Archives For economy

robot barkeep

Many jokes or satirical pieces are funny precisely because they have a nugget of truth in them, something we can all at least understand if not relate to. This is why a satirical piece about the opening of a new McDonald’s staffed solely by robots due to the management’s concern about campaigns to increase minimum wage to $15 per hour, fooled enough readers to merit its swift entry on Snopes. I can’t blame those who were fooled. After all, we do have the technology and as the Snopes entry points out, there are numerous McDonald’s locations in several European countries boasting high minimum wages where customers order using touchscreens instead of talking to cashiers. Bumping up minimum wages, especially as it’s happening in several rather expensive West Coast cities, could certainly be an impetus for replacing humans with machines the same way it’s being done in numerous other professions. Today, we can shrug at the satire and lament the fact that machines are now advanced enough to make some people obsolete in the job market. But give it some time and this may well be a real report in the news.

One of the sad things about this kind of automation is not that it’s not happening because there aren’t robots capable enough to take over for humans being built. There are. In a structured and organized environment like a grocery store or a restaurant, with a finite number of pathways for machines to navigate, well known and understood obstacles, and clearly marked destinations, I would see no problem with robotic waiters summed by touchscreen or shelf stocking bots today other than their price tag. That’s right. Humans are doing certain types of work because it’s just cheaper to have them do it instead of machines. I really don’t think that $15 an hour wages can make these robots economically viable, much less cheaper, for many businesses over the next five years, but past that is anyone’s guess with economies of scale kicking in, the bugs shaken out, the quality improving, and the prices dropping. So it may be best to take that article not so much as satire, but as a warning. Another big wave of automation is coming and we need to be thinking about how to deal with it, not just debate it to death or oppose it with dogmas.

future highway

As I said before, we really want the Musks and Gates of the world to keep investing exactly the way they’re investing now and we want to keep on encouraging their choices through every tax credit, rebate, and whatever other enticement we can think of. Then we need to take that cash and start pouring it into the sciences and education. Why? Because the biggest reasons those knocked out of the job market by machines and outsourcing will not be able to find new, steady work are a) one-way globalization by nations happily trading goods and services, but severely restricting the flow of labor, and b) lack of skills for new careers and the prohibitively high price tag of acquiring relevant credentials. The former is very, very hard to solve because it’s asking certain countries to put the good of the world above their self-interest, which is political suicide for their leaders. The latter, on the other hand, is something we can take on quickly.

Right now, the typical new degree requires about $18,000 not including books, fees, and living expenses for the next three to four years. And by the time you graduate, your job may already be made obsolete by a new app or maxed out by existing candidates. You’ll also have trouble with getting enough experience in your new chosen field for employers and end up having to work an unpaid internship position just to put something on your resume. Oh and your student debt could only be dismissed by an act of Congress or an alien invasion, and given the current political climate, I would bet cash money on the aliens. Although I’m sure Sally May would keep their employees hounding debtors even while buildings around them are being mowed down by the invaders’ lasers until the bitter end, knowing how they typically operate…

This is an asinine state of affairs. We need something closer to formally accredited certification programs and really, really consider making the college degree optional again for fields which honestly don’t involve specialized knowledge requiring years of theoretical study. If we sponsor enough universities to offer them for affordable sums and actually do job training programs with major companies, we’d be giving millions of people displaced by machines new chances in life. There are trade schools and community college programs that try to fulfill this function already, but there aren’t enough, too many are just predatory scams, and too many HR departments will scoff at these credentials when they see them on a candidate’s resume. We need to tackle this as directly as possible because even management experts consider the way companies hire to be often broken and completely illogical, often indicating a management problem.

We also need to take our education system seriously, easing up on standardized testing across the board and setting our sights on helping students discover what they really want to do in life as they’re getting their general education, providing chances for real world experiences in their fields of choice. When they can see what their lives would actually entail if they choose to follow their dreams, they’ll make better choices about how to peruse them rather than play education poker with a college which views them as customers receiving a product for which they borrow many to pay and expect a bang for their buck, not students to be educated so they can acquire a career by employing the theoretical framework their professors give them.

The common thread in all this is of course lowering the financial and time commitment bars for getting to work and learning new skills as they are needed by the marketplace by getting rid of nonsensical requirements that don’t actually help students or adults looking to make a change. Not only would it help them immeasurably, but they could give them a chance to explore their potential, try more new things in life, and live up to their aspirations without sticker shock. Yes, we could try to create some sort of minimum national income for all citizens as some suggest, but other than the many social questions this idea raises, questions we’re obviously not ready and willing to answer, passively reacting to a decline in jobs and income growth for the 99% by widening the social safety net and hoping that we can change things by doing exactly what got us into this mess in the first place, this approach would kill the potential of millions.

Today we’re snuffing out engineers, writers, doctors, and designers by under-educating them the first 12 years of their schooling, bilking them the next four, and subjecting their resumes to death by a thousand keywords and buzzwords. Just giving them some money while placing all their goals even further out of reach isn’t going to do any good whatsoever. What we need is a lot more moon shots, crazy inventions, and government aided competitions for solutions to our big problems; big picture thinking that asks “what about tomorrow?” rather than “how do I make a buck today?” We got into this mess by taking the easy way, by assuming things won’t change. More of the same solutions to our problems, like Piketty’s wealth tax, or standardized testing, or more lopsided free trade deals, or pouring our money into another bubble, won’t get us out. We need to rethink our priorities and focus on investing in a new post-industrial world where basics like education, wealth, and jobs, aren’t just zero-sum games.

female robot

According to The Matrix’s extended universe, the machines went to war with humans after they founded their own city called 01, and became an economic powerhouse with which no humans could compete. The nuclear holocaust and weaponized plagues, forced, artificial breeding and xploitation of humans was basically us getting the rough end of a business dispute. Obviously, I could write a book as to why this couldn’t happen in the real world —  I won’t of course, but I can, just a friendly warning  —  but new machines are making certain humans obsolete right now, and believe it or not, you’re responsible for it. Automation is taking away more jobs than outsourcing and only recently has the alarm bell been rung. More than 2 out of 5 jobs might be done by an app in the next 20 years. And that’s a big, big problem for our future economy…

Unfortunately, this techie is contributing to it. One of my old projects involved what amounted to automating a middle management job for a group of closely related industries. You tell the app what you expect done, when, and who you may have available for the job. It will then supervise that the job gets done, have the capacity to update you on top stars and slackers, and through thorough records of how work is being performed, learn how the real world differs from your set expectations, to adjust those expectations accordingly. And I can see how it could’ve been used run friendly competitions between workers, give basic performance reviews based on what you feel is important. I’m sorry. You may start hating me… now.

But wait, how could automation like that be taking away job after job and we’re only now waking up to this fact? Well, as much as we should not blame the victim, it’s kind of your fault. At some point during your day at the office you catch yourself thinking “oh for the occult worship rites of Cthulhu, if only someone could do some arcane programming magic for me so I don’t drown in this paperwork!” And we could. It’s not going to be perfect, you’ll still have to review some of it, click buttons, add notes, approve the results, etc. But as time goes on, you trust the app more and more, the bugs have been shaken out, the once steady focus on a single part of a tedious process has become adaptable code that could be easily modified, and you start thinking again. You’re always doing that. “By the Glowing Orbs of Yog Sothoth! Couldn’t this thing just run with the results of all that data and handle the whole workflow for me?”

You know what? With all the information you fed into it on how to do that, It probably can. Only one tiny little problem. Your job was to deal with all the reviews and approvals of that incoming paperwork. Now, by the time you get to the office and grab your fresh cup of coffee for the day, the machine has already done your daily quota. Let’s say there were a few issues kicked back for review and you had to make a few phone calls. By the time early lunch rolls around, you’re basically done for the day. Some days there are no issues and nothing at all for you to do. Your boss starts wondering if someone else couldn’t just work resolving those issues into her routine and free up a few tens of thousands of dollars a year because your boss gets paid based on a list of objectives that includes cost-effectiveness and paying someone to do nothing is not what anyone would consider a good use of company resources, and so, it’s time for a layoff.

Now, now, it’s nothing personal really, it’s not that you haven’t been doing a good job, I’m sure you were. But you see, you’re human. And you have needs. Expensive needs. Food, housing, entertainment, kids, a retirement. Computers need none of that. They will do your paperwork in a hundredth of the time, with minimal errors that can be fixed to never happen again, and when they fail to perform, you don’t have to interview or train a replacement with some of those really expensive humans needs mentioned above. Just isntall new software. Of course you also won’t have to pay them, give them lunch breaks, or days off. They are the perfect workers by design, specializing in complex, repetitive, attention-draining tasks. You can’t compete. You also like to hand them your job by having them automate the vast majority of your workday.

So while you and your bosses kept asking the IT department for your machines to handle more and more and worried about losing jobs to off-shoring, the current wave of jobs lost to software probably snuck up on you. Now, 45% of all jobs are at risk of vanishing in the next few decades and if your workload happens to be somewhat repetitive and deal mostly with big numbers and paperwork, keep an eye on that whirring box of plastic and silicon in front of you. It wants your job, and will probably get it. Again, nothing personal, just business. While Singularitarians fear that a morally ambivalent AI will one day conquer us as the lesser things made of flesh that we are to its somehow superior mind, the real concern is that they will leave half of us unemployed and with very few options to make a living in the current economic climate.

Considering that we’re panicking today when official numbers show 9% unemployment, can you imagine the turmoil and uproar when they hit 40% and keep climbing? Populist uprisings would siege Capitol Hill, demanding the lawmakers’ heads on sticks! Techies like me would be hunted down for sport! (Ok, I don’t think that would really happen.) And while the pundits would lament the exploitative ways of corporations on one channel and telling the unemployed to just go get a job and quit asking for handouts on another, the truth is those most affected would be stuck.

And all this brings us right back to Piketty and the wealth tax. Not only will capital fueled by the steady hum and blinking lights of a million servers keep skyrocketing, but the economic growth on the other side will fall off. Hopefully the machine work on real problems and in real industries will offset the voodoo investing and trading of today and stabilize the foundation under all those capital gains, but we’ll still be left with the problem of having to take from the rich to give to the needy, Robin Hood style. It would very much appease some on the far left, but will be every bit as unsustainable as simply allowing the current fiscal chasm between the 1% and the 99% turn into an interplanetary divide because you give the backbone of the economy every incentive to put their money elsewhere or voluntarily trap their assets in an illiquid and hard to tax form. But there’s always a way out. It just takes some foresight and willpower, and we’ll dissect it with the conclusion of this series of posts tomorrow…

reserve note

Now, far be it for a lowly techie to question the work of an economist like Piketty since he’s, well, an economist, with many years of education and research in the discipline, and since I’m not a political pundit, I don’t suffer from the delusion that just being able to read his thesis makes me an expert in economics as well. But at the same time, this is the internet, I have wi-fi and years of professional blogging experience, so I’m going to barrel ahead anyways. Although it’s not so much to say that Piketty is wrong in his conclusions or his views about why economic inequality is a bad thing, as much as, at least in my opinion, his proscription has a hidden danger in it and it covers up the biggest and most problematic issue for workers in the near future, for whom his solutions will fall very, very short.

At the core of Piketty’s findings is the issue that capital gains are outstripping economic growth by comparison, and it’s really difficult to argue with mathematics on this. The compound return on $3 million in investments is going to grow a lot faster than savings from a $45,000 per year salary socked away into secure, slow growing investments. This is especially true because the larger sum lets you better absorb market losses, and gives you leeway to be more aggressive with your investment strategies, whereas smaller investments have to be far safer, since many risks become too expensive. And so, true to the saying, the rich get richer.

But this is not necessarily a bad thing. Inequality in and of itself is a very normal condition, and even in the most egalitarian community there are those who, to paraphrase an old Soviet quip, are more equal than others. Where the problem lies is in inequality looming so wide that social mobility starts to notably suffer, something that may be starting to happen in the United States. Certainly the capitalist ethos of the U.S. dictates that there will be winners and losers when we talk about money, and that someone who became a millionaire after many years of hard work and smart asset management should be seen as an example, not an exploitative oligarch.

But at the same time, this culture was based on equality of access, i.e. the idea that we should all start with similar opportunities and through hard work, achieve our dreams. When you’re no longer able to do that, the economic game becomes rigged and the consequences to long term stability are dire. Typically, nations with the biggest middle classes and the most social mobility enjoy the most stable and prosperous economies. Those divided primarily into a wealthy elite v. a small middle class and many in poverty, stagnate and suffer from more violence, crime, and political unrest. So Piketty’s point that we shouldn’t stand idly by, concluding that if an oligarchy emerges from a capitalistic economy we should simply accept it, has serious support behind it. But should we start taxing wealth at punitive levels to avoid an authoritarian kleptocracy?

In a short? No. Gains from investments are not certain, and even worse, if you recall the Great Recession’s more boring, but financially crucial lessons, many of today’s massive capital gains were built on the very shaky foundation of financial shenanigans and collaterized obligations by over-leveraged banks. Institutions borrowed so heavily to trade assets which were rotten at the core, boosting value of financial equivalents of badly burnt White Castle sliders to that of a filet mignion made by Gordon Ramsey, and then played a game of musical chairs with them. (That should be enough overlapping metaphors for one sentence, right?) And if you think the banks learned from their mistakes, you are an optimistic soul whose lofty expectations of your fellow humans is endearing, but sadly, misguided. Which is a long-winded way of saying “hell no.”

So do you really want to pump whatever you could recover before it’s squirreled away in some tax haven based on Wall Street voodoo into the economy and then tie government funding and basic social services to the ups and downs of some stock broker snake oil? Wouldn’t it be wiser to regulate financial monstrosities into virtual non-existence and promote investment in lagging and much needed areas of the economy and education? We really want people like Elon Musk and Bill Gates to invest into medicine, science, education, space, and new technology, and we should make it easy and gainful for them to do so with tax incentives. We don’t want billions to be loaned to banks that will use it to gamble on the spreads of some Hungarian foot fetish porn company stocks, or giant squid tentacle futures, we need to identify them as the junk they are, and punish those obfuscating their over-leveraged positions in overly volatile markets. Problem sort of, kind of, maybe solved in an ideal world? Well, not exactly. Stay tuned for the deep dive into how computers and robots play a big part in all this tomorrow…

[ illustration by K. J. Garbutt ]

fish kung fu

Robots and software are steadily displacing more and more workers. We’ve known this for the last decade as automation picked up the pace and entire professions are facing obsolescence with the relentless march of the machines. But surely, there are safe, creative careers no robot would ever be able to do. Say for example, cooking. Can a machine write an original cookbook and create a step-by-step guide for another robot to perfectly replicate the recipe every time on demand? Oh, it can. Well, damn. There go line cooks at some point in the foreseeable future. Really, can any mass market job not somehow dealing with making, modifying, and maintaining our machines and software be safe from automation? Well, sadly, the answer to that question seems to be a pretty clear and resounding “no,” as we’ve started hooking up our robots to the cloud to finally free them of the computational limits that held them back from their full potential. But what does this mean for us? Do we have to build a new post-industrial society?

Over the last century or so, we’ve gotten used to a factory work model. We report to the office, the factory floor, or a work site, spend a certain amount of hours doing the job, go home, then get up in the morning and do it all over again, day after day, year after year. We based virtually all of Western society on this work cycle. Now that an end to this is in sight, we don’t know how we’re going to deal with it. Not everybody can be an artisan or an artist, and not everyone can perform a task so specialized that building robots to do it instead would be too expensive, time consuming, and cost ineffective. What happens when robots build every house and where dirt cheap RFID tags on products and cloud-based payment systems made cashiers unnecessary, and smart kiosks and shelf-stocking robots have replaced the last retail odd job?

As a professional techie, I’m writing this from a rather privileged position. Jobs like mine really can’t really go away since they’re responsible for the smarter software and hardware. There’s been a rumor about software that can write software and robots that can build other robots for years, and while we actually do have all this technology already, a steady expert hand is still a necessity, and always will be since making these things is more of an art than a science. I can also see plenty of high end businesses and professions where human to human relationships are essential holding out just fine. But my concern is best summarized as First World nations turning into country-sized versions of San Francisco, a post-industrial times city which doesn’t know how to adapt to a post-industrial future. Massive income inequalities, insanely priced and seldom available housing, and a culture that encourages class-based self-segregation.

The only ways I see out of this dire future is either unrolling a wider social safety net (a political no-no that would never survive conservative fury), or making education cost almost nothing to retrain workers on the fly (a political win-win that never gets funded). We don’t really have very much time to debate this and do nothing. This painful adjustment has been underway for more than five years now and we’ve sitting on our hands letting it happen. It’s definitely very acute on the coasts, especially here on the West Coast, but its been making a mess out of factories and suburbs of the Midwest and the South. When robots are writing cookbooks and making lobster bisque that even competition-winning chefs praise as superior to their own creations, its time to tackle this problem instead of just talking about how we’re going to talk about a solution.

[ illustration by Andre Kutscherauer ]

unemployed lego clone trooper

Say you’re an employer in today’s economy and you’ve reached a point when you need to hire more people to meet customer demand. Considering the high unemployment rates and the most educated workforce on a quest to either get hired or advance their careers, the absolutely last thing you could complain about would be a lack of potential employees, right? Surely there must be plenty of people you can hire, many of them with the kind of skills you can use and out of a job through no fault of their own. And yet, the biggest complaint that some 52% of businesses constantly voice is a supposed lack of employable candidates with the right skills, and this complaint sent many a politician and activist looking for a solution to an educational crisis. But a new book by Peter Cappelli, an expert in management at one of the nation’s top business schools, lays out a case that it’s not the potential employees that are the problem, it’s the employers’ unrealistic expectations and a stunning lack of vision and imagination that are to blame for their hiring shortfalls. And it’s a strong case…

We all know people who have impossibly high standards for a romantic partner. We’ve all met the guy whose insistence that he will only date professional, doe-eyed underwear models with doctorates in particle physics from an Ivy League institution had us rolling our eyes. And we’ve all heard the girl whose dreams of a perfect, tall but not too tall and handsome but not too handsome modern day knight in shining armor made us doubt she’d ever even manage to have a relationship. Cappelli argues that from what he’s seen, many companies today behave just like those characters, seeking only the perfect employee and refusing to either train a new generation of workers, or raise the wages to attract the employees of their dreams. And since they either want an employee who’s been doing the exact job for which they’re hiring for at least three years at a competitor, or will train someone overseas how to do the same job for half the pay, they either end up competing over a very small number of people working for their competitors or hiring for the short term while plowing cash into new overseas ventures that can quickly become a massive liability due to many, many factors. This is not a gap in skills or a deficiency in education on the workers’ part, concludes Cappelli. It’s bad management.

And there’s more. There’s an ongoing boom in vocational schools and medical and tech related fields, so the supposed massive shortage of STEM workers may well be overblown, and we actually do have just enough scientists and engineers out there. However, employers are refusing to pay them adequately and expect them to have not just work experience in the field, but a very specific kind of work experience. Forget the much talked about “transferrable skills” from past careers. No one wants to hear about them. Even worse, while you might be the golden candidate now because you’re applying for the same job at company after company, you’ll have trouble moving up the career ladder because those hiring you want you to keep doing the same job that you’re doing now, not advance into new roles. Or your job could fall out of favor and you’ll find yourself unemployed in short order, and you’re likely to stay unemployed because employers are now often discarding resumes from those who lost their jobs, often assuming that if you were a good employee, you would still have your job, and if you don’t, this means that you simply weren’t valuable or good enough to keep. How do you combat such an obsessive, all-consuming myopia? And why do we allow the employers who refuse to hire anyone but dream candidates get away with blaming the workers for not living up to their wildest hopes and dreams?

What if we were to continue to follow this game of musical jobs? Employment wouldn’t grow much without an occasional economic bubble to prop up job creation, workers would constantly have to change careers in the attempt to keep up with the latest fad, amassing degree after degree and mountains of debt gambling on the latest major they undertake paying off into a job, wages would remain stagnant, and employers would still be complaining about a lack of qualified candidates, using the term “qualified” as a synonym for “perfect in every single way.” They’ll keep outsourcing, creating economic bubbles elsewhere and spending billions on efforts to manage the liabilities of sending work thousands of miles away to a group of people they barely know, in a country that will more often than not employ protectionist measures that allow former subcontractors to build their own versions of the companies that once employed them with their bosses-turned-competitors footing the bill for their creation and growth. This is an unstable, unsustainable trajectory, but unfortunately, it seems to be the trajectory we’re following, assuming that the market knows best even when it never did…

According to what we’re often told, if we work hard, study, get good grades, and go to college, we’ll have good jobs that let us make a steady living and the typically poor college student days will be long behind us as the president of a university hands you your graduate degree. Sure, you may not have the life of plenty but you are definitely clearly of having to go on welfare to feed yourself, right? Actually, maybe not. As it turns out, there’s a disturbing number of PhDs on food stamps working odd jobs after all the schooling and hard work that would make them immune to the trials of the working poor, according to the prevailing societal truisms. Many times, the initial reaction is to say that it’s really not that huge of a problem, especially compared to the millions upon millions of non-PhDs currently out of work and that these situations are almost certainly temporary. Of course one could see why not a whole lot of administrators and pundits would be interested in talking about PhDs on welfare at any length. It really drives home the fact that a lot of long-held American beliefs about education and income can vary widely from reality and that you could do everything right only to end up having to file for aid.

Unfortunately, it’s not just the PhDs who have trouble turning their education into stable incomes. Quite a few undergraduate students are also ending up making a lot less than they may have expected, and while you can say that the compensation premium for a bachelor’s degree hasn’t changed very much even during much of the Great Recession, the worst salaries in decades have effectively made that premium worth far less than it once was. In fact it’s a neat accounting trick that helps for-profit trade schools and college lenders. They can lure in students by showing the relative premium of a college degree but forget to mention that in real dollars, this premium gives graduates far less purchasing power than they had five years ago. Oh and that’s if they do manage to get a job, which may or many not even be in their field. But come on, they did the right thing, they’re obviously on the way to something great, right? After all, they studied hard enough to get into college and after applying themselves earned degrees, exactly as mom, dad, and everyone else around them told them they’ll have to do to get a good job and start a career. How could it be that we send millions of students to college to spend all that time, money, and effort, and have them rewarded by crushing debt and unemployment?

But the sad fact is that this is exactly what we obliviously do while pretending that the system in which we’re working is fundamentally just and seldom fails to reward hard workers and good scholars. All right, why don’t we look at it another way? A lot of the welfare PhDs spend tens of thousands of dollars getting degrees in all sorts of humanities disciplines for which there’s little demand so surely they must be to blame for their bad situations. How many people will be interested in employing someone who wrote a dissertation on the social dynamics portrayed in silent films? Who but a handful of universities need a PhD in theology? This may be a good way to salvage the seeming fairness of the system but it’s fundamentally flawed. Yes, as I’ve said many times myself, you can’t rely on a degree in humanities to pay your bills, but at the same time, the problem isn’t that humanities PhDs are ending up with big loans and empty pockets, it’s that a degree does not guarantee sustainable, full time work. Even the most highly demanded STEM disciplines are subject to the whims of the market and predicting exactly what will be needed in what city and by what companies in four years before you even start your first class, would be an exercise in clairvoyance. Yet we expect college students to perform this feat every year and then fume when they fail to fare any better than a psychic. Of course they can’t do it.

On the part of the humanities scholars who find themselves out of work and academics who find themselves under attack, some write articles berating modern society for ignoring their passion for crass consumerism. I understand it may be disheartening to know that the world cared more about Twilight than Joyce and I agree, it’s really quite sad. At the time time, people need food, shelter, security, roads, and medicine. It’s not that PhD after PhD is discarded by society for daring not to care about the latest Angry Birds sequel or choose to study the most obscure language in the world to mine it for insights into human culture, but that its immediate and material needs have to take precedence over their academic ones. Society doesn’t tell you to crank out a little metal widget because it needs to print some navel-gazing self-help treatise or load another trite pop bleating on iTunes, but because it needs to fix a road, or develop a new antibiotic, or write some new software to keep important financial transactions secure. It doesn’t want the luxury to plan for its new generations and the best you can do is try to be at the right place, at the right time to find a career close to what you like to do, and when you get there, there may not be a reward for college or good grades and a C- student may be your boss. This is how our world works today and let’s not pretend that there’s some magical combination of degrees, GPAs, and professional credentials that will save you when you find yourself in a really bad economy…

There is a bitter Israeli joke reported by some journalists who write about the nation’s rapidly growing schism between secular Jews and devout Haredi fundamentalists. It states that one third of the country works, a third pays taxes, and a third serves in the military. Unfortunately it’s the same third of the country. Sadly, that’s not a far cry from the truth since in Israel, fundamentalist Jews often live off government welfare for the religious, do not work because they believe their only task in life should be reading and re-reading holy texts, and can’t be drafted to serve in the military. And so the secular Jews fight wars, work, and pay taxes while the Haredi sit in synagogues, have families with 8 to 12 children, and, to put it bluntly, mooch off the secular population, loudly protesting any resistance to their whims in the lowest and most underhanded ways imaginable. With huge families they don’t bother educating, they have virtually no useful skills to contribute to modern society, and as secularists limit themselves to one or two kids, their population is growing by leaps and bounds. Israel has a serious fundamentalist problem which will have to be confronted soon, and from which we need to learn.

As has been noted before, fundamentalism is antithetical to the modern world for a whole host of reasons, and a society trapped in the past as required by extreme religious dogma, can’t adapt to the changing world it inhabits. Israel’s economic game plan relies heavily on research and technology, primarily computing and all applications of it, ranging from social media to weapons design and security. Huge investments in medicine, basic research, and computer science require a workforce that completed the prototypical modern education heavy in science and mathematics. And guess what the rapidly growing Haredi populations usually consider heretical distractions from studying the Torah and Talmud? Exactly that. While the government wants to keep plowing cash to create the most modern economy we can imagine, it’s facing the fact that many of those who are just the right age to either take full advantage of these investments, or can start their education to reap the future benefits of this modernizing boost, have either voluntarily ruled themselves out from consideration with their religious devotion, or have been prevented by their fundamentalist parents from becoming scientists, or researchers, or engineers. It’s a textbook example of the kind of thing that gets Dawkins and Harris fired up, a denial of education and knowledge through imposed dogmatic ignorance and arrogance.

And this is not to mention the political and social fallout from a fundamentalist swarm either. Secular Israelis will fume about stories of Haredi blocking ambulances from crossing their districts on Sabbath, demanding a strict obedience to the Torah’s prohibition of work on that day even if this results in someone’s death because it must have been G-d’s will to take this person’s soul on Sabbath. If you believe the claims, people have died because ambulances either didn’t get to them in time, or because the patients didn’t get to a hospital quickly enough to start treatment. Trying to negotiate with Jewish fundamentalists seems futile. After all, how can you have a productive discussion with those who believe that their opinions are actually divine edicts and you’re a sinner who is disobeying the world of G-d rather than a person with opinions and ideas that need to be heard and discussed in more depth? If you visit Israel, you’ll see a country divided into a population trying to keep up with the modern world and embrace its challenges, and a population which confines itself to the 18th century and regards their fellow citizens who are scientifically educated and modernized with thinly veiled contempt, if not outright pity and disgust. What could be a successful case study in how to use government investments in science and technology to boost the economy and education is being hampered by arrogant dogmatism.

Of course this is not a perfect look into the future of the United States in which Christian fundamentalists gain inordinate political power since they do believe in science and technology as long as they don’t run contrary to their beliefs with their application, and wouldn’t spend all their time only studying the Bible. They would be more than willing to serve in the military since they see themselves as holy warriors, and serve already. In the grand scheme of things however, outsized fundamentalist influence on American politics would defund a lot of scientific and research programs, casting them as a waste of public cash, keep hobbling science classes by either injecting religious connotations into them or forcing them to stay mum about crucial concepts in both biology and physics, and trigger many highly unpleasant social changes which would force religious dogmas into law. All of it is being done now and while so far, promoting social archconservative views in public is just an easy way to win votes for right wing candidates while implementations of these views generally stall in the legislative branch or get watered down into irrelevance on riders to funding bills, extremely powerful and really devoted fundamentalist lobbies could start imposing their will through politics. And in a day and age when we should be investing into economic modernization, we literally can’t afford to step back in time and simply bow before the whims of those convinced that they have divine edicts to make their own rules.

Sometimes you come across an idea that at first sounds far too crazy to ever work. But then, as you think and do a little mental math, you find that it actually makes perfect sense despite running contrary to everything you would think should happen. One such idea calls for worldwide forgiveness of national and personal debts to get us out of the ongoing global economic turmoil, and not in the form of a leveraged buyout or new plans for repayment mind you, but that of a full on debt jubilee. Sound utterly absurd, doesn’t it? Giving up on money you lent without getting a significant portion of it back in even the best case scenario? How will that help? Isn’t the whole point of lending money to get it back with an interest payment in the first place? With trillions in debt around the world, surely this would only make things much worse for everyone as banks trying to collect have to write off billions since a similar dilemma triggered the Great Recession in the first place. But then again, if we consider one simple fact, this suggestion may not be as insane as it may seem. After all, there’s a reason why the banks and governments are trying to collect those trillions. Because their debtors don’t have them.

Consider the following situation. You lent money to someone who used it to buy a new car and were getting a regular payment every month on the debt. However, things changed and the person lost his job. You took the car back but there’s still a lot of money owed on it and because a lot of other people lost their jobs, selling this car to get your money back is proving to be very difficult. Meanwhile, your debtor stopped paying you altogether because he chose food over paying back the debt. What are you going to do now? If you’re a mobster, you can send in Vinny with the brass pipe, but as a more or less respectable lender, all you can do is demand that he pays you and send nasty letters to credit agencies about his ability to honor his debts. You could hire a major collections agency to harass him but ultimately if he won’t pay, there’s no legal way to force him to do it over a small wage garnishment if he manages to find a job. After expending all the time, effort, and yes, money to file complaints and hire all the collection reps, you still don’t have much cash back. Your debtor just doesn’t have that money and all you have is the fantasy of getting it back and a note that someone owes you that cash. And at some point you’re just going to have to cut your losses and live with the situation or you’ll lose even more in your attempts to recover the money that isn’t actually there and may never materialize anyway.

Many lenders across the world are in the same situation. With widespread unemployment across the world’s economies, yawning national debts, and failing banks on life support all around them, their debtors aren’t very likely to have the money to pay them back and in some cases, their hounding actually interferes with whether they can even get a job to pay them at all. When banks refuse to modify loan payments or harass debtors, they effectively shoot themselves in the foot by sabotaging a method of getting their money back to some degree in the near future while building ill will with their debtors, giving them every reason to think that there’s absolutely no way to reason with them, and trying to create an alternative debt repayment plan and just walking away with no additional payments will have the same exact consequences. Given the pressures of survival, they will opt for simply walking away more often than not under these circumstances. Banks win nothing, the debtors lose across the board, nobody is happy, and the banks may now have to ask for new handouts because for some odd, inexplicable reason, their debtors aren’t paying them back. So a debt jubilee is basically saying "forget it, we’re just going to start over." Of course there’s the moralistic downside of excusing debtors who acted in bad faith and falsified information, but in the grand scheme of things, banks don’t exist to enforce morality.

Lenders are in business to make money and relying on imaginary money that should come any day now from the deadbeats is not profitable. Instead of demanding cash they’ll never see or growl about giving debtors an easy way out, they should simply make it hard for those whose debts are forgiven to take on new loans until a new track record of good payments can be established and let those bad debts go. This way, those who stay current and repay their debts on time are given great borrowing terms as a reward, while those whose debts were discharged would be denied all but the absolute basic lending services as a punishment, much like we already do. Bad debts are cleared, companies can now operate with more freedom, people under a crushing debt can finally breathe out and start spending and stabilizing themselves. This would be especially true for a household in which a medical emergency triggered a default since people don’t have a choice in getting sick, and medical care can be exorbitantly expensive, resulting in six-figure medical bills few can pay. Though, as a world fatigued by three years of debt crises recovers through debt forgiveness, there has to be an agreement that no one can continue the status quo and trigger another such debt crisis, an agreement what will be hard to reach once the global debt forgiveness genie is out of the bottle and can be summoned again…

Over the last month, I wrote a few examples of how corporations acting in their own self-interest can create a whole lot of problems for society at large when politicians basically allow them to buy legislation favorable to their goals. But a big addendum to the description of that issue seems to have been missed and it was that addendum which was used to explain why supply-side economics doesn’t work. So just to make things clear for future reference, all the corporate self-interest lamented on the web should not surprise us and we should not be turning companies into villains. All of us have our personal interests and all of us with the means tend to do what we can to get our way. Complaining that a company wants less taxes and regulation is like voicing your indignation when a hungry bear bulking up for the winter mauls you after you try to take berries under its nose. The bear doesn’t care about you. It doesn’t care about other bears. It just wants to eat and if you want to take what it sees as its food away, it will predictably get agitated and use its superior strength to protect what it found so if you really want berries that badly, feed the bear something else and pluck them while he’s busy.

No, the problem comes when corporate CEOs start fancying themselves as political masterminds and make their business not just a way to make money for themselves and their shareholders, but to push their political dogmas on all those around them. When a CEO rises from his chair and declares that the nation in which he lives should be ran the way he wants and proceeds to bribe a legislator to act on his personal whims, then it would be more than appropriate to complain. And his shareholders shouldn’t be too pleased either since the focus on personal ideology and short-term avarice means bad PR and less sustainable dividends for them. I bet you could make a lot of money by stripping away jobs from entire towns and outsourcing everything to the lowest bidder. But eventually, you’ll run out of customers since they have nothing with which to buy your goods and the nations to which you outsource won’t let you sell your wares because they’re using your money as the start-up capital for your future competitors. And the politicians we elect supposedly to guard our interest have to be able to keep companies from trying to mandate what’s best for them by bribery, and avoid elevating the corporation as the most idyllic and model organization in all of existence because that’s just wrong.

The truth is that whenever you have a large group of people, you’ll have bureaucracy, inefficiency, and people trying to dodge responsibility for their mistakes. Whenever politicians and pundits talk about inefficiency and red tape in government, I like to try and compare that to the supposedly stellar efficiency of a major company, especially when it comes to resolving such things as billing issues. Just ask some very satisfied and happy customers of Comcast and AT&T how efficient and responsive these conglomerates are in responding to an angry customer trying to fix his bill. Or the kind of stellar service you can expect from a typical major airline. So just as we shouldn’t naively expect that companies are necessarily wonderful, efficient, and benevolent to the economy at large, we also shouldn’t expect them to create jobs for us whenever we need them and then hurl frustrated invective at those companies when they don’t. Take the bear in our analogy. It’s not his job to make sure you’re fed since he’s looking out for his needs. Likewise, we shouldn’t blame companies for not hiring a whole lot of people, especially when the economy is down. They have no incentive to do so and the small tax credits offered in the last few years to generate new jobs don’t offset the expense of hiring a new employee to nurture and train from scratch. And promising them tax abatements for years on end simply gives them some incentive to move their offices after the abatements are up and taking the few jobs they brought with them.

Want to get companies to create jobs? Make it in their short term interest to do so. The problem is that over a three decade stretch, the economic and political structure we set up has elevated The Company to the status usually attained by sages and saints. People placed their hopes and dreams into wise businessmen whose brilliance was lauded in breezy hagiographies, and the CEO became the epitome of logic and efficiency. We thought that they’d go out and start looking for unrecognized talents in people, train them, promote them, and pay them to learn and grow because they knew what was best for the economy in the long term. Watching our mythical corporate idols fall from grace in the Great Recession, we now know that their real focus is squarely on the quarterly earnings reports and that they’re not all brilliant visionaries who have amazing solutions to all the world’s problems laying around on their desk. But the companies aren’t the bad guys here. Sure there are corporations ran by venal, short-sighted, avaricious CEOs with a loose grip on ethics and who can dodge tax bill after tax bill while decrying how high taxes are, but did we really expect Ghandis and Buddhas? People go into the business world to make money and we shouldn’t have been treating this pursuit as some noble goal for the betterment of the world. It’s not that businesses lost their way over the decades or became evil. It’s that we were exposed to far too many romantic idolizations of the business world and are now disappointed that it was all just a facade we bought hook, line, and sinker at some point in our lives.