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Posts Tagged ‘GDP’

I just think that – when a country needs more income and we do, we’re only taking in 15 percent of GDP, I mean, that – that – when a country needs more income, they should get it from the people that have it.
   —    Warren Buffett
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On This Day In:
2020 Steppin’…
2019 Every Vote Counts
2018 Or A President
2017 Pleasures
2016 Why Not?
2015 Je Suis Charlie
2014 To The Nines
2013 Higher And Truer
2012 Life’s Last Question
2011 A Single Heartbeat
A Little Male Humor – WHY MEN SHOULDN’T RETIRE

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Capitalism, however, has been here before.  One of its great historic strengths has been its ability to reform and change shape as social needs and democratic demands shift.  In the late 19th century, parties of the right in Europe brought in a wave of progressive reforms to suit the times, from expanded union rights to the social insurance that began the creation of the modern welfare state.  In these cases, there was a pragmatic and also a moral imperative at work to improve the lives of ordinary citizens.
Yet today, politicians and thinkers have largely stopped making the case for capitalism as a moral good.  What we have instead are abstract ideas about the supremacy of markets.  At the same time, the surges in inequality seen in country after country are corroding the moral principles that underpin capitalism.  The ethical basis for capitalism must be that it offers better life chances for a majority of citizens.  If it is failing to do that, what is the justification for its dominance as an economic system?  Little wonder that a Gallup poll found only 45% of U.S. young adults view capitalism positively, a 12-point decline in just two years.
Artificial intelligence has the potential to alter our lives to an even greater extent.  AI is best understood not as an upgrade of our existing structures but as a general-purpose technology (GPT), like electricity or the steam engine.  GPTs are transformative in their social and economic impacts, reaching into every aspect of life.  “Some people believe that it’s going to be on the scale of the Industrial Revolution,” says Demis Hassabis, the AI expert who co-founded the pioneering machine-learning company DeepMind.  “Other people believe it’s going to be the class of its own above that.”
The crucial factor for managing these changes is time.  In 1900, the proportion of the U.S. population who worked in agriculture was 38% and the proportion who worked in factories was 25%.  Today only 1.5% of the population works in agriculture and 7.9% in factories.  So there’s been a catastrophe of unemployment?  Absolutely not: the losses were more than made up for by growth in other sectors of the economy, which went from providing 24 million jobs in 1900 to some 150 million today.  Most of the new varieties of work simply didn’t exist at the dawn of the last century.  Given time, we know from experience that a society can manage this kind of transition.  The question is, do we have that time?
…Think about what the working life will be of a person who can expect to live for a full century.  What can we say about the likely span of her economic and political life?  The only absolute certainty is that it will involve change.  It will not be static.  It will not involve doing the same thing in the same place over and over again.  Unless we are all prepared for change, we are not prepared for the coming world of work.
At the individual level, the prescription for what we should do to prepare for this new landscape is relatively straightforward.  For a life of multiple careers and skills, people need an education that prepares them for a lifelong process of training and retraining.  They will need, more than anything else, to learn how to learn.  Flexibility and resilience will be crucial.  It won’t be easy, but at least we can see it clearly.  At the level of society it is harder.  Let’s be honest: this is a vision of insecurity, projected across a working life.  It is a clear principle of economic and political history—one we’re relearning today — that humans hate insecurity.
What we need is to rethink the relationship between the individual, the corporate sector and the state.  In recent decades, we have seen a “great risk shift” — to borrow the term of the Yale social scientist Jacob Hacker.  Individuals in temporary, insecure, giglike employment are taking on risks that used to belong to the corporate sector.  Not coincidentally, the share of GDP going to the corporate sector as profits has risen and the share accruing to labor as pay has gone down.
That trend, and that risk transfer, are not sustainable over time.  We need a social safety net focused on career support rather than just simple unemployment benefits.  Companies and individuals and the state must work together to build an enhanced and more flexible version of the welfare state that overlaps with lifelong training and education.
The architects of this new industrial revolution, by the way, agree with this proposition.  Yann LeCun, the chief AI scientist at Facebook and one of the pioneers of deep learning, said recently that every economist he has spoken to agrees that governments must take measures to compensate for rising inequality brought about by technology.  “All of them believe this has to do with fiscal policy in the form of taxing, and wealth and income distribution.”
We also need a functioning marketplace.  The collapse of U.S. government action in the area of antitrust and competition law has led to a damaging concentration across most industries — from cable TV to airlines, online advertising and farming.  While a new generation of robber barons controls huge sections of the U.S. economy, corporate profits surge, wages stagnate, and fewer ordinary workers have reason to believe in the capitalist system.
The final component of what we do next concerns not what we do but what they do — “they” meaning the elites who have profited most from the trends of recent decades.  Quite simply, those elites have to pay their taxes.  They have to stop using offshore havens and accounting tricks to hide their wealth from the societies in which they live and from which they make their profits. Instead of founding think tanks and gorging on discussions about improving distant lives, they have to attend to the lives around them in the places they actually live.
A new emphasis on the role of the nation-state; a new partnership between the state and the private sector and the individual; new action on lifelong learning and training; higher and fairer taxes; less security for big corporations: these things shouldn’t be unthinkable.  It is strange and sad that the least likely thing on my wish list is the idea that elites will change their behavior.
But elites may have to change if they don’t want change to be imposed on them.  This coming wave of technological transformation has the potential to be the most serious challenge modern capitalism has faced.  For people who don’t have the chance to change and adapt and re-skill, a pitiless world ruled by algorithms and machine learning, in which they have no utility, no relevant skills and no security, could look completely unlivable.  Facing that prospect, the populations of the developed world may do things that make the current populist moment look polite, low-key and lawful.
    —    John Lanchester
From his article in Time Magazine (dtd: Feb4/11, 2019): “Economy: Leveling The Playing Field
The article also appears online as: “The Next Industrial Revolution Is Coming.  Here’s How We Can Ensure Equality
The link to the entire online version is: http://time.com/collection/davos-2019/5502589/next-industrial-revolution/
[Please note: This article is extensively quoted without permission from the author or from Time Magazine.  I personally subscribe to the physical version of Time Magazine and have done so for almost 50 years now.  I make no claim to ownership of the article or its ideas.  I do NOT normally post so extensively from an article, but this was (to me) a powerful article about the future of civilization, so I have made an exception.  The ellipses indicate where I have edited out portions of the article.  I hope neither the author nor Time Magazine will object to my editing or use of the article.  Obviously, I encourage all of my readers to go to read the original.    —    KMAB]
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2014 A Potential To Be Concerned
2013 Fine No More
2012 Have You Checked Your Height Lately?
2011 Are You Convinced?

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The existing safety net for older Americans – a mixture of Social Security, Medicare and Medicaid – was built for a society that no longer exists.  When Congress created Social Security in 1935, the average life expectancy in the U.S. was 61; now it is nearly 80.  When Congress created Medicare and Medicaid in 1965, it was still common for people to die of acute medical issues, like heart attacks; now many survive those traumas and go on to live, with some assistance, for decades longer.  In 1960, the U.S. was overwhelmingly young: just 10% of the population was over 65.  By 2040, 1 in 5 of us will be eligible for that senior ticket at the theater.
As more people live longer, the social and economic systems designed to care for them are changing.  In midcentury America, women had yet to join the traditional workforce en masse and so were widely expected to keep doing what they’d always done: provide unpaid care to children and ailing relatives at home.  Moreover, in the 1960s, a large portion of families had access to stable, fixed pensions in retirement, and about a quarter of all workers were covered by generous, union-negotiated contracts.  Staying in the same job for decades was common.
None of that is true anymore.  Some 40% of households with children under 18 are now headed by women who are the primary breadwinner.  Those women can no longer stay home to care for children or ailing relatives without risking their family’s financial stability.  Meanwhile, fixed pensions have all but disappeared, and union membership has fallen by more than half.  Nearly 1 in 3 nonretired Americans has no retirement savings at all.  “Our current system doesn’t reflect how we’ve changed as a society,” explains Dr. Bruce Chernof, president and CEO of the SCAN Foundation, which advocates for older adults.  “So it’s being asked to do all kinds of things it wasn’t designed to do.”
Much of the U.S. economy rides on how this crisis plays out.  Spending on long-term care is expected to more than double from 1.3% of GDP to 3% by 2050 as demand increases alongside an aging populace.  America’s entrepreneurial system is coming up with myriad new ways to serve this growing demographic of gray-hairs.  But in an era of deregulation, companies that profit from the natural, but often unsettling, process of aging and dying aren’t always scrupulous.  The result is a social tension: As health care companies seek to reap not only efficiencies but also profits from a jury-rigged, outdated and overburdened system of elder care, how do we protect those who are often most vulnerable to exploitation?
When things don’t work, the results are ugly.  In nursing homes and assisted-living centers, ever more ubiquitous arbitration agreements leave the elderly without access to a basic civil trial.  Hospice care, beloved by many, is seen as a potential profit center by companies seeking government contracts while providing diminished service to those at the end of their lives.  And Medicaid, once intended to be a last-ditch safeguard for the poorest of the poor, is creaking under the weight of new obligations.  Medicaid is now the default payer for 61% of all nursing-home residents in the U.S., according to a June 2017 Kaiser Family Foundation report – a demand that’s likely to continue to increase.  Meanwhile, adult children already contribute $7,000 to $14,000 a year to caring for an aging parent, according to a 2016 AARP report; that number will likely see an uptick too.
   —    Haley Sweetland Edwards
From the “Special Report”: “Dignity, death and America’s crisis in elder care
Time Magazine, 27 November 2017 issue
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2016 And A Fellow Who Insists On Telling Us He’s Smart?
2015 Curves Ahead
2014 Sitting?
2013 Misperceptions
2012 Essential Experience
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Sound Familiar?

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We’ve used up a lot of bullets.  And we talk about stimulus.  But the truth is, we’re running a federal deficit that’s 9 percent of GDP.  That is stimulative as all get out.  It’s more stimulative than any policy we’ve followed since World War II.
     —    Warren Buffett
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On This Day In:
2016 Picky, Picky, Picky
2015 Another Limitation On Religion
2014 Enduring
2013 Tell Me More…
2012 Passing…
2011 Fake It ‘Til You Make It

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