Increasing protectionism is unlikely to override forces of automation
The US did indeed lose about 5.6m manufacturing jobs between 2000 and 2010. But according to a study by the Center for Business and Economic Research at Ball State University, 85 per cent of these jobs losses are actually attributable to technological change — largely automation — rather than international trade.
How Trump Broke Campaign Norms But Still Won The Election
I was in Cleveland for the Republican convention. I think there was a Wall Street Journal story during that week or just right afterwards. And the headline was “GOP Delegates Think American Economy Is Terrible – Except Where They Live.” You know, there was a sense that most of their communities were doing OK, but they believe the entire American economy was troubled.
And I think we are seeing some combination of the way in which a generation’s worth of cable news has sort of conditioned people to nonstop and undifferentiated crisis around the world. The great difficulty of presenting positive developments in ways that don’t seem silly or sap-like. And also – I guess I’ve been thinking about this in the last day or two – the elevation of national politics to something like a religion
.. And I think national politics has become what you – what I think of as either a religious affiliation or a particularly sort of acrid sporting team loyalty where people who you otherwise can work with and compromise with and build a future with you either really feel connected to or you really feel just are the other based on which team they’re on, whether they’re on the Republican team, the Trump team, or the anti-Trump team.
And one other theme which no doubt we will explore, which is the ways in which people in non-coastal America feel as – not so much looked down on, but just ignored by media in particular
.. when my wife and I began our flying project back in 2013, our premise was to go to places that you would normally go to only if there were a flood or a tornado or a shooting as opposed to treating them as real entities and giving them the sort of three-dimensionality that you’d naturally give to the big coastal cities.
.. the opinion polls that came out before Donald Trump’s announcement when they asked people to sort of free associate across the country about the greatest threats to the nation, immigration was normally not in the top 10. You know, some people were very concerned about it, but not most people. So I would view this as a phenomenon of something about modern political national-level campaigning and media emphasis thereof has allowed us to get hyperpolarized and hyper, you know, upset about phenomena that in the daily life of the country are not seen as that threatening or disturbing.
.. I’ve interviewed most of the fallen Republicans and their campaign managers. And they really felt that the cable-based structure of those debates, where you had 10 or 11 people on the stage all crowding around for airtime, with Donald Trump standing dominant in the middle – that that helped him as well because it sort of preconditioned a “Survivor” or “Apprentice”-type show where you would knock off the weaklings one by one.
And there was always somebody who was weaker than Donald Trump, so he ended up seeming relatively stronger as time went on. And also, none of them – they didn’t figure out that they needed to join in together to attack him.
.. I think, in a potentially ominous way in the violation of norms. Donald Trump didn’t release his tax information. We thought in modern times that’s what a presidential candidate would have to do. During one of the debates Donald Trump said to Hillary Clinton that if he won, she would be in jail. This is something we have not heard from our candidates. We think of our candidates if they lose a bitter campaign, they say we offer our support to the next president. When Donald Trump suggested that he might not accept the results of the election, that also was unusual.
.. And Jimmy Carter, who had many thoughts to offer about speeches at all times, his thought about this was we don’t say that. You know, he’s a former president. We don’t talk about our opponents that way. We say we disagree with their views. We say they’ve made mistakes, but we don’t say their intentions are bad. And so to leap from there to saying that the incumbent president and his one purported successor are traitors, that is one more of the norms that we had – we’d not seen before this year.
.. I recorded a number of times where something happened and Donald Trump would immediately say it’s 100-percent clear that X happened. For example, this EgyptAir plane disappeared over the Atlantic some time ago – I’m sorry, over the Mediterranean some time ago. And still nobody knows what happened to that plane. But within, like, 30 minutes of its disappearing, Donald Trump was on the news saying it’s 100 percent clear this is terrorism. If you don’t know it’s terrorism, believe me, you’re suckers, folks. This is entirely what it is.
.. FALLOWS: So his main point, it’s based on something that is in my view largely just wrong and connected to something that is – that is real…
GROSS: I mean, wrong you disagree or factually incorrect?
FALLOWS: Factually incorrect – and that is the idea that essentially the economic problems America has is because China is – in particular but also Mexico and Japan and South Korea – are stealing our factories and stealing our jobs. And this is the main reason why the U.S. has the economic problems, the employment problems that it has. I think if 20 years ago, when China was beginning its ascent, you could say that a lot of the economic problems of the early ’90s were much more directly traceable to outsourcing decisions than anything that’s going on right now
.. But if you go many places now, the people who have been losing jobs in the last 10 years have been losing them only minorly to Mexico, China, South Korea, Japan. They’ve been losing them mainly to automation.
.. I can tell you from going back and forth to China that in every single country of the world, including China and Japan and South Korea and Mexico, the employment problem is the hollowing out of factory-type jobs because of automation.
.. I think to blame it as he does on bad-and-stupid deals with Mexico, China, Japan and South Korea both is out of date about the problem and really off about the solution because I don’t think there’s anybody who is involved with those countries who thinks that much tougher or canny or dealmakers is going to bring a lot more factories back to Indiana or Illinois.
Growth Can Solve the Debt Dilemma
Hitting a 3% target would result in an economy that’s nearly $13 trillion larger in 30 years.
But consider what happens to the CBO’s numbers assuming 3% annual growth. By 2040 the economy would expand not to $29.9 trillion, but to $38.3 trillion, according to an analysis by Research Affiliates, a California investment firm. That’s an additional output of $8.4 trillion—roughly the entire annual production today of every state west of the Mississippi River... Many blue-chip economists agree with the CBO that a growth rate of about 2% is the best that America can achieve... But the right policies can counter these trends. Productivity should surge with improvements in robotics, artificial intelligence and automation. Self-driving cars could cut transportation costs dramatically in coming years. Washington could facilitate this renaissance by giving companies an incentive to invest.The Tax Foundation predicted last year that the House Republican tax reform alone would raise wages by 8%, GDP by 9% and capital investment by 28%... at least seven million Americans in their prime working years—18 to 65—would be on the job today if labor-force participation had not dropped since 2000. A strong economy, paired with welfare reforms, could draw millions back to work... And immigration is America’s natural demographic safety valve.
Fear of Automation’s Dark Side Leads to Calls for Action
Some investors back policy or private-industry moves to head off a dystopian future
“You can’t simply command a welder who just lost his job and has a family of four to become an AI TensorFlow expert,” said Mr. Ocko, managing partner at Data Collective.
.. Among the ideas circulating are giving displaced workers tax credits to own robots or other technology that replaces them. Others have proposed new kinds of insurance or expanding the social safety net, along with expanding job-skills training
.. A PricewaterhouseCoopers report predicted that automation will place 38% of the U.S. labor force at high risk in the next 15 years.
.. “You’re talking an almost 10x decrease in price for services like that,” Mr. Harpalani said. “That’s happening in every single service: legal, financial, security. Prices are going to drop so substantially that people who couldn’t see a dermatologist will have one that’s software-enabled.”
.. “At the end of the day I’d rather have a future with free housing or free basics for everyone in the world instead of hanging onto a few (traditional) jobs.”
.. Others in tech such as Bill Gates have weighed in, saying that companies using automation or robots should be taxed.
.. His other ideas: community college curricula should adjust every 6 to 12 months based on economic changes; government programs focus on new growth jobs categories; and tax credits to foster growth in industries that are harder to automate.
.. “There are plenty of forms of work society needs: elder care, teachers. You don’t need to look to the future. Just solve that now.”