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The End of Work?

workers

A provocative piece in The Economist tries to explain the “productivity puzzle” which is manifesting itself in different ways among the Western economies. In short form, “R.A.” argues that, “because we rely on market wages to allocate purchasing power we have resisted technology-driven reductions in employment, and because we have resisted that decline in work we have trapped ourselves in a world of self-limiting productivity growth.” It’s a long piece that is self-described as “wonkish” but makes several interesting observations and conjectures.

The setup:

The immediate motivation for the argument presented here is work done on the diverging fortunes of the British and American economies over the past six years. A recent Free exchange column explored the case. Two rich economies, relatively similar in structure, reacted very differently to the global financial shock of late 2008. In America output sank sharply but then rebounded to new highs. Employment, by contrast, fell dramatically and has recovered much more slowly; it has yet to regain the pre-crisis peak. In Britain the trends were reversed; employment is setting new highs while output suffered an L-shaped recovery.

The key difference appears to be rates of inflation. Higher inflation in Britain reduced real wages. That, in turn, allowed firms to meet a given level of demand by using more workers less intensively—at lower productivities. In America, by contrast, lower inflation meant that real wages rose over the course of the recession and recovery. Some research results suggests that firms respond to sticky real wages by wringing more output out of existing workers—raising productivity. Firms meet a given level of demand using fewer workers more intensively, resulting in a jobless recovery.

One possible takeaway from this divergence is that productivity is often endogenous to the real wage. Confronted with high real wages, firms reorganise production, invest in training and capital, and take other steps to boost productivity and economise on labour. When real wages are falling, by contrast, the incentive to economise is reduced and productivity lags.

That stands to reason, right? If labor is cheap, there’s little incentive to try to replace it with technology, since doing so requires an initial outlay. But, piecing together several seemingly unrelated bits of research, R.A. sees this simple observation as the reason for the concentration of wealth at the top and the concomitant demise of the middle class.

Since the early 1980s, labour markets have polarised or “hollowed out”.

Work published in 2006 by David Autor, Lawrence Katz, and Melissa Kearney argued that employment and wage growth in America have “polarised” in recent decades, a conclusion that has been reinforced by subsequent research. Employment in high- and low-skill positions has risen substantially relative to middle-skill jobs. The resulting employment distribution generates a distribution of wages that is similarly polarised and more unequal than that which prevailed prior to this period.

Polarisation is mostly attributable to elimination of “routine” tasks by trade and technology.

Daron Acemoglu and Mr Autor pioneered a “task approach” to labour markets. Tasks can be completed by either labour or capital. The more routine a task is, the more susceptible it is to automation. But whether or not a task is automated depends upon the relative supply—and the real wage—of workers of various skill levels. Subsequent work has shown that automation and trade are responsible for displacement of routine tasks previously done by middle-skill workers, in both manufacturing and clerical or service activities, leading to polarisation of local and national labour markets.

Since the early 1980s, polarisation has occurred almost entirely during recessions.

Examining patterns of polarisation in America, Nir Jaimovich and Henry Siu find that displacement of routine work is not a gradual process but occurs almost entirely during recessions. Since the mid-1980s, roughly 92% of job loss in middle-skill, routine jobs has taken place during or within a year of recessions (as dated by the National Bureau of Economic Research). This pattern is linked to the phenomenon of “jobless recoveries”, which followed the recessions of 1990-1, 2001, and 2007-9 but not earlier downturns.

The jobless recoveries of the past generation have been characterised by a change in the cyclical behaviour of productivity.

Prior to the mid-1980s both output and productivity growth tended to fall relative to trend in recessions and rise relative to trend in expansions. Beginning with the recovery from the 1981-2 recession, however, the behaviour of productivity flipped. It has since risen relative to trend in recessions and fallen relative to trend in expansions.

Productivity-rich recessions, and jobless recoveries, are a product of sticky wages.

Mark Bils, Yongsung Chang, and Sun-Bin Kim find that sticky wages push firms to wring more output from existing employees when confronted by a decline in demand. Productivity therefore rises during recessions—rising most in industries where wage rigidity is most binding—reducing the incentive to take on new workers despite relative wage flexibility among the unemployed.

Taken together, these observations imply that in the presence of moderate inflation, real wages will be more flexible and productivity will flip back to falling, rather than rising, amid weak demand. That brings us back to the motivating example of the Britain versus America comparison, where that implication seems to have verified.

Presumably, the process has been more pronounced in the United States than in Europe because of different public policy choices. Most notably, our tax system incentivizes capital investment, making replacing workers with technology less expensive, and also concentrates wealth since we tax it at much lower rates.

Regardless, R.A. conjectures that,

 As technology improves, an ever larger share of the universe of tasks becomes potentially automatable, in that the cost of using capital to complete a task falls below typical labour costs to complete the task.

Rising incomes, in this story, are a result of substitution of capital for labour: of raising the ratio of capital to labour across the economy and in doing so boosting the level of output per worker. In the early stages of technological advance, technological progress need not reduce overall labour demand, and might well raise it, since the share of all tasks that can be completed by capital is low. Some substitution of capital for labour raises incomes. That raises consumer demand, which in turn leads producers to draw on a broader range of tasks. Because there are so many more non-automatable tasks than automatable ones, technological advance raises labour demand.

Note that this story assumes that there is a finite number of different tasks, all of which are theoretically automatable. At sufficiently high levels of technological progress, in other words, there is nothing a human can do that a machine can’t.

Human labour is necessary in order to do required tasks that aren’t yet automatable. At a very low level of technological progress that’s basically everything. At a very high level of technological progress that’s basically nothing. But the process of substitution is uneven. Easy-to-automate tasks tend to involve mildly challenging but routine work done by middle-skill labour. Automation begins from the middle and works outward, because difficult-to-automate tasks fall into two categories: those that must be done by highly skilled workers (like inventing iPhones) and those that are manually challenging (like navigating and cleaning a cluttered office).

So, imagine that the labour force exists along a skill continuum. As technology improves, opportunities to substitute capital for labour grow. Periodically there is reorganisation and some workers are displaced. Workers above some skill threshold are reallocated to a new high-skill task. Workers below that skill threshold are reallocated into competition for low-skill jobs. Technological advance will tend to raise that threshold while educational attainment will tend to lower it (so that a larger share of the labour force, when displaced, is reallocated into relatively high-skill work rather than into competition for low-skill jobs).

But: the real wage varies with labour supply at various skill levels. When many workers are shunted into competition for low-skill jobs, the real wage at which low-skill work is done falls. That, in turn, makes further automation of low-skill work less attractive. Technological advance can become self-limiting. Substitution of capital for labour raises productivity growth but displaces workers and places downward pressure on wages. That, in turn, tends to slow productivity growth by reducing the incentive for further substitution of capital for labour. Note that rapid increases in educational attainment could help attenuate this effect, by slowing the growth in the glut of workers competing for low-skill work. But rapid increases in educational attainment are no longer nearly as cheap or easy to come by as was the case in the 19th and early 20th centuries.

Worse, monetary policy can’t fix any of this. In fact, the Fed faces a sticky dilemma.

If we assume that purchasing power is allocated via market wages, then the task facing central banks immediately becomes impossible. If they try to maintain low and stable inflation, then competition for low-skill work will place downward pressure on the wages of low-skill workers, but wages will be too rigid to provide employment for all willing workers. The result is a stagnant real wage for all but those at the high end of the income spectrum and a growing number of frustrated workers pushed out of the labour force due to lack of work. Productivity growth will follow a middle path. It will be lower than it could be, because society will still be trying to employ everyone by reducing the real wage of less skilled workers until they are competitive at tasks machines could reasonably do. Indeed, efforts to employ everyone by reducing their real wage will retard cost declines in industries, like health care or education, that should be subject to rapid displacement of workers by capital, thereby leaving real wages for workers not immediately at risk of displacement lower than they could be. But productivity will be higher than it would be in a high inflation scenario.

But in general, the benefits of growth will flow to high-income workers and owners of capital. Since they have low propensities to spend, central banks will find it difficult to generate adequate demand, except by nurturing unsustainable borrowing by workers with stagnant incomes. Central banks cannot have adequate demand and low inflation.

On the other hand, if central banks are willing and able to raise inflation rates, then real wages will be more flexible, and firms will be more willing to use labour to do tasks that could reasonably, or even easily, be automated. In this scenario the central bank succeeds in generating adequate demand; because low real wages encourage less substitution of capital for labour, a higher share of income flows to labour, to workers with a high propensity to spend. But adequate demand is incompatible with a low rate of inflation. It may also be unsustainable, since many central banks will interpret the high inflation necessary to boost employment as evidence the economy is running at capacity.

But of course, the economy isn’t running at capacity; it’s running farther below capacity than in the inadequate demand case, because firms are using capital much less intensively than they could. (One question central banks may face is how to generate higher inflation given excess capacity; the British case points to one tried and true method: depreciation.) Nonetheless, the concept of full employment becomes divorced from the concept of maximum sustainable output growth. The central bank is forced to choose between two undesirable outcomes.

If this is right—and it certainly seems plausible—then we’re left with a choice between an economy that’s operating at maximum productivity and one that employs a maximum number of people. If so, then the solution is an unsettling one that has come up from time to time in the comments section here, offered by Michael Reynolds and others:  an economy where the most talented work and subsidize an increasingly large pool of less talented people who don’t.

What might a potential solution look like? Fiscal expansion could help, but the gain from fiscal policy is likely to be limited unless it is structured to try and reduce labour supply. That’s right, reduce labour supply.

The most attractive options to accomplish this are probably those which seek tovoluntarily reduce the number of hours of “full-time” work. John Maynard Keynes was right; a 15-hour work week should be sufficient to provide a worker with a “full-time” income. But this will require subsidies from the state; in the form of wage top-ups, perhaps, or a universal basic income.

Why are subsidies necessary now when they weren’t a century ago, when rising productivity was allowing workers to work less but still earn a good living via a market wage? You could say that technological progress was labour-augmenting then and has since become labour-substituting, but that’s not quite right. Technological progress is always capital-augmenting, but when it augments capital in tasks that are complementary to those done by labour, it looks labour-augmenting. As the share of tasks completed by labour falls, any given technological change is more likely to appear to be labour-substituting, since the share of workers that could potentially benefit from the change as a result of working on complementary tasks keeps dropping.

The transition would, naturally, be difficult:

Redistribution at the scale described above would be very difficult to engineer. Society would face two main challenges (among a pile of others). First, if the tax code were going to raise enough money to support non-workers from a dwindling pool of people earning high market incomes, then the tax code would need to become much more efficient. Otherwise, taxpayers would face intense pressure to reduce their tax burden in any way possible and would generally succeed: enough, anyway, to break the system. The second challenge is related; however efficient the tax code, the social conflict arising from an effort to reorganise society in this fashion would probably be intense and unpleasant.

This would be a bizarre world from the perspective of most of us. But, R.A. rightly notes, maybe not in the grand scheme of things:

The upside to managing the transition would be enormous, however. What we are talking about here is a world which is much, much richer. Everyone should be able to enjoy much higher incomes while doing much less work. The endpoint would not be a socialist paradise, necessarily. But it might seem a bit like one, in the way that a 19th century worker putting in 70 hours per week in an attempt to earn enough to keep his family from starving might view a world in which people are able to live in extraordinary comfort (by comparison) working just 40 hours per week as something like heaven.

Getting from 19th century misery to 20th century prosperity took a lot of social and governmental reform and investment. It is unreasonable to think that similarly grand shifts would not be necessary now. It is also unreasonable to expect that this transition should require qualitatively similar reforms to those which did the trick in the 20th century.

This all assumes that recent trends aren’t some bizarre anomaly and the we are indeed seeing a “new normal.” But this strikes me as a reasonable bet. The nature of information and communications technologies, especially, are such that the economy in now truly global and the opportunities for the best of the best to become fantastically rich have been realized. But we’re also seeing the down side: there’s much less call for local mediocrities.

Much of this was obvious to even non-specialists like myself two decades ago. But the scale and pace of change has been beyond my expectations. Most notably, the degree to which the new economy is impacting even the very highly educated was something I did not anticipate. It’s conceivable, for example, that online delivery of courses will displace the vast majority of university professors over time. While recorded lectures and computer-graded tests will never be able to replicate the classroom experience, it’s not obvious that many outside the academic profession much care. And even universities themselves have long since undermined their own argument by replacing full-time faculty with a vested interest in the students and their institutions with minimum wage adjuncts. Not to mention offering half-assed online courses. Similarly, physicians and attorneys could either be replaced entirely by automated systems or be reduced to much-lower-paid technicians.

Utopian novelists in the latter part of the nineteenth century envisioned a world where most work was essentially a hobby, with people doing it for the purpose of self-actualization and stimulation rather than as a necessity for meeting life’s needs. I don’t know that we’ll get there.  But we certainly seem to be making workers obsolete at a rapid clip.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. Mikey says:

    The result is a stagnant real wage for all but those at the high end of the income spectrum and a growing number of frustrated workers pushed out of the labour force due to lack of work.

    Isn’t this exactly what we’re seeing now? The Fed has been working to “maintain low and stable inflation,” and the result seems to be just as the author predicted.

    . Most notably, the degree to which the new economy is impacting even the very highly educated was something I did not anticipate.

    My daughter is finishing a Ph.D. in a STEM field (she should be defending in a couple months). She wants to teach, but it’s proving very difficult to find a position anywhere. This may be due, in part, to the apparently glacial pace of academic hiring, but it seems the academic job market is pretty much crap everywhere.

    It seems at this point she may not have much of a choice–either “minimum-wage adjunct” or some job in industry. Pretty much a waste of a brilliant young mind.

    Like or Dislike: Thumb up 5 Thumb down 0

  2. john personna says:

    I’ve read this piece, and a few echoes around the econ-biosphere. I agree that it’s important.

    Of course, our past OTB discussions on globalization and automation have pretty much presaged this, if in less structured from.

    This is where some of us here at OTB and elsewhere went to “robo-socialism” long before everyone else caught up with “minimum guaranteed incomes.”

    The Jetsons were Keynesians (2012)

    And John Maynard Keynes got there first of all.

    Like or Dislike: Thumb up 0 Thumb down 0

  3. john personna says:

    @Mikey:

    For your daughter:

    Get a PhD—but leave academia as soon as you graduate

    By Allison Schrager February 7, 2014

    Like or Dislike: Thumb up 0 Thumb down 0

  4. Motopilot says:

    Utopian novelists in the latter part of the nineteenth century envisioned a world where most work was essentially a hobby

    I remember as a young boy in the early 60s reading Popular Mechanics and Popular Science magazines. That’s pretty much how they painted the future as well.
    Conversations in just the last month… reference billionaire Tom Perkins’ vision of rich people establishing national policy in a pseudo democracy and the Republican response to the CBO comment about the ACA facilitating workers leaving jobs… pretty well demonstrate how soon our culture is going to accept that idea.

    Like or Dislike: Thumb up 4 Thumb down 0

  5. Mikey says:

    @john personna: Thanks, John, I’ll pass it on.

    At least she’s fortunate enough to not have much debt, being really smart has its scholarship perks.

    Like or Dislike: Thumb up 0 Thumb down 0

  6. C. Clavin says:

    This is just total nonsense…your “set-up” doesn’t even mention that Britain pursued much deeper austerity measures…in the face of a f’ing recession…than the US has. WTF kind of analysis doesn’t even consider that?
    Private Sector job creation is fairly robust…better than either Bush. It’s not at the Clinton or Reagan levels…but there isn’t a tech boom, or a world-wide drop in oil prices, either.
    http://madvilletimes.com/wp-content/uploads/2013/12/Private-sector-job-growth-Reagan-to-Obama-Nov-2013.jpg
    Where we are suffering is a net loss of Public Sector jobs…close to 2M…due to our mis-guided austerity. Reverse that stupidity and the UE number is close to 5%. That creates feedback loops that multiply the effect. Given that…this post would never even exist.
    http://madvilletimes.com/wp-content/uploads/2013/12/Public-sector-job-growth-Reagan-to-Obama-Nov-2013.jpg

    But we certainly seem to be making workers obsolete at a rapid clip.

    You mean the horseless carriage is going to make the stable boy obsolete. OMG!!!
    The biggest problem relative to productivity is that the gains from increased productivity is going to the rent-seekers…not the workers. Just because Walmart can ship stuff from China dirt cheap in containers doesn’t mean it’s OK to pay their workers sub-poverty level wages.
    I know you, and to a greater extent Doug, are extremely reticent to write posts that go against your ideology…the entire Rogoff/Reinhart basis for austerity kerfuffle for instance…but you should probably read this.
    http://www.hup.harvard.edu/catalog.php?isbn=9780674430006
    http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?_r=0

    Like or Dislike: Thumb up 10 Thumb down 4

  7. ernieyeball says:

    February is Black History Month.
    When there is no more work there will be more time to tear up the Earth.

    George Grant patented the first golf tee in 1899.
    George F. Grant, who was not only one of the first African American golfers in post-Civil War America, he was one of the first African American dentists too.

    http://www.aaregistry.org/historic_events/view/golf-tee-patented
    I wonder if they called him Painless?

    Like or Dislike: Thumb up 1 Thumb down 0

  8. Pharoah Narim says:

    The real problem is that of “money”, which has morphed from a medium of exchange to a license to engage in economic activity. Our current ideas about money no longer scale to a planet of 7 billion people with the type of technology available to us. There won’t be need for manpower intensive ventures going forward. We’ll have to devise other ways of licensing people to engage in economic activity–beyond “work”. None of this problem solving around the edges is going to answer the mail. Fix the money…

    Like or Dislike: Thumb up 1 Thumb down 0

  9. C. Clavin says:

    @C. Clavin:

    The biggest problem relative to productivity is that the gains from increased productivity is going to the rent-seekers…not the workers.

    Speaking of which…Corker and some other Republicans just pushed forward on the war against the middle-class by quashing the unionization of that Volkswagen plant…they threatened the elimination of tax breaks, etc. Anyone care to wager how big the job growth there is going to be now? Or will it be just another case of Republican theories failing to deliver? Deja-vu all over again.

    Like or Dislike: Thumb up 7 Thumb down 4

  10. PJ says:

    Let them eat cake.

    Like or Dislike: Thumb up 2 Thumb down 1

  11. C. Clavin says:

    And oh-by-the-way…Joe the Plumber is now a member of the UAW and working at a Chrysler plant.

    Like or Dislike: Thumb up 11 Thumb down 0

  12. Ben Wolf says:

    In America, by contrast, lower inflation meant that real wages rose over the course of the recession and recovery.

    Real wages were $291.09 in 2008 and $295.15 by the end of 2012. It’s rather difficult to believe a measly $4.06 change in five years has somehow prevented a job recovery.

    That stands to reason, right? If labor is cheap, there’s little incentive to try to replace it with technology, since doing so requires an initial outlay.

    We’re talking about real wages here, not nominal wages which R.A. doesn’t seem to understand the difference in. Real wages are a measure of how much purchasing power a worker has, not how expensive workers are to employ.

    But whether or not a task is automated depends upon the relative supply—and the real wage—of workers of various skill levels.

    The paper quoted here assumes workers negotiate real wages rather than nominal wages, which no one with half a brain actually believes.

    Mark Bils, Yongsung Chang, and Sun-Bin Kim find that sticky wages push firms to wring more output from existing employees when confronted by a decline in demand. Productivity therefore rises during recessions. . .

    Average productivity during the boom of 1947-1973 set the record of 2.8%.

    Average productivity growth during the recessionary period 1973-1979, when nominal wages were surging and making workers more expensive: 1.2%

    From 1979 to 1990, which included one of the most severe recession in the 20th Century in 1981-1982: 1.5% average productivity growth.

    During the “Great Moderation” from 1991-2007: 2.4% productivity growth.

    Contained depression of 2008-2013: 1.5% productivity growth.

    Not much support for R.A.’s contention that productivity grows fastest during recessions.

    If they try to maintain low and stable inflation. . .

    Central banks do not control the rate of inflation. The Fed has used every tool at its disposal to hit a lousy 2% rate and has failed for five years. The Bank of Japan has been attempting to do so for nearly twenty years and yet remained mired in deflation.

    . . .then competition for low-skill work will place downward pressure on the wages of low-skill workers, but wages will be too rigid to provide employment for all willing workers. The result is a stagnant real wage for all but those at the high end of the income spectrum and a growing number of frustrated workers pushed out of the labour force due to lack of work.

    There is no empirical support that unemployment results from sticky wages.

    But in general, the benefits of growth will flow to high-income workers and owners of capital.

    Because both groups benefit from vast government subsidies which re-distribute incomes to the top.

    On the other hand, if central banks are willing and able to raise inflation rates. . .

    Find me one that can.

    Nonetheless, the concept of full employment becomes divorced from the concept of maximum sustainable output growth. The central bank is forced to choose between two undesirable outcomes.

    Full employment and price stability are the same target. Underemployment means deflationary pressure while greater than full employment means rising price levels.

    Technological progress is always capital-augmenting.

    Then why, if workers are being rapidly replaced, are corporate earnings also falling?

    If this is right—and it certainly seems plausible—then we’re left with a choice between an economy that’s operating at maximum productivity and one that employs a maximum number of people.

    Dr. Joyner, by definition an economy with mass unemployment is operating below maximum output because there are resources sitting idle. In fact it’s impossible to reach maximum output unless a job offer exists for every person wishing to work. There is nothing unusual in the productivity growth of recent decades; in fact productivity grew more rapidly in the decades following WWII than over the last forty years.

    Like or Dislike: Thumb up 8 Thumb down 0

  13. john personna says:

    @Ben Wolf:

    I am not going to Fisk your Fisking, but I think R.A. addresses the things you say he doesn’t.

    Really the bottom line is one we all know. In the great hit of The Great Recession companies were forced (or were politically and culturally able) to shed labor.

    They discovered in recovery that they could meet growing demand without adding back [domestic] labor.

    Simple argument, in fact pretty much a direct observation.

    The fine points of real wages, inflation, interest rates only provide secondary reinforcement. They are not required. They only make it worse.

    Like or Dislike: Thumb up 3 Thumb down 0

  14. grumpy realist says:

    The problem is–people sitting around don’t have (usually) any income sources. Which means they can’t buy anything.

    The mind-bogging stupidity of companies and countries who decide to charge ahead full speed with automation always gets me. Where do these idiots think that market demand comes FROM?!

    Like or Dislike: Thumb up 9 Thumb down 2

  15. James Joyner says:

    @Ben Wolf: But that’s the “puzzle” R.A. is trying to solve: ” The productivity puzzle that began in the 1970s persists, thanks to the apparent fizzle in productivity growth since the internet boomlet of 1996-2004—and despite what looks to many like an ongoing acceleration in technological discovery.

    And, yes, a truly robust economy is going to result in creative destruction and have workers constantly changing jobs and others retraining for ones that become outmoded. But there are indications that we’re simply displacing people and not intending to replace them.

    Like or Dislike: Thumb up 2 Thumb down 0

  16. Rob in CT says:

    Wouldn’t it be a continuation of a trend? Since at least 2000-2001? [Arguably back past that, depending on how much you think the late 90s bubble and US household borrowing papered over the problem]

    Like or Dislike: Thumb up 1 Thumb down 0

  17. I agree with analysis, but I’m not to sure of conclusion, because it doesn’t address what I see as the two big stumbling points:

    If so, then the solution is an unsettling one that has come up from time to time in the comments section here, offered by Michael Reynolds and others: an economy where the most talented work and subsidize an increasingly large pool of less talented people who don’t.

    What about the talented but lazy who would prefer to goof off like everyone else? Are they forced to work anyways?

    Utopian novelists in the latter part of the nineteenth century envisioned a world where most work was essentially a hobby, with people doing it for the purpose of self-actualization and stimulation rather than as a necessity for meeting life’s needs.

    What about the “toilet cleaning jobs” that end up being very hard to automate but are unlikely to be anyone’s idea of a hobby? How do we make sure someone still does them?

    Like or Dislike: Thumb up 1 Thumb down 0

  18. john personna says:

    @James Joyner:

    Remember that in a global framing it is pretty much good news.

    The hollowing, again long-discussed, is of middle wage jobs in developed nations.

    Perhaps this article contributes with this idea that it is skilled-but-routine work that is disappearing, but as I say, we’ve talked about this … michael reynolds (December 3, 2013 at 09:37):

    Robot socialism is coming, like it or not. Libertarians and assorted other conservatives hate it, of course, but they can’t really offer a coherent argument that goes beyond: it’s never happened before.

    Or a little earlier, john personna (May 15, 2013 at 20:05):

    I’m kind of torn in response to this article. In a way I’ve worried about the same things for a long time. I think free trade and automation are hard on workers. I think there is a college loan bubble. I think the rise of the robot implies that there must be greater redistribution (in what I’ve called robo-socialism).

    At the same time I don’t see it as narrowly a youth problem …

    Like or Dislike: Thumb up 0 Thumb down 0

  19. Vast Variety says:

    There is one other option. Export the surplus labor pool to places where they would not be a surplus. Unfortunately the human race is not yet advanced enough technologically or politically to do that.

    Like or Dislike: Thumb up 1 Thumb down 0

  20. James Joyner says:

    @Stormy Dragon:

    What about the “toilet cleaning jobs” that end up being very hard to automate but are unlikely to be anyone’s idea of a hobby? How do we make sure someone still does them?

    As I recall, the answer was some sort of youth conscription. Alternatively, you have to invert the compensation pyramid and pay those sorts of jobs very highly, such that people would do them for a short while in order to live much more luxurious lives thereafter.

    Like or Dislike: Thumb up 1 Thumb down 0

  21. Tillman says:

    @Vast Variety: I always figured that was the theoretical endgame of globalization/free trade: labor moving towards opportune markets wherever they exist on the planet.

    In theory we’d all speak the same language by that point.

    Like or Dislike: Thumb up 2 Thumb down 0

  22. Tyrell says:

    I look for automated service at fast food restaurants in the next three years. The drink servers have been in for years. There goes your $10 – $15 wage that people had been talking about to flip burgers and drop fries.
    While technology will replace some workers, think about this: everyone needs indoor plumbing, electricity, and heat/ac. Everyone calls a repair technician the minute they have a problem. Repairmen are people, not robots, and are highly skilled. I can do some stuff, but I won’t mess with electrical work or the heat pump. Call the professionals. And expect to pay.

    Like or Dislike: Thumb up 1 Thumb down 0

  23. Vast Variety says:

    @Tillman: I would hope that by that point we would also not be limited to just one planet.

    Like or Dislike: Thumb up 0 Thumb down 0

  24. Mikey says:

    @Stormy Dragon:

    What about the talented but lazy who would prefer to goof off like everyone else? Are they forced to work anyways?

    In the future, there will be no “talented but lazy.” Children will be assessed for intelligence and talent at a very young age, and the best and brightest pulled from their families like Spartan boys. They will be the drivers of the productive engines of society. Laziness will be indoctrinated out of them very early on.

    Those who are “less than” brains- and talent-wise will be free to live as they please, their basic needs fulfilled by automation, free to pursue their whims.

    This will result in a two-tiered society, because those doing the driving will make sure they are very well compensated for doing so (maybe not with money, which will become relatively meaningless, but with power and access), but nobody will really care because hunger and want will have been eliminated.

    This could work out pretty well, as long as the “drivers” don’t become Morlocks.

    Like or Dislike: Thumb up 0 Thumb down 3

  25. Mikey says:

    @James Joyner: “I cleaned toilets for five years and now I own my own Caribbean island!”

    Sounds like a fair trade…

    Like or Dislike: Thumb up 4 Thumb down 0

  26. Vast Variety says:

    Isn’t this where we start living like Star Trek?

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  27. ernieyeball says:

    @James Joyner:..the answer was some sort of youth conscription.

    When the Eastern Bloc Communist Nations did this during the Cold War we called it forced labor.

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  28. Gromitt Gunn says:

    @Mikey: Academic hiring is an incredibly arcane process that moves at a snail’s pace. It is not unusual for there to be multiple months between when a position is posted to when they start interviewing, and then several more months until an offer goes out.

    I started looking for my faculty gig around October, 2012, and didn’t get a solid offer until the last week of July, 2013. I was still getting initial phone calls this past fall to see if I wanted to interview for positions that I had applied for seven or eight months earlier, last spring.

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  29. Mikey says:

    @Gromitt Gunn:

    I started looking for my faculty gig around October, 2012, and didn’t get a solid offer until the last week of July, 2013.

    Holy crap. What did you do in the meantime–were you still in grad school?

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  30. mike shupp says:


    Much of this was obvious to even non-specialists like myself two decades ago. But the scale and pace of change has been beyond my expectations. Most notably, the degree to which the new economy is impacting even the very highly educated was something I did not anticipate.”

    Actually, I recall a fair amount of concern back in the 1960′s about the future impacts of “automtion.” What’s laughable, in retrospect, was the general fear that this was lead to some sort of white-collar featherbedding — unemplyment would be low, because that was The American Way, but gigantic corrporations would be filled with hordes of unproductive but well paid middle level managers and administrative workers. No one fifty years ago envisioned outsourcing or corporate downsizing of the magnitude we’ve since seen — that wasn’t the way Capitalism worked.

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  31. wr says:

    @Mikey: “This could work out pretty well, as long as the “drivers” don’t become Morlocks.”

    Could you name one “two-tiered” culture which actually worked out “pretty well” for the people in the lower tier?

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  32. @Mikey:

    Children will be assessed for intelligence and talent at a very young age, and the best and brightest pulled from their families like Spartan boys.

    This could work out pretty well, as long as the “drivers” don’t become Morlocks.

    Even if they just become Spartan boys as you suggest, it might be instructive to look up what happened to the Helots.

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  33. Gromitt Gunn says:

    @Mikey: No. This was a career switch for me. I was working full time for a TX state regulatory agency when I started the hunt and had been teaching part-time at night for a couple of years. So I was lucky in that I was prepared to continue on my existing path if the job hunt didn’t work out for that particular semester.

    I have a professional degree, not a research degree, so the circumstance is a little different in terms of the market. But the hiring process is ridiculous across higher ed.

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  34. C. Clavin says:

    @john personna:

    They discovered in recovery that they could meet growing demand without adding back [domestic] labor.

    Well…actually the problem is that demand has not grown enough to stress their supply of labor.

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  35. Ben Wolf says:

    @James Joyner: The answer to the puzzle is that productivity and employment rise in tandem with the effective demand government took responsibility for creating until the 1970′s. R.A. and some who have commented in this thread go on about what they claim are the big factors while ignoring the fundamental shift from Keynesian to neo-classical economic thinking which occurred right at the time the “puzzle” began.

    They are trying to make the argument our continuing unemployment disaster is the result of technology, that workers aren’t necessary any more because capitalists can meet demand without them (implicitly assuming current effective demand is unavoidable like a law of physics), but that does not add up.

    If technology were the issue we should be seeing enormous productivity gains; instead we see historically weak productivity growth. Nor did we see an explosion of automation which caused ten million people to lose their jobs over a six-month period. If productivity increases joblessness, then why did employment go up alongside productivity for thirty years? Why does productivity slump when more people are out of work? If R.A. or john personna want to cling to the technology explanation then they’re advocating something that, somehow, can’t be seen in the data, can’t be measured and can’t be observed.

    That’s called faith-based economics.

    Like or Dislike: Thumb up 6 Thumb down 1

  36. C. Clavin says:

    @john personna:
    Also…remember that many refused to recognize this as a demand crisis for a long time…as it runs counter to supply-side illogic.

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  37. PJ says:

    @Stormy Dragon:

    What about the talented but lazy who would prefer to goof off like everyone else? Are they forced to work anyways?

    And somehow the talented but lazy are living up to their potentials today?

    I think I bigger issue would be the not so talented who aren’t lazy and would still want a job. Those who aren’t deemed to be good enough to have the kind of job they want.

    What about the “toilet cleaning jobs” that end up being very hard to automate but are unlikely to be anyone’s idea of a hobby? How do we make sure someone still does them?

    Supply and demand. If there’s a demand for people cleaning toilets and there’s short supply of people willing to do that job, then those willing to do it will get better compensated.

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  38. Mikey says:

    @wr: I was being facetious in a sci-fi vein. Hence the Morlocks reference.

    Although a better author than I might actually be able to turn that into something.

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  39. Ben Wolf says:

    @C. Clavin: Some people still can’t get past Say’s Law.

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  40. MikeSJ says:

    Well, my guess is with more and more automation e.g. long haul trucking will be largely automated in our lifetimes, there will be more and more people permanently unemployed.

    At a certain point it won’t be feasable to call them moochers & takers and policy will have to put in place to address thier needs. Government make work – some variation of the WBA/CCC will be a permanent employer of millions…either that or some kind of basic wage everyone gets at 21.

    The 1% are going to get a whole lot richer and the bottom 50% are going to get a whole lot poorer. The middle class will continue to shrink – I’m thinking the USA will look much more like a Latin America society.

    Yep, for most people it’s going to really suck.

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  41. stonetools says:

    Paul Krugman debunks the structural unemployment myth here:

    The urge to declare our unemployment problem “structural” — a supply-side problem of some kind, not solvable by the “simplistic Keynesian” notion of just increasing demand — has been quite something to behold. It’s rapidly entering the category of a zombie idea, which just keeps shambling forward no matter how many times it has been killed.
    Basically, structural stories come in two variants: geography and skills. The geography story says that workers are in the wrong places; the skill story that they lack the right knowhow.
    At this point both stories have been thoroughly debunked. Unemployment is high almost everywhere.

    I’ll be blunt: I think of the structural unemployment myth as just an excuse by conservatives to argue that nothing can be done to reduce unemployment. This is precisely how it is used by conservatives in every discussion about unemployment: “Can’t do anything about unemployment, man-it’s structural.” What about the Keynesian solution of providing financial stimulus? Well, that’s just a “Big Gumint” response, and that’s totally against conservative theology, even though it actually works, unlike conservative nostrums. Krugman elsewhere:

    I’ve been looking at what self-proclaimed experts were saying about unemployment during the Great Depression; it was almost identical to what Very Serious People are saying now. Unemployment cannot be brought down rapidly, declared one 1935 analysis, because the work force is “unadaptable and untrained. It cannot respond to the opportunities which industry may offer.” A few years later, a large defense buildup finally provided a fiscal stimulus adequate to the economy’s needs — and suddenly industry was eager to employ those “unadaptable and untrained” workers.

    Go with Krugman on this. The man is invincible, after all-or at least, his model is.

    Like or Dislike: Thumb up 7 Thumb down 1

  42. Mikey says:

    @stonetools: Man, I don’t know. I mean, sure, industry did suddenly decide to employ all those “unadaptable and untrained” workers, but there was a world war going on, which imposes a level of necessity unattainable in peacetime.

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  43. C. Clavin says:

    @stonetools:

    I’ll be blunt: I think of the structural unemployment myth as just an excuse by conservatives to argue that nothing can be done to reduce unemployment.

    Eggs-zachary.

    Like or Dislike: Thumb up 5 Thumb down 0

  44. PJ says:

    @MikeSJ:

    The 1% are going to get a whole lot richer and the bottom 50% are going to get a whole lot poorer. The middle class will continue to shrink – I’m thinking the USA will look much more like a Latin America society.

    There’s a breaking point, and then things will happen, either through the ballot box or through something involving boxes of bullets.

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  45. grumpy realist says:

    @PJ: I see your toilet cleaners, and raise the pay for airplane pilots at regional airlines.

    Sometimes it just doesn’t work out. People want the service, but aren’t willing to pay for it.

    Like or Dislike: Thumb up 3 Thumb down 0

  46. Stonetools says:

    @Mikey:

    Well, since America likes its wars , how about declaring a “war for broadband supremacy” with the goal of building the best broadband infrastructure everywhere , including to the most distant rural hamlet and the most underserved ghetto neighborhood? What about rebuilding our crumbling roads, bridges and airports? We could call it a “war for infrastructure “. We could invest in green technology, including better batteries for cars, and call it a war against “global warmng”.
    Frankly there’s a lot that can be done if we had the political will and if the Relublicnd would stop blocking everything in the service of a discredited ideology.

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  47. @grumpy realist:

    Airline pilot is probably is going to go away relatively soon anyways. The reality is that commercial planes are already mostly flying themselves, with the flight crew increasingly being just for show because the customers are uncomfortable with the idea of a plane with no one at the controls. Completely unammned cargo planes are currently in the design stage; unmanned passenger aircraft won’t be too far behind.

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  48. john personna says:

    @C. Clavin:

    The data show real personal consumption expenditures well above pre-crash levels.

    That is the “expanded production” that is being achieved with fewer domestic workers.

    You can make supplemental arguments that consumption should be even higher, or that it should show less bias toward high earners, but that is secondary to the first tragedy.

    We have indeed expanded personal consumption even as middle class jobs have gone.

    Consumer Is Again Addicted To Credit

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  49. john personna says:

    @stonetools:

    Explain that for me. When Planet Money follows t-shirt production to Bangladesh, or when they interview workers actually being replaced by robots in US factories … there is an academic argument that “debunks it?”

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  50. ernieyeball says:

    @MikeSJ:..long haul trucking will be largely automated in our lifetimes…

    …and we will call it the Trans-Continental Railroad…

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  51. Mikey says:

    @Stonetools: The key is convincing everyone to pay for all that. Much of Europe does, but they have VATs and those are pretty ugly regressive.

    They seem to accept that, though, because they see a tangible good come from it.

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  52. James Pearce says:

    @James Joyner:

    But there are indications that we’re simply displacing people and not intending to replace them.

    Man, that’s true in my line of work. It’s kept me very busy, this transition to automation.

    Used to be that a movie projector was a mechanical object. There was someone up in the booth, cutting together prints, loading them up on the spindle. Even before then, the film had to be processed, packed, shipped, loaded and unloaded.

    Now it’s a networked machine, programmed by software. There are no prints. There is nothing to splice, to load.

    There is, however, still the need for maintenance, but instead of having a staff of projectionists, a region will have a field tech. Most regions, it’s one guy. One guy keeping all the movie equipment in your state’s theaters working. On the network side, there’s may 12 of us. Serving thousands of screens.

    Those projectionists aren’t coming back. Those film processors. They’re gone. It’s not the horse and buggy being replaced by cars. It’s not cars being replaced by flying cars. It’s just gone.

    Like or Dislike: Thumb up 8 Thumb down 0

  53. michael reynolds says:

    @Ben Wolf:
    How does one count a job that no longer exists? We eliminate entire categories of jobs – jobs that might once have been there to absorb workers displaced in a downturn. Where are those no-longer-existing jobs accounted for? Not a lot of positions open for horse groom or carriage maker, for example. The job is gone and not accounted for. It’s an employment resource we used to have and no longer do. Eliminate enough of these categories of job and we have fewer potential slots to pick up the slack in a downturn. It will be technological unemployment but it won’t show up as such.

    You and I could sit here all day naming these disappeared occupations. And up-thread we see folks naming the next categories of the disappeared. How long do you think we can go on that way before we admit the obvious: we are eliminating more than we are generating. It’s just silly to believe that we can wish groomers and butlers and travel agents back into existence via government spending. We are repatriating manufacturing without creating jobs. How do suppose that’s happening?

    Like or Dislike: Thumb up 6 Thumb down 1

  54. C. Clavin says:

    @john personna:

    You can make supplemental arguments that consumption should be even higher, or that it should show less bias toward high earners, but that is secondary to the first tragedy.

    I disagree. (but I’m not an economist…so that means bubkis.)
    The graph of personal expenditures is historically a straight line upward…but it’s flatter post-recession. I assume that a decreased rate of growth in expenditures is the same as decreased demand.
    http://research.stlouisfed.org/fred2/graph/?id=PCEC96
    Displaced workers will never be replaced absent demand. To believe otherwise is to believe in supply-side economics.
    In addition…and at the risk of sounding like a broken record…replace the 2M net jobs lost from the public sector and the current picture looks completely different.
    We’ve always increased productivity…and we are going to increase it even more…nanotechnology, etc.
    If your version is correct then we are totally f’ed….but we would have been long ago.
    Perhaps we are…I just don’t buy it.

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  55. Ben Wolf says:

    @michael reynolds: There’s not a single thing you wrote that I disagree with. Technology has been vaporizing paid work for a very long time now, centuries in fact. We can go back to England’s industrial revolution and find accounts of workers screaming about jobs lost to machines. But overall the demand for labor more than kept pace with growth of the labor force, at least until the next depression or financial crisis engineered by the banking system.

    That seems to have changed by the late 19th Century when capital had become so efficient more work was being destroyed than created. After the Great Depression government took responsibility for increasing demand by spending until full employment and this worked until we chose to abandon that policy.

    I think you’re correct that technology is a serious problem when government chooses to sit on its hands and that’s exactly what we’ve watched it do. But we don’t have to keep doing nothing. Employers will hire, entrepreneurs will think up new opportunities if the demand for their products is there.

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  56. C. Clavin says:

    @michael reynolds:

    It’s just silly to believe that we can wish groomers and butlers and travel agents back into existence via government spending.

    Put 2 million people on the payroll and tell me how many groomer and butler and travel agent jobs that creates.
    Everyone looks at these incremental changes in trends for consumption or productivity and assigns huge consequences to them…while at the same time completely under-rating the massive swing in the balance of public/private sector jobs over the past 6 years.
    The other under-rated trend is retirement of the baby-boomers.
    http://crr.bc.edu/wp-content/uploads/2014/02/IB_14-4.pdf
    Combine public sector cuts and retirements…and it explains a lot more than technology.
    But I know…you think that’s silly.

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  57. TastyBits says:

    @Ben Wolf:

    That seems to have changed by the late 19th Century when capital had become so efficient more work was being destroyed than created.

    I would suggest that the Captains of Industry had become more efficient at using government to block competition, and they have only increased this efficiency.

    Employers will hire, entrepreneurs will think up new opportunities if the demand for their products is there.

    Unfortunately, the game is rigged. The robber barons use the government’s powers to ensure new opportunities will not arise.

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  58. @michael reynolds:

    And up-thread we see folks naming the next categories of the disappeared.

    Daring prediction: you (popular fiction author) are on my list of “next categories of the disappeared”. There was a piece on NPR this weekend about how publishing is increasingly dominated by authors who spew out largely repetitive romance novels. Seems to me like the sort of thing that could be automated.

    I wouldn’t be surprised if in 10-20 years, most popular fiction is being written by computers that take a basic plot outline and barf out a bunch of randomly generated prose that is then sold under the name of a fictional “Betty Crocker”-style persona.

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  59. ernieyeball says:

    I wouldn’t be surprised if in 10-20 years, most popular fiction is being written by computers that take a basic plot outline and barf out a bunch of randomly generated prose that is then sold under the name of a fictional “Betty Crocker”-style persona.

    Then there is the Infinite Monkey Theorem…
    http://en.wikipedia.org/wiki/Infinite_monkey_theorem

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  60. stonetools says:

    @john personna:

    I heard the Planet Money episode. Those T shirt assembly jobs left these shores a long time ago, and went to Bangladesh from either China or Mexico. The T shirt design job, though stays in the USA. Machines have taken away jobs for centuries-and have created new ones. The job of mobile phone app developer didn’t even exist 20 years ago, for example.
    No, the problem is the collapse in aggregate demand caused by the financial crisis. The Administration responded with an inadequate stimulus, and the people, buffeted by soaring unemployment, did the exact wrong thing and elected Republicans who stupidly imposed an austerity program when they should have responded with more stimulus. The cowardliness of the Obama Administration and the buffoonery of the Republicans are why we are in this stagnant economy, not technology or any “structural” issue. Germany has a lower unemployment rate than we do now-Is that because they have been less affected by technology? Hardly. Its because they had a better designed stimulus and better economic management.

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  61. becca says:

    @James Pearce: tragically beautiful comment there, Pearce.

    Very moving.

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  62. stonetools says:

    @Mikey:

    The key is convincing everyone to pay for all that. Much of Europe does, but they have VATs and those are pretty ugly regressive

    The US government can borrow money at zero per cent, and finance these programs exactly the way they financed WW2-with debt-a debt that will be paid back from the increased tax revenue from an expanding labor force.
    Again, this is not rocket science, but it does to be explained to the public by someone who has that ability. Maybe Obama needs to recruit Bill Clinton again as explainer in chief.

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  63. C. Clavin says:

    @James Pearce:
    OK… But how many programmers are there up- stream?
    And network designers?
    I mean… I could be way off base…but the entertainment industry doesn’t seem to be suffering from lack of growth.

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  64. john personna says:

    @C. Clavin:

    The way to read the chart is first to look at slopes, and then if there is a hit (recession) how the line returns to trend.

    In the charts given the slope to 2007 and the slope from 2010 forward look very similar. If the rate of growth is slightly less, that might be an argument for missing demand.

    Yes, the hit, the gap in growth from 2008 to 2010 is there, but that’s pretty much the definition of a recession.

    No one has figured out how to avoid them. The best arguments, including Krugman on stimulus, are about how to get going again.

    We are going again.

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  65. john personna says:

    @stonetools:

    I gave you the t-shirts and the automation, and you say “but the t-shirts left long ago?”

    That answers neither question, actually. It deflects from both.

    I normally am very sympathetic to Krugman, but this is becoming a “who are you going to believe, me or your lying eyes?” thing.

    We absolutely know that there are structural jobs losses because we can document them, we can see the new materials flows, we can talk to the laid-off.

    The only argument to be made is that structural changes are smaller than cyclical .. but having a lot of things return to trend, that gets harder to make now, in 2014.

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  66. john personna says:

    Has Structural Change Contributed to a Jobless Recovery?

    The current recovery has seen steady growth in output but no corresponding rise in employment. A look at layoff trends and industry job gains and losses in 2001-03 suggests that structural change—the permanent relocation of workers from some industries to others—may help explain the stalled growth in jobs.

    That’s from the Federal Reserve Bank of New York.

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  67. Ben Wolf says:

    @TastyBits: Hey, I didn’t say it would get better, only that it could. Personally I think you’re right and the system is so dysfunctional we’ll have to burn it all down.

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  68. john personna says:

    @C. Clavin:

    Re this:

    If your version is correct then we are totally f’ed….but we would have been long ago.

    Yes, of course. This is a pattern which has been developing across the last few recessions. 2001-2003 (above) being a case in point.

    Returning to our favorite unemployment chart:

    Job losses in post WWII recessions

    In that 1981, 1990, 2001, and 2007 show a nice, neat (and sad) progression to more “jobless” recoveries.

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  69. john personna says:

    @michael reynolds:

    You and I could sit here all day naming these disappeared occupations. And up-thread we see folks naming the next categories of the disappeared. How long do you think we can go on that way before we admit the obvious: we are eliminating more than we are generating. It’s just silly to believe that we can wish groomers and butlers and travel agents back into existence via government spending. We are repatriating manufacturing without creating jobs. How do suppose that’s happening?

    Exactly.

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  70. michael reynolds says:

    @Stormy Dragon:
    Possibly but I doubt it. Formulaic fiction has been around forever. And it’s crap but that doesn’t make it easy. And even within formula you get evolution within the genre. Right now in my are, Young Adult, you have a widening rejection of the dominant dystopian thing with lots of us looking for new paradigms. I feel reasonably secure.

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  71. jukeboxgrad says:

    PJ:

    There’s a breaking point, and then things will happen, either through the ballot box or through something involving boxes of bullets.

    Joseph E. Stiglitz (Nobelist and former Chief Economist of the World Bank) explains the problem:

    Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few [note: he wrote this in 5/11, when the Arab Spring was getting started]. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret. …

    Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.

    The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

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  72. jukeboxgrad says:

    grumpy realist:

    The problem is–people sitting around don’t have (usually) any income sources. Which means they can’t buy anything. The mind-bogging stupidity of companies and countries who decide to charge ahead full speed with automation always gets me. Where do these idiots think that market demand comes FROM?!

    This point was made by Henry Ford:

    I have learned through the years a good deal about wages. I believe in the first place that, all other considerations aside, our own sales depend in a measure upon the wages we pay. If we can distribute high wages, then that money is going to be spent and it will serve to make storekeepers and distributors and manufacturers and workers in other lines more prosperous and their prosperity will be reflected in our sales. Country-wide high wages spell country-wide prosperity…

    Ford understood that ‘spreading the wealth’ around is actually a good idea. If any modern business leader sounded like Ford he would be mocked by Republicans as a Marxist.

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  73. michael reynolds says:

    I don’t think we need to see all of this as necessarily dire. First, the developed world is obviously producing plenty of stuff. Food, power, clothing, housing. If we can do it with fewer folks having to spend 40 years at some miserable grind job I don’t see the tragedy. I’ve done those jobs and honestly had I been given a choice between cleaning toilets and staying home to watch movies or bake cookies I’d have picked the latter. And I’m a workaholic. What we have here is a problem of distribution. Distributing the stuff and the jobs to make the stuff and the profits from making the stuff. That’s not exactly the Black Plague or the Mongol invasion or the Holocaust. This just requires some imagination. This is do-able.

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  74. john personna says:

    @jukeboxgrad:

    Ford’s observation was absolutely critical in its time. Unfortunately ..

    New Factory in Brazil a Model for Ford’s Future, but the UAW Hates It

    DETROIT NEWS–This state-of-the-art manufacturing complex in the northeastern Brazilian state of Bahia is not only the centerpiece of Ford’s Brazilian turnaround plan, it is also one of the most advanced automobile plants in the world. It is more automated than many of Ford’s U.S. factories, and leaner and more flexible than any other Ford facility. It can produce five different vehicle platforms at the same time and on the same line.

    Those are structural changes.

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  75. john personna says:

    @michael reynolds:

    That’s why we got on board with robo-socialism long ago.

    Call it a …

    A basic income (also called basic income guarantee, unconditional basic income, universal basic income, universal demogrant, or citizen’s income) is a proposed system of social security in which citizens or residents of a country regularly receive a sum of money unconditionally, either from a government or some other institution able to ensure an equitable distribution of common wealth. This is distinct from guaranteed minimum income, which may be conditional upon participation in the labor force or other means testing. A basic income of any amount less than the social minimum is sometimes referred to as a ‘partial basic income’.

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  76. jukeboxgrad says:

    RA:

    But this will require subsidies from the state; in the form of wage top-ups, perhaps, or a universal basic income.

    “Universal basic income” is another name for what Milton Friedman proposed: a negative income tax. In 1968 he discussed this with William F. Buckley (link). An idea that today’s GOP would definitely call socialism, but this is what needs to happen.

    wr:

    Could you name one “two-tiered” culture which actually worked out “pretty well” for the people in the lower tier?

    Along with “universal basic income” there needs to be universal education and health care.

    Lots of smart people are born poor. In our current system they grow up with inferior education and inferior health care, and the result is wasted human capital. This impoverishes us all. Yes, a mind really is a terrible thing to waste. Imagine a society where a child born in even the poorest family is provided good education and health care. The cream will rise, and the result is that we are all enriched. This mobility will create a sense of fairness, and “the lower tier” won’t feel so much like a prison.

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  77. michael reynolds says:

    @john personna:
    Of course if our personal robots happened to be attractive that wouldn’t hurt.

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  78. jukeboxgrad says:

    James:

    Utopian novelists in the latter part of the nineteenth century envisioned a world where most work was essentially a hobby, with people doing it for the purpose of self-actualization and stimulation rather than as a necessity for meeting life’s needs.

    This reminds me of what Buckminster Fuller said:

    We should do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian Darwinian theory he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.

    He said that in 1981. As usual, he was ahead of his time, but I think the time is coming for those words of his to be heard.

    Our concepts of such things as ‘work’ and ‘productivity’ are archaic and dysfunctional. They blind us to what is possible. It would be a very different world if ‘work’ meant ‘doing what you love’ instead of ‘doing something you hate because it’s the only way to survive.’ Ultimately the most precious resource is human talent and ingenuity, and so much of that is wasted when people suppress their true calling because they’re afraid of crushing poverty if they fail. When every poor young genius knows we will protect him, we will see a surge of creativity and invention.

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  79. jukeboxgrad says:

    john:

    a proposed system of social security in which citizens or residents of a country regularly receive a sum of money unconditionally

    Reminds me of this:

    The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born. … There is no reason why in a free society government should not assure to all, protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need descend. To enter into such an insurance against extreme misfortune may well be in the interest of all; or it may be felt to be a clear moral duty of all to assist, within the organised community, those who cannot help themselves. So long as such a uniform minimum income is provided outside the market to all those who, for any reason, are unable to earn in the market an adequate maintenance, this need not lead to a restriction of freedom, or conflict with the Rule of Law. … Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong.

    Those words are from Hayek, one of Paul Ryan’s heros.

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  80. john personna says:

    @michael reynolds:

    As soon as robots look like Fabio the species dies out.

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  81. jukeboxgrad says:

    Michael:

    if our personal robots happened to be attractive

    Link:

    The film centers on a man who develops a relationship with an intelligent computer operating system (OS) with a female voice and personality.

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  82. john personna says:

    @jukeboxgrad:

    There are some strange early thoughts and recurring themes in all this.

    I suppose it goes back to the Luddites, and what economists have derided as the Luddite Falacy.

    Economist Alex Tabarrok’s summary of the concept states that “[if] the Luddite fallacy were true we would all be out of work because productivity has been increasing for two centuries”.

    I think my answer to Tabarrok might be that two centuries was possibly too small a sample!

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  83. john personna says:

    @jukeboxgrad:

    Surely there was a precursor ….

    Like or Dislike: Thumb up 2 Thumb down 0

  84. jukeboxgrad says:

    Surely there was a precursor

    That’s funny. I guess it’s hard to think of something new.

    the Luddite Fallacy

    I think the emphasis on technology in a discussion like this is kind of a red herring. There will always be things that humans can do well that machines will never do well, and I don’t mean cleaning toilets. I mean things like teaching a child how to sing, or comforting the ill, or counseling a couple in a troubled relationship, or designing a campaign to convince people to eat healthy foods. This group could probably think of a hundred other examples.

    The problem is that we generally choose to distribute little or no income to the people who do these things. Krugman recently mentioned how “40 hedge fund guys made as much as 300,000, that’s three hundred thousand, school teachers — almost a third of all high school teachers in America.”

    Distribution of income is not divinely ordained. The result we have is simply a choice we make as a group, and the choice reflects what we value. We could choose different values, and we should, because our current values are messed up.

    America is a highly religious country, and the real religion is money. We worship money and we worship people who worship money. The parable of the businessman and the fisherman (link) is about how we have forgotten what matters. The problem is spiritual.

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  85. Jc says:

    Why do we continue to compare this most recent recession with those from the past 3 decades? It is/was not like those. Over 25% of mortgages have 20% or more in negative equity and who knows how many between 0-20%. And we talk about technology and productivity gains? Also those young new homebuyers have college debt, making it difficult to buy a new home. I don’t believe these were issues in the 70′s or 80′s

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  86. James Pearce says:

    @C. Clavin:

    OK… But how many programmers are there up- stream?
    And network designers?

    Not that many, to be honest. Every piece of equipment from each company has their own programmers and own designers, and those teams will vary in size depending on the company. But we’re talking about Sony hiring a couple more engineers and programmers to their team versus eliminating an entire job category.

    And it gets worse. If some intrepid Hollywood studio decides to bypass the traditional distribution model, movie theaters themselves are in danger of going out of business. Movies are only released to theaters for one reason: That’s how they make the most money.

    It’s only a matter of time before someone figures out how to make “the most money” via an alternate distribution channel. And when that happens…multiplexes are gonna close.

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  87. bill says:

    @C. Clavin: the workers voted it down, they aren’t all stupid laborers i guess? and joe the plummer has no choice but to join the union if he wants to work there. the uaw is not a gov’t. workers union (who can vote for their bosses) so who really cares? the uaw membership is in decline due to the US auto industry being there as well.

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  88. john personna says:

    @jukeboxgrad:

    Well, ultimately the problem with the Luddite Fallacy is that it does rely on a gulf between humans and machines. The wider the gap, the bigger the “fallacy.”

    Interestingly, development economists are all about the driverless cars right now. That because they see it as an attainable technology, and one which will drive “productivity” as they measure it. Of course that it will wipe out millions of “skilled but repetitive” jobs …

    The smaller the gap, the less the “fallacy.”

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  89. stonetools says:

    @john personna:

    That’s from the Federal Reserve Bank of New York

    On the Internet, you can find a paper to support almost any position. The issue is whether the current unemployment is mostly or entirely cyclical, or mostly or entirely structural. The consensus among economists overwhelmibngly favors the former position.
    Don’t like Krugman on this ? How about Mark Thoma? He thinks that the current unemployment problem is partly structural. He doesn’t think it ends the discussion of whether the government can help, which is what the conservatives (and you, apparently) conclude.He argues:

    I don’t think this debate can be answered by moving close to the polar extremes and declaring it’s mainly a structural or cyclical problem. For me, it seems obvious that part of the problem is structural. The real question is how large the structural component is and what can be done about it. But no matter how large it is — take a very liberal estimate of the size — I don’t think there’s any way to deny that there is a substantial cyclical component on top of it that demands government action. It’s true that the size of the government action to offset the the cyclical downturn should be connected to the size of the cyclical unemployment problem, but the problem is big enough that politicians won’t come anywhere near to overdoing it. The most optimistic view of what Congress might do would still leave them short of what is needed. We don’t know the exact structural-cyclical breakdown, but the cyclical problem is certainly larger than any imaginable Congressional response. So the excuse for inaction based upon the “it’s all structural” claim isn’t persuasive.

    He goes on to argue that government has to a role to play even if the current unemployment is mostly structural.

    First, even if the problem is mostly structural, the government can still provide people with jobs to bridge the gap until the structural changes are complete. To me, this is better than simply extending unemployment compensation since it allows individuals to contribute something (e.g. work on a project the local community needs). And by giving people jobs, or at least government aid through unemployment compensation, we increase aggregate demand and the that helps firms to do better and speeds the transition.

    Second, government can ease the structural problem by making it easier for businesses and individuals to relocate.

    This is of course not what the structuralists want to hear. They want to hear that the government should do nothing, and this is what they say. It’s why I think Dr. K takes the position that they can be no compromise on this issue-it just gives the conservatives cover for do-nothingism.

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  90. john personna says:

    @stonetools:

    The issue is whether the current unemployment is mostly or entirely cyclical, or mostly or entirely structural. The consensus among economists overwhelmibngly favors the former position.

    You make me stumble when you say things that I know are false.

    The reality is absolutely that we have a mix of cyclical and structural.

    But we have two schools of economists (divided pretty evenly) who want to emphasize one or the other.

    Basically you lost this argument when you want whole-hearted for the “all cyclical” framing. Note that I never did the reverse. I never took the extreme position that the recession was all structural, nor that stimulus was not required in extremis.

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  91. john personna says:

    @stonetools:

    Jesus Christ. First you maintain:

    The issue is whether the current unemployment is mostly or entirely cyclical, or mostly or entirely structural. The consensus among economists overwhelmibngly favors the former position.

    And then you quote Thoma, who supports my position:

    For me, it seems obvious that part of the problem is structural.

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  92. john personna says:

    @stonetools:

    Just so you remember, your initial claim was this:

    Paul Krugman debunks the structural unemployment myth here

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  93. stonetools says:

    Well, Krugman does think that that the current unemployment is mostly or entirely cyclical. I don’t think Thoma supports the conservative position that the current unemployment rate is mostly structural. He thinks it is mostly cyclical and so he is much closer to Krugman.He especially agrees that the government should be doing much more to lower unemployment, including fiscal stimulus. AFAICT, you think the current unemployment is mostly structural, and that there is little to be done about it, so I think you and Thoma are far apart, especially on policy prescriptions. If I am mistaken about that, please elucidate your policy prescriptions.

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  94. john personna says:

    @stonetools:

    I think that our main source of disagreement is actually that you presume a policy binding, that anyone who sees structural unemployment must hate poor people.

    But … I came out for robo-socialism, and a minimum income in my very first comment, didn’t I?

    The way I see it, is that if structural unemployment is real, then the way you help poor people has to change.

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  95. john personna says:

    I mention Ford’s Camaçari plant above. I think it’s important to watch this video, looking at the human jobs carefully. Basically at this point humans “fill the gaps” in the machine.

    We aren’t that far from The Miraculous Machine.

    And when we get there, no amount of stimulus will make jobs.

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  96. stonetools says:

    @john personna:

    We aren’t that far from The Miraculous Machine.

    And when we get there, no amount of stimulus will make jobs

    But we are not at this point now, n’est- ce pas?

    And won’t be there for quite a few years. Until then, boosting employment through fiscal stimulus should be the right thing to do. Doing nothing is certainly the worst approach,which is what most conservatives are advocating, because nothing can be done with structural unemploynment.

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  97. john personna says:

    @stonetools:

    But we are not at this point now, n’est- ce pas?

    Two things, the twin drivers on structural unemployment are globalization and automation.

    (1) that cartoon is really about the globalization bit, which is in full swing, and

    (2) we are certainly halfway there. the labor-hours in a car or any other manufactured good has been falling for two centuries. That’s what the economists call “productivity.”

    Now I note above that you give credence to the macroeconomic idea that if job “a” goes away, “demand” will just create new job “b” … but again, who are we going to believe, economic theory or our lying eyes?

    We are increasingly a Flappy Bird economy.

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  98. john personna says:

    Very related:

    Technological Progress Isn’t GDP Growth by Matthew Yglesias

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  99. michael reynolds says:

    This issue does not lead to an either/or in my opinion. Unemployment can be cyclical or structural do a degree. 30/70 or 50/50 or whatever. It’s likely to be some combination of both for the foreseeable future, so we need ways to cope with both. We need to keep as many people employed as we can even as we transition to a world where large percentages of the population won’t have jobs. There’s no contradiction there.

    What we do need is to talk about ways to accomplish that. We can shorten the work week and add some redistributive topping off. We can raise the EITC. We can look at minimum family income.

    I don’t believe in economic modeling, so I prefer a common sense, moderate path of adjustment based on some underlying oral assumptions. One, that work is a privilege and with that privilege comes responsibility to assist the less fortunate. Two that any full-time job faithfully carried out must pay enough to maintain a reasonable life. Three that all citizens have a right to education and health care. Four that while economic disparities should be reduced they should not be eliminated – I want to incentivize the clever and the productive, there should still be a substantial potential upside to enterprise.

    We should also begin changing how we feel at an emotional level about some things. The proper emotional reaction to an unemployed person should not be contempt but sympathy. The emotional response to having a job should not be self-pity but joy. The response to one’s own success should be gratitude to a larger society that made it possible, not a miserly obsession with keeping it all.

    I’m privileged to have my job. I give up 50% of my income to taxes. I don’t enjoy that, but I don’t resent it, either, insofar as it is used to help people who don’t have enough. I want my fellow Americans to have health care, a home, clothing, food. I don’t feel the need to buy them a Benz, but I want them to live decent lives.

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  100. anjin-san says:

    It was Jesus who said “Blessed are the job creators, for they shall own the earth” – he also wanted poor people to get off their lazy butts. This is not in dispute, at least by people who love America.

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  101. anjin-san says:

    I once asked an old boss, a guy who started with nothing and created hundreds of jobs, becoming wealthy in the process, if he though health care was a right. His response was, “In a society as wealthy as ours? Absolutely”

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  102. stonetools says:

    @john personna:

    Pretty sure that if you asked Yglesias he would tell you that he thinks the current unemployment is mostly cyclical and he would be prescribing fiscal stimulus to get the economy moving again. His prescriptions:

    So what can we do? I see three highly desirable policy steps:

    1. We should aim for a long-term inflation rate of four or even five percent so that the Federal Reserve is much less likely to hit the “zero bound” and lose confidence in its own ability to shape the economy-wide demand picture.
    2. We should make specific statutory provision for Fed injection of “helicopter money” into the economy. The metaphysics of fiscal vs monetary policy are less important than the fact that the Fed has the right institutional setup to conduct a joint fiscal-monetary action when needed. A Fed that can order money-financed payroll tax cuts that have zero impact on the deficit is never going to “run out of ammunition” in the war on demand shortfalls.
    3. We should beef up automatic stabilizers in the budget by creating some kind of national rainy day fund that automatically releases unrestricted funds to state governments in times of recession. Some elected officials will use the money to avoid pro-cyclical service cuts and furloughs, while others will use it to finance tax cuts and we’ll just live with disagreement about the best way to proceed.

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  103. stonetools says:

    @michael reynolds:

    The problem here is that you and john persona think the current Republicans are better than they really are. They aren’t going to go along with any “robosocialism” , minimum guaranteed income, or any such pinko hippy nonsense. No, they are going to blame the poors, the browns, and blacks for their high unempolyment, stigmatize them as shiftless moochers and in general cr@p on them whenever they can , all the while playing on the fears of older whites that “those people” are going to take away “their”money and “their” America.
    So far this has worked out great for them electorally,and I expect them to keep doing this.

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  104. john personna says:

    @stonetools:

    The problem here is that you and john persona think the current Republicans are better than they really are.

    That’s just a lack of critical thinking, or worse, a voluntary logical fallacy.

    The existence of structural change and unemployment is a fact in the world.

    If you say “I can’t see this fact, because it might strengthen this policy prescription” … you are yielding to irrationality.

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  105. john personna says:

    Seriously, I do like Krugman, especially for his analysis on the fall side of recessions … but if he has built this binding that “liberals must believe in cyclical unemployment” and “only Republicans see structural change” he has done no one any favors.

    But I’m getting that binding very strongly in this thread.

    “We can’t believe in structural unemployment, because that’s what Republicans believe in.”

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  106. Moosebreath says:

    @john personna:

    “If you say “I can’t see this fact, because it might strengthen this policy prescription” … you are yielding to irrationality.”

    So, how do you explain Republican refusal to acknowledge that global warming is occurring, if not by irrationality? Or their frequent claim that we have the greatest health care system in the world?

    And if you do acknowledge that they are irrational in some areas of public policy, why not here?

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  107. john personna says:

    @Moosebreath:

    Are seriously asking me a “both sides do it” question?

    What I am saying is that we can make honest observations of the US economy, and then discuss appropriate responses.

    Just because some observers want to stack the deck with respect to cyclical/structural doesn’t mean we should.

    It certainly doesn’t make that the higher ground.

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  108. john personna says:

    @Moosebreath:

    You are thinking like a Republican presented with an environmental problem … since the liberals believe in it, it can’t possibly be true.

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  109. Moosebreath says:

    @john personna:

    “You are thinking like a Republican presented with an environmental problem … since the liberals believe in it, it can’t possibly be true.”

    Umm, no. Remember, I was commenting upon your response to stonetools. When he said your prescription for the future requires the Republicans not to demagogue it, your responded that it was a lack of critical thinking.

    To my mind, critical thinking includes taking note of how the other side acts and basing your plans on their past actions. It means that if Republicans have a history of ignoring the real world to advocate for their preferred solutions on other topics, one should assume there is a non-zero chance that they will do it again on this topic.

    If you want to stand on the “higher ground” of assuming the best of your opponents when they have repeatedly shown that it is not a fair assumption to make, be my guest. Just don’t expect the rest of us to follow along with you.

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  110. stonetools says:

    @john personna:

    “We can’t believe in structural unemployment, because that’s what Republicans believe in.”

    Sorry, wrong. Liberals can certainly believe there is a structural component to the current unemployment (Mark Thoma does). Thoma then goes on to make specific prescriptions as to how government can help to reduce or palliate structural unemployment, and that’s all good, so far as it goes.
    What am I pointing out is that Republicans say they believe in structural unemployment AND THEN USE IT AS AN EXCUSE TO DO NOTHING.
    That’s my problem with the structural unemployment diagnosis by so many conservatives. The whole “this is structural unemployment” dovetails nicely with their ” There’s no need for fiscal stimulus,or doing anything to help reduce unemployment, because government can do nothing to help ” program.

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  111. john personna says:

    @Moosebreath:

    I think you need to roll back. I am talking, as I’ve repeated, about an observation of fact.

    You won’t actually find any place above where I said those facts implied Republican answers, or certainly not anywhere above where I endorsed Republican responses.

    And yet ..

    The problem here is that you and john persona think the current Republicans are better than they really are.

    Where the heck did that come from, if not from an idea that if we accept the fact we empower those darn Republicans?

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  112. john personna says:

    @stonetools:

    What am I pointing out is that Republicans say they believe in structural unemployment AND THEN USE IT AS AN EXCUSE TO DO NOTHING.
    That’s my problem with the structural unemplyment diagnosis by so many conservatives.

    There’s what I’m saying in a nutshell.

    You worry that by accepting a fact, you empower the opposition.

    Yes, this is irrational and logical fallacy.

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  113. john personna says:

    tl;dr – this is deep dysfunction, “I can’t believe in structural unemployment, because it might help Republicans.”

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  114. Andre Kenji says:

    1-) Countries like Germany and Singapore have a relatively low unemployment rate because they have apprenticeship programs and a high skilled workforce. That´s where the discussion should be going.

    Besides that, let´s be sincere, high school(Where many countries begin to train their workforce) in the United States is a complete joke. I remember seeing the annotations from a school acquaintance that studied there, at the time I found that to be completely ridiculous.

    High school is a not ONLY sport.

    2-) The problem in the United States is not unemployment, it´s underemployment. If there were job protections similar to the ones in Latin America and Europe we would be talking about a two digits unemployment rate.

    And I think that exchanging unemployment with underemployment is a lousy deal..

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  115. stonetools says:

    @john personna:

    I believe that the current unemployment is mostly (Thoma) or entirely (Krugman) cyclical. You apparently believe its mostly structural, and think this is obvious. Well, it’s not obvious to me or most economists. So far you have cited a few anecdotes and haven’t come to grips with Krugmans observation that there is high unemployment throughout all sectors of the economy and in most areas.
    So I don’t think its a “fact” that the current unemployment is mostly structural. Sorry.

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  116. Moosebreath says:

    @john personna:

    “The problem here is that you and john persona think the current Republicans are better than they really are.

    Where the heck did that come from, if not from an idea that if we accept the fact we empower those darn Republicans?”

    Please learn reading comprehension. It is a critical skill which you seem unable to apply to this discussion.

    Neither stonetools nor I are saying we should not accept actual facts. If the facts pointed to a different solution, I would not say we need to shut our eyes to the actual facts (and I strongly doubt stonetools believes that, either).

    On the other hand, you seem to be shutting your eyes to facts about the current generation of Republicans, and how they have repeatedly denied the existence of facts in situations like this to defeat policy prescriptions that they do not like. If you believe they will not do that here, then you are simply naive. If you believe they will do it, but it will not be effective, then I would ask how our carbon reduction policies are working out.

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  117. john personna says:

    @Moosebreath:

    Who has reading comprehension?

    “The problem here is that you and john persona think the current Republicans are better than they really are.”

    Show me EXACTLY where I thought “Republicans are better than they really are.”

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  118. john personna says:

    @stonetools:

    Well, it’s not obvious to me or most economists.

    You know, I can point you to surveys which do say 97% of scientists believe in AGW.

    Do you have data to back up your claim?

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  119. stonetools says:

    @Andre Kenji:

    Countries like Germany

    Speaking of Germany, unemployment there is 5.1 per cent. Apparently, they haven’t heard of this “end of work” stuff and have in place programs that maintain hifh employment. Maybe we should take a look at what they’re doing, before we sucumb to counsels of despair.

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  120. john personna says:

    @stonetools:

    BTW, this isn’t exactly true, though on this I could see how you would be confused:

    You apparently believe its mostly structural, and think this is obvious.

    My opinion is that structural changes started long ago, quite possibly in the 80′s, but that business cycles are overlaid on that.

    That there was an ongoing “hollowing” did not cause nor prevent the crash of 2007.

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  121. john personna says:

    @stonetools:

    If everyone could be Germany, they would. Germany benefits from being an export economy though, a net exporter.

    Can everyone be a net exporter?

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  122. john personna says:

    List of countries by net exports

    Surplus in Billion US-Dollar <- Germany, top of the page

    Deficit in Billion US-Dollar <- United States of America, top of the page

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  123. Moosebreath says:

    @john personna:

    “Show me EXACTLY where I thought “Republicans are better than they really are.”

    You are taking the position that if the underlying economic situation supports robo-socialism and a minimum income for humans, then Republicans will not demagogue such policies, or at the least, that such policies will pass in spite of their demagoguery. Again, how are the policies to combat global warming working?

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  124. stonetools says:

    @john personna:

    I have cited several economists who say that unnemployment is cyclical or mostly cyclical. Who are your authorities?

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  125. john personna says:

    @Moosebreath:

    You are taking the position that if the underlying economic situation supports robo-socialism and a minimum income for humans, then Republicans will not demagogue such policies, or at the least, that such policies will pass in spite of their demagoguery.

    I certainly never made that claim. You made that up.

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  126. Moosebreath says:

    @john personna:

    “If everyone could be Germany, they would. Germany benefits from being an export economy though, a net exporter.”

    Do you believe that Germany was ordained to be a net exporter, or that it’s policies enabled it to be one? If the latter, what do you believe would happen if we attempted to implement the same policies here?

    “Can everyone be a net exporter?”

    Everyone who takes the same policies, probably over time, though the effect would grow smaller as more countries adopted the policies.

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  127. john personna says:

    @stonetools:

    The plural of anecdote is not data.

    [and note that I've never made the same sort of claim, that "most" economists believe one way or another. I've said they disagree.]

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  128. stonetools says:

    @john personna:

    Can everyone be a net exporter?

    Dunno if there is a link between Germany being a net exporter and its unemployment rate. Do know that a high-tech economy like Germany should be experiencing a lot of “structural unemplyment” since technology is abolishing all the jobs. Care to explain why that isn’t happening?

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  129. john personna says:

    @Moosebreath:

    The key to my question is “can everyone be a net exporter” and the answer is no. That is math. The total net import-export for all countries must be zero. If some are positive, some must be negative.

    Now, on how Germany got there, it goes way back. They were an industrial innovator in the 19th century. Social innovators too, health insurance, and etc.

    I agree that we can learn (more) from them, but I don’t think they somehow prove that everyone can turn the same trick.

    Germany has unique advantages, including currently how they game the Eurozone.

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  130. john personna says:

    @stonetools:

    Do know that a high-tech economy like Germany should be experiencing a lot of “structural unemplyment” since technology is abolishing all the jobs. Care to explain why that isn’t happening?

    I don’t think that’s a real good question. The world’s number one exporter has a lot of work to do, and even with a lot of robots, they need a lot of bodies.

    Robots, China and demographics

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  131. stonetools says:

    @john personna:

    A new survey of 250 economists in the business community by the National Association for Business Economics released on Monday revealed their strong support for increasing fiscal stimulus in the short term and taking a balanced approach to deficit reduction (including revenue increases as well as spending cuts) over the long term. This agreement among business economists stands in direct contrast to many conservative lawmakers in Washington, who increasingly favor spending cuts in the short term and actually decreasing taxes over the long term.

    Of the economists surveyed, 67 percent favored maintaining or even increasing the current level of fiscal stimulus in 2013.

    Economists that favor stimulus by extension believe that current unemployment is cyclical, and reject the idea that the current rate of unemployment is mostly structural, and is the result of technological change.

    Your move.

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  132. john personna says:

    @stonetools:

    You said above:

    I have cited several economists who say that unnemployment is cyclical or mostly cyclical.

    You may believe that “supports stimulus” implies “mostly cyclical” but it isn’t really as good as a direct poll on the subject.

    And … this is neither 2012 nor 2013. (Your “new” survey being dated September 26, 2012)

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  133. Moosebreath says:

    @john personna:

    “I certainly never made that claim. You made that up.”

    No, I’m not. Please re-read your comments. Whenever either stonetools or I have made that point, you’ve accused us of fallacious reasoning. Unless you are conceding that your reasoning is also fallacious, then it follows that you believe the point is false.

    Like or Dislike: Thumb up 1 Thumb down 1

  134. john personna says:

    BTW, here’s what I wrote in these pages, in 2012:

    Back on-topic, if you believe that there is good infrastructure, and you believe in counter-cyclical spending, then you WILL try to build out in slow times, rather than fast.

    When you build in fast time you DO crowd-out, and compete with private initiatives.

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  135. john personna says:

    @Moosebreath:

    That was a cop-out. If you had a quote you’d share it.

    The fact is, I never said antying remotely like:

    Republicans will not demagogue such policies, or at the least, that such policies will pass in spite of their demagoguery.

    I made no claims about the politics of a basic income. I only shared that it is becoming popular in discussion.

    And it is.

    Rethinking the Idea of a Basic Income for All (December 10, 2013, Bruce Bartlett)

    Like or Dislike: Thumb up 0 Thumb down 0

  136. grumpy realist says:

    A lot of this reminds me of Japan. As one of my friends said, the fantastic aspect about Japan’s networks of little shops and distribution systems is that you could go into any Mom-and-Pop grocery store in Japan and find a little can of Kraft Parmesan cheese. The other part of the equation was that it it cost 500 yen. Japan for the longest time didn’t mind the trade-off in inefficiency. Sure, they could put together different distribution systems, but the way it worked, there were a lot of Mom-and-Pop stores everywhere with people carrying out what was fruitful work.

    Maybe we do need some for inefficiency in the system. As it is, it looks like more and more inefficiency is getting squeezed out, but the increase in profits is going only to the top people. The support of people who have been chucked out of the system? That’s considered “someone else’s problem.”

    Unfortunately, you can do this only so far…and then you get revolutions.

    Like or Dislike: Thumb up 3 Thumb down 0

  137. stonetools says:

    @john personna:

    I don’t think that’s a real good question. The world’s number one exporter

    I think it’s a good question, and worthy of a better answer than Germany exports a lot. What’s clear is that Germany doesn’t fit the paradigm that a high tech economy is necessarily high unemployment because technology abolishes jobs.

    You may believe that “supports stimulus” implies “mostly cyclical” but it isn’t really as good as a direct poll on the subject.

    That may be but it’s a lot better than your ipse dixit that there are a lot of economists out there who believe that current unemployment is mainly or entirely structural.I know that there are right wing pundits , politicians and assorted Very Serious People who argue this, but apparently not that many economists.

    And … this is neither 2012 nor 2013. (Your “new” survey being dated September 26, 2012)

    Seriously, dude? Late 2012 is pretty damned recent. Now if you are aware of a more recent survey showing that the consensus is moving toward the structuralist explanation, feel free to POST A LINK. If you don’t, I’ll just believe my lying eyes.

    Like or Dislike: Thumb up 2 Thumb down 0

  138. Moosebreath says:

    @john personna:

    So when you said, “You are thinking like a Republican presented with an environmental problem … since the liberals believe in it, it can’t possibly be true.”

    in response to my initial comment on this thread, which read, “So, how do you explain Republican refusal to acknowledge that global warming is occurring, if not by irrationality? Or their frequent claim that we have the greatest health care system in the world?

    And if you do acknowledge that they are irrational in some areas of public policy, why not here?”

    what you really meant was that you had no comment on the politics of it.

    Please tell me in what language that is a reasonable interpretation, because it sure ain’t in English.

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  139. Andre Kenji says:

    @stonetools: Germany has a low unemployment rate because they understand that they need to be competitive with countries with lower wages. They invest in technology, precisely because that allows them to be competitive.

    They also have a strong apprenticeship program(Meaning that students learn a job in a factory instead of playing football), all countries with strong traditions in apprenticeship have low unemployment rate.

    In the United States, the only thing that people talks about increasing productivity are limiting unions and killing the minimum wage.

    Like or Dislike: Thumb up 1 Thumb down 0

  140. Mikey says:

    My daughter put this up on Facebook. It seems…appropriate. ;)

    http://imgur.com/nFJk4fs

    Like or Dislike: Thumb up 1 Thumb down 0

  141. jukeboxgrad says:

    Michael:

    … while economic disparities should be reduced they should not be eliminated – I want to incentivize the clever and the productive, there should still be a substantial potential upside to enterprise

    This is an important point that’s good to say even though it should go without saying.

    The term ‘income inequality’ is unfortunate because it tends to imply something that isn’t true: that the person mentioning the problem is trying to completely eliminate ‘income inequality’ and replace it with complete income equality. The term invites conservatives to hide behind a straw-man argument that goes like this: ‘stupid liberals are trying to eliminate income inequality because they don’t understand that it’s a necessary and inevitable aspect of human existence.’ Yes, it is, and we never claimed otherwise. The problem is not ‘income inequality.’ The problem is extreme income inequality, which is what we have.

    There’s a related point I want to mention because I think it’s important and it’s rarely discussed. Extreme income inequality leads to waste.

    A lot of bad policy reflects our poor understanding of human nature and the psychology of money. Our experience of wealth or poverty is highly positional, rather than absolute. Money is a positional good; it’s about status in the pack. Robert Frank has discussed this (link):

    When asked whether they’d rather have a 4,000-square-foot house in a neighborhood of 6,000-square-foot McMansions, or a 3,000-square-foot home in a zone of 2,000-square-foot bungalows, most people opt to lord it over their neighbors.

    You’ve heard of ‘conspicuous consumption,’ right? Humans are primates, and deeply concerned about status. A lot of consumption, especially among the rich, is purely symbolic, and not utilitarian. If my social status requires me to own 5 or 10 houses that I mostly never use, that is ultimately a form of waste (even though people are employed taking care of those houses; they might as well be employed digging and filling holes).

    Also read what Robert Frank says about Darwin and antlers (link). When rich people buy a bunch of extra houses they hardly use, that’s just like those big antlers.

    What this also tells us is that big differences in income are not necessary to motivate people to be productive. When those differences are excessive, they just create waste.

    Frank has also made this related observation:

    The counties with the biggest increases in inequality also reported the largest increases in divorce rates.

    Our tax policy is messed up because we don’t understand the evolutionary relationship between sex and money. A certain amount of income (and wealth) inequality is functional, but when it becomes extreme the result is extreme waste, and a society that cannot be competitive.

    Conservatives often present an argument something like this: ‘we don’t need to worry too much about the so-called poor, because they have iPods and indoor plumbing and are living better than the King of France did 300 years ago.’ That argument reflects a failure to understand that our experience of wealth or poverty is positional, and we compare ourselves to the people around us, not people who lived 300 years ago.

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  142. jukeboxgrad says:

    Michael:

    … while economic disparities should be reduced they should not be eliminated – I want to incentivize the clever and the productive, there should still be a substantial potential upside to enterprise

    This is an important point that’s good to say even though it should go without saying.

    The term ‘income inequality’ is unfortunate because it tends to imply something that isn’t true: that the person mentioning the problem is trying to completely eliminate ‘income inequality’ and replace it with complete income equality. The term invites conservatives to hide behind a straw-man argument that goes like this: ‘stupid liberals are trying to eliminate income inequality because they don’t understand that it’s a necessary and inevitable aspect of human existence.’ Yes, it is, and we never claimed otherwise. The problem is not ‘income inequality.’ The problem is extreme income inequality, which is what we have.

    There’s a related point I want to mention because I think it’s important and it’s rarely discussed. Extreme income inequality leads to waste.

    A lot of bad policy reflects our poor understanding of human nature and the psychology of money. Our experience of wealth or poverty is highly positional, rather than absolute. Money is a positional good; it’s about status in the pack. Robert Frank has discussed this (link):

    When asked whether they’d rather have a 4,000-square-foot house in a neighborhood of 6,000-square-foot McMansions, or a 3,000-square-foot home in a zone of 2,000-square-foot bungalows, most people opt to lord it over their neighbors.

    You’ve heard of ‘conspicuous consumption,’ right? Humans are primates, and deeply concerned about status. A lot of consumption, especially among the rich, is purely symbolic, and not utilitarian. If my social status requires me to own 5 or 10 houses that I mostly never use, that is ultimately a form of waste (even though people are employed taking care of those houses; they might as well be employed digging and filling holes).

    Also read what Robert Frank says about Darwin and antlers (link). When rich people buy a bunch of extra houses they hardly use, that’s just like those big antlers.

    What this also tells us is that big differences in income are not necessary to motivate people to be productive. When those differences are excessive, they just create waste.

    Frank has also made this related observation:

    The counties with the biggest increases in inequality also reported the largest increases in divorce rates.

    Our tax policy is messed up because we don’t understand the evolutionary relationship between sex and money. A certain amount of income (and wealth) inequality is functional, but when it becomes extreme the result is extreme waste, and a society that cannot be competitive.

    Conservatives often present an argument something like this: ‘we don’t need to worry too much about the so-called poor, because they have iPods and indoor plumbing and are living better than the King of France did 300 years ago.’ That argument reflects a failure to understand that our experience of wealth or poverty is positional, and we compare ourselves to the people around us, not people who lived 300 years ago.

    Like or Dislike: Thumb up 0 Thumb down 0

  143. jukeboxgrad says:

    More about Frank: link, link.

    Like or Dislike: Thumb up 0 Thumb down 0

  144. ernieyeball says:

    @Mikey:..as we all get replaced by giant robots..

    Cute…Of course someone will have to design and build the robots that will design and build the robots that will design and build the robots.
    She can come to Sleepytown U and get a Bachelor of Science degree in Industrial Technology.

    Our program is one of the longest-accredited programs in the U.S. by the Assciation of Technology, Management, and Applied Engineering (ATMAE).
    Students will be well trained in the high-demand technical and managerial areas of:
    Six Sigma, Lean manufacturing, Quality contol, Computer-aided manufacturing, Industrial robotics, Manufacturing processes, Industrial safety, Facilities planning,
    Cost estimating, Personnel supervision

    http://engineering.siu.edu/tech/undergraduate/industrial-technology/index.php

    Like or Dislike: Thumb up 0 Thumb down 0

  145. Mikey says:

    @ernieyeball: She could work there–they have an open faculty position for a Ph.D. biochemist. But they want a researcher and she wants to teach exclusively.

    Like or Dislike: Thumb up 0 Thumb down 0

  146. Mikey says:

    @jukeboxgrad: You might find this interesting:

    91% of Republicans – and 93% of Democrats – Think We Have Too Much Inequality

    A recent poll by leading behavioral scientist Dan Ariely of Duke University found that, in the abstract, 91% of Republicans favored Swedish levels of inequality instead of higher American levels … and the results for Democrats were virtually identical at 93%

    I didn’t listen to the podcast–it’s 45 minutes long–but the abstract looks interesting.

    Like or Dislike: Thumb up 2 Thumb down 0

  147. john personna says:

    @stonetools:

    When I document that Germany is #1 on exports, and the USA is dead last, I have given you a darn good answer, and one better than simply “exports a lot.”

    @Moosebreath:

    Now you are just trying to drag the conversation into the weeds. And you know what, I won’t follow you there.

    My starting argument, only that structural unemployment exists, and not that it is the only thing going on, stands.

    And as Michael, who you all love to up-vote says:

    Robot socialism is coming, like it or not. Libertarians and assorted other conservatives hate it, of course, but they can’t really offer a coherent argument that goes beyond: it’s never happened before.

    Feel free to deal with the cognitive dissonance of down-voting this and up-voting that.

    Like or Dislike: Thumb up 0 Thumb down 0

  148. jukeboxgrad says:

    Mikey:

    You might find this interesting

    Thank you, this is something interesting and relevant.

    I didn’t listen to the podcast–it’s 45 minutes long … A recent poll by leading behavioral scientist Dan Ariely

    For something much quicker than the podcast, see here. That excellent six-minute video (“Wealth Inequality in America”) is based on the same Ariely study. It’s been seen almost 15 million times. Everyone should see it.

    Also interesting is an Ezra Klein column (“This viral video is right: We need to worry about wealth inequality”) discussing the study and the video.

    Like or Dislike: Thumb up 1 Thumb down 0

  149. Moosebreath says:

    @john personna:

    “Now you are just trying to drag the conversation into the weeds. And you know what, I won’t follow you there.”

    So in other words, when actually confronted with your words accusing me of making things up, you call it irrelevant. Fascinating.

    “My starting argument, only that structural unemployment exists, and not that it is the only thing going on, stands.”

    And I never spoke to the structural vs. cyclical issue, feeling it is more than a bit of both. Now what?

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  150. john personna says:

    @Moosebreath:

    I can’t even follow you anymore!

    You are taking the position that if the underlying economic situation supports robo-socialism and a minimum income for humans, then Republicans will not demagogue such policies, or at the least, that such policies will pass in spite of their demagoguery.

    I certainly never made that claim. You made that up.

    Now you show something totally unrelated, about Republicans and environment, and convince yourself that it means the same thing?

    Are you a crazy man?

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  151. Moosebreath says:

    @john personna:

    I’m not the crazy one here. It’s the person whose first reaction to my initial comment was to dial it up to 11, and then wonders why he’s being called on it.

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  152. john personna says:

    @Moosebreath:

    You keep making these claims you can’t document. That’s sad but there’s something worse.

    I say this:

    I think that our main source of disagreement is actually that you presume a policy binding, that anyone who sees structural unemployment must hate poor people.

    But … I came out for robo-socialism, and a minimum income in my very first comment, didn’t I?

    The way I see it, is that if structural unemployment is real, then the way you help poor people has to change.

    And you ignore it completely, you tell me that I’ve somehow defended the Republicans.

    Or as you put it:

    You are taking the position that if the underlying economic situation supports robo-socialism and a minimum income for humans, then Republicans will not demagogue such policies, or at the least, that such policies will pass in spite of their demagoguery.

    You do me a great injustice.

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  153. john personna says:

    @Moosebreath:

    And Jesus, this was “turning it up to 11?”

    What I am saying is that we can make honest observations of the US economy, and then discuss appropriate responses.

    Just because some observers want to stack the deck with respect to cyclical/structural doesn’t mean we should.

    It certainly doesn’t make that the higher ground.

    That was a straight-up call to respect the data. Again, with emphasis:

    What I am saying is that we can make honest observations of the US economy, and then discuss appropriate responses.

    That’s bad?

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  154. Moosebreath says:

    @john personna:

    Turning it up to 11 was where you said, “You are thinking like a Republican presented with an environmental problem … since the liberals believe in it, it can’t possibly be true.”

    Or am I making that up, too?

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  155. john personna says:

    @Moosebreath:

    That was my second response, but I think you are decoding it wrong.

    There is undeniably a bias, where liberals prefer not to see structural unemployment, and conservatives prefer not to see the cyclical component

    Your first comment:

    So, how do you explain Republican refusal to acknowledge that global warming is occurring, if not by irrationality? Or their frequent claim that we have the greatest health care system in the world?

    And if you do acknowledge that they are irrational in some areas of public policy, why not here?

    Was that even on-topic? Or were you trying to claim “both sides do it” so fair game?

    Ohhhhhhh.

    Were you claiming that Republicans were the only one with biases?

    Evar?

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  156. john personna says:

    Even in retrospect that looks like you don’t want to look AT THE DATA you want to complain about REPUBLICANS.

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  157. john personna says:

    You could have just spared me, if your whole argument was “Republicans are stinky-pants, so there is no structural unemployment.”

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  158. Moosebreath says:

    @john personna:

    “You could have just spared me, if your whole argument was “Republicans are stinky-pants, so there is no structural unemployment.””

    Funny, but now you are making things up about what I’ve said. As noted above, I think the cause of unemployment is some of both, and I have otherwise stayed out of the topic.

    On the other hand, part of looking for a solution is looking at the politics of it. And the politics prevent what you view as a good solution. And if you are closing your eyes to that, then you are not going to accomplish what you want.

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  159. Mikey says:

    Kind of off-topic, but if anyone is interested and has the time, the economist, Yale professor, and Nobel laureate Robert Shiller is doing a MOOC on Coursera titled “Financial Markets.” Pretty entry-level, but it’s interesting so far.

    It just started Monday, there isn’t a lot of work involved the first week so it’s pretty easy to catch up (about 90 minutes of videos and a quiz).

    https://www.coursera.org/course/financialmarkets

    Like or Dislike: Thumb up 0 Thumb down 0

  160. ernieyeball says:

    @Mikey: Good luck to her as she follows her dream!

    Like or Dislike: Thumb up 1 Thumb down 0

  161. john personna says:

    @Moosebreath:

    OK. I tell you what. I will apologize for going off. At this point you can see my frustration. I came to this with what I still think is an understanding of long term problem, extending before and after the current recession.

    I kinda worry in fact that Krugman has won half a battle on stimulus (getting half his number) but undermined a longer war.

    Remember when Democrats were on-board with off-shoring being bad and jobs-destryong?

    When there is no “structural unemployment” off-shoring is no longer bad.

    @Mikey:

    I’m in it, and should relax and watch my lectures …

    Like or Dislike: Thumb up 1 Thumb down 0

  162. Moosebreath says:

    @john personna:

    Thanks for the apology.

    “Remember when Democrats were on-board with off-shoring being bad and jobs-destryong?

    When there is no “structural unemployment” off-shoring is no longer bad.”

    Yep, that’s been a problem for at least the last 20-25 years. And some of us grumble about how the Democrats have been bought by Wall Street and point to this as evidence.

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  163. john personna says:

    @Moosebreath:

    So then where you really coming from?

    This was the line you didn’t like:

    “If you say “I can’t see this fact, because it might strengthen this policy prescription” … you are yielding to irrationality.”

    And yet .. “Yep, that’s been a problem for at least the last 20-25 years.”

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  164. john personna says:

    This was the line before it, that you chose not to quote:

    The existence of structural change and unemployment is a fact in the world.

    You apparently agreed with that, but somehow wanted to attack acceptance of the fact.

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  165. Moosebreath says:

    @john personna:

    “So then where you really coming from?

    This was the line you didn’t like:

    “If you say “I can’t see this fact, because it might strengthen this policy prescription” … you are yielding to irrationality.””

    Who says I am not seeing the facts? What makes you think I am yielding to irrationality? I think you were (and apparently still are) painting with a very broad brush.

    At the very most, you can say that Krugman (and maybe some other liberal economists) are overemphasizing cyclical causes over structural ones. But Krugman’s point has consistently been that we had a cyclical shock, and an insufficient response to it, followed by a response to deepen the cyclical nature in the form of austerity, especially at the state and local levels. As a result, there is still lots of room for additional counter-cyclical measures. At some time in the not-too-distant future, we need to deal with the structural issues, but it would be far better to do so when we are more fully recovered.

    @john personna:

    “The existence of structural change and unemployment is a fact in the world.

    You apparently agreed with that, but somehow wanted to attack acceptance of the fact.”

    Again, where am I attacking acceptance of the fact? To the contrary, to the extent I have commented on the issue, I’ve repeatedly said I think it’s a bit of both.

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  166. john personna says:

    This really goes back to the heart and soul of Ryan Avent piece, up top. He agrees with you, Moosebreath, that these problems go back 20-25 years, but his argument is that the changes move faster in recessions. He offers mechanisms by which that happens.

    Stonetools response to that was “Paul Krugman debunks the structural unemployment myth.”

    That was the side you joined.

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  167. john personna says:

    @Moosebreath:

    Who says I am not seeing the facts? What makes you think I am yielding to irrationality? I think you were (and apparently still are) painting with a very broad brush.

    You were not in the discussion when I said “irrationality.”

    I was responding to Stonetools and that “Paul Krugman debunks the structural unemployment myth.”

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  168. john personna says:

    @Moosebreath:

    At the very most, you can say that Krugman (and maybe some other liberal economists) are overemphasizing cyclical causes over structural ones. But Krugman’s point has consistently been that we had a cyclical shock, and an insufficient response to it, followed by a response to deepen the cyclical nature in the form of austerity, especially at the state and local levels. As a result, there is still lots of room for additional counter-cyclical measures. At some time in the not-too-distant future, we need to deal with the structural issues, but it would be far better to do so when we are more fully recovered.

    That might have been a good thing to ask me, but you did not.

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  169. john personna says:

    As I said, you did me an injustice.

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  170. Moosebreath says:

    @john personna:

    “That was the side you joined.”

    Still painting with a broad brush, I see. I will let stonetools defend himself, if he feels inclined.

    @john personna:

    “That might have been a good thing to ask me, but you did not.”

    I don’t see a question in what you quoted.

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  171. john personna says:

    @Moosebreath:

    You said it just above. You were replying to “irrational,” which was a response to a blanket dismissal of Avent and this idea that if I accept Avent’s logic, I must be underestimating Republicans.

    Now do you have any problems with the Avent piece?

    Or did you respond in some kind of mood affiliation?

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  172. john personna says:

    It sure sounds like mood affiliation, you still want me to be wrong while being very, very close to the Avent piece and my starting position.

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  173. grewgills says:

    @john personna:

    That was the side you joined.

    That more than one person is arguing in some way against your point doesn’t always put them on the same side. The two you were arguing with weren’t arguing from the same position re the importance of structural unemployment.

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  174. john personna says:

    @Moosebreath:

    BTW the implied question was in “you can say.”

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  175. john personna says:

    @grewgills:

    In the abstract, but in the concrete?

    Why did moosebreath take exception with the idea that it was irrational to disbelieve structural unemployment for political reasons?

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  176. john personna says:

    What moose did not like:

    That’s just a lack of critical thinking, or worse, a voluntary logical fallacy.
    The existence of structural change and unemployment is a fact in the world.
    If you say “I can’t see this fact, because it might strengthen this policy prescription” … you are yielding to irrationality.

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  177. Moosebreath says:

    @john personna:

    “Why did moosebreath take exception with the idea that it was irrational to disbelieve structural unemployment for political reasons?”

    Umm, because that’s nothing remotely like what I said. I said that the proposed solution you recommend to structural unemployment is not feasible in the foreseeable future for political reasons. I have repeatedly said that I think there’s a bit of both present on the structural-cyclical issue.

    Also, I am not familiar with the term “mood affiliation”. Can you translate it into English?

    @john personna:

    “BTW the implied question was in “you can say.””

    No, there was no implied question there. More like my restatement of Krugman’s positions.

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  178. Moosebreath says:

    @john personna:

    “What moose did not like:

    That’s just a lack of critical thinking, or worse, a voluntary logical fallacy.
    The existence of structural change and unemployment is a fact in the world.
    If you say “I can’t see this fact, because it might strengthen this policy prescription” … you are yielding to irrationality.”

    True, because you are suggesting irrationality in acceptance of facts, rather than disagreement in feasibility of solutions, which is what my objection is.

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  179. grewgills says:

    @john personna:

    Why did moosebreath take exception with the idea that it was irrational to disbelieve structural unemployment for political reasons?

    Perhaps because it came across like you were saying that he and stonetools were disbelieving structural unemployment for political reasons?

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  180. john personna says:

    @Moosebreath: l

    Dude! That was specifically about whether structural unemployment can be disbelieved. Or “debunked.” You and I agree that it cannot.

    There was this ancillary claim that I somehow trust Republicans, which came purely out of left field.

    You still disagree with me while agreeing with me on each point.

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  181. john personna says:

    @grewgills:

    He was not yet in the thread. Stonetools did specifically claim structural unemployment had been “debunked.”

    When I called that an irrational and political claim, moosebreath came in.

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  182. Moosebreath says:

    @john personna:

    “You still disagree with me while agreeing with me on each point.”

    Which shows that there are more points out there than you believe there are.

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  183. john personna says:

    @Moosebreath:

    Which shows that there are more points out there than you believe there are.

    Seriosly?

    I apoligized to you above, this is where you apologize to me.

    Basically, stonetools said this to Michael Reynolds of all people:

    The problem here is that you and john persona think the current Republicans are better than they really are.

    It was out of left field, but I think you fell for it. Stop and think. Can you remember Michael Reynolds expressing trust, love, or support for current Republicans?

    I am a strident independent, but much more frequently critical of current Republicans than Democrats. I am an ex-Republican like some people are ex-smokers.

    Your first post to me was all about that claim and not about anything I actually said.

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  184. john personna says:

    (Stonetools made the mood affiliation that if I believed in structural unemployment, then I must “think the current Republicans are better than they really are.”

    I tried to explain that no, this was about the data.)

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  185. Moosebreath says:

    @john personna:

    “Seriosly?”

    Seriously. While I am sorry this got more heated than it needed to, the fact that you believe I am agreeing with you on each point shows what I am saying is correct. Whether you believe that the political feasibility of your proposal is irrelevant or not, it is the primary point I have been making from the beginning.

    And I still have no idea what the phrase “mood affiliation” means — using it in a second sentence did not help.

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  186. michael reynolds says:

    @john personna:

    I did find that amusing and meant to respond, but I’ve been on the road all week being dragged around by my kid on a college tour.

    It was certainly the first time I’ve been accused of being favorably disposed toward Republicans. I’d have thought my financial contributions to Dems and the many mountains of scorn I’ve heaped on them would inoculate me. Waiting to hear that I’m anti-gay and pro-gun next.

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  187. john personna says:

    @Moosebreath:

    So what specifically have we disagreed on, in fact, above?

    Or is it as I suggest just mood affiliation?

    [link added to top google result]

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  188. john personna says:

    @Moosebreath:

    If you think you disagree about the “the political feasibility of [my] proposal” find where I actually talked about feasibility.

    And not where stonetools made some claim for me.

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  189. john personna says:

    I never made a freaking claim about feasibility!

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  190. john personna says:

    Michael made a long term prediction about feasibility, which I do lean towards but I think both he and I are talking decades out on that one.

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  191. john personna says:

    Is your strawman that you thought I was saying “let’s do robot-socialism, right here, right now?”

    Seriously?

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  192. Moosebreath says:

    @john personna:

    “If you think you disagree about the “the political feasibility of [my] proposal” find where I actually talked about feasibility.”

    So you’re in the habit of recommending proposals which you do not believe are feasible. Not buying it.

    @john personna:

    I don’t read Cowen regularly, finding him an example of economists who make the fallacy you attribute to me, of letting policies dictate whether facts exist. As a result, I was unaware of his god-awful coinage of phrase, and don’t find it useful.

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  193. john personna says:

    @Moosebreath:

    It’s not very graceful to have an “argument” and not accept direct statements.

    When I talk about robo-socialism, I am talking a long way out.

    After all, we are talking about long term rends.

    As you said yourself “Yep, that’s been a problem for at least the last 20-25 years.”

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  194. john personna says:

    I get so exasperated … because there was no where above where I framed this as a short term thing or tied it to any current legislation.

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  195. Moosebreath says:

    @john personna:

    I think we’re done. You seem to believe I should be a mind-reader, and accept your post hoc interpretation of what you meant, while at the same time you have been repeatedly ignoring direct statements of mine (such as on whether I believe current unemployment is 100% cyclical). Oh, and also have the same reading list that you do. Sorry, but life doesn’t work that way.

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  196. Barry says:

    From The Economist: “But adequate demand is incompatible with a low rate of inflation. It may also be unsustainable, since many central banks will interpret the high inflation necessary to boost employment as evidence the economy is running at capacity.”

    That’s if the economists at the Fed are stupid or evil.

    And Doug, as for ‘If this is right—and it certainly seems plausible—then we’re left with a choice between an economy that’s operating at maximum productivity and one that employs a maximum number of people. If so, then the solution is an unsettling one that has come up from time to time in the comments section here, offered by Michael Reynolds and others: an economy where the most talented work and subsidize an increasingly large pool of less talented people who don’t.’

    It’s not going to be the ‘less talented’; it’ll be those trying to break into the work world, those laid off from failing companies, and those who got slapped badly by change.

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  197. Barry says:

    @Mikey: “It seems at this point she may not have much of a choice–either “minimum-wage adjunct” or some job in industry. Pretty much a waste of a brilliant young mind. ”

    And getting even a bad adjunct position will be difficult, and after playing the ‘commute to three schools every day’ game, not even sustainable.

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  198. Barry says:

    @Mikey: “Man, I don’t know. I mean, sure, industry did suddenly decide to employ all those “unadaptable and untrained” workers, but there was a world war going on, which imposes a level of necessity unattainable in peacetime. ”

    The point is that those “unadaptable and untrained” workers were able to pull off almost a literal miracle in production.

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  199. Mikey says:

    @Barry: Actually she called just this morning, she has a phone interview regarding a full-time associate professor position. So things seem to actually be moving. If only the place weren’t 600 miles from here…

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  200. john personna says:

    @Moosebreath:

    -1, for that completely ungraceful exit.

    You never acknowledged the message you were responding to, and the direct content of it.

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  201. john personna says:

    @Barry:

    It’s not going to be the ‘less talented’; it’ll be those trying to break into the work world, those laid off from failing companies, and those who got slapped badly by change.

    I think “R.A.” in his original article understands that market allocation is capricious. “because we rely on market wages …” And he certainly doesn’t reduce it to “talent.” He calls out skilled work actually as what is being replaced. Skilled, but repetitive.

    In my first job I helped design clinical blood analyzers that in a sense “replaced” lab technicians. Skilled work. Though I think that was “a good automation” in the sense that the reduction in costs drove an increase in tests, and more jobs for everyone.

    Jevons’ paradox in a lab setting.

    Still, “the hollowing” is well documented, and especially during recessionary cycles.

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