Category Archives: Economics

Advanced technology, that made America and West prosperous, will it be responsible for its undoing and reversing immigration pattern? Brief Thought By F. Sheikh

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“ the looming technology tsunami that will hit the U.S. job market over the next five to 15 years and likely destroy tens of millions of jobs due to automation by artificial intelligence, 3-D manufacturing, advanced robotics and driverless vehicles — among other emerging technologies. The best research to date indicates that47 percent of all U.S. jobs are likely to be replaced by technology over the next 10 to 15 years, more than 80 million in all, according to the Bank of England. Jobs at risk include a diverse range of service and professional positions. Retail and fast-food jobs will be almost entirely automated. Manual laborers and construction workers will be replaced by robots; long-haul truck drivers by self-driving trucks; accountants, clerks, paralegals, telemarketers and customer-service reps by artificial intelligence; and security guards by robots and drones. Even professionals in the fields of accounting, law, finance, consulting, journalism and medicine are at risk of losing their jobs to smart machines” Writes economist and business professor in one of his columns in WP.

The well-paying job situation is already so dire that the public is willing to elect demagogues who are selling them nothing more than a snake oil. Despite all the threats, bullying, and shouting insults at Mexico and China, the effect of policies on well-paying jobs will be marginal. Just focusing on job loss to developing countries and tearing up global agreements will not do it.  

If current job loss is creating such a chaos and havoc, it is going to get worse, and imagine what it will be like in next few years. It is a critical time to come up with a plan and policies that will seriously address the jobs loss in the new automated age.. To make matters worse, we are electing leaders at this crucial juncture, who seriously lack the foresight and wisdom to address this core problem. We are already way behind the curve, and we have not even started seriously addressing the core issue of loss of jobs due to advanced technology, especially automation. It has already created a significant portion of population, which is permanently either unemployed or underemployed. Rather than focusing on the underlying causes, we are scapegoating immigrants and greedy corporations as well as wall street is happy to finance this diversion.   

In this coming fully automated age, the underdeveloped countries may fare better, as their labor may still be cheaper than installation of expensive automated machinery especially in service industry. They will still be manufacturing cheap products that West and its increasingly poor population will need to survive. It may impact immigration patterns also, decreasing immigration to West and increasing reverse immigration to the underdeveloped countries.  

F. Sheikh

 

Is Globalization The Real Culprit? Is Globalization Stoppable? Brief Thought by F.Sheikh

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It is true that the multinational corporations moved their businesses to regions where they can find cheap labor and increase their profits. It caused lot of dislocations, loss of jobs and anxiety in the developed countries. Bernie Sanders, who is the most credible and honest crusader for the working class, writes in today’s NYT

“We need to fundamentally reject our “free trade” policies and move to fair trade. Americans should not have to compete against workers in low-wage countries who earn pennies an hour. We must defeat the Trans-Pacific Partnership. We must help poor countries develop sustainable economic models.”

It is very confusing to understand how the poor countries will improve their living standards without selling their products at better price in rich countries but still lot cheaper if same product was made in the developed country. And how the consumers, especially poor and middle class, in rich country will benefit if they have to pay lot more for a product if they can get same thing cheaply made abroad? A significant portion of rich countries’ economy depends on export of high tech and sophisticated products to poor countries and how one sided flow of products will be helpful and acceptable to poor countries?

Globalization is the byproduct and natural phenomenon of advances in technology and free flow of information that empowers the consumers everywhere to buy the best at minimum price. The corporations are using the same resources of modernity to advance their interests and increase their profits.

Arguments to stop globalization are nothing more than shouting in front of a runaway train to stop it. And real culprit may not be the Globalization itself, but the greedy corporations who enrich CEO but do not share the profits with labor. The solution may lie in taxing these corporations at higher rates, share profits with labor; and spend tax dollars on infrastructure, retraining labor force and provide needed safety net for the displaced workers.

IMF & WB vis-a-vis the underdeveloped countries.

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Imtiaz Bokhari Sahib has written to me again that he wants to continue discussion about the topic in the title. Some of the initial exchanges between some members were done via email but most TF subscribers should have received those exchanges. So Bokhari Sahib, this is in some more detail the point I have been making.

Some of you have seen recent discussion going on the TF mailing list re. the International Monetary Fund (IMF) and the World Bank vis a vis Third World countries. The original article’s premise was that the above two institutions were essentially blood suckers making poor countries poorer while those poor countries were faultless victims. I did not challenge the premise that those institutions (IMF &WB and their investors) care only for their profit and not for the well being of the citizens of those poor countries. The only thing I challenged is the fact that the underdeveloped countries were made out to be faultless victims.
As a result I was asked by some to read some articles that would enlighten me. At the time I refused to read those articles because I didn’t think you could acquire commonsense by reading an article and I feel commonsense is all you need to come to the conclusion I came to. Fayyaz,Nasik and Babar Sahibs actually did – and put it in writing. But over the long weekend I had a few hours to kill and to satisfy my own curiosity I decided to do my own research on the subject. I have attached links to a few articles and to be objective I have purposely chosen articles that are highly critical of the IMF and the WB but read carefully and you’ll see that those countries were not faultless. I’ll make it easier by giving you the exact location of the lines that will prove my point.
As you can see this article is highly critical of IMF & WB but scroll down to section “How do countries get into financial trouble, the Debt Crisis” and read the third line down in the second paragraph. Corrupt and inept leaders is why the countries are poor in the first place; getting loans to fill their own pockets makes things worse. And what is a bank supposed to do when a country fails to pay back? you certainly don’t expect them to say “please consider that loan as charity, we have enough money”.
This article is even more critical of IMF & WB but go to paragraph nine and read some of the lines.
Both these authors  seem to write pages and pages about how evil the banks are (and I am not even denying that) but  very casually glide over the ineptness of the poor countries’ leaders as if it was a very, very minor cause of poor countries getting poorer. I  think the leaders of those countries are AT LEAST half the problem
Shoeb