Technology – Page 3 – The Wrongologist

What’s JOE – 2035?

Haven’t heard of JOE- 35? Not surprising, since it is very difficult to find any mention of it in any major media news outlet. Google JOE- 35, and you get a series of links for a cast stone fire pit that is 35” in diameter.

Wrong. It refers to the “Joint Operating Environment 2035” [pdf] (JOE – 35), issued in July by the Joint Chiefs of Staff. It lays out the environment that the military and the nation will be facing 20 years from now. It is written as a guide to how the Defense Department should be spending resources today in order to protect against tomorrow’s threats. They identify six broad geopolitical challenges the US Military will have to deal with in 20 years:

Violent Ideological Competition: irreconcilable ideas communicated and promoted by identity networks through violence. That is, states and non-state actors alike will pursue their goals by spreading ideologies hostile to US interests and encouraging violent acts to promote those ideologies.
Threatened US Territory and Sovereignty: encroachment, erosion, or disregard of US sovereignty and the freedom of its citizens.
Antagonistic Geopolitical Balancing: increasingly ambitious adversaries maximizing their own influence while actively limiting US influence. That is, rival powers will pursue their own interests in conflict with those of the United States. Think China in the Philippines.
Disrupted Global Commons: denial or compulsion in spaces and places available to all but owned by none. Think that the US will no longer be able to count on unimpeded access to the oceans, the air, space, or the electromagnetic spectrum in the pursuit of its interests.
A Contest for Cyberspace: a struggle to define and credibly protect sovereignty in cyberspace. That is, US cyberwarfare measures will increasingly face effective defenses and US cyberspace assets will increasingly face effective hostile incursions.
Shattered and Reordered Regions: states increasingly unable to cope with internal political fractures, environmental stress, or deliberate external interference. That means states will continue to be threatened by increasingly harsh pressures on national survival, and the failed states and stateless zones will continue to spawn insurgencies and non-state actors hostile to the US.

The report also warns that the rise of non-state actors such as ISIS, described in the report as “privatized violence“, will continue, as will the rapidity by which those groups form and adapt. The spread of 3D-printing technologies and readily available commercial technology such as drones, means those groups can be increasingly effective against a fully equipped and highly technological US military.

The study says:

Transnational criminal organizations, terrorist groups, and other irregular threats are likely to exploit the rapid spread of advanced technologies to design, resource, and execute complex attacks and combine many complex attacks into larger, more sustained campaigns…

John Michael Greer has a review of JOE-35 that is worth reading in its entirety. His criticism of the report is that:

Apparently nobody at the Pentagon noticed one distinctly odd thing about this outline of the future context of American military operations: it’s not an outline of the future at all. It’s an outline of the present. Every one of these trends is a major factor shaping political and military action around the world right now.

Like so many things in our current politics, the JOE projections are mostly about justifying current procurement/pork barreling by a linear extrapolation of today’s threats. That, and the institutional blindness that sets in when there have been no real challenges to the established groupthink, and the professional consequences of failure in the military are near-zero.

The JOE list may not be imaginative or fully predictive, but that doesn’t make it wrong. None of the problems they forecast are going away. For instance, the use of ideology to win and shore up support from potential fighters and allies is as old as ancient times, so why would ideological conflict NOT be an issue in 2035?

Threats to US sovereignty and territory go along with the Joint Chiefs’ recognition that the US is an empire most likely on a downward curve, unless there is great change in our policies, domestic and foreign.

In this sense, the report is quietly critical of our politicians.

The admission in the JOE report that we will be actively required to defend our home ground by 2035 is a mark of just how much our geopolitical environment has changed since 9/11.

It is indeed worth your time to read both the JOE report, and that of John Michael Greer very carefully.

Both will make you smarter than reading about the latest Trump outrage.

Who Moved My Cheese?

Some may remember the book by this name by Spencer Johnson, published in 1998. The underlying message of the book is “Don’t waste time fighting against change: accept that bad stuff will happen to you for no good reason and just keep moving”.

This outdated and simplistic message remains the message of the Democratic Party to the White Working Class (WWC). Donald Trump’s message is different. He offers them nothing but a dream, to limit immigrants working in the US and to cut off the US market from China. And since the WWC knows that more of the same isn’t going to work, they’re voting for Trump.

It is useful to remember that since our “Most Favored Nation” trade deal with China in 1979, we have lost 35% of all manufacturing jobs in this country.

The WWC thinks that the Democrats have not been able to do anything to help them keep their jobs. The reasons for failure can be at least equally shared by the Parties, but since Dems have said for years that they are the party of the working class, they are getting the greater share of the blame for 35 years of no results.

There are two issues that dominate the discussion: Illegal immigration and transition assistance when jobs are lost. Regarding Immigration:

The WWC knows that Dems need the political support of the Hispanic community, and that requires Dems to show sympathy with illegal immigration.
The WWC believes that illegal immigration has put downward pressure on job opportunities and wages in the trades, in restaurant and hotel work, and in service sectors where immigrants may be overly represented.
That’s why Trump’s stance on immigration is so popular with the WWC. They probably know in their hearts that kicking all the Mexican workers out, or building a wall is ridiculous. But the Democrat’s position on immigration is diffuse, and is viewed as “soft” on illegals by the WWC.

Despite anything the Dems say about retraining or “transition assistance”, the WWC knows that someone on job transition assistance can’t earn enough to support a family. Other problems:

Identifying the fields/industries that workers can train in that will produce stable, living wage employment is an inexact science. So, demand for retrained workers is often less than the supply for any given job type.
Businesses have been very successful at shifting the burden (and cost) of training displaced workers from themselves to society. This is helped along by a corporate critique that public and not-for-profit private schools are failing to maintain standards, and they can’t churn out sufficient grads with qualifications that meet the corporations’ highly specific requirements.
Hence the continuing financial opportunities for for-profit technical schools and for-profit universities, (can you say Trump University?)

And Ford Motor Co. just gave Trump a big wet kiss:

Ford Motor Co. says it’s moving all of its US small car production to Mexico…The company is building a new $1.6 billion assembly plant in San Luis Potosi, Mexico. It will make small cars there starting in 2018.

What can the Pant Suit say about this that would go beyond what the Pant Load will certainly say? And if she did, would WWC people believe her?

On the macro level, our current capitalism has turned to technology to produce much of what is needed with far less human labor input than ever before. That leaves job growth (and job opportunity) in only the low-skilled, low-paid “service” jobs; or in highly advanced, specialized jobs requiring very advanced training/skills/talent.

This means that the dogma of Endless Economic Growth, which we have accepted since the Industrial Revolution, is dead. Along with killing that, we need to kill off the current organizing principle of our economic system, where humans exist solely to fulfill the needs of businesses.

Work helps us find our place in society. It is something that we see as having an inherent value, something that fills a basic human need, similar to food and shelter. But our current economic system no longer recognizes that, and our economy provides little opportunity for fulfilling that basic need for a large portion of American citizens, including many in the WWC.

The idea of government deploying under-utilized labor to build and repair our infrastructure, or to re-tool our country to reduce carbon emissions would be a step that might return the WWC to jobs and a place in society. It would cost a ton.

But the idea that the government would create demand is too socialist for most politicians to accept, despite the fact that the rest of the tools just haven’t worked in 35+ years.

Tell me again why Bernie Sanders was a terrible choice.

Monday Wake Up Call – Rule of Law Edition

While America celebrated the Labor Day weekend, we overlooked an extremely important decision by a three-judge panel of the US Court of Appeals for the Ninth Circuit.

Last week, they issued a sweeping decision in the Federal Trade Commission v ATT, that drastically restricts the Federal Trade Commission’s (FTC) consumer protection authority over companies that offer “common carrier” services (e.g., telephone services, mobile data, and internet services) whether or not these services comprise their core business. Moreover, since no other federal agency has the necessary scope of regulatory authority over this area, if this decision stands, significant activities of such companies would become largely unregulated.

As the WaPo reports:

The ruling could wind up giving Google and Facebook — not to mention other companies across the United States — the ability to escape all consumer-protection actions from the FTC, and possibly from the rest of government, too, critics claim, unless Congress intervenes.

A little history: The FTC had brought an action against ATT over the adequacy of the company’s consumer disclosures regarding its data throttling plan, by which ATT intentionally reduced the data speed of customers to whom it had sold unlimited mobile data plans:

In 2007, ATT became Apple’s sole wireless provider for iPhone.
In 2011, ATT began reducing the speed at which unlimited data plan users received data on their smartphones.
Under ATTs data throttling program, unlimited data plan customers were throttled for the remainder of a billing cycle once their data usage during that cycle exceeded a certain threshold.

So the FTC filed suit against ATT. The FTC’s argument was that ATT was not providing an “unlimited” service, which is what subscribers thought they were buying. After signing up the initial subscribers, ATT changed to tiered plans, under different contracts. And ATT neglected to inform the original customers – the ones who thought they’d purchased an unlimited plan – that they weren’t getting what they paid for.

But the FTC lost. To understand the complicated legal issues and why the FTC lost, you can read all about it here.

The implications are huge. The decision means that any company that creates or purchases either a phone company or an internet service provider (ISP) can escape federal consumer protection regulations entirely. This is particularly important for individual privacy and security matters, since the FTC currently is trying to impose comprehensive privacy and data security regulations on ISPs, and this decision may hamper that effort. After all, big data has been collecting for years now and there is so much data on millions, if not billions of people, the population are starting to understand the risks of their data security with many big companies.

The court decided that the FTC lacks authority to regulate common carriers. So, no matter how egregious the company’s conduct– even for false, deceptive, misleading practices, the FTC would be unable to do anything about it. Nor, at the moment, can any other federal agency.

The ATT case concerned regulation of advertising. But, since the court’s decision rejected outright the FTC’s claim to be able to regulate any activities of companies deemed to be common carriers, it is not limited to deceptive advertising alone. Facebook and Google already gorge themselves on your personal data and the decision prevents the FTC, the agency that has a track record of regulating privacy issues, from exercising any oversight of these activities (provided that Facebook and Google make the appropriate acquisitions or otherwise position themselves to qualify as common carriers).

So it’s time to wake up America! The steady erosion of your privacy and consumer protection rights continues under the flag of “the rule of law”. In the REAL world, the wealthy and powerful are often above the law. The Wall Street banking cartels committed mortgage fraud, foreclosure fraud, and securities fraud. They laundered money for terrorists and drug cartels. They rigged interest rates. Aside from stockholders paying token fines, no human was prosecuted for these massive, organized criminal activities.

Let’s groove to “I Fought the Law”, written in 1958 by Sonny Curtis of the Crickets, and later popularized by the Bobby Fuller Four who had a top-ten hit with it in 1966. It was also recorded by the Clash in 1977, and Green Day in 2004. In 1989, during the US invasion of Panama, the US military blasted loud rock music—including the Clash’s version of “I Fought the Law“, to pressure Manuel Noriega to surrender.

The guitar riff in this Bobby Fuller version sounds positively Hollyesque:

After this decision against the FCC, maybe in 20 years, instead of saying “he got railroaded”, we’ll be saying “he got telecommed”.

For those who read the Wrongologist in email, you can view the video here.

WTF Is It With Cellphone Cameras?

The NYT had an article last Thursday about a suicide rescue on the George Washington Bridge by a bicyclist. Julio De Leon, 61, was biking home from work across the GW Bridge when he saw someone about the jump off the bridge and into the Hudson River. From the NYT:

Then he saw it: a dog in the pathway, tethered to a rail. “This is something unusual, and I looked to my left, and I saw the guy,” Mr. De Leon said.

Robots Are Coming For Your Job

Americans worry that robots could make their jobs irrelevant. A new study shows that they may be correct. The report, Technology at Work v 2.0: The Future Is Not What It Used to Be, was conducted at University of Oxford in association with Citibank. Researchers Carl Frey and Mike Osborne, co-directors of the Oxford Martin Programme on Technology and Employment, found that 47% of US jobs are at risk of automation in the next two decades.

They also found that the city where you live may influence the risk of your work being automated. Among metro areas, Boston faces the lowest percentage of jobs likely to be automated, while Fresno, Calif., faces the highest. The cities that fared best in the survey have a cluster of skilled jobs, typically because they have developed a strong tech sector. Boston, for instance, which is home to a number of top universities and has many well educated residents, has become a global technology hub, transitioning successfully from its roots as a shipping center and manufacturing economy to a tech/finance center.

Here are the best/worst rankings:

FireShot Screen Capture #079 - Cities at risk of automation-page-001

Even in cities with the lowest percentage of jobs at risk of automation, nearly 40% of jobs could disappear because of technological innovation, the report finds. So how many workers are we talking about? The BLS reports that in December, 2015 our working population was 149.9 million; 40% of that number would be 60 million people unemployed in the next 20 years. Perhaps it won’t be that bad, maybe 20-30 million jobs will replace the approximately 60 million we stand to lose.

No politician will be able to paint a happy face on THAT.

Skeptics will say not to worry, that the economy has always adapted over time, and created new kinds of jobs. The classic example they use is agriculture. In the 1800s, 80% of the US labor force worked on farms. Today it’s 2%. Obviously, mechanization didn’t destroy the economy; it made it better. Food is now really cheap compared to what it used to cost, and as a result, people have money to spend on other things and they’ve transitioned to jobs in other areas.

But, the agricultural revolution was about specialized equipment that couldn’t be transferred to other industries. You couldn’t take farm machinery and have it flip hamburgers. Information technology is totally different. It’s a broad-based general purpose technology.

There just won’t be new jobs available for all these displaced workers.

There will certainly be many new industries, (think nanotechnology and synthetic biology), and those jobs will be highly paid. But they won’t employ many people. They’ll use lots of technology, rely on big computing centers, and be heavily automated.

Think about what Facebook and Twitter have added to the jobs economy: They are two of our very “best” success stories, and they only employ 8,100 workers. They have had a huge impact on society, and have created significant value for their owners, but the total jobs they have created are only a rounding error in the US economy.

Much of what we buy is produced in factories increasingly run with robots, and maintained and operated by small cadres of engineers. Also, keep in mind that globally, some 3 billion people are already looking for work and the vast majority are willing to work for less than the average American.

So, we can expect an ever-greater number of unemployed chasing an ever-shrinking number of jobs that can’t be eliminated or simplified by technology. Thus, the prognosis for many of our medium and some higher-skilled workers appears grim.

If we forecast continuing technology breakthroughs (and we should), and combine that with the 3 billion people currently looking for work globally, we have to conclude that the planet is overpopulated if the goal is a growing global middle class.

This is why the quest for better technology has become the enemy of sustaining middle class job growth in the developed world.

Defining Business Success in the 21st Century

In 2012, the Wrongologist reported on the bankruptcy of Hostess, the iconic bakery behind Ding Dongs, Ho Hos and Twinkies. Hostess’ closing was something of a national moment, with people mourning the Twinkie, and possibly, something lost from a better, more optimistic time.

It was also a symbol of the dire state of American manufacturing. Hostess died after a decade of failing health that saw two bankruptcies and five different CEOs. It left behind 36 factories, 5,600 delivery routes and 19,000 jobs.

Then, a partnership between private-equity giant Apollo Global Management and C. Dean Metropoulos, a billionaire turnaround artist known as “Mr. Shelf Space” for his revival of retail brands like Vlasic, Hungry-Man and Chef Boyardee, bought the assets of the defunct Hostess. Now, two years into the comeback of Hostess, we are learning what the cost of putting Ho-Hos and Ding Dongs back on shelves really means: The new Hostess Brands has automated more than 90% of the company’s bakery jobs.

How did they do it? Cherry picking the best assets, modernizing manufacturing and distribution, doubling the shelf life of products and capitalizing on the rare place in pop culture that Hostess products enjoyed:

• The new, smaller Hostess kept just five of the 14 original bakery plants: Of those five, one was sold, and another bakery with 400 employees closed in October.
• They invested in automation: One 500-worker Kansas bakery outfitted with a $20 million Auto-Bake system, now spits out more than a million Twinkies a day, doing 80% of the work once done by 9,000 workers across 14 plants.
• They spent on chemical research, trying to create a longer Twinkie shelf life, and succeeded in extending it to 65 days.
• The longer shelf life enabled a change in distribution. The old Hostess relied on more than 5,000 delivery routes to drop off product to individual stores. It was incredibly expensive (each route required a driver, a truck, gas and insurance), eating up 36% of revenue each year. Even with a great delivery route planner that’s a big chunk of revenue.

What kind of “cream filling” has a shelf life of 65 days?

Now, the company has arisen from the ashes to find a new place on America’s shelves, and they are thinking of an IPO at Hostess. From 9,000 bakery employees at 14 plants to 500 at one plant in Kansas. That’s just the bakery division. Thousands of more supporting jobs were lost when the plants closed for good. This may be an extreme example of automation in the 21st century, but more of it is coming, and it’s going to put a lot of people out of work very quickly.

It used to be that layoffs were a sign of bad management, now they are a sign of good management. Back in the day, bankruptcy was the last thing management wanted. Today, it is a strategic choice.

Destroying jobs is now a badge of honor.

But, no one should blame Metropoulos or Apollo for a winning strategy when, in the prior decade, five different CEOs failed at the task of saving Hostess. They have created a huge turnaround, from Chapter 11 to an IPO in two years. But, it cost thousands of jobs. Automation, layoffs or not, made sense for this business.

We all know that technology creates fewer jobs than it destroys. By some estimates technology could cost half of all current jobs in the next 20 years. So, we can expect an ever-greater number of unemployed chasing the ever-shrinking number of jobs that can’t be eliminated or simplified by technology. Thus, the prognosis for many medium and some higher-skilled workers appears grim. In fact, a good question to ask today is how much can we attribute the fact that the US labor force participation rate is the lowest in 50 years to automation?

The issue is not technology, or robots, or restoring our manufacturing base. Nor is the issue better skills, or technology or outsourcing. We have too many people chasing too few good jobs.

This is why the quest for better technology has become the enemy of sustaining middle class growth in America and the rest of the developed world.

Enjoy that Twinkie while you can still pay for it.

See you on Sunday.

The Story Behind Iran’s Nuclear Story

Reuters reported last night that Iran and major powers extended the deadline to negotiate an agreement on the Iranian nuclear program to at least Friday. The comprehensive deal under discussion is aimed at curbing, and reversing in some cases, Iran’s nuclear work for the last decade or more, in exchange for relief from economic sanctions that have slashed Iran’s oil exports and crippled its economy.

It is unclear whether an agreement will be reached, but it is sure that few in Congress will be happy with the outcome, regardless if there is an agreement or not.

It may be useful to remember that Iran’s Nuclear Program was a child of Washington in the first place. It is possible to date the start of Iran’s nuclear program to December 8, 1953, the date that President Dwight D. Eisenhower delivered what was later called his Atoms for Peace speech to the UN.

Eisenhower laid out a program to use atomic energy “to provide abundant electrical energy in the power-starved areas of the world.” Under the program, the US would provide research reactors, fuel, and scientific training to developing countries eager to harness the power of the atom.

Among the first countries to take the United States up on its offer was Iran.

In 1957, Tehran and the US signed a nuclear cooperation agreement, called the Cooperation Concerning Civil Uses of Atoms. Two years later, in 1959, the Shah of Iran created a Nuclear Research Center at the University of Tehran, and in 1967, the US delivered a five-megawatt nuclear research reactor and the enriched uranium needed to fuel it. In addition, the Atoms for Peace program offered Iran a chance to study in the US, since they had no homegrown nuclear experts. This lack of nuclear engineers meant that Iran could not use the US-delivered Tehran research reactor for nearly a decade.

Needing nuclear experts, Iran turned to MIT in 1975 to create a special program to provide Iranian experts with scientific and technological training on nuclear energy. This program gave Iran its first group of professional nuclear engineers. The first nuclear reactor that we provided would later be used by Tehran to carry out some of its more controversial work, including some of the country’s earliest experiments with uranium enrichment.

Iran later admitted to using that same reactor in the early 1990s for the production of small amounts of Polonium-210, a radioactive substance that could be used to start a chain reaction inside a nuclear weapon.

Iran signed the Nuclear Nonproliferation Treaty (NPT) in July 1968, on the first day it was opened for signature. Tehran ratified the treaty in 1970, putting it among the first states to do so and on paper, giving it the right to enrich uranium.

It is useful to remember that Israel, the most vocal critic of a nuclear deal with Iran, remains one of just four nuclear capable states (India, Pakistan and North Korea) that have not signed the NPT.

But despite early cooperation, signs of distrust between Washington and Tehran emerged early. Like today, Washington was concerned with Iranian plans to reprocess used (“spent”) nuclear fuel. The separated plutonium from this process can be used to fuel reactors, but also can be used to make nuclear weapons. To make sure nuclear materials were not diverted to making weapons, Mr. Eisenhower proposed establishing a watchdog within the UN. That watchdog would later become the International Atomic Energy Agency (IAEA) that we rely on today for nuclear inspections.

Juan Cole reports that, according to declassified national security documents, from 1975 and 1976, Washington opposed Iranian plans to build a nuclear reprocessing facility, and the issue became a major sticking point in negotiations to sell US nuclear power reactors to Iran:

The US used to have a policy of promoting reprocessing because it was a way of recycling useful atoms…But this policy changed right at the end of the Gerald Ford administration and then reinforced by Jimmy Carter…to no longer support, and, in fact, to oppose reprocessing.

Washington’s nuclear cooperation with Iran came to an abrupt halt in 1979, swept away by the Iranian Revolution that ended the rule of the Shah. With the capture of our embassy in Tehran and the holding of American hostages for 444 days, all formal ties between Washington and Tehran were cut off until the start of the current nuclear negotiations.

Atoms for Peace provided Iran with a foundation for its nuclear program. It offered both key technologies along with education in nuclear engineering and physics. The program clearly helped Iran move up the nuclear learning curve.

Now, the question is, can Secretary of State Kerry put the toothpaste back in the tube?

Can Entrepreneurs Succeed in the Federal Government?

Have you ever heard of US Digital Services (USDS)? Neither had the Wrongologist before reading an interesting article in Fast Company, “Inside Obama’s Stealth Startup”, that describes how President Obama is recruiting top tech talent from companies like Google and Facebook. Their mission is to reboot how government works. Here is a first-person tidbit: (Brackets and editing by the Wrongologist)

Lisa Gelobter…got [a call] out of the blue last summer in New York, inviting her to some kind of roundtable discussion in Washington for tech leaders. Lisa had just spent time on the upper management teams at Hulu and BET. She decides, reluctantly, that she’ll go take the meeting, which includes this guy named Mikey as well as this other guy named Todd, and turns out to be in the Roosevelt Room in the West Wing. Then President Obama opens the door and surprises everyone, and over the course of 45 minutes gives the sales pitch…They need to come work for him. They will need to take a pay cut…But he doesn’t care what it takes—he will personally call their bosses, their spouses, their kids to convince them. The crowd laughs. But he gravely responds: I am completely serious. He needs them to overhaul the government’s digital infrastructure now.

‘What are you going to say to that?’ asks Lisa.

Todd and Mikey, the pair who helped bring people like Lisa Gelobter to DC are Todd Park, former chief technology officer of the US, and Mikey Dickerson, who led a team of 60 engineers at Google and supervised the crew that fixed the Healthcare.gov website last year.

Since that time, Park and Dickerson have been steadily recruiting a team of startup-savvy techies, mainly from top private-sector companies, and embedding them in agencies of the US government. Their purpose is to remake the digital systems by which government operates, to implement the kind of efficiency and agility and effectiveness that we admire at Silicon Valley’s biggest successes, across everything from the IRS to Immigration Services.

Dickerson has insights learned from the Healthcare.gov experience, which became an $800 million boondoggle, involving 55 contracting companies: (Emphasis by the Wrongologist)

And of course it didn’t work…They set aside hundreds of millions of dollars to build a website because it was a big, important website. But compare that to Twitter, which took three rounds of funding before it got to about the same number of users as Healthcare.gov—8 million to 10 million users. In those three rounds of funding, the whole thing added up to about $60 million.

OK, but Healthcare.gov may have been more complex than Twitter. Fast Company quotes President Obama regarding his big mistake in building Healthcare.gov:

When you’re dealing with IT and software and program design…It’s a creative process that can’t be treated the same way as a bulk purchase of pencils.

So, the Obama administration began USDS to recruit top tech talent to overhaul the government’s digital infrastructure. The point was not to sell these candidates on a career in government, but rather to enlist them in a stint of a year or two at USDS, or even a few months. For decades, lawyers and economists have worked in the capitol between private-sector jobs, so why not technologists? Fast Company quotes Megan Smith, the US chief technology officer:

What I think this does…is really provide a third option. In addition to joining a friend’s startup or a big company, there’s now Washington.

Fast Company reports that the idea of short-term government assignments by software entrepreneurs appeals to Mr. Obama, and that it was built into the USDS design from the start. Mr. Obama:

I’m having personal conversations with folks, meeting with them, or groups of them, and pitching them…And my pitch is that the tech community is more creative, more innovative, more collaborative and open to new ideas than any sector on earth…Is there a way for us to harness this incredible set of tools you’re developing for more than just cooler games or a quicker way for my teenage daughters to send pictures to each other?

Finally! Obama hits one nail on the head.

If the USDS team can successfully rebuild some of the digital infrastructure of Washington, it might not only change government’s functionality, it might transform Americans’ very poor attitudes about their government. And given our ideologically-riven Congress, success might just boost our citizens’ waning belief that America can return to a joint view of the future, but that’s a lot to ask of a group of techies.

Of course, if we have a GOP President and a GOP Congress starting in 2017, then it’ll be back to technology outsourcing, since understanding high tech and the internet is only for capitalists.

Technology Isn’t Creating Enough Middle Class Jobs

Yesterday we talked about how America is losing middle class jobs to technical outsourcing on our way to becoming a land of spreadsheets and flags. Today, let’s discuss another aspect of that; how technology continues to cost more and more mid-skilled jobs. We usually think of technology as a great panacea, making most of our processes more efficient. In fact, many of us can look back on the “sneakernet” of the 1980s and feel good about how far we’ve come with technology.

But technology has also reduced the number of middle class workers required, at a time when American wages are stagnant and benefits are falling for the remaining available jobs.

The meme used to be that if technology replaced workers, new jobs came along and net-net, more people were employed. Although things weren’t that simple, by 1900 if you were displaced, you could get another job because 99% of all jobs were still done only by humans.

Today corporations tell us that the knowledge economy can take as many workers as we can create, and since we can’t create them fast enough, technology firms need more of the H-1B visas we discussed yesterday. This is false. Facebook is touted as a prime player in the knowledge economy, but it only employs 5,800 to service 1 billion customers! Twitter has 400 million total users. It has 2,300 employees.

What is the value of Facebook and Twitter to the jobs economy? These are two of our very “best” success stories, and they only employ 8,100 workers. They have had a huge impact on society, but the total jobs they have created are only a rounding error in our economy.

Much of what we want to buy is produced in factories increasingly run with robots, and maintained and operated by small cadres of engineers. Increased sales of iPhones only add a few sales jobs at $12/hour in the US and not many new factory jobs in China. Also, keep in mind that globally, some 3 billion people are looking for work and the vast majority are willing to work for less than the average American.

We all know that technology is costing jobs, and by some estimates it could cost half of all current jobs in the next 20 years. So, we can expect an ever-greater number of unemployed chasing an ever-shrinking number of jobs that can’t be eliminated or simplified by technology. Thus, the prognosis for many medium and some higher-skilled workers appears grim. With this being said, technology is benefiting a lot of businesses and the way they operate. You’ll get a better understanding of it just by reading these Quotes about AI. Seeing as technology doesn’t look like it is going anywhere anytime soon, we might as well use it to our advantage in a business.

The oligarchs have seen these forecasts. That may explain their unwillingness to do anything serious to create effective jobs programs here at home. They don’t need to do anything, because there is a (virtually) infinite supply of skilled and unskilled workers in the overpopulated third world.

The issue is not technology, or robots, or restoring our manufacturing base. Nor is the issue better skills, or technology or outsourcing. We have too many people chasing too few good jobs.

Incomes will continue to stagnate, because automation does not threaten unskilled jobs. This is sometimes called “Moravec’s Paradox”, which says that, contrary to traditional assumptions, high-level reasoning requires relatively little computation, but low-level sensorimotor skills require enormous computational resources. The “Roomba” robotic vacuum cleaner is, despite years of development, just an expensive toy. It has had zero impact on the market for janitors and maids, yet, wages for American janitors and maids have fallen because of competition from the currently unemployed and newly arrived immigrants. While the Roomba aims to be a forward-looking cleaning solution, it still cannot compete with the manual vacuum cleaners, like Bissell’s, that still prove to be the preferred choice despite innovative attempts to move towards automation. See this link for Bissell vacuum cleaners – https://www.bissell.com/vacuums/upright-vacuum-cleaners/

This is why the quest for better technology has become the enemy of sustaining middle class growth in the developed world.

Monday Wake Up Call – June 1, 2015

How many hours does it take to make rent at the minimum wage? The National Low Income Housing Coalition looked at the number of hours minimum-wage employees have to work per week in each state just to rent an apartment and survive financially. Their headline conclusion is there is no state where a minimum wage worker can earn enough to make the fair market rent for a two-bedroom place on 40 hours a week. West Virginia tallied the fewest hours at 63 to make the average fair market rent. Hawaii was 175 hours. California, Maryland, New Jersey, New York and Washington, DC were all over 130 hours. So, no chance to get an average place for a family while working 40 hours. Here is a chart from their report:

The Wrongologist would have preferred if the study had used median rents rather than average rents. The red bars show the gap in hourly wages between the state’s minimum wage and the cost of an average two bedroom place. This is another artifact of the Great Recession. Let’s recap what has happened since it ended:

• The percentage of people employed in the US has never recovered
• All income gains went to the top 1%
• There has been a huge bull market in stocks, despite stagnant income for all but the top few

If we don’t wake up, America will be a banana republic, with the emphasis on the “banana”, since the “republic” is already dying. The US will be small enclaves of massive wealth run by a few oligarchs. Think of it as Manhattan, a few square miles where the Corporations and their top employees reside, surrounded by a sea of low wage cast-offs.

None of this is inevitable. We could increase wages, we could rebuild our decaying infrastructure. This approach is dismissed as “Keynesian” by our right-wing brothers. The only kind of Keynesian stimulus they will accept is military Keynesianism. It’s not that peaceful Keynesian stimulus doesn’t work, it’s just that they won’t benefit from it. They see war as prosperity. China is next in their battle sights.

Wake up America, time is running out to keep us on a course that avoids our demise as a middle class economy. The next election may be the most important in our lifetimes. Here is today’s wake-up call, Amy Speace, a folk singer featured in a NYT Money section article. Here is her song, “Spent,” about trying to make rent:

Sample lyric:
We’re head over heels,
In over our heads,
We borrow and steal
To pay the rent.
How are we gonna save any money
When it’s already spent?

For those who read the Wrongologist in email, you can see the video here.

Today’s breakfast links:

Study shows human attention span now lags that of a goldfish. Who is behind the study? Microsoft, who wants to learn how modern technology impacts the attention span of people who use it. (Insert your own joke here)

Sudden loss of ice in Antarctica was large enough to affect Earth’s gravity. The ice loss causes small changes in the gravity field of the Earth, which were detected by a satellite mission, the Gravity Recovery and Climate Experiment (GRACE).

What do you get if you take the blades off a wind turbine? A better wind turbine. This new turbine is a hollow straw that sticks up 40 feet up in the air and vibrates like a guitar string when the wind blows. Its 50% cheaper than blade turbines, and while it is also 30% less efficient at capturing energy, a wind farm can double the number of bladeless turbines that occupy a given area. That’s a net energy gain of 40%. The company is Vortex Turbines. Invest at your own risk.

A new salt reactor will use spent nuclear fuel to make energy. This nuclear reactor generates 75 times the electricity per ton of uranium compared to today’s light-water nuclear reactors, since it burns 96% of its fuel, compared with only 4% in light-water reactors. The company is the venture-funded Transatomic Power. They hope to build a 20-megawatt demonstration reactor by 2020. With nearly 80,000 tons of radioactive waste in the US (and with 2,000 tons added every year), it could turn something toxic into something useful. Invest at your own risk. With this being said, it could be as simple as doing some research into something like uranium mining stocks and finding out about this sector in this particular industry. The more people know about investing, hopefully, the more clued up they will become and potentially make better decisions.

A PA newspaper published a letter calling for President Obama to be executed, but now they’re apologizing. The paper says: “We will strive to do better in the future.” Another example of our media’s inexorable descent. They are only sorry they got caught.

Here is a list of Zagat’s best brunches in Manhattan.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Technology