Mystery Economic Theater 2015

[science_man_88]

Originally Posted by LaurV

Edit: investopedia is a very good source to learn the abc...

that's where the 80 or so bookmarks I have on investing and the simulator I'm playing are on.

[ewmayer]

Originally Posted by xilman

You can in Newtonian physics as well. You don't even need to add or remove energy to the system.

True! That's what I get for engaging in linear thinking...

[ewmayer]

Entirely prototypical bear-market relief rally in the US casinos today, which looks to be echoing is Asia, though the trading day is young there, yet.

More interestingly, economist (of the rare 'useful' variety) and frequent NC guest poster Michael Hudson describes the very different dynamics behind the China and US equity-market bubbles.

[Xyzzy]

http://www.theatlantic.com/business/...-a-day/404659/

[xilman]

http://www.bbc.co.uk/news/technology-34175290

The specifically economic focus is about half-way down.

[ewmayer]

Originally Posted by xilman

http://www.bbc.co.uk/news/technology-34175290

The specifically economic focus is about half-way down.

I find this appalling piece of Big-Data-elite propaganda to be, predictably, of the wildly-optimistic 'technotopian' variety. Despite briefly noting a few 'concerns' about the non-data-scientist, non-social-media-privacy-sucking-psychopath-'entrepreneur' and non-'sharing-economy'-kleptocrat portion of humanity, we have the usual raft of reality-ignoring happytalk. Let's dig into it, shall we?

...robots and other forms of automation can aid in the creation of new and better jobs for humans.

Like Amazon warehouse-working 'creators', for instance, who all-too-often (as has been widely documented, with the resulting PR scandals often providing the only modicums of relief) toil under brutal job conditions, have every second of their time micromanaged by all-seeing BigData algos, and have 0 job security.

On the other hand, jobs such as data scientist didn't used to exist, but because computers have made enormous data sets analyzable, we now have new jobs for people to interpret these huge pools of information.

...and use the resulting insights to more efficiently exploit the non-data-elite 'Amazon warehouse troglodyte' portion of (sub)humanity, naturally.

In fact, since the theme of a bipolar social restructuring into - in an eerie echo of the plot of a classic Star Trek episode - big-data-elite "cloud people" and cave-toiling troglodytes so pervades the Brave New Big Data Economy the article describes, let's throw out some standard nomenclature for the 2 main resulting castes: CloudPeople and Trogs.

In the tumult of our economy, even as old tasks get automated away, along with demand for their corresponding skills, the economy continues to create new jobs and industries.

Gosh, that sounds great ... but a few paragraphs down we read

Our economic data make it clear that we are not doing as well as we should be at creating jobs and raising wages.

This is overwhelmingly so for the Trogs - and the article fails to note that from the perspective of the CloudPeople, a permanently-downtrodden precariat is in fact a feature, not a bug. Thus the ensuing sentence rests on a demonstably false premise:

Corporations, workers and government can work together to find solutions to this problem.

Only if the elite kleptocrats and sociopaths running these institutions *want* to find solutions to 'this problem'. Since as I just noted they see it as quite the opposite of 'a problem', the point is moot. Think I'm being too cynical? Check out what one greatly-admired CloudPerson 'thought leader,' Warren Buffett, recently said about the usefulness of the Trogs, specifically about those Trogs who are so pathetic that they fail to even make useful Amazon shelf-picker drones, erm, I mean warehouse associates™:

“You want everybody educated to their potential. You want people to reach their potential. That still won’t work for some people in a highly developed market system.

I mean if this were a sports-based system, you could give me a PhD in football, and I could practice eight hours a day, and I might be able to carry the water from, not onto the field, but from the locker room to the bench. There’s just some people don’t fit well into a highly skilled market-based economy.

They’re perfectly decent citizens. We’ll send them off to Afghanistan, but they are not going to command a big price.”

And as the aforementioned Star Trek episode made clear, once the class divide has become wide enough and gone on for long enough, the elites come to dismiss a priori the 'educative potential' of the Trogs, leading to a self-perpetuating dynamic. Again, feature, not bug, from the perspective of the CloudPeople. But, back to the Beeb article...

Where humans beat machines

Creative endeavours: These include creative writing, entrepreneurship, and scientific discovery. These can be highly paid and rewarding jobs.

...but increasingly are so only for a microscopic fraction of said Creators. Look at what the Amazon Book-authorship model has done to writing, what the Apple iTunes model has done to musicianship, and what the near-abolition of tenure in the ever-more-corporatist-styled academia has done to academic research and teaching.

There is no better time to be an entrepreneur with an insight than today, because you can use technology to leverage your invention.

Especially if your 'entrepreneurship' consists of exploitation, perhaps creating a new class of Trogs to replace one of the rapidly-dwindling halfway-decent job niches for non-Big-Data elites. We can call this process "Uberization".

Social interactions: Robots do not have the kinds of emotional intelligence that humans have. Motivated people who are sensitive to the needs of others make great managers, leaders, salespeople, negotiators, caretakers, nurses, and teachers. Consider, for example, the idea of a robot giving a half-time pep talk to a high school football team. That would not be inspiring.

And again, the only jobs in the listed categories where wages remain decent are the subcategories which reward exploitation and serve the narrow interests of the elites. And I'm not sure what to make of the sheer inanity of the "half-time talk" example, but let's use that to examine another extremely narrow job category where pay gains have been impressive in the U.S.: coaches of elite college sports programs. Aha - yet another business model based on obscene explotation, here of college athletes, shockingly few of whom will ever have a shot at making that kind of money in the pro ranks.

Physical dexterity and mobility: If you have ever seen a robot try to pick up a pencil you see how clumsy and slow they are, compared to a human child. Humans have millennia of experience hiking mountains, swimming lakes, and dancing—practice that gives them extraordinary agility and physical dexterity.

Jobs that depend on these kinds of skills and experiences, such as gardening and housekeeping, are jobs that robots are not good at. Some of these jobs are not always highly paid, but it is unlikely that a robot will soon take them over. However, our friends in robotics are working hard at getting better all the time, so this last category is the one most likely to change.

I underlined that one snip because I would phrase it "almost none of these jobs are paid at all, much less highly paid". And the robots will only be coming for thse that pay something, even if sub-minimum wage, because as a CloudPerson, by definition, you can only further enrich yourself by saving labor costs where there are such costs to begin with.

The percentage of prime working age adults in the US with jobs is at a 30-year low, hourly wage growth is slow by historic standards, and real median household income is no higher than it was 20 years ago.

And the fact that [a] all this occurred in the context of a massive increase in overall productivity, much of it rooted in the technology the article lauds, and [b] an unprecedented skewing of the fruit of said gains going to an ever-narrower elite class should give you pause about 'where we are headed.'

Workers, for their part, have to be strategic and aim for the jobs least likely to be overtaken by robots or other machines. They have to commit to a lifetime of practicing and updating their skills by, for example, taking extra courses online and in classrooms. Lifetime learning and continued training and retraining are key.

Translation: you need to abandon any old-fashioned notions of loyalty (except of the 'yours to ensuring our profits' kind), job security and you-will-be-cared-for-in-your-old-age and go deep into student debt so that you will be desperate for some kind of job, any kind of job. Speaking of which: your English lit PhD is useless to us, but since as you noted you are willing to 'do anything', we do have a few warehouse associate™ position openings for those who enjoy working in extreme heat, lifting heavy objects as long as 12-18 hours per day, and who never need to chat with their fellow Trogs, erm, I mean warehouse associates™ or take a pee break. Oh, and you must agree to be on-call 24/7, have your personal life - sorry, 'non-paid hours of job performance' - monitored by our custom App which we will install on our smartphone (which you will pay for, of course), and it helps if you are self-insured.

Governments, for their part, need to create a climate where entrepreneurs can flourish, because new ventures create new jobs. There is troubling evidence that entrepreneurship is on the decline. This needs to change.

The answer to the new and growing workforce of robots is not to slow the pace of technological progress, but to speed up our institutions so that entrepreneurs, managers and workers alike can thrive.

Ah, the obligatory closing note of 'some worry ... but yes we can™!' optimism - Picture Mom, apple pie, kittens sleeping in the embrace of huge dogs, and happy-faced flying unicorns pooping Skittles candies to shower the joyous masses of future thriving workers™. And all it takes is to eliminate human greed and get a deeply entrenched, violence-prone-when-threatened class of elites to work against their own self-interests. Easy!

[only_human]

Originally Posted by ewmayer

...
And the fact that [a] all this occurred in the context of a massive increase in overall productivity, much of it rooted in the technology the article lauds, and [b] an unprecedented skewing of the fruit of said gains going to an ever-narrower elite class should give you pause about 'where we are headed.'


Translation: you need to abandon any old-fashioned notions of loyalty (except of the 'yours to ensuring our profits' kind), job security and you-will-be-cared-for-in-your-old-age and go deep into student debt so that you will be desperate for some kind of job, any kind of job. Speaking of which: your English lit PhD is useless to us, but since as you noted you are willing to 'do anything', we do have a few warehouse associate™ position openings for those who enjoy working in extreme heat, lifting heavy objects as long as 12-18 hours per day, and who never need to chat with their fellow Trogs, erm, I mean warehouse associates™ or take a pee break. Oh, and you must agree to be on-call 24/7, have your personal life - sorry, 'non-paid hours of job performance' - monitored by our custom App which we will install on our smartphone (which you will pay for, of course), and it helps if you are self-insured.


Ah, the obligatory closing note of 'some worry ... but yes we can™!' optimism - Picture Mom, apple pie, kittens sleeping in the embrace of huge dogs, and happy-faced flying unicorns pooping Skittles candies to shower the joyous masses of future thriving workers™. And all it takes is to eliminate human greed and get a deeply entrenched, violence-prone-when-threatened class of elites to work against their own self-interests. Easy!

Hey you are dissin' 'merica, the land where anyone call help the rich get richer.

Here are a few shining examples:
Projects Are the New Job Interviews

Exploitive? Perhaps. But most organizations have learned the hard way that no amount of interviewing, reference checking and/or psychological testing is a substitute for actually working with a candidate on a real project. I know advertising agencies that have an iron-clad, inviolable rule that they will only hire creatives who have successfully done freelance work with an account team. Similarly, a fast-growing Web 2.0 “software as a service” company doesn’t waste its time asking coding candidates trick “Python” questions during job interviews; they have potential hires participate in at least two “code reviews” to see what kinds of contributors, collaborators and critics they might be.

Yes, candidates must sign NDAs. Yes, sometimes these sessions effectively pit a couple or three candidates against each other. But there’s nothing fake or artificial about the value they’re expected to offer. These organizations treat hiring as part of their on-boarding process. Hiring becomes more holistic rather than “over the wall.” More importantly, everyone in the enterprise now “gets” that people only get hired if and only if they deliver something above and beyond a decent track record and social graph.

Ethically, the most interesting behavior I’ve observed is that firms exploring “projeclication” hires aren’t asking for free labor. They’re paying below-market rates for their candidate’s insights and efforts.

Amazon Mechanical Turk - Welcome
https://www.mturk.com/mturk/welcome‎

The online market place for work. We give businesses and developers access to an on-demand scalable workforce. Workers can work at home and make ...

Kickstarter Wins Legal Battle to Protect Crowdfunding From Patent Threats

(Judge) Failla sides with Kickstarter.

First, she decides that whatever it's called — "crowd-funding," "crowd-based funding," "fan-funding," "incentive-based patronage" or "incentivized crowd-funding" — what's claimed to be under a patent is an abstract concept and one that is "beyond question of ancient lineage." She even nods to the way that PBS and NPR raises money.

Google's "define crowdsourcing":

crowd·source/ˈkroudˌsôrs/
verb
obtain (information or input into a particular task or project) by enlisting the services of a number of people, either paid or unpaid, typically via the Internet.

[ewmayer]

Time to disgorge a small pile-up of links so as to unclog the intertubes:

o Bubbles Always Burst: the Education of an Economist | Michael Hudson for Counterpunch

Long-form must-read for anyone intrested in the huge gulf between what is taught and 'accepted wisdom' in academic economics and what actually happens IRL. Especially interesting to me were the 'archeology of debt and interest' and this snip about the 'reserve currency colonialism' ushered in by the 1971 Nixon Shock, a direct result of the mounting Vietnam war deficits:

In 1972 I published my first major book, Super Imperialism: The Economic Strategy of American Empire, explaining how taking the U.S. dollar off gold in 1971 left only U.S. Treasury debt as the basis for global reserves. The balance-of-payments deficit stemming from foreign military spending pumped dollars abroad. These ended up in the hands of central banks that recycled them to the United States by buying Treasury securities – which in turn financed the domestic budget deficit. This gives the U.S. economy a unique free financial ride. It is able to self-finance its deficits seemingly ad infinitum. The balance-of-payments deficit actually ended up financing the domestic budget deficit for many years. The post-gold international financial system obliged foreign countries to finance U.S. military spending, whether or not they supported it.

o Volkswagen’s Diesel Fraud Makes Critic of Secret Code a Prophet | NYT

o Obama Promised Healthcare Premiums Would Fall $2,500 Per Family; They Have Climbed $4,865 | Liberty Blitzkrieg

o The Real Reason College Tuition Costs So Much | NYT

Interestingly, increased spending has not been going into the pockets of the typical professor. Salaries of full-time faculty members are, on average, barely higher than they were in 1970. Moreover, while 45 years ago 78 percent of college and university professors were full time, today half of post secondary faculty members are lower-paid part-time employees, meaning that the average salaries of the people who do the teaching in American higher education are actually quite a bit lower than they were in 1970.

By contrast, a major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 — a 221 percent increase.

The rapid increase in college enrollment can be defended by intellectually respectable arguments. Even the explosion in administrative personnel is, at least in theory, defensible. On the other hand, there are no valid arguments to support the recent trend toward seven-figure salaries for high-ranking university administrators, unless one considers evidence-free assertions about “the market” to be intellectually rigorous.

[only_human]

Good to have some numbers for admin staff in education. I was previously aware of the low teaching pay and increasing reliance on struggling adjuncts with even less security than other beleaguered teachers. In my Google stream one day was this article:
Death of an adjunct

[kladner]

That is heartbreaking. I wonder what Papa Francis would think of such poverty for a long-time teaching employee of a Catholic University. It would be atrocious for a janitor. But janitors are all no doubt contracted from a service, anyway. They might even get benefits.

[only_human]

Originally Posted by kladner

That is heartbreaking. I wonder what Papa Francis would think of such poverty for a long-time teaching employee of a Catholic University. It would be atrocious for a janitor. But janitors are all no doubt contracted from a service, anyway. They might even get benefits.

I'm disappointed but not surprised that the money is being diverted to top supernumeraries, the middle is being squeezed out and the bottom is not receiving a living wage.

For more on this,
When a college contracts ‘adjunctivitis,’ it’s the students who lose

Editor’s Note: Adjuncts now make up more than 70 percent of all college and university faculty, often juggling a course load at multiple universities, earning an average of $2,500 per course. And now they want the Department of Labor to know.

and
Homeless professor protests conditions of adjuncts
and
Are adjunct professors the fast-food workers of the academic world?

I am what's called an adjunct. I teach four courses per semester at two different colleges, and I am paid just $24,000 a year and receive no health or pension benefits. Recently, I was profiled in the New York Times as the face of adjunct exploitation, and though I was initially happy to share my story because I care about the issue, the profile has its limits. Rather than use my situation to explain the systemic problem of academic labor, the article personalized – even romanticized – my situation as little more than the deferred dream of a struggling PhD with a penchant for poetry.

But the adjunct problem is not about PhDs struggling to find jobs or people being forced to give up their dreams. The adjunct problem is about the continued exploitation of a large, growing and diverse group of highly educated and dedicated college teachers who have been asked to settle for less pay (sometimes as little as $21,000 a year for full-time work) because the institutions they work for have callously calculated that they can get away with it. The adjunct problem is institutional, not personal, and its effects reach deep into our culture and society.

Though there are tens of thousands of personal stories like mine of economic hardship and lives ruined or put on hold, it is not to these stories that we should turn when we consider the exploitation of adjuncts in academia, but to our universal sense of justice. For the continued exploitation of adjuncts is, to put it bluntly, nothing less than unjust.