Economy – Auxiliary Memory

Should Manufacturing Robots Be Banned?

by James Wallace Harris, Saturday, November 19, 2016

Because my friends have been depressed since November 8th, I’ve been wondering what it would take to make both liberals and conservatives happy – and solve all our environmental problems. Once again, the election has shown, “It’s the economy stupid.” Without widespread economic security, the population will be unstably polarized. As long as such unrest exists, no other major problem can be solved. To solve the problems of sustainability, climate change, overpopulation, inequality, mass extinctions, pollution, will first require solving the problem with the economy.

Is that possible? Can we create an economy where most people find security? Corporations are at war with workers, either by moving jobs overseas, or by buying robots. Donald Trump promised he’d stop corporations from moving jobs. Would that help? No, the problem requires a global solution. Would banning robots help? Maybe. If capital was willing to accept higher production costs, employing more people, it should. However, robotics creates jobs too. And we have to decide if billions of people working like machines is a good thing. People want is a job they love. People want to feel creative, productive, worthwhile, and independent. Does a Foxconn assembly job provides that? Could we create enough jobs without banning robots? I doubt it.

If robots were regulated, and cars for example, had to be made by human hands, could they be made at affordable prices? Let’s bring in the environment now. What if we designed a sustainable transportation system, one that’s a blend of bicycles, cars, trucks, buses, trains, ships, and planes. Such a system needs to create jobs and protect the environment. Would building things like cars only by human hands create enough jobs, and still be profitable for corporations?

If we don’t outlaw robots, what would be the next solution? It’s obvious that free-market capitalism fails many workers and the environment. Capital ranks wealth over labor. The next solution would be a minimum income for people without jobs. This would be a tax on capital, something it also hates. Since capital hates both labor and taxes, it might need to decide which it hates more.

Conservatives claim if they had free reign their economic solutions would create more jobs. That claim is probably false. If their economic theories were true, they still want to ignore the environment. Ignoring the environment ultimately means economic self-destruction, so it can’t be a solution. Remember, any real solution must be economically and environmentally sustainable.

Capital’s current path is towards fewer workers and greater inequality. Since we originally stated that the base problem is economic security for workers, that brings us back to where we started. Liberals believe a growing economy/population can be designed to protect the environment. Conservatives believe a healthy economy can be built by ignoring the environment and population growth. Neither are realistic.

I’m not sure a solution is possible, which is more depressing than the Republicans winning all the branches of the government.

JWH

Should Robots Be A Major Political Issue in 2016

By James Wallace Harris, Sunday, July 12, 2015

We need to decide if we really want robots. Why are we working so diligently to build our own replacements? We need to decide before its too late.

As Democrats and Republicans declare themselves candidates for president in 2016, they each scope out issues they hope will define their electability. Donald Trump has gotten massive free PR by making very ugly statements about immigration. Bernie Sanders is staking claims around fair income and wealth inequality. None of the candidates have focused what I consider the defining issue for the next president—climate change. However, I’m also discovering a growing number of reports about automation, robots and artificial intelligence to make me wonder if robots shouldn’t be second to climate change on the 2016 party platforms.

Climate change, automation and wealth inequality are all interrelated. Illegal immigration is a minor issue in comparison. In fact, most of what the current crop of candidates focus on are old-moldy issues that are far from vital to our country. The 2016 election will define our focus until 2020, or even 2024. We’re well into the 21st century, so it’s past time to forgot about 20th century issues.

If you doubt me, read “A World Without Work” from the latest issue of Atlantic Monthly. Derek Thompson does a precise job of stating his case, so I won’t repeat it. Let’s just say, between automation and wealth inequality, there’s going to be a lot of people without jobs, and the middle class will continue to shrink at an even faster rate. Bernie Sanders political sniffer is following the right trail that will impact the most voters. Reporters should trail Sanders and not go panting after Trump. Follow smart people, not fools.

Another way to grasp the impact of the robot revolution is sign up for News360.com and follow the topic robots, manufacturing automation, machine learning, natural language processing and artificial intelligence. Over a period of time you’ll get my point. Our society is racing to create intelligent machines. I’m all for it, but I’m a science fiction geek. If we don’t want to make ourselves into Neanderthals, we should think seriously about evolving homo roboticus. Being #2 in the IQ rankings will suck. But then if we embrace plutocracy and xenophobia, maybe we deserve to be replaced by AI machines.

If all of this is too much trouble, and you just want learn through the emotional catharsis of fiction, watch the new TV show, Humans on AMC. The show covers all the major robot issues, and sometimes in subtle ways. So spend some time thinking about the individual scenes in this show. Humans is very creative. Then start flipping the channels and pay attention to how often robots and AI come up in other shows. It’s like all the water is rushing away from the shorelines and we need to worry about when the tsunami will hit us.

JWH

Where are the Economists in the 2012 Election?

I have memories of past presidential elections going all the way back to 1960, and it seems to me that past elections spent more time with actual economists in the spotlight? Have you seen any economist this election year? In the past, CBS, NBC and ABC would routinely interview economists about politics, but I haven’t seen hide nor hair of them this year. Has politicians and the public given up on the Ph.D.s of the dismal science?

We have numerous computer climate models to predict the weather, and we have gigantic cosmological models of the universe, telling us how our universe was formed 13.7 billion years ago, so why don’t we hear about super computers contemplating the economy? You’d think both the Republicans and Democrats would offer some kind of scientific proof to back their economy philosophies. Are we supposed to just believe what the candidates tell us without reference to academic authority?

From what I’ve read, economists work with computer models all the time. They have been refining their equations for decades. So why don’t we see economic superstars interviewed on television? Why aren’t their computer models shown on the nightly news?

First off, it’s impossible to predict the future, but we can model rough trends. Modeling complex systems is hard. Modeling the Big Bang and the formation of the universe is easier than modeling the weather, which is more successful than modeling the economy, but modeling the world economy should not be impossible. Most Americans would want a model of the U.S. economy, but I would imagine it wouldn’t be very accurate without it being part of the model of the world economy. No matter what Romney or Obama get to do for Americans, it will affect the rest of the world, and then they will affect us right back.

I know very little about economics, but I wonder why economists can’t build an economic model that allows the average citizen to understand how various tax plans would affect the economy. What would happen if Romney did get to kill off PBS and Big Bird? What would happen if we added three trillion to the national debt while the economy recovers? What would balancing the budget do to the economy?

Here’s the thing about computer models, the more data points the more accurate the model. A data point would be like a weather station collecting all kinds of measurements. The best economy model would contain 311,591.917+ data points, one for each citizen of the United States, and to be really accurate, have 7,043,958,151+ points for every person in the world. We also need one data point for every business in the world. Another for each aspect of government. And each data point would measure many factors, such as various tax rates, incomes, assets, debts, etc. And we’d need equations for every interaction. So if we lower the corporate tax, how would it affect all other data points?

For example, Romney claimed his criteria for deciding on government spending was: Does the cost of a program justify borrowing the money from China?

Okay, I can accept that. But how do we decide for each program? It can’t be just whim. Let’s take PBS. I heard that $450 million of the Federal budget goes to PBS, and that’s just 15% of it’s funding. What do we get for borrowing $450 million dollars from China by giving it to PBS? If we had an economic model, could we calculate the early childhood educational benefit of Sesame Street? PBS teaches me a tremendous lot about American History. How valuable is American History to American citizens? Can you put a dollar amount on it? PBS teaches me a lot about science and nature. Does that have value? Can that kind of educational TV be quantified as expanding the economy in some way?

PBS might be an economic powerhouse of early childhood and adult education that generates many times it’s $450 investment. Just because conservatives want to save a few bucks on their tax returns are we being penny wise and pound foolish to get rid of PBS? Can we really know without numbers?

I hate it that politicians expect us to take their opinions as facts. I also hate that so many of my fellow citizens think opinions are facts.

Romney tells people we should say no to PBS, but other than his opinion, what’s backing that idea? Is his opinion about PBS right? I’d like to see an economic study done on the impact of PBS before I’d accept cutting PBS from the budget. Even as a jobs incentive program, how many jobs are created with that $450 million dollar investment?

Economics might be the dismal science, but I’d rather hear facts and figures about the economy from an economist than a politician. I just can’t accept opinions from the left and right, I want some hard cold facts to chew on.

JWH – 10/6/12

Balancing The Budget–The Purpose of Governments

People hate taxes, but what really riles them is seeing their tax money wasted, misspent or used for purposes that are against their way of thinking. As our current civil war is heating up over the budget I think we need to draw a bigger picture of why we pay taxes. Understanding the purpose of governments should help. I think we can see governments going through four stages:

Civilization – creating Law and Order
Human Rights – creating freedom for individuals
Prosperity – creating sustainable wealth for all
Environmentalism – the stewardship of the Earth

If you look at the history of mankind, or just to places around the world where civilization is collapsing you’ll understand the value of a stable government. Generally civilization starts with the might of individuals, so often early governments are ruled by tyrants, kings, and men with guns. Sometimes the powerful are enlighten leaders, but often they are just men who want to amass wealth and women. We saw what happens to civilization when we take out the strong man as when the U.S. took over Iraq.

Most people have an innate desire for law and order and will submit to all kinds of governments, but sooner or later they want to be treated better. Sometimes this coincides with theocracy, other times it arises out of secular ideals, such as democracy. For most of history the right to rule was assumed as descending from God. It’s much easier to accept government from a leader if you assume his rulings are not personal whims but the fulfillment of a divine plan.

The Old Testament is really a history of building a nation. The spiritual leaders tried to convince the Israelites to create law and order based on God’s rules. The trouble is people have a hard time agreeing whether the rules are right or not. Often powerful leaders must pander to the whims of the people, so over the centuries the idea of rights for people evolved.

At first taxes were just to maintain the wealth and might of the leadership, but eventually the masses started expecting their leaders to give them something in return. Generally this was law and order and a semblance of justice.

By the time the United States was formed people wanted to rule themselves and create a just and ordered society. They created The Bill of Rights. Of course, at the time women, African Americans and Native Americans weren’t considered for these rights, but it’s a step in the evolution of Human Rights for all. Government became something run by the people for the people. Taxes were meant to maintain civilization and provide a fair treatment of all people, given them the opportunity to prosper and seek happiness. Taxes went to maintaining civilization and guaranteeing a legal system that protected human rights.

Population was sparse and people were expected to make their own way or die. There were few social support systems, mostly the charity of individuals and churches. Many conservatives want this kind of government, but there’s two major problems to this. First is the explosion of population. Second the explosion of wealth brought on by the industrial revolution. For many years governments tried not to interfere with human growth or the creation of wealth, but it’s now too late for that kind of thinking.

The third stage of government is the management of over population and the regulation of wealth. Government cannot ignore these problems without hurting human rights and even civilization. The mismanagement of wealth can lead to economic collapse and social disorder. Back in pioneering days wealth came from the land. If people failed they died or moved on. Now the population lives off the economy, which to most is an abstraction. That’s why it’s so hard to understand why the government needs so much tax money.

If the Republicans got their way and reduced the size of the government and drastically lowered taxes America would end up looking like India or Pakistan. Overpopulation would hinder the creation of wealth. Sure, some wealthy people would get much richer, but most of the population would get much poorer. The purpose of our taxes is to maximize the well being of the population to allow the maximum creation of wealth for all. In other words, a chicken in every pot. The trouble is some people don’t like paying for other people’s chickens.

This third stage of government is really about stimulating the economy. The first stage was about creating social stability, law and order. The second stage was about making everything fair for all. Now some people think the third stage is about providing handouts for the poor, but that’s not really true. What’s really happening is government is trying to create prosperity. Henry Ford paid his workers a decent wage because he wanted them to be well off enough to buy the cars he made. The modern role of government is to make sure the greatest percentage of its citizens contribute to the economic growth of the nation and all benefit fairly.

Now I didn’t say the role of the government is to get everyone a job. Our population has grown way to large for that to be possible. But if we ignored the people without jobs, the number of them would pull down the nation economically. Look back at the Great Depression. People on social security, welfare or unemployment still contribute to economic growth through the spending of government money.

Like it or not, the role of government has become the regulation of wealth and stimulus of economic growth. Now this might not be done fairly, efficiently or wisely, but it’s the job the government has to do. Reducing the government will only make our problems worse. The belief in pure capitalism is a fantasy.

There is emerging a fourth role for government, environmentalism. Our populations are now so large, and the creation of wealth so vast, that they are consuming the planet. If governments don’t become ecology cops we’re all going to die from self destruction.

Conservatives want to roll back governments to stage 1 and 2 functions. Actually them seem to want stage 1.5, law and order with some theocracy, something akin to Old Testament times. Even though most conservatives call themselves Christians they don’t seem to want to pursue Christ’s job of feeding and healing the poor. They seem to want law based on their religion, and to only pay taxes for things that benefit them directly, like roads and armies. That kind of government would probably work if the population density was like it was 2,000 years ago.

Like it or not, government has to be big. It has to be in the business of managing wealth and population dynamics. If we took away all those entitlement programs the country would go down the drain. Our economy is based on economic activity. Even if we had a smaller population that wouldn’t help the economy, look at Japan, with it’s declining population. And we also much face up to the problem that a heated economy is killing the planet.

If governments are going to succeed at stage three and four they will need to invent new ways to manage wealth and population, and reducing taxes or making the government smaller just isn’t a solution for solving those problems.

Also, notice the interactions between the stages. Without stage 1, stage 2 can’t exist. Without stage 2, stage 3 can’t exist. You’d think stage 4 would be above stage 1 because if the ecology collapses, so will civilization. But without civilization you can’t think of ecology. So it becomes a circular process.

JWH – 2/27/11

Richocracy

Who rules America? We all like to think we do, since we believe we live in a democracy. But what if that’s not true? If you watch the new documentary film Inside Job by Charles H. Ferguson you might think the rich rule us, and they’re doing a bad good job because of the 2007-2010 financial crisis. Greed triumphs over wisdom. Richocracy is a form of oligarchy, where the extreme tiny minority of the very rich have the power of ruling. The insight of Inside Job is these people reign whether the Republicans or Democrats are in control.

We do not see the real ruling rich in Inside Job, but their representatives, Henry Paulson, Ben Bernanke, Timothy Geithner, Alan Greenspan, the CEOs of the leading financial institutions, and their philosophical spin-doctors, the economists that teach in academia and consult in Washington. Many of these men stay in power regardless of which political party is in the Whitehouse or Congress. They rule by economic theory that justifies getting more wealth for the richocracy.

It’s all very obvious when you think about it. Money is power, the people with the most money have the most power. With very large amounts of money and power its possible to change both the laws of the land, and the rules of business. Furthermore the richocracy hire the top Ivy League economists to justify their wild money making schemes.

To me, the most damning evidence revealed in Inside Job is how the richocracy made the credit rating agencies a total sham. Wall Street created investment systems that insiders knew were worthless but got them rated AAA so gullible banks, investors, retirement systems, local, state and foreign governments, would buy. These investors of little people’s money used these corrupt credit ratings in their decision making, and thus trillions were stolen.

Would we have had this financial crisis if we had honest credit ratings? I don’t think so. Most people who invest money have very little knowledge of how their money is put to work. They have to trust the institutions that hold their savings. Those institutions use the credit rating systems like Moody’s and Standard & Poor’s to understand risk. An AAA rating is suppose to be as secure as U.S. government bonds. How do you feel about your retirement money being invested in schemes rated AAA (prime) but should have been rated CCC (extremely speculative).

But that’s the point of this film, greed corrupts everything. People ignore risk when they think they can make a quick buck. The solution to that is regulation. Capitalism without rules is chaos. The richocracy fights all regulation with every fiber of their souls. That’s how they use the Republican party. Regulation slows down wild speculation, but it’s the bubbles of wild speculation that create wild piles of wealth. But in recent decades most new forms of speculation have been no more rational then Ponzi schemes. The richocracy love the Ponzi scheme because it’s a quick way to take away a lot of money from the suckers and give it to the very few, the richocracy.

As Inside Job points out, in the old days investment firms invested their own money and they were very careful how it was used. Over recent decades investment firms started investing ever larger growing pools of money that didn’t directly belong to the money managers, so it became ever more easy to bet on riskier schemes. Governmental financial regulations are designed to keep investing money within the bounds of reality. Which means no Ponzi schemes. And all systems for quick riches ultimately come down to a Ponzi game.

Now the real question to ask: What can us little people do about this? The people with all the money have all the power, but the legal system is suppose to be based on democracy. Democracy is corrupted by lobbying. The more money you have, the more lobbyists you can buy. For the little people to gain power they either have to find ways to get their own lobbyists, or force a political change to the lobbying system. But the inherent nature of the richocracy really precludes the second option from happening.

The ultra rich is often called the top 1% of America, but that would be over 3,107,044 people. My guess is the richocracy is actually much smaller than that, maybe only the top .1%, or a little over 300,000 people. Those other almost three million people are hardcore richocracy wannabes. So we can think of it as us (99%) versus them (1%). You’d think the little guys would have the power, but they don’t, because all the wealth is with the 1 per-centers.

But that’s an illusion too. Us little guys have a lot of wealth too, but we let the richocracy manage it for us. Of course, we’re just as greedy as they are. We want 10% returns on our retirement investments and take risky chances with our 401k money. It would be possible to lobby with our money but we don’t control how its invested.

We don’t make the laws of the land, the laws of business, nor the theories behind government and finance. We think we have power with our votes, but I’m not so sure about that anymore. As Inside Job shows, people voted for Obama because they wanted change in the financial systems but he failed to deliver. Obama hired the same richocracy representatives that were used by the Republicans, and regulation was once again avoided.

Essentially us little people have no power and all we can do is sit by and hope the richocracy doesn’t drive the country into absolute ruin. We can hope the richocracy can learn from their own madness but Inside Job also points out that all the people that caused the recent crisis walked away rich. The richocracy is evidently waiting for the economy to settle down so they can start up the next bubble. They know how to get fabulously wealthy from financial bubbles. The trouble is if you look back at the history of these bubbles, they are getting larger each time, and the country and us little people are suffering more with each new cycle. How many more can we survive?

JWH – 11/14/10