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Sunday, April 30, 2017

You, Too, Can Be English Royalty!

Now that the Charlotte Observer has breathlessly reported, yet again, on some woman who claims she was successfully ordained a Catholic priest, it is incumbent upon me to notify all the MSM news outlets that I have accomplished a similarly historical feat.

I have crowned my Catholic Hispanic wife Queen of England.




Now, I know this takes many people by surprise, but it was not a step we took lightly. We considered the historic discrimination instituted by the Act of Settlement 1701, passed by the Parliament of England, stating the heir to throne must not be a "Papist" and that an heir who is a Catholic or who marries one will be excluded from the succession to the throne.

That struck us as terribly discriminatory. Now, certainly, we can understand the English being a bit peeved about the whole Spanish Armada incident, but that was a step too far. So, in order to right the wrong done to Catholics by the English Parliament, and in order to make amends for the Spanish attempt to invade England, we thought it only proper that a Catholic Hispanic should become Queen of England.

It is time for a change, and we are at the forefront, leading the charge. We expect that, eventually, everybody is going to follow us. Indeed, I do very much recommend EVERYONE crown their wives/husbands English royalty. After all, the English have that discriminatory law against Catholics being King or Queen over England, and that really must end. If you are not married, then have a nice ceremony in which you get yourself crowned. When it comes to ending discrimination, there is no need for anyone to on formality. This is the 21st century, after all.

However, when planning your ceremony, I strongly urge you to get a German to do the crowning. Indeed, since I am German, and given the Hanover connection to the English throne, I definitely have more authority to crown my Catholic Hispanic wife Queen of England than anyone has to ordain a woman as a Catholic priest.

And, as I pointed out to the Charlotte Observer five minutes ago, when I submitted the above as a news story, we ALL have as much power to crown each other English royalty as anyone has to ordain a woman as a Catholic priest.

So, I'm sure the Charlotte Observer is going to cover this ground-breaking event. If enough of us start doing it, the English government will HAVE to recognize us. In the immortal words of U.S. Supreme Court Justice Anthony Kennedy's (Planned Parenthood vs. Casey): "At the heart of liberty is the right to define one's own concept of existence, of meaning, of the universe, and of the mystery of human life."

Thanks to the Charlotte Observer and SCOTUS, we now know the truth: all that stands between Catholics and English royalty is the will to make a change!

Thursday, April 27, 2017

Why No Job Is Safe

Pretty much all commentators are agreed: automation is going to eat a lot of jobs in the coming two decades. Between 38% and 50% of all jobs in the US will be automated by 2050. Mark Cuban  insists that social and creative jobs are safe. He's wrong.

By the very definition of IQ, the average is 100. 68% of the population fall within the gray area above. The simplest jobs are the easiest to automate. The simplest jobs are also held by the people with the lowest IQ.

If 38% of the jobs get automated, most of the automated jobs will be stripped from the population to the left of the center line. The jobs to the right of the center line are held by more intelligent people, those jobs are more complicated. Finding people to do complicated jobs is hard, which is why jobs to the right of the center line generally pay more. But some of the jobs to the right of the line will also be automated. For instance, anesthesiology is generally considered a pretty hard job, rather complicated, definitely a high-IQ position, but it also turns out that we have computers which are able to do that job very, very well.

So, the people to the left of the center line will lose their jobs first. The ones to the extreme left will be rendered unemployable. Even if we can train them for a job that is a little more complicated than the one they currently hold, nearly all the jobs on the left will be taken by robots. That is, we would only be able to retrain them for a slightly more complicated job that has ALSO been automated. They can't be moved far enough up the curve to get any of the non-automated jobs.

But, as we move to the right on the curve, the job situation changes. The closer we get to the center-line, the less likely it is that the next higher job will be automated. Worse, the closer we get to the center-line, the larger is the population that could, theoretically, be retrained for the slightly more complicated jobs that remain non-automated. And, keep in mind that many of the jobs on the right, even jobs on the extreme right, can be automated.

You can immediately see the problem. Everyone who has even a small shot at getting a non-automated job will be forced up the conga line to that next available job. Positions that the marginally qualified would, in the past, have ignored as not worth the extra effort will now become the only game they have left in town.

Every remaining job position will be sought after. This will drive wages down across the board. The wages associated with even non-automated positions will be driven into the dirt as everyone re-trains to try to snag one of the remaining places left in the job market.

This has already begun. I have already heard anecdotal stories of 2016 companies re-posting job descriptions that were originally written in 1996, complete with the original 1996 salary. And they fill those positions with that 20-year old salary cap because there is nothing else for job-seekers to do.

People, like Mark Cuban, assert that some industries will weather the automation storm better than others. That is literally impossible. Automation will batter and destroy EVERY nook and cranny of the job market. It will drive EVERYONE'S wages into the dirt. Even if the job is impossible to automate, the wage will drop to pennies on the current dollar, if only because everyone will be retraining and competing to get it.

On the bright side, automation will make superior products, and it will make them much more cheaply. On the down side, fewer and fewer people will have work wages to buy the products. They will have to get their incomes from something else.

Arguing that people will be able to pursue their dreams doesn't help. They may be able to do so, but it won't pay them when they do. Art, creativity, it won't matter what it is, nothing a human being can produce will be worth as much, if only because EVERY human being will be forced to at least attempt to engage in the non-automated activities that remain. The "nearly-good-enough" will drive down the value of the awe-inspiring perfect work of art, if only because there will be so many more "nearly-good-enough" pieces to choose from, and so much less money flowing in from wages, making the "perfect" unaffordable for nearly everyone at current prices.

Human beings have dealt with the problem of scarcity for our entire history. We are good at it, we have a system (capitalism) that is about to whip the scarcity problem permanently.

We have virtually no experience with the problem of perpetual surplus. That is where we are headed, and we have no system for dealing with it. Like the dog that chases the car, we have been chasing perpetual surplus for our entire existence. What happens when the dog catches the car? We don't know.

Thursday, April 20, 2017

How the Rich Murder the Poor

When mobs rioted in Ferguson, MO and burned down their own neighborhoods, commentators were aghast. They wondered how anyone could engage in such self-destructive behaviour.

But, to be fair to the impoverished people of Ferguson, they were merely imitating the rich and politically powerful as best they could. A new study shows that those who work to help the poor by raising the minimum wage have, in fact, been burning down poorer neighborhoods and destroying the businesses. Instead of using gasoline and a match, they use the law, but the effect is the same.
"Local minimum wage hikes cause restaurants to leave or shut down and deter new ones from entering, according to a new Harvard Business School study of the San Francisco Bay Area restaurant industry that contradicts the orthodox liberal view that steeply raising the cost of unskilled labor will not affect jobs or hiring.
More interesting, though, are the study’s findings about which restaurants are forced to leave by the higher wage floors. The authors compared rates of departure of restaurants across different Yelp ratings, and found that the policy hit low and mid-quality restaurants much harder than top-tier restaurants. “Our point estimates suggest that a $1 increase in the minimum wage leads to an approximate 14 percent increase in the likelihood of exit for the median 3.5-star restaurant but the impact falls to zero for five-star restaurants.” 
While a restaurant’s Yelp rating doesn’t correlate directly with its price range, this differential effect suggests that it’s easier for rich people to ignore the deleterious effects of minimum wage hikes. Virtually all of the most expensive restaurants in San Francisco have four or more stars; the city’s business and professional elite are unlikely to see many of their favorite high-end destinations pushed out of the city. Poor or middle-income workers are less likely to have the luxury of only frequenting top-rated establishments, not to mention that they are more likely to work at the restaurants that the hikes put out of business.
Similarly, the tax burden on the poor is far too high. Now, you may say, "Wait a minute! You always say the bottom 50% pay essentially nothing in taxes!"

That's true. The bottom 50% do pay almost nothing in taxes. But it isn't quite nothing. Study the chart below. Even a glance shows the bottom 20% of the nation pays 0.6% of the taxes. But, when you consider how much wealth the bottom 20% own, that 0.6% is way, way more than they can afford.

The top 40% pay over 88% of the taxes. And when you consider how much of the nation's wealth that top 40% owns, they still don't pay enough of the taxes.

Notice something about the graph. Even though the top 20% pay 85% of the taxes, the percentage of taxes paid as a ratio of wealth owned flips for everyone below the top 20%. The top one percent of wage earners pay 24% of the nation's taxes, but they own 34.6% of the nation's wealth. That's not a bad deal. Similarly, the top 20% pay nearly 68% of the nation's taxes, but they own 85% of the nation's wealth - they're still doing fine.

But then it flips. Everybody below the top 20% of wage earners actually pay a larger percentage in taxes than the percentage of national wealth they have access to. The second tier pays, in percentage terms, twice as much in taxes as they have in wealth. The third quintile is slightly worse: they pay, in percentage terms, more than double in taxes as they have in wealth. The fourth quintile only pays 2.5% of the taxes, but that's about a thousand times higher than they should be paying, when their wealth portion is considered.

And for the poorest of America's poor, the bottom 20%, Lord have mercy. They may only pay 0.6% of the nation's taxes, but they own absolutely none of the nation's wealth. That is, the bottom 20%, are actually suffering under an essentially INFINITE tax burden once you consider the fact that they own zero percent of the nation's wealth. The table below shows the problem. The bottom 20% has a divide by zero error.


% Taxes Paid % National Wealth Owned Ratio of Taxes Paid to Wealth
Top 1% 24 34.6 69%
Top 20% 68.7 85.1 81%
2nd 20% 19.3 10.9 177%
3rd 20% 8.9 4 223%
4th 20% 2.5 0.2 1250%
Bottom 20% 0.6 0



"But, wait! Don't the poor get a lot of money from the government?" Well, that depends on what you mean by "a lot". They bottom 40% get between 50% and 100% of their total income from government transfers, but even so, they actually get less government money than the rich do. As I did with the graph above, the graph below is simply a visual representation of the 2011 CBO data that I presented a year ago.



The rich and powerful control the commentary, so we hear a lot about how much the rich pay. And they do pay a lot - there's no question of that. But the poor aren't making out like bandits. They're barely making by at all.