Category Archives: Politics

Macroeconomics 101

Disclaimer: I am not an economist. But I did take a few Econ courses as an undergraduate and I’ve read Keynes’ General Theory 😉 The opinions herein are mine…

The scenario: We, the consumers, like cheap stuff.

Take cars, for example. We want more goodies on our cars, and they are getting expensive. Car manufacturers say, hmmm. If I put a plant in a country where there’s less expensive labor, I can hold down costs. Plant moves, some jobs lost, but there is more spending since cars are now less expensive, and other jobs created.

Fast forward: For whatever reason, we want to impose 20% import tariff. Now cars cost more, because we, the consumer pay this tax. Spending drops on other goods and services, jobs are lost.

But wait, car manufacturers could bring jobs back. Yes, but higher wages mean a more expensive car. Spending still drops on other goods and services, jobs are lost.

Car manufacturers say hmmm, with tax break on investments, I can build new plant with robots replacing even more jobs, and cars will cost somewhat less, but likely more than before. Especially with that big tariff removed, a 10% increase looks good. But, now, we still don’t have jobs, the car manufacturers have bigger profits, paid to shareholders who buy luxury imported goods…

There’s a robot in the future for all of us

I’m catching up on some reading this long weekend at the beach. I’m a few months behind in reading Wired magazine and am going thru the January issue right now. I just read an intriguing article on the coming “robot revolution.” I think that most of us don’t realize how much change the next couple of decades will bring. Even when I reflect on the accelerating tech curve thru the lens of my own 35 year career in IT I think I underestimate it. Robotics has brought us more reliable and more affordable products, and the service sector is next. Manufacturing will, between the combination of robotics and additive manufacturing (3D printing), require ever fewer employees. The service sector will be affected dramatically as these more flexible robots enter fields that have been thought the sole purview of humans. The Dilbert comic has been amusing for the last week or so as Dilbert’s programming job has come into the robotic crosshairs. I hope that the future does lean toward the Gene Roddenberry vision of people spending their lives doing what they want to do, rather than what they have to do, instead of any of a myriad dystopian views.

The lack of understanding of the magnitude of impending change is one of the things that irks me about politics today. Manufacturing jobs aren’t coming back, and services will take fewer people. I was reading in Thursday’s NYTimes that new radiologists are saddled with education debt and dim job prospects, due to technological change. We need better education in all disciplines, from STEM curricula to classics. STEM to help our kids compete in an increasingly technological world, and the liberal arts to make them better and more rounded people, to find satisfaction in music and arts in Gene’s future. We sure don’t need to shortchange education funding and basic research.

U.S. Household Wealth at Highest Level Since 2007

I have a digital subscription to the Wall Street Journal and get news alerts from it throughout the day via email. One in particular caught my eye today…”U.S. Household Wealth at Highest Level Since 2007,” said the headline. The linked article further says “…the net worth of U.S. households—the value of homes, stocks and other investments minus debts and other liabilities—rose 1.8% in the fourth quarter of 2012 to $66.07 trillion, the highest level since the final quarter of 2007, when the recession began, the Fed said.” The article went on to say that those with equity and real estate portfolios were beginning to feel flush, thus spending more and hopefully driving the economy forward.

At one level, this is good, as consumer spending is the engine that drives much of the economy, and this will hopefully help to pick up economic activity, decrease unemployment, and generally move the recovery along. However, I find it hard to reconcile this with the incessant assault against the social safety net and the impassioned cries to cut government spending, lest we need to tax the job and wealth creators. The percentage of government spending that goes to “discretionary” items (other than defense, social security, medicare and medicaid) is the lowest in 40 years, and the tax burden has been steadily decreasing over that time. Those with capital and real estate are doing well. If we don’t figure out how to start spending on infrastructure, education and research (as well as supporting a decent social safety net) we be both exacerbating the bimodal distribution of wealth and income as well as diminishing our pool of future capital and growth. I don’t agree with everything Charles Murray says in his book “Coming Apart,” but the phenomenon he vividly describes is what we see around us today.

Capitalism is effective in motivating economic activity (to reformulate Churchill’s statement on democracy, capitalism is the worst option except for all the others that have been tried). However, it needs to be tempered with compassion, and needs to have nets and gutter guards for those who can’t navigate today’s globalized economy as well as others. Government can be a force for good. We all pay taxes for things we would not choose to support, but in the pooling of resources, we can meet many diverse needs. In these days when the 1% (or even the top 5-10%) is seeing portfolio growth, why not support the modest tax increases necessary to provide those failsafes as well as the investment in education needed for the future?

Bipartisan cooperation on climate change?

A faint glimmer of hope? Cooperation between John Kerry and Lindsey Graham in an op-ed piece in the NYTimes. Given the counterproductive nature of most political discussion these days, it’s great to see folks from across the aisle willing to work together. I’d sure like to see some of this same spirit on the health care debate. In both cases, I’d say to those who are trying to subvert legislation, “what is your plan?” The status quo is not sustainable, neither in climate change nor health care. See also this op-ed piece by David Brooks for a reasonable, pragmatic view of the Baucus bill.

Yes we can begin to change the tenor of the debate to a productive dialog and actually get some things done.

REDD, a win-win opportunity?

A win-win opportunity to reduce carbon, help support people in the developing world, and save some trees, too? As this article from The Economist says, reducing emissions from deforestation and degradation (REDD), given the scale of potential reduction, even if it doesn’t live up to some of the most optimistic projections, still likely could make a substantive impact on carbon emissions. Worth a try…

A key thought here is that it’s time to start with actions, even if they aren’t perfect. We’ve got to attack climate change on multiple fronts, try some things, and if they work great. Things that don’t work, well, we can try something else. We’ll not make progress if we expect all solutions to be perfectly formed and congruent with a particular worldview. It’s going to take innovation, flexibility, thoughtfulness, the public sector and the private sector to make a dent in climate problems.

What happened to working together on problems?

Another great article from Thomas Friedman. What happened to “we” and why can’t we have a reasonable, sensible dialog about the serious problems facing the country. Why do so many of us want to hear only the sound bites that that support our beliefs?

Neither left nor right…we just need to talk, listen, and yes, compromise!

The older I grow, the less sure I am that I alone know the right answers. I’ve been certain I was right too many times and then realized that things were not as I thought. We’ve got many complex problems facing this country and the world. Global warming. Health care. Terrorism. Nuclear proliferation. These can only be addressed through serious, reasonable, rational dialog. Let’s work together!

Today’s Sputnik?

Great article by Thomas Friedman in today’s NYTimes. We can continue to support the entrenched status quo. We can say we like oil, gas & coal…it’s more important not to disrupt today’s economy…and then bequeath to our children an economy dominated by those countries who were willing to create disincentives to fossil fuel consumption, and support the development ofrenewable energy.

Or, we can decide that we need to mobilize, even if that means (gasp!) fuel taxes and continued incentives for alternative energy to really jump back into the race.

Oh, and we may save the planet in the process 😉

Social networking and support of Healthcare Reform

Fascinating development on September 3rd. I make no secret of my political leanings. I am a democrat and and am strongly in favor of Healthcare Reform. As a technologist, I understand the revolutionary impact that the Internet, with collaboration and communication applications have had on politics. I was still fascinated, though, to see a very simple thing in action. One of my colleagues posted a Twitter status requesting others to retweet or post a Facebook status. The message was simple:

No one should die because they cannot afford health care; no one should go broke because they get sick.

The poster was encouraged to leave this as the status on Twitter or Facebook all day. I was surprised both by how fast I saw similar updates on my Twitter feed and on my Facebook status feed. It was inspiring. I know that a) we got similar requests from many of our friends, and b) of course many of my friends are going to share my beliefs. Still, I was impressed.

Now, if we can just encourage all sides on this issue to dispense with the polemics and have a rational discussion and actually do something to help the 47M Americans who don’t have health care.

Why can’t we be logical and reasonable and get along?

I probably should be more active in the political process than I am…I try not to throw gasoline on the virtual fires with hyperbole and vitriol. I was catching up on reading the online version of the NYTimes (gee, too bad I couldn’t get my Sunday Times delivered to me on vacation) and two articles in particular struck me…one on the health care debate, and one on the Twitter DDoS attack. Both seem to be variations on a theme. If you are loud and noxious in your verbiage (voice or virtual), then you keep civil and rational political discourse from helping to achieve real, viable solutions to our problems.

The health care system in this country isn’t perfect. It does cost too much. I’m fortunate in that I have good health care coverage, and will have it in retirement, but we need to think beyond our own wallets. Lots of things need to change…and yes, I agree that tort reform is one of those things, along with universal coverage. Is a government-run system the right answer? I don’t know. Maybe we should try it and see. Medicare seems to have very satisfied customers, even those who don’t know it’s a government program 🙂 However, because the actions of a minority of folks with more volume than thoughtfulness drown out discussion, we can’t have the conversation we need to have. The Twitter DDoS is the same sort of thing. The Russians and Georgians have substantive differences that need to be talked out; engaging in polemics and doing things to shut down a rational speaker (from what little I know of the debate) while ignoring the collateral damage is irresponsible. Is it reasonable to just yell louder than the other guy? No. Do we have to tolerate those with different opinions than our own? Yes. The Norman Rockwell ideal of civil respect for the opinions of all is not the world of today, I fear. Does it really bother you to let others talk?