Posted on 12/20/2016 3:02:02 AM PST by expat_panama
Apparently, technology and trade generate noteworthy fear and strife in today's economy. Indeed, many view tech and trade as a kind of dangerous TNT set to blow up the U.S. economy.
From kitchen tables to campaign trails to TV talking heads, chatter abounds about U.S. jobs being lost to technology and/or cheap labor in foreign nations. It appears to many that technology globalists are nefariously plotting to put us all out of work. Bummer.
Has this happened before? Well, did you know that there were approximately 13.5 million agricultural workers in the U.S. in 1910, and that dropped to less than 10 million in 1950, and today, there are just over 2 million people working in agriculture?
Some might look at this and declare: "Such devastation! More than 11 million jobs - over 80 percent of the industry's employment - have just disappeared. Obviously, U.S. agriculture has been wiped out."
Oh, but wait. It turns out that farm output grew by better than 50 percent from 1910 to 1950. And since 1950, farm output is up by some 180 percent. Farming is now far more productive thanks to investments in all kinds of tools, machinery and technology. Food is much more affordable, and far fewer people go hungry. Hmmm. Go figure.
Ah, but what about manufacturing?
U.S manufacturing employment was on a growth path - though uneven given the ups and downs in the overall economy - up until the late seventies. In mid-1979, manufacturing jobs in the U.S. hit a high of 19.6 million. As of last month, manufacturing employment was down to 12.2 million. That's a loss of 38 percent of the manufacturing sector's jobs.
Clearly, some will assert: "Manufacturing is done. We don't make anything in the U.S. anymore."
Really? Actually, it turns out that manufacturing production has more than doubled since mid-1979. Like farming, private investment in new and improved tools, machinery and technology improves manufacturing productivity and output.
And then there's trade. The U.S. trade picture has changed rather dramatically in recent times. Consider that in 1950, U.S. exports came in at 4.22 percent of GDP, imports registered 3.95 percent, and total trade equaled 8.17 percent of GDP. In 2015, however, exports had jumped to 12.56 percent of GDP, imports to 15.53 percent, and total trade to 28.09 percent of the U.S. economy.
Those who view trade negatively would focus on the big jump in imports, as well as the shift from a trade surplus to a trade deficit. But they ignore some basic economics. For example, the early-nineteenth-century economist, Jean-Baptiste Say, observed that "products are always bought ultimately with products." This is known as "Say's Law," which tells us that in a market economy, one must produce marketable goods or services in order to be able to purchase goods or services, including imports. In essence, growing imports reflect expanding domestic growth.
In the end, investments and innovations in technology drive increased productivity, higher earnings, generate new products and industries, and provide consumers with lower costs and more choices. Similarly, trade expands opportunities for U.S. businesses and workers, and again benefits the consumer.
Now, the naysayers will persist: "But what about those lost jobs and lower earnings?"
Consider that in 2016, the U.S. economy in real terms is more than seven times larger than it was in 1950. And that covers decades of significant technological advancement and expanded international trade. Meanwhile, there were 45 million employed in 1950, and there are more than 145 million working today. For good measure, real per capita personal income has quadrupled over this period. So, technological advancements and expanded trade do not result in the destruction of U.S. jobs and diminished earnings. It's just the opposite.
And guess what? That will not change going forward. The average farm worker in 1900 had little idea about what farming would look like in the future; what new goods, services, technologies and industries would be created; and how much improvement there would be in terms of wealth and quality of life for the average American. Just the same, the average economist, politician or manufacturing worker today has little idea as to what lies ahead. This is all thanks to how economies expand and wealth is created. Economist Joseph Schumpeter called it "creative destruction." The new replaces and surpasses the old. TNT - tech and trade - are central to that process.
Are there problems in the U.S. economy? Of course. Over the past eight-plus years in particular, anti-growth policies in the areas of taxes, regulations, government spending and debt, and monetary policy, along with the U.S. retreating from global leadership in advancing free trade, have inflicted real harm. Such measures have raised costs, created uncertainty and diminished incentives for entrepreneurship and investment. Correct such wrongheaded policies, however, and U.S. entrepreneurs, workers and consumers can continue to reap the enormous benefits from TNT, that is, tech and trade.
Ray Keating is an economist and a novelist. His latest thriller is Wine Into Water: A Pastor Stephen Grant Novel.
“In the end, investments and innovations in technology drive increased productivity, higher earnings, generate new products and industries, and provide consumers with lower costs and more choices. Similarly, trade expands opportunities for U.S. businesses and workers, and again benefits the consumer.”
This will not happen if the inventors and the investors do not believe they can keep or control their gains, as with the heavy tax and regulation we have been experiencing with a power grubbing, power hungry, bureaucratic monster that has been created.
And then in the writer’s last line, he gives the solution, but does not attribute these remedies to Trump’s future administrative mandates.
“Are there problems in the U.S. economy? Of course. Over the past eight-plus years in particular, anti-growth policies in the areas of taxes, regulations, government spending and debt, and monetary policy, along with the U.S. retreating from global leadership in advancing free trade, have inflicted real harm. Such measures have raised costs, created uncertainty and diminished incentives for entrepreneurship and investment. Correct such wrongheaded policies, however, and U.S. entrepreneurs, workers and consumers can continue to reap the enormous benefits from TNT, that is, tech and trade.”
BS. Those jobs didn’t become obsolete. They just moved. I’ve seen our plants in Vietnam. They don’t build low tech. They build high tech and employ what they need to employ. Better that here than there.
Most free trade philosophy garbage is just propaganda.
Softbank, which announced a couple of weeks ago, that they were going to invest $50 billion in the US, based on their beliefs of what Trump would do, just delivered their first $1 billion in investment.
A society must have jobs that can employ folks across the IQ spectrum, or else a permanent underclass results. The USA was always the economic pinnacle because of our successful middle class, which the globalists have tried to destroy.
The whole problem with current trade is that we are importing goods and exporting cash. That is, our politicians really do believe we can get something for nothing.
Eventually, this trade imbalance will catch up with us when our trading partners realize that they are getting nothing in return (cash alone is worthless; its value is only as a proxy for goods and services).
In addition, much of the trade these days is for items we used to make ourselves. When companies leave the US for lower taxes and cheap labor, most of the jobs lost in the US are not being replaced. Unlike during the industrial revolution, when small farmers were able to move to the cities and get manufacturing jobs, there are no replacements for manufacturing jobs.
the steel company based out of Pittsburgh said they were hiring back 10,000 workers in anticipation of the tax reform that Trump has said repeatedly he wants to implement.
By talking about his economic plan, Trump has done more in a few short weeks since the election to spur economic growth in America than Obama and Bush have done in the last 10 years.
If this were the only reason for me to be so, I'm proud to have voted for Trump. He's taking action where his two past predecessors failed. And he's not even in office yet.
Bump
Bump
War is Peace.
Freedom is Slavery.
Ignorance is Strength.
Global Warming causes frigid weather.
Loss of industrial jobs means industry is improving.
Obviously, steel production is a dying industry going the way of the buggy whip.
In 1980, the United states had about 95% of the worlds computer and display manufacturing market share, now it's about 2%, so I guess computers are a dying going the way of the bugs whip also.
You do not necessarily have an underclass unless you choose to subsidize it. Mean IQ in the US has increased somewhere around 20-30 points (no great single source, based on mixed estimates) during the transition from an agricultural to industrial economy (1880 - 1980). In the absence of subsidization, those with higher IQs reproduced more, those without less, which was coupled with an influx of higher IQ immigrants which ultimately resulted in a slow but significant increase in IQ, sufficient to raise the mean more than enough to go from meeting the minimum requirements for a worker in the agricultural age (~75) to the industrial age (~100). By changing our policy in the 1960s to (i) Subsidize children born to low IQ people (LBJ) and (ii) Encourage low IQ immigrants and discourage higher IQ immigrants (Kennedy) we get a permanent underclass and for the first time a reduction in mean IQ. I would estimate you need to have a minimum IQ of 110~115 to succeed as a technical worker in the digital economy based on employees I have managed (knowing their GPAs, GREs and how that maps to IQ), and had we continued a similar policy, we could have likely gotten close to that. If we reverse this policy we can as a nation have a workforce mostly equipped to meet the minimum requirements for a digital economy. Of course there will always be a small number of people who fall through the cracks, but as long as they are small they can be cared for charitably without destroying the wealth of the nation.
There is a new line out there that says that Trump cannot bring those jobs back because they are all manned by robots. I had an acquaintance tell me that. I asked him then why can’t Ford and Carrier stay here with their robots. Robots have been used in assembly lines for decades by auto makers, but production still requires people.
Apparently Ray Keating assumes all manufacturing jobs have been loss to technological advances, however, that is far from the truth. For it has been more than just jobs lost, it has been entire manufacturing plants that have disappeared. along with the jobs. That has nothing to do with technological advances.
“Unlike during the industrial revolution, when small farmers were able to move to the cities and get manufacturing jobs, there are no replacements for manufacturing jobs.”
Balderdash! They will just become software engineers./sarc
Total blather
And why is so much of the most advanced manufacturing technologies like clean-room pharmaceutical manufacturing and computer chips and advanced display screens made in those other countries?
When there is so much money to be made by using $3 a day labor in polluted factories in other countries and importing those goods freely into the United States, there will be much propaganda published to maintain their profitable arrangements.
They plan on getting the plant up and running again.
By talking about his economic plan, Trump has done more in a few short weeks since the election to spur economic growth in America than Obama and Bush have done in the last 10 years.
If this were the only reason for me to be so, I'm proud to have voted for Trump. He's taking action where his two past predecessors failed. And he's not even in office yet.
You know deep down this is pissing the libs off to no end.
Steel mills and auto industry. Those are heavily union jobs.
Their boy failed them.
Now here comes the evil, fat cat, republican, bringing back the jobs.
I recall I wasn't the only one who made that prediction, I do recall being soundly laughed off the forum for making the prediction.
Well?
The election results speak for themselves and the economic optimism that's surged to levels we haven't seen in 10-15 years (or longer) do too. For all the naysayers who think that Trump's braggadocio is just too much, I say the man has great instincts and he's crazy like a fox. Drives the liberals and media nuts. I like that. No, I love that.
Proud to have voted for President Elect Trump.
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