Category: Corporate Welfare

It’s Past Time To Make Changes To Our Economic System

The Daily Escape:

2011 Art piece by Steven Lambert

Does capitalism work for you? Well, you certainly work for capitalists. The real question is whether capitalism still provides economic security to all of us.

Steve Lambert, the artist who designed the sign, engaged with people across America over a three-year period about whether capitalism was still working. He learned that people were split about 50/50 on the premise:

People usually first react to the piece by falling back on the comfort of abstractions and repeating popular myths. For example, the true/false dilemma is much easier to resolve when the only alternatives to capitalism are presumed to be failed communist dictatorships. It’s also much easier to pretend that the only “true” definition of capitalism is the kind of free-market extreme idolized by thinkers like Ayn Rand and Friedrich Hayek

Or thinkers like Paul Ryan, Mitch McConnell and Donald Trump. Lambert learned that people generally agreed with the concept, assuming “you are willing to work hard, or work smarter”:

I’ve always found the formulation “work hard, work smart” disturbing. When you invert the expression, it implies: if capitalism doesn’t work for you (that is, if you’re poor, out of work or have a demeaning job), it’s your fault. To put it more bluntly, you are lazy and stupid.

If we ignore the fact that until recently, wages have stagnated for decades, and that what most people earn in a lifetime is insufficient to cover a modestly comfortable retirement, maybe you can say that capitalism is working.

We have been told that federal budget deficits impair our ability to grow the economy, or to put food on our individual tables. In fact the opposite is true. This idea makes us believe that our ability to earn a living requires some degree of suffering by other Americans.

As Claire Connelly says: (emphasis by Wrongo)

“We can’t afford it” has been the proverbial comforter of opponents of the welfare state harking back to the Clinton / Blair days….This argument has been used as an emotional crutch for people who don’t want to admit that they’re comfortable with homelessness and unemployment….If their bottom line is stable.

This lie sets us against each other, implying that the well-being of everyone else is a direct threat to our own. And who wins? The beneficiaries of the newly lowered taxes, corporate America and its management teams. More from Connelly:

Do we really want to live in a world….Where most people will be lucky to earn minimum wage, or wait for months to get paid. If at all. A world where we are not entitled either to a job, or an education, or affordable health care or a social safety net?

We are likely to see a $1.3 Trillion budget pass both houses of Congress this week. It is deficit spending run wild. Wrongo knows that both parties believe that deficits don’t matter, and to a great extent, he agrees.

But these deficits are larger than they had to be, due to the massive corporate and wealthy individual tax cuts the Republican House and Senate just passed. And it’s not only the size of the deficits, it’s the mis-allocation of funds by our neo-con overlords.

This is what capitalism has delivered for America: More than 45 million of us (14.5%) live in poverty. In 2016, another 49.5 million Americans were age 65 and older, and half of them (24.75 million) had yearly income of less than $23,394.

That adds up to about 70 million (22%) of Americans.

One idea that is gaining attention is a Jobs Guarantee program. The Center on Budget and Policy Priorities (CBPP) recently released a paper arguing for a national jobs guarantee through a national infrastructure bank. The CBPP plan envisions an infrastructure bank that would fund vital projects and ensure that jobs are well-paid. The government would use this job-creating ability to expand jobs in sectors where the market won’t currently invest, like a national high-speed internet network.

Government guarantees of employment aren’t radical. They aren’t communism, or socialism. We did it before with the New Deal. It reinforces traditional American values around work, and it builds the tax base by taxation on the jobs created. Here’s a final quote from Steve Lambert:

My favorite response to the sign was from a 17-year-old high school student in Boston. She said: “Capitalism can’t work for everyone. If it did, it wouldn’t be capitalism.”

This is where the conversation needs to go: We have to change an economic system that fails so many.

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Monday Cartoon Blogging – March 12, 2018

Wrongo and Ms. Oh So Right have safely returned to the Mansion of Wrong after our week in warmer climes. The timing of our travel was perfect! We were away during the two nor’easters that dumped 18” of snow on the Mansion, and we are back before the next snow on Tuesday. Here is a picture of sunrise on the day we pulled out of our FL rental:

On to cartoons. Trump will try to show North Korea’s Kim the art of the deal without using his hands:

This, by a right-wing cartoonist, makes Trump look like he knows something about tariffs. That’s untrue:

Trump baffles some of the base, but others get the picture:

The GOP is still in denial about Trump’s steel tariffs:

Jefferson Beauregard Sessions redefines the “Golden Door” of American immigration:

Trump’s decision to again allow importation of elephant parts shows his character:

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Steel Tariffs Against China Make Sense

The Daily Escape:

Winter Morning, Moscow Oblast, Russia – 2018 photo by kostya8. Good luck to those in New England today!

“Shortly, the public will be unable to reason or think for themselves. They’ll only be able to parrot the information they’ve been given on the previous night’s news” – Zbigniew Brzezinski

Did Wrongo ever tell you about meeting Zbig? We had lunch together in the officer’s dining room at the big NY bank that Wrongo was with, sometime in the early 1980’s. It must have been a real comedown for him, lunching with an international department strategic planner, after serving four presidents. We focused on the (then) current state of the Asian economies, but his eyes scanned the room, looking (maybe hoping) for a better deal than simply talking to a young vice president.

Zbig’s quote is on the money. It is America today: We don’t figure things out, because everyone is an expert. Today, anyone you meet already knows everything. They’ve taken a quick look at Wikipedia, and they know that their opinions are worth as much as any expert.

If average people can be experts, why is Trump’s effort to do a better deal on trade so off the mark?

His proposed steel and aluminum tariffs are levied against all producers. The table below from a 2016 Duke University study, shows production by country. You can see the extent to which China is an outlier:

Note that the US is fourth on the list. Take a look at where Canada ranks. It’s hard to see Canada as a strategic risk to US military needs, but since Trump plans to deploy a blanket steel tariff, everyone suffers, at least until the retaliation begins. The Duke study makes the point:

The global steel sector is once again in a state of overcapacity. The sector, predominantly fueled by China’s expansion since 2000, has grown to over 2,300 million metric tons (MT) while only needing 1,500 MT to meet global demand. The result is a global steel sector at unviable profit levels and an influx of cheap steel in the global trading system adversely affecting companies, workers, and the global trading regime.

Both George W. Bush and Barack Obama applied steel tariffs. Bush imposed broad tariffs of up to 30% on steel imports in 2002. His tariff was supposed to last three years, but was withdrawn after the World Trade Organization (WTO) ruled against them. In 2016, the Obama administration imposed duties on some Chinese steel imports by more than 500%, on Chinese cold-rolled steel, which is used to make appliances, cars and electric motors. Subsequently, Chinese imports to the US dropped by almost two-thirds. China now ranks as the 11th largest exporter of steel to the US.

WaPo notes that Chinese steel accounts for about 6% of US steel imports, but China’s capacity is eight times that of the next biggest producer, Japan. Clearly, its Chinese capacity that must be addressed.

On Tuesday, the European Commission announced it had renewed tariffs on Chinese steel imports, some as high as 71.9%, saying producers in France, Spain and Sweden face a continued risk of imports from China at unfairly low prices. The Commission concluded that Chinese producers had significant spare capacity. This was likely to lead to large-scale imports into the European Union at dumped prices if the measures were lifted.

And even though China’s share of the EU market for stainless steel seamless pipes and tubes has hovered around 2% since 2013, Brussels had no problem with pursuing what it thought was a fair remedy, despite the possibility of blowback.

Ironically, that’s similar to what Trump says he wants to do. Similar, but far from the same.

Trump’s plan hits all global steel producers, not just China, which, as the chart above shows, produces 52% of the world’s supply. So instead of confronting only China, we will face blowback from everyone.

OTOH, the politics of Trump’s tariffs may play out differently than the economics. The economics suggest they are a loser. According to a January Bureau of Labor Statistics report, about 377,000 Americans work in metal manufacturing jobs that could be protected by these tariffs.

That’s a lot of votes in the Rust Belt. And the steel company CEO’s will also see bigger bonuses.

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Will Tariffs Bring Prosperity?

The Daily Escape:

Detail of art painted on a truck, Pakistan – 2017 photo by Caren Firouz. South Asian “truck art” has become a phenomenon, inspiring gallery exhibitions.

Will new tariffs help our economy? The view of a typical Trump supporter:

Some of us are happy about these tariffs because it starts a long overdue conversation about trade: Everyone knows that the press, congress, economists, and the multinationals love existing policy, and that most of them couldn’t care less about trade imbalances. If this is the only avenue our democracy has to change trade policy, then we’re all for it.

Yet, the conventional wisdom is that Trump’s tariffs on steel and aluminum will do more harm than good. There are several concerns. To the extent we need steel and aluminum to use in our domestic production, it will cost more, and prices will have to go up, assuming that the manufacturers are unwilling to lower their profit margins. Ultimately, those increased costs hit the American taxpayer.

Another concern is retaliation. Our trade partners can block our exports, or charge retaliatory import tariffs of their own. Just 12% of US GDP are exports, so we’re less exposed to that threat than other economies that have a larger percentage of their economies dependent on exporting. However, jobs can be easily lost if China, Brazil, or the Euro Zone block some of our exports.

Trump’s rationale for new tariffs is two-fold. First there is a national security risk caused by diminished capacity in sensitive industries. Second, good jobs will come back to America if we produce more stuff.

Let’s deal with national security first. No doubt we have surrendered some of our strengths in sensitive products and technologies. But, it’s not a critical issue for steel or aluminum. We can get them from many countries that are currently our allies.

Artificial intelligence, advanced semiconductors, and software are an entirely different matter. There are legitimate national security-based rationales for restriction in those areas.

But, we are in trouble with some of the exotic steels that the Defense Department uses in weapon systems. For example, the Belgian firm Fabrique Nationale is the prime contractor for a lot of the high end small arms. Some of these specialty steels are only manufactured in annual production lots. Trump’s tariff won’t shift the production of those exotic steels to domestic sources.

So even in the few cases in which a tariff might serve a national security purpose, the Trump tariff will fail.

And while the Chinese dump steel below cost on global markets, most others (Canada, Brazil) do not, and we buy a lot more from them than we do from China. And there is no scenario whereby Canadian steel exports are a “national security” risk, Trump’s primary rationale. And the Trumpets seemingly can’t see the difference between primary aluminum (China exports nearly none) and semi-manufactured aluminum products, such as bars, plates, and wire rod, which they export a lot.

But, don’t foreign governments subsidize their steel industry? China does. However, that means that China is essentially giving us cheap steel. The question for Trump is: Will we gain enough jobs in our domestic steel industry to outweigh the losses to us in higher prices across all industries?

Maybe, but it hasn’t worked that way in the past.

Tariffs help lazy and/or incompetent businesses. Imposing new tariffs will just put off the day when the toxic combination of bad management, lack of investment, poor infrastructure, and bad government causes these protected industries to implode.

If you are a manufacturing company that is internationally competitive and well run, how would you like it if your steel and aluminum suddenly became 25% more expensive? All to protect some other lazy SOB who hasn’t invested in his plant in 20 years?

The correct response should be to find out why your product isn’t competitive, and then fix it. Much of American industry has done that, by automating, by moving abroad for cheaper labor, or to be closer to raw materials.

Ultimately, Trump’s tariffs will just postpone the day when our uncompetitive sectors must modernize, or go under.

And that result is always a net loss of jobs.

The best think tank idea is to establish tariffs (or quotas) based on the amount industries pay their labor in foreign countries vs. what US employers pay. If the foreign country’s prices are lower, than a tariff would kick in. This would help us with US firms who manufacture overseas. They would have the choice of paying higher wages to US laborers, or paying a tariff on their imports to the US.

Trump’s message is: If you want unfettered access to the US market, make it here. If the US consumer pays more, that is a price he’s willing to take to have the manufacturing base.

This is a debate worth having.

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How to Blow a “Blue Wave” Election

The Daily Escape:

Tillamook Head Lighthouse, Oregon – 2018 photo by Shaun Peterson

2018 is supposed to be a “Blue Wave” election, but Wrongo has doubts. We spoke yesterday about the pathetic performance of Team Dem during the shutdown. The Financial Times (paywalled) quoted Adam Green, co-founder of the liberal Progressive Change Campaign Committee: (brackets and emphasis by Wrongo)

The Republicans are very good at casting this debate [DACA] as being about illegal immigration and Democrats were not willing to own that this was at its core about the Dreamers and to define the Republican position as hurting kids and tearing apart families…The Trump people were clearly thinking about their messaging in advance and preparing ads in advance and there was almost no [Democratic] co-ordination with outside groups and no air cover by Democratic strategists…

That Schumer, Pelosi, et al. had no Plan B shows that they weren’t serious, no doubt because DACA isn’t an important issue for their base, the top 10%. Can the current Democratic Party leaders turn a wave opportunity into another squeaker like they did in 2016?

There is a large group of disaffected and/or disappointed voters who can be claimed in the 2018 Congressional elections. It’s a group of voters so disgusted with both parties that they could, just as easily vote in huge numbers, or stay home in droves.

Democrats said after the 2016 election that one new principle was to “crack down on corporate monopolies”, but since then, have done nothing. Here is a candidate that should be an example to Democrats on the subject of corporate power over the lives of regular people.  Austin Frerick is a 22-year-old running as Democrat in the 3rd Congressional District in Iowa against a conservative Republican. Watch him explain concentrated corporate power in a way that Schumer and Pelosi can’t, and won’t:

(Those who read the Wrongologist in email can view the video here.)

The basic skill a politician must have is to bring disparate groups a message about what they want/need, and how to get it. Chuck Shumer, the beacon of Wall Street, can’t be the guy fighting for Main Street voters.  Anything Schumer comes up with will not be the kind of clear and concise message that Austin Frerick can use to win his district.

Civil Rights activists in the 1960s didn’t win the prize on day one, but they never took their eyes off the ball once they achieved a few small wins. It’s important to remember that in the 1960s, the Party’s leadership was aligned with their Main Street supporters. But today, Democrats in Congress and their usual Democratic supporters have little in common. Schumer/Pelosi are not seeking the same prize as Main Street Democrats. They are captured by the monied elites, and have no message directed at the little people. Their only message is “Russians! Trump!”.

So far, Dems have won a few special elections, and won the Governorship in NJ, which should never have been lost to Christie in the first place. It’s time for the progressives in Congress to stage an actual coup, replacing today’s leaders with a few of their own. Otherwise, 2018’s messaging will be: 2016 – the sequel.

Will Wrongo be wrong again? Will the Democrats win with their current leaders? Or will they field so many unpalatable mainstreamers, backed by no message at all, that few will vote for them?

We’ll know in just a few months, and then, 2020 is just around the corner.

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Do Democrats Have a Winning Political Strategy?

The Daily Escape:

Frozen branch in Lake Erie, Cleveland OH – 2018 photo by Igorius

The Democrats’ demand of passage of DACA legislation, or they would block a Continuing Resolution (CR) to keep the government open, lasted 72 hours. No DACA legislation was passed, but Dems are touting a Republican promise of debate about DACA over the next three weeks.

That promise comes from Mitch McConnell, the guy who stole Merrick Garland’s Supreme Court seat, and got away with it.

Wrongo believed that dying on DACA hill was a bad political choice for Democrats. After all, there are 700,000 Dreamers, but 320 million Americans would be affected by a government shutdown. Their negotiating position shows how weak the Dems are today.

Those Dems who say that capitulation on the CR was worth it to secure the Children’s Health Insurance Program (CHIP) funding for six years, should remember that the CR runs out in three weeks. Then it will be up for discussion again.

So from the Dems viewpoint, if by February 8th, the Republicans have not dealt with DACA, the Dems can shut the government down again, this time using the narrative that Mitch McConnell is a liar, and that they gave Republicans a chance to fix the problem. Unfortunately, McConnell has been called a liar before.

But if February 8 comes, and Democratic Senators back off on another confrontation to protect the Dreamers, that will not only be terrible for Dreamers, it’s terrible for Democrats. They have a few weeks to pressure Republicans to get this done.

OTOH, it is difficult to see why Republicans would do anything different. Paul Ryan and Mitch McConnell will use these three weeks to tighten the screws, and finish the job. That would start with McConnell taking the House’s already passed Securing America’s Future Act (SAF) to a vote.

Once Senate Dems say “no” to that, McConnell can say “Well, we put a DACA bill on the table, and the Dems rejected it. I lived up to my promise.” There will be some tinkering by middle-of-the-road Dems around the edges of the SAF bill. Then it will be attached to the CR. How long do you think it will be before 10+ Dems cave, and pass it?

Fault lines exist. A dozen Senate Democrats broke with party leaders to vote against the bill, including a number of potential presidential candidates, a sign they knew exactly where their base is, even if the leadership doesn’t.

Democrats need to use their time in the minority to remake the Party. They should pursue and deliver programs that offer real benefits for middle and working class voters. They need a plan to deal with income inequality. Fundamental questions about what being a Democrat means in the 21st Century must be addressed.

FDR provides a great example for today’s Democrats. In the 1930s, FDR responded to a financial crisis with bold, creative policies that delivered massive, tangible benefits to working people. Because of what FDR did, the Republicans were forced to go in his direction to stay politically competitive. Republicans began to promise that they could improve the programs they once opposed.

Here is what Roosevelt said in a speech about Republicans at the time:

Let me warn you, and let me warn the nation, against the smooth evasion that says ‘Of course we believe these things. We believe in social security. We believe in work for the unemployed. We believe in saving homes. Cross our hearts and hope to die. ‘We believe in all these things. But we do not like the way that the present administration is doing them. Just turn them over to us. We will do all of them, we will do more of them, we will do them better and, most important of all, the doing of them will not cost anybody anything’

In the post-war period, the Republican Party looked more like Dwight Eisenhower than like Ronald Reagan.

And today, Democrats must emulate FDR: Move Republicans to the left, not move the Dems further to the right. This isn’t about finding someone to create an Obama third term. Democrats shouldn’t prioritize getting rid of a bad president, they need to build a serious alternative to Republican ideology.

The Democratic Party has failed many times to produce a political strategy which would force the Republican Party to change direction. And they look like they may fail once again. The Democratic leadership believes that the party needs to unify at all costs to present the strongest possible electoral challenge to Trump in 2020.

It’s counter-intuitive, but to secure a future Democratic majority, Dems must first decide to be a party with a plan that addresses income inequality.

They can knock out Trump without moving to the right.

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Sunday Cartoon Blogging – Christmas Eve 2017

(The Wrongologist is taking a brief holiday break. Blogging will resume on Wednesday, 12/27. In the meantime, Merry Christmas!)

The Daily Escape:

Jingle Bell Jog – Ft. Lauderdale FL, 2017. Better for ya than SantaCon.

A final Christmas Eve word about the unwanted gifts the Trump tax cut is foisting on us. In the short term, it will stimulate consumer demand. The economy may “grow”, but our tax receipts cannot.

Soon, these tax cuts will place our government on a fiscally precarious footing. Expect the credit rating agencies (Moody’s, Standard & Poors) to start wagging their tongues, warning of their concerns about the country’s overall debt levels. It is possible that the repatriation of some of the massive off-shore profits that American firms have hoarded may come home. To the extent that they return, and some taxes are paid on them, this (one time) tax receipt will likely make the 2018 and 2019 annual budget deficits somewhat smaller than the colossal ones to follow.

After that, the government’s income will fall, and we will hear bi-partisan calls for deficit reduction, and lower spending targets will be the norm. The effects of tax legislation can take a long time to shake out, and there often are unintended effects.

But make no mistake, the GOP will start talking about the Coming Debt Apocalypse next month.

On to a few cartoons. Here is the difference between the parties:

 

Trump’s year in review:

War is the answer to any question:

Trump’s touting of something terrific slides downhill:

Congress flies home for Christmas:

Congress gives empty present to our kids:

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Sunday Cartoon Blogging – December 10, 2017

(There will not be a Monday Wake Up Call this week. Blogging will resume on Tuesday 12/12)

Jerusalem, Roy Moore, Franken, Bears Ears. Quite the week, but let’s start with this: Walmart pulls controversial t-shirt that encourages violence toward journalists:

The t-shirt’s message is: “Rope. Tree. Journalist. SOME ASSEMBLY REQUIRED”. Walmart has now pulled it from its website. The shirt was also sold in the online store of a company called Teespring, who was the third-party seller for Walmart. The shirt was circulating well before that, though, as Jezebel found a tweet referencing the shirt from April of 2009.

Teespring allows users to design their own t-shirts and other merchandise. They sold a shirt with the words “Black women are trash”, and one that said “Eat Sleep Rape Repeat”. Wrongo fears that there will be no recovery from our slide to the lower reaches of hell.

Trump gave the Middle East a sign. Now he wrongly expects peace will break out:

Trump has success getting the world to change the subject:

Franken’s out. In with the new (giant) asshole:

The logical outcome of the religious freedom argument:

Waiting for the trickle down is like waiting for Godot:

 

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You Say You Want a Revolution

The Daily Escape:

Waimea Canyon, Kauai Hawaii

Wrongo has suggested many times that America needs a revolution. He thinks that the US political process has been so captured by large corporations and the very rich that the average person no longer can have any impact on policy. In many states, the average person isn’t even totally confident that he/she will be permitted to vote the next time they go to their local precinct.

We are in the midst of a political crisis: The people have lost faith in systems which they feel don’t respond to real people and in representatives that won’t represent us, or the society at large. Rather than debate issues thoughtfully, we are whipsawed by the appeals to emotion launched daily into the ether by the tweeter-in-chief.

Two current issues demonstrate the danger. First, Jerusalem. It turns out that Tillerson and Mattis opposed the president’s decision to recognize Jerusalem as the capitol of Israel, and move our embassy there. You know from the headlines that Trump wouldn’t listen to anyone who told him this would be a very bad idea. The State Department’s response was to issue a worldwide travel alert for those Americans who think they’re still welcome around the world. The WaPo reported that a Trump confidant said:

It’s insane. We’re all resistant…He doesn’t realize what all he could trigger by doing this.

Second, North Korea. Maybe you read this headline: North Korea says war is inevitable as allies continue war games.

Martin Longman asks the pertinent question:

The so-called adults in the room utterly failed on the Jerusalem issue, so are we supposed to put our trust in them to steer a sane course on the Korean peninsula?

What are we talking about here? Can we wait out Trump, and just work like hell to replace him with a better president in 2020? Would nuclear war get him re-elected?

What about the GOP’s control of both houses of Congress? On Thursday, Speaker Ryan told us what we face next year: the GOP will tackle the budget deficit and national debt by cutting Medicare and possibly Social Security, now that the GOP’s donor class has their tax cuts.

Things have to change, and there are only two options, neither very good. First, we can try and excise the moneyed influence via the ballot box. That is the “democratic revolution” that Bernie championed in 2016. The definition of democratic revolution is:

A revolution in which a democracy is instituted, replacing a previous non-democratic government, or in which revolutionary change is brought about through democratic means, usually without violence.

Since we no longer have a functioning democracy, a “democratic revolution” to bring it back is what we require. Is it the only way to right the American ship of state?

The second option is a coup of some kind.

  • It could be via impeachment, assuming there were high crimes and misdemeanors that Trump had committed, and assuming a Republican House would impeach him, and a Republican Senate would convict him.
  • It could come via a 25th Amendment action, which might be marginally more acceptable to Republicans, but is as unlikely as impeachment.
  • Least desirable, and least likely would be a true coup, where the “adults in the room” (in the oval office, or the Pentagon) get leverage over the Commander-in-Chief. Could a real coup stay bloodless? That seems highly doubtful, and Wrongo would rather trust Trump than a junta.

Removing Trump won’t fix what’s wrong with the Republican Party. We need to prioritize and triage this situation, focusing first on taking back the House and Senate before 2020.

Who can we count on to right the ship?

Not today’s Democrats. They are led by Chuck Schumer who approves of Trump’s Jerusalem decision. The Democrats must fire Pelosi and Schumer, or die.

What about America’s largest voting bloc, Millennials? Can they step up to the challenge?

What about America’s women? In 2016, women supported Clinton over Trump by 54% to 42%, while Trump carried non-college educated white women 64% to 35%. The #metoo movement promises to become much more than the outing of bad guys: It could weaken both male privilege, and their power.

Firing a few slime balls isn’t revolutionary, but voting them out of office would be a paradigm shift.

The stock market is in the stratosphere, and consumers are happily clicking on Amazon’s “place order” tab.

Measly tax cuts will trickle down to rubes like us, while the plutocrats will die of laughter.

Can women and millennial voters look beyond the GOP’s messaging that the Muslims are always to blame, and Israelis suffer the most?

Will they care enough about whatever Mueller turns up on Trump to go out and vote?

Revolution is in the air. Why should the right have all the fun?

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Automation Will Cost 75 Million US Jobs By 2030

The Daily Escape:

Torres Del Paine National Park, Patagonia, Chile. Torres Del Paine is known for its mountains, glaciers and grasslands that shelter rare wildlife like Guanacos.

Wrongo has written many times about automation taking jobs that will not be replaced onshore. McKinsey & Co. has a new study that finds that job losses due to automation will take out anywhere from ten to twenty percent of the current global workforce by 2030:

As many as 800 million workers worldwide may lose their jobs to robots and automation by 2030, equivalent to more than a fifth of today’s global labor force.

The report covers 46 countries and more than 800 occupations. The McKinsey Global Institute study found that even if the rise of robots is less rapid than they expect, 400 million workers could still find themselves displaced by automation and would need to find new jobs over the next 13 years. McKinsey said that both developed and emerging countries will be impacted. Machine operators, fast-food workers and back-office employees are among those who will be most affected if automation spreads quickly through the workplace. Bloomberg made a chart summarizing the jobs lost by country:

Source: Bloomberg

This implies that some 75 million jobs are at risk in the US by 2030, to be replaced by…something.

The bottom line is that many of the unemployed will need considerable help to shift to new work, and as a result, starting salaries will continue to flat line. McKinsey paints a rosy picture about the future jobs market post-automation. They say that the economies of most countries will eventually replace the lost jobs, but are a little unclear on what the new jobs will be. They mention health care, infrastructure, construction, renewable energy and IT as likely job areas.

But the challenge is how the displaced workers learn the new skills necessary by 2030. Axios quotes Michael Chui, lead author of the report on the needs for retraining:

We’re all going to have to change and learn how to do new things over time…It’s a Marshall Plan size of a task…

How will America fund a Marshall Plan for retraining 75 million of us, particularly when we’ve just given the very corporations who are automating our jobs even more of a break on their tax bills? It’s unlikely that the Republican-controlled Congress will have any desire to fund the necessary comprehensive re-training effort. If Congress had any foresight, they could have made their new corporate tax cuts conditional on these same firms paying for the job retraining that their automation will cause for American workers.

But, it will be our job to figure out where these new training funds will come from, right along with the funds we have already given to the job creators Republican donors.

And what if you don’t have the money or learning aptitude to acquire these new skills? Well, you are likely to be both unemployed and poor. And that mean tens of millions more Americans will not have the resources to stay out of poverty.

Perhaps CEOs and Congresscritters ought to remember that there are enough guns for every man, woman and child in this country, and many are in the hands of the very people who would be hurt most by automation.

We can’t hold back the tide of automation, but we can be smart about how we, as a country make the transition to fewer very highly-skilled workers and many narrowly-skilled workers. There are questions to ask, and solutions to craft for the post-2030 world.

How will America’s forgotten workers survive in a society that is led by people who don’t care if they have a job?

How will America’s forgotten workers survive if the political establishment tries to unwind the social safety net while celebrating the progress of technologies that cost jobs?

That could lead to torches and pitchforks.

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