Twitter: @rodgermitchell; Search #monetarysovereignty
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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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The previous post discussed Step #3 in the Ten Steps to Prosperity (below), Provide a monthly economic bonus (EB) to every man, woman, and child in America (similar to Social Security for All)

Today, we’ll discuss one of the many reasons why EB not only is important today but will become less avoidable each passing day.

That reason, in a word: Technology.

The Cato Institute, an ultra-right-wing “think tank,” published a paper titled: “Cato Institute Policy Analysis No. 68: Does More Technology Create Unemployment?”  the thrust of which can be summarized in one sentence on the paper’s page 4:

“It is only technological improvement that enables employment to take place at higher-than subsistence levels of output.”

First, when technical change lowers costs in a given industry, the competitive firms comprising that industry must lower their prices, generating larger sales and an even greater need for employment.

In this case, employment goes up, not down, and with the increased competition for workers, wages rise in all industries capturing some of the value of the technological change for workers.

Second, when technical change in a given industry is labor saving, but its downward effect on product prices does not result in larger quantities sold sufficient to provide the same amount of employment in the industry as before the change, then temporary unemployment occurs.

However, jobs are available elsewhere in competitive markets.

If nothing else, wages are bid down enough in other industries to absorb the released labor.

Cato’s idea is that unemployment breeds lower wages in other industries, which encourages those other industries to hire more people.

Only a right-wing writer could look upon lower wages as an effective and worthwhile cure for unemployment. Taken to its logical extreme, universal slavery would be a wonderful way to prevent all unemployment.

It is an idea that has appeal for the “haves” of the world.

But the savings in the industry where the advancement occurs must also be taken into account.

Either more money goes to remaining workers in that industry, so that they raise the demand for other products, thus enabling the released labor to be employed in other industries without lower wages; or product prices are lower in the automated industry, so that consumers can buy the same amount and have income left over to demand more products from other industries, again enabling the released labor to be employed in those expanding industries without lower wages.

In summary: Though technology creates short-term unemployment, it lowers prices, which increases demand, which over the longer term, cures the unemployment.

And, in fact, that is the way things have worked in the past: Technology has cost jobs in the short term and created jobs in the long term.

This may be uncomfortable for those of us — all of us, really — who live our lives in short term segments, but from a long economic standpoint,  it has proven to be efficient.

Thus, while some unemployment may occur when there is technological advancement in competitive markets, it is both temporary and a natural consequence of the ability to change jobs freely.

It is certainly not a social problem requiring any sort of government action.

That last sentence, “It is certainly not a social problem requiring any sort of government action,” summarizes the right-wing attitude about virtually every social program. 

The idea is that government assistance to the poor, the unemployed or low waged worker, the homeless, the uneducated, etc. is not needed. Things will just work themselves out, naturally.

Can President Trump keep his promises to coal country? PBS Newshour

From 2011 to 2015, the coal mining industry lost more than 26,000 jobs, with 87 percent of those losses coming in the Appalachian region. In the last two years alone, several major coal companies filed for bankruptcy protection.

“We’re going to get those miners back to work,” Trump said in May 2016. “The miners of West Virginia and Pennsylvania … Ohio and all over are going to start to work again, believe me. They are going to be proud again to be miners.”

Many economists and energy experts say the current decline, at least in Appalachia, is here to stay.

Increased automation is one of several factors that they point to. Even as the production of coal was peaking in 2008, machines were replacing whole teams of miners, reducing the number of jobs in the industry.

These employment losses are very heavily concentrated. Southern West Virginia now contains five counties — the heart of the coal fields — that are in a deep depression.

Coal miners lose their jobs or move to another county or state in search of work. The subsequent loss in tax revenue, in turn, forces counties with shrinking budgets to cut jobs in government, some of the most stable employment available in these areas.

“It’s just this ripple effect that keeps rippling out to impact all these other layers, so you have less support for county projects, infrastructure development, for anything that supports the county budget,” said Stephanie Tyree, the executive director of the West Virginia Community Development Hub.

“It starts to go at such a rapid pace that it becomes very difficult to step in to mitigate it.”

From a cold, economic perspective, this is the way it long has been. Technology has destroyed some products and some industries, along with the jobs in those industries, and along with the cities, counties and states that rely on those industries.

But it creates new products and new jobs in other industries, cities, counties, and states.

While older workers suffer, younger workers seek employment in the new industries in other locations. A short-term cost with a long-term benefit.

But what do we do in the short term, about the suffering older workers and the job-seeking younger workers, and the suffering locations whose infrastructures have decayed?

Meanwhile, something altogether new has emerged on the scene. We no longer are talking only about a digging machine operated by one man, replacing a dozen pick-and-shovel workers.

Now, we are beginning to discuss AI (Artificial Intelligence) replacing every conceivable type of job: CEOs, CFOs. line managers, doctors, lawyers, baseball managers. One scarcely can imagine a job that hasn’t been, or won’t be, impacted by AI.

One scarcely can imagine a job that hasn’t been, or won’t be, impacted by AI.

The Chicago Cubs, the perennial losers, won in part because of Sabermetrics. Rather than making strictly intuitive decisions, Cubs management evaluates advanced statistics.

But why do we need humans to evaluate statistics, when AI can do it better and faster. Baseball managers, sitting on the bench, soon may be replaced by a computer sitting in another city, altogether.

Fortune Magazine
Mark Cuban: Robots Are ‘Going to Cause Unemployment’

Mark Cuban reiterated his warning that total robot takeover of blue-collar manufacturing jobs could come sooner than people may expect.

“Automation is going to cause unemployment and we need to prepare for it.” Similar warnings (have been made) by Bill Gates, Elon Musk, and Stephen Hawking.

In December, Cuban called on Donald Trump to make America a world leader in robotics, otherwise, “if nothing in the States changes, we will find ourselves dependent on other countries for almost everything that can and will be manufactured in a quickly approaching future.”

That is the “solution” advocated by a very, rich man: Because automation will take over blue collar jobs, the U.S. should invest in automation, so the U.S. can compete with other nations.

While the advice is good for the rich, it leaves out consideration of those unemployed people. What is to become of them?

And, lest you feel safe because you are in an “intellectual” job, it’s not just blue-collar jobs that are at risk.

The Guardian

Machines could put more than half the world’s population out of a job in the next 30 years, according to a computer scientist who said on Saturday that artificial intelligence’s threat to the economy should not be understated.

Expert Moshe Vardi told the American Association for the Advancement of Science (AAAS): “We are approaching a time when machines will be able to outperform humans at almost any task.

Unlike the industrial revolution, Vardi said, “the AI revolution” will not be a matter of physically powerful machines that outperform human laborers, but rather a contest between human wit and mechanical intelligence and strength.

How has human wit done in such machine vs. human contests as chess, Go, and Jeopardy? Not too well, recently.

And unlike people, machines don’t tire, don’t demand raises or vacations, don’t fight or argue.

They not only are physically stronger, but every year become mentally stronger and stronger — and stronger.

Bart Selman , a professor at Cornell University, said: “Computers are basically starting to hear and see the way humans do,” thanks to advances in big data and “deep learning”.

Citing research from MIT, he noted that although Americans continue to drive GDP with increasing productivity, employment peaked around 1980 and average wages for families have gone down. “It’s automation,” Vardi said.

The consultant company McKinsey concluded that 20% of a CEO’s working time could be automated with existing technologies, and nearly 80% of a file clerk’s job could be automated. About 45% of the work people are paid to do could be automated by existing technology.

See those two little words, “existing technology”?

If 45% of the work could be automated by existing technology, how much will be automated by future technologies?

We humans aren’t getting smarter, but our machines are.In 2013, two Oxford professors predicted that as much as 47% of the US workforce, from telemarketers to legal secretaries and cooks, were vulnerable to automation.

In 2013, two Oxford professors predicted that as much as 47% of the US workforce, from telemarketers to legal secretaries and cooks, were vulnerable to automation.

And the professors needn’t feel safe.

What about a professor who knows everything about his subject and all related subjects — a sort of “super-Jeopardy” contestant, who can answer any question. Wouldn’t it be better equipped to teach?

But then again, who would such a professor teach? An AI machine “student” promises to be more apt than a human student — instantly learning and no cheating on exams.

And then there are truck drivers:

MIT Technology Review
Self-Driving TrucksTractor-trailers without a human at the wheel will soon barrel onto highways near you.
What will this mean for the nation’s 1.7 million truck drivers? Multiple companies are now testing self-driving trucks.

Although many technical problems are still unresolved, proponents claim that self-driving trucks will be safer and less costly.

Driver fatigue is a factor in roughly one of seven fatal truck accidents.

“This system often drives better than I do,” says Greg Murphy, who’s been a professional truck driver for 40 years. He now serves as a safety backup driver during tests of self-driving trucks by Otto, a San Francisco company that outfits trucks with the equipment needed to drive themselves.

Last October an Otto-outfitted self-driving truck carried 2,000 cases of Budweiser beer 200 kilometers down Interstate 25 in Colorado from Fort Collins to Colorado Springs—while the truck’s only human driver sat in the sleeper berth at the back of the cab without touching the vehicle’s controls.

O.K., truck drivers and baseball managers.  But, what about doctors? We always will need human doctors, right?

MIT Technology Review: The Artificially Intelligent Doctor Will Hear You Now
March 9, 2016

U.K.-based startup Babylon will launch an app later this year that will listen to your symptoms and provide medical advice.

There are about 10,000 known human diseases, yet human doctors are only able to recall a fraction of them at any given moment. As many as 40,500 patients die annually in an ICU in the U.S. as a result of misdiagnosis, according to a 2012 Johns Hopkins study.

What does your primary care doctor do for you? He/she listens to your symptoms and provides medical advice.

So wouldn’t you rather have a doctor conversant with every known human disease, and every known treatment, a doctor whose knowledge increases every minute of every day, a doctor who is available to you for advice 24/7/365?

Clearly, the days of the primary care doctor are numbered.

Well, are surgeons safe?

Autonomous Robot Surgeon Bests Humans in World First
By Eliza Strickland, Posted 4 May 2016

In a robotic surgery breakthrough, a bot stitched up a pig’s small intestines using its own vision, tools, and intelligence to carry out the procedure.

What’s more, the Smart Tissue Autonomous Robot (STAR) did a better job on the operation than human surgeons who were given the same task.

Moving up the business ladder . . .

Could the CEO be replaced by a robot?
This article is part of the World Economic Forum Annual Meeting 2017

With the automation of many everyday activities, could a robot be a more productive addition to boardrooms of the future than a CEO?

In an era defined by the exponential evolution of technology, robotics and artificial intelligence (AI) have come a long way in a short space of time.

Robots can perform surgical operations, build cars, move stock in warehouses, check you into your hotel and serve you drinks. And they can do it quickly and efficiently.

AI is expected to evolve significantly beyond today’s relatively simple machine learning to better understand human behaviour. That means robots making decisions on their own in more complicated situations. And as they get cleverer, they would be able to take on increasingly challenging jobs.

But could they take on as challenging a role as the CEO?

If I’ve had a bad meeting, am suffering jet lag or simply have other things on my mind, my decisions could suffer. Robots don’t face the unpredictability we humans face, so their decisions are more likely to be consistent, based on facts.

Secondly, robots can work all day, every day. They don’t need sleep, weekends or holidays. No mere humans can say the same.

As technology improves, no job is safe for humans. If you believe “robots can’t do this,” or “robots don’t do that,” you may be wrong about today’s robots, and you surely are wrong about tomorrow’s robots.

There is nothing you can think of that robots one day, won’t be able to do better, faster, and cheaper than you can.  And that “one day” may come sooner than you can imagine.

So the world should prepare.

The fundamental purpose of robots is the same as the fundamental purpose of government: To help make our lives better.

Fortunately, we have all the tools we need, for we control the algorithms, i.e. the laws. As robots do more and more jobs, we can make those jobs less necessary for humans to do.

Humans have no innate need to dig for coal, drive trucks, or run companies. The prime motivation for the vast majority of jobs is money.  And we have the unlimited ability to create money.

Yes, some jobs give us satisfaction and pride. But we don’t need to have an employer for us to feel satisfaction and pride.

This all comes together with the Ten Steps to Prosperity.

The step we discussed in the previous post, Step #3, Social Security for All, provides income not dependent on work.  Importantly, it allows us to obtain goods and services, eventually without the need for a job.

Unquestionably, AI will make human labor less necessary. But, until robots are able to provide all of our goods and services, as in the mythical Star Trek “replicator,” we must find another mechanism.

And I believe that interim mechanism must be the distribution of money by Monetarily Sovereign governments via social programs.

Historically, people have toiled more, lived less comfortable lives, and died earlier than they do, today. “Work ’til you drop” was the human blueprint, just as it remains today for all other animals.

Today, our massive brains have given us less demanding work, more comfort, and longer lives — and have created even more massive brains, but of an electronic nature.

In America, Social Security, Medicare and other social programs evolved as small, interim steps on the long path toward a society requiring work only for pleasure.

We have taken those interim steps, those baby steps, and we must continue marching. No creation of Man exists in a vacuum. Every invention demands supporting inventions.

We invented trains, which made railroad tracks necessary. The auto made strong streets and highways necessary. Airplanes made massive airports necessary. The one cannot function properly without the other.

Similarly, AI makes strong social programs necessary. Neither can function properly without the other.

We have opened a Pandora’s box of Artificial Intelligence. We have the tools to control it, improve it, and to make it function properly. But we had better use those tools by expanding our social programs — our Social Security, our Medicare, et al.

To our advantage, we must use AI properly.

Or  AI will use us.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY