David L. Martin

in praise of science and technology

Archive for the month “March, 2017”

So much for the great negotiator

Mr. GTP, February 2016:

“Obamacare is going to be repealed and replaced. We’re going to have a strong country again and Obamacare has to go. We can’t afford it, it’s no good. You’re going to end up with great health care for a fraction of the price and that’s gonna take place immediately after we go in. Okay? Immediately. Fast. Quick.”

Mr. GTP, March 2017:

“I never said—I guess I’m here, what, 64 days—I never said ‘repeal and replace Obamacare’—you’ve all heard my speeches—I never said ‘repeal it and replace it within 64 days.’ I have a long time.”

Can billions of people actually have a first-world standard of living?

At present, there are about 7.5 billion living human beings on earth.  This number is expected to rise and reach almost 10 billion by mid century.  What is often overlooked is that much of the world’s population resides in just 2 countries – China and India.  More than 1 out of 3 people on earth live in one of these 2 countries.

Both of these countries have been developing rapidly, so much so that they are considered formidable competitors with America in global markets.  But this fact conceals another important fact – even as they have become economic powerhouses, wealth inequality within these countries has grown, just as it has in America.

incomeinequalityemerging

Currently, the income inequality in China, as measured by its Gini coefficient, is 42.2.  This is comparable to that of the United States at 41.1.  India’s is better at 35.1.  But all 3 values have been increasing since 1980.

The fact is, even poor Americans tend to be wealthy by the standards of history.  We have safety net programs, and while many would argue that they are far from perfect, I doubt anyone would argue that we don’t have the RESOURCES to provide every American with the basics of food, clothing, shelter, health care, and so on.

Now America’s population is a mere 320 million, only 4% of the world’s total.  This means that in order to give everyone in the world our “basics,” we would have to have 23 times as much food, clothing, shelter, and so on as we “consume” in America.  Doesn’t sound very feasible.

But the problem is that the American pattern of consumption is very atypical, even for the first world.  The United Kingdom, for example, is very much a first world country.  The median household income is more than $30,000/year.  Yet the average U.K. resident consumes half as much energy as the average American.  That doesn’t make them hungrier, shorten their life span, or make them colder in the winter.  In fact, average life expectancy is actually higher than in America (which is true for many European countries), because of lower obesity rates and better health care systems.

Let’s examine something very basic – energy.  About a quarter of the world’s energy consumption takes place in America.  But this is largely because of transportation.  All of the private cars on the road consume lots of energy.  We could do just fine without millions of cars on the road, many of them carrying only one person at a given time.  In fact, we would probably do better with public transportation systems, because they would force us to do more walking, which would be good for our health.

The fact is, economic growth does not necessarily translate into greater energy consumption.  Since 1975, the U.S. GDP per capita has grown more than 80%.  Yet the country’s per capita energy consumption has actually DECLINED:

energyconsumptionamerica

It has been estimated that in order for all of the people on earth to have America’s consumption of resources, 4 earths would be required.  But in a way, this misses the point.  The issue is not whether we can bring everyone up to the American standard of CONSUMPTION.  It is whether the world can have the first world STANDARD OF LIVING.

The median household income in Germany is about 2/3 of what it is in America.  Yet Germany is ranked 24th in the world in life expectancy.  America is ranked 31st.  Germany is ranked 6th in the world on the Human Development Index.  America is ranked 8th.  The per capita energy consumption in America is 6900 kg of oil equivalent per year.  Germany? 3900.  Switzerland (a very wealthy country) – 3300.  The U.K. – 3000.  Spain – 2500.

There are 740 million people in Europe, about 10% of the world’s population.  Generally, they enjoy a first world standard of living.  So the issue is not whether we can generate 23 times the American level of consumption, but 10 times the European level.  Still quite a challenge, but considerably more manageable.

Europe and China are moving away from fossil fuels, and the rest of the world will no doubt follow suit.  It is becoming increasingly clear that renewables can provide enough power for basic human needs.  Some countries (Iceland for example) already produce 100% of their electrical power with renewables.

Of course energy is only one issue, but this illustrates that the problem is perhaps not as insurmountable as it might seem.  Population control is absolutely necessary, as are other revolutionary changes.  But even if everyone can’t come up to the European standard of living, they might at least reach a third or half of that.

At present, the global GDP per capita is about $16,000.  That’s half of the per capita GDP of countries like Spain and Israel.  This illustrates that there is already, today, enough wealth generation to bring everyone up to a pretty decent standard of living.  The problem is that the poorer a country is, the worse wealth inequality tends to be:

incomeinquealityversuspercapitagdpmine   The green and yellow dots are European countries.  The red dot is America.  Third world countries tend to have high inequality.  Nigeria, for example, is a very oil-rich country – in fact it is the world’s 15th largest oil producer, only slightly behind Norway, which has one of the world’s highest per capita GDP’s.  Nigeria’s annual GDP is close to 500 billion dollars.  Yet the median household income in Nigeria is less than $3000/year.  A few people are collecting the lion’s share of the country’s wealth.  The country doesn’t have a vibrant middle class.

It is worth noting that among countries, wealth inequality has actually been decreasing since the turn of the century:

worldinequality

If this trend continues, within 30 years global inequality will be back down to where it was in 1980.  But the trend WITHIN countries is often in the opposite direction.  Countries like India and China are building toward a first-world standard of living, but many of their people are getting left behind in the process.

The bottom line is that a decent, if not a first-world, standard of living for everyone seems quite feasible, provided we get a handle on the global population and institute policies that build a vibrant middle class throughout the world.  Diseases that were long ago conquered in the first world, like malaria and cholera, still run rampant in parts of the third world.  That’s absurd.  We have the technology.  We have the resources.  We just need to let go of old ways of thinking.

How to stay sane in the crazy house

Previously, I have discussed the “elephant in the room” – the vastly underreported role of gender in the recent presidential election.  As time goes on this becomes even more apparent.  The importance of the macho caricature of masculinity can hardly be overstated in our politics.

Some point to the fact that a large percentage of white American women voted for Mr. GTP.  I guess this is supposed to prove that gender is not really very important.  Has anyone asked these women what their ideal man looks like?

Recently, a quite amusing boo-boo occurred in Mr. GTP’s White House, in which a link to a satirical article was included in an official email under “news.”  Presumably the staff member who included it didn’t bother to read it.  The author’s name is Alexandra Petri.  And the title of the article is “Trump’s budget makes perfect sense and will fix America, and I will tell you why.”

Petri is a good writer with a sharp wit, and more importantly, a good feel for what motivates our new president and his supporters.  Here are the first 2 paragraphs from her article:

Some people are complaining that the budget proffered by the Trump administration, despite its wonderful macho-sounding name, is too vague and makes all sorts of cuts to needed programs in favor of increasing military spending by leaps and bounds. These people are wimps. Office of Management and Budget Director Mick Mulvaney has called it a “hard power budget” which is, I think, the name of an exercise program where you eat only what you can catch, pump up your guns and then punch the impoverished in the face. This, conveniently, is also what the budget does.

This budget will make America a lean, mean fighting machine with bulging, rippling muscles and not an ounce of fat. America has been weak and soft for too long. BUT HOW WILL I SURVIVE ON THIS BUDGET? you may be wondering. I AM A HUMAN CHILD, NOT A COSTLY FIGHTER JET. You may not survive, but that is because you are SOFT and WEAK, something this budget is designed to eliminate.

And here are just one of her examples of the proposed cuts, for your edification:

The State Department, by 29 percent: Right now, all the State Department’s many qualified employees do is sit around being sad that they are never consulted about anything. This is, frankly, depressing, and it is best to put them out of their misery. Besides, they are only trained in Soft Diplomacy, like a woman would do, and NOBODY wants that. Only HARD POWER now that we have a man in charge who thought the name Rex Tillerson was not manly enough and rechristened himself Wayne Tracker. With the money we will save on these sad public servants, we will be able to buy lots of GUNS and F-35s and other cool things that go BOOM and POW and PEW PEW PEW.

Humor, of course, helps us deal with things that might otherwise drive us insane.  Seeing a clueless howdy-doody in the White House certainly qualifies.  Some comedians are complaining that Mr. GTP has made it almost impossible to engage in meaningful satire.  How can you satirize someone who is a satire of himself?

I have noticed a growing tendency in the media, as the White House continues to make statements completely divorced from reality, to take Mr.GTP’s statements, especially his tweets, less and less seriously.  The media is not used to NOT taking the President of the United States seriously.  But they are finding that they have little choice.

“Obama had me wiretapped.”

“What is your evidence?”

“Huh?”

“What is your evidence that the former President of the United States committed a felony and had you wiretapped?”

“Oh, I didn’t say he did.  I was just repeating what I heard someone else say.”

How much of this kind of utter, total and complete crap could anyone deal with, day after day, week after week, before turning to another channel?

Suppose I said to you, “the president said today that he wants to have sex with little boys.”  Then you replied, “The president actually said that he wants to have sex with little boys?”  Then I said, “No, he never said that.”  “You just said he did.”  “Yep, he did.  And he was right to say it.”  “WHAT????  You just said he said it.  Then you said he didn’t.  Then you said he did and he was right to say it.  Which is it?”  “Oh, I was just quoting something I read today.”

This is the kind of conversation that will make your head explode if you try to stay in it for long.  I think Petri has the right idea.  Stop taking him seriously.  Pay attention to his actions, not his words.  And stop ignoring the elephant in the room.

https://www.washingtonpost.com/blogs/compost/wp/2017/03/16/trumps-budget-makes-perfect-sense-and-will-fix-america-and-i-will-tell-you-why/?utm_term=.a591e6df3379The Elephant in the Room

The “Fact Crisis”

A recent article in the Chicago Tribune makes reference to what the author calls the “fact crisis” in America.  Many things are a matter of opinion.  Many things are not.  What is striking is that many “opinion” polls contain survey questions that are matters of fact, not opinion.  The results are often staggering.

Recently, a polling organization called PPP surveyed 1224 registered voters.  One of the questions was about how the unemployment rate had changed during Obama’s time in office.  This is not an opinion question.  It is a question about a well-documented fact.  The unemployment rate declined 38% during the Obama years.  Yet 41 PERCENT of those surveyed responded that it had increased, and 64 PERCENT of Republicans said that it had increased.  Another question concerned the stock market.  How had the Dow Jones Industrial Average changed during the Obama years?  Again, a question about well-documented facts, not an opinion question.  The DJIA in fact more than doubled during the Obama years.  Yet 23 PERCENT of respondents said it had gone down, including 40 PERCENT of Republicans.

Another recent poll, an Economist/YouGov survey of 1376 American adults, contained a question about health insurance.  Has the number of people without insurance increased or decreased under Obama?  It’s a simple question with a simple, factual answer.  Not a matter of opinion.  Answer:  The percentage of uninsured Americans is historically low after Obamacare.  In 2008, 14.6% of Americans were uninsured.  That number is now below 9%.  Yet 31 PERCENT of respondents said it had increased, including 40 PERCENT of Republicans.

Some people have made the argument that in polls like this, people often answer not based on their knowledge of an issue, but simply to “push” the poll in a direction unfavorable to a person or party they don’t like.  And this, they say, is why Republicans tend to answer poll questions in ways that make Democrats, and Obama in particular, look bad.  But I don’t buy it.  Because even 1 out of 4 DEMOCRATS responded that unemployment had increased under Obama.  1 out of 4 DEMOCRATS responded that the number of uninsured people had increased under Obamacare.  This tells me that huge numbers of Americans are simply uninformed on key issues.

On topic after topic, large percentages of Americans show themselves to have the facts wrong.  Now if these were students taking tests, and such percentages of them were flunking, we would say our school system is in crisis.  If 30 or 40 percent of all students entering high school didn’t graduate, we would do something about it.  But the appalling ignorance of the American voter elicits no such crisis atmosphere.  Of course, the argument could be made that this ignorance is nothing new.  In the late 19th century, a huge percentage of the American population didn’t even go to school.  Large numbers of people couldn’t even read or write.

But in a way, that’s just the point.  The ignorance of Americans, with its accompanying powerless, in the face of an industrialized economy and an explosion of technology, is exactly what gave rise to the progressive movements of the late 19th century, including the expansion of compulsory education.  In many parts of America, there WAS no significant middle class before this time.  There were working people on the one hand, and business people on the other.  Working people didn’t have disposable income.  People worked 14-hour days to barely keep a roof over their heads.  Most Americans didn’t have access to electricity or refrigeration.    The American middle class was created by people who found ignorance and powerlessness unacceptable.  The stage was set for America to become the leader of the free world.

Today we are facing the replacement of the industrialized economy with the information economy.  Automation will accelerate and there will be no place for the poorly educated in our workforce.  The middle class is increasingly squeezed.  Our media system has failed in its job.  This situation cannot continue, and it won’t.

You can’t have it both ways

There is a curious psychology at work amongst a large swath of the American public.  On the one hand they want to pay as little as possible for products.  The reason products cost is because human labor costs.  Cheap Wal-Mart shoes are cheap because they are made by cheap foreign labor.  Strong labor unions lead to higher wages and higher prices for goods.  This is exactly why organized labor has suffered in America.

On the other hand, many if not most of these same Americans want products to be made in America, so that Americans don’t lose their jobs to foreign workers.  But good-paying American jobs are what drive prices up!

The inherent conflict between demanding lower prices and demanding good-paying jobs is an excellent illustration of the interconnectedness of modern society.  You can’t have it both ways.  If you want good wages, you have to pay for them.  The well-being of others inevitably affects your pocketbook.

More broadly, the interconnectedness of our society means that the very notion of “made in America” is far more complex and subtle than many people realize.  Our consumer society tends to obscure the fact that virtually every product we use is generated by a global economy.  Most Americans, even in rural areas, have refrigeration, automobiles, televisions, and cell phones.  There is no such thing as a cell phone that is “made in America,” strictly speaking.  The manufacturing process takes place over the span of continents.

The same principles apply to most products that contain advanced technology – which is increasingly just about everything.  Not a single so-called American-made car or truck is 100% made in America.  Cars.com produces a well-researched “American-made” index for cars and trucks sold in America.  Their top-ranked vehicle?  The Toyota Camry.  Five of their top 8 cars are Toyotas or Hondas.  Not a single Ford vehicle even ranked high enough on their American-made index to warrant being categorized as American-made.

Americans have access to supermarkets and superstores that provide a dizzying variety of products, much of it from other countries.  America imports 13 million metric tons of fruit every year, and 10 million metric tons of vegetables.  1.3 million metric tons of cocoa and chocolate!  There was a time when Wal-Mart boldly advertised that its products were made in America (even though it was never actually true).  Not any more.  Most of the AMERICAN FLAGS sold at Wal-Mart are made overseas!

Our media have utterly failed to inform us about key economic issues facing our society – the rise of automation, the interconnectedness of our global economy, the worldwide growth of renewable energy.  Many Americans are in for a rude awakening.

Why has economic growth steadily declined for half a century?

One of the most consistent, and least-discussed trends in the world is the steady decline in economic growth.  This is true for the world, and it is true for America.  As the industrial revolution took hold, global economic growth surged.  It reached a peak in the mid 20th century:

globalgdpgrowth

Since the 1960’s, global economic growth has declined significantly:

globalgdpgrowthsince1961

In America, we have seen a similar pattern.  The only difference is that America’s economic growth peaked a bit earlier, in the 1940’s:

gdpgrowthsince1947

It is worth noting that the global population growth rate also peaked in the mid 20th century, in 1962:

globalpopgrowth

And the American population growth rate peaked a bit earlier, in 1957:

populationgrowthamerica

Population growth is expected to continue to decline.  The question is, why did economic growth peak in the mid 20th century?  The answer is not too hard to find.  The growth rate in global energy consumption also peaked in the mid 20th century.  Look at how closely global economic growth has tracked global energy consumption growth over the last 50 years:

globalddpandenergyconsumption

What characterized the mid 20th century was an explosion in the exploitation of an easily accessible, powerful energy source – oil.  Importantly, it isn’t about the ABUNDANCE of this energy.  Solar energy is incredibly abundant.  Every day, the sun bombards our planet with incredible amounts of energy.  It’s about how CHEAPLY you can harness the energy source.

From 1900 to 1970, America was the world’s foremost oil producer.  Large pools of easily accessible oil in places like Texas and Louisiana meant that this extremely energy-dense power source could be extracted cheaply, in huge quantities.  And it was.  Huge cities like Houston and Dallas owe their existence to oil.  Cheap oil drove the economy of the United States.  In 1950, the average price of a gallon of gasoline in America was 27 cents.  Suburbs exploded.  Manufacturing boomed.

Of course, it didn’t take long for the easy, cheap oil to be extracted.  Today the landscapes of southern Louisiana and southeastern Texas are scarred with the canals of abandoned oil fields.  Much of the production has moved offshore.  Needless to say, it is much more expensive to extract the oil out there.  Recently, the boom in hydraulic fracturing has led to a huge surge in American oil production.  But there’s an enormous difference between drilling for oil today and doing so in the early 20th century.

A recent NY Times article mentioned that, without automation, an oil well in West Texas today requires a price of about $60/barrel (oil is currently at only about $55/barrel).  In order for such a well to merely break even, operators have to use automation.  Of course they do.  This means fewer jobs for oil workers.  And the point is, it’s much more expensive to drill today than it was back then, whether it’s drilling offshore, using fracking, or what have you.

It doesn’t matter HOW MUCH oil is out there.  Even if we ignore the issue of global warming, we can’t get around the economics of energy.  The CHEAP oil is GONE.  That’s what drove the economy of the mid 20th century.  There is nothing on the horizon to replace that.

Of course it’s possible that some breakthrough technology will appear that will usher in a new age of cheap, powerful energy, and a new economic boom.  But until that happens, we CANNOT expect to see the sustained high growth that we saw in the mid 20th century.

Of course, the question could be asked, why do we need to?  The American unemployment rate is low.  Inflation is low.  In 2016, the global GDP per household was about $50,000.  In America, it was about $143,000.  Seems like we’re doing pretty good.  The problem is not wealth generation per se.  The problem is how it’s distributed.  Look around.  How many American households do you see that pull in 6 figures?  The median household income in America is about $57,000 – in other words, half of American households make less than this.  How many global households do you see that pull in $50,000 a year?  There are about half a billion households in China.  The average household income is about $10,000.  There are about 250 million households in India.  The median individual income is less than $700.  These 2 countries alone contain about 35% of the world’s population.  And these are 2 of the “developing” countries.

I’m not suggesting that the world be pulled up to a GDP per household of $143,000.  It doesn’t matter if I do anyway, because it’s not gonna happen.  I’m simply saying that there’s plenty of wealth generation.  Most of the physical work in the first world is done by machines and artificial power sources.  That’s where most of our so-called “worker productivity” comes from.  The only real question is how much longer the lion’s share of that productivity will continue to be funneled into the hands of a few.

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