Post Blue Jobs: Part Two
Published on: April 16, 2012
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  • “We have to kill zoning laws that keep him from running his company from his house.”

    YES!!! Until now I thought I was the only person in the world to realize this.

    I came to realize this 15 years ago after I went to some sort of workshop for wannabe entrepreneurs that was put on in our town. The mayor, a sweet little lady, spent one session blithely telling the people all the things they couldn’t do from their homes.

    And we also need to do away with the zoning laws that keep people from holding semi-perpetual yard sales. Yes, they are junky and not great for property values, but it’s worth it to give people some economic outlet that isn’t regimented by big business and the state.

  • Anthony

    WRM, your concept enterprise-friendly going forward as new social arrangement provides a guidepost. And you are correct this is almost always going to be about dismantling barriers rather than creating bureaucracies; yet a mix economy must remain integral part of social arrangements to better sustain that “middle middle class” you alluded to (as well as other classically defined classes).

    WRM, social networking and promise of new IT technologies make a difference vis-a-vis generational opportunities – “The creativity and enterprise of this generation is the resource that can power America’s economic renaissance and lead us into a new kind of economy.” An example of your point is Business Today, a publication run entirely by students at Princeton University (examining areas of economic growth and innovation).

    So, as computers and software are reaching point where they can effectively displace more and more skilled labor, a new sustainability is both welcomed and needed; perhaps Post Blue Jobs II facilitates a navigable way.

  • JKB

    Well, the Wall Street Journal had an article just last Friday (Tornado Recovery: How Joplin Is Beating Tuscaloosa) that examines how the brilliant urban planners have probably killed Tuscaloosa with their urbanista dreams and regulations.

    It future requires freedom but we won’t get that freedom back easily. They do love their master plans.

    Coyote Blog had a post about trying to start a business in Tennessee ( March 16). The takeaway wasn’t the long list of license, permits, taxes, etc. But rather no government level could list the fees, licenses, permits, taxes etc. necessary to start a business. Seems simple enough, just a matrix or list, they could have a meeting, or several to compile it. Bureaucrats live for meetings.

  • gooch mango

    Economies move in long cycles. Some call them “waves”, others call them “turnings”… but in any case these cycles are real and must be acknowledged.

    The programs and policies that are practical and affordable during the spring and summer of these long cycles become groaning debt-eaters during the autumn; the benefits vs. costs ratios turn negative, the centralized powers that administer them become self-serving and repressive, yet reform is impossible as the dependent clientele stridently defend what “they earned and deserve”.

    We left autumn a few years ago.

    Winter is for decay. It is for default. And it always ends with destruction and devastation… as it must to make way for the next cycle’s spring.

    Civilizations grow and thrive as long as they ride the ups and downs of this cycle… and they die when they refuse to let the winter take its due… as then the expected spring never comes.

    You paint a pretty picture Professor Mead, but I fear it portrays a future we in the West can only watch from afar. Our technocratic elites will NEVER step aside and allow the system to reset.

    Their legitimacy, and therefore their power and positions, are predicated on delivering on yesterday’s promises… and they will not voluntarily relinquish any of it. Especially for a retirement that looks to be no where near as prosperous as the one they promised themselves.

    We can’t just stroll from where we are to where we want to be… the only way to get there is to fall.

  • Jacksonian Libertarian

    I continue to say that if cheap capital is available for consumers to buy and businesses to take advantage of opportunities, then there will be full employment. But the Government is borrowing so much it crowds the consumers and businesses out of the capital markets, where they cannot compete with the nearly risk free Government. I would like to point out that only a few short years ago we had full employment, then the Democrats took over in 2006 and began spending and borrowing like drunken sailors with their first budget in 2008. We all know what happened then, TARP, The Stimulus, bankruptcies, unemployment, and foreclosures as the true cost of capital skyrocketed as the greedy Government borrowed $5+ Trillion and counting leaving nothing left for the economy.

    I don’t like how the Blue Model is being explained here, like it is some institution that needs to be thrown down, when it is more like a wave that peaked and is now subsiding. The Blue Model has been under siege for decades, since AT&T got broken up, since the deregulation of the Airlines, since the end of welfare as we know it. Full employment has been common for most of the time, sure blue collar workers have been under pressure, but that is because of an American Policy of encouraging our foreign trading partners to manipulate their currency to gain a price advantage for their businesses. The purpose of this policy was so America could build a global trading system that would uplift billions of people up out of abject poverty, “The bigger the market the more efficient the market.” Balance will be restored and American labor will reap the benefits of decades of increased competition, when all those dollars begin coming back home.

  • that process of reinventing and entrepreneurshipping(?) that you identify is well under way, and not just among the younger set, too 😉

  • Petar

    Prod Mead,

    I am quite curious how this will play out if AI actually manages to replace the need for human labor (which is likely to happen mid-century). Will you then still advocate this type of regulation-free economy?

    What about dangerous bio- and nanotechnologies? Should we let the market deal with them? Should we allow entrepreneurship in these areas? What if there is a 5% chance that this leads to a catastrophic event that wipes out, say, 50% of the world’s population?

    Also, I think you are overly optimistic. A cornucopia does not await us, as our energy consmption is not sustainable and the automatization of the economy actually means we will need even more energy.

  • Immanuel Goldstein

    That’s one of the reasons Ebay, Craigslist and other web based businesses have been such successes. To be able to hook into the marketing muscle of such venues as Amazon and Facebook can help the fledgling entrepreneur get his or her business established. Look for the administration to hamstring the web based business model at the first opportunity.

  • Kenny

    You have the right idea, Mr. Mead.

    Get government out of the way — and that includes getting government out of people’s pockets so there will be capital & savings to start businesses.

    Big government is the enemy.

  • Generic Liberal

    I sneer at you, extremist shill.

  • Chester White

    How can a person who writes such a column possibly have voted for Obama?

    Please enlighten us.

  • C.Q.

    I seem to remember being told, some years ago, that Houston (TX) has no zoning laws.

  • Yep, I have two grandsons. One on the bong, the other on the escalator.

  • This is what economic liberty looks like:

    “We have to kill zoning laws that keep him from running his company from his house. We have to reduce the time it takes him to comply with the legal requirements to set up his business to the absolute minimum — like a two minute session filling out some forms on the web. OSHA and the EPA have got to stay out of his hair as much as possible. And if he’s going to be able to give Alejandra a job it needs to be the simplest thing in the world to hire and pay her — and, for that matter, to fire her if sales slow. His taxes need to be low, predictable and easy to calculate and pay.”

    Amen!

    We’ve all fallen for the Fatal Conceit Hayek warned us about. We can’t envision an unplanned prosperous future, so we assume it will not happen without big government plans.

    Phooey. Cast a glance back at our own US history. Government provided a stable infrastructure and legal framework, and left the innovating to the private sector.

    It is also worthy to note, as I heard Senator Coburn say on the radio this morning, that costs have galloped wildly out of control in the two major sectors where government intervention is at a maximum and free marked forces are at a minimum: Education and Health Care.

  • Bart Hall (Kansas, USA)

    Cutting regulations is a very low-cost way for government to encourage entrepreneurship. Unfortunately there are simply too many administrative parasites feeding off the bureaucratic structure for it to be trimmed substantially without there first being some sort of electoral revolution.

    At present the momentum is all the wrong way, with 700 new federal regulations per month. Here are just three that affect our farm: we shall soon be required to obtain a federal permit in order to grow and sell a cabbage, even within-state; EPA intends to control our “release” of dust when working fields or even driving on gravel roads; and the Department of Labor is bringing or regulations making it almost impossible for anyone under 18 to work on a farm — even our own children.

  • Mrs. Davis

    In general I agree with getting the government out of our private business. But…

    looking at bank regulations, for example, to make it easier for banks to offer finance to fledgling enterprises. We ought to have financial regulations in place that make it easier for small investors to pool their resources into mini-VC funds.

    Commercial banking is a low margin, low risk business. (When it’s not depositors lose.)Lending to fledgling businesses is not low risk.

    Small investors can pool their resources into mini-VC funds. They are called angel networks. But you still need to be a qualified investor. Which is as it should be. Most of the companies VCs or angels invest in fail. And VCs spend a lot of time monitoring and guiding the companies they invest in. You need to be able to lose all the money you invest in start-ups, and most small investors can’t afford that level of risk.

    The kind of money you are talking about has to come from family and friends. And the best way to generate that capital is to reduce the tax burden on family and friends. The government needs to be put on a crash diet. Or be prepared for liposuction.

  • Lexington Green

    Best WRM column yet — which is saying something.

  • Daniel M. Ryan

    Here’s an explanantion for why blue-model administrators tend to fall into bed with big corporations: it’s easier. Intutively, it appears more efficient.

    It’s also easier to understand, just as the conception of a nation as a company makes macroeconomics easier to understand. [In case anyone’s curious, the Brits used to call national income “the national dividend.”]

    From one deal in the high-frequency zone, it can be claimed that the government-business partnering has “created (say) 1,000 jobs.” The deal fits into one article. You need only add one or two photographs to add visual backing. The point gets across that simply.

    Contrast it with a reform that creates 2,000 jobs in 1,000 long-tail firms: an average of two jobs each. How can this be reported? First, those firms have to be found and counted – which is a chore far more difficult and lengthy than reporting on one 1,000 job deal. Secondly, long-tail firms are below the radar. Not only are they hard to find, but also their independence (due to they being below the radar) makes the claim of the government “creating 2,000 jobs” with a restriction removal more dubious. With a deal between a government and Big Corp., the tie-in is fairly obvious. With a large scattering of nobodies, it isn’t.

    Add to this the fact that the removal of a restriction is more subtle than a grant or tax deal. New post-removal entrants who didn’t even know the restriction existed would not credit the government for their success. You can’t credit what you don’t know about.

    If only this issue were a matter of grandstanding publicity-hungry politicians! The fact is, a lot of photo ops like that hypothetical 1,000-job dealie are like defensive medicine. Thet’re enacted and sent to the media to defect criticism that the government isn’t doing enough to help the jobs situation.

    Unfortunately: the more that defensive photo-opping is needed, the less chance there is of reforms through restriction removal. In addition to the above sketch-out, public choice theory explains why.

  • blighter

    Great post but I think Mike’s employee in the Dollar Shave Club ad is not a female Alejandra, but a male Alejandro.

  • Jim.

    @WRM:

    Fantastic article! Between the heuristic of the Free Market, and the liberty to make Entrepreneurship happen, the future will be beyond the dreams of any one bureaucrat… just as it should be.

    By the way, when are you going to endorse Romney?

    @Petar:

    Our short-term energy crisis just got solved by fracking.

    Any advance in manufacturing that (almost) does away with the need for human labor is likely to make Solar cost-effective. (Heck, manufacturing advances on the scale you’re predicting would make space solar power plants cost-effective, giving an economic impetus to space colonization, with all the associated labor sinks of a new frontier.)

    Honestly, we’re only in trouble long-term if flat-horizon thinkers keep insisting that 500 million square kilometers is all humanity gets.

  • Andrew Allison

    Kids who have grown up playing video games really do think differently, specifically, they are much more intuitive and experimental than previous generations (give a kid a game and watch what happens). I’m with WRM that we are going to see some astonishing changes as new ways of addressing problems flourish.

  • If you’re right that a large chunk of our meritocratic elite is going to be thrown out of a job then I predict that a lot of them are going to be political entrepreneurs and that the chance of real reform to save the American way of life for America’s working families is much brighter than I currently think it is.

    [Real reform, for me, means a six hour family friendly work day, wage subsidies (vast EITC expansion) and a graduated expenditure tax in place of all other forms of taxation — but that’s another whole set of arguments.]

    Charles Murray was right about the principal argument in his book about intelligence and class structure in our new meritocracy. It leaves America’s working families without effective representation in the democratic political process. But even the smart are hit hard then I predict enough of them will “defect” to the other side in a hopefully more enlightened way than they did a hundred years ago.

    I particularly would expect to see a lot of the Ashkenazi elite breaking off for reasons of opportunity, tradition, and plain old self-interest both for themselves and the future security of the state of Israel. But that’s an odd-ball position that only I hold at the moment so I won’t go into it now.

  • Draken Korin

    A true DEBTORS’ REVOLT – DEFAULT EN MASSE is needed to hit the reset button on this predatory system. I encourage people to grow a pair, learn once again what it means to fight tyranny, and join us.

    Look, the economy tanked, and everything is now completely different, especially with regards to labor prospects – for *everyone*. And yet, the lenders have behaved reprehensively and in a completely predatory manner toward the millions who are struggling. It’s time to hit back and collapse what has morphed into a predatory system that stands in direct opposition to democratic values. Our Founders wisely warned us.

    We encourage widescale, intentional REPUDIATION and rejection of our “debts” – default en-masse – just refuse to feed the predatory system any longer by simply withholding; stop paying in. Let them starve, let the system collapse, and rebuild from there, under FAIR, not captured, rules. As a former finance professional myself, I can tell you that the banking and finance sector is *much* more vulnerable than most think – get default rates up to a critical mass, and watch the value of huge swathes of financial instruments collapse. So join the DEBTORS’ REVOLT – DEFAULT EN MASSE movement.

    Repudiate your debt. Refuse. I’m looking at you to be at the vanguard, student-debt indentured servants. Refusal to cooperate with this monstrous predator is the only way forward.

  • Jim.

    @Andrew Allison-

    That say more about games today than about kids. The tools and challenges you’re given in most games amount to the equivalent of a Scan-tron multiple choice test…. do you jump, fire, strafe, wait for the AI to cycle to a more favorable situation, use a “special power”? There really aren’t that many choices.

    Plus, game designers these days are instructed not to make games too frstrating; you’re not going to see another “Zork” or “King’s Quest”, with puzzles that stump you for months. (Not that the Internet allows secrets to stay secret for long.) Games that reflect the range of options and frusrations of real life (say, Daikatana) get panned by critics and players alike. So do games where the designers don’t have a “victory path” in mind from the outset, and just toss perhaps-impossible problems out there for players to solve.

    The game with the sort of “emergent” mechanics that would reward the sort of solution-finding creativity that would be applicable to real life is still the Holy Grail of ambitious designers (the investors behind gaming, not so much) and while some games like MineCraft approach it, the blockiness and limitations of such games only make it apparent how far we still are from that golden dawn.

  • Brent Buckner

    I suspect that you’re being optimistic in your assessment of the number of jobs that those entrepreneurial ventures will create for those of sub-average intelligence and sub-average conscientiousness (i.e. about one quarter of the population).

  • Mercer

    I buy packs of cheap razors at the grocery store so this ad makes no sense to me.

    Health care is where licensing really drives up costs.

    I was disappointed during the Fluke/Limbaugh spat that allowing women to buy their own birth control pills was barely mentioned. It is a big waste of resources that healthy young women have to see a doctor every year for their pills.

    Nurses should be allowed to do more and dental hygienists should be allowed to work on their own.

    States are increasing the schooling required to be a nurse, pharmacist and physical therapist. Why do MDs need four years of college before medical school? They should not. It just drives up costs.

  • Mike Balint

    @Draken Korin (23)

    Yeah, sure, money grow on trees, so let’s repeat in unison: “Getting money good, repaying money bad.” Shades of four legs good, two legs bad. Curiouser and curiouser, as Alice would say.

  • Mike Balint

    I do not share Professor Mead’s Panglossian perspective on the coming decades. Instead, automation, computerisation, low skilled and then high skilled jobs moving overseas, and government insolvency/bankruptcies caused by increasingly unmanagable debt levels, a shrinking tax base, untenable political promises, idiotic foreign and domestic policies and ever more bloated bureaucracies generating ever more bloated regulatory frameworks, is more likely to lead to a catastrophic decline in employment opportunities for the dumbest 25% of the population, together with catastrophic increases in the crime rate and civil unrest in a veritable Rome redux. This much is clear. The other side of the ledger, which could ameliorate all this negativity is at present merely pious faith and hope at best, empty waffle at worst.

  • Mike Balint

    @Mike Balint (28)

    Correction: In the above post I have severely underestimated the catastrophic reduction of employment opportunities for the dumbest, least smart segments of the population, when I pegged it at 25%. A more likely figure is 50-75%, unless the army of young enterpreneurs-in-waiting will succeed in pulling some incredibly mighty rabbits out of their magician’s hats.

  • thibaud

    These are nice Tom Friedman-style sentiments, and of course we all value entrepreneurship, innovation etc.

    But the view from inside the world of startups and technology is very different. Only one out of ten or so startups will ever return its capital to the investors. The other 90% will fail and lay off all their employees within a few years.

    By their very essence, then, startups and entrepreneurship are completely INAPPROPRIATE as career choices, or uses of scarce capital and savings, for anyone who is not young, fancy-free, and spending other people’s money (or else possessed of sufficient wealth to put at risk a six-figure or greater investment in one highly speculative venture).

    This is why, despite all the hype, the tech startups this nation keeps bringing out, brilliantly, are nonetheless without much economic or political significance. As Andy Grove has pointed out, Silicon Valley during the last 12 years has created ZERO jobs on a net basis.

    GOOG, FB, Twitter etc employ a tiny fraction of a fraction of the US workforce. Their impact on productivity is minuscule. Even the wealth they’ve created has been largely a case of shift, not lift: shifting a relatively small % ad dollars, money that would’ve flowed into print or broadcast media into their own coffers. They have not created anything close to rivaling, in economic impact, the internal combustion engine, or rural electrification, or the interstate highway system etc. It’s a huge amount of effort whose main benefit has been that people can more ingeniously waste time.

    Odd then to hear someone like this blog’s author, who frequently touts the benefits of traditional pillars of social stability such as families and religion, turning around and proclaiming support for the most volatile, unstable, radically and creatively destructive types of economic activity.

    A traditionalist when it comes to religion and family, and a jacobin when it comes to economic security for those same families.

    Venture capital and entrepreneurship are like rocket fuel: they’re good and necessary in small quantities for limited purposes. But rocket fuel isn’t suitable for that 99% of vehicles that are built to take people along roads and highways.

    Few are the the people who are trying to raise a family, and who lack access to risk capital and a 7-figure bank account, who should even consider working for a startup. Entrepreneurship is not and never will be the foundation of any society. California’s completely screwed-up fiscal situation is perfect evidence that no startup sector, no matter how robust or wealthy, can sustain a large population.

  • Mike Balint

    The problem with projecting into the future based on history is that it rarely works. The future is mostly a surprising, unforeseen and unpredictable. For instance, just because at one point in history agricultural labour successfully reinvented itself as industrial labour, no way implies that a similar adjustment is bound to or even likely to occur once again in our own time. Primarily because the US economy was essentially a closed system at the turn of the twentieth century, but is today exposed not just to unskilled but skilled competition of the most severe and extreme sort in a wide-open world-wide system.

  • thibaud

    @ Mike Balint #29: spot on. Even the cleverest entrepreneurs will, in most cases, fail to create anything that makes economic sense. And much of what does generate ROI beyond the VCs’ traditional hurdle rates is also bereft of economic benefit to anyone: look at Instagram, Twitter, and god knows how many moronic mobile games that are now attracting huge amounts of not just venture money but exit money as well. This post shows Dr Mead at his panglossian worst.

    There’s simply no way around the very hard truth that big nations need boring, old economy industries like manufacturing, energy, and agriculture if they are to employ millions of their people in remunerative and stable jobs. We are not Singapore. We simply have to find a way to train that majority of our population that will not be employed as symbol manipulators of one kind or another.

    A modest proposal: stop betting on new-venture unicorns and find a way to provide better vocational training, preferably at the HS level and on a separate track from the college-prep track, for at least half of this nation’s HS students. And find ways to help people over 60 to stay productive and competitive/valuable and participate in the workforce as long as they’re willing and able.

    Those two innovations would be far more consequential and valuable to our society than any number of risky, soon-to-fail startups.

  • Mike Balint

    Bankers, of course, will always do just fine, whichever directions the money-flows might take. But to get into the level of merchant banking where serious money can be made, whether as quants or traders, young people need to be just about the smartest of the smart. No chance there for the bottom 98% of the population intelligence-wise.

  • Mike Balint

    I think that it is moreover quite wrong and misleading of Professor Mead to have unilaterally and arbitrarily rechristened the post-war model of the social-democratic (in US: “liberal”) welfare state as the Blue Model. I don’t see that bashfully averting our gaze from a duck will make it less of a duck, even if in some past presidential elections the duck happened to have been coloured blue by television presenters due to the traditional blue colour used to depict the geographical location of voters for the Democratic (= Social Democratic)party, who naturally harbour strong social-democratic (in US: “liberal”)sentiments. If it walks like a duck, quacks like a duck, looks like a duck, it must be a duck. And this duck happens to be red, and no amount of waffle and obfuscation is going to make it blue. The waffle and obfuscation merely befogs the debate.

  • Jacksonian Libertarian

    I am amazed at the number of commenters beating on the American Worker, as useless lazy scumbags sucking on a bong. Up until recently we had full employment with 4% unemployment and all these people were working, did they suddenly all become useless and I didn’t notice?

    “There’s a reason it’s called Capitalism; it’s because Capital is what fuels it.” Jacksonian Libertarian

    When the Government Monopoly is sucking the fuel tank dry, there is no affordable money left for Consumers (compare credit card interest rates today to those of a few years ago) to buy, and Businesses (most small businesses are financed by home equity loans, with Real Estate falling at least 30% there isn’t any home equity) to take advantage of opportunities which would create the jobs that would make the unemployed not useless scumbags sucking on a bong. It isn’t the unemployed’s fault that there isn’t any capital to create jobs; it’s the Government’s fault for robbing the economy of that capital. How many jobs would have been created if the $6 Trillion the Democrats have taken from the economy since they took control in 2007 had been left in the fuel tank? $6 Trillion worth of consumer purchases, and Business development to meet consumer demands would have made any recession mild and the economy would be growing strongly now. Instead we have the Democrats blaming everyone else (Bush, Republicans, the TEA Party, Wall Street, Big Banks, Millionaires, Racism, the War, etc…) for an economic disaster which they are responsible for creating.

  • Anthony

    Thibaud, insightful commentary (ROI, VC, & real world start-up analog on target) and sterling suggestions). Yet in WRM’s defense, I don’t think he intends to discount real applicable American economics – he’s attempting to foreshadow “new ways” to make a living. I do not sense that he is offering (Panglossian style) Dollar Shave Club or hunger games as sole options. Given capitalism’s inherent capacity to destroy (some call it creative destruction), WRM is offering insights from traditionalist perspective in transitioning world.

  • @ Jim says – “Honestly, we’re only in trouble long-term if flat-horizon thinkers keep insisting that 500 million square kilometers is all humanity gets.”

    I’ll put that one on my wall.

  • I thank Mike Balint for predicting “a catastrophic decline in employment opportunities for the dumbest 25% of the population.” Now if somebody would just speak up for the dumbest 50% and the dumbest 75%. They exist you know.

  • @ thibaud:

    “nations need boring, old economy industries like manufacturing, energy, and agriculture if they are to employ millions of their people in remunerative and stable jobs. We are not Singapore. We simply have to find a way to train that majority of our population that will not be employed as symbol manipulators of one kind or another.”

    Which reminds me. Did you see this:

    http://falkenblog.blogspot.com/2012/04/is-intelligence-good.html

  • Even better: http://tinyurl.com/83pq6pt

    Clever Sillies – Why the high IQ lack common sense

  • Toni

    To [email protected]:

    Yep, Houston has no zoning, the largest U.S. city without it. And that’s brilliant.

    Whatever restaurant or shop or business doesn’t work in a particular spot vacates the premises, and the next restaurant or entrepreneur or whoever can renovate to remake the space into something profitable. Buildings can be torn down and replaced easily. No zoning, but reasonable construction codes. A friend says Houston is where driving directions usually include, “Remember where ______ used to be? Turn there [or whatever].”

    Residential areas are protected by neighborhood deed restriction.

    So now Houston is the nation’s fourth largest city, home to the largest evangelical megachurch AND the first openly lesbian mayor of a big city. It’s a fast-growing city of freedom, improvisation, innovation, mutual tolerance, and entrepreneurs. Low-cost, too, compared to blue states and cities.

    Plus the nation’s oldest and largest Art Car Parade! Google Houston art cars, then click images. Anything can happen here and often does.

    Shortcut on Firefox — http://www.google.com/search?q=art+cars+of+houston&hl=en&client=firefox-a&hs=xWf&rls=org.mozilla:en-US:official&prmd=imvns&source=lnms&tbm=isch&ei=_xiOT-u9HIOq2QXh0Z2LDA&sa=X&oi=mode_link&ct=mode&cd=2&ved=0CDMQ_AUoAQ&biw=819&bih=478&sei=cxqOT4XVNua62wXj89SQDA

    Shortcut on Safari —
    http://www.google.com/search?q=houston+art+cars&hl=en&client=safari&rls=en&prmd=imvns&tbm=isch&tbo=u&source=univ&sa=X&ei=hRuOT6PVJaei2wXh-LjnCw&ved=0CIQBELAE&biw=1276&bih=690&sei=ixuOT5fyMcGj2QWB97iTDA

  • Iustus Peccator

    Yes, yes excellent points all, but allow me to be callow for a moment. (Or, if divine providence holds out, the rest of my life)

    The best comedic line of 2012:

    “Your handsome-ass grandfather has ONE blade -and polio.

  • Toni

    “The new jobs for unskilled people will be mostly badly paid and undignified: retail service occupations, bedpan changers in geriatric homes, call centers (if these don’t go to Bangladesh), or domestic service for white collar yuppies.”

    This statement is highly objectionable. ALL honest work is dignified, no matter how lowly paid. Retail can turn out to be lucrative, even for wait staff if they’re good and move up to pricier restaurants. (My HS graduate brother had the knack and supported a family of five as a salesman.)

    Plus, there’s no reason for an unskilled worker to stay that way. In Houston, there’s a public community college system that sometimes coordinates with employers to see that students are trained for the jobs employers need to fill. Students can go full- or part-time, in the evening as well as the day. And, of course, there are for-profits like ITT Tech. These expenses are tax-deductible.

    One of the maintenance workers in the highrise where I live is from Turkmenistan. In his off hours, he went to some school — public or private, I don’t know — for a two-year degree in accounting. Now he works two full-time jobs. He’s one of those immigrants who’ll have a nice house in suburbs before too long.

    This essay seems to focus mostly on college grads, who remain a minority of all workers. But plenty of jobs exist for high school grads who aren’t too stuck-up to start at the bottom, or to start part-time and work up to full-time.

    In health care, for instance (where insurance may well be a common benefit). Hospitals are begging for nurses and will help pay nursing school tuition. And there are plenty of jobs performing tests or working as other aides, such as phlebotomists. The lesser educational institutions train for these positions.

    But, again, I object most strenuously to the idea that honest work can be undignified or demeaning. That is an insufferably arrogant and self-indulgent attitude. God values each human, and each human’s honest toil, even if that toil is scrubbing toilets.

  • @Anthony “I do not sense that he is offering (Panglossian style) Dollar Shave Club or hunger games as sole options.”

    Zactly. Options don’t have to be sole options.

  • Jim.

    @thibaud and Anthony:

    The point is not the 99% of VC plans that fail. It is the 1% of plans that succeed…. and the fact that there are thousands upon thousands upon thousands of them.

    The point is not the 1% of government plans that succeed. The point is the 99% of government plans that fail, but we keep paying for anyway.

  • thibaud

    Anthony – maybe so, but WRM, like Tom Friedman and so many people outside of the tech industry, tends to exaggerate the impact of digital technology and startups. Economies do not run on symbol manipulators. They need things, which need resources such as energy, water, metals, minerals etc., and all of those boring “old economy” things require vast amounts of capital investment into plant property and equipment. It’s ridiculous to expect doughty little entrepreneurs to dominate this real economy of huge fixed investment and vast labor forces. It’s irresponsible for anyone seeking to influence policy to suggest that more than a percent of a percent, at most, of an advanced nation’s workforce should base a career on extremely risky startups.

    @ Mike Balint #34: good points. Pensions are a good thing. Striving to give the vast majority of the workforce a degree of economic security that will enable them to put down roots, raise families, plan for the future with some degree of confidence is a very good thing.

    This isn’t the “blue model”; this is advanced industrial democracy, period. It’s a fantasy to think that people beyond a certain age – people with families, mortgages, health issues, ties to localities that may or may not be hip and rapidly growing – can morph into footloose free agents transacting constantly in an endless array of free markets. There’s friction, or “stickiness,” as the economists say, in any market, and that’s a good thing. You can’t move forward without friction, remember?

  • Mike Balint

    The “plodding” Germans, Scandinavians, Dutch and Swiss are perhaps the best example of how to successfully maintain the social democratic model into the future, with an enormous and truly fantastic manufacturing base that does not hemorrhage jobs into the third world whilst also maintaining a respectable high tech sector of primarily manufacturing relevance rather than creating ever more outlets for advertising. Maybe there is something to learn from there.

  • tian

    @ Thibault and Balint
    Very good points and I agree that society needs fundamentally manufacutring to sustatin itself: particularly if its a large nation, it should be able to at least survive in an semi-autarky condition by farming its own food and making its own cars.
    The interview between Fukuyama and Peter Thiel on this website about captures my vision of where mankind is at presently and will be headed.
    The main point I differ on is that of “symbol manipulators”. I personally believe that as long as its cheaper to buy robots and feed them with electricity than to feed humans and put up with all of their whimsical nonsense, virtually all non-creative professions (and non service professions since some humans will always want to buy from a store clerk instead of a vending machine and etc.) will be displaced in a free market economy. This means that at a minimum, the lowest level skilled workers will need to know how to operate machinery. For example, amazon currently has an army of people stuffing boxes, however they want to automate the process. In the future, the lowest levels at Amazon will probably be the people assisting the engineers with calibrating and programming these automations, a skill already in high demand but which unfortunately very few Americans have. Until robots can fully maintain themselves (we’re still a ways away from this), these people will be needed in the economy, but even so what will happen to the rest of the boxers? Afterall, there is not way that automation will require the same amount of maintenance workers as current boxers. One route would be for leisure time for humans will increase as machine do more of our production relating to subsistence and there will be maximum work hours (like france, but implemented globally), but I’mt afraid this route may potentially cause economic stagnation and lack of innovation. Another route I believe, would be that the healthcare and entertainment sectors would see a giant boost. As our cost of production to sustain ourselves diminishes to close to zero, people will be wanting to maximize both the length of their lives and the quantity of their lives and demand for these sectors increases much more relative to the others. Unfortunately, technology is already displacing many people in these industries as well. Or a third more preferred route would be for everyone to mass educate and all become scientists sponsored by the state, we can work towards cracking the laws of physics and discovering the means to provide a close to 100% renewable and sustainable energy source, colonize the galaxy for resources, and etc to sustain our human society. But despite our manificent advances in literacy and basic education in the past 50 years globally, I doubt enough humans will be ready for this type of work during the painful transitional period we will likely face as automation displaces most non-creative professions. At the very least, I doubt machines are anywhere close to substituting human companionship so maybe people will work as geishas for the patrician class of engineers…
    Although I disagree with its conclusion, I highly recommend the Kurt Vonnagut novel “Player Piano”. It essentially portrays a benign “big blue” type governments attempts at making sure all the displaced workers have enough to eat and are content with their lives. At the same time, the semi skilled workers (secretaries, middle managers, entry level lawyers etc.) are now being displaced due to the 2nd wave of automation from IT advances. He wrote this novel decades ago but I feel its very applicable to our current situation.

  • One way to advance the debate might be to ban the use of the term “full employment,” which has made sense only for a couple of hundred years — a short time in the history of human existence. We’ve always had full employment. People never do nothing. They’re busy making stuff out of steel and concrete, transferring money from gas stations and banks, raising kids, growing food, bossing people around, playing video games, fixing the porch, mowing the lawn, hunting bison, drinking beer, fixing computers for friends, writing novels, etc. etc. Some of this activity even helps people survive and accumulate stuff. Some of what they accumulate is capital. A subset of this can be categorized as part of the industrial economy. That subset of our activities that is part of the industrial economy (the stuff the IRS reasonably expects to know about) was quite prominent for a while, but perhaps will recede in importance in the future.

  • Mike Balint

    The fundamental problem of America into the future is not jobs, but the lobbies-driven utter policy incoherence and paralysis within the legislative branch and between the legislative and the executive branches of the Federal Government on both the Democratic and Republican side. Until this problem is sorted out, and some kind of a commonly acceptable lodestone is found as to what is and is not in America’s enlightened national interest, it is sheer futility to contemplate anything but utter disaster for the State of the Union in the coming decades.

  • thibaud

    @44 Mike Balint: once again, right on the mark.

    I have nothing against forcing US public sector employee unions to pare back the outrageously inflated pension guarantees made over the last 20 years by US politicians of both parties. But we do want people to have secure retirement funds, and secure access to decent health care, and some degree of economic security — all of which the north Europeans have managed to figure out how to provide since the mid-1990s.

    Interestingly, those nations all have some common political-cultural characteristics that we could use a lot more of here in the US:

    1. Relatively clean politics and non-corrupt politicians – see the point above about both US parties’ corrupt bargains with public unions. You don’t find anything close to this level of “pay to play” corruption in Sweden or Germany or Holland or Denmark.

    2. Fiscal prudence combined with close reins on their banksters. Sweden esp tightened its regulation and supervision of its banking sector after the meltdown of the early 1990s and also got its fiscal house in order, with excellent results. Canada did the same in the late 1990s. We could learn from Canada and Sweden here.

    3. Non-piggy CEOs and union leaders, aka an ethos of social “solidarity” that restrains outrageous behavior by greedy, self-seeking individuals. Germany’s model may be hard for others to imitate, but we could definitely learn something from their corporate governance model.

    4. An ethos of thrift, saving, and relatively low consumption of stuff. The US consumer economy is largely built on millions of people buying stuff they don’t need with money they don’t have. The nordics, Germans and Dutch show us today a picture of a yankee ethos that we have lost.

  • Gary Lohmeyer

    I echo Chester White’s question “How can a person who writes such a column possibly have voted for Obama?”

    Pretty please enlighten us.

  • Craig John

    Okay, everyone really needs to listen up. Those of us who OWN capital – and thus own your ability to feed, shelter, and clothe yourselves – need to start putting workers back IN LINE. We are replacing you with technology, algoriths, and automation – and rapidly at that (see autonomous cars and robotic warehouses) – so you should all be GRATEFUL and THANKFUL for the jobs we do give you to do.

    Automation is more valuable to MY HARD-EARNED bottom line than your whining. So make yourselves valuable to me, or just go away.

  • Boritz

    >This is almost always going to be about dismantling barriers rather than creating new “helping bureaucracies.” <

    This is a call for, not a transfer of wealth (at least not directly) but a transfer of power — from the politicians to the Mikes. Great idea, but you might as well hope to win a tug of war with a hungry lion over a steak.

  • Angel Martin

    “Increasingly, it looks to me as if large chunks of the upper middle class are about to get whacked. Many of the learned professions are going to see their incomes cut …”

    this is really an astute point, and some of the comments in response (denial anyone…?) are also interesting.

    a simple test for white collar outsourcing vulnerability is: can you work at home? If you can, your job could be moved to India.

    Now, “in person” activities such as college lecturers may think they will be exempt, but, not so fast. If you, Dr College Professor, gave a confusing lecture, and your students went on youtube to find a better presentation… you are on the block as well.

    Also, since some of the most prescient economic commentary anywhere is coming from a non-economist like WRM, i’d say some professional economists might need to start updating their resumes as well.

  • Let’s start by hiring legally

    I agree with all of your points, Dr. Mead.

    However, there is one fact of modern American life that the Dollar Shave Club alerts the viewer to that you omitted, and which is crucial to ensuring we have a prosperous future going forward rather than a “Gordon Gekko vs. Hunger Games” division of society into robber barons and the proletariat masses.

    I have no idea whether “Alejandra” was a legal worker or not. But the average business in some of the the fastest-growing industries (food service, hospitality, agriculture) is utterly reliant on illegal labor while American workers sit on the dole or work in non-productive government jobs.

    There is no better way to ensure a huge mass of unskilled, uneducated workers turning into a massive, restive class of the permanently poor than to continue our destructive immigration policies of keeping out the legal and educated while allowing the world’s least-educated, least-skilled and least-law-abiding to enter as they please.

    I am a strong believer in minimizing regulations in order to ensure prosperity. However, the one regulation that I and the vast majority of Americans would like to see — E-Verify or other assurances that businesses are hiring legally, rather than keeping Americans out of work and building up a huge permanent underclass population –seems to be the one regulation the government doesn’t want to enforce.

    This of course tells us a lot about where the government and business interests stand vis-a-vis their commitment to guaranteeing an affluent, functional society going forward. Whereas most US citizens see countries as rather discrete entities, the ruling class appears to see our nation and other nations as merely harbors in a global sea, with ships coming in and out without ever mooring.

    Unfortunately, a society and its ability to ensure a high degree of mean affluence are only as good as are its constituents. And if we want to ensure that Americans in the post-Blue world are able to remain affluent (and thus important geopolitically, diplomatically, militarily and culturally), we do indeed need to cut back on the vast tome of regulations that hamstring businesses. But we also need to ensure our human capital is capable of prosperity — and that a refusal to enforce immigration laws stemming from a one-worldist point of view among a ruling class safely ensconced within its gated communities does not lead to a massive expansion of an uneducated lumpen proletariat unlikely ever to be able to compete in that post-Blue economy.

  • thibaud

    Our tax code privileges capital over work – this is why private equity and hedge fund bandits are so keen to call their profits “carried interest” instead of income: the former’s taxed at the capital gains rate, which is a fraction of the marginal income tax rate.

    And our tax code actively punishes firms that are trying to hire workers in the US. Add to this the stupid linkage of health insurance to employment status – which imposes yet another burden on those who would employ more Americans, a burden that’s increasing by double digits each year – and you see why so many US companies have effectively stopped hiring, on a net basis, Americans in America.

    This is not a right-left, Repub-Dem issue. It’s just a matter of leveling the playing field between work ie income and capital gains. It’s mind-boggling that our political class has allowed us to reach this pass.

  • jim

    WRM,

    As someone said above, this is your best memo yet.

    Two things stand out; zoning restrictions and payroll tax compliance are the the impediments standing in the way of entrepreneurs. I know this first hand, many times over. The rest of the poli-econ-socio speculation, as in posts above, is just mind-farts.

    Overhead cost kills start-up self-performance self employment. Home based business is the only way to start. Zoning prohibition is the stick used by established, capitalized overhead business, to beat down upstart competition.

    Employment: The incremental cost, in time or hired-time price, of calculating and writing a paycheck is near impossible for the first employee. (No wonder the large number of illegals in small scale employment, when legally employing on a small scale is so difficult.)

    Removing the required withholding transfer accounts and worksheets calculations, and quarterly reports. Replace them with requiring only a IRS 1099 annual payment report, and legal employment at the bottom level would skyrocket upwards.

    For example, for employees earning under 24k per annum, no with holdings. Those people don’t pay any taxes, so no compliance loss to the IRS.

    Or a simple payroll of 10% to the feds, 10% to the state, and 80% to the employee, and be done with it at that. In eliminating wasted time for calculations compliance, only the bureaucrats and the computer-letter generating bureaucrat computers would come out the worse.

    All joking aside, only someone who has calculated a paycheck for an employee knows what I am talking about. Everyone else is totally ignorant. The President. Many Secretaries of Labor. Economists: Friedman, Krugmann, Reich. Etc.

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