Mr. Barack Obama
President of the Executive Branch
United States Government
Washington, DC
Dear Mr. Obama:
In your recent interview with NBC News you explained that your policies would promote more private-sector job creation were it not for (as you put it) “some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”
With respect, sir, you’re complaining about the source of our prosperity: innovation and the increases it causes in worker productivity.
With no less justification – but with no more validity – any of your predecessors might have issued complaints similar to yours. Pres. Grant, for example, might have grumbled in 1873 about “some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank that uses a modern safe and so employs fewer armed guards than before, or when you travel on trains which, compared to stage coaches, transport many more passengers using fewer workers.”
Or Pres. Nixon might have groused in 1973 about such labor-saving innovation: “You see it when you step into an automatic elevator that doesn’t require an elevator operator, or when you observe that polio vaccination keeps people alive and active without the aid of nurses and all those workers who were once usefully employed making iron-lung machines, crutches, and wheelchairs.”
Do you, Pres. Obama, really wish to suggest that the innovations you blame for thwarting your fiscal policies are “structural issues” that ought to be corrected?
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030
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He’d say “Ofcourse Yes” – “Innovations are what is killing job growth – if only I could pass legislation that would place a “Moratorium on Brains” all would be well – The real problem is that the US economy creates new ideas and so destroys jobs”
Obama has a real problem with our ability to innovate – our use of energy when we innovate – our economic growth because we innovate. Ignore what he says about what he wants our economy to do – Watch what his policies have actually done to keep our economy in the doldrums and what else is in the pipeline … Oh yes, Obama has a real problem with how we innovate and grow
Muirdouche is unabashedly foolish! LOL
Don,
It’s incredibly strange to hear someone who is extremely sympathetic to the Austrian School jump on the President for espousing that much of our unemployment problem is structural. That’s the main argument that’s come from the Austrian School since 2007 (and the argument that came from the school during the great depression). Even many non-Austrians, such as Arnold Kling and Tyler Cowen, have spent a lot of ink arguing that the U.S. is largely experiencing a structural problem of moving people out of sectors where they are less productive into sectors where there more productive.
For the record, I think this is largely wrong and that unconventional monetary policy would show big dividends, if it were tried. But with the statement, the President is agreeing with you, not me.
It’s as if you’re having trouble keeping track of your own B.S.
What the … ?? How does structural problems translate to “ATM’s are a problem”?? It is “creative destruction” that has allowed us to expand and grow – unlike many economies that remain mired in their own mess … and that is precisely what Obama wants – stop any/all creative destruction and leave it to GOVERNMENT – What Obama is also complaining about is that the private sector seems to want to do what it wants and is not consulting with him prior to doing what they want … Obama cannot understand why he is not THE central authority on the economy – the economic dictator who can fix everything – these pesky innovatgors keep inventing things, changing industry and making his job difficult
I have to say however that Obama has done more in 2+ years that any President in History to impose so much uncertainty and bad policies that he in effect has imposed a “Moratorium on Brains” – those that can are waiting to see what else he will do to make their live difficult
“Obama wants – stop any/all creative destruction and leave it to GOVERNMENT”
You just made this up. It’s not in the quote, and the President has never said anything like it.
He just gave a few examples of labor saving technological change and noted that it may be contributing to current unemployment. The same explanation has been given by economists for jobless recoveries since 1992. Seriously, go read some Arnold Kling blog posts or Tyler Cowen’s TGS. Go read some Austrian school op-eds on the ineffectiveness of aggregate demand policies, almost all will make some appeal to structural difficulties moving workers into new industries where they can be more productive.
[The Austrian Business Cycle explanation is actually very similar to the Real Business Cycle explanation on this point, though the theories differ in the causes that lead to an economic downturn.]
It’s amazing how many people can espouse a view and not even really recognize what it means, including professional economists like Don.
Re read Don’s post. He was clearly pointing out that innovations have always been commonplace, so Obama cannot argue that creative destruction is some NEW think that is preventing his policies from functioning. You seem to think that Don thought that OBama was saying that he hates innovation for causing unemployment.
tkwelge,
It’s so funny that you say that, because that is exactly the argument Paul Krugman gives against the Austrian school.
You can read PK’s argument here:
http://krugman.blogs.nytimes.com/2010/04/07/martin-and-the-austrians/
And Kling’s response here:
http://econlog.econlib.org/archives/2010/04/a_simple_reply.html
The point is that this quote from the President is supporting Kling and the structuralists that Don has been supporting the last three years, and goes against what we might call the Krugman-Mankiw-Sumner synthesis that argues that aggregate demand can and should be stimulated.
I think Don just enjoys scoring some points for short witty retorts that light up his blog comments (we all respond predictably to incentives, no?), but in doing so, he draws attention to the fact that he doesn’t have an internally consistent view of macroeconomics (then again, why should he? He’s not a macroeconomist and has proudly dismissed most of mainstream macro.)
Based upon the above article you could conclud that less Government
would lead to a more efficient Government. I bet we could fire the
majority of Washington D.C. goverenment employees and improve the
efficiency of the Government, Start with the White House, Congress and Representative then all the excess beauracracy in Local and State
government. Heck we might actually balence our Federal budget and get out of debt. This is getting better and better as times goes on.
JM, less govt. is better govt! I agree with you 100%. We are top heavy in govt. employees, rules and regulations. We need a more efficient govt. – which translated means cut it by 2/3, and keep only the people who produce. Institute Term Limits from 8-12 years and then out of govt. If they refuse to give us Term Limits we can institute it on our own by voting out any politicans who has served more that 12 years – no matter what side of the aisle they are on. We need to continue to mow em down by downsizing all govt. agencies and eliminating some of them, e.g. the Dept. of Energy (a waste of money plain and simple). Curtail the power of the EPA which is out of control-over the top and counter productive. Scale back the IRS by enabling a flat tax. Stop sending money overseas and start charging a lot more for wheat and corn et al, i.e. If they raise oil prices we raise food prices in lock-stop. We also need to get the incompetant out of the white house and get a real person in there, maybe someone who knows something about economics and business cycles. Lastly we need to curtail the Federal Reserve and get Bernacke out of there before he totally deflates the dollar with his printing presses.
I agree with you almost 100%…. I think that the term limits should be 4- or 8 years. (8 years max) The longer they stay, the more corrupt they get! Now, who would you propose and how would this person oversee all this policeing of agencies and positions? I’m with you 100%…….
Thinking outside the box! The Obama administration makes Armagedden seem redeeming. Thank you LORD, bring us home… then give ‘em hell.
As I read the above letter, and remember that interview were there was also mentioned that the American work is too productive for the rest of the world,to
that I would like to ask, what’s wrong with that? If we are so productive,why are we in debt and out of work? Oh I’ m sorry You stupid Washington idiots decided it would be a great idea to send our companies and our jobs to all these third world enemies of America and now we borrowing money from China and the like cause our corporate tax base is so small it can’t pay for all your idiot spending. This doesn’t include the fact that all the free trade agreements have killed the tariffs on imports from these enemy states,gutted the manufacturing base jobs that the middle class workers build their lively-hood on. All these Washington Idiots have to say is “AMERICAN workers are to productive!” WE should be China ,building the best ,exporting the best, and loaning the money to the rest of the world so they are in debt to us, not us in debt to them!
one Really pissed off American
These innovations lead to free time amongst the people. Free time leads to, among other things, education and formulation of opinions. When the population can form its own opinions it may have the ability to rise against its Marxist leaders. Of course Obama is against this.
Explain me the logic of how a suddenly unemployed factory worker uses his “free time” to get re-trained for a more advanced position. What a crock of hooey!
In the past, many families could not get by unless the combined work hours of Dad and Mom were at least 60 per week. That’s because they were low productivity workers with low wages. Workers who are more productive make more money per hour. Therefore, they can work fewer hours while still maintaining a good lifestyle.
Productivity also affects house and yard work. Electric refrigerators eliminated the need to shop frequently or to chip ice for the ice box. Power lawn mowers reduce the time needed to cut grass. Microwaves, dishwashers, washing machines, permanent press clothes, disposable diapers, etc. have increased the productivity of homemakers and given them more free time. Online shopping is more productive than walking or driving to stores.
In our modern society, we have a higher quality of living and more free time than all but the wealthiest few a half century ago.
Some people use some of their vacation and leave time, as well as weekends and evenings, while employed, to develop additional skills that may or may not relate to future employment possibilities. Some people don’t feel any such need to develop their skills and abilities. They are not prepared when forced to look for other opportunities. Those people are not likely to benefit from government job training programs, either.
Caterpillars don’t poof into butterflies with an explosion of smoke.
My dad worked his whole like at a steel pipe shop, wearing steel-toed boots the day he retired. This past summer, I did my MBA internship at a steel plant. Working on a computer, in the air conditioning. It’s entirely possible my child may never even see a steel mill in this country, and will work on products we can’t even imagine now.
You’re lucky your dad got to retirement. So many millions of other men were laid off permanently WAY before hitting 60.
Yes. And some were hit by cars, some had heart attacks, some started their own businesses. What is your point?
Being able to find one person who was harmed by a policy is insufficient. Even 10 people, or a 100. There are two questions which direct us to the relevance of a policy:
(1) Does it do more harm than good? (or more good for more people, than those harmed) …and…
(2) Who has the moral *domain* of action. i.e. Who is allowed to make the decisions, free from force. If it’s your factory, you do what you want. If it’s not, you do not get the over-riding moral right to use government force to push your will.
I can’t believe that anyone in this thread would actually try to make the argument that we are wealthier, healthier, and more prosperous over time. There may be local dips, but over 10 years, 20 years, a generation, two generations, people are vastly better off.
Does anyone here doubt that if the economy was growing, unemployment was dropping, consumer prices were stable and stock prices were skyrocketing that President Obama would be taking all the credit? In that circumstance would he not claim that it was “his” brilliant policies that made all the difference? Yet with the economy stalling, if not receding, it can all be blamed away on externalities beyond his control. I fully expect him to bring up our “national malaise” as yet another reason why his policies have yet to reveal their true brilliance.
Re: national malaise – there are several reports indicating that they are already blaming people for the state of the economy – and a stead fast refusal to acknowledge that THEY had anything to do with the state of the economy … it is all someone else’s fault …
You mean, the way Democrats are always giving President Clinton credit for the economic boom of the 90s, saying that his tax hikes somehow did it? (Ignoring the tremendous gains in productivity that were occurring due to the PC revolution, software, and connectivity.)
The 90′s was a return to low interest rates after the high interest rates of the 80′s, which were put in place in response to the inflation of the 70′s. Global inflation had also hit a low point during the 90′s thanks to financial collapses that occurred throughout asia and south american since the 80′s and throughout parts of the 90′s. The 90′s were a perfect storm monetarily.
Well, he’s an idiot when it comes to the real world outside a classroom. I wish he had better advisors, but would he listen to them? He’d assume they were capitalist spys from the Republican party. LEE
Lee: I don’t think Obama is an idiot (although his understanding of economics is, like too many people’s, lacking). The far-better explanation for Obama’s utterances of this sort is that he’s a politician. He responds to incentives, quite predictably.
I don’t actually think his understanding of economics is lacking. His understanding doesn’t mesh with his political beliefs and the reason he was elected. Just how much of a traitor would he appear to his supporters if he pushed for a smaller role for the federal government? The folks at Kos and HP already believe he isn’t socialist enough.
I think his understanding of the economy is not lacking, he is achieving his goal of dependency to preserve political power.
I agree with you.
indeed! Dependency creates worshippers. I have not left the gravy train of depending on statist US military. But, I am not in Muirgeo boat or Keynes boat.
Like most collectivists, he holds to fiat economics where intentions are never contradicted by the means or reality.
Very true Sir, Mr. Obama is playing to the masses. The average product of our education system does not understand innovation, efficiency, productivity or creative destruction when they are told repeatedly that it is the fault of greedy corporations trying to destroy workers rights and the middle class (I hate that term).
What would his “better” advisors” advise? And what would be the positive outcomes?
What would you advise, Muirgeo? A federal moratorium on labor saving innovation? Do you mow your lawn with a pair of scissors? Do you forbid your wife from using a dishwasher? Or a washing machine? That would certainly “stimulate” the demand for labor in your household.
A 32 hour work week!
with 40-hour pay of course.
That’s been tried. It leads to a much lower standard of living and ultimately, government bankruptcy.
Or are those the goals?
You can get that now dumbass, or do you mean that everyone has to work a 32 hour work week? How would mandating people to work less increase standards of living?
Ken,
I think our Dear Ducktor resents Kaiser insisting that he spend more than 32 hours=a=week (mis)treating children.
His time could be spent far more productively on carbon-spewing pilgrimages to Exit Glacier where he communes with Mother Gaia to complain about all the carbon being spewed by nonbelievers in The Church of Anthropogenic Climate Change (formerly known as The Church of Anthropogenic Global Warming), which is ruled by His Holiness: The Divine Prophet Algore I.
I hope my post isn’t too long to suit Mezzoduomo.
Nice. First ban productive work for the least productive individuals (minimum wage) then further forcefully restrict the earning ability of almost everyone else. What did people ever do to you, to make you so malicious towards them?
Such crap. 32 week is meant to cause hiring of more people, causing less efficiency and added costs. So as prices rise due to higher costs, people will have more money? Take your FDR lunacy to mars. FDR was a horrible president that made the depression great.
And probably everyone of you works a 40 hour week and has never questioned how or why.
Seriously …. you all deserve serfdumb.
Why not 30? Or 16? Or 8?
muirgeo,
I work 40 hours a week because I CHOOSE to. I have had a number of jobs (over 20 as an adult) working as much as 70 hours/week and as little as 15 hours/week. Most just filler to get me a little spending money, but a few are long lasting. I work what I work now because it is the best trade off for income, time off, and benefits. All of it freely chosen.
I question my work conditions all the time, which is why I’ve had so many jobs. If one doesn’t work out, another will. For a time anyway. I get bored pretty easily and move on when I want. I take full advantage of the free market in labor. The free movement of living one state, then another without having to answer to schmucks like you, always trying to determine what I should do with my life, when I am perfectly capable on my own.
Regards,
Ken
And probably everyone of you works a 40 hour week
You’re a typical slimy Democrat. So much safer, and more fun to play with our money than with your own.
You hate the forty-hour work week so much? Put your money where your mouth is. Start your own practice, and pay your doctors nurses, and receptionists 40 hours’ wages for 32 hours of work. Why, I’m sure you’ll have doctors busting down your doors to work for you – you’ll have the largest practice in the Bay Area in no time!
Come on, ducktor! Leave the security of Kaiser, and put your own brilliance to work!
BTW, Ducktor,
If allowed to vote on it, how would you vote on San Francisco’s anti-circumcision law?
Lower taxes, less government interference, lower barriers to entry, etc. And of course, STOP RUNNING TRILLION DOLLAR DEFICITS AND CUT THE DAMN BUDGET.
…And the positive outcome might be the slowing and eventual reversal of capital flight.
Please elaborate on your right-wing talking point. Capital has been flowing (flying) to China, and Boudreaux applauds it. Why don’t you?
Why is that a right wing talking point? Are you opposed to capital remaining in the US?
Please stop screaming your smug, know-it-all, ranting, trolling nonsense. You are no more than a peasant and Tea Party patsy for the well-to-do. It is scary that rednecks like you are allowed to own guns to do harm to wildlife. To the woodshed with you with a hickory stick!
P.S. Where were you educated and who paid for it? The educational system failed you.
Dung,
“Please stop screaming your smug, know-it-all, ranting, trolling nonsense.”
Saying that politicians should stop putting other people in debt is “smug, know-it-all, ranting, trolling nonsense”? Do you understand what any of those words mean?
“To the woodshed with you with a hickory stick!”
Again, you do you do your namesake proud for wishing violence on those with whom you disagree.
“Where were you educated and who paid for it? ”
My parents paid for primary and secondary schooling for me. I paid for my BS and MS.
“The educational system failed you.”
My primary and secondary schools surely did. Other than Shakespeare, I read no quality literature till I was an adult. And we only read Romeo and Juliet, in which my teacher focused on the sexual mores of the play and compared it to today’s sexual mores. Never did she discuss the tragedy of circumstance, the primary purpose of the play.
I remember my history, sociology, and english classes simply being indoctrinating classes about the terrible west, its consumption culture, and its terrible racism. Not until AFTER I graduated high school did I start to read Melville, Eliot, Yeats, Dickinson, Homer, Socrates, Plato, Aristotle, etc. Any reading of the constitution came with the requisite slave owning founding fathers and hypocrisy comments. No where to be found were the Federalist or Anti-Federalist Papers.
I was constantly told in elementary school Reagan would probably nuke us all. I was told through all 12 years of primary and secondary education that the ozone would disappear, we would run out of oil, acid rain would deforest the world, mass starvation would occur, and civilization would basically collapse if we didn’t follow the leftist agenda. Thankfully I graduate in the early 90′s before global warming hysteria took off.
The mass hysteria I remember in school is yet another reason gov should NOT run any educational system.
Regards,
Ken
Are you now, or have you ever been, a follower of Lyndon LaRouche?
Sam,
I don’t know who that is.
Regards,
Ken
Ken, That question was directed at Mao_Dung
You are probably right, most likely gordons education was pre-old hippie teacher indoctrination and doesn’t grasp the concept. The industrial revolution in america born of free will under the evil guise of capitalism just got lucky when it just happened to supply the world with materials and free men to defeat the Nazi’s, japanese Imperialism, and mussolini’s Facism. What a wonderfull world it would be. (Almost forgot Soviet Communism)
What _exactly_ would you cut from the Federal Budget to pay for the tax cuts? And why do we need tax cuts? Our corporate tax rate is the lowest that it has been since the 1950s (http://bit.ly/1ZI5yE) and, while American corporations are not having a difficult time profiting (just look at GE, Exxon, etc.), American workers are struggling with wages that have dropped and are continuing to drop in real terms year over year due to inflation and the rising real price of goods.
As a counter-example, Germany is Europe’s strongest economy, a model for countries around the world. Its workers have benefits, such as universal health care (with a private option) and six weeks per year of vacation, that far outweigh even those of upper-middle-class Americans. And the country’s exports have consistently outpaced its imports for the past ten years (http://bit.ly/mqiiBs).
Also, can you be specific about the barriers to entry that are preventing innovation? I personally know over 10 individuals who have started companies with SBIR grants (http://bit.ly/lfOKW6) from the NSF. Each of those grants was used to pay for anywhere from 2 to 10 employees each to build new products and services that could grow our economy. And these people were all in Massachusetts, a state in which the cost of doing business is said to be 22% higher than the national average (http://bit.ly/bvFqDk).
And what government interference is stopping business growth in this country? Aside from perhaps raising prices of certain goods because regulations prevent companies from turning public land in to a toxic dumping ground that kills people and wildlife (http://bit.ly/1aaMFi ; http://bit.ly/tQd7e ; http://exm.nr/k1VkIV). Is it a coincidence that as soon as Koch left the NIH board that formaldehyde, a chemical that is produced most by one of his companies (Georgia-Pacific), was labeled a carcinogen? (http://bit.ly/l3NT0o)
In short, what leg do you have to stand on in your claims that the US needs any of the things that you’re suggesting?
“What would his “better” advisors” advise? And what would be the positive outcomes?”
One example of what “better” advisors could advise would be regarding healthcareRead Arnold Kling’s book and excellent articles/blog posts about how to reform medical care and insurance:
http://www.amazon.com/gp/product/1930865899/qid=1143466201/sr=1-1/ref=sr_1_1/102-6738601-6739301?s=books&v=glance&n=283155
The positive outcomes would be a medical care system where medical costs are more clear, and therefore resources are more efficiently allocated.
Another example, with respect to healthcare, that better advisors could advise would be to strip the FDA of its regulatory authority, as discussed here:
http://www.independent.org/newsroom/article.asp?id=1500
Executive Order: From now on, all excavation work on government-funded job sites will be done manually with tools no larger than small garden trowels. This will employ far more people….
Watch it … I am sure he believes that – He may demand that Congress pass legislation demanding and requiring of such from all that want to do business with the Federal Government
No lets use efficient machines to increase productivity, hire more workers and cut our hours ….
muirgeo,
Nothing prevents you from doing just that. You can start a business, work hard, then as you build capital, use machines to do manual labor if you do it. Then you can work fewer hours.
Or you can work your ass off, build capital then start hiring people to do work for you. You can use this work to cut back on your hours, or you can expand your business.
You keep making suggestions for things you can ALL READY do. What you’re really suggesting is that we do what you say, regardless of what our individual preferences are.
Regards,
Ken
This is a relatively legit argument. I know how I would answer it (in two reasons), but I’d rather hear Don’s take if he’d be willing to answer. This is one of the better moments of possible idea exchange and theory explanation here, so let’s don’t just crap on his point.
To rephrase the question, if I understand Muirgeo right, why not refold the efficiency dividend into one of two purposes, (1) hire more people, (2) keep the same people, using the efficiency dividends to pay the same for less work. (possible 3, some mix of the two)
I’d prefer to hear Don’s answer first.
I won’t answer for Don, but I’ll point out what Ken has been saying is that you’re free to do so with your own company. Our objection to Yasafi is, that because HE thinks it’s a good idea, it should be a law
Henry Hazlitt does an excellent job of explaining the “40-hour work week” vs. the 32-hour government-mandated work week in his book “Economics in One Lesson” here: http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf
Chapter VIII (8)
The book is an easy and fun read.
Before he came into office, O was clear that he was a redistributionist. When asked why he would raise capital gains taxes when it never increased revenue, he said he did not care because he wanted to “spread the wealth”. That alone shows incredible ignorance. Capital is what creates wealth. It gets disbursed based upon individual merit in satisfying the needs of others,.
When O’s econ policies were adopted, I changed my view from considering his policy born of ignorance to intent. He calculated the crisis was excellent cover for his gradiose policies (Obamacare, regulation, green jobs, paying back the public employees, etc.).
Only he did not recognize how quickly these policies after similar policies of his predecessors would tank the economy so deep that his political life has been endangered.
Thankfully, as my father-in-law always tells me, “the market always gets you”.
Crisis is the playground of the tyrant
I am unceasingly amazed when people say Obama ran on a centrist platform. Any two speeches gave his simplistic, socialist views away.
What I’d really like to hear about, is the MSM story; for much of the primary, he was portrayed as an inexperienced, almost bumbling community organizer with no chance to win. Almost overnight, he became a thrilling speaker with amazing foresight. Hillary was finished from then on.
Something happened. Was it that the Dem establishment endorsed him? It was a very abrupt change, and certainly the Right has no ability to stick to a story like Progressives do.
There’s another irony in all of this: While people certainly would have innovated away labor in many cases anyway, often government policies that increase the cost of labor to employers have pushed this faster.
ONE of the possible reasons we have things like self-checkout lanes and self-service gas stations (not entirely sure these are great “innovations” by the way) and even automatic elevators are almost certainly rooted in higher labor costs…things like minimum wage laws, etc.
Of course I’m not claiming that higher labor costs are the ONLY reasons for these things, nor am I claiming that higher labor costs are ONLY the result of government policies. But…the types of labor policies that Mr. Obama favors are certainly the kind that do increase labor costs to businesses and incentivize them to start looking for and even “innovating” ways to use less labor.
Demand curves slope down.
So, if someone were to tell him that, he may figure out – Oh, increase in Government employment and regulations reduce private sector employment through innovation? Ah yes – More Government Jobs then! … (wait … he IS doing that now … so, yea, I’d say he knows exactly what he is doing and why)
It also explains protectionism, if one believes it possible to ‘manage’ an economy within political borders, prices pretty much independent of a global economy.
In that scenario, one could raise everyone’s wages and all would be fine. Remember, the goal is AG (whatever that means) and full employment; not productivity or innovation (in fact most innovation is killing the planet).
Coincidence? Ohio has a ratcheting, inflation indexed minimum wage law. Within weeks of the first increase taking place under that law, a fair number of large retailers in Columbus switched on their self check-out kiosks. Oddly enough, the jobs that were eliminated were not minimum wage jobs. It was higher wage jobs that got replaced with technology so that the minimum wage laborers could be paid more.
“While people certainly would have innovated away labor in many cases anyway, often government policies that increase the cost of labor to employers have pushed this faster.”
But this is a good thing. Drudgery is drudgery, and if the government can incentivize an invention that makes drudgery uneconomic without destroying the economy in the process, we should be ecstatic. The problem we face is how to innovate away mass employment in making things machines can make AND still provide access to those things. We have not yet cracked that code: we still use jobs to make things and to earn things. But that’s just a technology. We need a better one.
Those whose heads explode at the suggestion of a mandated 32-hour week should remember that the 40-hour week is mandated, too. We tried that, and it didn’t work out so badly, except in the minds of those who think it did. If we are 20% more productive than when the 40-hour week was introduced, we should be able to handle 32.
I don’t like the idea of a 32-hour week. I think it wastes the fixed costs associated with hiring and being an employee. If you’re gonna hire a guy, and he’s gonna drive to work, let him spend the daylight hours there doing something productive. But I have no problem with the idea of government legislating minimum wages and maximum hours, as they have done for years.
I prefer a shorter work life – public service before starting a career, and retirement at 62. And one earner per family, as a social norm, not a government mandate. But the robots are coming, and we all have to work so hard to make stuff we all could use, if we could figure out a basis for distributing it, a chore, which, I believe, is beyond the talents of the private market because it requires coordinated changes in how we compete.
Nemoknada
“But this is a good thing.”
This is NOT a good thing. Think of the following situation:
Employers want employees to perform task T at price $X/hour. People want to be employed doing task T for $X/hour. Government says $X/hour is too little for performing T, so jacks the price to $(X+Y)/hour. However, there is a Z such that 0 < Z < Y and the price of automation is $(X+Z)/hour. Government ARTIFICIALLY increased the price of performing T if done by people. This introduces an inefficiency precisely equal to $(X-Z)/hour. Thus the economy as a whole isn't realized $(X-Z)/hour that it otherwise would have because government interfered in the market. This inefficiency results in less overall wealth than there otherwise would be.
"Those whose heads explode at the suggestion of a mandated 32-hour week should remember that the 40-hour week is mandated, too. "
Believe me I know this and the mandatory accounting practice of using 40 hours/week should be eliminated too. It's an infringement on the liberty of contract. If I want to work more or less or whatever and I can come to an agreement with an employer, it's none of your or the government's business.
"But I have no problem with the idea of government legislating minimum wages and maximum hours, as they have done for years."
Are you unaware that both of these laws increase unemployment, particularly for the unskilled and inexperienced, and reduces productivity? What you're essentially saying is that you have no problem with government making the world a poorer place, particularly for the unskilled and inexperienced.
"if we could figure out a basis for distributing it, a chore, which, I believe, is beyond the talents of the private market because it requires coordinated changes in how we compete."
Such a bullshit statement. The basis for distribution is based on productivity and property rights. Private markets have shown particular talent in recognizing both because they are the sum total of EVERYONE's decisions, whereas government action is simply command and control by the few.
Regards,
Ken
Clearly the microprocessor should be outlawed as its productivity benefits do not outweigh the sociological costs. Down with Intel…..
But then again, they are trying to eliminate the internal combustion engine.
Only for the common folk, the riff raff as they imagine everyone else but the ones with power … The problem with growth is that ordinary people start enjoying what only the rich used to be able to afford – thus, less distance between the elites (self annointed) and the riff raff … Anything that reduces the distance between the riff raff and the elites is bad and ought to be regulated away
I think that Bastiat guy had something to say about this trade-unionist, anti-progress idea that productivity creates unemployment:
http://bastiat.org/en/petition.html
Yep. Let’s blot out the sun so all those green lightbulb makers can have jobs.
It’s doesn’t create unemployment? So why are all those people unemployed?
Which people?
The ones without jobs.
Can’t be any more specific, eh?
Suppose the government had an enormous bureaucracy that made it very expensive to use any more steel than you were already using, and in addition threatened you with fines or losing you business if you invented a way of using steel that they didn’t like. Plus, they put a huge tax on steel, where a portion of the tax is based on how many pounds of steel you used rather than its price.
There’d be a lot of unused steel sitting around.
Because Obama is anti-business and is busy demonizing businesses, threatening to take any profits that he deems “too high”. Well why hire anyone when the head of government explicitly threatens you if you earn “too much”?
Are you talking about the tellers? Sure they’re out of work but with a healthy economy they would soon find other jobs. But nooooo. Let’s keep taking money from the private sector and spending however the gov’t sees fit. That’s working out really swell, isn’t it?
Why can’t you see the new jobs filled by those who must design, program, manufacture, and provide maintenance to those ATM’s?
LOL. Dear Mr. Obama…………..
Please give up your 747 and use horse drawn carriages. Imagine the number of people you will need to employ if you did not use such a technological marvel as that magnificent flying machine and refined fuel we produce using chemical factories
Nice letter.
I’ll be interested to see how many other economists will call out Obama for “complaining about the source of our prosperity”.
I can tell you who will not – Krugman (wait … Krugman used to be an economist and had the capability of thinking rationally … so, never mind)
“With respect, sir, you’re complaining about the source of our prosperity:” Don
Was he complaining or simply stating a fact?
Don please don’t pretend the unemployed created by increased efficiency are not a problem or that you have a simple solution to that problem. The unemployed ARE a problem for those with a soul and for those who care about themselves and the economy from a demand side perspective. Also I do suspect you have a simple solution which is to ignore the issue and let the market sort it out but that solution was tried with Herbert Hoover, much as you guys like to rewrite history, and we know it failed.
https://yiss-history.wikispaces.com/file/view/1938-depression.gif/205642716/1938-depression.gif
The unemployed created by new inventions that make all of our lives easier are NOT a problem. The fact that they cannot currently find a new job is a problem. When the economy is growing nobody complains about innovation’s that make our lives better, but when it is not growing and people who are displaced because of tech advancements are unable to find new work, people like Obama and muirgeo think that innovation is bad (or at the least not good).
This is ridiculous, because the real problem is lack of economic growth. And the anemic growth is partly caused by excessive regulation and uncertainty surrounding various gov’t programs/laws, including Obamacare, the consumer protection agency, the debt ceiling, debt ratio, etc.
So please don’t blame innovation for low employment. Innovation is the reason we aren’t all peasant farmers with a life expectancy of 43 years. Instead, recognize that we need growth and that incentives lead to innovation which someday will lead to another Google, IBM, Microsoft, Wal-Mart etc. that will employ thousands of people and make everyone better off.
“unemployed created by increased efficiency are not a problem”
They are not a problem, and in fact are the source to EVERYONE’s increased standard of living. Those farmers that lost their jobs due to increased efficiency put their labor into manufacturing, accelerating the pace that the standard of living increased.
“The unemployed ARE a problem for those with a soul and for those who care about themselves and the economy from a demand side perspective.”
The solution for unemployment is to get a job, so get out of the way! Let businesses hire and fire, create and innovate, and stop demonizing them for making our lives better. You claim to care about them because you have a “soul”, but you and people like you do everything in your power to reduce the chances that once they are laid off due to increased efficiency, that no other jobs will be around to be had.
Quote from muirgeo: “Also I do suspect you have a simple solution which is to ignore the issue and let the market sort it out but that solution was tried with Herbert Hoover, much as you guys like to rewrite history, and we know it failed.”
Now you’re just making things up (or regurgitating the made up things you were taught as a child). Hoover didn’t do nothing. Hoover did more spending than any peacetime president before him. Roosevelt simply expanded on all the things Hoover was already doing (and it didn’t work for him either).
If you’re going to lie, then you’re going to have to do better than that.
The fact that FDR was Hoover II:Tokyo Drift has been pointed out to muirgeo over and over again.
Muirgeo prefers to ignore it because he wants to simultaneously pretend to be evidence driven while clinging to his superstitions.
The doublethink is only maintainable so long as he ignores the existence of the vast reams of historical facts that falsify his superstitions.
Muirgeo has been corrected on his ignorant assertions about Hoover approximately one billion times in these pages. He doesn’t care what the truth is. Instead, he changes historical facts to support his bogus narrative that the U.S. was a laissez-faire society prior to FDR.
But what would you expect from someone who thinks we’d all be farming with our fingers rather than with tractors?
That should read: “But what would you expect from someone who thinks we’d all be better off farming with our fingers rather than with tractors?”
“Instead, he changes historical facts to support his bogus narrative that the U.S. was a laissez-faire society prior to FDR.”
Also, we had free markets from Reagan until now, which has led to the current economic crisis.
But by god if anyone ever suggests a market-based solution to a problem, we will get a barely-comprehensible paragraph about how free markets have never existed and have never been proven to work and that democratic socialism has been proven over the last 60 years in all of the west to be the only (and therefore best) way of organizing a society.
“Also I do suspect you have a simple solution which is to ignore the issue and let the market sort it out but that solution was tried with Herbert Hoover…”
Leaving alone the questionable assertion that Hoover’s solution was, “…to let the market sort it out…”:
1) How do you think that the graph you show indicates some signficant triumph by FDR?, and
2) How do you think Herbert Hoover (or FDR) could have forced the Federal Reserve to behave differently? Or don’t you think the Federal Reserve’s actions significantly affected the graph you linked to?
Did you just insinuate that our Dear Leader, “The One”, is imperfect? How dare you? You must be racist.
Yes, how dare does Don (or anyone for that matter question anything Obama has to say … Off with his head …!
Again the economy will not recover if government spending is cut, if the trade imbalance doesn’t improve or if wages do not increase (decreasing income inequality).
Bottom line with no major changes in policy the economy will continue to stagnate. Any significant policy change in the direction the neoliberals would suggest will further deteriorate the economy.
I just think it’s funny here to see the professor and his fledglings all puffing out their chest assuming they know how to fix the problems when they haven’t a clue and quite likely would make things much more Hooverish if they were allowed to try.
“Hooverish” That is an interesting word. What does it mean?
Intervention s**ks?
muirgeo, are you aware that during Hoover, there were large increases in government spending?
Are you aware you are a victim of revisionist history?
So spending didn’t increase under Hoover?
Tell me specifically what the majoor items of increased spending were for.
Tell me specifically what the majoor items of increased spending were for.
Look it up. It’s been posted here countless times.
Yasafi,
If allowed to vote on it, how would you vote on San Francisco’s anti-circumcision law?
You realize that history is things that actually happened, not whatever random stuff you made up this morning, right?
Yeah and that is why I don’t rely on others accounts of the history of The Great Depression.
I read original articles from magazines and newspapers
from those days available on line.
Honest answer…. Have you done that?
Yeah that whole government accounting records can easily be falsified, amaright?
Uh-uh…… Newspapers were not corrupted or biased. And, they had the resource gathering for journalism far more advanced than that of today. Printed paper, back then, probably would talk of the the wondrous foresight of Smoit-Hawley.
As Yogi said, “You could look it up.”
You got your history from the famous revisionist Howard Zinn.
Your sudden silence on this point is telling.
Yes, but it’s so much better than the alternative!
Yes those damn record keepers at the Census Bureau! How dare they keep accurately track of government expenditures making it harder for you to lie.
“Again the economy will not recover if government spending is cut, if the trade imbalance doesn’t improve or if wages do not increase (decreasing income inequality).”
So your economic paradise is the government spends all the money in the economy, there is no trade, and the minimum wage is 2000.00/hour?
I always hear people bashing income inequality. So, if everyone’s income doubles, income inequality doubles, and the left is miffed, right?
Prime Minister Thatcher had a comment on this.
http://www.youtube.com/watch?v=okHGCz6xxiw
” if everyone’s income doubles, income inequality doubles”
No, the inequality remains the same:
2a/2b = a/b.
However, if a0/b0 = at time t0, then at time t1, a1=4a0 and b1=4b0, then inequality increased, yet everyone’s income at least doubled.
I meant b1=2b0.
2a-2b = 2(a-b)
VV,
Inequality is always computed as a ratio, not a difference.
Regards,
Ken
“….if they were allowed to try.”
That quote is fantastic. PERFECT encapsulation of a pathology that is influenced by a profound fear of others.
If I may rephrase: “People should not be allowed to solve their own economic problems.”
“Again the economy will not recover if government spending is cut,”
That’s like saying that my personal financial situation would not improve if I stop burning $5 bills to roast hot dogs.
Another Weiner joke?!
No… it’s like saying laying off more government workers during a recession will not decrease unemployment. Which will further decrease demand and sales will fall and the economy will sputter along.
It’s playing out before our eyes. Stimulus spending has fallen off and where austerity measures have been pushed the economies are stalling. Just like they did under Hoover and in 1937 when FDR repsonded in kind to the deficit hawks.
I will be right and YOU will be wrong in spite of glib irrelevent conparisons between personal finance and the macro-economy.
“…in spite of glib irrelevent conparisons between personal finance and the macro-economy.”
Fair enough. My muirgeo-inspired revision:
That’s like saying the economy would not improve if the government stopped paying muirgeo to roast hot dogs for penguins, for I’m sure there is something more valuable that muirgeo has to offer to society and there’s something more valuable that could be done with the resources used to pay him to carry out such a task. But while the government continues to pay him to do that, we’ll never know.
“I will be right and YOU will be wrong”…
muirgeo – I wish you were right. If you were, it would be easy, woudn’t it? We’d be a little behind Greece on the road to a fair and prosperous society and we could look there for glimpses of all the spoils we had waiting for us.
“No… it’s like saying laying off more government workers during a recession will not decrease unemployment.”
Pardon, but you seem to assume that the government workers are doing something critical or productive. With a very few notable exceptions, this is largely NOT TRUE, and the ‘business of government’ is, by and large, to burn our collective $5 bills. I’m all for 20% unemployment, if the 10.9% rise comes exclusively from the public sector. The reduction in the cost of government could then be turned back to private industry and the those people retrained and rehired in productive work that increases our overall economy.
The left drum pounding on “infrastructure” makes absolutely no since to me, because who gives a damn if you have a nice shiny new highway if nobody can afford the trucks and cars (or the gas for that matter) to drive on the thing?
muirgeo,
“laying off more government workers during a recession will not decrease unemployment”
That’s the problem with Keynesians, all you care about is employment rates rather that, you know, increased living standards and wealth. You assume that those government jobs aren’t destroying wealth or constraining progress (the most prominant use of government power).
“Which will further decrease demand and sales”
Wrong. The resources diverted into the pockets of those government employees will simply be put to use else where. Demand will not be affected at all.
Also, releasing people from unproductive government work to be put use productively by wealth creators will make everyone’s lives better off.
“It’s playing out before our eyes.”
No it isn’t. Government spending has increased dramatically in just 4 years (30% in case you’ve forgotten from the many times I’ve told you before).
“where austerity measures have been pushed the economies are stalling”
Where? What places have implemented austerity measures to only have their economies stall?
“I will be right”
You haven’t been yet, so why would this be any different?
” glib irrelevent conparisons between personal finance and the macro-economy”
You are aware that the sume of microeconomics determines macroeconomics aren’t you? Or do you live in some fairy tale world where personal fincances have no bearing on macroeconomics?
Regards,
Ken
Seth wrote, “That’s like saying that my personal financial situation would not improve if I stop burning $5 bills to roast hot dogs.”
What you are describing there sounds more like Don’s trade policy recommendations.
Really? Explain the parallels in detail, please.
Or were you merely being what you fondly imagine as “clever”?
If allowed to vote on it, how would you vote on San Francisco’s anti-circumcision law?
This is one of your many total comprehension failures so often repeated here at the cafe.
As is so often the case, you have it backwards – YOU are the one claiming to “know how to fix the problems” YOU have the arrogant hubris to think you know what’s best for millions of people you’ve never met. Those of us who object to your recommendations do not claim to have the solution. Our recommendation is to allow those millions the freedom to make their own decisions. Your recommendation is to give a few hundred politicians and a few thousand bureaucrats ever more power and control over those millions.
I post this for those reading the blog who might be tempted to take your comment seriously. I know you’re incapable of learning about those you criticize from your constant repetition of false characterizations. Perhaps the radioactive waste from Mallinckrodt (working for your beloved government at the behest of your hero FDR) in Cross Creek, where you played as a child, has caused you some brain damage?
I know how to look out for myself, which is the only problem for which I can influence the outcome.
As long as the Obama administration keeps jacking up my discount rate with its ominous noises, I will keep exercising my independent choice to take my capital somewhere other than the USofA.
“I know how to look out for myself, …”
No you don’t. Are you nspecting your own meat, catching your own water, cleaning your owwn waste products, paving your own roads… you think you are a rugged individualist… you are not… almost no one is. We are all interdependent on each other, our government and the past.
muirgeo,
” Are you nspecting your own meat, catching your own water, cleaning your owwn waste products, paving your own roads… you think you are a rugged individualist… you are not… almost no one is.”
No. I outsource all of those things to free markets when available; others fall under the substandard monopolies of government for which I am forced to pay.
“We are all interdependent on each other, our government and the past.”
This a non-sequiter. It’s tautologically true. The difference between you and me is that I favor non-coercive cooperative means to meet my goals, whereas you favor force of government in spite of, and sometimes merely to spite, other’s desires.
Regards,
Ken
Why do you think the economy will never recover without government spending? There is limited evidence to support that assertion.
Ironically, you’re right. We don’t have a clue how to fix the economy. Each individual has to find a way to fix their personal economy. No large plan can fix the economy. As individuals come up with their own plan, money will flow to the best possible uses.
The problem with government plans is two fold. First, it’s impossible for an individual to “fix” the economy because no one has sufficient control over it. Second, many times, politicians will propose “solutions” that help their constituents or supporters to the detriments of those without political support. For example, the GM bailout helped the union workers, but hurt the investors. Crony capitalism (to coin a phrase) allows funds to be wasted (as cronies get fatter).
“Why do you think the economy will never recover without government spending?”
Well why ISN’T it recvovering? The stimulus has dried up. There are no new HUGE spending programs. Taxes HAVE been cut. The explaination I see coming from your side is “REGIME UNCERTAINY” which is given only because you can’t come up with a real reason why the economy isn’t bouncing back. Regime Uncertainty is bull crap…. lack of sales ( ie demand) is the immediate problem but Obama is also right … our economy has structural problems THAT WILL ONLY IMPROVE with intervention and policy change.
Let’s follow this along and you will see I am right and the professors here are wrong.
It isn’t recovering, in part, because of the stimulus. What is so incredible about your position is your belief that 2 opposite things are happening simultaneously. 1) That Obama is saving the economy by increasing spending through the stimulus and 2) that our free market ideology has run amok prolonging the crisis. How can these both be true? Either spending is increasing or decreasing, never both. We are either in a recovery or a stagnation, never both.
Also we have had a lot of intervention and according to you, no recovery. Why would we expect more intervention to be the answer? What is the optimal level of government involvement in the economy? You clearly know it-please enlighten.
“The stimulus has dried up. There are no new HUGE spending programs.”
There is still 1.6 trillion in stimulus, it is called the deficit. There is 4 trillion in HUGE spending.
“lack of sales ( ie demand) is the immediate problem”
There is plenty of demand, it is just at a lower price.
“but Obama is also right … our economy has structural problems THAT WILL ONLY IMPROVE with intervention and policy change.”
Our structural problems are the intervention and policy changes. To correct our economic problems requires omniscience, which is not a human quality. What is required is to do no harm, and the bees will rebuild the hive.
muir – ever heard of the crowding out effect of large stimulus packages? Instead of letting the central government decide where $800 billion should be spent, let the free market decide. It will be much more efficient and innovative.
We’ve spent almost $1,000,000,000,000 on a stimulus program in the last two years for what? All of that to lose 2,000,000 jobs since February of ’09. Now idiots like you and your ilk are saying that the stimulus wasn’t big enough and you’re trying to argue for more government spending??? And you think that “regime uncertainty” is BS?
“Let’s follow this along and you will see I am right and the professors here are wrong.”
Tell us, what exactly has to happen in order for everyone to see that you were “right and the professors here are wrong?” What steps would you take to reverse our course? Another stimulus? If so, how much? And why would that amount be enough?
Turn this around … see it through the lens of “intent” (i.e. What Obama really wanted) – using that as a yardstick – the stimulus was a success … the destruction of productive activity in the private sector that is evil because it goes after profits by making and selling things that people are willing to buy – and that the primary purpose is to increase public employment as best and as fast as you can
“Well why ISN’T it recvovering?’
Government intervention and threats of taking ever more profits.
We just had RECORD quarterly corporate profits.
That doesn’t quite fit with your briandead bullshit … DOES IT?
muirgeo,
“I am totally against any jail time for simply taking huge risks ”
According to who? The same people you talk to who say Hoover implemented austerity measures?
Your arguments don’t work if all you do is lie.
Regards,
Ken
muirgeo,
The wrong quote was in my clip board. This is what I meant to quote of yours above.
“We just had RECORD quarterly corporate profits.”
Regards,
Ken
muirgeo,
” lack of sales ( ie demand) is the immediate problem”
Why are sales down? Regime uncertainty.
“our economy has structural problems THAT WILL ONLY IMPROVE with intervention and policy change.”
The structural problems were CAUSED by intervention and government policy.
Regards,
Ken
Ken,
I’m just curious… Do you have a big red nose that honks when squeezed…. fly away orange hair… supersized shoes? I’m sure I know you from somewhere.
muirgeo,
No. Does your nose grow every time you tell a lie? Do you die a little inside when all you have are insults for retorts?
Regards,
Ken
FDR tactics….. Not enuf demand…. Need to use govt to create demand…… Price controls and wage controls…. Those who fail to comply will be prosecuted….
Result- more unemployment and use of govt to run competition out of business.
FDR=horrible president
Well, one of the reasons it isn’t recovering because the government was pushing money into inefficient businesses to “stabilize them.” Thus, those funds cannot be flow to more efficient businesses. For example, rather than let GM go bankrupt and make its business more efficient, the government bailed it out, allowing the business inefficiencies to continue and, in fact, encouraging more inefficiency (building hybrids that no one wants). Thus, more and more money is being sent to an inefficient business.
Another reason is uncertainty. If rules change, a business cannot make plans. For example, during the GM bankruptcy, the government changed the rules of bankruptcy to favor the unions over bondholders. I don’t think it was a coincidence that the unions supported Obama. The rules of business are replaced the aristocracy of pull. Who ever has more influence gets better deals than those who don’t. That uncertainty leads to business leaders to be cautious.
ahahahahahaha……….. such economic nonsense. Make things more Reaganish, it more like it.
But, what do you expect from the FDR ignoramous. You are living in FDR dreamland. He put the ‘Great’ in Great Depression.
“I just think it’s funny here to see GOVERNMENT BUREAUCRATS puffing out their chest assuming they know how to fix the problems when they haven’t a clue and quite likely WILL make things much WORSE.”
FIFY
The ATM? Well, the machine replaces a teller, alright. But it’s available 24/7, which tellers never have been. Doesn’t need food or water, just some AC electricity. It’s handy in all manner of unlikely locations from C-stores to fair grounds, anywhere people need cash, increasing the likelihood and ease of transactions that benefit both parties. And it’s manufactured, installed and maintained by employed people, which isn’t really the case with the tellers, unless you count their parents, spouses, etc. Even the unemployed themselves use ATMs.
Substituting technology for people can also be due to misguided policies like raising the minimum wage. And if you think the minimum wage raised the cost of labor, you ain’t seen nothing yet. ObamaCare will further increase the cost of labor.
The automatic teller machine was created by the Scottish inventor John Shepherd-Barron, and first used by Barclay’s Bank in London.
What, exactly, did the average U.S. bank customer do to deserve the gift implicit in this foreign labor-saving device? What is wrong with sharing the gift of lower prices with those who are displaced by it? The U.S. should immediately implement an ATM Adjustment Assistance program to provide living expenses for tellers who must now undergo retraining.
*LIKE*
The ATM is the ONLY useful contribution to society by banking institutions in decades.
muirgeo,
So that whole providing a safe place to keep your money or providing capital for investments doesn’t contribute anything thing?
Are you really this big a horses ass.
Regards,
Ken
Ken, banks provided those things long ago. In the last couple decades, the ATM is arguably the only useful thing they have contributed.
BTW, Muirgeo is actually quoting Volker, who made the ATM comment shortly after the financial collapse.
Whiskey,
“Ken, banks provided those things long ago.”
Are you really saying banks don’t provide those things today? If not, then you have to acknowledge that banks are contributing to society using the products I mentioned above. It doesn’t matter when these products were innovated.
I think you are confusing contributions with innovations. A contribution is using something, including new innovative products, as well as old fuddy dutty products that have been proven to work, in a way valuable to people in society.
Regards,
Ken
I am not arguing with you Ken:)
Yes, I took Muirgeo to mean what have banks innovated lately?
Whiskey,
I didn’t think you were arguing with me. I just wanted some clarification and was pointing out that your statement seemed to confuse innovation with contribution. I wasn’t sure if you were confused, or I was confused about what you were actually saying.
Regards,
Ken
But,your master has declared them as a structural issue in causing unemployment.
Yeah and you gotta love Fox “News”. The article title, “Obama Blames ATMs for High Unemployment”….yeah…cause that’s what he said.
Quit frothing at the mouth … please.
Yes, that’s quite clearly what he’s doing. He said ” You see it when you go to a bank and you use an ATM, you don’t go to a bank teller”, in which he quite clearly means that the ATM reduced the number of bank teller jobs, increasing unemployment.
For a doctor, you have poor reading comprehension skills.
Uh, for a chimpanzee, Yasafi has poor reading comprehension skills.
When I go to the bank, there are plenty of tellers, but the line is much shorter.
Great letter. Short, concrete, clear. At Lucidicus.org, we give away a book to med students that contains Bastiat’s famous Candlemakers’ Petition. It sounds as though President Obama could use a copy, too.
Neo-Luddites for Obama, Unite!
Careful. You’ll have the IRS wanting to audit your income tax returns ala Herman Cain’s challenge to Bubba.
I can’t believe a modern educated man, must less the president would utter such a thing. This is the oldest economic fallacy that I can think of. We would have “more jobs” if we outlawed shovels and made everyone dig with spoons.
I don’t find this utterance all that surprising. It’s par for the course for politicians, for it reflects the same fear that animates pop Keynesianism: the fear that if today’s jobs are lost, no other (or too few other) jobs will be created to replace them.
I think the fear is more precisely that if today’s lost jobs are not replaced by the next election, the politician may very well loose his job.
If only ALL politicians would lose their jobs!
If only their jobs would go away entirely.
If you start with a cage containing five monkeys, and inside the cage hang a banana on a string from the top, and then place a set of stairs under the banana, before long a monkey will go to the stairs and climb toward the banana.
As soon as he touches the stairs, you spray all the other monkeys with cold water. After a while another monkey makes an attempt with same result… all the other monkeys are sprayed with cold water. Pretty soon, when another monkey tries to climb the stairs, the other monkeys will try to prevent it.
Now, put the cold water away.
Remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and attempts to climb the stairs. To his shock, all of the other monkeys beat the crap out of him.
After another attempt and attack, he knows that if he tries to climb the stairs, he will be assaulted.
Next, remove another of the original five monkeys, replacing it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment… with enthusiasm.
Then, replace a third original monkey with a new one, followed by a fourth, then the fifth. Every time the newest monkey takes to the stairs, he is attacked. Most of the monkeys that are beating him up have no idea why they were not permitted to climb the stairs. Neither do they know why they are participating in the beating of the newest monkey.
Finally, having replaced all of the original monkeys, none of the remaining monkeys will have ever been sprayed with cold water. Nevertheless, none of the monkeys will try to climb the stairway for the banana.
Why, you ask? Because in their minds, that is the way it has always been!
This, my friends, is how Congress and the Senate operates… and is why, from time to time, all of the monkeys need to be REPLACED AT THE SAME TIME.
There have been no net increase in jobs since 2004. Over the last decade there were less than 3 million new jobs created while the labor force grew by 12 million. It’s NOT working.
muirgeo,
Bush was a big government pol, too, expanding government faster than anyone since LBJ. What this shows, very clearly, is that expanding government is very bad for the economy.
Obama is simply extending and expanding much of Bush’s economic policies.
Regards,
Ken
You have a big red nose… don’t you.
muirgeo,
It’s big, but it’s not red. It goes with my face. I’m a big person, so I should be expected to have a big nose.
How does it feel to be only to respond with attempted insults? You don’t have any knowledge of history of any time period, nor any understanding of the US constitution, so make feeble attempt to insult me.
Also, I thought you were giving me the silent treatment? You just don’t have the discipline do you? Guess we can just add lack of will power to your very long list of faults.
Regards,
Ken
Mr. Obama,
I’m surprised that Don Boudreaux speaks as politely as he does to you after what you’ve tried to do with medical care in this country.
http://cafehayek.com/2010/03/venting-2.html
I doubt his anger regarding this matter has subsided much. I know mine has not.
Scott G
PS – You’re a murderer for what you’re doing in Libya.
We’re not doing anything in Libya. The Europeans are doing it, and we’re just…there…unconscious or something. Sort of like a French version of “Weekend at Bernies” where we’re playing the part of the dead guy.
He’s not a murderer. On the contrary, he’s motivated by humanitarian concerns for the anti-Ghaddafi forces.
Maybe we could pass a law that forbids a person from pumping their own gas, thereby ‘creating’ many new gas station attendant jobs. That would certainly bring down the unemployment right?
Oh, wait, Oregon already does this – and has an unemployment rate that is above, not below the national average. I don’t understand why it is not working, there are many thousands of ‘gas station attendant’ jobs in Oregon that do not exist in the surrounding states… what a strange phenomenon.
There are people (most, alas) who believe that the dominant challenge for modern market economies is to maintain demand, and that a job is a good much like a new SUV or a dining-room table.
Then there are those (including the best economists) who understand that the dominant challenge for a modern economy is to find ways to use scarce resources to satisfy existing and inchoate human demands; that is, that dominant challenge isn’t inadequate demand but nature’s stubborn refusal to supply human beings with all that we want free of charge.
People with this latter understanding realize that jobs are instrumental ‘goods’ only – not true goods. These people don’t speak of jobs as if they are ends in themselves.
Interesting point. I had not thought of it that way, but of course what a person really ‘understands’ or believes is manifested in the way they speak about a topic – whether they realize it or not.
I wonder if those who use the ‘jobs are ends in themselves’ language really believe that or if they are simply using it as justification for whatever government spending project they wish to engage in.
I like a slightly different analysis based upon the idea of customs formation. Buying groceries is a sporadic activity which you perform more or less at will. When the grocer changes his prices or closes the store, you might have preferred a different outcome but that is largely invisible because every time you go to the store, you look at the prices and make a decision on the spot. On the other hand, after your initial hiring, every day of the week, you show up at the same time, leave at the same time. Every other week, your employer sends you a check of the same amount. Very rapidly, this becomes a custom. The repetition makes everyone feel that this is a normal state of affairs as opposed to a process whereby there is an exchange that is renewed every day for another day. When you “loose your job,” the custom is no longer being respected. We are evolutionarily conditioned to desire customs to be respected. So this breach of the custom is likely to make us angry and to make us feel like something we are entitled to is being withheld.
I would argue this analysis would be supported by the fact that contractors and more creative professionals whose schedule and type of work vary more are rarely “protected” from the “loss” of their job than those involved in more repetitive jobs even though from an aggregate demand standpoint, there is no difference between a contractor and a full-time employee.
Prof Boudreaux,
You wrote,
“There are people (most, alas) who believe that the dominant challenge for modern market economies is to maintain demand.”
Doesn’t that include the Keynesian Austrians, such as Selgin and yourself?
And remember that I’m the customer, and, if you want to know why I’m not buying, you won’t find out by calling me “ignorant” nor just telling me to “stuff it.”
Don’t waste, fraud and abuse increase aggregate demand? Perhaps statists should come out in favor of MORE W, F & A in order to stimulate the economy?
“… nature’s stubborn refusal to supply human beings with all that we want free of charge.”
I’m sorry but this attitude is so arragant, so cold and so assuming. The problem is not yet nature but how capital markets work. There are plenty of people…most people who want to work or want to work harder and who don’t want things free of charge. But try as they might THERE ARE NO JOBS and there is no easy way to start up businesses other then those assumed and imagined by tenured professors safe in their seats. But the fact is increases in productivty end up in the pockets of those who control the means of production rather then increasing wages or increasing hiring or increasing demand or possibly allowing for a 32 hour work week.
Your philosphy with a unlimited labor force leads to a race to the bottom where everyone gets starvations wages if they get any at all and if they fall of the employment roles they also fall off the demand rolls and thus are dehumanizingly considered irrelevent to people like yourself.
Jobs and people are just instramental??? People are the ULTIMATE RESOURCE so lets keep lots of extras so we can drive up productivity as we drive down wages towards starvation levels…. WOW how horrid. You are no champion of liberty. You are an advocate for the few and the privledged to live in a horrid society of despair, poor farms, serfdom and debtors prison.
You guys will ultimatly lose out this arguement because utimatly a sociatal revolution of the many agaisnt the few will be the end result if democracy fails.
“…reality will take a wolfish turn…” Dickens
“… and there is no easy way to start up businesses …”
And I wonder why that is? I mean, why can’t I just throw my lawn mower and weed whacker in the back of the truck and start driving around door to door charging $20 for a cut and trim? Oh, because the government SAYS I can’t, not until I’ve filed all the proper paperwork, gotten the permits, submitted the tax number requests, etc., etc. Actually, here in Texas, it’s not that hard. 30 minutes at the county court house, 30 minutes at the State Comptroller’s office, and you’re in business (literally). Try that in NYC! Probably why we’ve created almost half of the new jobs in the last 2 years. But I’m sure you’ve got another reason.
“Jobs and people are just instramental???” (instrumental)
Dude, you really CANNOT read, can you? People ARE a scarce resource, JOBS are not, they are instrumental. The point of that statement is to say that JOBS are not an end, they are a means to an end. Slaves had 100% employment for their entire lives, but I don’t think they were better off, do you? Please at least TRY to understand the sentence before making an ass of yourself.
muirgeo,
“But try as they might THERE ARE NO JOBS”
Because Obama and the dems are busy destroying as many as possible.
“there is no easy way to start up businesses”
That’s because gov types, particularly dems, don’t like entrepeneurs, so erect as many barriers as possible to creating a business.
“But the fact is increases in productivty end up in the pockets of those who control the means of production”
All hail Marx, right, muirgeo? Except that this was untrue in his time as well as ours. People get paid for the value they produce. If markets really operated the way you think they do, no one would get paid more than minimum wage. As it stands less than 5% of all workers make minimum wage. And over 95% of those who earn only minimum wage are 25 years old or less.
“…rather then increasing wages or increasing hiring”
This is a lie.
“allowing for a 32 hour work week.”
Anyone can work as little or as much as they like. If you don’t like the hours you work at your hospital, open your own practice (make sure you navigate all legal barriers you and your kind have erected) and work whatever hours you like.
“Your philosphy with a unlimited labor force leads to a race to the bottom ”
It never has before, so this is just your fevered imagination at work, with no basis in reality whatsoever.
“You guys will ultimatly lose out this arguement”
Libertarians have all ready won.
Regards,
Ken
Jobs are not the ends themselves, but neither is a modern economy. Society does not exist to create an economy. An economy exists to serve the society, and thus the people. If the people are not served, they will withdraw support for the society. (see: every Arab state)
As an instrument of our society, our economy has traditionally created a broad base of jobs that allow the people to participate constructively and benefit fairly. There is no implicit guarantee that a free market economy will support this model. When it appears that our society is deviating from its goal of serving the people, the leaders and participants look for other means and tools, TO INCLUDE modifying the economy (shedding free market principles) and even to provide in ways that do not use jobs as the tool (entitlements and bailouts).
I think most of the posts on the cafe see things backwards, as if the economy were the ends not the means, regardless of how effectively it serves the people. I support a free market but I can see these in the right order, and I can recognize, understand, and openly consider situations where it is not performing optimally.
Two points:
I think, regarding treating the economy as the “ends”, you’re going to get a lot of that on an economics blog. That’s simply largely what’s being argued – what is good or bad for the economy. There are plenty of “the economy is less important than X” arguments to be made (and that are made) but I don’t think we should be surprised that economics is the primary concern of this forum.
But, even moving away form the consequentialist arguments for a free market (that they are best economically), you have a lot of libertarian-leaning people here with deontological views that are going to convince them to double up on their support of free markets. By introducing economic models that deviate from the “free market”, you’re also introducing violations of individual rights (to them) by definition. So, to the extent that the “economy” is simply voluntary interaction and exchange between free people, it can double as an end for such people in a deontological sense.
“These people don’t speak of jobs as if they are ends in themselves.”
There is utility in some jobs themselves, meeting therapeutic needs, social requirements, what trouble you are not causing while working. I have never thought about this before in economic terms. I am sure there is a name for it.
During discussions like this, I’m always reminded of a story told about the late, brilliant, clever Milton Friedman.
http://www.politicalpolicy.net/2009/12/blog-post.html
Hopefully, the next stimulus will fund “spoon-ready” jobs.
Maybe we could pass a law that forbids a person from pumping their own gas, thereby ‘creating’ many new gas station attendant jobs.
There is such a law in New Jersey as well. Boy, that state is doing great, huh?
Oregon too.
Some years ago there was an article, perhaps from Peter Schiff, that explained how minimum wage led to the demise of things like the full-service gas station, where teenage boys washed the car windows and checked the oil, all the while learning the mechanics trade.
I am sure someone has mentioned this (!) – if not, listen to Walter Williams on the minimum wage and what that has done to youth (un)employment – particularly those with minimal skills trying to improve themselves … It is breathtaking in it’s clarity – Anyone with an IQ greater than zero should understand why the minimum wage destroys jobs and hurts the very people it claims to help
Don, I love how you rightly styled him as “President of the Executive Branch,” not “President of the United States.” He presides over the government–not the lives of 300 million Americans.
Thanks. But even more precisely: he presides over only one of three co-equal branches of one level of (ostensibly limited) government in America. He’s no more “my” president than, say, Steve Jobs is “my” president by virtue of the fact that I use an iPhone and a MacBook Pro.
You want to golf at the country club you’re gonna have to pay the dues.
If allowed to vote on it, how would you vote on San Francisco’s anti-circumcision law?
I would not have circumcised my kids if they were boys. But I would not support a ban on circumcision. I used to hate the democratic party… I did vote for a libertarian president once. I have quite a bit of disdain for government micromanagement…. especially being in the medical field. I am a pragmatist simply pushing the idea of a fair, just, democratic and prosperous society based on an even application of rules that apply equally to all…. And you are EXACTLY the same as me…. I can prove it.
Yet, the Obamacare end game is micromanagement, hence the panel of ‘experts’ that are unelected deilberating on Medicare and Medicaid. That is the starting point. Their sphere of influence would soon batch out.
I would not support a ban on circumcision.
Congratulations, and I’m pleasantly surprised (assuming that you’re honest – this time). However, you recently made a comment about the open-minded and tolerant people of California.
You are aware that it’s the open-minded and tolerant shitizens of San Francisco who are pushing for the government to forbid Jews to circumcise their boys?
You are a dumb troll, who is using my name. You should be banned. You write poorly and make no sense, too.
Circumcision should be outlawed and people who operate on newborn males should face the death penalty.
“You want to golf at the country club you’re gonna have to pay the dues.”
What country club? Are you really suggesting a nation should be run and thought of as a country club? Are you really this stupid?
Regards,
Ken
As if no one is paying any “dues” (aka taxes) now…
@Don: True. But in a sense, though, the executive branch is “the government,” in that it is tasked with implimenting the dictates of the legislature and the judiciary. Legislators don’t “govern” in the same way that the executive does; they oversee the government (at least, ideally).
But now I’m quartering the hairs that have already been split.
To quote “Hayek”:
“Jobs are a means, not the ends in themselves
people work to live better, to put food on the shelves
real growth means production of what people demand
That’s entrepreneurship not your central plan”
Anyone ever see the movie, or read the book, “Holes”? Why not send anyone who wants the job out into the Salt Flats in Utah, and have them start digging holes? Dig a hole. Fill it in. Repeat. 100% employment.
Obviously, because there is no difference in just giving them the money to sit at home and watch Judge Judy or Cops. Nothing productive. Building of bullets and tanks for war that are destroyed in war is unproductive. Like throwing money into the fire as the scarce resources are destroyed.
Where are the women and children?
You are a dumb troll, who is using my name. You should be banned. You write poorly and make no sense, as well.
It doesn’t strike me as a complaint so much as an observation. Labor saving innovations may be “the source of our prosperity” collectively, but it’s rather hard to deny that they do reduce the number of available jobs. I don’t think Obama is advocating for a reduction in innovation or a removal of technology from the workplace. I just think he’s pointing out that it’s going to take time and more innovative policy-making to create jobs that replace those that are lost to automation.
“they do reduce the number of available jobs.”
[citation needed].
What on earth are you talking about? ” Labor saving innovations may be “the source of our prosperity” collectively?” Collectively? Reduces the number of available jobs? ” he’s pointing out that it’s going to take time and more innovative policy-making to create jobs?” Government “innovative policy”, concocted and implemented by pseudo-intellectual elites with acute hubris is what has gotten us into this situation.
- Austin Powers:
Only two things scare me, and one is nuclear war.
- Basil Exposition:
What’s the other?
- Austin Powers:
Excuse me?
- Basil Exposition:
What’s the other thing that scares you?
- Austin Powers:
Carneys.
- Basil Exposition:
What?
- Austin Powers:
Circus folk. Nomads, you know. Small hands… smell like cabbage.
–Austin Powers: International Man of Mystery
“Labor saving innovations may be “the source of our prosperity” collectively, but it’s rather hard to deny that they do reduce the number of available jobs”
How can that be true? The number of jobs in the U.S. have continued to grow for over two centuries. As more labor saving innovations were employed, the number of employed have continued to rise. Every innovation seems to create even more opportunities.
While the President Grant train stage coach example illustrates the point, it is a bit unfair to Grant who had managed the largest organized effort in the United States at the time and clearly knew the benefits of automation. The history of the Civil War is really the history of effective use of railroads.
I didn’t say that Grant said those things; nor did I (mean to) imply that he would have said them. Rather, I’m implying that Grant (and even Nixon) would likely have realized how foolish the actual making of such claims would have been.
Can we look forward to a televised debate with Mr. Obama and you over economic issues? At the conclusion of the debate, American’s can either donate to Obama’s “retraining plan” or to your new Presidential campaign!
While I think Don would be a better president than is Obama, I believe his comparative advantage lies in being an economics professor.
As much as many of us may like Don’s economic theories, I seriously doubt he could navigate the byzantine corridors of government bureaucracy and win the necessary power plays to implement the policies he advocates here. More importantly, I’m pretty sure he would hate every second of it.
Thank you Don for using such a respectful tone. I for one find your argument that much more convincing for it. (Not that I needed any convincing on this one.)
Right on. I would accept the job of president of the executive branch of the government of the United States only under one condition: that I get to sleep and vacation (on my own dime!) constantly, doing official duties only if it means signing legislation that cuts taxes, scales back regulations, eliminates government programs, and approves the sale of government land for private parties to erect a statue to Bastiat.
Oh, and I would refuse to visit natural-disaster sites to “comfort” the victims and their families; I’d have no need for the photo-ops (having no hope of re-election), and, more importantly, would feel embarrassed beyond measure butting my nose into people’s personal lives at such terrible times.
Yes, but Don would veto much of the legislation sent to him. That would reduce the output of congress by requiring super-majorities and more time for new legislation. I suspect he would also eliminate a large number of offensive executive orders and greatly reduce the size, cost and intrusiveness of the executive branch.
I’m also totally confident Don wouldn’t take the office even if the Electoral College unanimously elected him.
oops! I didn’t see Don’s reply before posting this.
I’d pay for that on pay-per-view!
Obama vs. Boudreaux: The Grudge Match!
We can surround the lecterns with chain link and have a “Hot Chick(tm)” walk around the cage with a card for the question numbers. That might actually get a few people who need to hear this stuff to watch ;^).
Sorry, just the redneck in me poking out of a look around ;^).
Troll!
I just read the transcript of the interview, and to be fair to Mr. Obama, he doesn’t imply that the changes that ATMs and kiosks have brought about are necessarily bad, just that they’ve changed the job market. He goes on to say that he needs to figure out where the jobs of the future, IE jobs for workers displaced by ATMs and so forth, are going to be so that he can make sure that training and capital get directed into the areas of greatest opportunity. Taken in context, he’s not against innovation and productivity, he simply suffers from the fatal conceit of believing that it needs to be managed and planned by guys like him.
He goes on to say that he needs to figure out where the jobs of the future, IE jobs for workers displaced by ATMs and so forth, are going to be so that he can make sure that training and capital get directed into the areas of greatest opportunity.
That is exactly the problem! Barack Obama shouldn’t be the force behind capital allocation decisons. He can no more determine where the jobs of the future are than he can predict the next ten years of Kentucky Derby winners. The only intelligent course of action is to allow the billions and billions of individual decisions that comprise the free market to determine the winners and losers.
Exactly my point. The video clip Don referenced cuts away before he makes his case. The story here isn’t, “Obama hates productivity,” it’s, “Obama loves top-down central planning.”
http://today.msnbc.msn.com/id/43391421/ns/today-today_news
“…so all these things have creakrecreated changes in the economy and this counsel is identifying where the jobs of the future are going to be, how do we make sure there’s a match between what people are getting trained for and the jobs that exist, how do we make sure that capital is flowing into those places with the greatest opportunity. we are on the right track. the key is figuring out how do we accelerate it.”
He has also said – many times now – that he believes the jobs of the future are in heavily subsidized ‘green energy’ such as wind and solar.
Paying astronomically higher prices for energy with negligible benefit is almost the same as ‘creating’ jobs by paying people to dig and fill in holes.
*Oh, sorry, I meant say to invest instead of subsidize*
What Obama should have said is that capitalism is a continuous martini pool party of utter extravagance for the rich and a cesspool for the vast majority of people who stuggle to get by. You are right. Obama would not be re-elected if he told the truth.
PIPA
Tell that to the people who started up Silicon Valley.
Please provide your counter examples. Show me the successful command economy.
In this context it would be more helpful to explain how capitalism *differs* from socialism and other command economies.
Mao_Dung,
You really are a malcontent. How can you ignore history? Do you need to be reminded of what happened under the socialist regimes in the Soviet Union, China, Cambodia, under the National Socialists and a myriad of other socialist totalitarian governments? (I admit that “socialist totalitarian” is an oxymoron.) How can you look at history and truly espouse that Socialism/Marxism is a superior system to freedom and free enterprise?
BTW, do you live in Cuba or North Korea? They are probably the best examples the world currently has of Socialism – and the results speak for themselves.
Question: Does innovation “cause” unemployment?
Answer: No, it causes people to have to find new jobs. The primary causes of “unemployment” are ego, laziness, and social paradigms that devalue honest work.
Let’s agree to stop all the lazy, overpaid dishonest work that is be done out there.
Do you mean disband the political organization? If so, I agree.
I’ll second that motion.
All in favor?
Here*Here Yea*Yea
Aye.
‘In your recent interview with NBC News you explained that your policies would promote more private-sector job creation were it not for (as you put it) “some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” ‘
Hmmm. Rewind to 11/2008, Don Imus Show, historian Michael Bechloss
proclaims Barack Obama the smartest President ever in the entire history of the United States.
Six hundred and sixty six czars, advisors, and other economic clown-car acts later, Bechloss might want to revisit his proclamation with some help from Edgar Allan Poe:
“The thousand profound scholars may have failed, first, because they were scholars, secondly, because they were profound, and thirdly, because they were a thousand.”
—Edgar Allan Poe, “The Rationale of Verse”
Great quote.
Beschloss – after he said what he said about Obama – that Obama had perhaps the highest IQ of any president, any politician whatever – was asked – “OK, so what is Obama’s IQ?” Beschloss was at a loss for words – Reminded me of the “thrill up my leg” comment by some other idiot on TV – there are so many people who worship Obama that it is truly sick … And these are the people who may complain about Idol Worship in India or elsewhere – Obama IS God to them and there is nothing you can say to change their mind – Even today, I expect many of them will make excuses for him – that Obama is THE greatest President EVER and stuff like that – makes me wanna puke
Go ahead. You’ve made others do the same after reading your pathetic post.
I’m reminded of my trip to China more than a decade ago. A university student told me that the students were excited to get an automated vending machine for soft drinks in their library/study hall. Few of the students had ever seen such a device. But it was feared that the new machine would cost the job of the people who previously sold the soft drinks, so the students were required to hand their coins to an employee who would then feed the machine and push the buttons. I haven’t returned to China, but I’m guessing that today people get to push their own buttons.
Remember buggy whip operators complained about the automobile. Nothing ever changes!
Luddite’s, oy!
I guess he doesn’t care about the people that build and maintain the ATMs and airport kiosks. Heartless.
We await Obama’s visit to the Amish with bated breath, his monument to them as a model of righteous living, small carbon footprints, full employment, and general inspiration to us all, their only problem being a total rejection of unemployment insurance, social security and big government. Oh wait…
Like
It’s probable that ATM’s create jobs.
People have to design them. People write the software the machines run on. Someone manufactures the plastic casing, the screens, and the electronics. A person drives the trucks that deliver the ATM’s to millions of locations around the country. Someone installs them. Yet more people fill them with money, monitor the transactions, maintain and update them, and so forth.
The various companies that produce the many parts of the machine will hire more workers as the demand for the ATM’s rises.
The delivery company buys new trucks and hires drivers, dispatchers, and purchasers.
The clerk at the 7-11 benefits, because the ATM brings more people into the store. More people in the store, means more people buying soda and candy.
The bank collects a transaction fee, retains customers, and advertises its services.
And the customer is happy because he can get cash anytime, anywhere.
I, ATM.
It’s probable that ATM’s create jobs.
If you think about it, this is highly doubtful. For surely then, they would not exist; their cost would make them impractical.
I think they may increase employment be ause they make me more produtctive. Instead of driving to deal with a teller, I get my cash at the airport or hotel for a business trip saving at least 30 minutes. Let’s say I bill at 100 dollars per hour(I am not a lawyer, just lowly engineer), I now have 50 dollars more as a result, minus transaction fees if I can’t find my bank. After tax I spend 25 bucks on my biz I would not have spent other wise. Might go for an employee who makes more than a teller by the way and who may improve living standards and efficiency thru improved design. Just a thought from the village knuckle dragger.
Shocked, while your convenience may have been in the business case for their institution, I am sure the payback was internal, just as Internet checking is replacing written checks.
Both provide savings to the banks over the status quo or they would not be implemented. Think of it this way; only a minority of customers are willing to pay higher prices for ‘extra’ service, and higher prices would surely result if ATM’s were more expensive than tellers.
You mean to tell me that ATMs (et. al) don’t grow on trees?
Luddites thy name is Liberal.
I’d prefer to say that a ditch digger with heavy equipment earns a lot more than a ditch digger with a shovel.
Professor Boudreaux’s letter is based on chain link reasoning. He demonstrates that our President’s economic policies are in need of some missing links.
Jeez, you guys don’t seem able to make a ‘comment’, i.e. something brief. There’s another place for your way-too-long bloviating and pointless arguing. Namely, your own blog.
The silence of our hosts regarding posts you deem too long indicates maybe you should start your own blog and edit it as you see fit.
There’s also the ability to scroll past posts you think are too long.
brotio, Thanks for not calling me ‘slimy’ or comparing me unfavorably to a chimpanzee.
You’re welcome.
Singapore wants to freely trade with Taiwan, and CHINA tells them to watch their step. Free trade with communists and fascists is a myth.
China reminds Singapore of One China policy:
http://en.radio86.com/news/china-reminds-singapore-one-china-policy
Nations do not trade, people do. Free trade policy in the U.S. would mean that I would not be criminalized for trading with whomever I please, on terms with which we both agree, even if it happens to be someone in a communist country. In this respect, free trade with “communists” and “fascists” is quite real. To the extent that people in those countries are prohibited from trading with me (a lamentable situation for both of us), then, by definition, no trade occurs at all (barring recourse to the “black market,” where state prohibitions are simply ignored).
I like feet!
Trolling scum.
Your name sounds fake. And, you don’t know what you are talking about. You make stuff up or repeat someone’s talking points. Bad regimes must come tumbling down.
Thanks for the warm welcome! I agree with your last point.
It would be interesting to see all the commentators write their own letter to Obama on how to fix the economy. Perhaps for another post.
Barack Obama (the man put into Harvard Law by the wire pulling of his political friends – and then given a job teaching constitutional law at Chicago without ever publishing anything on the subject – as Comrade Bill Ayers helpfully wrote his “Dreams From My Father” book for him) is not the great “intellectual” the media present him as. In fact these comments (and others) show Barack Obama to be a rather ignorant man.
On Herbert Hoover go read some actual history in Time Magazine.
http://www.time.com/time/magazine/article/0,9171,742590,00.html
THE PRESIDENCY: The Hoover Week: Nov. 16, 1931
Read more: http://www.time.com/time/magazine/article/0,9171,742590,00.html#ixzz1PRddxHVG
Intensive budget-pruning again occupied most of President Hoover’s week.. To the Press he proudly exhibited a handful of new cuttings he had snipped off the Government’s colossal expenditure bush. He had reduced the cash requests of all departments by $350,000,000. “Every item has been cut,” said he. This meant, he explained, that the 1933 Budget would go to Congress next month with a total of $280,000,000 more or less, below current expenditures of $3,960,000,000. Where this $280,000,000 saving would occur President Hoover did not specify but it became known elsewhere that the Navy would take a $61,000,000 cut, the Army $44,000,000. But between the President’s economy ($280,000,000) and the estimated deficit ($1,500,000,000) there still yawned an enormous fiscal abyss which only tax-upping seemed likely to fill.
Read more: http://www.time.com/time/magazine/article/0,9171,742590,00.html#ixzz1PRcs7Sxc
I wear women’s underwear and tuck in front of the mirror.
Trolling scum!
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