Why Does The Recovery Continue To Suck?

No, AP, it’s not the technology, stupid:

Technological innovation has always eliminated jobs, a fact for which we should be thankful: our ancestors were brick-makers, arrow fletchers and animal skinners. It has also created wealth, and that wealth has been invested in new ventures, using new technologies, that have created new jobs. This has been true for thousands of years. So what has seemingly changed so suddenly? It seems obvious that in the U.S., the game-changer is metastasizing government spending, much of it wasteful, combined with trillions of dollars in government borrowing and oppressive regulation, which together have suppressed the wealth creation and investment that normally would have created millions of new jobs, along with trillions in new economic output.

In other words, the current recovery is uniquely awful because we have never before had such a left-wing federal government.

Or as large a one.

30 thoughts on “Why Does The Recovery Continue To Suck?”

  1. It is certainly true that technology, if not hamstrung by gov’t rules and regulations, will almost always create wealth, which generally leads to new jobs. The people displaced by technology won’t necessarily get those new jobs though, at least without learning substantial new skills. For example, when I went to work as an engineer in the mid-’80s, I would write technical papers out by longhand and hand them to a secretary (they weren’t called administrative assistants yet) to type it on the word processor and print it on the daisy-wheel printer. After about three years, we started getting laser printers attached to the VAX, and somebody installed TeX as well – and I never again used a secretary to type a paper for me. Later, the technology for me to arrange my own travel and do my own expense reports came along, then email, then electronic calendars so that I can schedule my own meetings. For the last 20+ years, it has been expected that engineers will write their own documents and create their own presentation slides and all those other administrative things, and the number of secretaries has gone from perhaps 1 for every 40-50 engineers to 1 for every 200-400 engineers. At other companies, it was even worse: engineers had to write their computer programs on a coding sheet, which was then turned into punched cards by unionized employees who were the only ones allowed to touch the card punches; obviously all of that went a way too. What jobs do those displaced secretaries and card punchers get in the new order?

    Unfortunately, that’s where the AP and the Democratic Party and the unions stop, and they demand that since some people are being hurt in the short term, all people must be hurt in the long term. You can’t and mustn’t stop technological progress, because eventually a rising tide does indeed lift all boats. But the average amount of brainpower required for a job keeps rising along with that tide, and I confess I don’t have an answer for what to do with those who can’t keep up. Not to say there’s not an answer, but just saying that everybody is capable of doing the new jobs is not an answer unless you live in Lake Wobegone.

  2. Obviously it’s Bush. He casts a very long shadow.

    I mean, when have massive increases in regulation and government spending, out of control federal deficits, insane fiscal policy, and a dysfunctional federal government (which hasn’t passed a proper budget in the last 4 years, and likely won’t in the next 2 years either) ever had a negative effect on the economy? I don’t even have to consult the facts to know that the answer is probably never.

  3. On instapundit there’s a link to the slow progress with “Driverless Cars”.

    I don’t see why anyone is shocked. We have quite skilled autopilots for planes – and yet have (rightly, imnsho) pilots. Yet for the -far- easier job of driving trains, we also still have drivers. Not just the freight, but think of the light-rail, subways and elevateds.

    Now think driverless cars.
    No. Think driverless buses, automated garage trucks (Seattle’s have an articulated arm to grab and dump the cans), automated taxies. Automated semis are more trouble, but there are a couple routes (I-80) where there is -nothing- going on but flat, straight driving.

    Now, let’s see. Union, union, union, union, union, non-union stake-worthy heretics, union, union, not-always-union but “D” affiliated, and super-union.

    It will take a long time to adopt. Even for the completely obvious jobs.

    1. New technology jobs not being created isn’t the only problem. My younger son was a professional blaster for a few years after he got out of the USMC. When the housing and construction market died, so did his job.

      Construction is still dead. We know many folks still out of jobs or who gave up and started new careers by going back to school or starting businesses outside construction. But one thing they haven’t recreated was the level of INCOME they once had. And I think that’s one thing that keeps getting missed.

      If a worker was making $75K or $80K 5 or 6 years ago, and they’re making 450K now, it’s not the same is it? Yes they’re working, yes they may be feeding their family. But they’re down in their ability to enter the market place by almost half. That loss cascades through the rest of the economy and affects every other person in the jobs market.

      And it obviously going to affect the tax levels collected. How many people are in that kind of situation now?
      I am not a union driver in MY cars. However, I do not ever see me trusting my car to an auto driver. What you say about autopilots in planes is true. however, every plane flying STILL has a pilot aboard, any commercial flights have co-pilots s well.

      I trust my computers. But they do crash or lock up occasionally, and that happens very infrequently. But when my laptop stops it’s not running 65 down I-40 or flying at 12K feet about a heavily populated area.

      1. D.S.,

        First a nit: “every plane flying STILL has a pilot aboard” is NOT correct; drones are pilotless, and some of them need very little supervision indeed. For example, a Global Hawk or Fire Scout are fully capable of conducting an entire mission with about 3 mouse clicks apiece.

        Driverless cars are a much bigger engineering problem though. For a UAV, if you’re 50 ft to the left of where you’re supposed to be, no big deal except perhaps on a taxiway. In a car, 50 ft to the left and you’re driving the wrong way in the wrong lane. Much bigger deal.

        That being said, I think in the next 15 years that many limited-access highways will go driverless only because it allows a huge increase in traffic density if you have a little bit of information sharing between the vehicles. For example, you can drive nearly bumper-to-bumper at 80mph if the car-to-car reaction time in in the few tens of milliseconds.

        1. You mean they don’t now? Drive bumper to bumper at 80 MPH? My friend, try driving on I-83 from southern PA to Baltimore every weekday even at 5:30 AM. We had some icy roads last Thursday morning, and that didn’t stop most of the drivers from being bumper to bumper all the way to my exit, just north of the Baltimore beltway. Me? I had my flashers on from the time I got on the road and stayed in the right lane all the way down, keeping it between 40 and 50.

      2. Also, on the computer question: The state-of-the-art in multichannel redundant safety-critical computers is very, very good in the aerospace industry (excluding Airbus, who have troubling spots in their architectures); assuming that the auto industry adopts the same kind of H/W and S/W architectures, the worst that will happen is that once every 5 years or so you’ll have to drop out of automatic mode (and lose the privileges that entails) until you get the problem fixed.

      3. Personal computers of all sorts cover a very wide array of hardware configurations, software versions and configurations. Nor is it all designed with “controlling a lethal weapon” in mind – and thus they aren’t aimed at “Zero Blue Screens of Death -evar-” as a goal. But… we do have experience doing exactly that in a variety of fashions. My understanding is that pilots are pretty darn happy with the autopilots in the latest generations of planes. To the point that they’re really there for emergencies – and I’m still in favor of them being there.

        But, for planes in particular, the “autopilot” is only really the tip of an hierarchy of embedded computers. Which are just as crucial. I’m positive there have been failures, but I honestly can’t recall one where the crash wasn’t mechanical, power, maintenance, or attributable to the pilot. If I recall correctly, the shuttle has had a couple instances where one of the main computers needed to be rebooted – but it all ‘worked’ fine as it was intentionally designed redundantly. (Here there has to be someone with details.)

        For my -personal- vehicle I really expect we’ll end up with more of an “Captain/Helmsman” sort of relationship. Where I -can- control the car, but mostly its a matter of deciding where to go and letting it deal with the mechanics of avoiding collisions, etc.

        Little of that applies to, say, garbage trucks. They’re slow, they don’t follow the regular rules of the road anyway, they often have flashy lights, and the “tricky bits” all happen at “dead slow/stopped”.

        1. Adding: Pilots of commercial aircraft. I did indeed forget drones. Though IIRC one of the drones that crashed in Iran is suspected to be a computer error.

        2. “I’m positive there have been failures, but I honestly can’t recall one where the crash wasn’t mechanical, power, maintenance, or attributable to the pilot.”

          That’s because when the autopilot fails — like on AF447 — it dumps the problem onto the pilot, who flies the plane into the sea. Then the crash is blamed on pilot error.

          One of the most common claims from ‘driverless car’ fans is ‘oh, don’t worry, there’ll still be a human driver in the car in case the autodriver can’t handle it’. I look forward to the day when the autodriver finds a situation it can’t handle and suddenly tells the driver to take over when they’re in the middle of watching a TV show and talking to the kids in the back. By the time they’ve even realised there’s a problem and grabbed the steering wheel, the car will have crashed.

          None of which is to deny that autopilots have contributed greatly to improvements in aviation safety, but they have some horrible failure modes which will be even worse on a road where you typically have seconds (or less) to react to a problem rather than minutes.

          1. That doesn’t, however, tell me how -often- it happens.

            Additionally, the “oh shit!” mode for a car is trivial 90+% of the time (apply the brakes robustly while maintaining your lane) compared to a plane. In fact, an autopilot that did -nothing- to steer the car but only applied the brake based on radar from the obstacles dead ahead would make rush hour almost bearable.

            I, for one, don’t expect the driver to be useful to “take over” in the middle of an emergency slide (or whatever). But the driver -is- there for “Ok, so everyone successfully braked for the couch in the center lane, now I have to weave around it.” Or the “Ok, the autopilot is refusing to attempt to drive on the ice, now what?” Or, my favorite actual experience: “Ok, mama bison has crossed the road, baby hasn’t, and mama looks like she’s going to charge the car.”

          2. AF447 was pilot error, pure and simple, no questions about it. Airbus flight control architectures and redundancy management have real problems, but it was not a contributor to that one.

            And if the requirements say “the vehicle management system shall handle all system failures without recourse to human intervention”, then that’s what the designers do.

          3. “AF447 was pilot error, pure and simple”

            You just demonstrate my point.

            They were flying in a storm where the computer lost airspeed measurements and dumped the problem in the pilot’s lap. The pilot, who had probably not touched the controls since takeoff, suddenly had to deal with a problem so complex that a computer designed for the job couldn’t deal with it.

            First he got into a stall, because he knew the plane would never let him stall… except the mode it had switched into disabled much of that protection. Then when he thought perhaps he had stalled he pushed the nose down… and the stall warning came on because it’s disabled at high angles of attack. So he pulled the stick back again and remained stalled.

            Yes, in an ideal world he should have known all the different modes the computer could switch to, and he should have known that the stall warning is turned off at high angles of attack. But in this world he was faced with systems behaving in ways he had never seen before, that made no logical sense — ‘but how can it stall when I push the nose down?’ — and expected to work out what was going on and solve in a couple of minutes before they crashed.

            And that, of course, is ‘pilot error’.

          4. OK, I am being snarky, but related to the thread where some sanguine opinions were expressed about Electronic Medical Records, the Air France accident was “merely a matter of the user interface.”

            That was my point on the medical records. User interfaces are hard. Computer geeks who think they are easy tend to believe that the difficulties encountered are on the part of the “luser.” A less-than-perfect user interface applied to a hard human factors problem can be worse than a primitive manual system.

          5. Edward, you have your facts messed up on AF447:

            “They were flying in a storm” – no, not really; there was convective activity around, but they weren’t really in it.

            “but how can it stall when I push the nose down?” – they DIDN’T push the nose down; they pulled back on the stick!!! They were descending at 10,000 ft/min, no airspeed indicated, and at least one of the pilots was pulling full aft stick. The instruments were telling him the truth.

            There’s a well-documented procedure for the situation they found themselves in: set 5 deg pitch attitude and 80% throttle. They didn’t do it. It would have saved them.

            There’s lots of stuff I despise about the Airbus flight deck SW (to the point where I won’t fly Airbus unless I have no choice), but it played little to no role in this one. Go read the damned report yourself; you obviously haven’t.

  4. Some technological revolutions displace more jobs in more wildly different directions than others. Just like it was hard to retrain a farmer to become a machinist you are not going to retrain a book seller into something else overnight. The growing pains are just greater this time. I’m a market socialist so I think the government should be helping citizens and corporations move more quickly to the new medium but this does not seem to be happening and much of the aid is instead aimed at keeping obsolete businesses afloat longer.

    The kicker is it took the recession for many of the technologies from the Internet age to start getting applied on a larger scale for the great culling of the service sector and middle management to begin.

  5. I would also like to note that the only way out of this recession will be with new products and services. Old jobs may fade away and be replaced by more productive means but someone always finds some new service or product that suddenly becomes all important to take over.

  6. Remember when Obama talked about ATMs taking the jobs of bank tellers? Why not take it to the (il)logical conclusion? A few years ago, I was on a cruise that made a brief port call in Mexico. Near the harbor, some men were working to construct a building. Instead of using a conveyor belt system to lift bricks to higher floors, a worker lowered a bucket on a rope and pulled it up manually. Obviously, they could’ve worked far faster and with fewer people had they used the conveyor, so odds are labor is very cheap there. Why not outlaw construction hardware like backhoes and bring back manual laborers like ditch diggers? Think of the jobs you could create!

  7. It sucks because employers are afraid to hire.

    Everything else is naval gazing. The pace of technology has been fast through both good and bad economies for half a century now.

  8. A Samizdata Quote of the Day (by Patrick Crozier) makes the same point, in different words:

    “The point is that recessions are not caused by a lack of demand. They are caused by people making the wrong things (i.e. destroying wealth). We know they are because enterprises make losses and sometimes go bust. Recessions end when people start making the right things. All that money printing does is keep people making the wrong things. All that state spending does is encourage people to make even wronger things.”

    1. Indeed. The US has spent billions in solar energy, which is technology but nobody wants it because other forms of energy are abundant. We spent billions trying to curtail the other forms of energy despite the demand. We’re spending billions on food stamps to feed the hungry, while we subsidize ethanol to encourage farmers to use their stock for powering machines rather than feeding the hungry. Hospitals are now spending billions to increase their customer satisfaction, which to them means making a hospital more like a hotel than actually curing people; while we put regulations against prescription drugs that actually keep most people out of the hospital and healthy.

      But with all this, the most ironic is the billions spent to encourage people to enter STEM fields, when those same fields are being ostracized by articles like the AP’s.

  9. Obama’s friends at the now too-big-to-fail banks have raised the unsecured small business line of credit rate from 5% and change to 8% and change.

    They have decided it’s easier to make the bucks by getting free funds from the Fed at night and loaning it to the Treasury in the morning.

    Maybe higher taxes, higher energy costs, higher entitlement costs and more regulatory costs will help businesses grow.

  10. RS – Got it in one. I can’t speak for the USA but one particular bank (RBS) has had something like £70 billion of fiat money pushed into it to prop it up, in addition to the something like £100 billion pumped into the system via QE. Lloyds TSB has had tens of billions also, and the bank that started the rot over here (Northern Rock) has had something like £20 billion.

    Despite the fact that the UK government has a majority shareholding in RBS and Lloyds TSB for several years, still they (and all the other banks) refuse to perform their primary function, which is lending for investment.

    I have a few questions about all this. First, why does UK Gov not use its majority share in two of the big four banks to force lending and stop them simply shuffling money around? (“Start lending or you’re fired!”) Why, despite several years of evidence that QE by giving money to the banks doesn’t work because they simply keep it, does this policy continue? And last of all, why are those bankers responsible not in jail – or buried in a prison yard, having been hanged for treason?

    I may be rather simplistic about this; but IMHO the next tranche of QE should be replaced by simply handing out money – to adult registered voter citizens only. It would, of course, end up in the banks anyway, but at least it would do some good along the way. And also IMHO, instead of 4 big banks we should have perhaps 50 – the change to be managed in a compulsory manner.

    And last but not least, the top 2 or 3 layers of management in all the banks with main offices in the UK should be fired, blackballed and prevented from EVER AGAIN handling anyone else’s money in any way and for any reason.

  11. Fletcher,

    I’m not sure I agree with the forced lending, as I think some it is what got the US in its predicament. Certainly RS is right though about the “big to fail” squelching by gouging. Still this: “why are those bankers responsible not in jail?”; I wish I knew.

  12. Leland, I might have said “force lending for business investment”. That’s what is lacking in the UK right now; a loan that would have been fairly easy to get for such purposes in 2007 is impossible now.

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