No Vision

One of the strange aspects of this political season is that the economy, jobs, and government deficits are afterthoughts in the national conversation. The most likely reason--aside from the pull of talking about emotional topics and celebrity personalities--is that the candidates and their experts don't really know what to do. The usual tools, i.e., government spending, tax cuts, low interest rates, haven't worked. Like peace in the Middle East, economic growth has proved elusive no matter who's been in charge.

Some say that this is a return to the old normal. The long post-World War II boom was super-normal, the result of a special confluence of factors: [bold added]

The workforce everywhere became vastly more educated. As millions of laborers shifted from tending sheep and hoeing potatoes to working in factories and construction sites, they could create far more economic value. New motorways boosted productivity in the transportation sector by letting truck drivers cover longer distances with larger vehicles. Faster ground transportation made it practical, in turn, for farms and factories to expand to sell not just locally but regionally or nationally, abandoning craft methods in favor of machinery that could produce more goods at lower cost. Six rounds of tariff reductions brought a massive increase in cross-border trade, putting even stronger competitive pressure on manufacturers to become more efficient.

The initial wave of technology adoption created jobs, but now technology is inexorably grinding them away.

What some economists now call “secular stagnation” might better be termed “ordinary performance.”

The advent of genius machines will render unnecessary the skills of two-thirds of the workforce. In other words, Average is Over:

America is dividing itself in two. At the top will be 10% to 15% of high achievers, the "Tiger Mother" kids if you like, whose self-motivation and mastery of technology will allow them to roar away into the future. Then there will be everyone else, slouching into an underfunded future of lower economic expectations, shantytowns and an endless diet of beans.

For the record, your humble blogger does not subscribe to this bleak vision. Seemingly under our noses a new space age is dawning.

Humanity may currently be viewed as superfluous, redundant, and inferior (to intelligent machines), but as they migrate to the stars 7-10 billion human beings are each unique, irreplaceable, and valuable in an infinite universe. Cheers!