Posts Tagged ‘good jobs’

Radical measures to Improve the Economy

Thursday, June 25th, 2015

Dear Friends,

It seems to me, if you want a car to go faster, it is not a good strategy to push harder on the brakes. Our political elite strongly disagree with me however. They believe with all their hearts that the harder you push the brakes the faster the economy will go. They claim they want more jobs and a faster growing economy, and then say with all earnestness, that to get that result they will push even harder on the economic brakes. Sadly, the result is always a slower growing economy, less jobs and lower wages. To the political elite, this is a conundrum that is unsolvable, it is the Gordian knot of economics. I would like to suggest that perhaps, just perhaps, instead of pushing ever harder on the brakes, it might be a sound strategy to lift up on the brakes and maybe even push the accelerator a bit.

The new class elite say they want higher wages, more jobs and a faster growing economy in every speech, talk and seminar they produce. They go on and on about income inequality, stagnant wages, the evil rich, unfairness of capitalism, social justice, etc… Yet every policy they enact only makes the problems, they so hate, get worse? One must wonder how it is that such good intentions always seem to come to naught? Maybe because the policies they enact are always the same… pushing the brakes on the economy.

Higher regulations is their fall back position. They believe that increasing the friction of regulations in an economy will make that economy grow faster, create more and better paying jobs as well as level the playing field for those trying to get ahead. In fact if you or anyone else brings up the idea that maybe, just maybe regulations are too high, the new class elite will chuckle, look at you like a child who believes in Santa, and tell us the economy must have regulations… everyone knows that. Besides, the dire threat of global warming must be stopped by regulations! They have bought and paid for “scientists” that prove it every day. Therefore then push harder on the regulatory brakes with both feet.

The new class love to raise taxes. The answer to every economic, social and political problem is the brave policy of raising taxes. What courageous people the new class are. In the face of us ignorant fools, the new class elite ratchet up our tax burden to help create more and better employment, but they are only doing it for us. They see government spending as the solution to every problem that has ever plagued mankind since we emerged from caves. If only the hoi polloi was as enlightened as the elite, we would also see that taking ever more of our money and throwing it down the rabbit hole of government spending, helps us far more than if we were allowed to keep the money we earn… and so they raise taxes, every year in any way they can, pushing ever harder on the taxation brake with their whole body.

The new class believes that vilifying those who create jobs will to lower the unemployment rate. Listen to any rich new class elitist and they will assure you that the problem is those evil rich people. Not the one speaking of course! Heavens no! It is the fault of all those other rich people, you know, the ones starting businesses and investing their money in the economy, certainly not those who got rich in politics, or old money that sustains the trust fund class. Any progressive will look you in the eye and with a tear in his eye lament your problems, that are because someone is trying to get rich by starting a company, hiring people and adding value to the economy. If you don’t agree then it is just because you are too simple to grasp the intricacies of their policies. So they crush the brakes on entrepreneurs as hard as they can.

Could I offer a different strategy? Maybe instead of pushing down ever harder on the economic brakes, to get a stronger faster growing economy, it might behoove us if the elite lifted their foot from the throat of the economy and allowed it to get some air, maybe even pushed down a bit on the accelerator? I know that is a radical concept, and most any politician who the new class agree with will agree that is an extremely radical position to take, but since pushing harder on the economic brakes has only slowed the economy, radical measures should be considered. Radical measures like, lifting up the foot from the regulatory brake, easing up on the tax burden or maybe cheering those who start businesses and employ people. I know, I know, such talk is like saying water flows down hill, horses have four legs, fish swim in water or that the Earth is round… absurd to the utmost. Or perhaps, the new class elite know their policies of pushing harder on the economic brakes will slow the economy, and therefore they really don’t want a fast growing economy, creating lots of good jobs and higher wages, in spite of their rhetoric? Or is that too extreme to say?

Sincerely,

John Pepin

The Law of the Magnification of Jobs Due to Labor Saving Devices

Thursday, January 16th, 2014

Dear Friends,

 

It seems to me, there should be a law of economics called, The Law of Magnification of jobs due to Labor Saving Devices. In my conception of it, when new technology is added to an economy, jobs are not lost, but gained. Locally and initially jobs might be lost but in the course of one economic cycle those jobs are not only more than replaced but made easier, better and with higher wages. This effect is not only global but local as well. It is important to keep this in mind when people say that such and such is taking away jobs, because the opposite is actually true.

 

Your job, my job and most other people’s jobs weren’t even invented a hundred and fifty years ago. That is an eye blink in written human history. Think of it, most of the jobs that keep tens of millions of people busy all day, were only invented so recently. Work with computers? They only came on the scene as workable things in the nineteen sixties. But when computers came out they were supposed to wipe out secretaries, instead they erased several levels of management from large cap firms. This freed up smart people with capital to invest and start businesses. Some of those ideas became large cap firms a decade or two down the road, and some in only a few years. Imagine the magnification of jobs this added to the others created by computers.

 

Cheaper, better, and faster ways of doing things frees up human capital that can be better spent on the things humans do best. It also makes the goods of society available to more people. One revolutionary technology that is about to burst is 3D printing. It will do to the creation of goods and products the same thing that word processing did to writing. 3D printing will bring the act of creation to the masses.

 

Every minute of every day, the Eggbert Slokums of the World are imagining new products, new goods, new ways of doing things. 3D printing will give them all the ability, to not just imagine and jot some notes on a napkin, but in a reasonable amount of time have a computer print the fully functional product, good of even mechanism. The abilities of this technology are startling. Unfortunately industries will disappear, people will loose their job, and there will be bankruptcies, these bad things will be the cost of the introduction of this technology.

 

How can anyone fully account for the benefit though? The future intangible benefits cannot be even imagined at. The reason is that no one can tell what innovations 3D printing will lead to. (If they could they would be billionaires). Imagine if we veered off from computers because Middle Managers were afraid of loosing their jobs. There would be no I Pods, no smart phones, no thumb drives, nor mouses. Typing would still be on a Selectric and special effects would be of the Star Wars variety. All the jobs that are now done by computer, for computers, and with computers, would cease to exist. Imagine how materially damaged our society would be if that had happened?

 

The last example I will use is the mechanical loom. Marx said, the mechanical loom would put so many people out of work, the people would starve, ushering in the revolution. “As the forest of arms grows ever thicker while the arms themselves grow ever thinner…” Some people did loose their jobs when the mechanical loom was introduced. Those that still worked on the looms, were no longer subject to the tendonitis from throwing the shuttle, their legs and backs didn’t ache from constantly peddling the loom and their wages went up. What is never mentioned however, is the mechanical loom has to be maintained and it takes a trained person to do that, parts for it must be imported, the demand for wool to feed a mechanical loom is much higher than a craft loom, the list of added jobs goes on and on.

 

The take away here, is that labor saving devices don’t destroy jobs they make more and better jobs. The people against the introduction of labor saving devices into the workplace are engaging in sophistry, making false arguments that appear logical for selfish ends. Classic liberal tactic… but like everything liberal, it makes perfect sense, as long as you don’t think about it to long.

 

 

Sincerely,

 

John Pepin