Monday, June 27, 2005

Analysis:
A Bad Idea for Tax Reform

By Executive Order issued on January 7, 2005, President Bush authorized the formation of the President's Advisory Panel on Federal Tax Reform, which is expected to release its report of recommendations some time in the near future. Comprising a largely neo-conservative group of Bush Administration insiders, and taking testimony from a relatively narrow selection of economists and other experts, the Commission is charged with setting forth proposals to "simplify" the tax code to the end of making it less onerous, less burdensome, less confusing, and more productive. No one yet knows what recommendations will be included in the final report, but speculation centers on proposals that continue a long tradition of using the Internal Revenue Code as an instrument for achieving desired social and economic ends. The problem for progressives is that, while it was all well and good when those social and economic ends were desirable to the goal of a more egalitarian society, they will not be happy at all when the tax code becomes a far more effective weapon at constructing a society desirable to the neo-conservatives and other armies of the near- and far-Right.

Social Ends and Taxing Means
Examples of how tax policy promotes cultural values are far too many to list. They span the spectrum of life at the personal, group, and society levels. It is enough to point to several that have had enormous, if in some cases wholly subtle, influence.

A quick number for one of these social tuning knobs can be found in the tax consequences of marriages, and never mind the intricate details of "marriage penalty taxes" and abatements of such burdens. The reality is that two people who are married do not have to pay as much on their combined income as one person making that much, even though those two people living together will experience scale economies impossible for the one person to achieve.

The argument goes, of course, that because our tax system is progressive, the combined incomes would be unfairly exposed to a higher marginal tax rate than each individual's income would have been; but this argument is entirely fallacious: the two people have a combined income that is used by the household in exactly the same manner as the income of the single person would be.

That the federal government is doing everything in its power to prevent gay marriages is an exercise in preventing the huge marriage tax shield from accruing to a life-style the government does not want to promote. Effectively, the tax code's benefits are for intended recipients only, and not for those whose behaviors, actions, and beliefs are contrary to what is government approved. "Fairness" in tax policy is a specious concept when it comes to marriage benefits: the shields exist for those whose lifestyles comport with specific beliefs that arguably have narrowly religious backdrops. This same motive force of specific tax policies associated with specific religious doctrines comes into play in an unspoken and subtle way in the later part of this article; but first, as a primer for the pump, a glaring example of tax policy being used to shape society is in order.

A remarkable success story of how tax policy can promote a desired social policy can be found in the treatment of owner-occupied housing in the U.S. tax code. The deductibility of the interest on mortgage loans is a compelling incentive for households to allocate a disproportionate share of income toward investment in the physical asset of a house; but mortgage interest deductibility is only one of several incentives the tax code provides for owner-occupied housing. The result of this deliberate policy by the government has been a massive over-production of single-family houses with attendant distortions of physical and financial capital flows. Whether or not this has been "good" policy is for social and economics commentators; but the long-term and profound effects upon how the consumers have shaped the way resources are used in the United States is beyond any dispute.

A Digression for Some Arithmetic
Before proceeding with the main point of this article, some terminology and associated math should be set forth, just in case some readers don't spend serious time studying and remembering how different types of taxes work.

It is not an oversimplification to state that a tax system can operate one of four ways:

Flat tax: This is a tax of the same dollar amount upon everyone. It would be the ultimate in simplicity as a federal revenue generator. Every citizen pays the same amount of money every year. Let's say the flat tax was $2,000 per head. With about 285 million citizens, that would come out to be around $570 billion in federal tax revenue. Although the love child of a few economists who admire its lack of distorting effects on an economy, the flat tax suffers from the fatal flaw that it would too obviously hurt people of limited means far more than it would those with lots of money.

Proportional tax: This tax is occasionally misnamed a "flat tax," but a proportional tax applies the same percentage tax rate to all people, regardless of how much they make. Variations on the theme are plentiful, and below, several of them will be investigated a bit more deeply because it appears that some version of a proportional tax is going to be recommended by the President's Commission on Tax Reform. Suffice it to note that sales taxes are almost always proportional taxes on retail prices of goods. Value added taxes (VATs) are proportional taxes on the wholesale prices at various stages of production, but this just means that the sales tax is going to be buried in the final prices of goods instead of being on direct display at the checkout register. As a rough estimate of the tax revenue generated by a national sales tax, suppose a tax of 15% were to be assessed on the final output of all new goods and services produced in the United States, as measured by the gross domestic product for 2004. According to the 2004 CIA World Factbook, the GDP for 2004 for the United States was $10.98 trillion, so a 15% tax on this amount would generate federal tax revenues totaling $1.65 trillion.

Regressive tax: Every now and then, some hard-core, Right-wing economist brings up the idea of making taxes higher for people who make less money. The idea is that, if folks know they'll pay more if they earn less, they'll have a whole lot of incentive to work harder so they don't have to pay as much in tax on the last dollar they earn. And, yes, there really are economists who think a regressive tax would be a great idea, even though the whole idea is so obviously unfair on its face that it could never happen... at least, not if it was too obvious.

Progressive tax: Income taxes based on a progressivity principle are the most common type in the world. Progressive taxes assess a higher tax rate to income at higher and higher levels. Consider a relatively simple, three-tier structure:

For income of $15,000 or less, a 10% tax rate is applied.
For income between $15,001 and $40,000, a 20% tax rate is applied.
For income greater than $40,000, a 30% tax rate is applied.

So, for a person making, say, $12,000, the total income tax bill would be
    10%×$12,000 = $1,200.

For a person making, say, $25,000, the total income tax bill would be
    10%×$15,000 20%×$10,000 = $3,500.

And for a person making, say, $70,000, the total income tax bill would be
    10%×$15,000 20%×$25,000 30%×$35,000 = $17,000

Notice several features of progressive taxes. First, not all income is taxed at the highest rate; only the income that falls in a given tax bracket gets hit at the so-called "marginal rate." Second, progressive taxes are annoyingly complicated little suckers. It's not all that easy to predict how much income tax will have to be paid in a given year, and this is made worse by Congress constantly tinkering with both the rates in the different levels and by where each level begins and ends. Most people fill out a W-4 form, which is supposed to give an employer a rough idea of where an employee's income will fall in the tax tables and therefore give a decent idea of how much to withhold for the employee; but this doesn't always work very well, especially for people who work multiple, part-time jobs that cause income to stack in a way that kicks them into higher marginal tax brackets than the W-4 can properly predict.

For better or worse, though, the United States and most of the civilized world have some form of progressivity in their personal and corporate income tax structures, although the U.S. has been on a path over the past several decades of "flattening" the structure by reducing the number of tiers. The President's tax commission might very well finish the job by entirely dispensing with the tiers; but converting the federal income tax structure into a proportional income tax would be too obviously a windfall to those with high incomes because it would clearly relieve them of the burden of facing progressively higher marginal tax rates on the upper reaches of their income.

This means the tax must come in a better-looking package, one that promotes some apparently important ideal within the American psyche. Imagine a tax that is at once simple and promotes old-fashioned Protestant frugality.

Tax Structures to Promote Savings: Slapping the Consumers
A proportional tax fills the bill, particularly if the tax is only on consumption because everyone knows that Americans don't save enough of their income, and everyone knows that saving money is a good thing. Actually, the importance of increasing the savings rate among Americans is dubious on its face, especially when the clarion call for more savings comes from pro-business interests, which have great incentive to see Americans save lots of money. The reason is that, if people save more, this increases the supply of lendable funds available for banks and other financial institutions to lend. But when the supply of anything increases, its price decreases; and the price of lendable funds is the interest rate charged on the loans. That means, if Americans save lots more money, interest rates for businesses will go down, making leveraged investments in plant and equipment (as well as leveraged take-overs and buy-outs) cheaper.

But this would be good for regular people, too, one might argue. Not really: first, a consumption tax would be punishing people for trying to take advantage of lower interest rates on anything that had to do with consumption; and second, business investment in plant and equipment has had a marked tendency to be used to replace human capital, not to supplement it. In other words, the modern American business model has had as one of its clear goals the use of physical capital as a "substitute," not a "complement," for labor, meaning that Americans pouring money into savings accounts are going to accelerate the industrial shift that has for years been progressively and deliberately degrading and diminishing the jobs market in the U.S.

And if that weren't enough, recall that interest rates will be falling as more money is saved, so those average Americans, who used to spend their money, now will be saving much of that money at lower and lower rates.

And One Last Whack, Just for Good Measure
A quick look at two hypothetical Americans will drive home another, compelling downside of a national sales tax. Consider the case of Byron and Barton Binkwater, brothers whose lives diverged early on and who now live on opposite sides of the tracks.

Byron Binkwater works like a dog at the EZ-Lube on the south-east side of town, out by the Snarf-n-Barf. He earns total income of $20,000 a year.

Barton Binkwater hit the big time, rising up the corporate ladder at Purcell's Parts down on River Street right by where the Steak Sandwich Outlet used to have its corporate offices. Barton earns $80,000 a year.

Byron and Barton are still a lot alike in many ways. Most importantly, they have the same essential needs in life, even though both of them would say that isn't so. Being of similar builds and health, there is no difference in what they need to stay alive and healthy underneath their quite different outward lifestyles. What they want might be worlds apart, but what they need just to keep going from one day to the next is pretty much the same: roughly the same number of calories, about the same amount of shelter, 'round about the same amount of heat and air conditioning, somewhere near the same medicines. In economics, this "same" aggregate amount is called "autonomous consumption": the amount of money that is necessary regardless of whether there's any income or not. It's not something that varies with lifestyle, it's not something that varies with who a person is and where that person's station in life happens to be. When people are better off, they almost always think they simply must have more just to keep body and soul together, but that's just a mark of their changing wants, not their changing needs.

After all is said and done, Byron and Barton both need $8,000 just to stay alive. That's the basic amount of money each must spend, and anything either of them spends above and beyond that amount is discretionary, whether either of them wants to admit it or not.

Now, if each of them actually only spent what was absolutely necessary and put the rest away in savings, a consumption tax of 15% would hit each of them like this:

Byron spends $8,000 that is exposed to a 15% tax; so his tax bill is
    15%×$8,000 = $1,200.

Barton spends $8,000 that is exposed to a 15% tax; so his tax bill is the same
    15%×$8,000 = $1,200.

What could be more fair? They both pay the same amount of tax!

Ah, but look more closely at the tax rate each of these fellows faces on income:
Byron pays consumption tax of $1,200 on income of $20,000, so his income tax rate is
    $1,200÷$20,000 = 6%.

Barton pays consumption tax of $1,200 on income of $80,000, so his income tax rate is
    $1,200÷$80,000 = 1.5%.

Holy Moses! So this is why there's an old saying in macroeconomics:
A proportional tax on sales is a regressive tax on income.

In fact, Barton could spend a whole lot more than $8,000 on consumption and still have an income tax rate below Byron's. Doing a little bit of algebra, Barton would have to spend $32,000 on consumption before he'd pay the same, 6% income tax rate Byron is paying just to buy enough to stay alive.

Oh, the Feds Wouldn't Let That Happen... Would They?
Surely, any such tax would be lower on food and medicines than it would on luxury items, the argument might go. Perhaps it would be, but any tax whatsoever on essentials would have the same result: it would be a regressive tax on income. It wouldn't matter what the tax rate was, it would still apply to both Barton and Byron the same way on their purchases of essentials, so it would create the same regressivity when looked at as an income tax. Unless the tax commission proposes that essentials of life be exempt from a national sales tax, the poor will be punished more than the rich, based upon income.

So the only way to take away the regressivity feature of a national sales tax would be to exempt all basic foods and medicines; but that poses a major problem for tax planners: those essentials comprise a huge amount of the consumption expenditures in the U.S.: exempting all of the basics people need leaves a much thinner tax base from which to draw federal revenues. One way or the other, at least some positive sales tax rate would have to be applied to at least some consumption items that are essential to people. And once that requirement of a national sales tax is acknowledged, at its core, the tax becomes regressive.

But that just means the federal tax system will continue to be used to promote social and economic goals of those who manage its details.



The Dark Wraith has spoken.

<< 93 Comments Total
 My Pet Goat blogged...

...the two people have a combined income that is used by the household in exactly the same manner as the income of the single person would be.

I'm not going to disagree totally with your point in concept, however logic says couples with two incomes are much more likely to be in a position to maximize their pre-tax dererrals into 401k, etc. (assuming their employers have a tax deferred retirement plan available). This gives an a potentially significant advantage to the married couple, all other things being equal.

Mon Jun 27, 04:55:14 PM EDT  
 Dark Wraith blogged...

Well, yes, Mr. Goat. I was trying to be generous by assuming we were talking about a married couple too stupid to see the incredible panoply of benefits accruing to married folks.

In fact, as I note in a comment in the cross-post of this article over at the Big Brass Blog, according to Harper's Index, there are no fewer than 1,138 benefits at the federal level directly tied to being married.

Structurally, these benefits swing consumption/savings decisions all kinds of ways, and it would be an almost impossible task to see which are dominant and how the final picture from them emerges. I do perceive—and my economics training may very well be biasing my perception, here—a tendency for the overall effect to be toward more saving; but other effects of marriage pull in the opposite direction. Specifically, children tend to propel consumption, especially in certain stages of their growing-up years. So, too, does age of the couple, which tends to deeply affect consumption versus savings patterns.

Yes, indeed, Mr. Goat, it's a complicated subject with lots of numbers and a whole lot of chances for ideological axes to grind waiting just beneath the surface. In other words, it's economics!


The Dark Wraith strives to bore the rest of the world to death with his fetishes.

Mon Jun 27, 05:08:18 PM EDT  
 My Pet Goat blogged...

And for those that do maximize deferrals it not like they really get anything out of their house fund or compnay stock. Thanks of course to the nice folks like Mr. Boosh and Kenny Boy.

Mon Jun 27, 05:25:40 PM EDT  
 My Pet Goat blogged...

Congratulations on passing 20,000. I haven't been paying attention; when did that happen?

Mon Jun 27, 05:30:01 PM EDT  
 Anonymous blogged...

And thus it has ever been, I'm sure. FWIW, Pennsylvania's income tax is (essentially) a flat percentage of income at around 2.5% (I think). MA's is a progressive one, but it's been at least ten years since ragging it with the name "Taxachusetts" was in any way accurate. MA now is down in the middle of the pack when it comes to state taxes.

- oddjob

Mon Jun 27, 05:30:02 PM EDT  
 Anonymous blogged...

I now see I should've referenced the quote I was replying to. My bad:

But that just means the federal tax system will continue to be used to promote social and economic goals of those who manage its details.

- oddjob

Mon Jun 27, 05:32:12 PM EDT  
 Dark Wraith blogged...

Good afternoon, Mr. Goat.

It was a couple of days ago that we crossed the 20,000 mark. Unlike some counters, this one has an almost unlimited log size, so that means there is no systematic recounting of visitors whose first time here was long ago. That means the counter down there is pretty much right on the money for how many distinct computers have hit this blog.

Of course, that hundred thousand mark is still a l-o-o-o-o-ng way off.


The Dark Wraith figures it won't hit the big time until probably some time around the return of the Lord.
[With my luck, the world will come to an end when the counter reads 99,999.]

Mon Jun 27, 05:52:21 PM EDT  
 Dark Wraith blogged...

An interesting mathematical consequence of proportional state taxes, OddJob, is that, when they are combined with a progressive federal tax, the total effect is merely to increase the rate in each tax bracket of the federal tax. But what that means is that, as a percentage increase, the rate hike is falling as the taxpayer's income rises.

Here's what I mean. Consider a 2.5% state tax on all income. That's a perfectly proportional tax. Now, put that together with the simple, progressive tax structure in the article, above. The net effect will be as follows:

The 10% tax bracket becomes a 12.5% effective, overall rate, for a 25% increase.

The 20% tax bracket becomes a 22.5% effective, overall rate, for a 12.5% increase.

The 30% tax bracket becomes a 32.5% effective, overall rate, for an 8.33% increase.

That means, among other things, when a proportional state (or local) income tax is raised across the board, the rate hike is regressive on income in its impact!


The Dark Wraith loves financial mathematics.

Mon Jun 27, 06:01:57 PM EDT  
 dread pirate roberts blogged...

"...the two people have a combined income that is used by the household in exactly the same manner as the income of the single person would be."

umm, wouldn't the second person use a bit more energy, perhaps heating water, and require more food? i quibble. i'm sure that is outweighed by the other economies.

the concrete examples are great. makes the effects of the various schemes easily understood. any thoughts on what you see as likely from the advisory panel.

Mon Jun 27, 07:46:17 PM EDT  
 Dark Wraith blogged...

Good evening, Dread Pirate Roberts.

This article signals my suspicions about what's coming: some kind of proportional tax.

I don't see a value added tax as very likely; there are way too many corporations in the consumer goods manufacturing and supply chain lining up to scream bloody murder about the paperwork nightmare it would create.

It looks to me like, if the neo-cons want a proportional tax, the easiest way to go will be with a national sales tax. That will have states and cities howling at the tops of their lungs, but they don't hold anywhere near the political power of the manufacturers.

Besides, a national sales tax would have the beauty, by its nature, of leaving the military/industrial complex completely untouched, whereas it would be politically too obvious to carve exemptions for those cats into an otherwise broad-based VAT.

My guess is that there would be a considerable phase-in period, and all kinds of candy would be thrown out to special interest groups to keep the rioting down to a low roar; but in the end, the proportional tax would pretty much completely replace the income tax system as we know it, although the Commission might not make the proposal sound that sweeping in its report of recommendations.



That, at least, is how the Dark Wraith sees it coming down.

Mon Jun 27, 11:08:53 PM EDT  
 oldwhitelady blogged...

Good evening, Dark Wraith - Even though taxes are difficult to think about *yuck*, you've given us some good information to keep in mind. It seems that taxes are never fair to everyone. Someone always has to end up paying more. The example of the brothers is an astounding piece.

Mon Jun 27, 11:50:37 PM EDT  
 LindiBee blogged...

But, since much of the US economy is driven by unbridled consumer spending, wouldn't a National Sales tax push our already fragile economy into recession?
Of course, from an environmental standpoint, any consumption tax is good, since American hyper-consumerism creates pollution and depletes non-renewable resources, contributes to global warming, deforestation, mass extinction, etc, etc. But I've not yet seen a convincing alternative economic plan provided by the Green party or the like that could provide both a robust economy and a sustainable environment. (I'm not saying that it can't be done- I just haven't seen it yet, unfortunately.)

Tue Jun 28, 03:15:13 AM EDT  
 Chris Meyer blogged...

Huh, I didn't know that you were an econ person, Dark Wraith. Now I see that it's right there on your "about the author." I'll have to visit more often.

I was recently introduced to the field myself at college and I loved it so much I decided to major in it.

Contrary to the boredom others might experience, I find what you wrote very interesting. I have these thoughts to offer:

First, a point on marriage. My econ textbook taught me that marriage serves either as a tax or a subsidy, depending on the incomes of the two people. If the two individuals make similar incomes, say $50K each, they will pay more taxes as a couple than they would individually, because their combined incomes bring them to a higher bracket. If they make varying incomes, say someone who makes nothing and someone who makes $100K, the couple will pay fewer taxes, because they will be able to take advantage of the tax-free income the individual earning nothing was not previously taking advantage of.

The textbook said that for 58% of Americans, marriage results in a tax subsidy, and for 42%, it results in a tax penalty.

You said: "the two people have a combined income that is used by the household in exactly the same manner as the income of the single person would be."

This may be true. But this attests to the virtues with living with one another and sharing each others' assets. It does not necessarily attest to the virtues of acquiring a legal recognition of marriage.

I am not taking into account the myriad financial advantages marriage can provide through reduced health care costs, better 401Ks, etc. But my point is this: marriage is not economically beneficial every time. Most of the time, it is, but each couple needs to be analyzed separately to decide whether or not it's a good idea.

Now on to to the tax issue.

Virtually all sales taxes (the exception being luxury taxes) will be regressive. This is a significant disadvantage. But allow me to point out the advantages.

1. A sales tax will actually increase long-term consumption. It's counterintuitive. I didn't buy it when my econ teacher first tried to explain it to me. But essentially, the theory is that while consumption is reduced in the short term, the increased savings and investment actually increase the economy's capacity to produce consumable goods, and overall consumption increases as a result.

You say that this can be a bad thing, because this investment is often into machines directed at replacing human employment. Here I must strongly disagree with you. The mechanization of jobs does not so much eliminate jobs, as much it replaces them. It replaces manufacturing jobs with white collar jobs. People need no longer work at tasks machines can now perform, and instead can become doctors, lawyers, authors, etc. Indeed, it is largely because our economy has become so mechanized that we have seen such a shift, and this is why education is so much more important than it was in the past--we have less need for unskilled manufacturing jobs and more for skilled white collar ones. As I see it, increased savings leads to increased investment (because loans are cheaper) which leads to increased mechanization, which leads to a stronger economy (more consumable goods are produced) and higher-quality jobs, all of which can only be positive aspects.

2. Moving away from an income tax would remove the incentive not to earn additional income.

3. The most important thing that any good tax reform must do is provide simplicity. The amount of time and money wasted just on figuring out how many taxes are owed make the current system unacceptably inefficient. What you call a proportional tax (I call it a flat tax, and do not consider it a misnomer to do so--a standard percentage can just as easibly be described as "flat" as a standard fee) would provide this simplicity. This would be true whether it was flat sales tax or a flat income tax.

I think that a flat tax is quite imperative for providing simplicity, and therefore efficiency, along with fairness. The debate for me is whether this is best done with a flat income or sales tax. The sales tax has the the first two advantages I listed earlier--it would increase the incentive to earn more income while at the same time increasing the incentive to save more of that income. The income tax has the advantage of being able to address regressivity. For instance, the first $20,000 could be tax exempt, providing for the basic needs of everyone.

I consider the advantages and disadvantages of both to be roughly equal. But what is truly important is simplification, and I would be satisfied with any reform that achieved that.

But more important to me than whether the tax is on income or sales, or flat or progressive, is that our government's elaborate system of subsidies, deductions and credits be done away with.

This would surely be a politically impossible task. Everyone has their favorite tax breaks and government handouts. Most people can see that the overall system is deeply flawed, but justify their own personal handouts and tax breaks as worthy exceptions. Farmers will justify their subsidies, churches their charitable tax deductions, etc. Personally, I would like to keep the tax breaks and credits on alternative energy sources.

But if I am to expect others to give up the goodies that benefit themselves, I must be ready to give up mine as well. Thus I advocate the elimination of every subsidy, tax deduction and tax credit out there. No exceptions. This would eliminate one of the worst sources of pork-barrel spending, prevent corrupt politicians from awarding businesses with big giveaways, and most importantly, it would make our economic system free, fair, and simple.

Since this will never occur, I will support any reform that comes closer to this goal, by eliminating whatever goodies we can.

Tue Jun 28, 06:00:12 AM EDT  
 SB Gypsy blogged...

Good Morning,


...it would increase the incentive to earn more income...


I don't think there could be more "incentive" to earn more than our own liberty already provides. If there are no white collar jobs to be found, the alternative is unemployment.

This may have been an effective incentive in job markets of yore, where you could get a job, and it was "your" job, and there was little churning of the job market in order to depress wages. Then you could decide what you wanted to spend your life doing, and train to do it, and expect to hold a job for a lifetime, and receive a pension to fund your old age.

Now, by the time you've studied your way thru college, the profession you have selected is either impacted, or flown to India. You are expected to switch jobs early and often. If you don't, you are labeled complacent.

In this job market, where you are only working until you get laid off and they can hire a younger cheaper worker in 3 years, the incentive is false and the hope for improvement is illusory.

The government does not need to dangle incentives for the american worker: we have the most productive workforce on the planet.





"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few. But we can't have both." ________Louis Brandeis

Tue Jun 28, 09:18:18 AM EDT  
 Anonymous blogged...

I used to think like this, too.

It ignores one tiny detail, all that stuff was put there because it served a strong enough good to some constituency that it's going to stay in place no matter what. Eliminate it now, it will creep back in sooner or later. The Reagan era was when I was most passionately in favor of such reforms. They were partially put in place, and then eroded away under this Republican Congress.

- oddjob

Tue Jun 28, 09:36:24 AM EDT  
 Dark Wraith blogged...

Good morning, Chris Meyer, and welcome to The Dark Wraith Forums.

Your comment has quite a few different issues to address, but I must teach here in a while, so I'll touch a couple now and some others later.

First, let's deal with the idea that a higher savings rate in the present creates more robust consumption later. This is a standard demonstration these days in some principles of macroeconomics textbooks. It has to do with what can be graphed as two separate but related production possibilities frontiers: the first represents the trade-off between current consumption and current savings; the second represents a future production possibilities frontier depicting two composite consumption goods. The theory goes that, as current consumption is traded off for more and more savings, the result will be a translation outward of the second production possibilities frontier.

If you are familiar with social history, you might note the curious relationship between this hypothesis and the related Protestant ethic that was dominant in the thinking of the Classical economists of the Austrian School in the 19th and 20th Centuries. It is no coincidence that the economics being developed and handed down to students of the modern era was heavily influenced—infused, even—by deeper religious and social values serving as subtext and guidance.

Now to the point of the hypothesis: there is no doubt that savings and consumption represent a trade-off in the short-run when income is held constant. That having been said, you must be prepared to state clearly what constitutes "consumption." As I point out in "Seven Principles of Macroeconomics", in a globalized economy, purchase of foreign goods is savings because the liquid capital (U.S. dollars) used to pay for the expenditures end up circulating back to the United States as capital investment. Americans buying imports are actually investing through the central banks of other countries, with the interest being reflected through exchange rates as lower prices Americans have to pay, and the principal balance being reclaimed as more or less a perpetuity in the long-term investments the foreign lenders finance.

Unfortunately, this is a case where simple doesn't work. Merely saying 'savings versus consumption' misses the overwhelming dimension that global exchange creates that causes consumption to actually end up being savings by another name. I alluded to that point in the my article mentioned above through the one section entitled "Foreign Toasters." Those cheap foreign goods are precisely the material compensation American purchasers of imports receive for the both the foregone consumption of domestic products and for the foregone control of the long-term capital that matches the short-term dollars.

This takes that bifurcated world of the future right off the table. Now, there are economists, politicians, and assorted social commentators who keep beating the drum that somehow we can force re-domestication of consumption and savings. That isn't going to happen in a world where the United States government runs chronically massive budget deficits: the enormous trade imbalance—and therefore, the strange way by which Americans "save" through consumption of imports—is the consequence of those deficits, not some tandem phenomenon. Instrumentalizing the tax code to punish consumption in a world such as ours is a system of trade barriers by another name: it is a return to Smoot-Hawley, and it will have the same effect. If we force people to stop consuming without repairing the underlying structural motivator of their rational actions, we are going to end up throwing the United States and the rest of the industrialized world into a deep, deep recession.

That national sales tax idea, bad as it is as a regressive tax on income, will serve the end of breaking the back of our appetite for imports, but that appetite for imports is being powered by revenue and expenditure decisions being made in Washington, D.C., not in some matrix of character flaws in the American people that makes them save too little and buy imports.

Now, let me address the old-time idea of short-term structural unemployment being a good thing in the long run because it forces a re-alignment of skill sets of American workers.

The hypothesis goes something like this: when the economy shifts from one production matrix that uses more labor as a factor of production to another production matrix that substitutes capital for labor as the preferred factor in the production, the resulting, so-called "structural unemployment" of labor might be bad in the short-run, but in the long run it forces labor to acquire more features that are complementary to the newly dominant physical capital. Hence, with a more refined skill set, the labor re-enters the market to command a higher wage rate based upon its complementarity with the physical capital that originally replaced it.

As a theoretical concept, this is fine; and even anecdotal historical evidence points to many, many examples of this proposition in action. A great example is how computers, particularly starting in the late 1980s and early 1990s, began to replace lots of people who had done the grunt work that computers were able to take over. The unemployment that resulted from this technological shift (not "improvement," just shift) was notable and widespread. Arguably, this story had a happy ending because, eventually, those computers needed complementary labor skills to operate them, so a new labor sub-market was born, with a robust labor demand curve for computer-literate office personnel.

The problem is this: the technology kept moving forward, and computers had a bad habit of needing fewer and fewer workers to maintain them as the technological drive for efficiency and productivity propelled companies to continue to invest in exactly the continuing technological shift that was disastrous to people: the computers became more and more sophisticated, and they required fewer and fewer human complements. Any anecdote about how the short-run unemployment caused by the computer age led to a new era of high-paying jobs for computer people should also include a footnote about how that whole job market is one giant fiasco here in the early 21st Century: the number of unemployed, under-employed, and mis-employed people with "computer skills" and computer degrees is staggering, and the situation is getting worse and worse.

Companies are profit maximizers. Labor is expensive; and the forward cost it imposes against corporate profits is enough to propel the computer industry to throw billions and billions of dollars every year into technology that replaces human capital with anything other than human capital.

Let's take the example of genetically modified organisms (GMOs). One of the many, many products coming out of that technology is tomatoes that have skins tough enough that they can be harvested with mechanical pickers. This means no more farm laborers need be pressed into service to harvest those tomatoes.

It's going to take an economist with a face of stone to keep from bursting out laughing hysterically while declaring that those people who used to pick those tomatoes are now in a position to go to college and get degrees in genetics so they can become complements to the GMO technology. And that goes for the children, and the children's children, of those displaced workers. This is what's called in development economics "emiserizing growth": the economy expands, but the technological shifts leave masses of human beings choking and permanently diminished in the dusty winds of change.

No, people don't just decide to become doctors and lawyers when they lose their jobs to machines. Their kids don't either: poverty and the mentality of defeat are handed down from one generation to the next, especially when, every time people try to get up on their feet again, the technology shifts under those feet.

Right now, I'm teaching kids whose fathers and mothers were factory workers now unemployed. I hear those kids telling me, "I'm going into computer stuff."

What do I tell them? "Yeah, that's the wave of the future."

Or do I tell them the double-bladed truth? "Dude, the jobs for computer people just aren't out there anymore. And besides, you grew up in a working class family, and I've already seen your math and logic skills; and they suck, not because you're a flawed human being, but because you were reared in a family that didn't cultivate those skills, and you went to a school in a state that spits on education at the very same moment the politicians preen around on stage talking about how important it is."

The world of the future is not some beast waiting to be tamed by our sacrificial savings in the here and now. We've been doing that, and it doesn't do any good to hand corporate America more lendable funds so they can have cheap capital to go out and further erode the future that awaits American labor. They've gotten just about everything they want, and still the future gets worse and worse for kids.

Using tax law to take away the here and now for some brighter tomorrow isn't going to solve the deep and growing problems of this country. All it's going to do is grease the road down which our handbasket is careening.


The Dark Wraith will return later.

Tue Jun 28, 11:03:14 AM EDT  
 LindiBee blogged...

As a former employee of CompuServe who lost her job due to the AOL buyout, it always seemed that the case presented by conservative economists that downsizing and export of jobs is good for Americans is just a high-end version of "Who Moved My Cheese?"- written largely to prevent laid-off workers from rioting, litigating, or torching their old offices on the way out the door.
On a different front, why is it assumed that only white collar jobs will be created when companies downsize by the addition of new technology? Even in the midst of the tech boom of the 1990's, there are tons of stories of tech people who worked long hours for little pay, and whose jobs were eliminated just as their companies became profitable. Check out the book NetSlaves: True Tales of Working the Web

Tue Jun 28, 02:27:19 PM EDT  
 lenin's ghost blogged...

wow! dark one.....what would you suggest the young, semi-priveleged do other than 'computer stuff'?
i'm big on the mental health field as the woprld seems to be slowly going insane.;-)

Tue Jun 28, 03:42:38 PM EDT  
 Dark Wraith blogged...

Good afternoon, Lenin's Ghost.

What would I suggest the young, semi-priveleged do?

Move.



The Dark Wraith prepares the travel guide.

Tue Jun 28, 03:56:16 PM EDT  
 AuntieRoo blogged...

Dark Wraith,

If Mr. Meyer comes back this thread might end up being known as The Education of Mr. Meyer.

Auntie Roo is interested in seeing how this unfolds.

Tue Jun 28, 04:19:52 PM EDT  
 Anonymous blogged...

Auntie Roo:

:-)

- oddjob

Tue Jun 28, 04:37:03 PM EDT  
 Anonymous blogged...

Here (in its way) is another example of why the Austrian School's model of untrammelled capitalism is not the way to go:

Exxon has never - to this very day! - paid its civil penalty obligation to the town & people of Cordova, AK
(- Hat tip, The Culture Ghost.)

- oddjob

That's why progressives such as Teddy Roosevelt & Franklin Roosevelt had a case to make, and they still do.

Tue Jun 28, 06:15:33 PM EDT  
 zencomix blogged...

Years ago, I lived in a town that wanted to build a new library. The question of whether or not to raise the funds and pay for bonds with a local sales tax was placed on the ballot, and people voted on it. It passed overwhelmingly.It is always nice to know exactly what your tax dollars are buying. In Colorado back in the 90's, a ballot initiative to amend the state constitution passed, requiring the government to refund any tax surplus in the budget.It's always nice to know exactly how much money they really need to run the government. I think it would be a bad idea to move the sales tax into the Federal arena...

Tue Jun 28, 06:33:20 PM EDT  
 DuWayne Brayton blogged...

"In other words, the modern American business model has had as one of its clear goals the use of physical capital as a "substitute," not a "complement," for labor, meaning that Americans pouring money into savings accounts are going to accelerate the industrial shift that has for years been progressively and deliberately degrading and diminishing the jobs market in the U.S."

I would have to argue that while on the surface, and in some regards, this looks/is bad it's not all bad. Chris Myers had the unrealistic assumption that this shifts all those displaced workers into the white collar world. This is not so. But I would argue that the shift that would happen could very well justify the pain of that job loss. Not all those who are displaced by machines would in fact find reasonable substitute employment. However, the end result of mass unemployment (something I happen to advocate) would be one of two things, probably both. 1. Bloody revolution in the streets. As more lose their jobs, the burden of taxation required to provide there basic needs is placed on a shrinking tax base - less people paying for more subsidies. This will cause a major cutback in services provided - i.e. less health care, more hunger and less shelter. People need these things for survival. If you try to take them away along with the ability to get them you will have revolution. This is a historical fact and while society is softer today, you try to tell someone they can't provide for their children and therefore their children along with them will die of starvation and exposure and see how fast it gets bloody. The brighter side of this equation is that the cost of production is lowered to a point it becomes negligible. The more we automate the lower prices will be forced by straight need. The push will be for 2. Further and further re-distribution of wealth. Remarkably, the neo-con agenda of greed which would in fact cause a dramatic push towards the culmination of that which the neo-cons find most abhorrent - socialism. To be specific democratic socialism. The one nation that comes closest to this - the real dream of Marx and Engles, despite it's lack of social medicine, is in fact the United States of America. What is lacking to push this closer to fruition is in fact the mechanization of more and more "meaningless" labor. If a machine can perform the task, and there are few they can't, then having humans performing that labor is by definition dehumanizing. When you push people to perform tasks with the same accuracy and precision of a machine you are pushing them to be - less human.

In factories, fast food restaurants and a host of other employment venues - including many "white collar" jobs, we find the most valuable natural resource on the planet, human minds, wasting away needlessly. I believe it is time to reap the benefit promised us with the industrial and then the techno revolutions - time. Time to be and contribute to society the best of what we have to offer - not what we can learn in the limited time allotted most of us before we have to seek provision for ourselves and family. I have met many online and off who waste their lives at jobs that could be performed better and faster by machines - meanwhile their sometimes genius level brilliance is squandered, for what? Eventually there could in fact be the realization of Mr. Myers ideal - the employment would be displaced in far more valuable ways.

Some would argue that some people would be compelled to do nothing productive. This is true - so what? If they want to sit around watching TV, smoking joints and F*cking, let them. Who cares? They will dwindle and die and then they are gone. Respect and special privilege would become the currency of life. The desire to be - something - would motivate most people to learn and be and do. Over time the aforementioned would become an anachronism.

I am not saying that democratic socialism is the end all perfect system - in fact Marx didn't either - but it is a step in the right direction. Eventually as society grows with an increasingly leveled playing field, the result would in fact be a responsible anarchy. I really don't know if society will in fact survive and grow out of capitalism - I just hope beyond reckoning that we will. But then it may just be a pipe dream. Those who want nothing more than to sit around, smoke joints, watch TV and f*ck may just have the right idea - I sincerely hope not.

DuWayne
AKA
Treban

Tue Jun 28, 10:22:48 PM EDT  
 Dark Wraith blogged...

Danged, Treban, you disappear, and then you make a pretty good stab at a grand re-appearance with that last comment.


The Dark Wraith welcomes you back.

Tue Jun 28, 10:28:14 PM EDT  
 DuWayne Brayton blogged...

Thank you Dark Wraith, I have been very busy with my move but things are setteling enough for me to come out once in a while.

It wasn't meant to be a harsh stab, I just can't get over my love of Marx. I tried, in high school I decided to go out with Rand for a while but when it comes down to it the ends the same - and Carl is a lot warmer than that Ice Queen Ayn.

Tue Jun 28, 11:14:47 PM EDT  
 oldwhitelady blogged...

Those who want nothing more than to sit around, smoke joints, watch TV and f*ck may just have the right idea - I sincerely hope not.

DuWayne
AKA
Treban


Damn! I didn't know that was an option! :)

Wed Jun 29, 01:08:08 AM EDT  
 Dark Wraith blogged...

Good evening, Old White Lady.

I think that has something to do with the marketing paradigm of "consumer sovereignty."




The Dark Wraith wishes there were a way to package the product.
[Lord, I'd be richer than Bill Gates.]

Wed Jun 29, 01:18:34 AM EDT  
 Dark Wraith blogged...

And why in tarnation is it that these threads almost inevitably take on a life of their own?




The Dark Wraith is convinced that this blog has achieved some kind of autonomous consciousness.

Wed Jun 29, 01:21:05 AM EDT  
 Chris Meyer blogged...

Why thank you Auntie Roo. I always appreciate education. I'm quite new to economics and I still have a childlike curiosity for it.

Dark Wraith, you said some things that I found quite thought-provoking. First, your response to the effects that sales tax has on consumption--that purchase of foreign goods is savings. My understanding of how such a tax affects consumption was complicated to begin with, and now it is even more so. I'm not sure what to make of it--so I won't.

The comparison with Smoot-Hawley is quite compelling and I had not thought of the issue in that way, and since I am such a firm opponent of protectionist measures, I think this has leaned me slightly more toward a flat income tax rather than a flat sales tax.

It's also quite compelling to think about the Protestant ethic that was infused into economic teaching. But I am not automatically led to believe this ethic being infused is a negative thing. Do you think it is?

Now, on to the juicier topic of how technology affects employment.

I do not advocate the theory you presented and criticize.

I would not declare that "those people who used to pick those tomatoes are now in a position to go to college and get degrees in genetics so they can become complements to the GMO technology."

That's not how it works.

My theory is more like this. We have just accomplished a more efficient and cheaper way of producing tomatoes. Now tomatoes are cheaper for everyone. Other people, uninvolved in the tomato-making process, now spend less of their income on the tomatoes they're buying, meaning they have more disposable income to spend on other things. Once they've reached their basic need of food, for instance, they might be able to spend money, on, say, a book, helping to create new job opportunities for authors and publishers.

Technology and change often have adverse affects on those they immediately displace. And I would not necessarily try to argue that those displaced will still somehow be better off. The tomato pickers will not likely move on to work at white collar jobs.

But think, if you will, about the effects a mechanization of the tomato industry would have on humanity as a whole.

Humanity is able to produce more tomatoes with fewer (human) resources. This increase in productivity means an increase in wealth. The wealth goes somewhere. Part of it might go to inventors, farm owners, and tomato buyers, in the form of lower prices.

This new wealth will eventually be spent on something. Perhaps even more investment into tomatoes. Perhaps a mansion for the inventor. Perhaps more spaghetti at fancy restaurants.

New, completely different jobs are created by the new wealth, perhaps a couple in different areas of the tomato industry, as the theory you presented might suggest, but others for waiters and construction workers.

Since jobs once done by humans are now done by machines, that means that more human labor is available toward other aims.

In regions with large immigrant populations, like the Southwest and Florida, it can translate into more gardeners, more nannies, to people that might otherwise stay home with their kids or have barren lawns.

Or it can translate into a large group of young people that realizes that there is less of a future for unskilled labor, which makes it more imperative to get the skills they need to work for jobs that are demanded.

Think about the world only a couple centuries ago, when more than 90% of all humanity worked in agriculture. New technology massively increased agricultural productivity, and today around 1-2% of Americans work in agriculture, a number that continues to shrink. Hundreds of millions of people had to be displaced during that time, many, presumably, without many skills outside of agriculture.

They adapted. When the supply of agricultural workers exceeded the demand for them, they moved to other fields that demanded them.

The urban revolution would have never occurred without these advancements that displaced so many people. Most of the things we enjoy about our lifestyle wouldn't.

The situation we have today is no different, except that we live in it, and we know or might be those people that are displaced.

There is nothing unique about the revolution in computer technology vs. agricultural technology or any other technological advancement we have ever had. The same thing you said about computers taking over all the jobs could be said of tractors--they did replace nearly all the agricultural jobs. So as all the jobs are taken, what to do people who had them do? They move to something else. What will they move to? Whatever is demanded.

As long as humans keep making more demands, humans will always have jobs. And humans are seldom satiated--they will always demand more. If we reach a point where nothing is demanded anymore, then, well, we won't really need to work for anything anymore.

The difference between what I am saying here and what the theory you mentioned suggested is that I am not saying that when technology eliminates a need for labor, it also creates a different need for labor. A technology might totally eliminate such a need. And the more it does so the better.

"the number of unemployed, under-employed, and mis-employed people with "computer skills" and computer degrees is staggering, and the situation is getting worse and worse."

My first response is to dispute part of this. The unemployment has stayed 5-6% over the last several years, a very comfortable rate, especially when compared to the other industrial countries in the world, many with 10-15% unemployment rates. I find it difficult to believe that a disproportionate number are skilled in computers.

My second response is, so what? Supply exceeds demand. We no longer need as many computer techies. So people drop out of the field, get "misemployed," and fewer people go in, and choose a different field, say, economics--we can never have too many economists right?

It happens all the time.

Dark Wraith, if I am to interpret what you are suggesting, do you really mean to imply that more technology to reduce the need for human labor is a bad thing? Would you rather that such technology should be stymied so that the present employment balance can be maintained?

If we wanted everyone to always be employed, we could have the government pay them to do something useless, like, say, dig holes and then put the dirt back in and repeat. That is, essentially, what one would be advocating by saying that instead of improving and adopting technology, we should just have humans do the work instead. You are having them do something useless, unnecessary.

Oddjob--just because reforms might be eroded is not a reason to not advocate them. Our laws inevitably need cleaning, it should not discourage you.

Duwayne--

"Chris Myers had the unrealistic assumption that this shifts all those displaced workers into the white collar world. This is not so."

Not all the displaced workers go into the white collar world, something I failed to mention in my first post but mentioned here with the example of tomato workers shifting to gardening and nannying, otherwise undemanded jobs.

But while industrial shifts don't bring all displaced workers into the white collar world, no one would have been brought into the white collar world had these shifts not occurred--we'd all be food gatherers. And the more shifts occur, the larger the white collar community becomes.

This is empirically demonstrated through history. The industrial revolution largely created the middle class, and as information and technology have constantly improved, the white collar class has continued to grow, to the point that it dominates today's society.

This is not without its disadvantages. It is largely because of the continued growth of the white collar class, and the continued decline of the blue collar one, that we have such a large income disparity in this nation. Put another way, the gap between unskilled workers and skilled ones continues to expand. Skilled workers get paid more and unskilled workers get paid less.

But it is still, I must maintain, quite worth it. Progress should not be impeded by fear of change.

Wed Jun 29, 05:15:24 AM EDT  
 Anonymous blogged...

Spoken like a true Austrian School economist.

The Robber Barons of the Gilded Age (& also Karl Rove & Grover Norquist) would be proud.

- oddjob

Wed Jun 29, 09:17:29 AM EDT  
 Anonymous blogged...

The problem with your thinking is it synonymizes human lives with machinery as things to be discarded in the trash heap when no longer wanted, an immoral value if ever there was one.

- oddjob

Wed Jun 29, 09:20:17 AM EDT  
 Anonymous blogged...

And that, in its soul, is why your infusion of a particular strain of Protestant ethics, ie. an un-Christianly, viciously crude Calvinist one, is simply unacceptable and always has been.

- oddjob

Wed Jun 29, 09:22:44 AM EDT  
 dread pirate roberts blogged...

will we have to retrain those ex-tomato growing humans in tomato growing when the shortage of petroleum cuts drastically into industrialized farming? just because a machine can do something that doesn't make that something "dehumanizing." the intrinsically centralized nature of modern mechanized and standardized agriculture makes it vulnerable to disruption by a shortage of input energy--read oil--and by plant pathogens. ask the irish what happens when everyone plants the same strain of potato and so all the potatoes grown get the same disease.

Wed Jun 29, 11:38:03 AM EDT  
 SB Gypsy blogged...

Here's a couple of observations:


The unemployment has stayed 5-6% over the last several years, a very comfortable rate....


- the rate that the Govt publishes is not the true rate - it's only the rate of those who are receiving benefits. There are many more people who are not employed, but their benefits have run out.

It also does not count those who are underemployed, like my stepson, who graduated with a business degree and who now does collections. Or my neice, who graduated with a degree in music, and cannot find a job as a music teacher, because all the schools have cut so far back on "unessentials" that there are no music courses in the schools (and this is Connecticut - one of the more affluent states)


Would you rather that such technology should be stymied so that the present employment balance can be maintained?


No, I love technology, I just think that the people in charge should
think of what they are doing, and put some money into real progress, and real training; before we end up a third world country, with a third world mindset and a third rate economy.

I read the other day that every baby born now has a $150,000.00 bill to pay, complements of the defecit spending of our oligarchy. The crash is coming, it's going to be worse than the great depression; and the idiots in power are either too dense to see it - or, they are doing it to us on purpose. They want cannon fodder.

Think what 300 billion dollars could have done to our economy if the powers that be had spent it on alternative energy and infrastructure, instead of war.

But we have a president who glories in his C average, thinks that armageddon would be a good thing, and wants to go steady with an arabian prince.





Is there any way out of this wilderness besides going thru hell?

These are the times that demand a Wraith for a guide....

Wed Jun 29, 12:27:12 PM EDT  
 SB Gypsy blogged...

Good Morning Dread Pirate.

Not to mention that tomatos with skins so thick that they can be harvested by machine are not the tomatos that I long for -

in thick slabs, warm from the sun, between layers of bread slathered with mayo!



...with thin - sliced spam on the side!

Wed Jun 29, 12:34:49 PM EDT  
 PeterofLoneTree blogged...

Uuhhh, Wraith,
Considering those short dissertations by oddjob, dread pirate roberts, and sb gypsy, we've decided it's okay for you to take a little time off if you so choose. The blog appears to be in good hands.

Wed Jun 29, 01:37:02 PM EDT  
 LindiBee blogged...

Why do people like Chris assume that only high-end, "white collar" jobs are created through our "tech revolution"? As a former Information Technology employee, (who is now working in the manufacturing sector as an optical lens coating technician) my jobs in I.T. never paid that well, although I greatly prefer that area of work. For every highly paid programmer, there are far more in the "pink-collar ghettos" of customer service, sales and Level One technical support. It doesn't take much to see that computer repair specialists will soon be where auto mechanics are now- and do you really want to be at the forefront of the next generation of grease monkeys?
I've worked part-time for many years as a banquet server at a major hotel here in town, and about a third of the staff are college educated people like me, some with advanced degrees, that can't get established in their areas of study, or find that they make more money here than in their fields. I've consistently made more as a server than in my professional work (from $14 to $17 per hour, sometimes more), so don't assume that education provides the competive edge. (I've been asked why I don't banquet server full time- the answer is, look at the people who have done so for 25 to 30 years. Most full timers are having surgery for knee, foot and/or back problems. Thanks but no thanks.)

Wed Jun 29, 01:45:06 PM EDT  
 DuWayne Brayton blogged...

Chris Meyers, You missed my point. I firmly believe that the labor best suited for machines should be done by machines. I was not trying to be critical but making the point that you had in your initial comment marked the shift in employment only to the white collar sector. In fact, the point I was trying to make is that I would like to see mechanization increase to the point that employment shifting cannot possibly keep up. I would love to se mass unemployment. In the short term this would brutalize a large portion of the population but in the long term I believe that we would shift ever further towards democratic socialism. It is akin to my desire to see the price of oil go so high as to be prohibitive. It hurts my wallet right now - and belive me my wallet is thin already - but in the long term it forces more focus on alternative energy. Thus the ends justify the means.

Dread Pirate Roberts,

I present you with my answer to the mechanized agri. As a theoretical excersize I designed a "plant" (no pun intended) that could be built on a river. The river would provide hydro-power. The facility would have a footprint of about 75 acres with several levels above and below ground. The machinery to tend the food production would be in the ceilings with catwalks for the occasional human to inspect the works and repair machines as necc. The entire floor could be devoted to plnting without thought to spacing for machine or people.

Initialy I designed it to grow food only. Soil and seed in one end one time produce out the other indefinately. I then expanded to include preperation of foods to come out the other end instead of just produce.

The next step was to discover just what technologies would still need to be developed to create such a facility. The remarkable thing I discovered was - there were none. All the tech necassary to build such a facility exist now. Infact with only minor changes in software that exists now even the programing exists to make this facility possible. In nearly every way it could be self sufficient. Even packaging made with plants grown inside could be made. After the initial crop the fertilizers needed and seeds would also be there.

This is just one example of tech sans petrol that could be performed with little to no human intervention. The neat thing about this idea to me is it also could beget expieremental facilities to develope multi-gen colony ships for interstellar travel. Sorry Dark Wraith - I'll stop proggressing further away than I already have.

DuWayne

Wed Jun 29, 02:06:11 PM EDT  
 DuWayne Brayton blogged...

Oh shoot the other point - DP Roberts, The reason I find most labor that can be done by machines dehumanizing is this. Man is a creature of thoughts and Ideas. Pushing a button or pulling tomatoes off the vine is not often conducive to Ideas - the most valuable of human traits. I'm not saying one can't have ideas while doing hard labor - believe me I do it all the time - it's just that6 by the end of the day one whos done hard labor has little energy to put those thoughts and ideas to any positive use. Thus thew dehumanizing factor 1. The second is that many laborors live under the threat of being replaced by machines if they don't work faster and better. Bing told to perform as well as machines is by it's nature dehumanizing.

DuWayne

Wed Jun 29, 02:16:55 PM EDT  
 SB Gypsy blogged...

Hey Treban,

Glad to see you here again!

I was going to say - you could make that factory into a space installation. I firmly believe that the answer to our coming widespread famines is to put our food production into space. Large toruses could produce veggies and fish, and allow more space on earth for humans (or wilderness - a better alternative in my mind).

This is one of the things that 30 Billion dollars could have helped to fund. Oh well, oil is more important (not).



It could be the ultimate gypsy caravan, don't you think?

Wed Jun 29, 03:44:11 PM EDT  
 Dark Wraith blogged...

SPECIAL COMMENT:

Good afternoon, good people.

I have been in the back room today cleaning up a mess that Blogger created. Even though I use that wretch of a service only to publish the articles and comments, it managed to wipe out about the last fourth of the code for this blog when I published the weekly poll this morning. It seems Blogger doesn't like to do too much work, and if a blog has more than a small amount of code, Blogger simply doesn't upload whatever amount goes over its limit.

Anyway, I rewrote the code to make it a little less taxing for upload, and I took the liberty of making a couple of tweaks, as well. One of them you're going to notice, and it might be a bit disconcerting at first; but rest assured, it should have a slight advantage over the old way.

Here's what you'll notice. From now on, when you click the "POST A COMMENT" link, the "Leave your comment" page will open in its own window instead of dragging the main browser to that page. This means you can post your comments, then close the "Leave your comments" window, and you'll be back on the main blog right where you were. You can click the "Refresh the Home Blog" link, and the blog will refresh so you can see the it with your newly published comment included. (Obviously, right when you close the "Leave your comment" page, you'll be seeing the blog as it was before you published your comment.)

I am hopeful that this doesn't cause too much aggravation. It's partly an efficiency matter, and it's partly a matter of making the technical dynamics of The Dark Wraith Forums a bit more like those of other services like HaloScan.


The Dark Wraith will return a bit later to re-join this comment thread in earnest.

Wed Jun 29, 03:57:39 PM EDT  
 SB Gypsy blogged...

Good Afternoon Dark Wraith,

My goodness, it works! (how sexy - new technology)

Wed Jun 29, 04:09:52 PM EDT  
 SB Gypsy blogged...

oops, when I clicked on main blog refresh, I got a page chock full of HTML, and a blinding white! aack!

Wed Jun 29, 04:13:30 PM EDT  
 My Pet Goat blogged...

The Dark Wraith will return a bit later to re-join this comment thread in earnest.

The Dark Wraith locks and loads.

In the meantime, Oddjob here's something for you.

Wed Jun 29, 04:20:51 PM EDT  
 Anonymous blogged...

Appears to be working here, too.

- oddjob

Wed Jun 29, 04:21:40 PM EDT  
 Anonymous blogged...

Ah, if only Mr. Goat!

- oddjob

Wed Jun 29, 04:23:09 PM EDT  
 SB Gypsy blogged...

ok I tried 3 times to get the html page again, and it's working fine. who knows?


My Pet Goat : lol that's a great pic!

Wed Jun 29, 04:23:50 PM EDT  
 Dark Wraith blogged...

Uh-oh, SB_Gypsy.

I'm going to try to recreate what you're seeing.


The Dark Wraith continues his tradition of thundering incompetence as a code writer.

Wed Jun 29, 04:25:21 PM EDT  
 Dark Wraith blogged...

Good afternoon, once again.

I'm running a comment through Firefox this time to see if I can recreate the disaster SB_Gypsy is getting.



The Dark Wraith prepares for the worst.

Wed Jun 29, 04:28:46 PM EDT  
 Dark Wraith blogged...

Okay, Firefox did the trick okay.

Next up is to simulate an overrun the Firefox cache. That was what was causing the same kind of mess Phoenician was seeing awhile back.



Here goes nuthin'.

Wed Jun 29, 04:31:45 PM EDT  
 Dark Wraith blogged...

Bingo!

Cache overrun makes the blog come out a ruined mess of code.

Now, that normally won't happen with Webpages in Firefox because it will just show an old version of the page that it has in its cache. However, on this blog, I have meta-tags at the very top of the code page that prevent browsers from using cached versions of the blog. The reason is to keep visitors from seeing the page as it was several days before and thereby assuming no articles or comments have been posted in the since their last visit.


The Dark Wraith will now quickly run through Netscape and Opera to make sure it's other wise working okay.

Wed Jun 29, 04:35:51 PM EDT  
 Dark Wraith blogged...

Good afternoon, once again.

Netscape and Opera both take the new trick without a hitch. However, if I cannot get a resolution of the Firefox difficulty, I'll probably back off and return the code to the old way of comment page loading.

SB_Gypsy: Let me know if this problem is persisting. You'll obviously have to do a couple of posts to see. And by the way, I genuinely appreciate you letting me know of the difficulty. Even though I can predict some effects, I just cannot on my own run every possibility; as such, I depend upon everyone here to tell me when I've gone too far in my misguided inspirations.

As a final note on this little episode, I do have a new feature in the works. It's something I hope folks will like and use. The unveiling will come some time within the next few days or so.


The Dark Wraith awaits SB_Gypsy's results.

Wed Jun 29, 04:53:27 PM EDT  
 Chris Meyer blogged...

Oddjob-- Actually, I always considered myself much more of a Keynesian than an Austrian. But whatever.

"The problem with your thinking is it synonymizes human lives with machinery as things to be discarded in the trash heap when no longer wanted, an immoral value if ever there was one."

I don't believe that I synonymize human lives with machinery at all. My goal is to improve the most human lives, and machines, while causing displacement for some, aid that goal overall.

So, it's immoral discard people when they are no longer wanted. What, precisely, would you have done with them? Should a boss that no longer needs a worker not be allowed to ever fire him?

I have no idea what this has to do with the protestant ethic we were talking about. We were talking about the protestant ethic of saving. Human value seems to have nothing to do with that.

To be clear I don't think the protestant ethic being infused is either a good or bad thing, just a curious one, like Dark Wraith said.

Dread Pirate Roberts--Bringing the peak oil phenomenon into the equation changes things quite considerably. Our technological infrastructure will have a difficult time indeed handling the shortage. This is a viable argument against expanding technological infrastructure. Other reasons presented thus far in this forum are not.

We seem to have developped a good handle on agricultural pathogens since the Irish famine of the 1840s, and I'm not very worried about them. Am I wrong not to?

sb gypsy--

"the rate that the Govt publishes is not the true rate - it's only the rate of those who are receiving benefits. There are many more people who are not employed, but their benefits have run out."

You are quite mistaken and I expect Dark Wraith will back me up on this. Unemployment is measured as those seeking employment minus those who have it. So if 100 million people want work and 95 million people have it, the rate is 5%. Benefits vary considerably by state and have nothing to do with the unemployment rate. They are given to people who have lost their jobs, not, for instance, to people just entering the workforce that can not find one.

What the unemployment rate does not consider are those people who aren't seeking jobs, for whatever reason. Perhaps they're in college, retired, or just gave up looking for one. It also doesn't include the underemployed as you mentioned, nor could it or should it, in my opinion. Because, I would venture, 90% of us aren't performing jobs that absolutely maximize our potential. My potential might be better maximized as a rock star or president, for instance, but not all of us can be that. Nor can all of us expect to hold jobs that take advantage of the maximum amount of training we have acquired.

In any case, other countries' unemployment rates are measured the same way, with the same flaws, and we're still much better off comparatively.

"No, I love technology, I just think that the people in charge should think of what they are doing, and put some money into real progress, and real training; before we end up a third world country, with a third world mindset and a third rate economy."

Can you expand on this? Because I still don't know what you want done. What is the real progress and real training you're talking about, as opposed to the fake progress and training?

"I read the other day that every baby born now has a $150,000.00 bill to pay, complements of the defecit spending of our oligarchy."

Well, that's wrong. Perhaps you added an extra zero? $15,000 is a lot closer.

"Think what 300 billion dollars could have done to our economy if the powers that be had spent it on alternative energy and infrastructure, instead of war."

I cherish the thought.

Lindibee--

"Why do people like Chris assume that only high-end, "white collar" jobs are created through our "tech revolution"?"

I thought I clarified thoroughly that I don't, but I'll try again.

Tech revolution does not create only white collar jobs, but white collar jobs are created only through tech revolution. The more tech revolution, the more white collar jobs.

The original displacement will push some people to non-white collar jobs, like our tomato workers being pushed to gardening. It also increases the overall productivity and wealth of humanity, increasing jobs in other areas, like waiters and construction workers. And lawyers and doctors and whatever. The increased wealth from more tomato production is individually only a small contribution to more white collar jobs, but taken on top of all the other myriad technological innovations that add to human productivity and wealth, it forms the very foundation of the white collar community. The white collar community could not be sustained without the technological innovations of the past, and it will not likely expand without more.

Duwayne Barton-- Your point was fully understood the first time you made it, I just didn't respond to each aspect of it.

I, too, want to see oil prices continue to rise, hopefully to encourage more conservation and alternative technology before the oil supply collapses.

What you're saying about machines being dehumanizing doesn't make any sense to me. If you want to encourage ideas, then you should want as much mechanization as possible, so that humans need not spend so much of their effort on manual tasks and can afford more time on non-manual ones.

Wed Jun 29, 05:09:05 PM EDT  
 oldwhitelady blogged...

Dark Wraith - It sounds like you had one heck of a day. I wanted to see the fix everyone's talking about, too. Hey! This is neat!

Wed Jun 29, 05:58:15 PM EDT  
 Dark Wraith blogged...

Good evening, Old White Lady.

You ain't seen nuthin', yet. I have a couple of projects on which I'm working to make this hotel even better. (And, no, I'm not talking about installing a jacuzzi. I'm not at all sure people are ready to see Mr. Goat doing those famous belly-flop dives of his at the deep end.)

The projects won't be changes as much as they'll be enhancements and additions. I shall leave the hinting at that and just get them finished so everyone can enjoy hanging out at The Dark Wraith Forums even more.


The Dark Wraith now gets busy for the evening addressing comments.

Wed Jun 29, 06:34:08 PM EDT  
 DuWayne Brayton blogged...

Chris,
That was my point entirely. Making people try to compete with machines is dehumanizing. Let the machines do it instead. I want the machines to do it. I do not think humans should do work better suited to machines. Over all I wuld like to see machines displace workers at a pace that cannot be kept up with by the creation of other venues for useless employment. The service industry is entirely inadequate to cover the displacement. I would like to see the forced increaase in socialism that would result.

I do have issue with the idea that it's so simple to replace the job lost. For example; take an auto industry worker. S/he has worked for GM for 12 years. In that 12 years pay has gotten up to $34 hourly. An income somwhat over $70,000 without overtime. S/he also gets great benifits. Now the job is replaced by a machine. The next best option is to go to work at the piercing hut in the mall. S/he is allowed to work 32 hours a week @ $7.36 hourly. Annual income is $12,247.04. No benefits offered or if they are its at a cost of $30 per week. Now thhe annual income is $10,687. Big drop from 70,000. Not all of them are so extreme but you get my point. My general impression is you follow a more Malthusian school of econ.

Wed Jun 29, 06:54:31 PM EDT  
 AuntieRoo blogged...

In this discussion there seems to be a mindset that employment in white collar jobs is or should be every manual laborer's dream job.

Certainly those who do manual labor would want the income earned by white collar workers. And most certainly those who are driven to compete with the production of machinery would prefer to not be pushed beyond human endurance.

But what about those who prefer to work with their hands, who get satisfaction from physically producing something of value? After all, humans are not merely creatures of ideas but are also physical creatures in a physical world. What is their place in this society? Are they to be servants to those who have more money?

And what about the people who don't have the intellectual capacity to gain the education to be white collar workers? What do they do to earn a living?

Wed Jun 29, 07:19:09 PM EDT  
 Chris Meyer blogged...

I see, I did misread the post. Perhaps it was because you saw "pushing buttons" as dehumanizing, which made me think of manual labor that could now be replaced by button-pushing, but instead you meant the machines can push the buttons.

It's not simple at all to replace a person's job. It is often painful and disruptive and sometimes results in those displaced getting worse jobs. But it's still better than keeping workers where they are unneeded.

The example of the GM worker you doesn't evoke much sympathy in me, I guess. Someone who was rich and isn't anymore.

I disagree with any theory I've ever heard supported by Thomas Malthus. What did I say that reminded you of him?

Wed Jun 29, 07:24:25 PM EDT  
 Chris Meyer blogged...

Auntie Roo, what is important for distributing human resources, in other words, who should work in what field, is not what type of work a person would like to do, but what type of work is demanded. If everyone did what type of work they wanted to do instead of what was demanded, we'd have a country of rock stars, porn stars, and presidents.

So the manual laborers enjoyed their jobs, but now those jobs are no longer demanded. Now more white collar jobs are, because demands have shifted, or increased, now that products of manual labor are easier to come by. The point is not that one field is superior to the other, (although I would say that it is) but simply that the demand shifts somewhere else.

Some manual workers don't have the intellectual skills demanded for white collar jobs. So they don't get them. And they go wherever else they are demanded.

Wed Jun 29, 07:34:37 PM EDT  
 Dark Wraith blogged...

Good evening, Auntie Roo.

I'm going to start my comments this evening by noting the importance of the point you make: it is not the case that everyone does or even should aspire to a white collar job.

There was a time when unions were powerful enough to impose upon the economy a respect for the value of the marginal product contributed by people who worked in blue collar professions.

More importantly, as I shall explain below, the idea of "human capital" being the transformation of raw "labor" does not mean blue collars becoming white collars. This is important to understand: a laborer is on a learning and skills development curve every bit as much as a kid in college; and in some ways, the transformation of labor into human capital for a "laborer" is a more complex and subtle process involving not only intellectual development and refinement, but also psycho-motor skills development and refinement.

This points to an importance in recognizing just how valuable the experienced and seasoned blue collar worker is to the production process. To dismiss this powerful component in the complex make-up of the working class is to ignore and to deny proper compensation to its constituents. The idea among some college educated people (especially those who never worked at hard labor before entering college and then the white collar workforce) that there is a "lesser" class of workers that wants more than anything else in the world to be just like the white collar folks is not merely elitist; it's class warfare written on the brains of those who control the purse strings of business compensation structures for the employees of different productive skills and, therefore, social standing.


The Dark Wraith will proceed, below.

Wed Jun 29, 07:46:28 PM EDT  
 Chris Meyer blogged...

Dark Wraith--

How valuable a person's work is depends upon how much other people value it, how much they demand it, not how complex it is.

Wed Jun 29, 08:01:40 PM EDT  
 Dark Wraith blogged...

Good evening, Chris Meyer, and thank you for returning to The Dark Wraith Forums.

Allow me to predicate the main body of this response with what might seem at first blush a bit of an off-topic autobiographical note.

I teach economics and business courses at the college level. With respect to the business courses in my typical schedule, I specialize in finance, primarily because that was one of the dominant fields of my study and of my professional work as a business consultant for many years.

When I teach economics and business courses, I make two things clear up front to the students: first, I am a conservative; second, I am no conservative cut from the cloth of the current breed that diminishes the old-time conservatism that had matured into a meaningful force ever so briefly in the middle to later decades of the last century.

I teach that self-interest is the most powerful and compelling force on Earth. Focused into market activity, no greater efficiency, technological progress, or hope for the future can be constructed from the theories and dreams of men.

Contrary to the claim of the character Gordon Gecko in the Oliver Stone movie Wall Street, greed is not "good"; but neither is it, as some liberals would bray, "bad." It is merely the nature of humans, and it is reflected in the very foundations of the institutions they create.

That we imagine a world other than one propelled by greed speaks perhaps to our better nature, and we institutionalize circumscriptions upon greed through our bodies of law, our religious myths, and our communal rituals.

We are, however, driven at our very core by greed. After all is said and done, greed is what gives humans their life and spirit.


The Austrian School of Economics set a model for broadly dividing the factors of production into five groups:

· Land: the physical platform upon which production of goods and services is to take place. The compensation to land is, in a gross way, the rental rate per square unit of that space. To one extent or another, all production requires some amount of land.

· Physical Capital: This is the buildings, machinery, vehicles, and other inanimate objects that alter the goods and services at one stage of production into goods and services at the next stage of production. The compensation accruing to physical capital is generically label the "physical capital rental rate," and this of course varies depending upon the relative scarcity of and need for the type of physical capital under consideration.

· Labor: This is brute, human physical strength pressed into service to convert its potential energy into the kinetic energy of the transformation of goods and services at one stage of production into goods or services at the next stage of production. The compensation to labor is the "wage rate," and this varies somewhat, but not nearly as much as one might think based upon observation of different "wage rates" accruing to different types of laborers. In fact, variations in wages are the result of relative levels of scarcity for labor infused of different types and amounts of human capital.

· Human Capital: This is the human being in his or her configuration as a set of learned skills, some of which may have been instilled through formal education, others of which have been instilled by experience in productive environments. The compensation accruing to human capital is woefully under-analyzed in intermediate microeconomics principles and intermediate courses, since human capital is speciously lumped with labor when push comes to shove in exploring "labor markets." In truth, the compensation accruing to human capital is any wage rate or salary that is above the compensation required to secure the services of a human serving as brute labor.

· Entrepreneurial Skill: This is the willingness and ability of a person or group of individuals acting in coordination to bear the risk of bringing together the other four factors of production in some combination to the end of transforming raw materials into goods and services. The reward to entrepreneurial skill is "profit," and that profit must be sufficient to induce the people organizing the factors to bear the risks and overcome the opportunity cost of what they give up to engage in their profit-making enterprise. Many are the textbooks that claim entrepreneurial skill is peculiar to market economies, but that is incorrect: humans throughout history and across the various types of economies—traditional, command, and market—have deployed entrepreneurial skill, with or without sanction of governing authorities of the time and place.

Now, having set forth the traditional view of the classes of factors of production, the Austrian School's method of analysis can be seen. Due recognition to peculiarities in several of those factors is given. Land is unusual because of the physical impossibility of mobilizing it to a location of greater productive benefit. Physical capital is unusual because of its particular sensitivity to macroeconomic drivers like interest rates. Entrepreneurial skill is prized in the classrooms of universities in market economies because of its unrelenting drive for efficiency in mixing the other four factors of production to maximize profit.

Labor and human capital are unusual, but their specialness is poorly investigated in the economics that has flowed from the wellhead of the Austrian School economists. You see, Mr. Meyer, labor and human capital are intimately and inextricably related: "labor," by its very nature as productive of humans, is always becoming human capital. At the very moment that "labor" would be secured in employment, it begins or continues a transformative process within itself of becoming human capital. That this inevitable and accumulating greater value was and still is inadequately reflected in compensation is irrelevant: the economic model that leads to the famous equation stating "the wage rate equals the value of the marginal product of that labor" misses the positive externality built into the employment of people instead of machines in production.

People learn. But more importantly, their learning leads to situation-specific reactivity to their world in general, and to their workplace in particular.

So, all of this sounds like general and useless nonsense thus far. Bear with me while I take you down one more useless path before bringing the trails together to a very practical roadway for the future.

Classical economists are entirely unconcerned with the "short-run." As long as the economy is on a long-run, secular path of growth, there is no need for government intervention, which can only distort the efficiencies that market participants will find by their own devices, driven as they are by personal greed that leads to long-term good for the economy, for society, and for humanity, itself.

The Keynesian revolution was largely a repudiation that only the long-term is of any concern to the enlightened people. For one thing, before the time of Keynesian intervention, recessions and depressions ran not for months or quarters, but for years or decades. Mr. Meyer, I as a man learnéd in Medieval history, can tell you about stunning depressions that ran across centuries. These economic disasters were not merely a tragedy for millions and millions of people across multiple generations; they were of such catastrophic depth that the production possibilities frontiers of countries in Western Europe literally contracted, and they did so massively. Technological know-how the Romans had mastered to the level of modernity were completely lost, as was an enormous body of medical knowledge developed by the Romans and the Greeks before them. The fields of building technology, medicine, metallurgy, law, religion, astronomy, physics, chemistry, and untold others were evicerated in the wholesale plunge of Western Civilization into the so-called "Dark Ages" that followed the end of the Classical Age.

That economists of the Austrian School can ignore the human suffering of protracted, decades-long recessions is nothing but a tribute to their cold-heartedness, something about which I don't care. But for them and their intellectual heirs to pretend to this very day that long-term growth is at its most efficient when economies are allowed to swing wildly in growth patterns of their own nature is intellectually dishonest. That is not the most efficient means of achieving optimal macroeconomic growth. The Keynesian way is better, and I shall challenge any economist to show me that the Keynesian era's tight control on the boom/bust cycles didn't produce both less human misery and a steeper growth path of economic prosperity here in America.

Now, for the final point. Labor learns how to become more human capital in its productive configuration. Human capital includes skills of all kinds; and as the product of the human spirit, it is every bit as greedy as entrepreneurial skill. It wants what it can get; and even if its action to maximize its welfare are foolish in the long run, there is no stopping labor from making what efforts it can to get its reward.

Human history has been a litany of successes in suppressing labor as it became human capital, especially when that human capital took on the ferocious feature of demanding greater compensation. Long ago, one rebellion after another was crushed. History is full of examples, from the brutal crackdowns and resulting "decimations" in rebellious platoons of the Roman Legions to the social upheaval that led to the Peasant Rebellion of which I wrote in "The Ancient Future".

Unfortunately for the Classical economists and their desire to treat labor as merely a substitute (and a rather expensive one, at that) for physical capital, labor has become more and more successful at turning the historical legacy of defeats on its head. Sometimes, these movements are now, in some facile retrospect, couched in what silly sociologists call "complex" socio-economic and political terms; but at the end of the day when one of these revolts was happening, it was about economics: money; job security; benefits; opportunities; elimination of risks; and most of all, power over destiny. The supply of labor curve was no longer some flat, perfectly elastic dead zone waiting for the labor demand curve to set the unemployment rate.

That meant someone needed to look at what labor really was; and unfortunately, Karl Marx was about the only one chose to walk away from the Austrian School paradigm to look at labor in its inherent capacity to refuse to surrender its productive worth to entrepreneurs. But more importantly, Marx pointed out that labor could—by virtue of learning about its position and its ultimate fate—turn not just the economy on its head, but the entire social and political order, as well.

While the Classical economists were still strutting about cheering as President Hoover sent mounted troops into peacefully protesting crowds of disabled World War I veterans to hack them with swords and torch their belongings, the world was moving forward, and labor was becoming the most fearsome kind of human capital on Earth: it was learning that there were alternatives to a world where governments don't give a damn as generation after generation of the working poor starve and die: there was Communism.

And mark my words, Mr. Meyer, if the neo-cons don't stop playing with the inevitabilities of history, this nation will sooner or later be brought to its knees by those who have nothing to lose but the prospect of endless "re-alignments" and "adjustments" and "substitutions of physical capital for labor" and "it'll all work out in the long run."

As John Maynard Keynes said, "In the long run, we're all dead"; but Mr. Keynes didn't even come close to the fate that is worth than death:

The engines of repressing the working class might very well be getting better and better; and the neo-conservatives might very well believe that nothing can stop their vision for a return to the good old days before workers controlled their own destiny; but I'm putting my money on labor winning in the end.

After all, labor is always learning how to become human capital; and one way or the other, human capital will get its just compensation. Just as the Classical economists would have imagined, this will certainly happen the long run.

After all, greed really is what gives humans their life and spirit.




The Dark Wraith has spoken.

Wed Jun 29, 10:19:54 PM EDT  
 oldwhitelady blogged...

The Dark Wraith has spoken.

and beautifully, too. *clap* *clap* *clap*

Wed Jun 29, 11:29:52 PM EDT  
 lenin's ghost blogged...

dark one....i prefer not to use the term 'greed'. i'd rather see people as 'goal oriented'. many peeps work hard to improve the lives of others with little financial compensation. others go for money or power or whatever their goal may be.
early techno-wonks thought progress would create a society of leisure. when technology saves labour and makes a product cheaper, people should have to work less to achieve a similar lifestyle. this, in theory, should create work for the layed off because of said technology....worksharing......more leisure time for everyone......

what the hell happened?

some greedheads broke the social contract!

Thu Jun 30, 12:59:33 AM EDT  
 DuWayne Brayton blogged...

Chris,

Let me preface with, I am very tired. I have had my 3yr old son and my 4yr old nephew most of the day. I am going to do my best to explain why you reminded me of Malthus. I would also like you to keep in mind that I would like to see more jobs automated out of existence - likely for very different reason than you - I could be mistaken about that. I invite you to visit my blog Saturday as I am working on a post about that very motivation. Suffice to say I believe capitalism is going to destroy humanity and this planet as we know it if we don't outgrow it first. Right now I will stick more on topic.

The major underlying theme in Malthus work is his usumption that when a person is no longer contributing to society their usefulness is at an end therefore their life should end. You are saying exactly the same in regards to jobs. The flaw in that theory, and those of Malthus is the assumption ofuselessness. Simply put - you need to look beyond the obvious to see the value whether a human life's use to the society or un-needed worker to the economy as a whole.

Lets take the example of the GM worker. Lets assume he is a home owner. He worked for GM 2 years befor buying a house. He took on a thirty year note for $180,000. He has a good job so why not? He will on occasion need to pay for maintenance on his home. He is a consumer in other ways as well. He buys goods and services that a person making $13,000 cannot ever afford. His job makes a far more substantial impact on the economy as a whole than he probably makes on the company he works for. When you multiply his lost job by many others laid off you will send ripples across the economy on the whole. Others who are displaced the the job losses incurred at his company won't be consuming the products his company makes. Thus I believe a lot of jobs remain in the hands of people who are not essential to the company in a direct fasion - so that they can artificialy inflate the economy. I agree that this is stupid. In the long run the artifice breaks down. Case in point - GM. In the plant my dad works as a construction safety supervisor they make transmissions for a vehicle that provides GM a profit of under $800 to it's shareholders. They pay out $2,300 per vehicle produced to cover pension packages for retired GM workers. They pay $1,100 per vehicle to cover health care for retired workers. $3,400 and they havn't covered the folks who actually built the vehicle yet. What do you suppose they're to do in 25 years when they have cut into the profit on the vehicles they build even further? They won't be ding anything because they will be gone. The government and insurance will be covering whatever they can and retirees who were promised a lot more will be working at wal-mart to supplement.

And your lack of sympathy for the rich. Seventy grand a year isn't rich. Thats coming from a guy who made more than twelve but less than fifteen last year. I don't bitch much because its my choice. The problem is that some one making seventy has probably grown accustomed to owning a home and having a car that doesn't break every few months. They don't live in the Taj Mahal or have servants or an enterage. They are middle class. I advocate moving more people out of poverty - not sending more to it.

DuWayne

Thu Jun 30, 01:24:14 AM EDT  
 oldwhitelady blogged...

Good evening, Dark Wraith.
This has happened before...
Does this happen to anyone else? When I go up to Edit, pick find(on this page), enter the word or phrase being looked for, click on "find next", I get the "program not responding, and kicks me out of the session.
If I enter the word or phrase and hit press the enter key, it takes me to the word or phrase.

Anyway, this is the phrase I was looking for:

This takes that bifurcated world of the future right off the table.

No, I didn't know what bifurcate meant. However, I did look it up and I can say, "I do now."

Thu Jun 30, 01:36:42 AM EDT  
 Dark Wraith blogged...

Good evening, Lenin's Ghost.

That which we call a rose by any other name would smell as sweet.
           William Shakespeare
           Romeo and Juliet
           Act 2, Scene II


I do love thee so,
That I will shortly send thy soul to heaven...

           William Shakespeare
           The Life and Death of Richard the Third
          Act 1, Scene I

Screw the benefits, man, I just need a job! ANY job!
           Computer Science major
           Getting Part-time Gigs
           Act 2005, Scene Computer Temps R Us

Thu Jun 30, 01:36:58 AM EDT  
 Dark Wraith blogged...

Good evening, Old White Lady.

Geez, I didn't realize that problem was happening on this blog, too. I've seen that happening elsewhere on blogs, and I was kind of curious about what was causing it.

Now, I really need to find out. I know exactly what you're talking about: you try to use EDIT, then FIND; but as soon as you start the search, the browser just spins into the ground.

I am suspecting that it's one of the javascripts that's causing the problem, but I'm not sure which one. I have only a few running, now, and all but one are nothing but old-fashioned "event handler" types, which are as tame as pussycats.

It might be something else, so I'm going to have to do some research. Eventually, I'll put up an internal search engine. I had to take down the freebie one by Google for a couple of reasons: first, it wasn't doing a very good job of running internal searches; and second, I had a really strong suspicion that the code had a tracking feature in it to which I have no intention whatsoever of exposing the people who come to this blog.

One way or the other, I'll figure out what's causing the glitch.


The Dark Wraith thanks you for pointing this problem out.

Thu Jun 30, 01:48:02 AM EDT  
 SB Gypsy blogged...

Good Morning Dark Wraith,

Thank you for that inspiring post - I really needed that!

To Chris Meyer:


"I read the other day that every baby born now has a $150,000.00 bill to pay, complements of the defecit spending of our oligarchy."

Well, that's wrong. Perhaps you added an extra zero? $15,000 is a lot closer.


Actually, the $150,000.00 is the correct figure. You can read the whole article A Glide Path to Ruin byline: Kristoff in the June 26 New York Times.

Here's the relevant quote:

"President Bush has excoriated the "death tax," as he calls the estate tax. But his profligacy will leave every American child facing a "birth tax" of about $150,000.

That's right: every American child arrives owing that much, partly to babies in China and Japan. No wonder babies cry. "


and also:


"No, I love technology, I just think that the people in charge should think of what they are doing, and put some money into real progress, and real training; before we end up a third world country, with a third world mindset and a third rate economy."

Can you expand on this? Because I still don't know what you want done. What is the real progress and real training you're talking about, as opposed to the fake progress and training?

Actually, Our President did alot of talking about job training to replace the jobs lost in the first two years of his presidency. He hasn't been talking about it much lately, because there are no job training programs, only cuts to existing programs.

The 300 billion that he spent on the war ( a war that he started because he wanted to, not because Iraq had anything to do with terrorism or 9/11 or WMD ) COULD have been spent on building plants to turn crop waste to ethanol - one expert estimates that if we did that to all crop waste, it would create enough diesel fuel to free us of foreign oil.

It COULD have been spent to build electric trunk lines to the parts of the country that have abundant solar and wind energy available. I have stood on the plains of Oklahoma, where the winds blow & blow & never stop. A wind expert estimated that we have enough renewable energy in the wind on the Great Plains to rival what the Saudis pump out of the ground every year.

I have stood in the desert under the blue skies of New Mexico, and Arizona, and California's Mojave Desert, and there are hundreds of square miles of (mostly) empty sand that could have renewable solar energy extracted to power the whole southwest. We need the cables laid & the panels set.

We have coal deposits that will last many years, to generate electricity. We just need the stacks cleaned up, the smoke scrubbed from the exhaust.

Instead of all these forward looking, industry building, job creating technologies, our president chooses to throw billions of dollars at the oil industry, to squabble over the dregs and tatters of a dying, death-dealing resource.

He chooses to throw billions at a horrendously polluting nuclear industry







The Gypsy thinks he should be prohibited from playing with toys he cannot even pronounce the name of.

Thu Jun 30, 02:57:40 AM EDT  
 Dark Wraith blogged...

Excellent, SB_Gypsy.

Just excellent.



The Dark Wraith does love the crowd at this seminar.

Thu Jun 30, 09:27:24 AM EDT  
 Anonymous blogged...

The Protestant ethic I referred to wasn't about the virtues of saving (which I would never quibble with), but rather about the belief that being rich necessarily indicates one has the favor of the Divine. This theological thought famously associated with disciples of John Calvin plays out in pernicious ways better explained by Dark Wraith in his very educational essay from last night than in anything I am able to write. Unfortunately, many of this country's founders and settlers were quite Calvinist, and the thinking associated with it shows up persistently in our history, for better and also for worse.

As to whether an employer should or should not be allowed to fire someone who is no longer needed, I would say you are not looking at the matter from the perspective I was. I don't believe the employer should be forced to function inefficiently, but to force the government to be run as a business is to force it also to make no allowance for displaced employees.

Did you say you believed government ought to be run as a business? No.

Does your point of view imply it since it is only concerned with the efficiencies of classical economics (nowhere does your writing suggest you approve of Keynes, but rather those who vehemently opposed him)?

I think so.


One other thing:

We seem to have developed a good handle on agricultural pathogens since the Irish famine of the 1840s, and I'm not very worried about them. Am I wrong not to?

It's true that we don't suffer as we might. It's also true we suffer more than we realize. Have you ever heard of the American Chestnut? If not, if your family has been here since the 19th Century I can assure you your ancestors most certainly had. There was a time when it was estimated that fully one fourth of all deciduous trees east of the Mississippi were American Chestnuts. The benefits we reaped from this tree were enormous. It's seed yield (nuts) was the primary source of forage for large numbers of our forest animals, ranging from black bears through deer & turkeys, down to moths and beetles. While those animals still exist, there's no telling how many more numbers of animals might be were the tree still here. (So much for the ecological/forest health argument. Onwards.) In addition to the usefulness of the nuts, the tree produced a very long, straight trunk with little branching until relatively high off the ground, and this long bole also was made of a wood that was unusually rot resistant. It also was a beatiful color and easily worked into furniture. Because of its rot resistance it was the preferred wood for fenceposts. No wood we now have is quite as rot resistant as that was. If we had not lost the tree there is little doubt what our patio decks would be made from, and it wouldn't be primarily redwood the way it is now.

While I very much doubt it would be used this way now, when it was abundant its bark also was used by tanners as they made leather.

It is only just now, 100 years after the unexpected and unwanted introduction of a Eurasian fungus known as Chestnut Blight that researchers have managed to create some hybrid chestnuts with the resistance to blight exhibited by the Eurasian chesnut species (which co-evolved with the fungus and so are mostly resistant to it). It may be that in the next 50 years the American Chestnut (in a hybridized form that will be almost identical to the original, except for the introduction of the new genes) will again become a part of the forests of the Eastern US.

Unfortunately, while that happens, we may well be losing our ashes to another Eurasian insect, one only just recognized as a pest within the last five years.

We also may lose many of our oak trees, and many more plants besides. This disease was first noticed in California, but it has spread elsewhere.

I know what you mean about the successes (& there is merit to the comment), but if you worked for the states of California or Florida, where they routinely find new, exotic plant pests, you might not feel that way.

- oddjob

ps: I'm not in a position to evaluate the info. very well, but I also believe I've read educated speculation suggesting that the pesticides we use to control unwanted pests may at the same time be responsible for a documented decline in male fertility, both here and in other developed nations.

Thu Jun 30, 01:16:58 PM EDT  
 PeterofLoneTree blogged...

oddjob wrote:

"Because of its rot resistance it (chestnut) was the preferred wood for fenceposts. No wood we now have is quite as rot resistant as that was".

PoLT responds: Was it superior in this regard to the Osage Orange?

Thu Jun 30, 02:37:27 PM EDT  
 Anonymous blogged...

PoTL, I very possibly stand corrected on that particular comparison. I have read before what I wrote, but I don't know if the assertion considers osage orange. For a personal experience with that wood, read the end of this discussion thread. As the writer mentions, osage orange (while incredibly rot resistant) isn't a useful tree for lumber (branches too low, never gets very tall, never gains much girth), whereas American Chestnut was supremely useful.

- oddjob

Thu Jun 30, 04:30:25 PM EDT  
 AuntieRoo blogged...

Good Afternoon Dark Wraith -

Thank you for writing a thorough response to my concerns about the elitist attitude towards labor.

Unfortunately, many people do not recognize the value of any labor that is not labeled as white collar. So-called manual labor has an intrinsic value to those of the personality type that values working with concrete instead of abstract concepts.

Non white collar jobs are also essential for white collar workers to be able to perform their functions.

As an example, think of all the people who provide the support for a neuro-surgeon to be able to repair an aneurysm in a patient's brain. I'm not talking about the well paid staff in that OR but the people who labor to provide the electricity and the water to the hospital and that OR. Even the technicians who check and calibrate the electronics in use and the lowly cleaning staff who insure a sterile (we hope) atmosphere for this surgery are of vital importance.

It is a terrible mistake to only value white collar work. All of us are laborers and we should stand together to make sure that all labor is valued.

When we demean one type of labor, we demean all labor.

The Gypsy thinks he should be prohibited from playing with toys he cannot even pronounce the name of.

Gypsy, I'll add an amen to that!

Thu Jun 30, 04:45:47 PM EDT  
 dread pirate roberts blogged...

long thread, great discussion.

about the tomatoes---uc davis even developed a square tomato for more efficient packaging.

about manual labor----the skilled variety with which i have experience is residential carpentry, actually all phases of residential construction. while there are days of repetitive work, there are days of abstraction solving problems that architects don't consider. very abstract. also very satisfying and a healthy lifestyle if one can work at a reasonable pace. and one needn't go to a gym to workout doing meaningless exercise.

Thu Jun 30, 05:21:24 PM EDT  
 dread pirate roberts blogged...

hi ♠Dark Wraith♠

success with the especial character!!! at least in preview. mmmmm, view source code.

Thu Jun 30, 10:50:24 PM EDT  
 oldwhitelady blogged...

Good evening, Dark Wraith.
Did you work on the FIND problem? I opened it and put a word in to find. I pushed find next. It went to the word, but then, nothing... it was not responding. You probably didn't have a chance to look into it, yet, though.

Heya dread pirate roberts - I found that cutting and pasting his name ♠Dark Wraith♠ works best:) Then, I don't have to remember what characters to type to make the little spades.

Fri Jul 01, 12:45:15 AM EDT  
 My Pet Goat blogged...

Congradulation Mr, Wraith, this has to be the longest thread I recall here, and nary a whisper of Spam. Let's make it a bit longer.

One subcategory (if you will) of tax not touched upon is the so called sin tax. Specifically the additional tax levied on such thing as tobacco and tequila.

The idea of spotlighting and taxing at an higher rate the items that people crave or are addicted too is horseshit to me, but others don't seem to care. (Now a significant sin tax on petroleum consumption I would agree with, if there were parellel efforts to advance conservation, etc.)

That said, I have a problem with those who deem a sin tax as regressive on income. Does anyone (other than himself) really care if Joe Camelus pays a higher percentage of income toward a gross habit like smoking or chugging Bud?

Mr. Wraith, as an educator, how do you define fairness for your students in relation to taxes?

Fri Jul 01, 01:35:04 AM EDT  
 Dark Wraith blogged...

Cripe, Mr. Goat, I used to avoid discussing "fairness" in an economics class like I'd avoid the Plague.

Actually, I shouldn't say that. Although "fairness" has always, always been an off-limits subject in economics, the tide is turning, now, because of some theortetical and empirical developments that have kicked the snot out of the old idea that economics shouldn't address "fairness" because of its normative subtext.

As it seems to be turning out, not only has the relatively new sub-discipline of "empirical economics" shown quite convincingly that rational economic decision-makers can use "fairness" criteria that swamp what would otherwise by purely "objective," "rational," economic motives, but game theory is pointing right at how these "fairness" kinds of criteria in decision-making work and how they affect outcomes.

It's pretty cool stuff, and it has forced me to deal with it in classes. In fact, I've been working on a set of demonstrations so students will be able to see how rational self-interest and sensibilities about and expectations of fairness play off against each other in some minor simulations. I haven't finished working up the classroom treatment fully, but it's something that's gotten me kind of excited.

Now, with respect to your question of fairness in taxation, allow me awhile to think about how to answer that because my answer even just a couple of years ago would have been substantially different from my answer now. Given that the word "fairness" is no longer tantamount to profanity among at least some economists, I have more latitude to address the concept, provided I don't go into some emotionally rhetorical diatribe (which I've been known to do on occasion).

Let me think about how to respond while not going off the deep end.


The Dark Wraith grinds the brain cells together.

Fri Jul 01, 02:52:57 AM EDT  
 My Pet Goat blogged...

Fair enough. To give you a hint as to why I asked the question, I recently read something in passing and wondered if if was an "accepted" defintion. In this case, the statement was made that economists define fairness relative to productivity.

I'll leave it at that, as I too wander to count sheeple.

Fri Jul 01, 03:29:53 AM EDT  
 Chris Meyer blogged...

Dark Wraith--
Much of what you wrote was familiar to me, with minor differences. For instance, I learned that there were four factors of production: natural resources, labor, technological knowledge, and physical capital. Human capital fitting in with tech knowledge, land with natural resources, and entrepreneurial skill kind of an oddball.

"the economic model that leads to the famous equation stating "the wage rate equals the value of the marginal product of that labor" misses the positive externality built into the employment of people instead of machines in production."

Hmm. A social externality you say? Perhaps you can explain this externality more. But the logical solution to any externality is to internalize it--subsidies if it is a positive externality, penalties if it's a negative externality, e.g. subsidies for education, because a more educated populace is a positive social externality, and taxes on gas, because the pollution cars emit is a negative social externality.

I agree that greed is neither good nor bad, it's just the way it is, and that self-interest is the greatest motivator known to mankind.

I firmly believe that governments can improve market cycles in both the short and long run. This is why I call myself a Keynesian.

You fear that what the neocons will bring the nation to its knees if they continue what they are doing. In terms of job realignment, substitutions of physical capital for labor, etc., I guess I don’t know what you mean. What is it that the neocons are doing that is causing these realignments and replacements? Do the neocons support more machines while the Democrats support human labor instead? Please explain what policies of the neocons you are targeting and what you want changed.

DuWayne—

“The major underlying theme in Malthus work is his usumption that when a person is no longer contributing to society their usefulness is at an end therefore their life should end.”

Goodness, I don’t believe that at all. In addition to disputing the definition of “uselessness,” I dispute the assertion that a person ought to be valued based on their contribution to society, as though the individual owes something to society, which I do not believe it does.

Of course, a person might be totally useless to a company, and that’s quite different.

$70,000 for a household is well above the median, upper middle class to be certain. $70,000 for an individual is an upper class income. A couple that makes $70,000 each will pay into the highest tax bracket. And if the second individual doesn’t work, then that’s a luxury. I call $70,000/yr rich.

“I advocate moving more people out of poverty – not sending more into it.”

I had to chuckle mildly at this. It sounds to me like “I advocate goodness.” Of course, we’d all like to see more people out of poverty than into it, but in a fluid economy, you’re going to get both.

SB Gypsy--

That is odd indeed that the NY Times would publish such an erroneous figure. I can’t fathom what mathematical trick could come up with a number so outlandish. Perhaps that is the estimated figure a person born today would contribute to payments over his lifetime? It is impossible to predict how long such a lifetime would be, what the debt would be, and how much $150,000 would be worth over the time period, thus such a number would be nothing more than an almost random guess. The only meaningful number would be how much of a burden a baby born today would carry, and, according to my econ textbook:

“The U.S. federal government is far more indebted today than it was two decades ago. IN 1980, the federal debt was $710 billion; in 2002 it was $3.5 trillion. If we divide today’s debt by the size of the population, we learn that each person’s share of the government debt is about $13,000.”



“The debt of the U.S. federal government is about $13,000 per person. A person who works 40 years for $25,000 a year will earn $1 million over his lifetime. His share of the government debt represents less than 2% of his lifetime resources.”

The book was published in 2002, and Bush has contributed significantly to the deficit since, about enough to make the average debt per person $15,000 a year. This leads me to believe that the figure in the NY Times most certainly had to be a typo.

Perhaps Dark Wraith, being the expert he is on such things, can offer some insight?

I can support job training programs. But do you really think they’ll make a big difference?

Nuclear energy has its disadvantages, but I’d still choose it over coal. The pollution is dangerous, but concentrated and containable.

Oddjob—

Well I certainly don’t support the ethic that wealth brings shows the favor of the divine, so hopefully I’m less immoral to you now.

“Did you say you believed government ought to be run as a business? No.

Does your point of view imply it since it is only concerned with the efficiencies of classical economics (nowhere does your writing suggest you approve of Keynes, but rather those who vehemently opposed him)?”


I am obsessed with efficiency. And I don’t think that’s incompatible with a strongly Keynesian view, but rather that the Keynesian view is the best way to achieve it.

I do not think the government should be run as a business. The goal of government should never be, we should hope, to run a profit. The government plays many unique roles, among them to protect the most vulnerable members of society.

I strongly support FDR’s creation of Social Security—it is responsible for eliminating more poverty than any other act before or since. I support welfare programs, given the 1996 reforms to them (beforehand the program was quite flawed.) I support food stamp programs. I do not support unemployment benefits, because I believe them to be a terribly, terribly inefficient way of fighting poverty, and they provide a disincentive to work. I do not support a high (read: “binding”) minimum wage, again, a terribly inefficient way to combat poverty, and a significant cause of unemployment.

My pet goat—

What is usually called a “sin tax” is what I call an “externality” or “Pigovian” tax. The idea being that substances such as tobacco, alcohol, and gasoline cause externalities, such as pollution, that create costs to society not accounted for with the costs of the producer, so in order to “internalize the externality,” the state taxes the producer by the amount of the estimated social cost.

In short, I think such taxes are quite fair indeed.

Sat Jul 02, 08:10:40 AM EDT  
 SB Gypsy blogged...

Good Morning,
♠Dark Wraith♠

...and what a beautiful, cool Saturday morning it is! What a relief from this sticky heat!

Good morning My Pet Goat:
Does anyone (other than himself) really care if Joe Camelus pays a higher percentage of income toward a gross habit like smoking or chugging Bud?


I quit smoking in 1970, and have never regretted it. I never cared if the tax on smoking was unfair, I thought that the best thing was to tax it until noone could afford it - because I hated the smell, the trashy butts everywhere (why don't smokers get it, that noone wants to see their dirty butts?) (oops -lol)

Recently, our good Gov. Rell put forward a plan to increase funding by raising the cigarette tax, and I have to oppose it. The cost of a pack of cigarettes now in this state is ~ $5.00.

I have a friend who makes $10.00 an hour. It's the going rate for a machine operator now that the unions have been busted.

She lives with and takes care of her twin sister, who has MS. Her sister has been on a long decline. She now is bedridden, and depends on my friend for most everything.

My friend never gets a full night's sleep, she's up three or four times every nite to deal with her sister's needs. She recently started smoking again, because she says if she doesn't smoke, she'll either strangle her sister, or have to move out. She wants to be able to stay until her sister can no longer function in her house.

Now, this poor woman is working a half an hour - before taxes - for her smokes. Is it really just to load another 10 minutes of work on her back in order for her to buy a pack of smokes? (she's 63 years old, and not in great health herself)

I just don't think so.



Chris Meyer


Nuclear energy has its disadvantages, but I’d still choose it over coal. The pollution is dangerous, but concentrated and containable.

If you look at the long term, and here we are talking 10,000 years, the pollution is absoutely not containable!!

The idiotic plan that the administration is pushing now is based on (confessed) lies by the scientists involved. The idea that we should put this horribly dangerous material on tanker cars, and transport it all over the United States is the utmost folly.

Not only would it be a magnet for terrorists (domestic or imported), it would be a danger to everyone who is involved in this transport. The only two places that this could be disposed of safely is in the center of the earth, or in the sun. There are, needless to say, technological and societal problems with either of these alternatives.

The plan now, to bury it in an earthquake zone, is ridiculous. (and I have personal knowledge of earthquakes, I was there for the northridge quake, and it was one of the reasons that I left LA) To bury it where it can seep into the groundwater is only an option to someone who believes in the rapture.



The only rapture that I need is gentle rains, warm sun, and a long growing season.

Sat Jul 02, 11:32:01 AM EDT  
 Dark Wraith blogged...

Good afternoon, Chris Meyer.

Unfortunately, this afternoon, my time is being chewed up overseeing two online exams that I am administering for those wretched, online courses about which you might have heard. The school's servers are acting up, and this is turning into a small nightmare as students are panicking because they are having a hard time getting the exams to load and they're thinking that the deadline will pass before they can finish.

Whee. Another white collar ghetto type of work: less pay for online classes because, supposedly, I don't have to be in a classroom, even though the reality is that I spend an enormous amount of time being online for the students, I spend ridiculous time setting up the materials in that monstrosity software called WebCT that's the love child of school IT administrators all over the country, and I end up knowing full well that a substantial number of the students get a pittance out of the courses because they're using their books, notes, and online materials when they're taking the exams... if it's even they who actually taking the exams.

Before I go back over to the online courses, though, I would strongly encourage you to read my series, "The 21st Century," to see my perspective on neo-conservatives and their integration of economic and geo-political goals. The series is written as opera (the plural of opus). They can be read in order from the links in the sidebar section, "Editorial Analyses," above and to the right.

Now, I need to get back to the online courses to see how many students have actually made it in to the servers to get their exams started.


The Dark Wraith is not enjoying the Information Technology Age, this afternoon... knowing full well that, someday soon when the kinks have all been shaken out, human teachers won't be needed at all for undergraduate colleges to function quite satisfactorily.

Sat Jul 02, 02:13:30 PM EDT  
 Wild Clover blogged...

How valuable a person's work is depends upon how much other people value it, how much they demand it, not how complex it is.

I take exception to this statement. Now, if you want to say "How profitable a person's work is...", then you have a valid point. Daycare workers, developmental therapists, good parents, great teachers, truly good religious ministers(of whatever faith) do work for no or minimal compensation when compared with the "value" to society of the work of a million dollar football star. Would you say that someone who runs their multi million dollar corporation into bankruptcy deserves a salary/comp package 100 times greater than the poor schmuck on the production floor who busted his balls to keep the company in the black? A stay at
home mom who raises productive, honest, caring, informed kids is by this standard doing work of absolutely no value, while a fellow who is able to work the system into allowing him to profit by raping the environment or corporate raiding does something more valuable.

The problem is that the "haves" have been inflating the "worth" of non-essential and in some cases actively harmful employments, to where much of the nation's weath goes to overcompensation. This means the unavailability of funds to pay folks at least the inflation adjusted amount they got in 1970. Which mean the vast majority cannot pay for child care at $10/hour for teachers...the market therefore pays them at a rate FAR below the worth and value of the job they do. The mother of a diabled child who must stay at home...saving society the cost of caring for said child, as well as increasing the likelihood of some form of independance in that child as an adult...gets nada.(If she did, we would not be looking for work in excess of the fulltime jobs we have. One of the things'welfare reform" did.

I'm typing upside down and lft handed to remove temtation from baby. excuse typos.

Sat Jul 02, 08:22:15 PM EDT  
 Anonymous blogged...

I agree that greed is neither good nor bad, it's just the way it is, and that self-interest is the greatest motivator known to mankind.

Ecologists can see the same principle playing out in ecosystems. "Selfishness" (in the sense of competitive exclusion and maximization of use of external resources for individual organismal consumption, usually to the detriment of other organisms) is probably a biological universal principle, and one that makes altruism an endlessly intriguing subject of study for evolutionary biologists.

- oddjob

Sat Jul 02, 09:42:58 PM EDT  
 Anonymous blogged...

I agree that we don't have a realistic containment system for nuclear waste, not the one we use now, nor the one proposed for Nevada. I don't believe anyone has a realistic plan for containing such waste.

What engineering system has anyone created that we know has lasted as long as the half-life of the waste products we are creating?

The answer speaks for itself.

- oddjob

Aside from the CO2 (a real and very serious problem), coal smoke can be scrubbed, no? (Yes, it's expensive, but nuclear energy creates a waste that essentially lasts indefinitely. A ton of something with a radioactive half-life of 10,000 years will in 10,000 years still contain 500 pounds of dangerously radioactive material.

No engineer has a realistic plan for safely addressing this.

Sat Jul 02, 09:49:25 PM EDT  
 SB Gypsy blogged...

This post has been removed by the author.

Mon Jul 04, 06:41:14 PM EDT  
 SB Gypsy blogged...

Oddjob,

Thank You, that's exactly IT!

Mon Jul 04, 06:45:35 PM EDT  
 oldwhitelady blogged...

Good afternoon, Dark Wraith:

I sure hope things are going better. I just read your post from yesterday about the classes and servers, etc. I never though about students not taking their own tests, but it certainly is something that might be cheated on. Is there any way to know, for sure?

Mon Jul 04, 08:03:33 PM EDT  
 Dark Wraith blogged...

Good evening, Old White Lady.

I can authenticate right now only to the level of IP address. Obviously, though, a student could be taking the class from home, from school, or from some other place, so that doesn't do much for me.

Of course, if I see an IP address in, say, Bombay, I'll know pretty well for sure that the student has hired a ringer. Other than that, it is right now impossible to do verifications with 100% certainty. Eventually, that will change as personal authentication systems come online. I hate that idea, though, and I would never put myself in any position where I would have to use something like that. People who do are just asking for a piece of heartache that would never end if the authenticators were ever cracked. And even if the authenticators are never compromised, if the government requires that all keys to such systems be surrendered to its minions, that government can make you into anything it wants. To a very large extent, it could do that now; but as technology moves forward, people will just be stunned at what the government will be able to "prove" that they have done.


The Dark Wraith may be paranoid, but at least he has no intention of making it easy for the future to catch up to him.

Mon Jul 04, 10:49:52 PM EDT  
 Anonymous blogged...

(Apologies for my stupid math error. It will be 20,000 years before that ton has 500 pounds of dangerously radioactive material, not 10,000.)

- oddjob

Tue Jul 05, 08:47:54 AM EDT  
 oldwhitelady blogged...

Hiya Dark Wraith:

SO there's where I made that comment!

I thought it was on the open forum, but then... it wasn't.

Eye and Thumb scanning thru the online testing software via the computers when they get ready to take the test. Must match up with the eye and thumb scan done when the student registered for college...


You think it was bad with the servers acting up this past weekend.. :)

Wed Jul 06, 12:49:34 PM EDT