Wednesday, August 20, 2014

White House: "Boomers Reason for Declining Work Force"

A White House report released last month (July 2014) analyzed the labor force participation rate since late 2007 (when the Great Recession first began). And almost its entire 53-page report is dedicated to explaining that the main reason for a declining labor force was because of Baby Boomers dropping out or retiring, beginning in 2008 at the age 62. Even though those 55 and older make up a smaller share of the work force, the White House is saying they account for HALF of the drop in the labor force.

And the report also lays blame on the Baby Boomers as "a factor slowing growth of potential real GDP." Below are a few excerpts from the White House report:

  • About half of the decline is due to the aging of the population. Because older individuals participate in the labor force at lower rates than younger workers, the aging of the population exerts downward pressure on the overall labor force participation rate. While older workers today are participating in the labor force at higher rates than older workers of previous generations, there is still a very large drop-off in participation when workers enter their early 60s.
  • From the beginning of 2011 to the second quarter of 2014, the participation rate fell by 1.4 percentage points. Around 70 percent of that decline (1.0 percentage point) can be directly attributed to the aging of the population and increased retirements.
  • Participation rates have long been influenced by an aging population, however its impact became more pronounced starting in 2008 when the first cohort of baby boomers (those born in 1946) turned 62 and became eligible for early Social Security benefits.
  • Starting in 2008, the share of the working age population over age 55 began to rise rapidly. Also, while the share of the population over age 65 has risen gradually since 1960 due to increased longevity, the increase accelerated in 2008 and is now rising faster than at any point since 1960.
  • This sharp and predictable retirement of a large cohort coincided with the start of the Great Recession, making it difficult to separate the effects of the economy and normal demographic patterns on participation.
  • Even though these baby boomers are more likely to work at older ages than their predecessors, the employment rates at older ages are still much lower than for younger workers.
  • Taken together, the aging of the population and the business cycle account for the vast majority of the decline in the participation rate since 2007 in all of the studies. While there are some differences in the share attributed to the aging of the population, the median estimate is that half of the decline is due to aging.
  • The largest single factor in the decline of the participation rate since the end of 2007 is the aging of the workforce — something that was predicted well before the Great Recession. Every year since 2000, the Economic Report of the President has mentioned the post-2008 decline in the labor force participation rate as a factor slowing growth of potential real GDP.
  • The first baby boomers reached retirement age in 2008, and over the next decade and a half, increasingly-large cohorts of baby boomers will follow suit.
  • In 2009, 16 percent of the adult population was at or above the retirement age; the Social Security Administration projects this fraction will grow to 25 percent by 2029, increasing by half over two decades.
  • The retirement of the baby boom generation is particularly consequential for the participation rate, because the labor force participation rate falls sharply as workers grow older.
  • Because older individuals participate in the labor force at lower rates than other age groups, the shift in the age structure from aging baby boomers is responsible for a substantial portion of the decline in the participation rate.

Aging Work Force, Slack Labor Market — and those Not in the labor Force (The Rebuttal)

For a long time I’ve been arguing that it’s not older people or retirees that are “dropping out” of the labor force that has been driving the low participation rate, but rather “prime-age” people who can’t find jobs.

The charts below from the St. Louis Fed start in April 2000 (when the decline in the LFPR first began) to last month. I’ve been saying that, besides older workers who were laid off and forced to take early retirements, most older workers were working longer and putting off retirements to recoup losses in their 401ks and equity in their homes. (This was confirmed by several AARP surveys as well).

According to the charts below from the St. Louis Fed, it seems to shows that, for older workers, the LFPR has been pretty much steady since the crash of 2008, but prime-age people show a huge decline since the recession. (Any comments? Am I looking at the data wrong?)

Last year I wrote that the employment-population ratio was at a 30 year low; and that the labor force participation rate was at a 35 year low. This post addresses some of the current debates as to "why", and what some economists call "secular stagnation" related to a weak labor market and stagnant wages. The slack in the labor pool, I argue, is due to an over-saturated labor market. The unemployed (and those dropping out of the labor force) are mostly "prime age" potential workers — and not those who are "aging" or "retiring" — but mostly those who the Bureau of Labor Statistics and economists (and now, the White House) are saying are "dropping out" of the labor force or retiring.

Below in the first chart is the "employment rate" and the "labor force participation rate " for prime-age workers (ages 25-54) from April 2000 (when the long decline first began) to July 2014. And the second chart compares the participation rate between the 25-54-year-old group and the 55-and-over group for the same period. This seems to totally contradict the White House report, which defies logic and common sense.

LFPR - Fed

LFPR - Fed

Recently from the Financial Times (by Adam Posen) Keep Interest Rates Low until the Hidden Jobless Return to Work:

There has been a legitimate debate over what lies behind the low U.S. labor force participation rate, which measures the proportion of adults who are either working or looking for work. Some blame demographics, with two large cohorts (ageing baby boomers and women of child-bearing age) both disproportionately likely to leave the workforce. Others take a different view, arguing that wages are being held down in areas of the country where statisticians count more people as unemployed or no longer looking for work. (Also read: Wages and Labor Market Slack).

From Think Advisor:

The aging of the U.S. population, cyclical factors [defined] related to the Great Recession and a mysterious third factor seem to be behind the widely discussed decline in the labor force participation rate, according to the White House Council of Economic Advisors.

Writing for the economic research site (Understanding the decline in the labour force participation rate in the United States) the economists who advise President Obama lay out their data and analysis to explain a trend that some critics have blamed on Obama's policies.

The key turning point was in 2008, though better known as the global financial crisis. It was also the beginning of a U.S. retirement boom as the first baby boomers (born in 1946) turned age 62 and became eligible for Social Security benefits, adding that “this decline, however, was amplified by the recession". They thus calculate that aging accounted for about half the decline in workforce participation.

* Editor's Note: It should be noted that almost half of all Social Security retirements since 2008 were early ones (with reduced benefits at age 62), and one reason may be because, as older workers who were caught early in the massive layoffs, they became "long-term unemployed" early into the Great Recession and were never rehired again. And those who went on Social Security disability since 2008 only account for a very tiny fraction of the entire labor force. (Here is Brad Delong's and another rebuttal to the article.)

And what is the point of counting people who are retiring as an argument for a declining participation rate by saying "demographics" or "an aging work force" is the cause (or the main cause) — just because they chose to be retired (or were forced out of the job market)?

Reader's comment at Mark Thoma's blog: "The 25-54 cohort is the *core* working age cohort for which we have data available. It is the *biggest* deal in terms of employment data. It would be nice to have 18-65 but that doesn't seem to be collected — probably to avoid the inclusion of "college age" students (very broadly defined) and "early retirees" (very broadly defined). Given the employment disaster for college grads since 2008 (or 2000, if you want to look further), the exclusion of 18-25 year olds *helps* the very weak employment ratio. The employed-to-cohort-population measurements are *percentages* — so the aging of Boomers, etc. is irrelevant. The question is why 2014's group of 25-54 are having a much harder time finding jobs than 1999's group of 25-54."

Last year the U.S. had a record number of American workers who retired on Social Security: 1,171,737 — and we also had a record number of high school graduates as well: 3,092,290 (almost 3 times as many.) So with 1 million retiring and 3 million graduating from high school every year (not counting dropouts or college grads), and only an average of 350,000 people per year since the recession that were added in payment status to the Social Security disability rolls, then attributing "half" the decline in the labor force to an "aging population" is not an accurate assessment.

(Now back to the Financial Times article)

Meanwhile, there is growing evidence that long-term unemployment, or even under-employment, does lasting damage to the ability of younger people to find work that pays well throughout their working lives. Under current conditions it is labor slack that does lasting damage, whereas brief inflationary episodes will have only a transient impact.

There are clear indications that wage growth is being kept down by the overall state of the labor market, and raising rates would further depress demand. Allowing excess unemployment to persist is likely to do more lasting damage than allowing inflation to rise above the target

As Fed chairman in the 1980s, Paul Volcker was right to resist calls to loosen monetary policy in the face of high unemployment, at a time when spiraling inflation would have done lasting damage. Now the risks are reversed, and the right course is to hold off rate rises to tackle persistent unemployment that threatens permanent harm. This, too, will attract criticism. But, like their predecessors, Ms Yellen and the Federal Open Market Committee need to hang tough.

* That article at the Financial Times was written by Adam Posen, president of the Peterson Institute for International Economics in Washington D.C., who was once a member of the Monetary Policy Committee of the Bank of England. He also sits on the panel of economic advisers to the U.S. Congressional Budget Office. Posen's other positions include being a member of the Council on Foreign Relations and the Trilateral Commission — as well as other groups. He has been the recipient of major research grants from the European Commission, the Sloan Foundation, the Ford Foundation, and the German Marshall Fund of the United States.

Now here is the Atlanta Fed, recently discussing whether or not there is any pressure for employers to raise wages — and my comment (without links), which was left for moderation, but was edited as follows:

With such a large pool of untapped labor — almost 10 million currently "counted" as unemployed — and with another 11 million "not in the labor force" since the recession officially ended (June 2009), I doubt if any pressure on compensation will soon break loose. Add to that — more offshoring, automation/robotics, a rise in part-time work and more H-1B visas — and I hardly see any reason why the "job creators" will feel any need to raise wages (unless of course, the federal and state minimum wages laws force them to do so). As it is now, when many employers can, they will use wage theft with undocumented workers and reclassify many others as "independent contractors". So where's the pressure to raise wages?

Final Note: The Labor Force is Shrinking for Lack of Jobs and not because baby boomers are shuffling into retirement — and that's Why a Basic Income will Eventually be Needed. For a long time I’ve been arguing that it’s not older people or retirees that are “dropping out” of the labor force that has been driving the low “participation rate”, but rather “prime-age” people who can’t find jobs. The White House reports is lipstick on a pig.

Monday, August 18, 2014

When Human Labor becomes Obsolete

An automation engineer might be one of the safest jobs of the future — designing software for robots with artificial intelligence and bots — to put everyone else out of work.

In a 2013 study by Carl Frey and Michael Osborne of the University of Oxford, they looked at 702 types of jobs in the United States and made judgments about whether there was a low, medium, or high risk that technology would displace workers in those jobs over the next 10 to 20 years. Their startling conclusions: 47 percent of total U.S. employees have a high risk of being displaced by technology, and 19 percent have a medium risk. That means that 66 percent of the U.S. workforce has a medium to high risk of job destruction. If they are only half right, the numbers are staggering.

Apple’s contract manufacturer (Foxconn) is reported to be replacing up to one million workers with robots in order to meet expected demand for the iPhone 6. Amazon already deploys an army of robots to fetch items in its warehouses. Machines powered by artificial intelligence (AI) are now reading MRIs, sorting through thousands of legal cases to identify pertinent information, and writing news articles.

The best case that anyone could ever make for a Guaranteed Basic Income can be found in this new 15-minute documentary (posted at YouTube). It's about robots and "bots" eventually replacing most of our jobs (and not just low-skilled labor jobs). It may sound like some story plot from the Twilight Zone, but it's not — it's very real. In the not-too-distant future, most of us humans may very well be "unemployable" through no fault of our own. As a matter of fact, it's inevitable. Watch one of the most fascinating videos you'll ever see on this subject. (Edited text is below.)

Humans Need not Apply

Every human used to have to hunt or gather to survive. But humans are "smartly lazy" — so we made tools to make our work easier. From sticks, to plows, to tractors — we’ve gone from everyone needing to make food, to modern agriculture, with almost no one needing to make food — and yet we still have abundance.

Of course, it’s not just farming, it’s everything. We’ve spent the last several thousand years building tools to reduce physical labor of all kinds. These are mechanical muscles — stronger, more reliable, and more tireless than human muscles could ever be.

And that's a good thing. Replacing human labor with mechanical muscles frees people to specialize — and that leaves everyone better off, even though still doing physical labor. This is how economies grow and standards of living rise.

Some people have specialized to be programmers and engineers, whose job it is to build mechanical minds. Just as mechanical muscles made human labor less in demand, so are mechanical minds making human brain-labor less in demand.

This is an economic revolution. And you may think we've been here before, but we haven't. This time is different.

When you think of automation, you probably think of a giant, custom-built, expensive, efficient (but really dumb) robot that's blind to the world and their own work. They would be a scary kind of automation, but they haven't taken over the world yet — because they're only cost effective in narrow situations.

But they are the old kind of automation, now there's a new kind.

Meet "Baxter".

Unlike these things which require skilled operators and technicians (and millions of dollars), Baxter has vision; and can learn what you want him to do by watching you do it. And he costs less than the average annual salary of a human worker. Unlike his older brothers, he isn't pre-programmed for one specific job — he can do whatever work is within the reach of his arms. Baxter is what might be thought of as a "general-purpose" robot, and general purpose is a big deal.

Think of computers: they too started out as highly customized and very expensive; but when cheapish general-purpose computers later appeared, they quickly became vital to everything. A general-purpose computer can just as easily calculate change or assign seats on an airplane — or play a game — or do anything else, just by just swapping its software. And this huge demand for computers of all kinds is what makes them both more powerful and cheaper every year.

Baxter today is what the computer was in the 1980s. He’s not the apex, but the beginning. Even if Baxter is slow, his hourly cost is only pennies worth of electricity — while his meat-based competition (humans) costs at least the federal mandated minimum wage. Even a tenth of Baxter's speed is still cost effective when it's a hundred times cheaper than "people". And while Baxter isn't as smart as some of the other things we'll discuss in this post, he's smart enough today to take over many of our current low-skilled jobs.

And we've already seen how robots dumber than Baxter can replace jobs. In new supermarkets, what used to be 30 humans will now be one human overseeing 30 cashier robots.

Or what about hundreds of thousands baristas who are employed world-wide? There’s a barista robot coming for them too. Sure, maybe your guy makes your double-mocha-whatever just perfect — and you’d never trust anyone else to so it — but millions of people don’t care, and just want a decent cup of coffee. Oh, and by the way — this robot is actually a giant network of robots that remembers who you are and how you like your coffee — no matter where you are in the world. Pretty convenient.

We think of technological change as fancy, new, and expensive stuff — but the real change comes from the last decade's stuff getting cheaper and faster. That's what's happening to robots now. And because their mechanical minds are capable of decision-making, they are out-competing humans for jobs in a way that no pure mechanical muscle ever could.

Imagine a pair of horses in the early 1900s, and they were talking about technology. One worries that all these new mechanical muscles will make horses unnecessary. The other horse reminds him that everything so far has made their lives easier — remember all that farm work they used to do? Remember running coast-to-coast delivering mail? Remember riding into battle? All terrible stuff.. Whereas, these city jobs are pretty cushy — and with so many humans in the cities, there are more jobs for horses than ever before. And if ever this "car thingy" takes off, you might say, there will be other new jobs for horses that we can't even imagine today.

But you dear viewer, from beyond 2000, know what has happened — there are still working horses, but nothing like before. The horse population peaked in 1915, and from that point on it was nothing but down.

There isn’t a rule of economics that says better technology makes more and/or better jobs for horses. It sounds shockingly dumb to even say that out loud. But swap "horses" for "humans" and suddenly people think it sounds about right.

As mechanical muscles pushed horses out of the economy, mechanical minds will do the same to humans. Not immediately, not everywhere, but in large enough numbers — and soon enough that it's going to be a huge problem if we are not prepared. And guess what? We are NOT prepared.

You (as one horse), like the second horse, may look at the state of technology now and think it can’t possibly replace your job. But technology gets better, cheaper, and faster at a rate that biology can’t match. Just as the automobile was the beginning of the end for the horse, so now does the modern car show us the shape of things to come.

Self-driving cars aren't the future: they're already here — AND they work. Self-driving cars have traveled hundreds of thousands of miles up and down the California coast and through cities — all without any human intervention. The question is not "if" they'll replaces cars, but "how quickly". They don’t need to be perfect, they just need to be better than us humans.

Humans drivers, by the way, kill 40,000 people a year with cars — just in the United States. Given that self-driving cars don’t blink, don’t text while driving, don’t get sleepy or stupid, or drink-and-drive, it easy to see them being better than humans because they already are.

Now, to describe self-driving cars as "cars" at all is like calling the first cars "mechanical horses". Cars, in all their forms, are so much more than horses — that using the name "car" limits your thinking about what they can even do. Lets call self-driving cars what they really are: Autos...the solution to the transport-objects-from-point-A-to-point-B problem.

Traditional cars happen to be human-sized to transport humans, but tiny autos can work in warehouses and gigantic autos can work in pit mines. Moving stuff around is, who knows how many jobs, but the transportation industry in the United States employs about three million people. Extrapolating world-wide, that’s something like 70 million jobs at a minimum.

Those jobs are over. The usual argument is that unions will prevent it. But history is filled with workers who fought technology that would replace them — and the workers always loose. Economics always wins and there are huge incentives across wildly diverse industries to adopt autos.

For many transportation companies, humans are about a third of their total operating costs. That's just the straight salary costs. Humans sleeping in their long-haul trucks also costs time and money. Accidents cost money. Carelessness costs money. If you think insurance companies will be against it, guess what? Their perfect driver is one who pays their smallest premium, but never gets into an accident.

The self-driving autos are coming, and they're the first place where most people will really see the robots changing society. But there are many other places in the economy where the same thing is happening, just less visibly. So it goes with autos, so it goes for everything else.

It's easy to look at Autos and Baxters and think: technology has always gotten rid of the low-skill jobs that we don't want people doing anyway. They'll get more skilled and do better educated jobs — like they've always done.

Even if we ignored the problem of pushing a hundred-million additional people through ever expensive higher education, white-collar work is no safe haven either. If your job is sitting in front of a screen and typing and clicking — like maybe you're supposed to be doing right now — the "bots" are coming for you too buddy.

Software bots are both intangible and a lot faster and cheaper than physical robots. Given what white collar workers are (from a companies perspective), both more expensive and more numerous — and the incentive to automate their work is now greater today than low skilled work. And that's just what automation engineers are for. These are skilled programmers whose entire job is to replace your
job with a software bot.

You may think even the world's smartest automation engineer could never make a bot that could do your job — and you may be right — but the cutting edge of programming isn't just super-smart programmers writing bots — it's super-smart programmers writing bots that can teach themselves how to do things that the programmer could never teach them to do. Got that?

How that works is well beyond the scope of this post (and video), but the bottom line is — there are limited ways to show a bot a bunch of stuff to do, show the bot a bunch of correctly done stuff, and it can figure out how to do the job to be done. Even with just a goal, and no example of how to do it, the bots can still learn.

Take the stock market, which in many ways, is no longer a human endeavor. It's mostly bots that taught themselves to trade stocks — and trading stocks with other bots that taught themselves. Again: it's not bots that are executing orders based on what their human controllers want, it's bots making the decisions of what to buy and sell on their own. As a result, the floor of the New York Stock exchange isn't filled with traders doing their day jobs anymore, it's largely a TV set.

So as bots have learned the stock market, bots have also learned to write. If you've picked up a newspaper lately you've probably already read a story written by a bot. There are companies that are teaching bots to write anything: Sports stories, TPS reports, even say, those quarterly reports that you might write at work. Paper work, decision making, writing (and a lot of other human work), all falls into that category — and the demand for human metal labor is these areas is on the way down.

But surely "the professions" are safe from bots? Yes?

When you think of a "lawyer" it's easy to think of "trials". But the bulk of lawyering is actually drafting legal documents predicting the likely outcome and impact of lawsuits — and something called "discovery", which is where boxes of paperwork gets dumped on the lawyers — and they need to find the pattern, or the one out-of-place transaction among it all. This can all be done by bot work. 

Discovery, in particular, is already not a human job in many firms. Not because there isn't paperwork to go through, there's more of it than ever. But because clever research bots sift through millions of emails and memos and accounts in hours, not weeks, crushing human researchers in terms of — not just cost and time, but most importantly — accuracy. Bots don't get sleepy reading through a million emails.

But that's only the simple stuff. IBM has a bot named "Watson". You may have seen him on TV destroying humans on the TV game show Jeopardy — but that was just a fun side project for him. Watson's real day-job is to be the best doctor in the world: to understand what people say in their own words, and to give back an accurate diagnoses. And he's already doing that at Slone-Kettering, giving guidance on lung cancer treatments.

Just as autos don’t need to be perfect (they just need to make fewer mistakes than humans), the same goes for doctor bots. Human doctors are by no means perfect. The frequency and severity of a misdiagnosis is terrifying — and human doctors are severely limited in dealing with a human's complicated medical history. Understanding every drug and every drug's interaction with every other drug is beyond the scope of a human's knowability. Especially when there are research robots, whose whole job it is to test thousands of new drugs at a time.

Human doctors can only improve through their own experiences. But doctor bots can learn from the experiences of every doctor bot. They can read the latest in medical research, and keep track of everything that happens to all his patients world-wide, and make correlations that would be impossible to find otherwise.

But not all doctors will go away, although, when doctor bots are comparable to humans — and they're only as far away as your phone — then the need for general doctors will be far less. So everyone — professionals, white-collar workers and low-skill workers — all have something to worry about (becoming totally obsolete and permanently unemployed).

But perhaps you're still not worried because you're "a special creative snowflake". Well guess what? You're not that special. Creativity may feel like magic, but it isn't. The brain is a complicated machine — perhaps the most complicated machine in the whole universe; but that hasn't stopped us from trying to simulate it. There is this notion that, just as mechanical muscles allowed us to move into thinking jobs, that mechanical minds will allow us all to move into creative work. But even if we assume the human mind is magically creative — it's not. 

But just for the sake of argument: artistic creativity isn't what the majority of jobs depend on. The number of writers and poets and directors and actors and artists (who actually make a living doing this type of work) is a tiny, tiny portion of the labor force. And given that these are professions that are dependent on popularity, they will always be a small part of the population. And there's no such thing as an oil painting or poem-based economy.

Oh, and by the way — the music in the background of the video embedded in this page? It was written by a bot. Her name is Emily Howel, and she can write an infinite amount of new music all day long for free. And people can't tell the difference between her and human composers when put to a blind test.

Talking about "artificial creativity" gets weird fast — what does that even mean? But it's nonetheless a developing field. People used to think that playing chess was a uniquely creative human skill that machines could never do...right up until the time they beat the best of us.

And so it goes for all human talent.

This might have been a lot to take in, and you might want to reject it. It's easy to be cynical of the endless and idiotic predictions of those futures that never were. So that's why it's important to emphasize once again — this stuff is NOT science fiction. The robots are here, right now. There is a terrifying amount of working automation already in the labs and warehouses that is proof of the concept.

We have been through economic revolutions before, but the robot revolution is different.

Horses aren't unemployed now because they got lazy as a species. They became "unemployable". There's little work that a horse can do that pays for its housing and hay. And many bright, perfectly capable humans will find themselves as the modern horse: unemployable, through no fault of their own.

But if you still think new types of jobs will save us, here is one final point to consider. The US census in 1776 tracked only a few kinds of jobs. Now there are hundreds of kinds of jobs, but the new ones that technology have recently created are not a significant part of the labor force. But don't think that every barista and office worker will have to lose their job before things become a problem. The unemployment rate during the great depression was 25%.

This post (and video) isn't about how automation is "bad" — but rather that automation is inevitable. It's a tool to produce abundance for little cost and effort. We need to start thinking about that now — about what to do when large sections of the population are unemployable (through no fault of their own). We need to plan for what we will need to do in a future where, for most jobs, humans need not apply.

* Editors Note: I transposed the text of the video below from the original text that was provided for the video (seen here at the producer's website). After reading their text, I noticed subtle variations in the text that led me to believe that the text itself was transcribed by a robot/bot as well. To me, not only did the voice in the video not sound human, but neither did the words in their text read like it was written by a human either. But in the end, I am more convinced than ever that, eventually millions of us will need a Basic Income — because there simply won't be enough jobs available for everyone to earn a living wage.

* Further Reading:

Sunday, August 17, 2014

Economic Propaganda and Wonkish Babble — Secular Stagnation?

Paul Krugman recently defined "secular stagnation" as an underlying change in the economy (such as slow growth in the working-age population) — and that it is not the same thing as a slow growing of economic potential, although that might also contribute to secular stagnation — by reducing investment demand [as opposed to consumer demand]. He says, "It’s a demand-side, not a supply-side concept".

Editor's Note: I'll attempt to translate this into a simple analogy:

Saturday, August 16, 2014

Why a Basic Income will Eventually be Needed

Sometimes an entire region can have an economy dependent on one industry; and sometimes an entire town can be born of a single employer. And if the biggest job creator leaves town, so do most of the jobs. What happens to all those unemployed workers who were left behind? What happens after a factory closes (one that may have employed half the town) when the company's production is moved overseas for cheaper labor? Who would be left to spend money at the local grocer, the gas station, the barber shop or at the local tavern? How do all those unemployed workers sustain themselves if no other employers move to town and rehire them? An entire town that was born of a single employer can also die because of a single employer.

Some people call this creative destruction — creating excessive wealth for a few by destroying sustainable wealth for the many. That's why a Basic Income will eventually be needed. According to data from the Bureau of Labor Statistics, from the first quarter of 2001 to the end of 2012, the U.S. has lost 64,037 manufacturing facilities. It's no secret as to what happened to all these American jobs.

Creative Destruction

Why Private Equity Firms want to Export US Oil

Jeffery Bezo's Washington Post says the government should allow exports of U.S. crude oil:

The U.S. has become an energy powerhouse, with crude oil production leaping some 48 percent in the last few years. New technology is tapping oil-bearing shale formations in states such as North Dakota and Texas. Most of this product is light oil, which does not require heavy refining. Some of the most advanced refineries in the world are along the Gulf Coast , but that’s actually a problem: Their owners invested in expensive facilities suited to refining heavier crude, so there is a mismatch between the refining infrastructure and the type of crude flowing from U.S. wells. In the deeply interconnected global oil market, in which borders matter less than many people think, the obvious solution is to allow oil companies to ship the light crude to refineries suited for processing it, supporting U.S. profits and U.S. jobs in the process, and to tolerate imports of crude oil that U.S. refineries can handle.

When the article mentioned that this export nonsense is supported by the Council on Foreign Relations, we had to look to see who was on their board of directors. Below is a short list of some of their officers and directors , but it gives you an idea of the supposed "non-partisan" nature of their Board:

Thursday, August 14, 2014

Beyond the Dreams of Avarice --- Nick Hanauer

Avarice is one of the Seven Deadly Sins --- It's an insatiable greed for riches; an inordinate, miserly desire to gain and hoard wealth.

In a 20 minute speech, the internet billionaire Nick Hanauer explains that his life is like most plutocrats. And he also says he has been obscenely rewarded for his efforts (video and highlights below).

Wednesday, August 6, 2014

Since Recession Ended, 11 Million more not in Work Force

All the jobs that were lost during the Great Recession weren't all recently recovered as the media and the politicians claim. All the job gains that occurred since the recession had ended were mostly new jobs to accommodate about 50% of all new entrants into the labor force (high school and college graduates), while the other 8.7 million original jobs lost during the recession were lost forever -- and those jobs represent the huge uptick of those unemployed who are no longer counted as part of the labor force since the recession ended. (L.A. Times: Economy has Recovered 8.7 Million Jobs Lost in the Great Recession)

* According to the Bureau of Labor Statistics, we have 11 million more working-age adults today who are COUNTED as "Not in Labor Force" than we did when the recession ended in June 2009 ---

Sunday, May 11, 2014

8.9 Million on Disability vs. 92.5 Million not in Labor Force

In a post from the Federal Reserve of Atlanta: How Has Disability Affected Labor Force Participation? they note, "How much can the change in demographics during the past decade explain the rise in disability or illness as a reason for not participating in the labor market? The answer seems to be: Not a lot."

Monday, April 7, 2014

Bill Maher: The Disappearing Middle Class

From New rules -- Real Time with Bill Maher -- April 4, 2014

And finally, New Rule: now that the media is done freaking out about the missing jetliner, how about going on a search for America's vanishing middle class? (audience cheering)

Thursday, March 27, 2014

Who Cares about the Long-term Unemployed?

The Washington Post (March 24, 2014) The long-term unemployed are not lazy, coddled, hammocked or enjoying a taxpayer-funded vacation. They are extremely unlucky — and getting unluckier by the day. It was already known that the longer workers have been out of a job, the lower their chance of finding work. From 2008 to 2012, only one in 10 people who were already long-term unemployed had returned to steady, full-time employment a year later. The rest had been toiling in part-time or transitory jobs or had dropped out of the labor force altogether.