobs.
> 4. Set the levels of 2 high enough that citizens can pay their own taxes (both halves of the pension tax) and buy their own benefits (disability, health, life, 401k 'matching', etc.). ...watch the number of entry-level jobs explode and the demand for robotic work tank (like McD's filling sodas with robotics).
I wouldn't call those entry level jobs. There is very little opportunity to grow beyond the entranceway. Why would we want to waste human minds on things robots can do. Robots are our friends. If we had enough in your #2 and taxes covered taking care of people's basic needs, selling of people's precious life wouldn't make the robotics takeover of the menial (and beyond) all that scary.
> There is very little opportunity to grow beyond the entranceway.
That was just an example. Nobody would show up to flip burgers for $0.25 an hour unless they saw a longer-term payoff down the road.
They might take a job doing menial work for little-to-nothing while they learn the ins and outs of a business and eventually apply for a more substantive role. We could call them 'apprentices'.
Longer-term payoff is meaningless when you can't meet your short-term goal of eating.
Are you serious? You could find more money on the floor than work at a job like that.
Of course we call places that pay like that sweatshops.
Let's just start paying people in company scrip.
I feel like your view is the sort of a "paying your dues" view, but the people I know that take off quick find something substantive to do, learn a lot very quickly, and are off doing something better in rapid iterative succession. The strategy you're advocating sounds like a very long runway before takeoff.
It's on-the-job training. Whether it happens quickly depends on the industry.
And the current employment problem doesn't revolve about well spoken people who regularly read tech blogs. The unemployed are disproportionately young, make, and under-educated. I'm saying a feasible way to get the retrained is to make it easier for them to find an occupation in booming industries.
We need to get the point where employers can think, "Why not? Let's give him a shot and ramp up his salary if he's any good." when an unproven young guy applies for a job. Right now, that doesn't make any sense because hiring him is too expensive. So you get situations where they give fewer hours to avoid providing expensive benefits, etc.
Basic income is usually suggested as a replacement for most current welfare programs.
http://www.nytimes.com/2014/04/23/upshot/the-american-middle...
Instead of giving people money, you give them non-wage compensation (e.g., health care benefits rather than wages, and similar things). That's exactly what happened, in fact - wages are "stagnant", but compensation per hour is not.
Housing vs wages: https://makewealthhistory.files.wordpress.com/2011/05/wages-...