ROSS RANTS: ROBOT JOBS

[danielsangeo]

The thing is, the media don't really report the numbers you're looking for but the government does. It's just oftentimes buried under the official numbers.

It could be I'm wrong then on that point. Wouldn't the articles about the new jobs we're getting paying less still hold up however?

 

IIRC, that's just what happens after huge recessions like the one we just had. Low-paying jobs come back first. Then, as the economy continues to improve, medium- and higher-paying jobs start to come back.

 

I liken it to a house fire. It's super fast to destroy a lot of things that took time to create. It then takes a lot longer to come back from that fire. First, you have to remove all the things damaged and destroyed by the fire before you can do cleanup, and then re-get everything lost, just to get back to status quo.

 

From what I can tell, comparing the previous recession to, say, the Great Depression, we're tracking that pretty well.

[Reverend_UshankaCat_]

What I'm worried about is that the problem might not be robots becoming self-aware, but much rather the threat of hacking. How many important parts of our infrastructure will rely on computers? Will they all have impenetrable firewalls?

Suddenly Watch_Dogs and Die Hard 4 don't look so silly anymore...

[RandomGuy]

I'm kind of tired and I sense this is something that could go on for pages with no real resolution, so I'll try and keep it simple:

 

-I'm not trying to intentionally misrepresent anything (unless it's obvious and funny), I'm just working with the best data I could find. I'm not an expert on this.

-Even if your graph is accurate, I think there are MANY other indicators that a lot of wealth is flowing towards the top, way too many for a video not focused on that. Here's a sample one:

http://blogs.wsj.com/economics/2013/09/10/some-95-of-2009-2012-income-gains-went-to-wealthiest-1/

So? This doesn't at all support your assertion that people are not getting paid more than they were 40 years ago.

 

-There's a direct rebuttal to the data you're mentioning:

http://www.epi.org/blog/compensationproductivity-link-broken-vast/

One, this blog doesn't actually address the point. It goes on about how average compensation differs wildly from median compensation (offering no real evidence to back them...) while completely ignoring the main issue, that they act like non-wage compensation doesn't exist and outright ignore 20% of the work force in order to manipulate the numbers. They try to handwave this by saying "well even compensation has cumulatively grown eight percent faster than wages over this time-period we're still right"- but by all indications, they've grown faster than that, enough to keep up with production, as shown by both OECD and the Federal Reserve. Then they lie again when they say they look at "median compensation" before they go right back to just using wages with no further comment (and never even addressing the part about excluding supervisory workers). I'm much more inclined to trust OECD when they outright state that real compensation is a better overall indicator of the benefits to the typical worker, than I am to trust this.

 

Finally, to quote OECD again on why the numbers used here are intentionally misleading:

The third difference, and the most technical, is that the two measures are calculated using different inflation indexes. The first, used for net decoupling, is calculated using the GDP deflator, while the second uses the Retail Prices Index (RPI). What’s the difference and which one is right? The answer is that it depends what you’re analysing. If you want to compare productivity and pay fairly you should use the same deflator for both—that is, the GDP deflator. But if you want to know how the purchasing power of pay is changing over time, you want to use the RPI. These two measures have moved apart very slightly in recent years, but the implication of this change for living standards is hard to interpret.

You can't use two different price deflators for productivity and pay (like the EPI did) or else the data will be disconnected from reality.

 

Two: the EPI is a private interest group paid for by the unions that has repeatedly outright falsified its 'data' (that chart was from them; as another example, they were no better when trying to argue against H1B visas). I don't trust a single word it says, and highly recommend against anyone using it as a source.

[HLPrincess]

An odd topic for a rant... Sorry Ross, but I'm afraid the european leftist propaganda got into your brains. The idea that the government SHOULD provide people with jobs, or that it SHOULD pay them just for being people is dubious.

 

He never said government SHOULD do it. It was just one of the ideas he presented in his video, and it was taken from the internet! Aaaand.... it sorrta used to be like that in Poland during "good ol' communist" times. There was a mentality like this among people too. I even remeber a saying referring to that.

And I know what I'm talking about. so... calling it a leftist propaganda is kinda insulting, it was a fact in some countries. And think next time before suggesting that something got into Ross brains *wincing viciously* and now maybe you suggest that I made Ross think like this? Because I was born in Poland? Go ahead! *wincing even more viciously*

[RandomGuy]

On the new economy making people 'unequal' (but still way richer than before, it should be noted), this can be fixed by relatively simple policies: just adjust taxes to fit the new economy. Cut outdated tax deductions that primarily benefit the wealthy like the mortgage interest deduction and put that money towards workers via tax credits like the EITC (or just do a direct wage subsidy if people aren't too prideful for that), slightly raise the top marginal income rate, and raise the real estate tax rate. This OECD paper recommends something similar.

 

Here's a practical version that can easily pass the US Congress: the mortgage interest deduction which a lot of middle class people are intent on keeping actually barely benefits the middle class ($523/year on average for families in the $40,000-75,000 annual income bracket) whilst overwhelmingly benefiting the wealthy. Get rid of it and the fed saves about $100 billion a year (98.5 if you want to be specific- again, just mortgage interest deductions). If you take that money and give it to the bottom 40% (about 60 million people) of income earners (graduate it so it doesn't suddenly cut off), then it's an additional $1,640/year for lower income workers. A lot more, once we actually narrow that bracket down to people who actually need government aid (e.g. part-time workers usually don't). Again, just one, barely noticeable tax deduction that barely benefits the middle class and, in absolute terms, wouldn't even be noticed as missing by the upper classes. There's a lot of "small" deductions like this that we can get rid of.

Edited March 23, 2016 by Guest (see edit history)

[Ross Scott]

So? This doesn't at all support your assertion that people are not getting paid more than they were 40 years ago.

That was more in response to this quote:

 

The problem isn't that rich people are eating up money, the problem is much of the growth in compensation has been eaten up by non-wage benefits like pensions and healthcare for retired workers and by supervisory personnel.

It was an attempt to show they ARE eating up more money.

 

As for the rest of your points, you probably won't like this, but I'll make this as simple as I can:

 

I think it IS fair to look at median wages (and benefits) over average since that gives a clearer picture as to what's happening. Similarly, looking at the bottom 70% represents the majority of people. There was a headline not long ago about the middle class shrinking as more people are being pushed towards lower or upper class, so we're seeing an increased stratification of society. Increased benefits for those who are already middle-upper or upper class doesn't stabilize a society.

 

I'm not an expert on this. It could be all this is wrong and you're 100% right, however, as a layman, I'm seeing both sides present good-SOUNDING information and it's difficult for me to discern the difference for who has legitimate points and who doesn't (or if it's a mixture of both). Typically in situations like this I try to look at competing experts and see who seems to have the more well-reasoned argument. We currently don't have that here, so I'm kind of lost. As such, I'm unable to properly debate this with you. I think I might be able to get a firmer grasp of it, but it would take me many hours and I have to make more videos. Again, even if the points raised by that article are completely bogus, they're presented in such a way that I can tell the difference between valid information v. misinformation (this is going to get its own rant topic later on). So I hope I'm clear here: I'm not saying you're wrong, I'm saying both sides of this debate are arguing at a level above me, so I can't tell the truth from the myth. In these situations, just seeing the argument from one side isn't enough for me, I need to have it distilled down from both to something I can understand. To put in another way, pretend you want to know what flavor jelly donuts are:

 

Person 1: They're clearly raspberry, the manufacturer states it, plus it's the sensible solution under the Law of Brookerberg.

 

Person 2: It's orange, the raspberry data is manufactured, orange has been supported by the Quantuf theory.

 

(I look up law of brookerberg and it talks about using raspberries more efficiently in pastry use. The Quantuf theory talks about the number of oranges in relation to the amount of donuts in circulation. I leave still not knowing what the fuck is going on).

 

That's where I am with this. I will say though, I have LOADS of personal anecdotes about people being harder pressed financially (though that's hardly quantifiable), however I am seeing other trends to suggest that there is wealth extraction occurring (besides the stuff I mentioned):

 

-HSBC (too big to jail) got off with a slap on the wrist for laundering money for Al Qaeda and other criminal organizations for over a decade. The DOJ let them off the hook, NOBODY goes to jail. To me this screams of regulatory capture.

-Our biggest employers are places like Wal-Mart, McDonald's, Kroger, Home Depot, Target; not places known for their amazing wages.

-We bailed out the banks and other companies, despite protest to congress from the American people. The vote initially didn't pass, but Henry Paulson and friends managed to get it through anyway.

-Areas in the rust belt are almost 3rd world status in terms of poverty, with Detroit having water cut off to people, the water recent scandal in Flint, etc.

-Lobbying has grown to the tens of millions. This suggest policies that favor those with a lot of money to spend, as opposed to average workers.

-The TPP appears absolutely monstrous and is not something that would benefit average workers. I think this is another indicator of the power shift we're seeing.

-My understanding is our money velocity is at a current low, which is not something associated with average workers having discretionary income.

-I mentioned earlier how we need about 3.6 trillion to maintain current infrastructure. That level of neglect also does not suggest a healthy economy where there is plenty of money to take care of these things.

 

Anyway, I tend to notice small trends like that which add up to a picture in my brain, and on a personal level, prior to the beg-a-thon, I would have been in trouble myself, despite my output remaining semi-constant over the years. Anyway, if things are getting better, I think I need a lot more evidence of that than what I've seen and I apologize I'm not on a level to fully grasp your arguments regarding the benefit wages. But hey, good news! The next Game Dungeon won't be on economics at all.

 

An odd topic for a rant... Sorry Ross, but I'm afraid the european leftist propaganda got into your brains. The idea that the government SHOULD provide people with jobs, or that it SHOULD pay them just for being people is dubious. Government does not have it's own money, only taxes. If government is paying someone for not having any job, that money goes right out of the wallet of the people who do have a job. Even the most advanced robots will not have an income of their own, and will not pay taxes, people will. I don't think that the strategy of encouraging the unemployed people at the expense of employed is good in the long term.

You know, I said "I don't know the answer", in the video, but I think some people hear what they want to. Anyway, as for it being overly-leftist, my answer to everyone is the same on this: If you don't like those ideas, fine, suggest an ALTERNATE solution. That's kind of the point of this, I don't know the solution, but I can predict where we're going if we do NOTHING. I'm going to disagree and say "this is not happening" is not a solution. Even if you don't believe it, pretend it IS happening, what would you suggest then?

 

and the precise machinery operates only in very VERY clean environment.

I have to correct you here. As someone who has worked on hundreds of systems before, I think what you mean is precise machinery (specifically integrated circuits) is MANUFACTURED only in a very clean environment. Once it's made, it can operate in any number of conditions, depending on its design.

 

As for your points:

 

1. I have less data on this, but I think it will vary a lot from field to field. My understanding is the amount of people getting displaced will greatly outnumber the new opportunties, creating a negative net effect.

2. This will start step by step. Robots are unlikely to replace sweatshop tier labor anytime soon, but a fast food cook? I can EASILY see how they could be gone.

3. Fast food jobs and trucking jobs are both service occupations. That's 15 million jobs right there. Again, I was never suggesting ALL jobs will be replaced, but a large enough number to cause a disruption,

4. I always assumed there would be some overseeing. Say a McDonald's has 12 people working a shift. If you had a fully automated kitchen, you could cut that number down to 3-4. So again, not ALL jobs being lost, but enough that it causes big waves.

[Heliocentrical]

What I'm worried about is that the problem might not be robots becoming self-aware, but much rather the threat of hacking. How many important parts of our infrastructure will rely on computers? Will they all have impenetrable firewalls?

Suddenly Watch_Dogs and Die Hard 4 don't look so silly anymore...

It could increase the need for security experts and penetration testers. Is there a statistic for just how many white collar jobs that would be actually lost due to robots as opposed to the increased demand for technicians and maintainers? It seems like this will be a shift in the jobs market rather then a direct loss of jobs like Ross is making it out to be. I don't have any sources to back me up on this but my point still stands. I think it's important to take all factors into consideration when it comes to calculating a statistical loss like this. If anyone has any sources for/against my claims then I'd like to see them as I have no basis for my theories to work off of.

[RandomGuy]

I'm not going to focus on the main meat of that response in light of of its content (I should note that I myself have no authority here beyond taking a couple of basic economic classes, which I plan to fix later- most of my info just comes from reading various articles in my spare time), but there are some points I feel need to be addressed:

 

I think it IS fair to look at median wages (and benefits) over average since that gives a clearer picture as to what's happening. Similarly, looking at the bottom 70% represents the majority of people. There was a headline not long ago about the middle class shrinking as more people are being pushed towards lower or upper class, so we're seeing an increased stratification of society. Increased benefits for those who are already middle-upper or upper class doesn't stabilize a society.

Except, that's not what the EPI is doing. They're looking at median wages for a category of workers while excluding supervisory workers and non-wage benefits (and using two different deflators). As a result their conclusions differ from OECD's and the Federal Reserve's. By the latter estimates, the average person (not just the statistical average) IS benefitting from the productivity increase.

 

Of course the results are going to look bad if you deliberately exclude 15-20% of the workforce (specifically a well-educated and high-skilled portion) and act like pensions and healthcare don't exist. That's where the majority of the productivity gains are going to. The truth is that labor's share of the economy is more or less at the same level it was at 40 years ago, and is constantly fluctuating throughout the decades, rather than there being a conspiracy to drain wealth to the top:

 

-HSBC (too big to jail) got off with a slap on the wrist for laundering money for Al Qaeda and other criminal organizations for over a decade. The DOJ let them off the hook, NOBODY goes to jail. To me this screams of regulatory capture.

You mean besides the fact that the Justice Department didn't have enough evidence to even indict HSBC on money laundering charges? No one ever proved that it shifted around money for the cartels or Al-Qaeda-linked banks. Rather, they proved that its internal documentation processes were inadequate to show that it had not been doing so.

 

Do you know what HSBC's violation was and why they got away with a fine? They failed to follow anti-money laundering regulations. That's not the same thing as intentionally laundering money. A $2 billion fine is also far from a slap on the wrist. As a civil charge, rather than a criminal charge, they couldn't send anyone to jail. Though, you'll never hear me object on HSBC being an incredibly shitty company; it was literally founded so drug dealers could put their profits somewhere.

 

-Our biggest employers are places like Wal-Mart, McDonald's, Kroger, Home Depot, Target; not places known for their amazing wages.

This isn't actually indicative of anything. The vast majority of workers at these companies would drift towards the lower income brackets because the vast majority have no higher qualifications. It doesn't say anything about the median worker, and it doesn't change the fact that real compensation has been consistently rising.

-We bailed out the banks and other companies, despite protest to congress from the American people. The vote initially didn't pass, but Henry Paulson and friends managed to get it through anyway.

Incredibly misleading. We bailed out the banks because the banks failing means we go into a depression. Not bailing out the banks is cutting off your nose, ears, lips, and eyes to spite your face. Even calling it a "bailout" is iffy, since what actually happened is that the government loaned money to the banks which they paid back with interest years ago. It literally costed the government less than nothing. The "American people", and everyone who complained about it costing the taxpayer money, were wrong. The average person doesn't actually know much about economics. In other news, water is wet.

 

-The TPP appears absolutely monstrous and is not something that would benefit average workers. I think this is another indicator of the power shift we're seeing.

TPP is a watered-down common sense trade agreement that's been unfairly demonized by anti-free trade protectionists (despite free trade being agreed on by almost every economist as great). It is actually very good for workers; it's of minor benefit for Americans (but a benefit regardless, due to an expanded market for US services and cheaper products- a LOT of our clothes come from Vietnam), but it's set to massively increase the income of workers in Vietnam, just like the Chinese free trade agreements, which roughly quadrupled the average Chinese income in less than two decades. That's ignoring the fact that TPP also contains regulatory rules and standards that its members must follow.

 

Removing tariffs and other trade barriers is a good thing. Economists have been explaining this since at least 20 years ago, though this argument is arguably hundreds of years old.

[spooky scary skeleton]

i'm looking forward to communism

[BTGBullseye]

TPP is a watered-down common sense trade agreement that's been unfairly demonized by anti-free trade protectionists (despite free trade being agreed on by almost every economist as great). It is actually very good for workers; it's of minor benefit for Americans (but a benefit regardless, due to an expanded market for US services and cheaper products- a LOT of our clothes come from Vietnam), but it's set to massively increase the income of workers in Vietnam, just like the Chinese free trade agreements, which roughly quadrupled the average Chinese income in less than two decades. That's ignoring the fact that TPP also contains regulatory rules and standards that its members must follow.

You have apparently never read any of the leaked documents yourself. I have. It's bad for everyone NOT in the top 1% wealth bracket, or businesses.

[RandomGuy]

TPP is a watered-down common sense trade agreement that's been unfairly demonized by anti-free trade protectionists (despite free trade being agreed on by almost every economist as great). It is actually very good for workers; it's of minor benefit for Americans (but a benefit regardless, due to an expanded market for US services and cheaper products- a LOT of our clothes come from Vietnam), but it's set to massively increase the income of workers in Vietnam, just like the Chinese free trade agreements, which roughly quadrupled the average Chinese income in less than two decades. That's ignoring the fact that TPP also contains regulatory rules and standards that its members must follow.

You have apparently never read any of the leaked documents yourself. I have. It's bad for everyone NOT in the top 1% wealth bracket, or businesses.

There's no need to read "leaked" documents (which have long been outdated), the entire text of the agreement is publicly available. The reaction to the "leak" was pointless fear mongering, as protectionists are prone to.

 

Let me guess, you're all focusing solely on the copyright chapters? Or is it the usual myth about how TPP will let corporations control governments because it sets out the guidelines for corporations to sue for arbitration (btw this is standard practice already, WTO does this for its members) if a country passes a law that says "fuck this company in particular"?

 

i'm looking forward to communism

We can try that when it gets a success rate greater than 0%.

[morse]

I'm going to disagree and say "this is not happening" is not a solution. Even if you don't believe it, pretend it IS happening, what would you suggest then?

I'm terrible at "pretend". I also would be much better in putting my thoughts into words in russian, since these are not a simple thoughts, and I'm not used to to philosophical debates in english. But I'll try.

 

For starters, the economy is a very complex thing, it will react unexpectedly (at least for us, dilettantes) to even small changes, and if we change something really BIG the probability for us to predict anything in fine detail is pretty much nil. But let's try to make some broad predictions. If the relatively expensive humans will be replaced with relatively cheap machines, that means that the production costs will drop. The goods will become cheaper, and there'll be more of them. That alone should ensure that nobody dies of starvation. More products means more GDP, more money. And while yes, most of these money MAY end up into the wallets of 1%, it's not necessarily mean that poor people will become poorer. Billionaires are generally not bath in their money like some uncle scrooge, they invest it. Which means they give it back to economy, and in this perspective, it doesn't really matter in which wallet money end up, they will always work for society by opening new projects with new jobs.

 

Actually, I can tell you a story. Two stories to be precise, of a world drastically changing, twice, in a course of just 20 years. It won't have robots in it though, but I doubt you'll read these stories anywhere in non-russian language. First story happened in 1991, when USSR ceased to exist. For us, it was literally the end. USSR was not only a country, it was an economical and ideological model. Contrary to the popular foreigners belief, it was not communism. Communism was our export product, nobody inside USSR never actually believed in it at least since the 70s. But it was an idea of a total equality and of a total government control. While Orwell taught us to believe that this is a bad thing, some people actually thought it was good: you don't need to think, you don't need to make decision. The party will decide for you: it'll give you an education (for free!), it'll provide you with a job and with an apartment. The job will be lousy and the apartment will be even more so, but it'll be given to you without you moving a finger. Your life is settled, and you don't need to do shit. And now imagine, that one day this system just collapsed. Several generations of people who didn't even know that you can actually quit your job, let alone how to find a new one, were suddenly left alone, one-to-one with the western capitalistic model. That was BIG! No robots will ever do anything like that in a million years. Based on my experience, there was a clear demarcation line between the people who adapted to the new world, and the ones that didn't. It was a line between my father and mother, both physicists, both graduated from one of the best universities, both were working in the same military-driven science that collapsed together with the country. My mother was 35 and my father was close to 40, and it was it. My mother and all her university pals adapted, learned a new specialty (totally unrelated to physics) and went in business, my father and all his pals became drunks of various degree.

 

Which brings us to second story, which won't have an ending, because it's happening right now. So, the ninetieth, the time of wild freedom, crazy money and quick and painful deaths. Kinda like a wild west, only with armored mercedeses and rocket launchers (does the armor protect from an RPG7? no, it's not). And then the fun time ends, and the age of prosperity starts in about 2001-2002. Why? No, not because of mr. putin, but because of the oil prices. The price went from $15 to $100, and the whole country started to bath in money! I was 17 at the time, and I saw how the people of my age started to dream about a job when you do nothing, but gets a ridiculously big salary. There were such jobs! Lots of them actually. Young and upcoming people without any real skill started to earn a way more that their old and experienced and skilled and educated parents. They usually said: "that's because you can't adapt to the new world, but we can". A whole generation of people, who do not really know how to do anything, except for look solid and respectful. A generation of university graduates, who didn't make anything out of their alma mater other than a big and shiny (and useless) diploma. But all the good things end fast, and now our economy is in it's usual position riding downhill, which is more like a freefall by now. All these solid and respectful people got fired quicker then you can read the name of the universities from their shiny diplomas. And... I'm watching right now how they adapt. They do, because most of them are 30 now, they have time.

 

So to conclude my overly lengthy stories, I don't know how people will adapt, but I don't think that you need to overly worry yourself with robots. Robots are the best that can happen to us

[Ross Scott]

You mean besides the fact that the Justice Department didn't have enough evidence to even indict HSBC on money laundering charges? No one ever proved that it shifted around money for the cartels or Al-Qaeda-linked banks. Rather, they proved that its internal documentation processes were inadequate to show that it had not been doing so.

 

Do you know what HSBC's violation was and why they got away with a fine? They failed to follow anti-money laundering regulations. That's not the same thing as intentionally laundering money. A $2 billion fine is also far from a slap on the wrist. As a civil charge, rather than a criminal charge, they couldn't send anyone to jail. Though, you'll never hear me object on HSBC being an incredibly shitty company; it was literally founded so drug dealers could put their profits somewhere.

See this is a good example of "one side of the story." It's long, but I recommend reading this article. HSBC had a whistleblower against it, a long trail of evidence spanning a decade, and a DOJ scared to bring criminal charges.

 

http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214?page=4

 

Here's a few highlights:

 

"They violated every goddamn law in the book," says Jack Blum, an attorney and former Senate investigator who headed a major bribery investigation against Lockheed in the 1970s that led to the passage of the Foreign Corrupt Practices Act. "They took every imaginable form of illegal and illicit business."

 

 

- - -

 

A little over a week later, Breuer was back in front of the press, giving a cushy deal to another huge international firm, the Swiss bank UBS, which had just admitted to a key role in perhaps the biggest antitrust/price-fixing case in history, the so-called LIBOR scandal, a massive interest-rate­rigging conspiracy involving hundreds of trillions ("trillions," with a "t") of dollars in financial products. While two minor players did face charges, Breuer and the Justice Department worried aloud about global stability as they explained why no criminal charges were being filed against the parent company.

 

- - -

 

A reporter at the UBS presser pointed out to Breuer that UBS had already been busted in 2009 in a major tax-evasion case, and asked a sensible question. "This is a bank that has broken the law before," the reporter said. "So why not be tougher?"

 

"I don't know what tougher means," answered the assistant attorney general.

 

- - -

 

 

But this backdoor arrangement with bin Laden's suspected "Golden Chain" banker wasn't direct enough – many HSBC executives wanted the whole shebang restored. In a remarkable e-mail sent in May 2005, Christopher Lok, HSBC's head of global bank notes, asked a colleague if they could maybe go back to fully doing business with Al Rajhi as soon as one of America's primary banking regulators, the Office of the Comptroller of the Currency, lifted the 2003 cease-and-desist order: "After the OCC closeout and that chapter is hopefully finished, could we revisit Al Rajhi again? London compliance has taken a more lenient view."

 

- - -

 

Translation: We know the guy's on a terrorist list, but his accounts are in a place the Americans can't search, so screw them.

 

- - -

 

At HSBC, the bank did more than avert its eyes to a few shady transactions. It repeatedly defied government orders as it made a conscious, years-long effort to completely stop discriminating between illegitimate and legitimate money.

 

 

 

 

Anyway, this goes on and on and your article doesn't address half of what's mentioned. This is at the core of why I sometimes need multiple sources on some topics.

 

 

As for the TPP, I'll let someone else tackle that. I will say though that you said every economist thinks free-trade is great, but it also treats the environment as an externality. China's current pollution would currently be criminal in the USA. I personally think we should reduce trade as much as possible with countries that don't enforce environmental laws, otherwise they have no profit incentive to reduce the pollution. My understanding is while there are a few weak provisions, the TPP would in reality curb pollution no more than something like NAFTA did.

[Ross Scott]

If the relatively expensive humans will be replaced with relatively cheap machines, that means that the production costs will drop. The goods will become cheaper, and there'll be more of them. That alone should ensure that nobody dies of starvation. More products means more GDP, more money.

Somebody emailed me this with the same argument. I'm just going to copy / paste my response here:

 

If the bottom line for a company drops, that's no guarantee that leads to price savings passed on to the consumer. That typically only happens in highly competitive markets. Sometimes that is the case, in other oligopoly situations, it's clearly not. ISPs are an easy target. Here in Europe, I can get 5Mbps internet for $5 as there is lots of competition. In the USA, I've never lived anywhere I could get broadband for less than $40, despite massive subsidies from the government to fund it. While Google fiber has disrupted this somewhat, for many years (and still in many other places), companies have essentially agreed to keep prices at a set range in order to optimize profits. Competition, while good for the consumer, isn't good for profits. Large corporations prefer not to compete when they have that option. The music industry is another example. CDs were initially more expensive than cassettes when they came out because they involved initial increased production costs and a more attractive product. Eventually production costs collapsed (CDs are far cheaper to produce than cassettes once outfitted), however, the prices never came down. Also, digital copies of new videogames tend to cost the exact same price as physical copies, despite lower costs. Printer ink cartridges cost far, far more to purchase than they do to produce, but again, companies have collectively agreed to keep them higher in order to maximize profits. No one is undercutting one another.

 

While it's certainly a possibility, I think there's no reason to ASSUME prices will drop if the fast food industry switched over to robotic cooks. Not only will the companies be eager to recoup their initial investment costs, but if similar deals are struck across fast food companies (or the first one to automate establishes the standards), they could remain the same. Maybe more attention could be paid to packaging and presentation (or nicer building furnishings) of the meal to try justify it in the minds of the consumer. After all, the public is already used to the current prices. Why rock the boat? Alternately, say if McDonald's automates first. Burger King might see the opportunity to undercut them by 10% once they automate later, however, they're unlikely to do so. Price wars are often not in corporations' best interests if agreements can be struck instead. It could be far more profitable for BK to continue competing with McDonald's charging similarly inflated prices than it would be to try and undercut them. It could be a losing strategy in the long term and lower profits in the short term. Either way, it means a lot of risk, another thing corporations don't like.

 

 

Billionaires are generally not bath in their money like some uncle scrooge, they invest it. Which means they give it back to economy, and in this perspective, it doesn't really matter in which wallet money end up, they will always work for society by opening new projects with new jobs.

That's sometimes true, however, money velocity in the USA is currently at an all time low (or close to it). In scenarios like that, the money is not getting invested as much as it being hoarded.

[danielsangeo]

Subs up!

[RandomGuy]

You mean besides the fact that the Justice Department didn't have enough evidence to even indict HSBC on money laundering charges? No one ever proved that it shifted around money for the cartels or Al-Qaeda-linked banks. Rather, they proved that its internal documentation processes were inadequate to show that it had not been doing so.

 

Do you know what HSBC's violation was and why they got away with a fine? They failed to follow anti-money laundering regulations. That's not the same thing as intentionally laundering money. A $2 billion fine is also far from a slap on the wrist. As a civil charge, rather than a criminal charge, they couldn't send anyone to jail. Though, you'll never hear me object on HSBC being an incredibly shitty company; it was literally founded so drug dealers could put their profits somewhere.

See this is a good example of "one side of the story." It's long, but I recommend reading this article. HSBC had a whistleblower against it, a long trail of evidence spanning a decade, and a DOJ scared to bring criminal charges.

 

http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214?page=4

 

Here's a few highlights:

 

"They violated every goddamn law in the book," says Jack Blum, an attorney and former Senate investigator who headed a major bribery investigation against Lockheed in the 1970s that led to the passage of the Foreign Corrupt Practices Act. "They took every imaginable form of illegal and illicit business."

 

 

- - -

 

A little over a week later, Breuer was back in front of the press, giving a cushy deal to another huge international firm, the Swiss bank UBS, which had just admitted to a key role in perhaps the biggest antitrust/price-fixing case in history, the so-called LIBOR scandal, a massive interest-rate­rigging conspiracy involving hundreds of trillions ("trillions," with a "t") of dollars in financial products. While two minor players did face charges, Breuer and the Justice Department worried aloud about global stability as they explained why no criminal charges were being filed against the parent company.

 

- - -

 

A reporter at the UBS presser pointed out to Breuer that UBS had already been busted in 2009 in a major tax-evasion case, and asked a sensible question. "This is a bank that has broken the law before," the reporter said. "So why not be tougher?"

 

"I don't know what tougher means," answered the assistant attorney general.

 

- - -

 

 

But this backdoor arrangement with bin Laden's suspected "Golden Chain" banker wasn't direct enough – many HSBC executives wanted the whole shebang restored. In a remarkable e-mail sent in May 2005, Christopher Lok, HSBC's head of global bank notes, asked a colleague if they could maybe go back to fully doing business with Al Rajhi as soon as one of America's primary banking regulators, the Office of the Comptroller of the Currency, lifted the 2003 cease-and-desist order: "After the OCC closeout and that chapter is hopefully finished, could we revisit Al Rajhi again? London compliance has taken a more lenient view."

 

- - -

 

Translation: We know the guy's on a terrorist list, but his accounts are in a place the Americans can't search, so screw them.

 

- - -

 

At HSBC, the bank did more than avert its eyes to a few shady transactions. It repeatedly defied government orders as it made a conscious, years-long effort to completely stop discriminating between illegitimate and legitimate money.

 

 

 

 

Anyway, this goes on and on and your article doesn't address half of what's mentioned. This is at the core of why I sometimes need multiple sources on some topics.

I've read that article before. There's a noticeable lack of evidence in all of its claims. A lot of YELLING and pontificating on how the evidence exists, but that's about it. This would have been really useful when the DOJ was handling this case, as they explicitly didn't have enough evidence to convict HSBC of money-laundering then. I wonder if this Rolling Stone author had access to secret DOJ memos the public didn't get to see?

 

Aside from that the article just confirms what I already said, that HSBC was only guilty of failing to follow proper anti-laundering procedures. You can argue about their motivations all you want, but the evidence didn't exist to convict them of anything worse in a court of law. To reflect this, part of the sentence was that they couldn't fail to follow these practices again in the next five years and had to both implement all the changes (confirmed by an independent monitor) and cooperate fully with the government investigation- lest it actually turn into a criminal indictment rather than a civil case.

 

As for the TPP, I'll let someone else tackle that. I will say though that you said every economist thinks free-trade is great, but it also treats the environment as an externality. China's current pollution would currently be criminal in the USA.

"As free trade expands, each one percent increase in per capita incomes tends to drive pollution down by 1.25 to 1.5 percent because of the movement to cleaner techniques of production." Free trade isn't bad for the environment nor does every economist view the environment as an externality. Free trade (or rather, the economic prosperity it brings) is bad for air and water pollution at the initial stages of industrialization, but later on it reduces pollution as countries become rich enough to pay to clean up their environments. We're seeing that happen right now in China, though to a small extent at the moment.

 

Unless, of course, you're framing it as the choice between having an industrial economy and not having an industrial economy.

 

I personally think we should reduce trade as much as possible with countries that don't enforce environmental laws, otherwise they have no profit incentive to reduce the pollution.

I would recommend looking at the environmental record of the USSR and rethinking that position. I would also recommend taking a look at what pollution (which isn't only generated by factories) is actually costing China in lost worker productivity. Or maybe seeing what economists have to say about this issue. A statement was given to a panel of expert economists from across the country: "Refusing to liberalize trade unless partner countries adopt new labor or environmental rules is a bad policy, because even if the new standards would reduce distortions on some dimensions, such a policy involves threatening to maintain large distortions in the form of restricted trade". They were asked to respond based on how much they agreed with the statement.

 

41% agreed (8% STRONGLY agreed)

18% disagreed (none STRONGLY disagreed)

40% were uncertain or had no opinion

 

The economists who agreed also had higher amounts of confidence in their answers than those who disagreed.

 

Besides that, China has been cutting down on pollution in the past few years, passing a landmark green house emissions limit back in November 2014 (it promises to increase its use of energy from zero-emission sources to 20% in the next 15 years, and is currently investing heavily in wind and nuclear power). Given their current economic problems, you're not going to bully them into enforcing stricter regulations and cutting down their pollution even more by cutting off trade; if anything you'll get the opposite of your intended result since now everyone in the country just lost a shitload of money. It's also fairly unethical to reduce 1.4 billion people to abject poverty (which ending trade with China would result in, see the average Chinese wages before and after the implementation of free trade) because you care more about the environment than 1.4 billion people.

 

If you're so concerned about the environment, your average Western uses many times as many resources as the average Chinese person while producing two to five times the pollution per capita. I don't see any of these people volunteering to swap places with Chinese peasants.

 

My understanding is while there are a few weak provisions, the TPP would in reality curb pollution no more than something like NAFTA did.

The TPP is more strict on air pollution than NAFTA was and is a net good in this regard, though there's no way to know how effective it'll be until it goes into action (people have barely focused on the environmental aspects). Enforcement of the Montreal Protocol, the International Convention for the Prevention of Pollution from Ships, CITES, and the Convention on International Trade in Endangered Species of Wild Fauna and Flora will all be required. Failure to comply with these rules could result in economic sanctions. I'll also repeat again that it will result in massive increases to the income of Vietnamese workers, just like the trade agreements in China quadrupled the manufacturing wages there overnight. Being against it if you want to increase environmental standards and help the poor is insanely counterproductive, especially since it's not like TPP is coming in and crushing a better proposal. Does that just not factor in because "it doesn't do enough about pollution?"

 

On that note, TPP is just the warm-up for the real prize, FTAAP, basically a Pacific NAFTA. That'll be great when (if) it finally passes.

[Heliocentrical]

This is slightly off topic but I thought most of the uproar against the TPP was due to the statements it made in regards to such things as copyright and DRM circumvention. I really can't say about much about the majority of the TPP. But I certainly wouldn't be in favor for enforcing punishment against people who circumvent DRM. I'm kinda surprised that Ross didn't already bring up that section of TPP as it ties in directly to killing games.

 

Speaking of which I'm gonna start drafting some unofficial articles for the movement against killing games. Once the list is done Anyone's welcome to follow/not follow them as they see fit. I'm not hijacking the entire movement but the overall lack of a foundation has been really bugging me. If Ross doesn't have the time to establish some groundwork then I understand. He's got a ton on his shoulders as is with Game Dungeon, Ross Rants, The Movie and being a spokesman for the movement. I'm more then willing to do this of my own accord. Again I cannot stress enough that these will unofficial articles and no one is obligated to follow them. I'm doing this for myself because I want a guideline to follow and if you want a guideline to follow too then cool.

[RandomGuy]

This is slightly off topic but I thought most of the uproar against the TPP was due to the statements it made in regards to such things as copyright and DRM circumvention.

I would assume so.

 

I really can't say about much about the majority of the TPP. But I certainly wouldn't be in favor for enforcing punishment against people who circumvent DRM. I'm kinda surprised that Ross didn't already bring up that section of TPP as it ties in directly to killing games.

All TPP really does is expand US law to other countries so the USA can profit from its IPs overseas. I'd be a lot more receptive to this argument if there was about to be some copyright law reform and it was ruined by the almighty TPP, but that is simply not the case. I don't really want to get into this, but it is simply not an issue that matters to most people. For the most part only a subset of 18-35 year old people on the internet care about it. (coincidentally, these people don't vote much). Anyway, the general population in all of the involved countries heavily support the TPP, because the average citizen in a TPP country isn't going to care that US copyright laws are now the norm. Instead they're going to notice something like "hey, those shoes I wanted are 20 bucks cheaper", or maybe "wow, I'm making literally three times as much as I was ten years ago and my country's GDP per capita is no longer lower than Congo's!".

[Ross Scott]

Besides that, China has been cutting down on pollution in the past few years, passing a landmark green house emissions limit back in November 2014 (it promises to increase its use of energy from zero-emission sources to 20% in the next 15 years, and is currently investing heavily in wind and nuclear power). Given their current economic problems, you're not going to bully them into enforcing stricter regulations and cutting down their pollution even more by cutting off trade; if anything you'll get the opposite of your intended result since now everyone in the country just lost a shitload of money. It's also fairly unethical to reduce 1.4 billion people to abject poverty (which ending trade with China would result in, see the average Chinese wages before and after the implementation of free trade) because you care more about the environment than 1.4 billion people.

 

If you're so concerned about the environment, your average Western uses many times as many resources as the average Chinese person while producing two to five times the pollution per capita. I don't see any of these people volunteering to swap places with Chinese peasants.

 

That article is over a year old. Since then we've seen levels of air pollution in Beijing 40x the safe limit:

 

http://www.theguardian.com/environment/2015/dec/07/beijing-pollution-red-alert-smog-engulfs-capital

 

According to this one, air pollution is killing 4000 people a day in China, accounting for 17% of all deaths:

 

http://www.cnbc.com/2015/08/18/china-air-pollution-far-worse-than-thought-study.html

 

To me, that's a totally unacceptable cost of doing business and means we should rethink how we're doing everything. It actually HAS improved overall in 2015, but only by about 6% since 2014, which I still think is insane for what's essentially a state of emergency.

 

China is a massive country, of course it won't be all polluted. But pollution levels in key industrial areas are simply atrocious. I think it's largely the result of our manufacturing base being moved there. We had godawful pollution in the Rust Belt previously, and LA was known for very bad levels as well. I think it has less to do with us cleaning it up, and more with us outsourcing it. I am very aware that Western demand contributes to this. I would scale down everything I did if I thought that would impact things, but I'm just an individual, this would have to be a macro-level effort. I think the only sane way to reduce pollution will be to reduce resource use across the board, though that's not something our culture is accustomed to.

 

I also think you're framing the situation in a dishonest manner. I don't consider trade restrictions based on practices that would be illegal in our country because of how harmful they are to the environment to be "bullying." Furthermore, you're implying that 1.4 billion Chinese living in poverty is entirely the USA's responsibility with signing a trade agreement with them. Why is the fate of that many Chinese suddenly the USA's responsibility? Furthermore, calling it unethical, feels more like a blackmail tactic in discussing this. It reminds me of Congress calling awful legislation something positive. Like the Patriot Act taking away a massive amount of rights. Surely, you're a patriot and not anti-American, regardless of what's written in that act? I see this tactic as the same thing.

 

I feel that entire framing is disingenuous. It's looking at one single element to a very complex problem and taking a "you're either part of the help, or part of the problem" attitude and is a way to shut down discussion and is not a process that leads to finding better solutions. If a modification was made to the agreement that we would agree to trade IF more stringent environmental laws were enforced, would that suddenly jeopardize the entire population of China, or more likely, would they still agree, but then the companies running these would make less profits because they would have to invest more money in cleanup and pollution control? Now your point about how other countries would move in is certainly a possibility, however, I think that's saying the environment is screwed either way, and better to make money off and be part of the problem than not. I think leading by example would be the better approach, even if that doesn't maximize profit. The economy would have to be shored up in other ways, which again, why this is a very complex problem.

 

The thing is, implying that not moving forward with trade that I believe will exacerbate the pollution situation I feel is extremely short sighted. You framed what I said as caring more about the environment than the people, which again, I find disingenuous and it's trying to make me look like the villain, when in reality I think what we're doing would not be a "solution" at all, except for the short term and would make things worse in the long term. Say we sign it and see prosperity among the Chinese people for a few years. How many are going to die from cancer because of the increased industry? How many will be dead 20, or 40 years from now because of long-term damage to environment? Furthermore, does this establish a precedent that it's just okay to pollute for profit, making laws in the future more lax, leading to even more deaths from it? Of course I don't want the Chinese people to suffer from it, but I think we're borrowing against the future if environmental factors aren't considered. I care about humanity as a whole, not just for today. Taking out a payday loan to pay for groceries and rent today is great for the short term, but creates far more problems in the long term, I see a lack of concern for the environment to be the same thing.

 

Anyway, I feel like this could go on for ages and you likely have many varied points, but I can't debate this sort of thing any further with the tactics you're using, sorry. Specifically, presenting what I consider 2 flawed approaches to a complex situation, then saying I'm unethical and don't care about people if I'm against option A. I think it's ironic that you're calling me being wary of legislation that I think will harm the environment as "bullying", all things considered. Anyway, you're free to discuss this more of course, but I think I'm done with discussing this with you, since I need more of a rational discourse to finding out the truth of the matter. Your accusatory approach is not how to win me over on anything.

[morse]

And now the reality itself decided to enter the spotlight and gently explain to us that robots overthrowing the humans is only a matter of time.

 

A matter of hours to be precise

 

http://arstechnica.com/information-technology/2016/03/microsoft-terminates-its-tay-ai-chatbot-after-she-turns-into-a-nazi/