Saturday, November 8, 2003
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Must be a full moon, because I agree with Robert Reich
Alas, I could not find a copy of the report on Alliance Capital Management's web site (UPDATE: Ha! Found a cached version), but I did find a much longer Wall Street Journal story on it. Here's a bit more, with special reference to China:
Here's a bit more from the actual report:
Fascinating.posted by Dan on 11.08.03 at 12:40 AM
Missing the forest for the trees. Yes, China is losing factory jobs and increasing its productivity. Of course it is. Huge outmoded state enterprises floated by subsidies are being shut down. This throws lots of people out of work. Which is why they're starving and desperate for the new manufacturing jobs that are being produced by the new industries there.
You want a look at the real picture? Look at the growth of *new* jobs as a function of nation. What you'll see is that the growth is centered almost exclusively in developing countries. They lose old style manufacturing jobs. They get a smaller amount of new ones. We lose a smaller amount, but we get no new ones.
Then look at the losses and growth in engineering jobs, IT, software, technical call centers, scientists getting PHD's, and mangers and suddenly you get a really ugly picture. Not only are corporations exporting factory jobs overseas, but they're exporting everybody they can lower than upper executive management.
Dan, Dan, Dan ... when will you learn? Is it hope that blinds you? That it must make sense? That there must be reason? That mere short-sighted human greed and the common denominator of the tragedy of the commons isn't the whole and only story? Keep on looking, I'd like to find it too.posted by: Oldman on 11.08.03 at 12:40 AM [permalink]
The gods of creative destruction must have their victims. Every single economic advancement endangers someone’s job. Have we already forgotten that roughly half of America’s labor force earned its living in the farm sector at the beginning of the twentieth century? Today, less than 3% do so! Why should it be any different with manufacturing? What is the answer to the inevitable unemployment? These people must simply be trained to do other work. In the meantime, their own standard of living has most assuredly improved dramatically. The men, for instance will not normally die at 45, but live to be well over 70.
David Gelernter wrote “1939--The Lost World of the Fair.” He points out that even in 1939 many semiskilled Americans often went hungry. Who in hell goes hungry in 2004? On the contrary, we have a widespread obesity problem. A decent microwave cost nearly $400 in 1985. I can presently buy a far better one for $50 at my corner Wal-Mart store. Remember when a VCR also cost about $400 minimum? Do I really need to offer more examples? Are you getting the picture?posted by: David Thomson on 11.08.03 at 12:40 AM [permalink]
"Look at the growth of *new* jobs as a function of nation. What you'll see is that the growth is centered almost exclusively in developing countries. They lose old style manufacturing jobs. They get a smaller amount of new ones. We lose a smaller amount, but we get no new ones."
Nope. Just plain wrong, Oldman. I have looked at the data. I suppose you've seen the latest unemployment data, which showed more jobs being created? In any case, the current economic shift is a continuation of trends that have started long ago-- and unemployment is lower in this country right now than it's averaged over most decades. That's with women participating in the workforce at much higher rates, too.
Also, I trust the Law of Comparative Advantage as well.posted by: John Thacker on 11.08.03 at 12:40 AM [permalink]
You want more jobs?
Go through every industry and regulate it to the same degree as IT.
Customers have enough of current production. They want things that no one's ever had before. They want all the wonders that we've been promised by all the teachers, scientists, and writers going on about "The World of Tomorrow".
And vendors should be able to sell it to them without playing Mother May I. That includes tickets to orbital joyrides, personal aircraft, new medicines, and so on.posted by: Ken on 11.08.03 at 12:40 AM [permalink]
Well this sure doesn't help resolve my confusion over why Robert Reich ever chose to switch from being a respected economist to being a lousy politician.posted by: Zathras on 11.08.03 at 12:40 AM [permalink]
I'm afraid Oldman might be right in this case.
The people making the argument for a rosier picture regarding manufacturing job losses almost always trot out the "makes room for the creation of jobs in other sectors" argument, and in general, this is true. It played out this way somewhat with the emergence of the Service and IT sectors in the 80s and 90s.
HOWEVER, what appears to be occurring now is that a good portion of those new jobs in the Service and IT sectors are already being shipped off. In other words the industries that were supposed to serve as a replacement for the manufacturing sector are already leaving. Sure, the cycle of job creation has sped up, but so has the cycle of movement of new industry elsewhere. So the question that has to be asked is what happens when all of the new jobs and industries that are "new" simply skip the part of the process where they employ people here and immediately outsource for cheap offshore?
Granted this is an exaggeration for the sake of argument, but the trend appears to be there. Actually it seems strange to me that folks still focus on manufacturing jobs as a form of measuremnent. Again, I think the skeptics like myself are simply trying to point out that the "new job in new industry" part of the equation is now also being shipped, so it kind of puts a pinch on the whole equation.posted by: Waffle on 11.08.03 at 12:40 AM [permalink]
So Waffle, you think the jobs lost in the IT industry will result in permanent employment?
It just happens this time that communication costs with the 3rd world dropped at same time the IT shift occured. People will get other jobs.posted by: Jason McCullough on 11.08.03 at 12:40 AM [permalink]
Quick. Has the moon turned blue? Has hell frozen over? Has a Democrat told the truth?posted by: erp on 11.08.03 at 12:40 AM [permalink]
I am going to walk some of the trends that we are seeing (or are being seeing by some) out to an extreme and think about what the implications are for government policy.
In agriculture we have seen employment decline dramatically while production has risen. This was made possible through the use of chemicals, tractors, and automation of many processes. Some are saying that we are seeing the same thing in manufacturing. Processes that were done by people are being automated to a greater degree. We are heading towards a world where we will see more manufacturing production employing less people.
Eventually we will see the same thing in the service sector. Jobs that are done by people today from flipping burgers to keeping track of accounts are going to be increasingly automated in the future. The reason for this is that it is just cheaper to do it that way.
So where will the jobs be left? Well one direction we are seeing many local economic planners look is towards the cultural industries. As production gets higher there are greater resources freed up for things that might have been considered "extra" in earlier days.
Previous economic transitions have been able to produce jobs to replace the lost jobs. The character of the jobs changed, but it kept money flowing through the economy and allowed consumption to increase (thus the drive for increasing production).
Anyway, I am wondering where the jobs are going to come from in the future. The so-called Cultural industries might be a start, and not all service and management related jobs will go away. We might even see personal service jobs increase as more labor is freed up from other activities. But I wonder if we are moving towards some version of the Science fiction future where people are freed from work.
But what does that economy look like. How are we going to distribute wealth across the economy to make sure that the engine of consumption keeps running. The control of capital will still be a huge advantage for some, but I doubt that control will get distributed any more widely than it is today. What economic policies would make sense for this future. Will jobs continue to be produced, or will there need to be some kind of control exerted over the economy to make sure that jobs are available?
I don't have the answers to these questions, and I don't even know if answers are needed, I don't know if this is where we are headed, but I do think that data like that presented by studies like this does lead to one asking such questions.posted by: Rich on 11.08.03 at 12:40 AM [permalink]
I got to say that it brings a warm feeling to my heart to get such thoughtful responses as Waffle and Rich posted. The key to the economic transition is moving America toward conceptual, artistic, design, and high-value added service jobs (think a good consultant, doctor, lawyer, accountant, etc.).
As for Thomson, he serves false gods and idolatrous ones. Men project onto idols the responsibility they ought to take on themselves. The very prosperity he cited was created by many factors - including government regulation, active social intervention, popular movements such as labor rights, collective investment in infrastructure, and increased investment in critical new fields.
There *may* always be a relative low cost producer (has anyone ever heard of commoditization?), but absolute costs will eventually rise when neo-industrialism runs out of undeveloped populations to exploit for cheap labor - because all populations exposed thus far have in fact had costs and standards of living rise.
However we won't even get to that point without the social reconstruction and "redistributive" that changes the economic infrastructure so that new high-value jobs are added. Exchanging IT, professional, and manufacturing jobs for Walmart stockers isn't a politically or economically sustainable domestic policy even in the short-run. Protectionism will win out first.
posted by: Randy Tunac on 11.08.03 at 12:40 AM [permalink]
Hey guys! I'm sure you were wondering when I'd pop into the convo.
I like the philosophical/policy gropings on display here. Here are my own, intended to keep the ball rolling.
#1. Every time I hear about how we all need to keep retooling and reeducating ourselves I think to myself--what "re"? People got jobs in factories because they weren't that keen on formal education in the first place. Now you tell them, in middle age, with kids in school, for uncertain rewards--get thee back to school! We're living in a fantasy world if we think someday soon there will be no more dummies (that whole publishing empire would perish!), that we'll all be drinking microbrews and listening to NPR. Decent jobs for people who can't or won't perpetually "improve themselves" are imperative. I'm with Oldman on this one. We can see to it that the bottom third of society does not get squeezed into poverty (ok, the top two-thirds of the segment that isn't there already) or we can wait for Marx's predictions to come true.
#2 On the other hand, having long studied India and even having lived there for a time, I am not especially worried about losing the bulk of our white collar jobs to South Asia (still less to China, because their English skills will never catch up to India's). Quality control is, and will remain, a massive problem there. Indian emigres are not only the cream of the crop, but enjoy the benefits of American management, which is a form of benevolent (or notso) taskmastery. In India, even the most resolute (and Americanized) managers cannot make much headway against the mainstream, which is akin to Latin America's "manana, manana" problem.
This leaves me somewhere between the pessimists and the optimists on future trends. Schizophrenic as ever.posted by: Kelli on 11.08.03 at 12:40 AM [permalink]
Your post almost sounded sane and lucid until you slipped in the part about new medicines not needing approval or review. While the FDA needs revision and restructuring, doing away with Federal government supervision of medical products and practices is not even remotely a mainstream idea.
If some guy in Intel screws up a chip design, then they have a product recall. As they have done. If there are problems in Windows, MS sends out a patch.
If a pharmaceutical or medical research org screws up a medicine or covers something up then either someone dies or you get horrible stuff like birth defects. Both of which have historically happened. The former recently.
At that point, your ideas revealed themselves to be on the level of a kook. It is also in contradiction with conservative interests. Afterall, you can't ban human cloning or stem cell experimentation without such regulation. Of course, many Johnny-come lately conservatives seem to have this idea that they dislike regulation except when it comes to banning stuff they don't like.posted by: Oldman on 11.08.03 at 12:40 AM [permalink]
Your post was a hoot and a delight. Not b/c you agreed with me, but on pointing out a key point that I had neglected with your second point. Yes, I do believe that the superior cultural and infrastructure domain of developed countries can put out better services, management, creative, professional, and intellectual capital than the obviously benighted undeveloped countries. We have to play to our strengths. However I would join the two points and further emphasize Rich's post about cultural jobs is that we cannot leave it up to the "market" which is notoriously short-sighted in order to make this happen.
We have to create jobs where that bottom third of society, the people who are content not to go to school endlessly can get reasonable living for doing jobs that contribute to society. There is plenty of room for improvement. Take Hollywood for instance. Our entertainment industry has lots of changes that could be made that would vastly improve product quality and pricing. The other examples go on.
The US Ag. Dept. recently released a report claiming about 12million families worried about lacking money for food, with 32% of them experiencing "someone's going hungry at one time or another" . . .3.8 million families where someone skipped meals from lack of money. They estimated that there were 567,000 children going hungry. The AP article quotes a associate prof. of nutrition pointing out that obesity can be a result of poor people stuffing themselves full of high-calorie, low-nutrition foods to stave off hunger. She also said that when people have to choose, they usually pay fixed expenses - rent, etc, before or instead of food.
The superproductive labor-less society - which the Times article touches on and Rich mentioned above - was a mainstay of postwar predictions about life in the future. Oh well.
The Cox op-ed, and Thomson and Rich here, all mention American agriculture as a textbook case of productivity gains and job 'redistribution.' (Indeed, Cox uses it as an example enough removed in time "that we see the benefits clearly and forget the costs," apparently unaware that this process continues.) In this case though, the technological and organizational advances, although amazing, may not be entirely desirable or even sustainable. Setting aside factory farms and suchlike, we also come across some examples of the laws of unintended consequences - ie, farmland converted into developments, and perhaps a better mind than mine can compare and contrast the costs of soil erosion with the costs of flood damage (or mitigation) from overdevelopment. Bring up agriculture, and other values also come into play, from the blatently political (with subsidies as high as an elephant's eye) to the cultural (Jeffersonian bulwarks of democracy, objects of sub/urban nostalgia, sources of fresh, local food and so on.
Interestingly, there is a very market-driven process going on in certain regions where remaining farms start leaning into the culture-industry sector, ie, elaborate corn mazes and much more. Hmm.posted by: Dan S. on 11.08.03 at 12:40 AM [permalink]
Mr. Dan S.
You are right on the money. Glad to see such a great post. And yes, a very very important factor left out of real wages, productivity, and inflation are what I call social costs. They include housing, education, retirement, healthcare, divorce, and insurance. Real wages have been falling and real inflation rising precipitiously because the metrics don't accurately take into account the rising share of income being devoted to these necessities.
Who cares if you can get a cheap pair of jeans sewn by some Haitian sweat-shop, if you can't afford a place to live? And yet increasingly it is people like paramedics, police, and nurses that are running into problems like that. The market won't fix it either - most housing that these people would be interested in is low ROI and high financial risk. As Snow recently noted "Capital is a coward."
Real wages are falling drastically - as anyone with two adults working in the family to make ends meet can testify when two generations ago one wage-earner sufficed. These productivity numbers are hollow men, filled with huge inconsistencies and so are the inflation numbers. This is why the cheap money provided by Greenspan is becoming debt - personal and national - as consumers are increasingly leveraged in order to simply maintain the same or a reasonably lower standard of living.
It's a crying shame that it's happening and its a Greek Tragedy that no one understands that it is. Even doctors, once considered prosperous upper middle-class, are being hit by this - this is what the whole insurance malpractice issue has its roots in. They can't make ends meet with the new social cost structure. Neither can many people afford in time or money the ever increasing amounts of re-education needed to keep switching in a "commoditized" value-stripped labor market where the ROI for skills is de-emphasized. Even many educated burgeious people can't afford this, much less the proletariat.
“Sure, the cycle of job creation has sped up, but so has the cycle of movement of new industry elsewhere. “
“It just happens this time that communication costs with the 3rd world dropped at same time the IT shift occured. People will get other jobs.”
“As for Thomson, he serves false gods and idolatrous ones. Men project onto idols the responsibility they ought to take on themselves. The very prosperity he cited was created by many factors - including government regulation, active social intervention, popular movements such as labor rights, collective investment in infrastructure, and increased investment in critical new fields.”
The cycle of job creation is never ending. No job is safe. A number of physicians are seeing their specialties become less relevant. Furthermore, even Dan Drezner shouldn’t be complacent. One should not bet too much on the Baumol effect completely protecting the positions of university professors. This is the price tag for all economic advancement. It must be willingly paid if you desire human progress. I am stunned to see myself in agreement with my old nemesis Jason McCullough, but he’s right to say that people will ultimately “get other jobs.”
Serving false and idolatrous gods? Nope, the gods of creative destruction are somewhat nasty and unforgiving---but their commands must be obeyed. These guys play for keeps. Also, I do believe in some sort of “active social intervention.” Laws protecting workers virtually unable to defend themselves are mandatory. Many of efforts of the Progressive Movement are to be applauded. The trick is knowing when to draw the line. There is a dramatic difference between guaranteeing a worker their safety on the job, and guaranteeing them the same job for life.posted by: David Thomson on 11.08.03 at 12:40 AM [permalink]
You say, "Anyway, I am wondering where the jobs are going to come from in the future."
If you had a thousand dollars more to spend, how would you spend it? Five thousand? The answers to those questions may be a good start to answering your initial question.posted by: Roger Sweeny on 11.08.03 at 12:40 AM [permalink]
You wrote," Well this sure doesn't help resolve my confusion over why Robert Reich ever chose to switch from being a respected economist to being a lousy politician."
Like most academics, Reich believes (to overgeneralize) that markets create problems and governments solve them. He wanted to be an active problem-solver.posted by: Roger Sweeny on 11.08.03 at 12:40 AM [permalink]
Most academics, maybe. Most academic economists? I doubt it.
The thing I wonder about is not so much the loss of old jobs and the creation of new ones, but the pace at which this happens. It's true that jobs in a field like agriculture have been declining for a long time -- but precisely because the decline has been spread out over a long time, adjustment on the part of those displaced has been a manageable task. Rapid changes in today's job market may have economic consequences, but they absolutely will have political consequences. Some measure of stability will be valued by many people, especially as the population ages.
I draw no conclusions from this. I simply point out that the political consequences of economic changes are things our system must account for, and that even when the economic changes are positive from the standpoint of productivity or wealth creation the political reaction to them may not be.posted by: Zathras on 11.08.03 at 12:40 AM [permalink]
A couple of things:
2) Where the new jobs are coming from is never obvious unless you look at new stuff. The first couple of computer games I played had maybe 3-4 four names as producers or whatever -- the guys who made them. Today, if you win the game, the scroll of names takes almost as long as winning the game. Where were those jobs 15 years ago? Also, next time you go to the movies, count the people scrolled at the end. Now go home and pop in a tape of a 1950's movie and check its credits. Notics anything different?
3) Many jobs still don't get taught in school. They are learned in other places. "Going back to school" is not the only answer to re-training or re-tooling. The more we can make a new job more like a new vocation, the better.
4) and final. The jobs we have today (whenever today is) get in the way of the jobs we would like people to be doing if we knew what it was and if they were available. One of my favorite blues musicians played on Saturday nights only until he lost his farm job driving a tractor and had to support himself with his music. He got paid more (not what he deserved, unfortunately, it's a crooked business) and made more of a contribution to society than if he hadn't lost his job. Over 10,000 years of agriculture and how many geniuses in other fields did we lose because they were too busy to do anything but farm? Same goes for manufacturing. It's only temporary, guys.posted by: JorgXMcKie on 11.08.03 at 12:40 AM [permalink]
Am I the only one that things the opening paragraph of Reich's piece is logically meaningless?
How does looking at '20 large economies' generalize to complete data about losing jobs to developing countries. How does a total global loss of manufacturing jobs preclude the US losing jobs overseas (meaning we lose x jobs to foreign nation, 2x jobs to productivity gains. Foreign nation gains x and loses its own 2x to productivity)?
I have no idea what the answer is, and I don't have a dog in the hunt either way. But whatever happened to science and logic and that sort of thing? Was that a fad?posted by: sidereal on 11.08.03 at 12:40 AM [permalink]
Roger asks if I had a few thousand more dollars to spend where would it go. I think this a great question to ask about where money might flow in the economy. And I don't think that it says good things about most of the economy.
First thing on my list is TiVo, just because it is really cool. Lets take this to be generically "cool high-tech device manufactured in China". This will provide some great jobs for a few Americans and a decreasing number of OK jobs in China.
Next thing is some nice furniture. Not Pottery Barn stuff, but stuff made by some local people that I know. Creative economy stuff, artisans, more people doing crafts. This is where I thought we might be heading.
And the rest goes to a nicer place to live. This is where I get a bit concerned. Extra money in this case is going to make those who own property already wealthier, and those without property poorer (apparently, not actually). Basically I think this is one part of a major trend that there are going to be greater and greater returns to capital.
For the US as a whole this is great. Americans own huge amounts of capital in the US and abroad. We have a great system for allocating capital efficiently. However, the distribution of capital is not even. As capital becomes more significant to our national economy we need to be finding ways to distribut the benefits from that capital more equitably. The trick here is that we need to acheive that without messing up the system that we have for efficient allocation of capital.
This is why some of the tax cuts have been passed bother me. I think that we are moving in the opposite direction. I think we are adopting policy that further favor those who own capital at a time when some of the fundamental changes in the economy are also favoring capital. This won't sink our economy today, or even in the future, but it might harm our society. And if society is harmed the economy will suffer as well.posted by: Rich on 11.08.03 at 12:40 AM [permalink]
Congrats to Mr. McKie and Mr. Sidereal- who, at threads end,raise the interesting conclusion here. Which, by the way, leads to a final paradox:
Apparently we are to conclude that the economy would be please the left if *most* of us were busy coopering tin cans and assembling Plymouths.
Then, as Mr. McKie reminds us, the general population would busy itself in labor, and leave the "thinkin'" to academia.
But why stop there, Mr. Reich? Let's move towards a competely coal-based economy - why just think of the jobs! We shoulfd move this way immediately(the success of Mr. Oldman's "conceptual-jobs"-based economic program notwithstanding, of course)
The paradox? Mr. Reich's supporters here are the very ones constantly demeaning the hard working men and women who fill the hated jobs at Wal-mart and McDonalds. How will they ever find it in their hearts to love the common man they claim to speak for?
But we already know the answer to that question, don't we?posted by: Art Wellesley on 11.08.03 at 12:40 AM [permalink]
“How are we going to distribute wealth across the economy to make sure that the engine of consumption keeps running. “
We should not even be attempting to redistribute wealth. A growing economic pie will take care of everybody. Employers forced to compete for workers, white and blue collar, will naturally increase the size of the paychecks. This is literally a non-issue. The well meaning Robert Reich is a member of the “we’ve got to do something” school of thought. I am not so egotistically inclined. Other people generally know how to arrange their own affairs.posted by: David Thomson on 11.08.03 at 12:40 AM [permalink]
You say, "And the rest goes to a nicer place to live. This is where I get a bit concerned. Extra money in this case is going to make those who own property already wealthier, and those without property poorer..."
I don't think that has to be true at all. Building a house involves a lot of labor, both at the job site, and to make and transport all the tools and materials.
If it were impossible to build new housing, and it was just a matter of outbidding people for what already exists, that would certainly be a great situation for those who already have. And in places like Boston or San Francisco, it can certainly feel like that. But I don't think it's true in general. And even there, new construction sets a limit on how high prices of existing housing will go.posted by: Roger Sweeny on 11.08.03 at 12:40 AM [permalink]
Mr. Reich is a good man, but he was never one of my favored economic interlocuters. Remember he comes from the Clinton centrist wing of the Democratic party, the centrist group that brought us Democratic free trade ideology and helped propel the misdeeds of the World Bank and IMF throughout the nineties. It was countries that bucked that trend that came out the best from that period, and not those that subscribed to it. There is such a thing as liberal free-trade ideology, you just don't see it much on display anymore openly.
And no, free-trade or free-market enthuisiasts rarely rely on strict standards for their proofs. They are reduced to vastly oversimplifying complex interactive systems to something like "gods" that if you "believe in enough" will "save you and society" even though in the short run they're kicking the living snot out of ya. In reality, it is societies that have tempered capital entrepeneurships with the human side of things that have prospered best and not laizze faire systems. A market needs to be restrained for its own good, and for the good of society. Otherwise you either lose political support, or market excesses strip mine the economy. Oh yes, people don't remember but strip mining - and it is still going on - is one of these brilliant inventions brought to us by the market. Now they cut off the top of whole mountains to do it, with catastrophic long term cleanup costs that far outweight their short term profit. But what do they care? They just move on. It was a Republican, Nixon, that created the EPA. At times, I'd rather have that old fox back than the current bunch. Better a liar than a fool.posted by: Oldman on 11.08.03 at 12:40 AM [permalink]
"At that point, your ideas revealed themselves to be on the level of a kook. It is also in contradiction with conservative interests. Afterall, you can't ban human cloning or stem cell experimentation without such regulation."
Good. Banning cloning and stem cell experimentation is a stupid idea.
We are all under sentence of death. Anything that interferes with or slows down the development of new medicines is a direct threat to the only thing that can deliver us a stay of execution. Our lives depend on thwarting those who would impose controls on those things.
"If a pharmaceutical or medical research org screws up a medicine or covers something up then either someone dies or you get horrible stuff like birth defects. Both of which have historically happened. The former recently."
Consumers are perfectly capable of taking this into account and weighing the risk of taking a beta drug against the risk of letting their ailment run its course. Sometimes it's better to take the beta drug, risks and all; the FDA is actually increasing your risk of death when it stops you from doing so in this instance.
Plus, the FDA's approval process adds lots of time to the development of each drug; since advances in medicine, like advances in other fields, often build on each other, the delays introduced by the FDA are cumulative, meaning that later advances, such as the anti-aging pill that all our lives ultimately depend on, are delayed by many times the advertised FDA lag time.
"And yes, a very very important factor left out of real wages, productivity, and inflation are what I call social costs. They include housing, education, retirement, healthcare, divorce, and insurance."
All government-operated or heavily regulated. Hmmm. I see a pattern here.
"Who cares if you can get a cheap pair of jeans sewn by some Haitian sweat-shop, if you can't afford a place to live? And yet increasingly it is people like paramedics, police, and nurses that are running into problems like that. The market won't fix it either - most housing that these people would be interested in is low ROI and high financial risk. As Snow recently noted "Capital is a coward.""
The ROI on cheap housing is lowered by regulation. You've got overhead imposed by planning commissions, zoning commissions, ad nauseaum that are imposed per development. You pay this cost whether you're building a $40,000 house or a $200,000 house. That shifts developer preferences in favor of building more expensive houses.
"Real wages are falling drastically - as anyone with two adults working in the family to make ends meet can testify when two generations ago one wage-earner sufficed. These productivity numbers are hollow men, filled with huge inconsistencies and so are the inflation numbers. This is why the cheap money provided by Greenspan is becoming debt - personal and national - as consumers are increasingly leveraged in order to simply maintain the same or a reasonably lower standard of living."
First, end Prohibition. Then you can live in a cheap neighborhood without getting shot.
Second, privatize and deregulate across the board to lower costs.
"So the question that has to be asked is what happens when all of the new jobs and industries that are "new" simply skip the part of the process where they employ people here and immediately outsource for cheap offshore?"
That won't happen as long as we invent the new stuff.
"Anyway, I am wondering where the jobs are going to come from in the future."
Well, if we deregulate across the board, there'll be plenty of places for new jobs to come from.
You'll have jobs in aerospace, building spacecraft and selling joyrides to millionaires. Then selling joyrides to doctors. Then selling joyrides to the middle class.
Then we'll let the Japanese build our spacecraft and we'll get to work on habitats, power collectors, and other neat things. We'll bring back enough hydrocarbons from Jupiter to put the Saudis out of business permanently. We'll build better habitats, with nicer apartments. Then even better ones, with hunting grounds, stadiums, high-end hotels, restaurants, and all the other stuff you'd expect to find in a city.
Meanwhile, we'll get that anti-aging pill. First, we'll probably figure out how to clone a body sans brain, and transplant the brain into a fresh 20-year-old copy of our own bodies, without the possibility of rejection.
Add in a substitution of an X chromosome for a Y chromosome, and you've got the most effective sex-change operation in history :)
Then we'll solve the fusion problem, and that'll make all kinds of things economically feasible. New materials that currently take too much energy to synthesize. Expeditions to the outer Solar System and beyond. The first interstellar expedition. As long as NASA doesn't get it's hands on it, we'll have more interstellar expeditions and a colony without a 40 year hiatus.
Then we let the Japanese, Indians, and Chinese build all that stuff while we move on to even greater wonders. We'll look for that loophole in Einstein's speed limit. We'll build orbiting apartment complexes and single-family habitats, and commute with personal fusion powered-spacecraft (Made in China).
Repeat as necessary until Mankind rules the Universe (or at least that part of it not already in posession of aliens). That should keep us busy for a while.posted by: Ken on 11.08.03 at 12:40 AM [permalink]
Again good point. You are right that a good portion of a nicer place is paying for labor and consumer durables and that kind of thing.
Now I did ignore that, because as you so astutely point out things are different in Boston and SF. Which are actually the two places in the US that I have lived most recently.
Now I do have a rant ready about how I think that we are going to see more people moving into older, more urban locations, but that is just too far off topic.posted by: Rich on 11.08.03 at 12:40 AM [permalink]
David, while we happen to agree on the endpoint here, your near-religious faith that the outcomes of the market are divinely ordained gives me the creeps.posted by: Jason McCullough on 11.08.03 at 12:40 AM [permalink]
I live in the Boston area, where it is difficult to build and where people want to live (there is, of course, a connection there). My brother lives in Binghamton, NY, an old industrial city in a metropolitan area that has been losing jobs and people.
He recently bought a house for about $60,000 that would go for over $300,000 around here. For years many people who own property in the Binghamton area have actually been losing money.
The same thing happened in many American cities in the years after WW II when people and jobs moved to the suburbs. One result was the urban renewal programs, which paid good money to take many of these properties off people's hands, and then knocked down much of the housing that was dragging the market down.posted by: Roger Sweeny on 11.08.03 at 12:40 AM [permalink]
"Plus, the FDA's approval process adds lots of time to the development of each drug; since advances in medicine, like advances in other fields, often build on each other, the delays introduced by the FDA are cumulative, meaning that later advances, such as the anti-aging pill that all our lives ultimately depend on, are delayed by many times the advertised FDA lag time."
The FDA is walking a fine line between pressures to expedite drug approvals and the horrors of having approved a drug that causes harm. As remarkably similar as we all seem to be, we each have our own unique genetic composition. Bear in mind that clinical trials only involve a limited number of people; usually in the low thousands. Once released to market, there is always the potential for a drug to have an adverse effect on some group of people that was not represented in the clinical trial.
We are willing to accept 40,000 deaths a year from traffic accidents but are incensed when a previously unobserved side effect crops up in the larger population and harms a few people. Note I said "harms a few people" since the FDA's adverse event reporting process is generally pretty good at responding to early trends.
I wager the ones screaming the loudest for relaxing reviews will also be the first ones to file lawsuits over the slightest negative side effect that appears (they are probably smokers, too!)
While we are on the topic of public outrage, it seems to me that that is what we'll do with our new free time: yell and scream and sue each other!
An article in Scientific American on the study of interactions between baboons and their levels of stress hormones described their similarities to people. Baboons spend 3-4 hours each day on subsistence and the rest of the time stressing each other. That's more likely what we'll do with our free time. I didn't hear anyone talk about outsourcing our attorneys overseas.
There are a lot of people who seem to like to spend their free time tearing down what someone else has built.
Wake-up from your slumber people! Robert Reich speaks of a wonderful future ruled by creative people! - Nice Try RR - now go back to to the Ivy Towers and let the real people speak.
I wonder what you will all say when the only place to buy advanced weapon systems is China and India?
Get Real - The bubble of the 90's and astronomic rise in tech jobs was driven by the internet - period - it was an anomaly people.
This is reality - we need Americans to be tech saavy and we need an economic infrastructure which is supportive of Americans pursuing technical careers. RR and his left-wing marketing cronies can come along for the ride if corporations see value in wasting money on their services, however, All Engineers and Technical People in this country MUST UNITE AND PUSH FOR GLOBAL TECHNICAL SUPREMACY! OUR GREAT NATION DEPENDS ON IT!
To hell with international outsourcing - it is a BAD THING!
Robert - Go back to academia! The real working American needs to support their family today and cannot afford to live in your fantasy world!
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