Our President is a Luddite!!

[Guest]

President Obama said today, in all seriousness, that improving productivity is increasing unemployment. In his interview with Ann Curry on NBC he said, “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don't go to a bank teller, or you go to the airport and you're using a kiosk instead of checking in at the gate."

This shows a frightening ignorance of economics and the job creation process. The Luddite movement began in 1811 when workers in England smashed lace making machines, believing that the increased productivity would put them out of work and decrease the supply of jobs. Nothing could be further from the truth. It is easily seen in the history of the United States. In the early twentieth century 90% of the population live on the farm, providing food to the other 10%. Today, 3% of the population lives on the farm and provides food for us and large parts of the world in addition. This is progress in action.

Because of the increases in productivity, we enjoy electricity, computers, indoor toilets, planes, trains and automobiles. Virtually everything we enjoy, including being able to communicate on this site, has been made possible by increases in productivity. President Obama does not understand this. He understands the economy as a zero sum game. It isn’t and we can all be glad that it is not. Until the President understands this, his ignorance poses a very real threat to our economy. Let’s hope that he has people much brighter than him around him to keep us from a destructive economic policy.

[Guest]

Don't count on that. He has surrounded himself with yes men and people who share the same same philosophies he has. It seems he in intent on desroying this country. He must be voted out in 2012.

[Guest]

President Obama said today, in all seriousness, that improving productivity is increasing unemployment....This shows a frightening ignorance of economics and the job creation process....Guess what? The President is absolutely correct. If the country's productivity, as measured in standard economic terms (the amount of labor input to produce units of economic output), was the same now as it was 10-15 years ago, there would be no unemployment problem.

But that's not correct either. There still would be an unemployment problem, but for a different reason. If the productivity of the U.S. remained the same as it was 10-15 years ago, we'd still have unemployment because other countries with whom we compete have also achieved substantially improved productivity, in some cases even moreso than the U.S. If U.S. productivity rermained the same as is was a decade ago, we simply couldn't compete in world markets because our products and services would be much more costly than those produced elsewhere in the world. For that reason, we'd still have lots of unemployment because we'd have become non-competitive.

The President is correct. A significant part of our current unemployment has resulted from our increasing ability to produce goods and services with a substantially lower amount of labor input, with resulting unemployment. The only real way to reduce unemployment from it's current level is to increase economic activity--sales of our products and services--faster than our productivity increases.

That BBQman, is a far cry from the Ludditeism that you've accused the President of practicing.

Sometimes I'm amazed at how people take soundbites of what political opponents say, then either don't understand them or don't bother to think about them, all for the purpose of being critical. That's exactly what you did in this case.

[Guest]

That basic fact - the fact that we ARE still the most productive workforce in the industrialized world - is why we can still have a higher manufacturing output than even China (i.e. they make plastic crap, we make airplanes) while simultaneously losing jobs.

[Guest]

The American manufacturing status is a mere shadow of it's past and of what it is capable of doing or being.

Until such time as those who run the government get back to incenting US companys to bring their profits back to America and encouraging them to expand here at home the USA will continue on it's manufacturing path to ALSO RAN!!!!!

BTK

[Guest]

and a Luddite by any other name is still a Luddite.

DJ, You are absolutely right that the US is the world leader in manufacturing, something few people realize while every politician in sight is screaming about sending US jobs overseas. We can maintain and even increase our edge in manufacturing through increased productivity. Every company and government agency needs to have as its objective, “Twice the output with half the labor.”

This goal has been articulated again and again since Fredrick Taylor wrote The Principles of Scientific Management. In his opening sentence he states, “President Roosevelt (in this case Theodore), in his address to the Governors at the White House prophetically remarked that ‘The conservation of our national resources is only preliminary to the larger question of national efficiency.’”

VK, I refer you to the following clip to see if I have taken anything the President said out of context as you accused me of doing.

http://www.realclearpolitics.com/video/2011/06/14/obama_atms_contribute_to_unemployment_for_eliminat ing_tellers.html

A large part of our unemployment is caused by others providing better and more productive ways of doing things. The US producing ATMs did nothing to increase unemployment here. If we did not, then someone else would have done so and we would have lost not only the teller’s jobs, but also those associated with the production and servicing these machines. Turning your back on the truth of economics will not make that truth go away. Claiming people who claim that increased efficiency causes unemployment are anything other than Luddites is to ignore the truth.

[Guest]

There used to be a time in this nation when any man with a strong back and a good work ethic could support his family. That's what missing in this country and that's what people are really frustrated about. I don't think there's any good solution to that problem, and no matter what anyone is talking about when it comes to jobs, that's the "reality issue".

[Guest]

Richie: Yes, there was a time. Actually I can think of two times.

First when we were still primarily an agrarian nation. Farms fed the family and the surplus went to market.

Second was after WWII. The reason that someone could get paid well for putting the left door handle on a Chevy was because the entire rest of the planet had it's industrial base DESTROYED. Those "golden eras" were a bit of an insular fantasy - a moder-day "spoils of war", if you will. Gradually, as other countries built back up their industrial bases, we had to compete with them. We had to do more and do it with less, FOR less.

When you have no competition, you can charge what you want. But now that we've had to compete with the Europeans, then the Japanese, then the Koreans and now the Chinese and Indians (cumulatively over the decades) it's a lot more cutthroat out there.

[Guest]

There used to be a time in this nation when any man with a strong back and a good work ethic could support his family. That's what missing in this country and that's what people are really frustrated about. I don't think there's any good solution to that problem, and no matter what anyone is talking about when it comes to jobs, that's the "reality issue".You have that right, Richie. I think I mentioned that I had some work done here at my house in The Villages recently. The entire crew was Mexican--none spoke even one word of English. The amount of work they accomplished in two days was simply amazing...and of very high quality. They worked from the time they arrived until the time they left. I didn't see them take a coffee break or stop for lunch. I was told later that their employer's business is so good that the crew has been working seven days a week for a couple months.

As I sat and watched them work I thought, any American older than 35 probably couldn't do the physical labor they accomplished. And younger Americans would refuse to work that hard.

Yep, they're supporting their families. Lots of Americans don't have to because they're getting unemployment compensation, food stamps or some other form of social welfare. Don't get me started on unemployment compensation. I just returned from a 'photo safari' vacation and one of the other couples on the trip freely bragged about still having almost 80 weeks left where they both were getting $450 a week in benefits and only had to "check in" on line once every two weeks to assert that they were looking for work. They were nicely dressed and both were using very expensive camera equipment. I had a hard time not saying something about what I thought of the whole concept of unemployment compensation.

[Guest]

VK: My stepson is doing exactly that. Sometimes backbreaking labor and he does it all without a cross word. They're tearing down a barn these days and finding mummified dogs and cats under the floors. Because he didn't complain a single bit, the foreman gave him an extra $1/hr for his excellent work. He's ex-Navy so that might help his attitude.

[Guest]

I wasn't up to answering to VK's generalizations of the American work ethic although I can agree and still partially disagree with his premise.

American's are loathe to work for anything below a true living wage, especially when you can secure shelter and eat regularly in comparative comfort on the entitlement dole. I wouldn't have gotten out of bed for minimum wage. What for?

I worked as a blue collar laborer my entire adult life, and I worked for a living wage enabling me to support my family and meet their needs and live with dignity. The jobs like I had are fast disappearing. Being replaced with jobs which pay less and couple with higher deductions and added health care costs.

Why bang your head against the wall for little reward when the government will take care of you indefinitely if you decide not to.

[Guest]

I respect anyone that wants to better themselves but VK its a good chance that your crew were for the most part illegal and that in itself should be considered a crime. E verify should be used for all employees or go ahead and make all the illegals citizens and make them pay taxes as Americans do and most of our deficit could e payed off.

[Guest]

If you all look back there once was a claim that computers would be us all out of business. Computer technology not only increased productivity and efficiency it also created job positions that never existed. It changed manufacturing, it changed the way mechanics work ,etc. Obama is dead wrong. Job positions evolve and many will disappear. the problems is that educators are behind the curve in offer education for these new positions and students are not better advised. It is why we graduate too many lawyers and not enough scientist and math majors (i.e engineers) The argument has always been that colleges/university are now suppose to prepare people for specific job positions except for law, medicine, engineering,etc

In all mimproved technology reducing my work staff. Instead it continually created more job positionsy years in management I never witness

[Guest]

If you all look back there once was a claim that computers would be us all out of business. Computer technology not only increased productivity and efficiency it also created job positions that never existed. It changed manufacturing, it changed the way mechanics work ,etc. Obama is dead wrong. Job positions evolve and many will disappear. the problems is that educators are behind the curve in offer education for these new positions and students are not better advised. It is why we graduate too many lawyers and not enough scientist and math majors (i.e engineers) The argument has always been that colleges/university are now suppose to prepare people for specific job positions except for law, medicine, engineering,etc

In all mimproved technology reducing my work staff. Instead it continually created more job positionsy years in management I never witness

Your point on computer related jobs is an excellent one. When the federal government bailed out the auto industries it really wasn't about saving jobs. It was about saving the United Auto Workers Union (UAW) and their millions of dollars of contributions to the coffers of the entrenched political parties.

A vacuum cannot exist in our economy. If General Motors actually went out of business due to it's, let's be honest, bad business strategies, GM's competitors would have enthusiastically filled the void in vibrant competition for that huge market.

The problem we were force fed was the eliminated jobs of GM, but the real problem for the federal government was the eliminated "union jobs". The UAW hasn't had much success in organizing the new companies building vehicles in the U.S.

These companies include Toyota, Honda, Nissan, Kia, Hyundai and Volkswagen who are changing the face of parts of this country with new factories, new jobs and new investments.

Now, if there was no autoworker union in the U.S. would the new faces on the scene pay their workers the living wages and employee benefits they now do? Who knows, but the union could still be there to organize these workers if the labor need arises. They would just have to work at it.

http://www.forbes.com/2009/01/06/foreign-automaker-towns-forbeslife-cx_he_0106cars.html

[Guest]

...make them pay taxes as Americans do and most of our deficit could e payed off.First, from what I gather, the illegals that are working for U.S. employers do pay taxes. They're witheld just like any other employee. The employer's accountants and ther IRS wouldn't have it any other way. If the workers are illegal, they probably are contributing to someone else's Social Security account in that they couldn't get a card for themselves.

But on the subject of paying off the deficit with the additional taxes from illegal workers, maybe you'd better do the arithmetic on that one. If there are 20 million illegal workers in the U.S., at the maximum marginal tax rate they would have to earn $230 million each for their tax payments to balance the federal budget. That's a whole lot of hours at $7 an hour!

[Guest]

That basic fact - the fact that we ARE still the most productive workforce in the industrialized world - is why we can still have a higher manufacturing output than even China (i.e. they make plastic crap, we make airplanes) while simultaneously losing jobs.

There are at least eleven aircraft manufacturers in China. China has been manufacturing Aircraft and Aircraft parts and Airframes for over 65 years. Heck even the so-called European AIRBUS A320 has been made in China since 2009."Coach" purses are going to be made in India..instead of China...because Chinese wages are "too high". Gosh, I wonder why "Coach" moved out of the USA several years ago? ( maybe our productivity was too high). IMHO, WE..as a Nation need to focus on Education..namely Math and Science...to create jobs. Inovation and new ideas can create jobs. Productivity has gone the way of the buggy whip. No matter how many you can build in one-hour.... you still can not sell them.

[Guest]

Mrfixit: Boeing and Airbus basically own aircraft manufacturing - Embraer and Bombardier are next. But that was an example.

The point is that numbers don't lie.

http://blogs.forbes.com/timworstall/2011/06/17/what-decline-of-american-manufacturing/


The U.S. ranked #1 in the world for manufacturing, and produced 14% more output than second-ranked China ($2.04 trillion) and twice as much output as third-ranked Japan ($1.15 trillion).

What’s most impressive is that the U.S. produced almost as much manufacturing output as the manufacturing sectors of Germany (#4), Italy (#5), France (#6), Russia (#7), U.K. (#8), Brazil (#9) and Canada (#10) combined ($2.44 trillion).


Manufacturing itself is quite healthy - it's the jobs that aren't. So what does that mean? It means we're producing more with less - in other word, "productivity".

[Guest]

If manufacturing itself is healthy then perhaps the discussion should be about jobs/products/factories that are no longer in existence here in the USA that have been outsourced to other countries around the world.

There is absolutely no doubt that more can be produced per hour generating a lower cost per hour, requiring fewer workers per hour.
The issue is when companies have no incentive to invest in new manufacturing in the USA, at a profit, they will CONTINUE to do so else where.

Billions/trillions of dollars of profits made by US corporations offshore, are not being brought back to this country to invest in new operations because of the current tax structure.

For those of us whose careers were in the manufacturing industries, we remember things like 25,000 workers in Appliance Park making major appliances back in the 30 years ago and today less than 5000.

How many plants/jobs that once upon a time manufactured automotive components have disappeared to off shore facilities. GM's Saginaw steering gear division once upon a time used to manufacture components for many of the then growing Japanese car makers.

If one would apply the concept of making more with less, adjusted for market growth of the past 30 years, not taken off shore....there would be quite a different discussion being conducted today.

Add the current unfriendly approach by the current administration towards business/manufacturing along with no direction for new job creation in just the energy sector alone is a staggering contributor to no new jobs.
Instead of letting the free markets determine where the jobs should/could be we have resorted to letting politics make the determination. We certainly don't want to bring back jobs from off shore and upset the non US entities would we....as viewed by the oh so honest and incapable representaives in Washington.

The jobs creation issue is simple to solve....we just are not doing ANYTHING to generate the jobs. Because of politics and the complete lack of business/market sense in Washington, DC.

Like energy independence, job creation is not a priority or agenda item for the current administration.

How much of the spending proposals and actual $$$ spent have been directed to job creation? Will be directed at job creation? Could be directed to job creation?

Why allow a company like GE to pay no taxes in 2010 on domestic operations, yet not give consideration to a reduced tax rate to bring profits from off shore operations back to the USA?

Not a priority. Current politicians do not understand the business equation.
Current politicians do not really care. And far too many we the people, the new entitlement generation certainly don't want to care.

None of the above will CHANGE until there is REAL CHANGE in Washington.....not just pretty speeches about it.

btk

[Guest]

To take an example from an industry I know well, we (meaning the IT industry) used to employ THOUSANDS of people to manually string together something called "magnetic core memory" (they looked like a fabric of tiny metal donuts string together in a weaved pattern).

Today memory is made completely by machine. We make plenty of it - to say nothing of all the other kinds of chips we make - almost completely automated - done by robots.

I've seen the same thing happen in sector after sector. You don't need as many people to build a Ford as you used to. Not by a long shot. But now you're building a $30K-$40K Ford with those fewer people instead of the 42K-$3K 40 years ago (the price of the car outstripping inflation for a variety of reasons)

Bulding up the manufacturing sector will be good for things like our trade deficit but it's not the panacea for employment as it just doesn't take as many people to build stuff as it used to.

[Guest]

....we just are not doing ANYTHING to generate the jobs. Because of politics and the complete lack of business/market sense in Washington, DC.

Like energy independence, job creation is not a priority or agenda item for the current administration....Billie, we didn't lose all those jobs overnight. Policies for job creation haven't been on the agenda for several...many...administrations from both parties, going back a long, long time.

I can recall back in the mid-1970's I was asked to give a presentation to the Army Command and General Staff College (CGSC). The CGSC is a step in the training of all senior Army officers, all bird colonels for the most part, in preparation for promotion to general officer.

I was an active reserve officer myself and the time I was responsible for all commercial banking in the central U.S. for my bank, one of the largest in the country...financing the "rust belt", if you will. The U.S. steel industry had already begun its decline and any financial analyst at the time would have reached the same conclusion that I did--that other than the production of specialty steel and fabrication, "big steel" was headed offshore. closer to the sources of raw materials and cheaper labor. The United Steel Workers were one of the most powerful unions at the time and the pay and benefits of U.S. steelworkers were legendary...uncompetitive, unaffordable and unsustainable.

The colonels were aghast at my proposal. We spent more than the allotted time discussing how a country could have an effective fighting force without an industry as fundamental as steel as a key part of the military-industrial complex. We didn't reach a conclusion, of course. But over then next 10-15 years, my prediction was realized. As a banker I had done my job. I had scaled back on the extension of credit to the big steel companies so that we were assured that our loans would be repaid before the companies failed or went out of business.

Sadly, I had to do the same thing with the auto companies only a few years later. That was harder for me because I had worked for ten years in the auto industry in Detroit at the beginning of my career. I remember the day I told the Chairman of our bank that I intended to scale back credit to Chrysler as our commitments to lend to the company rolled off--that in my opinion Chrysler could not survive. He too was aghast--Chrysler was our fifth most profitable account and he was a close friend of Chrysler's then-CEO. It took a little longer than I projected, but in the end I was right regarding Chrysler as well. But he knew that I knew Chrysler well--I had worked in senior manufacturing positions for Chrysler for five years.

The saddest part of the story, my story, is the shut-down and dismantlement of the Detroit Plant of The Budd Company, a major auto supplier of body stampings, wheels and brakes. When I worked there, my first job out of college, that plant employed almost 10,000 people on three full shifts. I was proud to be a part of such a successful and vibrant company. The end of that plant's story is told in a book entitled, Punching Out by Paul Clemens. Read it if you get a chance.

[Guest]

Guess what? The President is absolutely correct. If the country's productivity, as measured in standard economic terms (the amount of labor input to produce units of economic output), was the same now as it was 10-15 years ago, there would be no unemployment problem.

But that's not correct either. There still would be an unemployment problem, but for a different reason. If the productivity of the U.S. remained the same as it was 10-15 years ago, we'd still have unemployment because other countries with whom we compete have also achieved substantially improved productivity, in some cases even moreso than the U.S. If U.S. productivity rermained the same as is was a decade ago, we simply couldn't compete in world markets because our products and services would be much more costly than those produced elsewhere in the world. For that reason, we'd still have lots of unemployment because we'd have become non-competitive.

The President is correct. A significant part of our current unemployment has resulted from our increasing ability to produce goods and services with a substantially lower amount of labor input, with resulting unemployment. The only real way to reduce unemployment from it's current level is to increase economic activity--sales of our products and services--faster than our productivity increases.

That BBQman, is a far cry from the Ludditeism that you've accused the President of practicing.

Sometimes I'm amazed at how people take soundbites of what political opponents say, then either don't understand them or don't bother to think about them, all for the purpose of being critical. That's exactly what you did in this case.


Great Response