The Intractability of the US Unemployment Problem

If the problem is construed as getting back to employment levels of the past, it's probably not solvable by any means in the short run.

Some more graphics to make the point:

GDP and GDP growth:


Correlation of oil prices and recessions:




US employment impacts of various recessions:



Total US employment (http://delong.typepad.com/):



Now consider the relatively healthy 2005-2007 economy as representative of baseline employment growth rate.

Upshot: this number is not going anywhere anytime soon, no matter who or what you choose to blame.

GDP Path

This is something of an aside from my economics multi-part essay. I found a graph I've been looking for in the context of the discussion about employment as a design goal for an economy.

Now as context, note that the US historically returns to baseline after a recession

So the expectation in Serious Circles is an eventual return to the "normalcy" expectations set in the 20th century. (Note that the recovery to baseline is not universal in other countries.

As I understand it, normalcy in the job market lags normalcy in GDP growth. The following graph is the one I mentioned in a recent comment. It should clarify that the drop in GDP over the Bush recession was so sharp and severe, that even a "normal" recovery will take a long time. Obama deserves none of the blame for the slow recovery in employment, even in conventional economic terms.



Since the graph was plotted, the US GDP has flattened out a bit as I understand it (and the UK is in an unambiguous double dip.) So things look even worse.

The point here is that, even if the limits to growth scenario hasn't really arrived yet, nobody should be holding their breath about a return of the missing jobs. The growth rate required to get back to baseline in a few years is extraordinarily high, because the Bush screw-up was so spectacularly deep. That is, we require a sustained period of substantially above average growth to get back to "normal" which would amount to rehiring most of the laid off folks.

Given that any short-run return to growth will run into the crunch of inelastic petroleum demand meeting inelastic petroleum supply, this isn't in the cards on a time scale short compared to the replacement time of transportation infrastructure.

So, let's face it. Obama will not get things back to "normal" this term and he or his successor will be very lucky to manage it in the following term. There's enough "peak oil" phenomenology in the mix to clinch this. I suspect few countries, unless they are oil-rich, will sustain GDP growth in the near future. (Canada's horrifying defection from climate governance shows that at least one government sees the writing on the wall, albeit cynically and maliciously.)

It's my belief that this kick may well turn out large enough to be seen by history as the inflection point in the overall growth curve. In the long run this may not be a bad thing, but much depends on whether the societies living through it can see it in perspective.

My market preferences

This map shows my recommended bus route to work and available bike paths in the region. It requires two cricuitous bus routes and a transfer.

You will note that there is NO safe bike route, no matter how circuitous, shown. This is not a cartographic error. In my opinion it is correct.

The recommended bus route requires only a half mile of walking and twelve additional minutes of waiting in the typically 100-degree weather, each way, and takes 48 minutes each way. This doesn't account for walking inside the research campus, which is about another half mile.

My car commute takes nine minutes each way.

So I "want" a car. I "demand" continued road maintenance and gasoline. I "show no interest" in bicycle or bus options. This is my revealed marketplace preference.

Update: Atmoz takes me to task, and offers up one of the suicidal bike routes I have considered. Suffice it to say that my wife forbids the enterprise. Austin takes out better bicyclists than me with considerable regularity. I am forced to leave the bike pioneering to wilder spirits with better maintained bodies. But if it encourages Atmoz back into blogging, I will be happy to quibble about the really dangerous bits, viz. Burnet Rd and 51st St (or alternatively St. John's.) I was visited at the Pickle campus once by a wiry and healthy young bicycle fanatic, and he swore to me he would never again take the risk of riding the mile up Burnet Rd. It is necessary to approach via Rutland, which means crossing 183 somewhere upstream. As for crossing I-35 on St. John's, it's not so much the rogue traffic (one could do a portage over I-35 on the sidewalks) as the muggers in the neighborhood that will happily do in a fat old puffing gringo with a laptop trying to commute through on a bike.

I would sacrifice the time for the exercise gladly, but it is not feasible: it would as likely do me in as do me any good. So I drive to my hideous workplace and drive to my hideous gym.

Austin thinks of bicycling as recreation, not as transportation. The bike paths to nowhere are excellent, but the roads to where one actually goes are death traps. Austin's highly touted claim to being a "green" city has always struck me as a cruel irony, nothing more.

The Leisure Crisis, Feminism, and Overwork

Note: This article follows on to The Missing Automation Crisis

---

It may be hard for younger people to imagine, but in the mid twentieth century there was in many circles a presumption that liberalism was the ideology of the future, and that in particular the ideas of fundamentalists were in remission. Nobody was taking the objectivists too seriously, and the concept of an unholy objectivist/fundamentalist/chamber of commerce alliance calling itself "conservative" and pretending to a cohesive worldview was pretty much unimaginable. An alliance between academics and labor seemed a far more natural heir to dominance in a technocratic and generous civilization.

Lyndon Johnson's slogan of a "Great Society" is barely remembered, its meaning lost under the avalanche of "conservative" obfuscation. It really was a pity about that damned war. Johnson narrowly missed greatness.

But the Viet Nam fiasco war wasn't on the horizon yet, and what became the culture wars hadn't gone past the jukebox, in the context in which the concern about an employment crisis due to "Automation" was first raised, and as a matter of urgency. Thus, once Wiener got it into the heads of Serious People his ownership of the problem faded. The general idea was that the general prosperity would in some way be rebated to the general population, and that there would be no great economic consequence to the unemployment once it arose in earnest. Thus the Automation Crisis morphed into the Leisure Crisis. Symposia were held, and academic essays written: How were we to deal with our lives now that even those of modest means would have ample free time, all the work being done by machines?

Yet, not only did the expected decline in employment fail to arrive. The cultural revolution of the 60s and 70s thoroughly changed expectations in many aspects of modern life, but none so strongly as the role separation of males and females.

You can look back at the hippie literature that pushed this change, and it's often regarded as perhaps the greatest success of the cultural revolution. Even the most conservative culture warriors nowadays accept women as equals. Should things go especially badly, after all, we may spend a great deal of time in the next few years contemplating Michelle Bachmann or Sarah Palin, hardly the vanguard of one-world mysticism and rejection of materialism.

But when you look at what they (okay, okay, we) were saying, it wasn't ONLY that women should be accepted as equals in the workplace. It was ALSO that men should be accepted as equals in society-building, child-rearing, and self-expression. And we were hardly a work-oriented bunch. The idea was EXPLICITLY about job-sharing. We would all soon be blissfully half-time.

And this expectation, on its face, makes sense. Double the work force, and EVEN WITHOUT THE MACHINES the amount of work per head would be halved. Sure, there would still be driven people being brain surgeons and all, but the average person would be working substantially less.

What was the outcome?

Well, in 1993, Juliet Schor wrote a book called The Overworked American: The Unexpected Decline of Leisure. From a blurb:

Contrary to all expectations, Americans are working harder than ever. Juliet Schor presents the astonishing news that over the past twenty years our working hours have increased by the equivalent of one month per year a dramatic spurt that has hit everybody: men and women, professionals as well as low-paid workers.

So, WTF?

Well, there's the "America's favorite fries" argument that McDonald's makes. Since, as a matter of free choice, Americans eat more McDonald's fries than any others by a large margin, they must be everybody's preference. (I would argue that McDonald's fries are the favorite of few individuals over the age of 4. But very few people never eat them. And nobody is forcing the matter.

The ideology of Polyannism will claim that Americans make a free choice to work hard so they must want to. And this is surely true of some people. But others work many more hours than they would prefer.

And once we have most people choosing to do things they wouldn't choose to do that we have a very interesting economic quandary. And one that reflects very oddly on one of the few remaining points of bipartisan agreement: the more employment, the better.

Really? Or perhaps not? What happened to the Leisure Society?

Injecting Sanity

A great swath of the Australian science community is participating in a series of blog outreach pieces on climate science, starting now. Here's the introductory article.

A key quote to whet your appetite:

understandable economic insecurity and fear of radical change have been exploited by ideologues and vested interests to whip up ill-informed, populist rage, and climate scientists have become the punching bag of shock jocks and tabloid scribes.

Aided by a pervasive media culture that often considers peer-reviewed scientific evidence to be in need of “balance” by internet bloggers, this has enabled so-called “sceptics” to find a captive audience while largely escaping scrutiny.

Australians have been exposed to a phony public debate which is not remotely reflected in the scientific literature and community of experts.

Beginning today, The Conversation will bring much-needed and long-overdue accountability to the climate “sceptics.”

The list of signatories is impressive. Thanks and congratulations to all concerned!

H E B Chairmain Asks Gov Perry to Reconsider on Education

A bit off topic.

The chairman of Texas' dominant grocery chain (and a good one!) pleads for sanity in the Texas education budget.

Our company has been serving Texans since 1905 and this recession isn't our first rodeo!

We kept adding people and stores right through the Great Depression of the 1930s until building materials became unavailable due to World War II. Company growth continued through the recessions of 1973-75 and the 1980s and we are building and hiring aggressively today.

For Texas to cut $4 billion from public school funding now, when a better-educated Texas can be a bulwark against future recessions, seems unwise, not conservative and, in fact, very risky for the state. Falling back isn't the way Eisenhower and Patton won World War II.

This isn't about political parties or national issues; it's about the future of Texas.

As business people investing annually, we are worried about the state's future if we start cutting education funding — lower per capita income and higher crime rates are almost certain to result. An educated workforce is essential to all industries.

With 160,000 children joining the system in the next biennium we at least need to fund at 2010-2011 levels.

In March 2011, the Financial Times reported Texas to be 44th out of 50 states in funding per student and said Texas had "one of the most underfunded - and needy - education systems in the U.S." Let's move forward (as Texas always has), not back.

I urge you to consider these views for the future good of the state we all love.

Thank you for your public service! Respectfully,

Charles C. Butt, chairman and CEO, H.E. Butt Grocery Co., San Antonio

via http://www.chron.com/disp/story.mpl/editorial/outlook/7603731.html#ixzz1PB6ESspc

HEB is not a liberal institution by any means. But they are a family business, rooted in Texas, and in it for the long haul. That even they are publicly raising questions about the ALEC policy portfolio shows just how far from "conservative" this party-of-pillage approach really is.

Meanwhile, as part of its response to the manufactured budget crisis in Wisconsin, the budget bill advocated by the majority has provisions that "would give a $150,000-a-year exemption from the state sales tax for snow-making and grooming equipment used by ski slopes and trails and a $500,000-a-year sales-tax exemption for direct-mail advertising."

These are worthy causes for cutting back on education, aren't they?

The Missing Automation Crisis

Among the things we are a half century behind in addressing properly is the economics of plenty. Let's start with one of the less controversial of the conundrums of the modern world: the disappearance of the Automation Crisis.

One of my great heroes, uber-geek Norbert Wiener, pretty much got himself into terrible trouble over this. He basically invented information technology (Though it was entirely analog and/or mathematical at the time, which is very interesting in itself. Most information theory taught these days is more based in Shannon's much more accessible ideas. But the whole network lives on top of an amazing hidden Wienerian world of transmission and detection that few people look at. While Shannon's ideas get more attention, we would not be where we are today without Wiener's work.)

Basically, he realized that a lot of mundane decision making, as well as mundane activity, would eventually be delegated to machines. Accordingly, he felt that low-skilled jobs everywhere were under a long-term threat, which would lead to a dangerous oligarchy of the skilled and educated. He construed this as a threat to the prosperity of the working class. As a mid-20th-century academic intellectual of obviously Jewish ethnicity, thus with Nazism being fresh in his mind, he in turn had little trouble extrapolating these stresses on the working class into a direct existential threat to pretty much everything he valued.

Wiener had already run afoul of the authorities by refusing to work with the Pentagon after WW II ended. As a mathematician first and an engineer second, Weiner's ideations had little to do with what was considered ideology in those days in some circles. (If it's obvious to anyone that closed loop systems like capitalism work better than open-loop ones like Stalinism it would be Norbert Wiener!!!) But this didn't stop J. Edgar Hoover from opening a dossier on the fellow. Fortunately, he ended up with the Douglas-Adamsish designation "mostly harmless" and was left alone.

Somewhere in those days, though, Wiener attempted to capture the attention of the labor movement, going so far as to have meetings with AFL-CIO chairman Walter Reuther.

Here is Wiener's astonishing letter to Reuther.

South Tamworth, August 13, 1949

Walter Reuther

Union of Automobile Workers

Detroit, Michigan

Dear Mr. Reuther,

First, I should like to explain who I am. I am Professor of Mathematics at the Massachusetts Institute of Technology, and Iam the author of the recently published book, Cybernetics. As you will see, if you know of this book, I have been interested for a long time in the problem of automatic machinery and its social consequences. These consequences seem to me so great that I have made repeated attempts to get in touch with the Labor Union movement, and to try to acquaint them with what may be expected of automatic machinery in the near future. This situation has been brought to a head by the fact that I have been approached recently by one of the leading industrial corporations with the view to advising them as to whether to go into the problem of making servo-mechanisms, that is, artificial control mechanisms, as part of their extended program.

Technically I have no doubt what direction my advice should take. My technical advice would be to construct an inexpensive small scale, high speed computing machine, together with adequate apparatus for putting the readings of photo-electric cells, thermometers, and other instruments into the machine as numerical data, and for putting numerical out-put data into the motion of shafts and other out-put apparatus. The position of these output shafts should be monitored by proper sense organs, and be put back into the machine as part of the information on which it is to work.

The detailed development of the machine for particular industrial purpose is a very skilled task, but not a mechanical task. It is done by what is called 'taping' the machine in the proper way, much as present computing machines are taped. This apparatus is extremely flexible, and susceptible to mass production, and will undoubtedly lead to the factory without employees; as for example, the automatic automobile assembly line. In the hands of the present industrial set-up, the unemployment produced by such plants can only be disastrous. I would give a guess that a critical situation is bound to arise under any condition in some ten to twenty years; but that if war should make the replacement of labor mobilized into the services an immediate necessity, we should probably have a concentrated effort put into this work which might well lead to large scale industrial unemployment within two years.

I do not wish personally to be responsible for any such state of affairs. I have, therefore, turned down unconditionally the request of the industrial company which has tried to consult me. However, it is manifestly not enough to take a negative attitude on this. If I do not put this information in the hands of the industrialists, it is merely a question of time when so obvious a method of procedure will be urged upon them by other people.

Therefore, the procedure which I shall follow depends finally upon whether I can get you and the labor interests you represent to pay serious attention to this serious situation. I have tried to do this in the past without success; and I do not blame you people for it, but since then there has been a turn-over in personnel among you and the present group of labor leaders seem to have transcended the point of view of the shop to a sufficient extent to make it worthwhile for me to make an appeal to you again.

What I am proposing is this. First, that you show a sufficient interest in the very pressing menace of the large-scale replacement of labor by machine on the level not of energy, but of judgment, to be willing to formulate a policy towards this problem. In particular, I do not think it would be at all foolish for you to steal a march upon the existing industrial corporations in this matter; and while taking a part in production of such machines to secure the profits in them to an organization dedicated to the benefit of labor. It may be on the other hand, that you think the complete suppresion (sic) of these ideas is in order. In either case, I am willing to back you loyally, and without any demand or request for personal returns in what I consider will be a matter of public policy. I wish to warn you, however, that my own passiveness in this matter will not, on the face of it, produce a passiveness in other people who may come by the same ideas, and that these ideas are very much in the air.

If you determine that the matter does not deserve your serious consideration, you will leave me in a very difficult position. I do not wish to contribute in any way to selling labor down the river, and I am quite aware that any labor, which is in competition with slave labor, whether the slaves are human or mechanical, must accept the conditions of work of slave labor. For me merely to remain aloof is to make sure that the development of these ideas will go into other hands which will probably be much less friendly to organized labor.

Under these circumstances, I should probably have to try to find some industrial group with as liberal and honest a labor policy as possible and put my ideas in their hands. I must confess, however, that I know of no group what has at the same time a sufficient honesty of purpose to be entrusted with these developments, and a sufficiently firm economic and social position to be able to hold these results substantially in their own hands.

I have a book ((The Human Use of Human Beings) which will be forthcoming with Houghton-Mifflin next spring which will bring these ideas to a head. If you so wish, I shall send you copies of the relevant chapters.

Naturally, I do not expect you to take these matters on my momentary say-so. If you show sufficient interest to be willing to push the matter further, I shall be glad to put my ideas both technical and social at your disposal, so that you will be able to judge them better.

Sincerely yours,

Norbert Wiener

Department of Mathematics

Massachusetts Institute of Technology

Cambridge 39, Massachusetts

Before long, to Wiener's satisfaction, Reuther was writing articles like this:


Inactivists will of course be delighted to note that neither was the recommended course of action followed nor did the dire consequences emerge, for three generations.

When we look at our current quandary, though, it may pay to ask how and why these things didn't happen. The simple theories of "growth" may be contrasted with the observational evidence that the average person in North America is not on the whole safer or more comfortable or happier than his or her predecessor. (Though the coffee and the razor blades are much improved!) So whatever the increased efficiency of labor is doing, it is not actually doing much for the benefit of the general population.

But the redistribution of wealth and allocation of responsibility as a matter of policy interest did not happen. Nor did massive underemployment. Indeed, in the intervening years, an expectation of employment of married female adults has actually greatly increased the proportion of the employed! So what happened?

Has the great chicken of the Automation Crisis finally come home to roost? And where has it been meanwhile?

Joplin, Two Weeks After the Tornado

Here are pictures of Joplin MO which I took the day before yesterday. Neither the pictures nor the maps can do this thing justice. Driving the length of the damage track is a sobering experience. (Click on images for higher resolution.)






The large building in the third photo was in the core track of the tornado. It was the main regional hospital, evacuated after the tornado. Smaller buildings were in some cases so reduced to rubble that the location of the building is indiscernible. Three story brick structures are about a story and a half high. Massive utilitarian metal structures are twisted into sculptural shapes.

There are probably still a hundred corpses in the rubble. The streets themselves have been cleared with remarkable effectiveness. A modest but steady traffic of cars drives up and down the devastated streets, looking for something or someone.

Blog Debt

A bunch of folks have sent me interesting emails that I ought to respond to.

It's a bit disconcerting that no matter how good of a conversation ensues after one of my postings it fades out in a couple of days. Something about the blog medium kills the momentum of conversations. I'd be interested in some ideas as to how a blog-like article could kick off a conversation that could keep going for a while, sometimes in the absence of the original author.

Anyway, thanks all for some amazing interactions on and off line to date. I'll be catching up soon.

Climate, Weather, Severe Events

Is it getting weird yet?

This is a difficult question. Weird is not a quantifiable concept, at least not easily. And confirmation bias colors what we are seeing - those who expect weirdness see weirdness; those who don't simply experience nature's ordinary orneriness.

But let me try to explain what I mean when I say I expect weirdness. I do not mean that the atmosphere is slightly warmer and slightly wetter, so that warm extremes and wet extremes will slightly increase. That is easy to argue, and a lot of climate folk are falling back on that argument, but I think there is more to the case than that.

Let me go back to an analogy I have used to explain the difference between climate and weather. Imagine a large tropical fish tank on a table, say at a mid-range Chinese restaurant. The fish swim hither, the fish swim yon. As you watch the fish over many visits (perhaps you especially like to sit by the fish tank as you roll up your mu shu pancakes) you come to know their habits. The striped one likes to hang out near the surface but occasionally goes for a dive, the reddish one hangs out by the coral, and so on. As you learn the habits of the fish, you develop a sort of set of expectations for where they will be as you look up from your meal. Occasionally they will be a bit out of place; you'll think "that's a little weird" but not lose any sleep over it.

As an expert on the fish, you sometimes strike up a conversation with your companions. "Look, I bet that one's getting ready to dive to the bottom..." Congratulations, you are now an expert on fish prediction! This is like weather prediction, only with fish. Then someone asks you to predict where the clownfish will be in ten minutes. You chuckle and say you can only guess, based on its habits; it's current position gives you no information about that. Good. Now you have said something about fish climate.

Now imagine that your obnoxious Young Republican nephew us joining you for dinner, and leaning on the tank so hard as to make you worry that he will knock it over. You tell him so, and ask him to please stop messing with the fish tank, which after all is not his property, and which the restaurateur will surely come after you for rather than your ne'er-do-well nephew. And besides, you really do rather like the fishtank.

Of course, your nephew persists, invoking his freedoms. You see the corner of the tank lift off the table and become alarmed. You say you are pretty sure he will break the fishtank if he keeps pushing it harder and harder. Rather than complying, he asks you again where the clownfish will be in ten minutes.

"I have no idea!" you reply, exasperated. "What the heck does that have to do with it? That tank will be smashed before you know it; the fish will be flopping on the floor, I'll be out twelve hundred bucks, and I'll be persona non grata at my favorite Szechuan joint, thanks to you!"

"Aha", quoth he. "So you know nothing about tropical fish displays at all! You admit it! If you don't even know where a single fish will be in ten minutes, how can you make predictions about when it will hit the floor?"

I thought this analogy could make the difference between weather and climate clear. The weather is the unpredictable behavior of the fish, and the climate is the predictable behavior of the fish tank that influences the behavior of the fish.

---

I've come up with an extension to the analogy which I think may start to give the flavor of why I think extreme events ought to increase. This time, my nephew decides that as an exercise in his freedom, he will be pitching all his beverages into the fish tank. Clearly, the behavior of the fish will change. But the water level in the tank will also change. Some of the fish may end up spending some of the time at the top of the tank. That is above the level that they have ever been able to attain under normal conditions. The changed conditions make new fish configurations possible that had been impossible before.

---

I can make a somewhat less handwavy case using something like the Lorenz system, but there's no solid proof of this speculation. However, it is at least possible, through this analogy, to understand that we aren't just loading the dice. In another analogy we've referred to around here, we might roll a thirteen.

Are we doing so already? That's a harder question. I do not know that deferring to statistical arguments can tell us anything. An April tornado season without known precedent follows upon no detectable trend in tornadoes. So the idea that it's part of a trend in tornadoes is unsupported. But it's still a very weird event.

I think we have to expect the unexpected. And when it happens we are going to have to do the hard work of analyzing the underlying physics. Subdividing it by individual phenomenon will tell us nothing because we haven't got enough data to tell us about the distribution of extreme outliers.