Guest Post: Why the Job Market Will Continue Shrinking

Tyler Durden's picture

Via Charles Hugh-Smith of Of Two Minds blog,

The paradox of an advanced post-industrial economy is that the number of jobs needed declines even as the cost of living rises.

The fundamental dynamic of America's job market is simple: we need relatively few workers to provide the absolute essentials of life even as the cost-basis of the economy inexorably rises. In other words, there are fewer jobs even as the costs of maintaining a "middle class" life rise.

Let's start by observing how all the financial data in the world does not necessarily describe the primary dynamics of an economy. There are a number of factors that cause this disconnect between the primary forces at work beneath the surface and the data.

One is that economists tend to focus on situations with abundant, easy-to-interpret data. If you're only looking for roses, then you ignore everything that isn't a rose. So economists seek dynamics that can be easily explained by available data, and financial factors that they are paid to examine. Everything else is ignored, especially if the act of examining it casts a skeptical light on a self-serving Status Quo.

One key reality that is rarely if ever discussed is that the number of workers needed to provide the bare essentials of life to the 313 million residents of America is modest. Let's stipulate that bare essentials include food, heat in winter, clean water, sewage and waste disposal, public health (innoculations against pandemics, etc.), public safety and enough energy to fuel these essentials. If life were suddenly reduced to these basics, and no energy were available for anything but these essentials, then how many full-time workers would be needed?

Roughly 1% of the workforce raises the vast majority of our food, and a modest number of workers maintain the water and sewage systems, natural gas pipelines, furnaces, etc., A similarly modest number of workers maintain public health and safety and provide transport of essentials.

Of the official workforce of 154 million, how many fall into this "absolute essentials of life" category? Perhaps 10% or 15 million people? Even if we double that to include all sorts of non-essential but "critical" goods and services, then that's perhaps 30 million workers, roughly 10% of the population and about 12.5% of the real workforce of 240 million (the Federal government has relegated roughly 88 million working-age people to the zombie-status of "not in labor force" to keep the official unemployment rate low).

We all know the dynamic behind this dramatic reduction in the number of people needed to provide the essentials of life: enormous increases in productivity based on abundant fossil fuels and advanced technology.

Even well-made infrastructure requires maintenance, but this process of replacing aging transmission lines, water mains, highways, refineries, etc. requires a relatively modest number of workers because machines do much of the work.

If you doubt this, stop and count the workers on a major repaving project or the construction of a highrise building. A very large multi-story building is generally assembled by about 100-150 workers, more during certain stages and less during others. Most of the components are fabricated in factories where machines do most of the work.

Ask how many frontline police officers are on your local force. Cities of a few hundred thousand might have 200-300 officers, larger cities might have 800-1,000. It's not a large number.

On a macro-scale, the challenge in advanced economies is creating "make-work" for 80% of the working age population. This is not an issue in developing economies, as most of the workforce is non-market and does not participate much in the cash economy. For example, only 7% of India's vast workforce of hundreds of millions of people gets a paycheck. The other 93% survive via barter, raising their own food, a bit of trade or occasional labor for cash, etc.

Before industrialization, roughly 50% of the U.S. population and workforce lived and worked on farms. The surplus of their labor fed the other 50% who lived in urban areas, and that cash supplied the few essentials the rural dwellers needed.

The paradox of post-industrial economies is that the cost of living rises even as the efficiencies of providing essentials reduces the number of essential jobs. Some of this may be due to Baumol's Disease, a topic I have covered before (Productivity, Baumol's Disease and the Cliff Just Ahead, December 8, 2010).

Baumol's cost disease is named after economist William J. Baumol, who with William G. Bowen described a critical difference between goods-producing and labor-intensive work.

Baumol and Bowen noted that if productivity/wages rose by 2.2% a year and costs rose by 2%, then over time workers could buy more of everything--goods, services and government services paid for with taxes.

They also observed a critical, long-term difference between the rates of productivity growth in goods-producing industries and labor-intensive industries such as nursing and teaching. (I would also include the Armed Forces as an example.)

Goods-producing industries could achieve very high productivity growth as labor-saving automation and supply-chain efficiencies scaled up, while nursing and teaching required the same number of hours with patients or students as in years past. In other words, productivity in labor-intensive services has intrinsically lower rates of productivity increases than goods-producing industries.

Baumol and Bowen then described the peculiar result of this: as GDP increased due to goods-producing improvements in productivity, the relative share of low-growth-productivity services would rise.

Thus machine-produced TV sets and computers fall in price while labor-intensive healthcare costs rise.

While this is undoubtedly one causal factor, it is not the only causal factor. I think there is an implicit assumption being made on both a policy and cultural level that higher costs are acceptable because it "means more people are being put to work."

So when the cost per military fighter aircraft leaps from $56 million each (the F-18) to $200 million and $300 million (the F-22 and F-35), then we accept this as OK because we assume more jobs will be created as costs rise.

Gross waste and inefficiency is thus accepted as the "cost" of creating more jobs.

The problem with this implicit pact is that a rising percentage of these jobs are friction: they do not increase productivity or wealth, they merely consume wealth. In the case of fighter aircraft, the cost has leaped so dramatically that it is now apparent the nation cannot afford a fleet of these hyper-costly (and apparently troubled) aircraft.

Will 100 of these aircraft prevail over 1,000 dirt-cheap drones? How about 10,000 drones? If the future of warfare is increasingly powerful unmanned networked drones (and it clearly is), why are we spending $1 trillion+ on hyper-costly aircraft that are essentially designed for a previous era?

We're not building miltary dominance with these programs, we're sinking money down ratholes, just as we're not "buying" more health with our 17% of GDP spent on sickcare, we're simply managing more chronic diseases.

In the case of healthcare, patients being issued $1,000 a month in medications are not necessarily "getting better," rather many thousands are dying of accidental overdoses. Though the U.S. spends twice as much as other advanced democracies as a percentage of GDP on healthcare, Americans are arguably less healthy in aggregate than the citizens of Japan and Australia, nations that spend about 8% of GDP on healthcare while the U.S. spends 17% of GDP.

These are but two examples of trillion-dollar friction that is sapping the nation's wealth and vitality. Since the nation cannot actually afford to spend $1 trillion on the F-35 program or $2.5 trillion every year on a healthcare system of which at least 40% is fraud or paper-pushing, then we have been borrowing $1.5 trillion every year to maintain the illusion that these trillion-dollar sinkholes are sustainable.

The solution to the post-industrial decline of labor is not unproductive "make-work" jobs and borrowing trillions of dollars until the system implodes, it's lowering the cost basis of the entire economy and culture. The central paradox of an advanced post-industrial economy is that the number of jobs needed declines even as the cost of living rises. The only way out of that paradox is to radically reduce the cost-basis of the entire economy, which means eliminating all the systemic sources of unproductive friction.

I will discuss this further in the days ahead.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Lazarus Long's picture

do robots dream of electric sheep

Joe Davola's picture

Where's the Ghost Shirt Society meeting?

azzhatter's picture

We should outsource congress to somewhere like Greece. They couldn't fuck it up any more than it already is and it's more fun to watch than the current pasty faced old white dudes

debtor of last resort's picture

It's great when robots can do all that work en we all can live our middle class lives.

Aductor's picture

My question is, when will CNBC be run by robots?

Aductor's picture

I doubt it. Even robots can't be that dumb.

Seer's picture

Just like with doctors, programmers also have a "50% graduated at the bottom of their class" rule.  But, given that they continue to keep TPTB propped up I'd have to say that they're really not as dumb as you might think. (dumb would be those who would follow them)

Mercury's picture

The paradox of post-industrial economies is that the cost of living rises even as the efficiencies of providing essentials reduces the number of essential jobs.

No, this is the non-paradox reality of mega-government.  The three examples of military, teaching and healthcare are all areas dominated by the government.

Unproductive friction? You don't say...

Seer's picture

Has more to do with declining resources and increasing populations.  I don't see the "private" sector being any more smart about this than the govt...

cougar_w's picture

All true and correct. But it is a situation made possible only by abundant cheap oil, and to a degree by cheap coal.

And so I predict that very soon all those hands made idle by technology will be very busy indeed.

We can stop fighting this battle now. Nature has decided, and "modern men" are not going forward.

Seer's picture

And those idle'd hands will be all fucked up from texting.  Our most defining gift -opposable thumbs- and we go and fuck them up...

Arnold Ziffel's picture

How do you lower the "cost basis" if labor costs $60 /hr?

Bartanist's picture

I think what CHS may be implying is that even with much higher labor rates, the cost of labor in any product might still be less than 10% of the total costs if sufficiently automated. It is the additional costs in overhead, regulatory, taxes, inefficiencies, benefits and increasing proft etc. that change the economy from a self-sustaining one to an imbalanced one.

However, IMO, the first thing that would have to go is the growth paradigm.... getting rid of the growth paradigm allows us to get rid of inflation and interest, two additional sources of friction in the pipe that make mature economies self-limiting. There can still be investment and capital formation, but the payback would be in dividends, not interest.... which makes savings critical or makes the government the source of all money (spend money, lend money and then tax to get it back as necessry).

Bartanist's picture

A couple of points.

1. The US would require many more workers to supply its goods if businesses were not involved in profit (and hence GDP) inflation through labor arbitrage.

2. I am thinking that if we took all of the nonproductive friction out of the pipe, we could afford to pay those value adding jobs that were brought back here producing useful value adding goods a living wage and still decrease the total cost of living, overall.

Globalization is both the source and solution for a whole bunch of issues. How can buy yatchs and useless items while there are hundreds of millions of people living below the subsistance level all over the world. Does sending value adding jobs to China change that?

Of course, I do not see any evidence that those who believe they are running the planet have any believe that it is good, right and fair.

Goatboy's picture

Finally an article which deals with reality.

ejmoosa's picture

Yet the correlation between the rate of profit growth and the rate of job creation is higher than it has ever been, with an r value of .91 for the data over the past 11 years.  This implies that 81% of job creation or loss is directly related to the rate of profit growth.

So if you really want to see more jobs, you need to see more profit growth.

 

http://www.nolanchart.com/article9553-why-job-growth-will-be-turning-neg...

MiniCooper's picture

When I think about my lifetime this phenomenon is writ large.

I grew up on a farm in the UK where 3 workers worked (including me). Now only one man works there and I left the land and now trade stocks by computer. The farm is owned by a man who only has it as a tax shelter and he made his money out of property speculation.

Had a chat with a friend today about a similar topic. He noted that we spend more money and time now watching things like football and TV shows and playing with gadgets that provides nothing 'real'. Nothing that we actually 'need' for survival just purely enjoyment. Its really bread and circuses and I honestly feel a fraud telling my kids to work hard at school when all their friends dream of being football (soccer) stars or X Factor stars. Maybe the kids have worked this out for themselves and they are right. Why work hard to pay taxes to keep a rotten system going a little longer?

Maos Dog's picture

I completely and totally disagree with the premise of this article.

What you are seeing is not the "success" of disruptive technology putting people out of work, and the "success" of increasing productivity requiring fewer people to support infrastructure, but the complete abject failure of our culture, regulation environment, and education system to prepare people for the new realities and to take advantage of the vast opportunities this new technological environment creates. 

The culture of innovation is gone, killed by regulations and high barriers to entry, venture capital goes to groupon, facebook, and iApplications, and smart kids going into law and finance for the "quick and easy" buck instead of STEM.

All these mis-allocations add up and make it impossible to respond to a changing technological environment.

ejmoosa's picture

I agree Maos Dog.

 

We have allowed government to continue to define the playing field from the board room to the reearch lab.  Every aspect of business has been penetrated by rules and regulations that limit what can and cannot be done or tried.  

 

In the past, businesses experimented and found the best practices.  Today, government tells us.

 

If the only sports we could play in the US were on a basketball court, our options for activities would be certainly limited.  Yet because so many thought outside the box, we have dozens of new sports activities, some that even pay athletes to perform them.

Our government is our single largest restriction on what we are capable of.  At some point, one would think business leaders would begin speaking out on this.

 

Ayn Rand referred to this as the "Sanction of the Victims".  They are doing this with our permission and our own money.

 

It's time we revoked that permission, before it is too late.

 

blunderdog's picture

You moron.  There was never a culture of innovation.  "Barriers to entry" are created (and eventually cemented into legislation) by the successful businesses of the previous generation.

Given that you're so on top of this, what's the pitch? 

What's your vision of the next successful business, enabled by the vast opportunities created by our current technological environment?  These are so vast, it shouldn't take more than a few seconds to list a few.

Maos Dog's picture

Are you out of your mind?

"There was never a culture of innovation."

No culture of innovation?

The early automobile industry?

The early areospace Industry?

The early computer industry?

The early software industry?

You know these industries were started by small companies and garage-based businesses?

 

Who is the moron???

 

"Barriers to entry" are created (and eventually cemented into legislation) by the successful businesses of the previous generation"

Thanks for making my point here about regulations!!

" These are so vast, it shouldn't take more than a few seconds to list a few."

Just off the top of my head:

Alternative Enegry / Micro-Fabrication / Micro-Engineering / Supercomputing / Medical Devices

Alt-Energy is a pet-peeve of mine, the regulation required to just get a small lab going is insane. It is illegal to even grow the tree that gives the best oil per acre in this country. I detailed this in an older post. 


blunderdog's picture

The "success stories" you mention don't have anything to do with a "culture of innovation." That's just fairy-tale poetic license.

There's INCREDIBLE innovation going on today--in the past 10 years, there have been a greater number of important technological developments than there were between 1900 and 1970.  If ever there was one, TODAY would be the example of "culture of innovation." 

(Except there never was one, and there isn't today either, because most people still aren't that clever or creative when it really comes down to it.  Most folks just want a comfortable routine.  OK, so there's that.)

   Alt-Energy is a pet-peeve of mine, the regulation required to just get a small lab going is insane. 

A small lab?  I haven't done much with that stuff lately, but back when I lived upstate, I HAD a small lab in alt-energy going.  I didn't try to make a living with it, of course, because no one was looking for the products.  But the same Algers heroes are working from the same garages as the guys in the 20th century. 

Maybe you can't get a loan for speculative technology (because finance is inherently pretty conservative), but you're absolutely nuts if you think today is WORSE.  In fact, with so many folks out of work, this is the ideal time to see those garage-heroes changing the face of the planet.

And ya know what?  They're doing it.  Go take a look at virtually any "gee whiz" tech website and tell me where the problem is.  It's absurd.

  It is illegal to even grow the tree that gives the best oil per acre in this country. I detailed this in an older post.

Someone clever might be able to come up with a different plant to use.  You know....innovate a different approach. 

And someone bold would grow the trees anyway, because entrepreneurship involves some risk.

If you're really worried the Feds are going to come arrest you for trying to find a better source of biodiesel, you don't have the cojones for this shit, so don't kid youself.

Maos Dog's picture

First, you hand-wave away the major technological advances of the 20th century, Then say there is no culture of innovation, then say wait we are actually in the greatest culture of innvoavtion, but of of course without giving any examples, which you had compelled me to provide.

You really think that SOX, cronyism, and regulations are not impacting availability of risk capital to new firms and hurting innovation?

Then there is this:

"Someone clever might be able to come up with a different plant to use.  You know....innovate a different approach.

You are kind of making my point here again. I would be starting a venture with one arm tied behind my back, due to regulation I can't use the best available resources to start my project.

Then, you talk about "risk"

Risk of a new venture, in the old days, was about lossing your sweat equity, and your capital invested. Nothing ventured nothing lost.

The "risk" we are talking about here, running an alt-energy lab, is the risk of Fed's comming and raiding my property for the un-licensed equipment which is now a Felony (Maybe it wasent when you did your lab?), with USDA guys in tow to poison and / or burn down my trees, after of course shooting my dogs to gain access to my property (Killing family dogs is standard raid pratice now). I think a lot has changed since you had your lab.

 

blunderdog's picture

I know what I wrote, you don't have to tell me, but fine, I'll list a few items.  You may not think they're that important, but it might help to start somewhere.

A few quickies from the last decade:
We've built a data-monitoring infrastructure that captures data about every piece of electronic information transmitted between billions of users on a global network. 
We've designed and implemented computer hardware and software which can translate human thought directly into commands.
We've grown replacement human organs and blood-vessels in vats from tissue samples from individuals.
We've built a dirt-cheap water filtration system which can be carried by any normal individual and will provide adequate potable water for that individual for at least 20 years assuming dirty/contaminated water is available.
We've found a way to index huge datasets across multiple computer networks to construct "virtual reality" environments from a degenerate sample of independent images published on the web.
We've sequenced the human genome.
We've built thousands of completely artificial life-forms which perform specific chemical operations.

Now...as to this:

   You really think that SOX, cronyism, and regulations are not impacting availability of risk capital to new firms and hurting innovation?

My answer to you is an emphatic NO.  Availablility of risk capital has always been a product of social connections, not brilliant ideas, and the government has very little control over where that money goes.  In the current economic model, venture capital is available in effectively unlimited quantities to anyone who offers a low-risk financial return. 

Low-risk financial return has nothing to do with innovation.  The dotcom bubble was a perfect demonstration of why pouring money into new technology doesn't result in true breakthroughs in technology--everyone wants to buy last years breakthrough, but it's not a breakthrough any more, and someone who actually has a real insight is not aided by the set of constraints that come along with building a major corporation. 

The "risk" we are talking about here, running an alt-energy lab, is the risk of Fed's comming and raiding my property for the un-licensed equipment which is now a Felony (Maybe it wasent when you did your lab?), with USDA guys in tow to poison and / or burn down my trees, after of course shooting my dogs to gain access to my property (Killing family dogs is standard raid pratice now). I think a lot has changed since you had your lab.

As I mentioned, if you can't stand the risks, you're not cut out for that sort of work.  I'm sorry, it's always been that way.  You think you'd have flown on the first plane?  Dream on.  You want it easy.  It's not easy.  If it were, everyone would do it.

I'm not saying you SHOULD build an alt-energy lab.  I'm saying you disqualify YOURSELF from any kind of accomplishment if you're expecting someone else to greenlight you, and finance you, and promise to keep you out of TROUBLE.

What do you think? Henry Ford would listen to your sob-story and say, "Yep, it's real rough Maos Dog, you know, I wouldn't try to start a car company amid all this shit either.  Back in 1903 it was easy."

Maos Dog's picture

Thanks for the examples. However, some of the examples you listed are big corporate science projects, which is not what I am discussing. 

This statement:

My answer to you is an emphatic NO.  Availability of risk capital has always been a product of social connections, not brilliant ideas, and the government has very little control over where that money goes.  In the current economic model, 

Is an example or cronyism, which is one of the points I am complaining about.

About this:

venture capital is available in effectively unlimited quantities to anyone who offers a low-risk financial return

"Low-Risk" financial return is not venture capital, venture capital is "high-risk high-return" by definition.  This also is only addressing one half of the issue I raised, which is government regulations hurting innovation, of which I provide one example from personal experience, however there are many more that can easily be found all over the internet.

Regarding risk:

 

"I'm not saying you SHOULD build an alt-energy lab.  I'm saying you disqualify YOURSELF from any kind of accomplishment if you're expecting someone else to green-light you, and finance you, and promise to keep you out of TROUBLE.

What do you think? Henry Ford would listen to your sob-story and say, "Yep, it's real rough Maos Dog, you know, I wouldn't try to start a car company amid all this shit either.  Back in 1903 it was easy."

 

Basically, your argument is "suck-it-up" followed by pretty much calling me a coward. I really don't think Henry Ford, or any other innovator I can think of, faced risk of arrest and thousands of dollars of legal trouble and jail time for trying to open a lab. I would love to see a list of these brave heros carring out research in the face of major jail time that you believe exist. I really can't believe this argument from you is serious and think your just trolling me at this point.

 

blunderdog's picture

This is a very simple disagreement.  You think you're prevented from doing incredible stuff because of the obstacles before you.  I think you're not even trying to do this incredible stuff because very very few people are actually suited to it, and you ain't one of 'em. 

You've got some very compelling excuses for why you can't do what you say is so important to you.  I'm telling you it's ever been thus.  Not much has changed.  Your idea that there was some golden historical period is FALSE.

"government regulations hurting innovation" have ALWAYS been there.

"cronyism" has ALWAYS been the biggest factor in financial opportunity.

When I used to sit in meetings with the VCs, all I *ever* saw were guys with literally more money than they could ever use trying to find the easiest way to fob all the risk off onto the customers.  For me, it was only 6 meetings--if you've been through the process a lot more often, obviously it's your own judgment.  I was in 3 between '99 and '02, and 3 more between '04-'07.

Maybe you're right, and you'd be a superstar with a brilliant alternative energy solution if there weren't a big bad government all over your shit.

The obvious solution is to join me and become an anarchist.  But don't half-ass it, please. 

Seer's picture

Ah, another "technology will save mankind" type.

Technology is a PROCESS, it doesn't create anything (it only re-arranges things). Without physical resources and energy your beloved "technology" is no more than a cookbook in an empty kitchen.

besnook's picture

this is one of the great economic discussions of all time.

 

one can argue that one of the factors that made the great depression worse was the automation of goods produced and agriculture displaced millions of labor intensive old jobs from blacksmiths to sharecroppers. it wasn't until the massive capacity destruction(and human capital destruction) of ww2 that labor capacity could catch up providing the income for consumption that provided the need for more capacity.  as the capacity build out reaches a maximum labor wages also top out requiring a financialization of an economy to increase the need for more capacity to improve or maintain current living standards. eventually the minsky moment arrives and the whole thing comes crashing down so it can start over again. that is where we are now.

what the hypothesis doesn't include is the reaction to industrialization has been a drop in baby making because babies are liabilities in industrial economies and not assets as they are in primitive agrarian, poor healthcare economies. unless a country allows huge numbers of baby making immigrants to maintain population growth(population growth equals economic growth in the old school) an industrialized country could theoretically naturally adjust population to the demand for labor as is happening in japan. the population in europe is falling also but they are importing baby makers as is the usa.

all of this could be fleshed out in a coupla hundred pages of boring text and pretty colored charts but that is the gist of it.

 

of course, the easiest and swiftest way to achieve this adjustment in demand for labor is to destroy capacity and kill a huge number of people. that is the usual course of action.

Joe The Plumber's picture

That is the broken window argument

Even krugman admits that it is a fallacy that capital destruction improves the economy

Look at the video on you tube. The Fallacy of the Broken Window and u will see in multimedia form why capital destruction does not improve the economy or promote labor gains

besnook's picture

bastiat is not applicable in a fiat money system, there is money for everything because the resource is unlimited. it is financial utopia.

aside from that you missed my point.

Joe The Plumber's picture

Money for everything lol how is that working out?

You are arguing for capital and labor destruction as a solution. I did not misread you

besnook's picture

i am not arguing for capital and labor destruction. i am a realist. that is what will happen. anyone who thinks differently didn't pay attention in those "worthless" history classes.

JLee2027's picture

To correct the problem is simple. Women will revert to their historical role, leaving the workforce.   What are seeing today - two earner families - is a distortion of how things should be. 

 

besnook's picture

actually the two earner family was the norm in agrarian economics. the one earner family was a brief luxury.

Seer's picture

I think that "earner" needs to be defined. Seems that this term is highly biased toward employer-employee paradigm.

Vince Clortho's picture

As the parabolic advances in technology increase, we are now within reach of a utopian society where autobots will be able to produce every conceivable amenity for a population of zero consumers.

blunderdog's picture

   So when the cost per military fighter aircraft leaps from $56 million each (the F-18) to $200 million and $300 million (the F-22 and F-35), then we accept this as OK because we assume more jobs will be created as costs rise.

What?  Tut, tut, Charles, NO ONE believes that.  Even BIDEN isn't stupid enough to believe such a story. 

Defense contracting doesn't create jobs.  It maintains *overpaid* jobs and taxable earnings for the states in which the businesses reside.

The central paradox of an advanced post-industrial economy is that the number of jobs needed declines even as the cost of living rises. The only way out of that paradox is to radically reduce the cost-basis of the entire economy, which means eliminating all the systemic sources of unproductive friction.

Could it be...is it?  YES!  We're approaching awareness of 19th-century economic philosophy around these parts.  Yay, progress! 

If the crowd here has a clue, CHS should become persona non grata pretty quick.

(You can save time and learn this stuff by reading other people who were smarter than you and wrote books in the past.)

ussa's picture

Smith is incorrect that we are experience these problems because of the post-industrial nature of the economy.

He cites the real problem-frictions or gross misallocations of human and physical capital into nonproductive and even net loss activities.  To make matters worse, those rewards to nonproductive activities go to an elite class disproportianetly.

Cost are increasing because of cost shifting-healthcare, financial and energy sectors are masters of this domain.   Private profits and public losses or concentrated benefits and distributed costs define many of these markets. 

In the end the problem for the world is FASCISM, the marriage of the corporation and the state. 

At a minimum, the US turned to favor a form of fascism in 1913 with an acceleration in 1973. 

 

 

 

 

Seer's picture

"Cost are increasing because of cost shifting-healthcare, financial and energy sectors are masters of this domain."

Always it's "them," right?

No mention of the FACT that the earth can only spew out so much that can support humans' growth?  Sounds like denial to me...

Abiotic Oil's picture

The only way out of that paradox is to radically reduce the cost-basis of the entire economy, which means eliminating all the systemic sources of unproductive friction.

 

My vote is for eliminating the Federal Government as the main source of friction.

Hobbleknee's picture

+1,000

Can't vote you up because you used the Quote style.  Use quotation marks instead, if you want votes.

Stuck on Zero's picture

Poo!  This an old Capitalist piece of crap: 

The paradox of an advanced post-industrial economy is that the number of jobs needed declines even as the cost of living rises.

In a free market there is no surplus of anything anywhere at any time.  If there are too many workers you suddenly find yourself hiring more gardeners, car washers, maids, nannies, and handymen.  The invention of the plow didn't send 400,000,000 workers to the unemployment lines.  Unemployment is caused by the government pricing labor out of the reach of the consumer.


Joe The Plumber's picture

Lol a friend of mine observed that in G7 economies we put our servant class on disability

Precious's picture

You are actually completely stupid.  Of course there are surplusses.   Otherwise why would the word "surplus" even exist.  The equalibriums you describe take time to reach.  In the job market this can mean YEARS.   In the meantime there certainly are shortages and surplusses.

Seer's picture

"Unemployment is caused by the government pricing labor out of the reach of the consumer."

Consumption of slave labor???

epwpixieq-1's picture

"If the future of warfare is increasingly powerful unmanned networked drones (and it clearly is), why are we spending $1 trillion+ on hyper-costly aircraft that are essentially designed for a previous era?" - an excellent question

There ONLY 2 REASONS a when money are spent , when one can not afford to spend it. Either the money do not belong to this person/entity or he/she/it is stupid/negligent/corrupt and so on ... enough to do it.

Aren't you going to spend money that are not yours, and you will not be responsible for paying them back?

I will do, with pleasure, if someone else has to pay for the party. But surely I will feel very good playing along to I build/make/sell things that are needed for the common "good". Everyone enjoys parties, right?

All good things in live do not cost a dime or very little ( compared with all bull sheet crap around ). The only trick is that one has to be knowledgeable enough to get/have/make them.

emersonreturn's picture

in a nation where a small minority subsidizes the majority (a seemingly naive fifties sci-fi utopia) what are we to do with great untapped wasted parasitical mass?