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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."
Hooray! I'm in my mid 40's and if I'm lucky I'll die of ass cancer in the next 5-10 years! Sucks to be the millenials, their future is much less bright!
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Bill Gross is a con artist and part of the 0.000001% and made billions through junk bonds. Don't trust anything he says.
True enough -- if you think of it as welfare. But if you think of it as a transition to an economy of plenty, then it makes sense. But who wants to think, anyway? Fear is easier.
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.
I'm constantly amazed by the fact that americans are all pretty happy to acknowledge that their status quo rather bad, yet they are not willing to look for the reasons nor even talk about changing any aspect of the system.
It must be quite a feat of mental gymnastics to demand that everything somehow change for the better while everything remains the same. A three year old might find this idea reasonable, but grown men and women? Come on, this is a textbook definition of an idiot - someone who does the same thing over and over again expecting the results to differ.
As an outsider, it seems to me that most of what americans believe about politics, society and the human nature is rather a twisted picture indeed. Accepting the problem is the first step towards a solution, and luckily, usually the hardest. Yet the steps must be taken, otherwise things will only get worse.
FCKGW 09F9 42
The Fed helicopters don't fly over normal people. They only have the ability to dump money on banks via mechanisms such as rates so low that the banks can arbitrage. None of that money goes where it's needed to stimulate the economy.
AFAIK, only Congressional helicopters could deliver money to you and I, like they did with the stimulus checks a few years ago. It's almost certainly a fool's errand anyway, since it would screw up the dollar economy via runaway inflation if you did it too much.
IMHO, it would be better to simply extend services like food stamps and housing subsidies to people who would usually be in higher income brackets. Particular sectors of the economy might be weakened, but you wouldn't destroy the monetary system wholesale. People who wanted something better than government cheese would still be encouraged to innovate, strive, and keep progress and productivity humming.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
To give a dollar for a homeless guy? Preposterous. If America ever taught me anything, it's that helping thy neighbor is socialism and God hates you for that.
FCKGW 09F9 42
You point to regressive taxes as the reason for Globalization being "abused" but you are overlooking the much larger problem of wage shopping. If you can have a product made for 1/10th the wages and shipped to your country through a plethora of trade agreements that make the shipping as fast and cheap as possible then that's what is going to happen. There is also the differences in labor laws. Steve Jobs once said one of the reasons Apple manufactures in China is they can make a change in their product lines and overnight Foxconn will have every one of their million or so employees working 12 hour shifts servicing that change.
Foxconn's employees live in barracks and they can pull in prisoners and students if they need to and work them as many hours as they want. There's no way that would ever happen in a modern Western nation unless our economy went seriously downhill.
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.
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.