Income Inequality - Globalization and Technology

I heard excerpts from Obama's interview with NPR this morning, and I think the most interesting question was what he thought about the way the divide between rich and poor has increased over the course of his presidency. Obama cited globalization and technology as forces that pushed middle class jobs overseas or replaced them with machines. These are prevalent trends and the Obama administration is doing what they can to combat them. He said he did not believe these factors made the divide inevitable, but what he cited as steps he's taken to mitigate them were nothing more than band-aids: raising the minimum wage, closing tax loop holes, making the income tax more progressive, etc. If you are benefiting from a raise in the minimum wage or an increase in food stamps, then you are not, and will not be, part of the middle class. Disposable income is the key to a middle class existence, be it for a more comfortable lifestyle or for being able to save for retirement. No disposable income = no middle class. One thing that I hope he mentioned was how many fewer people would be falling out of the middle class on account of medical expenses, thanks to Obamacare. He has taken steps to stop the number one cause of bankruptcy, and should receive tremendous credit for that if successful. But the downside of globalization and technology are combated through education, and it looks like that's going to be somebody else's claim to fame.

Sure, taxes could be more progressive, and certain banking practices could be made illegal, but it comes down to what jobs Americans are getting. To improve the jobs Americans are getting, technology needs to become an ally. Technology can be a driving force behind jobs directly or indirectly, as a means to an end or as the end itself. We don't view things like planes, trains, or automobiles as technology, but they were at one time, and they created tremendous business. They ultimately became so ubiquitous that they're just a part of ordinary life, and our normal economy now. I'm sure fleets of stage coach drivers and mountain guides were replaced by a small team of train engineers, but was that a weight on the economy? No! When did our view of technology become so backwards? Oh yea, when we stopped educating our students to be able to change with the times.

Nobody would say that public education was better back when steel was being invented than it is now. What can be argued however is that there wasn't such a void between where education ended and where utilization of modern technology began. For example, anyone could pick up a steel shovel or walk into a steel building with no prior knowledge, and be able to benefit from the technology; that may not be the case for today's computer driven economy. As steel structures became ever more complicated, greater education was needed to meet the challenge, same is true of today's tech. The big difference lies in the fact that from the beginning of the 20th century to around the 70's, our education system was adequate in closing the gap between the state of technology and how much learning was required to profit from it. In other countries, that's still true, but we have fallen behind. The gap between where our schools leave us and where the state of technology is today has widened.

I think some notes on the Khan Academy would be an appropriate followup to this post, then probably a post on business practices, which I think is really where the divide comes from (ie: technology and globalization are already allies, and have already made America wealthy, but that wealth does not spread).

2012 Election Night

Just wasted a whole bunch of time babysitting the electoral college vote results to see if I'll be winning the office pool tomorrow. But the one reason I watched the main news networks rather than Comedy Central was to see the concession and acceptance speeches. Romney just gave his concession speech, and I must say, that was the most gracious, genuine concession I've ever seen in a presidential election. He thanked his supporters, lent his support to Barrack Obama, and moved on without looking like he had just been punched in his soul. That's a great way to lose.

One commentator said of Obama's win was that, while he had to admit that though things are not as good as he had hoped, and that this has been an imperfect 4yrs, he also succeeded in convincing the people that he is genuinely on their side. That's an interesting perspective that I definitely agree with, and I like the notion that you don't necessarily have to run on accomplishments, because those are always relative to the times and opportunities, but can really run on core values.

And Obama's speech... somewhat of a long winded thesis, but wow did he bring it home in the second half. He laid it all out: What makes us great is our ability to hold together as such a diverse people; the recovery will not be a one man show, but rather we need to take to heart Kennedy's words; we are not as divided as we make ourselves out to be, "not red states and blue states, but the United States"

Also, Chris Matthews and Ed Schultz... not my favorites.

Winners and Peacemakers

I was listening to a story about the bloodshed in Syria, and one of the guests made the assertion that "all men want peace." I immediately thought that can't be true, at least that certainly can't be the first priority of all men. So what is it that puts peace on the back burner? The number one obstacle I could come up with was the desire to win - and that of course includes all the reasons behind a need to win such as pride, anger, vengeance, etc. But what an odd realization, that winning could be the natural enemy of peace. Lefer pointed out that this can't be true on the whole, because often times, after there is victory there is peace. You see decisive victories like ours over Japan in WWII and the peace and prosperity that followed, and surely winning and peace cannot really be opposites. But what we concluded was that in the course of battle, they are -- a sort of transient state. I've often thought nations act with human qualities, like giant fractals of the people therein, and between these nation people there are relationships. In most cases these relationships are largely adversarial, rather than loving, and when we go to war, that certainly shows. In a fight between people who love each other, how often do we hear the sentiment that it is better to be happy than right -- pick your battles and don't let things get out of control. But with an adversary, we'd rather die than let the other win, and that is the sentiment that we see on the global stage. We compete militarily and economically with our adversaries, and why would we ever have the compassion to back down? It seems there's much more wisdom in forming meaningful bonds with other nations, and stop treating each other like adversaries. I know there are efforts to do exactly that, but we generally do so from a very self-interested perspective, and what was is that to form a relationship? We didn't become the dominant species by playing the game of survival of the fittest, we did so through cooperation.

I was also surprised to see this article put out by the Brookings Institute praising the ARRA efforts. I always thought Brookings was more of a conservative think tank than a respectable economic research organization, but I could be mistaken.