Month: July 2015

“A World Without Work” is an Atlantic story about what the U.S. might look like after robots and smarter software take over a lot of jobs within the U.S. The author says that the declining labor force participation rate in the U.S. (from 66 percent to 63 percent since 2009) hasn’t been the boon to American happiness that we might have expected: “By and large, the jobless don’t spend their downtime socializing with friends or taking up new hobbies. Instead, they watch TV or sleep. … The unemployed theoretically have the most time to socialize, and yet studies have shown that they feel the most social isolation; it is surprisingly hard to replace the camaraderie of the water cooler.”

This Wall Street Journal article shows that Puerto Rico is about 20 years ahead of the rest of the U.S. The federal minimum wage of $7.25 per hour is 77% of the median wage (comparable to a $13 per hour minimum wage in May 2014 (BLS data showing median hourly wage of $17.09 nationwide)). In other words, it is illegal for companies to hire a large percentage of Puerto Ricans at what would be a market-clearing wage for their particular skills. The result is that labor force participation in Puerto Rico is 43 percent, which means a much higher percentage of the population needs to find something to do every day other than work.

There seems to be a political consensus in the U.S. around raising minimum wage to $12-15/hour. If we assume that Americans as a whole will respond to economic incentives in the same way as those who live in Puerto Rico, presumably the 50 states in 10 years will look like Puerto Rico today (or sooner if the technological revolution forecast by the futurists turns into reality). This makes Puerto Rico a potentially useful laboratory for figuring out how to build a society that is satisfying for citizens when the majority of able-bodied working-age citizens do not have jobs. On some measures, Puerto Rico has already solved the problem of how to build a good society without work. This Orlando Sentinel article notes that Puerto Rico topped a worldwide happiness survey back in 2005. A lot of the boost seems to come from extended family living nearby. The mainland U.S. could be naturally trending in the Puerto Rican direction. As traditional colleges become unaffordable fewer young people will move away from home in order to go to college. As a smaller percentage of Americans work, a smaller percentage will move away from their birthplace in order to work. We could spend more of our tax dollars on festivals and social gatherings (every town every three days) and less on health care (if we cut the percentage of GDP spent on health care to something more like what other developed nations spend we could easily fund all-day, every-day parties; see my health care reform piece for other alternatives). We have 50 million people getting food stamps. What if, for at least one meal per day, those 50 million people were invited to come to a social meal? The same deal with SSDI. We could offer enhanced SSDI benefits for those who move to an “SSDI party village” where at least half of the neighbors are also on SSDI. Then there would be more opportunity for socializing during the middle of the day when 43-63 percent of working-age Americans were at work.

What ideas do readers have? How should society be organized if only a minority of working-age Americans are working? What can we test out in Puerto Rico?

Full post, including comments

Whatever Greece has been doing economically hasn’t worked out that well, apparently. It seems irrational to say that “What we organized in the past few decades led to insolvency, but we’re much smarter and wiser and would never do that again.”

Maybe Ecuador is the model for Greece. They noted their failures in managing their own currency (the sucre) and voluntarily gave up this government function in 2000, adopting the U.S. dollar as the official currency.

Analogously, the Greeks could recognize that they aren’t capable of drafting and passing laws that lead to a sustainable economy and import another country’s laws and regulations in a big package that nobody can open or tweak. Which country’s laws should they pick?

The CIA Factbook shows that the world’s most successful country, aside from oil-rich Qatar or a few tiny financial services havens, is Singapore. Singapore has a per-capita GDP that is 50 percent higher than the U.S.

Singapore is similarly situated to Greece in many ways. The population is within a factor of 2. Both countries are small relative to neighbors and trading partners. Both countries have military challenges in dealing with much larger potential foes (Turkey for Greece; Malaysia and Indonesia for Singapore; Singapore currently spends a larger percentage of GDP on military than does Greece (World Bank)).

Greeks could strip their politicians of law-making power and say that their courts and police were responsible for applying the laws and regulations of Singapore, however those laws and regulations evolve.

Related:

• Heritage foundation on Singapore (#2 in the world for “economic freedom,” after Hong Kong)
• Heritage foundation on Greece (#130 in the world, in between Suriname and Bangladesh) — this raises the question “Why does the world have to stop and pay attention to the economic challenges faced by the Greeks? Are there not similar challenges faced by people in their economic environment neighborhood? Why do we care about Greeks this week but not people in Suriname or Bangladesh?)

Full post, including comments

An awesome idea from Spain: hybrid airplane powerplant. Airplanes need about 65 percent power for a reasonable cruise. Airplanes can certainly fly on 35 percent power. Thus having an electric motor that can be used for a boost on take-off and as a backup in case the reciprocating contraption comes apart comes with potential weight savings as well as some potential safety improvements (though not too many accidents are caused by power failure).

With typical regulatory certification challenges this might be ready in 10 years!

Full post, including comments

“Airlines Under Justice Dept. Investigation Over Possible Collusion” is a New York Times article about the airline industry that the antitrust watchdogs in D.C. allowed to form:

roughly 80 percent of the nation’s air traffic is concentrated among four airlines — American, United Airlines, Delta Air Lines and Southwest Airlines.

Now it seems that the same government that allowed this kind of concentration is investigating the oligopoly for obstructing competition… What did they actually expect to happen?

Related:

• “Unions and Airlines”

Full post, including comments

Facebook friends say that the existence of American citizens who object to President Obama’s policies and proposals is proof that Americans are racist. Partly this is due to the number of people who oppose Obama’s plans and partly this is due to the perceived vehemence of the opposition. Suppose that Hillary Clinton wins the next election, as I would expect. There will presumably be quite a few people who oppose many of her proposals simply because most things that the government does make one group richer while making another group poorer. The same friends will presumably then say that this shows how Americans, who elected a female president, are even more sexist than before.

Could this continue if every future president is black and/or female? The Americans who select members of these groups as their leader will be considered ever more racist and sexist?

Full post, including comments

Burning Man can be a challenging and uncomfortable place to visit. It turns out that the best way to attend is to work for or be friends with the federal government. For 2015 the Bureau of Land Management is requiring the Burning Man organization to building a $1 million VIP compound (USA Today) with “butter and margarine” (what about the government’s war on transfats?), 24-hour ice cream access, “a variety of dessert served with each dinner,” Chobani yogurt, etc. (Reno Gazette-Journal). They need washers and dryers because, apparently, packing a whole week of clothing is not something that VIPs can do (nor can they take their taxpayer-funded vehicles to the laundromat in nearby Gerlach, Nevada).

The state government doesn’t want to be left out. They’ve passed a law that takes effect in October 2015 to collect a 9 percent tax on festivals such as Burning Man (Forbes). The state, which doesn’t impose an income tax on its own individual or corporate citizens, thus manages to shift even more of the tax burden to visitors. (The state’s tax burden is already pretty low, 8% of income compared to a national average of 9.8% according to the Tax Foundation.) They’ll soon have a $5 billion Tesla battery factory in the Reno area. Perhaps this will become a tourist destination in its own right, leading to more tax revenues from hotel and restaurant purchases by visitors (and a state tax on factory tours?).

(Another peculiarity of Nevada is that they cap child support at a tax-free $13,000 per year (Real World Divorce). That’s double the limit in Germany, and still represents a profit over what typical American couples spend on their children, but Nevada is right next to California, which offers unlimited child support profits by formula to custody victors. If a VIP from Washington, D.C. (unlimited child support by judicial discretion) comes to the proposed “camp uber douche” and invites a young lady from California to come sample the salad bar, four types of milk, seven kinds of juice, etc., there is potential for litigation in three states regarding venue, with millions of tax-free dollars riding on the outcome.)

Related:

• my own photos from Burning Man 2014
• photos from 2015

Full post, including comments