Tag Archives: political economy

An Overblown Concern

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Citrini Research wrote a report that’s associated with Monday’s stock market spike down. Its report centered on the risk of heavy white collar job losses from AI’s alleged ability to do white collar work and completely replace those white collars.

For the entirety of modern economic history, human intelligence has been the scarce input. We are now experiencing the unwind of that premium.

And so on.

Not so much, though. It took more mental acumen to run the steam drill than John Henry needed to run his hammer. It takes more mental acumen to work a modern auto production line, with all of that automated equipment, than it did—and does—to work an artisan, unautomated auto production line. The move extends into the white collar milieu, also. It begins with requiring more mental acumen to check AI’s work than it does to work the spreadsheets or do the research oneself. It takes a great deal of mental acumen to ask the right questions and then give AI the tasks of answering them—and then checking AI’s responses. Creativity is something AI cannot do.

AI is good at the artificial part; it’ll be quite some time before AI gets good at the intelligence part. Alan Turing once said that when a computer can answer certain kinds of questions, they’ll be impossible to distinguish from humans. That doesn’t prove computers’—AI’s—superiority, though. Answering questions isn’t the same as asking them.

A Cynically Irrelevant Argument

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Here’s the lede:

A coalition of climate and health organizations sued the Environmental Protection Agency on Wednesday in an effort to combat its repeal of a landmark climate finding.

Because of course they do. The landmark climate “finding” that has been repealed is the finding that plant food in the form of atmospheric CO2 actually is a pollutant. That fiction has expanded costs of living for us American citizens for decades, and its removal is good riddance. Nevertheless, the climate funding industry is waxing hysterical over the nation’s turn toward rationality.

Their suit proceeds, cynically, from an irrelevancy. Peter Zalzal, of the Environmental Defense Fund:

Repealing the endangerment finding endangers all of us. People everywhere will face more pollution, higher costs, and thousands of avoidable deaths.

Even were that true—it isn’t—it’s irrelevant. The question is an economic, and so a political, one. Our courts have no jurisdiction for hearing this argument. Our judges and Justices are bound by our Constitution and their oaths of office to uphold and defend it, and by their oaths they’re further constrained to rule based on the text of any statute that comes before them. They cannot, legitimately, rule based on what they wished our Constitution and statutes said, nor can they, legitimately, rule based on their personal views of what’s good or bad for our society.

This sort of suit should be tossed at the outset, with prejudice, and with sanctions on the lawyers and their employing firms for bringing frivolous suits.

Who Owns our Economy?

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Greg Ip, a writer for The Wall Street Journal, says those of us older than 65 do.

As of the third quarter of last year, people 70 and over controlled roughly 39% of all equities and mutual funds owned by households, compared with 22% in 2007, according to Federal Reserve data. Their share of net worth—assets minus debts—was 32%, up from 20% two decades earlier.

And

Wealth accumulates with age, so people at retirement tend to have much more than younger generations, a pattern evident in Fed surveys back to 1989.

And so on.

Even were that true, it’s only a temporary ownership. What Ip missed is this truism: we can’t take the economy, or our wealth, with us when we relocate to Dirt Nap Acres. We leave that wealth to those younger generations, our children, and to a variety of charities and endowments, all of which benefit those younger generations.

All that means that tomorrow, those younger generations will own our economy, starting well before they become the next geezer owners of the economy.

It’s a generational cycle, and that background is the framework within which the economy’s business and political cycles play out.

California Teacher Strikes

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More accurately, teacher union strikes in California.

A wave of teacher contracts is up for renegotiation now, thanks to a strategy the unions implemented a few years ago to synchronize expiration dates. Dozens of California school districts are in talks, with some already at an impasse or in mediation.
…
By coordinating negotiations across the state with the threat of strikes, the unions aim to escalate funding battles from local school boards to the state legislature, said David Goldberg, president of the California Teachers Association, a union representing more than 300,000 educators. …
“This resets the power dynamic,” Goldberg said.

There’s this, too:

Total enrollment in the district has fallen by about 37% since 2018-19 to just over 390,000 students, officials say. Over that span, the number of teachers has held steady at around 25,500 while overall staffing has increased 15%.

Can you say “featherbedding,” boys and girls?

Kids’ public school education would suffer from a strike prolonged by school boards’ refusal to deal with unions “negotiating” in blatantly bad faith? How would anyone tell the difference? Kids in California already are afflicted by an education regime in those public school environments that’s so bad as to border on child abuse.

School boards need to screw their collective courage to the sticking post and tell the unions and their baldly excessive demands to go…pound sand.

The Left’s Mantra

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And I offer an equally oft-repeated alternative.

The Left wants to ever more heavily tax the rich, and their Progressive-Democratic Party politicians can’t conceive of any taxing or spending alternative. Conservatives want to lower taxes and cut government spending. A current example of the former is playing out in California.

Federal cuts to the state’s Medicaid program will leave its health system short of billions of dollars. A California healthcare union wants an emergency, one-time 5% levy on the wealth of any resident worth over $1 billion to plug the hole.

Those Federal cuts are a small and rare spending cut victory. Raising taxes on the rich (for those who truly think that 5% tax is a one-off, I might have some beachfront property north of Santa Fe that might interest you) is the only answer Progressive-Democrats and rent-seeking union managers can think of.

The Wall Street Journal‘s news writer is cut from the same cloth. She opened her piece with this:

The risk is that the US economy becomes increasingly dependent on a narrow group of very rich households, whose spending is tied to the performance of the stock market. This could mean the entire economy pays a steep price in the next market correction.

It’s inconceivable to the denizens of the Left that alternatives exist. There are two—closely intertwined—that come readily to mind. In no particular order, they are cutting tax rates and cutting government spending.

Don’t just willy-nilly do allegedly targeted tax cuts, instead, lower the tax rates on the bottom 80% of us tax payers to the level paid by the top 20%. An easy, but all too difficult politically, way to do this is simply to reform our tax code to charge a single low flat rate on all income regardless of source—a rate in the range of 10%-15% on the sum of an individual’s income from all sources. Of course, that would include the market value of stock options on the date of an award’s vesting and other such moves to transfer income from W-2 forms into other venues. That guarantees all of us are paying the same rates and it eliminates the news writer’s plaint: that claimed dependency of the government on tax revenue from the rich.

The other component of the intertwining is to reduce government spending. Exercise true fiscal discipline, and spend taxpayers’ money only on those things truly, critically needed; stop spending on the nice-to-have goodies.

A wealth gap will still exist, but that’s neither good nor bad in itself. The gap—especially under the more equitable tax regime—is, and would be, the result of differences in luck, work ethic, and innate talent. The increased economic mobility that would obtain also would have folks on the lower rungs moving up the economic ladder as their fortune, ethic, and talent have it, and folks on the upper rungs moving down as their fortune, ethic, and talent have it.