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As Robots Eat Our Jobs, Fed Should 'Drop the Money From Helicopters,' Says Bill Gross (janus.com)
As technology continues to change the world -- and kill many jobs -- it may soon change the very nature of what is considered work, said Bill Gross, a renowned American financial manager in his recently released investment outlook. Gross says that in a year or so we will need to start guaranteeing income for everyone. Gross, added that the current crop of national leaders is hopelessly behind the curve, leaving it to central bankers to fix the mess. "Our economy has changed, but voters and their elected representatives don't seem to know what's really wrong," he writes. "They shout: (1) build a wall, (2) balance the budget, (3) foot the bill for college, or (4) make free trade less free. "That will fix it" they discordantly proclaim, and after November's election some unlucky soul may do one or more of the above in an effort to make things better. Similar battles are being fought everywhere." The Sydney Morning Herald reports: Central bank "helicopter money" will avoid a long recession that looms as millions of millennials face losing their jobs to robot technology, Gross says. In news that is sure to depress anyone under the age of 30, Gross says that while presidential hopefuls in the US spout mantras about how they are going to spur growth, none are addressing the reality of the future: that robots and technology are going to render "millions" of jobs redundant. "Virtually every industry in existence is likely to become less labour-intensive in future years as new technology is assimilated into existing business models," Gross writes. Transport is a visible example of this transition and millions of truck and taxi drivers will be out of a job in the next 10 to 15 years due to driverless vehicles, he says. "We should spend money where it's needed most -- our collapsing infrastructure for instance, health care for an aging generation and perhaps on a revolutionary new idea called UBI -- Universal Basic Income."
You must understand that Bill Gross was speaking in jest. He's a lifelong bond investor and the inflation he predicts from this strategy is anathema to bonds. Now he wouldn't mind some inflation if it meant the net interest rates would rise as a result (ie, interest on bonds minus inflation) but he doesn't expect that from the strategy he proposes in the article. Again, it was written in jest.
You have BIll Gross confused with someone else, perhaps Michael Milken. Gross doesn't issue junk bonds like many of con artists of the past - he invests in them, along with lots of investment grade and government bonds as well. He became wealthy by having an uncanny ability to predict where the economy (and in turn the bond market) will go during his 30+ year career.
The article is only suggesting $10,000 as a basic yearly income, so it's not like the living will be large without some income augmentation.
It will, as a plus, create a bit of inflation that would actually reward folks who save money.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Why would the US do better with socialism than say Venezuela, Cuba or North Korea? And before you say Nordic States, remember those are all capitalistic market economies.
But everytime somebody proposes a minimum wage that people can live on to correct the "jobs being offered are not very good, and wages are stagnant" problem we're told that this would instantly trigger the automation of all those jobs as well.
The problem is real - and it's only being held at bay by keeping wages so depressed that people *with* jobs are still needing welfare - basically by having taxpayers supplement each other's incomes !
That's silly by every measurement - so bugger raising the minimum wage, scrap it entirely and institute a wage-floor with UBI instead. You get a much more comprehensive way to solve the same problem than the half-arsed hackjob being used right now, with none of the massive downsides, none of the protests and unrest it causes and it costs a LOT less.
We're headed to a world where the only marketable skills will be business-owner, robot-programmer or robotics engineer. So be it, but if the business owners want anybody to be able to buy the things their fully automated businesses produce, we will need some other way for the rest of the population to earn a living.
Unicode killed the ASCII-art *
There is a very obvious problem of mass unemployment and automation
No there isn't. Unemployment is at 5%, with is basically full employment. Workforce participation isn't back to where it was in 2007, but basically nearly everyone that wants a job can find one. The problem is that the jobs being offered are not very good, and wages are stagnant.
If automation was happening on a massive scale, productivity would be soaring. But productivity is stagnant and barely rising at all. Many manufacturing jobs were lost to automation in the 1970s and 1980s, but that process has mostly run its course, and service jobs, which dominate today's economy, are proving much harder to automate.
Someday, robots may steal all our jobs, but there is very little evidence of that happening today.
You're arguing a technicality. Yes, there are jobs still available, but as you admit, they are low paying crap jobs. There are whole industries that revolve around taking advantage of cheap human labor and even those are starting to be automated. Just because we can give everyone a job doesn't mean the original good jobs didn't disappear. It's like a nursing home that replaced all it's doctors and nurses with robots and then hired minimum wage "companions" to sit and talk to the elderly. Yes, technically they still employ the same amount of people but the real jobs are gone. That's what a lot of these service jobs are. It's actually worse than that. Many of the service jobs *could* be automated, these people are just cogs in a machine but it's cheaper to pay someone minimum wage than it is to buy and maintain an expensive robot.
Of the three Nordic countries only Norway has lots of oil and gas.
Denmark still has some (AFAIK we're a net oil exporter), but we sold most of it to Norway. Yeah, not the best decision ever.
Eat the rich.
Money velocity = "the number of times one unit of money is spent to buy goods and services per unit of time." If you increase the amount of units of money in existence, but the amount that gets spent to buy goods and services stays the same, then average money velocity falls.
In other words, trickle down is bullshit and thus any economic stimulus based on it can only succeed through accident. You need to get the money in the hands of your local hobo, because he'll carry it straight to the local liqueur store which can thus pay its employees and suppliers, not hoard it in offshore tax havens.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Except that an independently run price index agrees with the government figures. See the Billion Prices Project, run from MIT.