The greatest economic transformation in US history as they slide into a veiled aristocratic system

One person writes that the US is undergoing the greatest economic transformation in their history (and that must impact on the world economy), and another writes that chronic disempowerment represents a threat to their democracy.

Andrew Yang: We’re undergoing the greatest economic transformation in our history

For Americans who are still trying to figure out why Trump is President, the answer is simple — we automated away millions of manufacturing jobs in the Midwest, and Trump spoke directly to the fear and anger of those voters. He promised them that he would restore those jobs — a promise on which he has notably failed to deliver.

Here’s the reality, though: The financial crisis of 2008 brought our 14 million manufacturing jobs (itself a low plateau from the 17 million in 2000) down to 11.4 million, and 10 years of expansion has only brought us back up to 12.8 million.

But what happened to manufacturing workers will soon happen to retail workers, call center workers, fast food workers, truck drivers and others, as the next Industrial Revolution takes hold of our economy.

Bain, a leading consulting firm, projects automation will disrupt jobs at about three times the rate of the Second Industrial Revolution, which sparked thousands of strikes and mass riots at the turn of the 20th century.

If you doubt that this is already happening, consider that America’s labor participation rate (the ratio of people who are working compared to the total population aged 16 and over) today has fallen to 63%, about the same level as Ecuador and Costa Rica.

For the US labor participation peaked around the turn of the millennium at just over 67% and largely declined through to 2013 and has been fluctuated mostly below 63% since then, so it isn’t a recent fall. See Civilian labor force participation rate

New Zealand’s recent trend in labour force participation rate is different, rising from 68.8% in January 2016 to level off at about 70.8-71% in mid 2017.

In the US, almost one out of five prime, working age men have not worked in the past year, and our life expectancy has declined for the past three years, in part due to surges in drug overdoses and suicides.

This is before a projected 33% of American malls and retail stores may be forced to shutter their doors, and it might not be long before truck drivers are replaced with self-driving trucks.

Malls and retail stores are being impacted by online sales.

But here’s the reality: We are undergoing the greatest economic transformation in our history, and we are dealing with it by pretending nothing is happening.

We need to wake up to the fact that it is not immigrants who are causing economic dislocations. It is technology and an evolving economy that is pushing more and more Americans to the sidelines.

Further, according to Marianne Williamson, it is pushing many people under – America is becoming an aristocracy

And many of the richest financial aristocrats are tech company owners.

While I have spent my career empowering people and turning them into leaders, Washington has been disempowering people and turning them into followers. The stress and anxiety that has become so endemic in American society, due to chronic economic and social despair, has fostered a population disconnected from civic engagement. Today, this chronic disempowerment represents a threat to our democracy.

Relatively few Americans have abused their rights at the expense of the many, turning the US government into their own personal playground. From tax cuts that benefit only the wealthiest among us, to corporate subsidies that aid industries (oil, big pharma, agribusiness, etc.) already profiting to the tune of billions, money has been sliding for decades away from expenditures that support the public good to expenditures that support the lucky few.

Though American politicians continues to say we are a democracy, we are sliding ever more dangerously into a veiled aristocratic system. The mindset of the new aristocracy has not only imbued our politics — it has hijacked America’s value system, leading us to swerve from our democratic and deep human values. We have forgotten that public morality even matters.

We need to remind ourselves that economic injustice is a moral transgression. Neglecting the medical, educational and social needs of millions of people so that a few can swell their bank accounts is a moral transgression. And until we bring our political policies back into alignment with our moral core, then nothing will fundamentally heal this country.

Politics in the US has been dominated by huge amounts of money and rich lobbyists for a long time, but the democratic process has is now under serious threat from the use of technology to manipulate elections and opinion, with serious efforts being made to divide and conquer.

Financial favouritism has helped the rich get richer, but that has been at the expense of millions of Americans suffering from inferior education, health services and living conditions.

If the third (and claimed to be the greatest) industrial revolution reduces employment opportunities and levels further, and more drastically, then the divide will get worse.

There is no sign of political leadership or will to address this.

Our situation in New Zealand is on a much smaller scale, but we are also vulnerable. We also have political leadership that is talking as if they understand at least some of the problems of financial inequity, but they haven’t yet done much to address it. There is a lot of interest on what will be delivered in next month’s ‘well-being’ focussed budget.

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19 Comments

  1. David

     /  15th April 2019

    The US democratic system is way passed its use by date with just way to much of it, no where is this better illustrated than immigration where basically the 2 parties agree a strong border and comprehensive reform is needed but its a wedge issue both parties raise money and votes from. The President proposes something, Congress wont do it, Congress do something the Senate rejects it, the Administration makes a change and the states take him to court in the 9th circuit finding a politically appointed judge to hold up proceedings.
    The constitution was written to have equal branch,s of government which is now ensuring nothing gets done. Thats even before the individual states and all their self governing have a crack.

    Reply
    • Kitty Catkin

       /  15th April 2019

      I can’t see how the US is developing an aristocracy; aristocrats are not created thus.

      Having a lot of money doesn’t make someone an aristocrat. Aristocrats can be impoverished and still be aristocrats.

      Reply
    • Pink David

       /  15th April 2019

      “The constitution was written to have equal branch,s of government which is now ensuring nothing gets done. Thats even before the individual states and all their self governing have a crack.”

      That is it working as intended.

      Reply
  2. Gerrit

     /  15th April 2019

    The great balance for automation is the markets ability to pay for the goods and services presented from it.

    if people cannot afford the goods and services, no amount of automation will make commercial sense to make said goods and services for a wide enough customer base (specifically commercial income, the top line on the chart of accounts) to warrant investment.

    So what we have is not an industrial revolution as such (that has already happened, just not fully implemented as yet) but a wealth distribution one where a large enough customer base has to have enough income to buy the goods and services from automated processes.

    How to do this without a physical revolution is more of a concern to the aristocracy. Keeping control whilst distributing just enough to keep the wheels churning and the aristocracy from being overthrown.

    Quite how Labour will do this without the State becoming the new aristocracy and actually giving the great unwashed more democratic power / income, is to be seen.

    For the worst result will be replacing one aristocracy with another.

    Reply
    • Kitty Catkin

       /  15th April 2019

      That is not ‘aristocracy’.

      Reply
      • Kitty Catkin

         /  15th April 2019

        I buy things online, it’s worth paying $5 to have them delivered. I am not willing to go in and buy them, cart them home on a bus and then in a taxi when I can have them brought to the door. I eat a lot of beans and chickpeas and buy them in large quantities from The Warehouse. It’s the same with other bulky things like large packets of loo paper. I do a large order of household things at a time.

        It may be the case that this means fewer shop workers, but someone has to pack the boxes and send them out, It would be interesting to know if the number of warehouse workers is equal to the Warehouse workers who are no longer needed in shops.

        Reply
      • Gerrit

         /  15th April 2019

        Words evolve, you have hereditary aristocracy, such as a monarchy. but also moneyed aristocracy such as the Rockefeller’s, etc.

        Reply
        • Kitty Catkin

           /  15th April 2019

          That is not aristocracy; it’s family money.

          Reply
        • Kitty Catkin

           /  15th April 2019

          People can’t buy their way into the aristocracy or millionaires would be aristocrats. The word hasn’t evolved, it still means being part of an elite or upper classes. Money can’t buy that. Look it up.

          Reply
          • Gerrit

             /  15th April 2019

            Call them the ruling classes then, if it fits your pedantic argument.

            Contrary for the sake of?

            Reply
            • Kitty Catkin

               /  16th April 2019

              It is not pedantic to say that a word is being used to mean something that it does not mean.

              If you want to think that being rich makes someone an aristocrat, nothing I say will make you realise that it doesn’t.

  3. David

     /  15th April 2019

    Yang makes some good points but mass immigration undermines jobs and incomes which is why Ardern wanted it curbed here, its a simple supply and demand calculation.
    When you go to California there are always 3 people doing the job one would do here because there is an endless supply of cheap illegal labour. You have a state where there is a massive wealth gap with cheap labour looking after the extremely wealthy and the middle class moving to other states.

    Reply
    • Duker

       /  15th April 2019

      The cheap migrant labour would have been once only in California and other border states like Texas but in the last decade has spread through the Midwest and plains states as well as the booming places like georgia , Carolinas, Virginia. Thats party why Trumps close the wall message works for him their . But of course the Democrats message reaches more votes as the recent elections showed.

      Reply
  4. Alan Wilkinson

     /  15th April 2019

    The Government has to look seriously at how it creates and maintains the monopolies that produce extreme wealth. These include Government contracts, regulations and IP.

    The nonsense promoted yesterday by Ardern and Co. re building reform is exactly the wrong way to solve the problem. Automation is a huge benefit, but distributing that benefit equably is a challenge our communities have to solve.

    Reply
    • Alan Wilkinson

       /  15th April 2019

      More Lefty Government centralisation nonsense. Every step it takes gives more power to the big guys and leaves the little ones out in the cold. Exactly the opposite of what is needed in the face of automation:
      https://www.yudu.co.nz/news/disaster-engineering-boss-slams-proposed-training-changes/45626/

      Reply
      • Duker

         /  15th April 2019

        What do you mean ‘leaves little guys out’
        Who do you think is hurt the most when larger companies collapse- the subbies.
        Even Fletcher Construction relies on a whole raft of subcontractors: from people who tie the steel to lift contractors, plumbing , electrical to the window/facade companies.
        To do a $500 mill project you have to be big financially. Its the way its works . But AW doesnt know what hes talking about , but thinks he does because hes done some old house flips

        Reply
        • Alan Wilkinson

           /  15th April 2019

          Sure, if your idea of heaven is a Fletchers’ state housing or apartment complex, Duker, but it isn’t most folks’. Protecting sub-contractors in collapses is worthwhile but isn’t going to fix the real problems. Freeing up competition and markets is the only way to solve them and to ensure the benefits of automation are not captured by the big companies and investors but the loony Left will never do that.

          Reply
        • Pink David

           /  15th April 2019

          “Even Fletcher Construction relies on a whole raft of subcontractors: from people who tie the steel to lift contractors, plumbing , electrical to the window/facade companies.”

          How many of these subcontractors are represented in the Construction Accord?

          Reply
  5. harryk

     /  15th April 2019

    ‘a veiled aristocratic system’

    Rather than Aristocracy, could Oligarchy be the word you’re searching for?

    Reply

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