Friday, July 01, 2016

Why Brexit and Trump

Voters are angry. Donald Trump, Marine Le Pen, Nigel Farage, UKIP, and the AfD party in Germany have all been accused of stirring up anger and hatred.
But anger is not the problem. None of those individuals or political parties are the problem.
Protectionism and isolation culminating in the Brexit vote in the UK, and the nomination of Donald Trump in the US are not the problem.
What is the problem? Why the anger?
Shrinking Middle Class
Wealth Gap
The above chart from the Wall Street Journal article IMF’s Grim Long-Term U.S. Outlook in Six Charts.
People Angry Because
  1. Banks were bailed out and they weren’t
  2. Middle class is shrinking
  3. President Bush’s Bankruptcy Reform Act of 2005 made kids with student loans debt slaves for life.
  4. Warmongering by the Bush and Obama administrators alike made billions for defense contractors at the expense of everyone but the contractors and their employees.
Instead of blowing up the world, making enemies in the process, and creating ISIS in the process, wouldn’t we have been better off building US infrastructure?
Social Anger
The above chart explains rising social anger perfectly. However, that chart does not portray the real problem.
Income inequality, the shrinking middle class, angry voters, and the rise of extreme political parties are all symptoms of the real problem: Central banks and their inflationary policies.
Productivity
Fed Chair Janet Yellen is very concerned about falling productivity. A chart from the same article shows the concern.
Productvity WSJ
Productivity Will Rise Again – Will the Fed Like the Result?
Autonomous cars, truck, and buses are coming. Millions of jobs will vanish by 2024 if not sooner. Productivity will soar.
The loss of millions of truck driving jobs will be a catastrophe to those who cannot do anything else, but will be a boon to everyone else who pays lower prices.
The Fed will get productivity, but will the Fed like the result when it comes?
Central Banks Insist on Inflation in Deflationary World
The big problem is central banks insists on inflation in a deflationary world.
Even the BIS says routine price deflation is not damaging (See Historical Perspective on CPI Deflations: How Damaging are They?)
Productivity enhancements are inherently price deflationary. More goods produced at less cost should mean falling prices unless demand from population growth more than makes up for productivity gains.
Few could afford big flat panel TVs when they first came out. Everyone has them now. Improvements on top-end cars eventually make their way into every car. The same applies to cell phones and technology in general.
If price deflation was a problem, it sure does not show up in sales of flat panel screens.
The things that have risen most in price are the places where the Fed and Congress meddled the most: The Fed with financial assets, and Congress with health care, education, and affordable housing.
Central Banks – The Real Problem
In the wake of the Great Financial Crisis, central banks launched round after round of QE. Bernanke praised his own efforts for the wealth effect. The result was yet another massive bubble.
The only winners were the banks, the brokers, and the already wealthy. Asset prices inflated, but who has the assets? The poor?
Minimum wages hikes cannot possibly help. Nor can negative interest rates in the Eurozone and Japan. Both will make matters worse.
Much of corporate financing is already used for stock buybacks at insane prices. Lower interest rates fuel asset prices, not investment. Wage hikes sure don’t encourage mores stores.
People are angry, but they protest the wrong things.
Whom to Blame?
  1. Socialists in France and Spain who cannot find a job need to point a finger straight at socialist work rules that inhibit firing. If corporations cannot get rid of employees, the only solution corporations have is to not hire employees in the first place.
  2. US students mired in debt should blame Congress, public unions, and themselves for going deep into debt in pursuit of useless degrees.
  3. Most importantly, people should picket the Fed (central banks in general) for insisting on the extremely misguided policy of 2% inflation in a deflationary world.
The first chart speaks for itself.

Worse yet, central banks, led by the Fed, have blown another bubble in the absurd attempt to defeat routine price deflation.
This is the third major bubble in fifteen years. The result will be yet another round of asset price deflation, a crisis largely of central banks own making.

Thursday, June 30, 2016

Jobs that are quickly disappearing thanks to robots



Thanks in part to automated mail-sorting systems, postal workers may be out of a job in the not-so-distant future.


By 2024, the US Bureau of Labor Statistics projects a 28% decline in postal-service jobs, totaling around 136,000 fewer positions than in 2014.


Mail carriers and processors aren't the only ones whose jobs are disappearing thanks to robots.


Automation technologies
that conduct physical, intellectual, or customer service tasks are
already affecting a variety of fields, most notably metal and plastic
machine workers.


As Business Insider previously reported,
information technology research and advisory firm Gartner predicts that
one-third of jobs will be replaced by software, robots, and smart
machines by 2025. And Ray Kurzweil, director of engineering at Google,
takes that prediction a step further with his prediction that by 2029
robots will have reached human levels of intelligence and be capable of
taking over purely intellectual tasks.


While what the experts are calling "The Second Machine Age" strikes
fear into the hearts of many workers, some argue that this increase in
computing prowess will simply eliminate old jobs and introduce new ones, resulting in a net-zero effect — or even an increase in jobs. And these new jobs may be safer and more interesting.


For now, based on the BLS' occupational outlook data, here are 15 American jobs that are already on their way out thanks to robots:

Check out the list



Jobs that are quickly disappearing thanks to robots - Business Insider

IF you want to restore a city, state or nation you have to start with the rule of Law

There is no poor country, state or city that has true rule of law.      

  The rule of law is a fair and open system of making and adjudicating rules aimed at protecting the life, liberty and property of the people.

 Today that is precisely why four or five billion people are poor and see little hope for change despite all the happy talk that pours from the institutions that are organized to aid them.

When you look at poor states, poor cities and the poor in them, the reality is they are living in a bubble where lawlessness exists.  They can't own anything good because people steal it.  Graft, corruption and evil is rampant in the government around them.  Being unsafe is part of their existance.

Those people can blame others, but they resist being lawful.  So lawlessness exists and therefore poverty is propagated. 

Lawlessness and poverty are two sides of the same coin.