
The way ahead - blahi
http://www.economist.com/news/briefing/21708216-americas-president-writes-us-about-four-crucial-areas-unfinished-business-economic
======
DubiousPusher
One of the strangest things about our work culture right now is the way it
sees factory work as a more moral or honorable than service work.

In history this wasn't always so. Factory jobs were first considered unskilled
positions whereas many service jobs required something akin to finishing
school to acquire.

Now we put manufacturing jobs on a pedestal and deem them worthy of high wages
whereas service jobs are lowly and what you do until you can get a real job.

Unions, with all their problems uplifted those jobs in the American
consciousness. And whatever your politics unions and wage controls are how
almost every country in the world guarantees high incomes.

~~~
AndrewKemendo
It's not really strange, if you map maslows heirarchy to a corresponding job
(either the outputs or the individual worker satisfaction) then it makes sense
to make these moral/honorable distinctions.

The world's Basic needs are realized through industry and agriculture

The worlds Psychological and Self Fulfillment needs are further up and are
realized through services.

~~~
dragonwriter
IIRC, while popularly referenced and in some ways intuitively attractive to
many people, Maslow's hierarchy of needs is basically speculation that has
never been born out scientifically.

So the fact that _if_ one assumes it models reality, _then_ certain observed
distinctions people make about jobs are sensible doesn't actually _make_ those
distinctions sensible.

(Also, psychological and self-fulfillment needs are realized through industry
or agriculture [pretty much all luxury products of either kind], and a some
Basic needs are realized through services.)

~~~
Kevin_S
True, but I think that the people's perception is what we are discussing here,
not what is actually scientifically correct.

Students are taught Maslow's hierarchy as fact, so I think it can be assumed
that the perception argument is fair here.

~~~
DubiousPusher
For me the problem with this isn't the invocation of Maslow's needs but the
step to saying that they have some bearing on how people view occupations. I
just don't think that's born out at all by reality.

Architect which is a very respected profession isn't fully necessary to meet
even the basic need of "shelter." You can build a house without an architect
but you can't without a builder.

While corn farmer and cattle rancher, the underpinning occupations of our food
system aren't treated with much respect or reverence at all.

------
omegaworks
> _Why have some on the far left and even more on the far right embraced a
> crude populism that promises a return to a past that is not possible to
> restore—and that, for most Americans, never existed at all?_

We know who he's referring to on the far right, but who on the far left?

When did populism become a dirty word?

> _Decades of declining productivity growth_

What decline of productivity is he talking about? The decoupling of
productivity from wages is the issue. Productivity has continued to rise while
real wages have stagnated. [0]

> _In the past, differences in pay between corporate executives and their
> workers were constrained by a greater degree of social interaction between
> employees at all levels—at church, at their children’s schools, in civic
> organisations. That’s why CEOs took home about 20- to 30-times as much as
> their average worker. The reduction or elimination of this constraining
> factor is one reason why today’s CEO is now paid over 250-times more._

This is a ridiculous rationalization straight out of little house on the
prairie. CEO pay is out of control because our values have shifted? Because we
are childless atheist heathens? Seriously? He is clearly ignoring rule shifts
in the system[1] that biased us toward this outcome.

> _While the top 1% of households now pay more of their fair share_

Laughable from the president that made the Bush tax cuts permanent. [2]

What reality is he living in?

0\. [http://www.theatlantic.com/business/archive/2015/02/why-
the-...](http://www.theatlantic.com/business/archive/2015/02/why-the-gap-
between-worker-pay-and-productivity-is-so-problematic/385931/)

1\.
[http://www.npr.org/sections/money/2016/02/05/465747726/-682-...](http://www.npr.org/sections/money/2016/02/05/465747726/-682-when-
ceo-pay-exploded)

2\. [http://www.epi.org/blog/bush-tax-cuts-
stay/](http://www.epi.org/blog/bush-tax-cuts-stay/)

~~~
lobotryas
On the far left? Maybe People who 'member Unions and being able to support a
large family doing relatively unskilled factory work.

Populism became dirty around the time nationalism (or just being proud of your
country/where you were born) became dirty. Maybe it's a response to some
people in the West wanting to be seen as "unique, individual thinkers" (to put
it politely) instead of a part of a bigger whole.

~~~
omegaworks
> _On the far left? Maybe People who 'member Unions and being able to support
> a large family doing relatively unskilled factory work._

This seems like the wrong interpretation since later in the article he states
"Unions should play a critical role." harkening back to that era where
relatively unskilled labor could support a middle class lifestyle. (You say
this like it's a bad thing.)

Not sure how much of this article is playing the politics game and how much of
it is grounded in the facts that he actually believes.

------
icc97
A couple of interesting points from it:

\- the number of women in employment started falling for the first time since
1948 in 2000. Where as male employment had been falling for a long time, women
had been growing. Shows how big the impact of the down turn was on female
emplyment.

\- America even with Bush in charge and refusing to sign the Kyoto Protocol
managed to cut carbon emissions since 2000

~~~
akhilcacharya
#2 was probably because higher gas prices meant more efficient new cars. The
last 16 years have also seen higher emissions and efficiency standards, as
well as more electric cars and hybrids on the road than ever before.

~~~
matt4077
It's mostly energy generation that changed. Industry & transportation only
contributed a fourth aas much each:

[https://www3.epa.gov/climatechange/ghgemissions/inventoryexp...](https://www3.epa.gov/climatechange/ghgemissions/inventoryexplorer/#allsectors/allgas/econsect/all)

~~~
neuromancer2701
Yeah, Almost all of the gains came from switching from coal to natural gas in
power plants.

------
pdog
_> The profit motive can be a powerful force for the common good, driving
businesses to create products that consumers rave about or motivating banks to
lend to growing businesses. But, by itself, this will not lead to broadly
shared prosperity and growth._

Any proponents of free market capitalism (or libertarianism) wish to chime in
on this essay?

~~~
blahi
I don't think any non-radical person would be a proponent of 0 regulation
capitalism. That is basically anarchism.

The problem is not with radicals, they will always exist. The problem is that
people in the middle are getting tripped up and supporting radical measures.

The problem, and why I felt I had to submit this, is that there actually is a
threat to capitalism. Things are better than ever, and at the same time people
feel wronged. So wronged that Obama actually thinks that there is a real
threat to capitalism and we might be at the verge of changing political and
economic systems. This is very frustrating and scary. And I see no way to make
people realize what they are doing.

~~~
amelius
We can always change economic systems with a dial, and turn the dial back when
things turn bad.

~~~
eloff
You make it sound simple, painless. It's not. There could be decades of
suffering and chaos. People would literally die. Look at Venezuela for an
example.

~~~
amelius
That is an unfair comparison, because they didn't implement the change
continuously.

~~~
eloff
I'm not sure I agree with that, but any comparison would be unfair because all
situations are different and the real world is very messy. But that's just the
problem.

------
evo_9
What worries me most about reading this is the section about Capitalism and
how it's the reason America is great and essentially the key to moving
forward. I don't disagree that in the past this was one of the key drivers of
America's success, but today, hard to see it that way.

In fact, in many ways capitalism is the root problem America now faces. In
theory capitalism is great until you get far enough along its timeline and
your reach present-day America. In present day America we have reach
Capitalisms ultimate iteration and unfortunately unfettered, fully realized
Capitalism is really greed run amok.

The way forward is going to require a new way of thinking about how a country
like America is structured at a fundamental level and I can't help but think
Capitalism is holding us back and causing more harm now than good.

~~~
rconti
America hardly has fully realized or unfettered Capitalism.

It has Capitalism influenced by countless tweaks, patches, regulation, and
special interests. Many regulations are necessary, but that does not mean that
they were all well-implemented, well-thought-out, or still necessary.

------
tekni5
I think the last decade is a sign we are living in end stage Capitalism,
perhaps it’s just the beginning and we will only see further economic
stagnation, lower productivity, fewer jobs and a further increasing wealth
gap. Finally there will be a series of economic failures, causing governments
to make fundamental changes to the global economic system. Reassessing the
parameters that define progress, productivity and advancement.

I envision that a new system will no longer rely on speculative market forces,
but instead go back to command style economies powered by artificial
intelligence. There might even be a rise of a new monetary system, which
integrates harm reduction in some form.

------
GuiA
So, in a nutshell:

 _1- fewer people than before live in "extreme" poverty, this is good

2- income inequality is higher than it was, this is bad

3- productivity is lower than before, this is bad

4- joblessness is higher than before, this is bad

5- wall street has gone off the rails, but we're fixing that, this is good

6- we need to get our shit together regarding climate change_

With the general overarching message that Capitalism is mostly a positive
force in the world.

I agree with some, but take issue with some.

1: this is a fine line to walk. How do you define extreme poverty? Does moving
out of a tiny farm village in rural China to work at a factory in Shenzhen
count as getting out of extreme poverty, and who does it really benefit? In
"Geek Heresy", Kentaro Toyama gives the example of trade in southeast Asia
that historically took place via narrow waterways navigated by boats. During
the dry season, these canals dry up, and productivity goes way down - but it's
fine, because it's a known cycle, so people are prepared for it and get a
large chunk of freed up time. When this gets replaced by roads and trucks,
sure you get a 24/7 transport system, the economy etc. goes up, but now people
don't get 6 months a year for festivals. In that case, that might count as
getting out of poverty by western centric economic standards - but is it
really a gain?

3 and 4 seem kind of inversely correlated, which is problematic if you want to
optimize for both. It takes a single digit percentage of the population
working in agriculture to address the food needs of an entire country, when
500 years ago it took 99% of the population. As our tools make us more
productive, there is less need for individual workers. Obama's point on better
benefits, community colleges, etc. all stand - but at some point we probably
need to embrace the fact that in a modern society, there will probably never
be enough jobs to put the entire population at work. That's something that
must be dealt with, and something along the lines of basic income seems
inevitable if one wants to address that problem well.

He also says that "In 1979, the top 1% of American families received 7% of all
after-tax income. By 2007, that share had more than doubled to 17%", but then
says " Without a faster-growing economy, we will not be able to generate the
wage gains people want, regardless of how we divide up the pie". The problem
here seems to be more the fact that the top 1% gets more of the pie, rather
than that the economy needs to grow faster.

Finally, I wish 6 got more than just a small paragraph at the end. It is a Big
Deal®, and the less we do, the more we will exponentially pay.

~~~
rmah
With regard to #1, most definitely yes. Over the last 30 years or so, real
wages for factory (inflation adjusted) workers have gone up by about 10x in
China. Today, it's about $4,000 to $6,000 per year for unskilled/semi-skilled
labor. Still quite low, but a HUGE improvement.

30 years ago, your typical person in china was a subsistence farmer or worked
for about $500/yr (in today's money). What that meant was that they were dirt
poor and under threat of famine in bad weather years. Dirt poor means no shoes
for your children, no radio or TV, no bike or scooter, meat is a treat instead
of a part of your daily diet. Real poverty still exists in China, but is now
confined to a fraction of the population instead of being the typical
lifestyle. Quite an improvement by anyone measure, IMO.

------
davidf18
> "The anti-immigrant, anti-Mexican, anti-Muslim and anti-refugee sentiment
> expressed by some Americans today echoes nativist lurches of the past—the
> Alien and Sedition Acts of 1798, the Know-Nothings of the mid-1800s, the
> anti-Asian sentiment in the late 19th and early 20th centuries..."

They are mostly anti _illegal_ immigrants. Obama has been trying to legislate
the legalization of illegal immigrants. Legislation is the job of Congress.
The Executive (Obama) is supposed to enforce those laws. Obama is not
enforcing the laws.

These illegal immigrants take jobs away from Americans. Plumbing and
electricians are licensed jobs in states and they have Americans working in
these jobs as a result. Carpenters and bricklayers are not licensed and as a
result illegal immigrants have taken these jobs as well as driven down wage
rates.

Edit: Also not noted, is the growth of (legal) immigrants from about 9 million
in 1970 (less than 5% of the population) to 43 million today (about 14% of the
population). Add to this 11 more illegal immigrants and this increases
immigrants to 54 million.

Moreover, a major cause of inequality is the high cost of rent in cities such
as SF, NYC, Boston, DC, LA (and also for example London) is "rent-seeking" of
local laws which create artificial scarcity of housing through zoning density
restrictions. This transfers income and wealth from tenants to landlords
(property owners).

Donald Trump holds a large position in Manhattan real estate so he benefits
from these unfair laws that benefit special interests e.g., wealthy landlords.
The markets can do an efficient job but parties that favored landlords getting
more money for their property favor these zoning laws.

~~~
polyfractal
> These illegal immigrants take jobs away from Americans.

Eh, this argument gets trotted out a lot, but it isn't exactly clear-cut. The
economy isn't a zero-sum game.

Sure, illegal immigrants do show up and undercut some jobs. Some percentage of
people will find themselves working at a lower wage, or lose their job and
need to find a new one.

But plenty of other people will find their business increased, higher wages,
more profit, etc. All these immigrants require services and commodities too,
and have to buy them from somewhere. They need to buy groceries, get hair-
cuts, purchase mattresses, buy cars. Illegal or not, they contribute to the
economy too.

Planet Money did a good piece on the cuban migrations to Miami in the 80's. It
was the perfect microcosm to study the phenomenon: many immigrants, contained
geographical region, etc.

[http://www.npr.org/2015/10/01/444912593/when-cuban-
migrants-...](http://www.npr.org/2015/10/01/444912593/when-cuban-migrants-
flooded-miami-what-did-it-do-to-the-local-economy)

Money quote at the top of the episode:

    
    
        SMITH: So 80,000 refugees came to Miami, and there was no effect on the economy?
    
        CARD: You couldn't detect any strong evidence of an effect one way or the other.
    
        SMITH: No effect, not on wages, not on unemployment rates. Card says this is 
        because there is not a fixed number of jobs in an economy. When a bunch of new 
        people come, yes, they get jobs. But they also start buying stuff, getting haircuts, 
        going to the grocery store, which means you need more barbers and more grocers. That 
        creates more jobs.

~~~
jklinger410
>zero-sum game

This meme is making it's rounds these days.

>Sure, illegal immigrants do show up and undercut some jobs. Some percentage
of people will find themselves working at a lower wage, or lose their job and
need to find a new one.

Right? No big deal!

>But plenty of other people will find their business increased

2/2 = 1

>have to buy them from somewhere

Was money created at some point? They took or undercut a job, and are spending
money that...the other employee who they undercut or took their job from would
have also spent...?

I'm sorry if I'm dense...either I'm missing some fundamental pieces of your
argument or there isn't much logic to it.

~~~
md_
Money isn't created per se, but value is.

This is what people mean when they say economies aren't zero sum. The total
value of the economy increases due to greater production (driven by an influx
of labor and increased demand), leading to more potential jobs and higher
wages.

~~~
davidf18
Actually, greater production is a combination of _capital_ and labor. The
Industrial Revolution was from capital investment in machinery that mechanized
clothing production for example.

It is wrong for Americans to have their jobs replaced by people who are in
this country illegally. It really is as simple as that. People who are in this
county illegally shouldn't be able to work at any job _according to the law_.

Meanwhile, the people who have been unfairly unemployed because of these
illegal immigrants and not fortunate enough to have their jobs protected from
illegal immigrants by state licensure requirements, are suffering as are their
families.

There are many societal costs when people are unemployed including many
medical issues from alcohol and other drug abuse and from children not growing
up in a stable environment, something society has to deal with for years to
come with increased crime.

Illegal immigrants don't have to remain out of the country forever, they
simply have to apply for a Visa like every other person who came to this
country legally (except of course, Native Americans and Blacks who were
brought here as slaves).

~~~
davidw
So here's the problem. Actually, a couple of them:

You can have a "papers, please!" kind of country, or you can have some level
of illegal immigration and work. You can't get rid of all illegals without
becoming a very, very different kind of place.

That said, you do want to try and minimize people living in the shadows. The
best way to do that is to make legal immigration cheap and easy, which is
currently the exact opposite of what we do in the US. It's basically
impossible for most Mexicans to move here unless they already have family.
This has all kinds of benefits: 1) people will be more likely to go home
because they know they can easily come back 2) they are less likely to be
exploited by shady employers 3) it really separates out the people who want to
just come and work from people involved in various kinds of illegal and
harmful activities.

~~~
davidf18
The number of legal immigrants has risen from 9 million in 1970 (less than 5%
of the population) to 43 million today (about 14%), so I'm not certain what
one means about it not being easy to immigrate. It is certainly easier than it
was.

By comparison, the UK which voted for BrExit largely because of the mass
influx of immigration from Eastern European countries with labor that competed
with British working class for jobs had 0.9 million 20 years ago (about 1.5%
of the population) to 3.3 million today (about 5%).

Thus, our legal immigration is about 1 in 7 compared with an increase to 1 in
20 in the UK.

Our immigrants also mostly compete with working class trades not protected by
licensure and other working class jobs.

Israel has built a security fence, while not perfect, has certainly decreased
the amount of terrorism. I have been there many times and am familiar with the
situation. They also have fences around Gaza and separating the border with
Lebanon. These fences _do work_.

There should also be some sort of electronic verification system for jobs that
goes beyond using illegal SSN's or someone else's SSN. There should also be
very large fines for employing someone illegally.

Americans deserve to have their jobs and wage rates protected from illegal
immigrants and those who hire them. It is so very, very unfair to them and
children to let this happen.

As things are, thanks to NAFTA and increased trade with China working class
jobs are being exported to outside the nation. In addition, other working
class jobs are being replaced by automation.

We owe it to Americans to help protect their jobs from illegal immigrants, who
are here because they are breaking our law.

~~~
davidw
> I'm not certain what one means about it not being easy to immigrate

That demonstrates willful ignorance of the situation:

[http://www.npr.org/sections/itsallpolitics/2013/02/22/172622...](http://www.npr.org/sections/itsallpolitics/2013/02/22/172622730/the-
line-for-legal-immigration-is-already-about-4-million-people-long)

Doing things the legal way is basically impossible for many, many people. We
should make it simple and easy for law-abiding people to come and work in the
US.

~~~
davidf18
> Doing things the legal way is basically impossible for many, many people.

But, many, many people, do immigrate to America legally each year. People from
all over the globe immigrate to America. Since 1970 there has been a steady
growth of immigrants from 9 million or less than 5% of the population to 43
million (legal) immigrants or about 14% of the population.

It might require years, but that what other people from other countries do.

Also, there are other countries besides the US. Many people immigrate to
Canada for example.

