We again gratefully contemplate the terrible price paid by those who gave their all so that America may remain the land of opportunity and the home of the free. The words and photo from Memorial Day - 30 May 2011 still apply.
From the pantheon of America’s richest and wisest, we hear that Warren Buffett has now discovered systemic unemployment, especially of the kind that no amount of education spending will cure. And the man has also concluded that some form of Guaranteed National Income is required to keep blood out of the gutters. A couple of days ago he wrote a piece – ‘Better than Raising the Minimum Wage’ – that was picked up by a number of media outlets. I guess that makes official what we on RR have been discussing and debating for years.
Mr Buffett presents a sensible case for a more robust Earned Income Tax Credit to bring low earning workers up to a comfortable living standard. He correctly tells readers “In recent decades, our country’s rising tide has not lifted the boats of the poor. … No conspiracy lies behind this depressing fact: The poor are most definitely not poor because the rich are rich. Nor are the rich undeserving. Most of them have contributed brilliant innovations or managerial expertise to America’s well-being. We all live far better because of Henry Ford, Steve Jobs, Sam Walton and the like.”
Using many words and numbers, he makes the case that technology is moving employable human skill sets to ever higher levels that are simply not accessible to people in the lower cognitive classes. The whole concept was illustrated graphically in the nearby ‘thousand word picture’ (from ‘edX Meets the Workforce’). The problem of using such graphics to vividly illustrate our systemic unemployment is that the overwhelming number of our citizens don’t do graphics, neither do they do numbers. But my oh my, do they do soundbites that promise more.
The above figure shows two overlapping distributions in the form of histograms. The green one indicates how many jobs are available at various levels of worker productivity. Of course, the higher the productivity level, the higher the required worker skill level. The red distribution shows the availability of workers at skill levels able to staff jobs at the indicated productivity levels. Where the green bars are higher than the red, we have jobs that the current workforce, represented by the red bars, cannot fill. And in the lower productivity jobs area, where the red bars stick up higher than the green bars, we have the systemically unemployed workers.
The problem is that new technologies cause the green distribution (bars) to migrate to the right. But the only thing that will increase the skill levels of workers, and therefore help the red distribution to also migrate to the right, is education/training. Unfortunately all those workers at the lower end of the productivity scale are not sufficiently educable. To keep blood out of the gutters, it is these people who must receive a GNI. (Long time RR readers may recall that I have recommended that a half-way route to GNI could be had through the Non-profit Service Corporations established under a dramatically reformed tax code.)
Before finishing, I want to remind readers the difference between welfare, as we know it today, and GNI. To receive some form of welfare you have to qualify under divers regulations, codes, and laws. And you will be vetted by endless bureaucrats to see for how much of this or that program you qualify. GNI, especially the outright grant type, requires very few people to administer, simply because it just pays you the difference between what you are able to earn yourself (maybe zilch) and what the law says you should as a minimum be able to spend every year.
And this brings us to a question asked by a liberal commenter under the previous GNI post – how would you decide which government workers are superfluous or not? From the commenter this came across as a gotcha question to rebut a proposal to save gazillions (for GNI) by reducing government workers. Well, to answer that requires no learning in rocket science or neuro surgery – just start by eliminating the non-performing bureaucracies that serve to dispense corporate and union welfare programs. Examples of these are Departments of Education, Commerce, Energy, and ‘administrations’ too numerous to list (others to follow after some consolidation of the few necessary functions they do perform). However, as more people like Buffett are now beginning to realize, we will need to establish something like the FTA, a somewhat lean, mean, and very focused bureaucracy to administer any future version of the GNI (FTA?, that would be the Federal Tit Administration).
[There was a request in the rapidly filling old sandbox for a new one that could launch a discussion on 'what does it take to be an American' and 'who are our warriors', and, of course, divers other topics of interest. gjr]
[23may15]Download NevCityPlan_150527 Here are some ideas (starts on page 31) that Nevada City has for using the $500K grant to our ERC for economic development planning.
[This is the addended transcript of my regular KVMR commentary broadcast on 20 May 2015.]
Listeners of these commentaries may recall that I support redistribution of wealth. This line drew gasps from the Nevada County Republican Central Committee when several years ago I dropped it into one of the talks I was invited to give. But after explaining why such a program was necessary, most begrudgingly agreed that there was really no practical alternative given the rapidly growing need over the next 15-20 years. The problem with such a proposal is that we have redistributed wealth for over forty years, and it is clear that the way we have been doing it hasn’t worked.
Today we are spending about $1T of federal and state revenues annually on 126 separate federal anti-poverty programs in addition to myriads of similar state programs, many of them overlapping and all having little effect on reducing poverty or helping people out of poverty. More than one out of three, or over 126 million, Americans receive benefits from such programs. And of these we have 46M people, the highest number ever, receiving food stamps. Over the last decades more than $20T has been spent to fight poverty, all with dismal results.
The money for this has come from working taxpayers and massive borrowing. But therein lies the problem – of working age Americans, today fewer than two out of three people work or are looking for work. And of those who found jobs during this anemic economic recovery, many are part time workers, and many more work in low paying service jobs and still need assistance. Today’s government quoted 5.5% unemployment rate sends a fraudulent feel-good message. The real jobless rate is still north of 10%, and unfortunately it will be rising in the coming years because of something we have discussed before called systemic unemployment (more here).
Accelerating automation and off-shoring continue to reduce America’s jobs. Ever smarter robots and computers are doing more human work at an alarming rate. The result is that no matter how much we may plan to spend on education, for most unemployed Americans education will not help. So what is the solution for people who simply have no ability to earn enough to support themselves? Today the most often cited answer is a Guaranteed National Income or GNI.
Economists of all stripes have anticipated and recommended a GNI as the final solution to systemic unemployment. From the Right we have agreement from greats like nobelists F.A. Hayek and Milton Freedman; from the Left economists Paul Samuelson and Kenneth Galbraith have weighed in on the need for some form of GNI. Even prominent sociologists and political scientists like the conservative Charles Murray have stated the need for funding Americans who cannot work.
There have been many studies about implementing GNI that include universal grants, negative income tax, and direct wage supplements for those able to earn a part of their income. But all these studies have raised more disturbing questions about the feasibility of any of these plans. All detailed looks at putting in place an adequate GNI conclude that it will be very expensive, costing even more than the current dysfunctional welfare programs.
Responding to these findings, liberal promoters say that, all the unanswered questions about cost and work incentives aside, we should go ahead and try a new federal GNI just based on good intentions. Conservatives counsel caution, and say that we should “pursue incremental steps: consoli¬date existing welfare programs, move from in-kind to cash benefits, increase transparency, and gather addi¬tional data.” They also recommend that the states should fashion and manage their own GNI programs to serve as 'laboratories' trying different alternatives from which the best could be copied by others. (more here)
How will it shake out? - no one yet knows. But it’s safe to say that sooner or later we will wind up with a guaranteed national income that will either fiscally sink us, or give us time to figure out how humans will survive with super-intelligent machines that are smarter than we.
My name is Rebane, and I also expand on this and related themes on georgerebane.com where the transcript of this commentary is posted with relevant links, and where such issues are debated extensively. However my views are not necessarily shared by KVMR. Thank you for listening.
[Addendum] Mercatus Center general director and economist Tyler Cowen (Average is Over, 2013) writes in the NYT (‘Don’t be so Sure the Economy Will Return to Normal’) about his trepidations over the state of the nation, systemic unemployment, and fiscal recovery. I have the privilege of knowing Dr Cowen for the last several years, and have had several private conversations with him about these items of great mutual interest. He is one of the most knowledgeable and reasonable people I have met. Please consider the need for and advent of the GNI in light of his thoughts about our future.
“Islam was never the religion of peace. Islam is the religion of fighting.” Abu Bahr Al-Baghdadi, ISIS Leader
Indeed Islam has never been the religion of peace. History and ongoing worldwide Islamist terror attest to that. The above quote from a recent ISIS online video is just the latest testimony to a truth understood by all but the most deluded of western progressives. We recall that for war it only takes one to tango, peace requires at least two. Today Islam survives as the only religion whose adherents regularly commit mass murders of people embracing other faiths, and even versions of Islam that are not acceptable to their various sects.
That we in the west still deny the demonstrably bloody nature of a self-declared bloody religion is testimony that ours may no longer be a strong and vibrant culture ready to defend itself against a faith that numbers some of the most sincere, devout, and self-sacrificing followers on earth today. Nowhere is ignorance of this existential threat to civilization displayed more than at 1600 Pennsylvania Avenue.
The Silencing: How the Left is Killing Free Speech by liberal Democrat, media pundit, and national correspondent Kirsten Powers represents a long overdue watershed. For years RR has cited the total asymmetry of how those of the Left and Right interpret the First Amendment. The Left continues to prosecute and expand its attacks on Americans who seek to freely voice their beliefs and strongly held convictions. A flood of examples are available at every level of public discourse from Krugman’s recent attack on Alan Greenspan (‘A Liberal Speech Cop Targets Alan Greenspan’) to the chorus of our local leftists (see 'TechTest2015 Survivors' Breakfast' comment stream) ever seeking to silence voices they consider disagreeable or expository.
The collectivists’ cacophony on silencing free speech has become so loud that some prominent liberals are getting worried. Democratic strategist Donna Brazile stated on national TV, “We have to be very careful that we are not practicing a new McCarthyism.” But McCarthy never dreamt of having the levels of speech control that are now routinely practiced by the Left; controls that range from our schools and colleges, through government bureaucracies, to our mass media outlets.
[update] On the matter of equivalence in the proscription of free speech. The awaited comment below came from a sincere mid-roader who took up the gauntlet for the Left which has always maintained that its efforts to roll back the First Amendment are no different from and matched by those of the Right. I suppose that it is an indelible part of the mid-roaders' litmus test to always seek balance in their ascribed sins of the Left and Right.
However, there is not a shred of evidence for maintaining the argument for such equivalency. Anyone from the Right who stands to limit the Left's speech is immediately dunned by his colleagues, and, if unrepentant, is publicly drummed out of the conservative corps. The facts of the matter are that more sensible Democrats (leftists) see the asymmetry to be so blatant today that they are beginning admonish the more rabid colleagues to back off from their Orwellian quest.
[20may15 update] Demilitarization of nation’s police - don’t believe it. Obama's recent order to not sell tracked vehicles, grenade launchers, and 50 cal BMG rifles to local constabularies makes no never mind to the military gear that they already have and can still obtain. As long covered in these pages, military equipments that will remain in local police inventories include armored combat vehicles (e.g. MRAPs), automatic weapons, night vision gear, ... . The main point here is that the feds still want the police to have overwhelming tactical capability to quickly quash any uppity uprising by a more lightly armed public. In the interval full military style SWAT assaults (many erroneous) on private residences continue to increase unabated. A careful look will reveal that Leviathan has shed neither a tooth or claw. (more here and here)
[A fresh sandbox was overdue. Among the topics spawned hereunder, Watashi-wa would like to see a discussion of the current news that Russ Steele introduced as 'boots on the ground' in the 3may15 sandbox, and repeated below -
BEIRUT (AP) -- U.S. commandos mounted a rare raid into eastern Syria overnight, killing a senior Islamic State commander in a firefight, capturing his wife and rescuing a Yazidi woman held as a slave, the Pentagon said Saturday.]
Thought I’d inject a little braggadocio for some of our county’s STEM elite young people. This morning we celebrated the winners of the TechTest2015 at the annual TechTest Survivors’ Breakfast held at Tofanelli’s in Grass Valley. TT2015 was the ninth presentation of this grueling four-hour merit scholarship exam (which you can inspect or try your hand at here) given on 11 April 2015. The test sponsored by the Sierra Economics and Science Foundation with its scholarship fund counting among its contributors Nevada City Rotary Club, Telestream, Riskalyze, Nevada County Republican Women Federated, and various private individuals.
SESF ED Russ Steele opened our little feast attended by test takers and their parents. Director Mike McDaniel was the master of ceremonies, and NUHS physics teacher John McDaniel, who heads the TechTest Academic Committee that administers and grades the test, gave some pithy insights as to how this year's test takers attacked various problems. As SESF Director of Research, it is my privilege to write the test and conduct the winter preparatory seminars for test takers. The top three scores were earned by Casper Hendrickson, Aaron Van Doren, and Ryan Crenshaw pictured on the right. On the left wearing their Survivors’ t-shirts are the other scholarship winners attending the breakfast (save the chubby old guy on the end). Again it was a lively and festive affair with everyone sharing their plans for further study and careers. Hats go off to the parents for raising this outstanding crop of arrows that we now launch into our country’s future.
And for completeness, TechTestJr2015 will be given tomorrow at NUHS to eighth graders from various county middle schools. This exam intends to motivate the younger students to take STEM subjects in high school. Also sponsored by SESF, it is now in its fourth year. It awards prizes for high scorers consisting of electronics and other technology related kits for assembly and study.
This afternoon the Nevada County Supervisors heard a presentation on the State of Jefferson by the movement's local steering committee. It was followed by public comment from both pro and con residents of our county. I made the following statement during the public comment segment.
I too want to thank you for hearing from the State of Jefferson steering committee. I am a proponent of advancing this historical experiment in constitutional self-government. It is indisputable that the voices and values of rural counties have been largely ignored in many state houses. Until recently these counties have been resigned to their second class status by staying the same ol’ same ol’ course. But to more of us, continuing to follow Rodney King’s appeal to ‘just get along’ brings to mind a famous man’s definition of insanity.
We realize that today the SoJ movement is still new, not well understood, and therefore opposed by more than the usual collectivists whose historical aim has always been to increase the size of Leviathan under which we labor today. For them the creation of smaller and more like-minded jurisdictions such as SoJ is counter to the global unification goal they hold dear.
It also appears that our Nevada County government staff has taken a strong stand against SoJ by suggesting that when compared to other so-called SoJ counties in northern California, our county stands out as the best while still ‘working together with’ Sacramento. However, to me the staff’s data tables tell a different and more illuminating tale. Historically these rural counties have enjoyed productive economies based on agriculture, timber, mining, and recreation. But that was before Washington and Sacramento unleashed their massive bureaucratic assault, enforcing on them versions of dubious and scientifically unsupported bromides that promise to save the environment and stop manmade global warming.
Today the years of buckling under diktats from the likes of the EPA, CARB, Water Resources Board, and other government agencies have devastated the region’s economies and resulted in the dire statistics that our county staff has assembled. Nevada County’s placement at the top of that sorry heap has less to do with any bounty from Sacramento, than with our fortunate proximity to a large urban corridor, and our historical but now diminishing industrial base. In short, the data you have been presented is simply a detailed epitaph in the making for rural counties that have gone along to get along with Leviathan, only to reap a dismal reward for their cooperation.
To my mind the only remaining viable alternative to SoJ is our joining or even leading the growing national movement to restore ‘permissionless innovation’ by simply adopting ‘Just Say NO!’ as a response to insane and inane regulations. As a fortuitous coincidence, today is the release date of By the People: Rebuilding Liberty Without Permission from the celebrated political scientist and sociologist Charles Murray. This book is a ‘how to’ manual for America’s small businesses and political jurisdictions going viral to effectively resist and turn back regulations which are “pointless, stupid, and tyrannical”. It contains a detailed plan of how Americans can start saying NO!, one regulation at a time. And in the event you missed Murray’s nationally published essay on the subject this weekend, I will gladly email you the link. Gentlemen, I suggest that change for the better is afoot across this land.
Finally, all the arguments against SoJ rest on stasist projections. Stasism is the belief that we can see tomorrow only through the lens of current practices kept rigidly unchanged. Its corollary is ‘if it hasn't been done, it can't be done’. But proponents of the State of Jefferson believe that in this most exceptional country the world has ever seen, the new and the never-been-tried has always served as a beacon to innovation, enterprise, and in the end, a better life. Thank you.