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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."
Bill Gross is a con artist and part of the 0.000001% and made billions through junk bonds. Don't trust anything he says.
Dropping condoms from helicopters would seem to be more effective.
Analysts have been puzzled why inflation has been so low, compared to a typical recovery. Economies typically do best at roughly around 2.2 to 2.5 percent inflation per year. But we've been hovering around 1.7%.
It appears our GDP capability is expending due to automation and outsourcing, yet our money supply is not expending to match. Thus, we have too many idle people and factories.
"Printing money" is one way to make them match. You don't risk runaway inflation if the capacity to produce is expending.
Many dictatorships and non-democracies willingly subsidize the cost of their nation's labor because unemployed people riot and overthrow dictatorships. Thus, they keep their population busy and fed using various gimmicks to under-price their nation's labor (relative to consumption). Therefore, they are practically giving away free labor to protect their position of power.
Robots and de-facto slaves are available to make more stuff, if only the money supply is freed up to allow them.
(The morality of such de-facto slavery is perhaps an issue to be dealt with, but for here I'm focusing on just the economy and money supply.)
Table-ized A.I.
Someone or something has to manage the supply of money. It doesn't manage itself. And always keeping it the same can create problems. Capacity and population typically expand over time, not always at the same rate. Keeping the money supply the same doesn't make sense under such changes.
The gold standard has been suggested to force a consistent standard, but there are a boatload of potential problems with it. Experiment on a smaller country first.
And why not try to patch the holes in the business cycle (boom/bust cylces)? The business cycle has been happening for 400 odd years, and so is not caused by Keynesian economics.
Keynesian economics done right is a form of common sense: save up during the good times so you have spending money for the bad times. I see nothing really wrong that.
Politicians often spend during the good times instead of save up, but they'd do it also without Keynes. You can't blame Keynes for stupid politicians (and stupid voters). If humans don't plan, don't blame the few who attempt to plan.
Table-ized A.I.
There is an alternative to GBI, and that's public works - the government makes sure that if there are 200 million people that there are 200 million public works jobs available. They could range from childcare to visual arts and engineering. Anything at all that requires a person rather than a machine. Then people have to apply for the positions. This would inspire a little bit of competition and could help satisfy the notion of 'work ethic' that some people have (and seem to want to enforce on other people). The obvious drawback is that it would mean a massivly centralised and centrally controlled government, but hey if a superior AI is contoling everything that might be a good thing.
I agree that public works is a good alternative to GBI. It also help people feel like they are contributing. There are plenty of jobs that could be invented from making trails, to picking up trash, to tutoring. Even something as simple as paying people to volunteer at the 501c3 of their choice. Another option though (or maybe in combination) would be to start reducing the work week in sync with the job loss. If the maximum work week was 40 hours and the government mandated 39 this should in theory lower unemployment by approximately 2.5% when companies hire to replace all that lost work. Many people currently work more that 40 so just setting it at 40 should help the unemployment number. Another less drastic option would be to increase overtime pay to 2 times instead of 1.5 times. 1.5 times is probably about break even for a company compared to hiring a new employee. Moving it to 2 times and it would be cheaper for a company to hire extra employees at 30 hours per week so that during crunch time they can go up to 40. Basically, our automation and efficiency has been going up for years but the hours worked per person has either stayed the same or even gone up. It's a wonder our unemployment is as low as it is. It's probably time to start redistributing that efficiency across the board by increasing people's leisure time.
Many times we've had automation kill off labour jobs. Our economies used to be virtually all primary production. Now they're 70%+ service. Whenever technology obsoleted labour jobs, people switched into white collar work. Now technology is coming for the white collar jobs. We can continue to play the "must have work" game as we've done in the past by doubling down on paying people to do useless things, or we can actually embrace the freedom that having machines do our work gives us.
Pick up "Only Yesterday: An Informal History of the 1920s", by Frederick Lewis Allen. The ebook is on Gutenburg Australia. It's an eye opening read, amazing to see how much history just gets repeated.
All his books are good, I can't recommend them enough. My entire working life, started in 2001 has seemed like a slow motion replay of the 1920's.
Cheap storage VM.